Late Sh. Om Parkash, Through Legal Heir, Jammu V. The Income-tax Office, Jammu

ITA 177/ASR/2013

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 4368 (ITAT-AMRITSAR)
• Duration Of Justice: 5 year(s) 11 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 30-01-2019
• Assessment Year: 2002-2003
• Appeal Filed On: 26-03-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: P N ARORA
• Keywords: Capital asset; Search and seizure; Onus to prove; Reason to believe; Reassessment proceedings; Borrowed satisfaction; Set aside; Capital Gains
• Section: 143(3); 201; 147; 131; 148; 54; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR (SMC) BEFORE SH. SANJAY ARORA, ACCOUNTANT MEMBER I.T.A. NO. 177/ASR/2013 AS SESSMENT YEAR: 2002-03 LATE OM PARKASH GUPTA, [THROUGH LRS RAJ MOHINI GUPTA & ORS], H. NO. 16 F, SECTOR-14, NANAK NAGAR, JAMMU [PAN: AEGPP 2866R] VS. INCOME TAX OFFICER, WARD-1 (2), JAMMU (APPELLANT) (RESPONDENT) APPELLANT BY : SH. P. N. ARORA (ADV.) RESPONDENT BY: SH. CHARAN DASS (D.R.) DATE OF HEARING: 30.01.2019 DATE OF PRONOUNCEMENT: 20.03.2019 ORDER PER SANJAY ARORA, AM: THIS IS AN APPEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS) JAMMU ('CIT(A) ' FOR SHORT) DATED 10.01.2013, DISMISSING THE ASSESSEES APPEAL CONTES TING HIS ASSESSMENT U/S. 143(3) READ WITH SECTION 147 OF THE INCOME TAX ACT, 1961 ( 'THE ACT' HEREINAFTER) DATED 29.12.2006 FOR THE ASSESSMENT YEAR (AY) 2002-03. 2. AT THE OUTSET, IT WAS OBSERVED THAT THE APPEAL I S PRESENTED BY THE ASSESSEES WIFE, SMT. RAJ MOHINI GUPTA, AS HIS LEGAL HEIR, WHO HAS AUTHORIZED THE LD. COUNSEL, SH. ARORA. A PERUSAL OF HER AFFIDAVIT, AS WELL AS T HE AOS REPORT DATED 25.5.2018, HOWEVER, CONFIRMS THE ASSESSEE TO HAVE TWO SONS AS WELL, I.E., PANKAJ GUPTA AND ITA NO. 177/ASR/2013 (AY 2002-03) LT. OM PARKASH GUPTA V. ITO 2 VARUN MAHAJAN, WHO ARE NEITHER PRESENT IN PERSON NO R THROUGH AN AUTHORIZED REPRESENTATIVE. SH. ARORA, ON BEING QUESTIONED IN T HE MATTER, WOULD SUBMIT THAT HE HAD BEEN REPRESENTING IN THE MATTER FOR QUITE SOME TIME, AND THAT HE MAKES A STATEMENT AT BAR THAT HE HAS THE AUTHORIZATION OF A LL THE FAMILY MEMBERS, EVEN THOUGH THE VAKALATNAMA MAY HAVE BEEN SIGNED ONLY BY SMT. RAJ MOHINI GUPTA. HER AFFIDAVIT (COPY ON RECORD), HE CONTINUED, BE CO NSTRUED AS SHE HAVING AUTHORIZED HIM ON BEHALF OF THE FAMILY, I.E., THE LATE ASSESSE ES WIFE AND TWO SONS, LIVING TOGETHER, AS EVIDENT FROM THE AFFIDAVIT ITSELF. THE HEARING IN THE MATTER WAS ACCORDINGLY PROCEEDED WITH. 3. THE ASSESSEE, AT THE TIME OF HEARING, SOUGHT ADM ISSION OF ADDITIONAL GROUNDS, RAISING LEGAL PLEAS, CHALLENGING THE REOPENING OF T HE ASSESSMENT IN THE INSTANT CASE, AS UNDER: 1. THAT THE INITIATION OF PROCEEDINGS U/S. 147/148 IS ILLEGAL, INVALID IN THE EYES OF LAW AS THE CASE HAS BEEN REOPENED ON THE BASIS OF BORROWED SAT ISFACTION AND THERE WAS NO APPLICATION OF MIND. AS SUCH THE INITIATION OF PROCEEDINGS U/S. 14 7/148 IS ILLEGAL, INVALID AND VOID ABINITIO AND THE ASSESSMENT ORDER IS LIABLE TO BE CANCELLED. 2. THAT THE REOPENING OF THE CASE IS ILLEGAL, INVAL ID AND BAD IN THE EYES OF LAW. THE REASONS RECORDED, I.E., PRIOR TO THE ISSUE OF N OTICE U/S. 148(1) ON 10.3.2006 (SERVED ON 16.3.2006), CONVEYED BY THE ASSESSING OF FICER (AO) TO THE ASSESSEE VIDE HIS LETTER DATED 16/17.11.2006 (PB PG. 4), ARE AS UNDER: THE ACIT (HQ) VIDE HIS OFFICE LETTER NO. 6358 DATE D 03-03-2006 PASSED ON A CONSEQUENTIAL INFORMATION IN CASE OF SEARCH AND SEIZURE OPERATION IN CASE OF M/S MAHAJAN & CO., GROUP OF CASES. THIS INFORMATION WAS RECEIVED FROM THE ADI ( INV.) JAMMU FOR TAKING ACTION U/S. 153C IN RESPECT OF THE FOLLOWING TRANSACTIONS:- ITA NO. 177/ASR/2013 (AY 2002-03) LT. OM PARKASH GUPTA V. ITO 3 NAME & ADDRESS OF THE PERSON PARTICULARS OF TRANSACTIONS DATE OF PAYMENT AMOU NT SH. OM PRAKASH GUPTA S/O SH. JAGRI MAL R/O SH. 16-F, SECTOR 14, NANAK NAGAR, JAMMU SALE OF H. NO. 559-A GANDHI NAGAR, JAMMU 01-06-2001 01-06-2001 20-07-2001 15.09.2001 12-12-2001 8,00,000/- 2,00,000/- 2,00,000/- 2,00,000/- 21,00,000/- 35,00,000/- AS PER THIS OFFICE RECORD THE ABOVE ASSESSEE HAS NO T FILED ANY RETURN OF INCOME FOR THE ABOVE RELEVANT ASSESSMENT YEARS. I HAVE REASON TO BELIEVE THAT CAPITAL GAIN OF RS. 35 LAC IN THE FINANCIAL YEAR 2001-02 HAS ESCAPED ASSESSMENT AND H ENCE THE CASE IS REOPENED U/S. 147 OF THE INCOME TAX ACT TO ASSESS THE INCOME OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2002-03. ON THE BASIS OF THE SAME, IT WAS SUBMITTED BY SH. A RORA THAT IT WAS APPARENT THAT THERE WAS NO INDEPENDENT APPLICATION OF MIND BY THE AO, AND HE HAD, IN REOPENING THE ASSESSMENT, PROCEEDED ON BORROWED SATISFACTION, NOT PERMISSIBLE IN LAW, AS EXPLAINED PER VARIOUS DECISIONS, VIZ. CIT V. SFIL STOCK BROKING LTD. [2010] 325 ITR 285 (DEL.); MOHAMED YUSUF WANI V. ITO (IN ITA NO. 372/ASR/2009, DATED 06.06.2011); KARANVIR VERMA V. ITO (IN ITA NO. 352/ASR/2014, DATED 18.05.2016); CHARANJIV LAL AGGARWAL V. ITO (IN ITA NO. 598/ASR/2015, DATED 15.09.2016). THE LD. DEPARTMENTAL REPRESENTATIVE (DR), SH. CHARA N DASS, WOULD OBJECT TO THE ADMISSION THEREOF, CLAIMING THE SAME TO BE O NLY AN AFTERTHOUGHT, WHICH COULD NOT BE ALLOWED, AS CLARIFIED PER SEVERAL DECISIONS, VIZ. 1. MANJI DANA VS. CIT [1966] 60 ITR 582 (SC) 2 . ULTRATECH CEMENT LTD. VS. ADDL. CIT (IN ITA NO. 1 060/2014, DATED 18/04/2017)(BOM) 3. MUKTI PROPERTIES (P.) LTD . V. CIT [2012] 344 ITR 177 (CAL) [50 DTR 273] 4. GOODFAITH CONSTRUCTION (P) LTD. VS. ACIT [2013] (AMRITSAR ITAT). ON MERITS, IT WAS ARGUED BY HIM THAT WHAT WAS REQUI RED FOR THE PURPOSE OF REOPENING AN ASSESSMENT, AS EXPLAINED PER SEVERAL D ECISIONS BY THE APEX COURT, SETTLING THE LAW IN THE MATTER, IS THAT THERE MUST BE A HONEST BELIEF, HELD BONA FIDE , ITA NO. 177/ASR/2013 (AY 2002-03) LT. OM PARKASH GUPTA V. ITO 4 EVEN IF PRIMA FACIE , I.E., AS TO ESCAPEMENT OF INCOME CHARGEABLE TO TA X FROM ASSESSMENT. THE SUFFICIENCY OF THE REASONS, OR EVEN THE CORRECTNESS OF THE INFORMATION, CANNOT BE GONE INTO AT THAT STAGE, WHI CH IS A MATTER SUBSEQUENT. 4. THE ASSESSEE HAS, ON THE BASIS OF THE MATERIAL O N RECORD, YIELDING PRIMARY FACTS, WHICH ARE NOT DISPUTED, RAISED LEGAL PLEAS. HOW COULD THE SAME BE OUSTED AT THE THRESHOLD? THE SAME IS ADMITTED ( NTPC LTD. V. CIT [1998] 229 ITR 383 (SC)). ON MERITS, I FIND, EQUALLY, THE ASSESSEE TO HAVE N O CASE. THE INFORMATION RECEIVED FROM THE INVESTIGATION WING OF THE REVENUE IS ON THE BASIS OF MATERIAL SEIZED DURING SEARCH PROCEEDINGS U/S. 132 OF THE AC T. THE STATUTORY PRESUMPTION U/S. 292C IS AS TO THE TRUTH OF ITS CONTENTS. FURT HER, THE SOURCE OF THE INFORMATION LEADING TO THE REASON TO BELIEVE, FURTHER, IS THE A GREEMENT TO SELL DATED 01.6.2001 ENTERED INTO BETWEEN THE ASSESSEE AND ONE, RAJ KUMAR S/O SH. SARDARI LAL, PER WHICH THE ASSESSEE SOLD A RESIDENTIAL HOUSE (AT 559 A, GANDHI NAGAR, JAMMU) TO THE LATTER FOR RS.35 LACS. THE INFORMATION IS RELEVANT, FROM A RELIABLE SOURCE, AND SPECIFIC, I.E., HAS A DIRECT AND LIVE NEXUS WITH TH E REASON TO BELIEVE THE ASSESSEE TO HAVE INCOME IN THE FORM OF CAPITAL GAIN, WHICH HAD ESCAPED ASSESSMENT IN-AS-MUCH AS IT WAS, ON VERIFICATION, FOUND BY THE AO THAT TH E ASSESSEE HAD NOT RETURNED ANY INCOME FOR THE RELEVANT YEAR, OR OTHERWISE DISCLOSE D THIS TRANSACTION TO THE REVENUE. HOW COULD IT BE SAID THAT THERE IS NO APPL ICATION OF MIND? ALL THE INGREDIENTS NECESSARY FOR THE ISSUE OF NOTICE U/S. 148(1) ARE SATISFIED. THAT THE AO CAN; RATHER, IS OBLIGED TO RELY ON THE INFORMATION THAT COMES TO HIM FROM ANOTHER WING OF THE DEPARTMENT, AS THE INVESTIGATION WING I N THE INSTANT CASE, IS WELL- SETTLED, PER A SERIES OF DECISIONS, WHICH WERE IN F ACT COMMUNICATED TO THE LD. COUNSEL, SH. ARORA (VIZ. ITO V. PURUSHOTTAM DASS BANGUR [1997] 224 ITR 362 (SC); FRONTIER TRADING CO. V. CHOUDHARY (P.N.) V. ITO [1982] 136 ITR 503 (P&H); HAZI AMIR MOHD. MIR AHMED V. CIT [1997] 110 ITR 630 (P&H); JASH ITA NO. 177/ASR/2013 (AY 2002-03) LT. OM PARKASH GUPTA V. ITO 5 BHAI F. PATEL V. CIT [1982] 136 ITR 799 (P&H); KRIPA RAM RAMJI DASS V. ITO [1982] 135 ITR 68 (P&H); RANBIR ENGINEERING MILLS STORE V. ITO [1980] 126 ITR 512 (P&H), VARADARAJULU NAIDU (M.) V. CIT [1978] 111 ITR 301 (MAD) AND BRIJ MOHAN AGARWAL V. ASST. CIT [2004] 268 ITR 400 (ALL)). HE DID NOT SEEK TIME TO RESPOND; THE MATTER BEING EVEN OTHERWISE WELL-SETTL ED. FURTHER, NEITHER THE SUFFICIENCY OF THE REASON/S NOR EVEN THE CORRECTNES S OF THE INFORMATION CAN BE EXAMINED AT THAT STAGE, WHICH ASPECT IS AGAIN WELL- SETTLED ( RAYMOND WOOLLEN MILLS LTD. V. ITO [1999] 236 ITR 34 (SC); ASTT. CIT V. RAJESH JHAVERI STOCK BROKERS (P.) LTD . [2007] 291 ITR 500 (SC), BOTH DECISIONS RENDERED FOLLOWING JUDICIAL PRECEDENTS BY THE APEX COURT). IT MUST ALSO BE BORNE IN MIND THAT THE APEX COURT HAS LAID DOWN A PROCEDURE IN GKN DRIVESHAFTS (INDIA) LTD. V. ITO [2003] 259 ITR 19 (SC), WHEREBY THE ASSESSEE CAN OBJECT TO THE REA SONS RECORDED AFTER FILING THE RETURN OF INCOME IN RESPONSE TO THE NOTICE U/S. 148 , AND WHERE SO, THE AO IS BOUND TO DISPOSE THE SAID OBJECTIONS PER A SPEAKING ORDER PRIOR TO PROCEEDING FURTHER IN THE MATTER. THE ASSESSEEE IN THE PRESENT CASE HAS NOT RAISED AN Y OBJECTION TO THE REASON/S FOR ISSUING THE NOTICE U/S. 148 EVEN TILL THE DATE OF THE ASSESSMENT (REFER PG. 2 OF THE ASSESSMENT ORDER). 5.1 THE ONLY ISSUE RAISED ON THE MERITS OF THE ASSE SSMENT AS FRAMED IS THE DISALLOWANCE OF THE ASSESSEES CLAIM U/S. 54 ON THE APPLICATION OF THE CAPITAL GAIN ARISING TO THE ASSESSEE ON THE ADMITTED SALE OF THE GANDHI NAGAR PROPERTY, I.E., ON PURCHASE OF A RESIDENTIAL HOUSE AT 16F (PLOT NO. 35 8), SECTOR 14, NANAK NAGAR, JAMMU FOR A CONSIDERATION OF RS.27.10 LACS FROM ONE , SMT. AMRITI DEVI (AD). THE BASIS OF THE SAID CLAIM, MADE PER A RETURN FILE D ON 21.6.2006 (PB PGS. 1-3), IS THE AGREEMENT TO SELL (ATS) DATED 25.12.2001 (PB PG S. 38-39). THE ASSESSEE FAILING TO PRODUCE AD, CLAIMING HER WHEREABOUTS TO BE NOT K NOWN, THE AO LOCATED HER AND ITA NO. 177/ASR/2013 (AY 2002-03) LT. OM PARKASH GUPTA V. ITO 6 RECORDED HER STATEMENT U/S. 131 OF THE ACT ON 13.12 .2006 , WHEREIN HER STATEMENT BEING REPRODUCED AT PGS. 3-4 OF THE ASSESSMENT ORDE R, SHE AVERRED THAT: (A) SHE HAD NEVER OWNED ANY LANDED PROPERTY AT THE STATED ADDRESS, MUCH LESS SOLD IT TO ANY ONE; (B) THAT SHE HAD IN FACT TAKEN A SMALL ROOM (WITHO UT KITCHEN) IN THE BACKYARD OF THE SAID RESIDENTIAL PROPERTY AT A RENT RS. 35-40 PER M ONTH FROM SH. OM PRAKASH GUPTA (OPG), THE ASSESSEE, WHERE SHE LIVED FOR 5-6 YEAR B EFORE VACATING IT ABOUT TWO YEARS BACK; AND (C) THAT SHE BEING A NON-STATE SUBJECT, COULD NOT E ITHER PURCHASE OR SELL ANY IMMOVABLE PROPERTY IN THE SAID OF J&K, FURTHER ADDING THAT SHE WAS RESIDENT OF VILLAGE BAR NALA, DISTT. GURDASPUR, PUNJAB. SHE, FURTHER, ON BEING CONFRONTED WITH THE ATS DATE D 25.12.2001, PURPORTEDLY EXCECUTED BY HER, CATEGORICALLY DENIED HAVING EXECU TED ANY SUCH DOCUMENT, CLARIFYING TO BE AN ILLITERATE, HAVING NO KNOWLEDGE OF HINDI OR ENGLISH ALPHABETS THE AGREEMENT (ATS) BEING IN ENGLISH AND HER SIGN ATURE IN HINDI. THE STATEMENT OF AD WAS CONFRONTED TO THE ASSESSEE VIDE SHOW CAUS E LETTER DATED 20.12.2006 (PB PGS. 13-16), WHO QUESTIONED THE EVIDENTIARY VALUE O F THE SAID STATEMENT, BEING UNILATERAL AND, FURTHER, TAKEN AT HIS BACK, AND WIT HOUT HIS CROSS-EXAMINATION, WHICH WAS ASKED FOR. THE AO OBSERVED THAT HE HAD ALREADY ALLOWED SEVERAL OPPORTUNITIES TO THE ASSESSEE, WHO IN FACT HAD FAILED TO PRODUCE AD OR EVEN FURNISH HER POSTAL ADDRESS, FURTHER STATING THAT SEEKING HER CROSS-EXA MINATION AT THAT LATE STAGE WAS ONLY AN ATTEMPT TO FRUSTRATE THE ASSESSMENT WHICH W AS GETTING TIME BARRED. IN FACT, THE ASSESSEES STATEMENT HAD BEEN RECORDED ON OATH U/S. 131 ON 27.3.2005 IN CONNECTION WITH THE SEARCH AND SEIZURE PROCEEDINGS IN THE CASE OF M/S. MAHAJAN & CO. (IN THE COURSE OF WHICH THE ATS DATED 01.6.2001 WAS FOUND), WHEREIN HE HAD, ON BEING SPECIFICALLY ASKED, STATED THAT HE HAD NOT PURCHASED OR SOLD ANY HOUSE PROPERTY IN THE PAST OTHER THAN AT 559A, GANDHI NAG AR, JAMMU. THIS, IN FACT, ALSO AGREED WITH THE ASSESSEES ORIGINAL RETURN FOR THE CURRENT YEAR FILED ON 27.3.2003 ITA NO. 177/ASR/2013 (AY 2002-03) LT. OM PARKASH GUPTA V. ITO 7 (PB PG. 3, ALSO PGS. 2-3 OF THE ASSESSMENT ORDER). SUMMONS WERE ALSO ISSUED TO SH. ANIL KUMAR S/O SH. BRIJ MOHAN AND SH. SAI DASS S/O SH. KRISHAN LAL, I.E., THE WITNESSES TO THE ATS DATED 25.12.2001, AT THE ADDRE SSES STATED IN THE SAID ATS, TO, HOWEVER, NO REPLY. THE INSPECTOR DEPUTED TO ASCERTA IN THE EXISTENCE OF THE WITNESSES, SH. K.K. SHARMA, REPORTED THAT THE SAI D PERSONS WERE PRESENTLY NOT RESIDING AT THE STATED ADDRESSES. THE ASSESSEE, ON BEING SHOW CAUSED IN THE MATTER, FURNISHED A CERTIFICATE FROM THE JAMMU DEVELOPMENT AUTHORITY (JDA) TO THE EFFECT THAT THE PROPERTY AT PLOT NO. 358, SECTOR 14, NANAK NAGAR, JAMMU STOOD IN THE NAME OF SH. RATTAN LAL (RL) BEFORE BEING TRANSFERRE D TO THE ASSESSEE (OPG). THE AO, ACCORDINGLY, MADE ENQUIRIES IN THE MATTER, WRIT ING A LETTER TO JDA, APART FROM ISSUING SUMMONS U/S. 131 TO THE NAIB TEHSILDAR (JDA , ZONE B), WHO APPEARED ON 26.12.2006 AND INFORMED THE BASIS ON WHICH THE SAID CERTIFICATE HAD BEEN ISSUED, I.E., AS BEING IN RESPONSE TO AN APPLICATION FOR RE GULARIZATION/CORRECTION OF THE SAID HOUSE BY OPG, AND WHICH (RECORD) STOOD, AFTER VERIF ICATION, CORRECTED ON 02.01.2004. AS THE RELEVANT RECORD WAS WITH THE OFF ICE OF THE DIRECTOR, LAND MANAGEMENT (DLM), JDA, THE SAID OFFICE WAS ENQUIRED WITH BY THE AO, REQUIRING IT TO CLARIFY THE OWNERSHIP OF THE SAID PROPERTY AN D, FURTHER, IF OPG HAD PURCHASED IT FROM RL. ON THE BASIS OF THE DOCUMENTS PROVIDED BY THE DIRECTORS OFFICE, IT TRANSPIRED THAT RL HAD SUBMITTED AN AFFIDAVIT DATED 13.11.2003 STATING THAT SH. OM PRAKASH S/O SH. JAGIRI MAL GUPTA, IS THE SOLE OCCUP ANT OF PLOT NO. 358 (HOUSE NO. 16), MEASURING 9 MARLAS, AT SECTOR 14, NANAK NAGAR, JAMMU, WHO HAD CONSTRUCTED A HOUSE THEREAT. AND THAT HE HAD OCCUPIED THE SAID PREMISES AS A TEN ANT, AND HAD NO OTHER CONCERN/INTEREST THEREIN . AND, ACCORDINGLY, HAD NO OBJECTION TO THE SAID PLOT BEING REGULARIZED IN FAVOUR OF OPG, PASSING TH E CORRECTION ORDER. THE ASSESSEE HAD ALSO FURNISHED AN AFFIDAVIT DATED 04.9.2003 TO THE EFFECT THAT HE WAS IN POSSESSION OF THE SAID PLOT OF LAND, AND HAD CONSTR UCTED A PUCCA HOUSE THEREAT, RESIDING THEREIN WITH HIS FAMILY FOR THE LAST TWO Y EARS. APART FROM THE SAID AFFIDAVIT, ITA NO. 177/ASR/2013 (AY 2002-03) LT. OM PARKASH GUPTA V. ITO 8 RL HAD MADE A DECLARATION ON OATH BEFORE THE MUNSIF F, JUDICIAL MAGISTRATE, FIRST CLASS, JAMMU, AGAIN ON 13.11.2003, TO THE SAME EFFE CT, ALSO STATING THE CIRCUMSTANCES UNDER WHICH HIS NAME HAD ENTERED AS A N OCCUPANT OF PLOT NO. 358 (HOUSE NO. 16), SECTOR 14, NANAK NAGAR, JAMMU, I.E. , AS OPG WAS NOT PRESENT AT THE TIME OF SURVEY MADE BY THE JDA FOR REGULARIZING THE SAID COLONY, SO THAT HIS (RATTAN LALS) NAME, OCCUPYING THE PREMISES AS A TE NANT, CAME TO BE ENTERED IN THE LIST OF THE OCCUPANTS. IT IS FOR THE CORRECTION OF THIS ENTRY THAT OPG MOVED THE JDA VIDE HIS APPLICATION DATED 06.8.2003 FOR CORRECTION /REGULARIZATION OF THE SAID PLOT IN HIS NAME. 5.2 THE AO, IN VIEW OF THE FORE-GOING, CONCLUDED AS UNDER: ON COMPARING AND PERUSAL OF ALL THE ABOVE STATEME NTS/DECLARATIONS MADE BY THE ASSESSEE, SH. RATTAN LAL AND SMT. AMRITI DEVI AT DI FFERENT TIMES REVEALED THE CRUX THAT SH. RATTAN LAL ALONGWITH HIS WIFE SMT. AMRITI DEVI WERE PUTTING UP AS TENANT IN THE ABOVE REFERRED PROPERTY AND SH. OM PARKASH GUPTA WAS THE OWNER OF THE REFERRED PROPERTY. IT WAS ONLY INADVERTENTLY THAT THE NAME OF SH. RATTAN LAL WAS ENTERED IN THE LIST OF OCCUPANTS OF THE PLOT MAINTAINED BY JDA WHICH WAS CORRECTED/REGULARI ZED BY SH. OM PARKASH GUPTA AFTER APPLYING FOR THE SAME BEFORE THE JDA AUTHORITIES CO NCERNED . THE ASSESSEE HAS NOT FURNISHED ANY DOCUMENTARY EVIDENCE OR ANY CORROBORATING EVIDE NCE SUBSTANTIATING THE PURCHASE OF ABOVE REFEREED HOUSE PROPERTY IN SPITE OF THE FACT THAT THE ASSESSEE HAD ALREADY BEEN REQUESTED AND SHOW CAUSE VIDE THIS OFFICE ORDER SHE ET ENTRY DATED 18/(NOT CLEAR)/2006 AND SHOW CAUSE DATED 16/11/2006 ASKING HIM TO FURNISH THE DOCUMENTARY EVIDENCE SUB STANTIATING HIS CLAIM OF PURCHASE OF ABOVE REFERRED PROPERTY. T HE ASSESSEE HAD NOT FURNISHED ANY DOCUMENTARY EVIDENCE IN HIS REPLIES SUBMITTED IN RE SPONSE TO THIS OFFICE LETTERS & SHOW- CAUSE. IT WAS ONLY AFTER THIS OFFICE HAD PROVED THA T AGREEMENT TO SELL FURNISHED BY THE ASSESSEE IS A BOGUS AND HAD NOT BEEN SIGNED BY SH. AMRITI DE VI. THE ASSESSEE ON 22/12/2006, WITH THE KNOWLEDGE OF THAT THE CASE WAS GOING TO BE BARRED B Y TIME ON 31/12/2006 FURNISHED A COPY OF THE ABOVE DISCUSSED NAZOOL LIST WITH THE CONTENTION THAT NO FURTHER VERIFICATION/INVESTIGATION COULD BE MADE IN SUCH A SHORT SPAN OF TIME. THE ENQ UIRIES CONDUCTED WITH THE AUTHORITIES ITA NO. 177/ASR/2013 (AY 2002-03) LT. OM PARKASH GUPTA V. ITO 9 CONCERNED WITH REFERENCE TO THE DOCUMENTS FURNISHED BY THE ASSESSEE CLEARLY SHOWS THAT THE PROPERTY WAS NOT SOLD BY SMT. AMRITI DEVI OR SH. RA TTAN LAL TO SH. OM PARKASH GUPTA. THE DISCUSSION MADE IN THE PROCEEDINGS PARAGRAPH CLEARL Y SHOWS THAT SH. OM PARKASH DID NOT MADE ANY INVESTMENT ON THE PURCHASE OF NEW HOUSE PR OPERTY AT NANAK NAGAR, JAMMU. IN HIS RETURN OF INCOME FILED SUBSEQUENT TO THE ISSUE OF N OTICE U/S 148, HE HAS ADMITTED THAT HE HAD SOLD HIS HOUSE PROPERTY AT 559-A, GANDHI NAGAR, JAM MU FOR A CONSIDERATION OF RS. 35 LACS. HE HAS, HOWEVER, CLAIMED IN THE SAID RETURN THAT HE HAD PURCHASED A NEW RESIDENTIAL HOUSE AT NANAK NAGAR, JAMMU FROM SMT. AMRITI DEVI W/O SH. RA TTAN LAL. HE WAS GIVEN INNUMERABLE OPPORTUNITIES TO PRODUCE EVIDENCE TO SHOW THAT THE NEW RESIDENTIAL HOUSE WAS ACTUALLY PURCHASED BY HIM SUBSEQUENT TO HIS SELLING OF HIS H OUSE AT 559-A, GANDHI NAGAR, JAMMU. HOWEVER, DISCUSSION IN THE ASSTT. ORDER CLEARLY SHO WS THAT HE HAS NOT ABLE TO SHOW THAT THE NEW RESIDENTIAL HOUSE WAS ACTUALLY PURCHASED BY HIM. ON THE CONTRARY SUSTAINED ENQUIRIES, INVESTIGATIONS AND EXAMINATIONS CONDUCTE D BY THIS OFFICE HAS PROVED BEYOND ANY DOUBT THAT NO RESIDENTIAL PROPERTY AT NANAK NAGAR, JAMMU WAS PURCHASED BY THE ASSESSEE AS CLAIMED BY HIM IN HIS RETURN OF INCOME FOR THE RELE VANT ASSTT. YEAR. IN FACT EXAMINATION HAS PROVED THAT AGREEMENT TO SELL ENTERED INTO BY THE ASSESSEE WITH SMT. AMRITI DEVI WAS A BOGUS AND A FORGED DOCUMENT WHICH WAS FABRICATED BY HIM WITH THE SOLE INTENTION OF REDUCING HIS TAX LIABILITY UNDER THE HEAD LONG TERM CAPITAL GAINS ARISING FROM THE SALE OF PROPERTY AT 559-A, GANDHI NAGAR, JAMMU. I, THEREFORE, HOLD THAT THE ASSESSEE WILL NOT BE EN TITLED FOR ANY DEDUCTION UNDER SECTION 54 OF THE INCOME TAX ACT AS CLAIMED BY HIM IN HIS R ETURN OF INCOME FILED ON 21/06/2006 SUBSEQUENT TO ISSUE OF THE NOTICE U/S 148 DATED 10/ 03/2006. FURTHER FOR REASONS ALREADY DISCUSSED IN THE PRECEDING PARAS THE BENEFIT OF THE COST OF IMPROVEMENT CLAIMED BY THE ASSESSEE ON THE PROPERTY AT 559-A, GANDHI NAGAR, JA MMU IN HIS RETURN OF INCOME SHALL NOT BE ALLOWED WHILE COMPUTING THE LONG TERM CAPITAL GAIN ARISING FROM THE SALE OF THE ABOVE REFERRED PROPERTY. HENCE THE DEDUCTION CLAIMED BY THE ASSESSEE U/S 54 OF THE INCOME TAX ACT IS HEREBY REJECTED AND THE LONG-TERM CAPITAL GAIN ARISED TO T HE ASSESSEE ON THE SALE OF THE ABOVE REFERRED PROPERTY OF THE ASSESSEE IS RECOMPUTED AS UNDER. (EMPHASIS, SUPPL IED) ITA NO. 177/ASR/2013 (AY 2002-03) LT. OM PARKASH GUPTA V. ITO 10 THE ASSESSEE, IN APPEAL, RELYING ON THE ATS DATED 2 5.12.2001, WITH THE PLOT ENTERED IN HIS NAME IN THE RECORDS OF JDA ON 03.01.2004, TH E LD. CIT(A) DECIDED THUS: 4. DETERMINATION 4.1. THE A.O. HAS MADE AN ADDITION ON ACCOUNT OF LO NG-TERM CAPITAL GAIN AT RS. 30,76,316. I HAVE CONSIDERED THE SUBMISSION OF THE APPELLANT A ND FINDINGS OF THE AO IN THE ASSESSMENT ORDER AND REMAND REPORT . IT IS ADMITTED BY THE APPELLANT THAT HE HAS SOLD A PROPERTY AT 559-A, GANDHI NAGAR, JAMMU FOR A CONSIDERATION OF RS.35 LA KHS DURING THE FINANCIAL YEAR 2001-02 RELEVANT TO ASSESSMENT YEAR 2002-03. HOWEVER, THE A PPELLANT HAS CLAIMED EXEMPTION U/S 54 OF THE ACT ON THE GROUND THAT HE HAS PURCHASED A HO USE PROPERTY ON 25.12.2001 FROM AMRITI DEVI W/O SH RATTAN LAL FOR A CONSIDERATION OF RS 27 .10 LAKHS IN CASH. HOWEVER, AS PER THE JDA CERTIFICATE, PLOT NO. 358 (H NO. 16, SECTOR 14, NANAK NAGAR, JAMMU) WAS TRANSFERRED TO THE APPELLANT ON 03.01.2004. IN THE SAID TRANSFER T HE NAME OF OCCUPIER IS SHOWN AS SH. RATTAN LAL S/O SH. SANT RAM PERMANENT RESIDENT OF THE STAT E. AS ON 03.01.2004 IF SH. RATTAN LAL WAS ALIVE, THEN HOW COME SMT. AMRITI DEVI SOLD THE PROP ERTY TO THE APPELLANT ? THE PROVISIONS OF SECTION 54 ARE REPRODUCED AS UNDE R: ON THE PERUSAL OF ABOVE SECTION, IT IS CLEAR THAT T HE APPELLANT SHOULD HAVE PURCHASED THE PROPERTY ONE YEAR BEFORE OR TWO YEARS AFTER THE DAT E OF TRANSFER. 4.2 AS FAR AS THE AGREEMENT TO SELL AND IRREVOCABLE POWER OF ATTORNEY DATED 25.12.2001 PRODUCED BY THE APPELLANT IS CONCERNED, THE DOCUMEN T DOES NOT SEEM TO HAVE LEGAL VALIDITY ON THE BASIS OF FOLLOWING GROUNDS- A) FIRSTLY THE PROPERTY CLAIMED TO HAVE BEEN PURCHA SED BY THE APPELLANT WAS IN THE NAME OF SH RATTAN LAL AND AFTER THE DEATH OF SH. RATTAN LAL HE WAS SURVIVED BY A WIFE AND SONS. SMT AMRITI DEVI WIFE OF LATE SH. RATTAN LAL HAS HERSELF DECLARED IN THE STATEMENT DATED 14.12.2009 RECORDED DURING REMAND PROCEEDINGS THAT HER HUSBAN D WAS A STATE SUBJECT AND HER SONS ARE STATE SUBJECT BUT SHE DOES NOT HOLD A STAT E SUBJECT OF THE STATE. AS PER THE LAWS OF THE STATE, AFTER THE DEATH OF SH. RATTAN LAL, ONLY HIS SONS WILL GET THE RIGHTS IN PROPERTY AND NOT HIS WIFE AS SHE IS A NON STATE SUBJECT. THEREFORE, SHE CANNOT SIGN AN AGREEMENT TO SELL OR ISSUE AN IRREVOCABLE POWER OF ATTORNEY IN RESPECT OF A PROPE RTY IN WHICH SHE DOES NOT HAVE ANY LEGAL RIGHT. THUS, THE DOCUMENTS SUBMITTED BY THE APPELLA NT HAVE NO LEGAL VALIDITY. B) SECONDLY, THE PLOT IN QUESTION BELONGS TO JAMMU DEVELOPMENT AUTHORITY AND CANNOT BE TRANSFERRED WITHOUT PRIOR APPROVAL OF JAMMU DEVELOP MENT AUTHORITY. IT IS ONLY AFTER THE ITA NO. 177/ASR/2013 (AY 2002-03) LT. OM PARKASH GUPTA V. ITO 11 PERMISSION OF THE JDA THAT PROPERTY AND LEGAL POSSE SSION CAN BE TRANSFERRED AFTER GETTING A TRANSFER LETTER & POSSESSION LETTER FROM THE JDA AF TER PAYING REQUISITE TRANSFER FEE. IN VIEW OF ABOVE FACTS AND LEGAL POSITION, I AM OF THE OPINION THAT THE AO IS JUSTIFIED IN WITHDRAWING THE EXEMPTION CLAIMED BY THE APPELLANT U/S 54 OF THE ACT. AS PER THE CERTIFICATE OF THE JDA, THE PLOT WAS TRA NSFERRED ON 03.01 2004, I.E., AFTER THE PERIOD SPECIFIED U/S 54 OF THE ACT FOR MAKING THE INVESTME NT IN THE HOUSE PROPERTY. 6. BEFORE ME, THE ASSESSEES PRINCIPAL ARGUMENTS WE RE AS FOLLOWS: (A) NO CROSS-EXAMINATION (CE) HAVING BEEN PROVIDED BY THE AO, THE STATEMENT OF AD COULD NOT BE RELIED UPON. THAT IS, THE ASSESSMEN T MUST BE SET ASIDE AND THE MATTER RESTORED TO THE FILE OF THE AO TO ALLOW CROS S-EXAMINATION TO THE ASSESSEE; (B) THE MATTER IN FACT ADMITS OF NO TWO VIEWS IN LI GHT OF THE REMAND REPORT DATED 21.12.2009 (PB PG. 48), WHEREUPON THE AO, ON THE BA SIS OF ENQUIRY BY HIS INSPECTOR, SH. RAKESH KUMAR, REPORTS THAT AD CONFES SED TO HAVE SOLD HOUSE NO. 16F, SECTOR 14, NANAK NAGAR, JAMMU TO OPG ABOUT SIX YEARS BACK; AND WHICH FACT WAS CONFIRMED BY HIM FROM THE NEIGHBORHOOD. FURTHER , OPG HAD SUBMITTED (COPY OF) THE REVENUE RECORD FROM THE OFFICE OF THE NAIB TEHSILDAR, WHICH SHOWS THAT THE PROPERTY HAS BEEN TRANSFERRED IN HIS NAME. THE LD. COUNSEL FOR THE ASSESSEE, SH. ARORA, ON BEI NG ASKED DURING HEARING ABOUT THE REMAND REPORT (DATED 04.02.2008), AS FURNISHED BY THE AO DURING THE APPELLATE PROCEEDINGS (AT PB PGS. 17-21), AS WELL AS THAT DAT ED 14/12/2009, WHICH DO NOT FIND REFERENCE IN THE IMPUGNED ORDER, WOULD SUBMIT THAT THE SAME IS ESSENTIALLY A REPRODUCTION OF WHAT STANDS STATED IN THE ASSESSMEN T ORDER. THE LD. DEPARTMENTAL REPRESENTATIVE (DR), SH. CHARA N DASS, ON THE OTHER HAND, WOULD SUBMIT THAT IN VIEW OF THE CATEGORICAL FINDINGS BY THE AO IN THE ASSESSMENT ORDER, NOT REBUTTED, NO CREDENCE COULD B E GIVEN TO THE REMAND REPORT DATED 21.12.2009. SH. ARORA WOULD, IN REJOINDER, SU BMIT THAT THE REVENUE HAD NO CASE IN VIEW OF THE SUBSEQUENT REMAND REPORT BY THE AO, WHICH HAD BEEN IGNORED BY THE LD. CIT(A) IN PASSING HIS ORDER. ITA NO. 177/ASR/2013 (AY 2002-03) LT. OM PARKASH GUPTA V. ITO 12 7. I HAVE HEARD THE PARTIES, AND PERUSED THE MATERI AL ON RECORD. 7.1 SECTION 54 OF THE ACT READS AS UNDER: PROFIT ON SALE OF PROPERTY USED FOR RESIDENCE. (1) SUBJECT TO THE PROVISIONS OF SUB-SECTION (2), W HERE, IN THE CASE OF AN ASSESSEE BEING AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY, THE CAPITAL GAIN ARISES FROM THE TRANSFER OF A LONG- TERM CAPITAL ASSET, BEING BUILDINGS OR LANDS APPURT ENANT THERETO, AND BEING A RESIDENTIAL HOUSE, THE INCOME OF WHICH IS CHARGEABLE UNDER THE HEAD I NCOME FROM HOUSE PROPERTY (HEREAFTER IN THIS SECTION REFERRED TO AS THE ORIGINAL ASSET), AND THE ASSESSEE HAS WITHIN A PERIOD OF ONE YEAR BEFORE OR TWO YEARS AFTER THE DATE ON WHICH TH E TRANSFER TOOK PLACE PURCHASED, OR HAS WITHIN A PERIOD OF THREE YEARS AFTER THAT DATE CONSTRUCTED, ONE RESIDENTIAL HOUSE IN INDIA , THEN, INSTEAD OF THE CAPITAL GAIN BEING CHARGED TO INCOME -TAX AS INCOME OF THE PREVIOUS YEAR IN WHICH THE TRANSFER TOOK PLACE, IT SHALL BE DEALT WI TH IN ACCORDANCE WITH THE FOLLOWING PROVISIONS OF THIS SECTION, THAT IS TO SAY, (I) IF THE AMOUNT OF THE CAPITAL GAIN IS GREATER TH AN THE COST OF THE RESIDENTIAL HOUSE SO PURCHASED OR CONSTRUCTED (HEREAFTER IN THIS SECTION REFERRED TO AS THE NEW ASSET), THE DIFFERENCE BETWEEN THE AMOUNT OF THE CAPITAL GAIN AND THE COST OF THE NEW ASSET SHALL BE CHARGED UNDER SECTION 45 AS THE INCOME OF THE PREVIOUS YEAR; AND FOR THE PURPOSE OF COMPUTING IN RESPECT OF THE NEW ASSET ANY CAPITAL GAIN ARISING FROM ITS TRA NSFER WITHIN A PERIOD OF THREE YEARS OF ITS PURCHASE OR CONSTRUCTION, AS THE CASE MAY BE, THE C OST SHALL BE NIL; OR (II) IF THE AMOUNT OF THE CAPITAL GAIN IS EQUAL TO OR LESS THAN THE COST OF THE NEW ASSET, THE CAPITAL GAIN SHALL NOT BE CHARGED UNDER SECTION 45; AND FOR THE PURPOSE OF COMPUTING IN RESPECT OF THE NEW ASSET ANY CAPITAL GAIN ARISING F ROM ITS TRANSFER WITHIN A PERIOD OF THREE YEARS OF ITS PURCHASE OR CONSTRUCTION, AS THE CASE MAY BE, THE COST SHALL BE REDUCED BY THE AMOUNT OF THE CAPITAL GAIN. (2) THE AMOUNT OF THE CAPITAL GAIN WHICH IS NOT APP ROPRIATED BY THE ASSESSEE TOWARDS THE PURCHASE OF THE NEW ASSET MADE WITHIN ONE YEAR BEFO RE THE DATE ON WHICH THE TRANSFER OF THE ORIGINAL ASSET TOOK PLACE, OR WHICH IS NOT UTILISED BY HIM FOR THE PURCHASE OR CONSTRUCTION OF THE NEW ASSET BEFORE THE DATE OF FURNISHING THE RET URN OF INCOME UNDER SECTION 139, SHALL BE DEPOSITED BY HIM BEFORE FURNISHING SUCH RETURN [SUC H DEPOSIT BEING MADE IN ANY CASE NOT LATER THAN THE DUE DATE APPLICABLE IN THE CASE OF T HE ASSESSEE FOR FURNISHING THE RETURN OF INCOME UNDER SUB-SECTION (1) OF SECTION 139] IN AN ACCOUNT IN ANY SUCH BANK OR INSTITUTION AS MAY BE SPECIFIED IN, AND UTILISED IN ACCORDANCE WIT H, ANY SCHEME WHICH THE CENTRAL GOVERNMENT MAY, BY NOTIFICATION IN THE OFFICIAL GAZ ETTE, FRAME IN THIS BEHALF AND SUCH RETURN SHALL BE ACCOMPANIED BY PROOF OF SUCH DEPOSIT, AND FOR THE PURPOSES OF SUB-SECTION (1), THE AMOUNT, IF ANY, ALREADY UTILISED BY THE ASSESSEE FO R THE PURCHASE OR CONSTRUCTION OF THE NEW ASSET TOGETHER WITH THE AMOUNT SO DEPOSITED SHALL B E DEEMED TO BE THE COST OF THE NEW ASSET: PROVIDED THAT IF THE AMOUNT DEPOSITED UNDER THIS SUB-SECTIO N IS NOT UTILISED WHOLLY OR PARTLY FOR THE PURCHASE OR CONSTRUCTION OF THE NEW ASSET W ITHIN THE PERIOD SPECIFIED IN SUB- SECTION (1), THEN, ITA NO. 177/ASR/2013 (AY 2002-03) LT. OM PARKASH GUPTA V. ITO 13 (I) THE AMOUNT NOT SO UTILIZED SHALL BE CHARGED UND ER SECTION 45 AS THE INCOME OF THE PREVIOUS YEAR IN WHICH THE PERIOD OF THREE YEARS FROM THE DA TE OF THE TRANSFER OF THE ORIGINAL ASSET EXPIRES; AND (II) THE ASSESSEE SHALL BE ENTITLED TO WITHDRAW SUC H AMOUNT IN ACCORDANCE WITH THE SCHEME AFORESAID. (EMPHASIS, SUPPLIED) THE ASSESSEE IN THE INSTANT CASE HAS SOLD HIS RESID ENTIAL HOUSE AT GANDHI NAGAR, JAMMU DURING THE PREVIOUS YEAR RELEVANT TO AY 2002- 03 FOR A CONSIDERATION OF RS.35 LACS, RECEIVING RS.2 LACS BY CHEQUE AND THE B ALANCE RS.33 LACS IN CASH, DURING THE PERIOD FROM 01.6.2001 TO 12.12.2001 (REF ER PARA 1 (PG.1) OF THE ASSESSMENT ORDER, PARA 3.1 OF THE APPELLATE ORDER). HE IS, THEREFORE, ENTITLED TO DEDUCTION U/S. 54 IN COMPUTATION OF CAPITAL GAINS A RISING ON THE SAID TRANSFER UPON INVESTMENT OF THE SAID CAPITAL GAIN ON: (A) PURCHASE OF A RESIDENTIAL HOUSE IN INDIA WITHIN A YEAR PRIOR TO THE DATE OF TRANSFER; OR (B) PURCHASE OF A RESIDENTIAL HOUSE IN INDIA WITHIN A PERIOD OF TWO YEARS FROM THE DATE OF THE TRANSFER; OR (C) CONSTRUCTION OF A RESIDENTIAL HOUSE IN INDIA WI THIN A PERIOD OF THREE YEARS FROM THE DATE OF TRANSFER. 7.2 THE ASSESSEE HAS ADMITTED CAPITAL GAIN AT RS.26 .64 LACS (PB PGS. 1 - 3), WHICH IT APPEARS WOULD STAND TO BE ENHANCED BY RS.4 .10 LACS IN-AS-MUCH AS HIS CLAIM TOWARD COST OF IMPROVEMENT (AT RS.1.75 LACS B EFORE INDEXATION) HAS NOT BEEN ACCEPTED, AND WHICH HAS ALSO NOT BEEN APPEALED AGAI NST BEFORE THE TRIBUNAL (ALSO REFER PARA 4.1 OF THE APPELLATE ORDER). THE CLAIM U /S. 54 IS FOR RS.27.10 LACS, BEING THE PURCHASE CONSIDERATION OF A RESIDENTIAL HOUSE A T 16F, SECTOR 14, NANAK NAGAR, JAMMU, AND IN SUPPORT OF WHICH HE RELIES ON THE ATS DATED 25.12.2001 ENTERED INTO BETWEEN HIM AND AD, AND THE FACT THAT THE SAI D HOUSE STANDS TRANSFERRED IN HIS NAME BY THE JDA, ALBEIT SUBSEQUENTLY. AN EXAMINATIO N OF THE ASSESSEES CLAIM DURING ASSESSMENT PROCEEDINGS, HOWEVER, REVEALS THE FOLLOWING: ITA NO. 177/ASR/2013 (AY 2002-03) LT. OM PARKASH GUPTA V. ITO 14 (A) THE ASSESSEES ORIGINAL RETURN FILED ON 27.3.20 03 DOES NOT BEAR REFERENCE TO ANY INCOME BY WAY OF CAPITAL GAINS (ON SALE OF HOUSE PR OPERTY) OR CLAIM OF DEDUCTION U/S. 54; (B) APPLICATION DATED 06.8.2003 BY THE ASSESSEE TO THE JDA FOR CORRECTION OF THE RECORD IN-AS-MUCH AS HE WAS THE OWNER OF THE SAID H OUSE PROPERTY (AT PLOT NO. 358, SECTOR 14, NANAK NAGAR, JAMMU), HAVING CONSTRUCTED A HOUSE THEREAT, SUBSTITUTING HIS NAME INSTEAD OF THAT OF SH. RATTAN LAL, WHOSE N AME HAD WRONGLY BEEN ENTERED IN ITS RECORDS AS ITS OCCUPANT; (C) STATEMENT ON OATH U/S. 131 BY THE ASSESSEE ON 2 7.03.2005 , STATING THAT HE HAD NOT PURCHASED OR SOLD ANY HOUSE PROPERTY AT ANY TIM E IN THE PAST, I.E., EXCEPT THE GANDHI NAGAR, JAMMU PROPERTY; (D) AFFIDAVIT DATED 04.9.2003 BY THE ASSESSEE (COPY OF WHICH HAS BEEN MARKED BY THE AO AS ANNEXURE A TO THE ASSESSMENT ORDER, THO UGH HAS NOT BEEN ENCLOSED ALONG WITH THE APPEAL) TO THE JDA, AVERRING THAT HE WAS IN POSSESSION OF PLOT NO. 358 (HOUSE NO. 16) (MEASURING 9 MARLAS), SECTOR 14, NANAK NAGAR, JAMMU, AND HAD CONSTRUCTED A HOUSE THEREAT, WHERE HE WAS RESID ING WITH HIS FAMILY FOR THE PAST TWO YEARS ; (E) AFFIDAVIT DATED 13.11.2003 BY SH. RATTAN LAL S/ O SH. SANT RAM (COPY OF WHICH HAS BEEN MARKED BY THE AO AS ANNEXURE B TO THE AS SESSMENT ORDER, THOUGH HAS NOT BEEN ENCLOSED ALONG WITH THE APPEAL), AS WELL A S THE DECLARATION ON OATH BEFORE MUNSIFF, JUDICIAL MAGISTRATE (JM), FIRST CLASS, JAM MU, AGAIN ON 13.11.2003, BY HIM TO THE EFFECT THAT OPG (ASSESSEE) WAS THE SOLE OCCU PANT OF THE SAID PLOT AT NANAK NAGAR (MEASURING 9 MARLAS) AND HAD CONSTRUCTED A HO USE THEREAT, WHEREIN HE WAS PUTTING UP AS A TENANT OF OPG S/O SH. JAGIRI MAL GU PTA, IN WHOSE FAVOUR, THEREFORE, THE PLOT MAY BE REGULARIZED, PASSING A CORRECTION E NTRY (IN THE RECORDS OF THE JDA), TO WHICH HE HAD NO OBJECTION; (F) STATEMENT OF SH. KULWANT SINGH, NAIB TEHSILDAR, JDA (ZONE-B) IN RESPONSE TO SUMMONS U/S. 131, THAT THE CERTIFICATE ISSUED BY TH E JDA IN RESPECT OF THE CORRECTION OF ITS RECORD ON 02.01.2004, I.E., LISTI NG THE ASSESSEE AS THE OCCUPANT OF THE PROPERTY, WAS IN RESPONSE TO AN APPLICATION FOR REGULARIZATION/CORRECTION OF THE SAID PROPERTY IN HIS NAME; (G) STATEMENT ON OATH U/S. 131 OF THE ACT DATED 13. 12.2006 BY SMT. AMRITI DEVI W/O SH. RATTAN LAL, DEPOSING TO HAVE OCCUPIED THE N ANAK NAGAR PROPERTY AS A ITA NO. 177/ASR/2013 (AY 2002-03) LT. OM PARKASH GUPTA V. ITO 15 TENANT OF OPG (ASSESSEE) AND, FURTHER, HAD NOT SOLD ANY PROPERTY TO HIM AT ANY TIME; IN FACT, HAVING NOT OWNED ANY PROPERTY IN J&K , WHICH SHE WAS NOT ENTITLED TO IN VIEW OF HER BEING NOT A STATE SUBJECT, AND THAT, SHE BEING ILLITERATE, WITH NO KNOWLEDGE OF WRITTEN LANGUAGE, THE ATS DATED 25/12/ 2001 IS A FORGED DOCUMENT; (H) THE STATEMENT DATED 14/12/2009 BY AD, RECORDED IN THE COURSE OF REMAND PROCEEDINGS, REITERATING HER STATEMENT DATED 13/12/ 2006; (I) THE SALE AGREEMENT DATED 25/12/2001 IS NOT REG ISTERED EVEN SUBSEQUENTLY, EVEN AS REQUIRED BY LAW (REGISTRATION ACT, 1908). 7.3 ALL THE ABOVE STATEMENTS ARE CORROBORATIVE AND, IN FACT, NOT DENIED OR REBUTTED AT ANY STAGE WITH ANY MATERIAL/EVIDENCE. T HE FACTS OF THE CASE STAND ELABORATELY DISCUSSED IN THE ASSESSMENT ORDER (PGS. 2-9) AND THE REMAND REPORT DATED 04.02.2008 (PB PGS. 17-21). ALL THIS MAKES IT ABUNDANTLY CLEAR THAT THE ASSESSEE PURCHASED/ACQUIRED THE SUBJECT PLOT (AT SE CTOR 14, NANAK NAGAR, JAMMU) AND CONSTRUCTED A RESIDENTIAL HOUSE THEREAT. RL S/O SH. SANT RAM, AND HIS WIFE AD, LIVED IN THE SAID HOUSE AS TENANTS FOR SEVERAL (5-6 ) YEARS, AND APPARENTLY ENJOYED GOOD RELATIONS WITH THE ASSESSEE (OPG) AND HIS FAMI LY. AS, HOWEVER, THE ASSESSEE WAS NOT PRESENT AT HIS RESIDENCE AT THE TIME OF THE SURVEY BY THE JDA FOR REGULARIZING UNAUTHORIZED COLONIES IN AND AROUND JA MMU, THE NAME OF SH. RATTAN LAL GOT ENTERED IN THE LIST OF THE OCCUPANTS ( QUA THE SUBJECT PROPERTY) BY JDA. AN APPLICATION WAS ACCORDINGLY MOVED BY THE ASSESSEE W ITH JDA FOR CORRECTION OF ITS RECORD. THE AFFIDAVITS BY HIM AND RL, AS WELL AS TH E STATEMENT ON OATH BY THE LATTER BEFORE THE COURT OF JM, IS ONLY TOWARD THIS, AND AG REES WITH THE BASIS OF THE ASSESSEES APPLICATION TO JDA FOR CORRECTION/REGULA RIZATION OF THE SAID HOUSE PROPERTY IN HIS NAME, I.E., AS AGAINST THE NAME OF RL, INADVERTENTLY ENTERED. IN VIEW THEREOF AS WELL AS NO OBJECTION BY RL, THE PROPERTY WAS TRANSFERRED IN THE RECORDS OF JDA IN THE ASSESSEES NAME, AND A CERTIFICATE DA TED 03.01.2004 ISSUED TO THIS EFFECT. IT MAY THOUGH BE CLARIFIED THAT THE JDA REC ORD DOES NOT IN ANY MANNER PROVE ITA NO. 177/ASR/2013 (AY 2002-03) LT. OM PARKASH GUPTA V. ITO 16 TITLE. RL DIED SUBSEQUENTLY, LEAVING BEHIND HIS WIF E AD, AND, AS IT APPEARS, TWO SONS. IT IS IN FACT THIS THAT BRINGS AD INTO THE PI CTURE. HOWEVER, SURPRISINGLY, SHE IS THE NAMED SELLER ON 25/12/2001, I.E., MUCH BEFORE T HE DEATH OF HER HUSBAND, RL. HOW COULD THAT BE? ACCORDINGLY, SHE WAS CALLED UPON TO DEPOSE BEFORE THE AO IN DECEMBER, 2006. SHE STATED LIKEWISE, I.E., OF BEING A TENANT OF THE ASSESSEE (OPG), FURTHER CONFIRMING THAT SHE BEING NOT A STATE SUBJE CT, COULD NOT PURCHASE ANY LANDED PROPERTY IN THE STATE OF J&K, SO THAT THE QUESTION OF SELLING IT DOES NOT ARISE. THAT, THEREFORE, THE ATS DATED 25.12.2001 IS A FORGED DOC UMENT, WITH IN FACT SHE BEING AN ILLITERATE, PUTTING HER THUMB IMPRESSION, WHO HA D NO KNOWLEDGE OF EITHER HINDI OR ENGLISH ALPHABETS. IT IS CLEAR THAT NEITHER SHE NOR HER HUSBAND OWNED THE SUBJECT PROPERTY AT ANY TIME. NEEDLESS TO ADD, THERE IS NO REGISTRATION OF THE ATS DATED 25/12/2001, NOR THE RETURNING OF CAPITAL GAIN BY AD ON THE SALE OF THE SUBJECT PROPERTY, WITH THE REVENUE MAKING NO ATTEMPT AND RIGHTLY SO, TO ASSESSS THE SAME IN HER HANDS OR HER LATE HUSBAND. THE ASSESSEES PLEA OF HER CROSS-EXAMINATION IS WHO LLY MISPLACED. AS CLARIFIED BY THE AO, BOTH IN THE ASSESSMENT ORDER A ND THE REMAND REPORT, SHE IS THE ASSESSEES WITNESS. THE ONUS WAS ON THE ASSESSEE TO , IN DISCHARGE OF HIS BURDEN OF PROOF, EXHIBIT THAT ATS DATED 25.12.2001 IS A VALID DOCUMENT. WHY, UNTIL THE AO MADE EFFORTS TO CONTACT HER, IT COULD NOT EVEN BE S AID IF RL HAD A WIFE, AND WITH THAT NAME, AS HER NAME APPEARED IN NO OTHER DOCUMEN T. SHE WAS, HOWEVER, DESPITE SEVERAL OPPORTUNITIES EXTENDED DURING THE ASSESSMEN T PROCEEDINGS, NOT PRODUCED BY THE ASSESSEE, NOR EVEN HER ADDRESS FURNISHED, STATI NG THAT HE WAS NOT LIABLE TO KEEP TRACK OF HER, WHICH WAS REGARDED AS UNREASONABLE AN D IRRATIONAL BY THE AO, PARTICULARLY CONSIDERING THAT THE DOCUMENT (ATS DAT ED 25.12.2001) BEING RELIED UPON BY THE ASSESSEE TO CLAIM HIS RIGHT TO THE PROP ERTY, WAS AN UNREGISTERED DOCUMENT, SO THAT THE ASSESSEE WOULD REQUIRE HER PR ESENCE FOR REGISTRATION THEREOF IN FUTURE OR FOR EXECUTING A DOCUMENT OF TITLE, VIZ . SALE DEED. WHY, AS IT TRANSPIRES, ITA NO. 177/ASR/2013 (AY 2002-03) LT. OM PARKASH GUPTA V. ITO 17 RL, HER HUSBAND, EXTENDED FULL COOPERATION TO THE A SSESSEE IN CAUSING THE CORRECTION IN THE RECORDS OF THE JDA, AND WHICH WAS ONLY SUBSEQUENT TO 25/12/2001 ! CLEARLY, THEREFORE, THE TWO FAMILIES WERE IN CONT ACT WITH EACH OTHER, EVEN AS THE ONUS TO PRODUCE HER WAS ON THE ASSESSEE , WHICH HAS NOT BEEN MET AT ANY STAGE. WHY DID, THEN, THE ASSESSEE NOT PRODUCE AD, GIVING LAME EXCUSES INSTEAD ? IN FACT, EVEN THE WITNESSES TO THE ATS WERE NOT PRODUC ED, THOUGH WERE SOUGHT TO BE, AGAIN, CONTACTED BY THE AO. THE PLEA OF HER CROSS-E XAMINATION, ACCEPTING WHICH WOULD REQUIRE THE MATTER BEING RESTORED BACK TO THE FILE OF THE AO FOR ALLOWING CROSS-EXAMINATION TO THE ASSESSEE (REFER ITO V. M. PIRAI CHOODI [2011] 334 ITR 262 (SC)), WOULD ACCORDINGLY BE OF NO CONSEQUENCE. IN FACT, HER LOCUS STANDI IS TO BE PROVED IN-AS-MUCH AS THERE IS NOTHING ON RECORD TO EXHIBIT HER TITLE TO THE SUBJECT PROPERTY AND, THUS, HER CAPACITY TO EXECUTE ANY INS TRUMENT OF TRANSFER. AGAIN, ONLY IF SHE IS THE OWNER OF THE PROPERTY IN DECEMBER, 20 01, COULD SHE VALIDLY EXECUTE THE ATS DATED 25/12/2001. FURTHER, AS PER THE ASSESSEES OWN ADMISSION, IT I S A CASE OF CONSTRUCTION OF A RESIDENTIAL HOUSE AND NOT ITS PURCHASE. WHEN WAS T HE PLOT PURCHASED? FROM WHOM? FOR WHAT CONSIDERATION? NO DOCUMENT TOWARD TH IS HAS BEEN PRODUCED AT ANY STAGE. THERE IS NO MENTION THEREOF, EVEN AS, WI THOUT DOUBT, ACQUISITION OF LAND, WHETHER BY WAY OF PURCHASE OR OTHERWISE, VIZ. ALLOT MENT, WOULD HAVE TO BE REGARDED AS TOWARD CONSTRUCTION OF A HOUSE. FURTHER , WHEN WAS THE HOUSE BUILT; AT WHAT COST? WHETHER IT WAS DURING THE CURRENT YEAR, OR SUBSEQUENT THERETO, OR IN A PRECEDING YEAR? RL STATES IN SEPTEMBER, 2003 OF RES IDING IN THE SAID HOUSE AS A TENANT OF THE ASSESSEE. THE ASSESSEE CLARIFIES IN S EPTEMBER, 2003 OF RESIDING IN A PUCCA HOUSE, CONSTRUCTED BY HIM, FOR THE LAST TWO Y EARS. AD, IN DECEMBER, 2006, STATES OF HAVING RESIDED AS A TENANT FOR 5-6 YEARS PRIOR TO VACATING IT ABOUT 2 YEARS BACK. THE DATE OF PURCHASE (OR ACQUISITION) OF PLOT AND PERIOD OF CONSTRUCTION OF HOUSE THEREAT, IS THUS NOT CLEAR, NOR HAS THE ASSES SEE, AT ANY STAGE, DESPITE BEING ITA NO. 177/ASR/2013 (AY 2002-03) LT. OM PARKASH GUPTA V. ITO 18 CALLED UPON REGULARLY TO DO SO, PRODUCED ANY DOCUME NT TOWARD THE SAME. IF THE ASSESSEE DID INDEED CONSTRUCT A HOUSE THEREAT, AS T HE MATERIAL ON RECORD SUGGESTS, HE, IN RECEIPT OF RS. 33 LACS IN CASH FROM JUNE TO DECEMBER, 2001 (WITH RS. 21 LACS BEING RECEIVED ON 12/12/2001 ITSELF), IMPLYING HIM TO BE THE OWNER OF THE LAND, WHY ONE WONDERS DID NOT STATE SO, PRODUCING THE DOC UMENT OF TITLE TO THE LAND? THE SAME IS UNDERSTANDABLE AS IT IS INCONSISTENT WITH H IS CASE OF HAVING BOUGHT A BUILT HOUSE FROM AD. IF, AS STATED, HE WAS IN SEPTEMBER, 2003 ALREADY RESIDING IN THE HOUSE FOR TWO YEARS, THE HOUSE WOULD HAVE BEEN CONS TRUCTED EARLIER. THE PERIOD INDICATED BY THE STATEMENT DATED 13/12/2006 OF AD A LSO SUGGESTS THE SAME. CLEARLY, THEREFORE, THE ATS DATED 25/12/2001 IS A F ORGED DOCUMENT, AND EVEN OTHERWISE OF NO CONSEQUENCE AS AD WAS NEVER THE OWN ER OF THE SUBJECT PROPERTY, MUCH LESS IN DECEMBER, 2001, I.E., DURING THE LIFE TIME OF RL. RL, HOWEVER, HAVING EXPIRED BY THE TIME THE REASSESSMENT PROCEEDINGS WE RE INITIATED, THE ASSESSEE REPLACED HIM WITH HIS WIFE. IN FACT, AN AGREEMENT W ITH RL HIMSELF WOULD HAVE BEEN OF LITTLE ASSISTANCE IN VIEW OF HIS AFFIDAVIT AND DEPOSITION OF NOVEMBER, 2003, BESIDES ABSENCE OF ANY DOCUMENT EVIDENCING HIS TITL E TO THE SUBJECT PROPERTY. AS REGARDS THE REMAND REPORT DATED 21.12.2009 (PB P G. 48), WHAT, ONE WONDERS, WAS THE NEED FOR CALLING FOR THE SAME. THE RE WAS NO INCONSISTENCY IN THE FACTS ON RECORD, WITH THE ASSESSEES CASE BEING WHO LLY UNPROVED, NAY, DISPROVED, AND WHO HAD, EVEN UNTIL THEN, I.E., DECEMBER, 2009, AND DESPITE THE PROCEEDINGS HAVING COMMENCED IN MARCH, 2006, NOT PRODUCED ANY W ITNESS OR DOCUMENT TO PROVE OR IN SUPPORT OF HIS CLAIM, WITH THAT PRODUCE D, I.E., ATS DATED 25.12.2001, BEING DISPROVED OR, IN THE VERY LEAST, UNPROVED. RA THER, WHAT, ONE WONDERS, EXPLAINS THE VOLTE FACE ATTRIBUTABLE TO AD PER A STATEMENT DATED 21/12/200 9, I.E., DAYS AFTER REITERATING HER VERSION (OF 13/12/2006) ON 14/12/2009. THIS IS INDEED QUIZZICAL, AS IS THE NEED TO, IN THE ABSENCE OF ANY CONTRARY MATERIAL ON RECORD, RECORD HER STATEMENT AGAIN, THE ONUS TO DO SO BEING IN ANY CASE ON THE ASSESSEE. ITA NO. 177/ASR/2013 (AY 2002-03) LT. OM PARKASH GUPTA V. ITO 19 EVEN SO, AS AFORESAID, THERE IS NO DOCUMENT OF TITL E OR ANY MATERIAL ON RECORD EVIDENCING HER TITLE TO THE SUBJECT PROPERTY, FOR T HE STATEMENT ASCRIBED TO HER, NOT ON RECORD, TO BE GIVEN ANY CREDENCE. WHY, SHE ADMITTED LY BEING NOT A STATE SUBJECT, COULD NOT HAVE HELD OR TRANSFERRED ANY IMMOVABLE PR OPERTY IN J&K, I.E., HER LOCUS STANDI , AS AFORE-STATED, IS UNPROVED OR SUSPECT. IN FACT, UPON THIS, THE LD. CIT(A) VIDE HIS LETTER DATED 24/3/2010 (PB PG. 32) REQUIRE D THE AO TO BRING ON RECORD ANY MATERIAL TO EVIDENCE THE OWNERSHIP OF THE SUBJECT P ROPERTY BY AD, AND WHICH WAS REPLIED TO BY THE AO ON 15/4/2010 (PB PG. 46), CLAR IFYING THAT THE PROPERTY WAS IN THE NAME OF RL, ALSO FURNISHING THE LIST OF ILLEGAL OCCUPANTS (PB PG. 47), WHICH BEARS THE NAME OF RL AGAINST PLOT NO. 358 (HOUSE NO .16). IT HAS ALREADY BEEN CLARIFIED THAT NEITHER AD NOR HER HUSBAND, RL, WAS THE OWNER OF THE SUBJECT PROPERTY AT ANY TIME, AS WELL AS THE CIRCUMSTANCES IN WHICH THE NAME OF RL CAME TO BE ENTERED QUA THE SAID PLOT IN THE RECORDS OF JDA. AND, FURTHER, THAT HER OWNERSHIP IN DECEMBER, 2001, WHEN RL WAS ALIVE, ONL Y WOULD VALIDATE THE ATS DATED 25/12/2001, ON THE BASIS OF WHICH THE ASSESSE E MAKES A CLAIM OF TRANSFER. WHY, THE HOUSE WAS ADMITTEDLY CONSTRUCTED, AND NOT PURCHASED, BY THE ASSESSEE, DISPROVING THE SAID ATS, WHICH IS FOR THE PURCHASE OF A BUILT HOUSE PROPERTY. 8. THE ASSESSEES CASE, I.E., ON THE MERITS OF THE DEN IAL OF CLAIM U/S. 54, WHICHEVER WAY ONE MAY LOOK AT IT, IS COMPLETELY UNP ROVED; IN FACT, DISPROVED. THE ASSESSEE HAS ABYSMALLY FAILED TO EXHIBIT THE SATISF ACTION OF THE CONDITIONS FOR CLAIM OF S. 54. NOTHING HAS BEEN BROUGHT ON RECORD TO REB UT THE CLEAR FINDINGS BY THE REVENUE AUTHORITIES WHICH, BEING CONSISTENT WITH TH E MATERIAL ON RECORD, HAVE BEEN ENDORSED. I AM, UNDER THE CIRCUMSTANCES, OF THE CLE AR VIEW THAT NO CASE FOR ALLOWING A DEDUCTION U/S. 54, CLAIMED AT RS.27.10 LACS, IN R ESPECT OF PURCHASE OF A RESIDENTIAL HOUSE IN DECEMBER, 2001 BY THE ASSESSEE, IS MADE OU T. THE ASSESSEE IS APPARENTLY THE OWNER OF THE SUBJECT PROPERTY, HAVING CONSTRUCT ED IT, BUT THAT BY ITSELF WOULD ITA NO. 177/ASR/2013 (AY 2002-03) LT. OM PARKASH GUPTA V. ITO 20 NOT ENTITLE HIM FOR A CLAIM U/S. 54, THE INGREDIENT S OF WHICH REMAIN TO BE SATISFIED, AND THE CASE AS MADE OUT, COMPLETELY UNPROVED, IF N OT DISPROVED. I, THEREFORE, DECLINE INTERFERENCE, AND UPHOLD THE IMPUGNED DISAL LOWANCE. I DECIDE ACCORDINGLY. 9. IN THE RESULT, THE ASSESSEES APPEAL IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON MARCH 20, 201 9 SD/- (SANJAY ARORA) ACCOUNTANT MEMBER DATE: 20.03.2019 /GP/SR. PS. COPY OF THE ORDER FORWARDED TO: (1) THE APPELLANT: LATE OM PARKASH GUPTA, THROU GH LEGAL HEIRS, RAJ MOHINI GUPTA & ORS, H.NO. 16/F, SECTOR-14 , NANAK NAGAR, JAMMU (2) THE RESPONDENT: INCOME TAX OFFICER, WARD-1( 2), JAMMU (3) THE CIT(APPEALS), JAMMU (4) THE CIT CONCERNED (5) THE SR. DR, I.T.A.T. TRUE COPY BY ORDER