TEJ KAUR WIFE OF SH. NAHAR SINGH NEAR DAV SCHOOL WALI GALI WARD NO. 14 MANSA, PUNJAB V. INCOME TAX OFFICER WARD 1(4) MANSA , PUNJAB

ITA 6/ASR/2024

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 1803 (ITAT-AMRITSAR)
• Duration Of Justice: 5 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-06-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 05-05-2024
• Assessment Year: 2012-2013
• Appeal Filed On: 02-01-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRIYANKA PATEL
• Keywords: Reopening of assessment; Reason to believe
• Section: 147; 148; 143(3); 250; 69A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR. BEFORE DR. M. L. MEENA, ACCOUNTANT MEMBER AND SH. UDAYAN DASGUPTA, JUDICIAL MEMBER I.T.A. No.6/Asr/2024 Assessment Year: 2012-13 Tej Kaur Wife of Nahar Singh Near DAV School Wali Gali Ward No. 14 Mansa, Punjab. [PAN:-CCZPK2470F] (Appellant) Vs. ITO-Ward 1(4), Mansa, Punjab. (Respondent) Appellant by Sh. Sudhir Sehgal, Adv. Respondent by Smt. Priyanka Patel, Sr. DR Date of Hearing 06.05.2024 Date of Pronouncement 05.06.2024 ORDER Per: Udayan Dasgupta, JM: This appeal is preferred against the order of the ld. Commissioner of Income Tax (Appeals) NFAC, Delhi [in brevity the CIT(A)] order passed u/s 250 of the Act 1961, dated 15/11/2023, which has arisen out of the order of the ITO, Ward 1(4) Mansa, dated 14.12.2019 passed u/s 147/ 143(3) of the Act 1961. 2. The assessee has taken the following grounds which are as follows: I.T.A. No.6/Asr/2024 Assessment Year: 2012-13 2 “1.a). That the Ld. Commissioner of Income Tax (Appeals),NFAC, Delhi has erred in confirming the action of the Assessing Officer for initiation of proceedings u/s 147 leading to issuance of notice u/s 148. b). That there was no valid reason to believe that the income of the assessee has escaped assessment and, thus, the action of the CIT(A) in confirming the issue of notice u/s 148 is bad in law. c) Notwithstanding the above said ground of appeal, the Ld. CIT(A) has erred in confirming the addition of Rs. 2,12,96,000/- as unexplained cash deposit u/s 69 in the income of the assessee. 2. a). That the Ld. CIT(A) has failed to appreciate the fact that the lady is at present 91 years of age and is bed ridden and has no other source of income and the amount was deposited by her in her Saving Bank Account out of sale of agricultural land. b). That the Ld. CIT(A) has failed to appreciate that there is nexus of deposit of amount in the Saving bank account of assessee viz- the sale of agricultural land and has failed to take into consideration that fact. 3. a). Notwithstanding the above said ground of appeal, the Ld. CIT(A) has failed to appreciate that the land belonged to the HUF of her husband and being an ancestral land the same could not have been assessed in the individual status of Smt. Tej Kaur and, thus, the reassessment proceedings are liable to be quashed. b). That the Ld. CIT(A) has ignored the documentary evidence of Kursinama filed during the course of assessment proceedings. 4. Notwithstanding the above said ground of appeal, the Ld. CIT(A) has erred in not considering the argument of the assessee that after the death of her husband, Sh. Nahar Singh on 30.12.1991, the agricultural land was inherited by five daughters and their mother and, hence, the 1/6 th share only could have been assessed as per section-8 of Schedule of Hindu S uccession Act in the hands of the appellant lady. 5. That the appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off.” I.T.A. No.6/Asr/2024 Assessment Year: 2012-13 3 3. Incourse of hearing before the Tribunal, the Ld. AR of the assessee, has withdrawn ground numbers 1(a) and 1(b), and stated that he is not inclined to press the same. These two grounds are treated as withdrawn. The remaining grounds of appeal, relates to only one single issue relating to addition of Rs. 2,12,96,000/-, on account of unexplained cash deposit in bank account. The assessee has also taken an alternative ground (Ground No.3 ), that the lands which is the subject matter here , actually belongs to the HUF of her husband, and was not liable to be assessed in the individual status of the assessee ( Smt. Tej Kaur ) and by way of Ground No.4, another alternative ground has been taken that since the assessee had only 1/6 th share in the land , as such, the total addition as made in the hands of assessee was not justifiable. 4. The facts leading to initiation of proceedings u/s 148 had been that the Assessing Officer as per AIR information received the information that there has been deposit of Rs. 2,78,60,000/- by the assessee in her bank account, maintained with HDFC Bank Ltd., Mansa and the assessee was not an Income tax assessee and, accordingly, the Assessing Officer issued a letter, dated 22.01.2019, asking her for source of deposit of Rs. 2,78,60,000/- vide letter, dated 22.01.2019 and to which, the lady replied that she had sold her ancestral agricultural land and deposited the sale consideration of land in her saving bank account. 5. The Assessing Officer held that no documentary evidences had been filed and she has also not filed her return of income for Asstt. Year 2012-13 and also there was no substantial income regarding the source of Rs. I.T.A. No.6/Asr/2024 Assessment Year: 2012-13 4 2,,78,60,000/- and which remains unexplained and, therefore, the Assessing Officer held that no return of income had been filed and, as such, he formed a reason to believe that the income of the assessee has escaped assessment and accordingly, he recorded the reasons , dated 18.03.2019 ( which has been placed in PB-I, pages 1 to 2 filed by the assessee ) and notice u/s 148 issued accordingly. 6. In response to notice u/s 148, the assessee filed her return of income on 28.04.2019, though, the assessee had already filed the original return on 31.03.2017 ( as per copy placed at pages 4 to 5 of the Paper Book), which the AO, treated invalid. It has been argued by the Ld. AR of the assessee, that the ‘ancestral agricultural land’ was transferred in the name of assessee after the death of her husband on 30.12.1991, ( death certificate copy filed in page -8 of PB ), and, thereafter, the land was transferred in the name of Smt. Tej Kasur (assessee). It was also pointed out that Smt.Tej Kaur have five daughters. 7. It was contended by the Ld. AR that the source of cash deposit was out of sale proceeds of the ancestral agricultural land and the lady has no other source of income except agricultural income and with regard to initiation of proceedings u/s 148, it has been argued that the Assessing Officer had only relied upon the AIR information, without any independent application of mind and, accordingly, it was stressed before us that the Assessing Officer having not formed his own belief . 8. The another contention raised by the Ld.AR was that reopening had been made on the basis of wrong reasons, since it has been mentioned that the assessee was a non-filer and, whereas, as per document on record, the assessee had filed her return of income on 31.03.2017 and in the reasons, it I.T.A. No.6/Asr/2024 Assessment Year: 2012-13 5 has been mentioned that the assessee has not filed her return of income and, thus, there has been wrong reason to believe, which forms the basis of reopening of assessment and for that, the Ld.AR of the assessee relied upon certain case laws, copies of which have been placed in the Judgement Set-II filed before the bench . ( Since the grounds of appeal regarding issuance of notice u/s 148 , has been withdrawn, we are not inclined to adjudicate on the same ). 9. On merits of addition, it has been argued that the land was sold by way of four registered sale deeds and the total of the sale consideration recorded in the registration deeds was 65,64,000/-, though, the amount actually received in cash was much more , which is evident from the fact that major portion of sale deeds were executed on 28.02.2012 and also the cash was deposited in the bank account of Smt. Tej Kaur on 28.02.2012 as per copy of Bank account ( placed in the PB at page 53 ) and the Ld. Assessing Officer, out of cash deposits of Rs. 2,78,60,000/- has given a benefit of the amount, as per total of the registered sale deeds to the tune of Rs. 65,64,000/- and the balance amount of Rs. 2,12,96,000/-, was added back. 10. It has been argued by the Ld. Counsel of the assessee, that it is a fact that the ninty one-year-old lady has no other source of income, except agricultural income and there is direct nexus of the amount deposited in the bank account of the lady viz-a-viz execution of sale deeds and, though, the registered sale deeds together total to Rs. 65,64,000/-, the lady has received the cash over and above the amount stated in the registered title deeds is proved from the nature of transactions and date of deposit which has direct nexus with the sale deeds as executed. Further, it has been argued that even the Ld. I.T.A. No.6/Asr/2024 Assessment Year: 2012-13 6 Assessing Officer has accepted that there is no other source of income of the assessee and, thus, the amount, which have been deposited as cash is out of sale proceeds of ancestral agricultural lands, and, further, it has been brought to our notice that the amount as deposited in the Saving Bank account have been withdrawn in entirety and given by the assessee lady to her five daughters, who had purchased further agricultural lands out of the amount so received , from their mother. The Ld.AR invited our attention to the order of CIT(A) where by way of written submissions, as reproduced at pages 4 to 5 of the order of CIT(A), in which, it has been contended that the further agricultural land had been purchased in the names of members/co- parceners of the HUF, after the sale of land and for that a separate Paper Book-II, had been filed before us and wherein, our attention was drawn to the fact that in the cases of daughters of the assessee, verification of financial transactions was undertaken by the respective assessing officers, to which, the daughters of Smt. Tej Kaur (assessee) have replied . Smt. Sukhjit Kaur, Smt. Jasvir Kaur, and Smt. Charanjit Kaur , the daughters of the assessee , explained that they have purchased further agricultural lands, out of the amount received from their mother, who had sold the agricultural land inherited by her from her husband after his death and in the case of Smt. Charanjit Kaur, one of the daughters, the proceedings was initiated u/s 147 for purchase of agricultural land, it was explained by her that land was purchased by her out of funds received from her mother out of sale of agricultural land and her assessment had been framed at NIl Income. Hence, it was contended that the department having accepted the source in the case of purchase of land by the co-parceners ( daughters of the assessee ) out of I.T.A. No.6/Asr/2024 Assessment Year: 2012-13 7 the sale proceeds of inherited agricultural lands by their mother, the addition in the hands of Smt. Tej Kaur was not justified. 11. Further, the assessee relied upon following cases, where on similar facts and circumstances, the assessee sold the agricultural land and the assessee did not have any source of income and there was a nexus of the amount deposited in the bank account viz-a-viz sale deed executed by them, the source of deposit of cash in the bank account have been accepted, out of sale proceeds of agricultural land, though, the registered amount of sale deed was less than the deposit of cash in those cases:- 1. Harbans Singh Vs Income Tax Officer (2023) 106 ITR (Trib.) 20 (Amritsar) 2. Jagir Singh Vs ACIT (2023) 106 ITR (Trib.) 233 (Chandigarh) 3. Sh. Pappu Ram Saran Vs. Income Tax Officer I.T.A. No. 1303/JP/2018 (Jaipur Bench) 12. Thus, it was argued by the Ld.AR of the assessee that the CIT(A) was not justified in sustaining the addition of Rs. 2,12,96,000/- and treated the same unexplained cash deposit. 13. The Ld. DR argued with regard to the issuance of notice u/s 148 that there was no wrong reason to believe by the Assessing Officer as original return filed on 31.03.2017 have been held to be invalid by the Assessing officer and there has been independent application of mind by the Assessing officer and, as such, the reopening of the case by the Assessing Officer u/s 148 is valid. On merits, the Ld. DR relied upon on the finding of the Assessing Officer and arguments contained in the CIT(A) order. 14. We have carefully gone through the assessment order and finding of the CIT(A) , and the arguments of both the parties and have gone through the I.T.A. No.6/Asr/2024 Assessment Year: 2012-13 8 Paper Book filed by the assessee , alongwith case laws as filed and relied upon by the Ld. AR during the course of hearing. The facts are undisputed that there has been cash deposit in the bank account of old lady to the tune of Rs. 2,78,60,000/- on 28.02.2012 and, though, it was stated by the lady in reply to notice u/s 133(6), that the said amount of cash deposit was out of sale proceeds of ancestral agricultural land, inherited by the assessee after the death of her husband and the Assessing Officer and CIT(A) have only given the benefit of amount of sale as recorded in the registration deed, which is to the tune of Rs. 65,64,000/- only, and had not accepted the contention of the assessee that cash has been received , over and above the registered sale amount from the sale of ancestral agricultural land by the assessee. 15. It is also undisputed that the lady is 91 years ( ninty one years ) of age and have no other source of income at all except agricultural income and there is close nexus to the sale of inherited agricultural land and the deposit in the bank account of the assessee and further to that, there is force in the arguments of the Ld. Counsel that in the case of daughters of assessee, due enquiries were made about the purchase of agricultural land by them and which was explained by the daughters of the assessee as having been invested out of the amount received from their mother, who had sold the ancestral agricultural land and which fact is also evident from the fact that the assessee had withdrawn the amount from her bank account immediately, after the deposit of amount out of sale proceeds of agricultural land and in the cases of daughters of assessee, the enquiries were initiated by the department, but lateron, the department have accepted the source of such I.T.A. No.6/Asr/2024 Assessment Year: 2012-13 9 investment by the daughters out of the sale proceedings of ancestral agricultural land by the assessee and, thus, on the same facts and circumstances, the contention of the assessee have been accepted in the cases of daughters 16. We have also gone through the judgment of Amritsar Bench in the case of Harbans Singh, wherein on similar facts and circumstances, after relying upon the judgment of the Chandigarh Bench of the ITAT and of the Co- ordinate ‘Jaipur Bench’ on the similar facts and circumstances, the addition have been deleted. In the case of Sh. Harbans Singh, the judgment is reported in (2023) 106 ITR (Trib.) 20 (Amritsar), in which, it has been held as under:- “That the entire evidence of the assessee depicted that the agreement was duly executed by the purchaser and seller, later the purchaser denied the agreement and rejected the argument for transfer of cash to the seller. During assessment, the AO has only retied on the statement of the purchaser and no other circumstances evidence was placed against the assessee. The department was not able to adduce any contradictory fact against the submission agriculture land and supported the agreement of sale. Therefore, the addition under section 69A was to de deleted.” 17. In the case of judgment of Co-ordinate Jaipur Bench ITAT in the case of Pappu Ram Saran, the following finding have been recorded on similar facts and circumstances:- “ We have considered the rival submission as well as relevant material on record. The AO has made addition on account of cash deposit of Rs. 27,50,000/- in the bank account of the assessee on 09.04.2019 since the assessee has not appeared before the AO nor made compliance to the various notices issued by the AO, therefore, the assessment was comploeted I.T.A. No.6/Asr/2024 Assessment Year: 2012-13 10 ex-parte u/ s144 r.w.s 147 of the Act. Before the Ld. CIT(A) the assesse produced sale deed as well as bank account and also detailed submission in respect of the source of cash deposit made in the bank account. The Ld. CIT(A) called for remand report wherein the AO has pointed out that the sale deed dated 08.04.2009 shows the sale consideration of Rs. 6,45,000/-. The Ld. CIT(A) has consequently allowed the claim of the assessee only to the extent of Rs. 6,45,000/- as stated in the sale deed. The bench has raised a query about the discrepancy in the name of mentioned in the sale deed and the name of the assessee appearing the other records. The Ld AR has pointed out that the assessee Shri Pappu Ram is also Known as @ pappu Ram. Thus, in the sale deed of the name of the assessee appearing in the sale deed alias name of the assessee. The AO has also not disputed the fact that the assessee is one of the joint owners of the land which was sold vide sale deed 08.04.2009. We further note that the cash of Rs. 27,50,000/- was deposited in the bank account of the assessee with Oriental Bank of Commerce, Kishangarh on 09.04.2009. The date of cash deposit is subsequent to the date of sale deed dated 08.04.2009 which prime facie shows that the source of cash deposit has a direct nexus with the sale transaction of the land sold by the assessee jointly with other co-owners vide sale deed dated 08.04.2009. Though the sale deed shows the sale consideration of rs. 6,45,000/- which is also the stamp Duty Valuation however, once the assessee has brought on record the relevant facts as well as nexus between transaction of sale and deposit in bank account then only inference can be drawn from these facts and circumstances of the case is that the source of deposit of Rs. 27,50,000/- is the sale consideration of the land. The AO has not brought anything contrary on the record during the remand proceedings such as examination of the purchaser. Therefore, in the absence of any contrary material the explanation of the assessee regarding source of cash deposit in the bank account cannot be disputed”. I.T.A. No.6/Asr/2024 Assessment Year: 2012-13 11 18. Similarly, Co-ordinate Chandigarh Bench in the case of Jagir Singh on identical facts and circumstances have held as under:- “In the instant case, we find that there was deposit of cash of Rs. 7900000/- on 07.07.2009 the very same day on which the sale deed was executed and Rs. 200000/- was deposited on the next day, therefore, a clear nexus has been established between source of such cash deposit and sale transaction so executed by the assessee. In absence of any contrary evidence brought on record in terms of statement of witnesses and comparative sale date of similar transaction undertaken at same/nearby location at a value different from what has been claimed by the assessee, the explanation so furnished by the assessee cannot be disputed. We are conscious of also the stamp duty valuation however, once the assessee has brought on record the relevant fact and documentation as well as nexus between transaction of sale and deposit in bank account has been established then in absence of any contrary evidence brought on record, only inference which can be drawn from these facts and circumstances of the case is that the source of deposit of Rs. 8250000/- is the sale consideration of the agriculture land. “ 19. In view of the above coordinate Amritsar Bench, co-ordinate Chandigarh and Jaipur Benches and the fact that in the case of daughters of assessee on similar facts and circumstances, the department have accepted the source of their investment in the agricultural land, out of sale of ancestral agricultural land by their mother Smt. Tej Kaur,( the appellant ) , we have no hesitation in holding that there was no justification by the CIT(A) in sustaining the addition of Rs. 2,12,96,000/- as made by the Assessing Officer. 20. As regards ground No. 3 (a) and 4 of ground of appeal and also with regard to assumption of jurisdiction u/s 148, since we have already allowed the I.T.A. No.6/Asr/2024 Assessment Year: 2012-13 12 appeal of the assessee on merits, the other grounds becomes simply academic in nature and, as such, no finding is given on the same. 21. In the result, the appeal of the assessee bearing ITA No. 06/Asr/2023 is allowed. Order pronounced in the open court on 05.06.2024 Sd/- Sd/- (Dr. M. L. Meena) (UDAYAN DASGUPTA) 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 I.T.A. No.6/Asr/2024 Assessment Year: 2012-13 13 Date Initia l 1. Draft dictated on 03.06.24 Sr.PS/ PS 2. Draft placed before author 03.06.24 Sr.PS/ PS 3. Draft proposed & placed before the Second Member JM/A M 4. Draft discussed/approved by Second Member JM/A M 5. Approved Draft comes to the Sr. P.S./P.S. Sr.PS/ PS 6. Kept for pronouncement on Sr.PS/ PS 7. File sent to the Bench Clerk Sr.PS/ PS 8. Date on which file goes to the Head Clerk 9. Date on which file goes to the AR 10. Date of dispatch of Order