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TMI Blog2020 (8) TMI 85X X X X Extracts X X X X X X X X Extracts X X X X ..... ady reference, the grounds from ITA 124/CHD/2020 are reproduced hereunder: 1. That the learned Commissioner of Income Tax (Appeals)-Hisar has erred both in law and on facts in upholding the determination of total income of the appellant at Rs. 42,84,650/- as against declared income of Rs. 2,84,650/- in an order of assessment 24.12.2018 under section 143(3) of the Act. 2. That the learned Commissioner of Income Tax (Appeals) has further erred both in law and on facts in upholding an addition of Rs. 40,00,000/- representing alleged unexplained cash credit under section 68 of the Act. 2.1. That while making the above addition, the learned Income Tax Officer has failed to appreciate the factual substratum of the case, statutory provisions of law and as such, addition so made is highly misconceived, totally arbitrary, wholly unjustified and therefore, unsustainable. 2.2. That while confirming the above addition, the learned Commissioner of Income Tax (Appeals) has failed to appreciate the factual substratum of the case, statutory provisions of law and as such, addition so sustained is highly misconceived, totally arbitrary, wholly unjustified and therefore, unsustainable. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /-u/s 234A of the Act and interest of Rs. 3,97,221/- u/s 234B of the Act which are not leviable on the facts of the instant case. Prayer : It is therefore, prayed that, it be held that addition made and sustained by the learned Commissioner of Income Tax (Appeals) be deleted and appeal of the appellant be allowed. 4. Addressing the grounds, the ld. AR submitted that the issue at hand is fully addressed vide ground Nos. 1 & 2 and the main arguments on behalf of the respective assessees are addressed vide ground Nos. 2.3, 2.6 and 2.9. 4.1 Other grounds were stated to be supporting arguments assailing the impugned order. 4.2 Ground No. 3, it was submitted, is not being pressed and ground No. 4 is consequential, as such requires no specific adjudication. 5. In the light of these facts, the ld. AR invited attention to the impugned order so as to highlight the relevant facts as argued before the AO. It was submitted that the position of facts as made available and considered largely have been extracted in the assessment order in para 3 of the impugned order. The said submission of facts was not disputed by the ld. Sr.DR. 6. Referring to the record, it was submitted that the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant extract is reproduced hereunder : 7. Since this issue is a common issue in both the appeals, it would be appropriate to refer to the relevant document in the case of the husband Shri Rajiv Gupta which is at Paper Book page 40 of the said appeal. Attention was invited to the relevant entry 255 wherein the name of Shri Rajiv Gupta S/o Bhagirath Gupta alongwith signatures of Shri Rajiv Gupta are clearly given. In the signatures, there appears to be a 'G' in English also appears to be written and it was his submission that possibly the entry No. 254 who was Gurvinder, may have initially signed this name at the wrong place. Thus, as far as Shri Rajiv Gupta is concerned, there is no over-writing. The signature, it was submitted, is clear. The ld. Sr.DR's specific attention was invited to this document also. 8. Reverting back to the case of Smt. Monika Gupta as all the other facts remained identical, attention was invited to Paper Book pages 25 to 29 which contain the statement dated 10.12.2018 recorded by the AO of Shri Rajesh Kumar, one of the purchasers, It was his submission that Shri Rajesh Kumar and Shri Ravinder Kumar were brothers and their statements are near identical. All ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale, however the land prices nose-dived (mandi aane ki vejah se) he could not sell, however, it was submitted, Shri Rajesh Kumar clearly expressed that he was hopeful that he would be able to still raise the funds and complete the purchase as still on the date of recording the statement, there was still time available. Attention was invited to question No. 6 wherein the AO digging deeper enquired that as resident of Hansi, why was he contemplating settling or purchasing land near Mangala which was quite far. In response to the same, it was read out by the ld. AR that Shri Rajesh Kumar stated that most of his relatives reside near Hansi Kheda, Sirsa which is why he wanted to sell land and settle there. Apart from that, there was a paucity of water in the area where he was living and opposed to that in the area where he was contemplating purchase, there was an existing tube-well in the land and the water was good, sufficient and conducive for rice growing. Inviting attention to question No. 7, it was submitted that the AO not still believing the reasons further questioned the purchaser that had he personally seen the land which he was contemplating purchasing and could he describe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at Member, relative of Shri Rajesh Kumar, one of the purchasers which is an unrebutted fact. Even otherwise, it was his submission that there was no need to record the agreement to purchase in writing. The fact that the parties have exchanged monies relying upon thereto and ultimately settled the issues relying upon the compromise entered into are a matter of record. All parties have been examined, no contrary evidence is available except conjectures. Specific attention was invited to the fact that all the dates on which the agreement to execute the Sale Deed was extended is clearly set out therein, none of the parties dispute it. The fact that the purchasers could not fulfill the requirements of the contract is evidenced by the said document which was entered into on 29.01.2017. It has duly been signed by the assessee Smt. Monika Gupta, Shri Rajesh Kumar and Shri Ravinder Kumar, Shri Sita Ramm, erstwhile Sarpanch of Hansi Khera, Sirsa. Relative of Shri Rajesh Kumar is also a witnesses alongwith Shri Ashok Goyal and Shri Bhagirath Gupta, no doubt who were the assessee's witnesses, however, Shri Bhupinder Vinayak, Shri Surinder Kumar Garg, Shri Gobind Kanda were independent witn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2015 was an irrelevant consideration and the conjectures are not supported by any fact or legal consideration. Assessees have given valid reasons for wanting to relocate and all these evidences cannot be discarded. 13. The fact that the amount was forfeited after about 4 years of serious efforts to conclude the detail is a matter of record. Thus, where despite the best efforts of the purchasers, they could not go ahead and purchase the land due to lack of funds which also has been duly explained as direct result of fall in agricultural land prices are unrebutted facts on record. The fact that the price considered to be correct price for sale did not materialize so as to enable raising funds by the purchaser who wanted to sell and invest those proceeds in the purchase of the specific agricultural land from the assessees are unrebutted facts clearly on record. The fact that ultimately Rs. 10 lacs each has been returned back to the respective purchasers through banking channels by the assessee as is evidenced from para 1.16 of the written submissions made available to the Commissioner (Appeals) is also a fact which has conveniently been ignored and the statements, evidences, document ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee was the owner of specific piece of land measuring 43 kanal 11 marle 2 sarsai located in village Mangala, Sirsa The ownership of the assessee is not disputed. The persons with whom the Agreement for sale was entered into by Smt. Monika Gupta are identified as Shri Ravinder Kumar S/o Shri Nathu Ram and Shri Rajesh Kumar S/o Shri Nathu Ram resident of village Sekupura, Hansi on 15.05.2015. In the case of Shri Rajiv Gupta, the agreement is dated 27.04.2015, the purchasers are the same. The date for registration in both the Agreements was fixed as 19.04.2016 and as per the Agreement, the respective assessees had received, as per their claim, Rs. 40 lacs as earnest money each. It is a common stand in the case of both the assessees that purchases being common, Shri Ravinder Kumar and Shri Rajesh Kumar could not arrange the funds. 15.1 On a perusal of the grounds, it is seen that in both the cases the assessees are aggrieved by the addition of Rs. 40 lacs made by the AO. The explanation of the assessee that the same emanated from receipt of earnest money from Shri Ravinder Kumar and Shri Rajesh Kumar on account of Agreement, part sale of agricultural land was not accepted. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for limited scrutiny under CASS on the parameter 'High Cash in hand shown in Balance sheet as compared to preceding year and return of income filed after 07.11.2016'. Notice u/s 143(2) was issued on 18.09.2017 through 1TBA and sent on email. During assessment proceeding questionnaire dated 12.07.2018 was issued alongwith notice u/s 142(1) through ITBA and send on email. The assessee was asked to give a note on business activities. The assessee has earned commission income, interest, interest income and also earned the agriculture income during the year under consideration. The assessment is completed with the following observations:- 2. The assessee has produced the cash boom for the F.Y. 2015-16 relevant to A.Y. 2016 17 to justify the cash in hand of Rs. 83,39,887/- at the end of the financial year. From the perusal of cash book, it is noticed that the assessee has shown cash receipt amounting to Rs. 40,00,000/- on 15.05.2015 with the narration that the same has been received as 'Earnest Money from rec. from Ravinder Kumar & Rajesh Kumar on a/c of agreement for sale of agricultural land. The assessee was asked to justify the source o same with necessary documentary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as purchased the stamp papers on 15.05.2015 from the stamp vender Sh. Satpal Middha Stamp Vender. Rama. The copy of the relevant page of stamp sale register was called from the above mentioned vendor and copy of the same is placed on record. The secanned copy of the relevant page is produced as under:- 2.5 when this page is closely monitored, ti can easily be seen that there is overwriting on entry 439 to incorporate the name of the assessee in place of the original purchaser's name. In the name column, alphabets 'Monika' and alphabet W/o is written overwriting the name of original purchaser. Further, there are signatures of sh. Rajiv gupta and one more person at this entry, which clearly substantiates the fact that stamp paper was purchased on future dale and same was entered at Sr. No. 439 doled 27.04.2015 was over writing the name of original purchaser. Therefore, the above agreement was made to adjust the unaccounted cash in the books of accounts. 2.6 In order to unearth the facts involved in the case, summons u/s 131 was issued to the purchasers Sh. Ravinder Kumar S/o sh. Nathu Ram and Sh. Rajesh Kumar S/o sh. Nathu Ram resident of village Sekhupura, hansi on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... located in Mangala. Sirsa, because most of their relatives are resident of village Handikhera, sirsa and they wanted to shift near to their relatives. The distance between village Mangala and Handi Khera is aprox. 20 K.M. and agriculturists mostly lives at the place where his agriculture land is located. Hence, they have just made a fake story to justify the purpose of making the purchase of agriculture land. 2. 10 Purchasers during the statement have submitted that. As a source of advance for purchase of agriculture land from the assessee, they have arranged the funds from following sources:- (i) Rs. 7.5 Lakh from the sale of agriculture land. (ii) 14 15 from the income from agriculture lands. (iii) Reaminmg money income from relatives and relatives were later paid out of the withdrawal from the KCC limit of Rs. 10 lakh and Rs. 6.40 Lakh in the name of both the brothers. But, purchaser had not submitted any document evidence in support his claim made during the statement. 2.11 Both the purchasers during the statement were asked from where they were planning to arrange the funds of Rs. 1.25 crores to purchase the land from assessee on the date of registration. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s grater than Rs. 20,00,000/-. The above arrangement was made to escape the said amendment and introduce the unexplained cash into the books of the assessee before the amendment made into the Act. 2.15 The assessee belongs to Sirsa and the purchasers are the resident of village Sekhupura, Hansi. The agriculture land under consideration is located in Mangala, near Sirsa city. But, the stamp paper for the agreement of sale of agriculture land was purchased from Rama, sirsa. The distance of Rania from the purchasers and. Seller is aprox 140 KM. and 22 KM. respectively and distance of agriculture land under consideration from Rania is aprox./ 15 K.M.. In a normal agreement stamp is purchased from nearby area. These, facts prove that the agreement of sale between the assesse and the pruchaserers was not authentic. 2.16 From the perusal of agreement for sale, it is noticed that in the witness's signature, Sh. Bhagirath Gupta, Father-in-law of the assessee and Sh. Ashok Goyal, relative of the assessee had signed as a witness. Therefore, both the witness were from the seller's side. In normal circumstances, there are witness from both the sides, purchasers as well as seller, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter dated 19.1.2017 by the appellant to the Registrar 38 15.5 The Assessing Officer's observations and reasoning point-wise and para-wise was assailed with a detailed tabulated reply extracted at page 10 to 26 of the impugned order. The issue of over-writing was addressed. The case-law relied upon in support of the fact that for agriculture income, returns were not required to be filed and even if according to the Assessing Officer, for dairy income, the purchaser ought to have filed the return, the assessee could not be held liable. Casting the onus upon the assessee for ensuring the filing of return by the purchasers, it has been argued, was an unfair burden as the assessee had no occasion to advice the purchasers. Arguments and decisions were relied upon to assail that although the assessee was not required to explain the source of funds from the purchasers, however, since the purchasers themselves have appeared and given valid explanation, the same cannot be ignored. It has been argued that the AO's action to consider source of source was contrary to the legal position and even otherwise the sources are not upset or rebutted. The assessee's submissions further summed up i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd, documents regarding appearance before the Tehsildar, copy of panchayatirazinama. That cash book alongwith copy of statement of income, statement of affairs and capital accounts was also submitted alongwith reply. That summons for appearance of purchasers were also issued That the purchaser appeared before the Ld Income tax officer, ward 2, Sirsa on 10 12 2018 and their statement was recorded That both the purchasers have confirmed for execution of agreement for sale of land by the assessee to them They have also explained the earnest amount of Rs. 40.00,000/- given by them in cash They have also explained the source of their investment and also produced the documents regarding ownership of agriculture land owned by them That they have also confirmed tlie panchayatirezinam. That the date extended for execution of sale deed i e. 31 01 2019 is still pending and in their statement they have confirmed that they are trying to arrange the balance amount for getting sale deed of agriculture land in their favour. 1.13 That on law facts of the case the learned Income Tax Officer has erred that there is overwriting on entry number 439 of register of stamp vendor from whom stamps were p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umar 10,00,000 ii) 28 01 2019 Sh Rajesh Kumar 10.00,000 Total - 15.6 However, the arguments were considered to be not acceptable and the view of the AO for the reasons set out in the impugned order at para 5.1 which is more or less repetition of the assessment order has been confirmed. 15.7 For similar reasons, the addition has been confirmed in the case of Shri Rajiv Gupta also. 15.8 On a careful consideration of the facts, arguments and the respective findings, I notice that the ld. CIT(A) did not care to address specific para 1.13 in Smt. Monika Gupta's case. It is also seen that the ld. CIT(A) also has not cared to address the facts reproduced in the order itself in para 1.16. I notice that no evidence has been placed on record to discard the plethora of evidence by way of documents, Compromise Deed before Panchayat, the statements of the purchasers etc. It is also seen that no reasoning has also been placed on record to show how the evidences relied upon can be outrightly discarded. For the sake of repetition, it need be mentioned that the Compromise Deed is a deed wherein the signatories to the documents are not all related to the sellers, infact the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der Kumar admittedly did not have the entire funds available in cash and they were required to liquidify their assets by sale of agricultural land and raising loans from their relatives etc. and the fact that ultimately despite their best efforts and attempts of the parties after extending the date a few times, ultimately the funds could not be raised is a fact available on record. The fact that before the Panchayat as per the Compromise Deed available on record which also stands unrebutted on record, the purchasers were still hopeful of selling their lands and have made their statements before the AO and recorded in the Compromise Deed also that the land prices at the time of sale nosedived and this fact also stands unrebutted on record. No effort has been made by the tax authorities to show that the purchasers did not own the specific land contemplated for sale and that the prices infact did not drop and were infact relatively stable or rising. In the absence of any evidence whatsoever upsetting the plethora of evidences placed on record, I find no good reason to accept the claim of the revenue based on suspicion, surmises and conjectures. What is normal for a person today may va ..... X X X X Extracts X X X X X X X X Extracts X X X X
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