RIYAZKHAN GAUSKHAN BAGWAN,,JALNA vs. INCOME-TAX OFFICER, WARD - 2,, JALNA

The first ground is against the confirmation of addition of Rs.7,50,026/-.

Briefly stated, the facts of the case are that the Assessing Officer (AO) got information that the Govt. of Maharashtra through Land Acquisition Officer, Jalna, had acquired the land, inter alia, of the assessee, for the purposes of setting up of Industrial Zone by the Maharashtra Industrial Development Corporation (MIDC). The assessee was paid compensation of Rs.8,20,287/- for the acquisition of his land. On perusal of 7/12 extract, the AO observed that the assessee’s land was barren and within 8 kms of the Municipal area, Jalna and hence, liable to be considered as a `capital asset’ for computation of `Capital gains’. He gave several opportunities to the assessee for appearing, but to no avail. In the ultimate analysis, the AO computed long term capital gain at Rs.7,50,026/- by reducing indexed cost of acquisition of Rs.70,261/- from the amount of compensation at Rs.8,20,287/- An appeal was filed by the assessee before the CIT(A).

Despite several opportunities given by the ld. first appellate authority, it has been recorded on pages 2 and 3 of the impugned order, that the assessee did not turn up which led to the confirmation of addition. The assessee is aggrieved before the Tribunal by the addition so sustained in the first appeal.

I have heard the ld. DR and gone through the relevant material on record. There is no appearance from the side of the assessee despite several notices issued by the Registry of the Tribunal. Accordingly, I am proceeding to dispose off the appeal ex parte qua the assessee. It is seen that the assessee received full value of consideration at Rs.8,20,287/- on account of acquisition of his land. The AO has mentioned that the land is situated within 8 kms from the municipal area, Jalna and as per 7/12 extract it is barren land and hence capital asset. The AO has further calculated the indexed cost of acquisition at Rs.70,261/- for the purposes of computation of capital gain. There is no material on record to demonstrate that the findings returned by the AO, as approved in the first appeal, suffer from any infirmity. In view of the above, I uphold the addition on account of calculation of long term capital gain at Rs.7,50,026/-. The first ground is, therefore, dismissed.

The second ground is against the confirmation of addition of Rs.6,56,000/- towards deposits in the bank account. The AO perused the assessee’s bank account and observed that the assessee deposited a sum of Rs.6,56,000/- in such bank with the first entry dated 22-11-2008 for Rs.1,000/- and thereafter entries starting from 17-02-2008 and continuing up to 12-03-2009 totalling Rs.6,55,000/-. In the absence of the assessee furnishing any evidence, the AO made addition of Rs.6,56,000/- u/s.69A of the Act, which came to be affirmed in the first appeal.

I have heard the ld. DR and gone through the relevant material on record. It is observed that the assessee received Rs.8,20,287/- from MIDC on 26-11-2008, which is subject matter of Ground No.1. All the deposits in the bank account total up to Rs.6,56,000/-. Barring the first deposit of Rs.1,000/- on 22-11-2008, all the further deposits of Rs.6,55,000/- are after the date of receipt of Rs.8.20 lakh from MIDC. The assessee has submitted before the ld. CIT(A), as has been reproduced on the last page of the impugned order, that he withdrew cash earlier from his bank account and the same was re-deposited. In view of the fact that Rs.8.20 lakh was available with the assessee on account of receipt from MIDC towards acquisition of his land, the deposits made in the bank account to the tune of Rs.6,56,000/- cannot be treated anything other than coming from such amount in the hands of the assessee. I, therefore, order to delete the addition of Rs.6,56,000/-.

In the result, the appeal is partly allowed.