Decided on May 09,2014



R.P.TOLANI,JM. - (1.) THIS is assessee's appeal against the order dated 28 -01 -2011 passed by the ld. CIT(A) -XXIV, New Delhi in appeal no. 381/10/11, pertaining to A.Y. 2008 -09.
(2.) VARIOUS grounds are raised, which in effect raise following ground of appeal: "That on the facts and in the circumstances of the case the ld. CIT(Appeals) has erred in law in sustaining addition u/s 69A of Rs. 20,97,900/ - on account of allegedly unexplained/ unproved cash deposits in the bank accounts of the appellant. "
(3.) BRIEF facts are: The assessee individual, derives income from flour mill under the name and style "Bansal Atta Chakki". During the course of assessment proceedings, assessing officer received AIR information that assessee had deposited cash amounting to Rs. 41,48,030/ - in bank accounts as under: (i) Rs. 24,61,130/ - Punjab National Bank, Prashant Vihar New Delhi. (ii) Rs. 24,61,130/ - Punjab National Bank, Kashmere Gate, New Delhi. 3.1. In respect of these amounts, the assessee submitted that in addition to above, he had two other accounts with Punjab National Bank, Sector - 12,Dwarka, Delhi 110075; and Punjab National Bank, Kakrola, Delhi - 110059. The account in Kakrola Branch was transferred from Prashant Vihar branch of PNB. 3.2. In addition to regular income, assessee purchased land admeasuring 500 sq. yds. out of khasra no. 16/3 at village Kakrola Abadi known as Raju Extn., Kakrola, New Delhi for Rs. 21,00,000/ - from one Mr. Anil Kumar Mittal, as under: 160 sq. yds. Rs. 6,50,000/ - 200 sq. yds Rs. 8,00,000/ - 140 sq. yds Rs. 6,50,000/ - 3.3. It was also stated that the assessee was not having copies of these agreements as they were not provided by Shri Anil Kumar Mittal. The above 500 sq. yds land was sold by the assessee to following persons: 1. Ms. Anita Ghalot 115 sq. ydsRs. 4,50,000/ - Receipt submitted 2. Mr. Shri Chand 100 sq. ydsRs. 2,50,000/ - Receipt submitted 3. Mr. Vishal Sharma 50 sq. ydsRs. 2,00,000/ - Receipt submitted Mr. Dharam Veer 23 sq. ydsRs. 80,000/ - Receipt submitted 4. MR .Mohd. Mohanudin 30 sq.yd Rs. 1,35,000/ - No receipt submitted 5 MR . Panditji 37 sq. ydsRs. 1,66,500/ - No receipt submitted 6.MR . Dharam Pal 140 sq. ydsRs. 6,80,000/ - No receipt submitted 3.4. The assessee pleaded that deposits in the above accounts were made from the sale proceeds of above pieces of land. The assessee's reply did not find favour with the assessing officer who made the addition of Rs. 45,59,030/ - by following observations: "The reply of the assessee is considered but not acceptable as the assessee has not submitted purchase deed of the plot measuring 140 sq. yards amounting to Rs. 6,50,000/ - and the sale deeds for the plots sold to various presons as listed above.The receipts issued by the assessee to some of the persons reveals that the assessee has sold and received the amount between 15 -02 -2008 to 18 -02 -2008 whereas as per the documents submitted by the assessee in support of purchase of plot from Mr. Anil Kumar Mittal reveals that the assessee ahs purchased this plot only on 27 -02 -2008 then how it was sold in 15 -02 -2008 to 18 -02 -2008 when the assessee was not even owner of the plots. In support of cash deposit in the bank, the assessee has submitted copy of ledger account of cash book in which opening balance of Rs. 4,72,645/ - and the cash of small denomination have been withdrawn and deposited throughout the year till January 2008 in which assessee has deposited cash loan amounting to Rs. 88,000/ - from five different people for which affidavit of the persons have been submitted and in February 2008 assessee has deposited sale consideration of the plot and later on the amount was used for the payment of plot purchased and even as pe the cash book submitted by the assessee reveals that the assessee is having negative cash in hand of Rs. 60,955/ - on 25 -03 -2008, and the opening cash in hand of Rs. 4,72,645/ - is not believable. It is apparent from the above that the assessee has purchased the plot and deposited his unaccounted money in the bank and made the payment for purchase of plot and when he was asked to explain the source of cash deposited in the bank, he has created an unbelievable story which is defective and not acceptable at all and even no detail of sale and purchase of plot has been declared in the return filed by the assessee. No detail or affidavit in respect of the account with Punjab National Bank, Kashmere Gate was filed by the assessee. The explanation filed by the assessee for cash deposit in bank account is totally baseless and is herebyrejected. The cash deposit in the bank account amounting to Rs. 41,48,030/ - as per AIR information and Rs. 4,11,000/ - in Punjab National Bank, Dwarka remains unexplained and is hereby treated as unexplained cash credit u/s 68 and added to the income of the assessee. Since the assessee ahs furnished inaccurate particulars of his income on this ground, penalty proceedings u/s 271(1)(c) is being initiated separately. " 3.5. Aggrieved, assessee preferred first appeal. The ld. CIT(A) gave partrelief by sustaining the following additions: Cash deposit in PNB Kakrola branch Rs. 16,86,900 Cash deposit in PNB Dwarka branch Rs. 4,11,000 Rs. 20,97,900 3.6. Ld. CIT(A) sustained the above additions by following observations: "4.4 In Ground No.6, the appellant has impugned the addition of Rs.16,86,9001 - in PNB, Kakrola Branch on the grounds that addition cannot be made u/s. 68 of the Act on the basis of cash deposits in bank, since, no books of accounts are maintained by the appellant. This issue has been taken care of in the preceding paragraphs, where it has been held that the addition should have been made u/s. 69A of the Act instead of Section 68 of the Act. 4.5 Alternatively, the appellant .has held that the cash deposits made in PNB, Kakrola Branch and in PNB, Dwarka Branch are fully explained on account of cash received through sale of plots and also through receipt of cash loans. Further, in Ground No.7, the appellant has impugned the additions made by the AO on the ground that he never issued summons u/s. 131 of the Act to the persons to whom the appellant had sold the plots of land. In order to overcome the objection of the appellant, directions were issued to the AO u/s. 250(4) of the Act to issue summons and carry out enquiries from the 7 persons to whom the appellant is claiming to have sold the plot of land in cash, so that the veracity of the claim made by the appellant could be ascertained. Accordingly, the AO submitted a Remand Report dated 24.02.2012, wherein, he stated that hehad issued summons to all the 7 persons and had fixed the case for hearing on 25.11.2011. In 6 out of 7 cases, nobody attended before the AO as per his Remand Report. The only person to attend before him was one Mr. Vishal Sharma, whose statement was recorded by the AO and who stated that he was a salesman in a garment shop in Pahari Dheeraj and that he had purchased a 48 sq. yd. plot of land from Sh. Arun Kumar Bansal for approx. Rs.1.55 lacs in the month of April 2007, which he had already disposed off in the year 2010. This is at variance with the claim of the appellant who has stated that he had received a sum of Rs.2 lacs in cash from Sh. Vishal Sharma on 18.02.2008. The AO further reported that the veracity of the claim made by the appellant of having sold the plot of land in cash and having deposited the same in his bank account appears doubtful. 4.6 I have carefully considered the submissions made by the appellant, the evidences placed on record by him and the arguments made by him in his favor. I have also carefully perused the assessment order as well as the Remand Reports submitted by the AO. I have taken careful note of the facts that there was a negative balance in the cash book of the appellant as on a given date. I have also noted that despite having issued summons u/s. 131 of the Act to 7 persons as requested by the appellant, nobody attended the proceedings before the AO in six cases. I have also noted the finding given by the AO in the assessment order wherein he has stated that it is unbelievable that a plot of land could have been sold even before it was purchased. 4.7 In view of the above discussion and the findings of fact in the assessment order and the Remand Report, I am of the opinion that the appellant has not been able to prove his case conclusively to the satisfaction of the AO or the First Appellate Authority. None of the documents submitted by the appellant (Agreement to Sell, OP A, 'Will etc.) are registered with any Authority. These are merely self serving notorized documents, which do not carry much weight. Thus, in my opinion, the appellant has failed to discharge his onus to prove the source of acquisition of cash deposited in his bank accounts in PNB, Kakrola Branch and PNB, Dwarka Branch. Therefore, the addition to the income of the appellant u/s. 69A of the Act to the tune of cash of Rs.16,86,900/ - deposited inPNB, Kakrola Branch and Rs.4,11,000/ - being cash deposited in PNB, Dwarka Branch is hereby sustained. 3.7. Aggrieved, assessee is before us and has raised various issues qua the additions: 4. Ld. Counsel for the assessee at the out set states that transaction of purchase and sale of the land in Delhi area are generally effected by way of registration of documents but on the basis of general power of attorney ("GPA"). The amounts deposited in both PNB accounts of Kakrola and Dwarka branches were out of the receipt from the sale of the plots of land. Since after the sale of the plots of land no relationship exist between assessee and the vendees, assessee was not able to produce them. The AO also did not issue any summons u/s 131 to enforce their attendance. Consequently, CIT(A) directed the assessing officer to issue summons and carry out inquiries from the above 7 persons claimed to have purchased plots of land from the assessee in cash. 4.1. In pursuance thereof, out of seven, only one person Shri Vishal Sharma attended who accepted to have purchased 48 sq. yd. plot from the assessee for Rs. 1,55,000/ -. In respect of the remaining 6 persons, since no body attended, assessing officer expressed his doubts. 4.2. Ld. Counsel contends that the fact that assessee had purchased 500 sq. yd. of land from Shri Mittal has not been disputed by the lower authorities. The major reason of assessing officer for not accepting the assessee's contention about sales of the plots is to the effect that the evidence suggested that the plots were purchased on 27 -2 -2008 and 282 -2008 whereas the sales of these plots are claimed on on 15 -2 - 2008 to 18 -2 -2008. Ld. CIT(A) has not adverted to this aspect and mere non attendance of the persons in response to summons u/s 131 has been held against the assessee. The fact that Shri Vishal Sharma appeared who though accepted having purchased the plot even the amount of Rs. 1,55,000/ - paid by him has not been give credit and the entire amount has been added. Besides, reliance is placed on Hon'ble Supreme Court judgment in the case of CIT Vs.Orissa Corporation (Pvt.) Ltd. 159 ITR 78, for the proposition that it was for the assessing officer to bring 131 proceedings to logical conclusion. The summons never came back as unserved or person not found. 4.3. Copy of the AIR information was never provided to assessee to reconcile the facts and figures mentioned therein and to give explanation accordingly. The said Shri Anil Kumar Mittal was in a position to dispose of the land in question by way of GPA from one Dr. Kumud Kishroe Mittal, a NRI. The assessee produced various evidence in the paper book in support of purchase of these lands. 4.4. Though these documents of purchases were executed on 27 -2 -2008, the deal for the purchase thereof was finalized on 13 -12 -2007 when earnest money of Rs. 2,00,000/ - was made to Shri Anil Kumar Mital by a/c payee cheque no. 9645954 drawn on PNB, Kakrola branch. Since the assessee had paid the advance, it got an opportunity to deal with the land and before the execution of sale deed from Shri Anil Kumar Mittal, he sold it to 7 parties for a consideration of Rs.19,61,500/ -. The payments from the parties were received in parts from time to time and on receiving the full payment, the formal receipts were issued on 15 -2 -2008, 18 -2 -2008 and 10 -3 -2009. The two payments out of the above amounting to Rs. 3 lacs were received from Ms. Anita Ghalot and Shri Dharam Pal by cheques and the balance amount of Rs. 16,61,500/ - was received from time to time in cash. The assessing officer has rejected the assessee's version on assumptions and making adverse inference from such assumptions. 4.5. Assessee has filed written submissions before CIT(A) which are pleaded to be taken as submissions before ITAT. It is pleaded that the transactions being genuine, the addition may be deleted. ;

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