TMI Blog2021 (7) TMI 1180X X X X Extracts X X X X X X X X Extracts X X X X ..... y AO/CIT(A). It was also not disputed that the land of these assessee were also acquired under the same proceedings and was situated in the same village. We set aside the order passed by the CIT (A) and A.O. and remand the matter back the matter to the file of the assessing officer with the direction to apply the average of rates i.e. ₹ 77, 500/- per Kanal as were applied to in the matter of 'Sh. Paramjit Singh' and Sh. Mander Singh(supra) and work out the LTCG and thereafter grant the benefit of 54B to assessee before us, Needless to say this exercise shall be carried out after following the principle of natural justice and affording the opportunity of hearing to the assessee/s. Appeals of the assessee are allowed for statistical purposes. - I.T.A. Nos. 162, 163 and 164/Asr/2019 - - - Dated:- 20-7-2021 - Laliet Kumar, Member (J) And Dr. M.L. Meena, Member (A) For the Appellant : Sudhir Sehgal, J.K. Gupta, Advs. and Jyotsna, C.A. For the Respondents : Charan Dass, D.R. ORDER Per Laliet Kumar, JM This appeal filed by the assessees are directed against the order dated 20.01.2019 passed by the Ld. Commissioner of Income Tax (Appeals), Bathind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. Notwithstanding the above said grounds of appeal, the notice issued in the status of individual is void ab initio, since the correct status is HUF as the land is ancestral. 4. Notwithstanding the above said grounds of appeal, the adoption of rate of land at ₹ 19000/- per kanal as on 1.4.1981 by the Assessing Officer and confirmed by the CIT(A) is against the facts and circumstances of the case and the rate of ₹ 70000/- to 85000/- per kanal in the other similar cases in the same Village has been upheld by the CIT(A) following the report of the revenue official and such orders have been accepted by the department. 5. That on the facts and in the circumstances of the case and in law, the learned CIT(A) erred in not relying upon the agreements to sell dated 18.02.2009 and 12.03.2009 for deleting the whole addition u/s. 54B on the basis that the same were not registered with the Revenue Authority. 6. That on the facts and in the circumstances of the case and in law, the learned CIT(A) erred in not giving more deduction u/s. 54B of the Act as the payments were made through cheques from the bank account of the assessee even though the sale deed was regi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sh. Babbu Singh ₹ 95,90, 100/- 3. Sh. Nachhatar Singh ₹ 87,49,720/- 6. The assessees filed appeals before the Commissioner of Income Tax (Appeals), Bathinda, challenging the action of the Assessing Officer in reopening of the case u/s. 148 and also the computation of capital gain by adopting the rate as on 1.4.1981 and other grounds of appeals with regard to not allowing full deduction u/s. 54B. 7. Feeling aggrieved by the order passed by the CIT(A), the assessees before us for the ground mentioned above. Submissions of A.R. 8. A.R. had been submitted that notice issued under section 148 on the issue of 'mechanical application of mind' by the Ld. PCIT and also there was no 'Reason to Believe' that the income of assessee has escaped assessment as per concise 'grounds of appeal,' the following submissions may, please, be considered:- a). In all the three cases, since the assessments were sought to be reopened beyond four years and, therefore, the sanction of PCIT was required u/s. 151 and for that the copy of the 'duly certified' copy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Believe. For the above said purposes the Ld. A.R. has drawn our attention to a). Copy of the reasons recorded u/s. 147 in all the three cases are identical, which are placed in 'Paper Book' at pages 1 to 3 and it has been mentioned in the reasons that the assessee had made certain transactions regarding the land sale, but no return has been filed and then it has been mentioned that the capital gain issue may arise and needs more enquiry. b). It is submitted for the purpose of 148, there has to be valid reason to believe that income of the assessee has escaped assessment and notice u/s. 148 cannot be issued for the purposes of verification. The Ld. A.R. further relied upon the decision in the case of Sh. Raj Singh passed by the ITAT Agra, copy of the judgment is placed at pages 48 to 74. Similar view was taken by 'Delhi Bench' in the case of Sh. Mohd Yameen Munna , which copy of the judgment has been placed at pages 81 to 109 and at page 96 of the paper book. it has been stated that the notice have been issued for verification of transactions and which cannot be equated to 'Reason to Believe'. 11. The Ld. for a further relied upon the decision i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... risdictional High Court whereby the issue of reasons to believe and reopening have been settled by the High Court in the matter of Rakesh gupta vs. CIT in CWP No. 27068 of 2016 by holding as under. 44. Mrs. Suri relied upon judgment of the Supreme Court in Chhugamal Rajpal's case (supra) and in particular paragraph 9 thereof which reads as under:- 9. In his report the Income-tax Officer does not set out any reason for coming to the conclusion that this is a fit case to issue notice under Section 148. The material that he had before him for issuing notice under Section 148 is not mentioned in the report. In his report he vaguely refers to certain communications received by him from the C.I.T., Bihar and Orissa. He does not mention the facts contained in those communications. All that he says is that from those communications it appears that these persons (alleged creditors) are name lenders and the transactions are bogus . He has not even come to a prima facie conclusion that the transactions to which he referred are not genuine transactions. He appears to have had only a vague feeling that they may be bogus 39 of 43 transactions. Such a conclusion does not fulfill t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner has mechanically accorded permission. He did not himself record that he was satisfied that this was a fit case for the issue of a notice under Section 148. To Question No. 8 in the report which reads Whether the, Commissioner is satisfied that it is a case for the I issue of notice under Section 148 , he just noted the word yes and affixed his signatures thereunder. We are of the opinion that if only he had read the report carefully, he could never have come to the conclusion on the material before him that this is a fit case to issue notice under Section 148. The important safeguards provided in 41 of 43 Sections 147 and 151 were lightly treated by the Income-tax Officer as well as by the Commissioner. Both of them, appear to have taken the duty imposed on them under those provisions as of little importance. They have substituted the form for the substance. (emphasis supplied) This judgment does not support the petitioner's case. It is clearly distinguishable. As noted in the earlier part of paragraph 9, the Supreme Court held that the reasons recorded by the ITO for initiating proceedings under Sections 147 and 148 were not in accordance with law. As in that case, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer wrongly applied the rate of ₹ 19000/- per kanal and there was no basis for application of this rate of ₹ 19000/-. Further it was submitted, the Assessing Officer have reported to the CIT(A) in other similar cases, the rate as on 1.4.1981 between ₹ 70000/- to 85000/- per kanal in the matter of 'Sh. Paramjit Singh' bearing appeal Appeal No. 61/2018-19 passed by CIT(A) AMRITSAR CAMP AT BATHINDA on 27.19.2019 and Sh. Mander Singh bearing appeal no Appeal No. 110-IT/17-18 passed by CIT(A) BATHINDA on 27.02.2019 (supra). In para 5 of the appellate order it was held as under in the case of Paramjit Singh:- ......................Hardeep Singh are brothers and nephew and they have jointly sold the agriculture land measuring 40 kanal to PACL India Ltd., New Delhi amounting to ₹ 240,80,000/- and the share of the appellant in the said land was 50% and other 50% belong to Sh. Gurdeep singh and Sh. Hardeep Singh. The A.O. had taken the same value of land in all the three cases and the case of the co-owner of the appellant Sh. Gurdeep Singh was decided by the CIT(A), Bhatinda on 1.3.2019 and no further appeals against this order has been filed by the depa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The option to adopt fair market value for computation of capital gain/arriving at cost of acquisition is provided under section 55(2)(b)(i) of Income Tax Act for the assets acquired prior to 01/04/1981. In case, the Assessing Officer is not satisfied with fair market value then section 55A of Income Tax-Act comes into play which empowers the Assessing Officer refer the matter to the valuation officer. But in this case, the Assessing Officer decided not referred the matter to the valuation officer but deputed his Inspector for the enquiry. The Inspector report does not mention as to which inquiry was conducted to obtain the information. In such circumstances, the Assessing Officer has arrived at a conclusion without any basis. On the other hand, the - appellant submitted are credible information in the form of report from dated 27-11-2007 Revenue Authority clearly mentioning the details of immovable property (Khasra Number) and reported that per kanal rate was ₹ 1,00,000/- in the year 1981. This report of Revenue Authority was also forwarded to the Assessing Officer for conducting remand proceedings. It also pertinent to mention that during the remand proceedings also the Asse ..... 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