SMT. MANJULA DEVI JAIN ,PALI vs. ITO,WARD-2, PALI

PER SANDEEP GOSAIN, J.M.

The present appeal has been filed by the assessee against the

order of Ld. CIT(A)-1, Jodhpur dated 24/09/2018 for the assessment

year 2013-14, wherein following grounds have been taken:

2 ITA 478/Jodh/2018 & SA 13/Jodh/2019 Manjula Devi Jain Vs ITO

“1. a. The ld. CIT(A) has erred in sustaining the part addition out of protective addition made by the ld. AO on account of sale of agriculture land at village Kharda, Pali.

b. The land in question was not falling within capital assets and having accepted for part of the lad, addition sustained for other part was not justified.

c. The ld. CIT(A) has erred in sustaining the addition on account of sale of land for Samandar Khan on the ground that the details of his assessment was not know. The addition so sustained is bad in law and bad on facts.

protective addition partly sustained by the Ld. CIT(A) in relation to

the sale of agriculture land.

through the orders of the authorities below and found from the

record that the assessee had sold two properties K.No. 999/321

3 ITA 478/Jodh/2018 & SA 13/Jodh/2019 Manjula Devi Jain Vs ITO

Kharda Rohat, Agriculture land belonging to Samandar Khan and

K.No. 998/321 Kharda Rohat, Agriculture land belonging to Smt.

Prassan Devi. This addition was made on protective basis in the

hands of the assessee. It was observed that the payment of sale of

the agriculture land was received by the assessee and there are

contradictory statements of the power of attorney holders and the

assessee. The total consideration was received at Rs. 2,07,13,000/-

towards sale of the aforesaid agriculture land and the payment to

the above two parties was made at Rs. 23,51,000/- and therefore,

for the balance amount of Rs. 1,83,62,000/- being sale of

agriculture land was made on protective basis in the hands of the

assessee.

protective basis in the hands the assessee and substantive was

considered in the hands of Samander Khan and Parasann D Devi.

However, the assessment order in the case of Prasann Devi was

passed for AY 2013-14 by ITO Ward-4, Pali on 28.12.2017 in which

the sale of such agriculture land was considered in her hands. It was

further observed that the said land not falling within the definition of

capital assets as was outside the prescribed limits and therefore no

capital gains was chargeable on such sale of land. The addition in

relation to sale of land relating to Prasann Devi was deleted.

4 ITA 478/Jodh/2018 & SA 13/Jodh/2019 Manjula Devi Jain Vs ITO

However, in relation to agriculture land belonging to Samandar Khan

since the details of his assessment was not available the addition in

relation to his land was sustained. The assessee is therefore,

aggrieved by such addition so sustained.

asset and situated in the same location, and in view of the

assessment order passed in the case of Prassan Devi, there was no

justification for sustaining the addition relation to the land belonging

to Samandar Khan also. Samandar Khan had given power of

attorney to assessee for sale of his agriculture land like Prassan Devi

and during the cross examination he had duly confirmed these facts.

He had confirmed that he had given power of attorney for sale of his

15 bigha agriculture land to the assessee and also stated that the

land was ancestral agriculture land and belonged to him and his

brothers. He also accepted part payments being received. The

assessee also relied upon certain decisions which states that on the

basis of power of attorney he cannot become the owner of the.

asset. It was therefore stated that no addition can be sustained.

facts in relation to the property belonging to Samandar Khan and

Prasann Devi are almost the same and the property are situated in

5 ITA 478/Jodh/2018 & SA 13/Jodh/2019 Manjula Devi Jain Vs ITO

the same location. Simply because the assessment of Prasann Devi

had been completed and the assessment of Samandar Khan is

pending the same cannot be a basis to sustain the addition in the

hands of the assessee. The execution of deed of power of attorney

is not disputed and the same had been confirmed by the said

person. The assessee as an agent derives a right to use his name

and all acts, deeds and things done, by him and subject to the

limitations contained in the said deed, the same shal1 be read as if

done by the said person giving such authorities. Samandar Khand as

land owner has not transferred the ownership of the land in fauor of

the assessee. The assessee, thus being neither owner nor a deemed

owner of the said capital asset, the said capital asset, cannot be

taken as property of the assessee. The sale consideration of the

aforesaid and, therefore, could not be a subject matter of addition in

the hands of the assessee. Further the department had already

accepted the fact in relation to sale of agriculture land of Prasann

Devi, and under the similar facts the addition sustained in relation to

Samandar khan does not seem to be justified and therefore, the

addition so made is hereby deleted.

amounting to Rs. 2,15,642/-. We found from the record that the

advance had been given for non earning purposes and therefore the

6 ITA 478/Jodh/2018 & SA 13/Jodh/2019 Manjula Devi Jain Vs ITO

claim of interest cannot be allowed. The ld. CIT(A) also observed

that the conditions of section 36(1)(iii) of the Act are not satisfied

and the deduction of interest cannot be allowed when these are

diverted into non business objects. The contention of the assessee

had been that interest payment is being not disputed and there is

no nexus of any diversion of interest bearing funds to the interest

free advances and as such the interest disallowed was not justified.

the issue raised by the AO and the ld. CIT(A) had not been

controverted and there is no justification for non business advances

being given. The addition so sustained by the CIT(A) is on the basis

of valid reason and the addition is hereby upheld.

credits. It is observed that AO made addition for Rs. 2,88,000/- on

the ground that the assessee had submitted confirmation of the

creditors but the same was not found to be satisfactory and the

source of deposits in the bank account of the creditors could not be

properly explained. The CIT(A) also sustained the said addition as

creditworthiness of the creditors was not proved.

the name of Ashish Lalwani, Bhanwarlal Lal Chand HUF, Chandra

7 ITA 478/Jodh/2018 & SA 13/Jodh/2019 Manjula Devi Jain Vs ITO

Prakash Bhanwarlal HUF and Shri Manan, confirmation, return of

income, computation were filed and the same were duly confirmed.

The onus had been duly discharged and therefore the addition was

not justified.

addition so made deserves to be deleted. The assessee had filed

confirmations and these creditors are income tax assessee and

credit is question had been duly confirmed by them. The onus had

been duly discharged and there is no basis to make the addition

simply on the basis of suspicion. The addition so made is therefore

deleted.

By way of this Stay application, the assessee seeks

stay of demand raised by the deparment till disposal of the

appeal.

from which this stay application arose. Therefore, this Stay

application become infructuous.

8 ITA 478/Jodh/2018 & SA 13/Jodh/2019 Manjula Devi Jain Vs ITO

infructuous.

and S.A. of the assessee is dismissed as infructuous.

Order pronounced in the open court on 20/03/2020.

Sd/- Sd/- (R.C.SHARMA) (SANDEEP GOSAIN) Accountant Member Judicial Member

Dated :. 20/03/2020 *Ranjan Copy of the order forwarded to : 1. The Appellant 2. The Respondent 3. CIT 4. The CIT(A) 5. DR, ITAT, Jodhpur 6. Guard File (ITA 478/Jodh/2018 & SA No. 13/Jodh/2019) By order

Assistant Registrar ITAT Jodhpur