Case Law Details
Geeta Devi Sharma Vs ITO (ITAT Jaipur)
The Income Tax Appellate Tribunal (ITAT) in Jaipur recently delivered a crucial judgment in the case of Geeta Devi Sharma Vs Income Tax Officer, providing significant insights into sale consideration disputes and cash deposit controversies. This article delves into the nuances of the case, highlighting the tribunal’s approach to resolving complex tax litigation issues.
Sale Consideration Dispute: In this case, it is noted that the assessee vide Ground of Appeal No. 3 challenges the addition of Rs. 35,36,100/- which consisted of three parts. The difference of Rs. 22,71,000/- between the sale consideration shown in the sale agreement dated 12.02.2012, and the one declared in the registered Sale Deed Rs 12 lacs. The lack of source of the payment of stamp duty and registration charges of Rs. 65,100/-. Lastly the absence of source of Rs. 12 Lakh paid by the appellant to the seller – Sushila Devi. With regard to the addition of Rs. 22,71,000, being the difference between the sale consideration found in the sale agreement and declared in the registered sale deed, the AO has placed reliance mainly on the agreement dated 12.02.20 12, as also on the statement of the Seller Shri Sushila Devi recorded on 27.03.2014 – Question 12 reproduced in the assessment order. After careful consideration of the material placed on record and the rival contentions however, we find that there are valid reasons not to believe the said agreement showing the sale consideration of Rs. 34,71,000/-. The appellant alleged that the figure of Rs. 34,71,000/- was not real, but was put by the broker, so also confirmed by the Seller – Smt. Sushila Devi in the same answer to question No. 12. The source of receipt of the agreement was the real estate broker Shri Durgesh Dave. The conduct of Ss. Dave was itself doubtful as the assessee filed First Information Report (FIR) against him. Even his bail application was rejected by the upper Mahanagar Magistrate. Though the complaint related to dishonor of cheques, but that shows the conduct of the person. Further it was merely a photocopy and not the original agreement itself, so as to be made a conclusive basis of making the addition. Furthermore, a careful perusal statement of Sushila Devi – Seller shows that she clearly admitted having sold the property for Rs 12 Lakhs only as the actual sale consideration. Such a statement was again, affirmed in her affidavit at the pg. 62 of Paper Book. The AO did not inquire the witnesses to this said agreement, but the assessee submitted affidavit of one of the witnesses Shri Satya Narayan Maheshwari (Copy placed at Pg. 64 of Assessee’s Paper book) who also confirmed the actual transition of sale at Rs. 12 Lakhs only. Later on Durgesh Dave also confirmed this fact of actual sale consideration at Rs. 12 Lakhs only. Even the DLC rate in the area, undisputedly stood at Rs. 12 Lakhs only, and not Rs. 34,71,000/-. The legal presumption raised under Section 50 C also supports the assessee. The AO thus, failed to establish the understatement of sale consideration, the onus of which was upon him. No other cogent evidence was brought on record to support the conclusion of understatement. Whereas the buyers and sellers in the presence of the Sub-registrar and the witnesses agreed for sale consideration of Rs. 12 Lakh only without any reference to earlier agreement, which was neither owned nor was acted upon. Now coming to the addition of Rs. 12,00,000/- w.r.t payment of the declared sale consideration, the AO made the addition for want of supporting evidence biz. bank statement. The ld. CIT(A) observed the affidavits filed do not show that how payment was received and transferred to the seller. The appellant claimed receipt of, loans/ financial assistance from Ram Prasad Sharma of Rs.4,00,000/-, Pradeep Jain Rs. 2,00,000/-, Satya Narayan Sharma Rs.1,00,000/- , Seema Sharma Rs.1,00,000/-, Umesh Kumar Sharma Rs.1,00,000/-totaling to Rs.9,50,000/- as per detail placed at pg.46 of the Paper book and in support affidavits are also available in the paper book. A perusal thereof shows that apart from affirming the fact of extending financial health, the cheques number with dates and the bank are duly mentioned therein. It is not disputed that these cheque numbers find place in the registered sale deed at pg.6 of the paper book hence, the fact of making payment by these persons directly to the seller is established. Although these affidavits were before the AO as sent during the remand proceedings, however, the AO failed to controvert the averments made therein hence as per the law well settled in the case of Mehta Parikh & Co. 30 ITR 181 (SC) the averments are binding upon the authorities. It is also settled that the AO cannot ask to prove source of source, once the existence, identity of the Creditor and the affirmation of getting loan from them, are established. We draw support from Labhchand Bohra V/s ITO (2008) 8 DTR 44 (Raj.) and Aravalli Trading Co. v/s ITO (2008) 8 DTR 199 (Raj). Thus, the appellant having discharged the initial onus and the AO failed to discharge the burden by making enquiries and bringing cogent evidence on record, we do not find any justification behind the addition made of Rs.9,50,000/-. As regards the balance amount of Rs. 2,50,000/- which was paid in cash to the seller by the appellant, the facts are not disputed that she has been filing a return of income in the past ranging between Rs. 1.65 to 2.02 Lakh and keeping in mind that being a female she was not supposed to incur expenditure, saving of a small amount of Rs. 2,50,000/- was not something abnormal. Looking to the totality of facts and circumstances she could have saved around Rs. 3.50 lacs to 4 lacs. Hence the source of Rs. 2.50 lacs stand explained.
Similarly, the payment of Rs. 65,100/- towards the stamp duty and registration charge being small amount and could be made out of the past savings of the family. We thus, find no justification behind the addition of Rs. 35,36,100/- and the same hereby deleted. This ground of the assessee is allowed.
Cash Deposit Controversy: The source of cash deposit was explained out of the past saving of the appellant which could be around Rs.5 to 6 lakhs from her business and Streedhan; from the past saving of her husband, Navender Kumar, who has been a central government employee and partly from the savings of Shri Umesh Kumar Sharma s/o the appellant. While considering the source of payment of sale consideration of Rs. 2.50 Lakh by the appellant herself, we have held that looking to the totality of facts and circumstances she could have saved that amount. In addition, the fact is not denied that her husband Navender Kumar was a central government employee and retired from the Post and Telegraph department after serving as a postman getting salary more than Rs.3 Lakh annually as claimed and thus considering the saving for a period of 10 years, only his past savings could be considered around Rs 2.5 Lakh as reasonable. However, we find that son Umesh Kumar Sharma has already contributed towards the payment of sale consideration of Rs.1,50,000/- Further contribution from him cannot be expected. Thus, considering the totality of facts & circumstances it would be reasonable that source is considered explained up to Rs.3,00,000/-and the balance Rs.2,00,000/- is considered as without any source and thus, addition to the extent to Rs.2,00,000/- is hereby sustained. The appellant thus, get relief of Rs.3,00,000/-. This ground of the assessee is partly allowed.
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