Mr. Nivrutti Pandurang Bhor Vs. Income Tax Officer

Parties Involved

Facts Summary

The assessee, Mr. Nivrutti Pandurang Bhor, filed his return of income declaring total income at Rs.13,07,650/-. His case was selected for scrutiny under CASS for verification of large Long Term Capital Loss (LTCL) on sale of property and huge cash deposits in a savings bank account. The Learned Assessing Officer (Ld. AO) passed an assessment order determining the total income at Rs.13,07,650/-. Subsequently, the Learned Principal Commissioner of Income Tax (Ld. PCIT) set aside the original assessment order to conduct further enquiry into the claim of LTCG and cash deposits. The Ld. AO observed that the assessee had sold immovable property with a capital gain of Rs.37,26,701/- and another property with a capital loss of Rs.1,27,91,821/-. The Ld. AO calculated the net LTCG amounting to Rs.36,35,520/- and issued a show cause notice along with a draft assessment order by making an addition of Rs.36,35,520/- towards the LTCG. The assessee claimed a deduction u/s. 54 of the Act but did not claim the same in his original return of income, hence the Ld. AO rejected the deduction. With regard to the cash deposits, the Ld. AO issued a notice to the assessee to explain the source of cash deposits. The assessee submitted that the source for the remaining cash deposit was on account of agricultural income, tuition income earned by the assessee’s wife, and cash withdrawal from an earlier period. However, the Ld. AO observed that the assessee could not file any documentary evidences in supp…

Legal Issues

• 1. Whether the addition of Rs.36,35,520/- for long term capital gain is justified and whether the deduction under section 54 should be allowed.
• 2. Whether the addition of Rs.13,84,112/- as unexplained money is justified.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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