TMI Blog2011 (1) TMI 1412X X X X Extracts X X X X X X X X Extracts X X X X ..... action of AO in not reducing the conditional additional amount of ₹ 362.50 lacs added in the computation of income to cover any errors, omissions, discrepancies etc. made in reference to the all India survey action as detailed in the letter dtd. 12-12-2006 of the appellant, on failing to identify any such short comings in the annual audited accounts filed with the return of income. 2. Alternatively and without prejudice, if any of the amount of addition / disallowance is confirmed, the benefit of telescoping may be granted against the conditional additional amount added in the computation of income referred to herein above. 3. At the outset, Ld. Counsel for the assessee Sh. Tushar Hemani stated that this issue is squarely covered in favour of assessee in assessee s own case in ITA No.3762/Ahd/2008 vide order dated 17-04- 2009 for assessment year 2006-07 on exactly identical facts, wherein Tribunal held as under:- 11.We have heard the rival contentions and gone through the facts and circumstances of the case. We have also perused the case records including the assessment order as well as the order of CIT(A). We have also perused the assessee s paper book contain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erson on oath is specifically conferred on the authorized officer only under section 132(4) of the Income-tax Act in the course of any search or seizure. Thus, the Income-tax Act, whenever it thought fit and necessary to confer such power to examine a person on oath, the same has been expressly provided whereas section 133A does not empower any Income-tax Officer to examine any person on oath. Thus, in contradistinction to the power under section 133A, section 132(4) of the Income-tax enables the authorized officer to examine a person on oath and any statement made by such person during such examination can also be used in evidence under the Income-tax Act. On the other hand, whatever statement is recorded under section 133A of the Income-tax Act. it is not given any evidentiary value obviously for the reason that the officer is not authorized to administer oath and to take any sworn statement which alone has evidentiary value as contemplated under law. Therefore, there is much force in the argument of leaned counsel for the appellant that the statement elicited during the survey operation has no evidentiary value and the Income-tax Officer was well aware of this. Similarly, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion advance tax or self-assessment tax which is in excess of his liability on the basis of the return furnished or there is any arithmetical error or inaccuracy, it is open to him to claim refund of the excess tax paid in the course of the assessment proceeding. He can certainly make such a claim also before the concerned authority calculating the refund. Similarly, if he has by mistake or inadvertence or on account of ignorance, included in his income any amount which is exempted from payment of income-tax, or is not income within the contemplation of law, he may likewise bring this to the notice of the assessing authority, which if satisfied, may grant him relief and refund the tax paid in excess, if any. Such matters can be brought to the notice of the concerned authority in a case when refund is due and payable, and the authority concerned, on being satisfied, shall grant appropriate relief. In cases governed by section 240 of the Act, an obligation is cast upon the Revenue to refund the amount to the assessee without his having to make any claim in that behalf. In appropriate cases therefore, it is open to the assessee to bring facts to the notice of the concerned authority o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant was not entitled to raise the issue which was not the subject matter of adjustment and that the subject question to be raised in the appeal did not arise from the order passed by the AO. The CIT(A) further held that on the pretext of challenging the levy of interest under section 234 of the Act, the other issues on merits could not be allowed to be raised at appellate stage. He, thus, refused to entertain the ground of taxability of capital gains in respect of an assessment completed under section 143 (1)((a) of the Act. In the result, the appeal was dismissed. And on these facts, the Hon'ble Bombay High Court held as under:- 25. Having heard both parties, two points of view arise before us with the support of the various cases decided by this Court as well as various other High Courts. The question at issue is regarding right of appeal. It is true that there is no inherent right or appeal to any Assessee and it has to be spelt out from the words of the statute, if any, proving for an appeal. But it is an equally well settled proposition of law that, if there is a provision conferring a right of appeal, it should be read in a reasonable, practical and libera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n and word by word. True meaning of a provision of law has to be determined on the basis of the clear language with due regard to the scheme of the law. No words shall be added, altered or modified unless it becomes necessary to do so to prevent the provision becoming unintelligible, absurd, unreasonable, unworkable or totally irreconcilable with the rest of the statute. 30. It is a presumption of interpretation of statute that the legislature inserted every word and expression in the statute for a definite purpose, and while interpreting a statute no word can be rejected as being inapposite or surplusage (Mithilesh Singh vs. Union of India (AIR 2003 SC 1145). Where the language of the statute is clear and unambiguous nothing can be read into it by implication and the intention of the legislature has to be gathered from the language used. (Dayal Singh vs. Union of India) AIR 2003 SC 1140). 31. Having said so, we must observe that the Apex Court and the various High Courts have ruled that the authorities under the Act are under an obligation to act in accordance with law. Tax can be collected only as provided under the Act. If any assessee, under a mistake, misconceptions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT (1991) 187 ITR 688 (SC) observed as under:- An appellant authority has all the powers which the original authority may have in deciding the question before it subject to the restrictions or limitations, if any, prescribed by the statutory provisions. In the absence of any statutory provision, the appellate authority is vested with all the plenary powers which the subordinate authority may have in the matter. There is no good reason to justify curtailment of the power of the Appellate Assistant Commissioner in entertaining an additional ground raised by the assessee in seeking modification of the order of assessment passed by the Income-tax Officer. This Court further observed that there may be several factors justifying the raising of a new plea in an appeal and each case has to be considered on its own facts. The Appellate Assistant Commissioner must be satisfied that the ground raised was bona fide and that the same could not have been raised earlier for good reasons. The Appellate Assistant Commissioner should exercise his discretion in permitting or not permitting the assessee to raise an additional ground in accordance with law and reason. The same observations woul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y retracted the voluntary disclosure during the course of assessment proceedings vide letter dated 29 th February and 17 th March, 2008. The Hon'ble Apex Court in the case of Shelly Products (supra) has very categorically recorded a finding that, similarly, if he has by mistake or inadvertence or on account of ignorance, included in his income any amount which is exempted from payment of incometax, or is not income within the contemplation of law, he my likewise bring this to the notice of the assessing authority, which if satisfied, may grant him relief and refund the tax paid in excess, if any. Such matters can be brought to the notice of the concerned authority in a case when refund is due and payable, and the authority concerned, on being satisfied, shall grant appropriate relief. In the present case also the assessee has specifically required the Assessing officer and the CIT(A), during the course of proceedings before the respective authorities, that there is no unaccounted or undisclosed income found during the course of survey or from the impounded material and the surrender was subject to the condition that the disclosure is made to cover any errors, omissions, d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3A of the Act. There is no iota of evidence, which suggest that there is unaccounted / undisclosed income emerging out of the incriminating documents impounded during the course of survey. There is nothing on record which could co-relate such additional income / disclosure offered by the assessee-company during the course of survey with any other discrepancy. On these facts and circumstances, we allow the claim of the assessee. 16. The facts being exactly identical in ITA No.3762/Ahd/2008 in the case of Sarjan Realities Limited, (except the quantum) taking a consistent view, we allow the claim of the assessee in this appeal also. On the other hand, the Ld SR-DR fairly conceded the position that this issue is squarely covered by the Tribunal s decision cited (supra) but the Revenue has preferred appeal before Hon ble jurisdictional High Court and the matter is pending. 4. We have heard rival contentions and gone through the facts and circumstances of the case. We find from the orders of the lower authorities that this issue has already been adjudicated, exactly on similar facts in assessee s own case in assessment year 2006-07 and part of disclosure falls in this as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ismissed by a speaking order and while doing so the Supreme Court had noticed the fact that the matter in appeal before it pertains to a period prior to the amendment brought about in s. 43B of the Act. The aforesaid position as regards the state of the law for a period prior to the amendment to s. 43B has been noticed by a Division Bench of this Court in Dharmendra Sharma (supra). Applying the ratio of the decision of the Supreme Court in Vinay Cement (supra) a Division Bench of this Court dismissed the appeals of the Revenue. In the passing we may also note that a Division Bench of the Madras High Court in the case of CIT vs. Nexus Computer (P) Ltd. by a judgment dt. 19 th Aug., 2008, passed in Tax Case (Appeal) No.1192/2008 [reported at (2008) 219 CTR (Mad.) 54 Ed.] discussed the impact of both the dismissal of the special leave petition in the case of George Williamson (Assam) Ltd. (supra) and Vinay Cement (supra) as well as a contrary view of the Division Bench of its own Court in Synergy Financial Exchange (supra). The Division Bench of the Madras High Court has explained the effect of the dismissal of a special leave petition by a speaking order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the decision of Hon'ble Apex Court in the case of Vinay Cement (supra) and also distinguished the case law referred by the Ld. DR of Bombay High Court in Pamwi Tissues Ltd. (supra) . Accordingly, following Delhi High Court in P.M. Electronics Ltd. (supra), we allow the claim of the assessee. Accordingly this issue of the Revenue s appeal is dismissed. 9. The next issue in this appeal of Revenue is against the order of CIT(A) in deleting the disallowance of ₹ 57.04 lakh made by Assessing Officer on account of land survey expenditure. For this, Revenue has raised the following ground No.2:- 2. The ld. Commissioner of Income-tax (A)-XIV, Ahmedabad has erred in law and on facts in deleting the disallowance of ₹ 57,04,000/- on account of Land Survey expenditure. 10. At the outset Ld. Counsel for the assessee stated that this issue is squarely covered in favour of assessee by the decision of the jurisdictional High Court in tax appeal No.703 of 2009 dated 02-08-2009 in the case of CIT v. Sarjana Realities Ltd. i.e. in assessee s own case, wherein the Hon ble jurisdictional High Court has held that, whether expenses incurred on survey of suitable land ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or setting up windmills. The lands purchased by the assessee form part of its stock in trade. For the purpose of deciding the suitability of the land for the purpose of windmill, the survey is conducted. In the circumstances, considering the nature of the assessee s business, conducting survey of the land for the purpose of deciding its suitability is an integral part of its Business and as such has rightly been held to be a revenue expenditure. 11. We find that Ld. Counsel for the assessee contended that the land purchase was part of its stock-in-trade and was reflected as such in the books of account. The expenditure incurred for survey of land to determine the suitability was therefore the revenue expenditure as the same relates to purchase of land which was part of the stock-in-trade. Accordingly, we are of the view that issue is squarely covered in favour of assessee by the decision of Hon ble jurisdictional High Court in assessee s own case (supra). Respectfully following the same, we uphold the order of CIT(A) and this issue of Revenue s appeal is dismissed. 12. The next issue in this appeal of Revenue is against the order of CIT(A) in deleting the addition of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt and the addition made on this count is deleted. Aggrieved, Revenue came in appeal before the Tribunal. 14. We find that this issue is squarely covered in favour of the assessee and against the Revenue on the given facts, that the provisions of Section 50C of the Act will apply to seller only and not to the purchaser. Here, in the present case, the assessee is a purchaser . This issue has been decided by this Tribunal consistently has held in the case of M/s.Jalaram Co. v. ITO Ward-2 Navsari in ITA No.3964/Ahd/2008 vide order dated 24-07-2009 for assessment year 2005-06, wherein the Tribunal held in para-7 8:- 7. In the present case, section 50C creates a legal fiction for taxing capital gains in the hands of the seller and it cannot be extended for taxing the difference between apparent consideration and valuation done by Stamp Valuation Authorities as undisclosed investment u/s.69. In fact, section 69 itself is a legal fiction whereby investment into an asset is treated as income if it is not disclosed in the regular books of account. No further legal fiction from elsewhere in the statute can be borrowed to extend the field of section 69. It is for the legis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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