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TMI Blog2025 (3) TMI 1048X X X X Extracts X X X X X X X X Extracts X X X X ..... circumstances of the case the Assessing Officer is not justified in invoking the provisions of Sec.142(2A) and hence the assessment is barred by limitations and not valid. a) The ld. First Appellate Authority is not justified in confirming the addition of Rs. 2,80,79,359/- as undisclosed long term Capital gain. b) The ld. First Appellate Authority failed to appreciate the fact that the land in question is agricultural land and hence the gain on transfer cannot be taxed as long term capital gain. c) The ld. First Appellate Authority failed to appreciate the fact that the land in fact was transferred on 30.12.2012 evidence by seized agreement of sale and hence the gain if any is liable to be brought to tax in A.Y.2013-14 and not in the Asst. Year under appeal, 2014-15. 3. d) The ld. First Appellate Authority failed to appreciate the fact that the actual consideration receive by the appellate and the other Co-owner is Rs. 1,66,15,000/- in all and hence the Assessing Officer is not justified in adopting Rs. 6,14,50,000/- as total sale consideration. e) The ld. First Appellate Authority is not justified in not treating the sale consideration at Rs. 1,66,15,000/- as computed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,470/-. 4. The case was selected for scrutiny and notice u/sec.143(2) r.w.s.153A of the act dated 22.11.2018 was issued to the assessee Subsequently notice u/sec. 142(1) of the Act dated 04.12.2018 was issued to the assessee calling for information. In response to the notices, the assessee furnished various explanations and also filed cash flow statement showing all the transactions. The Assessing Officer after considering relevant statement of the assessee and also considering the cash flow statement filed by the assessee, has proposed to refer the case to special audit as per provisions of sec.142(2A) and accordingly, called objections from the assessee. The assessee vide letter dated 29.12.2018 filed objection on 30.12.2018. The Assessing Officer after considering the objections filed by the assessee, proposed the case for special audit after obtaining necessary approval from the PCIT-6, Hyderabad and appointed M/s. Jawahar & Co to conduct special audit for assessment years 2014-15 to 2017-2018. The special auditor submitted his report on 28.06.2019. Thereafter, a show cause notice dated 16.08.2019 was issued to the assessee and requested to submit the various details as called ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rring to special audit and consequently, the objection raised by the assessee that, reference to special auditor and limitation provided under the Act for passing the assessment order is devoid of merit and, therefore, rejected the legal ground taken by the assessee challenging the validity of assessment order passed by the Assessing Officer. The learned CIT(A) also discussed the issue of various additions made by the Assessing Officer and partly allowed the appeal filed by assessee for both the assessment years i.e., 2014-2015, and 2015-2016. 7. Aggrieved by the order of the learned CIT(A), the assessee is now in appeal before the Tribunal. 8. Learned Counsel for the Assessee CA K A Sai Prasad submitted that, the learned CIT(A) erred in upholding the reasons given by the Assessing Officer to refer the case for special audit in terms of sec.142(2A) of the Act, without appreciating the fact that the Assessing Officer has not applied his mind to the case of the assessee before referring to special auditor, which is evident from the mechanical reference of the case of the assessee for special audit and mechanical approval by the PCIT-6, Hyderabad for reference of the case for specia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which is relevant to protect the interest of the revenue. The assessee has filed return of income on 18.11.2018 for assessment year 2014-2015 and has filed huge cash flow statement at the fag-end of the assessment proceedings. The Assessing Officer after considering the relevant nature of books of accounts maintained by the assessee and complexity involved in the books of accounts, has referred the same for special audit with the approval of the PCIT-6, Hyderabad and thus, there is no merit in the arguments of assessee. He submitted that the legal ground taken by the assessee that, the Assessing officer has referred the case for special audit to buy time and consequently assessment order passed by the Assessing Officer is barred by limitation should be rejected. 10. We have heard both the parties, perused the material on record and gone through the orders of the authorities below. The provisions of sec.142(2A) of the Act deals with reference to special auditor and as per the said provisions, at any stage of the proceedings before the Assessing Officer, the assessing officer having regard to the nature and complexity of the accounts, voluminous of the accounts, doubts about the cor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ived income from house property and income from other sources. Except for assessment year 2017-2018, the assessee does not have any income from business or profession. The assessee does not even required to maintain the books of accounts and in fact, the assessee has not maintained any books of accounts for assessment years 2014-2015 and 2015-2016. Therefore, going by the nature of documents submitted by the assessee before the Assessing Officer coupled with the return of income filed by the assessee, in our considered view, there is no case for the Assessing Officer to refer the case for special audit as claimed by the Assessing Officer, because the assessee has only filed a cash flow statement before the Assessing Officer during assessment proceedings, which is available in the paper book filed by the assessee, where there could be hardly any cash deposits and cash withdrawal from the bank account which runs into only four pages. Except the cash flow statement and bank account, the assessee has not submitted any books of accounts and in fact, even during the search, the Department had not found any books of accounts or incriminating material to suggest/establish the reasons given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not get extended time limit for completion of assessment as per sec.153A) of the Act and consequently, the final assessment orders passed by the Assessing Officer for the assessment years 2014-2015 and 2015-2016 are barred by limitation and thus, we quash the assessment orders passed by the Assessing Officer for assessment years 2014-2015 and 2015-2016. 13. Coming back to various other grounds raised by the assessee challenging the additions made by the Assessing Officer towards long term capital gains from sale of property and unexplained investment etc. Although, both the parties advanced their respective arguments at length on these issues, but because we have quashed the assessment order on the issue of limitation, in our considered view, other grounds taken by the assessee challenging various additions made by the Assessing Officer becomes academic and thus, these other grounds raised by the assessee has been rejected as infructuous. 14. In the result, appeals filed by the assessee for assessment years 2014-2015 and 2015-2016 are allowed. 15. Coming back to assessment year 2017-2018. Although, the assessee has challenged the reference to special auditor u/sec.142(2A) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore, the order of the CIT(A) should be upheld. 20. We have heard both the parties, perused the material on record and gone through the orders of the authorities below. We find that, the assessee has paid the sum of Rs. 6 lakhs to Shri Shoukat Ali on 18.08.2016 and explained source by filing cash flow statement to prove the source for such payment from known source of income. Further, the assessee claimed to have paid amount out of advance received from sale of property in the year 2012 and filed cash flow statement. But, on perusal of cash flow statement filed by the assessee, the Assessing Officer has recorded a categorical finding that there is time gap of more than 4 years when compared to advance received in the year 2012 and payment made in the year 2016. Even before us, the assessee could not explain the source, except reiterating the very same arguments made before the Assessing Officer and the learned CIT(A). Therefore, we are of the considered view, that assessee could not establish the source of payment of Rs. 6 lakhs to Shri Shoukat Ali from known source of income. The learned CIT(A) after considering the relevant material on record, sustained the addition made b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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