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Income Tax Appellate Tribunal, INDORE S.M.C.BENCH, INDORE
Before: SHRI MANISH BORAD
आदेश/O R D E R
The captioned appeal is directed against the order of Ld. CIT(A) NFAC dated 11.07.2023 is arising out from the order u/s 147 r.w.s. 147 of the Income- tax Act, 1961, dated 30.11.2018 framed by Ld. ITO, Ward 1, Ratlam.
Registry has informed that there is a delay of 176 days in filing this present appeal. In support of the condonation for the delay, the assessee has filed an application alongwith an affidavit stating that the assessee is an agriculturist and came to know about the impugned order at the time when the penalty notice u/s 271(1)(c) of the Act, was served upon the assessee. It is also submitted that the assessee being a framer is a resident of a remote village, namely, Gram Chorana and there is no proper source of Page 1 of 6
Shri Bharat Singh Pawar, Gram Chorana vs. ITO Ratlam ITA No.182/Ind/2019 - Assessment year 2011-12 communication. On the other hand, the Ld. Departmental Representative
opposed the condonation of delay. I, however, considering the reasonable
cause mentioned in the application for condonation of delay and also in the
larger interest of justice, condone the delay and admit the appeal for
adjudication.
The assessee has raised following grounds of appeal :-
i. The ld. NFAC was not justified in upholding the order of the Ld. AO in view of the fact that the order passed u/s 143(3) r/w sec 147 was illegal, void, in breach of principle of natural justice. ii. That the Ld. CIT(A) erred in framing an ex-parte order in violation of principle of natural justice and without any determination on the merits of the case and hence the said order is illegal, void and without jurisdiction. iii. That on the facts and circumstances of the case and in law, the Ld. NFAC erred in confirming the addition made by the AO u/s 69A of the Act in respect of the cash deposited in bank on various dates aggregating to Rs. 21,28,000/- without appreciating the Appellant’s submissions in right perspective, particularly that the Appellant has received cash qua sale of agriculture land. iv. The Ld. NFAC and Ld. AO failed to, consider that the entire sale consideration was received and deposited on the same date and there is link between cash deposits and sales of agriculture land, as per the registered sale deed. Thus the impugned addition is required to be deleted in toto. v. The ld. AO and Ld. NFAC failed to consider that the sale proceeds of the said agricultural land are not a capital asset as per Section 2(14) of the Income-tax Act, 1961. 4. Brief facts of the case are that the assessee is an individual and does
not file income tax return. Ld. AO came across the information about the
cash deposit of Rs. 21,28,000/- in the saving bank account held in the
name of assessee with State Bank of India, Station Road, Ratlam. Based on
this information, notice u/s 148 of the Act was issued through Postal
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Shri Bharat Singh Pawar, Gram Chorana vs. ITO Ratlam ITA No.182/Ind/2019 - Assessment year 2011-12 Authorities and further notice u/s 142(1) of the Act was also issued seeking
various information about the alleged cash deposit. However, even after
repetitive notices, there was no compliance on behalf of the assessee. Ld.
AO, thus, had no option except to proceed with the best judgement
assessment u/s 144 of the Act and concluded the assessment proceedings
making addition of Rs. 21,28,000/- for unexplained cash deposit and
assessed the income accordingly.
Aggrieved, the assessee filed appeal before the Ld. CIT(A) , but except
for completing the formality of filing the appeal there was no compliance to
eight notices of hearing, which left no option with Ld. CIT(A) except to
confirm the addition made by the AO as the facts were on record that Bank
account was held in the name of the assessee and cash of Rs. 21,28,000/-
was deposited in this account. Thus, the addition made u/s 69A of the Act
was confirmed.
Aggrieved, the assessee is now in appeal before this Tribunal.
The Ld. Counsel for the assessee placed on record the paper book
containing the copy of sale deed of agricultural land situated at Gram
Panchayat, Chorana, District Ratlam, copy of Rin Pustika, copy of affidavit
of relative of purchaser, namely Babulal and Bank statement. Admittedly,
all these documents are additional evidences filed for the first time before
this Tribunal. He submitted that the assessee who is an agriculturist owned
agricultural land and out of his land holdings, he sold some portions of
land during financial year 2010-11 for a consideration of Rs. 7,02,000/- and
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Shri Bharat Singh Pawar, Gram Chorana vs. ITO Ratlam ITA No.182/Ind/2019 - Assessment year 2011-12 the consideration was received in cash. He also submitted that the land sold
is an agricultural land not falling in the category of capital asset defined u/s
2(14) of the Act and that the assessee received on-money and deposited cash
in Bank at Rs.1,000/- on 05.10.2010, Rs. 6,27,000/-pm 03.02.2011 and
Rs. 15,00,000/- on 04.02.2011. The said amount was received from Mr.
Babulal Balai, who is husband of one of the purchasers. In support, an
affidavit has also been filed. The Ld. Counsel for the assessee also submitted
that the source of alleged cash deposit is the on money received in cash and
further the gain from sale of land is not taxable because the land sold is not
a capital assets. The Ld. Counsel for the assessee placed reliance on the
following decisions :-
ACIT vs. Central Circle-16, New Delhi v. Kamlesh Kumar Rathi, New Delhi (In o 822 & 823/Ind/2018 order dated 16.5.2023. 2. ITO Ward – (1), Kochi v. Shri P. V. Abraham, Kochi (I.T.A.No. 508/Coch/2018 order dated 06/02/2019. 3. ITO, Ward 1(1), Kochi vs. Shri Abrham Varghese Charuvil, Kochi (I.T.A.No. 30/Coch/2017 order dated 26.04.2017) 4. ITO v. Dr. Koshy George, (2010) 190 Taxmann 4 (Cochin) (Mag.)
On the other hand, the Ld. Departmental Representative submitted
that the additional evidences have been filed by the assessee for the first
time and the same needs to be sent to the AO for necessary verification and
examination.
I have heard the rival contentions and have perused the records
placed before me. The assessee has challenged the finding of the Ld. CIT(A)
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Shri Bharat Singh Pawar, Gram Chorana vs. ITO Ratlam ITA No.182/Ind/2019 - Assessment year 2011-12 confirming the addition made by the AO u/s 69A of the Act for unexplained
cash deposit of Rs. 21,28,000/-. There is no dispute to the fact that the
alleged sum has been deposited in the Bank account held in the name of the
assessee with State Bank of India, Ratlam. Even after providing sufficient
opportunity, the assessee failed to file any documentary evidences before
both the lower authorities to explain the source of alleged cash deposit.
Before us, the Ld. Counsel for the assessee with the support of additional
evidences placed in the paper book had submitted that the source of cash
deposit, is the consideration alongwith on-money received from the sale of
agricultural land owned by the assessee. It has been claimed before us that
the agricultural land sold by the assessee do not fall under the category of
capital asset and that the income/gain if any arises from sale of the said
land is not liable to tax. I, however, considering the fact that the additional
evidences have been filed for the first time, therefore, the same needs to be
restored to the file of the AO for necessary verification including the claim of
the assessee that land sold during the year is an agricultural land not falling
under the category of capital assets as defined u/s 2(14) of the Act and also
to examine the correctness of the affidavit of the purchaser/relative of
purchaser claiming that “on money” has been given to the assessee over and
above the sale consideration. Ld. AO after examining these documents, if
satisfied with the claim of the assessee referred supra shall then decide in
accordance with law. Needless to mention that proper opportunity of hearing
should be provided to the assessee and assessee is also directed to remain
vigilant and not to take adjournment unless otherwise required for
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Shri Bharat Singh Pawar, Gram Chorana vs. ITO Ratlam ITA No.182/Ind/2019 - Assessment year 2011-12 reasonable cause. Accordingly, the finding of the Ld. CIT(A) is set-aside and
all the grounds of appeal raised by the assessee are allowed for statistical
purposes.
In the result the appeal of the assessee is allowed for statistical
purposes.
Order pronounced in the open court on 01.08.2024
Sd/- (MANISH BORAD) ACCOUNTANT MEMBER
Indore िदनांक/Dated : 01.08.2024 CPU/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY
Assistant Registrar Income Tax Appellate Tribunal Indore Bench, Indore
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