SMT. ARUNA CHAUDHARY,NEW DELHI vs. ACIT, NEW DELHI

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ITA 3443/DEL/2017Status: DisposedITAT Delhi04 January 2018AY 2014-1526 pages
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What did the Tribunal hold?

The Tribunal held that the agricultural income declared post-search, without substantiation and not declared in the original return, was rightly treated as income from other sources. For the Singapore property, the matter was remanded to the Assessing Officer to grant the assessee an opportunity to prove she was not the owner.

What were the facts?

During a search operation, the assessee declared agricultural income which was not declared in the original return. The Assessing Officer treated this as income from other sources. Additionally, documents related to a Singapore property transaction were found, leading to additions for capital gains, property tax, and commission.

What were the issues?

Whether agricultural income declared post-search without prior declaration and substantiation is taxable as income from other sources. Whether capital gains and related expenses on a foreign property transaction should be added to income when the assessee denies ownership.

Which sections of the Income-tax Act were involved?

Section 132,Section 153A,Section 139

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Income Tax Appellate Tribunal, DELHI BENCH “A”, NEW DELHI

Before: SHRI R. K. PANDA & SHRI SUDHANSHU SRIVASTAVA

For Appellant: Shri Ajay Wadhwa, Adv
For Respondent: Smt. Aparna Karan, CIT(DR)

opportunity was not provided by passing the assessment order on 30.03.2016.

Further, the assessee had held the property as a trustee and was never the owner of the property. It is also his submission that no mode of consideration was mentioned in the property registration documents because no money was given and amount of Singapore Dollar 5,00,000/- was only mentioned to enable effective transfer. It is also his submission that property taxes was borne by Smt. Bhati Naintara and the possession remained with her at all times. Further, according to him, at every stage of the proceedings, the assessee denied to have held the property. We find the assessee filed certain additional evidences before CIT(A) which were forwarded to the Assessing Officer for his comments. The Assessing Officer examined those evidences in the remand proceedings and gave a report. However, the CIT(A) did not admit the additional evidences and additional grounds raised before him. In our opinion, the matter requires a re- visit to the file of the Assessing Officer with the direction to grant one more opportunity to the assessee to substantiate with evidence to his satisfaction that the property bearing no.383, Tangling Road # 06

06. Tangling Regency, Singapore does not belong to her. The assessee has to prove that she was not the owner of the said property. She has to prove that the consideration was neither paid by her for acquiring the property nor received by her on account of sale of property. The Assessing Officer shall decide the issue afresh and in accordance with law after giving due opportunity of being heard to the assessee.

We hold and direct accordingly. The grounds no.2 to 4 raised by the assessee are accordingly allowed for statistical purposes.

20.

Grounds no.5 to 5.2 relate to the order of the ld. CIT(A) in sustaining the addition of Rs.1,50,000/- made by the Assessing Officer treating the agricultural income as “income from other sources”.

21.

After hearing both the sides, we do not find any infirmity in the order of the ld. CIT(A) sustaining the addition. Admittedly, the assessee neither in the original return nor in the return filed in response to notice u/s 153A had declared such agricultural income. The assessee could not produce any evidence to justify the earning of such huge agricultural income. Since the order of the ld. CIT(A) on this issue is a reasoned one and the ld. counsel for the assessee could not bring any material so as to take a contrary view than the view taken by the ld. CIT(A), therefore, we do not find any infirmity in his order on this issue. Accordingly, the same is upheld and the grounds no.5 to 5.2 raised by the assessee are dismissed.

22.

Grounds no.6 to 7 relate to the order of the ld. CIT(A) in sustaining the addition made by the Assessing Officer on account of indexed cost of construction.

23.

After hearing both the sides, we do not find any infirmity in the order of the ld. CIT(A) on this issue also. While computing the capital gain, the assessee claimed deduction towards cost of acquisition as well as towards the cost of improvement being indexed cost of construction carried out. The cost of construction of the boundary wall could not be corroborated with evidence to the satisfaction of the lower authorities. Ld. CIT(A) in the instant case, in our opinion, has given justifiable reasons as to why the claim of the assessee cannot be entertained. Nothing more was brought to our notice on this issue, during the course of hearing. Therefore, the grounds raised

by the assessee on this issue are dismissed. (A.Y. 2009-10)

24. Grounds no.1, 6, 7 and 8 being general in nature are dismissed.

25.

Grounds no.2 to 3.2 relate to the order of the ld. CIT(A) in sustaining the addition made by the Assessing Officer treating the agriculture income as income from other sources.

26.

After hearing both the sides, we find the grounds are identical to ground of appeal no.5 to 5.2 in ITA No.3438/Del/2017. We have already decided the issue and the grounds raised by the assessee have been dismissed. Following same reasoning, these grounds raised by the assessee are dismissed.

27. Grounds no.4 and 5 relate to the order of the ld. CIT(A) in sustaining the addition of Rs.22,98,299/- being the indexed cost of construction on sale of Dera land.

28.

After hearing both the sides, we find the grounds are identical to ground of appeal

no.6 and 7 in ITA No.3438/Del/2017. We have already decided the issue and the grounds raised by the assessee have been dismissed. Following similar reasoning, these grounds raised by the assessee are dismissed. to 3443/Del/2017 (A.Ys. 2011-12 to 2014-15 )

29. In all the appeals, the grievance of the assessee is regarding the order of the ld. CIT(A) in sustaining the addition made by the Assessing Officer treating the agricultural income as income from other sources.

30. After hearing both the sides, we find the agricultural income declared by the assessee was treated by the Assessing Officer as income from other sources on the ground that the assessee could not substantiate with evidence regarding the earning of such agricultural income. Further, the assessee had not filed the original return of income before the due date declaring such agricultural income. We find the ld. CIT(A) while deciding the issue has given justifiable reasons for not accepting such agricultural income. Ld. counsel for the assessee could not bring any material to our notice so as to take a different view than the view taken by the ld. CIT(A) on this issue. We, therefore, do not find any infirmity in the order of the ld. CIT(A) treating such agricultural income as income from other sources. The order of the ld. CIT(A) is, therefore, upheld and the grounds raised by the assessee in all these appeals are dismissed.

31.

In the result, filed by the assessee is partly allowed for statistical purposes and the remaining appeals of the assessee are dismissed. Order pronounced in the open Court on this 04th day of January, 2018.

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