Cash received over and above land registry price treated as capital gain for taxation purpose. Addition on account of unexplained income deleted – ITAT
ABCAUS Case Law Citation:
ABCAUS 2111 (2017) (11) ITAT
Brief Facts of the Case:
A sum of Rs. 12,50,000/- was deposited by the appellant assessee in his saving bank account jointly maintained with his wife. On being asked to explain the source of such cash deposit, the assessee stated that this amount was received on sale of agricultural land which was deposited in saving bank account.
However, the Assessing Officer found that as per the registry, the land was sold only for a sum of Rs. 3,81,964/-. He treated the excess amount of Rs. 8,68,036/- as unexplained income and made addition for this amount.
The First Appellate Authority (FAA/CIT-A) confirmed the addition.
Observations made by the Tribunal:
The ITAT noted that admittedly, the property was, in fact, sold for a sum of Rs. 12,50,000/- but the sale deed was executed only for a sum of Rs.3,81,964/-. Bank account revealed that there was a single deposit of Rs. 12,50,000/- and the date of sale deed was also the same.
The ITAT opined that it proved the assessee’s contention that the sum of Rs. 12,50,000/- was infact received from the sale of the property which was deposited in the bank account.
Regarding the contention of the assessee that the land sold was an agricultural land and no capital gain was chargeable on its transfer, the Tribunal set aside the order and restored the matter to the file of the Assessing Officer for examining the assessee’s contention.
The ITAT directed that if the assessee’s contention about the sale of property, being, an agricultural land is proved, then no addition should be made. In the otherwise scenario, the matter be decided as per law by treating full value of consideration at Rs.12.50 lacs.
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