TMI Blog2013 (6) TMI 898X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee. The learned counsel also filed market rates of gold and silver for wealth tax purposes and the source of the same was claimed to be figures issued by Bombay Bullion Association Limited/Economic Times from 4.11.1983 to 31.3.2009. The learned Senior DR contended that these rates were never filed by the assessee at any stage. 3.1 We have considered the rival submissions and perused the material available on record. Before coming to any conclusion, the value of total wealth shown by the assessee, determined by the Assessing Officer and consequent addition so made is summarised as under :- A.Y. Value of jewellery Value shown by assessee (in Rs.) Value adopted by A.O.(in Rs.) Consequent addition 2003-04 2574400 2800000 2,25,589 2004-05 3206000 3350000 1,44,047 2005-06 3270100 3500000 2,29,928 2006-07 3914096 4200000 2,85,904 2007-08 4325170 4400000 74,830 2008-09 5299342 5400000 1,00,658 We find that the learned CIT(A) in para 4.2 on the issue under hand merely said that the action of the Assessing Officer is found to be proper as valuation has been enhanced marginally and no submission has been made on this ground. However, right from assessment stage, the assessee challenged t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... firstly the assessee herself offered the impugned land as taxable asset in its computation of wealth tax filed with the return, therefore, may not be permitted at this stage to take the shelter of the Circular at the level of the Tribunal and secondly the land is situated in the urban area, therefore, it is not an agricultural land. 3.3 We have considered the rival submissions and perused the material available on record. From the Kisht Bandi Khatauni (page 13 of the paper book) the area of the impugned land is 0.084 .26 hectares (9042 sq. ft. approx.) which is below 1000 sq. mtr. It is also an admitted fact that in the wealth tax return the assessee offered the land as taxable asset. However, vide letter dated 26.10.2010 before the Assessing Officer, it was claimed that it is an agricultural land on which no construction is permitted. The Assessing Officer himself has made a mention of this letter at page 5 of the assessment order. In the said letter it has been claimed that there is no change in the characteristic of land unless diversion is done. The original purchase deed of the land was also claimed to be in the possession of the Department, which was seized during seizure. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment under section 143(3) of the Act. It may also be mentioned that the tax audit report alongwith the return is not a mandatory condition as per the ratio laid down in the case of CIT vs. Rai Bahadur Bissesswarlal Motilal Malwasie Trst (1992) 195 ITR 825 (Cal) as well as in the case of CIT vs. Sankalk Welfare Society (2008) 303 ITR 64(P H). The audit report can be furnished before completing the assessment as per the ratio laid down in the case of CIT vs. Dr. L.M. Singhvi (2007) 289 ITR 425 (Raj.). 13. It may not be out of place to mention that furnishing the audit report and the certificate for claiming the exemption under section 80HH in Form 10CC AC was treated as procedural in nature. The mistake was treated as a technical breach and the Assessing Officer was duty bound to ask for it before denying claim as observed in the following cases : CIT vs. Gujarat Oil Allied Industries (1993) 201 ITR 325 (Guj.) and CIT vs. Berger Paints (India) Ltd. (No. 2) (2002) 254 ITR 503 (Val.) 14. In the instant case, the Assessing Officer has not asked any information before denying the exemption for which the assessee was legally entitled. On the other hand, he has rejected ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orrect total income of the assessee according to law and during that proceedings when the assessee makes a claim, the ITO is bound to consider the claim of the assessee. We are of the opinion that, while considering such a claim, the question of fulfilment of the conditions for rectification is not a sine qua non and even the conditions to rectify the mistakes are not present, the ITO, in our opinion, should examine the claim of the assessee on merits of the case. The power of the ITO to make the assessment as observed by this Court in CIT vs. Seth Manicklal Fomra (supra) is derived from the statutory provisions of s. 143(3) of the Act. Though the Supreme Court in the case of Modi Industries Ltd. vs. CIT (supra) has held that the jurisdiction of the ITO is derived from the order of the CIT, his jurisdiction to allow or disallow the carry forward losses of the defunct business would be derived from the order of the CIT, but in other respects and, for completing the assessment, his powers would be traceable to s. 143(3) of the Act. This Court in Faizunnissa Begam vs. Asstt. CED (supra) has indicated such an approach and it was held that in so far as other items not considered by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 (XL- 35)1955 dated 11 April 1955. Even under the bonafide belief, the assessee has shown the long term capital gain at the rate of 20%, but it was expected from the A.D. to know the latest amendment. The mistake might have been corrected by passing an order under section 154 of the Act. In the case of CIT Vs. Mahalaxmi Sugar Mills Co. Ltd. (1986) 160 ITR 920 SC, it was observed that: There is a duty cast on the Income-tax Officer to apply the relevant provisions of the Indian Income-tax Act for the purpose of determining the true figure of the assessees taxable income and the consequential tax liability. Thus the assessee fails to claim the benefit of a set-off cannot relieve the Income-tax Officer of his duty to apply section 24 in an appropriate case. In the light of the above decisions and the Circular of the Board, it can be safely said that the Department is not permitted to ignore the due claim of the assessee and further is not expected to take advantage of the ignorance of the assessee and if any benefit is available to the assessee in accordance with law, that is expected to be extended to the assessee by the Assessing Officer. 3.5 If the issue is analysed with re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oval obtained, if any, for issuance of notice. The assessee was asked by the Assessing Officer as to why value as per market rate may not be adopted vide notice dated 16 th November, 2010 which was replied by the assessee vide letter dated 26 th November, 2010 which has also been reproduced at page 5 of the assessment order. In the said letter it has been clearly explained that there was no change in the characteristic of the land and construction is not permitted on the said land under the Municipality Act unless diversion from agriculture land to non-agriculture land is done. It is not the case that this issue has been raised for the first time before the Tribunal as has been canvassed by the learned Senior DR in his submissions dated 26th June, 2013. In our humble opinion, the decision from the Hon ble Apex Court is not applicable to the facts of the present appeal being distinguishable on facts. As discussed earlier, in the light of circular of CBDT, the Assessing Officer was obliged to make correct assessment in accordance with law. So far as the contention of the learned Senior DR that revenue record is not conclusive evidence for agricultural purposes is concerned, we do not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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