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Issues involved: Cross appeals by assessee and department against the order of ld. CIT (A) for assessment year 2007-08.
Ground No. 4 - Unexplained Gift: The AO added Rs. 55,00,000/- as unexplained gift received by the assessee from his NRI brother. The AO found discrepancies in the certificate provided by the brother, leading to the gift being treated as non-genuine under section 68. The ld. CIT (A) upheld the AO's decision. The assessee presented evidence including a statement from the brother, bank statements, and drafts to prove the genuineness of the gift. The Tribunal found that the gift was received through proper banking channels, and the details provided were sufficient to establish the genuineness of the transaction. Relying on various case laws, the Tribunal held that the gift was genuine and deleted the addition of Rs. 55,00,000/-. Remaining Grounds in Assessee's Appeal: - Addition of Rs. 2,00,000/- on account of difference in sale consideration: The AO added Rs. 9,94,149/- due to variations in sale values determined by the Sub Registrar. The ld. CIT (A) found that provisions of section 50C did not apply as the assessee sold a business asset, not a capital asset. The Tribunal agreed, deleting the addition of Rs. 2,00,000/-. - Interest charge: The AO was directed to provide consequential relief to the assessee. Grounds in Department's Appeal: - Addition of Rs. 41,948/- for diesel shortage: The AO restricted the wastage of diesel based on previous year's claim. The ld. CIT (A) deleted the addition, citing a similar decision in the earlier year. - Addition of Rs. 58,725/- for commission/brokerage income: The AO estimated income higher than declared, but the ld. CIT (A) deleted the addition following a previous decision. The Tribunal confirmed the ld. CIT (A)'s order. - Disallowance of Rs. 42,882/- out of construction expenses: The AO disallowed 50% of expenses, which the ld. CIT (A) reduced to 20%. The Tribunal found the reduction reasonable and confirmed the ld. CIT (A)'s decision. - Addition of Rs. 61,490/- for low household expenses: The ld. CIT (A) upheld the decision of the previous year, and the Tribunal confirmed this decision. In conclusion, the appeal of the assessee was allowed in part, while the appeal of the department was dismissed. The Tribunal's order was pronounced on 19.01.2012.
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