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2009 (6) TMI 121 - AT - Income TaxReceipt of on Money - Valuation of Property sold - nature of land sold - difference in the cost of construction declared by the assessee and determined by the Departmental Valuation Officer - AO accepted the sale price mentioned in the conveyance deed whereas the Commissioner of Income-tax (Appeals) accepted the sale price mentioned in the agreement to sell - contention of the assessee that the actual consideration is as per the agreement and he has received the said amount by cheques/demand drafts and paid compounding fee for understated consideration - Commissioner of Income-tax (Appeals) has accepted the contentions raised by the assessee and deleted the additions - AO himself has characterised, without any contradiction of facts, that the additional amount received by the assessees on sale of coffee estates in Wayanad, over and above the registered sale deed, were "on money". The question is whether the said "on money" is still taxable in the present case. The property sold by the assessee was agricultural property situated beyond 8 k.m. of any Municipality. HELD THAT:- The property was not notified either. In such circumstances, any surplus of money arising to an assessee on sale of agricultural land always partakes the character of agricultural income itself. The consideration stated in the registered sale deed is very much agricultural income. Likewise, the "on money" also should be treated as agricultural income even though that surplus consideration is tainted with the expression "on money". The genesis of the "on money" is definitely the sale of agricultural land. The hon'ble Supreme Court in the case of CIT v. All India Tea and Trading Co. Ltd.[1996 (3) TMI 4 - SUPREME COURT] has held that compensation received on requisition of agricultural land amounted to agricultural income. The Supreme Court again in the case of Singhai Rakesh Kumar [2000 (11) TMI 2 - SUPREME COURT] has held that income arising out of the transfer of such agricultural lands are not exigible to capital gains as they are in the nature of agricultural income. Therefore, it is to be held that the receipts/profits arising to an assessee on transfer of agricultural land amounts to agricultural income as provided under section 2(1A) of the Act. Therefore, even if the consideration in excess of the apparent consideration is deemed as "on money", still it cannot be taxed, as the true colour of that "on money" is "agricultural income". Appeal of the Revenue is dismissed. Difference in the cost of construction declared by the assessee and determined by the Departmental Valuation Officer, which was directed to be included in the total income - We restore the matter back to the file of the Assessing Officer with a direction to reconsider the issue afresh in the light of the retrospective amendment to the Act and after affording adequate opportunity of hearing to the assessee. Unexplained deposits in bank account - We find that Dr. Koshy George has not deposited any amount by way of agricultural income. So for the remaining amount of Rs. 45,000, the Commissioner of Income-tax (Appeals) has directed the Assessing Officer to include the same in the total income and issue notice of concealment. From the facts as narrated above and the assessee has failed to explain satisfactorily either before the Commissioner of Income-tax (Appeals) or even before the Tribunal with regard to the source of Rs. 45,000, we uphold the findings of the Commissioner of Income-tax (Appeals) on this issue. We do not express any view on the question of "concealment". Unexplained credit/bank deposits - CIT(Appeals) rejected the contention of the assessee on the ground that the assessee could not produce any confirmation letter from the party from whom this cheque was received - HELD THAT:- As the fresh evidence produced by the assessee before the Commissioner of Income-tax (Appeals) was not produced before the Assessing Officer and no application under rule 46A was filed. Hence, the Commissioner of Income-tax (Appeals) sustained the addition made by the Assessing Officer correctly. Even at the time of hearing, learned counsel for the assessee was unable to produce any confirmation letter from the party from whom the assessee has received the cheque. Hence, we uphold the order of the Commissioner of Income-tax (Appeals).
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