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Income Tax Appellate Tribunal, DELHI BENCH : SMC-II, NEW DELHI
Before: SHRI SUNIL KUMAR YADAV
Date of hearing : 14.09.2016 Date of Pronouncement : 21.09.2016 O R D E R This appeal is preferred by the assessee against the order dated 18.03.2015 of the CIT(Appeals)-13, New Delhi on a solitary ground that the CIT(Appeals) has erred in law and on facts by confirming the additions to the tune of Rs.24,92,000 ignoring the personal appearances of depositors and non-disputable admission of facts before the CIT(Appeals).
The facts in brief borne out from the record are that the assessee has declared business income on account of cable network services. Return of income for the AY 2009-10 was processed u/s. 143(1) of the Income-tax Act, 1961 ["the Act"] initially and later on scrutiny assessment was passed and income was assessed at RS.26,86,790 against the declared income of Rs.1,94,790.
Through AIR information, the AO noticed that the assessee has deposited a sum of Rs.19 lakhs in the Indian Bank, Rohini, Delhi, and accordingly she was asked to explain the source of deposits. In response thereto, it was stated on behalf of assessee that she has received the advances for sale of agricultural land situated in Gurgaon, out of which cash was deposited in the bank. In support of her contentions, she has filed 3 receipts of said advances.
The AO noticed that no agreement for sale was executed between the purchaser and the seller and the present owner of the land is the brother of assessee. Though the AO has issued summons for appearance, the brother of assessee did not appear before the AO. He accordingly treated the deposits of Rs.24,92,000 as unexplained cash deposits u/s. 68 of the Act.
The assessee preferred an appeal before the CIT(Appeals) with the submissions that assessee has furnished the complete details of the receipt as advance from prospective buyers. The transactions are not made with related parties and assessee has explained the source in the hands of depositors by producing them before the tax authorities. The statement of prospective buyer, Shri Baljit Singh’s statement was also recorded by the AO. The deposition of Shri Sultan Singh was also filed before the CIT(Appeals). It was further contended that the assessee was the joint owner in the agricultural land and later on she has relinquished her rights in the agricultural land in favour of her brother, Shri Raj Hans Kataria, who has taken the responsibility to settle the dues/liability of the advances received by the assessee with the prospective buyers.
The CIT(Appeals) was not convinced with the explanation of the assessee and he confirmed the additions. The relevant observations of the is extracted hereunder for the sake of reference:-
“4.3 The reason given by AO, submission of the appellant and the enquiry conducted by my Ld. predecessor CIT(A)-XXII in this case are considered. During the appellate proceeding, the appellant introduced another name, Sultan Singh from whom about Rs.15,00,000/- was claimed to have received. Similarly, other amounts were claimed to have received from Baljeet Singh and Dayanand. It is also submitted that the appellant's brother Mr. Raj Hans Kataria finally settled the advance received from these persons for sale of agricultural land which the appellant never had the ownership or the possession. There is also no agreement to sale without which it cannot be expected that the potential buyer will advance such a large amount in cash. In support of her explanation, the appellant could submit only a hand written statement from Sultan Singh dated 14.12.2013 which does not even verify the signature of the person giving the statement. The receipts of the cash submitted during the assessment proceedings are only self serving which has no signature of the person making the payment. Despite a lot of opportunity given by the AO, the appellant failed to produce any documentary evidence or the personal deposition of the evidences. Thus, at the appellate stage, such evidences cannot be accepted u/r 46A irrespective of its evidentiary value. Such cash transactions cannot be accepted as legal channel even if the theory of agricultural land and agriculturist buyer or seller is propounded. The location of the event in Gurgaon or Rohini and in the year of 2008 that cannot be considered as so remote a place in the country where the transacting parties can be expected to be unaware of banking channels and requirement of legal documents in transfer of property. In these facts and circumstances of the case, in the absence of cohesive and plausible explanation as well as reliable documentary evidence, the addition made is confirmed and the ground of appeal is dismissed.”
7. Aggrieved, the assessee has preferred this appeal before the Tribunal with the submission that the assessee has furnished the complete details of the receipt of advances from the prospective buyers. Though the assessee has produced the prospective buyer who has admitted in his statement with respect to payment of advances, but the deposition of the prospective buyers was not accepted by the revenue authorities. Since the assessee has placed all the relevant material to explain the source of deposits, it should have been accepted by the revenue.
The ld. DR, on the other hand, besides placing reliance upon the order of the CIT(Appeals) has contended that no sale of agreement was executed between the assessee and prospective buyers and in the present times nobody will make huge advances of Rs.19 lakhs without executing a sale agreement. Moreover, till date this amount was not returned back to prospective buyers. Except oral statements, no documentary evidence is placed on record by the assessee.
Having carefully examined the orders of lower authorities in the light of rival submissions, I find that though the assessee has claimed that she has received cash from the aforesaid prospective buyers, but no sale agreement has been executed, which is quite unrealistic as no one gives such a huge amount of Rs.19 lakhs as advance towards purchase of agricultural land, even without having executed the sale agreement. The assessee has projected a story that the sale could not be materialized by the assessee, therefore she relinquished her rights in favour of her brother, who has taken the responsibility of settling the dues. But no evidence has been placed on record in this regard. The statements of concerned persons who are involved in this transaction could not be recorded by the revenue authorities in order to testify their testimony. The assessee has placed only the statement of Shri Baljit Singh, though other prospective buyers are also involved who have made advances to the assessee. Even the brother of assessee was not examined. Only his confirmation was filed.
In light of these evidence, I am of the view that this issue requires further verification. Accordingly, I set aside the order of CIT(Appeals) and restore the matter to the file of the Assessing Officer with a direction to examine all concerned people who are involved in this transaction and also verify whether the advances received by the assessee was finally returned back to the prospective buyers or dues are settled in some other mode. I also direct the assessee to produce the concerned people before the AO to establish her case that in fact assessee has received advances on account of sale of agricultural land, out of which cash was deposited in the bank.
Accordingly, this appeal stands allowed for statistical purposes.
Pronounced in the open court on this 21st day of September 2016.