Balbir Singh (HUF), Chandigarh V. DCIT, Mohali

MA 117/CHANDI/2018

AI Insights

The case revolves around a dispute concerning unexplained cash deposits amounting to Rs. 20,76,224 in the bank account of the assessee, Shri Balbir Singh (HUF), for the Assessment Year 2004-05. The assessee argued that these deposits were part of the sale proceeds from land, which had already been taxed under 'income from capital gains'. Initially, the Tribunal's order inadvertently mischaracterized a cash receipt of Rs. 30,08,000 as a payment for purchasing new agricultural land, leading to a misunderstanding of the funds available to the assessee. Upon realizing the error, the Tribunal rectified the mistake, acknowledging that the assessee had received this amount and not paid it, thus correcting the calculation of available funds and allowing the appeal.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 135468 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 year(s) 9 month(s) 5 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 24-09-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 21-09-2023
• Assessment Year: 2004-2005
• Appeal Filed On: 19-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital Gains

Judgement Text

आयकर अपीलीय अिधकरण,च᭛डीगढ़ ᭠यायपीठ “ए” , च᭛डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “A”, CHANDIGARH ᮰ी आकाश दीप जैन, उपा᭟यᭃ एवं ᮰ी िवᮓम ᳲसह यादव, लेखा सद᭭य BEFORE: SHRI. AAKASH DEEP JAIN, VP & SHRI. VIKRAM SINGH YADAV, AM Miscellaneous Application No. 117/Chd/2018 In आयकर अपील सं./ ITA NO. 49/Chd/2013 िनधाᭅरण वषᭅ / Assessment Year : 2004-05 Shri Balbir Singh (HUF), Prop. M/s Sohi Banquet Hall, H.No. 10, Sector-3, Chandigarh बनाम The DCIT, Circle 6(1), Mohali ̾थायी लेखा सं./PAN NO: AADHB4674A अपीलाथᱮ/Appellant ᮧ᭜यथᱮ/Respondent िनधाᭅᳯरती कᳱ ओर से/Assessee by : Shri B.M. Monga, Advocate Shri Rohit Kaura, Advocate राज᭭व कᳱ ओर से/ Revenue by : Smt. Amanpreet Kaur, Sr. DR सुनवाई कᳱ तारीख/Date of Hearing : 22/09/2023 उदघोषणा कᳱ तारीख/Date of Pronouncement : 25/09/2023 आदेश/Order PER VIKRAM SINGH YADAV, A.M. : The present miscellaneous application has been filed by the Assessee against the order passed by the Coordinate Bench dt. 23/12/2013 in ITA No. 49/Chd/2013 for Assessment Year 2004-05. 2. In the Miscellaneous Application, it has been submitted as under: 1. This is with reference to the order passed in ITA No. 49/Chandi/2013 by this Hon'ble Tribunal on 23.12.2013, Certified Copy of which was received by the assessee on 02.01.2014. During the proceedings before the Hon'ble ITAT, Chandigarh assessee-appeilant submitted the following written submissions on the issue of unexplained cash deposits:- 'As regards the ground of appeal regarding upholding the addition of 20,76,224/- as unexplained cash and cheque deposits in bank account of the appellant,, it is submitted that this amount of 20,76,224/- has already been included in sale proceeds of the land sold for y 3,05,23,983/- as shown in the table below: Total Sales Proceeds of Land 3,05,23,983/- Total Deposits in Bank as per AO - By Cheques 1,14,33,417/- - By Cash 1,91,08,790/- 2 Total 3,05,42,207/- Diff. -18,224 From the above chart it is clear that the source of bank deposits are the sale proceeds of land sold and offered for taxation under the head 'income from capital gains' in its return of income. Treating this amount of Rs. 20,76,224/- as unexplained deposits out the total sale consideration of Rs. 3,05,23,983/- during the year amounts to double taxation i.e. once at the time of calculating the capital gain and again as unexplained deposits in banks. Moreover, besides the sales consideration of Rs. 3,05,23,983/- assessee is also having agricultural income of Rs. 35,07,054/- and declared an amount of Rs. 13,00,000/-received as advance of land which were forfeited and shown as 'Capital Gain'. Therefore, it is respectfully prayed that this unjustified addition may kindly be deleted." 2. It is further clarified that an amount of Rs. 30,08,000/- was actually received by the appellant for the sale of his agricultural land as duly included in the income of the assessee while declaring the income from capital gain and correctly mentioned by the Hon'ble ITAT in its Order Para 35 at Page 21, while reproducing the findings of the Learned Assessing Officer:- "Later on 24.12.09, the counsel of the assessee submitted a letter from Sh. Raovinder Singh that he had made payment of Rs. 28,20,000 by cheque and Rs. 30,08,000/- by cash for purchase of land from Sh. Balbir Singh in Village- Baltana but in the absence of any receipt/affidavit/registry/power of attorney, the explanation regarding cash component cannot be accepted" Further the Hon'ble ITAT in Para 39 of the impugned Order stated as under:- 39. After hearing the rival submissions, we find force in the submissions of Ld. Counsel for the assessee. However, he has conveniently forgotten to point out that with sum of Rs. 30,08,000/ - was paid by way of cash for purchase of fresh agricultural land and, therefore, total sources have to be reduced from this amount. This whole issue requires detailed examination but since the assessee is a very old person, we are of the opinion that there is no point for sending the matter back to the Assessing Officer, therefore, considering the overall circumstances, we further allow a sum of Rs. 7.5 lakhs out of agricultural income. This amount has been worked out by us as under: - Sources available: Agricultural income Rs. 35,00,000/- Addition on account of alleged advances received Rs. 13,00,000/- Total sources available with the assessee for cash deposit Rs. 48,00,000/- Less; -Amount utilized by the assessee for purchasing land Rs, 30,00,000/- approx. Net sources available Rs. 18,00,000/- Relief granted by CIT(A) Rs. 8,00,000/- Net Available Rs. 10,00,000/- 3 3. It is further submitted that the amount of Rs. 30,08,000/- represents the cash receipts from sale of agricultural land as duly admitted by the Learned AO and also finds mention in Tribunal order while reproducing the findings of AO but lateron, inadvertently mentioned as utilization for purchase of fresh agricultural land. Therefore, it becomes clear that Rs. 30,08,000/- was available with the assessee for explaining the cash deposits by the assessee in the bank. 4. However, while allowing the relief, of cash available with the assessee the Hon'ble ITAT has inadvertently mentioned the above cash receipt of Rs. 30,08,000/- as utilization/cash paid for purchase of fresh agricultural land and to that effect had reduced this amount from the total sources available for cash deposit with the assessee. Therefore, the Hon'ble ITAT had erred in inadvertently stating that only an amount of Rs. 7.5 lakhs is available with the assessee whereas, the assessee was having net availability of cash as Rs. 40,00,000/-. 5. The actual calculation would have been by treating the amount of Rs. 30,08,000/- as receipt against sale of old agricultural land and not paid by the assessee for purchase of new agricultural land as inadvertently mentioned by the Hon'ble ITAT in its order, the assessee was having net availability of cash as under:- Sources available: Agricultural income Rs. 35,00,000/- Addition on account of alleged advances received Rs. 13,00,000/- Total sources available with the assessee for cash deposit Rs. 48,00,000/- Relief granted by CIT(A) Rs. 8,00,000/- Net Available Rs. 40,00,000/- The Hon'ble ITAT has made Net addition of Rs. 13,26,224/- against available sources of Rs. 40,00,000/- for cash deposit. Had this error has not erupted in the order of the Hon'ble ITAT, the assessee would have got relief of net addition of Rs. 13,26,224/-. PRAYER: 6. Thus it is humbly prayed that the impugned order may kindly be rectified to the aforementioned issue considering the above submissions and findings in the impugned order itself, as this order has caused great prejudice to the assessee- appellant and rectifying this order to that issue will not cause any prejudice to the Revenue department and purpose of justice shall be served. In view of the above submissions, it is humbly prayed that the order passed by the Hon'ble Tribunal in ITA No. 49/chandi/2013 dated 23.12.2013, copy whereof was received on 02.01.2014, may kindly be rectified. 3. We have heard both the parties and perused the material available on the record. During the course of hearing, the ld AR taken us through the order so passed by the Coordinate Bench and submitted that in para 35 of the said 4 order, the Coordinate Bench had taken note of the assessee’s submissions before the AO wherein it was stated that "Later on 24.12.09, the counsel of the assessee submitted a letter from Sh. Raovinder Singh that he had made payment of Rs. 28,20,000 by cheque and Rs. 30,08,000/- by cash for purchase of land from Sh. Balbir Singh in Village- Baltana but in the absence of any receipt/affidavit/registry/power of attorney, the explanation regarding cash component cannot be accepted". 4. It was submitted by the ld AR that what was therefore submitted before the AO that the assessee had received a sum of 30,08,000/- from Shri Raovinder Singh , however, in the operative part of the order in para 39, the Coordinate Bench has held that “ a sum of Rs 30,08,000/- was paid (by the assessee) by way of cash for purchase of fresh agriculture land” and thus, a mistake which is apparent from the record and the order so passed may be suitably modified. 5. We have gone through the order passed by the Coordinate Bench and find that the aforesaid mistake has rightly been pointed out by the ld AR which is a mistake apparent from record as the assessee had received and not paid a sum of Rs 30,08,000/- and the same shall not be reduced while determining the availability of funds in the hands of the assessee. Where the said mistake is rectified, we find that the same has a bearing on the findings and outcome of the matter and we hereby modify the order so passed by the Coordinate Bench and para 39 disposing of ground no. 5 of the assessee’s appeal shall now read as under: “39. After hearing the rival submissions, we find force in the submissions of Ld. Counsel for the assessee. Since the assessee is a very old person, we are of the opinion that there is no point for sending the matter back to the Assessing Officer. Considering the overall facts and circumstances of the case, the source of deposits and availability in the hands of the assessee has been reasonably explained as under: Sources available: Agricultural income Rs. 35,00,000 5 Addition on account of alleged advances received Rs. 13,00,000/- Total sources Rs. 48,00,000/- Amount utilized by the assessee for purchasing land Rs. Nil Net sources Rs. 48,00,000/- Relief granted by CIT(A) Rs. 8 lakhs Net Available Rs. 40,00,000/- Out of the above, the assessee might have incurred some household expenses also. The AO has made addition of Rs 28,76,224/- and ld CIT(A) has reduced it to Rs 20,76,224/- by giving relief of Rs 8,00,000/. However, in view of availability of funds even after taking into consideration the expenses as well, we find that the assessee has reasonably explained the source of availability of income from agriculture income and advance from sale of land which was offered for taxation. Accordingly, we set aside the order of Ld. CIT(A) and direct the Assessing Officer to delete the addition in the hands of the assessee. In the result, ground no. 5 of the assessee’s appeal is allowed. “ 6. Subject to above, there is no other change in the order so passed by the Coordinate Bench. 7. In view of the above, the misc. application is allowed and disposed off accordingly. Order pronounced in the open Court on. 25/09/2023 Sd/- Sd/- आकाश दीप जैन िवᮓम ᳲसह यादव (AAKASH DEEP JAIN) ( VIKRAM SINGH YADAV) उपा᭟यᭃ / VICE PRESIDENT लेखा सद᭭य/ ACCOUNTANT MEMBER AG Date: 25/09/2023 आदेश कᳱ ᮧितिलिप अᮕेिषत/ Copy of the order forwarded to : 1. अपीलाथᱮ/ The Appellant / 2. ᮧ᭜यथᱮ/ The Respondent 3. आयकर आयुᲦ/ CIT 4. आयकर आयुᲦ (अपील)/ The CIT(A) 5. िवभागीय ᮧितिनिध, आयकर अपीलीय आिधकरण, च᭛डीगढ़/ DR, ITAT, CHANDIGARH 6. गाडᭅ फाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar