Subject: submissions assessee has furnished calculation for long term capital gains
Referred Sections:
section 148 of the I.T.Act
section 234B and 234C of the I.T. Act,
Section 50C of the I.T. Act,
section 147 of the I.T. Act
section 142(1) of the I.T. Act
section 144/147 of the I.T. Act
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH: `C+SMC', NEW DELHI
BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER
AND
SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER
ITA.No.594/Del/2018
Assessment Year 2007-2008
Shri Sabbal Ahmad,
Meerut. PAN ATXPS9543E
M/s. N.K. Chandna & Co. The Income Tax Officer,
Advocates, 120, Ram Nagar, vs. Ward-2(3),
Opp. State Bank of India, Gola
Kuan, Branch, Meerut, U.P. Meerut.
PIN 250 002.
Appellant Respondent
Assessee by : Shri Navin Kumar Garg, FCA
Revenue by : Shri Vijay Kumar Jiwani, Sr DR
Date of Hearing : 09.08.2018
Date of Pronouncement : 04.09.2018
ORDER
PER BHAVNESH SAINI, JM
This appeal by Assessee has been directed against
the Order of the Ld. CIT(A), Aligarh, Dated 30.10.2017, for the
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Meerut.
A.Y. 2007-2008, challenging the re-assessment proceedings
under section 148 of the I.T.Act because no notice under
section 148 has been received by assessee and that while
calculating the amount of capital gain, no benefit of cost of
improvement etc., was considered and challenged the levy of
interest under section 234B and 234C of the I.T. Act, 1961.
2. Briefly the facts of the case are that as per CIB
information received by the A.O, the assessee has sold
immovable property as per sale consideration of Rs.10 lakhs in
assessment year under appeal and stamp duty was paid at
Rs.12,18,000/-. Hence, there was a difference of
Rs.2,18,000/- appeared in both the valuations. Hence, to
assess the capital gain arising on sale of immovable property
as per provisions of Section 50C of the I.T. Act, proceedings
under section 147 of the I.T. Act have been initiated by issuing
notice under section 148 of the I.T. Act vide notice dated
27.03.2014, after obtaining necessary approval of Addl. CIT,
Range, Meerut. In compliance to the notice under section 148
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Meerut.
of the Act, neither any compliance has been made nor return
was filed by the assessee. Thereafter, notice under section
142(1) of the I.T. Act were issued on various dates, but, no
compliance was made. Since the assessment was going to be
time barred, therefore, A.O. passed the ex-parte assessment
order under section 144/147 of the I.T. Act on merits. The
A.O. noted that during the year under consideration assessee
has sold the residential plot situated at Z.H. Colony, Meerut
for a consideration of Rs.10 lakhs and stamp duty was paid on
the value at Rs.12,18,000/-, as per registered sale deed dated
26.12.2006. The A.O. taken the sale value as per 50C as
adopted by the Registration Authority in a sum of
Rs.12,18,000/- and reduced the indexed cost of acquisition for
Rs.2,99,987/- and computed the total long term capital gains
at Rs.9,18,013/-. The A.O. charged interest under section
234B and 234C of the I.T. Act.
3. The assessee challenged the assessment order
before the Ld. CIT(A). The Ld. CIT(A) called for the remand
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Meerut.
report from the A.O. on the written submissions filed by the
assessee. The assessee also filed rejoinder which is reproduced
in the appellate order.
3.1. The Ld. CIT(A) as regards initiation of proceedings
under section 148 of the I.T. Act, noted that assessee has
alleged that no notice under section 148 was received and
hence, assessee did not get adequate opportunity to explain
the facts. The Ld. CIT(A), however, noted that in the appellate
proceedings and remand proceedings adequate opportunity
have been provided, therefore, assessee should not have any
grievance and the same was accordingly dismissed.
4. The assessee further submitted before Ld. CIT(A)
that A.O. has not allowed the assessee cost of acquisition and
cost of improvement expenses totaling to Rs.10,74,842/-. The
Ld. CIT(A) noted that in the written submissions assessee has
furnished calculation for long term capital gains from which it
is apparent that assessee has no objection with regard to full
value of consideration determined in accordance with the
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Meerut.
provisions of Section 50C on the basis of circle rate. The only
dispute is with regard to determination of cost of acquisition
and cost of improvement. The assessee has claimed cost of
plot as per circle rate as on 01.01.1981 at Rs.57,801/- which
is the same as taken by the A.O. in the assessment order.
Therefore, there is no dispute with regard to this cost also.
Apart from the basic cost, assessee had claimed benefit of cost
of agricultural land wasted in development of roads etc. The
Ld. CIT(A), however, noted that the rights in the road etc.,
have not been transferred and hence, the cost of such roads
cannot be allowed towards the plots sold. The assessee
claimed development expenses of Rs.1,30,852/- for which no
evidence has been filed. The Ld. CIT(A) accordingly dismissed
this ground of appeal of assessee.
5. The assessee further claimed general exemption of
Rs.1 lakh while computing tax on assessed long term capital
gains. The Ld. CIT(A) allowed the same. As regards charging of
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Meerut.
the interest under section 234B and 234C of the I.T. Act, the
Ld. CIT(A) dismissed this ground of appeal of assessee.
6. We have heard the Learned Representatives of both
the parties and perused the material available on record and
the Orders of the authorities below. The appeal was fixed on
14.06.2018. On this date, Learned Counsel for the Assessee
made a request for adjournment to any date after atleast 15
days. On the request of Counsel for Assessee, appeal was
adjourned to 09.08.2018, meaning thereby, more than
sufficient time was given to assessee to argue the appeal.
However, on the date of hearing on 09.08.2018 Shri Navin
Kumar Garg, F.C.A. appeared for the assessee and made
further request for adjournment because the earlier Counsel
Shri N.K. Chandna, Advocate withdrew his Power of Attorney.
Considering the facts of the case and that sufficient
opportunity was already granted to assessee to argue the
appeal, the appeal was adjourned to 10.08.2018. Thereafter,
Learned Counsel for the Assessee, withdrew the request for
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Meerut.
adjournment and seek permission to argue the appeal.
Learned Counsel for the Assessee was, therefore, permitted to
argue the appeal on 09.08.2018, date of hearing already fixed.
6.1. Learned Counsel for the Assessee submitted that
the difference in the sale consideration as per Sale Deed and
circle rate was Rs.2,18,000/- only and that reopening have
been done on the basis of information received from CIB.
Therefore, reopening of the assessment is bad in law.
7. On the other hand, Ld. D.R. relied upon the orders
of the authorities below and submitted that assessee has not
filed return of income in response to notice under section 148,
therefore, cannot raise such an objection. A.O. as per material
on record rightly formed his opinion that income escaped
assessment, therefore, initiation of re-assessment proceedings
are as per law.
8. After considering the rival submissions, we are of
the view that there is no merit in the contention of Learned
Counsel for the Assessee. It is well settled law that validity of
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Meerut.
re-assessment proceedings shall have to be determined on the
basis of reasons recorded for reopening of the assessment. The
assessment year under appeal is 2007-2008 and more than 10
years have lapsed. The assessee did not care to file any return
of income in response to notice under section 148 of the I.T.
Act. The A.O. passed the ex-parte re-assessment order under
section 144/147 of the I.T. Act, dated 30.03.2015. The Ld.
CIT(A) noted in the impugned order that appeal was instituted
by assessee before him on 29.04.2015 i.e., within 30 days.
There is no question that notice under section 148 was not
served upon assessee at same address. The assessee did not
challenge the ex-parte re-assessment order before Ld. CIT(A).
The assessee did not challenge the findings of the A.O. that
assessee did not cooperate in re-assessment proceedings. The
assessee challenged the determination of the capital gains
without giving general exemption of Rs.1 lakh which is already
allowed by the Ld. CIT(A). The assessee in another ground of
appeal, challenged the assessment order because assessee
was not given opportunity before issue of notice under section
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Meerut.
148 of the I.T. Act. There is no law to give opportunity to hear
the assessee before issuing notice under section 148 of the I.T.
Act. The assessee has not filed even copy of the reasons
recorded for reopening of the assessment in the matter.
Therefore, the validity of re-assessment proceedings could not
be determined in the absence of the reasons provided by the
assessee. The assessee has a right to ask for copy of the
reasons on filing the return of income under section 148 of the
I.T. Act. However, assessee has not exercised such an option
because no return under section 148 have been filed. The facts
of the case noted in the assessment order shows that A.O. was
having credible information that assessee sold the property for
Rs.10 lakhs and for stamp duty purpose it is valued at
Rs.12,18,000/-. Therefore, the capital gain shall have to be
calculated on sale of immovable property as per provisions of
Section 50C of the I.T. Act. Thus, there were sufficient tangible
material available with the A.O. on record to initiate re-
assessment proceedings against the assessee because
assessee has not declared capital gains for the purpose of
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Meerut.
taxation on sale of the property. It may also be noted here that
before Ld. CIT(A) assessee has raised a different ground of
appeal but in the ground of appeal before Tribunal, assessee
challenged the order of the A.O. on the ground that no notice
under section 148 was received by the assessee. However, no
evidence have been produced in respect of such ground of
appeal and even Learned Counsel for the Assessee did not
argue on the same. Considering the totality of the facts and
circumstances of the case, it is clear that reopening of the
assessment is justified in the facts and circumstances of the
case. This ground of appeal of Assessee is dismissed.
9. On the remaining grounds of calculation of capital
gains and charging of interest under section 234B and 234C of
the I.T. Act, Learned Counsel for the Assessee did not argue
these grounds. Since these grounds have not been argued by
the Learned Counsel for the Assessee, therefore, there is no
need to give detailed findings on the same. However, we may
briefly note that there were no dispute with regard to indexed
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Meerut.
cost of acquisition because whatever figure A.O. has taken,
was accepted by the assessee before Ld. CIT(A) as well. The
assessee further made a claim of benefit of cost of agricultural
land wasted in development of roads etc. The Ld. CIT(A) rightly
noted that since the rights in the roads etc., have not been
transferred, therefore, the cost of such roads cannot be
allowed towards the plot sold. No evidence of development
expenses are filed. Learned Counsel for the Assessee did not
argue against the finding of Ld. CIT(A). It appears assessee
does not want to pay tax on capital gain. Therefore, in the
absence of any challenge to the findings of the Ld. CIT(A), both
the grounds of appeals of the assessee are dismissed. No other
point is argued or pressed.
10. In the result, appeal of Assessee is dismissed.
Order pronounced in the open court.
Sd/- Sd/-
(PRASHANT MAHARISHI) (BHAVNESH SAINI)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Delhi, Dated 04 September, 2018
th
VBP/-
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Meerut.
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT C+SMC Bench, Delhi
6. Guard File
//By Order//
Asst. Registrar : ITAT : New Delhi.
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