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Income Tax Appellate Tribunal, JAIPUR BENCHES,”A” JAIPUR
Before: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM
आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”A” JAIPUR Mk0 ,l- lhrky{eh] U;kf;d lnL; ,oa Jh jkBkSM+ deys'k t;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA. No. 254 to 257/JPR/2024 fu/kZkj.k o"kZ@Assessment Years : 2014-15 to 2017-18 Sh. Vinod Kumar Agarwal cuke DCIT Vs. E-61, Laxminarayan Vihar Central Circle, Ajmer. Colony, Ajmer Road, Madanganj, Kishangarh, Ajmer. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AAOPA8543Q vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri Sunil Porwal (C.A.) (V.H.) jktLo dh vksj ls@ Revenue by : Shri Arvind Kumar (CIT) a lquokbZ dh rkjh[k@ Date of Hearing : 24/04/2024 mn?kks"k.kk dh rkjh[k@Date of Pronouncement : 01/05/2024 vkns'k@ ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM These four appeals are filed by the assessee and are arising out of the order of the Learned Commissioner of Income Tax (Appeals), Jaipur-5 all dated 06.02.2024 [Here in after referred as “Ld.CIT(A)”] for the assessment years 2014-15 to 2017-18 respectively, which in turn arise from the order dated 30.12.2019 passed under section 153 r.w.s. 153B/143(3) of the Income Tax Act (here in after “Act”), by the DCIT, Central Circle, Ajmer.
2 to 257/JPR/2024 Sh. Vinod Kumar Agarwal vs. DCIT 2. Since the issue involved in these four appeals of the assessee’s are almost identical therefore, were heard together with the agreement the parties and are being disposed off by this consolidated order.
In the assessee has raised following grounds: - “1. Confirming the addition of Rs. 3,50,759/- for Long Term Capital Gain. 2. Any other matter with prior permission of the chair.”
4. At the outset, the ld. AR submitted that the matter pertaining to A.Y. 2014-15 in may be taken as a lead case for discussions as the issues involved in the lead case are common and inextricably interlinked or in fact interwoven and the facts and circumstances of other cases are identical in other assessment year and even grounds are also identical except the difference in figure. The ld. DR did not raise any specific objection against taking that case as a lead case. Therefore, for the purpose of the present discussions, the case of is taken as a lead case.
3 to 257/JPR/2024 Sh. Vinod Kumar Agarwal vs. DCIT 5. The fact as culled out from the record is that the search and seizure action u/s 132 of 1.T. Act, 1961, was carried out on 08.06.20107 at the residential and business premises of "M/s Swarnganga Group of Beawar" and its family members. Various incriminating documents/Loose papers been found at the time of search and some of them were also seized at various places of the group at the time of action u/s. 132 of the Income Tax Act. The ld. Pr. Commissioner of Income-tax, Ajmer vide his order u/s 127 dated 02.11.2017 assigned the jurisdiction from ITO, Ward-1, Beawar to DCIT, Central Circle, Ajmer in view of the search.
5.1 The assessee is Partner of M/s Bhajan Lal Suresh Chand Saraf, Beawar. During the year under consideration, the assessee is also having Rental Income, L.T.C.G. on Sale of Shares (Exempt u/s 10 (38)] and Income from Other Sources (Interest Income). A Notice u/s 153A was issued on 07.03.2018 which was duly served upon the assessee through e-Mail/Registered Post. In response to the notice u/s 153A, the assessee has submitted return of income on 23.03.2018 declaring income of Rs.9,61,720/- (after claiming deduction of Rs. 1,16,013/- under Chapter-VIA) and agricultural income of Rs. 1,06,000/-. The assessee had filed his original return of income on 18.07.2014 electronically declaring
4 to 257/JPR/2024 Sh. Vinod Kumar Agarwal vs. DCIT therein total income of Rs.9,61,720/-. Total income of Rs.9,61,720/-was also offered in the return of income filed on 23.03.2018 in compliance to notice u/s 153A of the 1.T. Act. A notice u/s 143(2) of the 1. T. Act was issued on 06.11.2019 and the same was duly served upon the assessee. A notice u/s 142(1) along with detailed questionnaire was also issued on 14.11.2019, requiring the assessee to furnish all the details/submissions along with documentary evidence by 21.11.2019.
5.2 In response to these notices ld. AR of the assessee filed reply on 02.12.2019 and attended time to time and submitted details Required books of account have been maintained, Bank statements, Balance sheet, Profit & Loss Account, cash flow statement etc, obtained, verified and placed on records. The seized books of account and other books of account have been examined on a test check basis. On perusal of documents filed which are sale deed wherein the assessee's share 10% and the following sale transactions were executed by the assessee:-
Annexure/ Page No. Nature of Amount Assessee’s Property detail document involved share (205) Exhibit AS-16 15-28 Sale deed Rs. 23,00,000 Rs. Sale of Villa No. 11- 2,30,000 17 at Pearl Ananda AS-16 67-80 Sale deed Rs. 19,00,000 1,90,000 Sale of plot No. D-9A
5 to 257/JPR/2024 Sh. Vinod Kumar Agarwal vs. DCIT at Pearl Ananda As-16 81-91 Sale deed 7,58,000 75,800 Sale of plot No. H-15 at Pearl Ananda As-16 92-102 Sale deed Rs. 11,50,000 Rs. Sale of plot No. D-8A 1,15,000 at Pearl Ananda Total Rs.61,08,000 Rs.6,10,800 Against the assessee’s share of Rs. 6,10,800/-, he has only shown gross sale proceed of Pearl Anand Plots at Rs. 2,60,041/- which is short by Rs. 3,50,759/-. Accordingly, the same is added to the income as undisclosed long term capital gain income for the year under consideration.
Aggrieved from the above order of the Assessing Officer, assessee preferred an appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the assessee by observing that;
“6. I have considered the facts of the case and written submission of the appellant as against the observations/ findings of the AO in the assessment order for the year under consideration. The relevant chart furnished during assessment proceedings are kept on record. The arguments of the appellant are not on merit. It is pertinent to mention here that Documents related to sale were found during the course of search, therefore sufficient incriminating material was found. It is an undisputed fact that the appellant had neither claimed any cost of acquisition /cost of improvement with indexation in ITR filed u/s 139(1) nor in ITR filed in response to notice u/s 153A and nor during the course of assessment proceedings. During the appeal and remand report proceedings though the computation of long term capital gain have been filed by the appellant but no documentary evidence regarding his claim of cost of acquisition (such as purchase deed etc.) and cost of improvement (such as bills/vouchers/agreements in respect
6 to 257/JPR/2024 Sh. Vinod Kumar Agarwal vs. DCIT of any civil work executed) have been produced by the appellant. In absence of any such documentary evidences with respect to the cost of acquisition/ improvement/ development/ construction expenses etc., the NEW CLAIM of the appellant is neither found verifiable nor acceptable. The statement of LTCG in computation sheet of the appellant while filing ROI is scanned and reproduced herewith as under:
On perusal of the above, it is very much clear that the appellant had not claimed any cost of acquisition/ improvement/ development/ construction expenses etc in ITR filed u/s 139(1) or in ITR filed in response to notice u/s 153A. Further the new claim is also without any supporting evidence. Thus, the AO had correctly considered the entire sale proceed received as capital gain in lieu of plots sold at Pearl Anand, Beawar, and rightly made the addition of Rs.3,50,759/- on account of short declaration of long-term capital gain. Thus, the addition made by the AO of Rs 3,50,759/- is correct and the same is hereby confirmed. Thus, ground of appeal on this issue is dismissed.
7. Feeling dissatisfied with the above order of the ld. CIT(A), the assessee has preferred the present appeal. In support of the ground so raised by the assessee, the ld. AR appearing on behalf
“The brief of facts of case are as under:- 1) That the assessee has filed return of income on 18.07.2014 showing source of income as share in partnership firm M/s Bhajanlal SureshchandSaraf, Beawer, Rental Income & Capital Gain. Due to action u/sec. 132 of Act on 08.06.2017; notice u/sec. 153A was also issued on 07.03.2018; return filed on 23.03.2018 in response to this notice. (Page 5 to 7) (2) Complete details related to calculation of short term / long term gain as per the case were filed before the A.O. (Chart for each year separately filed showing Cost per sq. yard being land developed as colonizer & sale value). Copy as enclosed. (Page 1 to 4) (3) Since it was a joint family ownership land hence share of each member for sale / cost was determined & intimated to A.O. (As per chart year wise). (4) As per computation sheet & details filed to A.O. it was clarified to A.O. as below:- (a) That assesseea other family members jointly sold plots & villas in PEARL-ANANDA SCHEME. Details as per chart enclosed. Accordingly to this chart (A)(1) Land sold (Total Value) section 50C Rs. 34,45,788.00 (2) Assessee's share 10% therein Rs. 3,44,578.00 (3) Less: Cost 10% to assessee Rs. 1,19,091.00 LTCGain on land 10% share Rs. 2,25,488.00 (B)(1) Villa's in scheme sold (Total 50C value) Rs. 53,50,000.00 (2) Assess's Share 10% therein Rs. 5,35,000.00 (3) Less Cost 10% details as per chart (62972+437475) (-) Rs. 5,00,447.00 LTCGain on Villa 10% Rs. 34.553.00 (C)Total LTC Gain (A+B) (225488.00+34553.00) Rs. 2,60,041.00 (D)Total Sales of land/villa (3445788+5350000) Rs. 87,95,788.00 (E)10% of Assessee's share in sale Rs. 8,79,579.00 (b) That since the A.O. has calculated the sales/gain only on seized material whereas complete transaction are to be considered &as already disclosed in return as per chart & para 4(a) above. The A.O. has considered total sales at Rs. 61,08,000.00 of scheme; whereas it is Rs. 87,95,788.00 for the year in total (Assessee has 10% share therein). (c) That as per return of income; sale / purchase, index value all were shown separately on all properties sold; except in case of "PLOTS AT PEARL ANANDA" only the net CAPITAL GAIN LONG TERM amount was disclosed due to multiple charts/share/sale transactions; for which separate charts for Cost per Sq. Yard/sale value (including section 50C
8 to 257/JPR/2024 Sh. Vinod Kumar Agarwal vs. DCIT value) per sq. yard were calculated & allocated to each share holder being co-owner. (d) That A.O. merely on seized records has calculated the sale value (50C value) & has allocated this "SALE VALUE" as "LONG TERM CAPITAL GAIN" instead of deducting the "COST' & indexation thereof. No care for following facts granted:- (a) That as per A.O. the total sale made in case of "PEARL ANANDA SCHEME" was for Rs. 61,08,000.00 (details as per Ao's order page 3). Whereas as per detailed charts provided by assessee to A.O. the total sale for this scheme was Rs. 34,45,788.00for land and Rs. 53,50,000.00 for construction (Including 50C value) Total Sales (3445788.00 + 53,50,000) Rs. 87,95,788.00. (b) That further the A.O. has directly considered the "SALE - VALUE" as "LONG TERM CAPITAL GAIN" instead deducting "COST OF LAND" & indexation thereof. Separate chart for cost with consolidation of sale/purchase values/area were filed for each year to A.Ο. (c) Accordingly 10% of share of sale value Rs. 87,95,788.00 in case of assessee comes to Rs. 8,79,579.00 (Rs. 3,44,579,00 + Rs. 5,35,000.00). (d) The cost of sales (Indexation value) for her share 10% is Rs. 6,19,538.00 (Details as per calculation sheet). e) Thus the net Long Term Capital Gain as arise for the year of "PEARL ANANDA SCHEME" is Rs. 2,60,041.00 (Sale value Rs. 879579.00-cost indexation Rs. 619538.00) = LTC Gain Rs. 2,60,041.00 Thus assessee has rightly shown the LTC Gain during the year of her share (10%) in return of income at Rs. 2,60,041.00 for Pearl Ananda Scheme. (f) Thus the A.O. instead considering the actual transactions made has only relied on "SEIZED DOCUMENTS" thus the basic difference are for (1) Total sale value for the year disclosed in return; but not considered by Α.Ο. (2) Total cost incurred, (Since sale value is case of land alone cannot be considered as LTCGain as done by A.O.). (g) The A.O. has no - where disputed the issue of "COST" year wise incurred. Further even after giving actual sale registries (including area sold &balance left) the A.O. has relied on seized documents only; whereas the actual sale are higher as per charts & documents. (1) That the Ld. CIT(A) while deciding the issue has taken following reasons (a) That documents related to sale were found during course of search; therefore sufficient incriminating material was found. (b) No cost of acquisition / cost of improvement with indexation in ITR filed u/sec. 139(1) in ITR filed in response to notice u/sec. 153A and nor during the course of assessment proceedings nor claimed in return filed. (c) During remand report also no cost of acquisition (Purchase deed etc.) cost of improvement etc. produced & in absence of same the new claim of appellant is neither found verification nor acceptable. Whereas the facts are:-
9 to 257/JPR/2024 Sh. Vinod Kumar Agarwal vs. DCIT (1) That the A.O. has not considered the "SALE DOCUMENT OF PEARL ANAND SCHEME" as incriminating as held by Ld. CIT(A). Since addition is on "CAPITAL GAIN" & not on cost / cost of improvement sale. The A.O. has only stated that "though the computation of long term capital gain have been filed by the assessee but no documentary evidence regarding his claim of cost of acquisition (such as purchase deed etc.) and cost of improvement (such as bills/vouchers/agreement in respect of any civil work executed) have been produced by the assessee. In absence of any such documentary evidences with respect to the cost of acquisition / improvement/development/construction expenses etc., the claim of the assessee is not found verifiable." Against the assessee share of Rs. 6,10,800.00 (10% of documents of sale Rs. 61,08,000.00) he has only shown gross sale proceed of pearl ananda at Rs. 2,60,041.00; which is short by Rs. 3,58,759.00 & is added to income. As capital gain & not "INCOME FROM OTHER SOURCES". Thus no incriminating document found since A.O. has got verified the facts from records thus taking a "NEW THOUGHT" to issue on subject is against his power. In remand report also the A.O. has not stated such "SALE OF PROPERTY DOCUMENTS FOUND" as Incriminating. Accordingly the notice u/sec. 153A as issued is bad in law in view of 149 taxman 399 (Page14) in case of Abhisar Buildwell (P) Ltd., in Civil Appeal No. 6580/DBL/2020-21 of Supreme Court order dated 24.04.2023; since notice u/sec. 153A is out of perview of law. (2) That since assessee is regularly filing it's capital account, balance - sheet from year to year & no defects therein found by A.O. So separately filing the documents for Cost, Cost of Improvement is immaterial since all such cost is for financial year 1992-93 (Cost of land) & cost to assesseeis appearing from year to year in balance sheet. No separate querry ever made by A.O. during assessment proceedings. The Ld. CIT(A) has also ignored this very basic fact, though intimated & brought to his notice "COMMENTS ON REMAND REPORT". (Page 8 to 14) (Page 15 to 8) (3) Even during remand proceedings neither the A.O. has asked any documents nor has issued any querry letter & without verifying the facts have submitted the "REMAND REPORT" Suo-Motto. (4) Further it is a case of "CAPITAL GAIN" & "SALE AMOUNT" cannot be considered as capital gain; since section 45(1) of Income Tax Act 1961 states "Any profits or against arising from the transfer of a CAPITAL ASSET" shall be chargeable to Income Tax under the head "CAPITAL GAIN". Whereas the A.O. & CIT(A) both have considered "SALE VALUE" as "CAPITAL GAIN", whereas complete details were filed to A.O. during assessment proceedings/u/sec. 154 even sale deed as found during search states "PURCHASE DATE YEAR 1992-93" & A.O. was duty bond to provide F.M.V. u/sec. 55 of Act as on 01.04.2001. Thus the 10 to 257/JPR/2024 Sh. Vinod Kumar Agarwal vs. DCIT very concept of A.O./CIT(A) is against the provisions of law & deserve to be quashed. (5) Further the A.O. has considered this difference as "LONG TERM CAPITAL GAIN" but tax has been charged at 30%.”
During the course of hearing the ld. AR of the assessee vehemently argued that the against the sale value taken by the ld. AO at Rs. 61,08,000/- and the 10 % share of the assessee at Rs. 6,10,800/, the assessee has considered the sale value at Rs. 87,95,788/- and the 10 % share of the assessee at Rs. 8,79,579/-. So the ld. AO while charging the capital gain did not allow the appropriate cost of acquisition along with the applicable index and thereby simply added the sale value even though the full value of sale is considered by the assessee. Even the ld. CIT(A) has not appreciated this set of facts. Considering the fact that the assessee has correctly shown the sale consideration even more then what the ld. AO is considering the addition made by the ld. AO and sustained by the ld. CIT(A) is required to be deleted.
Per contra, the ld. DR objected that the contention that the assessee advanced is not verified by the lower authority and without doing so the ld. AO should be allowed the version of the assessee and the matter needs to be remanded back to the ld. AO
We have heard both the parties and perused the materials available on record. The apple of discord in the matter is that the whether the capital gain chargeable to tax in the hands of the assessee is correctly charged and offered by the assessee or not. The ld. AR of the assessee contended that the assessee has against the sale consideration taken by the ld. AO at Rs. 61,08,000/-, the assessee has considered it at Rs. 87,95,788/- and 10 % of the same is computed at Rs. 8,79,579/- against that sale consideration the assessee has deducted the indexed cost of acquisition of Rs. 6,19,538/- if the same is considered the amount offered by the assessee at Rs. 2,60,041/- [ Rs. 8,79,579/- less Rs. 6,19,538/-] is correctly computed by the assessee. At the same time we find force in the arguments of the ld. DR that the aspect that the assessee is placing on record requires verification as the ld. AO noted that the assessee has shown net sales of plots at Rs. 2,60,041/- and therefore, this aspect of the fact is neither on record nor discussed in the orders of the lower authority. Considering these peculiar facts made available by the assessee we considered the force in the arguments of the ld. AR of the 12 to 257/JPR/2024 Sh. Vinod Kumar Agarwal vs. DCIT assessee and therefore, in the interest of equity and justice the assessee is directly to place on record the fact of the sales consideration and cost of acquisition deductible to the assessee and with this observation we restore the issue to the file of the ld. AO with a direction to consider the claim of the assessee in accordance with law and that too after allowing reasonable opportunity of being heard to the assessee. Thus, with grounds so raised by the assessee, we set aside the issue to the file of the ld. AO who will decide the issue afresh by providing one more opportunity of hearing to the assessee. Thus, the matter is restored back to the file of the ld. AO who will decide the issue based on evidence and submission of the assessee. However, the assessee will not seek any adjournment on frivolous ground and remain cooperative during 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.
13 to 257/JPR/2024 Sh. Vinod Kumar Agarwal vs. DCIT 12. The fact of the case in ITA Nos. 255 to 257/JPR/2024 are similar to the facts of the case in and we have heard both the parties and persuaded the materials available on record. The bench has noticed that the issues raised by the assessee in these appeals No. 255 to 257/JPR/2023 are equally similar on set of facts and grounds. Therefore, it is not imperative to repeat the facts and various grounds raised by both the parties. Hence, the bench feels that the decision taken by us in ITA No. 254/JPR/2024 for the Assessment Year 2014-15 shall apply mutatis mutandis in the case of M/s Vinok Kumar Agarwal in ITA Nos. 255 to 257/JPR/2024 for the Assessment Years 2015-16 to 2017-18.
In the result, the four appeals filed by the assessee are allowed for statistical purposes.
Order pronounced in the open Court on 01/05/2024.