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Facts
The assessee, an agriculturist, had cash deposits of Rs. 45,15,000/- in their bank account. Proceedings under Section 147 were initiated, and the assessment was completed ex parte, treating the cash deposits as unexplained under Section 69A.
Held
The Tribunal held that the assessee failed to provide a satisfactory explanation for the nature and source of the remaining Rs. 15,00,000/-. The explanation based on an unregistered agreement to sell was contradicted by the timeline of the registered sale deed, rendering the grounds of appeal devoid of merit.
Key Issues
Whether the assessee has satisfactorily explained the nature and source of cash deposits of Rs. 15,00,000/- in light of the discrepancy between an unregistered agreement to sell and the registered sale deed.
Sections Cited
69A, 147, 144
AI-generated summary — verify with the full judgment below
Order PER LALIET KUMAR, J.M: This appeal filed by the assessee is directed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, dated 11.03.2025, for the Assessment Year 2011-12.
The Registry has noted that the appeal is filed against the order of the CIT(A) sustaining an addition of Rs. 15,00,000/- out of the total addition made under Section 69A of the Income Tax Act, 1961.
Briefly, the facts of the case are that the assessee is an agriculturist residing in Village Kilafarm Asmanpur, Pehowa. Based on information regarding cash deposits of Rs. 42,15,000/- (later reconciled to Rs. 45,15,000/-) in the assessee’s bank account during the financial year relevant to the assessment year under consideration, proceedings under Section 147 were initiated. The assessment was completed ex parte under Section 144 read with Section 147 of the Act, treating the cash deposits as unexplained money under Section 69A.
2 4. Before the Ld. CIT(A), the assessee submitted additional evidence under Rule 46A, claiming that the cash deposits originated from the sale of agricultural land (jointly held with family) and agricultural produce. The Ld. CIT(A) admitted the additional evidence and called for a remand report.
After considering the remand report, the Ld. CIT(A) granted partial relief. The CIT(A) accepted the source of cash deposits to the extent of Rs. 30,15,000/-, which included the assessee's share in the sale consideration of agricultural land (Rs. 22,00,000/-) and sales of agricultural produce. However, the CIT(A) sustained the addition of Rs. 15,00,000/-, rejecting the assessee’s explanation that this amount represented an advance received against an "agreement to sell" dated 18.10.2010, which was neither registered nor notarised.
Feeling aggrieved by the order of Ld. CIT(A) the assessee is in appeal before us on the grounds mentioned therein.
The Ld. Counsel for the assessee submitted that the assessee is purely an agriculturist looking after the affairs of a joint family. It was argued that the sustained addition of Rs. 15,00,000/- was part of the genuine sale proceeds/advances received from the purchasers, Narinder Kumar, Vijay Kumar, Gurmeet Singh, and Parnam Singh. The Ld. Counsel specifically argued that the cash was deposited in the assessee’s account because his father and brothers did not possess bank accounts, necessitating the assessee to act as the custodian of family funds.
On the other hand, the Ld. DR for the Revenue relied heavily on the orders of the lower authorities. He contended that the agreement to sell relied upon by the assessee was unregistered and self-serving. Furthermore, he pointed out discrepancies between the dates of cash deposits and the execution of the sale deeds.
We have heard the rival submissions and perused the material on record. The solitary issue for adjudication is the sustainability of the addition of Rs. 15,00,000/- confirmed by the CIT(A) under Section 69A of the Act. 9.1 The assessee claims that the source of the disputed cash deposits was the advance received for the sale of agricultural land. The Ld. CIT(A) rejected this explanation primarily because the "agreement to sell" dated 18.10.2010 was neither 3 registered nor notarised. We concur with the Ld. 's view. CIT(A) that in the absence of a registered document, the genuineness of such large cash advances remains unverified. 9.2 Crucially, upon examining the sale deed executed and the bank statements on record, a glaring discrepancy emerges which strikes at the root of the assessee's claim. We observe that the sale deed executed by the assessee and his co-owners records the receipt of payment at the time of execution of the deed before the Sub-