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Income Tax Appellate Tribunal, KOLKATA-RANCHI ‘e-COURT’, KOLKATA
Before: Shri Rajpal Yadav, Vice-(KZ) & Shri Rajesh Kumar
Per Rajpal Yadav, Vice-President (KZ):- The present appeal is directed at the instance of assessee against the order of ld. Commissioner of Income
Assessment Year: 2008-2009 Sri Gurpreet Singh Tax (Appeals), Jamshedpur dated 25th March, 2014 passed for A.Y. 2008-09.
The assessee has taken eight grounds of appeal, but in brief his grievance is that ld. CIT(Appeals) has erred in confirming the addition of Rs.18,00,000/-.
Brief facts of the case are that the assessee has filed his return of income on 16.05.2008 declaring total income of Rs.1,48,770/-. This return was processed under section 143(1) of the Income Tax Act and thereafter selected for scrutiny assessment. Notice under section 143(2) was issued and served upon the assessee. On scrutiny of the accounts, ld. Assessing Officer found that he received information from AIR (Annual Information Report Wing) exhibiting that a cash deposit of Rs.36,02,000/- was made in the joint Bank Account of the assessee with Bank of Baroda, Golmuri, Punjab. The ld. Assessing Officer has issued a notice to the assessee inviting his explanation. In response to this notice, it was contended by the assessee that he was owner in the possession of agricultural land comprising revenue estate Bhagpur Tehsil & Dist. Ludhiana. The details of the land has been reproduced by the ld. CIT(Appeals) on page no. 7 of the impugned order. The substance is that the assessee was having 1/24th share of agricultural land measuring 130 Kanals 6 Marlas. He agreed to sell his
Assessment Year: 2008-2009 Sri Gurpreet Singh share to one Shri Harjinder Singh, son of Sukhvir Singh, resident of Lalheri Road, Khanna, Tehsil Khanna, Dist. Ludhiana. The sale consideration was fixed at Rs.40,00,000/-, out of that Rs.27,00,000/- was paid at the time of agreement. On account of this transaction, three cash deposits were made in the Bank account of the assessee, namely Rs.9,00,000/- each on 24.03.2008, 31.03.2008 and 03.04.2008 respectively. The ld. Assessing Officer asked the assessee to file a confirmation from the purchaser of the land. The assessee filed the confirmation from Shri Harjinder Singh and the letter written by Shri Harjinder Singh to the ld. Assessing Officer directly is reproduced on page 20 of the impugned order of ld. CIT(Appeals). He annexed photocopy of his Passport as well as photocopy of the land record. He deposed that he was holding 80 acres of land in his name, which is a fertile land and he has confirmed purchase of the above land from the assessee. The ld. Assessing Officer did not accept the explanation of the assessee and assigned five reasons, which read as under:- (a) Amount of Rs.27,00,000/- has been deposited in cash in three instalment of Rs.9,00,000/- each on 24/03/2008, 31/03/2008 and 03/04/2008 respectively whereas the alleged agreement dated 04/02/2008 mentions that the amount was already received on the date of agreement. There was no justification of depositing the amounts in installments when the entire amount was received prior to date of alleged . agreement. (b) Date and place of receipt of advance money are neither mentioned in the alleged agreement nor the purchaser 3
Assessment Year: 2008-2009 Sri Gurpreet Singh furnished such details despite requested to furnish the same vide this office letter dated 19/11/2010. (c) The alleged agreement is signed at Punjab whereas the money has been deposited in bank account at Jamshedpur. In case of genuine transactions the money should have been deposited in bank A/c at Punjab or paid through Cheque / Demand Draft. (d) The transaction of sale of land is for Rs.40 lacs and alleged advance of Rs.27 lacs has been claimed to be paid. However, the sale deed is not executed till the date of order. No genuine buyer can take this risk as the registry was required to be done by 05/05/2008. Therefore the transaction is not found genuine. . (e) The proposed sale mentioned in the agreement is in respect of ancestral land in which l/24th share has been claimed by the assessee. No details of division of property were filed or mentioned in the agreement to sale. The assessee's right to sale of ancestral property without division or demarcation of plots is debatable. 4.7. In the light of the discussion made hereinabove, an amount of Rs.27,00,000/- treated as income of the assessee from undisclosed sources. (Add.: Rs.27,00,000/-)
The ld. Assessing Officer made the addition of Rs.18,00,000/- only because Rs.18,00,000/- was deposited during financial year 2007-08, which is to be considered in assessment year 2008-09. The next Rs.9,00,000/- was deposited on 03.04.2008, which could not be subject matter of this assessment year. Accordingly ld. Assessing Officer has made addition of Rs.18,00,000/- only.
Assessment Year: 2008-2009 Sri Gurpreet Singh 5. Dissatisfied with this addition, assessee carried the matter in appeal before the ld. 1st Appellate Authority but without any success. The ld. CIT(Appeals) concurred with the ld. Assessing Officer.
In response to the notice of hearing, no one has come present but written submission has been sent by Shri Nawal Kishore Mahato alleged to be Authorized Representative of the assessee.
We have duly considered the rival contentions and gone through the record carefully. We find that both the ld. revenue authorities have failed to appreciate the facts and circumstances in right perspective. The assessee has migrated from Punjab to Jharkhand for his livelihood. He had an ancestral land, which was under joint ownership. He was not in a position to maintain that land and, therefore, decided to sell his share. He entered into an agreement, fixed the consideration and received certain part in cash. Possession was given to the purchaser. Thus for the purpose of income tax, transfer stands complete because as per the definition of transfer provided in section 2(14), if possession of immovable property is being exchanged, then it is to be assumed that transfer of capital has taken place. The purchaser has directly replied to the ld. Assessing Officer that he is the owner of 80 acres of land. He has purchased this Assessment Year: 2008-2009 Sri Gurpreet Singh land from the assessee and paid sum of Rs.27,00,000/- in three instalments. He annexed photocopies of the land records as well as his Passport. Therefore, his identity was not an issue. He has demonstrated his creditworthiness also by showing ownership of 80 acres of fertile land in Punjab, which can easily generate 80,00,000 of rupees as agricultural income annually.
The assessee is a layman for the purpose of the income tax proceedings. He has submitted the material exhibiting the two circumstances as to how cash has been generated and came to his account in Punjab, whereas for his livelihood, he was working in Jharkhand. These were simple statement of facts and the ld. Revenue authorities should have exercised their powers to dig out if something is contrary to the law. Section 269T as available today, was not inexistence in the same context prohibiting any person for accepting sale consideration of more than Rs.2 lakhs in cash. Thus there was no prohibition by the Income Tax Act to accept sale consideration for the land in cash. But, only peripheral circumstances are assigned by the ld. Assessing Officer. These are that the variation in the dates of agreement, vis-a-vis deposits in the Bank account. It appears that the Officer has no idea how these deeds are settled in rural area, more particularly in Punjab. On certain occasions, transaction could take place orally. The ld.
Assessment Year: 2008-2009 Sri Gurpreet Singh Assessing Officer could have issued a commission on Shri Harjinder Singh and enquired antecedents of purchasers. The ld. Assessing Officer could have issued a commission to Tehsildar having control over the revenue record for Village Bhagpur. The ld. Assessing Officer could obtain complete status of the land, but he only harped upon PAN data, not supplied by Harjinder Singh. If Harjinder Singh is a farmer, who was cash, rich on account of occupation of 80 acres of fertile land, then, he might not having PAN account in A.Y. 2008-09. Therefore, to our mind, the ld. Revenue Authorities have failed to appreciate the facts and circumstances in true perspective and erroneously made the addition. We allow this appeal of the assessee and delete the addition.
In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on 07.11.2023.