IN INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR BEFORE: SHRI BHAGCHAND, AM AND SHRI KUL BHARAT, JM ITA No. 557/JP/2015 Assessment Year : 2010-11. Deputy Commissioner of cuke Shri Sunil Agarwal, Income-tax, Vs. 111, Hari Marg, Circle-6, Civil Lines, Jaipur. Jaipur. PAN No. AAAPA 2935 L Appellant Respondent Revenue by: Shri R.A. Verma (Addl. CIT) Assessee by : Shri Anant Kasliwal (Advocate) Date of Hearing : 19.08.2016. Date of Pronouncement : 16/09/2016. ORDER PER SHRI KUL BHARAT, JM. This appeal by revenue is directed against order of ld. CIT (A)-2, Jaipur dated 24.03.2015 pertaining to A.Y. 2010-11. revenue has raised following grounds of appeal :- 1. Whether on facts and circumstances of case ld.CIT (A) erred in holding that cash deposited in bank account of Rs. 27 lacs represents part of sale consideration. 2. Whether on facts and circumstances of case ld.CIT (A) erred in deleting addition made on account of forfeited money of Rs. 9,00,000/-. 3. appellant craves its rights to add, amend or alter any of grounds on or before hearing. 2 ITA No. 557/JP/2015 DCIT vs. Shri Sunil Aagrwal 2. Briefly stated facts of case are that case of assessee was picked up for scrutiny assessment and assessment was framed under section 143(3) of IT Act, 1961 (hereinafter referred to as Act) vide order dated 31.01.2013. While framing assessment, AO made addition on account unexplained cash of Rs. 27,00,000/- and advance forfeited of Rs. 9,00,000/-. assessee aggrieved by this order, preferred appeal before ld. CIT (A), who after considering submissions and evidences placed on record, deleted addition and allowed appeal of assessee. 3. Now revenue is in appeal before us against order of ld. CIT (A). 4. First ground of revenue is against deletion of addition of Rs. 27,00,000/-. ld. D/R supported order of AO and submitted that ld. CIT (A) was not justified in deleting addition. 4.1. On contrary, ld. Counsel for assessee supported order of ld. CIT (A) and also submitted that AO in remand proceedings has accepted claim of assessee. 4.2. We have heard rival contentions, perused material available on record and gone through orders of authorities below. ld. CIT (A) has given finding of fact by observing as under :- 3.7.2. During remand proceedings, Assessing Officer has conducted inquiries with banks of purchaser Shri Vijay Dahiya which shows that sum of Rs. 34 lacs has been debited on 30.07.2009 for issue of pay orders, in favour of appellant which is reflected in sale deed. Furthermore, Shri Vijay Dahiya, purchaser also withdrew sum of Rs. 27 lacs in cash from his bank account before registration of sale deed which matches with cash deposited in bank account by appellant, on day when sale deed was registered. On this basis, Assessing Officer has stated Considering facts that cash withdrawn by buyer 3 ITA No. 557/JP/2015 DCIT vs. Shri Sunil Aagrwal just before execution and registration of sale deed matches exactly with cash component claimed to have been received by seller, it may be inferred that said cash component of Rs. 27 lacs was paid by buyer, Mr. Vijay Dahiya to assessee as part of consideration of sale of property. ratio in case of Intezar ali (supra) is as under :- Section 68 of Income-tax Act, 1961 Cash credit [Immovable property] Assessment year 2008-09 Assessee deposited certain sum as sale consideration of his agricultural land in his bank account However, sale deed reflected lesser sale consideration Assessee made complaint to registering authority about deficiency of stamp duty in sale deed Bank manager and witness to sale deed had also confirmed deposition made by assessee Further, assessee had also produced report of Tehsildar to justify valuation of property Whether in view of above, sale consideration could not be treated as undisclosed income of assessee particularly in absence of any contrary material on record Held, yes [Para 10][In favour of assessee] . This ratio of this case law, in favour of assessee, is also applicable to facts of this case. On basis of finding given by Assessing Officer that cash deposited in bank account is part of sale consideration, received from buyer, it is held that cash deposited in bank account of Rs. 27 lacs represents part of sale consideration, on which Capital Gains has been disclosed by appellant, in return of income. Assessing Officer, is therefore, directed to delete addition of Rs. 27 lakhs on account of unexplained cash deposit in bank account. Ground No. 2 is allowed. above finding of fact is not controverted by revenue by placing any contrary material. Moreover, AO in his remand report dated 18th July, 2014 in para 4 to 7 has stated as under :- 4. Perusal of bank a/c statement of Shri Vijay Dahiya (Enclosed herewith) has revealed that sum of Rs. 34 lakhs was debited on 30.07.2009 for issue of Pay Order (s). It is noteworthy tht this amount corresponds to Rs. 34 lakhs mentioned on page 6 of sale deed. In addition, it is also evident from bank account statement that Shri 4 ITA No. 557/JP/2015 DCIT vs. Shri Sunil Aagrwal Vijay Dahiya also withdrew amount of Rs 27 lakhs in cash (Rs. 12 lakhs withdrawn on 21.07.2009 by instrument number 401787 & Rs. 15 lakhs on 28.07.2009 by instrument number 401788) around same time. Interestingly, this amount of Rs. 27 lakhs matches with amount held as undisclosed income of assessee in assessment order u/s 143(3) para 13 (page 8). assessee repeatedly contended in additional evidences put before your goodself that Rs. 27 lakhs was received by him in lieu of property sold by him to Mr.Vijay Dahiya & Smt. Shashi Dahiya. Considering fact that cash withdrawn by buyer just before execution and registration of sale deed matches exactly cash component claimed to have been received by seller, it may be inferred that said cash component of Rs. 27 lakhs was paid by buyer Mr. Vijay Dahiya to assessee as part consideration of sale of property. However, notices u/s 133(6) issued to Shri Vijay Dahiya has returned unserved. 5. Perusal of bank account statement of Smt. Shashi Dahiya reveals that she withdrew amount of Rs. 9,90 lakhs in cash on 30.07.2009 (one day before sale deed got executed) vide instrument no. 127933. 6. Notice u/s 133(6) was also issued to Director M/s. Ethical Infrastructures Pvt. Ltd. on 21.02.2014 asking whether agreement between assessee and M/s. Ethical Infrastructure Pvt. Ltd. was materialized and whether advance paid to assessee was forfeited. AR of company M/s. Ethical Infrastructures Pvt. Ltd. replied vide letter dated 12.03.2014 (copy enclosed herewith) that amount of Rs. 9 lakhs advanced to assessee was received back by M/s. Ethical Infrastructures P vt. Ltd. AR further mentioned that M/s. Ethical Infrastructures Pvt. Ltd. was not party to sale deed. 7. With regard to additional evidences submitted by assessee vide his submission before your goodself dated 08.01.2014, undersigned has perused same. These letters written to Joint Sub Registrar, Gurgaon and Commissioner of Income Tax, Gurgaon are apparently written by assessee with intention to match facts of his case with facts of case of CIT vs. Intezar Ali in Income Tax Appeal No. 162/2013 dated 26.07.2013. undersigned has no objection to admission of additional evidences with reference to rule 46A as ruling of case of CIT vs. Intezar Ali was passed on 26.07.2013, after order u/s 143(3) was passed by AO on 31.01.2013. 5 ITA No. 557/JP/2015 DCIT vs. Shri Sunil Aagrwal In view of above, we do not see any reason to interfere in order of ld. CIT (A), same is hereby affirmed. 5. Ground No. 2 of revenue is against deletion of addition made on account of forfeited money of Rs. 9,00,000/-. 5.1. ld. D/R supported order of AO. 5.2. On contrary, ld. Counsel for assessee relied on finding of ld. CIT (A) and submitted that AO has accepted contention of assessee in his remand report. Therefore, there is no reason to interfere with order of ld. CIT (A). 5.3. We have heard rival contention, perused material available on record. We find that ld. CIT (A) has given finding of fact in para 3.8 as under :- 3.8. issue which has to be decided in ground no. 3 is whether sale deed registered on 31.07.2009 flows from agreement to sale dated 24.05.2009 entered into by appellant with M/s. EIPL or whether agreement to sale is to be treated as cancelled. appellant has stated that sale is to be treated as cancelled. appellant has stated that sale consideration of Rs. 90,21,000/- includes advance received from EIPL of Rs. 9 lacs, which has also been deposited in bank account. He has also stated that sale deed has been entered into by him with nominees of M/s. EIPL, as stipulated in clause B of para 2 of agreement to sale. It has also been stated by appellant that having entered into agreement to sale on 24.05.2009, for Rs. 90,21,000/-, there was no reason that he would cancel this agreement within 75 days to enter another sale deed for sum of only Rs. 54 lacs. During remand proceedings, Assessing Officer has conducted inquiries with M/s. EIPL which revealed that M/s. EIPL has received back sum of Rs. 9 lacs. Also, inquiries with bank of other purchaser, Smt. Shashi Dahiya has revealed that sum of Rs. 9.9 lacs has been withdrawn in cash from her bank account on 30.07.2009, one day before sale deed got registered. above inquiries conducted by Assessing Officer substantiate contention of appellant that sum of Rs. 9 lacs has not been forfeited. Therefore, addition made by Assessing Officer of Rs. 9 lacs on account of forfeiture of above amount, is directed to be deleted. Ground No. 3 is allowed. 6 ITA No. 557/JP/2015 DCIT vs. Shri Sunil Aagrwal This finding is further supported by report of AO in para 6 of his report as under :- 6. Notice u/s 133(6) was also issued to Director M/s. Ethical Infrastructures Pvt. Ltd. on 21.02.2014 asking whether agreement between assessee and M/s. Ethical Infrastructure Pvt. Ltd. was materialized and whether advance paid to assessee was forfeited. AR of company M/s. Ethical Infrastructures Pvt. Ltd. replied vide letter dated 12.03.2014 (copy enclosed herewith) that amount of Rs. 9 lakhs advanced to assessee was received back by M/s. Ethical Infrastructures P vt. Ltd. AR further mentioned that M/s. Ethical Infrastructures Pvt. Ltd. was not party to sale deed. above finding of fact is not controverted by revenue by placing any contrary material on record. Therefore, we do not find any reason to interfere in order of ld. CIT (A), same is hereby affirmed. 6. In result, appeal of revenue is dismissed. Order is pronounced in open court on 16.09.2016. Sd/- Sd/- ( BHAGCHAND) ( KUL BHARAT ) Accountant Member Judicial Member Jaipur Dated:- 16/09/2016. Das/ Copy of order forwarded to: s 1. Appellant- ACIT, Circle-6, Jaipur. 2. Respondent Shri Sunil Agarwal, Jaipur. 3. CIT(A). 4. CIT, 5. DR, ITAT, Jaipur 6. Guard File (ITA No. 557/JP/2015) By order, Assistant. Registrar 7 ITA No. 557/JP/2015 DCIT vs. Shri Sunil Aagrwal Deputy Commissioner of Income-tax, Circle-6, Jaipur v. Sunil Agarwal