Vikash Bose, Kolkata V. I.T.O Wd - 29(4),kolkata, Kolkata

ITA 1236/KOL/2013

• Counselvise Citation: 123623514 RSA 2013
• Duration Of Justice: 7 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 13-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR SWETABH SUMAN
• Assessee Lawyers: SOUMITRA CHOW DHURY; T K CHAKRABORTY
• Keywords: Capital asset; Cost of acquisition; Fair market value; Valuation report

Judgement Text

I.T.A. NO.:1236/KOL/ 2013, ASSESSME NT YEAR: 2008-09 PAGE 1 OF 9 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA C BENCH, KOLKATA CORAM : SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER I.T.A. NO. 1236/KOL/ 2013) ASSESSMENT YEAR : 2008-2009 SRI VIVEK BOSE,.........APPELLANT 1A, SHYAM BOSE ROAD, KOLKATA-700 027 [PAN : AEAPB 0506 L] -VS.- INCOME TAX OFFICER,.,......RESPONDENT WARD-29(4), KOLKATA APPEARANCES BY: SHRI SOUMITRA CHOWDHURY & SHRI T.K. CHAKRABORTY, A. R. FOR THE APPELLANT DR. SWETABH SUMAN, CIT, FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : DECEMBER 11, 2013 DATE OF PRONOUNCING THE ORDER : DECEMBER 19, 2013 O R D E R PER ABRAHAM P. GEORGE : 1. IN THIS APPEAL FILED BY THE ASSESSEE DIRECTED AG AINST AN ORDER DATED 04.03.2013 OF LD. COMMISSIONER OF INCOME TAX (APPEA LS)-XVI, KOLKATA, IT HAS RAISED SIX GROUNDS OF WHICH GROUNDS 5 & 6 ARE G ENERAL AND NEED NO ADJUDICATION. 2. THROUGH HIS GROUNDS 1 TO 3, ASSESSEE ASSAILS THE DETERMINATION OF INDEXED COST OF ACQUISITION WITH REFERENCE TO 12.97 KATTAH OF LAND OUT OF TOTAL 27.69 KATTAH LAND SOLD BY HIM DURING THE RELE VANT PREVIOUS YEAR AND CONSEQUENTIAL INCREASE IN CAPITAL GAINS COMPUTATION DONE BY THE ASSESSING OFFICER. 3. FACTS APROPOS ARE THAT THE ASSESSEE HAD SOLD 27. 69 KATTAH OF LAND ALONGWITH A STRUCTURE HAVING BUILT UP AREA OF 878.3 4 SQ. MTRS. FOR A CONSIDERATION OF RS.4,50,00,000/-.STAMP VALUATION A UTHORITY VALUED THE PROPERTY AT RS.4,70,00,000/-. IN ITS COMPUTATION OF CAPITAL GAINS, THE ASSESSEE HAD WORKED OUT AND DEDUCTED INDEXED COST O F ACQUISITION OF RS.4,03,26,616/-, WHICH READ AS UNDER :- I.T.A. NO.:1236/KOL/ 2013, ASSESSME NT YEAR: 2008-09 PAGE 2 OF 9 INDEXED COST OF 12.97 KATTAH LAND BASED ON COST AS ON 1.4.1981- RS.3,50,000 X 551/100 = RS.2,50 ,12,645/- INDEXED COST OF 14.72 KATTAH LAND PURCHASED ON 12.0 8.97 FROM NITA BOSE AT COST RS.91,99,500/- X 551/331 = RS.1,53,13,971/- ____________________________ RS.4,03,26,616/- _____________________________ _ ASSESSING OFFICER MADE A REFERENCE TO THE DEPARTMEN TAL VALUATION OFFICER FOR FIXING THE FAIR MARKET VALUE AS ON 1.4.1981. AC CORDING TO HIM, ASSESSEE HAD SHOWED EXCESSIVE COST FOR 12.97 KOTTAC H LAND AS ON 1.4.1981, FOR INDEXATION. DEPARTMENTAL VALUATION OF FICER GAVE A REPORT ON 24.12.2010 BY WHICH HE FIXED THE COST AS ON 1.4.198 1 OF 12.97 KATTAH OF LAND AT RS.11.90 LAKHS. ACCORDINGLY THE INDEXED COS T OF ACQUISITION OF THIS LAND CAME TO RS.65,56,900/-. THE TOTAL INDEXED COST OF ACQUISITION THUS CAME TO RS.2,18,70,871/- AGAINST RS.4,03,26,616/- S HOWN BY THE ASSESSEE. THERE WAS NO DISPUTE WITH REGARD TO THE INDEXED COS T OF 14.72 KATTAH OF LAND PURCHASED BY THE ASSESSEE ON 12.08.1997 WHICH WAS A PART OF THE TOTAL 27.69 KATTAH OF LAND SOLD. SINCE INDEXED COST OF ACQUISITION ASSESSED BY THE ASSESSING OFFICER CAME DOWN DRASTICALLY, RES ULTANT CAPITAL GAINS WAS SUBSTANTIALLY INCREASED. 4. ASSESSEES APPEAL BEFORE THE LD. CIT(APPEALS) A GAINST ADOPTION OF VALUATION DONE BY THE DEPARTMENTAL VALUATION OFFICE R FOR 12.97 KATTAH OF LAND WAS UNSUCCESSFUL. 5. NOW BEFORE US, LD. AR PRAYED FOR ADMISSION OF AN ADDITIONAL GROUND OF APPEAL, WHICH ACCORDING TO HIM WAS PURELY A LEGA L ONE. ACCORDING TO HIM THE ADDITIONAL GROUND ASSAILED THE REFERENCE TO DVO MADE BY THE ASSESSING OFFICER UNDER SECTION 55A OF THE ACT. IN HIS OPINION SUCH REFERENCE WAS ILLEGAL AND SUBSTITUTION OF THE COST OF ACQUISITION BASED ON THE REPORT OF DVO WAS ARBITRARY AND UNJUSTIFIED. LD . DR DID NOT RAISE ANY I.T.A. NO.:1236/KOL/ 2013, ASSESSME NT YEAR: 2008-09 PAGE 3 OF 9 OBJECTION TO ADMISSION ADDITIONAL GROUND FILED BY T HE ASSESSEE. HENCE THE ADDITIONAL GROUND IS ADMITTED FOR ADJUDICATION. 6. LD. COUNSEL FOR THE ASSESSEE IN SUPPORT OF THE A DDITIONAL GROUND MENTIONED THAT DVOS REPORT WAS SOUGHT UNDER SECTIO N 55A OF THE ACT. RELYING ON THE DECISION OF HONBLE JURISDICTIONAL H IGH COURT IN THE CASE OF CIT VS.- UMEDBHAI INTERNATIONAL (P) LTD. [2011] 33 0 ITR 506, LD. COUNSEL SUBMITTED THAT UNLESS AND UNTIL THE VALUE D ECLARED BY THE ASSESSEE BASED ON A VALUATION DONE BY A REGISTERED VALUER WAS FOUND TO BE LESSER THAN FAIR MARKET VALUE, ASSESSING OFFICER COULD NOT MAKE A REFERENCE UNDER SECTION 55A OF THE ACT. OTHERWISE A SSESSING OFFICER HAS TO FORM AN OPINION THAT THE FAIR MARKET VALUE OF TH E ASSET EXCEEDED THE VALUE OF THE ASSET AS CLAIMED BY THE ASSESSEE. ACCO RDING TO HIM, BOTH THESE CONDITIONS WERE NOT SATISFIED. HENCE REFERENC E MADE UNDER SECTION 55A OF THE ACT WAS INVALID AND SUBSTITUTION OF THE COST GIVEN BY THE ASSESSEE WHICH WAS BASED ON REGISTERED VALUERS REP ORT COULD NOT HAVE BEEN DONE. 7. PER CONTRA, LD. DR SUBMITTED THAT REFERENCE UNDE R SECTION 55A OF THE ACT COULD BE MADE ONCE THE ASSESSING OFFICER RE ACHED AN OPINION THAT VALUE SHOWN BY THE ASSESSEE WAS INCORRECT. ASSESSIN G OFFICER HAD CLEARLY MENTIONED THAT ASSESSEE HAD SHOWN VERY HIGH FAIR MA RKET VALUE AS ON 1.4.1981 AND, THEREFORE, REFERENCE MADE UNDER SECTI ON 55A WAS JUSTIFIED. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ASSESSEE HAD WORKED OUT THE IN DEXED COST OF ACQUISITION OF 12.97 KATTAH OF LAND OUT OF TOTAL 27 .96 KATTACH OF LAND SOLD BY HIM TAKING RS.3,50,000/- PER KATTAH AS FAIR MARK ET VALUE AS ON 1.4.1981. FOR ARRIVING AT THIS FAIR MARKET VALUE, A SSESSEE HAD RELIED ON VALUATION REPORT GIVEN BY ONE SHRI MALLAR MUKHERJEE , REGISTERED VALUER, COPY OF WHICH HAS BEEN PLACED AT PAGES 34 TO 46 OF THE PAPER BOOK FILED. IN HIS REPORT IT HAS BEEN MENTIONED BY THE REGISTER ED VALUER THAT ON LOCAL ENQUIRY, THE PRICE OF LAND IN THE CONCERNED AREA, D URING 1981-1982 WAS BETWEEN RS.3,50,000/- AND RS.4,00,000/- PER KATTAH. THIS CONCLUSION I.T.A. NO.:1236/KOL/ 2013, ASSESSME NT YEAR: 2008-09 PAGE 4 OF 9 APPEARS AT PAGE 42 OF THE PAPER BOOK. AS AGAINST TH IS, OPINION OF THE ASSESSING OFFICER WAS THAT SUCH FAIR VALUE WAS VERY HIGH SINCE ASSESSEE WAS HOLDING THE PROPERTY SINCE 1979. BASED ON THIS REASONING HE HAD REFERRED THE VALUATION TO THE DVO. COPY OF THE DVO S REPORT IS PLACED AT PAGES 69 TO 84 OF THE PAPER BOOK. DVO IN HIS REPORT HAS CLEARLY MENTIONED THAT REFERENCE TO HIM WAS MADE BY THE ASS ESSING OFFICER UNDER SECTION 55A OF THE ACT. HE DETERMINED THE VALUE OF 12.97 KATTAH OF LAND AS ON 1.4.1981 AT RS.11,90,000/-. AT THIS JUNCTURE, A LOOK AT SECTION 55A BECOMES NECESSARY. THIS IS REPRODUCED HEREUNDER :- 55A : WITH A VIEW OF ASCERTAINING THE FAIR MARKET VALUE OF A CAPITAL ASSET FOR THE PURPOSES OF THIS CHAPTER, THE ASSESSING OFFICER MAY REFER THE VALUATION OF CAPITAL ASSET TO A VALUATION OFFICER- (A) IN A CASE WHERE THE VALUE OF THE ASSET AS CLAIMED B Y THE ASSESESE IS IN ACCORDANCE WITH THE ESTIMATE MADE BY A REGISTERED VALUER, IF THE ASSESSING OFFICER IS OF T HE OPINION THAT THE VALUE SO CLAIMED IS LESS THAN ITS FAIR MARKET VALUE, (B) IN ANY OTHER CASE, IF THE ASSESSING OFFICER IS OF T HE OPINION- (I) THAT THE FAIR MARKET VALUE OF THE ASSET EXCEEDS THE VALUE OF THE ASSET AS CLAIMED BY THE ASSESESE BY MORE THAN SUCH AMOUNT AS MAY BE PRESCRIBED IN THIS BEHALF, OR (II) THAT HAVING REGARD TO THE NATURE OF THE ASSET AND OTHER RELEVANT CIRCUMSTANCES, IT IS NECESSARY SO TO DO. WHAT IS APPLICABLE HERE IS CLAUSE (A) OF THE ABOVE SECTION. HENCE TO MAKE A REFERENCE UNDER SECTION 55A OF THE ACT, ASSESSING OFFICER HAS TO FORM AN OPINION THAT VALUE CLAIMED IS LESS THAN THE FAIR MA RKET VALUE. ON THE OTHER HAND, THE OPINION OF THE ASSESSING OFFICER HERE IS THAT THE VALUE SHOWN WAS VERY HIGH OR IN OTHER WORDS, MORE THAN THE FAIR MARKET VALUE. THIS BEING THE CASE WE ARE OF THE OPINION THAT THE REFER ENCE UNDER SECTION 55A COULD NOT HAVE BEEN MADE. HONBLE CALCUTTA HIGH COU RT IN THE CASE OF CIT VS.- UMEDBHAI INTERNATIONAL (P) LTD. (2011) 338 IT R 506, IN A SIMILAR SITUATION, WHERE THERE WAS A SUBSTITUTION OF THE CO ST AS ON 1.4.1981, BY I.T.A. NO.:1236/KOL/ 2013, ASSESSME NT YEAR: 2008-09 PAGE 5 OF 9 VALUE BASED BY DVO ON A REFERENCE UNDER SECTION 55A OF THE ACT, HELD THAT SUCH A REFERENCE COULD NOT BE MADE UNLESS AND UNTIL THE ASSESSING OFFICER FORMED AN OPINION THAT VALUE SHOWN BY THE ASSESSEE WAS LESS THAN FAIR MARKET VALUE. PARAS 4 TO 8 OF THE JUDGMENT IS REPRO DUCED HEREUNDER :- 4. THE ASSESSEE ON THE BASIS OF REGISTERED VALUER S REPORT WORKED OUT INDEXED COST AS ON 1 ST APRIL, 2002 AT RS.3,06,37,281/-. IT WAS TAKEN OPENING STOCK OF LAND IN THE ASSESSMENT YEAR UNDER CONSIDERATION. WITH THE RETURNS THE AFORESAID VALUATION REPORT WAS SUBM ITTED. HOWEVER, THE AO DID NOT ACCEPT VALUATION AND REFERRED THE MATTER TO THE DEPARTMENTAL VALUER UNDER SECTION 55A OF THE SAID A CT TO DETERMINE THE FAIR MARKET VALUE AS ON 1 ST APRIL, 1981 AND IT WAS DONE BY THE DEPARTMENTAL VALUER AT RS.18,73,800. THE AO DID NOT ACCEPT VALUATION REPORT SUBMITTED BY THE ASSESSEE ON THE GROUND THAT THE SAME WAS NOT PREPARED ON THE BASIS OF ANY SALE INSTANCE. NATURAL LY THE AO PROCEEDED ON THE BASIS OF THE VALUATION OF THE DEPA RTMENTAL VALUER WHICH MADE A LOT OF DIFFERENCE IN ASSESSING TAX LIA BILITY. BASING DEPARTMENTAL VALUATION REPORT THE AO CAME TO CONCLU SION THAT THE ASSESSEE HAD OVERSTATED THE VALUE OF THE OPENING ST OCK AT RS.2,26,54,893/- AND INSTEAD OF ACCEPTING THE LOSS, AS SHOWN IN THE RETURN THE AO HAS DETERMINED THE NET PROFIT OF RS.6 ,09,025/-. THUS THE CONCLUSION ARRIVED AT BY THE AO BASED ON VALUATION. THEREFORE, THE POINT RAISED BEFOR E T HE C!T ( A) THAT THE VALUATION WAS GOT TO BE DONE BY THE AO WITHOUT COMPLIANCE OF S. 55A OF THE !T A C T , 1961 . ACCORDING TO THE ASSESSEE REFERENCE TO THE VALUATION OFFICER IS WITHOUT JURISDICTION A S P ER- CONDITION FOR REFERENCE WAS NOT SATISFIED. ACCORDING TO THE ASSESSEE BEFORE MAKING AN Y REFER E N CE THE AO HA S TO FORM OPINION THAT THE VALUE SO CLAIMED IS LESS THAN THE FAIR MARKET V A LU E WI TH OUT DOING S O REFERENCE IS WITHOUT JURISDICTION. ON THIS LIMITED POINT THE C!T ( A) ALLOWED TH E A PP EAL AND H E LD THAT TH E REFERENCE WAS NOT DONE BY THE AO IN COMPL I ANCE OF PROVISIONS OF SEC. 55A OF TH E SA I D A C T . TH E TRIBUNAL ALSO UPHELD THIS FINDING . 5. RE ADING THE AFORESAID QUESTION WE ARE NOT CONCERNED W ITH ANY OTHER PORTION OF THE JUDGM EN T AND ORD E R OF THE LEARNED TRIBUNAL. 6. T HE C !T ( A ) A S W ELL AS THE LEARNED TRIBUNAL HAS CAME TO FACT FIND I NG THAT TH E DEPAR T M EN T H AS NOT BR O UGHT ANY MATERIAL ON RECORD THAT AO HAD FORMED AN O PINION HAVING REGARD TO TH E NATUR E O F THE ASS E SS MENT AND CONSIDERING THE OTHER RELEVANT CIRCUMSTANCES FOR MAKING RE F E R ENCE TO D E PARTMENTAL VALUATION OFFICER UNDER S . 55A OF THE SAID ACT. THIS CONCURRENT FACT FINDING O F TWO A UTHO R IT IES A R E NOT QUESTIONED TO BE PERVERSE . 7. TH IS COURT CANNOT MAKE ANY ENDEAVOUR TO MAKE ANY FACT FI NDING NOR DOES IT W I S H T O D O IN A B SE N C E OF PLEA OF PERVERSITY . IN THIS CASE THE ADMITTED POSITION I S THAT TH E ASSESS EE S UBMI TTED VA LUATION MADE BY THE REGISTERED VALUER . HENCE CI. ( A ) OF THE AFOR E SAID S E CTION I S APPL IC A B L E I N THIS CASE W HI C H IS SE T OUT HEREUNDER - '55 A . W ITH A V IE W TO ASCERTAINING THE FAI R MARKET VALUE OF A CAPITAL ASSET FOR T H E PURPO SES OF TH IS C H A PTE R, TH E ( A SS ESSING) OFFICER MAY REFER THE VALUATION OF CAPITAL ASSET TO A VALUATION OFFI CER- (A) IN A CA SE W HERE THE VALUE OF THE ASSET AS CLAIMED BY THE ASSES SEE IS IN AC CO RDAN CE W ITH THE ES TIMA TE MAD E BY A REGISTERED VALUER, IF THE (ASSESSING) I.T.A. NO.:1236/KOL/ 2013, ASSESSME NT YEAR: 2008-09 PAGE 6 OF 9 OFFICER IS OF THE OPINION THAT TH E VA L UE SO C LAI MED I S L ESS THAN ITS FAIR MARKET VALUE. ( B ) IN A N Y OTH E R CASE , IF THE (ASSESSING) OFFICER IS OF THE OPINION (I) TH AT TH E FAIR MARKET VALUE OF THE ASSET E X CEEDS THE VALUE OF THE A SSE T AS C L A I MED BY THE ASSESSEE B Y MORE THAN SUCH AMOUNT AS MAY BE PRESCRIBED IN THIS BEHALF , OR ( II ) THAT HAVING R EGARD TO THE NATURE OF THE ASSET AND OTHER RELEVANT CIR C UMSTANCES , SO TO DO '. 8 . THU S IT IS CLEAR BASED ON THE AFORESAID CONCURRENT FACT FIN D I NGS THAT THE FORM A TION O F O PIN ION OF T H E AO THAT THE VALUE CLAIMED BY THE ASSESSEE LESS THAN ITS FAIR MARKET V ALUE IS S IN E QUA NON REASONS REC ORDED AFTER ORDER OF REFERENCE FOR VALUATION OF THE R E GISTERED VALU E R IS N OT THE SU B S TITUT E OF P R E-DECISIONAL FORMATION OF OPINION . WE ARE, THEREFORE, OF THE OPINION THAT ASSESSEE HAS TO SUCCEED IN THE ADDITIONAL GROUND. SUBSTITUTION OF COST OF ACQUISIT ION WITH THE VALUE FIXED BY THE DVO, THEREFORE, STANDS QUASHED. 9. THE ONLY OTHER EFFECTIVE GROUND TAKEN BY THE ASS ESSEE WHICH IS IN ITS GROUND NO. 4 IS REGARDING AN ADDITION OF RS.20, 00,000/- CLAIMED BY IT AS AN EXPENDITURE WHILE COMPUTING THE LONG-TERM CAP ITAL GAINS. 10. CLAIM OF THE ASSESSEE WAS THAT HE HAD PAID A SU M OF RS.20,00,000/- TO ONE SHRI NIKHIL CHANDA WHO WAS A CONFIRMING PART Y IN THE SALE. HOWEVER, ASSESSING OFFICER WAS NOT INCLINED TO ACCE PT THE CLAIM. ASSESSEES APPEAL IN THIS REGARD BEFORE THE LD. CIT (APPEALS) WAS ALSO NOT SUCCESSFUL. LD. CIT(APPEALS) HELD THAT THE CLAIM OF RS.20,00,000/- WAS NOT A GENUINE. 11. NOW BEFORE US, LD. AR STRONGLY ASSAILING THE OR DER OF AUTHORITIES BELOW SUBMITTED THAT THE VENDORS OF THE PROPERTY WE RE ASSESSEE AND SMT. NITA BOSE. ACCORDING TO HIM, THE AGREEMENT ENTERED INTO BY THE ASSESSEE AND SMT. NITA BOSE WITH THE PURCHASER M/S. MADGUL S ERVICES PVT. LTD., COPY OF WHICH WAS PLACED AT PAGES 15 TO 33 OF THE P APER BOOK, CLEARLY MENTIONED THAT SHRI NIKHIL CHANDA WAS A CONFIRMING PARTY. ACCORDING TO HIM, PAYMENT OF RS.20,00,000/- WAS DIRECTLY MADE TO SHRI NIKHIL CHANDA AND THIS WAS EVIDENT FROM PAGE 28 OF THE PAPER BOOK . SHRI NIKHIL CHANDA HAD ACKNOWLEDGED RECEIPT OF RS.20,00,000/-. THEREFO RE, ACCORDING TO HIM I.T.A. NO.:1236/KOL/ 2013, ASSESSME NT YEAR: 2008-09 PAGE 7 OF 9 IT WAS A NECESSARY OUTGO WITHOUT WHICH THE SALE WOU LD NOT HAVE TAKEN PLACE. HENCE THE PAYMENT WAS TO BE ALLOWED. 12. PER CONTRA, LD. D.R. SUPPORTED THE ORDER OF AUT HORITIES BELOW. 13 WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND SEEN THE COMPUTATION OF CAP ITAL GAINS UNDER SECTION 48 OF THE ACT. SUB-CLAUSE (I) OF THAT SECTI ON STATES THAT EXPENDITURE INCURRED WHOLLY AND EXCLUSIVELY IN CONN ECTION WITH THE TRANSFER OF CAPITAL ASSET HAS TO BE DEDUCTED FROM F ULL VALUE CONSIDERATION RECEIVED OR ACCRUING. PREAMBLE OF THE CONVEYANCE DE ED EXECUTED BY THE ASSESSEE ALONGWITH SHRI NITA BASU READS AS UNDER :- THIS INDENTURE MADE THIS 15 TH DAY OF FEBRUARY TWO THOUSAND AND EIGHT BETWEEN (1) (SM.) NITA BASU (ALS O KNOWN AS NITA BOSE) WIFE OF SHRI PRANAB BASU AND DA UGHTER- IN-LAW OF SHRI SANTOSH KUMAR BOSE AND (2) VIVEK BOS E SON OF SHRI PARMANANDA BOSE BOTH RESIDING AT 3A, SHYAM BOS E ROAD, POLICE STATION CHETLA, KOLKATA-700 027 HEREINAFTER REFERRED TO AS THE VENDORS (WHICH EXPRESSION SHALL UNLESS EXC LUDED BY ON REPUGNANT TO THE SUBJECT OR CONTEXT BE DEEMED TO MEAN AND INCLUDE THEIR AND EACH OF THEIR RESPECTIVE HEIRS, E XECUTORS, ADMINISTRATORS AND LEGAL REPRESENTATIVES) OF THE FI RST PART AND RICKY CHANDRA SON OF DHRUBA CHANDRA RESIDING AT 68A, PEARY MOHAN ROY ROAD, POLICE STATION CHETLA, KOLKAT A-700 027 HEREINAFTER REFERRED TO AS THE CONFIRMING PARTY ( WHICH EXPRESSIONS UNLESS EXCLUDED BY OR REPUGNANT TO THE SUBJECT OR CONTEXT SHALL BE DEEMED TO MEAN AND INCLUDE HIS HEI RS EXECUTORS, ADMINISTRATORS AND LEGAL REPRESENTATIVES ) OF THE SECOND PART AND MADGUL SERVICES PRIVATE LIMITED, A COMPANY INCORPORATED UNDER THE COMPANIES ACT, 1956 HAVING ITS REGISTERED OFFICE AT 20, BALLYGUNGE CIRCULAR RO AD, POLICE STATION BALLYGUNGE, KOLKATA-700 019 HEREINAFTER REF ERRED TO AS THE PURCHASER (WHICH EXPRESSION SHALL UNLESS EXCL UDED BY OR REPUGNANT TO THE SUBJECT OR CONTEXT BE DEEMED TOP M EAN AND INCLUDE ITS SUCCESSOR OR SUCCESSORS-IN-OFFICE AND/O R ASSIGNS) OF THE THIRD PART. IT IS CLEAR THAT SHRI NIKHIL CHANDA WAS A CONFIRMIN G PARTY WHO HAD NOMINATED THE BUYERS TO THE VENDORS. THAT CONFIRMIN G PARTY HAD NOMINATED THE BUYERS IS ALSO CLEAR FROM CLAUSE (K) APPEARING AT PAGES 19-20 OF THE PAPER BOOK, WHICH IS REPRODUCED HEREUN DER:- I.T.A. NO.:1236/KOL/ 2013, ASSESSME NT YEAR: 2008-09 PAGE 8 OF 9 THE CONFIRMING PARTY HAS NOMINATED TO THE VENDORS, THE PURCHASER HEREIN AS BEING ENTITLED IN PLACE AND STE AD OF THE CONFIRMING PARTY TO COMPLETE THE PURCHASE OF THE SA ID PREMISES FROM THE VENDORS AND HAS AGREED TO CONCUR AND CONFI RM THE SALE AND TRANSFER BY THE VENDORS IN FAVOUR OF THE P URCHASER AS THE NOMINEE OF THE CONFIRMING PARTY. THE NOMINATION OF THE PURCHASER WAS ACCEPTED BY THE VENDORS. THE PURCHASE R HAS PAID TO THE SAID SMT. NITA BASU DIRECTLY THE BALANCE CON SIDERATION OF RS.50,00,000.00 RECEIVABLE BY HER AS AFORESAID AND HAS PAID TO THE SAID VIVEK BASU DIRECTLY THE BALANCE CONSIDERAT ION OF RS.3,70,00,000.00 RECEIVABLE BY HIM AS AFORESAID AN D HAS ALSO PAID TO THE CONFIRMING PARTY A SUM OF RS.30,00,000/ - AS AND BY WAY OF REIMBURSEMENT OF THE SAME AMOUNT PAID BY THE CONFIRMING PARTY TO THE SAID VIVEK BOSE AND A FURTH ER SUM OF RS.20,00,000.00 BY WAY OF NOMINATION CHARGES OF THE CONFIRMING PARTY IN RESPECT OF THE SAID PREMISES AN D THE SAID TRANSACTION. IN THE PREMISES AFORESAID, THE VENDORS HAVE CONTRAC TED WITH THE PURCHASER FOR SALE AND TRANSFER OF THE SAID PRE MISES FREE FROM ALL ENCUMBRANCES MORTGAGES CHARGES ATTACHMENTS LIENS LISPENDENS LEASES TENANCIES OCCUPANCY RIGHTS USES D EBUTTERS TRUSTS ACQUISITION REQUISITION ALIGNMENT CLAIMS DEM ANDS AND LIABILITIES WHATSOEVER OR HOWSOEVER BY THE VENDORS TO THE PURCHASER AT OR FOR THE CONSIDERATION OF RS.4,50,0 0,000.00 (RUPEES FOUR CRORES FIFTY LACS) ONLY PAID TO THE VE NDORS BY THE PURCHASER IN THE PROPORTION AS AFORESAID AND THE CO NFIRMING PARTY HAS AGREED TO CONCUR CONFIRM AND ASSURE SUCH SALE. THAT THE PAYMENT TO SHRI NIKHIL CHANDA HAS DIRECTLY EFFECTED BY THE PURCHASER IS CLEAR FROM THE RECEIPT MEMO GIVEN AT P AGE 28 OF THE PAPER BOOK. IN SUCH CIRCUMSTANCES, WE ARE OF THE OPINION THAT THE PAYMENT COULD ONLY BE CONSIDERED AS AN EXPENDITURE INCURRED ONLY AND EXCLUSIVELY IN CONNECTION WITH THE TRANSFER OF THE PROPERTY. IT WAS AN ALLOWABLE ONE UNDER SECTION 48(I) OF THE ACT. SUCH ADDITION THERE FORE STANDS DELETED. GROUND NO. 4 OF THE ASSESSEE STANDS ALLOWED. 14. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH DAY OF DECEMBER, 2013. SD/- SD/- MAHAVIR SINGH ABRAHAM P. GEORG E (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA, THE 19 TH DAY OF DECEMBER, 2013 I.T.A. NO.:1236/KOL/ 2013, ASSESSME NT YEAR: 2008-09 PAGE 9 OF 9 COPIES TO : (1) THE ASSESSEE (2) THE DEPARTMENT (3) CIT (4) CIT(A) (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE TRUE COPY BY ORDER ETC ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.