Dalip Singh v. Income Tax Officer, Muktsar

-|-SAILESH RANJAN2015.05.28 13:23I attest to the accuracy andintegrity of this document IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH ITA No284 of 2014Date of decision:25.05.2015 Dalip Singh Versus ....Appellant Income Tax Officer, Muktsar ...... Responden CORAM:HON'BLE MR.JUSTICE S.J.VAZIFDAR, ACTING CHIEF JUSTICEHON'BLE MR.JUSTICE G.S.SANDHAWALIA Present:Mr.Sandeep Goyal, Advocate, for the appellant. Mr.Rohit Kaul, Advocate, forMr.G.S.Hooda, for the respondent. ++++ S.J.Vazifdar, Acting Chief Justice(Oral): 1,This is an appeal against the order of the Income Tax AppellateTribunal, Amritsar (for short, the 'Tribunal') dated 27.03.2014 (Annexure A-7),upholding the decision of the Commissioner of Income Tax (Appeals) (for short,the 'CIT"), which in turn, computed the balance of the long term capital gains inrespect of the land sold by the appellant at 455,93,517/-. The matter pertains tothe assessment year 2006-07. |A search was conducted at the premises of one Rajan Setia. Thedocuments seized at the search reflected transactions between the said Mr. Setiand one Y.Lali, who in turn, had purchased various pieces of land|inter qliqfromthe appellant's brother. The documents seized indicated that the lands were soldat arate of about |=19,837/- per marla. In the re-assessment proceedings, it is thisrate which has been applied in the case of the appellant's transactions. onThe appeal is admitted on the following substantial questions of law: “1. Whether on the facts and circumstances of the case, the Ld. AOwas justified in framing assessment u/s 147 and applying the samesale price to tne land sola py the appellant, wnicn was sold inaaitferent year? 2. Whether on the facts and circumstances of the case, the Ld. AOwas justified in applying the same sale price to the land sold by theappellant vis-a-vis land sold by Shri Surjit Singh though the landswere sold by the appellant one year before the sale of land by snriSurjit Singh? 3. Whether on the facts and circumstances of the case, the Ld. AOwas justified in applying the same rate of sale price of land asapplied by Shri Surjit Singh even though the land of Shri Surjitsingh was located opposite to Office of Deputy Commissioner andwas on the road whereas property of the appellant was on back ofland of Shri Surjit Singh and would fetch lesser price?” 4By an order dated 06.02.2015, the earlier Division Bench noticed thesubmission on behalf of the appellant's counsel that the only argument that hepressed was that even if it is accepted that a contiguous piece of land was sold @419,000/- per marla, in the financial year 2006-07, the said rate could not beapplied to a transaction of the year 2005-06. The appellant's transaction pertainsto the year 2005-06. This concession was rightly made as the proceedings undersections 147 & 148 of the Income Tax Act, 1961 (for short, the 'Act') cannot befaulted. There were sufficient grounds for the authorities to believe that incomehad escaped assessment on account of the appellant's failure to point out all therelevant facts. 5 Prima facie, It does appear that the rate of aboutL5000/-, asimentioned in the documents pertaining to the appellant's transaction, are verylow. The only reason why we have decided to interfere with the orders of theauthorities is that there does not appear to be even any attempt at arriving at thereal/actual rate. There are certain aspects which require consideration. Forinstance, the rate of =19,837/- per marla was in respect of the transaction in the -3-SAILESH RANJAN2015.05.28 13:23I attest to the accuracy andintegrity of this document year 2006-07 whereas the appellant's transaction was in the previous year. Thereis a possibility, to say the least, of the prices having increased during the year.There are certain other aspects which require consideration such as the fact thatthe appellant's lands were not on the main road but behind those which abuttedthe main road and the lands that abutted the main road fetched the price of419,837/- per marla. -3-SAILESH RANJAN2015.05.28 13:23I attest to the accuracy andintegrity of this document year 2006-07 whereas the appellant's transaction was in the previous year. Thereis a possibility, to say the least, of the prices having increased during the year.There are certain other aspects which require consideration such as the fact thatthe appellant's lands were not on the main road but behind those which abuttedthe main road and the lands that abutted the main road fetched the price of419,837/- per marla. 6.The questions of law are, therefore, answered in favour of theassessee/appellant, only for this limited reason, namely, the authorities ought tohave made an effort to ascertain the price rather than merely relying upon the rateat which the lands were sold in the subsequent year. vaThe appeal is, accordingly, allowed. The impugned order dated27.03.2014 (Annexure A-7) is set aside and the matter is remanded to theAssessing Officer, only for the limited purpose of ascertaining the rate at whichthe appellant could have sold his lands. Considering the nature of the matter, wewould request the Assessing Officer to complete the exercise within 12 weeksfrom today. He shall not entertain any application for adjournment from theappellant. (S.J.Vazifdar)Acting Chief Justice 25.05.2015sailesh | (G.S.Sandhawalia)Judge