2019 (2) TMI 1655 - AT - Income Tax

Bogus short term capital gains - assessee did not submit any registered deed document having registered the gift in his name - assessee has not disclosed the receipt of the gift in the original return of income filed and later on claimed a loss on sale of shares in the return of income filed in response to the notice u/s 148 and moreover the assessee has not filed any submitted any registered deed document of the gift either before the AO or before the CIT(A) - HELD THAT - Assessee has not disclosed the receipt of the gift in the original return of income filed and later on claimed a loss of .1.5 crores on sale of shares in the return of income filed in response to the notice u/s 148 and moreover the assessee has not filed any submitted any registered deed document of the gift either before the AO or before the CIT(A) which means the assessee has not owned the said gift donated by his daughter Smt. Meera Arun. Assessee has not produced any consent and signature of the donor for transferring the said gift by way of sale to third person. Thus it is amply clear that the provisions of section 49 do not apply in the case in hand because the said provision envisages only where the capital asset became the property of the assessee then the cost of acquisition of the asset will have to be reckoned on the basis of cost of acquisition to the previous owner and otherwise no. Since the assessee has not furnished any evidence either before the AO or before the CIT(A) or even before the Tribunal that the assessee held the gift by way of any registered deed document. Moreover donor Smt. Meera Arun did not have sufficient source for cash during the assessment year 2009-10 to invest such huge cash in 3, 00, 000 equity shares which shows that the entire transaction appears to be bogus. - Decided in favour of revenue. Agricultural income as well as the deduction claimed by the assessee under Chapter VI-A - HELD THAT - For Agricultural income assessee has not furnished any documentary evidence like quantum of land cultivation details of crops cultivation Chitta/Adangal purchase of seeds sales voucher etc. the Assessing Officer disallowed the same and treated as income from other sources and brought to tax. Similarly with regard to the claim of deduction under Chapter VI-A the assessee has not furnished any documentary evidence. On appeal for claim of agricultural income by considering the extracts of revenue records such as Chitta/Adangal etc. issued by the Govt. authorities as well as considering the proof of payment of LIP housing loan repayment etc. for the claim of deduction under Chapter VI-A CIT(A) directed the AO to accept the claim of agricultural income as well as the claim of deduction under Chapter VI-A. Since the CIT(A) has not obtained any remand report on the fresh/additional evidences furnished by the assessee from the AO we remit the matters back to the file of the AO to decide both the issues afresh after considering the documentary evidences as may be filed by the assessee. - Appeal of Revenue allowed for statistical purposes.

Summary

Issues Involved:
1. Addition on account of short term capital gains
2. Allowance of deduction claimed under Chapter VI-A
3. Acceptance of claim of agricultural income by additional evidences

Analysis:

Issue 1: Addition on account of short term capital gains
The case involved the assessee selling shares received as a gift, which were not declared as capital gains in the original return of income. The Assessing Officer reopened the assessment under section 147 of the Income Tax Act, noting discrepancies in the gift transaction and lack of sufficient evidence. The Commissioner of Income Tax (Appeals) directed the Assessing Officer to modify the computation based on the cost of acquisition to the previous owner, ruling in favor of the assessee. The Revenue appealed, arguing the transaction was bogus due to lack of disclosure and evidence. The Tribunal found that the assessee failed to prove ownership of the gift or provide necessary documentation, leading to the decision to set aside the CIT(A)'s order and restore that of the Assessing Officer.

Issue 2: Allowance of deduction claimed under Chapter VI-A
The Revenue contested the allowance of agricultural income and deduction under Chapter VI-A by the CIT(A) based on lack of documentary evidence provided by the assessee. The Tribunal noted the absence of sufficient proof such as land cultivation details or payment records. The CIT(A's decision was remitted back to the Assessing Officer for reconsideration after obtaining and reviewing the additional evidences submitted by the assessee. The grounds raised by the Revenue were allowed for statistical purposes, indicating a partial success in the appeal.

Issue 3: Acceptance of claim of agricultural income by additional evidences
The Tribunal directed a reassessment of the allowance of agricultural income and deduction under Chapter VI-A, emphasizing the importance of documentary evidence in supporting these claims. The case was remitted to the Assessing Officer for a fresh decision based on the new evidences provided by the assessee. The Tribunal partially allowed the Revenue's appeal for statistical purposes, indicating a procedural victory rather than a substantive change in the decision.

In conclusion, the judgment addressed the issues of short term capital gains, deduction claims under Chapter VI-A, and acceptance of agricultural income based on the evidence presented. The decision highlighted the significance of providing proper documentation to support income and deduction claims, emphasizing the need for transparency and compliance with tax regulations.