SHRIMATI ASHA RANI, ABOHAR V. ASSISSTANT COMMISSIONER OF INCOME TAX, AMRITSAR

ITA 165/ASR/2019

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 7136 (ITAT-AMRITSAR)
• Duration Of Justice: 2 year(s) 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-12-2021
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 04-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: INDRAJIT SINGH
• Keywords: Unexplained investment; Search and seizure; Document seized; Period of limitation; Block assessment; Documents seized; Set aside
• Section: 131; 143(3); 142(1); 153A; 143(2); 158BC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR (BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER & SHRI MANISH BORAD, ACCOUNTANT MEMBER) ITA. No: 165/Asr/2019 (Assessment Year: 2013-14) Smt. Asha Rani, 107- Patel Nagar, Abohar PAN No. AARPR7266G V/S Assistant Commissioner of Income Tax, Central Circle, Amritsar (Appellant) (Respondent) Appellant by : Shri Surinder Mahajan, C.A. Respondent by : Shri Indrajit Singh, CIT/ DR (आदेश आदेशआदेश आदेश)/ORDER Date of hearing : 30-11-2021 Date of Pronouncement : 02-12-2021 PER MAHAVIR PRASAD, J.M. 1. This appeal filed by the Assessee is directed against the order of the Commissioner of Income Tax (‘hereinafter called CIT(A)’) order no. 532/IT/CIT(A)-5/LDH/2016-17 order dated 27/12/2018 arising out of assessment order dated 31/12/2016. Assessee has taken following grounds of appeal: 1. a) That on the facts & circumstances of the case, Ld. CIT(A)-Ludhiana has grossly erred in law in confirming addition in of Rs. 10,00,000/- out of addition of Rs. 50,00,000/- on the basis of unsigned agreement. Addition confirmed is illegal and bad in law. ITA No. 165/Asr/2019 . A.Y. 2013-14 2 b) That on the facts & circumstances of the case, addition of Rs. 10,00,000/- confirmed by the Ld. CIT(A) is illegal and bad in law since name of the assessee nowhere appears in the agreement. 2. That on the facts & circumstances of the case, Ld. CIT(A) has grossly erred in law in confirming addition of Rs. 50,00,000/- made on protective basis. Protective assessment is not legally permissible in search and seizer cases. 3. That on the facts & circumstances of the case, Ld. CIT(A) has grossly erred in law in confirming addition of Rs. 2,00,000/- out of addition of Rs. 4,50,000/- made by Assessing Officer on the basis of seized documents no. JP-6/A-3/72-73. Addition confirmed is illegal and bad in law. 4. That the Appellant requests for leave to add or amend the grounds of appeal before the appeal is heard or disposed off. 2. In this case, a search and seizure operation u/s 132(1) of the Income Tax Act was conducted on 24.07.2014 at the business/residential premises belong to M/s. Nature Group, Abhohar, Fazilka and a document wherein name of the assessee was mentioned was found from the above said premises. And thereafter notices u/s. 153A of the Act was issued and pursuance to this above said notice, assessee filed her return and thereafter notices u/s. 142(1) was served to the assessee. 3. And Ld. A.O. made in his order an agreement dated 29.01.2013 executed by Shri Satpal Thatai S/o Sh. Ram Lal and Shri Rajesh Dhuria resident of Abohar with Sh. Sukhminder Singh S/o of Sh. Hardit Singh resident of Abohar for purchase of property measuring 1200 sq. feet for consideration of Rs. 50,00,000/- and further has given a cash advance of Rs. 10,00,000/- to the seller and date of Registration deed was fixed for 13.05.2013 and statement of Sh. Satpal Thatai was recorded under section 131 of the Income Tax Act, during the post search proceedings and in the statement , Sh. Satpal Thatai was asked that whether he knows Sh. Sukhminder Singh whether he has entered into any property transaction with Sh. Sukhminder Singh. 4. In reply, he stated that he does not know any Sh. Sukhminder Singh and when Sh. Satpal Thatai was asked whether he has any property in Street No. 12-13, 7 th Chowk, Abohar, he replied that about two years back his wife and daughter Smt. Anupama had purchased this residential house. He did not know about the name of the persons from whom this property was purchased and also not about the consideration ITA No. 165/Asr/2019 . A.Y. 2013-14 3 amount involved. The Original registration deed of purchase made by Sh. Sukhminder Singh from Smt. Mamta Rani is also found from the residence of Sh. Satpal Thatai as same is marked as (JP-6/A-3/page 1-4). This clearly shows that the said property has been purchased by Smt. Asha Rani & Smt. Anupama Dhuria of Sh. Satpal Thatai from Sh. Sukhminder Singh at the value mentioned in the above mentioned agreement. The case of Shri Satpal Thatai has been referred for special audit u/s. 142(2)(A) of the Act and after considering all these facts and the statement given by Shri Satpal Thatai u/s. 131 of the Income Tax Act, 1961. Ld. A.O. held that the residential house at 12-13, 7 th Chowk, Abohar belongs to his wife Smt. Asha Rani and his daughter Smt. Anupma Dhuria, protective assessment is being done in the hands of Smt. Asha Rani and amount of Rs. 50 lakh is added to the returned income of the assessee as unexplained investment. 5. Ld. A.O. further mentioned in his order that an agreement dated 30.05.2012 was found wherein same was executed by Smt. Asha Rani wife of Sh. Satpal Thatai and Smt. Anupam dhuria wife of Sh. Rajesh Dhuria resident Abohar with Sh. Brij Lal S/o Shri Mani Ram & Ors. resident of Abohar for sale of land measuring 1 Kanal 2 marlas (6125 sq. feet) at Panjpur Nagar, Abohar for consideration of Rs. 18,37,500/-. As against the sale Smt. Asha Thatgai has received an advance of Rs. 10,50,000/- in cash from the purchasers on 30.05t.2012. During the course of assessment proceedings, assessee was confronted with the above said agreement. In reply, assessee has filed an affidavit of Sh. Brij Lal. As per the statement of Sh. Brij Lal out of advance received of Rs. 10,50,000/-, amount of Rs. 6 lakh has been refunded to him and against the balance amount of Rs. 4.5 lakh, plot has been sold by Smt. Asha Rani and agreement stood cancelled. Thus, taking into consideration of all the above facts an amount of Rs. 4.5 lakh is added back to the total returned income of the assessee as undisclosed sale receipts. ITA No. 165/Asr/2019 . A.Y. 2013-14 4 6. Thereafter against the ld. A.O., assessee preferred first statutory appeal before the ld. CIT(A). Before the Ld. CIT(A) assessee contended that no incriminating documents were found from the assessee and in such case, no addition can be made in the hands of the assessee as per the decision of Saumya Construction (supra) wherein it has been held that by the Hon’ble Court that in case of search, without incriminating documents no addition can be made. 7. The assessee further took the plea that no notice u/s. 143(2) was ever issued to the assessee by the Ld. A.O., the assessment has been framed without the issue notice u/s. 143(2) which is a pre requisite legal formality for carrying out assessment proceedings u/s. 153A r.w.s. 143(3). 8. In support of its contention, Ld. A.R. relied on the following case laws: 1. Assistant Commissioner of Income Tax & ANR. vs. Hotel Blue Moon (SC) 321 ITR 362 Search and seizure-Block assessment-Notice under s. 143(2)-Clause (b) of s. 158BC enables the AO to complete the assessment by following the procedure like issue or notice under s. 142/143(2).-It does not provide for accepting the return as provided u/s. 143(1)(a). However, notice u/s. 143(2) becomes necessary only where it is necessary to check the return-where the block return confirms to the undisclosed income inferred by the authorities there is no reason why the authorities should issue notice under s. 143(2)-If an assessment is to be completed u/s. 143(3) r.s.s. 158BC notice under s. 143(2) should be issued within one year from the date of filing of block return-Omission on the part of the assessing authority to issue notice under s. 143(2) cannot be a mere procedural irregularity and the same is not curable. Further, S. 158BC(b) specifically refers to some of the provisions of the Act which are required to be followed by the AO while completing the block assessments under Chapter XIV-B-If the intention of the legislature was to exclude the provisions of Chapter XIV, it would have indicated that. Therefore, if the A.AO, for any reason, repudiates the return filed necessary issue notice u/s. 143(2) within the time prescribed in the proviso to s. 143(2). When s. 158BC(b) specifically refers applicability of s. 143(2), its proviso cannot be excluded. There is no reason to restrict the scope and meaning of the expression so far as may be apply. Further, s. 158BH provides for application of ITA No. 165/Asr/2019 . A.Y. 2013-14 5 the other provisions of the Act which specifically includes s. 142 and sub-section (2) and (3) of section 143. 2. Narendra Singh vs. ITO (2011) 138 TTJ 615 (Agra) Search and seizure-Assessment under s. 153A- Absence of notice under s. 143(2)- Service of notice under s. 143(2) within the prescribed time as per the provisions of s. 143(2) is mandatory-In the absence of service of such notice, AO cannot make the addition in the income of the assessee and AO is bound to accept the income eas returned by the assessee. 3. Virendra Dev Dixit vs. ACIT (2010) 41 DTR 0043, (2010) 233 CTR 0177, (2011) 331 ITR 0483 Search and seizures—Block assessment-Notice under s. 143(2)-Notice under s. 143(2) within the prescribed period of time is a pre-requisite for framing the block assessment under Chapter XIV-B – Non-issuance of notice is not a mere procedural irregularity and the same is not curable-No assessment could be made without issuing notice under s. 143(2) within the time specified-Notice having not been issued and the period of limitation having already expired, such notice cannot be issued- Tribunal not justified in remanding the case to the AO to cure the defect by issuing a fresh notice. 9. After hearing both the parties and going through the impugned order we hold in case of search and seizure non issuance of notice u/s. 143(2) is fatal for the revenue and in such case whole proceedings are null and void. 10. Now we come on merit of the case, assessee stated that no so called agreement was ever supplied to the assessee and she categorically requested, Ld. CIT(A) to provide copy of the so called agreement. But ld. CIT(A) did not agree with the contention of the assesse and confirmed the addition of Rs. 10 lakh as it is argued that when the payment as per so called document has been made only to the extent of Rs. 10 lakh and deal did not mature then addition of whole amount of Rs. 50 lakh cannot be made. The Ld. CIT(A) accepted the plea of the assessee and sustained the addition of Rs. 10 lakh. Since copy of the agreement not supplied to the assessee and it is ITA No. 165/Asr/2019 . A.Y. 2013-14 6 pertinent to mention here that assessee specifically requests for supply of the copy but to no avail. Therefore, we hold in such case addition cannot be sustained. We direct A.O. to delete addition of Rs. 10 lacs. 11. So far addition of Rs. 4,50,000/- is concerned, Ld. CIT(A) held that arguments of the Ld. A.R had forced to the effect that addition could be made only of the capital gain on transfer of plot for Rs. 4,50,000/- and addition of whole amount cannot be made and in the absence of any supporting document placed on record, Ld. CIT(A) granted relief of Rs. 2,50,000/- is given towards the cost of acquisition/indexed cost of acquisition. The capital gain was accordingly of Rs. 2,00,000/-. An addition to the extent of Rs. 2,00,000/- was sustained by the Ld. CIT(A). Appeal of the Assessee was partly allowed. 12. Now assessee has come before us. It is an undisputed fact that nothing was found from the possession of the assessee and an unsigned agreement dated 29.01.2013 was found during the search operation at the places of Shri Satpal Thatai and Shri Rajesh Dhuria etc. wherein it is mentioned that a property measuring 1200 sq ft. for the consideration of Rs. 50,00,000/- and Rs. 10,00,000/- was given in cash to the seller and date of registration deed was fixed for 13.05.2013 . However, such agreement was never executed by the concerned party. 13. Ld. D.R. could not bring on record anything contrary to this argument and he relied on the impugned order. 14. During the course of assessment proceedings and appellate proceedings, assessee specifically asked for the copy of the so called agreement but same was not provided by the lower authorities to the assessee. Since no incriminating material was found from the assessee and copy of the so called agreement has not been provided wherein ITA No. 165/Asr/2019 . A.Y. 2013-14 7 assessee could prepare his defence which resulted into miscarriage of justice. So, in our considered opinion, in such case, addition cannot be made. 15. Now we come to next ground relating to confirmation of Rs. 2,00,000/- by the Ld. CIT(A). 16. Ld. CIT(A) has confirmed addition of Rs. 2,00,000/- by estimating indexed cost of acquisition of property at Rs. 2,50,000/- as against sale proceed of Rs. 4,50,000/-. Rs. 10,50,000/- were received in total by assessee and her daughter Smt. Anupama Dhuria but was unable to refund the entire amount and aditionof said amount. Rs. 6,00,000/- was refunded to Brij Lal, P:raven Kumar, Ashok Kumar and Vinod Kumar and for balance of Rs. 4,50,000/- assessee gave her plot to Brij Lal, Parveen Kumar, Ashok Kumar and Vinod Kumar. But in the impugned order, nowhere it is mentioned the date of the acquisition of plot. So, in these circumstances, we set aside this matter to the file of the Ld. Assessing Officer to calculate the capital gain from the date of the acquisition of the property for capital gain purpose and will decide matter as per law. 17. In the result, appeal filed by the Assessee is partly allowed for statistical purpose. Order pronounced in Open Court on 02 - 12- 2021 Sd/- Sd/- (MANISH BORAD) (MAHAVIR PRASAD) ACCOUNTANT MEMBER True Copy JUDICIAL MEMBER Dated 02/12/2021 Copy of the Order forwarded to:- 1. The Appellant. 2. The Respondent. 3. The CIT (Appeals) – 4. The CIT concerned. 5. The DR., ITAT, Ahmedabad.