SHRI MAHESH KUMAR S/o SHREE HEERALAL, Indore V. The ITO 3(3), Indore

ITA 752/IND/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2210 (ITAT-INDORE)
• Duration Of Justice: 2 year(s) 5 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-05-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 14-02-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 03-12-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MOHD JAVED
• Assessee Lawyers: S S DESHPANDE
• Keywords: Unexplained cash credit; Capital asset; Income from undisclosed sources; Source of fund; Capital receipt
• Section: 2(14)

Judgement Text

SHRI MAHESH KUMAR V. ITO-3(3) INDORE / I.T.A. NO. 7 52/IND/2014/A.Y.:08-09 PAGE 1 OF 13 , , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE , ' .., ( BEFORE SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER AND SHRI O.P.MEENA, ACCOUNTANT MEMBER SHRI MAHESH KUMAR S/O SHRI HEERA LAL, GRAM SULAKHEDI, POST- MANGLIA, DISTT. INDORE V. INCOME TAX OFFICER 3(3) INDORE ) / APPELLANT +,) / RESPONDENT . . ./ PAN: AYPPM 2201 G ) - / APPELLANT BY SHRI S.S. DESHPANDE, CA +,) - / RESPONDENT BY SHRI MOHD. JAVED, SR. D.R. - / DATE OF HEARING 04-05-2017 2 - / PRONOUNCEMENT ON 24-05-2017 / O R D E R PER O.P. MEENA, AM. 1. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF LEARNED COMMISSIONER OF INCOME-TAX (AP PEALS)- I, INDORE [IN SHORT THE CIT(A)] DATED 22-03-2014 PERTAINING TO ASSESSMENT YEAR 2008-09, WHICH IN TUR N HAS ARISEN FROM THE ORDER DATED 31-12-2010 PASSED BY TH E ITO 3(3) INDORE (IN SHORT THE AO ) UNDER SECTION 143 (3) OF INCOME TAX ACT,1961 ( IN SHORT THE ACT). THE SOLE GROUND TAKEN BY THE ASSESSEE IS AS UNDER: :- . . ./ I.T.A. NO. 752/IND/2014 / ASSESSMENT YEAR: 2008-09 SHRI MAHESH KUMAR V. ITO-3(3) INDORE / I.T.A. NO. 7 52/IND/2014/A.Y.:08-09 PAGE 2 OF 13 ON THE FACTS AND CIRCUMSTANCES OF THE CASE:- 1.THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN CONFIRMING THE ADDITION MADE BY THE LEARNED ASSE SSING OFFICER OF RS. 1,32,76,000/- ON ACCOUNT OF UNEXPLAI NED SOURCES OF DEPOSIT IN BANK ACCOUNT. FACTUALLY, THERE IS NO UNEXPLAINED SOURCE OF DEPOSI T IN ACCOUNT. THE ASSESSEE SOLD HIS AGRICULTURE INCOME IN RS. 150 .00 LACS AND DEPOSITED THE SALE PROCEED GIVEN BY THE BUYER IN HI S OWN ACCOUNT. THE SOLD LAND IS AGRICULTURE LAND AND IS N OT A CAPITAL ASSETS U/S. 2(14) OF INCOME TAX ACT, 1961 HENCE, PR OFIT EARNED ON THE SALE OF THE ABOVE LAND IS NOT TAXABLE UNDER ANY HEAD OF INCOME TAX ACT, 1961. IT IS THEREFORE, PRAYED THAT THE ORDER FOR ADDITION ON ACCOUNT OF UNEXPLAINED SOURCE OF DEPOSIT IN BANK ACCOUNT MADE BY THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) MAY KI NDLY BE DELETED AND FURTHER THE ASSESSMENT ORDER MADE BY LE ARNED ASSESSING OFFICER MAY KINDLY BE DELETED. 2. SUCCINCTLY, FACTS AS CULLED OUT FROM THE ORDERS OF LOWER AUTHORITIES ARE THAT THE ASSESSEE IS INDIVIDU AL AGRICULTURIST. THE ASSESSEE HAS FILED HIS RETURN OF INCOME ON 30-03-2009 DECLARING TOTAL INCOME OF RS. 1, 39,7 70/- SHOWING INTEREST UNDER THE HEAD INCOME FROM OTHER S OURCE. AS PER AIR INFORMATION, THE ASSESSEE HAS DEPOSITED RS. 50 LAKH IN HIS BANK; CONSEQUENTLY, HIS CASE WAS SELECT ED UNDER SCRUTINY ASSESSMENT. THE SOURCE OF BANK DEPOS IT WAS EXPLAINED AS RECEIPTS OF SALE CONSIDERATION AS PER AGREEMENT TO SALE ENTERED IN TO ON 23-08-2007 (PB-2 2) WITH SHRI VRINDAVAN PATEL AND SHRI BANE SINGH FOR SALE O F AGRICULTURAL LAND OF 3.070 HECTARES, SITUATED AT VI LLAGE SULAKHEDI, TEHSIL SANWER, DISTT. INDORE. AS ADUMBRA TED IN AGREEMENT TO SALE, THE ASSESSEE IS TO RECEIVE AN AM OUNT OF RS. 5 LAKHS IN CASH AND RS. 145 LAKHS BY CHEQUES. O N ENQUIRY; FROM BANK OF INDIA, MANGLIA, IT WAS NOTICE D THAT THE ASSESSEE HAS RECEIVED RS. 21 LAKH BY CHEQUE FRO M SHRI BANE SINGH, RS. 22 LAKHS EACH FROM BHAGWAT SINGH AN D SHRI MAHESH KUMAR V. ITO-3(3) INDORE / I.T.A. NO. 7 52/IND/2014/A.Y.:08-09 PAGE 3 OF 13 SHRI RAJENDRA SINGH BROTHERS OF SHRI BANE SINGH, RS . 32.76 LAKHS I.E. ( RS. 5.76 LAKH + RS. 10 LAKH + RS . 25 LAKH + RS. 2 LAKH ) FROM SHRI POP SINGH AND RS. 25 LAKH FROM SHRI MANGI LAL BY CHEQUES TOTALING TO RS. 132 .76 LAKH DURING THE PERIOD FROM 03-10-2007 TO 05-10-20 07. THEREAFTER, THE ASSESSEE EXECUTED A POWER OF ATTORN EY ON 03-10-2007 IN FAVOUR OF SHRI VARINDAVAN PATEL AND S HRI BANE SINGH S/O SHRI NIRBHAY SINGH TO DEAL WITH THE SAID AGRICULTURAL LAND IN QUESTION IN ANY MANNER THEY LI KE AND SALE THE SAME TO ANY PERSON (COPY PLACED AT PAPER B OOK PAGE NO 17 TO 21). THEREAFTER, THE POWER OF ATTORNE Y HOLDER HAVE SOLD THIS LAND FOR A CONSIDERATION OF RS. 30.7 0 LAKHS VIDE SALE AGREEMENT DTD. 10-12-2007 TO SMT. KIRAN W /O SHRI KAMAL BHATIA AND SMT. KAVITA TUTEJA W/O SHRI K AMAL TUTEJA. THE SALE DEED DATED 10-12-2007; WAS GOT REG ISTERED ON 06-04-2010 WITH SUB REGISTRAR BY SHRI VARINDAVAN PATEL AND SHRI BANE SINGH, THE POWER OF ATTORNEY HO LDER. IN ORDER TO ASCERTAIN THE TRUTH, THE AO EXAMINED THE A SSESSEE ON OATH, WHO DEPOSED BEFORE HIM THAT HE HAS RECEIVE D A SUM OF RS. 1.50 CRORES ON SALE OF HIS AGRICULTURAL LAND FROM THE BUYERS. HOWEVER, ON EXAMINATION TO BUYER, IT WA S FOUND, THAT THEY WERE NOT ABLE TO EXPLAIN THE NATUR E OF TRANSACTION AND AMOUNT PAID. SHRI BANE SINGH HAS ST ATED THAT THE CHEQUES WERE GIVEN AS LOAN AND LAND WAS SO LD AS PER INSTRUCTION OF SHRI MAHESH KUMAR (THE ASSESSEE) AND GAVE EVASIVE REPLY ABOUT THE ACCOUNT FROM WHERE CHE QUES WERE GIVEN TO THE ASSESSEE. IN VIEW OF THESE FACTS AND CIRCUMSTANCES, THE AO DOUBTED THE AGREEMENT TO SALE SHRI MAHESH KUMAR V. ITO-3(3) INDORE / I.T.A. NO. 7 52/IND/2014/A.Y.:08-09 PAGE 4 OF 13 DEPICTING THE SALE AMOUNT OF RS. 1.50 CRORES AS AM OUNT OF RS. 30.70 LAKH ONLY WAS RECEIVE BY THE SELLER, BEI NG THE ASSESSEE, AS PER FINAL SALE DEEDS, HENCE, THE AO T REATED THE AMOUNT OF RS. 1,32,67,000/- AS UNACCOUNTED INCO ME OF THE ASSESSEE FROM UNDISCLOSED INCOME. 3. BEING, AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFO RE THE LD. CIT (A). THE LD. CIT (A) OBSERVED THAT THE REGISTERED SALE DEEDS DATED 10-12-2007 SHOWING SALE CONSIDERA TION OF RS. 30.70 LAKHS WILL GET PRECEDENCE OVER THE ORI GINAL AGREEMENT TO SALE DTD. 23-08-2007 WHICH WAS NOT REGISTERED. LD. CIT (A) ALSO OBSERVED THAT DIFFERE NCE IN SALE CONSIDERATION SHOWN IN TWO AGREEMENT NAMELY RS. 1.5 0 CRORE VS. RS. 30.70 LAKH PUT BIG QUESTION MARK ON T HE SOURCE OF CHEQUE DEPOSIT AND WHY POWER OF ATTORNEY HOLDER WOULD INCUR LOSS OF RS. 1.20 CRORE. IN VIEW OF THE SAME, SINCE RS. 30.70 LAKHS IS TRANSACTED IN CASH, THE SO URCE OF DEPOSIT OF CHEQUES OF RS. 1,32,76,000/- IN BANK AC COUNT OF THE APPELLANT BECOMES UNEXPLAINED, ESPECIALLY WH EN BOTH POWER OF ATTORNEY HOLDER WERE EXAMINED BY THE AO WHEREIN THEY FAILED TO OWN UP THE LAND TRANSACTION AND ALSO FAILED TO GIVE ANY SOURCE OF PAYMENT OF SUCH C HEQUES. HENCE, ADDITION OF SUCH AMOUNT WAS CAME TO BE CONFI RMED. THE LD. CIT (A) NOTED THAT THE CERTIFICATE REGARDIN G DISTANCE OF LAND FROM MUNICIPAL LIMITS ISSUED BY PATWARI STA TED THAT WHEN THE LAND SOLD IN YEAR 2007-08 IT WAS SITUATED BEYOND 8 K.M. FROM MUNICIPAL LIMITS WHEREAS AT PRESENT THE LAND IS WITHIN 8 K.M. DUE TO INCLUSION OF 29 VILLAGES IN MUNICIPAL CORPORATION. THEREFORE, THE LD. CIT (A), VIDE ORDER SHEET SHRI MAHESH KUMAR V. ITO-3(3) INDORE / I.T.A. NO. 7 52/IND/2014/A.Y.:08-09 PAGE 5 OF 13 NOTING DATED 30-07-2014 AND 08-08-2014 ASKED THE ASSESSEE TO PROVIDE A CERTIFICATE FROM TEHSILDAR RE GARDING EXACT DISTANCE FROM MUNICIPAL LIMITS AS EXISTED IN F.Y. 2007-08, BUT THE APPELLANT FAILED TO PROVIDE THE SA ME. 4. BEING, AGGRIEVED THE ASSESSEE FILED THIS APPEAL BEF ORE THE TRIBUNAL. THE LD. A.R. FOR THE ASSESSEE SUBMITT ED THAT AS PER AGREEMENT TO SALE DTD. 23-08-2007, THE ASSES SEE HAD RECEIVED AN AMOUNT OF RS. 1.50 CRORE BY VARIOUS CHEQUES AND CREDITED IN HIS BANK ACCOUNT BETWEEN 03 -10- 2007 TO 05-10-2007. THE CHEQUES WORTH RS. 65 LAKHS HAVE BEEN CLEARED FROM THE ACCOUNTS OF SHRI BANE SINGH, RAJENDRA SINGH, AND BHAGWAT SINGH BROTHERS (PB-39 T O 43) AND THE BALANCE AMOUNT WAS CLEARED FROM SHRI POP SI NGH (PB-44). SHRI BANE SINGH WAS EXAMINED ON OATH BY TH E AO, BUT HE STATED THAT HE GAVE IT AS LOAN TO THE ASSESS EE. HE FURTHER STATED THAT ON INSTRUCTION OF THE ASSESSEE THE SAID LAND WAS SOLD. SIMILARLY, SHRI VARINDAVAN PATEL HAS ALSO STATED THAT HE DOES NOT KNOW ABOUT POWER OF ATTORNE Y AND THE SIGNATURE ON POWER OF ATTORNEY ARE NOT OF HIM. THE LD. CIT (A) HAS HEAVILY RELIED ON STATEMENT OF POWER OF ATTORNEY HOLDER. HOWEVER, CIRCUMSTANTIAL EVIDENCE ARE TO BE CONSIDERED, WHICH PROVIDE THAT THE ASSESSEE HAS REC EIVED SALE CONSIDERATION OF RS. 150 LAKHS. THE ASSESSEE I S AGRICULTURIST, HAS NO SOURCE OF INCOME AND ONLY INT EREST INCOME IS SHOWN FROM THESE VERY RECEIPTS RECEIVED O N ACCOUNT OF SALE OF LAND. THE LD. A.R. RELIED IN THE CASE OF CIT V. P. K. NOORJAHAN [1999] 237 ITR 570 (SC)/ 103 TAXMAN 382/ 155 CTR 509 (SC) WHERE THE FACTS OF THE CASE SHRI MAHESH KUMAR V. ITO-3(3) INDORE / I.T.A. NO. 7 52/IND/2014/A.Y.:08-09 PAGE 6 OF 13 WERE THAT A MUSLIM LADY PURCHASED THE LAND FOR RS. 25,901/- AND EXPLAINED THAT SAME WERE OUT OF HER SAVINGS FROM INCOME FROM PROPERTIES LEFT BY HER FIRST HUSBA ND. THE ADDITION WAS MADE AS UNDISCLOSED INCOME. IT WAS HEL D THAT IT WAS NOT POSSIBLE FOR THE ASSESSEE TO EARN THE AM OUNT INVESTED IN THE PROPERTIES AND HENCE, THE EXPLANATI ON OF THE ASSESSEE HAS TO BE ACCEPTED. THE LD. A.R. FURTHER R ELIED IN THE CASE OF MRS. MALINI RAMNATH RELE V. ITO [1994] 49 ITD 43(MUM)/ 48 TTJ 295 (MUM) (T M) WHEREIN THE FACTS W ERE THAT THAT CASH OF RS. 4 LAKH FOUND IN SEARCH WHICH WAS CLAIMED TO BE OUT OF THE PROPERTY SOLD FOR RS. 5 LA KH, BUT IN THE SALE DEED, THE CONSIDERATION WAS MENTIONED AT R S. 1 LACS AND THE PURCHASER HAS DENIED TO HAVE PAID ANY EXTRA PAYMENT. THEREFORE, IT WAS TREATED AS INCOME FROM UNDISCLOSED SOURCES. THE MATTER CAME BEFORE TRIBUNA L AND IT WAS REFERRED TO TM WHO HAS HELD THAT THE CIRCUMS TANTIAL EVIDENCE HAS TO BE CONSIDERED, AS THE ASSESSEE BEIN G WIDOW WOMEN OF 65 YEARS OLD IS NOT EXPECTED TO EARN AN IN COME FROM UNDISCLOSED SOURCES. 5. ON THE OTHER HAND, THE LD. SR. D.R. RELIED ON THE ORDERS OF LOWER AUTHORITIES AND SUBMITTED THAT SAID LAND WAS SOLD AT LESSER AMOUNT OF RS. 30.70 LAKH AS PER REGISTERED SALE DEED. HENCE, IT COULD NOT BE BELIEV ED THAT THE SAID LAND WAS SOLD FOR RS. 150 LAKHS ON THE BAS IS OF AGREEMENT TO SALE. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECOR D. WE FIND THAT AS PER AGREEMENT TO SALE DTD. 23-08-2007 (PB-22) SHRI MAHESH KUMAR V. ITO-3(3) INDORE / I.T.A. NO. 7 52/IND/2014/A.Y.:08-09 PAGE 7 OF 13 ENTERED BETWEEN THE ASSESSEE AND SHRI VRINDAVAN PAT EL AND SHRI BANE SINGH, THE AMOUNT OF RS. 150 LAKHS AR E DULY MENTIONED THEREIN IN WHICH AMOUNT OF RS. 145 L AKH WAS TO BE RECEIVED BY CHEQUES AND RS. 5 LAKH BY CAS H. THE ASSESSEE HAS RECEIVED THE AMOUNT OF RS. 132.76 LAKH BY WAY OF CHEQUE AND THE BALANCE AMOUNT BY WAY OF C ASH ON VARIOUS DATES. THE AMOUNT OF RS. 65 LAKHS WAS RE CEIVED FROM SHRI BANE SINGH RAJPUT AND HIS BROTHERS BY WAY OF CHEQUES (PB-39 TO 43) AND CHEQUES FROM SHRI POP SIN GH (PB-44) RECEIVED BALANCE AMOUNT OF RS. 67.76 LAKHS. THUS, TOTAL AMOUNT OF RS. 1, 32,76,000/- HAS BEEN CREDITE D IN THE BANK ACCOUNT OF THE ASSESSEE DURING THE PERIOD FROM 03- 10-2007 TO 05-03-2007. THE ASSESSEE HAS EXECUTED TH E POWER OF ATTORNEY ON 03-10-2007 (PB18 TO21) IN FAVO UR OF THE SHRI VRINDAVAN PATEL AND SHRI BANE SINGH RAJPUT TO DEAL WITH THE LAND IN ANY MANNER THEY LIKE CAN SALE IT TO ANY OTHER PERSON. WE FIND THAT THE ABOVE-MENTIONED CHEQUES HAVE BEEN RECEIVED AND CREDITED IN THE BANK ACCOUNT OF THE ASSESSEE DURING THE PERIOD BETWEEN 0 3-10- 2007 TO 05-10-2007 AFTER SIGNING OF AGREEMENT TO SA LE ON 23-08-2007 (PB-22 TO 26) AND EXECUTION OF THE POWER OF ATTORNEY ON 03-10-2007( PB-18 TO 21) IN FAVOUR OF S HRI VARINDAVAN PATEL AND SHRI BANE SINGH RAJPUT. IN VIE W OF AGREEMENT TO SALE AND POWER OF ATTORNEY, THE LAND I N QUESTION WAS SOLD TO SMT. KIRAN BHATIA AND SMT. KAV ITA TUTEJA BY THE POWER OF ATTORNEY HOLDER SHRI VARINDA VAN PATEL AND SHRI BANE SINGH RAJPUT THROUGH REGISTERED SALE DEEDS SIGNED AND EXECUTED ON 10-12-0-2007 (PB-27 TO 35 ) SHRI MAHESH KUMAR V. ITO-3(3) INDORE / I.T.A. NO. 7 52/IND/2014/A.Y.:08-09 PAGE 8 OF 13 WITH DEPUTY REGISTRAR SANWER. THIS SALE DEED WAS REGISTERED ON 06-04-2010 (PB-27 TO 35) SHOWING AS APPARENT CONSIDERATION OF RS. 30,70,000/- WHICH WAS RECEIVED IN CASH. THUS, THE CIRCUMSTANTIAL DOCUMENT ARY EVIDENCE CLEARLY ESTABLISHED THAT THE AMOUNT OF RS. 1,32,76,000/- RECEIVED BY CHEQUES DURING THE PERIOD BETWEEN 03-10-2007 TO 05-10-2007 WAS ON ACCOUNT OF SALE OF AGRICULTURAL LAND ADMEASURING 3.070 HECTARES SIT UATED AT VILLAGE SULAKHEDI, BY THE ASSESSEE. THEREFORE, W E ARE OF CONSIDERED VIEW THAT IN SUCH CIRCUMSTANCES, THE LOW ER AUTHORITIES WERE NOT JUSTIFIED IN TREATING THE SAME AS UNEXPLAINED CASH CREDIT US 68/ 69A OF THE ACT, BASE D ON SALE CONSIDERATION OF RS. 30.70 LAKH SHOWN BY THE S ELLERS OF POWER OF ATTORNEY HOLDER OF THE LAND. WE FIND TH AT THE ASSESSEE HAS RECEIVED THE CONSIDERATION BY CHEQUES AND EXECUTED POWER OF ATTORNEY IN FAVOUR OF BUYER AND H ANDED OVER THE POSSESSION OF LAND, THUS, TRANSFER OF LAND WAS COMPLETED ON 05-10-2007 WITHIN THE MEANING OF SECTI ON 2(47) (V.) OF THE ACT. THEREFORE, THE ASSESSEE WAS NOT CONCERNED, IF THE SAID LAND WAS SOLD AT LOWER PRICE LATER ON ; BY THE POWER OF ATTORNEY HOLDERS. WHETHER THE POWER OF ATTORNEY HOLDERS HAVE DELIBERATELY SHOWN LOWER SALE CONSIDERATION IS ALSO NOT KNOWN, AS THE SALE CONSI DERATION WAS RECEIVED IN CASH AND NOT BY CHEQUES WHEREAS THE ASSESSEE HAS RECEIVED SALE CONSIDERATION BY CHEQUES , THEREFORE, SALE CONSIDERATION RECEIVED BY CASH MAY BE TO AVOID TAX THEREON. THIS IS ALSO EVIDENCED FROM THE STATEMENT OF POWER OF ATTORNEY HOLDER, WHEN THEY GA VE SHRI MAHESH KUMAR V. ITO-3(3) INDORE / I.T.A. NO. 7 52/IND/2014/A.Y.:08-09 PAGE 9 OF 13 EVASIVE REPLY AND AVOIDED EVEN OWN UP LAND TRANSACT ION, WHEREAS DOCUMENTARY EVIDENCE IN SHAPE OF REGISTERED SALE DEED (PB-27) SHOWS THAT THE POWER OF ATTORNEY HOLDE RS SOLD THE IMPUGNED LAND. ACCORDING TO AO, THE AMOUNT MENTIONED IN REGISTERED SALE DEEDS IS AT RS. 150 LA KH IS NOT GENUINE SALE CONSIDERATION; HENCE, THE CLAIM OF THE ASSESSEE IS NOT TRUE. HOWEVER, WE NOTE THAT THE AO HAS EXAMINED SHRI BANE SINGH ON OATH, IN WHICH HE STATE D THAT THE AMOUNT OF RS. 65 LACS WAS GIVEN TO THE ASSESSEE AS LOAN AND NOT AS SALE CONSIDERATION, BUT HIS REPLY REGARD ING HIS SIGNATURE ON AGREEMENT TO SALE AND POWER OF ATTORNE Y WAS EVASIVE. THEREFORE, HIS STATEMENT CANNOT BE CONSIDE RED ON FACE VALUE AS CORRECT. FURTHER, WE DO NOT FIND ANY REASON THAT THE ASSESSEE WHO IS AN AGRICULTURIST WOULD NEE D SUCH HUGE AMOUNT OF LOAN, ESPECIALLY, WHEN HE IS NOT DOI NG ANY BUSINESS. IN FACT, THE AO HAS POSED A QUESTION NO. 30, OF THE STATEMENT OF SHRI BANE SINGH BY ASKING HIM THAT HE (BANE SINGH) KNOWS THE ANSWER OF ALL QUESTION, BUT DELIBERATELY AVOIDING THE ANSWER AND GIVING FALSE R EPLY, HENCE, ASKED AS TO WHY HE SHOULD NOT BE PROSECUTED FOR TELLING LIE AND AVOIDING ANSWERS. THIS MEANS THAT T HE AO ALSO KNEW THAT SALE CONSIDERATION SHOWN IN AGREEMEN T TO SALE DTD. 23-08-2007 WAS CORRECT AND SALE CONSIDERA TION SHOWN IN REGISTERED SALE DEEDS DTD. 10-12-2007/26-0 4- 2010 WAS UNDERSTATED. ONGOING THROUGH THE STATEMENT OF SHRI BANE SINGH AND HIS BANK ACCOUNT, IT IS SEEN TH AT, SHRI BANE SINGH HAS RECEIVED A SUM OF RS. 34 LAKH ON 26- 12- 2007 AND RS. 40 LAKH ON 13-03-2008, MEANING THEREBY , SHRI MAHESH KUMAR V. ITO-3(3) INDORE / I.T.A. NO. 7 52/IND/2014/A.Y.:08-09 PAGE 10 OF 13 THAT THESE AMOUNT WERE RECEIVED IN LIEU AS ADVANCE AND DEPOSITED IN BANK ACCOUNT OF BUYERS FOR IMPENDING S ELL BY THEM TO ULTIMATE BUYERS, WHICH WAS ON ACCOUNT OF SA LE OF AGRICULTURAL LAND FROM SMT. KAVITA AND SMT. KIRAN. SIMILARLY, IN HIS STATEMENT, SHRI VRINDAVAN PATEL A LSO GAVE EVASIVE REPLY IN CONNECTION OF THE IMPUGNED SALE TRANSACTION OF LAND. THESE FACTS SUGGEST THAT THE U LTIMATE BUYERS OF AGRICULTURAL LAND DELIBERATELY UNDERSTATE D SALE CONSIDERATION RECEIVED BY THE POWER OF ATTORNEY HOL DERS FOR WHICH THE ASSESSEE COULD NOT BE HELD RESPONSIBLE AN D PENALIZED ON THE MISDEEDS DONE BY OTHERS. THEREFORE , IT APPEARS TO US THAT THE ASSESSEE HAS INSISTED THE PA YMENT BY CHEQUES, THAT IS WHY THE AMOUNT OF SALE CONSIDER ATION WAS RECEIVED BY CHEQUES AND SAME STAND CREDITED IN BANK ACCOUNT OF THE ASSESSEE DURING THE PERIOD WHEN AGRE EMENT TO SALE AND POWER OF ATTORNEY WAS SIGNED. WE FURTHE R FIND THAT THE ASSESSEE IS AN AGRICULTURIST AND HAS NO OT HER SOURCE OF INCOME, THEREFORE, IT CANNOT BE SAID THAT THE AMOUNT RECEIVED FROM THE POWER OF ATTORNEY HOLDERS WAS FROM HIS UNDISCLOSED SOURCES OF INCOME. THE LD. A. R. HAS RELIED IN THE CASE OF CIT V. P. K. NOORJAHAN [1999] 237 ITR 570 (SC)/ 103 TAXMAN 382/ 155 CTR 509 (SC) WHERE TH E FACTS OF THE CASE WERE THAT A MUSLIM LADY PURCHASED THE LAND FOR RS. 25,901/- AND EXPLAINED THAT SAME WERE OUT OF HER SAVINGS FROM INCOME FROM PROPERTIES LEFT BY HER FIRST HUSBAND. THE ADDITION WAS MADE AS UNDISCLOSED INCOM E. IT WAS HELD THAT IT WAS NOT POSSIBLE FOR THE ASSESSEE TO EARN THE AMOUNT INVESTED IN THE PROPERTIES AND HENCE, TH E SHRI MAHESH KUMAR V. ITO-3(3) INDORE / I.T.A. NO. 7 52/IND/2014/A.Y.:08-09 PAGE 11 OF 13 EXPLANATION OF THE ASSESSEE HAS TO BE ACCEPTED. THE FACTS OF THIS CASE ARE SQUARELY APPLICABLE TO PRESENT CASE A S THE ASSESSEE BEING AN AGRICULTURIST AND HAS NO APPARENT SOURCE OF ANY INCOME OTHER THAN SALE OF AGRICULTURA L LAND. THE LD. A.R. FURTHER RELIED IN THE CASE OF MRS. MRS . MALINI RAMNATH RELE V. ITO [1994] 49 ITD 43(MUM)/ 48 TTJ 2 95 (MUM) (T M) WHEREIN THE FACTS WERE THAT THAT CASH O F RS. 4 LAKH FOUND IN SEARCH WHICH WAS CLAIMED TO BE OUT OF THE PROPERTY SOLD FOR RS. 5 LAKH, BUT IN THE SALE DEED, THE CONSIDERATION WAS MENTIONED AT RS. 1 LACS AND THE PURCHASER HAS DENIED TO HAVE EXTRA PAYMENT MADE. THEREFORE, IT WAS TREATED AS INCOME FROM UNDISCLOSE D SOURCES. THE MATTER CAME BEFORE TRIBUNAL AND IT WAS REFERRED TO THIRD MEMBER WHO HAS HELD THAT THE CIRCUMSTANTIAL EVIDENCE HAS TO BE CONSIDERED, AS TH E ASSESSEE BEING WIDOW WOMEN OF 65 YEARS OLD IS NOT EXPECTED TO EARN AN INCOME FROM UNDISCLOSED SOURCES . THEREFORE, CONSIDERING THE CIRCUMSTANTIAL DOCUMENTA RY EVIDENCES ON RECORD, AND STATEMENT OF POWER OF ATTO RNEY HOLDER RECORDED BY THE AO, WE HAVE NO HESITATION T O HOLD THAT THE AMOUNT OF RS. 1,32 76,000/- IS RECEIVED BY THE ASSESSEE IS ON ACCOUNT OF SALE OF AGRICULTURAL LAND . IN VIEW OF THIS MATTER, THE AO IS DIRECTED TO TREAT THE SAM E AS CAPITAL RECEIPTS ON ACCOUNT OF SALE OF AGRICULTURAL LAND BEING LONG-TERM CAPITAL GAIN. 7. WE FURTHER FIND THE CIT (A) HAS NOTED THAT THE ASSESSEE HAS FILED A CERTIFICATE FROM PATWARI REGAR DING DISTANCE OF LAND FROM MUNICIPAL LIMITS. THEREFORE, THE CIT SHRI MAHESH KUMAR V. ITO-3(3) INDORE / I.T.A. NO. 7 52/IND/2014/A.Y.:08-09 PAGE 12 OF 13 (A) HAS ASKED THE ASSESSEE VIDE ORDER SHEET NOTING DTD. 30- 07-2014 AND 08-08-2014 TO PRODUCE A CERTIFICATE FRO M TEHSILDAR TO ESTABLISH THAT LAND IN QUESTION WAS BE YOND 8 KM FROM MUNICIPAL LIMITS. HOWEVER, THE ASSESSEE HAS FAILED TO PRODUCE THE NECESSARY CERTIFICATE. THEREFORE, TH IS ASPECT WHETHER THE LAND WAS SITUATED BEYOND 8 KM FROM MUNICIPAL LIMITS REMAINED UNVERIFIABLE. THEREFORE, WE DEEM IT FIT TO RESTORE THIS ISSUE TO THE FILE OF THE AO FOR THE PURPOSE OF LIMITED VERIFICATION WHETHER THE LAND IN QUESTION WAS WITHIN MUNICIPAL LIMITS OR BEYOND MUNICIPAL LIM ITS, AS PRESCRIBED BASED ON A CERTIFICATE FOR COMPETENT AUT HORITY. IF THE LAND IN QUESTION IS FOUND WITHIN 8 KM FROM MUNI CIPAL LIMITS, THAN THE ASSESSEE WOULD BE LIABLE TO LONG-T ERM CAPITAL GAIN CALCULATED AS PER LAW AND IF LAND WERE BEYOND 8KM FROM MUNICIPAL LIMITS, THAN NO LIABILITY ON ACC OUNT OF LONG-TERM CAPITAL GAIN WOULD ARISE. 8. IN THE LIGHT OF ABOVE FACTS AND CIRCUMSTANCES, THE ADDITION OF RS.1,32,76,000/- MADE ON ACCOUNT OF UNEXPLAINED CASH CREDIT IS DELETED AND ISSUE OF DIS TANCE FROM MUNICIPAL LIMITS IS SET-ASIDE TO THE FILE OF T HE AO FOR LIMITED PURPOSE OF VERIFICATION. ACCORDINGLY, THE A PPEAL OF ASSESSEE IS PARTLY ALLOWED. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 10. THE ORDER PRONOUNCED IN THE OPEN COURT ON 24.05.2017 SD/- SD/- ( C.M. GARG) (O.P. MEENA) SHRI MAHESH KUMAR V. ITO-3(3) INDORE / I.T.A. NO. 7 52/IND/2014/A.Y.:08-09 PAGE 13 OF 13 JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 24 TH MAY,2017/OPM