TaxTMI 
TaxTMI 
2016 (10) TMI 971
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....he assessee. He retired from the firm w.e.f. 30.4.2013, but he was not attending office in the month of April, as he has to start his independent practice. Due to retirement of Shri Sapnesh Sheth communication between the assessee and tax consultant firm had not taken place, and the assessee was not aware about outcome of appellate proceedings before the ld.CIT(A). Shri S.B. Vaidya has admitted as a partner in the firm, and thereafter, it came to the notice that no appeal was filed in this case. He advised the assessee to file appeal, and accordingly present appeal was filed. In this way, the assessee has prayed that delay in filing the appeal be condoned. 3. The ld.DR, on the other hand, contended that except affidavit by the assessee, there is no other supporting evidence in support of the alleged pleading. The assessee should be vigilant in prosecuting its income tax proceedings. He should be aware that the ld.CIT(A) decided the appeal and it has decided against the assessee, and the assessee should have filed the appeal well in time. 4. We have duly considered rival contentions and gone through the record carefully. Sub-section 5 of section 253 of the Income Tax Act provides ....
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....123. It reads as under: "Rule of limitation are not meant to destroy the right of parties. They are meant to see that parties do not resort to dilatory tactics, but seek their remedy promptly. The object of providing a legal remedy is to repair the damage caused by reason of legal injury. Law of limitation fixes a life-span for such legal remedy for the redress of the legal injury so suffered. Time is precious and the wasted time would never revisit. During efflux of time newer causes would sprout up necessitating newer persons to seek legal remedy by approaching the courts. So a life span must be fixed for each remedy. Unending period for launching the remedy may lead to unending uncertainty and consequential anarchy. Law of limitation is thus founded on public policy. It is enshrined in the maxim Interest reipublicae up sit finis litium (it is for the general welfare that a period be putt to litigation). Rules of limitation are not meant to destroy the right of the parties. They are meant to see that parties do not resort to dilatory tactics but seek their remedy promptly. The idea is that every legal remedy must be kept alive for a legislatively fixed period of time. A court....
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....xecuted on 15.3.2004. The land at block no.42 was purchased for Rs. 1,45,725/-. The assessee has shown value of this land in the balance sheet of his HUF at Rs. 2,08,805/- which included stamp duty, registration charges and other expenses. Similarly, land at Block No.559/B was purchased for a consideration of Rs. 4,78,035/- which has been shown in the balance sheet of the HUF at Rs. 6,697,010/- which included registration charges and stamp duty and other expenses. These pieces of land were purchased from one Smt.Hetalben. It appears that DDIT(Investment) had received a tax evasion petition and he conducted an inquiry. Statement of the assessee was recorded under section 131 by DDIT (Investigation) on 2.11.2007. During this statement, the assessee has admitted an investment of Rs. 50 lakhs over and above amounts stated in the sale deed. The assessee agreed that he has paid on-money of Rs. 38 lakhs on the land at block no.559/B and also paid a brokerage of Rs. 3 lakhs. The assessee also admitted that the land was sold in the year ending 31.3.2006 and received on-money of Rs. 55,50,000/-. All this amount, in addition to apparent consideration of Rs. 12,75,000/- stated in the sale deed....
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..... Karsanbhai D. Kakadia had made unaccounted investment of Rs. 38 lakhs in cash for the purchase of land (on 15-04-2004) at Survey No.51, Block 559B admeasuring 31,869 sq.mtr. and Survey No.51, Block 42, admeasuring 9915 sq.m. Block 559B admeasuring 31,869 sq.mtr . The assessee has admitted that he had paid Rs. 38,00,000/- in cash to the seller Mrs. Hetalben R Desai/The assessment for A.Y.2004-05 is being reopened separately on this issue. The assessee has later sold these lands : (a) at Survey No.51, Block 559/B admeasuring 31,869 sq. m. to S/Shri.Dhirubhai Arjanbhai Patel, Chandubhai Parbatbhai Dabaria and Shaileshbhai Parbatbhai Dabaria. The transaction led to payment and receipt of a cash at Rs. 55.5 lakhs which has been admitted by both the seller and the purchasers. The assessments of three purchasers is being reopened u/s 147 separately. Thus the assessee sold the land @ Rs. 214 per sq mtr. [Rs.12,75,000 + 55.5 lakh/31,869= 68,25,000/31869] (b) land at Survey No.51, Block 42; 9915 sq.mtr. to Shri. Narayanbhai Parshottambhai Mayani on 27-06-2005 for a documented price of Rs. 2,00,000/- @ Rs. 20 per sq mtr which is less than the jantry value. The addition as per section 50....
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....e : 12.10.2010 Dy. Commissioner of Income-Tax Circle-9, Surat" "REASONS FOR REOPENING THE CASE OF Shri.Karsanbhai O. Kakadia (PAN:- AMXPK2145H ) for A.Y.2004-05 The ADIT(Inv.) Unit-II Surat has forwarded his report on the enquiry of TEP conducted in the case of Hetalben R. Desai and Others vide letter dated 31- 8-2010. The TEP was regarding an allegation that two pieces of land (at Survey No.51, Block 559B admeasuring 31,869 sq.mtr. and Survey No.51, Block 42, admeasuring 9915 sq.m.) together worth Rs. 7 crores sold was sold at very low * prices by one Mrs. Hetalben R Desai to some individuals .The report states that the sale of the said land by Hetalben and subsequent holders resulted in transfer of unaccounted money which was accepted under oath before the ADIT. The amount of disclosures of unaccounted money grossing upto Rs. 1.61 crores was made as below:- Sr. Names PAN Unaccounted income admitted (lakh Rs.) A.Y. 1 Hetalben R. Desai Applied for 35.00 04-05 2 Shri Karsanbhai kakadia AMXPK2145H 50.00 04-05 3 Shri Karsanbhai Kakadia (Capital Gain Tax) - -do- 9.5 06-07 4 (Commission) AIUPG7353E , 11.00 04-05 06-07 5 Sfiri Shaiieshbhai Parbhatbha....
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....ssessee has filed revised computation in HUF and also paid taxes of Rs. 4.70 lakhs in four instalments. This tax was paid in HUF. All these things have been happened prior to recording of reasons for reopening of the assessment. The ld.counsel for the assessee took us through copies of reasons available on page no.41 to 45 of the paper book. He contended that in the Asstt.Year 2006-07, the ld.AO has worked out unaccounted monies upto Rs. 1.61 crore. This is totally an erroneous conclusion. Unexplained investment did not cross Rs. 55 lakhs. Since four transactions have been made with regard to the purchase and sales, the ld.AO has multiplied it with each transaction. The unaccounted income otherwise would not go beyond Rs. 54 lakhs. The AO, thereafter, made reference to the suggestion of the ADIT that exact value of two pieces of land is not determinable, and therefore, it should be referred to the DVO for determination of quantum of unaccounted investment. The AO reopened the assessment without making any reference to the DVO and without pointing out how much is the unexplained investment. During the course of assessment proceedings, the ld.DVO has submitted report, and according t....
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....statement recorded under section 131 of the Act. Therefore, according to the ld.counsel for the assessee, the AO was not justified in making the addition, if no addition has been made on the basis of his reasons. In support of his conclusions, he relied upon the decision of the Bombay High Court I the case of CIT Vs. Jet Airways (I) Ltd., 331 ITR 236 (Bom) and CIT Vs. Mohmed Juned Dadani, 214 taxmann 0038 (Guj). On the strength of these decisions, it was contended that expression "and also" has been employed in section 147 which requires that if during the course of re- assessment proceedings, any other information came to the possession of the AO exhibiting escapement of income, then that other income could also be assessed. According to these decisions, this expression "and also" would authorize the AO, if he has made addition of the income for which assessment was reopened. If he has not made any addition on the reasons for which the assessment was reopened, then, he cannot make addition of the income which came to his notice during the re-assessment proceedings. In this way, the ld.counsel for the assessee contended that re-assessment is not sustainable, and the reassessm....
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.... ... Meaning of the above would be that there should be reason to believe that any income chargeable to tax has escaped assessment. Now, the question is how the reasons to be formulated. What will help the AO to believe about the escapement of income from taxation. This belief cannot be made in air. There should be some deductive or inductive material for persuading the AO to form the opinion that, income has escaped assessment. Such material should have a direct nexus between escapement of income and formation of belief. In other words, on an analysis of any material, if a prudent man or trained income-tax officials could believe about existence of fact that income has escaped, then, he would be authorized to issue notice under section 148 of the Income Tax Act. Let us make an analysis of the reason recorded by the AO and extracted supra. As far as first page of the reason are concerned, it is verbatim same in both the years. It contained details of land, and how such land was purchased by the assessee in the Asstt.Year 2004-05 and sold in the Asstt.Year 2006-07. The only line in the whole details is that ADIT was of the view that value of the land of two pieces was not less than ....