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TMI Blog2020 (7) TMI 194X X X X Extracts X X X X X X X X Extracts X X X X ..... exemption of equivalent amount on account of fresh investment. The said disclosure matches with the transactions and the full value of consideration (including the impugned transaction which is subject matter of 148 notice) which has been finally brought to tax by the Assessing officer and thus, shows that the impugned transaction which is subject matter of 148 notice was duly reflected and offered to tax in the original return so filed by the assessee and therefore, on this count as well, there is no escapement of income in respect of impugned transaction. Therefore, in our considered view, such action on the part of the Assessing Officer for assumption of jurisdiction U/s 147 cannot be accepted and the notice under section 148 is thus set-aside. Issuing of notice u/s 148 in the wrong name - We agree with the contention of the ld DR that it was only a typographical error in first name of the assessee though other particulars such as assessee s surname, name of his father and address were correct and which has been corrected during the course of proceedings wherein the assessee has participated and thereafter, the reassessment order has been issued in correct name of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 1, the ld. CIT(A) has erred seriously in confirming the action of the AO in considering the sale of land and building by the appellant as sale of land only and making disallowance of construction cost of building and further disallowing the benefit U/s 54 of the Income Tax Act, 1961. 2. Briefly the facts of the case are that on the basis of information received from DIT(I CI), Rajasthan that the assessee has sold certain immovable property, notice U/s 148 of the Act was issued to the assessee and in compliance, the assessee submitted that the return filed u/s 139 on 25.07.2008 may be accepted in due compliance to notice u/s 148 of the Act. Subsequently, notices U/s 143(2) and 142(1) were issued and assessment was completed U/s 147 r.w.s. 143(3) of the Act on 29.02.2016. In the assessment so completed, while computing the income under the head long term capital gains , the Assessing Officer held that only plot of land was sold by the assessee and no constructed house was sold, hence, cost of construction claimed to be incurred in F.Y. 1990-1991 and deduction U/s 54 of the Act as claimed by the assessee were denied. Against the said findings, the assessee moved an appeal b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant had sold a property at Rs. NIL which was valued by the registrar at ₹ 11,14,712. This also shows that the ld. AO did not undertake any exercise to verify the true facts as he mentioned about sale of a property but without any sale consideration which is not possible and hence the ld. AO proceeded in this case without assuming proper jurisdiction and hence the whole process of assessment has been vitiated and whole proceedings are liable to be quashed being without jurisdiction. 7. It was further submitted that in the reasons recorded by the ld. AO, he has stated about sale of a property by the appellant which was valued by the registering authority for ₹ 11,14,712 but neither could identify any such document executed by the appellant nor any such document was brought before the appellant and even same has not been discussed in the assessment order also meaning thereby that the ld. AO did not have any piece of paper evidencing such deal nor he tried to obtain the same during assessment proceedings and hence he merely acted on the piece of information without examining authenticity of the same and hence assumption of jurisdiction by ld. AO is illegal. 8. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led to exercise such right within the stipulated period as prescribed and having participated in the proceedings, such contention cannot be accepted. It was further submitted that ITO Ward 2(2) was having the territorial jurisdiction as the impugned property was situated within his jurisdiction and therefore, there is no infirmity in the jurisdiction of ITO Ward 2(2). 13. Regarding the contention of the ld AR regarding issuing of notice u/s 148 in the wrong name, it was submitted that it was merely a typographical error though other particulars such as name of assessee s father and assessee s address were correct and subsequent notices as admitted by the assessee have been issued in his name only and thus, the mistake has been rectified during the course of assessment proceedings itself and the order thereafter has been issued in the name of the assessee only. It was accordingly submitted that for such technical breach in terms of name of the assessee being mentioned as Shailendra Kumar Chaturvedi instead of Shailesh Kumar Chaturvedi, the notice cannot be held as invalid in the eyes of law. 14. It was further submitted that it was not a case of borrowed satisfaction as the As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o taken by the assessee should be dismissed. 15. We have heard the rival contentions and perused the material available on record. Firstly we find that the assessee has not taken this ground of appeal before the ld. CIT(A) and is therefore, it is an additional ground of appeal which has been taken before the Tribunal. In the ground so taken, the assessee has challenged the assumption of jurisdiction by the Assessing Officer U/s 147 of the Act. It has been contended that firstly, the reasons so recorded by the Assessing Officer does not satisfy the requisite conditions for assumption of jurisdiction U/s 147 of the Act and secondly, the correct jurisdiction over the assessee lies with ITO Ward-6(4), Jaipur and not with ITO Ward 2(2), Jaipur who has issued notice U/s 148 of the Act. We therefore, find that the ground challenging the assumption of jurisdiction by the Assessing officer on both these counts is a legal ground and even though the same has not be taken before the ld. CIT(A), the same can be taken for the first time before the Tribunal. Hence, the ground so taken by the Assessing Officer is hereby admitted for adjudication. 16. It is settled legal proposition that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee had sold a plot of land situated at PN 380-B Devi Nagar, New Sanganer, Jaipur for a sale consideration of Rs. NIL during the financial year 2007-08 and the said transaction has been registered by the Sub Registrar VII, Jaipur at value of ₹ 11,14,712 for stamp duty purposes. On perusal of the material available on record, we find that plot no. 380B has been sold by the assessee through a sale deed executed and registered on 27.08.2007 for a sale consideration of ₹ 6,00,000/- and for the purpose of Stamp Duty purposes, the same has been valued by the Sub-Registrar Stamp Duty at ₹ 5,57,355/-. Therefore, the information so received by the Assessing Officer from Director of Income tax (I CI) as so stated in the reasons is factual correct that the assessee has sold plot no. 380B during the year under consideration and therefore, there is a transaction of sale of an immoveable property. At the same time, it is also noted that the said plot of land has been sold for ₹ 6,00,000/- and valued by the Sub-registrar stamps at ₹ 5,57,355/-as against Nil sale consideration and stamp duty value of ₹ 11,14,712/- so stated in the reasons recorded by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry on receipt of such information and thus, the reasons so recorded and the very basis, that the assessee has not filed the return of income and therefore, the income on sale of property has escaped assessment, is vitiated in the instant case. Further, on perusal of the original return filed by the assessee, we find that in the said return, he had computed and disclosed income under the head long term capital gains showing full value of consideration of ₹ 25,00,000/ and after claiming deduction for cost of acquisition and improvement, has computed long term capital gains of ₹ 13,39,612/- and has claimed exemption of equivalent amount on account of fresh investment. The said disclosure matches with the transactions and the full value of consideration (including the impugned transaction which is subject matter of 148 notice) which has been finally brought to tax by the Assessing officer and thus, shows that the impugned transaction which is subject matter of 148 notice was duly reflected and offered to tax in the original return so filed by the assessee and therefore, on this count as well, there is no escapement of income in respect of impugned transaction. Therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at income has escaped assessment. In the entirety of facts and circumstances of the case, the notice issued under section 148 cannot be sustained and the same is held to be bad in law. In the result, the reassessment proceedings are hereby quashed and set-aside. The grounds on merit have thus become infructous and are not adjudicated upon. 19. Now coming to the second contention of the ld AR that the correct jurisdiction over the assessee lies with ITO Ward-6(4), Jaipur and not with ITO Ward 2(2), Jaipur who has issued notice U/s 148 of the Act and therefore, even on this ground also, the instant proceedings are bad in law. We are however not inclined to agree to the ld AR in this regard and we rather agree with the contentions of the ld DR that there was ample opportunity available with the assessee during the course of reassessment proceedings to challenge the assumption of jurisdiction by ITO Ward 2(2) and once the assessee has participated in the reassessment proceedings and has not raised any such objections before the completion of the reassessment proceedings, the assessee cannot be allowed to raise this objection at this stage of appellate proceedings before the Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equisite approval. The ground of appeal is thus decided in favour of the assessee and against the Revenue. 24. Now, coming to the merits of the case and related ground no. 2 taken by the assessee. In this regard, the ld. AR submitted that the ld. AO in the assessment order held that the assessee had only sold plot of land and no residential house construction was there on the said land and hence he disallowed the claim about cost of construction as well as the deduction claimed u/s 54 of the Income Tax Act, 1961. The ld. AO reached at this conclusion after observing that in the sale deed, the assessee had mentioned that he had sold only the piece of land and there is no mention about the sale of superstructure also. The fact that the assessee had sold residential building however stands proved with the following evidences:- a) Affidavit of the Tenant: In this affidavit, one Shri Narain Singh has stated that he used to reside in house situated at plot no. 380, Devi Nagar, New Sanganer Road, Jaipur during the period from Feb., 2005 to Dec., 2006 and two rooms, kitchen, Lat Bathrooms and Pakka Floor was there on this land. The said Shri Narain Singh has also given his Aadhar Car ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed by the appellant. The electrical bill cannot substitute the bills for construction of house more particularly, in absence of any explanation regarding the source for so called construction. The AO has examined all the facts in detail and has given reasonable findings on all the issues, therefore, no interference is required. As far as the issue regarding claim of deduction u/s 54 is concerned, it may be mentioned that it has been held in the preceding paragraphs that the sold property was not the residential house, therefore, the AO was justified in denying the benefit u/s 54 of the Act. Considering above, the appeal is dismissed. The ld DR accordingly supported the findings of the lower authorities and submitted that no interference is called for and the same may be confirmed. 26. We have heard the rival contentions and perused the material available on record. We refer to the findings of the AO which reads as under:- Perusal of sale deeds of assessee it is clear that the assessee has sold plots and not constructed house. This fact is clearly mentioned in the sale deeds as under- However in reply filed the assessee has repeatedly mentioned that he ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. Further the assessee has made investment of ₹ 5,61,000/- in house and the remaining investment was made in commercial and residential plots. This shows that the claim of the assessee u/s 54 of ₹ 15,87,604/- is clearly wrong. Considering all the facts narrated above the deduction claimed u/s 54 is disallowed. The assessee has denied to claim deduction u/s 54F therefore the same is not allowed during assessment proceedings. 27. We agree with the aforesaid findings of the AO that what has been sold is a plot of land and no constructed house has been sold and the claim of cost of construction and deduction under section 54 has been rightly rejected by him as there is no mention of constructed house in the sale deed. Further, there is nothing on record in terms of buyers confirmation/affidavit or photographs of the property at the time of sale which can corroborate that what has been purchased/sold is not just a plot of land but a plot of land along with constructed house thereon which could then have been verified by the Assessing officer. The affidavit of the tenant in terms of past tenancy and past electricity and water bills cannot come to the aid of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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