The DCIT, Circle-1, Surat V. M/s. Jaisal Mechatronics Pvt.Ltd., Surat

ITA 127/AHD/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 57266 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-03-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: misc
• Appeal Filed On: 13-01-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S P TALATI
• Keywords: Unexplained investment; Sale consideration of property below Jantri Value
• Section: 143(3); 50C

Judgement Text

-1- IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'C' BEFORE SHRI MUKUL KR. SHRAWAT - JM AND SHRI A MOHAN ALANKAMONY - AM ITA NO.127/AHD/2010 (ASSESSMENT YEAR:-2006-07) THE DEPUTY COMMISSIONER OF INCOME- TAX, CIRCLE-1, ROOM NO. 108, AAYAKAR BHAVAN, MAJURA GATE, SURAT V/S M/S JAISAL MECHATRONICS PVT.LTD., 2003, WORLD TRADE CENTRE, RING ROAD, SURAT PAN: AABCL 4323 M [APPELLANT] [RESPONDENT] REVENUE BY :- SHRI S P TALATI, SR. DR ASSESSEE BY:- NONE DATE OF HEARING:- 22-02-2012 DATE OF PRONOUNCEMENT:- 16-03-2012 O R D E R PER MUKUL KR. SHRAWAT (JM) :- THIS IS AN APPEAL AT THE BEHEST OF THE REVENUE WHICH HAS EMANATED FROM THE O RDER OF CIT(A)-I, SURAT DATED 12-11-2009 AND THE ONLY GROUN D IS REPRODUCED BELOW:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION MADE ON A CCOUNT OF UNEXPLAINED INVESTMENT U/S 69B OF THE ACT OF RS.8,2 0,330/-. 2 THE FACTS IN BRIEF AS EMERGING FROM THE CORRESPON DING ASSESSMENT ORDER PASSED U/S 143(3) DATED 19-12-2008 WERE THAT THE ASSESSEE-COMPANY IS ENGAGED IN THE BUSINESS OF GENERATING OF POWER FROM WIND MILL. IT WAS NOTICED BY THE AO THAT THE ASSESSEE 2 HAS PURCHASED THE LAND MEASURING 2 ACRES FOR SETTIN G UP OF A WIND MILL. AS PER THE AGREEMENT OF PURCHASE THE VALUE OF THE LAND WAS TAKEN AT RS.1,20,000/-. HOWEVER, THE STAMP DUTY AS PER THE AO WAS AT RS.9,40,000/-. THE ASSESSEE HAS INFORMED THA T IN FACT THE VALUE OF THE LAND IN THE BALANCE-SHEET WAS SHOWN AT RS.15 LAKHS. HOWEVER, THE AO WAS NOT CONVINCED AND THE DIFFERENC E BETWEEN THE TWO RS.8,20,000/- [RS.9,40,000 RS.1,20,000] W AS TAXED U/S 69B OF THE INCOME-TAX ACT, 1961 [HEREINAFTER REFERR ED TO AS THE ACT]. THE MATTER WAS CARRIED BEFORE THE FIRST APP ELLATE AUTHORITY. 3 AFTER APPRECIATING THE RELEVANT FACTS, THE LEARNE D CIT(A) HAS HELD AS UNDER:- 2.1 THESE ARE REGARDING THE ACTION OF THE A.O. IN INVOKING THE PROVISIONS OF SECTION 69B AND THEREBY ADOPTING THE VALUE OF SALE AS PER STAMP DUTY VALUATION. IN THE ASSESSMENT ORDER, THE A.O. HAS STATED THAT THE ASSESSEE HAS PURCHASED A LAND MEASURING TW O ACRES. THE LAND IS SITUATED AT VILLAGE JAMDE, TAL. SAKRI, DIST. DHU LE. THE PURCHASE AGREEMENT WAS MADE FOR RS.1,20,000/- WHEREAS THE ST AMP DUTY AUTHORITIES VALUED THIS LAND AT RS.9,40,000/- AND C HARGED STAMP DUTY ACCORDINGLY. THE ASSESSEE ARGUED PAID RS.15,00,000/ - FOR PURCHASE THIS LAND ALTHOUGH SALE DEED MADE ONLY FOR RS.L,20,000/- . IT WAS FURTHER ARGUED THAT SINCE IT HAD PAID THE AMOUNT MORE THAN THE MARKET VALUE, NO ADDITION CAN BE MADE U/S 69B. THE A.O. DID NOT A CCEPT THIS CONTENTION AND STATED THAT THE ASSESSEE HAS UNDERVA LUED THE LAND SINCE THE STAMP DUTY VALUE IS RS.9,40,000/- AND SALE DEED OF RS.1,20,000/-. THE A.O. ARGUED THAT THE BALANCE AMOUNT OF RS.8,20, 000/- IS NOT PAID FOR THE LAND BUT FOR PROVIDING EASY AND FREE ACCESS TO THE ASSESSEE'S LAND. THE A.O., THEREFORE, ARGUED THAT THE LAND HAS BEEN ACTUALLY UNDERVALUED OF RS.8,20,000/- AND ADDITION WAS MADE U/S.69B BEING UNACCOUNTED INVESTMENT IN THE PURCHASE OF LAND. 2.2 DURING THE APPELLATE PROCEEDINGS, THE APPELLANT ARGUED THAT THERE IS NO PROVISION SIMILAR TO SECTION 50C FOR AD OPTING THE STAMP DUTY VALUATION IN CASE OF PURCHASE. HE FURTHER RELI ED ON THE DECISION OF 3 THE HON'BLE I.T.A.T., AHMEDABAD IN THE CASE OF BHAR AT N. PATEL FOR AY. 2005-06, ITA NO.L749/AHD/2008 DATED 29.08.2008. 2.3 I HAVE CONSIDERED THE SUBMISSION MADE BY THE AP PELLANT AND THE OBSERVATION OF THE A.O. I AGREE WITH THE APPELLAN T THAT THERE IS NO PROVISION SIMILAR TO SECTION 50C FOR THE PURPOSE OF PURCHASE OF A PROPERTY. IN ANY CASE, SINCE THE ISSUE IS DIRECTLY COVERED BY THE DECISION OF THE HONBLE ITAT, AHMEDABAD IN THE CASE OF BHARAT N PATEL (SUPRA), HENCE THE ADDITION MADE BY THE AO IS DELETED. THEREFORE, THESE GROUNDS OF APPEAL ARE ALLOWED. 4 ON THE DATE OF HEARING, NO ONE HAS APPEARED FROM THE SIDE OF THE RESPONDENT-ASSESSEE. HOWEVER, CONSIDERING TH E TRIFLE NATURE OF THE ISSUE, WE HAVE DECIDED TO PROCEED EX- PARTE QUA THE ASSESSEE AFTER HEARING THE LEARNED DR WHO HAS PLACE D RELIANCE ON THE ASSESSMENT ORDER. 5 THE ADMITTED FACTUAL POSITION IS THAT THE LAND IN QUESTION WAS PURCHASED THROUGH ACCOUNT PAYEE CHEQUES AND THE SAME WAS CAPITALIZED AS PER THE BOOKS OF ACCOUNT FOR A SUM O F RS.15 LAKHS. HOWEVER, WHILE PAYING STAMP DUTY AS PER THE PURCHAS E AGREEMENT, THE VALUE OF THE LAND WAS TAKEN AT RS.1, 20,000/-. THE ALLEGATION OF THE AO WAS THAT AS PER THE RECORDS OF THE STAMP DUTY AUTHORITY, THE MARKET VALUE OF THE LAND WAS FI XED AT RS.9,40,000/-. HE HAS THEREFORE TAXED THE BALANCE A S UNDISCLOSED INVESTMENT. SINCE THE VALUE OF THE LAND AS PER THE BOOKS WAS ALREADY DISCLOSED HIGHER THAN THE VALUE OF THE LAND AS ALLEGED BY THE AO, THEREFORE, IN OUR CONSIDERED OPINION, THE P ROVISIONS OF SECTION 50C HAVE WRONGLY BEEN INVOKED TO TAX THE DI FFERENCE U/S 69B OF THE ACT. IN THE CASE OF CIT VS. KISHAN KUMAR (2009) 315 ITR 204 (RAJ), A VIEW HAS BEEN EXPRESSED BY THE HON BLE RAJASTHAN HIGH COURT THAT STAMP DUTY AUTHORITYS RA TES OF 4 PROPERTY FIXED FOR THE PURPOSE OF REGISTRATION OF S ALE DEED COULD NOT BE TAKEN TO BE THE PRICE FOR WHICH THE PROPERTY WAS TRANSACTED. LIKEWISE IN THE CASE OF ITO VS. HARLEY STREET PHARMACEUTICALS LTD. (2010) 6 ITR (TRIB) 182 (AHD) A VIEW WAS EXPRESSED THAT MERELY ON THE BASIS OF STAMP DUTY AD DITIONALLY PAID, PROVISIONS OF SECTION 50C ARE NOT APPLICABLE TO A PURCHASER TO ASSESS HIS UNEXPLAINED INVESTMENT ESPECIALLY WHE N THERE IS NO EVIDENCE THAT THE ASSESSEE HAD PAID OVER AND ABOVE THE PURCHASE PRICE RECORDED. RESPECTFULLY FOLLOWING THESE DECISI ONS, WE HEREBY CONFIRM THE FINDING OF THE LEARNED CIT(A) AN D DISMISS THE GROUND OF THE REVENUE. 6 IN THE RESULT, THE REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE COURT TODAY ON 16-03-2012 SD/- SD/- (A MOHAN ALANKAMONY) ACCOUNTANT MEMBER (MUKUL KR. SHRAWAT) JUDICIAL MEMBER DATE : 16-03-2012 COPY OF THE ORDER FORWARDED TO: 1. M/S JAISAL MECHATRONICS PVT.LTD., 2003, WORLD TR ADE CENTRE, RING ROAD, SURAT 2. THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-1, ROOM NO. 108, AAYAKAR BHAVAN, MAJURA GATE, SURAT 3. CIT CONCERNED 4. CIT(A)-I, SURAT 5. DR, ITAT, AHMEDABAD BENCH-C, AHMEDABAD 6. GUARD FILE BY ORDER DEPUTY REGISTRAR ASSISTANT REGISTRAR ITAT, AHMEDABAD