TMI Blog2016 (6) TMI 795X X X X Extracts X X X X X X X X Extracts X X X X ..... suspicion without considering the construction expenditure incurred towards labour, materials on day-to-day basis being highly unorganised sector. The observations of the Assessing Officer that the money has been used for some other purpose and investment are made in the construction of the residential property is from undisclosed source which are different from the Tamilnadu Mercantile Bank Ltd. are without any basis or evidence. But on a perusal of the bank account produced in hearing proceedings, we found that cheques were also issued in the name of the persons, and there is no clarity on issue whether the said sum was utilised for the construction of residential building. Therefore, we are of the opinion that the matter has to be re-examined by the Assessing Officer in the above context. Unexplained investment in respect of land - family arrangements - Held that:- Assessing Officer on suspicion treated the difference of ₹ 21,53,000 as unexplained income without any evidence or statement recorded from the assessee's mother or sister. The learned Assessing Officer has relied on the sworn statement of the assessee and the daughter and made elaborate findings in his order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7; 80,36,000 in Tamil Nadu Mercantile Bank Ltd. between December 6, 2010, to March 19, 2011, and demand draft of ₹ 39,00,000 was credited in the bank account and aggregate deposits worked out to ₹ 1,19,35,000. The learned authorised representative explained the sources for the deposits along with evidence on various dates and submitted that the assessee inherited from his late father along with his mother, four brothers and sister 8.6 acres of agricultural lands at Paruthipattu Village in Avadi and the land was sold for consideration of ₹ 5,34,10,000. The assessee purchased a residential plot at Mangadu and constructed a house in the name of his unmarried daughter out of the net sale consideration and claimed exemption under section 54F of the Act. In continuation to the explanation, the assessee clarified that one of the co- owners being sister was given dowry and other financial assistance by the late father during her marriage and set apart 50 cents of land for the daughter and was sold for ₹ 35,00,000 and the mother of the assessee is also a co-owner who co-operated in sale of land was provided with fixed deposit of ₹ 10,00,000 and after adjusting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ejected the claim of exemption under section 54F of the Act. The learned Assessing Officer on a perusal of the bank account found that the assessee has withdrawn the amounts and paid for purchase of land during the period from December 8, 2010, to January 4, 2011. The Assessing Officer alleged that within a span of 28 days, the assessee has totally withdrawn the sale consideration from bank account and is not disputed. The land was purchased in the name of the daughter, Selvi D. Devakrubai, and withdrawals were utilised for construction of seven flats after obtaining permission from the local authorities. The learned Assessing Officer verified documentary evidence, sale deed and relied on the statement recorded in respect of sale consideration and purchase of the property on suspicion and surmises presumed that the entire sale consideration was credited to the bank account and withdrawn and utilised for the purpose other than acquiring the asset and treated the entire sale consideration spent for acquiring a new asset as undisclosed investment of ₹ 97,82,000. The learned Assessing Officer made an addition for difference in sale consideration after recording of sworn statement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsidered the findings of the Assessing Officer, observations and written submissions in the hearing proceedings and concluded as no fresh evidence or submissions are filed in the appellate proceedings and confirmed the additions. Aggrieved by the order of the Commissioner of Income-tax (Appeals), the assessee assailed an appeal before the Tribunal. 5. Before us, the learned authorised representative reiterated the submissions of the assessment and the appellate proceedings and argued that the assessee was denied exemption under section 54F of the Act and he being a retired employee inherited agricultural land at Paruthipattu adjoining Avadi Municipality as per the will executed by the assessee's father late Dharmaraj Nadar dated January 19, 2001. The agricultural land inherited by the wife of the deceased (mother of the assessee) five sons, sister and mother of the assessee was entitled to life interest till her demise. As per the family arrangement, ₹ 10,00,000 was paid for fixed deposit in the name of the mother and ₹ 35,00,000 share of the sister. The property was sold to M/s. Ten Win Properties (P.) Ltd. for a consideration of ₹ 5,34,10,000 and after s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... undisclosed investment without any evidence. 6. The learned Assessing Officer further made an addition of ₹ 21,53,000 as unexplained income. The assessee inherited the property as the legal heir along with his brothers, sister and mother. The mother and sister co-operated in selling the property and as per the internal family arrangement the sister is paid ₹ 35,00,000 and ₹ 10,00,000 was paid to the mother as charge was created as per the will of the late Dharmaraj Nadar. At the time of transaction of sale, instalment of the sister was paid and was out station and mother was living with the assessee. Therefore, the amount of ₹ 10,00,000 paid to the assessee's mother was deposited in the assessee's account and similarly ₹ 11,53,000 instalment of sister share was also deposited in the bank account. The Assessing Officer recorded the statement and has overlooked the charge created by the deceased father on the property in favour of the mother and sister and treated the amount as undisclosed income in the hands of the assessee without considering the will deed. The learned authorised representative submitted a paper book containing various docu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to December 15, 2010, and the assessee has withdrawn the total consideration during the period from December 21, 2010, to January 4, 2011. It is clearly evident from the action of the assessee that money was withdrawn and utilised for purchase of land in the name of daughter on January 21, 2011, before the end of the previous year and commenced construction of residential flats. The findings of the Assessing Officer based on suspicion without considering the construction expenditure incurred towards labour, materials on day-to-day basis being highly unorganised sector. The observations of the Assessing Officer that the money has been used for some other purpose and investment are made in the construction of the residential property is from undisclosed source which are different from the Tamilnadu Mercantile Bank Ltd. are without any basis or evidence. But on a perusal of the bank account produced in hearing proceedings, we found that cheques were also issued in the name of the persons, and there is no clarity on issue whether the said sum was utilised for the construction of residential building. Therefore, we are of the opinion that the matter has to be re-examined by the Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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