TMI Blog2014 (11) TMI 648X X X X Extracts X X X X X X X X Extracts X X X X ..... nly providing the bank account of the said creditor in Syndicate Bank but also his bank account in Axis Bank, Banjara Hills with reference to evidence of both receipt and payment of the amount on 09.03.2011 - not only the identity of the creditor but also genuineness of the transaction stands established – the order of the CIT(A) is modified and the credit is treated to be explained – Decided in favour of assessee. Cost of acquisition and improvement disallowed – Development of land resulted in STCG - Held that:- After seeing the documents and the amounts, there is evidence to the extent of ₹ 49,870 + ₹ 2725 being the registration charges and therefore, these amounts are to be allowed to assessee as cost of acquisition, apart from cost of purchase - AO is directed to consider these above two amounts also - there are already roads adjacent to the plots when assessee has purchased - All these plots are adjacent to each other and does not require any road internally - Since there is no evidence of any improvement other than the rough notings in a note book, the claim of assessee cannot be accepted - The entries in note book do not establish that expenditure was genuinel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ricultural income declared at ₹ 1,85,000 was also disallowed and treated as income from other sources. 3. Assessee preferred appeal before the Ld. CIT(A) who on the basis of the additional evidence furnished called for remand report from the A.O. and on examination of remand report and submissions made by assessee deleted the additions to an extent of ₹ 1,43,49,612, while confirming the two cash credits to an extent of ₹ 11,50,000. This issue is contested from grounds No. 2 to 4. With reference to disallowance of cost of improvement of ₹ 10,25,000 Ld. CIT(A) confirmed the order of A.O. on the reason that assessee has not furnished any evidence. He confirmed the order of the A.O. on agricultural income also. 4. With reference to cash credits confirmed by the Ld. CIT(A), it was submitted that assessee has received an amount of ₹ 7,00,000 from Mr. V. Gopinath and ₹ 4,50,000 from Smt. T. Syamala Devi. Ld. CIT(A) has confirmed the cash credit of Mr V Gopinath by stating as under : 10.2. As regards Sri Vidadala Gopinath, the Assessing Officer submitted that the appellant furnished a confirmation regarding advancing of ₹ 7 lakhs through ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence in support of such claim was given. Besides, she noted that the said loan was given by her, out of cash deposits. 10.6.1. In this regard it is the contention of the representative of the appellant that the loan amount was later repaid by the appellant on 9.3.2011. He averred that the identity of the creditor and the fact of advancing of loan had also been duly established. 10.6.2. On a consideration of the facts, I am of the view that even though Mrs. T. Shyamala Devi confirmed having given the loan of ₹ 4,50,000/- and such loan amount was even returned to her later, nothing could be furnished to substantiate the claim that such amount was given out of the retirement benefits of her spouse. The source of deposit of cash in her account before advancing of the loan could not be explained. It was also not substantiated that such cash was deposited out of the retirement benefits received by her husband. On the other hand, Smt. Shyamala Devi is not herself assessed to tax. Under the circumstances, it is to be concluded that the appellant has not been able to establish the creditworthiness of Mrs. T. Shyamala Devi. The addition of ₹ 4,50,000/- shown as unexplained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... discharged his duty of not only providing the bank account of the said creditor in Syndicate Bank but also his bank account in Axis Bank, Banjara Hills with reference to evidence of both receipt and payment of the amount on 09.03.2011. Given this fact situation, we are unable to understand how this credit can be treated as unexplained. There is evidence that the money has come from Smt. T. Syamala Devi to assessee by way of bank cheque on 17.04.2007 and assessee also repaid the amount to her on 09.03.2011. Therefore, not only the identity of the creditor but also genuineness of the transaction stands established. In view of this, we modify the order of Ld. CIT(A) and direct that this credit was to be treated as explained. The addition on this count is stands deleted. Grounds No. 2 to 4 are accordingly allowed. 6. The next issue contested in Grounds No. 5 and 6 is with reference to disallowance of cost of acquisition of ₹ 6,45,210 and cost of improvement of ₹ 10,25,000 stated to have been incurred for development of land which resulted in short term capital gain. Assessee has sold the property for an amount of ₹ 18,50,000 and claimed expenditure to the tune of & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Stones at ₹ 2,19,705 and Laying of Roads ₹ 3,12,425. 7.2. Having seen the documents placed on record and the property purchased by assessee, we notice that there are already roads adjacent to the plots when assessee has purchased. All these plots are adjacent to each other and does not require any road internally. Since there is no evidence of any improvement other than the rough notings in a note book, we are not convinced with the claim of assessee. The entries in note book do not establish that expenditure was genuinely incurred. We uphold the contentions of the A.O. and Ld. CIT(A) in this regard . This cost of improvement claimed by assessee cannot be allowed while computing short term capital gain. Accordingly, ground No.6 of the assessee is rejected. 8. Ground No.7 pertain to the treatment of agricultural income of ₹ 1,85,000 as income from other sources. Assessee has furnished evidence before the A.O. that he has taken lands on lease and has earned agricultural income. Even though remand report was called for, A.O. did not agree and Ld. CIT(A) confirmed the same. 8.1. Before us, Ld. Counsel submitted that assessee was earning the incomes regularl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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