The Income Tax Appellate Tribunal (ITAT), Hyderabad Bench upheld addition on account of unaccounted cash towards sale of land as no mention of agricultural land on translated document.
The assessee, V.V. Rajam filed his return of income for the AY 2013-14 declaring a total income of Rs. 12,14,090/- including income from salary income from house property and income from other sources. Subsequently, the case was selected for scrutiny and statutory notices were issued to the assessee against which, the assessee submitted the information as called for.
Based on the specific information received by the AO that Bukka Kanakaiah of Siddipet was carrying cash of Rs. Rs.1,20,00,000/- to be delivered at Malakpet, Hyderabad. A search was conducted. The cash of Rs.1,20,00,000/- found in his possession was seized. As he deposed during his statement that an amount of Rs.1,00,50,116/- was already delivered in cash to Shri V.V. Rajam, of Malakpet, Hyderabad, to whom he intended to deliver the seized cash of Rs.1.20 crores for the purpose of purchase of land at Siddipet, the assessee was searched under section 132. The Assessing Officer completed the assessment under section 143(3) r.w.s. 153A of the Act assessing the unaccounted cash of Rs. 1,87,32,500 and determined the total income at Rs.2,00,26,590.
The CIT(A) after considering the submissions of the assessee, which were extracted by the CIT(A) deleted the addition made by the AO.
Mr. S. Rama Rao, the counsel for the department while relying on the order of AO submitted that the assessee, GPA holder of the property could not establish the source of investment made by him and the transaction of sale agreement executed on 23rd July, 2012 was not canceled and he has received payment as per the sale deed. He submitted that the agreement was made between K. Vijayasri and Bukka Kanakaiah and others have developed the land by way of plotting.
Mr. Rao said that as per the revenue record, the land was dry land and it is the duty of the assessee to get it changed on revenue documents, if the assessee is utilizing the land other than as mentioned in the revenue record.
The department further submitted that the CIT(A) has wrongly deleted the addition made by the AO without considering the findings and documents found during the course of search and seizure operation u/s 153A of the Act. He submitted that the CIT(A) has coterminous powers and could have examined the issue after calling Bukka Kanakaiah and others and subsequent agreement made by the appellant.
On the other hand, the assessee besides relying on the order of the CIT(A), reiterated the submissions as made before the revenue authorities. He submitted that the land was agricultural land.
The ITAT observed that when the property was purchased in 2001 was dry agricultural land, but, subsequently, when sale materialized nowhere it is mentioned in the translated document that the land was agricultural land. Before the CIT(A) the assessee has submitted agricultural operation is carried on and the source of irrigation for the agricultural operations is the open well and also a borewell situated in the land.
However, the tribunal found that in the pattadar pass book and an attachment no crop grown was mentioned there. Therefore, the argument of the assessee that the said land is an agricultural land cannot be accepted.
The Coram P.Madhavi Devi and L.P.Sahu allowed the appeal of the Revenue set aside the order of the CIT(A) and restore the order of AO in making the addition of Rs. 1,87,32,500/- on account of unaccounted cash towards sale of land.
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