TMI Blog2020 (9) TMI 818X X X X Extracts X X X X X X X X Extracts X X X X ..... eleted the addition by observing that this plot was belonging to Shri Mangi Lal Kandoi and the sale proceeds of the same is also added in his end being father of the assessee. The ld. CIT(A) has further held that since the sale of plot has been taxed in the hands of the father of the assessee i.e. Shri Mangi Lal Kandoi, the cost of acquisition should also be considered in the hands of Shri Mangi Lal Kandoi and not in the hands of the assessee. Accordingly, no addition is warranted in the hands of the assessee on account of cost of acquisition. A detailed finding has been recorded by the ld. CIT(A) to this effect in para 11 of his appeal order which has not been controverted by the ld. DR by bringing any positive material on record. Accordingly, we do not find any reason to interfere in the order of the ld. CIT(A) for deleting the said addition. Hence, we uphold the same. - ITA No. 1314/JP/2018 - - - Dated:- 7-9-2020 - Shri Ramesh C Sharma, AM And Shri Vijay Pal Rao, JM For the Assessee : Shri S.L. Poddar (Adv.) For the Revenue : Shri Amrish Bedi (CIT-DR) ORDER PER: R.C. SHARMA, A.M. This is an appeal filed by the revenue against the order of ld.CIT(A)- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the A.O. made addition of ₹ 7.50 lacs on account of scrap trading. By the impugned order, the ld. CIT(A) has deleted the addition after observing as under: 5. I have considered the relevant facts and the argument advanced. I find that during the course of search no material is found which suggests that the appellant was carrying on scrap trading business. The income was declared before the settlement commission only to fulfill the requirement of application for settlement that the income which is not otherwise declared to the Department is declared in the application for settlement so that the case can be admitted by Hon'ble Settlement Commission. The sole basis of addition is the declaration before Hon'ble Settlement Commission which itself has been rejected by the Hon'ble Settlement Commission holding that the applicant has not furnished any information about quantity of scrap sold, parties to which such scrap was sold, or any other evidence incidental to procurement, supply or transportation of such scrap during the period under consideration. Thus the basis of surrender was shrouded in mystery. Though u/s 245 HA(3), the AO shall be entitled to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scrap trading accrued to the appellant, the addition made solely on the basis of application filed before Hon'ble Settlement Commission is not sustainable. Just as the appellant has admitted before Hon'ble Settlement Commission of having earned the income without any basis, the appellant has also denied before AO having earned such income, it was incumbent upon the part of AO to bring on record certain material for making the addition. In absence of any such material and in view of the finding of Hon'ble Settlement Commission as well as denial of appellant having earned income from scrap trading, the addition of ₹7,50,000/- is required to be deleted and is hereby deleted. 4. Now the revenue is in appeal before the ITAT. 5. We have considered the rival contentions and carefully gone through the orders of the authorities below and found that a detailed finding has been recorded by the ld. CIT(A) to the effect that there was no material before the A.O. to suggest that the assessee has income from scrap trading. We also found that while rejecting the assessee s application before the Settlement Commission, the Settlement Commission has observed that there is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and having earned any income therefrom, the addition solely on the basis of declaration before Hon'ble Settlement Commission is not justifiable. I therefore, delete the addition of ₹68,30,220/-. 8. Against the above order of the ld. CIT(A), the revenue is in appeal before the ITAT. 9. We have heard the rival contentions and carefully gone through the orders of the authorities below and found from the record that during the course of regular assessment, the A.O. has not brought on record any evidence to the effect that the assessee has sold any capital asset nor any finding was recorded to the effect that when such asset was acquired to whom it is sold and for what consideration, in absence of any material describing nature of asset, year of acquisition, year of transfer consideration accruing as a result of transfer, the provisions of Section 45 of the Act cannot be applied. A detailed finding has been recorded by the ld. CIT(A) to this effect in para 8 of his appellate order which has not been controverted by the ld. DR by bringing any positive material on record. Accordingly, we do not find any reason to interfere in the findings so recorded by the ld. CIT(A) a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nds of the assessee. The AO also noted that since the amount of ₹ 68,30,220/- on account of capital gain is already added being disclosed to the Hon'ble Settlement Commission, to that extent the source is treated as explained and hence addition of ₹ 88,69,780/- (₹ 1,57,00,000 minus ₹ 68,30,220) was made. The assessee challenges the above addition. 11. By the impugned order, the ld. CIT(A) has deleted the addition made by the A.O. after having the following observation: 11. I have considered the relevant facts and the arguments advanced. There is no dispute to the fact that the on money received of ₹2.43 crores came to be added in the hands of the father of the appellant and not the appellant or other co-owners. The appellant as well as his father have stated that the on money was received by Shri Mangi Lal Kandoi and not the appellant. The affidavits also states that the on money was used by Shri Mangi Lal Kandoi. When the application was filed before Hon'ble Settlement Commission, the appellant has admitted to have earned capital gain on sale of land at Arpit Nagar. At the same time he has claimed deduction u/s 54F on account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... planation towards investment. However since I have already deleted the addition of ₹68,30,220/-. I am required to consider the addition of ₹1.57 crores but since the same is considered as explained out of the receipt of on money of ₹2.43 crores in the hands of Shri Mangi Lal Kandoi, no further addition is required to be made in the hands of the appellant herein. I therefore delete the addition of ₹88,69,780/-. 12. Against which, the revenue is in further appeal before the ITAT. 13. We have considered the rival contentions and carefully gone through the orders of the authorities below and found that the A.O. has made addition of ₹ 88,69,780/- on account of investment in Arpit Nagar plot. By the impugned order, the ld. CIT(A) had deleted the addition by observing that this plot was belonging to Shri Mangi Lal Kandoi and the sale proceeds of the same is also added in his end being father of the assessee. The ld. CIT(A) has further held that since the sale of plot has been taxed in the hands of the father of the assessee i.e. Shri Mangi Lal Kandoi, the cost of acquisition should also be considered in the hands of Shri Mangi Lal Kandoi and not in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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