JITENDRA SINGH,BIJNOR vs. INCOME TAX OFFICER, BIJNOR

Heard both the sides and perused the records.

Brief facts of the case are that the information reported in AIMS module of ITBA that the assessee had deposited more than Rs. 10 lacs in different saving bank accounts maintained by him during the F.Y. 2014-15 relevant to AY 2015-16. A query letter as well as a notice u/s. 133(6) of the Income Tax Act, 1961 was issued and served upon the assessee asking him to furnish the source of income and credit entries thereof in bank accounts maintained by him. But the assessee failed to furnish any satisfactory explanation. Further no return of income was filed by the assessee for the year under consideration. Accordingly, reassessment proceedings were initiated in the case of the assessee. During the course of reassessment proceedings, the appellant was asked to furnish details and source of cash deposit. In response, the assessee stated that cash was deposited during the year, on various dates, on account of consideration received for sale of land; and on account of cash gift received from his father which was received by his father from sale of another land. The documents furnished by the assessee during the course of assessment proceedings were duly considered by the AO. However, the reply furnished by the assessee was not found to be satisfactory, as there was no correlation between the dates of cash deposit and the date of drawing the agreement to sell / sale deed; on account of which, sale consideration was received by the appellant and his father. Therefore, the AO made the addition of Rs. 13,00,000/- and completed the assessment at Rs. 14,65,000/-. Against the AO’s action, assessee preferred appeal before the Ld. CIT(A), by reiterating the submissions that the cash was deposited out of cash consideration received on account of agreement to sell / sale deed and cash gift received from his father. Ld. CIT(A) noted that cash deposit of Rs. 13,00,000/- made on various dates and there is no correlation between the dates of cash deposit and the dates of agreement to sell / sale deed and as the assessee has failed to explain the source of cash deposit in his bank account, the addition of Rs.

Heard the rival contentions and perused the records.

At the time of hearing, Ld. AR has submitted that assessee is an individual, engaged in agricultural activities. During the relevant assessment year, the Assessee sold agricultural land situated at Village Rehadva, Tehsil and District Bijnor, Uttar Pradesh, belonging to himself and his father. The sale proceeds were received in cash, as is customary in rural agricultural transactions in the region, and were subsequently deposited into the Assessee’s bank account. Copy of Agreement to Sale and Sale deed and copy of bank statement are placed on record. He further submitted that date of agreement to sell was 25th April 2014 and date of sale deed is 25.11.2014. All the cash was deposited between these dates Rs 7,00,000/- was deposited on 22/04/2014 i.e. two days before Agreement to sale Rs 3,00,000/- was deposited on 15th October 2014 and Rs. 3,00,000/- was deposited on 18th October 2014 i.e. dates are between Agreement to Sell and Sale deed. It was further submitted that except the cash accepted from sale of agriculture land no other cash is deposited in the bank account during the year. All the cash deposits are directly linked between date of agreement to sell and sale deed. No cash was deposited after the sale deed. The AO initiated reassessment proceedings under Section 147 of the Act, alleging escapement of income based on information regarding cash deposits in the Appellant's bank account. In the assessment order, the AO treated these cash deposits as unexplained money under Section 69A of the Act, without adequately considering the Appellant's submissions and evidence. The Assesse duly explained during the assessment proceedings that the source of the cash deposits was the sale proceeds from the aforementioned agricultural land. To substantiate this, the assessee furnished copies of the agreement to sell and the registered sale deed (registry), which clearly establish the transaction details, including the consideration received. Despite this, the AO proceeded to make the addition, holding the 3 | P a g e explanation unsatisfactory. Aggrieved, the assessee preferred an appeal before the Ld. CIT(A), reiterating the explanations and evidences. It was further submitted that CIT(A) mechanically upheld the addition, without properly appreciating the documentary proof or providing a reasoned rebuttal, thereby perpetuating the error. It was submitted that the agricultural land in question is rural agricultural land, as defined under Section 2(14) of the Act (excluding it from the definition of ‘capital asset’), and the income from its sale is exempt under section 10(1) read with Section 2(1A) of the Act, being agricultural income. The cash deposits, therefore, represent explained sources and do not warrant treatment as unexplained under section 69A. Per contra, Ld. DR relied upon the orders of the authorities below.

Before me the ld. AR submitted a paper book containing pages 1-99 having the copy of reply, agreement of sell (in case of Jitendra Singh- Assessee); Agreement of sell (in case of Jitendra Singh’s Father); Sale deed (in case of Jitendra Singh (assessee); Sale deed in case of Jitendra Singh assessee; Sale deed in case of Jitendra Singh’s father\; bank statement and affidavit. After perusing all the relevant documents, evidences, etc. I note that Section 69A of the Act provides that where an assessee is found to be the owner of any money (including cash in bank) which is not recorded in the books of account, and offers no explanation or an unsatisfactory explanation about its nature and source, such money may be deemed as income. The burden of proof under Section 69A shifts to the assessee to provide a plausible explanation, but once discharged with credible evidence, the onus reverts to the Revenue to disprove it. In the instant case, the Assessee has discharged the burden by explaining that the cash deposits originate from the sale of agricultural land at Village Rehadva, Tehsil and District Bijnor. The Assessee has produced irrefutable documentary evidence, viz., copies of the Agreement to Sell and the registered Sale Deed, which corroborate the transaction, the parties involved, the consideration amount, and the mode of payment (cash, as prevalent in rural areas). In view of the aforesaid discussions, I am of the considered view that assessee has fully explained the source of the cash deposits, which was the sale 4 | P a g e proceeds from the of agricultural land, therefore, the addition in dispute made in the hands of the assessee is not sustainable in the eyes of law, hence, the same is deserved to be deleted. Accordingly, I delete the addition in dispute by setting aside the orders of the lower authorities in the instant case.