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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 - 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.
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 Shri Bharat Singh Pawar, Gram Chorana vs. ITO Ratlam - 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 Shri Bharat Singh Pawar, Gram Chorana vs. ITO Ratlam - 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)
Shri Bharat Singh Pawar, Gram Chorana vs. ITO Ratlam - 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 Shri Bharat Singh Pawar, Gram Chorana vs. ITO Ratlam - 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