Cash from agricultural land sale, reflected as unexplained income, is deemed exempt under taxation laws if properly documented.

आदशे/Order

PER VIKRAM SINGH YADAV, A.M. :

This is an appeal filed by the Assessee against the order of the Ld. CIT(A)/NFAC, dt. 30/03/2023 pertaining to Assessment Year 2011-12.

2. In the present appeal, the assessee has raised the following grounds of appeal:

“1. The Ld. CIT(A) was not right in sustaining the addition of Rs. 34,37,500/- u/s 69A of the Income Tax Act by not treating the entire cash receipt of Rs. 53,00,000/- as sale proceeds of agricultural land which is exempt from taxation.

2. The Ld. CIT(A) has erred in law and facts in not allowing to withdraw the Ground No. 2 that the AO has wrongly applied the provisions of section 144 of the Income Tax Act whereas the assessment has been completed u/s 143(3) r.w.s 147. The Ld. CIT(A) has also erred in law by wrongly justifying that order u/s 143(3) cannot be passed as notice u/s 143(2) was not issued on account of non-filing of return of income in response to notice u/s 148. However, mentioning of section 143(3) r.w.s 147 on first page of the order, the Ld. CIT(A) has considered it “to be inadvertent error on the part of the AO.”

3. Briefly the facts of the case are that the assessee has deposited cash amounting to Rs. 63,85,000/- in his bank account maintained with State Bank of India (SBI) during the F.Y. 2010-11, inquiries were conducted under section 133(6) but the assessee was unable to furnish source of cash deposited in his bank account. Thereafter, notice under section 148 was issued dt. 29/03/2018. In response to the notice, the assessee did not file any return of income. Thereafter, notice under section 142(1) was issued and information was called for and assessment was completed under section 143(3) r.w.s 147 of the Act.

3.1 During the course of assessment proceedings, the AO observed that the assessee has deposited a sum of Rs. 53,00,000/- on 09/08/2010 and as per the explanation submitted by the assessee, the cash was deposited out of the sale consideration of his agriculture land. The AO referred to the copy of the registered sale deed in respect of agriculture land sold by the assessee and stated that in the registered sale deed, the sale consideration towards sale of the agriculture land has been shown at Rs. 14,82,500/- only. Thereafter the assessee was asked to furnish evidence regard the remaining amount of Rs. 38,17,500/- however there was no details furnished by the assessee. The AO also referred to the bank statement of the assessee and noted that there were cash withdrawal of Rs. 3,80,000/- prior to deposit of cash amounting to Rs. 53,00,000/- and the credit thereof was given to the assessee and the remaining cash of Rs. 34,37,500/- deposited in bank account of the assessee was treated as unexplained and the addition was made under section 69A of the Act.

4. Being aggrieved the assessee carried the mater in appeal before the Ld. CIT(A), NFAC Delhi who has since sustained the order passed by the AO.

5. Against the said findings and direction of the Ld. CIT(A), NFAC, the assessee is in appeal before us.

6. During the course of hearing, the Ld. AR submitted that the assessee is a Nambardar of VPO Nawan Gaon, Teh. Moonak and he is only an agriculturist. He was the owner of 3 Acre, 2 Kanal and 7 Marie of agricultural land situated in VIII. Nawan Gaon. Teh. Moonak. This land was sold to one Smt. Beant Kaur w/o Sh. Nirnajan Singh s/o Sh. Bhagwan Singh, Safidon Road, Jind (Haryana) and the Registry of this land was got done by Smt. Beant Kaur through her son-in-law Shri Balwinder Singh s/o Sh. Maan Singh on 09-03-2010. This land was sold for a sum of Rs 53,00,000/- but because of insistence of the buyer to save stamp duty, the sale consideration was disclosed in the sale deed at Rs 14,82,500/- (circle rate fixed by the St