VIRENDRA KUMAR JAMES, JAIPUR V. ITO, WARD-4(2), JAIPUR

ITA 254/JPR/2020

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 6490 (ITAT-JAIPUR)
• Duration Of Justice: 5 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-09-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 19-03-2020
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RUNI PAL CIT DHK
• Assessee Lawyers: S S JANGID
• Keywords: Reopening of assessment; Reason to believe; Capital Gains
• Section: 44AD; 143(3); 13; 147; 148

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES B, JAIPUR JH JES'K LH 'KEKZ] YS[KK LNL; ,OA JH LANHI XLKA ] U;KF;D LNL; DS LE{K BEFORE: SHRI RAMESH C SHARMA, AM & SHRI SANDEEP GOSAIN, JM VK;DJ VIHY LA -@ ITA NO. 254/JP/2020 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2011-12 SHRI VIRENDRA KUMAR JAMES, 1, A-B, JAMES VILLA, JAMES COLONY, SECTOR-3, VIDHYADHAR NAGAR, JAIPUR. CUKE VS. I.T.O., WARD 4(2), JAIPUR. LFKK;H YS[KK LA -@THVKBZVKJ LA -@ PAN/GIR NO.: AGAPJ 5397 F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS @ ASSESSEE BY : SHRI S.S. JANGID (ADV) JKTLO DH VKSJ LS @ REVENUE BY : SMT. RUNI PAL (ADDL.CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 02/09/2020 MN?KKS 'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 08/09/2020 VKNS'K@ ORDER PER: R.C. SHARMA, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A)-2, JAIPUR DATED 07/02/2020 FOR THE A.Y. 2011-12 IN THE MATTER OF ORDER PASSED U/S 147 R.W.S. 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT, THE ACT). THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN SUSTAINING ILLEGAL ACTION INITIATED U/S 148 OF IT ACT, 1961 INASMUCH AS THERE WAS NO SIGNIFICANT MATERIAL TO BELIEVE THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. ITA 254/JP/2020_ VIRENDRA KR. JAMES VS ITO 2 2. ERRED IN SUSTAINING ADDITION OF RS. 14,00,000/- WITHOUT ADEQUATE JUSTIFICATION AND IN TOTAL DISREGARD TO THE FACT THAT THIS AMOUNT WAS NOT FORFEITED ON THE DATE OF RECEIPTS. 2. THE HEARING OF THE APPEAL WAS CONCLUDED THROUGH VIDEO CONFERENCE IN VIEW OF THE PREVAILING SITUATION OF COVID-19 PANDEMIC. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. FACTS IN BRIEF ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND CARRYING ON BUSINESS OF SALE OF FRUITS AND VEGETABLES. THE ASSESSEE WAS FOUND TO HAVE ENTERED INTO AGREEMENT FOR SALE WITH RESPECT TO IMMOVABLE PROPERTIES SITUATED AT JAMES COLONY, AMANISHAH NALE KE AAGE, VIDHYADHAR NAGAR, JAIPUR. THE ASSESSEE HAD RECEIVED ADVANCE OF RS. 70.00 LACS. IN THE RETURN OF INCOME FILED BY THE ASSESSEE DURING THE YEAR HAS NOT DISCLOSED THE TRANSFER OF PROPERTIES AND RESULTANT CAPITAL GAIN. THE A.O. ISSUED NOTICE U/S 148 OF THE ACT AFTER GETTING NECESSARY APPROVAL ON 27/03/2018 AND THE NOTICE WAS SERVED UPON THE ASSESSEE. AFTER GETTING DETAILED ENQUIRY, THE A.O. ASSESSED TOTAL INCOME OF ASSESSEE AT RS. 71,59,500/- ON ACCOUNT OF ADVANCE MONEY RECEIVED AND INCOME FROM BUSINESS. BEING AGGRIEVED BY THE ORDER OF THE A.O., THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) AND SHE UPHELD THE ACTION OF THE A.O. WITH REGARD TO REOPENING OF ASSESSMENT AND RESTRICTED THE ADDITION TO THE EXTENT OF RS. 14,00,000/-, AGAINST WHICH THE ASSESSEE IS IN FURTHER APPEAL BEFORE THE ITAT. ITA 254/JP/2020_ VIRENDRA KR. JAMES VS ITO 3 4. IT WAS ARGUED BY THE LD AR OF THE ASSESSEE THAT THERE WAS NO ESCAPEMENT OF ANY INCOME CHARGEABLE TO TAX, INASMUCH AS RETURNED INCOME FROM SALE OF FRUITS AND VEGETABLE DECLARED AT RS. 1,59,500.- COMPUTED IN ACCORDANCE WITH SECTION 44AD WAS NOT VARIED. ACCORDINGLY, IT WAS CONTENDED THAT REOPENING WAS NOT VALID. 5. ON THE OTHER HAND, THE LD DR HAS RELIED ON THE FINDINGS GIVEN BY THE LD. CIT(A) WITH REGARD TO REOPENING OF ASSESSMENT. 6. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND FROM THE RECORD THAT THE A.O. HAS BASED HIS ACTION ON A SURVEY REPORT RELATING TO THE CASE OF SH. RAJENDRA KUMAR GUPTA, A NOTARY PUBLIC JAIPUR DATED 16/09/2016 WHEREIN THE AGREEMENTS TO SALE OF 2 PROPERTIES WERE RECORDED. THERE IS MENTION OF ADVANCE OF RS. 70,00,000/- RECEIVED IN CASH AGAINST ALLEGED SALE OF TWO PROPERTIES WITH CERTAIN CONDITIONS. THE TWO AGREEMENTS WERE SIGNED ON 02/02/2011 AND ADVANCE WERE ALSO RECEIVED ON THE SAME DATE I.E. 02/02/2011. THESE TWO AGREEMENTS TO SALE WERE TAKEN BY THE A.O. AS TRANSFER OF PROPERTY AND HE REOPENED THE ASSESSMENT U/S 147 OF THE ACT. WE FOUND THAT THERE WAS SUFFICIENT REASON TO BELIEVE THAT THERE WAS ESCAPEMENT OF INCOME AND THE A.O. HAS VALIDLY REOPENED THE ASSESSMENT ITA 254/JP/2020_ VIRENDRA KR. JAMES VS ITO 4 AND THE LD. CIT(A) HAS CORRECTLY CONFIRMED THE REOPENING. HENCE, WE UPHOLD THE SAME. GROUND NO. 1 OF THE APPEAL IS DISMISSED. 7. WITH REGARD TO MERIT OF ADDITION, WE FOUND THAT THE ADDITION OF RS. 14,00,000/- IN TOTAL INCOME REPRESENTING ADDITION ON ACCOUNT OF ADVANCE MONEY RECEIVED AS PER TWO AGREEMENTS. IT WAS THE ARGUMENT OF THE LD AR THAT THE A.O. HAS IGNORED THE VITAL FACT THAT THE HONBLE RAJASTHAN HIGH COURT HAS NOT DECIDED THE TITLE AND THEREFORE AMOUNT WAS RETURNED BACK IN SUPPORT OF WHICH EVIDENCES WERE TENDERED BEFORE THE A.O. SINCE THE ADVANCE WAS REFUNDED, NO ADDITION WAS WARRANTED, DURING THE YEAR UNDER CONSIDERATION. HE FURTHER CONTENDED THAT THE CAPITAL GAINS ON THESE PROPERTIES WERE DULY OFFERED FOR TAX IN THE A.Y. 2017-18 WHEN ACTUAL SALE TOOK PLACE AND SALE DEED WAS REGISTERED. 8. WE HAD ALSO PERUSED THE CONTENTS OF STATEMENT OF SHRI MADAL LAL SHARMA (MEDIATOR) APPEARING ON PAGE 5,6,7 AND 8 OF THE ASSESSMENT ORDER AND ANOTHER STATEMENT OF SHRI VIRENDRA KUMAR JAMES (ASSESSEE) ON THE BASIS OF WHICH ADDITION WAS MADE. THE STATEMENT RECORDED ON 27/12/2018 APPEARING ON PAGE 10,11 AND 12 OF THE ASSESSMENT ORDER, THE CONTENTS OF THESE STATEMENTS CLEARLY INDICATE THAT: (A) THESE WERE ONLY AGREEMENT TO SALE. (B) NO PROPERTY WAS SOLD OR TRANSFERRED DURING THE YEAR. ITA 254/JP/2020_ VIRENDRA KR. JAMES VS ITO 5 (C) THE ADVANCE RECEIVED ON EXECUTION OF AGREEMENT TO SALE ON 02/02/2011 DOES NOT CONSTITUTE SOURCE OF INCOME OF THE RECIPIENT ON THE DATE OF RECEIPTS IN ASSESSMENT YEAR 2011- 12. (D) THERE WAS NO SALE OF PROPERTY AND AS SUCH THERE WAS NO CASE OF ANY CAPITAL GAINS. (E) THE ADVANCE RECEIVED WAS RETURNED BACK AND THERE IS AMPLE EVIDENCE TO SUPPORT REFUND OF MONEY. (F) THE ASSESSE HAS SHOWN CAPITAL GAINS IN A.Y. 2017-18 WHEN THE PROPERTY WERE FINALLY SOLD AS MENTIONED ON PAVE 13 OF THE ASSESSMENT ORDER. THUS, IT IS CLEAR THAT DURING THE YEAR UNDER CONSIDERATION, THERE WAS NO ACTUAL SALE OF ASSETS WHICH WERE SOLD IN THE A.Y. 2017-18. CAPITAL GAINS AROSE ON SALE OF PLOTS WERE DULY OFFERED BY THE ASSESSEE IN THE A.Y. 2017- 18 WHEN THE ACTUAL SALE BOOK PLACE. ACCORDINGLY, THERE IS NO JUSTIFICATION IN THE ORDER OF THE LD. CIT(A) FOR UPHOLDING ADDITION OF RS. 14.00 LACS IN THE A.Y. 2011-12. WE DIRECT THE A.O. TO DELETE THE ADDITION OF RS. 14.00 LACS. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED IN PART, IN TERMS INDICATED HEREINABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 08 TH SEPTEMBER, 2020. SD/- SD/- LANHI XLKA JES'K LH 'KEKZ (SANDEEP GOSAIN) (RAMESH C SHARMA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKA D@ DATED:- 08/09/2020 ITA 254/JP/2020_ VIRENDRA KR. JAMES VS ITO 6 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SHRI VIRENDRA KUMAR JAMES, JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- THE I.T.O., WARD 4(2), JAIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 254/JP/2020) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR