ITO, New Delhi v. Sh Kuber Chand Sharma, New Delhi

ITA 3982/DEL/2009 | 2006-2007
Pronouncement Date: 13-02-2012 | Result: Allowed

Appeal Details

RSA Number 398220114 RSA 2009
Assessee PAN AAMPS8620G
Bench Delhi
Appeal Number ITA 3982/DEL/2009
Duration Of Justice 2 year(s) 4 month(s) 18 day(s)
Appellant ITO, New Delhi
Respondent Sh Kuber Chand Sharma, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 13-02-2012
Appeal Filed By Department
Order Result Allowed
Bench Allotted D
Tribunal Order Date 13-02-2012
Date Of Final Hearing 19-01-2012
Next Hearing Date 19-01-2012
Assessment Year 2006-2007
Appeal Filed On 25-09-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D NEW DELHI BEFORE SHRI R.P. TOLANI AND SHRI B.C. MEENA ITA NO. 3982/DEL/2009 ASSTT. YR: 2006-07 INCOME-TAX OFFICER VS. KUBER CHAND SHARMA WARD 24(2) NEW DELHI. 5 CSC SFS APARTMENTS HAUS KHAS NEW DELHI. PAN/GIR NO. AAMPS8620G (APPELLANT) ( RESPONDENT ) APPELLANT BY : MS. A. KHURANA DR RESPONDENT BY : SHRI R.K. MEHRA CA O R D E R PER R.P. TOLANI J.M : THIS IS REVENUES APPEAL AGAINST CIT (A)S ORDER D ATED 6-7-2009 RELATING TO A.Y. 2006-07. FOLLOWING GROUNDS ARE RAI SED : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LD. CIT(A) HAS ERRED IN DISMISSING THE ADDITIONAL EVIDE NCE IN SPITE OF THE FACT THAT AMPLE OPPORTUNITIES WERE GIVEN TO THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 66 00 015/- AS AGRICULTURAL RECEIPTS WHEREAS THE AO TREATED THEM A S MERELY BOOK ENTRIES. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT APPRECI ATING THE FINDING OF THE AO THAT AS PER THE LAT AGREEMENT PRO DUCED BY THE ASSESSEE HE IS NOT IN POSSESSION OF THE AGRICULTURA L LAND. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING TH E ADDITION OF ITA 3982/DEL/09 KUBER CHAND SHARMA 2 RS. 1 15 06 543/- ON ACCOUNT OF LTCG CLAIMED EXEMPT U/S 54B OF THE I.T. ACT. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT APPRECI ATING THE FACT THAT THE UTILITY OF THE LAND IN QUESTION WAS CHANGE D TO RESIDENTIAL PURPOSES FROM AGRICULTURAL ACTIVITIES THE SAID FAC T WAS ADMITTED BY THE ASSESSEE HIMSELF. 2. BRIEF FACTS ARE: THE ASSESSEE CLAIMED TO BE ENGA GED IN THE BUSINESS OF AGRICULTURAL ACTIVITIES IN THE NAME OF SAMAK FARMS & NURSERY AND HELD AGRICULTURAL FIELDS AT VARIOUS PLACES IN THE DISTRI CTS OF GHAZIABAD AND GURGAON. IN THE RETURN OF INCOME ASSESSEE CLAIMED AGRICULTURAL INCOME OF RS. 65 00 015/- AND EXEMPTION OF LONG TERM CAPITAL GAINS ON SALE OF AGRICULTURAL LANDS U/S 54B AT RS. 1 15 06 543/-. TH ESE ASPECTS WERE EXAMINED AND ACCORDING TO AO DURING THE COURSE OF ASSESSMEN T PROCEEDINGS ASSESSEE SUBMITTED CONTRADICTORY STATEMENTS WHILE EXPLAINING THE AGRICULTURAL INCOME. AO FURTHER FOUND THAT ASSESSEE CLAIMED TO HAVE MADE BULK SALE OF AGRICULTURAL PRODUCTS TO ASSOCIATE CONCERNS VIZ. M/ S SAMAK LANDSCAPE PVT. LTD. AND M/S SAMAK NATURE RESORTS & SPA PVT. LTD. O N CREDIT BASIS AND IN LIEU OF THESE CREDIT SALES THE ASSESSEE ACQUIRED SHARES OF SNR AND SPA. AO HELD IT TO BE A PLANNED DEVICE TO ACQUIRE SHARES BY SHOWING INFLATED AGRICULTURAL INCOME AND MADE THE ADDITION BY FOLLOW ING OBSERVATIONS: IN THE LIGHT OF THE ABOVE I HOLD THAT THE ASSESSEE HAS MADE BOGUS CREDIT SALES TO THE COMPANY TO ACQUIRE SHARES IN THE COMPANY IN WHICH THE ASSESSEE HAD SUBSTANTIAL INTER EST AND HAS ENTERED INTO A DEVICE TO EVADE TAX WHICH IS NOT PER MISSIBLE. IN VIEW OF THIS THE TOTAL CREDIT SALES MADE TO M/S SAM AK NATURE & SPA AMOUNTING TO RS. 65 00 015/- IS BEING TREATED A S INCOME ITA 3982/DEL/09 KUBER CHAND SHARMA 3 FROM OTHER SOURCES AND NOT AS AGRICULTURAL INCOME A S CLAIMED BY THE ASSESSEE HENCE THE DIFFERENCE OF THE AGRICULTUR AL INCOME DECLARED AND THE DISALLOWANCE COMES TO RS. 8 90 541 /- WILL BE TAXED AS AGRICULTURAL INCOME FOR RATE PURPOSES. 2.1. IN RESPECT OF SALE OF AGRICULTURAL LAND CLAIM ING EXEMPTION OF LONG TERM CAPITAL GAINS AO REFUSED THE ASSESSEES CLAI M ABOUT EXEMPTION ON SALE OF LAND IN GHAZIABAD BY FOLLOWING OBSERVATIONS: THE LAND OF THE ASSESSEE IS WITHIN 6 KM WITH THE M UNICIPAL LIMIT. MOREOVER THE POPULATION OF THE GHAZIABAD IS MORE THAN TEN THOUSAND. HENCE THE PLEA OF THE ASSESSEE IS NOT TENABLE THAT HIS LAND IS AGRICULTURAL LAND. MOREOVER THE USE OF LAND HAS BEEN CHALLENGED FROM AGRICULTURAL TO RESIDENTIAL AS IS E VIDENT FROM THE LETTER OF CATP DT. 20-3-2003. IN VIEW OF THE AB OVE FACTS THE ASSESSEE IS NOT ENTITLED FOR EXEMPTION U/S 54B EVEN THOUGH THE ASSESSEE HAS INVESTED CAPITAL GAINS IN THE PURCHASE OF NEW AGRICULTURAL LAND THIS IS BECAUSE OF THE FACT THAT THE CAPITAL GAIN HAS NOT ARISEN ON THE TRANSFER OF AGRICULTURAL LAND FOR THE REASONS THAT THE CHARACTER OF THE LAND WHICH IS THE SUBJEC T MATTER OF DISCUSSION STOOD CHANGED BEFORE THE SALE OF THE SA ME. THEREFORE THE EXEMPTION CLAIMED BY THE ASSESSEE I S DENIED. 2.2. AGGRIEVED ASSESSEE PREFERRED FIRST APPEAL WH ERE ASSESSEE FILED SOME ADDITIONAL EVIDENCE. AO OBJECTED TO THE ADMISSION O F ADDITIONAL GROUND AS UNDER: THE CLAIM OF THE ASSESSEE IS UNFOUNDED FOR THE REA SONS THAT DEPARTMENT HAD PROVIDE AMPLE OPPORTUNITY TO THE ASS ESSEE COMPANY TO EXPLAIN THE CASE AND IN PARTICULARLY WIT H REGARD TO AGRICULTURAL INCOME. SECTION 143(2) IN ITSELF PROVI DES THE ASSESSEE TO PRODUCE SUCH BOOKS OF ACCOUNTS AND DOCU MENTS ON ITA 3982/DEL/09 KUBER CHAND SHARMA 4 WHICH HE HAS RELIED IN SUPPORT OF INCOME RETURNED B Y HIM. THE ONUS TO DRAG THE CASE IN FURNISHING EVIDENCE IN SUP PORT OR INCOME COMPLETELY ON THE ASSESSEE. IN THE END AO HA D TO DECIDE THE CASE AS PER MATERIAL AVAILABLE ON RECORD. REASO NABLE OPPORTUNITIES WERE GIVEN TO THE ASSESSEE. IF THE AS SESSEE FAILED TO FILE THE RELEVANT AND FULL EVIDENCE IN SUPPORT O F HIS CLAIM THEN IT IS THE MISTAKE OF THE ASSESSEE. THE ASSESSEE CAN NOT BENEFIT OUT OF THE NON-COMPLIANCE FOR WHICH IT WAS RESPONSIBLE. 2.3. CIT(A) ADMITTED THE SAME AND CALLED FOR AOS R EMAND REPORT. IN VIEW OF FACTS AND CIRCUMSTANCES ASSESSEES APPEAL WAS AL LOWED. AGGRIEVED REVENUE IS BEFORE US. 3. LEARNED DR CONTENDS THAT CIT(A) IN PARA 10 OF HI S ORDER HAS HIMSELF EXPRESSED THE SATISFACTION THAT SUFFICIENT OPPORTUN ITIES WERE PROVIDED BY AO TO THE ASSESSEE BY FOLLOWING OBSERVATIONS: 10. IT IS CLEAR FROM THE ABOVE THAT THE POWERS OF THE COMMISSIONER OF INCOME TAX (APPEALS) IS EXTREMELY L IMITED IN ADMITTING FRESH EVIDENCE. THE LEARNED ASSESSING OFF ICER IS CORRECT IN STATING THAT THE ONUS WAS ON THE ASSESSE E TO PRODUCE THE EVIDENCE. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS AS WOULD BE EVIDENT FROM THE PAPER BOO K DETAILED SUBMISSIONS WERE MADE BY THE ASSESSEE WITH REGARD TO THE TRANSACTION IN QUESTION. COPIES OF THE CORRESPONDEN CE ARE AVAILABLE AT PAGES 1 2-50 51-61 66-71 72-74 75 -85 86-87 88-89 ETC. OF THE PAPER BOOK. THUS IT IS EVIDENT T HAT THE ASSESSEE HAD REPEATEDLY BEEN GIVEN OPPORTUNITY TO E XPLAIN ITS CASE AND THAT THE ASSESSEE HAS ENGAGED IN PROTRACTE D CORRESPONDENCE WITH THE LEARNED ASSESSING OFFICER A ND HAD SUBMITTED THE DETAILS. THUS THE CONTENTION OF THE ASSESSEE THAT ADEQUATE OPPORTUNITY WAS NOT GIVEN IS INCORRECT. ITA 3982/DEL/09 KUBER CHAND SHARMA 5 3.1. DESPITE THESE OBSERVATIONS LD. CIT(A) IN LAST OF PARA 10 & 11 OF HIS ORDER ADMITTED THE ADDITIONAL EVIDENCE BY OBSERVIN G AS UNDER: .HOWEVER INSPITE OF INNUMERABLE CORRESPONDENCE W ITH THE LEARNED ASSESSING OFFICER WHERE EVIDENCES WERE PRO DUCED ANY QUERY WITH REGARD TO SUBMISSION OF USE OF LAND WAS NOT PUT ACROSS BY THE LEARNED ASSESSING OFFICER. IN OTHER W ORDS IT WOULD BE REASONABLE TO BELIEVE THAT THE ASSESSEE WA S UNDER THE BONA FIDE IMPRESSION THAT THE LEARNED ASSESSING OFF ICER WAS SATISFIED WITH THE SUBMISSIONS MADE BY HIM ALONG W ITH THE EVIDENCES. IT IS NOT A CASE WHERE A QUERY HAD BEEN RAISED BY THE LEARNED ASSESSING OFFICER TO PRODUCE THE RASTI DO CUMENTS AND THAT THE SAME HAD NOT BEEN SUBMITTED BY THE ASSESSE E. 11. THE DECISION IN HLS ASIA CASE AS REPRODUCED AB OVE SQUARELY APPLIES TO THE CASE IN HAND. A SUCH I AM ADMITTING THE FRESH EVIDENCE FILED BEFORE ME IN THE FORM OF FASH DOCUMENTS ISSUED BY THE TEHSILDAR FOR PURPOSES OF DISPOSAL O F THIS APPEAL. 3.2. LEARNED DR PLEADS THAT THE OBSERVATIONS GIVEN BY CIT(A) ABOUT ADEQUATE OPPORTUNITIES AND CONCLUSION ARRIVED AT BY THE CIT(A) ARE CONTRARY TO EACH OTHER. ONCE AO HAS ASKED THE ASSESSEE TO SU BMIT HIS EXPLANATION IT IS NOT INCUMBENT ON HIM TO REVERT BACK TO ASSESSEE INT IMATING ASSESSEE ABOUT INADEQUACY OF ITS EXPLANATION AND TO PROVIDE FURTHE R EVIDENCE. CIT(A) HAS PROCEEDED ON WRONG PREMISE TO ADMIT ADDITIONAL EVID ENCE. 3.3. IT IS FURTHER PLEADED THAT HONBLE DELHI HIGH COURT RECENTLY IN THE CASE OF CIT VS. MANISH BUILD WELL PVT. LTD. ( ITA N O. 928/2011 JUDGMENT DATED 4-11-2011) HAS HELD THAT IF AO OBJECTS TO TH E ADMISSION OF ADDITIONAL EVIDENCE THEN THE CIT(A) SHOULD GIVE CATEGORICAL F INDING IN TERMS OF RULE 46A FOR ADMISSION THEREOF. IN THIS CASE THE OBSERVA TIONS OF THE CIT(A) AND ITA 3982/DEL/09 KUBER CHAND SHARMA 6 THE FINDINGS ARE CONTRARY TO EACH OTHER. BESIDES NO CATEGORICAL FINDING IN TERMS OF RULE 46A AS MANDATED BY HONBLE DELHI HIG H COURT THEREFORE THE ORDER OF CIT(A) SHOULD BE REVERSED. 4. LEARNED COUNSEL FOR THE ASSESSEE ON THE OTHER H AND VEHEMENTLY ARGUES THAT CIT(A) FORWARDED ADDITIONAL EVIDENCE F ILED BY THE ASSESSEE TO AO FOR HIS REPORT. APART FROM OBJECTING TO THE ADMI SSION OF ADDITIONAL EVIDENCE AO HAS SUBMITTED REPORT ON MERIT ALSO. ON CE THE AO WAS SUPPLIED THE EVIDENCE DENIAL OF NATURAL JUSTICE TO HIM CANN OT BE ATTRIBUTED. THEREFORE THE PRINCIPLE OF NATURAL JUSTICE DID NOT STAND DENI ED TO AO. THEREFORE THE ORDER OF CIT(A) SHOULD NOT BE REVERSED ONLY ON THE POINT OF ADMISSION OF ADDITIONAL EVIDENCE. 5. LEARNED DR QUA THE ADDITIONAL EVIDENCE SUBMITTED THAT THE QUESTION OF PRINCIPLE OF NATURAL JUSTICE TO AO COME AFTER ADMIS SION OF ADDITIONAL EVIDENCE BY PROPER DISCHARGE OF STATUTORY FUNCTION ENVISAGED BY RULE 46A ON THE PART OF THE CIT(A) IN TERMS OF HONBLE DELHI HIGH COURT JUDGMENT IN THE CASE OF MANISH BUILD WELL PVT. LTD. (SUPRA) TH EREFORE THE ORDER OF CIT(A) ADMITTING THE EVIDENCE IS UNTENABLE. 6. LEARNED COUNSEL FOR THE ASSESSEE CONTENDS THAT I N THAT CASE THE MATTER MAY BE SET ASIDE AND RESTORED BACK TO THE FILE TO AO TO GIVE FRESH OPPORTUNITY TO THE ASSESSEE OF BEING HEARD. 7. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH THE ENTIRE MATERIAL AVAILABLE ON RECORD. IN OUR CONSIDERED VIEW CIT(A) HAS ADMITTED THE ADDITIONAL EVIDENCE WITHOUT FULFILLING THE CATEGORI CAL CONDITIONS LAID DOWN IN RULE 46A AS EXPLAINED BY HONBLE DELHI HIGH COURT IN THE CASE OF MANISH BUILD WELL PVT. LTD.(SUPRA). CONSEQUENTLY HIS ORDE R ON THIS ISSUE IS NOT ITA 3982/DEL/09 KUBER CHAND SHARMA 7 TENABLE HOWEVER THE ISSUE OF MERITS REMAINS. BESI DES FROM THE RECORD IT EMERGES THAT THE ASSESSEE WANTED TO FILE ONLY GOVER NMENT RECORDS AND REVENUE RECORD ABOUT CROPS. IN THE ENTIRETY OF FACT S AND CIRCUMSTANCES THE INTEREST OF JUSTICE WILL BE SERVED IF THE MATTER IS SET ASIDE RESTORED BACK TO THE FILE OF AO TO DECIDE THE SAME AFRESH AFTER AFFORDIN G THE ASSESSEE SUFFICIENT OPPORTUNITY OF BEING HEARD. IN VIEW OF THESE FACTS THE REVENUES APPEAL STANDS ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT REVENUES APPEAL STANDS ALLOWED F OR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 13-02-2012. SD/- SD/- ( B.C. MEENA ) ( R.P. TOLANI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 13-02-2012. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR ITA 3982/DEL/09 KUBER CHAND SHARMA 8