TaxTMI 
TaxTMI 
2017 (11) TMI 626
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....99 in appellant's and her husband's own case. 3. Without prejudice to Ground No. 2, on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in holding the cost of acquisition of the property sold as Rs. 2,71400/-, instead of Rs. 8,79,000/- as paid by the appellant in spite of the clear finding of fact reached by the Honorable ITAT in Order for Block period 01-04-89 to 14-07-99 in appellant's and her husband's own case. 4. Without prejudice to Ground No. 2 & 3, the Ld. CIT(A) has erred in charging to tax the entire capital gains arising on sale of property in the hands of the appellant, in spite of the fact that the appellant's husband has incurred a part of the cost of acquisition and hence a part of the capital gains is liable to be clubbed in the hands of the husband u/s. 64(1)(iv). 5. On facts and circumstances of the case and in law, the Ld. CIT(A) has erred in confirming the actions of the Ld. Assessing Officer in adding Rs. 6,00,000/- as unexplained cash credit u/s 68 in spite of the fact that the same amount has been disallowed as cost of improvement while calculating the capital gains, thereby taxing the....
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....the assessee and proceed to dispose of on merits. 5. The brief facts of the case are that the assessee is an individual and filed her return of income for the assessment year 2007-08 on 26-09-2007 declaring total income at Rs. 5,21,524. The case was selected for scrutiny and statutory notices issued u/s 143(2) and 142(1). In response to the notices, authorized representative of the assessee attended from time to time and furnished the details as called for. The assessment was completed u/s 143(3) on 23-10-2010 determining the total income of Rs. 51,83,300, interalia making additions towards re-working of income from house property, income from short term capital gains, addition towards unexplained cash credit u/s 68 of the I.T. Act, 1961. The assessee carried matter in appeal before first appellate authority. The CIT(A) for the reasons recorded in his order dated 15-02-2011 partly allowed cost of acquisition of the property for Rs. 2,74,100 and directed the AO to re-work the short term capital gain. Aggrieved by the order of CIT(A), the assessee is in appeal before us. 6. The first issue that came up for our consideration is determination of income from sale of property. The ....
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....sferred and assigned flat No.28 to M/s Keki Consultants Pvt Ltd through its directors, Mr. Anu D Lohana and others by tripartite agreement dated 27-10-2004 and deed of confirmation dated 05-08-2005 duly registered with Sub Registrar, Thane. Though assessee claims that she had got right over the property in the financial year 1995-96 by virtue of an allotment letter from M/s Sheetal Builders Pvt Ltd, the said arrangement between parties is a mere willingness to purchase properly under an agreement for conveying the title in the property to the assessee. Therefore, we are of the considered view that the AO was right in treating the holding period of the property from the day on which the assessee has got right over the property by virtue of a valid sale agreement, according to which the holding period of the property is less than 36 months and hence, the AO has rightly computed income from sale of house property as short term capital gain. Accordingly, the ground raised by the assessee is dismissed. 8. The next issue that came up for our consideration from grounds 2-4 is with regard to cost of acquisition of the property. The assessee has computed long term capital gain. The asses....
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....he assessee has paid cash for purchase of property out of cash balance available in the books of account which fact has not been disputed by the lower authorities. The CIT(A) has though accepted the fact that the ITAT has accepted as such in its order, disallowed the cost incurred by the assessee by holding that the additions made in the hands of the assessee during block period on protective basis has already been deleted, cannot again be claimed by the assessee now. We do not find any merit in the findings of the CIT(A) for the reason that since substantive addition has been made in the hands of the assessee's husband, addition made on protective basis in the hands of the assessee cannot be a ground for denying the sources available in the form of cash. Therefore, we are of the view that the issue needs to be examined by the AO in the light of the claims of the assessee that Rs. 8,51,835 has been paid by the assessee's husband for which a separate addition has been made for the block period and also availability of source for Rs. 4,24,900, as per the order of the ITAT. Hence, we set aside the issue to the file of the AO and direct him to verify the cost of acquisition of the asse....
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.... the AO observed that there is a difference in capital account shown by the assessee in the balance-sheet as on 31-03-2007. Therefore, he asked the assessee to show cause as to why the difference shall not be added as unexplained credit u/s 68 of the Act. In response to show cause notice, the assessee submitted that difference in the capital account balance as pointed out by the AO is due to a clerical mistake of the accountant which has been rectified by filing a revised balance-sheet. Therefore, difference in capital account is not an item of credit found in the books of account to make addition u/s 68 of the Act. The AO, after considering the submissions of the assessee observed that the assessee has failed to explain the difference in capital account and balance-sheets. Though assessee claims that it is a clerical mistake committed by the accountant, the balance in capital account has been enhanced by Rs. 10,99,955 increasing the liability side of the balance-sheet. Therefore, it is evident from the fact that the assessee has increased capital account to explain sources for assets and hence, the difference of Rs. 10,59,955 has been treated as unexplained cash credit u/s 68 of t....
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....unt as unexplained cash credit u/s 68 of the Act. This proposition is further strengthened by the latest decision of the Bombay High Court, in the case of ShriArunkumar J Muchhala vs CIT in Incometax Appeal No.363 of 2015 judgement dated 24-08-2017 wherein the Hon'ble High Court categorically held that the assessee cannot take advantage of his own wrong done by not maintaining books of account as required under the Act. The Hon'ble Court further observed that the assessee has to explain each and every credit appearing in the books of account. The Court further considering the case laws relied upon by the assessee in the case of CIT vs Taj Borewells (supra) observed that the assessee has to explain about the nature and source of the credits in the books of account, and the amounts so credited in the bank passbook. The source of such amount has been discussed by the AO from the balance-sheet filed by the assessee. Apparently, it might have been prepared from the books of account. The relevant portion of the order of the Hon'ble High Court is extracted below:- "11. The facts as emerged before the Assessing Officer appears to be not in dispute. The Appellant has not denied tha....