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2022 (5) TMI 899

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..... e following grounds 1 to 9, as under. 1. The order of the Commissioner of Income Tax (Appeals)-1, Trichy is opposed to law, facts and circumstances of the case. 2. The Commissioner of Income Tax (Appeals) erred in not considering the sale agreement signed by the purchaser. 3. The learned Commissioner of Income Tax (Appeals) erred in treating the entire cash deposits were not of the sale consideration, though the Assessee has provided proof for connection between the money deposited in the bank account and the money mentioned in the sale agreement. 4. The total sale consideration was Rs.2,80,75,800/- and because of insistence of the buyer to save the stamp duty, the sale consideration was disclosed in the sale deed as Rs.60,75,800/- 5. The learned Commissioner of Income Tax (Appeals) failed to consider that the Assessee is not having any other sources of income so as to generate undisclosed income of Rs.2.20 crores. 6. Mere rejection by the purchaser regarding the "on-money" though entered into a sale agreement is not the reason for addition as other sources. 7. The Commissioner of Income Tax (Appeals) failed to consider that the entire sale consideration was received .....

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..... . The Assessing Officer has not believed the statement of Smt. V. Dhanalakshmi Ammal, the mother of the Assessee but believed the statement of Dr. R. Sivakumar. Aggrieved, the Assessee preferred an appeal before the CIT(A). 5. The CIT(A) on the same set of facts confirmed the action of the Assessing Officer in making the addition of Rs.2.20 crores as unexplained cash deposits in the bank account but the CIT(A) has not at all gone into the details nor examined the relevant details filed by the Assessee and for confirming the addition, he observed in paragraph nos.3.1 to 5, as under: "3.1. The assessment was completed u/s.143(3) dated 28.12.2017 against which the Assessee has filed an appeal by Form No.35, dated 31.01.2018. The Assessee had deposited Rs.220 lakhs (Rs.2.20 crores) in Bank accounts in cash for which the case was selected and the Assessee submitted that he had an agreement for sale of the land to M/s. SRM Institute of Science and Technology which had agreed to pay them Rs.2.80 crores. However, the registered value of the land was only Rs.60,75,800/- and only this amount was received by cheque. The land was actually sold by the mother of the Assessee who also claimed .....

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..... 22.09.2014 to SRM Institute of Science and Technology represented by its Chairman Dr. R. Sivakumar, residing at Door No.4, Prakasam Street, Janaki Nagar, Valasaravakkam, Chennai-600087 for an agreed consideration as per the agreement to sale dated 14.08.2014 at Rs.2,80,75,800/- as against a total consideration of Rs.60.75 lakhs as per sale deed dated 22.09.2014 and the details are as under: "1. By the purchaser of you, the 1st person among us in the name of V. Dhanalakshmi received Cheque No.139586 dated 21.09.2014 of City Union Bank, Chennai, Tambaram Branch for Rs.20,75,800/- (Rupees Twenty Lakhs Seventy Five Thousand and Eight Hundred Only). 2. By the purchaser of you, the 1st person among us in the name of V. Dhanalakshmi received cheque No.139587 dated 21.09.2014 of City Union Bank, Chennai Tambaram Branch for Rs.20,00,000/- (Rupees Twenty Lakhs Only). 3. By the purchase of you, the 1st person among us in the name of V. Dhanalakshmi received Cheque No.139588 dated 21.09.2014 of City Union Bank, Chennai Tambaram Branch for Rs.20,00,000/- (Rupees Twenty Lakhs only)" 9. From the perusal of sale agreement dated 14.08.2014 entered for the sale of the above said agricultural .....

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..... in the above paragraph no.8. It is seen that the names of the vendors, purchaser and witnesses and drafter is written on the sale deed, as under: Sl. No. Vendors Purchaser [1] Sd/- V. Dhanalakshmi For SRM Institute of Science and Technology Dr. R. Sivakumar Chairman [2] Sd/- V. Mohan   [3] Sd/- V. Nagarajan   [4] Sd/- V. Thilagavathy   [5] Sd/- M. Bhuvanewari     Witnesses : [1] Sd/- S/o Parthasarathy, Thirumanacherri   [2] Sd/- S/o Muthusamy, Musuri     Drafted By : [1] N. Muruganantha, Ttattanur L.No.1017/AYR/1999   One more unique feature that was found was that the stamp duty paid at R.4,25,310/-(Rupees Four Lakhs Twenty Five Thousand Three Hundred and Ten Only) and this is certified by the Sub-Registrar, Lalgudi vide Registered Document No.3437 of 2014 in Book No.1. Further, the shortage of stamp duty was paid under Section 42 of the Indian Stamp Act amounting to Rs.2,10,830 (Rupees Two Lakhs Ten Thousand Three Hundred and Ten Only) by the Sub-Registrar and District Collector u/s.42 of the Indian Stamp Act on 27.09.2014. The land sold by Smt. V. Dhanalakshmi Ammal as the sole owner of the property b .....

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..... 00,000/- was deposited in the Savings Bank Account of Shri V. Nagarjan in Punjab National Bank, Pitchandarkoil Branch. In this regard, in the Sworn Statement given by Shri V. Nagarajan on 20.10.2017, while answering to Q.No.7, he stated that out of the total consideration of Rs.2,85,00,000/-, an amount of Rs.60,75,800/-, as per the sale deed was given by cheque and the balance amount of Rs.2,24,24,200/- was given by cash on the day of registration at his home by a person as a representative on behalf of the SRM and a broker from Musiri. Do you agree with the statement of Shri V. Nagarajanof Esanakorai? A.No.12: I gone through the statement. I don't agree with the contention of the said Shri V. Nagarajan. Apart from the amount of Rs.60,75,800/- stated in the deed, I have not made any payment of cash or any mode to Shri V. Nagarajan." 12. The next issue is that, in case the land sold is at a sum of Rs.2.80 crores, the amount of Rs.2.20 crores received by Shri. V. Nagarajan from his mother, Smt. V. Dhanalakshmi Ammal is on account of sale of agricultural land or from any other source of income. 13. We have gone through the submissions of the learned Counsel of the Assessee who mai .....

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..... d for this he argued that even then the money should have been paid to the Assessee's mother and it could have been deposited into her Bank account. The learned Senior Departmental Representative argued that the Assessee's mother did held a Bank account on the date of transfer of land because she accepted from the seller a sum of Rs.20,75,800/- by way of account payee cheque. The he also argued that the land registration deed dated 22.09.2014 clearly reflects the fair market value of the land under sale as Rs.60,75,000/-. Therefore, any consideration received over and above the fair market value, prevailing on the date of sale of the land, the same cannot be attributable to be paid for the land value. He argued that the sum of Rs.2.20 crores received by the Assessee in cash could be for some other services or consideration other than the consideration payable directly towards the land costs. The learned Senior Departmental Representative stated that he has verified the Assessee's Bank account and noticed that the Assessee has various debit amounts out of this Rs.2.20 crores on various dates to various persons and this indicates that this sum has not been received by the Assessee on .....

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..... question whether the apparent can be considered as real. In the present case before us also the facts indicate so. Similarly, the Hon'ble Supreme Court in the case of Durga Prasad More(supra) has held that the apparent must be considered real until it is shown that there are reasons to disbelieve that the apparent is not real and that the taxing authorities are entitled to look into the surrounding circumstances and find out the reality and the matter has to be considered by applying the test of human probabilities. It has been held by the Supreme Court that having regard to the conduct of the appellant as disclosed in her sworn statement as well as other material on the record, an inference can reasonably be drawn that the winning tickets were purchased by the appellant after the event. Therefore, the majority opinion of the Settlement Commission after considering surrounding circumstances and applying the test of human probabilities has rightly concluded that the appellant's claim about the amounts being her winnings from races is not genuine. It cannot be said that the explanation offered by the appellant in respect of the said amounts has been rejected unreasonably and that th .....

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..... an issue of law arises [see Dhirajlal Girdharlal v. Commissioner of Income Tax, Bombay] In the case of Edwards (Inspector of Taxes) v. Bairstow and Another, the House of Lords dealt with this aspect of the matter. Viscount Simonds, in that case observed : "For it is universally conceded that, though it is a pure finding of fact, it may be set aside on grounds which have been stated in various ways but are, I think, fairly summarised by saying that the court should take that course if it appears that the Commissioners have acted without any evidence or upon a view of the facts which could not reasonably be entertained." Lord Radcliffee expressed himself in the following words "If the case contains anything ex facie which is bad law and which bears upon the determination, it is obviously erroneous in point of law. But, without any such misconception appearing ex facie, it may be that the facts found are such that no person acting judicially and properly instructed as to the relevant law could have come to the determination under appeal. In those circumstances, too, the court must intervene." The above observations were relied upon by Bhagwati J. (speaking for the majority) .....

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..... a case no direct nexus between the facts found and the conclusion drawn therefrom. 18. If we apply the principle laid down by Hon'ble Supreme Court in the case of Daulat Ram Rawatmull, supra, and Durga Prasad More, supra, the consistent principle is that there should be direct nexus with the money deposited by the assessee. In the present case before us, the source of money cannot be out of assessee's meagre source of income i.e., agricultural income out of agricultural activity carried out, electrical repairs or plumbing works. Admittedly the sale agreement, although not registered and assessee one of the party to agreement to sell, the total sale consideration fixed at Rs.2,80,75,800/- which is dated 14.08.2014. The sale deed of this agricultural land was executed on 22.09.2014 and as per sale deed, the assessee's mother along with her other son and two daughters executed the sale deed in favour of SRM Institute of Science and Technology, Trichy Campus through Dr.R. Sivakumar. But sale consideration as per cheque received by the vendors was Rs.60,75,800/- on that very date i.e., 22.09.2014. The assessee deposited this amount of Rs.2.20 crores in his bank account maintained with .....

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