2015 (3) TMI 186 - AT - Income Tax

Exemption u/s 54B disallowed - Held that - The contention of the Assessing Officer is that the assessee failed to produce the evidence indicating the user of the land. On the other hand the assessee has submitted copy of the Revenue record maintained by the Revenue Officers of the State Govt. On due consideration of the remand report vis- -vis the evidence submitted by the assessee, we are of the view that the learned Assessing Officer failed to make an analytical investigation on this issue.The learned Assessing Officer ought to have collected revenue record from the Revenue Officer, which could indicate the status of land in the past. Therefore, we are of the view that ends of justice would meet, if we set aside this issue to the file of the Assessing Officer for fresh inquiry. - Decided in favour of assessee for statical purposes. Addition u/s 69 - unexplained investment in the purchase of land - Held that - cording to the assessee, M/s Exora Business Park (P) Ltd had paid a sum of ₹ 32,41,981/- vide cheque dated 24.04.2007. The contention of the assessee is that this concern is the power of attorney holder of the assessee. The assessee raised this plea before the learned CIT (A). In the remand proceedings, the learned Assessing Officer had written a letter to this concern and sought its explanation. The letter was returned back with the Postal Departmental remark no such office on this address . Thus the Assessing Officer did not accept the contention of the assessee. The assessee has sought to file copy of the cheque which was received from this concern. On an analysis of the evidence produced before us, we are of the view that it is to be investigated as to why this concern has paid this much of amount to the assessee. A complete investigation is required on this issue. - Decided in favour of assessee for statical purposes.

Summary

Issues:
1. Disallowance of exemption u/s 54B of the I.T. Act, 1961
2. Addition u/s 69 of the I.T. Act on account of unexplained investment in the purchase of land

Analysis:

Issue 1: Disallowance of exemption u/s 54B of the I.T. Act
The appellant contested the disallowance of exemption u/s 54B due to the Assessing Officer's observation that the land acquired was not used for agricultural purposes as required by the section. The appellant provided copies of Revenue records and a certificate indicating the land's agricultural nature. The Assessing Officer's failure to conduct a thorough investigation was noted. The Tribunal referred to tests laid down by the courts to determine agricultural land status. As the Assessing Officer did not adequately examine the issue, the Tribunal set it aside for fresh inquiry.

Issue 2: Addition u/s 69 of the I.T. Act
Regarding the addition u/s 69 for unexplained investment, the appellant claimed the amount received was compensation from a concern. However, the Assessing Officer did not accept this explanation due to insufficient evidence. The Tribunal found a need for further investigation into the source of the amount paid by the concern and the chain of circumstances. The Tribunal criticized the negligent conduct of the Assessing Officer and directed a re-investigation and re-adjudication of the issue to gather complete information. The appellant was granted the opportunity to present additional evidence or explanations. The Tribunal allowed the appeal for statistical purposes.

In conclusion, the Tribunal set aside both issues for fresh inquiry and re-investigation, emphasizing the importance of thorough examination and collection of complete information by the Assessing Officer. The appellant was granted the opportunity to present further evidence in defense. The appeal was allowed for statistical purposes.