ACIT CIRCLE -2(1), BILASPUR(CG) V. M/S HIND ENERGY & COAL BENDFICATION (I)PVT LTD, BILASPUR(CG)

ITA 108/BIL/2010

• Counselvise Citation: 10824714 RSA 2010
• Duration Of Justice: 4 year(s) 7 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 03-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HARMOHAN MAHARANA
• Assessee Lawyers: S R RAO
• Keywords: Unexplained investment; Sale consideration of property below Jantri Value; Search and seizure; Fair market value
• Section: 50C; 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, RAIPUR BEFORE SHRI H.L. KARWA, PRESIDENT AND SHRI REJENDRA, ACCOUNTANT MEMEBR ITA NOS.107 & 108/BLPR/2010 A.YS. 2007-08 & 2008-09 ASSTT. COMMISSIONER OF INCOME TAX, VS. M/S. H IND ENERGY & COAL CIRCLE-2(1), BILASPUR. BENEFICIATION (I) PVT. L TD., RAMA TRADE CENTRE, NEAR BUS STAND, BILASPUR (CG). (PAN: AABCH 5699 C) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI HARMOHAN MAHARANA, SR. D.R. RESPONDENT BY : SHRI S.R.RAO DATE OF HEARING : 16.12.2014 DATE OF PRONOUNCEMENT : 16.12.2014 ORDER PER H.L. KARWA, PRESIDENT THESE TWO APPEALS BY THE REVENUE ARE DIRECTED AGAIN ST THE CONSOLIDATED ORDER OF LD. CIT(A), BILASPUR (CG) DATED 19.02.2010 RELAT ING TO A.YS. 2007-08 & 2008- 09. 2. BY WAY OF THESE TWO APPEALS, THE REVENUE HAS CHA LLENGED THE ACTION OF LD. CIT(A) IN DELETING THE ADDITION OF RS.7,09,400/- (A .Y. 2007-08) AND RS.9,94,800/- (A.Y. 2008-09) BEING THE DIFFERENCE BETWEEN THE MAR KET VALUE ASSESSED FOR STAMP 2 ITA NOS .107 & 108/BLPR/2010 A.YS. 2007-08 & 2008-09 DUTY PURPOSES AND PURCHASE PRICE AS PER SALE DEED, AS UNEXPLAINED INVESTMENT UNDER SECTION 69B OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE COMPANY WAS INCORPORATED ON 25.04.2005. THE MAIN SOURCE OF INC OME OF THE COMPANY IS FROM RUNNING COAL WASHERY, COAL TRADING AND TRANSPORTATI ON OF COAL. IN THIS CASE, A SEARCH AND SEIZURE OPERATION UNDER SECTION 132(1) OF THE A CT WAS CARRIED OUT ON 30.01.2008 AT THE RESIDENTIAL PREMISES OF THE COMPANY AND ALSO AT THE BUSINESS PREMISES OF THE GROUP CONCERNS. IN THE COURSE OF SEARCH, VARIOUS L OOSE PAPERS WERE FOUND AND SEIZED. THE A.O. OBSERVED THAT THE SEIZED PAPERS M ARKED AS ANNEXURE-AII OF PANCHNAMA DATED 30.01.2008 ARE COPIES OF REGISTERED SALE DEEDS OF PROPERTY PURCHASED BY THE ASSESSEE. THE A.O. NOTICED THAT T HERE WAS A DIFFERENCE BETWEEN THE AMOUNTS INVESTED IN PURCHASE OF PROPERTY AS PER FAIR MARKET VALUE FOR STAMP DUTY AND THE PURCHASE VALUE SHOWN BY THE ASSESSEE. THE A.O. REQUIRED THE ASSESSEE TO EXPLAIN THE DIFFERENCE BY PRODUCING THE VENDERS. TH E ASSESSEE FAILED TO SATISFACTORILY EXPLAIN THE DIFFERENCE. THEREFORE, THE A.O. HAS TA KEN VALUE PRESCRIBED BY THE LOCAL AUTHORITIES FOR STAMP VALUE PURPOSE AS BASIS AND HE LD THAT THE DIFFERENCE BETWEEN THESE TWO VALUES IS THE UNEXPLAINED INVESTMENT AND ASSESSED THE SAME UNDER SECTION 69B OF THE ACT. THE A.O. MADE THE ADDITION OF RS.7 ,09,400/- FOR THE A.Y. 2007-08 AND RS.9,94,800/- FOR THE A.Y. 2008-09. IN BOTH TH E YEARS, THE ASSESSMENT ORDERS WERE PASSED UNDER SECTION 153A READ WITH SECTION 14 3(3) OF THE ACT. 3 ITA NOS .107 & 108/BLPR/2010 A.YS. 2007-08 & 2008-09 4. ON APPEAL, THE LD. CIT(A) VIDE HIS COMMON ORDER DATED 19.02.2010 DELETED THE IMPUGNED ADDITIONS STATING THAT NO INCRIMINATIN G MATERIALS WERE FOUND AT THE TIME OF SEARCH CONDUCTED AT THE BUSINESS AND RESIDE NTIAL PREMISES OF THE ASSESSEE. HE FURTHER OBSERVED THAT THERE WAS NO MATERIAL WITH THE A.O. WHILE MAKING THE IMPUGNED ADDITIONS. ACCORDING TO THE LD. CIT(A), T HE ALLEGED UNEXPLAINED INVESTMENT IS THE DIFFERENCE BETWEEN THE SALE PRICE FOUND RECORDED IN REGISTERED SALE DEEDS AND IN THE BOOKS AND THAT SHOWN IN AS MARKET VALUE FOR THE PURPOSE OF MAKING REGISTRATION OF THE PROPERTIES. HE, THEREFORE, HEL D THAT NO ADDITION CAN BE MADE IN THIS CASE. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE ALS O PERUSED THE MATERIALS AVAILABLE ON RECORD. BEFORE US, SHRI S.R. RAO, LD. COUNSEL FOR THE ASSESSEE HEAVILY RELIED ON THE FOLLOWING DECISIONS:- I) ACIT VS. M/S ENPRO LIMITED ITA NO.1612/MUM/201 0 (A.Y. 2006- 07), ORDER DATED 09.03.2011; II) ITO VS. SHRI DIPAKKUMAR CHAMPALAL DOSHI ITA N O.1934/AHD/2012 (A.Y. 2009- 10), ORDER DATED 27.11.2012. 5.1 IN VIEW OF THE ABOVE, HE SUBMITTED THAT THE ISS UE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE BY THE ABOV E DECISIONS OF ITAT, MUMBAI BENCHES, MUMBAI AND ITAT, AHMEDABAD BENCHES, AHMEDA BAD. ACCORDINGLY, HE SUBMITTED THAT THE APPEALS PREFERRED BY THE REVENUE DESERVE TO BE DISMISSED. IT IS OBSERVED THAT WHILE DECIDING A SIMILAR ISSUE, D B ENCH OF ITAT, MUMBAI IN THE 4 ITA NOS .107 & 108/BLPR/2010 A.YS. 2007-08 & 2008-09 CASE OF M/S ENPRO LIMITED (SUPRA) HAS HELD AS UNDER :- 7. HAVING CAREFULLY HEARD THE SUBMISSIONS OF THE R IVAL PARTIES AND PERUSING THE MATERIAL AVAILABLE ON RECORD, WE FIND THAT IT IS NOT IN DISPUTE THAT THE A.O. HAS TAKEN THE VALUE OF THE IM MOVABLE PROPERTY AT RS.1,06,40,000/- ON THE BASIS OF THE VALUE ADOPTED BY THE SUB- REGISTRATION OFFICE, KARJAT FOR THE PURPOSE OF STAM P DUTY AS AGAINST THE PURCHASE PRICE OF THE PROPERTY AT RS.45,60,300/- SH OWN BY THE ASSESSEE AS PER REGISTERED AGREEMENT, REGISTERED WITH SUB-RE GISTRATION OFFICE, KARJAT. ACCORDING TO THE A.O., THE DIFFERENCE BETW EEN THE VALUE SHOWN FOR THE PURPOSE OF STAMP DUTY AND THE PURCHASE PRIC E OF RS.60,79,700/- IS AN UNEXPLAINED INVESTMENT U/S 69B OF THE ACT. H OWEVER, THE LD. CIT(A) HELD THAT THE PROVISIONS OF SECTION 50-C ARE NOT APPLICABLE AND THE SAME ARE APPLICABLE ONLY FOR COMPUTING CAPITAL GAINS IN THE HANDS OF THE SELLER, DELETED THE ADDITION MADE BY THE A.O . 8. IN THE CASE OF KAMAL KISHORE CHANDAK VS. ITO (SU PRA), IT HAS BEEN HELD THAT NO ADDITION U/S 69-B CAN BE MADE SIM PLY ON THE BASIS OF STAMP DUTY VALUATION AS THIS IS NOT A GOOD PARAMETE R TO DETERMINE THE REAL COST OF A PROPERTY. 9. IN THE CASE OF ITO VS. SATYANARAYAN AGARWAL (SUP RA) IT HAS BEEN HELD THAT NO ADDITION CAN BE MADE ON ACCOUNT OF UNE XPLAINED INVESTMENT IN PURCHASE OF PROPERTY ON THE BASIS OF STAMP DUTY CHARGED BY THE SUB-REGISTRAR. 10. IN THE CASE OF ITO VS. OPTEC DISC MANUFACTURING (SUPRA), IT HAS BEEN HELD THAT A.O. WAS NOT JUSTIFIED IN MAKING ADD ITION UNDER SECTION 69B OF THE DIFFERENCE BETWEEN CONSIDERATION STATED BY ASSESSEE FOR PURCHASE OF LAND AND THE VALUE ADOPTED BY STATE REV ENUE AUTHORITY FOR STAMP DUTY PURPOSES ON THE BASIS OF CONTROVERTED AN D UNCONTROVERTED STATEMENT OF SELLER AND BY RELYING ON S.50C WHICH I S NOT APPLICABLE IN THE CONTEXT OF S. 69B. 11. IN THE CASE OF JAI MARWAR CO. (P) LTD. VS. ACIT (SUPRA) IT HAS BEEN HELD THAT ADDITION COULD NOT BE MADE SIMPLY ON THE BASIS OF THE ORDER PASSED IN STAMP DUTY CASE, PARTICULARLY WHEN THERE IS NO EVIDENCE OF ANY PAYMENT OVER AND ABOVE THE AMOUNT S HOWN IN THE SALE DEED. 12. IN THE CASE OF CIT VS. K.K. ENTERPRISES (SUPRA) , IT HAS BEEN HELD THAT IN THE ABSENCE OF ANY EVIDENCE ON RECORD, IT C ANNOT BE PRESUMED 5 ITA NOS .107 & 108/BLPR/2010 A.YS. 2007-08 & 2008-09 THAT LAND HAS BEEN SOLD BY THE ASSESSEE AT A HIGHER PRICE THAN THE CONSIDERATION SHOWN IN THE REGISTERED SALE DEEDS, A ND THE RATES OF PROPERTY FIXED BY THE STAMP VALUATION AUTHORITY FOR REGISTRATION PURPOSES CANNOT BE APPLIED TO ARRIVE AT THE PRICE F OR WHICH THE PROPERTY MIGHT HAVE BEEN SOLD AND NO ADDITION CAN B E MADE ON ACCOUNT OF UNDERSTATEMENT OF SALE PRICE. 13. IN THE ABSENCE OF ANY DISTINGUISHING FEATURE BR OUGHT ON RECORD BY THE REVENUE, WE RESPECTFULLY FOLLOWING THE CONSI STENT VIEW AS AFORESAID, HOLD THAT THE A.O. WAS NOT JUSTIFIED IN APPLYING THE PROVISIONS OF SECTION 50-C IN THE CASE OF THE ASSES SEE AS A PURCHASER AS THE FICTION CREATED U/S 50C WHICH IS A DEEMING PROV ISION HAS TO BE RESTRICTED TO THAT SECTION ONLY AND SUCH FICTION CA NNOT BE READ INTO SECTION 69B OF THE ACT AND ACCORDINGLY WE ARE INCLI NED TO UPHOLD THE FINDING OF THE LD. CIT(A) IN DELETING THE SAME. TH E GROUNDS TAKEN BY THE REVENUE ARE THEREFORE REJECTED. 5.2 IT IS WORTHWHILE TO MENTION HERE THAT A SIMILAR VIEW HAS BEEN TAKEN BY THE A BENCH OF ITAT, AHMEDABAD IN THE CASE OF SHRI DIPAKK UMAR CHAMPALAL DOSHI (SUPRA). IN THE SAID CASE, THE TRIBUNAL OBSERVED T HAT ADDITIONS MADE UNDER SECTION 69B CANNOT BE SUSTAINED BY INVOKING THE PROVISIONS OF SECTION 50C OF THE ACT. THE BENCH HELD THAT THE PROVISIONS OF SECTION 50C OF TH E ACT, IS A SPECIAL PROVISION FOR ADOPTING THE VALUE OF SALE CONSIDERATION IN A SPECI FIC CIRCUMSTANCE WITH RESPECT TO THE VENDER OF AN IMMOVABLE PROPERTY AND NOT WITH RE SPECT TO THE VENDEE. IF THE ACT INTENDED TO APPLY THE PURCHASE CONSIDERATION IN THE CASE OF THE PURCHASER OF THE IMMOVABLE PROPERTY, IT WOULD HAVE SPECIFICALLY SAID SO. IT WAS ALSO OBSERVED BY THE TRIBUNAL THAT DEEMING FICTION CREATED FOR A SPECIFI C PURPOSE CANNOT BE INFUSED FOR ANOTHER APPLICATION UNLESS AND UNTIL IT IS SPECIFIC ALLY PROVIDED IN THE ACT. 6 ITA NOS .107 & 108/BLPR/2010 A.YS. 2007-08 & 2008-09 5.3 IN THE INSTANT CASE, APART FROM STAMP DUTY VALU E, THERE WAS NOTHING ON RECORD WHICH SUGGESTS THAT THE REVENUE HAS PROVED THAT THE ASSESSEE HAS PAID OVER AND ABOVE WHAT HAS BEEN RECORDED AS PURCHASE CONSIDERAT ION OF THE PROPERTY IN THE SALE DEED. RESPECTFULLY FOLLOWING THE DECISIONS OF THE CO-ORDINATE BENCHES REFERRED TO ABOVE, WE ARE OF THE CONSIDERED OPINION THAT NO ADD ITION ON UNDISCLOSED INVESTMENT COULD BE MADE BY INVOKING PROVISIONS OF SECTION 69B OF THE ACT. IN THIS VIEW OF THE MATTER, WE DO NOT SEE ANY MERIT IN THE APPEALS PREF ERRED BY THE REVENUE AND, THEREFORE, WE DISMISS THE SAME. 6. IN THE RESULT, BOTH THE APPEALS PREFERRED BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 16.12.2014. SD/- SD/- (RAJENDRA) (H.L. KARWA) ACCOUNTANT MEMBER PRESIDENT RAIPUR, DATED: 16.12.2014 PBN/* COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. D.R. ITAT, RAIPUR BENCH, RAIPUR 6. GUARD FILE //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, RAIPUR