Sh. Surjit Singh Sandhu, Mohali V. ACIT, Intl. Taxation, Circle 1, Chandigarh

ITA 549/CHANDI/2022

AI Insights

The case involves Sh. Surjit Singh Sandhu, a non-resident Indian, who appealed against the order of the CIT(A)-43, New Delhi, which confirmed the addition of Rs. 1,03,20,000 as long-term capital gain on the sale of agricultural land. The land was sold by his sister, Balbir Kaur, using a Power of Attorney, which the Assessee claimed was misused. The initial assessment added the sale consideration as income, which was contested in the CIT(A) and subsequently in the Income Tax Appellate Tribunal. The Tribunal admitted additional evidence regarding the agricultural status of the land and the Assessee's bank accounts, leading to the remand of the case for a fresh decision.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 127843 (ITAT-CHANDIGARH)
• Duration Of Justice: 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-06-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 15-05-2023
• Assessment Year: 2012-2013
• Appeal Filed On: 11-07-2022
• Laws Referred To: Income Tax Act, 1961, Income Tax Rules 1962
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset; Additional evidence
• Section: 147; 144; 133(6)

Judgement Text

आयकर अपील य अ धकरण,च डीगढ़ यायपीठ, च डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, ‘B’, CHANDIGARH BEFORE SHRI A.D. JAIN, VICE PRESIDENT & SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER आयकर अपील सं./ ITA No. 549/ C H D / 2 0 2 2 नधा रण वष / Assessment Year : 2012-13 Sh. Surjit Singh Sandhu, House No. 3095, Phase 7, Mohali Vs. बनाम The ACIT, Int. Tax, Circle-1, Chandigarh थायी लेखा सं./PAN No: NQYPS0515P अपीलाथ /Appellant यथ /Respondent नधा रती क ओर से/Assessee by : Sh. Mohit Gupta, Advocate राज व क ओर से/ Revenue by : Sh. Akashdeep, JCIT, Sr. DR स ु नवाई क तार$ख/Date of Hearing : 16.05.2023 उदघोषणा क तार$ख/Date of Pronouncement : 06.2023 आदेश/Order Per A.D. Jain, Vice President: This is assessee’s appeal against the order dated 26.05.2022 passed by the ld. CIT(A)-43, New Delhi for the Assessment Year 2012-13, taking the following grounds of appeal:- 1. That the Hon'ble Commissioner of Income tax (Appeals) - 43, New Delhi has erred on facts of the case and in Law while dismissing the appeal 549-Chd-2022- Sh. Surjit Singh Sandhu, U.K. 2 of the Assessee on the basis of remand report from the Ld.AO. 2. That the Hon'ble Commissioner of Income tax (Appeals) - 43, New Delhi erred both in law and on facts while confirming the sale consideration as addition of Rs. 1,03,20,000/- made by Ld. AO. 3. That the Hon'ble Commissioner of Income tax (Appeals) - 43, New Delhi has erred both in law and on facts while not taking into consideration of the additional evidence placed on record under Rule 46A of the Income Tax Rules 1962. 4. The Hon'ble Commissioner of Income tax (Appeals) - 43, New Delhi erred both in law and on facts while not taking into consideration of the fact that sold land was agricultural land. 2. The facts, as available from the record are that the Assessee is an individual, a non-resident Indian, residing in United Kingdom. Since he was not having income in India for the year under consideration, he did not file any Income Tax Return in India for the year under consideration. He was in possession of agricultural land at Village Talwandi Madho, Tehsil Shahkot, District Jalandhar, as per Jamabandi, he had authorised his sister Balbir Kaur through a General Power of Attorney (GPA) dated 29.10.2009, to maintain the said agricultural land. Balbir Kaur, as per the Assessee, without his 549-Chd-2022- Sh. Surjit Singh Sandhu, U.K. 3 consent fraudulently sold the said agricultural property, through sale deed dated 3.2.2012, to her son, without any consideration. The sale deed shows that the buyer, who is the son of Balbir Kaur has paid Rs. 1,03,20,000/- to her in cash at home, as sale consideration. The Assessee has maintained that this amount was never received by him through his sister, nor directly, nor did he accept the sale of the property as valid. He challenged the sale deed in the Civil Court at Nakodar, on 29.08.2014, on the ground that his sister, Balbir Kaur, had misused the Power of Attorney (POA) given to her by him on 29.10.2009, and had sold the property, which transfer was not a valid transfer. The Civil Court, however, decided the matter against the Assessee, vide order dated 25.01.2018 holding that Balbir Kaur, sister of the Assessee, had not misused the POA and the POA contained the power of sale of the property; on behalf of the Assessee. The Assessee filed appeal in the Court of the District Judge, Jalandhar, which is still pending. The AO, vide order dated 27.11.2019, made the addition to the amount of Rs. 1,03,20,000/- as long term capital gain in the hands of the Assessee, as sale consideration of the said agricultural land. The assessment order was passed u/s 144 r.w.s. 147 of the Income Tax Act, 1961, since the Assessee, being a non-resident was not aware of the proceedings before the AO. The AO held that the Assessee was not able to explain the capital gain on the sale of the agricultural land. 549-Chd-2022- Sh. Surjit Singh Sandhu, U.K. 4 3. In appeal before the ld. CIT(A), the matter was remanded to the AO, seeking comments on the admissibility and merits of the additional evidence filed by the Assessee. The Assessee submitted, as additional evidence, copies of his bank account maintained with Barclays Bank. A letter dated 16.11.2021, was sent to the office of the Sub Registrar, Shahkot (Jalandhar) u/s 133(6) of the I.T. Act, by the AO in respect of status of the agricultural land sold by the Assessee, as per the provisions of section 2(14)(iii) of the Act. The AO stated that from the bank statements, it could not be ascertained as to whether the Assessee was not maintaining any other account in Barclays Bank or any other bank, and that no reply had been received from the office of the Sub Registrar, Shahkot, in the office of the AO. The AO, thus reported that as such, the Assessee had failed to substantiate his claim, and that the matter in the Civil Court had been decided against the Assessee and the appeal was pending in the District Court. 4. The ld. CIT(A) too, on the remand report of the AO, rejected the additional evidence filed by the Assessee in the shape of his bank account of Barclays Bank. He took note of the AO’s observation that from this statement, it could not be ascertained that the Assessee had not maintained any bank account, other than one in Barclays Bank. He further took note of the fact that the Civil Court had decided the matter against the Assessee and the appeal was pending in the 549-Chd-2022- Sh. Surjit Singh Sandhu, U.K. 5 District Court. It was also taken into consideration that Sub Registrar, Shahkot had not sent any reply to the AO in response to the query made u/s 133(6) of the Act, concerning status of the agricultural land sold by the Assessee, as per provisions of section 2(14)(iii) of the Act. The ld. CIT(A) made mention in para 5.8 of the order that the Assessee had also stated that the agricultural land sold was situated beyond 8 KMs from the nearest notified Municipality, i.e. Jalandhar Municipal Council. It was in this manner that the appeal of the Assessee was dismissed by the ld. CIT(A) by virtue of the impugned order. 5. Before us, on behalf of the Assessee, a request for additional evidence has been made, in the shape of affidavit of bank accounts during the year under consideration i.e. 2012-13 and a copy of the letter from the Sub Registrar Shahkot. In the affidavit, notarized in the United Kingdom, where the Assessee resides, the Assessee has stated that during assessment year 2012-13, he was having only one bank account. A copy of the Affidavit reads as follows: 549-Chd-2022- Sh. Surjit Singh Sandhu, U.K. 6 549-Chd-2022- Sh. Surjit Singh Sandhu, U.K. 7 6. The Assessee had submitted before the Tehsildar, Shahkot a letter dated 24.2.2023, in which, he had stated, inter alia, that his agricultural land situated in Village Talwandi Madho, Tehsil Shahkot, had been shown as commercial in the record, whereas he was cultivating the said land, a copy of the Jamabandi with regard to it was being attached. The Assessee requested the Tehsildar that his said land be declared as agricultural land and certified as such. The Tehsildar asked the Patwari Halqa to report on the matter and the Patwari reported accordingly, stating that the Khasra numbers, of which, the Assessee’s land was comprised, stood entered as agricultural land as per the Fard Jamabandi for the year 2020-21. He also reported that the said land was beyond 8 KMs of the Municipal boundary, i.e., boundary of the Jalandhar Municipal Corporation. The letter dated 24.2.2023 and the report of Patwari dated 27.02.2023, to the aforesaid letter, reads as under:- 549-Chd-2022- Sh. Surjit Singh Sandhu, U.K. 8 549-Chd-2022- Sh. Surjit Singh Sandhu, U.K. 9 6. On a consideration of the matter, we find that the additional evidence, so filed by the Assessee require admittance, as it directly relates to the controversy in question. It has been brought as a consequence of the observations of the CIT(A) in the impugned order. The authorities below have erred in not taking into consideration the fact that the appeal against the decision of the Civil Court rendered against the Assessee is hitherto pending in the District Court, result whereof would have a direct bearing on the assessment under consideration. Further, the authorities below have also failed to consider the Jamabandi filed by the Assessee in support of his contention that the land sold was agricultural land and that, therefore, it did not attract levy of capital gain. Still further, the letter now sent by the Sub Registrar is also directly pertaining to the dispute in as much as it contain the Patwari’s Report with regard to the nature of the agricultural land as per the Revenue record in the shape of Jamabandi and also that it is not a capital asset in as much as it is situated beyond 8 KMs from the Municipal Council, Jalandhar. 7. In view of the above, the additional evidence filed by the Assessee is admitted. In the interest of justice, the matter is remanded to the file of the ld. CIT(A) to be decided afresh in accordance with law on duly taking into consideration the aforesaid additional evidence admitted by us. The ld. CIT(A), shall afford due 549-Chd-2022- Sh. Surjit Singh Sandhu, U.K. 10 and adequate opportunity of hearing to the Assessee. The Assessee, no doubt, shall cooperate in the fresh proceedings before the ld. CIT(A). All pleas available under the law shall remain so available to the Assessee. Ordered accordingly. 8. In the result, the appeal is treated as allowed for statistical purposes. Order pronounced on 19.6.2023 Sd/- Sd/- (VIKRAM SINGH YADAV) ( A.D. JAIN ) Accountant Member Vice President Dated : 19.06.2023 “ आर.के.” आदेश क त*ल+प अ,े+षत / Copy of the order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent 3. आयकर आय ु 1त/ CIT 4. +वभागीय त न5ध, आयकर अपील$य आ5धकरण, च7डीगढ़/ DR, ITAT, CHANDIGARH 5. गाड फाईल/ Guard File आदेशान ु सार/ By order, सहायक पंजीकार/ Assistant Registrar