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Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI
Before: HON’BLE SHRI MAHAVIR SINGH & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM
आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2016-17 arises out of the order of learned Commissioner of Income Tax, National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 13-04- 2021 in the matter of assessment framed by Ld. Assessing Officer [AO] u/s. 143(3) of the Act on 29-12-2018. The grounds taken by the assessee read as under:
1. 1. The order of the CIT(A) is bad and erroneous in law and against the principles of natural justice.
2. The C1T(A) erred in not considering the written submissions in proper perspective.
The C1T(A) erred in not considering the veracity of the contents of the sale agreement dt.16/04/2015 and further erred in giving finding that just because the stamp paper was dated six months earlier to the date of the agreement, genuineness and integrity became doubtful.
4. The CIT(A), despite accepting that the name and address of the party from advance was received, which is admitted here, erred in doubting the nature of the transaction by requiring the appellant to prove the source of the source or origin of the origin. 5. The CIT (A) erred in upholding the addition, though the appellant discharged the initial onus cast upon him, without verifying from the party from advance was received whose address, etc., were in the sale agreement dt. 16/04/2015. As evident, the assessee is aggrieved by the fact that the documents filed by the assessee have not been considered in the correct perspective by the lower authorities. 2. The Registry has noted delay of 04 days in the appeal, the condonation of which has been sought by Ld. AR. Considering the period of delay, we condone the delay and admit the appeal for adjudication on merits. 3. During assessment proceedings, it transpired that the assessee deposited cash of Rs.115.84 Lacs in Savings Bank Account held with Canara Bank, Vilankurichi Branch. The same was stated to be sourced out of advance money received from one Shri Admed Gafoor upon sale of land located in Moodhadri, Karnataka. The total cash deposited by the assessee in Canara Bank and ICICI Bank amounted to Rs.123.56 Lacs. Upon perusal of agreement dated 16.04.2015, it was noted by Ld. AO that the assessee agreed to sell the land for Rs.184 Lacs and received advance of Rs.20 Lacs. However, in the cash flow statement, the assessee reflected receipt of Rs.120 Lacs. It was also noted that the transfer had not been affected by the assessee. Though show cause notice was issued to the assessee to explain the same, however, in the absence of any reply forthcoming from the assessee, 3 - the amount of Rs.120 Lacs was added to the income of the assessee along with addition of unexplained money u/s 69A for Rs.3.99 Lacs.
The Ld. CIT(A) noted that the cash deposit was not commensurate with the cash as claimed to be received by the assessee. The assessee held substantial amount of cash in hand for a long time which is extracted in para 6.2.4 of the impugned order, It was also noted that the stamp paper was dated 01.09.2014 whereas the agreement was made on 16.04.2015. Therefore, the agreement was doubtful and the genuineness of the transaction remained unexplained. Further, if the sale was not affected, the assessee was bound to repay the advance money to the buyer within 6 months i.e., before 31.01.2017 after forfeiting 10% of total advances so received. But no such action was shown to have been taken by the assessee. The unregistered agreement would have no value in the eyes of law. The assessee relied on various case laws which were held to be distinguishable and not applicable to the case of the assessee. Finally, in para 8.9, it was held that the source of cash deposit could not be explained by the assessee. Therefore, the addition of Rs.120 Lacs was confirmed. Aggrieved, the assessee is in further appeal before us.
Upon careful consideration of factual matrix, it could be gathered that there was glaring discrepancies in the submissions made by the assessee. The sale agreement was entered into an old stamp paper. As per the agreement, the assessee received Rs.20 Lacs as advance money whereas actual receipts were shown for Rs.120 Lacs. Another fact is that the sale did not ultimately fructify and the assessee was obligated to refund the money after forfeiting 10% of the advance money. However, nothing of that sort has been shown to have been 4 - done by the assessee. As rightly held in the impugned order, the given factual matrix put the transaction under doubt. However, considering the fact that no enquiries whatsoever were made by Ld. AO with intended purchaser to verify the genuineness of the transaction, we deem it fit to grant another opportunity to the assessee to substantiate its case. Therefore, we set aside the impugned order and restore the issue of addition of Rs.120 Lacs to the file of Ld. AO for fresh adjudication with a direction to the assessee to substantiate its case. The complete onus to establish the course of cash deposit would be on assessee.
The appeal stand allowed for statistical purposes. Order pronounced on 03rd August, 2022.