Shri. Sharad Ramchandra Akolkar, Pune V. Income -Tax Office, Ward -4, Ahmednagar

ITA 554/PUN/2020

AI Insights

The case involves Shri Sharad Ramchandra Akolkar, who appealed against the order of the CIT(A)-2, Pune, which confirmed the addition of Rs. 54,79,500 to his income for the assessment year 2011-12. This amount was categorized as 'income from other sources' due to unexplained cash deposits in his bank accounts, which exceeded the sale proceeds from agricultural land sales documented through cheques. The appellant argued that these deposits were proceeds from the sale of agricultural land, which should be exempt from tax. However, the Tribunal found the appellant's explanations and evidence insufficient to substantiate this claim, leading to the dismissal of the appeal.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 124419 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 24-01-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 12-10-2020
• Other Referred Cases: Dr. Prakash Tiwari Vs. CIT, Himmatram Laxminarain Vs. CIT, Deo Narayan Bhadani Vs. CIT, Smt. Vasantibai N. Shah Vs. CIT, Bhawarlal C. Bafna Vs. Asstt. CIT
• Laws Referred To: The Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: NIKHIL DEOTARSE
• Section: 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH, PUNE BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER ITA No. 554/PUN/2020 : A.Y. 2011-12 Shri Sharad Ramchandra Akolkar C/o. Shantnu Sharad Akolkar Flt No. 2104, Trendy Towers, Tower 33, Amanora Township, Pune. PAN: ANGPA 2180 C Appellant Vs. The I.T.O. Ward 4, Ahmednagar Respondent Appellant by : Shri Nikhil Deotarse Respondent by : Shri M.G. Jasnani Date of Hearing : 25-01-2023 Date of Pronouncement : 31-01-2023 ORDER PER SHRI PARTHA SARATHI CHAUDHURY, JM This appeal preferred by the assessee emanates from order of the ld. CIT(A)-2, Pune dated 24-01-2020 for assessment year 2011-12 as per the following grounds of appeal. In view of statements of facts narrated concisely in Form No. 35, your appellant moves this appeal before your honour in hope of judicious action on following grounds of appeal, which are without prejudice to and independent of each other. 1. Ld. CIT(A) erred in confirming addition of Rs. 54,79,500/- received as "On Money" on sale of agricultural land, shown as such in ITR filed and deposited into bank accounts. The addition hence, may be deleted entirely. 2. Without prejudice to above and assuming that appellant received any income, ld. CIT(A) erred in confirming addition made at Rs. 54,79,500/- as "Income from Other Sources", when AO failed to specify any source to categorize alleged income under head of "Income from Other Sources". The assessment order may, therefore, be declared void-ab-initio and bad-in-Iaw and addition may be deleted entirely. ~ 3. Ld. CIT(A) further erred in traveling beyond scope of assessment order and sitting in reassessment by suggesting different head of income for addition, when it was never department's case to make any addition under provisions of chapter VI, especially section 69 of The Income Tax Act, 1961. The appellate order may, therefore, be declared bad-in-Iaw and AO may not be allowed to change head of income of addition. 4. Ld. CIT(A) also erred in traveling beyond scope of assessment order and suggesting that change of head of income is defect curable under section 292BB, when 2 ITA 554/PUN/2020 Sharad Ramchandra Akolkar A.Y 2011-12 it was never department's case to make any addition under provisions of chapter VI, especially section 69 of The Income Tax Act, 1961. The appellate order may, therefore, be declared bad-in-Iaw and AO may not be allowed to change head of income of addition. 5. Appellant craves permission to add to, alter or withdraw any of the grounds of appeal at the time of hearing. 2. The ld. CIT(A) observed and held as follows: 5.3 The facts and ground of the case, assessment order and the written submission have been perused carefully. It is seen that during the year under consideration, the appellant made cash deposits of Rs. 54,79,5001- in his savings bank accounts as under:- Sr.No. Name of the Bank Amount deposited 1. Ahmednagar Merchant Co-op. Bank Ltd. Rs. 38,59,000/- 2. Ahmedagar Shahar Sahakai Bank Ltd. Rs. 10,00,000/- 3. Bhingar Urban Co-op. Bank Ltd. Rs. 6,20,500/- Total Rs. 54,79,500/- Regarding the deposit, the appellant argued before the AO that the alleged cash deposit was made out the sale proceeds received from selling of the agricultural lands on 05/07/2010. However, the AO stated in the assessment order that the entire sale considerations amounting to Rs. 32,00,0001-, Rs. 4,95,0001- and Rs. 4,11,0001- were received through cheques. Since the appellant could not produce any plausible evidences, therefore, the AO considered the entire amount of cash deposit at Rs. 54,79,5001- as income from other sources and added to the total income of the appellant. 5.3.1 During the appeal proceedings, the appellant vide written arguments stated that the appellant sold 32 Acres agricultural lands belonged to himself and his family members on 13/07/2010 through 3 sales deeds and the sale proceeds received were deposited in bank account as under:- Sr.No. Bank Name Account No. Date Amount 1. Ahmednagar Merchant Bank 0010021000013083 13-07-2010 38,59,000 2. Ahmednagar Shahar Sahakari Bank Ltd. 101103130003629 13-07-2010 5,00,000 3. Ahmednagar Shahar Sahakari Bank Ltd. 101103140004629 13-07-2010 5.00,000 4. Bhingar Urban Co-op. Bank Ltd. 100503130017450 13-07-2010 5,00,000 5. -do- 100504180007600 07-02-2011 80,000 6. -do- 100504180007600 14-02-2011 40,000 7. -do- 100504180007450 14-04-2010 500 Total 54,79,500 The appellant further argued that, since the sale proceeds received from selling of agricultural lands which were subsequently deposited in the bank account also pertake the character of agricultural income only and the same is exempted from taxation. Taking this plea, the appellant requested to delete 3 ITA 554/PUN/2020 Sharad Ramchandra Akolkar A.Y 2011-12 the addition made by the AO. 5.3.2 In support of his claim, during the appeal proceedings, the appellant only submitted single copies of only Index-II of 3 sale deeds (clearly not visible) and copy of ITR Acknowledgement and computation of income for the year under consideration. The argument of the appellant that the sale proceeds received were subsequently deposited in the bank account in cash is not acceptable for the simple reason that the AO has already observed during the assessment proceedings that the entire amount of sale proceeds were received by cheque, as such the appellant's claim at appellate stage is contradictory. Also, it seems the appellant knowingly did not submit the full sets of the sale deed wherein the payment schedules are mentioned. Also, the appellant did not produce his bank statements and claimed in casual manner that he deposited cash on the same day the sale deeds were executed i.e. on 13/07/2010. 5.3.3 It is also seen that the appellant sold three agricultural lands for a consideration amounting to Rs. 41,06,000/- (Rs. 32,00,000/- + Rs. 4,.95,000/- + Rs. 4,11,000/-), whereas the appellant deposited cash in bank at Rs. 54,79,500/-. Even if though not convinced or accepted, the contention of the appellant is considered for a moment, the balance amount of Rs. 13,73,500/- still remains to be explained, in which the appellant failed miserably. Also it is seen that the appellant relied on few case laws in his written arguments to strengthen his claim. None of these cases, with due respect to the Hon’ble Courts and Tribunals is applicable to the fact of the appellant’s case. It is imperative to say that onus lies upon the appellant to produce the basic evidences such as payment schedule, bank statements, sale deed copy, documentary evidence evidencing the agricultural land, confirmation letters for having paid/received cash etc., in which the appellant failed miserably. Interestingly, the appellant avoided himself from producing the full sets of the sale deeds, bank statements etc. and also the Index-II submitted was not clearly visible. In view of this, I hold that in the absence of all the basic requirement of the evidences as enlisted above, the case laws relied upon cannot save the appellant from rigors of taxation. Therefore, it is held that the source and genuineness of the cash deposited in the bank accounts remains unverifiable and unsubstantiated. 5.3.4 In view of the above facts and discussion, it is held that the AO was perfectly justified in treating the alleged cash deposit amounting to Rs. 54,79,500/-as income from other sources. Accordingly, the sole ground of appeal raised by the appellant is dismissed and the order of the AO is upheld.” 3. We have considered the submissions of the parties herein, analysed the facts and circumstances in this case. Admittedly, the assessee received the entire sale consideration amounting to Rs. 32,00,000/-, Rs. 4,95,000/- and Rs. 4,11,000/- through cheques. The assessee could not produce any evidences regarding the source of cash deposits of Rs. 54,79,500/- over and above the aforestated full sale consideration received in cheques and therefore, the revenue added the same in the hands of the assessee as income from other sources. As evident from para 5.3.2 of the ld. CIT(A)’s order that the assessee only submitted single copy of the Index-II of three sale deeds which were even 4 ITA 554/PUN/2020 Sharad Ramchandra Akolkar A.Y 2011-12 not clearly visible, copy of ITR acknowledgement and computation of income for the year under consideration. The argument of the assessee that the sale proceeds received were subsequently deposited in the bank account in cash is not acceptable since it has already been examined by the ld. A.O and upheld by the ld. CITA) that the entire sale proceeds were received by cheques and therefore, for this additional cash deposit, the assessee should have explained the sources of such income. In this case, the assessee should have produced the basic evidences such as payment schedule, bank statements, sale deed copies, confirmation letter for having received/paid cash etc., and in this exercise, the assessee failed miserably. Even it has been brought on facts that the assessee avoided himself from producing full set of sale deed, bank statement and even Index-II was not clearly visible. Therefore the sources and genuineness of the cash deposit amounting to Rs 54,79,500/- in the bank account of the assessee remained unverified and unsubstantiated. Even before us the assessee merely reiterated the submissions placed before the subordinate authorities and could not place on record any satisfactory reasons regarding such huge cash deposits which were over and above the sale consideration amounts received in cheques. There are plethora of judicial decisions, where the assessee has not been able to explain a particular source of cash, in such circumstances, the assessee has been held liable for tax regarding those unexplained sources of income. The Hon’ble Madhya Pradesh High Court in the case Dr. Prakash Tiwari Vs. CIT (1984) 148 ITR 474 (MP) held, where the assessee could not give satisfactory explanation regarding sources of amount then such amount was held assessable as unexplained investment under section 69 of the Act. Hon’ble Punjab High Court in the case of Himmatram Laxminarain Vs. CIT (1986) 161 ITR 7 (Punj) 5 ITA 554/PUN/2020 Sharad Ramchandra Akolkar A.Y 2011-12 held that in a case where it was found that a secret business was conducted wherein the assessee has invested a certain amount and it was held that such amount was assessable as income of the assessee u/s 69 of the Act. Hon’ble Patna High court in the case of Deo Narayan Bhadani Vs. CIT (1987) 164 ITR 501 (Pat) wherein certain cash deposits were made in a bank by the karta of the assessee-HUF. The explanation that the source of such deposits was withdrawals from a bigger HUF was found to be false. There was no evidence that the karta had any source of income as an individual. It was held that the amount of such deposits were assessable as income of the assessee-HUF. The Hon’ble Bombay High Court in the case of Smt. Vasantibai N. Shah Vs. CIT (1995) 213 ITR 805 (Bom) held that the Tribunal was right in law in sustaining the addition made by the A.O as the assessee’s undisclosed income invested in the purchase of jackpot winning ticket . The Hon’ble Madras High Court in the case of Bhawarlal C. Bafna Vs. Asstt. CIT (2002) 257 ITR 687 where the assessee has failed to explain the cash balances in spite of several opportunities, the addition was held justifiable. 4. The Income-tax legislation is a welfare legislation and not a penal legislation as such. However, the tax collected goes on to build the infrastructure of our Nation and therefore, where the tax planning is acknowledged tax avoidance has to be penalised. When a benefit of doubt is given in favour of an assessee, at the same time, where the assessee tries to conceal his income such act has to be brought in the purview of taxation as per law. In the present case before us admittedly, whatever sale consideration the assessee has received they were received in cheques. But in addition to such receipt the assessee has also deposited cash of Rs. 54,79,500/-. The assessee never explained the source of such cash deposit in his bank 6 ITA 554/PUN/2020 Sharad Ramchandra Akolkar A.Y 2011-12 accounts. Therefore, we do not find any infirmity with the findings of the ld. CIT(A) and the order confirming the addition is upheld. The grounds of appeal of the assessee are dismissed. 5. In the result, appeal of the assessee is dismissed. Order pronounced in the open court on 31 st January 2023 Sd/- sd/- (INTURI RAMA RAO) (PARTHA SARATHI CHAUDHURY) ACCOUNTANT MEMBER JUDICIAL MEMBER Pune; Dated : 31 st January 2023 Ankam Copy of the Order forwarded to : 1. The Assessee 2. The Respondent 3. The CIT(A)-2, Pune. 4. The Pr. CIT- I pune 5. DR, ITAT, ‘B’ Bench Pune 6. Guard File. //सत्यापित प्रपत// True Copy// BY ORDER, Sr. Private Secretary ITAT, Pune 7 ITA 554/PUN/2020 Sharad Ramchandra Akolkar A.Y 2011-12 Date 1 Draft dictated on 25-01-2023 Sr.PS 2 Draft placed before author 30-01-2023 Sr.PS 3 Draft proposed and placed before the second Member JM/AM 4 Draft discussed/approved by second Member AM/JM 5 Approved draft comes to the Sr. PS/PS Sr.PS/PS 6 Kept for pronouncement on 31-01-2023 Sr.PS/PS 7 Date of uploading of order 31-01-2023 Sr.PS/PS 8 File sent to Bench Clerk 31-01-2023 Sr.PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R 11 Date of dispatch of order