RAJU LAL JALTHANIYA,JAIPUR vs. ITO, WARD-7(1), JAIPUR

"As per information received from Sub-Registrars, the assessee has sold property/properties at Kh. No. 389/744, Village Bindayaka, Jaipur on 27.06.2008. As per provision of section 50C of the I.T.Act, 1961 the sale consideration or registered value, whichever is higher, is Rs. 79,55,200/As per the records available with this office, the assessee has not filed her/his return of Income for A.Y 2009-10, consequent to non-filing of return of Income by the assessee, it is established that income from capital gain amounting to Rs. 79,55,200/- has escaped assessment. Accordingly, it is evident that the assessee has failed to make true and full disclosure of Income. Hence, it is a fit case for issuance of notice u/s 148 of the I.T. Act, 1961 for A.Y. 2009-10"

Notice u/s 148 was served to the assessee. The case was transferred from ITO Ward 3(1) Jaipur on 28.06.2016, in Order u/s 127 No. 587 dated 07.06.2016. Due to change of incumbent a fresh notice u/s 142(1) along with questionnaire was issued on 13/07/2016 by fixing the case on 26.07.2016. On 26.07.2016 no compliance was made by the assessee.

Notice u/s 133(6) of the Income Tax Act, 1961 was issued on 26.07.2016 to the SUB-REGISTRAR-7, Chitrakoot Stadium, Jaipur. On 24.08.2016 the sale deed of the property has been received which was placed on record.

On 08.08.2016 show cause notice was issued by fixing the case on 23.08.2016 but again nobody attended nor was any reply filed again show cause was issued on 06.10.2016 by fixing the case on 17.10.2016, but again no compliance was made by the assessee. Again show cause was issued on 21.10.2016 by fixing the case on 07.11.2016, but again no compliance was made by the assessee.

Considering the non appearance, non co-operation and non compliance of Notices by the assessee it is deemed the assessee is evading the assessment proceedings. In these circumstances there is no alternate left but to complete the assessment ex-parte to say in support of his case.

The assessment in the case for the period under consideration is hereby made ex-parte u/s 144 of the LT Act 1961, as the best judgment assessment on the basis of information/documents available on records.

During the year under consideration, as per information assessee has sold immovable property valued Rs.79,55,200/- during the year under consideration.

The assessee was asked to furnish the tax liability of sale of property valued Rs. 79,55,200/- but the assessee has failed to furnish the tax liability of sale of property Hence, tax liability of sale of property remained unverified. The onus lies upon the assessee for not proving the tax liability of sale of property. As per the registered sale deed received from the Sub Registered Office-7, Jaipur. The above said property was sold on 26.06.2008 and the DLC of the property was Rs. 79,55,200/- in which 1/4 share belongs to the assessee.

It is pertinent to mention here that the assessee has not filed any return of income during the year under consideration. In view of this it cannot be constructed that the assessee has not earned any income during the year. Hence it is justified to take Rs.

19,88,800/-(1/4 share) towards income from undisclosed source of the year under consideration.

4. Aggrieved from the above order of assessment, the assessee preferred an appeal before the ld. CIT(A). Apropos to the grounds raised the relevant finding of the ld. CIT(A) is reiterated here below:-

“6.1 Decision and observations: 5.1 I have perused the grounds of appeal

, statement of facts and the facts appearing from the order u/s 147 r.w.s. 144 of the Income Tax Act for the Asstt. Year: 2009-10. The Appellant being aggrieved with this assessment order, dated: 16.11.2016 has preferred this appeal. It is seen that the issue of taxation has arisen from the fact that the appellant has sold the land and has not offered the tax anising from the sale of land. The appellant has not filed the return nor he has appeared in the course of the assessment proceeding. The Assessing Officer has assessed the income based on the material available with him. The Assessing Officer has assessed the income from undisclosed sources amounting to Rs. 19,88,800/-. The A.O came to the conclusion based on 1/4th share of the appellant in the land. The total consideration received for the land was Rs. 79,55,200/- Since, the addition has been made without considering any reply from the appellant, the tax liability assessed would be unfair on the part of the appellant. 5.3 Upon careful consideration of the entire facts of the case and the way the assessment is framed u/s 144, ex-parte and now the appellant has filed the appeal, it would be fair to direct the AO to complete the assessment, after giving the appellant adequate opportunity of being heard, as per the provisions of the IT. Act. The AO is also directed to examine "the taxability on sale of land for the relevant assessment year after taking into account explanation provided by the appellant and after conducting enquiries, as deemed necessary". 5.4 Needless to mention here, that there is plethora of judgments where it has been held that the onus lies upon the appellant to substantiate his contention with credible evidence during a legal proceeding. The Appellant is simultaneously directed to, co-operate in the set-aside proceeding with explanation and supporting material. documents, which he could rely upon. This order is being passed by virtue of powers entrusted upon the undersigned in the, proviso to clause (a) of sub section (1) of Section 251 of the I. T. Act, in the interest of natural justice. The impugned assessment is set-aside for fresh assessment, accordingly. 5.4As the assessment has been set aside for examination of the contentious issue afresh, other grounds appeal does not require any separate adjudication.

6. In the result, the appeal is set aside for statistical purpose.”

5. Feeling dissatisfied with the above order of the ld. CIT(A), the assessee preferred the second appeal before this tribunal on the ground as stated herein above. Ld. AR of the assessee vehemently argued that in the proceeding before the ld. CIT(A) all the details were provided as the details were not submitted to the ld. AO. Ld.

CIT(A) having considered the additional evidence called for report of the ld. AO. The said report reads as under and he prayed that based on the facts stated relief be granted to the assessee:

“Kindly refer to your office letter No. 1086 dated 10.07.2019 on the subject cited With reference to the above cited case, the desired report/comments on the additional grounds of appeal raised/ additional evidences submitted by the assessee's A/R during the appellate proceedings is submitted as under: The additional evidences submitted by the assessee before your goodself in appeal proceedings does not fall under any of the following exceptions as per Rule 46A of the Income Tax Rules, 1962:- (a) Where the Assessing Officer has refused to admit evidence which ought to have been admitted; or (b) Where the appellant was prevented by sufficient cause from producing the evidence which he was called upon to produce by the Assessing Officer, or (c) Where the appellant was prevented by sufficient cause form producing, before the Assessing Officer any evidence which is relevant to any ground of appeal, or (d) When the Assessing Officer has made the order appealed against without giving sufficient opportunity to the appellant to adduce evidence relevant to any ground of appeal

. Therefore, in saw of the above, the additional evidence filed by the assessee your good self may kindly be not admitted as the assessees case does not fall under any of the conditions laid down in Rule 46A of the Income Tax Rules, 1962 as:-

1. Despite of ample opportunities, no evidence has been filed by the assessee during the assessment proceedings to substantiate his clam. Since the evidences have not been filed, thus, question of refusal of admitting the evidence does not arise, Hence, not applicable in assessees case.

2. Ample numbers of opportunities were provided to the assessee and the assessee preferred not to file and evidence. No such sufficient reason has been given for not furnishing the evidence. Hence, not applicable in assessees case.

3. No such facts have been mentioned by the assessee which has prevented assessee to furnish evidences. Hence not applicable in assessee case.

4. As stated above ample numbers of opportunities were offered to the assessee to prove his claim, but he had failed to do so. Hence, not applicable in assessées case. Thus in view of above, the additional evidences in terms of the provisions of Rule 40A of Income Tax Rules, 1962 may not be accepted. However, without prejudice to above, the desired reply to the submission made by the AR of the assessee is submitted as under (1) in his evidence, the assessee submitted that the assessment was completed u/s 144/147 ex-parte assessment. The assessee could not participate in assessment proceedings as well the notices were served upon old non existing address and nu opportunity was provided to the assessee during the course of assessment proceeding and the assessment order was passed U/s 144. Submissions (1) The contention of the assessee of not granting opportunity at the time of assessment proceeding and issuing notice at non-existing address is baseless and devoid of facts because the assessment was done after providing sufficient opportunities of hearing to the assessee as mentioned below:- Details of the Notice issued date Date of hearing Assessee notices attended/not attended 148 14.03.2016 Within 30 days No reply/No return filed. 142(1) 13.07.2016 26.07.2016 No compliance 142(1) 06.10.2016 17.10.2016 No compliance 142(1) 21.10.2016 07.11.2016 No compliance

16.11.2016 Order passed In view of the above it is clear that contention of the assessee that AO has made the order without giving sufficient opportunity to the appellant to produce evidence relevant to the ground of appeal is frivolous and baseless. As the number of opportunity was provided to the assessor as mentioned above but he failed to produce any evidence and none is produced before your honors. All the above notices were sent to the assessee on his residential at Bindayaks and in his submission made before your honor be accepted that be live in Bindayaka Further, the assessee mentioned that he shifted to 36-B. Raghunath Vihar, Sirsi Road, Jaipur during F.Y. 2009-10 but such address was never intimated by the assessee to the department therefore, all the notices were sent to the residential address of the assessee at Bindayaka

In view of the above, it is clear that contentions of the assessee that he could not produce evidence that tune is baseless. As the number of opportunity was provided to the assessee as mentioned above but he failed to produce such evidence which are produce before your honor. (2) The assssee's case was completed u7 144/147 on 10.11.2016 by making additions of Rs 19.88.800/-on account of undisclosed long term capital gain in terms of provisions of sec: 50C of the Income Tax Act, 1961 after providing sufficient opportunity to the assessee. Again the said order the assessee filed appeal before your honor. (a) During the year under consideration, the assessee and three other persons sold land Khasra No. 389/744 (10Bigha 08 Biswa) & 302 (09 Biswa) situated at village-Bindayaka for sale consideration of Rs. 7137592/, and the Sub-registrar-V, Jaipur adopted the value of the property to Rs. 79,55,200/- for the stamp duty purpose and the slime of the assessee was 1/1 in total sale consideration, therefore the sale consideration in the case of the assessee arrives at (Rs. 2955400/4=19,88,800) and the same was added to the total income of the assessee as undisclosed long term capital gain as no document regarding cost of acquisition was furnished by the assessee during the course of assessment proceeding During the course of appellate proceeding the assessee has filed sale deed dated 25.06.2008 executed by the assessee and three persons regarding the sale of land Khasra No. 389/744 ( 10 Bigha 08 Biswa) & 09 Biswa) jsituated at village Bindayaka for sale consideration of Rs. 71,57,507/-, in the computation of Income filed by the assessee, he claimed cost of acquisition of Its 27,500/-as on 01.04.1981 but no decumbent regarding the purchase of such land is furnished by the assessee. Therefore, in would be fair and reasonable to estimate the rate of the land Rs. 35.000/bigha as on 01.01.1961 looking to the prevalent rates at that time. The assesses and three other person sold 1/3 of total 110 bigha 17 busvea-217 bawa) land and the share of the assessee in such property was 1/4 Therefore, the assesseee's individual share in such land was 1/12 of 217 biswa. Accordingly cost of acquisition as on 01.01.1951 is calculated at Rs. 5,000/20*18.08=4520/- Indexed cost of acquisition, 4520-582/100=26,306/- Accordingly long term capital gain is calculated as under:- Sale consideration ( 25.06.2008) Rs. 19,88,800/- Less: Indexed cost of acquisition (01.01.1981) Rs. 26,306/- (5,000/20*10.08=4520) 4520*582/100=26,306 Balance long term capital gain Rs. 19,62,494/- (b) In the computation of income filed by the assessee before your kind honor, he claimed deduction u/s 54F of 1517721/- and filed valuation report of Shri Mahendra Singhal registered valuer for determining the cost of construction of residential property in 2008-09 in the plot no. 36 (south part ) Raghunath Vihar, Sirsi Road, Jaipur, determining the cost of construction cost of Rs. 16,05,000/-in 2008-09 The assessee also paid Rs. 4,100/- to jaipur Vidyut Vitran Nigam Limited for the electricity connection on 01.09.2008. Thus total cost arrives at Rs. 16,09,100/- and the deduction u/s 54F is calculated as under:- Deduction u/s 54F=LTCG amount invested/total sale consideration = 19,62,494*16,09,100/19,88,800=Rs. 15,87,816/- (c) The assessee has also claimed deduction u/s 348 of Rs. 2,95,220/- and in support of his claim filed various sale deed and Ikramama for purchasing the agriculture land situated at Village-Karansar, Patwar Kshetra Karansar, Phelera , Jaipur. On the perusal of all such sale deeds and Ikrarnama if was noticed that all the purchased land is in the name of Smt. Mohini Devi wife of the assessee. As Smt. Mohini Devi in a separate assessee, therefore, purchasing the land in the name of Smt. Mohini Devi does not quality for claiming deductions a/s 54B in the case of the assessee.

3. In the computation of income filed by the assessee, the assessee has declared Income from other source for Rs. 87,737/-(Rs. 12,137/- from Interest from bank and Rs 75,600/- from Mason work). The same may kindly be added to total assessed income and may be enhanced. The report is being submitted for your kind perusal please as desired by your goodself. “

With the above remarks, in view of details furnished by the assessee during appellate proceedings additional evidence, the total income in the case of the assessee is calculated as under:- (1)Long term capital gain:- Sale consideration (25.06.2008) Rs. 19,88,800/- Less Indexed cost of acquisition (01.01.1981) Rs. 26,306/- Balance Long term capital gain Rs. 19,62,494/- Less: deduction u/s 54F Rs. 15,87,816/- (16,09,100/19,88,800*16,09,100=15,87,816/-_ 2. Income from other source as discussed in para No. 3 above) Rs. 87,737/- Total income of the assessee Rs. 4,62,415/-

Considering the fact stated in the above remand report we direct the ld. AO to tax the assessee on the income as proposed in the remand report. Based on these observations the income be determined as above.

As regards the contention of the assessee to allow the deduction u/s. 54B of the Act in the name of the wife is concerned we note that the section 54B of the Act this issue is decided by our own High Court in the favour of the assessee while dealing with the facts of the case of Laxmi Narayan Vs. Commissioner of Income Tax, JP-II [ 89 taxmann.com 334 (Rajasthan) ] wherein the court held that ; 7. We have heard counsel for the parties. 7.1 On the first issue of sec.263 in view of the decision of Malabar Industrial company Ltd. (supra) Sec.263 provisions are taken only on the ground of prejudicial and interest loss of the revenue to the Government. Merely change of opinion will not give any right u/s. 263 hence, the issue regarding Sec. 263 is required to be answered in favour of the assessee and against the department. 7.2 On the ground of investment made by the assessee in the name of his wife, in view of the decision of Delhi High Court in Sunbeam Auto Ltd. and other judgments of different High Courts, the word used is assessee has to invest it is not specified that it is to be in the name of assessee. 7.3 It is true that the contentions which have been raised by the department is that the investment is made by the assessee in his own name but the legislature while using language has not used specific language with precision and the second reason is that view has also been taken by the Delhi High Court that it can be in the name of wife. In that view of the matter, the contention raised by the assessee is required to be accepted with regard to Section 54B Raju Lal Jalthaniya, Jaipur. regarding investment in tubewell and others. In our considered opinion, for the purpose of carrying on the agricultural activity, tubewell and other expenses are for betterment of land and therefore, it will be considered a part of investment in the land and same is required to be accepted. 7.4 In view of the above, all the issues are answered in favour of the assessee and against the department.

In the result the appeal of the assessee is allowed.

Order pronounced in the open Court on 11/11/2025.