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Income Tax Appellate Tribunal, COCHIN BENCH, COCHIN
Before: SHRI GEORGE GEORGE K.
Per GEORGE GEORGE K.,JUDICIAL MEMBER:
This appeal at the instance of the assessee is directed against the order of the CIT(A), Thrissur dated 11.06.2019. The relevant assessment year is 2011-12.
The solitary issue that is raised in this appeal is whether the CIT(A) is justified in confirming the addition of Rs.18,15,500/- made by the AO with regard to cash deposits in the assessee’s Bank account.
Briefly stated, the facts of the case are as follows:
The assessee is an individual. For the assessment year 2011-12, the return of income was filed on 21/03/2012, declaring total income of Rs.90,360/-. The assessment was taken up for scrutiny by issuance of notice u/s.143(2) of the I.T.
Act. During the course of assessment proceedings, the Assessing Officer required the assessee to explain the source of the cash deposits of Rs.27,08,000/- in the Savings Bank Account with Canara Bank. The assessee stated that the cash deposits in his SBI account were out of the sale proceeds of agricultural land sold by him on 01/01/2011 to Shri Hussainar. The AO after verifying the copy of registered sale deed produced by the assessee, noticed that as per the copy of registered sale deed in favour of Shri Hussainar, the value of the land declared is only Rs.8,92,500/-. The Assessing Officer asked for explanation of source of balance amount of Rs.18,15,500/- deposited in the said Bank account (Rs.27,08,000/- – Rs.8,92,500/-). The assessee produced copy of sale agreement dated 05-02-2010 between him and Shri Yusuf Haji wherein the assessee had agreed to sell the above mentioned land measuring 140.5 cents to Shri Yusuf Haji or his nominee for a sale consideration of Rs.26,000/- per cent totalling to Rs.36,53,000/-. The sale deed was to be concluded on or before 31/12/2010. The AO found that the actual sale of the land was effected on 01/01/2011. The AO also observed that the land was sold to Shri Hussainar and not to Shri Yusuf Haji. For these reasons, the AO held that the sale was not made as per sale agreement dated 05/02/2010. However, the AO provided an opportunity to the assessee to furnish the confirmation from Shri Hussainar for purchasing the said land for a price higher than recorded in the registered deed., i.e., for a price of Rs.36,53,000/-. Since the assessee did not produce such a confirmation from Shri Hussainar, the AO concluded that the assessee could not substantiate his case with regard to cash deposits to the extent of Rs.18,15,500/-. The AO rejected the contentions of the assessee that the above amount is arising out of the sale proceeds of agricultural land. Accordingly, the sum of Rs.18,15,500/- was treated as unexplained income and assessed to tax by the AO.
Aggrieved by the assessment order, the assessee preferred appeal to the first appellate authority. Before the CIT(A) it was submitted that the AO ought to have accepted the deposit of the above sum as arising out of sale of agricultural land. It was further contended that the assessee has no source of income from any activities other than agricultural and he was an NRI for the past many years. Therefore it was submitted that it is impossible for assessee to earn unaccounted income of Rs.18.15 lakhs. The assessee also submitted before the CIT(A) an affidavit which was furnished before the Assessing Officer. The CIT(A) rejected the contentions raised by the assessee and confirmed the addition made by the Assessing Officer. The relevant finding of the CIT(A) reads as follows:
“7. I have considered the submissions of the appellant The appellant says that actual sale was effected at higher price on the instruction of one Shri Yusuf Haji and the land was sold to Shri Hussainar for a consideration much higher and entire consideration was received in cash and deposited in the bank account. In this case the onus to prove the transaction lies with the appellant that the land was sold at a price of Rs.27,08,000/- and not at the price recorded in the sale deed at Rs.8,92,500/-. The appellant could not produce any confirmation from the buyer or Shri Yusuf Haji who is alleged to have instructed the appellant as regards that the actual sale consideration was different and more than three times than the price recorded in the sale deed. Self sworn affidavit filed by the appellant is only self serving evidence and does not help the appellant's case. The appellant's argument that copies of agreement and credits in the banks prove beyond doubt that the money is actually the sale proceeds received from sale of agricultural land is not acceptable as there is no supporting evidence of cash deposits coming as a result of the parallel agreement produced by the appellant. No presumption can be made linking the cash deposits with the parallel agreement by appellant as any such parallel agreement can be prepared as an afterthought by appellant to furnish a plausible explanation for cash deposits. The appellant was employed in Gulf till the year 2003 is not material to the facts of the case and as stated the onus was squarely on appellant to prove the sources of the cash deposits which has not been discharged by the appellant. In the interest of the justice, the authorized representative was asked to produce the buyer of the property before the undersigned to prove his case. The appellant could not produce buyer of property nor any confirmation was produced. In these circumstances, it is held that additional cash deposits of Rs. 18,15,500/- did not pertain to sale of agricultural land as claimed by appellant and have been rightly brought to tax by Assessing Officer. The addition of Rs. 18,15,500/- is hereby confirmed and Grounds 2 to 5 and 7 are dismissed.”
Aggrieved by the order of the CIT(A), the assessee has preferred the appeal before the Tribunal. The Ld. AR has filed paper book enclosing the affidavit of the assessee dated 12/03/2014 submitted before the Assessing Officer, copy of the sale agreement between the assessee and Yusuf Haji executed on 05/02/2010, copy of registered sale deed dated 01/01/2011, copy of the judgment of the Hon‘ble Kerala High Court in the case of Abid vs. Revenue Divisional Officer in Writ Petition (C) No.22417 of 2010 (judgment dated 19/07/2010) etc. In the written submission, the contentions raised before the Income Tax authorities are reiterated.
5.1 The Ld. DR on the other hand submitted that the assessee was given adequate opportunity to produce affidavit from the purchaser of the property, Shri Hussainar and the assessee having failed to produce the affidavit has not been able to prove the source of cash deposits. Therefore it was submitted that assessee cannot link the cash deposits in Canara Bank as arising out of sale proceeds of agricultural land. The Ld. DR relied on the judgment of the Delhi High Court in the case of Krishan Kumar Sethi vs. CIT in dated 14th March 2018 for the proposition that when assessee has not been able to link cash deposits with the alleged agreement for sale, the addition made by the AO and confirmed by the appellate authorities needs to be confirmed. The Ld. DR relied on paras 11 and 12 of the judgment of the Hon’ble Delhi High Court (supra).
I have heard the rival submissions and perused the material on record. The judgment of the Hon’ble Kerala High Court in the case of Abid vs. Revenue Divisional Officer in WP(C) No. 22417 of 2010(B) (judgment dated 19/07/2010) relied on by the Ld. AR (which is enclosed in the paper book filed by the assessee) is distinguishable on facts. In the said case, the issue is with regard to non registration of a sale deed since the value shown in the sale deed was less than fair market value fixed under Kerala Stamp Act. Reliance on the said judgment by the Ld. AR cannot be of any assistance to the assessee in this case.
The sale agreement executed between the assessee and Shri Yusuf Haji was on 05/02/2010. As per the agreement for sale, the total sale consideration that is to be received by the assessee amounts to Rs.36,53,000/-. As per the sale agreement, sale deed was to be executed on or before 31/12/2010 either to Shri Yusuf Haji or his nominee. The sale deed was actually executed a day after, i.e., 01/01/2011 in favour of Shri Hussainar and substantial cash deposit was made on 01/01/2011 amounting to Rs.24 lakhs. Therefore, the contention of assessee that cash deposits are arising of out of sale proceeds of agricultural land cannot be totally brushed aside. However, the assessee has been unable to conclusively prove the same, since the assessee has not produced the confirmations from Shri Hussainar (purchaser of the property) stating that the documented price mentioned in the sale deed dated 01-01-2011 is less than the actual consideration. The assessee atleast ought to have produced the witnesses to the sale agreements dated 05/02/2010, wherein it was clearly mentioned as total sale consideration at Rs.36,53,000/-. In the interest of justice and equity, I am of the view that one more opportunity should be granted to the assessee to prove his case that the cash deposits in the Bank account are arising out of sale of agricultural land. For the above purpose, the assessee shall produce the witnesses to the sale agreement dated 05/02/2010 between the assessee and Shri Yusuf Haji, confirmations either from Yusuf Haji (purchaser as per sale agreement dated 05-02-2010) or Hussainar (the purchaser as per sale deed dated 01-01-2011). The AO shall also examine the return filed by the assessee for the relevant assessment year to verify whether the assessee has declared capital gains on the sale of property and claim it as exemption on account of sale of agricultural land. These factors need to be considered by the AO while deciding the issue. For the above purpose, the issue is restored to the file of the AO and he shall take decision in accordance with law. It is ordered accordingly.
In the result, the appeal of the assessee is allowed for statistical purposes.