TMI Blog2019 (10) TMI 919X X X X Extracts X X X X X X X X Extracts X X X X ..... the jurisdiction of the A.O. as per the time period given U/s 124(3)(b) of the Act and even up to the date of the assessment order passed by the A.O. Since the jurisdiction of the assessee was not predetermined prior to notice issued U/s 148 of the Act as the assessee has not filed any return of income, therefore, the objection raised by the assessee after the assessment order passed by the A.O., cannot be entertained. Disallowance of brokerage charges in respect of sale/purchase of land - CIT(A) has considered the claim and found that in absence of proof of brokerage payment produced before the A.O., the same cannot be allowed as accepted at this stage - HELD THAT:- When the transaction of sale of land is not in dispute then as per normal practice prevailing in such transactions, a brokerage at the rate of 2% is being paid. Though, during the assessment proceedings, the assessee did not file any evidence in support of the brokerage payment, however, before the ld. CIT(A), the assessee produced confirmation alongwith ID proof of these two persons. CIT(A) has rejected the claim of the assessee only on the ground that the proof was not produced before the A.O. Once the claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apura, Ajmer Road, Jaipur, however, the name of some other person appeared in the valuation report due to the mistake of exchanging first page of the report with the other valuation report. This fact was brought on record and the rectified valuation report was filed during the appellate proceedings and remand proceedings. Once this substance of the valuation report remains same and the subject matter is also remained same then only because the name of the owner is mistakenly given of some other person due to exchange of the one page of the report which was subsequently rectified, the claim of the assessee ought to have not been disallowed. When the period of construction is also given in the valuation report and the A.O. as well as the ld. CIT(A) has rejected the claim on technical grounds instead of examining the issue on the merits is not justified. Accordingly, once the construction of house is not in dispute then only the valuation or the cost of the construction aspect is required to be verified. Therefore, any typographical mistake or other inadvertent mistake in the valuation report would not have prevail over the substantial issue of cost of construction of the property ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6,390/- deserves to be deleted. 2.1 That, the Ld. CIT(A) has further erred in ignoring the evidences submitted by assessee in support of the fact of payment of brokerage in the shape of confirmation and ID of the broker before the Ld. CIT(A) u/r 46A, however, the Ld. CIT(A) has upheld the impugned addition merely on the ground that the broker was not produced before the Ld. AO, by completely ignoring the fact that request was made before the Ld. AO to summon the broker u/s 131 / 133(6) and examine, since his confirmation and ID proof was submitted before Ld. AO. 3. On the facts and in the circumstances of the case, the Ld. CIT(A) has further erred in upholding the addition of ₹ 40,000/- and ₹ 2,78,620/- made by Ld. AO by way of disallowance of brokerage expenses and expenses incurred on agriculture land respectively paid by assessee on the sale / purchase of land undertaken by assessee. Thus, the addition of ₹ 3,18,620/- [40,000 + 2,78,620] deserves to be deleted. 3.1 That, the Ld. CIT(A) has further erred in ignoring the evidences submitted by assessee in support of the fact of payment of brokerage in the shape o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which has been disallowed wrongly. 6. That the appellant craves the right to add, delete, amend or abandon any of the grounds of appeal either before or at the time of hearing of appeal. 2. Ground No.1 of the appeal is regarding validity of the reassessment order passed by the I.T.O., Ward 7(2), Jaipur without jurisdiction. The assessee is an individual and derives income from salary as well as agriculture. The assessee did not file any return of income U/s 139 of the Income Tax Act, 1961 (in short, the Act). The A.O. issued a notice U/s 148 of the Act on 26/03/2013 and completed the reassessment on 10/02/2014 whereby the A.O. has made addition on account of capital gain and unexplained deposits in the bank account with interest. The assessee challenged the action of the A.O. before the ld. CIT(A) and also raised ground against the validity of reassessment order passed by the ITO, Ward 7(2), Jaipur instead of jurisdiction of I.T.O., Ward 6(4), Jaipur. The ld. CIT(A) did not accept this contention of the assessee on the ground that the assessee has never challenged the jurisdiction of the A.O. during the reassessment proceedings and also filed comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sputed after completion of the assessment and particularly when the assessee has participated in the assessment proceedings. As per provisions of Section 124(3)(b) of the Act, no person is allowed to call in question the jurisdiction of an Assessing Officer when he has not made any return of income after expiry of time allowed, inter alia, notice issued U/s 148 of the Act. Thus, the assessee did not object the jurisdiction of the A.O. as per the time period given U/s 124(3)(b) of the Act and even up to the date of the assessment order passed by the A.O. Since the jurisdiction of the assessee was not predetermined prior to notice issued U/s 148 of the Act as the assessee has not filed any return of income, therefore, the objection raised by the assessee after the assessment order passed by the A.O., cannot be entertained. The ld. CIT(A) has considered this issue in para 4.3 as under: 4.3 I have carefully considered the facts of the case, findings of the AO and submission of the appellant. The assessee challenged the jurisdiction of A.O. It is seen from records/remand report that no such jurisdiction was made during the course of assessment proceedings. Moreover asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... material on record. When the transaction of sale of land is not in dispute then as per normal practice prevailing in such transactions, a brokerage at the rate of 2% is being paid. Though, during the assessment proceedings, the assessee did not file any evidence in support of the brokerage payment, however, before the ld. CIT(A), the assessee produced confirmation alongwith ID proof of these two persons. The ld. CIT(A) has rejected the claim of the assessee only on the ground that the proof was not produced before the A.O. Once the claim of the assessee is not found to be excessive and it is in accordance with the prevailing practice of brokerage @ 2% then the same cannot be denied. The sale and purchase of the immovable property transactions are generally carried out only through the brokers who played a very crucial role of soliciting the sale and purchase transactions between the parties. Accordingly, the A.O. is directed to allow brokerage payment @ 2% of the sale proceeds. 10. Ground No. 3 of the appeal is regarding disallowing of brokerage charges in respect of agricultural land purchased by the assessee as well as the expenditure incurred on the agricultural ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s regarding the particulars of the machinery and whether the lady who has executed the receipt was having those machineries, claim cannot be accepted. 14. Ground No. 4 of the appeal is regarding disallowance of cost of construction while allowing deduction U/s 54F of the Act. The assessee claimed the cost of construction of residential house of ₹ 23,22,500/- for the purpose of exemption U/s 54F of the Act. The A.O. has rejected the said claim on the ground that the valuation report filed by the assessee is in the name of one Smt. Sushma Bairwa as the single owner of the property. On appeal. The assessee filed rectified report of the valuer, however, the ld. CIT(A) has confirmed the action of the A.O. in rejecting the claim. 15. Before the Tribunal, the ld AR of the assessee has submitted that the original report was submitted during the assessment proceedings and the first page of the report had inadvertently exchanged with another client Smt. Sushma Bairwa. This mistake was due to the said page had got exchanged and not the entire report as it is evident that the remaining report contends the description of the property of the assessee. Thus, in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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