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2005 (9) TMI 543 - AT - Income TaxCash credits - Income from undisclosed sources u/s 68 - benefit of exemption u/s 54F - HELD THAT:- After having perused the entire material that is available on record, there is no averment, much less any evidence, with the revenue in this regard. In our view, while there may be enough grounds with the Assessing Officer to carry out the impugned verification exercise to test the efficacy of the transactions resulting in long-term material gains in the hands of the assessee but there is no cogent material or evidence to indicate that the impugned sale proceeds reflected unaccounted income of the assessee. Therefore, we hereby affirm the conclusion drawn by the CIT(A) in this regard. Having sustained the long-term capital gain declared by the assessee, the exemption thereafter claimed by him under section 54F with regard to the investment made for acquisition of the house property is also allowable because the only ground to deny the said exemption was the treatment of the capital gain proceeds as unexplained, which we have already concluded otherwise. Thus, we affirm the decision of the CIT(A) and the revenue fails in this ground. We find that the first appellate authority has failed to address the issue in its proper perspective. The only reason considered by the CIT(A) in deleting the addition is to the effect that the addition as made by the Assessing Officer was on the basis that the sale proceeds of the shares sold were found to be unexplained. While the said ground may not be enough to justify the addition, yet the CIT(A) failed to appreciate that the onus still remained on the assessee to explain the sources for making the impugned investment towards acquisition of the property. We do not find any finding by the CIT(A) with regard to the explanation offered by the assessee on this issue. Although we notice that the assessee, by way of his written submissions before the CIT(A), a copy of which is placed at pages 1-5 of the paper book before us, had explained that the assessee withdrew a sum of Rs. 1,40,000 on 6-7-1996 from its bank account for utilization in the purchase of stamp duty, etc., but this aspect has not been considered by the CIT(A) and nor by the Assessing Officer. Certainly, the same requires verification. Therefore, for this limited purpose, we set aside the order of the CIT(A) and restore the issue to the Assessing Officer who shall consider and examine the plea of the assessee in this regard. If the Assessing Officer is satisfied that over and above the sale proceeds of the shares, the assessee had sufficient funds to meet the balance investment in the property, no addition shall be required to be made. If on the contrary, the Assessing Officer is not so satisfied, he shall be at liberty to pass such order as is in accordance with law. Of course, the Assessing Officer shall carry out the verification exercise after allowing the assessee due opportunity of being heard in the matter. In the result, the appeal of the revenue is partly allowed for statistical purposes.
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