Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2015 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (10) TMI 178 - AT - Income TaxUnexplained cash deposits in bank - CIT(A) deleted the addition - Held that - Though it was stated before Assessing Officer and the Ld. CIT(A) that Power of Attorney was executed by her husband in favour of the assessee but copy of the power of Attorney has not been produced before the Assessing Officer and, therefore, the Ld. CIT(A) should have been little careful in asking for the power of Attorney but he simply believed this theory without examining the Power of Attorney. Before us also a copy of Power of Attorney is not filed. It is very difficult to ascertain in what circumstances the Power of Attorney was given by her husband. This fact itself is sufficient to disbelieve the story of Agreement to Sell entered by the assessee. Normally, no purchaser would agree to purchase the land from attorney holder until and unless such Attorney is duly registered or the persons owning the land becomes a confirming party in the Agreement to sell. As observed above, Power of Attorney has no been filed before us and the perusal of the Agreement to sell clearly shows that Shri I.D. Mehta who is husband of the assessee is not a confirming party in the Agreement to Sell. The perusal of the affidavits would show that exactly the same language has been used in all the affidavits. All the four persons have not stated how much money each one of them has paid. No specific source of the payment has been explained and it has been simply stated that they are agriculturists. When four persons have paid a sum of ₹ 43 lakhs the Assessing Officer could have verified the sources only if such persons were produced before him. We fail to understand how Ld. CIT(A) believed these affidavits particulars when the Assessing Officer had insisted on producing these persons. The affidavits are clearly in the nature of self serving documents and cannot be believed. Further there is not evidence why the deal did not mature. How the amounts were returned whether any receipts were taken or not is not clear. All these circumstances make the whole story not plausible. In our opinion, it seems to be only a story to explain the deposits of cash and does not have any substance. Therefore, we set aside the order of Ld. CIT(A) and restore that to Assessing Officer. - Decided in favour of assessee.
Issues:
1. Addition of unexplained cash deposits in the bank. 2. Validity of the agreement for sale of agricultural land. 3. Production of persons mentioned in the agreement. 4. Verification of sources of cash deposits. 5. Ownership of the land and Power of Attorney. Issue 1: Addition of unexplained cash deposits in the bank: The Revenue appealed against the CIT(A)'s deletion of the addition of Rs. 43,00,000 made by the AO on account of unexplained cash deposits in the bank. The AO observed that the assessee deposited cash in the bank and obtained FDRs against such deposits. The assessee claimed to have raised a loan from her husband and received advance against the sale of agricultural land. The AO added the sum to the income of the assessee, which the CIT(A) later deleted based on the explanation provided by the assessee. Issue 2: Validity of the agreement for sale of agricultural land: The Revenue contended that the agreement for the sale of agricultural land was not registered and lacked evidentiary value. The AO raised concerns about the ownership of the land, absence of receipts for advance payments, and the credibility of the agreement. The CIT(A) found the explanation satisfactory, noting that the land belonged to the assessee's husband, who had given Power of Attorney to her. The CIT(A) deleted the addition based on the confirmation by purchasers and the burden of proof discharged by the assessee. Issue 3: Production of persons mentioned in the agreement: The AO requested the production of persons mentioned in the agreement to verify the authenticity of the transaction. Despite multiple adjournments and summons, the persons were not produced. The Revenue argued that the affidavits filed were self-serving and should not have been accepted without the presence of the persons. The tribunal found the affidavits unconvincing and emphasized the lack of verification of sources due to the non-appearance of the mentioned individuals. Issue 4: Verification of sources of cash deposits: The Revenue questioned the sources of the cash deposits, highlighting discrepancies in the explanation provided by the assessee. The tribunal noted the absence of specific details regarding the payments made by different individuals and the lack of evidence supporting the transaction. The tribunal found the story presented to explain the cash deposits lacking in credibility and overturned the CIT(A)'s decision, restoring the matter to the Assessing Officer for further examination. Issue 5: Ownership of the land and Power of Attorney: The tribunal raised doubts regarding the ownership of the land and the validity of the Power of Attorney claimed by the assessee. The absence of concrete evidence, such as the Power of Attorney document, led to skepticism about the agreement's legitimacy. The tribunal emphasized the need for proper documentation and verification in such transactions to establish the veracity of the claims made by the assessee. This detailed analysis of the judgment covers the issues involved comprehensively, addressing the legal arguments, evidentiary considerations, and the tribunal's decision-making process.
|