KSN Raju, Hyderabad V. DCIT., Circle-6(1), Hyderabad

ITA 1466/HYD/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 6048 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-03-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 02-12-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 08-09-2014
• Court: TRIBUNAL
• Department Lawyers: M SITARAM
• Assessee Lawyers: S RAMA RAO
• Keywords: Additional evidence; Corroborative evidences; Revised return

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI D.MANMOHAN, VICE PRESIDENT AND SHRI B.RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO.1466/HYD/2 014 (ASSESSMENT YEAR 200 4-05) SHRI K.S.N.RAJU, HYDERABAD (PAN - ADFPK 3446 A) V/S DY. COMMISSIONER OF INCOME - TAX , CIRCLE 6((1), HYDERABAD (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.RAMA RAO RESPONDENT BY : SHRI M.SITARAM DATE OF HEARING 2.12.2015 DATE OF PRONOUNCEMENT 01.03.2016 O R D E R PER D.MANMOHAN, VICE PRESIDENT : THIS APPEAL IS FILED AT THE INSTANCE OF THE ASSES SEE AND IT IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF I NCOME- TAX(APPEALS) IV, HYDERABAD DATED 13.6.2014, ON THE ISSUE OF COMPUTATION OF CAPITAL GAINS AND TREATMENT OF AGRIC ULTURAL INCOME. 2. ASSESSEE HAS RAISED AS MANY AS TEN GROUNDS, OU T OF WHICH GROUNDS NO.1 AND 10 ARE GENERAL. GROUND NO.2 PERTA INING TO SALE CONSIDERATION OF PROPERTY AT RS.1,CRORE WAS WITHDRA WN BY THE ASSESSEE IN THE COURSE OF HEARING, AS THE ASSESSEE HIMSELF H AS ADMITTED SALE CONSIDERATION AT RS.1 CRORE IN THE REVISED RETURN, WHICH FACT WAS ALSO NOTED BY THE CIT(A), WHEN SIMILAR GROUND WAS RAISED BEFORE HER. ACCORDINGLY THIS GROUND IS TREATED AS WITHDRAWN. 3. FACTS NECESSARY FOR THE DISPOSAL OF THIS APPEA L ARE STATED IN BRIEF. ASSESSEE HAS FILED RETURN OF INCOME ADMITT ING CAPITAL GAINS, IN WHICH ORIGINALLY ASSESSEE TOOK THE SALE CONSIDERAT ION AT RS.85 LAKHS ITA NO.1466/HYD/2014 SHRI K.S.N.RAJU, HYDERABAD 2 AND CLAIMED RS.1,70,000 AS BROKERAGE AND RS.5,20,00 0 TOWARDS COST OF IMPROVEMENT. ASSESSEE ADMITTED LONG TERM CAPITAL GAINS AT RS.52,51,271. LATER ON, ASSESSEE FILED A REVISED R ETURN IN THE COURSE OF ASSESSMENT PROCEEDINGS, ADMITTING SALE CONSIDER ATION AT RS.1 CRORE AND INCREASING THE LONG TERM CAPITAL GAINS TO RS.60 ,84,120. HOWEVER, THE ASSESSEE ENHANCED CLAIM OF BROKERAGE FROM RS.1, 70,000 TO RS.2 LAKHS AND COST OF IMPROVEMENT FROM RS.5,20,000 TO R S.9,75,500. IN THE COURSE OF SCRUTINY PROCEEDINGS, ASSESSING OFFIC ER ASKED THE ASSESSEE TO SPECIFICALLY FURNISH THE NECESSARY EVID ENCE IN SUPPORT OF THE CLAIMS OF BROKERAGE AND COST OF IMPROVEMENT. SI NCE NO EVIDENCE WAS FURNISHED IN RESPECT OF THE EXPENDITURE SO INC URRED, THE ASSESSING OFFICER TOOK THE ORIGINAL COST OF THE PLOT AND RE-W ORKED THE LONG TERM CAPITAL GAINS AT AN AMOUNT OF RS.83,21,038. 4. ANOTHER ISSUE WHICH WAS ALSO CONSIDERED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER IS REGARDING THE AG RICULTURAL INCOME DECLARED AT RS.10,56,000. THE ASSESSING OFFICER ASK ED FOR EVIDENCE FOR AGRICULTURAL LAND HOLDINGS AND ALSO AGRICULTURAL RE CEIPTS AND EXPENDITURE THEREON. ASSESSEE DID NOT FURNISH ANY E VIDENCE AND THE ASSESSING OFFICER, AFTER DISCUSSION WITH THE AUTHO RISED REPRESENTATIVE, WHO ACCEPTED THE AGRICULTURAL INCOME AT RS.8 LAKHS, DISALLOWED ADDITIONAL AMOUNT OF RS.2,36,000 (WRONGLY TAKEN AT THAT AMOUNT), WHICH WAS ALSO ACCEPTED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER. 5. HOWEVER, ASSESSEE CONTESTED BOTH THE ISSUES BE FORE THE LEARNED CIT(A). BEFORE THE LEARNED CIT(A), ASSESSE E STATED TO HAVE FILED CERTAIN RECEIPTS IN SUPPORT OF THE CLAIM OF B ROKERAGE AT RS.2 LAKHS AND COST OF IMPROVEMENT OF PROPERTY AT RS.5,20,000. HE FILLED CERTAIN DOCUMENTS IN SUPPORT OF THE CLAIM BY WAY OF QUOTATI ONS FROM SOME MAISTRIES AND ENTRIES IN A NOTE BOOK AS ADDITIONAL EVIDENCE. WITH REFERENCE TO THE AGRICULTURAL INCOME, ASSESSEE FILE D CERTAIN RECEIPTS ITA NO.1466/HYD/2014 SHRI K.S.N.RAJU, HYDERABAD 3 ADDRESSED TO THE ASSESSEE BY HIS ACCOUNTANT, DISPAT CHING MONEY ON SALE OF CERTAIN AGRICULTURAL PRODUCE. THIS ADDITION AL EVIDENCE WAS NOT CONSIDERED BY THE CIT(A), AS ASSESSEE HAS NEITHER E XPLAINED WHY THEY WERE NOT FILED BEFORE THE ASSESSING OFFICER, NOR MA DE ANY PRAYER FOR ADMISSION THEREOF BEFORE THE CIT(A). EVEN THOUGH T HE SAME WERE NOTED BY THE CIT(A) IN HER ORDER, THE LEARNED CIT(A ) DECLINED TO ADMIT THE ADDITIONAL EVIDENCE AND ACCORDINGLY DISMISSED T HE GROUNDS. 6. BEFORE US, ASSESSEES GROUNDS FROM 3 TO 6 PERT AIN TO CAPITAL GAINS AND 7 AND 8 PERTAIN TO AGRICULTURAL I NCOME AND GROUND NO.9 PERTAINS TO CHARGING OF INTEREST. GROUNDS NO. 1 AND 10 ARE GENERAL IN NATURE. 7. ADVERTING TO THE ORDERS OF THE AUTHORITIES AND PAPER-BOOK PLACED ON RECORD, IT WAS THE SUBMISSION OF THE LEAR NED COUNSEL THAT THE ASSESSEE DID SPEND THE AMOUNT TOWARDS BROKERAGE AND ALSO TOWARDS COMPOUND WALL AND CONSTRUCTION OF A HOUSE. IT WAS FAIRLY ADMITTED THAT THERE WAS NO ELECTRICITY NOR THERE WA S ANY PERMISSION FROM MUNICIPALITY FOR SUCH CONSTRUCTION. EVEN BEFOR E US, EXCEPT PLACING THE DOCUMENTS IN THE PAPER-BOOK THERE IS NO PRAYER FOR ADMISSION OF ADDITIONAL EVIDENCE. AS SEEN FROM THE DOCUMENTS PL ACED ON RECORD ALSO, THESE ARE NOT AUTHENTICATED DOCUMENTS AND THE RE IS NO SUPPORTING EVIDENCE TO TREAT THESE DOCUMENTS AS AUT HENTICATED ONES. EVEN THOUGH THERE ARE CERTAIN SIGNATURES ON THE DOC UMENTS, THEY CANNOT BE CONSIDERED AS EVIDENCE FOR THE FOLLOWING REASONS. (A) IDENTITY OF THE PERSONS WHO RECEIVED IS NOT ESTABLISHED; (B) PAYMENT OF CASH TOWARDS BROKERAGE IS NOT SUPPOR TED BY RELEVANT WITHDRAWALS OR SOURCES FOR THE AMOUNTS , ITA NO.1466/HYD/2014 SHRI K.S.N.RAJU, HYDERABAD 4 EVEN THOUGH THEY ARE BEEN STATED TO HAVE BEEN PAID BEFORE THE SALE OF THE PROPERTY. (C) RECEIPTS ALSO DO NOT CONTAIN ANY REVENUE STAMP, EVEN THOUGH THE AMOUNT OF PAYMENT IS MORE THAN RS.50,000. IN VIEW OF THAT, THE BROKERAGE RECEIPTS CANNOT BE A CCEPTED AS AUTHENTICATED DOCUMENTS, SO AS TO CONSIDER THEM IN THE COURSE OF APPELLATE PROCEEDINGS. 8. AS SEEN FROM THE ORIGINAL CLAIM ALSO, THE ASSE SSEE HAS CLAIMED ONLY RS.1,70,00 AS BROKERAGE, WHICH AMOUNT WAS INCREASED TO RS.2 LAKHS. HAD THESE RECEIPTS BEEN GENUINELY PAID AND RECEIVED AT THAT POINT OF TIME, THE ASSESSEE WOULD NOT HAVE MAD E ANY CLAIM AT INCORRECT AMOUNT OF RS.1,70,000. THEREFORE, THE AU THENTICITY OF THE RECEIPT ITSELF IS DOUBTFUL. AS ALREADY STATED, NO C ORROBORATIVE EVIDENCE IS FURNISHED, NOR THE RECEIPT HAS ANY REVENUE STAMP ON IT. IDENTITY OF THE RECIPIENT IS ALSO NOT ESTABLISHED. IN VIEW OF THIS, WE ARE NOT INCLINED TO CONSIDER THE ASSESSEES CLAIM OF THE PA YMENT FOR BROKERAGE. 9. COMING THE CLAIM OF IMPROVEMENTS AND DEVELOPME NT COST ON THE LAND, THE QUOTATION FROM SATYANARAYAN, MAIST RY PLACED AT PAGE 12 OF THE PAPER-BOOK TO THE EXTENT OF RS.5,20,000 INCLUDES SLAB WORTH RS.2 LAKHS, TOWARDS DOORS & WINDOWS AND ALSO COMPOU ND WALL OF RS.35,000. AGAINST THIS QUOTATION, NOTE BOOK ENTRIE S OF PAYMENTS FROM 20.4.1989 TO 30.9.1989 TO AN EXTENT OF RS.5,20,000 WERE PLACED IN THE PAPER BOOK FROM PAGES 13 TO 17. HERE ALSO, THERE I S NO AUTHENTICITY ABOUT THE PAYMENTS NOR IDENTITY OF THE PERSON, WHO WAS STATED TO HAVE RECEIVED THE AMOUNTS. AS ADMITTED, THE ASSESSEE HAS NOT OBTAINED PERMISSION FROM MUNICIPALITY FOR CONSTRUCTION OF TH E PROPERTY, NOR THERE IS ANY ELECTRICITY CONNECTION, EVEN THOUGH E LECTRICAL WORKS ARE ITA NO.1466/HYD/2014 SHRI K.S.N.RAJU, HYDERABAD 5 ALSO INCLUDED IN THE ESTIMATION TO THE EXTENT OF RS .8,000. IN ADDITION TO THE ABOVE AMOUNT OF RS.5,20,000, ASSESSEE ALSO PLAC ED IN THE PAPER- BOOK FROM PAGE NOS.18 TO 22 ANOTHER QUOTATION DATED 5.6.1997 TOWARDS PLASTERING, FLOORING, DOORS, WINDOWS ELECT RICAL WORKS, PLUMBING AND DRAINAGE WORKS, COMPOUND WALL, PAINTIN G INCLUDING GATE AND FIXING IN THE SECOND QUOTATION. WE ARE NOT SURE HOW MANY HOUSES ASSESSEE HAS CONSTRUCTED ON THE SAID LAND AND HOW M ANY TIMES HE HAS CONSTRUCTED, BECAUSE BOTH THE QUOTATIONS INVOLVE TH E SAME WORK AT DIFFERENT TIMES AND THE ASSESSEE CLAIMS TO HAVE INC URRED EXPENDITURE, AS PER THOSE PAPERS. IF SO MUCH AMOUNT IS INCURRED , SOURCES FOR THE AMOUNTS SHOULD HAVE BEEN MENTIONED IN EVIDENCE OF T HE PAYMENTS. NOTHING WAS DONE BY THE ASSESSEE. IN FACT, WHEN TH E ASSESSING OFFICER ASKED FOR EVIDENCE, NOTHING WAS PLACED ON RECORD, I NDICATING THAT THIS COULD BE AN AFTERTHOUGHT, ONCE THE ASSESSEE CAME TO KNOW THAT HE HAS TO OFFER HIGHER CAPITAL GAINS BECAUSE THE ASSESSEE HAS TAKEN SALE CONSIDERATION AT A LESSER AMOUNT IN THE ORIGINAL R ETURN. EVEN THOUGH THERE ARE CERTAIN CLAIMS MADE IN THE ORIGINAL COMPU TATION ITSELF, SINCE THEY ARE NOT SUPPORTED BY ANY EVIDENCE, WE ARE OF T HE OPINION THAT THE ASSESSING OFFICER HAS RIGHTLY DISALLOWED THE SAME. WHEN THESE WERE POINTED OUT TO THE LEARNED COUNSEL, IN THE COURSE O F ARGUMENTS, HE HAS SUBMITTED THAT THE ASSESSING OFFICER COULD HAVE DIS ALLOWED SOME AMOUNT AND ALLOWED THE BALANCE. THIS ITSELF INDICAT ES THAT THERE IS NO GENUINENESS IN THE CLAIM. THEREFORE, WE ARE NOT INC LINED TO CONSIDER THE ASSESSEES CONTENTION ON THE ABOVE TWO CLAIMS, AS ALREADY STATED, SINCE THE DOCUMENTS WERE NOT ADMITTED BY THE CIT(A) AS ADDITIONAL EVIDENCE, THIS FORUM ALSO CANNOT ADMIT THE SAME AS THE DOCUMENTS, IN THE ABSENCE OF ANY PRAYER FOR ADMISSION AS ADDITION AL EVIDENCE. IN VIEW OF THIS, WE UPHOLD THE ORDERS OF THE FIRST AP PELLATE AUTHORITY, AND REJECT THE ASSESSEES GROUNDS RAISED FROM GROUNDS 3 TO 6 ON THE ISSUE OF THESE TWO CLAIMS. ITA NO.1466/HYD/2014 SHRI K.S.N.RAJU, HYDERABAD 6 10. ON THE ISSUE OF AGRICULTURAL INCOME, EVEN THO UGH THE ASSESSEE IS ABLE TO ESTABLISH THAT HE HAS AGRICULTU RAL LANDS, ON WHICH THERE IS AGRICULTURAL INCOME, WHAT IS IN DISPUTE IS THE QUANTUM OF AGRICULTURAL INCOME EARNED BY THE ASSESSEE. ASSESSI NG OFFICER SPECIFICALLY ASKED FOR THE EVIDENCE OF THE SAME, WH ICH WERE NOT FURNISHED TO THE ASSESSING OFFICER AT THE TIME OF A SSESSMENT. IT IS ALSO ON RECORD THAT THE AUTHORISED REPRESENTATIVE HAS A GREED FOR THE DISALLOWANCE, BY RESTRICTION OF AGRICULTURAL INCOM E TO AN AMOUNT OF RS.8 LAKHS, WHICH, IN OUR VIEW, IS FAIR AND REASONA BLE. AS STATED ABOVE, THE ASSESSEE HAS FURNISHED CERTAIN EVIDENCE OF TRAN SFER OF MONEY FROM TUNI AND VIZAG TO THE ASSESSEE, BUT IT DOES NOT EST ABLISH THAT THESE AMOUNTS ARE INDICATIVE OF THE AGRICULTURAL OPERATIO NS BY THE ASSESSEE TO THAT EXTENT. MOREOVER, THE LEARNED CIT(A) FINDS THAT THE AUTHORISED REPRESENTATIVE SUBMITTED THAT THE AGRICULTURAL LAN D HAS BEEN LEASED OUT TO VARIOUS PARTIES AND FILED CONFIRMATION FROM THE LESSORS. BUT, AS SEEN FROM THE DOCUMENTS PLACED IN THE PAPER-BOOK, T HESE ARE NOT LEASE RENTALS RECEIVED FROM THE AGRICULTURAL LANDS, BUT SALE PROCEEDS, WHICH ARE STATED TO HAVE BEEN TRANSFERRED FROM THE PLACE OF AGRICULTURAL LANDS TO THE ASSESSEE THROUGH CLERK. WE ARE NOT SURE WHETHER THE ASSESSEE IS CULTIVATING THE LANDS OR LE ASED OUT THE AGRICULTURAL LANDS TO SOME THIRD PARTIES. THERE IS ALSO NO CLARITY FROM THE ASSESSEE AS TO THE ACTUAL ACTIVITIES. IN THE ABSENCE OF ANY EVIDENCE TO DIFFER FROM THE FINDINGS OF THE ASSESSI NG OFFICER AND THE CIT(A), WE ARE NOT INCLINED TO DISTURB THEIR FINDIN GS. WE ACCORDINGLY UPHOLD THEIR ORDERS AND REJECT THE GROUNDS OF THE A SSESSEE ON THIS ISSUE. 11. GROUND NO.9 OF THE ASSESSEE RELATING TO CHARGI NG OF INTEREST UNDER S.234B AND 234C IS MERELY CONSEQUENTIAL AND N EEDS NO SEPARATE ADJUDICATION. ITA NO.1466/HYD/2014 SHRI K.S.N.RAJU, HYDERABAD 7 12. IN THE RESULT, ASSESSEES APPEAL IS DISMISSED . ORDER PRONOUNCED IN THE COURT ON 01.03.2016 SD/- SD/- (B.RAMAKOTAIAH) (D.MANMOHAN) ACCOUNTANT MEMBER. VICE PRESIDENT DT/- 01 MARCH, 2016 COPY FORWARDED TO: 1. SHRI K.S.N.RAJU ( HYDERABAD) C/O. SHRI S.RAMA RAO, FLAT NO.102, SHIRYA'S ELEGANCE, NO.3-6-643, STREET NO.9, HIMAYATNAGAR, HYDERABAD 500029 2. DY. COMMISSIONER OF INCOME - TAX CIRCLE 6(1), HYDERABAD 3. COMMISSIONER OF INCOME - TAX(APPEALS) IV, HYDERABAD 4. COMMISSIONER OF INCOME - TAX III, HYDERABAD 5. DEPARTMENTAL REPRESENTATIVE ITAT, HYDERABAD B.V.S.