SMT. SUSHAMA KAPILA,KANGRA vs. DCIT, PALAMPUR

आदेश/ORDER PER DIVA SINGH

The present appeal has been filed by the assessee assailing the correctness of the order dated 28.03.2016 of CIT, Shimla pertaining to 2011-12 assessment year on the following grounds : 1. That order passed u/s 263 of the Income Tax Act, 1961 by the Ld. Principal Commissioner of Income Tax, Shimla is against law and facts on the file in as much as he was not justified to hold that assessment order dated 27.03.2014 passed, by the Ld. Deputy Commissioner of Income Tax, Palampur is erroneous in as much as prejudicial to the interest of the Revenue. 2. That he was not Justified to hold that the Ld. Assessing Officer did not make proper enquiry/investigation with respect to the sale of agricultural land and also deposits in bank account maintained with HDFC Bank by the appellant. 2. The ld. AR inviting attention to the material available on record submitted that in the facts of the present case, AO on the very same reasons had carried out re-assessment proceedings and after considering the submissions of the assessee and calling forth for the replies etc. had chosen not to make any addition on account of the sale of agricultural land and the deposits in the bank account maintained with HDFC bank by the assessee. Referring to the facts it was his submission that the assessee alongwith her husband owned the specific property wherein assessee had half share and half share was held by her husband Dr.

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S.C.Kapila. The property was sold in one chunk to the same person and the department on the very same facts has not drawn any adverse inference or taken any adverse view in the case of the husband and only in the case of the wife who had half share in the said property have proceeded to give a different treatment. Thus, it was his submission that apart from the facts that in the case of the co-owner, the facts are not disputed and in the case of the assessee, adverse inference was drawn also ignoring the fact that in the facts of the present case, the issue has already been looked into by the AO in 147 proceedings. Attention was invited to order dated 27.03.2014 passed by the AO u/s 147/143(3) of the Act. 2.1 Inviting attention to the reasons recorded on the basis of which re- opening was done, copy of which was made available. The ld. AR carrying us through the notice issued u/s 263 for forming the view that the order passed by the AO is erroneous and prejudicial to the interests of the revenue, invited attention to the explanation offered before the CIT read alongwith the explanation made before the AO in the 147 proceedings submitted that ignoring the submissions and the facts on record, the CIT Shimla has proceeded to exercise the power without bringing on record any evidence to rebut the conclusions drawn. The order having been passed purely on suspicions, it was submitted, deserves to be dropped. Reliance was placed upon Radhey Shyam Agarwal, HUF V CIT, Gwalior (2012) 35SOT 356 (Agra). 3. Addressing new issue on merits, attention was invited to the facts noticed by the AO in the re-assessment proceedings in para 3 wherein specific mention is made to the specific deposits in the HDFC Bank Ltd. Referring to the other evidence and the explanations given in para 2(c) and (g) it was submitted, would show that the assessee had accepted the making of the addition and it was noticed that there was duplication etc. in the two different AIRs which had been noticed by the AO. As a result of this, the returned income of Rs. 8,39,570/- was assessed at Rs. 1,05,00,770/-. Accordingly, it was his submission that the order passed by the CIT Shimla to the said extent cannot be upheld. 4. It was fairly conceded that on the third issue i.e. the bank interest not added in the total income, the assessee had himself made a prayer that this has been omitted and necessary directions may be issued to the AO. 5. The ld. CIT-DR relied upon the impugned order.

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“It has been noticed from the perusal ;of the assessment record that during the course-of assessment proceedings, you have filed copy of sale deed of land date 08-02-2011 alongwith a copy of Jama Bandi property for the Year 201)8-09. However, the plain reading of the sale deed shows that a house was situated on the land and a map of the house was enclosed with the sale deed and the land was sold alongwith a house. No enquiry was made (leave apart any independent inquiry) from the Revenue Department whether the land is an agricultural land or not and whether the land situated within municipal limits or otherwise and how much distance it had from the municipal limits. It was necessary to investigate the fact stated in the reasons recorded.” 6.3 It is seen from the reply extracted before the CIT that following submissions have been advanced on behalf of the assessee : a) Sale of land for Rs. 30,00,000/- to Sachin Verma "the assessee has sold agriculture land for Rs. 60,00,000/- which was in ½ joint share with her husband Dr. S.C. Kapila. The share of the assessee sold in this land comes to Rs. 30,00,000/-. This agriculture land is situated in Mohal Bindravan Tehsil Palampur as per Jamabandi issued by the local revenue authorities. During assessment proceedings necessary investigation was made by the assessing officer to ascertain the status of land in the revenue record, copies of revenue records were also called for, placed on the file and the assessment was never framed in the haste. After considering all facts and documents the assessing officer reached on the logical end that this land is an agriculture land "a non capital assets" It is further submitted that the population of municipal council Palampur is less than ten thousand, necessary evidence, a certificate from Executive Officer, Municipal counsel Palampur is enclosed herewith for your kind satisfaction, therefore this land falls in the definition of Non a capital assets as the population of Palampur Municipal Council is less than ten thousand and no capital gain tax is attracted, the Assessing officer has rightly treated the said land as non capital assets as agriculture land and no capital gain tax was levied. As your good self has raised another issue that there is a house in the land therefore it be considered as agriculture land I would like clarify that the house situated on the said land was a cow shed and it was not a residential house. However, legally it makes no difference there can be a residential house in agriculture land also.

6.4 Similarly qua the deposits in the HDFC account, the assessee has accepted the additions and some discrepancies were pointed out to the AO in the re-assessment proceedings. The CIT concluded that qua the deposits of Rs. 31,31,700/- the deposits were not explained. The assessee's explanation that there was some duplication and the amounts were added twice, was not accepted by the CIT. The following submissions extracted in the impugned order are extracted hereunder :

“Cash deposited in the HDFC Bank Id-34784869 Account Number 17361930000349. It is further submitted that during assessment year under consideration the assessee had made a cash deposit in her HDFC Bank Account Number 17361930000349 Palampur amounting to Rs. 58,56,700/- on different dates. The assessee has only one bank account in the HDFC as mentioned above (A/ c 17361930000349) 1 would like to bring in your kind notice that the HDFC Bank has filed two AIRs in two parts before the Income Tax Department during the year under consideration i.e 2011-12 against the PAN of the assesse under consideration Part-i Cash deposit Rs. 33,47,200/- consolidated 31.03.2011 Part-ii Cash Deposit Rs. 25,49,500/- consolidated 31.03.2011 While completing the assessment the assessing officer made an additions of Rs. 84,62,200/- on account of deposits made in the HDFC Bank account whereas the actual cahsdposit made by the assessee were only Rs. 58,56,700/- as per bank statement with effect from first April, 2010 to March 31, 2011. The assessing officer also made an addition of Rs. 9,00,000/-(09.02.2011), Rs. 9,50,000/-(08.02.2011), Rs. 5,00,000/-(17.01.2011) and Rs. 2,15,5007-06.10.2010) figure again taken from the bank statement of HDFC bank same account number 1736193000349 which had already

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formed part of AIRs Part-I Rs. 2,15,000/- and balance figures reflected in Part-ii of the AIRs. Thus an addition of Rs. 25,65,500/- was made twice.”

6.5 We find on going through the impugned order that as far as the factum of sale of specific property is concerned, not only the fact that in the case of the co-owner, it has not been disturbed but even otherwise, we find that there are only inferences, presumptions and suspicions and there is nothing on record on the basis of which it can be said that the matter was not enquired into by the AO and that the specific house referred to was not a cow-shed, as has been consistently argued on behalf of the assessee. Accordingly, we are of the view that in the peculiar facts of the present case, 263 proceedings on this ground cannot survive.

6.6. We find that addressing the claim of duplication of the amounts in para-I and para-II of the AIRs, we do not find on considering pages 24 and 25 of the Paper Book how the cash deposit of Rs. 31,31,700/- can be said to have been addressed. We further find that on the issue of bank interest which admittedly has not been considered in the re-assessment proceedings admittedly has not been added to the total income as is borne out from the following submissions on behalf of the assessee himself before the CIT, Shimla. Accordingly, to the said extent, the action of the CIT, Shimla deserves to be sustained. For ready reference, relevant extract from the assessee's submission is reproduced hereunder : Bank interest not added in the total income: The interest earned on the bank deposits in HDFC, OBC and OBC FDRs Rs. 3,91,370/- has been omitted by the assessing officer, the necessary directions be issued to the assessing officer in this regard to add back the same into the income of the assessee. 7. Accordingly, in view of the above, the appeal of the assessee is partly allowed. Order pronounced in the Open Court on 31.10. 2018.

Sd/- Sd/- ( अ�नपूणा� गु�ता ) ( �दवा �संह ) (ANNAPURNA GUPTA) (DIVA SINGH) लेखा सद�य/ Accountant Member �याय�क सद�य/ Judicial Member “पूनम” आदेश क� ��त�ल�प अ�े�षत/ Copy of the order forwarded to : अपीलाथ�/ The Appellant - 1. ��यथ�/ The Respondent - 2. आयकर आयु�त/ CIT 3. आयकर आयु�त (अपील)/ The CIT(A) 4. �वभागीय ��त�न�ध, आयकर अपील�य आ�धकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 5. गाड� फाईल/ Guard File 6. आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar