TaxTMI 
TaxTMI 
2017 (10) TMI 1238
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....of the assets purchased during assessment year 2005-06. The assessee never purchased any assets during assessment year 2005-06. It was an old property. The Ld. CIT verified all the previous year record since 1991 i.e. from the date of purchase of property and house tax receipt and erred in giving the direction to make the addition of Rs. 1,30,476/- in the computation of capital gain without appreciating the information submitted by the assessee. The assessee declared all the fact and information and rightly claimed the long term capital gain. The Ld. CIT dropped the proceeding in the case of Mrs. Pinki Bedi (wife / joint owner) and whereas in the case of assessee the direction have been given to modify the assessment where the facts and property in both the cases is same. The Ld. CIT presumed that the stamp charges and Corporation tax of Rs. 68,000/- could have also been capitalized. As per clause 12, this cost ought to have been borne by the vendors. The Ld. CIT could not appreciate the fact and information provided by AO and wrongly invoked the provision of 263 of the I.T. Act and directed to AO to enhance / modify assessment order. The order of Ld. CIT is wrong....
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....vided by AO and wrongly invoked the provision of 263 of the I.T. Act and directed to AO to enhance / modify assessment order. The order of Ld. CIT is wrong and bad in law. Having regard to the fact applicable to the case. 5. First we deal with ITA No. 2871 & 2872/Del/2013 (AY 2006-07 & 2005-06) in the matter of Sunil Bedi & Pinki Bedi respectively, together being issues similar and identical. 6. The brief facts of the case are that assessee is an individual and is a Director in the company M/s JMD Ltd. A search and seizure operation was carried out at the premises of the assessee on 06.8.2008, thus notice u/s. 153A for AY 2006-07 was issued to the assessee on 26.11.2009. In response to the notice, the assessee filed his return of income declaring income of Rs. 48,22,113/- and assessment u/s. 153A(1)(b) was completed by the AO on 30.12.2010 at an income of Rs. 48,22,113/-. AO observed that assessee sold his half share in F-4, Nizamudin (W) on 21.4.2005, the cost of acquisition and improvement was taken as Rs. 4,30,000/- and Rs. 5,54,538/- making a total of Rs. 9,84,538/-. But no house of value Rs. 9,84,528/- existed in the balance sheet of AY 2005-06. Ld. CIT examined the assessm....
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.... of the assessee vide order dated 28.3.2013 passed u/s. 263 of the Act, by observing the following facts:- a) The assessee did not provide any evidence of value of the property and treatment given to such capitalization in the returns for all the assessment years in continuation but choose to file broken evidences. A sudden change about capitalization of house tax in one year does not appear to be probable. b) In order to arrive at figure of Rs. 1,30,476/- (being capitalization of House Tax) the assessee had to make number of manipulations by adopting an opening figure of Rs. 1672/- and adopt payment of 7th September, 2008 as a whole in both hands Sunil Bedi and Pinki Bedi without splitting half each. There is huge variation of house tax paid in different years and some of the years are missing where no house tax is paid. iii) If a person inadvertently capitalization of house tax paid, it is unbelievable that such an old record would be fetched to commit an unwarranted error. This is to be considered in the background that when this property was purchased on 2.6.1989 at that time besides the stamp charges of Rs. 25,800/- there was Corporation Tax of Rs. 43,000/- paid making....
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....IT. In support of his contention he filed a copy of the submissions of Revenue on provisions of Income Tax Act and position of law on the issue of Section 263. 10. We have carefully considered the rival submissions and perused the relevant records available with us, especially the impugned order passed by the Ld. CIT u/s. 263 of the Act alongwith Paper Book filed by the Assessee as well as the Written Submissions filed by the Revenue before us. After perusing the aforesaid order of the Ld. CIT, we are of the considered opinion that the order Ld. CIT is totally erred by invoking the section 263 of the Act on the basis that the assessee wrongly claimed long term capital gain. We further note that it was based on wrong assumption that there is short term gain out of the assets purchased during assessment year 2005-06. However, the assessee never purchased any assets during assessment year 2005-06 and it was an old property. We also find that Ld. CIT verified all the previous year record since 1991 i.e. from the date of purchase of property and house tax receipt and erred in giving the direction to make the addition of Rs. 1,30,476/- in the computation of capital gain without apprecia....
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.... decision, the Delhi High Court drew strength from the principles laid down by the Supreme Court in Rampyari Devi Sarogi vs. CIT 67 ITR 84 (SC) and Tara Devi Agarwal vs. CIT, 88 ITR 324 (SC). The underlying principle which emerges from these judgments is that if an assessment order is passed without making any enquiries, then such an order would be erroneous. But in the prsent case, the regular books of accounts, viz. the cash book, the ledger, the bank account statements, were produced by the assesee which were verified and examined vis-à-vis the findings of the search (cash found, jewellery found, immovable property found), the diary / loose sheets found and facts emerging out of the statements recorded under section 132(4) of the Act, and the financial statements filed by the with the return of income. We further find that the case laws cited by the Ld. DR are not applicable in the present case. 11. In the background of the aforesaid discussions, we hold that the impugned order passed by the Ld. CIT u/s. 263 of the I.T. Act is without jurisdiction and not sustainable in the eyes of law. Accordingly, the impugned order is hereby quashed and appeal of the assessee is allow....
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....t of land of Rs. 9,90,000/- as it is not appearing in the balance sheet for the assessment year 2004-05. Your kind attention is drawn to the fact that the assesse has shown cost price of this property which is an agricultural land in the balance sheet for the year ending 31.3.2004. This property is appearing under the head of "Advances which is appearing in the name of Survin Udyog Ltd., from whom this property was purchased. This property was purchased during the year 1996-97 and this amount is also appearing in the balance sheet of the assessee of that year. All these facts were there at the time of assessment with AO. We are furnishing herewith copy of assessment order for the assessment year 2004-05 wherein all these information were provided to the AO." 14.2 After considering the aforesaid reply, Ld. CIT observed that document of sale does not inspire confidence as it does not contain as on which date the possession is handed over and the document is executed on non-judicial paper. The document does not transfer any rights except the handling over of the vacant possession without assuring the transfer of tile on any future date. The document has not parted with any owners....
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....u/s. 263 of the Act dated 28.3.2013, assessee is in appeal before the Tribunal. 15. Ld. Counsel of the assessee has stated that Ld. CIT has erred by giving the direction of sale consideration received may be treated as per principle by applying the provision of section 68 of the I.T. Act. However, the assessee furnished the record from the date of purchase of property till the date to sale which has wrongly been shown under the head of Advance against property. He further stated that Ld. CIT has not appreciated agreement to sale and other record confirming the assessee has taken the possession of property. It was also the contention of the Ld. Counsel of the assessee that the Ld. CIT has not appreciated the fact that the assessee has sold and handed over complete lot of agricultural land against which payment were received by cheque and deposited the bank account of the assessee and he has not appreciated the fact that sale consideration received was in respect of agricultural land and capital gain arising from agricultural land is exempt u/s. 10 of the I.T. Act. He further stated that Ld. CIT could not appreciate the fact information provided by AO and wrongly invoked the provisi....
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....at Ld. CIT has not appreciated agreement to sale and other record confirming the assessee has taken the possession of property. It was not appreciated by the Ld. CIT that the assessee has sold and handed over complete lot of agricultural land against which payment were received by cheque and deposited the bank account of the assessee and he has not appreciated the fact that sale consideration received was in respect of agricultural land and capital gain arising from agricultural land is exempt u/s. 10 of the I.T. Act. We further find that Ld. CIT could not consider the fact information provided by AO and wrongly invoked the provision of 263 of the I.T. Act and directed to AO to enhance / modify assessment order. In our considered opinion, the order of Ld. CIT is wrong and bad in law, because AO has made the assessment judiciously after making all the enquiries / verification, which has been replied and on the basis of the said reply, the AO has made the assessment. Despite that the Ld. Commissioner of Income Tax has wrongly invoked Section 263 of the Act, because the AO made the assessment under section 153A(1)(b) of the I.T. Act, 1961 after investigating the records of the assesse....