I.T.O. WARD -2(3), RAIPUR vs. SHRI CHAMPALAL PRAJAPATI, RAIPUR (CG)

Per Pavan Kumar Gadale, JM

This is an appeal filed by the revenue against the order of the CIT(A)-

Raipur, dated 17.9.2014 for the assessment year 2009-2010.

“1. Whether on the facts and circumstances of the case, the CIT(A) has erred in admitting additional evidence under Rule 46A of the Income Tax Act, 1961 without there being any reasonable cause for the assessee not to have produced before the Assessing Officer.

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income from civil contract work. The Assessing Officer found that on total

receipts of Rs.68,35,990/-, the assessee has shown gross profit at

Rs.6,18,.366 being @ 9.05% and net profit of Rs.4,06,323/- @ 5.94%. The

Assessing Officer further observed that the assessee has claimed labour

wages expenses of Rs.18,68,826/- but has not maintained any registers or

documents for daily attendance of the labours, or daily works done. The

assessee has also claimed material purchase expenses of Rs.65,76,455/-

and the expenses are not supported by proper bills and vouchers. It was in

this backdrop that the Assessing Officer was not satisfied with the

correctness and completeness of the accounts of the assessee and,

therefore, rejected the books of account and determined the net profit of the

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assessee @ 8% of the total receipts of Rs.68,35,990/-, which worked out to

Rs.5,46,879/-.

Similarly, the Assessing Officer observed that the assessee has

credited Rs.32,67,295/- on account of sale of agricultural land. However, on

AIR information, the Assessing Officer found that the sale transaction is

Rs.66,50,000/- against total land of 0.380 hectare sold by the assessee

jointly with Shri Meghraj Prajapati on 22.10.2008. The Dy. Registrar had

adopted the value of the property at Rs.1,72,71,000/- as per norms of the

State Government and that as per the provisions of sub-section (1) of

Section 50C of the Act. Since the assessee has not disputed before the

State Government, the Assessing Officer has taken value of sale

consideration at ½ share of Rs.1,72,71,000/- and allowing indexed cost of

acquisition determined the taxable long term capital gain at Rs.85,16,365/-.

Further, the Assessing officer found that the assessee has claimed

purchase of another agricultural land at Village: Boria Khurd for

Rs.35,00,000/-. The Assessee has filed copy of sale agreement dated

30.9.2009, in which the registration of the sale deed was to be executed

within two months from the date of agreement. Since the assessee did not

file details regarding agricultural activities done and sale of agricultural

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activities and other queries made by the Assessing Officer, the deduction

u/s.54B was not allowed to the assessee.

additional evidence without confronting the same with the Assessing Officer.

He also submitted that since the assessee has not maintained proper books

of account, the Assessing Officer has rightly rejected the books of account of

the assessee and estimating the net profit on percentage basis. Similarly,

the assessee has claimed deduction u/s.54B of the Act. As the assessee

could not comply with the conditions u/s.54B of the Act, the Assessing

Officer has made the addition and the CIT(A) was not justified in deleting

the same. Ld D.R. prayed that the Assessing Officer should have been

afforded opportunity to verify and examine the claim of the assessee.

authorities and materials available on record. Prima facie, on perusal of the

assessment order, we find that the Assessing officer has rejected the books

of account as he was not satisfied with the correctness and completeness of

the accounts and book result shown in contract business and, accordingly,

determined the net profit on percentage basis. The CIT(A) without bringing

any evidence on record has allowed relief. We also find that the CIT(A) has

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not called for any remand report from the assessing Officer. Further, at para

15 of the CIT(A)’s order, we find that the CIT(A) has considered an affidavit

from the sellers as regards to possession of agricultural land, in the form of

additional evidence produced by the assessee without confronting the same

with the Assessing Officer. Considering all these factors into consideration,

we are of the opinion that there is strength in the arguments of ld D.R. that

the CIT(A) has admitted additional evidence without calling for a remand

report from the Assessing officer. In view of above, we fit it proper to remit

the matter back to the file of the Assessing Officer to decide the disputed

issues afresh as per law and after giving opportunity to the assessee.

purposes.

Order pronounced on 17 /01/2018.

Sd/- sd/- (N.S Saini) (Pavan Kumar Gadale) ACCOUNTANT MEMBER JUDICIALMEMBER Raipur; Dated 17 /01/2018 B.K.Parida, SPS

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Copy of the Order forwarded to : 1. The Appellant : Income Tax Officer, Ward 2(3), Aayakar Bhavan, Central Revenue Building, Civil Lines, Raipur 2. The respondent : Champalal Prajapati, Near Bottle House, New Shanti Nagar, Raipur 3. The CIT(A)- Raipur 4. Pr.CIT- Raipur 5. DR, ITAT, Raipur 6. Guard file. //True Copy//

BY ORDER,

SR.PRIVATE SECRETARY ITAT, Raipur