POONAM, BULANDSHAHR V. ACIT, CENTRAL CIRCLE- 14, NEW DELHI

ITA 7081/DEL/2018

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 7818 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2010-2011
• Appeal Filed On: 05-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 153A; 153

Judgement Text

Page | 1 IN THE INCOME TAX APPELLATE TRIBUNAL [ DELHI BENCH “F”: NEW DELHI ] BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER A N D SHRI AMIT SHUKLA, JUDICIAL MEMBER (Through Video Conferencing) ITA. No. 7081/Del/2018 (Assessment Year:2010-11) Smt. Poonam, C/o. M/s. RRA TAXINDIA, D–28, South Extension, Part – I, New Delhi – 110 049. PAN: AHUPP0196K Vs. ACIT, Central Circle : 14, New Delhi. (Appellant) (Respondent) Assessee by : Shri Somil Agarwal, Advocate; Department by: Shri T. Kipgen, [ CIT ] – D. R.; Date of Hearing : 28/02/2022 Date of pronouncement : 28/02/2022 O R D E R PER AMIT SHUKLA, JM : 1. This appeal by the assessee is filed against the order dated 17.09.2018 passed by the Commissioner of Income Tax (Appeals)– XXVI, New Delhi [hereinafter referred to as CIT (Appeals)] for the quantum of assessment passed under Section 153A/143(3) of the Income Tax Act, 1961 (the Act) for assessment year 2010-11. Page | 2 2. The grounds raised by the assessee are as under:- “1. (a) That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in sustaining the addition of Rs.12,26,177/- on account of long term capital gain, more so when no incriminating material was found as a result of search for warranting such addition. 1. (b) That in any case and in any view of the matter, action of Ld. CIT(A) insustaining the addition of Rs.12,26,177/- on account of long term capital gain, is bad in law and against the facts and circumstancesof the case and beyond the provisions of section153 A. “ 3. At the outset, the learned counsel for the assessee submitted that the addition of Rs.12,26,177/- sustained on account of long term capital gain by the ld. CIT (Appeals) is beyond the scope of assessment under Section 153A of the Act, because this addition has not been made on any incriminating material or material found during the course of search. It is submitted that here in this case search took place on 28.02.2014. The assessee has filed original return of income for assessment year 2010-11 on 31.03.2012 wherein income was shown at Rs.2,76,000/-. Such return of income had attained finality at the time of search and in terms of second proviso to Section 153A of the Act the assessment cannot be said to be abated. He pointed out that the ld. Assessing Officer has made the addition on account of sale of agricultural land as taxable under the head long term capital gain and the relevant findings of the Assessing Officer in this regard read as under:- “During the year under consideration the assessee has shown to have sold a agricultural land for a consideration of Rs,43,50,000/- and has not paid any tax on the capital gain accrued on sale of such land. The sale deed has been placed in. the record. The assessee is the owner of the 50% share of the property with his brother Sh. Rajiv Kumar, it is pertinent tomention here that the details provided by the assessee do not contain the certificate from the Tehsildar or from the Dish. Revenue'' Authority certifying that the land under consideration is agricultural land and beyond- the municipal Page | 3 limits as prescribed by the I T Act. Also the assessee has not submitted the details of the purchases of this property. Hence in absence of the documentary evidences that the laud sold by the assessee had been the agricultural land, total amount of sale consideration of Rs. (1/2 of Rs.43,50,000/-) Rs.23,75,000/ is added to the income of the assessee. “ 4. Thus, while making the said addition, the Assessing Officer has not referred to any incriminating material. Similarly, before the ld. CIT (Appeals) the assessee has raised a specific ground and the ld. CIT (Appeals) has not dealt with this issue properly and has reduced the addition to Rs.12,26,177/-, after observing as under:- “vi. Ground No. 8 relates to addition of Rs.23,75,000/- made by the Assessing Officer on account of sale of land. The Assessing Officer has observed that during the year under consideration the assessee has sold land for Rs.23,75,000/- which has been claimed to be agricultural land. The Assessing Officer has further observed that land sold by the assessee does not fall into the definition of agricultural land. In the remand report, the AO has again submitted that land sold by the assessee is not agricultural land. However, the Assessing Officer has mentioned in the remand report that sale consideration of the land is actually Rs.21,52,500/- and not Rs.23,75,000/- as mentioned in the assessment order. Accordingly, the AO has stated that capital gain in the sale of the land is liable to be taxed. I have carefully considered the facts, observation of the Assessing Officer and the submission of the appellant. I am in agreement with the Assessing Officer that the land sold by the assessee does not fall within the definition of agricultural land. Therefore, capital gain arising on sale of such land is liable to be taxed. The Assessing Officer has, however, added the whole sales consideration as capital gain. As per the details submitted by the assessee, the sale value of the land was Rs.21,52,500/- and indexed cost of the property was Rs.9,26,323/- resulting into long term capital gain of Rs.12,26,177/-. Therefore, the Assessing Officer is directed to delete the addition of Rs.23,75,000/- made by him and instead make addition of Rs.12,26,177/- as long term capital gain. This ground of appeal is partly allowed. “ 5. Thus, it was submitted that the addition cannot be sustained, as same is beyond the scope of assessment under Section 153A of the Act in the absence of any incriminating material. In support of this proposition, decision of Hon’ble Delhi High Court in the case of CIT Vs. Kabul Chawla reported in (2016) 380 ITR 573 (Del.) and the decision of Pr. CIT Vs. Meetu Gutgatia reported in 395 ITR 526 were relied upon. Now the later judgement has been confirmed vide order dated 2 nd of July, 2018 reported in (2018) 96 taxmann.com 468. Page | 4 6. On the other hand, the ld. DR submitted that the decision of the Hon’ble Delhi High Court in both the cases have been challenged by the Revenue before the Hon’ble High Court and, therefore, if there is any out-come in this judgement the Revenue shall be at liberty to take remotely action to revive the additions or matter be decided on merits. However, he did not controvert that the additions made by the Assessing Officer based on any incriminating material. 7. In view of the aforesaid fact and admitted position that the impugned addition is not based on any incriminating material found during the course of search and this being the unabated position which had attained finality before the date of search. Therefore, this addition cannot be sustained being beyond the scope of Section 153 of the Act. Respectfully following the ratio by the Hon’ble High Court in catena of judgements including the judgements cited by the learned counsel, the addition sustained by the ld. CIT (Appeals) is quashed. 8. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open court on : 28/02/2022. Sd/- Sd/- ( ANIL CHATURVEDI ) ( AMIT SHUKLA ) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated : 28/02/2022. *MEHTA* Copy forwarded to 1. Appellant; 2. Respondent; Page | 5 3. CIT 4. CIT (Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, New Delhi. Date of dictation 28.02.2022 Date on which the typed draft is placed before the dictating member 28.02.2022 Date on which the typed draft is placed before the other member 28.02.2022 Date on which the approved draft comes to the Sr. PS/ PS 28.02.2022 Date on which the fair order is placed before the dictating member for pronouncement 28.02.2022 Date on which the fair order comes back to the Sr. PS/ PS 28.02.2022 Date on which the final order is uploaded on the website of ITAT 28.02.2022 date on which the file goes to the Bench Clerk 28.02.2022 Date on which the file goes to the Head Clerk The date on which the file goes to the Assistant Registrar for signature on the order Date of dispatch of the order