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TMI Blog2012 (9) TMI 836X X X X Extracts X X X X X X X X Extracts X X X X ..... done on the basis of rate adopted u/s 50C whereas from the facts of the case it emerges that assessee along with his brothers had sold whole land to the company, then how assessee had shown in his return a single piece of land measuring 100.64 sq. yds. The findings of AO and CIT(A) are contradictory in nature. Therefore, we are of the view that the whole issue should be examined by AO afresh -Appeals filed by the assessee as well as by revenue are allowed for statistical purposes. - I.T.A. No.2480 /Del/2010 - - - Dated:- 27-7-2012 - SHRI I.C. SUDHIR AND T.S. KAPOOR, JJ. Assessee by : Shri O.P. Sapra, Advocate. Department by : Dr. BRR Kumar, Sr. DR. ORDER PER TS KAPOOR, AM: These are cross appeals filed by the assessee as well as revenue against the order of Ld CIT(A) dated 30.4.2010. The grounds of appeals taken by the assessee and by the revenue are as under:- I.T.A. No. 2480/Del/2010: (Assessee s appeal): 1. That no justification subsisted to make an addition on account of alleged excess cash and therefore, the addition of Rs. 1,05,000/- as maintained by the- Ld. CIT(A) is arbitrary, unjust and at any rate, without prejudice, very exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hether in the facts and circumstances of the case, the CIT (A) has erred in deleting the addition of Rs.5,96,536/- made by the Assessing Officer on account of bogus advance liability without appreciating the information received by the Assessing Officer under sec. 133(6) from the record of Messrs Tawari Colonizers Pvt. Ltd., and material brought on record by the Assessing Officer. 3. Whether in the facts and circumstances of the case, the CIT (A) has erred in reducing the addition from Rs.12,04,523/- to Rs. 2,42,000/- added by the Assessing Officer on account of liability shown by Messrs Tawri Colonizers Pvt. Ltd. and not declared as receivable by the assessee in his statement of affairs without appreciating the facts brought out on record by the Assessing Officer. 4. In the facts and circumstances of the case, the order of the Commissioner of Income Tax (Appeals) may be set aside and that of the Assessing Officer restored. 2. The brief facts of the case are that the assessee filed his return of income on 7.12.2005 showing income at Rs..98,265/- and agricultural income of Rs..1,05,000/-. The case was selected for scrutiny and assessee was served notice u/s 143(2) of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Rs..3,39,218/-. In view of the facts that assessee did not file any evidence in this respect, he added back the amount to the income of assessee. 4. The Assessing Officer further noted that during the assessment year the assessee had sold land and assessee had claimed long term loss of Rs..7850/-. The Assessing Officer observed that assessee along with his four other brothers had received a total of Rs..10,19,155/-vide three agreements for sale of 596.66 sq.yd. land. The share of the assessee being 20%. the portion attributable to assessee came to Rs..2,03,831/-. The Assessing Officer noted that instead of Rs..2,03,831/-, the assessee had shown Rs..45,288/- as sale consideration in the capital gain chart. When confronted, the AR of assessee filed a notarized agreement dated 4.7.1998 in which the assessee has agreed to sell land to M/s Tawri Colonizers Pvt. Ltd. The Assessing Officer did not accept the validity of agreement and held the view that provisions of section 50C are applicable because of the following observations:- 1. In agreement dated 4.7.1998 with M/s Tawri Colonizers Pvt. Ltd., there is no transfer of land, no registered deed was executed nor the possession of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere not shown by the assessee under the asset side of his balance sheet and therefore he added back the same as income of the assessee from undisclosed sources. 7. Aggrieved, the assessee filed appeal before Ld CIT(A) and submitted the following submissions in respect of various additions made by the Assessing Officer:- Addition of Rs..3,99,218/-: 1.That under the head cash expenses, the Ld Assessing Officer has taken drawings in cash at Rs..1,81666/- which is factually incorrect. In this respect a detailed chart of Rs..1,81,666/- as filed before Ld Assessing Officer was filed with Ld CIT(A). 2. That out of Rs..1,81,666/-, Rs..1,11,400/- is the amount which was debited to Capital Account as the same was wrongly credited in the same capital account as the amount received out of insurance claim from ICICI Bank. Thus this amount of Rs..1,11,400/- do not involve an element of income of the assessee. 3. Further out of balance of Rs..70,266/- (Rs..1,81,666/- - Rs..1,11,400/- expenses of Rs..23,935/- were incurred through cheques and only the expenses of Rs..46,331/- is the amount which was incurred in cash and which should have been considered in cash flow statement. 4. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee never had any opportunity to explain the same 12.That the Ld Assessing Officer has not brought any material on record to prove that assessee has made both the expenses of Rs..1,81,666/- and repayment of car ,loan of Rs..2,38,709/- in cash. Thus the cash flow statement as prepared by ld Assessing Officer cannot be relied upon. 13.That the assessee has prepared/reconstructed the correct cash flow statement on the lines on which the ld Assessing Officer has prepared and the same deserves to be accepted under Rule 46A of the IT Rules, 1962 as the assessee was prevented by sufficient and reasonable cause from producing/filing the same before the Ld Assessing Officer. In view of the above, the Ld AR pleaded that addition of Rs..3,99,.218/- deserves to be deleted. 8. The Ld CIT(A) after hearing the submissions observed that the Assessing Officer had attempted to compile cash transaction and arrived at a short fall of Rs..3,99,218/-without confronting him and seeking any explanation from him. The Ld CIT(A) held that reconstructed cash flow statement along with supplementary details in support of the above receipts and payments are admitted in terms of Rule 46A beca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taken in its account by the purchaser company M/s Tawri Colonizers Pvt. Ltd. and the total sales has been assessed in the hands of the said company during the year under consideration i.e. assessment year 2005-06. The assessment was done u/s 143(3) of the Act. 6. For calculation of capital gains, the Assessing Officer has taken sale consideration of fully developed small piece of plot of a posh colony and on the other hand for indexed cost of acquisition, the Ld Assessing Officer is taking value as on 1.4.1981 of jungle/agricultural land. Thus both the values have no comparison and on this basis the capital gain cannot be calculated. The Ld Assessing Officer while applying the said circle rate as on 1.4.1981 did not offer any opportunity to the assessee to controvert the same. 7. That the provisions of section 50C are not applicable in this case as the same are not applicable with retrospective effect as here in this case the assessee had already entered into an agreement to sell his land on 4.7.1998 for Rs..450/- per sq. yd. 8. That the copies of all the three registered sale deeds of total sale of Rs..10,19,851/- as considered by the Ld Assessing Officer for calculating the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m capital loss was claimed. It is also important to note that even the discrepancy between the land area of 100.66 sq. yd. declared in the return of income vis-a-vis 19.33. sq.yd. being appellant s 20% share as per the three sale deeds executed during the relevant previous year has not been explained by the appellant before me despite having been allowed ample opportunity and the admission of addition of evidence. 4. That the appellant has not been able to demonstrate through documentary evidence whether the land sold in question was out of total land area of 53561.75 sq. yd. covered by the agreement dated 4.7.1998 or were some other plots of land was sold during the year. 11 . Aggrieved both assessee and revenue has filed separate appeals against the order of Ld CIT(A). Ld AR argued that despite filing of affidavit by wife of assessee regarding advance of Rs..1,05,000/- Ld CIT(A) has not considered it. He further argued that long term capital gain calculated by Assessing Officer is excessive in the hands of assessee as the land was already sold during the year 1998 and therefore provisions of section 50C were not applicable. Similarly he argued that additions made by Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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