SHRI RAJIV GUPTA,SIRSA vs. ITO-WARD-2, SIRSA

आदेश आदेश/ORDER आदेश आदेश

2. In the respective appeals, the assessees assail identical orders of the CIT(A) Hisar dated 30.12.2019 pertaining to ITA 123&124 /CHD/2020 A.Y. 2016-17 Page 2 of 37 2016-17 assessment year on identical grounds. It was a common stand of the parties before the Bench that the lead order is in the case of Smt. Monika Gupta and since the relevant documents, facts and arguments in the two cases remain identical, the arguments advanced in the case of Smt.

Monika Gupta in ITA 124/CHD/2020 would apply to the assessee in ITA 123/CHD/2020 also.

2. That the learned Commissioner of Income Tax (Appeals) has further erred both in law and on facts in upholding an addition of Rs. 40,00,000/- representing alleged unexplained cash credit under section 68 of the Act. 2.1. That while making the above addition, the learned Income Tax Officer has failed to appreciate the factual substratum of the case, statutory provisions of law and as such, addition so made is highly misconceived, totally arbitrary, wholly unjustified and therefore, unsustainable. 2.2. That while confirming the above addition, the learned Commissioner of Income Tax (Appeals) has failed to appreciate the factual substratum of the case, statutory provisions of law and as such, addition so sustained is highly misconceived, totally arbitrary, wholly unjustified and therefore, unsustainable. 2.3 That finding and conclusion that "affidavits and statements are self serving documents and cannot be accepted fully if they are contradictory to circumstantial evidence" is entirely unsubstantiated and has been recorded without opportunity and any further enquiries and otherwise too illegal, invalid and unsustainable.

ITA 123&124 /CHD/2020 A.Y. 2016-17 Page 3 of 37 2.4 That further finding that "the whole transaction in both the cases now clearly comes out as perfectly orchestrated and the story of the assessee is to be judged on the test of human probability and the documents are to be seen with reference to the surrounding circumstances" is fundamentally flawed, legally erroneous, factually incorrect and thus untenable apart from being arbitrary and unjustified. 2.5 That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that cash received represented consideration received against sale of agricultural land and as such entire cash could not have been brought to tax as income of the appellant That the learned Commissioner of Income Tax (Appeals) has proceeded to 2.6 sustained impugned addition without appreciating the settled position of law that, it is not for the appellant to explain the source of source of the creditor and therefore, any addition made and sustained on irrelevant and extraneous considerations is illegal, unjustified and hence untenable. 2.7 That further reliance placed on the judgment of the Hon'ble Apex Court in the case of CIT v. Durga Prasad More reported in 82 ITR 540 is wholly inapplicable on the facts of the assessee. 2.8 That the entire addition made and sustained is based on surmises, conjectures and suspicion and therefore illegal, invalid and unsustainable. 2.9 That the learned Commissioner of Income Tax (Appeals) has overlooked relevant evidence placed on record and, drawn factually incorrect and legally unsustainable inferences based on irrelevant and extraneous consideration and thus, addition sustained is wholly unwarranted and not in accordance with law.

3. That impugned assessment has been made and sustained without granting fair and proper opportunity to the appellant and as such the same is vitiated for the same has been made in violation of principles of natural justice.

4. That the learned Commissioner of Income Tax (Appeals) has also erred both in law and on facts in upholding the levy of interest of Rs. 72,222/-u/s 234A of the Act and interest of Rs. 3,97,221/- u/s 234B of the Act which are not leviable on the facts of the instant case. Prayer : It is therefore, prayed that, it be held that addition made and sustained by the learned Commissioner of Income Tax (Appeals) be deleted and appeal of the appellant be allowed.

ITA 123&124 /CHD/2020 A.Y. 2016-17 Page 4 of 37 4.1 Other grounds were stated to be supporting arguments assailing the impugned order.

4.2 Ground No. 3, it was submitted, is not being pressed and ground No. 4 is consequential, as such requires no specific adjudication.

Attention was also drawn to para1.16 at page 28. These documents read alongwith the Paper Book wherein the copy of the reply before AO at pages 12 to 13, copy of the ‘Ikrarnama’ available at pages 19 to 21 it was argued, would show that it was entered into on 15.05.2015. It was agreed that it is a matter of fact and not in dispute that the date of the original agreement was extended multiple times and ultimately there was a compromise in 2019 involving a Panchayat and its members wherein it was agreed that in the event of non- conclusion of the contract/non execution of the Sale Deed for lack of payment or lack of available funds with the purchasers, 50% of the advance payment made would be forfeited. For the specific purpose, it was submitted he would want to invite attention to the Compromise Deed entered into by the purchasers and the sellers. It was highlighted that the purchasers and sellers are strangers. Attention was invited to Paper Book page 37 on which a lot of hue and cry have been made by the Department. Referring to the documents, it was argued that there is no writing or over-writing. It was his submission that since the Agreements are entered into on ITA 123&124 /CHD/2020 A.Y. 2016-17 Page 6 of 37 different dates and in the case of the husband and wife, the narrations are clear. In the case of Smt. Monika Gupta Agreement entered on 15.05.2015, the entry is at Sr.No. 439 wherein the name of Smt. Monika Gupta is clearly shown and the signatures of Shri Rajiv Gupta are available and in the same , there is no over-writing or lack of clarity etc. For ready reference, the relevant extract is reproduced hereunder :

ITA 123&124 /CHD/2020 A.Y. 2016-17 Page 8 of 37 Bheda, Sirsa and as alleged by the tax authorities that the document was witnessed by Seller’s witness, it was submitted, that facts have been selectively ignored. Shri Sita Ram, it was submitted, was Shri Rajesh Kumar’s sister’s husband and infact after extending the date of execution a few times, ultimately the matter was settled before a Panchyat wherein his brother-in-law Shri Sita Ram was present and thus Agreement has been recorded and made available to the tax authorities and is available at Paper Book pages 35 to 36.

Attention was further invited to question No. 4 wherein in response to the same, it was submitted that Shri Rajesh Kumar was further asked to elaborate the source of investment. It was submitted that this was clarified that it was from sale of land owned by him for which Rs. 7.5 lacs was received and Rs. 14 to 15 lacs was available from agricultural sources and some have been taken on loan from near relatives and friend. For ready reference, the relevant question and answers available at page 26 are extracted hereunder :

ITA 123&124 /CHD/2020 A.Y. 2016-17 Page 9 of 37

Attention was invited to question No. 6 wherein the AO digging deeper enquired that as resident of Hansi, why was he contemplating settling or purchasing land near Mangala which was quite far. In response to the same, it was read out by the ld. AR that Shri Rajesh Kumar stated that most of his relatives reside near Hansi Kheda, Sirsa which is why he wanted to sell land and settle there. Apart from that, there was a paucity of water in the area where he was living and opposed to that in the area where he was conte mplating purchase, there was an existing tube-well in the land and the water was good, sufficient and conducive for rice growing. Inviting attention to question No. 7, it was submitted that the AO not still believing

ITA 123&124 /CHD/2020 A.Y. 2016-17 Page 10 of 37 the reasons further questioned the purchaser that had he personally seen the land which he was contemplating purchasing and could he describe it ? Attention was invited to the detailed response given to question No. 7 recorded by the tax authorities the mselves where it is categorically accepted that he had seen the land and gave a detailed description of its location and landmarks were given stating that there were godowns available close by and the land is good for rice crop because of adequacy of water and right next to Modhia Kheda road, there was a water tank build right in front of the specific land. The AO, it was submitted, again questioned as to why he has not get the land registered in his name. Shri Rajesh Kumar, it was submitted, stated that it is on account of paucity of funds and in the statement recorded on 10.12.2018 he submitted that he still has time up to 31.01.2019 to raise funds by selling land etc. and was hopeful of raising funds :

ITA 123&124 /CHD/2020 A.Y. 2016-17 Page 11 of 37

ITA 123&124 /CHD/2020 A.Y. 2016-17 Page 12 of 37 have conveniently ignored the fact that the agreement to sell was made in the residence of Shri Sita Ram, Ex-Panchayat Me mber, relative of Shri Rajesh Kumar, one of the purchasers which is an unrebutted fact. Even otherwise, it was his submission that there was no need to record the agreement to purchase in writing. The fact that the parties have exchanged monies relying upon thereto and ultimately settled the issues relying upon the compromise entered into are a matter of record. All parties have been examined, no contrary evidence is available except conjectures. Specific attention was invited to the fact that all the dates on which the agreement to execute the Sale Deed was extended is clearly set out therein, none of the parties dispute it. The fact that the purchasers could not fulfill the requirements of the contract is evidenced by the said document which was entered into on 29.01.2017. It has duly been signed by the assessee Smt. Monika Gupta, Shri Rajesh Kumar and Shri Ravinder Kumar, Shri Sita Ramm, erstwhile Sarpanch of Hansi Khera, Sirsa. Relative of Shri Rajesh Kumar is also a witnesses alongwith Shri Ashok Goyal and Shri Bhagirath Gupta, no doubt who were the assessee's witnesses, however, Shri Bhupinder Vinayak, Shri Surinder Kumar Garg, Shri Gobind Kanda were independent witnesses/ Panchayat Me mbers.

ITA 123&124 /CHD/2020 A.Y. 2016-17 Page 13 of 37

ITA 123&124 /CHD/2020 A.Y. 2016-17 Page 14 of 37

Referring to the specific pages in the Paper Book of the two assessees, it was his submission that there is no over-writing available. The stamp papers were purchased on different dates by the husband and wife and the requisite entries are clear.

The tax authorities case is also built on the incorrect allegation that the Agreement to Sell has been witnessed only by the Seller’s advocate. It was his submission that for reasons best known to the AO and the ld. CIT(A), the specific questions put to the purchasers which demonstrated that the Agreement to Sell were made at the residence of Shri Sita Ram,

ITA 123&124 /CHD/2020 A.Y. 2016-17 Page 15 of 37 the relative of Shri Rajesh Kumar is conveniently ignored. It is also conveniently ignored that the Compromise Agree ment is signed by all the parties including the two so called witnesses of the assessee as well as the Sarpanch and the other Panchayat Members and the Sarpanch is the relative of one of the purchasers. The fact that the Compromise Agreement duly correctly records the date of Agreement and all the dates on which the Agree ment was e xtended are clearly supported by Compromise Agreement also and is fully supported by detailed questioning carrie d out by the AO who after having required the presence of the purchasers and having questioned them in detail chooses to ignore the evidence found inconvenient to support the case of the Revenue.

Thus, where despite the best efforts of the purchasers, they could not go ahead and purchase the land due to lack of funds

ITA 123&124 /CHD/2020 A.Y. 2016-17 Page 16 of 37 which also has been duly explained as direct result of fall in agricultural land prices are unrebutted facts on record. The fact that the price considered to be correct price for sale did not materialize so as to enable raising funds by the purchaser who wanted to sell and invest those proceeds in the purchase of the specific agricultural land from the assessees are unrebutted facts clearly on record. The fact that ultimately Rs. 10 lacs each has been returned back to the respective purchasers through banking channels by the assessee as is evidenced from para 1.16 of the written submissions made available to the Commissioner (Appeals) is also a fact which has conveniently been ignored and the statements, evidences, documents are not cared to be rebutted and instead repetitively repeating the reasons of the AO and his findings, the additions have been sustained in the impugned order.

Accordingly, it was his prayer that the decision may not be upheld and infact be reversed. The case law relied upon by the CIT(A), it was submitted, is inapplicable where in the facts of Durga Prasad More relied upon by the ld. Commissioner in the extract in the impugned order itself, it was submitted that notwithstanding the other differences, it is evident that it was a case of family arrangement. In the facts of the present case, the contemplated transaction is between strangers. Even otherwise, it was his submission that source of source cannot

ITA 123&124 /CHD/2020 A.Y. 2016-17 Page 17 of 37 be enquired into in a case like the present case for which purposes, he would rely upon the decision of the jurisdictional High Court in the case of CIT v. Ram Narain Goel [1997] 224 ITR 180 (Punj. & Haryana). For similar proposition, reliance was placed upon Sumer Chand Jain Vs CIT 292 ITR 241 (M.P) where mere evidence of identifying the purchase was held to be sufficient. The Court held that it was not for the seller to identify the sources of his funds. It was argued that it was placing an impossible burden on a seller. It was also his submission that the gap of 11 months conte mplated in the Agreement to Sell in the eyes of the Revenue was considered to be very abnormal. It was his submission that by what yardstick gap of 3 months fixed is reasonable. The parties arrived at a conclusion keeping the practicalities and realities of the purchaser who had to first sell his lands to raise the funds. The sellers agreed to wait out for 11 months, ultimately the land could not be sold due to fall in prices in the land which the purchasers had planned to sell them, even 11 months were not sufficient. The facts have been ignored purely based on prejudices and biases. The grounds, it was his prayer, may accordingly be allowed.

ITA 123&124 /CHD/2020 A.Y. 2016-17 Page 18 of 37 advanced on behalf of the assessee and the documents referred to and the interpretations put therein were not either upset, rebutted or interfered with.

15.1 On a perusal of the grounds, it is seen that in both the cases the assessees are aggrieved by the addition of Rs. 40 lacs made by the AO. The explanation of the asse ssee that the ITA 123&124 /CHD/2020 A.Y. 2016-17 Page 19 of 37 same emanated from receipt of earnest money from Shri Ravinder Kumar and Shri Rajesh Kumar on account of Agreement, part sale of agricultural land was not accepted.

The ownership of the specific piece of land constituting is not in dispute. The cause for concern for the AO was the fact that in the alleged Agreement to Sell dated 15.05.2015 in the case of Smt. Monika Gupta and dated 27th April, 2015 in the case of Shri Rajiv Gupta, the date of registration of agricultural land was considered to be inordinately long as according to the AO normally there is a time lag of only three months and moreover the fact that on account of alleged failure of the purchasers to arrange the re quired funds, the date of registration of land was extended to 30.09.2016 and thereafter again 19.01.2017. The assessee is aggrieved by the fact that all documents in support of the claim were available and the lack of presence of the purchasers before the Land Revenue Authorities on 19.01.2017 is a matter of record. The assessee relied on a Compromise Deed recorded before the Panchayat amongst the purchasers and the sellers also regarding the fact that similar two atte mpts at compromise failed earlier. It has already been extracted in the earlier part of this order. The AO required the purchasers to be present. They were questioned and as per the assessee's version the confirmation of all these facts by the purchasers was recorded by the AO and still

ITA 123&124 /CHD/2020 A.Y. 2016-17 Page 20 of 37 discarded and the addition was made. The evidences were considered to be an after-thought. The AO questioned the time lag. He questioned the need of the purchasers attempting to settle at a place much distant to where they originally stayed i.e. village Shekh Pura, Hansi and relocating to Mangala, Sirsa. The docume nts relied upon in support of the payment of money wherein the witnesses were the witnesses of the seller and not the purchasers were questioned. At this juncture, it would be apposite to extract the relevant statement of Shri Rajesh Kumar recorded by the AO :

ITA 123&124 /CHD/2020 A.Y. 2016-17 Page 21 of 37 ITA 123&124 /CHD/2020 A.Y. 2016-17 Page 22 of 37 ITA 123&124 /CHD/2020 A.Y. 2016-17 Page 23 of 37 ITA 123&124 /CHD/2020 A.Y. 2016-17 Page 24 of 37

ITA 123&124 /CHD/2020 A.Y. 2016-17 Page 25 of 37 15.2 However, not convinced, the AO made the additions treating the evidences and explanations as an afterthought.

15.3 The assessee carried the issue in appeal before the CIT(A). The relevant extract in the assessme nt order reproduced by the CIT(A) summing up the factual position are extracted hereunder for the sake of completeness :

"Return declaring total income amounting to Rs.2,71,360/- was e-filed by the assessee on 25.01.2017 which was processed u/s 143(1) of the IT Act, 1961. Later on, the case of the assessee was selected for limited scrutiny under CASS on the parameter 'High Cash in hand shown in Balance sheet as compared to preceding year and return of income filed after 07.11.2016'. Notice u/s 143(2) was issued on 18.09.2017 through 1TBA and sent on email. During assessment proceeding questionnaire dated 12.07.2018 was issued alongwith notice u/s 142(1) through ITBA and send on email. The assessee was asked to give a note on business activities. The assessee has earned commission income, interest, interest income and also earned the agriculture income during the year under consideration. The assessment is completed with the following observations:- 2. The assessee has produced the cash boom for the F.Y. 2015-16 relevant to A.Y. 2016 17 to justify the cash in hand of Rs. 83,39,887/- at the end of the financial year. From the perusal of cash book, it is noticed that the assessee has shown cash receipt amounting to Rs. 40,00,000/- on 15.05.2015 with the narration that the same has been received as 'Earnest Money from rec. from Ravinder Kumar & Rajesh Kumar on a / c of agreement for sale of agricultural land. The assessee was asked to justify the source o same with necessary documentary evidences.

2.2. In reply, the assessee vided his reply dated 03.10.2018 has submitted that:- "…….. That the assessee also received the earned money for amounting Rs. 40,00,000/ - on account of sale agreement of agriculture land. That Photostat copy of sale of agreement o f a g r i . Land is also enclosed herewith for your kind information and necessary record. It may be mentioned here that the assessee own and posses agriculture land of village Bhamboor, Mangala and Village Sahindwali ad earned agn. Income amounting Rs. 3,80,000/- " 2.3. From the perusal of the agreement for the sale of agriculture land, it is noticed that the assessee has enters into the agreement for sale o f agriculture land measuring aprox. 4 3 Kanal 1 1 marie 2 Sarsai located in village Mangaala, sirsa with Sh. Ravinder Kumar S/o Sh. Nathu Ram and ITA 123&124 /CHD/2020 A.Y. 2016-17 Page 26 of 37

Sh. Rajesh Kumar s / o Sh. Nathu Ram resident of village Sekupura, hansi on 15.05.2015. The date of registration of agriculture land was fixed for 19.04.2016. The agreement for the sale was made at the rate of Rs. 30 lakh per acre. The assessee has received Rs. 40,00,000/'- as earnest money on the time of entering into the agreement. The assessee has stated that on the dale of registration i.e. 19.04.2016, sale deed could not be executed. The purchasers Sh. Ravinder and Rajesh could not arrange the required funds on the date of registration of land. Therefore, with mutual agreement between the assessee and purchasers Sh. Ravinder and Rajesh could not arrange t h e required funds on the dale of registration. Therefore, with mutual agreement between the assessee and purchaser, the date o f registration of land was extended till 30.09.2016. On the new date fixed for registration i/e. 30.09.201 6 , again/due t o insufficient funds i n the hands of purchasers, the date of registration was extended to 19.01.1201 7. On the extended date fixed for registration i.e. 19.01.201 7, due to insufficient funds in the hands of purchasers, the registration of land could not be executed. The assessee has further stated that a panchayat was also called on this matter and panchayat had decided that the final date of registration is extended upto 15.04.2019 failing of which half the amount of earnest money i.e. Rs. 20,00,000/- will be forfeited by the assessee and rest of the earnest money of Rs. 20,00,000/- will be returned to the purchasers. 2.4 The assessee has purchased the stamp papers on 15.05.2015 from the stamp vender Sh. Satpal Middha Stamp Vender. Rama. The copy of the relevant page of stamp sale register was called from the above mentioned vendor and copy of the same is placed on record. The secanned copy of the relevant page is produced as under:- 2.5 when this page is closely monitored, ti can easily be seen that there is overwriting on entry 439 to incorporate the name of the assessee in place of the original purchaser's name. In the name column, alphabets 'Monika' and alphabet W/o is written overwriting the name of original purchaser. Further, there are signatures of sh. Rajiv gupta and one more person at this entry, which clearly substantiates the fact that stamp paper was purchased on future dale and same was entered at Sr. No. 439 doled 27.04.2015 was over writing the name of original purchaser. Therefore, the above agreement was made to adjust the unaccounted cash in the books of accounts. 2.6 In order to unearth the facts involved in the case, summons u/s 131 was issued to the purchasers Sh. Ravinder Kumar S/o sh. Nathu Ram and Sh. Rajesh Kumar S/o sh. Nathu Ram resident of village Sekhupura, hansi on 29.11.2018 directing them to personally attend the office on 05.12.2018, both the purchasers personally attended the office on 10.12.2018 and their statement u/s 131(1) of the Act was recorded. 2.7 From the perusal of statement of purchasers, it is noticed that purchasers Sh. Ravinder Kumar S/o Sh. Nathu Ram and Sh. Rajesh Kumar S/o Sh. Nathu Ram resident of Village, Shekupura, Hansi are real brothers. In their statement, they have stated that both of them collectively posses total 21 acres of agriculture land located in Shekupura and having agriculture income of 12-15 lakh from the said agriculture land. Further,

ITA 123&124 /CHD/2020 A.Y. 2016-17 Page 27 of 37 they are involved in the diary business and posses 12-13 cows / bufalloes each and having the diary income from the sale of milk and sale purchase of cows and bufalloes. But, both the purchasers had not filed their return of income for any financial year. The dairy income earned by the assessee comes under the purview of taxation. But, both the purchasers did not file the return of income of any financial year. They were also required to file the documentary evidences in support of source of purchase of land from assessee. But, both the purchasers have not submitted any documents in support of diary business conducted by them. 2.8 further, during the statement, it was asked as to why they wanted to purchase the agriculture land located in Mangla, sirsa far from their native place i.e. Kukrawali Fatehabad. They replied that there is insufficient availability of water in agriculture land located in village shekupura, Hansi and they have to arrange the water from, far place through pipeline to cultivate the corps. Both the brothers wanted to purchase the, land located in Mangala because there is arrangement for tubewell on this agriculture land and this land is appropriate for cultivating the paddy corp. In order to prove the source for the purchase of agriculture land, they have submitted that they are earning agriculture income of Rs. 12-15 lakh from the agriculture land located in sekhupura, Hansi and now they are claiming that land located in Shekupura, hansi is not having the sufficient availability of portable water. Earning of Rs. 12-15 Lakh per annum from the brine water land is next to impossible. Therefore, the purchaser had made the contradictory statement. 2.9 They further stated that they wanted to purchase the agriculture land located in Mangala. Sirsa, because most of their relatives are resident of village Handikhera, sirsa and they wanted to shift near to their relatives. The distance between village Mangala and Handi Khera is aprox. 20 K.M. and agriculturists mostly lives at the place where his agriculture land is located. Hence, they have just made a fake story to justify the purpose of making the purchase of agriculture land.

2. 10 Purchasers during the statement have submitted that. As a source of advance for purchase of agriculture land from the assessee, they have arranged the funds from following sources:- (i) Rs. 7.5 Lakh from the sale of agriculture land. (ii) 14 15 from the income from agriculture lands. (iii) Reaminmg money income from relatives and relatives were later paid out of the withdrawal from the KCC limit of Rs. 10 lakh and Rs. 6.40 Lakh in the name of both the brothers. But, purchaser had not submitted any document evidence in support his claim made during the statement. 2.11 Both the purchasers during the statement were asked from where they were planning to arrange the funds of Rs. 1.25 crores to purchase the land from assessee on the date of registration. They stated that they were planning to sale some part of agriculture land located in Shekupura, Hansi. But, in mean lime there is slow down in the rates of property and agriculture land could not be sold

ITA 123&124 /CHD/2020 A.Y. 2016-17 Page 28 of 37 at the paces at which he desires to sell. Therefore, necessary funds could not be arranged for registration, There is gap around I I months in agreement and registration period for agriculture land under consideration. The purchasers stated that during the period, due to decline in price they could not sell their agriculture land to arrange the funds on registration. Normally, a person first arranges the funds for the registration and then think about making such a huge deal in property. A prudent person never makes an agreement and paid a huge sum of money when he is doubtful for arranging such a large amount of money in a short span of time. 2.12 From the perusal of sale agreement, it is notices that there is gap of around 11 months between agreement and registration of land. IN normal course , there is a gap of 3 months between agreement and registration of land, further, on the agreement total sale consideration for the sale of land is not mentioned. In normal course, it is mentioned in the agreement. Assessee's spouse Sh. Rajive Gupta has also entered into an agreement for sale of land, on 27.04.2015 and dale of registration is same in both the cases i.e. 19.04.2010. These facts prove that agreement of sale between the assessee and purchasers was not authentic. 2.13 Both the purchasers were asked to produce the following documents on the date fixed i.e. 05.12.2018: 1. Copy of income tax return alongwith computation of income for the A.Y. 2010- 11 to A.Y. 2016-17 2. Copy of bank statement of all the bank accounts in your name for the F.Y. 2015-6 3. Documentary evidences in support of ource of purchase of land from Smt. Monika gupta, Gupta Bhawan, Badra bazaar, Sirsa. But , both the purchasers had not furnished the above documents/ information on the sate f making the statement i.e. 10.12.2018. 2.14 The assessee has made the agreement on 15.05.2015, just 15 days before the introduction of amendment in section 269SS of the l.T. Ad, 1961 on 01.06.2015, which states that no advance in form of specified sum can be taken or accepted otherwise than through account payee cheque, bank draft or use of electronic clearing system if the amount is grater than Rs. 20,00,000/-. The above arrangement was made to escape the said amendment and introduce the unexplained cash into the books of the assessee before the amendment made into the Act. 2.15 The assessee belongs to Sirsa and the purchasers are the resident of village Sekhupura, Hansi. The agriculture land under consideration is located in Mangala, near Sirsa city. But, the stamp paper for the agreement of sale of agriculture land was purchased from Rama, sirsa. The distance of Rania from the purchasers and. Seller is aprox 140 KM. and 22 KM. respectively and distance of agriculture land under consideration from Rania is aprox./ 15 K.M.. In a normal agreement stamp is purchased from nearby area. These, facts prove that the agreement of sale between the assesse and the pruchaserers was not authentic. 2.16 From the perusal of agreement for sale, it is noticed that in the witness's signature, Sh. Bhagirath Gupta, Father-in-law of the assessee and Sh. Ashok Goyal, relative of the assessee had signed as a witness. Therefore, both the witness

ITA 123&124 /CHD/2020 A.Y. 2016-17 Page 29 of 37 were from the seller's side. In normal circumstances, there are witness from both the sides, purchasers as well as seller, therefore, normally, purchaser made the payment in presence of his own witness, to whom he knows, because purchaser is more concerned about the safety to earnest money in the agreement. But, in this case both the witness were from seller side. As already mentioned, assesse's spouse Sh. Rajiv gupta has also entered into an agreement for the sale of land on 27.04.2015. In this agreement witness were the same person i.e. Bhagirath gupt and Sh. Ashok Goyal. These facts prove that agreement of sale between the assessee and purchasers was not authentic. 2.I7 The assessee is reputed person and having bank accounts. Even then the assessee had not deposited the cash in her bank account upto the demonetization period i.e. 08.11.2016. Furher, it is noticed that during the proceedings financial, years, the assessee has shown very nominal cash in hand, the assessee has substantially increased the figure of cash in hand during the year under consideration and further held this cash balance till the demonetization period. 2.18 From the above facts, it is very much clear that assessee had created a fictitious story in the form of agreement of sale of land and introduced the unexplained cash of Rs. 40,00,000/ - in his books. Therefore, cash amounting Rs. 40,00,000/'- introduced in his books of accounts are disallowed as per provisions of section 68 of the i.t. Act, 1961 and added the taxable income of the assessee” 15.4. The assessee assailing the action before the CIT(A) as

per page 9 of the impugned order relied upon the following documents :

S.No. Evidence Page paper Book Copy of Iqrarnama for sale of land between the appellant 1 and prospective purchasers 19 to 22 Copy of agreement between the appellant and 22 2 prospective purchasers for extending the time for payment of land Copy of statement dated 10. 12.2018 of Shri Rajesh 3 25 29 Kumar, one of the prospective purchasers of the land Copy of statement dated 10.12.2018 of Shri 4 30-34 Ravinder Kumar; one of the prospective purchasers of the land Copy of compromise deed dated 29.1.2017 5 35- 36 between the appellant and prospective purchasers Copy of affidavit of prospective purchasers namely 6 40- 41 Shri Ravinder Kumar and Shri Rajesh Kumar Copy of affidavit dated 19.1.2018 of the appellant 7 42- 43 Copy of cash flow statement furnished by the 39 8 appellant Copy of letter dated 19.1.2017 by the appellant to 38 9 the Registrar

ITA 123&124 /CHD/2020 A.Y. 2016-17 Page 30 of 37 15.5 The Assessing Officer’s observations and reasoning point-wise and para-wise was assailed with a detailed tabulated reply extracted at page 10 to 26 of the impugned order. The issue of over-writing was addressed. The case-law relied upon in support of the fact that for agriculture income, returns were not required to be filed and even if according to the Assessing Officer, for dairy income, the purchaser ought to have filed the return, the assessee could not be held liable.

Casting the onus upon the assessee for ensuring the filing of return by the purchasers, it has been argued, was an unfair burden as the assessee had no occasion to advice the purchasers. Arguments and de cisions were relied upon to assail that although the assessee was not required to explain the source of funds from the purchasers, however, since the purchasers themselves have appeared and given valid explanation, the same cannot be ignored. It has been argued that the AO’s action to consider source of source was contrary to the legal position and even otherwise the sources are not upset or rebutted. The assessee's submissions further summed up in para 1.10 to 1.16 are reproduced hereunder :

“1.10 In nutshell, the submission of the appellant is that during the gear under consideration assessee sold her agriculture land of village Mangala and an agreement for sale of his agriculture land of village mangala measuring 43 kanals 11 marla 2 sarsai at the rate of Rs 30,00,000/ per .acre was made in the instant year with Shri Ravinder Kumar son of Nat hit Ram and Rajesh Kumar son of Nethu Ram

ITA 123&124 /CHD/2020 A.Y. 2016-17 Page 31 of 37 resident of village Shekupra (Hansi) on 15.05.2015 and received a sum of Rs. 40,00,000/'- as earnest money on the same date in the presence of the witnesses. That the date was fixed 19 04 2016 for registration and on that date balance payment was payable by the purchaser to the assessee. That on that date purchaser could not arrange the balance amount and as such with the mutual of both the parties date was extended to 30.0 9 2016 and on that date the purchaser could not arrange the balance amount and with the mutual consent of the seller- assessee and purchasers the date of agreement/final registration was extended to 19.01.2017. That on the said dale purchaser-did not came and ultimately seller-assessee appeared, before the sub registrar (Tehsildar) Sirsa, and filed affidavit before him and as such his presence of seller was recorded before the 'Tehsildar.

1.11 That thereafter purchasers contacted the assessee to give further, time and a panchayat was held and in that panchayat it was decided by the panchayat with the mutual consent of both the parties (purchasers and seller) that final date for execution of sale deed was extended uptill .311 2019 and it was agreed between the parties that the purchaser will make the balance payment upto 31.1.2019 to the seller for execution of sale deed in their favour and in case they are unable to make the payment a sum of Rs. 20,00,000/- will be returned by cheque/ RTGS to the purchasers by the seller out of the total earnest money of Rs. 40,00,000/- without any interest and balance amount of Rs. 20,00,000/- will be forfeited by the seller. That a written agreement was also executed between the parties who alongwith panchayat members have also singed the same.

1.12 That the assessee appeared before the Income-Tax Officer, Ward.

1.13 That on law facts of the case the learned Income Tax Officer has erred that there is overwriting on entry number 439 of register of stamp vendor from whom stamps were purchased for execution of agreement Thai the Ld Income Tax Officer failed to appreciate that there is no overwriting as alleged by her rather and the name of assessee Monika wife of Rajiv Gupta, Sirsa through Rajiv Gupta and agreement is clearly mentioned in the entry and also there is signature of Rajiv Gupta (husband of assessee who

ITA 123&124 /CHD/2020 A.Y. 2016-17 Page 32 of 37 purchased the stamp papers) and there is no overwriting as held by the Assessing Officer. That the Ld. Income Tax Officer also failed to appreciate that the Register of regularly check by the office of Deputy Commissioner Sirsa on monthly basis and no one can purchase stamp paper on back/future date as alleged by her.

1.14 That the Ld. Income Tax Officer also failed, to appreciate that both the purchasers have appeared before her and their statement was also recorded and in their statement was also recorded. They have also produce their ID. They have also confirmed the execution of agreement and have also »y confirmed the earnest money for amounting to Rs. 40,00,000/-given by them They have also explained the source of earnest money given by them-y and have also produced the fardjamabandi regarding proof of holding of agriculture land owned by them That both the purchasers are agriculturist and their income never exceeded the taxable quantum and they have got source of their income mainly of agriculture sources which is not taxable hence drawing of inference on account of non filing of income tax return is basically wrong.

1.15 That on law facts of the case the assessee has proved onus on her part by producing the agreement for sale of her agriculture land. That on the direction of Ld. Income Tax Officer purchasers were also appeared before the Income Tax Officer. They have also produced their ID. They have also confirmed, the earnest money given by them and have also explained the source of earnest money given by them. Moreover the date for execution of sale deed is still pending hence the inference drawn by the Ld ITO is against the principle of natural justice particularly when the assessing officer has made addition under section 68 without giving any notice. 1.16 It is further respectfully submitted that appellant after the order of assessment dated 24.12.2018 under section 143(3) of the Act made the payment to purchaser are as under: Sr. No. Date Name of Purchaser Amount i) 28.01.2019 Sh. Ravinder Kumar 10,00,000 ii) 28 01 2019 Sh Rajesh Kumar 10.00,000 Total - 15.6 However, the arguments were considered to be not acceptable and the view of the AO for the reasons set out in the impugned order at para 5.1 which is more or less repetition of the assessment order has been confirmed.

ITA 123&124 /CHD/2020 A.Y. 2016-17 Page 33 of 37 15.7 For similar reasons, the addition has been confirmed in the case of Shri Rajiv Gupta also.

15.8 On a careful consideration of the facts, arguments and the respective findings, I notice that the ld. CIT(A) did not care to address specific para 1.13 in Smt. Monika Gupta’s case. It is also seen that the ld. CIT(A) also has not care d to address the facts reproduced in the order itself in para 1.16. I notice that no evidence has been placed on record to discard the plethora of evidence by way of documents, Compromise Deed before Panchayat, the statements of the purchasers etc. It is also seen that no reasoning has also been placed on record to show how the evidences relied upon can be outrightly discarded. For the sake of repetition, it need be mentioned that the Compromise Deed is a deed wherein the signatories to the documents are not all relate d to the sellers, infact the erstwhile Sarpanch Shri Sita Ram is a relative of the purchaser. The other witnesses/Panchayat Members are all at arm’s length partners. The tax authorities furthe r ignored the fact that though in the Agreement to Sell, witnesses are known to the sellers, however, the fact that the Agreement to Sell was recorded in the residence of Shri Sita Ram, relative of Shri Rajesh Kumar, one of the purchasers is again conveniently ignored. This fact is recorded by the AO himself which gives cause to raise the allegation of selective reasoning. For ITA 123&124 /CHD/2020 A.Y. 2016-17 Page 34 of 37 reasons best known to the tax authorities, they did not want to address the fact that justifiable reasons are given by the purchasers for contemplating sale of their agricultural land and purchasing land under consideration stated to be close to their relatives. The argument that at the site of contemplated purchase, relatives of the purchasers resided etc. were facts which all remain unrebutted on record and are not shown to be incorrect. Similarly the factual position that the area where their agricultural land was situated, there was a paucity of water and in the area where they were contemplating relocating, water was in abundance conducive to rice growing, is again an unrebutted statement on record recorded by the AO himself. Similarly the ownership of sufficient lands to justify contemplated purchase has remained unrebutted. The insistence that there is no returned income ignoring the fact that largely it is agricultural income earned from agricultural land and related activities which the purchasers had placed on record. Casting upon the assessee the burden that the purchasers ought to have filed the return for dairy income, is an unfair burden as no such role or responsibility can be fixed on a seller. The person contemplating sale of his property or an asset needs to just ascertain that the purchaser has funds and is in a position to gather them and make the payment. It is not his onus or duty to ensure that the funds made

ITA 123&124 /CHD/2020 A.Y. 2016-17 Page 35 of 37 available are from disclosed sources as he has no such authority to call upon him to explain the fact. The fact that there was a time lag of 11 months conte mplated as opposed to the time lag of 3 months which was deemed to be normal according to the AO and the ld. CIT(A) ignores the fact that the agreement was entered into between the parties wherein the purchasers Shri Rajesh Kumar and Shri Ravinder Kumar admittedly did not have the entire funds available in cash and they were required to liquidify their assets by sale of agricultural land and raising loans from their relatives etc. and the fact that ultimately despite their best efforts and attempts of the parties after extending the date a few times, ultimately the funds could not be raised is a fact available on record. The fact that before the Panchayat as per the Compromise Deed available on record which also stands unrebutted on record, the purchasers were still hopeful of selling their lands and have made their statements before the AO and recorded in the Compromise Deed also that the land prices at the time of sale nose- dived and this fact also stands unrebutted on record. No effort has been made by the tax authorities to show that the purchasers did not own the specific land contemplated for sale and that the prices infact did not drop and were infact relatively stable or rising. In the absence of any evidence whatsoever upsetting the plethora of evidences placed on record, I find no good

ITA 123&124 /CHD/2020 A.Y. 2016-17 Page 36 of 37 reason to accept the claim of the revenue based on suspicion, surmises and conjectures. What is normal for a person today may vary from what is conte mplated to be normal in another day and time. So for the tax authorities to conclude that three months’ time lag was a normal time, no facts or reasoning has been brought on record. Further, no such discretion or authority has been given by the Statute to arbitrarily and randomly conclude what is a reasonable time without caring to refer to relevant facts. Accordingly, on a careful consideration of the orders of the tax authorities, the reasons set out therein, the consistent arguments on behalf of the assessee, extracted in the impugned order and canvassed in the present appeals alongwith the statements of the purchasers on record which I notice have remained largely ignored and the Compromise Deed entered with by the assessees and parties, I find that the assessees have more than adequately explained the sources of deposits of Rs. 40 lacs each in their accounts.

No contrary fact or evidence has been referred to by the tax authorities to justify the discarding of the evide nces and the claims. The orders based on mere suspicions, conjectures and infact biases cannot be upheld. Satisfied by the explanation offered, the additions are directed to be deleted. Said order

ITA 123&124 /CHD/2020 A.Y. 2016-17 Page 37 of 37 was pronounced in the Open Court at the time of hearing itself.

Order pronounced in the Open Court on 13 th July,2020.