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Facts
The assessee, a retired primary teacher, did not file his return of income. The Revenue found cash deposits of Rs. 20,73,000/- in his bank account and initiated proceedings u/s 147 of the Income Tax Act, treating the deposits as income from undisclosed sources. The assessee claimed the deposits were from the sale of agricultural lands owned by him and his family members.
Held
The Tribunal accepted the assessee's contention that the cash deposits of Rs. 18,87,000/- were advances received against the sale of four agricultural lands, supported by affidavits from his younger brother and nephew. The remaining amount of Rs. 1,86,000/- was also accepted as being from past savings.
Key Issues
Whether cash deposits in the bank account, claimed to be from the sale of agricultural lands, can be added as income from undisclosed sources when the assessee provides supporting evidence and affidavits.
Sections Cited
147, 148, 142(1), 144, 133(6), 69A, 2(14)
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Income Tax Appellate Tribunal, PUNE BENCH “SMC”, PUNE
Before: SHRI MANISH BORAD & SHRI VINAY BHAMORE
Assessment Year : 2012-13 Syam Keshav Kulkarni, Vs. ITO, Ward-1(1), Plot No.C/2 8, Lane 10, Aurangabad. Near Mahadev Mandir, Pundlik Nagar, Chh. Sambhajinagar, Old Aurangabad- 431005. PAN : ACOPK7704P Appellant Respondent Assessee by : Shri Ramesh Thete (Virtual) Revenue by : Shri Aviyogi Ambadkar Date of hearing : 12.03.2025 Date of pronouncement : 28.05.2025 आदेश / ORDER
PER VINAY BHAMORE, JM:
This appeal filed by the assessee is directed against the order dated 20.02.2024 passed by Ld. CIT(A)/NFAC for the assessment year 2012-13.
The assessee has raised the following grounds of appeal :-
1. Considering the facts of the case and the law, the Ld. Commissioner of Income Tax (Appeals) does not justify the Rs 12,57,000/-. The cash deposits in the present case are clearly from the sale of agricultural lands which were owned by the assesee and the family members of the assesee. The Ld. CIT (A) has also not taken into account that the assessee is a retired primary teacher, and the deposits are easily traceable to the sale of the agricultural lands, sold by assessee and his the family members.
2. The assessee craves to add, delete, alter, modify, withdraw any of the grounds before or at the time of hearing of the appeal.”
Facts of the case, in brief, are that the assessee is an individual and retired primary teacher has not furnished its return of income for the period under consideration. On the basis of information available with the Department that the assessee has deposited cash of Rs.20,73,000/- in his savings bank account but return of income has not been filed by him, the proceedings u/s 147 of the IT Act were initiated and notice u/s 148 and 142(1) of the IT Act were issued and served upon the assessee. Since the assessee remained absent and did not complied any of the notices issued by the Assessing Officer a final show cause notice was issued u/s 144 of the IT Act, however the assessee did not comply with this notice also. The Assessing Officer issued notice u/s 133(6) of the IT Act to the State Bank of India and collected copy of statements of all the bank accounts held by the assessee for the period under consideration. Since the assessee has not furnished any information with regard to the cash deposit of Rs.20,73,000/- in his bank accounts the Assessing Officer completed the assessment u/s 147 r.w.s. 144 of the IT Act by determining taxable income of Rs.20,73,780/- as against no return furnished by the assessee. The above assessed income includes cash deposit of Rs.20,73,000/- as income from undisclosed sources u/s 69A of the IT Act and Rs.777/- income from bank interest under the head “income from other sources”.
After considering the reply of the assessee and in the light of additional evidences furnished in the shape of registered sale deeds Ld. CIT(A)/NFAC deleted the addition of Rs.8,20,000/- and confirmed the addition of Rs.12,57,000/- by observing as under :- “8. Ground no.1 is relating to the fact that the cash deposited by the appellant is out of sale of agricultural lands and past savings/agricultural income and hence, no tax is payable on the said sale proceeds as agricultural land is not a capital asset u/s 2(14) of the Act. During the appellate proceedings, the AR of the appellant has produced 04 sale deeds out of which 03 are dated 16.05.2012 and 01 is dated 17.08.2012. The total sale consideration as per these four sale deeds is Rs. 18,85,000- and it is submitted that the sale proceeds were received in cash. The appellant has produced all the four sale deeds for verification. 8.1 On perusal of sale deeds of agricultural land produced, it is seen that there are only two sale deeds in which the seller is the appellant and the sale consideration is Rs.3,20,000/- & Rs.4,00,000/- respectively. In case of other two sale deeds, in one case the seller is Mr. Ram Keshav Kulkarni (appellant's brother) having sale consideration of Rs.8,40,000/- and in the last sale deed the name of the seller is Mr. Balwant Narhar Kulkarni having sale consideration of Rs.3,25,000/-. Now, the appellant should have only deposited sale proceeds of land belonging to him to the tune of Rs.7,20,000/-(Rs. 3,20,000/- Rs 4,00,000/-). The other two lands are sold by appellant's brother and some relative, whose sale proceeds cannot be deposited in appellant's account and if at all deposited, it cannot continue in his account and should have been transferred to the respective persons. However, that is not the case. The amount deposited of Rs.20,00,000/- has remained in FDR in the appellant's name as evident from the copy of the bank pass book furnished. The appellant has not furnished any affidavits from his relatives that their sale proceeds received in cash were deposited in appellant's bank account and were subsequently transferred to them etc. 8.2 In remand proceedings, the AO has pointed out that the sale deeds were executed in May & August, 2012 but cash deposit was made on 27.02.2012 and hence, there was a gap of 3-5 months between cash deposit and execution of sale deeds. The two sale deeds executed by the appellant were on 16.05.2012 for which there is possibility of appellant must have received the sale proceeds in February, 2012 as the sale deed states that the appellant (seller) has already received the sale consideration in cash. 8.3 Thus, for sale of agricultural land, what appellant can get relief is only to the tune of Rs.7,20,000/-. Further, relief towards agricultural income/savings can be given to the extent of Rs.1,00,000/- even though the appellant had not given any proof of agricultural income received or returned in any of the earlier years. Thus, maximum the appellant can get relief of is Rs.8.20,000/-. The addition made by the AO towards balance amount of Rs. 12,57,000/- (Rs.20,77,000/- (-) Rs.8.20,000/-) being cash deposited by the appellant is sustained as unexplained money uls.69A of the Act. Ground no. 1 partly allowed.
Ground no. 2 is general in nature and hence, not adjudicated.
In the result, the appeal is treated as partly allowed for statistical purpose.”
It is the above order against which the assessee is in appeal before this Tribunal.
6. Ld. AR virtually appearing from the side of the assessee submitted before the bench that the assessee is a retired primary teacher and never had taxable income. He being the head of the Hindu Undivided family was looking after the agricultural lands belonging to all the family members including those held by him in his own name. Ld. AR further submitted that in two registered sale deeds the assessee himself was the seller and therefore Ld. CIT(A)/NFAC has accepted that Rs.7,20,000/- was received against sale of agricultural land and accordingly deleted the addition. But with regard to other two registered sale deeds wherein the sellers were his younger brother namely, Shri Ram Keshav Kulkarni for Rs.8,40,000/- and nephew namely, Shri Balwant Narhar Kulkarni for Rs.3,25,000/- was not accepted by Ld. CIT(A)/NFAC since the assessee was not the seller and no further evidence was produced by the assessee that the sale proceeds of above two persons was received by him, accordingly Ld. CIT(A)/NFAC confirmed the addition of Rs.11,72,500/-. In this regard, it was submitted by Ld. AR that the assessee was the head of Hindu Undivided Family (HIUF) and was managing the agricultural land held by the family members. It was further submitted that the advance amount was received by the assessee on behalf of his younger brother and nephew & the same was deposited in his bank account by the assessee and both these persons have accepted the above fact by giving statement on oath and in support of this contention affidavit duly sworn in by these two persons are furnished here with, wherein they have accepted that the advance was received by the assessee and subsequently in the next year the same was handed over to them which was utilised in purchase of a new house by one of them. Copies of the affidavits are produced before the bench. Accordingly, Ld. AR prayed before the bench to delete the addition of Rs.12,57,000/- sustained by Ld. CIT(A)/NFAC.
Ld. DR appearing from the side of the Revenue relied on the orders passed by the subordinate authorities and requested to confirm the same. Alternatively, it was requested to remand the matter back to Ld. CIT(A)/NFAC for verification of two affidavits since they are additional evidences.
We have heard Ld. Counsels from both the sides and perused the material available on record including the affidavits and written submission furnished by the assessee. In this regard, we find that before Ld. CIT(A)/NFAC it was claimed that the assessee has received advances against the sale of four agricultural lands which were sold in immediate succeeding year, out of which two were owned by him and rest of the two were owned by his younger brother and nephew. Ld. CIT(A)/NFAC has accepted the fact that in all four different agricultural lands were sold through four registered sale deeds and since two of them were owned by the assessee, he deleted the addition of Rs.7,20,000/- and also accepted the savings of Rs.1 lakh out of agricultural income of earlier years, & accordingly allowed the benefit of Rs.8,20,000/- and confirmed the addition of Rs.12,57,000/- in the hands of the assessee. Now before us Ld. AR of the assessee has produced affidavit of younger brother and nephew of the assessee respectively wherein they have accepted the fact that the advance amount was received by the assessee on their behalf. Under these circumstances we do not see any reason to disbelieve the statement since the amount was also returned to them in subsequent year. Regarding the objection of Ld. DR we find that the fact of sale of four agricultural lands was Ld. CIT(A)/NFAC and since the acceptance/affidavit of younger brother and nephew was not made available before him, the addition was sustained. Accordingly, we do not accept the contention of Ld. DR that these affidavits constitutes additional evidences since the claim was already made before Ld. CIT(A)/NFAC, however it was not accepted by Ld. CIT(A)/NFAC in the absence of any further proof and therefore the assessee has to approach before this Tribunal. Considering the totality of the facts of the case and in the interest of justice and looking to the status of the assessee that he is a senior citizen and retired primary teacher, & also in the light of material available on record, we deem it appropriate to accept the contention made by the assessee that the amount to the extent of Rs.18,87,000/- which was deposited in his bank account pertains to the advance received against four registered sale deeds. Apart from above rest of the amount of Rs.1,86,000/- was claimed to be deposited out of past savings, we also deem it appropriate to accept the contention of the assessee in this regard and accordingly set-aside the order passed by Ld. CIT(A)/NFAC and direct the Assessing Officer to delete the