ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-2, Alwar V. SHRI BALBIR SINGH, Jaipur

ITA 669/JPR/2018

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9487 (ITAT-JAIPUR)
• Duration Of Justice: 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 16-05-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A S NEHRA
• Assessee Lawyers: SIDDARTHA RANKA; PALLAVI BHARGAVA
• Section: 143(3); 131

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S B, 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. 669/JP/2018 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2014-15 A.C.I.T., CIRCLE-2, ALWAR. CUKE VS. BALBIR SINGH, A-88, BSNL EXCHANGE, BEHROR, DISTT.- ALWAR (RAJ). LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AUQPS 2392 R VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS @ REVENUE BY : SHRI A.S. NEHRA (JCIT) FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI SIDDARTHA RANKA & MS. PALLAVI BHARGAVA (ADV) LQUOKBZ DH RKJH[K @ DATE OF HEARING: 30/10/2018 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 20/12/2018 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M.: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 07/03/2018 OF LD. CIT(A), ALWAR FOR THE A.Y. 2014-1 5. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE PENALTY U/S 271D OF THE A CT RS. 1,00,00,000/- IMPOSED BY THE JCIT FOR VIOLATION OF PROVISION OF S ECTION 269SS OF THE IT ACT, 1961. THAT THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR A LTER THE GROUNDS OF APPEAL ON OR BEFORE THE DATE OF APPEAL IS FINALLY H EARD FOR DISPOSAL. 2. THE ASSESSEE IS AN INDIVIDUAL AND ENGAGED IN THE BUSINESS OF HOTEL AND AGRICULTURAL ACTIVITIES. THE ASSESSEE E-FILED H IS RETURN OF INCOME ON 2 ITA NO. 669/JP/2018 ACIT VS. BALBIR SINGH 29/3/2015 DECLARING TOTAL INCOME OF RS. 73,76,400/- . WHILE COMPLETING THE ASSESSMENT U/S 143(3) OF THE INCOME TAX ACT, 19 61 (IN SHORT THE ACT) ON 19/12/2016, THE ASSESSING OFFICER ASSESSED THE TOTAL INCOME OF RS. 1,58,32,530/-. WHILE PASSING THE SCRUTINY ASSES SMENT, THE ASSESSING OFFICER INITIATED THE PENALTY PROCEEDINGS U/S 271D OF THE ACT IN RESPECT OF THE CASH LOAN OF RS. 1.00 CRORE TAKEN BY THE ASSESS EE FROM SMT. MAYA DEVI IN CONTRAVENTION OF PROVISIONS OF SECTION 269S S OF THE ACT. SUBSEQUENTLY A NOTICE U/S 271 OF THE ACT WAS ISSUED TO THE ASSESSEE ON 25/1/2017 PROPOSING LEVY OF PENALTY U/S 271D OF THE ACT. THE ASSESSEE EXPLAINED THAT THE AMOUNT OF RS. 1.00 CRORE RECEIVE D FROM SMT. MAYA DEVI WAS NOT A LOAN BUT IT WAS AN ADVANCE AGAINST T HE SALE OF LAND VIDE AGREEMENT DATED 12/12/2012. THE ASSESSING OFFICER E XAMINED THE ALLEGED AGREEMENT AND HELD THAT THIS IS AN AFTERTHO UGHT PREPARED DOCUMENT ON A OLD STAMP PAPER AND NOTHING BUT AN AT TEMPT TO CREATE EVIDENCE THAT THE TRANSACTION IS FOR SALE OF PROPER TY AND NOT AS A LOAN TAKEN IN CASH. CONSEQUENTLY, THE ASSESSING OFFICER LEVIED THE PENALTY OF RS. 1.00 CRORE U/S 271D OF THE ACT VIDE ORDER DATED 17/5/2017. 3. THE ASSESSEE CHALLENGE THE LEVY OF PENALTY BEFOR E THE LD. CIT(A) AND REITERATED THE CONTENTION THAT THE AMOUNT IN QU ESTION WAS RECEIVED AS AN ADVANCE FOR SALE OF PROPERTY TO SMT. MAYA DEV I, SUBSEQUENTLY DUE TO THE FINANCIAL CRISIS, THE PURCHASER COULD NOT MA KE THE BALANCE PAYMENT 3 ITA NO. 669/JP/2018 ACIT VS. BALBIR SINGH AND THEREFORE, THE TRANSACTION COULD NOT NE MATERIA LIZED, ACCORDINGLY, THE LD. CIT(A) HAS DELETED THE PENALTY LEVIED U/S 271D OF THE ACT. 4. BEFORE US, THE LD DR HAS SUBMITTED THAT THE ALLE GED AGREEMENT WAS STATED TO HAVE BEEN EXECUTED ON 20/6/2013 WHERE AS THE PAYMENTS WERE MADE ON 11/4/2013, 22/4/2013 AND FINALLY RS. 1 0.00 LACS ON 20/6/2013, THEREFORE, IN ABSENCE OF ANY OTHER RECOR D REGARDING THE PAYMENTS MADE PRIOR TO THE AGREEMENT, IT CANNOT BE ACCEPTED THAT THESE PAYMENTS WERE MADE ONLY AS ADVANCE FOR SALE OF PROP ERTY. THE ASSESSEE HAS PREPARED THIS DOCUMENT WHICH IS AN AFTERTHOUGHT TO GIVE A COLOUR TO THE TRANSACTION OF LOAN AS ADVANCE AGAINST THE PROP ERTY. THIS FACT IS ALSO SUPPORTED BY THE DEVELOPMENT THAT THE TRANSACTION O F SALE OF PROPERTY NEVER MATERIALIZED AND EVEN THE ASSESSEE HAS NOT CL AIM TO HAVE REPAID THE SAID AMOUNT RATHER THE ASSESSEE HAS CLAIMED THA T SINCE THE PURCHASER HAS NOT PAID THE BALANCE AMOUNT OF SALE C ONSIDERATION, THEREFORE, THE ASSESSEE FORFEITED THE SAID AMOUNT O F RS. 1.00 CRORE. EVEN OTHERWISE, THE ADVANCE RECEIVED BY THE ASSESSEE FAL LS UNDER THE DEFINITION OF LOAN OR DEPOSITS AS PER THE EXPLANATI ON TO SECTION 269SS OF THE ACT. THE LD DR HAS FURTHER POINTED OUT THAT THO UGH THE AGREEMENT IN QUESTION WAS CLAIMED TO HAVE BEEN EXECUTED ON 12/12 /2012, HOWEVER, THE SAME WAS NOTARIZED ON 20/6/2013 WHICH SHOWS THA T THIS AGREEMENT WAS PREPARED SUBSEQUENTLY BY USING OLD STAMP PAPER TO GIVE THE COLOUR 4 ITA NO. 669/JP/2018 ACIT VS. BALBIR SINGH OF SALE OF THE PROPERTY. THUS, HE HAS RELIED UPON T HE ORDER OF THE ASSESSING OFFICER. 5. ON THE OTHER HAND, THE LD AR OF THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE HAS TAKEN RS. 1.00 CRORE AS ADVANCE AG AINST THE SALE OF AGRICULTURAL LAND FROM SMT. MAYA DEVI, THE AMOUNT W AS RECEIVED ON VARIOUS DATES FROM 11/4/2013 TO 20/6/2013. THE AGRE EMENT TO SELL WAS EXECUTED AND NOTARIZED ON 20/6/2013. AS PER THE AGR EEMENT, THE TIME WAS GIVEN UP TO 31/5/2015 FOR EXECUTION OF SALE DEE D AND PAYMENT OF THE BALANCE AMOUNT. SMT. MAYA DEVI COULD NOT MAKE T HE BALANCE PAYMENT AND DUE TO THE MUTUAL RELATION, THE ASSESSE E EXTENDED TIME TILL 23/12/2016 AND THEREAFTER TILL 20/4/2017. SMT. MAYA DEVI HAS ACCEPTED AND CONFIRMED THE TRANSACTION OF GIVING ADVANCE FOR PURCHASE OF THE LAND IN THE STATEMENT RECORDED U/S 131 OF THE ACT. THE A SSESSEE ATTENDED THE OFFICE OF THE SUB-REGISTRAR, BEHROR ON 21/4/2017 AN D DEPOSITED RS. 50/- AGAINST HIS ATTENDANCE FOR THE PURPOSE OF REGISTRAT ION OF SALE DEED. SINCE THE PURCHASER DID NOT TURN-UP AND HAS NOT PAID THE BALANCE AMOUNT, THEREFORE, THE ASSESSEE FORFEITED THE AMOUNT OF RS. 1.00 CRORE. THE LD AR FURTHER POINTED OUT THAT SMT. MAYA DEVI HAS FILED A CIVIL SUIT AGAINST THE ASSESSEE BEFORE THE ADDITIONAL DISTRICT & SESSIONS JUDGE, BEHROR FOR GETTING THE SALE DEED EXECUTED AS PER THE AGREEMENT . THE SUIT IS STILL PENDING BEFORE THE COURT. THUS, THE PRESENT TRANSAC TION IS NOT LOAN OR 5 ITA NO. 669/JP/2018 ACIT VS. BALBIR SINGH DEPOSIT BUT IT WAS AN ADVANCE RECEIVED FOR SALE OF THE PROPERTY AND THEREFORE, DOES NOT FALL IN THE AMBIT OF PROVISION OF SECTION 269SS OF THE ACT. THE LD AR HAS FURTHER SUBMITTED THAT EXPLANATI ON TO SECTION 269SS OF THE ACT HAS BEEN INSERTED W.E.F. 01/6/2015 AND T HEREFORE, THE SAME IS NOT APPLICABLE FOR THE ASSESSMENT YEAR UNDER CONSID ERATION. HE HAS SUPPORTED THE ORDER OF THE LD. CIT(A). 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. THE ASSESSING OFFICER HAS OBSERVED THAT THE AMOUNT OF RS. 1.00 CRORE RECEIVED BY THE ASSESSEE F ROM SMT. MAYA DEVI WAS A LOAN AND THE ALLEGED AGREEMENT PRODUCED BY TH E ASSESSEE IS NOTHING BUT AN AFTERTHOUGHT ATTEMPTING TO CREATE AN EVIDENCE TO GIVE THE COLOUR OF THE TRANSACTION OF LOAN AS ADVANCE AGAINS T THE SALE OF THE PROPERTY. THUS, THE ASSESSING OFFICER HAS TREATED T HE SAID AMOUNT AS LOAN IN CONTRAVENTION OF THE PROVISIONS OF SECTION 269SS OF THE ACT AND CONSEQUENTLY IMPOSED THE PENALTY U/S 271D OF THE AC T. THE LD. CIT(A) HAS ACCEPTED THE TRANSACTION AS ADVANCE RECEIVED AG AINST THE SALE OF PROPERTY BY ACCEPTING THE AGREEMENT TO SELL NOTARIZ ED ON 20/6/2013. EXCEPT THE AGREEMENT IN QUESTION WHICH IS CLAIMED T O HAVE BEEN NOTARIZED AND NOT A REGISTERED AGREEMENT THERE IS N O OTHER DOCUMENT IN SUPPORT OF THE CLAIM THAT THE AMOUNT WAS RECEIVED A S AN ADVANCE AGAINST THE SALE OF PROPERTY. THE ONLY EVIDENCE WHICH CAN B E INDEPENDENTLY 6 ITA NO. 669/JP/2018 ACIT VS. BALBIR SINGH VERIFIED IS THE RECEIPT OF PAYMENT OF RS. 50/- IN T HE OFFICE OF THE SUB- REGISTRAR, BEHROR ON 21/4/2017. THE SAID RECEIPT WA S SUBSEQUENT TO THE ASSESSMENT ORDER AS WELL AS THE SHOW CAUSE NOTICE I SSUED U/S 271D OF THE ACT ON 25/1/2017, THEREFORE, PRIOR TO THE SHOW CAUSE NOTICE U/S 15/1/2017, THERE WAS NO DOCUMENT WHICH CAN INDEPEND ENTLY VERIFIED THE EXISTENCE OF THIS CLAIM THOUGH THE ASSESSEE HAS PRO DUCED THIS AGREEMENT DATED 20/6/2013. IT IS PERTINENT TO NOTE THAT IF TH E ASSESSEE IS HAVING/ HOLDING THE LAND IN QUESTION I.E. KHASRA NO. 24 MEA SURING 1.11 HECTARE SITUATED AT VILLAGE DHODHAKARI, TEHSIL-NEEMRANA, AL WAR THEN IN ABSENCE OF ANY CONTRARY RECORD, THE EXPLANATION OF THE ASSE SSEE THAT THE SAID AMOUNT WAS RECEIVED AS AN ADVANCE AGAINST THE SALE OF THE LAND, CANNOT BE REJECTED. HOWEVER, NEITHER THE ASSESSING OFFICER NOR THE LD. CIT(A) HAS EXAMINED WHETHER THE ASSESSEE OWNED THIS LAND I N QUESTION WHICH IS SUBJECT MATTER OF THE TRANSACTION. EVEN THE ASSESSE E DID NOT PRODUCE ANY RECORD ABOUT THE OWNERSHIP OF THE SAID LAND IN QUES TION, THEREFORE, TO GIVE THE CONCLUDING FINDING ON THE MATTER, IT IS NE CESSARY TO VERIFY THE FACT THAT THE LAND IN QUESTION IS OWNED BY THE ASSE SSEE AND FREE FROM ALL ENCUMBRANCES SO IT CAN BE FREELY TRANSFERRED. ACCOR DINGLY FOR THE LIMITED PURPOSE WE SET ASIDE THIS ISSUE TO THE RECORD OF TH E ASSESSING OFFICER TO CONDUCT A NECESSARY ENQUIRY IN RESPECT OF THE STATU S AND OWNERSHIP OF THE LAND IN QUESTION AS ON THE DATE OF THE ALLEGED AGREEMENT. IN CASE, 7 ITA NO. 669/JP/2018 ACIT VS. BALBIR SINGH THE LAND IN QUESTION IS FOUND TO BE OWNED BY THE AS SESSEE THEN THE CLAIM OF THE ASSESSEE SHALL BE ACCEPTED AND NO PENALTY CA N BE LEVIED. 7. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES ONLY. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH DECEMBER, 2018. 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:- 20 TH DECEMBER, 2018 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT - THE A.C.I.T., CIRCLE-2, ALWAR. 2. IZR;FKHZ@ THE RESPONDENT - SHRI BALBIR SINGH, ALWAR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K]T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 669/JP/2018) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR