TaxTMI 
TaxTMI 
2026 (6) TMI 360
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....ply with the notice, further opportunity vide notice dt. 15/11/2018 was granted, pursuant which the assessee filed his return of income ['ITR'] on 12/12/2018 declaring taxable income Rs.46,34,580/-, comprising of long-term capital gain ['LTCG'] of Rs.44,01,486 and balance from other sources and reporting agricultural income of Rs.1,22,400/-. The return of the assessee was subjected to scrutiny vide notice dt. 12/12/2018. In such scrutiny assessment a solitary addition of Rs.32,90,398/- towards difference of LTCG was made and by making reference of violation of provision of section 269SS the total income u/s 143(3) r.w.s. 153A of the Act vide order dt 27/12/2018 was assessed Rs.79,24,978/-. 2.2 Assessee aggrieved by the addition preferred an appeal u/s 246A r.w.s. 249 of the Act which was partly allowed by the Ld. CIT(A). Still aggrieved thereby, the assessee filed the present appeal u/s 253(1) of the Act with following substantive grounds of grievance for adjudication; 1. The learned Commissioner of Income tax (Appeal) was not Justified in not taking the cost of acquisition value at Rs. 1,10,979 without appreciating that appellant have sold 1290.45 sq Mt of land thus co....
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....acquisition and adoption of fair market value determined by departmental valuation officer u/s 50C of the Act ['Ld. DVO'], it was submitted that, the error is apparent and therefore needs to be corrected before the actual LTCG to be taxed. As against the grievance of charging interest u/s 234A, 234B & 234C of the Act is concerned, it was agitated that, the part of sale consideration received in cash was first seized by the police and same was requisitioned u/s 132A of the Act on 22/11/2016. Since such seizure, the assessee followed for release and in-spite of continuing persuasion, the Revenue did not release the same. Because of withholding of seized cash, the assessee was prevented from discharging tax liability. Therefore no interest attributable for such period, hence to be deleted. 4. Au contraire, the Ld. DR Padha in response to legal ground vehemently rebutted that, neither before the Ld. AO nor before the Ld. CIT(A) the legal ground challenging the jurisdiction was raised but in the present proceedings first time. Adverting to the records it was contended that, for the year under consideration the Ld. AO had territorial jurisdiction over the assessee, wherein the assesse....
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....ellate proceedings]. 6.4 Invoking the provisions of section 50C of the Act, the Ld. AO called upon the appellant to show-cause as to why the differential amount in the light of seized cash should not be added to returned LTCG. In the event of the appellant's endorsement that the seized cash was accrued to him & was arisen as sales-proceeds on transfer of properties, the Ld. AO recomputed the LTCG relacing the sale consideration adopted by the appellant with that of SDV of Rs.85,97,712/- [Rs.89,87,712/- as stands corrected by Ld. CIT(A)] and accordingly framed the assessment making a solitary addition of Rs.32,90,398/- being differential LTCG attributable to full value of sale consideration. 6.5 While culminating the proceedings u/s 143(3) r.w.s. 153A of the Act, the Ld. AO vide para 6 of his order, after rendering clear findings over receipt of cash from four parties by the appellant in relation to transfer of immovable properties, alleged the violation of provisions of section 269SS of the Act and consequently made the reference to the Ld. JCIT for considering the case imposing penalty u/s 271D of the Act. 7. We also note that, 7.1 When the matter travelled up in first....
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.... that, the challenge to the jurisdiction of Ld. AO is devoid of merits and law. We say upon twin findings that; (a) the appellant did not file his return, the Ld. AO having territorial jurisdiction over the appellant assumed the jurisdiction by notice u/s 142(1) of the Act and accessed the income accordingly. The return exceeding monetary limit was filed by the appellant after submitting to the jurisdiction without challenge. Therefore reliance placed on CBDT Instruction No 1/2011 dt. 31/01/2011 by the appellant could hardly be any of help. (b) and the challenge to jurisdiction is time barred in view of s/s (3) of section 124 of the Act. Without re-producing the text of the former provision in verbatim, it shall suffice & purposive to state here that, in view of the restriction placed by clause (c) of s/s (3) of section 124 of the Act the appellant is not entitled to call in question the jurisdiction of Ld. AO after the expiry of one month from the date of notice u/s 153A(1)/153C(2) or after the completion of assessment whichever is earlier. 8.3 The Hon'ble Supreme Court in 'DIT(E) Vs Kalinga Institute of Industrial Technology' [2023, TaxPub(DT) 3566 (SC)] reversed the decis....
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....he appellant contention holding that, the cost qua area of land foregone for roads and drainage already subsumed in the area sold thus the sale consideration received therefore. 9.2 The action of restricting the cost of acquisition of total area of unconverted land to area of converted land, to equivalent cost with reference to area sold is devoid of rationale and merits. There is no findings rendered about the excessiveness of cost claimed to have incurred by the appellant in acquiring the piece of unconverted/original land. Nor there is any whisper in the orders of the tax authorities below about sale of such differential area for cash separately. Further there is hardly any basis founded in restricting the cost of acquisition except reference to area sold vis-à-vis area converted. The total cost incurred by the appellant towards acquisition of capital asset is attributable to both (i) area of land sold and (ii) area of land foregone for conversion or diversion etc., owning to rules/regulation of conversion/diversion. Therefore, such cost of acquisition cannot be reduced on the premise that such area never been sold but reserved for utilities. We find the action of redu....
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....ted and so is the ground, as it left with much less merits. 11. Grievance against applicability & application of interest u/s 234A, 234B & 234C of the Act. 11.1 The issue of chargeability or levy of interest of u/s 234A, 234B & 234C of the Act is no-more res-integra in view of Hon'ble Apex Court decision in 'CIT Vs Anjum MH Ghaswala' [2001, 119 Taxman 352 (SC)] wherein their hon'ble lordships have held that, levy of interest contemplated u/s 234A, 234B and 234C is mandatory in nature and no power for waiver or reduction been expressly conferred therefore cannot reduce or waive such statutory levy except to the extent of granting relief under the Circulars issued by the Board u/s 119. Therefore the appellant without challenging applicability of interest, restricted all his plea against application thereof in view of the peculiar facts & circumstances of his case. It was averred that, alleged on-money i.e. part of sale consideration received in cash seized by the police was requisitioned u/s 132A of the Act and since then it is in possession of the Revenue. The non-payment of taxes is solely attributable to non-availability of seized cash. Such cash should be appropriated towar....
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....he filing of the return which is not less than the tax payable on the returned income which has been accepted, no interest can be levied u/s 234A of the Act. 11.5 Since seized cash equivalent to tax on returned income was in possession with the Revenue much before the expiry of financial year, the appellant's tax liability stood discharged for the purpose of compensatory levy of interest u/s 234A of the Act. Hence, we see there could be no occasion for charging of interest u/s 234A of the Act on returned income. Similar view found taken by the Ld. Co-ordinate bench in 'Nitin Kumar Vs ACIT' (supra). Maintaining the parity therewith, we set-aside the impugned adjudication and direct the Ld. AO to delete the same in its entirety. 11.6 Insofar as the application of interest u/s 234B of the Act is concerned, it could be seen from the facts narrated above, that the seized cash was available with Revenue from 22/11/2016 onwards. The interest u/s 234B of the Act is chargeable for default in payment of advance tax w.e.f. first day of the assessment year i.e. from 01/04/2017 until the discharge of tax liability. The amount of seized cash approximately exceeded three times of assessed t....