RAJ KAMAL GANDHI,NEW SHIMLA vs. ITO, W-1, SHIMLA

PDF · subscribers
ITA 654/CHANDI/2018Status: DisposedITAT Chandigarh26 November 2018AY 2008-095 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that re-examining the capital gains issue was unnecessary as it was already examined multiple times, quashing the revisionary order. However, the addition under Section 68 was upheld due to the assessee's failure to provide reliable evidence for the source of funds.

What were the facts?

The assessee appealed against the revisionary powers exercised by the Principal CIT under Section 263 regarding the computation of long-term capital gains. Another appeal concerned an addition of Rs. 1.50 lacs made under Section 68 for unexplained cash credit.

What were the issues?

Whether the Principal CIT was justified in exercising revisionary powers under Section 263 when the issue was already examined. Whether the addition under Section 68 for unexplained cash credit was valid without supporting evidence.

Which sections of the Income-tax Act were involved?

Section 263,Section 148,Section 147,Section 143(3),Section 68

AI-generated summary — verify with the full judgment below

आदेश/Order

Per Sanjay Garg, Judicial Member: The captioned appeals have been preferred by the assessee against the separate orders of Pr. the Commissioner of Income Tax, Shimla

ITA Nos.654 & 655Chd/2018 Sh. Raj Kamal Gandhi, Shimla 2

[hereinafter referred to as ‘PCIT’] and Commissioner of Income Tax

[hereinafter referred to as ‘CIT(A)’ ] respectively.

2.

First, we shall take up the appeal of the assessee in ITA

No.655/Chd/2018.

ITA No.655/Chd/2018

3.

In this appeal, the assessee has agitated the action of the Principal

Commissioner of Income Tax, Shimla against the exercise of his

revisionary powers u/s 263 of the Income-tax Act, 1961 (in short 'the

Act') and thereby passing the impugned order.

4.

At the outset, the Ld. Counsel for the assessee has submitted that the

sole issue involved in the present case is relating to computation of ‘long

term capital gain’ on the sale of industrial plot which was purchased by the

assessee in the year 1976 and sold during the assessment year under

consideration. The Ld. Counsel for the assessee has invited our attention

to the original assessment order dated 24.12.2010 to show that the return

was selected for scrutiny only for investigation on the above issue of

computation of Long Term Capital Gain, wherein, during the assessment

proceedings the assessee has submitted the entire record to show that the

assessee had claimed cost of indexation in respect of land only and not in

respect of the building which, according to assessee, was already

demolished / damaged / having no value, at the time of the aforesaid sale

of the plot. The issue was thoroughly examined by the Assessing officer

and the capital gain returned by the assessee was accepted as such.

Thereafter, notice u/s 148 of the Act was issued to the assessee for

ITA Nos.654 & 655Chd/2018 Sh. Raj Kamal Gandhi, Shimla 3

initiation of re-assessment proceedings on the same issue. However, after

verifying the record, the assessment u/s 147 read with section 143(3) of the

Act was completed as such without any change or addition. Thereafter,

doubting the assessment on the same issue, the Ld. PCIT has exercised his

revision jurisdiction u/s 263 of the Act. The assessee had submitted the

details before the PCIT, however, the Ld. PCIT was of the view that the

Assessing officer in the assessment proceedings had not properly

examined the issue as to the written down value (WDV) claimed by the

assessee in respect of the building. He, therefore, directed the Assessing

officer to make a fresh assessment on this issue.

5.

Aggrieved by the above direction of the Ld. CIT(A), the assessee

has come in appeal before us.

6.

We have considered the rival contentions. Admittedly, the assessee

has not claimed the cost of indexation on the building. The assessee has

claimed the cost of indexation in respect of land only. As per the

provisions of the Income-tax Act, no depreciation is allowable in respect

of land, hence, there was no question of claiming the same in earlier years.

Under the circumstances, in our view, when the issue has already been

examined not only during the assessment proceedings carried out u/s

143(3) of the Act and subsequently re-assessment carried out u/s 147 read

with section 143(3) of the Act, no useful purpose will be served in

reexamining the same issue again, rather, it will only result into

multiplicity of the litigation and unnecessary harassment to the assessee.

We do not find any justification on the part of the Ld. PCIT for exercising

ITA Nos.654 & 655Chd/2018 Sh. Raj Kamal Gandhi, Shimla 4

the revision jurisdiction u/s 263 of the Act in this case. The order passed

u/s 263 of the Act in this is, therefore, quashed.

In the result, the appeal of the assessee is hereby allowed.

ITA No. 654/Chd/2018

7.

In this appeal, the assessee has agitated the action of the CIT(A) in

confirming the addition of Rs. 1.50 lacs made u/s 68 of the Income Tax

Act on account of unexplained cash credit found in the bank account of

the assessee.

8.

We have heard the rival contentions. The assessee before the

Assessing officer claimed that the said amount was out of sale proceeds of

scrap. However, the assessee could not furnish any reliable evidence in this

respect. The Assessing officer, therefore, treated the aforesaid deposits as

unexplained income of the assessee and made the impugned addition u/s 68

of the Act.

9.

Before the Ld. CIT(A), the assessee changed his stand and claimed

that the aforesaid deposit was out of advance money received on account

of sale of industrial plot. This was a totally a different plea taken by the

assessee which seemed to be an after-thought version. Therefore, the Ld.

CIT(A) rejected the aforesaid contention of the assessee.

10.

Before us, the assessee could not produce any reliable evidence to

show that the said deposit was out of the advance money received from the

sale of the plot. We, therefore, do not find any infirmity in the order of

the CIT(A) in making the impugned addition.

This appeal of the assessee is hereby dismissed.

ITA Nos.654 & 655Chd/2018 Sh. Raj Kamal Gandhi, Shimla 5

In the result, appeal of the assessee in ITA No. 655/Chd/2018 is allowed, whereas, the appeal in ITA No. 654//Chd/2018 stands dismissed. Order pronounced in the Open Court on 26.11.2018.

Sd/- Sd/- ( बी , आर . आर . कुमार / B.R.R. KUMAR) (संजय गग� / SANJAY GARG ) लेखा सद�य/ Accountant Member �या�यक सद�य /Judicial Member

Dated : 26.11.2018 “आर.के.”

आदेश क� ��त�ल�प अ�े�षत/ Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��यथ�/ The Respondent 3. आयकर आयु�त/ CIT 4. आयकर आयु�त (अपील)/ The CIT(A) 5. �वभागीय ��त�न�ध, आयकर अपील�य आ�धकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड� फाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar

More judgments on Section 263

All 13,616 judgments and leading authorities on Section 263 →

Recent GST High Court judgments

Search GST case law →