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TMI Blog2012 (10) TMI 659X X X X Extracts X X X X X X X X Extracts X X X X ..... n of Rs. 2,50,000/- made on account of income from other sources without appreciating the facts that the assessee was unable to explain the source of deposit of Rs. 7,84,000/- in his bank account." 1.1 The assessee in the cross objection raised the following ground : "1. That the Ld. CIT(A)-1, Agra has erred in law and in facts in confirming addition of Rs. 5,34,000/- being unexplained deposit ignoring the cash flow statement submitted by the appellant." 2. The facts of the case are that the AO received information from AIR that the assessee has deposited Rs. 10,00,000/- in his saving bank account with Indian Overseas Bank. Proceedings u/s. 147 of the IT Act were initiated in respect of such unexplained deposits in the bank account. The AO recorded the statement of the assessee, in which it is stated that the assessee is not assessed to tax and he is a farmer/farm labourer. The assessee along with his two brothers owned 12 bighas of land. This land was sold for Rs. 70,00,000/- through the agreement, in which the assessee has 1/3rd share amounting to Rs. 24,00,000/-. The land was agricultural land and wheat, Bajra and vegetables were grown in the said land. The assessee maintaine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the municipal limit. Therefore, the assessee is liable to tax on capital gains arising on account of transfer of impugned urban agricultural land. The AO on examination of the agreement to sale entered into between the assessee and the builder, M/s. Dream Shelter Pvt. Ltd., observed that the assessee has relinquished his right in the impugned land, which amounts to transfer in terms of section 2(47) of the IT Act and hence, there was no merit in the assessee's claim that the impugned agricultural land has not been conveyed by a registered document and, as such, no sale can be deemed to have taken place. The AO also observed from the reply of the builder that the entire amount has been paid by them to the assessee and copy of their balance sheet reflects the payment made to the assessee in the form of stock-in-trade and not as advance against the purchase of land. The capital gains was accordingly worked out to Rs. 26,31,467/- and the same was taxed accordingly. 2.3 With regard to deposit of Rs. 10,00,000/- in the bank account of the assessee in cash, the assessee explained that the amount received through agreement to sale in cash by the assessee was Rs. 2,16,000/- and the amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o explained that the AO has wrongly denied the benefit of deduction to the assessee u/s. 54B and 54F of the IT Act because the assessee made investment in agricultural land on different dates on 12.12.2005 and 29.10.2005 in a sum of Rs. 16,39,500/-. Therefore, deduction should have been allowed u/s. 54B of the Act. Further, the AO has considered the advance money as sale consideration, but no benefit has been given u/s. 54B. The ld. CIT(A) also directed the AO to ascertain the present status of the acquisition of the land of assessee by the ADA. The letter dated 11.12.2009 (page 15 of first paper book) has been received from Land Acquisition Officer, Agra Development Authority stating that the impugned land was acquired on 25.08.2000. Further letter dated 01.01.2010 (page 14 of first paper book) was received from Special Land Acquisition Officer confirming that the land in question was acquired on 25.08.2000. As the matter was pending before the Hon'ble High Court, therefore, no compensation has been awarded in respect thereof. The ld. CIT(A) considering the above facts and explanations held that no capital gain arises for taxation. The ld. CIT(A) further held that without prejudic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High court is filed at page 11 of the second paper book. He has submitted that the letters issued by the ADA and Land Acquisition Officers clearly mention that the possession of the land has been taken by the ADA on 25.08.2000 and no amount of compensation has been paid to the assessee. He has, therefore, submitted that the provisions of section 2(47) of the IT Act read section 45(5) would not be attracted for the purpose of charging of capital gains. He has submitted that since agreement to sale was executed thereafter on 20.11.2004 (page 1 of first paper book) and possession was not handed over to the builder, as it was with the ADA, therefore, capital gains cannot be charged in the matter. He has submitted that the agreement to sale depends upon the de-notification of the land, for which the builder will be responsible. Therefore, agreement to sale was contingent agreement and no capital gain could be charged accordingly. He has submitted that the DVO has supported the case of the assessee for investment made in agricultural land and residential house. Therefore, the ld. CIT(A) rightly deleted the addition. As regards the addition on the unexplained deposit in the bank account, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment or the Reserve Bank of India, and the compensation or the consideration for such transfer is enhanced or further enhanced by any court, Tribunal or other authority, the capital gain shall be dealt with in the following manner, namely : (a) the capital gain computed with reference to the compensation awarded in the first instance or, as the case may be, the consideration determined or approved in the first instance by the Central Government or the Reserve Bank of India shall be chargeable as income under the head "Capital gains" of the previous year in which such compensation or part thereof, or such consideration or part thereof was first received; and (b) the amount by which the compensation or consideration is enhanced or further enhanced by the court, Tribunal or other authority shall be deemed to be income chargeable under the head "Capital gains" of the previous year in which such amount is received by the assessee; (c) where in the assessment for any year, the capital gain arising from the transfer of a capital asset is computed by taking the compensation or consideration referred to in clause (a) or, as the case may be, enhanced co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not attained finality, therefore, the provisions of section 2(47) (iii) and (v) section 45(5) would not apply in the case of the assessee. Further, the AO charged capital gains because the assessee received the amount from the builder through the agreement to sale dated 20.11.2004. The agreement to sale was executed on 20.11.2004 after the land was acquired and possession was taken by the ADA. It was mentioned in the agreement to sale that it was duty of the builder to pursue the matter for de-notification of the land in question and in case the builder fails to get it de-notified then the amount paid to the assessee would not be refunded. Thus, the possession could have been given to the builder when the land in question would be de-notified by the ADA. It was, therefore, a contingent agreement based on the happening of the events in future. Thus, there was no transfer of capital asset within the meaning of section 2(47) (v) of the IT Act. There is no transfer of possession of any immovable property in favour of the builder because the possession was already with the ADA prior to entering into the agreement to sale in question. Under section 53A of the Transfer of property Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t no evidence was produced before the authorities below that the brothers of the assessee have given these amounts to the assessee for depositing in the bank account of the assessee. No such evidence is also produced before us in support of the claim. Therefore, the ld. CIT(A) rightly decided not to give any benefit of Rs. 2,17,000/- each (total Rs. 4,34,000/-) in favour of the assessee. We, therefore, do not find any justification to interfere with the order of the ld. CIT(A) in this regard. The assessee further claimed in the cash flow statement that the opening cash in hand was Rs. 2,75,000/-, but no evidence could be furnished by the assessee in support thereof. In absence of any corroborative documentary evidence, the ld. CIT(A) merely gave benefit to the assessee for Rs. 1,75,000/-. We do not approve the finding of the ld. CIT(A) even for granting part relief to the assessee on this issue. The ld. CIT(A) specifically noted in the impugned order that no evidence has been given by the assessee in respect of availability of opening cash in hand of Rs. 2,75,000/- and further no corroborative evidence has been furnished. On the face of these findings of the ld. CIT(A), he should n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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