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2018 (6) TMI 1120 - AT - Income TaxUnexplained cash credit - Held that - Affidavit has been duly furnished by the assessee stating that the sum of ₹ 10 lakhs was received from the purchasers of agriculture land. Thus, in such circumstances and the interest of the justice, we feel that the AO should have verified the purchase consideration from the purchasers for determining the actual sale price of such land and after providing the opportunity of crossexamination to the assessee. Therefore, we incline to restore this issue to the file of the AO to verify the purchase consideration from the purchasers for the agricultural land - ground of appeal filed by the assessee is allowed for statistical purposes. Addition on account of interest income accrued on investment in NSC - income offered to tax - Held that - We hold that if the assessee has already offered the income on investment on receipt basis then charging the interest income on an accrual basis will lead to double addition which is contrary to the provision of law. Therefore, we are inclined to restore this issue to the file of the AO for fresh adjudication as per the provisions of law and to verify whether the assessee has offered the income on such investments on receipt basis. Thus the ground of appeal filed by the assessee is allowed for statistical purposes.
Issues involved:
1. Addition of unexplained cash credit of ?11.39 lakhs. 2. Addition of interest income accrued on investment in NSC. Issue 1: Addition of unexplained cash credit of ?11.39 lakhs The appeal was filed by the assessee against the order of the Commissioner of Income Tax(Appeals) confirming the addition of ?11.39 lakhs as unexplained cash credit. The assessee sold agricultural land for ?82 lakhs, with ?72 lakhs received through banking channels and ?10 lakhs in cash deposited in the bank. The Assessing Officer (AO) added the cash deposit as unexplained credit, stating the entire sale consideration was ?72 lakhs. The CIT(A) upheld the AO's decision, disregarding the affidavit filed by the assessee and stating the burden was on the appellant to explain the cash deposits. On appeal, the Tribunal found that the AO should have verified the purchase consideration from the buyers to determine the actual sale price of the land. The issue was restored to the AO for fresh adjudication, allowing the appeal for statistical purposes. Issue 2: Addition of interest income accrued on investment in NSC The assessee failed to declare interest income accrued on investments in NSC, FDR, and savings account in the income tax return, claiming it would be disclosed on maturity. The AO added ?60,554 as accrued interest to the total income. The CIT(A) upheld the addition, citing judicial pronouncements on accrual basis taxation. On appeal, the Tribunal noted the assessee followed a cash system of accounting and requested the matter be referred back to the AO to demonstrate the income was offered on a receipt basis. The issue was restored to the AO for fresh adjudication, allowing the appeal for statistical purposes. General Issues: - The first issue was dismissed as it did not require separate adjudication. - Grounds 4 and 5 were dismissed as they were general in nature. In conclusion, the Tribunal allowed the assessee's appeal for statistical purposes, directing the AO to reexamine both the unexplained cash credit and interest income accrued on investments issues in accordance with the provisions of the law.
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