Sh. Arun Mundray Saini, Chandigarh V. Dy. Director of Income Tax, Chandigarh

ITA 389/CHANDI/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5054 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 28-03-2018
• Assessment Year: 2008-2009
• Appeal Filed On: 02-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GULSHAN RAJ
• Assessee Lawyers: SUDHIR SEGHAL
• Keywords: Tangible material; Valuation report; Reason to believe
• Section: 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES A, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER & MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO. 389/CHD/2017 ASSESSMENT YEAR: 2008-09 SH. ARUN MUNDRAY SAINI, VS. THE DY.DIRECTOR OF INC OME TAX, SCO 35, IST FLOOR, (INTERNATIONAL TAXATION) SECTOR 28, CHANDIGARH CHANDIGARH PAN NO. AFOPM4956L (APPELLANT) (RESPONDENT) APPELLANT BY : SH. SUDHIR SEGHAL, ADV. RESPONDENT BY : SH. GULSHAN RAJ, CIT- DR DATE OF HEARING : 28.03.2018 DATE OF PRONOUNCEMENT : 28.03.2018 ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEAL S), [HEREINAFTER REFERRED TO AS CIT(A)]-43, NEW DELHI DATED 09.01. 2017. 2. THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF AP PEAL:- 1. THE LD. ASSESSING OFFICER AND WORTHY CIT(A)S ORDERS ARE CONTRARY TO LAW AND FACTS OF THE CASE. 2. THE LD. ASSESSING OFFICER ERRED IN REOPENING THE CASE U/S 148 AS THERE WAS NON INDEPENDENT SATISFACTION OF THE ASSESSING OFFICER FOR FORMING A REASON TO BELIEVE ABOUT THE ESCAPEMENT OF INCOME & WORTHY CIT(A) HAS IGNORED THE SUBMISSIONS OF ITA NO.389/CHD/2017- ARUN MUNDRAY SAINI., CHANDIGARH 2 THE ASSESSEE AND HAD WRONGLY DECIDED THE SAME AGAINST THE ASSESSEE. THERE WAS NO TANGIBLE MATERIAL AVAILABLE ON RECORD TO JUSTIFY REOPENING O F THE ASSESSMENT BEFORE THE LD. ASSESSING OFFICER & WORTHY CIT(A). 3. WITHOUT PREJUDICE TO GROUND NO.2, THE LD. ASSESSING OFFICER GROSSLY ERRED IN REFERRING THE CASE TO DISTT. VALUATION OFFICER (DVO) TO EVALUATE THE VALUE OF ASSETS AS THE ASSESSEE HAD ACTED UPON AND SHOWN NIL CAPITAL GAIN IN HER RETURN OF INCOME BASED ON THE VALUATION REPORT OF THE REGISTERED VALUER. WORTHY CIT(A) HAD IGNORED THE ASSESSEE SUBMISSION AND DECIDED THE MATTER AGAINST THE ASSESSEE. 4. THE INITIATION OF PENALTY U/S 271(1)(C) IS INVALID AND BAD IN LAW WITHOUT RECORDING THE SATISFACTION BY ASSESSING OFFICER REGARDING INACCURATE PARTICULAR OR CONCEALMENT OF INCOME. 3. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE APART FROM CHALLENGING OF THE ADDITION S ON MERITS HAS ALSO TAKEN A LEGAL ISSUE REGARDING VALIDITY OF REOP ENING OF THE ASSESSMENT U/S 147 OF THE ACT. HE HAS FURTHER SUBMI TTED THAT REOPENING IN THIS CASE WAS DONE BY THE DEPARTMENT O N THE BASIS OF VALUATION REPORT OF THE DVO IN RESPECT OF THE PROPE RTY SOLD BY THE ASSESSEE WITH OTHER CO-OWNERS. HE HAS FURTHER RELIE D UPON THE DECISION OF THE CHANDIGARH BENCH OF THE TRIBUNAL IN THE CASE OF ITO VS. MS. MALIKA MUNDREY SAINI , ITA NO. 967/CHD/2017 ORDER DATED 12.11.2017 WHEREIN IN THE CASE OF CO-OWNER OF THE P ROPERTY, WHO HAD ITA NO.389/CHD/2017- ARUN MUNDRAY SAINI., CHANDIGARH 3 SOLD HIS SHARE IN THE PROPERTY IN QUESTION, THROUGH THE SAME TRANSACTIONS. THE TRIBUNAL WHILE RELYING UPON THE D ECISION IN THE CASE OF ANOTHER CO-OWNER NAMELY MS.RAJINDER KUAR VS. AC IT WHILE UPHOLDING THE ORDER OF THE CIT(A) HELD THAT THE RE OPENING OF THE ASSESSMENT WAS BAD IN LAW. HE HAS FURTHER INVITED O UR ATTENTION TO THE DECISION OF THE TRIBUNAL IN THE CASE OF MS. RAJIND ER KAUR VS. ACIT (ITA NO. 765/CHD/2015) WHICH HAS BEEN PLACED AT PAG ES 15 TO 34 OF THE PAPER BOOK WHEREIN THE TRIBUNAL IN THE CASE OF CO-OWNER, WHILE RELYING ON THE DECISION OF THE HON'BLE SUPREME COUR T IN THE CASE OF DHARIYA CONSTRUCTION CO. 328 ITR 515 (SC) HELD THAT THE REOPENING CANNOT BE MADE MERELY ON THE BASIS OF THE VALUATION REPORT OF THE DVO. SINCE THE FACTS ARE IDENTICAL AND RELATING TO THE SAME TRANSACTION OF THE SALE OF PROPERTY, HENCE, RESPECT FULLY FOLLOWING THE ABOVE REFERRED TO DECISIONS OF THE TRIBUNAL IN THE CASE OF CO-OWNERS, WE HOLD THAT THE REOPENING IN THIS CASE WAS ALSO NO T SUSTAINABLE IN THE EYES OF LAW AND THE SAME IS ACCORDINGLY SET ASIDE. CONSEQUENTLY, THE ADDITIONS MADE PURSUANT TO THE REOPENING HAVE LOST THEIR BASIS AND ACCORDINGLY THE SAME ARE ORDERED TO BE DELETED. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS HEREB Y ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT SD/- SD/- (ANNAPURNA GUPTA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 28.03.2018 RKK ITA NO.389/CHD/2017- ARUN MUNDRAY SAINI., CHANDIGARH 4 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR