2015 (10) TMI 2119 - AT - Income Tax

Tribunal affirms CIT(A) decisions on property sale value and cash deposits, upholds capital gain and income addition.

Mr. Maninder Singh Bedi Versus A.C.I.T., Central Circle-11, Delhi

The Tribunal upheld the CIT(A)'s decisions on both issues, dismissing the appeal. The selling cost of the property was enhanced based on a higher sale ... Power of CIT(A) to enhance the assessment u/s. 251(2) - enhancement in the sale consideration for the computation of capital gain - Held that:- CIT(A) issued notice u/s. 251(2) regarding enhancement in the sale consideration for the computation of capital gain is based on the sale of another floor of the same property, i.e., second floor. The assessee has placed no material on record to substantiate the sale proceeds of basement declared by it and consequential capital loss. The value of property declared by the assessee is based on circle rate. The assessee also failed to substantiate its stand by any cogent evidence on record that the area in which the property was located, was a flooded area. No certificate or evidence from Municipal Corporation is available on record to justify stand of the assessee and the value declared by him. On the other hand, the ld. CIT(A) keeping in view the sale value of second floor of same property and ratio of utility between basement and second floor of the property, appears to have given reasonable rebate while determining the sale value of basement at ₹ 1,58,25,000/- and after deducting indexed cost of property of ₹ 27,32,360/- worked out the capital gains at ₹ 1,30,92,640/- as against ₹ 19,09,720/- computed by the Assessing Officer. Accordingly, we find no justification to disturb the enhancement made by the ld. CIT(A) of ₹ 1,20,82,920/- to the total income of the assessee. Decided against the assessee. Addition on cash deposit in the bank account of the assessee - Held that:- We find that the assessee has submitted cash deposit and withdrawals statement which shows that the assessee has shown to have withdrawn the cash by issuing cheques, but it is not clear from the statements that the amounts deposited by the assessee on various dates was the same as withdrawn. The assessee also could not unveil the purpose for which the cash was withdrawn and then the same was deposited with the same bank. We, therefore, find no justification to interfere with the finding of the ld. CIT(A) that it is absurd to believe that somebody will withdraw cash from the bank, keep it idle with him and then deposit the same in the bank, particularly when no purpose for withdrawal was declared by the assessee before the authorities below. - Decided against the assessee. Issues:1. Enhancement of selling cost of property.2. Addition on account of cash deposits in the bank.Issue 1: Enhancement of selling cost of property:The appeal was filed against the order passed by the CIT(A) for the assessment year 2005-06. The assessee claimed a long-term capital loss on the sale of a property, which was received as a gift and family settlement. The property was sold for &8377; 11,00,000, but the CIT(A) issued a notice for enhancing the selling cost to &8377; 1,58,25,000. The CIT(A) based this enhancement on the sale of another floor of the same property for a higher value. The assessee contended that the valuation of the property was based on circle rates prevailing at the time and that the basement's value was negligible due to flooding. However, the CIT(A) found no evidence to support the assessee's claims and upheld the enhancement, resulting in a capital gain addition of &8377; 1,20,82,920. The Tribunal agreed with the CIT(A) and dismissed the appeal, stating that the enhancement was justified.Issue 2: Addition on account of cash deposits in the bank:During assessment, the AO found cash deposits of &8377; 3,10,000 in the assessee's bank account without a proper explanation. The AO added this amount to the total income of the assessee. The CIT(A) confirmed this addition, noting that the assessee failed to clarify the purpose of withdrawing and redepositing the cash. The Tribunal upheld the CIT(A)'s decision, stating that it was unreasonable to believe that cash would be withdrawn from a bank account only to be redeposited without a declared purpose. Consequently, the addition on account of cash deposits was deemed valid, and the appeal was dismissed.In conclusion, the Tribunal upheld the CIT(A)'s decisions on both issues, resulting in the dismissal of the assessee's appeal.