ITO, Jaipur V. SH. RAM PRASAD CHOUDHARY, Jaipur

ITA 1139/JPR/2011

• Counselvise Citation: 113923114 RSA 2011
• Duration Of Justice: 2 year(s) 8 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 29-12-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D C SHARMA
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Opportunity of being heard; Cost of acquisition; Corroborative evidences
• Section: 54B

Judgement Text

IN THE INCOMETAX APPELLATE TRIBUNAL JAIPUR BENCH: JAIPUR (BEFORE SHRI R.P. TOLANI AND SHRI T.R. MEENA) I.T.A. NO. 1139/JP/2011 ASSTT. YEAR- 2008-09 PAN NO. ADIPC 3763 H THE I.T.O., SHRI RAM PRASAD CHOUDHARY, WARD 3(1), JAIPUR. VRS. D-167, HANUMAN NAGAR, VAISHALI NAGAR, JAIPUR. (APPELLANT) (RESPONDENT) DEPARTMENT BY :- SHRI D.C. SHARMA. ASSESSEE BY :- NONE. DATE OF HEARING : 03/09/2014 DATE OF PRONOUNCEMENT : 12/09/2014 O R D E R PER: T.R. MEENA, A.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER DATED 05/10/2011 OF THE LEARNED C.I.T.(A)-I, JAIPUR FOR TH E A.Y. 2008-09. THE EFFECTIVE GROUNDS OF APPEAL ARE AS UNDER:- WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(A) IS JUSTIFIED IN:- (I) RESTRICTING THE ADDITION OF RS. 1,60,000/- AS AGAIN ST RS. 20,45,000/- MADE BY THE A.O. ON ACCOUNT OF UNEXPLAI NED CASH DEPOSITS IN THE BANK ACCOUNTS OF THE ASSESSEE. (II) DELETING ADDITION OF RS. 38,51,000/- MADE ON ACCOUN T OF SHORT TERM CAPITAL GAIN. ITA 1139/JP/2011 ITO VS. RAM PD. CHAUDHARY 2 2. THE FIRST GROUND OF APPEAL IS AGAINST RESTRICTING THE ADDITION OF RS. 1,60,000/- AGAINST RS. 20,45,000/- MADE BY THE ASSE SSING OFFICER. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAD DE POSITED CASH AMOUNTING TO RS. 36,95,000/- ON VARIOUS DATES IN HIS BANK ACCOUN T MAINTAINED WITH AXIX BANK. THE OTHER MEMBERS OF HIS FAMILY HAD ALSO DEPOS ITED HUGE CASH IN THE BANK ACCOUNTS DURING THE SAME FINANCIAL YEAR AND MO STLY CASH WERE DEPOSITED ON COMMON DATES. DETAILS OF MAJOR CASH DEPOSITS OF ASSESSEE, HIS SON AND WIFE ARE AS UNDER:- DATE SONI DEVI CHOUDHARY SURENDRA KUMAR CHOUDHARY (MINOR SON OF ASSESSEE) SHRI RAM PRASAD CHOUDHARY, (HUSBAND OF ASSESSEE) 20/06/2010 RS. 4800/- & RS. 5,000/- 29/11/07 RS. 1,50,000/- 06/12/07 RS. 4,00,000/- 31/08/2010 RS. 1,00,000/- 06/12/07 RS. 9,00,000/- 24/09/2007 RS. 5,00,000/- RS. 10,00,000/- 17/12/07 RS. 2,50,00 0/- 24/09/2007 RS. 5,00,000/- 28/12/07 RS. 1,00,000/- 18/01/2008 RS. 7,05,000/- RS. 6,00,000/- 18/01/08 RS. 9,95,000 /- 18/01/08 RS. 9,00,000/- 28/01/2008 RS. 5,50,000/- RS. 6,00,000/- TOTAL RS. 22,55,000/- RS. 33,09,800/- RS. 36,95,000/ - THE ASSESSING OFFICER GAVE REASONABLE OPPORTUNITY OF BEING HEARD ON THIS ISSUE, WHICH WAS AVAILED BY THE ASSESSEE. IT WAS SUBM ITTED BEFORE THE ASSESSING OFFICER THAT THE ASSESSEE WAS HAVING 1.94 HECTARES AGRICULTURAL LAND AT GRAM- NEWTA, TEHSIL- SANGANER, JAIPUR, WHICH WAS US ED FOR CULTIVATION. DURING THE YEAR UNDER CONSIDERATION, PART OF AGRICU LTURAL LAND WAS COMPULSORY ACQUIRED BY THE JAIPUR DEVELOPMENT AUTHORITY FOR RI NG ROAD AND PART OF THE ITA 1139/JP/2011 ITO VS. RAM PD. CHAUDHARY 3 AGRICULTURAL LAND WAS SOLD BY THE ASSESSEE. TOTAL SA LE PROCEEDS RECEIVED BY THE ASSESSEE HAD BEEN INVESTED IN PURCHASE OF ANOTH ER AGRICULTURAL LAND AT GRAM DUDU, TEHSIL MOJMABAD MEASURING 11 BIGHAS 12 BI SWAS. THUS, IT WAS CLAIMED BY THE APPELLANT THAT THERE WAS NO CAPITAL G AIN AS INVESTED IN PURCHASE OF ANOTHER AGRICULTURAL LAND. THE APPELLANT HAD NOT EXPLAINED THE SOURCE OF CASH DEPOSITED IN THE IN HIS BANK ACCOUNT AND BANK ACCOUNTS OF HIS FAMILY MEMBERS BEFORE THE ASSESSING OFFICER. THEREFO RE, HE MADE ADDITION OF RS. 20,45,000/- U/S 69 OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT). 3. BEING AGGRIEVED BY THE ORDER OF THE LEARNED ASSE SSING OFFICER, THE ASSESSEE CARRIED THE MATTER TO THE LEARNED CIT(A), WHO HAD ALLOWED THE APPEAL PARTLY BY OBSERVING AS UNDER:- I HAVE CAREFULLY PERUSED THE ORDER OF THE A.O. AND SUBMISSIONS OF THE AR. THIS IS THE FIRST YEAR OF FILING OF RETURN BY TH E APPELLANT. IT IS SEEN THAT THE ASSESSEE HAS NOT MAINTAINED ANY RECORDS FO R ITS AGRICULTURAL INCOME OR THE INCOME FROM SUPPLY OF MILK. SIMILARLY , NO DETAILS HAVE BEEN PLACED ON RECORD TO SHOW THE INCOME EXPENDITURE STATEMENT OF THE ASSESSES AND WITHDRAWALS FOR THE HOUSEHOLD PURPOSES. IN ABSENCE OF ANY KIND OF SUPPORTING EVIDENCE/RECORD. I DO NOT SE E ANY REASON TO GIVE ANY BENEFIT TO THE ASSESSEE REGARDING THE SOURCE OF CASH DEPOSITS OF RS. 1 LAC MADE ON 01/4/2007 AND RS. 60,000/- MADE ON 30 /09/2007. THE SUBSEQUENT STATEMENT OF CASH FLOW STATEMENT SHOWS R EGULAR WITHDRAWALS AND DEPOSITS FROM THE BANK ACCOUNTS. THE DEPOSITS HAVE BEEN SOUGHT TO BE EXPLAINED FROM THESE WITHDRAWALS. I N ABSENCE OF ANY EVIDENCE ON RECORD TO SHOW THAT THESE WITHDRAWALS WERE USED BY THE ASSESSEE ELSEWHERE HIS SUBMISSION ARE ACCEPTED. THERE FORE, OUT OF THE TOTAL ADDITION MADE U/S 69 OF RS. 20,45,500/-, RS. 1,60,000/- IS CONFIRMED. 4. NOW THE REVENUE IS IN APPEAL BEFORE US. ITA 1139/JP/2011 ITO VS. RAM PD. CHAUDHARY 4 5. THE LEARNED D.R. ARGUED THAT THE LEARNED CIT(A) H AD ACCEPTED THE EXPLANATION OF RS. 18,85,000/- WITHOUT GIVING ANY OP PORTUNITY TO THE ASSESSING OFFICER. FURTHER NO EVIDENCES WERE PRODUCED BY THE A SSESSEE BEFORE THE ASSESSING OFFICER TO EXPLAIN THE CASH DEPOSITED IN THE BANK ACCOUNTS. ON BEHALF OF THE ASSESSEE, NO ONE HAS APPEARED TO DEFE ND HIM. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. THE LEARNED CIT(A) HAD NOT GIVEN ANY FINDING ON SOURCE OF CASH WITH EVIDENCE WHETHER THIS CASH WAS RECEIVED FROM SALE OF LAND OR SOMEWHERE ELSE. FURTHER IT IS UNDISPUTED FACT THAT THE ASSESS EE HAD PURCHASED AGRICULTURAL LAND IN THE MONTH OF FEBRUARY, 2008. THE CIT(A)S O RDER IS VERY CRYPTIC AND HAD NOT ANALYZED ANY EVIDENCE PRODUCED BY THE APPEL LANT DURING THE APPELLATE PROCEEDINGS IN DETAIL. THEREFORE, WE SET ASIDE THE OR DER OF THE LEARNED CIT(A) FOR DE NOVO AND IS DIRECTED TO DECIDE THE CASE AFRE SH AFTER PROVIDING A REASONABLE OPPORTUNITY OF BEING HEARD TO BOTH THE P ARTIES IN ACCORDANCE WITH LAW. 7. THE SECOND GROUND OF APPEAL IS AGAINST DELETING A DDITION OF RS. 38,51,000/- MADE ON ACCOUNT OF SHORT TERM CAPITAL G AIN. THE LEARNED ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAD SO LD PLOTS FOR SALE CONSIDERATION OF RS. 38,51,000/- VIDE SALE DEEDS DA TED 10/9/2007 AND 31/10/2007. DURING THE COURSE OF ASSESSMENT PROCEE DINGS, THE ASSESSEE FILED REVISED COMPUTATION CLAIMING THAT NO CAPITAL GAIN WA S ARISEN ON THESE TRANSACTIONS AS LAND WAS SOLD ON RESERVED PRICE. THO UGH, THE ABOVE LAND WAS ITA 1139/JP/2011 ITO VS. RAM PD. CHAUDHARY 5 CONVERTED AS COMPENSATION OF ACQUISITION OF HIS PAR ENTAL LAND, HOWEVER, NO CASH PAYMENT WAS MADE BY THE ASSESSEE FOR THIS LAND. THE ASSESSEE DID NOT FILE ANY EVIDENCE BEFORE THE ASSESSING OFFICER FOR COST OF ACQUISITION OF LAND AND ALSO NOT FILED ANY EVIDENCE THAT THIS PROPERTY WAS ANCESTRAL AS ON 01/4/2981. THUS, HE DID NOT ALLOW ANY DEDUCTION ON AC COUNT OF COST OF ACQUISITION AND THE LEARNED ASSESSING OFFICER ASSES SED THIS CAPITAL GAIN AS SHORT TERM CAPITAL GAIN. 8. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER BEFORE THE LEARNED CIT(A), WHO HAD ALLOWED THE APPEAL OF THE ASSESSEE BY OBSERVING AS UNDER:- I HAVE CAREFULLY PERUSED THE ORDER OF THE A.O. AND SUBMISSIONS OF THE AR. THE FOLLOWING FACTS EMERGE: (I) JDA ACQUIRED 9600 SQ. MTRS. OF AGRICULTURAL LAN D OWNED BY THE ASSESSEE IN VILLAGE NEWTA. IN LIEU OF WHICH 1920 SQ. MTRS. OF RESIDENTIAL LAND AND 480 SQ. MTRS. OF COMMERCIAL LA ND WAS ALLOTTED TO THE ASSESSEE. THE AWARD CUM ALLOTMENT LETTER OF JD A DATED 23/08/2007 WAS FILED WHEREIN IT HAS BEEN MENTIONED TH AT THE LAND WAS ACQUIRED BY THE GOVT. FOR SEZ IN LIEU OF WHICH TH E ASSESSEE WAS ALLOTTED 1920 SQ. MTRS. RESIDENTIAL LAND AND 480 SQ. MTRS OF COMMERCIAL LAND. (II) THESE TWO PIECES OF LAND WERE SUBSEQUENTLY SOLD B Y THE ASSESSEE VIDE AGREEMENT TO SALE DATED 06/2/2008 TO SMT. PARA MESHWARI DEVI AND SHRI MAHESH AGARWAL FOR RS. 38.51 LACS. (III) THE JDA COMPENSATED THE ASSESSEE FOR ACQUISITI ON OF HIS AGRICULTURAL LAND NOT IN CASH BUT BY ALLOTTING RESI DENTIAL AND COMMERCIAL LAND AT VILLAGE NEWTA. THE INITIAL VALUE O F THIS LAND WOULD BE EXEMPT U/S 10(37). ITA 1139/JP/2011 ITO VS. RAM PD. CHAUDHARY 6 (IV) THIS WAS SUBSEQUENTLY SOLD BY THE ASSESSEE VIDE AGREEMENT TO SALE DEED DATED 06/2/2008 I.E. WITHIN A SPAN OF 6 MO NTHS. THE TAXABLE CAPITAL GAINS IN THE HANDS OF THE APPELLANT WOULD BE THE DIFFERENCE BETWEEN THE VALUE OF LAND ALLOTTED TO THE APPELLANT ON 23/08/2007 I.E. THE DATE OF ACQUISITION OF THE CAPI TAL ASSET AND THE DATE OF SALE I.E. 06/2/2008. IT IS UNLIKELY THAT TH E PRICE OF LAND WOULD HAVE INCREASED SUBSTANTIALLY DURING THE 6 MONT H PERIOD SINCE THE STAMP DUTY AUTHORITIES ALSO DETERMINED TH E CIRCLE RATE ANNUALLY. IN ANY CASE, THE LAND WAS NOT TRANSFERRED THROUGH REGISTERED SALE DEED. THEREFORE, IT WOULD NOT COME UN DER THE PURVIEW OF SECTION 50C. IN VIEW OF THE ABOVE FACTS, T HE IMPUGNED ADDITION OF RS. 38.51 LACS IS DIRECTED TO BE DELETE D. 9. NOW THE REVENUE IS IN APPEAL BEFORE US AND IT HAS BEEN ARGUED BY THE LEARNED D.R. THAT THE ASSESSEE HAD NOT SUBSTANTIATE D THIS CASE BEFORE THE ASSESSING OFFICER AS WELL AS LEARNED CIT(A) WHETHER AG RICULTURAL LAND WAS ANCESTRAL OR ACQUIRED AS ON 01/4/1981 WITH EVIDENCES . THE LEARNED CIT(A) ALSO IS SILENT ON THESE ISSUES IN HER ORDER AND ON WHAT B ASIS SHE HAD ALLOWED THE APPEAL, IS NOT CLEAR. THEREFORE, ORDER MAY BE SET AS IDE TO THE LEARNED CIT(A). FROM THE SIDE OF THE ASSESSEE, NO ONE HAS APPEARED. 10. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. THE FACTS DID NOT EMERGE WHETHER THE A SSESSEE WAS OWNER OF THIS LAND ON 01/4/1981 THROUGH INHERITANCE OR PURCH ASE OF LAND. EVEN DATE OF ACQUISITION BY THE JDA IS NOT ON RECORD. THE DATE O F SALE OF PLOTS WAS GIVEN BY THE LEARNED CIT(A) AS ON 06/2/2008 WHEREAS THE LEAR NED ASSESSING OFFICER HAS SHOWN THESE DATES AS 10/09/2007 AND 31/10/2007. THE LEARNED CIT(A) HAD NOT VERIFIED WHETHER THIS LAND WAS AGRICULTURAL LAND AS PER SECTION 10(37) ITA 1139/JP/2011 ITO VS. RAM PD. CHAUDHARY 7 OF THE ACT. AS PER SECTION 2(47) OF THE ACT, THE CO MPULSORY ACQUISITION ALSO IS A TRANSFER OF CAPITAL ASSETS ON WHICH CAPITAL GAIN IS APPLICABLE. FURTHER AS PER SECTION 2(47) OF THE ACT, EXCHANGE OF AGRICULTURAL LAND WITH TWO PLOTS ALSO IS TRANSFER OF CAPITAL ASSETS. THE ASSESSEE CLAIMED BEF ORE THE CIT(A) THAT HE HAS PURCHASED ANY OTHER LAND FOR AGRICULTURAL PURPOSES WITHIN SECTION 54B OF THE ACT. THEREFORE, THE LEARNED CIT(A) HAS NOT PASSED A SPEAKING ORDER AFTER CONSIDERING THE LEGAL PROPOSITION ON THIS ISSUE. AC CORDINGLY WE SET ASIDE THIS ISSUE TO THE LEARNED CIT(A) AND DIRECTED TO GIVE RE ASONABLE OPPORTUNITY OF BEING HEARD TO BOTH THE PARTIES AND DECIDE THE CASE AS PER LAW. 11. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES ONLY. ORDER PRONOUNCED IN THE OPEN COURT ON 12/09/2014. SD/- SD/- (R.P. TOLANI) (T.R. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER JAIPUR, DATED : 12 TH SEPTEMBER, 2014 * RANJAN COPY FORWARDED TO :- 1. THE ITO, WARD 3(1), JAIPUR. 2. SHRI RAM PRASAD CHOUDHARY, JAIPUR. 3. THE CIT (A) 4. THE CIT 5. THE D/R GUARD FILE (I.T.A. NO. 1139/JP/2011) BY ORDER, AR ITAT JAIPUR.