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TMI Blog2019 (1) TMI 682X X X X Extracts X X X X X X X X Extracts X X X X ..... ocuments on record we find merit in the submissions of the assessee that the land was purchased by the assessee with the intention to exploit it commercially and to hold it as business asset. Since, we have held the land as business asset, the provisions of section 50C does not get attracted. Addition on account of cash deposit in the bank - Held that:- CIT (Appeals) accepted the explanation of assessee to the extent of gifts ₹ 20,00,000/- received by the assessee from his sons and after adjusting the same restricted the addition to ₹ 6,00,000/-. Before us the assessee has not been able to controvert the findings of Commissioner of Income Tax (Appeals). Hence, we do not find any reason to interfere with the findings of Commissioner of Income Tax (Appeals) on this ground. - Appeal of assessee partly allowed. - ITA No.2272/PUN/2014 - - - Dated:- 8-10-2018 - Shri D. Karunakara Rao, AM And Shri Vikas Awasthy, JM For the Assessee : Shri Pramod Shingte For the Revenue : Dr. Vivek Aggarwal ORDER PER VIKAS AWASTHY, JM : This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), Aurangabad dated 31-12-201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer made addition in the income returned on following counts : i. Cash deposits in saving bank account ₹ 12,00,000/-. ii. Interest income ₹ 71,538/-. iii. Short Term Capital Gain on sale of land (in Gut No. 161 village Balapur, Taluka Aurangabad) ₹ 92,76,800/-. Aggrieved by the assessment order dated 30-12-2011, the assessee filed appeal before the Commissioner of Income Tax (Appeals) assailing the additions. The First Appellate Authority vide impugned order restricted the addition on account of cash deposits in the bank to ₹ 6,00,000/-. As regards Short Term Capital Gain on sale of land, the Commissioner of Income Tax (Appeals) upheld the findings of Assessing Officer and confirmed the addition. Against the findings of Commissioner of Income Tax (Appeals) the assessee is in second appeal before the Tribunal by raising following grounds : 1. On the facts and in the circumstances of the case and in the law the Lower authorities have erred in treating the transaction of Business Income as Capital Gain and, further erred in applying the provisions of section 50C of the Income Tax Act, 1961 by disregarding appellants contention in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same for ₹ 50,00,000/- only. 4.2 The ld. AR submitted that the Pune Bench of the Tribunal in the case of Dilip Battu Karanjule Vs. Income Tax Officer reported as 74 taxmann.com 12 has held that where the assessee purchased the land by borrowing funds and ultimate sold the land in short span of time without putting land for agricultural use at any point of time, the purchase and sale transactions of land were held to be adventure in nature of trade. 4.3 In respect of addition of ₹ 6,00,000/- on account of cash deposits in the bank, the ld. AR submitted that the entire amount is reflected in the cash book. The Assessing Officer made addition of ₹ 20,00,000/- disbelieving the gifts received by the assessee from his sons amounting to ₹ 20,00,000/-. The assessee has filed confirmations from his sons, the same are at pages 20 to 23 of the paper book. The Commissioner of Income Tax (Appeals) noticed that the source of amount of gifts received by the assessee/appellant stands explained and hence restricted the addition to ₹ 6,00,000/-. The assessee has explained entire amount deposited in the bank. However, the authorities below have simply brushed asid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure proposed could not take of and the assessee along with the co owners of the adjoining land sold the entire piece of land on 26-08-2008 for a consideration of ₹ 50,00,000/-. The assessee offered his share (70%) of profit as business income. The authorities below disbelieved the assessee‟s explanation and the Joint Venture Agreement and assessed gain as Capital Gains by invoking the provisions of section 50C of the Act. 8. The question whether the land was purchased as business asset or for investment as capital asset can be answered only by examining the facts, sequence of events and reading the intention of the assessee. It is an undisputed fact that prior to the present transaction of purchase and sale of land, the assessee neither in earlier years nor in the subsequent assessment years has indulged in purchase, sale, development of land etc. However, single transaction of sale-purchase of land can also constitute business transaction if the intention of the assessee right from the stage of purchasing the land was to hold the same for trade [Commissioner of Income Tax Vs. Sutlej Cotton Mills Supply Agency Ltd., 100 ITR 706 (SC)]. In the present case the se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... old in a short span of two months time from the date of purchase that explains the reason for not seeking any approvals from Government authority for plotting etc. or carrying out any other development activity on the land. Thus, from the perusal of documents on record we find merit in the submissions of the assessee that the land was purchased by the assessee with the intention to exploit it commercially and to hold it as business asset. 10. Since, we have held the land as business asset, the provisions of section 50C does not get attracted. Accordingly, the findings of First Appellate Authority on this issue are set aside and ground No. 1 of the appeal is allowed. 11. In ground No. 2 the assessee has assailed the addition of ₹ 6,00,000/- on account of cash deposit in the bank. The Assessing Officer during the assessment proceedings found that cash ₹ 52,00,000/- was deposited in the bank account of the assessee during the period relevant to assessment year 2008-09. The assessee explained the source of cash deposits. However, the Assessing Officer was not fully convinced with the explanation and made addition to the extent of ₹ 12,00,000/-. In First Appel ..... 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