INCOME TAX ACT, 1961

Section 68

Income from undisclosed sources - Addition under section 68 - Cash deposited in bank - Assessee claiming that money deposited represented sale value of agricultural land

Assessee deposited cash of Rs. 18,00,000 in his bank account. It was claimed that this money was received on sale of agricultural land. The explanation of the assessee was that during the year, the assessee has taken this sum in lieu of transfer of his agricultural land. Assessee also handed over the possession as substantial money was received, however registry etc. was pending for the reason that the said land was part of the jointly held family land. The allegation of the assessing officer was that the agreement was oral. Held: Even the oral agreements are well recognized in the Indian Contract Act. Further, the manner of transaction also depends on personal comforts, proven integrity of the parties etc. In case of any dispute the transaction can even be enforced through the Court of Law by the other parties on the basis of documents/statements given before the assessing officer in the income tax proceedings. In such circumstances, it is not justified to raise the said issue for doubting the transaction. The possession of land has been handed over by the assessee and the land is now not cultivated by the assessee. Both the persons appeared before the assessing officer as witness, shown documentary evidence of holding the agricultural land and their income from the agricultural land held by them hence shown their capacity to make payment for the purpose of buying agricultural land. In view of above there was no merit in the addition made by the assessing officer.

REFERRED :

FAVOUR : In assessee's favour

A.Y. :

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