2015 (9) TMI 491 - AT - Income Tax

Unaccounted investments in purchase of properties - purchase price of the property invested in item No.2. - Held that - Sale consideration shown at transaction mentioned at Sl No 2 of ₹ 8,92,000/- is the total of the transactions mentioned at Sl No.2 of ₹ 8.92,000/- is the total of the transactions mentioned at Sl.Nos.1 & 3 (i.e.Rs 6,90,000 ₹ 2,02,000). Thus, there is a duplication of the amounts considered by the Assessing Officer in his order to the extent of ₹ 3,90,000/- (i e ₹ 1,90,000 ₹ 2,00,000) shown in the transaction mentioned at Sl No. 1, which finally culminated in the transaction mentioned at Sl No 2. Therefore the unexplained investments in the properties computed by the Assessing Officer are excess by ₹ 3,90,000/- which needs to be deleted. The issue has been considered by the Ld. CIT (A) in detail and an amount of ₹ 3,90,000/-is deleted. Before me, no further materials were produced in order to justify the claim of the assessee. - Decided against assessee. Non-consideration of the opening cash balance - assessee has claimed an amount of ₹ 2,88,000/- as the opening cash available with him for making the investment rejected by AO - Held that - We do not subscribe to view of the Revenue. Any individual will definitely have some accumulated amount with him especially when such individuals are in business earning income year after year. Considering the financial status of the assessee, the amount claimed by the assessee appears to be reasonable. Therefore, hereby direct the Revenue to treat ₹ 2,88,000/- as the genuine source available with him for making the investments and the same should not be treated as undisclosed income.- Decided in favour of assessee. Agricultural income - assessee has claimed ₹ 2,50,000/- as his agricultural income from the extent of 6.73 acres agricultural land in Tuticorin District, which was available with him for making the investments - CIT (A) accepted ₹ 1,50,000/- and disallowed the balance - Held that - The claim of the assessee appears to be reasonable because on an acre of land agricultural income of ₹ 30,000 to ₹ 40,000 per annum can be rationally estimated.- Decided in favour of assessee.

Summary

Issues involved:
1. Treatment of unaccounted investments in purchase of properties.
2. Treatment of loan repayment as unaccounted.
3. Fixing agricultural income at a lower amount than claimed.

Detailed Analysis:
1. Treatment of unaccounted investments in purchase of properties:
The Assessee appealed against the order of the Commissioner of Income Tax (A) regarding the addition made under "unaccounted investments in purchase of properties." The Assessee argued that the entire investment was explained with a cash flow statement, and none of it should be considered unexplained. The Tribunal focused on the purchase price of properties invested, specifically item No.2. The Assessing Officer considered an amount of Rs. 9,37,000 as unexplained for property purchases. However, the CIT (A) deleted Rs. 3,90,000 after finding a duplication in the assessment. The Tribunal confirmed the deletion of Rs. 3,90,000, as no new evidence was presented to support the Assessee's claim for further relief.

2. Treatment of loan repayment as unaccounted:
The Assessee contested the treatment of loan repayment as unaccounted by the Assessing Officer, which was confirmed by the CIT (A). However, the Tribunal did not address this specific issue in the judgment provided.

3. Fixing agricultural income at a lower amount:
The Assessee claimed agricultural income of Rs. 2,50,000 from 6.73 acres of land but the CIT (A) allowed only Rs. 1,50,000. The Tribunal considered the reasonableness of the Assessee's claim, estimating agricultural income per acre to be Rs. 30,000 to Rs. 40,000 annually. Consequently, the Tribunal allowed this issue in favor of the Assessee, accepting the higher claimed amount. Overall, the appeal was partly allowed by the Tribunal, with specific relief granted on the issues of unaccounted investments and agricultural income.

This detailed analysis of the judgment highlights the key arguments, findings, and decisions made by the Tribunal on each issue raised by the Assessee in their appeal.