Sudarshan Aluvala, Hyderabad, Hyderabad V. ITO, Ward-2(2), Hyderabad, Hyderabad

ITA 1472/HYD/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2335 (ITAT-HYDERABAD)
• Duration Of Justice: 8 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 10-07-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 01-11-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: L R AMJI RAO
• Assessee Lawyers: GVSS MURTHY
• Section: 144; 92

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ITA NO. 1472/HYD/2016 ASSESSMENT YEAR: 2010-11 SHRI SUDARSHAN ALUVALA, HYDERABAD-500070. PAN ADXPA8686L VS. THE INCOME TAX OFFICER, WARD-12(2) HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI G.V.S.S MURTHY REVENUE BY : SHRI L. RAMJI RAO DATE OF HEARING : 10-07-2017 DATE OF PRONOUNCEMENT : 13-07-2017 ORDER PER D.S. SUNDER SINGH, A.M: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT (A)-1, HYDERABAD FOR THE ASSESSMENT YEAR 2010- 2011. 2. IN THIS APPEAL, ASSESSEE RAISED FOUR GROUNDS IN TOTO. GROUND NO. 1 AND 3 ARE RELATED TO THE ADDITION ON ACCOUNT OF CASH DEPOSITS IN THE SAVINGS BANK ACCOUNT DURING THE PREVIOUS YEAR RELATED TO THE A.Y 2010-11. DURING THE ASSESSMENT PROCEEDINGS, A.O FOUND CASH DEPOSITS OF RS. 33,13,500/- IN THE SAVINGS BANK ACCOUNT OF THE ASSESSEE. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY AND NOTICES WERE ISSUED BY THE A.O BUT, THERE WAS NO RESPONSE FROM THE ASSESSEE. SINCE, THERE WAS NO RESPONSE FROM THE ASSESSEE, THE A.O TREATED THE ENTIRE CASH DEPOSITS AS 2 ITA NO. 1472/HYD/2016 SHRI SUDARSHAN ALUVALA, HYDERABAD. UNEXPLAINED AND ADDED BACK TO THE INCOME AND PASSED THE ASSESSMENT ORDER U/S 144 OF THE IT ACT. 3. AGGRIEVED BY THE ORDER OF THE A.O, THE ASSESSEE WENT ON APPEAL BEFORE THE CIT(A). 4. DURING THE APPEAL PROCEEDINGS BEFORE THE LD. CIT(A), THE ASSESSEE STATED THAT THE CASH DEPOSITS WERE MADE OUT OF THE SALE PROCEEDS OF THE PROPERTY SOLD BY HIS WIFE SMT. VANAJA. THE LD. CIT(A) EXAMINED THE CONTENTIONS OF THE ASSESSEE AND ALSO THE SALE DEED PRODUCED BY THE ASSESSEE. AS PER THE SALE DEED, THE PROPERTY OF ASSESSEES WIFE WAS SOLD ON 14/10/2009 FOR CONSIDERATION RS. 20,23,500/-, HENCE THE CIT(A) ALLOWED THE CREDIT FOR RS. 20,23,500/- AS RECEIPTS FROM SALE OF THE PROPERTY OF HIS WIFE SMT. VANAJA AND DIRECTED THE A.O TO ASSESS THE BALANCE AMOUNT OF RS. 12.90 LAKHS AS UNEXPLAINED CASH DEPOSITS. ACCORDINGLY, THE CIT(A) ALLOWED PARTIAL RELIEF TO THE ASSESSEE. 5. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US. 6. LD AR, APPEARING FOR THE ASSESSEE, ARGUED THAT THE ASSESSEES WIFE SMT. VANAJA SOLD HER PROPERTY FOR A CONSIDERATION OF RS. 32.00 LAKHS AND THE SAME WAS DEPOSITED IN THE ASSESSEES SAVINGS BANK ACCOUNT. THE ENTIRE DEPOSITS WERE RELATED TO SALE OF THE PROPERTY AND FOR THE SAKE OF REGISTRATION THE CONSIDERATION WAS DECLARED AT RS. 20.23 LAKHS IN REGISTERED DOCUMENT AND THE LD A.R ARGUED THAT IT IS A COMMON PRACTICE IN IMMOVABLE PROPERTY TRANSACTIONS TO REDUCE THE STAMP DUTY HENCE, THE LD. AR ARGUED THAT THE SOURCE SHOULD BE ACCEPTED AS THE SALE 3 ITA NO. 1472/HYD/2016 SHRI SUDARSHAN ALUVALA, HYDERABAD. PROCEEDS OF THE WIFES PROPERTY AND ACCORDINGLY, THE ADDITION MADE BY THE A.O SHOULD BE DELETED. IN THIS REGARD, THE ASSESSEE FURNISHED THE SALE DEED AND ALSO AN AFFIDAVIT FROM SMT. VANAJA. THE LD. AR FURTHER ARGUED THAT THE A.O ERRED IN MAKING THE ASSESSMENT IN THE HANDS OF THE ASSESSEE WHEN THE DEPOSITS WERE BELONGING TO SMT. VANAJA. IF AT ALL, ANY ASSESSMENT HAS TO BE MADE, THE SAME SHOULD BE ASSESSED IN THE HANDS OF SMT VANAJA, WIFE OF ASSESSEE BUT NOT IN THE HANDS OF THE ASSESSEE. 7 ON THE OTHER HAND, THE LD. DR ARGUED THAT IT IS EVIDENT FROM THE SALE DEED THAT THE PROPERTY WAS SOLD FOR A CONSIDERATION OF RS. 20,23,500/- WHICH WAS DECLARED AND SIGNED BY THE ASSESSEE IN THE REGISTERED SALE DOCUMENT AND WITNESSED BY THE VARIOUS PARTIES. SINCE, THE DOCUMENT WAS REGISTERED AND BOTH THE PARTIES HAVE ACCEPTED THE SALE CONSIDERATION, NO OTHER EVIDENCE IS REQUIRED TO PROVE THE ACTUAL CONSIDERATION WAS RS. 20.23 LAKHS. THE LD. DR FURTHER ARGUED THAT THE ASSESSEE HAS NOT FURNISHED ANY EVIDENCE TO PROVE THE SALE CONSIDERATION OF RS. 32.00 LAKHS EXCEPT SELF-SERVING STATEMENT FILED BY ASSESSEES WIFE. THE LD. AR OF THE ASSESSEE DID NOT FILE ANY EVIDENCE REGARDING THE ADMISSION OF THE SALE CONSIDERATION AT RS. 32.00 LAKHS IN HER RETURNS OF INCOME AND NO EVIDENCE WAS FURNISHED BY THE ASSESSEE FROM THE PURCHASER HAVING ADMITTED THE PURCHASE CONSIDERATION AT RS.32.00 LACS AND THE SOURCES THEREOF. THEREFORE, THE CONTENTION OF THE ASSESSEE THAT THE SALE CONSIDERATION WAS RS. 32.00 LAKHS IS UNFOUNDED AND CANNOT BE ACCEPTED. WITH REGARD TO THE SECOND ARGUMENT OF THE ASSESSEE THAT THE ENTIRE DEPOSITS ARE RELATED TO THE SALE 4 ITA NO. 1472/HYD/2016 SHRI SUDARSHAN ALUVALA, HYDERABAD. OF THE HOUSE BELONGING TO THE ASSESSEES WIFE SMT. VANAJA HENCE, THE SAME SHOULD BE ASSESSED IN THE HANDS OF SMT. VANAJA, IS ALSO NOT ACCEPTABLE, SINCE, THE DEPOSITS ARE MADE IN THE ASSESSEES BANK ACCOUNT. PRIMA FACIE , THE DEPOSITS IN THE BANK ACCOUNT OF THE ASSESSEE REQUIRED TO BE EXPLAINED BY THE ASSESSEE WITH THE TANGIBLE EVIDENCE. FROM THE PAPER BOOK FILED BY THE ASSESSEE, IT IS EVIDENT THAT AS PER THE RETURN OF INCOME OF SMT. VANAJA, SHE HAS NOT ADMITTED THE CAPITAL GAINS IN HER HANDS THOUGH THE SALE OF PROPERTY ATTRACTS THE CAPITAL GAINS TAX. THEREFORE THE LD. DR CONTENDED THAT THE ONUS IS ON THE ASSESSEE PROVE THE SOURCES OF THE ENTIRE CASH DEPOSITS MADE IN HIS SAVINGS BANK. IN THE ABSENCE OF THE SAME, THE A.O HAS RIGHTLY ASSESSED THE SAID DEPOSITS IN THE HANDS OF THE ASSESSEE AND ARGUED THAT NO INTERFERENCE IS CALLED FOR IN THE ORDER OF THE LD. CIT(A) ON THIS ISSUE. 8 WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL PLACED ON RECORD. THE ASSESSEE IS HAVING SAVINGS BANK ACCOUNT IN ING VYSYA BANK AND DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR 2010-2011, THE ASSESSEE HAS MADE CASH DEPOSITS OF RS. 33.13 LAKHS WHICH WAS NOT DISPUTED BY THE ASSESSEE. THE AMOUNT OF RS. 19 LAKHS CREDITED INTO THE BANK ACCOUNT BY CASH ON 14-09- 2009; A SUM OF RS. 3,99,500/- WAS PAID INTO THE ACCOUNT ON 15-09-2009 AND A SUM OF RS. 2,000/- WAS PAID ON 07- 09-2009 IN ALL AGGREGATING TO 33.13 LACS.THE AMOUNTS WERE PAID INTO THE BANK ACCOUNT OF THE ASSESSEE BY CASH. THEREFORE, THE SOURCE OF CASH DEPOSITS ARE REQUIRED TO BE EXPLAINED BY THE ASSESSEE WITH TANGIBLE EVIDENCE. IN THIS 5 ITA NO. 1472/HYD/2016 SHRI SUDARSHAN ALUVALA, HYDERABAD. CASE, THE ASSESSEE EXPLAINED THAT THE ENTIRE SOURCE WAS PERTAINING TO THE SALE OF PROPERTY OF HIS WIFE SMT. VANAJA. AS PER SALE DEED DATED 14-10-2009, THE ASSESSEES WIFE HAS RECEIVED A SUM OF RS. 20,23,500/- AND CLAIMED TO BE THE SOURCE FOR THE DEPOSITS IN THE BANK ACCOUNT OF THE ASSESSEE. THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) WITH REGARD TO ACCEPTING THE SOURCE OF RS. 20.23 LAKHS. WITH REGARD TO THE BALANCE AMOUNT OF RS. 12.90 LAKHS, THE ASSESSEE CLAIMED THAT THE SAME WAS ALSO RECEIVED BY SALE OF THE PROPERTY, BY HIS WIFE VIDE SALE DEED DATED 14-10-2009. THE REGISTERED SALE DOCUMENT SHOWS THAT THE SALE CONSIDERATION WAS RS. 20.23 LAKHS BUT NOT RS. 33.13 LAKHS. THE REGISTERED SALE DEED IS A VALID AND UNDISPUTED EVIDENCE AS FOR AS SALE CONSIDERATION IS CONCERNED. SINCE, BOTH THE PARTIES OF THE PURCHASER AND SELLER HAVE ACCEPTED AND REGISTERED THE DOCUMENT FOR THE SALE CONSIDERATION BEFORE THE SUB-REGISTRAR THE SAME CANNOT BE DISPUTED AND BINDING ON BOTH THE PARTIES. NO OTHER EVIDENCE WAS FILED BY THE ASSESSEE EXPLAINING THE SOURCE FOR THE REMAINING AMOUNT OF RS.12.90 LACS. SIMILARLY, HIS WIFE ALSO DID NOT ADMIT THE CAPITAL GAINS IN HER RETURN FOR RS. 32 LAKHS OF SALE CONSIDERATION. THUS THE ASSESSEES CONTENTION THAT FOR THE PAYMENT OF STAMP DUTY, THE SALE DOCUMENT WAS REGISTERED FOR RS. 20.23 LAKHS THOUGH THE FACTUAL CONSIDERATION WAS 32.00 LAKHS IS NOT ACCEPTABLE. IT IS A SETTLED PRINCIPLE THAT ASSESSEE CANNOT EVADE STAMP DUTY OTHER TAXES FOR TRANSFER OF PROPERTY AND CLAIM EXEMPTION FROM INCOME TAX ACT BY CLAIMING EXCESS CONSIDERATION AND SUCH DOUBLE STANDARDS ARE NOT ACCEPTABLE AS HELD BY HONBLE SUPREME COURT IN THE CASE OF 6 ITA NO. 1472/HYD/2016 SHRI SUDARSHAN ALUVALA, HYDERABAD. COIMBATORE SPINNING & WEAVING CO. LTD . IN 95 ITR 375(SC). FURTHER HONBLE HIGH COURT OF PUNJAB AND HARYANA IN [2010] 195 TAXMAN 273 (PUNJ. & HAR.). PARMIJIT SINGH. V. INCOME-TAX OFFICER ON SIMILAR FACTS HELD THAT: IT IS A WELL-KNOWN PRINCIPLE THAT NO ORAL EVIDENCE IS ADMISSIBLE ONCE THE DOCUMENT CONTAINS ALL THE TERMS AND CONDITIONS. SECTIONS 91 AND 92 OF THE INDIAN EVIDENCE ACT, 1872 INCORPORATE THE AFORESAID PRINCIPLE. ACCORDING TO SECTION 91, WHEN TERMS OF A CONTRACT, GRANTS OR OTHER DISPOSITIONS OF PROPERTY HAVE BEEN REDUCED TO THE FORM OF DOCUMENTS, THEN NO EVIDENCE IS PERMISSIBLE TO BE GIVEN IN PROOF OF ANY SUCH TERMS OF SUCH GRANT OR DISPOSITION OF THE PROPERTY EXCEPT THE DOCUMENT ITSELF OR THE SECONDARY EVIDENCE THEREOF. ACCORDING TO SECTION 92, ONCE THE DOCUMENT IS TENDERED IN EVIDENCE AND PROVED AS PER THE REQUIREMENTS OF SECTION 91, THEN NO EVIDENCE OF ANY ORAL AGREEMENT OR STATEMENT WOULD BE ADMISSIBLE AS BETWEEN THE PARTIES TO ANY SUCH INSTRUMENT FOR THE PURPOSES OF CONTRADICTING, VARYING, ADDING TO OR SUBTRACTING FROM ITS TERMS. THEREFORE, IT FOLLOWS THAT NO ORAL AGREEMENT CONTRADICTING/VARYING THE TERMS OF A DOCUMENT CAN BE OFFERED. ONCE THE AFORESAID PRINCIPAL IS CLEAR, THEN IN THE INSTANT CASE, OSTENSIBLE SALE CONSIDERATION DISCLOSED IN THE SALE DEED HAD TO BE ACCEPTED AND IT COULD NOT BE CONTRADICTED BY ADDUCING ANY ORAL EVIDENCE. THEREFORE, THE ORDER OF THE TRIBUNAL DID NOT SUFFER FROM ANY LEGAL INFIRMITY IN REACHING TO THE CONCLUSION THAT THE AMOUNT SHOWN IN THE REGISTERED SALE DEED WAS RECEIVED BY THE VENDORS AND DESERVED TO BE ADDED TO THE GROSS INCOME OF THE ASSESSEE. [PARA 4]. 9 IN THE INSTANT CASE SALE DEED WAS REGISTERED WITH ALL THE TERMS AND CONDITIONS OF SALE WHICH IS A CONCLUSIVE PROOF OF SALE CONSIDERATION AND SQUARELY COVERED BY THE DECISION CITED (SUPRA) AND NO OTHER EVIDENCE WAS PROVIDED BY THE LD. A.R. EXPLAINING THE SOURCE FOR THE REMAINING AMOUNT OF 12.90.LACS. 10 IN THE ASSESSEES CASE ASSESSEE DID NOT EXPLAIN THE SOURCE FOR RS. 12.90 LAKHS CREDITED IN HIS BANK ACCOUNT. THEREFORE, WE HOLD THAT THE CIT(A) HAS RIGHTLY DIRECTED THE A.O TO TAX THE AMOUNT OF RS. 12,90,000/- AS UNEXPLAINED CASH DEPOSIT AND ACCORDINGLY WE DISMISS GROUND NOS. 1 AND 3 OF THE ASSESSEE. 7 ITA NO. 1472/HYD/2016 SHRI SUDARSHAN ALUVALA, HYDERABAD. 11. GROUND NO. 2 IS RELATED TO THE ASSESSMENT OF INCOME IN THE HANDS OF THE ASSESSEE INSTEAD OF SMT.VANAJA HIS WIFE. THE LD. AR ARGUED THAT THE ASSESSEES WIFE HAS SOLD THE PROPERTY AND THE LD. CIT(A) HAS DIRECTED THE A.O TO TAX THE SHORT TERM CAPITAL GAINS RESULTING ON SALE PROPERTY IN THE HANDS OF THE ASSESSEE WHICH IS NOT CORRECT. DURING THE FIRST APPELLATE PROCEEDINGS, THE LD. CIT(A) EXAMINED THE CASE AND MADE ENHANCEMENT IN THE HANDS OF THE ASSESSEE TOWARDS SHORT TERM CAPITAL GAINS. IT WAS OBSERVED BY THE LD. CIT(A) THAT THE ASSESSEES WIFE HAD PURCHASED THE PROPERTY FOR RS. 8,74,000/- ON 17-09-2008 AND SOLD THE PROPERTY ON 14-10-2009 BUT NOT ADMITTED THE RESULTANT CAPITAL GAINS IN HER HANDS. THEREFORE, THE CIT(A) HAS DIRECTED THE A.O TO ASSESS THE SHORT TERM CAPITAL GAINS OF RS. 11,17,500/- IN THE HANDS OF THE ASSESSEE, WHICH IS IN APPEAL BEFORE US. 12. DURING THE APPEAL PROCEEDINGS BEFORE US, LD AR APPEARING FOR THE ASSESSEE ARGUED THAT THE PROPERTY WAS BELONGING TO SMT. VANAJA, ACQUIRED BY HER (SMT VANAJA) FROM HER OWN SOURCES AND SOLD BY HER. ONLY SALE PROCEEDS WERE DEPOSITED IN THE BANK ACCOUNT OF THE ASSESSEE. SINCE, THE PROPERTY WAS BELONGING TO THE ASSESSEES WIFE, SMT VANAJA, WHICH IS EVIDENT FROM THE PURCHASE DOCUMENT AND THE SALE DOCUMENT, THE CAPITAL GAINS, IF ANY, REQUIRED TO BE ASSESSED IN THE HANDS OF SMT VANAJA, BUT NOT IN THE HANDS OF THE ASSESSEE. 13. ON THE OTHER HAND, THE LD. DR RELIED ON THE ORDERS OF THE LD.CIT(A). 8 ITA NO. 1472/HYD/2016 SHRI SUDARSHAN ALUVALA, HYDERABAD. 14. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. BOTH THE PURCHASE AND SALE DOCUMENTS CLEARLY SHOW THAT THE PROPERTY WAS ACQUIRED BY SMT VANAJA, WIFE OF THE ASSESSEE, ON 17-09-2008 AND THE SAME WAS SOLD BY HER ON 14-10-2009. THE LD. AR SUBMITTED THAT THE PROPERTY WAS ACQUIRED FROM THE SOURCE OF SMT VANAJA BUT NOT OF THE ASSESSEE. LD. DR DID NOT CONTROVERT THE ABOVE FACTS. THE LD. DR ALSO DID NOT PLACE ANY EVIDENCE REGARDING THE BENEFICIAL OWNERSHIP TO MAKE ASSESSEMENT IN THE HANDS OF THE ASSESSEE. THEREFORE, WE HOLD THAT THE CAPITAL GAINS, IF ANY, SHOULD BE ASSESSED IN THE HANDS OF THE OWNER OF THE PROPERTY I.E SMT VANAJA BUT, NOT IN THE HANDS OF THE ASSESSEE. ACCORDINGLY, WE DELETE THE ENHANCEMENT MADE BY THE LD. CIT(A) AND THE GROUND NO.2 RAISED BY THE ASSESSEE IS ALLOWED. 15 GROUND NOS. 4 AND 5 ARE GENERAL IN NATURE AND NO ARGUMENTS ARE ADVANCED BY THE ASSESSEE ON THESE GROUNDS. THEREFORE, THESE GROUNDS DID NOT REQUIRE SEPARATE ADJUDICATION AND THE SAME ARE DISMISSED. 16. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON 13 TH JULY, 2017. SD/- SD/- (V. DURGA RAO) (D.S. SUNDER SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED: 13 TH JULY, 2017. KRK