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Sudhirbhai Govindbhai Oza Versus Income-tax Officer Ward 10 (4) , Ahemdabad

Denial of claim of capital gains computed by the Assessee - capital gain on sale of property - applicability of section 50C - Held that:- It is a fact that assessee had entered into an agreement for sale in 1990 to sell the property for ₹ 3,50,000/- and pursuant to the agreement Assessee was paid only 50,000/- on 17.05.1993. It is also a fact that the possession of the property was handed over by the Assessee on the receipt of earnest money of ₹ 50,000/-. The agreement for sale and B .....

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certain cases, was inserted by Finance Act, 2002 with effect from 01.04.2003 and was therefore not applicable to the year when the Assessee had entered into the Banakat. We further find in the case of Chaturbhuj Dwarakadas Kapadja vs. CIT (2003 (2) TMI 62 - BOMBAY High Court) has held that the capital gains would be taxable in the year in which the transactions are entered into even if the transfer of immovable property is not effective or complete under the general law. Before us, Revenue has .....

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e has not placed any material on record to controvert the findings of ld. CIT(A) and therefore to that extent we find no reason to interfere with the order of ld. CIT(A). With respect to the addition on account of remaining amount of 15,85,179/- (Rs. 16,73,229/- less ₹ 88,050/-) is concerned, we find that in the absence of any submission of details by the Assessee before A.O, he considered the aggregate of amounts appearing in the credit side of the bank account with ICICI Bank as unexplai .....

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in accordance with law. The Assessee is also directed to co-operate by furnishing the necessary evidence as called for by A.O. - Decided partly in favour of assessee for statistical purposes.

Addition on account of agricultural income - Held that:- As before A.O, Assessee had furnished the copy of 7/12 extract and Form 8A and from the land Assessee has stated to have earned agricultural income. The holding of agricultural land by the Assessee has not been doubted by the Revenue. Befor .....

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.,JJ. For the Appellant : Shri G.A. Mehta, A.R. For the Respondent : Smt. Sonia Kumar, Sr. D.R. ORDER Per Anil Chaturvedi, Accountant Member 1. This appeal filed by the Assessee is against the order of CIT(A)-XVI, Ahmedabad dated 28.04.2011 for A.Y. 2008-09. 2. The relevant facts as culled out from the material on record are as under. 3. Assessee is an individual stated to be having income from interest. Assessee filed his return of income for A.Y. 2008-09 on 28.07.2008 declaring total income of .....

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s raised by the Assessee, which have been later modified, reads as under:- 1. The appellant submits the Id CIT(A) has erred in confirming the taxing of the capital gain of ₹ 19,74,272/- u/s 50C of I.T Act by the AO as against the claim of ₹ 1,45,000/- as capital loss by the appellant. 1.1The appellant further submits that the Ld CIT(A) has erred in confirming the order of the AO rejecting the claim of the appellant u/s 50 C (2) of I.T. Act to refer the valuation of the capital asset .....

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A.Y. 1992- 1993 as per section 45(1) r.w.s 2(47)(i) and (v) of I.T. Act and hence the computation of the capital gain at ₹ 19,74,272/- u/s 50 C of I.T. Act by the AO for A.Y. 2008-2009 is illegal and not valid in law. 2. The appellant submits that the Id CIT(A) has erred in confirming the addition of ₹ 3,33,146/- (Rs. 15,85,1 79/- ₹ 12,52,033/-) as unaccounted investment though all credit entries of ICIC1 Bank Account were explained 2.1 The appellant further submits that the I .....

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red in the return of HUF of A.Y 2008-2009. 4. The appellant submits that the Id CIT(A) has erred in confirming the addition of ₹ 8,000/- by the AO as taxable income as against the claim of the appellant that it was agricultural income. 5. The appellant submits that the Id CIT(A) has erred in confirming the interest of ₹ 3,04,632/- charged u/s 234-B by the AO 4. Ground no. 1 and its sub grounds are with relation to denial of claim of capital gains computed by the Assessee. 5. During t .....

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0/-. A.O on perusing the registered sale deed noticed that the Assessee had paid stamp duty of ₹ 1,10,000/- and the Jantry value of the property was ₹ 22,22,222/-. A.O has noted that Assessee had failed to produce any document proving the source of acquisition, mode of acquisition nor had produced any valuation report to prove the basis of working of fair market value as on 01.04.1981 at ₹ 90,000/-. He also noticed that Assessee had not made any attempt to challenge the price d .....

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ant has admitted that the sale deed is dated 14/02/2008. Prior to that the appellant has stated that earnest money of ₹ 50,000 was received and the property was handed over to the purchaser in 1991. No prudent man would hand over such huge property by taking ₹ 50,000/- only when deed value is ₹ 3.5 lac. The appellant has brought no material on record to show as to why the sale deed has been registered on 14/02/2008 after 18 years. Therefore, as per the government account the tr .....

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e is now in appeal before us. 7. Before us, ld. A.R. reiterated the submissions made before A.O and ld. CIT(A) and further submitted that Assessee had entered into deed of agreement to sale the property for which agreement dated 17.05.1991 was entered and as per the agreement, Assessee had received earnest money of ₹ 50,000/-. On receipt of the earnest money, Assessee had handed over the possession and the transfer of the property had thus taken place in A.Y. 92- 93. He therefore submitted .....

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e on 17.05.1991. He further submitted that provisions of Section 50C could not be applied to the sale agreement since Section 50C was introduced after the sale agreement has been entered into by the Assessee. He further submitted that transfer u/s. 2(47) includes any transaction which allows possession to taken/retained in part performance of a contract of the nature referred to Section 53A of the Transfer of Property Act , 1882 and the any transaction entered into in a manner which has the effe .....

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s with respect to computation of capital gain on sale of property. It is a fact that assessee had entered into an agreement for sale in 1990 to sell the property for ₹ 3,50,000/- and pursuant to the agreement Assessee was paid only 50,000/- on 17.05.1993. It is also a fact that the possession of the property was handed over by the Assessee on the receipt of earnest money of ₹ 50,000/-. The agreement for sale and Banakat which has been entered into by the Assessee have been placed on .....

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4.2003 and was therefore not applicable to the year when the Assessee had entered into the Banakat. We further find that Hon ble Bombay High Court in the case of Chaturbhuj Dwarakadas Kapadja vs. CIT (2003) 260 ITR 491 (Bom) has held that the capital gains would be taxable in the year in which the transactions are entered into even if the transfer of immovable property is not effective or complete under the general law. Before us, Revenue has not brought any material on record to controvert the .....

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intained by the Assessee with ICICI Bank, A.O noticed that Assessee had earned interest income of ₹ 88,050/- which was not disclosed by the Assessee in the computation of income. In response to query of A.O., it was submitted by the Assessee that the said bank account belongs to Sudhir Oza (HUF) and was reflected in the income of HUF. The submission of the Assessee was not found acceptable to the A.O for the reason that the bank, in response to notice u/s. 133(6), has stated that the bank .....

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ng interest of ₹ 88,050/-) amount of ₹ 16,73,229/-, as unaccounted investment and added to the income. Aggrieved by the order of A.O, Assessee carried the matter before ld. CIT(A) who decided the issue by holding as under:- 3.3 I have considered the submission made by the appellant and observation of the A.O. The argument of the appellant that the account belongs to HUF is not acceptable for the detailed reasons given by the A.O and which has been quoted above. The bank account is in .....

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rty was held in the individual capacity without any doubt and if is not disputed by the appellant. Therefore this account definitely belongs to the assessee in the individual capacity and not in the capacity of HUF. As regards, the claim of the assessee that the deposit of ₹ 10,49,722/- and ₹ 2,02,31 I/- are explained, as stated above it is seen that these are additional evidences not given to the AO. The AO is therefore directed to verify these documents, and if these documents are .....

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e in his individual capacity. For the reasons discussed about this account has been held to be the account of the assessee in the individual capacity and not in the HUF capacity as claimed. 4.2 During 'the appellate proceeding the appellant has simply stated that the account belongs to HUF and therefore this income should not be added as it has already been shown in the HUF account. As discussed above, this account belongs to the assessee in the individual capacity and not in the HUF capacit .....

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ered as deposits as the same have been transferred from the fixed deposits maintained by the Assessee from earlier years. He also pointed to the copy of the bank statement placed at page 54 to 57 of the paper book. He therefore submitted that the addition made be deleted and in the alternate, he submitted that the A.O be directed to exclude the amount of auto-sweep which has been considered while making the additions. Ld. D.R. on the other hand supported the order of A.O and ld. CIT(A). 12. We h .....

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on of details by the Assessee before A.O, he considered the aggregate of amounts appearing in the credit side of the bank account with ICICI Bank as unexplained investment. Before us, Assessee has placed on record the copy of the bank statement which shows that various amounts have been debited and credited under auto-sweep and revese-sweep . We further find that there is no finding with respect to the auto-sweep and reverse-sweep by both the authorities. We therefore restore the issue back to t .....

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gricultural income. 13. A.O noticed that Assessee has claim to have earned agricultural income of ₹ 8,000/-. The Assessee was asked to substantiate its claim of having earned agricultural income in response to which Assessee furnished copy of 7/12 and Form 8A. The submission of the Assessee was not found acceptable to the A.O for the reason that Assessee had not furnished any other details apart from the copy of 7/12 and 8A and he therefore included the agricultural income of ₹ 8,000 .....

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