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TMI Blog2017 (10) TMI 1628X X X X Extracts X X X X X X X X Extracts X X X X ..... is not justified in not justified in estimating the agriculture income of the assessee at Rs. 3,00,000/- from 16 bigha of agriculture land held by the assessee and thereby deleting the relevant addition to that extent only. ITA No. 219/JP/2016 -A.Y.2007-08 1. Under the facts and circumstances of the case, the ld. CIT(A) is not justified in not justified in confirming the addition of Rs. 25,56,440/- as unexplained investment u/s 69 of the I.T. Act, 1961 towards cash deposited into the bank and payment made for purchase of agriculture land. 2.1 First of all, the appeal of the assessee in ITA No.436/JP/2015 for the Assessment Year 2006-07 is taken up for adjudication. 3.1 During the course of hearing, the ld.AR of the assessee has not pressed the Ground No. 3. Hence, the same is dismissed being not pressed. 4.1 Apropos Ground No. 1 and 2 of the assessee, the facts as emerges from the order of the ld. CIT(A) is as under:- ''3.6 I have perused the facts of the case, the assessment order and the submissions of the appellant. The appellant has made cash deposits in his bank account of Rs. 21,50,000/- during the year and has also made cash payment of Rs. 14,64,000/- for purcha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the basic and bare minimum details in the form of names and addresses of the persons to whom the advances had been given. In view of the above discussion, it is held that the appellant was not prevented by sufficient cause from producing before the Assessing Officer, evidences relevant to the above grounds of appeal. Therefore, the application for admission of additional evidences under Rule 46A is not accepted and the additional evidences are not admitted. 4.3 Even otherwise, the additional evidences submitted by the appellant do not have evidentiary value since the persons, to whom advances are said to have been given, were witnesses of the appellant, but he was unable to produce them in spite of being specifically asked by the Assessing Officer to do so, during remand proceedings. During inquiries made by the Assessing Officer, it was seen that one of the persons (Phoola Devi) to whom advance of Rs. 5,00,000/- was given, was not existing at the address given by the appellant. Thus, during appeal proceedings satisfactory explanation with respect to bank withdrawals of Rs. 12,50,000/- has not been furnished by the appellant. The appellant has relied on the judgement in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... zers etc. No evidence of carrying out basic agricultural operations, have been submitted. d. No agricultural income has been disclosed by the assessee in the returns of income filed. e. The sale bills of agricultural produce submitted by the assessee pertain to subsequent years and no sale bills pertain to the year under consideration or the preceding years. 5.2 The appellant has not been able to controvert the above grounds, raised by the Assessing Officer for rejecting the agricultural income. The only contention of the appellant is that he owns agricultural land purchased through a sale deed (submitted before the Assessing Officer) and therefore, it cannot be disputed that he is engaged in agriculture. The appellant has also cited the case of his father - Shri Kalu Ram Meena, where on similar facts of agricultural land holding of 8 bighas, the Assessing Officer has accepted the explanation of the assessee with regard to agricultural income, to the tune of Rs. 1,90,000/'-. Looking to the facts that the appellant has not submitted any evidence with respect to agricultural income, during this year or the preceding years except for the agreement to purchase 16 bighas of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in to the bank. 5. The AO rejected the plea of the assessee in respect of the earlier Bank withdrawal on the ground: (Para (f) on page No.7 of the assessment order) (i) that the same have been made through cheques and the assessee might have utilized the same for other purposes. (ii) No details or evidences in respect of such claim of the assessee have been tendered during the course of assessment proceedings. 6. The assessee during the course of appellate proceedings submitted the details of withdrawals to the extent of Rs.1250000/- and copy of relevant agreements /cancellation agreements along with application for admission of additional evidence under rule 46 of IT Rules 1962 (PB No.16-18): (i) Agreement dated 20.04.2005 with Phoola Devi along with it's cancellation endorsement on 20.12.2005.(PB No.19-26) (ii) Cancellation agreement dated 05.01.2006 with Ram Phool and others (PB No.27). Date Ch. No. Payee/Purpose Amount Date of cancellation of agreement/ receipt of cash back Date of cash deposited in bank 27.04.05 126751 Phoola Devi w/o Laduram, village-Luniawash, Tehsil Sanganer, Jaipur, Agreement for purchase of land 500000/- 20.12.05 31.12.05 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. The revenue, apart from issuing notices under section 131 at the instance of the assessee, did not pursue the matter further. The revenue did not examine the source of income of the said alleged creditors to find out whether they were credit-worthy or were such who could advance the alleged loans. There was no effort made to pursue the so-called alleged creditors. In those circumstances, the assessee could not do any further. In the premises, if the Tribunal came to the conclusion that the assessee has discharged the burden that lay on him then it could not be said that such a conclusion was unreasonable or perverse or based on no evidence. If the conclusion is based on some evidence on which a conclusion could be arrived at, no question of law as such arises." 15.This is apparent from the relevant details that there is a direct nexus between the amount and date of cancellation agreement with that of the cash deposits in to the bank and thereby it is duly established that that the amount withdrawn from bank of Rs.1250000/- as mentioned above has been utilized for re depositing the same in to bank account of the assessee. 16.The amount withdrawn from bank vide Ch. No.126768 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition to the extent of Rs.33,14, 000/-. The ld.AR reiterated on the application filed before ld. CIT(A) u/r 46A of IT Rules 1962 placed at P.B. page no.16-18 and submitted that the additional evidences filed before the ld. CIT(A) are relevant for disposal of the claim of the assessee. Therefore ld. CIT(A) is not justified in not admitting the additional evidences as to claim of the assessee. The ld.AR further submitted that the receipt of cash of Rs.12,50,000/-is evident from the cancellation agreements placed at PB page No.19-27 and details mentioned in application u/r 46A . It is evident from the agreement dated 20.04.2005 placed at PB page No.19-26, that the assessee paid advance of Rs.5,00,000/- to Phooli Devi vide Ch No.126751 and as per endorsement dated 20.12.2005 (PB Page No.26) the said agreement was cancelled and the advance of Rs.5,00,000/-was refunded to the assessee by way of cash payment. It is also evident from the another agreement dated 05.01.2006 placed at PB page No.27 that the advance of Rs.3,50,000/-paid to Ram Phool and others was cancelled and the advance of Rs.3,50,000/- was refunded to the assessee by way of cash payment. The assessee has filed details of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The appellant has stated that the source of above cash deposits and cash payment of agricultural land is from agricultural income and advances received for sale of agricultural land. Explanation regarding source of Rs.30 lacs for investment and purchase of land, the assessee claimed that an amount of Rs.30 lacs has been received for an agreement to sale dated 25.07.2006 from Smt. Diwan Solanki, Shri Suresh Solanki and Shri Rakesh Solanki resident of Palam Village, Delhi. In support of the transactions, Shri Suresh Solanki and Diwan Solanki were produced as wittiness for this transaction. It was noticed by the Assessing Officer that the value of land as per this agreement was taken at Rs.30 lacs per bighas whereas in another agreement dated 30.11.2006, relating to land situated close to this land, the rate have been taken at Rs.5 Lacs per bigha. The Assessing Officer was not convinced as the assessee could not explain the huge difference in price for similar land. Further Shri Suresh Solanki and Rakesh Solanki when produced before the Assessing Officer, agreed to advancing in cash but did not present any sources for this cash. The bank accounts of these people also did not show enou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leven years of the transaction. Further, the assessee would have been 20 years of age at that time and hence would not had the requisite sources to purchase the land. The appellant has not been able to controvert the above findings of the Assessing Officer for rejecting the agricultural income. The only contention of the assessee is that he owns agricultural land which is evidenced by the purchase deed. The appellant has also cited the case of his farther Shri Kalu Ram Meena where on similar facts of agricultural land holding of eight bighas, the Assessing Officer has accepted explanation of the assessee with regard to agricultural income to the tune of Rs. 1,19,000/- . Further, in the previous year, the A.Y. 2006-07, my predecessor, the CIT(A)-2 vide order dated 16.03.2015 had accepted agricultural income of an amount of Rs. 3.00 lacs. in view of the above, the claim of the assessee regarding the agricultural income of Rs. 2,93,520/- is accepted. Since, the transactions of cash deposit and cash payment for purchase of land could not be explained by the assessee, the amounts reflected as received would be its unexplained income and applicability of any particular section woul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made out of the advance received against sale of land of Rs. 3000000/- and other Income of Rs.391000/-. 3.The assessee in support of his claim submitted copy of agreement dated 25.07.2006 ( PB No.22-24) executed between the assessee and (i) Smt. Deewan Solanki w/o Shri Ramesh Solanki (ii) Shri Suresh Solanki s/o Shri Nand Ram Solanki and (iii) Rakesh Solanki s/o Shri Dalel Singh Solanki, for sale of his agriculture land at Village Gunawata evidencing receipt of Rs.3000000/- as advance towards the same and certain sales slips of agriculture produce. 4. The assessee has produced before the AO Shri Suresh Solanki and Rakesh Solanki the purchasers of the land personally for their examination along with their bank statements, IT returns etc. Pan Cards etc. (Bank statement and PAN Card of Suresh Solanki (PB No.25-27) (Bank Statement of Rakesh Solanki PB No.28-30) (Bank statement and PAN Card of Smt. Deewan Solanki PB No.31-33) 9. The AO rejected the claim of the assessee and made addition of Rs.3503520/- to returned income. 10. The ld. ld. CIT (A) after allowing set off of agriculture income sustained the addition to the extent of Rs.2556440/-. 11. The claim of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt on different dates as considered convenient and necessary and simply for the reason that the entire amount of Rs.3000000/- has not been deposited on single day the receipt of the same against agreement dated 25.07.2006 cannot be doubted. 12.Without prejudice to the submission cited above it is humbly submitted that even if it is assumed that the appellant could not explained the source of funds of the purchasers for paying advance for purchase of land pursuant to agreement dated 25.07.2006, the said advance paid by the purchasers of land cannot be held as unexplained simply on the basis of the same. 13. It is not the burden of the assessee to explain the source of funds of the purchasers paying advance for purchase of land. The burden lying upon the assessee u/s 68 of the Act, is to explain the source of the credit found in his books of accounts not the source of the source. If the assessee is enforced to explain the source of funds of the purchasers, it shall amount to enforce the assessee to explain the source of the source. 14.As held by Hon'ble jurisdictional high court in Labh chand Bohra vs ITO 219 CTR 571, so far as capacity of the lender is concerned, in our vie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers of the land placed at PB page No.25-33.The ld.AR also relied on statements of Shri Suresh Solanki and Rakesh Solanki referred by the AO at page No.4 of the assessment order. It is evident from the agreement dated 25.07.2006 that the purchasers of the land paid advance of Rs.30,00,000/- to the assessee for purchase of agriculture land of the assessee at village Gunawata, Patwar- Labana, Tehsil-Amer, Distt-Jaipur. It is also evident from the assessment order itself that the purchasers personally appeared before the AO, filed their IT returns, Bank statement and PAN Cards etc and categorically admitted that they have purchased the relevant land and paid advance of Rs.30,00,000/-to the assessee by way of cash payment. As appears from the transactions contained in the bank accounts of the purchasers, it cannot be said that they have no means for paying relevant advance. There is a weight in the submission of the ld.AR that the burden lying upon the assessee u/s 68 of the Act, is to explain the source of funds and not the source of the source, therefore it is not the burden of the assessee to explain the source of funds of the purchasers paying advance for purchase of the land. The H ..... X X X X Extracts X X X X X X X X Extracts X X X X
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