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TMI Blog2025 (3) TMI 595X X X X Extracts X X X X X X X X Extracts X X X X ..... . Mohit Gupta's appeal ITA No. 3385/Del/2023 as the "lead" case. 4. It is next noticed that the learned PCIT(Central), KNP at Meerut has passed his impugned order assuming his revisional jurisdiction u/s 263 of the Act thereby terming the Assessing Officer's corresponding section 143(3) r.w.s. 153A assessment framed on 30.12.2019; as an erroneous one causing prejudice to the interest of the Revenue. 5. Both the learned representatives are very much ad-idem during the course of hearing that this is the second round of revision proceedings u/s 263 of the Act since the tribunal's earlier order in earlier identical twin appeals ITA Nos. 709 & 710/Del/2022 dated 01.11.2022, had restored back the matter to the learned PCIT for his afresh appropriate adjudication as under: "2. For the sake of reference, we are referring to the case of Ashish Gupta in ITA No.710/Del/2022. The grounds of appeal read as under:- "1. Under the facts and circumstances of the case, order passed by the Ld. PCIT u/s 263 is illegal & bad in law. He has further erred in exceeding his jurisdiction in passing the order u/s 263 ignoring that an order passed u/s 143(3) r/w sec. 153D cannot be revised without revis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mbers of Gupta Family in land deal of Sir Shadi Lal Garden is 38 % of total land area of 40.201 Hect. b) M/s Gupta Sons was created on 15.10.2015 and M/s Agarwal Sons was created on 11.02.2015. c) Total stamp duty value of the land purchased by the firm Gupta Sons is Rs.3,96,95,560/-. Shri Ashish Gupta has 5% share in the said firm, M/s Gupta Sons. Thus, the deemed contribution of Shri Ashish Gupta is Rs.19,84,778/-. Since, it was found that the firms were created for the purpose of only registering the land as no business activities have been carried out, the amount that was received by seller of land may be treated as received by the partner of the firm i.e. the transaction was carried out not between the firm and the individuals but between the two individuals only. Hence, the section 56(2)(vii)(b) is applicable in the case of individual. Total sales consideration is Rs.19,00,000/- and stamp duty value is Rs.3,96,95,560/-. Difference between stamp duty value and sale consideration is Rs.3,77,95,560/-. The 5% of this value of Rs.3,77,99,560/- come to Rs.18,89,778/-. Further, the total stamp duty value of the land purchased by the firm Agarwal Sons is Rs.28,03,94,000/- and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ereby set aside the order passed by Assessing Officer u/s 153A/143(3) for A.Y. 2016-17 with direction to pass fresh order after conducting proper enquiries, and considering discussion in paras above, after providing opportunity to the assessee also." 5. Against the above order, assessee has filed appeal before us. We have heard both the parties and perused the records. 6. Ld. Counsel of the assessee stated that due enquiry has been made by the AO and assessee has duly given explanation. That upon acceptance of assessee's explanation, no addition in this regard has been made. Ld. Counsel further placed reliance on the following case laws :- i. ITAT, Mumbai Bench in case of Sir Dorabji Tata Trust vs. DCIT (E) (2021) 188 ITD 38; ii. ITAT, Delhi Bench in case of Brahma Center Development (P) Ltd. vs. PCIT (2020) 185 DTR 353/77 ITR (Trib.) 156; iii. ITAT, Delhi Bench in case of ETT Ltd. vs. CIT (2019) 177 DTR 313; iv. ITAT, Delhi Bench in case of Amira Pure Foods Pvt. Ltd. vs. PCIT (2017) 51 CCH 473/63 ITR (Trib.) 355; v. ITAT, Surat Bench in case of Nilkanth Stone Industries vs. PCIT (2021) 189 ITD 718; vi. Hon'ble Karnataka High Court in case of CIT vs. International S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parameters which are laid down in Section 263 of the Act need to be fulfilled in exercising such a discretion. It is the Commissioner who has to satisfy himself, on the basis of available records, that in a given case the conditions stipulated under Section 263 of the Act are satisfied. In arriving at this conclusion, he is not to be controlled even by a higher authority. Likewise, the higher authority is not to interfere with the independence of his unfettered discretion which is statutorily conferred upon the Commissioner." 6.14 Thus, even the authority above PCIT and CIT cannot deprive the powers of the revision and thus there is no reason that lower authority exercising powers granted to it can prevent the PCIT or the CIT to exercise revisionary powers. Therefore, it is apparent that none of the lower authorities or even a superior authority cannot put spokes in exercising the power of the Pr. Commissioner of Income Tax. Such is the mandate of the Hon'ble Delhi High Court. 6.15 Now we come to the decision of the Hon'ble Supreme Court in T.N. Civil Supplies Corpn. Ltd Vs Commissioner of Income-tax [2003] 260 ITR 82 (SC) wherein the Assessing Officer passed an order on the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection to the Assessing Officer. 6.17 Therefore, natural corollary would be show that all orders of search and seizure passed under Section 153A or under Section 153C of the Act are required to be passed after prior approval of the Joint Commissioner except as provided under Section 154BA(12). Therefore, if the argument of the Ld. AR is to be accepted then in such cases where the assessment has been framed under Section 153A or Section 153C, the same will go out of the ambit of the provisions of Section 263 of the Act and such a view is directly contrary to the decision of the Hon'ble Supreme Court in T.N.Civil Corporation Vs. CIT 260 ITR 82, Hon'ble Punjab & Haryana High Court Osho Forging Ltd. Vs. CIT (supra) and Hon'ble Delhi High Court in NIIT Ltd. Vs. Union of India (supra). 6.18 The power of the Commissioner under Section 263 of the Act is in the nature of supervisory jurisdiction. This power is granted to correct an error, which is prejudicial to the interest of the Revenue in the order of the Assessing Officer, even if it is approved by the Joint Commissioner, who is also falling below the rank of the Pr. Commissioner. If the argument of the ld. AR is accepted then the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of our observation hereinabove. 11. In the result, this appeal filed by the assessee is partly allowed for statistical purposes. 12. Our above order applies mutatis mutandis to both the appeals. 13. In the result, both the appeals are partly allowed for statistical purposes." 6. Suffice to say, learned PCIT herein has once again passed his instant twin consequential revision orders reiterating his very stand that the Assessing Officer had not completed the foregoing search assessment(s) after due verification of all the relevant facts as under: "4. In pursuance of the order dated 01.11.2022 passed by the Hon'ble I.T.A.T., Bench-A, New Delhi, afresh show-cause notice u/s 263 of the Income Tax Act, 1961 was issued to the assessee through ITBA under DIN & Notice No. ITBA/COM/F/17/2023-24/1053994148(1)dated27.06.2023requiring him to explain as to why the order dated 19.12.2019 passed by the DCIT, Central Circle- Meerut under Section 153A7143(3) of the Income Tax Act should not be considered as erroneous in so far as it is prejudicial to the interests of the revenue on the following grounds: (i) "Return of income u/s 139(1) was filed on 31.12.2016 showing income of Rs. 24,15 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the seller i.e., Shri Vivek Vishwanathan & Smt. Sudha Singhania in F.Y. 2012-13. When queried for transfer of said land at such a low process, Shri Rajat Lal clearly stated that clear title deeds for said lands were not in their possession. In the Trial Balance of RCSC as on 31.03.201land in other seized documents too, credit balance as payable to these sellers has been shown. The name of Shri Vivek Vishwanathan & Smt. Sudha Singhania therein shown as sundry creditors. (iv) As per incriminating documents found during the search proceedings at the residence of the assessee, a ledger marked as RCSC pertaining to F.Y. 2014-15 to 2015-16 was found and seized. In the seized book a ledger account in the name of land Sir Shadi Lal Garden (land account) was found and seized. In the said ledger, it is clearly written that the cost of the 38% share of the land is Rs. 8.738 Cr. In this regard the assessee has stated that the actual amount is 38% of the Rs. 8.738 Cr. The evidence found during search does not support the submission of the assessee. In the ledger of RCSC costing for 38% clearly shown at 8.738 Crores and the entry is brought forward as on 01.04.2014, in itself shows that this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d purchased in the firm Agarwal sons is Rs. 28,03,94,000/- and total sale consideration is Rs. 1,00,00,000/-. Difference between stamp duty value and sale consideration is Rs. 27,03,94,000/- Shri Mohit Gupta has 12.5% share contribution in M/s Agarwal Sons. Then The 12.5% of this value of Rs. 27,03,94,000/- comes to Rs. 3,37,99,250/-. The total income of Rs. 7,44,72,380/-(40673136+33799250) is deemed income of the assessee as per provisions of section 56(2)(vii)(b) of the Income Tax Act, 1961 which have been escaped to assessment. (vii) As per sec. 56(2)(vii)(b) of the Act, the value of land shall be taken as per stamp duty value and tax is also payable on that income. Since, it was found that the firm was created for the purpose of only registering the land and as no business activities have been carried out hence the amount that was received by seller of land shall be treated as received from the partner of the firm i.e., transaction was carried out not between the firm and the individual but between the two individuals only. Hence, the provisions of section 56(2)(vii)(b) of the Act 1961 are clearly applicable in your case. (viii) In view of above-mentioned facts and circumst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T vide their order dated 19.12.2022. In support of his contentions, the assessee has also placed reliance on various judicial pronouncements which are as under: [i] Sir Dorabji Tata Trust Vs. DCIT(E) 188ITD 38 dt.28.12,2020 [Mum.][Trib.] [ii] Brahma Center Development (P) Ltd. Vs. PCIT [2020] 185 DTR 353/77 ITR(Trib.)156 (Delh)(Trib.) [iii] ETT Ltd. Vs. CIT (2019) 177 DTR 313 (Del.) (Trib.) [iv] Amira Pure Foods Pvt. Ltd. Vs. PCIT (2017) 51 CCH 473/63ITR (Trib.) 355 (Del.) (Trib.) [v] Nilkanth Stone Industries Vs. PCIT (2021) 189 ITD 718 (Surat) Trib. [vi] CIT Vs. International Society for Krishna Consciousness (2020) 272 Taxman 534 (Kar.)(HC) [vii] PCIT Vs. Deccan Jewellers Pvt. Ltd. (2021) 206 DTR 257/283 Taxman 578 (AP) (HC) 7. The assessee's reply was carefully considered and examined in the light of details/material available on records as well as the law laid down by various judicial forums in this regard. Thus, before coming to a logical conclusion, it would be appropriate to discuss the factual and legal aspects of the case which are as under: 8. From perusal of the seized documents, it is found that the above firms, M/s. Aggarwal Sons, M/s. Goel had purch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 2 Shashi Bala 963880 20 20 3 Mohit Gupta 2891640 60 60 4 Priyanka Gupta 728160 15 15 Total 4825400 The assessments considering the additions u/s 56(2)(vii)(b) of the I.T. Act have already been passed by the Assessing Officer in the case of Shashi Bala partner in the Firm M/s Agrawal Sons & M/s-Goel Sons, Manisha Gupta partner in the Firm M/s Gupta sons & M/s Agrawal Sons and in the cases of Yogesh Bindal, Sushil Garg, Dr. Anguri Gard & Narendra Kumar Mittal partners in the Firm M/s Agrawal Sons. 10. The assessee is a partner in two firms named as M/s Goel Sons and M/s Agarwal Sons, and these two firms purchased part of the land area of Shadi Lal Bagh in the year 2015-16 relevant to the A.Y. 2016-17. The total stamp duty value of the said purchased by the firm M/s. Goel Sons is Rs.7,08,88,560/-. Shri Mohit Gupta has 60% share in the said firm M/s Goel Son. Thus, the deemed contribution of Shri Mohit Gupta is Rs.4,25,33,136/- as per section 56(2)(viii)(b) the value of land shall be taken as per stamp duty value and tax is also payabale on that income. Since, it was found that the firms were created for the purpose of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndings of the AO in the case of M/s. Goel Sons for A.Y. 2016-17 wherein the AO has observed as under: "The case was heard and discussed. On the basis of the reply file by the assessee and examination of papers/documents seized and submitted, the income of the assess is determined as under- The firm was created on 15 10 2015. The details of the partners their share capital and profit sharing is as under: Name of the partners Share capital Ratio Profit Sharing Rahul Gupta 241720 5 5 Mohit Gupta 2891640 60 60 Shashi Bala 963880 20 20 Priyanka Gupta 728160 15 15 Total 4825400 From perusal of the seized documents, it is found that the assessee had purchased land in the FY 2015-16 The said land is part of an orchard which was already in possession of Gupta Family (Shri Rahul Gupta & Others) as per seized document found during the course of search. Shri Rahul Gupta and other family members of the entire Gupta family has 38% share in the Bagh as per seized document named as RCSC. Sh. Rahul Gupta in his reply has also admitted that Gupta family has 38% share in the Orchard known as Sir Shadi Lal Garden The said bagh got regis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der consideration the firms does not fall within the 'ambit of section 56(2)(vii) (b) A colorable device has been used to default the payment of tax liability........." 12.2. From the above details in the assessment order of M/s Goel Sons, it is noticed that the purchase consideration in respect of 3 sale deeds, is Rs.7.08.88,560/-, and not Rs.3,96,00,000/-. 13. In view of the foregoing facts, the value of land shall be taken as per stamp duty value and tax was also payable on that income. Since, it was found that the firms were created for the purpose of only registering the land and as no business activities have been carried out hence the amount that was received by seller of land may be treated as received from the partner of the firm i.e., transaction was carried out not between the firm and the individual but between the two individuals only. Hence, the section 56(2)(vii)(b) of the Act 1961 is applicable in the case of individual. Thus, after insertion of Explanation-2, the position of law as regards to under what circumstances an order can be deemed to be erroneous & prejudicial both, has changed substantively. Therefore after 01.06 2015 the propositions given by cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncements cited, the same are distinguishable not only on facts but on the position of law too. Facts borne out of records clearly show that the Assessing Officer did not make any enquiries or independent verification. The reply and documents filed by the assessee have been simply accepted as such without enquiries to reach a prudent satisfaction. The assessee has merely cited case laws without elaborating how the facts and legal proposition laid down by the Hon'ble Courts in these decisions supported his point of view. 16. Besides, there are several case laws where it has been held that lack of enquiry/verification of material available on record would render the order erroneous. A few such case laws are mentioned as follows:- A. The Punjab & Haryana High Court in the case of PCIT, Ludhiana vs. Venus Woollen Mills [2019] 412 ITR 188 [P&H] concurred with the view that where the Assessing Officer merely accepted the reply of the assessee without applying his mind as to the correctness of the claim, such an assessment would be erroneous in so far it was prejudicial to the interest of the revenue and would be hit by the provisions of Section 263 of the Income Tax Act, 1961. B. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sought to be made herein is that u/s 56(2)(vii)(b) of the Act which is applicable in case of an individual or an HUF; as the case may be, is found to have "received" a capital asset at a lower price than that adopted by the stamp authorities in clause (b) sub-clauses (i) & (ii) thereof. That being the case, we notice that it is not these twin assessee's but their partnership firm M/s Goyal Sons, which had in fact acted as the purchaser of the capital asset representing a share in an orchard measuring 585 bhigas, adjacent to National Highway No. 58. 8. Faced with this situation, we invite the learned CIT DR's kind attention to para 12.1 of the impugned revisionary directions indicating share holding in the said partnership firm who has actually acted as the purchaser or "received" the asset(s) in the relevant previous year. This clinching fact has gone un-rebutted from the departmental side. All what the learned CIT DR has reiterated is that once these assessee's have routed their impugned purchases through the partnership firm, the addition herein u/s 56(2)(vii)(b) of the Act ought to be made in their hands only. 9. We find no merit in the Revenue's instant arguments. This is fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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