Sh. Sohan Singh Garcha, Ludhiana V. DCIT, Ludhiana

CO 5/CHANDI/2013

• Counselvise Citation: [2019] 111 COUNSELVISE.COM (IT) 5577 (ITAT-CHANDIGARH)
• Duration Of Justice: 6 year(s) 9 month(s) 8 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 31-10-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 31-10-2019
• Assessment Year: 2006-2007
• Appeal Filed On: 23-01-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Assessee Lawyers: SANJEEV GARG
• Keywords: Capital asset; Principle of natural justice; Earning of tax free income; Period of limitation; Additional evidence; Cost of acquisition; Assessment record; Tax effect; Time period of passing order; Set aside; Capital Gains
• Section: 143(3); 2(14); 274; 143(2); 69A; 13; 22; 154

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, B, CHANDIGARH , ! '# $ % & '# , () BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER C.O. NO. 39/CHD/2012 (IN ITA NO. 973/CHD/2012) / ASSESSMENT YEARS : 2006-07 SHRI SOHAN LAL GARCHA, 901/2, PUNJAB MATA NATAR, LUDHIANA VS. THE DCIT, CIRCLE VI, LUDHIANA ./ PAN NO: ALQPG7446L / APPELLANT / RESPONDENT C.O. NO. 05/CHD/2013 (IN ITA NO. 1330/CHD/2012 / ASSESSMENT YEARS : 2006-07 SHRI SOHAN LAL GARCHA, 901/2, PUNJAB MATA NATAR, LUDHIANA VS. THE DCIT, CIRCLE VI, LUDHIANA ./ PAN NO: ALQPG7446L / APPELLANT / RESPONDENT & ./ ITA NOS. 1337/CHD/2016 / ASSESSMENT YEAR : 2006-07 SHRI SOHAN LAL GARCHA, 901/2, PUNJAB MATA NATAR, LUDHIANA VS. THE DCIT, CIRCLE VI, LUDHIANA ./ PAN NO: ALQPG7446L / APPELLANT / RESPONDENT C.O.NO. 39-C-12, C.O. NO. 5-C-2013 & ITA NOS. 1337 -C-16 & C.O NO. 5-C-2013, SHRI SOHAN SINGH GARCHA, LUDHIA NA 2 / REVENUE BY : SHRI MANJIT SINGH, CIT DR !' / ASSESSEE BY : SHRI SANJEEV GARG, ADVOCATE # $'% / DATE OF HEARING : 31.10.2019 &'()'% / DATE OF PRONOUNCEMENT : 31.10.2019 (* / ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE CAPTIONED APPEAL BY THE ASSESSEE (ITA NO.1337/C HD/2016) IS AGAINST THE ORDER DATED 26.9.2016 OF THE CIT(A) PA SSED IN FIRST APPEAL OF THE ASSESSEE AGAINST THE ORDER OF THE ASSESSING OFF ICER DATED 11.2.2011 U/S 154 OF THE INCOME TAX ACT, 1961 (IN SHORT 'THE ACT'), WHEREAS, THE CROSS OBJECTIONS NO. 39/CHD/2012 HAS BEEN PREFERRE D BY THE ASSESSEE WITH RESPECT TO THE APPEAL OF THE REVENUE BEARING ITA NO.973/CHD/2012 AGAINST THE ORDER OF THE CIT(A) DATED 20.11.2009 IN RESPECT OF THE APPEAL AGAINST THE ORDER OF THE ASSESSING OFFICER PASSED U /S 143(3) OF THE ACT. CROSS OBJECTIONS NO. 5/CHD/2013 HAS BEEN FILED BY THE ASSESSEE IS IN RESPECT OF THE APPEAL OF THE REVENUE BEARING ITA NO. 1330/CHD/2012 AGAINST THE ORDER OF THE CIT(A) DATED 23.11.2012 P ASSED IN APPEAL AGAINST THE ORDER OF THE ASSESSING OFFICER DATED 29 .3.2011 U/S 271 (1)(C) OF THE ACT. 2. IT IS PERTINENT TO MENTION HERE THAT THE APPEAL S OF THE REVENUE BEARING ITA NO. 973/CHD/2012 RELEVANT TO THE ASSESS MENT YEAR 2006-07 AND ITA NO. 1330/CHD/2012 RELATING TO ASSESSMENT YE AR 2006-07 HAVE BEEN DISMISSED VIDE COMMON ORDER DATED 22.11.2016 O N THE GROUND OF LOW TAX EFFECT. C.O.NO. 39-C-12, C.O. NO. 5-C-2013 & ITA NOS. 1337 -C-16 & C.O NO. 5-C-2013, SHRI SOHAN SINGH GARCHA, LUDHIA NA 3 3. IT IS ALSO PERTINENT TO MENTION HERE THAT ITA NO . 1337/CHD/2016 OF THE ASSESSEE WAS EARLIER DISMISSED VIDE ORDER DATED 16.2.2017 FOR WANT OF PROSECUTION, HOWEVER, THE SAID ORDER WAS RECALLE D VIDE ORDER DATED 30.10.2108 OF THIS TRIBUNAL PASSED IN M.A NO.92/CHD /2017 AND, THEREFORE, THE APPEAL OF THE ASSESSEE WAS RESTORED . FURTHER, THE CROSS OBJECTIONS NO. 39/CHD/2012 & 05/CHD/2013 OF THE ASS ESSEE WERE EARLIER DISMISSED FOR WANT OF PROSECUTION VIDE ORDER DATED 22.11.2016 OF THIS TRIBUNAL, HOWEVER, THE SAID ORDER DATED 22.11.2016 WAS RECALLED VIDE ORDER DATED 10.11.2017 PASSED IN MA NOS. 41 & 42/CH D/2017 RESPECTIVELY. 4. IN VIEW OF THE ABOVE POSITION, THE ITA NO. 1337/ CHD/2016, C.O.NO.39/CHD/2012 AND C.O. NO. 5/CHD/2013 BEING RE LATED TO THE SAME ASSESSEE AND INVOLVING CONNECTED ISSUES HAVE BEEN HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. 5. BEFORE TAKING UP THE APPEALS AND CROSS OBJECTION S SEPARATELY, WE DEEM IT FIT TO FIRST NARRATE THE RELEVANT FACTS OF THE CASE AS EXTRACTED FROM THE ORDER DATED 20.11.2009 OF THE CIT(A) IN IT A NO.973/CHD/2012 BRIEF FACTS OF THE CASE ARE THAT FROM THE DETAILS F ILED DURING THE ASSESSMENT PROCEEDINGS, THE A.O. NOTED THAT THE ASS ESSEE HAD DEPOSITED CERTAIN CASH ON DIFFERENT DATES IN HIS SAVING BANK ACCOUNT WITH STATE BANK OF INDIA, FOUNTAIN CHOWK, LUDHIANA. THE A.O. F URTHER NOTED THAT C.O.NO. 39-C-12, C.O. NO. 5-C-2013 & ITA NOS. 1337 -C-16 & C.O NO. 5-C-2013, SHRI SOHAN SINGH GARCHA, LUDHIA NA 4 THE ASSESSEE HAD SHOWN AN AMOUNT OF RS. RS. 75.30 LACS AS AGRICULTURAL INCOME. ON BEING ASKED TO EXPLAIN, THE ASSESSEE EXP LAINED THAT THE SAID INCOME WAS OUT OF THE PROCEEDS OF SALE OF RURAL AGR ICULTURAL LAND NOT FALLING WITH IN THE DEFINITION OF CAPITAL ASSET. T HESE DEPOSITED AMOUNTS WERE CLAIMED TO REPRESENT THE SALE PROCEEDS OF AGRI CULTURAL LAND BELONGING TO THE ASSESSEE SITUATED IN VILLAGE KOHAR A.. THE A.O. ASKED THE ASSESSEE TO FURNISH THE NECESSARY DETAILS AND E VIDENCES TO CORELATE THE ABOVE DEPOSITS WITH THE SALE TRANSACTIONS OF TH E LAND. THE ASSESSEE CLAIMED THAT THESE AMOUNTS WERE OUT OF THE SALE PRO CEEDS OF THE LAND SOLD BY THE ASSESSEE. THE A.O. NOTED FROM THE SALE DEEDS THAT THE DETAILS OF PAYMENT RECEIVED BY THE ASSESSEE UPON THE SALE O F LAND DURING THE FINANCIAL YEAR 2005-06 DID NOT TALLY WITH THE CASH PAYMENTS DEPOSITED BY THE ASSESSEE IN HIS SAVING BANK ACCOUNT. THE A.O., THEREFORE, CONCLUDED THAT THE ASSESSEE FAILED TO EXPLAIN SATISFACTORILY THE SOURCES OF DEPOSITS OF CASH IN HIS SAVING BANK ACCOUNT OF RS. 16,00,00 0/- ON 31.5.2005 AND RS. 12,50,000/- ON 27.6.2005. THE A.O., THEREFORE, DEEMED IT TO BE THE INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCES. A DDITION OF RS.28,50,000/- WAS, THEREFORE, MADE BY HIM U/S 69A OF THE ACT INTO THE INCOME OF THE ASSESSEE FOR THE ASSESSMENT YEAR UNDE R CONSIDERATION. 6. FURTHER, IN RESPECT OF THE AMOUNT RECEIVED BY THE ASSESSEE AS DEPICTED IN THE SALE DEEDS, THE A.O. ASKED THE AS SESSEE TO EXPLAIN AS TO WHY THE INCOME ON SALE OF THE LAND AS NOTED ABOVE SHOULD NOT BE TREATED AS LONG TERM CAPITAL GAINS CHARGEABLE TO TAX UNDER THE PROVISIONS OF THE C.O.NO. 39-C-12, C.O. NO. 5-C-2013 & ITA NOS. 1337 -C-16 & C.O NO. 5-C-2013, SHRI SOHAN SINGH GARCHA, LUDHIA NA 5 ACT. THE ASSESSEE FURNISHED BEFORE THE A.O. THE ST ATEMENT OF EX- SARPANCH, GRAM PANCHAYAT, KOHARA, SARPANCH, GRAM PA NCHAYAT, KOHARA AND NAMBARDAR OF VILLAGE KOHARA TO THE EFFECT THAT THE LAND IN QUESTION WAS OUTSIDE THE LIMIT OF 8 KM. THE ASSESSEE THEREFO RE SUBMITTED THAT THE AGRICULTURAL LAND SOLD BY HIM DID NOT FALL INTO THE DEFINITION OF CAPITAL ASSET FOR CHARGEABILITY OF CAPITAL GAINS TAX. THE A SSESSEE, THEREFORE, SUBMITTED BEFORE THE A.O. THAT PROFIT ON SALE OF AG RICULTURAL LAND SITUATED IN VILLAGE KOHARA WAS NOT CHARGEABLE TO TA X UNDER THE HEAD LONG TERM CAPITAL GAINS. THE A.O., HOWEVER, OBSERVED THA T THE STATEMENTS OF EX-SARPANCH, SARPANCH AND THAT OF NAMBARDAR OF VILL AGE KOHARA COULD NOT BE RELIED UPON AS THE AREA PATWARI VIDE HIS REP ORT DATED 26.12.2008 HAD CATEGORICALLY STATED THAT VILLAGE KOHARA WAS SI TUATED WITHIN 8 KM FROM THE MUNICIPAL LIMIT OF LUDHIANA DURING THE PER IOD 2005-06. AS PER THE A.O., AREA PATWARI WAS A GOVERNMENT EMPLOYEE WH O MAINTAINED THE REVENUE RECORDS IN RESPECT OF KOHARA VILLAGE AND TH AT, THEREFORE, THERE REMAINED NO DOUBT THAT THE LAND SOLD BY THE ASSESSE E WAS SITUATED WITHIN 8 KM OF MUNICIPAL LIMITS OF LUDHIANA. HE, TH EREFORE, CONCLUDED THAT CAPITAL GAINS ON THE SALE OF THIS LAND WAS DUL Y CHARGEABLE TO TAX. THE A.O. FURTHER NOTED THAT THE AREA PATWARI HAD AL SO FURNISHED AVERAGE 5 YEARS RATES FOR THE PERIOD 1970-71 TO 1981-82 IN RESPECT OF LAND OF DIFFERENT KINDS SITUATED IN VILLAGE KOHARA. THESE R ATES WERE IN RESPECT OF 4 KINDS OF LANDS I.E. BHAD, KHALAS, CHAHI AND HIYAI. AS PER THESE DETAILS MAXIMUM RATES FOR BHAD KIND OF LAND WAS RS.65.29 PER MARLA. IN THE JAMABANDI, THE LAND SOLD BY THE ASSESSEE HAD BEEN S HOWN AS CHAHI, C.O.NO. 39-C-12, C.O. NO. 5-C-2013 & ITA NOS. 1337 -C-16 & C.O NO. 5-C-2013, SHRI SOHAN SINGH GARCHA, LUDHIA NA 6 VACANT OR HIYAI. THE LAND WAS FOUND TO HAVE BEEN SOLD BY THE ASSESSE E TO M/S ASHOK MALHOTRA PROPERTY DEALER PVT. LTD., WH O WERE DEVELOPERS AND COLONIZERS OF THE LAND. THE COST OF ACQUISITION OF THE LAND SOLD BY THE ASSESSEE WAS, THEREFORE, ADOPTED BY THE A.O. A T THE MAXIMUM RATE SHOWN FOR HIYAI & CHAHI LAND AT RS.654.46 PER MARLA AS ON 1.4.1981. THE A.O. ACCORDINGLY WORKED OUT CAPITAL GAINS ON THE SA LE OF THIS LAND AS DETAILED IN IN PARA 4.4 OF THE ASSESSMENT ORDER AT RS. 17,28,165/-. THIS AMOUNT WAS ADDED TO THE INCOME OF THE ASSESSEE UNDE R THE HEAD LONG TERM CAPITAL GAINS. 7. BEING AGGRIEVED BY THE ORDER OF THE ASSESSING OF FICER, THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A) RAI SING THE FIRST GROUND OF APPEAL THAT THE ORDER PASSED BY THE ASSESSING O FFICER WAS BARRED BY LIMITATION. IT WAS PLEADED THAT THE ASSESSING OFFIC ER HAD FAILED TO SERVE THE FIRST ASSESSMENT ORDER IN TIME AND THAT THE SER VICE WAS BY WAY OF AFFIXTURE AND FURTHER THAT THE COLUMN MEANT FOR DAT E OF ORDER WAS LEFT BLANK AND THAT UNDER THE CIRCUMSTANCES IT WAS APPAR ENT THAT THE ORDER WAS PASSED BY THE ASSESSING OFFICER AFTER 31.12.200 8, THEREFORE, THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER WA S TIME BARRED. APART FROM THAT, THE ASSESSEE HAD TAKEN THE GROUND THAT H E WAS NOT GIVEN PROPER OPPORTUNITY TO FURNISH THE NECESSARY EVIDENC ES BY THE ASSESSING OFFICER. FURTHER, ON MERITS THE ADDITION MADE BY TH E ASSESSING OFFICER OF RS. 2,85,000/- ON ACCOUNT OF UNEXPLAINED CASH DE POSITS IN THE BANK C.O.NO. 39-C-12, C.O. NO. 5-C-2013 & ITA NOS. 1337 -C-16 & C.O NO. 5-C-2013, SHRI SOHAN SINGH GARCHA, LUDHIA NA 7 ACCOUNT AND ADDITION OF RS. 17,28,165/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF LONG TERM CAPITAL GAINS WAS CHALLENGE D. 8. THE LD. CIT(A) VIDE IMPUGNED ORDER DATED 20.11.2 009 DISMISSED THE FIRST GROUND RAISED BY THE ASSESSEE RELATING TO THE VALIDITY OF THE ASSESSMENT ORDER BEING BARRED BY LIMITATION, OB SERVING AS UNDER:- 2.1 WITH REGARD TO THIS GROUND OF APPEAL SHRI H.O. ARORA, ADVOCATE, THE ID. COUNSEL FOR THE APPELLANT HAS SUBMITTED THAT THE ORDER UNDER REFERENCE HAD BEEN SERVED UPON THE APPELLANT ON 2.1.2009. AS PER HIM, IT WAS DULY MENTIONED IN THE MEMO OF APPEAL THAT THE ORDER WAS RECEIVED ON 2.1.2009 AS IT WAS AFFIXED AT THE PREMISES OF THE APPELLANT. IT IS FURTHER SUBMITTED THAT THE ORDER W AS NEITHER TENDERED TO THE APPELLANT NOR IT WAS REFUSE D BY HIM AND AS SUCH THE SERVICE OF ORDER BY AFFIXTUR E WAS MISPLACED, ERRONEOUS AND CONTRARY TO LAW. SHRI ARORA ALSO SUBMITTED THAT THE SERVICE OF ORDER BY AFFIXTURES IS THE LAST MODE OF SERVICE AND THAT THE SERVICE WITHOUT REFUSAL AND WITHOUT THE EVIDENCE OF INDEPENDENT WITNESSES DOES NOT ESTABLISH THAT THE ORDER PASSED AND SERVED WITHIN THE LIMITATION PRESCRIBED UNDER THE LAW I.E. 31.12.2008. THE LD. COUNSEL ALSO SUBMITTED THAT IN THE COPY OF ORDER TH E A.O. HAS NOT MENTIONED THE DATE OF PASSING THIS ORD ER, IN THE RELEVANT COLUMN. AS PER HIM, PRIMA-FACIE THE ORDER SEEMS TO HAVE BEEN PASSED AFTER 31.12.2008 AN D THE SERVICE BY AFFIXTURE 2.1.2009 NEGATED THAT TH E ORDER WAS PASSED WITHIN THE LIMITATION PERIOD PRESCRIBED IN THE INCOME TAX ACT, 1961. 3. I HAVE CAREFULLY CONSIDERED THE CONTENTION OF THE LD. COUNSEL FOR THE APPELLANT AND PERUSED THE RELEVANT RECORD. THOUGH THE LD. COUNSEL HAS CONTENDED AS ABOVE, IT IS VERIFIED FROM THE ASSESSM ENT RECORD OF THE APPELLANT THAT WHEREAS A COPY OF THE ORDER WAS AFFIXED AT THE LAST KNOWN ADDRESS OF THE C.O.NO. 39-C-12, C.O. NO. 5-C-2013 & ITA NOS. 1337 -C-16 & C.O NO. 5-C-2013, SHRI SOHAN SINGH GARCHA, LUDHIA NA 8 APPELLANT, ANOTHER COPY WAS ALSO SENT BY SPEED POST ON 30.12.2008. THEREFORE, THE CONTENTION OF THE APPELLANT THAT THE ORDER UNDER APPEAL WAS PASSED AFTER 31.12.2008 IS NOT BORNE FROM RECORD AND IT HA S TO BE CONSIDERED THAT THE ASSESSMENT ORDER UNDER APPEAL HAS BEEN PASSED ON 26.12.2008 ITSELF AS INDICATED IN THE DEMAND NOTICE ISSUED U/S 156 OF TH E ACT ALONG WITH THE ASSESSMENT ORDER. JUST NON- INDICATION OF DATE IN THE ASSESSMENT ORDER WOULD NO T MEAN THAT THE ORDER WAS NOT PASSED ON THE DATE BEFO RE 31.12.2008. IT IS WELL KNOWN THAT ALONG WITH ASSESSMENT ORDER A COPY OF DEMAND NOTICE IS ALSO SE NT TO AN ASSESSEE AND DATE INDICATED IN SUCH DEMAND NOTICE IS THE DATE OF ASSESSMENT ORDER. IT IS NOT DISPUTED BY THE APPELLANT THAT THE DEMAND NOTICE FI LED BY THE APPELLANT HIMSELF WITH APPEAL MEMO IN THIS CASE IS DATED 26.12.2008. THERE COULD NOT BE ANY DOUBT THAT DEMAND NOTICE INDICATING EXACT DEMAND ON THE BASIS OF AN ASSESSMENT ORDER CAN ONLY BE PREPAR ED AFTER PASSING SUCH ASSESSMENT ORDER. THEREFORE, ONC E THE DEMAND NOTICE FILED BY THE APPELLANT WITH THE APPEAL MEMO ITSELF IS DATED 26.12.2008, IT HAS TO B E CONSIDERED THAT THE ASSESSMENT ORDER WAS ALSO PASSE D ON OR BEFORE THAT DATE ONLY. AS FAR AS THE CONTENTI ON THAT NOTICE U/S 143(2) WAS NOT ISSUED IN THIS CASE WITHIN THE PRESCRIBED TIME, IN THE WRITTEN SUBMISSI ONS OF THE LD. COUNSEL NO SPECIFIC ARGUMENTS HAVE BEEN ADVANCED. THEREFORE, THIS CONTENTION RAISED IN THE GROUNDS OF APPEAL CAN ALSO NOT BE ACCEPTED. THE ABOVE POSITION, THEREFORE, CLEARLY INDICATE THAT TH ESE GROUNDS OF APPEAL ARE WITHOUT ANY MERIT. THESE ARE ACCORDINGLY DISMISSED. 9. SO FAR AS THE ADDITION MADE BY THE ASSESSING OFF ICER OF RS. 28.50 LACS ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS WAS CO NCERNED, THE LD. CIT(A) HELD THAT THE ASSESSEE HAD EXPLAINED THE SOU RCE OF THE AFORESAID DEPOSIT AS ON ACCOUNT OF EARNEST MONEY RECEIVED VID E AGREEMENT TO SELL C.O.NO. 39-C-12, C.O. NO. 5-C-2013 & ITA NOS. 1337 -C-16 & C.O NO. 5-C-2013, SHRI SOHAN SINGH GARCHA, LUDHIA NA 9 DATED 29.11.2004. HE THEREFORE, DELETED THE ADDITIO N MADE BY THE ASSESSING OFFICER OF THE AMOUNT OF RS. 28.50 LACS. 10. HOWEVER, SO FAR AS THE ADDITION MADE BY THE ASS ESSING OFFICER ON ACCOUNT OF LONG TERM CAPITAL GAINS WAS CONCERNED, T HE LD. CIT(A) HELD THAT THE ASSESSEE COULD NOT SATISFACTORILY PROVE TH AT THE LAND SOLD BY THE ASSESSEE DID NOT FALL IN THE DEFINITION OF CAPITAL ASSET UNDER THE PROVISIONS OF SECTION 2(14) OF THE INCOME TAX ACT. THE RELEVANT PART OF THE FINDINGS OF THE LD. CIT(A) ON THIS ISSUE IS RE PRODUCED AS UNDER:- 6. I HAVE CAREFULLY CONSIDERED THE CONTENTION OF THE LD. COUNSEL FOR THE APPELLANT AND PERUSED THE RELEV ANT RECORD. FIRST LET US TAKE UP THE ISSUE OF CHARGEABI LITY TO TAX OR NOT OF THE INCOME ASSESSED BY THE A.O. AS LONG TERM CAPITAL GAINS. THIS CAPITAL GAIN HAS ARIS EN IN THIS CASE ON THE SALE OF LAND SITUATED IN VILLAG E KOHARA. THE A.O., ON THE BASIS OF REPORT OF THE ARE A PATWARI DATED 26.12.2008 HAS CONSIDERED THAT THE ENTIRE VILLAGE KOHARA FALLS WITHIN 8 KM FROM THE MUNICIPAL CORPORATION LIMITS OF LUDHIANA DURING THE PERIOD 2005-06. ON THE OTHER HAND, THE APPELLANT IS CONTENDING THAT THE LAND OF THE APPELLANT WHICH WAS SOLD DURING THE RELEVANT PERIOD FELL BEYOND 8 KM OF MUNICIPAL LIMITS OF LUDHIANA DURING THE RELEVANT PERIOD. THIS HAS BEEN CLAIMED BY THE APPELLANT ON T HE BASIS OF STATEMENT OF EX-SARPANCH, GRAM PANCHAYAT, KOHARA, SARPANCH, GRAM PANCHEYAT, KOHINA AND NAMBARDAR, VILLAGE KOHARA. HOWEVER, I AM INCLINED T O GO BY THE APPROACH OF THE A.O. IN THIS REGARD. AREA PATWARI IS SENIOR REVENUE OFFICER AS COMPARED TO SARPANCH OR NAMBARDAR ETC. AS BROUGHT OUT BY THE AO IT IS HE WHO MAINTAINS THE REVENUE RECORD IN RESPEC T OF SUCH LAND. THEREFORE, ONCE SUCH SENIOR OFFICER IS CERTIFYING THAT THE ENTIRE VILLAGE FALLS WITHIN 8 K M OF MUNICIPAL LIMITS OF LUDHIANA DURING THE YEAR 2005-0 6, C.O.NO. 39-C-12, C.O. NO. 5-C-2013 & ITA NOS. 1337 -C-16 & C.O NO. 5-C-2013, SHRI SOHAN SINGH GARCHA, LUDHIA NA 10 THE STATEMENT OF JUNIOR OFFICIAL BEING NAMBARDAR OR EX-SARPANCH ETC. CANNOT BE TAKEN TO BE GIVING THE CORRECT POSITION. IT WAS FOR THE APPELLANT TO PROVE AS TO HOW IN THE FACE OF THE INFORMATION FILED BY THE ARE A PATWARI, THE STATEMENT OF NAMBARDAR AND EX-SARPANCH OF KOHARA VILLAGE SHOULD HAVE BEEN ACCEPTED. IN VIE W OF THE ABOVE THE LAND SOLD BY THE APPELLANT DURING THE RELEVANT PERIOD WHICH IS UNDISPUTEDLY IN VILLAGE KOHARA, IS TAKEN TO BE SITUATED WITHIN 8 KM OF MUNICIPAL LIMITS OF LUDHIANA DURING THE FINANCIAL YEAR 2005-06 AS HELD BY THE A.O. ALSO. THE A.O. WAS , THEREFORE, FULLY JUSTIFIED IN CONSIDERING THIS LAND TO BE A CAPITAL ASSET AS PER THE PROVISIONS OF SECTION 2(14)(III)(B) OF THE ACT AND BRINGING TO TAX CAPITA L GAINS EARNED BY THE APPELLANT ON THE SALE OF THIS A SSET ACCORDINGLY. 6.1 DURING THE APPEAL PROCEEDINGS THE LD. COUNSE L HAS ALSO PLACED RELIANCE UPON THE DECISION OF THE HON'BLE ITAT CHANDIGARH IN THE CASE OF ITO W-I, SANGRUR VS. KHAZAN SINGH S/O SH. JOGINDER SINGH, SANGRUR ASSESSMENT YEAR 2002-03. THE LD. COUNSEL HA S PRODUCED FACTS OF THIS CASE IN PARA 3 OF HIS WRITTE N SUBMISSIONS REPRODUCED ABOVE. IN VIEW OF THE RATIO OF THIS DECISION BEING ITA NO.53/CHD/2005 DATED 24.01.2007 IT IS CONTENDED THAT THE LAND SOLD BY TH E APPELLANT CANNOT BE CONSIDERED AS A CAPITAL ASSET WITHIN THE MEANING OF PROVISIONS OF SECTION 2(14) O F THE ACT AND CAPITAL GAIN ON THE SALE OF WHICH CAN B E TAKEN TO BE CHARGEABLE TO TAX. HOWEVER I DO NOT AG REE WITH THE LD. COUNSEL IN THIS REGARD. THE MAIN REASO N FOR THE HON'BLE ITAT TO DECIDE THAT CASE IN FAVOUR OF THE ASSESSEE WAS THAT THERE WAS NOTHING ON RECORD T O SHOW THAT THE VILLAGE MANGLWAL IN THAT CASE FELL WI THIN THE OUTSKIRTS OF 5 KM FROM THE MUNICIPAL LIMIT OF SANGRUR. HOWEVER AS FAR AS THE CASE OF THE APPELLAN T IS CONCERNED, IT IS NOT DISPUTED THAT FOR LUDHIANA, AS PER THE RELEVANT NOTIFICATION, AREA FALLING WITHIN THE LIMIT OF 8 KM FROM THE MUNICIPAL LIMITS OF LUDHIANA IS TA KEN TO BE A CAPITAL ASSET AS PER THE PROVISIONS OF SECT ION 2(14) OF THE ACT. FURTHER AS ALREADY MENTIONED, AS PER C.O.NO. 39-C-12, C.O. NO. 5-C-2013 & ITA NOS. 1337 -C-16 & C.O NO. 5-C-2013, SHRI SOHAN SINGH GARCHA, LUDHIA NA 11 THE REPORT OF THE AREA PATWARI ENTIRE LAND IN VILLA GE KOHARA FALLS WITHIN THE AREA OF 8 KM FROM THE MUNICIPAL LIMITS OF LUDHIANA. THEREFORE, THE LAND S OLD BY THE APPELLANT DURING THE RELEVANT PERIOD WHICH I S IN QUESTION, BEING UNDISPUTEDLY IN THE VILLAGE KOHARA IS TO BE TAKEN TO BE WITHIN THE AREA OF 8 KM FROM THE MUNICIPAL LIMITS OF LUDHIANA FOR THE RELEVANT PERIO D AND THE CAPITAL GAINS ON THE SALE OF SUCH LAND IS D ULY CHARGEABLE TO CAPITAL GAINS TAX. THEREFORE, THE RAT IO OF THIS DECISION DOES NOT HELP THE CASE OF THE APPELLA NT IN ANY MANNER. FURTHER THE ARGUMENTS OF THE LD. COUNSE L THAT THE POPULATION OF VILLAGE KOHARA WAS LESS THAN 10,000 DURING THE RELEVANT PERIOD ETC. WOULD NOT HE LP THE CASE OF THE APPELLANT IN AS MUCH AS THESE FACTS ARE RELEVANT IF THE POSITION WITH RESPECT TO A CAPITAL ASSET IS TO BE CONSIDERED UNDER THE PROVISIONS OF SECTION 2(14)(III)(A) OF THE ACT. ON THE OTHER HAND, IN THE CASE OF THE APPELLANT PROVISIONS OF SECTION 2(14)(III)(B ) ARE APPLICABLE. THEREFORE, THIS WOULD NOT APPLY TO THE CASE OF THE APPELLANT. 6.2 I N VIEW OF THE ABOVE, THE FINDINGS OF THE A.O. BRINGING TO TAX THE CAPITAL GAINS ON THE SALE OF LA ND IN QUESTION ARE UPHELD. 11. IT IS PERTINENT TO MENTION THAT AFTER PASSING O F THE AFORESAID IMPUGNED ORDER OF THE CIT(A) DATED 20.11.2009, THER E WAS AN INTERESTING TWIST IN THE FACTS AND CIRCUMSTANCES OF THE CASE OWING TO SUBSEQUENT EVENTS RELATING TO THE CASE. THE ASSESSI NG OFFICER THEREAFTER PASSED AN ORDER DATED 11.2.2011 U/S 154 OF THE ACT INCREASING THE TAX LIABILITY OF THE ASSESSEE BY INCREASING THE SLAB O F TAX BY ADDING / CONSIDERING AGAIN THE AMOUNT OF RS. 75.30 LACS AS A GRICULTURAL INCOME OF THE ASSESSEE, THE ISSUE RELATING TO WHICH HAS ALREA DY BEEN DISCUSSED ABOVE. WHAT WE MEAN TO SAY HERE IS THAT THE AMOUNT OF RS. 75.30 LACS C.O.NO. 39-C-12, C.O. NO. 5-C-2013 & ITA NOS. 1337 -C-16 & C.O NO. 5-C-2013, SHRI SOHAN SINGH GARCHA, LUDHIA NA 12 WHICH HAS BEEN SHOWN BY THE ASSESSEE AS AGRICULTUR AL INCOME ON ACCOUNT OF SALE OF AGRICULTURAL RURAL LAND WAS AGAI N TAKEN INTO ACCOUNT BY THE ASSESSING OFFICER AS AGRICULTURAL INCOME AND THE SAME BEING EXEMPT INCOME, HOWEVER, THE TAX SLAB OF THE ASSESSE E WAS INCREASED TO HIGHER RATE FOR COMPUTATION PURPOSE RAISING THE ADD ITIONAL DEMAND OF RS. 52,783/-. THE ASSESSEE FILED APPEAL AGAINST THE AFORESAID OR DER PASSED BY THE ASSESSING OFFICER U/S 154 OF THE ACT WHICH WAS DISMISSED BY THE LD. CIT(A) VIDE ORDER DATED 26.9.2016 AGAINST WHICH THE ASSESSEE HAS PREFERRED APPEAL IN ITA NO. 1337/CHD/2016. ANOTHER INTERESTING FACT WHICH HAS COME TO LIGHT IS THAT AFTER PASSING OF TH E ORDER U/S 154 OF THE ACT, IT WAS REVEALED TO THE ASSESSEE THAT IN FACT T HERE WERE TWO ASSESSMENT ORDERS PASSED BY THE ASSESSING OFFICER R ELATING TO THE SAME ASSESSMENT YEARS. IN THE FIRST ORDER, THOUGH THE MO NTH AND YEAR OF THE ORDER WAS MENTIONED, HOWEVER, THE DATE OF THE ORDE R WAS NOT MENTIONED BUT LEFT BLANK, WHEREAS, IN THE SECOND ASSESSMENT O RDER, WHICH FORM PART OF THE RECORD OF THE FILE OF THE DEPARTMENT AND ON THE BASIS OF WHICH THE IMPUGNED ORDER DATED 11.2.2011 U/S 154 OF THE ACT WAS PASSED BY THE ASSESSING OFFICER, THE DATE HAS BEEN FILLED WITH IN K AS 26.12.2008. ANOTHER NOTICEABLE DIFFERENCE IN THE FIRST UNDATED ORDER AND IN THE SECOND ORDER WAS THAT IN THE FIRST ORDER THERE WAS MENTION OF LETTER DATED 23.10.2008 ISSUED BY THE ASSESSING OFFICER TO THE A SSESSEE AND IT WAS MENTIONED CONTENTS OF WHICH ARE REPRODUCED BELOW . SIMILAR WAS THE POSITION REGARDING THE ANOTHER LETTER ISSUED BY THE ASSESSING OFFICER TO C.O.NO. 39-C-12, C.O. NO. 5-C-2013 & ITA NOS. 1337 -C-16 & C.O NO. 5-C-2013, SHRI SOHAN SINGH GARCHA, LUDHIA NA 13 THE ASSESSEE DATED 28.11.2008 MENTIONING THAT THE CONTENTS OF THE SAME ARE REPRODUCED BELOW , HOWEVER, THE CONTENTS OF THE SAID LETTERS WERE ACTUALLY NOT REPRODUCED. ANOTHER NOTICEABLE F ACT WAS THAT IN THE SECOND ORDER, THE AGRICULTURAL INCOME OF RS. 75.30 LACS WAS ADDED OVER AND ABOVE THE TOTAL TAXABLE INCOME COMPUTED BY THE ASSESSING OFFICER AT RS. 47,68,743/-. HOWEVER, THERE WAS NOT SUCH DOU BLE ADDITION OF THE AMOUNT OF RS. 75.30 LACS IN THE FIRST (UPDATED) ORD ER. THE ASSESSEE CONTESTED BEFORE THE LD. CIT(A) NOT ABOUT THE VALID ITY OF THE ASSESSMENT ORDER PASSED BUT ALSO THE VALIDITY OF THE SUBSEQUEN T PASSED ORDER PASSED U/S 154 OF THE ACT. HOWEVER, THE LD. CIT(A) VIDE IM PUGNED ORDER DATED 26.9.2016 DISMISSED THE APPEAL OF THE ASSESSEE AGAINST WHICH THE PRESENT ITA NO. 1337/CHD/2016 HAS BEEN PREFERRED. 12. NOW THE ASSESSEE BEFORE US HAS NOT ONLY CHALLE NGED THE ADDITION MADE BY THE ASSESSING OFFICER ON MERITS VIDE C.O. N O. 39/CHD/2012 BUT HAS ALSO CHALLENGED VIDE ITA NO. 1337/CHD/2016, VAL IDITY OF THE ORDER DATED 11.2.2011 PASSED BY THE ASSESSING OFFICER U/S 154 OF THE ACT AND FURTHER CONFIRMED BY THE CIT(A) VIDE ORDER DATED 26 .9.2016. APART FROM THAT, THE ASSESSEE HAS ALSO CHALLENGED THE ACTION OF THE CIT(A) IN CONFIRMING THE PENALTY IN RESPECT OF THE ADDITION CONFIRMED BY THE CIT(A) MADE ON ACCOUNT OF CAPITAL GAINS. WE ACCORDINGLY, PROCEED TO ADJUDICATE THE ISSUES RAISED IN THE CAPT IONED CROSS OBJECTIONS AND APPEAL. C.O.NO. 39-C-12, C.O. NO. 5-C-2013 & ITA NOS. 1337 -C-16 & C.O NO. 5-C-2013, SHRI SOHAN SINGH GARCHA, LUDHIA NA 14 C.O.NO. 39/CHD/2012:- 13. THE GROUNDS TAKEN BY THE ASSESSEE VIDE C.O.NO. 39/CHD/2012 ARE AS UNDER:- 1. THAT THE WORTHY COMMISSIONER OF INCOME TAX (APPEALS)-LL, LUDHIANA IN LAW, FACTS AND CIRCUMSTANCES OF THE CASE HAS RIGHLY DELETED THE ADDITION OF RS. RS.28,50,000/- (16,00,000+ RS. 12,50,000) ON ACCOUNT OF CASH DEPOSITED IN THE BANK OF THE APPELLANT. 2. THAT THE WORTHY COMMISSIONER OF INCOME TAX (APPEALS)-LL, LUDHIANA IN LAW, FACTS AND CIRCUMSTANCES OF THE CASE HAS RIGHTLY DIRECTED THE ASSESSING OFFICER TO CONSIDER RS. 2850000/- (1600000 + 1250000) RECEIVED DURING THE YEAR AND RS. 1450000/- IN THE IMMEDIATE PRECEDING YEAR, TO BE A PART OF SALE CONSIDERATION OF AGRICULTURE LAND . 3. THAT THE WORTHY COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN UPHOLDING THE ADDITION ON ACCOUNT OF LONG TERM CAPITAL GAIN ON SALE OF AGRICULTURAL LAND WHICH WAS OUTSIDE THE LIMIT OF 8 KM OF MUNICIPAL LIMIT. 4. THAT THE LD. CIT(A)-II, LUDHIANA HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER ON ACCOUNT OF ASSUMING THE AGRICULTURE LAND WITHIN 8KM OF THE MUNICIPAL LIMIT. , 5. THAT THE CIT(A)-II, LUDHIANA HAS ERRED IN UPHOLDING ADDITION ON ACCOUNT OF LONG TERM CAPITAL GAIN AGAINST THE FACTS AND CIRCUMSTANCES OF THE CAS E BY NOT CONSIDERING THE DETAILED SUBMISSION PROPERLY. 6. THAT THE CIT(A)-II, LUDHIANA IN FACTS AND CIRCUMSTANCES OF THE CASE HAS ERRED IN DECIDING THA T THE ORDER OF ASSESSMENT HAS BEEN PASSED WITH IN LIMITATION PERIOD. C.O.NO. 39-C-12, C.O. NO. 5-C-2013 & ITA NOS. 1337 -C-16 & C.O NO. 5-C-2013, SHRI SOHAN SINGH GARCHA, LUDHIA NA 15 7. THAT THE CIT(A)-II, LUDHIANA ERRED IN NOT DELETING THE ADDITIONS BY SETTING ASIDE THE ASSESSMENT ORDER IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 8. THAT THE RESPONDENT CRAVES LEAVE TO ADD OR AMEND ANY GROUND OF CROSS-OBJECTIONS BEFORE THE APPEAL I S FINALLY HEARD OR DISPOSED OFF. 14. GROUND NO.1 & 2: NO GRIEVANCE HAS BEEN RAISED BY THE ASSESSEE VIDE GROUND NOS. 1 & 2 OF THE CROSS OBJECTIONS NO. 39/CHD/2012, SO, THESE GROUNDS NEED NO ADJUDICATION. 15. GROUND NOS. 3, 4 & 5: SO FAR AS THE GROUND NOS. 3, 4 & 5 OF C.O.NO.39/CHD/2012 ARE CONCENRED, THESE GROUNDS ARE LINKED WITH ISSUE RELATING TO CHARGEABILITY OF TAX ON LONG TERM CAPIT AL GAINS ON SALE OF LAND. SO FAR AS THE ISSUE AS TO WHETHER THE LAND SOLD B Y THE ASSESSEE FALLS IN THE DEFINITION OF CAPITAL ASSET OR NOT AS PER THE PROVISIONS OF SECTION 2(14) OF THE ACT IS CONCERNED, A PERUSAL O F THE ABOVE REPRODUCED ORDER OF THE CIT(A) REVEALS THAT THE ASSESSEE IN SU PPORT OF HIS CLAIM SUBMITTED THAT THE LAND IN QUESTION WAS SITUATED BE YOND 8 KMS OF MUNICIPAL LIMITS OF LUDHIANA DURING THE RELEVANT P ERIOD AND HAS RELIED UPON THE STATEMENT OF EX-SARPANCH, GRAM PANCHYAT, K OHARA HOWEVER, THE LD. CIT(A) HAS GIVEN WEIGHTAGE OF THE REPORT O F THE PATWARI WHO IN HIS REPORT HAS STATED THAT THE ENTIRE VILLAGE FALLS WITHIN THE 8 KMS OF MUNICIPAL LIMITS OF LUDHIANA DURING THE YEARS 2005- 06. HOWEVER, THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE IS THAT THE REPORT OF THE C.O.NO. 39-C-12, C.O. NO. 5-C-2013 & ITA NOS. 1337 -C-16 & C.O NO. 5-C-2013, SHRI SOHAN SINGH GARCHA, LUDHIA NA 16 PATWARI IS IN RESPECT OF VILLAGE KOHARA AND NOT ABO UT THE LAND OF THE ASSESSEE WHICH IS BEYOND 8 KMS FROM THE MUNICIPAL L IMIT OF LUDHIANA. THE LD. COUNSEL FOR THE ASSESSEE HAS ALSO SUBMITTED THAT THE ASSESSEE HAS NOT BEEN GIVEN PROPER OPPORTUNITY TO REBUT THE ALLE GED REPORT OF THE PATWARI. EVEN THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE IS IN A POSITION TO PROVIDE ANOTHER STATEM ENT OF AREA PATWARI UNDER THE OBSERVATION OF THE TEHSILDAR, WHO IS A SE NIOR MOST OFFICER IN REVENUE DEPARTMENT, TO THE EFFECT THAT THE LAND OF THE ASSESSEE WAS BEYOND THE 8 KMS OF THE MUNICIPAL LIMIT. THAT THE S AID STATEMENT OF THE AREA PATWARI WAS NOT PROCURED AND PRODUCED DURING T HE ASSESSMENT PROCEEDINGS AS THE ASSESSEE HAD ALREADY PRODUCED SU FFICIENT AND RELIABLE EVIDENCE IN SUPPORT OF HIS CLAIM. THE STATEMENT WA S COLLECTED AFTER THE APPELLATE ORDER WAS PASSED BY THE LD. CIT(A). 16. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE STATEMENT IN POSSESSION OF THE ASSESSEE AS COMPARED TO THE ST ATEMENT OF PATWARI, RELIED UPON BY THE ASSESSING OFFICER, WAS MORE RELI ABLE AS THERE WAS LACUNAS IN THE STATEMENT OF PATWARI RELIED UPON BY THE ASSESSING OFFICER. THE LD. COUNSEL, THEREFORE, HAS SUBMITTED THAT THE ASSESSEE MAY BE GIVEN PROPER OPPORTUNITY TO FURNISH NECESSARY EVIDENCES T O THE EFFECT THAT THE LAND OF THE ASSESSEE DURING THE RELEVANT PERIOD DID NOT FALL WITHIN THE DEFINITION AND SCOPE OF CAPITAL ASSETS AS PER THE PROVISIONS OF SECTION 2(14) OF THE ACT. C.O.NO. 39-C-12, C.O. NO. 5-C-2013 & ITA NOS. 1337 -C-16 & C.O NO. 5-C-2013, SHRI SOHAN SINGH GARCHA, LUDHIA NA 17 THE LD. COUNSEL FOR THE ASSESSEE IN THIS RESPECT HA S ALSO RELIED UPON THE SUBSEQUENT AMENDMENT PROVIDING POPULATION OF THE VILLAGE AS ALSO ONE OF THE IMPORTANT CRITERIA FOR DECIDING AS TO WHETHER THE LAND IS A RURAL LAND OR URBAN LAND AND AS TO WHETHER THE SAME IS TO BE TREATED AS CAPITAL ASSET OR NOT. THE LD. COUNSEL, THEREFORE, H AS PLEADED THAT THE ASSESSEE BE GIVEN PROPER OPPORTUNITY TO PRESENT HIS CASE BEFORE THE ASSESSING OFFICER IN THIS RESPECT. 17. THE LD. DR, ON THE OTHER HAND, HAS RELIED ON TH E FINDINGS OF THE LOWER AUTHORITIES ON THIS ISSUE. 18. WE HAVE HEARD THE RIVAL CONTENTIONS OF THE LD. AUTHORIZED REPRESENTATIVES OF BOTH THE PARTIES. WE FIND FORCE IN THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE REPORT / STATEMENT OF THE PATWARI RELIED UPON BY THE LOWER AUTHORITIES CANN OT BE THE SOLE CRITERIA TO DETERMINE THE NATURE OF THE LAND SOLD BY THE ASS ESSEE DURING THE RELEVANT PERIOD. THERE IS A FORCE IN THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE STATEMENT SPEAKS ABOUT THE VI LLAGE AND NOT SPECIFICALLY ABOUT THE DISTANCE OF THE LAND OF THE ASSESSEE FROM THE MUNICIPAL LIMIT. ON THE OTHER HAND, THE ASSESSEE WANTS TO FURNISH A NOTHER REPORT OF THE PATWARI AND OTHER EVIDENCES IN SUPPORT OF HIS C ONTENTION AND THESE EVIDENCES ALONGWITH EVIDENCES / STATEMENTS ALREADY FURNISHED BY THE ASSESSEE GO TO THE ROOT OF THE CASE. THEREFORE, T HIS ISSUE RAISED VIDE C.O.NO. 39-C-12, C.O. NO. 5-C-2013 & ITA NOS. 1337 -C-16 & C.O NO. 5-C-2013, SHRI SOHAN SINGH GARCHA, LUDHIA NA 18 GROUNDS NO. 3, 4 & 5 IS RESTORED TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO ADMIT THE ADDITIONAL EVIDENCES SOUGHT TO BE FURNISHED BY THE ASSESSEE AND AFTER CONSIDERING THE ENTIRE FA CTS AND CIRCUMSTANCES OF THE CASE, PASS A SPEAKING ORDER AFRESH ON THIS I SSUE UNINFLUENCED BY ANY EARLIER OBSERVATION MADE BY THE ASSESSING OFFIC ER OR THE CIT(A) ON THIS ISSUE . 19. GROUND NO.6: THE ISSUE RAISED VIDE THIS GROUND NO.6 OF C.O.NO. 39/CHD/2012 IS RELATING TO THE VALIDITY OF ASSESSME NT ORDER ON THE GROUND OF LIMITATION PERIOD. THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE IS THAT NEITHER THE FIRST / UNDATED ASSESS MENT ORDER PASSED BY ASSESSING OFFICER IS VALID NOR THE SECOND ASSESSME NT ORDER DATED 26.12.2008 IS VALID. THAT BOTH THE ORDERS PASSED BY THE ASSESSING OFFICER ARE BEYOND THE PERIOD OF LIMITATION WHICH E XPIRED ON 31.12.2008. TO VERIFY THE CONTENTION OF THE ASSESSE E, THE ASSESSMENT RECORDS WERE CALLED FOR . THE LD. CIT DR HAS SUBMIT TED THAT THE ASSESSMENT ORDER WAS NOT ONLY SERVED ON THE ASSESSE E BY WAY OF AFFIXTURE BUT ALSO WAS SERVED ON THE ASSESSEE THROU GH SPEED POST. 20. BOTH THE LD. REPRESENTATIVES OF THE PARTIES HAV E FAIRLY AGREED THAT IF THERE WAS AN EVIDENCE ON THE RECORD OF SERVICE O F THE ASSESSMENT ORDER THROUGH SPEED POST PRIOR TO 31.12.2008, THEN THERE REMAINS NO FORCE IN THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE ORDER WAS PASSED AFTER THE STIPULATED DATE OF 31.12.2008. FRO M THE PERUSAL OF THE C.O.NO. 39-C-12, C.O. NO. 5-C-2013 & ITA NOS. 1337 -C-16 & C.O NO. 5-C-2013, SHRI SOHAN SINGH GARCHA, LUDHIA NA 19 RECORD, ESPECIALLY THE SPEED POST ACKNOWLEDGMENT AT TACHED IN THE RECORD, THE LD. COUNSEL FOR THE ASSESSEE FAIRLY AGR EED THAT THE ORDER WAS DISPATCHED ON 30.12.2008 BY WAY OF SPEED POST. MORE OVER, THE ISSUE HAS BEEN DISCUSSED BY THE LD. CIT(A) IN THE IMPUGNED OR DER AND HAS GIVEN A CATEGORICAL FINDING THAT THE DEMAND NOTICE ISSUED W ITH THE ASSESSMENT ORDER WAS DATED 26.12.2008 WHICH WAS PLACED ON THE FILE BY THE ASSESSEE HIMSELF. IN VIEW OF THIS, THE GROUND RELATING TO TH E VALIDITY OF THE ASSESSMENT BEING BARRED BY LIMITATION HAS NO FORCE AND THE SAME IS ACCORDINGLY DISMISSED. 21. GROUND NO. 7 & 8 : GROUND NO. 7 & 8 OF C.O.NO. 39/CHD/2012 ARE GENERAL IN NATURE AND DO NOT REQUIRE ANY SPECIFIC A DJUDICATION. IN VIEW OF THIS, THE CROSS OBJECTIONS RAISED BY TH E ASSESSEE VIDE C.O.NO.39/CHD/2012 ARE TREATED AS PARTLY ALLOWED. C.O.NO. 5/CHD/2013 22. THE GROUNDS TAKEN BY THE ASSESSEE VIDE C.O.NO. 5/CHD/2013 ARE AS UNDER:- 1. THAT THE WORTHY CIT(A)-II, LUDHIANA IN THE FACTS AND CIRCUMSTANCES OF THE CASE HAS DELETED THE PENALTY ON THE ADDITION OF RS.28,50,000/- (16,00,000/-+ RS. 12,50,000/-) ON ACCOUNT OF CASH DEPOSITED IN THE BANK AS THE ASSESSEE HAD SUBMITTED THAT THE ADDITION HAD BEEN DELETED WITH DETAILED DIRECTIONS GIVEN IN APPELLATE ORDER AND THERE WERE A NUMBER OF OTHER POINTS WHICH COULD BE ACCEPTED IN SUPPORT OF THE EXPLANATIONS. C.O.NO. 39-C-12, C.O. NO. 5-C-2013 & ITA NOS. 1337 -C-16 & C.O NO. 5-C-2013, SHRI SOHAN SINGH GARCHA, LUDHIA NA 20 2. THAT THE WORTHY COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW, CASE LAW, FACTS AND CIRCUMSTANCES OF THE CASE IN UPHOLDING THE PENALTY ON ADDITION ON ACCOUNT OF LONG TERM CAPITAL GAIN ON SALE OF AGRICULTURAL LAND WHICH WAS OUTSIDE 8 KMS OF MUNICIPAL LIMIT AND NOT CHARGEABLE TO TAX EVEN OTHERWISE. 3. THAT THE LD. CIT(A)-II, LUDHIANA HAS ERRED IN LAW, FACTS AND CIRCUMSTANCES OF THE CASE IN PASSING THE APPELLATE ORDER AND WHEREAS IT WAS ALSO BROUGHT ON RECORD THAT THE MATTER WITH REGARD TO THE TAXABILIT Y OF CASH DEPOSITS, CAPITAL GAIN AND PASSING THE ASSESSMENT ORDER AFTER THE PERIOD OF LIMITATION, IS PENDING BEFORE THE ITAT CHANDIGARH, BENCH-B BEARING APPEAL NO.973 AND CROSS OBJECTION NO.39 OF 2012. 4. THAT THE CIT(A)-II, LUDHIANA HAS ERRED IN LAW, FACTS AND CIRCUMSTANCES OF THE CASE IN NOT DELETING THE PENALTY OR SETTING ASIDE THE PENALTY ORDER BY N OT CONSIDERING THE DETAILED SUBMISSIONS PROPERLY. 5. THAT THE PENALTY ORDER AND THE APPELLATE ORDER ARE IN CONTRAVENTION OF SECTION 274 AND THE RULES OF NATURAL JUSTICE, SO LIABLE TO SET ASIDE. 6. THAT ADDITIONS AND PENALTY IS AGAINST THE LAWS, CAS E LAWS, FACTS AND CIRCUMSTANCES OF THE CASE. 7. THAT THE RESPONDENT CRAVES LEAVE TO ADD OR AMEND ANY GAD OF CROSS-OBJECTIONS BEFORE THE APPEAL IS FINALLY HEARD OR DISPOSED OFF. 23. SO FAR AS THE GROUNDS RAISED BY C.O. NO. 5/CHD/ 2013 ARE CONCERNED, A PERUSAL OF THE SAME REVEAL THAT THE SO LE ISSUE RAISED IN THESE GROUNDS IS RELATING TO THE LEVY OF PENALTY IN RESPECT OF THE C.O.NO. 39-C-12, C.O. NO. 5-C-2013 & ITA NOS. 1337 -C-16 & C.O NO. 5-C-2013, SHRI SOHAN SINGH GARCHA, LUDHIA NA 21 ADDITIONS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF ADDITION MADE OF LONG TERM CAPITAL GAINS ON SALE OF LAND. SINCE AS PER OUR OBSERVATION MADE ABOVE, WHILE DECI DING THE CROSS OBJECTIONS NO. 39/CHD/2012, THE ISSUE REGARDING THE ADDITION OF CAPITAL GAINS HAS BEEN RESTORED TO THE FILE OF THE ASSESSIN G OFFICER, HENCE, THERE IS NO SUBSISTING ADDITION AT THIS STAGE. HENCE, THE VERY BASIS ON WHICH PENALTY WAS LEVIED HAS CEASED TO EXIST, THEREFORE, THE IMPUGNED PENALTY LEVIED U/S 271 (1)(C) OF THE ACT, AT THIS STAGE, HAS NO LEGS TO STAND AND THE SAME IS ACCORDINGLY ORDERED TO BE DELETED. HOWE VER, THE ASSESSING OFFICER WILL BE AT LIBERTY TO INITIATE THE SAME, IF HE DEEM SO FIT, IN THE LIGHT OF THE DECISION ARRIVED AT IN THE SET ASIDE I SSUE ON QUANTUM ADDITION ON ACCOUNT OF CAPITAL GAINS ON SALE OF LAN D AS DIRECTED ABOVE WHILE DISPOSING OF C.O.NO. 39/CHD/2012. THESE CROSS OBJECTIONS STANDS ALLOWED IN ABOVE TERM S. ITA NO. 1337/CHD/2016 24. IN ITA NO. 1337/CHD/2016, THE ASSESSEE HAS TAKEN FO LLOWING GROUNDS OF APPEAL: 1. THAT THE ORDER OF CIT(APPEALS) IS AGAINST THE LAW. 2. THAT THE ORDER OF CIT(APPEALS) IS AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THAT ADDITION OF AGRICULTURE INCOME OF RS.7530000 I N THE ORIGINAL ASSESSMENT ORDER IS PRIMA FACIE AFTER PASSING OF ASSESSMENT ORDER, WHICH RESULTED IN PASS ING OF ORDER UNDER SECTION 154. 4. THAT THE CIT(A) DID NOT TAKE THE FACT SERIOUSLY THA T THE ADDITION WAS WITHOUT PROVIDING ANY OPPORTUNITY TO T HE C.O.NO. 39-C-12, C.O. NO. 5-C-2013 & ITA NOS. 1337 -C-16 & C.O NO. 5-C-2013, SHRI SOHAN SINGH GARCHA, LUDHIA NA 22 ASSESSEE AND FURTHER NON SERVICE OF ORDER THE APPEL LATE RIGHT OF THE ASSESSEE WAS SNATCHED WITH REGARD TO ADDITION OF RS.7530000. 5. THAT WHEREAS THE ASSESSEE WAS UNABLE TO FILE APPEAL IN THE ABSENCE OF SERVICE OF THE ORDER MAKING ADDITION OF RS.7530000, THE MATTER KEPT THROUGH THIS APPEAL OR RECTIFICATION LETTER OF THE ASSESSEE WAS TO BE DECI DED, BUT THE CIT(A) DID NOT DECIDE THE ISSUE NEITHER IN RESP ONSE TO THE RECTIFICATION LETTER NOR THROUGH THIS APPEAL . 6. THAT THE CIT(APPEALS) DID NOT DECIDE THE ISSUE WHET HER AO WAS RIGHT IN KEEPING THE ADDITION OF RS.2850000 AFTER HAVING THE LATEST ASSESSMENT ORDER ON RECORD WHEREIN A SUM OF RS.7530000 WAS ADDED AS AGRICULTUR E INCOME, AND WHEREAS THE AO FAILED TO PASS THE ORDER IN RESPECT OF RECTIFICATION LETTER FILED IN THIS REGAR D. 7. THAT THE SUM OF RS.7530000 HAS BEEN TAKEN INTO ACCO UNT TWICE WHILE CALCULATING INCOME OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2006-07. 8. THAT THE ORDER OF THE AO AS WELL AS THE CIT (A) HAS VIOLATED THE RULES OF NATURAL JUSTICE. 9. THAT THE RESPONDENT CRAVES LEAVE TO ADD OR AMEND AN Y GROUND OF APPEAL BEFORE THE APPEAL IS FINALLY HEA RD OR DISPOSED OFF. 25. SO FAR AS THE ITA NO. 1337/CHD/2016 IS CONCERNE D, WHEREBY, THE ASSESSEE HAS CHALLENGED THE VALIDITY OF THE RECTIFI CATION ORDER U/S 154 OF THE ACT, THE FACTS ON THE FILE SPEAK ITSELF THAT TH E SECOND ORDER PASSED BY THE ASSESSING OFFICER IS NOT A VALID ORDER. THE ASS ESSING OFFICER SUBSEQUENT TO PASSING AND SERVING THE FIRST UNDATED ASSESSMENT ORDER FILLED IN THE LACUNAS LEFT I.E. REPRODUCED THE CONT ENTS OF THE RELEVANT LETTERS DATED 23.10.2008 AND 28.11.2008, FILLED IN THE DATE OF ORDER WITH INK AND IN THE END OF THE ORDER ADDED THE AMOUNT O F AGRICULTURAL INCOME OF RS. 75.30 LACS WITH INK (PEN) WITHOUT APPLICAT ION OF MIND WHICH HAS C.O.NO. 39-C-12, C.O. NO. 5-C-2013 & ITA NOS. 1337 -C-16 & C.O NO. 5-C-2013, SHRI SOHAN SINGH GARCHA, LUDHIA NA 23 RESULTED INTO DOUBLE ADDITION OF THE SAME AMOUNT. T HE ASSESSEE IN THE RETURN OF INCOME CLAIMED AN AMOUNT OF RS. 75.30 LAC S AS AGRICULTURE INCOME ON ACCOUNT OF SALE OF AGRICULTURAL LAND. THE A.O. ORIGINALLY MADE ADDITION BY WAY OF BIFURCATION OF THE SAID AMO UNT INTO UNEXPLAINED DEPOSITS AND CAPITAL GAINS AS DISCUSSED ABOVE. THE A.O. , HOWEVER, IN THE SECOND ORDER, WHILE FILLING IN THE LACUNAE LEFT IN THE FIRST ORDER AGAIN MISTAKENLY ADDED THE SAME AMOUNT AS AG RICULTURAL INCOME FOR COMPUTATION PURPOSES INCREASING THE TAX LIABILI TY OF THE ASSESSEE, WRONGLY AND ILLEGALLY. THE ACT OF THE ASSESSING OF FICER IN MODIFYING THE ORIGINAL ASSESSMENT ORDER WRONGLY AND ILLEGALLY IS NOT APPRECIATED. THE LD. CIT(A) ALSO FAILED TO TAKE NOT OF THE BLATA NT WRONGFUL ACT ON THE PART OF THE ASSESSING OFFICER TO DISMISS THE APPEAL OF THE ASSESSEE IN A MECHANICAL MANNER. THERE IS NO JUSTIFICATION ON THE PART OF THE ASSESS ING OFFICER IN ADDING THE SAME AMOUNT TWICE. NEITHER THERE IS ANY EVIDENCE NOR THE ASSESSEE HAS EVER CLAIMED ANY EXTRA AGRICULTURAL IN COME OF RS. 75.30 LACS EXCEPT THE INCOME CLAIMED ON ACCOUNT OF SALE OF LAND WHICH ISSUE HAS ALREADY BEEN DISCUSSED AS ABOVE. 26. IN VIEW OF THE ABOVE, IMPUGNED ORDER OF THE CIT (A) DATED 26.9.2016 IS SET ASIDE AND THE ORDER PASSED BY THE ASSESSING OFFICER DATED 11.2.2011 U/S 154 OF THE ACT IS HELD WRONG, ILLEGAL, NULL AND VOID. C.O.NO. 39-C-12, C.O. NO. 5-C-2013 & ITA NOS. 1337 -C-16 & C.O NO. 5-C-2013, SHRI SOHAN SINGH GARCHA, LUDHIA NA 24 CONSEQUENTLY, THE ADDITIONAL DEMAND PURSUANT TO THE ABOVE ORDER PASSED BY THE ASSESSING OFFICER U/S 154 OF THE ACT STANDS DELETED. IN THE RESULT, THIS APPEAL OF THE ASSESSEE IS HEREB Y ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 31.10.2019. SD/- SD/- ( $ % & '# / ANNAPURNA GUPTA) () / ACCOUNTANT MEMBER ( / SANJAY GARG) / JUDICIAL MEMBER DATED : 31.10 .2019 .. '+ ',- .-' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. # /' / CIT 4. # /' ( )/ THE CIT(A) 5. -01 '2 , % 2 , 34516 / DR, ITAT, CHANDIGARH 6. 15 7$ / GUARD FILE '+ # / BY ORDER, 8 / ASSISTANT REGISTRAR