TaxTMI 
TaxTMI 
2022 (3) TMI 32
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....pital gains" without appreciating the fact the documentary value of the transacted property is only 2.50 crores, thereby the sale consideration for the purpose of Long Term Capital Gains ought to be only Rs. 2.50 crores. 3. The learned CIT(A) erred in converting the addition made under the head "income from unexplained sources" to "Long Term Capital gains" without appreciating the fact that the buyer of the property had not acknowledged payment of sums over and above the registered value, and there is no evidence to prove the receipt of cash from the buyer of the property, and therefore the cash credits ought to be taxed as "income from other sources" and not "Capital gains". 4. The learned CIT(A) erred in allowing the assessee's claim that the cash credits represent the sale consideration of the property, received in cash, and therefore liable for taxation as Long term Capital gains in the hands of the HUF, is without any evidence, in as much as the cash portion, if any, was not deposited in the HUF's bank account, instead the same was deposited in the coparcener's bank accounts after a gap of six months, and the same cannot be telescoped against the sale considera....
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....e further contended that the sale proceeds of property have been distributed among the members of HUF as per their share and accordingly, computed long term capital gains from sale of property. 4. The AO, however, was not convinced with the explanation furnished by the assessee and according to the AO, though assessee's claims to have received sale consideration of Rs. 7,61,82,000/- from the buyer, but documentary evidence clearly shows that the property has been sold for a consideration of Rs. 2.50 Crs. Therefore, the AO opined that claim of the assessee that the balance amount of Rs. 5,11,82,000/- was received in cash and the same has been distributed among the members of HUF, cannot be accepted. The AO had discussed the issue in light of various evidences filed by the assessee, including statement recorded from Mr.A.Kuberan, purchaser of the property by the DDIT (I & CI)-II, Chennai, as per which, the purchaser had categorically denied payment of consideration in cash over and above what was specified in the Sale Deed. Therefore, the AO opined that claim of the assessee that it has received sale consideration of Rs. 7,61,82,000/- is incorrect and accordingly, re-computed the lo....
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....d argued that it has received sale consideration of Rs. 7,61,82,000/- and further, the same has been received in cash and cheque. The assessee, further, contended that except one immovable property at Burkit Road, T. Nagar, Chennai, the HUF does not own any other property and nor carried out any business to generate such a huge cash. Therefore, the AO is incorrect in coming to the conclusion that, income declared under the head 'long term capital gains' is an income from unexplained sources. The assessee had also challenged the disallowance of exemption claimed u/s.54 of the Act and also Sec.54EC of the Act towards payment made for purchase of another residential flat and investment made in REC Bonds. 6. The Ld.CIT(A) after considering the submissions of the assessee and also taken note of various facts, deleted the addition made by the AO towards income from unexplained sources amounting to Rs. 5,11,82,000/- by holding that although, the registered document shows payment of consideration of Rs. 2.50 Crs. only, but other circumstantial evidences including location of the property and the Fair Market Value as on the date of sale, clearly indicate that the claim of the assessee that....
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..../s.131 dated 20.01.2014 by the DDIT (I & CI)-II, Chennai, which clearly shows that the assessee has received sale consideration of Rs. 2.5 Crs. only. The Ld.DR further submitted that the Ld.CIT(A) erred in allowing the claim of the assessee that cash credits represent the sale consideration of the property received in cash and therefore, to be treated as sale consideration for long term capital gains in the hands of the HUF without appreciating the fact that the cash portion of consideration, was not deposited in the HUF bank account, instead the same was deposited in co-parcener bank account after a gap of six months and the same cannot be telescoped against the sale consideration. 8. The Ld.AR for the assessee, on the other hand, supporting the order of the Ld.CIT(A), submitted that except a piece of immovable property at Burkit Road, T. Nagar, Chennai, the assessee does not own any other property or carried out any business to generate such a huge cash to be treated as unexplained income and thus, the Ld.CIT(A) has rightly held that the claim of the assessee that it has received sale consideration of Rs. 7,61,82,000/- to be accepted. The Ld.AR further submitted that the assesse....
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....the AO for the simple reason that the assessee (HUF) does not own any other property except the property sold during the impugned assessment year. Further, the assessee neither carried out any business activity nor generated any other income from other sources. Therefore, in the absence of any business activity which generates undisclosed income, it cannot be alleged that the assessee has generated income from unexplained sources. No doubt, when assessee claims something, which is the duty of the assessee to justify its claim with necessary evidence. Unless assessee substantiated its claim with necessary evidences, then, the AO can infer otherwise but such inference should be based on circumstantial evidences. In this case, the assessee claims that it has received sale consideration in cash amounting to Rs. 5,11,82,000/- from transfer of property which is although not supported by documentary evidences, but circumstantial evidences clearly show that there is every possibility of generating income from that source. Therefore, when the assessee has claimed that it has received sale consideration in cash for transfer of property, it is for the AO to disprove the claim of the assessee ....
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.... incorporating the full sale consideration, and further there was a time gap of more than six months from the date of sale of property by the HUF to the date of deposit of cash in the assessee's accounts. 4. The learned CIT(A) erred in allowing the unexplained cash deposits found in the assessee's bank accounts, without appreciating the fact that the sale proceeds of the HUF property ought to be deposited in the HUF's account and then transmitted to the assessee's account, through account payee cheques, in order to establish the nexus, but payment of huge sums, of the order of more than 2 crores to a coparcener of 19 years age, directly by the buyer of the property is beyond the imagination of any sorts. 5. The learned CIT(A) erred in allowing in allowing the unexplained cash deposits found in the assessee's bank accounts, without appreciating fact that the partition document produced by the assessee is only a self-serving document, and mere tallying of co-partner's shares would not amount to actual receipt of sums, unless proved otherwise by means of Account payee cheques etc. 6. For these and other grounds that may be adduced at the time of hearing, ....