2020 (6) TMI 192 - AT - Income Tax

Nature of land sold - Short-term capital gain on the sale of immovable property - land in dispute is the agricultural land within the meaning of section 2(14)(iii) OR not - whether AO should have referred the matter to the DVO to determine the market value as he found difference in the sale price viz a viz the value determined for the purpose of Stamp duty? - HELD THAT - We find that the assessee was just general Power of Attorney holder with respect to the lands in dispute. This fact has not been disputed by the authorities below. As such there was no documentary evidence available before the authorities below suggesting that the assessee has received consideration against the transfer of such lands. CIT (A) has given very clear finding that the impugned lands were not transferred. The learned DR has not brought anything on record contrary to the finding of the learned CIT (A). In such a situation we have no alternate except to confirm the finding of the learned CIT (A). Hence the ground of appeal raised by the Revenue is dismissed. Unexplained cash credit under section 68 - CIT-A deleted the addition - HELD THAT - We find that the amount received by the assessee as discussed above represents the sale consideration of the shares transferred by her to the parties aforesaid. The learned AR in support of his contention has filed the confirmation, shares transfer certificates and share purchase agreement along with the ledgers. DR has not brought anything on record contrary to the finding of the learned CIT (A). In such a situation we have no alternate except to confirm the finding of the learned CIT (A). Hence the ground of appeal raised by the Revenue is dismissed. Addition u/s 68 - CIT (A) was pleased to delete the addition made by the AO by observing that the assessee has discharged his onus by furnishing the necessary details as specified under section 68 - HELD THAT - Admittedly the assessee has discharged its onus by furnishing the necessary details such as a copy of PAN, passport, bank details, etc. in support of identity of the parties. There is also no dispute that all the transactions were carried out through the banking channel. Therefore, we are conscious of the fact that the assessee has discharged onus regarding the genuineness of the transactions. See ROHINI BUILDERS. 2001 (3) TMI 9 - GUJARAT HIGH COURT Coming to the 3rd condition, i.e. creditworthiness of the parties, regarding this we note that the assessee claimed to have refunded part of the amount through banking channel to the aforesaid parties as discussed above. The repayment of the loan amount by the assessee was duly accepted by the Revenue. Therefore,there remains no doubt that the transactions of the advance received by the assessee from the parties were genuine - See ROHINI BUILDERS. 2001 (3) TMI 9 - GUJARAT HIGH COURT We also note that the assessee has furnished the source of the money received from the parties which was used for the purpose of investment in Yuva Sports Academy Pvt. Ltd. Once the assessee is able to prove that the money received by it was returned in the subsequent assessment year in the account of the party, then there remains no doubt that the loan and advances received by the assessee were not unexplained cash credit. Assessee furnished the sufficient documentary pieces of evidence including the details of the income of the parties which has been elaborated in the preceding paragraph. Therefore in our considered view, the assessee has discharged its onus imposed under section 68 - Decided in favour of assessee. Addition treating the agriculture income as income from other sources - HELD THAT - Onus lies on the assessee to furnish the documentary evidence such as sales bills of the agriculture produce but he failed to do so. However in the present facts of the case we note that the assessee has been showing the agriculture income consistently which have been accepted by the revenue. Even the contention of the assessee that the inspector of Income Tax Department has also confirmed the fact of existence of the mango trees since 2007 which has not been doubted by the AO. Thus after considering the facts in totality and there being no adverse record brought by the learned DR contrary to the finding of the learned CIT (A), we do not find any reason to interfere in the order. Hence the ground of appeal of the Revenue is dismissed. Order being pronounced after ninety (90) days of hearing - COVID-19 pandemic and lockdown - HELD THAT - Taking note of the extraordinary situation in the light of the COVID-19 pandemic and lockdown, the period of lockdown days need to be excluded. See case of DCIT vs. JSW Limited 2020 (5) TMI 359 - ITAT MUMBAI

Summary

Issues Involved:
1. Deletion of addition on account of short-term capital gain on sale of immovable property.
2. Deletion of addition on account of unexplained cash credit under section 68 of the Income Tax Act, 1961 (?23,72,127).
3. Deletion of addition on account of unexplained cash credit under section 68 of the Income Tax Act, 1961 (?15,64,00,000).
4. Deletion of addition by treating agricultural income as income from other sources.
5. Admission of additional evidence by the CIT(A) without waiting for the remand report from the AO.

Issue-wise Detailed Analysis:

1. Deletion of Addition on Account of Short-Term Capital Gain on Sale of Immovable Property:
The assessee, holding a general power of attorney for certain lands, claimed the sale of these lands for ?17 lakhs, while the AO determined the stamp value at ?24,78,571 and invoked section 50C of the Income Tax Act. The AO added ?15,78,571 as short-term capital gain, assuming the cost of the land at ?8,50,000. The CIT(A) deleted this addition, noting that the sale deed was canceled, the land remained with the original owners, and the AO failed to refer the matter to the DVO. The Tribunal confirmed the CIT(A)'s finding, as there was no evidence of consideration received by the assessee and the lands were not transferred.

2. Deletion of Addition on Account of Unexplained Cash Credit (?23,72,127):
The assessee claimed to have received a loan of ?23,72,127 from certain individuals but failed to furnish complete details initially. Upon appeal, the assessee provided supporting documents, including PAN, bank statements, and income tax returns of the lenders. The CIT(A) deleted the addition, acknowledging the provided evidence. The Tribunal upheld this decision, as the assessee had substantiated the loan with credible documentation, and the DR could not refute the CIT(A)'s findings.

3. Deletion of Addition on Account of Unexplained Cash Credit (?15,64,00,000):
The assessee invested ?15,64,00,000 in Yuva Sports Academy, claiming the funds were received from various companies. The AO added this amount as unexplained cash credit, doubting the business activities of the lending companies. The CIT(A) deleted the addition, noting that the assessee provided confirmations, PAN details, and bank statements of the lenders. The Tribunal confirmed this decision, emphasizing that the assessee discharged the onus of proving the identity, genuineness, and creditworthiness of the lenders. The Tribunal cited relevant case laws supporting the assessee's position that the source of the source need not be explained.

4. Deletion of Addition by Treating Agricultural Income as Income from Other Sources:
The assessee declared agricultural income of ?25,70,000 but failed to provide detailed sales bills. The AO treated this as income from other sources. The CIT(A) deleted the addition, referencing the acceptance of similar income in previous years. The Tribunal upheld this decision, noting the consistent declaration of agricultural income by the assessee and the lack of contrary evidence from the DR.

5. Admission of Additional Evidence by the CIT(A) Without Waiting for the Remand Report:
The Revenue contended that the CIT(A) admitted additional evidence without waiting for the AO's remand report. The Tribunal found that the CIT(A) had referred to the additional evidence and considered the remand report dated 30 January 2017. The Tribunal dismissed this ground, as the DR did not provide evidence that the CIT(A) bypassed procedural requirements.

Conclusion:
The Tribunal dismissed the Revenue's appeal, affirming the CIT(A)'s deletion of additions related to short-term capital gain, unexplained cash credits, and agricultural income, and upheld the admission of additional evidence. The Tribunal's decision was influenced by the assessee's provision of substantial documentary evidence and the consistent acceptance of similar claims in previous years. The Tribunal also acknowledged the procedural adherence by the CIT(A) in considering the remand report.