R.Jayakumar, CHENNAI V. ACIT, Trichy

ITA 1129/CHNY/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7983 (ITAT-CHENNAI)
• Duration Of Justice: 3 year(s) 6 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 21-11-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 23-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R DURAI
• Assessee Lawyers: S SRIDHAR

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI . . . , !' . #$#% , & '' ( [BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER ] ./I.T.A. NOS. 1129 & 1130/MDS/2013. / ASSESSMENT YEARS : 2005-06 & 2009-2010. SHRI. R. JAYAKUMAR, PROPRIETOR :M/S. SREE VIJAYA PLYWOODS, 70, MADURAI ROAD, TIRUCHIRPALLI 8. [PAN AAHPJ 3219M ] VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE II, TIRUCHIRAPALLI. ( )* / APPELLANT) ( +,)* /RESPONDENT) / APPELLANT BY : SHRI. S. SRIDHAR, ADVOCATE /RESPONDENT BY : SHRI. R. DURAI PANDIAN, IRS, JCIT. /DATE OF HEARING : 21-11-2016 ! /DATE OF PRONOUNCEMENT : 25-11-2016 / O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER THESE APPEALS FILED BY THE REVENUE ARE DIRECTED AGAINST ORDERS DATED 26.02.2013 BY LD. COMMISSIONER OF INCO ME TAX (APPEALS), TIRUCHIRAPALLI. APPEAL FOR THE ASSESSMEN T YEAR 2005-06 IS FIRST TAKEN UP FOR DISPOSAL. ITA NOS1129 & 1130/MDS/13. :- 2 -: 2. THOUGH ASSESSEE HAS TAKEN ALTOGETHER EIGHT GROUNDS, ITS EFFECTIVE GRIEVANCE IS ON AN ADDITION OF B6,00,000 /- CONFIRMED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS). 3. FACTS APROPOS ARE THAT ASSESSEE AN INDIVIDUAL WAS SUBJECTED TO A SEARCH ON 26.08.2009. PURSUANT TO THE SEARC H, A NOTICE U/S.153A OF THE INCOME TAX ACT, 1961 (HEREIN AFTER REFERRE D TO AS THE ACT) WAS ISSUED TO THE ASSESSEE FOR THE IMPUGNED ASSESSM ENT YEAR, ALONGWITH OTHERS. ASSESSEE HAD DURING THE RELEVANT PREVIOUS YEAR PURCHASED LAND MEASURING 5000 SQ.FT WITH A SMALL BU ILDING FOR A CONSIDERATION OF B19,00,000/- SHOWN IN THE DEED. I NCLUDING REGISTRATION AND STAMP DUTY EXPENDITURE FOR THE ACQ UISITION AS PER THE ASSESSEE CAME TO B21,00,000/-. DURING THE COURSE OF SEARCH PROCEEDINGS A SWORN STATEMENT RECORDED FROM THE ASS ESSEE AND IN SUCH SWORN STATEMENT, IT WAS STATED BY THE ASSESSEE THAT HE HAD PAID APPROXIMATELY B25,00,000/- FOR THE PURCHASE OF ABOV E PROPERTY. LD. ASSESSING OFFICER ALSO NOTED THAT GUIDELINE VALUE F IXED BY THE TAMIL NADU REVENUE DEPARTMENT AUTHORITIES FOR THIS PROPER TY CAME TO B32,68,111/-. LD. ASSESSING OFFICER REACHED A CON CLUSION THAT ACTUAL CONSIDERATION PAID WAS B25,00,000/- AND MADE AN ADD ITION OF B.6,00,000/-. 4. AGGRIEVED, ASSESSEE MOVED IN APPEAL BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS). ARGUMENT OF T HE ASSESSEE WAS ITA NOS1129 & 1130/MDS/13. :- 3 -: THAT SWORN STATEMENT WAS RECORDED MANY YEARS AFTER PURCHASE OF THE PROPERTY. ACCORDING TO THE ASSESSEE, THE SUM OF B2 5,00,000/- MENTIONED BY HIM ON THE DATE OF THE SEARCH WAS AN APPROXIMATE FIGURE. FURTHER AS PER ASSESSEE, GUIDELINE VALUE AD OPTED BY THE STATE REVENUE AUTHORITIES COULD BE NEVER THE BASIS FOR AN ADDITION. HOWEVER, LD. COMMISSIONER OF INCOME TAX (APPEALS) W AS NOT IMPRESSED BY THE ABOVE CONTENTIONS. HE CONFIRMED TH E ADDITION. 5. NOW BEFORE US, LD. AUTHORISED REPRESENTATIVE SUBMIT TED THAT ASSESSEE IN THE SWORN STATEMENT MENTIONED THE SUM O F B25,00,000/- AS AN APPROXIMATE COST. ACCORDING TO HIM, JUST BECA USE TAMIL NADU REVENUE AUTHORITIES FIXED A HIGHER VALUE FOR THE IM PUGNED PROPERTY WOULD NOT MEAN A CONSIDERATION IN EXCESS OF WHAT WAS STATED IN THE CONVEYANCE DEED WAS PAID. ACCORDING TO HIM, THE ADD ITION WAS UNJUSTLY MADE. 6. PER CONTRA, LD. DEPARTMENTAL REPRESENTATIVE STRONGL Y SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 7. WE HEARD THE RIVAL CONTENTIONS AND PERUSED THE ORDE RS OF THE AUTHORITIES BELOW. WHAT THE ASSESSEE HAD STATED AT THE TIME OF SEARCH IS REPRODUCED HEREUNDER:- HOUSE IN MY NAME AT DOOR NO.49, PARK VIEW, ANNA NAGAR, TENNUR. PLOT AREA: 5000 SQ.FT PURCHASED SOME 5 YEARS BACK AT A COST OF B25 LAKHS APPROX THE PER SQ .FT B500 TO B550/- APPROX. ITA NOS1129 & 1130/MDS/13. :- 4 -: THE ABOVE STATEMENT WAS RECORDED ON 26.08.2009. THE PURCHASE OF THE PROPERTY WAS ON 09.12.2004. SO, THERE WAS A GA P OF MORE THAN FOUR YEARS BETWEEN THE DATE OF RECORDING OF THE ST ATEMENT AND THE DATE OF ACQUISITION OF LAND. HENCE, WE CANNOT SAY THAT THE APPROXIMATE VALUE OF B25,00,000/- MENTIONED BY THE ASSESSEE WAS A SACROSANCT ONE, AND SUFFICIENT REASON TO MAKE AN A DDITION. LD. ASSESSING OFFICER HAS NOT GIVEN ANY REASON FOR ADOP TING THE VALUE OF B25,00,000/- EXCEPT FOR THE APPROXIMATE AMOUNT MEN TIONED BY THE ASSESSEE IN THE STATEMENT RECORDED FROM HIM. ADMITT EDLY TAMIL NADU REVENUE AUTHORITIES HAD FIXED THE VALUE B32,68,111/ -, BUT THIS FIGURE WAS NOT CONSIDERED BY THE ASSESSING OFFICER FOR COM PUTING THE UNDISCLOSED INVESTMENT MADE BY THE ASSESSEE. THER E WERE THREE FIGURES AVAILABLE WITH THE LD. ASSESSING OFFICER, V IZ: (I) WHAT WAS STATED BY THE ASSESSEE IN THE CONVEYANCE DEED. (I I) WHAT WAS MENTIONED BY THE ASSESSEE IN THE STATEMENT RECORDED U/S.132(4) OF THE ACT AND (III) WHAT WAS FIXED BY THE TAMIL NADU REVENUE AUTHORITIES AS GUIDELINE VALUE. WHEN THERE IS A DOUBT REGARDI NG ACTUAL CONSIDERATION WHAT CAN BE TAKEN AS REAL IS THE AMO UNT MENTIONED IN THE CONVEYANCE DEED. FOR BRUSHING ASIDE THE CONSID ERATION WHICH IS MENTIONED IN A CONVEYANCE DEED, WHICH IS A REGISTER ED DOCUMENT, STRONG AND IRREFUTABLE MATERIAL EVIDENCE IS REQUIR ED. NOTHING OF THIS SORT HAS BEEN BROUGHT ON RECORD BY THE REVE NUE. WE ARE OF THE ITA NOS1129 & 1130/MDS/13. :- 5 -: OPINION THAT ADDITION WAS NOT WARRANTED ON THE FACT S AND CIRCUMSTANCES OF THE CASE. SUCH ADDITION STANDS DEL ETED. 8. NOW, WE TAKE UP APPEAL OF THE ASSESSEE FOR THE ASS ESSMENT YEAR 2009-2010. 9. SOLE GRIEVANCE RAISED BY THE ASSESSEE, THROUGH ITS GROUNDS NO. 1 TO 8, IS ON AN ADDITION OF B80,550/- . 10. FACTS APROPOS ARE THAT DURING THE COURSE OF SEARCH, IT WAS FOUND THAT ASSESSEE HAD CONSTRUCTED A RESIDENTIAL H OUSE. THE RESIDENTIAL HOUSE COMPRISED OF TWO FLOORS. IN ANSWE R TO A QUERY, ASSESSEE HAD MENTIONED DURING THE COURSE OF SEARCH, THAT CONSTRUCTION HAD STARTED IN THE YEAR 2006 AND WAS COMPLETED IN T HE YEAR 2009. THE BOOKS IMPOUNDED FROM THE PREMISES OF ONE M/S. SHRI . VIJAYA PLYWOODS TRICHY DID REFLECT THE COST OF THE CONSTRUCTION OF SAID BUILDING. AS PER ASSEESSEE, FUNDS WERE TRANSFERRED FROM VIJAYA PLYWO ODS TRICHY TO HIS PERSONAL ACCOUNT WITH ICICI BANK, MAIN BRANCH, TRIC HY AND THIS WAS UTILIZED FOR CONSTRUCTION OF THE BUILDING. IN THE R ETURN FILED PRIOR TO THE SEARCH, THE ASSESSEE HAD SHOWN IN ITS BALANCE SHEET , THE COST OF CONSTRUCTION OF THE BUILDING AT B52,25,450/-. LD. ASSESSING OFFICER MADE A REFERENCE TO THE VALUATION CELL OF THE INCO ME TAX DEPARTMENT. DISTRICT VALUATION OFFICER VALUED THE SAID PROPERTY AS RS.53,06,000/-. AN ADDITION OF RS.80,550/- WAS MADE. ITA NOS1129 & 1130/MDS/13. :- 6 -: 11. AGGRIEVED, ASSESSEE MOVED IN APPEAL BEFORE LD. COMMISSIONER OF INCOME TAX (APPEALS) BUT DID NOT ME ET WITH ANY SUCCESS. 12. NOW BEFORE US, LD. AUTHORISED REPRESENTATIVE SUBMI TTED THAT DIFFERENCE BETWEEN VALUE SHOWN BY THE ASSESSEE AND VALUE FIXED BY THE DISTRICT VALUATION OFFICER WAS VERY MEAGRE AND INSIGNIFICANT. ACCORDING TO HIM, FIXING THE VALUE OF THE BUILDING WAS DONE ON ESTIMATES AND THEREFORE SMALL VARIATIONS COULD ALWA YS BE THERE. RELIANCE WAS PLACED ON THE JUDGMENT OF HONBLE SUPR EME COURT IN THE CASE OF SARGAM CINEMA VS. CIT, 328 ITR 513 . 13. PER CONTRA, LD. DEPARTMENTAL REPRESENTATIVE STRONGL Y SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 14. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSE D THE ORDERS OF THE AUTHORITIES BELOW. ASSESSEE HIMSELF HAD ADMITTED THE COST OF CONSTRUCTION AS B52,25,450/- AND THIS WAS R ECORDED IN THE NOTEBOOK FOUND DURING THE SEARCH. WHEN A REFERENCE WAS MADE TO THE DVO, VALUE WAS FIXED AT B53,06,000/-. WHEN ASSESSEE HAD SHOWN EXPENDITURE INCURRED FOR CONSTRUCTION IN HIS BOOKS, UNLESS AND UNTIL THESE WERE FOUND DEFECTIVE IN OUR OPINION, LD. AS SESSING OFFICER COULD NOT HAVE REFERRED THE MATTER TO THE VALUATION. NO MATTER WHICH AUTHORITIES HAS DONE A VALUATION, THERE IS BOUND TO BE ELEMENTS OF ITA NOS1129 & 1130/MDS/13. :- 7 -: ESTIMATION THEREON. HENCE VARIATION OF B80,550/- OVER A COST OF B52,25,450/- CANNOT BE CONSIDERED SO SUBSTANTIAL WA RRANTING AN ADDITION FOR UNDISCLOSED INVESTMENTS. CONSIDERING THE FACTS AND CIRCUMSTANCES, WE ARE OF THE OPINION THAT THE ADDI TION WAS NOT JUSTIFIED. SUCH ADDITION STANDS DELETED. 15. IN THE RESULT, THE APPEALS OF THE ASSESSEE FOR BOTH YEARS ARE ALLOWED. ORDER PRONOUNCED ON FRIDAY, THE 25TH DAY OF NOV EMBER, 2016, AT CHENNAI. SD/- SD/- ( . . . ' ) (N.R.S. GANESAN) / JUDICIAL MEMBER ( !' . #$#% ) (ABRAHAM P. GEORGE) & / ACCOUNTANT MEMBER #$ / CHENNAI %& / DATED: 25TH NOVEMBER, 2016 KV &' ()*) / COPY TO: 1 . / APPELLANT 3. +,' / CIT(A) 5. )-. / / DR 2. / RESPONDENT 4. + / CIT 6. .01 / GF