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2024 (6) TMI 1273 - AT - Income TaxIssues Involved: 1. Addition of Rs. 2,53,98,000/- as capital gain. 2. Addition of Rs. 33,27,700/- as unexplained investment under section 69 of the Income Tax Act. Detailed Analysis: Ground No. 1: Addition of Rs. 2,53,98,000/- as Capital Gain 1. Background Facts: - The assessee filed a return for AY 2012-13 declaring an income of Rs. 2,87,160/-. - The case was selected for scrutiny, and the AO determined the total income at Rs. 2,90,19,565/- after making certain additions. - The assessee appealed against the additions, which were upheld by the CIT (A). 2. Assessee's Arguments: - The property belonged to HUF and was a case of partition, excluded from transfer u/s 47(i). - The property was inherited from the father and sold to family members as part of a family settlement. - The sale consideration was reinvested in properties, claiming exemption u/s 54/54F. 3. AO's Findings: - The property was received by the assessee in an individual capacity. - The sale deed was executed in the individual name and PAN of the assessee. - The AO invoked section 50C and adopted the stamp duty valuation for computation of capital gain. - Rejected the claim of exemption u/s 54/54F. 4. CIT (A)'s Decision: - Upheld the AO's order, confirming the addition of Rs. 2,53,98,000/- as capital gain. 5. Tribunal's Analysis: - The assessee executed a sale deed in favor of his brothers, receiving a consideration of Rs. 1,80,00,000/-. - The claim of partition of HUF was unproved as the partition deed only mentioned movable property. - The claim of family settlement was introduced late and was not substantiated by earlier proceedings. - The partnership law does not support the assessee's claim as the firm continued after the father's death, and the property remained in the firm's books. - The assessee's transaction was a de facto sale, attracting taxability. 6. Conclusion: - The tribunal rejected the assessee's claims and upheld the addition of Rs. 2,53,98,000/- as capital gain. Ground No. 2: Addition of Rs. 33,27,700/- as Unexplained Investment 1. Background Facts: - The AO made an addition of Rs. 33,27,700/- as unexplained cash deposits in the bank account. - The CIT (A) confirmed the AO's observation. 2. Assessee's Arguments: - The assessee submitted a cash book during the assessment proceedings, showing entries of cash inflow and outflow. - The cash book included entries of cash withdrawals from the bank and salary received from M/s Bhagirath Coach. - The assessee claimed that the sources of cash deposits were adequately explained. 3. Tribunal's Analysis: - The tribunal reviewed the cash book and found that the assessee had sufficient cash balance for the deposits. - The AO's observation that the assessee did not make any submission was incorrect. - The Ld. DR could not contradict the submissions made by the assessee. 4. Conclusion: - The tribunal found the addition unwarranted and deleted the addition of Rs. 33,27,700/-. Final Order: - The appeal was partly allowed, with the addition of Rs. 2,53,98,000/- upheld and the addition of Rs. 33,27,700/- deleted. The order was pronounced in open court on 18.01.2024.
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