TaxTMI 
TaxTMI 
2023 (11) TMI 499
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....sset and , the entire addition ought to have been deleted, as prayed for. iii) That on facts and in law, the learned CIT(A) has grievously erred in confirming the action of the AO in applying the provisions of section 50C of the Act while computing the addition of capital gains." And the grounds raised by the Revenue in its appeal are as under: (1) The Id. CIT(A) has erred in direction the AO to verify and allow the claim u/s 54 by ignoring that (i) assessee had not made the claim u/s 58 in return of income, (ii) Section 54B deduction is allowed only if the land is used for agricultural purposes, (Hi) Section 54B envisages that in the 2 immediate preceding years, the assessee should have used the land for agricultural purposes which is not satisfied in this case as the lands have been purchased in one financial year and sold in immediate next financial year. (2) The Id. CIT(A) has erred in deleting the additions made u/s 68 of Rs. 64,85,000/- + Rs. 2,63,00,000/- + Rs. 3,34,50,000/- aggregating Rs. 6,62,35,000/- without appreciating the discrepancies and findings given by the AO in the remand report in the right perspective. (3) It is, therefor....
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....he land was situated beyond limits prescribed under section 2(14)(iii) of the Act to qualify as capital asset. The contention of the Revenue, on the other hand, is otherwise. The assessee has sold two pieces of land during the year - (i) situated in Gam Telav, Ta. Sanand, and (ii) land at Gam Sanathal, Ta. Sanand. The assessee had contended that the lands fell in the exception provided u/s 2(14)(iii) of the Actbeing situated beyond 8 Kms. from the Ahmedabad Municipal Corporation and had measured the distance as per Google Map and based on certificate of Dy. Engineer, Roads & Building Department. The assessee had submitted that both the land are located under Sanand Taluka, and are located beyond 2 Kms. from the local limit of Sanand, and therefore, as per the Notification No.SO-9447 (F.No.164/3-ITA-I dated 6.1.1994, they are not urban agricultural land. The assessee had also submitted Google Map and letter of Dy.Engineer, Road & Building Department, reporting distance beyond 8 Kms. from the limit of the AMC and beyond 2 Kms. from the Sanand Municipality. The facts relating to the measurement of distance furnished by the assessee from the Google Map and certi....
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....Municipal Corporation is altogether different from Development Authority. AUDA does not have elected representatives but only nominated representatives by the Government Moreover, it does not have power to levy taxes. It is held by Hon'ble Kerala High Court in the case of CIT v/s Murali Lodge 194 ITR 125 (Ker) that only those local authorities, township, etc. can be treated as municipality within meaning of section 2(14)(iii)(a) which satisfy the requirements of a municipality within the meaning of relevant Municipal Act. It is held in following judgements that a Development Authority is not a Municipality: a. Smt.T. Urmila v/s ITO (2012} 34 CCH 0477 HydTrib & b. ITO v/s Shri Adela Krishna Reddy [ITA No.l838/Hyd/2013) Measurement of Distance Further the distance of Land is as under; Land at Distance as per Google Map Page Reference Ahmedabad Sannand Telav 18.3 KMs 6.2 KMs Page 7 & 8 of GT Appeal Order - Sanathal 13.5 KMs 11.6 KMs Distance based on Certificate of Deputy Engineer Road and Building Department Dated 08.05.2019. Distance from Ahmedabad to Telav 16 KMs Page 7 & 8 of C1T....
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.... (whether known as a municipality, municipal corporation, notified area committee, town area committee, town committee, or by any other name) or a cantonment board and which has a population of not less than ten thousand ; or (b) in any area within the distance, measured aerially,- (I) not being more than two kilometres, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of more than ten thousand but not exceeding one lakh; or (II) not being more than six kilometres, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of more than one lakh but not exceeding ten lakh; or (III) not being more than eight kilometres, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of more than ten lakh. Explanation.-For the purposes of this sub-clause, "population" means the population according to the last preceding census of which the relevant figures have been published before the first day of the previous year; 11. As is evident, agricultural and situated within the ....
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....l to understand how this measurement can be treated as authentic. In our view, authority keeping records of land is the correct authority to issue certificate, and therefore, measurement certificate submitted by the assessee is also rejected. 15. Now since, there is no basis before us for determining the distance for the land sold by the assessee, the issue, we find, need reconsideration, and therefore the same is restored back to the AO to obtain necessary distance certificate from the appropriate authority, and thereafter adjudicate the issue in accordance with law. The assesses claim of exemption u/s 54B of the Act, is also restored back to be dealt with thereafter. The ground no.1 to 3 raised by the assessee, therefore, are allowed for statistical purpose. As also, the ground no.1 raised by the Revenue is also allowed for statistical purpose. 16. In the result, the appeal of the assessee is allowed for statistical purpose. 17. Now we shall deal with the remaining grounds of appeal of the Revenue. 18. The ground no.2 raised by the Revenue is as under: "(2) The Id. CIT(A) has erred in deleting the additions made u/s 68 of Rs. 64,85,000/- + Rs. 2,63,00,0....
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....was filed but bank statement was not submitted. As regard to Smt. Kamrunisa Ansari, the AO has noted that identity, genuineness and creditworthiness not proved. As regard to Shri BharatbhaiBharwad, AO has observed that copy of bank statement, return of income has not been filed. As regard to Shri Rakesh B. Shah, the AO has observed that bank account has not been furnished. Appellant has submitted that he has furnished copy of confirmation which clearly shows that there was a opening balance against which the amount has been received during the year, and therefore, addition cannot be made. I agree with the submission made by the appellant that credit in the bank account in respect of above persons are recovery of advance made in earlier year and receipt is by cheque, and therefore, same cannot be added u/s. 68 of the Act as held by Honourable Gujarat High Court in the case of CIT, Surat- 1 Vs. Shree Mahavir Crimpers [2018] 95 Taxman.com 323 (Guj'arat) and decision in the case of CIT Vs. Aayachi Chandrashekhar Narsangi. Therefore, the addition made by the AO to the extent of Rs. 64,85,000/- in respect of credit from above persons is deleted. 4.2.9. The appellant in respe....
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.... has been received through cheque, therefore, addition is not justified. SrNo. on page 13 and 14 of the assessment order and also SR no as per Remand Report NAME AMOUNT 01 A K Buildcon 3,11,00,000 04 Shamana Shajid Momin 11,00,000 06 S.M. PathanfS.M. Sipai) 7,50,000 07 A.M. Sipai f S.M. Sipai) 1,50,000 13 H.N. Ghoghari 5,00,000 Total 3,36,00,000 As regard to credit entry of Rs. 3,11,00,000/- from M/s. A. K.Buildcon, the appellant has submitted that M/s. A. K. Buildcon was a partnership concern of appellant and M/s. Lapis Impex Pvt. Ltd. The appellant has withdrawn fund from firm and deposited in his bank account. Appellant further explained the immediate source of fund as amount received by M/s. A. K. Buildcon from M/s. Lapis Impex Pvt. Ltd. The Assessing Officer has noted that the credit worthiness of the party from whom loan has been taken has not been proved. It is seen that appellant has submitted copy of partnership deed, copy of confirmation, copy of bank statement of M/s. A. K. Buildcon along with copy of confirmation from Lapiz Impex Pvt. Ltd., its bank statement and annual accounts of M/s. Lapis....
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....o not agree with the submission of the appellant, as Shri S. M. Sipahi has given confirmation only for Rs. 7,50,000/-. Therefore, addition made to the extent of Rs. 1,50,000/- is confirmed." 22. As is evident from the above, the ld.CIT(A) deleted the addition of Rs. 1,34,17,521/- noting that the AO had accepted the explanation of source of deposits in the bank account to the said extent. In view of the same, we hold that since the AO has accepted explanation of source with respect to the deposits of Rs. 1.34 crores, there can be no grievance of the AO. Therefore, order of the ld.CIT(A) deleting the addition of unexplained cash deposits to Rs. 1,34,17,521/- is upheld. 23. With respect to the balance cash deposited, we have noted that the ld.CIT(A) has accepted the explanation of the assessee giving detailed finding with respect to each deposits. Para 4.2.8 of his order deals with cash deposits from five parties noted therein amounting to Rs. 64.85 lakhs. The ld.CIT(A) has given a finding of fact that the amount received by the assessee from them was from the opening balance outstanding in their name which were confirmed by the said parties. 24. With respect to the partie....