2017 (5) TMI 578 - AT - Income Tax

Unexplained deposit into bank account - availing of jewellery loan by assessee s husband on 30.04.2006 - Held that - It is appropriate to examine the issue whether the jewellary loan was directly released to assessee s husband in the form of cash or by cheque so as to deposit the same to assessee s Indian Bank account and thereupon to decide whether the jewellery loan availed by assessee s husband was actually used to deposit into assessee s account. With this observation, we remit the issue in dispute to the file of AO for fresh consideration. Advance towards sale of land at Orattukuppai by executing the Power of Attorney - Held that - The assessee made the same plea before us that sale deed was a mistake that it was a normal practice to note in such a manner in sale deed. The AO should be given a credit to the amount received from those parties. As rightly pointed out by the ld. Assessing Officer that the transaction took place on 23.03.2007 and the assessee received the amount of ₹ 5 lakhs by cash on 23.03.2007 and the amount was deposited on 28.09.06 which was prior to the receipt of money and the explanation of assessee that the same money was deposited earlier to receipt of the amount, which is impossible and impracticable. Accordingly, this ground raised by the assessee is rejected. Invoking the provisions of the section 50C - Held that - The assessee has been offered the income under the head capital gains from the assessment year 2006-07. In the assessment year under consideration 2007-08, the assessee offered only short term capital gains and the property/asset was not shown as stock-in-trade. Being so, the lower authorities rightly assessed the income of assessee under the head capital gains in the assessment year under consideration. Judicial discipline requires consistency in its proceedings, we are inclined to confirm the invoking of provisions of the section 50C of the Act in respect of sale of properties so as to compute capital gains. This ground raised by assessee stands rejected. Non allowing of expenditure incurred by the assessee as commission towards purchase and sale of land - claim was rejected on the reason that assessee has not produced requisite evidence for allowing that expenditure - Held that - We direct the AO to allow commission supported by the proper vouchers and receipts from the concerned parties. This ground is remitted to the file of AO for fresh consideration. Non consideration of agricultural income - Held that - We are inclined to direct the AO to give credit to the extent of agricultural income accepted by the AO in earlier assessment year 2006-07 after due verification. This ground is partly allowed for statistical purposes.

Issues Involved:
1. Addition of unexplained deposit into bank account.
2. Rejection of loan availed for deposit into bank account.
3. Non-acceptance of advance received for the sale of land.
4. Invocation of provisions of section 50C of the Act.
5. Disallowance of expenditure incurred as commission.
6. Non-consideration of agricultural income.

Issue 1: Addition of Unexplained Deposit into Bank Account:
The appeal concerned the confirmation of an addition of ?1,75,000 out of ?2,47,000 deposited into the assessee's bank account. The Tribunal remitted the issue to the AO for fresh consideration, questioning whether the jewellary loan was used to deposit into the account. The Tribunal found it necessary to determine if the loan was directly released to the husband in cash or by cheque for deposit into the account.

Issue 2: Rejection of Loan Availed for Deposit into Bank Account:
The Tribunal remitted this issue to the AO for further investigation. The appeal revolved around the non-acceptance of a loan availed by the husband for depositing ?4 lakhs into the bank account. The Tribunal directed the AO to inquire into the jewel loan availed by the husband to deposit into the assessee's account.

Issue 3: Non-acceptance of Advance Received for Sale of Land:
The dispute involved the rejection of ?4 lakhs received as an advance for the sale of land. The Tribunal upheld the AO's decision, emphasizing that the transaction took place after the deposit date, hence rejecting the claim that the money was received earlier. The Tribunal found the explanation implausible and rejected the ground raised by the assessee.

Issue 4: Invocation of Provisions of Section 50C of the Act:
The issue pertained to the invocation of section 50C of the Act concerning capital gains. The Tribunal affirmed the lower authorities' decision to assess the income under capital gains, given the assessee's previous reporting. The Tribunal rejected the assessee's argument and upheld the application of section 50C for computing capital gains.

Issue 5: Disallowance of Expenditure Incurred as Commission:
The Tribunal directed the AO to allow the commission expenditure of ?2,15,000 supported by proper vouchers and receipts. The claim was remitted to the AO for fresh consideration due to the lack of evidence produced by the assessee initially.

Issue 6: Non-consideration of Agricultural Income:
The Tribunal partially allowed this ground, directing the AO to credit the agricultural income accepted in the earlier assessment year after verification. The Tribunal found merit in the evidence provided regarding the agricultural activities, partially allowing the appeal for statistical purposes.

In conclusion, the Tribunal partly allowed the appeal of the assessee for statistical purposes, remitted certain issues to the AO for fresh consideration, and dismissed the cross-appeals related to penalty under section 271(1)(c) of the Act.

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