TMI Blog2022 (8) TMI 1432X X X X Extracts X X X X X X X X Extracts X X X X ..... e; the next day of registration of sale deed. We therefore considering the totality of the facts as discussed hereinabove deem it appropriate to delete the impugned addition made by the AO and sustained by the Ld. CIT(A). - SHRI. N.K.SAINI, VP SHRI. SUDHANSHU SRIVASTAVA, JM For the Assessee : Shri Tejmohan Singh, Advocate For the Revenue : Shri Akashdeep, JCIT, Sr. DR Order PER N.K. SAINI, VICE PRESIDENT This is an appeal by the assessee against the order dt. 14/02/2018 by the Ld. CIT(A), Patiala. 2. Following grounds have been raised in this appeal. 1. That the Ld. Commissioner of Income Tax (Appeals) has erred in law as well as on facts in upholding the addition of Rs.132,90,000/- made on account for cash deposits in Bank account in utter disregard ofthe explanations rendered which is arbitrary and unjustified. 2. That the Ld. Commissioner of Income Tax (Appeals) has further erred in upholding an addition of Rs. 22,50,000/- madeon account of cash deposits in bank account in utter disregard of the explanations renderedwhich is arbitrary and unjustified. 3. That the Ld. Commissioner of Income Tax (Appeals) has further erred in n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SBI, Dhanaula Sr. No. Date Amount Source 1 30.04.2010 Rs.38,00,000/- (Rs.34,00,000/-+ Rs.4,00,000/-) Out of execution of agreement with Sh. Jaggar Singh and others to sell agriculture land situated near village Manna Pindi on 30.04.2010. 2 03.01.2011 Rs.20,00,000/- Out of sale proceeds of agriculture land situated near village Manna Pindi from sale deed registered with Tehsildar Dhanaula on 03.01.2011. Total Rs.58,00,000/- SBOP, Patran 1 04.01.2011 Rs.2,05,50,000/- Out of sale proceeds of agriculture land situated near village Manna Pindi from sale deed registered with Tehsildar Dhanaula on 03.01.2011. 2 12.01.2011 Rs. 1,89,00,000/- Out of withdrawals on the same date, the cash was deposited on the same day due to non maturity of any agreeme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... witnesses to prove the actual amount paid by the purchaser of the land and it was specifically asked as to why whole cash was deposited in his bank account while the ownership of land in question was related to three persons and it was sold by all three persons. In response the assessee submitted that the land in question was belonging to the family and whole cash was deposited into his bank account and that they had purchased land in Tehsil Patran in the name of their mother Smt. Charanjit Kaur after withdrawal of the cash from the banks. The AO thereafter issued the notice under section 131 of the Income Tax Act, 1961 (hereinafter referred to as Act ) to the purchaser of the land Shri Jaggar Singh S/o Shri Jang Singh R/o Guru Teg Bahadur Nagar, Barnala. In response to the same the purchaser appeared before the AO on 08/01/2011, his statement on oath was recorded, he admitted that payment of Rs. 40 lacs on 30/04/2010 was made on account of execution of agreement for purchase of land. He also admitted payment of Rs. 1,12,60,000/- on 03/01/2011 to Shri Sukhwinder Singh (the assessee) on account of sale of agricultural land situated at Village Manna Pindi and sale deed was regis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he sale deed and he was unable to tell how the remaining payment was made to the assessee. 5.5 The AO obtained the information in respect of ownership of property under section 133(6) of the Act from Sub Registrar as well as Sub Registrar, Dhanaula. The AO asked the assessee vide letter dt. 27/01/2014 to submit requisite information which read as under: In continuation of assessment proceedings and questionnaire dated 04-02-2013 and 24-12-2013, to facilitate the completion of scrutiny assessment pending in your case for the assessment year 2011-12, you are further requested, to produce the information/ documents mentioned below:- 1- Your statement was recorded on oath on 02-01-2014 in which you stated that you had sold agriculture land @ 21 lac per acre measuring about 12 acres to Sh. Jaggar Smgh S/o'$h. Jang Singh S/o Sh. Mastan Singh R/o Bamala by executing agreement to sell agriculture land situated at Vill. Manna Pindi Dhanaula dated 30-04-2010 and sale deed was registered with Tehsildar, Dhanaula on 03-01-2014. The amount qf Rs. 40,00,000/- was received in cash as advance on 30-04-2010 and remaining amount was received in cash on 03-01-2011 i.e. date of regi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... document with the S*ate Revenue Authority. v) The original agreement dated 30-04-2010 has not been produced during assessment proceedings and denied of having possession of original document. vi) The photocopy of the agreement dated 30-04-2010 submitted in this office do not bear name address of the stamp vendor, serial no. of the register of issuing authority etc. vii) The photocopy of unregistered agreement dated 30-04-2010 which do not bear name address of the issuing authonty has no value in the eye of law. viii) The sale deed dated 03-01-2011 is registered before State Revenue Authority which becomes final and copy of agreement dated 30-04-2010 cannot be relied upon. 3. Keeping in view above mentioned facts, you have failed to explain the source of cash deposited into bank account at Rs. 2,05,50,000/- on 04-01-2011. You have explained the source of cash deposited into bank at Rs. 72,60,000/- instead of Rs. 2,05,50,000/-. Hence, the difference of Rs. 1,32,90,000/- (2,05,50,000 - 72,60,000) has been deposited into bank account from the sources not disclosed to the department. Hence, you have concealedthe income and furnished inaccurate particula ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Singh and Shri Sukhwinder Singh(the assessee) and that the property was purchased in her name only to save stamp duty which was at low rates for females. 5.9 The AO observed that pay-in-slips, withdrawal slips were obtained from SBOP which revealed that the cash was deposited by the assessee himself and the withdrawal had also been made by him. The AO also recorded the statement of the assessee on 19/03/2014 which had been reproduced in para 3.14 at page no. 21 to 24 of the assessment order, for the cost of repetition the same is not reproduced herein. 5.10 The AO specifically asked the assessee to explain source of cash deposited, means of transport used for carriage of cash from Dhanaula to Patran etc. The AO did not accept the explanation of the assessee in respect of cash deposited in the bank account for the following reasons: i) The purchaser of land Sh. Jaggar Singh has admitted in his statement payment of cash Rs. 72,60,000/- only on 03-01-2011 instead of Rs.2,05,50,000/-. ii) One of the witness of the agreement to sell agriculture land dated 30-04- 2010, Sh. Bhola Singh S/o Sh. Karnail Singh R/o Vill. Pharwahi has admitted in his statement dated 09-01-20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) As per return of income filed by the assessee, has shown income from business of running of workshop and it shows that it is indulged in some business activities. Even, he could not justify the cash withdrawn from bank about Rs. One crore in February, 2011 which shows that he might have been indulged in real estate business or other business activities which have not been declared to the department. 5.11 The AO observed that the assessee could explain the source of cash deposited into bank only for Rs. 72,60,000/- instead of Rs. 2,05,50,000/-. He therefore held that the difference of Rs. 1,32,90,000/-(Rs. 2,05,50,000/- minus Rs. 72,60,000/-) had been deposited into bank account from the sources not disclosed to the department. The AO further observed that the assessee failed to explain cash deposited in the bank account at Rs. 11,50,000/- on 12/01/2011, Rs. 1,00,000/- on 13/01/2011 and Rs. 10,00,000/- on 03/02/2011 totaling to Rs. 22,50,000/- in the bank account. He therefore held that the assessee had deposited cash in bank account to the tune of Rs. 1,55,40,000/- (Rs. 1,32,90,000/- + Rs. 22,50,000/-) from the sources not disclosed to the department. Accordingly the same wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 92 are based on the Best Evidence Rule preventing the admission of inferior evidence when the superior evidence is available so as to prevent the fraud, future controversy, bad faith or treacherous memory. Similarly section 115 of the Evidence Act enshrines in it the principle of estoppel which is again based on public policy, equity, justice, morality and faith. Hence the principles laid down in sections 91, 92 115 of the Evidence Act, in our view, can be well applied to the case in hand. 18. Even the contention of the seller that it is a general practice to register the sale deeds at a lesser consideration cannot be accepted in the light of recognised principles of law as discussed above and even such a contention being opposed to public policy. The Hon'ble Madras High Court in the case of Coimbatore Spinning Weaving Co. Ltd.[1974] 95 TTR 375 has observed that the Tribunal is not expected to take judicial notice of such substandard morality on the part of the assessee so as to enable them to go back on their own sworn statements. In the case in hand, once both the parties to the transaction i.e. the seller and the purchaser made an averment before the publ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntemplated by the Legislature, since the Income Tax Act, 1961 and the Gift Tax Act, 1958 are parts of an integrated scheme of taxation and the same amount which is chargeable as gift could not be intended to be charged also as capital gains. 20. Though section 52 of the Income Tax Act referred to by the Hon'ble Supreme Court stood omitted and even the Gift Tax Act also stood repealed, but the above proposition laid down by the Hon'ble Supreme Court can be well applied in the facts and circumstances of this case. 21. So far as the reliance of the learned counsel for the assessee, Sh. Mohinder Singh on the decision dated 26.07.2013 of the Hon'ble Allahabad High Court in the case of CIT V. Intezar Ali (ITA No. 162 of 2013) is concerned, in that case the seller had taken a like stand that the amount found deposited in his bank account was out of the money provided to him as sale consideration. Apart from that, he not only made a complaint to the registering authority that the sale deed has been registered at a value much below the amount, which he actually received, he deposited the entire amount in the bank and voluntarily filed return. The Tribunal under t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e extent of only Rs. 1,12,60,000/- instead of Rs. 2,52,00,000/-. He also observed that the assessee had not been able to prove the sources of deposits of cash of Rs. 22,50,000/-, he therefore confirmed the addition made by the AO. 7. Now the assessee is in appeal. 8. Ld. Counsel for the asasessee reiterated the submissions made before the authorities below and further submitted that the assessee alongwith co-owner sold 96 Kanal i.e; 12 Acres of land @ Rs. 21,00,000/- per acre and entered into an agreement with the purchaser. The said agreement was found which had been mentioned in para 3.5 of the assessment order and the purchaser Shri Jaggar Singh admitted the execution of agreement dt. 30/04/2010 but denied of making the payment of Rs. 2,52,00,000/- on account of purchase of agricultural land @ Rs. 21,00,000/- per acre. 8.1 It was further submitted that the purchaser Shri Jaggar Singh admitted in his statement that he had paid Rs. 40,00,000/- in cash on 30/04/2010 and Rs. 72,60,000/- on 03/01/2011 totaling to Rs. 1,12,60,000/- which was in accordance with the agreement to sell. However he denied the payment of Rs. 2,52,00,000/- which was mentioned in the agreement to sel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade by the AO and sustained by the Ld. CIT(A) was not justified. The reliance was placed on the following case laws : ACIT Vs. Shri Mohinder Singh in ITA Nos. 665 666/Chandi/2016 vide order dt. 16/01/2018 Shashi Kiran Vs. CIT [2010] 195 Taxman 332 (P H) Shri Mangat Singh Vs. The ITO in ITA No. 246/Chd/2018 vide order dt. 15/01/2019 Smt. Joginder Kaur and Ors S. Amritk Singh in RSA No. 2061 of 2007 (P H) Javvadi Koteshwara Rao Vs. Sonti Sambasiva Rao 2004 (1) ALD 629, 2004 (4) ALT 614 CIT Vs. Medical Trust Hospital 220 CTR 199 (Kerla) Ram Kishan and another vs. Bijender Mann alias Vijender Mann and others RSA No. 4946 of 2011 M/s Om Plantation Vs. ITO in ITA No. 1047/JP/2017 vide order dt. 09/10/2018 (Jaipur Trib) 9. In his rival submissions the Ld. DR reiterated the observations made by the authorities below in their respective orders and strongly supported the orders passed by them. It was further submitted that the purchaser Shri Jaggar Singh categorically stated that only amount of Rs. 40,00,000/- was given at the time of agreement to sell and the remaining amount of Rs. 72,60,000/- was paid at the time of registration. It was also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts of the sale agreement wherein payment of Rs. 40,00,000/- as an advance money was mentioned there was no occasion to doubt the other amount mentioned as sale consideration at Rs. 2,52,00,000/- i.e; Rs. 21,00,000/- per acre. As the assessee sold 12 acres of land, he received the total amount of Rs. 2,52,00,000/- out of which the cash amounting to Rs. 2,05,50,000/- was deposited on 04/01/2011 as the assessee had already received Rs. 40,00,000/- on 30/04/2010 at the time of entering into agreement to sell, the amount left was Rs. 2,12,00,000/- so there was no reason to doubt the deposit of Rs. 2,05,50,000/- out of the said amount of Rs. 2,12,00,000/- but the AO considered only Rs. 72,60,000/- [Rs. 1,12,60,000/- sale consideration (-) Rs. 40,00,000/- received as advance] and remaining amount of Rs. 1,32,90,000/- [ Rs. 2,05,50,000/- (-) Rs. 72,60,000/-] was added to the income of the assessee. In our opinion when the assessee received the amount of Rs. 2,12,00,000/- [ Rs. 2,52,00,0000/- (-) Rs. 40,00,000/-] on account of sale consideration as mentioned in the sale of agreement dated 30/04/2010. The said agreement was accepted by the AO as well as the purchaser so far as the advance m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reon. In fact the incidence of tax on the undisclosed sale consideration is much higher on the purchaser than on the respondent- assessee because respondent is called upon to pay tax only on capital gains whereas the purchaser pays tax at normal rates. When the purchaser acts upon his statement given under Section 132(4) in the course of search, his going back from his earlier statement in cross- examination in the assessment proceedings against the respondent cannot be taken on it's face value. We are of the view that the assessing officer rightly rejected the evidence of the purchaser given in cross-examination only as last effort to save the respondent-assessee. In fact, purchaser's statement given under Section 132(4) is not only supported and strengthened by subsequent offer and payment of tax on the additional income, but is also proved by the valuation report obtained by the department from the approved valuer who has valued the property at above Rs. 1.68 crores. Besides this, the purchaser himself got the property valued after purchase for availing bank loan wherein the valuation of the property is at Rs. 71 lakhs, which is the actual sale price at which the propert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... make it clear that the assessee will be entitled to apply for waiver of interest under Sections 234B, 234C, etc. 10.2 Similarly the Coordinate Bench of the ITAT Jaipur Benches, Jaipur in the case of M/s Om Plantation Vs. ITO, Jaipu in ITA No. 1047/JP/2017 held at page no. 8 to 11 as under: 6. We have considered the rival submissions as well as the relevant material on record. The assessee purchased the land situated at Bhankrota, Jaipur vide two sale deeds both dated 11/8/2005 for a total consideration mentioned in the sale deeds at Rs. 1,76,34,000/-. However, the Assessing Officer received the report of the DDIT(Inv) alongwith the details of the cash deposits in the bank accounts of the sellers and their relatives and further an agreement to sell dated 11/5/2005 wherein the consideration @ Rs. 28,25,000/- per bigha was agreed upon between the parties and part consideration was stated to have been paid at the time of agreement in cash as well as in cheque. The Assessing Officer has computed the total purchase consideration by adopting the rate of Rs. 28,25,000/- per bigha as stated in the agreement to sell dated 11/5/2005. Though the said agreement is not signed by both th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecorded by the Investigation Wing but there was tangible material in the shape of the bank accounts statements, agreement to sell and sale deeds which are of course not in dispute. The only dispute raised by the assessee is regarding the photo copy of the agreement and its evidentiary value, however, it is not the issue of legal enforceability of the said agreement and the claim under the agreement but the contents of the agreement which are to the extent corroborated by the independent evidence being sale deeds and further the bank statements of the sellers cannot be denied on the technical ground of admissibility. Therefore, once the payment of cash is reflected from all these documents as well as statements of the parties then the technical objection raised by the assessee will not help the case of the assessee. 10.3 While confirming the view of the Ld. CIT(A) it has further been held in para 6.2 of the order dt. 09/10/2018 by the ITAT Jaipur Bench in the aforesaid referred to case is as under: 6.2 The addition made by the Assessing Officer in the hand of seller U/s 68 instead of capital gain would not affect the merits of the addition made in the hand of the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer, we do not find any error or illegality in the orders of the authorities below, hence uphold the order of the ld. CIT(A) qua this issue. 10.4 In the present case also the assessee i.e; the seller as well as the purchaser acted in accordance with the contents mentioned in the agreement to sell dt. 30/04/2010 and the assessee received the amount on behalf of the co-owners and himself, out of the said amount, cash was deposited in the bank on the next day of getting the sale deed registered. The contents mentioned in the agreement to sell i.e; the payment of advance money of Rs. 40,00,000/- for sale of 12 Acres agricultural land, were accepted by the seller as well as the AO as genuine then there was no reason to doubt the genuineness of other part of the agreement to sell i.e; the 12 Acres of land was sold @ 21,00,000/- per Acre for a sum of Rs. 2,52,00,000/- which was sufficient to explain the deposit of Rs. 2,05,50,000/- on 04/01/2011 i.e; the next day of registration of sale deed. We therefore considering the totality of the facts as discussed hereinabove deem it appropriate to delete the impugned addition of Rs. 1,32,90,000/- made by the AO and sustained by the Ld. CIT( ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
