Rakesh Kumar, Kanpur V. Income Tax Officer-3(3), Kanpur

ITA 226/LKW/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1097 (ITAT-LUCKNOW)
• Duration Of Justice: 10 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 07-04-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: JITENDRA PANDEY
• Keywords: Sale consideration of property below Jantri Value; Principle of natural justice
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B , LUCKNOW BEFORE SHRI. T.S. KAPOOR, ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER ITA NO. 226/LKW/2017 ASSESSMENT YEAR: 2013 - 14 RAKESH KUMAR FLAT NO.304, 180A, VIKASH NAGAR KANPUR V. INCOME TAX OFFICER 3(3) KANPUR T AN /PAN : AMCPK2617H (APP ELL ANT) (RESPONDENT) APPELLANT BY: SHRI JITENDRA PANDEY, C.A. RESPONDENT BY: SHRI RAJIV MOHAN, D.R. DATE OF HEARING: 27 02 201 8 DATE OF PRONOUNCEMENT: 28 0 2 201 8 O R D E R PER P AR THA SARATHI CHAUDHURY, J.M : THIS APPEAL PREFERRED BY THE ASSESSEE EMANATES FROM THE ORDER OF THE LD. CIT(A) - 1, KANPUR ON THE FOLLOWING GROUNDS OF APPEAL: - 1. BECAUSE THE LD CIT (A) 1 KANPUR HAS ERRED IN LAW AND FACT BY REJECTING THE ADJOURNMENT APPLICATIO N OF DATE 28/01/17 THROUGH WHICH THE ADJOURNMENT WAS REQUESTED WITH A VIEW TO BRING THE REQUIRED DOCUMENTS/EVIDENCES FOR SUBSTANTIATING THE MATERIAL FACTS OF THE CASE HENCE THE ORDER PASSED BY LD CIT APPEAL IS LACKING WITH NATURAL JUSTICE AND REQUIRED TO B E QUASHED. 2. BECAUSE THE LD CIT (A) 1 KANPUR HAS ERRED IN LAW AND FACT BY IGNORING THE MATERIAL FACTS THAT THE DOCUMENTS/EVIDENCES WHICH WAS ESSENTIAL FOR DECIDING THE CASE WERE IN THE POSSESSION/CONTROL WITH THE OTHER PARTIES I.E WITH BANKS AND FIRM AND HENCE WAS REQUIRED SOME MORE TIME TO BRING THEREFORE THE ITA NO.226/LKW/2017 PAGE 2 OF 5 ORDER OF THE LD CIT APPEAL (A) IS NOT JUSTIFIABLE IN THE LIGHT OF REAL JUSTICE AND IS REQUIRED TO BE QUASHED. 3. BECAUSE THE LD CIT (A) 1 KANPUR HAS ERRED IN LAW AND FACT BY REJECTING THE ADJOURNMEN T APPLICATION AND BY SUPPORTING THE ORDER OF THE AO WHICH WAS ILLEGAL, BAD IN LAW AND ML WITH JURISDICTION CHALLENGE AS THE APPELLANT WAS NOT THE OWNER OF PROPERTY BUT WAS A PARTNER OF THE FIRM, AS THE PROPERTY WAS OWNED BY THE FIRM AND NOT INDIVIDUALLY BY THE APPELLANT HENCE THE ORDER BASED ON WRONG FOOTING SHOULD BE QUASHED. 4. THAT THE APPELLANT CRAVES TO AMEND ANY ONE OR MORE OF THE GROUNDS OF APPEAL AS STATED ABOVE OR ADD ANY NEW GROUND OF APPEAL AS AND WHEN NEED OF DOING SO ARISES. 2 . THE FACTS IN THIS C ASE ARE THAT THE ASSESSEE - COMPANY E - FILED RETURN DECLARING AN INCOME OF RS.2,66,060/ - AND THEREAFTER THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND NOTICE UNDER SECTION 143(2) OF THE ACT WAS ISSUED AND SERVED UPON THE ASSESSEE. NOTICE UNDER SECTION 142 (1) OF THE ACT ALONG WITH QUESTIONNAIRE WAS ALSO ISSUED AND SERVED UP ON THE ASSESSEE AND DATE FOR COMPLIANCE WAS FIXED BY THE ASSESSING OFFICER. DURING THE ASSESSMENT PROCEEDINGS, THE LD. A.R. OF THE ASSESSEE APPEARED FROM TIME TO TIME AND THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE ACT BY MAKING VARIOUS ADDITIONS/DISALLOWANCES AS APPEARING IN THE ASSESSMENT ORDER , WITH TOTAL ASSESSED INCOME OF RS.2,44,77,140/ - . 3 . BEING AGGRIEVED WITH THE ORDER OF THE ASSESSING OFFICER, ASSESSEE PREFERRED AN APP EAL BEFORE THE LD. CIT(A) AND THE LD. CIT(A) DECIDED THE APPEAL AGAINST THE ASSESSEE BY OBSERVING AS UNDER: - IN THIS CASE, THE ASSESSEE HAS STATED THAT HE WAS MERELY AN AGGREGATOR OF THE PROPERTY AND NOT OWNER OF THE PROPERTY FOR THIS PURPOSE. HE ENTERED TO A PARTNERSHIP FIRM WITH FIRM M/S GHANA ITA NO.226/LKW/2017 PAGE 3 OF 5 RAM & LAND DEVELOPERS, A TOTAL INVESTMENT OF RS.1 , 38,85,500 / - AND RS.59,75,580/ - WERE MADE IN TWO PROPERTIES AS ABOVE. THE ASSESSE E CLA RIFIED THAT HE HAD ONLY 34% SHARE IN THE PARTNERSHIP DEED AND REST WAS ON BEHAL F OF THE PARTNERS OF THE ABOVE FIRM. THE COUNSEL OF THE ASSESSEE ALONG WITH ASSESSEE AND PARTNER OF M/S GHANA RAM & LAND DEVELOPERS ATTENDED THE PROCEEDINGS. THEY WERE ASKED TO FILE AN AFFIDAVIT BEFORE ME FOR THESE FACTS AND ALSO TO FILE COPIES OF RETURNS OF M/S GHANA RARR & LAND DEVELOPERS, 650C, CIC CAMPUS, JHOKAN BAGH, JHANSL. THIS WAS TO VERIFY IF THESE TRANSACTIONS ARE CONFRONTED IN THE BOOKS OF THE ABOVE FIRM AND ALSO TO EXAMINE SOURCE OF INVESTMENT IN THAT FIRM. FURTHER THE ASSESS E E WAS ASKED TO FILE EVIDENCE FOR HIS 34% SHARE INVESTMENT IN THE ABOVE DEAL. THIS DISCUSSION TOOK PLACE ON 10TH OF JANUARY,. 2017. HOWEVER, TILL 31ST OF JANUARY, 2017 NO AFFIDAVIT OR COPY OF RETURN OR BALANCE SHEET AS DISCUSSED ABOVE HAS BEEN FILED BEFORE ME BUT LAME ADJOURN MENT APPLICATION HAS BEEN FILED THAT THE INFORMATION IS NOT AVAILABLE. IT IS OBVIOUS THAT THE ABOVE INFORMATION IS NOT AVAILABLE WITH THE ASSESSE E IN THE FORM WHICH WILL WITH STAND TEST SCRUTINY OF SOURCE OF INVESTMENT AT M Y LEVEL. THEREFORE, THE ASSESS E E AFTER HAVING MADE A CLAIM BEFORE M E HAS RUN AWAY WHEN ASKED TO PROVE HIS STORY ON THE ALTAR OF TRUTH. IT IS OBVIOUS THAT HE WOULD NOT BE ABLE TO JUSTIFY HIS STORY WHICH MAKES GOOD READING IN FICTION BUT FAILS ON THE TOUCHTONE OF TRUTH.' APPEAL IS DISMISSE D IN THE ABSENCE OF ANY CONTRARY EVIDENCE. 4 . AT THE TIME OF HEARING BEFORE US, THE LD. A.R. OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAD PRAYED FOR ADJOURNMENT BEFORE THE LD. ITA NO.226/LKW/2017 PAGE 4 OF 5 CIT(A) AND TH E ADJOURNMENT APPLICATION WAS REJECTED BY THE LD. CIT(A). THERE W ERE CERTAIN EVIDENCES AND MATERIAL WHICH THE ASSESSEE WANTED TO SUBMIT BEFORE THE LD. CIT(A) IN SUPPORT OF HIS CASE AND THEREFORE T HE ASSESSEE HAD SOUGHT ADJOURNMENT WHICH WAS NOT GRANTED BY THE LD. CIT(A). THE GROUNDS OF APPEAL FILED BEFORE US ALSO BRING S FORTH THE FACT THAT THERE WAS REJECTION OF ADJOURNMENT SOUGHT FOR BY THE ASSESSEE BUT THIS WAS REQUIRED BY THE ASSESSEE TO PREPARE HIS CASE AND TO DEFEND AND ASCERTAIN HIS RIGHTS AND LIABILITIES. THE LD. A.R. OF THE ASSESSEE AT THE OUTSET PRAYED THAT TH E ORDER OF THE LD. CIT(A) MAY BE SET ASIDE AND THE MATTER SHOULD BE RESTORED TO HIS FILE WITH A DIRECTION TO DECIDE THE SAME AFRESH AFTER CONSIDER ING THE R ELEVANT MATERIALS AND EVIDENCES AS WOULD BE PLACED BEFORE HIM BY THE ASSESSEE. 5 . THE LD. D.R. DID NOT HAVE ANY OBJECTION FOR THE CASE BEING RESTORED BACK TO THE FILE OF THE LD. CIT(A). 6 . WE HAVE PERUSED THE CASE RECORDS, ANALYSED THE FACTS & CIRCUMSTANCES AND WE FIND IN THE ORDER OF THE LD. CIT(A) THAT THE LD. A.R. OF THE ASSESSEE WAS ASKED TO FILE AN AFFIDA VIT FOR CERTAIN FACTS AND ALSO TO FILE COPIES OF RETURNS OF M/S KHANA RAM & LAND DEVELOPERS. THIS WAS TO VERIF Y THE TRANSACTIONS IN THE BOOKS OF THE FIRM AND ALSO TO EXAMINE THE SOURCE OF INVESTMENT IN THE FIRM. THE ASSESSEE WAS ASKED TO FILE EVIDENCE FO R 34% SHARE INVESTMENT. THEREAFTER ASSESSEE SOUGHT FOR ADJOURNMENT AND THE ADJOURNMENT APPLICATION OF THE ASSESSEE WAS SUMMARILY REJECTED BY THE LD. CIT(A). IN THIS SCENARIO , THE RIGHTS AND LIABILITIES OF THE ASSESSEE WERE NOT ADJUDICATED UPON BY THE LD. CIT(A) . WE, THEREFORE, IN THE INTEREST OF JUSTICE SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THE MATTER BACK TO HIS FILE WITH A DIRECTION TO ADJUDICATE THE ISSUES AFRESH AFTER CONSIDERING ALL THE RELEVANT MATERIALS ITA NO.226/LKW/2017 PAGE 5 OF 5 AND EVIDENCES PLACED BEFORE HIM BY THE ASSESSEE AND AFTER PROVI DING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. 7 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 28 / 0 2 / 201 8 . SD/ - SD/ - [ T.S. KAPOOR ] [PARTHA SARATHI CHAUDHURY ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 28 TH FEBR UARY , 201 8 JJ: 2702 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR