TaxTMI 
TaxTMI 
2023 (3) TMI 347
X X X X Extracts X X X X
X X X X Extracts X X X X
....peal is condoned. 4. The revised Grounds of appeal taken by the Department read as under:- 1. Whether on the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 1,96,32,000/- on account of unexplained Cash deposited by the assessee jointly with his father ignoring the independent inquiry carried out in the case (subsequent to the assessment order in the case of Gurdev Singh). 2. Whether on the facts and circumstances of the case, the Ld. CIT(A) has erred in holding that evidence brought on record by the AO as irrelevant ignoring the fact that these established that explanation and evidence given by the assessee was created as an afterthought and did not represent reality. 3. Whether on the facts and circumstances of the case, the Ld. CIT(A) has erred in relying on assessee's explanation, based on copies of documents produced by ignoring the facts that the assessee could not produce the original of the documents and the documents were unregistered and the contents of documents were held as non-reliable during assessment proceedings. 5. The facts, as narrated in the assessment order dated 31.12.2018, are as follows. 6. The AO rec....
X X X X Extracts X X X X
X X X X Extracts X X X X
....12." 7. The assessee stated before the AO, that the cash deposit of Rs. 1.95 crores had been assessed in the case of the assessee's father Shri Gurdev Singh in the same assessment year, i.e., A.Y. 2011-12, and that the same issue with the same amount of deposit and of the same account cannot be assessed again in the name of the joint holder of that account, that is, the assessee. 8. The AO found that in the Assessment Order dated 04.03.2016, for assessment year 2011-12, in the case of Shri Gurdev Singh, father of the assessee, there was no reference to the cash deposits issues. Thereupon, the AO asked the assessee to provide the details of the original agreement which was cancelled, for which, as stated by the assessee, the assessee had received back the amount. In response, the assessee stated that only a photocopy of the Panchayati Mansukhi Agreement was available with him, and the original might be with the assessee in France; and that the original Iqrarnama had been destroyed at the time of entering into the Panchayati Mansukhi Agreement and only a photocopy of it was available. 9. The AO issued summons u/s. 131 of the Act to Shri Deepak Bedi, who was one of the witnesse....
X X X X Extracts X X X X
X X X X Extracts X X X X
....essee, the land was to be purchased at the rate of Rs. 6.11 crores, which did not seem possible; that the assessee gave a huge amount of Rs. 2.90 crores, whereas the fair market value could at best be Rs. 1.87 crores. 11. The AO observed (para 7.2 of the assessment order) that secondly, the agreement contained a clause that if a party went against the agreement, or cancelled the agreement, the other party could file a court case against the errant party, or, it could claim double the earnest money, for violating the agreement; and that however, no court case was filed by Shri Inderjit Singh, against the assessee, rather, he returned the entire earnest money to the assessee. 12. The AO observed (para 7.3 of the assessment order) that thirdly, as per FEMA regulations and RBI instructions, NRIs can-not purchase agricultural land in India without permission; that the assessee NRI had not produced any evidence that he had taken any permission to purchase agricultural land; and that hence, the agreement entered into by the assessee was illegal. 13. The AO further observed (para 7.4 of the assessment order) that as available from the photocopies of the documents, as filed by the assess....
X X X X Extracts X X X X
X X X X Extracts X X X X
....it Singh had maintained that the original documents and the cancellation documents had been handed over to the property dealer, the details of whom he did not remember. 19. On the basis of her above observations, the AO held (para 8 of the Assessment Order) that the cash deposits amounting to Rs. 1.95 crore were not explainable by the assessee. She, therefore, added back this amount to the income of the assessee, as being from undisclosed sources, under section 68 of the Act. 20. By virtue of the impugned Order, the Ld. CIT(A) has deleted the addition of Rs. 1,96,32,000/- made by the AO. Aggrieved, the Department is in appeal before us. 21. Challenging the impugned order, the Ld. DR has contended that the Ld. CIT(A) has erred in deleting the addition correctly made by the AO; that while doing so, the Ld. CIT(A) has gone wrong in holding that the evidence brought on record by the AO is irrelevant, failing to consider that such evidence rather established that the explanation and evidence given by the assessee was, in fact, created evidence and merely an afterthought, and it did not represent the reality; that the Ld. CIT(A) erroneously relied on the Assessee's explanation, ba....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nt, an amount of Rs. 1,93,000/- had been received back during the financial year 2010-11, i.e., Rs. 68 lacs in April, 2010, Rs. 35 lacs in May, 2010, Rs. 30 lacs in June, 2010, Rs. 10 lacs in August, 2010 and Rs. 50 lacs upto 31st December, 2010; that these amounts, as per claim of Shri Gurdev Singh, which claim had been examined by the AO, were deposited in the joint account held by Shri Gurdev Singh and his son, Daljit Singh (present assessee); that there had also been withdrawals from the other bank of Shri Gurdev Singh; that in support of this, Shri Gurdev Singh had filed relevant documents, which were placed on record and which had been examined and verified by the AO; that Assessment for assessment year 2010-11 in the case of Shri Daljit Singh (present assessee), son of Shri Gurdev Singh had been completed in scrutiny; and that all these documents had also been file in the assessment proceedings of Shri Daljit Singh (present assessee). 24. All the above facts were recorded in an Office Note forming part of the assessment order dated 4.3.2016, passed for A.Y. 2011-12, in the case of Shri Gurdev Singh, father of the assessee. A copy thereof has been filed before us at pages 6 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ence of cash deposits issue in this assessment order......". 26. As such, this observation of the AO was a result of complete non-reading of the above-said Office Note forming part of the assessment order dated 4.3.2016, passed for A.Y. 2011-12 in the case of Shri Gurdev Singh, father of the assessee. 27. The Ld. CIT(A), on the other hand, has taken due cognizance of this Office Note while deleting the addition made by the Assessing Officer. The Ld. CIT(A) has, in para 5.8 of the Order under Appeal, observed that the principal deposit has already been examined (by the AO) in the case of Shri Gurdev Singh, father of the assessee, for A.Y. 2011-12; that the Office Note concerning that Assessment clearly refers to the same amount of Rs. 1.95 cores, which was the basis of reopening of the assessment; and that in those assessment proceedings, the proposed buyer of the land, the agreement relating to which land was cancelled (i.e., Shri Inderjit Singh) himself certified the source of the said cash. 28. The observations made by the Ld. CIT(A) in para 5.8 of the impugned order are reproduced below, for ready reference: "5.8 It is therefore seen that the principle deposit has already b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he assessee would show his presence and the presence of his father and witnesses. 33. Apropos the AO's doubt with regard to the purchase of the stamp papers, in response to Question No. 26 asked of him by the AO, Shri Inderjit Singh, intending seller stated that it was the assessee Sh. Daljit Singh, who had purchased the stamp papers. Similar papers were purchased in the name of Shri Inderjit Singh, as per the stamp papers, which bore his name. The name of the purchaser of the stamp papers is immaterial in the case of Real Estate, such stamp papers being normally purchased in the name of the seller. 34. So far as regards the AO's doubt that as per Shri Inderjit Singh, either Shri Gurdev Singh, father of the assessee, or his associates, had received money, whereas Shri Gurdev Singh had stated that Shri Inderjit Singh had deposited the money in their account and had given them the receipts, the rebuttal on behalf of the assessee is that the factum of refund was admitted by the intending seller, Shri Inderjit Singh, and that the AO did not question Shri Inderjit Singh concerning the source of the refund. 35. Apropos the AO's concern regarding the Collector rate, the ass....
X X X X Extracts X X X X
X X X X Extracts X X X X
....0. In response to the AO's objection that the agreement is on a stamp paper of Rs. 100/-, whereas the minimum amount should be of Rs. 300/-, again it has been stated that the value of the stamp paper for agreement to sell is immaterial when the parties to the agreement acknowledged the terms and conditions contained therein, and that even if an agreement to sell is on plain paper, the same is valid in the eye of law. 41. Concerning the AO's doubt that Shri Inderjit Singh stated that no Member of any Panchayat intervened in the cancellation agreement, once again, it has been stated that when the parties to the agreement to sell agree to the cancellation of the agreement, no intervention of Panchayat is required, there being no dispute between the parties. 42. To the question as to why the seller, Shri Interjit Singh agreed to sell off his entire agricultural land of 57 bighas, it has been contended that this is entirely the outlook of the seller and the AO cannot superimpose his thinking over that of the owner of the land. 43. Regarding the AO's conclusion that none of the parties had stated that the agreement dated 13.4.2009 had been destroyed and Shri Gurdev Singh h....