NALINKUMAR RATILAL PATEL, VADODARA V. INCOME TAX OFFICER, VADODARA

ITA 621/AHD/2023

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 5714 (ITAT-AHMEDABAD)
• Duration Of Justice: 11 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2024
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: A
• Next Hearing Date: 28-05-2024
• Assessment Year: 2009-2010
• Appeal Filed On: 11-08-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Opportunity of being heard; Principle of natural justice; Opportunity of cross examination; Fair market value; Third party statement; Valuation report; Condonation of delay; Set aside
• Section: 143(3)

Judgement Text

ITA No.621/Ahd/2023 Assessment Year: 2009-10 Page 1 of 5 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “A” BENCH, AHMEDABAD BEFORE Ms. SUCHITRA KAMBLE, JUDICIAL MEMBER AND SHRI NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER ITA No.621/Ahd/2023 Assessment Year: 2009-10 Nalinkumar Ratilal Patel, Ambamata Falia, AT. Ankodia, P.O. Ankodia, Vadodara – 391 101. Gujarat. [PAN – AWJPP 3886 E] Vs. The Income Tax Officer, Ward – 1(2)(4), Vadodara. (Appellant) (Respondent) Assessee by Shri None Revenue by Shri Durga Dutt, CIT-DR D a t e o f H e a ri n g 29.05.2024 D a t e o f P ro n o u n c e m e n t 23.07.2024 O R D E R PER SUCHITRA KAMBLE, JUDICIAL MEMBER: This appeal is filed by the Assessee against order dated 18.02.2020 passed by the CIT(A), Vadodara for the Assessment Year 2009-10. 2. The assessee has raised the following ground of appeal :- “1. The Ld. CIT erred on facts and in law in not condoning the delay in filing of appeal despite explaining the reasons and not adjudicating the grounds of appeal on merits. The Ld. CIT erred on facts and in law in upholding Action of Assessing Officer in making assessment u/s.144. The Ld. CIT erred on facts and in law in upholding action of the AO in making addition of Rs.7,05,17,000/- on account of unexplained investment u/s.69 ignoring that the appellant furnished relevant documents of investment therefore, such investment had already been part of the other assessee disclosed in the facts of the case.” ITA No.621/Ahd/2023 Assessment Year: 2009-10 Page 2 of 5 3. At the time of hearing, none appeared on behalf of the assessee and the assessee has filed letter dated nil thereby submitting history of the assessee’s case. The submissions of the assessee are as under:- “To, Income Tax Appellate Tribunal Ahmedabad. Respected Sir, Ref: Shri Nalinkumar R Patel (PAN: AWJPP3886E) With reference to above and under the instructions from the above referred appellant, we would like to submit herewith Rith reference to above referred appeal we would like to state that the appellant has filed his return of income for the A.Y. 2009-10, declaring total income at Rs.25,810/- on 31/01/2014, In response to notice u/s.148 of the Act, 1961 issued by the Learned Assessing Officer (herein after referred to as LAO) and after verification, the assessment u/s.143(3) r.w.s 147 of the I.T. Act, 1961 was completed, assessing total income at 7,05,42,810/-. The additions were made on account of unexplained investment of Rs.7,05,17,000/- being cost of land purchased Rs.1,81,00,000/- and on money paid Rs.5,24,17,000/- for purchase of land. Your appellant would like to submit herewith that he has purchase the agriculture land of Rs.30,29,500/- only being 50% share on his part as against Rs.1,81,00,000/- as stated by LAO on the basis of so called statement of Shri Krupeshbhai N Patel and others known as "Amod Group" which was searched by the department and on the basis of such statement recorded during the search it was stated by them that they have received on money against sale of land in cash from Shri Nalinbhai R. Patal. Smt. Hinaben N. Patel and Shri Rameshbhai Prajapati. Copy of Statement recorded : Your appellant would like to submit herewith that the assessment order framed by the LAO under section 143(3) r.w.s.147 is bad in law and void-ab-initio, as the LAO has passed the order without giving any opportunity of being heard to the appellant and without considering the facts of the case. The LAO has passed the order on the basis of statement of Shri Krupeshbhai Patel of "Amod Group" recorded, however the LAO has not provided the copies of statement of Shri Krupeshbhal of Amod Group recorded during the course of search operations carried out in his group, even after specific request form the appellant to provide the copies of the same vide letter dated 11/11/2014. Cross Examination of statement of Shri Krupeshbhal of "Amod Group” : Secondly the LAO has not given an opportunity to the appellant, to cross verify the statement of Shri Krupeshbhai even though your appellant has specifically requested the LAO vide his letter dated 11/11/2014, that before making any addition he must be allowed to cross examine the statement of Shri ITA No.621/Ahd/2023 Assessment Year: 2009-10 Page 3 of 5 Krupeshbhai. The LAO however for the reasons best known to him not provided the copy of statement recorded and also does not allow the appellant to cross verify the statement of Shri Krupeshbhai. The LAO has grossly erred while framing the assessment order and has made total addition in the hands of Shri Nalinbhal R Patel only, even when the so called statement of Shri Krupeshbhal clearly state that he has received cash from three persons, i.e. Nalinbhai R. Patel, Smt. Hinaben N. Patel and Rameshibhai C Prajapati, and hence the assessment order is bad in law and void-ab-initio. Your appellant therefore prays to set aside the assessment order. Your appellant would also like to submit herewith that in the statement of Shri Krupeshbhai, he has stated that he has sold total land for Rs.1,81,00,000/- to various persons. However your appellant has purchased the land worth of Rs.30,29,500/- only. The copies of sale deed executed for purchase of land are enclosed herewith for your kind perusal. However the LAO has without verifying any of the documents made, addition of total consideration paid for purchase of land made in the hands of your appellant. However your appellant has made total payments by account payee cheque from his bank account, the copy of the same was duly submitted at the time of assessment proceedings; however the LAO didn't consider the same at all while framing the assessment order. (Copy enclosed). R.S. No. Regi. No. Date Total Cost 50% Share of Nalinbhai R. Patel 50% Share of Smt. Hina N. Patel 214/4 11191 22/07/2008 5,55,368/- 2,77,684/- 2,77,684/- 195,199, 212/2 11193 22/07/2008 12,41,450/- 6,20,725/- 6,20,725/- 213 11196 22/07/2008 14,81,105/- 7,40,553/- 7,40,552/- 214/3 11198 22/07/2008 5,18,405/- 2,59,203/- 2,59,202/- 212/1 11175 22/07/2008 7,03,588/- 3,51,794/- 3,51,794/- 216/2 11199 22/07/2008 7,80,000/- 3,90,000/- 3,90,000/- 216/1 11200 22/07/2008 7,80,000/- 3,90,000/- 3,90,000/- Total Rs. 60,59,916/- 30,29,959/- 30,29,957/- Without prejudice your appellant would also like to submit herewith that the show cause notice was issued for addition to be made on money paid only for purchase of land and not for cost of land as per Sale Deed, however the LAO has made addition for the cost of land, without giving any opportunity of being heard, even though your appellant has made all the payment out of his bank account, and the copy of bank statement was duly submitted to the LAO during the course of assessment proceedings. Your appellant therefore prays to delete the addition made for cost of land. ITA No.621/Ahd/2023 Assessment Year: 2009-10 Page 4 of 5 Your appellant further like to submit herewith that the LAO ought to have verified the present jantri value or ought to have obtained valuation report from the DVO before passing the assessment order. Instead the LAO seat idle on the submission made by your appellant and passed the order at the fag end of the year, without giving any opportunity of being heard, without applying his mind on the subject and has merely relied on the third party statement, which is bad-in-law, and the order passed may be set aside and fresh opportunity may be given to your appellant. Your appellant would also like to state that the LAO failed to follow the prescribed procedure to complete the assessment i.e. in case if LAO is not satisfied with the value adopted by your appellant, the LAO is obliged to refer the valuation of the said property through independent valuer (DVO), so as to derive at fair market value of the said property. The appellant has relied upon the judgment of Madras High Court in the case of Appadurai Vijayaraghavana v/s. JCIT (Madras) 369 ITR 486 (Copy Enclosed) and Delhi ITAT in case of Waqf Alal Aulad v/s. ACIT (2010) 37 SOT 58. Since the LAO failed to refer valuation of the said property to DVO and framed assessment without considering Section 50C(2) or 56(2), hence the order passed by LAO is bad in law and void-ab-initio, and therefore the addition made by the LAO may be deleted or the assessment order may be set aside and refer back to valuation officer for the valuation of the property. Thanking you, in anticipation Sincerely Yours, (Nalinkumar Ratilal Patel)” 4. There is a delay of 1208 days in filing the present appeal but the assessee has not complied with the objections and has not filed any delay condonation application as also not filed any authority letter of any Tax Professional in his case. It appears that the assessee is not aware about the filing of the condonation of delay application in the present case. 5. From the perusal of the records, it appears that the assessee has requested to remand back this matter to the file of the Assessing Officer for allowing the assessee to represent his case after giving opportunity to the assessee of being heard and in fact the assessee re quested that the Assessing Officer ought to have verified the present Jantri Value or ought to have obtained valuation report from the DVO which was not done in assessee’s case. Therefore, it will be appropriate to remand back this matter to the file of the Assessing Officer for proper adjudication of the issues on merit taking into account the statement of the assessee that the assessee has not taken any on-money payment or given any on-money payment to Amod Group on purchase of ITA No.621/Ahd/2023 Assessment Year: 2009-10 Page 5 of 5 land. Needless to say, the assessee be given opportunity of hearing by following the principles of natural justice. 6. The delay in filing the present appeal though has not been explained at this juncture; after going through the submissions of the assessee, we are condoning the delay in exceptional circumstances despite not filing the condonation of delay application in present case. This should not be treated as precedent in any other case as the facts in the present case has been taken into account and the delay has been condoned for this appeal only 7. In the result, appeal of the Assessee is partly allowed for statistical purpose. Order pronounced in the open Court on this 23 rd July, 2024. Sd/- Sd/- (NARENDRA PRASAD SINHA) (SUCHITRA KAMBLE) Accountant Member Judicial Member Ahmedabad, the 23 rd July, 2024 PBN/* Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad