TaxTMI 
TaxTMI 
2025 (3) TMI 1950
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....Justice; Under the facts and circumstances of the case ld.CIT(A) grossly erred in confirming the impugned assessment proceedings/order as the same has been framed in violation of the principles of natural justice without granting to the assessee a fair, proper and reasonable opportunity including without issuing specific SCN to the assessee. 3. Objection did not dispose; That the ld. CIT(A) has grossly erred in law and facts in upholding validity of assessment order as the ld. AO did not disposed the objection raised by the assessee. 4. Under the facts and circumstances of the case ld. CIT(A) grossly erred in confirming the action of ld. AO in disallowing of Rs. 42,99,000/- on account of transfer expenses without appreciating the facts available on records and without considering them in their true perspective and sense therefore complete addition should be deleted. 5. Under the facts and circumstances of the case ld. CIT(A) grossly erred in deleting the addition of Rs. 4,55,921/- 'subject to verification by AO' ignoring the facts that all relevant documents have already been submitted to the ld. AO who rejected the same without apprecia....
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.... there was bonafide mistake of me. 6. That due to all this reason the appeal could not be filed within time. 7. That the contents or averment of application for condonation of delay are true and correct and may be treated as part of this affidavit. Sd/- Deponent Palce: Jaipur Date : 26.02.2023 VERIFICATION I, the above named deponent, do hereby verified that the contentions of above para 1 to 7 are true and correct to the best of my knowledge, nothing has been concealed. God may help me. Sd/- Deponent Palce: Jaipur Date : 26.02.2023 The ld. A/R relied on the judgments of the Hon'ble Supreme Court in the case of Collector, Land & Acquisition vs. Mst. Katiji & Others (1987) 167 ITR 471 (SC) and requested for taking a liberal approach for condonation of delay. The ld. A/R further relying on the judgment of Hon'ble Supreme Court in the case of Vedbai vs. Shantaram Baburam Patil & Others, 253 ITR 798 (SC) submitted that the Apex Court have again reiterated that the expression "sufficient cause" should receive a liberal construction and held that advancing of substantial justice shoul....
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....g certain data/information/explanation/evidence through electronically mode. Further, notice under section 142(1) of the IT Act, 1961 along with show cause notice was issued on 22.11.2018 and 06.12.2018. In compliance to the notices, the assessee filed requisite details vide letter dated 28.11.2018 and 10.12.2018 which have been placed on record. The AO considered the submissions of the assessee but could not found the same satisfactory. Accordingly, the AO completed the assessment under section 147/143(3) of the IT Act, 1961 dated 31.12.2018 by working out capital gain of Rs. 57,27,453/- instead of LTCG of Rs. 2,94,100/- as declared by the assessee considering sale consideration at Rs. 1,41,17,321/- as per the provision of section 50C of the IT Act and made an addition on account of long term capital gain for Rs. 54,33,353/- and reduced the indexed cost from Rs. 18,23,077/- to Rs. 8,99,545/- and assessed the total income at Rs. 59,02,840/- by raising a demand of Rs. 21,58,090/-. Aggrieved by the order of AO, the assessee preferred an appeal before the ld. CIT(A). The ld. CIT(A) considering the submissions filed before him, partly allowed the appeal of the assessee. Now the asse....
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....er himself and it was also agreed that the this cost of conversion forming part of sales consideration was to be adjusted against the expenses incurred for the same by buyer. Thus, the buyer paid consideration to all the sellers after deducting the above said expense resultantly, assessee received only Rs. 98,01,000/- for his share, for which assessee also given the affidavit dated 10/12/2018 annexed at PB "34" but Ld. AO not appreciated the same. Assessee received this amount of Rs. 98,01,000/- in his bank account, bank statement of which is annexed at PB "73-101". The assessee vide letter dated 28/11/2018 very well elaborately explained that assessee only received Rs. 98,01,000/- out of his share in total sale consideration of Rs. 1,41,00,000/- as cheque worth Rs. 42,99,000/- were not encashed by the assessee because the amount of Rs. 42,99,000/- were for conversion expenses and as per mutual understanding and a verbal agreement were to be adjusted from the total sales consideration of Rs. 5,21,00,000/-. The above said letter is annexed at PB "26". If this was not the case that the buyer given the consideration after deduction of the above said expenses....
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....d. AO ignored the request made by the assessee. Assessee through various letters reiterated the same facts before the Ld. AO but not appreciated by the Ld. AO and passed the assessment order arbitrarily in the mechanical manner. It is notable to mention here that all the consideration received by the assessee were through cheques and duly deposited by the assessee in his bank accounts and Ld. AO is failed to bring any cogent and corroborative material on record that assessee received any other amount from buyer, through cash or any other mode, whereas assessee's contention is very well supported by the bank statements and affidavit of assessee and buyer of the land. Hence, the addition made by the Ld. AO arbitrarily and without conducting proper inquiry, even after legitimate request made by the assessee, under 50C of the act on the basis of mere conjuncture and surmises are liable to be deleted. (b) Ld. AO ignored the affidavit of the assessee In this case the Ld. AO while disallowing the cost of transfer expenses observed as follows "The assessee claimed cost of transfer expenses of Rs. 42,99,000/- The assessee was asked to fu....
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....affidavit unless the person who gave the affidavit was put to cross examination and, if put to cross examination, not unless the Assessing Officer has found fault with the same : * Mehta Parikh & Co. v. CIT (1956) 30 ITR 181 (SC) * Dilip Kumar Roy v. CIT (1974) 94 ITR 1 (Bom.) * Rajshree Synthetics P. Ltd. v. CIT (2002) 256 ITR 331 (Raj.)" 7. From the record we found that income of the donor during the year was Rs. 2,49,712/-. She was mother in law of the assessee having sufficient cash in hand as on 31/03/2011. For this effect, the assessee has also filed statement showing availability of cash on the date of gift. The donor was aged about 71 years at that time. However, due to poor health, she could not appear before the A.O. Mere non-appearance before the A.O. could not be made reason to disbelieve the genuineness of gift when other documentary evidences so filed support the fact of gift. From the record we found that the confirmation from the donor, copy of acknowledgment of return of income and computation of income were submitted to the ld. AO during the course of the assessment proceedings. 8. In view of above discussion, we restor....
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....PB "26" raised objection against the notice issued under section 148 of the act but the Ld. AO did not disposed off the objection of the assessee. It is settled law that of disposing off the objections against the notice issued under section 148 by a separate and speaking order is a mandatory requirement in view of the judgment of the Hon'ble Supreme Court in case of GKN Driveshafts (India) Ltd. vs. ITO (supra), the failure of the AO to dispose off the objections renders the reassessment order not sustainable in law. Our aforesaid view is supported by the decision of jurisdictional ITAT Jaipur in the matter of M/s. Girraj Prasad Gilara HUF, Jaipur ITA No. 354/JP/2019 dated 06/10/2020. In the above said judgement Hon'ble relied following judgements and held as follows:- 1. Pushpak Bullion Pvt. Ltd. vs. DCIT, 379 ITR 81 (Guj.) 2. GKN Driveshafts (India) Ltd. vs. ITO, 259 ITR 19 (SC) 3. Allana Cold Storage Ltd. vs. ITO (Bombay High Court) "Thus the requirement of disposing off the objections against the notice issued under section 148 by a separate and speaking order is a mandatory requirement in view of the judgment of th....
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....had a reason to believe the income escaped assessment. Here it is not understandable how appellant is claiming that it has disclosed fully and truly all material facts when the appellant has only declared his share at Rs. 96,07,500/-. Appellant has relied on the judgment of Hon'ble Delhi High Court in the case of Haryana Acrylic Manufacturing Co. However, the fact of the case are different from the case of appellant as no order u/s 143(3) of the I.T. has been passed in the case of the appellant. Further, AO had sufficient reasons to believe that income has escaped assessment. Appellant has also challenge the reasons for reopening were not provided to the appellant. On perusal of assessment order it is seen AO has mentioned that the reasons for reopening were provided on 03.10.2018. It is further seen that the appellant in its ground of appeal no. 4 has challenged that the AO failed to pass a speaking order against the objection raised by the appellant on 28.11.2018. On one hand appellant is alleging the AO that the reasons for reopening were not provide and on the other hand appellant is alleging that the AO did not pass a speaking order disposing the objection raised by the appell....
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....he subjected case. 1. The assessee has been served notice under section 148 dated 23.03.2018 stating that assessee has escaped the long term capital gain. In this regard we would like to submit that we have filed a regular return on dated 23.06.2011 whereas in the return the assessee has disclosed the long term capital gain (copy of the computation of total income and ITR-v is enclosed herewith). Hence the notice u/s 148 of concealment of income is unlawful and not valid. 2. The assessee has also been served notice under section 131(1A) dated 17.8.2012 whereas the detail enquiry has been conducted by Joint Director Income Tax (Intelligence and criminal investigation) where we had replied on dated 28.08.20123 and 17.09.2012 with all the enclosures and further the matter has been dropped on the ground that no tax evasion is there. Here we are enclosing the copy of notice and reply. 3. The assessee has been served notice under section 133(6) dated 03.11.2017 of which reply has been mailed to the assessing officer. Here we are enclosing the copy of mailed reply herewith. 4. With the objection on the validity of notice u/s 148 we are enclosing detail/....
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....he AO without disposing off the objections has observed in para 7 to 9 as under :- "7. Having heard the learned advocates for the respective parties and considering the impugned orders by the AO disposing of the objections, it appears that the AO has disposed of the said objections without deciding it on merits and solely on the ground that as the assessee has not filed the return pursuant to the notice issued under Section 148 of the Act within a period not less than 30 days from the date of receipt of the notice under Section 148 of the Act. That while disposing of the said objections on the aforesaid ground, the AO has relied upon and considered the decision of the Division Bench of this Court in the case of Sahakari Khand Udyog Mandal Ltd. (supra). However, on considering the directions issued by the Division Bench of this Court in the case of Sahakari Khand Udyog Mandal Ltd. (supra), it appears that AO has misread and/or misinterpreted the directions issued by the Division Bench of this Court in the case of Sahakari Khand Udyog Mandal Ltd. (supra). 8. In the case of Sahakari Khand Udyog Mandal Ltd. (supra) the Division Bench had an occasion to consider the va....
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....ioner of Income Tax and Cadre Controlling Authority of the Gujarat State, shall issue a circular to all the Assessing Officers for scrupulously carrying out the directions contained in this judgment." 8.1 From the aforesaid, it does not appear that any observation has been made by the Division Bench and/or any direction is issued by the Division Bench that assessee has to file return of income in response to the notice under Section 148 of the Act within a period not less than 30 days. What is observed/directed by the Division Bench is that if the assessee when files his return of income in response to notice under Section 148 of the Act, the AO shall supply the reasons recorded by him for issuing such notice within 30 days of the filing of the return by the assessee without waiting for the assessee to demand such reasons. The Division Bench has further observed and directed that once the assessee receives such reasons, he would be expected to raise his objections, if he so desires, within 60 days of receipt of such reasons and if objections are received by the Assessing Officer from the assessee within the time permitted hereinabove, the Assessing Officer would dispose of....
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....of action for the notice is to file a return and if he so desires, to seek reasons for issuing notices. The Assessing Officer is bound to furnish reasons within a reasonable time. On receipt of reasons, the notice is entitled to file objections to issuance of notice and the Assessing Officer is bound to dispose of the same by passing a speaking order. In the instance case, as the reasons have been disclosed in these proceedings, the Assessing Officer has to dispose of the objections, if filed, by passing a speaking order, before proceeding with the assessment in respect of the abovesaid five assessment years. " 8.3 In a subsequent decision in the case of Garden Finance Ltd. (supra), the effect of Supreme Court decision in the case of G.K.N. Driveshaft (India) Ltd. (supra) came up for consideration and by a majority opinion it has been thus laid down by this Court as under: "What the Supreme Court has now done in the G.K.N. Driveshafts (India) Ltd. v. ITO [2003] 259 ITR 19 is not to whittle down the principle laid down by the Constitution Bench of the Apex Court in Calcutta Discount Co. Ltd. v. ITO case [1961] 41 ITR 191 but to require the assessee first to lodge p....
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.... aforesaid decision of the Hon'ble Supreme Court in the case of GKN Driveshafts (India) Ltd. (supra) and the decision of the Full Bench of this Court in the case of Garden Finance Ltd. (supra) and the decision in the case of Arvind Mills Ltd. (supra) and the decision of the Division Bench in the case of Sahakari Khand Udyog Mandal Ltd. (supra) impugned orders disposing of the objections without deciding the objections on merits cannot be sustained and same deserve to be quashed and set aside. The impugned orders passed by the AO disposing of the objections are absolutely on misinterpretation and/or misreading of the decision of the Division Bench in the case of Sahakari Khand Udyog Mandal Ltd. (supra). As observed herein above in the case of Sahakari Khand Udyog Mandal Ltd. (supra) the Division Bench has never provided/prescribed/stipulated any time limit for the assessee to file return of income pursuant to notice under Section 148 of the Act, more particularly within a period not less than 30 days and failure to file return of income within a period not less than 30 days, AO need not decide the objections on merits. Such interpretation by the AO is absolutely on misinterpreta....
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....nt for respective assessment years. Rule is made absolute to the aforesaid extent in each of the petitions. No costs." Thus the Hon'ble High Court has held that the AO is under obligation to dispose off the objections filed by the assessee and failure to dispose off the objections, the order passed by the AO is not sustainable and deserves to be set aside and quashed. The Hon'ble Gujarat High Court in the case of General Motors India Pvt. Ltd. vs. DCIT, 354 ITR 244 (Guj.) has held that disposal of the objections before passing the reassessment order is a mandatory requirement. The Hon'ble Bombay High Court in the case of Allana Cold Storage Ltd. vs. ITO (supra) after considering the judgment of Hon'ble Supreme Court in case of GKN Driveshafts (India) Ltd. vs. ITO, 259 ITR 19 (SC) has held in para 7 & 8 as under :- "7. We have noted the submissions of both counsel. The law as laid down by the apex court is binding on this court as well as on the authorities functioning under the statute. This being the position, we fail to understand as to why the first respondent did not decide the objections separately which he is duty bound to decide. The whole idea in laying down the....
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....nsfer expenses. Although we have quashed the whole proceedings u/s 148 and also the assessment order passed by AO in ground no. 3, we are deciding this ground showing our decision on the merits of the case. In this ground the appellant has challenged the action of the AO in adopting sale consideration of property at Rs. 1,41,17,321/- as against Rs. 96,07,500/- declared by the assessee. The ld. AR has submitted that as per Sale Agreement between the appellant and the buyer M/s. Shreenath Arcade Pvt. Ltd. there was a term that all expenses for issuing Group Housing JDA Patta of the land were to be borne by the seller. As the seller was not having enough liquidity of funds and hence he could not deposit the said charges with JDA and all such charges were paid by the buyer and the buyer has deducted such charges from the sale consideration paid by it on behalf of the seller. The ld. AR during the hearing of the appeal has submitted an Affidavit duly Notarized executed by the buyer wherein the buyer has stated as under :- AFFIDAVIT IN THE MATTER OF RAM SWAROOP (PAN No. AWCPS9424Q) R/O PLOT NO. 104 GAJSINGHPURA, MUNSHI COLONY, HEERAPURA, JAIPUR RAJASTHAN 302 020. V/s....
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.... being produced hereunder : Cheque No. Date Amount Bank Recipient Remarks 656902 12/10/2010 2000000 SBBJ Ramswaroop Cleared 656903 13/10/2010 451000 SBBJ Ramswaroop Cleared 656910 04/11/2010 800000 SBBJ Ramswaroop Cleared 656922 04/11/2020 1500000 SBBJ Ramswaroop Cleared 656923 15/11/2010 1500000 SBBJ Ramswaroop Cleared 656942 20/12/2010 1500000 SBBJ Ramswaroop Cleared 657925 15/12/2010 2050000 SBBJ Ramswaroop Cleared 656926 15/04/2011 1200000 SBBJ Ramswaroop Not Cleared 656927 25/04/2011 2000000 SBBJ Ramswaroop Not Cleared 656928 03/05/2011 1099000 SBBJ Ramswaroop Not Cleared 14100000 Out of such payments of Rs. 14100000, the seller (Ramswaroop Balai) returned the last three cheques of Rs. 12,00,000/-, 20,00,000/- and 10,99,000/- totaling at Rs. 42,99,000/- against the expenses as incurred by our company issuing Group Housing JDA Patta according to the terms of VIKRAY PATRA. 9. That therefore our company have made th....