The Income Tax Appellate Tribunal ( ITAT ), Amritsar bench recently held that an unregistered Agreement to Sell (ATS) cannot be treated as a sham document as the same is witnessed and signed persons.
In the instant case, the assessee, a Teacher by Profession has deposited an amount of 49 lakhs in the bank account. During the course of the proceedings, it was explained that the account was a joint account opened by her father along with herself and her two sisters. The amount actually belonged to her father who received the same towards the agreement to sell his property and he divided the same into equal instalments to all his daughters. The Agreement to Sell (ATS) was also produced before the authorities.
The Revenue concluded that the entire cash that actually changed hands on the sale of land was Rs.8.50 lacs only, as given before the Sub-Registrar on 16.04.2009. Therefore, the ATS is clearly a sham document.
The Tribunal, after considering the fact deeply, observed that the cash deposit of Rs.49 lacs could be said to form part of the transaction of sale of land by the assessee’s father. As per the assessment order passed against the father of the assessee, the stamp paper on which the ATS, is executed was indeed purchased on 22.10.2008.
“It would therefore be incorrect to conclude that the ATS, witnessed by two independent persons, besides being signed also by the six daughters, is a sham document. Why, if it was indeed, as contended, a fabricated document, would it mention the sale rate in excess of that stated in the sale deed/s. There is, at the same time, and only expectedly, no reference to the ATS therein. How could, then, the ATS explain the nature and source of the cash deposited on 22/10/2008? Further, the sale deeds, which bear the details of the land, state of three different persons as the purchasers. Thus, apart from difference in amount, the buyers too are also different, with each of the three documents, viz. the ATS; the two sale deeds produced before the AO and the tribunal; and that furnished before the ld. CIT(A), stating different ‘facts’,” the Tribunal said.
“Without doubt, there is much that needs to be explained, including the taxability of the income arising on the sale of land which, again, the ATS being an unregistered document, would be in the following year, i.e., AY 2010-11. There is accordingly no question of the assessee having explained, much less satisfactorily, the nature and source of the cash deposited in her Axis bank account on 22.10.2008,” the bench added.
Subscribe Taxscan Premium to view the Judgment
