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Income Tax Appellate Tribunal, JAIPUR BENCHES,”B” JAIPUR
Before: HON’BLE SHRI SANDEEP GOSAIN, JM &
fu/kZkfjrh dh vksj ls@ Assessee by : Shri Shrawan Kumar Gupta, Advocate. jktLo dh vksj ls@ Revenue by : Smt. Monisha Choudhary (Addl. CIT) lquokbZ dh rkjh[k@ Date of Hearing : 12/09/2023 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 28/11/2023 vkns'k@ ORDER PER: SANDEEP GOSAIN, J.M.
This appeal by the assessee is directed against the order dated 18.03.2023 of ld. CIT (A), National Faceless Appeal Centre (NFAC) Delhi passed under section 250 of the IT Act for the assessment year 2017-18. The assessee has raised the following grounds :-
1. Notice U/s 148 is illegal Notice U/s 148 is illegal Notice U/s 148 is illegal: Notice U/s 148 is illegal : : : The Ld. CIT(A) (NFAC) has grossly erred in confirming the impugned order u/s 147 rws 144 of the I.T. Act, 1961 dated 29/03/2022 as well as Notice issued u/s 148 dated 25/03/2021 and other Notices thereafter, though those were illegal, bad in law on the facts of the case for wants of jurisdiction and various other reasons or barred by limitation and further contrary to the real facts of the case hence the same may kindly be quashed.
2 Shankar Engg. Works Foundry, Jaipur. 2. Notice U/s 143(2) did not issue Notice U/s 143(2) did not issue : : The Ld. NFAC has Notice U/s 143(2) did not issue Notice U/s 143(2) did not issue : : grossly erred in law and facts in confirming the act of Ld. AO through which he initiated re-assessment proceedings without issuing Notice U/s 143(2) which is mandatory condition therefore complete re-assessment proceedings including order is bad in law and without jurisdiction.
3. Order Passed without issuing Specific Show Cause Notice Order Passed without issuing Specific Show Cause Notice Order Passed without issuing Specific Show Cause Notice Order Passed without issuing Specific Show Cause Notice : The Ld. NFAC has grossly erred in law and facts in : : : confirming the Assessment Order as passed by Ld. AO through which he made a huge addition of Rs. 1,54,33,523/- without issuing specific SCN prior to it.
4. Invocation of Invocation of Invocation of New Price Inflation Index without Invocation of New Price Inflation Index without New Price Inflation Index without New Price Inflation Index without Jurisdiction : Jurisdiction : The Ld. NFAC has grossly erred in law and Jurisdiction : Jurisdiction : facts in confirming the action of Ld. AO in invocation of New Price Inflation Index as notified by CBDT vide Notification No.44/2017 dated 05/06/2017 for the Question FY i.e. 2016-17 while it is applicable w.e.f. FY 2017-18 only, for calculating Indexed cost of Acquisition as well as Improvement, therefore complete capital gain as calculated by the then is wrong and deserve to be deleted led complete addition is illegal and without jurisdiction. 5. The Ld. NFAC has grossly erred in confirming the Action of Ld. AO in calculating the capital gain by taking the cost of acquisition for the year 2000-01 instead of 1981-82 which is applicable in the assessees case. 6. The Ld. NFAC has grossly erred in law as well as on the facts of the case in confirming the order of Ld. AO whereas in passing the Ex-party Assessment order in gross breach of law without providing adequate and reasonable opportunity of being heard to the assessee. Hence the assessment so made and consequent addition so made may kindly be quashed and delete. 7. The Ld. NFAC has grossly erred in law as well as on the facts in confirming the Action of Ld. AO in disallowing cost of construction of Rs. 8,00,000/- while it is specifically mentioned in sales deed of questioned transaction. 8. The Ld. NFAC has grossly erred in the facts and circumstances in confirming the action of Ld. AO in adopting the value of sales consideration of Rs. 2,44,91,953/- (Rs. 81,63,975/- and Rs. 1,63,27,978/-) u/s 50C of the Income Tax Act, 1961 as against Rs. 2,33,00,000/- (Rs. 1,55,00,000/-+78,00,000/-) for the purpose
of calculating long term capital gain without having corroborative material in support of his presumption.
The ld. NFAC as well as Ld. AO has grossly erred in law as well as on the facts of the case in charging the interest u/s 234A, B and C. The interest so charged is being totally contrary to the provision of law and on facts of the case and hence same may kindly be deleted in full.
That the appellant prays your honour indulgences to add, amend or alter of or any of the grounds of the appeal on or before the date of hearing.
The Brief facts of the case are that the appellant is a Partnership firm incorporated on 09/09/1970 but no work was being carried out from last 30 years therefore not filed any Income Tax Return from such years. The AO has issued a Notice U/s 148 on dated 25/03/2021 on the reasons that “the information has pushed through NMS that the assessee had sold immovable property (SFT-012) amounting to of Rs. 9,32,25,0736/- and payment received in respect of transfer of immovable property (TDS from 26QB section 194IA) amounting to Rs.2,33,00,000/- in the year under consideration, assessee has not filed his return of income, hence the amount of financial transaction are not verifiable. Hence the AO has reason to believe the income to the extent of Rs.11,65,50,736/- has escaped assessment”.
Copy of reasons recorded is placed on record. Although this notice has not been served upon the assessee thereafter the AO has issued the notice u/s 142(1) on dated 14/02/2022 again on 02/03/2022 and on 09/03/2022. In response thereto the assessee has filed the reply on 11/03/2022 with this reply (PB-12-16) the assessee has also attached the Return of Income filed on dated 10/03/2022 in response to the Notice u/s 148 (PB-17-19). In the reply the assesssee has clarified and submitted that assessee firm has sold out plot number E-11 Road No.11 VKI Area Jaipur on 06/06/2016 through two sale deeds totaling 4896 sq meter land which is being tabulated as follows :
Property Area Date of Sale Amount DLC Remarks under 489 Sales and questioned 6 Buyer Sq. Mtr. 2/3rd E-11, VKI 06/06/2016 1,55,00,000/- 1,63,27,978/- Area, Road Part Hari Mohan No.1, Jaipur Gupta HUF 1/3rd _____Do__ Prem Devi 78,00,000/- 81,63,975/- Part Gupta Total 2,33,00,000/- 2,44,91,953/- The AO has also obtained information u/s 133(6) from the sub registrar to verify the same. In the reply the assessee has also filed details of long term capital loss. The assessee in his reply dated 19/03/2022 has clarified and submitted the details of property sold and cost of acquisition and calculated the long term capital loss at -Rs.
71,37,545/- vide computation of total income PB-18 wherein the assessee has also claimed cost of construction of Rs.8,00,000/- on the basis of para 2 on page 3 of sale deed PB-58 and also site plan at PB-66 wherein it is specifically mentioned that plot including office building, iron gates, Boundary wall, water and electric connection was sold. The matter is very old around 30-40 years. The assessee has also requested that a certificate in this regard evidencing payment of Rs 8,00,000/- would be submitted in next reply. Assessee in support has also filed DLC rate of 2001-02 where the DLC rate is shown Rs. 660/- per square meter on the pretext that DLC rate since 1980-81 to 2001-02 were remained same of such area where this particular immovable property is situated.
Assessee submitted the Cost of acquisition as under: -
(i) SALES CONSIDERATION RECEIVED 23300000 (ii) Cost of acquisition 660 (1980-81) × 4000 After indexation – 2640000/100 × 1125 - 29700000 (iii) PAID TO RIICO F.Y. 2013-14 1377159/939*1125 -1649951 (iv) PAID TO RIICO F.Y. 2008-09 226382/582*1125 -437594 Net capital gain loss -8487545 Explanation of Rs.1649951/- out of total land of 4896 sq.mtr 896 sq. meter land was purchased on 26.4.2013 for Rs 1279800/-, Rs 21429/- for registry charges and 75930/- for service charge and economic rent totaling Rs 1377159/- indexed cost of the same as per computation is Rs. 1649951/-. Lease deed, RICCO letter, receipt of registry charges for Rs 21429/- and bank statement showing payment of Rs 1279800/- and 75930/- for the same has already been enclosed in earlier reply on Page 47-49 and 51-55. Now again enclosing Explanation of Rs. 437594/- Rs 226382/- paid to RICCO on 31.03.2009 on account of economic rent and Service charge which also form the part of cost of acquisition indexed cost of the same is Rs 437594/- receipt from RICCO evidencing payment of Rs 226382/- for the same has already been enclosed in earlier reply on Page 50. The assessee has taken DLC rate of Rs. 430 per sq.mtr instead of Rs. 630 per sq meter in the computation submitted vide earlier reply dated 11.03.2022. So even if cost of construction of Rs. 8,00,000/- is not considered then also cost of acquisition comes to Rs.31787545/- (29700000+ 1649951+437594) instead of Rs. 3,04,37,545/- which is higher. Hence no disallowance is to be made.
2.1 The AO to ascertain to full fact of the case a notice u/s 133(6) of the I. T.
Act had issued to the sub registrar for furnishing the registry details vide there office letter dated 09/03/2022. In response thereto sub registrar furnished two copies of sale deeds of the property amounting to Rs. 1,55,00,000/- (DLC value Rs. 1,63,27,978/-) dated 06/06/2016 and property amounting to Rs. 78,00,000/- (DLC value Rs. 81,63,975) dated 06/06/2016 on 28/03/2022. The Sub registrar has furnished the reply stating that two registries have been made at Rs.2,33,00,000/- (DLC rate Rs.2,44,91,953/-) by the said assessee on 06/06/2016 copy of said registry enclosed with the reply. However the AO partly accepted the reply of the assessee and stated that the Cost of Improvement specifically mentioned that Plot including office building, iron gates, Boundary Wall, Water and electronic connection is not allowable as assessee has failed to furnish documentary evidences of Cost of Improvement claimed for the year under consideration at Rs 8,00,000/-. Thereafter the AO calculated the long term capital gain as under:-
S.No. Details Amount 1. Sale consideration received as per value of 54 (Rs. 81,63,975+ Rs. 1,63,27,978/- =2,44,91,953) and Sales consideration received =2,33,00,000/- (Whichever is Higher) 2,44,91,953/- 2. Cost of Acquisition is calculated :- 4000*660=2640000*264/100=69,69,600/- 2. 1377159*264/220=16,52,591/-
3.226382*264/137=4,36,239/- Total Cost of Acquisition is (69,69,600+16,52,591+4,36,239/-= 90,58,430/-) 90,58,430/- Long Term Capital Gain Calculated 1,54,33,523/- Thus the AO made an addition of Rs. 1,54,33,523/- on a/c of Long term capital gain as against the Long Term Loss of -Rs. 71,37,545/- declared by the assessee. Against the addition made in the assessment order, the assessee preferred appeal before the Ld. CIT(A) who confirmed the action of AO.
Now the assessee is in appeal before us.
We have heard the contentions of both the parties and carefully perused the relevant material on record. Ground No. 1 to 3 are regarding the validity of reassessment order passed under section 147 read with section 144 of the IT Act.
The main contention of the assessee challenging the order passed under section 147 read with section 144 is that the notice under section 143(2) was not served upon the assessee. We find that the AO has issued number of notices, however, the assessee never responded to any of the notices issued by the AO under section 148/142(1) of the IT Act. Thereafter, show cause notice issued on 02.03.2022 fixing the case of reply/documents through e-proceedings and show cause notice issued dated 09.03.2022 fixing the case of reply/documents through e-proceedings on 11.03.2022. In response thereto assessee filed its partly reply through e-proceedings on 11.03.2022 which is placed on record. On perusal of the reply dated 11.03.2022 the AO observed that complete details of immovable properties sold at Rs. 11,65,50,736/- were not furnished by the assessee. A final show cause notice was issued on 17.03.2022 asking for the details of immovable properties sold. In response thereto, the assessee filed reply on 19.03.2022 which was placed on record and has been considered by the AO but not found fully acceptable. Accordingly after considering the submissions of the assessee and the material available on record, the AO assessed the total income of the assessee at Rs. 1,54,33,523/-.
3.1 At the appellate proceedings, the ld. CIT (A) issued following notices fixing the date of hearing :
S. No. Hearing notice dated Hearing date Remarks 1. Notice dated 25.11.2022 05.12.2022 No compliance 2. Notice dated 06.12.2022 12.12.2022 No compliance 3. Notice dated 13.12.2022 19.12.2022 No compliance 4. Notice dated 20.12.2022 26.12.2022 No compliance Since there was no compliance from the side of the assessee, the ld. CIT (A) has adjudicated the appeal on the basis of material available on record by observing in para 7 of his order as under :-
“ 7. During the appellate proceedings, the appellant has only submitted submission in the form of ‘Statement of Facts’. After that neither he has replied to hearing notices nor submitted any documentary evidences/information to prove his side. Sufficient and adequate opportunities were afforded to the appellant as indicated at able at page nol. 1 and 2. No reply whatsoever has been submitted by the appellant. It can be safely presumed that the appellant is not interested in pursuing his appeal. Therefore, the undersigned sees no reason to interfere with the orders of the Assessing Officer. Thus, the appeal raised by the appellant is dismissed.”
9 Shankar Engg. Works Foundry, Jaipur. Since the impugned order of the ld. CIT (A) does not touch the merits of the issue regarding the addition made by the AO in respect of capital gains calculated at Rs. 1,54,33,523/-, therefore, in the totality of facts and circumstances of the case, we set aside the order of the ld. CIT (A) and remand the matter back to the record of the ld. CIT (A) for fresh adjudication after providing a reasonable opportunity of being heard to the assessee. The assessee is granted one more opportunity to represent its case before the ld. CIT (A). In case the assessee fails to appear before the ld. CIT (A), the ld. CIT (A) may decide the appeal on the basis of the material available on record.
As we have remanded the matter to the file of the ld. CIT (A) for fresh adjudication after providing an opportunity to the assessee, ground nos. 4 to 9 have become infructuous and the same are dismissed as infructuous.
In the result, this appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 28/11/2023.
Sd/- Sd/- ¼lanhi xkslkbZ½ ¼ jkBkSM+ deys'k t;arHkkbZ ½ (RATHOD KAMLESH JAYANTBHAI) (SANDEEP GOSAIN) ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 28/11/2023. Das/ आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant- Shankar Engg. Works Foundry, Jaipur. 2. izR;FkhZ@ The Respondent- The ITO Ward 4(2), Jaipur.