SHRI HARI RAM YADAV,ALWAR vs. PRINCIPAL COMMISSIONER OF INCOME TAX, ALWAR

s आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”B” JAIPUR Jh fot; iky jko] U;kf;d lnL; ,oa Jh foØe flag ;kno] ys[kk lnL; ds le{k BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA. No. 215/JP/2018 fu/kZkj.k o"kZ@Assessment Year : 2013-14 cuke Shri Hari Ram Yadav The Pr.CIT, Vs. 302 Tiwara Bus Stand, Alwar. Behind Government School, Umrain, Alwar. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AGZPH 1481 M vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri Siddharth Ranka (Adv.) jktLo dh vksj ls@ Revenue by : Shri Varinder Mehta (CIT) lquokbZ dh rkjh[k@ Date of Hearing : 11/12/2018 mn?kks"k.kk dh rkjh[k@Date of Pronouncement :31/12/2018 vkns'k@ ORDER

PER: VIKRAM SINGH YADAV, A.M. This is an appeal filed by the assessee against the order of ld. Pr. CIT, Alwar passed U/s 263 of the Act dated 29.11.2017 quashing the assessment order passed under section 143(3) by the Assessing officer pertaining to Assessment Year 2013-14.

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has been filed with a request to condone the said delay. It was submitted that the order of the ld. Pr. CIT dated 29.11.2017 was served on the assessee on 04.12.2017, thereafter the assessee approached his local Counsel in Alwar for an opinion to challenge the order passed U/s 263 of the Act who referred the assessee to another Counsel in Jaipur. Thereafter, on the basis of opinion of the Counsel based in Jaipur, the assessee has filed the present appeal on 12.02.2018 though with a delay of 10 days and an affidavit in support of the petition was also filed which is placed on record. It was submitted that the delay was not intentional, hence, the said delay may kindly be condoned and the appeal may be admitted for adjudication on merits. The ld. CIT DR was heard who has not raised any specific objection. After hearing both the parties, considering the fact that the assessee sought opinion of his local Counsel who in turn referred him to Counsel based in Jaipur and in the process of said consultation, the delay of 10 days has occurred, considering the fact that this is the first stage where the assessee can challenge the order of the ld Pr CIT and the bonafide of the assessee not being in doubt, delay of 10 days in filing the present appeal is hereby condoned.

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Rs. 21,03,840/-. Against the said assessment order, the assessee moved an appeal before the ld. CIT(A), Alwar on 13.04.2016 challenging the order of the Assessing Officer assessing the long term capital gain on sale of agricultural land without considering the fact that the same was not capital asset U/s 2(14) of the I.T. Act and also not allowing the deduction U/s 54B for purchase of another agricultural land. Thereafter, notice U/s 263 was issued by the ITO(Technical) for and on behalf of ld Pr CIT, Alwar dated 06.10.2017 and after considering the submissions of the assessee, the ld. Pr. CIT has cancelled the assessment order passed by the AO U/s 143(3) of the Act dated 28.03.2016 with a direction to pass the assessment order afresh after taking into consideration the issues raised by him in his order U/s 263 of the Act. Against the said order passed by the ld Pr CIT u/s 263, the assessee has moved the present appeal before us.

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cause notice and absence of satisfaction so recorded by the ld Pr. CIT, the jurisdiction assumed by the ld. Pr. CIT is void and bad in law and the consequent order passed U/s 263 of the Act is not sustainable.

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subject matter of appeal before the ld CIT(A), the ld. Pr. CIT was wrong in assuming the jurisdiction over such matter U/s 263 of the Act.

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Hon’ble Supreme Court has laid down a clear legal proposition that “Section 263 does not in express form require a notice to be served as in the case of Section 147. Section 263 merely requires that an opportunity of being heard should be given to the assessee and the stringent requirement of service of notice U/s 147 cannot therefore be applied to the proceedings”.

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matter relating to interest on bank deposit and matter relating to cost of acquisition regarding plot of land which has been sold by the assessee were not the subject matter of appeal before the ld CIT(A) though the order of the AO as such was subject matter of appeal and thus, there is no basis for the ld AR to argue against the assumption of jurisdiction by the ld Pr.CIT u/s 263 of the Act.

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indexed cost of acquisition in relation to the entire land. It may be noted from PB-36 that the total area of the land was to the tune of 4983 sq. yds as per the following details: Plot’s Area 2854.03 sq. yds. Shop’s Area 637.79 sq. yds. Road’s Area 1491.18 sq. yds. Total Area 4983 sq. yds.

It was undisputed fact that the assessee has sold 1858.44 sq. yds during the year and if the area relating to roads (1491.18 sq. yds.) is excluded from the total area, still the assessee should have 1633.38 sq. yds. of unsold area. It is difficult to understand how the AO can allow the entire cost of acquisition when the significant unsold area is still available with the assessee. It appears from the replies filed by the assessee before the AO as appearing on PB-1 and PB-4 that no enquiries were made by the AO in this regard.

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of Revenue and it was accordingly submitted that the impugned order passed by the Ld. Pr. CIT be upheld.

“263. (1) The Principal Commissioner or Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the Assessing Officer is erroneous in so far as it is prejudicial to the interests of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment.”

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of the case justify including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment. The requirement in this provision is to pass the order 'after giving the assessee an opportunity of being heard.' It is unlike the language of certain provisions of the Act, including section 148 which expressly contain the requirement of issuance of notice, as is evident from sub-section (1) of section 148 which provides that “Before making the assessment, reassessment or recomputation under section 147, the Assessing Officer shall serve on the assessee a notice requiring him to furnish within such period, as may be specified in the notice, a return of his income ...”. Thus it is evident that whereas section 148 specifically requires serving a notice on the assessee, section 263 simply talks of giving an opportunity of being heard. So long as the assessee stands informed of the proceedings against him, there can be no irregularity in this regard. This requirement has nothing to do with the assumption of jurisdiction of the Pr. CIT rather it falls in the realm of principle of natural justice. Breach of the principles of natural justice may prejudice the legality of the order made but cannot affect the assumption of jurisdiction by the Pr CIT. A satisfaction that an order passed by the AO under the Act is erroneous and prejudicial to the interest of the Revenue is the basic pre-condition for exercise of jurisdiction under section 263. Both are twin conditions that have to be conjointly present. Once such satisfaction is reached, jurisdiction to exercise the power would be available subject to observance of the principles of natural justice. Therefore, so long as the order passed by the AO is erroneous and prejudicial to the interest of the Revenue, the jurisdiction vests with the Pr. CIT to revise such an order, of course, subject to the limitation

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enshrined in the provision. This is the well-established legal position which has been reiterated by the Courts from time to time.

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should have put any ITO on his guard. But the ITO without making any enquiries to satisfy himself passed the assessment order on 30-3-1961, for the assessment years 1952-53 to 1957- 58, and on 26-4-1961, for the assessment years 1958-59 to 1960-61. No bank account or any proper books of account were maintained by the assessee or produced before the ITO. A short stereo-typed assessment order was made for each assessment year. Profit from speculation was shown as Rs. 3,085 and interest Rs. 600, and Rs. 500 was added for want of books of account and evidence. No evidence whatsoever was produced in respect of the money-lending business done and interest income shown to have been received by the assessee. No names were given as to the parties to whom the loans were advanced, with amounts and rate of interest and as to when the interest income was received. It was not necessary to further detail the reasons given by the Commissioner because on the face of the record the orders were prejudicial to the interest of the revenue, and even if the facts which the Commissioner introduced regarding the enquiries made by him had been indicated to the assessee, the result would have been the same. The assessee, had not in any way suffered from the failure of the Commissioner to indicate the results of the enquiries. Moreover, the assessee would have full opportunity of showing to the ITO whether he had jurisdiction or not and whether the income assessed in the assessment orders which were originally passed was correct or not. The appeal was liable to be dismissed and decision of High Court was to be affirmed.”

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notice as prescribed in that section is a condition precedent. But no such notice is contemplated by section 33B. The jurisdiction of the Commissioner to proceed under section 33B is not dependent on the fulfillment of any condition precedent. All that he is required to do before reaching his decision and not before commencing the enquiry is that he must give the assessee an opportunity of being heard and make or cause to make such enquiry as he deems necessary. Those requirements have nothing to do with the jurisdiction of the Commissioner. They pertain to the region of natural justice. Breach of the principles of natural justice may affect the legality of the order made but that does not affect the jurisdiction of the Commissioner. At present we are not called upon to consider whether the order made by the Commissioner is vitiated because of the contravention of any of the principles of natural justice. The scope of these appeals is very narrow. All that we have to see is whether before assuming jurisdiction the Commissioner was required to issue a notice and if he was so required what that notice should have contained? Our answer to that question has already been made clear. In our judgment no notice was required to be issued by the Commissioner before assuming jurisdiction to proceed under section 33B. Therefore the question what that notice should contain does not arise for consideration. It is not necessary nor proper for us in this case to consider as to the nature of the enquiry to be held under section 33B. Therefore, we refrain from spelling out what principles of natural justice should be observed in an enquiry under section 33B. This

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court in Gita Devi Aggarwal v. Commissioner of Income-tax [1970] 76 ITR 496 (SC) ruled that section 33B does not in express terms require a notice to be served on the assessee as in the case of section 34. Section 33B merely requires that an opportunity of being heard should be given to the assessee and the stringent requirement of service of notice under section 34 cannot, therefore, be applied to a proceeding under section 33B.”

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to reopen the concluded assessment under Section 147 and/or to revise the assessment order under Section 263 of the Act. The scope of the power/jurisdiction under the different provisions of the Act would naturally be different. The power and jurisdiction of the Revenue to deal with a concluded assessment, therefore, must be understood in the context of the provisions of the relevant Sections noticed above. While doing so it must also be borne in mind that the legislature had not vested in the Revenue any specific power to question an order of assessment by means of an appeal. 10. Reverting to the specific provisions of Section 263 of the Act what has to be seen is that a satisfaction that an order passed by the Authority under the Act is erroneous and prejudicial to the interest of the Revenue is the basic pre-condition for exercise of jurisdiction under Section 263 of the Act. Both are twin conditions that have to be conjointly present. Once such satisfaction is reached, jurisdiction to exercise the power would be available subject to observance of the principles of natural justice which is implicit in the requirement cast by the Section to give the assessee an opportunity of being heard. It is in the context of the above position that this Court has repeatedly held that unlike the power of reopening an assessment under Section 147 of the Act, the power of revision under Section 263 is not contingent on the giving of a notice to show cause. In fact, Section 263 has been understood not to require any specific show cause notice to be served on the assessee. Rather, what is required under the said

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provision is an opportunity of hearing to the assessee. The two requirements are different; the first would comprehend a prior notice detailing the specific grounds on which revision of the assessment order is tentatively being proposed. Such a notice is not required. What is contemplated by Section 263, is an opportunity of hearing to be afforded to the assessee. Failure to give such an opportunity would render the revisional order legally fragile not on the ground of lack of jurisdiction but on the ground of violation of principles of natural justice. Reference in this regard may be illustratively made to the decisions of this Court in Gita Devi Aggarwal v. CIT [1970] 76 ITR 496 and in CIT v. Electro House [1971] 82 ITR 824 (SC). Paragraph 4 of the decision in Electro House (supra) being illumination of the issue indicated above may be usefully reproduced hereunder: "This section unlike Section 34 does not prescribe any notice to be given. It only requires the Commissioner to give an opportunity to the assessee of being heard. The section does not speak of any notice. It is unfortunate that the High Court failed to notice the difference in language between Sections 33-B and 34. For the assumption of jurisdiction to proceed under Section 34, the notice as prescribed in that section is a condition precedent. But no such notice is contemplated by Section 33-B. The jurisdiction of the Commissioner to proceed under Section 33-B is not dependent on the fulfilment of any condition precedent. All that he is required to do before reaching his decision and not before commencing the enquiry, he must

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give the assessee an opportunity of being heard and make or cause to make such enquiry as he deems necessary. Those requirements have nothing to do with the jurisdiction of the Commissioner. They pertain to the region of natural justice. Breach of the principles of natural justice may affect the legality of the order made but that does not affect the jurisdiction of the Commissioner. At present we are not called upon to consider whether the order made by the Commissioner is vitiated because of the contravention of any of the principles of natural justice. The scope of these appeals is very narrow. All that we have to see is whether before assuming jurisdiction the Commissioner was required to issue a notice and if he was so required what that notice should have contained? Our answer to that question has already been made clear. In our judgment no notice was required to be issued by the Commissioner before assuming jurisdiction to proceed under Section 33-B. Therefore the question what that notice should contain does not arise for consideration. It is not necessary nor proper for us in this case to consider as to the nature of the enquiry to be held under Section 33-B. Therefore, we refrain from spelling out what principles of natural justice should be observed in an enquiry under Section 33-B. This Court in Gita Devi Aggarwal v. CIT, West Bengal ruled that Section 33-B does not in express terms require a notice to be served on the assessee as in the case of Section 34. Section 33-B merely requires that an

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opportunity of being heard should be given to the assessee and the stringent requirement of service of notice under Section 34 cannot, therefore, be applied to a proceeding under Section 33-B." (Page 827-828). [Note: Section 33-B and Section 34 of the Income Tax Act, 1922 corresponds to Section 263 and Section 147 of the Income Tax Act, 1961] 11. It may be that in a given case and in most cases it is so done a notice proposing the revisional exercise is given to the assessee indicating therein broadly or even specifically the grounds on which the exercise is felt necessary. But there is nothing in the section (Section 263) to raise the said notice to the status of a mandatory show cause notice affecting the initiation of the exercise in the absence thereof or to require the C.I.T. to confine himself to the terms of the notice and foreclosing consideration of any other issue or question of fact. This is not the purport of Section 263. Of course, there can be no dispute that while the C.I.T. is free to exercise his jurisdiction on consideration of all relevant facts, a full opportunity to controvert the same and to explain the circumstances surrounding such facts, as may be considered relevant by the assessee, must be afforded to him by the C.I.T. prior to the finalization of the decision. 12. In the present case, there is no dispute that in the order dated 20th March, 2006 passed by the learned C.I.T. under Section 263 of the Act findings have been recorded on issues that

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are not specifically mentioned in the show cause notice dated 7th November, 2005 though there are three (03) issues mentioned in the show cause notice dated 7th November, 2005 which had specifically been dealt with in the order dated 20th March, 2006. The learned Tribunal in its order dated 28th August, 2007 put the aforesaid two features of the case into two different compartments. Insofar as the first question i.e. findings contained in the order of the learned C.I.T. dated 20th March, 2006 beyond the issues mentioned in the show cause notice is concerned the learned Tribunal taking note of the aforesaid admitted position held as follows: "In the case on hand, the CIT has assumed jurisdiction by issuing show cause notice u/s 263 but while passing the final order he relied on various other grounds for coming to the final conclusion. This itself makes the revision order bad in law and also violative of principles of natural justice and thus not maintainable. If, during the course of revision proceedings the CIT was of the opinion that the order of the AO was erroneous on some other grounds also or on any additional grounds not mentioned in the show cause notice, he ought to have given another show cause notice to the assessee on those grounds and given him a reasonable opportunity of hearing before coming to the conclusion and passing the final revision order. In the case on hand, the CIT has not done so. Thus, the order u/s 263 is violative of principles of natural justice as far as the reasons, which formed the basis for the revision but were not part of the show cause notice issued u/s 263 are concerned. The order of

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the CIT passed u/s 263 is therefore liable to be quashed insofar as those grounds are concerned." 13. The above ground which had led the learned Tribunal to interfere with the order of the learned C.I.T. seems to be contrary to the settled position in law, as indicated above and the two decisions of this Court in Gita Devi Aggarwal (supra) and Electro House (supra). The learned Tribunal in its order dated 28th August, 2007 had not recorded any finding that in course of the suo motu revisional proceedings, hearing of which was spread over many days and attended to by the authorized representative of the assessee, opportunity of hearing was not afforded to the assessee and that the assessee was denied an opportunity to contest the facts on the basis of which the learned C.I.T. had come to his conclusions as recorded in the order dated 20th March, 2006. Despite the absence of any such finding in the order of the learned Tribunal, before holding the same to be legally unsustainable the Court will have to be satisfied that in the course of the revisional proceeding the assessee, actually and really, did not have the opportunity to contest the facts on the basis of which the learned C.I.T. had concluded that the order of the Assessing Officer is erroneous and prejudicial to the interests of the Revenue. The above is the question to which the Court, therefore, will have to turn to. 14. To determine the above question we have read and considered the order of the Assessing Officer dated 30th March, 2004; as well as the order of the learned C.I.T. dated 20th March, 2006. From the above consideration, it appears that the learned

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C.I.T. in the course of the revisional proceedings had scrutinized the record of the proceedings before the Assessing Officer and noted the various dates on which opportunities to produce the books of account and other relevant documents were afforded to the assessee which requirement was not complied with by the assessee. In these circumstances, the revisional authority took the view that the Assessing Officer, after being compelled to adjourn the matter from time to time, had to hurriedly complete the assessment proceedings to avoid the same from becoming time barred. In the course of the revisional exercise relevant facts, documents, and books of account which were overlooked in the assessment proceedings were considered. On such re-scrutiny it was revealed that the original assessment order on several heads was erroneous and had the potential of causing loss of revenue to the State. It is on the aforesaid basis that the necessary satisfaction that the assessment order dated 30th March, 2004 was erroneous and prejudicial to the interests of the revenue was recorded by the learned C.I.T. At each stage of the revisional proceeding the authorized representative of the assessee had appeared and had full opportunity to contest the basis on which the revisional authority was proceeding/had proceeded in the matter. If the revisional authority had come to its conclusions in the matter on the basis of the record of the assessment proceedings which was open for scrutiny by the assessee and available to his authorized representative at all times it is difficult to see as to how the requirement of giving of a reasonable opportunity of being heard as contemplated by

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Section 263 of the Act had been breached in the present case. The order of the learned Tribunal insofar as the first issue i.e. the revisional order going beyond the show cause notice is concerned, therefore, cannot have our acceptance. The High Court having failed to fully deal with the matter in its cryptic order dated 7th August, 2008 we are of the view that the said orders are not tenable and are liable to be interfered with.

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served on the assessee and the assessee has been duly represented through its AR before the Pr.CIT in the revisionary proceedings and the principle of natural justice have thus been duly adhered to. The decision relied upon by the learned ARs taking a contrary view, in our considered opinion, have to be read subject to the consistent and settled legal position as clearly enuncitiated by the Hon'ble Supreme Court and which has been reiterated from time to time as we have discussed above. Therefore, we of the considered view that merely because the show cause notice dated 06.10.2017 is signed by the ITO (Technical), the same will not affect the assumption of jurisdiction by the ld Pr CIT u/s 263 of the Act and we are unable to accede to contentions so raised by the ld AR in this regard.

“With reference to subject cited above, I am directed to state that on examination of assessment records in your case for the assessment year 2013-14, the Principal Commissioner of Income Tax, Alwar, has considered that the assessment order dated 28.03.2016 passed by the Income Tax Officer, Ward-1(1), Alwar,

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for this Assessment Year is erroneous in so far as it is prejudicial to the interest of the revenue on account of the reason(s) discussed below:”

It is therefore clear that Pr CIT has examined the assessment records and on being satisfied that the order passed by the Assessing officer is erroneous and prejudicial to the interest of the Revenue, he has directed to issue the show-cause notice. There is no dispute that a proposal has been sent by the ITO Ward 1(1), Alwar, however, the same has been duly examined along with the assessment records by the Pr. CIT and after duly application of mind and on being satisfied that the matter calls for his intervention, the ld Pr CIT has exercised his jurisdiction under section 263 of the Act. We find that similar contention has been raised in case of Smt Sumitra Devi Khirwal vs CIT(Supra) and which has not been accepted by the Hon’ble Calcutta High Court wherein it was held as under:

“The next contention of Mr. Saraf is that under section 33B it is the duty of the Commissioner to call for and examine the record of any proceeding and if he considers upon such examination that the Income-tax Officer's order is erroneous in so far as it is prejudicial to the interests of the revenue he may exercise his powers under that section. In the instant reference, according to learned counsel, the Commissioner did not himself call for any records but certain records were placed before him and he acted thereon. From this point of view, submits counsel for the assessee, the Commissioner's consolidated order cannot be sustained. In our opinion, there is no substance in this

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contention. At page 26 of the paper book we find the notice under section 33B. The opening words of this notice are: "On calling for and examining your case for the assessment years 1956-57, 1957-58, 1958-59, 1959-60, 1960-61 and 1961-62 and other connected records.........". These statements in the notice were challenged before the authorities below. It is possible, as the departmental representative himself conceded before the Tribunal, that the records were put up before the Commissioner by his subordinates but that was no reason why he was debarred from exercising the powers under section 33B. All that the section requires is that before issuing a notice under section 33B he must call for all relevant papers and documents, examine them and then issue the notice if he is satisfied that the interests of the revenue have suffered. Going through the records of the tax authorities in this reference we have no doubt that the Commissioner had complied with these provisions and, as such, his order ought to be sustained.”

We are therefore unable to accede to said contention of the ld AR as well and the decisions relied upon by the ld AR are distinguishable and subject to decision of the Hon’ble High Court as discussed supra.

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details were called for and examined by the Assessing Officer and after due examination, no negative inference was drawn by the AO and it was wrong on the part of the ld. Pr. CIT to hold that the Assessing Officer has not conducted proper enquiry or has not examined the said issue. In response, the ld. CIT-DR supported the order of the ld. Pr.CIT and submitted that there was cash deposit of Rs. 1,40,25,000/- in the bank accounts of the assessee and it was explained before the AO that a sum of Rs. 98,35,000/- was received from 76 persons as advance for sale of land and Rs. 27,80,000/- were received from 20 persons from sale of land admeasuring 1858.44 sq. yds. The AO has accepted the source of cash deposits by simply relying upon the affidavits filed by these persons and has ignored the fact that the names of the persons (20) to whom land was sold are different from the persons (76) from whom the advances towards sale of land were received without making any enquiries in this regard. It was submitted that as per reply dated 22.02.2016, the assessee has furnished its cash account and bank book for the F.Y. 2013-14 & 2014- 15 but not for the relevant financial year i.e. 2012-13 relevant to A.Y. 2013-14 and on the basis of these documents which are not related to the year under consideration, the AO has found the cash deposits in the bank account of the assessee as explained.

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order is available on record at page 11 of the Revenue’s paperbook. In order to appreciate the rival contentions, we deem it appropriate to reproduce the same in verbatim as under:-

“ Office Note: The case was selected in scrutiny with a CASS reason, “cash deposit in savings bank account(s) is more than the turnover.”While scrutinizing the case it was observed that the assessee had sold a land during the year under consideration. A big piece of land was cut into several plots and sold by the assessee. For such plots, the assessee had received cash from people to whom such land was supposed to be sold and the same amount was deposited in his bank account. However, many deals for such plots were cancelled due to some or the other reason and then the amount was repaid to the persons from whom such amount was received. Therefore, the cash deposit in the saving bank account of the assessee was explained by him and no negative inference is drawn for the same. For the lands which was sold by the assessee no capital gain was offered by him, considering the land to be agriculture in nature. In the assessment order it has been established that such land was not and agriculture land, but a capital asset and therefore, the gain arising out of it would be charged accordingly as capital gain. For the calculation of indexed cost of acquisition of the land the rate give by the assessee was Rs. 1,25,000/- for the entire land i.e. 2655 sq. yards. To know the correct/approximate rate of the land in that vicinity several letters Tehsildar, Sub-Registrar and DIG Stamps, Alwar had been written but no concrete reply regarding the land during the year 1981- 82 was received till the finalization of this order. Therefore, the

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assessment order is being passed with the rate as provided by the assessee with a note that in case something adverse is received later, the appropriate action will be taken accordingly.”

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“2 (a) On the issue regarding the cash deposits made in bank account out of the advances shown to be taken against the agreements of sale of plots, it is quite clear from the assesseement record that the assessee had claimed the sources of huge cash, amounting to Rs. 1,11,25,000/-, deposited in his Bank Account, as advances received from 76 persons to the extent of Rs. 98,35,000/- against agreement of sale of the pieces of land, whereas, in addition to this amount the assessee had shown the sales consideration of plots to the extent of Rs. 27,80,000/- against sales deed executed during the year, in favour of 20 persons. The names of these persons in favour of whom the sale- deeds were executed during the year, are different from the name of persons from whom the advances in cash had been shown to be received during the year. The version of cash deposited in banks accounts as given by the assessee is that out of cash receipts of advances made from 76 persons of several amounts against agreement made for sale of plots, the same get deposited in cash in his bank account and therefore, the said accounts withdrawn from bank accounts in cash & refunded to those persons on account of cancelation of agreement for sale of plots during the year and upto next 3 years. This was accepted by the AO merely on the basis of affidavit(s) filed only by

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the assessee as obtained from those persons and statement recorded of 5 persons out of these, stated to be purchaser of the plots, and without ascertaining the availability of the plots on the land of the assessee for selling to the extent of such numbers. Out of 76 persons who furnished the Affidavits and out of which the Statement recorded of 5 persons, none out of them had enclosed/produced/furnished any supportive evidence of the transaction made with the assessee in the form of purchase agreement made or agreement of conciliation made with the assessee. There was no supportive evidence of the transaction made by those persons with the assessee were present before the AO to make an assumption that the amounts arrived in the bank accounts of the assessee were from the cash advances received by the assessee from the purchasers of plots. Further, in the Affidavit(s) filed by said persons and in the Statement(s) recorded of 5 persons out of them, the same do not narrate any plot serial numbers, area of plot and the name of the site plan with locality, etc. Moreover, from the Affidavits furnished, the genuineness and creditworthiness of such persons do not proved. As per Section 3 of Indian Evidence act, 1872, an Affidavit does not constitute evidence. Therefore, from the documents available on the record, I am of the opinion that the amount of the cash deposited in Bank Accounts out of receipt of Advances against sale of plots are not substantially proved. Accordingly the assessment order passed by the AO is based on the wrong assumption of the facts of the case on the issue. Hence, the contention of the AR of the assessee given in the written submission made on 15-11-2017 that ”the assessment was completed after verifying all the relevant documents which required for completing of the assessment proceedings. …….. therefore, it does not

34 ITA No. 215/JP/2018 Shri Hari Ram Yadav vs. Pr.CIT

required any order u/s 263 of the IT Act”, is treated as non-convincing on the issue.”

35 ITA No. 215/JP/2018 Shri Hari Ram Yadav vs. Pr.CIT

safeguard the interest of the Revenue and at the same time, keeping the principles of natural justice in mind, the matter was remanded back to the Assessing officer for fresh examination after due opportunity to the assessee. In the facts and circumstances of the present case, we are therefore of the view that the ld Pr CIT is right in remanding the matter for fresh examination. We therefore donot see any infirmity as far as this particular issue of cash deposit is concerned and the order of the Pr CIT is confirmed to this extent.

36 ITA No. 215/JP/2018 Shri Hari Ram Yadav vs. Pr.CIT

claim is the proportionate cost of acquisition corresponding to the plots of land which has been sold during the year and we therefore find the order of the AO is erroneous to this extent. At the same time, we find that the assessment order passed by the Assessing Officer U/s 143(3) of the Act was also subject matter of appeal before the ld. CIT(A) wherein the assessee has challenged the assessment of long term capital gain on sale of agricultural land which in turn include determination of cost of acquisition for working out such capital gains. Therefore, the present ground relating to cost of acquisition raised by the ld. Pr. CIT in invoking his jurisdiction U/s 263 of the Act was very much the subject matter of appeal before the ld CIT(A) and to this extent, we agree with the contention of the ld AR that the ld Pr. CIT cannot exercise his jurisdiction under Section 263 of the Act as far as this matter is concerned and to this extent, order of the ld Pr CIT stand modified.

37 ITA No. 215/JP/2018 Shri Hari Ram Yadav vs. Pr.CIT In the result, the appeal of the assessee is partly allowed.

Order pronounced in the open Court on 31/12/2018.

Sd/- Sd/- ¼fot; iky jko½ ¼foØe flag ;kno½ (Vijay Pal Rao) (Vikram Singh Yadav) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:-31/12/2018. *Santosh आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant- Shri Hari Ram Yadav, Alwar. 2. izR;FkhZ@ The Respondent- Pr.CIT, Alwar. 3. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) 5. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत. 6. xkMZ QkbZy@ Guard File { ITA No. 215/JP/2018} vkns'kkuqlkj@ By order,

सहायक पंजीकार@Aेेज. त्महपेजतंत