Nand Ram Jat V. I.T.O. Ward 7(4), Jaipur and Anr.

ITA/657/2011

AI Insights

The case involves Nand Ram Jat, an agriculturist, who sold land during the assessment year 2006-07 and did not initially file a return of income. The Assessing Officer, upon discovering substantial credits in the assessee's bank account, assessed the income as undisclosed and computed it at Rs.1,48,50,000. The assessee appealed, and the CIT (A) revised the assessed income to Rs.2,40,90,768 after considering additional evidence. The ITAT upheld this decision, leading to the current appeal before the High Court. The main legal contention revolved around the admissibility and impact of additional evidence on the assessment of capital gains and the applicability of exemptions under sections 54B and 54F of the Income Tax Act.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 799901 (HC-RAJASTHAN)
• Appeal Type: Others
• Pronouncement Date: 16-10-2014
• Assessment Year: misc
• Other Referred Cases: Sidheshwar Ashok Kumar and Co. Vs. Commissioner of Income Tax (1989) 176 ITR 179
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: MAHI YADAV
• Assessee Lawyers: MAHENDRA GOYAL
• Keywords: Agricultural income; Assessment; Capital Gain; Exemption; Income Tax; Investment; Undisclosed income; Improvement
• Section: 144; 142(1); 54B; 54F; 2(14); 46A; 260-A

Judgement Text

"1 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN JAIPUR BENCH, JAIPUR Judgment D.B. Income Tax Appeal No.657/2011 Nand Ram Jat Vs. I.T.O. Ward 7(4), Jaipur & Anr. Date of Judgment: 16/10/2014 HON'BLE MR. JUSTICE AJAY RASTOGI HON'BLE MR. JUSTICE J.K. RANKA Mr. Mahendra Goyal Adv., for appellant. Ms. Mahi Yadav Adv., for the respondent. BY THE COURT (Per Hon'ble Ranka, J.) 1. Instant appeal u/S 260-A of the Income Tax Act, 1961 (for short, “IT Act”) is directed against the order of the Income Tax Appellate Tribunal, Jaipur Bench, Jaipur (for short, “ITAT”) dt.08/07/2011 passed in ITA No.127/JP/2010, it relates to assessment year 2006-07. 2. The brief facts, which can be noticed on perusal of the impugned order and other orders are that the assessee happens to be an agriculturist and apparently sold some land during the previous year relevant to the assessment year 2006-07. No return of income was furnished by the assessee but on the basis of information collected by the Assessing Officer from the Bank account of the appellant-assessee that there were credits to the tune of Rs.1,48,50,000/- therefore the assessee was 2 called upon to file return of income and to prove credits in the bank account by issuance of notice u/s 142(1), however, since several notices remained un-complied with, the Assessing Officer having no option proceeded to decide the assessment u/s 144 of the Income Tax Act, 1961 and since there was no explanation offered by the assessee, the Income was computed at Rs.1,48,50,000/- which were the credits in the bank account by holding that it is undisclosed Income of the assessee. 3. Dissatisfied with the assessment so made, an appeal came to be preferred before the CIT (A). The assessee submitted certain documents and contended that under Rule 46A of I.T. Rules, the documents may be admitted. The CIT (A) before considering the additional evidence, directed the Assessing Officer to examine the additional evidence. The Assessing Officer objected to placing reliance on the additional evidence and contended that despite of repeated opportunities, nothing was placed on record and therefore, they deserve to be ignored. It was further observed by the Assessing Officer that on the basis of the additional evidence placed on record, it transpired that the assessee sold land of Rs. 2,40,90,768/- whereas this fact came to be noticed only after perusal of the additional evidence and submitted that addition is required to be made on the basis of the amount 3 of Rs.2,40,90,768/- as against Rs.1,48,50,000/- made by the Assessing Officer originally. 4. The CIT (A) after considering additional evidence on record, admitted the additional evidence under Rule 46A of the Act and held that the amount is required to be adopted at Rs.2,40,90,768/- as against Rs.1,48,50,000/- and in view of section 2(14), Capital Gain liability is required to be worked out after adopting cost as on 01/04/1981. It was further held that since no relevant and credible evidence was led by the assessee between 01/04/1983 to 31/03/1985, therefore, no benefit can be allowed to the assessee about cost of improvement/investment. It was further held that benefit u/s 54B can be allowed only of agricultural land purchased in the name of seller i.e. assessee and not in the name of other family members and in case the assessee purchased agricultural land subsequent to the sale of the agricultural land, then benefit u/s 54B may be granted. It was further directed that benefit u/s 54F may also be allowed and accordingly disposed of the said appeal. 5. Dissatisfied with the order of the CIT (A), the assessee preferred an appeal before the ITAT, who vide impugned order and after considering the material on record, dismissed the appeal of the 4 assessee. Hence this appeal. 6. Ld. Counsel for the assessee has raised four questions of law which according to the assessee are substantial questions of law, however, ld. Counsel for the assessee during the course of hearing did not press question No.1 which was raised on the basis that investment made in the name of wife, son or close relatives are also entitled for deduction/exemption u/s 54B of the Act. He however vehemently contended that in so far as the cost of investment/improvement is concerned, the assessee had made investment to the tune of about Rs.35 Lac from 01/04/1983 to 31/03/1985 but the assessee being an illiterate person, did not keep the record of the same, he further contended that the assessee is basically an agriculturist and therefore, agricultural income was invested by raising of boundary wall, levelling of road, constructing house etc. etc. He also contended that Agricultural income is totally exempt under the Act and therefore, assessee was not required to maintain details of income/expenses. He contended that an affidavit was filed by the assessee stating therein that he invested about Rs.35,00,000/- and the contents of the affidavit were not denied by the Revenue and once contention in an affidavit which has evidentiary value were not denied by the Revenue, 5 therefore, the contents of the affidavit ought to have been admitted. For this proposition he relied upon the Judgment of the Allahabad High Court in the case of Sidheshwar Ashok Kumar and Co. Vs. Commissioner of Income Tax reported in (1989) 176 ITR 179. He contended that substantial questions of law arise out of the order of the Tribunal. 7. We have considered the submission of the ld. Counsel for the assessee and have perused the impugned order. 8. It is a case where despite of adequate opportunities having been granted to the assessee, neither he appeared before the Assessing Officer nor filed a return of income. Even no effort was made by the assessee in complying with the notices issued by the Assessing Officer through an Authorized Representative and the Assessing Officer having no option proceeded to finalize the assessment by passing of an order u/s 144 of the Act, on the basis of the information gathered by the Assessing Officer from the bank of the assessee. 9. Before the CIT(A) as well though certain evidence appeared to have been led and which have been considered by the CIT (A) but insofar as the investment of about Rs.35,00,000/- as claimed by 6 the counsel for the assessee, since no evidence was placed on record, therefore, not only the CIT(A) but also the Tribunal has not accepted the contentions of the assessee. Even before us, the counsel for the assessee has merely contended that contents of the affidavit having not been controverted by the Revenue, therefore, it deserves to be accepted as such. However, in our view, merely filing of an affidavit is not sufficient as it is also to be supported by some cogent material and evidence on which one affirms in the affidavit. Merely affirming something in the affidavit unsupported by any material worth the name cannot be accepted and concurrent finding by both the two appellate authorities is that no evidence was led by the assessee, as to how the assessee had invested such a huge amount for improvement of agricultural land to the tune of about Rs. 35 Lac or Rs.1.78 crores and thus both the appellate authorities, after analyzing the evidence on record, have coming to a concurrent finding of fact that benefit to the assessee of cost of improvement on agricultural land to the tune of Rs.1.78 crores cannot be allowed. 10. It would be appropriate to quote the finding of fact recorded by the Tribunal in the impugned order which reads as under:- 7 “ Regarding investment of Rs.1.78 crores or odd, there is no iota of evidence filed that how assessee has invested such a big amount for improvement of agricultural land. Therefore, there is no question of allowing the same. It is not a small amount. It is a big amount of Rs.1.78 crores or odd. Nothing has been brought on record as stated above how these expenses have been incurred. In the present case no evidence has been filed even upto the stage of Tribunal. Therefore, again we do not find reason to interfere with the finding of ld. CIT (A) that without any evidence no deduction whatsoever can be allowed. Accordingly, we confirm the finding of ld. CIT(A) on this issue also.” 11. The judgment relied by the ld. Counsel is totally distinguishable on facts as it was related to issuance of summons u/s 131 of the Act whereas in the instant case even the evidence in possession of the appellant was not provided to the Revenue or even before Tribunal as observed by the Tribunal. 12. In our view, no substantial questions of law can be said to arise out of the aforesaid finding of fact reached by the ITAT. Thus, we do 8 not find any perversity or infirmity in the order of the Tribunal impugned herein. 13. Consequently, the appeal, being devoid of merit, is hereby dismissed in limine. (J.K. RANKA) J. (AJAY RASTOGI),J. S.Kumawat Certificate- All corrections made in the judgment/order have been incorporated in the judgment/order being e-mailed. S.Kumawat Jr. P.A "