2016 (12) TMI 1419 - AT - Income Tax

Computation of the capital gain - sisters share of the sale proceeds - absence of primary supporting fact - Held that - The legal position as understood in law is that in the absence of primary supporting fact the affidavit cannot be said to be an evidence of a fact. It can be used as an evidence only by permission of the Court for sufficient reasons wherein the right of the opposite party to have deponent produced for cross-examination is protected. Thus, facts which are capable of being demonstrated by evidence cannot be generally concluded by way of filing affidavits. In the facts of the present case, find that critical facts and documents relevant for deciding the issue have neither been examined nor even been produced or directed to be produced for examination in reference to the bare affidavits filed by the assessee. As find that there is no discussion on the contents of affidavits whatsoever. Thus any conclusion without ascertaining the correctness of the affidavits is not permissible. It is further seen considering the doubts of the tax authorities that whether the specific piece of land was ancestral land which devolved on the assessee and his sisters by way of inheritance is a basic fact which too is not coming out from the record. It is noted that the AO has given a finding that from the bank statement of the assessee the payments to the sisters of their share is not reflected. In the circumstances it is deemed appropriate to address these obvious and patent shortcomings and thus restore the issue back to the AO for addressing the facts and the affidavits of the sisters on record. Accordingly after hearing the Ld.Sr.DR and considering the peculiar facts and circumstances of the case on the basis of material on record, the issue for the reasons given herein above is restored back to the file of the AO with a direction to pass a speaking order in accordance with law after giving the assessee a reasonable opportunity of being heard. - Decided in favour of assessee statistical purposes.

Summary

Issues involved:
1. Correctness of order dated 28.04.2015 of CIT(A), Rohtak pertaining to 2007-08 assessment year.
2. Whether sale proceeds of sisters share of land were wrongly sustained in the hands of the assessee.

Detailed Analysis:
Issue 1:
The present appeal challenges the order of CIT(A) related to the 2007-08 assessment year. The grounds raised in the appeal were considered repetitive and argumentative. The grievance posed was regarding the sale proceeds of the sisters' share of land being sustained in the hands of the assessee. The assessee did not appear, and the hearing proceeded ex-parte. The AO rejected the claim of the assessee as no evidence of payment to sisters was found. An addition of ?14,51,987 was made to the income of the assessee as capital gain.

Issue 2:
The assessee argued before CIT(A) that a specific piece of land was sold for ?39,56,250, supported by a copy of Jamabandi. The claim for the value of ?20,31,000 for calculating capital gains was accepted, but the claim of sisters' share of ?15,20,492 was rejected. The Ld. Sr.DR argued that conventionally daughters do not have rights in ancestral property, and no outflow of money towards sisters was found in the assessee's bank accounts. The ITAT found that no Sale Deed was filed, and the nature of the land sold was not discussed. The law grants daughters equal inheritance rights in ancestral property. The sisters' share proceeds were claimed to be paid to them, supported by affidavits. However, affidavits alone cannot be conclusive evidence without primary supporting facts. Critical facts and documents were not examined. The issue was restored back to the AO for a speaking order.

In conclusion, the appeal of the assessee was allowed for statistical purposes, and the matter was remanded back to the AO for further examination based on the legal and factual considerations discussed in the judgment.