2018 (12) TMI 1495 - AT - Income Tax

Stay of recovery of demand - Addition u/s 68 - Taxing capital gains claimed by the assessee as exempt u/s.10(37) and treating the deposits in bank account from consideration received on such sale as unexplained income of the assessee - stay petitions filed by the assessee - Held that - Assessee was given opportunity for cross examining Shri. S.D. Sethu. Shri. S.D. Sethu had completely denied paying any money other than C25,00,000/- on 07.01.2008 and feigned ignorance of any other transactions. That apart, lower authorities had also examined the Village Administrative Officer Shri. R. Devaraj who had stated that land was converted to saleable plots, when he conducted inspection in November, 2015. No doubt, Village Administrative Officer did say that the Revenue record reflected it to be agricultural land. However, registered sale deed showed consideration as C23,34,900/- against the claim of the assessee that he had received C1,91,50,575/-. It is difficult to accept the contention of the assessee that he had received anything more than what was mentioned in the conveyance deed. We are thus of the opinion that assessee has been unable to establish a prime facie case. Financial difficulty if any faced by the assessee is also not demonstrated. We are therefore not inclined to grant a stay sought by the assessee - stay petitions filed by the assessee are dismissed.

Summary

Issues:
1. Stay of recovery of tax and interest for assessment years 2008-09 and 2009-2010.
2. Taxing capital gains claimed as exempt under section 10(37) of the Income Tax Act, 1961.
3. Treating deposits in bank account from the sale as unexplained income.
4. Discrepancy in land classification and consideration amount in the sale deed.
5. Failure to establish a prima facie case for the stay.

Detailed Analysis:
The judgment by the Appellate Tribunal ITAT Chennai pertains to a stay petition for the recovery of tax and interest amounting to C43,77,773/- for the assessment year 2008-09 and C80,60,728/- for the assessment year 2009-2010. The demand arose due to the taxing of capital gains claimed by the assessee as exempt under section 10(37) of the Income Tax Act, 1961, and the treatment of deposits in the bank account from the sale as unexplained income. The lower authorities had deemed the land sold by the assessee as a capital asset instead of agricultural land, leading to the tax liability. The assessee claimed that the deposits in the bank account were proceeds from the sale of agricultural land to two individuals, supported by an agreement and possession transfer. However, discrepancies arose during the examination of the parties involved and the land classification, casting doubt on the authenticity of the transaction.

The Departmental Representative argued against granting the stay, highlighting the lack of substantial reasons provided by the assessee. The Tribunal reviewed the lower authorities' orders, the stay petitions, and the evidence presented by the assessee. Despite the assessee's contentions, the Tribunal found discrepancies in the claims made regarding the consideration amount received from the sale. The examination of involved parties, including the Village Administrative Officer, revealed conflicting information regarding the nature of the land and the actual consideration amount received. The Tribunal concluded that the assessee failed to establish a prima facie case, especially considering the discrepancies in the evidence presented and the lack of demonstrated financial difficulty. Consequently, the Tribunal dismissed the stay petitions filed by the assessee, denying the requested relief.

In conclusion, the Tribunal's decision was based on the assessee's inability to substantiate the claims made regarding the sale of agricultural land, the deposits in the bank account, and the overall lack of a convincing case for granting the stay of tax recovery. The judgment emphasizes the importance of providing clear and consistent evidence to support claims in tax-related matters to receive favorable outcomes in legal proceedings.