AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (3) TMI 595
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....erments. We thus, treat the former assessee Sh. Mohit Gupta's appeal ITA No. 3385/Del/2023 as the "lead" case. 4. It is next noticed that the learned PCIT(Central), KNP at Meerut has passed his impugned order assuming his revisional jurisdiction u/s 263 of the Act thereby terming the Assessing Officer's corresponding section 143(3) r.w.s. 153A assessment framed on 30.12.2019; as an erroneous one causing prejudice to the interest of the Revenue. 5. Both the learned representatives are very much ad-idem during the course of hearing that this is the second round of revision proceedings u/s 263 of the Act since the tribunal's earlier order in earlier identical twin appeals ITA Nos. 709 & 710/Del/2022 dated 01.11.2022, had restored back the matter to the learned PCIT for his afresh appropriate adjudication as under: "2. For the sake of reference, we are referring to the case of Ashish Gupta in ITA No.710/Del/2022. The grounds of appeal read as under:- "1. Under the facts and circumstances of the case, order passed by the Ld. PCIT u/s 263 is illegal & bad in law. He has further erred in exceeding his jurisdiction in passing the order u/s 263 ignoring that an order....
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....acquire the said bagh, no other business is carried out by these firms till date. The total share of different members of Gupta Family in land deal of Sir Shadi Lal Garden is 38 % of total land area of 40.201 Hect. b) M/s Gupta Sons was created on 15.10.2015 and M/s Agarwal Sons was created on 11.02.2015. c) Total stamp duty value of the land purchased by the firm Gupta Sons is Rs.3,96,95,560/-. Shri Ashish Gupta has 5% share in the said firm, M/s Gupta Sons. Thus, the deemed contribution of Shri Ashish Gupta is Rs.19,84,778/-. Since, it was found that the firms were created for the purpose of only registering the land as no business activities have been carried out, the amount that was received by seller of land may be treated as received by the partner of the firm i.e. the transaction was carried out not between the firm and the individuals but between the two individuals only. Hence, the section 56(2)(vii)(b) is applicable in the case of individual. Total sales consideration is Rs.19,00,000/- and stamp duty value is Rs.3,96,95,560/-. Difference between stamp duty value and sale consideration is Rs.3,77,95,560/-. The 5% of this value of Rs.3,77,99,560/- come to ....
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....venue within the meaning of section 263 read with Clause (a) of Explanation 2 thereunder. I, therefore, under the powers conferred u/s 263 of the Income Tax Act, 1961, hereby set aside the order passed by Assessing Officer u/s 153A/143(3) for A.Y. 2016-17 with direction to pass fresh order after conducting proper enquiries, and considering discussion in paras above, after providing opportunity to the assessee also." 5. Against the above order, assessee has filed appeal before us. We have heard both the parties and perused the records. 6. Ld. Counsel of the assessee stated that due enquiry has been made by the AO and assessee has duly given explanation. That upon acceptance of assessee's explanation, no addition in this regard has been made. Ld. Counsel further placed reliance on the following case laws :- i. ITAT, Mumbai Bench in case of Sir Dorabji Tata Trust vs. DCIT (E) (2021) 188 ITD 38; ii. ITAT, Delhi Bench in case of Brahma Center Development (P) Ltd. vs. PCIT (2020) 185 DTR 353/77 ITR (Trib.) 156; iii. ITAT, Delhi Bench in case of ETT Ltd. vs. CIT (2019) 177 DTR 313; iv. ITAT, Delhi Bench in case of Amira Pure Foods Pvt.....
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....missioner of Income Tax to pass orders under Section 263 of the Act. He is supposed to examine the records produced before him to arrive at a conclusion whether the assessment order passed by the AO suffers from infirmities and needs to be revised under Section 263 of the Act. The parameters which are laid down in Section 263 of the Act need to be fulfilled in exercising such a discretion. It is the Commissioner who has to satisfy himself, on the basis of available records, that in a given case the conditions stipulated under Section 263 of the Act are satisfied. In arriving at this conclusion, he is not to be controlled even by a higher authority. Likewise, the higher authority is not to interfere with the independence of his unfettered discretion which is statutorily conferred upon the Commissioner." 6.14 Thus, even the authority above PCIT and CIT cannot deprive the powers of the revision and thus there is no reason that lower authority exercising powers granted to it can prevent the PCIT or the CIT to exercise revisionary powers. Therefore, it is apparent that none of the lower authorities or even a superior authority cannot put spokes in exercising the power of the Pr....
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....y also provide for obtaining the prior approval of the Joint Commissioner for merely passing an order. Therefore, the decision of the Hon'ble Supreme Court clearly lays down that 'any order passed by the Assessing Officer' can be revised under Section 263 of the Act irrespective of the fact that any authority has granted any direction to the Assessing Officer. 6.17 Therefore, natural corollary would be show that all orders of search and seizure passed under Section 153A or under Section 153C of the Act are required to be passed after prior approval of the Joint Commissioner except as provided under Section 154BA(12). Therefore, if the argument of the Ld. AR is to be accepted then in such cases where the assessment has been framed under Section 153A or Section 153C, the same will go out of the ambit of the provisions of Section 263 of the Act and such a view is directly contrary to the decision of the Hon'ble Supreme Court in T.N.Civil Corporation Vs. CIT 260 ITR 82, Hon'ble Punjab & Haryana High Court Osho Forging Ltd. Vs. CIT (supra) and Hon'ble Delhi High Court in NIIT Ltd. Vs. Union of India (supra). 6.18 The power of the Commissioner under Section 263 of the A....
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....th or without direction unless prohibited by law. In the present case, we find that the above said ratio is fully applicable and the order passed by the ld. Pr.CIT is contradictory in itself. Hence, we remit the issue back to the file of ld. Pr.CIT to consider the issue afresh after giving an appropriate opportunity of being heard to the assessee and in the light of our observation hereinabove. 11. In the result, this appeal filed by the assessee is partly allowed for statistical purposes. 12. Our above order applies mutatis mutandis to both the appeals. 13. In the result, both the appeals are partly allowed for statistical purposes." 6. Suffice to say, learned PCIT herein has once again passed his instant twin consequential revision orders reiterating his very stand that the Assessing Officer had not completed the foregoing search assessment(s) after due verification of all the relevant facts as under: "4. In pursuance of the order dated 01.11.2022 passed by the Hon'ble I.T.A.T., Bench-A, New Delhi, afresh show-cause notice u/s 263 of the Income Tax Act, 1961 was issued to the assessee through ITBA under DIN & Notice No. ITBA/COM/F/17/2023-24....
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....statement on oath said that the agreement for sale was made during the lifetime of her husband. The Payment against the purchase of land was made before the registration. In view of the statement of Smt. Suman Gupta and also indicated in a clear-cut manner by the seized documents (Pg 9 of LP-1 as pertaining to Smt. Suman Gupta). Therein, inter-alia, it has been shown that cash amount of Rs. 1.25 Crore was given to the seller i.e., Shri Vivek Vishwanathan & Smt. Sudha Singhania in F.Y. 2012-13. When queried for transfer of said land at such a low process, Shri Rajat Lal clearly stated that clear title deeds for said lands were not in their possession. In the Trial Balance of RCSC as on 31.03.201land in other seized documents too, credit balance as payable to these sellers has been shown. The name of Shri Vivek Vishwanathan & Smt. Sudha Singhania therein shown as sundry creditors. (iv) As per incriminating documents found during the search proceedings at the residence of the assessee, a ledger marked as RCSC pertaining to F.Y. 2014-15 to 2015-16 was found and seized. In the seized book a ledger account in the name of land Sir Shadi Lal Garden (land account) was found and sei....
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....consideration is Rs.31,00,000/- and stamp duty value is Rs.7,08,88,560/-. Difference between stamp duty value and sale consideration is Rs. 6,77,88,560/- The 60% of this value Rs. 6,77,88,560/- comes to Rs. 4,06,73,136/- This amount of Rs. 4,06,73,136/- is deemed income of the assessee as per provision of section 56(2)(vii)(b) of the Act, 1961, and it should be taxed as income from other sources. The total stamp duty value of the land purchased in the firm Agarwal sons is Rs. 28,03,94,000/- and total sale consideration is Rs. 1,00,00,000/-. Difference between stamp duty value and sale consideration is Rs. 27,03,94,000/- Shri Mohit Gupta has 12.5% share contribution in M/s Agarwal Sons. Then The 12.5% of this value of Rs. 27,03,94,000/- comes to Rs. 3,37,99,250/-. The total income of Rs. 7,44,72,380/-(40673136+33799250) is deemed income of the assessee as per provisions of section 56(2)(vii)(b) of the Income Tax Act, 1961 which have been escaped to assessment. (vii) As per sec. 56(2)(vii)(b) of the Act, the value of land shall be taken as per stamp duty value and tax is also payable on that income. Since, it was found that the firm was created for the purpose of only regist....
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....1.10.2023 on the request of the assessee. 6. On 12.10.2023, Shri Rahul Gupta, Advocate and Authorized Representative of the assessee attending the proceedings on behalf of the assessee and explained the issues involved. The AR of the assessee also filed a detailed reply dated 11.10.2023 of the assessee, Shri Ashish Gupta. The submissions made by AR were examined and the relevant issues argued extensively in the light of the observation made by the Hon'ble ITAT vide their order dated 19.12.2022. In support of his contentions, the assessee has also placed reliance on various judicial pronouncements which are as under: [i] Sir Dorabji Tata Trust Vs. DCIT(E) 188ITD 38 dt.28.12,2020 [Mum.][Trib.] [ii] Brahma Center Development (P) Ltd. Vs. PCIT [2020] 185 DTR 353/77 ITR(Trib.)156 (Delh)(Trib.) [iii] ETT Ltd. Vs. CIT (2019) 177 DTR 313 (Del.) (Trib.) [iv] Amira Pure Foods Pvt. Ltd. Vs. PCIT (2017) 51 CCH 473/63ITR (Trib.) 355 (Del.) (Trib.) [v] Nilkanth Stone Industries Vs. PCIT (2021) 189 ITD 718 (Surat) Trib. [vi] CIT Vs. International Society for Krishna Consciousness (2020) 272 Taxman 534 (Kar.)(HC) [vii] PCIT Vs....
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.... Yogesh Bindal 1245800 4 4 9 Santosh Bindal 1245800 4 4 10 Abhishek Gupta 2504100 8 8 11 Sushil Garg 310200 1 1 12 Neha Gupta 2791800 9 9 13 Priyank Garg 2803050 9 9 14 Dr. Anguri Garg 2803050 9 9 15 Narendra Kumar Mittal 2810300 9 9 16 Bharat Mittal 2795800 9 9 Total 3,11,45,000 M/s Goel Sons was created on 15.10,2015. The details of the partners, their share capital and profit-sharing ratio is as under: SI. No. Name of the Partners Share capital Ratio Profit Sharing 1 Rahul Gupta 241720 5 5 2 Shashi Bala 963880 20 20 3 Mohit Gupta 2891640 60 60 4 Priyanka Gupta 728160 15 15 Total 4825400 The assessments considering the additions u/s 56(2)(vii)(b) of the I.T. Act have already been passed by the Assessing Officer in the case of Shashi Bala partner in the Firm M/s Agrawal Sons & M/s-Goel Sons, Manisha Gupta partner in the Firm M/s Gupta sons & M/s Agrawal Sons and in the cases of Yogesh....
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....9-76). At Pg 10 of your earlier order you have included one more sale deed of Rs. 12 lacs having stamp duty value at Rs. 3,11,93,000/-. However, it can be noted that the area as per the first sale deed and the third sale deed is same. From where the third sale deed is included is not known. This is not existent. In the Balance Sheet of Goel sons, the cost of land is reflected at Rs. 47,19,920/- comprising of cost of land Rs. 19 lacs and stamp duty paid Rs. 28,19,920/-(PB 77-78) ..........." 12.1. The above mentioned reply of the assessee has been considered and it is seen that the assessee's contentions with regard to the deemed income u/s.56(2)(viii)(b) of the I.T. Act, 1961 are contrary to the facts of the present case keeping in view the findings of the AO in the case of M/s. Goel Sons for A.Y. 2016-17 wherein the AO has observed as under: "The case was heard and discussed. On the basis of the reply file by the assessee and examination of papers/documents seized and submitted, the income of the assess is determined as under- The firm was created on 15 10 2015. The details of the partners their share capital and profit sharing is as under: Name of th....
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....6 Shri Vivek Vishwanathan S/o Priya Vishwanathan M/s. Gole Sons 1200000/- Khasra No. 859/981, 860/982, 843, 860B, 849, 881 & 820 (1/2 Part of 1.366 Hectare & full part of 1.648 Hectare) 2184000/- 31193000/- dt.21.09.2015 3100000/- 4962920/- 70888560/- From the above it is clear that the land has been registered at much below value of the market value as per land registry office. Thus, it is crystal clear that these firms have been formed to acquire the impugned bagh and in actuality the firms are not doing any real business. Apart from using these firms to acquire the said bagh, no any business carried out by these firms till date. It is established that the firms created are paper firms and it was created by escape from the tax liability as per section 56(2)(vii)(b) as during the year under consideration the firms does not fall within the 'ambit of section 56(2)(vii) (b) A colorable device has been used to default the payment of tax liability........." 12.2. From the above details in the assessment order of M/s Goel Sons, it is noticed that the purchase consideration in respect of 3 sale deeds, is Rs.7.....
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....mputed on the basis of his profit-sharing ratio in the two firms namely M/s Aggarwal Sons & M/s Gupta Sons. Explanation-2 enjoins upon the Assessing Officer to conduct necessary enquiries and verifications before passing an assessment order and the failure to do so, would lead to invocation of the provisions of Section 263 of the Income Tax-Act, 1961. The failure of the assessing Officer to do so has rendered the assessment order passed by him Officer deemed to be erroneous in so far as it is prejudicial to the interests of the revenue. 15. Even on legal footing, the case laws cited by the assessee in support of his contention do not help his cause in these proceedings. The assessee has taken shelter of certain case laws to make out a case that issues which have already been examined in detail do not come within the purview of Section 263 of the Income Tax Act, 1961. With due respect to the judicial pronouncements cited, the same are distinguishable not only on facts but on the position of law too. Facts borne out of records clearly show that the Assessing Officer did not make any enquiries or independent verification. The reply and documents filed by the assessee have bee....
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.... on the part of the Assessing Officer in as much as the necessary verification of facts/enquiries which should have been made, have not been made, making the order erroneous and prejudicial to interest of revenue within the meaning of section 263 read with Clause (a) of Explanation-2 there under. I, therefore, under the powers conferred u/s 263 of the Income Tax Act, 1961, hereby set aside the order passed by Assessing Officer u/s 1153A/143[3] for A.Y.2016-17 with direction to pass fresh order after conducting proper enquiries, including third party enquiries and investigations etc. into the claim of the assessee, after providing opportunity to the assessee also." 6.1 This leaves both the assessee's aggrieved. 7. Before we could proceed further, we sought to know from both the parties as to what is the addition sought to be made in the impugned twin cases. We are informed in light of the learned PCIT's revision above directions that the addition which is sought to be made herein is that u/s 56(2)(vii)(b) of the Act which is applicable in case of an individual or an HUF; as the case may be, is found to have "received" a capital asset at a lower price than that adopted by the s....