SHRI SOHAN LAL MALIK, JAIPUR V. ITO, WARD-1(1), JAIPUR

ITA 1189/JPR/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 9410 (ITAT-JAIPUR)
• Duration Of Justice: 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-08-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 11-10-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Cost of acquisition; Valuation report; Capital Gains
• Section: 147

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENC HES A JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRA M SINGH YADAV, AM VK;DJ VIHY LA- @ ITA NO. 1189/JP/2019 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR :2011-12 SH. SOHAN LAL MALIK, 377 GURUNANAK PURA, RAJA PARK, JAIPUR CUKE VS. ITO, WARD-1(1), JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: BIIPM9228D VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : NONE JKTLO DH VKSJ LS @ REVENUE BY : MS. CHANCHAL MEENA (ADDL. CIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 18/08/2020 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 18/08/2020 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A)-1, JAIPUR DATED 01.08.2019. 2. NONE HAS APPEARED ON BEHALF OF THE ASSESSEE, HOW EVER, AN ADJOURNMENT APPLICATION HAS BEEN FILED SIGNED BY SHRI SAURAV HA RSH, COUNSEL FOR THE ASSESSEE STATING THAT THEY ARE SEEKING INSTRUCTION FROM THE ASSESSEE TO OPT FOR VIVAD SE VISHWAS SCHEME 2020 AND THE MATTER MAY BE ADJOURNED. 3. WE FIND THAT SIMILAR REQUEST WAS MADE BY THE COU NSEL FOR THE ASSESSEE WHEN THE MATTER WAS LAST LISTED ON 20.02.2020 AND N OTHING HAS BEEN BROUGHT ON RECORD TILL DATE THAT THE ASSESSEE HAS DECIDED O R HAS ACTUALLY MOVED ANY SUCH PETITION FOR SETTLEMENT OF TAX DISPUTE BEFORE THE APPROPRIATE AUTHORITY. ITA NO. 1189/JP/2019 SH. SOHAN LAL MALIK, JAIPUR VS. ITO, JAIPUR 2 FURTHER, THE PRESENT APPEAL WAS FILED WAY BACK IN O CTOBER, 2019 AND THE MATTER HAS BEEN ADJOURNED FROM TIME TO TIME. IT WAS ACCORDINGLY DECIDED THAT NO USEFUL PURPOSE WOULD BE SERVED IN ADJOURNING THE MATTER ANY FURTHER. HENCE, IT WAS DECIDED TO HEAR THE APPEAL EX-PARTE QUA THE ASSESSEE AND BASED ON MATERIAL AVAILABLE ON RECORD. 4. THE LIMITED ISSUE RAISED BY THE ASSESSEE IN THE PRESENT APPEAL IS DENIAL OF COST OF IMPROVEMENT AMOUNTING TO RS. 6,67,202/- CLA IMED TO HAVE BEEN INCURRED IN FINANCIAL YEAR 1997-1998 WHILE COMPUTIN G THE LONG TERM CAPITAL GAINS. 5. IN THIS CASE, THE ASSESSMENT WAS COMPLETED U/S 1 43(3) READ WITH SECTION 147 WHEREIN LONG TERM CAPITAL GAINS HAVE BEEN BROUG HT TO TAX BY THE ASSESSING OFFICER. HOWEVER, WHILE COMPUTING THE LONG TERM CAP ITAL GAINS, COST OF IMPROVEMENT AMOUNTING TO RS. 5,69,828/- AS CLAIMED BY THE ASSESSEE WAS DENIED BY THE ASSESSING OFFICER IN ABSENCE OF DOCUM ENTARY EVIDENCES IN SUPPORT OF SUCH COST OF IMPROVEMENT. FURTHER, THE ASSESSING OFFICER HAS HELD THAT THE PROPERTY WAS SOLD WITHOUT ANY CONSTRUCTION AS PER SALE DEED. 6. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTE R IN APPEAL BEFORE THE LD. CIT(A) AND RELEVANT SUBMISSIONS OF THE ASSESSEE BEF ORE THE LD CIT(A) READ AS UNDER:- 2.4 IT IS RELEVANT TO MENTION HERE THAT BEFORE SEL LING THE PROPERTY, THE FATHER OF THE ASSESSEE APPELLANT HAD CONSTRUCTED TH E BUILDING IN THE YEAR 1981-82 AND 1997-98 WHICH CAN BE SEEN FROM THE MAP OF CONSTRUCTED PROPERTY. 2.5 THAT EVEN THE REGISTERED SALE DEED OF THE INHER ITED PROPERTY IS EVIDENT OF EXISTING BUILDING AT THE TIME OF SELLING OF PROPERTY. PARA 4 OF ITA NO. 1189/JP/2019 SH. SOHAN LAL MALIK, JAIPUR VS. ITO, JAIPUR 3 THE REGISTERED SALE DEED IS CLEAR EVIDENCE OF EXIST ENCE OF RESIDENTIAL BUILDING, BOUNDARY WALL, ELECTRICITY AND WATER FITT INGS WHICH WAS CONSTRUCTED BY THE FATHER OF THE ASSESSEE APPELLANT . 2.6 THAT ONLY AT THE DESIRE OF PURCHASER, ASSESSEE APPELLANT DECONSTRUCT THE PROPERTY AT THE TIME OF SELLING OF PROPERTY AND EVEN IN THE SALE DEED THE URDU WORD TAAMIRAAT IS USED WHI CH MEANS CONSTRUCTION. 7. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE HAS ALLOWED COST OF IMPROVEMENT TO THE EXTENT OF RS. 38 ,860/- AS ON 01.04.1981 AND THE RELEVANT FINDINGS OF THE LD. CIT(A) READS A S UNDER:- (IV) I HAVE DULY CONSIDERED THE SUBMISSIONS OF THE APPELLANT, ASSESSMENT ORDER AND THE MATERIAL PLACED ON RECORD. FROM THE VALUATION REPORTS SUBMITTED BY THE APPELLANT, IT IS SEEN THAT IN THE FIRST VALUATION REPORT, THE VALUE OF THE PROPERTY HAS BEEN DETERMIN ED AS ON 01.04.1981 IN TWO PARTS. LAND VALUE RS. 2,77,754/- CONSTRUCTION COST RS. 38,860/- TOTAL RS. 3,16,614/- THE SECOND VALUATION REPORT IS REGARDING COST OF CO NSTRUCTION DURING 1997-98, WHICH HAS BEEN VALUED AT RS. 6,67,202/-. (V) THE AO ALLOWED THE 1/3 RD SHARE IN COST OF ACQUISITION IN LAND AMOUNTING TO RS. 92,584/- (RS. 2,77,753/3) HOWEVER, NO BENEFIT REGARDING COST OF CONSTRUCTION WAS ALLOWED. FROM TH E SALE DEED FILED, IT IS SEEN THAT IT HAS BEEN MENTIONED THAT SOME CONSTRUCT ION HAS BEEN DONE ON THE ABOVE PLOT OF LAND. THE RELEVANT PARA OF THE DEED READS AS UNDER:- ITA NO. 1189/JP/2019 SH. SOHAN LAL MALIK, JAIPUR VS. ITO, JAIPUR 4 MIJKSDR LEIW.KZ DOKVZJ UECJ 142 IZFKE I{K DS FIRKTH JH BKDQJNKL EFYD IQ+= JH EUHJKE EFYD FUOKLH T;IQJ DS UKE NH T;IQJ IQ:'KKFKHZ DKS&VKWIJSFVO GKMFLAX LKSLK ;VH FYFEVSM] T;IQJ LS VYKV GQVK FTLDK VKOAVU I= EK AD 1141 FNUKAD 06 FLRECJ LU~ 1981 BZLOH DKS NH T;IQJ I Q:'KKFKHZ DKS&VKSIJSFVO GKMFLAX LKSLK;VH FYFEVSM LS JH BKDQJNKL EFYD US MDR DOKVZJ DH HKWFE IJ EDKUKR O CK M.MHOKY BR;KFN RKEHJ DJOKDJ FCTYH IKUH DS FAQFVAXL DJKDJ DUSDKUL IZKIR DJ FY;S] MDR DOKZVJ DH [KJHN O RKEHJKR BR;KFN ESA JH BKDQJNKL EFYD DK LO;A DK :I;K YXK GSA (VI) THUS, THE ABOVE PARA SPEAKS ABOUT CONSTRUCTION DONE BY FATHER OF THE APPELLANT BEFORE 1981 AND NO DETAIL HAS BEEN ME NTIONED REGARDING CONSTRUCTION DONE AFTER 1981. HAD THERE BEEN ANY CO NSTRUCTION POST 1981, THE SAME SHOULD HAVE ALSO BEEN MENTIONED IN T HE DEED AS THE CONSTRUCTION PRIOR TO 1981 HAS BEEN MENTIONED. THER EFORE, THE CONTENTION OF THE APPELLANT THAT SOME CONSTRUCTION WAS DONE IN 1997-98 HAS GOT NO MERIT. FURTHER, THE APPELLANT HAS NOT SU BMITTED ANY SOURCE FOR SO CALLED CONSTRUCTION CLAIMED IN 1997-98. IN VIEW OF THIS, THE AO WAS JUSTIFIED IN DENYING THE COST OF IMPROVEMENT CLAIME D FOR 1997-98. HOWEVER, BASED ON THE DETAILS MENTIONED IN THE SALE DEED THE APPELLANT IS ENTITLED FOR THE COST OF CONSTRUCTION PRIOR TO 1 981. ONCE THE AO HAS ACCEPTED THE COST OF LAND BASED ON FIRST VALUATION REPORT, THE COST OF CONSTRUCTION PRIOR TO 1981 CAN ALSO BE ACCEPTED BAS ED ON THE ABOVE REPORT. THEREFORE, THE AO IS DIRECTED TO CONSIDER C OST OF IMPROVEMENT AT RS. 38,860/- AS ON 01.04.1981 AND RECOMPUTE THE CAP ITAL GAIN ACCORDINGLY. 8. HAVING HEARING THE LD DR WHO HAS RELIED ON THE F INDING OF THE LOWER AUTHORITIES AND PURUSING THE MATERIAL AVAILABLE ON RECORD, WE FIND THAT THE LD CIT(A) HAS AGREED WITH THE CONTENTION OF THE ASSESS EE AND HAS RETURNED A FINDING THAT THE CONSTRUCTION WAS INDEED CARRIED OU T ON THE PLOT OF LAND. HOWEVER, THE CONTENTION OF THE ASSESSEE THAT SUCH C ONSTRUCTION WAS CARRIED OUT INITIALLY IN YEAR 1981-82 AND THEREAFTER, AGAIN IN YEAR 1997-98 HAS BEEN ACCEPTED PARTIALLY. AS PER LD CIT(A), A READING OF THE SALE DEED (RELEVANT PARA ITA NO. 1189/JP/2019 SH. SOHAN LAL MALIK, JAIPUR VS. ITO, JAIPUR 5 AS REPRODUCED IN PARA (V) OF HIS ORDER), IT TALKS A BOUT CONSTRUCTION CARRIED OUT BY THE FATHER OF THE ASSESSEE BEFORE 1981 AND NO DE TAIL HAS BEEN MENTIONED REGARDING ANY CONSTRUCTION POST 1981 AND BASIS SUCH OBSERVATION, THE LD CIT(A) HAS DIRECTED THE AO TO CONSIDER COST OF IMPROVEMENT AT RS 38,860/- AS ON 1.4.1981 AND CONTENTION OF THE ASSESSEE REGARDING S UBSEQUENT CONSTRUCTION CARRIED OUT IN YEAR 1997-98 WAS NOT FOUND ACCEPTABL E EVEN THOUGH THE ASSESSEE HAS SUBMITTED A VALUATION REPORT IN SUPPOR T THEREOF. TO OUR MIND, SUCH FINDING IS NOT BORNE OUT OF THE READING OF THE AFORESAID PARA SO QUOTED BY THE LD CIT(A). IN ABSENCE OF COPY OF THE SALE DEED ON RECORD, WE DONOT HAVE THE LIBERTY OF EXAMINING THE WHOLE OF THE CONTENTS OF SALE DEED, HOWEVER, ON READING OF THE PARA OF THE SALE DEED SO REFERRED BY THE LD CIT(A), WE FIND THAT REFERENCE TO 1981 IS IN THE CONTEXT OF ALLOTMENT LE TTER OBTAINED BY THE FATHER OF THE ASSESSEE ON 6.09.1981 FROM THE CO-OPERATIVE SOC IETY AND NOT TO THE YEAR OF CONSTRUCTION ON THE PLOT OF LAND SO ALLOTTED TO THE FATHER OF THE ASSESSEE. THEREFORE, WE BELIEVE THAT THE MATTER NEEDS TO BE E XAMINED A FRESH AFTER TAKING INTO CONSIDERATION THE CONTENTS OF THE SALE DEED AND THE VALUATION REPORT AND IS ACCORDINGLY SET-ASIDE TO THE FILE OF THE LD CIT(A) TO DECIDE THE SAME AFRESH AFTER PROVIDING REASONABLE OPPORTUNITY TO TH E ASSESSEE. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FO R STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 18/08/2020. SD/- SD/- FOT; IKY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 18/08/2020 * GANESH KR. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SH. SOHAN LAL MALIK, JAIPUR ITA NO. 1189/JP/2019 SH. SOHAN LAL MALIK, JAIPUR VS. ITO, JAIPUR 6 2. IZR;FKHZ@ THE RESPONDENT- ITO, WARD-1(1), JAIPUR 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 1189/JP/2019} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR