ITO, Ward - 55(1), Kolkata, Kolkata V. Kamal Kumar Bansal, L/R of Late R.D. Bansal, Kolkata

ITA 1490/KOL/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62116 (ITAT-KOLKATA)
• Duration Of Justice: 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2012
• Appeal Filed By: Department
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 04-11-2011
• Court: TRIBUNAL
• Department Lawyers: B K DAS
• Keywords: Fair market value; Valuation report

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH B , KOLKATA [ () . .. . . .. . , ,, , , !' ##$ %& ##$ %& ##$ %& ##$ %& ] ]] ] [BEFORE HONBLE SRI C.D.RAO, AM & HONBLE SRI GE ORGE MATHAN, JM] '( '( '( '( /ITA NO.1490/KOL/2011 )&* +,/ ASSESSMENT YEAR : 2005-06 (%. / APPELLANT ) - & - ( 01%. /RESPONDENT) I.T.O., WARD-55(1), . KAMAL KUMAR BANSAL KOLKATA -VERSUS- L/R OF LATE R.D.BANSAL KOLKATA (PAN:AEIPB 8145 H) %. 2 3 / FOR THE APPELLANT: SHRI B.K.DAS 01%. 2 3 / FOR THE RESPONDENT: SHRI SUBASH AGARWAL 4&5 2 /DATE OF HEARING : 07.05.2012. 6+ 2 /DATE OF PRONOUNCEMENT : 08.06.2012. 7 / ORDER ( (( ( . .. . . .. . ) )) ), , , , PER SHRI C.D.RAO, AM THIS IS AN APPEAL FILED BY THE REVENUE AGAINST ORDE R DATED 08.08.2011 OF CIT(A) XXXVI, KOLKATA PERTAINING TO A.YR. 2005-06. 2. THE ONLY ISSUE RAISED BY THE REVENUE IS RELATIN G TO THE DELETION OF ADDITION OF RS.21,98,141/- MADE BY AO ON ACCOUNT OF EXPENDITURE INCURRED IN THE JOINT VENTURE OF M/S.TIVOLI FINVEST PVT. LTD. 3. AT THE OUTSET, THE LD. COUNSEL APPEARING ON BEHA LF OF ASSESSEE HAS SUBMITTED THAT IN THE CASE OF SAROJ RANI BANSAL, SINCE THE RE VENUE HAS ACCEPTED THE CONTENTION OF ONE OF THE ASSESSEE WHO IS A PARTICIPANT IN THE JOI NT VENTURE OF M/S.TIVOLI FINVEST PVT. LTD AND THE REVENUE HAS NOT CONTESTED THE SAME BEFO RE THE APPELLATE AUTHORITIES. IN THE CASE OF ASSESSEE WHO IS ALSO A CO-PARTICIPANT IN TH E JOINT VENTURE OF M/S.TIVOLI FINVEST PVT. LTD THE REVENUE IS NOT JUSTIFIED IN FILING THE APPEAL. HE FURTHER RELIED ON THE ORDERS OF THE HONBLE APEX COURT IN THE CASE OF UNION OF I NDIA AND OTHERS VS KAUMUDINI 2 NARAYAN DALAL AND OTHERS REPORTED IN 249 ITR 219 (S C)AND FURTHER IN THE CASE OF BERGER PAINTS INDIA LIMITED VS CIT 266 ITR 99 (SC) . HE REQUESTED TO DISMISS THE APPEAL OF THE REVENUE. 4. ON THE OTHER HAND THE LD. DR APPEARING ON BEHALF OF THE REVENUE HAS NOT CONTROVERTED THE SUBMISSIONS MADE BY THE LD. COUNSE L FOR ASSESSEE. 5. AFTER HEARING THE RIVAL SUBMISSIONS AND ON CAREF UL PERUSAL OF MATERIALS AVAILABLE ON RECORD, IT IS OBSERVED THAT IN THE CAS E OF SAROJ RANI BANSAL THE LD. CIT(A) HAS DELETED ADDITION OF RS.21,12,859/- BY OBSERVING AT PARAS 5.3 AND 5.4. WHICH ARE AS UNDER : (5.3) THE APPELLANT HAS FILED HERE RETURN OF INCO ME FOR A.Y.2005-06. IN THE RETURN OF INCOME, THE APPELLANT HAS SHOWN LONG TERM CAPITAL G AIN AMOUNTING TO RS.26,61,394!- WHICH WAS ARRIVED BY DEDUCTING INDEX COST OF THE PR OPERTY FROM THE FMV OF LAND I.E. RS.43,11,000/- (1/3 OF RS.1,29,33,000/-). IN THE R ETURN, THE APPELLANT HAS ALSO SHOWN LOSS UNDER THE HEAD INCOME FROM BUSINESS ON ACCOUNT OF RDB CHAMBERS AT RS.21,12,859/-. THE SAID LOSS WAS COMPUTED BY THE A PPELLANT BY DEDUCTING FMV OF THE LAND I.E. RS.43,11,000/- FROM THE RECEIPTS FROM RDB CHAMBERS AMOUNTING TO RS.21,98,141/-.IN THE ASSESSMENT ORDER THE AO HAS D ISALLOWED THE LOSS-OF RS.21,12,859!- AS STATED (SUPRA) FOR THE REASONS TH AT THE ASSESSEE HAS FAILED TO DISCHARGE HER ONUS TO SUBSTANTIATE HER CLAIM OF LESS AMOUNTIN G TO RS.21,12,859/-. FROM THE RECORDS AND ASSESSMENT ORDER IT IS APPARENT THAT THE APPELL ANT HAD FILED A COPY OF AGREEMENT ENTERED INTO BETWEEN THREE CO-OWNERS OF THE PROPERT Y, COPY OF VALUATION REPORT OF VALUER FOR DETERMINATION OF MARKET VALUE OF THE PROPERTY A ND HER LEDGER EXTRACTS IN THE BOOKS OF M/S.TIVOLI FINVEST RELATING TO THE CONSTRUCTION ACT IVITY OF THE BUILDING AND THE SURPLUS ARRIVED ON. IT IS OBSERVED THAT THE AO HAS NOT DISP UTED THE FMV OF LAND AND ACCORDINGLY HE HAS TAXED THE LONG TERM CAPITAL GAIN AS DECLARED BY THE APPELLANT IN HER RETURN OF INCOME. IT IS ALSO APPARENT THAT THE AO HAS NOT DIS PUTED THE FACT THAT THE SURPLUS OF RS.21,98,141/- RECEIVED BY THE APPELLANT BEING L/3 RD SHARE FROM M/S.TIVOLI FINVEST WAS ARRIVED WITHOUT DEDUCTION THE MARKET VALUE OF THE L AND. ONCE, THE AO WAS SATISFIED THAT THE SURPLUS OF RS.21,98,141/- WAS WITHOUT DEBITING THE COST OF LAND, ON WHICH BUILDING CONSTRUCTED THEN AS PER THE PROVISIONS OF THE ACT, TO ARRIVE AT THE BUSINESS OR BUSINESS LOSS, THE COST OF LAND HAS TO BE DEDUCTED AS AN EXP ENDITURE. IN THE APPELLANTS CASE, AFTER DOING SO, THE NET RESULT WAS BUSINESS LOSS. THE SAI D LOSS CANNOT BE DISALLOWED MERELY FOR THE REASONS THAT THE APPELLANT HAS NOT PRODUCED THE BOOKS, WHICH AS PER AGREEMENT, WERE MAINTAINED BY M/S. TIVOLI FINVEST, THE AO HAS NOT DISPUTED THAT AS PER THE PROVISIONS OF THE I.T.ACT THE APPELLANT WAS NOT ENTITLED TO CL AIM THE DEDUCTION OF FMV OF LAND FROM THE RECEIPTS FROM RDB CHAMBERS. IT IS ALSO NOT THE STAND OF THE A.O. THAT THE RECEIPTS OF RS.21,98,141/- WERE DOUBTFUL AND IN THE ABSENCE OF BOOKS OF ACCOUNTS HE HAS ESTIMATED OR ENHANCED THE RECEIPTS FROM RDB CHAMBER S. WHEN ALL THE FIGURES AND AMOUNTS HAS BEEN ACCEPTED BY THE A.O., THERE WAS NO LOGIC FOR DISALLOWANCE OF GENUINE LOSS CLAIMED BY THE APPELLANT. 5.4. HAVING DISCUSSED AS ABOVE, I AM OF THE OPINION THAT THE AO WAS NOT JUSTIFIED IN DISALLOWING THE LOSS AS CLAIMED BY ASSESSEE. IF THE STAND OF THE AO IS ACCEPTED, IT WOULD MEAN THAT THE AO HAS ACCEPTED THE AMOUNT OF RECEIPT S FROM RDB CHAMBERS AMOUNTING TO RS.21,98,141/- AND HAS ALLOWED THE DEDUCTION ON ACCOUNT OF FMV OF LAND ONLY TO THE 3 EXTENT OF RECEIPT FROM RDB CHAMBERS. THE SAID ACTIO N OF THE AO IS NOT LEGALLY CORRECT AND DESERVES TO BE REJECTED. THE AO IS DIRECTED TO ALLOW THE BUSINESS LOSS OF RS.21,12,859/- CLAIMED BY THE APPELLANT. THE GROUND NO.1 IS ALLOWED. THE REVENUE HAS NOT FILED ANY APPEAL AGAINST THE SA ID DECISION OF LD. CIT(A) IN THE CASE OF SAROJ RANI BANSAL. SINCE THE FACTS OF THE P RESENT CASE ARE SIMILAR TO THAT OF THE ONE IN WHICH THE LD. CIT(A) HAS DELETED THE ADDITIO N AND THE REVENUE HAS NOT FILED THE SUBSEQUENT APPEAL TO ITAT, WE ARE OF THE VIEW THAT THE RATIO LAID DOWN BY THE HONBLE APEX COURT IN THE CASES REFERRED BY THE LD. COUNSEL FOR ASSESSEE ARE SQUARELY APPLICABLE TO THE PRESENT FACTS OF THE CASE. THEREF ORE, RESPECTFULLY FOLLOWING THE RATIO LAID DOWN BY THE HONBLE APEX COURT IN THE CASES CI TED SUPRA WE DISMISS THE APPEAL OF REVENUE KEEPING IN VIEW OF THE FACT THAT UNDER THE SIMILAR CIRCUMSTANCES THE REVENUE HAS NOT FILED ANY APPEAL AGAINST THE REVENUE IN THE CASE OF SAROJ RANI BANSAL. 6. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMI SSED. ORDER PRONOUNCED IN THE COURT ON 08.06.2012. SD/- SD/- [ .##$ %& , ] [ .., ] [ GEORGE MATHAN ] [ C. D. RAO ] JUDICIAL MEMBER ACCOUNTANT MEMBER ( (( ( ) )) ) DATE: 08.06.2012. R.G.(.P.S.) 7 2 0))8 98+:- COPY OF THE ORDER FORWARDED TO: 1. KAMAL KUMAR BANSAL, L/R OF LATE RAM DAS BANSAL, 45, LENIN SARANI, KOLKATA-700013. 2 THE I.T.O., WARD-55(1), KOLKATA 3. THE CIT- 4. THE CIT(A)-XXXVI, KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA 18 0)/ TRUE COPY, 7&4/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES