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TMI Blog2017 (6) TMI 980X X X X Extracts X X X X X X X X Extracts X X X X ..... s claim neither before the revenue authorities nor before us. Hence, the finding that the rental income received by the assessee from the property, which was given on rent is to be treated as income from house property is sustained and this ground is dismissed. Unexplained capital gain - sale of property - difference on sale consideration - Held that:- The assessee has sold the property under consideration for the value less than the value for which he entered into agreement to sell with another person. The reason for selling lesser value and reason for cancellation was not brought on record by the assessee. Citing the above reasons, the AO brought to tax the difference amount as unexplained income. We fail to understand the logic of bringing the difference amount as unexplained income. The addition is on the difference of amount in sale consideration. If at all, AO could have increased the sale consideration to tax and calculated capital gains. However, in our opinion, only provision in the income tax to bring the difference of sale consideration is section 50C. In the given case, the value of SRO and sale consideration are matching, there is no room for the AO to bring the pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he difference of ₹ 3,36,485/- was added back to the income returned towards professional receipts by the AO. The AO also made the following other additions while passing the assessment order as below: 1. Addit ion on account of treatment of rents from karimnagar property as property income against the business income claimed by the assessee 3,25,539 2. Addit ion on account of treatment of differential sale price in respect of cancelled agreement as unexplained income. 55,00,000 3. Addit ion on account of secured loans 22,78,814 4. Addit ion on account of treatment off lat sale advances as unexplained cash credits 23,21,220 5. Disallowance of claim u/s 54F 23,75,946 3. Aggrieved by the order of AO, the assessee preferred an appeal before the CIT(A). 4. With reference to the addition of ₹ 3,36,485/- added as professional receipts, the CIT(A) observed that there is no reason to interfere with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceived is to be treated as house property income. 10. The CIT(A) observed that that the assessee is a professional and not doing real estate business to treat the house property as business asset to claim the depreciation as depreciation is allowed only when the asset is used for own business. He observed that in the present case, the assessee has let out the property and was collecting rent from various tenants and therefore the question of allowing depreciation on the property is not correct. Hence, the rental income derived from the property at Karimnagar was treated as income from House Property as per Provisions of Section 24 of the Income tax Act, 1961 and he directed the AO may examine for the earlier years whether the assessee had claimed the depreciation on the House Property income wrongly and if so to examine feasibility of initiating suitable remedial action. 11. Considered the rival submissions and perused the material facts on record. Assessee has raised the ground that income from rentsis to be treated as business income. However, AO has brought on record clearly that assessee has let out this residential property on rent. Assessee has not brought on record any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion as an afterthought. Hence, the addition made on account of unexplained income of ₹ 55,00,000/- by the AO is sustained. 14. Ld. AR submitted that assessee entered into agreement to sell the property, however, due to some dispute with the buyer the agreement was cancelled, even though, the sale price as per the cancelled agreement was more than the actual sale price. Since the market conditions of the property was different at the time of sale, AO has not considered this aspect nor he has brought on record anything to substantiate with respect to on money. AO has made this addition merely on assumptions and surmises. 15. Ld. DR submitted that assessee has cancelled earlier agreement to sell without giving proper reason and it is worth to note that the agreement to sell was cancelled within 6 months of the actual sale to other party. She submitted that the market condition was same and there is no fluctuation within 6 months. Even if there is any fluctuation, assessee has failed to bring on record. She supported the findings of AO. 16. Considered the rival submissions and perused the material facts on record. The assessee has sold the property under consideration f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te order is being passed in September, 2014, i.e. a period of almost 18 months or 1 half years. Even then the assessee has not produced factual evidence to support the cash credits even though there was an opportunity at the first appellate level. Hence, the additions made on account of unsecured loans and advance for sale of flats were confirmed by the CIT(A). 19. Considered the rival submissions and perused the material facts on record. Assessee has submitted additional evidence before us and the same is crucial to decide the issue, we admit the same. As the additional evidence is filed by the assessee for the first time before us and the AO had no occasion to examine the same, accordingly, we remit this issue to the file of the AO for examining the additional evidence and decide the issue in accordance with law after providing an opportunity of being heard to assessee. This ground is allowed for statistical purposes. 20. As regards the claim of assessee u/s 54F, The AO disallowed the claim u/s 54F on the ground that the consideration was not utilized for acquiring new asset/the assessee failed to utilize the amount of sale consideration received for purchasing new asset. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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