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2021 (1) TMI 320 - AT - Income TaxExemption claimed u/s 54B - AO found that the land in question was sold after converting the same into non-agricultural land - HELD THAT:- DR has not brought anything on record suggesting that the exemption was claimed by the assessee after violating the provisions of law insofar the land in question that it was not used for the agricultural operations. Accordingly, we set aside the order of the learned CIT (A) and direct the AO to allow the claim of the assessee for the exemption under section 54B of the Act. Hence the ground of appeal of the assessee is allowed. Deduction u/s 54B - agricultural land sold by the Appellant at Village nardipur was not continuously held for two years for being used for agricultural purpose - HELD THAT:- From the report we find that Nardipur village has population of 8 thousand only. From the Google search we find that the Nardipur village is also a gram panchayat and situated 13 km away from sub-district headquarter Kalol and 20 km away from district headquarter Gandhinagar. Therefore in our considered view the impugned land fulfils the criteria of being an agricultural land. Hence the same is outside the purview of capital asset and not liable to tax under the head capital gain. Accordingly we set aside the order of the learned CIT (A) and direct the AO to delete the addition made by him. Hence the issue raised by the assessee vide additional ground of appeal is allowed. Unexplained investment in purchase of land - HELD THAT:- Investment has been made by the assessee against the sale proceeds which has already been offered to tax and assessed in the assessment year 2010-11 by the AO vide order dated 28th March 2014. The burden lies upon the Revenue to prove the assessee’s contention wrong based on cogent material that the amount received by the assessee against the sale properties bearing survey no- 197/1 and 198/1 at Motera village was not utilised for the investments in the properties as discussed above. But the revenue has not brought anything on record and also not pointed any defect in cash flow statement as prepared by the assessee. In the absence of any adverse finding by the AO in the assessment order viz a viz no material brought on record by the learned DR in support of the finding of the AO, we conclude that the investment has been made by the assessee out of the cash receipts as discussed above which has already been subjected to tax. Accordingly any further addition of such unaccounted cash will lead to double addition which is unwarranted under the provisions of law. Accordingly, we do not find any infirmity in the order of the learned CIT (A) and thus uphold the same. Hence the ground of appeal of the revenue is dismissed. Addition of cash found in search - Loose paper found & seized during the course of search -HELD THAT:- The loose paper found & seized during the course of search and as reproduced by the A.O. in the assessment order, clearly prove that the three partners earned the profit on the sale of the land under consideration. The word "Nafo" has been used, which prove that the transaction has been completed - addition made by the A.O. are found justified. The loose paper indicated that the amount of ₹ 1,05,00,0007- was relating to profit of deal in respect of land at Village Motera Navi Sarat Land. However, from the said loose paper as reproduced by A.O. at Para 4 page 6 of the Assessment Order and as per statement recorded, there were three partners in the said amount of ₹ 1,05,00,0007-and amount mentioned against the Appellant's name is ₹ 70,00,000/-. It is settled legal position that a document or statement has to be read as a whole and hence, addition in the hands of the Appellant bases on the said paper, cannot exceed ₹ 70,00,000/-. I therefore direct the AO to restrict the addition to ₹ 70,00,000/-. The Appellant gets a relief of ₹ 35,00,000/-. Unexplained capital gain - certain amount against the sale of the land through cheque but the same were never presented to the bank for the reason that the deal got cancelled - HELD THAT:- CBDT has emphasized to its officers to focus on gathering evidences during search/survey operations and strictly directed avoiding to obtain admission of undisclosed income under coercion/ undue influence. Keeping in view the guidelines issued by the CBDT from time to time regarding the statements obtained during search and survey operation, it is undisputedly clear that the lower authorities have not collected any other evidence to disprove the contention of the assessee. Entire amount recorded in the seized documents has been treated as income of the assessee without calculating the capital gain as per the provisions of section 48 of the Act. Assuming, but not admitting, that impugned amount represents the income of the assessee then it has to be worked out as per the provisions of law. None of the authorities below has given any benefit of the cost of acquisition and index cost as provided under section 48. In view of the above we disagree with the finding of the authorities below. Accordingly we set aside the finding of the learned CIT (A) and direct the AO delete the addition made by him.
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