2013 (1) TMI 987 - AT - Income Tax

Summary

Issues Involved:
1. Legality of the order passed u/s 153C.
2. Determination and treatment of agricultural income.
3. Deduction u/s 24 for house property rental income.
4. Addition based on cash transactions and entries in books.
5. Treatment of income from truck operations u/s 44AE.
6. Calculation of long-term capital gains and application of section 112.
7. Acceptance of opening cash balance.
8. Credit for TDS and pre-paid taxes.

Summary of Judgment:

1. Legality of the order passed u/s 153C:
The assessee challenged the action u/s 153C, arguing that documents were impounded u/s 133A, making the action without jurisdiction. The Tribunal found no merit in this contention, stating that such a mistake is covered by section 292B, and dismissed the legal ground.

2. Determination and treatment of agricultural income:
The assessee claimed agricultural income, which was treated as income from other sources by the Assessing Officer. The Tribunal directed the Assessing Officer to allow agricultural income at Rs. 6,000 per bigha and compute the agricultural income accordingly, considering additional evidence filed before CIT(A).

3. Deduction u/s 24 for house property rental income:
The assessee's claim for deduction u/s 24 was initially rejected. The Tribunal restored the issue to the Assessing Officer for fresh consideration, directing to verify additional evidence and compute the rental income accordingly.

4. Addition based on cash transactions and entries in books:
For A.Y. 2007-08, an addition of Rs. 50,21,800 was made based on cash transactions. The Tribunal found that the amount received and paid cannot both be treated as income. It directed the Assessing Officer to restrict the addition to Rs. 16,02,200.

5. Treatment of income from truck operations u/s 44AE:
The assessee claimed income from truck operations u/s 44AE, which was rejected by the Assessing Officer. The Tribunal noted that the assessee was not the truck owner but hired trucks, thus section 44AE was not applicable. However, it directed the Assessing Officer to apply a NP rate of 5.5% instead of 8%.

6. Calculation of long-term capital gains and application of section 112:
The assessee's calculation of long-term capital gains was based on a fair market value of Rs. 100 per sq.ft. as on 1.4.1981, which was disputed by the Assessing Officer. The Tribunal found the assessee's valuation justified and deleted the addition. It also directed that the tax rate of 20% u/s 112 be applied.

7. Acceptance of opening cash balance:
The Assessing Officer's addition of Rs. 5,00,000 as unexplained opening cash balance was contested. The Tribunal found that the assessee could have such a balance considering his income sources and directed the deletion of the addition.

8. Credit for TDS and pre-paid taxes:
The Tribunal directed the Assessing Officer to give credit for TDS and pre-paid taxes against the tax payable after verifying the factual position.

Conclusion:
The appeals of the assessee were allowed in part, with directions for fresh consideration and verification of evidence by the Assessing Officer on various issues. The appeals of the Revenue were dismissed.