2017 (7) TMI 1140 - AT - Income Tax

Unexplained source of cash balance - sale of property - contention of the assessee that he has received 12 lakhs but registered the document only for 2.04 lakhs - Held that - The agreement produced by the assessee was not registered and hence we are unable to accept the same as valid evidence - Once the immovable property is registered the sale consideration in the registered sale document is considered to be the final consideration since the stamp duty and other taxes for transfer of property was paid as per the consideration recorded in the registered sale deed. The contention of the assessee that he has received 12 lakhs but registered the document only for 2.04 lakhs is not acceptable argument and such double standards are not acceptable as held by Hon ble Supreme Court in the case of Coimbatore Spinning 14, 79, 100/- remained unexplained and rightly confirmed by the Ld. CIT(A). - Decided against assessee

Summary

Issues Involved:
1. Addition of ?14,79,100 as unexplained cash deposit.
2. Validity and admissibility of the unregistered sale agreement.
3. Determination of actual sale consideration for the agricultural land.

Issue-wise Detailed Analysis:

1. Addition of ?14,79,100 as Unexplained Cash Deposit:
The assessee declared an income of ?1,64,850 for the assessment year 2011-2012. However, during the assessment proceedings, the Assessing Officer (A.O) identified cash deposits totaling ?31,93,100 in the assessee's ICICI bank account. The A.O questioned the source of these deposits, and the assessee presented a cash book indicating an opening balance of ?14,79,100 as of 01/04/2010. The assessee claimed this amount originated from the sale of agricultural land. However, the A.O found the evidence insufficient and added ?14,79,100 to the returned income as unexplained cash deposit. The CIT(A) upheld this addition, stating that the documents provided by the assessee did not substantiate the claim.

2. Validity and Admissibility of the Unregistered Sale Agreement:
The assessee presented an unregistered sale agreement dated 08-08-2009, claiming the agricultural land was sold for ?12 lakhs per acre but registered at ?2.04 lakhs as per the Sub Registrar's rate. The CIT(A) and the Tribunal found this agreement invalid as it was on plain paper, unregistered, and lacked the purchaser's signature. The Tribunal emphasized that for a valid agreement, consent from both parties is necessary, and the document should be registered, especially post the amendment of the Registration Act by the Andhra Pradesh Government effective from 01.04.1999. The Tribunal referred to Section 17(1)(g) of the Registration Act, which mandates registration for agreements of sale of immovable property valued at ?100 and above.

3. Determination of Actual Sale Consideration for the Agricultural Land:
The assessee argued that the actual sale consideration was ?12 lakhs, supported by the unregistered agreement. However, the registered sale deeds indicated a total consideration of ?2.04 lakhs for the land sold in two transactions. The Tribunal held that the registered sale deed's consideration is conclusive, as it includes all terms and conditions of the sale. The Tribunal cited the Hon'ble Supreme Court's decision in Coimbatore Spinning & Weaving Co. Ltd and the Punjab and Haryana High Court's ruling in Paramjit Singh v. Income-tax Officer, which underscore that once a document is registered, its terms cannot be contradicted by oral evidence. Consequently, the Tribunal concluded that the assessee received only ?2.04 lakhs from the sale, not ?12 lakhs, and upheld the addition of ?14,79,100 as unexplained cash deposit.

Conclusion:
The Tribunal dismissed the assessee's appeal, confirming the CIT(A)'s order. The Tribunal found no infirmity in the CIT(A)'s decision and concluded that the source of ?14,79,100 remained unexplained. The appeal was pronounced dismissed on 13th July, 2017.