TaxTMI 
TaxTMI 
2021 (5) TMI 953
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.... taxing the Long Term Capital Gain (LTCG) of Rs. 5,17,894/- as against Nil (-1119) and made the addition of Rs. 5,17,894/- on account of LTCG. Hence the addition so made or LTCG assessed by the ld. AO and confirmed by the ld. CIT(A) is being totally contrary to the provisions of law and facts on the record and hence the penalty may kindly be deleted in full. 2.2 The ld. CIT(A) has further grossly erred in law as well as on the facts of the case in confirming the action of the ld. AO in allowing the reduction of the 1/3rd share of the indexed cost of acquisition at Rs. 55,548/- only as against the actual of Rs. 4,71,245/- claimed by the assessee without any justifiable basis. Hence the cost of indexed so denied by the ld. AO and CIT(A) is being totally contrary to the provisions of law and facts on the record and hence the same may kindly be allowed. 2.3 The ld. CIT(A) has further grossly erred in law as well as on the facts of the case in confirming the action of the ld. AO in allowing the claim of legal expenses of Rs. 51,558/- only as against the actual claim of Rs. 1,54,674/- claimed by the assessee without any justifiable basis. Hence the claim so denied by th....
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....d consult the other counsel about the same. 3. That the other counsel or advocate has advised to her to file the appeal immediate with the prayer for condonation of delay being the reasonable ground and being a strong case in her favor. 4. That due to all this reason the appeal could not be filed within time. In support of these contention an affidavit of the assessee is enclosed. 5. It is submitted that the Hon'ble Supreme Court in the case of Collector, Land & Acquisition v. Mst. Katiji & Others (1987) 167 ITR 471 (SC) has advocated for a very liberal approach while considering a case for condonation of delay. The following observations of the Hon'ble Court are notable: "The legislature has conferred the power to condone delay by enacting section 5 of the Limitation Act 1963 in order to enable the Courts to do substantial justice to parties by disposing of matters on 'merits'. The expression sufficient cause' employed by the legislature is adequately elastic to enable the Courts to apply the law in a meaningful manner which subserves the ends of justice-that being the life-purpose of the existence of the institution of Court....
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....elatedly, it is settled principles of law that the Courts have to take liberal approach while interpreting the expression 'sufficient cause' for condonation of delay. In case of Collector, Land Acquisition Vs. Mst. Katiji (1987) 167 ITR 471, the Hon'ble Supreme Court has laid down the principle that the power to condone the delay provided under the statute is to enable the Courts to do substantial justice to the parties by disposing of the matter on merits, therefore, while considering the matters for condonation of delay, the law must be applied in a meaningful manner which subserves ends of justice and technical considerations should not come on the way of cause of substantial justice. There is no quarrel that the explanation and reasons explained for delay must be bonafide and not merely a device to cover an ulterior purpose such as laches on the part of the litigant or an attempt to save limitation in the underhand way. If the party who is seeking condonation of delay has not acted in malafide manner and reasons explained are factually correct then the Court should be liberal in construing the sufficient cause and lean in favour of such party. A justice-oriented approach has to....
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.... her later 12279 dated 26.10.2016 for shop No. 881, Chokari Purani Basti, Chandpole Bazaar, wherein the purchase consideration was cost Rs. 48,999/- + stamp Duty Rs. 4,714/- totalling to Rs. 53,717/- for 46.88 Sq. meter (@ Rs. 1145/- PSM). The AO considered Rs. 1370.68 Sq. meter (Rs. 53,717/-) for 39.19 Sq. meter (Despite the fact that he mentioned 46.88 Sq. meter at Pg-3) and thus worked out total COA Rs. 28,633/- only, in the hands of all the three joint owners and accordingly, worked out the assessee's 1/3rd share at Rs. 9,544/- (Indexed cost Rs. 55,548/) as against Rs. 80,970/- (after indexed cost Rs. 4,71,245/-) claimed by the assessee. Resultantly, he made addition of Rs. 4,15,697/- i.e more than 8.5 times. With regard to the legal expenses, the assessee stated that it has incurred expenses of Rs. 1,54,274/- as the shop was under litigation with the tenant before Civil Judge lower range west Jaipur as mentioned in sale deed. In support of the same, the assessee submitted litigation papers of the same before the AO. However, the AO concluded that the assessee failed to file documentary evidence in support of the legal expenses incurred. The AO however, looking to fact that the....
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....at Shop No. 150, Chandpole Bazar, Jaipur to Smt. Meena Sharma during the F.Y. 2008-09 for sale consideration of Rs. 18,75,000/-, however of the Sub-Registrar had adopted final face value of such property at Rs. 16,37,653/- for the purpose of charging of stamp duty. But on verification of the department portal it is noticed that the assessee has not shown capital gain. I have reason to believe that the income to the extent of Rs. 18,75,000/- has escaped assessment with in meaning u/s 147/- of the IT act." Copy of reasons recorded is enclosed. On the perusal of the above reasons it has to submit that the reasons itself incorrect, invalid without considering the material on record. Hence liable to be quashed. Due to following reasons. (i) The ld. AO has stated that the assessee has not filed the return and not disclosed sale consideration for the relevant assessment year is absolutely wrong. Because the assessee was regularly Income Tax Assessee and filing her return of income for this year also. For the year under consideration she has filed her return of income on 08.05.2009 declaring the total income of Rs. 1,78,250/- in which she has also shown loss from....
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....g Officer may be correct in pointing out that when the sale consideration as per the sale deed is Rs. 50 lakhs but the registering authority has valued the property on the date of sale at Rs. 1,18,95,000/- for stamp duty calculation, section 50C of the Act would apply, of course, subject to the riders contained therein. However, this is not the cited reason for reopening the assessment. The reasons cited are that the assessee filed no return and that 1/3rd share of the assessee from the actual sale consideration of Rs. 1,18,95,000/- therefore, was not brought to tax. These reasons are interconnected and interwoven. In fact, even if these reasons are seen as separate and severable grounds, both being factually incorrect, Revenue simply cannot hope to salvage the impugned notice. Through the affidavit-in-reply a faint attempt has been made to entirely shift the center of the reasons to a completely new theory viz. the possible applicability of section 50C of the Act. The reasons recorded nowhere mentioned this possibility. Reasons recorded, in fact, ignored the fact that the sale consideration as per the sale deed was Rs. 50 lakhs and that the assessee had by filing the return offere....
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..... vs. DCIT 366 ITR 418 (Raj) held that Evasion of tax was menace to society but Assessee contributing to the exchequer in form of tax could not be allowed to suffer on mere pretence that it had evaded payment of tax. Rowing and fishing enquiry in hands of AO on mere suspicion or change of opinion could not satisfy expression "reason to believe" exposing Assessee for reopening of assessment. Notice for reopening of assessment was not in consonance and in conformity with under Section 147 and made specified notice vulnerable. High Court pointed that, reasons given by AO for issuance of notice for Re-assessment were not plausible and convincing. In fact order, where objections were rejected by AO, was not self-contained speaking order. Upon perusal of the order, it was amply clear that the same contains conclusions and is bereft of reasons.(para 12) 5. No notice u/s 148 can be given or reopen for verification the doubtful transaction: Further it is also settled legal position that no notice u/s 148 can be given for reopen the case for verification the transaction because that indicates reason to suspect not reason to believe. And in the present case on the perusal of the reas....
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....only on the basis of not disclosure of sale consideration on account of sale of shop while admittedly the same has been shown thereafter the ld. AO for the purpose of making the assessment he has estimated the disallowance of legal which has been duly declared in the original return and made the different addition. The AO neither made any inquiry or collected any material that the assessee has concealed any income before issuance of notice nor saw his record. He has proceed only on imagination or suspicion rather than to reason to believe. He has only information borrowed and no notice u/s 147 can be issued on the borrowed information till the he was of the opinion of reason to believe. 8. Further we are also relying upon the decision of Honble Gujrat High Court in the case of Shanta Devi Gaekwad (Dead) Through LRS v/s DCIT 250 CTR 0421(Guj.). Where it has been held Computation of capital gain-Cost of Acquisition-Fair market value-Reverse Indexing Method-Assessee is the mother of erstwhile ruler of Baroda-During year under consideration, assessee had sold certain jewellery/valuable articles made of gold diamonds and pearls for consideration of Rs. 9,05,09,176, whi....
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.... differs drastically due to its surroundings, distance from road, disputes, possession etc.-AO given finding that multistoried projects had been developed near Assessee's land and buyer of Assessee's land was developing some project on land-No such development of comparable land had been brought on record by AO-CIT(A) had agreed that instance quoted by AO was not comparable-Where no comparable case was available, best way to estimate cost would be to compute Fair Market Value on basis of reverse calculation considering cost inflation index-Estimation could not be accepted-Appeal allowed. Also refer Prembhai Kanjibhai Tandel v/s ITO 47 CCH 724(Ahd)(2016). The ratio is also applicable in the present case as the assessee also filed the rate list and department has also taken incomparable case. Hence the value shown by the assessee should be taken and reverse indexation should also be accepted. Therefore under these facts, circumstances legal position the additions so made may kindly be deleted in full and oblige." 10. On the other hand, the ld DR has vehemently supported the orders of the revenue authorities. 11. We have heard the ld. Counsels ....
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....and suspicion and without any material on record. Therefore, we are of the view that the very basis of reopening of assessment is based on incomplete or wrong facts available on record as the said transaction of sale of the property has already been duly disclosed by the assessee in her return of income and the assessee had also filed her return of income. All these facts reflect non-application of mind by the A.O. while recording the reasons and it cannot be held that there is the nexus between the material available on record and formation of belief that the income has escaped assessment. Similar view has been taken by the Coordinate Bench of this Tribunal in the case of Shri Narain Dutt Sharma Vs ITO in ITA No. 203/JP/2017 order dated 07/02/2018 wherein it was held as under: "13. We have heard the rival contentions and purused the material available on record. Firstly, it is noted that in the instant case, the notice under section 148 in exercise of powers under section 147 has been issued on 23.03.2014 after the expiry of period of four years from the end of the impunged assessment year i.e, AY 2007-08. In terms of proviso to section 147 of the Act, an action under the....
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....s held as under: "11. In this context, we have noted that the reasons proceeded on two fundamental grounds. One, that the property in question was sold for a sum of Rs. 1,18,95,000/- and two; that the assessee had not filed the return and that therefore his 1/3rd share out of the sale proceeds was not offered to tax. Both these factual grounds are totally incorrect as is now virtually admitted by the Revenue. It is undisputed that the assessee had actually filed the return of income for the said assessment year and income also offered his share of the declared sale consideration to tax as capital gain. The Assessing Officer may have dispute with respect to computation of such capital gain, he cannot simply dispute the fact that the assessee did file the return. Importantly, even the second factual assertion of the Assessing Officer in the reasons recorded is totally incorrect. He has referred to said sum of Rs. 1,18,95,000/- as a sale price of the property. The assessee had produced before the Assessing Officer, the sale deed in which, the sale consideration disclosed was Rs. 50 lakhs. 12. The Assessing Officer may be correct in pointing out that when the sale con....