Sh. Vinod Jindal, Mandi Dabwali V. ITO, W-3, Sirsa

ITA 1440/CHANDI/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 9905 (ITAT-CHANDIGARH)
• Duration Of Justice: 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 19-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Keywords: Cost of acquisition

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH SMC CHANDIGARH , ! BEFORE: SMT. DIVA SINGH, JM ./ ITA NO. 1440/CHD/2018 / ASSESSMENT YEAR : 2012-13 SHRI VINOD JINDAL, C/O JINDAL ROADLINES, G.T.ROAD, MANDI DABWALI, SIRSA. VS THE ITO, WARD-3, SIRSA. ./ PAN NO. : ACEPK9943L / APPELLANT / RESPONDENT / ASSESSEE BY : SHRI ASHOK GOYAL, PROXY COUNSEL FOR SHRI PARIKSHIT AGGARWAL / REVENUE BY : SHRI MANJIT SINGH, CIT-DR ! ' # / DATE OF HEARING : 14.05. 2019 $%&' # / DATE OF PRONOUNCEMENT : 31.05. 2019 '#/ ORDER THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A SSAILING THE CORRECTNESS OF THE ORDER DATED 13/09/2018 OF CIT(A) HISSAR PERT AINING TO 201112 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS : 1. THAT ON THE FACTS, CIRCUMSTANCES AND LEGAL POSI TION OF THE CASE, THE WORTHY CIT(A) IN APPEAL NO. 102/SRS/2014-15 DATED 13.09.2018 HAS ERR ED IN PASSING THAT ORDER IN CONTRAVENTION OF THE PROVISIONS OF S. 250(6) OF THE INCOME TAX ACT, 1961. 2. THAT ON LAW, FACTS AND CIRCUMSTANCES OF THE CASE , WORTHY CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF LD. AO IN MAKING DISALLOWA NCE OF RS 7,62,076/-AS LONG TERM CAPITAL LOSS ON ACCOUNT OF SALE OF DISMANTLED RESIDUE OF BU ILDING FROM INDEXED COST OF ACQUISITION. BY HOLDING THAT NO TRANSFER OF SUCH BUILDING TOOK PLAC E EVEN WHEN IT IS QUITE EVIDENT FROM THE RECORDS THAT THE SCHOOL BUILDING EXISTED ON THE SAI D LAND AND WAS DEMOLISHED AS IT BECAME UNSAFE FOR ANY USE. 3. THAT THE APPELLANT CRAVES LEAVE FOR ANY ADDITION , DELETION OR AMENDMENT IN THE GROUNDS OF APPEAL ON OR BEFORE THE DISPOSAL OF THE SAME. ITA 1440/CHD/2018 A.Y. 2012-13 PAGE 2 OF 3 2. AT THE TIME OF HEARING, AN ADJOURNMENT APPLICATI ON WAS MOVED ON BEHALF OF THE ASSESSEE. MR. ASHOK GOYAL, CA APPEARED AS PROXY COUNSEL ON BEHALF OF THE ASSESSEES COUNSEL. HOWEVER, CONSIDERING THE MATERI AL AVAILABLE ON RECORD, IT WAS DEEMED APPROPRIATE TO PROCEED WITH THE PRESENT APPE AL EX-PARTE QUA THE ASSESSEE APPELLANT ON MERIT AFTER HEARING THE LD. SR. DR. 3. THE RELEVANT FACTS OF THE CASE ARE THAT THE ASSE SSING OFFICER IN THE COURSE OF THE ASSESSMENT PROCEEDINGS DISALLOWED RS. 6,30,410/ - CLAIMED AS COST OF INDEXATION ON SCHOOL BUILDING CLAIMS HOLDING THAT N O TRANSFER OF SUCH BUILDING TOOK PLACE. THE ASSESSEE CARRIED THE ISSUE IN APPEA L BEFORE THE CIT(A). THE ARGUMENTS ADVANCED ON BEHALF THE ASSESSEE ARE SET O UT IN PARA 5.4.1 AT PAGE 12 OF THE IMPUGNED ORDER. FOR READY REFERENCE THESE AR E REPRODUCED HEREUNDER : 5.4.1 DURING THE COURSE OF APPELLATE PROCEEDING THE ASSESSEE SUBMITTED THAT THE ENTIRE INDEXED COST OF SCHOOL BUILDING IN WHICH APPELLANT WAS HOLDING L/3 RD SHARE SINCE FINANCIAL YEAR 1999-2000. THE L/3 RD SHARE OF CONSTRUCTION COST RS. 3,59,379.60 HAVE BE EN SHOWN IN BALANCE SHEET FILED WITH I. T. RETURN OF THAT YEAR WITH I. T. DEPARTMENT VIDE ACK. NO. 7734 AN 29-10-1999 WITH THE I.T.O., WARD-2, SIRSA. THE SAID BUILDING WAS GIVEN ON RENT TO M/S. SUTLEJ PUBLIC SCHOOL SINCE 01-04-1999 TILL 31-03-2011. A P UBLIC SCHOOL WAS RUNNING IN THE SAID BUILDING. THE APPELLANT HAD DECLARED HIS SHARE OF R ENTAL INCOME FROM THAT SCHOOL IN HIS RETURN REGULARLY FOR THE PERIOD UNDER CONSIDERATION. THE R OOF OF SAID BUILDING WAS MADE OF STONE SLABS (PATHAR KI PATTION KI) AND STONE SLABS HAD CR ACKED AND STARTED BROKEN'FROM MANY PLACES AS SUCH RUNNING OF SCHOOL THERE BECOMES TOTALLY UNS AFE AS SUCH IT WAS GOT VACATED AND BUILDING WAS DISMANTLED. (LETTER FROM SAID SCHOOL MANAGEMENT IS ENCLOSED HEREWITH). VALUE OF EMPTY LAND AND/OR LAND WITH BUILDING WAS SAME BECAUSE THE BUILDING WAS IN DETERIORATED CONDITION, HOWEVER ASSESSEE HAD RECOVERED THE VALUE IF SCRAP/M ALBA (L/3 RD SHARE) AMOUNTING TO RS. 41,666/- IN ADDITION TO SALE PROCEEDS OF LAND. 3.1. HOWEVER, THESE ARGUMENTS WERE DISMISSED HOLDIN G AS UNDER : 5.4.2 THE SUBMISSION MADE BY THE APPELLANT IS CAREFULLY CONSIDERED AND FOUND THAT THE ASSESSEE IS NOT IN POSITION TO PROVE THE GENUINENESS OF THIS CLAIM AND DOCUMENTS RELATED TO COST OF CONSTRUCTION ON THE LAND AND CHANGE IN USE OF LAND WHICH IS SHOWN AS AGRICULTURE LAND IN THE SALE DEED. THEREFORE, THE ADDITION MADE ON ACCOUNT OF DISALLOWANCE LONG TERM CAPITAL GAIN IS HEREBY SUSTAINED. THE GROUND OF APPEAL IS DISMISSED. 4. AGGRIEVED BY THIS, THE ASSESSEE IS IN APPEAL BEF ORE THE ITAT. 5. ON A READING OF THE MATERIAL AVAILABLE ON RECORD , IT IS SEEN THAT THE CONCLUSIONS ARE ARRIVED AT IGNORING THE PAST HISTOR Y DEMONSTRATING THAT A BUILDING WAS IN EXISTENCE WHEREFROM A PUBLIC SCHOOL WAS RUNN ING AND RENT WAS BEING PAID ITA 1440/CHD/2018 A.Y. 2012-13 PAGE 3 OF 3 BY M/S. SUTLEJ PUBLIC SCHOOL SINCE 01-04-1999 TILL 31-03-2011, FACTS ARE SHOWN TO HAVE BEEN ARGUED. WHY THESE FACTS REMAIN UNADDRESS ED. THE LD. CIT-DR WAS UNABLE TO ADDRESS. TO MY UNDERSTANDING, THE FACTS ON RECORD WHICH CONSISTED OF THE PAST HISTORY OF THE ASSESSEE ON THE SAID ISSUE WERE RELEVANT FACTS AND THEY OUGHT TO HAVE BEEN ADDRESSED. EVEN IF THE ASSESSEE HAS NOT RETAINED THE RECEIPTS OF SALE OF MALBA ETC. THE FACT THAT THE SCHOOL WAS IN EXISTENCE WAS A FACT WHICH COULD HAVE BEEN ESTABLISHED BY CARRYING OUT A LOCAL INQUIRY ETC. ACCORDINGLY, THE CONCLUSION ARRIVED AT CANNOT BE SUSTAINED. IN VIEW THEREOF, THE ADJOURNMENT APPLICATION OF THE ASSESSEE WAS REJECTED AND IT WAS DIRECTED THAT THE IMPUGNED ORDER SHALL BE SET-ASIDE BACK TO THE FILE OF THE CI T(A) WITH THE DIRECTION TO PASS A SPEAKING ORDER IN ACCORDANCE WITH LAW. IT IS HOPED THAT THE OPPORTUNITY SO PROVIDED IS UTILISED BY THE ASSESSEE IN GOOD FAITH BY MAKING FULL AND PROPER COMPLIANCES. WE MAKE IT CLEAR THAT IN THE EVENTUALI TY OF ABUSE OF THE TRUST REPOSED, THE CIT(A) WILL BE AT LIBERTY TO PASS AN O RDER ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. SAID ORDER WAS PRONOUNCED IN T HE OPEN COURT. 6. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLO WED FOR STATISTICAL PURPOSES ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST MAY 2019. SD/- ( ) (DIVA SINGH) ! / JUDICIAL MEMBER % & %( )* +* / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT - 2. / THE RESPONDENT - 3. ! , / CIT 4. ! , ( )/ THE CIT(A) 5. *-. / , # / , 012.3 / DR, ITAT, CHANDIGARH 6. .2 4' / GUARD FILE %( ! / BY ORDER, 5 / ASSISTANT REGISTRAR