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Facts
The assessee, an individual with pension income, deposited Rs. 30 lakhs cash into her bank account. She claimed the source was the sale proceeds of rural agricultural land, which her late husband had acquired. Despite an agreement to sell for Rs. 33 lakhs, the registered sale deed showed a consideration of Rs. 6 lakhs, leading the Assessing Officer to add Rs. 30 lakhs as unexplained cash deposit under Section 69A, which was upheld by the CIT(A).
Held
The Tribunal held that the assessee successfully explained the source of the cash deposit as proceeds from the sale of rural agricultural land. It noted that the land was not a capital asset under Section 2(14), making any gain exempt under Section 10(37), and alternatively, the assessee was eligible for deduction under Section 54B due to reinvestment in another agricultural land. Therefore, the addition of Rs. 30,00,000/- under Section 69A was not warranted.
Key Issues
Whether the addition of Rs. 30,00,000/- as unexplained cash deposit under Section 69A was justified when the assessee claimed it to be sale proceeds from rural agricultural land, and whether such gain was exempt from tax or eligible for Section 54B deduction.
Sections Cited
143(3), 143(2), 142(1), 69, 2(14), 54B, 10(37), 69A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, INDORE SMC BENCH, INDORE
(Assessment Year: 2011-12) Mariamma Kurian, Income Tax Officer 1(1) MIG-93 A-Sector, Bhopal Vs. Sonagiri Piplani, Bhopal (Appellant / Assessee) (Respondent/ Revenue) PAN: ABSPK4941P Assessee by S/Shri Ashish Goyal & N.D. Patwa, ARs Revenue by Shri Ashish Porwal, Sr.DR Date of Hearing 25.08.2025 Date of Pronouncement 28.08.2025 O R D E R
This appeal by the assesse is directed against the order dated 10.05.2024 of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi for A.Y.2011-12 which is arising from the assessment order u/s 143(3) of the Act dated 19.03.2014 framed by Assessment Unit, Income Tax Department.
2. Assessee has raised following grounds of appeal:
Mariamma Kurian– A.Y 2011-12 “1. The Id AO was not justified in passing the order, which is bad in law, void ab initio, barred by limitation, illegal, contrary to the facts and circumstances of the case, liable to be annulled. 2. The Id CIT(A) was not justified in confirming the order, which is bad-in- law, void ab initio, barred by limitation, illegal, contrary to the facts and circumstances of the case, liable to be annulled.
3. The Id CIT(A) was not justified in confirming the addition of 3 Rs.30,00,000/- without considering the facts and circumstances of the case.
4. The appellant carves leave to add, amend or modify any of the grounds of appeal”
The brief facts are that the assessee is an individual and filed its return of income for Assessment Year 2011-12 on 04.7.2011 declaring income of Rs.1,53,287/- which is mainly from pension.
The case selected for scrutiny through CASS followed by issuance of valid notices u/s 143(2) & 142(1) of the Act. During the course of assessment proceedings the Ld. A.O asked the assessee to explain the source of cash deposit of Rs.30,00,000/- in the saving bank account held with Central Bank of India, Ranni, District Pathanamthitta, Kerala. During the course of proceedings it was submitted by the assessee that the source of cash deposited is the sale proceeds of the sale of agriculture land acquired by her husband P.T. Kurian in the year 2005 for consideration of dated 14.10.2010 mentions about the sale consideration of Rs.33,00,000/- however the assessee received Rs.30 lakhs only and the same was applied for the purchase of another agriculture land at village Koipuram for consideration of Rs.30,60,000/-. However Ld. A.O was not satisfied with these submissions and in absence of any evidences made the addition of Rs.30,00,000/- in the hands of the assessee and assessed income at Rs.31,53,290/-.
3. Aggrieved assessee preferred appeal before Ld. CIT(A) and during the course of proceedings assessee furnished the copy of sale deed as well, however Ld. CIT(A) had observed that in the registered sale deed an amount of Rs.6,00,000/- is mentioned and not Rs.33,00,000/- as claimed by the assessee and thus concluded that the assessee has failed to explain the source of cash deposit of Rs.30,00,000/- have been generated out of the sale consideration of land. Aggrieved assessee is now in appeal before this Tribunal.
4(a). Ld. Counsel for the assessee has submitted written synopsis which is reproduced below:-
ITA 2/IND/2025 SYNOPSIS
Source of Income : Pension. Return of Income : 04.07.2011. Total Income. Rs. 1,53,287 Notice u/s. 143(2) : 23.08.2012. For Cash Deposits Rs. 30 lakhs in Central Bank of India, Pathanamthitta, Kerala on 18.01.2011. Source of Cash Deposits
1. The cash was deposited out of sale proceeds of rural agricultural land.
2. The land is rural and 15 kms from municipality. PB 30 (certificate issued by Tehsildar). Also Certificate issued by parwari is enclosed.
Land was purchased by husband in 2005 for Rs. 3 lakhs. He later died.
4. Assessee, the widow lady, sold land at Village Pazhavangady at Kerala. Land was agreed to be sold for Rs. 33 lakhs and agreement to sale was executed on 14.10.2010. The sale deed mentions the consideration at Rs. 6 lakhs. PB 16-27.
Assessee gave declaration/ affidavit of Brother of late husband, who stated that the land belonged to his brother Shri P.T. Kurian. After the demise of P.T. Kurian, his wife entrusted the deponent to execute the sale of the said property on sale consideration of Rs. 33 lakhs. At the time of declaration, Rs. 1 lakhs was received. PB 28-29.
Finally the assessee received Rs. 30 lakhs only. Since major amount was received, assessee executed the sale deed. PB 16-27. Out of sale proceeds, another agricultural land was purchased for Rs. 30.60 lakhs in Village Koipuram. AO pq 2 (bottom)
Submissions:
Ld. Lower authorities did not deny the land sold was rural agricultural land.
2. The only dispute was whether Rs. 6 lakhs was received or Rs. 30 lakhs was received. Assessee claimed Rs. 30 lakhs received. This was based on declaration of brother of husband. No inquiry was done from assessee, buyer or brother of husband. The claim was rejected merely on general averment. 4 Mariamma Kurian– A.Y 2011-12 3. It is also pertinent to mention that the assessee was an old widow lady and had no other known source except pension income. The only source wherefrom the amount could have been earned was out of sale of this rural agricultural land. The department has not established any other source. It is a settled proposition of law that in case there is only one source of income, any unaccounted income shall be treated as out of that source. Laxmi Chand Baijnath 35 ITR 416 (SC)
Margret Hope Tea Mfg. Co 201 ITR 747 (Cal.); Krishna Kumar Paliwal 9 IT] 348 (Trib. Indore); Shri Madhusudan Dhakad 44 IT] 401 (Trib. Indore)
The assessee in any case, purchased another agricultural land for Rs. 30.60 lakhs. This fact was also uncontroverted. Thus, the capital gains was invested in purchase of another agricultural land and was exempt u/s. 54B in any case”.
4(b) He further submitted that apart from the pension the assessee has no regular source of income and therefore in the light judgments referred herein above the alleged sum should be treated as part of the transaction of sale of agriculture land carried out during the year. He has also submitted the sale consideration so received has been applied for purchase of another agriculture land and this fact has been duly brought on record before the Ld. A.O which has not been controverted and therefore the source of investment in the agriculture land is the sale proceeds of agriculture land and the gain arisen there from is exempted from land sold is not a capital asset defined u/s 2(14) of the Act and has placed copy of certificate of Village Officer dated 04.02.2014 and certificate of Tehsildar dated 10.02.2014.
5. On the other hand Ld. Departmental Representative vehemently argued supporting the order of both the lower authorities.
6. I have heard rival contentions and perused the records placed before me. The only issue for my consideration is whether Ld. CIT(A) was justified in confirming the action of the Ld. A.O of making addition for unexplained cash deposit in the bank account by invoking Section 69 of the Act. I note that the Ld. A.O has made the addition on observing that the cash bank account held with Central Bank of India, Ranni, District Pathanamthitta, Kerala. I also note that from the very inception of the assessment proceedings the assessee has been submitting that the source of cash deposit is the sale consideration of sale of agriculture land situated in village Pazhavangady, Kerala which was acquired/ purchased by her husband late P.T. Kurian in the year 2005 for a consideration of Rs.3,00,000/-. In support of this claim the with the power of attorney to execute the sale of agriculture land measuring 1 acre 99 cent located at Survey No.51/1, Pazhavangadi, Ranni, Kerala. Power of attorney executed by his wife. In this undertaking it has been mentioned that the agriculture land shall be sold on receiving sale consideration of Rs.33,00,000/- and Rs.1,00,000/- already stood received on the date of entering into the agreement/undertaking. The assessee has also furnished the certificate of Village Officer certifying that the land sold by the assessee is agriculture land not falling in the definition of the capital assets, Provided u/s 2(14) of the Income Tax Act and therefore the gain if any is exempt from tax. It has also been stated before the Ld. A.O that against the agreed sale consideration of Rs.33,00,000/- assessee has received only Rs.30,00,000/- and that has already been applied for purchasing another agriculture land for a consideration of Rs.30,60,000/- at village Koipuram and assessee also deserves to get deduction U/s 54B of Income Tax Act.
During the course of appellate proceedings the assessee failed to get relief from Ld. CIT(A) because the registered sale deed sold, the consideration is mentioned at Rs.6,00,000/- and due to this reason Ld. CIT(A) failed to accept the submissions filed by the assessee.
I observe that the assessee has further filed certificate from Tehsildar to prove that the land sold during the year under consideration is agriculture land not falling in the category of capital assets defined in Section 2(14) of the Income Tax Act. It is further not in dispute that during the year under consideration the assessee had only two source of income firstly from pension and secondly from the gain from sale of agriculture land. It is also interesting to note that the Ld. A.O has accepted the assessee’s submission of making investment for purchase of another agriculture land at Rs.30,60,000/- because he has not made any addition for unexplained investment. It therefore remains an admitted fact that the source of alleged cash deposit is sale consideration from sale of agriculture land. It is a settled proposition of law that if there is only one source of income the unaccounted income shall be treated out of that source and for this I place reliance on the judgment in the case of Laxmi Chand case because as per the agreement to sale the sale consideration is at Rs.33,00,000/- but as per the registered deed the consideration is mentioned as Rs.6,00,000/-. Therefore even if it is deemed that against the agreed sale consideration of Rs. 33,00,000/- the registered sale deed has been executed at Rs.6,00,000/- and the difference over and above Rs.6,00,000/- is “on money” on sale of agriculture land then also the source of such unaccounted income is to be taken from the main transaction i.e. sale of agriculture land. Further on one hand the gain if any from sale of agriculture land is exempt u/s Section 10(37) of the Act and on the other hand the assessee is also eligible for deduction u/s 54B of the Act for making investment of sale consideration for purchase of another agriculture land.
Therefore under the given facts and circumstances of the case, I find that since the assessee has successfully explained the source of alleged cash deposit which has arisen from sale of agriculture land no addition u/s 69A of the Act at Rs.30,00,000/- is called for. deleted. The grounds of appeal raised by the assessee are allowed.
In the result appeal of the assessee is allowed.