V. Nagarajan Vs ITO (ITAT Chennai)
Facts- The only issue in this appeal of the Assessee is against the order of the CIT(A) confirming the action of the Assessing Officer in making an addition of Rs.2.20 crores as unexplained cash deposits in the Bank account, despite the Assessee giving evidences that the cash deposits are out of sale consideration of agricultural land of assessee’s mother.
Conclusion- The assessee deposited this amount of Rs.2.20 crores in his bank account maintained with Punjab National Bank and the inference in which the normal man will draw is that the amount cannot be from any other source except from the transaction of sale of land because it is common in the transactions of immovable properties that there is under hand transactions. The presumption goes in favour of assessee that the cash deposit in bank account of assessee maintained with PNB on 22.09.2014 amounting to Rs.2.20 crores is coming from the sale transaction of agricultural land by the mother and the legal heirs of the mother including the assessee.
The assessee produced a definite evidence i.e., sale agreement which is entered into for an amount of Rs.2,85,00,000/- on 14.08.2014 for sale of this agricultural land. The assessee has fairly established the fact that the cash deposits are out of sale consideration as recorded in the agreement of sale. In view of the above given facts and circumstances of the case, we are of the view that the cash deposit made by assessee amounting to Rs.2.20 crores are arising out of sale of agricultural land by the assessee’s mother including assessee and hence, this cannot be treated as unexplained cash deposit.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
This appeal by the Assessee is arising out of the order of the Commissioner of Income Tax (Appeals)-1, Trichy in I.T.A. No.158/2017-18/CIT(A)-1/TRY dated 01.02.2019. The Assessment was framed by the Income Tax Officer, Ward-1(1), Trichy for the Assessment Year 2015-2016 u/s.143(3) of the Income Tax Act, 1961, (hereinafter ‘the Act’) vide order dated 28.12.2017.
2. The only issue in this appeal of the Assessee is against the order of the CIT(A) confirming the action of the Assessing Officer in making an addition of Rs.2.20 crores as unexplained cash deposits in the Bank account, despite the Assessee giving evidences that the cash deposits are out of sale consideration of agricultural land of assessee’s mother. For this, the Assessee has raised the following grounds 1 to 9, as under.
1. The order of the Commissioner of Income Tax (Appeals)-1, Trichy is opposed to law, facts and circumstances of the case.
2. The Commissioner of Income Tax (Appeals) erred in not considering the sale agreement signed by the purchaser.
3. The learned Commissioner of Income Tax (Appeals) erred in treating the entire cash deposits were not of the sale consideration, though the Assessee has provided proof for connection between the money deposited in the bank account and the money mentioned in the sale agreement.
4.The total sale consideration was Rs.2,80,75,800/- and because of insistence of the buyer to save the stamp duty, the sale consideration was disclosed in the sale deed as Rs.60,75,800/-
5. The learned Commissioner of Income Tax (Appeals) failed to consider that the Assessee is not having any other sources of income so as to generate undisclosed income of Rs.2.20 crores.
6. Mere rejection by the purchaser regarding the “on-money” though entered into a sale agreement is not the reason for addition as other sources.
7. The Commissioner of Income Tax (Appeals) failed to consider that the entire sale consideration was received and deposited on the same date and there is link between cash deposits and sale of agricultural land, as per the sale agreement.
8. The Commissioner of Income Tax (Appeal) failed to consider that the sale proceeds of the said agricultural land is not a capital asset as per Section 2(14) of the Income Tax Act, 1961.
9. Section 68 has application, when no explanation is offered or the explanation offered is not satisfactory, I have corroborative evidence such as Agreement for sale and deposit of cash on the day of executing the sale deed.
3. The brief facts of the case are that the Assessee is an individual and filed his return of income for the Assessment Year 2015–2016 on 08.09.2015 admitting a total income of Rs.8,00,800/- with an agricultural income of Rs.4,86,740/-. The Assessee’s case was selected for scrutiny assessment under Computer Aided Scrutiny Selection [CASS] for the cash deposits in the savings bank account. Hence, notice u/s.143(2) of the Act was served and the Assessee appeared. The Assessee was to explain the source of cash deposits made in the Savings Bank Account maintain with Punjab National Bank [PNB] bearing ID No.1093000100056467 amounting to Rs.2.20 crores on 22.09.2014. The Assessee, before the Assessing Officer explained that the Assessee’s mother Mrs. V. Dhanalakshmi Ammal had an agricultural land at Pudukudi Village, Lalgudi Taluk, Ariyalur District bearing S.F. No.134/25C measuring 1.78 acres which was acquired by her in inheritance on the death of her mother Mr. Rajamani Ammal on 08.02.1999. The said land was sold by mother of the assessee to SRM Institute of Science and Technology for a sum of Rs.2,80,75,000/- on 22.09.2014 and out of the above consideration, a sum of Rs.2.20 crores received from mother by the assessee in cash, which was deposited on behalf of his mother and the balance consideration was received in favour of his mother, brother and the Assessee by cheque as under:
