Smt. Manjula Devi Jain , Pali V. ITO,Ward-2, Pali

ITA 478/JODH/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2211 (ITAT-JODHPUR)
• Duration Of Justice: 1 year(s) 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 17-10-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ABHINAV KOTHARI
• Assessee Lawyers: ABHIMAN Y U SINGH YADAV J
• Keywords: Capital asset; Application of stay; Capital Gains
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI R.C.SHARMA, ACCOUNTANT MEMBER AND SHRI SANDEEP GOSAIN, JUDICIAL MEMBER ITA NO. 478/JODH/2018 (ASSESSMENT YEAR-2013-14) SMT. MANJULA DEVI JAIN 1-35, HOUSING BOARD, PALI. VS INCOME TAX OFFICER, WARD-2, PALI. (APPELLANT) (RESPONDENT) PAN: A AMPJ4848D SA NO. 13/JODH/2019 (ARISING OUT OF ITA NO. 478 /JODH/2018) (ASSESSMENT YEAR-2013-14) SMT. MANJULA DEVI JAIN 1-35, HOUSING BOARD, PALI. VS INCOME TAX OFFICER, WARD-2, PALI. (APPELLANT) (RESPONDENT) PAN: AAMPJ4848D REVENUE BY SHRI AMIT KOTHARI (CA) & SHRI ABHINAV KOTHARI (CA) ASSESSEE BY SHRI ABHIMAN Y U SINGH YADAV (JCIT-DR) DATE OF HEARING 1 8 /03/2020 DATE OF PRONOUNCEMENT 20 /03/2020 O R D E R PER SANDEEP GOSAIN, J.M. THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A GAINST THE ORDER OF LD. CIT(A)-1, JODHPUR DATED 24/09/2018 FOR THE ASSESSMENT YEAR 2013-14, WHEREIN FOLLOWING GROUNDS HAVE BEEN T AKEN: 2 ITA 478/JODH/2018 & SA 13/JODH/2019 MANJULA DEVI JAIN VS ITO 1. A. THE LD. CIT(A) HAS ERRED IN SUSTAINING THE P ART ADDITION OUT OF PROTECTIVE ADDITION MADE BY THE LD. AO ON ACCOUN T OF SALE OF AGRICULTURE LAND AT VILLAGE KHARDA, PALI. B. THE LAND IN QUESTION WAS NOT FALLING WITHIN CAPI TAL ASSETS AND HAVING ACCEPTED FOR PART OF THE LAD, ADDITION SUSTA INED FOR OTHER PART WAS NOT JUSTIFIED. C. THE LD. CIT(A) HAS ERRED IN SUSTAINING THE ADDIT ION ON ACCOUNT OF SALE OF LAND FOR SAMANDAR KHAN ON THE GR OUND THAT THE DETAILS OF HIS ASSESSMENT WAS NOT KNOW. THE ADD ITION SO SUSTAINED IS BAD IN LAW AND BAD ON FACTS. 2. THE LD. CIT(A) HAS ERRED IN SUSTAINING ADDITION OF RS. 2,15,642/- ON ACCOUNT OF INTEREST EXPENDITURE. THE ADDITION SO SUSTAINED IS BAD IN LAW AND BAD ON FACTS. 3. THE LD. CIT(A) HAS ERRED IN SUSTAINING ADDITION OF RS. 2,88,000/- U/S 68. THE ADDITION SO SUSTAINED IS BAD IN LAW AND BAD ON FACTS. 4. THE CHARGING OF INTEREST U/S 234B AND 234C IS BA D IN LAW AND ON FACTS. 5. THE APPELLANT PRAY FOR SUITABLE COSTS. 6. THE APPELLANT CRAVES LIBERTY TO ADD, AMEND, ALTE R AND MODIFY ANY OF THE GROUND OF APPEAL ON OR BEFORE ITS HEARIN G BEFORE YOUR HONOUR. 2. IN GROUND 1 OF THE APPEAL, THE ASSESSEE HAD CHA LLENGED THE PROTECTIVE ADDITION PARTLY SUSTAINED BY THE LD. CIT (A) IN RELATION TO THE SALE OF AGRICULTURE LAND. 3. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND CAR EFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOU ND FROM THE RECORD THAT THE ASSESSEE HAD SOLD TWO PROPERTIES K. NO. 999/321 3 ITA 478/JODH/2018 & SA 13/JODH/2019 MANJULA DEVI JAIN VS ITO KHARDA ROHAT, AGRICULTURE LAND BELONGING TO SAMANDA R KHAN AND K.NO. 998/321 KHARDA ROHAT, AGRICULTURE LAND BELONG ING TO SMT. PRASSAN DEVI. THIS ADDITION WAS MADE ON PROTECTIVE BASIS IN THE HANDS OF THE ASSESSEE. IT WAS OBSERVED THAT THE PAY MENT OF SALE OF THE AGRICULTURE LAND WAS RECEIVED BY THE ASSESSEE A ND THERE ARE CONTRADICTORY STATEMENTS OF THE POWER OF ATTORNEY H OLDERS AND THE ASSESSEE. THE TOTAL CONSIDERATION WAS RECEIVED AT R S. 2,07,13,000/- TOWARDS SALE OF THE AFORESAID AGRICULTURE LAND AND THE PAYMENT TO THE ABOVE TWO PARTIES WAS MADE AT RS. 23,51,000/- A ND THEREFORE, FOR THE BALANCE AMOUNT OF RS. 1,83,62,000/- BEING S ALE OF AGRICULTURE LAND WAS MADE ON PROTECTIVE BASIS IN TH E HANDS OF THE ASSESSEE. 3. WE ALSO OBSERVE THAT THE ABOVE ADDITION WAS MADE ON PROTECTIVE BASIS IN THE HANDS THE ASSESSEE AND SUBS TANTIVE WAS CONSIDERED IN THE HANDS OF SAMANDER KHAN AND PARASA NN D DEVI. HOWEVER, THE ASSESSMENT ORDER IN THE CASE OF PRASAN N DEVI WAS PASSED FOR AY 2013-14 BY ITO WARD-4, PALI ON 28.12. 2017 IN WHICH THE SALE OF SUCH AGRICULTURE LAND WAS CONSIDERED IN HER HANDS. IT WAS FURTHER OBSERVED THAT THE SAID LAND NOT FALLING WIT HIN THE DEFINITION OF CAPITAL ASSETS AS WAS OUTSIDE THE PRESCRIBED LIMITS AND THEREFORE NO CAPITAL GAINS WAS CHARGEABLE ON SUCH SALE OF LAND. THE ADDITION IN RELATION TO SALE OF LAND RELATING TO PRASANN DEVI W AS DELETED. 4 ITA 478/JODH/2018 & SA 13/JODH/2019 MANJULA DEVI JAIN VS ITO HOWEVER, IN RELATION TO AGRICULTURE LAND BELONGING TO SAMANDAR KHAN SINCE THE DETAILS OF HIS ASSESSMENT WAS NOT AVAILAB LE THE ADDITION IN RELATION TO HIS LAND WAS SUSTAINED. THE ASSESSEE IS THEREFORE, AGGRIEVED BY SUCH ADDITION SO SUSTAINED. 4. WE ALSO FOUND THAT BOTH THE AGRICULTURE LAND ARE NOT CAPITAL ASSET AND SITUATED IN THE SAME LOCATION, AND IN VIE W OF THE ASSESSMENT ORDER PASSED IN THE CASE OF PRASSAN DEVI , THERE WAS NO JUSTIFICATION FOR SUSTAINING THE ADDITION RELATION TO THE LAND BELONGING TO SAMANDAR KHAN ALSO. SAMANDAR KHAN HAD GIVEN POWE R OF ATTORNEY TO ASSESSEE FOR SALE OF HIS AGRICULTURE LA ND LIKE PRASSAN DEVI AND DURING THE CROSS EXAMINATION HE HAD DULY CONFIR MED THESE FACTS. HE HAD CONFIRMED THAT HE HAD GIVEN POWER OF ATTORNE Y FOR SALE OF HIS 15 BIGHA AGRICULTURE LAND TO THE ASSESSEE AND ALSO STATED THAT THE LAND WAS ANCESTRAL AGRICULTURE LAND AND BELONGED TO HIM AND HIS BROTHERS. HE ALSO ACCEPTED PART PAYMENTS BEING RECE IVED. THE ASSESSEE ALSO RELIED UPON CERTAIN DECISIONS WHICH S TATES THAT ON THE BASIS OF POWER OF ATTORNEY HE CANNOT BECOME THE OWN ER OF THE. ASSET. IT WAS THEREFORE STATED THAT NO ADDITION CAN BE SUSTAINED. 5. AFTER CAREFUL CONSIDERATION OF THE MATTER IT IS OBSERVED THAT THE FACTS IN RELATION TO THE PROPERTY BELONGING TO SAMA NDAR KHAN AND PRASANN DEVI ARE ALMOST THE SAME AND THE PROPERTY A RE SITUATED IN 5 ITA 478/JODH/2018 & SA 13/JODH/2019 MANJULA DEVI JAIN VS ITO THE SAME LOCATION. SIMPLY BECAUSE THE ASSESSMENT OF PRASANN DEVI HAD BEEN COMPLETED AND THE ASSESSMENT OF SAMANDAR K HAN IS PENDING THE SAME CANNOT BE A BASIS TO SUSTAIN THE A DDITION IN THE HANDS OF THE ASSESSEE. THE EXECUTION OF DEED OF POW ER OF ATTORNEY IS NOT DISPUTED AND THE SAME HAD BEEN CONFIRMED BY THE SAID PERSON. THE ASSESSEE AS AN AGENT DERIVES A RIGHT TO USE HIS NAME AND ALL ACTS, DEEDS AND THINGS DONE, BY HIM AND SUB JECT TO THE LIMITATIONS CONTAINED IN THE SAID DEED, THE SAME SH AL1 BE READ AS IF DONE BY THE SAID PERSON GIVING SUCH AUTHORITIES. SA MANDAR KHAND AS LAND OWNER HAS NOT TRANSFERRED THE OWNERSHIP OF THE LAND IN FAUOR OF THE ASSESSEE. THE ASSESSEE, THUS BEING NEITHER OWNE R NOR A DEEMED OWNER OF THE SAID CAPITAL ASSET, THE SAID CAPITAL A SSET, CANNOT BE TAKEN AS PROPERTY OF THE ASSESSEE. THE SALE CONSIDE RATION OF THE AFORESAID AND, THEREFORE, COULD NOT BE A SUBJECT MA TTER OF ADDITION IN THE HANDS OF THE ASSESSEE. FURTHER THE DEPARTMENT H AD ALREADY ACCEPTED THE FACT IN RELATION TO SALE OF AGRICULTUR E LAND OF PRASANN DEVI, AND UNDER THE SIMILAR FACTS THE ADDITION SUST AINED IN RELATION TO SAMANDAR KHAN DOES NOT SEEM TO BE JUSTIFIED AND THE REFORE, THE ADDITION SO MADE IS HEREBY DELETED. 6. THE NEXT GROUND RELATES TO ADDITION ON ACCOUNT O F INTEREST AMOUNTING TO RS. 2,15,642/-. WE FOUND FROM THE RECO RD THAT THE ADVANCE HAD BEEN GIVEN FOR NON EARNING PURPOSES AND THEREFORE THE 6 ITA 478/JODH/2018 & SA 13/JODH/2019 MANJULA DEVI JAIN VS ITO CLAIM OF INTEREST CANNOT BE ALLOWED. THE LD. CIT(A) ALSO OBSERVED THAT THE CONDITIONS OF SECTION 36(1)(III) OF THE AC T ARE NOT SATISFIED AND THE DEDUCTION OF INTEREST CANNOT BE ALLOWED WHE N THESE ARE DIVERTED INTO NON BUSINESS OBJECTS. THE CONTENTION OF THE ASSESSEE HAD BEEN THAT INTEREST PAYMENT IS BEING NOT DISPUTE D AND THERE IS NO NEXUS OF ANY DIVERSION OF INTEREST BEARING FUNDS TO THE INTEREST FREE ADVANCES AND AS SUCH THE INTEREST DISALLOWED W AS NOT JUSTIFIED. 7. AFTER DUE CONSIDERATION IT IS OBSERVED THAT IT I S OBSERVED THAT THE ISSUE RAISED BY THE AO AND THE LD. CIT(A) HAD N OT BEEN CONTROVERTED AND THERE IS NO JUSTIFICATION FOR NON BUSINESS ADVANCES BEING GIVEN. THE ADDITION SO SUSTAINED BY THE CIT(A ) IS ON THE BASIS OF VALID REASON AND THE ADDITION IS HEREBY UPHELD. 8. THE NEXT GROUND OF THE APPEAL RELATES TO ADDITI ON FOR CASH CREDITS. IT IS OBSERVED THAT AO MADE ADDITION FOR R S. 2,88,000/- ON THE GROUND THAT THE ASSESSEE HAD SUBMITTED CONFIRMA TION OF THE CREDITORS BUT THE SAME WAS NOT FOUND TO BE SATISFAC TORY AND THE SOURCE OF DEPOSITS IN THE BANK ACCOUNT OF THE CREDI TORS COULD NOT BE PROPERLY EXPLAINED. THE CIT(A) ALSO SUSTAINED THE S AID ADDITION AS CREDITWORTHINESS OF THE CREDITORS WAS NOT PROVED. 9. THE ASSESSEE SUBMITTED THAT IN RELATION TO THE C ASH CREDITS IN THE NAME OF ASHISH LALWANI, BHANWARLAL LAL CHAND HU F, CHANDRA 7 ITA 478/JODH/2018 & SA 13/JODH/2019 MANJULA DEVI JAIN VS ITO PRAKASH BHANWARLAL HUF AND SHRI MANAN, CONFIRMATION , RETURN OF INCOME, COMPUTATION WERE FILED AND THE SAME WERE DU LY CONFIRMED. THE ONUS HAD BEEN DULY DISCHARGED AND THEREFORE THE ADDITION WAS NOT JUSTIFIED. 10. WE HAVE CONSIDERED THE FACTS AND CIRCUMSTANCES AND THE ADDITION SO MADE DESERVES TO BE DELETED. THE ASSESS EE HAD FILED CONFIRMATIONS AND THESE CREDITORS ARE INCOME TAX AS SESSEE AND CREDIT IS QUESTION HAD BEEN DULY CONFIRMED BY THEM. THE ONUS HAD BEEN DULY DISCHARGED AND THERE IS NO BASIS TO MAKE THE ADDITION SIMPLY ON THE BASIS OF SUSPICION. THE ADDITION SO M ADE IS THEREFORE DELETED. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. 12. NOW WE TAKE S.A. NO. 13/JODH/2019 BY WAY OF THIS STAY APPLICATION, THE ASSESSEE SEEKS STAY OF DEMAND RAISED BY THE DEPARMENT TILL DISPOSA L OF THE APPEAL. 13. AS WE HAVE DECIDED THE APPEAL FILED BY THE ASSE SSEE FROM WHICH THIS STAY APPLICATION AROSE. THEREFORE, THIS STAY APPLICATION BECOME INFRUCTUOUS. 8 ITA 478/JODH/2018 & SA 13/JODH/2019 MANJULA DEVI JAIN VS ITO 14. IN THE RESULT, THIS STAY APPLICATION IS DISMISS ED AS INFRUCTUOUS. 15. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED IN PART AND S.A. OF THE ASSESSEE IS DISMISSED AS INFRUCTUOU S. ORDER PRONOUNCED IN THE OPEN COURT ON 20/03/2020. SD/- SD/- (R.C.SHARMA) (SANDEEP GOSAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED :. 20/03/2020 *RANJAN COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. CIT 4. THE CIT(A) 5. DR, ITAT, JODHPUR 6. GUARD FILE (ITA 478/JODH/2018 & SA NO. 13/JODH/201 9) BY ORDER ASSISTANT REGISTRAR ITAT JODHPUR