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2022 (7) TMI 1205 - AT - Income TaxUnexplained cash credit u/s. 68 - CIT-A deleted the addition - HELD THAT:- CIT(A) has dealt with the facts and evidence on record extensively while granting relief in the case of assessee. Detailed order passed by the CIT(A) indicating reason for deleting the addition has been reproduced in the paragraphs hereinabove. We note that various adverse inferences drawn by A.O. in assessment order have been correctly dealt with in his appellate order and does not call for any interference. We are in agreement with the findings and reasoning recorded by CIT(A) in his appellate order reproduced hereinabove deleting the addition in the case of assessee. Considering totality of facts and circumstances in the case of assessee and considering legal evidence on record. We hold that that addition made by A.O. is unjustified and unsustainable. We uphold the order of CIT(A) deleting addition made in the assessment framed. Grounds of appeal 1 to 5 of revenue are dismissed. Addition u/s. 69C on account of unexplained expenditure - expenditure on account of commission paid for bringing back money in his books as bogus long term capital gain - HELD THAT:- The very premise for which the addition is made has been held to be not correct and thus consequent addition made by A.O. for alleged expenditure is unjustified and unsustainable. It is seen that the A.O. has made adverse inference which is not based on any material or evidence on record. A.O. has not even stated as to whom the aforesaid money is paid so as to constitute the expenditure incurred which may require to be explained by assessee. It is settled position of law the onus is on A.O. to show first that the expenditure is incurred and question of same required to be explained by assessee arises thereafter. In the first place there being no evidence of expenditure incurred by assessee, the question of any addition for the same does not survive. The addition made by A.O. is unjustified and unsustainable. We therefore hold that there is no case for making any addition u/s. 69C - Addition made by A.O. has correctly been deleted by learned CIT(A). Gain on sale of land - capital gain or business income - HELD THAT:- The assessee has sold properties and surplus arising on the same has been declared as long term capital gain at the hands of assessee. The computation of income indicates that the surplus shown in the return is under the head long term capital gain. The properties sold by assessee are held for more than 36 months is undisputed fact on record. The investment made by assessee is recorded in books of account as investment being capital assets. A.O. has referred to statement of assessee as reproduced in assessment order at page 20 to conclude that the assessee has admitted that he is carrying on business in real estate. The assessee was questioned in the statement as to what is the source of your livelihood. The statement read as a whole does not indicate that the assessee has admitted as observed by A.O. in assessment order i.e. he is engaged in the activity of business in property. The adverse inference drawn by A.O. in assessment proceedings is unjustified. It is noted that one of the property sold was owned and held for around 9 1/2 years and another property sold was owned and held for 6 years. Property owned and held was enjoyed for deriving agricultural income which is accepted in the case of assessee. Both the properties are held as co-owner. On above factual position it cannot be concluded that surplus arising is business income as held by A.O. In case of assessee property having been held for more than 36 months as investment indicates that the intention of acquisition of property was to hold the same as capital assets and thus surplus arising on the same is correctly declared to be assessable under the head long term capital gain. We therefore hold that no fault can be found with regard to income declared under the head long term capital gain on sale of property. CIT(A) has correctly directed to accept long term capital gain and not assess income as business income. We are in agreement with the findings and reasoning recorded by CIT(A) deleting the addition in the case of assessee. We find no merit in appeal of revenue. - Decided in favour of assessee.
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