KESHAB CHANDRA JAIN, NOIDA V. ITO, WARD- 2(1), NOIDA

ITA 4535/DEL/2017

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 8414 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 4 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-11-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2009-2010
• Appeal Filed On: 09-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: LALITHA KRISHNAMURTHY
• Keywords: Sale consideration of property below Jantri Value; Additional evidence; Non compliance
• Section: 147; 68; 148; 50C; 142(1); 69A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ( Delhi Bench “F”, NEW DELHI) (Through Video Conferencing) BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER Dr. B.R.R. KUMAR , ACCOUNTANT MEMBER ITA No. 4535/Del./2017, A.Y. : 2009-10 Sh. Keshab Chandra Jain H. No. 246, Sector 15A, Noida, Gautam Budh Nagar, Uttar Pradesh- 201301 Vs The Income Tax Officer, Ward 2(1) Noida (APPELLANT) (RESPONDENT) (PAN : ABUPJ6333Q) Assessee by : Smt. Lalitha Krishnamurthy, Adv., Ms. Himani Jain, CA Revenue by : Ms. Shirumi Bansal, Sr. DR Date of Hearing: 15.09.2021 Date of Pronouncement: 16.11.2021 O R D E R PER B.R.R.KUMAR, ACCOUNTANT MEMBER : This appeal has been filed by the assessee against the order of the ld. CIT(A)-1, Noida, dated 25.04.2017. 2. In this case, Notice u/s 148 of the I.T.Act, 1961 was issued on 29.03.2016 after recording due reasons. Consequently Notice u/s 142(1) was issued on 17/06/2016 along with questionnaire. But the asessee has failed to make any compliance. 3. In this case, as per the AO an information was available on record, that the assessee has purchased Flat No. T3- 503 Parasvnath Presige-II, Sector-93A, Noida ITA No.4535/Del/2017 Sh. Keshab Chandra Jain 2 Gautambudhnagar for Rs. 52,30,321/- and circle rate of the same was Rs. 71,30,000/- on 29.12.2009. A verification letter dated 15.10.2015 was issued through speed post to verify the source of purchase of the said immovable property. In compliance of this letter, the assessee could not furnish any reply to substantiate source of payment for purchase of the said immovable property including stamp duty during the F.Y. 2008-09. Since, the assessee could not furnish any reply of the same, action under section 147 of the IT Act, 1961 was initiated and accordingly notice u/s 148 was issued on 29.03.2016 for which there was no compliance. 4. Owing to the non compliance to the notices issued, the assessement was completed by the Assessing Officer assessing the income of the Assessee at Rs.55,86,921. Aggrieved the assessee filed the appeal before the Ld. CIT(A) who held that, though the amounts have been received from the HUF of the assessee, the property was registered in the name of the assessee and hence the assessee is liable to be assessed with respect to the property purchased. Ld. CIT(A) also directed that the matter may be referred to the concerned AO of the HUF for consideration of under valuation of the property. 5. Aggrieved the assessee filed appeal before us. The assessee has taken up the ground of issue of notice u/s 148 and the service thereof. The assessee aggrieved that the assessing officer has failed to apply his mind while issuing notice u/s 148. ITA No.4535/Del/2017 Sh. Keshab Chandra Jain 3 6. On going to the order of the Ld. CIT(A), we find that this issue has been adjudicated very lucidly. The relevant portion of the order of Ld. CIT(A is as under :- • Perusal of the copy of the transfer deed relied upon by the appellant shows that the subject property was purchased by Mr. K.C. Jain and not by K.C, Jain, HUF. Under the provisions of the I.T. Act, 1961 an individual and a HUF are different persons altogether. Purchase made by a person being individual will not amount to the purchase made by another person being HUF. While the K.C.Jain HUF can always make payment on behalf of K.C. Jain, individual, the property registered in the name of K .C. Jain individual will not amount to property purchased by the K.C. Jain HUF. The appellant has brought no material on the record to show that the K.C. Jain HUF has advanced money under one arrangement or another to the K.C. Jain individual. The Balance Sheet of the K.C. Jain & Sons HUF as on 31/03/2009 as filed by the appellant show an investment in purchase of immovable property from the transferor builder for Rs, 57,20,031/- and although, the number of the flat is given as T-3-503 which is the same as the number of the flat mentioned in the transfer deed it cannot be accepted that the fixed asset as shown in the balance sheet of K.C. Jain & Sons HUF is the same as the flat purchased by the appellant ITA No.4535/Del/2017 Sh. Keshab Chandra Jain 4 without further corroborative evidence which has not been brought by the appellant on the record. • The Balance Sheet of K.C. Jain & Sons HUF however, shows no money advanced to the K.C. Jain individual. No evidence has been led by tie appellant to show that the appellant was filing its return of income and has brought the investment made by the appellant to the notice of the concerned A.O. in the material return of income. • Further It is seen that the payments made to the transferor builder by the K.C. Jain & Sons HUF were made by raising transfers from the accounts of Smt. Satya Jain, Shri K.C. Jain, Shri Sarat Jain, Sh. Atul Jain, Sh. Vinayak Jain, Miss Sonai Jain and Sh. Karan Jain. The money borrowed from these individuals merely discloses the money trail and not the capacity to advance money or the genuineness of the transaction. Nothing on the record has been brought by the appellant to show that these individuals from whom the money has been taken by K.C. Jain & Sons HUF was not hit by the mischief of section 68 or section 69Aof I.T Act, 1961. • In view of the above, and after considering the material brought on record by the appellant it is held that the property under consideration was purchased by K.C. Jain individual and not the K.C. Jain & Sons HUF. There is nothing on record to show that the ITA No.4535/Del/2017 Sh. Keshab Chandra Jain 5 • In the course of the appellate proceedings the Id. counsel appearing for the appellant requested for the leave of this office under rule 46A of Income Tax Rules 1962 for leading evidence which was not there before the Id. A.O. Perusal of the impugned assessment order shows that the ld. A.O had the complete information about the transaction in so much as there was information before the ld. A.O. about foe correct location of the purchased property as well as the identity of the seller of the property. The ld. A.O. could have easily obtained the copy of the transfer deed either from the office of the Registrar or from the builder concerned. The notice u/s. 148 was issued on 29/03/2016 and the assessment was completed on 28/10/2016. Therefore the matter remained on the board of the ld. A.O. for about seven months. However, it is seen that ld. A.O. appears to have made no attempt to obtain the copy of the transfer deed. The transfer deed was material evidence and should have been taken on record by the ld. A.0. and if the appellant was not responding to the notices sent by the ld. A.O. the ld. A.O. was in no way helpless or decapicitated and had its authority in law to collect the same from other sources where the copies thereof was available. A copy of the said transfer deed has in any case been filed in the appellate proceeding and shows that foe appellant has disclosed its address in the said transfer deed ITA No.4535/Del/2017 Sh. Keshab Chandra Jain 6 as K.C, Jain s/o Shri Nanak Chand Jain r/o House No. 246, Sector 15A, Noida, UR. However, perusal of the impugned assessment order shows that the ld. A.O. has corresponded with the appellant at the address of the fiat purchased and no attempt appears to have been made by the ld. A.O. to locate and interact with the appellant at the address given by foe appellant in the transfer deed. There is no denying that being the property of the appellant the newly purchased flat could be an address of the appellant but the fact cannot be ignored that the appellant might not have received the letters and notices sent by the ld. A.O. on that address as he may not be regularly residing. • In view of these litigating circumstances, foe request of the ld. counsel for the appellant for grant of leave under rule 46A is allowed . The appellant is permitted to lead fresh and additional evidence which was not before the ld. A.O. • The appellant has claimed that K.C. Jain & Sons, HUF is an existing taxpayer under the PAN AAFHK0553F and has been filing its return of income with the Income Tax Office, Noida and for the A.Y. 2009-10 it has filed its return of income in the office of ITO, Ward-2, Noida on 22/03/2010. A copy of the duly acknowledged copy of the return of income received vide the RR Register docket No.0302019052 is placed on record and seems to be in order. ITA No.4535/Del/2017 Sh. Keshab Chandra Jain 7 • The appellant has further claimed that the subject property was purchased out of the funds of the K.C. Jain, HUF and the money trail is duly reflected in the bank account of the payment made by the K.C. Jain & Sons HUF was for the same property which was registered in the name of the K.C. Jain individual. The primary onus cast upon the K.C. Jain and Sons HUF under the provisions of section 66 and section 69A has not been discharged by the K.C. Jain & Sons HUF in the present proceedings said therefore the liability of the K.C. Jain & Sons HUF under the provisions of section 68 and section 69A of IT. Act 1961 remains against the K.C. Jain & Sons HUF. • That being the case it is held that the appellant has not been able to explain the investment made by the appellant in the purchase of the property • The ld. A.O. has committed serious errors in framing the impugned assessment order in this case. Being fully aware that a property valued at Rs. 71,30,000/- was transferred for Rs. 52,30,321/- by the transferor builder, no attempt was made by the ld. A.O. to refer the matter to the concerned A.O. for assumption of jurisdiction under section 50C of I.T. Act, 1961. As the appellant has paid the stamp duty forRs. 71,30,000/- there remains no dispute that the value of property was accepted between the parties qua the ITA No.4535/Del/2017 Sh. Keshab Chandra Jain 8 transaction before the stamp duty authorities at Rs. 71,30,000/- and therefore, the same property could not have been claimed to be worth Rs. 52,30,321/- at foe same time before the ld. A.O. being another statutory authority unless explained in the manner provided in the law. Because of the errors committed by the Id. A.O. this issue has not been examined as was necessary under the provisions of section 50C of IT. Act, 1961. • The ld. A.O. in the impugned assessment order has pleaded helplessness that the appellant has not disclosed its PAN anywhere and therefore the id. A.O. was not able to make further verifications, The Id. A.O. has fallen in serious error as foe PAN Directory is accessible to the ld. A.O. as well as the range incharge and the PAN of foe appellant could have been easily ascertained from the RCC or even the NCC. The ld. AO seems to have made no attempt to ascertain the same. • The claim of the ld. A.O. that the notice was served through affixture by the ITI at the last known address is also unacceptable as the ld. AO. appears to have made no effort at all to collect the copy of the transfer deed in which the full and correct particulars of the address of foe appellant was disclosed and had the ld. AO. made an effort those details would have become easily available to the Id. A.O. for his further necessary consideration. ITA No.4535/Del/2017 Sh. Keshab Chandra Jain 9 • The ld. A.O. seems to have made no enquiry at all and had framed a very bad assessment order in a very bad manner. 7. From the facts narrated above we find the assessing officer was failed to issue notice u/s 148 to the correct address and also failed to record the correct reasons. Hence, we hereby hold that the Assessment completed by the AO is Void-Abinitio 8. In the result appeal of the assessee is allowed. Order pronounced in open court on this 16 th day of November, 2021. Sd/- Sd/- (AMIT SHUKLA) (Dr. B.R.R.KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER *Binita* Dated : 16 /11/2021 Copy forwarded to: 1.Appellant 2.Respondent 3.CIT 4.CIT(A), New Delhi. 5.CIT(ITAT), New Delhi. AR, ITAT NEW DELHI.