2023 (1) TMI 320 - AT - Income Tax

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

Popat Manaji Rahinj (Through Legal Heir Mr. Datta Popat Rahinj) Versus ITO, Ward-3, Ahmednagar

Popat Manaji Rahinj (Through Legal Heir Mr. Datta Popat Rahinj) Versus ITO, Ward-3, Ahmednagar - TMI 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.