THE ITO WARD - 1(2), Visakhapatnam V. Sri Vijayam Appa Rao, Visakhapatnam

ITA 122/VIZ/2014

• Counselvise Citation: [2016] 130 COUNSELVISE.COM (IT) 9674 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 17-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

ITA NO.122/VIZAG/2014 & CO 28/VIZAG/2016 SRI VIJAYAM APPARAO, VISAKHAPATNAM 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . , $ BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./I.T.A.NO.122/VIZAG/2014 ( / ASSESSMENT YEAR: 2008-09) ITO, WARD - 1(2), VISAKHAPATNAM VS. SRI VIJAYAM APPARAO, VISAKHAPATNAM [PAN: A BX[V2391K ] ( % / APPELLANT) ( &'% / RESPONDENT) C.O. NO.28/VIZAG/2016 (ARISING OUT OF I.T.A.NO.122/VIZAG/2014) ( / ASSESSMENT YEAR: 2008-09) SRI VIJAYAM APPARAO, VISAKHAPATNAM VS. ITO, WARD - 1(2), VISAKHAPATNAM ( % / APPELLANT) ( &'% / RESPONDENT) / APPELLANT BY : SHRI M.N. MURTHY NAIK, DR / RESPONDENT BY : SHRI G.V.N. HA RI, AR / DATE OF HEARING : 27.10.2016 / DATE OF PRONOUNCEMENT : 28.11.2016 ITA NO.122/VIZAG/2014 & CO 28/VIZAG/2016 SRI VIJAYAM APPARAO, VISAKHAPATNAM 2 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: THIS APPEAL FILED BY REVENUE IS DIRECTED AGAINST O RDER OF THE CIT(A), VISAKHAPATNAM DATED 4.2.2014 FOR THE ASSESS MENT YEAR 2008-09 AND THE CROSS OBJECTION FILED BY THE ASSESSEE IS IN SUPPORT OF THE ORDER OF CIT(A). 2. FACTS ARE IN BRIEF THAT THE ASSESSEE IS AN INDIV IDUAL, FILED HIS RETURN OF INCOME BY DECLARING TOTAL INCOME OF ` 20,76,790/- INCLUDING CAPITAL GAINS. SUBSEQUENTLY, THERE IS A SEARCH OPERATION C ARRIED OUT IN THE CASE OF THIRD PARTY AND THE DEPARTMENT HAS SEIZED A DOCU MENT NAMELY, COPY OF A SALE AGREEMENT DATED 30.3.2007 ENTERED BETWEEN ASSESSEE SRI VIJAYAM APPARAO AND ONE MADDI JAGAN MOHAN IN RESPEC T OF SUBJECT PROPERTY, WHEREIN THE SALE CONSIDERATION AGREED WAS ` 1.3 CRORES. AS PER THE CLAUSE IN THE AGREEMENT, AN AMOUNT OF ` 40 LAKHS WAS PAID AS ADVANCE TO THE ASSESSEE BY CASH. WHEN THE A.O. HAS ASKED THE ASSESSEE, IT WAS SUBMITTED ON 17.12.2007 THAT HE HA D RECEIVED ONLY ` 80 LAKHS AS PER THE AGREEMENT TO SELL WITH GENERAL POW ER OF ATTORNEY DATED 9.5.2007, ENTERED BETWEEN ASSESSEE AND SMT. MADDI P RAVEENA. APART FROM THAT HE HAS NOT RECEIVED ANY ADDITIONAL AMOUNT . HOWEVER, A.O. IS NOT AGREED WITH THE SUBMISSIONS MADE BY THE ASSESSE E. ACCORDINGLY, HE ITA NO.122/VIZAG/2014 & CO 28/VIZAG/2016 SRI VIJAYAM APPARAO, VISAKHAPATNAM 3 MADE AN ADDITION BY CONSIDERING THE SALE AGREEMENT DATED 30.3.2007 AND CALCULATED THE CAPITAL GAINS. 3. ON BEING AGGRIEVED, ASSESSEE CARRIED MATTER IN A PPEAL BEFORE THE LD. CIT(A). IT WAS SUBMITTED BEFORE THE LD. CIT(A) THAT THE ASSESSEE HAS SOLD THE PROPERTY THROUGH GPA DATED 9.5.2007 TO SMT. MADDI PRAVEENA FOR A SALE CONSIDERATION OF ` 80 LAKHS AND OTHER THAN THAT NO AMOUNT WAS RECEIVED. HE ALSO FILED AN AFFIDAVIT BE FORE THE LD. CIT(A) THAT HE HAS NOT RECEIVED ANY AMOUNT OTHER THAN THE SALE CONSIDERATION OF ` 80 LAKHS. THE ASSESSEE HAS ALSO PRODUCED SMT. M. PRAVEENA AND SRI M. JAGAN MOHAN AND THEY SUBMITTED THAT THEY HAV E NOT PAID ANY AMOUNT MORE THAN ` 80 LAKHS. THE LD. CIT(A) AFTER CONSIDERING THE EXPLANATION OF THE ASSESSEE, HE HAS HELD THAT THE A DDITION MADE BY THE A.O. IS WITHOUT ANY EVIDENCE AND THEREFORE DIRECTED THE A.O. TO DELETE THE ADDITION. 4. ON BEING AGGRIEVED, REVENUE CARRIED MATTER IN AP PEAL BEFORE THE TRIBUNAL. 5. THE LD. D.R. HAS SUBMITTED THAT THERE ARE TWO AG REEMENTS, ONE IS SALE AGREEMENT AND ANOTHER IS GPA. AS PER THE GPA, THE SALE CONSIDERATION IS ` 80 LAKHS BUT AS PER THE SALE AGREEMENT, THE SALE CONSIDERATION IS ` 1.3 CRORES AND SUBMITTED THAT THE SALE AGREEMENT ITA NO.122/VIZAG/2014 & CO 28/VIZAG/2016 SRI VIJAYAM APPARAO, VISAKHAPATNAM 4 ENTERED BY THE ASSESSEE HAS TO BE CONSIDERED FOR TH E PURPOSE OF CALCULATION OF CAPITAL GAINS. HE STRONGLY SUPPORTE D THE ORDER PASSED BY THE A.O. 6. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSES SEE HAS SUBMITTED THAT THE ASSESSEE HAD ENTERED INTO AN AGREEMENT WIT H SMT. M. PRAVEENA FOR A SALE CONSIDERATION OF ` 80 LAKHS DATED 9.5.2007. ACCORDINGLY, THE SALE WAS CONCLUDED. THE DOCUMENT FOUND DURING THE COURSE OF SEARCH IN THE HANDS OF THE THIRD PARTY, WHICH IS NOT AN AUTHE NTICATED DOCUMENT FOR THE REASON THAT IT IS CREATED BY SH. M. JAGAN MOHAN FOR HIS PERSONAL BENEFIT AND THEREFORE, BASED ON THE UNREGISTERED DO CUMENT, THE VALUE OF THE PROPERTY CANNOT BE CONSIDERED. HE STRONGLY SUP PORTED THE ORDER PASSED BY THE LD. CIT(A). 7. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATER IALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. THE ASSESSEE HAD PURCHASED A PLOT OF LAND ADMEASURING 2 84.70 SQ.YDS. FROM URBAN DEVELOPMENT AUTHORITY OF VISAKHAPATNAM FOR A SALE CONSIDERATION OF ` 6,28,800/- ON 2.11.1995. THEREAFTER, HE HAS CONST RUCTED A MULTI STORIED BUILDING IN THE 1 ST , 2 ND & 3 RD FLOORS IN THAT PLOT. THE PROPERTY WAS SOLD TO SMT. M. PRAVEENA, WIFE OF SHRI M. JAGAN MOH AN ON 9.5.2007 THROUGH A SALE AGREEMENT-CUM-GPA FOR A SALE CONSIDE RATION OF ` 80 ITA NO.122/VIZAG/2014 & CO 28/VIZAG/2016 SRI VIJAYAM APPARAO, VISAKHAPATNAM 5 LAKHS. SUBSEQUENTLY, A SEARCH HAS TAKEN PLACE IN T HE CASE OF THIRD PARTY AND IN THE COURSE OF SEARCH, THEY FOUND A DOCUMENT I.E. SALE AGREEMENT ENTERED BETWEEN ASSESSEE AND SRI M. JAGAN MOHAN DAT ED 30.3.2007. AS PER THE ABOVE DOCUMENT, THE SALE CONSIDERATION OF T HE PROPERTY IS OF ` 1.3 CRORES, OUT OF WHICH ` 40 LAKHS ADVANCE WAS ALREADY PAID. WHEN THE VERY SAME FACT WAS BROUGHT TO THE NOTICE OF THE ASS ESSEE, IT WAS SUBMITTED BEFORE THE A.O. THAT HE HAS ONLY AGREED F OR SALE-CUM-GPA IN FAVOUR OF SMT. M. PRAVEENA FOR A TOTAL SALE CONSIDE RATION OF ` 80 LAKHS AND SUBMITTED THAT HE HAS NOT RECEIVED ANY AMOUNT O VER AND ABOVE THE SALE CONSIDERATION. ASSESSEE ALSO FILED AN AFFIDAV IT BEFORE THE A.O. TO SUBSTANTIATE HIS CASE. THE VENDOR SMT. M. PRAVEENA ALSO STATED IN THE SWORN STATEMENT DEPOSITION DATED 17.12.2007 THAT TH E SAID ADVANCE OF ` 40 LAKHS WAS NOT PAID. IN THIS CASE, THE ASSESSEE HAS DENIED THE ADVANCE OF ` 40 LAKHS TO BE RECEIVED AND THE VENDOR ALSO FILED AN AFFIDAVIT TO THIS EFFECT THAT NO ADVANCE WAS PAID. UNDER THESE FACTS AND CIRCUMSTANCES OF THIS CASE, WHEN THERE A REGISTERED DOCUMENT IS AVAILABLE ON RECORD, WHICH IS ATTESTED BY SUB-REGIS TRAR OF REGISTRATION AND STAMPS, AUTHORITY UNDER THE REGISTRATION AND STAMPS ACT, IT HAS TO BE CONSIDERED AS AN AUTHENTICATED DOCUMENT. IF THE A. O. WANT TO DEVOID FROM THE REGISTERED DOCUMENT, THERE SHOULD BE A CON CRETE EVIDENCE TO SUBSTANTIATE HIS CASE. IN THIS CASE, THE ASSESSEE DENIED RECEIPT OF THE ITA NO.122/VIZAG/2014 & CO 28/VIZAG/2016 SRI VIJAYAM APPARAO, VISAKHAPATNAM 6 ADVANCE AND THE VENDOR ALSO SUBMITTED THAT NO ADVAN CE WAS PAID. UNDER THESE FACTS AND CIRCUMSTANCES OF THE CASE, TH E AGREEMENT OF SALE ENTERED BY ASSESSEE AND VENDORS HUSBAND I.E. SRI J AGAN MOHAN CANNOT BE CONSIDERED AS A BASIS FOR ADDITION MADE BY THE A .O. THE LD. CIT(A) AFTER CONSIDERING ENTIRE FACTS AND CIRCUMSTANCES OF THE CASE HAS DELETED THE ADDITION MADE BY THE A.O. THE RELEVANT PORTION OF THE ORDER IS EXTRACTED AS UNDER: 5.9 I HAVE CONSIDERED THE VARIOUS DETAILS AND SUBMIS SIONS MADE. I HAVE ALSO INQUIRED THE ASSESSEE WHO APPEARED BEFORE ME D URING THE APPELLATE PROCEEDINGS. I AM INCLINED TO BELIEVE THAT THE SALE AGREEMENT DTD.30.03.2007 WAS NOT A GENUINE ONE EXECUTED BY TH E ASSESSEE. THE ASSESSEE AND HIS WIFE HAS FILED AFFIDAVITS IN THIS REGARD. BESIDES, IT IS SEEN THAT THE VENDORS MADDI JAGAN MOHAN AND HIS WIFE MAD DI PRAVEENA HAVE ALSO ADMITTED IN THE SWORN DEPOSITION DTD.17.12.200 7 THAT IT WAS A MADE OVER DOCUMENT AND THE ADVANCE OF RS.40 LAKHS REFERR ED IN THE AGREEMENT WAS NOT PAID. THEREFORE, I AM OF THE VIEW THAT THERE IS NO BASIS TO TAKE A VIEW THAT THE CONSIDERATION FOR THE SALE WAS RS.130 LAKHS. HOWEVER, IT IS NOTED IN THE SWORN DEPOSITION OF MADDI JAGAN MOHAN DTD.17.12.2007, HE HAD DEPOSED THAT RS.10 LAKHS WAS PAID IN CASH TO AP PA RAO, SON OF THE ASSESSEE. IN THIS REGARD, THE ASSESSEE HAS FILED AF FIDAVIT FROM APPA RAO WHO HAS DENIED ANY SUCH RECEIPT. IN THESE FACTUAL CI RCUMSTANCES, I AM OF THE VIEW THAT THE AO IS NOT JUSTIFIED IN MAKING THE IMPUGNED ADDITION. ACCORDINGLY, THE AO IS DIRECTED TO TAKE THE FULL VA LUE AND CONSIDERATION FOR THE SALE OF THE PROPERTY AT RS.80 LAKHS AND TO RE-C OMPUTE THE CAPITAL GAINS ACCORDINGLY. 8. IN VIEW OF OUR FINDINGS ABOVE, WE FIND NO REASON S TO INTERFERE WITH THE ORDER PASSED BY LD. CIT(A). THIS GROUND OF APP EAL RAISED BY THE REVENUE IS DISMISSED. 9. THE ASSESSEE HAS FILED CROSS OBJECTION IN SUPPOR T OF ORDER OF THE LD. CIT(A). WE DISMISSED APPEAL OF THE REVENUE FOR THE REASONS ITA NO.122/VIZAG/2014 & CO 28/VIZAG/2016 SRI VIJAYAM APPARAO, VISAKHAPATNAM 7 RECORDED IN THE PRECEDING PARAGRAPHS. IN VIEW OF TH E ABOVE, THE CROSS OBJECTION FILED BY THE ASSESSEE BECOMES INFRUCTOUS. THEREFORE, WE DISMISS CROSS OBJECTION FILED BY THE ASSESSEE AS IN FRUCTOUS. 10. IN THE RESULT, THE APPEAL FILED BY THE REVENUE AND THE CROSS OBJECTION FILED BY THE ASSESSEE ARE DISMISSED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 28 TH NOV16. SD/- SD/- ( . ) ( . ) (G. MANJUNATHA) (V. DURGA RAO) /ACCOUNTANT MEMBER /JUDICIAL MEMBER ! /VISAKHAPATNAM: % /DATED : 28.11.2016 VG/SPS '! (! /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT THE ITO, WARD-1(2), VISAKHAPATNA M 2. / THE RESPONDENT SRI VIJAYAM APPA RAO, D.NO.10-1 2-9, FLAT NO.405, DHARMASADAN APARTMENTS, NEAR SBI MAIN ROAD, VISAKHAP ATNAM. 3. ) / THE CIT-1, VISAKHAPATNAM 4. ) ( ) / THE CIT(A),VISAKHAPATNAM 5. ! , , , , ! / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // /0 , (SR.PRIVATE SECRETARY) , , ! / ITAT, VISAKHAPATNAM