2023 (10) TMI 550 - AT - Income Tax

Unexplained investment in purchase of land on protective basis - substantive addition relating to present assessee has been deleted in the case of Shri Ku.Pa. Krishnan. 2023 (10) TMI 448 - ITAT CHENNAI - AO has made impugned addition by rejecting the claim of agricultural income - HELD THAT - Upon perusal of certificate of Village Administrative Officer as placed on record, it could be seen that the assessee is having sufficient cultivable land. The same is also backed up by Adangal, lease copies which support the claim of the assessee that it had land holding giving rise to agricultural income. Therefore, the claim of the assessee qua earning of agricultural income was to be accepted in all the years. AO is directed to treat the income as agricultural income only. Addition of undisclosed investment in land in at Vadagaunchi , investment in House Property situated at Trichy, investment in flat situated at Adyar - As the undisputed position that emerges is that the assessee has disclosed the above investment in her return of income which has been filed much before the date of search in the case of Shri Ku.Pa. Krishnan. These investments are duly disclosed in the Balance Sheet. Therefore, the impugned additions, in that respect, is not sustainable. We order so. Investment in property situated at Trichy AR, in the written submissions, has submitted that the cost of improvement on assessee s land was only to the extent of Rs. 10.16 Lacs and therefore, the impugned addition was to be restricted to that extent. Accepting the same, we direct Ld. AO to reduce the impugned addition to the extent of Rs. 10.16 Lacs as against Rs. 11.59 Lacs. Income from house property - AR submitted that the house property situated at Nehru Nagar was self-occupied property and therefore, no income need to be computed against the same. With respect to other properties situated at Fernhill (Kodaikanal) and Banker s Colony is concerned, Ld. AR has submitted that the estimation of rental income is on the higher side. We concur with the submissions that no income on property situated at Nehru Nagar need to be computed this being self-occupied property. However, the estimation of rental income against other two properties is quite reasonable. Therefore, the addition to that extent, in all the years, is sustained. The corresponding grounds, in all the years, stand disposed off accordingly. Gifts as been received by the assessee. However, the assessee is unable to file any details of the same. Therefore, this addition, in both the years, stand confirmed. Addition of FDR and interest thereon from AYs 1994-95 to 1997-98 stand confirmed since this addition has been deleted by us in the case of Shri Ku.Pa. Krishnan.

Summary

Issues involved:
The issues involved in the judgment include confirmation of addition of unexplained investment in purchase of land on protective basis, treatment of agricultural income as income from other sources, and addition of undisclosed investments in various properties on protective basis.

Confirmation of addition of unexplained investment in purchase of land:
The appeals by the assessee for captioned assessment years had identical issues arising from a common order passed by the Commissioner of Income Tax (Appeals). The grievance of the assessee was the confirmation of certain addition of unexplained investment in the purchase of land on a protective basis. The Tribunal found that the claim of the assessee regarding earning of agricultural income was supported by evidence such as a certificate from the Village Administrative Officer and lease copies, and directed the Assessing Officer to treat the income as agricultural income only.

Treatment of agricultural income as income from other sources:
The Tribunal noted that the assessee had sufficient cultivable land supported by relevant documents, and therefore, the claim of the assessee regarding agricultural income was accepted for all the years. The Assessing Officer was directed to treat the income as agricultural income only.

Addition of undisclosed investments in various properties:
The Tribunal found that certain investments made by the assessee were duly disclosed in the Balance Sheet filed before the search in the case of another individual. Therefore, the additions made on a protective basis in relation to these investments were deemed unsustainable. The Tribunal also directed the Assessing Officer to reduce certain additions based on submissions made by the assessee regarding the cost of improvements on the land. Additionally, the Tribunal upheld the addition of rental income from certain properties while dismissing the claim for self-occupied property. The Tribunal confirmed the addition of gifts received by the assessee in certain assessment years where details were not provided, as well as the addition of Fixed Deposit Receipts and interest income thereon.

Final Decision:
The Tribunal partly allowed all the appeals, with specific directions given to the Assessing Officer regarding the treatment of agricultural income, undisclosed investments, rental income, and other additions made on protective basis. The order was pronounced on 27th September, 2023.