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Income Tax Appellate Tribunal, SMC BENCH, PUNE
Before: SHRI D. KARUNAKARA RAO, AM
आदेश आदेश / ORDER आदेश आदेश
PER D. KARUNAKARA RAO, AM :
This is the appeal filed by the assessee against the order of CIT(A)-4, Pune, 01-12-2016 for the Assessment Year 2011-12.
The grounds raised by the assessee read as under:
“1. On the facts and circumstances of the case and in law the Ld.CIT(A) was not justified in confirming the addition made by the A.O. of Rs.5,50,000/- u/s.69 of the Act. The provisions of S.69 are not applicable to the facts of this case as the assessee was not obliged to maintain books of account to attract S.69 of the Act. The addition be deleted. 2. On the facts and circumstances of the case and in law the land sold was an agricultural land and the extra consideration received of Rs.5,50,000/- was in connection with the said land. There is no allegation from the A.O. that the consideration of Rs.5,50,000/- was received over and above settled consideration. In such circumstances no addition can be made and confirmed by the Ld.CIT(A) as in case of land consideration of Rs.2,70,000/- it has been deleted by him. The addition is not sustainable. It be deleted.
On the facts and circumstances of the case and in law the Ld.CIT(A) was not justified in confirming the addition of Rs.5,50,000/- made by the A.O. without passing a “speaking order” as mandated by S.250(6) of the Act. The addition be deleted. 4. The appellant craves to leave, add/amend or alter any of the above grounds of appeal.”
Briefly stated relevant facts are that the assessee is an individual
and filed the return of income on 24-06-2011 declaring total income of
Rs.3,28,037/-. Assessee’s case was selected for scrutiny under CASS
for verifying the cash deposits in bank account. Assessee made cash
deposits in his bank account maintained with State Bank of India
aggregating to Rs.26,49,000/-. In the assessment, the source of this
deposit is the subject matter. Assessee retired from government service
on 31-10-2010. During the year under consideration, assessee along
with 4 co-owners sold the agricultural income for a sum of
Rs.4,50,000/-. Assessee’s share comes to Rs.90,000/-. Assessee
explained that his 3 sisters and mother relinquished their rights and
they did not accept any consideration out of the said sale transaction.
AO accepted the sum of Rs.90,000/-, i.e. share in respect of mother as
she lives with the assessee. However, the AO rejected the explanation of
the assessee that his sisters relinquished their rights and thus
disallowed Rs.2,70,000/- as unexplained investment in cash deposit.
Assessee further stated that he received Rs.5,50,000/- in respect of sale
of “other items” in connection with the said land. In absence of proper
explanation and the details for explaining these other items, AO rejected
the same and made addition of Rs.5,50,000/- u/s.69 of the Act.
Aggrieved with the order of AO, assessee filed an appeal before the
CIT(A) contesting the additions, i.e. (1) addition of Rs.2,70,000/- made
on account of unexplained investment; and (2) addition of
Rs.5,50,000/- made on sale of other items attached to the land.
In the First Appellate proceedings, the CIT(A) deleted the addition
of Rs.2,70,000/-. Contents of Para No.5.3 are relevant. However, the
CIT(A) confirmed the addition of Rs.5,50,000/- as per the discussion given in Para No.6.3 of his order.
Aggrieved with the order of the CIT(A) confirming the addition, the
assessee filed the present appeal before the Tribunal with the aforesaid
grounds.
Ld. Counsel for the assessee submitted that the agricultural land
co-owned by the assessee along with 4 others was sold for a recorded
sum of Rs.4,50,000/-. However, in the assessment proceedings, AO
noticed cash deposit of Rs.5,50,000/- in the saving bank account of the
assessee with SBI and enquired into the source of the said cash deposit.
Assessee submitted that this amount constitute sale proceeds earned
by the assessee on account of attachments/other items with the said
land transaction which was subject matter of the same in the
assessment as well as in the appellate proceedings. Factually, the
assessee could not demonstrate the details of the said
attachments/other items, which is the source for earning of the cash of
Rs.5,50,000/-. Considering the failure to discharge the onus, the AO
made the said addition and CIT(A) confirmed the same. On these facts,
Ld. Counsel for the assessee requested for “one more round” of
proceedings before the AO and promised to supply the relevant details
of said attachments the said land which gave rise to the cash deposit of
Rs.5,50,000/-. In this regard, Ld. Counsel filed the following note and
the same reads as under :
“1. The assessee had owned agricultural lands at Dhanara Tal.Yewatmal and were under cultivation for the crops like Soyabin, Jawar, Tur about 03H 27R along with other family members. The various trees such as chiku, Lemon, Mango and others were planted alongside the said agricultural land. It is common knowledge that the Trees planted and grown on such Agricultural land do not get mentioned in the Revenue Records/ 7/12 extracts. It is also a general faith professed by the agriculturists that such grown up trees are not separately sold. The purchasers pay for them separately.
The sale of agricultural land has been accepted. So long as the trees are uncut they form a part of the land. (Vishnudatta Antharjanam (AKTKM) v. CIT (1971) 78 ITR 58 (SC). It is also held in CIT v. Ramaih Reddy (1986) 158 ITR 611 (Kar) that "if land with forest thereon be entirely sold in one transaction, the sales proceeds would be on capital account. But in this case since it was agricultural land with forest thereon their sale is also exempt from taxation. The appellant assessee was owner of the tree and land and trees were sold in one transaction.
Therefore, the sale of trees (not so specifically mentioned in the sale-deed because of the faith of the farmers that trees are not to be sold) is being part of the land is exempt. In view of this the amount of Rs. 5,50,000/- added by the A. O. under S. 69 and confirmed by Ld. CIT(A) was not correct. The consideration of Rs. 5,50,000/- though received over and above the settled consideration was on account of trees and was part of the sale of land. The assessee is not having any other source of income except service-pension.
Since this issue was not so properly argued before the lower authorities and in order to do complete justice to the Govt. Pensioner it is requested to give one more opportunity to the assessee to plead his case properly before the Assessing Authority.
Copy of 7/12 extract is filed herewith.
Ld. DR for the Revenue vehemently opposed the assessee’s
requested for one more opportunity before the AO. Ld. DR submitted
that the it is for the assessee to discharge the onus on the source of
funds on the details of attachments if any and the assessee failed to
adduce any evidence in support of the said cash deposit of
Rs.5,50,000/-. Therefore, opposing the said new explanation, Ld. DR
prayed for confirming the addition.
On hearing both the parties on this limited issue, I find the
assessee failed to give basic details on the alleged “attachments/other
items” sold along with the sale of land transaction in question. The
submissions made by the assessee’s counsel do not indicate the
existence of any direct evidence on the same which gives the relevant
facts about the said transaction for proper adjudication of the issue.
Therefore, I am of the opinion that the submissions made by the
assessee are general in nature. Assessee has obligation to demonstrate
the (1) existence of the said trees; (2) the sale of the said trees; (3)
furnishing of details or confirmation if any from the said buyer of the
trees; (4) the flow of funds amounting to Rs.5,50,000/- to the account of
the assessee linking to the said transaction of land; (5) the reasons for
not furnishing the evidence of cultivation of Chiku, Lemon, Mango etc.,
before the AO/CIT(A); and (6) the reasons for furnishing the same before
the Tribunal without sustainable cause. In the light of these
observations, the request of the assessee’s counsel for remanding the
issue to the file of AO for “one more round” of proceedings has to be
rejected.
Further, I perused the contents of Para No.6.3 of the order of
CIT(A) and proceed to extract the same here as under :
“6.3 DECISION – I have perused the assessment order and the submissions made by the appellant as above. The AO had noted in the assessment order that the appellant has not been able to provide the further details of the other items sold along with the agricultural land amounting to Rs.5,50,000/-. The primary onus to prove the source of investment is on the appellant. The appellant has failed to provide the required documentary evidence and has also failed to offer satisfactory explanation about the sources. I therefore hold that the addition of Rs.5,50,000/- made by the assessing officer u/s.69 of the Act is upheld. Ground No.2 as raised by the appellant is dismissed.”
Considering the same, I am of the opinion, on the addition of
Rs.5,50,000/-, the finding given by the CIT(A) is fair and reasonable.
Hence, I uphold the order of the CIT(A). Accordingly, the grounds raised
by the assessee are dismissed.
In the result, the appeal of the assessee is dismissed.
Order pronounced on this 15th day of June, 2018.
Sd/- (D.KARUNAKARA RAO) लेखा सद� / ACCOUNTANT MEMBER पुणे / Pune; �दनांक Dated : 15th June, 2018. Satish
आदेश आदेश क� आदेश आदेश क� क� �ितिलिप क� �ितिलिप �ितिलिप अ�ेिषत �ितिलिप अ�ेिषत अ�ेिषत/Copy of the Order is forwarded to : अ�ेिषत
अपीलाथ� / The Appellant; 1. ��यथ� / The Respondent; 2. आयकर आयु�(अपील) / The CIT(A)-4, Pune 3. आयकर आयु� / The Pr.CIT-3, Pune 4. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, पुणे “SMC” / 5. DR ‘SMC’, ITAT, Pune; गाड� फाईल / Guard file. 6.
आदेशानुसार आदेशानुसार आदेशानुसार/ BY ORDER,स आदेशानुसार
स�यािपत �ित //True Copy// //True Copy// Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune