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TMI Blog2016 (4) TMI 822X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT (A) has failed to appreciate that the aforesaid difference of Rs. 19, 10,145/- represented the income declared by the assessee as an agricultural income and thus there was no justification to have proceeded to compute the income on the basis of the income computed u/s 143(1) of the Income Tax Act, as the A.O. while framing the assessment has held 50% of the said sum as declared by way of an agricultural income is excessive. In any case the addition made is double addition. 2. That the learned Commissioner of Income Tax (Appeals) has further erred both in law and on facts in upholding the addition of Rs. 14,85,641/- allegedly representing the commission earned by the appellant from the sale of agricultural land. 2.1 That in sustaining the aforesaid addition, the learned CIT(A) has completely failed to comprehend that the assessee was not engaged in the business of selling or purchasing of land and as such there could be no income derived or accrued on the investment and disinvestment made. The findings of the CIT(A) in the appellate order in para 4.3 is highly misconceived and are arbitrary. 2.2 That the learned Commissioner of Income Tax (Appeals) has grossly erred in fai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd is thus untenable. 5.1 Without prejudice to the aforesaid, the learned Commissioner of Income Tax (Appeals) has grossly erred both in law and on facts in directing the learned Assessing Officer to bring to tax the capital gain on sale and purchase of the agricultural land, as computation of capital gain was neither the subject matter of assessment nor the appellant has raised any ground to that effect, as such, it was beyond the jurisdiction of the learned Commissioner of Income Tax (Appeals) to introduce a new source of income and power of learned Commissioner of Income Tax (Appeals) is confined to those items of income which were the subject-matter of original assessment in an appeal filed by the assessee. 5.2 That the learned CIT(A) had acted without jurisdiction when by an order sheet entry dated 12.09.2012, it was directed to show cause on the sale proceeds of an agricultural land should not be charged to capital gain. 5.3 That the learned CIT(A) failed to comprehend that, the taxability or non-taxability of the said gain was neither the subject matter of assessment nor was the subject matter of appeal before her and further the A.O had not considered in his order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e deleted and appeal of the appellant be allowed. 3. The assessee filed return of income of Rs. 57,12,774/- on 30.09.2009. The return was processed under Section 143(1) of the Income Tax Act, 1961 at an income of Rs. 76,22,919/-. The assessee has shown income from salary, business, house property and other sources. Under the proprietary business, the assessee has shown receipts at Rs. 19,95,610/- against which net profit of Rs. 2,96,060/- was declared. As recorded in assessment order, notice under Section 142(1) of the Act dated 09.12.2011 was issued and assessee was asked to furnish the details/information and the case was fixed for hearing on 16.12.2011 but on the said date no one attended the proceedings. Accordingly, the Assessment was completed ex-parte on merits on the basis of the information available on record. 4. At the beginning of the assessment year, assessee was holding agricultural land valuing Rs. 2,54,30,709/- and during the year, it purchased land valuing Rs. 5,78,92,966/- and after selling the agricultural land of Rs. 2,97,12,813/- closing balance of the Agricultural land was declared at Rs. 5,36,10,862/-. The assessee during the course of the assessment proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was found that the land measured 15 canal and 11 marla was situated in Gurgaon and was sold to M/s SRP Builders Ltd, there was no documentary evidence in regard to purchase of the said land filed by the assessee. The CIT(A) further noted that the said land whether was agricultural and situated outside the municipal limits was not supported by any evidence as assessee did not filed any documentary evidence. While taking further note of Assessing Officer mentioned in the assessment order that instead of sale consideration of Rs. 3,11,000/-. The assessee only received an amount of Rs. 2, 97, 12,813/- i.e. The short sale consideration was received at Rs. 13, 87,187/- non receipt of balance sale consideration was attributed by the Assessing Officer towards the amount of commission which the assessee of the builder had earlier forgotten to take into account. Thus, the Assessing Officer worked out commission at 5% on the sale made by the assessee and made an addition of Rs. 14, 85,641/- being commission brokerage on the sale transaction undertaken by the assessee. Before the CIT (A) the assessee took stand that the said commission paid is the expense in the hands of the assessee and no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact, in the order of assessment, no such addition was either made or was such an issued was subject matter of appeal. The CIT(A) cannot touch upon an issue which does not arise from the order of the assessment and was outside the scope of the order of the assessment i.e. the submission of the assessee is that, the CIT(A) acted in excess of jurisdiction as enhancement is beyond the powers available to the CIT(A) under section 251(1)(a) of the Act. 8. The Ld. AR further submitted that when the assessee had sold his own land, there could be no occasion to even arbitrarily assume that the assessee has earned income by way of commission. Despite the aforesaid facts on record, he held that the assessee has earned a commission @ 5% on the sale of the land and thus made an addition of Rs. 14,85,6411-. It is absolutely evident from the aforesaid facts such an addition has been made which is entirely arbitrary. There being no source of income from commission, no commission can be estimated. Further, since the assessee has either been acquiring or selling the land, which is owned by him, the assumption that he has earned commission is without any basis and is entirely misconceived and is u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is submitted that income from aforesaid activity i.e. sale of tea coffee through vending machine ,was earned in cash and also the expenditure for vending machine is also made in cash, however all such expenses are duly recorded in the books of assessee. As such, disallowance made purely on adhoc basis and is not permissible in law. Further, there is no basis to making a disallowance of 25%. 9. The Ld. DR submitted that the assessee has not given the relevant documents and proceedings despite giving several opportunities, and, therefore, the Assessing Officer has passed order u/s 144. The Ld. CIT (A) also has given ample opportunity to the assessee but the same was not availed by the assessee. The case laws which was referred by the Ld. AR are not at all relevant in this particular case as the assessee himself has not availed any opportunity given to him. 10. The Ld. AR in rejoinder submitted that the assessee on 19/11/2011 i.e. On the very same day when he arrived from Bombay has given his reply and the enclosures therein as a detailed to his assessment proceedings he has shown the acknowledgement of the Department. Therefore, the Ld. AR submitted that this appeal should be a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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