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Income Tax Appellate Tribunal, JAIPUR BENCHES,”A” JAIPUR
Before: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA. No. 89/JP/2018
fu/kZkfjrh dh vksj ls@ Assessee by : Shri P.C. Parwal (CA) jktLo dh vksj ls@ Revenue by : Shri J.C.Kulhari (JCIT) lquokbZ dh rkjh[k@ Date of Hearing : 26/11/2018 mn?kks"k.kk dh rkjh[k@Date of Pronouncement :25/02/2019 vkns'k@ ORDER PER: VIKRAM SINGH YADAV, A.M. This is an appeal filed by the Revenue against the order of ld. CIT(A), Alwar dated 22.11.2017 for the Assessment Year 2008-09 wherein the Revenue has taken the following ground of appeal:
1. On the facts and circumstances of the case and in law Ld. CIT(A) erred in deleting the addition of Rs. 1,66,00,000/- made by the AO on account of unexplained cash deposit u/s 68 of the I. T. Act, 1961 in the bank account of the assessee, without appreciating the material facts of the case.
2. Briefly the facts of the case are that the Assessing Officer received certain information from the DDIT(Inv.), Alwar that the assessee had entered into an agreement to sell three bighas of his agricultural land at Tapukara for Rs. 2.55 crores and his statement was recorded before the ADIT(Inv.) Alwar. It was further noted by the AO that the registry for the sale of land was made for Rs. 42,00,000/- as against Rs. 2,55 crores. The AO further noted that there were deposits of Rs. 2,08,00,000/- in the bank account of the assessee. Certain preliminary enquiry was conducted by the AO in terms of seeking information from the assessee wherein the latter submitted that he has received a sum of Rs. 2.55 crores from Shri Ramesh Mudgal on sale of land which was registered for only Rs. 42,00,000/-. The AO observed that out of Rs. 2.55 crores, Rs. 2.08 crores were deposited in the bank account while the rest of amount was invested in purchase of agricultural land and construction of house and the differential amount of Rs. 1,66,00,000/-was treated as undisclosed income of the assessee and notice U/s 148 of the I.T. Act was issued to the assessee. In compliance, the assessee submitted that his original return of income be treated as return in response to notice u/s 148 of the Act. During the course of such proceedings, a show cause notice was issued as to why a sum of Rs. 1,66,00,000/- should not be added to his income. In response, the assessee submitted that in his statement recorded on oath before the ADIT(Inv.) Alwar, he has submitted that he has sold the land situated at Tapukara measuring 3 bighas @ Rs. 85,00,000/- per bigha, i.e. total consideration received Rs. 2.55 crores and in support, copy of register of deed writer was submitted. It was further submitted that the Collector (Stamp), Alwar have also determined the value of the property at Rs. 2.55 crores and in support, a copy of notice issued by the Collector(Stamps), Alwar to the purchaser Mr. Ramesh Mudgal was enclosed. It was further submitted that since the ancestral agricultural land was sold by the family members of late Sh. Narsi Ram namely the assessee, his mother and his four sisters who do have individual bank accounts, the whole of sale consideration was deposited in the bank account of the assessee. The submissions so filed by the assessee was considered but was not found acceptable to the Assessing as the reasons furnished by him were not corroborated with any documentary evidences. During the course of assessment proceedings, the statement of the assessee was also recorded however, the AO observed no new facts or documents were brought up by the assessee in his statement. Accordingly, the AO held that it was not proved that the assessee has received Rs. 2.08 crores against sale of agricultural land and no other source regarding cash deposit has been explained by the assessee hence, the addition of Rs. 1,66,00,000/- was made to the total income of the assessee.
Being aggrieved the assessee carried the matter in appeal before the ld. CIT(A) who has granted the necessary relief to the assessee holding that source of deposit is reasonably explained. Now, the Revenue is in appeal against the said findings of the ld CIT(A).
The ld DR vehemently argued the matter and relied on the findings of the Assessing officer and taken us through the findings of the AO which we have noted above and are not repeated for sake of brevity.
Per contra, the ld. AR reiterated his submission made before the lower authorities and submitted that the assessee is a poor agriculturist and not having any other source of income except agricultural income. The assessee had inherited ancestral agricultural land situated at village Tapukara, Tehsi- Tijara along with his mother and four sisters. The assessee along with his mother and sisters have collectively entered into an agreement to sell with Amit Jha, Neeraj Goyal & Mr. Wasir on 21.07.2007 to sale their 3 bighas of agriculture land at total sale consideration of Rs. 2.55 crores. Thereafter, registry was executed for transfer of land by all the members with the purchaser on 23.10.2007 wherein the purchaser mentioned value at Rs. 42 lakh to save his stamp duty though he has paid full consideration of Rs. 2.55 crores through cheque/cash. It was further submitted that the Collector (Stamp), Alwar has also taken sale consideration of Rs. 2.55 crores and copy of the notice has also been submitted before the Assessing Officer. It was further submitted that the Collector (stamp), Alwar has also passed an order on 08.12.2016 to confirm the transaction value of Rs. 2.55 crores and has imposed deferential of stamp duty, interest and penalty of Rs. 44,00,995/- and the copy of the said order was submitted before the lower authorities. It was further submitted that the affidavit duly signed and notarized by the mother and 4 sisters to the effect that the payment received as sale consideration for sale of the agricultural land is deposited in the bank account of the assessee was also submitted before the lower authorities. In support, reliance was placed on the decision of Hon’ble Supreme Court in case of CIT vs. P.K. Noorjehan 237 ITR 570, decision of the Coordinate Bench in case of Deepak Sareen vs. ITO in dated 08.04.2011 and decision of the Coordinate Bench in case of Sh. Sukhveer Yadav vs. ITO in ITA No. 739/JP/2017 dated 21.05.2018. In particular, our reference was drawn to decision in case of Sh. Sukhveer Yadav and its findings contained at para 4 which is reproduced as under:-
“4. Having considered the rival submissions as well as the relevant material on record, we note that the assessee along with his brother entered into an agreement dated 28.8.2008 with Shri Shabudeen, Jamshed S/o Jagdev resident of village Mundana Meo, Tehsil- Tijara, District Alwar (Rajasthan) for sale of agricultural land for a consideration of Rs. 68,37,600/-. The assessee is having 50% share in the said land and accordingly the share of the assessee comes to Rs. 34,18,800/-. We further note that the agreement to sale was duly signed by the seller as well as by the purchaser and was also signed by the attesting witnesses and Notary Public. The attestation of Notary Public also has given the details of the serial number, date as per its register maintained for the purpose of attestation of documents. Thus it is clear that though the said agreement to sale is not a registered document but the assessee has not claimed the transfer of the agricultural land through the said agreement to sale but the transfer was finally completed vide two sale deeds dated 15th October, 2008. The only dispute is the sale consideration which is shown in the agreement to sale which is much higher than the consideration shown in the sale deeds. The assessee explained that the actual consideration for the agricultural land in question was received by the assessee and his brother as per the agreement to sale. However, the consideration shown in the sale deed was purposefully shown equivalent to the DLC rate so that the stamp duty expenditure could have been kept minimized by the purchaser. Though the ld. D/R has raised an objection of unregistered agreement to sale, however, we find that the execution of agreement to sale and the signatures of the parties has not been disputed by the AO and even if the AO was having any doubt about the genuineness of the agreement, then it could have been verified and examined by calling all the parties to the agreement. The AO instead of conducting enquiry to verify the agreement to sale, has proceeded only on the basis of the sale deed for the purpose of the sale consideration of agricultural land in question. The AO has not disputed the land in question being agricultural land and not subjected to capital gains tax and, therefore, when the assessee is not having any other source of income and the only income is agricultural income, then the said explanation of the assessee cannot be rejected without bringing any evidence to contradict the facts recorded in the agreement to sale. Once the assessee has explained the source of deposit in the bank as sale consideration of agricultural land and also produced the agreement to sale in support of the said claim, the AO ought to have verified the genuineness of the agreement to sale and the consideration as agreed upon by the parties as per the agreement to sale. In the absence of any contrary facts or material brought by the AO, the rejection of evidence produced by the assessee is not justified. Accordingly having regard to the facts and circumstances of the case, we find that the assessee has explained the source of deposit in bank by producing the supporting evidence and, therefore, the addition made by the AO is not justified. Accordingly, we delete the addition made by the AO.”
We have heard the rival contentions and perused the material available on record. The issue under consideration relates to source of deposit in the assessee’s bank account and whether the explanation so submitted by the assessee is acceptable or not. It is a trite law that where certain amounts are found deposited in the bank account of the assessee, the initial onus is on the assessee to explain and corroborate the source of such deposits to the satisfaction of the Assessing officer. In the instant case, the assessee has submitted that he has no other source of income except agricultural income and during the year under consideration, he has sold his agricultural land which is owned jointly with his mother and four sisters and the sale consideration amounting to Rs 2.55 Crores so received has been deposited in his bank account. The transaction of sale of 3 bighas of agricultural land at the rate of Rs 85,00,000 lacs per bighas has not been disputed by the Revenue. What has been disputed by the Revenue is that the sale consideration as per registered sale deed is only Rs 42 lacs and not Rs 2.55 crores. The assessee’s explanation in this regard is that agreement for sell was entered into for Rs 2.55 crores, however, while executing the sale deed, the sale consideration was stated as Rs 42 lacs at the behest of the purchaser in order to save the stamp duty. We find that the Collector (Stamps) has examined the said sale transaction and has finally determined vide his order dated 8.12.2016 the value of the agriculture land so sold at Rs 2.55 crores for the purposes of levy of stamp duty. Therefore, the explanation so submitted by the assessee is corroborated by the appropriate authority and therefore, it cannot be disputed. The Assessing officer has apparently not appreciated the said fact and has rejected the said explanation, however, we find that the ld CIT(A) has rightly appreciated the said explanation so submitted by the assessee which is corroborated by the order of the Collector (Stamps) that the value of the property is Rs 2.55 crores and not Rs 42 lacs so stated in the sale deed. Further, we find that the assessee’s explanation has been consistent right from the time when his statement was recorded by the ADIT(Alwar) to his statement recorded during the course of assessment proceedings. Therefore, where the assessee has discharged the initial onus cast on him and has furnished the necessary explanation, where the Assessing officer wishes to disprove the assessee’s explanation, the onus shifts on the Revenue to bring evidence on record to disprove such explanation. However, we find that there have been no steps which have been taken by the Assessing officer in terms of calling the purchaser and recording his statement or bringing any other corroborative evidence on record. In light of above discussions, we hereby affirm the following findings of the ld CIT(A) which are reproduced as under:
“5.3.2 I have considered the above mentioned facts of the case. The moot point is the source of cash deposits amounting to Rs.2.08 Cr found deposited in the bank account of the appellant. The appellant has no other source of income other than the agricultural land which he has inherited from his father. The appellant claimed that he along with other co- sharers i.e his mother and 4 sisters entered into an agreement . Goyal and Sh. Abdul Rashid to with Sh. Amit Jha, Sh. Neera sell the 3 bighas land at the rate of Rs.85 Lakhs per bigha, which comes to Rs.2.55 Cr. Although the appellant does not have the copy of the agreement but he has submitted the relevant page from the register of notary indicating that an agreement to sell was indeed notarized on 21/07/ 2007 with regard to agreement to sell off the property at a consideration of Rs.85 lakhs per bigha. The document also shows that he has got an advarce of Rs. 25.51akhs that includes Rs.4 lakh by cheque. I have also taken note of the notice issued by the Collector stamp duty, Alwar about the stamp duty demand -on the sale consideration of Rs.2.55 Cr at the rate of created Rs.85 lakhs per bighas. Although, it is a fact that the registered sale deed was executed in the name of Sh. Ramesh Mudgal as per the sale deed executed on 23/10/2007 for a consideration of Rs. 42 Lakhs but I find overwhelming evidences in support of the actual sale consideration being Rs. 2.55 Cr. Even the date of cash deposits matches with the sale date. The Notarized agreement to sale dated 21.07.2007, notice issued from the office of the stamp duty authority and the date of cash deposits along with the sale deed, all these evidences point towards the fact that the sale consideration of the land was Rs. 2.55 Cr. and not Rs. 42 Lakhs. It is possible that the sale consideration was purposely put down at Rs. 42 Lakhs to save stamp duty authority. The stamp duty authority has also determined the valuation at Rs. 2.55 Cr. and issued demand notice on the said amount of sale consideration. In view of the factual matrix of the case and evidences on record, it is may considered view that the cash deposits of Rs. 2.08 Cr. including Rs. 77 Lakhs received through cheques, is from the sale consideration of the agricultural land. Accordingly, the source of the cash deposits is reasonably explained. If the cash sale consideration is not explained or suppressed in the hand of the purchaser i.e Sh. Ramesh Mudgal then, he is liable to be taxed. Therefore, in view of available facts/evidences and preponderance of probability, as also the determination of the value by the stamp duty authority, it is may considered view that the cash deposits of Rs. 1.31 Cr. and cheques deposits of Rs. 77 Lakhs totaling to Rs. 2.08 crores is from the sale consideration of the agricultural land. Also it is to be taken into account that the ancestral land inherited by the appellant has 5 other co-shares i.e his mother and 4 sisters and they have all given affidavit that they had deposited their share of sale proceeds in the bank account of the appellant as they did not have bank accounts in their names. As the source is evidence and reasonably explained the addition of Rs. 1.66 crores is deleted. Appellant’s ground of appeal on the issue is allowed.”