TMI Blog2023 (7) TMI 236X X X X Extracts X X X X X X X X Extracts X X X X ..... a along with land and office situated therein, as it emerges from the sale agreement dated 01.04.2013. The details of land transferred in not furnished by the assessee. The stone crushed is mined.There is no ownership right over the said land granted under lease to mine(unless contrary is brought on record by the assessee through cogent evidences), nor is the lessee entitled to transfer the same without permission of Government. Rule 37 of Mining Concession Rule, 1960 is relevant. The consequences for breach are also stipulated in the law. DR has contended that it was not a case of slump sale, as complete assets and liabilities of Rohit Stone Product, were not transferred. The complete details are not on record as the assessee has not furnished the same and also the authorities below have not comprehensively looked into the issue . Thus, it is considered fit and proper, in the interest of justice, to restore the matter back to the file of the AO for fresh determination(denovo assessment) of the issue on merits in accordance with law. The assessee is directed to produce all details before the AO, in set aside proceedings for denovo assessment by the AO. In case, the assessee do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14-15, is directed against an appellate order dated 25.03.2019 in Appeal No. 07/ACIT/CC/Alld./CIT(A)-III/Lko./17-18 passed by learned Commissioner of Income Tax (Appeals)-III, Lucknow (hereinafter called the CIT(A) ),for assessment year(ay): 2014-15, the appellate proceedings had arisen before learned CIT(A) from the assessment order dated 23.12.2016 passed by learned Assessing Officer u/s 143(3) of the Income-tax Act, 1961 and Secondly being ITA No.100/ALLD/2019 for assessment year 2015-16, is directed against an appellate order dated 12.06.2019 in Appeal No. 106/ACIT/CC/Alld. /CIT(A)-III/Lko./17-18 passed by learned CIT(A),for assessment year(ay): 2015-16, the appellate proceedings had arisen before learned CIT(A) from the assessment order dated 30.06.2017 passed by AO u/s 143(3) of the 1961 Act. 2. We have heard ld. Sr. DR in open court proceedings through physical hearing mode, while the assessee chose not to appear before the Bench when these appeals were called for hearing before the Division Bench . When these two appeals were called for hearing before Division Bench, the ld. Sr. DR raised serious objection to the adjournment application filed by the ld. Counsel for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ived which is appearing in the balance sheet also during the assessment year in question hence the addition so made and maintained is wrong illegal as the capital gain was disclosed and accepted by the assessing officer in A.Y. 2015-16 and therefore so called addition is double addition which is not permissible under the IT Act. 3-That in any view of the matter the entire approach of the two lower authorities in taxing the capital gain during the year in question is highly unjustified, illegal and against the settled law, hence on these count the addition so made maintained is liable to be deleted. 4-That in any view of the matter the addition of Rs. 1,80,000/- on account of gift received by the assessee from a genuine party and man of status as made and confirmed by the two lower authorities without appreciating the correct facts is highly unjustified and illegal hence the same is liable to be deleted in the facts and circumstances of the case. 5- That in any view of the matter finding and observations of the two lower authorities in their order for making and maintaining the aforesaid additions ignoring the correct facts are totally unjustified, wrong, illegal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d handed over possession alongwith plant and machinery etc. to the buyer and the buyer is also running the plant. As the possession of the said plant was handed over by the assessee to the buyer, the AO was of the view that the transfer is complete whether or not full payment was received by the assessee . The AO confronted the assessee regarding the same and AO was also of the view that the total consideration for the transfer is Rs. 1,30,00,000/- and difference between written down value of Rs. 94,76,484/- and the sale consideration of Rs. 1,30,00,000/-, which comes to Rs. 35,23,514/- shall be short term capital gain chargeable to tax in the hand of the assessee which was brought to tax by the AO by invoking provision of section 50 of the Act as short term capital gain on sale of assets in the hands of the assessee. 4b. There is one more addition with respect to gift of Rs. 1,80,000/- received by the assessee from Sh. Saurabh Vaish which is subject matter of challenge before the tribunal. The assessee was asked by the AO to submit complete details alongwith address of the said party and confirmation along with necessary details of creditworthiness of the said party, i.e. copy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. I have examined the facts and circumstances of the case. I have considered the findings of the AO in the assessment order and the submission of the appellant made during the appellate proceedings. It is to be noted that the appellant has made an agreement to sale with Shri Narendra Singh, Prop. Of M/s Hanumant Enterprises for sale of assessee's firm M/s Rohit Stone Products Plant, including Piloders, Crashur, office including land its apparatus etc. for Rs. 1,30,00,000/- by agreement dated 1/04/2013. As per the agreement appellant got Rs. 78,00,000/- by cheque and balance Rs. 52,00,000/- is payable by purchaser in 36 months and buyer get the possession of all the plant and machinery on the date of the agreement and running this. The AO held that as per provisions of section 2(47)of the Act since the appellant has transferred whole plant and hand over possession alongwith plant machinery e.t.c. and further the buyer is running the whole plant, hence transfer has taken place whether full payment has been received or not on the date of transfer or registration. After considering the details of plant and machinery of assets WDV of Rs. 94,76,484/- has been taken and amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... objected to grant of any further adjournment to the assessee. The said letter filed by the Department is placed on record in file. The ld. Sr. DR stated before the Bench that the assessee was granted last opportunity by the Bench on earlier occasion, but still the assessee is seeking adjournment. It was further submitted by ld. Sr. DR that even cost was imposed on the assessee by the Bench, but still the assessee is seeking adjournment and not interested in arguing the matter. It was also submitted that the assessee was directed to file the copy of sale deed w.r.t. transfer of Rohit Stone Product by the Bench on earlier occassions, but the same is still not filed by the assessee. It was submitted by ld. Sr. DR that the assessee is not interested in persuing these appeals, and hence no adjournment may be granted to the assessee. It was observed by the Bench that the assessee has taken adjournments in the past on large number of occasions and in fact last opportunity was also granted to the assessee but still the assessee was asking for adjournment. It is also observed that even cost has been imposed on the assessee on earlier occasions, but still assessee is seeking adjournments. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It was submitted by learned Sr. DR that the Bench directed the assessee to file registered sale deed but the assessee has failed to file the said sale deed. It was submitted that the plant and machinery was depreciable asset and short term capital gain was there which were brought to tax. It was submitted that land was also included in the sale which is transferred. It was submitted by ld. Sr. DR that for assessment year 2015-16, the assessee has declared a slump sale but there is no element of slump sale and it does not fulfill the requirement of slump sale. It was submitted that for slump sale, Section 50B is applicable. The assessee was directed by Bench to file computation of long term capital gain on sale of land included in the total sale consideration, but no such details were submitted. The learned Sr. DR submitted that there is no element of slump sale as it does not fulfill the requirement under section 50B. In slump sale under section 50B, all the assets and liabilities must be taken over by the purchaser and it was submitted that the purchaser has taken over the Stone Crashur plant but has not taken over the liabilities. Our attention was drawn to the assessment order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the view that the transfer is complete whether or not full payment was received by the assessee . The AO confronted the assessee regarding the same and AO was also of the view that the total consideration for the transfer is Rs. 1,30,00,000/- and difference between written down value of Rs. 94,76,484/- and the sale consideration of Rs. 1,30,00,000/-, which comes to Rs. 35,23,514/- shall be short term capital gain chargeable to tax in the hand of the assessee which was brought to tax by the AO by invoking provision of section 50 of the Act as short term capital gain on sale of assets in the hands of the assessee. The additions made by the AO are contested by the assessee before ld. CIT(A), but the appeal stood dismissed. Before us, the assessee has filed paper book as well statement of fact. On the earlier occasion, when the appeal of the assessee came up for hearing before the Bench, the counsel of the assessee had drawn our attention to the agreement to sale dated 01.04.2013 entered into by the assessee with Hanumant Enterprises (placed in Departmental PB/page 134-135) and it was submitted that the stone crusher plant was sold along with land, for Rs. 1,30,00,000/- and posses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Prevention and Control of Pollution) Act, 1981 etc. etc. Mining Lease are granted by Government to extract minerals. The lessee has right to extract minerals over a stipulated period by Government over the mining lease, on payment of Royalty and other statutory dues, tax etc. to Government. There is no ownership right over the said land granted under lease to mine(unless contrary is brought on record by the assessee through cogent evidences), nor is the lessee entitled to transfer the same without permission of Government. Rule 37 of Mining Concession Rule, 1960 is relevant. The consequences for breach are also stipulated in the law. Decision of Hon ble Supreme Court in Common Cause v. UOI, dated 02.08.2017 in Writ Petition (Civil) No. 114 of 2014 is relevant. The evidence which could be produced but is not produced would, if produced, be unfavourable to the person who withholds it. Section 114(g) of Indian Evidence Act, 1872 is relevant. It is also pertinent to mention that, prima-facie, if the assessee has merely transferred the Stone Crusher Plant, without transfer of any land as the assessee has only right to extract mineral, then on sale of Stone Crusher Plant, Sales of Goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO. In case, the assessee do not co-operate before the AO during set aside proceedings for framing denovo assessment, the AO shall be free to decide the issue on merits in accordance with law. Thus, the appeal of the assessee on this issue is allowed for statistical purposes. We order accordingly. 8. In the result, appeal of the assessee in ITA No. 59/Alld/2019 for assessment year 2014-15 is allowed for statistical purposes. We order accordingly. ITA No. 100/Alld/2019-Assessment Year 2015-16 9. The assessee has raised following grounds of appeal in memo of appeal filed with tribunal in ITA No. 100/Alld/2019 for assessment year 2015-16, which reads as under:- 1-That in any view of the matter the assessment order dated 30.06.2017 framed u/s 143(3) of the IT Act as passed by the assessing officer and his action as partly maintained by the Commissioner of Income Tax (Appeal) is bad both on the facts and in law. 2-That in any view of the matter a sum of Rs. 50 lacs added under the head other source by the assessing officer ignoring the correct facts and maintained by the first appellate authority is highly unjustified, incorrect and illegal, hence the same is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee submitted before the AO as under:- That all the cash deposits in bank accounts are duly recorded in the books of accounts. During the year the assessee had declared additional income of Rs. 50.00 lacs before the Hon'ble Income Tax Settlement Commission, New Delhi and on the direction of the commission the additional income was incorporated in the books of accounts. The assessee also declared income from other sources of Rs. 50.00 lacs in the return of income and paid due taxes. The cash deposits in banks are from these incomes. Further, the deposits in the bank account of the proprietorship firm namely M/s. Ravisha Stone Products is from opening cash balance as on-01.04.2014 and in M/s. Rohit Stone Products is from opening cash balance as on-01.04.2014 and Rs. 8.00 lacs received from Ramesh Chandra Vaishya Individual cash book. The AO asked assessee to explain as to how the cash of Rs. 50 lacs as cash deposits which was part of settlement order, was available in cash with the assessee during the financial year 2014-15, which was deposited in bank account . The AO also asked assessee to explain with documentary evidence as to the availability of cash of Rs. 50 la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . (b) During the assessment proceedings in the case of assessee of A. Y.- 2014-15 a query raised that the amount of Rs. 61,00,000/- may not be treated as deemed dividend in the hand of assessee. Vide order Sheet entry dated-14/12/2016 at Note sheet page No.3. In this connection the assessee had submitted his reply on 16/12/2016 stating that as mentioned in your notice regarding loan of Rs. 61,00,000/-, it is submitted that no loan was taken neither during the year nor the previous year. The adjustment entry of Rs. 67,54,971/- was passed on 01/04/2013 due to wrong transfer of balance related to M/s. Kapoor Chandra Stone Products Private Limited. The above entries were already passed in the books of M/s. M/s. Kapoor Chandra Stone Products Private Limited on-31/03/2013 on the basis of ITSC order. Keeping in view of above facts, it is very much clear a sum of Rs. 50,00,000/- was not available in cash liquid form which can be deposited by the assessee as claimed by him in his reply submitted during the assessment proceedings as mentioned supra. 2. The assessee claimed that the assessee had cash in hand during the year which was deposited in the bank accounts. Since, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctually withdrawn by assessee in cash out if salary from the company. (d) during the assessment proceeding the assessee has submitted cash deposit and withdrawn chart dated 29.05.2017 where in the assessee has shown deposit of Rs. 1,15,20,00/- withdrawal Rs. 18,60,000/- balance Rs. 96,60,300/- source of which claimed by assessee as under: (i) As per Settlement Commission Order Rs. 5,00,00,000/- (ii) Income from other sources declared in the return of income Rs. 5,00,00,000/- After considering all the facts, is narrated above in detail date wise and point wise, it is clear that the assessee has totally failed to explain the source of Rs. 1,00,00,000/- (50,00,000+ 50,00,000) by submitting documentary evidence. Keeping in view these facts, a sum of Rs. 1,00,00,000/- is treated as income from undisclosed sources other than the declared income. Accordingly, addition of Rs. 1,00,00,000/- is made in the hand of assessee. Addition: 1,00,00,000 11. Aggrieved by assessment framed by the AO, the assessee filed first appeal with CIT(A), which stood partly allowed by learned CIT(A), by holding as under:- 8. I have examined the facts and circumstances of the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hrough books. hence the addition so made in haste without appreciating the correct facts is wrong and uncalled for and therefore the same is liable to be deleted in the facts and circumstances of the case. 10. On examination, I find that in the instant case appellant had filed an application before Hon'ble Settlement Commission for A.Y. 2005-06 to A.Y. 2011-12 on 12/03/2013. The Hon'ble Settlement Commission passed an order dated 20/05/2014, wherein in para 9 has held as under: Conclusion: 9.1 In the case of Shri Ramesh Chandra (individual):.. The appellant by their letter dated 15/05/2014 have however offered this amount for taxation. In view of the offer made by the applicant, an addition of Rs. 50 lakh is made for assessment year 2011-12 in the case of Shri Ramesh Chandra to the additional income offered in the SOF. 11. Further on perusal of the cash book of the appellant it is noted that Rs. 50 lakh has been credited on 30/05/2014 which is shown as income under Settlement Order. 12. In view of the aforesaid facts, I find that Rs. 50 lacs has been credited in the books of account of the appellant which is as per the offer made by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , but still assessee is seeking adjournments. After hearing ld. Sr. DR and perusing the material on record and conduct of the assessee as borne out from record before us, the Division Bench declined to grant adjournment to the assessee and proceeded to hear the appeals in the absence of the assessee, after hearing ld. Sr. DR and perusing the material on record. The learned Sr. DR submitted that there was an unexplained cash deposit of Rs. 1 Crores in the bank account of the assessee . The learned CIT(A) has already accepted and granted relief w.r.t. addition to the tune of Rs. 50 Lacs, which were cash deposited in bank account of the assessee after grant of acceptance by the Hon ble Income Tax Settlement Commission of the statement of fact (SOF) filed by the assessee. It was submitted that ld. CIT(A) has already granted part relief to the assessee w.r.t. cash deposit pursuant to acceptance of SOF filed by the assessee, and the Department is not in appeal. It was submitted that the proprietary concern of the assessee namely Ravisha Stone Product was carrying on the business during the year, as is evident from the accounts of the assessee. Our attention was drawn by ld. Sr. DR to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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