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TMI Blog2022 (11) TMI 909X X X X Extracts X X X X X X X X Extracts X X X X ..... STCG on sale of land - agreed price as per document found at the time of search - assessee denied to have received any money over and above what has been mentioned in the sale deed - HELD THAT:- We deem it proper to restore the issue to the file of the AO with a direction to give an opportunity to the assessee to substantiate his case by producing Mr.C.Veerabhadra Reddy for his examination. Further, the assessee is also directed to produce necessary evidence to show that the proposed plan was drifted away from the land in question for which the price has come down. The AO shall decide the issue as per fact and law after giving due opportunity of being heard to the assessee. We hold and direct accordingly. This ground raised by the assessee is accordingly allowed for statistical purposes. - ITA No.528/Hyd/2020 - - - Dated:- 16-11-2022 - Shri Rama Kanta Panda, Accountant Member AND Shri Laliet Kumar, Judicial Member For the Assessee : Shri P.Murali Mohan Rao, CA For the Revenue : Shri M. Satish,CIT-DR ORDER PER SHRI RAMA KANTA PANDA, A.M. This appeal filed by the assessee is directed against the order dated 23.07.2020 of Learned Commissioner of Inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rn of Income. Hence taxing the same amount as Short term capital gain leads to double taxation. 10 The Ld. CIT(A) failed to appreciate the fact that A) Short Term capital Gain of Rs 10,000 arisen on transfer of Property is already included in the amount of 21,86,606 which was offered as short term capital gain on transfer of Property . Hence taxing the same amount as short term capital gain leads to double taxation. B) Short Term capital Gain of Rs 170,000 arisen on transfer of Property is Factual Ground already included in the amount of 21/86/606 which was offered as short term capital gain on transfer of Property. lienee taxing the same amount as Short term capital gain leads to double laxation. C) Amount of Rs 16,00,000 received from Sri Ram Reddy is included in the amount of 21,86,606 which was offered as short term capital gain on transfer of Property. Hence taxing the same as unexplained credits in AY 2009-10 leads to double taxation D) Amount of Rs.200,000 received from Uma Maheshwar Rao is included in the amount of 21,86,606 which was offered as short term capital gain on transfer of property. Hence taxing the same as unexplained credits in AY 2009- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Total Rs.63,49,600 Vide Q.No.8 of the questionnaire dated 01-11-2012, the assessee was asked to furnish the details of the above unsecured loans received during the year along with the evidence to prove the identity and creditworthiness of the creditors and genuineness of the transaction. The assessee furnished the confirmation letters from Sri C.V.K Murthy and Sri.Y.Gangulaiah but failed to furnish any evidence to prove their creditworthiness. In respect of the other two persons the assessee failed to furnish any details/evidence in support of the claim. During the assessment proceedings the assessee was also directed to produce the said persons for examination. But the assessee could not produce any of the four persons for examination. In view of this, the said amount of Rs.63,49,600/- was treated by the AO as unexplained credit in the hands of the assessee. 9. Before the ld.CIT(A), the assessee filed confirmation letters from the above persons duly indicating the amounts lent along with the copy of their bank statements reflecting transfers into his account along with ledger extracts showing the closing balances as on 31.03.2010. 10. Bas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, though had PAN but a non-filer and the appellant has not proved creditworthiness of Sri Murthy. Hence, this amount of Rs.1,00,000/- is sustained. 5.3.3) The cash credit pertaining to Sri Ganguliah is also not explained satisfactorily because basically the PAN itself was not matched as per Income Tax Data Base. Hence, this cash credit is not accepted and the addition of Rs.1,00,000/- is sustained. 5.4) In view of the above, out of the addition of total cash credits of Rs.63,19,600/-, the cash credits pertaining to Sri T subba Rao (Rs.6,49,600), Sri CVK Murthy (Rs.1,00,000) and Sri T.Gangulaiah (Rs.1,00,000) totaling to Rs.8,49,000/- is not explained satisfactorily and deserve addition. This ground is partly allowed. 11. Aggrieved with such order of the ld.CIT(A), the assessee is in appeal before the Tribunal. 11.1. The ld.counsel for the assessee strongly challenged the order of the ld.CIT(A) in confirming the addition of Rs.8,49,600/- as made by the AO. He submitted that out of the four loans totaling to Rs.63,49,600/- made by the AO u/s. 68 of the I.T.Act, the ld.CIT(A) deleted addition of Rs. 55 lakhs in case of Sree Minerals. However, he sustained the additio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount of Rs.63,49,600/-from four parties, which the AO added u/s. 68 of the I.T.Act on the ground that assessee could not produce the said persons for his examination and also failed to prove their creditworthiness. We find the ld.CIT(A) deleted an amount of Rs.55 lakhs received from one of the parties namely Sree Minerals but sustained the addition of Rs.8,49,600/- in respect of the three parties, the reasons of which have already been reproduced at para 10 of the order. It is the submission of the ld.counsel for the assessee that the assessee has filed the confirmation letters and PAN numbers of all the three creditors and the amount was received through banking channel and in one of the party namely T.Subba Rao out of the total amount received at Rs.8,49,600/- an amount of Rs.2 lakh was repaid during the year itself. Therefore, no addition should be made. 14. We do not find any force in the above argument of the ld.counsel for the assessee. It is the settled proposition of law that for accepting any cash credit, the onus is always on the assessee to substantiate with evidence to the satisfaction of the AO regarding the identity and creditworthiness of the loan creditor and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ale of the land was Rs.42,24,000/- and not Rs.1,08,08,000/- as mentioned in the sale agreement. However, the AO did not accept the claim of the assessee and made addition of Rs. 1,01,05,000/- as STCG by observing as under:- i. From the registered sale deed no.2179/09-10 dated 26.06.2009 entered by Sri C.Vamsi Krishna(the assessee) with Sri Veerabhadra Reddy s/o BasavaReddy Bellary for sale 15.44 acre land, it is clear that the property in question was sold to same person as per the agreement dated 20.01.2009. ii. The assessee himself has agreed that he has received the amount of Rs.27,00,000/- over and above the sale consideration, which makes it clear that the market value of the property is much more than that mentioned in the registered sale deed. iii. However considering the fact the actual sale was within six months of the earlier agreement it is very unlikely that the assessee would have sold the property at the rate of Rs.1,00,000/ per acre as compared to the earlier agreed price of Rs.7,00,000/- per acre. iv. The rate of Rs. 7,00,000/- per acre mentioned in the agreement is very much near to the prevailing market rate of the property at that time Otherwis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration on this sale. It was submitted by the assessee that in spite of bringing all these facts before the AO, the AO solely basing on the agreement of sale dated 20.05.2009 considered the sale consideration at Rs.1,08,08,000/-. 21. Based on the submissions made by the assessee, ld.CIT(A) called for a remand report from the AO. The AO in his remand report stated that assessee has not proved that the property was sold as a distress sale due to price crash and has also not produced Sri C.Veerabadra Reddy during the course of assessment proceedings. Therefore, the sale consideration was adopted at Rs.1,08,08,000/- computing the short term capital gain at Rs.1,01,05,000/-. The AO further reported that the submissions made by the assessee during the appellate proceedings were already considered during the assessment proceedings itself and no additional information has been furnished by the assessee. The ld.CIT(A) confronted the remand report of the AO to the assessee and after considering the rejoinder of the assessee to such remand report, he confirmed the addition restricting the same to Rs.35,49,000/- by observing as under:- 6.5 I have gone through the facts and the sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat is mentioned in the sale deed. For the above proposition he relied on the decision of Hon ble Supreme Court in the case of KP Varghese vs. ITO reported in 131 ITR 597, where it has been held that the burden of proving is that of revenue when there is allegation of under statement of concealment in the consideration shown. He further submitted that the market value of the impugned property is not more than the amount that was disclosed in the registered documents. Therefore, the question of payment of any money over and above the amount mentioned in the registered sale deed does not arise in absence of any corroborative evidence. He also relied on various decisions and submitted that the addition sustained by the ld.CIT(A) should be deleted. 23. The ld.DR on the other hand heavily relied on the order of the ld.CIT(A). He submitted that despite being asked by the AO to produce the Shri C. Veerabadra Reddy for his examination, the assessee failed to produce him before the AO. Since the document found at the time of search clearly mentions the agreed price at Rs.1,08,08,000/-, therefore, the ld.CIT(A) was fully justified in sustaining the addition made by the AO. 24. We have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecide the issue as per fact and law after giving due opportunity of being heard to the assessee. We hold and direct accordingly. This ground raised by the assessee is accordingly allowed for statistical purposes. 27. So far as the additional grounds are concerned, the assessee is aggrieved by the order of the ld.CIT(A) in confirming the addition of Rs.23,66,606/- made by the AO. 28. Facts of the case, in brief, are that in the Return of Income for the year under consideration, the assessee admitted an amount of Rs.8,20,968/- as short term Capital Gain. The assessee was asked to furnish the details of the transactions and also the copies of the sale deeds and purchase deeds of the said transaction. The assessee filed a revised computation sheet for the short term capital gain. As per the said statement the assessee has sold 4 immovable properties including the property sold to Sri,Veerabhadra Reddy. The AO accordingly computed the short term capital gain in respect of the remaining three properties sold, the details of which are as under:- Actual Sale consideration received Cost of acquisition STCG ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is arrived at taking the same as Rs.35,00,000/- only by the AO. This is a mistake as rightly pointed out by the appellant. But it does not have effect on short term capital gains calculation. In the remand report the AO has also accepted that the short term capital gains returned by the assessee was not given credit, which resulted in excessive addition of Rs.8,20,968/- and the claim of the assessee was found to be correct and needs to be rectified. In view of the above, the AO is directed to pass appropriate orders while giving effect to this appellate order. This ground is allowed. 31. Aggrieved with such order of the ld.CIT(A), the assessee is in appeal before the Tribunal. 31.1. The ld.counsel for the assessee strongly challenged the order of the ld.CIT(A) in partly sustaining the addition made by the AO. He submitted that when the assessee has not received any extra money over and above, the amounts disclosed, the ld.CIT(A) is not justified in sustaining the addition. We find before the ld.CIT(A), the assessee has filed a chart showing quantification of the short-term capital gain and determining the same to be at Rs.15,45,638/-. The ld.CIT(A) directed the AO to verify ..... X X X X Extracts X X X X X X X X Extracts X X X X
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