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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI VIJAY PAL RAO & SHRI B.M. BIYANI
आदेश / O R D E R
Per B.M. Biyani, A.M.:
Feeling aggrieved by appeal-order dated 30.06.2023, passed by learned Commissioner of Income-Tax (Appeals), NFAC, Delhi, [“CIT(A)”], which in turn arises out of assessment-order dated 30.11.2018, passed by learned ITO, 1(1), Bhopal, [“AO”] u/s 143(3)/147 of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2011-12, the assessee has filed this appeal.
The background facts of the case are such that the assessee- individual filed her original return of income on 31.07.2012 declaring a total income of Rs. 87,500/- earned from rent and interest and also agricultural
Smt. Kalpana Goswami, Bhopal vs. ITO, 1(1), Bhopal AY 2011-12 income of Rs. 1,50,000/-. Subsequently the AO, on receipt of an information that the assessee had made deposits in Bank A/c, issued notice u/s 148 to re-open assessee’s case. In response, the assessee filed return repeating the original income. Thereafter, the AO issued notices u/s 143(2)/142(1) and ultimately completed assessment-order u/s 147 read with section 143(3) after making an addition of Rs. 17,97,300/- u/s 68 on account of unexplained deposits in bank a/c. Aggrieved, the assessee carried matter in first appeal before CIT(A) but did not get any relief. Now the assessee has come in next appeal before us.
The assessee filed original grounds of appeal
in Form No. 36 which basically challenged the addition of Rs. 17,97,300/- made by the AO and upheld by CIT(A) on merits. Subsequently, the assessee also filed one ‘additional ground’ through a separate sheet dated 13.02.2024 raising an issue that the AO had wrongly invoked section 68. However, during hearing before us, the Ld. AR for assessee fairly agreed to withdraw additional ground while informing that the CIT(A) has already changed the AO’s action from section 68 to 69A in Para No. 5.7 of appeal-order, hence the assessee’s grievance does not survive. Ld. DR for revenue did not have any objection against AR’s prayer to withdraw additional ground. In view of consensus by both sides, the additional ground is dismissed as withdrawn.
4. Now, we are required only to adjudicate the merit of addition of Rs. 17,97,300/- made/upheld by lower-authorities. Ld. AR carried us to the assessment-order passed by AO and submitted that when the AO confronted
Smt. Kalpana Goswami, Bhopal vs. ITO, 1(1), Bhopal AY 2011-12 assessee regarding source of deposits made in Bank, the assessee filed a reply dated 06.08.2018 stating that the deposits were made from sale consideration of a rural agricultural land, rental income and agricultural income. The assessee also submitted that she had sold a rural agricultural land (jointly owned with her sister) situated at Village Bhojpur through an agreement dated 01.08.2020 entered with Shri R.R. Awasthi, copy of the agreement is filed at page nos. 27 to 29 of paper book. Ld. AR carried us to page no. 27 of paper book to demonstrate that the land was sold for Rs. 51,21,000/- as mentioned in agreement. Thereafter, the sale-deeds of the transaction were executed in two parts, namely, (i) Sale-deed between assessee and Smt. Ritu Awasthi W/o Shri Vikas Awasthi for Rs. 19,00,000/- , copy of sale-deed at page nos. 30 to 37 of paper book; and (ii) Sale-deed of Rs. 12,50,000/- between assessee and Kumari Anjalik Awasthi D/o Shri Vikas Awasthi, copy of sale-deed at page nos. 38 to 45 of paper book. Shri R.R. Awasthi is father of Shri Vikas Awasthi which is also mentioned in the sale-deeds. Thus, the Ld. AR submitted that the actual sale of land was made for Rs. 51,21,000/- as shown in agreement but the sale-deeds were executed only for Rs. 31,50,000/- (Rs.19,00,000/- + Rs. 12,50,000/-). Ld. AR submitted that the AO has allowed credit of Rs. 31,50,000/- only in computing explainable source of deposits in bank a/c. Ld. AR submitted that when the agreement which is executed on stamp paper of Rs. 100/- and also notarized as well as witnessed, clearly shows the sale of land for Rs. 51,21,000/-, the AO must have accepted explainable source of bank
Smt. Kalpana Goswami, Bhopal vs. ITO, 1(1), Bhopal AY 2011-12 deposits to the extent of Rs. 51,21,000/-. Ld. AR submitted that it is a known fact that the purchaser always declares a lesser amount of consideration in the registered sale-deeds for his suitability but the real consideration in transactions of immovable properties is much higher.
Therefore, the actual sale-consideration of Rs. 51,21,000/- must be accepted without any second thought. Ld. AR further went on submitting that it is admitted fact that the impugned land sold by assessee was a rural agricultural land which does not fall within the definition of capital asset u/s 2(14) of the Act and that is why the resultant capital gain arising from sale has not been taxed by AO. Ld. AR submitted that the extra consideration of Rs. 19,71,000/- received by assessee in cash (i.e. difference of Rs. 51,21,000/- as per agreement and Rs. 31,50,000/- shown in registered sale-deeds) is very much a part of the sale consideration of the very same land and, therefore, such extra consideration is also not taxable as decided in several decisions of High Courts and ITAT Benches as mentioned in para No. 6 to 9 of his Written-Submission. Ld. AR submitted that the extra-consideration of Rs. 19,71,000/- is sufficient enough to cover the addition of Rs. 17,97,300/- made by AO on account of unexplained deposits in bank a/c. Therefore, the addition made by AO deserves to be deleted.
Per contra, the Ld. DR for Revenue relied upon the orders of lower authorities. He submitted that the AO has given working of explainable
Smt. Kalpana Goswami, Bhopal vs. ITO, 1(1), Bhopal AY 2011-12 sources available with the assessee and thereafter made an addition of Rs. 17,97,300/-, which is very much correct and must be upheld.
We have considered the rival submissions of both sides and perused the orders of lower-authorities as also the documents filed in the paper- book. At first, we reproduce the assessment-order passed by AO so as to understand the exact basis adopted AO for making the impugned addition of Rs. 17,97,300/-:
“6. Regarding the sources of cash deposits, the assessee has submitted vide reply filed on 06.08.2018 that amounts of cash deposits in the bank are majorly from Sales Consideration of rural agricultural land, agricultural income and the property income. During the year, she had sold jointly held agricultural land with her sister Smt. Sushma Bharti which was situated at Village Bhojpur on 19.11.2010 for Rs. 51,21,000/-. Assessee has submitted a copy of agreement dated 01.08.2010 made between Shri R.R. Awasthi (Purchaser) and Smt. Sushma and Kalapana Goswami (Sellers) in support of her claim. It is mentioned in the agreement that a cash payment of Rs. 10,21,000/- has been made and remaining amount of Rs. 41,00,000/- would be paid within 90 days of the date of registered sales deed.
Subsequently, the assessee vide a reply filed on 12.09.2018 furnished copies of two registered sales deed each dated 19.11.2010 for Rs. 19.00 lacs sold to Smt. Ritu Awasthi w/o Shree Vikas Awasthy and for Rs. 12.50 lacs sold to Ku. Anjalika Awasthi D/o Shri Vikas Awasthi, Shri Vikas Awasthi is a son of Shri R.R. Awasthi with him the assessee in joint name with her daughter had made an agreement dated 01.08.2010.
It is found mentioned in both the aforesaid registered sales deed that full payments of Rs. 19,00,000/- and Rs. 12,50,000/- have been made in cash from time to time before the execution of the sales deeds.
In compliance with a notice u/s 133(6), assessee’s bank account statement of the assessee was called for and obtained. On examination of the cash as well as through cheques as under : Date Particulars Amount 16.04.2010 Cash 49,900/- 03.08.2010 Cash 49,900/- 12.08.2010 Cheque *6,00,000/- 13.08.2010 Cheque *2,25,000/- 19.08.2010 Cash *2,22,500/- 03.09.2010 Cheque *77,500/- 21.09.2010 Cash 10,000/- 19.11.2010 Tr. Ritu Awasthi *22,00,000/- 19.11.2010 Cash *9,00,000/- 19.11.2010 Cash *9,00,000/- 20.01.2011 Cheque 79,000/- 10.03.2010 Cash 3,500/- TOTAL 52,17,300/- Total Cash amounts 21,35,800/-
Smt. Kalpana Goswami, Bhopal vs. ITO, 1(1), Bhopal AY 2011-12
Total Cheque credits 30,81,500/-
Vide a notice issued u/s 142(1) on 16.08.2010, the assessee was required to explain the nature and sources of all cheques/cash credits other than the receipts on account of sale proceeds of rural agricultural lands. In response, the assessee vide submissions filed on 12.09.2018 has explained that the asterisked cheques and cash credits in the aforesaid statement totaling Rs. 51,25,000/- are the amounts of sale proceeds of the agriculture lands sold vide two registered sales deeds dated 19.11.2010. It is, however, observed from the aforesaid both the registered sales deeds dated 19.11.2010 produced by the assessee that full payments totaling Rs. 31,50,000/- had been made in cash to the assessee. A cheques credit of Rs. 22,00,000/- received from Ritu Awasthi is not found to be mentioned in the registered sales deed dated 19.11.2010 executed in her favour. Also the cheques credits for Rs. 6,00,000/-, 2,25,000/-, 77,500/- and Rs. 79,000/- are found to be not mentioned in any of the two registered sales deeds produced by the assessee nor in the agreement dated. 01.08.2010 made with Shri R.R. Awasthi. Hence, the assessee’s submission as to the cash and cheques credits is not fully satisfactory and hence, not acceptable.
Assessee is having sources of income from house property and agricultural income only other than sale proceeds received on sale of agricultural land through cash and cheques. The assessee has, however, failed to furnish fully satisfactorily explanation and evidences. The cheques and cash credits are mainly related to sale proceeds of agricultural land other than small amounts of cash income from house property and agricultural income. Total cash receipts from the assessee’s known sources of income are summarized as under :- 1. House property income Rs. 1,20,000/- 2. Agricultural Income Rs. 1,50,000/- 3. Cash Sales proceeds Rs. 31,50,000/- Rs. 34,20,000/- As against total receipts of Rs. 34,20,000/- from known sources of assessee’s income, there are found to be total cheques and cash credits of Rs. 52,17,300/-in her bank account statement including two cash credits of huge amounts each of Rs. 9,00,000/- and an unexplained cheques credit of Rs. 22,00,000/- from Smt. Ritu Awasthi which the assessee could not satisfactorily explained. Hence, a difference of unexplained cash credits of Rs. 17,97,300/- is added to the returned income of the assessee u/s 68 of Income-tax Act, 1961. Penalty proceeding u/s 271(1)© is also initiated on this ground.” [Emphasis supplied] 7. On perusal of assessment-order as extracted above, we find that the AO has noted date-wise full details of the aggregate deposit of Rs. 52,17,300/- made by assessee in bank account in a tabular format.
Thereafter in Para No. 9, just below that table, the AO has noted that the registered sale-deeds mention that entire consideration of Rs. 31,50,000/-
Smt. Kalpana Goswami, Bhopal vs. ITO, 1(1), Bhopal AY 2011-12 had been paid in cash. The AO has further noted that the cheque deposits of Rs. 22,00,000/-, 6,00,000/-, 2,25,000/-, 77,500/- and Rs. 79,000/- made in bank a/c are neither mentioned in registered sale-deeds nor in agreement, therefore assessee’s submission is not satisfactory and acceptable. Thus, the AO has also raised a serious objection on the source of cheque deposits in bank a/c which are not corroborated by sale- deed/sale-agreement. Ultimately, in Para No. 10 of assessment-order, the AO has made a mathematical exercise to work out unexplained portion of bank deposits at Rs. 17,97,300/- by picking figure of cash-receipt of Rs. 31,50,000/- as reflected in sale-deeds. Interestingly, the assessee is also not presenting full and correct picture of receipts from buyers of land and only trying to harp on a point that the sale consideration of Rs. 51,21,000/- noted in sale-agreement should be taken for computing the explainable source. We find that both sides, the AO and assessee, are moving around the circle without exactly finding the source of specific deposit-entries in bank a/c. For example, when there are cheque deposits in bank a/c, there should not be any difficulty in ascertaining the sources thereof. Just by a cursory look of hand-written notings on Page No. 2 of sale-agreement (Page No. 28 of Paper-Book), scanned and re-produced below, we find that there are notings of cheques of Rs. 2,25,000/- and Rs. 6,00,000/- having been given/received between parties which resemble to the cheques noted by AO in Tabular Format:
Smt. Kalpana Goswami, Bhopal vs. ITO, 1(1), Bhopal AY 2011-12
Smt. Kalpana Goswami, Bhopal vs. ITO, 1(1), Bhopal AY 2011-12 Therefore, we find that there is a necessity of proper explanation by assessee and careful scrutiny by AO to ascertain true position and arrive at a correct conclusion. Ld. AR for assessee has also made following submission in Point No. 10 of his Written-Submission:
“10. That, it shall also be imperative to submit that the learned
Assessing Officer had made the above said addition without confirming the fact of payments made by the purchaser of land directly from the purchaser, despite there being a specific request for the same by the assessee , which portrays the slack manner in which the said addition has been made by the learned Assessing Officer and sustained by learned Commissioner (Appeals).”
Therefore, we are of the considered view that in the present case, it is necessary that the AO makes an apt adjudication of all deposit-entries in bank a/c and the assessee also provides full details of each deposit-entry so that a proper conclusion can be drawn. Hence, this matter should go back to the file of AO. We, therefore, remit this issue back to AO for afresh adjudication after giving necessary opportunities to assessee and the assessee is also directed to make proper and adequate submissions to AO so that unnecessary litigation is avoided.
Smt. Kalpana Goswami, Bhopal vs. ITO, 1(1), Bhopal AY 2011-12
8. Resultantly, this appeal is allowed for statistical purpose.
Order pronounced in open court on 26.02.2024