TMI Blog2022 (5) TMI 899X X X X Extracts X X X X X X X X Extracts X X X X ..... ccount maintained with Punjab National Bank and the inference in which the normal man will draw is that the amount cannot be from any other source except from the transaction of sale of land because it is common in the transactions of immovable properties that there is under hand transactions. The presumption goes in favour of assessee that the cash deposit in bank account of assessee maintained with PNB on 22.09.2014 amounting to Rs.2.20 crores is coming from the sale transaction of agricultural land by the mother and the legal heirs of the mother including the assessee. The assessee produced a definite evidence i.e., sale agreement which is entered into for an amount of Rs.2,85,00,000/- on 14.08.2014 for sale of this agricultural land. The assessee has fairly established the fact that the cash deposits are out of sale consideration as recorded in the agreement of sale. In view of the above given facts and circumstances of the case, we are of the view that the cash deposit made by assessee amounting to Rs.2.20 crores are arising out of sale of agricultural land by the assessee s mother including assessee and hence, this cannot be treated as unexplained cash deposit. This issue, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00/- 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 and deposited on the same date and there is link between cash deposits and sale of agricultural land, as per the sale agreement. 8. The Commissioner of Income Tax (Appeal) failed to consider that the sale proceeds of the said agricultural land is not a capital asset as per Section 2(14) of the Income Tax Act, 1961. 9. Section 68 has application, when no explanation is offered or the explanation offered is not satisfactory, I have corroborative evidence such as Agreement for sale and deposit of cash on the day of executing the sale deed. 3. The brief facts of the case are that the Assessee is an individual and filed his return of income for the Assessment Year 2015 2016 on 08.09.2015 admitting a total income of Rs.8,00,800/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onfirming 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 before the Assessing Officer that she had received Rs.224.25 lakhs in cash apart from Rs.60.75 lakhs in cheque and that she had given Rs.220 lakhs to Shri V. Nagarajan of the Assessee. 4. Shri. S. Keerthirajan, CA/AR appeared on 18.07.2018 and 22.01.2019 and then on 31.01.2019 and he has furnished a copy of the agreement to sell between the Assessee s mother and M/s. SRM Institute of Science and Technology as per which they have agreed to pay Rs.2.80 crores to the Assessee and this the AR contends was a s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .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 land, an advance amount of Rs.1,00,000/- was received by Smt. V. Dhanalakshmi Ammal, wife of Late Shri Venkatesan, Shri V. Mohan and Shri V. Nagarajan, both sons of Late Shri Venkatesan residing at Door No.2/63, South Street, Esanakontru Village, Lalgudi Taluk, Thiruchirappalli District. Two more ladies, i.e. daughters of Shri V. Dhanalakshmi Ammal, Smt. V. Thilagavathy, wife of Shri Vivekanandan residing at Flat No.4, Pillaithottam, Vallalar Nagar, Karaikkal, Pudhucherry State and Sm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ced that an amount of Rs.2,20,00,000/- 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 l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and it is not an admissible evidence and 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the Hon ble Supreme Court that has raised the 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 am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spicions and partly on evidence, in such a situation 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 we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey belongs to B. There would be in such 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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