DCIT, NEW DELHI vs. SH. SURENDER SINGH NAGAR, GHAZIABAD

We will first take up the Revenue’s appeal for assessment year 2005-06, wherein the Revenue has raised the following grounds:- 1. That the ld. CIT (A) has erred in law and on the facts of the case in deleting the addition of Rs.34,82,000/-.

2 & 4456/DEL/2014 2. (a) The order of the ld. CIT (A) is erroneous and not tenable in law and on facts. (b) The appellant craves leave to add, alter or amend any/all of the grounds of appeal before or during the course of the hearing of the appeal.

The ld. CIT (A), took note of this fact and held that in the proceedings under section 147, the ld. CIT (A) has deleted the said addition. The relevant observations and findings of the ld. CIT(A) in this regard read as under:- “With reference to grounds 1.2, 1.3, 1.4 & 1.5, the submissions of the appellant and the assessment order u/s 153A and 148 were duly considered. Upon a critical examination of the entirety of the facts and circumstances of the case, I am of the considered view that the appellant’s defense was much stronger than that of the Id.AO on account of the following factors (i) The Commissioner of Income Tax (A), Ghaziabad while passing the order u/s 250 of the Income Tax Act has observed as under “Going through the assessment order and submission of documents on record, I immediately find that there is no merit in the addition made of Rs.34,82,000/-. There is no provision in the act which helps the A .O. to derive the conclusion that the difference between the value of the property as per Stamp Duty Act and the value of the property as per purchase deed can be straight way constituted as assessee has paid excess purchase consideration than what declared in the purchase deed. The purchase has been effected through registered deed and the value of purchase, legally declared therein at Rs.1,70,000/- has to be accepted as the actual sale consideration paid by the assessee, unless any specific incriminating evidence is brought on record by the A .0.” There is no such material with the A.O. and hence the adverse conclusion derived by the AO is not warranted. The substantial difference between the value as worked out 4 & 4456/DEL/2014 by the Registration Authorities and the value of purchase as declared by the assessee, is at best, a starting point for any further inquiry/ investigation, but cannot be the base for addition. The AO has not proved any such under-hand dealing, and thus, the addition is not tenable. In such case of difference, there is a specific provision with section 50C of the Income Tax Act which applies to the seller and the AO will be advised to ensure that such application of section 50C has been made in the case of the seller. But no provision of Income Tax Act, as on today, gives any leverage to make the impugned additions in the hands of the buyer". (ii) From the perusal of the order of the assessing officer it is clear that the addition of Rs.34,82,000/- made by him u/s 69B of the Income Tax was purely based on the assessment order passed u/s 143(3) of the Income Tax Act and not on the basis of any incriminating material recovered in respect of the alleged investment during the course of search. (iii) It is intriguing to note that except assessment order passed u/s 143(3) the Id.DOT CC-15, New Delhi had no evidence of unaccounted investment in the properties purchased by him. (iv) The following judicial rulings also were found to be of assistance to the appellant:- (a) In the case of Meghmani Organics Ltd vs Deputy Commissioner of Income-tax 2010 006 ITR (Trib) 0360 it was held by ITAT Delhi that sections 153A to 153C of the Income- tax Act, 1961 were introduced to avoid multiplicity of proceedings and have only single assessment. If the original completed assessments which are the subject matter of further litigation are re-agitated under section 153C proceedings, it will not only multiply assessment proceedings but also appellate proceedings. The Assessing Officer is precluded from re-agitating the issue which has attained 5 & 4456/DEL/2014 finality in original assessment proceedings. The original assessment proceedings are subject to further appeals. So far as the original assessments are concerned, the jurisdiction of the assessing Officer is ousted and he is "functus officio". (b) In the case of Mrs. Uttara S. Shoreewala, placed in the unreported portion in"[2011] 48 SOT 6 (Mum), the additions made by the Assessing Officer were deleted by the Commissioner of Income-tax (Appeals). Additions made in the 153A proceedings were held to be not valid. The relevant observation that the “The intention of section 153A is not to disturb matters that have reached finality between the parties. In the assessments made under section 153A, therefore, the Assessing Officer had no jurisdiction to include the same additions, which were deleted by the Commissioner (Appeals) earlier and whose orders have become final''. In view of the above facts and circumstances of the case as discussed above, I do not feel inclined to differ from the stand taken by the erstwhile ld. CIT(A), Ghaziabad the relevant portions of whose order were quoted above.”

After hearing both the parties and on perusal of relevant finding given in the impugned order, we hold that whence same addition made by the Assessing Officer stands deleted by the ld. CIT(A) in the regular assessment proceedings under section 147, then same addition cannot be roped in the assessment under section 153A. Thus, on this ground alone, the Revenue’s appeal cannot be sustained and accordingly the same is dismissed.

In the result, appeal of the Revenue is dismissed.