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TMI Blog2023 (3) TMI 347X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) is also correct in observing that the other issues raised by the AO in the assessment order, i.e., the issue pertaining to the recipient having been alone at the time of the receipt of the amount, or the amount having been received on behalf of Shri Gurdev Singh, father of the assessee, and the issue of Circle rate of the property, are, at best, marginal issues, having no bearing on the decision of the issues at hand, i.e., the deposit of cash. Otherwise too, the response of the assessee with regard to these issues has not been at all rebutted before us, much less, successfully. The plausibility of the assessee's stand has been examined by us and it has been found to be in order, being self-evident there from. The assessee had explained the source of the cash deposited, to be refund of advance given for purchase of property in the earlier years. This source of cash could have been examined by the AO, in case of any doubt, by reopening the earlier year assessment. This was not done. Moreover, Sh. Inderjit Singh, the intending seller of the agricultural land, in his statement before the AO, confirmed the return of the advance amount. Shri Inderjit Singh had stated th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appeal. The Department, vide its Revised Application bearing No. DCIT (Intl. Taxation)/ITAT/2022-23/Judl dated 14.11.2022, while submitting the detailed reasoning, has requested for condonation of delay and prayed that the appeal may be treated within time. The said Revised application dated 14.11.2022 for condonation is reproduced below:- 3. We have considered the facts and reasoning given in the Department's Revised application dated 14.11.2022. In view of the detailed explanation given by the Department, the delay of 128 days in filing the appeal is condoned. 4. The revised Grounds of appeal taken by the Department read as under:- 1. Whether on the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 1,96,32,000/- on account of unexplained Cash deposited by the assessee jointly with his father ignoring the independent inquiry carried out in the case (subsequent to the assessment order in the case of Gurdev Singh). 2. Whether on the facts and circumstances of the case, the Ld. CIT(A) has erred in holding that evidence brought on record by the AO as irrelevant ignoring the fact that these established that exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t verifiable and needs to tax. I am therefore satisfied that the said income has escaped assessment. In view of the above facts, I have reasons to believe that income amounting to Rs. 1.95 Cr has escaped taxation for F.Y. 2010-11 relevant to A.Y. 2011-12 and the case needs to be opened u/s. 147. In order to assess this income and to assess any other income chargeable to tax which has escaped assessment and which comes to notice during the course of proceedings subsequently, proceedings u/s. 147 are required to be initiated by way of issue of notice u/s. 148 for the assessment year 2011-12. 7. The assessee stated before the AO, that the cash deposit of Rs. 1.95 crores had been assessed in the case of the assessee's father Shri Gurdev Singh in the same assessment year, i.e., A.Y. 2011-12, and that the same issue with the same amount of deposit and of the same account cannot be assessed again in the name of the joint holder of that account, that is, the assessee. 8. The AO found that in the Assessment Order dated 04.03.2016, for assessment year 2011-12, in the case of Shri Gurdev Singh, father of the assessee, there was no reference to the cash deposits issues. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e purchased by Shri Daljit Singh, assessee, was situated) was (as stated to have been gathered by the AO) Rs. 7,22,500/- per acre, or, approximately, Rs. 83,08,750/- for 11.5 acres, during F.Y. 2009-10, in which year, the agreement was entered into by the assessee, the Collector Rate would have been less by at least 25%, i.e., Rs. 62,31,563/- [Rs. 83,08,750/- (-) Rs. 20,77,187/-]. The AO observed that this being so, even if the market rate was three times more than the Collector rate, the land ought to have been sold for approximately Rs. 1.87 Cores, whereas according to the agreement submitted by the assessee, the land was to be purchased at the rate of Rs. 6.11 crores, which did not seem possible; that the assessee gave a huge amount of Rs. 2.90 crores, whereas the fair market value could at best be Rs. 1.87 crores. 11. The AO observed (para 7.2 of the assessment order) that secondly, the agreement contained a clause that if a party went against the agreement, or cancelled the agreement, the other party could file a court case against the errant party, or, it could claim double the earnest money, for violating the agreement; and that however, no court case was filed by Shri In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent, agreed to sell off the whole of his land. 18. The AO lastly observed (para 7.9 of the assessment order) that the contention of the Ld. Counsel for the assessee, that the original agreement dated 13.4.2009 had been destroyed, gave rise to much suspicion; that in the so-called cancellation agreement, this fact had not been recorded; that neither of the parties had made any such statement that the agreement had been destroyed; that contrarily, Shri Gurdeev Singh, himself a signatory to both the agreements, had stated that the original documents were with his son, Daljit Singh; and that on the other hand, Shri Inderjit Singh had maintained that the original documents and the cancellation documents had been handed over to the property dealer, the details of whom he did not remember. 19. On the basis of her above observations, the AO held (para 8 of the Assessment Order) that the cash deposits amounting to Rs. 1.95 crore were not explainable by the assessee. She, therefore, added back this amount to the income of the assessee, as being from undisclosed sources, under section 68 of the Act. 20. By virtue of the impugned Order, the Ld. CIT(A) has deleted the addition of Rs. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hough the completed assessment for A.Y. 2011-12 in the case of Shri Gurdev Singh, father of the Assessee was reopened on the basis of information about cash deposits of Rs. 1,95,00,000/-, no adverse view was taken with regard to it by the AO, having taking into consideration the facts that the source of this cash deposit was the receipt back of Rs. 2.90 crores, on account of cancellation of agreement dated 13.4.2009 between Shri Daljit Singh (Assessee herein), son of Shri Gurdev Singh, and Sh. Inderjit Singh son of Sh. Shamsher Singh, resident of Ghanuri Kalan, District Sangrur, Punjab, that due to cancellation of the said agreement, an amount of Rs. 1,93,000/- had been received back during the financial year 2010-11, i.e., Rs. 68 lacs in April, 2010, Rs. 35 lacs in May, 2010, Rs. 30 lacs in June, 2010, Rs. 10 lacs in August, 2010 and Rs. 50 lacs upto 31st December, 2010; that these amounts, as per claim of Shri Gurdev Singh, which claim had been examined by the AO, were deposited in the joint account held by Shri Gurdev Singh and his son, Daljit Singh (present assessee); that there had also been withdrawals from the other bank of Shri Gurdev Singh; that in support of this, Shri Gu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . There are also withdrawal from the other bank of the assessee. In support of this, the assessee has filed relevant documents which are placed on record which have been examined and verified. The case of the assessee's son Sh. Daijit Singh for A.Y. 2010-11 was completed in scrutiny by my predecessor. All these documents were also filed during the assessment proceedings of his son. In view of the above, no adverse inference is drawn. 25. Evidently, therefore, the AO, while passing the assessment order, lost sight of the aforesaid Office Note. Else, there was no occasion for the AO to have observed in para 4 of her Order, that .....There is no reference of cash deposits issue in this assessment order...... . 26. As such, this observation of the AO was a result of complete non-reading of the above-said Office Note forming part of the assessment order dated 4.3.2016, passed for A.Y. 2011-12 in the case of Shri Gurdev Singh, father of the assessee. 27. The Ld. CIT(A), on the other hand, has taken due cognizance of this Office Note while deleting the addition made by the Assessing Officer. The Ld. CIT(A) has, in para 5.8 of the Order under Appeal, observed that the princ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been examined by us and it has been found to be in order, being self-evident there from. 32. The assessee had explained the source of the cash deposited, to be refund of advance given for purchase of property in the earlier years. This source of cash could have been examined by the AO, in case of any doubt, by reopening the earlier year assessment. This was not done. Moreover, Sh. Inderjit Singh, the intending seller of the agricultural land, in his statement before the AO, confirmed the return of the advance amount. Shri Inderjit Singh had stated that when the payment was received by him, he received it alone and from his side, there was nobody present. The paper of the assessee would show his presence and the presence of his father and witnesses. 33. Apropos the AO's doubt with regard to the purchase of the stamp papers, in response to Question No. 26 asked of him by the AO, Shri Inderjit Singh, intending seller stated that it was the assessee Sh. Daljit Singh, who had purchased the stamp papers. Similar papers were purchased in the name of Shri Inderjit Singh, as per the stamp papers, which bore his name. The name of the purchaser of the stamp papers is immaterial i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... destroyed by the assessee, Daljit Singh, since he did not want them to be misused; that photocopies of the documents were available and the same were acknowledged by all the parties, i.e., the buyer, the seller and the witnesses; and that it was immaterial whether Gurdev Singh had signed or Daljit Singh had done so, as Gurdev Singh was the assessee's father. 39. So far as regards the AO's objection that the agreement dated 13.4.2020 was full of mistakes in figures and words, the stand of the assessee has been that a transaction, when acknowledged by all the parties to the agreement, and that too, before the very AO recording the statements, such errors are of no consequence. 40. In response to the AO's objection that the agreement is on a stamp paper of Rs. 100/-, whereas the minimum amount should be of Rs. 300/-, again it has been stated that the value of the stamp paper for agreement to sell is immaterial when the parties to the agreement acknowledged the terms and conditions contained therein, and that even if an agreement to sell is on plain paper, the same is valid in the eye of law. 41. Concerning the AO's doubt that Shri Inderjit Singh stated that no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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