ITO, Ward - 10(3), Pune V. Shri Kashipatil Rambhau Kalate, Pune

ITA 1598/PUN/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 84922 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 22-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Deduction for capital gain; Salary income; Additional evidence; Cost of acquisition
• Section: 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO. 1598/PN/2013 (ASSESSMENT YEAR : 2005-06) ITO, WARD-10(3) PUNE .. APPELLANT VS. SHRI KASHIPATIL RAMBHAU KALATE S.NO.192, WAKAD, MULSHI, PUNE - 411033 .. RESPONDENT PAN NO. ALIPK2997F ASSESSEE BY : NONE REVENUE BY : SHRI RAJESH DAMOR DATE OF HEARING : 21-08-2014 DATE OF PRONOUNCEMENT : 28-08-2014 ORDER PER R.K. PANDA, AM : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER DATED 30-05-2013 OF THE CIT(A)-V, PUNE RELATING TO ASSESSMENT YEAR 2005-06. 2. DESPITE SERVICE OF NOTICE, NONE APPEARED ON BEHA LF OF THE ASSESSEE. THEREFORE, THIS APPEAL IS BEING DECIDED ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AND AFTER HEARING THE LD. DEPARTMENTAL REPRESENTATIVE. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS AN INDIVIDUAL AND DERIVES INCOME FROM SALARY, LONG TERM CAPITAL G AIN ETC. HE FILED HIS RETURN OF INCOME ON 31-10-2005 DECLARING TOTAL INCOME OF 2 RS.50,280/-. DURING THE COURSE OF ASSESSMENT PROCE EDINGS, THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAD PURCH ASED PART OF LAND AT SR.NO. 2137 AT BOPODI FOR RS.82,50,000/- FROM BHALE RAO FAMILY VIDE AGREEMENT DATED 25.1.2005. THE SAID LAND WAS CLAIME D TO BE PURCHASED BY SATHEKHAT DATED 30.12.1995 AND THE VALUE OF LAND AS PER SATHEKHAT WAS SHOWN AT RS. 22 LAKHS. FURTHER, ADDITIONAL AMOU NT OF RS.60,50,000/- WAS PAID ON ACCOUNT OF OUT OF COURT SETTLEMENT IN CIVIL SUIT NO. 530/2003 DATED 8.6.2003 WHICH WAS SETTLED OUT OF COURT ON 4.7.2005. FURTHER PAYMENT OF RS. 2,94,430/- AS BALA NCE STAMP DUTY WAS ALSO PAID BY THE ASSESSEE ON 13.2.2004. THE AO NOT ED THAT THE ASSESSEE HAD NOT SHOWN ANY INCOME FROM CAPITAL GAIN IN THE RETURN OF INCOME FOR A.Y. 2005-06, THOUGH THE PROPERTY WAS SO LD VIDE AGREEMENT DATED 28.1.2005. THE ASSESSEE CLAIMED THAT THE CAP ITAL GAIN HAS BEEN SHOWN IN A.Y. 2006-07. HOWEVER, THE AO ON THE BASIS OF THE AGREEMENT DATED 25.1.2005 AS WELL AS ON THE BASIS OF POSSESSI ON GIVEN TO THE BUYER ON 28.1.2005 HELD THAT THE TRANSFER OF CAPITAL ASSE TS TOOK PLACE IN THE A.Y. 2005-06 AND THE ASSESSEE WAS LIABLE TO PAY CAP ITAL GAINS TAX FOR THE A.Y. 2005-06. THE AO NOTED THAT THE ASSESSEE HAS W ORKED OUT THE CAPITAL GAIN AS UNDER: AMOUNTS TOTAL AREA OF PROPERTY 621004 SHARE IN PROPERTY IN SQ.MT 3,210.04 S.MT SALE CONSIDERATION FOR THE RESIDENTIAL PROPERTY SITUAT ED AT S.NO. 2137 BOPODI, PUNE 411 003 GROSS AMOUNT 24600000 LESS : COMMISSION 600000 NET CONSIDERATION 24000000 12,405, 900 COST OF ACQUISITION THE RESIDENTIAL PROPERTY WAS ORIGINALLY PURCHASED ON 3 0.12.95 FOR RS. 22,00,000/- DUE TO DISPUTE AMOUNT THE BUYER AND SELLER THIS AMOUNT WAS 3 FURTHER INCREASED BY RS. 60,50,000/- ON 25.1.2005 INDEX COST OF ACQUISITION PAYMENT FOR F.Y. 1995-96 RS. 22 LAKH, STAMP DUTY 22,00,020 INCREMENTAL COST ON 13.2.2004 2,94,430 INCREMENTAL COST ALONGWITH STAMP DUTY AND REGISTRATION COST 63,45,980 TOTAL 88,40,430 INDEX FOR 1995 281 INDEX FOR 2006 497 THEREFORE INDEX COST OF ACQUISITION 1,56,35,921 BALANCE (32,30,021) LESS : EXEMPTION U/S 54 INVESTMENT DURING THE YEAR IN HOUSE AND LAND APPURTEN ANT THERETO PURCHASED DURING THE YEAR SHARE IN THE PROPERTY 42% PURCHASE VALUE 1,06,55,111 VALUE OF SHARE IN THE PROPERTY 44,75,147 HENCE CAPITAL GAIN EXEMPTION IS LOWER OF THE CAPITAL GAIN OR THE AMOUNT INVESTED IN PURCHASING THE HOUSE PROPERTY LONG TERM CAPITAL LOSS C/F 32,30,021 3.1 HOWEVER, THE AO WHILE CALCULATING THE LTCG ALLO WED INDEXATION IN RESPECT OF RS. 6,50,020 AND RS.6,05,0 00/- AS PER INDEXED COST OF ACQUISITION FOR F.Y. 1995-96 AND 1996-97 RE SPECTIVELY AS PER ACTUAL PAYMENTS MADE OUT OF RS. 22 LAKHS. SINCE THE ASSESSEE FAILED TO PRODUCE PROOF OF PAYMENT OF BALANCE AMOUNT OF RS.9, 45,000/-, I.E. (22,00,000 6,50,000 5,05,000/-), NO INDEXATION WAS ALLOWED BY THE AO ON THE SAID AMOUNT. FURTHER, NO INDEXATION WAS ALLOWED IN RESPECT OF INCREMENTAL COST AS WELL AS STAMP DUTY AND REGIS TRATION COST TOTALING TO RS. 63,45,980/-. ACCORDINGLY THE LTCG WAS CALCUL ATED AT RS.26,84,958/- BY THE AO. THE AO FURTHER ADDED RS. 9,45,000/- IN THE ASSESSEE'S TOTAL INCOME ON THE GROUND THAT THE SOUR CE OF INCOME AND DETAILS OF PAYMENT MADE BY THE ASSESSEE FOR PURCHAS E OF LAND WAS NOT FURNISHED. 4 4. BEFORE THE CIT(A) THE ASSESSEE FILED CERTAIN ADD ITIONAL EVIDENCES IN RESPECT OF PAYMENT OF RS.9,45,000/- AS WELL AS I NCREMENTAL COST ON ACCOUNT OF OUT-OF-COURT SETTLEMENT AND REQUESTED FO R ADMISSION OF THE ADDITIONAL EVIDENCE. IT WAS STATED THAT THE ASSESS EE WAS ADMITTED IN DEENANATH MANGESHKAR HOSPITAL, PUNE DURING THE COUR SE OF ASSESSMENT PROCEEDINGS AND THEREFORE THE REQUIREMENTS OF THE A SSESSING OFFICER REGARDING THE PROOF OF THE PAYMENT FROM 1995 TO 200 5 WAS DIFFICULT TASK BEFORE HIM WITHIN THE SHORT PERIOD PROVIDED TO THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. ON THE BASIS OF THE REQUEST OF THE ASSESSEE FOR ADMISSION OF THE ADDITIONAL EVIDENCES, THE LD.CIT(A) CALLED FOR A REMAND REPORT FROM THE ASSESSING OFFIC ER WHO OBJECTED TO THE SAME. 4.1 AFTER CONFRONTING THE SAME TO THE ASSESSEE AND AFTER CONSIDERING THE REJOINDER OF THE ASSESSEE TO THE REMAND REPORT BY THE AO THE LD.CIT(A) UPHELD THE METHOD OF INDEXATION ADOPTED B Y THE ASSESSING OFFICER. HE DIRECTED THE ASSESSING OFFICER TO ALLOW THE INDEXATION AS PER THE ABOVE METHOD IN RESPECT OF PAYMENT OF RS.9, 45,000/- FOR WHICH THE PROOF HAS BEEN FILED DURING THE COURSE OF APPEA L PROCEEDINGS. HE, HOWEVER, HELD THAT NO INDEXATION IS TO BE ALLOWED I N RESPECT OF INCREMENTAL PAYMENT OF RS.60,50,000/- AS WELL AS ST AMP DUTY SINCE THE PAYMENT WAS MADE IN THE SAME YEAR. 5. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REVE NUE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : 5 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE , THE CIT(A) WAS JUSTIFIED IN ADMITTING ADDITIONAL EVIDENCE IN RESPECT OF PAYMENT OF RS.9,45,000/- WHEN SUFFICIENT OPPORTUNITY TO FURNISH SUCH DETAILS WAS GIVEN DURING THE COURSE OF ASSESSMENT PROCEEDI NGS. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE LD.CIT(A) WAS JUSTIFIED IN ALLOWING THE I NDEXATION BENEFIT OF RS.9,45,000/- AND DELETING FURTHER ADDITION OF RS. 9,45,000/- TREATED AS UNEXPLAINED WHEN THE ASSESSEE HAS FAILED TO DISCHARGE T HE ONUS CAST UPON IT TO PROVE THE SOURCES OF THE SAME BY WAY OF FIL ING DOCUMENTARY EVIDENCE ETC. DURING THE COURSE OF ASSESSMENT PROCEEDING S. 3. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR A LTER ANY OF THE ABOVE GROUNDS OF APPEAL. 6. WE HAVE HEARD THE ARGUMENTS MADE BY THE LD. DEPA RTMENTAL REPRESENTATIVE AND PERUSED THE MATERIAL AVAILABLE O N RECORD. IN THE INSTANT CASE, THE DISPUTE OF THE REVENUE IS REGARDI NG ADMISSION OF ADDITIONAL EVIDENCE IN RESPECT OF PAYMENT OF RS.9,4 5,000/- AND INDEXATION OF THE SAME. IT IS ALSO THE GRIEVANCE O F THE REVENUE THAT THE CIT(A) DELETED THE ADDITION OF RS.9,45,000/- TREATE D BY THE ASSESSING OFFICER AS UNEXPLAINED INVESTMENT. WE FIND DURING THE COURSE OF APPEAL PROCEEDINGS, ON THE BASIS OF REQUEST MADE BY THE ASSESSEE FOR ADMISSION OF THE ADDITIONAL EVIDENCE, THE LD.CIT(A) CALLED FOR A REMAND REPORT FROM THE ASSESSING OFFICER. THE ASSE SSING OFFICER WAS GIVEN SUFFICIENT OPPORTUNITY DURING THE REMAND PROC EEDINGS. THE ASSESSEE HAS ALSO EXPLAINED THE REASONS FOR NOT BEI NG ABLE TO FILE THE ADDITIONAL EVIDENCE WHICH WERE PRODUCED BEFORE CIT( A) FOR THE FIRST TIME SINCE HE WAS ADMITTED IN THE HOSPITAL WHEN THE ASSESSMENT PROCEEDINGS WERE GOING ON AND IT WAS NOT POSSIBLE O N HIS PART TO SUBMIT THE SAME BEFORE THE ASSESSING OFFICER. THEREFORE, THE GRIEVANCE OF THE REVENUE THAT CIT(A) WAS NOT JUSTIFIED IN ADMITTING THE ADDITIONAL 6 EVIDENCE IN RESPECT OF PAYMENT OF RS.9,45,000/- IS NOT CORRECT. GROUND OF APPEAL NO.1 BY THE REVENUE IS DISMISSED. 6.1 SO FAR AS ALLOWING THE INDEXATION BENEFIT ON RS .9,45,000/- IS CONCERNED, WE FIND THE ORDER OF THE CIT(A) IS A VER Y REASONED ONE. THE CIT(A) HAS GIVEN A CATEGORICAL FINDING THAT THE RE IS PROOF OF PAYMENT OF RS.9,45,000/- AVAILABLE ON RECORD AND TH EREFORE THE INDEXATION HAS TO BE ALLOWED ON PAYMENT OF RS.9,45, 000/-. THE LD. DEPARTMENTAL REPRESENTATIVE COULD NOT CONTROVERT TH E ABOVE FACTUAL FINDING GIVEN BY THE LD.CIT(A). 6.2 SO FAR AS THE ADDITION OF RS.9,45,000/- DURING THE IMPUGNED ASSESSMENT YEAR UNDER THE HEAD UNEXPLAINED INVESTM ENT IS CONCERNED, WE FIND THE AMOUNT OF RS.9,45,000/- WAS PAID TO MR. BHALERAO FROM TIME TO TIME OVER THE PERIOD FROM 1995 TO 2005. BE FORE THE CIT(A) THE ASSESSEE HAD SUBMITTED THE BANK ACCOUNT AND HAS SUB MITTED THAT THE ENTIRE PAYMENTS WERE MADE THROUGH CHEQUES FROM THE REGULAR BANK ACCOUNT OF THE ASSESSEE AND THE PAYMENTS WERE MADE OVER THE PERIOD FROM 1995 TO 2005 AND THEREFORE THERE IS NO JUSTIFI CATION IN ADDING THIS AMOUNT IN THE IMPUGNED ASSESSMENT YEAR 2005-06. BA SED ON THE ABOVE SUBMISSION OF THE ASSESSEE AND AFTER GOING TH ROUGH THE BANK STATEMENTS THE LD.CIT(A) DELETED THE ADDITION. NOT HING CONTRARY WAS BROUGHT TO OUR NOTICE TO NEGATE THE ABOVE FACTUAL F INDINGS OF THE LD. CIT(A). 6.3 SINCE THE LD.CIT(A) ON THE BASIS OF EVIDENCES F ILED BEFORE HIM HAS DELETED THE ADDITION OF RS.9,45,000/- MADE BY T HE ASSESSING OFFICER 7 ON ACCOUNT OF INVESTMENT FROM UNDISCLOSED INCOME U/ S.69 OF THE I.T. ACT, THEREFORE, IN ABSENCE OF ANY CONTRARY MATERIAL BROUGHT TO OUR NOTICE BY THE LD. DEPARTMENTAL REPRESENTATIVE, WE FIND NO INFIRMITY IN THE ORDER OF THE CIT(A). THE GRIEVANCE OF THE REVENUE ON THIS ISSUE ALSO ACCORDINGLY DISMISSED. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. PRONOUNCED IN THE OPEN COURT ON 28-08-2014. SD/- SD/- (SHAILENDRA KUMAR YADAV) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE DATED: 28 TH AUGUST, 2014 SATISH COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. THE CIT(A)-V, PUNE 4. THE CIT-V, PUNE 5. THE D.R, A PUNE BENCH 6. GUARD FILE BY ORDER // TRUE COPY // ASSISTANT REGISTRAR ITAT, PUNE BENCHES, PUNE