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Facts
The assessee, a co-owner, sold a capital asset (land) for Rs. 1,00,00,000/-, but the registering authority adopted a higher stamp duty value of Rs. 1,57,14,750/-, leading to an addition under Section 50C for the assessee's 1/4th share of Rs. 39,28,688/-. Despite multiple notices under Sections 148, 142(1), and 144(1) of the Income Tax Act, the assessee failed to comply, resulting in an ex-parte assessment. The AO confirmed a Long Term Capital Gain of Rs. 39,12,888/- by disallowing claims for cost of acquisition, improvement, Sections 54F/54B deductions, and brokerage due to lack of documentary evidence.
Held
The Income Tax Appellate Tribunal observed the assessee's consistent non-compliance during assessment and first appellate proceedings, which led to an ex-parte order and dismissal of appeal by CIT(A). However, considering the request for another opportunity, the Tribunal decided to restore the matter to the Assessing Officer. The AO is directed to provide a fresh opportunity to the assessee to submit relevant evidence and adjudicate the issues independently on merits.
Key Issues
Whether the ex-parte assessment was justified given the assessee's non-compliance, and if the computation of Long Term Capital Gain, including the application of Section 50C, accurate cost of acquisition, and claims for deductions under Sections 54F/54B, was correct in the absence of documentary evidence.
Sections Cited
144, 147, 148, 142(1), 144(1), 54F, 54B, 50C, 234A, 234B, 2(14)(iii), 131
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Income Tax Appellate Tribunal, JAIPUR BENCHES,”SMC” JAIPUR
Before: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA. No. 1327/JPR/2024
fu/kZkj.k o"kZ@Assessment Years : 2010-11 Lala Ram Bagra cuke Income Tax Officer, S/o Late Sh. Gopal Lal Sharma Vs. Ward-7(4), Vill. Bhadana, Amer, Jaipur. Jaipur. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: BBVPB6774K vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : None jktLo dh vksj ls@ Revenue by : Sh. Gautam Singh Choudhary, Addl. CIT a lquokbZ dh rkjh[k@ Date of Hearing : 18/02/2025 mn?kks"k.kk dh rkjh[k@Date of Pronouncement : 28/03/2025 vkns'k@ ORDER PER: DR. S. SEETHALAKSHMI, J.M.
This appeal is filed by the assessee against the order of the Ld. CIT(A), National Faceless Appeal Centre, Delhi dated 07.10.2024 [hereinafter referred as “CIT(A)/NFAC”] for the assessment year 2010- 11, which in turn arise from the order dated 29.11.2016 passed under section 144/147/148 of the Income Tax Act, 1961 [hereinafter referred as “Act” ] by the AO.
Lala Ram Bagra, Jaipur 2. The assessee has raised following grounds:- “1. The order passed by the CIT-(A) is illegal and bad in law as it was passed without considering my submissions and documentary evidences as given during the e-proceedings.
2. The CIT-(A) has erred in approving the AO's order which was passed without properly served the notices issued u/s 148, 142(1) & 144(1) of the IT Act. and not providing the reasons recorded for issuing notice u/s 148 of the IT Act
3. The CIT-(A) has erred not considering the facts that sale deed dated 12.10.2009 was not registered and executed on dated 12/10/2009 while it was actually executed on 05/02/2018.
4. The CIT-(A) is wrong in sustaining the addition made by the AO on account of the Long Term Capital Gain of Rs. 39,12,888/- against his 1/4" share in the said land
5. The CIT-(A) has erred in approving the AO's order in which cost of acquisition as on 01.04.1981 was not taken correctly and credit for cost of improvement was not given.
6. The CIT-(A) has erred in approving the AO's order in which claim u/s 54F & u/s 548 was not given.
7. The CIT-(A) has erred in approving the AO's order in which section SOC was wrongly applied.
That the interest u/s 234A and 2348 is consequential.
9. That the appellant craves permission to add, amend, alter, modify or to withdraw any of the ground of appeal.”
At the outset of hearing, none appeared on behalf of the assessee however, the Bench decided to proceed the matter on merit based on the materials available on record, concerning the issue in question.
Lala Ram Bagra, Jaipur 4. The brief facts of the case are that the assessee did not file any return of income for the year under consideration despite the fact that he was having taxable income notice u/s 148 of the IT Act, 1961 in the case was issued on 24.04.2015 which was duly served upon the assessee through registered post. The Brief facts of the case are that an information in this case was received from the DIT/1 &C), Jaipur vide dated 31 12 2014 that during the year under consideration the assessee along with three other co-owners namely Sh. Nanag Ram, Ramı Lal and Smt Barji Devi had sold a capital asset situated at Khasra No. 575, 576, 577, 578, 644, 645, 649, 650, 651 (Dhani) 652, 667 to 671, 674 to 680 at village Badharna Tehsil Amer, Jaipur for a sale consideration of Rs 1,00,00,000/- to Sh. Prabhu Dayal Saini vide sale deed dated 12.10.2009, however, the registering authority had adopted the sale value of which at Rs. 1,57,14,750/- for the purpose of stamp duty. Thus, as per the provision of section 50C of the IT Act, 1961 the sale value of the capital asset in the hands of the assessee comes at Rs. 39,28,688/-. Considering the facts of the case and after recording the reasons & after obtaining approval of the Addi.CIT Range-7, Jaipur, notice u/s 148 of the IT. Act, 1961, was issued to the assessee on 24.01 2015 which was duly served upon the assessee through registered post. However, in response to this notice the assessee made no compliance.
Lala Ram Bagra, Jaipur 4.1 The AO noticed that notice u/s 142(1) of the IT Act. 1961 was issued on 13.04.2016 fixing the case for hearing on 28.04.2016 which was duly served upon the assessee. In response to the notice the assessee made no compliance. Since there was change in incumbent in the office notice u/s 142(1) of the IT Act, 1961 was again issued on 10.05.2016 fixing the case for hearing on 23.05.2016 which was duly served upon the assessee. However, in response to the notice the assessee made no compliance. Notice u/s 142(1) of the IT Act, 1961 was again issued on 16.06.2016 fixing the case for hearing on 28.06.2016 which was duly served upon the assessee through registered post. However, the assessee again made no compliance. Notice u/s 142(1) of the IT Act, 1961 was again issued on 22.07.2016 fixing the case for hearing on 04.08.2016 which was duly served upon the assessee. However, the assessee again made no compliance. Looking to the continuous nun compliance show cause notice u/s 144(1) of the IT Act, 1961 along with notice u/s 142(1) of the I.T. Act, 1961 was issued on 31.10.2016 fixing the case for hearing on 10.11.2016 which was duly served upon the assessee through registered post. However, on the fixed date of hearing neither anybody appeared nor any adjournment application was filed 4.2 The above facts clearly show that despite providing various reasonable opportunities of being heard, the assessee has failed to furnish Lala Ram Bagra, Jaipur the required details and documents in support of his case. In these circumstances I have left no alternate except to complete the assessment ex- parte u/s 144 of the IT Act, 1961 on the basis of material available on records.
4.3 During the year under consideration the assessee along with his mother namely Smt. Barji Devi and his two brothers namely Sh Nanag Ram and Ramji Lal has sold a capital asset jointly for a sale consideration of Rs. 1,00,00,000/- to Shri Prabhu Dayal Saini vide sale deed dated 12.10.2009, however, the registering authorities have adopted the sale value of which for the purposes of stamp duty at Rs. 1,57,14,750/-. As per the provisions of section 50C of the I. T. Act, 1961, the sale value of the land in question is required to be taken at Rs. 1,57,14,750/- Therefore, the share of the assessee in the adopted sale consideration comes at Rs. 39,28,688/- As per the report received from the Tehsildar, Amer, Jaipur dated 08.08 2016, the land in question is situated within the municipal limit of Jaipur Municipal Corporation, Jaipur. Therefore, the same is a capital asset as defined in section 2(14)(iii) of the IT Act, 1961 and the assessee is liable to be taxed under the head long term capital gain 4.4 As per the copy of sale deed document No. 49 dated 21.01.1981 in the case of Shn Ganga Ram Sio Shri Nanu, Heera, Moti Gopal Sio Shri Lala Ram Bagra, Jaipur Birda, Resident of Biharipura. Tehsil-Amer Distt Jaipur, which was obtained from the O/o DIG (Stamps)-Jaipur-III, Jaipur, the sale value of two bigha agriculture land is Rs 4,000/- Therefore, per bigha market rate for agriculture land as on 01.04.1981 comes at Rs 2,000/- The land in question's situated at village Badharna which is about to 1Km from Biharipura village Tehsil-Amer Distt. Jaipur. Therefore, the market rate of the land in question cannot be more then Rs.2,000/- per bigha. As per the details on records the area of land in question is 1.2975 hector (approximately 5bigha) Since the assessee has failed to furnish any details/documents, cost of acquisition as on 01.04.1981 for the entire land in question comes at Rs. 10,000/- and therefore, indexed cost of acquisition comes at Rs. 63,200/-. Since assessee share in the land in question was 1/4th hence indexed cost of acquisition in the hands of the assessee as on 01.04.1981 is taken at Rs 15,800/- Therefore, the long term capital in the hands of the 7(4) assessee is determined at Rs 39,12,888/- (39,28,688-15,800).
4.5 During the course of enquiry proceedings before the DDIT(Inv)-1, Jaipur, statement on oath of the assessee were recorded on 29.11.2013 u/s 131 of the IT Act, 1961. The assessee in reply to question No.5 of his statements has claimed that out of the ale consideration of the above land he along with his both brothers namely Nang Ram and Ramji Lal who are Lala Ram Bagra, Jaipur co-owner in the land in question had purchased a plot measuring 900 sq yards from Sh. Prabhu Dayal Saini for a sale consideration of Rs. 9,00,000/- and thereafter they have made mitti filling, construction of house and boundrywall for Rs. 24,00,000/- Further, the assessee in reply to question. No 7 of his statement has stated that all the above payments were made for purchase of plot and construction thereon claimed to be made in cash and no bills / vouchers are available with him. Since the assessee has failed to furnish any documentary evidence in support of his claim during the course of assessment proceedings also, no deduction on account of purchase of land and construction of house is allowed Further, no documentary evidence regarding claim of brokerage payment of Rs. 3,00,000/-, as claimed through his statements recorded on 29. 11. 2013 as mentioned above has been furnished either during the course of enquiry made by the DDIT(Inv.)-1, Jaipur or during the course of assessment proceedings Therefore, in absence of any documentary evidence the claim of investment made in purchase of plot & construction thereon and the brokerage expenses is not subject to verification in the circumstances, no deduction on account of purchase of pet construction of house and brokerage expense is allowed. Further, no documentary evidence regarding claim of brokerage payment of Rs. 3,00,000/-, as claimed through his statements recorded on 29.11.2013 as mentioned above, has Lala Ram Bagra, Jaipur been furnished either during the course of enquiry made by the DDIT(Inv.)-1, jaipur or during the course of assessment proceedings. Therefore, in absence of any documentary evidence the claim of investment made in purchase of plot & construction thereon and the brokerage expenses is not subject to verification. In the circumstances, no deduction on account of purchase of plot & construction of house and brokerage expense is allowed. Therefore, long term capital gain the hands of the assessee is determined at Rs. 39,12,888/-.
Aggrieved from the order of AO, the assesee preferred an appeal before the ld. CIT(A). Apropos to the grounds so raised the relevant finding of the ld. CIT(A) is reiterated here in below:-
“3. The assessment was completed exparte u/s 144 due to non- compliance of the assessee. During the year under consideration the assessee alongwith his mother namely Smt. Barji Devi and his two brothers namely Sh Nanag Ram and Ramji Lal has sold a capital asset jointly for a sale consideration of Rs. 1,00,00,000/- to Shri Prabhu Dayal Saini vide sale deed dated 12.10.2009, however, the registering authorities have adopted the sale value of which for the purposes of stamp duty at Rs. 1,57,14,750/-.- Therefore, the share of the assessee in the adopted sale consideration comes at Rs.39,28,688/-. As per the report received from the Tehsildar, Amer, Jaipur vide his office letter No.4376 dated 08.08.2016, the land in question is situated within the municipal limit of Jaipur municipal corporation, Jaipur. The cost of acquisition as on 01.04.1981 for the entire land in question comes at Rs.10,000/- and therefore, indexed cost of acquisition comes at Rs.63,200/- Since assessee share in the land in question was 1/4th hence indexed cost of acquisition in the hands of the assessee as on 01.04.1981 is taken at Rs. 15,800/-. Therefore, the long term capital gains in the hands of the assessee is determined at Rs.39,12,888/- Lala Ram Bagra, Jaipur (39,28,688-15,800). Therefore, in the absence of any documentary evidence the claim of investment made in purchase of plot & construction thereon and the brokerage expenses is not subject to verification. In the circumstances, no deduction on account of purchase of plot & construction of house and brokerage expense is allowed. Therefore, long term capital gain in the hands of the assessee is determined at Rs.39,12,888/-. The assessment of Long Term Capital Gain at Rs.3912888/- is confirmed.
The appeal filed by the assessee is dismissed.
As the assessee did not receive any favour from the appeal filed before Ld. CIT(A). The present appeal filed against the said order of the Ld. CIT(A) before us on the grounds as reiterated here in above.
Per contra, Ld. DR objected to the prayer of the assessee and submitted that even the assessee did not represent case before the ld. AO and therefore, in that case the Bench feels the matter may be restored to the file of the Assessing Officer.
8. We have heard ld. DR and perused the materials available on record. The bench noted from the order of ld. CIT(A) that the appeal of the assessee was dismissed by the ld. CIT (A) for want of non- prosecution of the appeal. The assessee did not appear or filed any reply to the notices which were issued by the ld. AO during the assessment proceedings, finally the assessee completed ex-parte assessment. However, the Bench feels that the assessee because of any reasons could not advance his arguments/submissions to contest the case Lala Ram Bagra, Jaipur before the lower authorities and the ld. AR for the assessee also prayed to give one more opportunity to submit the evidences concerning the issue in question, with grounds so raised by the assessee, to decide it afresh by providing one more opportunity of hearing, however, the assessee will not seek any adjournment on frivolous ground and remain cooperative during the course of proceedings before the ld. AO.
Before parting, we may make it clear that our decision to restore the matter back to the file of the ld. AO shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by the ld. AO independently in accordance with law.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 28/03/2025.
Sd/- Sd/- ¼ jkBkSM+ deys'k t;UrHkkbZ ½ ¼MkWa-,l-lhrky{eh½ (RATHOD KAMLESH JAYANTBHAI) (Dr. S. Seethalakshmi) ys[kk lnL; @Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 28/03/2025 *Santosh आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant- Sh. Lala Ram Bagra, Jaipur. 2. izR;FkhZ@ The Respondent- ITO, Ward-7(4), Jaipur.