Shri Sampat Ram, Bhopal V. The ACIT 3(1), Bhopal

CO 51/IND/2011

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 7011 (ITAT-INDORE)
• Duration Of Justice: 3 month(s) 13 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 13-02-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 31-10-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S S DESH
• Assessee Lawyers: ARUN DEWAN
• Keywords: Additional evidence; Valuation report
• Section: 143(3)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO. 218/IND/2011 A.Y.2006-07 ASSTT. COMMISSIONER OF INCOME TAX 2(1) BHOPAL ... APPELLANT VS SHRI SAMPAT RAM BHOPAL PAN ADLPR 3852R ... RESPONDENT AND CO NO.51/IND/2011 (ARISING OUT OF ITA NO. 218/IND/2011) SHRI SAMPAT RAM BHOPAL ... OBJECTOR VS ASSTT. COMMISSIONER OF INCOME TAX 2(1) BHOPAL ... RESPONDENT 2 APPELLANT BY : SHRI ARUN DEWAN RESPONDENT BY : SHRI S.S. DESHPANDE DATE OF HEARING : 13.2.2012 DATE OF PRONOUNCEMENT : 13.2.2012 O R D E R PER JOGINDER SINGH, JUDICIAL MEMBER THE REVENUE IS AGGRIEVED BY THE ORDER DATED 10.3.2 011 PASSED BY THE LD. FIRST APPELLATE AUTHORITY, BHOPAL , WHEREAS THE ASSESSEE HAS ALSO FILED CROSS OBJECTION AGAINST THE AFORESAID ORDER. 2. THE GRIEVANCE RAISED BY THE REVENUE IS THAT ON T HE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LEARNED COMMI SSIONER OF INCOME TAX (APPEALS) ERRED IN GRANTING RELIEF OF RS .29,10,432/- OUT OF THE TOTAL ADDITION OF RS.39,95,365/- MADE UN DER THE HEAD CAPITAL GAIN AS THE ASSESSEE WAS NOT ABLE TO SUBS TANTIATE THE EXPENDITURE FROM THE RETURN OF INCOME FILED EARLIER THAT TOO BY ACCEPTING THE ADDITIONAL EVIDENCE DURING THE COURSE OF FIRST 3 APPELLATE STAGE WHICH IS VIOLATION OF RULE 46A OF T HE INCOME TAX RULES, 1962. 2. THE CRUX OF ARGUMENTS ON BEHALF OF THE REVENUE I S THAT THE LEARNED ASSESSING OFFICER RIGHTLY MADE THE ADDITION ESPECIALLY WHEN THE ASSESSEE DID NOT PRODUCE THE NECESSARY BIL LS WHEREAS THE LEARNED COUNSEL FOR THE ASSESSEE STRONG LY DEFENDED THE IMPUGNED ORDER BY SUBMITTING THAT THE NECESSARY DETAILS WERE VERY MUCH FILED BEFORE THE ASSESSING O FFICER AS WELL AS BEFORE LEARNED COMMISSIONER OF INCOME TAX ( APPEALS). IT WAS ALSO SUBMITTED THAT THE LEARNED ASSESSING OF FICER MERELY ALLOWED THE COST OF THE PLOT FOR WHICH OUR ATTENTIO N WAS INVITED TO THE COPY OF THE SALE DEED ANNEXED IN THE PAPER B OOK. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON FILE. BRIEF FACTS OF THE CASE ARE THAT THE MAIN SOURCE OF INCOME OF THE ASSESSEE IS FROM SALAR Y AND CAPITAL GAIN. DURING THE RELEVANT ASSESSMENT YEAR, THE ASSESSEE SOLD TWO PROPERTIES BY CLAIMING CAPITAL GA INS THEREON. 4 THE FIRST PROPERTY WAS SITUATED IN ARERA COLONY IN THE FORM OF HOUSE PROPERTY WHICH WAS SOLD ON 30.1.2006 AT RS.60 LACS. AS PER THE ASSESSING OFFICER, THE ASSESSEE DID NOT FURNISH NECESSARY EVIDENCE/DETAILS/EVIDENCES, DURING THE AS SESSMENT PROCEEDINGS IN RESPECT OF COST OF CONSTRUCTION AND COST OF IMPROVEMENT OF THE HOUSE AT ARERA COLONY, BHOPAL, T HEREFORE, HE DISALLOWED THE ENTIRE CLAIM OF COST OF CONSTRUCT ION AND IMPROVEMENT THEREON. THE ASSESSMENT WAS COMPLETED U/S 143(3) VIDE ORDER DATED 26.12.2008 BY MAKING THE AD DITION OF RS.39,95,365/-. 3.1 ON APPEAL, THE LEARNED COMMISSIONER OF INCOME T AX (APPEALS) CALLED FOR THE REMAND REPORT FROM THE LEA RNED ASSESSING OFFICER AND PERUSED THE VALUATION REPORT OF THE REGISTERED VALUER, SUBMITTED BY THE ASSESSEE ALONG WITH THE COST OF CONSTRUCTION AND INDEXATION AS ON 1.4.1981, ALLOWED THE CLAIM OF RS.39 LACS TOWARDS THE COST OF PLOT, GAVE A RELIEF OF RS.29,10,432/-. THE TAXABLE GAIN, FROM THE SALE OF THE RESIDENTIAL HOUSE WAS CALCULATED AT RS. 30,59,748/- AND 5 CONFIRMED THE REMAINING ADDITION OF RS.10,84,933/- WHICH IS UNDER CHALLENGE BEFORE THIS TRIBUNAL BY THE REVENUE . 3.2 BEFORE COMING TO ANY CONCLUSION, IT IS NECESS ARY TO PEEP INTO THE FACTS. THE ASSESSEE WAS RESIDING IN THE P ROPERTY IN QUESTION FOR THE LAST ABOUT 20 YEARS AND EVEN IN TH E SALE DEED THERE WAS A MENTION THAT THERE WAS ALREADY A RESIDE NTIAL HOUSE HAVING BUILT UP AREA OF 2400 SQ.FT. THE ASSESSEE, B EFORE THE REVENUE AUTHORITIES, ALSO ANNEXED THE PHOTOGRAPHS O F THE HOUSE ALONG WITH THE MAP APPROVED BY THE MUNICIPAL CORPORATION, BHOPAL, ALONG WITH THE SALE DEED. EVE N IN THE REMAND REPORT, THE ASSESSING OFFICER ACCEPTED THE E XISTENCE OF RESIDENTIAL HOUSE AT THE TIME OF PURCHASE OF PLOT A ND THE ASSESSEE TOOK ITS VALUE (BUILT UP AREA) AT NIL. TH E REPORT OF THE REGISTERED VALUER ALSO CERTIFIED THE EXISTENCE OF T HE HOUSE WHICH WAS SOLD ALONG WITH THE PLOT DURING THE YEAR UNDER CONSIDERATION (ASSESSMENT YEAR 2006-07). THE ASSES SEE CLAIMED THE COST OF IMPROVEMENT LIKE RENOVATION/ADD ITION, ETC. AT RS.10,22,512/- IN HIS RETURN. THE ASSESSEE BEFORE T HE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ALSO FURNISHED 6 NECESSARY BILLS. IT IS ALSO A FACT THAT THESE BILL S (WHICH WERE CLAIMED TO BE ADDITIONAL EVIDENCE BY THE REVENUE) W ERE NOT FURNISHED BEFORE THE ASSESSING OFFICER. IT IS PERT INENT TO MENTION HERE THAT THE LEARNED COMMISSIONER OF INCOM E TAX (APPEALS) SOUGHT REMAND REPORT FROM THE ASSESSING O FFICER QUA THESE BILLS AND THREE REMAND REPORTS WERE SENT BY T HE ASSESSING OFFICER AND THE SAME WERE CONSIDERED. SO FAR AS THE MARKET VALUE OF THE PLOT IS CONCERNED, THE SAME WAS VALUED AT RS.65/- PER SQ.FT. OF THE PLOT OF 6000 SQ. FT. TAKI NG THE AGGREGATE VALUE AT RS. 3.90 LACS AS ON 1.4.1981. AFTER CONSI DERING THE TOTALITY OF FACTS LIKE VALUATION REPORT, REMAND REP ORT, THE CLAIM OF RS.39 LACS TOWARDS THE COST OF PLOT AS ON 1.4.1981 WAS ALLOWED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) . SO FAR AS THE COST OF CONSTRUCTION IS CONCERNED, THE LEARN ED COMMISSIONER OF INCOME TAX (APPEALS) ADOPTED THE SA ME AT RS.2,01,600/- (2400 SQ.FT. X RS. 84) AS AGAINST RS. 2,88,000/-, CLAIMED BY THE ASSESSEE AND CERTIFIED BY THE REGIST ERED VALUER. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) AL LOWED RS.5,91,600/- AS COST OF PLOT AND CONSTRUCTION THER EON AS ON 7 1.4.1981 (RS.3,90,000 + RS. 2,01,600) RESULTING INT O TAXABLE CAPITAL GAIN AT RS.30,59,748/- FROM THE SALE OF THE HOUSE SITUATED AT ARERA COLONY AND CONFIRMED THE REMAININ G ADDITION OF RS.10,84,933/-. IN VIEW OF THESE FACTS, WE FIND NO INFIRMITY IN THE CONCLUSION DRAWN BY THE LD. FIRST APPELLATE AUT HORITY. IT IS AFFIRMED. 3.3 SO FAR AS THE GRIEVANCE OF THE REVENUE THAT THE ADDITIONAL EVIDENCE WAS ACCEPTED BY THE LD. FIRST APPELLATE AU THORITY, WHICH IS IN VIOLATION OF RULE 46A OF THE INCOME TAX RULE S, 1962, IS CONCERNED, THERE IS UNCONTROVERTED FINDING THAT THE LEARNED ASSESSING OFFICER WAS PROVIDED SUFFICIENT OPPORTUNI TY AND THE ASSESSING OFFICER SENT THREE REMAND REPORTS WHICH W ERE DULY CONSIDERED BY THE LEARNED COMMISSIONER OF INCOME TA X (APPEALS) WHILE COMING TO A PARTICULAR CONCLUSION. IT IS ALWAYS NOT NECESSARY THAT THE ASSESSEE BE LEFT IN THE LURC H TO BECOME A ROLLING BALL BETWEEN THE AUTHORITIES ESPECIALLY W HEN REMAND REPORTS WERE CALLED FOR FROM THE ASSESSING OFFICER AND THE SAME WERE DULY CONSIDERED, THEREFORE, WE ARE OF THE CONSIDERED OPINION THAT THERE IS NO VIOLATION OF RU LE 46A OF THE 8 INCOME TAX RULES AS HAS BEEN ASSERTED BY THE LEARNE D SR. DR. IN VIEW OF THESE FACTS, WE FIND NO INFIRMITY IN THE CONCLUSION DRAWN BY THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS), CONSEQUENTLY, IT IS AFFIRMED. 4. THE ASSESSEE THROUGH ITS CROSS OBJECTIONS, THOUG H HAS TAKEN THREE GROUNDS, BUT AT THE TIME OF HEARING, DI D NOT PRESS THE GROUND NO. 1 AND 3 WHICH RELATE TO SERVICE OF N OTICE AND ESTIMATION OF VALUE FOR THE PURPOSE OF CAPITAL GAI N. THE ONLY GROUND IN THE CROSS OBJECTIONS, REMAINED FOR OUR CO NSIDERATION IS WITH RESPECT TO ESTIMATING THE COST OF CONSTRUCT ION AT RS. 2,01,600/- AGAINST RS. 2,88,000/- VALUED BY THE APP ROVED VALUER. 4.1 THE CRUX OF ARGUMENTS ON BEHALF OF THE ASSESSEE IS IDENTICAL TO THE GROUND RAISED. ON THE OTHER HAND, THE LEARNED SR. DR DEFENDED THE IMPUGNED ORDER. 4.2 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL AVAILABLE ON FILE. ON PERUSAL OF RECO RD WE FIND THAT THE ASSESSEE CLAIMED A SUM OF RS.5,61,000/- TOWARDS THE COST 9 OF COMPLETE RENOVATION/ADDITION/ALTERATION, ETC. WH ICH WAS CLAIMED TO BE ON THE BASIS OF INVOICES AVAILABLE WI TH THE ASSESSEE. ADMITTEDLY, ALL THESE BILLS WERE NOT PRO DUCED BEFORE THE ASSESSING OFFICER WHEREAS THE ASSESSEE CLAIMED THE IMPROVEMENT IN DIFFERENT YEARS AND THE PHOTOCOPIES OF THE BILLS WERE PRODUCED FOR ONE YEAR ONLY. CONSIDERING THEN TOTALITY OF FACTS, THE CLAIM OF THE ASSESSEE IS ACCEPTED ONLY T O THE TUNE OF RS. 5 LACS IN PLACE OF RS.5,61,000/-. THE ASSESSING OFFICER IS DIRECTED TO CALCULATE THE RELIEF ACCORDINGLY, THERE FORE, THIS CROSS OBJECTION OF THE ASSESSEE IS PARTLY ALLOWED. THIS ORDER WAS PRONOUNCED IN THE OPEN IN THE PRESENCE OF LEARNED REPRESENTATIVES FROM BOTH THE SIDES AT THE CONCLUSION OF THE HEARING ON 13.2.2012. SD SD (R.C.SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 17.2.2012 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, GU ARD FILE DN/- 10 1314