JAGDISH PRASAD MEENA,JAIPUR vs. ITO, JAIPUR

PER VIJAY PAL RAO, JM :

This appeal by the assessee is directed against the order dated 30th April,

2015 of ld. CIT (A)-2, Jaipur for the assessment year 2006-07. The assessee has

raised the following grounds :-

“ 1. In the facts and circumstances of the case and in law the ld. CIT (A) has erred in confirming the action of the ld. AO in adding a sum of Rs. 7,056/- under section 68 in respect of Sundry Creditors. The action of ld. CIT (A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by deleting the said addition of Rs. 7,056/-.

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illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by deleting the said addition of Rs. 10,00,000/-.

Ground No. 1 is regarding disallowance made by the AO was

sustained by ld. CIT (A) to the extent of Rs. 7,056/- under section 68 of

the IT Act.

has shown sundry creditors of Rs. 2,01,000/- in the Balance Sheet. The AO asked the assessee to furnish the details of the sundry creditors vide letter dated 20th

October, 2008. However, the assessee did not furnish the details so required by the

AO. Accordingly, the AO made an addition of Rs. 2,01,000/- on account of

unexplained creditors. On appeal, the ld. CIT (A) restricted the addition made by the

AO to Rs. 7,056/-.

material on record. The AO made an addition of Rs. 2,01,000/- under section 68 of

the Act for want of necessary details and explanation to be filed by the assessee. On

appeal before the ld. CIT (A), the assessee explained that out of Rs. 2,01,000/-, a

sum of Rs. 1,93,944/- pertained to Citocorp Maruti Finance Ltd. for which a

confirmation was also submitted. Accordingly, the ld. CIT (A) has deleted the

addition made by the AO to the extent of Rs. 1,93,944/-. As regards the balance

amount of sundry creditors of Rs. 7,056/-, since the assessee did not furnish any

details or explanation, the said addition was sustained by the ld. CIT (A). Even

3 ITA No. 630/JP/2015 Shri Jagdish Prasad Meena, Jaipur.

before us the assessee has not furnished any details or explanation regarding the

said amount of Rs. 7,056/-. Accordingly, we do not find any reason to interfere with

the order of ld. CIT (A) qua this issue.

Ground No. 2 is regarding an addition of Rs. 10,00,000/- made by

the AO was confirmed by ld. CIT (A) on account of cash deposit in the

bank account.

totaling to Rs. 10,00,000/-. The AO asked the assessee to explain the source of

cash deposit in the bank account. However, the assessee failed to furnish any

explanation regarding the source of deposit of Rs. 10,00,000/- made in the bank

account. Accordingly, the AO made an addition of Rs. 10,00,000/- to the total

income of the assessee. On appeal before the ld. CIT (A), the assessee submitted

that he has received cash of Rs. 10,00,000/- from one Shrinarayan as advance

against sale of agricultural land. Accordingly, the assessee claimed that the source of

cash is the advance received by the assessee against the sale of agricultural land.

The assessee also produced the Sale Agreement. The ld. CIT (A) considering the

nature of additional evidence produced by the assessee called for remand report.

During the remand proceedings, the assessee also produced the purchaser. The AO

recorded the statement of Shrinarayan who admitted to have given cash of Rs.

10,00,000/- to the assessee. However, the AO did not accept the stand of the

assessee as well as of the purchaser in view of the fact that the agricultural land

belonging to the assessee who is a Scheduled Tribe is not permitted to be

transferred to a non-Scheduled Tribe person. Further, since the alleged agreement

4 ITA No. 630/JP/2015 Shri Jagdish Prasad Meena, Jaipur.

was not a registered agreement and also against the prevailing law, therefore, the

AO strongly objected to the claim of the assessee. Considering these facts, the ld.

CIT (A) has confirmed the addition of Rs. 10,00,000/- made by the AO.

discharged his onus of explaining the source of deposit. Even the assessee has also

produced an agreement between Shrinarayan and two other persons to whom he

agreed to sell his land against the consideration of Rs. 11,00,000/-. Therefore, the

assessee not only explained the source of the cash deposit but also explained the

source of source. The ld. A/R has further contended that the assessee produced the

purchaser before the AO in the remand proceedings who has confirmed the said

payment of Rs. 10,00,000/- as advance for purchase of land of the assessee.

Therefore, the assessee has discharged his onus of explaining the source of deposit

made in the bank account. He has relied upon the decision of Hon’ble Gujarat High

Court in the case of CIT vs. Kamlaben Sureshchandra Bhatti, 44 tamann.com 459

(Guj.) as well as the decision of Hon’ble Jurisdictional High Court in the case of

Kanhaialal Jangid, 217 CTR 354 (Raj.).

5.1. On the other hand, the ld. D/R has submitted that when the assessee has

accepted the fact that the agricultural land cannot be sold to the alleged purchaser,

therefore, the agreement produced by the assessee is an afterthought manipulation

of evidence. He has further contended that even the purchaser has admitted in his

statement that the land in question was not permitted to be sold by the assessee.

Even otherwise, the alleged transaction of sale could not materialize till date and,

therefore, the assessee has produced only a self-serving document which is not a

registered document. Further, the said agreement is against the provisions of law as

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the agricultural land belonging to scheduled tribe cannot be transferred to a non-

scheduled tribe person. He has relied upon the orders of the authorities below.

record. The AO asked the assessee to explain the source of Rs. 10,00,000/- deposited in cash in the bank account of the assessee on 5th & 6th September, 2005.

Despite the sufficient opportunity given by the AO to the assessee, the assessee did

not furnish any documentary evidence to explain the source of the deposit of cash of

Rs. 10,00,000/-. The assessment order was completed on 16.12.2008 whereas the

alleged agreement produced by the assessee before the ld. CIT (A) is purported to

have been executed on 25.08.2005. Thus it is clear that the explanation of the

assessee before the ld. CIT (A) is only based on the alleged agreement dated

25.08.2005 which is an unregistered agreement regarding sale of agricultural land.

The assessee has not explained any reason as to why the said agreement was not

produced before the AO during the assessment proceedings. Further, the assessee

has also not deposed the fact that the agricultural land belonging to the assessee

being scheduled tribe cannot be transferred to the alleged purchaser. Therefore,

the parties to the agreement were very well aware about the fact that this

agricultural land belonging to the assessee cannot be transferred in favour of the

purchaser. It is not the case of the assessee that the assessee or the purchaser had

either applied for conversion of the land for non-agricultural use or has taken any

steps for conversion of the agricultural land to non-agricultural use so that the said

land could have been transferred after conversion. Therefore, the mere filing of

agreement which is contrary to the provisions of law cannot be accepted as an

explanation for the source of Rs. 10,00,000/- cash deposit in the bank account of

6 ITA No. 630/JP/2015 Shri Jagdish Prasad Meena, Jaipur.

the assessee. It appears that the assessee has manipulated and manufactured the

alleged evidence being agreement to sale subsequent to the addition made by the

AO. Therefore, in the facts and circumstances of the case when the agricultural land

in question is not permitted to be transferred to the alleged purchaser and the

assessee has not explained the reason and circumstances which has prevented the

assessee to explain the source during the assessment proceedings, the explanation

of the assessee before the ld. CIT (A) does not inspire confidence. Accordingly, we

do not find any error or illegality in the impugned order of ld. CIT (A).

Order is pronounced in the open court on 15/05/2018.

Sd/- Sd/- (foØe flag ;kno) (fot; iky jkWo ½ (VIKRAM SINGH YADAV ) (VIJAY PAL RAO) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member

Jaipur Dated:- 15/05/2018. Das/

आदेश की प्रतिलिपि अग्रेषित@ब्वचल वf जीम वतकमत वितूंतकमक जवरू

सहायक पंजीकार@ Aेेपेजंदज. त्महपेजतंत

7 ITA No. 630/JP/2015 Shri Jagdish Prasad Meena, Jaipur.