AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (3) TMI 351
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....k account. There was however, no response from the assessee nor was any return of income filed. Subsequently, reasons for income having escaped assessment were recorded after taking approval from the Ld. Pr. CIT, Karnal and notice under section 148 was issued to the assessee. In response, the assessee filed his return of income and thereafter notices under section 143(2) and 142(1) were issued and necessary information was called for and examined by the AO. As per the AO, out of total cash deposit of Rs. 1,02,20,000/-, the assessee could only explain an amount of Rs. 52,14,270/- and balance amount of Rs. 50,05,730/- remained unexplained which was brought to tax in the hands of the assessee, and as against the returned income of Rs. 1,34,013/-, the assessed income was determined at Rs. 51,39,743/- vide order passed under section 147 read with 143(3) dt. 15/12/2017. 3. During the course of assessment proceedings, the assessee was directed to provide the explanation regarding the nature and source of cash deposited in his bank account. In his submission, the assessee submitted that the cash so deposited pertains to proceeds of sale of the property, cash received on account of sale ....
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....out the fact that the land being sold by him was got registered at the collector rate of Rs. 42,53,000/-. The assessee is an illiterate and he has no motive to get the sale deed of land registered at lower price than the market rate because the land sold was an agricultural land not being a capital asset and no capital gain arises on the transfer of this agricultural land within the meaning of IT Act. The assessee filed copy of agreement to sell with Smt. Bohati Devi which clearly shows that the sale consideration comes to Rs. 82,65,500/- and not Rs. 42,53,000/-. The amount was deposited on the same day when the sale deed was got registered. The assessee also requested for summoning of Smt. Bohati Devi. Smt. Bohati Devi was summoned by the AO and her statement was recorded. Smt. Bohati Devi although pretended to be uneducated but was well trained. In reply to a question whether she is known to Sh. Jagir Singh the assessee, she denied that she did not know Sh. Jagir Singh although she has purchased agricultural land from him. To all other questions, she denied of any knowledge on the ground that these were known to her father-in-law who has since expired. She did not deny the agreem....
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....out possessing any other document/information. It was submitted that during the course of reassessment proceedings, it was duly explained before the AO that the major amount of cash deposit is with regard to the amount received from sale of the property. The agreement to sell as executed with Smt. Bohati Devi was duly filed before the AO alongwith copy of the sale deed duly executed between the assessee and Smt. Bohati Devi. It was also explained to the AO that there are cash withdrawals earlier made from the bank accounts and which are re-deposited during the year. However, the reply of the assessee was not considered by the AO and also not properly appreciated by the Ld. CIT(A). Hence the addition has been confirmed in the hands of the assessee. 8. Further our reference was drawn to the statement of cash flow prepared on behalf of the assessee and the contents thereof read as under : Date Dr Cr Balance Source in case of Dr Use in case of Cr 10.04.2009 136580 136580 Agricultural Income (Admitted by AO) 12.04.2009 82808 219388 ....
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.... and the copy of the sale deed executed with her and it was submitted that from the perusal of the statement as recorded by the AO, it is very much clear that Smt. Bohati Devi has never denied the transaction with assessee. It was submitted that in her statement, she has clearly stated that transaction has been entered into with the assessee through her Father in Law who has since expired. It was submitted that the agreement to sell was duly carrying the signature of the assessee, thumb print of Smt. Bohati Devi and also the thumb print of two witnesses. Further it is also a matter of record that she has never denied that the thumb impression on the sale agreement do not belong to her. It was accordingly submitted that the AO was not correct in stating that Smt. Bohati Devi did not confirm the claim of the assessee. She has duly agreed that she has entered into a transaction of the property through her Father in Law and the AO could have made further enquiry by calling her husband Shri Raj Kumar who was physically present at the time of execution of final sale deed but he choose not to call him for reasons best known to him. In support, reliance was placed on the Jaipur Benches dec....
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....t is noted that on the basis of information that there were cash deposits in the bank account of the assessee, the case of the assessee was reopened to examine the nature and source of such deposits amounting to Rs. 1,02,20,000/-. The assessee has submitted that the major source of the cash deposits was on account of proceeds received from sale of the agriculture land. Besides, other sources of cash deposits were explained in terms of amount received by way of advance against sale of another piece of agriculture land, income from agriculture operations and earlier cash withdrawals which were re-deposited during the year. As per the AO, out of total cash deposits of Rs. 1,02,20,000/-, the assessee could only explain an amount of Rs. 52,14,270/- and balance amount of Rs. 50,05,730/- remained unexplained which was brought to tax in the hands of the assessee. The AO has accepted the explanation regarding receipts from agriculture operations, partially accepted the explanation regarding nature and source of receipts in cash being the sale proceeds from the sale of the agriculture land to the extent of sale consideration as per registered sale deed and not as per agreement to sell, and t....
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....per initial agreement to sell except for the value of sale consideration which is stated at Rs. 42,53,000/-. Here it is relevant to note that stamp duty has been determined on the basis of same consideration as so stated in the sale deed and therefore, the consideration so stated in the sale deed is as per prescribed circle rate at the relevant point in time. 17. Given the aforesaid documentation so submitted by the assessee wherein the contents of both the documents matches except for the quantum of sale consideration, the AO in order to examine the matter further, called for personal appearance of the buyer. On assessee showing his inability to get the buyer appear before the AO, the summons were issued u/s. 131 and statement of buyer Smt. Bhopati Devi was recorded. 18. On perusal of statement of Smt. Bhopati Devi so recorded u/s. 131, we find that Smt. Bhopati Devi has stated in response to question No. 4 that she is aware that the sale transaction for sale of agriculture land has been entered into in her name with Jagir Singh and in response to further question No. 5 and 6, she has stated that she is not aware of exact amount of sale consideration as the sale transaction ....
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....ort wherein the AO has pointed out that the sale deed dated 08.04.2009 shows the sale consideration of Rs. 6,45,000/-. The Ld. CIT(A) has consequently allowed the claim of the assessee only to the extent of Rs. 6,45,000/- as stated in the sale deed. The Bench has raised a query about the discrepancy in the name mentioned in the sale deed and the name of the assessee appearing in other records. The Ld. AR has pointed out that the assessee Shri Pappu Ram is also known as @ Prabhu Ram. Thus, in the sale deed of the name of the assessee appearing as Shri Prabhu Ram. After verification of the record we are satisfied that the name appearing in the sale deed alias name of the assessee. The AO has also not disputed the fact that the assessee is one of the joint owners of the land which was sold vide sale deed 08.04.2009. We further note that the cash of Rs. 27,50,000/- was deposited in the bank account of the assessee with Oriental Bank of Commerce, Kishangarh on 09.04.2009. The date of cash deposit is subsequent to the date of sale deed dated 08.04.2009 which prima facie shows that the source of cash deposit has a direct nexus with the sale transaction of the land sold by the assessee joi....
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....ture of the assessee and further due to non-registration, the contents of the said agreement which has been proved and corroborated by the sale deed go to establish the existence of the agreement between the parties. Further the details of the cash deposited in the bank account of the sellers and their relatives has been reproduced by the Assessing Officer in the assessment proceedings at page No. 4 and 5 of the assessment order as under : S.No . Name of person Bank account No. Deposited cash amount Date Relation with the seller 1. Smt. Dhapu Devi Meena 210501000 32,74,000/- 12/08/2005 Seller of land 2. Sh. Dulharam Meena 1007813 1,50,000/- 10,00,000/- 1,60,000/- 14/05/2005 12/08/2005 16/08/2005 Do 3. Sh. Ballu Ram Meena 1007108 4,00,000/- 11,70,666/- 14/05/2005 12/08/2005 Do 4. Sh. Harphool Meena 1004534 11,70,667/- 12/08/2005 Do 5. Sh. Satendra Basanwal 1007978 14,00,000/- ....
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....o have confirmed the receipt of cash and deposit of the same in the bank account. Thus, we find that the assessment framed by the Assessing Officer is not solely based on the statements recorded 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." In view of the facts and circumstances of the case when the deposit of cash in the bank account is contemporaneous to the transaction of sale of land then in the absence of any....