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TMI Blog2016 (6) TMI 1445X X X X Extracts X X X X X X X X Extracts X X X X ..... atisfaction which did not pertain to the assessee. The assessment framed under such proceedings therefore should be quashed. 2. That the notice issued u/s 148 is invalid since it is issued after formation of belief which are not relevant to the assessee and also refer to the escapement of income within the meaning of section 147(a) of the I.T. Act which has been abolished w.e.f. 1.4.1989. 3. That the notice issued u/s 148 has been issued to assess the capital gain income of Rs.3,14,16,437/- which has not arisen to the assessee in his individual capacity. Hence, the proceedings initiated by him are not sustainable and should be quashed. 4. That the assessment has been framed u/s 143(30 read with section 144 of the Act and not with 147 of the Act therefore the assessment is barred by limitation. 5. That the assessment was required to be framed u/s 153C of the Act and thus assessment framed u/s 143(3) of the Act is illegal, void abinitio. 6. That CIT(A) was not justified in sustaining the capital gain income to the extent of Rs.72,85,000/- against Nil income working given to the CIT(A). 7. That while sustaining the capital gain stated above the CIT(A) has wrongly restricte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... voking the provisions of section 144 of the Act, making an addition of Rs.3,14,16,437/-, as unexplained /undisclosed capital gain of sale of land. The ld. CIT(A), while passing the impugned order observed as follows: "7. I have considered the facts of the case, the arguments of the AR during assessment proceedings as well as appellate proceedings. The comments of the AO during remand proceedings have also been considered. It is seen that the assessee had claimed that an amount of Rs.3,17,60,750/- had been paid to 11 persons for evicting them from the impugned piece of land before the transaction could be finalized for sale. The details regarding the eviction money paid to different persons had been submitted during the appellate proceedings and the AO has verified the contentions of the assessee in this regard to be correct. Since the said amount paid as earnest money had to be paid for ensuring the smooth sale of the impugned property the said amount has to be reduced from the gross sale consideration to work out the net sale consideration for the purposes of computation of Capital Gain. The AO has commented in the remand report that the assessee had claimed to have invested an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istration deed which is only document that certifies the sale consideration for transfer of property rights passed on from seller to the buyer. The documents like agreement to sell are only meant to ensure the smooth completion of transaction of purchase and sale over a period of time and cannot be substituted for final document i.e. registration deed. Therefore, the amount invested by the assessee for purchase of agricultural land to be considered u/s 54 would be restricted to sale consideration as recoded in the remand report. 8. Further, it is seen that the assessee had worked out the resultant capital gain on the basis of fair market value of the impugned property as on 01.04.1981 at Rs.2923/- per marla. However, no evidence to support the said claim had been filed. The AR was therefore, required to substantiate his claim on the issue. The AR vide his letter dated 14.10.2014 submitted his arguments as under: 'Kindly refer to the appellate proceedings in the above case and on the last date of hearing your honours had directed the assessee to justify the value adopted at Rs.20 lacs as on 1.4.1981 for working out the indexation. In this context, it is submitted as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the valuation adopted by the appellant at Rs.2923/- per marla as on 01.04.1981 is reasonable and therefore acceptable. The computation of capital gain in view of the above comes to NIL." 5. Before us, on behalf of the assessee, the following written submissions have been filed, which have been reiterated in the arguments addressed by the ld. Counsel for the assessee: "The brief facts of the case are that a search took place in the premises of Neeraj Puri s/o Yog Raj Puri on 3.4.2012 and during the search number of sale deeds and power of attorney and bank accounts relating to Mr. Neeraj Puri and other parties were found by the department and a sale deed executed by the assessee was also recovered from the premises of the searched person i.e. Mr. Neeraj Puri and the mention of this sale deed is available in the appraisal report of search available on page 1 of the paper book on page 16,36, 38 & 47 of the paper book which may kindly be referred to. Thus, it is very clear from the appraisal report that the sale deed executed by the assessee came into the knowledge of the department in search proceeding of Mr. Neeraj Puri group. After the search a detailed appraisal report was pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent was to be framed u/s 153C? In this regard your kind attention is drawn towards the judgment of this very Amritsar Bench delivered in the case of ITO vs. Arun Kumar Kapoor re[ported in 140 TTJ 249 copy available on paper book page 103. The Bench has concluded that reassessment u/s 147 on the basis of incriminating material against assessee found in search of third party and forwarded to AO of assessee by the Search Officer was illegal and void ab initio and in such a situation asstt. Could be made only u/s 153C which specifically ousted the application of ss. 147/148. Even otherwise in the case of other assesses who were also transferred by the CIT alongwith the case of the assessee u/s 127 to the CC-I the asstt. orders passed in such cases have been passed u/s 153C of the Act. Copies of such orders are available on pages 77 to 100 of the paper book. A clear finding in such asstt. Orders has been given by the same AO that Since the documents relating to the assessee were found from the residence of Sh. Neeraj Puri Prop. Of Bhagwati Agriculture Farms Jalandhar during the course of search. Notice u/s 153C of the I.T.Act, 1961 were issued." In view of the same as a matter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the assessment does not refer to any such search; that the belief of escapement of income, as formed by the AO, was not formed on the basis of any such search, but was formed on the basis of information in the possession of the AO; that the assessee had sold land measuring 811 Marlas to D.A.V. College Trust and Management Society, New Delhi, for Rs.3,44,67,500/-; that the assessee is basing his grievance on the Appraisal Report (APB 1 to 76); that this appraisal report does not have any relevance whatsoever to the case of the present assessee and it cannot be led in additional evidence as sought by the assessee; and that the assessment has properly been framed by invoking the provisions of section 148 of the Act. 8. Since the provisions of section 153C of the Act have been alleged to be directly applicable, let us see these provisions. Section 153C(1) of the Act reads as follows: "Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that....(a) any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment, as made by the AO under the provisions of section 148, is fully justified, not calling for any interference. 12. In 'Manish Maheshwari vs. ACIT & Anr.', 289 ITR 341 (SC), it has been observed that if the procedure laid down in section 158BD of the Act is not followed, block assessment proceedings would be illegal. Now, it cannot be disputed that the provisions of section 153C of the Act are exactly in pari materia with those of section 158BD. Therefore, besides the fact that section 153C(1) itself has clearly ousted the applicability of sections 147/148, where conditions are conducive for the applicability of section 153C, as rightly taken note of in 'Arun Kumar Kapoor' (supra), section 153C eclipses, nay, obliterates the applicability of section 153C/148 in given circumstances. In the present case, the incriminating material qua the assessee came to light only in the search conducted on the premises of Sh. Neeraj Puri. It is true that the reasons recorded (reproduced hereinabove) to reopen the completed assessment of the assessee do not make mention of either the search conducted on the premises of Sh. Neeraj Puri, nor of the appraisal report in that case. The reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5,000/-. 13. In view of the above facts, finding the Appraisal Report to be of utmost relevance for the issue at hand, we direct this Appraisal Report to be taken on record by way of additional evidence, to facilitate a just decision. 14. Now, it is evidence from the Appraisal Report in the case of Sh. Neeraj Puri, as noted hereinabove, that the sale deed of the assessee was found only during the search in the case of Sh. Neeraj Puri. That being so, the provisions of section 153C of the Act are directly applicable. To reiterate, the Hon'ble Supreme Court, in the case of 'Manish Maheshwari' (supra), has laid down that if the procedure in section 158BD is not followed, block assessment proceedings would be illegal. It is irrefutable that the provisions of section 153C of the Act are in pari materia with those of section 158BD. Therefore, as taken note of, if the procedure laid down in section 153C is not followed and recourse is not taken to section 158BD, the same would be bad in law. 'Arun Kumar Kapoor' (supra) is also to the same effect. In accordance therewith, we hold that the proceedings u/s 148 of the Act, as rightly contended on behalf of the assessee, are not sustainable, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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