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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI KUL BHARAT & SHRI MANISH BORAD
आदेश / O R D E R PER BENCH: This bunch of 3 appeals are against different orders of
the CIT(A)-3, Bhopal dated 18.3.16 pertaining to the
assessment years 2007-08, 2011-12 & 2012-13. First we
take up IT(SS)A No.109/Ind/2016 & IT(SS)A
No.110/Ind/2016 wherein the assessee has raised
following grounds of appeal:
IT(SS)A 109/Ind/2016:
On the facts and in the circumstances of the case, the Ld. CIT(A) erred and was totally unjustified in upholding the view that the short term capital gains arose and belonged to the appellant exclusively in his individual capacity as against the claim of the appellant that it arose and belonged to the AOP who distributed the same amongst its Members through Banking Channels. The short term capital gains in question be held to be arisen and belonged to the AOP as claimed by the Appellant before the Assessing Officer and Ld. CIT(A), in the interest of justice. 2. On the facts and in the circumstances of the case, the Ld. CIT(A) erred and was totally unjustified in upholding the view that the provisions of section 50C are attracted in the instant case. Same be held to be not attracted. 3. On the facts and in the circumstances of the case, the Ld. CIT(A) erred and was totally unjustified in sustaining the addition of Rs.28,42,000/- on account of short term capital gains as against Rs.85,000/- originally declared in his return filed on 28.11.2007. The effective addition of Rs.28,42,000/- sustained by the Ld. CIT(A) be deleted in toto.
[IT(SS)A Nos.109, 110 & 678 /Ind/2016,] [Shri Pankaj MaKhija, Bhopal]
On the facts and in the circumstances of the case, the Ld. CIT(A) erred and was totally unjustified in sustaining the addition u/s 69C of Rs.1,95,000/- made by the Assessing Officer. Same may kindly be deleted in toto in the interest of justice. 5. On the facts and in the circumstances of the case, the Ld. CIT(A) erred and was not at all justified in sustaining the addition of Rs.6,18,108/- made by the Assessing Officer on account of long term capital gains. The same be deleted in toto in the interest of justice. 6. The Ld. CIT(A)’s order under appeal being non speaking one against point wise and issue wise submissions of the Appellant before her as reproduced by her in the appellate order from pages 3 to 8 with no reasons therein for disagreement thereto and agreement with the action of the A.O., it has resulted in gross injustice to the Appellant which may kindly be removed by reversing the order of the authorities below, it is prayed. 7. The appellant craves leave to add, amend, modify, with the ground(s) of appeal at any time before the final hearing of the appeal. IT(SS)A 110/Ind/2016:
On the facts and in the circumstances of the case, the Ld. CIT(A) denied natural justice to the appellant by passing the order under appeal without acceding to the request of the appellant to facilitate cross examination of the land owners and other persons whose statements have been recorded on the back of the appellant and used against him in assessment without confronting the same and without affording an opportunity to the appellant to cross examine them. The appellate order of the Ld. CIT(A) may therefore set aside on the point at issue. 2. On the facts and in the circumstances of the case, the Ld. CIT(A) grossly erred and was totally unjustified in confirming or sustaining the addition of Rs.10,00,000/- made by the A.O. without facilitating the cross examination of the sellers of the land and other persons whose oral statements without any documentary evidence in support has been made the basis for the addition, and after considering the outcome of such cross examination. Hence, the addition in question being unfounded, unwarranted arbitrary and totally unjustified be deleted in toto in the interest of justice. 3. The Ld. CIT(A)’s order under appeal is non speaking as to how the appellant could be made a party to the agreement dated 27.10.2010 in which he was neither a party nor even a signatory, so as to justify the impugned addition of Rs.10,00,000/- made by the A.O., and confirmed by 3
[IT(SS)A Nos.109, 110 & 678 /Ind/2016,] [Shri Pankaj MaKhija, Bhopal]
the CIT(A) and, therefore, the addition in question be deleted in its entirety in the interest of justice. 4. The appellant craves leave to add, amend, modify, with the ground(s) of appeal at any time before the final hearing.
At the outset, Ld. Counsel for the assessee submitted
that the assessee had filed additional ground which goes to
the root of the jurisdiction of the assessing officer initiating
the proceedings u/s 153C of the Income Tax Act, 1961
(hereinafter called as ‘the Act’). It is contended by the Ld.
Counsel for the assessee that this being the legal ground
can be admitted at any stage. In support of this, he relied
on the Hon'ble Supreme Court judgement in the case of
NTPC Vs. CIT 229 ITR 383. The additional ground raised
by the assessee is reproduced below:
That the appellant prays leave of this Hon'ble Tribunal to urge the following additional ground in its appeal: A. Whether the order passed by the Assessing Officer is contrary to the decision of the jurisdictional Hon'ble Court in CIT Vs. M/s. Mechmen (2016) 380 ITR 591 (MP) in which the Hon'ble MP H.C. has categorically held that u/s 153C the proper satisfaction has to be recorded by the Assessing Officer of the searched person before assuming jurisdiction over the assessee & failure to record satisfaction renders the assessment order null and void?
[IT(SS)A Nos.109, 110 & 678 /Ind/2016,] [Shri Pankaj MaKhija, Bhopal]
B. Whether absence of satisfaction u/s 153C in the hands of the searched person i.e. Sagar Group by the A.O. of the searched person renders the present assessment order passed u/s 153C in the case of the appellant illegal, void and without jurisdiction? 2. That the aforesaid grounds are purely legal grounds. Raising of such an alternative claim as additional grounds is permissible as held in the case of NTPC V. CIT (1998) 229 ITR 383 SC. 3. that it is therefore prayed that the appellant be allowed to raise and argue these additional grounds since they go to the root of the matter and are essentially legal grounds. 4. That the additional ground is necessitated to protect the interest of the appellant. 3. Ld. D.R. opposed the admission of additional ground.
He submitted that no view has been expressed by the Ld.
CIT(A). Moreover, the assessee had participated in the
proceedings. Now at this belated stage, assessee cannot be
permitted to raise such ground.
We have heard the rival contentions. Since the
assessee has raised a legal ground, which was not before
the Ld. CIT(A) and moreover the judgement of the Hon'ble
jurisdictional High Court was rendered in the case of CIT
Vs. Mechmen (2016) 380 ITR 591 (MP) was not available at
the time of passing of impugned order. By way of
[IT(SS)A Nos.109, 110 & 678 /Ind/2016,] [Shri Pankaj MaKhija, Bhopal]
additional ground, assessee has raised an issue related to
jurisdiction for making assessment u/s 153C of the Act by
the assessing officer. Therefore, we set aside the impugned
order to the file of the Ld. CIT(A) for decision on additional
ground. Needless to say that Ld. CIT(A) would give
sufficient opportunity of hearing to the assessee.
Additional ground raised in this appeal is allowed for
statistical purposes. We make it clear that we are not
expressing our view on other grounds. In case assessee
succeeds in additional ground, the other grounds would
become academic only. Hence, appeal of the assessee is
partly allowed for statistical purposes.
Now coming to the IT(SS)A No.110/Ind/2016, the
parties have adopted the same argument in respect of the
additional grounds. No change is pointed out in the facts
and circumstances by the revenue in IT(SS)A
No.109/Ind/2016. We have decided the issue in para-4 6
[IT(SS)A Nos.109, 110 & 678 /Ind/2016,] [Shri Pankaj MaKhija, Bhopal]
above and the appeal of the assessee is partly allowed for
statistical purposes by observing as under:-
We have heard the rival contentions. Since the assessee has raised a legal ground, which was not before the Ld. CIT(A) and moreover the judgement of the Hon'ble jurisdictional High Court was rendered in the case of CIT Vs. Mechmen (2016) 380 ITR 591 (MP) was not available at the time of passing of impugned order. By way of additional ground, assessee has raised an issue related to jurisdiction for making assessment u/s 153C of the Act by the assessing officer. Therefore, we set aside the impugned order to the file of the Ld. CIT(A) for decision on additional ground. Needless to say that Ld. CIT(A) would give sufficient opportunity of hearing to the assessee. Additional ground raised in this appeal is allowed for statistical purposes. We make it clear that we are not expressing our view on other grounds. In case assessee succeeds in additional ground, the other grounds would become academic only. Hence, appeal of the assessee is partly allowed for statistical purposes. For the same reasoning, appeal of the assessee is
allowed for statistical purposes.
Now we take up ITA No.678/Ind/2016. The assessee
has raised following grounds of appeal:
“On the facts and in the circumstances of the case, the Ld. CIT(A) denied natural justice to the Appellant by passing the order under appeal and confirming the additions without acceding to the legitimate request of the Appellant to facilitate cross examination of the land owners (sellers) and other persons whose statements have been recorded on the back of the Appellant and the same have been used against and to the disadvantage of the Appellant in the assessment without confronting the same and without affording an opportunity to cross examine them. The Appellate order of the Ld. CIT(A) may, therefore, be set aside on the point at issue.
[IT(SS)A Nos.109, 110 & 678 /Ind/2016,] [Shri Pankaj MaKhija, Bhopal]
On the facts and in the circumstances of the case, the Ld. CIT(A) grossly erred and was totally unjustified in sustaining the addition of Rs.56,13,700/- without facilitating the cross examination of the sellers of the land and other persons concerned on the basis of whose statements. On the back of the appellant with no supporting documentary evidence, the addition has been made by the Assessing Officer, and after considering the outcome of such statements on cross examination. Hence, the addition in question of Rs.56,13,700/- being unfounded, unwarranted, arbitrary, unjustified and opposed to the facts be deleted in toto. 3. On the facts and in the circumstances of the case, the Ld. CIT(A) grossly erred and was totally unjustified in sustaining the addition of Rs.5,26,300/- without facilitating the cross examination of the sellers of the land and other persons concerned on the basis of whose statement on the back of the Appellant without confronting the same and without affording opportunity to cross examine them, the addition has been made, and after considering the outcome of such cross examination. The addition in question being opposed to natural justice be deleted in its entirety in the interest of justice. 4. The Ld. CIT(A)’s order under appeal is non speaking as to how the Appellant could be legally made a party to the agreement dated 27.10.2010 in which he was neither a party nor even a signatory, so as to justify the additions involved in pivoting round the payment made to the sellers of Rs.10,00,000/- dt. 27.11.2010 and Rs.40,00,000/- dated 10.12.2010. On the basis of which additions have been made by A.O. and confirmed in the present appeal, and, therefore, the additions sustained are unjustified and may be deleted in their entirety in the interest of justice. 5. The Appellant craves leave to add, amend, modify, withdraw the ground(s) of appeal at any time before the final hearing.” 7. At the outset, Ld. Counsel for the assessee submitted
that the additions have been made on the basis of an
agreement in which assessee was not a party. The
assessee was not granted cross examination.
[IT(SS)A Nos.109, 110 & 678 /Ind/2016,] [Shri Pankaj MaKhija, Bhopal]
Ld. D.R. has opposed these submissions.
We have heard the rival submissions, perused the
material available on record and gone through the orders of
the authorities below. It is contended by the assessee that
since the Department has recorded the statements and
entertained affidavits on the back of the assessee and used
the same against the assessee without confronting the
same, all the 3 land owners who claimed to have received
the alleged on money and the persons who have claimed to
have made the alleged on money payments to them may, in
the interest of justice, be allowed to be cross examined by
the assessee/his counsel. The assessing officer may
accordingly be directed to facilitate such cross examination
of the above witnesses of the Department at the earliest
where after the assessee shall furnish his further
defence/submissions in the matter failing which, the entire
addition made by the learned Assessing officer on account
[IT(SS)A Nos.109, 110 & 678 /Ind/2016,] [Shri Pankaj MaKhija, Bhopal]
of the alleged on money payments in the assessment years
involved deserves to be deleted in toto in the interest of
justice. After considering the totality of the facts, we set
aside the order of the Ld. CIT(A) as the assessee has not
been provided opportunity to cross examination of the
person on the basis of whose statement and the affidavit
additions were made. We therefore set aside the order of
the Ld. CIT(A) and restore the issues to the file of the Ld.
CIT(A) to decide it afresh. The Ld. CIT(A) would provide
opportunity to the assessee for cross examination as
requested by the assessee and decide the appeal afresh.
In the result, the appeals filed by the assessee are
partly allowed for statistical purposes.
Order was pronounced in the open court on 23 .01.2019.
Sd/- Sd/- (MANISH BORAD) (KUL BHARAT) ACCOUNTANT MEMBER JUDICIALMEMBER Indore; �दनांक Dated : 23/01/2019 VG/SPS
[IT(SS)A Nos.109, 110 & 678 /Ind/2016,] [Shri Pankaj MaKhija, Bhopal]
Copy to: Assessee/AO/Pr. CIT/ CIT (A)/ITAT (DR)/Guard file. By order
Assistant Registrar, Indore