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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI VIJAY PAL RAO & SHRI B.M. BIYANI
This appeal by the assessee is directed against the order dated 30.09.2016 of Ld. Commissioner of Income Tax (Appeals) (in short Ld. CIT(A)-II, Indore for Assessment Year 2009-10.
None has appeared on behalf of the assessee when this appeal was called for hearing at 10:30 AM, accordingly hearing was passed over. Appeal was again called for hearing towards the end of the board but still nobody appeared on behalf of the assessee it transpires from the record that nobody has been appeared since beginning after filing the present appeal despite the service of the notice issued through RPAD vide acknowledgement available on record. Accordingly, the bench proposes to hear and disposed of this appeal ex-parte by considering the written Page 1 of 5
Chhitrar Singh Page 2 of 5 submission filed by the assessee. The assesse has raised following grounds of appeal:
“1. On the facts and circumstances of the case and in law the learned Commissioner of Income tax (Appeals)-1, Indore ("CIT(A)") erred in confirming the action of Assessing Officer in making additions in the assessment and not accepting the submissions given by the Appellant. The Appellant prays that the said additions and adjustments be deleted and returned income should be accepted.
2. On the facts and circumstances of the case and in law the learned CIT(A) erred in confirming the action of Assessing Officer which related to an addition of Rs. 17,00,000/- under section 69 of the Income Tax Act, 1961 as unexplained cash credit. The Appellant prays that the said addition is directed to be deleted. The assessee is an agriculturist doing agricultural activities throughout his lifetime and having only income from agriculture. In the A.Y. 2009-10 assessee sold agricultural land situated at village Sihada, Halka No. 52, Khandwa bearing Khasra No. 395/1, Rakba 1.45 hectare to Mrs. Anupam w/o Vikash Jain. The stamp sale agreement was also purchase in the name of Mrs. Anupam w/o Vikash Jain. The sale consideration of the above mentioned sale transaction was Rs. 28,00,000/- which was received by the appellant in cash during the A.Y. 2009-10 against the sale of Rural Agricultural Land. Further total amount of sale consideration Rs. 28,00,000/- was deposited by the appellant in his bank account for safety purposes on 07.01.2009. But the sale deed was registered at Rs. 3,50,000/- vide sale registration No. 1A/9619 dated 07.01.2009. Therefore considering the date of transfer of rural agricultural land and date of deposit of money in bank account, it can be easily presumed that the amount deposited in bank account has direct nexus with the transfer of rural agricultural land.
That the said agricultural land sold is situated beyond the 8 Kms of local municipal Limit of Khandwa District. Thus, it cannot be treated as capital asset under the definition of section 2(14) and hence no capital gains was arise as has rightly been treated by A.O. But so far as consideration of Rs. 28,00,000/- the learned A.O. is not agreeing on facts that the sum of Rs. 28,00,000/- received as sale consideration of above mentioned rural agricultural land and make an addition under section 69 of the act.
4. That the assessee is an agriculturist and is neither having any other income nor having any business activities during his lifetime. Therefore as explained above, he had received the cash of Rs. 28,00,000/- as sale consideration on transfer of his rural agricultural land. The only source of income of the assessee was agriculture. Hence, the Appellant prays that the said addition be directed to be deleted. Page 2 of 5
Chhitrar Singh Page 3 of 5 3. The solitary issue arising in this appeal of the assessee is whether the ld. CIT(A) is justified in confirming the addition of Rs.17,00,000/- made by the AO u/s 69 of the Act on account of unexplained cash deposited in the bank account. The assessee stated to be an agriculturist and having no business or taxable income. The assessee did not file any return of income u/s 139 of the Act for the year under consideration. The ld. AO issued notice u/s 148 on the basis of the information received regarding cash deposit of Rs.28,44,950/- in the Bank account of the assessee with SBI Sihada Branch. During the assessment proceedings the Ld. AO recorded the statement of the assessee wherein the assessee has explained the source of deposit as the sale proceeds of the agricultural land sold by him and his brothers. The AO noted that as per the sale deed the sale consideration is only Rs.3,50,000/- and he has accordingly allowed credit of Rs.7,50,000/- on account of sale proceeds of agricultural land as well as the other income of the assessee from agricultural operations and the balance amount of Rs.17,00,000/- is treated as unexplained deposit in the bank account and added to the total income of the assessee u/s 69 of the Act. The assessee challenged the action of the AO before the Ld. CIT(A) and submitted that the assessee sold an agricultural land situated at village-Sihada, Khandwa for a consideration of Rs.28,00,000/- received in cash during the assessment year under consideration. The assessee has also referred the sale deed registered on 07.01.2009. This explanation of the assessee did not find favour from the Ld. CIT(A) for want of any documentary evidence regarding sale consideration of Rs.28,00,000/- received by the assessee against sale of land. Accordingly, Ld. CIT(A) has confirmed the additions made by the AO on this account.
Before the Tribunal the assessee has made written submission and repeated the contentions as the source of deposit being the sale consideration of Rs.28,00,000/- in respect of the transfer of the agricultural land vide sale deed dated 07.01.2009. The assesse has submitted that though the sale consideration recorded in the sale deed is only Rs.3,50,000/- however, the actual sale consideration was received by Chhitrar Singh Page 4 of 5 the assessee is Rs.28,00,000/-. The assessee has also produced a copy of the sale deed dated 07.01.2009 in support of his contentions. The assessee in the written submission has also relied upon the various decisions on the point that when the assessee is having no other source of income then the source of deposit explained by the assessee cannot be rejected. The decisions relied upon by the assessee are as under:
a. CIT vs. P.K. Noorjahan (smt.) 237 ITR 570 (SC) b. Aurobindo Sanitary Stores vs. CTC 276 ITR 549 (Orissa)
Thus the assessee contended that addition made by the AO u/s 69 of the Act is not sustainable.
On the other hand, Ld. DR has referred to the statement of the assessee recorded by the AO which is reproduced in the assessment order and submitted that the assessee himself had admitted the facts that he has no documentary evidence to prove that he received the sale consideration of Rs.28,00,000/- in respect of transfer of agricultural land. He has further pointed out that in reply to question no.7 the assessee himself has surrendered a sum of Rs.17,00,000/- and promise to pay the Income Tax on the said income. He has relied upon the orders of the authorities below and submitted that the assessee has not produced any evidence to corroborate the claim of sale proceeds of Rs.28,00,000/- on account of transfer of agricultural land.
Having considered the written submissions of the assessee as well as arguments of the Ld. DR, it is noted that right from the beginning the assessee has explained the source of deposit as sale proceeds of the agricultural land sold by the assessee vide dale deed dated 07.01.2009. Though the sale consideration in the sale deed is stated at Rs.3,50,000/- however, the deposit in the bank account is correlated with the instance of sale of agricultural land dated 07.01.2009. Therefore, when there is no other known source of the income of the assesse, this explanation of the assessee that he sold an agricultural land for a consideration of Page 4 of 5 Rs.28,00,000/- cannot be rejected without conducting a proper verification and inquiry and particularly without examination of the buyers of the agricultural land. Hence in the facts and circumstances of the case and in the interest of justice we are of the considered view that the mater requires a proper verification and examination of the facts as well as the record to ascertain the actual sale consideration received by the assessee against the transfer of the agricultural land in question. Accordingly, the impugned order of the CIT(A) is set aside and the matter is remanded to the record of the AO for fresh adjudication after conducting a proper inquiry and examination of the buyer of the agricultural land to ascertain the correct sale consideration received by the assessee. Needless to say that the assessee be given an appropriate opportunity of hearing before passing fresh order.
In the result, appeal of assessee is allowed for statistical purposes.
Order pronounced in the open court on 20.04.2023.