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Facts
The Assessing Officer made additions for unexplained cash deposits totaling Rs. 65,97,000/- under Section 68 of the Income Tax Act and Long Term Capital Gain of Rs. 2,80,83,993/- from the sale of agricultural land, treating it as a capital asset under Section 2(14). The assessee contended that cash deposits were from withdrawals and the agricultural lands were not capital assets, being beyond 8 kms from municipal limits. The CIT(A) confirmed these additions.
Held
The Tribunal observed that the CIT(A)'s order was cryptic, failing to consider the assessee's submissions (cash flow statement, Patwari certificate) and not confronting the assessee with an Inspector's report regarding land distance. Therefore, the Tribunal remanded the matter to the Assessing Officer for de novo adjudication, directing a fresh examination of issues, provision of adequate opportunity, and confrontation of the Inspector's report to the assessee.
Key Issues
Whether cash deposits in bank accounts constitute unexplained income; whether agricultural lands sold qualify as capital assets subject to Long Term Capital Gain tax based on their proximity to municipal limits; and whether the assessee was afforded proper opportunity and due consideration of evidence by the lower authorities.
Sections Cited
68, 2(14)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “C” NEW DELHI
Before: SHRI SHAMIM YAHYA & SHRI CHALLA NAGENDRA PRASAD
सुनवाईक�तारीख/ Date of hearing: 21.03.2025 21.03.2025 उ�ोषणाक�तारीख/Pronouncement on आदेश /O R D E R PER C.N. PRASAD, J.M.
This appeal is filed by the assessee against the order of the Ld. CIT(Appeals)-1, New Delhi dated 29/01/2015 for the AY 2011- 12. Assessee has raised the following effective grounds: - “2. That on the facts, circumstances of the case and in law, the Worthy CIT(A) has erred in confirming the action of Ld. AO wherein he had made addition of Rs.65,97,000/- by erroneously holding that the cash deposits (on various dates) in the saving bank accounts of the appellant maintained with ICICI Bank/ The bank of Rajasthan Ltd. (Rs.38,37,000/- and Rs.27,60,000/- respectively) are from unexplained sources and is deemed income of the appellant u/s 68 of the Act.
3. That on the facts, circumstances of the case and in law, the Worthy CIT(A) has erred in confirming the action of Ld. AO wherein he had made addition of Rs.2,80,83,993/- under the head long term capital gain in respect of four agricultural lands sold by the appellant by erroneously holding them to be capital asset as per the definition of sec. 2914) of the Act. The Worthy CIT(A) has also erred in confirming the action of Ld. AO wherein he wrongly estimated the various figures while computing the long term capital gains. The Gain computed by Ld. AO property-wise which is being agitated under this ground is as under: - a. Measuring 11 Kanal 19 Marlas 87,21,612/- b. Measuring 10 Kanal 2 Marlas 79,00,294/-
c. Measuring 8 Kanal 14 Marlas 21,87,462/- d. Measuring 34 Kanal 10 Marlas 92,74,625/-
Total 2,80,83,993/-
That on the facts, circumstances of the case and in law, the Worthy CIT(A) has erred in passing the impugned order in haste and without affording reasonable opportunity to the appellant and hence the impugned order deserves to be set aside.”
Ld. Counsel for the assessee referring to ground no.4 submits that the Ld. CIT(A) passed ex parte order without providing reasonable opportunity to the assessee.
In so far as the ground no.2 of grounds of appeal is concerned the Ld. Counsel submits that the assessee made deposits of cash into bank account are all from out of withdrawals made from the bank itself. Ld. Counsel submits that as a matter of fact the assessee also filed cash flow statement which the authorities below ignored to consider it.
4. In so far as the ground no.3 is concerned the Ld. Counsel for the assessee submits that the Assessing Officer concluded that the lands sold by the assessee were all within 8 kms from the municipal corporation limits of Gurgaon i.e. Badshahpur Village. Ld. Counsel submits that this information was gathered by the Assessing Officer from google. Ld. Counsel further submits that the Assessing Officer stated in the assessment order that Inspector was also deputed to ascertain the distance between Badshahpur and Shakarpur Village and this report was never confronted to the assessee. Ld. Counsel submits that the contentions of the assessee that the lands sold are all beyond 8 kms from the municipal corporation limits were not accepted by the Assessing Officer. It is submitted that the certificate filed by the assessee from the Village Officer (Patwari) was also not considered. Ld. CIT(Appeals) simply sustain the order of the Assessing Officer ignoring the evidences placed before him who passed an ex parte order without providing adequate opportunity to the assessee.
5. Heard rival contentions, perused the orders of the authorities below. Ld. CIT(Appeals) passed a very cryptic order sustaining the additions made by the Assessing Officer. The Ld. Counsel submits that as a matter of fact the cash flow statement was filed before the authorities below but on a reading of the orders of the authorities below, we find no reference to any cash flow statement filed by the assessee. The Ld. CIT(Appeals) has not given any finding except stating that the assessee did not submit any arguments or submissions or documentary evidences rebutting the findings of the Assessing Officer.
Taking the totality of facts and circumstances into consideration, we are of the considered view that this matter should go back to the file of the Assessing Officer for denovo adjudication. Thus, the disputes in appeal are restored to the file of the Assessing Officer with a direction to re-examine the issues afresh in the light of the submissions made by the assessee, after providing adequate opportunity of being heard to the assessee.
Needless to say the report obtained from the Inspector shall be confronted to the assessee giving an opportunity to rebut before passing the order. With these observations, this appeal is disposed of.
In the result, appeal of the assessee is allowed for statistical purpose.
Order pronounced in the open court on 21.03.2025