Case Number: ITA 5532/DEL/2019
Appellant: Nandrup, New Delhi
Respondent: ITO, Ward-3(1), Gurgaon
Assessment Year: 2010-11
Result: Appeal Allowed
Case Filed on: 2019-06-25
Order Type: Final Tribunal Order
Date of Order: 2022-05-13
Pronounced on: 2022-05-13
The appeal in this case was filed by Nandrup, residing in New Delhi, against the Income Tax Officer (ITO), Ward-3(1), Gurgaon. The case pertained to the assessment year 2010-11 and was initially filed on 25th June 2019. The dispute arose due to the addition made by the Assessing Officer (AO) on the sale of agricultural land and unexplained cash deposits in the bank.
Nandrup filed the appeal against the order of the Commissioner of Income Tax (Appeals)-1, Gurgaon, dated 11th September 2018. The primary reason for the appeal was to contest the addition of capital gains on the sale of agricultural land and the addition of unexplained cash deposits made by the AO.
The case was heard before the Income Tax Appellate Tribunal (Delhi Bench ‘E’) in New Delhi on 12th May 2022. The bench comprised Sh. A.D. Jain, Vice President, and Dr. B. R. R. Kumar, Accountant Member. The appellant was represented by Sh. Ranjan Chopra, CA, and the Revenue by Sh. N. K. Bansal, Sr. DR.
The AO made an addition on the receipts of the sale of agricultural land under the head “long term capital gains” holding that the land sold falls within the municipal limits of Gurgaon. The said land was situated in the village Bajghera as per the Income Tax Authorities. The assessment pertains to Assessment Year 2010-11.
The tribunal referred to a notification by the Haryana Government dated 28th December 2020, which specified that the village Bajghera falls outside the municipal limits of Gurgaon for the instant year when the transactions took place. Based on this notification, the tribunal held that no capital gains could be taxed on the sale of agricultural land situated in the village outside the municipal limits.
The AO also made an addition concerning cash deposits in the bank account maintained with State Bank of Patiala, Bamnoli, Najafgarh Road, Delhi, in the name of the assessee. The total deposits (credit) and withdrawal (debit) in the account during the period from 01.04.2009 to 31.03.2010 were Rs. 1.95 crores and Rs. 1.96 crores respectively.
The assessee submitted the source of the cash deposits as follows:
The AO held that no evidence was furnished in respect of Rs. 2,00,000/-, Rs. 5,00,000/-, and Rs. 8,00,000/- deposited in the bank.
The tribunal, after hearing the arguments and perusing the records, found that the availability of cash for depositing in the bank account could not be disputed. Hence, the appeal of the assessee on this ground was allowed.
The AO made an addition of Rs. 56.5 lacs appearing in the bank account. The assessee submitted two sale deeds dated 30.07.2009 and an agreement to sale dated 10.08.2009 which reflects the receipts of the amounts from M/s Arena Estates Pvt. Ltd. It was also submitted along with the proof of repayment that the amounts had been given back to M/s Arena Estates Pvt. Ltd. Since the monies had been refunded owing to the cancellation of the agreement, no addition on this account was called for. In the result, the appeal of the assessee was allowed on this ground.
The case of Nandrup vs. ITO, Ward-3(1), Gurgaon, was concluded with the tribunal allowing the appeal on the grounds of both the sale of agricultural land and the cash deposits in the bank. This outcome highlights the importance of adequate documentation and representation in tax disputes.
The order was pronounced by the tribunal members, Sh. A.D. Jain, Vice President, and Dr. B. R. R. Kumar, Accountant Member, on 13th May 2022.
Members Present:
Sh. A.D. Jain, Vice President
Dr. B. R. R. Kumar, Accountant Member
Document Reference:
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(A)-1, Gurgaon
5. DR: ITAT
ASSISTANT REGISTRAR, ITAT NEW DELHI
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