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2019 (4) TMI 961 - AT - Income TaxDeduction u/s 54F - claim of deduction on the basis of full value of consideration actually or stamp value u/s 50C - HELD THAT - The ld. CIT(A) has correctly held that the assessee is entitled for deduction U/s 54F in respect of full value of consideration received and not the value taken by the Sub-Registrar for the purposes of stamp duty. The issue is squarely covered by the decision of the Hon ble Delhi High court in the case of CIT Vs. Nilofar Singh 2008 (8) TMI 165 - DELHI HIGH COURT , which has been followed by the ITAT Jaipur Bench in the case of Nand Lal Sharma Vs. ITO 2015 (6) TMI 482 - ITAT JAIPUR and also in the case of Gyan Chand Batra 2010 (8) TMI 528 - ITAT JAIPUR Unexplained credits - HELD THAT - A categorical finding has been recorded by the CIT(A) after considering the remand report, to the effect that the assessee has received a cheque of ₹ 55.00 lacs from M/s Megha Colonizers which was deposited in his bank account maintained with OBC bank on 16/3/2007. The confirmation of M/s Megha Colonizers was also filed before the lower authorities. Accordingly, there is no infirmity in the order of the CIT(A) in deleting the addition of ₹ 55.00 lacs. Similarly with regard to ₹ 11.00 lacs, the CIT(A) found that the assessee has received a cheque from his brother Shri Satya Narain which is duly verifiable from the bank statement of Shri Satya Narain who has issued cheque to the assessee on 24/3/2007. The assessee has also filed confirmation from his brother Shri Satya Narain. Detailed findings so recorded by the CIT(A) with regard to receipt of ₹ 11.00 lacs by the assessee from his brother through account payee cheque and confirmation have been filed by the brother has not been controverted by the DR by bringing any positive material on record. Accordingly, we do not find any infirmity or illegality in the impugned order of the CIT(A) in deleting the addition of ₹ 11.00 lacs. Since the additions have been deleted by the CIT(A) after giving proper opportunity to the A.O. and calling a remand report, there is no contravention of Rule 46A of the IT Rules. The total addition of ₹ 66.00 lacs (55,00,000/- 11,00,000/-) so deleted by the CIT(A) are correct. Reopening of assessment - no service of notice u/s 143(2) - HELD THAT - following the reasoning in 2019 (4) TMI 825 - ITAT JAIPUR , we do not find any merit in the assessment so framed without issue of notice u/s 143(2) of the Act. Accordingly, the assessment order so passed is liable to annulled ab-initio as the same has been passed without issue of notice U/s 143(2).
Issues Involved:
1. Computation of Long Term Capital Gain and eligibility for deduction under Section 54F. 2. Addition on account of unexplained bank deposits. 3. Validity of assessment order without issuance of notice under Section 143(2). 4. Classification of land as capital assets versus agricultural land. 5. Deduction under Section 54B for purchase of agricultural land. 6. Treatment of cash deposits as undisclosed income. Detailed Analysis: 1. Computation of Long Term Capital Gain and Eligibility for Deduction under Section 54F: The primary issue was whether the deduction under Section 54F should be based on the actual sale consideration received by the assessee or the value assessed by the Sub-Registrar for stamp duty purposes. The assessee sold agricultural land and reinvested the proceeds in purchasing a residential house. The Assessing Officer (AO) restricted the deduction under Section 54F to the value taken by the Sub-Registrar for stamp duty purposes. However, the CIT(A) directed the AO to allow the deduction based on the actual sale consideration received. The Tribunal upheld the CIT(A)'s decision, referencing the Delhi High Court's decision in CIT Vs. Nilofar Singh and other ITAT Jaipur Bench decisions, affirming that the deduction should be on the actual amount received. 2. Addition on Account of Unexplained Bank Deposits: The AO added ?81.00 lacs to the assessee's income due to unexplained credits in the bank account. The CIT(A) deleted ?66.00 lacs of this addition after considering additional evidence and a remand report. The Tribunal found that the assessee satisfactorily explained the source of ?55.00 lacs as an advance from M/s. Megha Colonisers and ?11.00 lacs as a repayment from the assessee's brother, both supported by bank statements and confirmations. The Tribunal upheld the CIT(A)'s deletion of these additions, finding no infirmity in the order. 3. Validity of Assessment Order without Issuance of Notice under Section 143(2): The assessee contended that the assessment order was invalid as no notice under Section 143(2) was issued after the assessee filed a return in response to a notice under Section 148. The Tribunal noted that despite multiple opportunities, the department failed to provide evidence of the issuance of such notice. Citing several judicial precedents, including ACIT v/s Hotel Blue Moon and CIT v/s Salarpur Cold Storage, the Tribunal held that the failure to issue a notice under Section 143(2) rendered the assessment proceedings invalid. Consequently, the Tribunal annulled the assessment order. 4. Classification of Land as Capital Assets versus Agricultural Land: The assessee argued that the lands sold were agricultural lands and not capital assets, thus not subject to capital gains tax. However, since the Tribunal annulled the assessment due to the lack of a notice under Section 143(2), it did not delve into the merits of this argument. 5. Deduction under Section 54B for Purchase of Agricultural Land: The assessee claimed a deduction under Section 54B for purchasing agricultural land. The CIT(A) sustained the AO's action of not allowing this deduction. However, this issue was not addressed by the Tribunal due to the annulment of the assessment order. 6. Treatment of Cash Deposits as Undisclosed Income: The AO treated ?15.00 lacs deposited in the bank as undisclosed income. The CIT(A) enhanced this amount to ?16.50 lacs by modifying the opening cash balance. The Tribunal did not address this issue on merits due to the annulment of the assessment order. Conclusion: The Tribunal dismissed the revenue's appeal and allowed the assessee's cross-objection, annulling the assessment order due to the absence of a notice under Section 143(2). The detailed findings on the unexplained bank deposits were upheld, affirming the CIT(A)'s deletion of the additions. The issues regarding the classification of land and deductions under Sections 54B and 54F were rendered moot by the annulment of the assessment.
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