M/s. C.M. Promoters Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 1171/DEL/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4044 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 03-05-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 04-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y KAKKAR
• Assessee Lawyers: JITENDER GARG
• Keywords: Unexplained investment
• Section: 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B DELHI BEFORE SHRI C.L. SETHI AND SHRI K.G. BANSAL ITA NO. 1171(DEL)/2011 ASSESSMENT YEAR: 2006-07 M/S C.M. PROMOTERS PVT. INCOME-TAX OFFICER, LTD., 202/47, THAPER ARCADE, VS. WARD 3(2), C.R. BUILDING, KALU SARAI, HAUZ KHAS, NEW DELHI. NEW DELHI-16 PAN:-AACCC7226P (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI JITENDER GARG, C.A. RESPONDENT BY : MS. Y. KAKKAR, SR. DR ORDER PER K.G. BANSAL : AM THE ASSESSEE-COMPANY HAS TAKEN THREE SUBSTANTI VE GROUNDS IN THE APPEAL, THE SUM AND SUBSTANCE OF WHICH IS THAT THE LD. CIT(APPEALS) ERRED IN SUSTAINING THE ADDITION OF RS. 3,82,500/-, MADE BY THE AO IN RESPECT OF UNEXPLAINED INVESTMENT BY INVOKING THE PROVI SION CONTAINED IN SECTION 69 OF THE INCOME-TAX ACT, 1961 (THE ACT). ITA NO. 1171(DEL)/2011 2 2. THE FACTS OF THE CASE ARE THAT THE ASSES SEE PURCHASED TWO PLOTS OF LAND FROM ONE SHRI RAM SWAROOP. THE DETAILS IN RESPECT OF THESE PURCHASES ARE AS UNDER:- S.NO. SELLER PURCHASE PRICE (RS.) STAMP DUTY (RS.) TOTAL COST (RS.) CIRCLE RATE (RS) COST AS SHOWN IN BALANCE SHEET (RS.) DIFF. (RS.) 1. RAM SWAROOP 18,97,100 1,91,000 20,88,100 19,10,000 18,97,100 1,91,000 2. RAM SWAROOP 19,10,000 1,91,500 21,01,500 19,10,000 19,10,000 1,91,500 41,89,600 38,07,100 3,82,500 DIFFERENCE BETWEEN TOTAL COST AND COST AS SHOWN IN BALANCE SHEET 3,82,500 2.1 THE FINDINGS OF THE AO ARE THAT ORDINARILY THE STAMP DUTY EXPENDITURE IS BORNE BY THE PURCHASER. HOWEVER, IN THIS CASE IT IS CLAIMED THAT SUCH DUTY HAS BEEN PAID BY THE SELLER. TH E ASSESSEE WAS REQUIRED TO PRODUCE SHRI RAM SWAROOP FOR VERIFICATION OF THE FACT. HOWEVER, THE ASSESSEE COULD NOT DO SO. THEREFORE, IT WAS HELD THAT STAMP DUTY HAS BEEN PAID BY THE ASSESSEE. SINCE THE ASSESSEE WAS N OT ABLE TO EXPLAIN THE SOURCE OF THE PAYMENT, AN AMOUNT OF RS. 3,82,500/ - WAS ADDED TO THE TOTAL INCOME RETURNED BY IT. ITA NO. 1171(DEL)/2011 3 2.2 IN APPELLATE PROCEEDINGS BEFORE THE LD. CIT(AP PEALS), IT WAS REITERATED THAT THE STAMP DUTY AMOUNTING TO RS. 3 ,82,500/- (RS. 1,91,500/- PLUS RS. 1,91,000/-) WAS PAID BY THE SELLER. THIS STANDS PROVED BY THE NARRATION IN THE SALE DEED THAT THE EXPENDITUR E OF SALE DEED HAS BEEN BORNE BY THE SELLER. HOWEVER, HE DID NOT AGREE W ITH THIS CONTENTION BECAUSE THE NARRATION AS ABOVE DOES NOT VINDICATE THE STAND OF THE ASSESSEE, MORE PARTICULARLY IN ABSENCE OF ANY SPECIFIC A GREEMENT U/S 29 OF THE INDIAN STAMP ACT. THEREFORE, HE REJECTED THE CO NTENTION OF THE ASSESSEE WITH THE FOLLOWING REMARKS:- 4. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF LD. AR AND HAVE GONE THROUGH THE ASSESSMENT ORDER. IT I S AN ADMITTED FACT THAT THE ASSESSEE HAS PURCHASED TW O PIECES OF LAND FOR A SUM OF RS. 19,10,000/- AND RS. 18,97,1 00/-, WHEREAS THE CIRCLE RATE FOR THE PURPOSE OF STAMP DUTY WAS CALCULATED AT RS. 19,10,000/- EACH. THUS, THE PURCHASE PRICE OF ONE PROPERTY IS NO DOUBT LOWER THAN THE CIRCLE RATE. FURTHE R, THE APPELLANTS CONTENTION IS THAT THE STAMP DUTY O F RS. 1,91,500/- AND RS. 1,91,100/- WAS PAID BY THE SELLER OF AG RICULTURAL LAND. IN THIS REGARD, REFERENCE NEEDS TO BE MADE TO SEC TION 29 OF INDIAN STAMP ACT WHEREIN IT IS PRESCRIBED THAT IN THE ABSENCE OF AN AGREEMENT TO THE CONTRARY, THE EXPENSE OF PROVIDING THE PROPER STAMPS SHALL BE BORNE IN THE CASE OF A CERTIFICATE OF SALE, BY THE PURCHASER OF THE PROPERTY TO WHICH SU CH CERTIFICATE RELATES. IN THE PRESENT CASE, THE SALE DEED MER ELY MENTIONS THAT THE EXPENDITURE OF THE SALE DEED HAS BEEN BORNE BY THE SELLER. HOWEVER, THE APPELLANTS CONTENTION IS NOT SUPPORTED BY ANY SPECIFIC AGREEMENT IN TERMS OF SECTION 2 9 OF INDIAN STAMP ACT. I FURTHER FIND FROM THE ASSESSMENT ORDER THAT T HE APPELLANT WAS ASKED TO PRODUCE THE SELLER OF THE SAID AGRICU LTURAL LAND. ITA NO. 1171(DEL)/2011 4 HOWEVER, IT IS NOT THE CASE OF THE APPELLANT THAT THE SELLER APPEARED BEFORE THE ASSESSING OFFICER AND THE TRANSACTION WAS DULY VERIFIED. IN SUCH CIRCUMSTANCES, I FIND THAT THE ASSESSING OFFICER WAS JUSTIFIED IN CONCLUDING THAT THE APPELLANT HAS M ADE AN EXTRA INVESTMENT OF RS. 3,82,500/- I.E., THE DIFFERENCE BETWEEN THE TOTAL COST OF THE LAND AND THE COST AS SHOWN IN THE BALANCE- SHEET. 3. THE STAND OF THE RIVAL PARTIES BEFORE US IS TH E SAME AS TAKEN BEFORE THE LOWER AUTHORITIES. THE LD. COUNSEL FOR THE ASSESSEE RELIED ON THE NARRATION IN THE SALE DEED, WHILE THE LD. DR SU BMITTED THAT THE NARRATION IS NOT CLEAR AND THE ASSESSEE HAS NOT PRODUCED THE SELLER BEFORE THE AO FOR EXAMINATION. IN THE REJOINDER, THE CASE OF THE LD. COUNSEL IS THAT HE IS NOT IN A POSITION TO PRODUCE THE SELLER AND, THEREFORE , HE HAD REQUESTED THE AO TO ISSUE SUMMONS TO THE SELLER, WHICH WAS NOT DO NE. 4. WE HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSIONS MADE BEFORE US. WE FIND THAT THE FACTS HAVE NOT BEE N FULLY VERIFIED BY ANY OF THE LOWER AUTHORITIES. WHILE ONE OF THE DEEDS MENTIONS VARIOUS DETAILS ON BACK SIDE OF PAGE NO. 37(2) OF THE PAPER BOOK, THE OTHER DEED AT PAGE NO. 48 DOES NOT CONTAIN SUCH DETAILS. THE NARRAT ION IN THE SALE DEED IS SOMEWHAT VAGUE, WHICH REQUIRES FURTHER VERIFICA TION BY EXAMINATION OF SHRI RAM SWAROOP, THE SELLER. THEREFORE, IT IS I N THE FITNESS OF SITUATION ITA NO. 1171(DEL)/2011 5 THAT THE MATTER IS RESTORED TO THE FILE OF THE AO WITH A DIRECTION TO ENFORCE THE ATTENDANCE OF SHRI RAM SWAROOP SO THAT THE R EAL FACTS ARE BROUGHT ON RECORD. THEREAFTER, HE MAY MAKE ASSESSMENT AS PE R LAW. 5. IN THE RESULT, THE APPEAL IS TREATED AS ALLOW ED FOR STATISTICAL PURPOSES. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT ON 6 MAY, 2011. SD/- SD/- (C.L. SETHI) (K.G. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE OF ORDER: 6TH MAY, 2011. SP SATIA COPY OF THE ORDER FORWARDED TO:- M/S C.M. PROMOTERS PVT. LTD., NEW DELHI. ITO, WARD 3(2), NEW DELHI. CIT CIT(A) THE DR, ITAT, NEW DELHI. ASSISTANT REGISTRAR .