NITINBHAI PANCHABHAI DHAKECHA,RAJKOT vs. THE INCOME TAX OFFICER - WARD 1(1)(5), RAJKOT

grounds of appeal raised by the assessee are as follows:

Before the Tribunal, the assessee submitted additional grounds of appeal;

At the outset, this appeal is time barred by 109 days. Ld. AR has filed an application for condonation of delay alongwith affidavit and request for condonation of delay, relevant part of the Affidavit is reproduced:

Ld. AR of the assessee has submitted that assessee did not know about the I.T. portal. Tax Consultant told him about the order on last week of October. That the Ld. AR of the assessee prayed for condonation of delay and appeal be heard on merit.

Ld. Sr. DR for the revenue relied on the order of the Ld. CIT(A) stating that order was served through IT Portal on the assessee. However, Ld. Sr. DR has not objected to the prayer of the assessee.

We have heard the matter and perused the matter available on record. We note that delay by 109 days which is not deliberated action of the assessee and there is a sufficient clause for delay filling the appeal. We find that the in the interest of justice, the assessee should be given an opportunity to explain his case. Hence, delay is condoned and appeal of the assessee be heard on merit.

Brief facts of the case that the, 1) The appellant had filed his return of income declaring total income of Rs. 98,271/-. The assessment of the appellant has been re-opened by issuing notice u/s. 148 of the Act on the basis of the information received from ADIT(Inv.), Rajkot 2) That the appellant was a Power of Attorney holder of Shri Manharsinh Jalamsinh Parmar has sold an immovable property, on behalf of the owner Page | 3 Manharsinh Jalamsinh Parmar for Rs. 10,20,000/- but the valuation for the for the purpose of stamp duty was Rs. 16,99,579/-. In the course of the assessment proceedings the appellant submitted that his name was Parmar mentioned, in the sale deed, in the capacity of Power of Attorney Holder. The appellant submitted that he was not the owner of the immovable property and the actual owner was Shri Manharsinh Jalamsinh Parmar and the transaction cannot be taxed in his hand. However, Ld. AO did not appreciate the submission of the appellant and made the addition of Rs. 16,99,579/- in the income of the assessee for the AY 2007-08 as undisclosed Long Term Capital Gain without giving any deduction of cost of acquisition. 5) Being aggrieved of the assessment order the appellant filed an appeal before Ld. Commissioner of Income Tax(Appeals), which ahs been dismissed by Ld. CIT(A).

That the assessee filed an appeal before us against the order of Ld. CIT(A) dated 12.06.2023.

During the course of hearing of the appeal, Ld. AR of the assessee has submitted that the assessee did not sold the property. The assessee has only power of attorney holder to complete transaction on the behalf of owner of the property, Shree Maharsinh Jalamsinh Parmar, and the assessee has never received any payment against the property.

On the contrary, Ld. DR from the revenue submitted that transaction of Rs. 16,99,576/- was to be taxed since the stamp value of the property was ascertain at Rs. 16,99,579/-. And Ld. DR has further relied of the order of the Ld. CIT(A).

We have heard the arguments of both the parties and perused the material available on record. We have noted the main ground is that holding addition of Rs. 16,99,579/- made by the Ld. AO on Long Term Capital Gain without giving deduction of cost of acquisition. The department has initiate proceedings on the basis of report from ADIT(Inv.)-1, Rajkot, in respect of this property. The assessee has submitted written submission wherein, the appellant has not sold any land he was just a power of Attorney holder of the seller Shri Manharsinh Jalamsinh Parmar. The sale consideration has not been received by him. As per the deed, the property was sold for Rs. 10,20,000/- and the value ascertain by Stamp value was 16,99,579/-.

We are of the view that for making an assessment and even upholding the assessment order by Ld. CIT(A) the copy of purchased deed, copy of bank statement and power of Attorney were not available.

That the petitioner has submitted before this Bench, the written submission alongwith Power of Attorney and copy with a judgement and purchased deed as additional evidence.

The assessee has also submitted copy of Power Attorney, is hereby reproduced:

We note that the assessee further submitted that the appellant has stated that, the property owner is Manharsinh Jalamsinh Parmar and property pertains to him only. The appellant was only a power of attorney to complete the transaction on the behalf of the Manharsinh Jalamsinh Parmar.

We note that the remand report was called by the Ld. CIT(A) and reply to rejoinder the assessee submitted the important legal issue involve is that, the property owner is Shri Manharsinh Jalamsinh Parmar has gave power of attorney to complete the transaction on his behalf which is also evidence from the sale deed as also from the power of attorney. Thus there is an error in making addition of this transaction in the name of assessee instead of doing in the name of actual owner. We further noted that, more ever the property belonged to seller Shri Manharsinh Jalamsinh Parmar and the assessee has acted only as his power of attorney holder and the sale consideration was not received by assessee.

Having considered the submission made by the petitioner on behalf of the petitioner as well as the observations made by the respondent Assessing Officer in the impugned order passed under section 148A(d) wherein, it is not disputed that the petitioner is working as peon in M/s. S. K. Enterprise and M/s. Anushri Enterprise. However, the transactions reported on portal were pertaining to both the partnership firms and the sale deeds were signed by the petitioner in the capacity of the Power of Attorney Holder and therefore, there is no question of any income being earned by the petitioner through such transactions which were reflected in the books of accounts of the Partnership Firm.

In view of the foregoing reasons, the petition succeeds and is accordingly allowed. The impugned order dated 28.03.2024 passed under section 148A(d) of the Act and notice under section 148 of the Act are hereby quashed and set aside. Rule is made absolute to the aforesaid extent. No order as to costs.

We are of the view that impugned order should be set aside, in the interest of justice and remit the matter back to the file of Ld. AO for fresh adjudication on merit after giving due opportunity to the assessee to present his case and filed the additional evidence before the Ld. AO In the result, the appeal of the assessee is allowed for statistical purposes.