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Income Tax Appellate Tribunal, PUNE BENCHES “B” :: PUNE
Before: SHRI S.S.GODARA & DR. DIPAK P. RIPOTE
ORDER
PER DR. DIPAK P. RIPOTE, AM:
This appeal filed by the Assessee is directed against the order of ld.Commissioner of Income Tax (Appeal)(NFAC)[ld.CIT(A)] dated 25.11.2021 for A.Y.2010-11emanating from assessment order under section 143(3) r.w.s 147 dated 28.12.2018. The Assessee has raised the following grounds of appeal: “Ground 1. Re-assessment Order passed U/s.l43(3)r.w.s.l47 dated 28-12-2018 is invalid and bad in law for the following reasons: (i) Notice u/s 143(2) not served: Notice u/s 143(2) was not Mr.Sachin Changedia [A] served on the appellant. (ii) The Ld.AO did not reject the objections raised by the appellant vide its letter dated 06-12-2018. (iii) No Conclusive Evidence in possession: The Ld.AO neither had nor shared any evidences which could conclusively prove that the total sale consideration was Rs.1,50,00,000 and not Rs.55,00,000. (iv) No Independent inquiry made by the Ld.AO before issuing notice u/s.148. (v) Cross Examination not provided Relief Claimed: The re-assessment proceedings are bad in law the same may be quashed.
Ground 2 The Honorable CIT (NFAC) has erred in confirming the addition of Rs.95,00,000/- made by the Ld.AO, despite the following facts: i) Objections raised by the appellant vide its letter dated 05-12-2018 were not disposed off by passing a speaking order as held by apex court in GKN Driveshafts (India) Ltd., v/s. ITO 259 ITR 19. ii) The two Sathe Khats on the basis of which the entire reassessment is made by the Ld.AO did not conclusively, explicitly, clearly and beyond doubt states and support that the total sale consideration was Rs.1,50,00,000/- iii) In the case of seller of the said property Mr.AshokPhaltane the addition made on the identical ground was quashed by the Hon. CIT(A)-7 Pune on the ground that the said sale consideration in the Sathe 2 Mr.Sachin Changedia [A] Khats was darkened and therefore it is not possible to decipher that the consideration agreed is Rs. 1,50,00,000/-. iv) The entire reassessment is made on mere guess work, estimate & surmise. v) The entire addition is invalid, baseless & against the law of nature justice Relief Claimed The appellant firm humbly requests your good honor to delete the said addition of Rs. 95,00,000/- and oblige.
Ground 3 The appellant prays for your leave to add, alter & amend the above ground of appeal, if necessary.”
Brief facts of the case : 2. The assessee is a Doctor by profession, assessee had filed Return of Income for A.Y. 2010-11 on 16.06.2011 declaring total income of Rs.4,39,800/-. The Assessing Officer(AO), ITO, Ward-1, Ahmednagar received certain information from ITO(Investigation), Pune regarding Dr.Sachin Changedia, based on the said information, the AO i.e. ITO, Ward-1, Ahmednagar recorded reasons for reopening the assessment for A.Y. 2010-11. Accordingly, notice under section 148 of the Act dated 30.03.2017 was issued by the ITO, Ward-1, Ahmednagar, the said notice under section 148 was served on appellant assessee on 03.04.2017. The assessee vide his 3 Mr.Sachin Changedia [A] letter dated 07.02.2018 requested the AO to treat the Return of Income original filed on 16.06.2011 as the Return filed in response to notice under section 148 of the Act. Subsequently, after giving opportunity to the assessee, the AO passed assessment order dated 28.12.2018.
Aggrieved by the assessment order, the assessee filed appeal before the ld.CIT(A) who confirmed the assessment order. Aggrieved by the same, the assessee filed appeal before this Tribunal.
Submission of ld.Authorised Representative(ld.AR) : 4. The ld.AR filed a paper book. The ld.AR invited our attention to reasons recorded for reopening which were on page no.2 and 3 of the paper book. As per the said reasons, there was a “Sathekhat” dated 24.03.2009 and 26.05.2009 between assessee and Mr. Phaltane for sale of some land at a total consideration of Rs.1,50,00,000/-. However, as per the registered sale deed dated 18.07.2009, the assessee has shown total consideration of Rs.55 lakhs only. The ld.AR invited our attention to the impugned “Sathekhat” which is at page no.4 of the paper book. The ld.AR invited our attention to the fact that nowhere in the impugned Sathekhat, the amount of Rs.1,50,00,000/- is mentioned. Therefore, the ld.AR stated that the 4 Mr.Sachin Changedia [A] reasons recorded are based on a document which does not mention any amount as claimed by the AO in the reasons. Therefore, the ld.AR submitted that there was no reason for the AO to reopen the assessment. Ld.AR submitted that the reopening was bad in law.
Submission of ld.Departmental Representative (ld.DR) : 5. The ld.Departmental Representative (ld.DR) relied on the order of the AO and ld.CIT(A).
Findings and Analysis : 6. We will take up first the legal ground of the assessee challenging the reopening. It is alleged in the reasons recorded by the AO that there was a “Sathekhat” between assessee and Mr.Phaltane for sale of the land at Rs.1,50,00,000/-. The AO had received this information and the impugned “Sathekhat” from ITO(Investigation), Pune. We have perused the copy of the “Sathekhat” filed by the ld.AR(page 11&13 of Paper book). It is observed that nowhere in the “Sathekhat” amount of Rs.1.50 crore is mentioned. Thus, it is clear that the reopening is based on a “Sathekhat” alleging sale consideration of Rs.1.50 crore, but said “Sathekhat” does not mention anywhere the amount of Rs.1.50 crore. There is no dispute that assessee purchased land from Mr.Phaltane vide registered sale deed dated 18.07.2009 for Rs.55,00,000/-.
5 Mr.Sachin Changedia [A] However, the allegation of the AO that land was purchased for Rs.1.50 crore is without any evidence. Thus, the AO has failed to establish, based on the impugned document, that there was escapement of any income in the reasons recorded; therefore, the reopening is quashed. We find support from the observations of Hon’ble Jurisdictional High Court.
6.1 The Hon’ble Bombay High Court has observed in the case of Hindustan Lever Ltd [2004] 268 ITR 332 (Bombay), as under : Quote, “ It is for the Assessing Officer to form his opinion. It is for him to put his opinion on record in black and white. The reasons recorded should be clear and unambiguous and should not suffer from any vagueness. The reasons recorded must disclose his mind. Reasons are the manifestation of mind of the Assessing Officer. The reasons recorded should be self-explanatory and should not keep the assessee guessing for the reasons. Reasons provide link between conclusion and evidence. The reasons recorded must be based on evidence. The Assessing Officer, in the event of challenge to the reasons, must be able to justify the same based on material available on record” Unquote.
6.2 In the reopening reason the AO has also mentioned that assessee has claimed excess depreciation. However, there is no addition made by the AO on this basis.
6 Mr.Sachin Changedia [A] 6.3 Accordingly, reopening is quashed.
On merits of additions: 7. The entire addition of Rs.95,00,000/- is based on the impugned “Sathekhat” and allegation that the impugned Sathekhat mentions that the land was sold for Rs.1.5 Crores. However, as observed by us in earlier paragraphs that there is no mention of Rs.1.5 crores in the Sathe Khat. Rather there is no figure of Rs.1.5 crores or words Rs.1.5 crores. Therefore, in this situation the value mentioned in the registered Sale Deed is taken to be true. Hence, the AO is directed to delete the addition of Rs.95,00,000/-. Accordingly, this ground of the assessee is allowed.