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Facts
The assessee, an agriculturist, declared income including agricultural income and deposited cash in bank accounts, claiming sources like agricultural produce, prior withdrawals, and sale of agricultural land. The Assessing Officer added Rs. 29.20 Lacs to his income, representing an advance received from Shri Maninder Singh for the sale of agricultural land. The CIT(A) upheld this addition, noting that the sale deed was unregistered and the payer did not file tax returns.
Held
The Tribunal noted that the assessee is an agriculturist whose agricultural income was accepted by the AO. It found that the assessee had a valid agreement to sell land with Shri Maninder Singh, who confirmed the advance payment of Rs. 29.20 Lacs received in cash. The Tribunal held that the non-registration of the sale deed does not invalidate the claim, as the assessee had discharged the onus of proving the transaction, and therefore, the addition made by the AO was not sustainable.
Key Issues
Sustainability of addition of Rs. 29.20 Lacs received as advance for agricultural land sale, considering the non-registration of the sale deed and the payer's tax status.
Sections Cited
143(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “B” BENCH, CHANDIGARH
Before: HON’BLE SHRI RAJPAL YADAV & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM
O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2015-16 arises out of an order of learned Commissioner of Income Tax (Appeals)-5, Ludhiana [CIT(A)] dated 24-09-2019 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s. 143(3) of the Act on 06-12-2017. Having heard rival submissions, the appeal is disposed-off as under. The registry has noted delay of 55 days in the appeal which stand condoned.
It emerges that the assessee declared income of Rs.3.01 Lacs and agricultural income of Rs.2.72 Lacs. It transpired that the assessee deposited cash in its two bank accounts which were stated to be sourced out of earlier withdrawals, sale of agricultural produce and sale of agricultural land. Another advance of Rs.29.20 Lacs was stated to be received from Shri Maninder Singh as advance for sale of agricultural land. The same was confirmed by Shri Maninder Singh but still, Ld. AO added an amount of Rs.29.20 Lacs to the income of the assessee.
The Ld. CIT(A), after having considered assessee’s submissions, did not admit the appeal on delay. On merits also, it was observed that Shri Maninder Singh was having dairy income and agricultural income though he was not filing tax return. The payment was stated to be made out of agricultural income. However, the sale deed was not registered. On these facts, Ld. CIT(A) confirmed the assessment against which the assessee is in further appeal before us.
From the facts, it emerges that the assessee is an agriculturist and it earns agricultural income which has also been accepted by Ld. AO. The assessee is having sufficient landholding for which he has entered into agreement for sale with Sh. Maninder Singh and received advance of Rs.29.20 Lacs. The same has duly been confirmed by Sh. Maninder Singh. The advances have exchanged in cash as confirmed by the payer. The payer is also an agriculturist. In our considered opinion, the mere fact that the sale deed was not registered subsequently cannot vitiate the claim of the assessee since the assessee has duly discharged the onus of establishing the fact that the sum of Rs.29.20 Lacs was received as advance under an agreement to sell which is not in doubt. On these facts, we would hold that the impugned addition is not sustainable. We order so. 5. The appeal stand allowed. Order pronounced on 01-04-2025.