Yogesh Bhanwarlal Katta, Vadodara V. The DCIT, Circle-3(1), Vadodara

ITA 218/AHD/2021

AI Insights

The case involves an appeal by Yogesh Bhanwarlal Katta against the order of the CIT(A), which upheld the reopening of his income tax assessment for the assessment year 2010-11 and the subsequent additions made under Section 50C of the Income Tax Act, 1961. The assessee contested that the reopening was invalid as it was initiated by a non-jurisdictional officer and that the property for which the additions were made was not owned by him. The Tribunal found that the reassessment was valid due to the assessee's request for jurisdiction transfer, but the additions under Section 50C were not justifiable as the property was not owned by the assessee.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 299960 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 3 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-01-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: SMC
• Next Hearing Date: 13-12-2022
• Assessment Year: 2010-2011
• Appeal Filed On: 19-09-2021
• Other Referred Cases: GKN Driveshafts (India) Ltd. v. ITO [2002] 259 ITR 19
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SPEED POST. THEREAFTER; DETAIL QUESTIONNAIRE
• Keywords: Sale consideration of property below Jantri Value; Cost of acquisition
• Section: 147; 148; 271(1)(c); 11; 50C; 142(1); 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER I .T .A . No .2 18 /A h d / 20 21 ( A s se ss m e nt Y e a r : 20 10- 11 ) Yo ge sh B h an wa r l al K a tt a 4- B , K ir t i K u n j S oc iet y, N r . Ka s hi be n C h il d r e n H o s p ita l, Ka r el ib au g , Va do da r a - 39 0 0 18 V s . D C I T C ir cl e - 3 ( 1 ) , V a do da r a [P AN N o.A I AP K3 4 23 H] (Appellant) .. (Respondent) Appellant by : Ms. Amrin Pathan, A.R. Respondent by: Shri Alpesh Parmar, Sr. D.R. D a t e of H ea r i ng 14.12.2022 D a t e of P r o no u n ce me nt 18.01.2023 O R D E R The appeal filed by the assessee is against the order passed by the Ld. CIT(Appeals), National Faceless Appeal Centre (in short “NFAC”), Delhi on 26.07.2021 for A.Y. 2010-11. 2. The grounds of appeal raised by the assessee are as under: “1. The learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [“the CIT(A)”] erred in fact and in law in confirming the action of the Deputy Commissioner of Income Tax Circle-3(1), Vadodara [“the AO”] in reopening the assessment by invoking the provisions of Section 147 of the Income Tax Act, 1961 (“the Act”) 2. The learned CIT(A) erred in fact in law upholding the action of the ld. AO in reopening the assessment despite the fact that said reopening was bad in law and liable to be quashed. 3. The learned CIT(A) erred in fact and in law in upholding the validity of assessment order passed u/s. 147 despite the fact that the assessment proceedings were framed without following the procedure laid down by the Hon’ble Supreme Court in the case of GKN Driveshafts (India) Ltd. v. ITO [2002] 259 ITR 19. 4. The learned CIT(A) erred in fact and in law in upholding the action of the ld. AO in reopening assessment u/s 147 without considering the material on record. ITA No. 218/Ahd/2021 Yogesh Bhanwarlal Katta vs. DCIT Asst.Year–2010-11 - 2 - 5. The learned CIT(A) erred in fact and in law in upholding the action of ld. AO without appreciating the facts in proper perspective. Without prejudice to above: 6. The learned CIT(A) erred in fact and in law in confirming the addition of Rs. 14,76,573 despite the fact that no such asset was transferred by the Appellant during the year under consideration. 7. The learned CIT(A) erred in fact and in law in upholding the action of the ld. AO in invoking the provisions of section 50C of the Act and consequently making an addition of Rs. 14,76,573 to the returned income of the Appellant. 8. The ld. CIT(A) as well as the ld. AO erred in fact and in law in not appreciating the fact that provisions of section 50C were not applicable to the present case and could not be invoked. 9. The ld. CIT(A) as well as the ld. AO erred in fact and in law in making addition u/s 50C amounting to Rs. 14,76,573 without appreciating the facts in proper perspective. 10. The ld. CIT(A) as well as the ld. AO erred in fact and in law in making addition u/s 50C on the basis of assumptions, surmises and conjectures. Without prejudice to above: 11. The ld. CIT(A) as well as the ld. AO erred in fact and in law in making addition of the gross consideration instead of the net consideration. 12. The learned CIT(A) as well as the ld. AO erred in fact and in law in making addition without allowing deduction of indexed cost of acquisition and indexed cost of improvement. 13. The learned CIT(A) as well as the ld. AO erred in fact and in law in charging interest u/s 234B of the Act. 14. The learned CIT(A) as well as the ld. AO erred in fact and in law in charging interest u/s 234C of the Act. 15. The learned CIT(A) as well as the ld. AO erred in fact and in law initiating penalty proceedings u/s 271(1)(c) of the Act. 16. Your Appellant craves the right to add or alter, amend, substitute, delete or modify all or any of the above grounds of appeal.” 3. As per the AIR information received from sub-Registrar, the assessee sold a property flat number F-2 in Chitrakut Yojana, Ajmer Road, Jaipur, Rajasthan to Shri Pramod Sharma on 03.11.2010 during the ITA No. 218/Ahd/2021 Yogesh Bhanwarlal Katta vs. DCIT Asst.Year–2010-11 - 3 - year under consideration. Further on verification by the Assessing Officer it was observed that the assessee filed return of income on 15.10.2010 declaring total income of Rs. 6,70,340/- only as income from business or profession. The reasons were recorded for initiating proceedings under Section 147 of the Act for A.Y. 2010-11 and thereafter the approval for re-opening of the case under Section 147 of the Income Tax, 1961 was recorded by Principal CIT-1, Jaipur on 29.03.2017. Subsequently notice under Section 148 of the Income Tax Act, 1961 was issued on 29.03.2017 by ITO, Ward-3(2), Jaipur and duly served upon the assessee by Speed Post. Thereafter, detail questionnaire alongwith notice under Section 142(1) was issued to the assessee on 13.06.2017 and duly served upon the assessee. Thereafter, the case was transferred in the Circle DCIT, Circle-3(1), Vadodara of assessee’s request on 13.11.2017 as the jurisdiction of assessee pertain with Circle- 3(1), Vadodara charged. Due to change of Assessing Officer, detail questionnaire treated as notice under Section 142(1) r.w.s. 129 of the Act was issued to the assessee on 16.11.2017 fixing hearing on 23.11.2017 and duly served upon the assessee. The assessee is an individual and during the year under consideration was engaged in the business of trading in electronics home appliances through its proprietary concerns M/s. Swastik Sales. The Assessing Officer made addition of Rs. 12,371/- as undisclosed Long Term Capital Gain in respect of sale of flat and Rs. 14,76,576/- as undisclosed sale proceeds of the sold flat. 4. Being aggrieved by the assessment order the assessee filed appeal before the CIT(A). The CIT(A) dismiss the appeal of the assessee. ITA No. 218/Ahd/2021 Yogesh Bhanwarlal Katta vs. DCIT Asst.Year–2010-11 - 4 - 5. The Ld. A.R. submitted that the flat has shown sale deed does not belong to the assessee and there was no connection between Smt. Preeti Kabra to Smt. Anju Sharma. The Ld. A.R. further submitted that as regards Ground Nos. 1 to 5 the assessee is challenging the invocation of Section 147 of the Act as the said re-opening was bad in law as the reasons recorded and the approval taken is by non-jurisdictional Assessing Officer. Thus, the assessment order itself is bad in law. 6. The Ld. D.R. submitted that it was the request of assessee for transfer of the jurisdiction and therefore, the concerned Assessing Officer earlier has recorded the reasons and subsequent Assessing Officer has passed the assessment order. 7. Heard both the parties and perused all the relevant material available on record. The contention of the assessee that the concern Assessing Officer recording the reasons is different than the actual Assessing Officer who is having the jurisdiction to the assessment proceedings of the assessee. It appears to be not justifiable as there is a clear observation by the Assessing Officer that there is a transfer of jurisdictions and therefore, the action on part of Revenue is justifiable. Hence, Ground Nos. 1 to 5 are dismissed. 8. Now we are coming to the merits, it is pertinent to note that Smt. Preeti Kabra and Smt. Anju Sharma does not have any relevance to the assessee from the perusal of the records. In fact, after going through the details it can be seen that the assessee has properly recorded its return of ITA No. 218/Ahd/2021 Yogesh Bhanwarlal Katta vs. DCIT Asst.Year–2010-11 - 5 - income and the sale deed at the property nowhere is owned by the assessee at any point of time. This aspect was not taken into account by the Assessing Officer as well as by the CIT(A). Therefore, the additions made by the Assessing Officer are not justifiable and hence the addition does not sustain. 9. In the result, the appeal of the assessee is partly allowed. This Order pronounced in Open Court on 18/01/2023 Sd/- (SUCHITRA KAMBLE) JUDICIAL MEMBER Ahmedabad; Dated 18/01/2023 TANMAY, Sr. PS TRUE COPY आदेश क त ल प अ े षत/Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent. 3. संबं धत आयकर आय ु त / Concerned CIT 4. आयकर आय ु त(अपील) / The CIT(A)- 5. वभागीय त न ध, आयकर अपील!य अ धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड' फाईल / Guard file. आदेशान ु सार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation 16.01.2023 2. Date on which the type draft is placed before the Dictating Member 16.01.2023 3. Other Member..................... 4. Date on which the approved draft comes to the Sr.P.S./P.S .01.2023 5. Date on which the fair order is placed before the Dictating Member for pronouncement .01.2023 6. Date on which the fair order comes back to the Sr.P.S./P.S 18.01.2023 7. Date on which the file goes to the Bench Clerk 18.01.2023 8. Date on which the file goes to the Head Clerk.......................................... 9. The date on which the file goes to the Assistant Registrar for signature on the order.......................... 10. Date of Despatch of the Order..........................................