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2015 (7) TMI 154 - AT - Income TaxDenial of claim of capital gains computed by the Assessee - capital gain on sale of property - applicability of section 50C - Held that - It is a fact that assessee had entered into an agreement for sale in 1990 to sell the property for ₹ 3,50,000/- and pursuant to the agreement Assessee was paid only 50,000/- on 17.05.1993. It is also a fact that the possession of the property was handed over by the Assessee on the receipt of earnest money of ₹ 50,000/-. The agreement for sale and Banakat which has been entered into by the Assessee have been placed on record and have not been disputed by the Department. Before us, Revenue has not brought any material on record to demonstrate that the possession of the property was handed over by the Assessee in the year under consideration and not in the year 1990, being the year in which the Assessee had entered into a Banakat. We further find that Section 50C, being the special provision for the purpose of calculation of capital gains in certain cases, was inserted by Finance Act, 2002 with effect from 01.04.2003 and was therefore not applicable to the year when the Assessee had entered into the Banakat. We further find in the case of Chaturbhuj Dwarakadas Kapadja vs. CIT (2003 (2) TMI 62 - BOMBAY High Court) has held that the capital gains would be taxable in the year in which the transactions are entered into even if the transfer of immovable property is not effective or complete under the general law. Before us, Revenue has not brought any material on record to controvert the submissions made by ld. A.R. nor has brought any contrary binding decision in its support. We are therefore of the view that in the present case the provisions of Section 50C could not be applied. We therefore direct the deletion of addition made by A.O. - Decided in favour of assessee Addition on account of unaccounted investment - Held that - With respect to addition of ₹ 88,050/- on account of interest, we find that Assessee has not placed any material on record to controvert the findings of ld. CIT(A) and therefore to that extent we find no reason to interfere with the order of ld. CIT(A). With respect to the addition on account of remaining amount of 15,85,179/- (Rs. 16,73,229/- less ₹ 88,050/-) is concerned, we find that in the absence of any submission of details by the Assessee before A.O, he considered the aggregate of amounts appearing in the credit side of the bank account with ICICI Bank as unexplained investment. Before us, Assessee has placed on record the copy of the bank statement which shows that various amounts have been debited and credited under auto-sweep and revese-sweep . We further find that there is no finding with respect to the auto-sweep and reverse-sweep by both the authorities. We therefore restore the issue back to the file of A.O to re-work the amount of addition after considering the explanation of the Assessee with respect to autosweep and reverse-sweep and in accordance with law. The Assessee is also directed to co-operate by furnishing the necessary evidence as called for by A.O. - Decided partly in favour of assessee for statistical purposes. Addition on account of agricultural income - Held that - As before A.O, Assessee had furnished the copy of 7/12 extract and Form 8A and from the land Assessee has stated to have earned agricultural income. The holding of agricultural land by the Assessee has not been doubted by the Revenue. Before us, Revenue has also not placed any material on record to substantiate that Assessee could not have earned any agricultural income from the land held by him. Considering the aforesaid and considering the holding of agricultural land and the smallness of amount of agricultural income, we are of the view that no addition is called for in the present case. Decided in favour of assessee.
Issues Involved:
1. Taxation of capital gains under Section 50C of the Income Tax Act. 2. Addition of unaccounted investment. 3. Addition of undisclosed interest income. 4. Addition of agricultural income. 5. Interest charged under Section 234-B of the Income Tax Act. Detailed Analysis: 1. Taxation of Capital Gains under Section 50C: The Assessee sold a property and computed a capital loss, but the Assessing Officer (A.O) recalculated it as a capital gain using Section 50C, which assesses property value based on stamp duty valuation. The A.O noted discrepancies in the Assessee's documentation and valuation methods. The Commissioner of Income Tax (Appeals) [CIT(A)] upheld the A.O's decision, stating the sale deed was executed in 2008, and thus, the transfer occurred then, not in 1991 as claimed by the Assessee. The Tribunal found that the property transfer occurred in 1991 based on the agreement and possession transfer, and Section 50C, effective from 2003, was not applicable. Thus, the addition by the A.O was deleted, allowing the Assessee's ground. 2. Addition of Unaccounted Investment: The A.O added Rs. 16,73,229 as unaccounted investment, including Rs. 88,050 interest income, from an ICICI Bank account, which the Assessee claimed belonged to an HUF. The A.O rejected this claim, noting the account was in the Assessee's and his wife's names, using the Assessee's PAN. The CIT(A) upheld the A.O's decision but directed verification of certain deposits. The Tribunal upheld the addition of Rs. 88,050 interest income but remanded the issue of other deposits back to the A.O for re-evaluation, considering the Assessee's explanation of "auto-sweep" and "reverse-sweep" entries. 3. Addition of Undisclosed Interest Income: The A.O added Rs. 88,050 as undisclosed interest income from the ICICI Bank account, which the Assessee claimed was declared in the HUF's return. The CIT(A) upheld the A.O's decision, stating the account was in the Assessee's individual capacity. The Tribunal found no reason to interfere with this finding, confirming the addition. 4. Addition of Agricultural Income: The A.O included Rs. 8,000 as taxable income, rejecting the Assessee's claim of it being agricultural income due to lack of evidence. The CIT(A) upheld this, stating 7/12 and Form 8A did not prove the sale of agricultural produce. The Tribunal, considering the Assessee's holding of agricultural land and the small amount involved, directed the deletion of this addition. 5. Interest Charged under Section 234-B: The Tribunal did not provide a separate analysis for this ground, implying it was not contested independently or required no further adjudication beyond the decisions on the substantive grounds. Conclusion: The Tribunal allowed the Assessee's appeal partly for statistical purposes, directing deletions and remands for re-evaluation on specific grounds, while upholding certain additions by the A.O and CIT(A). The judgment emphasized proper documentation and substantiation of claims by the Assessee and the applicability of legal provisions based on the timing of transactions.
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