SMT BUDHAREEN BAI, BHATAPARA V. INCOME TAX OFFICER, BHATAPARA

ITA 157/RPR/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4449 (ITAT-RAIPUR)
• Duration Of Justice: 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Appeal Filed On: 10-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: VIKASH SHARMA
• Keywords: Sale consideration of property below Jantri Value; Opportunity of being heard; Additional evidence; Cost of acquisition; Reasonable cause; Fair market value
• Section: 143(3); 50C; 54F; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR BEFORE SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER AND DR. MITHA LAL MEENA, ACCOUNTANT MEMBER ITA NO.157/RPR/2018 ASSESSMENT YEAR : 2014-15 SMT. BUDHIA REEN BAI, NEAR SHITALA MANDIR, HATHANIPARA WARD, BHATAPARA (CG) 493118. VS. ITO, BHATAPARA (CG). PAN : BXXPB0771Q (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI VIKASH SHARMA, ADV. DEPARTMENT BY : SHRI SANJAY KUMAR, ADDL. CIT DATE OF HEARING : 13-05-2019 DATE OF PRONOUNCEMENT : 14-05-2019 O R D E R PER DR. MITHA LAL MEENA, AM : THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A)-I, RAIPUR (CG) DATED 22.11.2017 RELATING TO ASSESSMENT YEAR 2014-15. 2. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE HAS REQUESTED FOR CONDONATION OF THE DELAY OF 180 DAYS . IN THIS REGARD, HE HAS FILED AN APPLICATION DATED 10.08.2018 REQUESTING FOR CONDONATION OF DELAY, COPY OF WHICH IS PLACED ON RECORD. THE RELEVANT PARAS OF THE SAID APPLICATION ARE EXTRACTED HEREUNDER :- 2 ITA NO.157/RPR/2018 WITH REFERENCE TO THE ABOVE, IT IS RESPECTFULLY SUBMITTED THAT MY ASSESSMENT CASE FOR A.Y. 2014-15 WAS COMPLETED U/S 143(3) BY THE LEARNED INCOME TAX OFFICER, BHATAPARA VIDE ORDER DATED 29.12.2016 DETERMINING TOTAL INCOME AT RS.1,05,78,650/- AGAINST THE RETURNED INCOME OF RS.1,95,200/-. I WAS AGGRIEVED WITH THE ASSESSMENT ORDER AND HAD PREFERRED AN APPEAL BEFORE THE LEARNED CIT(APPEALS)-L, RAIPUR, HOWEVER, THE SUBMISSIONS MADE DID NOT FIND FAVOUR AND THE APPEAL HAS BEEN DISMISSED BY THE LEARNED CIT (APPEAL) AND ADDITIONS HAVE BEEN CONFIRMED. THE ORDERS PASSED BY THE LEARNED CIT(A) DATED 22.11.2017 WAS SERVED ON THE ASSESSEE, HOWEVER, I AM A SENIOR CITIZEN AND ILLITERATE, I DO NOT REMEMBER THE ACTUAL DATE OF SERVICE OF THE APPELLATE ORDER PASSED BY THE FIRST APPELLATE AUTHORITY. I AND MY DISTANT RELATIVES BECAME AWARE OF DISMISSAL OF APPEAL ONLY AFTER THE LEARNED AO STARTED TAKING COERCIVE STEPS FOR RECOVERY OF THE DEMAND AND MORE PARTICULARLY WHEN THE LEARNED TAX RECOVERY OFFICER (ASSMT.)-I, RAIPUR ISSUED NOTICE DATED 16.07.2018 BEARING NO. NIL U/S 223(2) OF THE I.T. ACT, 1961 IN FORM NO. ITCP AND 57. THEREAFTER, I TOOK HELP OF MY DISTANT RELATIVE BASICALLY SON OF MY SISTER AND STARTED SEARCHING FOR APPROPRIATE COUNSEL FOR REPRESENTING MY CASE AND FILING APPEAL BEFORE THE HONBLE BENCH AGAINST THE ORDER OF THE FIRST APPELLATE AUTHORITY. THE ENTIRE EXERCISE TOOK CONSIDERABLE PERIOD OF TIME AS MY RELATIVES ARE ALSO NOT VERY MUCH LITERATE AND ARE LIVING VERY SIMPLE LIFE, DUE TO AFORESAID CUMULATIVE REASONS, THERE IS DELAY IN FILING OF APPEAL BEFORE THE HONBLE BENCH BY 5 - 6 MONTHS (APPROX.), AS I HAVE BEEN PREVENTED BY REASONABLE CAUSE, THEREFORE, YOUR HONOR IS HUMBLY REQUESTED TO KINDLY CONDONE THE DELAY IN FILING OF APPEAL AS THERE WAS A REASONABLE CAUSE. 3. CONSIDERING THE ABOVE, WE ARE OF THE OPINION THE DELAY SHOULD BE CONDONED AND PROCEED TO ADJUDICATE THE ISSUE ON MERITS. 4. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED AO HAS ERRED ON FACTS AND IN LAW IN MAKING ADDITION OF RS.55,38,000/- BY INVOKING THE PROVISIONS OF SECTION 69A OF THE I.T. ACT, 1961 WHEN THE SOURCE OF CASH DEPOSIT IN BANK ACCOUNT IS DULY EXPLAINABLE AND THE LEARNED CIT (APPEAL)-1, RAIPUR HAS ERRED IN CONFIRMING THE AFORESAID ADDITION. HENCE, IT IS PRAYED THAT THE ADDITION OF RS.55,83,000/- MAY KINDLY BE DELETED. 2. WITHOUT PREJUDICE TO THE ABOVE, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED AO HAS ERRED ON FACTS AND IN LAW IN MAKING ADDITION OF 3 ITA NO.157/RPR/2018 RS.47,92,197/- BY INVOKING THE PROVISIONS OF SECTION 69A OF THE IT ACT, 1961 WHEN THE ASSESSEE HAD NOT MAINTAINED ANY BOOKS OF ACCOUNTS NOR DID THE ASSESSEE WAS LIABLE TO MAINTAIN BOOKS OF ACCOUNTS IN TERMS OF PROVISIONS OF SECTION 44AA OF THE I.T. ACT, 1961. HENCE, IT IS PRAYED THAT THE ADDITION OF RS.47,92,197/- MAY KINDLY BE DELETED. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED AO HAS ERRED ON FACTS AND IN LAW IN RESTRICTING THE DEDUCTION ON ACCOUNT OF INDEXED COST OF ACQUISITION AND COST OF IMPROVEMENT TO RS.7,803/- (AFTER INDEXATION OF FAIR MARKET VALUE ASSUMED BY THE LEARNED AO AT RS.831/- AS ON 01.04.1981) AS AGAINST RS.22,48,419/- CLAIMED BY THE ASSESSEE. HENCE, IT IS PRAYED THAT THE DEDUCTION MAY KINDLY BE ALLOWED AS CLAIMED AT RS.22,48,419/- 4. WITHOUT PREJUDICE TO THE ABOVE, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED AO HAS ERRED ON FACTS AND IN LAW IN HOLDING A VIEW THAT THE COST OF IMPROVEMENT INCURRED PRIOR TO 1ST APRIL, 1981 IS NOT ALLOWABLE TO THE ASSESSEE. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED AO HAS ERRED ON FACTS AND IN LAW IN ADOPTING INDEXED COST OF ACQUISITION AT RS.7,803/- WITHOUT REFERRING THE MATTER TO THE DVO FOR DETERMINATION OF FAIR MARKET VALUE OF THE PROPERTY AS ON 01.04.1981 IN TERMS OF PROVISIONS OF SECTION 55 OF THE I.T. ACT. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE ASSESSEE IS ENTITLED TO GET EXEMPTION U/S 54F IN RESPECT OF INVESTMENT OF RS.35.00 LAKHS MADE BY THE ASSESSEE IN THE CONSTRUCTION OF RESIDENTIAL HOUSE PROPERTY. HENCE, IT IS PRAYED THAT THE EXEMPTION U/S 54F MAY KINDLY BE ALLOWED. 7. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER VARY AND/OR WITHDRAW ANY OR ALL THE ABOVE GROUNDS OF APPEAL. 5. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSESSEE HAS DEPOSITED CASH OF RS.55,38,000/- IN HER BANK ACCOUNT NO.10721633123 MAINTAINED AT ADB BRANCH OF STATE BANK OF INDIA, BHATAPARA WHICH WAS DISCLOSED DURING THE ENQUIRY BEING CONDUCTED BY THE ASSESSING OFFICER UNDER THE LIMITED SCRUTINY. THE ASSESSEE WAS REQUIRED TO EXPLAIN THE SOURCE OF CASH DEPOSIT. HOWEVER, NO DOCUMENTARY EVIDENCES TO SUBSTANTIATE THE CASH DEPOSIT HAS BEEN PRODUCED OR FURNISHED BY THE ASSESSEE EXCEPT ORAL CONFIRMATIONS BY WAY OF PRODUCING SOME BORROWERS. LIKEWISE, THE ASSESSEE WAS REQUIRED TO SUBSTANTIATE THE INCOME FROM AGRICULTURAL 4 ITA NO.157/RPR/2018 ACTIVITY. IN COMPLIANCE, THE ASSESSEE HAS FURNISHED A LETTER OF SARPANCH IN PROOF OF AGRICULTURAL INCOME AND EXPENSES INCURRED TO EARN SUCH INCOME. UNDER THESE CIRCUMSTANCES, THE ASSESSING OFFICER HAS TREATED THE CASH DEPOSIT OF RS.55,38,000/- AS UNEXPLAINED INCOME OF THE ASSESSEE U/S 69 OF THE ACT. 6. THE CIT(A) HAS REJECTED THE ASSESSEES APPEAL BY OBSERVING IN PARAS 2.3 AS FOLLOWS :- 2.3 REGARDING THE CASH DEPOSIT THE APPELLANT HAS NOT BEEN ABLE TO SHOW THAT CASH LOAN OF RS. 30 LAKHS WAS ADVANCED. STATEMENTS OF FEW FARMERS MADE BEFORE THE AO AS BORROWER OF MONEY ARE NOT SUBSTANTIATED BY ANY SUPPORTING DOCUMENTS. ALSO IT CANNOT BE EXPECTED THAT A PERSON WILL ADVANCE HUGE SUM OF RS. 30 LAKHS WITHOUT CHARGING INTEREST. THE CLAIM OF ASSESSEE IS AN AFTERTHOUGHT AND THE CASH DEPOSIT IS FROM UNEXPLAINED SOURCES. THE IDENTITY OF PERSONS MAY HAVE BEEN PROVED, BUT THERE IS NO SUPPORTING DOCUMENT THAT TRANSACTIONS HAD AT ALL TAKEN PLACE. STATEMENTS OF PERSONS WITHOUT ANY DOCUMENTS ARE NOT RELIABLE. THE ADDITION IS THEREFORE SUSTAINED. 3.1 GROUND (II) HAS BEEN TAKEN AGAINST COMPUTATION OF CAPITAL GAINS. FACTS AS PER THE ASSESSMENT ORDER ARE AS UNDER- DURING THE YEAR HAS SOLD AN IMMOVABLE PROPERTY BEING PARCEL OF LAND SITUATED AT BHATAPARA FOR RS. 48,00,000/- HOWEVER, IN THE RETURN OF INCOME TAX FOR THE YEAR UNDER CONSIDERATION, SHE HAS NOT OFFERED ANY CAPITAL GAIN OUT OF THIS TRANSACTION. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ASSESSEE WAS ASKED TO FURNISH THE COMPUTATION OF CAPITAL GAIN. COUNSEL OF THE ASSESSEE HAS FURNISHED THE COMPUTATION OF LTCG AS UNDER:- THUS EXPENDITURE INCURRED BY THE ASSESSEE OR THE PREVIOUS OWNER BEFORE 01/04/1981 IS TO BE COMPLETELY IGNORED. IN VIEW OF THE ABOVE. LONG TERM CAPITAL GAIN IN CASE OF THE ASSESSEE IS COMPUTED AS UNDER:- SALE CONSIDERATION U/S 50C : RS.48,00,000/- LESS INDEXED COST OF ACQUISITION : (83X939/100) : RS. 7,803/- 5 ITA NO.157/RPR/2018 LTCG : RS.47,92,197/- IN VIEW OF THE DISCUSSION MADE ABOVE RS. 47,92,197/- IS ADDED TO THE INCOME OF THE ASSESSEE BEING INCOME FROM LONG TERM CAPITAL GAIN. PENALTY PROCEEDINGS UNDER SECTION 271(1) (C) ARE SEPARATELY INITIATED FOR CONCEALMENT OF INCOME. 3.2 APPELLANTS SUBMISSION- . DURING THE YEAR UNDER CONSIDERATION ASSESSEE HAD SOLD A PROPERTY SITUATED AT HATHNIPARA, BHATAPARA ADMEASURING 0.154 HECT AT AMOUNT TO RS. 48 LAKHS, THE LAND WAS ACTUALLY BELONG TO THE NAME OF HER HUSBAND SINCE 1970 AFTER DEATH OF HER HUSBAND IN 2002-03 THE LAND WAS TRANSFERRED IN THE NAME OF THE ASSESSEE AS LEGAL HEIR, AT THE TIME OF ASSESSMENT ASSESSEE HAD SUBMITTED CAPITAL GAIN CALCULATION AS FOLLOWS:- SALE CONSIDERATION RS.4800000/- LESS INDEX COST RS.2248419/- TAXABLE CAPITAL GAIN RS.2551581/- IT WAS ALSO EXPLAINED TO THE LD AO THAT THE ASSESSEE WAS ILLITERATE LADY AGED ABOUT 74 YEARS AND HAD NOT KEPT THE RECORD FOR THE IMPROVEMENT MADE ON THE LAND SITUATED AT THE HATHNIPARA, HOWEVER AS PER THE NATURAL REQUIREMENTS AND CONSIDERATIONS ON TIME TO TIME THERE WERE SOME ACTIVITIES REQUIRED TO IMPROVE THE VALUE OF LAND OR MADE IT CONSTANT VIZ GHERA, KHUDAYI, MED, LAGGAN AND OTHER DEVELOPMENT EXPENSES. HOWEVER, THE LD AO HAD NOT CONSIDERED ANYTHING AND HAD MADE CAPITAL GAIN AS RS.4792197/- WITHOUT CONSIDERING ANY DEVELOPMENT COST IN THE ASSET. 3.3 REGARDING COMPUTATION OF CAPITAL GAIN THE ASSESSEE WANTS THE DEPARTMENT TO ACCEPT HER CLAIM OF EXPENDITURE ON IMPROVEMENT. AS AN EVIDENCE A SHEET OF PAPER HAS BEEN FURNISHED MENTIONING THEREIN EXPENDITURE ON GHERA, KHUDAYI, MED MAKING AND OTHER DEVELOPMENT. THERE IS NO EVIDENCE OF THESE EXPENSES HAVING BEEN MADE. MOREOVER, THE EXPENDITURE ON GHERA, KHUDAYI, MED, MAKING ARE INCURRED IN THE COURSE OF AGRICULTURAL OPERATION IN A AGRICULTURE LAND EVERY YEAR FOR RAISING THE CROP. THESE EXPENSES SHOULD BE SET OFF AGAINST AGRICULTURE INCOME AND THESE DO NOT ADD IMPROVEMENT TO THE VALUE OF THE LAND. THE CLAIM IS THEREFORE REJECTED AND COMPUTATION OF APPEAL GAIN BY THE AO IS SUSTAINED. 7. THE LD. COUNSEL FOR THE ASSESSEE FILED AN AFFIDAVIT AND SUBMITTED THAT THE ASSESSEE BEING SENIOR CITIZEN OF 87 YEARS OLD, WHO COULD NOT NARRATE THE FACTS PROPERLY TO HER THEN COUNSEL TO REPRESENT HER CASE BEFORE THE ASSESSING OFFICER. DURING THE ASSESSMENT PROCEEDINGS U/S 143(3) OF THE ACT, DUE TO HER OLD AGE, SHE 6 ITA NO.157/RPR/2018 WAS NOT IN HER PROPER SENSES WHICH RESULTED INTO SERIOUS COMMUNICATION GAP BETWEEN THE ASSESSEE AND HER THEN COUNSEL, DUE TO SAID REASONS, CERTAIN VITAL FACTS HAVE REMAINED IN THE DARK THAT ARE HAVING A BEARING IN THE OUTCOME OF THE APPEAL REGARDING THE DEPOSITS IN THE BANK WHICH GOES TO THE ROOT OF THE MATTER. 8. FURTHER, THE LD. COUNSEL FOR THE ASSESSEE FILED ADDITIONAL EVIDENCES IN THE FORM OF PAPER BOOK AND CASE LAWS PAPER BOOK, COPY OF SALE DEED, COPY OF STATEMENT OF BORROWERS RECORDED U/S 131(1) OF THE ACT, PHOTOS OF HOUSE CONSTRUCTED BY THE ASSESSEE BEING ELIGIBLE INVESTMENT FOR EXEMPTION U/S 54F OF THE ACT ETC., WHICH ARE PLACED ON RECORD. 9. THE LD. DR FOR THE REVENUE, ON THE OTHER HAND, HAS RELIED ON THE IMPUGNED ORDERS. 10. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. CONSIDERING THE FACTS AND THE ADDITIONAL EVIDENCES FURNISHED BEFORE US FOR THE FIRST TIME, WE FIND, IN THE INTEREST OF JUSTICE, THE MATTER NEEDS TO BE REVISITED BY THE ASSESSING OFFICER ON THE BASIS ADDITIONAL EVIDENCES AND DECIDE THE ISSUE AFRESH. THEREFORE, THE ASSESSING OFFICER IS DIRECTED TO CONSIDER THE ADDITIONAL EVIDENCES AND PASS A SPEAKING ORDER AFTER GRANTING A REASONABLE 7 ITA NO.157/RPR/2018 OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN ACCORDANCE WITH LAW. THUS, THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 14 TH MAY, 2019. SD/- SD /- (PARTHA SARATHI CHAUDHURY) (DR. MITHA LAL MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 14-05-2019. SUJEET COPY OF ORDER TO: - 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT 4) THE CIT(A) 5) THE DR, I.T.A.T., RAIPUR. BY ORDER //TRUE COPY// SR. PRIVATE SECRETARY ITAT, RAIPUR