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TMI Blog2025 (1) TMI 1161X X X X Extracts X X X X X X X X Extracts X X X X ..... me from other sources of Rs. 61,20,000 u/s 56(2)(x)(b) of IT Act. 3. In law and in the facts and circumstances of the Appellant's case, the learned Commissioner of Income Tax (Appeals) has grossly erred in confirming the demand of Rs 22,59,772. 4. In law and in the facts and circumstances of the Appellant's case, the learned Commissioner of Income Tax (Appeals) has grossly erred in not deciding ground regarding charging of the interest u/s 234A of Income Tax Act of Rs. 1,07,605. 5. In law and in the facts and circumstances of the Appellant's case, the learned Commissioner of Income Tax (Appeals) has grossly erred in confirming the penalty proceedings u/s 274 r.w.s 270A of the Act I.T. Act." 3. Solitary issue in the present appeal relates to the addition made to the income of the assessee on account of immovable properties purchased by it for a consideration less than the stamp duty value. The difference between the two being added to the income of the assessee in terms of the provisions of section 56(2)(x) of the Act. The specific facts relating to the property purchased by the assessee being that it pertained to plots of land at Chandlodiya, Ahmedabad, iden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 2,05,000/-. It is also mentioned that differential amount of 61,20,000/- (63,25,000 - 2,05,000) should not be treated as income from other sources ujs.56(2)(x)(b) of I.T. Act. In this respect, I humbly wish to submit as under. 1) Firstly, it is submitted that I purchased the two land plots at Chandlodiya, Ahmedabad for aggregating sum of Rs. 2,05,000/- comprising of two payments. 2) The one land was acquired on 27-03-2008 for payment of Rs. 1,00, OOO/-. The copy of sale deed is enclosed herewith which shows that I acquired asset. The possession was also given to me. Copy enclosed marked as Annexure-A. 3) The second land was acquired on 10-11-2010 for payment of Rs. 1,05,000/-. The possession was also given to me. The copy of sale deed is enclosed herewith Annexure-B. 4) Later on, the sale deed of both land plots was again executed again on 17- 09-2019. Copy enclosed marked as Annexure-C. 5) This shows that first land was acquired in March, 2008 and second land was acquired in November, 2010. The possession of the land plots were also taken on respective dates. Not only that but even in the sale deed dt 17-09- 2019, the reference of possession in the year 2008 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting assesses submission of the impugned properties not being purchased in the impugned year, having been paid for and possession taken in earlier years, all facts duly substantiated with evidence. 8. The situation before the ld.CIT(A) is no better. In fact, it is even worse. Taking the opportunity of hearing before the ld.CIT(A), the assessee filed a detailed submissions before him, which were placed before us in the paper book at page no.53 to 61, wherein he reiterated the contentions made before the AO that the addition made were unjustified and not in accordance with law, for the reason that the properties were not purchased in the impugned year at all. The documentary evidences in this regard, placed before the AO were also placed before the ld.CIT(A). The assessee also referred to several case law in this regard before the ld.CIT(A). The ld.CIT(A) unfortunately follows the same pattern for passing his order as that of his subordinate, passing again a non-speaking order while dismissing assesses appeal. Without any discussion about the assesses detailed submissions made before him, the Ld.CIT(A) confirms the order of the AO stating that the assessee has given no reason for re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w that the assessee had repeatedly stated the reasons for considering purchase of property in 2008 and 2010 being that he had made all payments for the purchase of the impugned plots of land and even the possession of the said land in those years, and it was primarily for this reason that he had contended that the purchase of land be treated in these impugned year and not in the year when only the technical formality of registering the purchase of land was done. Clearly both the authorities below have passed non-speaking orders. There is no reason at all in the orders of the authorities below for rejecting assesses explanation and invoking section 56(2)(x) of the Act. Resulting in no clarity as to what finding is to be challenged in appeal against the said orders. Such orders are violative of the principles of natural justice embodied in the maxim audi alteram partem which demand justice not only to be done but also appear to be done. 11. Courts have time and again reiterated that the recording of reasons in support of an order is a basic principle of natural justice, and this rule must be observed in its proper spirit. That mere pretense of compliance with it would not satisfy t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fied, which one it was. The Hon'ble High Court noted, the order did not give reasons in support of its finding, and therefore did not show that the Board had applied its mind to a question on hand, and the order of the Board was accordingly held to be non-sustainable. The relevant finding of the Hon'ble Court in this regard are as under: "4. Mr. V. S. Desai has challenged the impugned order on the ground that it is not a speaking order and it does not show on the face of the record that the Board had applied its mind to the question at issue. The second ground of challenge is that the reasons given in the counter-affidavit do not in law make out any sufficient ground to reject the application of the petitioner and to refuse it the exemption it had applied for. 5. I have heard the learned counsel for the parties. The impugned order is annexure "F" and it reads as follows: "I am directed to refer to your letter dated the 9th June, 1961, on the above-mentioned subject and to say that since all the conditions laid down in Notification No. 47 dated the 9th December, 1933, are not satisfied by the company, the Board regrets it is not possible to approve the company as an investme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itioners, the court observed that it was not possible to accept the contention that no reasons had been given as to why the permission had been refused and, therefore, it must follow that the decision was arbitrary; the statute did not require recording of reasons by the Income- tax Officer, nor did the Act require that the reasons for refusal ought to have been communicated to the assessed ; the matter being in the discretion of the Income-tax Officer, it was not possible to accept the suggestion that the reasons why discretion had not been exercised in favor of the assessed must be put on record and the same should be communicated to the assessed. Section 3(4) of the Income-tax Act of 1961 provides that where the assessed has once exercised the option to have a particular previous year with respect to a particular source of income, then he shall not be entitled to vary the same except with the consent of the Income-tax Officer and upon such conditions as the Income-tax Officer may think fit to impose. In the absence of such consent, the assessed had no right to alter the previous year. In the context of the statutory provisions, the observations have been made by this court on wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ority itself. Hon'ble High Court's finding in this regard are as under: "5. It is needless to emphasise that the order or judgment should be self-explanatory. It should not keep the higher court guessing for reasons. Reasons provide a live-link between conclusion and evidence. That vital link is the safeguard against arbitrariness, passion and prejudice. Reason is a manifestation of the mind of the court or Tribunal. It is a tool for judging the validity of the order. It gives an opportunity to the higher court to see whether the impugned order is based on reasons and that the reasons are based on adequate legal and relevant material. Giving reasons is an essential element of administration of justice. A right to reasons is, therefore, an indispensable part of a sound system of judicial review. Reasoned decision is not only for the purpose of showing that the citizen is receiving justice, but also a valid discipline for the authority itself. Therefore, stating of reasons is one of the essentials of justice. In this case, the appellate authority being the final authority on the facts was obliged to appreciate the evidence, consider the reasoning of the primary or lower authority a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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