TaxTMI 
TaxTMI 
2022 (5) TMI 1007
X X X X Extracts X X X X
X X X X Extracts X X X X
....ds raised by the assessee read as under: 1. The learned Commissioner of Income tax (Appeals) erred in sustaining an addition of Rs.29,34,600 for the reason that the assessee was not sure of constructing his own house and hence a sum of Rs.29,34,600 would not have been available for investment in the construction of the new house. 2. The learned Commissioner of Income tax (Appeals) ought to have appreciated the fact that the assessee's ultimate aim was to construct a house for availing exemption under section 54F and as this aim was always present in his mind it is impossible that the assessee would have frittered away Rs.29,34,600 leaving him penniless to this extent to meet the cost of construction of the new house at Mangadu. 3. The....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ce of the assessee is disallowance of cost of construction for Rs.29.34 Lacs. 2. This is second round of appeal before us since the matter in first round was subject matter of adjudication before this Tribunal vide ITA No.2047/Mds/2015 dated 07.04.2016. A copy of the same is on record. The facts as noted in the order are that the that the assessee made cash deposits of Rs.80.36 Lacs in Tamil Nadu Mercantile Bank Ltd. between 06.12.2010 to 19.03.2011 and demand draft of Rs.39 Lacs was also credited. The aggregate deposits worked out to be Rs.119.35 Lacs. The deposits were stated to be sourced out of sale of certain agricultural land inherited by the assessee from his father. The land was sold for Rs.534.10 Lacs including share of other co-o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e also issued, however, there was no clarity whether the said sum was utilized for construction of building. Accordingly, Ld. AO was directed to verify the said facts. Regarding addition of Rs.21.53 Lacs, the matter was set aside to Ld. AO for limited purpose to verify that the excess amount deposited by the assessee pertained to mother and sister. The adjudication of the Tribunal was as under: - 8. We heard the rival submissions and perused the material on record and judicial decisions cited. On the issue of claim of exemption u/sec. 54F of the Act, the ld. Authorised Representative argued grounds and filed written submissions explaining that the assessee has purchased the land in the name of unmarried daughter who was dependent and befo....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... explaining the credits of sale proceeds deposited from 6th December, 2010 to 15th December, 2010 and the assessee has withdrawn the total consideration during the period from 21st December 2010 to 4th January, 2011. It is clearly evident from action of the assessee that money was withdrawn and utilized for purchase of land in the name of daughter on 21.01.2011 before the end of the previous year and commenced construction of residential flats. The findings of the Assessing Officer based on suspicion without considering the construction expenditure incurred towards labour, materials on day to day basis being highly unorganized sector. The observations of the Assessing Officer that the money has been used for some other purpose and investmen....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ence of Rs.21,53,000/- as unexplained income without any evidence or statement recorded from assessee's mother or sister. The ld. Assessing Officer has relied on the sworn statement of assessee and daughter and made elaborate findings in his order on addition. The Assessing Officer's observation of unexplained income is on imagination overlooking the fact that the life interest is created for assessee's mother and sister by will of late Dharmaraj Nadar (father) in the year 2001. The ld. Assessing Officer hastily based on assumption made an addition without considering the basic realities of blood relations and their influence in completing the sale transaction. Therefore, considering the apparent facts and circumstances, we are of the opini....
X X X X Extracts X X X X
X X X X Extracts X X X X
....vanan appeared and stated that he was not aware of the confirmation letter as filed by the assessee and the confirmation was not given by him. Therefore, the letter was held to be fabricated. It was also noted that the tiles were purchased even before the purchase of land on which the house was going to be constructed. Therefore, the confirmations letters were held to the fabricated and the amount of Rs.97.82 Lacs as stated to be invested in the construction of the house was held to be unexplained investments. 4. Regarding addition of Rs.21.53 Lacs, the assessee submitted that Rs.11.53 Lacs belonged to sister and the balance Rs.10 Lacs belonged to his mother. However, in the absence of any material evidence forthcoming from the assessee, t....