Sh. Karanvir Verma, Amritsar. V. The Icnomet-ax Officer, Amritsar.

ITA 352/ASR/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0756 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 11 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 11-05-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 30-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SH S S KANWAL
• Assessee Lawyers: P N ARORA
• Keywords: Reassessment proceedings; Borrowed satisfaction
• Section: 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR(SMC). BEFORE SH. A.D. JAIN, JUDICIAL MEMBER ITA NO. 352(ASR)/2014 ASSESSMENT YEAR:2005-06 PAN: AFOPV8842A SH. KARANVIR VERMA. VS. INCOME TAX OFFICER, AMRITSAR. AMRITSAR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. P.N.ARORA, ADVOCATE RESPONDENT BY: SH.SH. S.S.KANWAL, DR DATE OF HEARING: 11/05/2016 DATE OF PRONOUNCEMENT: 18/05/2016 ORDER THIS IS THE ASSESSEES APPEAL FOR THE ASSESSMENT Y EAR 2005-06, AGAINST THE ORDER, DATED 29.03.2014, PASSED BY THE LD. CIT(A), AMRITSAR. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF A PPEAL: 1. THAT THE LD. CIT(A) IS NOT JUSTIFIED IN UPHOLDI NG THE ASSESSMENT ORDER HAVING FAILED IN DISCHARGING THE O NEROUS DUTY AS ON APPELLATE AUTHORITY FOR PASSING A SPEAKI NG ORDER WHICH IS BAD IN LAW AND AS PER FACTS OF THE CASE GO ING TO PREJUDICE THE APPELLANT. 2. THAT THE LD. CIT(A) IS NOT JUSTIFIED IN UPHOLDIN G THE FINDINGS OF THE AO ON ACCOUNT OF CONSIDERING THE PHOTOCOPY O F BENAMA AS EVIDENCE OF INVESTMENT EVEN WHERE NO EVID ENCE IS ON RECORD THAT ASSESSEE WAS PHYSICALLY PRESENT AT T HE TIME OF EXECUTION OF DEED AND THE SAID AGREEMENT WAS NOT SI GNED BY THE ASSESSEE. ITA NO.352(ASR)/2014 AY:2005-06 2 3. THAT MR. KARANVIR VERMA HAS NOT PURCHASED ANY 4/ 20 SHARE IN THE ABOVE SAID LAND FROM S. DIWAN SINGH AS ALLE GED BY THE AO. 4. TAT THE STATEMENT OF SH. KARANVIR VERMA WAS RECO RDED BY THE INCOME TAX INVESTIGATION WING IN WHICH KARANVIR VER MA HAS STATED THAT HE HAS NOT PURCHASED ANY SHARE IN THE A BOVE SAID PROPERTY. THE ABOVE SAID STATEMENT IS ABSOLUTE LY CORRECT AND NO PARTICULARS HAVE BEEN CONCEALED THEREIN. 5. FURTHER THE PHOTOCOPY OF BENAMA OF SAID PROPERTY WAS PRODUCED BY THE INCOME TAX INVESTIGATION WING BEFOR E KARANVIR VERMA AND THERE WERE NO SIGNATURE OF KARAN VIR VERMA ON THE SAID AGREEMENT. 6. THAT THE AO HAD WRONGLY MADE ADDITIONS OF RS.16, 09,000/- ON THE BASIS OF A PHOTO COPY OF CONVEYANCE DEED EXE CUTED WITHOUT THE KNOWLEDGE OF SH. KARANVIR VERMA AND WIT HOUT SIGNATURE OF SH. KARANVIR VERMA. 7. THAT THE AO HAS PASSED THE ORDER WITHOUT UNDERG OING THE FACTS OF CASE AND SUBMISSIONS MADE BY ASSESSEE. 8. THAT LD. OFFICER HAS NOT PLACED ANY EVIDENCE ON THE FILE EXCEPT THE SAID PHOTOCOPY OF BENAMA NOT SIGNED BY S H. KARANVIR VERMA, WHICH CAN LEAD TO CONCLUSION THAT A SSESSEE HAS PURCHASED OR SOLD ANY PROPERTY;. 2. THE ASSESSEE HAS ALSO TAKEN THE FOLLOWING ADDITI ONAL GROUND: THAT THE ISSUANCE OF NOTICE U/S 148 IS ILLEGAL, IN VALID AND VOID ABINITIO AS THERE WAS NO SATISFACTION OF MIND BY THE AO WHILE REOPENING THE CASE. THE CASE HAS BEEN REOPENE D ON THE BASIS OF BORROWED SATISFACTION WHICH IS NOT PERMISS IBLE UNDER THE LAW. AS SUCH, THE ISSUANCE OF NOTICE IS ILLEGAL , INVALID AND VOID ABINITIO AND THE SAME IS LIABLE TO BE CANCELLE D. 3. THE ADDITIONAL GROUND IS ADMITTED, AS IT IS A LE GAL GROUND. 4. THE LD. COUNSEL FOR THE ASSESSEE, ADDRESSING THE ADDITIONAL GROUND SUBMITTED THAT THE ISSUANCE OF NOTICE U/S 148 OF TH E I.T. ACT IS ILLEGAL, INVALID AND VOID AB INITIO, AS THERE WAS NO SATISFA CTION OF MIND BY THE AO ITA NO.352(ASR)/2014 AY:2005-06 3 WHILE REOPENING THE CASE. HE FURTHER STATED THAT TH E CASE HAS BEEN REOPENED ON THE BASIS OF BORROWED SATISFACTION, WHI CH IS NOT PERMISSIBLE UNDER THE LAW. HE PLEADED THAT THE ISSUANCE OF NOTI CE IS ILLEGAL, INVALID AND VOID AB INITIO AND THE SAME IS LIABLE TO BE CAN CELLED. 5. ON THE OTHER HAND, THE LD. DR HAS CONTENDED THAT AS PER THE REASONS RECORDED FOR REOPENING THE COMPLETED ASSESS MENT OF THE ASSESSEE, THERE WAS INFORMATION WITH THE DEPARTMENT THAT THE ASSESSEE HAD PURCHASED 4/20 SHARE IN 42 KANALS 18 MARLAS LA ND FOR RS.16,09,000/- FROM ONE SH. DIWAN SINGH S/O SH. BH AGWAN SINGH; THAT SINCE THE INVESTMENT REMAINED UNEXPLAINED, THE AO R ECORDED THE REASONS FOR ESCAPEMENT OF INCOME AND REOPENED THE COMPLETED ASSESSMENT OF THE ASSESSEE; AND THAT THIS IS VERY WELL IN ACCORDANCE WITH LAW. 6. I HAVE HEARD THE PARTIES ON THIS ISSUE AND HAVE PERUSED THE MATERIAL WITH REGARD THERETO. AT PAGE 2 OF THE ASSE SSMENT, AN EXTRACT FROM THE REASONS RECORDED FOR REOPENING THE ASSESSM ENT HAS BEEN REPRODUCED, AS FOLLOWS: AS PER THE INFORMATION AVAILABLE WITH THE DEPARTME NT, WHICH WAS RECEIVED FROM DDI(INV.-II), AMRITSAR, VIDE HIS LETT ER NO. 1868 DATED 23.02.2012 THAT SH. KARANVIR VERMA, S/O SH. DARBARI LAL, R/O 55- GREEN AVENUE, AMRITSAR HAS PURCHASED 4/20 SHARES O F LAND FOR RS.16,09,000/- FROM SH. DIWAN SINGH S/O SH. BHAGWAN SINGH MEASURING LAND 42 KANAL 18 MARLAS (22000 GAJ) TO FO UR PERSONS FOR RS.80,45,000/-. THE 4/20 SHARE COMES TO RS.16,09,00 0/- IN THE NAME OF SH. KARANVIR VERMA, S/O SH. DARBARI LAL. R/ O 55-GREEN ITA NO.352(ASR)/2014 AY:2005-06 4 AVENUE, AMRITSAR. THEREFORE, THE INVESTMENT FOR THE PURCHASE OF LAND AS THE AGREEMENT DATED 30.04.2004 REMAINED UNEXPLAI NED. ASSESSEE HAS NOT FILED ANY RETURN FOR THE PERIOD FR OM 1.4.2004 TO 31.3.2005 RELEVANT TO THE AY 2005-06. AS ADMITTED B Y THE ASSESSEE BEFORE THE DDI (INV.-II). THE ASSESSEE ALLOTTED PA N FOR OPERATING BANK ACCOUNT ONLY. I HAVE GONE THROUGH THE FACTS NA RRATED IN THE AGREEMENT DEED AS WELL AS THE STATEMENT OF THE ASSE SSEE FILED BEFORE THE DDI (INV-II), AMRITSAR. I AM OF THE CONS IDERED VIEW AND HAVE, THEREFORE, REASONS TO BELIEVE THAT INCOME TO THE EXTENT OF RS.16,09,000/- ESCAPED ASSESSMENT FOR THE A.Y. 200 5-06 WITHIN THE MEANING OF SECTION 147 OF THE I.T. ACT, 1961 AN D ALSO ANY OTHER INCOME CHARGEABLE TO TAX IN RESPECT OF WHICH ASSESS EE IS ASSESSABLE, WHICH HAS ESCAPED ASSESSMENT. 7. THUS, AS AVAILABLE FROM THE REASONS THEMSELVES, THE REOPENING IS BASED ON INFORMATION RECEIVED FROM DDI(INV-II), AMR ITSAR VIDE LETTER NO.1868 DATED 23.03.2012 REGARDING ALLEGED PURCHAS E OF LAND BY THE ASSESSEE, ALONGWITH OTHER PERSONS. NO INDEPENDENT E NQUIRY WAS CONDUCTED BY THE AO. 8. THIS IS ALSO VERY CLEAR FROM PARA 2 OF THE ASSES SMENT ORDER, WHICH READS AS UNDER: 02. BRIEF FACTS OF THE CASE ARE THAT ENQUIRIES WER E MADE BY THE INVESTIGATION WING OF THE DEPARTMENT, AMRITSAR REGA RDING PURCHASE OF A PROPERTY MEASURING 42 KANALS 18 MARLAS BEARING KHASRA NO.395(9-2) 387 (5-16) 6594/3882(2-4) 397(8-2) 402( 9-16) 398 (7- 18) FOR A SUM OF RS.80,45,000/- BY SHRI SUKHCHAIN S INGH S/O SH. GURNAM SINGH, RESIDENT OF JANDIALA GURU, DISTT. AMR ITSAR (SHARE 3/20), SHRI SOM NATH S/O SH. DARSHAN LAL, RESIDENT OF FATEHGARH CHURIAN, DISTT. GURDASPUR AND SH. SWEEKAR S/O SH. O NKAR NATH RESIDENT OF CHHEHARTA, TEHSIL AMRISAR (BOTH 13/20 S HARE), SH. KARANVIR VERMA S/O SH. D.L. VERMA, RESIDENT OF 2889 /12, KATRA SHER SINGH, AMRITSAR ( 4/20 SHARE). THE CONVEYANCE DEED WAS EXECUTED ON 30.04.2004. A COPY OF THE DEED IS AVAIL ABLE ON RECORD. ON THE BASIS OF ENQUIRY REPORT OF THE INVESTIGATION WING, PROCEEDINGS IN THIS CASE WERE STARTED U/S 147 AFTER RECORDING T HE REASONS BY THEM INCOME TAX OFFICER, WARD-5(2), AMRITSAR AND BY OBTAINING NECESSARY APPROVAL OF THE ADDL. COMMISSIONER OF INC OME TAX, RANGE-V, AMRITSAR, AS RECEIVED VIDE HER OFFICE LETT ER NO.8685 DATED 12.03.2012 ITA NO.352(ASR)/2014 AY:2005-06 5 9. FURTHER, PARA 4 OF THE IMPUGNED ORDER ALSO STAT ES AS UNDER: ON THE BASIS OF ENQUIRY REPORT OF THE INVESTIGATIO N WING, PROCEEDINGS IN THIS CASE WERE STARTED U/S 147 AFTER RECORDING THE REASONS BY THEN INCOME TAX OFFICER, WARD-5(2), AMRI TSAR. 10. IN CIT VS. SFIL STOCK BROKING LTD., 325 ITR 2 85), THE HONBLE DELHI HIGH COURT HAS HELD TO THE EFFECT THAT WHERE IT IS NOT DISCERNIBLE FROM THE REASONS THAT THE AO HAD INDEPENDENTLY APP LIED HIS MIND TO THE INFORMATION AVAILABLE OR THAT THE AO HAD INDEPENDEN TLY ARRIVED AT A BELIEF ON THE BASIS OF THE MATERIAL BEFORE HIM THAT INCOME HAD ESCAPED ASSESSMENT, PROCEEDINGS U/S 147/148 OF THE ACT ARE LIABLE TO QUASHED. NO DECISION TO THE CONTRARY HAS BEEN CITED BEFORE T HIS BENCH. 11. IN THE PRESENT CASE, AS IN CIT VS. SFIL STOCK BROKING LTD., (SUPRA), THE SO-CALLED REASONS RECORDED FOR REOPENING THE AS SESSMENT DO NOT EVINCE ANY INDEPENDENT APPLICATION OF MIND BY THE A O TO THE MATERIAL BEFORE HIM, I.E., THE INFORMATION FROM THE INVESTIG ATION WING, MUCH LESS ANY INDEPENDENT ARRIVAL BY THE AO, AT A BELIEF ON T HE BASIS OF SUCH MATERIAL BEFORE HIM, THAT INCOME HAD ESCAPED ASSES SMENT. IN FACT, THE ASSESSMENT ORDER AND EVEN THE IMPUGNED ORDER ENDORS E THIS FACT, AS NOTICED HEREINABOVE. 12. THEREFORE, THE ASSESSEES GRIEVANCE BY WAY OF THE ADDITIONAL GROUND IS JUSTIFIED AND IT IS ACCEPTED AS SUCH. ACC ORDINGLY, THE VERY ASSUMPTION OF JURISDICTION BY THE AO U/S 147/148 O F THE ACT, AND THE ITA NO.352(ASR)/2014 AY:2005-06 6 ENTIRE REASSESSMENT PROCEEDINGS, CULMINATING IN THE IMPUGNED ORDER ARE QUASHED. 13. FOR THE ABOVE, NOTHING FURTHER SURVIVES FOR ADJ UDICATION. 14. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 18/05/ 2016. SD/- (A.D. JAIN) JUDICIAL MEMBER DATED: 18/05/2016 COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE: 2. THE 3. THE CIT(A) 4. THE CIT 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.