ITO, Ward - 10(3), Pune V. Shri Amit Vijay Kulkarni, Pune

ITA 1597/PUN/2013

• Counselvise Citation: 159724514 RSA 2013
• Duration Of Justice: 1 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 16-03-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 22-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B C MALAKAR
• Assessee Lawyers: R D ONKAR
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE MS. SUSHMA CHOWLA, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO.1597/PN/2013 ASSESSMENT YEAR: 2009-10 THE INCOME TAX OFFICER, WARD 10(3), PUNE . APPELLANT VS. SHRI AMIT VIJAY KULKARNI BUILDING NO.16, FLAT NO.21, SHRADDHA GARDEN, CHINCHWAD, PUNE 411033 . RESPONDENT PAN: AMWPK1636Q APPELLANT BY : SHRI B.C. MALAKAR RESPONDENT BY : SHRI R.D. ONKAR DATE OF HEARING : 16-03-2015 DATE OF PRONOUNCEMENT : 25-03-2015 ORDER PER SUSHMA CHOWLA, JM: THIS APPEAL FILED BY THE REVENUE IS AGAINST THE ORD ER OF CIT(A)-V, PUNE, DATED 28.05.2013 RELATING TO ASSESSMENT YEAR 2009-1 0 AGAINST ORDER PASSED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION MADE ON ACCOUNT OF COMMISSION ESTIMATED AT RS.21,18,163/- WHEN THE ASS ESSEE HIMSELF ADMITS TO HAVE PROVIDED THE SERVICE OF LENDING NAME AS AGRICULTURIST TO ENABLE THE LAND TRANSACTION. 2. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTE R ANY OF THE ABOVE GROUNDS OF APPEAL. 3. THE ONLY ISSUE RAISED IN THE PRESENT APPEAL IS A GAINST THE DELETION OF ADDITION MADE ON ACCOUNT OF COMMISSION ESTIMATED AT RS.21,18,163/-. ITA NO.1597/PN/2013 SHRI AMIT VIJAY KULKARNI 2 4. THE BRIEF FACTS OF THE CASE ARE THAT, THE ASSESS EE WAS AN EMPLOYEE OF M/S. LAVASA CORPORATION LTD., PUNE AND WAS RECEIVING SAL ARY FROM THE SAID CONCERN. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE H AD FILED RETURN OF INCOME DECLARING TOTAL INCOME OF RS.3,79,473/-. THE ASSES SING OFFICER RECEIVED INFORMATION THROUGH AIR THAT THE ASSESSEE HAD MADE AN INVESTMENT IN AGRICULTURAL LAND AMOUNTING TO RS.4,23,63,269/-. C ONSEQUENTLY, THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND NOTICE UNDER SECTION 143(2) OF THE ACT WAS ISSUED TO THE ASSESSEE. THE ASSESSEE WAS ASKED TO PRODUCE A COPY OF PURCHASE DEED OF THE AGRICULTURAL LAND. IN RESPONS E THERETO, THE ASSESSEE PRODUCED THE COPY OF THE LAND PURCHASED. THE CASE OF THE ASSESSEE WAS THAT THE SALE DEED DATED 06.08.2008 WAS FOR THE PURCHASE OF LAND AT TEMGHAR, MULSHI AND THE SAID LAND WAS PURCHASED BY M/S. LAVASA CORP ORATION LTD. (LAVASA) IN THE NAME OF ASSESSEE AND HE WAS HOLDING THE SAME FOR TH E BENEFIT OF LAVASA ONLY. IT WAS ALSO POINTED OUT BY THE ASSESSEE THAT LAVASA WA S THE CONFIRMING PARTY TO THE SALE DEED AND THE TOTAL SALE CONSIDERATION, STAMP D UTY AND REGISTRATION CHARGES WERE PAID BY LAVASA. THE CONFIRMATION IN THIS REGA RD WAS FILED VIDE LETTER DATED 20.07.2011 BY LAVASA AND IT WAS ALSO CONFIRMED THAT BY WAY OF IRREVOCABLE POWER OF ATTORNEY ISSUED BY THE ASSESSEE, THEY HAD UNFETTERED RIGHT AND POSSESSION OF THE SAID PARCEL OF LAND TO EXPLOIT FO R COMMERCIAL BENEFITS. BY AN IRREVOCABLE POWER OF ATTORNEY, THE ASSESSEE HAD NOM INATED, CONSTITUTED AND APPOINTED LAVASA CORPORATION LTD. TO DEAL WITH THE PROPERTY INCLUDING ITS SALE. FURTHER, THE PLEA OF THE ASSESSEE BEFORE THE ASSESS ING OFFICER WAS THAT THE LAND BEING AGRICULTURAL LAND, COMPANY LAVASA COULD NOT P URCHASE THE SAME IN THEIR NAME AND HENCE, IT WAS PURCHASED IN THE NAME OF THE ASSESSEE. THE ASSESSING OFFICER SHOW CAUSED THE ASSESSEE AS TO WHY A SUM OF RS.42,36,326/- BEING 10% OF THE AGGREGATE VALUE OF THE LAND TRANSACTED SHOUL D NOT BE ADDED TO HIS TOTAL INCOME AS COMMISSION INCOME. REJECTING THE EXPLANA TION OF THE ASSESSEE IN THIS REGARD, THE ASSESSING OFFICER ESTIMATED THE COMMISS ION FOR SERVICES RENDERED BY ITA NO.1597/PN/2013 SHRI AMIT VIJAY KULKARNI 3 THE ASSESSEE AT 5% OF THE TRANSACTION VALUE RESULTI NG IN ADDITION OF RS.21,18,163/-. 5. THE CIT(A) DELETED THE ADDITION AS SUFFICIENT EV IDENCE HAD NOT BEEN GATHERED BY THE ASSESSING OFFICER TO ESTABLISH THAT THE ASSESSEE HAD RECEIVED COMMISSION ON THE SAID TRANSACTION. 6. SHRI B.C. MALAKAR APPEARED FOR THE REVENUE AND S HRI R.D. ONKAR APPEARED FOR THE ASSESSEE AND PUT FORWARD THEIR CON TENTIONS. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. IN THE FACTS OF THE PRESENT CASE, ADMITTEDLY, THE ASSESSEE WAS A PARTY TO A TRANSACTION OF PURCHASE OF LAND AT TEMGHAR, MULSHI. THE TOTAL SAL E CONSIDERATION OF THE SAID PROPERTY ALONG WITH STAMP DUTY AND REGISTRATION CHA RGES AMOUNTING TO RS.4.23 CRORES WERE PAID BY LAVASA CORPORATION LTD., WHO WA S THE CONFIRMING PARTY TO THE SAID SALE DEED. THE CONTENTION OF THE ASSESSEE BEF ORE THE ASSESSING OFFICER WAS THAT THE SAID LAND PURCHASED WAS AN AGRICULTURA L LAND AND COULD NOT BE TRANSFERRED IN THE NAME OF THE COMPANY LAVASA AND H ENCE, WAS PURCHASED IN THE NAME OF ASSESSEE. THE SAID CONTENTION OF THE ASSES SEE HAS BEEN ACCEPTED BY THE ASSESSING OFFICER. HOWEVER, THE ASSESSING OFFI CER WAS OF THE VIEW THAT FOR THE SAID TRANSACTION, COMMISSION SHOULD HAVE BEEN E ARNED BY THE ASSESSEE AND 5% OF THE TOTAL VALUE OF THE TRANSACTION WAS INCLUD ED AS COMMISSION IN THE HANDS OF THE ASSESSEE, RESULTING IN ADDITION OF RS.21,18, 163/-. THE ADDITION WAS MADE BY THE ASSESSING OFFICER ON THE PREMISES THAT IN RE AL ESTATE TRANSACTION, COMMISSION IS GENERALLY CHARGED @ 2% EACH FROM BOTH THE PURCHASER AND THE SELLER AND COMMISSION OF 4% OF THE TRANSACTION VALU E IS RECEIVED FOR ONLY INTRODUCING THE PERSON, WHEREAS IN THE CASE OF ASSE SSEE, THE RISK INVOLVED IS MUCH HIGHER AND HENCE, COMMISSION WAS ESTIMATED @ 5 % OF THE TRANSACTION VALUE. NO EVIDENCE IN THIS REGARD WAS AVAILABLE WI TH THE ASSESSING OFFICER TO PRESUME THAT THE COMMISSION HAS BEEN PAID TO THE AS SESSEE BY LAVASA. IN THE ITA NO.1597/PN/2013 SHRI AMIT VIJAY KULKARNI 4 ABSENCE OF ANY CONCRETE EVIDENCE, THERE IS NO WARRA NT FOR ESTIMATING THE INCOME IN THE HANDS OF THE ASSESSEE. ACCORDINGLY, WE ARE IN CONFORMITY WITH THE ORDER OF CIT(A) IN DELETING THE ADDITION OF RS.21,18,163/-. THE GROUNDS OF APPEAL RAISED BY THE REVENUE ARE THUS, DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED ON THIS 25 TH DAY OF MARCH, 2015. SD/- SD/- (R.K. PANDA) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 25 TH MARCH, 2015 GCVSR COPY OF THE ORDER IS FORWARDED TO: - 1) THE DEPARTMENT; 2) THE ASSESSEE; 3) THE CIT(A)-V, PUNE; 4) THE CIT-V, PUNE; 5) THE DR B BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T., PUNE