AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2017 (7) TMI 910
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.... in accepting the additional evidence in form of the valuation report of the property without establishing the veracity as per Rule 46A(4) r.w.s.251(1). 4. Whether on the facts and circumstances of the case, the CIT(A) has erred in deleting the addition made on account of cash credit when the AO had established the lack of credit worthiness of lender and non-genuineness of the transaction. 5. Whether on the facts and circumstances of the case, the CIT(A) has erred in deleting the addition made on account of cash credit ignoring evidence marshaled by AO had established the deposit of cash and the advancement of loan entries immediately thereafter stating that the AO did not ask for clarification without discharging his onus for establishing the veracity as per Rule 46A(4) r.w.s. 251(1)." 6. Whether on the facts and circumstances, of the case the order of the CIT(A) is perverse and liable to be quashed." 3. The brief facts of the case is that the assessee is an individual who filed its return of income on 15.04.2009 showing income of Rs. 926166/-. Assessment u/s 143(3) was made on 31.12.2010 at an income of Rs. 76168626/-. The appeal was preferred by the ld CIT(A), who all....
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....wer authority. Firstly, on the issue of the additional evidence the ld IT(A) has admitted the additional evidence in the form of valuation report regarding cost of construction and certain other documents, which were not available before the AO by obtaining remand report from the Assessing Officer and obtaining rejoinder of the assessee. The ld Assessing Officer has not objected the admission of additional evidence in remand report and therefore same were admitted as these documents according to him were vital for deciding the issue. The full facts are mentioned at Para 3.1 of the order of the ld CIT(A) which could not be controverted by the ld DR. In view of this, we dismiss ground No. 2 and 3 of the appeal of the revenue on admission of additional evidence. 9. Coming to the ground No. 1 of the appeal of the revenue according to section 48 the income chargeable under the head capital gain is required to be computed by deducting from the full value of consideration received a. Expenditure incurred wholly and exclusively in connection with such transfer and b. The cost of acquisition of the asset and the cost of any improvement thereto. 10. Therefore, according to Clause (b) wha....
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....onstruction only on the basis that the appellant could not prove the said claim. The action of the AO is not in accordance with revisions of section 48 and therefore, the AO is directed to delete this addition. The ground of appeal is accordingly allowed." 11. According to us, the Ld. CIT (A) has granted deduction without ascertaining the actual cost of expenditure incurred by the assessee. Merely saying that the entire expenditure for construction was incurred by cheque withdrawals from NRI bank account without examining the evidence of cost incurred and only on the basis of valuation report regarding the estimated cost of construction of the house, deduction cannot be allowed. Further valuation report merely an opinion cannot be the basis for granting deduction of actual cost and actual cost of improvement from the sale consideration for working capital gain. The ld. AO has never raised the question of the source of the funds but has only asked about the actual cost of improvement i.e. the construction cost of the building. Further it is also not in doubt that whatever is sold by the assessee is a three-storey building with basement for which the land was acquired in 1983 and 1....
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....ted. The appellant has further argued that credits received from M/s Starex Import Export Pvt Ltd & M/s Starex Education Society represent repayment of loans and advances already made to them and therefore provisions of section 68 are not applicable to such credits. This argument of the appellant is also without any force as sec. 68 refers to 'any sum credited'. That sum can be either a loan received or repayment of loan already given. 6.2.2 It is undisputed that the appellant has submitted confirmation from all the parties. The nature of transaction was also explained to AO. As required by the AO, copy of return and copy of bank account of all the three entities were duly filed. Various judicial decisions have laid down that following three things have to be established to prove genuiness of a credit: Identity of creditor Financial capacity of creditor Genuiness of transaction The appellant had furnished requisite evidence to satisfy the above mentioned requirements. Therefore, the appellant has discharged the onus placed on him and burden of evidence shifted to AO. According to appellant, the AO did not raise any further query, rather he asked the appellant....
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....sion made by the assessee at page No. 10 of the assessment order wherein with respect to Mrs. Poonam Singh the assessee himself as agreed that a sum of Rs. 25 Lacs which could not be explained to the satisfaction of the Ld. assessing officer could have been added. Therefore Ld. departmental representative submitted that Ld. CIT (A ) has erred in deleting the addition. With respect to the other two parties he relied upon the order of the Ld. assessing officer.. 14. We have carefully considered the contentions raised in the orders of the lower authority. During the year the assessee has received a sum of Rs. 2.68 crores from time to time on different dates from his wife Smt. Poonam Singh who is also a non-resident Indian. She does not have any taxable income in India for the year however she deposited this sum from her bank account. out of the sum of Rs. 2.68 crores a sum of Rs. 1.96 crore is transferred from her fixed deposit account with Indian overseas bank in her bank account and subsequently to the account of her husband( assessee). Further a sum of Rs. 42.43 Lacs was also received by her on maturity of the fixed deposit with ICICI bank which was transferred to another bank acc....