TaxTMI 
TaxTMI 
2020 (8) TMI 437
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....n rejecting or invoking the provision of Sec. 145(3) without issuing any show cause u/s 251 of the IT Act. Hence the addition so made by the AO and partly confirmed by the ld. CIT(A) and invoking the provisions of Sec. 145(3) is being totally contrary to the provisions of law and facts on the record and hence same may kindly be deleted in full. 3.1 Rs. 25,00,000/- : The ld. CIT(A) has grossly erred in law as well as on the facts of the case in confirming the addition of Rs. 25,00,000/- made by the ld. AO on account of cash deposits in the bank account which has been received against sale agreement of land at Sujangarh, which has also been returned to the buyer through cheque after some time due to cancellation of Agreement. Hence the addition so made by the AO and confirmed by the ld. CIT(A) treating the same as unexplained is being totally contrary to the provisions of law and facts on the record and hence same may kindly be deleted in full. 3.2 Alternatively and without prejudice to above it is submitted that if it is deemed or held that the assessee has sold the agriculture land than the gain received from that is exempt being the agriculture land u/s 2(14) (iii) and the AO ....
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....sed your inability to produce them for personal examination. Therefore, these persons were required to attend the office by issuance of summons u/s 131 for verification of the facts stated in the sale agreement, particularly why these persons agreed to purchase a land of 17 bigha situated in a remote village Tilap situated in Sujangarh Tehsil of Churu for consideration of Rs. 25,00,000/ -, which was much much higher than the rate of the land in that area (you yourself had sold 16 bighas of land for Rs. 8,22,000/- only in 28/1/2011 to Smt. Jhoomadevi W/o Mohan Ram of Ladnun). Further, there was a clause in the agreement that if the land is not registered within month of the agreement, i.e. 25/2/2011, the transaction will be treated as cancelled and the amount given to you will be returned to these persons. You are required to explain whether the amount of Rs. 25 lacs stated to have been received by you in cash has been returned to the aforesaid persons and if so, the explain the immediate source of this amount. Since you have not been able to explain the immediate source of income, I require you to show-cause as to why the amount should not be added to your total income in terms o....
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....ited in his bank account. These additional evidences are prepared after completion of assessment by the AO. The assessee had produced a copy of affidavit dated 01.03.2014 of Shri Rajaram Gurjar only whereas lkrarnama dated 25.01.2011 was made between the assessee and Shri Rajaram Gurjar & Shri Devesh Kumar. Shri Rajaram Gurjar in the said affidavit has stated that the lkrarnama was cancelled and he has received back Rs. 25 lacs between 18.03.2011 to 20.02.2014. However, during the assessment proceedings, the AO vide show cause dated 07.02.2014 asked the assessee to explain the immediate source of the amount returned to the said purchasers as no such balance was available in his bank accounts. But, the assessee also failed to explain the sources of such repayment. The other additional evidence produced by the assessee are the affidavits of witnesses namely Chandra Kunwar & Shri Varun Singh which are also prepared on 09.02.2016 wherein witnesses are trying to justify the said transaction but incorrect details of the said transaction are mentioned in these affidavits. The remaining amount of Rs. 9.50 lacs is mentioned by both parties to be given at the time of registration whereas....
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....ed. It is the onus of assessee to prove all 3 conditions that is identity creditworthiness and genuineness. Thus the claim of receipt of cash advance of Rs. 25,00,000/- is rejected. In para 8 and 9 of his order, the Assessing Officer observed that the rate of land according to which it was proposed to be sold was exorbitantly high. It is not acceptable that two residents from Jaipur agreed to purchase the land at Churu for such a high price. Thus I am of the view that Assessing Officer rightly made addition which deserves to be upheld. In alternate ground no. 3.2, assessee tried to contend that if explanation regarding source of cash deposit is not accepted and deemed as part of sale consideration of agricultural land, the same would be exempt. This plea is not tenable as assessee himself had filed the agreements and filed Rajaram Gurjar's affidavit dated 01.03.2014 stating that the sale was not executed and transactions were cancelled and part payment was received back in form of 2 cheques of Rs. 8,00,000/- and Rs. 10,00,000/- respectively. Besides, Rs. 7,00,000/- was received in cash on various dates in cash. Therefore, alternative ground of appeal is dismissed. Thus gr....
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....ther source than to this sale consideration or any other person other than Rajaram and Devesh and also there is no evidence on record that the assessee has repaid Rs. 18. Lac through cheque and Rs. 7.00 in cash to Sh. Rajaram Gurjar for other than to against to this cancellation of sale agreement. 13. It was further submitted that the ld. AO himself admitted that the notice u/s 131 has been served upon them. The reasons of non-appearing by the purchaser may be that the purchaser has not received full amount from the assessee and he does not want to come before income tax department or to save himself from to be exposed and there may be various other reasons which are not in the hands of the assessee. It is not case of the department that any statements have been recorded of Sh. Rajaram and he denied or has stated that he has not done any transaction with the assessee. Only for the reason that on the date he has not appeared, the true transaction supported with the vital evidences cannot be denied in absence of any contrary evidences. 14. It was further submitted that the contention made in the letter of affidavit should be accepted as truth unless rebutted. Because these affidav....
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....submitted that the original agreement was kept by the purchasers who has paid the money and despite our request he has not given to us and we were under impression that the same may stands destroyed by him (purchaser), when the deals has been cancelled, however the assessee had produced before the lower authority, the photo copy of agreement which was originally duly notarized on the same date by same notary public and is also being produce before your honor. However just some days before the assessee has been able to secure the original agreement from the purchaser after making repeated request and visits to purchaser and the same is being shown or produced before your honor for your kind verification, thus now the issue of non-production of original agreement does not survive and assessee deserve to succeed the matter. 17. Regarding the allegation that nothing has been mentioned in the sale agreement that how much amount was paid by Sh. Rajaram and how much amount was paid by Sh. Devesh Kumar and how much amount was paid to Sh. Rajaram and Sh. Devesh Kumar by the assessee if the agreement is cancelled. In this regard, it was submitted that the assesse has submitted the full deta....
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....and in so-called sale agreement which is higher by 400%. It was submitted that in such circumstances, it was incumbent on the part of the Assessing Officer to carry out further investigation in terms of seeking the personal appearance of the alleged purchasers. However, the assessee failed to produce the alleged purchasers and the summons issued u/s 131 also remained uncomplied with. Regarding the contention of the ld AR that subsequently money has been refunded to the purchasers due to cancellation of the sale, our reference was drawn to the remand report submitted by the Assessing Officer before the ld. CIT(A) and it was submitted that even the assessee failed to explain the repayment and the affidavits filed by the witnesses to the so-called agreement are not reliable and self-servicing evidences in absence of corroborative evidences. It was accordingly submitted that there is no infirmity in the order of ld. CIT(A) and the same may be confirmed. 20. We have heard the rival contentions and purused the material available on record. The limited issue for consideration is whether the assessee has satisfactorily explained the nature and source of cash deposit of Rs. 25 lacs in his....