TaxTMI 
TaxTMI 
2025 (7) TMI 42
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....-. On receipt of credible information that the assessee has received huge cash payments against sale of immovable properties, notice u/s 148 of Income-tax Act, 1961 (hereinafter referred as "the Act") was issued on 30/06/2021 and the case of the assessee was reopened for reassessment u/s 147 of the Act. In the meanwhile, several Writ Petitions were filed by certain assessees before the different Hon'ble High Courts across the country, challenging the validity of the similar notices issued u/s 148 of the Act. Thereafter, matter reached before Hon'ble Supreme Court. The Hon'ble Supreme Court in Civil Appeal No. 3005/2022, vide order dated 04/05/2022 had directed in para 10 of the order as under: "........................The impugned Section 148 notices issued to the respective assesses which were issued under unamended Section 148 of the I T Act, which were the subject matter of writ petitions before the various respective High Courts shall be deemed to have been issued under Section 148A of the IT Act as substituted by the Finance Act, 2021 and construed or treated to be show-cause notices in terms of Section 148A(b). The assessing officer shall, within....
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....) 20-01-2023 30-01-2023 Not received NA NA u/s 142(1) 31-01-2023 07-02-2023 Not received 10-02-2023 NA Letter 09-02-2023 Received 14-03-2023 part 142(1) 03-04-2023 10-04-2023 Received 13-04-2023 15- 04-2023 Part 143(2) 28-04-2023 01-05-2023 Received 06-05-2023 Part SCN 13-05.2023 18-05-2023 Received 18-05-2023 Part 3. Variation Proposed 3.1 Complete description of issues involved (issue wise) The following is noticed from the order u/s 148A(d) of the I.T. Act dated 15/07/2022; 2. Brief details and analysis of information collected/received by A.O. :- This office has credible information in possession that survey u's 133A of the I.T Act was carried out on 30.05.2017 in the case of Babylon Group. The group is engaged in the Hotel Sector. During survey proceedings, a Hard Disk was impounded from the premises of M/s Hotel Babylon International Pvt Ltd. Raipur that its group company M/s Hotel Babylon Continental Pvt Ltd has received and made huge cash payments in connec....
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....oi to Rs. 25,00,000/- (Cr.) whereas it is clear that sale consideration is Rs. 8,70,00.000/-. Thus, there is difference amount of Rs. 4,58,00,000/- (8,70,00,000/- - 4,12,00,000/-) between sale consideration amount as per ledger and amount in sale deed, in which cash payment of Rs. 4,38,00,000/- pertains to F.Y 2015-16 has escaped income relevant to A.Y 2016-17. 3.2 Synopsis of all submissions of the assessee relating to the issue and indicting the date of submission In response to the above notices as tabulated above, the assessee submitted her reply on 10-02-2023, 14-03-2023, 13-04-2023 and 15-04-2023. The submission of the assessee dated 10-02-2023 is here under; 1. Assesssee is in Business in Firm Name of Drive in Restaurant, caring Income from House Property of Rs. 28,875/-, Income from Long Term Capital Gain from Sale of Property at Purena and Income from Interest from Saving Bank A/c of Rs 107,051/-, Interest from Fixed Deposit, Intt from Unique Enterprises of Rs. 2,25,000/- under the Head Income from Other Sources. For detailed income statement I have enclosed copy of computation of income for your kind perusal. 2. Computation of Total Inc....
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....ing the Year. Investment made in Bond of Rural Electrification Corporation Limited of Rs. 50,00,000/- for deduction u/s 54EC during the year. (Copy of Bond 54EC Receipt is enclosed for your kind perusal). Further, assessee has replied on 15-04-2023, the submission of the assessee is reproduced below; 3. Copy of bank ledger explaining entries in the bank respective bank account is enclosed for your kind perusal. (Attachment 1 page number 12-15) 4. Copy of Purchase deed dated 8-7-16 jointly with Shri Jasbir Singh Oberoi (claimed deduction u/s 54 in computation of Rs. 1,46,55,000/-) is enclosed for your kind perusal. (Attachment 2) 5. Cost of acquisition with indexation is Rs. 3,96,367/- (details is as follows) (Attachment 3 and 4) a) Cost of land purchased on 4-12-87 (FY 87-88) - 55,000/- Capital gain Index value for FY 87-88 - 150/- Capital gain Index value for FY 2015-16 - 1081/- So Indexed cost = 55,000/-150*1081 comes to - 3,96,367/- (Attachment-4, for 55000 cost registry copy) b) Further expenses of Rs. 29,25,500/- claimed (details is as follows) -Rs. 25,75,500/- paid for stamp dut....
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....e group has received and made huge cash payments in connection with the investment in Babylon Tower and sale of immovable properties during F.Ys 2013-14 to 2016-17. The hard disk and other electronic devices were impounded from the premise of the Babylon group concern during the survey action and there was no conflict on the issue of ownership of the impounded materials. During the survey various issues pertaining to undisclosed investments, unaccounted expenses and out of book receipts by the group were unearthed and the transactions contained in the hard disk do relate to such issues. Therefore, the transactions found out in the hard disk cannot be treated as dumb or outdated. The document found from the hard disk is in fact a speaking document for the fact that it was maintained by the group in the system of the group companies and it clearly shows various amounts received in cash or paid in cash, the names and other details of persons paying or receiving such amounts in cash along with other details such as date and phone numbers. 3.4 Variation proposed on the basis of inference drawn (specify the basis of inference and quantify the variation proposed, if poss....
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....ments. On perusal of the data extracted from the impounded hard disk, it was also found that the group has made huge cash payments during F.Y.2014-15 and 2015-16 and 2016-17 to various parties (including the assessee) against the purchase of immovable property. The details of cash payment to assessee as retrieve from the impounded Hard Disk is as under- NAME PAN FY 2015-16 AMOUNT Rs. Parvinder Kaur Oberoi AAGPO2045P 21-04-2015 5000000 25-04-2015 2500000 22-07-2015 5000000 23-07-2015 3000000 25-07-2015 15000000 27-07-2015 5000000 06-08-2015 5800000 08-08-2015 2000000 10-08-2015 2000000 TOTAL 45300000 The copy of the ledger of the assessee in the books of Hotel Continental (Purchaser) is also reproduced as under: In the above ledger details, it is seen that the payments were received from 28/10/2014 to 10/08/2015 F.Y. 2014-15 and F.Y 2015-16) by cheques and cash in different dates totaling to Rs. 8,95,00....
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.... assessee in his original return of income had declared taxable LTCG of Rs. 1,32,23,133/- on sale of the aforementioned land. But, taxable LTCG of sale of the said land is now recalculated to Rs. 6,90,23,133/-. Hence, variation of Rs. 5,58,00,000/- (Rs. 6,90,23,133/- minus Rs. 1,32,23,133/-) is to be made in total income on this account. [Proposed variation- Rs. 5,58,00,000/-] In view of the above, final opportunity is being provided to assessee vide this show cause notice to show cause as to why assessment should not be completed making addition of Rs. 5,58,00,000/- in total income under the head Long Term Capital Gain. It is also proposed to initiate penalty u/s 271(1)(c) of the Income-tax Act, 1961 in related to above proposed addition of Rs. 5,58,00,000/-. Accordingly, a show cause notice was issued to the assessee requesting to explain as to why assessment should not be completed on the above proposed variation. 3.5 Synopsis of the reply of the assessee to SCN and additional SCN(if any). In response to the show cause notice the assessee has submitted her reply on 15.05.2023, which is reproduced below; With due respect, i....
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....considering cash receipt your calculation of Long term capital gain is not correct, I have shown/declared the correct capital gain amount in the return of income filed. Computation shown in the show cause notice in page number 12, in which taxable long term capital gain on sale of Rs. 6,90,23,133/- is not correct and it is requested not to draw any adverse inference and obliged. 3.6 Summary of information and evidence collected after SCN (if any). The assessee in her submission has submitted bank statement of Punjab and Sind Bank A/c No. 0298100013178, wherein the bank has certified that "this is capital gain account" and it is evident that there is a credit of Rs. 50,00,000/- on 28-07- 2016. The assessee has also submitted Acknowledgement slip of Rural Electrification Corporation Ltd and bank statement reflecting the transaction on 11- 02-2016. Hence, no adverse view is taken on the issue i.e deduction u/s 54 (capital gain account) and deduction u/s 54EC of the I.T. Act. 3.7 Point-wise rebuttal of reply of the assessee including analysis of any case law relied upon. The reply filed by the assessee is perused carefully, but the same is n....
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....TCG on sale of aforesaid land Rs. 5,90,23,133/- The assessee in his original return of income had declared taxable LTCG of Rs. 1,32,23,133/- on sale of the aforementioned land. But, taxable LTCG of sale of the said land is now recalculated to Rs. 5,90,23,133/-. Hence Rs. 4,58,00,000/- (Rs. 5,90,23,133/- minus Rs. 1,32,23,133/-) is added to the total income of the assessee under Long Term Capital Gain. [variation- Rs. 4,58,00,000/-] Penalty proceeding u/s 271(1)(c) of the IT Act is being initiated separately for concealment of particulars of income. 5. Final computation of taxable income: SI. No. Description Amount (in Rs.) 1 Income as per return of income filed u/s 139 of the I.T. Act 1,48,54,650 2. Income as per return of income filed in response to notice u/s 148 of the I.T. Act 1,48,54,650 3 Variation 4,58,00,000 4 Total income/loss determined 6,06,54,650 6. Assessed u/s 147 r.w.s. 143(3) read with section 144B of the Income Tax Act, 1961. Penalty proceedings under section 271(1)(c) of the I.T. Act, 1961 have been initiated through notice issued separately. Computation of income and ....
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....ut it is axiomatic that no court or tribunal is supposed to continue a proceeding before it when the party who has moved it has not appeared nor cared to remain present. The dismissal, therefore, is an inherent power which every tribunal possesses." 4.1.4 The principle that every court that is to decide on a matter of dispute, inherently possesses the power to dismiss the case for default, has been upheld by the Hon'ble Supreme Court in case of Dr. P. Nalla Thampy Vs. Shankar (1984 (Supp) SCC 63 and the case of New India Assurance vs. Srinivasan (2000) 3 SCC 242. In the latter case, the Apex Court has held as under :- "That every court or judicial body or authority, which has a duty to decide a list between two parties, inherently possesses the power to dismiss a case in default. Where a case is called up for hearing and the party is not present, the court or the judicial or quasi-judicial body is under no obligation to keep the matter pending before it or to pursue the matter on behalf of the complainant, therefore, the court will be well within its jurisdiction to dismiss the complaint for non-prosecution. So also, it would have the inherent power and jurisd....
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....peaking order considering all the facts and the circumstances of the case and no interference with the order of the AO is called for. The grounds of appeal are therefore dismissed. 7. Thus, in view of the facts and circumstances of the case, the order passed u/s.147 r.w.s. 144B of the Act dated 23.05.2023 by the AO is upheld." 4. That considering the factual spectrum that an ex-parte order has been passed by the Ld. CIT(Appeals)/NFAC due to non-compliance by the assessee, in such scenario, this bench has provided one final opportunity to the assessee considering that the benefit of doubt may be existing in favour of the tax payer assessee and for that due to reasons beyond control of the assessee, the said assessee may not have been able to represent and comply with the hearing notices before the Ld. CIT(Appeals)/NFAC. Therefore, in this regard, as per the order of the ITAT, "Division Bench", Raipur in the cases of Brajesh Singh Bhadoria Vs. Dy./ACIT, Central Circle-2, Naya Raipur, IT(SS)A Nos.1 to 6, 8 & 9/RPR/2025, dated 20.03.2025 wherein the Tribunal had dealt with similar issue on the same parameters of ex-parte order passed by the Ld. CIT(Appeals)/NFAC and remande....