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Income Tax Appellate Tribunal, RAIPUR BENCH “SMC”, RAIPUR
Before: SHRI RAVISH SOOD
आदेश / ORDER PER RAVISH SOOD, JM
The present appeal filed by the assessee is directed against the order passed by the CIT(Appeals)-II, Raipur dated 10.12.2019, which in turn arises from the order passed by the A.O under Sec. 143(3) r.w.s 147 of the Income-tax Act, 1961 (in short ‘the Act’) dated 30.12.2017 for the assessment year 2011-12. The assessee has assailed the impugned order on the following grounds of appeal before me:
“1. That the learned A.O has erred in recording his satisfaction on the basis of information received by him regarding deposit of Rs.30,00,000/- cash in my bank account, without making any enquiry at his end and the learned Pr. CIT has also erred in granting sanction mechanically which is bad in law and the whole proceedings are ab-initio void.
2. That the learned A.O has erred in passing the assessment order in the name of the assessee. Whereas the property is jointly owned by there persons, namely Dilip Kumar (brother of the appellant) Sanat Kumar Sinha (wrongly mentioned as Sanat Kumar Sinha) and Surjantinbai ( sister of the appellant) which is wrong and bad in law and on facts.
3. That the learned A.O has committed grave mistake in assessing the part of sale proceed of agricultural land amounting to Rs.26,00,000/- as unexplained cash credit which is unjustified, wrong and bad in law.
4. That the appellant craves to add, amend or alter the grounds of appeal at the time of hearing.”
3 Sanat Kumar Sinha Vs. ITO, Ward-1(5)
On the basis of information received by the A.O that the assessee had deposited an amount of Rs.31.79 lacs in his bank account, his case was reopened by the A.O u/s.147 of the Act.
During the course of the assessment proceedings, it was observed by the A.O that the assessee derived income from agriculture and running a small shop of daily items. On being queried about the source of cash deposits of Rs.30 lac made on 31.03.2011 in his bank account No.107710002312 with Dena Bank, Branch : Jamul, Bhilai, it was the claim of the assessee that the same were the sale proceeds of agricultural land situated at Vill. Khedamara bearing Khasra Nos.61/1, 61/2 and 61/3 that was jointly owned by him along with the members of his family. However, it was observed by the A.O that the registered sale deed pertaining to the transaction of sale of the aforesaid land was executed for an amount of Rs.4 lac. On being confronted with the said fact, it was the claim of the assessee that though the land under consideration was sold for an amount of Rs.30 lac to Shri Sanjeev Kumar S/o. Ved Prakash Kumar resident of Nehru Nagar (E), Bhilai but the sale deed was executed for only an amount of Rs.4 lac. In order to verify the authenticity of the claim of the assessee the A.O summoned Shri Sanjeev Kumar (supra) and recorded his statement on oath, wherein it was stated by him that he had purchased the land under 4 Sanat Kumar Sinha Vs. ITO, Ward-1(5)
consideration for an amount of Rs.4 lac only as was mentioned in the sale deed. Considering the aforesaid facts the A.O made an addition of Rs.26 lac, i.e., [Rs.30 lac (-) Rs.4 lac] as unexplained cash credit in the hands of the assessee.
Aggrieved the assessee carried the matter in appeal before the CIT(Appeals). Observing that the assessee could not come forth with any explanation as regards the cash deposit of Rs.26 lac (supra) in his bank account, the CIT(Appeals) upheld the addition made by the A.O and dismissed the appeal.
The assessee being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before me.
The Ld. Authorized Representative (for short ‘AR’) for the assessee has taken me through the facts of the case. It was submitted by the Ld. AR that the assessee who is a small time book seller/Kiryana Marchant, had a/w. his family members sold agricultural land that was jointly owned by him for a sale consideration of Rs.30 lac vide two registered sale deeds viz. (i) registered sale deed dated 31.03.2011 : Rs.2,50,000/-; and (ii) registered sale deed dated 31.03.2011 : Rs.1,50,000/-. It was submitted by the Ld. AR that the entire amount of sale consideration was deposited by the purchaser, i.e., Shri Sanjeev Kumar (supra) in 5 Sanat Kumar Sinha Vs. ITO, Ward-1(5)
the SB account No.107710002312 of the assessee with Dena Bank, Branch : Jamul, Bhilai on 31.03.2011. Our attention was drawn by the Ld. AR to the copy of the aforesaid bank account of the assessee Page 13 of APB. The Ld. AR in order to fortify his aforesaid claim that the amount of Rs.30 lac was deposited by the buyer, viz. Shri Sanjeev Kumar (supra) in the assessee’s bank account had drawn my attention to the copy of pay-in-slip dated 31.03.2011 which was stated to be in the hand writing of the said person, Page 17 of APB. The Ld. AR in order to buttress his claim that the amount of Rs.30 lac (supra) was the sale consideration of the agricultural land that was jointly owned by the assessee a/w. other family members, had taken me through the aforesaid bank account of the assessee, wherein out of the aforesaid sale consideration an amount of Rs.15.50 lac and Rs.9 lac was paid vide respective A/c payee cheques to Shri Dilip Kumar Sinha (assessee’s brother) and Smt. Surjatin bai (assessee’s mother). It was further submitted by the Ld. AR that as the agricultural land under consideration was rural agricultural land, therefore, the gain arising on the sale of the same was not exigible to tax. The Ld. AR in order to fortify his aforesaid contention had taken me through the relevant extract of the google map, which revealed that the Vill. Khedamara wherein the agricultural land under consideration was situated at a distance of 16 Kms. from the nearest
6 Sanat Kumar Sinha Vs. ITO, Ward-1(5) municipality, i.e., Durg. On the basis of his aforesaid contentions, it was the claim of the Ld. AR that as the cash deposit in question was to the last of paisa sourced out of the sale proceeds of agricultural land under consideration, therefore, both the lower authorities had grossly erred in treating the amount of Rs.26 lac (supra) as an unexplained cash credit in the hands of the assessee. Also, the Ld. AR in order to dispel all doubts as regards his claim that the land in question was sold for a consideration of Rs.30 lac, had drawn support from the copy of agreement dated 16.04.2008 that was earlier executed with a third party for a consideration of Rs.45.51 lacs, Page 18-20 of APB. In sum and substance, it was claim of the Ld. AR that as the source of the cash deposit in the assessee’s bank account was the sale consideration of rural agricultural land that was jointly owned by the assessee a/w. his family members, therefore, the impugned addition of Rs.26 lac (supra) could not be sustained and was liable to be vacated.
Per contra, the Ld. Departmental Representative (for short ‘DR’) relied on the orders of the lower authorities. It was submitted by the Ld. DR that as the assessee had failed to substantiate the source of the cash deposit in his bank account on the basis of irrefutable documentary evidence, therefore, both the lower authorities had 7 Sanat Kumar Sinha Vs. ITO, Ward-1(5)
rightly held the same as an unexplained cash credit in the hands of the assessee.
I have heard the ld. authorized representatives of both the parties, perused the orders of the lower authorities and the material available on record.
I have deliberated at length on the issue in hand, i.e., sustainability of the addition of cash deposit of Rs.26 lac (supra) made by the A.O as an unexplained cash credit in the hands of the assessee. Admittedly, it is a matter of fact borne from record that the assessee had sold agricultural land situated at Village : Khedamara that was jointly owned by him a/w. his family members, viz. (i) Shri Dilip Kumar Sinha (assessee’s brother), and (ii) Smt. Surjatin Bai (assessee’s mother) vide two registered sale deeds i.e. (i) registered sale deed dated 31.03.2011 : Rs.2,50,000/-; and (ii) registered sale deed dated 31.03.2011 : Rs.1,50,000/-. Although, it is the claim of the assessee that he had sold the rural agricultural land in question for a consideration of Rs.30 lac that was deposited by the buyer on the same date i.e. on 31.03.2011 in his bank account No. 107710002312 with Dena Bank, Branch : Jamul, Bhilai, but no material had been placed on record which would support the same. On the contrary, the fact that the registered sale deeds executed by 8 Sanat Kumar Sinha Vs. ITO, Ward-1(5)
the assessee for a sale consideration of Rs.4 lac clearly militates against the aforesaid claim so raised by him. Although, it is the claim of the Ld. AR that the sale deeds of the agricultural land in question were executed for a total consideration of Rs.4 lac but the same had actually been sold for a consideration of Rs.30 lac that was deposited by the seller on the very same day in his bank account, but I am afraid that the said claim in absence of any irrefutable documentary evidence cannot be summarily accepted. Now when the sale transaction had been executed vide registered sale deeds, therefore, no oral evidence would be admissible to dislodge the terms and conditions contained in the same. Our aforesaid conviction is supported by the judgment of the Hon’ble High Court of Punjab and Haryana in the case of Paramjit Singh Vs. Income Tax Officer, of 2009, dated 10.02.2010. It was observed by the Hon’ble High Court that as per Section 91 of the Indian Evidence Act, 1872 Act when terms of a contract, grant or other disposition of property have been reduced to the form of a document then no evidence is permissible to be given in proof of any such terms or such grant or disposition of the property except the document itself or the secondary evidence thereof. It was further held by the Hon’ble High Court that as per section 92 of the of the Indian Evidence Act, 1872 Act once the document is tendered in evidence and proved as per the 9 Sanat Kumar Sinha Vs. ITO, Ward-1(5) requirements of section 91 then no evidence of any oral agreement or statement would be admissible as between the parties to any such instrument for the purposes of contradicting, varying, adding to or subtracting from its terms. On the basis of the aforesaid observations, the Hon’ble High Court had held that sale consideration disclosed in the sale deed had to be accepted and it cannot be contradicted by adducing any oral evidence. Considering the aforesaid settled position of law, I am afraid that the unsubstantiated claim of the assessee that though the sale deed of the agricultural land was executed for a consideration of Rs.4 lac but the same was actually sold for an amount of Rs.30 lac cannot be summarily accepted on the very face of it.
Although, I am unable to concur with the unsubstantiated claim of the Ld. AR that the agricultural land under consideration was in fact sold for an amount of Rs.30 lac which as claimed by the assessee was directly deposited by the buyer i.e., Shri Sanjeev Kumar in his bank account, but at the same time I cannot remain oblivion of certain facts which to some extent supports his said claim. Admittedly, as observed by the A.O, the assessee is a man of limited financial means, deriving income from agriculture and running a small shop of daily items. Considering the limited financial means of the assessee, and the fact that the cash deposit of Rs.30 lac (supra)
10 Sanat Kumar Sinha Vs. ITO, Ward-1(5) was made in his bank account on 31.03.2011 i.e., on the same date on which both the sale deeds in question were executed lends credence to his claim that the cash deposits in question were sale proceeds of the agricultural land that was sold to Shri Sanjeev Kumar (supra). Although, it is a fact borne from record that the purchaser, i.e., Shri Sanjeev Kumar in his statement recorded by the A.O on 29.12.2017 had denied of having purchased the land for a consideration of Rs.30 lacs, and had confirmed that the same was purchased by him for an amount of Rs.4 lac as mentioned in the sale deed, but the said statement being that of an interested party could not on a standalone basis be used to disbelieve the aforesaid claim of the assessee. Also, the fact that the sale consideration of Rs.4 lac (supra) had admittedly been held by the A.O as a part of the cash deposit of Rs.30 lac (supra) in the assesee’s bank account, therein, to some extent renders substance to the assessee’s claim that the entire amount of such cash deposit was the sale consideration of the rural agricultural land. I am of the considered view that in the light of the totality of facts involved in the present case the principle of preponderance of human probability as had been emphasized by the Hon’ble Supreme Court in the case of Sumati Dayal Vs. Commissioner of Income Tax (1995) 214 ITR 801 ( SC) would require to be triggered. In the said case, it was observed by the Hon’ble Apex
11 Sanat Kumar Sinha Vs. ITO, Ward-1(5)
Court that an explanation offered by an assessee has to be vetted after considering the surrounding circumstances and applying the test of human probabilities. In the backdrop of the aforesaid principle of preponderance of human probability, I am also reminded of the judgment of the Hon’ble Supreme Court in the case of Commissioner of Income Tax Vs. P.K Noorjahan (1999) 237 ITR 570 (SC). In the said case, it was observed by the Hon’ble Apex Court that the term “may” used in Section 69 of the Act confers a discretion on the Income-tax Officer in the matter of treating the source of an investment which has not been satisfactorily explained by the assessee, as the income of the assessee, and the Income-tax Officer is not obliged to treat such source of investment as income in every case where the explanation offered by the assessee is found to be not satisfactory. It was, therein, observed by the Hon’ble Apex Court that the question whether the source of the investment should be treated as income or not under Section 69 has to be considered in the light of the facts of each case. In the case before the Hon’ble Apex Court, the assessee who was a lady aged 20 years had purchased 16 cents of land in Ernakulam and the amount spent by her, inclusive of stamp and registration charges, for this purchase was Rs.34,628/-. Subsequently she further purchased 12 cents of land at Ernakulam and the total investment for this purchase was Rs.25,902/ - On being
12 Sanat Kumar Sinha Vs. ITO, Ward-1(5) queried about the sources of the respective investments, it was the claim of the assessee that the same was financed from the savings out of the income of the properties which were left by her mother's first husband. As the explanation of the assessee did not find favour with the A.O, therefore, he held the entire amount of investments as the income of the assessee. On appeal, the Hon’ble Apex Court observed that taking into account the complete absence of resources of the assessee, and also the fact that having regard to her age and the circumstances in which she was placed she could not be credited with having made any income of her own, therefore, under these circumstances the Tribunal was right in refusing to make an addition of the value of the investments to the income of the assessee. It was observed by the Hon’ble Apex Court that the term “may” used in Section 69 confers a discretion on the Income-tax Officer in the matter of treating the source of investment which has not been satisfactorily explained by the assessee as the income of the assessee and the Income-tax Officer is not obliged to treat such source of investment as income in every case where the explanation offered by the assessee is found to be not satisfactory.
Considering the aforesaid judgments of the Hon’ble Apex Court, I am of the considered view that in the backdrop of the facts involved
13 Sanat Kumar Sinha Vs. ITO, Ward-1(5) in the case of the assessee before me, a man of limited financial means who admittedly is running a small time shop of daily items in a village, the A.O ought to have minutely carried out an in-depth verification as regards the veracity of the assessee’s explanation qua the source of the cash deposit of Rs.30 lac (supra) in his bank account, and in all fairness should have also pressed into service the principle of preponderance of human probabilities before turning down the same. On a perusal of the bank account of the assessee, I find that over the period from 17.12.2010 till 31.03.2011 ( i.e. date on which the cash deposit of Rs.30 lacs was made), a petty balance was available in the said account, which had on no occasion exceeded Rs.26,440/-. In my considered view, there is substantial force in the claim of the assessee that the cash deposit of Rs.30 lac in his bank account was the sale proceeds of the agriculture land which were deposited in the said account on the same date on which the sale deeds were executed. Not only the principle of preponderance of human probabilities considering the limited financial means of the assessee weighs in his favour, but there are certain peculiar facts which instill confidence as regards the explanation so advanced by him. The fact that cash deposit of Rs.30 lac (supra) made on 31.03.2011 in the assessee’s bank account i.e., on the same date on which the sale deeds were executed lends credence to his claim that 14 Sanat Kumar Sinha Vs. ITO, Ward-1(5) the same was the amount of the sale consideration received by him from the purchaser. Apart from that, the fact that out of the aforesaid amount of Rs.30 lac (supra), an amount of Rs.15.50 lac and Rs.9 lac were paid by the assessee through A/c payee cheques to the other co- owners i.e, Shri Dilip Kumar Sinha (assessee’s brother) and Smt. Surjatin Bai (assessee’s mother), respectively, further instills confidence as regards the veracity of his claim that the entire amount of cash deposit was the sale proceeds of the jointly owned agricultural land. Also, the affidavit dated 27.08.2022 of Shri Dilip Kumar Sinha (assessee’s brother) wherein he had categorically stated that though the agriculture land in question was sold for a consideration of Rs.30 lac to Shri Sanjeev Kumar, but the sale deeds were executed for an amount of Rs.4 lac further supports the claim of the assessee. Further, the fact that the assessee had parted with the aforesaid share of sale consideration in favour of his brother and mother had also been affirmed by Shri Dilip Kumar Sinha in his affidavit. At this stage, I may herein reiterate that though contents of the registered sale deeds cannot be dislodged on the basis of oral evidence, but at the same time, cannot remain oblivion of the unfortunate ground reality that in innumerable cases sale transaction of immovable properties are carried out at an amount substantially higher than that projected in the registered sale deeds.
15 Sanat Kumar Sinha Vs. ITO, Ward-1(5)
Be that as it may, I am of the considered view that the claim of the assessee that an amount of Rs.30 lac deposited in his bank account on 31.03.2011 was the sale consideration of the agricultural land in question by no means could have been summarily scrapped. Undeniably, the assessee except for harping on his unsubstantiated claim that the purchaser i.e., Shri Sanjeev Kumar Singha (supra) had on 31.03.2011 i.e., the day on which the sale deeds were executed, accompanied him a/w. Shri Dilip Kumar Sinha (assessee’s brother) and Smt. Surjatin Bai (assessee’s mother) to the bank and had after filling the pay-in-slip in his hand writing deposited the sale proceeds of agricultural land of Rs.30 lac in the assessee’s bank account with Dena bank, Branch : Jamul, Bhilai, had however, failed to lead any irrefutable evidence which would substantiate his claim to the hilt. Although Shri Sanjeev Kumar (supra) had refuted the aforesaid claim of the assessee and had stated that he had purchased the agricultural land for a consideration of Rs.4 lac as stated in the registered sale deeds, but the same as observed by me hereinabove, being a statement of an interested party cannot be relied upon in isolation. In my considered view, the matter in all fairness requires to be revisited to the file of the A.O who shall carry out necessary verifications as regards the aforesaid claim of the assessee. Fact, as 16 Sanat Kumar Sinha Vs. ITO, Ward-1(5)
claimed by the assessee that the pay-in-slip was prepared by the purchaser, viz., Shri Sanjeev Kumar (supra) for depositing the cash sale proceeds of Rs.30 lac in his bank account shall be verified by the A.O. Also, the A.O shall carry out necessary verification as regards the market value of the land in question at the relevant point of time, for which, inter alia, he shall make necessary enquiries from Shri Mukesh Kumar Chabada, S/o. Mushiram Chabada, resident of new Khurshipar, Bhilai with whom the assessee had claimed to have earlier entered into an agreement, dated 16.04.2008 to sell the agriculture land under consideration for Rs.45.51 lac, which however could not materialize., Page 18-20 of APB. Further, the A.O shall verify the sale consideration for which agricultural lands in the vicinity of that owned by the assessee a/w. his family members were sold during or the nearby periods. Also, the A.O shall record the statement of Shri Sanjeev Kumar (supra) as regards the claim of the assessee that the amount of Rs.30 lac (supra) was deposited by him on the basis of pay-in-slip that was prepared by him. Accordingly, I set aside the order of the CIT(Appeals) and restore the matter to the file of the A.O who shall adjudicate the issue afresh after affording a reasonable opportunity of being heard to the assessee. Needless to say, the assessee in the course of set-aside proceeding shall remain at liberty to adduce any additional documentary evidence or any 17 Sanat Kumar Sinha Vs. ITO, Ward-1(5) submission to substantiate his claim that the amount of Rs.30 lac (supra) deposited in his bank account was sale proceeds of the agriculture land in question.
In the result, appeal of the assessee is allowed for statistical purposes in terms of the aforesaid observations. Order pronounced in the open court on 16th day of December, 2022.