SHRI AJAY WAHI , JAIPUR V. ASSISTANT COMMISSIONER OF INCOME TAX, JAIPUR

ITA 336/JPR/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 6307 (ITAT-JAIPUR)
• Duration Of Justice: 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 09-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SEEMA MEENA JCIT DHK
• Assessee Lawyers: DILIP SHIVPURI
• Keywords: Reopening of assessment; Capital asset; Tangible material; Difference of opinion; Assessment record; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 143(3); 2(14); 142(1); 147; 148

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKWO] U;KF;D LNL; ,O A JH HKKXPUN ] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, A M VK;DJ VIHY LA- @ ITA NO. 336/JP/2018 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2009-10. SHRI AJAY WAHI, DR. WAHIS DIAGNOSTIC CLINIC, A-5, CHANDPOLE, JHOTWARA ROAD, JAIPUR. CUKE VS. THE ACIT, CIRCLE-1, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AABPW 0826 F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI DILIP SHIVPURI (ADVOCATE) JKTLO DH VKSJ LS@ REVENUE BY : SMT. SEEMA MEENA (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 18.04.2018. ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 09/07/2018. VKNS'K@ ORDER PER VIJAY PAL RAO, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 19.01.2018 OF LD. CIT (A) FOR THE ASSESSMENT YEAR 2009-10. THE AS SESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1.(A) IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) HAS ERRED IN CONFIRMING THE ACTION OF THE L D. AO IN REOPENING THE ASSESSMENT U/S 147 OF INCOME TAX ACT, 1961. THE ACTION OF THE LD. CIT (A) IS ILLEGAL, UNJUSTIFI ED, ARBITRARY AND AGAINST THE FACTS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY QUASHING THE REASSESSMENT PROCEEDINGS BEING ILLEGAL AND WITHOUT ANY BASIS. 2 ITA NO. 336/JP/2018 SHRI AJAY WAHI, JAIPUR. (B) IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) HAS ERRED IN CONFIRMING THE ACTION OF THE L D. AO IN ISSUING NOTICE U/S 148 OF INCOME T4AX ACT, 1961, WI THOUT OBTAINING PROPER SANCTION U/S 151 OF THE INCOME TAX ACT, 1961. THE ACTION OF THE LD. CIT (A) IS ILLEGAL, UNJUSTIFI ED, ARBITRARY AND AGAINST THE FACTS OF THE CASE. RELIEF MAY PLEASE B E GRANTED BY QUASHING THE REASSESSMENT PROCEEDINGS BEING ILLEGAL AND WITHOUT JURISDICTION. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT (A) HAS ERRED IN SUSTAINING THE ADDITIONS MADE BY THE LD. AO, BY TREATING RS. 60,00,000/-, RECEIVED BY THE AS SESSEE, FOR THE PURPOSES OF CALCULATING LONG TERM CAPITAL GAINS , INSPITE OF THE FACT THAT THE ASSESSEE WAS NOT THE OWNER OF THE LAND AND WAS MERELY A HOLDER OF POWER OF ATTORNEY. THE ACTIO N OF LD. CIT (A) IS ILLEGAL, UNJUSTIFIED, ARBITRARY AND AGAINST THE FACTS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY DELETING THE ENTIRE ADDITIONS SUSTAINED BY THE LD. CIT (A). 3. THE ASSESSEE CRAVES HIS RIGHTS TO ADD, AMEND OR ALTER ANY OF THE GROUNDS ON OR BEFORE THE HEARING. GROUND NO. 1 IS REGARDING VALIDITY OF REOPENING OF THE ASSESSMENT. 2. THE ASSESSEE IS AN INDIVIDUAL AND A DOCTOR BY PR OFESSION. THE ASSESSEE FILED HIS RETURN OF INCOME DECLARING INCOME OF RS. 3,33,5 30/- ON 30.07.2009. THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) ON 20 .12.2011. THEREAFTER THE AO ISSUED NOTICE UNDER SECTION 148 ON 29 TH MARCH, 2016 TO ASSESS THE INCOME ON ACCOUNT OF SALE OF TWO PROPERTIES BY THE ASSESSEE A T RS. 60,00,000/- EACH. THE ASSESSEE RAISED OBJECTIONS AGAINST THE NOTICE ISSUE D UNDER SECTION 148 BY THE AO WHICH WERE DISPOSED OFF BY THE AO VIDE SEPARATE ORD ER DATED 30 TH NOVEMBER, 2016. THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) R EAD WITH SECTION 147 OF THE IT ACT ON 29.12.2016 WHEREBY THE AO MADE AN ADDITION O F RS. 1,01,79,171/- AS LONG TERM CAPITAL GAIN ARISING FROM SALE OF PLOTS OF LAN D. THE ASSESSEE CHALLENGED THE 3 ITA NO. 336/JP/2018 SHRI AJAY WAHI, JAIPUR. ACTION OF THE AO BEFORE THE LD. CIT (A) AND ALSO RA ISED A GROUND AGAINST THE VALIDITY OF REOPENING. HOWEVER, THE LD. CIT (A) HAS UPHELD THE VALIDITY OF REOPENING OF THE ASSESSMENT. 3. BEFORE US, THE LD. A/R OF THE ASSESSEE HAS SUBMI TTED THAT THE REASONS RECORDED BY THE AO DOES NOT MENTION THE DATE ON WHI CH THE INFORMATION CAME INTO THE POSSESSION OF THE DEPARTMENT. THE ORIGINAL ASS ESSMENT WAS COMPLETED UNDER SECTION 143(3) ON 20 TH DECEMBER, 2011 WHEREAS THE AO HAS MENTIONED IN THE REASONS RECORDED THAT THE RETURN OF INCOME WAS PROC ESSED UNDER SECTION 143(1). THEREFORE, THE AO HAS NOT APPLIED HIS MIND BY REOPE NING THE ASSESSMENT AND ALSO IT IS BASED ON THE CHANGE OF OPINION WHEN THE ORIGINAL ASSESSMENT WAS COMPLETED UNDER SECTION 143(3). HE HAS REFERRED TO THE DECIS ION OF HONBLE SUPREME COURT AS WELL AS HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. KELVINATOR OF INDIA LTD., 320 ITR 561 (SC) AND 123 TAXMAN 433 (DELHI) RESPECTIVEL Y AND SUBMITTED THAT IT IS SETTLED LAW THAT REASONS AS RECORDED CANNOT BE IMPR OVED UPON SUBSEQUENTLY. HENCE IN CASE THE INFORMATION WAS AVAILABLE TO THE AO AT THE TIME OF FRAMING THE ORIGINAL ASSESSMENT UNDER SECTION 143(3) THEN THE REOPENING IS BASED ON CHANGE OF OPINION AND CONSEQUENTLY IT IS BAD IN THE EYES OF LAW. THE LD. A/R HAS ALSO RAISED OBJECTIONS AGAINST THE APPROVAL GRANTED BY THE JCIT AND SUBMIT TED THAT THE JCIT HAS NOT APPLIED HIS MIND WHILE GRANTING THE APPROVAL OF REO PENING AS IT IS WRITTEN YES. THEREFORE, THE LD. A/R HAS SUBMITTED THAT IN VIEW O F THE DECISION OF THE HONBLE MADHYA PRADESH HIGH COURT IN CASE OF CIT VS. S. GOY ANKA LIME & CHEMICALS LTD., 231 TAXMAN 73 (MP), IT CANNOT BE SAID THAT THE SANC TIONING AUTHORITY HAS APPLIED HIS MIND TO THE ORDER OF SANCTION AND ASSUMPTION OF JUR ISDICTION WAS INVALID. THE LD. A/R 4 ITA NO. 336/JP/2018 SHRI AJAY WAHI, JAIPUR. HAS POINTED OUT THAT THE SAID DECISION OF HONBLE M ADHYA PRADESH HIGH COURT HAS BEEN UPHELD BY THE HONBLE SUPREME COURT REPORTED I N 237 TAXMAN 378 (SC). THE LD. A/R HAS ALSO PLACED RELIANCE ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CHUGGAMAL RAJPAL VS. S.P. CHALIHA, 79 ITR 603 (S C) AND SUBMITTED THAT THE APEX COURT HAS HELD THAT IF THE SANCTIONING AUTHORITY HA S READ THE REPORT CAREFULLY, HE WOULD HAVE NEVER COME TO THE CONCLUSION ON THE MATE RIAL BEFORE HIM THAT THIS IS A FIT CASE TO ISSUE NOTICE UNDER SECTION 148. THEREFORE, MERELY WRITING YES AND AFFIXING HIS SIGNATURE ON THE APPROVAL APPLICATION/FORM DOES NOT SHOW THAT THE SANCTIONING AUTHORITY HAS APPLIED HIS MIND. THE LD. A/R HAS FU RTHER CONTENDED THAT THE REOPENING CANNOT BE RESORTED TO FOR VERIFICATION OF FACTS AS THE AO HAS GIVEN THE REASON WHILE DISPOSING OFF THE OBJECTIONS RAISED AG AINST THE NOTICE UNDER SECTION 148 THAT THE REOPENING WAS NECESSARY TO VERIFY THE FACT S OF THE CASE AS POWER OF ATTORNEY COULD HAVE BEEN USED TO EVADE TAX. THEREF ORE, REOPENING OF ASSESSMENT CAN BE DONE ONLY IF THERE IS A REASON TO BELIEVE TH AT THE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. THE BELIEF SHOULD BE THAT OF A HONEST AND REASONABLE PERSON BASED ON REASONABLE GROUND AND AFTER PROPER APPRECIATION OF FACTS EMERGING OUT OF THE MATERIAL ON RECORD. THE REASONS GIVEN B Y THE AO WHILE DISPOSING OFF THE OBJECTIONS CLEARLY SHOW THAT AT THE TIME OF REOPENI NG OF THE ASSESSMENT, THE AO WAS NOT SURE OF THE FACT AND WHETHER THE POWER OF ATTOR NEY WAS GENUINE OR NOT. THEREFORE, IT IS NOT A CASE OF REASON TO BELIEVE TH AT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. IN SUPPORT OF HIS CONTENTION, HE HAS RELIED UPON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF INDIAN OIL CORPORATION VS. ITO, 159 ITR 956 (SC). THE LD. A/R HAS SUBMITTED THAT WHEN THERE WA S NO TANGIBLE MATERIAL TO COME 5 ITA NO. 336/JP/2018 SHRI AJAY WAHI, JAIPUR. TO THE CONCLUSION THAT THERE IS AN ESCAPEMENT OF IN COME, THE REOPENING OF ASSESSMENT IS NOT VALID AND LIABLE TO BE QUASHED. 3.1. THE NEXT CONTENTION OF THE LD. A/R IS THAT THE REOPENING OF THE ASSESSMENT IS AFTER EXPIRY OF 4 (FOUR) YEARS FROM THE END OF THE ASSESSMENT YEAR AND THE ORIGINAL ASSESSMENT WAS COMPLETED UNDER SECTION 143(3), THER EFORE, IN THE ABSENCE OF FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND T RULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT THE REOPENING IS NOT VALID AS PER PR OVISO TO SECTION 147 OF THE ACT. HE HAS RELIED UPON THE DECISION OF HONBLE MADRAS H IGH COURT IN THE CASE OF CIT VS. ARVIND REMEDIES LTD., 378 ITR 547 (MAD.) AS WELL AS THE DECISION OF HONBLE BOMBAY HIGH COURT IN CASE OF SITARA DIAMONDS PVT. LTD. VS. DCIT , 345 ITR 91 (BOM.). THE LD. A/R HAS POINTED OUT THAT IT WAS CLEAR TO THE AO THAT ASSESSEE WAS ONLY A POWER OF ATTORNEY HOLDER AND HE WAS NOT THE OWNER OF THE PLO TS OF LAND, THEREFORE, THERE COULD NOT BE ANY ESCAPEMENT OF INCOME IN HIS HANDS. HENCE THE ASSESSEE COULD NOT BE SAID TO HAVE FAILED TO DISCLOSE FULLY AND TRULY ALL RELEVANT MATERIAL NECESSARY FOR ASSESSMENT. HE HAS REFERRED TO THE DECISION OF HON BLE SUPREME COURT IN CASE OF SURAJ LAMP & INDUSTRIES PVT. LTD., 340 ITR 1 (SC) A ND SUBMITTED THAT THE HONBLE COURT HAS HELD THAT POWER OF ATTORNEY HOLDERS ARE N OT THE OWNERS OF THE LAND. 3.2. ON THE OTHER HAND, THE LD. D/R HAS SUBMITTED T HAT IT IS A CLEAR CASE OF NON DISCLOSURE OF THE TRANSACTION OF SALE OF TWO PROPER TIES BY THE ASSESSEE IN THE RETURN OF INCOME, THEREFORE, UNDISPUTEDLY THE ASSESSEE HAS FAILED TO DISCLOSE FULLY AND TRULY ALL RELEVANT MATERIAL FACTS NECESSARY FOR ASSESSMEN T. THE INFORMATION RECEIVED BY THE AO REGARDING THE SALE OF TWO PLOTS OF LAND BY T HE ASSESSEE IS A TANGIBLE MATERIAL SUFFICIENT TO FORM THE BELIEF THAT INCOME ASSESSABL E TO TAX HAS ESCAPED ASSESSMENT. 6 ITA NO. 336/JP/2018 SHRI AJAY WAHI, JAIPUR. THUS THE LD. D/R HAS SUBMITTED THAT EVEN IF THE ORI GINAL ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) WHEN ASSESSEE HAS FAILED TO DI SCLOSE THE TRANSACTION OF SALE OF TWO PLOTS THEN IT IS A FIT CASE FOR REOPENING OF TH E ASSESSMENT. AS REGARDS THE SANCTION GRANTED BY THE JCIT, THE LD. D/R HAS SUBMI TTED THAT IT IS NOT A CASE OF SIMPLE APPROVAL BY WRITING YES BUT THE JCIT HAS A PPLIED HIS MIND AND SPECIFICALLY GIVEN THE REASONS THAT IT IS A FIT CASE FOR ISSUING NOTICE UNDER SECTION 148. THE SAID NOTING IS IN THE HAND OF JCIT AND AFTER CONSIDERING THE RELEVANT RECORD AS WELL AS THE REASONS RECORDED BY THE AO. THEREFORE, WHEN THE JC IT GRANTING APPROVAL HAS GONE THROUGH THE MATERIAL ON RECORD AS WELL AS THE REASO NS RECORDED BY THE AO, THEN THE DECISION TAKEN FOR APPROVING THE ISSUANCE OF NOTICE UNDER SECTION 148 IS AFTER DUE APPLICATION OF MIND. SHE HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIAL ON RECORD. THE ASSESSEE FILED HIS RETURN OF INCOME ON 30.07.2009 WHICH WAS SUBJECTED TO SCRUTINY ASSESSMENT UNDER SECTION 143(3) VIDE OR DER DATED 20 TH DECEMBER, 2011 AS STATED BY THE LD. A/R OF THE ASSESSEE. THIS FA CT HAS NOT BEEN DISPUTED BY THE LD. D/R. THE AO SUBSEQUENTLY REOPENED THE ASSESSMENT B Y ISSUING NOTICE UNDER SECTION 148 ON 22 ND MARCH, 2016 AND RECORDING THE REASONS AS UNDER :- THE ASSESSEE HAD FILED ITS RETURNOF INCOME FOR A. Y. 2009-10 ON 30/07/2009 DECLARING TOTAL INCOME OF RS. 3,33,530/- WHICH STANDS PROCESSED U/S 143(1) ON 04/01.2011. AS PER INFORMATION AVAILABLE WITH THIS OFFICE, IT W AS NOTICED THAT THE ASSESSEE HAS SOLD TWO PROPERTIES ON 24./03/2009, TH E FACE VALUE OF BOTH PROPERTIES WERE RS. 60,00,000/- EACH. AS PER T HE STATE GOVERNMENT STAMP DUTY AUTHORITY, THE FINAL FACE VAL UE OF THE PROPERTIES WERE RS. 95,87,550/- AND RS. 83,37,000/- . 7 ITA NO. 336/JP/2018 SHRI AJAY WAHI, JAIPUR. ON VERIFICATION OF THE FACTS FROM THE RETURN OF INC OME OF THE ASSESSEE, IT HAS BEEN FOUND THAT THE ASSESSEE HAS NEITHER SHO WN THESE TRANSACTIONS NOR SHOWN ANY CAPITAL GAIN IN HIS RETU RN OF INCOME. ON THE BASIS OF THE INFORMATION AVAILABLE ON RECORD , I HAVE REASONS TO BELIEVE THAT INCOME OF RS. 1,79,24,550/- CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT AS PER CLAUSE (B) OF EXPLANATION 2 OF SE CTION 147 OF THE IT ACT, 1961. THEREFORE, IT IS A FIT CASE TO ISSUE NOT ICE U/S 148 OF THE I.T. ACT, 1961. IT IS CLEAR FROM THE REASONS RECORDED BY THE AO THA T THE AO EXAMINED THE ASSESSMENT RECORD AND NOTED THAT THE ASSESSEE HAS N OT DECLARED THE TRANSACTION OF SALE OF TWO PROPERTIES OR THE CAPITAL GAIN ARISING FROM THOSE TRANSACTIONS IN THE RETURN OF INCOME. THE TRANSACTIONS OF SALE OF PROP ERTIES IN QUESTION UNDISPUTEDLY RESULTING IN THE INCOME ASSESSABLE TO TAX AS THESE TWO PROPERTIES ARE NOT FALLING IN THE EXCLUSION CLAUSE OF THE CAPITAL ASSET AS PER SE CTION 2(14) OF THE IT ACT. THE ASSESSEE HAS NOT DISPUTED THE FACTS RECORDED IN THE REASONS BY THE AO BUT THE ONLY OBJECTION RAISED BY THE ASSESSEE IS THAT THE ASSESS EE HAS SOLD THESE PROPERTIES AS POWER OF ATTORNEY HOLDER AND NOT AS OWNER OF THESE LANDS. HOWEVER, WE FIND THAT THE SALE CONSIDERATION WAS RECEIVED BY THE ASSESSEE IN HIS OWN NAME AND WAS DEPOSITED IN THE BANK ACCOUNT OF THE ASSESSEE THOUG H SUBSEQUENTLY THE ASSESSEE HAS TRANSFERRED PART OF THE SALE CONSIDERATION IN T HE NAME OF OTHER PERSONS. THUS THIS FACT OF SALE OF LANDS BY THE ASSESSEE AND RECE IVING THE SALE CONSIDERATION IN HIS OWN NAME CONSTITUTE TANGIBLE MATERIAL TO FORM THE B ELIEF THAT THE INCOME ASSESSABLE TO TAX HAS ESCAPED ASSESSMENT PARTICULARLY WHEN THE ASSESSEE HAS NEITHER DISCLOSED THESE TRANSACTIONS NOR OFFERED ANY CAPITAL GAIN IN THE RETURN OF INCOME. AS REGARDS THE OBJECTION OF CHANGE OF OPINION, WE NOTE THAT TH E AO HAS NOT CARRIED OUT ANY 8 ITA NO. 336/JP/2018 SHRI AJAY WAHI, JAIPUR. INVESTIGATION OR EXAMINATION ON ANY ISSUE AND HAS P ASSED THE ORDER DATED 20 TH DECEMBER, 2011 SUMMARILY AS UNDER :- THE ASSESSEE FILED RETURNS OF INCOME FOR A.Y. 200 9-10, VIDE RECEIPT NO. 79529530300709 DATED 30-07-2009. THE ASSESSEE H AD INCOME FROM RUNNING OF DIAGNOSTIC CENTRE, CONSULTANCY & IN TEREST FROM BANK FDRS. THE CASE WAS SELECTED FOR SCRUTINY UNDER THE CASS. THE NOTICE U/S 142(1) AND 143(2) OF THE INCOME TAX ACT, 1961 WERE ISSUED TO THE ASSESSEE AND SH. RAKESH KEDIA, C.A. A ND THE COUNSEL FOR THE ASSESSEE ATTENDED THE PROCEEDINGS FROM TIME TO TIME. AFTER DISCUSSION THE RETURNED INCOME OF THE ASSESSEE IS A CCEPTED. THEREFORE, WHEN THE ASSESSEE HAS NOT DECLARED ANY I NCOME FROM THE TRANSACTION OF SALE OF THESE TWO PLOTS OF LAND AS WELL AS THE TRAN SACTION ITSELF AND FURTHER WHEN THE AO HAS NOT CARRIED OUT ANY FURTHER EXAMINATION ON A NY OF THE ISSUES INCLUDING THE DEPOSITS MADE IN THE BANK ACCOUNT OF THE ASSESSEE R EGARDING THE SALE CONSIDERATION, THEN THE REOPENING BASED ON THE INFORMATION RECEIVE D BY THE AO REGARDING THE FACT OF SALE OF THESE PLOTS BY THE ASSESSEE CANNOT FAULT ED WITH ON THE GROUND OF CHANGE OF OPINION. THE DECISIONS RELIED UPON BY THE LD. A/ R OF THE ASSESSEE ON THESE POINTS CANNOT BE APPLIED TO THE FACTS OF THE CASE WHEN IT IS NOT A CASE OF MERE POSSIBILITY OF INCOME BASED ON THE INFORMATION RECEIVED BY THE AO BUT THE INFORMATION PERTAINS TO THE TRANSACTION RESULTING DEFINITE INCOME CHARGEABL E TO TAX. IN THE ABSENCE OF THE TRANSACTIONS AS WELL AS THE INCOME ARISING FROM THE TRANSACTION OF SALE OF THESE LANDS DISCLOSED IN THE RETURN OF INCOME, THE ASSESSEE CAN NOT TAKE A PLEA THAT THE REOPENING IS BASED ON CHANGE OF OPINION. 9 ITA NO. 336/JP/2018 SHRI AJAY WAHI, JAIPUR. 5. THE NEXT OBJECTION RAISED BY THE LD. A/R OF THE ASSESSEE IS REGARDING THE APPROVAL GRANTED BY THE JCIT WITHOUT APPLICATION OF MIND. WE NOTE THAT THE JCIT HAS GRANTED THE APPROVAL AFTER CONSIDERING THE FORM FOR RECORDING THE REASONS FOR INITIATING THE PROCEEDINGS UNDER SECTION 148 WHICH CONTAINS ALL THE DETAILS AS WELL AS THE REASONS RECORDED BY THE AO AND AFTER CONSIDERIN G THE REASONS RECORDED BY THE AO, THE JCIT HAS GRANTED THE APPROVAL AS UNDER :- 12. COMMENTS OF THE JOINT CIT : YES IT IS A FI T CASE FOR ISSUE ON THE REASON RECORDED BY ISSUE OF NOTICE U/ S 148. THE AO. THUS CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, WHEN THE APPROVAL WAS GRANTED BASED ON THE REASONS RECORDED BY THE AO WHI CH IS PART OF THE PROFORMA AS WELL AS THE INFORMATION REGARDING THE TRANSACTION O F SALE OF PLOTS OF LAND, IT CANNOT BE INFERRED THAT THE SAID APPROVAL IS WITHOUT APPLICAT ION OF MIND. THE DECISIONS RELIED ON BY THE LD. A/R OF THE ASSESSEE ARE BASED ON THE PECULIAR FACTS WHEN THE APPROVAL WAS GRANTED ON THE PROFORMA AND BY WRITING ONLY YE S ON THE DOTTED LINE EVEN WITHOUT HAVING REASONS RECORDED BY THE AO. THE LEA D DECISION ON THIS POINT IS OF HONBLE SUPREME COURT IN THE CASE OF CHHUGAMAL RAJP AL VS. S.P. CHALIHA, 79 ITR 603 (SC) WHEREIN ON THE QUESTION OF ACCORDING THE PERMI SSION BY THE COMMISSIONER ON THE REPORTS SUBMITTED BY THE AO UNDER SECTION 151 ( 2), THE HONBLE SUPREME COURT HAS OBSERVED AND HELD AS UNDER :- 10 ITA NO. 336/JP/2018 SHRI AJAY WAHI, JAIPUR. FURTHER, THE REPORT SUBMITTED BY HIM UNDER SECTION 151(2) DOES NOT MENTION ANY REASON FOR COMING TO THE CONCLUSION THAT IT IS A FIT CASE FOR THE ISSUE OF A NOTICE UNDER SECTION 148. WE ARE ALSO OF THE OPINIO N THAT THE COMMISSIONER HAS MECHANICALLY ACCORDED PERMISSION. HE DID NOT HI MSELF RECORD THAT HE WAS SATISFIED THAT THIS WAS A FIT CASE FOR THE ISSUE OF A NOTICE UNDER SECTION 148. WE FURTHER NOTE THAT THE HONBLE SUPREME COURT HAS REPRODUCED THE REPORT OF THE AO SEEKING PERMISSION/APPROVAL OF THE COMMISSIONER FOR ISSUING NOTICE UNDER SECTION 148 WHICH DOES NOT CONTAIN THE REASONS RECO RDED BY THE AO FOR COMING TO THE CONCLUSION THAT IT IS A FIT CASE TO ISSUE NOTIC E UNDER SECTION 148. THUS BASED ON THESE PECULIAR FACTS OF THAT CASE, THE HONBLE SUPR EME COURT HAS SPECIFICALLY POINTED OUT THAT THE REPORT SUBMITTED BY THE AO UNDER SECTI ON 151(2) DOES NOT MENTION ANY REASON FOR COMING TO THE CONCLUSION THAT IT IS A FI T CASE FOR ISSUE OF NOTICE UNDER SECTION 148 AND CONSEQUENTLY THE COMMISSIONER MECHA NICALLY ACCORDED PERMISSION. WHEREAS IN THE CASE IN HAND, THE REPORT SUBMITTED B Y THE AO DULY SET OUT THE REASONS FOR COMING TO THE CONCLUSION THAT THE INCOM E ASSESSABLE TO TAX HAS ESCAPED ASSESSMENT AND THIS IS A FIT CASE TO ISSUE NOTICE U NDER SECTION 148. HENCE WE DO NOT FIND ANY SUBSTANCE OR MERIT IN THE OBJECTION RAISED BY THE LD. A/R OF THE ASSESSEE AGAINST THE APPROVAL GRANTED BY THE JCIT. THE OTHE R DECISIONS RELIED UPON BY THE LD. A/R OF THE ASSESSEE ARE ON THE SIMILAR LINES AS THA T OF THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CHHUGAMAL RAJPAL VS. S .P. CHALIHA (SUPRA). 5.1. THE LD. A/R HAS ALSO RAISED THE OBJECTION THAT THE REOPENING IS AFTER 4 (FOUR) YEARS FROM THE END OF THE ASSESSMENT YEAR UNDER CON SIDERATION AND, THEREFORE, IN THE ABSENCE OF FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT, THE AO HAS NO JURISDICTION TO REOPEN THE 11 ITA NO. 336/JP/2018 SHRI AJAY WAHI, JAIPUR. ASSESSMENT. WE FIND THAT THOUGH THE ORIGINAL ASSES SMENT WAS COMPLETED UNDER SECTION 143(3) AND, THEREFORE, THE REOPENING AFTER 4 YEARS FROM THE END OF THE ASSESSMENT YEAR CAN BE MADE ONLY WHEN THERE IS A FA ILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL F ACTS NECESSARY FOR ASSESSMENT. THE AO HAS SPECIFICALLY RECORDED IN THE REASONS THAT ON VERIFICATION OF FACTS FROM THE RETURN OF INCOME OF THE ASSESSEE, IT HAS BEEN FOUND THAT THE ASSESSEE HAS NEITHER SHOWN THESE TRANSACTIONS NOR SHOWN ANY CAPITAL GAIN IN HIS RETURN OF INCOME AND THIS FACT RECORDED BY THE AO IN THE REASONS HAS NOT BEEN DISPUTED BY THE ASSESSEE. THOUGH THE ASSESSEE HAS TAKEN A STAND THAT THESE LA NDS IN QUESTION DO NOT BELONG TO THE ASSESSEE AND, THEREFORE, THE INCOME FROM TRA NSFER OF THESE LANDS ARE NOT ASSESSABLE IN THE HANDS OF THE ASSESSEE HOWEVER, ON CE THE ASSESSEE HAS SOLD THESE PROPERTIES AND RECEIVED THE CONSIDERATION AND THE T RANSACTIONS ARE NOT RECORDED EITHER IN THE BOOKS OF ACCOUNTS OR DISCLOSED IN THE RETURN OF INCOME, THEN THE CONDITION OF NOT DISCLOSING FULLY AND TRULY ALL MAT ERIAL FACTS NECESSARY FOR ASSESSMENT IS SATISFIED. HENCE, IN VIEW OF THE ABOVE FACTS AN D CIRCUMSTANCES OF THE CASE AS WELL AS THE DISCUSSIONS, WE DO NOT FIND ANY ERROR OR ILL EGALITY IN THE ORDERS OF THE AUTHORITIES BELOW QUA THIS ISSUE. GROUND NO. 2 IS REGARDING THE ADDITION MADE BY THE AO ON ACCOUNT OF CAPITAL GAIN WHICH WAS SUSTAINED BY THE LD. CIT (A). 12 ITA NO. 336/JP/2018 SHRI AJAY WAHI, JAIPUR. 6. WE HAVE HEARD THE LD. A/R AS WELL AS THE LD. D/R AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. DURING THE YEAR UNDER CONSIDER ATION THE ASSESSEE SOLD TWO PLOTS OF LAND FOR A CONSIDERATION OF RS. 60,00,000/- EACH TOTAL AMOUNTING TO RS. 1,20,00,000/- VIDE SALE DEED DATED 24 TH MARCH, 2009. THE ASSESSEE HAD EXECUTED THE SALE DEEDS IN THE CAPACITY OF POWER OF ATTORNEY HOLDER ON BEHALF OF THE OTHER PERSONS WHO ARE STATED TO BE THE OWNERS OF THESE LA NDS. WE FURTHER NOTE THAT ASSESSEE RECEIVED THE ENTIRE CONSIDERATION AND AFTE R RETAINING AN AMOUNT OF RS. 20,00,000/-, TRANSFERRED THE BALANCE AMOUNT IN THE NAMES OF VARIOUS PERSONS WHO WERE STATED TO BE THE OWNERS OF THE LAND IN QUESTIO N. THE ASSESSEE PRODUCED THE AFFIDAVIT IN SUPPORT OF THE CLAIM THAT THE OWNERS O F THE LAND ARE THE OTHER PERSONS AND ASSESSEE HAS ACTED ONLY AS POWER OF ATTORNEY HO LDER. WE FIND THAT ONE OF THE OWNERS OF THE LAND IS WIFE OF THE ASSESSEE AND THER E IS A VEXED HISTORY OF THE LAND CHANGING THE HANDS FROM ONE PERSON TO OTHER PERSON INCLUDING THE DONATION WAS MADE TO THE SOCIETY/TRUST AND AGAIN IT WAS RETURNED TO THE DONOR. ACCORDINGLY, ALL THESE FACTS WHICH ARE POINTED OUT BY THE ASSESSEE I N THE AFFIDAVITS FILED OF ALLEGED OWNERS OF THE LANDS REQUIRE TO BE VERIFIED TO ASCE RTAIN THE REAL NATURE OF TRANSACTION ON THE PART OF THE ASSESSEE, THOUGH TO THE EXTENT O F RS. 20,00,000/- WHICH IS RETAINED BY THE ASSESSEE, THE SAME WOULD BE, IN ANY CASE, ASSESSED TO TAX IN THE HANDS OF THE ASSESSEE AS INCOME IF THE ASSESSEE IS NOT FOUND TO BE THE OWNER OF THESE LANDS. ACCORDINGLY, WE SET ASIDE THIS ISSUE OF ASSESSMENT OF CAPITAL GAIN TO THE RECORD OF THE AO FOR CARRYING OUT A PROPER VERIFICA TION AND EXAMINATION OF THE RELEVANT FACTS AND THEN TO ASCERTAIN THE ACTUAL BEN EFICIARIES OF THE TRANSACTION OF SALE OF THESE PROPERTIES APART FROM RS. 20,00,000/- WHIC H WAS RETAINED BY THE ASSESSEE 13 ITA NO. 336/JP/2018 SHRI AJAY WAHI, JAIPUR. AND THEN DECIDE THE ISSUE AS PER LAW. NEEDLESS TO SAY, THE ASSESSEE BE GIVEN PROPER OPPORTUNITY OF HEARING. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 09/07/2018 . SD/- SD/- HKKXPUN FOT; IKY JKWO (BHAGCHAND) ( VIJAY PAL RAO ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 09/07/2018. DAS/ VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT-SHRI AJAY WAHI, JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT-THE ACIT, CIRCLE-1, JAIPUR. 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. 336/JP/2018} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR