TaxTMI 
TaxTMI 
2023 (12) TMI 1127
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....ce received against agreement to sell of an ancestral joint agricultural land as sale consideration without transfer of possession of land in the year under consideration." 2. Facts, in brief, are that case was reopened for assessment on the basis that the assessee had deposited cash amounting to Rs. 37,70,000/- in his bank account maintained with Syndicate Bank during F.Y. 2013-14 relevant to A.Y. 2014-15. Before the assessing authority it was stated that the assessee had received sale proceedings of land amounting to Rs. 37,70,000/-. The AO added back the amount and thus assessed income at Rs. 39,66,360/-. Aggrieved against this the assessee preferred appeal before the learned CIT(Appeals), who dismissed the appeal. Aggrieved the asses....
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....ition is without the authority of the law. 2. Ld. The Commissioner of Income Tax (Appeals) was appraised of the definition of the term "transfer" of section 2(47) of the Income Tax Act in detail along with detailed provisions of Section 53A of the Transfer of Property Act which governs Sale/Transfer of Immovable Property. Various case laws were also cited. However, LD. The Commissioner of Income Tax (Appeals) did not record anything for not considering applicability of such cases and the provisions of the Two Act, as stated above, which categorically explains that the subject transaction was merely a transaction of advance and not a transaction of sale/transfer of immovable property, in his order and thus misdirected himself in con....
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....wherein it was held that taxing authorities were entitled to look to surrounding circumstances to find out the reality or otherwise of transaction. However, Ld. Assessing Office totally failed to apply test of human probabilities and check the surrounding circumstances in considering ENTIRE ADVANCE RECEIVED IN THE CURRENT YEAR against "AGREEMENT TO SELL" as Taxable Capital Gain. Ld. Assessing Office as well as Ld. The Commissioner of Income Tax (Appeals) failed to appreciate that it is beyond human probabilities in general for anyone to transfer possession of land against receipt of only about 42% value of the price fixed for the land to the buyer. No man of even ordinary prudence will transfer possession without fully get....
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.... the AO, even while making a best judgment assessment is obliged to take into account all the relevant material as are brought before him and he has gathered, and are not in dispute. Whereas, in the present case, Ld. Assessing Office proceeded to make additions without gathering any adverse material on records. That the Ld. Assessing Officer simply on the basis of suspicions, surmises and conjectures can not change the nature of transactions to suit the Income Tax Department to unnecessarily create demand of tax and is against the spirit of the law as also held in Madnani Construction.. Vs. CIT [2008] 296 ITR 45 Guwahati. Mere suspicion or thought of the Ld. Assessing Officer cannot be given more credence than the documentary evide....
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....ory of capital asset, being agricultural land. The only argument of the assessee is that the land in question was only advance and it could not be treated as sale consideration. He submitted that since no possession of land was given, therefore, there was no transfer. 6.1. Before adverting to the rival submissions, for the sake of clarity, it would be appropriate to reproduce the relevant provision of law i.e. section 2(47) of the Act, as under: "(47) transfer, in relation to a capital asset, includes,- (i) the sale, exchange or relinquishment of the asset; or (ii) the extinguishment of any rights therein"; or (iii) the compulsory acquisition thereof under any law; or (iv) in a case where the ....
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.... year 2012-13, it is being considered separately. 6. Since, no clear explanation was filed by the assessee the AO is bound to see the surrounding circumstances as supported by the following judicial pronouncements:- 1) It is also trite law that the Income Tax Authorities can apply the test of human probabilities to see whether the transactions could be considered as genuine or not. Reliance in this regard is placed on the judgment of Hon'ble Supreme Court in the case of Sumati Dayal V / s CIT 214-ITR-101. Their lordships of the Supreme Court in the case of CIT V / s Durga Parshad More, 82-ITR-540, have held that taxing authorities were entitled to look to surrounding circumstances to find out the reality or otherwise o....