TMI Blog2021 (8) TMI 805X X X X Extracts X X X X X X X X Extracts X X X X ..... CHANDIGARH] were allowed by the Tribunal and thereby the addition made of the said amounts have been deleted by the Tribunal . Once the order passed by the CIT Appeal in the hands of the co-seller namely Shri Amarjeet Singh Randhawa and Smt. Amandeep Kaur was passed by the Tribunal and the additions were deleted, then no addition can be made in the hands of the Assesse who were neither the signatory of the Agreement nor any GPA was granted in favour of Shri Amarjeet Singh Randhawa. In our view, the order passed under Section 263 would unsettle the order passed by the Tribunal in the case of Shri Amarjeet Singh Randhawa. PCIT should himself have conducted the enquiry or causing to make such enquiries have passed the order under Section 263. In the present case, despite the material available on record, no further enquiry were made by the PCIT and had simply relied upon the finding recorded by the CIT Appeal in the hands of co-owners. In the present case, sufficient enquiries were made and in the absence of the original document , which was not signed by the Assesse, in the absence of the GPA in favour of Shri Amarjeet Singh Randhawa and any other evidence proving the recei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... read with Section 153A of the Income Tax Act. 3.2. Notice under Section 153C was issued to the Assesse on 28.10.2013 calling upon the Assesse to file the return of income for the assessment year 2010-11. In pursuant to the notice the return of income was filed by the Assesse through AR and it was submitted that the return were filed on 27.02.2010 be treated as return filed pursuant to the notice. 3.3. The Assessing Officer had issued the notice under Section 143(2)/142(1) along with the questionnaire dated 28.01.2015 on 02.02.2015. A Show Cause Notice dated 19.03.2015 was issued to the Assesse calling upon the various information from the Assesse. At page 3 of the assessment order, the Assessing Officer mentioned as under: However, as per information available with this office in shape of an Agreement to Sell dated 28.03.2009 entered into Shri Amarjeet Singh Randhawa for himself and GPA of others with the abovesaid property through M/s Delhi Pb. Real Estate Private Limited, Sector-22 Chandigarh and Lali Associate of Mohali and the above-mentioned property was sold for a consideration of ₹ 11,25,00,000/- (Rupees Eleven Crore Twenty Five Lakhs only). Further, Shri Am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As there is no document in the possession of IT. Department /your office, which can conclusively proved at the above referred assesses have received a sum more than ₹ 5.5 crores i.e. registered deed value against the sale of the said property. The notice issued U/s. 153C of the I.T. act, 1961 is merely on presumptive basis without any legally acceptable documentary evidence against the assesses. 3.5. The Assessing Officer had thereafter issued another Show Cause Notice on 25.03.2015 seeking the comments of the Assesse on the deal paper entered into Gurbachan Singh Brar with Great Value Infra. 3.6. The Assesse filed the reply on 26.03.2015 and submitted that the document given to the Assesse along with Show Cause Notice on 25.03.2015 was the minutes of Board of Director or M/s Great Value Infra Promoters Private Limited which was an internal matter of the company. Further, it was submitted that there was no sale purchase price mentioned on the said document. 3.7. In this AR had submitted that, appellant, during the course of assessment proceedings, denied the charge of the Learned Assessing Officer that the said property was actually sold for ₹ 11.25 crores on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m agreement to sell dated 28.03.2009. vi) From the inspection of the documents in the possession of the Ld. Assessing Officer, officially allowed by him as per the request of the assesses, we have not found any document either in original or a photocopy signed by the assesses or any GPA document relating to the assesses, which is now also being relied upon by Your Honour for framing the assessments in the case of the assesses. vii) After appreciating the contentions of the petitioner assessee during the course of original assessment proceedings, the Ld. Assessing Officer had framed the assessment after obtaining the approval of the Ld. Joint Commissioner of Income Tax u/s 153D of the Income Tax Act, 1961. It will be wrong to observe that the Ld. Assessing Officer did not conduct any enquiry whatsoever before accepting the returned income. It can clearly be observed from submissions made above that the Ld. Assessing Officer did conduct enquiries and after having felt satisfied with the reply of the petitioner assessee, assessment was framed by him. 3.8. The Assessing Officer after making the adequate enquiry have accepted the return of income filed by the Assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hase of above-referred property for ₹ 11.25 crore. 6. Finally, the Assessing Officer completed the assessment on 30.03.2015 and accepted the income retuned by you. With regard to the issue of receipt of amount of ₹ 5.75 crore over and above the amount of ₹ 5.50 crore received on the sale of above-referred property, the Assessing Officer has accepted the submissions made by you and held that Sh. Amarjit Singh Randhawa might have received the money over and above in entirety and without the knowledge of the assessee. 7. A perusal of the record shows that the Assessing Officer has accepted the submissions made by you without making any further enquiry whatsoever before accepting the retuned income and before coming to the conclusion that you have not received any amount, apart from your share in ₹ 5.50 crore. Assessing Officer has simply relied upon whatever has been said by the assessee. The Assessing Officer should have made independent enquiries from Sh. Amarjit Singh Randhawa as well as from the purchasers of the property i.e. Great Value Infrapromoters Pvt. Ltd regarding the monetary consideration involved in sale/purchase of the property. If pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... independent enquiries from Sh. Amarjit Singh Randhawa as well as from the purchasers of the property regarding the monetary consideration involved in sale/purchase of the property. Proper enquiries conducted would have been resulted into substantial long term capital gain instead of long term capital loss shown by the assessee and accepted by the AO. The AO has not enquired even from the assessee, the reasons for selling the property at a rate which would yield long term capital loss as a prudent person would not sell property, the property which would yield. But, even if it is the case, the reasons and genuineness of the reasons should have been examined. It is also pertinent to note that two cases were assessed at Chandigarh and 1/6 share of this amount was added back which is also confirmed by CIT(A). It further strengthen the view that the AO has not applied his mind and passed order without verifying the facts and without any investigation. Under the aforesaid circumstances, the order of the AO was erroneous, as held by the Hon'ble Supreme Court in the case Malabar Industrial company Ltd. Vs. CIT reported at 243 ITR 83 (SC). Further in the case of Gee Vee Enterprises ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... original has never been made available. The Ld. AR had submitted that no addition can be made on the basis of photocopy of the document more particularly when the document did not bear the signature of the Assesse. For the abovesaid proposition the Assesse rely upon the decision in the following matter: 370 ITR page 285 (Delhi) Pepsico India Holdings Private Limited vs ACIT. 281 ITR page 428 (P H) CIT vs Sidhu Rice and General Mills. 4.4 The Ld. AR had submitted that the appellant never appointed Shri Amarjit Singh Randhawa as their General Power of Attorney. The sale deeds were executed by the appellants themselves. The main ground on which the Learned Principal Commissioner of Income Tax has sought to revise the assessment order is that the Learned Assessing Officer did not make enquiry with respect to such transaction which is factually incorrect as has already been demonstrated by going through the assessment order and by filing copies of letters filed before the Learned Assessing Officer during the course of assessment proceedings. The Ld. AR relied upon the decision in the matter of 341 ITR page 180 (Delhi) CIT vs Hindustan Marketing Advertising Co. Ltd. wherein it was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Indian Farmers Fertilizers Cooperative Limited Vs. the Principal Commissioner of Income Tax 11 bearing ITA No. 2487/Del/2016. Principal Commissioner of Income Tax 01, New Delhi Vs. Brahma Centre Development Pvt. Ltd. in ITA Nos. 116/2021 and 118/2021 dated 05.07.2021. 4.6 Lastly it was submitted that in the case of Shri Amarjeet Singh Randhawa and Smt. Amandeep Kaur the reopening were made under Section 148 of the Income Tax Act by their Assessing Officer on the basis of the same documents (photocopies of the same documents).The Tribunal vide detailed order dated 11.11.2020 had accepted the Appeal of the Assesse and held that the reopening made by the Assessing Officer was without any independent enquiry and application of mind. On the basis of the above, it was submitted that once the additions in the hand of Shri Amarjeet Singh Randhawa were found to be unsustainable and reopening was quashed, therefore the present order of 263 is also liable to be quashed. 5. Submission of DR: 5.1 The Ld. DR for the Revenue relied upon the order passed by the PCIT and had submitted that inadequate enquiry were made by the Assessing Officer and therefore the order passed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the sale purchase of the property. In our view, the conclusion of the PCIT was erroneous as no addition can be made on the basis of dumb document namely the photocopy of the Agreement to Sell which did not bear the signature of the Assesse. 6.5 Further, in paragraph 4 of the CIT, it is mentioned that the two cases were assessed at Chandigarh and the amount was added back which was also confirmed by CIT Appeal. In our view this finding of the PCIT is again required to be rejected as in the Appeal filed by Shri Amarjeet Singh Randhawa and Smt. Amandeep Kaur, I.T. Nos. 795 796 of 2017 were allowed by the Tribunal and thereby the addition made of the said amounts have been deleted by the Tribunal . In our considered opinion, once the order passed by the CIT Appeal in the hands of the co-seller namely Shri Amarjeet Singh Randhawa and Smt. Amandeep Kaur was passed by the Tribunal and the additions were deleted, then no addition can be made in the hands of the Assesse who were neither the signatory of the Agreement nor any GPA was granted in favour of Shri Amarjeet Singh Randhawa. In our view, the order passed under Section 263 would unsettle the order passed by the Tribunal in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rin Alkali Chemicals and Fertilizers Ltd.(supra). The Mumbai Bench of Tribunal while noticing the decision of jurisdictional High Court in the case of CIT vs. Sunbeam Auto Ltd, 332 ITR 167 and the case of Nagesh knitwear Pvt. Ltd., 355 ITR 135 observed that the Explanation- 2 to section 263 inserted by Finance Act, 2015 w.e.f. 01.04.2015 would not impact the assessment earlier to 2014-15 and such a decision was followed by the Delhi Bench of Tribunal in the case of Arun Kumar Garg (HUF) vs. PCIT in ITA No. 3391/Del/2018 for the assessment year 2014-15 and by order dated 08.01.2019 held that Explanation 2 to section 263 of the Act is only prospective in nature. 14. In the case on hand, the ld. PCIT while reading the provisions of section 263 of the Act and the decision of Hon'ble Apex Court in the case of M/s. Tuticorin Alkali Chemicals and Fertilizers Ltd.(supra) reached a conclusion that inasmuch as there was no specific inquiry by the Assessing Officer, the assessment order was erroneous in so far as it is prejudicial to the interest of Revenue. He does not conduct any independent enquiry to reach the conclusion that the assessment order was erroneous in so far as it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of power by the Commissioner of Income-tax under section 263 of the Signature Not Verified Digitally Signed By:VIPIN KUMAR RAI Signing Date:06.07.2021 10:30:10 Income-tax Act. As noted above, the submission of learned counsel for the revenue was that while passing the assessment order, the Assessing Officer did not consider this aspect specifically whether the expenditure in question was revenue or capital expenditure. This argument predicates on the assessment order which apparently does not give any reasons while allowing the entire expenditure as revenue expenditure. However, that by itself would not be indicative of the fact that the Assessing Officer had not applied his mind on the issue. There are judgments galore laying down the principle that the Assessing Officer in the assessment order is not required to give detailed reason in respect of each and every item of deduction, etc. Therefore, one has to see from the record as to whether there was application of mind before allowing the expenditure in question as revenue expenditure. Learned counsel for the assessee is right in his submission that one has to keep in mind the distinction between lack of inquiry and inadequate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner for that of the Income-tax Officer, who passed the order unless the decision is held to be erroneous. Cases may be visualised where the Income-tax Officer while making an assessment examines the accounts, makes enquiries, applies his mind to the facts and circumstances of the case and determines the income Signature Not Verified Digitally Signed By:VIPIN KUMAR RAI Signing Date:06.07.2021 10:30:10 either by accepting the accounts or by making some estimate himself. The Commissioner, on perusal of the records, may be of the opinion that the estimate made by the officer concerned was on the lower side and left to the Commissioner he would have estimated the income at a figure higher than the one determined by the Income-tax Officer. That would not vest the Commissioner with power to re-examine the accounts and determine the income himself at a higher figure. It is because the Income-tax Officer has exercised the quasi-judicial power vested in him in accordance with law and arrived at conclusion and such a conclusion cannot be termed to be erroneous simply because the Commissioner does not feel satisfied with the conclusion. . . . There must be some prima facie material on record ..... X X X X Extracts X X X X X X X X Extracts X X X X
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