Sri Anil H Lad , Bellary V. The Deputy Commissioner of Income TAx Circle-7(1)(2), Bangalore

ITA 1082/BANG/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 1084 (ITAT-BANGALORE)
• Duration Of Justice: 11 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 03-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: V SRINIVASAN
• Keywords: Principle of natural justice; Cost of acquisition

Judgement Text

ITA.1082/BANG/2018 PAGE - 1 IN THE INCOME TAX APPELLATE TRIBUNAL BENGALURU BENCH 'B', BENGALURU BEFORE SHRI. A. K. GARODIA, ACCOUNTANT MEMBER AND SHRI. LALIET KUMAR, JUDICIAL MEMBER I.T.A NO.1082/BANG/2018 (ASSESSMENT YEAR : 2012-13) SHRI. ANIL H. LAD, HOUSE OF LADS. HOSPET ROAD, SANDUR, BELLARY 583119 .. APPELLANT PAN : ABUPL8856E V. DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE 7(1)(2), BENGALURU .. RESPONDENT ASSESSEE BY : SHRI. V. SRINIVASAN, ADVOCATE REVENUE BY : SHRI. R. N. SIDDAPPAJI, ADDL.CIT HEARD ON : 12.03.2019 PRONOUNCED ON : 15.03.2019 O R D E R PER LALIET KUMAR, JUDICIAL MEMBER : THE PRESENT APPEAL IS FILED BY THE ASSESSEE AGAINS T THE ORDER OF THE CIT (A) -10, BENGALURU, DATED.03.01.2018, FOR T HE ASSESSMENT YEAR 2012-13, ON THE FOLLOWING EFFECTIVE GROUND : THE LEARNED CIT (A) IS NOT JUSTIFIED IN UPHOLDING THE ADDITION OF RS.34,60,000/- IN RESPECT OF THE INCOME COMPUTED UNDER THE HEAD CAPITAL GAINS ON THE SALE OF A FLAT BY RESTRICTIN G THE INDEXED COST ITA.1082/BANG/2018 PAGE - 2 OF ACQUISITION OF THE SAID FLAT SOLD BY THE APPELLA NT IN THE ABSENCE OF THE PURCHASE DEED, TO RS.2,78,27,116/- BEING THE IN DEXED COST OF ACQUISITION CALCULATED ON THE BASIS OF THE PRICE PA ID FOR AN ADJACENT FLAT AS AGAINST THE SUM OF RS.3,12,58,013/- CLAIMED BY THE APPELLANT UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE APP ELLANTS CASE. 02. BRIEF FACTS ARE, T HE ASSESSEE FILED HIS RETURN OF INCOME ON 30-09-2012 DECLARING TOTAL INCOME OF RS.1,05,11,044 /-. THE CASE WAS TAKEN UP FOR SCRUTINY. DURING THE SCRUTINY PROCEEDINGS THE AO NOTICED THAT DURING THE YEAR UNDER APPEAL TH E APPELLANT HAS OFFERED LONG TERM CAPITAL GAINS OF RS. 44,86,74 7/- ON SALE OF FLAT NO. G-007 IN NEW DELHI. ON A SALE CONSIDERATIO N OF RS. 3,57,74,760/- THE ASSESSEE HAS CLAIMED INDEXED COST OF ACQUISITION AT RS.3,12,58,013/-. THE AO CALLED FOR SUPPORTING DOCUMENTS FOR THE COST OF ACQUISITION INCLUDING THE PURCHASE AGREEMENT OR THE PURCHASE DEED. THE A/R OF THE APPE LLANT FAILED TO PRODUCE THE PURCHASE AGREEMENT OR PURCHAS E DEED BEFORE THE AO BUT HE SUBMITTED A COPY OF THE PURCHA SE DEED FOR THE ADJACENT FLAT G-008 IN THE SAME APARTMENT. IT W AS NOTICED BY THE AC THAT THE COST OF ACQUISITION OF THE FLAT G-008 WAS RS. 5,400/- PER SQ.FT. WHEREAS IT WAS MUCH HIGHER IN TH E CASE G-007. THE AO PROPOSED TO THE AR TO ADOPT THE COST OF ACQU ISITION AT THE RATE OF RS.5,400/- PER SQ.FT WHICH WAS THE C OST OF ACQUISITION FOR FLAT NO. G-008. THE A/R OF THE APPE LLANT AGREED TO THE PROPOSAL AND ACCORDINGLY THE AC DETERMINED T HE COST OF ACQUISITION OF THE FLAT AT RS.1,83,97,800/-. THIS F IGURE CAME TO RS.2,78,27,116/- AFTER INDEXATION. ON RECALCULATION AS PER THE ITA.1082/BANG/2018 PAGE - 3 NEW INDEXED COST OF ACQUISITION THE CAPITAL GAINS C AME TO RS.79,47,645/- AS AGAINST RS.44,86,747/- DECLARED B Y THE APPELLANT. ACCORDINGLY, THE AO MADE AN ADDITION OF THE DIFFERENCE OF THE TWO FIGURES WHICH CAME TO RS. 34, 60,899/-. AGGRIEVED BY THIS ADDITION, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT (A). 03. THE CIT (A) IN PARA 5 OF HIS ORDER HAS GIVEN TH E FINDING, WHICH IS AS UNDER : I HAVE GONE THROUGH THE WRITTEN SUBMISSION AND STAT EMENT OF FACTS AND ALSO THE ASSESSMENT ORDER. BEFORE THE AO AS WELL AS IN THE APPEAL PROCEEDINGS THE APPELLANT TOO K THE PLEA THAT ALL THE PAYMENTS FOR THE PURCHASE OF THE FLAT WERE MADE THROUGH BANK AND THAT THE APPELLANT IS TR YING TO OBTAIN THE PURCHASE DEED. HOWEVER, NO SUCH DEED WAS PRODUCED. IN THE ABSENCE OF ANY NEW EVIDENCE PRODUCED BEFORE ME, I AM OF THE CONSIDERED OPINION THAT THE AO HAS RIGHTLY ADOPTED THE FIGURE OF THE ADJACE NT FLAT NO. G-008 AND HAS MADE THE CALCULATION OF CAPITAL G AINS IN ACCORDANCE WITH THE PROVISION OF LAW. I DO NOT F IND ANY REASON TO INTERFERE WITH THE FINDING OF THE AO WHIC H WAS AGREED TO BY THE A/R OF THE APPELLANT. ACCORDINGLY, I CONFIRM THE ADDITION OF RS. 34,60,899/-. FURTHER AGGRIEVED BY THE CONFIRMATION OF THE ADDITI ON BY THE CIT(A), THE ASSESSEE HAS FILED THIS APPEAL BEFORE U S. 04. BEFORE US, THE LD.AR HAS FILED A PAPER BOOK ALO NG WITH APPLICATION FOR SUBMITTING ADDITIONAL DOCUMENTS. I T WAS THE SUBMISSION OF THE LD. AR THAT THE ALLOTMENT LETTER WAS NOT PRODUCED BEFORE THE LOWER AUTHORITIES, WHICH GOES T O SHOW THE ACQUISITION OF FLAT, WHICH IS THE SUBJECT MATTER OF THE PRESENT PROCEEDINGS. THE REASONS GIVEN BY THE LD. AR ARE F OUND IN PARA 6, 7 AND 8 OF THE APPLICATION. THE LD. AR SUBMITTED T HAT THE ITA.1082/BANG/2018 PAGE - 4 ADDITIONAL DOCUMENTS MAY BE PERMITTED TO BE FILED B EFORE THE TRIBUNAL. 05. THE LD. DR HAS OPPOSED THE FILING OF THE ADDITI ONAL DOCUMENTS. 06. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. FOR THE REASONS MENTIONED IN THE APPLICATION, WE AL LOW THE FILING OF ADDITIONAL DOCUMENTS ON RECORD. SINCE WE HAVE ADMI TTED ADDITIONAL DOCUMENTS INCLUDING THE ALLOTMENT LETTER WHEREIN CO ST OF ACQUISITION OF UNIT WAS SHOWN AT RS.2,04,42,720/-, WHEREAS THE COST OF ACQUISITION OF THE ADJOINING PROPERTY SHOWN AT R S.1,83,97,800/- IN ASSESSMENT ORDER . THE PROPERTIES, NOS.G 008 AN D G 007 ARE SITUATED IN THE SAME FLOOR AND ARE HAVING THE SAME SIZE AND WERE OWNED BY ASSESSEE , BUT DIFFERENT COST OF ACQUISITI ON WERE SHOWN . 07. THE ASSESSEE HAD SUPPORTED DIFFERENT COST OF A CQUISITION BY DRAWN OUR ATTENTION TO THE LEDGER ACCOUNT OF THE BU ILDER, NAMELY, LIFESTYLE BUILDCON P. LTD, AS WELL AS TO THE OTHER DOCUMENTS FORMING PART OF THE PAPER BOOK . IN OUR VIEW, ALLO TMENT LETTER GOES TO THE ROOT OF THE MATTER HENCE IS REQUIRED TO BE E XAMINED BY LOWERE AUTHORITIES. THEREFORE WE DEEM IT APPROPRIATE TO R EMAND THE MATTER TO THE FILE OF THE CIT (A) FOR VERIFY THE AUTHENTI CITY AND LEGALITY OF THIS ALLOTMENT LETTER AND TO FIND OUT WHETHER THE C ONSIDERATION MENTIONED IN THE ALLOTMENT LETTER WAS ACTUAL CONSID ERATION PAID BY THE ASSESSEE FOR ACQUISITION OF THIS FLAT OR NOT. THE CIT (A) IS ALSO DIRECTED TO TAKE ANY OTHER FURTHER PROCEEDINGS AS H E DEEMS PROPER TO FIND OUT THE TRUE COST OF ACQUISITION OF THE FLA T INCLUDING ISSUING ITA.1082/BANG/2018 PAGE - 5 SUMMONS TO BUILDER . NEEDLESS TO SAY WHILE DOING S O, THE CIT (A) SHALL GIVE DUE OPPORTUNITY OF HEARING TO THE ASSESS EE AND FOLLOW THE PRINCIPLE OF NATURAL JUSTICE 5/. 08. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH DAY OF MARCH, 2019. SD/- SD/- (A. K. GARODIA) (LALIET KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER BENGALURU DATED : 15.03.2019 MCN* COPY TO: 1. THE ASSESSEE 2. THE ASSESSING OFFICER 3. THE COMMISSIONER OF INCOME-TAX 4. COMMISSIONER OF INCOME-TAX(A) 5. DR 6. GF, ITAT, BANGALORE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, BANGALORE