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2015 (8) TMI 44 - AT - Income TaxUnexplained cash credit u/s 68 - addition representing share application money - Held that:- Solely on the basis of denial by some commission agents it cannot be concluded that share applicants were not having any agricultural income. More so, when AO has made enquiries with the concerned share applicants and has not found any adverse material to dispute the share applicant’s claim of having agricultural land holding or the fact that they are engaged in agricultural activity. The only thing the statement of commission agents prove, accepting them to be correct, share applicant’s claim that they have not gone to any mandy or commission agents for selling their produce and the produce were purchased by some persons from the place of cultivation itself appears to be genuine. AO also enquired about only Tomato sales whereas the share applicants have paddy cultivation also. Thus, AO having failed to bring any material on record to disprove share applicant’s claim of having agricultural land holding or engaged in agricultural activity, no doubt can be entertained with regard to their creditworthiness. In the aforesaid facts and circumstances, the addition being not based on proper evidence, we are not able to sustain the same - Decided in favour of assessee. Addition on the profit on sale of land - Held that:- As could be seen, at the assessment stage, assessee has claimed that apart from the payment made to original owners, assessee has also paid to various other persons towards surrender of their right over the property. As it appears, AO has not disputed the aforesaid claim of assessee. The only reason, he treated the surplus as profit of assessee is, the land in question is stock-in trade and not investment. That being the case, we are unable to understand on what basis, ld. CIT(A) concluded that assessee has failed to produce any evidence with regard to payment made to various persons. As rightly submitted by ld. AR, whether it is an investment or stock-in-trade, payment made by assessee has to be taken into account for arriving at the cost incurred. Therefore, in either case, there cannot be any surplus to be treated as income of assessee. Since the aforesaid aspect has not been considered either by AO or by ld. CIT(A) in proper perspective, we are inclined to remit the issue back to the file of AO for deciding afresh after due opportunity of being heard to assessee.- Decided in favour of assessee for statistical purposes. Unexplained investment in land - Held that:- AO has made the addition by stating that assessee has failed to explain the two amounts. Before ld. CIT(A) also assessee has not made proper representation. Therefore, considering the nature of dispute and claim of assessee, we are inclined to remit the matter back to the file of AO allowing assessee one more opportunity to explain the amounts in question. Accordingly, the matter is remitted to AO for deciding afresh after due opportunity of being heard to assessee. - Decided in favour of assessee for statistical purposes.
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