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TMI Blog2023 (5) TMI 736X X X X Extracts X X X X X X X X Extracts X X X X ..... ake of brevity, we reproduce the grounds raised in ITA No. 822/Del/2018 : (1) Whether Ld. CIT(A) is erred in law and on facts in allowing the claim of the assessee that the case does not fall under section 68 of the I.T.Act,1961 whereas the addition of Rs. 1,82,90,000/- was made as undisclosed income received on sale of land. (2) Whether Ld. CIT(A) is erred in law and on facts in allowing the claim of the assessee of filing revised return after getting final show cause incorporating the undisclosed income to the extent of Rs. 62,60,000/- and claiming the same as exempt. (3) Whether Ld. CIT(A) is erred in law and on facts in holding that the addition was made on estimates only whereas sufficient evidences, statement of the employee dea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oth the assessment years under dispute, by enhancing the sale consideration received on sale of land for Rs.1,36,20,000/- and Rs.3,18,31,000/- for the assessment years 2013-14 and 2014-15, respectively. In course of assessment proceedings, Assessing Officer, referring to statement recorded u/s. 132(4) of the Act from the assessee and a valuation report of 2004 , called upon him to explain why the on- money received in cash on sale of land should not be treated as his undisclosed income. In response to the show cause notice issued, the assessee submitted that the valuation report found at the time of search and seizure operation, showing the value of land in 2004 at higher rate cannot be relied upon as said valuation report was obtained for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . He further held that even assuming that the assessee had received on-money in cash on sale of land, however, since the land sold is agricultural land, hence, is not capital asset in terms of section 2(14)(iii) of the Act, the capital gain derived from sale of land is fully exempt from taxation. Therefore, on-money received will also partake the character of long-term capital gains derived from sale of agricultural land, which is not capital asset, hence, will not be taxable. Finally, he held that the addition is not based on any incriminating material found as a result of search and seizure operation. Therefore, the assessment not being a abated assessment, addition could not have been made in absence of any incriminating material. 6. Be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t as defined u/s. 2(14)(iii) of the Act, any income arising out of sale of such land - whether as declared sale consideration or alleged on-money, would partake the same character, hence, would be exempt from taxation. For such proposition, ld. Counsel relied upon the following decisions : (i). DCIT vs. Sh. Tarun Lamba (ITA No. 5079/Del/2012-order dated 15.06.2017 - ITAT, New Delhi) (ii) ITO vs. Shri P.V. Abraham (ITA No. 508/Coch/2018 - order dated 06.02.2019 - ITAT Cochin Bench) (iii). ITO vs. Shri Abraham Varghese Charuvil (ITA No. 30/Coch/2017 - order dated 26.04.2017 - ITAT Cochin Bench) (iv). ITO vs. Dr. Koshy George (2010) 190 Taxman 4 (Cochin)(MAG) 8. We have considered rival submissions and perused the materials on record. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act, the assessee has offered the amount received from sale of land. This, in our view, cannot be a finding which is sustainable either on facts or in law. Firstly, Assessing Officer has not controverted the nature and character of land sold. Once, nature and character of land sold is established as agricultural land not to be treated as capital asset u/s. 2(14)(iii) of the Act, any income arising out of sale of such land - whether by way of declared sale consideration or on account of on-money, would partake the character of exempt income, as the source of both the declared sale consideration and the on-money received is the same, viz., sale of agricultural land. That being the factual position, the income derived from sale of agri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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