KANTA DEVI,JAIPUR vs. ITO, BHIWADI

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR Jh Hkkxpan] ys[kk lnL; ,oa Jh dqy Hkkjr] U;kf;d lnL; ds le{k BEFORE: SHRI BHAGCHAND, AM & SHRI KUL BHARAT, JM

vk;dj vihy la-@ITA No. 417/JP/2017 fu/kZkj.k o"kZ@Assessment Year : 2011-12 cuke Kanta Devi, Income Tax Officer, Vs. Village- Thada, Post- Sheethal, Ward- Bhiwadi Tehsil, Tijara, district- Alwar. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: BDWPD 9059 G vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri P.C. Parwal (CA) jktLo dh vksj ls@ Revenue by : Shri R.A. Verma (Addl.CIT) lquokbZ dh rkjh[k@ Date of Hearing : 11/10/2017 mn?kks"k.kk dh rkjh[k@ Date of Pronouncement : 13/10/2017 vkns'k@ ORDER

PER: BHAGCHAND, A.M.

This is an appeal filed by the assessee emanates from the order of

the ld. CIT(A), Alwar dated 09/03/2017 for the A.Y. 2011-12, wherein

the assessee has sole effective ground, which is as under: “1. The ld. CIT(A) has erred on facts and in law in confirming the action of A.O. in holding that assessee has made investment of Rs. 61,68,910/- on purchase of land at village- Thada, Tehsil, Tijara, out of the undisclosed sources ignoring that the assessee received the said land as gift from her father in law Sh. Deepchand but instead of gift deed, sale deed was executed and further that assessee has not source of income.”

ITA 417/JP/2017_ 2 Kanta Devi Vs ITO

information that the assessee has purchased an immovable property for

a sale consideration of Rs. 58,80,000/- on 25/02/2011 and also paid

registration charges of Rs. 2,88,910/-. The assessee was asked to give

explanation on this issue. The assessee submitted that there is no

sale/purchase of property during the year. However, copy of transfer of

the property as a gift was filed alongwith affidavit. The Assessing Officer

observed that a Vasiyatnama (Will) dated 25/10/2004 was in favour of

Shri Rambir Singh, who is son of brother of the executant of the Will

Shri Deep Chand. It was observed that this Will was executed in respect

of the property located at Nandrampurbas, Tehsil- Rewari and it was not

related to the property, which was registered in the name of assessee.

The Assessing Officer held that the property was purchased by Smt.

Kanta Devi, W/o- Shri Rambir Singh. The Assessing Officer did not

accept the assessee’s explanation that this was a gift of immovable

property to the assessee by brother of father in law. It was also

submitted that there was no sale consideration paid for this property. It

was a gift and due to mistake it was registered as sale deed.

Officer by holding as under:

ITA 417/JP/2017_ 3 Kanta Devi Vs ITO

“5.5.2 I have considered the above mentioned facts and the contents of remand report and the cross reply. It is an obvious fact that the land in question was transferred to the appellant. It is also an undeniable fact that the transfer of the land is effected through a registered deed where the apparent consideration is mentioned and the stamp duty was also paid by the appellant. Therefore, on the basis of available facts and evidences, there is scope of only one conclusion that the land in question has been transferred to the appellant on a consideration of Rs. 58,80,000/- and stamp duty of Rs. 2,88,910/- was also incurred by the appellant. A subsequent affidavit on behalf of the seller Sh. Deepchand filed during the appellate proceedings is also of no consequence as the same was not filed during assessment proceedings and now when Sh. Deepchand is no more alive, no cross verification of the claim is possible. Therefore, in my considered view, the A.O is justified in treating the amount of Rs. 61,68,910/- as undisclosed investment in the hand of the appellant and the same is sustained. Accordingly, the appellant’s ground of appeal on this issue is dismissed.”

behalf of the assessee, the ld AR has submitted that the assessee is an

uneducated lady, residing at village Thada, Tehsil, Tijara, Alwar. She

was not having any source of income. Her husband Shri Rambir Singh is

working in Central Reserve Police Force (CRPF) as Head Constable. The

brother of the assessee’s father in law Shri Deep Chand was unmarried

and not having any child. He has given all his movable and immovable

ITA 417/JP/2017_ 4 Kanta Devi Vs ITO

property located anywhere in India to Shri Rambir Singh, son of his

brothr Sheoram and to his wife. Shri Rambir Singh and Kanta Devi were

taking care of Shri Deep Chand as he was an aged person. Shri Deep

Chand was decided to transfer his legal title of agricultural land owned

by him in favour of Shri Rambir Singh and his wife Smt. Kanta Devi. At

the time of registration, due to mistake, instead of gift deed, sale deed

was mentioned and due to ignorance the deed writer mentioned the

sale consideration calculated as per DLC rates. There was completely a

mistake in executing the document for gift to transfer agricultural land in

favour of the assessee. The ld AR also submitted a written reply, the

contents of which is reproduced below:

ITA 417/JP/2017_ 5 Kanta Devi Vs ITO

Therefore, in the will, he apart from specifically mentioning about his immovable property at Village Nandrampurbas has also stated that all his movable and immovable properties and deposit in bank/post office anywhere in India after his death would devolve on Sh. Rambir. Therefore, the objection of the AO that land at Village Thada has no role to play in the will is incorrect appreciation of facts.

(c) In course of assessment proceedings, to prove that instead of the gift deed, sale deed was wrongly executed, an affidavit of Sh. Deepchand dt. 03.09.2014 (PB 17) was prepared which is duly notrarised by the Notary and entered in his register. However, Sh. Deepchand in the meantime expired on 21.09.2014 (PB 5). Thereafter, this affidavit was filed to the AO vide letter dt. 07.10.2014 (PB 1). After filing the affidavit, no further query was raised by the AO and the assessment was completed on 16.03.2015. Therefore, the observation of Ld. CIT(A) that the affidavit of Sh. Deepchand was not filed during assessment proceedings is incorrect.

(d) In support of the fact that no consideration passed on the execution of sale deed, the affidavit of the two witnesses to the sale deed namely Sh. Hemant and Sh. Deshraj is enclosed. In the affidavit they have also confirmed that no consideration was passed on execution of sale deed as instead of gift deed, sale deed was wrongly executed.

(e) It is also submitted that this matter was also investigated by the Investigation Wing of the department somewhere in the month of August, 2014. The investigating officer at that time recorded the statement of the assessee and her husband Sh. Rambir. Sh.

ITA 417/JP/2017_ 6 Kanta Devi Vs ITO

Deepchand was also produced at that time but his statement was not recorded. In these statements also, the facts stated above were stated. This fact can also be verified by calling the records from the office of the Investigation Wing. In these statement, Sh. Rambir explained that the expenditure of Rs.2,88,910/- was paid by him out of his savings from salary and agricultural income.

From the above facts it is reasonably inferable that assessee has not purchased this property rather she has received the same in gift and thus, no investment was made by her.

ITA 417/JP/2017_ 7 Kanta Devi Vs ITO

husband. The said explanation offered by the assessee was rejected and addition was made u/s 69. The Tribunal, however, held that even though the explanation about the nature and sources of the purchase money was not satisfactory but in the facts and circumstances of the case it was not possible for the assessee to earn the amount invested in the properties and that by no stretch of imagination could the assessee be credited with having earned this income in the course of the assessment year or was even in a position to earn it for a decade or more. The Tribunal took the view that although the explanation of the assessee was liable to be rejected, s. 69 of the Act conferred only a discretion on the ITO to deal with the investment as income of the assessee and that it did not make it mandatory on his part to deal with the investment as income of the assessee as soon as the latter’s explanation happened to be rejected. According to the High Court, the Tribunal had not committed any error in taking into account the complete absence of resources of the assessee and also the fact that having regard to her age and the circumstances in which she was placed she could not be credited with having made any income of her own and in these circumstances the Tribunal was right in refusing to make an addition of the value of the investments to the income of the assessee. Ld. counsel appearing for the Revenue, has urged that the Tribunal as well as the High Court were in error in their interpretation of s. 69 of the Act. It was held by Hon’ble Supreme Court as under:-

“We are unable to agree. As pointed out by the Tribunal, in the corresponding clause in the Bill which was introduced in Parliament, the word "shall" had been used but during the course of consideration of the Bill and on the recommendation of the Select Committee, the said word was substituted by the word "may". This clearly indicates that the intention of Parliament in enacting s. 69 was to confer a discretion on the ITO in the matter of treating the source of investment which has not been satisfactorily explained by the assessee as the

ITA 417/JP/2017_ 8 Kanta Devi Vs ITO

income of the assessee and the ITO is not obliged to treat such source of investment as income in every case where the explanation offered by the assessee is found to be not satisfactory. The question whether the source of the investment should be treated as income or not under s. 69 has to be considered in the light of the facts of each case. In other words, a discretion has been conferred on the ITO under s. 69 of the Act to treat the source of investment as the income of the assessee if the explanation offered by the assessee is not found satisfactory and the said discretion has to be exercised keeping in view the facts and circumstances of the particular case. In the instant case, the Tribunal has held that the discretion had not been properly exercised by the ITO and the AAC in taking into account the circumstances in which the assessee was placed and the Tribunal has found that the sources of investments could not be treated as income of the assessee. The High Court has agreed with the said view of the Tribunal. We also do not find any error in the said finding recorded by the Tribunal. There is thus no merit in these appeals and the same are accordingly dismissed. ”

In view of above, considering the overall facts and circumstances of the case, it cannot be presumed that assessee has made any investment in the purchase of land and therefore, the addition confirmed by Ld. CIT(A) be directed to be deleted.

authorities below.

are undisputed:

The assessee was an uneducated lady, residing at village Thada,

Tehsil, Tijara, Alwar.

Assessee’s husband Shri Rambir Singh was working in Central

Reserve Police Force (CRPF) as Head Constable.

ITA 417/JP/2017_ 9 Kanta Devi Vs ITO

Shri Deep Chand was brother of assessee’s father in law. Deep Chand

was unmarried and having no child. Shri Deep Chand has made a

registered Will where entire movable and immovable properties located

in India were to be given to Shri Rambir Singh. Shri Rambir Singh is

husband of the assessee. Shri Rambir Singh and Smt. Kanta Devi were

taking care of Shri Deep Chand since long, who was an old person. Shri

Deep Chand, son of Shri Tejram, who is shown as seller of the property

to the assessee, has filed an affidavit stating that he is an old man and

uneducated person. He was unmarred. He was not having any

successor. Rambir Singh and his wife Kanta Devi (assessee) were taking

care of him. He had gifted all his property in the name of Rambir Singh

and Kanta Devi (assessee). It is pertinent to note that Shri Deep Chand

has categorically clearly stated that the land was given as a gift to the

assessee. As per the registered Will, all properties i.e. movable and

immovable located in India are to devolve in favour of Shri Rambir Singh

husband of the assessee. The ld. CIT(A) has not asked report of A.O. on

the veracity of content of the affidavit submitted by Shri Deep Chand.

No inquiries were made with regard to sale deed executed instead of

gift deed in favour of the assessee whether it was due to bonafide

mistake whether the sale consideration mentioned therein was genuine

mentioned. In view of these facts, we are of the view that to decide the

ITA 417/JP/2017_ 10 Kanta Devi Vs ITO issue in right perspective, further inquiries with regard to the claim of

assessee that property was received as gift and no consideration was

paid are required. Hence, the matter is restored back to the file of

Assessing Officer to be decided afresh in the light of above observations.

purposes only.

Order pronounced in the open court on 13/10/2017.

Sd/- Sd/- ¼dqy Hkkjr½ ¼Hkkxpan½ (Kul Bharat) (BHAGCHAND) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 13th October, 2017 *Ranjan आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू vihykFkhZ@The Appellant- Smt. Kanta Devi, Alwar. 1. izR;FkhZ@ The Respondent- The ITO, Ward- Bhiwadi. 2. vk;dj vk;qDr@ CIT 3. vk;dj vk;qDr¼vihy½@The CIT(A) 4. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. xkMZ QkbZy@ Guard File (ITA No. 417/JP/2017) 6.

vkns'kkuqlkj@ By order, सहायक पंजीकार@Aेेज. त्महपेजतंत