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Income Tax Appellate Tribunal, DELHI BENCHES “SMC” : DELHI
Before: SHRI CHANDRA MOHAN GARG
This appeal by Assessee has been directed against the Order of the Ld. CIT(A), National Faceless Appeal Centre [“NFAC” in short] Delhi, dated 26.07.2021, for the A.Y. 2012-2013 on the following grounds :
“That the source of cash deposit was added by the AO explained by the assessee from the sale of agriculture land of jointly sold by the assessee and 2 ITA.No.1135/Del./2021 Shri Dharm Singh, Meerut his brother. Hence, source of the cash deposited can not said unexplained.
2. That CIT(A) granted relief 50 percentage of Rs.1000000 treated as unexplained. That 50 percentage cannot be said justified as the source of Rs.1000000 treated as unexplained.
That as per Sale deed Page No.7 source of receipt was received through Punjab National Bank vide Cheque No.385371. Hence explanation of the source cannot be unreasonable even paid the amount in cash.”
A notice through speed post acknowledgement due was sent to the assessee on 01.02.2022 to the address mentioned in Form No.36 which has been returned by the postal authorities. As per judgment of Hon’ble Supreme Court in the case of PCIT vs. M/s. I Ven Interactive Ltd. dated 18.10.2019 in Civil Appeal No. 8132 of 2019, in absence of any specific information to the Assessing Officer with respect to change of address and/or change of the name of assessee, Assessing Officer would be justified in 3 ITA.No.1135/Del./2021 Shri Dharm Singh, Meerut sending the notices at the available address mentioned in the PAN database of the assessee. Respectfully following the same, I hold that when the assessee has filed Form No.36 giving his address for communication and the notice had been sent to him on the said address and such notice issued is stood returned back by the postal authorities, then I safely presume that all possible efforts have been made regarding service of notice on the assessee on the address given in Form 36 by the assessee and assessee is not available, then I have no alternate but to proceed ex-parte qua the assessee to decide this appeal, after hearing the submissions of Learned Sr. Departmental Representative (DR).
3. From the grounds of appeal, I have observed that the main contention of assessee challenging the addition of Rs.8 lakhs is that the assessee jointly sold agricultural land with his brother. Since his brother did not have any Bank A/c, therefore, the cash received as consideration against the sale of agricultural land was deposited to his Bank A/c. It was also contended that the Ld. CIT(A) has considered
4 ITA.No.1135/Del./2021 Shri Dharm Singh, Meerut and accepted the factum of sale of agricultural land by the assessee and also granted relief of Rs.5 lakhs confirming the part addition of Rs.8 lakhs which is also not sustainable.
3.1. From the first appellate order I have further observed that before the learned first appellate authority it was also explained by the assessee that assessee has deposited cash amounting to Rs.18 lakhs to his S.B. A/c which was sale consideration received by him and his brother on 15.12.2011 and the amount received was deposited in assessee’s Bank A/c as the assessee’s brother does not maintain any Bank A/c, therefore, no addition in regard to remaining amount of Rs.8 lakhs can be made in the hands of assessee.
The Ld. Sr. D.R. drew my attention towards para 4.3.1 of first appellate order and submitted that it was contended by the assessee that the cash deposit in Bank A/c took place on 15.12.2011 and there was a cheque drawn on 16.12.2011 which was handedover to the assessee and the assessee received cash against the same
5 ITA.No.1135/Del./2021 Shri Dharm Singh, Meerut cheque before a day i.e., on 15.12.2011 is not clear. The Ld. Sr. D.R. submitted that the assessee failed to submit any proof or evidence regarding non-encashment of cheque No.385371 and receipt of cash amounting to Rs.8,96,000/-. Therefore, the addition partly confirmed by the Ld. CIT(A) cannot be dismissed or deleted.
On careful consideration of the above rival submissions, first of all from para-6 of the first appellate order, I observed that the assessee before the Ld. CIT(A) it was contended that the assessment order under section 144 of the I.T. Act, 1961 is bad in law because the assessee was not allowed proper opportunity of hearing by the A.O. From the submissions of assessee before the Ld. CIT(A) reproduced in para 6.1 it is also clearly discernible that the assessee’s additional ground was dismissed and prayer for getting remand report from the A.O. was also dismissed by observing that the assessee did not file any additional evidence before him. In view of the above, I am of the considered opinion that when the assessee was not allowed due opportunity of hearing before the A.O. and the A.O.
6 ITA.No.1135/Del./2021 Shri Dharm Singh, Meerut passed the ex-parte assessment order under section 144 of the I.T. Act, 1961, then the Ld. CIT(A) was not correct and justified in confirming the addition of Rs.8 lakhs by ignoring the other relevant facts that the assessee and his brother sold agricultural land against the consideration of Rs.18,96,000/- and since assessee’s brother was not operating any Bank A/c entire amount was deposited to the Bank A/c of the assessee. In my considered opinion, from the careful reading of first appellate order it is clear that the Ld. CIT(A) has summarily dismissed the explanation of the assessee that in absence of proof regarding non-encashment of cheque and receipt of cash are lacking, but, before holding so, the Ld. CIT(A) has not issued any show cause notice to the assessee and also dismissed prayer of the assessee for calling remand report from the A.O. Therefore, the Ld. CIT(A) blow hot and cold. At the same time, firstly he noted that assessee has failed to submit proof regarding non-encashment of cheque and secondly he denied prayer of the assessee to call remand report from the A.O. Be that as it may, this fact has not been disputed neither by the 7 ITA.No.1135/Del./2021 Shri Dharm Singh, Meerut A.O. nor by the Ld. CIT(A) that the assessee and his brother jointly sold agricultural land against the sale consideration of Rs.18,96,000/- and assessee’s brother did not have any Bank A/c in his name, therefore, sale consideration was deposited to the Bank A/c of assessee. So far as total amount is concerned, the relief granted by the A.O. as well as the Ld. CIT(A) comes to Rs.10 lakhs and the Ld. CIT(A) confirmed the addition of Rs.8 lakhs in the hands of assessee by alleging that there is no proof of non- encashment of cheque of Rs.8,96,000/-. In this regard, the Ld. CIT(A) has dismissed the request of assessee for calling remand report from the A.O. and the Ld. CIT(A) has not show cause the assessee to submit proof of non- encashment of cheque which is also clearly discernible from the first appellate order. Therefore, I am of the considered opinion that when the assessee has successfully demonstrated the glaring fact that the assessee and his brother sold agricultural land jointly at the sale consideration of Rs.8,96,000/- and the assessee’s brother did not have any Bank A/c, therefore, the entire sale
8 ITA.No.1135/Del./2021 Shri Dharm Singh, Meerut consideration was deposited to his Bank A/c. The assessee cannot be expected to prove negative facts that cheque was not encashed because if the Ld. CIT(A) was not satisfied with the explanation of assessee, then, he should have show cause the assessee to submit such proof establishing the non-encashment of impugned cheque, but, the Ld. CIT(A) denied calling the remand report from the A.O. and also made addition in the hands of assessee on the bald allegation of non-encashment of cheque without show causing or cautioning to the assessee regarding non-filing of proof of non-encahsment of cheque. Therefore, I am of the considered opinion that addition partly confirmed by the Ld. CIT(A) amounting to Rs.8 lakhs does not survive in the hands of assessee being not sustainable. Therefore, I direct the A.O. to delete the addition. Accordingly, appeal of the assessee is allowed.
In the result, appeal of the Assessee is allowed.
9 ITA.No.1135/Del./2021 Shri Dharm Singh, Meerut Order pronounced in the open Court on 22.06.2022.