SMT. POONAM SINGHAL, SANGANER, JAIPUR V. INCOME TAX OFFICER, WARD-3(4), JAIPUR

ITA 301/JPR/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0081 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 8 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 01-03-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Capital asset; Salary income; Additional evidence; Cost of acquisition; Capital Gains
• Section: 69C; 142(1); 143(1); 147; 148; 144

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCH B, JAIPUR JH FOT; IKY JKWO] U;KF;D LNL; ,O A JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA- @ ITA NO. 301/JP/2018 FU/KZKJ.K O'K Z @ ASSESSMENT YEARS : 2009-10. SMT. POONAM SINGHAL 267/23, SECTOR 26 PRATAP NAGAR, SANGANER, JAIPUR. CUKE VS. THE INCOME TAX OFFICER, WARD 3(4), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. BSUPS 6125 B VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : NONE (DATE NOTED) JKTLO DH VKSJ LS@ REVENUE BY : NONE LQUOKBZ DH RKJH[K@ DATE OF HEARING : 26/11/2019. ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 27 /11/2019. VKNS'K@ ORDER PER VIJAY PAL RAO, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 13.12.2017 OF LD. CIT (A)-1, JAIPUR FOR THE ASSESSMENT YEAR 2009- 10. 2. NONE HAS APPEARED ON BEHALF OF THE ASSESSEE AS W ELL AS ON BEHALF OF THE DEPARTMENT WHEN THIS APPEAL WAS CALLED FOR HEARING TODAY I.E. 26.11.2019 AFTER 1.30 PM. IT TRANSPIRED FROM THE RECORD THAT SINCE BEGIN NING THE ASSESSEE HAS BEEN SEEKING ADJOURNMENTS AND ON THE LAST DATE I.E. 20.1 1.2019 THE HEARING WAS ADJOURNED ON THE REQUEST OF THE ASSESSEE AND THE NE XT DATE OF HEARING WAS NOTED DOWN BY THE LD. A/R OF THE ASSESSEE. THUS DESPITE THE REPEATED ADJOURNMENTS AND THE DATE OF HEARING NOTED DOWN BY THE ASSESSEE, THE ASSESSEE DID NOT BOTHER TO 2 ITA NO. 301/JP/2018 SMT. POONAM SINGHAL, JAIPUR. PRESENT HER CASE. ACCORDINGLY, WE PROPOSED TO HEAR AND DECIDE THIS MATTER EX PARTE. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE T HE LD. CIT(A) HAS GROSSLY ERRED IN CONFIRMING THE ACTION OF ID. AO IN REOPENI NG THE ASSESSMENT U/S 147 OF THE INCOME TAX ACT, 1961 ARBITRARILY AND WITHOUT AP PLICATION OF MIND. APPELLANT PRAYS ASSESSMENT ORDER PASSED BY ID. AO IS BAD IN L AW AND DESERVES TO BE QUASHED. 1.1 THAT, LD.CIT(A) HAS FURTHER ERRED IN CONFIRMING THE VALIDITY OF RE ASSESSMENT PROCEEDINGS BY NOT CONSIDERING THE SUBMI SSION OF ASSESSEE THAT RE ASSESSMENT PROCEEDINGS WERE COMPLETE WITHOU T PROPER SERVICE OF NOTICE U/S 148 OF THE ACT, THEREFORE ASSESSMENT ORD ER SO PASSED IS VOID AB INITIO AND DESERVES TO BE HELD BAD IN LAW AND CONSE QUENT ADDITIONS MADE DESERVES TO BE DELETED. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, LD.CIT(A) ERRED IN CONFIRMING RETURN OF INCOME FILED BY ASSES SEE AS INVALID ON THE PREMISE THAT RETURN WAS FILED IN ITR -1 , WHICH DID NOT SHOW ANY TRANSACTION OF SALE OF CAPITAL ASSET. THE ID. CIT(A) FURTHER ER RED IN IGNORING THE SUBMISSION OF THE ASSESSEE THAT THE SAID PROPERTY W AS NOT SOLD BY THE ASSESSEE, WHO WAS MERELY A POA HOLDER ON BEHALF OF THE ORIGINAL HOLDER. ASSESSEE PRAYS THAT RETURN OF INCOME DECLARED BY AS SESSEE DESERVES TO BE ACCEPTED. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, ID. CIT(A) ERRED IN CONFIRMING THE TAXATION OF CAPITAL GAIN IN THE HANDS OF ASSESSEE BY ALLEGING THAT APPELLANT WAS HAVING POSSESSION OF TH E SAID PROPERTY. APPELLANT PRAYS THAT ASSESSEE WAS NOT LEGAL OWNER O F THE PROPERTY, THUS COULD NOT AFFECT 'TRANSFER' OF PROPERTY IN HIS INDI VIDUAL CAPACITY , THEREFORE ADDITION MADE IN THE HANDS OF ASSESSEE DESERVES TO BE DELETED. 4. WITHOUT PREJUDICE TO GROUNDS OF APPEAL NO. 1 TO 3: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, LD.CIT(A) ERRED IN NOT ALLOWING THE COST OF ACQUISITION/CONSTRUCTIO N OF HOUSE PROPERTY TO THE TUNE OF RS.6,25,151/- OUT OF TOTAL COST CLAIMED BY ASSESSEE BY NOT CONSIDERING THE DETAILS FURNISHED AND EVIDENCES ADDUCED. APPELL ANT PRAYS COST OF ACQUISITION/ CONSTRUCTION OF PROPERTY AS CLAIMED BY ASSESSEE DESERVES TO ALLOWED. 5. THAT THE APPELLANT CRAVES THE RIGHT TO ADD, DELE TE, AMEND OR ABANDON THE GROUND OF THIS APPEAL AT THE TIME OR BEFORE THE ACT UAL HEARING OF THE CASE. 3 ITA NO. 301/JP/2018 SMT. POONAM SINGHAL, JAIPUR. GROUND NO. 1 IS REGARDING VALIDITY OF REOPENING OF THE ASSESSMENT UNDER SECTION 147 OF THE IT ACT. 3. THE ASSESSEE FILED HER RETURN OF INCOME ON 16.03 .2010 SHOWING INCOME FROM SALARY AND INCOME FROM OTHER SOURCES. THE RETURN O F INCOME WAS PROCESSED UNDER SECTION 143(1) ON 16.08.2011. SUBSEQUENTLY THE AO REOPENED THE ASSESSMENT BY ISSUING NOTICE UNDER SECTION 148 ON 28.03.2016 TO A SSESS THE INCOME ON ACCOUNT OF CAPITAL GAIN ARISING FROM SALE OF PROPERTY BY THE A SSESSEE. THE AO ALSO NOTED THAT THE ASSESSEE HAS NOT SHOWN THE TRANSACTION OF SALE OF PROPERTY OR CAPITAL GAIN IN THE RETURN OF INCOME FILED BY THE ASSESSEE IN ITR-1 AND , THEREFORE, THE AO FORMED THE BELIEF THAT THE INCOME ASSESSABLE TO TAX HAS ESCAPE D ASSESSMENT. THE REASSESSMENT WAS COMPLETED UNDER SECTION 147 READ WITH SECTION 1 44 OF THE IT ACT AS THE ASSESSEE HAS NOT RESPONDED TO THE NOTICE ISSUED BY THE AO AND, THEREFORE, THERE WAS NO COMPLIANCE TO THE NOTICES ISSUED UNDER SECTI ON 148 AS WELL AS UNDER SECTION 142(1) OF THE ACT. CONSEQUENTLY, THE ASSESSMENT WAS FRAMED EX PARTE WHEREBY THE AO HAS MADE THE ADDITION OF UNDISCLOSED SHORT TERM CAPITAL GAIN OF RS. 30,00,000/-. THE ASSESSEE CHALLENGED THE ACTION OF THE AO BEFORE THE LD. CIT (A) AND ALSO OBJECTED THE VALIDITY OF REOPENING. THE LD. CIT (A ) CALLED FOR A REMAND REPORT AND AFTER CONSIDERING THE REMAND REPORT, THE ACTION OF THE AO INITIATING THE PROCEEDINGS UNDER SECTION 147/148 WAS UPHELD. 4. WE HAVE CONSIDERED THE SUBMISSIONS OF THE ASSESS EE AS RAISED BEFORE THE LD. CIT (A) WHEREIN THE ASSESSEE HAS CONTENDED THAT THE AO HAS NOT CONSIDERED THE EXPLANATION OF THE ASSESSEE FOR NOT RESPONDING TO T HE VARIOUS NOTICES DUE TO THE REASON THAT THE MOTHER-IN-LAW OF THE ASSESSEE WAS A DMITTED IN THE HOSPITAL AND UNDERGOING SURGERY. APART FROM THESE SUBMISSIONS, THE ASSESSEE HAS NOT POINTED 4 ITA NO. 301/JP/2018 SMT. POONAM SINGHAL, JAIPUR. OUT ANY OTHER INFIRMITY OR ILLEGALITY IN THE INITIA TION OF PROCEEDINGS BY THE AO UNDER SECTION 147/148 OF THE ACT. THE LD. CIT (A) HAS CO NSIDERED THIS ISSUE IN PARA 3.1.2(II) AS UNDER :- (II) IN ITS REJOINDER TO THE REMAND REPORT OF THE AO, THE APPELLANT, COULD NOT CONTROVERT THE FINDINGS OF THE AO THAT TH E NOTICE ISSUED UNDER SECTION 148 OF THE ACT WAS SERVED UPON THE AP PELLANT THROUGH REGISTERED POST AT THE ADDRESS AVAILABLE IN ITS PAN DETAILS. THE APPELLANT FILED ITS RETURN OF INCOME FOR THE YEAR U NDER CONSIDERATION ON 16.03/2010, IN FORM NUMBER ITR-1, WHICH WAS NOT A V ALID FORM FOR FURNISHING RETURN OF INCOME, BY THE APPELLANT AS IT WAS LIABLE FOR CAPITAL GAINS TAX ON SALE OF THE PROPERTY AND THE SAID FIND ING COULD NOT BE CONTROVERTED BY THE APPELLANT. THEREFORE, THERE WAS NO INFIRMITY IN THE ASSUMPTION OF JURISDICTION BY THE AO U/S 147 OF THE ACT. THUS THE OBJECTION OF THE ASSESSEE REGARDING THE SE RVICE OF NOTICE ISSUED UNDER SECTION 148 WAS DULY CONSIDERED BY THE LD. CIT (A) AND FOUND THAT THE NOTICE WAS SERVED UPON THE ASSESSEE THROUGH REGISTERED POST AT THE ADDRESS AVAILABLE IN PAN DETAILS. ACCORDINGLY, WHEN THE ASSESSEE HAS NOT DI SCLOSED THIS TRANSACTION AND CONSEQUENTIAL CAPITAL GAIN, IF ANY, IN THE RETURN O F INCOME FILED BY THE ASSESSEE THEN THE SUBSEQUENT INITIATION OF PROCEEDINGS BY THE AO ON THE BASIS OF THE INFORMATION OF SALE OF PROPERTY BY THE ASSESSEE IS VALID. HENCE WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE IMPUGNED ORDER OF THE LD. CIT (A) QUA THIS I SSUE. GROUND NO. 2 & 3 ARE REGARDING THE ASSESSMENT OF CA PITAL GAIN IN THE HANDS OF THE ASSESSEE BEING A POWER OF ATTORNEY HOL DER. 5. WE HAVE CONSIDERED THE CONTENTION OF THE ASSESSE E RAISED BEFORE THE LD. CIT (A) AND NOTED THAT THOUGH THE ASSESSEE HAS RAISED T HIS ISSUE BEFORE THE LD. CIT (A) 5 ITA NO. 301/JP/2018 SMT. POONAM SINGHAL, JAIPUR. AND ALSO FILED THE ADDITIONAL EVIDENCES, BUT THE LD . CIT (A) REJECTED THE CLAIM OF THE ASSESSEE BY GIVING THE FINDING IN PARA 3.1.2(III) A S UNDER :- (III) ON MERIT, IT IS NOTED THAT THE PROPERTY SOL D BY THE APPELLANT DURING THE YEAR UNDER CONSIDERATION WAS ACQUIRED BY THE APPELLANT AS A POWER OF ATTORNEY HOLDER AND WAS ALSO SOLD IN THAT CAPACITY ONLY. IT WAS CLAIMED BY THE APPELLANT THAT THE TOTAL COST OF ACQUISITION OF THE PROPERTY WAS RS. 30,71,225/- WHICH WAS SOLD FOR A C ONSIDERATION OF RS. 16,33,387/- AND VALUED BY THE SUB REGISTRAR AT RS. 30 LAKH FOR THE PURPOSES OF CHARGING STAMP DUTY. IN ITS REMAND REP ORT, IT WAS OBSERVED BY THE AO THAT AGAINST THE COST OF ACQUISI TION OF RS. 30,31,916/- CLAIMED BY THE APPELLANT, THE APPELLANT COULD FILE EVIDENCE TO THE EXTENT OF RS. 22,84,965/- ONLY AND THUS, HAS INCREASED THE COST BY RS. 7,46,951/- INCLUDING THE COST OF CONSTRUCTIO N OF THE PROPERTY AT RS. 4,10,680/-. VIDE ORDER SHEET ENTRY DATED 30.11. 2017, THE APPELLANT WAS REQUIRED TO RECONCILE THE ABOVE DIFFERENCE WITH DOCUMENTARY EVIDENCES. IT IS NOTED FROM THE DETAILS FURNISHED B Y THE APPELLANT THAT A TOTAL SUM OF RS. 23,00,400/- WAS PAID TO THE RAJAST HAN HOUSING BOARD AND A CREDIT OF RS. 71,074/- WAS ALLOWED BY IT AGAI NST INTEREST ON THE PAYMENTS MADE BY THE APPELLANT. THE ASSESSEE HERSELF HAS CLAIMED THE COST OF ACQUIS ITION OF THE PROPERTY AT RS. 30,71,225/-, THEREFORE, THE CLAIM OF POWER OF ATTOR NEY HOLDER IS CONTRADICTORY TO THE CLAIM OF COST OF ACQUISITION. ACCORDINGLY, IN VIEW OF THE FACTS AS RECORDED BY THE LD. CIT (A), WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE IMPUGNED ORDER OF THE LD. CIT (A) QUA THIS ISSUE. GROUND NOS. 2 & 3 ARE DISMISSED . 6 ITA NO. 301/JP/2018 SMT. POONAM SINGHAL, JAIPUR. GROUND NO. 4 IS REGARDING AN ALTERNATIVE PLEA OF TH E ASSESSEE REGARDING DISALLOWANCE OF COST OF ACQUISITION/COST OF CONSTRUCTION OF THE PROPERTY TO THE TUNE OF RS. 6,25,151/-. 6. ON CAREFUL PERUSAL OF THE ORDER OF THE LD. CIT ( A), WE FIND THAT THE LD. CIT (A) HAS CONSIDERED THIS ISSUE IN PARA 3.1.2 (IV) & (V) AS UNDER :- (IV) THE APPELLANT HAS CLAIMED THAT IT HAS INCURR ED CASH EXPENSES OF RS. 6,60,442/- WHICH INCLUDES PAYMENTS TO RAJASTHAN HOUSING BOARD AND CONSTRUCTION OF HOUSE PROPERTY UNDER CONSIDERAT ION. REGARDING THE SOURCE OF SUCH CASH EXPENDITURE, IT WAS STATED THAT IT HAS RECEIVED A SUM OF RS. 1,25,151/- ON 31.03.2008 ON SALE OF PR OPERTY IN THAT YEAR AND RS. 5 LAC ON ACCOUNT OF THE SALE OF THE HOUSE P ROPERTY SOLD DURING THE YEAR UNDER CONSIDERATION AS STATED IN THE REGIS TERED SALE DEED DATED 30.03.2009. HOWEVER, IT IS NOTED THAT IN THE BANK ACCOUNT OF THE APPELLANT, A SUM OF RS. 4,50,000/- WAS DEPOSITED IN CASH ON 23.02.2009 AND THE SAID DEPOSIT WAS USED FOR MAKING PAYMENT OF RS. 20,50,000/- TO THE RAJASTHAN HOUSING BOARD ONLY. FU RTHER, IT WAS ALSO NOTED THAT SMALL AMOUNTS IN CASH WERE ALSO DEPOSITE D IN THE SAID BANK ACCOUNT DURING THE YEAR UNDER CONSIDERATION AND, TH EREFORE, THE CONTENTION THAT SUM OF RS. 1,25,151/- WAS AVAILABLE WITH IT OUT OF THE SALE PROCEEDS OF PROPERTY ON 31.03.2008 HAS NO WEIG HT AND DESERVES TO BE REJECTED. THEREFORE, IN VIEW OF THE ABOVE DIS CUSSION, IT IS HELD THAT THE APPELLANT COULD NOT EXPLAIN THE SOURCE OF EXPENDITURE OF RS. 6,25,151/- CLAIMED TO BE INCURRED IN THE ACQUISITIO N/CONSTRUCTION OF THE HOUSE PROPERTY UNDER CONSIDERATION. IN VIEW OF THE ABOVE DISCUSSION, THE AO IS HEREBY DIRECTED TO COMPUTE THE SHORT TERM CAPITAL GAIN ON SALE OF THE PROPERTY UNDER CONSIDERATION ACCORDINGL Y. (V) FURTHER, IT WAS ALSO NOTED THAT THOUGH THE APPE LLANT WAS HAVING ONLY A POWER OF ATTORNEY, IN RESPECT OF HOUSE PROPE RTY UNDER 7 ITA NO. 301/JP/2018 SMT. POONAM SINGHAL, JAIPUR. CONSIDERATION BUT IT IS EVIDENT FROM THE DETAILS SU BMITTED BY THE APPELLANT THAT IT WAS HAVING THE POSSESSION OF THE SAID PROPERTY AND ENJOYING THE SAME AS AN OWNER ONLY. IT COULD NOT PL ACE ON RECORD ANY EVIDENCE, WHICH MAY ESTABLISH THAT IT HAS MADE THE PAYMENTS RECEIVED ON SALE OF THE HOUSE PROPERTY UNDER CONSIDERATION T O SHRI MAHENDRA KUMAR DOSHI, ON WHOSE BEHALF, IT CLAIMED TO BE ACTI NG AS A POWER OF ATTORNEY. THUS, IT IS HELD THAT THE AO WAS JUSTIFIE D IN ASSESSING THE SHORT TERM CAPITAL GAINS ON SALE OF THE IMPUGNED PR OPERTY UNDER CONSIDERATION IN THE HANDS OF THE APPELLANT ITSELF. THUS THE CLAIM OF THE ASSESSEE WAS DENIED BY THE LD . CIT (A) FOR WANT OF SOURCE OF EXPENDITURE. IT IS PERTINENT TO NOTE THAT THE SOUR CE OF EXPENDITURE CAN BE A SEPARATE ISSUE AND CANNOT BE A GROUND FOR REJECTING THE CLAI M OF EXPENDITURE WHILE COMPUTING THE CAPITAL GAIN. ACCORDINGLY, THE EXPENDITURE TO T HE TUNE OF RS. 6,25,151/- IS ACTUALLY INCURRED BY THE ASSESSEE AND THE SAME IS A LLOWABLE WHILE COMPUTING THE CAPITAL GAIN IRRESPECTIVE OF THE FACT THAT THE ASSE SSEE COULD NOT EXPLAIN THE SOURCE OF EXPENDITURE. THE ISSUE OF SOURCE OF EXPENDITURE CAN BE CONSIDERED FOR MAKING THE SEPARATE ADDITION UNDER SECTION 69C OF THE IT ACT. HENCE IN VIEW OF THE ABOVE FACTS, THE ALTERNATIVE PLEA OF THE ASSESSEE IN GROUND NO. 4 IS ALLOWED. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 27/11/2019 . SD/- SD/- FOE FLAG ;KNO FOT; IKY JKWO (VIKRAM SINGH YADAV) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 27/11/2019. DAS/ 8 ITA NO. 301/JP/2018 SMT. POONAM SINGHAL, JAIPUR. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT-SMT. POONAM SINGHAL, JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT-THE INCOME TAX OFFICER, WARD 3(4), J AIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 301/JP/2018} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR