Sh. Surinder Singh, New Delhi V. Pr. CIT, New Delhi

ITA 4796/DEL/2015

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 5307 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 2 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-10-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2009-2010
• Appeal Filed On: 22-07-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S S RANA
• Keywords: Unexplained cash credit; Capital asset; Revision of order; Depreciation; Benefit of exemption
• Section: 143(3); 68; 263; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G NEW DELHI BEFORE SHRI G.D. AGRAWAL, HONBLE PRESIDENT AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO. 3450/DEL/2017 AY: 20 09-10 SHRI SURINDER SINGH, VS INCOME TAX OFFICER, C/O M/S MANOJ KUMAR MITTAL & CO., WARD-48( 4), CAS, 305, DAKHA CHAMBER, NEW DELHI. 2068/38, NAI WALA, KAROL BAGH, NEW DELHI-110005 ITA NO. 4796/DEL/2015 AY: 20 09-10 SHRI SURIDNER SINGH, VS PR. CIT, C/O M/S MANOJ KUMAR MITTAL & CO., DELHI-XVI, CAS, 305, DAKHA CHAMBER, NEW DELHI. 2068/38, NAI WALA, KAROL BAGH, NEW DELHI-110005 (PAN: APXPS4486C) (APPELLANT) (RESPONDE NT) ASSESSEE BY : SHRI MANOJ KUMAR, CA DEPARTMENT BY : SHRI S.S. RANA, CIT DR DATE OF HEARING: 19.07.2018 DATE OF PRONOUNCEMENT: 11.10.2018 ORDER PER BENCH BOTH THESE APPEALS HAVE BEEN PREFERRED BY THE ASSE SSEE. ITA NO. 4796/DEL/2015 IS PREFERRED AGAINST THE ORDER DA TED 10.1.2014 PASSED U/S 263 OF THE INCOME TAX ACT, 196 1 ITA NO.3450/DEL/2017 ITA NO. 4796/DEL/2015 ASSESSMENT YEAR 2009-10 2 (HEREINAFTER REFERRED TO AS 'THE ACT') BY THE LD. C OMMISSIONER OF INCOME TAX -X, NEW DELHI FOR ASSESSMENT YEAR 2009-1 0 WHEREIN VIDE THE IMPUGNED ORDER, THE LD. CIT HAS SET ASIDE THE ORIGINAL ASSESSMENT ORDER DATED 30.12.2011 PASSED U/S 143(3) OF THE ACT. ITA NO. 3450/DEL/2017 IS ASSESSEES APPEAL AGAINST ORDER DATED 1.8.2016 PASSED BY THE LD. CIT (APPEALS)-16, NEW DE LHI WHEREIN VIDE THE IMPUGNED ORDER, THE LD. CIT (A) HAS DISMIS SED THE ASSESSEES APPEAL AGAINST THE CONSEQUENTIAL ASSESSM ENT ORDER PASSED U/S 143(3) OF THE ACT SUBSEQUENT TO THE PROC EEDINGS U/S 263. BOTH THE APPEALS WERE HEARD TOGETHER AND FOR THE SAKE OF CONVENIENCE, THEY ARE BEING DISPOSED OF BY THIS COM MON ORDER. 2.0 BRIEF FACTS OF THE CASE ARE THAT THE RETURN OF INCOME WAS FILED DECLARING AN INCOME OF RS.6,40,430/-. THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND THE ORIGINAL ASSESSMENT WAS COMPLETED AT RS.55,30,884/- AFTER MAKING AN ADDITION OF RS. 4 8,59,495/- ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S 68 OF THE AC T. ADDITIONS WERE ALSO MADE ON ACCOUNT OF INTEREST INCOME AND DI SALLOWANCE OUT OF VEHICLE EXPENSES AND DEPRECIATION ON CAR. S UBSEQUENTLY, THE LD. CIT INITIATED PROCEEDINGS U/S 263 OF THE AC T ON THE GROUND THAT THE ASSESSEE HAD CLAIMED DEDUCTION OF R S. 17,33,046/- U/S 54 OF THE ACT ALTHOUGH, AS PER THE LD. CIT, THE ITA NO.3450/DEL/2017 ITA NO. 4796/DEL/2015 ASSESSMENT YEAR 2009-10 3 ASSESSEE WAS NOT ELIGIBLE FOR SUCH DEDUCTION AS THE ASSESSEE WAS NOT THE LEGAL OWNER OF THE PROPERTY FOR WHICH HE HA D CLAIMED DEDUCTION U/S 54 OF THE ACT. THE LD. CIT OBSERVED THAT WHILE CLAIMING THE BENEFIT OF EXEMPTION U/S 54, THE ASSES SEE HAD CLAIMED BENEFIT OF EXEMPTION OF PROPERTY PURCHASED FROM HIS WIFE WHICH WAS TRANSFERRED TO THE ASSESSEE BY HIS WIFE B Y A GENERAL POWER OF ATTORNEY INSTEAD OF A SALE DEED. AFTER IS SUING SHOW CAUSE NOTICE AND TAKING THE SUBMISSIONS OF THE ASSE SSEE ON RECORD, THE LD. CIT REACHED THE CONCLUSION THAT THE CASE REQUIRED A DEEPER INVESTIGATION BY THE ASSESSING OFFICER. H E, ACCORDINGLY, SET ASIDE THE FILE TO THE OFFICE OF THE ASSESSING O FFICER WITH THE DIRECTION TO RE-EXAMINE THE ENTIRE MATTER. THE ASS ESSEE IS IN APPEAL AGAINST THIS ORDER PASSED U/S 263 IN ITA NO. 4796/DEL/2015. 2.1 THEREAFTER, SUBSEQUENTLY, THE ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S 143(3) R/W SECTION 263 ON 31.03. 2015 BY MAKING AN ADDITION OF RS. 17,33,046/- BY HOLDING TH AT THE ASSESSEES CLAIM U/S 54 OF THE ACT WAS NOT ALLOWABL E. THE ASSESSEES APPEAL AGAINST THIS ASSESSMENT WAS DISMI SSED BY THE LD. CIT (A) AND THE ASSESSEE HAS APPROACHED THE ITA T ITA NO.3450/DEL/2017 ITA NO. 4796/DEL/2015 ASSESSMENT YEAR 2009-10 4 CHALLENGING THE DISALLOWANCE OF CLAIM OF EXEMPTION U/S 54 T IN ITA NO. 3450/DEL/2017. 3.0 AT THE OUTSET, THE LD. AR SUBMITTED THAT THERE WAS A DELAY IN FILING THE APPEAL BEARING CAPTION ITA NO. 4796/D EL/2016 BY 478 DAYS. THE LD. AR SUBMITTED THAT THE ASSESSEE H AD EARLIER APPOINTED SHRI HARI RAM AGGARWAL, CA TO REPRESENT T HE ASSESSEE IN THE PROCEEDINGS U/S 263 BEFORE THE LD. CIT AND T HEREAFTER AFTER THE RECEIPT OF THE ORDER U/S 263, THE ASSESSE E WAS NOT GUIDED BY THE AFORE SAID AR THAT A REMEDY WAS AVAIL ABLE TO THE ASSESSEE BY PREFERRING AN APPEAL AGAINST THE ORDER PASSED U/S 263 BEFORE THE ITAT. IT WAS PRAYED THAT THE DELAY BE CONDONED AND THE APPEAL BE ADMITTED TO BE DECIDED ON MERITS. 4.0 THE LD. CIT DR OPPOSED THE ASSESSEES APPLICATI ON FOR CONDONATION OF DELAY. 5.0 HAVING HEARD BOTH THE PARTIES ON THE ISSUE OF C ONDONATION OF DELAY AND AFTER PERUSAL OF THE RECORDS, WE NOTE THAT THE AVERMENT OF THE ASSESSEE THAT HE WAS NOT PROPERLY G UIDED BY THE LD. AR FOR PREFERRING AN APPEAL AGAINST THE ORDER P ASSED U/S 263 OF THE ACT BEFORE THE ITAT IS NOT BORNE OUT FROM TH E RECORDS. ALTHOUGH THE ASSESSEE HAS FILED AN AFFIDAVIT IN THI S REGARD BUT WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSEE ALS O DID NOT ITA NO.3450/DEL/2017 ITA NO. 4796/DEL/2015 ASSESSMENT YEAR 2009-10 5 EXERCISE PROPER CARE AND DILIGENCE IN LOOKING AFTER HIS OWN INCOME TAX ASSESSMENT PROCEEDINGS. WE ARE OF THE CONSIDER ED OPINION THAT THE ASSESSEE CANNOT ENTIRELY SHIFT THE ONUS OF CARELESSNESS TO THE AR IN THIS REGARD AND WE ARE NOT INCLINED TO CO NDONE THE DELAY OF 478 DAYS. IT IS SETTLED LAW THAT AN AVOIDA BLE CAUSE FOR DELAY BY DUE CARE AND ATTENTION CANNOT BE SUFFICIEN T CAUSE. CAUSE ATTRIBUTABLE TO NEGLIGENCE OR INACTION OF THE PARTY CANNOT BE SUFFICIENT CAUSE. NEGLIGENCE AND LACHES ON THE PART OF THE COUNSEL CANNOT BE CONDONED. ACCORDINGLY, WE DISMISS THE ASSESSEES APPLICATION FOR CONDONATION OF DELAY. 6.0 ACCORDINGLY, THE ASSESSEES APPEAL PREFERRED AG AINST THE ORDER PASSED U/S 263 IN ITA NO. 4796/DEL/2015 IS DI SMISSED AS UN-ADMITTED. 7.0 WE NOW TAKE UP THE ASSESSEES APPEAL IN ITA NO. 3450/DEL/2017. THE LD. AR HAS SUBMITTED THAT THE O NLY GROUND FOR REOPENING THE ASSESSMENT U/S 263 OF THE ACT WAS THAT THE IMPUGNED PROPERTY WAS NOT TRANSFERRED BY SALE DEED BUT BY A GENERAL POWER OF ATTORNEY WHICH DID NOT MAKE THE AS SESSEE A FULL LEGAL OWNER OF THE PROPERTY. IT HAS BEEN FURTHER S UBMITTED THAT THE ASSESSEE HAD SUBMITTED VARIOUS DOCUMENTS TO SUP PORT THE PURCHASE TRANSACTION LIKE PAYMENT RECEIPT, AGREEMEN T TO SELL, ITA NO.3450/DEL/2017 ITA NO. 4796/DEL/2015 ASSESSMENT YEAR 2009-10 6 POSSESSION LETTER AND ALSO COPY OF THE BANK STATEME NT OF THE WIFE TO DEMONSTRATE THAT PAYMENT HAD, IN FACT, BEEN MADE FOR THE PURCHASE OF PROPERTY. IT HAS ALSO BEEN SUBMITTED T HAT THE GENERAL POWER OF ATTORNEY WAS DULY REGISTERED. IT HAS ALSO BEEN SUBMITTED THAT THIS TRANSFER WAS COVERED UNDER THE DEFINITION OF TRANSFER AS ENVISAGED IN SECTION 2(47)(V) OF THE AC T. THE LD. AR HAS ALSO PLACED RELIANCE ON JUDICIAL PRECEDENTS IN SUPPORT OF THE CONTENTION THAT THE DISALLOWANCE OF CLAIM MADE U/S 54 HAD BEEN INCORRECTLY MADE BY THE ASSESSING OFFICER AND INCOR RECTLY UPHELD BY THE LD. CIT (A). 8.0 IN RESPONSE, THE LD. CIT DR HAS PLACED EXTENSIV E RELIANCE ON THE ORDER OF THE LOWER AUTHORITIES. 9.0 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT IN THE I NSTANT CASE, THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CAS E OF PACE DEVELOPERS & PROMOTERS (P) LTD. VS. GOVERNMENT OF N CT REPORTED IN (2013) 33 TAXMANN.COM 99 (DELHI). THE HONBLE D ELHI HIGH COURT IN THIS CASE, WHILE REFERRING TO SECTION 2(47 ) OF THE ACT, HAS HELD THAT CONVEYANCE OF IMMOVEABLE PROPERTY BY A GE NERAL POWER OF ATTORNEY CONSTITUTED TRANSFER OF CAPITAL ASSET. THE HONBLE ITA NO.3450/DEL/2017 ITA NO. 4796/DEL/2015 ASSESSMENT YEAR 2009-10 7 DELHI HIGH COURT ALSO HELD THAT THE CIRCULAR DIRECT ING REGISTRARS NOT TO REGISTER CONVEYANCE OF IMMOVEABLE PROPERTY B Y A GENERAL POWER OF ATTORNEY WAS CONTRARY TO THE OBSERVATION O F THE HONBLE APEX COURT AND WAS LIABLE TO BE SET ASIDE. IN THE ASSESSEES CASE, THE ONLY OBJECTION OF THE VARIOUS AUTHORITIES TO AL LOWING THE BENEFIT OF CLAIM MADE U/S 54 OF THE ACT IS THAT THE PROPERTY WAS TRANSFERRED BY A GENERAL POWER OF ATTORNEY. THAT T HE PAYMENT HAD BEEN MADE FROM THE HUSBAND TO THE WIFE FOR PURC HASE OF PROPERTY IS UNDISPUTED AND IS EVIDENCED BY THE BANK STATEMENT OF THE ASSESSEES WIFE. FURTHER, POSSESSION LETTER IS ALSO ON RECORD. THEREFORE, IN VIEW OF THE BINDING JUDGMENT OF THE H ONBLE DELHI HIGH COURT IN THE CASE OF PACE DEVELOPERS & PROMOTE RS (P) LTD. VS GOVERNMENT OF NCT (SUPRA), WE ARE UNABLE TO CONCUR WITH THE FINDINGS OF THE LOWER AUTHORITIES AND WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND DIRECT THE ASSESSING OFFICER TO ALLO W BENEFIT OF EXEMPTION U/S 54 OF THE ACT TO THE ASSESSEE. ACCOR DINGLY, ITA NO. 3450/DEL/2017 STANDS ALLOWED. 10.0 IN THE RESULT, ITA NO. 4796/DEL/2015 IS DISMIS SED AND ITA NO. 3450/DEL/2017 STANDS ALLOWED. ITA NO.3450/DEL/2017 ITA NO. 4796/DEL/2015 ASSESSMENT YEAR 2009-10 8 ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH OCTOBER, 2018. SD/- SD/- (G.D. AGRAWAL) (SUDHANSHU SRIVASTAVA) PRESIDENT JUDICIAL MEMBER DATED: 11 TH OCTOBER , 2018 GS COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT BY ORDER ASSTT. REGISTRAR DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS /PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P S/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WE BSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER 1