JYOTI GOYAL,BHOPAL vs. DCIT-1(1), BHOPAL

आदेश / O R D E R

Per B.M. Biyani, A.M.:

“(1) That on the facts and in the circumstances of the case of the assessee the Ld. CIT(A), Delhi, was not justified in holding that the initiation of proceedings u/s 148 and subsequent order passed are legal and valid.

Jyoti Goyal, Bhopal AY 2012-13 (2) That on the facts and in the circumstances of the case of the assessee the Ld. CIT(A), Delhi, was not justified in confirming disallowance of addition of Rs. 90,75,000/- invoking provision of section 56(2)(vii) and or 28(iv) of the Act. (3) That on the facts and in the circumstances of the case of the assessee the Ld. CIT(A), Delhi, was not justified in confirming disallowance of addition of Rs. 50,25,000/- towards cash deposited in bank under section 69 treating the same as unexplained deposit. (4) That on the facts and in the circumstances of the case of the assessee the ld. CIT(A), Delhi, was not justified in confirming disallowance of addition of Rs. 15,50,000/- towards cash received by assessee treating the same on unexplained cash.”

Ultimately, the AO completed assessment u/s 147 r.w.s. 143(3) vide order dated 30.11.2019 after making certain additions. Aggrieved, the assessee carried matter in first-appeal wherein the CIT(A) granted part-relief. Still aggrieved, the assessee has come in next appeal before us.

Ground No. 1:

Jyoti Goyal, Bhopal AY 2012-13 Ground No. 2:

Further, the assessee and Shri Anchit Goyal paid part of the consideration through their post-dated cheques. Therefore, the purchase is made for consideration and it cannot be said to be without consideration; (ii) alternatively, the impugned property was a land forming part of stock-in- trade of assessee and accordingly excluded from the definition of ‘capital asset’ u/s 2(14). Therefore, it was not a ‘property’ as defined in Explanation

Jyoti Goyal, Bhopal AY 2012-13 4(d) to section 56(2)(vii)(b) and hence section 56(2)(vii)(b) is not applicable.

However, the AO rejected assessee’s twin-submissions and made addition by holding that the transaction would attract section 56(2)(vii)(b) or 28(iv). The AO’s order is extracted below:

“Regarding Land Purchase:

For the purchase of land, from the bank account of the assessee, cheques amounting to Rs. 64,45,029/- were issued. None of the cheques issued by the assessee was encashed. Therefore, the assessee did not pay any consideration for purchase of land. As per legal parlance, the term consideration in contract law refers to something of value given to someone in return for goods, services or some other promise. In the case of the assessee, the assessee has not paid any consideration for purchase of land, against which the assessee has received joint holding in land along with Shri Anchit Goyal, the market value of which stood at Rs. 1,81,50,000/-.

Therefore, the assessee has received immovable property amounting to Rs. 90,75,000/- without consideration.

The assessee has contended that Rs. 3,75,000/- has been paid by her father in law. The assessee claimed that in such circumstances, the purchase cannot be said without consideration.

The contention of the assessee has been considered. It is true that some consideration has been paid by Shri Prahlad Goyal, however, as per the provisions of the Act, the immovable property has been received without consideration by Smt. Jyoti Goyal i.e. no consideration has been paid by Smt. Jyoti Goyal for purchase of property.

Therefore, provisions of section 56(2)(vii) are squarely attracted in the hands of the assessee.

The assessee has contended that the assessee is dealing in real estate and land purchased is part of stock in trade of the assessee.

In this regard, the assessee has filed return of income u/s 44AD of the Act and not books of accounts have been submitted by the assessee. Even if it is accepted that books of accounts are being maintained and the land purchased is part of stock in trade of the assessee, as per section 28(iv) of the Act, the value of any benefit or perquisite whether convertible into money or not arising out of business and profession is income from business in the hands of the assessee. In this case, benefit of Rs. 90,75,000/- arose in the hands of the assessee on account of exercise of her business as no consideration was paid by her for purchase of such immovable property.

Therefore, Rs. 90,75,000/- is being added in the hands of the assessee under the head Profits and Gains of business and profession as the assessee has submitted that she is maintaining books of accounts and the property has been purchased as stock in trade.”

Jyoti Goyal, Bhopal AY 2012-13

“6.3 DECISION 6.3.1 The appellant’s submission is that (a) the property of Rs. 1,81,50,000/- is jointly purchased with her son Sri Anchit Goyal (b) the cheques paid for the same have not been encashed by the party (c) there is litigation on this property with the Bhopal Development Authority (d) that there is no benefit derived by the appellant from the purchase that is liable u/s 28(iv).

6.3.2 In this regard, the AO has considered the appellant’s submissions and taken the share of the appellant at 50% of Rs. 90,75,000/- only. The AO also considered the appellant’s submissions on how the payment was made – the appellant did not make the full payment in view of the pending litigation with Bhopal Development Authority. What the AO has argued is that the land is obtained by the appellant. Whether or not the stated development of plots are made or not, appellant has received the land as there is a registered sale-deed. When the appellant did not pay anything for receiving the land, which is shown in stock in trade, then there is a benefit accrued to appellant without payment and therefore, the AO considered the receipt of land without payment as a benefit u/s 28(iv) and brought to tax as income from business.

6.3.3 What the appellant has provided in the appeal proceedings, of writ filed and correspondence with the Bhopal Development Authority does not take away from the fact that the appellant got the land and as submitted by appellant, it is without payment. Outcome of litigation does not determine the ownership. Thus, the receipt of benefit is clear. As the said land is supposed to be part of the appellant’s business, the AO treated the same as benefit accrued liable to be taxed as income from business as per the section 28(iv). This action of the AO, is upheld.”

Jyoti Goyal, Bhopal AY 2012-13 on Page 2 and 3 of the registered-deed filed at Page 22-23 of Paper-Book.

Out of the consideration so agreed, a sum of Rs. 3,75,000/- was paid by cheque of assessee’s father-in-law Shri Prahlad Goyal/P.D. Goyal on assessee’s behalf which is mentioned in the registered-deed and also clearly accepted by AO in assessment-order itself. Further, from the details of cheques mentioned in the registered-deed, one can easily find that the cheques were post-dated as 24.03.2012 (there are 4 cheques each of Rs. 1,25,000/- dated 24.07.2010 which are not post-dated but those cheques were paid by Shri Anchit Goyal, son of assessee). So far as the non-clearing of post-dated cheques is concerned, Ld. AR submitted that though the sellers have mentioned in Para 2 / Page No. 6 of the registered-deed placed at Page No. 26 of Paper-Book that the impugned property was free from all charges, it was never sold to anybody or never litigated anywhere and it was a clean property, etc., but the fact was such that the impugned land had already been handed over by sellers to Bhopal Development Authority (“BDA”) vide agreements dated 24.11.2010, prior to purchase by assessee on 17.06.2011 because the BDA had acquired impugned land in terms of a notification dated 08.05.2009 for developing a scheme under Town Development Scheme, 2005 of Govt. Therefore, the assessee and Shri Anchit Goyal made only part-payment through cleared cheques and the rest of the payment was made through post-dated cheques to be presented at a later date. Ld. AR went on submitting further facts that as per Scheme, the BDA was required to carry out development within 2 years and handover

Jyoti Goyal, Bhopal AY 2012-13 developed plots in return. But the BDA did not carry out any development for more than 2 years and the assessee and Shri Anchit Goyal ultimately issued a legal notice dated 28.03.2013 to BDA, copy at Page No. 41-45 of Paper-Book. The names of assessee and Shri Anchit Goyal are appearing in the first page of said legal notice as parties. Further, a Writ Petition No. 17615/2016 was also filed by assessee and Shri Anchit Goyal to Hon’ble High Court of Madhya Pradesh against BDA, copy at Page No. 32-39 of paper-book. Thus, from these clinching evidences, it is clearly evident that the impugned property was not clean and free from encumbrance though it was so stated by sellers in registered-deed. Ld. AR made an assertion standing at the Bar that the BDA has not developed the Scheme even till now. Thus, in these circumstances, the assessee and Shri Anchit Goyal made payment through post-dated cheques and those cheques are also not cleared till now. Ld. AR submitted that ultimately depending upon development of scheme by BDA or outcome of the Writ Petition by Hon’ble High Court, the assessee shall be either making payment as agreed to the sellers or otherwise the deal itself would be cancelled. Therefore, it is not a case of purchase ‘without consideration’ in terms of section 56(2)(vii)(b) nor there is any benefit to assessee in terms of section 28(iv). Ld. AR submitted that the revenue authorities have branded the transaction done by assessee as ‘without consideration’ merely because the cheques given by assessee were post-dated and not cleared but the authorities have ignored the underlying facts as narrated. Ld. AR submitted that how could the sellers

Jyoti Goyal, Bhopal AY 2012-13 give a property having value as high as Rs. 1,85,00,000/- to the assessee and Shri Anchit Goyal without consideration, is a question to be thought by authorities before making addition?

Therefore, the deal of purchase undertaken by assessee cannot be said to be ‘without consideration’.

Jyoti Goyal, Bhopal AY 2012-13

Jyoti Goyal, Bhopal AY 2012-13 Further, the sellers have acknowledged receipt of full consideration through aforesaid cheques in Para No. 3 of the registered-deed. The second undisputed fact is such that the impugned property had, prior to purchase by assessee, been taken over by BDA from the sellers for development of a scheme in terms of Government rules. It is further manifest from the evidences placed that the BDA has not developed scheme and therefore the assessee has given a legal notice to BDA and also filed a Writ Petition before Hon’ble High Court. From these facts and documents, firstly it is clear that the assessee has not only agreed consideration with the sellers but also paid the same through cheques and secondly there is a merit in assessee’s submission that part of the cheques given to the sellers have not been cleared for payment because of the litigation or uncertainty attached with the property. Hence, the assessee is very much correct in claiming that it cannot be said to be a case of purchase ‘without consideration’. The assessee’s claim gets further strength from the assertion by Ld. AR that in the event the decision of High Court or BDA does not materialize in favour of assessee, there would be cancellation of deal only and still if the assessee keeps the deal, the assessee would necessarily release the amounts of post- dated cheques to the sellers. Therefore, in the situation, the purchase is made for consideration and the unpaid amount is only a ‘liability’ of assessee. Hence, without any lengthy deliberation, it can be easily concluded that the purchase done by assessee cannot be said to be ‘without consideration’. Accordingly, it is neither a case of section 56(2)(vii)(b) nor of Jyoti Goyal, Bhopal AY 2012-13 section 28(iv) as perceived by the lower-authorities. Hence, the addition made by AO and confirmed by CIT(A) is not justified. We, therefore, delete the addition made by AO. This ground is allowed.

Ground No. 3:

When the AO show-caused assessee to explain the withdrawals and deposits, the assessee filed a cash-book and claimed that the cash withdrawn from Bank of India was deposited in Central Bank of India. The assessee further explained the necessity of withdrawal and re-deposit due to cheques issued from another bank. However, the AO rejected assessee’s submissions by observing that (i) the cash-book is not a sufficient evidence to show that the deposits were made out of withdrawals, (ii) the quantum of deposits is not same as the quantum of withdrawals, (iii) there was a time-

Jyoti Goyal, Bhopal AY 2012-13 lag between deposits and withdrawals, (iv) the deposits and withdrawals did not commensurate with the turnover and gross-profit declared by assessee and (v) the assessee has not submitted evidence of any transaction for which she was necessitated to issue cheques from another bank a/c. With these observations, the AO stated “Therefore, considering the above, the rationale of the assessee for withdrawals and deposit of cash in the bank account does not appear to be that of a prudent and rational person”. Ultimately, the AO de-linked the withdrawals and deposits and made additions on both counts i.e. (i) addition of Rs. 80,80,125/- qua cash-withdrawals and (ii) addition of Rs. 50,25,000/- qua cash-deposits.

“5.3.2 Coming to the merits of the issue, the AO has simply added the cash withdrawals from the bank account. The withdrawals are from the deposits into the bank account and therefore, are not unexplained. If the deposits are not explained or sources not brought to tax, the AO has not discussed the same. Further, under what section of the IT Act, is withdrawal of cash from bank account taxable, is also not mentioned by the AO.” However, the CIT(A) upheld addition of Rs. 50,25,000/- qua cash-deposits by passing following order:

“7.3.1 The AO’s main argument is that the cash withdrawn from one bank account cannot be considered as the source of cash deposit into another account in view of the lag between the dates, i.e. cash withdrawn is not immediately deposited into another account. On the other hand, the appellant only relied on its cash book, stating that books have not been rejected. 7.3.2 In this case, the appellant has relied on cash book, but has not produced the same to the appellate authority. No explanation of the cash deposits is also given. The AO has rejected the cash book as the basis. There is no merit in appellant’s argument that if a cash book is there, the same is to be accepted. As the Apex Court observed in case of Devas Multimedia P. Ltd. vs. Antrix Corpn. Ltd. & Anr. In civil appeal No. 5906 of 2021 SCC online Del 1608 2023 that the chartered accountants qualify their

Jyoti Goyal, Bhopal AY 2012-13 statements with riders such as ‘according to the information and explanation gives to us in the course of our audit’ or ‘to the best of our knowledge and belief and according to the information and explanations given to us’. Thus, the audit report does not become the gospel truth. On the veracity of audited books of accounts, the Hon'ble Supreme Court held that “It has been held repeatedly by the court that entries in the books of accounts are not determinative or conclusive and the matter is to be examined on the touchstone of the provisions contained in the Act.” The judgements referred to by the court were its previous decision in case of Kedarnath Jute Mfg. Co. Ltd. V. CIT (1971) 82 ITR 363 (S.C.), Sutlej Cotton Mills v. CIT (1979) 116 ITR 1 (S.C.), Tuticorin Alkali Chemicals and Fertilizers Ltd. V. CIT (1997) 227 ITR 172 (S.C.) and United Commercial Bank v. CIT (1999) 240 ITR 355 (S.C.). Thus, mere existence and audit of books of accounts does not mean the same are to be accepted as they are.

7.3.3 In this case, the veracity of the books is highly questionable when the appellant has no audited books and in fact, is declaring income u/s 44AD. The other argument is that the AO did not reject the books. There is no need for the AO to pass specific observations on rejections of books and estimation of income, as the income is returned by the appellant on basis of 44AD without the books of accounts. When AO did not accept the cash book as explaining the cash deposits, the rejection of the stated books is evidence and as the income is already on estimated basis, there was no necessity to mention the estimation of income again.

7.3.4 The appellant has not provided any explanation of the said sources for the cash deposits nor provided the cash book to the appellate authority. In the current case, the appellant has not offered a satisfactory explanation to the AO on the cash deposits into the bank account and hence, the addition to income u/s 69A is correct. In respect of section 69A, where the burden of proof lies, has been laid down by the Hon'ble Apex Court in the case of Chuharmul v. CIT (1988) 38 Taxman 190 (S.C.) / (1988) 172 ITR 250 (S.C.), wherein it was stated that once a person is in possession of the stated money, the burden of proof is on him to show he is not the owner. The Hon'ble Court laid down as under :-

“6….. There is a contention was raised that the provision in section 110 where a person was found in possession of anything, the onus of proving that he was not the owner was on the person who affirmed that he was not the owner, was incorrect and inapplicable to taxation proceedings. This contention was rejected. The Bombay High Court held that what was meant by saying that the Evidence Act did not apply to the proceedings under the Act was that the rigour of the rules of evidence contained in the Evidence Act, was not applicable but that did not mean that the taxing authorities were desirous of invoking the principles of the Act in proceedings before them, they were prevented from doing so. Secondly, all that section 110 does is that it embodies a salutary principle of common law jurisprudence which could be attracted to a get of circumstances that satisfy its condition.”

7.3.5 Thus, the court affirmed that as per the evidence act, a person in possession of anything has the onus of proving he is not the owner and that this is a common law jurisprudence which applies to taxing statute too. In this case while the assessee was acquitted under other acts finally by the courts concerned, as far as income of assessee taxable under IT Act, the court by above principle upheld the view of the revenue on taxing the assessee under section 69A. This principle was upheld by the Hon'ble Supreme Court in the case of Shashi Garg v. Pr. CIT (2020) 113 taxmann.com 93 (S.C.) / (2020) 269 Taxman 26 (S.C.), when the SLP against the Hon'ble High Court decision of upholding the Tribunal order of sustaining addition u/s 69A was dismissed. The Hon'ble High Court had held-

Jyoti Goyal, Bhopal AY 2012-13 “Burden to explain the source of cash deposit was on the appellant- assessee, who as per the finding has not been able to discharge this burden…” 7.36. This is law laid down by Apex Court that once in possession of the stated money, the burden is on the possessor as to prove he is not the owner. As the money was found with the appellant in his bank account, it is on the appellant to prove the money does not belong to him. Since this burden is not discharged by the appellant, there lies no further burden on the revenue to prove anything. Hence, the AO can make addition to the income u/s 69A. In view of the same, the addition of the AO is upheld.”

(i) That the assessee filed cash-book to AO during assessment- proceeding and copy is also filed at Page No. 66-68 of the Paper-Book.

Referring to same, Ld. AR showed that all entries of cash-withdrawals and cash-deposits are duly recorded therein. He also pointed that although the majority of transactions are such that the cash- withdrawals from Bank of India have been deposited in Central Bank of India but on a few occasions, the cash has also been re-deposited in the Bank of India itself.

(ii) He submitted that it is a choice of assessee to withdraw from one bank and re-deposit in another bank or same bank and issue cheques from other bank a/c, how the department can interfere in assessee’s decision?

(iii) He submitted that there are ‘n’ number of judicial rulings by different forums where the cash-deposits in bank a/c from cash-withdrawals made from bank a/c have been treated as explained and the additions

Jyoti Goyal, Bhopal AY 2012-13 made by assessing authority have been deleted. So far as quantum is concerned, he submitted that total cash-withdrawals made by assessee were Rs. 80,80,125/- as against which cash-deposits were Rs. 50,25,000/- only, therefore the withdrawals are more than enough for making deposits.

(iv) He submitted that the AO has not rejected assessee’s cash-book nor found any discrepancy therein.

(v) He submitted that the AO was prompted to make addition by making a wrong comparison of cash-withdrawals/deposits with turnover/ gross-profit of assessee whereas the fact is that cash-withdrawn from one bank was re-deposited in another bank or same bank. When it so, how the figures of cash-withdrawals/deposits will have any commensuration with turnover/gross-profit?

(vi) He submitted that the AO has gone to the height that he made additions for cash-withdrawals as well as cash-deposits. During first appeal, the CIT(A) has though deleted addition qua cash-withdrawals and while doing so, in Para No. 5.3.2 of his order re-produced above, categorically noted “The withdrawals are from the deposits into the bank account and therefore, are not unexplained”. But despite this, the CIT(A) has not deleted the addition of cash-deposits which is very wrong. He submitted that when the withdrawals are held to be genuine, how can the cash-deposits be unexplained?

Jyoti Goyal, Bhopal AY 2012-13

The AO has neither rejected this cash-book or cash flow statement nor pointed out any single discrepancy therein. The quantum of cash- withdrawals exceeds the quantum of cash-deposits made during the year.

The cash balance is not negative on any date. Further, there are regular withdrawals and deposits on various dates. Therefore, in the situation, when the assessee has undisputed cash-withdrawals from one bank, there is a source available for making deposits in another bank. The AO has, however,

Jyoti Goyal, Bhopal AY 2012-13 rejected assessee’s submission on certain reasons which are not substantial and more in the nature of conjecture or surmise. For instance, the AO has stated that the cash-book is not a sufficient evidence to explain that the source of deposits was the withdrawals. This itself is a vague point taken into account by AO. Then, the AO says that there is a time-gap between withdrawals and deposits or the amounts of withdrawals and deposits are not same but by raising this point, one cannot say that the money withdrawn by assessee was not available for re-deposit unless the AO could point out any other utilization of money. It is nowhere a case of AO that the assessee has utilized money for any other purpose. Even the time-gap in withdrawals and re-deposits is a few days only. Then, the AO has made comparison of turnover/profit of assessee with the quantum of withdrawals/deposits but that comparison is also wrong when the assessee claims that the moneys withdrawn were re-deposited. It is nobody’s case that the business turnover was deposited. We also agree with Ld. AR that there are numerous decisions wherein the cash-withdrawals from bank have been accepted as source for re-deposit in bank and additions have been deleted. Taking into account all these aspects, we are of the considered view that the addition made by AO and upheld by CIT(A) is not correct.

Consequently, we delete the same. This ground is also allowed. Ground No. 4: Jyoti Goyal, Bhopal AY 2012-13

During first-appeal, the CIT(A) upheld addition made by AO.

(i) Receipt of Rs. 9,00,000/- for land at Barkhedi + Rs. 4,00,000/- for land at Pura Chindwara:

Ld. AR firstly drew us to assessment-order and pointed that the assessee filed sale-agreements of lands at Barkhedi and Pura Chindwara under which these moneys were received but the AO rejected those agreements on the footing that they were on a plain paper and unregistered. Then, Ld. AR carried us to various pages of Paper-Book to show that the receipts shown by assessee were genuine. He firstly referred Page 14 of Paper-Book where

Jyoti Goyal, Bhopal AY 2012-13 the “Computation of Total Income” filed by assessee is submitted wherein taxable income of Rs. 15,36,745/- under the head “Income from Business or Profession” was declared by assessee. He correlated this figure of business income from Page 16 of Paper-Book where the “P&L A/c” of assessee shows Profit of Rs. 3,68,627/- from land at Barkhedi (+) Profit of Rs. 11,69,826/- from land at Pura Chindwara (-) Bank charges of Rs. 1,708/-, thus net result comes to Rs. 15,36,745/-. Thereafter, to explain the cash-receipt of Rs. 9,00,000/- for land at Barkhedi, Ld. AR carried us to Page 17 of Paper- Book where the “P&L A/c of land at Barkhedi” is filed showing three cash- receipts of Rs. 3,00,000/- each on 01.08.2011, 10.09.2011 and 25.09.2011, aggregating to Rs. 9,00,000/- from Smt. Kaviti Indra to whom the assessee sold land as well as cost of Rs. 5,31,373/- incurred by assessee, thus leaving a net profit of Rs. 3,68,627/-. Next Ld. AR carried us to Page 70-71 of Paper-Book where the unregistered agreement entered by assessee with the purchaser Smt. Kaviti Indra duly witnessed by two witnesses is filed which contains the details of the payments of Rs. 9,00,000/- made by Smt.

Kaviti Indra to assessee. These receipts are also found recorded by assessee in the cash-book filed at Page 66-68 of Paper-Book. In so far another receipt of Rs. 4,00,000/- for land at Pura Chindwara is concerned, Ld. AR carried to Page 18 of Paper-Book where the detailed “P&L A/c of land at Pura Chindwara” is filed showing receipts/receivable of Rs. 36,54,000/- from Shri Tarik to whom the assessee sold land. The sum of Rs. 36,54,000/- includes the impugned receipt of Rs. 4,00,000/- in cash on 18.10.2011 and Jyoti Goyal, Bhopal AY 2012-13 remaining portion was received through cheques or remained outstanding.

The assessee has incurred cost of land at Rs. 24,84,174/-, thus leaving a net profit of Rs. 11,69,826/-. Next Ld. AR carried us to Page 73-76 of Paper- Book where the agreement entered by assessee with the purchaser Shri Tarik duly witnessed by two witnesses is filed which contains the details of the payment of Rs. 4,00,000/- made by Shri Tarik to assessee. This receipt is also recorded by assessee in the cash-book filed at Page 66-68 of Paper- Book. By showing these documents, Ld. AR contended, that the assessee has received the sum of Rs. 9,00,000/- from Kavita Indra and Rs. 4,00,000/- from Shri Tarik for the lands at Barkhedi and Pura Chindwara respectively. Ld. AR submitted that the assessee has made this very submission before both of the lower authorities with the documents narrated. He submitted that the profit of Rs. 3,68,627/- from land at Barkhedi (+) Profit of Rs. 11,69,826/- from land at Pura Chindwara as offered by assessee in the return of income as ‘business income’ have been duly assessed by AO. He contended that when the AO has already assessed the profit resulting from sale-proceeds of the lands, how can he re-assess the cash-receipts forming part of same sale-proceeds separately? He prayed that the addition made by AO is very much wrong and must be deleted. Per contra, Ld. DR for revenue iterated the same premise as taken by AO that the agreements submitted by assessee are on plain paper as well unregistered, therefore cannot be taken as genuine. He further relied upon the order of CIT(A). We have given a thoughtful consideration to the Jyoti Goyal, Bhopal AY 2012-13 submissions of both sides. We find certain vital aspects (i) that the assessee is engaged in the business of purchase and sale of immovable properties, (ii) that the impugned cash-receipts declared by assessee are relatable to the sale of lands held by assessee, (iii) that the assessee has filed agreements for sale of lands which are duly signed by assessee, purchasers and witnesses, (iv) that the agreements contain full details of the assessee as seller, the purchasers and the receipts shown by assessee towards sale consideration, and (v) the receipts are also recorded in assessee’s cash-book. The only defect noted by AO is that the agreements are on plain paper and unregistered which is certainly a fact. But, however, we find that the assessee has shown taxable receipts and not claimed deduction of any expenditure on the basis of those agreements. Undisputably, those receipts are part of sale-proceeds of the lands and the profit resulting therefrom has been offered in assessee’s return as ‘business income’ and duly assessed by AO. Thus, the AO has not doubted the cost, sale-proceeds and profits from those lands. An additional fact in case of land at Pura Chindwara is such that the major portion of sale-proceed has been received through cheques and only a small portion of Rs. 4,00,000/- is received in cash. It is further noteworthy that the AO has not made any effort from purchasers so as to dislodge the impugned receipts declared by assessee. Therefore, in such a case, even if the sale-agreements were on plain paper and not registered but when the substantial profit arising therefrom is assessed by AO without any questioning, the impugned cash-receipts forming part of sale-proceeds

Jyoti Goyal, Bhopal AY 2012-13 giving rise to the very same profit cannot be treated as ingenuine. In any case, when the impugned receipts are part of the sale-proceeds, it amounts to double taxation of the transactions when the AO has assessed profits arising therefrom and at the same time added cash-receipts separately. This, in our considered view, is not justified. Being so, we delete the additions of Rs. 9,00,000 + 4,00,000 made by AO.

(ii) Receipt of Rs. 70,000/- on account of agreement for Godamaru:

Ld. AR drew our attention to Page 77 of Paper-Book where the assessee has filed a Ledger A/c of Shri Gorelal Newari according to which the assessee received a cash-advance of Rs. 70,000/- from Shri Gorelal Newari on 06.03.2012 against land but the same was refunded back on 10.03.2012 due to cancellation of deal. Ld. AR referred Page 85-87 where a letter dated 18.11.2019 filed by assessee to AO during assessment-proceeding is placed. In para 3(ii)(c), the assessee categorically informed to AO the same facts of advance-receipt and refund due to cancellation of deal. Further, the transactions of cash-receipt and refund are found recorded in assessee’s cash-book filed at Page 66-68 of Paper-Book. The AO has, however, made addition of Rs. 70,000/- on account of cash-receipt alone without giving any finding in assessment-order on other side of refund. We find that the addition made by AO is not in order when the assessee has refunded money back to the giver immediately within a period of four days due to cancellation of deal. Consequently, we delete the addition.

(iii) Receipt of Rs. 4,80,000 on account of advance for Badwai:

Ld. AR drew us to Page 85-87 where a letter dated 18.11.2019 filed by assessee to AO during assessment-proceeding is placed. In para 3(ii)(d) of letter, the assessee categorically informed to AO that she received advance of Jyoti Goyal, Bhopal AY 2012-13 Rs. 4,80,000/- for sale of land at Badwai but the advance was forfeited on purchaser’s failure to purchase land and the same had already been taxed in AY 2015-16. Relying upon this letter of assessee to AO, Ld. AR requested that no addition was warranted in present AY 2012-13 when the same has already been taxed in AY 2015-16. Since the point raised by assessee is a matter of record, we remit this issue back to the file of AO for verification of record of AY 2015-16 qua the claim of assessee and therefore make adjudication afresh. We direct the assessee to provide necessary assistance when called upon by AO. This issue is thus allowed for statistical purpose.

Order pronounced in open court on 20.05.2024.