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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI KUL BHARAT & SHRI MANISH BORAD
आदेश / O R D E R PER KUL BHARAT, J.M: This appeal by the assessee is directed against order of the CIT(A)-2, Bhopal dated 2.8.2016 pertaining to the assessment year 2006-07. The assessee has raised following grounds of appeal:
[ Imran Sherkhan Bhopal]
That on facts and circumstances of the case the assessment completed u/s 144/147 is bad and unjust and without jurisdiction as no notice u/s 143(2) was served to the appellant in response to notice issued u/s 148.
2. That the Ld. CIT(A) had erred in facts and in law in upholding the validity of assessment framed under section 144/147. The reassessment completed on the basis of unserved notice u/s 148 and before 31.3.2013 is bad and unjust. 3. The Ld. CIT(A) has erred in upholding the addition of Rs.10,65,000/- as unexplained investment, when the said amount was available with the assessee. 4. The Ld. CIT(A) has erred in upholding the addition of Rs.16,04,000/- without appreciating the facts that the assessee was having the source of the said deposits not giving the effect of the amount withdrawn and redeposited in bank and also did not allow the consideration received of Rs.18,37,800/- instead of Rs.11,92,000/-. 5. The Ld. CIT(A) and the Ld. A.O. both of them have erred in law and were not justified in disbelieving the sale proceeds of agriculture land (Rs.18,37,800/-.) 6. That, on the facts and circumstances of the case, the Ld. CIT(A) as well as Ld. A.O. were not justified in making addition of Rs.29,96,000/- appeared in State Bank of India on 3.7.2005 and 18.7.2005 respectively whereas the peak investment in this said bank amounted to Rs.19,31,000/- only. 7. That the appellant craves to add, alter or delete any ground or grounds of appeal on or before hearing.
Facts giving rise to the present appeal are that the case of the assessee was reopened on the basis of the AIR information. A notice u/s 148 of the Income Tax Act, 1961 (hereinafter called as ‘the Act’) was issued. Since there was [ Imran Sherkhan Bhopal] no representation on behalf of the assessee, the A.O. made assessment u/s 144 r.w.s. 147 of the Act. The A.O. made addition of Rs.29,96,000/- in respect of the amount deposited in the bank account of the assessee. Aggrieved by this, the assessee preferred an appeal before Ld. CIT(A).
The Ld. CIT(A) partly allowed the appeal. Out of addition of Rs.29,96,000/- a sum of Rs.13,92,000/- was deleted and rest of the addition was confirmed. Against this, the assessee is in appeal before this Tribunal.
At the outset, Ld. counsel for the assessee submitted that he does not wish to press ground numbers 1 & 2 of the appeal. Hence, these grounds are dismissed as not pressed.
Ground no.7 of the appeal is general in nature needs no separate adjudication. Hence, this ground is also dismissed.
[ Imran Sherkhan Bhopal]
Now coming to the remaining grounds i.e. Ground Numbers 3 to 6 are related to the additions sustained by the Ld. CIT(A).
Apropos to these grounds Ld. counsel for the assessee submitted that the authorities below failed to appreciate the facts that the assessee had explained the source of deposit in his bank account. He submitted that the Ld. CIT(A) accepted the contention in part, thus sustained the additions in part purely on the conjecture basis. He submitted that it is not the case where the tax payers has no source of income at all, the assessee herein is a fourth class government employee and also proved earning of agricultural income coupled with the fact that he received sale consideration upon sale of agricultural land. He stated before the assessing officer there was no representation on behalf of the assessee. He submitted that the assessee was not provided sufficient opportunity and the assessment 4
[ Imran Sherkhan Bhopal] was concluded in haste. He submitted that before the Ld. CIT(A), it was demonstrated that the assessee had withdrawn from his bank accounts of certain sums from 04.07.2005 to 15.07.2005 before depositing the same on 18.07.2005. Hence, Ld. CIT(A) failed to appreciate this fact and proceeded to reject the claim of the assessee.
He further submitted that the revenue has not brought any material on record suggesting that this amount was utilized somewhere else. In the absence of such material the Ld. CIT(A) ought not to have sustained the addition. It is further contended that the actual consideration received on sale of land was at Rs.18,37,800/-, against a sum of Rs.11,92,000/- as recorded in the sale deed. He further contended that no inquiry was made from the purchasers, even the co-owners of the land have confirmed this fact on oath, i.e. the actual consideration of the [ Imran Sherkhan Bhopal] agricultural land so sold was higher than what was recorded in the sale deed.
Further, the Ld. counsel for the assessee submitted that the Ld. CIT(A) has accepted the source of income but did not accept the opening cash balance as on 1.04.2005. He contended that under these facts ld. CIT(A) ought to have deleted the entire addition.
Per contra Ld. Departmental Representative (Ld. DR) vehemently opposed these submissions. He submitted that the entire explanation so furnished is after thought and is not being supported by any material evidence. Ld. DR further submitted that the issue in question is to examine and verify the source of cash deposit which stood deposited in the account of the assessee. Hence, onus is on the assessee to prove the sources of the deposits with plausible evidences. He submitted that mere making statement
[ Imran Sherkhan Bhopal] would not be sufficient to accept the contention of the assessee. In rejoinder Ld. Authorised Representative (AR) submitted that all the relevant evidence have been placed on record. The authorities below have not considered these evidences in the right prospective. Ld. counsel submitted that the bank statement demonstrates deposit and withdrawal. Further, there is a sale deed demonstrating the sale of agricultural land, and other evidence suggesting the earning of agricultural income it is not the case where the assessee has failed to provide any evidence.
We have heard the rival contentions, perused the material available on record and gone through the order of the authorities below. The only issue is with regard to source of sum of Rs. 19,31,000/- & Rs.10,65,000/- a total sum of Rs.29,96,000/-( Twenty nine lacs ninety six thousand rupees only) deposited in cash on 03.07.2005 & 18.07.2015 in the Saving Bank Account No.53015202475 7
[ Imran Sherkhan Bhopal] held with State Bank of India, Chaowk Bazar Branch, Bhopal.
Before the Ld. AO no one appeared on behalf of the assessee. The cause of non-appearance is stated to be death of someone in family. However, the assessing officer made addition of entire sum of Rs.29,96,000/- u/s 69 of the Act and thus assessed income at Rs.29,96000/-. On appeal to the Ld. CIT(A) this addition was reduced to Rs.16,04,000/- by partly accepting the explanation of the assessee. Ld. CIT(A) has decided the issue as under:
“During appeal, the assessee filed written submissions stating that notice u/s 148 was issued on 26.03.2013 which as received by the appellant on 07.05.2013, that is, after about 42 days, it is quite impossible or uncommon that postal service will take such long time. It is further stated that the cash was deposited out of the sale of agricultural land held jointly by the assessee with his brothers and sisters. This is evident from the names of the sellers as mentioned in the Sale Deeds. However, as the appellant Shri Imran Sher Khan manages the entire family lands, the entire consideration was deposited in the saving bank account held in his name in respect of which the AIR information was received. Particulars Sale Mode of payment as Amount claimed by consideration per the registered the assessee to be as per the sale deed actually Registered Sale received/Market 8
[ Imran Sherkhan Bhopal] deed value adopted u/s 50C Regd. Sale deed dated Rs.3,04,000 Cash received in Rs.5,16,400/- 27.05.2005 in favour of parts prior to Shri Raghuveer Singh 27.05.2005 Meena Regd. Sale deed dated Rs.3,04,000 Cash received in Rs.3,04,000/- 27.05.2005 in favour of parts prior to Shri Balbeer Singh 27.05.2005 Meena Regd. Sale deed dated Rs.2,80,000 Cash received in Rs.5,01,200/- 27.05.2005 in favour of parts prior to Smt. Kaushalaya Bai 27.05.2005 Meena Regd. Sale deed dated Rs.3,04,000 Cash received in Rs.5,16,400/- 27.05.2005 in favour of parts prior to Shri Manmohan Singh 27.05.2005 Meena Total Rs.11,92,000/- Rs.18,37,800/-
It was claimed in the written submission filed during appeal that the purchasers had actually paid an amount of Rs.18,37,800/- instead of Rs.11,92,000/- mentioned in the registered sale deeds. It was further stated that the assessee and his eight siblings jointly held about 20acres of agricultural land out of which the above 1.5 acres X4=6.0 acres of land was sold by them as per the four registered sale deeds dated 27.05.2005. The assessee has filed Khasra and Form P-II which show that the land was irrigated and under cultivation of Soya bean. Accordingly to the assessee, the income from the said agricultural land was about Rs.25,000/- per acre. Reliance was also placed upon the decision of I.T.A.T. Jabalpur in ITANo. 141/Jbp/2007 relating to A.Y. 2000-01 in which the estimated of agricultural income of Rs.20,000/- per acre has been held to be faire and reasonable. The assessee further stated that apart from the sale consideration, he was also in possession of the following cash in hand: i. Opening cash in hand as on 01.04.2005 available Rs.5,27,432/- with the assesse from the earlier F.Y. 2004-05 ii. Agricultural income Rs.2,00,000/- 9
[ Imran Sherkhan Bhopal] iii. Cash withdrawals from bank from 04.07.2005 Rs.11,52,000/- to 15.07.2005 In support of the above submissions, the assessee filed cash flow statement as under: Date Particulars Payments Receipts Balance cash 01.04.2015 Cash book pg. no.1 as 527432 on 20.05.2005 showing balance 20.04.2015 Drawings 25000 502432 30.04.2015 Agricultural Income 200000 702432 09.05.2015 Withdrawal from bank 10000 712432 20.05.2005 Drawing 25000 687432 27.05.2005 Sale of Agricultural 1837800 2525232 land 01.06.2005 Drawing 30000 2495232 03.07.2005 To deposit in SBI 1931000 04.07.2005 By bank 40000 09.07.2005 By Bank 5000 12.07.2005 By bank 7000 15.07.2005 By bank 11,00,000 18.07.2005 To deposit in SBI 10,65,000 Closing bal. of cash 6,51,232 book on 18.07.2005
4.4 I have considered the facts of the case and written submissions of the assessee. The notice u/s 148 was issued on 26.03.2013 well before 31.03.2013. This is sufficient time for the notice to reach by post. Hence the assessment has been validly made. The assessee is not maintaining any books of accounts. The cash flow statement has been prepared only to explain the cash credits. It is not based upon any books of accounts or supported by any documentary evidence. The assessee was not filing any returns of income. No return of income was filed in compliance to the notices u/s 148 for A.Y. 2006-07 under assessment. There is thus no evidence in support of the opening cash in and 10
[ Imran Sherkhan Bhopal] of Rs.5,27,432/- as claimed by the assessee. Similarly, no documentary evidence has been furnished in support of the receipts of agricultural income of Rs.2,00,000/- claimed to be received on 30.04.2015. As per the four registered sale deeds dated 27.05.2005, the assessee had received cash of Rs.11,92,000/- upto the date of registration, i.e. 27.05.2005. there is no material/evidence with the appellant to establish that the actually received, Rs.18,37,800/- instead of Rs.11,92,000/-. The plea of the assessee that cash of Rs.11,92,000/- was available with him for being deposited on 03.07.2005 is accepted. Further the appellant and his siblings had a land holding of about 20 acres out of which 6 acres was sold on 27.05.2005. The assessee had filed Khasra and Form P-II which show that the land was irrigated and under cultivation of Soyabean. Accordingly to the assessee, the income from the said agricultural land was about Rs.25,000/- per acre. However, in the absence of any documentary evidence regarding the actual receipt of sale proceeds or the actual consumption by the households of the 9 siblings, it is held that it would be reasonable if further credit of Rs.2,00,000/- is given out of the agricultural income of Rs.2,00,000/- claimed to be received during the current year (on 30.04.2015) and out of the agricultural income claimed to be forming part of the opening cash in hand. Upon due consideration of the totality of facts, it is held that the assessee can be held to be in receipt of cash of Rs. 11,92,000/- from sale of land and Rs.2,00,000/- from agricultural income received during the year and brought forward from the earlier year. In total, the explanation of appellant to the extent that he was in possession of cash of Rs.11,92,000/- + Rs.2,00,000/-= Rs.13,92,000/- is accepted. The assessee has further claimed that the cash of Rs.40,000/-, Rs.5000/-, Rs.7000/- and Rs.11,00,000/- withdrawn from the bank accounts on 04.07.2005, 09.07.2005, 12.07.2005 and 15.07.2005 respectively was not utilized anywhere and was re- deposited on 18.07.2005. this contention of the assessee is not found to be acceptable. There is nothing to verify the purpose of 11
[ Imran Sherkhan Bhopal] the withdrawal of the specific sums and nothing to show that these were not utilized and remained available with the assessee to be re-deposited on 18.07.2005. The claim of the assessee is not tenable. In view of the above, out of the addition of Rs.29,96,000/-, the assessee gets a relief of Rs.13,92,000/-. The addition of Rs.16,04,000/- is confirmed.”
We find that Ld. CIT(A) did not accept opening cash balance on the ground that the assessee is not maintaining books of accounts, however, accepted the factum of sale of land earning of agricultural income and did not accept the contention that the amount so withdrawn was deposited in the bank account. We have considered the material available on record and perused the finding of the Ld. CIT(A) the undisputed fact is that the Ld. CIT(A) accepted the fact that assessee was having agricultural income and also sold a piece of agricultural land proceeds whereof was deposited in the bank account of the assessee. It is also not rebutted by the revenue that before making deposits of sum of Rs.10,65,000/- on 18.07.2005. The assessee had [ Imran Sherkhan Bhopal] withdrawn sum of Rs.40,000/-, Rs.5,000/-, Rs.7,000/- and Rs.11,00,000/- on 04.07.2005,09.07.2005, 12.07.2005 and 15.07.2005 from the same bank account.
Hence, the cash available with the assessee was higher than the cash deposited on 18.07.2005. The revenue has not placed on record demonstrating that these sums were utilized for any other purpose. Therefore, we are unable to affirm the finding of the Ld. CIT(A) for sustaining this addition as made on the basis that purpose of withdrawal of specific sums was not given. In our view revenue should have brought some material suggesting that the money as withdrawn from the bank account was used somewhere else and it was not available with the assessee for making deposits. In absence of such facts Ld. CIT(A) ought to have accepted the source of deposit of Rs.10,65,000/- on 18.07.2005. Hence, we direct the AO to delete this addition. In respect of the remaining addition it is noticed
[ Imran Sherkhan Bhopal] that the Ld. CIT(A) has not accepted the opening cash balance of Rs.5,27,432/-. Looking to the fact that the assessee was having agricultural income and other source of income even if the opening balance is considered to be higher at least the assessee would be having cash on hand a sum of Rs.3,00,000/- which appears to be reasonable.
Hence, the assessing officer is directed to delete the addition of Rs.3,00,000/- being available as cash in hand.
Regarding higher consideration received in cash we are of the considered view that onus was on the assessee to prove that the cash was received in addition to sum mentioned in sale deed. Further, the provisions of section 50C would not help as same operate in the different field. The contention of the assessee is therefore rejected. Hence, out of addition of Rs.16,04,000/- sustained by the Ld. CIT(A) we direct the AO to delete the addition of Rs. 13,65,000/-, and [ Imran Sherkhan Bhopal] remaining addition of Rs. 2,39,000/- is sustained. Ground numbers 3 to 6 are partly allowed.
In the result, appeal of the assessee is partly allowed.
Order was pronounced in the open court on 06 .09.2019.