Shri Harapalsinh B Chudasama, Ahmedabad V. The ITO, Ward-3(2)(2), Ahmedabad

ITA 515/AHD/2020

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 0249 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 9 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-08-2024
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: SMC
• Next Hearing Date: 17-06-2024
• Assessment Year: misc
• Appeal Filed On: 20-10-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: URJIT B. SHAH
• Assessee Lawyers: SARJU MEHTA
• Keywords: Unexplained cash credit; Sale consideration of property below Jantri Value; Depreciation; Principle of natural justice; Cost of acquisition
• Section: 68; 50C; 142(1); 133(6); 143(1)

Judgement Text

ITA No. 515/Ahd/2020 Assessment Year: 2015-16 Page 1 of 5 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “SMC” BENCH, AHMEDABAD BEFORE Ms. SUCHITRA KAMBLE, JUDICIAL MEMBER ITA No.515/Ahd/2020 Assessment Year: 2015-16 Shri Harapalsinh B. Chudasama, At Panchi Darbar Gandh Dholera Dhandhuka, Ahmedabad – 382 455. [PAN – AUJPC 7542 C] Vs. Income Tax Officer, Ward – 3(2)(2), Ahmedabad (Appellant) (Respondent) Assessee by Shri Sarju Mehta, AR Revenue by Shri Urjit B. Shah, Sr. DR D a t e o f H e a ri n g 18.06.2024 D a t e o f P ro n o u n c e m e n t 12.08.2024 O R D E R This appeal is filed by the assessee against order dated 19.06.2019 passed by the CIT(A)-3, Ahmedabad for the Assessment Year 2015-16. 2. The assessee has raised the following grounds of appeal :- “1. On the facts and in the circumstances of the case of the appellant, the learned CIT(A) erred in confirming addition made by AO for Rs.3,60,400/- being cash deposits made during the year which is claimed to be out of agricultural sale proceeds of earlier year. The AO may be directed to delete such addition. 2. On the facts and in the circumstances of the case of the appellant, the learned CIT(A) erred in upholding addition of Rs.16,12,245/- being Long Term Capital Gain u/s.50C of the Act. 3. On the facts and in the circumstances of the case of the appellant, the learned CIT(A) erred in not adjudicating Ground no.3 relating to addition of Rs.3,36,435/- being alleged undervaluation of property purchased by appellant u/s.56(2) of the Act.” 3. The assessee filed return of income on 29.03.2017 declaring total income of Rs.94,580/-. The return was processed under Section 143(1) of the Income Tax Act, 1961 by accepting the income declared by the assessee in his return of income on ITA No. 515/Ahd/2020 Assessment Year: 2015-16 Page 2 of 5 29.03.2017. The assessee’s case was selected for limited scrutiny thereby mentioning the reason that during the year under consideration the assessee made cash deposit in his Bank account and also transferred one or more properties. Notice under Section 143(2) of the Act was issued on 18.09.2017. Notice under Section 142(1) of the Act alongwith questionnaire was issued on 03.11.2017 which was served upon the assessee. The assessee did not file requisite details at that juncture but after issuance of notice under Section 142(1) of the Act on 30.11.2017, the ld. AR of the assessee subsequently filed the details and submissions. The Assessing Officer observed that the assessee earned normal interest income from the Bank in his Savings Bank Account and also earned rental income of Motor Car against which he has also claimed depreciation on Motor Car and Vehicle on interest expenses. After going through the details filed related to the cash deposit aggregating to Rs.16,80,000/-, the Assessing Officer issued notice under Section 133(6) of the Act dated 03.11.2017 to the Bank and the Bank responded the same. After considering assessee’s reply, the Assessing Officer observed that cash flow chart furnished by the assessee and the details have deficiency indicating in the cash availability with the assessee for justifying further cash deposit made in his Bank account on 27.09.2014. Thus, the Assessing Officer made addition of Rs.3,60,400/- on account of unexplained cash credit under Section 68 of the Act. The Assessing Officer further made addition on account of LTCG under Section 50C of the Act amounting to Rs.16,12,245/- thereby observing that the entire amount of sale consideration as per the value of the sold land assessed by the Registrar and the share of the assessee after calculating the same has to be treated as capital gain arose in the hands of the assessee as per provisions of Section 50C of the Act. The Assessing Officer further made addition of Rs.3,36,735/- in respect of under-valuation of the property thereby applying the said Section 56(2)(vii)(b)(ii) of the Act. 4. Being aggrieved by the Assessment Order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee. 5. As regards ground no.1, the Ld. AR submitted that the CIT(A) and the Assessing Officer has not expressed any objection or not given any contrary finding that the assessee is a Farmer i.e. Agriculturist. The Ld. AR submitted that the ITA No. 515/Ahd/2020 Assessment Year: 2015-16 Page 3 of 5 assessee being Agriculturist was not aware about the maintenance of records related to cash balance on daily basis. The Ld. AR submitted that the assessee has personal savings of Rs.3,60,400/- on date of demonetization and, therefore, the same was deposited in the account of that cannot be treated as unexplained cash deposit. Thus, the ld. AR submitted that the addition under Section 68 of the Act amounting to Rs.3,60,400/- be deleted. As regard to ground no.2, the Ld. AR submitted that the addition of Rs.16,12,245/- in respect of land sold by the assessee will not attract Section 50C of the Act as the said land was agricultural land and the purchase cost was not taken into account while calculating the capital gain towards property sold during the year. The Ld. AR further submitted that, at the time of selling of the land, the Assessing Officer totally overlooked that it was agricultural land which was sold and, therefore, the Assessing Officer should have taken cognisance of the same. The Ld. AR further submitted that the assessee during the appellate proceedings before the CIT(A0 submitted copy of Bank pass book and copy of purchase deed as additional evidences which was totally ignored by the CIT(A). The Ld. AR submitted that nowhere in the remand report submitted by the Assessing Officer before the CIT(A) there was anything which clearly state that payments made towards purchase of land was in respect of non-agricultural land. The Ld. AR submitted that the purchase deed could not be produced due to the old Tax Consultant’s delay in searching the deed of purchase. The Ld. AR submitted that, at this juncture, the assessee has submitted the said purchase deed, the same may be taken on record. The Ld. AR submitted that all the cheque entries earlier also detailed by the assessee and that should be taken into account. As regard to ground no.3, the Ld. AR submitted that the addition was made under Section 56(2)(vii)(b)(ii) of the Act towards purchase of immovable property. The assessee has given his explanation which was simply not accepted by the Revenue Authorities and in fact the CIT(A) has not given any independent finding to that effect. 6. The Ld. DR relied upon the Assessment Order and the order of the CIT(A). The Ld. DR further submitted that the assessee, at this juncture, had filed the deed of sale of land as well as Bank statements in respect of issues contested therein and despite giving several opportunities before both Authorities, the assessee failed to submit these documents. Therefore, the appeal be dismissed ITA No. 515/Ahd/2020 Assessment Year: 2015-16 Page 4 of 5 7. Heard both the parties and perused all the relevant material available on record. It is pertinent to note that as regard to ground no.1 related to cash deposits, from the perusal of records and Bank statements, it appears that this needs verification as the complete set of Bank statement were not before the Assessing Officer as well as before the CIT(A). Hence, this issue needs to be verified. As regard to ground no.2, the deed of sale of land is produced before the Tribunal at the time of hearing and the same also needs to be verified whether the land sold was in the nature of agricultural land or not has to be taken into account in the context of the specific provisions of Income Tax Statute. This issue also needs verification. As regard to ground no.3 relating to addition made under Section 56(2)(vii)(b)(ii) towards purchase of immovable property also needs verification. Thus, all the issues placed before us are remanded back to the file of the Assessing Officer for proper adjudication of the issue and verification, after taking cognisance of the evidences filed by the assessee during the assessment proceedings as well as appellate proceeding before the CIT(A) and before the Tribunal. The Assessing Officer is directed to decide the issues as per Income Tax Statute. Needless to say, the assessee be given opportunity of hearing by following the principles of natural justice. 8. In the result, appeal of the assessee is partly allowed for statistical purpose. Order pronounced in the open Court on this 12 th August, 2024. Sd/- (SUCHITRA KAMBLE) Judicial Member Ahmedabad, the 12 th day of August, 2024 PBN/* Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File ITA No. 515/Ahd/2020 Assessment Year: 2015-16 Page 5 of 5 By order UE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad