BHOPAL SINGH SHEKHAWAT, Jaipur V. ITO, Jaipur

ITA 656/JPR/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7518 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 6 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-01-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 13-06-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: J C KULHARI JCIT DHK
• Keywords: Unexplained cash credit; Sale consideration of property below Jantri Value; Capital asset; Salary income; Principle of natural justice; Additional evidence; Cost of acquisition; Tangible material; Fair market value; Corroborative evidences; Reason to believe; Reassessment proceedings; Borrowed satisfaction
• Section: 143(3); 50C; 244A; 234B; 143(1); 147; 131; 69; 148

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S A, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ ITA NO. 656/JP/2016 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2008-09 BHOPAL SINGH SHEKHAWAT, 6, BHARTENDU NAGAR, KHATIPURA, JAIPUR. CUKE VS. INCOME TAX OFFICER, WARD-1(4), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AOWPS 1925 G VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI MAHENDRA GARGIEYA (ADV) JKTLO DH VKSJ LS@ REVENUE BY : SHRI J.C. KULHARI (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 03/12/2018 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 11/01/2019 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 31/03/2016 OF LD. CIT(A)-I, JAIPUR FOR THE A.Y. 200 8-09. THE ASSESSEE HAS FILED REVISED/MODIFIED GROUNDS OF APPEAL AS UNDER: 1. THE ID. CIT(A) ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN CONFIRMING THE VERY ACTION TAKEN U/S 147 R/W 148 BY THE AO WHICH, IS BAD IN LAW WITHOUT JURISDICTION AND BEING VOID AB-I NITIO, THE SAME KINDLY BE QUASHED. CONSEQUENTLY THE IMPUGNED ASSESS MENT FRAMED U/S 148 DATED 24.03.2014 ALSO KINDLY BE QUASHED. 2. RS.1,18,432/-: THE ID. CIT(A) FURTHER ERRED IN L AW AS WELL AS ON THE FACTS OF THE CASE IN CONFIRMING THE ADDITION OF SHO RT TERM CAPITAL GAIN MADE BY THE AO OF RS. 1,18,432/- ON ACCOUNT OF THE SALE OF TWO ITA 656/JP/2016_ BHOPAL SINGH SHEKHAWAT VS ITO 2 PLOTS IN THE HANDS OF THE APPELLANT INDIVIDUAL INST EAD OF HUF WITHOUT ANY JUSTIFICATION. THE ADDITION SO MADE AND CONFIRM ED BY THE ID. CIT(A), IS CONTRARY TO THE PROVISIONS OF LAW AND FA CTS HENCE, KINDLY BE DELETED IN FULL. 3. CONFIRMATION OF ADDITION OF LONG TERM CAPITAL G AIN (LTCG) RS.7,57,192/-: 3.1 THE ID. CIT(A) SERIOUSLY ERRED IN LAW AS WELL A S ON THE FACTS OF THE CASE IN CONFIRMING THE ADDITION OF LTCG OF RS. 7,57 ,192/- IRT PLOTS NO.157-A & 157-B WHICH WERE SOLD FOR & ON BEHALF OF MOHD. IRSHAD AND ALSO IN HOLDING THE APPELLANT TO BE THE BENEFIC IARY OWNER AND LIABLE FOR LTCG. THE ADDITION SO MADE AND CONFIRMED BY THE ID. CIT(A) BEING COMPLETELY CONTRARY TO THE PROVISIONS OF LAW, THE EVIDENCES AND MATERIAL BROUGHT ON RECORD AND HENCE, KINDLY BE DELETED IN FULL. ALTERNATIVELY & WITHOUT PREJUDICE TO ABOVE, 3.2 THE ID. CIT(A) FURTHER ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN EVEN REJECTING THE CLAIM OF THE APPELLANT OF THE REDUCTION OF THE (INDEXED) COST OF ACQUISITION AS MANDATED BY SEC. 4 8(2) AND IN CONFIRMING THE TAXING OF NOTIONAL INCOME AS AGAINST REAL INCOME, IGNORING THE SETTLED LAW THAT WITHOUT CONSIDERING T HE COST, THE PROVISIONS OF SEC.45 ITSELF COULD NOT HAVE BEEN INV OKED & APPLIED. THE ADDITION SO MADE AND CONFIRMED BY THE ID. CIT(A ) BEING A RESULT OF MISCONCEPTION OF LAW & FACTS AND BEING IN UTTER VIOLATION OF THE BINDING LAW, THE AUTHORITIES BELOW BE DIRECTED TO R EDUCE THE COST OF ACQUISITION U/S 48(2) OR ALTERNATIVELY, TO DELETE T HE ENTIRE ADDITION IN TOTO. 4. ENHANCEMENT OF INCOME & DIRECTION WITHOUT JURISD ICTION: THE ID. CIT(A) FURTHER VERY SERIOUSLY ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN EXCEEDING THE JURISDICTION WHI LE DIRECTING & SETTING ASIDE TO THE AO TO REFER THE MATTER TO THE I.G. (STAMPS) AND TO RE-COMPUTE THE LTCG ACCORDINGLY, MERELY SUSPECTI NG POSSIBLE ENHANCEMENT, WHICH IS IN COMPLETE VIOLATION OF THE MANDATORY REQUIREMENT OF SEC.251 (2) AND BEING AN ILLEGALITY, THE SAME KINDLY BE QUASHED. ITA 656/JP/2016_ BHOPAL SINGH SHEKHAWAT VS ITO 3 5. RS.16,56,000/- & RS. 6,00,000/-: THE ID. CIT(A) ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN CONFIRMING THE ADDIT IONS OF RS. 16,56,000/- MADE ON ACCOUNT OF CASH DEPOSITS AND AD DITION OF RS.6,00,000/- MADE ON ACCOUNT OF CHEQUE DEPOSITED I N BANK ACCOUNT. THE ADDITIONS SO MADE AND CONFIRMED BY THE ID. CIT(A), IS CONTRARY TO THE PROVISIONS OF LAW AND FACTS HENCE, KINDLY BE DELETED IN FULL. 6. THE ID. AO FURTHER ERRED IN LAW AS WELL AS ON TH E FACTS OF THE CASE IN CHARGING INTEREST U/S 234A, & 234B OF THE ACT AND A S ALSO IN WITHDRAWING OF INTEREST U/S 244A OF THE ACT. THE AP PELLANT TOTALLY DENIES ITS LIABILITY OF CHARGING AND WITHDRAWAL OF ANY SUCH INTEREST. THE INTEREST SO CHARGED/WITHDRAWN, BEING CONTRARY T O THE PROVISIONS OF LAW AND FACTS, KINDLY BE DELETED IN FULL. 7. THE APPELLANT PRAYS YOUR HONOUR INDULGENCES TO A DD, AMEND OR ALTER OF OR ANY OF THE GROUNDS OF THE APPEAL ON OR BEFORE THE DATE OF HEARING. 2. GROUND NO. 1 OF THE APPEAL IS REGARDING THE VALI DITY OF REOPENING OF THE ASSESSMENT. THE ASSESSEE IS AN INDIVIDUAL AND F ILED HIS RETURN OF INCOME ON 31/3/2009 DECLARING TOTAL INCOME OF RS. 1 ,34,790/-. THE RETURN OF INCOME WAS PROCESSED U/S 143(1) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). SUBSEQUENTLY, THE ASSESSING OFFICER INITIATED THE PROCEEDINGS U/S 147 OF THE ACT BY ISSUING A NOTICE U/S 148 OF THE ACT ON 28/3/2013. THE ASSESSING OFFICER THEREAFTER COMPLETI NG THE REASSESSMENT U/S 143(3) READ WITH SECTION 147 OF THE ACT ON 24/3/ 2014 AT THE TOTAL INCOME OF RS. 32,66,490/- AFTER MAKING ADDITION ON ACCOUNT OF SHORT TERM CAPITAL GAIN, LONG TERM CAPITAL GAIN ARISING FROM S ALE OF PROPERTY AND ON ACCOUNT OF UNEXPLAINED CASH CREDIT AND DEPOSIT MADE IN THE BANK ACCOUNT. ITA 656/JP/2016_ BHOPAL SINGH SHEKHAWAT VS ITO 4 THE ASSESSEE CHALLENGED THE ASSESSMENT ORDER BEFORE THE LD. CIT(A) AND ALSO RAISED AN OBJECTION AGAINST THE VALIDITY OF RE OPENING. THE LD. CIT(A) CONFIRMED THE VALIDITY OF REOPENING AND REJECTED TH E OBJECTION RAISED BY THE ASSESSEE. 3. BEFORE US, THE LD AR OF THE ASSESSEE HAS SUBMITT ED THAT IT IS A PRECONDITION FOR REOPENING OF THE ASSESSMENT AND TH ERE MUST BE A REASON TO BELIEVE AND NO REASON TO SUSPECT THAT THE INCOME ASSESSABLE TO TAX HAS ESCAPED ASSESSMENT. THE LD AR HAS SUBMITT ED THAT THE WORD BELIEVE HAS TO BE UNDERSTOOD IN CONTRADICTION OF SUSPICION OR OPINION. THE BELIEVE OF THE ASSESSING OFFICER SHOULD BE AS TO ESCAPEMENT OF INCOME AND IT SHOULD NOT BE A PRODUCT OF IMAGINATIO N OR SPECULATION. IN SUPPORT OF HIS CONTENTION, HE HAS RELIED UPON THE D ECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF GANGASHARAN & SONS PVT . LTD. VS ITO (1981) 130 ITR 1 (SC). HENCE, THE LD AR HAS CONTENDE D THAT THE BELIEF MUST BE OF AN HONEST AND REASONABLE PERSON BASED UP ON THE REASONABLE GROUNDS. THE BELIEF MUST BE BASED ON DIRECT OR CIRCU MSTANTIAL EVIDENCE BUT MUST NOT BE BASED ON MERE SUSPICION, GOSSIP OR RUMOR. THE LD AR HAS THUS POINTED OUT THAT IN THE CASE OF ASSESSEE, THE ASSESSING OFFICER HAS NOT FOLLOWED THE SETTLED GUIDELINES WHILE REOPENING THE ASSESSMENT AS HE WAS NOT HAVING ANY MATERIAL DIRECT TO CIRCUMSTANTIAL TO HAVE BELIEVE THAT ITA 656/JP/2016_ BHOPAL SINGH SHEKHAWAT VS ITO 5 THE INCOME ASSESSABLE TO TAX HAS ESCAPED ASSESSMENT . THE SECOND OBJECTION OF THE LD AR IS THAT THE REOPENING IS WITH OUT APPLICATION OF MIND AND BASED ON BORROWED SATISFACTION. THE ASSESSING OF FICER HAS ACTED MERELY ON SOME INFORMATION RECEIVED FROM THE DIRECT OR OF INCOME TAX (CIB) THAT THE ASSESSEE HAS SOLD SOME IMMOVABLE PRO PERTIES WITHOUT EVEN VERIFYING THE FACT THAT THERE WAS NO CAPITAL GAIN AR ISING FROM SALE OF THOSE PROPERTIES. THEREFORE, THERE HAS BEEN A COMPLETE LAC K OF APPLICATION OF MIND BY THE ASSESSING OFFICER. SOME OF THE PROPERTY WHICH WAS SOLD BY THE ASSESSEE ONLY AS A POWER OF ATTORNEY HOLDER WAS A LSO CONSIDERED BY THE ASSESSING OFFICER FOR WORKING OUT THE CAPITAL GA IN WITHOUT REDUCING THE COST OF ACQUISITION. THUS, THE LD AR HAS SUBMITTED T HAT THE REOPENING IS NOT VALID AND LIABLE TO BE QUASHED. IN SUPPORT OF H IS CONTENTION, HE HAS RELIED UPON THE DECISION OF THE HONBLE JURISDICTIO NAL HIGH COURT IN THE CASE OF CIT VS. SHRI RAJASTHAN SYNTAX LTD. (2009) 31 3 ITR 231 (RAJ) AS WELL AS THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. SFIL BROKING LTD. (2010) 325 ITR 285 (DEL). 4. ON THE OTHER HAND, THE LD DR HAS SUBMITTED THAT THE ASSESSEE HAS NOT DISCLOSED ANY CAPITAL GAIN IN HIS RETURN OF INC OME AND SUBSEQUENTLY THE ASSESSING OFFICER RECEIVED INFORMATION THAT THE ASSESSEE HAS SOLD AS MANY AS FOUR PROPERTIES DURING THE YEAR UNDER CONSI DERATION, THEREFORE, ITA 656/JP/2016_ BHOPAL SINGH SHEKHAWAT VS ITO 6 THE ASSESSING OFFICER WAS HAVING A TANGIBLE MATERIAL TO FORM A BELIEF THAT THE INCOME ASSESSABLE TO TAX HAS ESCAPED ASSESSMENT WHEN THE ASSESSEE HAS NOT DECLARED ANY CAPITAL GAIN IN THE RETURN OF INCOME AND EVEN THE DETAILS OF THE SALE OF THE PROPERTIES WERE ALSO NOT GIVEN IN THE RETURN OF INCOME. THE LD DR HAS FURTHER CONTENDED THAT THE REO PENING IS WITHIN THE PERIOD OF FOUR YEARS FROM THE END OF THE ASSESSMENT YEAR AND FURTHER THERE WAS NO ORIGINAL ASSESSMENT. HENCE, THE INFORMA TION RECEIVED BY THE ASSESSING OFFICER WOULD CONSTITUTE A REASONABLE MATE RIAL EVIDENCE ON THE BASIS OF WHICH A REASONABLE BELIEF CAN BE FORMED THA T THE INCOME ASSESSABLE TO TAX HAS ESCAPED ASSESSMENT. HE HAS RE LIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 5. IN REBUTTAL, THE LD AR OF THE ASSESSEE HAS SUBMI TTED THAT IN THE RETURN OF INCOME, THE ASSESSEE HAS STATED THAT THER E IS NO CAPITAL GAIN AS PURCHASED PRICE AND SALE PRICE WAS SAME. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIAL ON RECORD. THERE IS NO DISPUTE THAT THE RET URN OF INCOME FILED BY THE ASSESSEE WAS PROCESSED U/S 143(1) OF THE ACT AND THEREFORE, THERE IS NO ASSESSMENT ON THE RETURN OF INCOME. FURTHER THE REOPENING OF THE ASSESSMENT BY ISSUING NOTICE U/S 148 OF THE ACT ON 28/3/2013 IS WITHIN THE PERIOD OF FOUR YEARS FROM THE END OF THE ASSESS MENT YEAR UNDER ITA 656/JP/2016_ BHOPAL SINGH SHEKHAWAT VS ITO 7 CONSIDERATION AND THEREFORE, THE CASE OF THE ASSESS EE IS NOT HIT BY THE PROVISO TO SECTION 147 OF THE ACT. THE ASSESSING OFF ICER HAS REOPENED THE ASSESSMENT BY RECORDING THE REASONS AS UNDER: REASONS FOR BELIEF THAT THE INCOME HAS ESCAPED ASS ESSMENT. THE ASSESSEE (PAN NO. AOWPS1925G) FILED ON 31/3/200 9 HIS RETURN FOR A.Y. 2008-09 OF DECLARING TOTAL INCOME OF RS. 1,34, 790/-, WHICH WAS PROCESSED U/S 143(1) AT RETURNED INCOME. AS PER INF ORMATION RECEIVED FROM DIRECTOR OF INCOME TAX (CIB), JAIPUR IT WAS NOTICED THAT THE ASSESSEE HAS SOLD IMMOVABLE PROPERTIES SITUATED AS UNDER: S. NO. PROPERTY NAME DATE OF REGISTRY FACE VALUE EVALUATED VALUE DIFFERENCE 1. 10, JAI KARNI NAGAR, NIWAROO ROAD, JAIPUR 07/01/2008 RS. 450000 RS.533720 RS. 83720 2. 11, JAI KARNI NAGAR, NIWAROO ROAD, JAIPUR 07/01/2008 RS. 450000 RS. 547242 RS.97242 3. PLOT NO. 157-A, VISHAL NAGAR, AKEDA DOONGAR, JAIPUR 12/06/2007 RS. 111000 RS.132192 RS.21192 4. PLOT NO. 157-B, VISHAL NAGAR, ROAD NO. 17, VKI AREA, JAIPUR 12/06/2007 RS. 625000 RS. 321921 RS. 303079 RS.1636000 RS.1535075 RS.505233 ON GOING THROUGH THE COPY OF RETURN FILED BY ASSESS EE FOR A.Y. 2008-09, IT WAS FOUND THAT HE HAD NOT DISCLOSED INCOME FROM LON G TERM CAPITAL GAINS. SINCE, THE LONG TERM CAPITAL GAIN OF THE ASSESSEE IS RS. 5,05,233/-. THEREFORE, I HAVE REASONS TO BELIEVE THAT INCOME CHA RGEABLE TO TAX RS. 5,05,233/- HAS ESCAPED ASSESSMENT WITHIN THE MEANIN G OF SECTION 147 OF THE IT ACT. ACCORDINGLY, PROCEEDINGS U/S 147 IS INIT IATED BY ISSUE OF NOTICE U/S 148 OF THE IT ACT, 1961 FOR THE A.Y. 2008-09. IT IS CLEAR FROM THE REASONS RECORDED BY THE ASSESS ING OFFICER THAT THE ASSESSING OFFICER RECEIVED INFORMATION FROM THE DIR ECTOR OF INCOME TAX (CIB), JAIPUR REGARDING THE SALE OF FOUR PROPERTIES BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION. THE DETAILS OF THE FAC E VALUE AND EVALUATED VALUE BEING STAMP DUTY VALUATION SHOWS THAT THERE IS A DIFFERENCE OF RS. ITA 656/JP/2016_ BHOPAL SINGH SHEKHAWAT VS ITO 8 5,05,233/- IN THE FACE VALUE SHOWN IN THE DOCUMENT AND THE VALUATION OF THE STAMP DUTY AUTHORITY. THOUGH, SOME OF THE VALUAT ION SHOWN IN THE DOCUMENTS IS MORE THAN THE STAMP DUTY VALUATION, TH EREFORE, THE NET OUTCOME OF ALL THE FOUR TRANSACTIONS WOULD BE LESS T HAN WHAT WAS CONSIDERED BY THE ASSESSING OFFICER IN THE REASONS RECORDED. HOWEVER, AT THE TIME OF REOPENING OF THE ASSESSMENT, THE ASSESS ING OFFICER IS NOT REQUIRED TO ESTABLISH THE CORRECTNESS OF MATERIAL T O FORM BELIEF THAT THE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT BUT IF ON THE BASIS OF THE INFORMATION OR MATERIAL AVAILABLE WITH THE A.O., A REASONABLE BELIEF CAN BE FORMED THAT THE INCOME ASSESSABLE TO TAX HAS ESCAPED ASSESSMENT THEN THE REOPENING OF THE ASSESSMENT SATISFIES THE CONDITIONS AS PROVIDED U/S 147 OF THE ACT. THOUGH THE ASSESSEE HAS GIVEN ON E LINE NOTE IN THE RETURN OF INCOME, HOWEVER IN ABSENCE OF THE DESCRIPT ION OF THE PROPERTIES WHICH WERE SOLD BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION THE SAID NOTE REGARDING THE CAPITAL GAIN WOULD NOT CONST ITUTE DISCLOSURE OF THE TRANSACTION. IF THE ASSESSEE WAS OF THE FIRMED VIEW T HAT THERE WAS NO CAPITAL GAIN ARISING FROM THE SALE OF THE PRO PERTIES IN QUESTION THEN THE DETAILS OF THE PROPERTIES WITH COST OF ACQU ISITION AND SALE CONSIDERATION WOULD HAVE BEEN GIVEN IN PROPER MANNER IN THE RETURN OF INCOME SHOWING THE NET RESULT AS NIL OR LOSS AS THE CASE MAY BE. HOWEVER, THE ASSESSEE HAS NOT GIVEN ALL THESE DETAIL S IN THE RETURN OF ITA 656/JP/2016_ BHOPAL SINGH SHEKHAWAT VS ITO 9 INCOME AND THEREFORE, IN ABSENCE OF MINIMUM REQUIRE D DISCLOSURE IN THE RETURN OF INCOME AND SUBSEQUENT INFORMATION RECEIVE D BY THE ASSESSING OFFICER REGARDING THE SALE OF THE PROPERTIES IN QUE STION AT A CONSIDERATION LESS THAN THE DEEMED FULL VALUE CONSIDERATION U/S 5 0C OF THE ACT IT AMOUNTS TO ESCAPEMENT OF THE INCOME IN THE FORM OF CAPITAL GAIN. THE LD. CIT(A) HAS CONSIDERED THIS ISSUE AS UNDER: DETERMINATION : (I) THE FACTS OF THE CASE ARE THAT THE APPELLANT FI LED ITS RETURN OF INCOME ON 31.03.2009 FOR THE AY UNDER CONSIDERATION DECLARING TOTAL INCOME AT RS. 1,34,790/- WHICH WAS PROCESSED U/S 143(1) OF THE AC T AND SUBSEQUENTLY, AFTER RECORDING THE REASONS, THE AO ISSUED NOTICE U /S 148 ON 28.03.2013. THE COPY OF THE REASONS FOR INITIATING PROCEEDINGS 147 OF THE ACT WAS ALSO PROVIDED TO THE APPELLANT ON 28.11.2013 BY THE AO A ND IT APPEARS THAT NO OBJECTIONS WERE RAISED THEREOF. (II) IT IS NOTED FROM THE REASONS RECORDED BY THE A O THAT INFORMATION WAS RECEIVED FROM DIRECTOR OF INCOME TAX (CIB), JAIPUR WHEREIN IT WAS INFORMED THAT DURING THE YEAR UNDER CONSIDERATION, THE APPEL LANT HAS SOLD FOUR IMMOVABLE PROPERTIES. AS THE APPELLANT HAD NOT SHOW N LONG TERM CAPITAL GAINS IN ITS RETURN OF INCOME, CONSEQUENTLY, THE AO HAD REASON TO BELIEVE THAT THE INCOME AMOUNTING TO RS. 5,05,233/- HAS ESC APED ASSESSMENT. (III) DURING THE APPELLATE PROCEEDINGS, IT WAS THE CONTENTION OF *HE APPELLANT THAT IN RESPECT OF TWO TRANSACTIONS OF SALE OF IMMO VABLE PROPERTIES, THE AO HIMSELF COMPUTED SHORT TERM CAPITAL GAIN THEREOF IN STEAD OF LTCG AS STATED IN THE REASONS FOR REOPENING THE CASE. FURTHER, THE AO HAS NOT TAKEN INTO ACCOUNT THE COST OF ACQUISITION WHILE COMPUTING THE ALLEGED LTCG AND THUS ITA 656/JP/2016_ BHOPAL SINGH SHEKHAWAT VS ITO 10 THERE EXIST NO REASON TO BELIEVE FOR INITIATING PRO CEEDINGS, U/S 147 OF THE ACT. (IV) I HAVE DULY CONSIDERED THE REASONS RECORDED BY THE AO FOR REOPENING THE CASE OF THE APPELLANT AND SUBMISSIONS OF THE APPELL ANT. IT IS NOTED FROM THE COMPUTATION OF INCOME OF THE APPELLANT FOR THE YEAR UNDER CONSIDERATION (PB: 11) THAT IT HAS GIVEN A NOTE AS UNDER: THERE IS NO CAPITAL GAIN AS THE PURCHASE PRICE AN D SALE PRICE WAS SAME. (V) IN THE COMPUTATION OF INCOME, THE APPELLANT HAS NOT STATED HOW MANY PROPERTIES WERE SOLD BY IT DURING THE YEAR UNDER CO NSIDERATION AND WHAT WERE THEIR COST OF ACQUISITION AND WHEN THESE PROPE RTIES WERE ACQUIRED. IT IS, THEREFORE, HELD THAT THE APPELLANT HAS NOT DISC LOSED FULL FACTS IN ITS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION. IT MAY BE MENTIONED THAT AT THE STAGE OF INITIATION OF PROCEEDINGS U/S 147 OF T HE ACT, THE AO MUST HAVE SOME REASONS TO BELIEVE THAT INCOME HAD ESCAPED ASS ESSMENT. IN THE CASE OF ACIT VS. RAJESH JHAVERI STOCK BROKERS PVT. LTD. [2007] 291 ITR 500 (SC), IT WAS HELD BY THE APEX COURT THAT IF THE AO, FOR WHAT EVER REASON, HAS REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT, IT C ONFERS JURISDICTION TO RE-OPEN THE ASSESSMENT. IT IS A FACT THAT NO ASSESS MENT WAS MADE EARLIER U/S 143(3)/L 44 OF THE ACT IN THE CASE OF THE APPEL LANT, THEREFORE, THE RATIO IN THE CASE OF ACIT VS. RAJESH JHAVERI STOCK BROKER S PVT. LTD. (SUPRA) APPLIES SQUARELY TO THE FACTS OF THE CASE. (VI) FURTHER, THE COURTS CANNOT LOOK INTO THE SUFFI CIENCY OF THE REASONS RECORDED BY THE AO FOR REOPENING THE ASSESSMENT U/S 147 OF T HE ACT. RELIANCE IS PLACED ON THE DECISION OF HONBLE APEX COURT IN THE CASE OF RAYMOND WOOLLEN MILLS LTD. VS ITO [1999] 236 ITR 34 (SC), W HEREIN IT WAS HELD BY THEIR LORDSHIP THAT: ITA 656/JP/2016_ BHOPAL SINGH SHEKHAWAT VS ITO 11 IN THIS CASE, WE DO NOT HAVE TO GIVE A FINAL DECIS ION AS TO WHETHER THERE IS SUPPRESSION OF MATERIAL FACTS BY THE ASSESSEE OR NO T. WE HAVE ONLY TO SEE WHETHER THERE WAS PRIMA FACIE SOME MATERIAL ON THE BASIS OF WHICH THE DEPARTMENT COULD REOPEN THE CASE. THE SUFFICIENCY O R CORRECTNESS OF THE MATERIAL IS NOT A THING TO BE CONSIDERED AT THIS STAGE. WE ARE OF THE VIEW THAT THE COURT CANNOT STRIKE DOWN THE REOPENING OF THE C ASE IN THE FACTS OF THIS CASE. IT WILL BE OPEN TO THE ASSESSEE TO PROVE THAT THE ASSUMPTION OF FACTS MADE IN THE NOTICE WAS ERRONEOUS. THE ASSESSEE MAY ALSO PROVE THAT NO NEW FACTS COME TO THE KNOWLEDGE OF THE INCOME-TAX OFFIC ER AFTER COMPLETION OF THE ASSESSMENT PROCEEDING. WE ARE NOT EXPRESSING AN Y OPINION ON THE MERITS OF THE CASE. THE QUESTIONS OF FACT AND LAW ARE LEFT OPEN TO BE INVESTIGATED AND DECIDED BY THE ASSESSING AUTHORITY. THE APPELLANT W ILL BE ENTITLED TO TAKE ALL THE POINTS BEFORE THE ASSESSING AUTHORITY. THE APPE ALS ARE DISMISSED. (VII) IN VIEW OF THE ABOVE DISCUSSION, IT IS HELD T HAT THE AO WAS JUSTIFIED IN INITIATING PROCEEDINGS U/S 147 OF THE ACT. HENCE, T HIS ADDITIONAL GROUND OF APPEAL IS HEREBY REJECTED. THEREFORE, THE SUFFICIENCY AND CORRECTNESS OF THE M ATERIAL AVAILABLE WITH THE ASSESSING OFFICER AT THE TIME OF RECORDING THE REASONS IS NOT REQUIRED TO BE CONSIDERED WHILE FORMING THE BELIEF THAT THE I NCOME ASSESSABLE TO TAX HAS ESCAPED ASSESSMENT. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE WHEN THE ASSESSEE HAS NOT DISCLOSED THE TRA NSACTIONS OF SALE OF THE PROPERTIES DURING THE YEAR UNDER CONSIDERATION GIVING A VERY VAGUE ONE LINE NOTE THAT NO CAPITAL GAIN AS PURCHASED AN D SALE PRICE WAS SAME, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE IMPUGNED ORDER OF THE LD. CIT(A) QUA THIS ISSUE. FURTHER THE REOPENING IS NOT HIT BY THE PROVISO TO SECTION 147 OF THE ACT, THEREFORE, THE OBJECTIONS R AISED BY THE ASSESSEE HAVE NO MERITS OR SUBSTANCE. ACCORDINGLY, GROUND NO . 1 OF THE ASSESSEES APPEAL IS DISMISSED. ITA 656/JP/2016_ BHOPAL SINGH SHEKHAWAT VS ITO 12 7. GROUND NO. 2 OF THE APPEAL IS REGARDING THE ADDI TION ON ACCOUNT OF SHORT TERM CAPITAL GAIN ON SALE OF TWO PLOTS OF LAND . THE ASSESSEE HAS SOLD TWO PLOTS NO. 10 AND 11 AT JAI KARNI NAGAR, NIWAROO R OAD, JHOTWARA, JAIPUR ON 07/01/2008 FOR A CONSIDERATION AS PER THE SALE DEED OF RS. 4,50,000/- EACH. HOWEVER, THE STAMP DUTY AUTHORITY H AS VALUED THESE PLOTS AT RS. 5,33,720/- AND RS. 5,47,242/- RESPECTI VELY. ACCORDINGLY, THE ASSESSING OFFICER HAS MADE AN ADDITION ON ACCOUNT O F SHORT TERM CAPITAL GAIN OF RS. 1,18,432/- ARISING FROM SALE OF THESE T WO PLOTS. THE ASSESSEE CHALLENGED THE ACTION OF THE ASSESSING OFFICER BEFO RE THE LD. CIT(A) AND CONTENDED THAT THESE TWO PLOTS BELONG TO HUF NAMELY M/S BHOPAL SINGH SHEKHAWAT WHICH CLAIMED TO HAVE CAME INTO EXISTENCE O N 01/5/2001 AS A RESULT OF FAMILY SETTLEMENT BETWEEN THE ASSESSEE AND HIS BROTHERS. HOWEVER, THE LD. CIT(A) WAS NOT IMPRESSED WITH THIS EXP LANATION OF THE ASSESSEE AND UPHELD THE ADDITION MADE BY THE ASSESS ING OFFICER. 8. BEFORE US, THE LD AR OF THE ASSESSEE HAS SUBMITT ED THAT THESE TWO PLOTS NO. 10 AND 11 WERE OWNED BY M/S BHOPAL SINGH S HEKHWAT HUF WHICH CAME INTO EXISTENCE ON 01/5/2001 AS A RESULT O F FAMILY SETTLEMENT. THE LD AR HAS CONTENDED THAT THE GENUINENESS OF THE SETTLEMENT WAS NOT DOUBTED BY THE ASSESSING OFFICER AND BY VIRTUE OF T HE SAID SETTLEMENT, THE ASSESSEE AND HIS TWO BROTHERS NAMELY MR. ASHOK SING H SHEKHAWAT AND ITA 656/JP/2016_ BHOPAL SINGH SHEKHAWAT VS ITO 13 MR. SARJEET SINGH SHEKHAWAT SUCCEEDED ANCESTRAL PROP ERTIES ACQUIRED BY THE GRANDFATHER OF THE ASSESSEE. THE SETTLEMENT BETWE EN THE BROTHERS ARRIVED ONLY AFTER THE DEATH OF MOTHER OF THE ASSES SEE ON 15/4/2001, THEREFORE, A NEW HUF CAME INTO EXISTENCE COMPRISING OF ASSESSEE, HIS WIFE AND CHILDREN. ONCE THE ASSESSEE HAS PROVED THE FACT THAT THESE PLOTS WERE ANCESTRAL PROPERTIES SUCCEEDED BY THE ASSESSEE OUT OF THE FAMILY SETTLEMENT AND CONSEQUENTLY BELONG AND POSSESSED BY THE HUF CAME INTO EXISTENCE ON 01 ST MAY, 2001 THEN THE ASSESSING OFFICER WAS NOT JUSTIF IED IN SUSTAINING THE CAPITAL GAIN IN THE HAND OF THE ASSE SSEE. HENCE, THE LD AR HAS SUBMITTED THAT THE ADDITION MADE BY THE ASSESSI NG OFFICER AND SUSTAINED BY THE LD. CIT(A) MAY BE DELETED. 9. ON THE OTHER HAND, THE LD DR HAS SUBMITTED THAT AS PER THE SALE DEED, THE ASSESSEE HAS SOLD THESE PLOTS IN HIS INDI VIDUAL CAPACITY AND NOT IN THE CAPACITY OF HUF OR KARTA OF HUF. FURTHER THE CONSIDERATION RECEIVED BY THE ASSESSEE IN HIS PERSONAL NAME AND CAPACITY A ND WAS NOT CLAIMED TO HAVE BEEN TRANSFERRED IN THE HUF ACCOUNT. THE ASSESS ING OFFICER HAS SPECIFICALLY GIVEN THE FINDING THAT THE HUF WAS ALLO TTED PAN ONLY ON 01/11/2013 WHEREAS THESE PLOTS WERE PURCHASED IN THE YEAR 2006 AND SOLD IN 2008. FURTHER, NEITHER THE PLOTS WERE PURCHA SED BY THE HUF NOR SOLD BY THE HUF, THEREFORE, THE ASSESSEE HAS NOT PR ODUCED ANY EVIDENCE ITA 656/JP/2016_ BHOPAL SINGH SHEKHAWAT VS ITO 14 TO ESTABLISH THAT THESE PLOTS WERE OWNED BY THE HUF A ND ALSO SOLD BY THE HUF. HE HAS RELIED UPON THE ORDERS OF THE AUTHORITI ES BELOW. 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. THE ASSESSEE HAS CLAIMED THAT TH ESE PLOTS OF LANDS BELONG TO THE HUF NAMELY BHOPAL SINGH SHEKHAWAT WHIC H STATED TO HAVE COME INTO EXISTENCE BY VIRTUE OF A FAMILY SETTLEMEN T OF 01/05/2001 WHEREBY THE ANCESTRAL PROPERTIES WERE DIVIDED BY THE ASSESSEE AND HIS BROTHERS AND ASSESSEE GOT 1/3 RD SHARE IN THE ANCESTRAL PROPERTY WHICH CAME TO THE SHARE OF THE NEW HUF OF THE ASSESSEE. AP ART FROM THE OWNERSHIP OF THE PROPERTIES IN QUESTION BEING H UF, THE ASSESSEE HAS NOT OBJECTED TO THE COMPUTATION OF CAPITAL GAIN. WE FIND THAT THE SALE DEED BY WHICH THESE PLOTS WERE SOLD BY THE ASSESSEE D O NOT REVEAL THE FACT THAT THE PLOTS WERE OWNED BY THE HUF AND WERE SO LD ON BEHALF OF THE HUF. THERE IS A CATEGORICAL STATEMENT IN THE RECITAL OF THE SALE DOCUMENT THAT THE ASSESSEE ACQUIRED THESE PLOTS THR OUGH REGISTERED SALE DEED DATED 10/2/2006 AND THEREFORE, THE ASSESSEE CL AIMED TO BE THE OWNER AND IN POSSESSION OF THE PLOTS IN QUESTION. FU RTHER THE ASSESSEE RECEIVED THE CHEQUES IN HIS OWN NAME AND WHI CH WAS DEPOSITED IN THE ASSESSEES OWN ACCOUNT. EVEN THE A SSESSEE HAS NOT CLAIMED THAT THE SALE CONSIDERATION RECEIVED BY THE ASSESSEE WAS ITA 656/JP/2016_ BHOPAL SINGH SHEKHAWAT VS ITO 15 TRANSFERRED TO THE HUF ACCOUNT. THE FACTS RECORDED I N THE SALE DEED CANNOT BE DISPUTED BY THE ASSESSEE MERELY BASED ON THE SUBMISSIONS THAT THESE PLOTS BELONG TO THE HUF. FURTHER THE ASSESSIN G OFFICER HAS POINTED OUT THAT THE HUF WAS ALLOTTED PAN ONLY ON 01/11/2013 WHICH SHOWS THAT ONLY DURING THE REASSESSMENT PROCEEDINGS, THE ASSES SEE APPLIED FOR PAN ON BEHALF OF THE HUF WHEREAS THE TRANSACTION OF SALE OF PLOTS TOOK PLACE IN THE YEAR 2008 AND THESE PLOTS WERE ACQUIRED IN THE Y EAR 2006 AS THE FACTS NARRATED IN THE SALE DEED. THEREFORE, WHEN THE FACTS AS NARRATED IN THE SALE DEED AS WELL AS THE ALLOTMENT OF PAN TO THE HUF ON 01/11/2013 ARE NOT IN DISPUTE THEN THE CLAIM OF THE ASSESSEE THAT THESE PLOTS BELONG TO THE HUF IS WITHOUT ANY BASIS AND SUPPORTING EVIDENCE . IT IS PERTINENT TO NOTE THAT MERE A FAMILY SETTLEMENT WOULD NOT IPSO FA CTO CREATE AN HUF AND FURTHER ONCE THE PLOTS IN QUESTION WERE NOT PURC HASED BY THE HUF BUT ACQUIRED BY THE ASSESSEE IN HIS PERSONAL NAME AND A LSO SOLD BY THE ASSESSEE IN HIS PERSONAL CAPACITY THEN THE CLAIM OF THE ASSESSEE IS OTHERWISE INCONSISTENT WITH THE ADMITTED FACTS. THE LD . CIT(A) HAS CONSIDERED THIS ISSUE AS UNDER: 3.1.2 DETERMINATION : (I) I HAVE DULY CONSIDERED THE SUBMISSIONS OF THE A PPELLANT, ASSESSMENT ORDER AND THE MATERIAL PLACED ON RECORD. DURING THE YEAR UNDER CONSIDERATION, THE APPELLANT HAS SOLD TWO PLOTS ON 07.01.2008 FOR TOTAL SALE CONSIDERATION OF RS. 10,80,962/-. IT WAS NOTED BY THE ASSESSING ITA 656/JP/2016_ BHOPAL SINGH SHEKHAWAT VS ITO 16 OFFICER THAT THE APPELLANT HAS NOT SHOWN ANY CAPITA L GAIN INCOME ON THE SALE OF THESE PLOTS IN ITS RETURN OF INCOME. IT WAS THE CONTENTION OF THE APPELLANT THAT THESE TWO PLOTS WERE ACQUIRED OUT OF BHOPAL SINGH SHEKHAWAT (HUF) AND BELONGED TO THE SAID HUF ONLY. HOWEVER, THE AO REJECTED THE CONTENTION OF THE APPELLANT AND HELD T HAT THE PROPERTIES WERE NOT SOLD BY THE HUF BUT BY THE ASSESSEE HIMSEL F IN VIEW OF THE FOLLOWING REASONS: * THAT THE PLOTS WERE PURCHASED IN 2006 AND SOLD I N 2008 AND THE HUF WAS ALLOTTED THE PAN ONLY ON 01.11.2013. * THAT THE ASSESSEE HAS NO BANK ACCOUNT FOR THE HUF . * THAT THE ASSESSEE HAS NEVER FILED RETURN OF INCO ME FOR THE HUF. * THAT THE SALE PROCEEDS OF THE ABOVE MENTIONED TWO PLOTS WERE REFLECTED IN THE INDIVIDUAL SAVING BANK ACCOUNT OF THE ASSESSEE. * THAT THE PURCHASE AND SALE DEED NOWHERE MENTIONS THAT THE ABOVE TWO PLOTS WERE PURCHASED AND SOLD BY THE HUF. * THAT THE ASSESSEE HAS FAILED TO PRODUCE ANY EVIDE NCE TO SHOW THAT THE ABOVE TWO PLOTS WERE IN THE POSSESSION OF THE H UF. (II) DURING THE APPELLATE PROCEEDINGS, IT WAS SUBMI TTED BY THE APPELLANT THAT A FAMILY SETTLEMENT BETWEEN APPELLANT AND HIS TWO B ROTHERS WAS REACHED AND EXECUTED ON 01.05.2001 WHEREIN THE APPELLANT GO T 1/3 SHARE IN THE ANCESTRAL AGRICULTURAL LAND AND CASH OF RS. 3,00,00 0/- WITH GOLD ORNAMENTS WEIGHING 40 TOLAS. THESE APART, 1/3 SHARE IN THE RESIDENTIAL HOUSE AND NOHRA SITUATED IN GRAM DHANA TEHSIL, HARY ANA ALSO CAME TO THE SHARE OF THE APPELLANT. THE SAID PROPERTY WAS Y IELDING RENTAL INCOME RIGHT SINCE 2001 AND THUS, IT WERE THE ACCUMULATION S AND THE SAVINGS, OUT OF WHICH RS. 9,00,000/- BEING THE COST WAS INVESTED IN THE PURCHASES OF ITA 656/JP/2016_ BHOPAL SINGH SHEKHAWAT VS ITO 17 THE SUBJECTED PLOTS IN THE YEAR 2006. IN SUPPORT OF THE ABOVE REFERRED FAMILY PARTITION, THE APPELLANT FILED AFFIDAVITS OF TWO WITNESSES AS ADDITIONAL EVIDENCE (PB- 117-120). (III) I HAVE GONE THROUGH THE FAMILY SETTLEMENT DAT ED 01.05.2001 (PB- 5) AND FOUND IT TO BE A SELF SERVING DOCUMENT AS NO DOCUME NTARY EVIDENCE HAS BEEN SUBMITTED WHICH SUPPORT THAT THE FATHER OF THE APPELLANT LATE SHRI CHHATRAPAL SINGH SHEKHAWAT WAS OWNING RS. 9 LAC IN CASH, 120 TOLAS OF GOLD JEWELLERY AND AGRICULTURE LAND. FURTHER, NO EV IDENCE HAS BEEN SUBMITTED WHICH MAY INDICATE THAT THE INHERITED PRO PERTIES WERE YIELDING ANY RENTAL INCOME AS CLAIMED BY THE APPELLANT. NOTH ING HAS BEEN BROUGHT ON RECORD THAT THE ALLEGED PROPERTIES WERE OWNED BY THE FATHER OF THE APPELLANT AS HUF PROPERTY. THE APPELLANT HAS FILED THE COPIES OF NAKAL JAMABANDI/ PADAT PATWAR OF THE APPELLANT ALON G WITH HIS BROTHERS (PB: 39-45). ON A PERUSAL OF THE SAME, IT IS OBSERV ED THAT THESE DOCUMENTS DO NOT REVEAL THAT THE AGRICULTURE LANDS STATED THEREIN WERE INHERITED AS HUF PROPERTY. IT IS EVIDENT FROM THE P URCHASE DEED OF THE PLOTS DATED 26.09.2006 (PB: 66-79) AND 09.10.2006 ( PB: 80-93) THAT THE PLOT NO. 10 AND 11 WERE PURCHASED BY THE APPELLANT IN ITS INDIVIDUAL CAPACITY ONLY AND NOT AS KARTA OF BHOPAL SINGH SHEK HAWAT (HUF) AS CLAIMED BY THE APPELLANT. IT IS ALSO EVIDENT FROM T HE SALE DEEDS DATED 07.01.2008 IN RESPECT OF PLOTS NO. 10 (PB: 94-105) AND 11 (PB: 106-116) THAT THESE WERE SOLD BY THE APPELLANT IN ITS INDIVI DUAL CAPACITY ONLY. IT MAY BE MENTIONED THAT THESE PURCHASE DEEDS AND SALE DEEDS ARE REGISTERED DOCUMENTS AND IT IS A SETTLED LAW THAT W HAT IS APPARENT IS REAL UNLESS CONTROVERTED. THE ONUS LAY UPON THE PERSON, WHO ALLEGES THAT WHAT IS APPARENT IS NOT REAL. RELIANCE IS PLACED ON THE DECISION OF HONBLE APEX COURT IN THE CASE OF CIT (CENTRAL) V/S DAULAT RAM RAWATMULL (1973) 87 ITR 349 (SC), FOLLOWED IN CIT V/S BEDI & CO. PVT . LTD. (1998) 230 ITR 580 (SC). IN THE INSTANT CASE UNDER CONSIDERATION, THE APPELLANT HAS FAILED ITA 656/JP/2016_ BHOPAL SINGH SHEKHAWAT VS ITO 18 TO BROUGHT ON RECORD ANY MATERIAL WHICH MAY LEAD TO THE CONCLUSION THAT THE APPARENT IS NOT REAL. THE ALLEGED FAMILY SETTLE MENT AS STATED EARLIER IS ONLY A SELF SERVING DOCUMENT AND HENCE CANNOT BE RE LIED UPON. (IV) IN VIEW OF THE ABOVE DISCUSSION, IT IS HELD TH AT THE SHORT TERM CAPITAL GAIN OF RS. 1,18,432/- ON ACCOUNT OF SALE OF TWO PLOTS H AS RIGHTLY BEEN ASSESSED BY THE AO IN THE HANDS OF THE APPELLANT, H ENCE THIS GROUND OF APPEAL IS REJECTED. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE WH ERE THESE PLOTS WERE ACQUIRED BY THE ASSESSEE THROUGH SALE DEED AND ALSO SOLD BY THE ASSESSEE IN HIS PERSONAL CAPACITY AND SALE CONSIDERATION WAS ALSO RECEIVED BY THE ASSESSEE AND DEPOSITED IN HIS PERSONAL BANK ACCOUNT , THEN THE CLAIM OF THE ASSESSEE IS DEVOID OF ANY MERIT OR SUBSTANCE. H ENCE, WE CONFIRM THE ORDER OF THE LD. CIT(A) QUA THIS ISSUE. 11. GROUND NO. 3 OF THE APPEAL IS REGARDING THE ADD ITION OF LONG TERM CAPITAL GAIN ON SALE OF PLOTS NO. 157A AND 157B. THE ASSESSEE SOLD TWO PLOTS OF LAND BEARING NUMBER 157A AND 157B AT VISHA L NAGAR, ROAD NO. 17, VKI AREA, JAIPUR ON 12/6/2007. THE ASSESSEE CLAI MED THAT THE PLOTS WERE SOLD BY HIM AS A POWER OF ATTORNEY HOLDER OF SHR I MOHD. IRSHAD, S/O- SH. IQBAL HUSSAIN EXECUTED ON 25/6/2001. THE ASSESSI NG OFFICER ISSUED SUMMON TO MOHD. IRSHAD BUT HE DID NOT APPEAR BEFORE THE ASSESSING OFFICER NOR THE ASSESSEE PRODUCED HIM FOR EXAMINATI ON. THE ASSESSING OFFICER, ACCORDINGLY, HELD THAT THE PLOTS BELONG TO THE ASSESSEE AND ITA 656/JP/2016_ BHOPAL SINGH SHEKHAWAT VS ITO 19 ASSESSED THE CAPITAL GAIN BY TREATING THE COST OF A CQUISITION AT NIL. THE ASSESSEE CHALLENGED THE ACTION OF THE ASSESSING OFF ICER BEFORE THE LD. CIT(A) BUT COULD NOT SUCCEED RATHER THE LD. CIT(A) H AS DIRECTED THE ASSESSING OFFICER TO VERIFY THE STAMP DUTY VALUATIO N OF THE PLOT WHICH WAS VALUED AT RS. 1,32,192/- AS AGAINST THE SECOND PLOT VALUED AT RS. 6,25,000/- AND THEREAFTER RECOMPUTED THE CAPITAL GA IN U/S 50C OF THE ACT. 12. BEFORE US, THE LD. AR OF THE ASSESSEE HAS SUBMI TTED THAT THE SUBJECT PROPERTY LEGALLY AND FACTUALLY BELONGS TO MOHD. IRS HAD AS EVIDENT FROM THE POWER OF ATTORNEY DATED 25/6/2001 AS WELL AS THE SALE DEEDS DATED 12/6/2007. THE LD AR HAS SUBMITTED THAT THE ASSESSI NG OFFICER HAS NOT DOUBTED THE POWER OF ATTORNEY AND EVEN THE ASSESSEE HAS EXECUTED THE SALE DEEDS AS A POWER OF ATTORNEY HOLDER AND NOT AS THE OWNER OF PLOTS OF LAND, THEREFORE, THE CAPITAL GAIN ARISING FROM SALE OF THESE PLOTS OF LAND CANNOT BE ASSESSED TO TAX IN THE HAND OF THE ASSESS EE. THE ASSESSEE ACTED IN A FIDUCIARY CAPACITY ON BEHALF OF THE THIR D PARTY AS A POWER OF ATTORNEY HOLDER, THEREFORE, LEGALLY THE PROPERTIES WERE TRANSFERRED BY MOHD. IRSHAD AND NOT BY THE ASSESSEE WHO HAS ACTED AS AN AGENT. IN SUPPORT OF HIS CONTENTION, HE HAS RELIED UPON THE D ECISION OF HON'BLE SUPREME COURT IN THE CASE OF SURAJ LAMP AND INDUSTR IES (P) LTD. VS. STATE ITA 656/JP/2016_ BHOPAL SINGH SHEKHAWAT VS ITO 20 OF HARYANA (2012) 340 ITR 1. THE LD. AR HAS ALSO RELI ED UPON THE FOLLOWING DECISIONS OF THE COORDINATE BENCHES OF THI S TRIBUNAL: (I) GYAN CHAND AGARWAL VS ACIT IN ITA NO. 266/JP/2017 ORDER DATED 10/07/2017. (II) SHRI SURAJ NARAIN KHATORIA VS ITO IN ITA NO. 10 43/JP/2011 DATED 27/05/2013. THE LD AR HAS FURTHER SUBMITTED THAT AS PER THE RECO RD, THE PROPERTIES WERE PURCHASED BY MOHD. IRSHAD ON 14/3/2001 AND WERE TRANSFERRED IN HIS NAME BY JDA VIDE LETTER DATED 17/3/2001. THOUGH THE ASSESSEE RECEIVED SALE CONSIDERATION BUT IT WAS FOR AND ON BE HALF OF THE SELLER ONLY. THE LD. AR ALSO OBJECTED TO THE ENHANCEMENT OF THE ASSESSMENT BY THE LD. CIT(A) REGARDING THE STAMP DUTY VALUATION. ALTERNATI VELY, THE LD. AR HAS SUBMITTED THAT THE LD. CIT(A) HAS IGNORED THE PROVIS IONS OF SECTION 48 OF THE ACT REGARDING THE COST OF ACQUISITION. ONCE IT WAS HELD THAT THE ASSESSEE IS THE BENEFICIAL OWNER OF THE PROPERTY THE N THE COST OF ACQUISITION AS ON THE DATE OF ACQUISITION SHALL BE COMPUTED EITHER AS FAIR MARKET VALUE OF THE PROPERTY OR THE COST OF ACQUISI TION IN THE HAND OF MD. IRSHAD. 13. ON THE OTHER HAND, THE LD DR HAS SUBMITTED THAT THE ASSESSEE HAS NOT ONLY SOLD THE PLOTS IN QUESTION BUT ALSO RECEIV ED THE SALE CONSIDERATION IN HIS PERSONAL CAPACITY WHICH WAS NOT TRANSFERRED TO THE ALLEGED OWNER OF ITA 656/JP/2016_ BHOPAL SINGH SHEKHAWAT VS ITO 21 THE PROPERTY. THE ASSESSEE WAS THE REAL BENEFICIAL OWN ER OF THE PLOTS OF LAND AS THE ASSESSEE WAS AUTHORIZED TO SELL THE PLOT S AND RECEIVE THE CONSIDERATION. ONCE THE CONSIDERATION WAS RECEIVED B Y THE ASSESSEE IN HIS OWN NAME AND NOT IN THE NAME OF THE ALLEGED OWNER THE N THE SAID AMOUNT WILL BE TREATED AS INCOME OF THE ASSESSEE ARI SING FROM SALE OF THE CAPITAL ASSET. HE HAS RELIED UPON THE ORDERS OF TH E AUTHORITIES BELOW. 14. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. THOUGH, THE ASSESSEE WAS APPOINTE D AS GENERAL POWER OF ATTORNEY BY MR. MD. IRSHAD VIDE POWER OF ATT ORNEY DATED 25/6/2001, HOWEVER, THE ASSESSEE SUBSEQUENTLY DIVIDE D THE PLOT OF LAND IN QUESTION BEARING NO. 157 INTO TWO PARTS AND ALLOT TED NEW NUMBER BEING 157A AND 157B. THIS ACTION OF THE ASSESSEE DIVIDING THE PLOT IN QUESTION INTO TWO PLOTS SHOWS THAT THE ASSESSEE WAS HAVING CON TROL OVER THE PLOTS AS THE OWNER OF THE PLOTS AND NOT MERELY A POWER OF A TTORNEY OF THE ORIGINAL OWNER. FURTHER IT IS NOT IN DISPUTE THAT TH E ASSESSEE RECEIVED SALE CONSIDERATION IN HIS OWN NAME. THE CHEQUES FOR SALE C ONSIDERATION WERE RECEIVED IN THE NAME OF THE ASSESSEE AND NOT IN THE NAME OF MD. IRSHAD, THEREFORE, THE CONTENTION OF THE ASSESSEE THAT THE SALE DEED HAS BEEN EXECUTED BY THE ASSESSEE AS AN ATTORNEY OF MD. IRSH AD IS CONTRARY TO THE FACT THAT THE CONSIDERATION WAS RECEIVED THROUGH CH EQUE IN THE NAME OF ITA 656/JP/2016_ BHOPAL SINGH SHEKHAWAT VS ITO 22 THE ASSESSEE AND NOT IN THE NAME OF MD. IRSHAD. THE ASSESSEE HAS ALSO NOT DISPUTED THE FACT THAT THE SALE CONSIDERATION WA S RETAINED BY THE ASSESSEE AND NOT TRANSFERRED TO MD. IRSHAD, THEREFO RE, ALL THESE FACTS GO TO PROVE THAT THE ASSESSEE WAS HAVING FULL CONTROL A ND BENEFICIAL OWNERSHIP OF THE PLOTS IN QUESTION. FURTHER WE NOTE T HAT THE ASSESSING OFFICER TRIED TO EXAMINE MR. MD. IRSHAD, HOWEVER, HE DID NOT RESPOND TO THE SUMMON ISSUED U/S 131 OF THE ACT AND THE ASSESS EE HAS ALSO NOT PRODUCED HIM BEFORE THE ASSESSING OFFICER. EVEN THE ASSESSEE HAS NOT CLAIMED THAT HE WOULD PRODUCE MD. IRSHAD FOR EXAMINA TION BEFORE THE ASSESSING OFFICER. THEREFORE, THE CLAIM OF THE ASSES SEE IS CONTRARY TO THE FACTS ON THE GROUND THAT THE ASSESSEE HAS ACTED AS THE DE-FACTO OWNER OF THE PLOTS OF LAND AND RECEIVED THE CONSIDERATION IN HIS PERSONAL CAPACITY AND NOT AS A REPRESENTATIVE OF MD. IRSHAD. THE LD. C IT(A) HAS CONSIDERED THIS ISSUED AS UNDER: (VI) I HAVE DULY CONSIDERED THE ALTERNATE CONTENTI ON OF THE APPELLANT. THOUGH, CERTAINLY THERE MUST BE SOME COST OF ACQUISITION FO R ACQUIRING THE PLOT NO. 157 OVER WHICH ALL THE RIGHTS OF AN OWNER WERE ACQU IRED BY THE APPELLANT THROUGH A POWER OF ATTORNEY. IT MAY BE MENTIONED TH AT THE ONUS IS UPON THE APPELLANT TO PROVIDE EVIDENCE IN SUPPORT OF COS T OF ACQUISITION OF THE PROPERTY, WHICH WAS NOT DISCHARGED BY THE APPELLANT . AS THE APPELLANT HAS NOT COME FORWARD WITH CLEAN HANDS I.E. IT HAD N OT PROVIDED THE COPY OF THE AGREEMENT TO SELL WITH MOHD. IRSHAD, NO DEDU CTION ON ACCOUNT OF COST OF ACQUISITION COULD BE GIVEN AS NO EVIDENCE W AS FURNISHED IN THIS REGARD. ITA 656/JP/2016_ BHOPAL SINGH SHEKHAWAT VS ITO 23 (VII) FURTHER, IT IS NOTED FROM THE SALE DEEDS PLA CED ON RECORD THAT PLOT NO. 157A AND 157B ADMEASURING 116.11 AND 130.05 SQUARE METERS WERE SOLD FOR RS. 1,11,000/- AND RS. 6,25,000/- AND THE SUB R EGISTRAR FOR THE PURPOSE OF STAMP DUTY VALUED THE SAME AT RS. 1,32,1 92 AND RS. 6,25,000/- RESPECTIVELY. IT IS NOT UNDERSTANDABLE, HOW THERE CAN BE SO MUCH DIFFERENCE IN THE SALE CONSIDERATION AND THE V ALUE ADOPTED BY SUB REGISTRAR FOR ALMOST SIMILAR SIZE OF PLOT (DIFFERENCE OF ONLY 13.94 SQ. METERS) WHICH ARE NOTHING BUT PART OF PLOT NO. 157 ONLY AN D BOTH OF THEM WERE SOLD ON THE SAME DATE. THE AO IS DIRECTED TO R EFER THE MATTER TO THE IG (STAMPS) OR OTHER APPROPRIATE AUTHORITY FOR TAKI NG NECESSARY ACTION IN RESPECT OF PLOT NO. 157A. THE ASSESSING OFFICER IS FURTHER DIRECTED TO RECOMPUTED CAPITAL GAINS U/S 50C AFTER GETTING THE REPORT FROM CONCERNED AUTHORITY. IN VIEW OF THE ABOVE DISCUSSION, THIS GROUND OF AP PEAL IS REJECTED. THEREFORE, SO FAR AS THE OWNERSHIP OF THE PLOTS OF L AND IN QUESTION IS CONCERNED, WE FIND THAT THE ASSESSEE HAS SOLD THE PL OTS IN QUESTION AFTER DIVIDING ONE PLOT INTO TWO WHICH SHOWS THAT THE ASSESS EE WAS HAVING THE DOMAIN OVER THE PROPERTY AND ALSO ACTED AS BENEFICI AL OWNER AND NOT MERELY A POWER OF ATTORNEY HOLDER. AS PER THE ATTORN EY THE ASSESSEE WAS NOT AUTHORIZED TO DIVIDE THE PLOTS BUT ONLY TO ACT ON BEHALF OF THE PRINCIPAL TO REPRESENT HIM IN CERTAIN MATTERS INCLUDING THE S ALE OF PLOTS IN QUESTION. THE DIVISION OF THE PLOT BY THE ASSESSEE ITSELF SHOWS THAT THE ASSESSEE WAS HAVING FULL DOMAIN AND CONTROL AS THE OWNER OF T HE PROPERTY IN QUESTION. AS REGARDS THE ALTERNATIVE PLEA THAT ONCE THE ASSESSEE WAS ITA 656/JP/2016_ BHOPAL SINGH SHEKHAWAT VS ITO 24 TREATED AS AN OWNER THEN EVEN IF THE COST OF ACQUIS ITION IS NOT AVAILABLE ON THE DOCUMENT, THE COST OF ACQUISITION AS ON THE DAT E OF EXECUTION OF POWER OF ATTORNEY DATED 25/6/2001 BE TAKEN AS PREVAI LING DLC RATES/FAIR MARKET VALUE. THE ASSESSING OFFICER IS DIRECTED TO R ECOMPUTE THE CAPITAL GAIN BY ALLOWING THE COST OF ACQUISITION AS DLC/FAIR MARKET VALUE OF THE PLOT AS ON 25/6/2001. ACCORDINGLY, THIS ISSUE IS SE T ASIDE TO THE RECORD OF THE ASSESSING OFFICER. 15. GROUND NO. 4 OF THE APPEAL IS REGARDING THE DIR ECTIONS OF THE LD. CIT(A) FOR REFERENCE OF THE MATTER TO I.G.(STAMPS) F OR PROPER VALUATION OF PLOT NO. 157A IN VIOLATION OF THE PROVISIONS OF SEC TION 251(2) OF THE ACT. 16. THE LD AR OF THE ASSESSEE HAS SUBMITTED THAT THE LD. CIT(A) HAS EXCEEDED HIS JURISDICTION U/S 251(2) OF THE ACT WHIL E DIRECTING THE ASSESSING OFFICER TO REFER THE MATTER TO THE I.G. ( STAMPS) FOR PROPER STAMP VALUATION AND THEN RECOMPUTE THE LONG TERM CA PITAL GAIN WHICH AMOUNTS TO ENHANCEMENT OF ASSESSMENT. THE LD AR HAS THUS CONTENDED THAT IN ABSENCE OF MANDATORY SHOW CAUSE NOTICE, THES E DIRECTIONS ARE IN VIOLATION OF PROVISIONS OF SECTION 251(2) OF THE AC T. 17. ON THE OTHER HAND, THE LD DR HAS SUBMITTED THAT IT WAS ONLY A SET ASIDE DIRECTION TO THE ASSESSING OFFICER AND NOT AN ENHANCEMENT OF ASSESSMENT AS THE LD. CIT(A) HAS NOT DETERMINED THE FULL VALUE ITA 656/JP/2016_ BHOPAL SINGH SHEKHAWAT VS ITO 25 CONSIDERATION OF PLOT OF LAND IN QUESTION, THEREFOR E, THE ASSESSEE CAN RAISE OBJECTION BEFORE THE ASSESSING OFFICER. HE HAS RELI ED UPON THE ORDERS OF THE AUTHORITIES BELOW. 18. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. AS IT IS APPARENT FROM THE FIND ING OF THE LD. CIT(A) REPRODUCED IN THE FOREGOING PARA OF THIS ORDER THAT THE LD. CIT(A) HAS DIRECTED THE ASSESSING OFFICER TO REFER THE MATTER TO IG(STAMPS) AND RECOMPUTED THE LONG TERM CAPITAL GAIN ACCORDINGLY. THE DIRECTIONS OF THE LD. CIT(A) WAS LIKELY TO ENHANCE THE ASSESSMENT, THE REFORE, SUCH DIRECTIONS WHICH HAD ELEMENT OF ENHANCEMENT OF ASSES SMENT CANNOT BE GIVEN WITHOUT MANDATORY SHOW CAUSE NOTICE AND OPPORTU NITY OF HEARING GIVEN TO THE ASSESSEE. THE PROVISIONS OF SECTION, 25 1(2) OF THE ACT ARE UNAMBIGUOUS ON THIS POINT WHICH ENVISAGE THAT THE LD . CIT(A) SHALL NOT ENHANCE THE ASSESSMENT OR A PENALTY UNLESS THE APPE LLANT HAS A REASONABLE OPPORTUNITY OF SHOW CAUSE AGAINST SUCH EN HANCEMENT. THUS, IT IS A MANDATORY PRECONDITION TO ISSUE A SHOW CAUSE NO TICE TO THE ASSESSEE PRIOR TO THE ENHANCEMENT OF ASSESSMENT. WE FIND THA T THE DIRECTIONS ISSUED BY THE LD. CIT(A) ARE CLEARLY IN THE NATURE O F ENHANCEMENT BUT WITHOUT GIVING A SHOW CAUSE NOTICE TO THE ASSESSEE, T HEREFORE, IT IS A CLEAR VIOLATION OF MANDATORY COMPLIANCE OF SHOW CAUSE NOTI CE AS PROVIDED U/S ITA 656/JP/2016_ BHOPAL SINGH SHEKHAWAT VS ITO 26 251(2) OF THE ACT. ACCORDINGLY, THE SAID PART OF TH E FINDINGS OF THE LD. CIT(A) IS SET ASIDE. 19. GROUND NO. 5 OF THE APPEAL IS REGARDING THE ADD ITION MADE ON ACCOUNT OF CASH DEPOSIT AS WELL AS CHEQUES DEPOSIT M ADE IN THE BANK ACCOUNT. THE ASSESSING OFFICER NOTED THAT THE ASSES SEE HAS DEPOSITED CASH OF RS. 16,56,000/- IN HIS BANK ACCOUNT DURING THE YEAR UNDER CONSIDERATION AND FURTHER TWO CHEQUES OF RS. 1.00 LA C AND RS. 5.00 LACS RESPECTIVELY WERE ALSO DEPOSITED IN THE BANK ACCOUNT . SINCE THE ASSESSEE HAS FAILED TO EXPLAIN THE SOURCE OF DEPOSITS IN THE BANK ACCOUNT, THEREFORE, THE ASSESSING OFFICER MADE THE ADDITION OF SAID DEPOSITS OF CASH AS WELL AS CHEQUE TO THE INCOME OF THE ASSESSEE. THE ASSESSEE CHALLENGED THE ACTION OF THE ASSESSING OFFICER BEFORE THE LD. CIT(A), BUT COULD NOT SUCCEED. 20. CASH DEPOSIT IN BANK OF RS. 16,56,000/- BEFORE US, THE LD. AR OF THE ASSESSEE HAS SUBMITTE D THAT THE ASSESSEE RECEIVED A SUM OF RS. 16,56,000/- FROM FOU R PERSONS VARYING FROM 3,56,000/- TO 4,50,000/-. THE ASSESSEE PRODUCED THE CONFIRMATION FROM THESE PERSONS ALONGWITH IDENTITY AS WELL AS THEI R LAND HOLDING TO SHOW THE AGRICULTURAL INCOME AND OTHER SOURCE OF INC OME. HE HAS REFERRED TO THE AFFIDAVITS OF THESE PERSONS TO ESTABLISH THE CREDITWORTHINESS AND ITA 656/JP/2016_ BHOPAL SINGH SHEKHAWAT VS ITO 27 GENUINENESS OF THE AMOUNT RECEIVED BY THE ASSESSEE. THUS, THE ASSESSEE DISCHARGED ITS INITIAL ONUS OF PROVING THE IDENTITY , CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTIONS. ALL THE FOUR PERSO NS HAVE CONFIRMED HAVING GIVEN ADVANCES TO THE ASSESSEE AND EXPLAINED THE SOURCE THROUGH THEIR AFFIDAVITS. THE ASSESSING OFFICER AS WELL AS TH E LD. CIT(A) HAS REJECTED THE EVIDENCE PRODUCED BY THE ASSESSEE WITHO UT CONDUCTING A FURTHER ENQUIRY, THEREFORE, ONCE THE ASSESSEE HAS D ISCHARGED ITS INITIAL ONUS IT IS SHIFTED TO THE REVENUE TO PROVE THE CONT RARY. THE LD AR HAS THUS CONTENDED THAT THE ADDITION MADE BY THE ASSESSING O FFICER MAY BE DELETED. HE HAS FURTHER POINTED OUT THAT ALL THESE FOUR PERSONS HAVE AGRICULTURAL INCOME AS WELL AS AGRICULTURAL LAND HOL DING TO PROVE THE SOURCE OF AMOUNT GIVEN TO THE ASSESSEE. THE CASH DEPOSITED IN THE ACCOUNT WAS ALSO REFUNDED DURING THE YEAR UNDER CONSIDERATION. THEREFORE, ONCE THE AMOUNT WAS REPAID WITHIN THE YEAR THEN IT CANNOT BE T REATED AS UNEXPLAINED CASH CREDIT. THE LD AR HAS RELIED UPON T HE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CI T VS. SHREE RAJASTHAN SYNTEX LTD. (2009) 313 ITR 231. 21. ON THE OTHER HAND, THE LD DR HAS SUBMITTED THAT THE ASSESSEE FAILED TO PRODUCE ANY SUPPORTING EVIDENCE BEFORE THE LD. C IT(A) AND SUBSEQUENTLY THE ASSESSEE HAS PRODUCED THE AFFIDAVI TS OF FOUR PERSONS ITA 656/JP/2016_ BHOPAL SINGH SHEKHAWAT VS ITO 28 BEFORE THE LD. CIT(A) WHICH WAS DULY CONSIDERED BY T HE LD. CIT(A) WHILE DECIDING THIS ISSUE. THE LD. CIT(A) HAS EXAMINED THE AFFIDAVITS FILED BY THE ASSESSEE OF EACH OF THE FOUR PERSONS AND FOUND THAT NONE OF THE PERSONS WERE HAVING THE CAPACITY TO ADVANCE THE HUGE AMOUNT TO THE ASSESSEE. THEREFORE, THE ASSESSEE HAS FAILED TO EXPLAIN THE CA SH DEPOSIT IN THE BANK ACCOUNT AND SPECIFICALLY THE CREDITWORTHINESS AND GE NUINENESS OF THE TRANSACTION. THOUGH THE ASSESSEE HAS TAKEN A PLEA W HICH IS AN AFTERTHOUGHT THAT THE AMOUNT WAS RECEIVED FROM THESE PERSONS FOR MAKING AN APPLICATION FOR ALLOTMENT OF PETROL PUMP, HOWEVER , NO EVIDENCE WAS PRODUCED BY THE ASSESSEE EITHER BEFORE THE AUTHORIT IES BELOW OR BEFORE THIS TRIBUNAL IN SUPPORT OF THAT CLAIM. HE HAS RELIE D UPON THE ORDERS OF THE AUTHORITIES BELOW. 22. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. THERE IS NO DISPUTE THAT THE ASS ESSEE HAS NOT PRODUCED ANY EVIDENCE BEFORE THE ASSESSING OFFICER TO EXPLAIN THE SOURCE OF CASH DEPOSIT OF RS. 16,56,000/- IN THE BANK ACCO UNT. HOWEVER, BEFORE THE LD. CIT(A), THE ASSESSEE PRODUCED FOUR AFFIDAVI TS OF FOUR PERSONS AND CLAIMED THE AMOUNT WAS RECEIVED AS AN ADVANCE FROM T HESE FOUR PERSONS. THE DETAILS AND PARTICULARS OF THE PERSON AND AMOUNT CLAIMED TO HAVE BEEN RECEIVED ARE AS UNDER: ITA 656/JP/2016_ BHOPAL SINGH SHEKHAWAT VS ITO 29 (I) NARAYAN LAL CHOUDHARY RS. 4,500,000/- (II) DILIP SINGH RS. 4,50,000/- (III) SARWAN SINGH RS. 3,56,000/- (IV) TEJPAL SINGH RS. 4,00,000/- TOTAL RS. 16,56,000/- THE ASSESSEE HAS NOT SHOWN THESE CASH CREDITS IN THE BOOKS OF ACCOUNT BUT IT ONLY DEPOSITED IN THE BANK ACCOUNT OF THE AS SESSEE AND THEREFORE, THE ADDITION WAS MADE BY THE ASSESSING OFFICER ON AC COUNT OF UNEXPLAINED CASH DEPOSIT IN THE BANK ACCOUNT. BEFOR E THE LD. CIT(A), THE ASSESSEE HAS ALSO TAKEN A PLEA THAT THESE ADVANCES WERE RECEIVED FROM THESE FOUR PERSONS FOR MAKING AN APPLICATION FOR AL LOTMENT OF A PETROL PUMP. THE ASSESSEE HAS ALSO CLAIMED THAT AMOUNT WAS A LSO REFUNDED IN CASH DURING THE YEAR UNDER CONSIDERATION. WE FIND T HAT THE ASSESSEE HAS NOT PRODUCED ANY DOCUMENTARY EVIDENCE IN SUPPORT OF THE CLAIM THAT THE ADVANCES WERE TAKEN BY THE ASSESSEE FOR THE PURPOSE OF MAKING THE APPLICATION FOR ALLOTMENT OF PETROL PUMP. EVEN THE DETAILS OF ALLOTMENT OF PETROL PUMP WERE ALSO NOT GIVEN BY THE ASSESSEE. HEN CE, THIS EXPLANATION OF THE ASSESSEE THAT HE HAS RECEIVED THE ADVANCES F ROM FOUR PERSONS DO NOT INSPIRE ANY CONFIDENCE WHEN THE ASSESSEE HAS NOT PRODUCED ANY DOCUMENTARY EVIDENCE TO SHOW THAT THE ASSESSEE HAS A CTUALLY APPLIED FOR ANY PETROL PUMP. EVEN THE DETAILS OF THE PROPOSED P ETROL PUMP WERE ALSO NOT GIVEN BY THE ASSESSEE. HENCE, WE FIND THAT IT IS ONLY AN AFTERTHOUGHT, BASELESS CLAIM MADE BY THE ASSESSEE THAT THE SOURCE OF CASH DEPOSIT IN ITA 656/JP/2016_ BHOPAL SINGH SHEKHAWAT VS ITO 30 THE BANK ACCOUNT IS AN AMOUNT RECEIVED FROM THESE P ERSONS. ONCE THE ASSESSEE HAS FAILED TO PROVE THE PURPOSE OF TAKING THE ADVANCE, THE AFFIDAVITS FILED BY THE ASSESSEE FROM THESE PERSONS WILL NOT SERVE ANY PURPOSE. THE LD. CIT(A) HAS CONSIDERED THIS ISSUE AS UNDER: 3.3.2 DETERMINATION: (I) I HAVE CAREFULLY PERUSED THE SUBMISSIONS OF THE APPELLANT AND THE MATERIAL PLACED ON RECORD. DURING THE APPELLATE PROCEEDINGS, THE APPELLANT FILED COPIES OF AFFIDAVITS DATED 07.11.2015 OF SHRI NARAY AN LAL CHOUDHARY, SHRI DILIP SINGH, SHRI SHRAVAN SINGH AND SHRI TEJPAL SIN GH, WHEREIN ALL OF THEM CLAIMED TO BE FRIENDS OF THE APPELLANT, ADVANCED HU GE AMOUNT TO APPELLANT IN CASH FOR THE APPLICATION MADE BY THE APPELLANT F OR ALLOTMENT OF A PETROL PUMP AND RECEIVED BACK THE SAME DURING THE YEAR UND ER CONSIDERATION IN CASH ONLY. IT WAS PRAYED BY THE APPELLANT THAT THES E AFFIDAVITS MAY BE ADMITTED AS ADDITIONAL EVIDENCE UNDER RULE 46A OF T HE IT RULES AS SUFFICIENT OPPORTUNITY WAS NOT PROVIDED BY THE AO AT THE ASSES SMENT STAGE TO PROVE THEIR IDENTITY, CREDITWORTHINESS GENUINENESS OF THE CASH CREDITORS. AS THESE ADDITIONAL EVIDENCES GOES TO THE ROOT OF THE MATTER AND REQUIRED FOR DECIDING THE APPEAL, HENCE, THESE ARE ADMITTED IN T HE INTEREST OF NATURAL JUSTICE UNDER RULE 46A OF THE I.T. RULES. THESE FOUR AFFIDAVITS ARE SUMMARIZED AS UNDER: S. NO PARTICULARS SOURCE EXPLAINED OTHER EVIDENCE AFFIDAVIT PB NO. 1. NARAYAN LAL CHOUDHARY (RS. 4,50,000/-) OUT OF AGRICULTURAL INCOME AND SALE OF MILK. HE IS HAVING IRRIGATED LAND OF 15 BIG A YIELDING RS. 3-3.5 LACS P. A. AND 10 BUFFALOES. FORM 61 (PB 21) 125 - 126 ITA 656/JP/2016_ BHOPAL SINGH SHEKHAWAT VS ITO 31 2. DILIP SINGH (RS. 4,50,000/-) OUT OF AGRICULTURAL INCOME. HE IS HAVING IRRIGATED LAND OF 30 BIGA YIELDING RS. 7-8 LACS P. A. FORM 61 (PB 19) 127 - 128 3. SARWAN SINGH (RS. 3,56,000/-) OUT OF HIS ACCUMULATED SAVING FROM PENSION AND INCOME FROM BANK OF RS. 15,000/- P.M. AND ALSO OUT OF THE AMOUNT OF RS. 61,317/- RECEIVED AT THE TIME OF RETIREMENT. FORM 61 (PB 22), PENSION SLIP (PB 122), BANK STATEMENT (PB-I1123) 129 - 130 4. TEJPAL SINGH (RS. 4,00,000/-) OUT OF HIS ACCUMULATED SAVING FROM PENSION AND INCOME FROM BANK OF RS. 15,000/- P.M. AND ALSO OUT OF THE AMOUNT OF RS. 1,81,051/- RECEIVED AT THE TIME OF RETIREMENT. FORM 61 (PB 20), PENSION SLIP (PB-II 121) 131 - 132 (II) IT IS NOTED FROM THE EVIDENCES PLACED ON RECOR D RELATING TO COPIES OF KHASRA GIRDAWARI, VOTER ID OF CASH CREDITORS ETC. IN SUPPO RT OF THEIR AGRICULTURE INCOME THAT: * SHRI SHRAWAN SINGH PURCHASED 7 BIGHA OF AGRICULTURE LAND ON 17.05.2000 FOR A SUM OF RS. 80,000/-. IT IS NOTED F ROM PENSION PAYMENT ORDER (PPO) OF SH. SHRAWAN SINGH DATED 08.0 5.1989 THAT PENSIONS BENEFITS OF RS. 61,317/- WERE PAID AND THE MONTHLY PENSION WAS REDUCED TO RS. 289/-. NO BANK STATEMENT HAS BEE N FILED AS CLAIMED BY THE APPELLANT AND NO EVIDENCE WAS FILED IN RESPECT OF INCOME FROM BANK OF RS. 15,000/- PER MONTH. IT IS D IFFICULT TO UNDERSTAND, HOW THE RETIREMENT BENEFITS COULD BE A SOURCE OF GRANTING LOAN OF RS. 3,56,000/- TO THE APPELLANT ESPECIALLY LOOKING TO THE FACT ITA 656/JP/2016_ BHOPAL SINGH SHEKHAWAT VS ITO 32 THAT SH. SHRAWAN SINGH PURCHASED LAND ON 17.05.2000 FOR A SUM OF RS. 80,000/-. * NARAYAN LAL CHOUDHARY: IT IS CLAIMED THAT SH. CHOUDHARY OWN 15 BHIGHAS OF AGRICULTURE LAND AND 10 BUFFALOES. HOWEV ER, NO EVIDENCE WAS SUBMITTED TO SHOW THAT HE WAS DERIVING AGRICULT URE INCOME OF RS. 3 TO RS. 3.5 LAC PER ANNUM BY SALE OF TWO CROPS AS CLAIMED IN THE AFFIDAVIT. THE DATES OF GIVING LOAN TO THE APPELLAN T HAS NOT BEEN STATED. IT IS DIFFICULT TO UNDERSTAND THAT IF THE A NNUAL INCOME IS BETWEEN RS. 3 TO RS. 3.5 LAC, HOW SH. CHOUDHARY COU LD GIVE LOAN OF RS. 4.5 LAC TO THE APPELLANT. * TEJPAL SINGH: IT APPEARS THAT SH. TEJPAL SING RECEIVED A SUM OF R S. 1,89,051/- AS PENSIONERY BENEFITS ON 01.03.2003. TH E PENSION PAYMENT ORDER (PPO) IS NOT LEGIBLE. AS PER PPO, SH. TEJPAL SINGH SHOULD BE HAVING A BANK ACCOUNT WITH THE STATE BANK OF PATIALA, SATNALI, MOHINDERGARH, HARYANA. THE APPELLANT HAS F ILED A COPY OF THE BANK ACCOUNT RELATING TO THE PERIOD 15.09.2014 TO 1 1.02.2015 (PB: 123) WHICH IS NOT RELEVANT FOR THE INSTANT CASE UND ER CONSIDERATION. IT IS PERTINENT TO MENTION THAT AS PER THE ABOVE BANK STATEMENT, THE MONTHLY PENSION WAS TO THE TUNE OF RS. 9267/- ONLY AND NOT RS. 15,000/- AS CLAIMED IN THE AFFIDAVIT. THUS, THE AMO UNT OF RS. 189051/- RECEIVED ON 01.03.2003 CANNOT BE THE BASIS OF ALLEG ED LOAN OF RS. 4 LAC TO THE APPELLANT DURING THE YEAR UNDER CONSIDERATIO N, ESPECIALLY LOOKING TO THE FACT THAT SH. TEJPAL SINGH WAS MAINT AINING A BANK ACCOUNT AS STATED ABOVE IN HIS PPO. * DILIP SINGH: THE APPELLANT HAS FILED JAMABANDI OF SH. DILIP SING H FOR THE SAMVAT YEAR 2068-2071 I.E. PERTAINING TO CALEND AR YEAR 2012-2015 WHICH WAS ISSUED ON 23.12.2014. THE SAME IS NOT REL EVANT AS IT IS NOT RELATING TO THE PERIOD UNDER CONSIDERATION. ITA 656/JP/2016_ BHOPAL SINGH SHEKHAWAT VS ITO 33 * A COPY OF FORM NO. 61 DATED 24.02.2014 HAS BEEN F ILED IN SUPPORT OF THE AFFIDAVIT OF ALL THE ABOVE FOUR CASH CREDITORS. I TAIL TO UNDERSTAND HOW THE SAID FORM NO. 61 CAN PROVE THEIR CREDITWORT HINESS. (III) THUS, THE DOCUMENTS FILED BY THE APPELLANT TO PROVE THE CREDITWORTHINESS OF THESE FOUR CASH CREDITORS ARE OF NO HELP TO THE APP ELLANT. FURTHER, NONE OF THE FOUR CREDITORS IS ASSESSED TO INCOME TAX. ALL T HE TRANSACTION WERE MADE IN CASH. THE LOANS WERE CLAIMED TO BE PROVIDED TO T HE APPELLANT FOR THE PURPORTED PURPOSE OF MAKING AN APPLICATION BY THE A PPELLANT FOR ALLOTMENT OF A PETROL PUMP BUT NO EVIDENCE WAS FILED WHICH MA Y INDICATE THAT THE APPELLANT HAD APPLIED FOR A PETROL PUMP DURING THE YEAR UNDER CONSIDERATION WHICH WAS REJECTED AND THE APPELLANT RECEIVED BACK THE MONEY AND REPAID ITS ALLEGED LOANS. THEREFORE, IN V IEW OF THE ABOVE FACTS, NEITHER THE CREDITWORTHINESS OF THE CREDITORS NOR T HE GENUINENESS OF THE TRANSACTION COULD BE PROVED BY THE APPELLANT. IT MA Y BE MENTIONED THAT IN THE INCOME TAX PROCEEDINGS STRICT RULE OF EVIDENCE DO NOT APPLY AND SURROUNDING CIRCUMSTANCES AND THE TEST OF HUMAN PRO BABILITY HAVE TO BE TAKEN INTO ACCOUNT AS HELD BY THE HONBLE APEX COUR T IN THE CASE OF SUMATI DAYAL VS. CIT [1995] 214 ITR 801 (SC). (IV) THE SURROUNDING CIRCUMSTANCES AS DISCUSSED ABO VE, CLEARLY ESTABLISH THAT AN EFFORT WAS MADE BY THE APPELLANT TO EXPLAIN THE CASH DEPOSIT IN ITS BANK ACCOUNT. HOWEVER, THE APPELLANT FAILED TO PROVE THE CREDITWORTHINESS AND GENUINENESS OF THE CASH TRANSACTIONS AS CLAIMED BY IT. THEREFORE, IN VIEW OF THE ABOVE DISCUSSION AND LOOKING TO THE FACTS AND C IRCUMSTANCES OF THE CASE, IT IS HELD THAT THE APPELLANT WAS NOT ABLE TO PROVE THE SOURCE OF CASH DEPOSIT OF RS. 16,56,000/- IN ITS BANK ACCOUNT AND THE ADDITION MADE BY THE AO IS HEREBY SUSTAINED. ITA 656/JP/2016_ BHOPAL SINGH SHEKHAWAT VS ITO 34 THUS, THE VERY BASIS OF THE ASSESSEES EXPLANATION R EMAINED UNSUBSTANTIATED BY ANY EVIDENCE. ACCORDINGLY, IN VI EW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE IMPUGNED ORDER OF THE LD. CIT(A) QUA THIS ISSUE. 23. CHEQUE DEPOSIT IN BANK OF RS. 6,00,000/- AS REGARDS THE ADDITION MADE ON ACCOUNT OF CHEQUES TOTAL AMOUNTING TO RS. 6.00 LACS DEPOSITED IN THE BANK AC COUNT, THE LD AR OF THE ASSESSEE HAS SUBMITTED THAT THE ASSESSING OFFIC ER HAS MADE THIS ADDITION MERELY ON SUSPICION WHEN THESE PAYMENTS WERE MADE THROUGH ACCOUNT PAYEE CHEQUES. HE HAS FURTHER CONTENDED THA T THE ASSESSEE COULD NOT RECALL THE DETAILS AND THE PERSONS FROM WH OM THESE CHEQUES WERE RECEIVED IN THE BANK ACCOUNT. HOWEVER, THE ASSES SING OFFICER HAS MADE THE ADDITION WITHOUT CONDUCTING A PROPER ENQUIR Y FROM THE BANK REGARDING THE DETAILS OF THE PERSONS WHO HAVE GIVEN THE CHEQUES, THUS THE LD AR HAS SUBMITTED THAT INSTEAD OF MAKING THE ADDITION, A PROPER ENQUIRY OUGHT TO HAVE CONDUCTED BY THE ASSESSING OF FICER BY ISSUING THE SUMMON U/S 131 OF THE ACT TO THE BANK. THE ASSESSEE TRIED HIS BEST TO COLLECT THE DETAILS FROM THE BANK BUT THE BANK HAS NOT OBLIGED TO THE ASSESSEE FOR PROVIDING THE NECESSARY DETAILS. HENCE , THE LD AR HAS SUBMITTED THAT AT ONCE, THE AMOUNT WAS RECEIVED THRO UGH CHEQUE, THE ITA 656/JP/2016_ BHOPAL SINGH SHEKHAWAT VS ITO 35 ASSESSING OFFICER COULD HAVE CONDUCTED A PROPER ENQ UIRY FROM THE BANK BEFORE MAKING ADDITION. HE HAS POINTED OUT THAT THE AMOUNT OF RS. 6.00 LACS WAS REPAID BY THE ASSESSEE ON 21/11/2007 THROUG H CHEQUES OF RS. 3.00 LACS EACH, THEREFORE, NO ADDITION CAN BE MADE WHEN THE ASSESSEE HAS REPAID THE AMOUNT. 24. ON THE OTHER HAND, THE LD. DR HAS SUBMITTED THA T THE ASSESSEE HAS FAILED TO GIVE PARTICULARS OF THE PERSONS FROM WHOM THE CHEQUES WERE RECEIVED AND AGAIN TO WHOM REPAYMENT WAS MADE. ONCE T HE AMOUNT WAS FOUND DEPOSITED IN THE BANK ACCOUNT OF THE ASSESSEE , THE ONUS IS ON THE ASSESSEE TO EXPLAIN THE SOURCE OF THE DEPOSIT. DESP ITE THE VARIOUS OPPORTUNITIES GIVEN BY THE ASSESSING OFFICER AS WELL AS THE LD. CIT(A) THE ASSESSEE HAS FAILED TO EXPLAIN THE SOURCE OF DEPOSI T AND EVEN THE PARTICULARS OF THE PERSONS FROM WHOM THE CHEQUES WER E RECEIVED. HE HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 25. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. THE ASSESSING OFFICER NOTED THA T THERE WAS DEPOSIT OF RS. 6.00 LACS VIDE TWO CHEQUES NO. 712141 OF RS. 1.0 0 LAC AND CHEQUE NO. 037315 OF RS. 5.00 LACS IN THE BANK ACCOUNT ON 23/8/2007 AND 01/09/2007 RESPECTIVELY. THUS, THE TOTAL DEPOSIT WAS OF RS. 6.00 LACS. THE ASSESSING OFFICER ASKED THE ASSESSEE TO FURNISH THE REQUISITE DETATILS, ITA 656/JP/2016_ BHOPAL SINGH SHEKHAWAT VS ITO 36 HOWEVER, THE ASSESSEE FAILED TO EXPLAIN THE PARTICUL ARS OF THE PERSONS FROM WHOM THE CHEQUES WERE RECEIVED. THE ASSESSING OF FICER ACCORDINGLY MADE THE ADDITION OF THE SAID AMOUNT OF RS. 6.00 LA CS FOR WANT OF ANY EXPLANATION FROM THE ASSESSEE. EVEN BEFORE US, THE ASSESSEE HAS FAILED TO EXPLAIN AS FROM WHOM THESE CHEQUES WERE RECEIVED BY THE ASSESSEE. THOUGH, THE ASSESSEE CLAIMED TO HAVE REPAID THE SAID AMOUNT THROUGH CHEQUE, HOWEVER, THE ASSESSEE HAS NOT EVEN GIVEN THE PARTICULARS OF THE PERSONS TO WHOM THE AMOUNT WAS REPAID. THEREFORE, THER E IS A COMPLETE FAILURE ON THE PART OF THE ASSESSEE TO EXPLAIN THE DEPOSIT OF RS. 6.00 LACS IN THE BANK ACCOUNT THROUGH TWO CHEQUES. MERE DEPOSI T MADE THROUGH CHEQUE IS NOT SUFFICIENT TO DISCHARGE THE ONUS OF S OURCE OF DEPOSIT. THE LD. CIT(A) DECIDED THIS ISSUE AS UNDER: 3.4.2 DETERMINATION : (I) I HAVE DULY CONSIDERED THE SUBMISSIONS OF THE A PPELLANT AND THE MATERIAL PLACED ON RECORD. THE BRIEF FACTS ARE THAT CHEQUE N O. 712141 OF RS. 1,00,000 & CHEQUE NO. 037315 OF RS. 5,00,000 WERE C REDITED IN THE APPELLANT'S BANK ACCOUNT MAINTAINED WITH SBBJ ON 23 .08.2007 AND 01.09.2007 RESPECTIVELY. DURING THE ASSESSMENT PROC EEDINGS, THE AO REQUIRED THE APPELLANT TO EXPLAIN THE SOURCE OF DEP OSIT OF ABOVE CHEQUES TOTALING TO RS.6,00,000/-, HOWEVER, NO REPLY WAS FU RNISHED AND CONSEQUENTLY THE AO MADE ADDITION OF RS. 6 LAC TO T HE INCOME OF THE APPELLANT ON ACCOUNT OF UNEXPLAINED CHEQUE DEPOSIT IN ITS BANK ACCOUNT. (II) DURING THE APPELLATE PROCEEDINGS, IT WAS SUBMI TTED BY THE APPELLANT THAT THE REQUISITE DETAILS WERE OUT OF THE MEMORY OF THE APPELLANT AND IT HAS ITA 656/JP/2016_ BHOPAL SINGH SHEKHAWAT VS ITO 37 BEEN TRYING WITH THE CONCERNED BANK FOR OBTAINING T HE DETAILS AS TO THE NAME OF THE PERSON WHO GAVE THESE CHEQUES AND STATE D THAT THE AO SHOULD HAVE ISSUED SUMMONS TO THE BANK FOR GETTING THE NECESSARY DETAILS AND THE ADDITION U/S 69 IS DISCRETIONARY IN NATURE. (III) IT MAY BE MENTIONED HERE THAT THE PRIMARY ON US IS ON THE APPELLANT TO EXPLAIN THE SOURCE OF CHEQUE DEPOSIT IN ITS BANK AC COUNT. THE SAID ONUS HAS NOT BEEN DISCHARGED BY THE APPELLANT. IN FACT, THE APPELLANT IS NOT AWARE FROM WHOM HE RECEIVED THE SAID PAYMENTS. SINC E, THE APPELLANT IS NOT AWARE OF THE SOURCE OF THE CHEQUES AMOUNTING TO RS. 6 LAC DEPOSITED IN ITS BANK ACCOUNT, THERE IS NO QUESTION OF GETTIN G ANY CONFIRMATION FROM THE CONCERNED PERSONS. IT IS THEREFORE, HELD THAT T HE AMOUNT OF RS. 6 LAC DEPOSITED IN THE BANK ACCOUNT OF THE APPELLANT THRO UGH CHEQUES REMAINED UNEXPLAINED. THUS, THE ADDITION OF RS. 6 L AC MADE BY THE AO IS HEREBY SUSTAINED. THUS, THE ASSESSEE HAS FAILED EVEN TO GIVE THE NECES SARY PARTICULARS ABOUT THE PERSONS FROM WHOM CHEQUES WERE RECEIVED AND DEPO SITED IN THE BANK ACCOUNT. IT IS PERTINENT TO NOTE THAT THE ASSESSEE IS NOT ENGAGED IN ANY BUSINESS AND HAS SHOWN INCOME FROM SALARY AND THEREF ORE, IF ANY CHEQUE WAS DEPOSITED IN THE BANK ACCOUNT OF THE ASSESSEE, I T WAS NOT DIFFICULT FOR THE ASSESSEE TO EXPLAIN THE SAME. HOWEVER, FAILURE ON THE PART OF THE ASSESSEE TO PRODUCE EVEN THE MINIMUM PARTICULARS AN D DETAILS REGARDING THE DEPOSIT OF CHEQUE HAS LED TO THE CONCLUSION THA T THE SAID DEPOSIT OF RS. 6.00 LACS REMAINED UNEXPLAINED. ACCORDINGLY, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE IMPUGNED ORDER OF THE LD. CIT(A ) QUA THIS ISSUE. ITA 656/JP/2016_ BHOPAL SINGH SHEKHAWAT VS ITO 38 26. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH JANUARY, 2019. SD/- SD/- FOE FLAG ;KNO FOT; IKY JKO (VIKRAM SINGH YADAV) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 11 TH JANUARY, 2019 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SHRI BHOPAL SINGH SHEKHAWAT, JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- THE ITO, WARD-1(4), JAIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 656/JP/2016) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR