2021 (11) TMI 524 - AT - Income Tax

LTCG - assessee sold a joint property appellant of having 50% of share - case of the Revenue that in support of the claim of the appellant of having 50% of share no supporting details and/or evidences have been placed before the authorities below - HELD THAT - The explanation rendered by the Ld. AO for not been able to submit those documents before the authorities below is this that there was some family disputes particularly between the two brothers, moreso, the accountant of the assessee left the job at the asking of the assessee's brother. Whereas the documents were lying with the said accountant and thus could not be placed before the authorities below at the relevant point of time. Subsequently by the intervention of the father of the assessee the disputes were resolved and the evidences mentioned above could be obtained from the said accountant. Such plea taken by the assessee seems to be genuine and hence we admit those additional documents placed before us. Since the authorities below didn't get the chance to deal with those documents as filed before us the contentions made by the appellant in support of his claim Could not be verified. We find it just and proper to set aside the issue to the file of the Ld. AO to reconsider the matter afresh upon giving a reasonable opportunity of being heard to the assessee and upon considering the evidences as placed before us and any other evidence which the assessee may choose to file at the time of hearing of the matter. Addition of cash deposit to bank on account of unexplained unaccounted income - HELD THAT - Having regard to the facts and circumstances of the case we find that matter needs a fresh consideration by the Revenue and hence we remit the issue to the file of the Ld. AO to reconsider the same afresh upon providing an opportunity of being heard to the assessee and upon considering the evidence which the assessee may choose to file at the time of hearing of the matter. Hence, assessee's appeal is, therefore, allowed for statistical purposes.

Summary

Issues:
1. Addition of Long Term Capital Gain
2. Addition of cash deposited to bank as unexplained unaccounted income

Analysis:

Issue 1: Addition of Long Term Capital Gain
The appellant sold a joint property during the relevant year for ?2,62,00,000, with the appellant's share being one half. The Long Term Capital Gain arising from this sale was the primary issue. The appellant claimed a deduction under Section 54 of the Income Tax Act, 1961, resulting in a Long Term Capital Gain of NIL due to investment in a new residential house. However, the assessing officer (AO) determined that the appellant owned 69% of the property, not 50%, based on which the sale consideration was taken at ?1,81,00,000. The appellant failed to provide supporting details or evidence to substantiate the claim of 50% ownership, citing family disputes and the unavailability of documents previously held by the accountant. Additional documents supporting the appellant's claim were submitted during the appeal, but as the lower authorities did not have the opportunity to review them, the matter was remitted to the AO for fresh consideration, allowing the appellant a chance to present evidence and be heard.

Issue 2: Addition of Cash Deposits as Unexplained Income
The second issue revolved around the addition of cash deposits totaling ?14,36,000 to the bank as unexplained unaccounted income. The appellant argued that the cash deposits were made from cash withdrawals, but the Revenue contended that the cash flow statements did not align, questioning how cash could be withdrawn from and deposited back into the bank. The appellant's written submissions and supporting documents were not adequately considered by the Revenue. Consequently, the matter was remitted to the AO for a fresh review, emphasizing the need for proper consideration of the appellant's contentions and evidence. The decision to remit the issue was based on the need for a thorough reevaluation by the Revenue, providing the appellant with an opportunity to present additional evidence during the reconsideration process.

In conclusion, the appeal was allowed for statistical purposes in both issues, with the matters being remitted to the AO for fresh consideration, ensuring the appellant's right to be heard and present relevant evidence.