The ACIT, Circle-3, Surat V. Shri Rajendra S.Shah, Surat

ITA 1119/AHD/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 63157 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 01-11-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 12-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T SHANKAR
• Assessee Lawyers: RASESH SHAH
• Keywords: Unexplained investment; Sale consideration of property below Jantri Value; Fair market value
• Section: 50C

Judgement Text

ITA NO 1119 /AHD/2010 A.YR.. 2006 -07 1 IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AH MEDABAD (BEFORE SHRI MUKUL KR.SHRAWAT JM & SHRI ANIL CHATUR VEDI A.M.) I.T.A. NO.1119/AHD/2010. (ASSESSMENT YEAR: 2006-07) ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-3, ROOM NO. 213, 2 ND FLOOR, AAYAKAR BHAVAN, MAJURA GATE, SURAT. (APPELLANT) VS. SHRI RAJENDRA S.SHAH, M-12 MEGH MAYUR PLAZA, PARLE POINT, SURAT. (RESPONDENT) PAN: ABNPS 7043K APPELLANT BY : MR.T. SHANKAR, SR. D.R. RESPONDENT BY : MR. RASESH SHAH. ( )/ ORDER DATE OF HEARING : 1-11-2 012 DATE OF PRONOUNCEMENT : 23-11-2012 PER: SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER. ASSESSEE IS AN INDIVIDUAL EARNING INCOME FROM COMMI SSION, LEASE RENT AND HAD INCOME FROM CAPITAL GAINS. HE FILED RE TURN OF INCOME ON 28-3- 2007 DECLARING TOTAL INCOME OF RS. 92,72,550/-.THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER THE ASSESSMENT WAS FRAMED U /S.143(3) VIDE ORDER DATED 24-11-2008 AND THE TOTAL INCOME WAS DETERMINE D AT RS.1,03,87,800/- AFTER MAKING VARIOUS ADDITIONS/DISALLOWANCES. AGGRI EVED BY THE ORDER OF THE A.O., THE ASSESSEE CARRIED THE MATTER BEFORE CIT (A ). CIT (A) VIDE HIS ORDER ITA NO 1119 /AHD/2010 A.YR.. 2006 -07 2 DATED 4-12-2009 GRANTED SUBSTANTIAL RELIEF TO THE A SSESSEE. IT IS AGAINST THE AFORESAID ACTION OF CIT (A), THE REVENUE IS NOW IN APPEAL BEFORE US. 2. ONLY EFFECTIVE GROUND IS REGARDING DELETION OF R S.10,38,988/- ON ACCOUNT OF UNEXPLAINED INVESTMENT U/S. 69B. 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS ON P ERUSING THE DETAILS SUBMITTED BY ASSESSEE A.O. OBSERVED THAT DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HAD PURCHASED A LAND AT DUMAS, SURAT FOR RS.75 LACS. HE ALSO OBSERVED THAT THE STAMP DUTY AU THORITIES HAD ASSESSED THE VALUE OF LAND AT RS.83,58,321/- AND ASSESSEE HA D PAID ADDITIONAL STAMP DUTY OF RS.72,099/-.A.O. ASKED THE ASSESSEE TO EXPL AIN AS TO WHY THE DIFFERENTIAL AMOUNT OF RS.8,58,321/- (RS.83,58,321 LESS RS. 75,00,000) BE NOT TREATED AS UNEXPLAINED INVESTMENT U/S. 69. THE ASSESSEE INTER ALIA SUBMITTED THAT IT HAD PAID RS.75 LAC FOR PURCHASE O F LAND THOUGH THE STAMP DUTY AUTHORITIES HAD CONSIDERED THE VALUE OF LAND A T RS.83,58,321/- AND LEVIED THE STAMP DUTY AS PER JANTRI. THE JANTRI RATE ADOPTED BY THE STAMP DUTY AUTHORITIES WAS A NOTIONAL VALUE AND THE ADDIT IONAL STAMP DUTY WAS PAID TO AVOID LITIGATION AND TO BUY PEACE OF MIND T O GET CLEAR TITLE OF PROPERTY. IT WAS FURTHER SUBMITTED THAT ASSESSEE H AD NOT PAID ANY AMOUNT IN EXCESS OF RS.75 LACS FOR PURCHASE OF LAND. THE S UBMISSIONS OF THE ASSESSEE WAS NOT FOUND ACCEPTABLE BY THE A.O. HE WA S OF THE VIEW THAT THE ASSESSEE HAS ACCEPTED THE UNACCOUNTED INVESTMENT BY WAY OF ACCEPTING THE VALUE DETERMINED BY STAMP DUTY AUTHORITIES AND HAD NOT OFFERED ANY EXPLANATION REGARDING THE NATURE AND SOURCE OF INVE STMENT. HE ACCORDINGLY TREATED RS.8,58,321/- AS UNEXPLAINED INVESTMENT U/S .69B AND ADDED TO THE TOTAL INCOME. ITA NO 1119 /AHD/2010 A.YR.. 2006 -07 3 4. THE ASSESSEE HAD ALSO PURCHASED ANOTHER PLOT OF LAND AT PIPLOD FOR RS.18,30,856/- AND WHOSE VALUE WAS ASSESSED BY STAM P DUTY AUTHORITIES AT RS. 20,11,523/- AND ON WHICH THE ASSESSEE HAD PAID ADDITIONAL STAMP DUTY OF RS.15,176/-. A.O. FOLLOWING THE SIMILAR REASONIN G CONSIDERED BY HIM FOR MAKING ADDITION IN RESPECT OF LAND AT DUMAS, ALSO M ADE ADDITION OF RS.1,80,667/- U/S. 69B IN RESPECT OF LAND AT PIPLOD . AGGRIEVED BY THE ACTION OF A.O., THE ASSESSEE CARRIED THE MATTER BEFORE CIT (A). CIT (A) AFTER CONSIDERING THE DETAILED SUBMISSIONS OF THE ASSESSE E DELETED THE ADDITION BY HOLDING AS UNDER: 4. I HAVE CAREFULLY CONSIDERED THE REASONS GIVEN B Y ASSESSING OFFICER AND ALSO THE SUBMISSIONS MADE BY APPELLANT. AFTER GOING THROUGH THE FACTS OF THE CASE, I FIND THAT ISSUE UN DER CONSIDERATION STANDS SQUARELY COVERED BY THE DECISIONS OF HONBLE ITAT AHMEDABAD BENCH REFERRED TO BY LD. A.R. THE HONBLE ITAT HAS TAKEN A CONSISTENT STAND THAT ADDITION U/S.69B OF T HE ACT CANNOT BE MADE TO INCOME OF ASSESSEE FOR THE DIFFERENTIAL AMO UNT WORKED OUT ON THE BASIS OF VALUATION MADE BY STAMP VALUATION A UTHORITIES FOR THE PURPOSE OF LEVY OF STAMP DUTY AND THE VALUE AS APPE ARING IN THE DOCUMENT. THE HONBLE ITAT IN THE CASE OF M/S. JALA RAM AND CO. ITA NO.3964/A/08 HAVE CONSIDERED IN DETAIL VARIOUS JUDICIAL PRONOUNCEMENTS ON THE POINT AT ISSUE AND THEREAFTER DELETED SIMILAR ADDITION U/S. 69B OF I.T. ACT, 1961. RESPECTFULLY F OLLOWING THE DECISION OF HONBLE ITAT AHMEDABAD BENCH, THE ADDITION OF RS .8,58,321/- MADE U/S. 69B OF THE I.T. ACT, 1961 IS HEREBY DELET ED. 5. THE REVENUE BEING AGGRIEVED BY THE ORDER OF CIT (A) IS NOW IN APPEAL BEFORE US. 6. BEFORE US, THE LD. D.R. SUBMITTED THAT THOUGH PR OVISIONS OF SEC. 50C ARE DEEMING PROVISIONS FOR THE PURPOSE OF COMPUTATI ON OF CAPITAL GAINS YET IT LAYS DOWN VERY BASIC PRINCIPLE THAT ANY TRANSACT ION WITHIN A PARTICULAR AREA ITA NO 1119 /AHD/2010 A.YR.. 2006 -07 4 WILL HAVE TO MATCH WITH THE JANTRI PRICE FIXED BY THE STAMP DUTY AUTHORITIES FOR THE AREA. HE FURTHER SUBMITTED THAT ONCE IT IS DEEMED AND ACCEPTED THAT THE PROPERTY HAS BEEN SOLD FOR A PARTICULAR PRICE W HICH IS THE FAIR MARKET VALUE IN A GIVEN AREA THEN IT WOULD ALSO HAVE TO BE DEEMED AND ACCEPTED THAT THE PURCHASER HAS PAID THE SAME AMOUNT. HE THU S SUPPORTED THE ORDER OF A.O. AND URGED THAT THE ORDER OF A.O. BE UPHELD. 7. ON THE OTHER HAND THE LD. A.R. SUBMITTED THAT ON IDENTICAL FACTS, THE HONBLE TRIBUNAL HAS RULED IN FAVOUR OF ASSESSEE IN THE ASSESSEES WIFE CASE. HE PLACED ON RECORD THE COPY OF THE ORDER DAT ED 9-4-2010 IN THE CASE OF REKHABEN RAJENDRA SHAH (ITA NO.3069/AHD/2008). H E THEREFORE SUBMITTED THAT SINCE THE FACTS IN THE CASE OF THE A SSESSEE ARE EXACTLY IDENTICAL TO THAT OF REKHABEN SHAH, THE ORDER OF CI T (A) BE UPHELD. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IT IS AN UNDISPUTED FACT THAT THE ASSESSEE HAS PURCHASED LAND AT DUMAS AND PIPLOD AND HAD PAID ADDITIONAL STAMP DUTY BASED ON THE JANTRY RATES WHICH WERE HIGHER THAN THE ACTUAL PURCHASE CO NSIDERATION RECORDED IN THE BOOKS OF THE ASSESSEE. THE REVENUE HAS NOT BROU GHT ANY MATERIAL ON RECORD TO SUBSTANTIATE ITS CLAIM THAT THE ASSESSEE HAS PAID CONSIDERATION OVER AND ABOVE THAN WHAT IS RECORDED AS PURCHASE CO NSIDERATION IN HIS BOOKS OF THE ASSESSEE. REVENUE HAS NOT BROUGHT ANYT HING ON RECORD TO DISTINGUISH THE FACTS IN THE CASE OF ASSESSEE WITH THAT OF SMT. REKHABEN SHAH, HIS WIFE. A.O. HAS ARRIVED AT THE FIGURE OF UNEXPLAINED INVESTMENT ON THE BASIS OF DIFFERENCE BETWEEN THE PURCHASE CONSID ERATION RECORDED IN THE BOOKS OF THE ASSESSEE AND THE JANTRY RATE ADOPTED B Y THE STAMP DUTY AUTHORITIES FOR THE PURPOSE OF LEVY OF STAMP DUTY. WE FIND THAT IN THE CASE OF ITA NO 1119 /AHD/2010 A.YR.. 2006 -07 5 REKHABEN SHAH THE CO-ORDINATE BENCH OF TRIBUNAL HAS ALLOWED THE GROUND OF ASSESSEE BY HOLDING AS UNDER: 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND TH E MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE PROPERTIES UNDER CONSIDERATION HAVE BEEN PURCHASED BY THE ASSESSEE T HROUGH REGISTERED SALE DEEDS. THE ASSESSEE CLAIMED THAT SH E HAS PAID ACTUAL CONSIDERATION WHICH IS RECORDED IN THE SALE DEEDS. THE ADDITIONAL STAMP DUTY WAS IMPOSED UPON THE ASSESSEE AS PER THE RATE PRESCRIBED BY JANTRI. THE STAMP VALUATION AUTH ORITY ADOPTED SUCH VALUATION AS PER THE JANTRI WHICH IS NOTIONAL VALUE FOR THE PURPOSE OF DETERMINING THE STAMP DUTY PAYABLE. THE ASSESSING OFFICER HAS NOT BROUGHT ANY EVIDENCE ON RECORD THAT THE ASSESSEE IN FACT HAD PAID MORE CONSIDERATION AS AGAINST THE CON SIDERATION RECORDED IN SALE DEEDS. NO MATERIAL IS BROUGHT ON R ECORD TO PROVE THAT THE ASSESSEE HAD INVESTED MORE THAN WHAT HAD BEEN S HOWN IN THE SALE DEEDS. IT WAS, THEREFORE, AN INFERENCE OF THE ASSESSING OFFICER THAT ASSESSEE PAID MORE CONSIDERATION AS AGAINST TH E CONSIDERATION SHOWN IN THE SALE DEEDS. THE LD. CIT (A) NOTED THAT EVEN IF SECTION 50C OF THE I.T. ACT IS NOT INVOKED BY THE ASSESSING OFFICER BUT THE ASSESSING OFFICER HAS APPLIED ITS PRINCIPLE. WE DO NOT AGREE WITH THE FINDINGS OF THE LD. CIT (A) BECAUSE ITAT AHMEDABAD BENCH IN THE CASES OF JALARAM & CO. AND RICHA NARESH JAIN (SUPRA ) HAVE HELD THAT PROVISIONS OF SECTION 50C OF THE I.T. ACT ARE NOT A PPLICABLE IN THE HANDS OF THE PURCHASER. IT WOULD, THEREFORE, SHOW T HAT THERE IS NO FOUNDATION FOR MAKING THE ABOVE ADDITIONS AGAINST T HE ASSESSEE. IN THE ABSENCE OF ANY FACTUAL FOUNDATION IN FAVOUR OF THE REVENUE, WE DO NOT FIND IT TO BE A FIT CASE FOR SUSTAINING THE ADDITIONS IN THE HANDS OF THE ASSESSEE. WE ACCORDINGLY SET ASIDE THE ORDER S OF THE AUTHORITIES BELOW AND DELETE BOTH THE ADDITIONS. AS A RESULT, GROUND NOS.1 AND 2 OF THE APPEAL OF THE ASSESSEE ARE ALLOW ED. 9. SINCE THE FACTS OF THE PRESENT CASE ARE IDENTICA L TO THAT OF THE REKHABEN SHAH, WE RESPECTFULLY FOLLOWING THE ORDER OF CO-ORDINATE BENCH, FIND NO REASON TO INTERFERE WITH THE ORDER OF CIT ( A). THUS THE GROUND OF THE REVEUE IS DISMISSED. ITA NO 1119 /AHD/2010 A.YR.. 2006 -07 6 10. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN OPEN COURT ON 23 - 11 - 2012 . SD/- SD/- (MUKUL KUMAR SHRAWAT) (ANIL CHATURVEDI) JUDICIAL MEMBER ACC OUNTANT MEMBER AHMEDABAD. S.A.PATKI. COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS)-V, SURAT. 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR IT AT,AHMEDABA 1.DATE OF DICTATION 1 - 11 -2012 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING 21 / 11 / 2012 MEMBER.OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S - -2012. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT - -2012 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S - -2012 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK - -2012. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER ..