JAI DEEP SINGH, JAIPUR V. INCOME TAX OFFICER, WARD-7-2, JAIPUR

ITA 1030/JPR/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 3127 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 8 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-06-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 07-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RUNI PAL ACIT A
• Keywords: Reopening of assessment; Unexplained investment; Principle of natural justice; Difference of opinion; Competent authority; Assessment record; Change of opinion; Reassessment proceedings; Capital Gains
• Section: 143(3); 54B; 292BB; 143(2); 13; 22; 147; 69; 148; 144

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S,B JAIPUR JH LAANHI XKSLKBZ] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI VIKRAM SING H YADAV, AM VK;DJ VIHY LA-@ ITA. NO. 1030/JP/2018 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2007-08 SHRI JAIDEEP SINGH VILLAGE & POST- LADANA VIA PHAGI, DISTRICT-JAIPUR. CUKE VS. THE ITO, WARD-7(2), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: BJXPS 1921 F VIHYKFKHZ@ APPELLAN T IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI P.C. PARWAL (C.A.) JKTLO DH VKSJ LS @ REVENUE BY : SMT. RUNI PAL (ACIT) A LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 11/03/2021 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT : 02/06/2021 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LD. CIT(A)-1, JODHPUR DATED 18.07.2018 FOR THE ASSESSME NT YEAR 2007-08 WHEREIN THE ASSESSEE HAS RAISED THE FOLLOWING GROUN DS OF APPEAL:- 1. THAT THE AUTHORITIES BELOW HAVE IN CONFIRMING T HE PROCEEDINGS INITIATED U/S 147 OF THE IT ACT, 1961 BY THE ITO, W ARD 7(2), JAIPUR. 2. THAT THE PREJUDICE TO THE ABOVE, THE AUTHORITIES BELOW FURTHER ERRED IN CONFIRMING THE ADDITION OF RS. 50,00,000/- ON ACCOUNT OF ALLEGED UNEXPLAINED CASH PAYMENT. ITA NO. 1030/JP/2018 SHRI JAIDEEP SINGH VS. ITO 2 2. DURING THE COURSE OF HEARING, THE LD AR SUBMITTE D THAT THE ASSESSEE IS AN AGRICULTURALIST AND HAS NO SOURCE OF INCOME OTHER THAN AGRICULTURE INCOME FROM THE ANCESTRAL LAND RECEIVED IN JAGIR. HE HAS FILED THE RETURN OF INCOME FOR THE YEAR UNDER CONSI DERATION AS KARTA OF HIS HUF ON 31.07.2007 DECLARING LTCG ON SALE OF AGR ICULTURAL LAND AT NIL, INTEREST ON FDR RS.2,37,763/- AND AGRICULTURE INCOM E OF RS.3 LACS. THE INCOME OF THE HUF WAS ASSESSED BY THE AO U/S 143(3) VIDE ORDER DT. 07.12.2009 BY ACCEPTING THE INCOME DECLARED. SUBSEQ UENTLY, THE AO ISSUED NOTICE U/S 148 DT. 28.03.2014 IN THE NAME OF ASSESSEE. THE ASSESSEE SOUGHT COPY OF REASONS RECORDED FOR REOPEN ING VIDE LETTER DT. 17.10.2014. THEREAFTER VIDE LETTER DT. 16.01.2015, HE AGAIN REQUESTED TO PROVIDE THE COPY OF REASONS RECORDED AND STATED THA T THE RETURN ALREADY FILED WITH ITO, WARD-2(3) MAY BE TREATED AS RETURN FILED IN RESPONSE TO SAID NOTICE. IN RESPONSE TO SAME, ASSESSEE WAS PROV IDED TWO COPIES OF REASONS RECORDED BY AO, ONE DT. 10.03.2014 AND OTHE R DT. 24.03.2014. IN THE REASONS DT. 10.03.2014, AO ON THE BASIS OF S ALE DEED AVAILABLE WITH HIM STATED THAT ASSESSEE, ALONG WITH 5 OTHER C O-OWNERS, HAS PURCHASED A LAND BEARING KHASRA NO.388 FROM SH. GAN GA RAM ON 24.05.2006 FOR RS.1,87,20,000/- IN WHICH ASSESSEES SHARE COMES TO RS.31,20,000/-. THIS LAND WAS ACQUIRED BY RIICO ON 16.09.2017 AGAINST WHICH COMPENSATION OF RS.2,05,72,485/- WAS RECEIVED IN WHICH ASSESSEES SHARE IS RS.34,28,748/- AND THUS, THERE IS SHORT TERM CAPITAL GAIN OF RS.3,08,748/- (34,28,747-31,20,000). HENCE, INCOME ESCAPED ASSESSMENT IN RESPECT OF THE ASSESSEE AMOUNTS TO RS .34,28,748/- (31,20,000 + 3,08,748). IN THE REASONS DT. 24.03.20 14, THE AO ON THE BASIS OF SALE DEED AVAILABLE WITH HIM STATED THAT A SSESSEE HAS PURCHASED A LAND BEARING KHASRA NO.325 ON 22.05.200 6 FOR ITA NO. 1030/JP/2018 SHRI JAIDEEP SINGH VS. ITO 3 RS.3,14,95,875/- OUT OF WHICH RS.1 CRORE HAS BEEN P AID TILL 22.05.2006. SINCE ASSESSEE IS NOT FILING THE RETURN OF INCOME, SOURCE OF INVESTMENT OF RS.1 CRORES REMAINS UNEXPLAINED AND THUS, INCOME TO THAT EXTENT HAS ESCAPED ASSESSMENT. 3. IT WAS SUBMITTED BY THE LD AR THAT AGAINST FIRST REASONS RECORDED BY AO, THE ASSESSEE VIDE REPLY DT. 21.01.2015 SUBMI TTED THAT HE HAS NOT PURCHASED ANY SUCH LAND AND THUS, PROCEEDINGS SO IN ITIATED IS BAD IN LAW AND BE CANCELLED. AGAINST SECOND REASONS RECORDED B Y AO, ASSESSEE VIDE REPLY DT.21.01.2015 SUBMITTED THAT ONLY RS.50 LACS WAS PAID ON 22.05.2006 FOR PURCHASE OF LAND AS AGAINST RS.1 CRO RE STATED IN THE REASONS WHICH IS CONSIDERED IN THE RETURN OF M/S JA IDEEP SINGH HUF. FURTHER ASSESSMENT IN CASE OF M/S JAIDEEP SINGH HUF HAS ALREADY BEEN COMPLETED U/S 143(3) AND THUS REOPENING OF THE CASE AMOUNTS TO CHANGE OF OPINION WHICH IS NOT PERMISSIBLE IN VIEW OF THE DECISION OF HONBLE SUPREME COURT IN CASE OF CIT VS. KELVINATOR OF INDIA. THE AO WITHOUT DISPOSING THE OBJECTIONS ISSUED SHOW CAUSE NOTICE DT. 04.02.2015 IN WHICH HE DID NOT TAKE COGNIZANCE OF T HE REASONS RECORDED U/S 148 DT. 10.03.2014. HOWEVER, IN RESPECT OF SECO ND REASONS RECORDED U/S 148 DT. 24.03.2014, HE REQUIRED THE ASSESSEE TO EXPLAIN THE SOURCE OF CASH PAYMENT OF RS.50 LACS ON PURCHASE OF LAND, CALCULATION OF CAPITAL GAIN ON SALE OF LAND AND SOURCE OF CASH DEPOSIT OF RS.20 LACS IN THE BANK ACCOUNT. ACCORDINGLY, THE AO ASSESSED THE INCOME AT RS.1,57,91,730/- BY MAKING FOLLOWING ADDITIONS:- UNDISCLOSED SHORT TERM CAPITAL GAIN RS.87,91, 731/- UNEXPLAINED CASH PAYMENT RS.50,00, 000/- ITA NO. 1030/JP/2018 SHRI JAIDEEP SINGH VS. ITO 4 UNEXPLAINED CASH DEPOSIT RS.20,0 0,000/- 4. IT WAS SUBMITTED THAT BEFORE LD. CIT(A), THE ASS ESSEE CHALLENGED THE REOPENING OF ASSESSMENT. THE LD. CIT(A), HOWEVE R, UPHELD THE VALIDITY OF REOPENING BY GIVING FOLLOWING FINDINGS: - (A) THE AO HAS RECEIVED SPECIFIC INFORMATION FROM THE D EPARTMENT REGARDING THE INCOME WHICH WAS LIKELY TO HAVE ESCAP ED ASSESSMENT IN CASE OF THE ASSESSEE. THERE ARE PLETH ORA OF DECISIONS IN WHICH IT IS HELD THAT THE REASSESSMENT NOTICE ISSUED ON THE BASIS OF INFORMATION RECEIVED FROM THE INVES TIGATION WING OF THE DEPARTMENT IS VALID. (B) NO RETURN OF INCOME HAS BEEN FILED BY THE ASSESSEE FOR AY UNDER CONSIDERATION AND THUS, NO REGULAR ASSESSMENT ORDER WAS PASSED IN THIS CASE EARLIER. (C) THE WRONG MENTION OF FIGURES IN THE NOTICE U/S 148 OF THE ACT IS COVERED BY THE PROVISIONS OF SECTION 292B OF THE AC T WHICH PROTECT SUCH NOTICES/ SUMMONS WHICH MAY HAVE SOME M ISTAKE, DEFECT OR OMISSION BUT ARE OTHERWISE IN CONFORMITY WITH THE INTENT AND PURPOSE OF THE ACT. FURTHER, NOTICE U/S 148 IS ONLY A PROCEDURAL REQUIREMENT BY WAY OF INFORMATION TO THE ASSESSEE THAT HIS/HER INCOME CHARGEABLE TO TAX HAS ESCAPED A SSESSMENT WITHIN MEANING OF SECTION 147 OF THE ACT AND ASKING FOR FURTHER INFORMATION. THE PRIMARY REQUIREMENT IS TO EXAMINE WHETHER ANY PREJUDICE OR CONFUSION WAS CAUSED TO THE ASSESSEE. IN THE SHOW ITA NO. 1030/JP/2018 SHRI JAIDEEP SINGH VS. ITO 5 CAUSE NOTICE DT. 04.02.2015 ISSUED BY THE AO, HE SP ECIFICALLY REQUIRED THE ASSESSEE TO FURNISH DETAILS AND EVIDEN CES TO EXPLAIN THE SOURCE OF PAYMENT OF RS.50 LACS (CORRECT FIGURE ) TOWARDS PURCHASE OF PROPERTY. (D) THERE IS NO FORCE IN THE APPELLANTS CONTENTION THA T NON-ISSUANCE OF NOTICE U/S 143(2) RENDERED ENTIRE PROCEEDINGS IN VALID IN LIGHT OF THE DECISION OF HONBLE KERALA HIGH COURT IN CASE O F K.J. THOMAS VS. CIT (2008) 301 ITR 301 WHEREIN IT WAS HELD THAT THE PROCEDURE U/S 143(2) OF THE ACT IS TO ENSURE THAT A N ADVERSE ORDER IS ISSUED ONLY AFTER PROPER OPPORTUNITY IS GI VEN TO THE ASSESSEE AND IF SUCH AN OPPORTUNITY IS GIVEN THEN N ON-ISSUANCE OF 143(2) NOTICE IS IMMATERIAL. (E) THE ASSESSEES CONTENTION THAT REASSESSMENT PROCEED INGS HAS BEEN INITIATED ON MERE CHANGE OF OPINION IS INCORRE CT AS MERE PRODUCTION OF BOOKS OF ACCOUNTS OR OTHER EVIDENCE F ROM WHICH THE AO COULD HAVE WITH DUE DILIGENCE DISCOVERED THE MAT ERIAL EVIDENCE DOES NOT NECESSARILY AMOUNT TO DISCLOSURE WITHIN MEANING OF PROVISO TO SECTION 147 OF THE ACT. (F) AO HAS ISSUED NOTICE U/S 148 OF THE ACT ON 28.03.20 14 AFTER RECORDING PROPER REASONS, THE ASSESSEE DULY PARTICI PATED IN ASSESSMENT PROCEEDINGS BY PROVIDING NECESSARY DETAI LS AND THE AO DULY ADDRESSED THESE OBJECTIONS IN THE ASSESSMEN T ORDER. THEREFORE, PRINCIPAL LAID DOWN BY APEX COURT IN CAS E OF GKN ITA NO. 1030/JP/2018 SHRI JAIDEEP SINGH VS. ITO 6 DRIVESHAFTS (INDIA) LTD. VS. ITO (2003) 259 ITR 19 WERE FOLLOWED PERFECTLY. 5. THE LD. AR SUBMITTED THAT FROM THE ABOVE FACTS, IT CAN BE NOTED THAT AO RECORDED THE REASONS U/S 148 TWICE, ONE DT. 10.03.2014 AND ANOTHER DT. 24.03.2014. THIS ITSELF SHOWS THAT THE AO WAS NOT AWARE THAT WHICH INCOME HAS ESCAPED ASSESSMENT AND WHETHE R ANY INCOME IN FACT HAS ESCAPED ASSESSMENT. IN REASONS DT.10.03.20 14, HE HAS REFERRED TO THE INVESTMENT MADE IN LAND, ACQUISITION OF SUCH LAND BY RIICO RESULTING INTO SHORT TERM CAPITAL GAIN BUT SUBSEQUE NTLY HE HIMSELF TOOK NO COGNIZANCE OF THE SAME. IN THE SECOND REASONS DT . 24.03.2014, HE REFERRED TO THE INVESTMENT MADE IN LAND OF RS.1 CRO RE WHEREAS SUBSEQUENTLY HE HIMSELF ADMITTED THAT THIS AMOUNT I S INCORRECT. FURTHER IN BOTH THE REASONS HE HAS STATED THAT AS PER THE I NFORMATION AVAILABLE IN THE SALE DEED ASSESSEE HAS PURCHASED CERTAIN PRO PERTIES WHEREAS THERE IS NO SALE DEED EXECUTED BY THE ASSESSEE FOR PURCHASE OF PROPERTY. IT MAY ALSO BE NOTED THAT IN THE SECOND R EASONS DT. 24.03.2014, AO HAS REFERRED TO AGREEMENT DT. 22.05. 2006. IN THIS AGREEMENT, THERE IS REFERENCE OF PAYMENT OF RS.50 L ACS WHEREAS IN THE REASONS RECORDED THE AMOUNT PAID IS STATED AT RS.1 CRORE. ALL THESE FACTS SHOWS THAT AO HAS RECORDED THE REASONS ON WHIMS AND FANCY WITHOUT HAVING INFORMATION AVAILABLE WITH HIM OR WITHOUT AP PLYING MIND TO THE INFORMATION, IF ANY, AVAILABLE WITH HIM AND WITHOUT CONDUCTING ANY ENQUIRY OF HIS OWN. THEREFORE, ON THE BASIS OF SUCH VAGUE REASONS, WHICH LEFT THE ASSESSEE GUESSING AS TO WHICH INCOME ESCAPED ASSESSMENT, NOTICE ISSUED U/S 148 AND CONSEQUENT AS SESSMENT FRAMED ITA NO. 1030/JP/2018 SHRI JAIDEEP SINGH VS. ITO 7 U/S 147 IS ILLEGAL AND BAD IN LAW. IN THIS REGARD, RELIANCE WAS PLACED ON THE FOLLOWING CASES:- PCIT VS. RMG POLYVINYL (I) LTD. (2017) 156 DTR 79 ( DEL.) SH. KULWANT SINGH VS. ITO (ITA NO.841/JP/18 ORDER DT.20.12.2018) (JAIPUR) (TRIB) 6. IT WAS FURTHER SUBMITTED THAT AO PROVIDED THE RE ASONS AFTER ASSESSEE EXPLAINED VIDE HIS LETTER DT. 16.01.2015 T HAT HE HAS ALREADY FILED THE RETURN WITH ITO, WARD-2(3) IN THE HUF CAP ACITY AND THE SAME BE TREATED AS A RETURN FILED IN RESPONSE TO THE NOT ICE ISSUED U/S 148. THEREAFTER THE ASSESSEE SEPARATELY OBJECTED TO THE REASONS RECORDED BY AO DT. 10.03.2014 & 24.03.2014 VIDE LETTER DT. 21.0 1.2015. THE AO, HOWEVER, WITHOUT DISPOSING THE OBJECTIONS HAS ISSUE D SHOW CAUSE NOTICE DT. 04.02.2015 BUT THE FIGURES OF RS.50 LACS, RS.4, 02,87,606/- AND RS.20 LACS MENTIONED THEREIN HAS NO LIVE LINK WITH THE RE ASONS RECORDED BY HIM. FURTHER THE AO HIMSELF HAS DROPPED THE REASONS RECORDED ON 10.03.2014 WITHOUT ANY INDEPENDENT ORDER DISPOSING THE OBJECTIONS. THE LD. CIT(A) HAS IN FACT ACCEPTED THIS POSITION B Y STATING THAT AO HAS DULY ADDRESSED THESE OBJECTIONS IN THE ASSESSMENT O RDER. THIS IS NOT AS PER LAW SINCE AO IS REQUIRED TO DISPOSE OFF THE OBJ ECTIONS BEFORE PASSING THE ORDER U/S 147. FURTHER EVEN IN THE ASSESSMENT O RDER THERE IS NO WHISPER DISPOSING THE OBJECTIONS OF THE ASSESSEE. T HUS, THE ASSESSMENT FRAMED BY THE AO WITHOUT DISPOSING THE OBJECTIONS I S ILLEGAL AND BAD IN LAW FOR WHICH RELIANCE WAS PLACED ON THE FOLLOWING CASES:- GKN DRIVESHAFTS INDIA LTD. VS. ITO (2003) 259 ITR 1 9 (SC) ITA NO. 1030/JP/2018 SHRI JAIDEEP SINGH VS. ITO 8 M/S K.C. MERCANTILE LTD. VS. DCIT (DBIT APPEAL NO. 292/2016) (RAJ.) 7. IT WAS FURTHER SUBMITTED THAT NO ASSESSMENT U/S 147 CAN BE MADE UNLESS NOTICE U/S 143(2) IS ISSUED WITHIN THE PRESCRIBED TIME. IN THE PRESENT CASE, FROM THE ASSESSMENT ORDER ITSELF, IT IS EVIDENT THAT AO HAS NOT ISSUED ANY NOTICE U/S 143(2). THIS FACT HAS BEEN ACCEPTED BY THE LD. CIT(A) BUT STILL HE UPHELD THE ORDER PASSED BY THE AO BY RELYING ON THE DECISION OF HONBLE KERALA HIGH COURT IN CAS E OF K.J. THOMAS VS. CIT (2008) 301 ITR 301. IT MAY, HOWEVER, BE NOTED T HAT HONBLE KERALA HIGH COURT ITSELF IN A LATER DECISION IN CASE OF TR AVANCORE DIAGNOSTICS PVT. LTD. VS. ACIT (2017) 390 ITR 167 HAS HELD THAT IN CASE OF PROCEEDINGS INITIATED U/S 143(3) READ WITH SECTION 147, REQUIREMENT TO ISSUE A NOTICE U/S 143(2) IS MANDATORY AND SECTION 292BB DOES NOT IN ANY MANNER GRANT ANY PRIVILEGE TO AO IN DISPENSING WITH ISSUANCE OF SUCH A NOTICE. FURTHER RELIANCE WAS PLACED ON THE F OLLOWING CASES:- M/S KAIZEN ORGANICS PVT. LTD. VS. ACIT ITA NO.834/J P/2017 ORDER DT.19.12.2018 (JAIPUR) (TRIB.) RADHE SHAM JAIN DIAMOND JEWELLERS PVT. LTD. VS. DCI T (2020) 193 DTR 59 (CHD.) (TRIB.) 8. IT WAS SUBMITTED THAT THE ASSESSEE IN RESPONSE T O NOTICE U/S 148 VIDE LETTER DT. 16.01.2015 HAS SPECIFICALLY POINTED OUT THAT RETURN HAS BEEN FILED FOR WHICH ASSESSMENT IS ALSO COMPLETED B Y ITO, WARD-2(3) U/S 143(3) OF THE ACT AND THE RETURN SO FILED IN CA PACITY OF KARTA OF HUF BE TREATED AS RETURN FILED IN RESPONSE TO NOTICE U/ S 148. THE AO TOOK NO ITA NO. 1030/JP/2018 SHRI JAIDEEP SINGH VS. ITO 9 OBJECTION TO THE SAME. THEREFORE, THE FINDING OF LD . CIT(A) THAT ASSESSEE HAS NOT FILED THE RETURN AND NO REGULAR AS SESSMENT ORDER WAS PASSED IS INCORRECT. IN FACT THE LD. CIT(A) TAKING COGNIZANCE OF THE SAID RETURN HAS DELETED THE ADDITION ON ACCOUNT OF LTCG MADE BY THE AO. IN COURSE OF ASSESSMENT PROCEEDINGS OF HUF, THE ASSESS EE HAS EXPLAINED THE MANNER OF CALCULATION OF CAPITAL GAIN WHERE AMO UNT OF COMPENSATION RECEIVED AT RS.4,02,87,606/- AND PAYME NT MADE TO THE PERSONS FROM WHOM THE LAND WAS PURCHASED AT RS.3,14 ,95,874/- (2,64,95,874 + 50,00,000) RESULTED INTO CAPITAL GAI N OF RS.87,91,732/- AGAINST WHICH DEDUCTION U/S 54B WAS CLAIMED. CONSID ERING THE SAME, THE AO ASSESSED THE INCOME OF HUF U/S 143(3) VIDE O RDER DT.07.12.2009 BY ACCEPTING THE DECLARED INCOME. THUS, WHEN ASSESS MENT HAS ALREADY BEEN COMPLETED/S 143(3), THEN REOPENING THE CASE ON SAME ISSUE BEYOND FOUR YEARS AMOUNTS TO CHANGE OF OPINION WHIC H IS ILLEGAL AND BAD IN LAW FOR WHICH RELIANCE WAS PLACED ON THE FOL LOWING CASES:- ACIT VS. MARICO LTD. (2020) 190 DTR 109 (SC) CIT VS. INDIA CEMENTS LTD. (2019) 181 DTR 105 (MAD. ) (HC) IN VIEW OF ABOVE, NOTICE ISSUED U/S 148 AND CONSEQU ENT ASSESSMENT FRAMED U/S 147 IS ILLEGAL AND BAD IN LAW AND THE SA ME BE QUASHED. 9. PER CONTRA, THE LD. DR HAS RELIED ON THE FINDING S OF THE LOWER AUTHORITIES AND OUR REFERENCE WAS DRAWN TO THE FIND INGS OF THE LD. CIT(A) WHICH ARE CONTAINED AT PARA 4.3.2 TO 4.4 OF HIS ORDER WHICH READ AS UNDER:- ITA NO. 1030/JP/2018 SHRI JAIDEEP SINGH VS. ITO 10 4.3.2 IT IS AN ADMITTED FACT THAT THE APPELLANT HA D NOT FILED HIS RETURN OF INCOME SHOWING THE PURCHASE/SAL E TRANSACTION OF PLOT. ACCORDINGLY, THE AO ISSUED NOT ICE U/S 148 OF THE ACT, FURNISHED THE REASONS FOR REOPENING TO THE APPELLANT AND DULY DISPOSED OFF THE OBJECTIONS RAISED BY THE APPE LLANT WHILE DISCUSSING THE ISSUE FOR WHICH HE HAD ISSUED NOTICE U/S. 148. THE APPELLANT HAS ALSO DULY CO-OPERATED WITH THE AO AND HAS FURNISHED VARIOUS DETAILS CALLED FOR BY HIM DURING THE COURSE OF RE-ASSESSMENT PROCEEDINGS. THEREFORE, HE CANNOT TAK E A PLEA NOW THAT THE PROCEEDINGS WERE INVALID. THE APPELLAN T HAD NOT FILED THE INCOME TAX RETURN FOR THE AY 2012-13. THE HON'BLE DELHI HIGH COURT IN THE CASE OF HONDA SIEL POWER PR ODUCTS LTD V. DCIT (2011) 197 TAXMAN 415 (DEL) HAS STATED THAT THE LAW POSTULATES A DUTY ON EVERY ASSESSEE TO DISCLOSE FUL LY AND TRULY ALL MATERIAL FACTS FOR ITS ASSESSMENT. THE DISCLOSU RE MUST BE TRUE AND FULL. MATERIAL FACTS ARE THOSE FACTS WHICH , IF TAKEN INTO ACCOUNT, WOULD HAVE AN ADVERSE AFFECT ON THE ASSESS EE BY HIGHER ASSESSMENT OF INCOME THAN THE ONE ACTUALLY M ADE. OMISSION TO DISCLOSE MAY BE DELIBERATE OR INADVERTE NT. IT IS NOT RELEVANT PROVIDED THERE IS OMISSION OR FAILURE ON T HE PART OF THE ASSESSEE. THE LATTER CONFERS JURISDICTION TO RE OPEN THE ASSESSMENT. THE HON'BLE COURT FURTHER HELD THAT MER ELY BECAUSE MATERIAL LIES EMBEDDED IN THE MATERIAL OR E VIDENCE, WHICH THE AO COULD HAVE UNCOVERED BUT DID NOT UNCOV ER, IS NOT A GOOD GROUND TO DENY OR STRIKE DOWN THE NOTICE OF RE- ASSESSMENT. WHERE THE AO COULD HAVE FOUND OUT THE T RUTH BUT HE DID NOT, DOES NOT PRECLUDE THE AO FROM EXERCISIN G THE POWER OF RE-ASSESSMENT TO BRING THE ESCAPED INCOME. THE SLP FILED AGAINST THIS DECISION OF THE HON'BLE DELHI HI GH COURT HAS BEEN DISMISSED BY THE HON'BLE SUPREME COURT (211-TI OL-72- SC-IT). THUS, THE APPELLANT CONTENTION THAT THE AO HAD NOT COMPLIED WITH THE BASIC CONDITIONS AS ENVISAGED U/S . 147, 148 & 151 IS REJECTED BEING DEVOID OF ANY MERIT. 4.3.3 AS REGARDS THE APPELLANTS OBJECTION REGARDIN G WRONG MENTION OF FIGURES IN THE NOTICE U/S 148 OF THE ACT , IT MAY ITA NO. 1030/JP/2018 SHRI JAIDEEP SINGH VS. ITO 11 REFER TO THE PROVISIONS OF SECTION 292B OF THE ACT WHICH IS REPRODUCED AS BELOW:- RETURN OF INCOME, ETC., NOT TO BE INVALID ON CERTA IN GROUNDS. 292B. NO RETURN OF INCOME, ASSESSMENT, NOTICE, SUMM ONS OR OTHER PROCEEDING, FURNISHED OR MADE OR ISSUED OR TA KEN OR PURPORTED TO HAVE BEEN FURNISHED OR MADE OR ISSUED OR TAKEN IN PURSUANCE OF ANY OF THE PROVISIONS OF THIS ACT SHAL L BE INVALID OR SHALL BE DEEMED TO BE INVALID MERELY BY REASON OF A NY MISTAKE, DEFECT OR OMISSION IN SUCH RETURN OF INCOME, ASSESS MENT, NOTICE, SUMMONS OR OTHER PROCEEDING IF SUCH RETURN OF INCOM E, ASSESSMENT, NOTICE, SUMMONS OR OTHER PROCEEDING IS IN SUBSTANCE AND EFFECT IN CONFORMITY WITH OR ACCORDING TO THE I NTENT AND PURPOSE OF THIS ACT.]' 4.3.4 THIS SECTION IS TO PROTECT SUCH NOTICES/SUMMO NS, RETURNS ETC. WHICH MAY HAVE SOME MISTAKE, DEFECT OR OMISSION BUT ARE OTHERWISE IN CONFORMITY WITH THE I NTENT AND PURPOSE OF THE ACT. FURTHERMORE, IT MAY BE NOTED TH AT NOTICE U/S 148 IS ONLY A PROCEDURAL REQUIREMENT BY WAY OF INFORMATION TO THE ASSESSEE THAT HIS/HER INCOME CHA RGEABLE TO TAX HAS ESCAPED ASSESSMENT WITHIN MEANING OF SEC. 1 47 OF THE ACT AND ASKING FOR FURTHER INFORMATION. IN THIS CONNECTION, I ALSO DRAW STRENGTH FROM THE RATIO LAID DOWN BY TH E HON'BLE DELHI HIGH COURT IN THE CASE OF CIT V/S JAGAT NOVEL EXHIBITORS (P) LTD. [2012] 18 TAXMANN.COM 138 (DELHI) WHEREIN THE HON'BLE COURT HELD THAT THE DEFECTIVE NOTICE/SUMMON , IF IT SERVES INTENT AND PURPOSE OF ACT, I.E., TO INFORM A SSESSEE, AND THERE IS NO CONFUSION IN ASSESSEE'S MIND ABOUT INITIATION OF PROCEEDINGS AGAINST HIM, IS PROTECTED UNDER SECT ION 292B OF THE ACT. IN THE SAID DECISION, THE HON'BLE COURT IN PARA-47 CLEARLY HELD THAT THE PRIME QUESTION TO BE CONSIDER ED WAS WHETHER THERE WAS PREJUDICE AGAINST THE ASSESSEE, I F THE RECIPIENT OF NOTICE WAS NOT IN DOUBT THAT IT WAS ME ANT FOR ITA NO. 1030/JP/2018 SHRI JAIDEEP SINGH VS. ITO 12 HIM, THAN THE DEFECT IS NOT FATAL. THE PRIMARY REQU IREMENT IS TO EXAMINE WHETHER ANY PREJUDICE OR CONFUSION WAS C AUSED TO THE ASSESSEE. HOWEVER, IN THE SHOW-CAUSE NOTICE DAT ED 04- 02-2015 ISSUED BY THE AO, HE SPECIFICALLY REQUIRED THE ASSESSEE TO FURNISH DETAILS AND EVIDENCES TO EXPLAI N THE SOURCE OF PAYMENT OF RS. 50,00,000/- (THE CORRECT F IGURE) TOWARDS PURCHASE OF PROPERTY. 4.3.5 FURTHER, I FIND NO FORCE IN THE APPELLANTS C ONTENTION THAT NON-ISSUANCE OF NOTICE U/S 143(2) RENDERED ENTIRE P ROCEEDINGS INVALID IN THE LIGHT OF DECISION OF HONBLE KERALA HIGH COURT IN THE CASE OF K.J. THOMAS V/S CIT [2008] 301 ITR 301 (KER.) WHEREIN IT WAS HELD THE PROCEDURE U/S 143(2) OF THE ACT IS TO ENSURE THAT AN ADVERSE ORDER IS ISSUED ONLY AFTER P ROPER OPPORTUNITY IS GIVEN TO THE ASSESSEE AND IF SUCH AN OPPORTUNITY IS GIVEN THEN NON-ISSUANCE OF 143(2) NOTICE IS IMMATER IAL. THE HON'BLE KERALA HIGH COURT IN THIS CASE HELD AS BELO W:- 'THE PROCEDURE UNDER SECTION 143(2) IS TO ENSURE TH AT AN ADVERSE ORDER IS ISSUED ONLY AFTER PROPER OPPORTUNI TY IS GIVEN TO THE ASSESSEE. WHERE IT WAS CONCEDED THAT T HE ASSESSEE GOT OPPORTUNITY TO FILE REPLY AND THE DETA ILED REPLY WAS IN FACT FILED AND THE REASSESSMENT NOTICE AND THE FINAL ORDER WERE ALSO ISSUED WITHIN THE TIME LIMIT PRESCRIBED UNDER THE ACT, THERE WAS NO REASON TO INTERFERE WIT H THE ORDER OF ASSESSMENT ON THE GROUND THAT WRITTEN NOTI CE WAS NOT ISSUED TO THE ASSESSEE BEFORE THE COMPLETION OF ASSESSMENT UNDER SECTION 143(2).' IN THE APPELLANT'S CASE, PROPER NOTICE U/S. 148 OF THE ACT WAS ISSUED BY THE AO AND SUBSEQUENTLY NOTICES U/S 142(1 ) OF THE ACT WERE ISSUED BY THE AO AND ASSESSMENT WAS COMPLETED AFTER HEARING THE APPELLANT AND GIVING HIM ENOUGH OPPORTU NITIES TO FILE DETAILS IN RESPECT OF RETURN OF INCOME FILED BY HER , THEREFORE, THE RATIOS LAID DOWN BY THE HON'BLE DELHI AND KERALA HI GH COURT (SUPRA) ARE SQUARELY APPLICABLE TO THE CASE OF THE APPELLANT. RECENTLY, THE HON'BLE DELHI HIGH COURT IN THE CASE OF SKY LIGHT ITA NO. 1030/JP/2018 SHRI JAIDEEP SINGH VS. ITO 13 HOSPITALITY LLP VS. ACIT (W.P. (0)10870/2017 AND CM NO. 44503/2017) VIDE ORDER DATED 02-02-2018 HELD THAT W HERE NO PREJUDICE IS CAUSED TO THE ASSESSEE, ERROR COMMITTE D DUE TO HUMAN ERRORS, PROCEEDINGS CANNOT BE AS INVALID, WHI CH ARE OTHERWISE IS VALID. THE APPELLANT'S RELIANCE ON DEC ISION OF TRAVANORE DIAGNOSTIC PVT. LTD. (2016) 290 CTR 241 I S MISPLACED. IN FACT, IN THE SAID ORDER, THE HON'BLE KERALA HIGH COURT HELD THAT 'EVEN WITHIN THE TIME AVAILABLE FOR ISSUING NOTICE U/S. 143(2) , IF THE AO IS OF THE VIEW THAT MATERIAL AVAILABLE WITH HIM OR DISCOVERED BY HIM ARE SUCH AS TO JUSTIFY A BELIEF O F INCOME ESCAPING ASSESSMENT U/S. 147, HE IS FREE TO RECORD THE REASONS FOR THE BELIEF AND PROCEED TO MAKE THE REASSESSMENT . THUS, THE APPELLANTS ARGUMENTS BEING DEVOID OF MER ITS ARE REJECTED AND KEEPING IN VIEW THE PROVISIONS OF SECT ION 292B OF THE ACT AND VARIOUS JUDICIAL PRONOUNCEMENTS DISCUSS ED (SUPRA), THE VALIDITY OF NOTICE ISSUED U/S 148 OF THE ACT IS UPHELD. 4.3.6 FURTHER THERE IS PLETHORA OF DECISIONS RATIO OF WHICH HELD THAT THE REASSESSMENT NOTICE ISSUED ON THE BASIS OF INFORMATION RECEIVED FROM THE INVESTIGATION WING OF THE DEPARTMENT IS VALID:- 1. AMBICA STEELS LTD. VS. DY.CIT (2008) 24 (II)ITCL 35 7 (DEL- TRIB) 2. ACIT VS. CITIZEN URBAN CO-OP. BANK LTD. (2008) 23 ( II) ITCL 520 (ASR-TRIB) 3. BADRI VISHAL AGGARWAL VS. DY.CIT (2006) 105 TTJ (DE L) 418 4. SMT. GURINDER KAUR (2006) 105 TTJ (DEL) 198: (2006) 102 ITD 189 (DEL) 5. AGR INVESTMENT LTD. VS. ADDL.CIT & ANR. 239 CTR 378 4.3.7 THE LD. AR ALSO ASSAILED THE RE-ASSESSMENT PR OCEEDINGS ON THE GROUND THAT THE SAME HAVE BEEN INITIATED ON MERE CHANGE OF OPINION. I TEND TO DISAGREE WITH THE ID.A R ON THIS POINT. REFERENCE IN THIS REGARD MAY BE HAD TO THE C ASE OF ITA NO. 1030/JP/2018 SHRI JAIDEEP SINGH VS. ITO 14 CONSOLIDATED PHOTO AND FINVEST LTD V. ACIT (2006) 2 81 ITR 394 (DELHI HC) WHEREIN IT WAS HELD THAT MERE PRODUC TION OF BOOKS OF ACCOUNT OR OTHER EVIDENCE FROM WHICH THE A O COULD HAVE, WITH DUE DILIGENCE, DISCOVERED THE MATERIAL E VIDENCE DOES NOT NECESSARILY AMOUNT TO A DISCLOSURE WITHIN THE MEANING OF THE PROVISO TO SEC 147 OF THE ACT. IT WA S HELD BY THE COURT IN THAT CASE 'THE ASSESSMENT ORDER DID NOT ADDRESS ITSELF TO THE QUESTION WHICH THE ASSESSING OFFICER PROPOSED TO EXAMINE IN THE COURSE OF REASSESSMENT PROCEEDINGS. THERE MAY BE A PRESUMPTIO N THAT THE ASSESSMENT PROCEEDINGS HAD BEEN REGULARLY CONDUCTED BUT THERE COULD BE NO PRESUMPTION THAT EVEN WHEN THE ORDER OF ASSESSMENT WAS SILENT, ALL POSSIBLE ANGLES AND ASPECTS OF A CO NTROVERSY HAD BEEN EXAMINED AND DETERMINED BY THE ASSESSING OFFIC ER. THE PRINCIPLE THAT A MERE CHANGE OF OPINION COULD NOT B E A BASIS FOR REOPENING COMPLETED ASSESSMENTS WOULD BE APPLICABLE ONLY TO SITUATIONS WHERE THE AO HAD APPLIED HIS MIND AND TA KEN A CONSCIOUS DECISION ON A PARTICULAR MATTER IN ISSUE. IT WOULD HAVE NO APPLICATION WHERE THE ORDER OF ASSESSMENT DID NO T ADDRESS ITSELF TO THE ASPECT WHICH WAS THE BASIS FOR REOPEN ING OF THE ASSESSMENT.' 4.3.8 IT IS FURTHER OBSERVED THAT THE PROVISION OF SEC. 147 PROVIDES THAT IF THE ASSESSING OFFICER HAS REASON T O BELIEVE THAT ANY INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT , HE MAY SUBJECT TO THE PROVISION OF SEC. 148 TO 153, ASSESS OR REASSESS SUCH INCOME AND ALSO ANY OTHER INCOME CHARGEABLE TO TAX WHICH HAS BEEN ESCAPED ASSESSMENT AND WHICH COMES T O HIS NOTICE SUBSEQUENTLY IN THE COURSE OF THE PROCEEDING S. USE OF WORD ANY OTHER INCOME CHARGEABLE TO TAX IS QUITE RELEVANT. THUS, THE AO CAN ASSESS ALSO ANY OTHER INCOME CHARG EABLE TO TAX WHICH HAS ESCAPED ASSESSMENT AND WHICH COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF THE PROCEEDING S. 4.3.9 LASTLY, IT IS OBSERVED THAT THE AO ISSUED A S HOW-CAUSE NOTICE DATED 04-02-2015 WHEREIN HE SPECIFICALLY REQ UIRED THE ITA NO. 1030/JP/2018 SHRI JAIDEEP SINGH VS. ITO 15 ASSESSEE TO FURNISH DETAILS AND EVIDENCES TO EXPLAI N THE SOURCE OF PAYMENT OF RS. 50,00,000/- TOWARDS PURCHASE OF P ROPERTY MENTIONED ABOVE, JUSTIFICATION FOR NOT OFFERING THE STCG OF RS. 87,91,731/- AND SOURCE OF DEPOSITS OF RS. 20,00,000 /- REFLECTING IN HIS SAVING BANK ACCOUNT. HOWEVER, ON THE APPOINTED OUT THAT NEITHER ANYBODY ATTENDED BEFORE THE AO NOR ANY REQUEST FOR ADJOURNMENT WERE FILED. UNDER S UCH CIRCUMSTANCES, THE AO WAS LEFT WITH NO OPTION TO DE CIDE THE ASSESSMENT WITHIN MEANING OF SECTION 144 OF THE ACT . HENCE, NO INFIRMITY HAS BEEN FOUND IN AO'S ACTION IN COMPL ETING THE ASSESSMENT U/S. 147/144 OF THE ACT. IT IS SEEN FROM THE ASSESSMENT ORDER, THE AO HAD ACCORDED AMPLE OPPORTU NITIES TO THE ASSESSEE BEFORE FINALIZING THE ASSESSMENT, H ENCE, HE DULY MET THE PRINCIPLE OF NATURAL JUSTICE. ALL THE CASE-LAWS RELIED UPON BY THE APPELLANT ARE NOT DIRECTLY APPLI CABLE TO THE FACTS OF THE CASE AS THEY WERE RENDERED AS PER PECU LIAR FACTS AND CIRCUMSTANCES. THE APPELLANT FAILED TO EXPLAIN HOW THE RATIO OF THESE JUDGMENTS ARE APPLICABLE IN HIS CASE , PARTICULARLY WHEN NO RETURN OF INCOME WAS FILED AND NO REGULAR A SSESSMENT U/S. 143(3) WAS COMPLETED IN HIS CASE. 4.4 FROM THE ABOVE DISCUSSION, IT IS CLEAR THAT THE AO ISSUED THE NOTICE U/S 148 OF THE ACT ON 28-03-2014 AFTER R ECORDING PROPER REASONS, THE ASSESSEE DULY PARTICIPATED IN A SSESSMENT PROCEEDINGS BY PROVIDING NECESSARY DETAILS AND THE AO DULY ADDRESSED THESE OBJECTIONS IN THE ASSESSMENT ORDER, THEREFORE, THE PRINCIPLES LAID DOWN BY THE APEX COURT IN THE C ASE OF GKN DRIVESHAFTS (INDIA) LTD. VS. ITO (2003) 259 ITR 19 (SC) WERE FOLLOWED PERFECTLY. CONSIDERING THE FACTUAL AND LEG AL POSITION AS DISCUSSED ABOVE AND VARIOUS JUDICIAL PRECEDENTS CIT ED ABOVE, I FIND NO INFIRMITY, WHATSOEVER, IN THE ACTION OF THE AO IN INITIATING PROCEEDINGS U/S 147 OF THE ACT. THE GROU NDS RAISED BY THE APPELLANT REGARDING THE VALIDITY OF THE ASS ESSMENT ORDER PASSED U/S 144/147 DATED 31.03.2016 ARE DISMI SSED. ITA NO. 1030/JP/2018 SHRI JAIDEEP SINGH VS. ITO 16 10. ON MERITS, THE LD AR SUBMITTED THAT THE ASSESSE ES FATHER SH. SHIVDAN SINGH EXECUTED AN AGREEMENT DT. 13.01.2003 FOR PURCHASE OF LAND BEARING KHASRA NO.325 SITUATED AT VILLAGE SAMW ATSAR, TEHSIL KISHANGARH, AJMER FROM SH. RAMLAL, HARINARAYAN, HIR ALAL AND SMT. KAUSHALYA DEVI FOR RS.3,14,95,875/-. THEREAFTER DUE TO SERIOUS ILLNESS AND CONSIDERING HIS INABILITY TO EXECUTE THE TRANSA CTION, HE ENTERED INTO A CONSENT LETTER WITH SELLERS OF LAND STATING THAT THE ASSESSEE IN CAPACITY OF BUYERS SON SHALL EXECUTE THE TRANSACTION ON HIS BEHALF. ACCORDINGLY, ASSESSEE ENTERED INTO AN AGREEMENT DT. 22.05.2006 W ITH SELLERS OF LAND AND PAID RS.15 LACS ON 09.05.2006 AND RS.35 LACS ON 22.05.2006 FROM THE MONEY GIVEN TO HIM BY HIS FATHER OUT OF THE PAS T SAVINGS. MEANWHILE THE LAND WAS COMPULSORY ACQUIRED BY RIICO LTD. AND THE ASSESSEE RECEIVED COMPENSATION OF RS.4,02,87,606/- ON 13.10. 2006 IN HIS BANK ACCOUNT. OUT OF SAID AMOUNT, ASSESSEE PAID BALANCE AMOUNT OF RS.2,64,95,874/- TO SELLERS OF LAND RESULTING INTO CAPITAL GAIN OF RS.87,91,732/- AGAINST WHICH DEDUCTION U/S 54B WAS CLAIMED AND LTCG WAS DECLARED AT NIL IN THE RETURN FILED BY HIM AS K ARTA OF HIS HUF ON 31.07.2007. 11. IT WAS SUBMITTED THAT THE AO OBSERVED THAT ASSE SSEE HAS MADE CASH PAYMENT OF RS.50 LACS TO THE SELLERS OF LAND B UT FAILED TO EXPLAIN THE SOURCE OF SUCH CASH PAYMENT. ACCORDINGLY, HE MA DE ADDITION OF RS.50 LACS BY TREATING IT AS UNEXPLAINED INCOME OF THE ASSESSEE. HE FURTHER MADE ADDITION ON ACCOUNT OF LTCG OF RS.87,9 1,732/- AND CASH DEPOSITED IN THE BANK ACCOUNT OF RS.20 LACS. ITA NO. 1030/JP/2018 SHRI JAIDEEP SINGH VS. ITO 17 12. IT WAS FURTHER SUBMITTED THAT THE LD. CIT(A) T AKING COGNIZANCE OF THE RETURN FILED BY THE ASSESSEE AS KARTA OF HUF WH ICH IS ASSESSED BY AO U/S 143(3) DELETED THE ADDITION OF RS.87,91,732/ - ON THE GROUND THAT SINCE SUCH INCOME IS ASSESSED IN CASE OF HUF, IT CANNOT BE AGAIN TAXED IN THE HANDS OF ASSESSEE. HE FURTHER DELETED THE ADDITION OF RS.20 LACS BY ACCEPTING THAT SOURCE OF THE SAME IS OUT OF THE WITHDRAWAL FROM SAME BANK ACCOUNT ONLY A WEEK BEFORE THE DEPOSIT. H OWEVER, HE CONFIRMED THE ADDITION OF RS.50 LACS ON THE GROUND THAT THE CONTENTION OF ASSESSEE THAT HE AND HIS FATHER ARE HOLDING SUBS TANTIAL AGRICULTURAL LAND WITHOUT EVIDENCE OR PROOF OF AGRICULTURAL INCO ME CANNOT BE ACCEPTED. 13. IT WAS SUBMITTED BY THE LD AR THAT BOTH THE ASS ESSEE AND HIS FATHER ARE AGRICULTURALIST HAVING NO OTHER SOURCE O F INCOME. THERE IS NO DISPUTE AS TO THE FACT THAT THE AGREEMENT FOR PURCH ASE OF LAND WAS MADE ON 13.01.2003 BY SH. SHIVDAN SINGH, FATHER OF ASSESSEE. HOWEVER, IN VIEW OF THE FACTS MENTIONED IN ABOVE, A FRESH AGREEMENT WAS MADE ON 22.05.2006 WHICH SHOWS THAT RS.50 LACS WAS PAID TO THE SELLERS OF LAND IN MAY, 2006, I.E. DURING LIFETIME OF ASSESSEES FATHER WHO EXPIRED ON 18.05.2007. THUS, THE PAYMENT RECORDED I N THIS AGREEMENT IS MADE BY THE ASSESSEE ON BEHALF OF HIS FATHER OUT OF HIS AGRICULTURE INCOME. EVEN IN THE WILL DT.20.03.2003 EXECUTED BY ASSESSEES FATHER, IT IS SPECIFICALLY STATED THAT FOR PURCHASE OF LAND AT VILLAGE SAMWATSAR, HE IS HANDING RS.50 LACS TO HIS SON JAI DEEP FOR PAYME NT TO SELLERS OF LAND. THUS, RS.50 LACS WAS PAID BY THE FATHER OF ASSESSEE . THE SOURCE OF SUCH AMOUNT IS AGRICULTURAL INCOME OF ASSESSEES FATHER AS HE WAS HOLDING SUBSTANTIAL AGRICULTURAL LAND AS EVIDENT FROM THE O RDER OF ADDITIONAL ITA NO. 1030/JP/2018 SHRI JAIDEEP SINGH VS. ITO 18 COLLECTOR, JAIPUR FOR WHICH JAMABANDIS ARE PLACED O N RECORD. THEREFORE, SOURCE OF CASH PAYMENT OF RS.50 LACS IS SAVINGS OUT OF THE AGRICULTURAL INCOME OF ASSESSEES FATHER AND THUS, ADDITION CONF IRMED BY LD. CIT(A) IN THE HANDS OF ASSESSEE BE DIRECTED TO BE DELETED. 14. IT WAS FURTHER SUBMITTED THAT THE AO HAS MADE T HE ADDITION OF RS.50 LACS FOR UNEXPLAINED INVESTMENT IN LAND. THIS ADDITION FALLS U/S 69 OF IT ACT, 1961. THIS SECTION USES THE WORD MAY W HICH GIVES DISCRETION TO THE AO, CONSIDERING THE FACTS & CIRCUMSTANCES OF THE CASE, NOT TO MAKE THE ADDITION EVEN IF HE IS NOT FULLY SATISFIED WITH THE EXPLANATION OF ASSESSEE. IT IS A FACT ON RECORD THAT ASSESSEE HAS NO SOURCE OF INCOME OTHER THAN THE AGRICULTURAL INCOME. EVEN THE LOWER AUTHORITIES HAVE NOT FOUND ANY OTHER SOURCE OF INCOME IN THE HANDS OF TH E ASSESSEE. HENCE, IT CANNOT BE PRESUMED THAT ASSESSEE HAS ANY UNDISCL OSED INCOME WHICH IS INVESTED IN PURCHASE OF LAND. STRICT RULE OF EVI DENCE DO NOT APPLY TO THE INCOME TAX PROCEEDINGS. HUMAN CONDUCT AND PREPO NDERANCE OF THE PROBABILITIES NEEDS TO BE CONSIDERED BEFORE MAKING ANY ADDITION U/S 69 IN AS MUCH AS THE SECTION USES THE WORD MAY AND N OT SHALL. IN THESE CIRCUMSTANCES, EVEN IF THE SOURCE OF INVESTMENT IN LAND IS NOT FOUND TO BE SATISFACTORY EXPLAINED, NO ADDITION CAN BE MADE IN THE PECULIAR FACTS OF THE CASE. IN THIS REGARD, RELIANCE WAS PLACED ON THE FOLLOWING DECISIONS:- SUMATI DAYAL VS. CIT (1995) 214 ITR 801 (SC) CIT VS. SMT. P.K. NOORJAHAN (1999) 237 ITR 570 (SC ). 15. PER CONTRA, THE LD. DR HAS RELIED ON THE FINDIN GS OF THE LOWER AUTHORITIES AND OUR REFERENCE WAS DRAWN TO THE FIND INGS OF THE LD. ITA NO. 1030/JP/2018 SHRI JAIDEEP SINGH VS. ITO 19 CIT(A) WHICH ARE CONTAINED AT PARA 6 & 6.1 OF HIS O RDER WHICH READ AS UNDER:- 6 GROUND NO. 4 RELATES TO THE ADDITION OF RS. 50,0 0,000/- ON ACCOUNT OF UNEXPLAINED CASH PAYMENT. AS DISCUSSED A BOVE, THE APPELLANT HAD MADE PAYMENT OF RS. 50,00,000/- A GAINST PURCHASE OF THE AFORESAID LAND. SINCE THE ASSESSEE FAILED TO EXPLAIN THE SOURCE OF ABOVE PAYMENT, THE AO MADE TH E ADDITION OF RS. 50,00,000/- TREATING IT UNEXPLAINED CASH PAYMENT. THE APPELLANT CLAIMED BEFORE ME THAT HE BE LONGS TO THE FAMILY OF LANDLORDS (JAGIRDAAR) AND HIS FATHER WAS THE LANDLORD OF HUGE PORTIONS OF AGRICULTURAL LANDS. IT WAS FURTHER CLAIMED THAT THE SAID PAYMENT OF RS. 50,00,000/-TOW ARDS ADVANCE FOR PURCHASE OF THE SUBJECT LAND WAS MADE O UT OF THE AGRICULTURAL INCOME OF THE ASSESSEE AND MERELY BECAUSE THE ASSESSEE HAS NOT BEEN FILING RETURNS OF INCOME AND HAS NOT DECLARED THE AGRICULTURAL INCOME IN THE RETURNS , THE ACCRUAL OF AGRICULTURAL INCOME CANNOT BE DENIED PAR TICULARLY CONSIDERING THE QUANTUM OF AGRICULTURAL LAND-HOLDIN G IN THE NAME OF ASSESSEE, ON WHICH AGRICULTURE OPERATIONS A RE BEING CARRIED OUT ON A LARGE SCALE. 6.1 UPON CONSIDERATION OF THE FACTS OF THE CASE AND APPELLANT'S SUBMISSIONS, IT IS OBSERVED THAT THOUGH THE APPELLANT CLAIMED THAT RS. 50,00,000/- WAS PAID OUT OF SAVINGS FROM THE AGRICULTURAL INCOME, HE FAILED TO FURNISH ANY EVIDENCE WHATSOEVER TO SUBSTANTIATE HIS CLAIM. IN THIS REGAR D, THE APPELLANT STRESSED ON THE FACT THAT HE AND HIS FATH ER HOLD SUBSTANTIAL AGRICULTURAL LAND. HOWEVER, I FIND THAT MERE POSSESSION OF AGRICULTURAL LAND DOES NOT GIVE RISE TO AGRICULTURAL INCOME. THE ONUS LAY EXCLUSIVELY ON THE APPELLANT T O PROVE, WITH COGENT EVIDENCES, THAT HE RAISED AGRICULTURAL CROPS ETC. AND EARNED AGRICULTURAL INCOME. HOWEVER, IN THE INS TANT CASE, THE APPELLANT HAS FAILED TO PROVIDE ANY EVIDENCES I N THE MATTER ON THE BASIS OF WHICH IT COULD BE SAID THAT HE CARR IED OUT ITA NO. 1030/JP/2018 SHRI JAIDEEP SINGH VS. ITO 20 AGRICULTURAL OPERATIONS ON THE LAND AND EARNED AGRI CULTURAL INCOME. THE APPELLANT EVEN FAILED TO CONVEY AS TO W HICH CROPS WERE SOWN AND WHAT WERE THE TOTAL YIELDS OF VARIOUS CROPS AND WHERE THEY WERE SOLD. NORMALLY, THE AGRICULTURAL PR ODUCE IS SOLD THROUGH KRISHI UPAN MANDI SAMITIES, WHICH ISSU ES RECEIPTS FOR THE SAME. NO SUCH RECEIPTS HAVE BEEN PRODUCED W ITHER BEFORE THE AO OR BEFORE THE UNDERSIGNED. THE APPELL ANT COULD NOT PRODUCE EVEN A SINGLE VOUCHER OF EXPENDITURE RE LATING TO PURCHASE OF SEEDS OR PESTICIDES ON THE BASIS OF WHI CH IT COULD BE SAID THAT HE WAS ENGAGED IN AGRICULTURAL OPERATI ONS ON HIS LAND. IN A SITUATION WHERE THE ASSESSEE FAILS TO PR ODUCE ANY SATISFACTORY EVIDENCES ABOUT HIS BEING ENGAGED IN A GRICULTURAL ACTIVITIES AND ALSO UNABLE TO STATE AS TO WHOM THE AGRICULTURAL PRODUCE WAS SOLD, IT HAS TO BE PROVED, WHICH THE AS SESSEE CONTENDS TO BE HIS AGRICULTURAL INCOME. EVEN THE AP PELLANT HIMSELF ADMITTED THE FACT HE DOES NOT HAVE ANY EVID ENCE OF PROOF OF AGRICULTURAL INCOME. SINCE THE APPELLANT F AILED TO FURNISH ANY EVIDENCES, HIS CLAIM OF AGRICULTURAL IN COME IS A BALD CLAIM, WHICH CANNOT BE ACCEPTED. THE ABOVE VIE W GETS SUPPORT FROM THE DECISION IN THE CASE OF AVDHESH KU MAR JAIN VS. CIT REPORTED IN 178 ITR 433; GOPI RAM LILA VS. CIT REPORTED IN 225 ITR 320; RIDHKARAN DAS POONAM CHAND BHURA VS. CIT REPORTED IN 231 ITR 604; AND SMT. KAMALA BA I VS. CIT REPORTED IN 221 ITR 674. IN THE LIGHT OF THE FACTS DISCUSSED ABOVE, IT IS HE LD THAT THE APPELLANT'S CLAIM THAT PAYMENT OF RS. 50,00,000/- O UT OF THE AGRICULTURAL INCOME REMAINS TO BE PROVED. HENCE, TH E AO'S ACTION IN TREATING RS. 50,00,000/- AS UNEXPLAINED C ASH PAYMENT IS SUSTAINED. THE ADDITION OF RS. 50,00,000 /- IS HEREBY CONFIRMED. THE GROUND OF APPEAL IS DISMISSED . 16. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE NOTE THAT THERE ARE TWO NOT ICES U/S 148 AVAILABLE ON ASSESSMENT RECORDS. THE FIRST NOTICE I S DATED 20.03.2014 ITA NO. 1030/JP/2018 SHRI JAIDEEP SINGH VS. ITO 21 FOR WHICH PRIOR APPROVAL OF THE COMPETENT AUTHORITY WAS OBTAINED ON 20.03.2014 IN RESPECT OF THE REASONS SO RECORDED BY THE AO ON 10.03.2014. THE SECOND NOTICE U/S 148 IS DATED 28. 03.2014 AFTER SEEKING PRIOR APPROVAL OF THE COMPETENT AUTHORITY O N 27.03.2014 IN RESPECT OF THE REASONS SO RECORDED BY THE AO ON 24. 03.2014. IT IS ALSO NOTED THAT BOTH THE NOTICES U/S 148 HAVE BEEN SERVE D ON THE ASSESSEE AND THE ASSESSEE HAS IN TURN RESPONDED TO THESE TWO NOTICES INDIVIDUALLY VIDE HIS LETTER OF EVEN DATE 21.01.2015 AND HAS FIL ED HIS OBJECTIONS TO THE REASONS SO RECORDED BY THE ASSESSING OFFICER. IT IS THEREFORE NOT IN DISPUTE THAT BOTH THESE NOTICES U/S 148 HAVE BEEN I SSUED BY THE AO AND DULY SERVED ON THE ASSESSEE AND THUS, TWO SEPARATE PROCEEDINGS HAVE BEEN INITIATED BY THE AO U/S 147 BY VIRTUE OF THESE TWO SEPARATE NOTICES ISSUED U/S 148 CARRYING SEPARATE REASONS IN RESPECT OF INDEPENDENT TRANSACTIONS OF PURCHASE OF PROPERTY BY THE ASSESSE E AND STATING AS TO WHY THE AO HAS FORMED THE BELIEF THAT INCOME HAS ES CAPED ASSESSMENT. 17. A QUESTION THAT ARISES FOR CONSIDERATION IS WHE THER THE AO CAN ISSUE SECOND NOTICE U/S 148 AND INITIATE FRESH REAS SESSMENT PROCEEDINGS BEFORE COMPLETION/CONCLUSION OF PROCEEDINGS INITIAT ED BY WAY OF FIRST NOTICE U/S 148 EITHER BY WAY OF DROPPING THE FIRST REASSESSMENT PROCEEDINGS OR COMPLETING THE PROCEEDINGS BY PASSIN G THE REASSESSMENT ORDER U/S 147 OF THE ACT. AS WE HAVE NOTED ABOVE, T HE ASSESSEE HAS RAISED A SPECIFIC OBJECTION AGAINST INITIATION OF T HE FIRST REASSESSMENT PROCEEDINGS VIDE ITS LETTER DATED 21.01.2015 AND HA S REQUESTED TO DROP SUCH PROCEEDINGS AS HE HAS NOT MADE ANY INVESTMENT IN THE PROPERTY SO SPECIFIED BY THE AO, THE PARTICULARS OF WHICH WAS M ENTIONED IN THE REASONS DATED 10.03.2014. THERE IS NOTHING ON RECO RD THAT THE AO HAS ITA NO. 1030/JP/2018 SHRI JAIDEEP SINGH VS. ITO 22 DISPOSED OFF THE OBJECTIONS SO RAISED BY THE ASSESS EE AND DROPPED THE FIRST REASSESSMENT PROCEEDINGS EITHER BY WAY OF PAS SING A SPECIFIC ORDER OR EVEN BY WAY OF ANY NOTING IN THE ORDERSHEET AND IN ABSENCE THEREOF, IT CANNOT THEREFORE BE PRESUMED THAT SUCH PROCEEDIN GS HAVE BEEN CONCLUDED BY THE AO. THE FACT THAT THE AO HAS ISSU ED A FRESH NOTICE U/S 148 BASIS FRESH REASONS CANNOT BY IMPLICATION B E READ AND HELD AS CONCLUSION OF FIRST REASSESSMENT PROCEEDINGS. WE T HEREFORE FIND THAT IT IS A CASE WHERE PENDING CONCLUSION OF THE FIRST REA SSESSMENT PROCEEDINGS, FRESH REASSESSMENT PROCEEDINGS HAVE BE EN INITIATED WHICH CANNOT BE SUSTAINED IN THE EYES OF LAW AND ON THIS REASON ALONE, THE PRESENT REASSESSMENT PROCEEDINGS INITIATED BY WAY O F NOTICE U/S 148 DATED 28.03.2014 ARE VITIATED AND SAME DESERVE TO B E SET-ASIDE. 18. NOW, COMING TO NOTICE U/S 148 DATED 28.03.2014 AND THE UNDERLYING REASONS RECORDED BY THE AO DATED 24.02.2 014, THE LD A/R HAS CHALLENGED THE INITIATION OF REASSESSMENT PROCE EDINGS U/S 147 ON ACCOUNT OF NON-DISPOSING OFF OBJECTIONS RAISED BY T HE ASSESSEE BEFORE THE AO VIDE HIS LETTER DATED 21.01.2015. THE FACT THAT THE ASSESSEE HAS RAISED HIS OBJECTIONS AGAINST SUCH REASSESSMENT PRO CEEDINGS IS A MATTER OF RECORD AND WE FIND THAT THE AO HAS NOT DISPOSED OFF THE SAID OBJECTIONS BY WAY OF PASSING ANY SPECIFIC ORDER AND HAS PROCEEDED AHEAD BY WAY OF ISSUING A SHOW-CAUSE CALLING FOR FU RTHER INFORMATION/CLARIFICATION AND PASSING THE REASSESSM ENT ORDER. THE SAID ACT OF THE AO IS IN CLEAR VIOLATION OF THE LAW DECL ARED BY THE HONBLE SUPREME COURT IN CASE OF GKN DRIVESHAFT INDIA (SUPR A) AND THE DECISION OF THE HONBLE RAJASTHAN HIGH COURT IN CASE OF K.C MERCANTILE LTD (SUPRA). THEREFORE, ON ACCOUNT OF NON-DISPOSING OF F THE OBJECTIONS ITA NO. 1030/JP/2018 SHRI JAIDEEP SINGH VS. ITO 23 RAISED BY THE ASSESSEE, THE PRESENT PROCEEDINGS ARE AGAIN VITIATED AND DESERVES TO BE SET-ASIDE. 19. ON MERITS OF ADDITION OF RS 50 LACS TOWARDS UNE XPLAINED INVESTMENT IN LAND, WE FIND THAT THE LD CIT(A) HAS DELETED THE ADDITION ON ACCOUNT OF CAPITAL GAINS IN THE HANDS OF THE ASS ESSEE ON COMPULSORY ACQUISITION OF SUCH LAND BY RIICO HOLDING THAT THE CAPITAL GAINS HAS BEEN DECLARED AND ACCEPTED BY THE REVENUE BY WAY O F ASSESSMENT ORDER PASSED U/S 143(3) IN THE HAND OF APPELLANTS HUF AND THEREFORE, THE SAME CANNOT BE TAXED IN THE HANDS OF THE ASSESS EE IN HIS INDIVIDUAL CAPACITY. AND ON PERUSAL OF THE COMPUTATION OF CAP ITAL GAINS OF RS 87,91,732 SO OFFERED BY ASSESSEES HUF, WE FIND THA T THE ASSESSEE HUF HAS CLAIMED THE AFORESAID AMOUNT OF RS 50 LACS TOWA RDS PURCHASE OF LAND BESIDES OTHER COSTS AND WHICH HAS BEEN ACCEPTE D AND ALLOWED BY THE AO WHILE ASSESSING THE CAPITAL GAINS IN THE HAN DS OF ASSESSEES HUF. THEREFORE, WHERE THE INVESTMENT HAS BEEN CLAIMED AN D ALLOWED AS THE COST IN THE HANDS OF THE ASSESSEES HUF, ANY ADDITI ON TOWARDS THE SOURCE OF SUCH INVESTMENT, WHERE REMAIN UNEXPLAINED , CAN BE MADE IN THE HANDS OF ASSESSEES HUF AND NOT IN HIS INDIVIDU AL CAPACITY. FURTHER, WE ALSO NOTE THAT THE ASSESSEE HAS EXPLAINED THE SO URCE OF SUCH INVESTMENT BY WAY OF WILL DATED 20.03.2003 EXECUTED BY ASSESSEES FATHER CONTAINING THE FACT THAT THE AMOUNT OF RS 50 LACS HAS BEEN HANDED OVER BY HIS FATHER TO HIM FOR PURCHASE OF LA ND, AND THE SOURCE OF SUCH FUNDS IS THE AGRICULTURE INCOME AND PAST SAVIN GS OF HIS FATHER AND WHICH IS REASONABLY DEMONSTRATED BY THE JAMABANDI O F THE LAND HOLDINGS OF THE HIS LATE FATHER. THEREFORE, EVEN O N MERITS, THE ADDITION SO MADE AND SUSTAINED BY THE LD CIT(A) IS DIRECTED TO BE DELETED. ITA NO. 1030/JP/2018 SHRI JAIDEEP SINGH VS. ITO 24 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON 02/06/2021. SD/- SD/- LANHI XKSLKBZ FOE FLAG ;KNO ( SANDEEP GOSAIN ) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 02/06/2021. *SANTOSH VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI JAIDEEP SINGH, JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- ITO, WARD-7(2), JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE { ITA NO. 1030/JP/2018} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR