ITO, MEERUT vs. SH. HARDWARI LAL, MEERUT

The revenue has question first appellate order mainly on the basis that the ld. CIT(A) erred in accepting that the assessee had received part sale consideration in cash without requiring the assessee to produce necessary evidence in support.

The Ld. Sr. DR submitted that before the authorities below the assessee could not establish the source of deposit of cash of Rs. 49,36,000/- in his Saving Bank Account as the explanation of the assessee that the source of the said deposit was sale proceeds from his agricultural land was not supported with any evidence. Just because the agreement was not registered, it cannot be ignored for the purpose of I.T.Act, 1961. 4. The ld. AR on the other hand placed reliance on the first appellate order. He submitted that copy of the agreement of sale with Sachin Gupta and Rohit Garg was furnished on which the Ld. CIT had called for a remand report from the AO, in which the AO had accepted the fact of the transfer of capital assets being agricultural land made by the assessee. 5. Having gone through the orders of the authorities below, we find that the AO had made the addition of Rs, 49,36,000/- deposited by the assessee in cash in his saving bank account on the basis that the explanation of the assessee that it was sale proceeds from his agricultural land supported with a copy of agreement of sale with Shri Sachin Gupta and Shri Rohit Garg on stamp paper of Rs. 100/- dated 7.10.2008 was not a reliable document as the same was not registered. We do not agree with such view as for the transfer of capital asset for the purpose of Income Tax Act the A.O. has to examine the genuineness in view of the provisions laid down in to be examined as per section 2(47) of the I.T. Act read with section 53A of the Transfer of property 3 Hardwari Lal Act. It is not the case of the AO that Shri Sachin Gupta and Shri Rohit Garg had denied the claimed transaction nor is it the case of the AO that the agreement produce in support was sham. The AO in his remand report has also accepted the fact of transfer of capital asset being agricultural land as claimed by the assessee.

Considering all the above material facts in its totality, we are of the view that the ld. CIT(A) has rightly held that the source of the deposit in question has been satisfactorily explained by the assessee and thus the addition in question was not sustainable. The action of the ld. CIT(A) in deleting the addition of Rs. 49,36,000/- is upheld. The related grounds raising the issue are accordingly rejected.

In the result, the appeal is dismissed. (Order Pronounced in the Court on 12/02/2016).