Shri Radhey Shyam Arora Vs. Income Tax Officer (ITAT Jaipur)
It is apparent that the assessee did not disclose the transaction of sale of house and the AO completed the assessment by making the addition on account of cash deposit in the bank account of the assessee. Before the ld. CIT(A) the assessee claimed the benefit of section 54 on account of investment made in purchase of new house. The ld. CIT(A) denied the claim of the assessee on the ground that the new house was purchase in the name of his wife. At the same time, the ld. CIT(A) has observed that the entire sale consideration will be assessed as capital gain.
When the entire investment for the purchase of new house has gone through the assessee’s account then the benefit u/s 54 of the Income Tax Act cannot be denied on the ground the new house was purchased in the name of wife. Hence, the claim of the assessee u/s 54 of the Income Tax Act is allowed.
FULL TEXT OF THE ITAT ORDER IS AS FOLLOWS:-
This appeal by the assessee is directed against the order dated 22.06.2016 of ld. CIT(A), Jaipur for the A.Y. 2008-09.
2. There is delay of 209 days in filing the present appeal the assessee has filed a petition for condonation of delay which has been supported by the affidavit.
3. I have heard the ld. AR as well as ld. DR and considered the explanation of the assessee as stated in the affidavit for delay in filing the appeal. The ld. DR has vehemently opposed to the condonation of delay. Having perused the contents of the affidavit it is noted that the assessee has explained the cause of delay that the assessee has duly signed the appeal papers on 17.08.2016 and also paid the appeal fee on the same day and therefore, the assessee took all the steps within the period of limitation to file the appeal against the impugned order. However, due to inadvertence and over sight on the part of the Chartered Accountant of the assessee namely Sh. H.M. Singhvi, the appeal could not be filed in time. The assessee has also filed an affidavit of Sh. H.M. Singhvi (C.A.) an authorized representative of the assessee wherein he has stated that due to over sight and inadvertence the appeal papers remained in the office and could not be filed in the registry of this Tribunal. Thus, the assessee has explained that it is a banafide and inadvertent mistake on the part of the authorized representative of the assessee who could not filed the present appeal within the period of limitation. I find that the appeal fee was paid on 17.08.2016 and this fact has not been disputed by the Revenue. Therefore, when the authorized representative of the assessee in his affidavit has accepted the bonafide mistake and oversight for not filing the appeal within the period of limitation despite the appeal was ready and fee was paid in time then it would be a reasonable cause for not presenting this appeal within the period of limitation.
Having regards to the facts and circumstances of the case that the assessee took the requisite steps to file the appeal in time and also deposited the appeal fee I am satisfied that the assessee had a reasonable cause for not presenting the present appeal in time. Accordingly, the delay of 209 days in filing the present appeal is condoned.
4. The assessee has raised the following grounds:-
“1. That the Learned CIT(A) erred in certainning the action for imitation of proceedings u/s 147 by A.O in order.
2. Whether on the facts and circumstances of the case the Learned CIT(A) was justified in confirming the assessment made u/s 144?
3. Whether on the facts and circumstances of the case the Learned CIT(A) was justified in confirming the addition of Rs. 2054500/- made by AO u/s 69A?
4. The Learned CIT(A) has erred in over looking and summarily rejected the detailed submission along with affidavit, documents and evidence placed on record and the various orders of ITAT, Jaipur and judgments of High Court.”
The assessee has also raised the additional grounds which reads as under:-
“1. That the CIT(A) has made enhancement not allowing the benefit u/s 54 thereby directing the AO to charging long term capital gain of Rs. 6202310/- on sale of the house without giving any notice for enhancement.
2. That the Learned CIT(A) was wrong in not allowing the benefit u/s 54 for purchase of house at Deli in the name of the wife Smt. Radha Rani out ofthe capitalgain on the sale of residential house at Grater Kailash Colony, Jaipur.”
5. Ground No. 1 is regarding validity of reopening of assessment u/s 147/148. The assessee is a retired government employee and filed its return of income on 3 1.07.2008 which was processed u/s 143(1) of the Act declaring total income of Rs. 1,07,840/- from pension, interest income after claiming the deduction u/s 80C & 80H. Subsequently on the basis of a letter received from ITO, Ward -6(1) on 25.04.2011 regarding the cash deposit of Rs. 20,54,500/- in the bank account of the assessee the AO proposed to reopen the assessment of the assesee by issuing a notice u/s 148 on 02.06.2011. The AO completed the reassessment u/s 144 r.w.s. 147 of the Act by making an addition u/s 69A of the Income Tax Act of Rs. 20,54,500/-. The assessee challenged the action of the AO before the ld. CIT(A) and raised objection of validity of initiation of proceedings u/s 147 could not succeed.
6. Before the Tribunal, the ld. AR of the assessee has submitted that the Assessing Officer has reopened the assessment without reaching to the conclusion of the cash deposit in the bank account represents the income of the assessee escaped assessment. The Assessing Officer at the time of initiation of proceedings u/s 147 of the I.T. Act must have reasons to believe that any income chargeable to tax has escaped assessment. Thus, the AO was wrong in treating the total cash deposits as income u/s 69A of the Act. Hence, the initiation of proceedings u/s 147 was illegal and bad in law. In support of his contention he has relied upon the decision of Hon’ble Delhi High Court in case of United Electrical Co. (P) Ltd. v. CIT 178 CTR 192 and submitted that the Hon’ble High Court has held that existence of tangible material for the formation of opinion is pre- requite for initiation of action u/s 147 of the Act. There should be facts before the AO that reasonably give rise to the belief, but the facts on the basis of which he entertain the belief need not at this stage be tentative conclusion. The material before the AO must have rational connection or relevant bearing to the formation of the belief. The ld. AR has further submitted that the AO cannot make a fishing or rowing inquiry into the whole question as to how the income was generated chargeable to tax has escaped assessment. The reasons recorded for reopening of assessment did not make out of a case that the assessee was engaged in some business and income from such business has not been returned by the assessee which represents the cash deposits in the bank account. The Source of deposits need not necessarily be income of the assessee, therefore, the reassessment proceedings cannot be resorted with a purpose to examine the facts unless there was a reason to belief rather than suspect that income has escaped assessment. The ld. AR has relied upon the following decisions:–
Comments are closed.