9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (10) TMI 2507 - AT - Income TaxOn-money received in cash - AO branding the assessee as trader in the land - assessement u/s 153A - Held that - As we have held that the assessee is not a trader. Therefore if any cash component received by him the same be treated as receipt from transfer of agricultural land exempt from tax. Addition u/s 50C - Sale of land - addition on between the sale consideration shown in the sale deed vis-a-vis the value on which the stamp duty was paid - Held that - Section 50C of the Income Tax Act provide that where consideration received or accruing as a result of transfer by an assessee of a capital asset being land or building or both is less than the value adopted or assessed by any authority of a State Government for the purpose of payments of stamp duty in respect of such transfer the value so adopted by the assessee for the purpose of section 48 be deemed to be full value of the consideration received or accrued as a result of such transfer. Thus a conjoint reading of both sections would indicate that while calculating the capital gain under section 48 the value adopted for the payment of the stamp duty would be considered as full sale consideration received or accrued to the assessee on transfer of a capital asset. In the present case no capital gain computation is there. The assessee is a purchaser therefore deeming fiction provided under section 50C cannot be applied upon the assessee. Addition on account of accrued interest income of the assessee - Held that - AO atleast ought to have proved that it is in the hand-writing of the assessee or of any family member. In the absence of corroborative evidence it is quite difficult to give any categorical finding. The first onus is upon the Revenue to charge the assessee with exact details pointing out that these details relate to the assessee. No such effort was done by the AO also. Therefore we give benefit doubt to the assessee and on the basis of such insufficient incomplete evidence the assessee cannot be burdened with taxability. Thus additions deleted Addition on opening capital balance - Held that - This aspect needs verification. The AO has not recorded any categorical finding on this issue. We direct the AO to verify whether the assessee has filed the balance sheet with the return of income in earlier years more particularly for the Asstt.Year 2002-03 and disclosed the capital balance in the closing account at Rs. 19, 11, 522/- then no addition will be made on account of opening capital balance in the Asstt.Year 2003-04. The ld.AO shall carry out this exercise after providing due opportunity of hearing to the assessee. Addition on account of unaccounted cash found at the time of search - Held that - CIT(A) has granted telescopic benefit to the assessee. Once the ld.CIT(A) has accepted the fact that the additional income offered by the assessee of Rs. 9 lakhs can easily be take care of alleged unaccounted cash found during the course of search carried out during the accounting period 2009-10. We find no error in the finding of the ld.CIT(A) which is confirmed Addition on cash credit - Held that - A perusal of the finding recorded by the CIT(A) would indicate that the seized documents pertained to Asstt.Year 2001-02. These are loans taken by M/s.Liberty Polymers Industries and not by the assessee. Therefore their additions cannot be made in the hands of the assessee more so in the Asstt.Year 2009-10. The ld.AO has not assigned any particular reasons for treating the income in the hands of the assessee. We therefore do not find any error in the order of the CIT(A) Addition on promissory notes inventory - Held that - no amount is outstanding towards the assessee taken from the Shroff. Because according to the CIT(A) if the assessee has taken loan and then returned that loan and collected back his promissory note then also no unaccounted income could be construed as generated. The AO did not find unexplained investment during the course of search. Thus we do not find any error in the findings of the ld.CIT(A) in deleting the addition Undisclosed investment - Addition on account of some rough working - CIT(A) deleted addition - Held that - First Appellate Authority has deleted the addition on the ground that it is difficult to infer the nature of income whether the investment or otherwise. The entries reflected in the seized paper do not goad adjudicating authority to any logical conclusion. The ld.DR also failed to point out the error in the conclusions arrived by the CIT(A). He simply relied upon the order of the AO. Therefore we do not see any reason to interfere with the order of the CIT(A) on this issue. Appeal decided partly in favour of assessee
Issues Involved:
1. Addition of unaccounted cash receipts as business income. 2. Addition of interest income on alleged advances. 3. Deletion of addition based on notings in seized materials. 4. Difference in stamp duty valuation. 5. Unaccounted cash found during the search. 6. Addition based on promissory notes. 7. Addition based on loose papers. Issue-wise Analysis: 1. Addition of Unaccounted Cash Receipts as Business Income: The assessee challenged the addition of Rs. 1,03,90,705 on account of unaccounted cash receipts, which the AO treated as business income from alleged land deals. The AO inferred that the land was sold at Rs. 9,00,000 per vigha, based on seized papers (page nos. 72 and 73 of Annexure AS-5). The CIT(A) partly confirmed the addition, but the Tribunal found that the AO's assumptions were not supported by evidence. The assessee provided details of land ownership and sale transactions, demonstrating that the payments were made through account payee cheques, and the alleged cash component was not substantiated. The Tribunal deleted the addition, concluding that the assessee was not a trader in land but an agriculturist. 2. Addition of Interest Income on Alleged Advances: The AO added interest income based on seized documents (page nos. 62 and 75 of Annexure AS-5), assuming loans were given by the assessee. The assessee contended that the notings did not belong to him and were not in his handwriting. The Tribunal observed that the AO failed to verify the handwriting or provide corroborative evidence. Given the lack of concrete evidence, the Tribunal deleted the additions for interest income. 3. Deletion of Addition Based on Notings in Seized Materials: The Revenue appealed against the deletion of additions based on notings in seized materials, arguing that the assessee received cash components not reflected in the sale deeds. The Tribunal upheld the CIT(A)'s decision, noting that the assessee provided sufficient evidence, including revenue records and sale deeds, proving that the transactions were legitimate and payments were made through cheques. The Tribunal found no basis for the AO's assumption that the assessee received additional cash. 4. Difference in Stamp Duty Valuation: The AO added Rs. 5,94,075, assuming the purchase price should match the stamp duty valuation. The Tribunal clarified that Section 50C applies to the computation of capital gains, not to the purchaser. Since the assessee was the purchaser, the deeming fiction of Section 50C was not applicable. The Tribunal upheld the CIT(A)'s deletion of the addition. 5. Unaccounted Cash Found During the Search: During the search, Rs. 3,74,470 was found, which the assessee claimed as commission income and sought telescoping benefit against additional income offered. The AO made a separate addition, but the CIT(A) granted the telescoping benefit. The Tribunal found no error in the CIT(A)'s decision, confirming that the additional income offered could account for the cash found. 6. Addition Based on Promissory Notes: The AO added Rs. 18,50,000 based on promissory notes found during the search, assuming loans were taken by the assessee. The assessee contended that the loans were not executed. The CIT(A) agreed with the AO that loans were likely taken but concluded that the amount could not be considered unaccounted income. The Tribunal upheld the CIT(A)'s decision, noting that no unexplained investment was found, and the AO could only initiate penalty proceedings for violation of Sections 269SS and 269T. 7. Addition Based on Loose Papers: The AO added Rs. 2,48,570 based on loose papers with unclear entries. The CIT(A) deleted the addition, finding no conclusive evidence that the entries represented the assessee's income. The Tribunal agreed, noting the lack of clarity and corroborative evidence, and upheld the deletion. Conclusion: The Tribunal allowed the assessee's appeals for the assessment years 2004-05 to 2008-09, deleting the additions made by the AO. The Revenue's appeals for the assessment years 2007-08 and 2009-10 were dismissed. The Tribunal emphasized the need for concrete evidence and proper verification in making additions based on seized documents and notings.
|
