ITO, JODHPUR V. Shri Manzoor Ahmed, JODHPUR

ITA 249/JODH/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3022 (ITAT-JODHPUR)
• Duration Of Justice: 1 year(s) 11 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 06-03-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 03-06-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SUBHASH CHANDRACIT
• Assessee Lawyers: N R MERTIA
• Keywords: Additional evidence; Fair market value
• Section: 54B; 2(14); 147; 148

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENC H : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO. 204/JODH/2011 (A.Y. 2005-06) SHRI MANZOOR AHMED VS ITO, WARD-3(2) C/O. M/S. MERTIA & COMPANY, C.AS. JODHPUR. 244, KAMLA NEHRU NAGAR, OPP. PRAKATIK CHIKITSA KENDRA, CHOPASNI ROAD, JODHPUR. PAN NO. AASPA5791N ITA NO. 249/JODH/2011 (A.Y. 2005-06) ITO, WARD-3(2), VS SHRI MANZOOR AHMED, JODHPUR. PROP. M/S. JANTA MOTORS, 5 TH CHOPASNI ROAD, JODHPUR. PAN NO. AASPA5791N (APPELLANT ) (RESPONDENT) ASSESSEE BY : SHRI N.R. MERTIA. DEPARTMENT BY : SHRI SUBHASH CHANDRA-CIT (DR) DATE OF HEARING : 06/03/2013. DATE OF PRONOUNCEMENT : 06/05/2013. PER HARI OM MARATHA, J.M.: THE ABOVE CROSS APPEALS, PERTAINING TO A.Y. 2005-0 6, ARE DIRECTED AGAINST THE ORDER OF LD. CIT(A), JODHPUR DATED 16/0 3/2011. 2 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE WHO IS TRADING IN AUTOMOBILE PARTS AS PROPRIETOR OF M/S. J ANTA MOTORS, FILED HIS RETURN OF INCOME (ROI) ON 31/10/2005 DECLARING TOTA L INCOME OF RS. 3,43,207/-. SUBSEQUENTLY, IT WAS NOTICED THAT M/S. NINJA CONSTRUCTION PVT. LTD., JODHPUR, (HEREINAFTER REFERRED TO AS NCP L) HAD PURCHASED A PIECE OF LAND FROM THIS ASSESSEE FOR A CONSIDERATIO N OF RS. 2.85 CRORES DURING F.Y. 2004-0-5 AND THE SALE DEED WAS REGISTER ED ON 13/09/2004. THIS FACT CAME TO THE KNOWLEDGE OF THE AO DURING TH E ASSESSMENT PROCEEDINGS OF NCPL. CONSEQUENTLY, ENQUIRY WAS MADE FROM THE ASSESSEE TO EXAMINE THE CORRECTNESS OF THIS SALE TR ANSACTION. IT WAS FOUND THAT THE ASSESSEE HAD SOLD THIS LAND BUT HAD NOT DISCLOSED CAPITAL GAINS IN HIS RETURN FILED ON 30/10/2005 FOR A.Y. 20 05-06, AS THE SALE WAS MADE IN F.Y. 2004-05. IT WAS ALSO NOTICED THAT THE ASSESSEE AHS DEPOSITED THE SALE PROCEEDS IN HIS BANK ACCOUNT. HE EARNED BANK INTEREST APPROXIMATELY OF RS. 4 LAKHS AND THIS WAS ALSO NOT DISCLOSED TO THE DEPARTMENT. BASED ON THE INFORMATION SOUGHT FRO M THE OFFICE OF THE SUB REGISTRAR I, JODHPUR, THE A.O. WORKED OUT CAPITAL GAINS IN THE HANDS OF THE ASSESSEE, AS UNDER :- 3 SALE PROCEED : RS. 2,85,00,000/- FAIR MARKET VALUE (FMV) AS ON 01/04/1981 AT THE RATE OF RS. 1500 X 28.13 = RS. 42,195/- COST INDEX VALUE 42,195 X 480U : RS. 2,02,536/- 100 CAPITAL GAINS = RS. 2,85,00,000/- 2,02,536/- = RS. 2,82,97,464/- CONSEQUENTLY, THE AO ISSUED NOTICE U/S 148 OF THE A CT ON 27/12/2007 FOR THE A.Y. 2005-06 AFTER INITIATING PROCEEDINGS U /S 147 OF THE ACT AS PER LAW. THE ASSESSEE RESPONDED THROUGH LETTER DATE D 24/01/2008 STATING THEREIN THAT THE RETURN OF INCOME (ROI) ALR EADY FILED ON 31/10/2005 FOR A.Y. 2005-06 MAY BE TREATED AS ROI F ILED IN COMPLIANCE OF THIS NOTICE. IN THE MEANWHILE, AFTER FOLLOWING D UE PROCEDURE OF GETTING APPROVAL ORDERS FOR ATTACHMENT OF THE BANK ACCOUNTS OF THE ASSESSEE WERE PASSED U/S 281B AND ISSUED ON 07/02/2 008, ATTACHING THE BANK ACCOUNTS PROVISIONALLY. BEING AGGRIEVED, T HE ASSESSEE FILED A S.B. CIVIL WRIT PETITION IN THE HIGH COURT OF JUDIC ATURE AT JODHPUR, WHO DISMISSED THE WRIT PETITION VIDE ORDER DATED 22/08/ 2008. THE ASSESSEE FILED PETITION BEFORE D.B., A CIVIL SPECIAL APPEAL WHO PASSED THE FOLLOWING ORDER ON 05/03/2008. 4 WITHOUT GOING INTO THE HYPER TECHNICALITIES AND NI CETIES OF THE MATTER, IN THE TOTALITY OF CIRCUMSTANCES, WE TH INK IT APPROPRIATE TO DISPOSE THE PRESENT APPEAL WITH THE DIRECTION TO THE DEPARTMENT TO COMPLETE THE ASSESSM ENT PROCEEDINGS CONSEQUENT UPON NOTICE U/S 148 WITHIN A PERIOD OF TWO MONTHS EXCLUDING THE TIME, THAT MAY B E TAKEN BY THE ASSESSEE AND TILL THEN THE ATTACHMENT OF THE SAVING BANK ACCOUNT OF THE APPELLANT SHALL CONTINUE IT IS FURTHER CLARIFIED THAT IF THE ASSESSMENT PROCEEDING S ARE NOT COMPLETED WITHIN THE AFORESAID TIME, THE ATTACHMENT WILL AUTOMATICALLY COME TO AN END, WITHOUT REFERENCE TO THE COURT. IT IS ALSO EXPECTED THAT THE DEPARTMENT WIL L CONCLUDE THE ASSESSMENT PROCEEDINGS IN AN OBJECTIVE AND DISPASSIONATE MANNER. ACCORDINGLY, THE CASE WAS TO BE FINALIZED ON OR BEF ORE 04/05/2008, AFTER EXCLUDING THE TIME TAKEN BY THE ASSESSEE. THE ASSESSEE RAISED OBJECTIONS AGAINST INITIATION OF ACTION U/S 147 R.W .S. 148 OF THE ACT. ON MERITS ALSO IT WAS PLEADED THAT THE ASSESSEE HAS, I N FACT, SOLD HIS AGRICULTURAL LAND SITUATED IN VILLAGE PAL WHICH DOE S NOT FALL WITHIN THE MUNICIPAL LIMIT OF JODHPUR AS PER SECTION 2(14)(III )(A) OF THE ACT. IT WAS STATED, THE ASSESSEE AHS ALREADY DISCLOSED THE FACT OF SALE OF HIS LAND IN THE ROI FILED ON 31/10/2008 BUT SINCE ON THE SALE O F AGRICULTURAL LAND 5 NO CAPITAL GAIN IS CHARGEABLE, IT WAS NOT DISCLOSED . IN THIS REGARD THE ASSESSEE HAD APPENDED A NOTE, WHICH READS AS UNDER :- THE ASSESSEE HAS SOLD 28.65 BIGA AGRICULTURAL LAND SITUATED AT VILLAGE PAL FOR RS. 2,85,00,000/- IS NEITHER CAPITA L ASSET U/S 2(14) NOR TRANSFER U/S 47(VIII). ALTERNATIVELY, IF SAID AGRICULTURAL LAND NOT ACCEPT ED AS EXEMPT, THEN THE NET CAPITAL GAIN COMES TO NIL AFTER CLAIMI NG FAIR MARKET VALUE AND INDEXATION[SEC. INDEXATION] THEREON OF TH E SAID LAND, TUBEWELL, KACHHI WALL ETC AS ON 1.4.1981 AND EXEMPT ION U/S 54B ON ACCOUNT OF PURCHASE OF AGRICULTURAL LAND FOR RS. 77,23,856/- IN THE NAME OF RABIYA [WIFE]. AFTER MAKING DETAILED ENQUIRY AND DISCUSSION THE AO HAS FOUND THAT THE LAND SOLD FALLS WITHIN THE DEFINITION OF ASSET AS G IVEN UNDER SECTION 2(14) OF THE ACT AND, THEREFORE, ITS SALE PROCEEDS ARE CHARGEABLE TO CAPITAL GAINS TAX. 3. THE ASSESSEE HAS MADE CLAIM OF EXEMPTION U/S 54B OF THE ACT IN RESPECT OF REINVESTMENT IN THE PURCHASE OF LAND IN THE NAME OF HIS WIFE, AND IT IS ALSO NOT FOUND TO BE IN ORDER. FINA LLY, THE A.O. HAS COMPUTED THE LONG TERM CAPITAL GAINS AT RS. 2,82,57 ,464/- AND HAS ADDED THE SAME TO ASSESSEES INCOME OF THIS YEAR. 6 4. THE ASSESSEE TOOK THIS MATTER IN APPEAL AND LD. CIT(A) HAS GIVEN PART RELIEF TO THE ASSESSEE. NOW, BOTH PARTIES ARE AGGRIEVED. 6. WE HAVE HEARD RIVAL SUBMISSION AND HAVE CAREFULL Y PERUSED THE ENTIRE RECORD. THE LD. A.R. SHRI N.R. MERTIA, DID N OT PRESS GROUND NOS. 1, 2, 7 AND 8, THEREFORE, THESE GROUNDS STAND DISMI SSED AS NOT PRESSED. GROUND NOS. 9 AND 10 ARE FORMAL IN NATURE AND DO NO T REQUIRE SPECIFIC ADJUDICATION. 7. GROUND NO. 3, 4, 5 AND 6, ARE IN RELATION TO C APITAL GAIN. SINCE, THE LD. CIT(A) HAS ALLOWED EXEMPTION U/S 54B OF THE ACT, IT HAS BEEN CHALLENGED BY THE REVENUE. THUS, IN A WAY THE GROUNDS OF BOTH APPEALS ARE ENTWINED. AT THE TIME OF THE HEARING, T HE LD. A.R. SOUGHT PERMISSION TO RAISE AN ADDITIONAL GROUND, AS GROUND NO. (7) WHICH READS AS UNDER :- THAT IN THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LD. CIT(A) HAS ERRED ON FACTS IN ALLOWING THE DEDUCTION U/S 54B OF THE ACT, ONLY RS. 76,23,856/- DUE TO TYPOGRAPHICAL ERROR OF RS. 1 LAKH AND FURTHER ERRED IN TAKING THE ALLOWABLE FIG URE ONLY TO THE EXTENT OF ORIGINALLY CLAIMED BY THE APPELLANT IN PL ACE OF THE CORRECT FIGURE OF RS. 82,91,936/- CLAIMED AND BROUG HT ON RECORD BY THE APPELLANT DURING THE COURSE OF ASSESSMENT PR OCEEDINGS BY LETTER DATED 16.6.2008. 7 8. AT THE TIME OF THE HEARING LD. A.R. ALSO PUT A R EQUEST UNDER RULE 29 OF THE I.T, RULES, SEEKING PERMISSION TO ALLOW T O PLACE ON RECORD SOME ADDITIONAL EVIDENCE. 9. THE LD. D.R. DID NOT OBJECT TO THEIR ADMISSION A ND WE HAVE ALSO FOUND THAT IN THE INTEREST OF JUSTICE THESE ADDITIO NAL EVIDENCE WHICH THE ASSESSEE WAS PREVENTED FROM PRODUCING AT THE RE LEVANT TIME DUE TO SUFFICIENT CAUSE, SHOULD BE ADMITTED. THESE ADDITIO NAL EVIDENCE ARE ENCLOSE DIN ARS PAPER BOOK FROM PAGE 210 TO 236. T HESE PIECES OF EVIDENCE ARE ADMITTED, AND TO GIVE OPPORTUNITY TO T HE A.O. WE RESTORE BOTH THE APPEALS TO HIS FILE. HE SHALL EXAMINE AND INVESTIGATE THE IMPUGNED ISSUES AFRESH AFTER CONSIDERING THE ABOVE ADDITIONAL EVIDENCE. THEREFORE, WE SET ASIDE THE ORDER OF THE LD. CIT(A) ON THESE ISSUE AND RESTORE THEM TO A.O. FOR DE NOVO ADJUDICA TION. NEEDLESS TO MENTION THAT THE A.O. SHALL GIVE REASONABLE OPPORTU NITY OF BEING HEARD TO THE ASSESSEE. 8 10. IN THE RESULT, BOTH THE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH MAY, 2013. SD/- SD/- [N.K. SAINI] [HARI OM MARATHA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 6 TH MAY, 2013. VL COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR ASSISTANT REGISTRAR