SHRI TARA CHAND JAIN, Jaipur V. ITO, Alwar

ITA 1071/JPR/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 9935 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 06-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A S NEHRA JCIT DHK
• Keywords: Sale consideration of property below Jantri Value; Opportunity of cross examination; Set aside
• Section: 50C; 143(1)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES A, JAIPUR JH JES'K LH 'KEKZ] YS[KK LNL; ,OA JH FOT; IKY JKO] U;KF;D LNL; DS LE{K BEFORE: SHRI RAMESH C SHARMA, AM & SHRI VIJAY PAL RAO, JM VK;DJ VIHY LA - @ ITA NO. 1071/JP/2016 FU/KZKJ.K O'KZ @ ASSESSMENT YEAR : 2010-11 SHRI TARA CHAND JAIN, PLOT NO. 140, SCHEME NO. 2, ALWAR (RAJ). CUKE VS. I.T.O., WARD 1(4), ALWAR. LFKK;H YS[KK LA -@THVKBZVKJ LA -@ PAN/GIR NO.: ABHPJ 3548 C VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI MANISH AGARWAL (CA). JKTLO DH VKSJ LS @ REVENUE BY : SHRI A.S. NEHRA (JCIT) LQUOKBZ DH RKJH[K @ DATE OF HEARING: 02/04/2019 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 21/05/2019 VKNS 'K@ ORDER PER: VIJAY PAL RAO, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 17/10/2016 OF THE LD. CIT(A), ALWAR FOR THE A.Y. 2010-11. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN CONFIRMING ADDITION OF RS. 8,88,740/- MADE BY THE A.O. ALLEGING THE SAME AS SHORT TERM CAPITAL GAIN. 1.1 THAT THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION COMPLETELY IGNORING THE FACT THAT ASSESSEE HAD SOLD THE SAID PROPERTY IN CAPACITY OF POWER OF ATTORNEY HOLDER OF SHRI RAMESH CHAND MISHRA AND ASSESSEE WAS NOT BENEFICIAL OWNER OF THE PROPERTY SOLD. APPELLANT PRAYS ADDITION SO MADE IS NOT JUSTIFIED AND DESERVES TO BE DELETED. 2 ITA NO. 1071/JP/2016 TARA CHAND JAIN VS ITO 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT(A) ERRED IN CONFIRMING THE ADDITION IGNORING THE FACT THAT COPIES OF STATEMENTS RECORDED OF SHRI RAMESH CHAND MISHRA WERE NOT PROVIDED TO ASSESSEE NOR ANY OPPORTUNITY OF CROSS EXAMINATION WAS AFFORDED. THUS COMPLETION OF ASSESSMENT WITHOUT PROVIDING ADEQUATE OPPORTUNITY TO CROSS EXAMINE, IS BAD IN LAW AND DESERVES TO BE QUASHED. 3. THAT THE APPELLANT CRAVES THE RIGHT TO ADD, DELETE, AMEND OR ABANDON ANY OF THE GROUNDS OF THIS APPEAL AT THE TIME OR BEFORE THE ACTUAL HEARING OF THE CASE. 2. THE ASSESSEE IS AN INDIVIDUAL AND FILED HIS RETURN OF INCOME ON 14/3/2011 DECLARING TOTAL INCOME OF RS. 1,18,500/-. THE RETURN OF INCOME WAS INITIALLY PROCESSED U/S 143(1) OF THE INCOME TAX ACT, 1961 (IN SHORT, THE ACT). SUBSEQUENTLY, THE CASE OF THE ASSESSEE WAS REOPENED BY THE A.O. ON THE REASONS THAT THE ASSESSEE SOLD RESIDENTIAL PROPERTY SITUATED AT TEEJ KI SWARG ROAD, ALWAR, ON WHICH NO CAPITAL GAIN WAS OFFERED IN THE RETURN OF INCOME FILED BY THE ASSESSEE. THE A.O. FOUND THAT THE ASSESSEE HAS EXECUTED A SALE DEED DATED 27/07/2009 FOR A CONSIDERATION OF RS. 5.00 LACS. THE ASSESSEE CONTENDED BEFORE THE A.O. THAT THE SAID SALE DEED WAS EXECUTED IN THE CAPACITY OF POWER OF ATTORNEY OF ONE SHRI RAMESH CHAND MISHRA AND THEREFORE, NO CAPITAL GAIN IS TAXABLE IN THE HANDS OF THE ASSESSEE. THE A.O. CONDUCTED ENQUIRY AND RECORDED STATEMENT OF SHRI RAMESH CHAND MISHRA WHO HAS STATED THAT THE PROPERTY IN QUESTION WAS SOLD TO THE ASSESSEE VIDE AGREEMENT TO SELL ALONGWITH POWER OF ATTORNEY DATED 28/03/2008. BASED ON THE SAID STATEMENT AND SALE DEED, THE A.O. 3 ITA NO. 1071/JP/2016 TARA CHAND JAIN VS ITO ASSESSED SHORT TERM CAPITAL GAIN IN THE HANDS OF THE ASSESSEE AT RS. 8,88,740/- AS PER THE PROVISIONS OF SECTION 50C OF THE ACT. 3. THE ASSESSEE CHALLENGED THE ACTION OF THE A.O. BEFORE THE LD. CIT(A) BUT COULD NOT SUCCEED. 4. BEFORE US, THE LD AR OF THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE WAS NOT THE OWNER OF THE PROPERTY IN QUESTION BUT ONLY A POWER OF ATTORNEY HOLDER AND THEREFORE, SALE WAS EXECUTED BY THE ASSESSEE ON BEHALF OF THE ORIGINAL OWNER SHRI RAMESH CHAND MISHRA. HE HAS FURTHER CONTENDED THAT THE ASSESSEE HAS ALSO HANDED OVER THE SALE CONSIDERATION OF SHRI RAMESH CHAND MISHRA AND THEREFORE, NO CAPITAL GAIN CAN BE ASSESSED IN THE HANDS OF THE ASSESSEE. HE HAS FURTHER CONTENDED THAT THE A.O. HAS MADE THE ADDITION ON THE BASIS OF ALLEGED STATEMENT OF SHRI RAMESH CHAND MISHRA RECORDED AT THE BACK OF THE ASSESSEE WITHOUT GIVING AN OPPORTUNITY TO CROSS EXAMINATION. IN SUPPORT OF HIS CONTENTION, HE HAS RELIED UPON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF ANDAMAN TIMBERS INDUSTRIES VS. CCE IN CIVIL APPEAL NO. 4228/2006 DECISION DATED 02/09/2015, THUS THE LD AR HAS SUBMITTED THAT THE ADDITION MADE BY THE A.O. SOLELY BASED ON THE STATEMENT OF SHRI RAMESH CHAND MISHRA WITHOUT GIVING AN OPPORTUNITY OF CROSS EXAMINATION TO THE ASSESSEE, IS NOT SUSTAINABLE IN LAW. HE HAS REFERRED TO THE SUBMISSIONS OF THE ASSESSEE FILED BEFORE THE LD. CIT(A) AND SUBMITTED THAT EVEN BEFORE 4 ITA NO. 1071/JP/2016 TARA CHAND JAIN VS ITO THE LD. CIT(A), THE ASSESSEE HAS SPECIFICALLY ASKED AN OPPORTUNITY TO CROSS EXAMINE WHICH WAS NOT CONSIDERED. 5. ON THE OTHER HAND, THE LD DR HAS SUBMITTED THAT THE A.O. HAS CONDUCTED AN ENQUIRY AND BROUGHT THE FACTS ON THE RECORD THAT THE PROPERTY IN QUESTION WAS PURCHASED BY THE ASSESSEE FROM THE ORIGINAL OWNER SHRI RAMESH CHAND MISHRA VIDE AGREEMENT TO SELL AND POWER OF ATTORNEY DATED 23/03/2008 FOR A CONSIDERATION OF RS. 2,65,000/-. THE ASSESSEE HAS NOT DISPUTED THE POWER OF ATTORNEY DATED 28/03/2008 IT IS NOT A CASE OF ADDITION MADE SOLELY ON THE BASIS OF STATEMENT BUT STATEMENT OF SHRI RAMESH CHAND MISHRA IS ONLY IN THE NATURE OF CORROBORATION OF THE TRANSACTION OF SALE. HE HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. THERE IS NO DISPUTE THAT THE ASSESSEE HAS EXECUTED SALE DEED DATED 27/7/2009 WHEREBY PLOT OF LAND SITUATED AT TEEJ KA SWARG ROAD, ALWAR WAS SOLD FOR A CONSIDERATION OF RS. 5.00 LACS IN THE CAPACITY OF POWER OF ATTORNEY OF ONE SHRI RAMESH CHAND MISHRA. THE SALE DEED ITSELF MANIFESTS THIS FACT THAT THE ASSESSEE HAS EXECUTED THIS SALE DEED IN THE CAPACITY OF POWER OF ATTORNEY HOLDER, HOWEVER, THE CONSIDERATION WAS RECEIVED BY THE ASSESSEE IN CASH AS WELL AS IN CHEQUE IN HIS OWN NAME. THE ASSESSEE HAS NOT PRODUCED ANY PROOF OF TRANSFER OF SALE CONSIDERATION TO THE ORIGINAL OWNER OF THE PROPERTY SHRI RAMESH 5 ITA NO. 1071/JP/2016 TARA CHAND JAIN VS ITO CHAND MISHRA, ON THE CONTRARY THE A.O. CONDUCTED AN ENQUIRY FROM THE ORIGINAL OWNER AND RECORDED HIS STATEMENT WHEREIN SHRI RAMESH CHAND MISHRA STATED THAT HE SOLD PROPERTY TO THE ASSESSEE FOR A CONSIDERATION OF RS. 2,65,000/- VIDE AGREEMENT TO SELL AND POWER OF ATTORNEY DATED 28/3/2008. THE ASSESSEE OBJECTED THE PROPOSED ADDITION AND SPECIFICALLY ASKED THE A.O. TO CONFRONT THE ASSESSEE WITH THE EVIDENCE AGAINST HIM. DESPITE THAT THE OBJECTION OF THE ASSESSEE, THE A.O. NEITHER CONFRONTED THE STATEMENT OF SHRI RAMESH CHAND MISHRA NOR ALLOWED THE ASSESSEE TO CROSS EXAMINE HIM. THE ASSESSEE AGAIN RAISED THIS OBJECTION BEFORE THE LD. CIT(A) SEEKING THE CROSS EXAMINATION OF SHRI RAMESH CHAND MISHRA ON THE BASIS OF WHOSE STATEMENT, THE A.O. MADE THIS ADDITION. THUS, WE FIND THAT THE ASSESSEE DEMANDED THE STATEMENT AS WELL AS CROSS EXAMINATION OF SHRI RAMESH CHAND MISHRA. HOWEVER, NEITHER THE A.O. NOR THE LD. CIT(A) EXCEEDED TO THE REQUEST OF THE ASSESSEE. IT IS SETTLED PROPOSITION OF LAW THAT IF THE ADDITION IS MADE BY THE A.O. BY RELYING ON THE STATEMENT OF A THIRD PERSON, RECORDED AT THE BACK OF THE ASSESSEE WITHOUT GIVING AN OPPORTUNITY OF CROSS EXAMINATION, THEN THE SAID ADDITION IS NOT SUSTAINABLE IN LAW. THEREFORE, IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN THE INTEREST OF JUSTICE, WE SET ASIDE THE MATTER BACK TO THE RECORD OF THE A.O. FOR CONSIDERING THE SAME AFRESH AFTER PROVIDING AN OPPORTUNITY OF CROSS EXAMINATION OF SHRI RAMESH CHAND MISHRA TO THE ASSESSEE. IN CASE SHRI RAMESH CHAND MISHRA RETRACTS FROM HIS EARLIER STATEMENT AND SUPPORT THE 6 ITA NO. 1071/JP/2016 TARA CHAND JAIN VS ITO CASE OF THE ASSESSEE THEN THE A.O. IS FREE TO TAKE APPROPRIATE ACTION FOR ASSESSMENT OF INCOME IN THE HAND OF SHRI RAMESH CHAND MISHRA. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES ONLY. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST MAY, 2019. SD/- SD/- JES'K LH 'KEKZ FOT; IKY JKO (RAMESH C SHARMA) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 21 ST MAY, 2019 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SHRI TARA CHAND JAIN, ALWAR. 2. IZR;FKHZ @ THE RESPONDENT- THE ITO, WARD 1(4), ALWAR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 1071/JP/2016) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR