PRINCIPAL COMMISSIONER OF INCOME TAX -7 vs. JYOTIBEN G VAGHELA

Feeling   aggrieved   and   dissatisfied   with   the   impugned judgment and order passed by the learned Income Tax Appellate Tribunal,   Ahmedabad   "A"   Bench,   Ahmedabad   dated   16.11.2017 passed in IT(SS) A. No.122/AHD/2014 for AY 2011­12, by which, the learned Tribunal has dismissed the said appeal preferred by the Revenue and has confirmed the order passed by the learned CIT(A) C/TAXAP/469/2018 JUDGMENT deleting   the   addition   of   Rs.1,30,99,900/­   being   unexplained expenditure under Section 69 A of the Income Tax Act and deleting the   addition   of   Rs.5,70,000/­   made   on   account   of   Short   Term Capital Gain, the Revenue has preferred the present appeal with the following proposed questions of law. "A. Whether the Appellate Tribunal has erred in law and on facts in deleting the addition of Rs.1,30,99,900/­ being unexplained expenditure u/s 69 A of the Act ? B.Whether the Appellate Tribunal has erred in law and on facts in deleting the addition of Rs.5,70,000/­ made on account of STCG ?"

The facts leading to the present Tax Appeal in nutshell are as under:

That   the   assessee   filed   return   of   income   for   AY   2011­12. During the course of assessment proceedings, it was found by the AO that the sale consideration for agricultural land sold during the period relevant to AY 2011­12 was wrongly shown at Rs.5,70,000/­ and according to the AO, on the basis of statement of the purchaser of the land and additional  cash payment  of Rs.1,30,00,000/­was made. Therefore, the AP taxed the disclosed profit by way of short term capital gain tax and added the undisclosed sum under Section 69 A of the Act. Consequently, the assessment order under Section 143(3) r/w Section 153B(1)(b) of the Act was passed making the addition of Rs.1,36,69,900/­ on the following issues: (i) u/s 69 A of the Act Rs. 1,30,99,900/­ (ii) on account of STCG Rs. 5,70,000/­

Against   the   aforesaid   addition,   assessee   preferred   appeal C/TAXAP/469/2018 JUDGMENT before   the   learned   CIT(A).   The   learned   CIT(A)   deleted   the aforesaid additions made under Section 69 A of the Act as well as on account of STCG. In appeal before the learned Tribunal at the instance of the Revenue, the learned Tribunal by impugned order has dismissed the said appeal, which has given rise to the present appeal at the instance of the respondent.

We have heard Mrs. Bhatt, learned counsel for the revenue. So far as the addition made by the AO of Rs.1,30,99,900/­ added as undisclosed sum under Section 69 A of the Act is concerned, it is required   to   be   noted   that   the   same   was   solely   based   on   the statement  of  purchaser  which  was  not  binding  on  the  assessee, more particularly, when he was not offered for cross examination. The   aforesaid   is   not   disputed   by   the   learned   counsel   for   the Revenue. Under the circumstances, both the learned CIT(A) as well as   learned   ITAT   have   rightly   deleted   the   addition   made   under Section 69 A of the Act.

Now, so far as the deletion of addition made by the AO on account of STCG is concerned, it is required to be that the land was situated beyond 8 km from any Urban Agglomeration. The assessee produced certificate of Talati cum Mantri of the village in support of   his   contention.   The   aforesaid   had   gone   uncontroverted   and therefore,  learned  CIT(A)  as  well  as  learned  ITAT    deleted  the addition made on account of STCG. For this Court it was submitted that earlier that as the said contention was raised for the first time before learned CIT(A) and the learned CIT(A) accepted the same without   verification,   the   learned   CIT(A)   should   have   called   for report   from   the   AO,   which   he   did   not   do   so.   Recording   the aforesaid submission, Division Bench of this Court while adjourning the matter to today observing that "Assessing Officer, in the present C/TAXAP/469/2018 JUDGMENT case,   verify   the   facts   and   in   particular,   in   the   context   of   the Certificate of Talati­cum­ mantri produced by the assessee. He may file additional statement on the basis of such exercise, why he may undertake". Today, when the present appeal is taken up for further hearing, Mrs. Bhatt, learned counsel for the Revenue has in fact confirmed  the  earlier  certificate  issued  by the  Talati­cum­mantri that the land in question was situated beyond 8 km from any Urban Agglomeration which was relied by the assessee before the leaned CIT(A).   In   that   view   of   the   matter,   now   the   grievance   of   the revenue does not survive. Once it was found that the agricultural land was situated beyond 8 km from any Urban Agglomeration, the addition   made   on   account   of   STCG   was   not   permissible   and sustainable.

In view of the above, it cannot be said that the learned ITAT has committed any error in deleting the addition made by the AO under Section 69 A of the Act as well as on account of STCG. No substantial question of law arise. Under the circumstances, present appeal deserves to be dismissed and is accordingly dismissed.