The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) held that if assessee had paid tax for the sale consideration shown in the sale deed which is not the actual amount of sale consideration, affidavit shown by the assessee can be considered.
In the instant case, assessee is an individual who declared income from salary and other sources. He deposited an amount in his bank account. During the assessing procedures, he submitted that he has sold an agricultural land during the year and sale consideration was received in cheque as well as cash. He claimed that the said agricultural land is not a capital asset as per definition of Section 2(14) of the Income Tax Act, 1961. During the year, assessee had withdrawn a sum from his bank account and had subsequently deposited an amount back. He had claimed that he had agricultural income during the year. A.O disregarded that contention of the assessee and observed that the entire sale consideration amount was received through the bank channel. Argument of assessee that he has received certain sum in cash against the sale of land was rejected. A.O also observed that there wasn’t any question of having income from agricultural activity as assessee had sold agricultural land at the beginning of financial year. He added that money has been withdrawn on regular basis which must have been used for household purposes. A.O treating cash deposit amount as unexplained cash credit under Section 68 of the act added it to the total income of the assessee. Aggreived by A.O’s decision assessee appealed to the CIT(A) which dismissing the claims of assessee upheld the A.O’s decision.
The Tribunal bench comprising of Judicial Member Madhumitha Roy Accountant Member Waseem Ahmed held that, “it’s an undisputed fact that assessee had sold the land for the amount shown in sale deed only and the additional amount of cash deposits is without any substance. They added that an affidavit has been furnished by the assessee stating the additional amount of money received in cash and directed the A.O to verify the purchase consideration from the purchasers, adjudicate the issue fresh after providing reasonable opportunity of being heard according to the provisions of law”.
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