2017 (1) TMI 182 - AT - Income Tax

Claim preferred u/s. 54B - appellant assessee had purchased the agriculture lands before sale of agriculture land on which capital gain arised - Held that - The assessee had sold the agricultural land on 04.11.2010 and as per the provisions of section 54B of the Act, the investment has to be made within period of two years after the date of sale. Since the assessee had purchased the new agricultural land on 16.07.2010 and on 30.09.2010, there is no merit in the claim of assessee for deduction under section 54B of the Act. Another point which was raised by the assessee was that the investment for purchase of new land out of advance received against the sale of agricultural land. First of all, the investment made is in violation of provisions of section 54B of the Act and secondly, despite opportunity being allowed to the assessee, the assessee has not appeared nor filed translated copies of Marathi documents of sale deed nor has furnished any other evidence to prove its case. In view thereof, there is no merit in the claim of assessee and the same is rejected. - Decided against assessee Un-reconciled purchases vis- -vis TCS Certificate - Held that - The assessee had agreed that there was difference in purchase figure and had also accepted adoption of GP addition on the said purchases. However, the assessee offered 10% on the said unreconciled purchases for which, the assessee has not given any basis. The Assessing Officer and CIT(A) have applied the GP rate declared by the assessee to be the basis for computing addition in the hands of assessee vis- vis un-reconciled purchases. There is no merit in the plea of assessee in the absence of any evidence and in view thereof, the addition is upheld. - Decided against assessee

Summary

Issues:
1. Rejection of claim under section 54B for purchase of agriculture lands before sale of original asset.
2. Denial of deduction under section 54B due to investments made prior to sale transaction.
3. Addition of gross profit on un-reconciled purchases of wine.

Issue 1:
The appeal involved the rejection of the claim under section 54B by the Assessing Officer (AO) and CIT(A) for purchasing agriculture lands before the sale of the original asset. The appellant argued that the investments were made from earnest money received before the sale. However, the CIT(A) rejected this argument due to lack of evidence such as bank statements or purchase/sale deeds. The appellant requested the ITAT Pune to set aside the assessment order for a fresh review by the AO.

Issue 2:
Regarding the denial of deduction under section 54B due to investments made before the sale transaction, the appellant cited a previous ITAT Pune case supporting investments made out of advance money before the sale date. The CIT(A) dismissed this argument due to the absence of supporting documents and evidence during the assessment proceedings. The ITAT Pune upheld the CIT(A)'s decision, emphasizing the lack of substantiating evidence from the appellant.

Issue 3:
The addition of gross profit on un-reconciled purchases of wine was disputed by the appellant, who claimed an agreed 10% addition. However, the AO and CIT(A) applied the gross profit rate declared by the appellant for the addition. The ITAT Pune upheld this decision, stating that the appellant failed to provide any basis or evidence for the 10% addition on unreconciled purchases, leading to the dismissal of the appellant's appeal.

In conclusion, the ITAT Pune dismissed the appellant's appeal, upholding the decisions of the lower authorities regarding the rejection of deduction under section 54B and the addition of gross profit on un-reconciled purchases of wine. The appellant's failure to provide necessary evidence and documentation led to the dismissal of their claims.