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2017 (3) TMI 134 - AT - Income TaxAddition on unexplained bank deposits - Held that:- As noticed from the assessment order itself that the assessee withdrew a sum of ₹ 74 lac from her savings bank account in the second half of the calendar year 2010. A sum of ₹ 36 lac was re-deposited in the month of March, 2011 and the assessee’s claim is that the remaining amount was re-deposited in the next financial year. The AO has made an addition of ₹ 36 lac by treating the amount of deposits in the bank as unexplained. It is strange that when the assessee categorically submitted details of cash withdrawals from the same bank account which was redeposited, the AO did not get convinced and made addition on extraneous issues, being, the non-submission of details of property which was sought to be purchased, but, finally not purchased. The assessee has specifically contended that the amount was withdrawn from the bank for the purpose of purchase of some property, which transaction did not materialize. The AO has not shown that the cash so withdrawn was used elsewhere and was not available for re-deposit. Thus the presumption has to be that the amount withdrawn a few months before its re-deposit is out of earlier withdrawals, which does not call for any addition. Therefore, order to delete the addition - Decided in favour of assessee. Computation of capital gain - Held that:- Sum incurred for sanitary fittings etc., done by the assessee as a fresh exercise to renovate the premises and POP ceiling is, again, not in the nature of repairs and maintenance and has to be treated as cost of improvement. Expenditure on door and window is also a case of replacement of the earlier window and door and not its repair. As the assessee was intending to sell the property, she considered it expedient to improve the property before sale, so that a handsome price could be received. Since these three amounts are in the nature of cost of improvement and do not fall in the realm of repair and maintenance, thus hold that the computation of capital gain should be done treating these three amounts as 'Cost of improvement’. Computation of capital gain determination of 'Full value of consideration’ - Held that:- The assessee sold this property for a sum of ₹ 1,75,000/-, which was taken as a full value of consideration. Circle rate for stamp duty purpose was mentioned at ₹ 2,66,049/- in the sale deed itself. The AO adopted this figure for computing capital gain, which came to be affirmed in the first appeal. The assessee is aggrieved against adoption of such amount as full value of consideration. Thus no reason to disturb the adoption of this amount as full value of consideration in terms of section 50C of the Act. This action is approved. The AO is directed to recompute the amount of capital gain on transfer of this property in the terms indicated above. Addition on ‘Income from house property’ - Held that:- The contention of the assessee about the receipt of house rent of ₹ 1,08,000/- is unsubstantiated inasmuch as neither any rent agreement was placed on record nor the rent payment was received through cheque. It is seen that the AO has adopted annual value of the property at ₹ 2,25,996/- which has been disputed by the assessee as not in accordance with the Rules of House Tax Department. Under these circumstances, set aside the impugned order and remit the matter to the file of the AO for deciding this issue afresh as per law, after allowing a reasonable opportunity of being heard to the assessee.
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