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Income Tax Appellate Tribunal, “GUWAHATI BENCH, GAUHATI
Before: Shri Manish Borad & Shri Sonjoy Sarma
order
: March 13, 2023 ORDER
Per Manish Borad, Accountant Member:
This appeal at the instance of the assessee pertaining to the Assessment Year (in short “AY”) 2014-15 is directed against the order of the Commissioner of Income Tax (Appeals), Guwahati-1, Guwahati [in short ld. “CIT(A)”] dated 31.12.2018 which is arising out of the order u/s 144 of the Assessing Officer dated 23.12.2016.
The assessee in this appeal has taken the following grounds of appeal:
“1. For that the learned Assessing Order has erred in law as well facts of the case in completing the assessment u/s 144 of I.T. Act, 1961. 2. For that the learned Assessing Officer is not justified in making addition of Rs.42,75,000/- (50% of Rs.85,51,000/-) (72,00,000/- +13,51,000/-) as income from undisclosed source which is in fact on account of sale of ancestral agricultural land fully reflected in the ROI.
Assessment Year: 2014-15 Udai Chand Chopra 3. For that the learned Assessing Officer is not justified in making addition of Rs.26,05,500/- being (50% of Rs.52,11,500/-) as income from undisclosed investment though the same was purchased out of the sale proceeds of the ancestral agricultural land which was fully disclosed in the ROI.
For that the learned Assessing Officer is not justified in making addition of Rs.53,00,000/- as undisclosed income which is in fact the sale proceeds of the land purchased during the year out of sale proceeds of the ancestral agricultural land fully reflected in the ROI.
For that additional ground(s) of appeal as well as facts of the case may kindly be permitted before or at the time of hearing of Appeal.
Brief facts of the case are that the assessee is an individual engaged in commission agency business. He e-filed the return for assessment year 2014-15 on 22.11.2014 declaring income of Rs.3,54,170/-. Case of the assessee taken up for scrutiny through CASS followed by notices u/s 143(2) and 142(1) of the Act. The ld. Assessing Officer came in possession of the information about the transaction of immovable property carried out by the assessee and noticed that in the return of income no such income of capital gain has been disclosed. Ld. Assessing Officer also observed that the assessee has not furnished any details of investment made in immovable property. Based on the AIR information, the ld. Assessing Officer came to conclusion that the assessee has made undisclosed investment of Rs.1,21,80,500/- and accordingly assessed the income of Rs.1,25,34,674/-.
4. Aggrieved, assessee preferred appeal before the ld. CIT(A) but failed to get any relief. The ld. CIT(A) confirmed the order of the Assessing Officer observing as follows:
“I have gone through the observations of the Ld AD as well as the submission of the appellant and also the material placed on record before me. I find that in this case, sufficient and proper opportunity has been permitted to the appellant by the Ld AO, which either were not availed or are contended to have been missed on account of purported ill health of the appellant. I find from the records that the appellant had sold certain Assessment Year: 2014-15 Udai Chand Chopra land, claimed to be ancestral agricultural land and has thereafter made Investment in fresh land. These land were again claimed to have been sold by the appellant. The appellant had contended that the land sold originally was an agricultural land and the subsequent investment was made of the sale proceeds of land sold originally. It has been strongly contended by the appellant that the subsequent purchase of land was sourced out of land originally sold. The appellant further contends that the land purchased by him out of sale proceeds of agricultural land was again sold by him resulting in a capital loss. Be that as it may be, I find that the plea of ill health taken by the appellant cannot be doubted upon. However, the said plea remained unsubstantiated more so, when the appellant had not proved that his illness was a prolonged one and was such grave that despite receiving notices fixing hearing on 30.06.16, 22.07.16, 09.08.16, 16.09.16, 20 10 16, 01.11.16 & 01 12 16 fixing the case for hearing could neither be attended by him, nor replied to by any of the appellant's learned counsel or even by any of the family members of the appellant I find that in the absence of any information and evidence forthcoming as to what was the distance of the ancestral land from the local limits of municipality, whether the said land was indeed an agricultural land within the meaning of section 2 of the Income Tax Act, whether at all any agricultural operations were carried out on the said land by the appellant or any of his family members, whether any agricultural income from the said land was declared in past returns of the appellant, what were the crops being cultivated on the said land, whether any seeds, etc were purchased by the appellant for cultivation on the said land, whether the said land was barren or fertile, whether the description and also the quantum of cultivation are recorded in land revenue records maintained by patwari, etc remained unproved. I further note that the appellant had merely made bald statements, without even trying to bring or establish a link between the first sale, then subsequent purchase and final resale of lands in question. There is no petition which has been filed under Rule 46A of the Act either even purporting to attempt any such justification or explanation. When the appellant can be callous at one stage when the appellant is ably assisted by legal counsel, at another stage he cannot take pleas of ignorance or laxity. In fact, I find that there was a systematic and purposeful non compliance so as to ward off any enquiry or verification which could be made so that the appellant may contend later on before higher forum or appellate authorities, pleas of natural justice or additional evidences, more so, after warding off the requisite enquiry etc. I am therefore, in the absence of any concrete explanations as also the nature and description of purported 'agricultural land' and also in the absence of any suitable evidence being put forth by the appellant, Assessment Year: 2014-15 Udai Chand Chopra constrained to confirm all the impugned additions. The same is ascribed to complete failure of the appellant to put forth relevant material on records. I therefore sustain all the additions made and dismiss all the grounds of appeal raised.”
5. Aggrieved, assessee is now in appeal before this tribunal. The ld. counsel for the assessee submitted that complete details of the transaction carried out by the assessee regarding sale of ancestral land, purchases and sale of immovable property during the year were placed before the Assessing Officer but he has not considered the same and there are apparent mistake in the facts narrated by ld. Assessing Officer in the assessment order. One of which is regarding 50% ownership of the assessee of the property, whereas, the assessee has claimed 100% ownership and similarly in some places in the assessment order wrong figures are mentioned. He further submitted all these details were filed before the ld. CIT(A) also but the same was not entertained.
6. On the other hand, the ld. departmental representative vehemently argued in supporting of the order of the lower authorities.
We have heard rival contentions and persued the records before us. Addition made by the Assessing Officer for undisclosed investment at Rs.95,75,000/- is in dispute before us. As per the facts narrated before us by ld. counsel for the assessee, we notice that during the year under consideration, the assessee sold ancestral land on 24.04.2013 for a sale consideration of Rs.72,00,000/- claimed it to be an agricultural land exempt from capital gain. Further, it is brought to our notice that during the year the assessee purchased two plots of land for a consideration of Rs.52,11,000/- and 13,35,000/- on 24.04.2013 and some stamp duty charges were also paid thereon. These two plots of land were sold in the very same year on 27.01.2014 at Rs.53,00,000/- and 13,51,000/- respectively and in this transaction, the assessee suffered loss. It is not Assessment Year: 2014-15 Udai Chand Chopra in dispute at the end of the assessee that no such transaction of capital gain (long term and short term) has been disclosed in the income tax return. However, on perusal of the assessment order, the facts of the above stated transaction noted by the Assessing Officer are as follows:
“4. As per AIR information the assessee has made investment in property by way of purchase of land amounting to Rs. 52,11,000/- jointly. 50% of Rs. 52,11,000/- comes to Rs.26,05,500/-. On verification of ITR for the year under consideration it is found that the assessee has not shown the same in his return of income. Hence, the same is added as undisclosed investment from undisclosed sources.
5. As per CIB information the assessee has sold property (two) properties :- I) On 24-04-2013 Rs. 72,00,000/- jointly 50% of Rs. 72,00,000/- is Rs. 36,00,000/- II) On 27-01-2014 Rs. 13,51,000/-jointly 50% of Rs. 13,51,000/- is Rs. 6,75,000/- On verification of ITR for the year under consideration it is found that the assessee has not shown the same in his return of income. Hence, Rs. 42,75,000/- (Rs. 36,00,000+ Rs. 6,75.000) is added as undisclosed income.
As per AIR information the assessee has sold property for a consideration of Rs. 53,00,000/-. On verification of ITR for the year under consideration it is found that the assessee has not shown the same in his return of income. Hence Rs. 53,00,000/- is added as undisclosed income.”
On bare perusal of the facts as narrated by the assessee referring to the relevant documents filed in the paper-book, vis-à-vis the facts narrated in the assessment orders, we find that there are many variances. Even though the assessee has filed the proof but it seems that correct facts has not been captured by the Assessing Officer in the assessment order. We also observe that the issue regarding sale of ancestral land being exempt from tax or not has not been examined by the Assessing Officer. Similarly, the transaction of sale of plot of land giving rise to short-term capital loss (as claimed by the assessee) has not Assessment Year: 2014-15 Udai Chand Chopra been examined by the Assessing Officer. Therefore, considering the totality of facts, we deem it proper to restore all the grounds raised
before us to the file of the Assessing Officer for framing de novo assessment which will be framed after considering the revised computation of income to be filed by the assessee duly supported by all the evidences of sale and purchase of immovable property, the claim of exempt long-term capital gain and also the source of investment made for purchase of immovable property based on which the Assessing Officer shall decide in accordance under the law. Needless to mention that proper opportunity of being heard should be provided to the assessee.
9. In the result, the appeal filed by the assessee is allowed for statistical purposes. Kolkata, the 13th March, 2023.