Dy.CIT, Circle-6(1), Hyderabad V. Sri Karim Nawas Alladin, Hyderabad

ITA 115/HYD/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5862 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 10 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2016
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 08-08-2016
• Assessment Year: 2004-2005
• Appeal Filed On: 04-02-2013
• Court: TRIBUNAL
• Department Lawyers: K V N CHARYA
• Assessee Lawyers: V SIVA KUMAR; C S SUBRAHAMANYA
• Keywords: Sale consideration of property below Jantri Value; Additional evidence; Condonation of delay
• Section: 50C; 133A; 133(6); 147; 144

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SMT P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO. 180/HYD/2013 ASSESSMENT YEAR: 2004-05 ITA NO. 181/HYD/2013 ASSESSMENT YEAR: 2005-06 ITA NO. 183/HYD/2013 ASSESSMENT YEAR: 2007-08 KARIM NAWAZ ALLADIN, HYDERABAD PAN ABQPA5282R VS. ACIT, CIRCLE - 6 (1). HYDERABAD (APPELLANT) (RESPONDENT) ITA NO. 115/HYD/2013 ASSESSMENT YEAR: 2004-05 ITA NO. 116/HYD/2013 ASSESSMENT YEAR: 2005-06 ACIT, CIRCLE - 6(1). HYDERABAD VS. KARIM NAWAZ ALLADIN, HYDERABAD PAN ABQPA5282R (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI C.S SUBRAHAMANYA & SHRI V. SIVA KUMAR REVENUE BY : SHRI K.V.N CHARYA DATE OF HEARING : 07 - 12 - 2016 DATE OF PRONOUNCEMENT : 30 - 12 - 2016 O R D E R PER P. MADHAVI DEVI, J.M.: ALL ITA NOS. 180,181,183/HYD/2013 ARE THE APPEALS FILED BY THE ASSESSEE FOR THE A.Y. 2004-05, 2005-06 AND 2 007-08, RESPECTIVELY AND ITA NOS. 115 & 116/HYD/2013 ARE RE VENUES APPEALS FOR THE A.YS 2004-05 AND 2005-06 RESPECTIVE LY. ALL THESE APPEALS ARE AGAINST THE COMMON AND CONSOLIDAT ED ORDER OF THE CIT(A) - 4 HYDERABAD, DATED 28-11-2012, 2 ITA NOS. 180,181,182, 115 & 116/HYD/2013 M/S. KARIM NAWAZ ALLADIN. 2. FOR THE A.Y. 2004-05, THE ASSESSEE HAS RAISED TH E FOLLOWING GROUNDS OF APPEAL. 1 . THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ER RED ON POINTS OF LAW AND FACTS. 2.THE COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE ALLOWED BALANCE CHEQUE DEPOSITS OF RS, 2,15,34,850/ - AS PART OF SALE CONSIDERATION BASED ON FACTS AND CIRCUMSTANCES OF THE CASE. 3.THE COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE ALLOWED BALANCE CASH DEPOSITS OF RS.I,03,25,800/ A S PART OF SALE CONSIDERATION BASED ON FACTS AND CIRCUMSTANCES OF THE CASE. 4. THE COMMISSIONER OF INCOME TAX (APPEALS) OUGHT T O HAVE HELD THAT THE ADVANCES MADE BY THE ASSESSEE OF RS.8,00,0 00/ WAS OUT OF HIS INCOME BASED ON FACTS AND CIRCUMSTANCES OF THE CASE. 5. THE COMMISSIONER OF INCOME TAX (APPEALS) OUGHT T O HAVE ALLOWED THE BENEFIT OF TELESCOPING OF SALE CONSIDERATION/ADVANCES RECEIVED YEAR TO YEAR FROM T HE SALE OF THE PROPERTY TO THAT OF DEPOSITS IN BANK ACCOUNT. 6. ANY OTHER GROUND AT TIME OF HEARING. 3. EXCEPT THE QUANTUM IN THE ABOVE GROUNDS OF APP EAL, THE GROUNDS RAISED BY ASSESSEE IN OTHER YEARS ARE ALSO THE SAME. THEREFORE, THE GROUNDS OF APPEALS IN ALL THE YEARS ARE CONSIDERED AND DISPOSED OF BY WAY OF THIS COMMON AN D CONSOLIDATED ORDER. 4. AT THE OUT SET, IT IS NOTICED THAT THERE IS A D ELAY OF 15 DAYS IN FILING OF THE APPEALS BEFORE THE TRIBUNAL A ND THE ASSESSEE HAS FILED AN APPLICATION FOR CONDONATION OF DELAY ALONG WITH AN AFFIDAVIT OF THE ASSESSEE. IN THE SA ID APPLICATION, IS STATED THAT THE ASSESSEE WAS SUFFERING FROM SEVE RE OPTICAL PROBLEMS DURING JANUARY 2013, WHICH REQUIRED PROLON GED MEDICAL ATTENTION AND THEREFORE, THERE OCCURRED A D ELAY OF 15 DAYS. HAVING REGARD TO THE RIVAL CONTENTIONS ON TH IS ISSUE, WE ARE SATISFIED THAT THE DELAY IS NOT WILLFUL OR INT ENTIONAL. 3 ITA NOS. 180,181,182, 115 & 116/HYD/2013 M/S. KARIM NAWAZ ALLADIN. THEREFORE, WE CONDONE THE DELAY AND PROCEED TO DIS POSE OF THE APPEALS AS UNDER. 5. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, A N INDIVIDUAL, FILED HIS RETURN OF INCOME FOR RELEVANT A.YS. THERE WAS A SURVEY OPERATION U/S 133A OF THE INCOME TAX ACT ON 11-03-2 010, IN THE CASE OF ASSESSEE AND M/S ALLDADDHIN INVESTMENT S AND PROPERTIES. DURING THE COURSE OF SURVEY, SOME REGIS TERED SALE DEEDS WERE FOUND AS PER WHICH, THE ASSESSEE HAS REC EIVED SALE CONSIDERATION BY WAY OF CHEQUES TOWARDS SALE OF HIS SHARE OF LAND. SINCE ASSESSEE DID NOT DISCLOSE THE CAPITAL GAINS ARISING OUT OF SALE OF THE ABOVE PROPERTIES, ASSESSMENTS WE RE RE-OPENED AND NOTICE U/S148 OF THE ACT, WAS ISSUED. IN RESPO NSE, THE ASSESSEE FILED A RETURN OF INCOME DISCLOSING TAXABL E INCOME AT RS. 6,73,481/-, FOR THE A.Y.2004-05. DURING THE PR OCEEDINGS U/S 147 OF THE ACT, THE ASSESSEE WAS REQUIRED TO FI LE VARIOUS DETAILS. HOWEVER, ASSESSEE DID NOT FILE THE REQUIR ED DETAILS. THE A.O. THEREFORE, CALLED FOR THE DETAILS OF BOTH THE ASSESSEE AND M/S KARIM NAWAZ ALLADIN FROM THE BANKS UNDER SE CTION 133(6) OF THE ACT AND ON EXAMINING THE BANK ACCOUNT S, THE ASSESSEE WAS DIRECTED TO FILE THE DETAILS WITH REGA RD TO THE SOURCES FOR THE DEPOSITS APPEARING IN BANK ACCOUNTS BY WAY OF CHEQUES AS WELL AS CASH. THE ASSESSEE HAS FILED IT S REPLY STATING THAT THE CHEQUES AND CASH DEPOSITED INTO TH E BANK ACCOUNT REPRESENT SALE PROCEEDS AND THE CHEQUES DEP OSITED OVER AND ABOVE THE SALE PROCEEDS FOR THE YEAR REPRESENT, ADVANCES RECEIVED FROM THE PARTIES AGAINST SALES, INTER BANK ACCOUNTS TRANSFERS ETC,. IN REPLY TO EARLIER SHOW CAUSE NOT ICES, IT WAS SUBMITTED THAT THE PROVISIONS OF THE SEC. 50C ARE N OT APPLICABLE TO THE ASSESSEES CASE AS THE CONSIDERATION WAS REC EIVED IN CASH MUCH EARLIER TO REGISTRATIONS AND POSSESSION WAS AL READY GIVEN AND THAT THE MARKET VALUE AS ON THE DATE OF REGISTR ATION WAS MUCH HIGHER THAN THE TIME WHEN THE CONSIDERATION WA S RECEIVED 4 ITA NOS. 180,181,182, 115 & 116/HYD/2013 M/S. KARIM NAWAZ ALLADIN. AND POSSESSION WAS GIVEN TO THE BUYERS. HOWEVER, T HE A.O. WAS NOT SATISFIED WITH THE REPLY OF THE ASSESSEE. HE T HEREFORE, COMPLETED THE ASSESSMENT U/S 144 R.W.S. 147 OF THE ACT. 6. AGGRIEVED, THE ASSESSEE FILED APPEALS BEFORE TH E CIT(A) ALONG WITH THE NECESSARY DETAILS. THE CIT(A) GRANT ED PARTIAL RELIEF. AGAINST THE RELIEF GRANTED BY THE CIT(A), THE REVENUE IS IN APPEAL BEFORE US WHILE THE ASSESSEE IS IN APPEA L AGAINST THE CONFIRMATION OF CERTAIN ADDITIONS BY THE CIT(A). 7. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THA T IN THE ASSESSEES APPEAL THE MAIN ISSUE IS THE ADDITION OF AMOUNTS CREDITED INTO THE BANK ACCOUNTS MAINTAINED BY THE A SSESSEE IN VARIOUS BANKS FOR FAILURE OF THE ASSESSEE TO EXPLAI N THE SOURCE OF THE DEPOSITS. HE SUBMITTED THAT DURING THE ASSE SSMENT AS WELL AS APPELLATE PROCEEDINGS, THE CREDIT ENTRIES I N THE BANK ACCOUNTS COULD NOT BE CO-RELATED WITH THE FACTUAL D ATA, BEFORE THE AUTHORITIES BELOW FOR THE REASON THAT THE OFFIC E OF THE AR OF THE ASSESSEE COULD NOT PROPERLY ANALYSE THE DATA AV AILABLE FOR SUBMISSION BEFORE THE LOWER AUTHORITIES. IT IS SUB MITTED THAT THE ASSESSEE HAS SUBSEQUENTLY APPROACHED DIFFERENT AUTHORISED REPRESENTATIVES AND GOT THE MATERIALS SHIFTED AND HAS BEEN ABLE TO FURNISH FURTHER EVIDENCES TO SUBSTANTIATE THE AMOUNT OF CREDITS IN THE BANK ACCOUNTS REMAINING UNEXPLAINED. HE THEREFORE, SUBMITTED THAT THE ADDITIONAL EVIDENCE M AY BE ADMITTED AND REMANDED TO THE FILE OF THE AO FOR VER IFICATION AND ALLOWING THE SAME. 8. THE LD DR HOWEVER, OBJECTED TO THE ADMISSION OF ADDITIONAL EVIDENCE AND SUBMITTED THAT THE ASSES SEE WAS GIVEN SUFFICIENT OPPORTUNITY TO PRODUCE THE SAME BE FORE THE LOWER AUTHORITIES WHICH HAS NOT BEEN AVAILED BY THE ASSESSEE. 5 ITA NOS. 180,181,182, 115 & 116/HYD/2013 M/S. KARIM NAWAZ ALLADIN. 9. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE MATERIAL PLACED ON RECORD, WE FIND THAT THE ASSESSEE HAS NOT BEEN ABLE TO ESTABLISH THE SOURCES OF DEPOSITS BOTH BY THE WAY O F CHEQUES AND CASH IN TO HIS VARIOUS BANK ACCOUNTS BEFORE THE LOWER AUTHORITIES. WE HAVE PERUSED DOCUMENTS FILED BEFOR E US AND WE ARE SATISFIED THAT THIS EVIDENCE NEEDS VERIFICATION BY THE AO. IN VIEW OF THE SAME, ADDITIONAL EVIDENCE FILED BY THE ASSESSEE IS ADMITTED AND THE GROUND NOS. 2, 3 AND 5 OF THE ASSE SSEES APPEAL FOR THE A.Y.2004-05, GROUND NOS. 2 AND 4 FOR THE A.Y. 2005-06 AND GROUND NOS. 2,3 AND 4 FOR THE A.Y. 200 7-08 ARE REMITTED TO THE FILE TO THE A.O FOR DE-NOVO CONSIDE RATION IN ACCORDANCE WITH LAW AFTER GIVING THE ASSESSEE A FAI R OPPORTUNITY OF HEARING. 10. AS REGARDS GROUND NO. 4 IN THE ASSESSMENT YEAR 2004-05 AND GROUND 3 IN THE ASSESSMENT YEAR 2005-06, CONTEN DING THAT THE ADVANCES OF RS. EIGHT LAKHS AND RS. FIVE LAKHS RESPECTIVELY MADE BY THE ASSESSEE WAS OUT OF HIS INCOME, IT IS F AIRLY ADMITTED BY THE LD COUNSEL FOR THE ASSESSEE THAT TH E ASSESSEE HAS NOT BEEN ABLE TO PRODUCE ANY EVIDENCE EITHER BE FORE THE LOWER AUTHORITIES OR BEFORE THE TRIBUNAL IN SUPPOR T OF HIS CLAIM. THEREFORE WE SEE NO REASON TO INTERFERE WIT H THE ORDERS OF THE LOWER AUTHORITIES ON THIS ISSUE AND THESE G ROUNDS ARE ACCORDINGLY REJECTED, 11. IN THE RESULT THE ASSESSEES APPEALS ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. 12. AS REGARDS THE REVENUES APPEALS, THE ONLY GROU ND IS AGAINST THE FINDING OF THE CIT(A) THAT SECTION 50C IS NOT APPLICABLE TO THE SALE TRANSACTION AS EXECUTED BY T HE ASSESSEE AS THE SAME WAS ENTERED INTO PRIOR TO THE INTRODUCT ION OF THE SECTION 50C. IT IS THE CASE OF THE REVENUE THAT TH E ACTUAL POSSESSION OF THE ASSET WAS GIVEN AND THE SALE CON SIDERATION 6 ITA NOS. 180,181,182, 115 & 116/HYD/2013 M/S. KARIM NAWAZ ALLADIN. WAS RECEIVED IN THE YEAR RELEVANT TO A.Y. 2004-05, AND AS SUCH THE A.O WAS CORRECT IN INVOKING THE PROVISIONS OF SECTION 50C OF THE ACT. 13. BRIEF FACTS RELATING TO THIS ISSUE ARE THAT THE ASSESSEE HAS SOLD A PROPERTY VIDE DOCUMENT NO.1102 OF 2003, DATE D 06-05- 2003, AND THE CONSIDERATION AS PER THE REGISTERED S ALE DEED WAS RS. 19,00,000/-. THE A.O. OBSERVED THAT THE MARKET VALUE OF THE PROPERTY FOR THE PURPOSE OF THE STAMP DUTY AS DETER MINED BY THE SUB-REGISTRAR, S.R. NAGAR, WAS RS. 32,41,500/-. HE OBSERVED THAT AS PER THE PROVISIONS OF SECTION 50C OF THE ACT, FOR THE PURPOSES OF DETERMINING LONG TERM CAPITAL G AINS, THE MARKET VALUE OF THE PROPERTY HAS TO BE ADOPTED. TH EREFORE, A SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE AS TO WHY THE PROVISIONS OF SECTION 50C SHOULD NOT BE APPLIED FOR THE PURPOSE OF COMPUTING LONG TIME CAPITAL GAIN. THE ASSESSEE SUBMITTED THAT THOUGH THE SAID DOCUMENT WAS EXECUTED IN THE P REVIOUS YEAR 2003-04, THE CONSIDERATION WAS RECEIVED IN CAS H MUCH EARLIER TO THE REGISTRATION AND POSSESSION ALSO WAS GIVEN. IT WAS SUBMITTED THAT THE MARKET VALUE AS ON THE DATE OF R EGISTRATION WAS MUCH HIGHER THAN THE TIME BY WHICH THE CONSIDER ATION WAS RECEIVED AND POSSESSION WAS GIVEN TO THE BUYER, AND THEREFORE THE PROVISIONS OF SECTION 50C OF THE ACT WERE NOT A PPLICABLE. HOWEVER, A.O. OBSERVED THAT DURING THE PREVIOUS YEA R RELEVANT TO A.Y. 2004-05, ONLY THE ASSESSEE HAS ENTERED IN T O THE SALE AGREEMENT CUM GPA AND RECEIVED THE SALE CONSIDERATI ON AND HAS GIVEN THE POSSESSION AND THE SALE CONSIDERATION AS PER THE REGISTERED DOCUMENTS WAS LESS THAN THE MARKET VALU E OF THE PROPERTY AS PER THE RELEVANT S.R.O. VALUE. THEREFO RE, THE A.O APPLIED THE PROVISIONS OF SECTION 50C OF THE ACT, F OR COMPUTATION OF LONG TERM CAPITAL GAINS. 7 ITA NOS. 180,181,182, 115 & 116/HYD/2013 M/S. KARIM NAWAZ ALLADIN. 14. ON APPEAL, THE CIT(A) HELD THAT PROVISIONS OF S ECTION 50C ARE NOT APPLICABLE TO THE ASSESSEES CASE. AGGRIEV ED, THE REVENUE IS AN APPEAL BEFORE US. 15. HAVING REGARD TO RIVAL CONTENTIONS, WE FIND THA T IT IS THE CASE OF THE ASSESSEE THAT THE ASSESSEE HAS ENTERED INTO AN ORAL AGREEMENT OF SALE AND HAS RECEIVED THE SALE CONSIDE RATION IN CASH PRIOR TO THE DATE OF REGISTRATION. THE CIT(A) HAS TAKEN THE DATES OF AGREEMENT OF SALE AS 03-11-2001 AND 05-01- 2002 RESPECTIVELY, THAT IS PRIOR TO THE INTRODUCTION OF SECTION 50C WITH EFFECT FROM 01-04-2003. HOWEVER, THERE IS NO EVIDENCE FILED BEFORE US IN SUPPORT OF THE ASSESSEES CONTEN TIONS AND THE BASIS ON WHICH THE CIT(A) HAS ACCEPTED THIS CONTENT ION OF THE ASSESSEE IS NOT UNDERSTANDABLE. THOUGH, WE ACCEPT THE ASSESSEES CONTENTIONS THAT WHERE THE SALE CONSIDER ATION IS RECEIVED AND POSSESSION IS GIVEN MUCH PRIOR TO REGI STRATION, THE PROVISIONS OF SEC 50C ARE NOT APPLICABLE, BUT THE B ASIC FACTS SUCH AS THE DATE OF AGREEMENT OF SALE, THE DATE OF RECEIPT OF SALE CONSIDERATION, THE DATE OF HANDING OF OVER POSSESSI ON HAVE TO BE BROUGHT ON RECORD. THE A.O. HAS HELD THAT THE SALE AGREEMENT IS EXECUTED ON 06.05.2003, WHEREAS, CIT(A) HAS HELD THAT THE AGREEMENTS ARE DATED 03-11-2001 AND 05-01-2002 RESP ECTIVELY, BUT NONE OF THE DOCUMENTS OR RELEVANT EVIDENCE TO C OME TO ANY SUCH CONCLUSION ARE ON RECORD. IN VIEW OF THE SAME , WE DEEM IT FIT AND PROPER TO REMAND THE ISSUE TO THE FILE OF T HE A.O. FOR BOTH THE ASSESSMENT YEARS UNDER CONSIDERATION WITH A DIRECTION TO EXAMINE WHETHER THERE IS ANY AGREEMENT OF SALE EITHER WRITTEN OR ORAL AND IF SO, THE DATE OF RECEIPT OF T HE SALE CONSIDERATION AND HANDING OVER THE POSSESSION OF THE PROPERTY. IF IT IS FOUND THAT THE CONSIDERATION HA S BEEN RECEIVED AND ALSO THE POSSESSION HAS BEEN HANDED OVER PRIOR TO 01-04- 2003, THEN CLEARLY THE PROVISIONS OF SECTION 50C AR E NOT 8 ITA NOS. 180,181,182, 115 & 116/HYD/2013 M/S. KARIM NAWAZ ALLADIN. APPLICABLE. THIS ISSUE IS THEREFORE REMANDED TO TH E FILE OF THE A.O. ONLY FOR VERIFICATION OF FACTS. 16. IN THE RESULT, THE APPEALS OF REVENUE ARE TREAT ED AS ALLOWED FOR STATISTICAL PURPOSES. 17. TO SUM UP, ASSESSEES APPEALS ARE PARTLY ALLOW ED FOR STATISTICAL PURPOSES AND APPEALS OF REVENUE ARE AL LOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 30 TH DECEMBER, 2016. SD/- SD/- (B. RAMKOTAIAH) (P. MADHA VI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 30 TH DECEMBER, 2016 KRK COPY TO:- 1) SHRI KARIM NAWAZ ALLADIN, C/O M/S. MAHESH, VIREN DER & SAIRAM, CHARTERED ACCOUNTS, 6-3-788/36 &37A, AMEER PET HYDERABAD 2) ACIT, CIRCLE 6(1); HYDERABAD. 3) CIT(A) IV, HYDERABAD 4) THE CIT-III, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., H YDERABAD. 6) GUARD FILE