Smt. Krishna, Alwar V. ITO, Ward-Bhiwadi, Alwar, Alwar

ITA 434/JPR/2023

• Counselvise Citation: [2023] 100 COUNSELVISE.COM (IT) 6310 (ITAT-JAIPUR)
• Duration Of Justice: 3 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-10-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 04-10-2023
• Assessment Year: 2010-2011
• Appeal Filed On: 14-07-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Sale consideration of property below Jantri Value; Gift
• Section: 148; 271(1)(c); 50C; 274; 64

Judgement Text

vk;dj vihyh; vf/kdj.k] t;iqj U;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”SMC” JAIPUR Mk0 ,l- lhrky{eh] U;kf;d lnL; ,oa Jh jkBksM deys'k t;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ ITA. No. 434 & 435/JP/2023 fu/kZkj.k o"kZ@Assessment Years : 2010-11 Smt. Krishna W/o Sh. Krishan Kumar, Village Banbeerpur, Khazuri Bass, Alwar cuke Vs. ITO, Ward-Bhiwadi, Alwar LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: DAGPK 3541 F vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri P. C. Parwal (FCA.) jktLo dh vksj ls@ Revenue by : Smt Monisha Choudhary (Addl. CIT) a lquokbZ dh rkjh[k@ Date of Hearing : 05/10/2023 mn?kks"k.kk dh rkjh[k@Date of Pronouncement : 19/10/2023 vkns'k@ ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM These two appeals are filed by assessee and is arising out of the order of the National Faceless Appeal Centre, Delhi dated 18/05/2023 [here in after (ld. CIT(A)/NFAC)] for assessment year 2010-11 which in turn arise from the order dated 21.06.2018 & 15.12.2017 passed under section 271(1)(c) of the Income Tax Act, by the ITO, Ward-Bhiwadi, Alwar. 2. In ITA No. 434/JP/2023, the assessee has marched this ITA Nos. 434 & 435/JP/2023 Smt. Krishna vs. ITO 2 appeal on the following grounds:- “1. Under the facts & circumstances of the case, the order passed u/s 271(1)(c) is illegal & bad in law as the same has been passed without mentioning the specific charge. 2. The Ld. CIT(A), NFAC has erred on facts and in confirming the levy of penalty of Rs. 2,10,426/- u/s 271(1)(c) of the IT. Act, 1961. 3. The appellant craves to alter, amend & modify any ground of appeal. 4. Necessary cost be awarded to the assessee.” 3. In ITA No. 435/JP/2023, the assessee has marched this appeal on the following grounds:- “1. The Ld. CIT(A), NFAC has erred on facts and in law in confirming the addition of Rs. 10,10,800/- u/s 69 of the Act on account of unexplained investment in purchase of land without considering the fact that the land was purchased by the husband of assessee in her name and thus when assessee has not made any investment, no addition can be made in her hands. 2. The ld. CIT(A), NFAC has erred on facts and in law in confirming the addition of Rs. 10,10,800/- u/s 69 of the Act ignoring that source of such investment is out of the sale proceeds of agricultural land which was sold by the various family members for Rs. 75 lacs but the sale deed was executed for Rs. 38 lacs and considering the sale consideration to be of Rs. 75 lacs, the amount received by the husband of assessee is more than the investment of Rs. 20 lacs in purchase of land and thus the source of investment is fully explained. 3. The appellant craves to alter, amend & modify any ground of appeal. 4. Necessary cost be awarded to be the assessee.” ITA Nos. 434 & 435/JP/2023 Smt. Krishna vs. ITO 3 4. Brief facts of the case is that in this case, as per information received for Non PAN AIR data in respect of property transaction, assessee has purchased immovable properties jointly with Smt. Santra w/o Sh. Satbeer and Smt. Krishana w/o Sh. Sarjeet, situated at Village-Banbirpur, Tehsil-Tijara, Distt.-Alwar for Rs.60,00,000/- on 08.09.2009 in the F.Y. 2009-10 relevant to A.Y. 2010-11. Therefore, the assessee has paid her 1/3rd share of Rs. 20,00,000/- for purchase of property. On verification of record, it is seen that the assessee has not filed her return of income. Therefore, after recording valid reasons in writing to the satisfaction by the assessing officer that income of assessee to the extent of Rs.20,00,000/- chargeable to tax has escaped assessment and after obtaining approval u/s 151(1) from the Commissioner of Income-tax, Alwar the proceeding was initiated against the assessee. 4.1 During the proceedings, A/R of the assessee was asked to furnish the requisite details. On perusal of details and reply filed by the AR of the assessee, the ld. AO noted that the Assessee claimed that her father-in-law Shri Bharat has invested Rs. 14,05,658/- out of sale consideration received by Shri Bharat ITA Nos. 434 & 435/JP/2023 Smt. Krishna vs. ITO 4 against sale of land. It was found from the details filed that registry of the land sold was executed for Rs. 38,00,000/- on 08.09.2009 and share of Father-in-law of the assessee is comes to Rs. 7,12,200/- only. Hence, the source of amount of investment made by Father-in-law of the assessee is acceptable to the extent of Rs. 7,12,200/- only. The assessee also claimed that Shri Hari Singh gifted Rs. 4,68,553/- to his Husband out of sale consideration received by Shri Hari Singh against sale of land. The total sale consideration as per Agreement value was received by him at Rs. 14,05,658/- which was gifted by Shri Hari Singh to his three nephews namely Shri Satbeer, Shri Sarjeet and Shri Krishan i.e. Husband of assessee. It was found from the details filed that registry of the land sold was executed for Rs. 38,00,000/- on 08.09.2009 and share of Shri Hari Singh comes to Rs. 7,12,200/- only. Thus, amount of gift received by husband of assessee from Shri Hari Singh comes to Rs. 2,37,400/- [712200/3]. Hence, amount of gift received by husband of assessee from Shri Hari Singh is acceptable for Rs. 2,37,400/- only. Assessee also claimed that Smt. Mishro Devi gifted Rs. 78,157/- to his Husband out of sale consideration received by Smt. Mishro Devi against sale of land. The total sale consideration as per Agreement value was received ITA Nos. 434 & 435/JP/2023 Smt. Krishna vs. ITO 5 by her at Rs. 2,34,473/- which was gifted by Smt. Mishro Devi to his three nephews namely Shri Satbeer, Shri Sarjeet and Shri Krishan i.e. Husband of assessee. It was found from the details filed that registry of the land sold was executed for Rs. 38,00,000/- on 08.09.2009 and share of Smt. Mishro Devi is comes to Rs. 1,18,800/- only. Thus, amount of gift received by husband of assessee from Smt. Mishro Devi comes to Rs. 39,600/- [118800/3). Hence, amount of gift received by husband of assessee from Smt. Mishro Devi is acceptable for Rs. 39,600/- only. Based on these set of facts ld. AO held that assessee and her husband has available amount for investment at Rs. 9,89,200/- [712200+237400+39600] Assessee has failed to file justification for remaining amount of investment i.e. Rs. 10,10,800/-[2000000-989200]. Hence, an addition of Rs. 10,10,800/- was made to the total income of assessee on account of unexplained investment made by assessee. 5. Aggrieved by the order of the assessment the assessee preferred an appeal before the Commissioner of Income Tax. A propose to the grounds so raised the relevant finding of the ld. CIT(A)/NFAC is reiterated here in below: ITA Nos. 434 & 435/JP/2023 Smt. Krishna vs. ITO 6 “5.3 I have carefully considered the facts of the case, assessment order passed by the AO and find that during the course of assessment proceedings, the appellant has failed to furnish the source of investment of Rs. 10,10,800/- out of Rs. 20 lakh invested for purchase of immovable property. Further, the appellant has failed to furnish any reply during the appellate proceedings. Therefore, the addition of Rs. 10,10,800/- on account of unexplained investment is confirmed.” 6. Since the assessee has not received any favor from the quantum appeal the assessee preferred an appeal in ITA No. 434/JP/2023, in support of the grounds so raised the ld. AR of the assessee, he has relied upon the following written submission: 1. The assessee in response to notice u/s 148 filed the return declaring total income of Rs.190/- but the AO made addition of Rs.10,10,800/- on account of unexplained investment in agricultural land. On the addition so made, penalty proceedings u/s 271(1)(c) was initiated for concealing & furnishing inaccurate particulars of income. 2. The AO passed the penalty order on 21.06.2018 stating that assessee has not filed any explanation or detail and thus she committed default by concealing/ (furnishing) inaccurate particulars of income. Accordingly he imposed penalty of Rs.2,10,426/- being 100% of the tax sought to be evaded. 3. The Ld. CIT(A) confirmed the levy of penalty on the ground that assessee failed to furnish any reply during the appellate proceedings. Submission:- 1. It may be noted that AO initiated the penalty proceedings u/s 271(1)(c) for concealing & furnishing inaccurate particulars of income and also imposed the penalty by holding that assessee has concealed/ (furnished) inaccurate particulars of income. Thus the initiation of penalty proceedings as also the penalty order is not specific as to the charge for which penalty is levied, i.e. whether for concealment of income or for furnishing inaccurate particulars of income. Hence, the penalty so levied is illegal & bad in law. For this purpose reliance is placed on the following cases:- ITA Nos. 434 & 435/JP/2023 Smt. Krishna vs. ITO 7 • CIT Vs. Jyoti Ltd. (2013) 216 Taxman 64 (Guj.) (HC) (Magz.) AO disallowed assessee’s claim of payment of commission. Such disallowance was made on the ground that assessee could not even obtain confirmation from commission recipient. AO also passed a penalty order u/s 271(1)(c). Tribunal set aside penalty order holding that in order of penalty AO had not given a clear finding whether penalty was imposed on assessee for having concealed particulars of income or having furnished inaccurate particulars of income. HC upheld the order of Tribunal. • Ms. Sandhya Gadkari Sharma Vs. DCIT (2016) 142 DTR 129 (Mum.) (Trib.) It is incumbent upon the AO to specify whether the penalty u/s 271(1)(c) is being levied for concealment of income or for furnishing inaccurate particulars of income. In the absence of specific charge, levy of penalty would be bad in law. In the instant case, AO initiated the proceedings u/s 271(1)(c) without making out any particular charge. Penalty has been levied for both the charges by concluding that the assessee had furnished inaccurate particulars of her income and concealed her income on various issues. Penalty order does not state for what default penalty is levied. Satisfaction of the AO about the concealment of particulars of income or furnishing of inaccurate particulars of such income is essential before levying any penalty u/s 271(1)(c). In this case it is apparent that the AO was not satisfied about the concealment of particulars of income or furnishing of inaccurate particulars of income on the part of the assessee. Thus, impugned penalty is deleted. • Kanhaiyalal D. Jain Vs. ACIT (2017) 150 DTR 1 (Pune) (Trib.) AO must record a satisfaction whether assessee was guilty of concealment or furnishing inaccurate particulars of income. Present was a clear case of concealment. However, AO was not specific about one of these two aspects and issue notice for both the defaults. Accordingly, where AO in the course of assessment, in notice u/s 274 and also in order levying penalty being of the view that assessee was guilty of concealment as also of furnishing inaccurate of income, penalty levied u/s 271(1)(c) could not be sustained. • Bhushan Lal Sawhney Vs. DCIT (2021) 190 ITD 225 (Del.) (Trib.) Where prior to levy of penalty in case of assessee, AO had not mentioned therein specifically for which limb of section 271(1)(c) penalty proceedings has been initiated, no penalty could have been levied against assessee. ITA Nos. 434 & 435/JP/2023 Smt. Krishna vs. ITO 8 In view of above, penalty levied u/s 271(1)(c) be directed to be deleted. 2. On merit it is submitted that the quantum appeal is also fixed for hearing along with the penalty appeal before the Hon’ble Bench where assessee has explained the source of investment in agricultural land. In case the Hon’ble ITAT do not accept the submission of assessee on legality, then penalty appeal be kept pending till the disposal of quantum appeal.” 7. The ld. AR appearing on behalf of the assessee submitted a brief submission as reproduced herein below and also filed the paper book containing following evidences: - S. No. Particulars Pg No. Filed before AO/CIT(A) 1 Copy of acknowledgement of return along with computation of total income 1-2 Both 2 Copy of sale agreement dt. 26.05.2009 3-5 Both 3 Copy of affidavit of Sh. Bharat Singh confirming that agreement for sale of agricultural land dt. 26.05.2009 was for Rs. 75 lacs 6 Both 4 Copy of sale deed dt. 07.09.2009 for sale for said agricultural land for Rs. 38 lacs 7-14 Both 5 Copy of sale deed of agricultural land purchased on 08.09.2009 jointly with Smt. Santra and Smt. Krishna, wife of Sarjeet for Rs. 60 lacs. 15-20 Both 6 Copy of assessment order dt. 06.12.2017 of Sh. Hari Singh 21-24 Both 7 Copy of certificate of Sarpanch cerifying that the land sold was 14 kms from the municipal limit. 25 Both ITA Nos. 434 & 435/JP/2023 Smt. Krishna vs. ITO 9 8. We note from the order of ld. CIT(A) that the assessee was given four different opportunities as per details summarized as under:- Sr. Date of issue of notice of hearing Date of hearing Fixed Whether attended or not Reasons for non- attendance 1 13.03.2020 24.03.2020 No compliance - 2 13.01.2021 28.01.2021 No compliance - 3 13.04.2023 27.04.2023 No compliance - 4 02.05.2023 17.05.2023 No compliance - 9. Per contra, the ld. DR has objected to the prayer of the assessee and relied upon the finding of ld. CIT(A) who has based on the merits of the case and available information on the record decided the case of the assessee. 10. We have heard the rival contentions and perused the material placed on record. The bench noted that in this case, the addition has been made considering unexplained cash deposit whereas the reopening is made for purchase of land. Whereas before us the ld. AR of the assessee submitted that in fact the relative of the assessee has sold the property and the proceeds of the sale is ITA Nos. 434 & 435/JP/2023 Smt. Krishna vs. ITO 10 deposited into the bank account and thereby the source of the purchase of the property was explained. 10.1 The written submission and evidence placed before us that the consideration of the property sold was Rs. 75 lacs as worked as under: Total land area 1.76 Hectare Share of assessee’s father in law with others 26/80 Land area sold 0.572 Hectare 1 Hectare 3.75 Bigha So 0.572 Hectare 2.145 Bigha Rate per Bigha Rs. 35 lacs Value of 2.145 Bigha Rs. 75,07,500/- Rounded off to Rs. 75 lacs Whereas the document was executed for 38 lacs and the ld. AO has given the relief considering the consideration of the property at 38 Lacs only. Before us the ld. AR of the assessee submitted that in the case of Hari Singh the consideration of 38 lacs was considered as 99,22,246/- being the value as per provision of section 50C of the Act. We note that working given by the assessee and aspect of valued adopted for 50C were not recorded in the order of the ld. AO. The order of the ld. CIT(A) is ex-parte. ITA Nos. 434 & 435/JP/2023 Smt. Krishna vs. ITO 11 Considering these peculiar facts of the case as argued by the ld. AR of the assessee that if the assessee given one chance to explain the merits of the case, then there is a chance of relief to the assessee on merits. Thus, we direct the ld. AO hear the merits of the case for the addition made, consider the corroborative evidence relied upon by ld. AR of the assessee and direct to hear this aspect of the case as argued before us. At the same time, the assessee is directed to represent and present all the facts before the ld. AO and should not ask for adjournment of trivial grounds. At this stage, we remand back the matter without commenting upon the merits of the case and ld. AO is directed to pass an appropriate order in accordance with law. 10.2 Since we have restored the matter of the quantum addition to file of the AO the appeal in relation to the penalty become infructuous. At this stage, the AO may decide the issue after completion of the assessment. Based on these observations, the appeals filed by the assessee are allowed for statistical purposes. In the result, both appeal of the assessee in ITA No. 434 & 435/JP/2023 are allowed for statistical purposes. ITA Nos. 434 & 435/JP/2023 Smt. Krishna vs. ITO 12 Order pronounced in the open Court on 19/10/2023 Sd/- Sd/- ¼ Mk0 ,l- lhrky{eh ½ ¼ jkBksM deys'k t;UrHkkbZ ½ (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) U;kf;d lnL;@Judcial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 19/10/2023 *Ganesh Kr, PS vkns'k dh izfrfyfi vxzsf’kr@Copy of the order forwarded to: 1. vihykFkhZ@The Appellant- Smt. Krishna, Alwar 2. izR;FkhZ@ The Respondent- ITO, Ward-Bhiwadi, Alwar 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 Nos. 434 & 435/JP/2023} vkns'kkuqlkj@ By order lgk;d iathdkj@Asst. Registrar