2022 (5) TMI 1032 - AT - Income Tax

Addition on account of alleged short-term capital gain - AO called upon assessee as to why stamp value adopted by the Stamp Valuation Authority should not be applied - DR contended that the AO was justified in computing the capital gain as transfer of property was completed and all conditions for taxability of STCG was satisfied - HELD THAT - From the finding of Ld.CIT(A), it is clear that value assessed by the DVO was not accepted on account of the fact that DVO had adopted the sale instance of Narela which could not be applied to the sale instance at Wazirpur for assessing the fair market value of the property. The assessee has not brought any material rebutting the finding of Ld.CIT(A) on record. The assessee chose not to appear before the Tribunal despite various opportunities were provided to him. It is incumbent upon the assessee to prove true and correct fair market value of the property. Merely, stating that there was dispute would not be sufficient to accept the value declared by the assessee. The assessee has not furnished any Settlement Deed or award by the Arbitral Award regarding sale consideration of property. Therefore, in the absence of the relevant evidences, the finding of the authorities below remained unrebutted. Thus, Ground No.1 raised by the assessee is dismissed. Unexplained unsecured loan - no confirmation and copy of income tax return was filed - HELD THAT - We find that the AO had noticed that various discrepancies in respect of claim of unsecured loans received from the various parties by the assessee. Even before this Tribunal, the assessee has grossly failed to substantiate his claim and negligently did not appear before the Tribunal despite having given various opportunities. The assessee was required to prove identity of creditors, genuineness of transaction and creditworthiness of creditors. The assessee grossly failed to do so. Therefore, in the absence of the supporting evidences regarding claim of unsecured loans, we do not see any infirmity in the finding of authorities below. Thus, Ground No.2 raised by the assessee is dismissed.

Summary

Issues:
1. Addition of alleged short-term capital gain
2. Addition of unsecured loans
3. Confirmation of additions made by Assessing Officer

Issue 1: Addition of Alleged Short-Term Capital Gain
The case involved an appeal against the addition of Rs. 93,50,014 as short-term capital gain by the Assessing Officer. The appellant had sold a property in two parts, and the AO computed the capital gain based on discrepancies in the sale consideration and circle rates. The CIT(A) upheld the addition, stating that the transfer was complete, and the appellant failed to disclose the capital gain. The Valuation Officer's report was not accepted due to using inappropriate sale instances. The appellant did not provide evidence to rebut the findings, leading to the dismissal of Ground No.1.

Issue 2: Addition of Unsecured Loans
The second issue pertained to the addition of Rs. 74,00,000 as unexplained unsecured loans. The AO noted discrepancies in the details provided by the appellant regarding the loans received. Despite opportunities, the appellant failed to substantiate the claims before the Tribunal, resulting in the dismissal of Ground No.2. The appellant was required to prove the identity, genuineness, and creditworthiness of the creditors, which was not done adequately.

Issue 3: Confirmation of Additions
The third issue addressed the general challenge against the confirmation of additions made by the Assessing Officer. The Tribunal dismissed this ground as it required no separate adjudication, affirming the decisions of the lower authorities. The appellant's failure to provide necessary evidence and attend hearings led to the dismissal of the appeal, upholding the additions made by the authorities.

In conclusion, the Tribunal upheld the additions of short-term capital gain and unsecured loans, dismissing the appeal due to the appellant's lack of substantiating evidence and non-appearance during proceedings. The judgment emphasized the importance of providing supporting documentation and attending hearings to substantiate claims and challenge additions made by the tax authorities.