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Facts
The assessee failed to file a return of income for AY 2012-13. Subsequently, a notice under section 148 was issued, but the assessee did not respond. The AO made an addition of Rs. 42,20,000/-. The CIT(A) granted partial relief, reducing the addition.
Held
The Tribunal held that the Rs. 20,00,000/- claimed by the assessee related to AY 2011-12 and was from a different source. However, the Rs. 5,00,000/- received from Sh. Azaib Singh was explained, and the addition to that extent was deleted. The Rs. 10,00,000/- from Sh. Jagpal Singh was not substantiated and the addition was confirmed.
Key Issues
Whether the Rs. 20,00,000/- and Rs. 15,00,000/- claimed as advance for land sale were properly explained and whether cash deposits were out of explained sources.
Sections Cited
147, 148, 142(1), 144, 271F, 68, 46A, 133(6), 131
AI-generated summary — verify with the full judgment below
Order PER LALIET KUMAR, J.M: This is an appeal filed by the Assessee against the order of the Ld. CIT(A)/NFAC, Delhi dt. 17/12/2021 pertaining to Assessment Year 2012-13. 2. In the present appeal Assessee has raised the following grounds:
1. That the Learned Assessing Officer and National Faceless Appeal Centre has failed to appreciate the materials on the record and facts of the case.
2. That the order of National Faceless Appeal Centre is erroneous, arbitrary, opposed to law and facts of the case and is, thus untenable.
3. That the facts and circumstances of the case and law, the National Faceless Appeal Centre has further erred in passing a non-speaking order of the principles of Natural Justice.
4. The National Faceless Appeal Centre has illegally, wrongly, arbitrarily and without any basis sustained addition of Rs. 49,82,000/- to the returned income of the assessee.
5. Any other ground which may be taken up at the time of hearing of appeal with the kind permission.
3. Briefly, the facts of the case are that in the present case the assessee had not filed his return of income for the A.Y. 2012-13. Thereafter, after recording reasons notice under section 148 was issued on 15/05/2015 to the assessee and assessee was asked to file his return of income within one 2 month of issue of notice. The assessee neither responded to this notice nor filed his return of income and violated the provision of Income Tax. Therefore penalty proceedings under section 271F of the Act were initiated. Subsequently, the notice under section 142(1) dt. 20/06/2016 alongwith Questionnaire were issued and assessee was sought to furnish the source of cash deposit, but no reply was filed by the Assessee on the given date, and hence, being time baring matter, a show cause notice u/s 144 dated 07.10.2016 was issued. In response, the reply received on 22 10.2016 submitting the copy of sale deed. It is found that the assessee has sold an agricultural land for Rs 91,70,000/- out of which Rs. 60,00,000/- has been received through cheque and balance of Rs. 31,70,000/- has been received as advance. Out of this amount Rs. 20,00,000/- has been deposited in previous year and remained in the year under consideration.
3.1 The Ld. Counsel for the Assessee vide his NIL dated undertaking stated that the assessee had submitted the required documents i.e; copy of sale deed, copy of Bayana, Affidavit from his brothers , bank statement and other related documents before the AO. Partial reply was filed by him and during the assessment proceedings he stated that he has started the renovation work of his house therefore he shifted to office from his house and therefore the file of the assessee got misplaced during shifting. He undertakes that as soon as the file is traced he will return the same. The assessee appeared before the AO on 30/12/2016 but no source was furnished. Being the time barring matter no further date were provided to the assessee by the AO and he has passed the assessment order wherein he has stated as under:
But on perusal of bank account statement, it is found that Rs. 54,50,000/- has been found unexplained after giving credit to withdrawals in the later dates. Hence, giving the relief of Rs. 11,70,000/- (Rs. 20 lakh deposited in previous year and balance of Rs. 11 lakh in this year out of total Rs.31,00,000/- received in cash), the balance of Rs. 42,20,000/- is found unexplained and is added back to the income of the assessee. It is well settled law that onus for proving the source of a sum / money found to have been received by an assessee is on him. Where the nature & source of money of a receipt whether it be of money or other property, cannot, satisfactorily be explained by the assessee. It is open to revenue to hold that income is from any particular source (Roshan De Hatti Vs CIT 197 ITR 938 (SC). It is also well settled that provision of section 68 applies to all credit entries. Gautam Ram Sri Ram Vs. CIT 98 37 (Punjab & Haryana)
4. Against the order of the Ld. AO the assessee went in appeal before the Ld. CIT(A). The Ld. Counsel for the Assessee drew attention of the Ld. CIT(A) to 3 the Remand Report submitted by the AO and also to the objection filed by him in reply to the Remand Report.
4.1 After considering the submission of both the parties the Ld. CIT(A) passed the impugned order and allow the part relief to the assessee by stating as under:
7. The contentions of the A.O. and the appellant have been carefully considered. The above two Remand Reports comprehensively counter all the contentions raised by the appellant.
7.1 Regarding the appellant's claim that benefit of Rs. 20 lakhs was not given, both the A.Os. as per the Remand Report dated 09.05.2019 and 10.02.2020 have confirmed independently that the said amount of Rs. 20 lakhs was received and deposited by the appellant in the previous A.Y. 2011-12 and was altogether a different transaction which had been accounted for in the previous A.Y. 2011-12. Therefore, there is no question of giving any relief in the present appeal for A.Y. 2012-13. 7.2 Regarding the benefit of Rs. 15 lakhs, the appellant has claimed that it had received an amount of Rs. 10 lakhs from Shri Jagpal Singh and Rs. 5 lakhs from Shri Azaib Singh as cash advance for the sale of land, which was subsequently cancelled and the total cash receipt of Rs. 15 lakhs was subsequently returned. However, the appellant could" not produce Shri Jagpal Singh before the A.O. at the time of passing of assessment order in 2016 or subsequently before the A.O. in 2019 and 2020 when the additional opportunity was given during the Remand Report. The appellant was only able to produce Shri Azaib Singh. However, Shri Sushil Kumar, Stamp Vendor, was cross examined as per the first Remand Report dated 09.05.2019. The stamp vendor categorically denied his signature on the alleged stamp paper. Further, the appellant had claimed that the sale agreement with Shri Jagpal Singh and Shri Azaib Singh was entered on 10.04.2011 whereas the date of sale of stamp paper was 27.05.2011. Moreover, even in this alleged agreement, there is no mention that Rs. 5 lakhs was paid by Shri Azaib Singh and Rs. 10 lakhs was paid by Shri Jagpal Singh. In view of the above facts, the contention of the appellant cannot be accepted and is accordingly dismissed.
7.3 The appellant's contention regarding relief for opening cash in hand of Rs. 1,72,500/- and the appellant's claim of rectification of calculation error of Rs. 1,00,000/- is accepted as per the comments of the second Remand Report dated 10.02.2020 and is accordingly allowed.
7.4 Regarding the appellant's contention that the benefit has not given for cash withdrawal made during the year, the appellant has not been able to substantiate his claim with documentary evidence to establish that the cash deposited in his bank account was out of the same cash which he had withdrawn. Therefore, the appellant's contention on this issue also cannot be accepted and are accordingly dismissed.
4 8. Total relief granted Rs. 1,72,500/- + Rs. 1,00,000/- =2,72,500/-. Accordingly, the assessed income will be Rs. 52,54,500/- - Rs. 2,72,500/- = Rs.49,82,000/-. 9. For the statistical purposes, the appeal is partly allowed.
Aggrieved by the order of the Ld. CIT(A) the assessee is in appeal before us.
6. During the course of hearing the Ld. Counsel for the Assessee submitted that the Ld. CIT(A) despite obtaining the Remand Report from the AO with respect to addition of Rs. 20,00,0000/- and Rs. 15,00,000/- and other issues, have confirmed the addition in the hands of the assessee. He had drawn our reference to the order of the Ld. CIT(A) wherein two Remand Reports were reproduced, the relevant contents of First Remand Report dt. 09/05/2019 read as under:
"Sub:- Additional evidence under Rule 46A of the Income Tax Act, 1961- Appeal No. 189/PKL/16-17 in the case of Sh. Pardeep Kumar, H.No. 512, Village Ghatiwala, Pinjore, Distt. Panchkula for the A.Yr. 2012-13 -regarding- Kindly refer your office letter F. No. CIT(A)/PKL/18-19/2678 dated 08.03.2019 on the subject cited above.
In this regard, it is submitted that the facts of the case in brief are that as per information available with this office, the assessment y/s 143(3)/147 of the I.T. Act, 1961 was completed on 31.12.2016 by making addition of Rs. 42,20,000/-. Later on, it came to notice that while making addition of Rs. 42,20,000/-, after considering the benefit of Rs. 11,70,000/- out of previous withdrawals, the then AO had made addition of Rs. 42,20,000/- instead of Rs. 54,24,500/- (65,74,500(- )11,70,000). However, perusal of the records and copies of bank statement filed by the assessee, there is a total cash deposit of Rs. 63,24,500/- and not Rs.65,74,500/-. Hence, after considering the total cash deposit of Rs. 63,24,500/- and after allowing the benefit of Rs. 11,70,000/- as mentioned in the assessment order, addition of Rs. 52,54,500/- (63,24,500(-) 11,70,000/- was made and rectified accordingly vide order dated 18.02.2019 after giving the consent of the assessee and the assessee has also filed appeal against this order also which was merged with the earlier appeal filed by the assessee as intimated by the assessee. Lateron, the case was remanded back by the Ld. CIT(A) to the undersigned for furnishing remand report after considering the documents filed by the assessee before the Ld. CIT(A), Panchkula.
During the appellant proceedings before your honour, the assessee filed additional evidence under rule 46A of the I. T. Rules. During appellate proceedings, the id. Counsel of the assessee has filed additional evidence that the assessee had deposited cash of Rs. 63,24,500/- by giving the following details of source of cash deposit in saving bank account :-
1. 1. Out of the advance money received at Rs. 15,00,000/- from Sh. Jagpal Singh and Sh. Azaib Singh after entering into an agreement to sell his agriculture land 5 measuring 4 Biswa on 10.04.2011 which was claimed that the same was not matured and returned the advance money received.
2. Out of the advance cash received of Rs. 31,70,000/- from Sh.Ranjit Singh S/o Sh. Piara Singh, Pinjore and Kumar Shruti Singla as per sale deed dated 06.06.2011 and 3. Out of the cattle sales and out of past savings.
in compliance to directions given by the worthy CIT(A), Panchkula, to verify the additional grounds raised by the assessee before the Ld. CIT(A), Panchkula, a query letter was issued to the assessee which are reproduced as under :-
"TO Sh. Pardeep Kumar, H. No. 512, Village Ghatiwala, Panchkula. D/Sir, Sub:- Addition evidence under Rule 46A of the Income Tax Act. 1961 — Asstt. Years 2012-13 — Matter Regarding- Please refer to your appeal filed before the Ld. CIT(A), Panchkula where you have filed additional evidence u/s 46A. 2. In this context, you were requested to please produce the following information/details on or before 18.03.2019:-
1. 1. Please produce Sh.Azaib Singh alongwith copy of bank account for the relevant period alongwith ID.proof.
2. Please produce original documents, if any produced before worthy CIT(A) Please also note that no further adjournment will be granted to you and report will be submitted to the worthy Commissioner of Income-tax (Appeals) as per material available on records.
Yours faithfully, (lagvir Singh) Income Tax Officer, Ward-3, Panchkula In compliance to the above said query letter, the assessee has produced Sh. Azaib Singh only whose statement was recorded who has claimed that he had paid Rs. 5,00,000/- as advance to Sh. Pardeep Kumar but he has not produced Sh. Jagpal Singh on the plea that he is not in a position of come in the office being Kidney Injury who has claimed that he had paid Rs. 10,00,000/- as advance to Sh. Pardeep Kumar. In support of his claim assessee has also filed copy of agreement. Further to cross examine the copy of agreement produced before the undersigned and a copy of the same was also filed with your office, information 6 u/s 133(6) was also called for from the stamp vendor, which are reproduced as under :- To Sh.Sushil Kumar, Stamp Vender, Raipur Rani Tehsil, Distt. Panchkula D/Sir, Sub:- Information u/s 133(6) of the I.T.Act, 1961 in the case of Sh. Pardeep Kumar, Village Ghatiwala, Kalka - Asstt. Year 2012-13- Matter Regarding- Please refer to the above noted subject. In connection with enquiry proceedings in the above noted case, you are required to attend the office of the undersigned on 02.04.2019 along with stamp paper register maintained by you for the period 01.04.2011 to 30.05.2011 so that the report may be submitted to the higher authorities. Please also note that no further adjournment will be granted to you and penalty as per law will be referred in your case in the case of non-compliance. Yours faithfully, (Jagidr Singh) Income Tax Officer, Ward-3 Panchkula.
4.1 In compliance to the above said query letter, the stamp vendor, Sh. Sushil Kumar attended the assessment proceedings whose statement was also recorded. During statement when he was asked to identify the signature appended on the sold stamp paper on 27.05.2011, he had categorically denied any of his signature on the paper. Further, he has confirmed that he had not sold the said stamp paper. However, when he was asked to produce the stamp Paper sale register, he could not produce any register on the plea that due to theft all records had been stolen. In support of his claim, he had produced copy of FIR in which the records of theft was only 2014-15. 4.2 Perusal of the statements Sh. Sushil Kumar Stamp Vendor and Sh.Azaib Singh recorded, it is clear that the assessee had tried to explain the source of cash deposit to the extent of Rs. 15,00,000/- by furnishing bogus agreement as the genuineness of the transactions have not been explained by the assessee and is required to be rejected on the following grounds.- a) First of all, as per copy of agreement filed, the assessee has claimed that the agreement was entered between the assessee and Sh. Azaib Singh / Jagpal Singh on 10.04.2011 whereas the date of sale of the stamp paper is 27.05.2011. How it is possible that the agreement was made / signed on 10.04.2011 whereas the stamp paper was purchased on 27.05.2011. b) The stamp Vendor has also denied his signature and stamp on the back side of the stamp paper who sold the said stamp paper vide No. 2704 Dated 27.05.2011. c) The assessee had not produced willfully to Sh. Jagpal Singh on the plea that he is not feeling well. d) As per copy of agreement, there is no mention that Rs. 5,00,000/- was paid by Sh. Azaib Singh and Rs. 10 lacs was paid by Sh. Jagpal Singh.
7 5. Keeping in view of the above remarks, the additional evidence filed by the assessee during appellate proceedings, the additional grounds taken by the assessee are deserve to be rejected and the addition to the extent of cash deposited at Rs. 14,50,000/- is required to be confirmed out of the total addition made by the AO.
Regarding the issue of claim of cash deposited of Rs. 35 lacs on 02.06.2011 in saving bank account out of the advance cash received of Rs. 31,70,000/- from Sh.Ranjt Singh S/o Sh. Piara Singh, Pinjore and Kumar Shruti Singla as per sale deed dated 06.06.2011 it is submitted that out of the total advance received of Rs. 31,70,000/-, Rs. 20,00,000/- has been deposited by the assessee in the previous year and claim of balance of amount of Rs 11,70,0001-was allowable. Accordingly, the assessee had deposited unaccounted cash of Rs. 23,30,000/- (35,00,000 (-) 11,70,000) from undisclosed sources which is required to be confirmed out of the total addition made by the AO.
Regarding the issue of claim of cash deposited of Rs. 05 lacs on 03.06.2011 in saving bank account out of the advance cash received of Rs. 31,70,000/- from Sh.Ranjit Singh S/o Sh. Piara Singh. Pinjore and Kumar Shruti Singla as per sale deed dated 06.06.2011 and sale of cattle, it is submitted that out of the total advance received of Rs. 31,70,000/-, Rs. 20,00,000/- has been deposited by the assessee in the previous year and claim of balance of amount of Rs. 11,70,000/- was already allowed. Accordingly, the assessee had deposited unaccounted cash of Rs. 5,00,000/- from undisclosed sources and addition made by the AO to the extent of Rs. 5,00,000/- is required to be confirmed.
8. In view of the above discussion in preceding paragraphs, it is submitted that the then assessing officer had rightly made the addition to the extent of Rs. 42,80,000/-(14,50,000 + 23,30,000+ 5,00,000). Hence, the case may kindly be decided on merits after considering the facts of the case with a request to reject the additional documents filed before your good office during appellate proceedings on the facts discussed in earlier paragraphs. The assessment record in three volumes is enclosed herewith." The relevant contents of second Remand Report dt. 10/0/2020 which read as under: “ Kindly refer to your office letter No. CIT(A)/Pkl/19-20/731 Dated 19.08.2019 on the subject cited above and this office letter dated 13.05.2019 vide which remand report was submitted to your good self office.
2. In this regard, it is submitted that the facts of the case in brief are that as per record available with this office, the assessment u/s143(3)/147 of the IT. Act, 1961 was completed on 31.12.2016 by making addition of Rs.42,20,000/-. Later on, it came to notice that while making addition of Rs.42,20,000/-, after considering the benefit of Rs.11,70,000/- out of previous withdrawals, the then AO had made addition of Rs.42,20,000/- instead of Rs.54,24,500/- (65,74,500(-)11,70,000). However, perusal of the records and copies of bank statement filed by the assessee, there is a total cash deposit of Rs.63,24,500/- and not Rs.65,74,500/-. Hence, after considering the total cash deposit of Rs.63,24,500/- and after allowing the benefit of Rs.11,70,000/ as mentioned in the assessment order, addition of Rs.52,54,500/- (63,24,500(-)11,70,0001-) was made and rectified accordingly vide order dated 18.02.2019 after giving the consent of the assessee and the assessee has also filed appeal against this order also which was merged with the earlier appeal filed by the assessee as intimated by the assessee. Later on, the case was remanded back by the Ld. CIT(A) to the undersigned for 8 furnishing remand report after considering the documents filed by the assessee before the Ld. CIT(A), Panchkula. The remand report was submitted, but the assessee filed objection on the same and Ld. CIT(A) again send the additional evidences submitted by the assessee for re-submission of the Remand Report. The report is being re-submitted as under as desired:- The assessee has submitted as under: In the rectified assessment order, the Ld. Assessing officer has made error in calculating the amount of addition. Relevant extract of the order is " Hence, after considering the total cash deposit of Rs. 63,24,500/- and after allowing the benefit of Rs. 11,70,000/-as mentioned in the assessment order, addition of Rs. 52,54,000/- (63,24,500 (-) 11,70,000/- ) is made and rectified accordingly." Your Goodself will appreciate the fact that 63,24,500/- - 11,70,000/-is Rs. 51,54,500/- not Rs. 52,54,000/-, Hence being a calculation error we request your Goodself to give benefit of Rs. 1,00,000/-and delete the addition by Rs. 1,00,0001- have considered the reply of the assessee- and found that the claim of the assessee is valid as here is totalling error while passing of the rectification order. b. Benefit ofRs. 20,00,000/- not given The assessee has submitted following submission:- In the Assessment order passed by, the Ld. Assessing officer accepted that fact that Assessee has received cash of Rs. 31,70,000/- against sale of agriculture Land. The Ld. Officer has given benefit of Rs. 11,70,000/- and rejected the claim of Rs. 20,00,000/- on the reason that the amount of Rs. 20,00,000 is already been adjusted/given in the AY 2011-12. In this regard, it is submitted that Rs. 20,00,000/- received in AY 2011-12 was another amount and from another person and the relevant documents of the same was already submitted and placed on record in the assessment proceedings for the Assessment year 2011-12. The Ld. Assessing officer has made a very big mistake by considering Rs. 20,00,000/-for the AY 2011-12 which was actually for the year under consideration. The Documents which was submitted for AY 2011-12 is again enclosed herewith as Annexure 1 for your kind consideration. All the relevant documents like copy of agreement, Buyer details along with their ID and address proofs are already in assessment file of AY 2011-12, but the Ld. Assessing officer without even checking the facts and information for assessment file of AY 2011-12, disallowed claim of Rs. 20,00,000/-just by writing one line in the Assessment order i.e. "Out of this amount Rs. 20,00,000/-has been deposited in previous year and remaining in this year under consideration."
The reason of rejection of Rs. 20,00,000/- is vague , unreasonable and has no justifications. The assessee has submitted all the documents in AY 2011-12 and it is the duty of the td. Assessing Officer to check the facts before disallowing any claim of the assessee.
9 I have gone through the reply of the assessee and I have checked the assessment/scrutiny file for the have 11-12 and found that Rs.20,00,000/- received in AY 2011-12 was another amount and from another person and the relevant documents of the same is already on record in the assessment proceedings for the Assessment year 2011-12. c. Benefit of Rs. 15,00,000/- not given The assessee has submitted following reply on this point- In this regard, it is submitted that Rs. 15,00,000/- was received by the assessee as advance money (boyana) from Sh. Ajaib Singh and Jagpal Singh. This money was received in the year under consideration and returned back in the same year i.e. year under consideration. Your Goodself will appreciate the fact that money received and given back cannot be considered as income and is not taxable. To justify our claim we submit following documents:- Copy of Agreement for sale of land is annexed as Annexure 2. Copy of Cancellation of sale of agreement is annexed as Annexure 3. In this regard, summon u/s131 of the IT Act was issued to Sh.Jagpal Singh S/o SH. Jati Ram, VillageChownki. Panchkula on 20.01.2020 with the directions to appear before the undersigned on 27.01.2020. In response to that the assessee filed a reply on 03-02.2020 stating that he is suffering from various major and multiple disease as Acuter Kidney injury, Liver Problem. Hernia, Arthritics/Osteoarthritis right knee etc from last two year and not able to move here and there. Further, he has filed an affidavit regarding transactions made with Sh. Pardeep Kumar. In his affidavit, Sh. Jagpal Singh has stated that he has given a sum of Rs. 10,00,000/1- (in cash) to Sh. Pardeep Kumar as advance money for purchase of land. He also submitted that the money is also received back as the deal could not be matured. To support his claim he also submitted bank statement. The copy of the same is attached as annexure-A. It is submitted that the statement of Sh. Ajaib Singh is already placed on record. The copy of the same is also attached as annexure-B. To verify the claim and genuineness of the agreements the stamp vendor Sh. Sushil Kumar was called before my office vide summons dated 20.01.2020 to appear on 28.01.2020 at 11:30 AM In response to that the stamp vendor Sh. Sushil Kumar appeared and his statement was recorded u/s 131 of the IT Act, 1961. The copy of the same is attached as annexure-C. d. Cattle Sale benefit not given The assessee has submitted as under:-
During the year under consideration the Assessee has sold cattle to Sh. Ujjogar Singh for Rs. 210,000/-. Receipt of the sale of cattle is annexed as Annexure 4. The Ld. Assessing Officer has not given any benefit of same and rejected the c/a,m of the assessee without any reason.
10 Further, in the remand report the assessing officer has not given any reason/justification for not considering the cash received from sale of cattle. The assessee has submitted receipt of sale of cattle before me, but neither the assessee produced e purchaser of cattle nor su bmitted any evidence regarding having of catties. Therefore, the claim the assessee on this ground is requested to be disallowed. e. Opening cash in hand Assessee has submitted as under:- During the year under consideration the assessee has opening cash in hand of Rs. 1,72,500/-which was not considered by the Ld. Assessing officer. The Cash in hand for AY 2011-12 is already assessed in which closing cash in hand is Rs. 1,72,500/-. As the closing cash in hand is already been accepted then rejection the claim of assessee of opening cash in hand is wrong and illegal. Copy of capital account is submitted to justify opening Cash in Hand but the Ld. Assessing officer has not considered the same and does not give any reason for rejection of same. Even in remand report the assessing officer has not given any reason/justification for not considering the opening cash in hand of the assessee. Copy of capital account is annexed as Annexure 5 The assessee has submitted capital account and the claim of the assessee is found to be genuine as closing balance of cash in hand of last year is verified from the by Assessment file for the previous year i. e. 10-11 for which the assessment has been completed by this office. f. Benefit of Cash Withdrawal not given:- assessee has submitted Cash Flow Statement, during the year total withdrawal from the bank is Rs. 15,900-00. Assessee has also submitted the summary of cash deposited. The Ld. CIT(A) may take the decision as per merit of the case. report is being submitted for kind consideration of the Ld. CIT(Appeal)."
7. Per contra, the Ld. DR relied on the orders of the lower authorities.
We have heard the rival contentions and perused the material available on the record.
Issue pertaining to Rs. 20,00,000/- 8.1 In this regard Ld. CIT(A) in the order was given the reason for rejecting the contention of the assesse, was that the benefit of adjustment of Rs. 20,00,000/- was already taken by the assessee in the A.Y. 2011-12 and benefit of the same amount was sought to be taken during the A.Y. We have perused the Remand Report, In the Remand Report, AO has categorically 11 mentioned that the amount of Rs. 20,00,000/- referred and allowed in the A.Y 2011-12 was different than amount of Rs. 20,00,000/- which is the subject matter of present assessment year 2012-13. In view of the remand report, we are of the considered opinion that the Ld. CIT(A) had failed to appreciate the evidence and the documents on record and had wrongly concluded that the amount of Rs. 20,00,000/- was same as it was in the A.Y 2011-12 and the present A.Y. We are of the considered opinion that the amount referred in 2011-12 was different with the amount referred for the A.Y. 2012-13 and therefore the assessee was able to explain the source of the amount for the A.Y 2012-13 and accordingly, the addition made and upheld by the Ld. CIT(A) are required to be deleted and accordingly we delete the addition of Rs. 20,00,000/- in the hands of the assessee. Issue pertaining to Rs. 15,00,000/- 8.2 The assessee has submitted that the agreement was entered between the parties and the amount of Rs. 15,00,000/- was received as advance from Shri Ajaib Singh and Shri Jagpal Singh. This amount was received in the year under consideration and returned back in the same year. However, the Ld. CIT(A) has rejected the contention of the assessee stating that the Stamp Paper on which the agreement was typed was of the later date whereas the agreement was on the prior date. In this regard the assessee had filed the written submission before us and in the said submission it was mentioned as under:- “In this regard, it is submitted that Rs. 15, 00,000/- was received by the assessee as advance money (bayana) from Sh. Ajaib Singh and Jagpal Singh. This money was received in the year under consideration and returned back in the same year i.e. year under consideration. Your Goodself will appreciate the fact that money received and given back cannot be considered as income and is not taxable. To justify our claim we submit following documents:- Copy of Agreement for sale of land is annexed as Annexure 2. Copy of Cancellation of sale of agreement is annexed as Annexure 3.” Further it was mentioned in the submissions as under:- On the Instructions given by your Goodself, the Ld. Assessing Officer has served following Letter dated 13.03.2019 to the assessee:-
As per instructions given by the Ld. Assessing Officer the assessee produced Sh. Jagpal Singh and submitted all the desired Documents which are also verified through original documents as well. After the submitting of documents, no other information or document is demanded by the Ld. Assessing officer. The Ld. Assessing officer has also never ever called the assessee in person at any time while making remand report. The Ld. Assessing officer has made following observation in remand report and we will rebut the same as under:- Observation No. 1 of the remand report “in compliance to the above said query letter, the assessee has produced Sh. Azaib Singh only whose statement was recorded who has claimed that he has paid Rs. 5,00,000/- as advance to Sh. Pardeep Kumar but he has not produced Sh. Jagpal Singh on the plea that he is not in position to come in the office being Kidney injury who has claimed that he has paid Rs. 10,00,000/- as advance to Sh. Pardeep Kumar. In support of his claim assessee has filed copy of agreement” Our Objection on this para of remand Report:- Ld. Assessing authority has never ever called Sh. Jagpal Singh- The Ld. Assessing officer in his observation of remand report mentioned that Sh. Jagpal Singh was not produced. In this regard it is submitted that as evident from the Notice (reproduced above) the Ld. Assessing Officer has never ever called Sh. Jagpal Singh and he has only asked the assessee to produce Sh. Azaib Singh which was done by the assessee. As there is no instruction to produce Sh. Jagpal Singh this remand observation of the Ld. Assessing Officer is wrong, illegal and has no legs to stand upon. Assessee is not legally liable/bound to produce someone- We are totally surprised to see that the Ld. Assessing Officer has issued Income Tax Notice to the assessee to produce Sh. Azaib Singh. There is no law in Income Tax by which the Ld. Assessing Officer can instruct the assessee to produce someone. The Ld. Assessing Officer should use his powers and should call the person directly or 13 can call for information by invoking the provisions U/s 133 (6) of the Income Tax Act, 1961. Observation No. 2 of the remand report “Further to cross examine the copy of agreement produced before the undersigned and copy of the same was also filed with your office, information U/s 133 (6) was called for from the Stamp Vendor, which is reproduced as under:-
Our Objection on this para of remand Report:- Notice issued in wrong Section At the very outset, we are surprised to see the Notice Issued by the Ld. Assessing officer as the Notice to Sh. Sushil Kumar, Stamp Vendor U/s 133 (6) of the Income Tax Act, 1961 to attend the office. The Ld. Assessing office cannot ask anyone to attend the office U/s 133 (6) of the Income Tax Act, 1961 as same can only be issued to collect some information. The Ld. Assessing office should issue the Notice U/s 131 of the Income Tax Act, 1961 then only he can call anyone to attend the office.
14 As the Notice issued by Ld. Assessing office is void ab initio any statement done by stamp vendor is liable to be rejected.
8.3 Per contra the Ld. DR relied upon the order passed by the Ld. CIT(A) and it was submitted that the order passed by the Ld. CIT(A) in this regard is in accordance with law 8.4 We have heard the rival contention and perused the material available on the record. In the present case the Ld. CIT(A) has brought on record copy of agreement filed by the assessee, in the said agreement assessee has claimed that the agreement was entered between the assessee and Sh. Azaib Singh / Jagpal Singh on 10.04.2011 whereas the date of sale of the stamp paper is 27.05.2011. Based on the aforementioned agreement, the Ld. CIT(A) concluded that the agreement entered into between the assessee and the other parties was a sham agreement as it was beyond the preponderance of probabilities for the parties to have acted in such a manner, given the earlier circumstances and the subsequent purchase of the stamp paper. Further, the Ld. CIT(A) noted that the assessee had failed to produce Shri Jagpal Singhl, who allegedly gave ₹ 10 lakhs to the assessee, on the plea that he was unwell. We find no reason to interfere with the findings recorded by the Ld. CIT(A) regarding the disallowance of the payment of ₹ 10 lakhs, allegedly made by Sh. Jagpal Singh and the addition is confirmed . However we found that besides the amount of ₹ 10 lakhs, another amount of ₹ 5 lakhs was paid by Sh. Azaib Singh. Undoubtedly no evidence was brought on record by the lower authorities to deny the receipt of the amount of ₹ 5 lakhs by the assessee from Sh. Azaib Singh. The statement of the assessee as well as of Sh. Azaib Singh were recorded by the revenue authorities , documents were also produced to substantiate payment of ₹ 5 lakhs Sh. Azaib Singh to the assessee. Quite contrary to the positive evidence produced by the assessee, nothing has been brought on record to contradict the statements / evidence of Sh. Azaib Singh.In the absence of any contrary evidence brought on record, we are of the opinion that the 15 assessee was able to explain the source of ₹ 5 lakhs and therefore the assessee is entitled to the relief of ₹ 5 lakhs. There is no other reason to allow the relief of ₹ 5 lakhs for the assessment year, as the assessee has already returned the amount. In view of the above, the assessee is entitled to the relief of ₹ 5 lakhs. Accordingly, the addition of ₹ 10 lakhs is sustained, and the addition of ₹ 5 lakhs is deleted.
Benefit Of cash withdrawal 8.5 The Ld. CIT(A) in paragraph 7.4 noted that the assessee had failed to prove that the cash deposited in the bank account was from the same cash that had been withdrawn by the assessee. In this regard, the Ld. AR submitted that the benefit of cash withdrawals amounting to nearly ₹ 98 lakhs from the bank should be considered, but the lower authorities did not grant any benefit for the cash withdrawn. It was further submitted that addition in case of cash deposit can only be made after giving benefit of cash withdrawn.
The Ld. DR relied upon the order passed by the lower authorities.
We have heard the rival contention of the parties and perused the material available on the record. In the present case, the only addition sustained by the Ld. CIT(A) was for Rs. 49,82,000/-. As against the above said amount, we had already deleted a sum of Rs. 20,00,000/- (supra) and also an amount of Rs. 5,00,000/- (supra) and for the remaining amount, the assesse has failed to prove the evidence that the same cash was deposited back in the account by the assesse after withdrawing it from his bank account. Needless to say that the remaining amount of Rs. 24,82,000/-, an amount of Rs. 10,00,000/- had already been confirmed by us in the foregoing paragraph. After reducing the amount of Rs. 10,00,000/- the amount remained is Rs. 14,82,000/- We do not find any evidence or material on record to substantiate the contention of the assesse accordingly the assesse is not entitled to any benefit on account of his contention in this regard.
16 11. In the result, the appeal of the assessee is partly allowed and the addition is restricted to Rs. 24,82,000/-. Thus the relief of Rs. 25,00,000/- is granted to the assessee.