ACIT, V. Sri. Padmanabha D,

ITA 1150/BANG/2013

• Counselvise Citation: 115021114 RSA 2013
• Duration Of Justice: 1 year(s) 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-09-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 18-07-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P DINESH
• Assessee Lawyers: SRHI B K
• Keywords: Opportunity of being heard; Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER ITA NO.1150/BANG/2013 ASSESSMENT YEAR : 2008-09 THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 14(1), BANGALORE. VS. SRI PADMANABHAN D., NO.583/1, OLD SYNDICATE BANK ROAD, 1 ST MAIN, 1 ST STAGE, INDIRANAGAR, BANGALORE 560 038. PAN : ABVPP 2739B APPELLANT RESPONDENT APPELLANT BY : SHRI P. DINESH, ADVOCATE RESPONDENT BY : SRHI B.K. PANDA, ADDL. CIT(DR) DATE OF HEARING : 16.09.2014 DATE OF PRONOUNCEMENT : 19.09.2014 O R D E R PER N.V. VASUDEVAN, JUDICIAL MEMBER THIS APPEAL BY THE REVENUE IS AGAINST THE ORDER DATED 30.4.2013 OF THE CIT(APPEALS), LTU, BANGALORE RELATING TO ASSESS MENT YEAR 2008-09. ITA NO.1150/BANG/2013 PAGE 2 OF 6 2. THE ASSESSEE IS AN INDIVIDUAL. DURING THE PREV IOUS YEAR RELEVANT TO .A.Y. 2008-09, THE ASSESSEE SOLD AGRICULTURAL LAND AT SEVAGANAPALLY, HOSUR TALUK, KRISHNAGIRI DISTRICT (HEREINAFTER CALLED AG RICULTURAL LAND. THE ASSESSEE PURCHASED THE AGRICULTURAL LAND ON 20.2.20 00 FROM SHRI RAJAN R. SRINIVASAN FOR A TOTAL CONSIDERATION OF RS.4,95,000 . ON 11.7.2007, THE ASSESSEE SOLD THE AGRICULTURAL LAND TO SHRI D. KANN AN FOR RS.9 LAKHS. IN THE CAPITAL ACCOUNT OF THE ASSESSEE AS APPEARING IN THE BALANCE SHEET AS ON 31.3.2008 FILED ALONG WITH RETURN OF INCOME, THE AD DITION OF RS.1,57,28,000 WAS SHOWN AS ON ACCOUNT OF PROFIT ON SALE OF AGRICU LTURAL LAND. THE AO ON NOTICING THE ABOVE, FURTHER FOUND THAT AS PER THE REGISTERED DOCUMENT, THE AGRICULTURAL LAND WAS SOLD ONLY FOR A SUM OF RS.9 L AKHS WHICH HAD BEEN PURCHASED FOR A CONSIDERATION OF RS.4,95,000 AND TH E NET PROFIT ON SALE OF AGRICULTURAL LAND WAS ONLY RS.4,05,000. SINCE THE ASSESSEE HAD SHOWN AN ACCRETION IN THE CAPITAL ACCOUNT OF RS.1,57,28,000 ON ACCOUNT OF PROFIT ON SALE OF AGRICULTURAL LAND, THE AO CALLED FOR AN EXP LANATION FROM THE ASSESSEE. 3. IN REPLY TO THE QUERY OF THE AO, THE ASSESSEE PO INTED OUT THAT THE ACTUAL SALE CONSIDERATION FOR SALE OF AGRICULTURAL LAND WAS RS.1,64,32,000 AND AFTER CONSIDERING THE COST INDEXATION, THE SUM OF RS.1,57,28,000 WAS ARRIVED AT AS PROFIT ON SALE OF AGRICULTURAL LAND A ND ADDED TO THE CAPITAL ACCOUNT. THE ASSESSEE GAVE CONFIRMATION FROM THE P URCHASERS OF THE AGRICULTURAL LAND AND ALSO THE MODE IN WHICH THE SA LE CONSIDERATION OF ITA NO.1150/BANG/2013 PAGE 3 OF 6 RS.1,64,32,000 WAS PAID, WHICH WAS, ADMITTEDLY, THR OUGH BANKING CHANNELS. 4. WE MAY MENTION HERE THAT THE PROPERTY IN QUESTIO N WAS AN AGRICULTURAL LAND AND THE GAIN ON SALE OF SUCH PROP ERTY WAS OUTSIDE THE PURVIEW OF TAXATION AS CAPITAL GAIN. THE DISPUTE I S ONLY WITH REGARD TO THE ACCRETION TO THE CAPITAL ACCOUNT OF THE ASSESSEE AS APPEARING IN THE BALANCE SHEET. 5. ACCORDING TO THE AO, AS PER THE REGISTERED DOCUM ENT, THE SALE CONSIDERATION PAYABLE TO THE ASSESSEE WAS ONLY RS.9 LAKHS AND THEREFORE HE HELD THAT THE PROFIT ON SALE OF AGRICULTURAL LAN D WAS ONLY RS.4,05,000 AND ONLY TO THIS EXTENT, THE ACCRETION IN THE CAPITAL A CCOUNT CAN BE ACCEPTED. HE THEREFORE HELD THAT THE ACCRETION TO THE CAPITAL ACCOUNT TO THE EXTENT OF RS.1,64,32,000 WAS UNEXPLAINED MONEY U/S. 69A OF TH E ACT. 6. BEFORE THE CIT(APPEALS), IT WAS SUBMITTED THAT T HE AMOUNTS RECEIVED BY THE ASSESSEE FROM THE BUYER WERE AS FOLLOWS:- DATE AMOUNT MODE 24.01.2007 RS.1,00,000 AS ADVANCE RTGS 13.07.2007 RS.64,32,000 AS BALANCE KOTAK BANK CHQ. NO.000441 TOTAL RS.1,64,32,000 IT WAS FURTHER POINTED OUT THAT THE SALE DEED WAS R EGISTERED AT THE GUIDANCE VALUE FOR AGRICULTURAL PROPERTIES FOR RS.9 LAKH AND THE APPLICABLE STAMP DUTY OF RS.72,520 WAS PAID ON THE SAID DECLARED VALUE. O N A LATER DATE I.E., ON ITA NO.1150/BANG/2013 PAGE 4 OF 6 15.04.2013, THE ASSESSEE APPROACHED THE SUB-REGISTR AR, HOSUR AND PAID THE DIFFERENTIAL STAMP DUTY RS.12,46,560 BASED ON T HE STAMP DUTY APPLICABLE FOR THE ACTUAL CONSIDERATION OF RS.1,64, 32,000. ENDORSEMENT WAS ALSO GIVEN TO THIS EFFECT ON THE SALE DEED DATE D 11.07.2007 BY THE REGISTRATION DEPARTMENT, GOVT. OR TAMIL NADU. THE D OCUMENT BEARING THE ENDORSEMENT OF THE SUB-REGISTRAR HOSUR ON 15.4.2013 WAS FILED BEFORE THE CIT(A). THE ASSESSEE ALSO PLACED RELIANCE ON THE D ECISION OF HONBLE ITAT, COCHIN IN THE CASE OF ITO VS. DR. KOSHY GEORGE AND ANR (2009) 317 ITR 116, WHEREIN IT WAS HELD THAT HIGHER SALE PRICE MENTION ED IN THE SALE AGREEMENT WAS TO BE TAKEN INTO ACCOUNT WHEN IT HAD BEEN ROUTED THROUGH THE BANKING CHANNELS INSTEAD OF THE LOWER GUIDANCE VALUE AT WHICH SALE OF PROPERTY WAS REGISTERED. 7. THE CIT(A), ON A CONSIDERATION OF THE ABOVE SUB MISSIONS, WAS OF THE VIEW THAT THE EVIDENCE AND JUDICIAL DECISIONS C ITED BEFORE HIM CLEARLY SUPPORTED THE STAND TAKEN BY THE ASSESSEE. SHE HEL D THAT WITH THE PAYMENT OF THE ADDITIONAL STAMP DUTY, THE CONCOMITA NT SALE CONSIDERATION OF RS.1,64,32,000 GETS LEGAL VALIDITY AS THE CORRECT M ARKET PRICE FOR FIXING SALE CONSIDERATION APART FROM BEING EVIDENCED THROUGH TH E BANKING CHANNELS. THEREFORE, THE CIT(A) HELD THAT THE ADDITION TOWARD S THE UNEXPLAINED MONEY CANNOT BE SUSTAINED. ITA NO.1150/BANG/2013 PAGE 5 OF 6 8. AGGRIEVED BY THE ORDER OF THE CIT(APPEALS), THE REVENUE HAS PREFERRED THE PRESENT APPEAL BEFORE THE TRIBUNAL. THE REVENUE HAS FILED THE FOLLOWING ADDITIONAL GROUND OF APPEAL:- THE CIT(A)-LTU, BANGALORE, BEFORE PASSING ORDER IN THIS CASE, HAS NOT GIVEN THE ASSESSING OFFICER AN OPPORT UNITY OF BEING HEARD BY CALLING REMAND REPORT WHILE ACCEPTING ADDI TIONAL EVIDENCE AS PER THE PROVISIONS OF RULE 46A OF INCOM E TAX RULES, 1962. IT IS HELD IN THE CASE OF CIT VS VALIMOHAMAD AHME DBHAI [1982] 134 ITR 214 (GUJ) THAT THE MERE FACT THAT NO TICE OF HEARING OF THE APPEAL WAS GIVEN TO THE ASSESSING OF FICER WOULD NOT MEET THE REQUIREMENTS OF THIS SUB RULE 46A(3) O F IT RULES, 1962. WHEN A PRAYER FOR ADDITIONAL EVIDENCE WAS MAD E, IT WAS AN INDEPENDENT AND SUBSTANTIVE APPLICATION SEEKING A N EW RIGHT. NOTICE OF SUCH APPLICATION WAS NECESSARY TO THE ASS ESSING OFFICER AND HE OUGHT TO HAVE BEEN OFFERED BOTH AN OPPORTUNI TY TO OPPOSE IT AND TO TEST THE ADDITIONAL EVIDENCE OR COUNTER T HE EFFECT THEREOF OR PRODUCE EVIDENCE IN REBUTTAL. 9. AT THE TIME OF HEARING OF THIS APPEAL, IT WAS NO TICED THAT THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE WAS NOT C ONFRONTED BY THE LD. CIT(A) TO THE AO AND OPPORTUNITY TO EXAMINE THE ADD ITIONAL EVIDENCE WAS NOT GIVEN TO THE AO. IN THESE CIRCUMSTANCES, WE AR E OF THE VIEW THAT THE ADDITIONAL GROUND FILED BY THE REVENUE DESERVES TO BE ACCEPTED. WE ARE, THEREFORE, OF THE VIEW THAT THE ORDER OF CIT(A) SHO ULD BE SET ASIDE AND THE ISSUE SHOULD BE REMANDED TO THE LD. CIT(A) FOR FRES H CONSIDERATION. THE LD. CIT(A) WILL CONFRONT THE AO WITH THE ADDITIONAL EVI DENCE FILED BY THE ASSESSEE BEFORE HIM AND OBTAIN A REMAND REPORT FROM THE AO. THE LD. CIT(A) WILL THEREAFTER AFFORD OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH THE LAW. ITA NO.1150/BANG/2013 PAGE 6 OF 6 10. FOR STATISTICAL PURPOSES, THE APPEAL OF THE REV ENUE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS 19 TH DAY OF SEPTEMBER , 2014 . SD/- SD/- ( ABRAHAM P. GEORGE ) ( N.V. VASUDEVA N ) ACCOUNTANT MEMBER JUDICIAL MEM BER BANGALORE, DATED, THE 19 TH SEPTEMBER , 2014 . /D S/ COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR / SENIOR PRIVATE SECRETARY ITAT, BANGALORE.