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Income Tax Appellate Tribunal, DELHI BENCH ‘G’, NEW DELHI
This is an appeal by the assessee against the order dated 14.10.2014 of ld. CIT(A), Rohtak.
Following grounds have been raised in this appeal:
1. That the Ld. CIT (A) in the facts and circumstances of the case has erred in law in conforming the addition made by the Assessing Officer of Rs. 1,62,50,000/- merely by rejecting the explanation given by the appellant considering that the amount received on sales transactions of agricultural land are different than the amount deposited in Bank.
2. That the Ld. CIT(A) has committed factual error in not considering the fact that the appellant neither deposited amount of Rs. 1,57,50,000/- in the bank on 17/02/2011 or therafter nor such amount was credited in his saving bank account opened on the same date, Deposit of Rs. 1,37,25,000/- after opening various saving bank account on 17/02/2011 explained & confirmed by such depositors in their statement before the Ld. Assessing Officer out of part payment received from the purchaser before execution and Registration of Sale Deeds for which stamp papers were even purchased on 15/02/2011 but the same could not be executed and registered as the amount of total sales consideration could not be arranged by 16/02/2011.
3. That in the circumstances of the case the LD. CIT(A) has erred in law in not appreciating the Ld. Income Tax Officer had failed to prove the explanation of the appellant as incorrect. In law it is the duty of the Ld. Income Tax Officer to prove that the explanation of the assessee is not correct.
4. The order of the Ld. CIT(A) has been adversely effected due to misconstruing the facts regarding sale proceeds received regarding sale deed No 7144 Dt. 22.03.2011 at Rs.7,52,500/- against the exact amount of Rs. 75,25,000/- and has wrongly considered the total amount of the conveyance deed executed by Baljeet, Bhupinder and Sher Singh S/o Sh. Laxmi Narayan at Rs. 55,77,500/- against the exact amount of Rs. 1,23,50,000/- . By such misconstruing the facts the appeal as been wrongly dismissed against facts.
5. That the appellant craves leave to add amend or recind any ground of appeal at the time or before the hearing of the appeal.
6. That the appeal is within limitation and no admitted tax is due to be paid.
The appeal may kindly be heard and the orders of the LD. Assessing Officer as well as of the CIT(A) be quashed and cancelled.
3. From the above grounds, it is gathered that the grievance of the assessee relates to the confirmation of addition of Rs.1,62,50,000/- made by the AO.
Facts of the case in brief are that the assessee is a salaried person working with Birla Sun Life Insurance Company, Charkhi Dadri. The return of income was e-filed by him on 22.11.2011 declaring an income of Rs.2,96,270/- which was processed u/s 143(1) of the Income Tax Act, 1961 (hereinafter referred to as the Act). Later on, the case was selected for scrutiny through CASS. During the course of assessment proceedings, the AO noticed that the assessee was maintaining bank account with Oriental Bank of Commerce, Charikhi Dadri, copy of which was obtained from the bank which revealed that the assessee made cash deposits of Rs.1,57,50,000/- and Rs.5,00,000/- on 17.02.2011 in cash. However, cash entry of Rs.1,57,50,000/- was reversed on the same day. The assessee was required to explain the source of cash deposit and his statement was recorded. The assessee stated that he did not make deposit of Rs.1,57,50,000/- and that he made the deposit of Rs.5,00,000/-, the source of which would be explained lateron. However, he admitted that he had made the deposit of Rs.17,25,000/- in the account of his wife Smt. Annu, source of which was stated to be explained by 17.01.2014. Since, the assessee denied to have made deposit of Rs.1,57,50,000/-, therefore, the AO recorded the statement of banking authorities i.e. Sh. Ved Parkash, Manager on 08.01.2014. In his statement Sh. Ved Parkash, Manager stated that on 16.02.2011, the assessee Sh. Sunil Kumar Fogat came in the bank with Rs.1,57,50,000/- which were deposited in his account on 17.02.2011. However, on the same day, the assessee stated that the said amount was not his and that a sum of Rs.5,00,000/- only belonged to him. He stated that the amount to be deposited in the following accounts: Annu D/o Sh. Baljeet 01222191021544 20,00,000/- Singh Sunil Kumar Phogat S/o 01222191021544 5,00,000/- Sh. Dariyao Singh Smt. Sushila W/o Sh. 01222191021568 25,00,000/- Baljeet Sunny S/o Sh. Bhupender 01222191021551 20,00,000/- Singh Yashwanti W/o Sh. 01222191021575 50,00,000/- Bhupender Singh Veena Rani W/o Sh. Sunil 01222191021650 17,25,000/- Phogat
Accordingly, Rs.1,37,25,000/- was deposited in the aforesaid accounts and the remaining amount i.e. Rs.20,25,000/-, the assessee had taken back to his home. When the AO asked the bank manager, the details of those persons, the bank manager stated that he was not having the record of them. The AO again asked the assessee to explain the source of deposit of Rs.1,57,50,000/- and Rs.5,00,000/-. In response, the assessee vide letter dated 29.01.2014 submitted as under: “Kindly refer to the above said questionnaire dated 05- 03-2013 in the case of Sh. Sunil Kumar, Aggarwal Bhawan, Jharna Ghat, Hira Chowk, Charkhi Dadri, Bhiwani to the assessment year 2011-12. The detailed reply in reference to above said questionnaire is submitted as under:-
1. 1. Since no assets were either purchased or sold during the last two years in my individual capacity. There for the required information may kindly be treated as nil.
2. No movable or immovable property was acquired by me in my individual capacity nor any of members of my family acquired any such property in their individual hands in the last two years.
3. I, maintained bank account with the HDFC bank, which is salary account and with the Axis Bank, where my salary was received previously. Copies of Bank accounts are already on the records. The bank account with the OBC belong to my HUF which was opened after the sale of agriculture land fallen in my share after the death of my father 25 years back. Copy of bank account with the OBC is also on record. My wife also maintained bank account with the OBC Charkhi Dadri which has been opened after the sale of agriculture land of our HUF. She is also co- partner of the HUF. This account was also opened at the time of sale of agriculture land belonging to our HUF.
4. Neither any land/plot/house was sold during the last three years in my individual status. So far as question of cash deposit worth Rs. 1,62,50,000/- is concerned, necessary reply is furnished separately. Details of house hold with drawls alongwith justification thereof is submitted as under:- a) My family consists of myself, my wife, one son 4 years old & one daughter I year old as on 31 -03- 2011. b) 1 am residing in rental house belonging to Sh. Vinod Kumar in house No. 212, sector-23, at a monthly rent of Rs. 4000/-. c) During the year under consideration i.e. financial year 2010-11 relevant for assessment year 2011-12 monthly electricity bill was about Rs. 1000/- per month & telephone bills was about 1500/- per month. d) My son as on 31-03-2011 was about 4 years old and he was admitted in BPS stepping school, Bhiwani in Jan. 2011. Nominal fees charges were paid upto 31-03-2011. At that time my daughter was only I year old. e) Neither any social nor any religious function was arranged by me during that period, therefore no expenses was incurred on any function. The information may kindly be treated as nil.
I have filed my Income-tax Return for the assessment year 2011-12 through e-filing acknowledgement No. 316402920221111 dated 22-11-2011. Photocopy of the same, is on the record already furnished. At that time I was employed as Assistant Branch Manager in Max New York Life insurance Company Ltd., from where I received salary worth Rs. 3,32,320/- for which I have paid the regular income tax with the department.”
It was further submitted as under: In this regard, it is submitted that no cash deposit of Rs.1,62,50,000/- was made in my account with the OBC, Charkhi Dadri. The following family members of our family sold agriculture land worth Rs. 1,98,00,000/-on 15-02-2011 against which the full & final payment was received in the non banking hours on 16-02- 2011. My grandfather Sh. Ramji Lal has got three son namely Laxminarayan, Daryyav Singh & Sh. Jai Singh. The land in question has fallen in the hands of three brothers as stated above after the death of my grandfather near about 60 years back. The above said land has come to shares of our family, uncle family & Tau Family (elder than our father). After the death of my father near about 25 years back and in the hands of Baljeet, Bhupender, Sher Singh sons Prem and Raj Kumari daughters after the death of my tau ji 20 years back. The family tree is as under:- Shree Ramji Lal (Grand Father)
1. Laxminarain 2. Dariyao Singh 3. Vijay Singh Panmeshwari(Widow) Saroj(Widow) he is alive. Baljeet(Son) Anil Kumar (Son) Bhupender Singh(Son) Sunil Kumar (Son) Sher Singh(Son) Hemlata (Daughter) Prem(Daughter) Raj Kumar (daughter)
The agriculture land situated outside Municipal limit charkha Dadri measuring 15 Kanal 1 Maria belonging to Shri Sunil Kumar (Son) and mother Saroj (Widow) sold above said land for consideration of Rs, 75,25,000/- on 15-02-2011 full -and final payment was received in the non banking hours on 16-02-2011. The deed of conveyance was to be executed on 16-02-2011 as the stamp worth Rs.49500/- were purchased on 15-02-2011. Due to social problem with the purchaser, he requested that I am making full and final payment but the sale deed will be executed after one month. Thus the sale deed was executed on 22- 03-2011 after near about one month of receiving the full and final payment. It has been clearly mentioned in the sale deed executed on 22-03-2011. Photocopy of the sale deed is submitted herewith.
Similarly three sale deed were executed by Sh. Baljeet, Bhupender Singh, Sher Singh (Sons) and Smt. Prem and Raj Kumari(daughters). The land in question was also sold on 15.02.2011 and full and final payment was received in non banking hours on 16.02.2011. All the other facts are similar to facts of the case as mentioned above in the hands of Shri Sunil Kumar HUF. The total sale consideration in all the four sale deed is as under:
S. No. Conveyance Deed No. Amount Executed by with date 1. 7145 dt. 22.03.2011 75,25,000 Sunil and Smt. Saroj 2. 7144 dt. 22.03.2011 75,25,000 Baljeet, Bhupender Singh and Sher Singh 3. 7260 dt. 22.03.2011 36,50,000 Baljeet, Bhupender Singh, Sher Singh (Sons) Prem & Raj Kumari (Daughter) 4. 7263 dt. 22.03.2011 11,75,000 Baljeet, Bhupender Singh and Sher Singh Total Amount 1,98,75,000 Since the amount was received in the non banking hours, Sh. Kulwant is our real cousin Brother, all of us have got full faith on him, we discussed the matter in his house at Dadri how to keep this amount in safe custody. He told that bank manager of OBC is well known to him. Therefore, it was decided to carry the cash worth Rs, 1,57,50,000/- in the bank on 16-02-2011 at 5:30 PM. It was well known to us that it is non banking hours and deposit cannot be made on 16-02-2011. He was requested to keep this amount in the safe custody of the bank. Shri Raju Ranjan manager called his cashier Shri Suresh Gupta to keep this amount in the locker and locker key may be handed over to Shri Kulwant our cousin brother. On 17-02- 2011 when I reached the bank, the bank manager told me that the amount has been deposited in the name (sunil Kurnar). When I told him that the amount belonged to the above said family members and it is not my individual amount, he felt sorry and stated that he will reverse the entry. Therefore, the reverse entry worth Rs. 1,57,50,000/- was made. Neither any deposit form or withdrawal form was signed by me. Since the amount of Rs. 75,25,000/- belonged to my HUF ½ share and ½ share of my mother Smt. Saroj. Thus I opened the bank account with the OBC on 17-02-2011 and deposited Rs. 5,00,000/-. My wife is also member of my HUF a sum of Rs. 17,25,000/- was deposited in the name of Smt. Veena Rani W/o Sh. Sunil Kumar. Half of the amount which works out of Rs. 37,62,500/-. ½ share belonged to my mother Smt. Saroj, she has taken the cash and refused to the deposit the same with the bank.] Rest of the amount which works out to Rs.1,23,50,000/- belonging to the three bothers namely Shri Barjeet, Bhupender and Sher Singh and Smt. Prem and Raj Kumar(sister). Bank account in the name of Sushila W/o Sh. Baljeet (25,00,000/-) Annu D/o Sh. Baljeet(20,00,000 Yashwanti W/o Sh. Bhupender (50,00,000/-) total amount 1,15,00,000/- were deposited out of the total funds available worth Rs.1,23,50,000/-. Both the sister Smt. Prem and Smt. Raj Kumari are married1 in well settled families and they have got sufficient land in their in-laws side, they refused to carry any amount with them. Anyhow all the brothers Shri Baljeet, Bhupender and Sher Singh requested them to carry some amount to their home, therefore they agreed to carry a sum of Rs. 4,00,000/-each with them. The remaining amount of Rs. 1,15,00,000/- was deposited in the hands of family members of Shri Baljeet and Bhupender as mentioned above. Since the whole amount was received on sale of agriculture land belonging to the HUF of Shri sunil Kumar as Sh. Baljeet, Bhupender and Sher Singh was deposited in the OBC bank on 17-02- 2011 itself. Thus cash deposited worth Rs. 1,57,50,000/- has been well explained and the photocopy of all the four conveyanced deed are enclosed for your kind perusal.
Photocopy of Nakal Jamabandi year 2004-05 is enclosed with this reply. It proves that the whole agriculture land belonged to HUF of Sh. Sunil Kumar, Shri Baljeet, Shri Bhupender and Sh. Sher Singh. The said land has fallen to the hands-of above said person after the death of their father 20-25 years back. It is humbly requested that in view of the above said submission the proceeding initiated under section 142(1)/143(2) in the hands of Shri Sunil Kumar individual may kindly be dropped. Any other information/explanation if required we are ready to furnish.”
The assessee also furnished copies of the following sale deed: “i) Sale of land by the assessee and his mother Smt. Saroj for Rs.75,25,000/- on 22-03-2011 ii) Sale of land by Sh. Baljeet Singh, Bhupinder Singh and Sh. Sher Singh for Rs.75,25,000/- iii) Sale of land by Sh. Bhupinder Singh, Baljeet Singh and Sh. Sher Singh, Prem and Raj Kumari for Rs.36,50,000/- on 25-03-2011 iv) Sale of land by Sh. Baljeet, Bhupinder and Sher Singh for Rs.11,75,000/- on 25-03-2011.”
The AO after considering the submissions of the assessee observed that the land in question was sold after the deposit of Rs.1,57,50,000/- and Rs.5,00,000/- and no evidence had been filed by the assessee in regard to receipt of sale proceeds of the above land. The AO also recorded the statements of the persons in whose accounts, the amounts were deposited and observed as under: “i) Annu D/o Sh. Baljeet Singh. In the bank account of this lady, a sum of Rs.20 lacs were deposited. In her statement, Miss Annu deposed that she received a sum of Rs.20 lacs from his father out of sale proceeds of his land on 17-02-2011 which was deposited by her in the bank. She did not know the details as to when sale of land was effected particularly when she claimed that she has to do home affairs as his father is not mentally sound. ii) Smt. Sushila Devi.
In the bank account of this lady, a sum of Rs.25 lacs were deposited. In her statement, she stated that she made cash deposit of Rs.25 lacs after opening a bank account which was received from her husband after sale of land. She did not know the details of land holding, date of sale of land, as she is an illiterate lady. She only knows how to sign. iii) Sh. Sunny S/o Bhupinder Singh. He is a student of BA third year and the amount of Rs.20 lacs was slated to have been deposited by himself on 17- 02-2011 which was received from his father Sh. Bhupinder Singh out of sale proceeds of land. iv) Smt Veena Rani W/o Sunil Kumar(Assessee) Statement of Smt. Veena Rani was recorded and she stated that a sum of Rs.17,25,000/- was deposited by herself after opening the bank account on 17-02-2011 which was received from her husband Sh. Sunil Kumar after sale of his land. She did not know the details of sale consideration. v) Smt. Yashwanti W/o Sh. Bhupender Singh Her statement was recorded and she stated that she made a deposit, of Rs.50 lacs on 17-02-2011 in Oriental Bank of Commerce, Charkhi Dadri after opening the bank account and the bank account number was not remembered to her. The amount was stated to have been received from her husband Sh. Bhupinder Singh after the sale of his land.”
The AO further observed that the persons in whose accounts the cash had been deposited, stated that amounts were deposited by themselves whereas banking authorities categorically confirmed that Sh. Sunil Kumar-assessee himself made cash deposit on 17.02.2011 and lateron instructed to transfer the sum of Rs.1,57,50,000/- in the accounts of above persons after opening the bank accounts on the same day. He, therefore, was of the view that the deposits of Rs.1,57,50,000/- and Rs.5,00,000/- totaling to Rs.1,62,50,000/- remained unexplained and to be treated as income of the assessee from undisclosed sources under the provisions of Section 69A of the Act for the following reasons: “(i) The cash deposit in the bank account was made on 17-02-2011 whereas the sale, of land is after cash deposits and the assessee has failed to furnish any evidence in regard to receipt of sale proceed prior to cash deposits. ii) On 08-01-2014 when the statement of the assessee was recorded. He could not intimate the source of cash deposits in his account and in the account of his wife. At the first instance he denied to have made deposit of Rs.1,57,50,000/- and later on concocted story was made that the amounts were deposited in the account of different persons out of sale proceeds of land. Had this was a true story, the assessee could have explained this position on 08-01-2014 itself when his statement was recorded. On 08-01-2014 he could not explain the source of deposit except that it will be explained lateron.”
Being aggrieved the assessee carried the matter to the ld. CIT(A) and submitted that the AO on the basis of the statement of Sh. Ved Parkash, Manager of the bank held that the deposition made by the assessee in his statement was not true. It was further submitted that the AO recorded the statements of the persons in whose accounts, the cash was deposited and the said persons stated that money was deposited in cash after selling the agricultural land coming from their big grandfather to grandfather to their father and then in the hands of all the sellers. It was further stated that the conveyance deed duly executed by all such persons were submitted to the AO. The total sale consideration in all the sale deed was as under:
S. No. Conveyance Deed No. Amount Executed by with date 1. 7145 dt. 22.03.2011 75,25,000 Sunil and Smt. Saroj 2. 7144 dt. 22.03.2011 75,25,000 Baljeet, Bhupender Singh and Sher Singh 3. 7260 dt. 25.03.2011 36,50,000 Baljeet, Bhupender Singh, Sher Singh (Sons) Prem & Raj Kumari (Daughters) 4. 7263 dt. 25.03.2011 11,75,000 Baljeet, Bhupender Singh and Sher Singh Total Sale Consideration 1,98,75,000
It was further submitted that the AO recorded the statement of Sh. Kulwant Singh S/o Sh. Vijay Singh on 27.01.2014 who infact brought the cash worth Rs.1,62,50,000/- in the late hours on 16.02.2014. The assessee also furnished the family pedigree as under: 1 . Laxmi Narain 2. Sh. Daryao Singh 3.Sh.VijaySingh (Alive) (Deceased) (Deceased) a) Baljit Son Smt. Saroj Devi Widow Kulwant Singh (Son) b) Bhupender Son Sh. Anil Kumar Son c) Sher Singh Son Sh. Sunil Kumar Son d) Prem Kumari Hem Lata Daughter Daughter e) Raj Kumari Daughter
It was submitted that the AO disbelieved the real facts produced before him and held that a sum of Rs.1,57,50,000/- and Rs.5,00,000/- totaling to Rs.1,62,50,000/- remained unexplained and treated the same as income of the assessee from undisclosed sources. It was contended that the AO disbelieved the actual happening of the events which generally occurs during the course of sale of immovable properties. It was submitted that the amount was received on sale of agricultural land situated outside municipal limits of Charkhi Dadri, the deed of conveyance was to be executed on 16.02.2011 and all the stamp papers were purchased on 15.02.2011 which was proved by the conveyance deed itself which was to be executed on 16.02.2011 but due to certain problems with the purchasers who requested that the sale deed would be executed lateron, but full and final payments was made to the sellers and the deed was executed on 22.03.2011 nearly about 34 days of making the full and final payment. It was contended that the AO never required any evidence in support of his disbelieving the assessee’s statement and that inspite of producing all the conveyance deeds during the course of assessment proceedings, it was brought to the kind notice of the A.O. by the assessee that the amount did not belong to him and he had never deposited the same with O.B.C. Charkhi Dadri on 17.02.2011. It was submitted that the AO himself had written a letter to the manager OBC Charkhi Dadri u/s 133(6) of the Act and the bank manager furnished the certificate as under: "TO WHOM IT MAY CONCERN IT IS CERTIFIED THAT SH. SUNIL KUMAR PHOGAT S/O DARYAO SINGH R/O HEERA CHOWK NEAR AGGARWAL BHAWAN, CHARKHI DADRI DISIT BHIWANI IS MAINTAINING A SAVING ACCOUNT NO 01222191021520 WITH US AND AS ON 17.02.2011, A SUM OF RS. 15750000/- HAS BEEN WRONGLY CREDITED AS CASH DEPOSITED IN ACCOUNT AND SAME CASH ENTRY HAS ALSO BEEN REVERSED FROM THE ACCOUNT AS CASH PAYMENT FOR SAME AMOUNT ON SAME DAY.
ORIGINAL CERTIFIED COPY IS ENCLOSED."
It was contended that the cash deposit of Rs.1,62,50,000/- was on account of sale of agricultural land of HUF coming from the forefathers of the family. The assessee also furnished photocopy of intkal varasat through which the land had fallen in the hands of Sh. Sunil Kumar, Sh. Anil Kumar S/o Dariyao Singh, Hemlata D/o Sh. Daryao Singh and Smt. Saroj Bala W/o Sh. Daryao Singh alongwith nakal jamabandi and khasra girdawri. It was also stated that agricultural land of HUF coming from forefather had fallen in the hands of Sh. Baljeet Singh, Sher Singh, Bhupender S/o Laxmi Narain and Smt. Prem and Raj Kumari D/o Sh. Laxmi Narain. Photocpy of intkal varasat vide report No. 396 dated 12.08.1989 was also furnished. It was contended that the banking authority himself admitted in writing vide certificate dated 27.12.2013 that the cash entry was wrongly credited in the account of Sh. Sunil Kumar (assessee), but the same was reversed from his account as cash payment for the same amount on the same day and that the FDR worth Rs.1,37,25,000/- in different names were made as admitted by the bank manager during the course of his statement recorded on 08.01.2014. It was also contended that in his statement , the assessee duly affirmed that the amount worth Rs.1,62,50,000/- was not deposited by him in his account but the banking persons have deposited the same in his account under some mistaken belief. It was stated that he had deposited a sum of Rs.5,00,000/- in his account in cash and the evidence of the same would be produced within a week’s time. It was contended that the assessee stated the real facts before the AO during the course of assessment proceedings and that in his statement it was stated that amount did not belong to him but belonged to several persons of his family. It was submitted that he would explain the source of deposit and the complete details of the persons to whom it related would be explained within weeks time. It was also submitted that thereafter the AO required the assessee vide order sheet entry dated 27.01.2014 to produce all the six persons by whom the money was received on account of sale of agricultural land belonging to HUF and all the persons were produced on 29.01.2014. The AO recorded their statements in which all of them stated that the money was received on account of sale of agricultural land coming from their forefathers. It was also stated that neither any cash voucher worth Rs.1,57,50,000/- nor any withdrawal form for this amount was filled up by the assessee or signed by him. So, it was a clear cut banking mistake which had occurred on 17.02.2011 and rectified on the same day by the banking authorities itself and that while forwarding the AIR information, the banking authorities had forwarded the same to the Income Tax department and it had become the selected case for scrutiny under CASS. The assessee also furnished the bank certificate in original dated 01.08.2014. It was further submitted that the assessee in his individual capacity was earning salary of Rs.3,00,000/- per annum, so it was not possible for him to deposit such a huge amount in his individual capacity and that the AO while framing the assessment merely relied upon some portion of the statement recorded by him of the assessee and bank manager Sh. Ved Parkash but ignored the second part of their statements as well as the certificate issued by the banking authorities in this regard. It was contended that the sale considerations in the cases of immovable properties are generally received in cash prior to the date of execution of the conveyance deeds to safeguard the interest of the seller as well as the purchaser. It was also contended that it was categorically mentioned on the first page of the conveyance deed that the full amount had already been received by the sellers at their house before the date of execution of sale deed and that the payment had been received in full and nothing remained receivable by the seller and that the conveyance deed would be executed as and when it suited the sellers as well as the purchaser. The reliance was placed on the judgment of the Hon’ble Supreme Court in the case of CIT Vs Chinnathamban K (2007) 292 ITR 682.
It was submitted that in this case, the banking authority wrongly deposited a sum of Rs.1,62,50,000/- in the name of the assessee on 17.02.2011 and reversed the entry suo motu without any direction of the assessee. On the same day FDR’s were purchased in the name of six persons. The assessee also furnished the following documents before the ld. CIT(A): “i) ITOs letter dated 09-12-2013. ii) Bank Manager letter in response to the above letter dated 27-12-2013. iii) ITOs letter dated 08-01-2014. iv) Bank Manager letter in response to the above letter dated 29-01-2014. v) Photocopy of statement of Sh. Sunil Kumar assessee dated 08-01-2014 recorded by the Ld. AO. vi) Photocopy of statement of Sh. Ved Parkash Branch Manager dated 08-01-2014 recorded by the AO. vii) Photocopy of statement of Smt. Yashwanti W/o Sh. Bhupender Singh, Sunny S/o Sh. Bhupender Singh, Smt. Veena Rani W/o Sh. Sunil Kumar, Sushila Devi W/o Sh. Baljeet Singh, Miss Anu D/o Sh. Baljeet Singh. viii) Photocopy of all the four conveyance deed dated 22-03-2011. ix) Photocopy of Intkal Varasat of Late Sh. Daryao Singh dated 29-04-1986 and Late Sh. Laxmi Narain dated 09-09-1989. x) Photocopy of cash deposit voucher dated 17-02-2011. xi) Photocopy of statement of Sh. Kulwant Singh dated 27-01-2014 recorded by the AO who carried on the cash worth Rs. 1,57,50,000/- to the bank on 16-02-2011 after the banking hours. xii) Photocopy of the letter from the Manager OBC Charkhi Dadri dated 01-08-2014 in which the banking authority has categorically admitted that neither any credit voucher nor any debit voucher for above both entries was filled up & signed by the depositor. xiii) English Translation of statement of Sh. Sunil Kumar, Sh. Ved Parkash, Sh. Kulwant Singh, Miss. Anu, Smt. Sushila Devi, Smt. Yashwanti, Sh. Sunny & Smt. Veena Rani.”
The ld. CIT(A) after considering the submissions of the assessee observed that it was incomprehensible as to how and why the Oriental Bank of Commerce, Charkhi Dadri branch accepted a sum of Rs.1,57,50,000/- in cash on 17.02.2011 deposited the same in the account of Sh. Sunil Kumar and reversed the said entry on the verbal request of the customer, Sh. Sunil Kumar. The Branch Manager, vide a letter dated 29.01.2014 has stated that the photocopy of the withdrawal form was not available because it was a verbal request and that as per the said verbal request of Sh. Sunil Kumar a sum of Rs.1,37,25,000/- was credited in the names of Sh. Sunny s/o Sh. Bhupinder Singh (Rs 20,00,000), Smt. Yashwanti w/o Sh. Bhupinder Singh (Rs 50,00,000), Sh. Sunil Kumar Phogat s/o Sh. Daryao Singh (Rs 5,00,000), Smt. Veena Rani w/o Sh. Sunil Phogat (Rs 17,25,000), Smt. Susheela w/o Baljeet Singh (Rs 25,00,000) and Ms Annu d/o Baljeet Singh (Rs 20,00,000). The Bank also stated that they had no record of the balance amount of Rs 20,25,000/-. According to the ld. CIT(A), the entire transactions appeared to be a method to hoodwink the tax department with the help of banking instruments and that no bank would accept cash without a deposit slip nor make transactions entries on verbal requests. He also observed that the statements of Sh. Sunil Kumar had a query which made it clear that he took the cash of Rs.1,57,50,000/- to the bank on 16.02.2011 and the bank authorities asked to deposit the same the next day, Sh. Sunil Kumar opened an account on 17.02.2011 and this entire amount was deposited in his account, within a span of a few hours, he got entry reversed by stating that the amount did not belong to him alone and interestingly, Smt. Veena Rani, Sh. Sunny, Smt. Yashwanti, Smt. Susheela Devi, Miss Annu and the assessee all opened their accounts in this bank on 17.02.2011. The ld. CIT(A) confirmed the addition of Rs.1,62,50,000/- by observing as under: “The appellant claimed that this was out of sale proceeds of agricultural land held by the HUF. What is strange is that the said sale deed was executed on 22.03.2011, a month after the said amount was deposited according to the appellant, the total sale consideration received was Rs.1,98,75,000/-. The original constituent of the HUF owing the said land were 3 brothers, Laxmi Narayan (deceased), Daryao Singh (deceased) and Shri Vijay Singh. Again, the apportionment of the sale proceeds should have been equal amongst their successors. However, it is seen that out of the four sale deeds executed, the said property was sold in the following manner:-
S. No. Conveyance Amount Executed by deed No. with date
7145 dt. 22.03.11 7525000/- Sunil & Smt. Saroj 2. 7144 dt. 22.03.11 752500/- Baljeet, Bhupender Singh & Sher Singh 3. 7260 dt. 25.03.11 3650000/- Baljeet, Bhupender Singh & Sher Singh (sons) 4. 7263 dt. 25.03.11 1175000/- Baljeet, Bhupender Singh & Sher Singh Total Sale consideration 19875000/- The total amount on the conveyance deed executed by Baljeet, Bhupender & Sher Singh Ss/o Laxmi Narayan comes to Rs 55,77,500/- and that executed by Sunil and his mother Smt. Saroj was Rs 75,25,000/-. The family tree has been stated to be in the following order:
Sh. Ramji Lal s/o Sh. Kishan Lal 1. Laxmi Narain 2. Sh. Daryao Singh 3. Sh. Vijay Singh (deceased) (deceased) (alive) a) Baljit (son) Smt. Saroj Devi (widow) Kulwant Singh (son) b) Bhupender (son) Sh. Anil Kumar (son) c) Sher Singh (son) Sh. Sunil Kumar (son) d) Prem Kumari Hem Lata (daughter) (daughter) e) Raj Kumari (daughter)
What is again abnormal is the fact, that it was Shri Kulwant Singh s/o Sh. Vijay Singh, a cousin of the appellant who received the cash. The apportionment of cash shows that the total deposit in the accounts of the wife and daughter of Shri Baljeet Singh was Rs 45,00,000/-(Rs 25 lakhs and Rs 20 lakhs), for the wife and son of Shri Bhupinder Singh it was Rs 70,00,000 (Rs 20 lakhs plus Rs 50 lakhs) and for the appellant and his wife, it was Rs 22.25 lakhs (Rs 5 lakhs plus Rs 17.25 lakhs). Out of the balance amount, according to Shri Kulwant Singh son of Shri Vijay Singh and a cousin of the assessee Rs 20,25,000/- in cash went to Sh. Sher Singh, another son of Shri Laxmi Narain and brother of Sh. Bhupinder and Sh. Baljeet Singh. It is strange that no money went to Shri Anil Kumar, brother of the appellant nor to the appellant's, surviving uncle, Shri Vijay Singh and the latter's son, Shri Kulwant Singh.
This does not appear to be truly accounting for what were the proceeds of the sale of the HUF land. Hence, the property sold by the HUF in actual fact, registered conveyance deed, not withstanding, has nothing to do with the amount deposited in the appellant's bank account. All the transactions in respect of HUF land are distinct and separate from the sources of deposits of Rs 1,57,50,000/- and Rs 5 lakhs made in the appellant's bank account. Hence, the explanation offered by the assessee has no substance or relevance to the source of deposits. I, therefore, confirm the addition of Rs 1,62,50,000/-.”
Now the assessee is in appeal. The ld. Counsel for the assessee reiterated the submissions made before the authorities below and further submitted that the amount was belonging to six persons who were having the bank accounts and names of all the persons were appearing in the conveyance deed. It was further submitted that the property sold belonged to the HUF but the amount was wrongly deposited by the bank authorities in the account of the assessee and when they came to know the mistake, the said entry was reversed on the same day and deposited in the name of the persons to whom the amount belonged. A reference was made to page no. 51 of the assessee’s paper book which is a certificate given by the bank manager. It was further submitted that the property was sold on 15.02.2011 which is evident from the date mentioned in the stamp papers used in conveyance deed. A reference was made to page no. 56 of the assessee’s paper book. It was stated that the amount was received by the coparceners of HUF on 16.02.2011 and this fact has been mentioned in the sale deed also wherein it is written that the amount was received by the sellers at home and not at the time of registration of the conveyance deed which took place on 22.03.2011, therefore, the allegation of the AO that the amount in question was not relating to the sale deed was not maintainable, particularly when, this facts was clearly mentioned in the conveyance deed that the stamp papers were purchased on 15.02.2011 and the amount was received at home and nothing was to be paid at the time of registration. In support of the above contention, a reference was made to page nos. 56 & 57 of the assessee’s paper book which is the copy of the conveyance deed. The ld. Counsel for the assessee also referred to the statement of Sh. Kulwant Singh (copy of which is placed at page nos. 71 to 74 of the assessee’s paper book), and stated that he went to the OBC Bank on 16.02.2011 for depositing the amount which was received by him in late evening and the said amount was relating to Sh. Bhupender Singh, Sh. Baljeet Singh, Sh. Shre Singh, Smt. Prem and Smt. Raj Kumari who sold their 7.5 acres of land and Sh. Kulwant Singh is their cousin i.e. son of their uncle. It was contended that the amount in question was wrongly added in the hands of the assessee, even when facts were very much clear from the conveyance deed, statements of the bank manager as wll as Sh. Kulwant Singh. Therefore, the addition made by the AO and sustained by the ld. CIT(A) was not justified.
In his rival submissions, the ld. Sr. DR strongly supported the orders of the authorities below and further submitted that the amount was deposited in the bank account of the assessee, so , onus was on him to prove the sources of the said deposit which could not be explained. It was also stated that the amount was not co-related with the amount mentioned in the sale deed, therefore, the AO was justified in making the impugned addition in the hands of the assessee and the ld. CIT(A) rightly confirmed the same.
We have considered the submissions of both the parties and perused the material available on record. In the present case, it is noticed that the AO made the addition by presuming that the cash deposited in the O.B.C, Charkhi Dadri, on 17.02.2011 belonged to the assessee. On the contrary, the explanation of the assessee was that the said cash was brought to the bank by Shri Kulwant Singh and it belonged to six different persons who sold their ancestral agricultural land. In the present case, the AO recorded the statement of Shri Kulwant Singh (copy of which is placed at page no. 71 to 74 of the assessee’s paper book), in the said statement recorded on 27.01.2014, Shri Kulwant Singh categorically stated that he want to the Oriental Bank of Commerce, Charkhi Dadri branch after the banking hours on 16.02.2018 to deposit a sum of Rs. 1,62,50,000/- which belonged to Shri Bhupender Singh, Shri Baljeet Singh, Sher Singh, Shri Sunil Kumar, (the assessed) and Smt. Prem who sold 7.5 acres of land and gave the money to him for depositing the same. He also stated that he is a son of the uncle of the assessee. He also stated that he went to bank on 17.02.2011 and requested the manager to open the accounts of Smt. Sushila wife of Shri Baljeet Singh, Ms. Annu daughter of Shri Baljeet Singh, Sh. Sunny Son of Bhupinder Singh, Smt. Yashwanti, wife of Sh. Bhupender Singh, Sunil Kumar, son of Shri Daryao Singh, Which is evident from page no. 72 and 73 of the assessee’s paper book. Shri Kulwant Singh also stated that a sum of Rs. 1,42,25,000/- was deposited in the account of the following persons :- 1. Sh. Sunil Kumar S/o. Sh. Daryao Singh Rs. 5,00,000/- 2. Smt. Yashwanti W/o. Sh. Bhupender Singh Rs. 50,00,000/- 3. Sh. Sunny S/o. Sh. Sh. Bhupender Singh Rs. 20,00,000/- 4. Smt. Veena Rani W/o. Sh. Sunil Kumar Rs. 17,25,000/- 5. Annu D/o. Sh. Baljeet Singh Rs. 20,00,000/- 6. Smt. Sushila W/o. Sh. Baljeet Singh Rs. 25,00,000/- 1,37,25,000/- The remaining amount of Rs. 20,25,000/- was given to Shri Sher Singh, son of Shri Laxmi Narain, Sub-inspector in the S.P.Office and that the said amount was given to him as was told by Shri Bhupender Singh. Therefore, it is crystal clear that the assessee Shri Sunil Kumer did not bring the amount in the bank as alleged by the A.O., moreover no bank deposit slip was brought on record to substantiate that the amount in question was deposited by the assessee in the bank. In the instant case, the AO also recorded the statements of all the aforesaid persons (copies of which are placed at page no. 79 to 89 of the assessee’s compilation), in their statements, all the persons confirmed that the above said amount belonged them which was received on the sale of ancestral property. It is also noticed from the Conveyance Deeds (copies of which are placed at page no. 56 to 66 of the assessee’s paper book) that the stamp papers were purchased on 15.02.2011 and the amount was given to the sellers at their residences. It has also been mentioned in those conveyance deed registered on 21.03.2011 that the possession of the land was given prior to the registration done on 21.03.2011 on the said date, nothing was due because the amount was already paid so it can be said that the amount in question was the receipt from the sale proceeds of the agriculture land. In the present case, the AO also recorded the statement of the bank managers (copy of which is placed at page no. 52 to 54 of the assessee’s paper book), in the said statement, Bank Manger Sh. Ved Prakash stated that he went to income tax office with record on 31.12.2013 in response to the summon dated 23.12.2013 and that the amount was deposited in the account of Shri Sunil Kumar on 17.02.2011 but later on, in the evening the entry was reversed and the amount was deposited in the following accounts :-
(i) Annu, D/o. Sh. Baljeet Singh 012221911021044 20,00,000/- (ii) Sh. Sunil Kumar Phogat 01222191021520 5,00,000/- S/o. Sh. Dariyao Singh (iii) Smt. Sushila 01222191021568 25,00,000/- w/o. Sh. Baljeet (iv) Sunny 01222191021551 20,00,000/- S/o. Bhupender Singh (v) Yashwanti 01222191021575 50,00,000/- W/o. Sh. Bhupender Singh (vi) Veena Rani 01222191021650 17,25,000/- W/o. Sh. Sunil Phogat
In the instant case, nothing is brought on record to substantiate that the amount was deposited by Shri Sunil Kumar, (the assessee) and it was withdrawn by him from his account because no deposit slip filled by the assessee. Sh. Sunil Kumar or withdrawal form was produced before the AO rather it was stated that no record was available with him which clearly proves that the amount was deposited by Sh. Kulwant Singh and not by the assessee and when the bank realised its mistake the entry was reversed and the amount was the deposited in the account of the six persons. In the present case, nothing is brought on record that the sale proceeds from the family land claimed to be received on 15.02.2011 or 16.02.2011 was utilized elsewhere and not deposited in the bank accounts of aforesaid six persons. Therefore, by considering the totality of the facts, we are of the view that the impugned amount was wrongly added in the hands of the assessee, particularly when the same amount was credited in the names of 6 persons. The said amount received from the sale proceeds of the land can not be stated to be related to the assessee as well as the other six persons at a same time. If it was to be presumed that said amount belonged to the assessee then there should have been another amount which was deposited in the bank account of the six persons. However, nothing is brought on record to substantiate that the amount deposited in the bank account of the assessee by mistake, was different from the amount deposited in the bank account of the six persons out of the sale proceeds of the agricultural land. We, therefore, considering the totality of the facts are of the view that the impugned addition made by the AO and sustained by the Ld. CIT(A) was not justified. In that view of the matter the addition made by the AO and sustained by the Ld. CIT(A) is deleted.
In the result, the appeal of the assessee is allowed. (Order Pronounced in the Court on 27/08/2018)