2023 (1) TMI 320 - AT - Income Tax

Tribunal dismisses appeal on tax exemptions & unexplained cash deposits. Upholds addition of cash deposits.

The appeal was dismissed by the Tribunal as it found no merit in the grounds raised by the appellant, particularly regarding denial of exemptions under ... Denial of claim for exemption u/s 54B - sale consideration received on sale of agricultural land was invested in purchase of agricultural lands in the name of son and daughter-in-law - HELD THAT:- Appellant is not entitled for deduction in respect of section 54B - Following the above decisions, this Tribunal in the case of Vandana Maruti Pathare [2022 (3) TMI 775 - ITAT PUNE] held that the deduction u/s 54B cannot be allowed in case where there was no purchase of the land/property in the name of the assessee. The submissions made by Counsel that since income arisen out of the agricultural lands were assessable in the hands of the appellant by virtue of clubbing provisions, therefore, the exemption should be allowed u/s 54B, cannot be accepted for the reason that deeming provisions cannot be extended beyond the purpose for which they have been enacted. Provision under the provisions of Benami Act, such transactions are permissible as no relevance in deciding the issue of allowability of deduction u/s 54B, as it is settled position of law that the exemption provisions should the construed strictly. Thus, we do not find any merit in the submissions made by the appellant for claiming deduction u/s 54B. Deduction u/s 54F - appellant had not adduced any evidence in support of the construction of residential property except making a bald submission - HELD THAT:- Further from the submission made by the appellant, it is clear that entire money was spent on the construction subsequent to the date of filing of the return of income and the assessee had not deposited unutilized portion of the consideration in capital gain scheme as provided under the provisions of section 54F - Thus, the submissions made by the assessee are not supported by any evidence and devoid of any merits. In the circumstances, we do not find any merit in the ground of appeal no.2 filed by the assessee. Hence, ground of appeal no.2 stands dismissed. Addition of cash deposits in bank account - HELD THAT:- In the present case, on mere perusal of the assessment order, it would suggest that the appellant had failed to offer any explanation whatsoever before the AO. It was only during the course of proceedings before the CIT(A), the appellant took a plea that the cash deposits was made on past savings without leading necessary evidence on record in support of such contention. The same came to be rejected by the CIT(A). Even during the course of hearing of appeal before us, AR took a plea for the first time that the said cash deposits were made out of sale consideration received on sale of land over and above the apparent consideration mentioned in the sale deed. However, the ld. AR had not adduced any evidence in support of this submission except making ipse dixit submissions. It must be mentioned that it is settled position of law that the consideration stated in the sale deed executed and registered is conclusive, unless and otherwise there is a material on record showing consideration was paid over and above stated consideration, as held in the case of K.P. Varghese [1981 (9) TMI 1 - SUPREME COURT] and Shivakami Co. (P.) Ltd[1986 (3) TMI 2 - SUPREME COURT] and also in view of the provisions of Registration Act. Thus, the explanation offered before us during the course of hearing of appeal is not tenable in the eyes of law as it is a mere bald submission without bringing any material on record in support of submission. As regards to the other contentions of the appellant that the AO without discharging the onus of proving the source from which the investments and cash deposits were made, had chosen to make addition. This submission is contrary to the well settled position of law that no burden lies on the Revenue to show the income is received from any particulars source before invoking the provisions of section 68/69 as held in the case of Roshan Di Hatti [1977 (3) TMI 3 - SUPREME COURT], M. Ganapathi Mudaliar [1964 (4) TMI 22 - SUPREME COURT] and A. Govindarajulu Mudaliar [1958 (9) TMI 3 - SUPREME COURT]. In view of the well settled position of law, the contentions urged by the ld. AR is devoid of any merit and the ground of appeal no.3 is highly misconceived. Issues Involved:1. Condonation of delay in filing the appeal.2. Assessment of long-term capital gains in the hands of the appellant.3. Denial of exemption under Section 54B of the Income Tax Act, 1961.4. Fair market value consideration as of 1.4.1981.5. Explanation for cash deposits in the bank account.Issue-wise Analysis:1. Condonation of Delay in Filing the Appeal:The appellant filed an affidavit explaining a 58-day delay due to the appellant residing in Ahmednagar and needing time to identify a counsel to file the appeal. The Revenue had no serious objection to condoning the delay. The Tribunal found it fit to condone the delay and admitted the appeal for adjudication.2. Assessment of Long-Term Capital Gains in the Hands of the Appellant:The appellant argued that the land sold, which generated long-term capital gains, belonged to a Hindu Undivided Family (HUF) and should not have been assessed in the hands of the appellant as an individual. However, this ground was not pressed during the hearing and was dismissed as such.3. Denial of Exemption Under Section 54B of the Income Tax Act, 1961:The appellant claimed exemption under Section 54B, stating that the sale consideration from agricultural land was invested in purchasing new agricultural lands in the names of his son and daughter-in-law. However, the Tribunal noted:- No claim for deduction under Section 54B was made in the return of income.- The new agricultural lands were not purchased in the appellant's name, which is a requirement as per the authoritative pronouncements of the Jurisdictional High Court and the Delhi High Court.Thus, the appellant was not entitled to the deduction under Section 54B. The Tribunal also rejected the claim for deduction under Section 54F due to lack of evidence supporting the construction of a residential property and non-compliance with the capital gain scheme provisions.4. Fair Market Value Consideration as of 1.4.1981:This issue was not explicitly discussed in the judgment provided, hence no detailed analysis is available.5. Explanation for Cash Deposits in the Bank Account:The appellant deposited Rs.47,50,000/- in cash in the bank account. The Assessing Officer considered Rs.28,08,000/- from the sale of agricultural land as explained and treated the balance as unexplained. The appellant argued that the cash deposits were from past income and additional sale consideration not recorded in the sale deed. However, the Tribunal found:- The appellant failed to offer any convincing explanation during the assessment proceedings.- The explanation provided during the appeal was unsupported by evidence and contrary to the settled legal position that the consideration stated in the sale deed is conclusive unless proven otherwise.- The Revenue is not required to show the source of income before invoking Sections 68/69.Thus, the Tribunal upheld the addition of unexplained cash deposits.Conclusion:The appeal filed by the assessee was dismissed, with the Tribunal finding no merit in the grounds raised, particularly concerning the denial of exemptions under Sections 54B and 54F, and the unexplained cash deposits. The order was pronounced on January 6, 2023.