SMT. RINABEN SUNIT CHOKSI,,AHMEDABAD vs. THE INCOME TAX OFFICER, WARD-11(2),, AHMEDABAD

Present two appeals are directed at the instance of the assessee against separate orders of the ld.CIT(A)-5, Ahmedabad dated 28.3.2019 passed for the Asstt.Year 2010-2011.

143(3) read with section 147 of the Income Tax Act, 1961. In other words, it is a quantum appeal; whereas has arisen from the penalty proceedings under section 271(1)(c) of the Act i.e. penalty appeal. , 924/Ahd/2019 3. The assessee has taken three ground of appeal. She has challenged reopening of the assessment under section 148 of the Act as well as addition of unexplained cash deposits in the AXIS Bank amounting to Rs.4,24,500/-.

The ld.counsel for the very outset submitted that the assessment was reopened by recording reasons which are available on page no.4 of the paper book. The reasons read as under: “In this case, No return of income has been filed by the assessee for A.Y.2010-11. The information as received from the Asstt.Director of Income Tax (I&C.I), Ahmedabad with reference to sale transactions of the immovable property and difference in the value of registered document and the value of the property made for the purpose of stamp duty. On verification of the same, it is noticed that the assessee has sold the immovable property. The value of the immovable property adopted by the Stamp Valuation Authority, i.e. Sub Registrar, Stamp Value Dholka, Ahmedabad is Rs.13,65,000/- and value of registration amount is Rs.11,79,360/-. Therefore, there is difference of value of used for stamp duty and registration purpose of Rs.1,85,640/-. In view of the facts stated above, I have reasons to believe that the income chargeable to tax to that extent has escaped assessment for A.Y.2010-11 within the meaning of sec. 147 of the I.T. Act and as such this is a fit case for issue of notice u/s.148. Date : 25/06/2012 Sd/- (D.R.PURSWANI) Income-tax Officer Ward-11(2), Ahmedabad.

A perusal of the above reasons would show that the assessment was reopened on account of escapement of income of Rs.1,85,640/- being difference between sale consideration taken by the assessee for 2 , 924/Ahd/2019 computing long term capital gain vis-à-vis deemed sale consideration under section 50C of the Act calculated on the basis of amount on which stamp duty was paid. The ld.counsel for the assessee submitted that though this addition was made by the AO, but it was deleted by the ld.CIT(A). He took us through page no.22 and 23 of the impugned order, where the ld.CIT(A) has discussed this issue. The relevant finding of the ld.CIT(A) reads as under: “8.2. I have carefully considered the Assessment order, facts of the case and submission made by appellant. The Assessing Officer has observed that the stamp duty value of the property sold by appellant is Rs.13,65,000/- and value adopted for the purpose of registration is Rs.11,79,360/- and accordingly addition of Rs.1,85,640/- was made to total income of Appellant on the ground that there was difference in value used for stamp duty and registration purpose. 8.3. The Appellant has contended that there is no difference in stamp duty value of the property and value of sale deed. During the course of Appellant Proceedings, the Appellant submitted registered sale deed executed on 13/07/2009 for sale of property at Rs.13,65,000/- and contended that there is no difference in the value of immovable property adopted by stamp valuation authority and documented value of sale deed. The Appellant has filed additional evidences under rule 46A. The AO in the remand report observed that the Appellant has sold residential plot on 13/07/2009 and share of the appellant in the said property was worked out at Rs.6,82,500/- being 50% share in the property and after deducting cost of acquisition of Rs.5,91,500/-, capital gain on sale property was worked out at Rs.91,000/-. The Assessing Officer contended that as the Appellant has not filed Return of Income, capital gain on sale of property is not verifiable.

On the strength of Hon’ble Gujarat High Court in the case of CIT Vs. Mohmed Juned Dadani, 30 taxmann.com 1, it was contended by the ld.counsel for the assessee since no addition remained on the issue for which assessment was reopened, therefore, no other issue can be examined by the AO or any other addition can be made. The Hon’ble high Court has considered judgment of Hon’ble Delhi High Court in the case of Ranbaxy Laboratories Ltd. Vs. , 336 ITR 136 and CIT Vs. Jet Airways (I) Ltd., 331 ITR 236.

On the other hand, the ld.DR contended that the AO has made addition, therefore, he can make addition on other issues also.

We have considered rival contentions and gone through the record carefully. The ld.CIT(A) has deleted addition on issue for which the assessment was reopened. Meaning thereby, there is no addition on the point for which the assessment was reopened. Unanimous approach of all the Hon’ble High Courts i.e. Hon’ble Bombay High Courts, Delhi High Court and jurisdictional High Court in construing the provision of section 147 is that expression “assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently” has been used in section 147. The words “and also” employed in the section would contemplate that any such other issues come to the notice of the AO would be examined if an addition on the issue for which assessment has been reopened are made. In case no 4 , 924/Ahd/2019 additions are made, then any other such issue will not be examined. In the present case, the ld.CIT(A) has deleted the addition for which assessment was reopened; meaning thereby, an addition on account of unexplained cash deposits in the AXIS Bank cannot be examined and cannot be added by the AO. Therefore, putting reliance upon the judgment of Hon’ble jurisdictional High Court in the case of Mohmed Juned Dadani (supra), we delete the addition of Rs.4,24,500/- made by the AO. Resultantly, quantum appeal of the assessee is partly allowed.

Now we take penalty appeal i.e. .

With the help of ld.representatives of the parties, we have gone through the record. As aforementioned, by making addition of Rs.4,24,500/-, the Revenue has also imposed penalty of Rs.4,24,500/- under section 271(1)(c) of the Act. While considering quantum appeal, for reasons stated hereinabove, we have deleted the impugned addition, and therefore, no addition exists in the hands of the assessee so as to attract vigour of penal provision under section 271(1)(c) of the Act. Accordingly, penalty order under section 271(1)(c) of the Act stands cancelled.