TaxTMI 
TaxTMI 
2016 (2) TMI 425
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....eedings; the ld. CIT(A) accepted the plea of the assessee without any verification and documentary evidence which is not justified. 2 On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law and facts in directing the AO to consider the LTCG (Long Term Capital Gains) of Rs. 11,75,813/-, which was claimed as exempt u/s 10(38) furnish sustainable documentary evidence in respect of these investments inspite of sufficient opportunities allowed to assessee during assessment as well as remand proceedings. 3 On the facts and in the circumstances of the case, ld. CIT(A) has erred in law and facts in deleting the addition of Rs. 6,40,000/- out of Rs. 15,50,000/- made by AO by treating the agricultural income as income from undisclosed sources as assessee failed to furnish sustainable documentary evidence in respect of the agricultural income during assessment proceedings; the Ld. CIT(A) accepted the plea of the assessee without any verification and documentary evidence which is not justified." 3. The grounds of appeal taken by the assessee in ITA No. 4312/D/2012 are as under :- "1 That order of assessment u/s 143(3) of the Act 29.12.20....
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....nd on facts in restricting the cost of improvement/construction on residential house in the financial year 2008-09 at Nil as against total expenditure of Rs. 2,00,000/- on repair of the house. 4 That the learned Commissioner of Income Tax (Appeals) has further erred both in law and on facts in not allowing the claim of exemption of Rs. 39,15,450/- u/s 54B of the Act. 4.1 That the finding of the learned Commissioner of Income Tax (Appeals) that "no evidence has been led that agriculture operations were being carried out on the said land" is contrary to facts and evidence on record and has been arrived without granting any opportunity and therefore, unsustainable. 5 That the learned Commissioner of Income Tax (appeals) has erred both in law and on facts in upholding an addition of Rs. 9,10,000/- out of aggregate addition made of Rs. 15,50,000/- representing agricultural income earned by the appellant in the year under consideration. 6 That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in upholding the levy of interest u/s 234B of Rs. 30,56,108/- which is not leviable at all on the facts of the instant case. It ....
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....tial house and improvement of agriculture land such as filing, landscaping etc. including a barbed wire boundary which was constructed on the entire land of 46 kanals and 8 marlas and a pucca water harvesting pool of 90 lacs liters was also constructed by the appellant which was duly connected with road and pavements. The appellant furnished photocopies of the said property in support of the claim of cost of land incurred for development of the property apart from a valuation report. The assessee filed copy of bank statement in support of the claim of construction. A remand report was obtained from the Assessing Officer. On consideration of the above, CIT(A) allowed the claim of the appellant except to the extent of Rs. 47,55,000/- and as such, both assessee and revenue are in appeal. 10. During the course of hearing, the learned counsel for the assessee submitted that since during the course of assessment proceedings, the Assessing Officer had directed the assessee to furnish only details of assets for the year under consideration there was no justification to deny deduction on account of cost incurred in earlier years which were otherwise supported by statement of affairs plac....
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....rred in the assessment years 2006-07 to 2008-09 towards agricultural land sold alongwith farm house at Gurgaon in the instant year. So far as the cost incurred in the preceding assessment years is concerned, the CIT(A) has allowed the same by holding vis-à-vis agricultural land as under: "The agriculture land was purchased in the FY 2004-05 for a consideration of Rs. 21,05,000/-. Thereafter, improvements/ additions to the agriculture land by way of earth filling, barbed wire fencing, construction of water harvesting pool, construction of huge residential house etc. were claimed to have been made during the FY 2005-06, 2006-07, 2007-08 & 2008-09 by investing Rs. 30,00,000/-, Rs. 33,95,000/-, Rs. 53,20,000/- and Rs. 1,23,50,000/- respectively. The investment in the FY 2005-06 has been shown in the balance sheet filed along with return of income and the assessment was complied u/s 143(3) accepting the income returned. The investment in the FY 2006-07 & 2007-08 have been duly reflected in the statement of affairs as on 31.03.3007 & 31.03.2008 filed along with the return of income. These returns of income have been processed u/s 143(1). The declaration in the statement of affa....
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....e farm house for a consideration of Rs. 1,05,79,000/- vide sale deed dated 14.07.2008 and the agriculture land for a consideration of Rs. 3,18,63,000/- vide sale deed dated 5.11.2008. Had the assessee not made any investment for the construction of farms house on the bare agriculture land purchased during FY 2004-05, he would not have been able to sell the farm house by a separate sale deed for a consideration of Rs. 1,05,79,000/-. However, it is seen from the above account that the assessee has claimed payment of Rs. 45,55,000/- even after 14.07.2008 to various concerns towards addition to the farm house, which is not tenable. The addition to the farm house made during the year is therefore restricted to Rs. 77,95,000/-. In view of the above, the action of the AO in taking the addition to the agriculture land at Nil discarding the evidences available on record is unjustified." 17. From the aforesaid, it is apparent that the expenditure claimed is evident from the bank account maintained by the assessee which fact has not been proved or established by leading any material to be incorrect of erroneous. It is also not established how sums withdrawn from the bank have been utilized....
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....11,75,813/- which was claimed as exempt under section 10(38) of the Act and short term capital gain of Rs. 3,09,715/- declared by the appellant in its return of income. The CIT(A) vis-à-vis aforesaid ground has held as under:- "15. I have considered the issue and the submissions made by the AR. The AO asked the assessee to furnish the details to LTCG & STCL on shares along with evidences for the first time on 7.12.2011. in response to this requirement, the assessee vide letter dated 19.12.2011 furnished the details along with copies of D-mat a/c, transaction statements with share brokers and payment of STT along with revised computation statements, which has been confirmed in the remand report of the AO. However, the AO in the assessment order has stated that no details were furnished and therefore made the impugned addition. As submitted by the AR, the evidences furnished are computer generated statements which can be taken as admissible evidence. However, if the AO had any doubt, he should have made necessary enquiries to ascertain the authenticity of the documents filed by the assessee. The transaction statements of the share broker indicate the name of the assessee an....
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....come was shown in the AY 2008-09. Agricultural income for both the years was declared in the year under consideration at Rs. 15,50,000/-. The claim of agricultural income cannot be denied merely because Form-J was not furnished by the assessee. The contention of the AR that the agricultural income shown by the assessee of Rs. 18,902/- per acre is reasonable considering that I have upheld agricultural income of Rs. 26,000/- per acre by the above mentioned appeal order is misplaced and unacceptable as agricultural income depends on various factors like fertility of land, availability of water etc. Since the assessee himself has shown agricultural income of Rs. 3,14,513/- in the AY 2007-08, I would deem it reasonable to adopt Rs. 3,20,000/- as agricultural income for the AY 2008-09 & 2009-10. Since no agricultural income was declared in the AY 2008-09 on the ground that the agricultural income for both the years, which has been declared in the year under consideration, could be taken as Rs. 6,40,000/-. The addition to the tune of Rs. 9,10,000/- therefore is sustained and the grounds of appeal are partly allowed." 22. Having regard to the rival submissions and material placed on rec....
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....mption under section 54B of the Act and the Assessing Officer shall pass an order after granting necessary opportunity to the appellant. In the result, ground is allowed for statistical purposes. 26. Ground 6 raised by assessee relates to levy of interest which is consequential in nature. 27. In the result, appeals filed both by the assessee and revenue are partly allowed. Order pronounced in open court on this 12th day of January, 2016. ============= Document 1 House No. 1392 sold on 28/04/2008 Sale consideration Less: indexed cost 27,50,000 (FY 2003-04) 22,50,000/ 28,28,294 28,28,294 -78,294 463*582 AY 2004-05 Agriculture land sold on 05/11/2008 Sale consideration 4,24,42,000 Less: Indexed Cost (FY 2004-05) 21,05,000/ 25,52,312 480*582 (FY 2005-06) 30,00,000/ 35,13,078 497*582 (FY 2006-07) 33,95,000/ 38,07,110 519*582 (FY 2007-08) 53,20,000/ 551*582 56,19,310 (FY 2008-09) 1,23,50,000/ 582*582 1,23,50,000 2,78,41,810 1,46,00,190 House No. 1402 sold on 18/08/2008 Sale: consideration 35,00,000 Less: Indexed cost (FY 2002-03) 7,51,000/ 447*582 9,77,812 ....
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.... the learned Assessing Officer has never required the appellant, during assessment proceedings to file such evidences (see page 78 of submission dated 20.04.2012 and page 71 of submission dated 12.3.2012) Document 4 06-07 07-08 (Rs.) 30,00,000 33,95,000 Bahadurgarh (Rs.) 35,13,078 38,07,110 08-09 53,20,000 56,19,310 2 Agricultural land (measuring 46 kanals) alongwith farm house thereon at Gurgaon (A) A.Y. Cost 4) It is submitted that, the learned Commissioner of Income Tax (Appeals) was justified to accept the investment in H. No. 1392, Sector-6, Bahadurgarh of Rs. 16,50,000/-. The findings of learned Commissioner of Income Tax (appeals) are in para 8.4 at page 9 to be read with para 8.1 at page 6 of his order The learned Assessing Officer disallowed the cost incurred on development of land of Rs. 2,40,65,000/- in Assessment years 2006-07 to 2009-10 through allowed the cost of purchase of land of Rs. 21,05,500. Thus, he restricted the cost to Rs. 21,05,500 as against claim of Rs. 2,61,70,500/- (Rs. 21,05,500+30,00,000+33,95,000+53,20,000+1,23,5000) ii) In arriving at the above conclusion, he overl....
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....s is evident from the photos produced before learned Commissioner of Income Tax (Appeals) and were also shown before the learned Assessing Officer (page 73 of Paper Book). The amount invested was withdrawn from the banks and the source of the same thus stood explained when it is reflected in the balance sheets i.e. the sources and its applications. As such, no adverse inference could be validly drawn. 5) It is submitted that the construction of the farm house is supported by details of construction (page 80 of Paper Book) and valuation report dated 1.7.2008 valuing the development work including water harvesting pond at Rs. 1,55,27,000/- (pages 111-121 of Paper Book). This fact is specifically stated in the sale deed dated 14.7.2008 (pages 91-94 at pages 92-93 of Paper Book) 6) It is thus submitted that the entire cost ought to be allowed as deduction. 7) The learned Commissioner of Income Tax (Appeals), has restricted the amount invested in the year to Rs. 77.95 lacs out of total sum of Rs. 123.50 lacs on the ground that Rs. 45.55 lacs was paid after 14.7.2008, which is the date of sale deed of farm house. There is no justificatio....