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TMI Blog2014 (10) TMI 218X X X X Extracts X X X X X X X X Extracts X X X X ..... om her past savings during preceding period of 5 years. The assessee had not furnished details of withdrawals for household expenses neither during the assessment proceedings nor during the appellate proceedings, therefore, considering the old age of the assessee and other relevant factors like medical expenses etc. it can safely, be hold that the receipts from family pension as well as agricultural income were consumed by the assessee on household expenses and other day to day livelihood needs - it cannot be accepted that the assessee was actually in a position to accumulate savings from family pension and agricultural income - Therefore, the source of income of ₹ 1,35,000/- remained unexplained and the AO was fully justified in making addition to the assessee’s income u/s 69 of the Act – Decided against assessee. Advance receipt for sale of plots – Income treated as income from other sources - Nexus between the date of purchase of new property and the amount received by the assessee as advance - Held that:- Assessee purchased land from Smt. Subhadra Tyagi wife of Dr. S.C. Tyagi on 18.11.2005 and purchase price was ₹ 14,00,000 – all the sale deeds have been execu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngly hold that the explanation offered by the assessee was not satisfactory and the AO has erred on facts and in law in making the addition to the income of the assessee by holding the amount of ₹ 1,35,000/- as unexplained investment u/s 69 of the Income Tax Act 1961, (for short, the Act ). 4. The ld. counsel for the assessee further submitted that the assessee had proper source of income in the previous years relevant to the A.Y. under consideration from family pension and agricultural income which were not subjected to the Income Tax Act, in the preceding years. 4.1 The ld. counsel for the assessee further submitted that out of these tax free resources the assessee saved an amount of ₹ 1,35,000/- which was actually the saving collected during earlier years by the assessee and which was invested in the purchase of property, therefore, the AO was not justified in holding that the assessee never disclosed income to the department. 4.2 The counsel for the assessee also submitted that the fact of the earning from family pension and agricultural income, prior to relevant assessment year 2006-07 cannot be denied on the ground that the assessee did not disclose the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant. On the other hand it has been contended by the appellant that she had explained source of income in the previous years as family pension and agricultural income which were not subjected to tax in earlier years. It is observed that the appellant has earned average monthly pension of ₹ 4,600/- totaling to ₹ 52,800/- per annum. Besides that agricultural income has also been shown. . It appears that the appellant was regularly maintaining bank account No.9521 with Allahabad Bank and it has been claimed that since February, 2000, a sum of ₹ 7,09,000/-- were withdrawn from this account for justifying the cash in hand from past savings at ₹ 1,35,000/-. The appellant's argument goes against herself as average yearly withdrawal from February, 2000 to March, 2005 comes to ₹ 1,41,800/-. Thus entire pension income and other funds were consumed by the appellant in the past 5 years and balance as on 31-03- 2005 remained just ₹ 1,209/- only. The pattern of withdrawals shows that the appellant was solely dependent upon the pension income and the moment pension was credited in, the bank account, the same was' withdrawn in small amounts reflecting the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above, we observe that the ld. CIT(A) has confirmed the addition by holding that average yearly withdrawal from bank during February 2000 to March 2005 comes to ₹ 1,41,800/-, thus entire pension income and other funds were consumed by the assessee during the earlier 5 years and there was a balance of ₹ 1,209/- only as on 31st March, 2005. The ld. CIT(A) further held that the pattern of withdrawal shows that the assessee was solely dependend on the pension income and the moment pension income was credited to her bank account, the same was withdrawn in small amounts reflecting the actual consumption rather than the savings. The ld. CIT(A) further observed that had there been any surplus funds or savings, the same could have been in the form of bank deposits or FDRs but nothing of this kind of evidence was available with the assessee, therefore, it could not be believed that the assessee collected a sum of ₹ 1,35,000/- from her past savings during preceding period of 5 years. 9. The ld. CIT(A) further observed that the assessee had not furnished details of withdrawals for household expenses neither during the assessment proceedings nor during the appellate procee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the fact that there was no nexus between the date of purchase of property and the date of receipt of advance or sale consideration amount by the assessee. The ld. DR drawn our attention towards assessment order and submitted that the assessee invested ₹ 12,50,000/- towards purchase of land and the same was claimed to be an investment made from advance received from intended / proposed purchasers Shri Rukmesh Pal, Shri Rajesh Pal, Shri Ravindra Kumar Pal and Kuntesh Pal amounting to ₹ 5,00,000/-, advance from Shri Jeet Singh and Smt. Kusum Devi amounting to ₹ 5,00,000/-and advance from Shri Vijay Singh amounting to ₹ 2,50,000/-. (total ₹ 12,50,000/-) 14. The ld. DR vehemently contended that the assessee received payments from the purchasers in cash on 12.01.2006 i.e. on the date of execution of sale deed by the assessee and there is no stipulation in the sale deed about the amount and date of receipt of advance by the assessee. The ld. DR further contended that the assessee had purchase property on 18.11.2005 and the assessee received payment from said purchasers on 12.01.2006 therefore, it cannot be presumed that the investment in purchase of la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... early proved that Shri Jagjeet Singh and Smt. Kusum Devi, paid the said amount by cheques as advance to the assessee which were directly credited in the bank account of Mrs. Subhadra Tyagi and Shri Santosh Chand Tyagi (owner of the land which was purchased by the assessee on 18.11.05), therefore, impugned addition is liable to be deleted. The ld. counsel for the assessee drawn our attention towards paragraph 3.3 of the impugned order and reiterated assessee s submissions before the ld. CIT(A) which have been reproduced in the impugned order. 17. The ld. counsel for the assessee strongly contended that the assessee submitted copies of the passbook of the purchasers, copies of the pass book of the seller, copies of the passbook of the assessee herself, and copies of the purchase and sale deeds which clearly reflects the nexus between the amount received by the assessee as advance from the purchasers and its further utilizations for purchasing or for making investment in purchase of land. Therefore, the AO was not justified in making addition and the same was rightly deleted by the ld. CIT(A) on cogent and justified grounds. 18. The ld. counsel for the assessee also drawn out at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Smt. Kusm Devi ₹ 2,50,000/- 07-12-2005 Sh. Rukmesh Lal ₹ 5,00,000/- 12-01-2005 Smt. Rajesh Pal Sh. Ravindra Kuntesh pal Smt. Ramesho ₹ 2,40,000/- 13-03-2006 Rs.1490,000/- It has been explained that the appellant had received the amount of ₹ 12,50,000/- in advance against sale of plots of land/shops was made by the aforesaid persons and the same was further invested in the purchase of plot of land measuring 116.99 Sq. Mts. on 18-11- 2005. The appellant has also furnished affidavits of the aforesaid purchasers wherein the aforesaid purchasers have deposed to have advanced amounts to the original seller Sh. Santosh Chand Tyagi, original owner (husband of Smt. Subhdra Tyagi) against purchase of plots of land/shop. It has been argued that in the sale deeds no specific date has been written in respect of receiving the amount by the appellant and instead, the sentence kul vikraya mulya dhan dwitya paksh se nakad peshtar prapt kar liya hai .. The appellant has defmed the word Peshtar which is an Urdu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om customers but in fact were other receipts. However, the inference drawn by the AO is not backed by adverse material on record and therefore, such inference is based on presumption and accordingly rejected. The appellant by furnishing requisite details and evidences has established that the amount of Rs.l2,50,OOO/- represented advance received against sale of plots of land/shops. Thus in the light of the above facts, it is held that the AO was not justified to make addition at ₹ 12,50,000/-. The same is directed to be deleted. Ground of appeal No.3 is allowed. 20. As per the factual matrix of the case the assessee purchased land from Smt. Subhadra Tyagi wife of Dr. S.C. Tyagi on 18.11.2005 and purchase price was ₹ 14,00,000/- as per stipulations in the sale deed executed in favour of the purchaser assessee, at page no. 4 of the sale deed available from page nos. 22 to 32 of the paper book we observe that the seller has received entire consideration in cash before witnesses from the assessee (purchaser) on the same date i.e. 18.11.2005. 21. From the copies of the sale deed available from page nos. 33 to 81 of the paper book executed by the assessee seller in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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