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Income Tax Appellate Tribunal, DELHI BENCH : SMC : NEW DELHI
Before: SHRI R.S. SYAL
This appeal by the assessee is directed against the order passed by the CIT(A) on 30.11.2016 in relation to the Assessment Year 2009-10.
The assessee has challenged the sustenance of addition of Rs.17,50,000/- which was made by the Assessing Officer on protective basis on account of agricultural income.
Briefly stated, the facts of the case are that the AIR information was received that the assessee had deposited Rs.29,50,000/- in his savings bank account. Notice u/s 133(6) date 16.10.2012 was issued. A copy of bank account was produced. Due to the death of Shri Suresh Pal, the assessment proceedings were shifted to his legal heir, namely, Shri Vikas Kumar.
Later on, statement of Shri Vikas Kumar was also recorded on 06.11.2012.
During the recording of such statements, the Assessing Officer required the assessee to explain the source of deposit in the bank. The assessee categorically submitted that the deposit of Rs.29.50 lac was out of sale proceeds of his agricultural land to Smt. Aruna Sangal and Smt. Suman Sangal. Letters were sent to both these ladies on 20.11.2012. Later on, summons were also issued. Compliance was made on 17.12.2012 when Smt. Aruna Sangal and Smt. Suman Sangal appeared before the Assessing Officer whose statements were recorded. In the statements, both the purchasers stated to have purchased the property for a sum of Rs.12,50,000/-, out of which a sum of Rs.10 lac was given to late Shri Suresh Pal as advance at the time of agreement and the remaining amount of Rs.2,50,000/- was paid at the time of registry of sale deed. Notice u/s 148 was issued in compliance to which return was filed on 20.12.2013.
During the course of assessment proceedings, the Assessing Officer observed that cash of Rs.29,50,000/- was deposited on a single day, i.e., 04.11.2008 and, as per the registry of agricultural land, the assessee received only a sum of Rs.10 lac as advance. The Assessing Officer recorded that the assessee could not bring on record any evidence of sale of trees, etc., being the agricultural income, amounting to Rs.17,50,000/- which was claimed as source of deposit in the bank account. Protective addition was made for this sum. The ld. CIT(A) confirmed the protective addition of Rs.17,50,000/- by treating it as substantive, against which the assessee has come up in appeal before the Tribunal.
I have heard the rival submissions and perused the relevant material on record. It is noticed that the assessee in his statement recorded by the Assessing Officer, copy placed at page 15 onwards of the paper book, submitted in response to question no. 3 that a sum of Rs.29,50,000/- was deposited in the bank account out of the sale proceeds of the agricultural land. In answer to question no. 4, it was stated that the land was, in fact, sold for Rs.29,50,000/- and the same amount was also deposited in the bank account, but, only a sum of Rs.10 lac was recorded in the sale deed. In support of the fact that Rs.29,50,000/- was deposited in the bank out of sale proceeds, the assessee also filed a copy of pay-in-slip which shows a single cash deposit of Rs.29,50,000/- in the assessee’s bank account by Shri Raj Kamal, husband of Smt. Aruna Sangal, one of the buyers. When the assessee specifically stated this fact before the Assessing Officer that a sum of Rs.29.50 lac was, in reality, the sale proceeds of the agricultural land duly backed by the evidence in the form of the pay-in-slip, the Assessing Officer ought to have shifted his focus on further examining the source of investment by the buyers rather than making addition of Rs.17.50 lac in the hands of the assessee by treating it as un-evidenced sale proceeds of trees.
There is no dispute that the sale of land by the assessee did not attract any capital gains. It would not have made any difference on the taxability of the asessee, even if he had shown the correct amount of Rs.29.50 lac as sale proceeds. When I consider all the facts and circumstances of this case, the sequitur is that the assessee, in fact, sold land for Rs.29.50 lac, which amount was deposited by the husband of one of the buyers in the assessee’s bank account. As the sale consideration of agricultural land is not chargeable to tax, I hold that the addition of Rs.17.50 lac, being a part of sale consideration deposited in the bank account, cannot be sustained by treating it as an unexplained deposit. I, ergo, order for the deletion of addition.
In the result, the appeal filed by the assessee is allowed. The decision was pronounced in the open court on 09th June, 2017.