MEERA BAI CHOUHAN ,INDORE vs. ITO 1 (4), INDORE

As the issues raised in these appeals are common and relate to assesse’s related to each other (husband and wife) at the request of both the parties both appeals were heard together and are being disposed of by this common order for sake of convenience and brevity.

Brief facts of the case as culled out from the records are that on the basis of Annual Information Report available with the Department it was noticed that a cash of Rs.28,00,000/- and Rs.26,45,000/- was deposited during F.Y. 2010-11 relevant to A.Y. 2011-12 in the Saving Bank Account held by the assessee’s namely Shri Ram Singh Chouhan & his wife Smt. Meera Bai Chouhan respectively. PAN No. of both the assessees were not quoted. Query letters were issued to both the assessees to explain the source of cash deposit in the Saving Bank Account held with the State Bank of India, but there was no compliance. Ld. AO accordingly passed ex- parte order u/s 144 of the Act and made the addition for unexplained cash as well as bank interest earned from the Saving 3

Aggrieved assessee(s) preferred an appeal before the ld. CIT(A). It was contended by Ram Singh Chouhan along with necessary documentary evidences and an affidavit that he sold the ancestral agricultural land for a consideration of Rs.22,14,000/- received in cash. Assessee also accepted on oath through an affidavit that he also received ‘on money’ of Rs. 32,31,000/- and the total consideration received was Rs.54,45,000/-. It was further stated on oath that out of the total consideration of Rs.54,45,000/-, sum of Rs. 26,45,000/- was deposited on various dates in the bank account of his wife wife Smt. Meera Bai Chouhan and remaining sum of Rs.28,00,000/- was deposited in his own bank account. It was also stated on oath that Mr. Ram Singh Chouhan accepts that he received sum of Rs. 54,44,000/- on sale of agricultural land and he is ready to pay income tax (as applicable) on this amount and no income was earned by his wife Smt. Meera Bai Chouhan and the cash amount of Rs.26,45,000/- deposited in her bank account is Ram singh & Meera Bai ITA No.& 140& 141/ind/2020 owned by him (Ram Singh Chouhan) only. But, ld. CIT(A) was not satisfied with these submissions and was of the view that the assessee failed to corroborate the ‘on money’ received by any confirmation from the purchaser of the aforesaid land and the date of registry of agricultural land does not corroborate with the impugned deposit, and accordingly confirmed the addition of Rs.28,00,000/- & Rs.26,45,000/- made by the Ld. AO in the case of Shri Ram Singh Chouhan & Smt. Meera Bai Chouhan respectively.

Aggrieved assessee preferred an appeal before this Tribunal. Ld. counsel for the assessee took us through written submission and paper book filed in both the cases stating that sale consideration so received was from sale of agricultural and part of the same has been further utilized for purchasing the agricultural land and since the said land sold by Mr. Ram Singh Chouhan is out of the purview of the definition of capital asset, the income earned from sale of land is exempt. Reference was also made to various decisions placed in the paper book.

Per contra Ld. DR vehemently argued supporting the orders of Ram singh & Meera Bai ITA No.& 140& 141/ind/2020 both lower authorities.

We have heard rival contentions and perused the records placed before us. Common issue raised in both instant appeals relates to addition for unexplained cash deposit in the Saving Bank Account held by the respective assessees at Rs.28,00,000/- & Rs.26,45,000/- made in the hands of the assessee namely Shri Ram Singh Chouhan & Smt. Meera Bai Chouhan. We, find that the alleged sum has been deposited in cash in the Saving Bank Account held by the assessee(s). Perusal of the registered sale deed shows that Shri Ram Singh Chouhan entered into sale agreement with Mr. Divesh Shah for selling 1.281 hectare of ancestral land situated at Gram-Baroli, Tehsil Sanwar District Indore on 15th June 2010 and sold the said land for a cash consideration of Rs.22,14,000/-.

As far as the case of the assessee namely Meera Bai Chouhan is concerned, all these series of facts are sufficient enough to prove that she had no regular source of income except the bank interest and the alleged sum of Rs.26,45,000/- was not owned/earned by her and it was her husband who deposited the said sum in her bank account. So there is a sufficient explanation towards the source of cash deposited in her bank account, therefore, as far as the appeal of the assessee namely Smt. Meera Bai Chouhan is concerned, we are of the view that no addition for Rs.26,45,000/- was called for in her hands for the alleged cash deposit. We accordingly set aside the finding of ld. CIT(A) and delete the addition of Rs.26,45,000/- and allow grounds of appeal raised in the case of assessee Smt. Meera Bai Chouhan in ITANo.1541/Ind/2020.

As far as, the case of another assessee i.e. Shri Ram Singh Chouhan in ITANo.140/Ind/2020 is concerned, we find that he has owned this transaction of sale of agricultural land for a consideration of Rs.22,14,000/- and the ‘on money’ of Rs.32,31,000/- received from sale of this land. Though the Ld.

We find that there is no appearance of the assessee before the Ld. AO and when the matter traveled before the Ld. CIT(A) there is no discussion about the said land as to whether it forms part of the capital asset or not. No such enquiry has been conducted at any stage. In case the land sold by the assessee is an agricultural land not forming part of the capital asset as provided in section 2(14) of the Act, then the income earned from sale of such agricultural land will be exempt from tax. Since this aspect remained to be verified by the lower authorities and the assessee has also not filed any such Ram singh & Meera Bai ITA No.& 140& 141/ind/2020 evidence to prove that the said land does not fall in the category of capital asset u/s 2(14) of the Act, in the interest of natural justice and being fair to both parties, we set aside the issue raised in the case of assessee namely Ram Singh Chouhan to the file of the ld. AO for the purpose of limited verification as to whether 1.281 hectare land sold by the assessee situated at Gram-Baroli, Tehsil Sanwar District, Indore falls in the category of capital asset u/s 2(14) of the Act and if Ld. AO find that it is not a capital asset u/s 2(14) of the Act then no addition will be called for in the hands of assessee and if found otherwise then assessee will be required to file computation of capital gain after claiming the benefit if any pertaining to index cost of acquisition, cost of improvement (if any) and the amount applied for purchase of other agricultural land as provided in section 54B of the Act and the same shall be examined by the ld. AO as per the Provision of Income Tax Act. Needless to mention that assessee should be provided reasonable opportunity of being heard to file necessary evidences as and when called for.