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2022 (2) TMI 268 - AT - Income TaxAdditional evidences admitted by the ld. CIT(A) - Additional evidences were admitted by the ld. CIT(A) in contravention to Rule 46An of the Income Tax Rules - HELD THAT - We find that the additional evidences were filed before the ld. CIT(A). All these evidences were forwarded to the ld. AO and remand report was called for. Ld. DR has himself submitted the copy of remand report dated 07.01.2015 wherein for each of the issues raised before the ld. CIT(A) remand report has been furnished. We, therefore, find no merit in this ground raised by the revenue and the same is dismissed. Undisclosed investment - amount pertains to purchase consideration paid by partnership firm M/s Anil Enterprises for purchase of land and all the payments have been made through account payee cheque - HELD THAT - On perusal of the purchase deed we find that this purchase was made by a partnership firm M/s. Anil Enterprises and in the purchase deed name of two partners are mentioned namely Shri Satish Chandra Gupta and assessee Shri Rajkumar Shanbhudayal Agrawal. Though the PAN No. of both the partners is mentioned but the documents clearly shows that purchase has been made in the name of M/s Anil Enterprises. Before us Ld. DR failed to controvert this fact. We, therefore, find no inconsistency in the finding of Ld. CIT(A) deleting the impugned addition by observing that the alleged sum is a purchase consideration paid by separate entity to purchase immovable property in its name for which no addition was called for in the hands of assessee. Accordingly, ground no.2 raised by the revenue stands dismissed. Undisclosed investment in the purchase of agricultural land in the hands of assessee - HELD THAT - There was transaction of purchase of agricultural land by three persons. Assessee is one of the co-owners and he has paid the purchase consideration by cheque and the source of this investment is though banking channel in the bank account placed on record supporting this fact. We, therefore, find no reason to interfere in the finding of Ld. CIT(A) giving relief . We, thus dismiss revenue s ground. Addition towards registry expenses - CIT - A deleted the addition - HELD THAT - CIT(A) was justified in deleting the addition since it pertains to the purchase of land by a separate entity i.e. partnership firm M/s Anil Enterprises and similarly for the remaining sum also the addition is rightly deleted as the assessee is only 1/3rd owner of the agricultural land purchased and the sum is a total amount of expenses of which assessee s shar and the source of this amount has been duly explained by the assessee which is from the business of JCB and others. Income is disclosed in the return of income. We, therefore, find no reason to interfere in the finding of Ld. CIT(A). Ground no.4 of the revenue s appeal stands dismissed. Transaction of sale of agricultural land purchased by the assessee - HELD THAT - We find that agricultural land purchased in the co-ownership of three persons including the assessee was sold during the year. Assessee is liable to pay tax only on his share of income. CIT(A) gave a relief observing that this amount has already been taxed in the return of income. Out of the balance amount Ld. CIT(A) confirmed the addition of ₹ 2,50,110/- in the hands of assessee. We note that assessee had already offered Short Term Capital Gain of ₹ 9,00,000/- in its return of income being 1/3rd share of the property sold during the year. Ld. CIT(A) has rightly confirmed the addition of ₹ 2,50,110/- in the hands of assessee. Ld. DR did not raise any objection to this contention that ₹ 9,00,000/- has been offered by the assessee in the return of income. We, therefore, find no inconsistency in the finding of Ld. CIT(A) and accordingly confirm the same. Thus ground no.5 raised by the revenue is dismissed. Addition of cash deposited in bank Account - HELD THAT - We find that submission made by the assessee contained certain mistakes and the submission in itself are not sufficient enough to explain the source of cash deposit in bank. In the submission firstly it is stated that JCB machine was sold to Shri Ram Singh for consideration of ₹ 11,00,000/-. Thereafter during the proceedings before Ld. CIT(A) assessee has claimed to have filed a sale letter towards sale of JCB machine against a consideration of ₹ 16,00,000/-. Both submission of the assessee are contradictory. The instant appeal relates to A.Y. 2011-12 and almost 10 years have passed since then. We, therefore, under the given facts and circumstances of the case and to put an end to the litigation, being fair to both the parties and in the interest of justice, are of the considered view that against the alleged cash deposit of ₹ 18,00,000/-, we accept the source of alleged cash deposit to the extent of ₹ 11,00,000/- as explained towards the sale consideration received in cash from sale of JCB machine and ₹ 3,00,000/- being accumulated cash saving from earning of JCB machine and other income and accordingly hold that the assessee has successfully explained the source of cash to the extent of ₹ 14,00,000/- as against the addition made at ₹ 18,00,000/- and therefore addition of ₹ 4,00,000/- is sustained in the hands of assessee. - Decided partly in favour of assessee.
Issues Involved:
1. Admission of additional evidence by CIT(A) under Rule 46A. 2. Deletion of addition of ?4,75,38,000/- for undisclosed investment in property. 3. Deletion of addition of ?94,00,000/- for undisclosed investment in agricultural land. 4. Deletion of addition of ?54,79,800/- for registry expenses. 5. Deletion of addition of ?14,00,223/- out of ?16,50,000/- on account of capital gain. 6. Deletion of addition of ?18,00,000/- for unexplained cash deposits. Issue-wise Detailed Analysis: 1. Admission of Additional Evidence by CIT(A) under Rule 46A: The revenue contended that CIT(A) erred in admitting additional evidence without following Rule 46A. The Tribunal found that the additional evidence was forwarded to the Assessing Officer (AO) and a remand report was called for. The remand report dated 07.01.2015 addressed each issue raised. Therefore, the Tribunal dismissed this ground, finding no merit in the revenue's contention. 2. Deletion of Addition of ?4,75,38,000/- for Undisclosed Investment in Property: The assessee argued that the amount pertained to the purchase consideration paid by the partnership firm M/s Anil Enterprises, and all payments were made through account payee cheques. The CIT(A) found that the property was purchased by the firm, not the individual assessee. The purchase deed and partnership deed confirmed this. The Tribunal upheld the CIT(A)'s finding, noting that the purchase was made in the name of M/s Anil Enterprises, and the addition was wrongly made in the hands of the assessee. This ground was dismissed. 3. Deletion of Addition of ?94,00,000/- for Undisclosed Investment in Agricultural Land: The AO made an addition for undisclosed investment of ?96,00,000/-. The CIT(A) found that the agricultural land was purchased by three persons, including the assessee, and the assessee's share was ?30,00,000/-. The source of investment was through banking channels. The CIT(A) restricted the addition to ?2,00,000/- for the assessee's share of stamp duty valuation. The Tribunal upheld this finding, noting that the investment was fully explained and dismissed the revenue's ground. 4. Deletion of Addition of ?54,79,800/- for Registry Expenses: The CIT(A) found that ?46,95,800/- was incurred by M/s Anil Enterprises for purchasing land, and ?7,84,000/- related to agricultural land purchased by three co-owners. The assessee's share of ?2,87,000/- was explained from business income. The Tribunal upheld the CIT(A)'s finding, noting that the expenses were related to properties purchased by the firm and co-owners, and the source of funds was explained. This ground was dismissed. 5. Deletion of Addition of ?14,00,223/- out of ?16,50,000/- on Account of Capital Gain: The AO made an addition of ?16,50,000/- for short-term capital gain. The CIT(A) found that the assessee had already offered ?9,00,000/- as capital gain in the return of income. The CIT(A) restricted the addition to ?2,50,110/- for the assessee's share. The Tribunal upheld this finding, noting that the assessee's share of income was correctly taxed, and the remaining addition was rightly deleted. This ground was dismissed. 6. Deletion of Addition of ?18,00,000/- for Unexplained Cash Deposits: The AO added ?18,00,000/- for unexplained cash deposits. The CIT(A) accepted the assessee's explanation that the cash was from the sale of a JCB machine and other income. The Tribunal found inconsistencies in the assessee's submissions but accepted the source of ?14,00,000/- (?11,00,000/- from the sale of the JCB machine and ?3,00,000/- from accumulated savings). The Tribunal sustained an addition of ?4,00,000/-. This ground was partly allowed. Conclusion: The Tribunal partly allowed the appeal of the revenue, sustaining an addition of ?4,00,000/- for unexplained cash deposits and dismissing the other grounds. The order was pronounced on 17.11.2021.
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