2008 (12) TMI 434 - AT - Income Tax

Appeal allowed with addition under Income-tax Act. Stamp duty disallowance deleted. Creditor's credibility established.

The appeal was allowed, with the addition of Rs. 18,38,133 under section 68 of the Income-tax Act, 1961, and the disallowance of stamp duty in computing ... Cash credits Issues Involved:1. Addition of Rs. 18,38,133 u/s 68 of the Income-tax Act, 1961.2. Disallowance of stamp duty in computing capital gains.Summary:Issue 1: Addition of Rs. 18,38,133 u/s 68 of the Income-tax Act, 1961The assessee contested the addition of Rs. 18,38,133 made by the Assessing Officer (AO) u/s 68 of the Income-tax Act, 1961, which was confirmed by the CIT(A). The AO had added this amount as unexplained cash credit, representing receipts from one A.S. Patil, who was not traceable. The assessee argued that the amount was received from Patil for cultivating asparagus on his land, and despite efforts, Patil did not appear before the AO to confirm the transactions. The AO assessed the receipts as unexplained cash credit due to lack of satisfactory evidence and the non-appearance of Patil. The Tribunal, after examining the records and the affidavit filed by Patil, concluded that the assessee had established the identity of the creditor, genuineness of the transaction, and creditworthiness of the creditor. The Tribunal noted that the assessee had land holdings and was engaged in agricultural operations, corroborated by various documents and reports. Consequently, the addition made by the AO was deleted.Issue 2: Disallowance of stamp duty in computing capital gainsThe assessee challenged the disallowance of stamp duty in computing capital gains. The Tribunal held that stamp duty spent by the purchaser should be added to the cost of the land. Therefore, the disallowance made by the AO was deleted.Conclusion:The appeal filed by the assessee was allowed, with the addition of Rs. 18,38,133 u/s 68 and the disallowance of stamp duty in computing capital gains being deleted.