ITO, REWARI vs. SH. PHOOL SINGH, REWARI

O R D E R PER DIVA SINGH, J.M. : The present appeal has been filed by the Revenue assailing the correctness of the order dated 14.03.2014 of the CIT(A), Rohtak pertaining to 2007-08 assessment year on the following grounds :- “

1. On the facts and in the circumstances of the case the Ld. CIT (A) has erred in law and in facts in deleting the addition of Rs. 44,20,003/- made by A.O. on account of the unexplained investment from unexplained/undisclosed sources of income, the Ld. CIT(A) has deleted the addition without appreciating the facts brought on record by the AO in assessment order as on sustainable documents was furnished by the assessee regarding the valid sources of investment in purchase of land.

2. On the facts and circumstances of the case the Ld. CIT (A) has erred in law and in facts in deleting the addition amounting to Rs. 1,20,000/- made by AO as no sustainable documentary evidence regarding proof of agriculture income was furnished by assessee during course of proceedings.

3. The appellant craves leave to add, amend, alter, modify, delete and or change any of the above grounds on or before at the time of hearing.”

2. At the time of hearing, no was present on behalf of the assessee, the appeal was passed over. In the second round also though the assessee respondent remained unrepresented however, considering the material available on record, it was considered appropriate to proceed with the present appeal ex-parte qua the assessee-respondent on merit after hearing the Ld.Sr.DR.

3. The relevant facts of the case are that as per AIR information the assessee was found to have purchased an immovable property of Rs.48,05,000/- on 17.01.2007. Notice u/s 148 was issued on 13.03.2012 after recording of the reasons. The assessee was required to explain the source of investment made in the purchase of land. The assessee in reply submitted that the assessee’s share was ½ and the investment of his share amounting to Rs.24,10,000/- was explainable from the receipt of Rs.84,43,203/- received from LAO, Urban Estate, Gurgaon against compulsory acquisition of agricultural land. The explanation was not accepted since the assessee was found to have purchased various agricultural properties and further clarification for available funds on the relevant date was sought. Since on 27.02.2013, the assessee failed to appear, the Assessing Officer made the addition of Rs.44,20,003/- in the hands of the assessee.

4. The assessee challenged the addition in appeal before the CIT(A). It was pleaded on behalf of the assessee that the sole means of livelihood of the assessee is only agriculture and apart from agricultural income there was no other source of income. The submissions advanced before the AO were again repeated. The compensation award of Rs.84,43,203/- in 2006-07 assessment year against the compulsory acquisition of agricultural land exempt u/s 10(37) of the I.T. Act, 1961, it was submitted was credited on 31.01.2006 in the saving bank A/c no.009125 of Punjab National Bank, Rewari. Copy of the bank statement made available to the Assessing Officer was relied upon referring to para 3 of the assessment order. The following extract was quoted to demonstrate that the relevant document was before the AO:- "……………The assessee had its closing balance at Rs. 10,25,448/ - of its bank account and that too have been withdrawn before 03-08-2006 and as on 06-01-2007, the assessee had its closing balance at Rs. 26,768/- only of its bank account and investments in purchase of agriculture land was made on 17-01-2007 amounting Rs. 24,10,000/- and on 18-01- 2007 amounting Rs. 20,10,003. In the instant case, the assessee has failed to discharge his onus even after availing ample opportunities to file the valid sources of investment made in purchase of the land extent of Rs. 44,20,003/-. Therefore, Rs. 44,20,003/- while treating it as unexplained investment of appellant from unexplained/undisclosed sources of income."

4.1. It was submitted that the assessee had invested whole of its compensation of Rs.84,43,203/- in purchasing agricultural lands which included the land in question. The following details made available to the AO were again relied upon :- Deed Date of Deed Amount in Assessee’s Assessee’s Mode of # Reg. No. Registration Rs. Share in % Share in Rs. Payment 1 6505 01-02-2006 28,08,470 100% 28,08,970 Cash 2 3832 06-03-2006 4,77,500 50% 2,38,750 Cash 3 3831 06-03-2006 7,78,603 50% 3,89,302 Cash 4 2160 14-06-2006 7,50,500 100% 7,50,500 Cash 5 2753 17-01-2007 48,20,000 50% 24,10,000 Cash 6 8495 18-01-2007 20,10,003 100% 20,10,003 Total 86,07,525 4.2. Copies of the Purchase Deeds of Registration were filed in support of the said claim. In these circumstances, it was submitted that only on considering the bank balance the Assessing Officer misdirected himself. The cash flow statement for the period from 01.02.2006 to 18.01.2007 was relied upon. Copy of the same is extracted in pages 4 to 5 of the impugned order. The same is reproduced hereunder for ready- reference:- CASH FLOW STATEMENT FOR THE PERIOD 01.02.2006 TO 18.01.2007 # DATE OF Debit in Rs. Credit in Narration Cash Balance Transactions Rs. in Rs. 1. 01.02.2006 40,00,000 Cash withdrawal from 40,00,000 O.B.C.Bank vide cheque No.723286 2. 01.02.2006 28,08,970 Agriculture Land purchased vide 11,91,030 Registry No.6505 3. 14.02.2006 10,00,000 Cash withdrawal from O.B.C. 21,91,030 Bank vide cheque No.723287 4. 06.03.2006 8,50,000 Cash Withdrawal from O.B.C. 30,41,030 Bank vide cheque No.723288 5. 06.03.3006 3,89,302 Agriculture Land purchased vide 26,51,728 Registry No.3831 6. 06.03.2006 2,38,750 Agriculture Land purchased vide 24,12,978 Registry No.3832 7. 07.03.2006 6,00,000 Cash withdrawal from O.B.C 30,12,978 Bank vide Cheque No.723289 8. 24.04.2006 9,90,000 Cash Withdrawal From O.B.C 40,02,978 Bank vide Cheque No.887311 9. 01.05.2006 9,90,000 Cash withdrawal from O.B.C. 49,92,978 Bank vide cheque No.887312 10. 14.06.2006 7,50,500 Agriculture Land purchased vide 42,42,478 Registry No.2160 11. 03.07.2006 3,00,000 Cash withdrawal from O.B.C 45,42,478 Bank vide cheque No.887314 12. 17.07.2006 4,00,000 Cash withdrawal from O.B.C 49,42,478

4 Bank vide cheque No.887315 13. 03.08.2006 3,00,000 Cash withdrawal from O.B.C 52,42,478 Bank vide cheque No.887316 14. 17.01.2007 24,10,000 Agriculture Land Purchased 28,32,478 vide Registry No.2753 15. 18.01.2007 20,10,003 Agriculture Land Purchased 8,22,475 vide Registry No.8495 4.3. The record shows that relying on the same, the assessee submitted that sufficient cash balance to the tune of Rs.52,42,478/- was available on the dates 17.01.2007 and 18.01.2007 on which dates the agricultural lands amounting to Rs.24,10,000/- and Rs.20,10,003/- were purchased. Registry No.2753 and 8495, it was submitted fructified only after constant efforts in pursuing the co-owners of the said agriculture lands whose respective shares are reflected in the Sale Deed. The said exercise, it was claimed to be a very time consuming exercise for which the funds were required to be readily kept at hand.

“The appellant was never asked to produce the documentary evidence regarding agriculture income at any stage of assessment proceedings. The appellant was neither confronted regarding the basis of additions. If the appellant was given the opportunity of being heard he could have explain the facts properly in its right perspective. However, the copy of khasra girdawari is enclosed as Annexure-10 in support of the claim of the agriculture income.” (emphasis provided) 6.1. Considering the evidences filed the CIT(A) concluded the issue holding as under:- “3. I have perused the submissions made by the appellant and the facts on record. The assessee has clearly proved that he had earned agricultural income Form J and jamabandi have been filed before me. Nowhere has the AO mentioned that he had sought documentary evidence of earning agricultural income. He has merely stated that the AO had not filed documentary evidence. No reference has been made to any query made by him in this regard. The appellant has proved that he had earned agricultural receipts. I, therefore, delete the impugned additions of Rs.1,20,000/-. The ground of appeal is allowed.”

7. Aggrieved, the Revenue is in appeal before the ITAT on both the issues.

8. Though the Ld.Sr.DR relied upon the assessment order however, was unable to show on what facts and basis the conclusion drawn by the CIT(A) were incorrect. NO contrary fact or evidence has been referred to in order to canvass a contrary view. It is seen that the evidence relied upon to delete the additions are relevant and correct. 8.1. Whereas qua the first issue the evidences admittedly were all along available to the AO and the cash flow statement filed before the CIT(A) was made referring to copy of the bank statements already on record before the AO. This finding of fact asserted in the impugned order has also not been assailed or faulted with by the Revenue in the present proceedings. 8.2. The evidence qua the second issue it is seen has been relied upon for the first time before the CIT(A). The filing of fresh evidence before the CIT(A), has not been assailed by the Revenue presumably in the face of the categoric stand of the assessee as recorded in the impugned order that no such query was raised by the AO during the assessment proceedings. This stand, it is noted has also not been sought to be upset in the present proceedings. The evidence considered for deciding the issue admittedly is relevant and crucial for determining the issue. Accordingly, in the absence of any infirmity having been pointed out in the impugned order no case for upsetting the findings has been made out by the Revenue. 8.3. Accordingly, in the light of the facts and evidences considered by the CIT(A) as discussed in detail in the earlier part of this order and when they are read alongwith the issues raised in the grounds filed by the Revenue, I find that in the absence of any argument assailing either the facts on record or the position of law, I find no infirmity in the impugned order. In the absence of any rebuttal on facts the impugned order is upheld.

9. It may be appropriate to note that after the conclusion of the hearing of the appeal, an adjournment petition was moved on behalf of the assessee stating that the assessee is suffering from Chicken Guniya and thus unable to attend the hearing. Since by the time, it was placed on record the Ld.Sr.DR had been fully heard and the record stood considered vis-à-vis the departmental grounds. Accordingly, in the peculiar facts and circumstances of the case the presence of the assessee was found to be not necessary and the adjournment was rejected. Being satisfied by the conclusion arrived at by the CIT(A the same is upheld. The appeal of the Revenue is dismissed. 10. In the result, the appeal of the Revenue is dismissed. The order is pronounced in the open court on 29th December, 2016.