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2015 (1) TMI 925 - AT - Income TaxTreatment to agriculture income - shown in the return of income as income from other sources - Held that - issue was decided by CIT(A) against the assessee on two counts; first basis of the decision of CIT(A) is that the ownership of ancestral land in the hands of the parents cannot be equated with the ownership of agricultural land in the hands of the assessee and therefore, there cannot be any agricultural income in the hands of the assessee in his individual capacity. The second basis of the decision of CIT(A) is that apart from failure of the assessee to establish the ownership of the land in question, the assessee has also not brought on record any evidence for the said agricultural income by bringing on record bills of sale proceeds and expenses incurred for agricultural operations. Before us also, none of these two aspects were established by the assessee i.e. the ownership of the agricultural land in the hands of the assessee and the basis of computing agricultural income by bringing evidence on record in respect of agricultural sale proceeds and expenses incurred for carrying out agricultural activities. Under these facts, we do not find any reason to interfere in the order of CIT(A) on this issue. - Decided against assessee. Unexpalined money - collection of cheque (received by the appellant on sale of jewellery) in his bank account of the appellant/his wife - Held that - In assessment year 2005-06, we have already held that benefit should be allowed to the assessee to the extent of 100 gms. of gold jewellery as per CBDT Circular No. 1916 dated 11th May 1994 and on the same line, in the present year also, we hold that the benefit should be allowed to the assessee in respect of ownership of jewellery by his wife to the extent of entire jewellery because the same is less than 500 gms. However, the capital gain on sale of this jewellery has to be assessed and for this reason, we restore the matter back to the file of the Assessing Officer for fresh decision. The assessee has to bring evidence on record regarding cost and year of acquisition. If the assessee can establish that the said jewellery was acquired prior to 01/04/1981 then Fair Market Value as on 01.04.1981 should be accepted as cost of jewellery and thereafter indexation of benefit should be allowed to the assessee and long term capital gain, if any, should be computed. With these observations, the matter is restored to the file of the Assessing Officer. - Decided in favour of assessee for statistical purposes. Cash found in course of search - Held that - As per the assessment order in the case of Shri K. N. Singh Patel, we find that no doubt disclosure has been made of ₹ 10 crore which included ₹ 25 lac on account of cash seized but it is also seen in the same assessment order that the searches were carried out at 19 places, as listed on page No. 220 of the paper book. The name of the assessee is also appearing in that list at S.No. 13 but it is not shown to us or to any of the authorities below that how much cash was found and seized at these 19 places where searches were carried out. If the assessee could have shown that the cash found and seized were ₹ 25 lac or less then it can be accepted that the entire cash found and seized in all searches were covered in the disclosure made by Shri K. N. Singh Patel but in the absence of that, it cannot be said that all the cash found and seized in course of all these 19 searches were included in the disclosure made by Shri K. N. Singh Patel on account of cash found. Hence, we do not find any merit in this explanation of the assessee regarding the cash found and seized in the hands of the present assessee. Benefit to the extent of ₹ 65,375/- is already allowed by the authorities below because against the cash found of ₹ 8,65,365/-, addition of ₹ 8 lac only was made. Considering all these facts, we do not find any reason to interfere in the order of CIT(A) on this issue also. - Decided against assessee.
Issues Involved:
1. Validity of the issuance of warrant of authorization under section 132(1). 2. Assumption of jurisdiction under section 153A. 3. Treatment of agricultural income as "Income from Other Sources". 4. Addition of unexplained investment under section 69A. 5. Computation of capital gains on the sale of jewelry. Issue-wise Detailed Analysis: 1. Validity of the Issuance of Warrant of Authorization under Section 132(1): The assessee raised the issue that there existed no material or information to form the "requisite reason to believe" for the issuance of a warrant of authorization under section 132(1). However, this ground was not pressed by the assessee in all the appeals and was thus rejected as not pressed. 2. Assumption of Jurisdiction under Section 153A: The assessee contended that the Assessing Officer could not have assumed jurisdiction under section 153A as the initiation of proceedings was void ab-initio. This ground was also not pressed by the assessee in all the appeals and was subsequently rejected as not pressed. 3. Treatment of Agricultural Income as "Income from Other Sources": The primary issue in several appeals was the treatment of agricultural income shown by the assessee as income from other sources. The assessee claimed agricultural income, but the authorities treated it as income from other sources due to a lack of evidence supporting the claim. - Assessment Year 2003-04: The assessee claimed Rs. 30,000 as agricultural income. The CIT(A) decided against the assessee, stating that the ownership of ancestral land by the parents does not justify agricultural income in the hands of the assessee. Additionally, there was no evidence of sale proceeds or expenses incurred for agricultural operations. The Tribunal upheld this decision. - Assessment Year 2004-05: The facts were identical to the previous year, and the Tribunal upheld the decision against the assessee. - Assessment Year 2005-06: The assessee claimed Rs. 52,000 as agricultural income. The Tribunal upheld the decision against the assessee, similar to the previous years. - Assessment Year 2006-07: The assessee claimed Rs. 95,000 as agricultural income, out of which Rs. 50,000 was accepted by the Assessing Officer. The Tribunal upheld the decision, rejecting the balance claim due to the lack of supporting documents. - Assessment Year 2007-08: The assessee claimed Rs. 98,000 as agricultural income, with Rs. 50,000 accepted by the Assessing Officer. The Tribunal upheld the decision, rejecting the balance claim. - Assessment Year 2008-09: The assessee claimed Rs. 1,15,000 as agricultural income, with Rs. 50,000 accepted by the Assessing Officer. The Tribunal upheld the decision, rejecting the balance claim. - Assessment Year 2009-10: The assessee claimed Rs. 95,000 as agricultural income, with Rs. 50,000 accepted by the Assessing Officer. The Tribunal upheld the decision, rejecting the balance claim. 4. Addition of Unexplained Investment under Section 69A: In the assessment years 2005-06 and 2007-08, the issue of unexplained investment in the form of jewelry sold was raised. - Assessment Year 2005-06: The assessee sold jewelry worth Rs. 2,63,400. The CIT(A) held that the source of acquisition was not satisfactorily explained, and the addition was made under section 69A. However, the Tribunal allowed the benefit of 100 grams of gold jewelry as per CBDT Circular No. 1916, subject to computation of long-term capital gain, and restricted the addition to the balance amount. - Assessment Year 2007-08: The assessee's wife sold jewelry worth Rs. 3,43,150. The Tribunal allowed the benefit of 500 grams of gold jewelry for the wife as per CBDT Circular No. 1916, subject to computation of long-term capital gain, and restored the matter to the Assessing Officer for fresh decision. 5. Computation of Capital Gains on the Sale of Jewelry: For the assessment years 2005-06 and 2007-08, the Tribunal directed the Assessing Officer to compute the long-term capital gain on the sale of jewelry, considering the cost and year of acquisition. If the jewelry was acquired before 01/04/1981, the fair market value as of 01/04/1981 should be taken as the cost of acquisition, and indexation benefits should be allowed. Conclusion: The appeals for the assessment years 2005-06 and 2007-08 were partly allowed for statistical purposes, while the other appeals were dismissed. The Tribunal upheld the decisions of the CIT(A) regarding the treatment of agricultural income and the addition of unexplained investments under section 69A, with specific directions for the computation of capital gains on the sale of jewelry.
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