RAM NATH RAJORIA, Dausa V. ITO, Dausa

ITA 964/JPR/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5108 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 7 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 06-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P BHATEJA CIT DR DHK
• Keywords: Reopening of assessment; Sale consideration of property below Jantri Value; Cost of acquisition; Difference of opinion; Change of opinion; Reassessment proceedings
• Section: 143(3); 50C; 147; 148; 263; 54

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH HKKXPUN] YS[KK LNL; DS LE{K BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 964/JP/2013 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2005-06 SHRI RAM NATH RAJORIA PROP. M/S. AMIT GAS SERVICE, DAUSA CUKE VS. THE ITO WARD- DAUSA LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AAUPR 5531 P VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: SHRI RAJEEV SOGANI, CA JKTLO DH VKSJ LS@ REVENUE BY :SHRI O.P. BHATEJA, ADDL CIT-. DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 26/07/2016 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 27 /07/2016 VKNS'K@ ORDER PER BHAGCHAND, AM THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDER OF THE LD. CIT(A), ALWAR DATED 05-09-2013 FOR THE ASSESSMENT Y EAR 2005-06 RAISING THEREIN FOLLOWING GROUNDS:- (1) IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTION O F THE AO IN REOPENING THE ASSESSMENT U/S 147 OF THE I.T. ACT . THE ACTION OF THE LD. CIT(A) IS ILLEGAL, UNJUSTIFIED, A RBITRARY AND AGAINST THE FACTS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY QUASHING THE ASSESSMENT PROCEEDINGS BEING ILLEGAL A ND WITHOUT ANY BASIS. ITA NO. 964/JP/2013 SHRI RAM NATH RAJORIA VS. ITO ,WARD- DAUSA . 2 (2) IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTION O F THE AO IN COMPUTING THE LONG TERM CAPITAL GAIN AT RS. 7,33 ,271/- AGAINST THE LONG TERM CAPITAL GAIN AT NIL. THE ACTI ON OF THE LD. CIT(A) IS ILLEGAL, UNJUSTIFIED, ARBITRARY AND A GAINST THE FACTS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY ASSESSING THE LONG TERM CAPITAL GAIN AT RS. NIL ONLY AS DECLA RED BY THE ASSESSEE. (3) IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTI ON OF THE AO IN APPLYING THE PROVISIONS OF SECTION 50C OF THE I.T. ACT AND ADOPTING THE SALE CONSIDERATION OF RS. 7,84,700 /- AGAINST THE ACTUAL SALE CONSIDERATION OF RS. 3,00,000/-. TH E ACTION OF THE LD. CIT(A) IS ILLEGAL, UNJUSTIFIED, ARBITRARY A ND AGAINST THE FACTS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY TAKING THE SALE CONSIDERATION AT RS. 3,00,000/- FOR COMPUTING THE CAPITAL GAIN. (4) IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTI ON OF THE AO IN NOT ALLOWING DEDUCTION FOR COST OF ACQUISITIO N OF RS. 1,07,300/- FOR THE PURPOSE OF COMPUTING LONG TERM C APITAL GAIN AND NOT ALLOWING THE INDEXATION FOR THE SAME. THE ACTION OF THE LD. CIT(A) IS ILLEGAL, UNJUSTIFIED, A RBITRARY AND AGAINST THE FACTS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY TAKING THE COST OF ACQUISITION OF RS. 1,22,300/- AN D ALLOWING INDEXATION FOR THE SAME FOR COMPUTING LONG TERM CAP ITAL GAIN AS CLAIMED BY THE ASSESSEE. (5) IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTI ON OF THE AO IN NOT ALLOWING THE EXEMPTION U/S 54 OF RS. 1,35 ,380/- IN RESPECT OF LONG TERM CAPITAL GAIN. THE ACTION OF T HE LD. CIT(A) IS ILLEGAL, UNJUSTIFIED, ARBITRARY AND AGAIN ST THE FACTS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY ALLOWI NG EXEMPTION U/S 54 IN RESPECT OF LONG TERM CAPITAL G AIN. ITA NO. 964/JP/2013 SHRI RAM NATH RAJORIA VS. ITO ,WARD- DAUSA . 3 2.1 BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE F ILED THE RETURN OF INCOME ON 31-10-2005 FOR THE ASSESSMENT YEAR 2005-0 6 DECLARING TOTAL INCOME OF RS. 2,05,220/-. IT IS NOTED FROM THE ASSE SSMENT ORDER THAT THE ORIGINAL ASSESSMENT WAS COMPLETED U/S 143(3) VIDE O RDER DATED 10-04- 2007 AT A TOTAL INCOME OF RS. 2,20,562/- AND AGRICU LTURE INCOME OF RS. 80,018/-. FURTHER IT IS NOTED THAT REASSESSMENT PROCEEDINGS WERE INITIATED VIDE NOTICE U/S 148 OF THE ACT DATED 30-0 4-2009 AND REASSESSMENT WAS COMPLETED VIDE ORDER U/S 143(3)/ 1 48 DATED 8-09-2010 AT A TOTAL INCOME OF RS. 9,53,833/-. IT IS FURTHER OBSERVED THAT IN THE REASSESSMENT PROCEEDINGS, CAPITAL GAIN WAS REASSESS ED BY REPLACING THE ACTUAL SALE CONSIDERATION OF RS. 3.00 LACS BY STAMP DUTY VALUATION OF RS. 7,84,700/- U/S 50C OF THE I.T. ACT. HENCE, IN R EASSESSMENT THE BENEFIT U/S 54 OF THE ACT WAS ALSO DENIED WHICH RESULTED IN TO FURTHER ADDITION OF RS. 7,33,270/- AS COMPARED TO ASSESSED TOTAL INCOME OF RS. 2,20,5620/- IN ORIGINAL ASSESSMENT. 2.2 BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTE R BEFORE THE LD. CIT(A) WHO HAS DISMISSED THE APPEAL OF THE ASSESSEE . ITA NO. 964/JP/2013 SHRI RAM NATH RAJORIA VS. ITO ,WARD- DAUSA . 4 2.3 NOW THE ASSESSEE IS BEFORE ME WITH THE PRAYER T O ALLOW THE CLAIM OF THE ASSESSEE AS RAISED IN THE GROUNDS OF APPEAL. TH E LD. AR OF THE ASSESSEE ALSO FILED THE WRITTEN SUBMISSION TO THIS EFFECT MA INLY CONTENDING AS UNDER WITH CASE LAWS:- 3.6 INITIATING REASSESSMENT ON THE SAME ISSUE WHE N THE ORIGINAL ASSESSMENT WAS COMPLETED U/S 143(3) AF TER EXAMINING THAT PARTICULAR ISSUE AMOUNTS TO CHANGE O F OPINION. NO RE-ASSESSMENT PROCEEDINGS ARE PERMISSIB LE ON ACCOUNT OF CHANGE OF OPINION. LACK OF INQUIRY OR I NADEQUATE INQUIRY MAY MAKE THE ASSESSMENT VULNERABLE TO REVIS IONAL JURISDICTION U/S 263 OF THE I.T. ACT BUT IN NO CIRC UMSTANCES, UNDER THESE FACTS, REASSESSMENT IS PERMISSIBLE. REL IANCE IS PLACED ON FOLLOWING JUDICIAL PRONOUNCEMENTS. (I) CIT VS. USHA INTERNATIONAL LTD. (2012) 348 ITR 485 (DEL.) (FB) (II) H.K. BUILDCON LTD. VS. ITO (2011) 399 ITR 535 (GUJ.) (III) CIT VS. K.K. PALANISAMY (2010) 321 ITR 474 (MAD.) (IV) SHRI HARESH CHAND AGARWAL (HUF) (ITA NO. 282/AGRA/2013) , ITAT AGRA (V) IDEA CELLULAR LTD. VS. DCIT (2008) 301 ITR 407(BOM.) AND SUBSEQUENTLY FOLLOWED IN ANOTHER CASE OF PRIMA PAPER AND ENGINEERING INDUSTRY (2014) 50 TAXMANN.COM 48 (BOM.) 2.4 THE LD. DR RELIED ON THE ORDER OF THE LOWER AU THORITIES. ITA NO. 964/JP/2013 SHRI RAM NATH RAJORIA VS. ITO ,WARD- DAUSA . 5 2.5 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IN GROUND NO. 1, THE ASSESSEE CHALLENGED REOPENING PROCEEDINGS. FIRST I DISCUSS THE ISSUE OF REOPENING THE ASSESSMENT U/S 147 OF THE ACT WHICH GOES TO THE ROOT OF THE MATTER. IT IS OBSERVED IN THIS CASE THAT THE ASSESSEE SUBMITTED THE COPY OF THE SALE DE EDS BEFORE THE AO IN FIRST ROUND OF THE ASSESSMENT PROCEEDINGS U/S 143(3 ) OF THE ACT AND AFTER EXAMINATION OF THESE DOCUMENTS THE AO FINALIZED THE ASSESSMENT. THE ASSESSEE'S RETURN OF INCOME CLEARLY MENTIONS THE WO RKING OF CAPITAL GAIN IN THE STATEMENT OF INCOME. IT IS OBSERVED THAT ON THE SAME FACTS, THE AO ISSUED NOTICE U/S 148 OF THE ACT. THERE WAS NO NEW INFORMATION WITH THE AO. THEREFORE, THERE WAS CHANGE IN THE OPINION OF T HE AO AND ON THE BASIS OF THE CHANGE OF OPINION, THE AO IS NOT EMPOW ERED TO INITIATE PROCEEDINGS U/S 148 OF THE ACT. IN THIS WAY, I FIND NO VALID REASON TO UPHOLD THE ORDERS OF THE LOWER AUTHORITIES AS TO IN ITIATION OF REASSESSMENT PROCEEDINGS BY ISSUE OF NOTICE U/S 148 OF THE ACT. MY VIEW IS ALSO FORTIFIED BY THE DECISIONS MENTIONED HEREINABOVE. HENCE, THE GROUND NO. 1 OF THE ASSESSEE IS ALLOWED. 2.4.1 SINCE THE REOPENING OF ASSESSMENT PROCEEDINGS HAS BEEN QUASHED BY HOLDING IT AS ILLEGAL, THEREFORE, THE OTHER GROU NDS OF APPEAL OF THE ITA NO. 964/JP/2013 SHRI RAM NATH RAJORIA VS. ITO ,WARD- DAUSA . 6 ASSESSEE ARE ACADEMIC IN NATURE AND HENCE NOT ADJUD ICATED UPON. THUS THE APPEAL OF THE ASSESSEE IS ALLOWED. 3.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 27 /07/2016 SD/- HKKXPUN ( BHAGCHAND) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 27 /07/ 2016 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI RAM NATH RAJORIA 2. IZR;FKHZ@ THE RESPONDENT- THE ITO, WARD- DAUSA 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 964/JP/2013) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ @ ASSISTANT. REGISTRAR