Azad Singh, Delhi V. ITO WARD - 42(1), Delhi

ITA 5372/DEL/2019

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 0243 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 6 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-01-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 12-06-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset; Revision of order; Fair market value; Valuation report; Reason to believe; Set aside; Audi alteram partem; Capital Gains
• Section: 148; 54; 144; 54F; 2(14); 142(1); 234B; 143(2); 13

Judgement Text

1 ITA No. 5372/Del/2019 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI “SMC” BENCH: NEW DELHI (THROUGH VIDEO CONFERENCING) BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER ITA No.5372/Del/2019 [Assessment Year : 2010-11] Azad Singh Village- Hiron Kudna, New Delhi BZXPS4944Q vs ITO Ward-42(1) Civic Centre, JLN Marg, New Delhi APPELLANT RESPONDENT Appellant by None Respondent by Shri Om Prakash, Sr. DR Date of Hearing 28.12.2021 Date of Pronouncement 12.01.2022 ORDER PER KUL BHARAT, JM : This appeal by the assessee is directed against the order of the Ld. CIT(A)—14, New Delhi dated 10/12/2018, pertaining to the Assessment Year 2010-11. The assessee has raised following grounds of appeal:- “1. That on the facts and in the circumstances of the case, the Id. CIT(A)-14, New Delhi has erred both on facts and in law in rejecting the contention of the appellant that the impugned order is not sustainable, as the same has been passed without providing proper and reasonable opportunity to the appellant to present its case and the order is at variance with principles of audi alteram partem 2 ITA No. 5372/Del/2019 and passed in hot haste to finalize time barring assessment. 2. That on the facts and in the circumstances of the case, the order passed by the Id. Commissioner of Income Tax (Appeals)-14, New Delhi is bad both in the eye of law and on facts. 3. That on the facts and in the circumstances of the case, the Id. CIT(A)-14, New Delhi has erred both on facts and in law in rejecting the contention of the appellant that initiation of the re-assessment proceeding and re- assessment order are bad both on facts and in law and liable to be quashed, as the statutory conditions and procedure prescribed under the Statute have not been complied with. 4. That on the facts and in the circumstances of the case, the Id. CIT(A)-14, New Delhi has erred both on facts and in law in rejecting the contention of the appellant that the re-assessment proceedings initiated by the Id. A.O are bad in the eye of law as the reasons recorded for the issue of Notice u/s 148 of the Ac are not valid in the eye of law. 5. That on the facts and in the circumstances of the case, the Id. CIT(A)-14, New Delhi has erred both on facts and in law in rejecting the contention of the appellant that the proceedings u/s 148 of the Act in the case have been initiated contrary to the statutory requirements prescribed u/s 151 of the Act. 6. That on the facts and in the circumstances of the case, the Id. CIT(A)-14, New Delhi has erred both on facts 3 ITA No. 5372/Del/2019 and in law in rejecting the contention of the appellant that the Notice issued u/s 148 of the Act was. illegal as barred by limitation and hence void ab initio. 7. That on the facts and in the circumstances of the case, the Id. CIT(A)-14, New Delhi has erred both on facts and in law in rejecting the contention of the appellant that the proceedings initiated are bad, as there was no live link between the information in possession of the Id. A.O and the reasons recorded by him u/s 148 of the Act. 8. (i) That on the facts and in the circumstances of the case, the Id. CIT(A)-14, New Delhi has erred both on facts and in law in rejecting the contention of the appellant that the Id. A.O has erred in initiating re-assessment proceedings without having his own reason to believe that income has escaped assessment. 8.(ii) That on the facts and in the circumstances of the case, the Id. CIT(A)-14, New Delhi has erred both on facts and in law in rejecting the contention of the appellant that the Id. A.O has erred in initiating re-assessment proceedings without any material or basis to form the view that income has escaped assessment. 8(iii) That on the facts and in the circumstances of the case, the Id. CIT(A)-14, New Delhi has erred both on facts and in law in rejecting the contention of the appellant that the Id. A.O has erred in initiating proceedings simply on the basis of information received from the I.T.O (I & C1)-1 & 5, New Delhi vide his letter No. F.N.ITO(l & C1)- 1&5/AIR-001/Fwdg-A.0) dated 5.10.2015 . 4 ITA No. 5372/Del/2019 9. That on the facts and in the circumstances of the case, the Id. CIT(A)-14, New Delhi has erred both on facts and in law in rejecting the contention of the appellant that re-assessment proceeding or the order passed by the Id. A.O are bad and liable to be quashed on account of failure of the Id. A.O to dipose of the objections raised by the appellant against the initiation of proceedings by way of an order and by communicating such order to the appellant. 10. That on the facts and in the circumstances of the case, the Id. CIT(A)-14, New Delhi has erred both on facts and in law in rejecting the contention of the appellant that the re-assessment order passed by the Id. A.O is bad and liable to be quashed as the same has been re-opened on the basis of reasons, which are vague and incomplete and further have been recorded without application of mind on the part of the Id. A.O. 11. That on the facts and in the circumstances of the case, the Id. CIT(A)-14, New Delhi has erred both on facts and in law in rejecting the contention of the appellant that the gain resulting from agricultural land was not liable to be considered as income u/s 45 of the Act having regard to provisions of Section 2(14) of the Act. 12. That on the facts and in the circumstances of the case, the Id. CIT(A)-14, New Delhi has erred both on facts and in law in rejecting the contention of the appellant that the Id. A.O has grossly erred in making additions in the declared income u/s 144 of the Act without conducting proper enquiry, basis, material or evidence in support of 5 ITA No. 5372/Del/2019 the additions made by him and further without providing the adequate and sufficient opportunity to the appellant to provide clarifications in support of returned income. 13. That on the facts and in the circumstances of the case, the Id. CIT(A)-14, New Delhi has erred both on facts and in law in rejecting the contention of the appellant that the Officer was wholly unjustified in not uniformally adopting cost of acquisition and cost of improvement in computing long term capital gains under the hands of all co-owners. 14. That on the facts and in the circumstances of the case, the Id. CIT(A)-14, New Delhi has erred both on facts and in law in rejecting the contention of the appellant that the Id. A.O failed to provide opportunity to the appellant to claim and explain available deductions u/s 54 of the Act as also other statutory provisions. 15. That on the facts and in the circumstances of the case, the Id. CIT(A)-14, New Delhi has erred both on facts and in law in rejecting the contention of the appellant that the Id. A.O has erred in levying interest of Rs.70,664/- u/s 234A and Rs.8,21,469/- u/s 234B of the Act, which are not leviable on the facts of the instant case.” 2. The facts in brief are that the case of the assessee was reopened on the basis of information received by the Assessing Officer regarding selling of the immovable property by the assessee. 6 ITA No. 5372/Del/2019 Therefore, assessment was reopened and a notice u/s 148 of the assessee Income Tax Act, 1961 [hereinafter referred to as the “Act.”] was issued. In response to the notice issued, the Ld. Authorized Representative of the assessee attended the proceedings and an income tax return declaring income of Rs. 1,22,609/- under the head salary and Rs. 35,975/- under the head income from other sources was filed. Thereafter, the Assessing Officer issued notice u/s 143(2) of the Act in response thereto. The Ld. Authorized Representative of the assessee attended and filed parts submission. The case was adjourned to 28/12/2017, but no one attended. Therefore, the Assessing Officer proceeded to make assessment u/s 144 of the Act and made addition of Rs. 42,89119/-, in respect of the long term capital gain. Thus, assessed income at Rs.44,47,700/- against the declared income of Rs. 1,58,594/-. 3. Aggrieved by this, the assessee preferred appeal before the Ld.CIT(A) who after considering the submissions sustained the addition as made by the Assessing Officer and dismissed the appeal of the assessee. 4. Aggrieved against this, the assessee is in the present appeal. 7 ITA No. 5372/Del/2019 5. No one appeared on behalf of the assessee. It is seen from the records that on various dates, neither assess nor any person authorized on his behalf have been appearing. The notice sent through speed post is returned unserved. The assessee has not provided any other address to the registry. Therefore, the appeal was taken up for hearing in the absence of the assessee and is being disposed off on the basis of the material available on record. 6. It is seen from the record that the present appeal is barred by time, the assessee has filed application seeking condontion of delay. The contention of the assessee is that the impugned order dated 10 th December, 2018 was received by the assessee on 15 th January, 2019. Assessee gave this order to his Counsel for preparing the appeal but the appeal was not filed owing to the fact that the order was misplaced by the Counsel in his office. Therefore, the assessee applied for certified copy which was received on 16/4/2019 and the present appeal came to be filed on 13/6/2019. However, he submitted that delay in filing was not deliberate and the assessee has not benefitted by not filing the appeal in time in any way. An affidavit to this effect has been filed by the assessee dated 12 th 8 ITA No. 5372/Del/2019 June, 2019. It is seen that the present appeal was required to be filed within 60 days of the receipt of the order. Admittedly the order was received on 15/1/2019 as per the assessee. Therefore, the appeal should have been filed by 14 th March, 2019. The assessee has filed present appeal on 13/6/2019. Therefore, there is a delay of 86 days in filing of the present appeal. 7. The Ld. DR opposed the contents of the application filed by the assessee for seeking condonation of delay. He submitted that the assessee had been thoroughly negligent. And the assessee cannot taken advantage of his being negligent. He submitted that before Tribunal, the assessee is negligent to attain the proceedings. Therefore, he submitted that the appeal be dismissed being barred by time. 8. I have heard the Ld. DR and perused the material available on record. Considering the material available on record and the reasons given for delay in filing the appeal which is duly supported by the affidavit. The revenue has not pointed out any incorrect statement in the affidavit. Therefore, the assessee has reasonable cause as the impugned order was mis placed in the office of the 9 ITA No. 5372/Del/2019 Counsel for the assessee. Therefore, considering the totality of the facts, the delay is condoned appeal is admittedly for hearing . 9. Ground No. 1 is against not providing opportunity to the assessee. Ground No. 1 to 10 are against validity of the proceedings. 10. The assessee has not brought any material in support of his averments. Therefore, these grounds of the assessee’s appeal are dismissed. 11. Ground No. 11 is against rejected the contention of the assessee that the capital gain resulted from transfer of agricultural land was not liable to be taxed u/s 45 of the Act. Ground No. 11 to 14 inter related and are against the non providing and conducting the proper enquiries by the assessing authority in respect of the land in question whether the land was capital asset or not this issue was not examined by the Lower Authorities. 12. In respect of these grounds, Ld. Sr. Departmental Representative has submitted that the assessee was negligent throughout. He did not provide relevant evidences to the assessing 10 ITA No. 5372/Del/2019 authority. He submitted, therefore, the Assessing Officer was justified in making addition in respect of the capital gain assessing of the transfer of the capital asset. 13. I have heard the Ld. DR and perused the material available on record. I find that the Assessing Officer decided the issue in the absence of the assessee by observing as under:- “Thereafter, the ease has been fixed for hearing by issuing of notice u/s 143(2) dated 26.12.2017 and statutory notices 142(1) of the 1,13 Act. 1961 were issued and asked the asseesee to furnish the documents and any other evidence in support of assessee ease. In response CA Sh. Kalpit Sultania, A.R. of the assesses attended the assessment proceedings and filed partly submission on 27.12,2017 and case was adjourned to next date 28 12.2017 but none attended. Looking to the Time Barring Matter which is getting baited by limitation on 31.12.2017 and the undersigned has no alternative but to complete the assessment proceedings u/s 144 of the LT. Act, 1961 as per material available on record. Therefore, keeping in view the non-cooperative attitude of the assessee, a final show cause notice was served upon the assessee on 10/11/2017 through speed post fixing the ease for hearing on 17.11.2017 .Wherein it was made very dear that in 11 ITA No. 5372/Del/2019 case of non-compliance to this notice, his ease will be decided ex- parte as per the provision of Income Tax Act, 1961 and on the basis of the material available on record without any further opportunity. The same is reproduced as under: "From the perusal of details filed by you and information available with this office it is evident that you made a sale deed of a property situated at Mundka during the period 01.04.2009 to 31/3/2020 amounting to Rs. 97,62,499/- . After giving you many opportunities to provide the documents regarding the sale/purchase, it seems that you have nothing to produce in this case and you are hereby slum caused why this amount of Rs 97,62,499 shouldn’t be added hack to vow taxable income.” However on the given date neither the assessee nor any reply on behalf of the assessee was filed. Since this is a time barring case and the undersigned is left with no other option but to pass the best judgment assessment order u/s 144 of the assessee IT Act guided by judicial pronouncement in the case of CIT Vs Yamu Industries Ltd, (2008)306 ITR 309(Del) and as held by the Supreme Court in the ease of Brij Bhushan Lai Praduman Kumar Vs CJT(197S) 115 ITR 524 (SC) and the Calcutta High Court in Anand Rice and Oil Mills Vs. CIT (1977) 108 ITR 372 (Cal.) As. considering the above the assessee not produced any explanation in this matter. The undersigned have no alternative left but to decide the matter as per documents available on record, from perusal of the sale documents; sale deeds of agricultural kind who 12 ITA No. 5372/Del/2019 had sold land K h a s r a No. 692 ((2-18), . 726(4-16). 727(4-16), 728(4-16), 729(6-2), 730(4-3) total area 27 Bighas 11 Biswas situated in the village of Jaffarpur alias Hiran Kudna,, Delhi 10041 being a of 4 th part 1/3 share for a consideration of Rs.8.75,00,000/- on 06,06.2009 and sold land Khasra -No. 358/1(1-8), 360(4-16), 451(4- 14), 561/3(0-19), 603)4-16), 604 (4-16), 605 (4-16), 455/2(0-12) total area 26 Bighas 17 Biswas situated in the village of Jaffarpur alias Hiran Kudna. Delhi-110041, being a 4 th part 1/3 share for a consideration of Rs.2,96,95,000/- on 6/6/2009 as per sale deeds of agricultural land in which assessee’s share has 4 th part 1/3 rd of the above amount of . Rs. 97,62,499/- in sale of both the lands during the A.Y 2009-10 relevant to A.Y. 2010-11 taken as total sale consideration of agricultural land while computing Long Term Capital Gain income of the above land. The circle rate per ace of agricultural land in Delhi for the year 1981-82 was Rs.3,32,152/-. Now long term capital gain is calculated as under: Sale consideration 72,91,667/- Land: 27 Bigha 11 Biswa -(27x20)+ 11= 540+11= 551 Biswas Share = 1/12 -551/12= 45.92 Biswas= 45.92/96 =0.48 Acre Less: ICOA = 0.48 Acre x 332150x632 100 Long Term Capital Gain = 10,07,610 Less: = 62,84,057 = 19,94,938/- 42,89,119/- Therefore, I am satisfied that assessee has concealed his income penalty u/s 271(1) 1 of the I.T. Act, 1961 is being initiated 13 ITA No. 5372/Del/2019 separately on this issue by issuing a penalty notice. (Addition of Rs. 42,89,119/-) 14. On appeal to the Ld. CIT(A) and decided the issue by observing as under:- “ 8. In view of the above discussion ground No. 2 and 3 of the appeal are dismissed. As regards Ground No. 7, Circle rate of the valuation of land by the stamp duty authorities is an indicator of the fair market value of the land in the absence of any evidence to the contrary. The Assessing Officer has already taken the stamp duty valuation on 01.04.1081 as the fair market value of the land. To establish the contrary the assessee was expected to file a, valuation report from a competent valuer of agricultural land before the Assessing officer. It needs to be clarified that the authorized valuer for agricultural land and the registered valuers for other properties are different professionals competent to issued valuation reports of different types of property. 9. In the written submission, the assessee also claimed that in case of uncles of the assesssee cost of improvement of land (1 /3 rd share of original land being the combined land of all four brothers) was taken at Rs. 23 lacs and therefore the assessee should be allowed cost of improvement of Rs.5.75 lacs, being I/4 th of the same, with corresponding indexation. However, the assessee did not furnish any evidence of the same. 14 ITA No. 5372/Del/2019 Since the land sold was an urban agricultural land, without any evidence of the nature and quantum of expenditure of the claimed cost of improvement, the same cannot be allowed. The assessee has also not furnished any details of his uncles. Therefore the corresponding claim is not allowed and ground no. 7 is dismissed. As regards the claim that it was allowed in the case of assessee’s uncles, the said facts are not before the under signed. However, if the corresponding claim has been allowed without any evidence, it is for the corresponding Principal Commissioner of Income Tax to take necessary action in their case u/s 263. It is for the AO to examine it and take appropriate remedial action, if needed. 10. As regards ground no. 8, the assessee has again not furnished any evidence for its claim under section 54F. He has again referred to the assessment of his uncles of which no details are available. For claim of deduction under 54F the assessee has to establish the date of construction and furnish the approval of plan and the evidence of completion. Moreover, the amount not spent till the date of filing of return is required to be deposited in the specified bank account. In the present case no such details are available. It is noticed that the AO has still, allowed the claim under section 54F of Rs. 19,94,938/-. Apparently the assessee is claiming extra deduction which cannot be allowed for want of evidence. Moreover, if the claim in the case of assessee or his uncles has been wrongly allowed, it is for the Principal Commissioner of Income Tax to take 15 ITA No. 5372/Del/2019 appropriate action u/s 263.” 15. From the above findings of the Lower Authorities, it is clear that the issue whether the land was an agricultural land and did not fall within the definition of capital asset was not adverted and adjudicated. Therefore, under these facts, the impugned order is hereby set aside and the issue whether the land as transferred fall within the definition of capital asset u/s 2 (14) of the Act. If yes, whether the assessee was entitled for any deduction u/s 54 of the Act. The A.O is, therefore, directed to decide these issues after presiding adequate opportunity of hearing to the assessee. Ground Nos. 11 to 14 are allowed for statistical purpose. 14. Ground No. 15 is against levy of interest. This ground be consequential in nature is held accordingly and needs no separate adjudication. Above decision was pronounced on conclusion of Virtual Hearing in the presence of both the parties on 12th January , 2022. Sd/- (KUL BHARAT) JUDICIAL MEMBER 16 ITA No. 5372/Del/2019 Dated : 12/01/2022 *R. N* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI