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2019 (2) TMI 2025 - AT - Income TaxUnexplained income - huge deposits in bank account - Surplus money arising on sale of agricultural land - CIT-A deleted the addition as AO had not been able to point to any other source of income apart from sale of agricultural land and therefore the deposits in the bank accounts were to be treated as proceed of sale of agricultural land and therefore exempt from taxation - HELD THAT - Assessee filed documents before the Assessing Officer. If the Assessing Officer chooses not to cause any enquiry from the parties concerned he cannot simply reject the sale consideration shown in the sale agreement. In this case the sale deed has been registered at a value which is below the amount actually received by the assessee and deposited in the Bank account. There was no material whatsoever or any circumstance which could have suggested that the impugned amount was received by the assessee from any other source. The deposition of the purchaser by way of an affidavit filed with the authorities had shown a higher value which was sufficient to discharge the burden which the AO had doubted the source of deposit. There was a sale agreement which was entered into by the assessee with the purchaser for sale of 11 acres of rubber plantation in Kokkayar Village Idukki District at the rate of Rs.55, 750/- per cent. This was also brought on record by the assessee vide letter dated 29/02/2016. The Assessing Officer in disbelieving the evidence had not given any reasons whatsoever to discard the evidence placed by the assessee so as to explain the deposit of sale consideration into various Bank accounts It is also brought to our notice that there was no assessment in respect of the payment of the said on-money in the hands of the purchaser by the Department. These evidences led by the assessee cannot be discarded without any reasons. In view of this we are inclined to hold that the deposits made by the assessee in the Bank accounts were duly explained by the assessee and it is to be accepted as genuine source of deposits as there was no counter evidence brought on record by the Assessing Officer. - Decided against revenue.
Issues Involved:
1. Whether the CIT(A) was correct in allowing the assessee's appeal by comparing it to the case of ITO Vs Dr. Koshy George. 2. Whether the CIT(A) erred in granting relief without evidence supporting the claim that the entire cash receipt was the sale consideration of agricultural land. 3. Whether the CIT(A) erred in treating the entire cash deposits as sale consideration without proof of connection between the deposited money and the money received from the purchaser. Issue-wise Detailed Analysis: 1. Comparison to ITO Vs Dr. Koshy George Case: The Revenue questioned the CIT(A)'s decision to allow the assessee's appeal by comparing it to the case of ITO Vs Dr. Koshy George. The CIT(A) found the facts and circumstances of the present case to be identical to the Dr. Koshy George case, where transactions were not through banking channels. The CIT(A) concluded that the deposits in the assessee's bank accounts were proceeds from the sale of agricultural land and thus exempt from taxation. 2. Granting Relief Without Supporting Evidence: The Revenue argued that the CIT(A) granted relief without any evidence supporting the claim that the entire cash receipt of Rs. 174 lakhs was the sale consideration of agricultural land, as the registered document showed a lesser price. The CIT(A) found that the Assessing Officer (AO) had not identified any other source of income apart from the sale of agricultural land. Therefore, the deposits in the bank accounts were treated as proceeds from the sale of agricultural land. The CIT(A) deleted the addition of Rs. 1,54,86,598/-. 3. Treating Entire Cash Deposits as Sale Consideration: The Revenue contended that the CIT(A) erred in treating the entire cash deposits as sale consideration without proof of connection between the money deposited in the bank account and the money received from the purchaser. The AO had proposed to add the unexplained income to the assessment, arguing that unaccounted money (black money) cannot be considered as the source for these investments. The AO only considered the sale value of the property as per the sale deed as the source for the deposits. The assessee explained that some deposits were made after closing existing fixed deposits. Findings and Conclusion: The Tribunal reviewed the evidence, including the agreement for the sale of rubber plantation, affidavits from purchasers, and bank certificates. It found that the AO had not conducted any inquiry with the concerned parties and had no material suggesting that the amount was received from any other source. The Tribunal held that the deposits made by the assessee in the bank accounts were duly explained and accepted as a genuine source of deposits. It referenced a similar case, ITO vs. Shri Abraham Varghese Cheruvil, where it was held that the receipt of on-money from the sale of agricultural land should be considered as agricultural income. Final Judgment: The Tribunal confirmed the order of the CIT(A) and dismissed the appeal filed by the Revenue. The deposits in the bank accounts were accepted as proceeds from the sale of agricultural land, and thus, exempt from taxation. Order Pronouncement: The order was pronounced in the open Court on February 6, 2019.
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