SHRI ONKAR SINGH , HOSHIARPUR V. INCOME TAX OFFICER, WARD-3, HOSHIARPUR

ITA 48/ASR/2018

AI Insights

The case involves appeals by Onkar Singh against the orders of the Commissioner of Income-tax (Appeals)-1, Jalandhar, which upheld the additions made by the Income Tax Officer, Ward-3, Hoshiarpur, under sections 143(3)/147 of the Income Tax Act, 1961. The primary issue was the addition of Rs. 44,00,000 as unexplained cash deposit in the assessee's bank account, which was claimed to be from the sale of agricultural land. The Tribunal examined the affidavits, sale deeds, and other documents submitted by the assessee, and noted the failure of the revenue authorities to cross-examine the assessee or the purchasers of the land, leading to the conclusion that the addition was unjustified.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 115076 (ITAT-AMRITSAR)
• Duration Of Justice: 5 year(s) 6 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-08-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 02-08-2023
• Assessment Year: 2008-2009
• Appeal Filed On: 01-02-2018
• Other Referred Cases: CIT V/s Intezar Ali, Karishna V/s CIT, Mehta Parikh & Co. V/s CIT, Shri Mangat Singh vs. ITO, W-6(4), Shri Sukhwinder Singh vs. ITO, Barnala
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MOHIT KUMAR NIGAM
• Keywords: Capital Gains
• Section: 133(6); 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR. BEFORE DR. M. L. MEENA, ACCOUNTANT MEMBER AND SH. ANIKESH BANERJEE, JUDICIAL MEMBER I.T.A. Nos. 47 & 48/Asr/2018 Assessment Years: 2007-08 & 2008-2009 Onkar Singh S/o Sh. Atma Singh, Near Telephone Exhange, VPO Sham Chaurasi, Distt. Hoshiarpur. [PAN:-DXCPS2061F] (Appellant) Vs. Income Tax Officer, Ward- 3, Hoshiarpur. (Respondent) Appellant by Sh. Y. K. Sud, CA Respondent by Sh. Mohit Kumar Nigam, Sr.DR. Date of Hearing 03.08.2023 Date of Pronouncement 07.08.2023 ORDER Per: Anikesh Banerjee, JM: The instant appeal of the assessee was filed against the order of the ld. Commissioner of Income-tax (Appeals)-1, Jalandhar, (in brevity ‘the CIT(A)’) order passed u/s 250 (6) of the Income-tax Act, 1961 (in brevity the Act) for assessment year 2007-08 & 2008-09. The impugned order was emanated from the order of the ld. Income Tax Officer, Ward-3, Hoshiarpur, (in brevity the ld. AO) order passed u/s 143(3)/147 of the Act. I.T.A. Nos. 47 & 48/Asr/2018 Assessment Years: 2007-08 & 2008-2009 2 2. At the outset, both appeals are under the same factual backdrop and have a common issue. Both the appeals are taken together, heard together, and disposed of together. ITA No. 47/Asr/2018is taken as lead case. ITA No. 47/Asr/2018 3. The assessee has taken the following grounds: “1. That order of the CIT (A)-l, Jalandhar is against law and facts of the case. 2. That the Learned CIT(A)-1 ignored the cumulative circumstances of the case, which prove that the Assessee deposited Rs. 59,00,000/-(. Rs. 15,00,000/- by cheque and Rs. 44,00,000/- in cash, total Rs. 59,00,000/-) in the bank after selling 6 Kanal agriculture land at Vill. Chugatti, Distt. Jalandhar and purchased further agriculture land at Hoshiarpur against the said sale proceeds. 3. The Learned CIT (A) further ignored the judgment of the Allahabad High Court in the case of CIT V/s Intezar Ali in ITA No. 162 (2013) cited by the Assessee counsel. The facts and circumstances of the case was the same as in the case of Assessee. The Honorable High Court dismissed the appeal of the department by accepting source of deposit in the bank was sale consideration of agriculture land. 4. That the Assessee had no other source of income except agriculture income or sale proceeds of agriculture land. The amount was deposited in the bank out of sale proceeds of I.T.A. Nos. 47 & 48/Asr/2018 Assessment Years: 2007-08 & 2008-2009 3 agriculture land on the same date on 23.05,2006, when the sale deed was executed. 5. That the Learned CIT (A) rejected the appeal of the Assessee that there is no evidence, how the large amount of cash was deposited in the bank. The cumulative circumstances of the case prove that the amount was deposited in the bank out of sale proceeds of Agriculture land. It is for the department to prove that the Assessee had earned this huge amount in the year under assessment in a day. 6. That the Learned CIT (A) herself accepted the judgment of the Allahabad High Court in the case of Karishna V/s CIT (All.)142 ITR 618 in which it was held that the statement made in an Affidavit which remains uncontroverted, must inverbally be accepted as true and reliable. 7. That the Assessee filed Affidavit explaining the source of deposit out of sale proceeds of agriculture land, but the Learned AO did not cross examine the Assessee nor rebutted the content of the Affidavit must be accepted as true and reliable as held in the above noted judgment and further held in the case of Mehta Parikh & Co. V/s CIT (1956) 30 ITR 186,187 (S.C). 8. The Assessee has deposited Appeal fee of Rs. 10,000/- on 29.01.2018, BSR Code. 0282930, Challan No. 00224 and the order CIT (A) under appeal being against law and facts of the case is liable to be quashed. 3.1. The ld. AR has taken the following additional ground. “Additional Grounds of Appeal I.T.A. Nos. 47 & 48/Asr/2018 Assessment Years: 2007-08 & 2008-2009 4 Most Respectfully it is submitted that the appellant would like to raise the following ground as Additional Ground: 1. That “The AO had wrongly made an addition of Rs. 44 lacs u/s 68 of the Income tax Act without appreciating the fact that the assessee was not maintaining any books of accounts. Hence addition u/s 68 could not be made and deserves to be deleted.” 4. Brief fact of the case is that the saving bank account of assessee was credited amount to Rs. 68,28,406/- during financial year 2006-07in account no. 452102010041331 maintained with Union Bank of India, Chugatti Branch, Jalandhar. The information was received by the ld. AO. Accordingly, notice u/s 148 was issued. The assessee had not filed any return in pursuance of notice U/s 148 of the Act. During assessment the ld. AO accepted the explanation of assessee except the deposit amount to Rs. 59 lakh. The assesseeexplained that the assessee sold the property in nature of agricultural landto M/s Planet Infrastructure and Developers Pvt Ltd at 215, Punch Sheel Park, New Delhi on 23/05/2006. The amount to Rs.15 lac was received through sales against the said of property as per value executed in registered deed. The rest amount of Rs. 44 lakh was deposited in bank on same day on basis of cash received from the same party out of registered deed. The registered deed was executed on dated 23/05/2006 and value was Rs. 15 lakh. The assessee explained that the said cash was received on account of sales of agricultural land. But the ld. AO rejected the assessee’s plea. Accordingly, the addition was made amount to Rs.44,00,000/- I.T.A. Nos. 47 & 48/Asr/2018 Assessment Years: 2007-08 & 2008-2009 5 with the total income of the assessee. Being aggrieved assessee filed an appeal before the ld. CIT(A) by challenging the assessment order. The assessee filed the affidavit of the assessee and the receipt as proof of receiving of cash before the ld. CIT(A). ld. CIT(A) rejected the assessee’s plea on the ground that no computation of capital gain is filed before the ld. AO, no proof was filed related the nature of land and escapement of stamp duty. Finally, the assessment order was upheld. Aggrieved assessee filed an appeal before us. 5. The ld. AR for assessee filed written submissions which are kept in record. The ld. AR argued and invited our attention in registered sales deed, annexed in APB pages 6 to 8, copy of affidavit of the assessee as proof of receiving of cash, annexed in APB pages 9 to 10 and copy of receipt as proof of receive the money, annexed in APB page 11. The ld. AR has drawn our attention in the assessee’s saving bank account where the cash amount was deposited on dated 23/05/2006 which is the date of execution of registered deed. 6. The ld. AR argued that the affidavit of the assessee and the receipt related proof of receiving of payment were duly filed before both the revenue authorities. The ld. AR argued that ignoring the said documents the revenue authorities had not accepted the source of deposit of cash in bank account. The assessee has no other source of income except the agricultural income. So, the amount deposited in the bank account is related to the sale of agricultural land. I.T.A. Nos. 47 & 48/Asr/2018 Assessment Years: 2007-08 & 2008-2009 6 7. The ld. DR vehemently argued and relied on the orders of revenue authorities. The ld. DR invited our attention in appeal order pages 9 to 12 which is extracted as below: - “5. I have considered the facts of the case and written submissions of the assessee. Ground of appeals 1,13 and 14 are general in nature. Ground of appeals 2 to 12 are against the addition of Rs.44,00,000/- on account of cash deposit in the bank account. As per information available with the Department that the assessee had maintained a joint saving bank account No.452102010041331 with Union Bank of India, Chugatti Branch, Jalandhar. During the financial year 2006-07 relevant to AY. 2007-08 in this account there was credit of Rs.68,28,406/-. During assessment proceedings, the statement of Shri Onkar Singh recorded. In the statement he was stated that he was basically a agriculturist having 12 Acre of land from which he was deriving income of Rs.4-5 lacs annually. 6. During assessment, the assessee was asked to explain the source of cash deposited in his saving bank account. The assessee has stated that it was sale proceeds of agriculture land sold by him at Village Chohak, Distt. Jalandhar in the Financial Year 2006-07 for Rs.59,00,000/- on 23.05.2006 to M/s Plant Infrastructure and Developers Pvt. Ltd., 215, Punchsheel Park, New Delhi. The assessee received Rs.44,00,000/- in cash on date of the Registry i.e. on 23.05.2006 and Rs. 15,00,000/-through Cheque No.30222 dated I.T.A. Nos. 47 & 48/Asr/2018 Assessment Years: 2007-08 & 2008-2009 7 23.05.2006. The assessee submitted photocopy of receipt of payment of Rs.59 lac and further stated that original receipt was lying with the purchase M/s Planet Infrastructure and Developers Pvt. Ltd. The assessee has also stated he has no other source of income except agriculture income or sale proceeds of agriculture land and that the purchaser in this case was a private limited concern deals in property business used their black money in the purchase of properties by executing sale deed of less value to avoid stamp duty' and paid the balance consideration in cash of his black money. In support, the assessee filed affidavit and photocopy of receipt of payment which were self serving documents as the same were signed by the assessee himself and a witness, but not signed by any of purchasers. 7. During the assessment proceedings, the Assessing Officer confronted the facts of the assessee to the purchasers under section 133(6) of the Act, 1961 but the purchasers had denied and stated that they had purchased land only for Rs. 15,00,000/-. The conveyance deed was executed on 23.05.2006 by Mr. Onkar Singh and was witnessed by Shri Bacchan Singh and Shri Sukhveer Singh. The statement of Shir Onkar Singh that Rs.44,00,000/- alleged to have paid in cash by the company was completely false, motivated and misleading. The copy of receipts as proof of cash having been paid by the company was a blatantly false, fabricated and with malafide intentions. 8. I have considered the facts of the case and submissions of the assessee. The facts are that the appellant has shown income I.T.A. Nos. 47 & 48/Asr/2018 Assessment Years: 2007-08 & 2008-2009 8 from other sources and agricultural income. Perusal of assessment order reveals that the assessing officer has given him opportunity to explain the sources of cash deposit in his bank account but the assessee has failed to explain the sources of cash deposits in his bank account. The assessee’s submission was that he had received monetary consideration out of sale of land. 9. During the appellate proceedings, the appellant has not filed any computation of capital gains on the receipt of sale of land. The appellant has not filed any evidence to establish that the land sold by him was agricultural land or it was urban land liable for capital gains tax. The appellant never objected to the revenue authorities about escapement of stamp duty on sale of land by him. The purchaser has not confirmed the excess price alleged by received in cash by the appellant. During appeal proceedings, no documents were annexed in support of the written submission by the appellant so as to support its contentions. The receipt shown as token of receipt of cash is on plain paper. There is no evidence how the large amount of cash was received by the appellant and deposited in the bank account. The assessing officer has allowed credit of the amount of sale price received as per registered income. 10. As regard affidavit, the affidavit is self serving document. Reliance is placed on the decision of the Hon ’ble Allahabad High Court in the case of Sri Krishna Vs CIT (All 142 ITR 618 wherein it was held that Affidavit need not always be accepted as correct. It is neither a rule of prudence nor a rule of law that the statement made in an affidavit which remains I.T.A. Nos. 47 & 48/Asr/2018 Assessment Years: 2007-08 & 2008-2009 9 uncontroverted, must invariably be accepted as true and reliable. 11. In view of the above discussion, it is held that assessee failed to substantiate his cash through any explanation. It is held that the Assessing Officer has rightly made an addition of Rs. 44,00,000/-. The addition made by the Assessing Officer of Rs. 44,00,000/- is upheld. 12. In the result, the appeal is dismissed.” 8. The ld. AR further argued and relied on catena of judgments which are reproduce as below: - Hon’able Supreme Court of India Mehta Parikh & Co.v.Commissioner of Income-tax, [1956] 30ITR181 (SC). The ld AR relied on following paragraph which is reproduce as below: - “It has to be noted, however, that beyond these calculations of figures, no further scrutiny was made by the Income-tax Officer or the Appellate Assistant Commissioner of the entries in the cash book of the appellants. The cash book of the appellants was accepted, and the entries therein were not challenged. No further documents or vouchers in relation to those entries were called for, nor was the presence of the deponents of the three affidavits considered necessary by either party. The appellants took it that the affidavits of these parties were enough and neither the Appellate Assistant Commissioner, nor the Income-tax Officer, who was present at the hearing of the appeal before the Appellate I.T.A. Nos. 47 & 48/Asr/2018 Assessment Years: 2007-08 & 2008-2009 10 Assistant Commissioner, considered it necessary to call for them in order to cross-examine them with reference to the statements made by them in their affidavits. Under these circumstances it was not open to the Revenue to challenge the correctness of the cash book entries, or the statements made by those deponents in their affidavits.” ITAT-Chandigarh Shri Mangat Singh vs. ITO, W-6(4), ITA No. 246/CHD/2018 Date of pronouncement-15/01/2019. The relevant paragraphs: - “7. A perusal of the above shows that the Assessing Officer traced the PANs of the three persons and failed to carry out any other activity. A perusal of the impugned order shows that the affidavit of Smt. Harjit Kaur which was filed to support the assessee's claim, was discarded as that being of an interested person. The assessee, as per record is supposed to have also filed the Report of GAMADA which has been discarded on the plea that the Sale Deed registered reflects only an amount of Rs. 47,81,750/-. We find that I n the facts of the present case, the tax authorities have proceeded to take action qua the transactions against the most vulnerable person. There is nothing on record to show that the assessee having sold his land continued to have any hold over the purchasers. The AO having full authority to call for their production in the peculiar facts instead of disbelieving the assessee ideally should have cross- checked the facts from the purchasers who consciously chose not to appear I.T.A. Nos. 47 & 48/Asr/2018 Assessment Years: 2007-08 & 2008-2009 11 before the Department and may have reason to not address the correct facts. At this juncture, it would not be out of context to refer to the grounds raised by the assessee in the present appeal wherein ground No.1 and 10 are general: 2. That addition made of Rs. 3,23,50,000/- under the provisions of section 68 of the Act is illegal, unjustified and unwarranted by the facts of the case, because the Assessee is an agriculturist and is not maintaining books of A/c. 3. That the AO has not found credit in the books of the Assessee and saving A/c maintained by the Assessee cannot be treated as books of A/c as such addition made cannot be sustained. 4. That the Learned CIT A-(2) ignored the cumulative circumstances of the case which proves that the Assessee deposited Rs. 3,23,50,000/- in cash plus Rs. 47,81,250/- by cheque (in total Rs. 3,71,33,250/-) in the bank after receiving this amount from Dilraj Singh Karta HUF, Sh. Sukhdeep Singh Karta HUF and Sh. Satpal Singh after selling 30 Kanal 12 Maria agriculture land sold on dated 28.01.2011 at Vill. Ferozepur, Distt. Mohali. 5. That the Assessee filed Affidavit dated 08.01.2015 in which the Assessee has explained that he is doing agriculture farming and have no other source of income. The Assessee further stated that the deposit in the bank was made out of sale proceeds of 30 Kanal 12 Maria agriculture land against which the purchaser paid Rs. 47,81,250/- through cheque (executing for Sale Deed) and paid in cash Rs. 3,23,50,000/- in token of the receipt of sale. 6. That the Assessee deposited the said money in his bank. The Learned CIT (A) rejected the appeal of the Assessee treating amount of Rs. 3,23,50,0007- as an unexplained income on account of unexplained cash U7S 68 of the LT.Act 1961. 7. That the assessee has duly explained the source of deposit in the bank, now it is for the department to prove that the Assessee had earned this huge amount in the year under assessment in a day(overnight) and the circumstantial evidence proves that the deposit was made after selling agriculture land. I.T.A. Nos. 47 & 48/Asr/2018 Assessment Years: 2007-08 & 2008-2009 12 8. That the Honorable High court of Allahabad in the case of CIT V7s Intezar Ali in ITA No. 162 (2013) dismissed the appeal of the department by accepting source of deposit in the bank was sale consideration of agriculture land. The facts and circumstances of the case is the same as in the case of the Assessee. 9. That the Learned AO did not cross examine the assessee on the point of Affidavit filed by the Assessee and her sister, nor rebutted the content of the Affidavit, which remain uncontroverted, must inverbally be accepted as true and reliable as held in case of Mehta Parikh & Co. V7s CIT (1956) 30 ITR 186, 187(S.C) and Kanshna V7s CIT (All) 1 42 ITR 618.. 8. On a perusal of the record, it is seen that admittedly the tax authorities have taken the easy route by insisting upon the taxpayer to produce the parties on whom he admittedly had no control. The taxpayer after having sold his land has no hold to cause the reluctant purchaser to appear. In the facts of the present case, admittedly 30 Kanal 12 Marla have been sold in village Ferozepur Bangar, Distt. Mohali on 28.01.2011 as per the Sale Deed which has been taken note of by the Department. The fact that it reflected an amount of Rs. 47,81,250/- is a matter of fact. The short issue for consideration was the value of the land sold at the relevant point of time. The AO in the facts of the present case should have carried out necessary enquiries as he had the PAN details of the purchaser. Accordingly, we find that in the peculiar facts and circumstances of the present case, the Tax Authorities have failed to exercise their powers which they are vested with and in the face of the inability of the assessee to produce the concerned purchasers, the Department who has the PAN numbers I.T.A. Nos. 47 & 48/Asr/2018 Assessment Years: 2007-08 & 2008-2009 13 and has traced the parties in Amritsar should have no hesitation in calling forth and examining the issues as the purchasers may be front-men of some builders etc. having deep pockets. The relevant facts in the form of the value of the specific property at the relevant point of time may also be a relevant aspect to be taken into consideration. Accordingly, in the interest of justice, the issue is restored back to the file of the AO with a direction to pass a speaking order in accordance with law after giving the assessee a reasonable opportunity of being heard. The assessee in its own interests is advised to place all relevant facts and evidences on record. 9. In the result, appeal of the assessee is allowed for statistical purposes.” ITAT-Chandigarh Shri Sukhwinder Singh vs. ITO,Barnala, ITA No. 930/CHD/2018 Date of pronouncement-05/08/2022. The relevant paragraphs: - “15. The Ld. Counsel for the assessee reiterated the submissions made before the authorities below and drew our attention towards page no. 79 of the assessee’s paper book which is the copy of the cash flow statement and claimed that it was furnished before the AO as well as the Ld. CIT(A). It was submitted that the amount in question was deposited out of the cash withdrawal which was available with the assessee as per the cash flow statement however neither the AO nor the Ld. CIT(A) appreciated the facts under consideration in right perspective and neither the AO nor the Ld. CIT(A) commented upon the cash I.T.A. Nos. 47 & 48/Asr/2018 Assessment Years: 2007-08 & 2008-2009 14 flow statement furnished by the assessee. He requested to restore this issue back to the file of the AO to be adjudicated afresh after considering the cash flow statement of the assessee. 16. In his rival submissions the Ld. DR strongly supported the impugned order passed by the Ld. CIT(A) and reiterated the observations made by the AO in para 3.17 of the assessment order. 17. We have considered the submissions of both the parties and perused the material available on the record. In the present case it appears that the cash flow statement claimed to be furnished by the assessee was not considered either by the AO or by the Ld. CIT(A) as there was no discussion either in assessment order or in the impugned order about the cash flow statement furnished by the assessee. We, therefore, by considering the totality of the facts as discussed hereinabove, deem it appropriate to remand this limited issue relating to the deposit of Rs. 22,50,000/- to the file of the AO to be adjudicated afresh in accordance with law after providing due and reasonable opportunity of being heard to the asessee. 18. In the result, appeal of the assessee is partly allowed for statistical purposes.” I.T.A. Nos. 47 & 48/Asr/2018 Assessment Years: 2007-08 & 2008-2009 15 9. We heard the rival submission and relied on the documents available on the records. The assessee was able to proof that the sales transaction was executed on 23/05/2006. The crediting of cheque amount to Rs. 15 lakh is fully related on sales of agricultural land. The ld. AO had not agitated the issue related calculation of capital gain and nature of property which was sold during the impugned year. The ld. CIT(A) has not agitated the issue which was not the part of assessment year. During the assessment proceedings the assessee submitted the affidavit and payment receipt. The ld. AO had not exercised his jurisdiction to cross-examine the assessee and the witness. Rather only to accept statement from purchaser-company related the transaction. The assessee filed an affidavit dated 26/12/2014 in which the assessee has explained that he is doing agriculture farming and have no other source of income. The assessee further stated that the deposit in the bank was made out of sale proceeds of agriculture land against which the purchaser paid Rs. 15 lakh through cheque (executing for Sale Deed) and paid in cash Rs. 44,00,000/- in token of the receipt of sale. The revenue authorities never confronted the affidavit of the assessee duly filed both the stages. We respectfully relied on the order Mehta Parikh & Co, (supra). Both the payments are coherent in nature. The cash was even deposited on the date of execution of salesi.e., on dated 23/05/2006. In our considered view, the revenue has not taken any pain to complete the verification or has not confronted the affidavit of the assessee during assessment and appeal stages. We further relied on the order Shri Mangat Singh, (supra). We find that the I.T.A. Nos. 47 & 48/Asr/2018 Assessment Years: 2007-08 & 2008-2009 16 assessee was able substantiate the source of cash deposit in bank amount to Rs. 44 lakh which is part of consideration of sale proceed. We dismissed the appeal order. The addition U/s 68, amount of Rs. 44 lakh is quashed. Accordingly, Grounds of appeal of the assessee are allowed. The additional ground which is raised by the ld. AR is only remained for academic purpose. 10. The bench has noticed that the issues raised by the assessee in the above appeals are equally similar on set of facts and grounds. Therefore, it is not imperative to repeat the facts and various grounds raised by the assessee. Hence, the bench feels that the decision taken by us in ITA No.47/Asr/2018 shall apply mutatis mutandis in the ITA No. 48/Asr/2018 also. 11. In the result, both the appeals of the assessee ITA No. 47&48/ASR/2018 are allowed. Order pronounced in the open court on 07.08.2023 Sd/- Sd/ (Dr. M. L. Meena) (ANIKESH BANERJEE) Accountant Member Judicial Member AKV Copy of the order forwarded to: (1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By order