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2010 (8) TMI 752 - AT - Income TaxUnexplained credit - availability of cash - HELD THAT:- Once the department accepted the return of income for the assessment year 1999-2000, it is to be construed that they accepted the computation of income and also cash-flow statement and the balance sheet enclosed with the return of income. They have not questioned the cash-flow statement regarding the availability of funds thereon. Later on, the department cannot say this fund is not available to the assessee. Due credit to this should be given. It is not open to the department to pick and chose the contents of the return as suits to them. Accordingly, in our opinion, the credit is to be given to the availability of cash to the tune of Rs. 2,14,012. Hence, this ground taken by the assessee is allowed to that extent of Rs. 2,14,012. Addition of Low drawing - assessee paid a Municipal Property Tax at Rs. 12,752 and the assessee’s family consists of 5 members and the drawings of Rs. 20,000 is not enough to meet the monthly expenditure of the family - HELD THAT:- AO has not brought on record anything other than payment of municipal tax of Rs. 12,752. Unless the AO brought on record any evidence regarding the exact amount of expenditure incurred by the assessee in the form of bills, vouchers or bank withdrawals, we are not in a position to confirm this issue in its entirety. Accordingly, we confirm the addition to the tune of Rs. 12,752 paid towards municipal tax for which there is an evidence of expenditure. Thus, Appeal is partly allowed. Exemption u/s 54F - assessee not utilized the capital gains in purchase of plot and construction of house thereon. The plot was purchased much before the capital gain accrued/received by the assessee and the assessee has not produced any evidence to prove that he has constructed the house within a period of 3 years from the date of sale of the property- Also assessee has not invested the unutilized long-term capital gain in a specific bank account - HELD THAT:- From a bare reading of section 54F, we find that sub-section (1) should be read along with sub-section (4). If both these sub-sections are read in a conjunction only one inference is drawn that to avail the benefit of section 54F, the assessee is required either to purchase a residential house out of the sale proceeds or long-term capital asset within a period of one year before or 2 years after the date on which transfer took place or within a period of 3 years after that date, construct a residential house. In that case, gain shall be computed as per clauses (a) and (b) of sub-section (1). In the present case, it is admitted fact that the assessee has brought an asset in the month of September, 2000, though the assessee sold the property in the month of January, 2001. Thus, the assessee has fulfilled the conditions laid down in this. The assessee invested the capital gain arised from the transfer of long-term capital asset not being a residential allowance invested in residential house. The assessee is entitled for deduction to that extent and the findings of the CIT(A) in accordance with the provisions of section 54F and the same is confirmed. Thus, appeal is dismissed. Addition as receipts - Year of assessment - assessee received remittance - AO concluded the remittance should have come only during that year to explain such liability - Since the remittance has come in the earlier year, the CIT(A) deleted the addition - HELD THAT:- These facts were not controverted by the departmental representative and, hence, in our opinion, the addition cannot be made in the assessment year 2003-04. The deletion of addition by CIT(A) is justified and same is confirmed.
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