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2013 (11) TMI 1266 - AT - Income TaxAddition of Unexplained Rental Deposit - The amount was credited into bank account on 18.4.2001 - Because of gap of 18 days between the date of rental agreement and the amount credited in the bank account, the lower authorities doubted the transaction - there was no merit in doubting the transaction as the amount had been received from Blue Dart Express Ltd., and duly credited into the bank account. Being so, the addition was not sustainable - Accordingly, we delete the addition. Capital Gain - Eeven though the same was already offered to tax in the return of income filed - Held that:- Reflection of investment to be considered with reference to the Cash Flow Statement filed by the assessee before the Assessing Officer and to be decided accordingly - we remit the issue back to the file of the Assessing Officer for fresh consideration. Addition of Unaccounted Cash Deposits – Held that:- The CIT(A) was satisfied that the source had been duly examined by the Assessing Officer and found to be correct - Being so, the CIT(A) deleted the addition - We do not find any infirmity in the action of the CIT(A) as the Assessing Officer had no objection to delete the same - Accordingly, we confirm the action of the CIT(A) on this issue. Disallowance on Account of Interest on Drawings – Held that:- Following Keshavji Raoji & Co. etc., etc. v. CIT [1990 (2) TMI 1 - SUPREME Court ] - in making disallowance for the interest paid by the partnership firm to a partner u/s. 40(b) the interest, in turn, paid by the partner on his borrowings from the firm should be taken into account of and deducted and only the balance is to be disallowed u/s. 40(b) of the Act - only the net amount of interest paid by the firm after deducting interest paid by the same partner to the firm can be disallowed u/s. 40(b) of the Act - only the net amount of interest to be treated as income in the hands of the assessee and the gross interest cannot be considered - Accordingly, this ground of the assessee was allowed in all these appeals. Treatment of Annual Letting Value (ALV) - Held that:- The Department had no material to show that it was not occupied by the assessee himself or it was rented to any other person so as to derive the rental income from it - Being so, the claim of the assessee cannot be denied on mere suspicion and surmises - Accordingly, in the absence of any evidence contrary to the evidence produced by the assessee, we are inclined to decide the issue in favour of the assessee as it was self-occupied - This ground of the assessee was allowed in all the above appeals. Addition on Account of Encashment of FD - The assessee made a categorical statement that the amount was duly reflected in the Cash Flow Statement filed by Rao Subba Rao before the DDIT (Inv.) - If it was so disclosed, the addition was not warranted in the hands of the assessee - Accordingly, we remit this issue to the file of the Assessing Officer for fresh consideration. Amount Received on Sale of Agricultural Land as business income though it was exempted asset which was not liable to capital gain – Held that:- K.C.K.A. Gupta vs. ACIT [2003 (7) TMI 284 - ITAT HYDERABAD-B] - estimation of income on sale of land was to be considered at 25% of the undisclosed turnover being the net profit out of sale of land - the sale of land was to be treated as business activity of the assessee and income on this transaction was to be estimated at 25% of the turnover - This ground of the assessee was partly allowed.
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