AMBIKA CHARAN DIXIT,JABALPUR vs. PR. COMMISSIONER OF INCOME TAX , JABALPUR

O R D E R PER YOGESH KUMAR U.S.:J.M. The present appeal has been filed by the assessee against the order of learned Pr. CIT, Jabalpur-1 dated 19/03/2021 pertaining to assessment year 2015-16 passed u/s 263 of the Act. In this appeal, the assessee has raised the following grounds:

“1. The learned PCIT has erred in law and on facts of the case in cancelling the assessment for AY 2015-16 for de novo assessment u/s 263 of The Income Tax Act. The conditions for invoking section 263 are not satisfied. The order made is without jurisdiction should be quashed. 2. That, The learned PCIT has failed to record specific finding based on case specific facts that the order made u/s 143(3) by AO is erroneous and prejudicial to the interest of revenue. The order should be annulled.

4. The applicant reserves his right to raise additional ground or grounds of appeal

those may arise at the time of hearing of this appeal.”

2. The brief facts of the case are that the assessee filed return of income of Rs.5,68,270/- and agriculture income of Rs.2,02,500/- for the assessment year 2015-16. The case of the assessee was selected for limited scrutiny to examine the following reasons:

1. Income/Capital gain on sale of land or building 2. Income from real estate business 3. Sundry creditors 4. Large increase in sundry creditors with respect to turnover as compared to preceding year 5. Large increase in sundry creditors and reduction in business income as compared to preceding year 6. Low Capital gain with respect to sale consideration (higher or AIR and ITR). 3. The assessment u/s 143(3) of the Act was completed on 14/08/2013 by determining the total income of Rs.8,74,550/- by making addition of Rs.2,56,280/- and Rs.50,000/- u/s 43CA and disallowed the expenses respectively. The learned Pr. CIT is of the opinion that the Assessing Officer did not enquire about the genuineness of the transactions made with Nemi Kochar and also failed to obtain copy of agreement in support of determining the Fair Market Value of the property u/s 43CA of the Act in the financial year 2009-10 and also failed to verify the genuineness of the sundry creditors/customers booking advances by making third party enquiries and simply accepted the assessee’s version on the basis of confirmation letters filed by the assessee during the course of assessment proceedings and since the very reason for selection of the case under scrutiny was to examine the veracity of the sundry creditors appearing in the balance sheet but no enquiries were conducted by the Assessing Officer. Therefore, the Pr. CIT vide order dated 19/03/2021 set aside the assessment order for de novo consideration with the direction to the Assessing Officer to pass fresh assessment order by making proper investigation and enquiry. Aggrieved by the order of learned Pr. CIT dated 19/03/2021, the assessee preferred the present appeal on the grounds mentioned above.

“On perusal of the balance sheet, it is gathered that sundry creditors appearing in the balance sheet Dixit Builders Pvt. Ltd., at Rs.1,48,06,974/- & Rs.3,78,16,878/- customer advance for booking. The assessee was asked to furnish the details & evidences of sundry creditors and explain the same. In this connection, assessee has submitted that "sundry creditors / customers booking advances are forming part of audit report. However, the list of sundry creditors are appearing in the books of account is enclosed for your kind perusal. Copy of ledger account of sundry creditors is also enclosed for your kind verification. It is respectfully submitted that some of the sundry creditors are old and balance is standing payable this year also. Their confirmation of balance has already been verified by your good-self during the course of assessment proceedings for the assessment year 2014-15 and considered. The assessee has approached to the respective sundry creditors and the parties from whom booking advances were received for their confirmation of balance as appearing in the books of account of the assessee as on 31-03-2015. The confirmation of account statement shall be submitted before your goodself as the same were received from respective trade creditors. It is respectfully submitted that the creditors as appearing in the books of account may please be considered. During the course of assessment proceedings, confirmed statements of accounts of sundry creditors were called for and examined with the books of accounts of the assessee, which is verified and are placed on record. The assessee was asked to explain as to why low capital gain with respect to sale consideration (higher of AIR & ITR ). The assessee has explained that "the assessee is a builder and contractor engaged in construction / development of land and building. Except the assets sold as trading assets and recorded in the books of account as sales the assessee did not sold any other assets which attracts the provisions of capital gain. Similar is the position for purchase of assets. The immovable properties / assets those are if any purchased during the year are recorded in the books of account of assessee and reflected in audit report. Source of investment are also incorporated in the books of account. No any other assets / immovable properties were purchased by the assessee during the year. The same may please be considered. The explanation of the assessee has been examined and found satisfactory.”

“………The assessee is the builder and contractor engaged in construction / development of land and building and its trading. During the year the assessee has sold shops, flats and the same is recorded in the books of account as sales. The assessee has submitted copy of sale deeds of the properties, the same is verified and placed on record. It is seen that during the year the assessee has sold one of the property for valuing Rs.36,40,000/- to M/s AW & Sons, the value determined by the Stamp Valuation Authority at Rs.38,81,000/-. Thus, there is a difference in value of Rs.2,41,000/-. The assessee was asked to explain the difference of the said value. During the course of hearing no explanation was furnished by the assessee, therefore, the said amount of Rs.2,41,000/- is added to the income of the assessee u/s 43 CA of the Income Tax Act 1961. Similarly a sum of Rs. 15,280/- were also added u/s 43CA on account of property sold to Shri Dr. Nemi Kochar during the year. Since no satisfactory explanation/evidences are submitted by the assessee, therefore penalty proceedings u/s 271(1)(c) of the Act can be initiated against the assessee.”

1. 1. The Appellant 2. The Respondent.