AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2022 (8) TMI 261
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.... from his house. The Jamnagar Police, consequent to the complaint, arrested the culprits along with the cash and gold biscuits. The cash seized was to the tune of Rs 2.01 crores and there were 40 gold biscuits valued at Rs 1.19 crores. Accordingly, a warrant of authorization u/s. 132A was issued on 22-09-2011 to requisition the seizure made by the Police. But, the same could not be requisitioned then as proceedings were pending before the Court at Jamnagar. However, enquiries were made by the ADIT(Inv.), Jamnagar from the concerned persons. Later on, the Court vide its order dated 30-03-2013 allowed the Income-tax Department to seize the assets and directed the Department to complete the assessment within two months from the seizure. The department went in appeal to the High Court against the decision of lower court to complete the assessment in two months. The Hon'ble Gujarat High Court directed the Department to complete the assessment on or before 31-07-2014 vide their order dated 20-03-2014. The assessment proceedings were accordingly taken up immediately so as to complete it within the time frame directed by the Hon'ble High Court although the time barring date to comp....
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....fore him and placed before us at P.B 19 as under: Computation of Long Term Capital Gain : Particulars Amount Amount Sale Consideration (A) 65,362,045 Total Sale Consideration (B) 65,362,045 (-)Purchase cost of land 2,472,735 indexed cost of acquisition (C) 2472735*785 100 19,410,970 Expense for sale (D) 4,300,000 Total Purchase cost (E=C-D) 23,710,970 Net Capital gain chargeable to tax (F=B-E) 41,651,075 4. On verification of the details of capital gain given in the computation of income, it was noticed that the assessee had taken the cost of acquisition of Rs. 24,72,735 as on 1-04-1981 and arrived at the indexed cost of acquisition at Rs. 1, 94,10, 970/- by applying cost index of the year 1981-82 and 2011-12. After claiming further deduction of Rs. 43,00,000/- as expenses, net long term capital gain was shown at Rs. 4,16,51, 075/-. On verification of the copy of sale deed furnished by the assessee, it was also noticed that the assessee had inherited the impugned land from his brother, Late Shri Prabhatsinh Vala in....
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.... vii) Assessees was allowed claim of expenses of Rs.8 Lacs being amount of advance received from Mr.Iqbal Arandia refunded on account of an earlier agreement to sell entered into with him being canceled. Accordingly the capital gain of the assessee was recomputed by the A.O. to Rs. 11,20,01,490/-, as opposed to Rs. 4,16,51,075/- declared by the assessee, after making the above adjustments as under: Sale consideration as shown by the assessee Rs 6,53,62,045 Add:- Additional consideration (as discussed in para 7.2 above) Rs 5,00,00,000 Add:- Cash consideration received (para 8.2) Rs 5,00,000 Total full value of sale consideration Rs 11,58,62,045 Less:- Cost of acquisition (para 5.5) Rs 22,69,1007- Indexed cost of acquisition (para 5.7) 22,69,100 x 785 / 583 Rs 30,60,555/- Less: Expenditure incurred (para 7.4) Rs 8,00,000/- Long term capital gain Rs 11,20,01,490/- 5. Aggrieved by the same, the assessee went in appeal before the ld. CIT(A). who deleted the following: (i) additional consideration of Rs. 5 Crores. (ii) substitution ....
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....dates & deposited thereafter Rs. 12 Lacs cash in his Saving Bank account of Canara Bank on 23/06/2011 and thus offered Net cash deposited as income of Rs. 10 Lacs. Similarly, the appellant has made withdrawal of Rs. 3 Lacs from Canara saving bank account in cash on 24/06/2011 out of fund available with him & thereafter made deposit of Rs. 5 Lacs in cash his HDFC saving bank account on 07/07/2011. Thus, the net deposit of Rs. 2 Lacs is offered as income. Thus, while assessing the income, the 'earned Assistant Commissioner of Income Tax, Central Circle-1, Rajkot as well as the learned Commissioner of Income Tax (Appeals) - 11, Ahmedabad has erred in law as well as on facts in not considering the netting off effect of cash deposited as Income of the assessee. 6. The learned Assistant Commissioner of Income Tax, Central Circle-1, Rajkot as well as the learned Commissioner of Income Tax (Appeals) - 11, Ahmedabad has erred in law as well as on facts while not appreciating the submission that there has been a search conducted and all the cash & gold found has already been taxed even if this cash is available with the assessee, it has been taxed as cash found and credit of cas....
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....,000/- 4. Cash seized during search conducted 2,01,47,045/- 5. Value of Gold Biscuits seized during search 1,20,00,000/- 6. Expenses incurred in connection with the transfer of Asset offered for income 24,00,000/- Total Full Value of Consideration as per Return of Income 6,53,62,045/- 15. Referring to the above, he drew our attention to point no. 6 which related to expenses incurred in connection with transfer of asset offered for income for Rs. 24 lakhs. He also drew our attention to the assessment order at para 4 acknowledging this fact of 24 lakhs included in the sale consideration as representing expenses incurred by the assessee on sale. Para 4 is reproduced hereunder: "4. During the course of enquiries by the ADIT, statements under section 131(1A) of Miss. Ritaben Patel(Care taker of the assessee at the relevant time), purchasers of the land and other connected persons were recorded. As per information gathered from said enquiries, assessee had sold a piece of land situated at T.P. Scheme No. 1, P.P. No 31, in Jamnagar to 9 different persons of Jamnagar during the month of July 2011 by way of two separate sale deeds, for ....
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....acs, the balance, i.e Rs.19 lacs is only liable to be disallowed for want of substantiation. The disallowance of expenses accordingly is directed to be restricted to the extent of Rs.19 lacs.. 18. This ground of appeal of the assessee is therefore partly allowed. 19. Ground no. 4 & 5 it was common ground related to the addition of Rs. 5 lacs made to the sale consideration on account of deposits in the bank account of the assessee not included as part of sale consideration to this extent. 20. The order of the A.O. while making the impugned addition at para 8 -8.2 is as under: "8. On verification of the bank statements, it is noticed that the assessee had made various cash deposits during the year. He had claimed the source of such cash being the sale proceeds of the land received in cash. He accordingly, computed the sale proceeds by taking the total of such cash deposits. However, on closer verification, it was noticed that, he had deposited Rs12.00 lacs into his Canara bank account on 23.6.2011 and Rs 5.00 lac into his HDFC Bank account on 7.7.2011. However, while computing the sale proceeds, he had considered only Rs 10.00 lac and Rs 2.00 lac out of the cash dep....
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....ank on various dates. The findings of the AO while making addition of Rs.5 lacs on account of unexplained cash deposits, we find, are very vague and general. We find that he has given no specifics as to how he arrived at the findings of the impugned cash deposit in bank not accounted for in sales consideration. What he only states is that the cash deposit not reflected in consideration amounted to Rs. 8 lakhs, out of which Rs 5 lakhs pertained to cash deposit in HDFC bank account and Rs.3 lakhs pertained to deposit in his Canara Bank account. It is not clear as to how he noted that out of 12 lakhs deposited in his Canara Bank account, the assessee had considered only Rs10 lakhs as part of sale consideration and out of Rs. 5 lakhs deposited in the HDFC Bank account the assessee had taken only 2 lakhs as part of sale consideration. Though he mentions specific deposits as not being included in the consideration, nothing was brought before us as to how he found these specific deposits not included in the disclosure of sale consideration. The Ld. D.R. was unable to assist us in this matter. 23. Further taking note of the entire facts and circumstances of the case and also the fact th....
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.... deleting the addition of Rs.5 crore solely relying on the statement of Ms. Reetaben Vaishnav." 28. Ground no. 1 raised by the Revenue is in relation to the deletion of addition of Rs. 5 crore made to the sale consideration received by the assessee which addition was made on account of the said amount stated to have been paid by the purchaser of the land sold by the assessee, to two persons in lieu of an out of court settlement with them with respect to a dispute of one of the land sold. 29. The ld. CIT(A) dealt with the facts relating to the issue at para 4.2 to 5.1 of the order as under: 4.2 The AO made addition of Rs.5.00 crores in the sale consideration of land on the basis of statement of Miss Ritaben L. Patel (caretaker of the assessee). In her statement, she stated that there was some dispute in respect of the land bearing survey No.31 in Jamnagar between the assessee and Shri Iqbal Arandia and Shri V.P. Mehta and the matter was pending in the court. However, an out of court settlement was concluded between the assessee and Shri Iqbal Arandia and Shri V.P. Mehta and an amount of Rs.5.00 crores was paid to these persons by the assessee. This money was stated to....
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.... Investigation of the Department during the course of search and by the Assessing Officer were factually self-contradictory. Admittedly, the payment was not made in her presence and she did not know the persons involved in the transactions in issue. The Police did not seize the diary which Ritaben Patel stated in her statement before the A.O. Her statement that the transactions related to the said land land were recorded in the diary seized by the Police was not correct as there was no such diary as per panchnama of the police. The A.O. also did not make any reference of the diary for making the addition. The A.O. did not have any material evidence on record which could establish any veracity of the statements of Ritaben Patel. The assessee, requested the A.O., during assessment proceedings, to confirm whether such diary, if seized by the Police, was examined by him, however, the AO did not respond to the request of the assessee. This fact was emphasized by the assessee in his submission on Page No. 14 & 15 of the paper book. In para 7.2 of the assessment order, the AO himself clearly mentioned that there was no other evidence except the statement of Rita Patel about payment of Rs.....
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....retaker, denied receiving any such amount though he admitted to the existence of the dispute and stated that he had only been refunded his advance of Rs.8 lacs, given to the assessee for purchasing the land. 35. The Ld.CIT(A), we hold has rightly held that except for the statement of the caretaker there was no other evidence with the AO to corroborate the payment of Rs.5 crores for settlement of dispute. And the statement being contradictory and unreliable, the addition, we hold, has been rightly held by the Ld.CIT(A) to be not sustainable. 36. In view of the above, ground no. 1 is dismissed. 37. Ground no. 2 reads as under: 2) "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and/or on facts in taking the date of indexed cost of acquisition as 81-82 instead of 08-09 on which indexation has been worked out." 38. The issue relates to the indexation of the cost of acquisition being taken from F.Y 1981-82 as done by the assessee as opposed to from 08-09 taken by the A.O. 39. The facts relating to the issue being that the land sold by the assessee was acquired by him on succession from his elder brother in 2008-09, wh....
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....sions in support of his claim. 7.2 The A.O., it appears from his findings, did not consider the relevant provisions of the Act on the issue and also ignored the ratio of the decisions relied by the assessee. Admittedly, the assessee inherited the land from his late brother Shri Prabhat Sinh who was the owner of the land since 1966,. The A.O. did not dispute these facts. On perusal of the judgement in the case of Rajesh Vitthalbhai Patel (supra), it was observed that the ratio of this case was directly applicable to the facts of the case of the assessee. After considering the facts of the case and position of the law on the issue the appeal is allowed. 41. The ld. D.R. was unable to controvert the factual findings of the ld. CIT(A) that the assessee had acquired the land from his late brother on succession, who in turn had owned it since 1966. This fact has not been disputed by the A.O. also. We have noted that the Ld.CIT(A) has relied upon the decision of the jurisdictional High Court in the case of Rajesh Vithalbhai Patel (supra) for the proposition that on succession, as per law, the cost of acquisition is to be taken as that to the previous owner and holding of the p....