Yogesh Kumar Sharma, Muzaffarnagar vs Assessee

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH 'H', NEW DELHI Before Sh. I. P. Bansal, JM And Sh. N. K. Saini, AM ITA No. 1841/Del/2014 : Asstt. Year : 2009-10 Shri Yogesh Kumar Sharma, Vs Income Tax Officer, Ward 2(1), S/o-Shri Kaluram, R/o-290, Muzaffarnagar Sarwategate, Muzaffarnagar-251001 (APPELLANT) (RESPONDENT) PAN No. AFUPS0215C Assessee by : Sh. Ashok Garg Revenue by : Sh. J. P. Chandrakar, Sr. DR Date of Hearing : 10.02.2015 Date of Pronouncement : 12.02.2015

ORDER Per N. K. Saini, AM:

This is an appeal by the assessee against the order dated 01.11.2013 of ld. CIT(A), Muzaffarnagar.

2. The assess has raised as many as 8 grounds, few of them are also having sub-grounds, however, the main grievance vide ground nos. 3 & 4 relates to the action of the ld. CIT(A) in not considering the grounds of appeal, additional grounds and written submissions. The said grounds read as under:

"3. That Ld. CIT(A) is not justified not to consider the ground of appeal, written submission and case law pronouns by Hon'ble Allahabad High Court and Hon'ble Supreme Court, filed during the appeal.

4. That the Ld. CIT(A) is not justified to reject the additional ground of appeal, in connection of 2 ITA No. 1841/Del/2014 Yogesh Kumar Sharma

assessment order 2009-2010 filed during the hearing the appeal."

3. The facts related to this issue in brief are that the assessee was deriving income from trading of Ayurvedic medicines and filed the return of income on 18.07.2011 declaring an income of Rs. 1,13,440/-. Subsequently, the AO initiated action u/s 147 of the Income Tax Act, 1961 (hereinafter referred to as the Act) by issuing notice u/s 148 of the Act dated 18.07.2011. In response to the said notice the assessee filed return declaring an income of Rs. 1,13,440/- on 06.09.2011. The AO, however, framed the assessment by making an addition of Rs. 25,00,000/- u/s 69 of the Act.

4. Being aggrieved the assessee carried the matter to the ld. CIT(A) and raised following grounds:

"1. That the assessment order as completed is wrong, illegal and against the fact.

2. The Ld. I.T.O. took the action on the basis of entries in Nagarpalika record but entries of Nagarpalika record is not conclusive for the ownership of house nor these entries confer any title in favour of that person whose name is entered in Municipal record.

Hence the proceeding u/s 148 of I.T. Act is totally wrong and illegal.

3. That Ld. I.T.O. invoked the provision of section 69 but assessee has not made any investment in any immovable property in assessment year 2009-10. So Ld. I.T.O. is not justify to invoked the provision of section 69.

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4. The Ld. I.T.O. has not material with him except the entries of municipal record to prove the ownership of house in the name of Yogesh Kumar Sharma.

5. That the Yogesh Kumar Sharma has filed an application before Nagarpalika for the payment of tax.

6. The Ld. I.T.O. has taken the value of property Rs. 2500000=00 without any proper basis. The value of this property was less then Rs. 1000000=00 as per circle rate.

7. The Ld. A.O has wrongly added Rs. 2500000=00 as investment of house, in the income of appellant."

5. The assessee also raised additional grounds which are reproduced by the ld. CIT(A) in para 3.1.1 of the impugned order and read as under:

"1. The appellant has filed an appeal before Your Honour's Office on 18.03.2013.

2. This appeal was against the assessment order dated 15.03.2013 passed u/s 143(3) by I.T.O, Ward 2(1), Muzaffarnagar.

3. That at the time of filing of appeal the appellant could not take all the important grounds of appeal which goes about the legality of assessment order and other aspects of the case. The additional grounds of appeal are attached herewith."

6. However, the ld. CIT(A) did not admit the additional grounds by observing that the assessee had not explained as to how additional grounds were not raised alongwith the appeal petition. As regards to the merits of the case the ld. CIT(A) confirmed the addition made by the AO by observing as under:

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"Regarding merits of addition it is observed that the AO had made addition of Rs. 25,00,000/- on the ground that as per Municipal records the impugned property was transferred in the name of the appellant as on 15.04.2004. Further, Sh. Anand Prakash Gautam who gave the residential house through WILL and general power of attorney dated 15.04.2004 to the appellant could furnish any documentary evidence to the effect that such property was owned by him through family settlement. In the assessment order the AO has mentioned that Sh. Anand Prakash Gautam at no point of time had given house property/gifts to his wife, sons and daughters. Therefore, the impugned property given through WILL/Power of Attorney to the appellant (wife's brother) was against human probabilities and also against the traditions of the society. The appellant has argued that the name was entered in the Municipal records due to payment of house tax and water tax and such action did not confer right to entitlement of the impugned property. However, such argument put forth has no basis in view of the fact that the impugned property was given to the appellant by way of WILL/Power of Attorney by Sh. Anand Prakash Gautam on 15.04.2004 and the impugned property was subsequently entered in name of the appellant on 06.06.2008 only to facilitate alleged payment of municipal taxes has no basis in as much as if the municipal taxes were in the name of Sh. Anand Prakash Gautam it could not have made any difference by transferring the same in the name of the appellant. The appellant has not been able to explain as to how the transfer of property in his name in the Municipal records facilitated payments of house tax and water tax. It is clear that the impugned property was actually owned by the appellant and there was remote possibility was being transferred to any other person by Sh. Anand Prakash Gautam and that was the reason why the appellant transferred the same in his name in the Municipal record. The appellant has not furnished requisite details and evidences and as such, has not discharged onus u/s 69 of the Act. Rather the AO has cogently discussed the impugned issue in the assessment order which is not repeated 5 ITA No. 1841/Del/2014 Yogesh Kumar Sharma

here for the sake of brevity. The case laws cited by the appellant are held as distinguishable in view of facts narrated above and the same are hereby rejected. Thus following the reasoning of the AO as elucidated in the assessment order, it is held that the AO was justified in making addition of Rs. 25,00,000/- u/s 69 of the Act. The same is hereby confirmed. Grounds of appeal Nos. 2 to 5 are dismissed.

7. Now the assessee is in appeal. The ld. Counsel for the assessee submitted that the additional ground raised before the ld. CIT(A) were purely legal grounds for which no investigation was required and the material relating to those ground was already available on the record. It was further submitted that the ld. CIT(A) did not discuss the written submissions of the assessee and confirmed the action of the AO without appreciating the fact in right prospective. It was further contended that the AO had also not considered the affidavit of the owner of the house Sh. Anand Prakash Gautam wherein it was stated that he was the owner and the assessee was residing as caretaker. It was further submitted that the assessee neither purchased the property nor it was transferred to him in the revenue record, therefore, the addition made by the AO and confirmed by the ld. CIT(A) was not justified. Alternatively, it was stated that the affidavit of Sh. Anand Prakash Gautam was furnished to the ld. CIT(A) first time, therefore, the issue may be restored to the AO to be decided afresh after considering the affidavit of the owner of the property and the material available on the record.

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8. In his rival submissions the ld. DR strongly supported the order of the authorities below and further submitted that the property in question was transferred in the name of the assessee as per the Municipal Record. Therefore, the addition u/s 69 of the Act was rightly made in the hands of the assessee, who did not offer any explanation regarding the source of investment in the said property.

9. We have considered the submissions of both the parties and carefully gone through the material available on the record. In the instant case, it is noticed that the ld. CIT(A) had not adjudicated the additional grounds raised by the assessee only for this reason that those were not taken initially while filing the appeal. However, it is well settled that the legal issue can be raised at any stage if no fresh investigation is required and all the facts are already available on the record. It also appears that the assessee furnished first time before the ld. CIT(A), an affidavit of Sh. Anand Prakash Gautam who was the owner of the house in which the assessee was residing, the said affidavit was not available to the AO, therefore, he has not commented on the contents of the affidavit. It is also noticed that the AO sought the information u/s 133(6) of the Act from Sh. Anand Prakash Gautam the brother-in-law of the assessee by stating in his letter dated 07.03.2013 that vide WILL dated 15.04.2004 the property bearing no. 165/1, Aryapuri, Muzaffarnagar had been given to the assessee and same had been transferred in his name on 06.06.2008 as per the Municipal record. However, nothing was brought on record to substantiate that the property was transferred in the revenue record and registered with 7 ITA No. 1841/Del/2014 Yogesh Kumar Sharma

the sub-Registrar of the area. Since, the affidavit of Sh. Anand Prakash Gautam was not considered by the AO and moreover the WILL would have been executed only after the death of the executor. In the present case the claim of the assessee that he was only a caretaker of the property was not rebutted. Therefore, the facts of the present case are not clear. We, therefore, considering the peculiar fact of the present case are of the view that it requires afresh adjudication at the level of the AO. In that view of the matter, the impugned order is set aside and the case is remanded to the file of the AO to be adjudicated afresh in accordance with law after providing due and reasonable opportunity of being heard to the assessee.

10. In the result, the appeal filed by the assessee is allowed for statistical purposes.

(Order Pronounced in the Court on 12/02/2015)

Sd/- Sd/-

(I. P. Bansal) (N. K. Saini) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 12/02/2015 *Subodh* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5.DR: ITAT ASSISTANT REGISTRAR