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TMI Blog2019 (11) TMI 1227X X X X Extracts X X X X X X X X Extracts X X X X ..... d on the housing loan shall be allowed in the hands of the assessee. Therefore, the assessee s ground in all the AYs on this issue are treated as allowed for statistical purposes. Addition u/s 68 - credit allegedly received from his father-in-law - HELD THAT:- We agree with the relationship of the assessee and creditor, we find that unless the details of the Bank A/c are furnished and it is proven that the amounts have been received through banking channels, the identity and creditworthiness of the said persons cannot be accepted. Therefore, we direct the AO to verify the Bank A/c of the assessee and to verify if the amount has been received through Banking channels and if it is found to have been credited to his Bank A/c, then this addition cannot be sustained. As regards the amount of ₹ 45,20,000/- received from Sri G.Madhusudan Reddy, the assessee submitted that he has received the sum through cheque No.707006 on 17.01.2007 and it was deposited in the Bank A/c with M/s. Sai Sudheer Constructions and credited to the capital a/c of the assessee. This fact also needs verification by the AO, hence we direct the AO to verify the same and if it is found to have been credite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y do not fall within the meaning of a relative u/s 56(2) Agricultural income after deducting expenses incurred on agriculture - HELD THAT:- We find that the AO in the remand report has confirmed that the assessee is the owner of the land to the extent of nearly 30 acres. However, the possibility of the assessee getting the agricultural income is doubted by the CIT (A). When there are two bore wells and one well along with electricity connection, we doubt whether any person would keep the land idle. However, without any evidence as to records, the nature of the agricultural crops grown and the expenditure claimed by the assessee, the claim of the assessee cannot be accepted in toto. Therefore, the agricultural income can only be estimated at this stage. We therefore, deem it fit and proper to remand the issue to the file of the AO to consider and estimate the agricultural income which could be derived from the land of 30 acres owned by the assessee for both the A.Ys 2010-11 and 2011-12 - ITA NoS.170, 171, 182 And 183/Hyd/2017 (Assessment Years:2006-07, 2007-08, 2008-09 And 2009-10) - - - Dated:- 29-10-2019 - Smt. P. Madhavi Devi, Judicial Member And Shri S. Rifaur Ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned Counsel for the assessee submitted that though the loan was taken by three persons, the entire loan was utilized in construction of the house property by two people only, i.e.the assessee and his wife at Plot No.301, GR Elite, Road No.14, Banjara Hills, Hyderabad, and since he was offering the income from house property in his hands, the entire interest amount were also to be allowed in his hands. These facts need verification by the AO i.e. whether that the entire rental income is offered in the hands of the assessee alone. Only if the assessee is offering the entire income in his hands, then the entire interest paid on the housing loan shall be allowed in the hands of the assessee. Therefore, the assessee s ground in all the AYs on this issue are treated as allowed for statistical purposes. 3. In the result, assessee s appeal for A.Y 2006-07 is treated as allowed for statistical purposes. A.Y 2007-08 3. In the assessee s appeal for the A.Y 2007-08, the assessee has raised an additional ground against the addition of ₹ 30.00 lakhs made by the AO u/s 68 of the Act and also addition of ₹ 45,20,000 made by the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceived from Shri Rama Subba Reddy, the CIT (A) held that the creditor is 85 years old and that the confirmation is by the wife of the person who has allegedly advanced free interest loan to the assessee. Holding that the assessee has not filed evidence with regard to the creditworthiness of the husband of Smt. E. Lakshmamma, he confirmed the addition of ₹ 30.00 lakhs. With regard to the addition of ₹ 45,20,000/- the loan allegedly received from Shri Madhusudan Reddy, the CIT (A) observed that the confirmation letter filed from Shri Madhusudan Reddy, cannot be accepted. 5. The learned Counsel for the assessee, while reiterating the submissions made before the AO, submitted that the sum of ₹ 30.00 lakhs was received by the assessee from his father-inlaw Shri Rama Subba Reddy from out of his agricultural income and that the same was received through Bank and the legal heirs confirmed the advance. Though we agree with the relationship of the assessee and creditor, we find that unless the details of the Bank A/c are furnished and it is proven that the amounts have been received through banking channels, the identity and creditworthiness of the said pers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Infra Co. by way of cheques and therefore, it could be accepted as additional evidence and the addition should be deleted. We find that the assessee has not given the details of the Bank A/c and the date on which M/s. Sai Sudhir Infra Co. has received the amount and in in turn, transferred the same to the assessee s company. If the assessee is able to produce the details, then the addition may be deleted. The issue is therefore, remanded to the file of the AO afresh to enable the assessee to produce the relevant details and on verification of the same, if the AO found that the amount is received from Obulapuram Mining Co. (P) Ltd, into the books of Sai Sudhir Infra Co and from such A/c to the A/c of the assessee, then no addition can be made in the hands of the individual. 7. In the result, assessee s appeal for the A.Y 2008-09 is partly allowed for statistical purposes. A.Y 2009-10 8. In the A.Y 2009-10, there is only one issue against the disallowance of interest on loan obtained from Indian Overseas Bank. For the detailed reasons given in the A.Y 2006-07, this appeal of the assessee is treated as allowed for statistical purpos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice u/s 153A of the assessee. Therefore, AO required the assessee to explain as to why the same should not brought to tax. At the fag end of the assessment proceedings, the assessee claimed it to be the property of the HUF of his maternal uncle and therefore, is a gift from a relative and not taxable. However, the AO did not accept this contention of the assessee and brought it to tax u/s 56(2) of the I.T. Act. Aggrieved, the assessee filed an appeal before the CIT (A) who confirmed the order of the AO and the assessee is in second appeal before us. 13. The learned Counsel for the assessee reiterated the submissions made before the authorities below. He stated that at the time of acquiring the shares worth ₹ 3,25,000 in April, 1999 his cousin Shri E. Yella Reddy and his wife Smt. Sailaja Reddy had no funds to acquire such shares and that the funds were provided by the HUF of the assessee s maternal uncle Sri Venugopal Reddy, who is the father of Sri E. Yella Reddy. He submitted that these funds were derived from the agricultural operations carried out in the HUF property and hence the funds invested were HUF funds only and on the instructions of Sri Venugo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wherein the AO reported that the assessee is engaged in the business of construction activity and could not have undertaken agricultural activity on such scale and that there is no record of any agricultural activity that is maintained by the assessee. It was also submitted that there is no evidence of mango garden being there on the land. It was also submitted that the assessee has become the owner of the property only at the beginning of the financial year relevant to the A.Y 2010-11 and the recitals in the sale deed shows that there are two borewells and one well along with electricity connection and water share rights. Since there was no mention of mango garden in the sale deed and observing that the mango trees takes lot of time to grow and give crop, the agricultural income was not accepted by the CIT (A). He therefore, confirmed the addition made by the AO and the assessee is in second appeal before us. While the learned Counsel for the assessee reiterated the submissions made before the authorities below, the learned DR supported the orders of the authorities below. 16. Having regard to the rival contentions and the material on record, we find that the AO in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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