SHRI SARDAR MAHENDRA SINGH BHATIA, BILASPUR(CG) V. DY. COMMISSIONER OF INCOME TAX,CIRCLE , CIRCLE 1(1)BILASPUR, BILASPUR(CG)

ITA 108/BIL/2017

• Counselvise Citation: [NaN] 107 COUNSELVISE.COM (IT) 1781 (ITAT-RAIPUR)
• Duration Of Justice: 5 year(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-06-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 22-05-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Fair market value; Capital Gains
• Section: 143(3); 142(1); 69B; 143(2); 13

Judgement Text

आयकर अपीलȣय अͬधकरण Ûयायपीठ रायप ु र मɅ। IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, RAIPUR (Through Virtual Court) BEFORE SHRI RAVISH SOOD, JUDICIAL MEMBER AND SHRI RATHOD KAMLESH JAYANTBHAI, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No. 108/BIL/2017 Ǔनधा[रण वष[ / Assessment Year : 2013-14 Sardar Mahendra Singh Bhatia Narayan Niwas, Main Road Dayalband Bilaspyr C.G PAN : ABBPB3244K .......अपीलाथȸ / Appellant बनाम / V/s. Dy. Commissioner of Income Tax Circle 1(1), Bilaspur ......Ĥ×यथȸ / Respondent Assessee by : None Revenue by : Shri G.N Singh स ु नवाई कȧ तारȣख / Date of Hearing : 31.05.2022 घोषणा कȧ तारȣख / Date of Pronouncement : 02.06.2022 2 ITA No. 108/BIL/2017 A.Y.2013-14 आदेश / ORDER PER RATHOD KAMLESH JAYANTBHAI, AM: This appeal is filed by the assessee aggrieved from the order of the Commissioner of Income Tax (Appeal), Bilaspur [ Here in after referred as Ld. CIT(A) ] for the assessment year 2013-14 dated 08.03.2017 which in turn arises from the order passed by the A.O under Section 143(3) of the Income-tax Act, 1961 (in short ‘the Act’) dated 08.03.2016. 2. The hearing of the appeal was concluded through audio-visual medium on account of Government guidelines on account of prevalent situation of Covid-19 Pandemic, both the parties have placed their written as well as oral arguments during this online hearing process. 3. Before us the assessee has raised following grounds in this appeal; 1. Whether in law and on facts & circumstances the ld. CIT appeal has erred in confirming the addition of Rs. 45,00,000/- made by assessing officer u/s 69B behind the back of appellant. 3 ITA No. 108/BIL/2017 A.Y.2013-14 2. Whether in law and on facts & circumstances the ld. CIT appeal has erred in not providing opportunity to appellant to argue before ld. CIT Appeal. 3. The appellant craves leave to add, amend, or alter any of the ground or grounds of appeal either before or at the time of appeal.” 4. The case was fixed for hearing after issuing notice to both the parties. On behalf of the assessee no one appeared and the matter is taken up based on the facts available on record and considering the arguments placed on record by the learned departmental representative. 5. The fact as culled out from the records that the assessee has filed its return of income electronically on 23/03/2014 declaring income at Rs. 9,87,670/-. The case was selected for scrutiny through CASS. The notices were issued to the assessee u/s 143(2) and 142(1) along with the questionnaire from time to time. The books of accounts were also produced. The assessee derives income by way of interest and remuneration from various firms viz. M/s Yug Enterprises, M/s Yuraj Enterprises, M/s Unique Enterprises, M/s Heritage Enterprises, M/s 4 ITA No. 108/BIL/2017 A.Y.2013-14 Harsma Guin, M/s Amolak Singh Bhatia. The assessee also earns income from other sources and income from capital gains. 5.1 During the assessment proceedings, the assessee was issued query letter dated 21.11.2015 and was asked to furnish the details of the property purchased and sold during the year under consideration. From the said details submitted by the assessee, it has been observed by the Assessing Officer that during the year under consideration, the assessee has purchased two immovable property as detailed here in below:- “1. One land purchased from Shri Mukesh Tiwari, Ward No. 09, Gaurav Path, Champa, admeasuring 0.680 hectare (73194.59 sq.feet) situated at Gram Jagdalla, P. H. No. 02, Nagar Palika, Parishad Champa Ward No. 21, Guru Ghasidas Ward, Block Baloda, Champa, Distt. Janjgir Champa, for a consideration marked by Stamp Valuation Authority at Rs. 95,54,000/- wherein the details of consideration paid at Rs. 10,00,000/- in cash is indicated. Details. Khasra No. Rakba Hectare Lagan Kisam 252/2 1.68 A. 0.680 Rs. 1.50 Irrigated matasi efflux 2. One land purchased from Shri Nardha, Jagdalla, Champa, admeasuring 0.433 hectare (46607.732 sq. feet) situated at Gram Jagdalla, P.H. No. 02, Block Baloda, Champa, Distt. Janjgir Champa, for a consideration market by Stamp Valuation 5 ITA No. 108/BIL/2017 A.Y.2013-14 Authority at Rs. 60,84,000/- wherein the details of consideration paid at Rs. 5,35,000/- in cash is indicated. Details Khasra No. Rakba Hectare Lagan Kisam 241/1 0.32A 0.129 Rs. 1.00 Irrigated matasi efflux 258/1 0.75A 0.304 Rs. 1.00 Irrigated matasi efflux Total 2 1.07A 0.433 Rs. 1.00 5.2 Considering the above details, the Assessing Officer has observed that the investments in both the properties shown by the assessee is very low as compared to prevailing market price to such a kind of properties. Therefore, the assessee was asked to explain and justify as to why the difference between fair market value and purchase consideration should not be added to the income as undisclosed investments in the properties. The assessee in his reply contended that the provisions of section 56(vii)(b) of the Act was amended w.e.f 01.04.2014. Prior to that the same was not applicable to the transactions of the assessee as the assessee has acquired the asset for valuable consideration and till 01.04.2014. The Act did not provided that if the consideration paid is less than Stamp Duty Valuation the same is treated as income of the assessee. 6 ITA No. 108/BIL/2017 A.Y.2013-14 5.3 In respect of these two properties the Assessing Officer has issued summons u/s 131(1) of the Act, 1961 asking Sh. Mukesh Tiwari and Shri Nardha the seller of the property. 5.4 Out of two seller one of the seller of the property to the assessee Sh. Nardha expired on 03.05.2015. Thus, wife of late Sh. Nardha, Smt. Chutki Bai and Sh. Jaswant Kumar Sonant, son of the Late Shri Nardha were summoned by the Assessing Officer both legal heir appeared on 10.02.2016 and has given their statements. In their statements aforesaid witness accepted that her husband Late Sh. Nardha has sold a piece of land to the assessee for a consideration of Rs. 50,00,000/- which has been received in cash from the assessee. She further accepted that since the amount of Rs. 50,00,000/- is heavy amount. It has been obtained in 3 to 4 installments due to safety reasons and she was accompanied to her husband along with her son. She also stated that they never deposited any of the amount in the bank rather some amount was spent (approximately Rs. 25 to 27 lakhs) on renovation of the house, Rs. 13 to 14 lakhs have been utilized for the purchase of land in the name of 3 sons, namely Sh. 7 ITA No. 108/BIL/2017 A.Y.2013-14 Manoj Kumar Sonant, Shri Jaswant Kumar Sonant and Shri Vyas Narayan Sonant during August 2012 and approximately Rs. 6 to 7 lakhs spent on the marriage of her son Sh. Vyas Narayan Sonant and daughter Kumari Pinki Sonant during May 2013. 5.5. In his statement, Shri Jaswant Kumar Sonant, son of Late Nardha who happens to be key person, in the event of absence of his father, has categorically accepted sale of land at a consideration price of Rs. 50 lakhs, and has not deviated from any of the facts which his mother, Smt. Chutki Bai has affirmed in her statement. In support of his claim regarding purchase of land made by them with the money received he produced the copy the documentary evidences which were examined and Scanned copies of statement given on oath of Smt. Chutki Bai, wife of Late Nardha and Shri Jaswant Kumar Sonant, son of Late Nardha were also made part of the assessment order by the AO from Page No. 4 to 11. 5.6. As regards, another seller Sh. Mukesh Tiwari has denied the fact of receiving any extra money, other than sale consideration of Rs. 8 ITA No. 108/BIL/2017 A.Y.2013-14 10,00,000/- which has been received in cash at once from the purchaser. On being confronted to justify as to why he has sold the piece of land, whose sale price, as per Stamp Valuation Authority comes to Rs. 95,54,000/- on a meagre consideration of Rs. 10,00,000/. In response, Sh. Mukesh Tiwari submitted that his land did not have the approach road and one has to go through the land of others. Due to this constraint, he was left with no option but to sell it at throwaway price. The Assessing Officer has obtained bank statement and other details from Sh. Mukesh Tiwari. 6. During the assessment proceedings, the assessee was confronted with the statements of Sh. Chutki Bai and Sh. Jaswant Kumar Sonant, copy of which has been provided to the assessee, on request, assessee, in his reply submitted as under:- "with regard to statement of Smt. Chutki Bai and Shri Jaswant Kumar Sonant taken by you on 10/02/2016 behind the back of the assessee without affording any opportunity to the assessee to cross examine the witness and now you require an explanation from the assessee on the basis of their statement to explain why the amount as per their statement to income of the assessee, Your assessee submits as under: 1. Please appreciate that the assessee has never entered into any agreement with so called Smt. Chtki Bai and Jaswant Kumar Sonat. The 9 ITA No. 108/BIL/2017 A.Y.2013-14 assessee has never met them and never had any transaction of cash dealing with Nardha in their presence. 2. The assessee purchased a piece of land from Nardha for a consideration of Rs. 5,35,000/- which was paid as single payment on date of registration of sale deed by seller Nardha. 3. Please note statement of Smt. Chutki Bai and Jaswant Kumar Sonat is not factual and correct and therefore cannot be used against the assessee. 4. With regard to transaction with Nardha your office should only rely upon registered document of sales consideration paid by your assessee, kindly note that sale deed clearly mentions the consideration paid by your assessee. There is no material with you on the basis of which you can held that the assessee paid any sum over and over the consideration mentioned in the sale deed. Please also note that the seller Nardha has already passed up and therefore there is no way for you to draw a presumption that the assessee paid higher amount of consideration. Please appreciated that your office has quasi judicial powers and therefore your office is duty bound to exercise the powers vested with you in judicial manner. Please note that the statement of legal heirs of Nardha cannot be used by your office against the assessee for the reason that they have no knowledge of the transaction and they given incorrect statement. 5. Your assessee has no transaction of any kind with Smt. Chutki Bai and Jaswant Kumar Sonat and therefore their statement as to transaction of your assessee with Nardha has no relevance or connection whatsoever. Your assessee specifically deny that your assessee had purchased the land from Nardha for Rs. 50,00,000/- and your assessee is taking necessary suitable action Smt. Chutki bai and Jaswant Kumar Sonat for concocting a conspiracy against the assessee. 6. Your assessee request you to kindly adjourn the hearing to enable your assessee to bring to your knowledge that their statement is false and cannot be relied upon, please call for Dilesurywanshi to take his statement for examination. Please also examine the document of purchase of land for Rs. 13-14 lacs already submitted to you which will establish that they themselves have been investing money and to suit their own doings they are trying to implicate your assessee. From the statement you will observe that 10 ITA No. 108/BIL/2017 A.Y.2013-14 both the heir have give stereo typed answers to your questions which clearly goes to suggest that their statement has been given without any knowledge of facts in order to save themselves from the consequence. 7. Please not that the difference amount should not be added to income on your assessee on the basis of their statement... Please not that their statement is false and concocted and therefore not reliable. It appears that they have been guided by people of inferior motives. 8. Your assessee is willing to furnish any other documents or explanation to satisfy you about the contention of assessee. Your assessee in the interest of justice request you not to draw any presumption on the basis of the basis of the concocted statement of third party with whom the assessee has no transactions. In absence of any material with you there is no reason for you to draw any adverse presumption against the assessee. 9. Your assessee is hopeful that in the interest of justice you will not draw any adverse presumption and no addition will be made by your office on hearsay and without any material against the assessee.” 7. As regards, the cross examination of Sh. Dile Suryavanshi as claimed by the assessee, it is found to be unnecessary as the primary witnesses and also the immediate successors of Late Shri Nardha have given their statement for which assessee has not claimed any cross examination and the plea of the assessee appears to be a delaying tactic and nothing else and far from being practical. Therefore, the claim of the assessee is not accepted and on the basis of statements given by Smt. Chutki Bai and Shri Jaswant Kumar Sonanat added a sum of Rs. 45,00,000/- u/s 69B of the Act. 8. Aggrieved from the order of the ld. AO the assessee filed an appeal before the ld. CIT(A) who has categorically given his finding 11 ITA No. 108/BIL/2017 A.Y.2013-14 that the statement recorded by the AO was confronted by the AO to the assessee and it was incumbent upon the assessee to request the AO to call the witness for cross examination which he did not do so. The exact finding of the ld. CIT(A) in this regards is as under:- “Decision The Power of attorney which had been filed before me includes the name of 8 persons and name of Ashish Purankar appears on 8th number. In the power of attorney the name of Shri Ajay Sindhwani does not appear. How the appellant had come to know that Ashish Purankar discussed the case on 01.03.2017 means that Shri Ashish Purankar the duly power of attorney holder had brief the assessee and brought Shri Ajay Sindhwani as his counsel. Both of them have not negatived that Shri Ashish Purankar is not power of attorney holder. The statement of Smt. Chutki Bai dated 10.02.2016 has been recorded in presence of two witnesses Shri Chandra Kumar and Shri Vyas Narayan. The assessing officer has passed the order on 08.03.2016 whereas he had recorded statement of legal heir of Shri Nardha on 10.02.2016. The statement recorded by the AO was confronted by the AO to the assessee and it was incumbent upon the assessee to request the AO to call the witnesses for cross examination which he did not do. Rather he had alleged the legal heirs of the seller of the land with the theory of the conspiracy. One legal heir is ill-literate and she is wife of the deceased seller. The another legal heir is 30 years age and the land was not acquired by Shri Nardha by his own money. Since the land under consideration is the ancestral land no objection of all coparcener was required, hence the dependent of the decease seller used to accompany him during his life time for security purposes. The question no. 5 is important for notice because answer of this question speaks that the assessee use to live in the Bungalow and they were carried by the deceased seller for the purpose of witness. Since the wife had right to maintenance during life time of Shri Nardha and other sons being coparcener has inherent right when the Karta of an HUF disposed of the immovable property. The statement of the both the persons cannot be ignored in the eyes of law. If they had lot of money for investment in renovation of the house and also purchase land in the Co ownership of the legal heir sons and spend money on the marriage 12 ITA No. 108/BIL/2017 A.Y.2013-14 of son and daughter, in my considered view there could not have arisen the circumstance for selling of the land. All investment and expenditures had been met by the family after receipt of sale consideration which they are. claiming to have received in cash in 3 to 4 instalments. The contention of the assessee that there was no transaction between Chutki Bai and her son Shri Jashwant Kumar Sanant age 30 years, the assessee is sadly mistaken that he was denied to have transaction with one of the coparcener and legally having right of ownership of the land. The affidavits furnished by Dak by the assessee are nothing but and after thought to undo the statement recorded under oath by the quasi judicial authority. In fact the AO has recorded the statement of the two persons who had inherent right in the property which the assessee claims to have purchase only from the deceased Nardha. It is a fact that a deceased person cannot attend the court and court has to consider the legal heir of the deceased but in this case it is not only legal heirs whose statements had been recorded by the AO but also they are having interest in the land in the eyes of law having right to maintenance and also in capacity of coparcener. Thus, after going through the facts narrated by the AO and submission made by the assessee and the AR through Dak, I do not find any force in the submission of the ARs. The finding given by the AO is hereby confirmed because by incorporating the statement in the assessment order the AO had not hidden any fact of the case. Mere filing of appeal and filing affidavit which are self serving documents the learned AR could not bring any material which could have change the factual position of the case. The ground of appeal is dismissed and the additions made by the AO is confirmed because the AO is not an enemy of the assessee and nor he is a police officer. Had he had ill intention, he could have also not relied of the statement of another seller Shri Mukesh Tiwari who had also sold the land to the assessee.” 9. Per contra the Ld. DR supported the orders of the lower tax authority and the conviction of Ld. CIT(A). 13 ITA No. 108/BIL/2017 A.Y.2013-14 10. When the case listed for hearing neither the application for adjournment was filed nor the paper book contending the various grounds was filed. On earlier two occasion when the case were listed no one appeared and thus, considering this aspect this appeal is decided based on the set of facts appearing from the findings of the lower authorities. In this appeal the assessee has mainly challenged the addition of Rs. 45,00,000 made by the assessing officer and sustained by the ld. CIT(A) based on the finding given in his order. 11. Before attending any further findings, we deem it fit to cull out the provisions of Section 69B of the Act upon which the addition was made and sustained by the lower authorities Amount of investments, etc., not fully disclosed in books of account. 69B. Where in any financial year the assessee has made investments or is found to be the owner of any bullion, jewellery or other valuable article, and the 57[Assessing] Officer finds that the amount expended on making such investments or in acquiring such bullion, jewellery or other valuable article exceeds the amount recorded in this behalf in the books of account maintained by the assessee for any source of income, and the assessee offers no explanation about such excess amount or the explanation offered by him is not, in the opinion of the [Assessing] Officer, satisfactory, the excess amount may be deemed to be the income of the assessee for such financial year. On a perusal of the aforesaid statutory provision, it can safely be gathered that the assessee has made investment in the property and the investment recorded by him based on the statement recorded by the witness stated that the consideration of the said property was Rs. 50,00,000 and they have received the said money from the assessee. 14 ITA No. 108/BIL/2017 A.Y.2013-14 Whereas the assessee has not officered any plausible explanation. He remained to be silent right from the assessment proceedings and before the CIT(A) and has not objected to the findings recorded by the witness and he also remained silent on the cross examination of the witness whose statement is relied upon. Thus, the silence of the assessee on the statement recorded proves that he has accepted the averments made in the statement of the witness whose statement has been recorded after the due process of law. We, thus, in terms of our aforesaid observations and concurring with the well-reasoned view taken by the CIT(A) that mere filling of an appeal and filling of an affidavit which are self-serving documents and learned AR at the time of hearing before CIT(A) could not bring any material which could have change the factual position of the case. Thus, based on this observation we uphold of the view of the CIT(A) and the appeal of the assessee is dismissed. 12. In the result, the appeal of the assessee is dismissed. Order pronounced in open court on 2 nd June, 2022. Sd/- Sd/- RAVISH SOOD RATHOD KAMLESH JAYANTBHAI JUDICIAL MEMBER ACCOUNTANT MEMBER रायप ु र/ RAIPUR ; Ǒदनांक / Dated : 2 nd June, 2022 Ganesh Kumar आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the Order forwarded to : 15 ITA No. 108/BIL/2017 A.Y.2013-14 1. अपीलाथȸ / The Appellant. 2. Ĥ×यथȸ / The Respondent. 3. The CIT(Appeals)-1, Raipur (C.G) 4. The Pr. CIT-1, Raipur (C.G) 5. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण,रायप ु र बɅच, रायप ु र / DR, ITAT, Raipur Bench, Raipur. 6. गाड[ फ़ाइल / Guard File. आदेशान ु सार / BY ORDER, Ǔनजी सͬचव / Private Secretary आयकर अपीलȣय अͬधकरण, रायप ु र / ITAT, Raipur. 16 ITA No. 108/BIL/2017 A.Y.2013-14 1 Draft dictated on Sr.PS/PS 2 Draft placed before author Sr.PS/PS 3 Draft proposed and placed before the second Member JM/AM 4 Draft discussed/approved by second Member AM/JM 5 Approved draft comes to the Sr. PS/PS Sr.PS/PS 6 Kept for pronouncement on Sr.PS/PS 7 Date of uploading of order Sr.PS/PS 8 File sent to Bench Clerk Sr.PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R 11 Date of dispatch of order