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Income Tax Appellate Tribunal, SURAT BENCH, SURAT
Before: SHRI BHAVNESH SAINI & SHRI O. P. MEENA
आदेश /ORDER PER O. P. MEENA, AM 1. This appeal by the Assessee is directed against the order of learned Commissioner of Income tax (Appeals)-4, Surat (in short “the CIT(A)”) dated 05.05.2016 pertaining to Assessment Year 2011- 12, which in turn has arisen from the assessment order passed under section 143(3) dated 30.01.2015 of Income Tax Act, 1961 (in short ‘the Act’) by the Deputy Commissioner of Income-Tax, Central Circle-2, Surat (in short “the AO”).
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Additional ground of appeal: During the currency of appeal, the assessee has also filed an additional ground of appeal before the Tribunal by stating that “On the facts and in the circumstances of the case, the notice issued u/s. 148 of the Act is bad-in-law and without jurisdiction” 3. The learned counsel for the assessee submitted that the additional ground of appeal be admitted as it is being purely a legal issue, goes to the root of the matter and no further inquiry is required for deciding the same as all facts are already on record and issue arise out of impugned order in the light of ratio laid down by the Hon`ble Supreme Court in the case of National Thermal Power Co. Ltd. v. CIT [1998] 229 ITR 383 (SC) [1999] 157 CTR 249 (SC) and Jute Corporation of India Ltd. v. CIT [1991] 187 ITR 688 (SC): [1990] 53 Taxman 85 (SC).
On the other hand, the Ld. CIT (DR) opposed the admission of additional ground and relied on the written submissions dated 17.07.2019 submitted by his predecessor CIT (D.R.). It was argued the appellant had never raised this ground of appeal in any of the hearings before the Tribunal. Therefore, the assessee cannot raise this ground without any reason or justification. Further, the assessee has not supported this additional ground, by filing an affidavit required under Rule 10 of ITAT Rules, 1963. However, the
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ITAT has the discretion to admit the additional grounds, but that discretion can be exercised only if the appellant is in a position to show the cause as to what prevented him from taking this additional ground at the time of filing of original appeal memo. The assessee has failed to demonstrate what were the changes in the circumstances in relation to the facts and law, which has resulted in filing of the additional ground. The learned D.R. also placed reliance on some of the case laws as per his written submissions and contended that the Tribunal must decide the admission of additional grounds as the powers under Rule 11 of the ITAT Rules cannot be allowed at the pleasure of the Tribunal. The learned DR further submitted that in the case of Moti Ram v. CIT [1958] 34 ITR 646 (SC). 5. In rejoinder to above submissions, the learned counsel for the assessee contended that the assessee has duly taken this grounds before the AO and in the original appeal memo filed better the Tribunal as regular ground of appeal. However, while filing the original appeal, the assessee has not taken this as additional ground as appeal was filed along with co-owner of Smt. Nitaben Patel in which assessment was made under section 153A. During the course of hearing, before the Tribunal, the assessee therefore, taken this as additional ground as it was not taken before CIT (A). The learned counsel for the assessee submitted that in the case of
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CIT Vs. Sinhgad Technical Education Society [2017] 397 ITR 344 (SC): [2017] 250 Taxman 225 (SC) the Hon`ble Supreme Court observed that as “We, thus, find that the ITAT rightly permitted this additional ground to be raised and correctly dealt with the same ground on merits as well.” Learned Counsel submitted the learned D.R. has relied in the case of Maruti Udyog Ltd. v. ITAT (Delhi High Court) to contend that the Tribunal should first decide the additional ground before passing final order in appeal. In this regard it was contended that in said case the ITAT had admitted additional ground on 30.03.200 and treated as part heard, without giving any reasons for admission of additional ground, and fixed the further hearing of appeal on 28.04.2000 by stating that reasons for admitting additional ground would be incorporated in the order to be passed in appeals. Therefore, the Hon`ble High Court observed, “What the tribunal was required to do was indicate the reasons first and then take up the appeal for final disposal.” Therefore, the High Court has given the decision in favour of the Revenue. However, that does not mean that the order is required to be passed in piecemeal. Further, in this case the additional ground was not set forth in the appeal. However, ultimately additional ground was admitted by giving reasons and against which M/s. Maruti Udyog Ltd. has again approached the High Court in its petition which ultimately dismissed by the Hon`ble High Court,
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reported at 252 ITR 482 (Delhi). Learned Counsel further submitted that requirement of filing of an affidavit under Rule 10 of the ITAT rules arise where the fact which cannot be borne out by or is contrary to the record as stated by the parties. In the present case, the issue is a legal, goes to the root of the matter and no further fact investigation is required for deciding the same as all facts are already on record and issue arise out of impugned order and therefore, required to be admitted in the light of ratio laid down by the Hon`ble Supreme Court in the case of National Thermal Power Co. Ltd. v. CIT [1998] 229 ITR 383 (SC) and Jute Corporation of India Vs. CIT[1991] 187 ITR 688 (SC). Learned Counsel further submitted the assessee is not submitting any fresh evidence pertaining to new ground, hence, decision in the case of Moti Ram v. CIT [1958] 34 ITR 646 (SC) is not applicable. The decision of Hon`ble Calcutta High Court in the case of Steel Wire Products Ltd. v. CIT 208 ITR 740 (Cal.) was rendered the decision of National Thermal Power Co. Ltd. v. CIT [1998] 229 ITR 383 (SC) : [1999] 157 CTR 249 (SC) hence, not applicable. Learned Counsel submitted the Ahmedabad Tribunal in the case of Manzil D Shah has admitted additional ground against which the Revenue filed appeal before Gujarat High Court. However, the Hon’ble Gujarat High Court did not think it fit to give any comments on this well settled issue.
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We have heard the rival submissions and perused the relevant material on record. We find that the assessee has taken the impugned ground as regular ground of appeal in the appeal memo Form No.36 filed before Tribunal. As the assessee, ought to have taken this as an additional ground as it was not taken before CIT (A), but the same could not be taken as the appeal was filed along with co-owner, Smt. Nitaben D Patel, in which such ground was not required to be taken, as there was no issue of reopening of assessment? Therefore, the assessee has now taken this as additional ground before this Tribunal. We find that the additional ground being purely legal one and no facts are required to be investigated, hence, admissible. We find that the issue is a legal issue, goes to the root of the matter and no further fact investigation is required for deciding the same as all facts are already on record and issue arise out of impugned order and therefore, required to be admitted in the light of ratio laid down by Hon`ble Apex Court in the case of National Thermal Power Co. Ltd. v. CIT [1998] 229 ITR 383 (SC) : [1999] 157 CTR 249 (SC) wherein it was held that the additional ground of appeal can be admitted where the issue involved is pure question of law not involving any investigation of facts. The Hon`ble Supreme Court in the case of National Thermal Power Co. Ltd. v. CIT [1998] 229 ITR 383 (SC) : [1999] 157 CTR 249 (SC) held as under:
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The view that the Tribunal is confined only to issues arising out of the appeal before the Commissioner of Income-tax (Appeals) takes too narrow a view of the powers of the Appellate Tribunal (vide, e.g., CIT v. Anand Prasad [1981] 128 ITR 388 (Delhi), CIT v. Karamchand Premchand P. Ltd. [1969] 74 ITR 254 (Guj) and CIT v. Cellulose Products of India Ltd. [1985] 151 ITR 499 (Guj) [FB]). Undoubtedly, the Tribunal will have the discretion to allow or not allow a new ground to be raised. But where the Tribunal is only required to consider a question of law arising from the facts which are on record in the assessment proceedings we fail to see why such a question should not be allowed to be raised when it is necessary to consider that question in order to correctly assess the tax liability of an assessee. The reframed question, therefore, is answered in the affirmative, i.e., the Tribunal has jurisdiction to examine a question of law which arises from the facts as found by the authorities below and having a bearing on the tax liability of the assessee. We remand the proceedings to the Tribunal for consideration of the new grounds raised by the assessee on the merits. 7. Similar views, were also expressed by the Hon`ble Supreme Court in the case of in the case of Jute Corporation of India Ltd. v. CIT [1991] 187 ITR 688 (SC): [1990] 53 Taxman 85 (SC). We further note that the Hon`ble Supreme Court in the case of CIT Vs. Sinhgad Technical Education Society [2017] 397 ITR 344 (SC): [2017] 250 Taxman 225 (SC) observed that “The ITAT permitted this additional ground by giving a reason that it was a jurisdictional issue taken up on the basis of facts already on the record and, therefore, could be raised. In this behalf, it was noted by the ITAT that as per the provisions of Section 153C of the Act, incriminating material, which was seized, had to pertain to the Assessment Years in question and
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it is an undisputed fact that the documents, which were seized, did not establish any co-relation, document-wise, with these four Assessment Years. Since this requirement under Section 153C of the Act is essential for assessment under that provision, it becomes a jurisdictional fact. We find this reasoning to be logical and valid, having regard to the provisions of Section 153C of the Act.” In the light of above discussion and judicial rulings, the additional ground of appeal can be admitted where the issue involved is pure question of law not involving any investigation of facts. The reliance by the learned DR in the case of Moti Ram v. CIT [1958] 34 ITR 646 (SC) does not help the Revenue as there are no new facts which required to be investigated and being purely legal. Further, in the case of Maruti Udyog Ltd. v. ITAT (Delhi High Court) the ITAT had admitted additional ground on 30.03.200 and treated as part heard, without giving any reasons for admission of additional ground, and fixed the further hearing of appeal on 28.04.2000 by stating that reasons for admitting additional ground would be incorporated in the order to be passed in appeals. Therefore, the Hon`ble High Court observed, “What the tribunal was required to do was indicate the reasons first and then take up the appeal for final disposal.” Therefore, the High Court has given the decision in favour of the Revenue. However, that does not mean that the order is required to be passed in piecemeal. Further, in this case the additional ground was not set
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forth in the appeal. However, ultimately additional ground was admitted by giving reasons and against which M/s. Maruti Udyog Ltd. has again approached the High Court in its petition which ultimately dismissed by the Hon`ble High Court I reported in 252 ITR 482 (Delhi). Therefore, as per the requirement of decision of Hon`ble High Court is to assign reason for admission of additional ground before final order. Hence, we are duly complying the guidelines of Hon`ble High Court by assign reasons for admission of additional ground before dealing the appeal on merit on additional ground. We are of the view that requirement of filing of an affidavit under Rule 10 of the ITAT Rules, 1963 would arise where the fact which cannot be borne out by or is contrary to the record as stated by the parties. In the present case, there are no such facts, which are further required to be investigated. The other case laws relied by the learned D.R. are distinguishable on facts and law, hence, are not applicable to present case where the issue raised in additional ground is pure question of law. In view of above facts and circumstances, the additional ground is allowed to be admitted and being disposed-of on merits of the case. Now we will deal with the additional ground regarding reopening of assessment u/s.147 of the Act.
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Additional ground “On the facts and in the circumstances of the case, the notice issued u/s. 148 of the Act is bad-in-law and without jurisdiction” 9. The learned counsel for the assessee has invited our attention to the reasons recorded by the AO, placed at paper book page No.117. It has been mentioned in the reasons for reopening of assessment that Shri Kirit M Shah is the partner of M/s. Munisuvrat Corporation. However, Shri Kirit M Shah, is not the Partner of the M/s. Munisuvrat Corporation and there is no name of the assessee on seized paper, nor it is signed by the assessee. In view of that, the reasons recorded by the AO are prima-facie wrong and incorrect. The proceedings under section 147 are required to be quashed in the light of ratio laid down by the Honourable Gujarat High Court in the case of Amar Jewellers Ltd. v. DCIT [2018] 92 taxmann.com 4 (Gujarat) where it was not established that AJ and PJ had any nexus with MSTC, reasons recorded for initiating reassessment were based upon a factually incorrect premises, therefore, reassessment notice under section 148 of the Act was unjustified. The learned Counsel further submitted that the AO has referred the statement of Shri Ravjibhai Patel and Shri Kirit M Shah, while disposing the objection for reopening of assessment, but these statements were not reflected in reasons recorded. It is well-settled that reasons recorded cannot be supplemented with
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other material as held by the Hon`ble Bombay High Court in the case of Prashant S Joshi v. ITO 324 ITR 154 (Bombay) and Hindustan Lever Limited v. R V. Wadkar, ACIT 268 ITR 332 (Bombay). In the reasons recorded, it is also been mentioned that the extra consideration of Rs.11,65,31,847/- was paid in cash over and above the consideration of Rs.4,52,60,000/-. However, the copy of seized page of Satakhat/ saudachittihi from locker and scanned at Page No.3 of assessment order, does not mention that the amount was ever paid but only the proposed due date of the payment was given in the paper by mentioning the rate of land per sq. yard. Further, the name of the assessee was not mentioned in the impugned seized paper. The assessee has not been shown as seller of the land. The statement of any person whose name was mentioned in the alleged seized paper was not referred. Therefore, there cannot be prima-facie belief on the basis of alleged seized paper that the assessee has received on money as extra consideration on sale of land. Even though AO, did not take action under section 153C of the Act, which proves that the document does not belong to the assessee. Even in the reasons recorded, there is no whisper that the document pertains to the assessee. It was further submitted that merely the documents was not seized from the premises of the assessee, the presumption under section 132(4A) would not be available against the assessee. Therefore,
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reopening of assessment is not valid in the eyes of law, for which the learned Counsel has placed reliance in the case of Ganga Saran & Sons Pvt. Ltd. v. ITO [1981]130 ITR 1 (SC) and ITO & Ors v. Lakhmani Mewal Das [1976] 103 ITR 437 (SC) ITO & Ors v. Lakhmani Mewal Das [1976] 103 ITR 437 (SC) wherein it was held that the powers of ITO to reopen the assessment, though wide, are not plenary. The words of statute are “reason to believe” and not “reason to suspect”. The learned Counsel further submitted that there was no tangible material available on record with the AO to form a reasonable belief that the amount of sale consideration had been received by the assessee in cash, merely on the basis of the sauda-chitthi which has not been signed by the assessee nor his name appears thereon, for sale of such land, it could not be said that sale consideration was received by the assessee. Further said ‘saudachitti’ was never implemented as it was cancelled. The notice under section 148 of the Act issued by the AO deserves to be quashed, In support of this contention, the learned Counsel has placed reliance on Judgement of Hon’ble Gujarat High Court in the case of Vinodbhai Shamjibhai Ravani v. DCIT [2017] 79 taxmann.com 237 (Gujarat) against which the SLP filed by the Revenue was dismissed by the Hon`ble Supreme Court in the case of DCIT v. Alpesh Gokulbhai Kotadia [2018] 95 taxmann.com 108
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(SC). The learned counsel for the assessee also placed reliance in the case of Dhirajlal Girdharlal v. CIT [1954] 26 ITR 49 (SC). 10. Au contraire, the Ld. CIT (DR) contended that the land description as mentioned in the Satakhat/ saudachittihi matches with the land sold which subsequently sold to M/s. Munisuvrat Corporation, a firm. It is a common practice being followed in the land dealings in Surat, and such land dealings are entered in through saudachittihi between key person of the group and same is later on sold/purchased by the related parties of the key persons who have made this saudachittihi. Therefore, the AO had a prima- facie belief that income chargeable to tax has escaped assessment. Hence, reopening of assessment is valid in the eyes of law. 11. We have heard the rival submissions and perused the relevant material on record. The perusal of reasons for reopening of assessment shows Shri Kirit M Shah is a partner of M/s. Munisuvrat Corporation. However, he is not a partner of M/s. Munisuvrat Corporation. The reasons talks about extra consideration of Rs.11,65,31,847/- paid in cash over and above the consideration of Rs.4,52,60,000/-. However, there is no such amount mentioned in the seized paper, which only states rate of land. Therefore, the facts recorded in reason of reopening of assessment are factually incorrect. In order to appreciate the facts in proper prospective, it would be appropriate to reproduce the
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relevant portion of reasons recorded by the AO for reopening of assessment (PB-117) as under: “In the case of Shri K M Shah, a search action was carried out on 18.10.2011. During the course of search proceedings, from the bank locker No.262, held by Shri Kiritbhai M Shah, partner of M/s. Munisuvrat Corporation, a satakhat/saudachittihi was seized. The satakhat/ saudachittihi pertained to purchase of land at Village Pal, Block No. 350, T.P. Scheme No. 40, F.P. No. 86 admeasuring 4526 sq. mtrs. at the rate of Rs. 29,889/-. The total consideration comes to Rs. 16,17,91,847/- against the purchase deed registered at Rs. 4,52,60,000/- . Shri Mansukhbhai Diyalbhai Patel (Sheta) along with 3 others sold the said land to M/s. Munisuvrat Corporation. Shri Mansukhbhai Diyalbhai Patel (Sheta) is having share of 25% in the total sale consideration. Out of the extra consideration received of Rs. 11,65,31,847 /- the share at the rate of 25% comes to Rs. 2,91,32,962/-. The sale deed was executed on 03.01.2011 i.e. in F.Y. 2010- 11. Therefore, I have reason to believe that the income for A.Y. 2011-12 of Shri Mansukhbhai Diyalbhai Patel ( Sheta) has escaped to the tune of Rs. 2,91, 32,962/-. Therefore, the assessment for A.Y. 2011-12 is required to be reopened.” Emphasis supplied by us. 12. The perusal of the above reasons recorded for reopening of the assessment reveals that it has been clearly mentioned in the reason for reopening of assessment Shri Kirit M Shah as partner of M/s. Munisuvrat Corporation, which is factually not correct. Further, the reason for reopening of assessment refers satakhat/saudachittihi seized from bank locker No.262 held by Shri Kirit M Shah, which has been scanned at Page No. 3 of assessment order shows there is no mention regarding amount of sale consideration of Rs.16, 17,
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91, 847 against the purchase deed registered at Rs.4,52,60,000. We further find that the assessment has been reopened on untrue unfounded grounds. Hence, same is not tenable in law in the light of ratio laid down by Hon’ble Gujarat High Court in the case of Amar Jewellers Ltd. v. DCIT [2018] 92 taxmann.com 4 (Gujarat) wherein the Hon`ble High Court has observed in para 6 to 7 as under: 6. Having perused the reasons recorded by the Assessing Officer for reopening the assessment, the court had called upon the learned counsel for the revenue to produce the information that had been received by the Assessing Officer, which formed the basis for his belief that income chargeable to tax had escaped assessment. Accordingly, the learned counsel has produced the record of the case before this court. A perusal of the record reveals that the information received by the Assessing Officer was to the following effect. "DVIP (Investigation), Unit-6(4), Mumbai informed that account of M/s Shriji Trading Company was linked with M/s Vishnu Trading and Jay Corporation and provided certain details of all the accounts linked with Jay Corporation and Vishnu Trading. In page-6 of the statement of Shri Pravinkumar Jain recorded on 18-2-2013, in response to question No.23, Shri Pravinkumar Jain has accepted that he was having financial transactions with M/s Jay Corporation, which is a concern operated by a cheque discounter and he used to give him cash and in return, he used to get cheques/RTGS through M/s Jay Corporation." 7. Thus, the information provided to the Assessing Officer is that in the account of M/s Shreeji Trading Company there was a link with Jay Corporation and Shri Pravin Kumar Jain has accepted having financial transactions with Jay Corporation. However, no information has been provided to the effect that M/s Shreeji Trading Company was an entity handled by Shri Anil Kumar Jain and Shri Pravin Kumar Jain. 8. A plain reading of the reasons recorded for reopening the assessment reveals that the basis for formation of belief that the
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transaction made by the assessee with M/s Shreeji Trading Company is bogus in nature is that Shri Anil Kumar Jain and Shri Pravin Kumar Jain admitted to carrying on the business of giving accommodation entries in the names of various entities and upon verification it was found that one such entity handled by them was M/s Shreeji Trading Company. As noted hereinabove, the information which was received by the Assessing Officer nowhere discloses that M/s Shreeji Trading Company was an entity handled by Shri Anil Kumar Jain and Shri Pravin Kumar Jain. All that was disclosed was that M/s Shreeji Trading Company was linked with Jay Corporation and that Shri Pravin Kumar Jain has accepted that he had financial transactions with Jay Corporation which was a concern operated by a cheque discounter and he used to give him cash and in return, he used to get cheques/RTGS through M/s Jay Corporation. Thus, no nexus has been established between Shri Anil Kumar Jain and Shri Pravin Kumar Jain who had made the statements under section 131 of the Act and M/s Shreeji Trading Company. Thus, the reasons are based upon a factually incorrect premise that M/s Shreeji Trading Company was being handled by Shri Anil Kumar Jain and Shri Pravin Kumar Jain. Thus, the absence of any material on record to indicate any nexus between M/s Shreeji Trading Company and Shri Anil Kumar Jain and Shri Pravin Kumar Jain, erodes the very substratum for formation of belief that income has escaped assessment. Consequently, once there is no foundation for such belief, the reasons based thereupon have no legs to stand, hence, on the reasons recorded, the Assessing Officer could not have formed the belief that any income chargeable to tax has escaped assessment. Therefore, the assumption of jurisdiction on the part of the Assessing Officer under section 147 of the Act to reopen the assessment by issuing the impugned notice under section 148 of the Act is without authority of law, which renders the impugned notice unsustainable. 13. In the present case, the reason based on incorrect facts as Shri Kirit M Shah is not partner of M/s. Munisuvrat Corporation nor the seized material on which reasons are based does not mention any specific amount of sale consideration, nor any statement of the assessee or even the person from whose possession it was recovered. Therefore, in the light of ratio of above
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judgement, the AO could not have formed belief that the income chargeable to tax has escaped assessment. We observe that the Hon`ble Supreme Court in the case of ITO v. Lakhmani Mewal Das [1976] 103 ITR 437 (SC) wherein it was held that the words of the statute are "reason to believe" and not "reason to suspect". The reopening of the assessment after the lapse of many years is a serious matter. The Act, no doubt, contemplates the reopening of the assessment if grounds exist for believing that income of the assessee has escaped assessment. ---- The live link or close nexus which should be there between the material before the ITO in the instant case and the belief which he was to form regarding the escapement of the income of the assessee from assessment because of the latter's failure or omission to disclose fully and truly all material fact was Further, the sellers as per missing in the case. satakhat/saudachittihi are the Shri Ravjibhai P Patel and Shri Veljibhai M Sheta and purchaser are Shri Mukeshbhai A Morakhiya & Shri Kiritbhai M Shah seized as per Annexure-A. Thus, the so- called satakhat/saudachittihi does not mention the name of the assessee nor the assessee signs it. We further find that the assessee has not executed the said satakhat/ saudachittihi nor his family members at any point of time. Therefore, reopening of assessment deserve to be set-aside in the light of ratio laid down by the Hon’ble Gujarat High Court in the case of Vinodbhai Shamjibhai Ravani v.
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DCIT Central Circle [2017] 79 taxmann.com 237 (Gujarat): [2017] 393 ITR 491 (Gujarat) wherein it was laid down that Where there was no tangible material available on record to form a reasonable belief that amount of sale consideration on sale of land owned by third party was received by assessee in cash, merely on basis of sauda chitthi signed by assessee for sale of such land, it could not be said that sale consideration was received by assessee.
We find that the basis on which assessment has been reopened is factually incorrect and there was no tangible material available on record with the AO to form a reasonable belief that the amount of sale consideration had been received by the assessee in cash, merely on the basis of the sauda-chitthi which has not been signed by the assessee nor his name appears thereon, for sale of such land, it could not be said that sale consideration was received by the assessee. Thus, no nexus has been established between seized document, which not signed by the assessee and has no reference of the assessee. Thus, in absence of any material on record to indicate that the assessee has no link with the satakhat/saudachittihi, which erodes the very substratum for formation of belief that income has escaped assessment. Therefore, such reopening of assessment is not justified as held by the Hon`ble
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Supreme Court in the case of DCIT v. Alpesh Gokulbhai Kotadia [2018] 95 taxmann.com 108 (SC) Where there was no tangible material available on record to form a reasonable belief that amount of sale consideration had been received by assessee in cash, merely on basis of saudachitthi signed by assessee for sale of such land, it could not be said that sale consideration was received by assessee; SLP dismissed. The SLP filed by the Revenue against decision of Vinodbhai Shamjibhai Ravani v. DCIT Central Circle [2017] 79 taxmann.com 237 (Gujarat): [2017] 393 ITR 491 (Gujarat). Consequently, once there is no foundation for such belief, the reasons based thereupon have no legs to stand, hence, on the reasons recorded; the AO could not have formed the belief that any income of the assessee chargeable to tax has escaped assessment. Therefore, the assumption of jurisdiction on the part of the AO under section 147 of the Act to reopen the assessment by issuing the impugned notice under section 148 of the Act is without any authority of law, which renders the impugned notice issued under section 148 as unsustainable in law. Therefore, we are of the opinion that the reopening of assessment on this very ground deserves to be quashed. In the light of above facts and circumstances, and on careful consideration of ratio as laid down in above discussed judgements of Hon`ble High Court and Hon`ble Supreme Court
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cited (supra) and respectfully following the same, we find that in the instant case the formation of belief of the AO that the assessee has received extra sale consideration from sale of land as based on factually incorrect facts as there was no mention of any name of the assessee. Therefore, in absence of any evidence and material on record to indicate extra sale consideration received by the assessee from sale of land asper such satakhat/saudachittihi by the assessee erodes the very substratum for formation of belief that income has escaped assessment is renders reopening as invalid. Accordingly, we hold that proceeding initiated u/s.147 of the Act by issue of notice under section 148 of the Act of the Act on the basis of reasons recorded for incorrect facts and without application of mind, therefore, reopening of assessment and issue of notice under section 148 of the Act is held to be bad-in-law and therefore, same is quashed. Thus, additional ground of appeal is therefore allowed.
Ground No. 2 relates to addition of Rs.2,91,32,962/- being 25% share of the assessee treating received in cash and out of books of accounts on the basis of seized paper found from bank locker held by Shri Kirit M Shah as undisclosed income long- term capital gain.
We have heard the parties. Since, as we have held the reopening of assessment as invalid and quashed the assessment
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proceeding for reopening of assessment in earlier part of this order and as a consequent thereof, the other grounds of appeal of the assessee on merits become infructuous hence, we are not adjudicating the same having become infructuous.
In the result, the appeal of the assessee is partly allowed.
The order is pronounced by listing the case on the Notice Board under Rule 34(4) of Income Tax Appellate Tribunal Rules 1963.
Sd/- Sd/- (BHAVNESH SAINI) (O.P.MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER Surat: Dated: 27th August, 2019/opm Copy of order sent to- Assessee/AO/Pr. CIT/ CIT (A)/ ITAT (DR)/Guard file of ITAT. By order / / TRUE COPY / / Assistant Registrar, Surat