IN THE OFFICE OF THE
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COMMISSIONER OF INCOME TAX (APPEALS)-II,
Date of Order
Instituted on 11-06-2010 from the order of
| Smt. Anita Rinesh, ITO, Ward-5(2), Jaipur.
Name of the appellant.
| Sh. Ajay Kumar Jain, B-249, Janta Colony, Jaipur.
| Income-tax/ Wealth assessed
| Rs. 2,60,770/-
Income-tax/ Wealth-tax/Penalty/ Super-tax. Fine demanded
| Rs. 40,605/-
| Section under which the order appealed against was passed
| U/s 143(3) of the IT Act.
| Date of hearing
| As per order sheet.
Present for appellant
| Sh. Sidharta Ranka, CA / Sh. N.K. Baid, Advocate
| Present for department
APPELLATE ORDER AND GROUND OF DECISION.
The present appeal has been filed on 11.06.2010 against the assessment order passed U/s 143(3) of the I.T. Act by ITO, Ward-5(2), Jaipur. In this appeal, following grounds of appeal have been taken:- a)
That on the facts and in the circumstances of the case, the order passed by ld AO is bad in law and facts and based on perverse facts. b)
That on the facts and in the circumstances of the case, the ld AO grossly erred in treating amount of Rs 83,485/- as undisclosed investment U/s 69 of the Income Tax Act, 1961. c)
That on the facts and in the circumstances of the case, the ld AO grossly erred in imposing penalty U/s 271(1)(c) of the Income Tax Act, 1961 without any specific reason. d)
That on the facts and in the circumstances of the case, the ld AO grossly erred in disallowing 20% out of expenses debited in the profit and loss account under the heads conveyance expenses, mobile expenses, misc. expenses, petrol expenses, telephone expenses and office expenses when all the expenses are supported with proper bill/vouchers. e)
That on the facts and in the circumstances of the case, the ld AO grossly erred in making addition of Rs 63,820/- to the total income on account of household expenses without any specific reason. f)
That the petitioner may kindly be permitted to raise any additional or alternative ground at or before the time of hearing. 2.
In response to statutory notice, Sh. Sidharta Ranka, CA / Sh. N.K. Baid, Advocate, made compliance on behalf of the appellant and filed the letter dated 08.11.2011. The appellant has made various submissions before the undersigned which are placed on record. The various grounds of appeal are disposed off issue-wise in the succeeding paragraphs. 3.
The first ground of appeal is general in nature and does not require any specific adjudication from me. In the second ground of appeal, the appellant has challenged the addition of Rs 83,485/- on account of unexplained investment U/s 69 of the I T Act. Before me, the counsel of the appellant has argued that Section 50C targets the vendor or transferor of the property and not the purchaser or transferee. It is an accepted position in law that the legal fiction cannot be extended beyond the purpose for which it is enacted. Section 50C embodies the legal fiction by which the value assessed by the stamp duty authorities is considered as the full value of consideration for the property transferred. It cannot thus be extended to rope in the purchasers on the ground of undisclosed investment. In the case of Dinesh Kumar Mittal Vs ITO (193 ITR 770) (Allahabad), the Income-tax officer in the course of proceedings relating to AY 1984-85 had invoked the provisions of Section 69 of the Income Tax Act in the hands of purchaser by holding that the purchase consideration declared was less than the value determined for the purpose of stamp duty and made an addition of 50 percent of the difference in his hands. The said addition was upheld by AAC and the revision petition moved by the assessee was rejected by the CIT. The Allahabad High Court while holding that there was no rule of law to the effect that the value determined for the purpose of stamp...
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