2016 (5) TMI 847 - AT - Income Tax

Deduction u/s. 54B - Held that - The assessee had merely created his right in the land by entering into an agreement for purchase with M/s. Saldol Industries and obtained power of attorney dated 06-06-2005 in his name. In the balance sheet as on 31-03-2007 the above mentioned land is shown as M/s. Saldol Industries (Advance paid). At the time of sale on 15-02-2008 the assessee transferred the land to the purchaser to M/s. MTC Business Pvt. Ltd. on the basis of the power of attorney. Thus, the intention of the assessee was never to retain the land and use it for agricultural purposes. The ld. Counsel has not been able to rebut the aforesaid findings of the authorities below. Since, there is no sale of any capital asset, there is no question of allowing deduction u/s. 54B of the Act to the assessee. - Decided against assesseegr33222112 Addition u/s 68 - Held that - The assessee has not been able to explain the amount. Neither the assessee was able to prove the identity of the creditors/lenders nor their creditworthiness. The onus was on the assessee to prove the genuineness, identity and the creditworthiness of the transactions and the creditors. Except for furnishing the name and address of the persons no further details were given by assessee. Thus, the assessee was not able to discharge his onus. The ld. Counsel for the assessee has not been able to controvert the well reasoned and detailed findings of the Commissioner of Income Tax (Appeals) in rejecting the claim of the assessee - Decided against assessee

Summary

Issues: Delay in filing appeal, Nature of income from sale of land, Addition of unexplained cash credit

Delay in filing appeal:
The appeal was filed with a delay of 137 days, attributed to the illness of the brother of the assessee who handled accounts and tax matters. Medical records were submitted in support of the delay, and it was found to be caused by medical exigencies. The delay was condoned, and the appeal was admitted for hearing.

Nature of income from sale of land:
The assessee, engaged in transport, warehousing, and land dealings, sold land to M/s. MTC Business Pvt. Ltd., earning a profit of ?1,15,00,000 in the relevant period. The Assessing Officer treated this profit as business income, along with an addition of ?21,75,499 as unexplained cash credit under section 68 of the Act. The assessee contended that the land sold was agricultural and not a capital asset, thus not liable for capital gains tax. Additionally, even if considered a capital asset, the sale proceeds were reinvested in agricultural land, making the assessee eligible for deduction under section 54B.

Addition of unexplained cash credit:
The Assessing Officer made an addition under section 68 as unexplained cash credit, which the assessee failed to explain adequately. The onus was on the assessee to prove the genuineness, identity, and creditworthiness of the transactions and creditors, which was not discharged. The authorities upheld this addition, as the assessee could not provide sufficient details to support their claim.

In the final decision, the Tribunal dismissed the appeal, upholding the findings of the authorities below. The Commissioner of Income Tax (Appeals) had detailed reasons for rejecting the assessee's claims, which were not substantiated by the assessee during the proceedings. The Tribunal found no infirmity in the impugned order and upheld the decision to dismiss the appeal, resulting in the appeal of the assessee being dismissed.