TaxTMI 
TaxTMI 
2012 (10) TMI 153
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....593/-, which was selected for scrutiny. The assessee derives income from salary, house property and interest income. The assessee was asked to explain the source and cash deposit of Rs.11,60,000/- in Bank of Rajasthan Ltd. Dehradun. The assessee filed written explanation before the AO, in which it was explained that the amount was deposited out of the sale proceeds of property sold last year, i.e., F.Y. 2004-05 relevant to assessment year 2005-06. She was required to furnish evidence in respect of her claim, i.e., to file copy of registered sale deed, which is essential document for selling out the property. It was stated that the said property was sold through power of attorney given to Smt. Sita Devi of Agra on 04.04.2003 on stamp paper of Rs.50/-, which was not a registered document. The AO found that the address of the assessee in this document shows she is resident of Nagla Dhani, Tehsil Fatehabad, Agra while the assessee was residing at Agra and resident of Agra. Further, it was explained on behalf of the assessee that the assessee could know the sale of property in F.Y. 2004-05 and received the money from Smt. Sita Devi in assessment year 2006-07 and deposited the money i....
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....a attended on 07.02.2011 and told that he had submitted his reply on 8.12.2010, other than that reply he has no reply or document for submitting before the A.O. Hence, on the basis of assessee's reply dated 8.12.2010 the Remand report is submitted as under: 1. Assessee has not submitted the copy of purchase deed and sale deed of the land which could prove the ownership of land as well as sale consideration. The assessee has submitted the copy of Khatony which shows that some land has been transferred but it is not ascertain from the khatony that the land was sold to society or other. 2. The assessee could not produce the proof or supporting evidence regarding sale consideration of land through power of attorney holder for which assessee had deposited a sum of Rs. 10,00,000/- and Rs. 1,60,000/- in her account the Bank of Rajasthan Ltd., Dehradun while she had her other A/c in Vijay Bank, Jeoni Mandi, Agra (A/c No. 5850) against the sale consideration of land situated at Nagla Dhami, Agra. 3. The copy of bank statement of the power of attorney holder Smt. Sita Devi was not produced which could prove that Smt. Sita Devi had given the amount of Rs.1,00,000/- and Rs.10,00,000/-....
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....ttorney to the same Attorney to execute the sale deed of land at village Kakretha, which was sold for a consideration of Rs.4,62,000/- to some person in the assessment year 2004-05 and when mother-in-law of assessee also realized that property has been sold by the Attorney, she realized the money and Rs.1,00,000/- was given to the assessee as gift. She had also filed revised return. It was also explained that statement of cash available with the assessee from 01.04.2003 to 31.03.2006 has already been submitted to explain availability of cash and cash flow statement was also filed. Since the power of attorney holder betrayed the assessee and was not co-operating the assessee, therefore, the assessee could not produce the copy of sale deed before the AO. The assessee filed certificate of donor of giving the gift. It was, therefore, explained that the source of both the amounts has been explained and the addition may be deleted. The ld. CIT(A) admitted those additional evidences u/r. 46A. The ld. CIT(A) from Khasra and Khatoni submitted by the assessee found that the land in question has been sold to Shri Balaji Sehkari Awas Samiti Ltd. Therefore, the AO was directed to make further v....
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....5 Rajeev Kumar 1117/16.12.2005 Rs. 9,00,000/- 5 16.12.05 Self/Cash-Advance 1114/16.12.2005 Rs. 50,000/- 6 16.12.05 S.N. Gupta 1113/16.12.2005 Rs. 3,16,700/- Thus against the sale consideration of the property, Smt. Neelam Gupta and Smt. Virendra Kumari Gupta have received a sum of Rs. 17,83,333/- and Rs. 9,00,000/- through the power of attorney holder during F.Y. 2005-06. Further, on perusal of the reply of the assessee dated 21.02.2011 which was submitted before your honour by the assessee during the course of appellate proceedings, it was found that as per para second of the facts of the case that the assessee had sold the property during the A. Y. 2004-05 and accordingly tax has been paid on capital gain determined on sale of the said land. In this way, as per reply submitted before your honour, it was established that the assessee smt. Neelam Gupta and her mother-in-law smt. Virendra Kumari have sold the said property during A.Y. 2004-05 and the capital gain so arises on sale of property was shown in the revised return filed by these assessees for A.Y. 2004-05. But as per sale deeds dated 16.12.2005 obtained from the office of the Su....
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....ent herewith for your kind perusal and necessary action at your end." 2.5 During the hearing before the ld. CIT(A), the assessee maintained that only one property was sold at Kakretha in assessment year 2004-05. Therefore, the assessee explained both the additions. The ld. CIT(A) considering the explanation of the assessee, remand report and the material on record, deleted both the additions. His findings in the appellate order from para 5.11 to 6 are reproduced as under : "5.11. I have gone through all the details collected by the AO during the course of remand proceedings and the arguments put forward by the AR during the appellate proceedings explaining the source of cash deposited in bank account. I have also examined the return of income for A.Y. 2004-05. From the return for A.Y. 2004-05, it is found that the appellant has declared sale of land at Kakretha for a consideration of Rs.9,25,000/-showing the date of sale as 04.04.2003 and after taking the indexed cost of acquisition at Rs.2,18,780/-, capital gain of Rs.7,06,220/- has been declared. From the copy of the agreement giving power of attorney to Smt. Sita Devi, it has been found that this agreement was executed on ....
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....ollected by the AO during appellate stage, I find that only one property was sold by the appellant i.e. land at Kakretha and she has given a valid explanation for showing capital gain on sale of this property in A.Y. 2004-05 despite the fact that this property was sold in subsequent year relating to AY 2006-07. Therefore, I am inclined to accept the argument of the Ld. AR that the capital gain was declared on the sale of land at Kakretha in the assessment year 2004-05 on the basis of the date of signing of Power of Attorney Holder Agreement prior to the assessment year in which the land was actually sold because of actual date of sale was not known to the appellant due to dispute with Power of Attorney Holder. The AO has also failed to produce any evidence that the sale consideration received by the appellant on sale of the property at Kakretha for which capital gain was declared in A.Y. 2004-05, was utilized in some other manner. However, irrespective of disputing the fact of declaration of capital gain on sale of land at Kakretha in AY 2004-05 by the appellant as explained by the Ld. AR before me and also shown in the return of income for AY 2004-05, the AO has admitted in his re....
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....urce of deposit of cash of Rs.11,60,000/-in her bank account is concerned out of the sale proceed of land at Kakretha village on which capital gain has already been paid in AY 2004-05 on the basis of date of execution of Power of Attorney Holder agreement and Rs. 1,00,000/- shown as receipt of gift from mother-in-law is also found to be explained and therefore, no addition on account of cash deposit made in her bank account totaling to Rs.12,60,000/-, as made in the assessment order, has been found to be sustainable and therefore, I delete the addition of Rs.12,60,000/- made in the assessment order on account of unexplained money. Accordingly, Ground nos. 2 to 4 are allowed. Ground no.1 is general in nature contending that order passed by the AO is bad in law and against the principle of natural justice. As I have already decided other grounds of appeal on merit, this ground is not required to be adjudicated upon as being general in nature. 5.15 On the basis of the details submitted by the AO during remand stage, though it has been found that the cash deposit made in the bank account of the appellant is explained and necessary relief was provided as explained in the previous par....
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....ls were collected by the AO during the appeal proceeding." 3. The ld. DR relied upon the order of the AO and submitted that objections of the AO have not been satisfied by the assessee. According to the remand report filed by the AO, the property was sold on 16.12.2005. Therefore, Annexure A1, i.e., cash flow statement for 01.04.2003 to 31.03.2004 showing the amount of Rs.9,25,000/- by the assessee is incorrect because the capital gain would fall in the assessment year 2006-07. The ld. DR submitted that no evidence has been furnished of receipt of cash by the assessee from the power of attorney holder. When the power of attorney holder has not given copy of sale deed to the assessee, there is no question of believing that Smt. Sita Devi, power of attorney holder would give huge cash to the assessee without executing any document. The ld. DR referred to page 3 of the paper book, which is power of attorney dated 04.04.2003 in which it is mentioned that no possession of the property has been handed over to Smt. Sita Devi. It was also submitted that the donor has maintained bank account, but gift was not given out of the bank account and as per remand report, furnished by the AO ....
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....oth the additions. 5. We have considered the rival submissions, perused the findings of the authorities below and considered the material on record. As regards the deposit of Rs.11,60,000/- in cash in the bank account of assessee, the AO has given specific finding for disbelieving the claim of the assessee because the assessee has not produced copy of registered sale deed and even Smt. Sita Devi, Attorney was not produced for verification. Further, the assessee was not aware of the names of the purchasers and that the assessee did not deposit the sale price in her bank account within the reasonable period. Even at the appellate stage, the assessee has not submitted copy of purchase deed and sale deed of the land to prove the ownership of the land as well as the sale consideration. Only copy of Khatoni was filed to show that some land has been transferred to Shri Balaji Sahkari Avas Samiti Ltd. Since the assessee took the plea before the authorities below that the amount deposited in the bank account is the sale proceeds of property sold in F.Y. 2004-05, therefore, the basic document to prove that the property was held by the assessee and sold through power of attorney are the....
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....ot have been relied upon by the ld. CIT(A). As per Annexure A1, it was prepared by the assessee for 01.04.2003 to 31.03.2004 and Rs.9,25,000/- has been shown on sale of land at Kakretha, but as per the remand report and explanation of the Samiti, the land was sold to Samiti on 16.12.2005, i.e., in the assessment year 2006-07 and therefore, the claim of assessee of showing capital gains in assessment year 2004-05 is also incorrect and the explanation of the assessee of receipt of amount in cash from Smt. Sita Devi is also incorrect. Further, no capital gain has been shown in the relevant assessment year 2006-07 would also support the case of the AO. The assessee before the AO also admitted that she could know sale property in F.Y. 2005-06 relevant to the assessment year 2006-07, therefore, there is no question of showing any capital gains in assessment year 2004-05. The assessee has also failed to explain that the amount allegedly shown to have been received in assessment year 2004-05 remained in possession of assessee in cash despite the assessee was maintaining bank account and the assessee failed to explain why the cash was not deposited in the bank immediately on receipt of the ....
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....Therefore, the ld. CIT(A) should not have deleted the addition. No alternate contention was raised before the authorities below. Further, there is entire unaccounted deposit in the bank account of the assessee. Therefore, there is no question of reducing the addition as per alternate contention of the assessee. We accordingly, set aside the order of the ld. CIT(A) in deleting the addition of Rs.11,60,000/- and restore the order of the AO. In the result, ground No. 1 of appeal of the Revenue is allowed. 6. As regards gift received by the assessee from her mothe-in-law, Smt. Virendra Kumari Gupta, the AO found that the assessee failed to prove the genuineness of the gift and creditworthiness of the donor. Despite the donor was maintaining the bank account, no amount was withdrawn from the bank account for giving gift to the assessee. The AO in the first remand report specifically noted that the assessee has failed to prove creditworthiness of the donor because in her bank account with Vijaya Bank, Agra, her bank balance was below Rs.1,00,000/-. No amount was withdrawn from the bank account to give as gift. Copy of Incometax return of the donor was furnished but no capital accou....
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....rs had with the assessee, what were the sources of funds gifted to the assessee and whether they had the capacity of giving large amounts of gift to the assessee. Further, the assessee was asked to appear in person before the Assessing Officer, but never appeared. The addition of Rs.20 lakhs was justified." 6.1 The Hon'ble Supreme Court in the case of CIT Vs P. Mohankala 291 ITR 278 held - "The assessee received foreign gifts from one common donor. The payments were made to them by instruments issued by foreign banks and credited to the respective account of the assessees by negotiation through a bank in India. Most of the cheques sent from aboard were drawn on the Citibank, N. A. Singapore. The evidence indicated that the donor was to receive suitable compensation from the assessees. On this material the Assessing Officer held that the gifts though apparent were not real and accordingly treated all those amounts which were credited in the account books of the assessees as their income applying section 68 of the Income-tax Act, 1961. The assessees did not contend that even if their explanation was not satisfactory the amounts were not of the nature of income. The Commissioner....