JAIPAL, GURGAON V. ITO, WARD- 2(5), GURGAON

ITA 3279/DEL/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3637 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 5 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-10-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 07-05-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: AGAINST DATED PASSED
• Keywords: Capital asset; Question of law; Cost of acquisition; Reassessment proceedings; Capital Gains
• Section: 44AD; 54B; 54F; 142(1); 139(4); 13; 148

Judgement Text

1 ITA NO. 3279/DEL/2018 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: C NEW DELHI BEFORE MS SUCHITRA KAMBLE, JUDICIAL ME MBER AND SH. PRASHANT MAHARISHI, ACCOUN TANT MEMBER I.T.A. NO. 3279/DEL/20 18 (A.Y 2011-12) (THROUGH VIDEO CON FERENCING) JAIPAL C/O. KUNAL AGGARWAL & ASSOCIATION, 226, JMD MEGAPOLIS, 2 ND FLOOR, SESCTOR-48, SOHNA ROAD, GURGAON ALAPJ3014C (APPELLANT) VS ITO WARD-2(5) GURGAON (RESPONDENT) ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE O RDER DATED 28/02/2018 PASSED BY CIT (A)-1, GURGAON FOR ASSESSMENT YEAR 20 11-12. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, WHETHER THE LD. CIT(A) IS JUSTIFIED IN NOT ADMITTING THE ADDITIONAL GROUND TAKEN BY THE ASSESSEE DURING APPELLATE PROCEEDINGS WHICH WAS PUR ELY A QUESTION OF LAW AND WAS BASED ON THE MATERIAL AVAILABLE ON RECORDS? 2. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE REASSESSMENT PROCEEDINGS WERE INITIATED ON SUSPICION ONLY, THERE FORE WHOLE OF THE APPELLANT BY NONE RESPONDENT BY SH. VIVEK VARDHAN, SR. DR DATE OF HEARING 07.10.2021 DATE OF PRONOUNCEMENT 13.10.2021 2 ITA NO. 3279/DEL/2018 REASSESSMENT PROCEEDINGS ARE LIABLE TO BE QUASHED. 3. THAT THE ASSESSMENT ORDER IS VOID AND INVALID I N LAW AS THERE IS NO ESCAPEMENT OF INCOME BASED ON THE ORIGINAL REASONS RECORDED BY THE A.O. FOR REOPENING OF CASE U/S 148 OF THE ACT. 4. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD A.O. AND THE LD. CIT(A) BOTH HAVE FAILED TO APPRECIATE THAT INTEREST U/S 234A CAN BE CHARGED UP TO THE DUE DATE PRESCRIBED U/S 139(4) OF THE ACT NOT THE DATE OF ASSESSMENT ORDER. 5. WITHOUT PREJUDICE TO THE ABOVE GROUNDS, WHETHER THE LD. CIT(A)-1, GURGAON, JUSTIFIED IN CONFIRMING THE ACTION OF THE LD A.O. TO ADOPT THE CIRCLE RATE OF LAND @RS. 27,000/- PER ACRE AS ON 01-04-198 1 IN ARBITRARY MANNER AND WITHOUT BRINGING ANY SUITABLE COMPARABLE ON REC ORDS? 3. THE ASSESSING OFFICER RECEIVED INFORMATION THAT THE ASSESSEE MADE CASH DEPOSITS OF RS. 18,00,000/- IN HIS BANK ACCOUNT MA INTAINED WITH ICICI BANK. THE ASSESSING OFFICER ACCORDINGLY RECORDED REASONS AND ISSUED NOTICE U/S 148 ON 26/3/2015. IN RESPONSE TO THE NOTICE, THE ASSES SEE DID NOT FILE HIS RETURN OF INCOME WITHIN THE STIPULATED PERIOD AND TILL THE DA TE OF ASSESSMENT ORDER. NOTICE U/S 142(1) OF THE INCOME TAX ACT CALLING FOR CERTAIN INFORMATION WAS ISSUED ON 14/8/2015, BUT ON THE DATE OF HEARING NON E ATTENDED. AGAIN, NOTICE U/S 142(1) WAS ISSUED ON 27/11/2015 ALONG WITH SHOW CAUSE FOR 8/12/2015 AS WELL AS ON 28/12/2015 FOR 7/1/2016. ON 7/1/2016 ADVOCATE/AR APPEARED AND REQUESTED FOR ADJOURNMENT. THE ASSESSING OFFIC ER OBTAINED BANK STATEMENT BY ISSUING LETTER U/S 133(6). SUBSEQUENT LY, THE ASSESSEE FURNISHED BANK STATEMENT, PROFIT AND LOSS ACCOUNT AND BALANCE SHEET AS WELL AS COMPUTATION OF HIS INCOME SHOWING GROSS RECEIPTS OF RS. 13,75,569/- AND INCOME U/S 44AD AT RS. 1,15,000/-. THE ASSESSING O FFICER OBSERVED THAT THE ASSESSEE WAS A PROPRIETOR OF M/S JSB PACKER. FROM THE BANK ACCOUNT OF THE ASSESSEE, THE ASSESSING OFFICER NOTED THAT THERE WA S A CREDIT ENTRY OF RS. 98,87,500/- ON 27/7/2010. THE ASSESSEE SUBMITTED T HAT THE ASSESSEE RECEIVED 3 ITA NO. 3279/DEL/2018 1/4 TH SHARE AGAINST SALE OF LAND TO M/S SHREE BUILDTECH. THE ASSESSING OFFICER NOTED THAT THE LAND SOLD BY THE ASSESSEE WAS WITHIN 6 KILO METERS OF NEAREST TO MUNICIPAL LIMIT AND AS SUCH WAS A CAPITAL ASSETS. THE ASSESSING OFFICER FURTHER OBSERVED THAT THE COST OF ACQUISITION OF THE LAND A S ON 1/4/1981 WAS RS. 27,000 PER ACRE WHICH WAS RATE OF SIMILAR LAND OF N EARBY AREA DURING 1981-82. THE ASSESSING OFFICER ALSO OBTAINING INFORMATION FR OM HALKA PATWARI THAT THE LAND WAS APPROXIMATELY TWO KILO METER AWAY FROM THE MUNICIPAL LIMIT OF GURGAON. THE ASSESSEE CONTENDED THAT THE SAID LAND WAS AT A DISTANCE OF 15 KILO METER FROM THE TEHSIL SOHNA AND AS SUCH WAS NO T A CAPITAL ASSET. THE ASSESSING OFFICER CONSIDERED THE ASSESSEES SUBMISS IONS AND OBSERVED THAT AS PER THE PROVISION OF SECTION 2(14), THE DISTANCE IS TO BE SEEN FROM ANY MUNICIPALITY AND ACCORDINGLY HELD THAT THE INCOME A SSESSED ON ACCOUNT OF TRANSFER OF LAND WAS TAXABLE UNDER THE HEAD CAPITAL GAINS. THE ASSESSING OFFICER FURTHER NOTED THAT THE ASSESSEE HAD PURCHAS ED AGRICULTURAL LAND ON 2/2/2010 AND 8/12/2020 AMOUNTING TO RS. 16,88,863/- . THIS AMOUNT WAS ALLOWED AS DEDUCTION U/S 54B. THE ASSESSEE ALSO CL AIMED DEDUCTION U/S 54F ON ACCOUNT OF PURCHASE OF RESIDENTIAL HOUSE FROM SM T. RAJESH BALA OF SOHNA ON 16/3/2011 FOR AN AMOUNT OF RS. 18,00,000/-. THE ASS ESSEE FURNISHED A PHOTO COPY OF MUKHTIARNAMA. THE ASSESSING OFFICER DID NO T ACCEPT THIS EVIDENCES AND REJECTED THE CLAIM OF DEDUCTION U/S 54F. LONG T ERM CAPITAL GAIN WERE COMPUTED AS UNDER:- SALE CONSIDERATION RS. 98,87,500/- COST OF ACQUISITION RS. 3,07,152/- LONG TERM CAPITAL GAINS RS.95,80,348/- LESS: DEDUCTION U/S 54B RS. 16,88,863/- THUS, THE ASSESSING OFFICE R MADE ADDITION OF RS. 7 8,91,485/- AS LONG TERM CAPITAL GAIN. THE ASSESSING OFFICER ALSO MADE ADDI TION OF RS. 49,612/- IN RESPECT OF INTEREST RECEIVED FROM SAVING ACCOUNT. 4 ITA NO. 3279/DEL/2018 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASS ESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) PARTLY ALLOWED THE APPEAL O F THE ASSESSEE. 5. AT THE TIME OF HEARING, NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE GIVING NOTICE WHICH IS RETURNED BACK WITH THE REMAR K BY THE POSTAL AUTHORITIES THAT NOBODY KNOWS ABOUT THE ASSESSEE. THERE IS NO NEW/DIFFERENT ADDRESS GIVEN IN FORM NO. 36, HENCE WE ARE PROCEEDING ON TH E BASIS OF THE SUBMISSION MADE BY THE ASSESSES BEFORE THE ASSESSING OFFICER A ND BEFORE THE CIT(A). 6. THE LD. DR RELIED UPON THE ASSESSMENT ORDER AND THE ORDER OF THE CIT(A). THE LD. DR FURTHER SUBMITTED THAT THE CIT(A) HAS TA KEN PROPER COGNIZANCE AND HAVE GIVEN A PARTIAL RELIEF AS PER LAW. 7. WE HAVE HEARD LD. DR AND PERUSED ALL THE RELEVAN T MATERIALS AVAILABLE ON RECORD. IT IS PERTINENT TO NOTE THAT THE ASSESSEE HAS CLAIMED DEDUCTION U/S 54F OF THE ACT ON ACCOUNT OF PURCHASE OF RESIDENTIAL HO USE FOR AN AMOUNT OF RS.18,00,000/-. THERE WAS A CASH DEPOSIT IN THE BA NK ACCOUNT. IT WAS ONLY WHILE EXAMINING THE BANK ACCOUNT THAT THE ISSUE OF CREDIT ENTRY AMOUNTING TO MORE THAN RS. 98,00,000/- WAS NOTICE BY THE ASSESSI NG OFFICER. THUS, THE ADDITION UNDER THE HEAD LONG TERM CAPITAL GAIN WAS BASED ON THE INFORMATION OBTAINED FROM THE BANK ACCOUNT OF THE ASSESSEE. BUT AFTER GOING THROUGH THE ASSESSMENT ORDER AND THE REASONS, IT IS FOUND THAT IT IS NOT REOPENED ON THIS ISSUE ONLY AND THE CASH DEPOSITS IN THE BANK ACCOUN T ARE RELATED TO THIS LONG TERM CAPITAL GAIN WHICH WAS FOR PURCHASE OF RESIDEN TIAL HOUSE. THEREFORE, THE ASSESSING OFFICER HAS RIGHTLY MADE ADDITION AND THE CIT(A) HAS RIGHTY CONFIRMED THE ADDITION. HENCE, GROUND NO. 1 TO 3 A RE DISMISSED. AS REGARDS GROUND NO. 4 RELATING TO INTEREST U/S 234A OF THE A CT, THE CIT(A) SHOULD HAVE CONSIDERED THAT THE INTEREST CAN BE CHARGED UP TO T HE DUE DATE PRESCRIBED U/S 139(4) OF THE ACT AND NOT THE DATE OF THE ASSESSMEN T ORDER. THEREFORE, WE DIRECT THE ASSESSING OFFICER TO CHARGE THE INTEREST AS PER SECTION 234A READ WITH SECTION 139(4) OF THE ACT. HENCE, GROUND NO. 4 IS P ARTLY ALLOWED. AS REGARDS 5 ITA NO. 3279/DEL/2018 GROUND NO. 5, THE CIT(A) HAS RIGHTLY ADOPTED THE CI RCLE RATE OF LAND AT RS. 27,000/- PER ACRE AS THE PROPERTY IS SITUATED APPRO XIMATELY TWO KILO METERS AWAY FROM THE MUNICIPAL LIMITS OF GURGAON AND NOT AS CONTENDED BY THE ASSESSEE THAT IT IS AT A DISTANCE OF 15 KILO METER FROM THE TEHSIL SOHNA. HENCE, GROUND NO.5 IS DISMISSED. THUS, APPEAL OF THE ASSE SSEE IS PARTLY ALLOWED. 8. IN RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 13 TH DAY OF OCTOBER, 2021 SD/- SD/- (PRASHANT MAHARISHI) (SUCH ITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 13/10/2021 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI