AMARJEET SINGH KAPOOR,DELHI V. .ITO,WARD-30(1), DELHI

ITA 3649/DEL/2024

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The case involves Amarjeet Singh Kapoor, who appealed against the denial of a capital loss claim of Rs. 24,02,312/- related to a property transaction in Mohali, booked with Taneja Developers & Infrastructure Pvt Ltd (TDI). The loss was claimed against capital gains from another property in Mandakini, GK, New Delhi. The Income Tax Officer and the CIT(A)-NFAC both denied the claim due to insufficient evidence and doubts about the transaction's genuineness. The Tribunal found merit in the appellant's argument that the amount was indeed paid and decided to remand the case for further examination, emphasizing the need for the appellant to substantiate his claims with adequate evidence.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 473592 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Other Referred Cases: CIT Vs. Durga Prasad More, Sumati Dayal vs. CIT, McDowell & Co. Ltd. vs. CIT, CIT vs P. Mohankala
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Department Lawyers: SIDDHARTH B.S. MEENA
• Keywords: Capital Gains
• Section: 143(3); 68; 133(6)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI (SMC) BENCH, NEW DELHI BEFORESHRI SATBEER SINGH GODARA, JUDICIAL MEMBER ITA No.3649/Del/2024 Assessment Year: 2017-18 Amarjeet Singh Kapoor, D- 43, Partner, M/s. Leather Tech. Okhla Ind. Area, Ph-1, Delhi. Vs. Income-tax Officer, Ward 30(1), Delhi. PAN : AAJPK0044M (Appellant) (Respondent) ORDER This assessee’s appeal for assessment year 2017-18, arises against the Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre [in short, the “CIT(A)-NFAC”], Delhi’s DIN and order no. ITBA/NFAC/S/250/2023-24/1061231907(1) dated 21.02.2024 involving proceedings under section 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’). 2. Case called twice. None appeared at the assessee’s behest. I accordingly proceeded ex parte against him. Assessee by None Department by Sh. Siddharth B.S. Meena, Sr. DR Date of hearing 18.12.2024 Date of pronouncement 18.12.2024 ITA No.3649/Del/2024 2 | P a g e 3. Coming to assessee’s sole substantive ground seeking to reverse both the learned authorities’ finding denying him capital loss claim of Rs.24,02,312/- in the course of assessment framed on 26.12.2019, the Revenue refers to CIT(A)-NFAC lower appellate discussion as under : 7.1 I have considered the assessment order, the submissions of the appellant and the material on record and I agree with the findings of the A.O. The facts of the case are that the appellant had booked a plot in the Mohali project of Taneja Developers & Infrastructure Pvt Ltd(TDI). Subsequently, due to the ill health of the appellant and the requirement of money for a kidney transplant, the appellant cancelled the booking and in doing so claimed a loss of Rs 24.02.312/- against the capital gains of Rs 15,33,050/-arising of the house at Mandakini, GK, New Delhi. The appellant submitted the receipt of TDI dated for the receipt of payment of Rs 24 lakhs paid by the appellant for the booking of the plot. The assessing officer had reasons to doubt the veracity of the receipt issued and issued notice u/s 133(6) to TDI. However there was no response. The Inspector of the Department was then sent to deliver another notice u/s 133(6) which he did and even in response to the same no reply was received. In support of the booking, the appellant even in these proceedings has only submitted the copy of the receipt dated 11.11.2009 and the front page of the allotment letter. No other documents regarding the transaction were furnished. The details of the booking enumerating the terms and conditions of the purchase which normally accompany any agreement to purchase immovable property from a builder have not been produced and more importantly, no documents with regard to the cancellation of the booking have been produced either in the assessment proceedings or in the present proceedings. Also looking to the receipt submitted by the appellant for the booking of the plot dated 11.11.2009 for an amount of Rs 24,00,000/- it is seen that that it refers to payment made by the appellant vide cheque NO\\o./ Draft No 513082 dated 16.05.2006. Thus for an amount paid by the appellant in 2006, the receipt is issued only on 11th of November of 2009 which is unexplainable. The receipt for the payment of any amount for booking is issued either immediately or within a reasonable period and the issuance of the receipt more than 3 years later is inexplicable. ITA No.3649/Del/2024 3 | P a g e Furthermore, there was no response to the notice u/s 133(6) issued by the A.O to the company TDI. Even after the notice was specifically served by the ITI of the Department, no documents or details of the booking allotment, and cancellation of the plot were forthcoming. Neither has the appellant submitted any details regarding the cancellation of the booking with regard to the application made and the subsequent communication from the builders in this regard. Furthermore, the appellant has not even submitted the extract of the bank statement showing the receipt of Rs 28,00,000/- against the cancellation of the plot. 7.2 Thus inspite of the assertions and minimal evidence submitted by the appellant, the circumstantial evidence surrounding the booking and cancellation of the plot in TDI, call into question the genuineness of the transaction(s). On the issue of circumstantial evidence and in the matters related to the discharge of 'onus of proof and the relevance of surrounding circumstances of the case, the Hon'ble Supreme Court in the case of CIT Vs. Durga Prasad More [(1972) 82 ITR 540], has observed as under: \"...that though an appellant's statement must be considered real until it was shown that there were reasons to believe that the appellant was not the real, in a case where the party relied on self-serving recitals in the documents, it was for the party to establish the transfer of those recitals, the taxing authorities were entitled to look into the surrounding circumstances to find out the reality of such recitals. Science has not yet invented any instrument to test the reliability of the evidence placed before a Court or Tribunal. Therefore, the Courts and the Tribunals have to judge the evidence before them by applying the test of human probability. Human minds may differ as to the reliability of piece of evidence, but, in the sphere, the decision of the final fact finding authority is made conclusive by law.\" 7.3 The ratio above as laid down by the Hon'ble Supreme Court has been reiterated and applied by the Hon'ble Apex Court in the case of Sumati Dayal vs. CIT (214 ITR 801). It is essential on the part of the AO to look into the real nature of transaction and what happens in the real word and contextualize the same to such transactions in the real market situation. 7.4 Further, in the case of McDowell & Co. Ltd. (1985) 154 ITR 148 (SC)],the Hon'ble Supreme Court have observed as under: \"Tax planning may be legitimate provided it is within the framework of law. Colourable devices cannot be part of tax ITA No.3649/Del/2024 4 | P a g e planning and it is wrong to encourage or entertain the belief that it is honourable to avoid the payment of tax by resorting to dubious methods. It is the obligation of every citizen to pay the taxes honestly without resorting to subterfuges.\" Every person is entitled to so arrange his affairs as to avoid taxation but the arrangement must be real and genuine and not a sham or make believe. 7.5 Reliance is again placed on the decision of the Hon'ble Supreme Court in the case of CIT vs P. Mohankala [(2007) 291 ITR 278 (SC)] wherein it has been held as under: \"The question is what is the true nature and scope of of Section 68 of the Act? When and in what circumstances Section 68 of the Act would come into play? That a bare reading of Section 68 suggests that there has to be credit of amounts in the books maintained by an assessee; such credit has to be of a sum during the previous year, and the assessee offers no explanation about the nature and source of such credit found in the books; or the explanation offered by the assessee in the opinion of the Assessing Officer is not satisfactory, it is only then the sum so credited may be charged to income-tax as the income of the assessee of that previous year. The expression \"the assessee offers no explanation\" means where the assessee offers no proper, reasonable and acceptable explanation as regards the sums found credited in the books maintained by the assessee. It is true the opinion of the Assessing Officer for not accepting the explanation offered by the assessee as not satisfactory is required to be based on proper appreciation of material and other attending circumstances available on record. The opinion of the Assessing Officer is required to be formed objectively with reference to the material available on record. Application of mind is the sine qua non for forming the opinion.\" 7.6 For the aforesaid reasons, the disallowance of the loss of the Mohali plot of Rs 24,02,312/- by the A.O is upheld and the Ground of Appeal is Not Allowed.” Mr. Meena accordingly argues that the impugned capital loss has been rightly disallowed in both the lower proceedings. ITA No.3649/Del/2024 5 | P a g e 4. I have considered assessee’s pleadings and Revenue’s vehement arguments. I am of the considered view that keeping in mind the fact that the appellant/assessee appears to have actuall paid the impugned sum of Rs.24 lakhs, it would be in the larger interest of justice that the matter is restored back to the CIT(A)- NFAC for fresh his adjudication as per law subject to a rider that appellant shall submit evidence(s) and prove all the relevant facts in support of his case, at his risk and responsibility within three effective opportunities in consequential hearing. Ordered accordingly. 5. This assessee’s appeal is allowed for statistical purposes. Order pronounced in the open court on 18th December, 2024. Sd/- (SATBEER SINGH GODARA) JUDICIAL MEMBER Dated: 18 December, 2024. *aks/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi "