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2021 (5) TMI 966 - AT - Income TaxAddition for unaccounted cash - HELD THAT - As perusal of the statement, AO has observed that the assessee has purchased a land of 2 acres in his name as well as purchased a house in Hyderabad in his wife s name - This transaction itself has accepted by the assessee during the course of search proceedings at question answer No. 15. Therefore, we are of the view that the AO has rightly made the addition for unaccounted cash. The assessee has submitted before the CIT(A) wrong facts that in the particular land there was a well and bore-well, but, on perusal of the sale deed executed on 02/08/2012, nowhere it has been mentioned under the Declaration that there is a well or bore-well -When the property was purchased in 2001 was a dry agricultural land, but, subsequently, when sale was materialized on 02/08/2012, nowhere it is mentioned in the translated document that the land was agricultural land. Before the CIT(A) at para (c) the assessee has submitted agricultural operation is carrying on and the source of irrigation for the agricultural operations is the open well and also a borewell situated in the land. Therefore, the argument of the assessee that the said land is an agricultural land cannot be accepted. Earlier the sale agreement was made on two times i.e. 13/03/2012 and 23/07/2012 for a consideration of ₹ 62,00,116/- per acre and the same property has been sold on 02/08/2012 at ₹ 12,67,500/-, which is clearly proved that something has been concealed and during search the assessee clearly stated the actual facts which is clear from the statements recorded during the search and seizure. The statements are also supported that the assessee has made investment of ₹ 2 crore as per question answer No. 15 As relying on SUMATI DAYAL 1995 (3) TMI 3 - SUPREME COURT and DURGA PRASAD MORE 1971 (8) TMI 17 - SUPREME COURT we set aside the order of the CIT(A) and restore the order of AO in making the addition on account of unaccounted cash towards sale of land. Accordingly, the grounds raised by the revenue on this issue are allowed.
Issues Involved:
1. Legality and correctness of the CIT(A)'s order. 2. Deletion of addition of ?1,87,32,500/- by the CIT(A). 3. Explanation of receipt and utilization of sale consideration for land by the assessee. 4. Classification of the land as agricultural or non-agricultural at the time of sale. Issue-wise Detailed Analysis: 1. Legality and Correctness of the CIT(A)'s Order: The primary issue was whether the CIT(A) erred in law and on facts in their decision. The revenue contended that the CIT(A) failed to consider the findings and documents found during the search and seizure operation under section 153A of the Income Tax Act, 1961. The revenue argued that the CIT(A) should have examined the issue more thoroughly, including calling relevant parties for further clarification. 2. Deletion of Addition of ?1,87,32,500/- by the CIT(A): The CIT(A) deleted the addition made by the Assessing Officer (AO) of ?1,87,32,500/-. The AO had assessed this amount as unaccounted cash based on the search operation and subsequent statements. The revenue challenged this deletion, asserting that the CIT(A) did not adequately consider the evidence and findings from the search operation. The ITAT observed that the AO had rightly made the addition for unaccounted cash, as the assessee had admitted to receiving and utilizing the cash during the search proceedings. 3. Explanation of Receipt and Utilization of Sale Consideration for Land by the Assessee: The assessee, a GPA holder, was unable to satisfactorily explain the source of investment and the receipt of the sale consideration. The sale agreement dated 23rd July 2012 was not canceled, and the property was sold again on 2nd August 2012. The AO noted that the assessee had received payment as per the sale deed and had invested the sale proceeds in purchasing land and a house property. The ITAT found that the AO's addition of unaccounted cash was justified based on the statements and evidence gathered during the search operation. 4. Classification of the Land as Agricultural or Non-Agricultural at the Time of Sale: The revenue argued that the land in question was not agricultural at the time of sale and that no agricultural activities were carried out. The assessee claimed the land was agricultural, supported by documents like the pattadar passbook. However, the ITAT observed that the sale deed executed on 2nd August 2012 did not mention any well or bore-well, contradicting the assessee's claim. The ITAT concluded that the land was not agricultural at the time of sale, and the sale agreements indicated a lower sale price than previously agreed, suggesting concealment of facts. Conclusion: The ITAT set aside the order of the CIT(A) and restored the AO's order, making the addition of ?1,87,32,500/- for unaccounted cash towards the sale of land. The appeal of the revenue was allowed, and the ITAT relied on the judgments of the Hon'ble Supreme Court in the cases of Sumati Dayal Vs. CIT and CIT Vs. Durga Prasad More to support their decision. The judgment was pronounced in the open court on 28th May 2021.
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