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2016 (2) TMI 425 - ITAT DELHI

2016 (2) TMI 425 - ITAT DELHI - TMI - Addition on account of long term capital gain on sale of 2 residential houses and agricultural land - Held that:- Both the sale deeds have been placed in the paper book. It is further seen that the sale deed dated 14.7.2008 was specifically in respect of sale of farms house including rain water harvesting systems in the instant year. The appellant has also furnished a valuation report dated 1.7.2008 valuing the cost incurred for development work in land/farm .....

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₹ 1,23,50,000/- be allowed while computing long term capital gain on sale of the agricultural land/farm house by the appellant.

Sum incurred towards repayment of the house sold in the instant year - CIT(A) holding denial of deduction has held that no evidence has been brought on record regarding investment of the said land and therefore, claim of deduction to this extent is disallowed - Held that:- The appellant in the course of hearing has only referred to statement of affairs .....

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ected.

Addition representing agricultural income declared by the appellant and held to be income from undisclosed sources - Held that:- 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 that in the preceding assessment years, agricultural income had been declared of ₹ .....

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ty was given either by the Assessing Officer or CIT(A) to furnish such relevant evidence and therefore, prayed that the issue may kindly be set aside to the file of the Assessing Officer for re-adjudication. The learned DR did not fairly object to such a prayer made by the appellant, we therefore, feel it appropriate that the issue be restored to the file of Assessing Officer for reconsideration in accordance with law. Needless to state that the appellant would be entitled to lead all such evide .....

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ance of the assessee and revenue, are directed against the order of the Commissioner of Income-tax (Appeals), Rohtak dated 28.05.2012 and relate to assessment year 2009- 10. 2. The grounds raised in appeal filed by revenue in ITA No.4216/D/2012 are as under :- 1 On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law and facts in deleting the addition of ₹ 2,34,00,993/- out of ₹ 2,81,55,993/- made by AO under head Capital Gains as the assessee failed to fil .....

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8) 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 ₹ 6,40,000/- out of ₹ 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 respec .....

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ions of section 120(4)(b) read with section 2(7A) of the Act to exercise the powers or perform the functions of Assessing officer and as such, order of assessment is illegal, invalid and, be quashed as such. 1.1 Without prejudice to the above, even if it is assumed (not admitted) for the same of an argument that the learned Joint Commissioner of Income Tax was empowered under section 124(4)(b) read with section 2(7A) of the Act, then too, order of assessment is without jurisdiction in absence of .....

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190/-. 2.1 That while determining the long term capital gain at ₹ 1,91,54,584/- the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in restricting the cost of improvement/construction on agricultural land in the financial year 2008-09 at ₹ 77,95,000/- as against total expenditure of ₹ 1,05,79,000/- on erroneous consideration that expenditure incurred after sale deed is not an eligible expenditure. 2.2 That the learned Commissioner of Income Tax ( .....

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gainst declared long term capital gain of ₹ 23,22,188/-. 3.1 That while determining the long term capital gain at ₹ 25,22,188/- the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in restricting the cost of improvement/construction on residential house in the financial year 2008-09 at Nil as against total expenditure of ₹ 2,00,000/- on repair of the house. 4 That the learned Commissioner of Income Tax (Appeals) has further erred both in law and o .....

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tion of ₹ 9,10,000/- out of aggregate addition made of ₹ 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 ₹ 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 addition .....

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d by the appellant company. 6. From the perusal on the facts on record, it is noticed that the appellant filed return of income declaring capital gain on sale of land and 2 houses at ₹ 1,68,44,084/- in the manner as under: 7. The Assessing Officer however determined long term capital gain on sale of the house and agricultural land at ₹ 4,44,07,059/- in the following manner: 8. The CIT(A) noticed that the reason which led the Assessing Officer to compute long term capital gain at S .....

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500/- 30,00,000/- 33,95,000/- 53,20,000/- 1,23,50,000/- 2006-07 2007-08 2008-09 2009-10 9. Before the CIT(A), the appellant contended that the additions to the assets sold have duly been reflected in the statement of affairs as on 31.03.2007, 31.3.2008 and 31.3.2009 filed before the Assessing Officer. It was submitted that the Assessing Officer while calculating the long term capital gain has denied cost of additions made in the construction/development of the assets which were duly shown in the .....

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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 ₹ 47,55,000/- and as such, both assessee and revenue are in appeal. .....

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er years was wholly untenable. So far as the additions made in the instant year, it was submitted that complete bank statements were furnished as would be seen from the replies to the Assessing Officer dated 15.11.2011 and 19.12.2011 and placed in the Paper Book. A chart tabulating the claim made vis-à-vis each of the three properties sold in the instant year was furnished and is extracted hereunder: 11. The learned DR contended that the Assessing Officer was justified in making the above .....

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aimed by the appellant company. 12. We have considered rival submissions and perused the material on record. It is noticed that during the instant year, the appellant sold house no. 1392, Sector-6, Bahadurgarh and in respect of such an asset, claimed expenditure incurred on development of land of ₹ 16,50,000/- in assessment year 2004-05. Further during the instant year, the appellant had also sold an agricultural land measuring 46 kanal alongwith farm house at Gurgaon against which it clai .....

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ssment year which too had been denied by the Assessing Officer. Thus appellant claimed cost of ₹ 16,50,000/- incurred in assessment year 2004-05 in respect of house no. 1392, Sector-6, Bahadurgarh and cost of ₹ 33,00,000/-, 33,95,000/- and ₹ 53,20,000/- incurred in the assessment years 2006-07 to 2008-09 towards agricultural land sold alongwith farm house at Gurgaon in the instant year. So far as the cost incurred in the preceding assessment years is concerned, the CIT(A) has a .....

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8377; 53,20,000/- and ₹ 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 .....

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ubmissions, we find that so far as cost incurred in preceding assessment years is concerned, it is not denied that such cost was duly reflected in the statement of affairs furnished along with return of income for each of the preceding assessment years. These returns of income as filed by the assessee have acquired finality. Neither action under section 147 or section 263 of the Act has been taken by the revenue to disturb such a return. In such circumstances, we are in agreement with the conclu .....

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was incurred for construction of the farm house and development of the agricultural land. The break-up of the said expenditure has been noted by the CIT(A) as under: During the year under consideration i.e. FY. 2008-09, an amount of ₹ 1,23,50,000/- was claimed to have been spent towards additions to agriculture land. The AR has furnished account of additions made during the year as under:- 16. The CIT(A) has allowed the aforesaid expenditure claimed to the extent of ₹ 77,95,000/- and .....

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agriculture land for a consideration of ₹ 3,18,63,000/- vide sale deed dated 5.11.2008. Had the assessee not made any investment for the construction of farms 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 ₹ 1,05,79,000/-. However, it is seen from the above account that the assessee has claimed payment of ₹ 45,55,000/- even after 14.07.2008 to various concerns tow .....

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y 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 ₹ 21,05,000/- on 2710.200 which was sold at aggregate consideration of ₹ 4,24,42,500/- by way of two sale deeds dated 14.07.200 and 05.11.2008. Both the sale deeds .....

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n such circumstances, we feel that the CIT(A) was not justified to restrict deduction to the extent of ₹ 77.95 lacs out of the total sum of ₹ 1,23,50,000/- on the ground that sum was paid after 14.7.2005 which was the date of sale deed of the farm house. Thus in our considered opinion the entire cost of deduction of ₹ 1,23,50,000/- be allowed while computing long term capital gain on sale of the agricultural land/farm house by the appellant. 18. The only sum now remains is of & .....

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low the claim of deduction towards cost of acquisition of the property. There is nothing to support that any expenditure was incurred towards cost of development of house at plot no. 1402, Sector-6, Bahadurgarh in the instant year. Having regard to above, we feel that action of the CIT(A) is in order and claim of the appellant is therefore, rejected. In the result, the grounds raised by the appellant are partly allowed and ground raised by the revenue is rejected. 19. Ground 2 raised by revenue .....

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is 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 .....

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10 (38) of the Act. The AO is directed to consider the LTCG of ₹ 11,75,813/-, which has been claimed as exempt u/s 10(38), and the STCL of ₹ 3,09,715/- as declared in the revised computation, an allow the claim after verification. Accordingly, the ground of appeal are treated as allowed. 20. It is noticed from the above that the CIT(A) has restored the issue to the file of the Assessing Officer to allow claim after verification of the evidences furnished by the appellant. In such cir .....

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ut since the appellant had not furnished any bills and vouchers in respect of sale of agricultural produce and in respect of expenses incurred on agricultural operations therefore the same is added as income from undisclosed sources. He noted that appellant was owner of 41 acres of land and details of ownership have been filed before the Assessing Officer. It was contended by the appellant before CIT(A) that agricultural land produced and sold was for 2 years non production of sale bills alone c .....

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nership of agriculture land by the assessee is not in doubt. The assessee has declared agricultural income of ₹ 3,14,513/- in the AY 2007-08. No agricultural income was shown in the AY 2008-09. Agricultural income for both the years was declared in the year under consideration at ₹ 15,50,000/-. The claim of agricultural income cannot be denied merely because Form-J was not furnished by the assessee. The contention of the AR that the agricultural income shown by the assessee of ₹ .....

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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 ₹ 6,40,000/-. The addition to the tune of ₹ 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 .....

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aim is excessive. In view of the above position, we uphold order of the CIT(A) and reject the grounds raised both by assessee and revenue. 23. Ground 4 raised by assessee relates to denial of exemption of ₹ 39,15,450/- under section 54B of the Act. The CIT(A) vis-à-vis the said claim has held as under: 9.1 I have considered the contention raised by the AR. The benefit of section 54B is only available in case of sale of agriculture land on which agriculture operations were carried ou .....

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