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Income Tax Appellate Tribunal, AGRA (SMC
Before: SHRI A. D. JAIN
IN THE INCOME TAX APPELLATE TRIBUNAL AGRA (SMC) BENCH: AGRA
BEFORE SHRI A. D. JAIN, JUDICIAL MEMBER
I.T.A No. 295/Agra/2016 (ASSESSMENT YEAR-2006-07)
Shri Shyam Sunder Gautam, ITO, Ward-3(4), Mthura. Vill. Sunrakh, Vrindaban, Mathura. PAN No.AYTPG9463C (Assessee) (Revenue)
Assessee by Shri Rajendra Sharma, AR Revenue by Shri Waseem Arshad, Sr.DR.
Date of Hearing 21.08.2017 Date of Pronouncement 27.10.2017
ORDER This is assessee’s appeal for assessment year 2006-07, raising the following ground: “1. That the CIT (Appeals) has erred in facts and in law while sustaining the addition for Rs.8,03,000/- treating the deposits in the bank account as unexplained within the meaning of section 69 of the Income Tax Act. No addition is liable to be sustained. The addition sustained by the CIT(Appeals), at Rs.8,03,000/- is liable to be deleted. 2. That while sustaining the addition for Rs.8,03,000/-, the CIT(A) has not considered the explanation offered before him during the course of appellate proceedings. After taking into consideration the explanation as offered by the appellant, no
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addition is liable to be sustained. The addition sustained at Rs.8,03,000/- is liable to be deleted.” 2. The following additional ground has also been raised:
“That while sustaining the addition for Rs. 3,03,000/-, the leaned CIT Appeals has not given any reason, in absence of any reason no addition is liable to be sustained addition sustained is liable to be deleted.” 3. The additional ground, going to the root of the matter, involving a legal issue, arising from the ld. CIT(A)’s order, and not requiring any fresh material, is admitted.
The facts are that the assessee is an individual in whose case, AIR information was received that he had deposited Rs.14,25,350/- in cash in his bank account. The assessee was not assessed to tax and no return of income was filed by him. Accordingly, the case was reopened and assessment was completed at a total income of Rs.16,93,570/-, after treating various cash deposits in the bank as unaccounted income of the assessee.
The AO has made this addition, observing as the following:-
“The fact of the case are that the assessee had made cash deposits over Rs. 10 lacs in bank account with SB1 Branch Pratap Bazar Vrindavan, Mathura in account no. being 01190017795 (new a/c no. 10684337577) in financial year 2005-06 relating to assessment year 2006-07. As per copy of
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bank account a total sum of Rs. 15,53,000/- was deposited in cash on different dates during the financial year and thereafter withdrawals were also made on different dates and there remained a balance of Rs.6,88,618/- as on 31.12.2005. So, in course of assessment proceedings a detailed show cause notice dated 04.02.2014 was issued but it remained un complied with and neither the assessee nor any A.R. on behalf of the assessee attended though ample opportunities have been provided to explain the source of cash deposits.”
Before the ld. CIT(A), the assessee explained that the deposits made in the bank account stood fully explained with reference to the sale proceeds of the agricultural land sold by the assessee at Rs.7,50,000/-, and also from the agricultural income regularly earned by the assessee, which was accumulated over the years to years; that thus, there was no deposit made in the bank a/c which was unexplained within the meaning of section 69 of the I. T. Act, the aforesaid explanation could not be filed before the AO, the assessee was prevented by sufficient cause for not filing the explanation before the AO at the time of assessment proceedings or issue of notice; and that from the aforesaid explanation offered by the assessee, it was fully established that the entire deposits made in the bank account were either from sale proceeds of agricultural land, or from the agricultural income earned, and the deposits in the bank account were fully explained within the meaning of section 69 of the I.T. Act.
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The ld. CIT(A) called for a remand report, which was filed and has been reproduced in para 6.3 of the impugned order as follows:
“In this connection it is submitted that the assessee contention that the deposits made in the bank account of Rs. 40,000/- + Rs.9,90,000/- + Rs. 4,00,000/- totaling to Rs. 14,30,000/- represented the deposits of sale proceeds of assessee's land for Rs. 7,50,000/- as also advance of Rs. 5,00,000/-. Taken on 27.06.2005 against the sale of land as well as balance out of accumulated amount lying with the assessee out of the salary and agricultural income. The contention of the assessee is without any supporting evidence. No evidence regarding sale of plot and receipts of sale proceeds in cash has been filed during the course of assessment proceedings, as well as in appeal proceedings. Further no concrete evidence for receipt of advance of Rs.5,00,000/- has been filed. The assessee has only furnished a notarized statement dated 17.12.2005 of Shri Narayan Prasad S/o Late Sh. Mool Chand Gautam. However, no agreement or any other form of evidence had been filed which may lead to inference that any advance was received in the year 2005. In the notarized statement no particular land has been mentioned for which the assessee received the advance. This clearly shows that the assessee's contention put forwarded during the appeal proceedings is concocted without any supporting evidence. As regards past savings also, the assessee's contention is not acceptable in view of the fact that
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the assessee is a constable and out of meager salary accumulation of cash is not tenable.
In view of the above it is submitted that additional evidence now put forward during the course of appeal proceedings any kindly be hot accepted. Submitted alongwith case records of the assessee in one volume.”
The assessee filed rejoinder (impugned order, para 6.3.2) to the remand report, as under:
“That in the remand repot sent by the AO, wherein he has mentioned that no supporting evidence has been furnished by the appellant in support of his submission that the deposit in the bank a/c is out of sale of land of the appellant at Rs. 7,50,000/- and also from advance at Rs. 5,00,000/- taken against the sale of land by the appellant with agriculture income. The AO has also mentioned in his report that no document related to the submission and in support of deposits made by the appellant are furnished before him during the course of assessment proceedings. In this connection, it is respectfully submitted that the assessment of the above appellant was completed ex parte u/s 144 of the IT. Act being the notices fixing the cases were issued to the assessee which were not received or served on him as he was posted at Hathras, while the notices were issued at the permanent residence i.e. the village Sunrakh Vindravan where the assessee had resided earlier. As stated earlier in the written submission, the appellant is a Constable in the Uttar
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Pradesh Police Department and during the course of assessment proceedings (under consideration), he was posted at Hathras which is not his permanent residence place. The notices were issued at permanent address of assessee at village Sunrakh, Vindravan where he was not residing at the time of issue of notices. Therefore, he could not aware about the fixing of the case or of the enquiries were being conducted by the I. T. Department. Thus, the filing of these documents before the AO could not be possible, which are submitted before your goodself in the appellate proceedings. The copy of the affidavit filed before your goodself of Shri Narayan Prasad, who had made the payment of advance at Rs.5,00,000/- for the purchase of land from the assessee has set to the AO and the AO has given his comments that there is no other document i.e. registered agreement has been filed by the assessee in support of the advance received to him.”
The ld. CIT(A) has observed as follows:
“6.3.3 It is seen that assessee has sold his land for which he has received Rs.7,50,000/- in cash. Although he has filed copy of registered sale deed for this transaction, but AO has not comment on this and has only stated that no documents are filed. Since assessee has filed registered sale deed on proper stamp papers on that, cash deposits to the extent of Rs. 7,50,000/- is treated as explained.
As regards cash deposit of Rs.5,00,000/-, as commented by the AO, the assessee has only furnished a notarized statement dated
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17.12.2005 of Shri Narayan Prasad S/o Late Sh. Mool Chand Gautam. However, no agreement or any other form of evidence had been filed which may lead to inference that any advance was received in the year 2005. In the notarized statement no particular land has been mentioned for which the assessee received the advance. This clearly shown that the assessee's contention put forward during the appeal proceedings is concocted without any supporting evidences. Assessee has also not been able to substantiate these cash deposits by way of any other kind of income. Hence only cash deposits to the tune of Rs.7,50,000/- is treated as explained.
Accordingly, addition to the extent of Rs.8,03.000/- out of total addition of Rs. 15,53,000/- is hereby confirmed. Assessee would get relief of Rs.7,50,000/-.”
I have heard both the parties and have perused the material on record. Out of the total addition of Rs.15,53,000/-, the ld. CIT(A), for the reasons recorded in the impugned order, has deleted the addition to the extent of Rs.7,50,000/-. Addition to the extent of Rs.8,03,000/-, on the other hand, has been sustained. Out of this, cash deposits to the extent of Rs.5 lacs were explained by the assessee to be advance against the alleged sale of agricultural land. The ld. CIT(A) has observed that in this regard, the assessee did not furnish any agreement or other evidence that any advance was received by him in 2005. The assessee only filed a notarized statement dated 17.12.2005 by one Shri Narain Prasad S/o Late Shri Moolchand
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Gautam. The ld. CIT(A) has observed that in this statement, no particular land has been mentioned, regarding which, the assessee states to have received the amount of Rs.5 lacs as advance. This finding of the ld. CIT(A) is patent on record and remains unrebutted. The English translation of this notarized statement (APB-8) has been perused. Para 2 thereof states as follows:
“That the deponent owns 1/3rd share in 12.0750 hectare agriculture land.” However, no details of the said ‘agriculture land’ stand given in this entire 11. one page statement. This discrepancy has not been explained by the assessee before this Bench also. Therefore, no fault can be found with the observations of the ld. CIT(A), while disallowing this amount of Rs.5 lacs. The order of the ld. CIT(A) in this regard is, therefore, confirmed.
So far as regards the remaining addition to the extent of Rs.3,03,000/-, the same has been confirmed by the ld. CIT(A). However, as correctly contended in the additional ground of appeal taken and the arguments raised, a perusal of the impugned order shows that no reason for confirming this addition has been delineated by the ld. CIT(A) in the impugned order. The impugned order, therefore, is a non speaking order in this regard. Accordingly, this issue is remitted to the file of the ld.CIT(A), to be decided afresh in accordance with law, on affording due and adequate opportunity of hearing to the assessee. The assessee, no
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doubt, shall co-operate in the fresh proceedings before the CIT(A). All pleas
available under the law shall so remain available to the assessee. Ordered
accordingly.
In the result, the appeal is partly allowed.
Order pronounced in the open court on 27/10/2017.
Sd/-
(A.D. JAIN) JUDICIAL MEMBER Dated 27/10/2017 *AKV* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR