Case Law Details

Case Name : Smt. Tajinder Pal Kaur Vs ITO (ITAT Amritsar)
Appeal Number : I.T.A. No. 574/Asr/2019
Date of Judgement/Order : 08/12/2022
Related Assessment Year : 2011-12

Smt. Tajinder Pal Kaur Vs ITO (ITAT Amritsar)

The assessee has challenged both the legal and factual grounds before the Bench. But during the appeal proceedings before the ld. CIT(A), the assessee had not challenged the legal grounds so there are first time challenging the issue before the ITAT. So, the entire legal ground was setting aside before the ld.AO for its verification. In the factual ground the grievance of the revenue that the acceptance of the instrument related to transfer of the property like agreement and power of attorney was in question. In the hearing before bench, the assessee also placed the registered power of attorney and the copy of the agreement as proof of the transaction. The revenue authority had not verified the purchaser of the property M/s R.K. Associates, Grain Market, Tanda, Distt., Hoshiarpur. In our opinion, the primary evidence, and party who paid the cash to the assessee for purchasing the land before the Bench, was unable to submit any registered deed related to transfer of property. As per the ld. Sr. DR, the total transfer of the land is incomplete without a registered deed of the property. But the ld. Counsel argued that the source of the cash was proved on basis of this transaction. In any case, we are set aside the issue to ld. AO for verification to the purchaser of the property M/s R.K. Associates, (supra).

FULL TEXT OF THE ORDER OF ITAT AMRITSAR

The instant appeal of the assessee is directed against the order of the ld. Commissioner of Income Tax(Appeals)-1, Jalandhar, [in brevity the CIT(A)] bearing appeal No. CIT(A)-1/Jal/10334/18-19, date of order 18.06.2019, the order passed u/s 250(6) of the Income Tax Act 1961, [in brevity the Act] for A.Y. 2011-12. The impugned order was emanated from the order of the ld. Income Tax Officer, Ward 4, Hoshiarpur, (in brevity ‘the AO’) the order passed u/s 143(3)/147 date of order 10.12.2018. The assessee has taken the following grounds which are extracted as below:

“l) That the Ld. A.O recorded reasons dtd. 12-03-18 with zero material on record and even bank s’ statement was not on the record of A.O, as per order sheet dtd. 12-03-18, hence no reasons to believe arises indicating firstly any income has escaped assessment and secondly there was nothing on record to show that any escapement has occurred by reason of either omission or failure on the part of the assessee to disclose fully or truly all material facts necessary for assessment and this leads to a case of borrowed satisfaction and invalid jurisdiction.

2) That the sanction given by PCIT dtd 27-03-18 ,only after going thru reasons recorded only as mentioned in approval letter, ignoring that no document is available in the file for verification and for giving approval u/s 151, hence sanction tantamount to mechanical in nature, invalid jurisdiction and bad-in-law.

3) That the revenue wrongly ignored the unregistered agreement to-sell is not an evidence to a contract.

4) That the Ld. AO and CIT(A) ignored the following points , while framing the assessment resulting the assessment as bad-in-law

a. That appellant received Rs. 49,80,000 ( as per registered power of attorney in the court of law dtd.18-11-10 and on the basis of agreement to sell on non-judicial stamp paper of rs. 2,000/- dtd 18­11-10 ) during the year but revenue made addition of Rs. 25,63,000 only and left balance rs. 24,17,000/-for the reasons best known them.

b. That the amount so received at rs. 49,80,000/- by virtue of signing of registered power of attorney in the court of law dtd 18-11-10 and on the basis of agreement on non-judicial stamp paper of rs. 2000/-dtd. 18-11-10, is neither a sale nor unexplained money.

c. That appellant deposited balance amount as per agreement to sell dtd 18-11-10 in the Allahabad bank i.e; next financial year in cash / clearing, amounting to Rs. 15106000 -25,63,000 = Rs. 1,25,43,000 and this amount neither challenged by revenue nor followed the principle of consistency.

d. That no action was taken by revenue u/s 131 and 133(6) to verify the agreement to sell, registered power of attorney (both dtd. 18-11­10), concerned parties as signatories and witnesses who is a Numberdar/lambardar (appointed by District collector) and further ignored that revenue is empowered u/s 136 to act judiciously but wrongly rebutted all documents as filed, without bringing any evidence on record.”

2. Brief fact of the case is that the assessee during appeal proceeding filed ground after that with the written submission of the assessee. The amended ground was filed. As per request of the ld. Counsel for the assessee, the bench are accept the amended ground. The assessee deposited cash in the bank account amount of Rs.25,63,000/-. The case was reopened u/s 148 and the total addition was made for depositing cash Rs.25,63,000/-. The assessee filed the return but had not disclosed the deposit of cash in the return of income. During assessment the assessee took the plea that the said amount was accumulated for the sale of land. But the assessee was unable to produce any instrument related to proof of sale of land. In evidence the assessee submitted registered power of attorney and agreement before the revenue authorities. But the instrument like power of attorney and agreement are duly not accepted by the revenue as there genuinity in question, accordingly the addition was made by total deposited of cash. The assessee filed an appeal by challenging the order of the ld. AO by both legal and factual ground. But the ld. CIT(A) upheld the order of the ld. AO.

3. Being aggrieved assessee filed an appeal before us.

4. The ld. Counsel for the assessee submitted the written submission which is kept in the record. The ld. Counsel had submitted the copy of agreement with translated version, on dated 18.11.2010, APB page nos. 15 to 20, copy of registered deed, power of attorney with translated version, APB page nos. 21 to 26, bank statements APB 29 to 35 in agreement assessee placed that:

“Argument:

(i) That the A.O has not disputed that assessee has given registered power of attorney for 1 kanal 10 maria, as per Para-2.2.

(ii) That the Ld. A.O has not disputed that assessee has deposited cash Rs. 25,63,000 in saving a/c of Allahabad Bank, Hoshiarpur, as per Para-2.3, however he has not considered the unregistered agreement as an evidence as per Para-2.3 of AO’order.

(iii) The Ld. CIT(A), as per Para-6.1, admitted the sale rate of Rs. 1,66,000 per marla and also admitted total sale consideration of Rs. 1,51,06,000 but his main contention is that the agreement to sell is not registered.

At page-5 of CIT(A)’s order, in the second last line, he says, the only proof in support of deposits is unregistered agreement to sell and he has not took the cognizance of the same.

The unregistered agreement to sell is a conclusive evidence in a court of law, as per the following judgment of Honorable Supreme court:-

a) S. Kaladevi vs. V.R Somasundram & Ors. (SC)

[ Refer Para-16,reproduced as under]

Civil Appeal No. 3192 of 2010

Copy enclosed at page 232 to 237

That appellant received Rs. 49,80,000 ( as per registered power of attorney in the court of ‘ law dtd.18-11-10 and on the basis of agreement to sell on non-judicial stamp paper of rs. 2,000/- dtd 18-11-10 ) during the year but revenue made addition of Rs. 25,63,000 only and left balance rs. 24,17,000/- for the reasons best known them.

Argument:

(i) Refer PB-15 onwards for agreement to sell dtd. 18-11-10 and Para-21 onwards for registered power of attorney dtd. 18­11-10 in English translation.

(ii) Total area as per agreement to sell is calculated as under:

a) Total Area = 4 kanal 11 marla

b) One Kanal = 20 marla

c) Total land in marlas = 20 x 4 + 11 = 91 marlas

d) Sale Rate per maria = Rs. 1,66,000

e) Total sale value = Rs. 1,66,000 x 91 = Rs.1,51,06,000

f) Registered power of attorney = 1 kanal 10 marla dtd. 18-11­10 given for area

g) Total marlas as per above point(f) = 20 x 1 + 10 = 30 marlas

h) Total sale value of 30 marlas, as per registered Power of attorney and agreement to sell = 30 maria x 1,66,000 = Rs.49,80,000.

i) As per PB-16, the appellant received the sale consideration of 1 kanal 10 maria = Rs. 49,80,000, whereas the revenue made the addition of Rs. 25,63,000 and left balance of 24,17,000 untouched for reasons best known to them.

Argument: That assessee received Rs. 49,80,000 by virtue of signing of regd. Power of attorney in the court of law dtd. 18­11-10 and on the basis of agreement to sell on non-judicial stamp paper of Rs. 2000 dtd. 18-11-10 is not a sale, as per the following case law of Honorable Supreme Court :- 

Suraj Lamp & Industries Pvt. Ltd. vs. State of Haryana &

Another 79 CCH 0728, 340 ITR 0001 (2012) (SC)

Copy enclosed at Page at page 246 to 255.”

5. The ld. Sr. DR vehemently argued and relied on the order of the ld. CIT(A).

The relevant para of the order of the ld. CIT(A) is extracted as below:

“During appeal proceedings, Ld. Counsel has claimed that the agricultural land was sold in the succeeding year when sale deed was executed and the capital gain was also declared by the assessee. It is observed that the assessee did not file copy of sale deed executed in the subsequent year to prove the sale of land. Further, as per annexure 4 the assessee has filed computation of income of Smt. Tajinder Paul Kaur for Assessment Year 2012-13. As per this document date of filing the return is 31.08.2012 however, there is no acknowledgement No to prove that the return of income for A.Y. 2012-­13 was filed by the assessee wherein Long Term Capital Gain was declared. Another important factor to be noted is that in the calculation entire sale of consideration of Rs. 1,51,06,000/- has been considered in the hands of Smt. Tajinder Paul Kaur, whereas, there were many other co-owners who had share in the sale proceeds. Thus, the computation of income for A.Y.2012-13 and filing of return for A.Y. 2012-13 has not been proved. The only proof in support of the deposits is unregistered agreement. The claim of execution of sale in the subsequent year and payment of Long Term Capital Gain by the assessee in the subsequent year has not been substantiated. Therefore, the addition made by the assessing officer is upheld. These grounds of appeal are dismissed.”

6. We heard the rival submission relied on the documents available in the record. The assessee has challenged both the legal and factual grounds before the Bench. But during the appeal proceedings before the ld. CIT(A), the assessee had not challenged the legal grounds so there are first time challenging the issue before the ITAT. So, the entire legal ground was setting aside before the ld.AO for its verification. In the factual ground the grievance of the revenue that the acceptance of the instrument related to transfer of the property like agreement and power of attorney was in question. In the hearing before bench, the assessee also placed the registered power of attorney and the copy of the agreement as proof of the transaction. The revenue authority had not verified the purchaser of the property M/s R.K. Associates, Grain Market, Tanda, Distt., Hoshiarpur. In our opinion, the primary evidence, and party who paid the cash to the assessee for purchasing the land before the Bench, was unable to submit any registered deed related to transfer of property. As per the ld. Sr. DR, the total transfer of the land is incomplete without a registered deed of the property. But the ld. Counsel argued that the source of the cash was proved on basis of this transaction. In any case, we are set aside the issue to ld. AO for verification to the purchaser of the property M/s R.K. Associates, (supra). The issue should be disposed off accordingly with the above direction.

7. In the result, the appeal of the assessee is allowed for statistical purposes.

Order pronounced in the open court on 08.12.2022

Download Judgment/Order

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