SHRI RAMESH BALANI, AJMER V. INCOME TAX OFFICER, WARD-1-2, AJMER

ITA 981/JPR/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 5964 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 1 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 20-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K MAHALA JCIT DHK
• Keywords: Additional evidence; Cost of acquisition; Corroborative evidences; Set aside
• Section: 148; 28

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCH SMC, JAIPUR JH FOT; IKY JKWO] U;KF;D LNL; DS LE{K BEFORE: SHRI SHRI VIJAY PAL RAO, JUDICIAL MEMBER VK;DJ VIHY LA-@ ITA NO. 981/JP/2018 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2010-11. SHRI RAMESH BALANI PROP. M/S. RAMESH TRADING CO., 21/935, DIGGI CHOWK, AJMER. CUKE VS. THE INCOME TAX OFFICER, WARD 1(2), AJMER. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. ABJPB 9378 G VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : NONE (WS FILED) JKTLO DH VKSJ LS@ REVENUE BY : SHRI A.K. MAHALA (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 27.09.2019. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 03/10/2019. VKNS'K@ ORDER PER VIJAY PAL RAO, JM : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 09.07.2018 OF LD. CIT (APPEALS), AJMER FOR THE ASSESSMENT YEAR 20 10-11. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- THAT UNDER THE FACTS OF THE CIRCUMSTANCES OF THE CASE THE LD. CIT (A) HAS ERRED IN :- (1) MAKING SUBSTANTIVE ADDITION OF RS. 9,05,734.00 FOR LONG TERM CAPITAL GAIN IN HANDS OF ASSESSEE. (2) ISSUE OF NOTICE U/S SEC. 148 IS BAD IN LAW. (3) ANY OTHER MATTER WITH PRIOR APPROVAL OF THE HONBLE BENCH. 2 ITA NO. 981/JP/2018 SHRI RAMESH BALANI, AJMER. 2. NONE HAS APPEARED ON BEHALF OF THE ASSESSEE DESP ITE THE FACT THAT THE ASSESSEE HAS BEEN SEEKING ADJOURNMENTS SINCE FILING OF THE APPEAL AS WELL AS A NOTICE THROUGH RPAD WAS ISSUED TO THE ASSESSEE. TH E ASSESSEE HAS FILED A LETTER DATED 06.04.2019 WITH THE REQUEST THAT THE CASE OF THE ASSESSEE MAY BE HEARD AND DISPOSED OFF ON THE BASIS OF WRITTEN SUBMISSIONS. IN VIEW OF THE ABOVE FACTS, THE APPEAL OF THE ASSESSEE IS HEARD AND DISPOSED OFF EX PARTE BY CONSIDERING THE WRITTEN SUBMISSIONS OF THE ASSESSEE. GROUND NO. 1 IS REGARDING IN ADDITION OF RS. 9,05,7 34/- MADE ON ACCOUNT OF LONG TERM CAPITAL GAIN. 3. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSE E HAS SOLD A PLOT BEARING NO. 43, NEHRU CO-OPERATIVE SOCIETY LTD., SOMAPLUR ROAD, AJAY NAGAR, AJMER FOR A CONSIDERATION OF RS. 7,00,000/- THROUGH HIS POWER O F ATTORNEY. THE ASSESSEE HAS NOT DECLARED THE CAPITAL GAIN ARISING FROM SALE OF THE SAID PROPERTY IN THE RETURN OF INCOME. CONSEQUENTLY, THE AO HAS REOPENED THE ASSES SMENT BY ISSUING A NOTICE UNDER SECTION 148 ON 28 TH MARCH, 2017 BASED ON THE INFORMATION THAT THE ASSE SSEE HAS SOLD AN IMMOVABLE PROPERTY. THE ASSESSEE CONTE NDED BEFORE THE AO THAT THE PROPERTY WAS SOLD BY THE ASSESSEE IN THE YEAR 2001 AS PER THE POWER OF ATTORNEY IN FAVOUR OF SHRI NANAK CHAND LAUNGANI. THE AO AFTER EXAMINATION OF SHRI NANAK CHAND LAUNGANI HELD THAT THE PROPERTY SOLD THROUGH POWER OF ATTORNEY WAS SALE MADE BY THE ASSESSEE AND ACCORDINGLY ASSESSED THE L ONG TERM CAPITAL GAIN IN THE HANDS OF THE ASSESSEE. THE ASSESSEE CHALLENGED THE ACTION OF THE AO BEFORE THE LD. CIT (A) BUT COULD NOT SUCCEED. 3 ITA NO. 981/JP/2018 SHRI RAMESH BALANI, AJMER. 4. IN THE WRITTEN SUBMISSIONS, THE ASSESSEE HAS REI TERATED HIS CONTENTION THAT THE PROPERTY WAS SOLD IN THE YEAR 2001 WHEN THE ASS ESSEE EXECUTED THE POWER OF ATTORNEY IN FAVOUR OF SHRI NANAK CHAND LAUNGANI. T HE AO HAS EXAMINED THE ASSESSEE AND RECORDED HIS STATEMENT. HOWEVER, EXCEP T THE POWER OF ATTORNEY, THE ASSESSEE COULD NOT PRODUCE ANY OTHER MATERIAL TO SH OW THAT THE PROPERTY WAS SOLD AT THE TIME OF APPOINTING THE ATTORNEY. ON THE CONTRA RY, SHRI NANAK CHAND LAUNGANI FILED A DECLARATION STATING THAT NO OWNERSHIP WAS T RANSFERRED IN HIS FAVOUR AND HE WAS ONLY ACTING ON BEHALF OF THE ASSESSEE WHO IS TH E OWNER OF THE PROPERTY. EVEN AFTER GOING THROUGH THE SALE DEED EXECUTED BY SHRI NANAK CHAND LAUNGANI, IT IS REVEALED THAT HE HAS ACTED IN THE CAPACITY OF POWER OF ATTORNEY-HOLDER OF THE ASSESSEE. THUS NEITHER THE SALE DEED DATED 30.07.20 09 NOR THE POWER OF ATTORNEY REVEALS THAT ANY SALE CONSIDERATION WAS RECEIVED BY THE ASSESSEE AT THE TIME OF EXECUTION OF POWER OF ATTORNEY. EVEN OTHERWISE, TH E AVERMENTS MADE IN THE POWER OF ATTORNEY AS WELL AS IN THE SALE DEED DO NOT CONS TITUTE ANY PRIOR SALE BY THE ASSESSEE IN FAVOUR OF SHRI NANAK CHAND LAUNGANI. TH US IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THIS CONTENTION OF THE A SSESSEE IS DEVOID OF ANY MERIT OR SUBSTANCE. THE ASSESSEE HAS ALSO RAISED ANOTHER CO NTENTION OF INDEXED COST OF ACQUISITION AND IMPROVEMENT OF THE PROPERTY WHICH W AS NOT ACCEPTED BY THE AO AS WELL AS LD. CIT (A). THE ASSESSEE SOUGHT TO FILE A N ADDITIONAL EVIDENCE BEFORE THE LD. CIT (A) IN SUPPORT OF THE CLAIM OF EXPENDITURE INCU RRED BY THE ASSESSEE REGARDING REGULARIZATION OF PLOT OF LAND, PAYMENT MADE TO THE SOCIETY ETC. ONCE THE ASSESSEE HAS PRODUCED THE RECEIPT ISSUED BY THE SOCIETY AS W ELL AS THE PAYMENT MADE TO THE AUTHORITIES FOR REGULARIZATION OF PLOT, THEN THE SA ID EXPENDITURE SHOULD HAVE BEEN 4 ITA NO. 981/JP/2018 SHRI RAMESH BALANI, AJMER. EXAMINED BY THE AUTHORITIES BELOW. SINCE THE AO AS WELL AS THE LD. CIT (A) DECLINED TO ACCEPT THE SAID EVIDENCE SOUGHT TO BE PRODUCED, THEREFORE, IN THE FACTS AND CIRCUMSTANCES OF THE CASE INDEXED COST OF IMPROVEME NT/ACQUISITION IS REQUIRED TO BE CONSIDERED AT THE LEVEL OF THE AO. HENCE THE ISSUE OF INDEXED COST OF IMPROVEMENT/ACQUISITION IS SET ASIDE TO THE RECORD OF THE AO TO VERIFY AND CONSIDER THE CLAIM ALONG WITH THE SUPPORTING EVIDENCE AND TH EN DECIDE THE SAME AS PER LAW. NEEDLESS TO SAY THAT THE ASSESSEE BE GRANTED AN OPP ORTUNITY OF HEARING. GROUND NO. 2 IS REGARDING VALIDITY OF REOPENING . 5. SINCE THE ASSESSEE HAS NOT DECLARED THE SALE OF THIS PROPERTY IN THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION AND SUBSEQU ENTLY THE AO RECEIVED THE INFORMATION ABOUT THE SALE OF THE PROPERTY IN QUEST ION, THEREFORE, THESE FACTS CAME TO THE KNOWLEDGE OF THE AO CONSTITUTE A TANGIBLE MA TERIAL TO FORM THE BELIEF THAT THE INCOME ASSESSABLE TO TAX HAS ESCAPED ASSESSMENT. HE NCE, I DO NOT FIND ANY MERIT OR SUBSTANCE IN THE GROUND NO. 2 OF THE ASSESSEES APP EAL. THE SAME IS DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSES. ORDER IS PRONOUNCED IN THE OPEN COURT ON 03/10/20 19. SD/- ( FOT; IKY JKWO (VIJAY PAL RAO) U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 03/10/2019. DAS/ 5 ITA NO. 981/JP/2018 SHRI RAMESH BALANI, AJMER. VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- SHRI RAMESH BALANI, AJMER. 2. THE RESPONDENT THE ITO WARD 1(2), AJMER. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 981/JP/2018) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR