Rameshbhai Rayjibhai Parmar Vs ITO (ITAT Ahmedabad)
In a case concerning reassessment proceedings for A.Y. 2015-16, the Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) considered appeals relating to both quantum addition and penalty proceedings under Section 271(1)(c) of the Income-tax Act. The Assessing Officer (AO) had reopened the assessment after receiving information that the assessee had sold immovable properties worth Rs.2,23,18,000 during the relevant year. The assessee had neither filed a return under Section 139 nor responded during proceedings under Section 148A.
During reassessment proceedings, the assessee stated that he was an agriculturist earning only exempt agricultural income. He contended that he had executed a power of attorney in favour of another person for conversion of agricultural land into non-agricultural land, but the attorney holder allegedly misused the authority and sold the properties without consent. The assessee claimed that sale consideration mentioned in the deeds was never received by him. He further submitted that legal proceedings had been initiated for cancellation of the sale deeds and that possession of the disputed properties continued with him.
The AO accepted the assessee’s explanation regarding two immovable properties sold for Rs.1.12 crore after noting that those transactions had already been annulled by the Revenue Department. However, with respect to three immovable properties allegedly sold for Rs.1,11,51,800, the AO observed that the assessee had failed to provide documentary evidence proving annulment of sale deeds, retention of possession, institution of legal proceedings, or non-receipt of sale consideration. Consequently, the AO treated the amount as taxable and made an addition of Rs.1,11,51,800.
