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TMI Blog2022 (8) TMI 1432X X X X Extracts X X X X X X X X Extracts X X X X ..... .e; the next day of registration of sale deed. We therefore considering the totality of the facts as discussed hereinabove deem it appropriate to delete the impugned addition made by the AO and sustained by the Ld. CIT(A). X X X X Extracts X X X X X X X X Extracts X X X X ..... - Out of withdrawals on the same date, the cash was deposited on the same day due to non maturity of any agreement for purchase of agricultural land. 3 12.01.2011 Rs.l 1,50,000/- 4 13.01.2011 Rs. 1,00,000/- 5 03.02.2011 Rs. 10,00,000/- 6 07.02.2011 Rs.l,75,00,000/- Out of withdrawals on the same date, the cash was deposited on the same day due to non maturity of any agreement for purchase of agricultural land. Total Rs.5,92,00,000/- 5.3 The AO also recorded the statement of the assessee on oath in the presence of Shri Balwinder Singh S/o Shri Harbhajan Singh, his cousin on 02/01/2014. The assessee submitted a photocopy of the agreement dt. 30/04/2010 to sell the agricultural land to Shri Jaggar Singh and others. The agreement executed by Shri Sukhwinder Singh, his brotehr Shri Jaswinder Singh and their father Shri Balkar Singh S/o Shri Roop Singh for 12 acres @ Rs. 21 Lacs per acre, Rs. 40 lacs was received in cash as advance and promised to get sale deed registered before 05/01/2011. The AO asked the assessee to submit copy of original agreement as the copy of the agreement submitted was not registered with Revenue Department and even back of the stamp papers did ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s for sale agreement of Rs. 1,12,60,000/- . The purchaser Shri Jaggar Singh admitted the execution of agreement dt. 30/04/2010 but he denied of making payment of Rs. 2,52,00,000/- on account of purchase of agricultural land @ 21 lacs per acre on 03/01/2011. It was stated that due to recession, the rate of land was down and it was actually purchased at Rs. 1,12,60,000/- instead of Rs. 2,52,00,000/- and that the father of the assessee Shri Balkar Singh himself purchased the stamp papers of Rs. 5,63,000/- for executing sale deed at Rs. 1,12,60,000/-. The photocopy of the sale deed, receipt issued by SBI for Rs. 5,63,000/- on 03/01/2011 for purchase of stamp paper alongwith photocopy of challan having thumb impression of Shri Balkar Singh S/o Shri Roor Singh with signature of Naib Tehsildar, Dhanaula was also filed. Shri Jaggar Singh also submitted the copy of sale deed of the agriculture land from where payment was made to Shri Sukhwinder Singh in lieu of purchase of land. The source of payment of Rs. 40,00,000/- made on account of agreement executed with the assesse was also submitted alongwith the relevant documents. The assessee produced one of the witness of the agreement dt. 30/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 03-01-2011. You have also stated that Rs. 34,00,000/- and Rs. 4,00,000/- was deposited in SBI, Dhanaula on 30-04-2010 out of advance payment received Rs. 40,00,000/-from execution of agreement to sell agriculture land situated at Vill.Manna Pindi. 2- Sh. Jaggar Singh S/o Sh. Jang Singh S/o Sh. Mastan Singh R/o Barnala (purchaser of land) was called by issuing notice dated 03-01-2014 u/s 131 of the Income Tax Act, 1961. Sh. Jaggar Singh purchaser of land appeared before undersigned on 08-01-2014. His statement on oath was recorded in which he has denied of payment of Rs. 2,52,00,000/- in lieu of purchase of agriculture land situated at Vill. Manna Pindi on 03-01-2011 to you and your family members. He has admitted that he has paid Rs. 40,00,000/- in cash on 30-04- 2010 and Rs. 72,60,000/- on 03-01-2011. Hence, total payment has been made only Rs. 1,12,60,000/- instead of Rs. 2,52,00,000/- consequent upon title deed dated 03-01-2011. A copy of statement is enclosed herewith for necessary action at your end. The land in question has been purchased by Sh. Jaggar Singh alongwith his family members Sh. Jasbir Singh, Sh. Jagroop Singh S/o Sh. Jaggar Singh and Sh. Mahinder Singh S/o Sh. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to 03-02- 2011 in the bank account. The source of cash deposit in the bank account has not been explained with documentary evidence. 5. Hence, an addition of Rs. 1,55,40,000/- (Rs. 1,32,90,000/- + Rs. 22,50,000/-) for the A.Y. 2011-12 is proposed to be made u/s 69 of the Income Tax Act, 1961 on account of explained investment by treating it concealment and furnishing of inaccurate particulars of the income. 6. In the interest of natural justice once again an opportunity of being heard is afforded to you to submit your reply/explanation alongwith documentary evidence on the fixed dole failing which the case will be decided on merits. Please note that this is time barring assessment, no further adjournment/opportunity will be granted." 5.6 The AO also issued notice under section 131 of the Act to the remaining coowners of the agricultural land and their statements were recorded on oath on 18/02/2014 which had been reproduced at page no. 12 to 16 of the assessment order, for the cost of repetition the same is not reproduced herein. 5.7 The AO observed that the father of the assessee Shri Balkar Singh and his brother Shri Jaswinder Singh admitted that the land in question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as shown to him in the presence of assessee. iv) The copy of agreement submitted to the undersigned is not registered document with the State Revenue Authority or statutory body. v) The original agreement dated 30-04-2010 was not produced during entire assessment proceedings and he denied of having possession of original document. vi) The photocopy of the agreement dated 30-04-2010 submitted in this office do not bear name & address of the stamp vendor, serial no. of the register of issuing authority etc. From where genuineness of the document , may be verified. vii) The photocopy of unregistered agreement dated 30-04-2010 which do not bear name & address of the issuing authority has no value in the eye of law. viii) The sale deed dated 03-01-2011 is registered before State Revenue Authority which becomes final and copy of agreement dated 30-04-2010 cannot be relied upon in the absence of any legal documentary evidence. ix) As per statement of the assessee dated 19-03-2014, he has admitted that cash was carried out by himself through Car of a relative from Dhanaula to Patran and deposited himself in SBOP, Patran which is also evident from the signatures on pay-in- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... grieved the assessee carried the matter to the Ld. CIT(A) and submitted in annotated form as under: 6.1 The Ld. CIT(A) after considering the submissions of the assessee observed that there was an agreement for sale of rural agricultural land of 12 Acres for an agreed consideration of Rs. 2,52,00,000/- against which an advance of Rs. 40 lakhs was received by the assessee from the buyer to that extent there was a consensus ad idem between the assessee as seller and buyer Shri Jaggar Singh. However, when the sale deed was registered, the sale price depicted in the sale deed appears to have been customarily depressed to correspond with the circle rate for the singular purpose of reducing the liability of stamp duty, which by praxis was borne by the purchaser of the immovable property. The Ld. CIT(A) further observed that the sale price as per the registered deed was much less than the agreed price and yet it was accepted by the assessee in as much as stamp papers of the value commensurate with the sale price of Rs. 1,12,60,000/- only was purchased by the assessee's father as co-owner of the land in question which clearly pointed towards the agreement and connivance between both the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e deed registered at a lower rate at the instance of the purchaser is of no help to him. He has been a party to the conspiracy resulting into revenue loss to the State Exchequer. Even, it cannot be said that he had not got any benefit by falsely representing about the sale consideration. If, the purchaser had to pay higher stamp duty, then it accordingly will go on to reduce the sale consideration/amount payable to the seller as the purchaser takes into consideration the total amount which he would have to shell out of his pocket i.e. the sale consideration as well as the stamp duty and other charges." "19. Now, once it is held that the sale consideration is to be taken as per the registered document, what will be the nature of the extra amount received? As discussed above, the same cannot be said to be the amount received towards sale consideration of the land, rather, the same will constitute the extra money paid as consideration for the execution of the registered deed of sale of land and not for the sale of land itself. The same under the circumstances has to be taxed as income from other sources. Such an amount received over and above the sale consideration mentioned i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ike that the assessee in the instant case as an honest citizen had made a complaint to the registering authority to register the sale deed at actual price and deposited the entire amount in the bank, are missing. In the case in hand, the amount was recovered from the possession of Sh. Mohinder Singh, assessee, by the Police Authorities. The assessee has been a partner in the conspiracy to falsely represent about the sale consideration to the registration authorities and thereby resulting into payment of lesser stamp duty, of which the assessee, as discussed above, has also reaped the consequential benefits. Moreover, the question as to the nature of receipt and its taxability has not been gone into by the Hon 'ble Allahabad High Court. Moreover, with all the due respect, decision of the jurisdictional Punjab and Haryana High Court in the case of Paramjit Singh (supra) holding the inadmissibility of oral evidence in the presence of registered deed is binding on this Tribunal. Under the circumstances and in the light of the above referred to statutory provisions and case laws, the nature of receipt of the income over and above the registered sale consideration in the hands of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e namely Shr Balkar Singh admitted that the sale consideration of land was Rs. 2,52,00,000/- instead of Rs. 1,12,60,000/- as per agreement dt. 30/04/2010, reference was made to page no. 13 of the assessment order wherein Shri Balkar Singh in response to Question no. 7 stated the aforesaid version. The similar statement of Shri Jaswinder Singh brother of the assessee was recorded, he also in response to the Question no. 7 stated that the actual sale consideration of total land was Rs. 2,52,00,000/- instead of Rs. 1,12,60,000/-, as per agreement dt. 30/04/2010. 8.2 It was submitted that the cash of Rs. 2,05,50,000/- was deposited out of sale proceed of agricultural land in the saving bank account maintained with State Bank of Patiala. It was stated that the Ld. CIT(A) was not justified in sustaining the addition when in the agreement to sell, the rate of the land was clearly mentioned and the purchaser insisted to get the registration done on circle rate to save the stamp duty. It was contended that the assessee sold the agricultural land measuring 12 acres @ Rs. 21,00,000/- per acre for a consideration of Rs. 2,52,00,000/- out of which advance of Rs. 40,00,000/- was received on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. DR reiterated the observations made by the Ld. CIT(A) in para 13 of the impugned order. 10. We have considered the submissions of both the parties and perused the material available on the record. In the present case it is not in dispute that the assessee sold agricultural land admeasuring 12 Acres and as per the agreement to sell dt. 30/04/2010 the land was sold @ Rs. 21,00,000/- per acre in other words total sale consideration was at Rs. 2,52,00,000/- for 12 Acres land @ Rs. 21,00,000/- per acre. However the registration of sale deed was done at Rs. 1,12,60,000/- out of which Rs. 40,00,000/- was paid on 30/04/2010 i.e; at the time of entering into agreement to sell. The payment of the said amount of Rs. 40,00,000/- was not disputed either by the AO or by the purchaser of the land. The only dispute related to the total consideration which according to the sellers i.e; the assessee his brother and father was Rs. 2,52,00,000/- where as the purchaser Shri Jaggar Singh claimed that the total consideration for the land was only Rs. 1,12,60,000/- and stamp duty of Rs. 5,63,000/- was paid for the said amount and that the stamp papers were purchased by the assessee's father being th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the said agreement i.e; Rs. 2,12,00,000/- ( Rs. 2,52,00,000/- (-) Rs. 40,00,000/-) 10.1 On a similar issue their Lordship of the Hon'ble Kerala High Court in the case of CIT, Thiruvananthapuram Vs. Medical Trust Hospital [2008] 173 Taxman 384 (Kerala) held as under: 2. We have heard senior standing counsel Sri. P.K.R. Menon appearing for the appellant, and senior counsel Sri. N. Sukumaran, appearing for the respondent-assessee. While departmental counsel contended that CIT (Appeals) and tribunal have committed serious error in relying on the statement in the cross-examination by Sri. Satyabalan, counsel appearing for the assessee submitted tha/t statement given by Sri. Satyabalan before the department in the course of search under Section 132(4) cannot be relied upon against the respondent- assessee. Besides hearing counsel on both sides, we have also gone through the orders of the lower authorities. We are unable to uphold the order of the Tribunal for the reason that it is just based on a retracted statement given by the purchaser, namely, Sri. Satyabalan in cross-examination. It is the admitted position that besides giving statement under Section 132(4) before the Inspec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax assessment, wherein the valuation shown is only Rs. 20 lakhs, we are unable to accept this as correct valuation report because it is not contemporaneous with the sale and the valuation took place four years prior to the same. Moreover in the valuation report obtained by the department later, the valuer has stated about five storied building with a lift constructed by the respondent during 1989. We are of the view that the first statement given by the purchaser under Section 132(4) in the course of search gets strengthened and stands proved by the subsequent conduct in declaring additional income for assessment and in paying tax thereon. Even though senior counsel for the respondentassessee argued that the amount declared by the purchaser may represent either investment or expenditure, we find from the records that he has clearly stated that Rs. 41 lakhs offered by him is additional consideration paid by him for the property purchased from respondent-assessee over the value shown in the sale deed. It is a notorious fact that on account of high stamp duty prevalent in the State undervaluation is a normal course adopted by the parties to avoid stamp duty and huge expenditure on tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The details of the said cheque also find place in the registered sale deed dated 11/8/2005. Thus, the contents of the agreement to the extent of part payment of consideration has been established by the sale deed dated 11/8/2005. Therefore, even if the said agreement is not enforceable in law due to the non-bearing of the signature of the assessee and further due to non-registration, the contents of the said agreement which has been proved and corroborated by the sale deed go to establish the existence of the agreement between the parties. Further the details of the cash deposited in the bank account of the sellers and their relatives has been reproduced by the Assessing Officer in the assessment proceedings at page No. 4 and 5 of the assessment order as under: The dates of deposit of cash as well as cheques in the bank accounts of the sellers, their sons, grandsons and wife are clearly matching to the dates of agreement to sell and sale deed i.e. 11/5/2005 and 11/8/2005. All the deposits of cash in the bank accounts of these persons were made on the very next day of execution of agreement and sale deed respectively. In absence of any other source of income of the sellers, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition in respect of the unaccounted cash of Rs. Rs. 2,23,10,000/- paid by the appellant towards purchase of land situated at Bhankrota, Jaipur. The cash paid by the appellant over and above the sales consideration recorded in the sale deed was deposited by the sellers in their bank account. The bank manager in his statement recorded by the DDIT, Jaipur has confirmed that it was explained by the depositors that the cash being deposited by them was received by them on sale of the land (Page No. 2 & 3 of the assessment order). The statements of the sellers of property were also recorded u/s 131 and they also confirmed that the cash deposited by them in the bank accounts was received by them from M/s Om Plantation on sale of their land to M/s Om Plantation (Page No. 5 to 9 of the assessment order). The ITO, Ward - 7(2) was in possession of the copy of agreement to sale made by the assessee with the seller Shri Bhagwat Meena on 11.05.2005. In the agreement, there is mention of cash payment as well as payment by cheque. The payments by cheque recorded in the agreement is also found recorded in the bank statement of the seller. Thus, the genuineness of the agreement cannot be doubted. Dur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sited Rs. 11,50,000/- on 12/01/2011, Rs. 1,00,000/- on 13/01/2011 and Rs. 10,00,000/- on 03/02/2011, hence total cash deposited in the bank account was Rs. 22,50,000/-. He further observed that the assessee could not explain the source of cash deposited in the bank account with documentary evidences, accordingly the said amount was added to the income of the assessee. 13. Being aggrieved the assessee carried the matter to the Ld. CIT(A) who sustained the addition made by the AO. 14. Now the assessee is in appeal. 15. The Ld. Counsel for the assessee reiterated the submissions made before the authorities below and drew our attention towards page no. 79 of the assessee's paper book which is the copy of the cash flow statement and claimed that it was furnished before the AO as well as the Ld. CIT(A). It was submitted that the amount in question was deposited out of the cash withdrawal which was available with the assessee as per the cash flow statement however neither the AO nor the Ld. CIT(A) appreciated the facts under consideration in right perspective and neither the AO nor the Ld. CIT(A) commented upon the cash flow statement furnished by the assessee. He requested to restore ..... X X X X Extracts X X X X X X X X Extracts X X X X
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