2017 (7) TMI 998 - AT - Income Tax

Unexplained cash deposits - Held that - The registration authority has recorded that both the seller and purchaser were present before him and both parties accepted the facts of the document after listening and understanding the same and accepted the fact of exchange of the sale amount recorded in the sale deed. In the sale deeds also it is clearly mentioned that both parties have read, listened and understood the contents of the deed. The assessee did not co-operate with the Assessing Officer and explained the source of deposits and only before the first appellate authority, the assessee made a claim that the cash deposits was out of sale of lands. The matter was then remanded to the Assessing Officer and he recorded the statement of the purchasers, wherein they denied of giving any extra or hidden money other than what was recorded in the sale deeds. We also note that the assessee has not informed to the registration authority about any sale amount received in excess of the sale consideration recorded in the sale deeds. The assessee also did not file any return of income declaring sale of land as agriculture income. We observe that the assessee did not file return of income or disclosed the source of cash deposit before the Assessing Officer even specifically asked by the Assessing Officer under the notice issued under section 148 and 142 (1) of the Act respectively. It is also not in dispute that those notices were not served on the assessee as on one occasion the assessee alongwith his son attended before the Assessing Officer and sought adjournment but subsequently did not comply with the assessment proceedings. In such circumstances, the claim of the assessee that actual amount transacted was more than the amount recorded in the sale deed, cannot be accepted. - Decided against assessee.

Summary

Issues Involved:
1. Legality and factual correctness of the order of the learned CIT(A).
2. Confirmation of the addition of ?53,37,000/- as unexplained cash deposits.
3. Nature of the appellant's income, specifically whether it was solely from agriculture.

Issue-wise Detailed Analysis:

1. Legality and Factual Correctness of the Order of the Learned CIT(A):
The appellant challenged the order of the CIT(A) on the grounds that it was against the law and facts. The Tribunal examined the procedural history, noting that the Assessing Officer (AO) issued several notices under sections 148 and 142(1) of the Income-tax Act, 1961, which the appellant largely ignored. The AO completed the assessment under sections 144/147, treating cash deposits of ?1,32,40,000/- as unexplained. The CIT(A) partially accepted the appellant's explanations and reduced the unexplained amount to ?53,37,000/-, which was contested in the appeal.

2. Confirmation of the Addition of ?53,37,000/- as Unexplained Cash Deposits:
The appellant argued that the deposits were from the sale of agricultural land, providing additional evidence including sale deeds, bank statements, and affidavits. The CIT(A) accepted deposits of ?1,40,000/- and ?64,00,000/- as explained but sustained ?53,37,000/- as unexplained. The Tribunal reviewed the sale deeds and noted that only ?13,63,000/- was recorded as sale consideration, with purchasers denying any additional payments. The Tribunal found that the appellant did not inform the registration authorities of any extra amounts received and failed to file a return of income declaring agricultural income. The Tribunal upheld the CIT(A)'s decision, stating that the appellant's claim of receiving more than recorded in the sale deeds was unsupported by credible evidence.

3. Nature of the Appellant's Income:
The appellant claimed to have no other source of income except agriculture. The Tribunal noted that the appellant did not file a return of income or disclose the source of cash deposits despite notices from the AO. The Tribunal found the appellant's explanation insufficient, particularly given the purchasers' statements and the appellant's non-cooperation during the assessment process. The affidavits provided by the appellant and his sons, as well as the village numberdar, were not accepted as reliable evidence without corroboration, especially in light of the purchasers' denials.

Conclusion:
The Tribunal concluded that the appellant failed to satisfactorily explain the source of ?53,37,000/- deposited in the bank account. The decision of the CIT(A) to treat this amount as unexplained investment was upheld, and the appeal was dismissed. The judgment emphasized the importance of credible evidence and compliance with procedural requirements in tax assessments. The decision was pronounced in the open court on 28th March 2017.