Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2018 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (8) TMI 1765 - AT - Income TaxReopening of assessment - assessee failure to discharge onus to negate cogent evidence found in the form of Banakhat/agreement to sale (executed by the assessee along with other co-owners) as a futile and hollow document - basis of initiation of proceedings under s.147 is a Banakhat found in the course of search proceedings under s.132 in the case of a third party, namely, Rameshbhai B. Agrawal group - right course in the facts and circumstances, as argued, could probably be invocation of Section 153C - Held that:- The agreement to sale (Banakhat) and consequent final sale deed, in our considered opinion, provides sound basis for formation of belief towards escapement of income to a person instructed in law. The AO thus has acted within the bounds of law while exercising its power under s.147. Merely because a part of the total sale consideration fall in other assessment year, the action of the AO cannot be curtailed to deny the exchequer of its rightful dues. Notwithstanding, the technical defect of such nature can be cured under ss.150(1) & 153(6) of the Act as rightly observed on behalf of the Revenue. Thus, the first additional ground raised on behalf of the assessee is a damp squib. The additional ground on this score is thus dismissed. The scheme of Act does not suggest that mere search action revealing incrementing material against the person other than searched person would automatically oust the power of the AO over the assessee concerned under S. 147 of the Act. The overriding provisions of S. 153C merely enables the AO to set aside the pending reassessment proceedings and grants primacy to Section 153C of the Act. As noted earlier, exercise of power under S. 153C is governed without any stringent fetters of holding ‘reason to believe’ contemplated u/s 147. Therefore, while exercise of overriding power under S. 153C will render S. 147 otiose, the converse case of clipping the powers available under S. 147 in search cases per se is not found to be reconcilable to the scheme of the Act. In the light of scheme of the Act narrated above, we are of the view that the AO of the assessee (person other than searched person) cannot be compelled to pursue remedy necessarily under s.153C of the Act in exclusion to remedy available to the AO u/s 147. Thus, on this count also, the action of the AO under s.147 is within the four corners of law and not be faulted. In the instant case, where the onerous proceedings under s. 153C of the Act has not been invoked and could not possibly be invoked, there was no impediment for initiating proceedings under s.147 of the Act by the AO as discussed in elaboration above. Therefore, in Cargo Clearing Agency and other decisions of the co-ordinate bench cited on behalf of the assessee rendered on similar lines do not give rise to any conflict and are of no assistance to the assessee. Consequently, the second additional ground is also dismissed. On merits of addition we notice that the CIT(A) has found that Banakhat was notarized and duly signed by the assessee and the other parties. CIT(A) also observed that such Banakhats are typically prepared in the land transactions by the middlemen/investors and the lands are first acquired against consideration and thereafter arranged to be transferred directly from the owner to the actual buyer in the final deed to gain benefit of differential proceeds. The aforesaid narrative appears quite credible in the light of execution of Banakhat. It is for the assessee to demonstrate the circumstances for execution of Banakhat when the proposed seller was not the owner. The assessee is in audacious denial even on the face of tangible documentary evidence towards payment of ₹ 1,50,00,000/- in cash as mentioned in Banakhat. The assessee has also not declared any commission income flowing from such Banakhat, if any, as propounded. The Banakhat executed was not shown to have been eventually cancelled. Therefore, the entire story led on behalf of the assessee is a smoke screen with an intent to mislead the Revenue and deny it of its lawful taxes. Ostensibly, the assessee does not seek to come out with clean hands and wishes to play hide and seek. Hence, we find apparent plausibility in the reasoning given by the CIT(A). The inference drawn by the CIT(A) is not without legal foundation. The balance of probabilities are skewed against the assessee. The plea raised on behalf of the assessee appears marginal and peripheral when seen in totality - Decided against assessee.
|