TMI Blog2018 (7) TMI 1398X X X X Extracts X X X X X X X X Extracts X X X X ..... ney is payable under the Act and includes every person in respect of whom any proceedings under this Act has been taken for the assessment of his income. In our view, the appellant clearly falls in the definition of an assessee as so defined and the contention so raised is clearly devoid of any merits and is hereby rejected. In the result, the additional ground of appeal is hereby dismissed and the assumption of jurisdiction by the AO u/s 147 of the Act is held to be valid. Addition on account of unexplained deposits - Held that:- The assessee’s explanation in this regard is that there were advances received towards the sale of land totalling to ₹ 18,00,000 which were deposited in his bank account and the said sale transactions were subsequently cancelled and the said amount was refunded. In support, the assessee has submitted the affidavits of these persons, namely Sitaram, Ramprasad, Hanuman, Gopal and Bajrang Lal along with source of cash available with these persons. The Revenue has not disputed the receipt and refund of money to these persons. Further, where there is no further enquiry conducted by the AO calling for these persons and examining the contents of these a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T(A) that certificate of Gram Panchayat cannot take precedence over the report of the Tehsildar who is the appropriate land revenue authority to assess the nature and location of the land. In the result, we donot find any infirmity in the order of the ld CIT(A) Reopening of assessment - for A.Y 2007-08 - Held that:- If we look at the definition of “assessee” as defined in section 2(7), it talks about a person by whom any tax or any other sum of money is payable under the Act and includes every person in respect of whom any proceedings under this Act has been taken for the assessment of his income. In our view, the appellant clearly falls in the definition of an “assessee” as so defined and the contention so raised is clearly devoid of any merits and is hereby rejected. Regarding contention of the ld AR that no sanction was taken by the AO from the appropriate authority u/s 151 before issuance of notice under section 148, during the course of hearing, the assessment records were called for and it was noted that the approval u/s 151 is duly placed on record. Hence, the said contention has been duly addressed and doesn’t support the case of the assessee. In the result, the groun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st the respective orders of the ld CIT(A) Alwar for A.Y 2006-07, A.Y 2007-08 and A.Y 2008-09 respectively. All these appeals were heard together and are being disposed off by this consolidated order. 2. Firstly, we shall take up appeal in ITA No. 751/JP/2015 for A.Y 2006-07 against the order of the ld CIT(A)- 3, Jaipur dated 31.08.2015 wherein the assessee has taken the following grounds of appeal:- 1. In the facts and circumstances of the case and in law, the ld. CIT(A) has erred in confirming the action of the ld. AO in making addition of ₹ 12,93,175/- towards alleged unexplained deposits in the bank account of the assessee. The action of ld. CIT(A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by deleting the said addition of ₹ 12,93,175/-. 2. In the facts and circumstances of the case and in law, the ld. CIT(A) has erred in confirming the action of ld. AO in making addition of ₹ 1,59,32,450/- although having decided that the entire transaction of alleged sale of land do not pertain to the AY 2006-07 and pertain to the AY 2007-08. 3. (a) In the facts and circumstances of the case and in law, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lied on the facts as already available on record. It was submitted that the omission to raise this legal ground while filing the appeal before the Tribunal was inadvertent. In support, the assessee has drawn reliance on the decision of Hon ble Supreme Court in case of NTPC Ltd. [1998] 229 ITR 383 (SC). Further, the ld. AR submitted that the above ground was taken by the assessee before the ld. CIT(A) and even though this ground was not pressed before the ld. CIT(A), the assessee is not precluded from taking the said legal ground before the Tribunal. In support, reliance was placed on the decision of Hon ble Punjab and Haryana High Court in the case of Vijay Kumar Jain v. CIT [1975] 99 ITR 349 wherein it was held that by giving up the ground, the assessee could not confirm jurisdiction on the Income Tax Officer where he had none and it was further held in that case that the Tribunal was bound to hear the appeal of the assessee and could not reject the appeal on the ground that certain grounds were not agitated before the appellate ACIT and thus could not be permitted to be agitated before the Tribunal. 5. We find that the additional ground of appeal which has been taken by the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e a patent error as stated above and the ld. JCIT has also granted the sanction to the AO u/s 151 and the only inference which can be drawn is that ld. JCIT has not seen the underlying document on the basis of which reasons are recorded. It was submitted that where he would have seen the sale deed, he would never have granted the sanction for reopening the case of AY 2006-07 as it is very evident that sale took place in AY 2007-08 and it was submitted that the basic requirement of invoking the provisions of section 147 is not complied with and the safeguards were treated lightly by ld. AO as well as ld. JCIT and, therefore, the reopening is bad in law and lacks jurisdiction. In support, reliance was placed on the decision of Supreme Court in the case of Chhugamal Rajpal v. S.P. Chaliha [1971] 79 ITR 603 (SC). Further reliance was placed on the decision of Bombay High Court in the case of Smt. Kalpana Shantilal Haria vs. ACIT. It was further submitted by the AR that in terms of provisions of section 148 of the Act, the impugned notice can be issued only to the assessee and if we analysed the definition of the term assessee as defined in section 2(7) of the Act, the appellant does ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 63,04,000/- 142, 143, Tehsil- W/o Kaluram 144, 147 Sanganer, 148- 1.97 Jaipur hectares- village Goner The location of the lands sold is at village Goner, which is situated within 8 Kms. of municipal limits. Thus, the lands sold by the assessee falls within the ambit of the definition of capital asset in terms of provisions of section 2(14) of the Income Tax Act, 1961 and accordingly, the capital gain arising on sale of these lands is chargeable to tax. Considering the amount of sale consideration, the capital gain chargeable to tax in the hands of the assessee is more than the maximum amount not chargeable to tax and exceeding ₹ 1,00,000/-. Besides, during the year, the assessee has deposited a sum of ₹ 22,55,000/- in his bank account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ciency of material is not relevant for determining assumption of jurisdiction under section 147 so long as there is nexus between the material and the formation of belief. The formation of belief has to be based on prima facie reading and appreciation of the material available on record which in this case is the registered sale deeds which have been executed by the assessee. On a prima facie reading of such sale deeds, it is apparent that the sale deeds have been executed and registered with the stamp authorities on 12.01.2007 and therefore, any escapement of capital gains on such sale transaction shall fall in financial year 2006-07 relevant to Assessment Year 2007-08 and not Assessment Year 2006-07. We are, therefore, of the view that as far as the first ground for reopening the assessment proceedings is concerned, there is lack of nexus between the material and the formation of prima facie belief that the income has escaped taxation for the impunged assessment year. The decision of the Hon ble Allahabad High Court in case of Dr Ajay Prakash (supra) where it was held that where the entries are dated 29.08.1998, reopening of assessment proceedings for AY 1998-99 are clearly invali ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... numan, Gopal and Bajrang Lal from whom advance of Rs. 18,00,000/- was received by the assessee, were provided during the appellate proceedings. It was submitted that the affidavits were further substantiated by providing source of cash available with these persons. It was submitted that both the lower authorities have not disputed the contents of the affidavits and therefore have accepted the same. It was submitted that the assessee belongs to a rural and illiterate background and was, therefore, not aware that any agreement has to be executed for proposed sale. It is worth mentioning that even today, in rural areas, by way of mutual understanding and verbal agreements, many proposed transactions take place and it was submitted that since no agreement was executed, the same could not be produced and by giving affidavits, the assessee has made reasonable compliance and duly discharged his onus. It was further submitted that in the affidavits so submitted, the address of the persons were also clearly mentioned and the authorities in their wisdom did not exercise their powers to enforce attendance of the said persons and where there were any doubt about the transactions, summ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... received as sale consideration towards sale of land which has already been brought to capital gain tax by the Assessing officer and the remaining amount comes to ₹ 12,28,905 as against a figure of ₹ 12,93,175 which has been brought to tax as unexplained cash deposits by the AO. The assessee s explanation in this regard is that there were advances received towards the sale of land totalling to ₹ 18,00,000 which were deposited in his bank account and the said sale transactions were subsequently cancelled and the said amount was refunded. In support, the assessee has submitted the affidavits of these persons, namely Sitaram, Ramprasad, Hanuman, Gopal and Bajrang Lal along with source of cash available with these persons. The Revenue has not disputed the receipt and refund of money to these persons. Further, where there is no further enquiry conducted by the AO calling for these persons and examining the contents of these affidavits, it cannot be held that these affidavits were false or doesn t represent the correct state of affairs. In light of the same, we find that the assessee has provided the necessary explanation regarding the source of these deposits. Hence, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed adopted by the stamp valuation authority exceeds the fair market value of the property as on the date of transfer and in such a scenario, the matter has to be referred by the AO to the Valuation officer. The ld CIT(A) has returned a finding that from the perusal of material available on record, it is found that during the course of assessment proceedings, the assessee neither objected to the value determined by the sub-registrar nor had requested the AO for making reference to valuation officer. We have also gone through the material available on record and we donot find any such claim made by the assessee before the AO. Though there is no prescribed form or manner for making the claim, the trigger point for referring the matter to Valuation Officer is whether the assessee has made any such claim or objection raised before the AO and unless the same is made, the AO cannot invoke the provisions of section 50C(2) suo-moto. The AO has thus acted within four corners of law where he has brought to tax deemed sales consideration as per stamp duty authority under section 50C instead of actual sale consideration as so claimed by the assessee. In the result, ground no. 3(a) read with 3 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the sale of such land by holding the land as capital asset is confirmed. 18. The only grievance of the assessee is that he has not been granted a right to cross-examine the Tehsildar who has given the report about the exact location of the land. In our view, the Tehsildar is a Government official and where he has given a report and a copy of such report is made available to the assessee, the assessee has got all rights to examine such report and he can challenges the contents thereof. Where the assessee is ceased of such a report and doesn t point out any defect in such a report, he cannot say that his rights have been violated as he has not got a right to cross-examine the Tehsildar. Further, we agree with the findings of the ld CIT(A) that certificate of Gram Panchayat cannot take precedence over the report of the Tehsildar who is the appropriate land revenue authority to assess the nature and location of the land. In the result, we donot find any infirmity in the order of the ld CIT(A). The ground of assessee s appeal is therefore dismissed. 19. In the result, the appeal of the assessee is dismissed. 20. In his appeal (ITA No. 752/JP/2015) for A.Y 2007-08, the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Gain at ₹ 14,62,758/-. The action of the ld. CIT (A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by deleting the said addition of ₹ 14,62,758/-. (b) In the facts and circumstances of the case and in law, the Id.CIT(A) has erred in confirming the action of the ld. AO in applying the provisions of section 50C of the Income Tax Act, 1961 and adopting the sale consideration at ₹ 14,88,000/- against the declared sale consideration of ₹ 13,20,000/-. The action of the Id. CIT (A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by accepting the sale consideration at ₹ 13,20,000/- as evidenced by the alleged sale deed. (c) In the facts and circumstances of the case and in law, the ld. CIT(A) has erred in confirming the action of the Id. AO in taxing the capital gain amounting to ₹ 14,62,758/- arising out of sale of land. Since the land sold was the agricultural land, which is not a capital asset as per section 2(14) of the Income Tax Act, 1961. The action of the ld. CIT (A) is illegal, unjustified, arbitrary and against the facts of the case. Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion. It was submitted if he had read the reasons carefully, he would have at least noted the apparent discrepancy in the reasons recorded of considering escapement of ₹ 25,55,000/- instead of ₹ 16,50,000/-. It was submitted that the basic requirements of invoking the provisions of section 147 are not complied with and the safeguards were treated lightly by ld. AO as well as ld. JCIT and in support, the decision of the Hon ble Supreme Court in the case of Chhugamal Rajpal v. S.P. Chaliha [1971] 79ITR 603 (SC) and the decision of Bombay High Court in the case of Smt. Kalpana Shantilal Haria vs. ACIT was relied upon. It was further submitted that while carrying out file inspection, it was noted by AR that there is no copy of such approval which have been obtained u/s 151 before reopening the assessment and it was submitted that if the Bench deem fit, it may call the record to ascertain correct facts. In support, the reliance was placed on the decision of Hon ble Rajasthan High Court in case of Dhadda Exports vs. ITO [2015] 58 taxmann.com 176 (Rajasthan). It was further submitted that the appellant does not fall in the definition of the term assessee as defined in sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the latter figure of ₹ 25,55,000 is a clerifical and a copy/paste mistake by the AO which is curable under section 292B of the Act. 26. Further, we have gone through the contention regarding issuance of notice under section 148 to an assessee and not to any person and the fact that in the instant case, the appellant is not an assessee. If we look at the definition of assessee as defined in section 2(7), it talks about a person by whom any tax or any other sum of money is payable under the Act and includes every person in respect of whom any proceedings under this Act has been taken for the assessment of his income. In our view, the appellant clearly falls in the definition of an assessee as so defined and the contention so raised is clearly devoid of any merits and is hereby rejected. 27. Regarding contention of the ld AR that no sanction was taken by the AO from the appropriate authority u/s 151 before issuance of notice under section 148, during the course of hearing, the assessment records were called for and it was noted that the approval u/s 151 is duly placed on record. Hence, the said contention has been duly addressed and doesn t support the case of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the same issue in AY 2006-07 in Appeal No. 75/14-15, the addition of ₹ 3,80,000/- made in this year is upheld. 30. During the course of hearing, the ld. AR reiterated the submissions made before the ld. CIT(A) and the ld. DR relied on the findings of the lower authorities. 31. We have gone the rival contentions and the material available on record and we do not find there is any infirmity in the order of the ld. CIT(A) as the assessee has failed to explain the source of such deposits in his bank account and which has rightly been brought to tax by the AO. In the ground no. 2 of the assessee s appeal is hereby dismissed. 32. Regarding Ground No. 3, the facts of the case are that during the appellate proceeding for AY 2006-07, the ld. CIT(A) noticed that sale transactions entered into by the assessee with his two daughter-in-laws pertains to AY 2007-08 instead of AY 2006-07. The ld. CIT(A) thereafter, exercising the power of enhancement u/s 251(2)(a) enhanced the income by ₹ 1,62,72,000/- for impugned assessment year and correspondingly, she directed the deletion of the said addition of an equivalent amount in AY 2006-07. 33. In this regard, the ld. AR sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,72,000+23,57,148) whereas at the lower side of the para he has taken sale consideration of ₹ 14,88,000. 36. It was submitted that the complete assessment order does not even whisper about the sale of land for ₹ 1,62,72,000 and ₹ 23,57,148, thus, it is not known how AO has considered and discussed the same for calculating capital gains. In the above background, it is established beyond doubt that mere copy-paste error committed by ld. AO has been considered as discussion by ld. CIT (A). The argument of ld. CIT(A) that ld. AO discussed the transactions, however inadvertently, skipped to make addition is devoid of merits. If contention of ld. CIT(A) is accepted it will lead to a conclusion that ld. AO was intending to make additions in both the years which is not possible as same income cannot be brought to tax twice. 37. Our reference was drawn to the order of the ld. CIT (A) at page 35 of her order where it was held as under: Further, the action u/s 251 (1)(a) is also strengthened by the fact that the AO could have taken remedial action for which direction could be given u/s 150 (1) of IT Act. It was submitted that section 150 and section 251 are ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Joint Commissioner must be procured if the notice is issued after the lapse of the specified period mentioned in section 151 of the Act namely four years. 38. In view of the ratio as laid by Hon ble Allahabad High Court, the contention of ld. CIT (A) that action u/s 251 (1) (a) is also strengthened by the fact that the AO could have taken remedial action for which direction could be given u/s 150(1) of IT Act has no legal force. Ld. CIT(A) cannot by herself enhance the income when a separate machinery has been provided in law. In support, reliance was placed on the decision of the Hon ble Supreme Court in case of CIT vs. Shapoorji Pallonji Mistry [1962] 44 ITR 891 (SC) and it was submitted that the ratio laid down by the said decision of the Hon ble Supreme Court is clearly applicable in the instant case and which has not been appreciated by the ld CIT(A). 39. On merits, the ld AR raised various contentions as contained in the written submissions and the same are reproduced as under: I. Submissions made before ld. CIT (A) may please be considered in correct perspective. II. Before ld. CIT (A) it was conclusively established that the owner of the land Shri Jagdish Nar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eme Court judgment in the case of Mehta Parikh Co. vs CIT [1956] 30 ITR 181 (SC) [CLC 85-89], wherein it was held as under: The cash book of the appellants was accepted and the entries therein were not challenged. No further documents or vouchers in relation to those entries were called for, nor was the presence of the deponents of the three affidavits considered necessary by either party. The appellants took it that the affidavits of these parties were enough and neither the Appellate Assistant Commissioner, nor the Income-tax Officer, who was present at the hearing of the appeal before the Appellate Assistant Commissioner, considered it necessary to call for them in order to cross- examine them with reference to the statements made by them in their affidavits. Under these circumstances it was not open to the Revenue to challenge the correctness of the cash book entries or the statements made by those deponents in their affidavits [CLC 86] VII. Ld. CIT (A) has further erred in considering that since the sale deed is witnessed, it shall be presumed that witness has attested the contents of the instruments also. As submitted above the sale deed in the present case is a sham ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the provisions of the Income Tax Act are to be applied on the basis of substance and not the form assigned to the transaction or the way transaction is structured. The contention is further supported by the introduction of ICDS in the IT Act, 1961. Even if contention of ld. CIT(A) is considered then also ld. AO should have looked into the substance as the assessee by way of plethora of evidences already proved that apparent is not real. 41. Reliance is placed on the following judicial pronouncements: Hira Lal Ram Dayal v. Commissioner of Income Tax [1979] 2 Taxman 579 (Punj. Har.) Hira Lal Ram Dayal vs ITO [1983] 16 TTJ 300 (CHD.) Mrs. K. Atma Ram vs. Income Tax Officer [1987] 27 TTJ (Chd) 99 Smt. Chinimilli Venkata vs. ITO (I.T.A. No. 1923/HYD/2014 dated 02.09.2016) 42. The ld DR is heard who has vehemently argued the matter and relied on the findings of the ld CIT(A) and submitted that the ld CIT(A) was well within her jurisdiction to bring to tax the sale transactions in the impunged assessment year consequent to the relief given to the assessee for A.Y 2006- 07. It was submitted that the assessee cannot expect to get scot-free and donot pay tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... term capital gains from the sale of land to the daughter-in-law for ₹ 1,62,72,000/-, I have carefully considered the facts of this case and also submission of the appellant. The appellant contention that no enhancement could be made in this year cannot be accepted because the transaction of sale of this land has been discussed in the assessment order by the AO who inadvertently left out the addition of the long term capital gains arising from this transaction of sale. It is not the case where the enhancement was proposed for an issue not considered in the assessment order, thus proposal for the enhancement is justified. The AR cited the case of CIT vs. Shapoorji Pallonji Mistry [1962] 44 ITR 891 (SC) where it was held as under:- CIT (A) s power of enhancement is restricted only to income which was subject matter of consideration for purposes of assessment by ITO. However, as stated above, since the AO has mentioned in para 6 of his order for AY 2007-08 about the capital gain for sale of this land, this is not a new source of income not discussed by AO. Hence the above mentioned case is distinguishable and not applicable. Further, the action u/s 251(1)(a) is also st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The earliest case, which considered the meaning of section 31(3), was Jagarnath Therani v. Commissioner of Income-tax AIR 1925 Pat. 408 decided by the Patna High Court. In that case, the assessee had three businesses at Purnea, Jalpaiguri and Calcutta. His income from Purnea only was assessed by the Income-tax Officer. On appeal by the assessee, the Appellate Assistant Commissioner assessed him with regard to the income from the other two businesses. The head of income was the same within section 6 of the Income- tax Act, but the sources of income were different. The Patna High Court observed : Now this section relating to appeals is enacted for the benefit of the subject and also, to the limited extent therein stated, for the benefit of the Crown. But the subject-matter of the appeal is the assessment and the scope of the appeal must in my opinion be limited by the subject-matter. The appellate authority has no power to travel beyond the subject-matter of the assessment and, for all the reasons advanced by the appellant, is in my opinion not entitled to assess new sources of income. The view of the Patna High Court receives support from a decision of the Madras High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d a power of remand to include in the assessment something which ought to have been so included by the Income- tax Officer, and a remand in that case was, therefore, proper. The matter also came before this court in Commissioner of Income-tax v. McMillan Co. [1958] 33 ITR 182 (SC); but the question, with which we are concerned, was left open. There is, however, a passage in the judgment, approving of the observations of Chagla, C.J., in Narrondas Manordass v. Commissioner of Income-tax [1957] 31 ITR 909 to the following effect: It is clear that the Appellate Assistant Commissioner has been constituted a revising authority against the decisions of the Income-tax Officer; a revising authority not in the narrow sense of revising what is the subject-matter of the appeal, not in the sense of revising those matters about which the assessee makes a grievance, but a revising authority in the sense that once the appeal is before him he can revise not only the ultimate computation arrived at by the Income-tax Officer but he can revise every process which led to the ultimate computation or assessment. In other words, what he can revise is not merely the ultimate amount which is liabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation suggested by the Commissioner in preference to the one, which has held the field for nearly 37 years. In view of the provisions of sections 34 and 33B by which escaped income can be brought to tax, there is reason to think that the view expressed uniformly about the limits of the powers of the Appellate Assistant Commissioner to enhance the assessment has been accepted by the legislature as the true exposition of the words of the section. If it were not, one would expect that the legislature would have amended section 31 and specified the other intention in express words. The Income-tax Act was amended several times in the last 37 years, but no amendment of section 31(3) was undertaken to nullify the rulings, to which we have referred. In view of this, we do not think that we should interpret section 31 differently from what has been accepted in India as its true import, particularly as that view is also reasonably possible. 47. The Hon ble Rajasthan High Court in case of Commissioner of Income-tax vs. Associated Garments Makers reported in 64 Taxman 215, following the above decision of the Hon ble Supreme has held as under: 7. Appeals are provided under section 246 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses of enhancement. On the contrary, the case is clearly covered by the decisions of the Supreme Court in CIT v. Shapoorji Pallonji Mistry's case (supra) wherein it has been held that, In an appeal filed by the assessee the Appellate Assistant Commissioner has no power to enhance the assessment by discovering new sources of income not mentioned in the return of the assessee or considered by the Income-tax Officer in the order appealed against , and in the case of Rai Bahadur Hardutroy Motilal Chamaria (supra) wherein it has been held that, It is not therefore open to the Appellate Assistant Commissioner to travel outside the record, i.e., the return made by the assessee or the assessment order of the Income-tax Officer, with a view to finding out new sources of income and the power of enhancement under section 31(3) is restricted to the sources of income which have been the subject-matter of consideration by the Income-tax Officer from the point of view of taxability . Their Lordships considered the meaning of the word 'consideration' and held that, 'consideration' does not mean 'incidental' or 'collateral' examination of any matter by the In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [2017] 87 taxmann.com 330 (Kerala) had an occasion to examine a similar issue as to whether the Appellate Authority has the power under section 251 of the Act to add income not at all considered by the AO? Referring to the catena of decisions including the decisions of Hon ble Supreme Court in case of CIT vs Shapoorji Pallonji Mistry (supra) and in case of CIT v. Rai Bahadur Hardutory Motilal Chamaria [1967] 66 ITR 443 (SC), the decision of the Full Bench of the Hon ble Delhi High Court in case of CIT v. Sardari Lal Co. [2001] 251 ITR 864 (Delhi) (FB), besides various other decisions, it held that the powers under section 251 are, indeed, very wide; but, wide as they are, they do not go to the extent of displacing powers under, say, sections 147, 148 and 263. We deem it appropriate to reproduce the discussions and the relevant findings of the Hon ble High Court as under: The Ambit of Appellate Power: 37. To begin with, let us examine section 251 of the Act. As the assessment year was 1995-96, we will examine the provision as stood then. Before the amendment by Act 18 of 2008, section 251 read as: 251. Powers of the [* * *] Commissioner (Appeals).- (1) In disposing of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment. The Appellate Authority has, therefore, plenary powers in disposing of an appeal. The scope of his power is conterminous with that of the Income-tax Officer. He can do what the Income-tax Officer can do and also direct him to do what he has failed to do. 41. As we can see, CIT v. P. Mohanakala [2007] 291 ITR 278/161 Taxman 169 (SC) deals with the powers of High Court in interfering with the findings of fact- and concurrent findings, at that-by re-appreciating the evidence. The Supreme Court has held in the negative. The Supreme Court in Jute Corpn. of India Ltd. v. CIT [1991] 187 ITR 688/[1990] 53 Taxman 85 has stated that the declaration of law is clear that the power of the Appellate Authority is co-terminus with that of the Income Tax Officer, and if that is so, there appears to be no reason why the appellate authority cannot modify the assessment order on an additional ground even if not raised before the Income Tax Officer. No exception could be taken, held the Supreme Court in CIT v. Nirbheram Deluram [1997] 224 ITR 610/91 Taxman 181 to this view as the Act places no restriction or limitation on exercising appellate power. Even otherwise, an appellate authority wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e power of enhancement under section 31(3) of the Act is restricted to the subject-matter of assessment or the sources of income considered expressly or by clear implication by the Income-tax Officer from the viewpoint of the taxability of the assessee. 46. A question regarding powers of the first Appellate Authority came up for consideration before the Supreme Court recently in Nirbheram Daluram (supra). Following the earlier decisions in Kanpur Coal Syndicate and Jute Corporation of India, the Supreme Court reiterated that the appellate powers conferred on the Appellate Commissioner under Section 251 could not be confined to the matter considered by the ITO, as the Appellate Commissioner is vested with all the plenary powers which the Income Tax Officer may have while making the assessment. 47. Indeed, examining Daluram's holding, a Division Bench of the Delhi High Court in CIT v. Union Tyres [1999] 240 ITR 556/107 Taxman 447, has observed that Daluram did not comment whether these wide powers also include the power to discover a new source of income. So, Union Tyres concludes that the principle of law laid down in Shapoorji and Chamaria still holds the field. 48. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he High Court of Delhi in Sardari Lal. As a corollary, we hold that the Tribunal's deleting the enhancement of ₹ 22,15,116/- and canceling the order of the CIT (A) on that issue call for no interference. 50. The issue which is being disputed before us has to be considered and decided in light of facts on record and the legal proposition which emerges from the above referred decisions. In the instant case, the enhancement of income by the ld CIT(A) relates to long term capital gains on sale transactions executed through the registered sale deeds of even date i.e, 11.01.2007 whereby the assessee has sold certain plots of land at Village Goner, Tehsil Sanganer, Jaipur to his two daughters-in-law namely Narangi Devi w/o Chhaju lal and Jamna Devi w/o Kaluram for a total consideration of ₹ 1,62,72,000. Now, if we look at the return of income filed by the assessee, it is noted that pursuant to issuance of notice u/s 148, the assessee had filed his return of income disclosing agricultural income of ₹ 1,10,000/- and prior to that, no return of income was filed by the assessee. The notice issued under section 148 dated 15.03.2013 talks about an amount of ₹ 16, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tective basis in A.Y 2007-08. The ld CIT(A) while adjudicating the matter for A.Y. 2006-07 had determined that the said transaction pertains to A.Y 2007-08 and not to A.Y 2006-07 and has deleted the additions in A.Y. 2006-07 and brought the same to tax in the impunged A.Y 2007-08 by way of exercising her enhancement powers under section 251(1)(a) of the Act which is clearly beyond her powers. In light of the legal propositions so laid down by the Hon ble Supreme Court and other High Courts referred supra, the powers of the ld CIT(A) are circumscribed by the assessment order in the matters arising thereof or a matter arising out of the proceedings. As held by the Courts, even though, the ld CIT(A) has suo motu power to consider the questions arising thereof but there is no provision to go beyond the matter arising out of the proceedings before the Assessing officer, more particularly as separate provisions for such eventuality are provided in the Act. In light of the same, the enhancement so done by the ld CIT(A) whereby the impunged sale transactions are brought to tax in the year under consideration are beyond the scope of her powers envisaged under section 251(1)(a) and the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C(2) provides for such situation under which ld. AO is required to refer the matter to Valuation Officer. The said sub-section provides following two conditions: a) the assessee claims before any Assessing Officer that the value adopted or assessed or assessable by the stamp valuation authority under sub-section (1) exceeds the fair market value of the property as on the date of transfer; b) the value so adopted or assessed or assessable by the stamp valuation authority under sub-section (1) has not been disputed in any appeal or revision or no reference has been made before any other authority, court or the High Court. It was submitted that neither any specific manner nor any particular Form in Income Tax Rules is prescribed for requesting the AO to refer the matter to Valuation Officer. The basic condition is claiming before the AO that value adopted by Stamp Valuation Authorities exceeds the Fair Market Value at which the transaction of sale has taken place. Subsequent condition is that no appeal is filed under Stamp Duty Law. 56. It was submitted that the ld. CIT(A) has erred in holding that the assessee has not requested ld. AO for making reference to the valuati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any doubt on the certificate of Gram Panchayat should have issued summon u/s 131 or should have been issued which has not been done in the instant case. It was accordingly submitted that the addition made by the AO and confirmed by the ld. CIT(A) may be deleted. 61. In this regard, the finding of the ld. CIT(A) are contained at Para 3.3 which is reproduced as under:- 3.3 Regarding ground no. 3(a), 3(b) and 3(c): The appellant has raised two grounds, first that the subject land is an agricultural land and second that the provisions of section 50C are not applicable. Both the grounds raised are already decided against the appellant while deciding the assessee's appeal for AY 2006-07 in ITA No. 75/14-15. Since the facts of the case in the year under appeal are similar as existed in AY 2006-07 and the land under question is contiguous to the same land / located in the same area as the land which was sold in the preceding assessment year thus under these circumstances I am inclined to follow the observations made and the order passed in AY 2006-07-in ITA No. 75/14-15 supra and accordingly both the grounds raised by the appellant in this year are decided against the assessee a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act, the same being a purely legal ground and the same is admitted following the Hon ble Supreme Court s decision in case of NTPC (supra). 67. Now, coming to the merits of the additional ground of appeal, the ld. AR submitted that the notice u/s 148 can be issued only to assessee and in the instant case, the appellant does not fall in the category assessee as defined in section 2(7) of the Act. We have already examined the said contention and have not found the same acceptable in context of ITA No. 751/JP/2015 and our finding and directions contained therein shall apply with equal force in the present appeal. 68. It was further submitted by the ld AR that a request was made to carry out filing inspection of assessment records and on such inspection, it was noted that there is no copy of sanction obtained u/s 151 before reopening the assessment. In this regard, the ld AR submitted that if the Bench deem fit, it may call the record to ascertain correct facts. During the course of hearing, the assessment records were called and it was noted that the approval u/s 151 is duly placed on record. Hence, the said contention has been duly addressed and doesn t support the case of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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