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2016 (2) TMI 425

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..... assessee without any verification and documentary evidence which is not justified. 2 On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law and facts in directing the AO to consider the LTCG (Long Term Capital Gains) of Rs. 11,75,813/-, which was claimed as exempt u/s 10(38) furnish sustainable documentary evidence in respect of these investments inspite of sufficient opportunities allowed to assessee during assessment as well as remand proceedings. 3 On the facts and in the circumstances of the case, ld. CIT(A) has erred in law and facts in deleting the addition of Rs. 6,40,000/- out of Rs. 15,50,000/- made by AO by treating the agricultural income as income from undisclosed sources as assessee failed to furnish sustainable documentary evidence in respect of the agricultural income during assessment proceedings; the Ld. CIT(A) accepted the plea of the assessee without any verification and documentary evidence which is not justified." 3. The grounds of appeal taken by the assessee in ITA No. 4312/D/2012 are as under :- "1 That order of assessment u/s 143(3) of the Act 29.12.2011 is without jurisdiction since the learned Joint Commissioner of Incom .....

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..... at Nil as against total expenditure of Rs. 2,00,000/- on repair of the house. 4 That the learned Commissioner of Income Tax (Appeals) has further erred both in law and on facts in not allowing the claim of exemption of Rs. 39,15,450/- u/s 54B of the Act. 4.1 That the finding of the learned Commissioner of Income Tax (Appeals) that "no evidence has been led that agriculture operations were being carried out on the said land" is contrary to facts and evidence on record and has been arrived without granting any opportunity and therefore, unsustainable. 5 That the learned Commissioner of Income Tax (appeals) has erred both in law and on facts in upholding an addition of Rs. 9,10,000/- out of aggregate addition made of Rs. 15,50,000/- representing agricultural income earned by the appellant in the year under consideration. 6 That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in upholding the levy of interest u/s 234B of Rs. 30,56,108/- which is not leviable at all on the facts of the instant case. It is therefore prayed that, it be held that, assessment framed is without jurisdiction and, various additions sustained by the learned Commissio .....

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..... ool of 90 lacs liters was also constructed by the appellant which was duly connected with road and pavements. The appellant furnished photocopies of the said property in support of the claim of cost of land incurred for development of the property apart from a valuation report. The assessee filed copy of bank statement in support of the claim of construction. A remand report was obtained from the Assessing Officer. On consideration of the above, CIT(A) allowed the claim of the appellant except to the extent of Rs. 47,55,000/- and as such, both assessee and revenue are in appeal. 10. During the course of hearing, the learned counsel for the assessee submitted that since during the course of assessment proceedings, the Assessing Officer had directed the assessee to furnish only details of assets for the year under consideration there was no justification to deny deduction on account of cost incurred in earlier years which were otherwise supported by statement of affairs placed on record along with returns of income for earlier years and thus, denial of investment in earlier years was wholly untenable. So far as the additions made in the instant year, it was submitted that complete b .....

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..... by holding vis-à-vis agricultural land as under: "The agriculture land was purchased in the FY 2004-05 for a consideration of Rs. 21,05,000/-. Thereafter, improvements/ additions to the agriculture land by way of earth filling, barbed wire fencing, construction of water harvesting pool, construction of huge residential house etc. were claimed to have been made during the FY 2005-06, 2006-07, 2007-08 & 2008-09 by investing Rs. 30,00,000/-, Rs. 33,95,000/-, Rs. 53,20,000/- and Rs. 1,23,50,000/- respectively. The investment in the FY 2005-06 has been shown in the balance sheet filed along with return of income and the assessment was complied u/s 143(3) accepting the income returned. The investment in the FY 2006-07 & 2007-08 have been duly reflected in the statement of affairs as on 31.03.3007 & 31.03.2008 filed along with the return of income. These returns of income have been processed u/s 143(1). The declaration in the statement of affairs filed along with return of income regarding the addition/ improvements made in the agriculture land indicates that the assessee has in fact invested these amounts toward the additions to the agriculture land." 14. So far as the cost of R .....

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..... house on the bare agriculture land purchased during FY 2004-05, he would not have been able to sell the farm house by a separate sale deed for a consideration of Rs. 1,05,79,000/-. However, it is seen from the above account that the assessee has claimed payment of Rs. 45,55,000/- even after 14.07.2008 to various concerns towards addition to the farm house, which is not tenable. The addition to the farm house made during the year is therefore restricted to Rs. 77,95,000/-. In view of the above, the action of the AO in taking the addition to the agriculture land at Nil discarding the evidences available on record is unjustified." 17. From the aforesaid, it is apparent that the expenditure claimed is evident from the bank account maintained by the assessee which fact has not been proved or established by leading any material to be incorrect of erroneous. It is also not established how sums withdrawn from the bank have been utilized for any other purpose other than claimed by the appellant towards land or construction of the farm house. Even otherwise, it is also noticed that assessee had purchased a plot of land for consideration of Rs. 21,05,000/- on 2710.200 which was sold at aggr .....

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..... e issue and the submissions made by the AR. The AO asked the assessee to furnish the details to LTCG & STCL on shares along with evidences for the first time on 7.12.2011. in response to this requirement, the assessee vide letter dated 19.12.2011 furnished the details along with copies of D-mat a/c, transaction statements with share brokers and payment of STT along with revised computation statements, which has been confirmed in the remand report of the AO. However, the AO in the assessment order has stated that no details were furnished and therefore made the impugned addition. As submitted by the AR, the evidences furnished are computer generated statements which can be taken as admissible evidence. However, if the AO had any doubt, he should have made necessary enquiries to ascertain the authenticity of the documents filed by the assessee. The transaction statements of the share broker indicate the name of the assessee and to this extent the observation of the AO in the remand report that the name of the assessee has not been mentioned in the documents is incorrect. Since there is no dispute regarding payment of STT, the assessee is eligible for exemption of LTCG u/s 10 (38) of .....

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..... R that the agricultural income shown by the assessee of Rs. 18,902/- per acre is reasonable considering that I have upheld agricultural income of Rs. 26,000/- per acre by the above mentioned appeal order is misplaced and unacceptable as agricultural income depends on various factors like fertility of land, availability of water etc. Since the assessee himself has shown agricultural income of Rs. 3,14,513/- in the AY 2007-08, I would deem it reasonable to adopt Rs. 3,20,000/- as agricultural income for the AY 2008-09 & 2009-10. Since no agricultural income was declared in the AY 2008-09 on the ground that the agricultural income for both the years, which has been declared in the year under consideration, could be taken as Rs. 6,40,000/-. The addition to the tune of Rs. 9,10,000/- therefore is sustained and the grounds of appeal are partly allowed." 22. Having regard to the rival submissions and material placed on record, it is undisputed that the appellant has not produced documentary evidence in support of agricultural income declared by the appellant. It is further not disputed that the appellant is owner of agricultural land in the instant year. Further, it is also not disputed .....

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