Anand Prakash Singh Vs ACIT (ITAT Delhi)
ITAT Delhi order on Unexplained Capital Introduction u/s 68 – Relief Granted Where Source Linked to Sale of Ancestral Agricultural Land was Supported by ATS and Merely because a registered sale deed was not executed, the genuineness of consideration received under agreement to sell cannot be doubted
Brief Facts:
The assessee, an individual proprietor of M/s Nandini Processors, filed the return declaring income of ₹16,38,670 for AY 2016-17. The case was selected for limited scrutiny to examine:
- Source of capital introduced into business, and
- Investment in a residential flat.
During assessment proceedings under section 143(3), the assessee explained that the capital introduced amounting to ₹2,15,73,388 originated from the sale of ancestral agricultural land situated in Balia district, Uttar Pradesh.
To substantiate, the assessee filed:
- Revenue land ownership records (“Khatiyan” copies),
- Multiple agreements to sell,
- PAN and ID proofs of buyers and sellers,
- Copies of bank transaction records.
However, the Assessing Officer disbelieved the claim primarily because:
- Registered sale deed was not produced,
- Ownership details were not conclusively proved to AO’s satisfaction,
- Agricultural land status under Section 2(14) could not be verified.
Accordingly, the AO treated the capital introduced as unexplained income under Section 68 read with Section 115BBE, and the addition was confirmed by CIT(A).
