TMI Blog2014 (11) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... ingly - If she acquired the plots in question before 1.4.1981 then benefit of indexation would be from 1.4.1981 otherwise from the date on which she acquired the plots - AO is directed to recomputed capital gain on sale of two plots, after determining the date of acquisition in the hands of previous owner i.e. Smt. Sita Devi. Expenses on consultancy services disallowed - Held that:- During the course of assessment proceedings, the assessee had filed confirmation from the recipients - He has submitted the schedule of payment - According to the assessee payments on each day were not exceeding ₹ 20,000/- prescribed u/s 40A(3) - There is no course to verify the claim except cross examining the recipients - AO did not carry out that exercise – thus, the matter is also required to be remitted back to the AO for re-examination of issue – Decided in favour of assessee. LTCG deleted – Held that:- S.45 of the I.T.Act contemplates that any profits or gains arising from the transfer of a capital asset effected in the P.Y. shall save as otherwise provided in S.54, 54B, 83C be chargeable to income tax under the head capital gains’ and shall be deemed to be the income of the P.Y. in w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e addition of long term capital gain of ₹ 82 lakhs; (b) Ld.CIT(A) has erred in deleting addition of ₹ 25 lakhs which was made by the LD.AO u/s 69 of the Income Tax Act . 3. With the insistence of Ld.Counsel we have gone through the record carefully. The assessee is an individual. He has filed his return of income electronically on 27.3.2010 declaring an income of ₹ 21,41,760/-. The case of the assessee was selected for scrutiny assessment and a notice u/s 143(2) was issued and served on the assessee. During the course of assessment proceedings it revealed to the LD.AO that the assessee has sold three properties and declared long term capital gain of ₹ 16,06,483/-. The computation of long term capital gain read as under: Computation of long term capital gain Long term capital gain: Agriculture land 21.1.2009 Value u/s 50C Sale consideration received Sale consideration Less: Indexed cost Market value as on 1.4.1981 F.Y. 1981-82 419300/100 x 582 ₹ 35,16,000/- ₹ 35,16,000/- ₹ 24,40,326/- ₹ 35,16,000/- 24,40,326/- ₹ 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... njula J.Shah (2009) reported in 318 ITR(AT) 417(Mum)(SB). It was contended that this judgement has been upheld by the Hon ble Mumbai High Court reported in 204 Taxman 42 (Bom). It was also contended that the Hon ble Delhi High Court in the case of Arun Kumar Shungloo Trust (2012) reported in 18 Taxman.com 261 has also upheld this view. 4. The Ld.CIT(A) has called for a remand report from the LD.AO. The Ld.LD.AO has objected the plea of the assessee on the ground that when he confronted the assessee with this issue during the assessment proceedings, then, the assessee has surrendered this and filed a revised computation. Therefore the assessee has no right to challenge this issue in an appeal. However Ld.CIT(A) has rejected this plea of the Ld.A.O. and observed that it is a legal issue; that the assessee cannot be prohibited from taking such a plea; the capital gain has to be computed as per provisions of law and not on the basis of some concession given by the assessee under a mistaken belief or misconstruction of facts. The Ld.First Appellate Authority has made an elaborate discussion on the position of law in paragraph no.17, but somehow failed to give logical directions or a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any evidence for ascertaining this date. Some rough reference is available in the will. Therefore we directed the Ld.Counsel for the assessee to produce some document indicating the cost of acquisition in the hands of his mother. The assessee had produced copy of a decree sheet in Original Suit No. 72/1970 and contended that his mother has received the disputed property on partition by way of this decree. 6. After taking into consideration this aspect we deem it appropriate to set aside this issue to the file of Ld.AO with the direction that the Ld.Ld.AO shall determine the date on which assessee s mother had acquired these plots and thereafter give the benefit of indexation accordingly. If she acquired the plots in question before 1.4.1981 then benefit of indexation would be from 1.4.1981 otherwise from the date on which she acquired the plots. The LD.AO is directed to recomputed capital gain on sale of two plots, after determining the date of acquisition in the hands of previous owner i.e. Smt. Sita Devi. 7. The next issue agitated by the assessee is with regard to disallowance of ₹ 3,37,000/-. The assessee had incurred expenditure for providing consultancy services. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... akhs. He has not disclosed any capital gain on sale of the plot. The LD.AO has obtained the sale deed registered on 2nd December,2008 and confronted the assessee that land was sold for a consideration of ₹ 1 lakhs whereas the value of the property as per Circle rate is ₹ 87 lakhs. In response to the query of LD.AO it was contended that vendee has played a fraud on the assessee. The vendee wants the assessee to stand as surety for a loan. The signature of the assessee was taken for the purpose of security of a car loan. He has mis used the relationship and fraudulently wrote transfer of land. The assessee has not received any money. When the assessee came to know about this, he filed a civil suit and ultimately the Hon ble Court on 5th April,2011 declared the sale deed as null and void. The LD.AO has rejected this contention on the ground that the sale deed has been declared null and void in subsequent year, as per the sale deed, land was transferred during the accounting year relevant to AY 2009-10. The Hon ble Court has passed the decree in April,2011. Therefore in AY 2009-10, the assessee ought to have declared capital gain. LD.AO has made addition of ₹ 82 lakhs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 29.9.2008; ₹ 3,50,000/- out of own cash holding 6.2.2009 1,50,000/- Out of sale proceeds of a land being ₹ 1,50,000/- 6.2.2009 3,00,000/ Out of sale proceeds of a land being ₹ 3,00,000/- The amounts deposited on 28.11.2008, 27.12.2008, 21.9.2008 and 6th Feb.2009 is concerned, there is no dispute. The AO got the information through Annual Information Wing and also collected the bank statement. The stand of the assessee is that he has withdrawn amounts on 26th September,2008 and out of that cash, ₹ 7 lakhs was deposited. Similarly on 27.9.2008 he has withdrawn the amount which was deposited. The Ld.First Appellate Authority has made an analysis of these withdrawals and thereafter deleted the addition by observing as under. have gone through the assessment order dt. 14.12.2011 and considered the written submissions and other supporting evidences filed by the appellant. An addition of ₹ 25,50,000/- was made as unexplained cash credit u/s 68 by the AO which the AO has alleged before me was without providing sufficient and adequate opportunity to present his case. The facts in brief are that the appellant had made periodical withdrawal and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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