KISHINI M MIRCHANDANI, MUMBAI V. ITO 22(1)(3), NAVI MUMBAI

CO 7/MUM/2013

• Counselvise Citation: [2013] 122 COUNSELVISE.COM (IT) 8378 (ITAT-MUMBAI)
• Duration Of Justice: 22 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 06-02-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2007-2008
• Appeal Filed On: 15-01-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Corroborative evidences
• Section: 143(3); 50C; 2(14); 142(1); 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI , ' #$ %. ' , ( #$ #) BEFORE SHRI DINESH KUMAR AGARWAL, JM AND SHRI D. KARUNAKARA RAO, AM #./ I.T.A. NO. 639/MUM/2012 ( ' + ,+ ' + ,+ ' + ,+ ' + ,+ / / / / ASSESSMENT YEAR : 2007-08) INCOME-TAX OFFICER 22(1)(3), R. NO. 406, 4 TH FLOOR, TOWER NO. 6, VASHI RAILWAY STATION COMPLEX, VASHI, NAVI MUMBAI 400705. / VS. MS. KISHINI M. MIRCHANDANI, FLAT NO. 7, 2 ND FLOOR, NEW SINDHI BLDG CHS, RAJAWADI, GHATKOPAR (E), 7 TH ROAD, OPP. ANDHARA BANK, MUMBAI 400 077. $- ( #./ PAN : ANOPM3241Q ( -. / // / APPELLANT ) .. ( /0-. / RESPONDENT ) /0) #./ C.O. NO. 07/MUM/2013 ARISING OUT OF ITA NO. 639/MUM/2012 ( ' + ,+ ' + ,+ ' + ,+ ' + ,+ / / / / ASSESSMENT YEAR : 2007-08) MS. KISHINI M. MIRCHANDANI, FLAT NO. 7, 2 ND FLOOR, NEW SINDHI BLDG CHS, RAJAWADI, GHATKOPAR (E), 7 TH ROAD, OPP. ANDHARA BANK, MUMBAI 400 077. / VS. INCOME-TAX OFFICER 22(1)(3), R. NO. 406, 4 TH FLOOR, TOWER NO. 6, VASHI RAILWAY STATION COMPLEX, VASHI, NAVI MUMBAI 400705. $- ( #./ PAN : ANOPM3241Q ( -. / // / APPELLANT ) .. ( /0-. / RESPONDENT ) ITA NO. 639/MUM/2012& CO 07/M/13 2 3$ 4 5 # / DEPARTMENT BY : SHRI SURINDER JIT SINGH ' +>? 4 5 # / ASSESSEE BY : SHRI MEHUL SHAH # 4 ?( / // / DATE OF HEARING : 30-01-2013 @A, 4 ?( / DATE OF PRONOUNCEMENT : 06-02-2013 / O R D E R PER DINESH KUMAR AGARWAL, JM. : THE APPEAL PREFERRED BY THE REVENUE IS DIRECTED AGA INST THE ORDER DATED 28-11-2011 PASSED BY THE LD. CIT(A) 33, MUMBAI, F OR THE ASSESSMENT YEAR 2007-08 AGAINST WHICH THE ASSESSEE HAS ALSO FILED C .O. THE REVENUES APPEAL AND ASSESSEES C.O. ARE DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE AS SESSEE AN INDIVIDUAL DERIVES INCOME FROM PENSION, HOUSE PROPERTY, CAPITA L GAIN ON SALE OF PROPERTY AND INCOME FROM OTHER SOURCES BEING INTEREST AND DI VIDEND ETC. THE RETURN WAS FILED DECLARING TOTAL INCOME OF RS. 4,98,000/-. TH E A.O. AFTER PROCESSING THE RETURN U/S 143 (1) OF THE INCOME TAX ACT, 1961 (THE ACT), SELECTED THE CASE FOR SCRUTINY AND ACCORDINGLY ISSUED STATUTORY NOTICES U /S 143(2) AND 142(1) OF THE ACT. DURING THE COURSE OF ASSESSMENT PROCEEDING IT WAS, INTER ALIA, OBSERVED BY THE A.O. THAT THE ASSESSEE HAS DECLARED TAXABLE LONG TERM CAPITAL GAIN OF RS. 3,66,610/- ON SALE OF RESIDENTIAL FLAT NO. 12, IST FLOOR, VANDANA BUILDING, VANDANA CO.OP.HSG. SOCIETY, BANDRA (W), MUMBAI -50. THE SAID RESIDENTIAL PROPERTY WAS SOLD FOR A CONSIDERATION OF RS. 62 LAC S TO MRS. MEERA PARWANI AS ITA NO. 639/MUM/2012& CO 07/M/13 3 PER SALE AGREEMENT DTD. 25-5-2006 FILED BY THE ASSE SSEE. HE FURTHER OBSERVED THAT BY ANOTHER AGREEMENT DTD. 28-5-2006, THE ASSES SEE HAS ALLEGED TO HAVE SOLD FURNITURE AND FIXTURES TO MRS. MEERA PARWANI F OR A CONSIDERATION OF RS. 20 LACS. THE ASSESSEE WAS ASKED TO EXPLAIN AS TO WHY THE ENTIRE AMOUNT OF RS. 82 LACS BEING SALE VALUE OF RESIDENTIAL FLAT AS DECLAR ED BY THE ASSESSEE AND THE CONSIDERATION RECEIVED ON SO CALLED SALE OF FURNITU RE AND FIXTURES SHOULD NOT BE TREATED AS COST OF THE IMPUGNED PROPERTY AND TAXED ACCORDINGLY. THE ASSESSEE WAS ALSO ASKED TO FILE COPIES OF PURCHASE BILLS FOR THE PURCHASE OF FURNITURE AND FIXTURES FOR VERIFICATION. IN RESPONSE, IT WAS SUB MITTED THAT THE ASSESSEE HAS RECEIVED RS. 20 LACS BEING TOTAL SALE CONSIDERATION OF SALE OF FURNITURE & FIXTURE, WASHING MACHINE, AIR CONDITIONERS, REFRIGERATOR, MI CROWAVE-OVEN, AQUA GUARD, SOFA SETS, GEYSER AND OTHER FITTINGS IN THE WALLS A ND MODULAR KITCHEN ETC. AS DESCRIBED IN THE AGREEMENT DATED 28-05-2006. AS RE GARDS PURCHASE BILLS/EVIDENCES FOR PURCHASE OF SAID FURNITURE AND FIXTURES AND OTHER ASSETS, IT WAS STATED THAT ASSESSEE IS AT PRESENT 74 YEARS OLD AND A SPINSTER AND NOT KEEPING GOOD HEALTH FOR LAST FEW YEARS AND STAYING ALONE. SOME OF THE FURNITURE AND FIXTURES WHICH WAS SOLD DURING THE YE AR UNDER CONSIDERATION WERE PURCHASED BY HER FATHER LATE MR. M.M. MIRCHAND ANI DURING HIS LIFE TIME AND SOME ANTIQUE FURNITURE AND FIXTURE WERE INHERIT ED BY MR. M.M. MIRCHANDANI WHICH WAS OF HIGH SALE VALUE. THE SAME WAS INHERITED BY THE ASSESSEE WHEN HER FATHER MR. M.M. MIRCHANDANI DIED ON 8-9-1986. AT PRESENT, SUPPORTING EVIDENCES FOR THE PURCHASE OF THE SAME A RE NOT AVAILABLE WITH THE ASSESSEE AS THE MATTER IS VERY OLD AND THEY ARE OF PERSONAL EFFECT. THE ITA NO. 639/MUM/2012& CO 07/M/13 4 AGREEMENT FOR SALE OF FURNITURE & FIXTURES DTD. 28- 5-2006 SIGNED BY BOTH THE PARTIES WHERE THE PURCHASER HAS CONFIRMED HAVING PU RCHASED THE FURNITURE & FIXTURES AND OTHER ITEMS AS DESCRIBED IN THE SAID A GREEMENT AND AS SUCH THE SAID ASSETS CANNOT BE CONSIDERED FOR THE PURPOSE OF CAPITAL GAIN IN VIEW OF THE FACT THAT THE SAME ARE OUTSIDE THE PURVIEW OF THE D EFINITION OF CAPITAL ASSETS AS DEFINED IN SECTION 2(14) OF THE ACT. THE A.O. AF TER CONSIDERING THE ASSESSEES EXPLANATION OBSERVED THAT THE SO CALLED ASSETS MIGH T HAVE BEEN PURCHASED BY MR. M.M. MIRCHANDANI, FATHER OF THE ASSESSEE DURING HIS LIFE TIME AND THE ASSESSEE HERSELF OVER A PERIOD OF TIME, HOWEVER, IN THE ABSENCE OF ANY PROOF, HE HAS TAKEN THE COST OF ASSET AT RS. NIL AND TREATED THE AMOUNT OF RS. 20 LACS RECEIVED BY THE ASSESSEE AS PART OF SALE CONSIDERAT ION I.E. RS. 82 LACS AS AGAINST RS. 62 LACS DECLARED BY THE ASSESSEE AND ACCORDINGL Y COMPUTED THE LONG TERM CAPITAL GAIN AT RS. 23,66,610/- AS AGAINST RS. 3,66 ,610/- SHOWN BY THE ASSESSEE AND THEREBY COMPLETED THE ASSESSMENT AT AN INCOME OF RS. 24,91,000/- VIDE ASSESSMENT ORDER DTD. 14-12-2009 P ASSED U/S 143(3) OF THE ACT. 3. ON APPEAL, THE LD. CIT(A) WHILE OBSERVING THAT T HE SALE OF FURNITURE AND FIXTURES OF THE FLAT ITSELF CANNOT BE CONSIDERED AS PART OF THE PRICE OF THE FLAT WHEN THE ACTUAL SALE CONSIDERATION OF THE FLAT ITSE LF IS HIGHER THAN THE STAMP DUTY VALUATION DONE FOR THE PURPOSE OF LEVY OF STAM P DUTY, DELETED THE ADDITION MADE BY THE A.O. ITA NO. 639/MUM/2012& CO 07/M/13 5 4. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A) T HE REVENUE IS IN APPEAL BEFORE US TAKING FOLLOWING GROUNDS OF APPEAL:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN DIRECTING THE ASSESSING OFFICER TO ADOPT SALE PROCEEDINGS ON THE RESIDENTIAL FLAT TO RS. 62 LACS AS AGAINST RS. 82 LACS TAKEN BY THE ASSESSING OFFICER AS SALES PROCEEDS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A) ERRED IN GIVING THE IMPUGNED RELIEF AFTER AC CEPTING THE ASSESSEES CONTENTION THAT RS. 20 LACS WAS RECEIVED ON ACCOUNT OF SALE OF FURNITURE & FIXTURES, WASHING MACHINES, AIR CONDITIONS, REFRI GERATOR, MICROWAVE OVEN, ACQUA GUARD, SOFA SETS, GEYSER AND OTHER FITT INGS IN THE WALLS, MODULAR KITCHEN, ANTIQUE FURNITURE AND FIXTURES ETC WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE FAILED TO DISCHARGE THE PRIMARY ONUS OF PROVING THE OWNERSHIP OF THE ABOVE ASSETS BEFORE THE ASSESS ING OFFICER. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A) ERRED IN GIVING THE IMPUGNED RELIEF AFTER HO LDING THAT THE ABOVE ASSETS WERE PART OF PERSONAL AFFECT AND THEREBY WAS COVERED BY THE PROVISIONS OF SECTION 2(14) OF THE INCOME TAX ACT A ND WAS THEREFORE BEYOND THE PURVIEW OF CAPITAL GAINS WHEREAS EVEN TH E EXISTENCE OF ASSETS WAS NOT ESTABLISHED. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A) ERRED IN GIVING THE IMPUGNED RELIEF BY INVOK ING THE PROVISIONS OF SECTION 50C WITHOUT APPRECIATING THE FACT THAT THE ASSESSING OFFICER HAS NOT DEALT THE ISSUE UNDER THIS PROVISION AND THE AS SESSING OFFICER IN ABSENCE OF DOCUMENTARY EVIDENCE HAS HELD THE SALE O F ABOVE ASSET AS COLOURABLE DEVISE TO EVADE CAPITAL GAINS ON THE ACT UAL SALE PROCEEDS. 5. AT THE TIME OF HEARING THE LD. D.R. SUBMITS THAT FOR THE REASONS AS MENTIONED IN THE ASSESSMENT ORDER, THE LD. CIT(A) W AS NOT JUSTIFIED IN DELETING THE ADDITION MADE BY THE A.O. HE, THEREFORE, SUBMI TS THAT THE ADDITION MADE BY THE A.O. BE RESTORED 6. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSES SEE WHILE REITERATING THE SAME SUBMISSIONS AS SUBMITTED BEFORE THE LD. CIT(A) FURTHER SUBMITS THAT IN ITA NO. 639/MUM/2012& CO 07/M/13 6 VIEW OF THE FINDING RECORDED BY THE LD. CIT(A), THE ORDER PASSED BY HER BE UPHELD. 7. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE RIVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND T HAT THERE IS NO DISPUTE THAT THE FLAT WAS SOLD BY THE ASSESSEE FOR A CONSIDERATI ON OF RS. 62 LACS VIDE REGISTERED SALE DEED DTD. 25-5-2006 AS AGAINST THE STAMP DUTY VALUATION OF RS. 59,06,040/-. WE FURTHER FIND THAT BY ANOTHER NOTAR IZED AGREEMENT DTD. 25-5- 2006 THE ASSESSEE HAS ALSO SOLD FURNITURE & FIXTURE S, WASHING MACHINE, AIR CONDITIONERS, REFRIGERATOR, MICROWAVE-OVEN, AQUA GU ARD, SOFA SETS, GEYSER AND OTHER FITTINGS IN THE WALLS AND MODULAR KITCHEN ETC . FOR A LUMPSUM AMOUNT OF RS. 20 LACS TO THE SAME PARTY. HOWEVER, THE A.O. W HILE OBSERVING THAT THE SO CALLED ASSETS MIGHT HAVE BEEN PURCHASED BY MR. M.M. MIRCHANDANI, FATHER OF THE ASSESSEE DURING HIS LIFE TIME AND ASSESSEE HERS ELF OVER A PERIOD OF TIME, IN THE ABSENCE OF ANY EVIDENCE, TAKEN THE COST OF THE SAID FURNITURE & FIXTURE ETC. AT RS. NIL AND ADDED THE SAID CONSIDERATION OF RS . 20 LACS IN THE TOTAL SALE VALUE OF RS. 62 LACS THEREBY TREATED THE TOTAL SALE CONSIDERATION AT RS. 82 LACS. ON APPEAL, THE LD. CIT(A) OBSERVED THAT THE SALE OF FURNITURE AND FIXTURES OF THE FLAT ITSELF CANNOT BE CONSIDERED AS PART OF THE PRI CE OF THE FLAT WHEN THE ACTUAL SALE CONSIDERATION OF THE FLAT ITSELF IS HIGHER THA N THE STAMP DUTY VALUATION DONE FOR THE PURPOSE OF LEVY OF STAMP DUTY. IT WAS FURTHER OBSERVED THAT THE APPELLANT IS ALSO NOT GOING TO GET ANY BENEFIT BY S UPPRESSING SALE CONSIDERATION AS THE APPELLANT HAS INVESTED SALE CONSIDERATION PA RTLY INTO ANOTHER HOUSE AND FOR WHICH DEDUCTION U/S 54 HAS BEEN CLAIMED AND FUR THER CONSIDERATION HAS ITA NO. 639/MUM/2012& CO 07/M/13 7 BEEN INVESTED IN THE BOND FOR WHICH DEDUCTION U/S 5 4EC OF THE ACT HAS ALSO BEEN CLAIMED AND ACCORDINGLY DELETED THE ADDITION M ADE BY THE A.O. IN THE ABSENCE OF ANY CONTRARY MATERIAL PLACED ON RECORD B Y THE REVENUE AGAINST THE FINDINGS OF THE LD. CIT(A) AND KEEPING IN VIEW THAT THE REGISTERED SALE DEED OF THE FLAT IS FOR RS. 62 LACS AS AGAINST STAMP DUTY V ALUE OF THE FLAT RS. 59,06,404/- AND, IN THE SALE DEED, THERE IS NO IOTA OF EVIDENCE TO SHOW THAT THE COST OF THE FURNITURE AND OTHER ASSETS ARE INCL UDED IN THE SALE OF FLAT OF RS. 62 LACS OR THE SEPARATE NOTARIZED AGREEMENT FOR SAL E OF FURNITURE AND FIXTURES ETC. DTD. 25-5-2006 FOR RS. 20 LACS IS NOT GENUINE, WE ARE OF THE VIEW THAT THE LD. CIT(A) WAS FULLY JUSTIFIED IN DELETING THE ADDI TION MADE BY THE A.O. THE GROUNDS TAKEN BY THE REVENUE ARE, THEREFORE, REJECT ED. C.O. NO. 07/MUM/2013 (BY ASSESSEE) 8. THE GROUND TAKEN BY THE ASSESSEE READS AS UNDER: - ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE, AND IN LAW, ASSESSING OFFICER ERRED IN FILING DEFECTIVE APPEAL IN FORM 36 BY NOT SIGNING THE FORM AS WELL AS NOT PUTTING IN DATE OF COMMUNICATION OF THE ORDER OF LEARNED COMMISSIONER OF INCOME-TAX (APPEAL) RENDERING THE A PPEAL BAD IN LAW AT THRESHOLD AND NOT PROSECUTABLE. 9. AFTER HEARING THE RIVAL PARTIES AND PERUSING THE MATERIAL AVAILABLE ON RECORD WE FIND THAT SINCE THE A.O. HAS FILED REVISE D FORM NO. 36 ALONG WITH GROUNDS OF APPEAL DULY SIGNED WHEREIN IN COLUMN 9 O F THE FORM THE DATE OF COMMUNICATION OF THE ORDER APPEALED AGAINST HAS BEE N MENTIONED AS 5-12-2011, THEREFORE, IN THE ABSENCE OF ANY CONTRAR Y MATERIAL PLACED ON RECORD BY THE ASSESSEE TO SHOW OTHERWISE , WE DO NOT FIND ANY MERIT IN THE GROUND RAISED BY THE ASSESSEE AND THE SAME IS, THEREFORE, REJECTED. ITA NO. 639/MUM/2012& CO 07/M/13 8 10. IN THE RESULT, REVENUES APPEAL AND ASSESSEES C.O. ARE DISMISSED. > ?B 3$ 4 & /0) (>3 4 3? DE ORDER PRONOUNCED IN THE OPEN COURT ON 6-02-2013 . 4 @A, ( B 6-02-2013 A 4 L SD/- SD/- (D. KARUNAKARA RAO) ( DINESH KUMAR AGARWAL) ( #$ / ACCOUNTANT MEMBER ' #$ / JUDICIAL MEMBER MUMBAI; DATED 6/02/2013 .'.#./ R.K. , SR. PS 4 /'?MN N,? 4 /'?MN N,? 4 /'?MN N,? 4 /'?MN N,?/ COPY OF THE ORDER FORWARDED TO : 1. -. / THE APPELLANT 2. /0-. / THE RESPONDENT . 3. O () / THE CIT(A)-12, MUMBAI 4. O / CIT 6, MUMBAI 5. N RL /'?' , , / DR, ITAT, MUMBAI A BENCH 6. L%+ S / GUARD FILE. #0N? /'? // TRUE COPY // # # # # / BY ORDER, T TT T/ // /#D 3 #D 3 #D 3 #D 3 (DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI