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of <h1>Appellate Tribunal allows taxpayer's appeals, overturning tax additions due to lack of evidence and incorrect application.</h1> <h3>Smt. Jiya Devi Sharma Versus The ACIT, Central Circle – 2, Jodhpur</h3> Smt. Jiya Devi Sharma Versus The ACIT, Central Circle – 2, Jodhpur - TMI Issues Involved:1. Disposal of two appeals of the same assessee arising from separate orders of ld. CIT(A)-I, Jaipur, for A.Ys. 2008-09 and 2009-10.2. Addition of Rs. 21,14,745/- out of land development expenses.3. Invalidity of addition of Rs. 1,26,000/- made for unexplained investment in the purchase of a residential plot.4. Addition of Rs. 4,80,000/- for alleged violation of section 40A(3) of the Act for the purchase of agricultural land.5. Telescoping effect against sustained additions.Analysis:1. Disposal of Appeals:The Appellate Tribunal ITAT JODHPUR disposed of two appeals of the same assessee arising from separate orders of ld. CIT(A)-I, Jaipur, for A.Ys. 2008-09 and 2009-10 by a common order for the sake of brevity and convenience.2. Addition of Rs. 21,14,745/- out of Land Development Expenses:The AO disallowed 50% of the claimed land development expenses resulting in an addition of Rs. 21,14,745. The assessee contended that the expenses were genuine and fully evident from the regular books of account. The Tribunal noted that the expenditure had been claimed in the original return and was rightly allowed, with no specific objection raised by the AO. Consequently, the addition was deleted.3. Invalidity of Addition of Rs. 1,26,000/- for Unexplained Investment:The AO made an addition of Rs. 1,26,000 out of Rs. 3,56,250 for alleged unexplained investment in the purchase of a residential plot. The Tribunal found that only Rs. 1,26,000 was proved to be incurred as an investment, and the rest lacked evidence. The investment was claimed to be from past savings, but without proof, leading to the dismissal of this ground.4. Addition of Rs. 4,80,000/- for Violation of Section 40A(3):The AO disallowed Rs. 4,80,000 for the purchase of agricultural land citing a violation of section 40A(3) due to cash payments exceeding Rs. 20,000. The Tribunal held that agricultural land cannot be converted to stock in trade until certain conditions are met, and the provisions of section 40A(3) do not apply to such transactions. Consequently, the addition was deleted.5. Telescoping Effect Against Sustained Additions:The Tribunal allowed telescoping effect against sustained additions, ensuring that the source of unexplained investment is considered. This led to the allowance of Ground No. 5 of the appeal.In conclusion, both appeals were partly allowed by the Tribunal, addressing the issues raised by the assessee regarding various additions made by the AO. The judgments provided detailed reasoning for the disposal of each issue, ensuring a fair and comprehensive assessment of the legal matters at hand.
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