TaxTMI 
TaxTMI 
2020 (5) TMI 652
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..... CIT(A) sustaining the action of Ld. A.O. in making of addition of Rs. 8,76, 186/- to the total income on account of Capital Gain arising out of the agriculture land. 3. That in the facts and circumstances of the case and in law the ld CIT(A) erred in not accepting the tehsildar certificate due to mismatch in sign on first page and second page, which is the matter of government authorities and beyond the control of assessee. 4 That in the facts and circumstances of the case and in law the Ld. CIT(A) erred in sustaining the action of Ld. AO in making capital gain because the said asset is not a capital asset, it is beyond the municipality limit of Samalkha. 5. That in the facts and circumstances of the case and in law the Ld. AO and further Ld. CIT(A) has erred in assessed the case in the capacity of Individual. But although this property is an ancestral property and should be assessed as HUF property." 3. The brief facts of the case show that the assessee is an individual deriving income from agriculture. The case of the assessee is reopened for the reason that there is an escapement of Rs. 1640500/- being cash deposit in the bank account. Therefore, notice u/s 148 was issu....
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..... The assessee submitted that it was a joint family property, which was sold, and new property of agricultural land was purchased. The assessee also submitted that the capital gain earned is Nil. The assessee also submitted circle rate for FY 1995-96 should be adopted for the purpose of the computation of capital gain, if any. The ld AO disturbed the computation of the capital gain. He held that land admeasuring 21865 sq yards was sold by the assessee along with his brothers for Rs. 4888500/-. He also worked out the cost of acquisition holding that the assessee purchased 10890 sq yards for Rs. 40,000/- on 08.07.1980. He adopted the fair market value as on 01.04.1981 and indexed the same determining at Rs. 507571/-. Accordingly, he determined the total capital gain of Rs. 4380929/- and assessed 1/5th share of assessee at Rs. 876186/-. The assessee claimed exemption under section 54B of the income tax act as assessee has purchased agricultural land for Rs. 4559910 having 1/5 share. Such deduction was claimed at ı 1139978/- and capital gain was computed Nil. The learned assessing officer held that assessee has purchased along with his brother agricultural land of 8 acres 5 canals....
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....ing additional grounds of appeal:- "On the facts and circumstances of the case the jurisdiction of the AO under section 147 is bad in law, as there is no independent application of mind to the material for reopening of the matter and clearly a case of borrowed satisfaction, which is bad in law. On the facts and under the circumstances of the case the assumption of jurisdiction is bad in law as there is no live link between the reasons recorded and belief entertained escapement of income, as is evident that finally the AO has assessed other income which does not form part of the reasons recorded. On the facts and circumstances of the case, the jurisdiction assumed by the AO under section 147 is bad in law as the sanction which has been granted under section 151 is mechanical without seeing the relevant provisions of the act." 8. The assessee submitted that the above grounds are legal and goes to the root of the matter and all the facts necessary for the adjudication of the above grounds are on record. The assessee also submitted that assessee can raise a legal additional ground or fresh legal plea at any stage of the proceedings relying upon the decision of the honourable Sup....
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....t assessee has deposited cash in his savings bank account. He submitted that there is no addition made by the learned assessing officer on that account. The learned assessing officer has made the addition based on the long-term capital gain earned by the assessee, which is not one of the reasons for which the reopening of the assessment has been initiated. He submitted that as per the provisions of section 147, the AO has no power to make any addition, leaving aside the main issue based on which belief has been entertained that income has escaped assessment. He relied upon the decision of Jet Airways 331 ITR 236 and Ranbaxy laboratory reported in 336 ITR 136 of the honourable Delhi High Court. b. He referred to the observation of the learned assessing officer that the assessee has not filed any return of income for impugned year. He submitted that it is not automatic under the provisions of section 147 to assume jurisdiction in each and every case where return of income has not been filed. He referred to the decision of the honourable Bombay High Court in case of GENERAL ELECTORAL TRUST vs. INCOME TAX OFFICER & ORS.[ 289 CTR 284]. c. He further referred to the sanction given by....
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....that lower authorities have conveniently ignored the fact. He submitted that certificate is signed by Tehsildar under his seal and signature on the application of the assessee. He submitted that n the first page signature is of assessee as it is his application and second page is signature of Tehsildar which is his certificate. He also submitted that there are seal of his office etc. In view of this he submitted that what has been sold by the assessee is not at all a capital asset under section 2 (14) of the income tax act. 12. In view of above facts, it was submitted that a. the reopening of the assessment is bad in law, as it is a borrowed satisfaction b. the sanction granted by the approving authority of the reopening of the assessment is bad in law c. the assessment passed on the individual assessee instead of Hindu undivided family of the assessee is bad in law, d. Over above the assessing officer has not made any addition for which the reopening of the assessment has taken place but addition has been made on altogether a different income and therefore because of the jurisdictional High Court's decision the assessment order is bad in law. 13. The learned departmental....
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..... The assessee was served a notice under section 148 of the income tax act to explain the source of cash deposited in his savings bank account with state bank of Patiala of Rs. 16 lakhs. The learned assessing officer considered the explanation of the assessee that cash was generated out of sale of agricultural land by the assessee as well as his four brothers jointly. So he did not make any addition on cash deposit as sources were explained. He proceeded to examine the chargeability of capital gain on assets sold through which cash is generated and deposited in the bank account. satisfied with the explanation of e assessee, he did not make any addition on that account. During the course of assessment proceedings the learned assessing officer noted that assessee has sold property jointly owned by the assessee along with his four brothers to Shri Sureshkumar and by one document and Sri Jagpal by three documents for ı 4888500/- admeasuring 21865 yd². The AO questioned about the taxability of the long-term capital gain on the same. The assessee explained that long-term capital gain on sale of the above agricultural land is nil as assessee has also purchased agricultural land ....
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....pose of Section 151(1) of the Act, what the Court should be satisfied about is that the Additional CIT has recorded his satisfaction "on the reasons recorded by the Assessing Officer that it is a fit case for the issue of such notice". In the present case, the Court is satisfied that by recording in his own writing the words: "Yes, I am satisfied", the mandate of Section 151(1) of the Act as far as the approval of the Additional CIT was concerned, stood fulfilled." In the present case, the PCIT recorded, on reassessment proposal on the file of each assessee, that inter alia, the "lifting of veil" over the tripartite "arrangement" between AICC (i.e. INC), AJL and YI to tax the assessee under Section 56(2)(vii) (c)(ii) of the Act, the sum of Rs. 48,93, 64,896/-. The PCIT, after stating this also recorded that "I am satisfied that the AO i.e. ACIT...has sufficient information in her possession which leads to reasons to believe that the assessee would have income which had escaped assessment which exceeds Rs. 1 lakh". In view of the ruling in Meenakshi Overseas (supra), therefore, the satisfaction recorded by the PCIT was adequate and in accordance with legal requirements." In view ....
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....BORATORIES LTD. Vs. COMMISSIONER OF INCOME TAX 2011) 79 CCH 0445 Del HC (2011) 57 DTR 0281, (2011) 242 CTR 0117 (2011) 336 ITR 0136, (2011) 200 TAXMAN 242 has held that :- "10. The ratio of both the aforecited cases was that upon the issuance of notice under s. 148(2), when proceedings were initiated by the AO on issues in respect of which he had formed a reason to believe that income had escaped assessment, it was not open to the AO to carry out an assessment or reassessment in respect of other issues which were totally unconnected with the proceedings that were already initiated. To put it differently, once the AO has reason to believe that income chargeable to tax has escaped assessment and proceeds to issue a notice under s. 148, it is not open to him to assess or reassess the income under an independent or unconnected issue, which was not the basis of the notice for reopening the assessment." (Underline supplied by us) In the impugned case before us, cash deposit and consequent assessment of sale of agricultural land through which cash has been generated by the assessee is not an independent and unconnected issue. Therefore, respectfully following the ratio laid down by th....
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.... because same is not measured up to last meter. Therefore for this reason rejection of the above certificate is devoid of any merit. 20. The second reason why the certificate is rejected is that the signature on the first page and on the second page are not similar as held by the learned CIT Appeal. We have carefully considered this aspect and find that on the first page the assessee has made an application in Hindi language to the tehsildar wherein the proper stamp duty is a fixed for making an application and obtaining a particular information. On that letter, tehsildar has stamped and noted that he has received the application of the assessee on 29-12 - 2017. He has put an initial with a direction to the Patwari to take necessary action. Therefore, on the first page there was no signature of Tehsildar, naturally but only intials. On the second page, Tehsildar has signed and certified approximate distance of the impugned land from the municipal limit of Samalkha. On the second page of the certificate, there is a stamp of 'Tashdique Shuda" which means "issued". Therefore, doubting the veracity of the certificate was not proper by the learned CIT Appeal. In fact, if he has any dou....