TMI Blog2018 (8) TMI 968X X X X Extracts X X X X X X X X Extracts X X X X ..... On the other hand, CIT(A) has made the assessee responsible to discharge its onus so as to justify the action of the AO to take recourse to the provisions of section 5(2)(a) or (b) of the Act. We, therefore fail to appreciate the stand taken by the first appellate authority who has acted in such lackadaisical manner and without any cogent document against the assessee while confirming the addition made by the AO. Order of additions set aside - Decided in favor of assessee. - I.T.A. No.1440/Ahd/2016 - - - Dated:- 8-8-2018 - SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND Ms. MADHUMITA ROY, JUDICIAL MEMBER For The Appellant : Shri S.N. Divatia And Shri Mehul Talera, ARs For The Respondent : Shri Keyur Patel, Sr. DR ORDER PER Ms. MADHUMITA ROY - JM: The instant appeal has been filed by the assessee before us against the order dated 30.02.2016 passed by the Commissioner of Income Tax(Appeals)-3, Ahmedabad [Ld.CIT(A) in short] for Assessment Year (AY) 2011-12 arising out of the order dated 20.03.2014 passed by the ITO, Ward-6(5), Ahmedabad. 2. The main grievance of the assessee is that against the order passed u/s.250 of the Income Tax Act, 1961 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal, the Ld. CIT(A) confirmed the order passed by the Ld. AO and hence the instant appeal. 5. The Advocate appearing for the assessee submitted before us that the assessee has executed the sale deed by virtue of Power of Attorney executed by the NRIs to act on their behalf. Neither the consideration amount of those transactions were credited in the account of the assessee. He further contended before us that the AO has not made any enquiry on the genuineness of the whereabouts of the NRIs in the address as mentioned in the sale deed as well as the POA. In the absence of any enquiry done by the authorities below as mentioned hereinabove to come to the finding that the sale consideration has ultimately received by the assessee the assessee cannot be made liable to pay tax on LTCG out of the transaction in question. Since the authority has failed to levy tax on the capital gain accrued to the vendors additions made on the assessee is arbitrary and erroneous and thus liable to be set aside. 5.1. On the other hand, the Ld. Representative of the revenue supported the orders passed by the authorities below. 6. We have heard the Representatives of the respective parties. We ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the assessee before the Ld. AO during the assessment proceedings. It appears from those documents that nowhere it is mentioned the assessee is the real owner of the property or the consideration money has been received by the assessee. It is clearly evident that those properties are not belonged to the assessee and therefore capital gain arising from those properties cannot be taxed in the hands of the assessee solely on the ground that the person being the real owners have not filed their income-tax returns. The earlier purchase agreement of Plot No.10 dated 18.04.2007 of a consideration of ₹ 4,07,000/- speaks of the name of Shri Arvindbhai Ambalal Patel at page-2 of the said agreement as the purchaser of the said property. Similarly, at page No.2 of the purchase agreement of Plot No.6 dated 18.04.2007 of a consideration of ₹ 3,35,400/- speaks of Shri Bhikhabhai Dahyabhai Patel as purchaser of the said property. Therefore, it is evident from those two purchase deeds that it was not the assessee but Shri Arvindbhai Ambalal Patel and Shri Bhikhabhai Dahyabhai Patel were the original owners of those two properties who subsequently sold the same out of which the LTCG ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... particularly mentioned that the assessee has failed to discharge its onus so as to enable the AO to take recourse to the provisions of section 5(2)(a) of the Act. There is nothing on record that the income arisen in India has been taxed in United States in terms of the other provisions of DTAA. He, thus, dismissed the appeal preferred by the assessee and confirmed the addition made by the AO. 8. With utter surprise we note that in spite of having the information about the residential address of those two NRIs in India, the AO had not taken any initiative to make an enquiry about the genuineness of the whereabouts of the said vendors with intend to impose tax on capital gain upon them. Instead of doing so, he has made the assessee liable for payment of tax by making addition of ₹ 38,65,755/- without any documents since he failed to make addition on the income of the vendors knowing fully well that the payments made by the purchasers have not been credited in the accounts of the assessee but in the NRIs. Neither any investigation has been conducted by the AO of the amount credited in the accounts of those two NRIs made by the purchasers. The genuineness of the receipt of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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