Anand Vihar Promoters & Developers (P) Ltd., Jamshedpur V. ITO,Ward-1(1), Jamshedpur

ITA 160/RAN/2015

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 9581 (ITAT-RANCHI)
• Duration Of Justice: 3 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 05-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 20-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K MONDAL
• Assessee Lawyers: S K PODDAR
• Section: 142(1); 69

Judgement Text

1 ITA NO. 1 60 /RAN/ 201 5 IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI BENCH, RANCHI BEFORE SHRI N.S.SAINI , ACCOUNTANT MEMBER & SHRI PAVAN KUMAR GADALE , JUDICIAL MEMBER ITA NO. 160 /RAN/201 5 A.Y. : 20 10 - 20 11 ANAND VIHAR PROMOTERS & DEVELOPERS (P) LTD., 1 ST FLOOR, MUNESHWARI BHA WAN, BISTUPUR, JAMSHEDPUR - 831001 V S ITO, WARD - 1(1), JAMSHEDPUR P AN NO. : AA FCA 8771 J (APPELLANT ) . RESPONDENT ASSESSEE BY : SHRI S.K.PODDAR & DEVESH PODDAR, ADV. REVENUE BY :SHRI P.K.MONDAL, JCIT DATE OF HEARING : 2 5 . 05 .201 8 DATE OF PRONOUNCEMENT : 28.05 .201 8 O R D E R PER PAVAN KUMAR GADALE, JM : TH IS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT ( A ) , JAMSHEDPUR , DATED 28.09.2015 , FOR THE ASSESSMENT YEAR 20 10 - 20 11 . 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : - 1 . FOR THAT THE APPELLANT PURCHASED A PIECE OF LAND FOR A TOTAL CONSIDERATION OF RS.73 LACS OUT OF WHICH 73 LACS WAS PAID BY CHEQUE AND RS.5 LAC WAS PAID IN CASH. THE SELLER DID NOT ENCASH THE CHEQUES, AS SUCH, L D. AO MADE AN ADDITION OF RS.73 LACS AS CONCEALED INCOME. IT IS NOT UNDERSTOOD AS TO HOW RS.73 LAC PAID FOR THE PURCHASE OF LAND CAN BE CONSIDERED AS INCOME OF THE APPELLANT. 2 . FOR THAT LD. CIT(A) CONCLUDED THAT UNDISCLOSED PAYMENT OF RS.73 LACS WAS MADE TO THE PURCHASER IN CASH, AS SUCH, THESE CHEQUES WERE NOT ENCASHED. THE PAYMENT BY CHEQUE WAS CONSIDERED AS A COLOUR FULL DEVICE OF TAX EVASION. THE ADDITION OF RS.73 LACS MADE U/S 69 WAS CONFIRMED. 3 . FOR THAT THE DEED OF SALE WAS EXECUTED BY SRI GYAN CHAND MAH TO, POWER OF ATTORNEY HOLDER (POA) FOR LAND LANDLORDS WHO 2 ITA NO. 1 60 /RAN/ 201 5 WERE AGRICULTURISTS. AS IT APPEARS POA PAID IN CASH A PART OF RS.5 LACS TO ONE LANDLORD. THEY BEING AGRICULTURISTS WERE NOT WILLING TO ACCEPT CHEQUES AND MAY BE INSISTING ON POA TO GET THE AMOUNT IN CASH. THE APPELLANT MADE PAYMENT AS MENTIONED ABOVE ON THE EXECUTION OF SALE DEED. AS SUCH, ADDITION MADE U/S 69 IS ILLEGAL, INCORRECT AND UNJUSTIFIED. 4 . FOR THAT THE APPELLANT SINCE REFUSED TO PAY CONSIDERATION MONEY OF RS. 73 LACS IN CASH IN LIEU OF CHEQU E ISSUED BY HIM FOR PURCHASE OF LAND. POWER OF ATTORNEY HOLDER DESIRE TO SALE THIS LAND TO OTHER PARTY AS SUCH, HE REQUEST APPELLANT TO GIVE A POWER OF ATTORNEY EMPOWERING HIM TO NEGOTIATE AND TO FINALIZE SALE WITH OTHER PARTY BUT, NOT TO RECEIVE ANY CONSI DERATION IN HIS NAME. SRI GYAN CHAND MAHTO, POWER OF ATTORNEY HOLDER SOLD LAND TO OTHER PARTY AND COLLECTED TOTAL CONSIDERATION VALUE IN HIS NAME WITHOUT INTIMATING THE APPELLANT COMPANY. 5 . FOR THAT POA SOLD THIS LAND SUBSEQUENTLY ON 29.3.2010 TO M/S ADARSH SAHKARI GRIH NIRMANI SWABLAMBI SAMITY LTD. FOR A CONSIDERATION OF RS. 1,69,97,500/ - . THE LD. AO COMPUTED SHORT TERM CAPITAL GAIN IN THE HANDS OF THE APPELLANT BEING THE DIFFERENCE BETWEEN THE SALE CONSIDERATION SHOWN IN SUBSEQUENT DEED OF SALE LESS RS.78 L ACS VALUE FOR WHICH APPELLANT PURCHASED THE LAND. 5 FOR THAT APPELLANT HAD NOT RECEIVED ANY CONSIDERATION FROM SALE OF LAND BY POWER OF ATTORNEY HOLDER SRI GYAN CHAND MAHTO. AS SUCH, QUESTION OF ANY SHORT TERM CAPITAL GAIN TO APPELLANT DOES NOT ARISE. 6 . FOR THAT THE APPELLANT PAID RS. 5 LACS IN CASH TO POWER OF ATTORNEY HOLDER. THEREAFTER, POA AS IT LOOKS MANIPULATED ENTIRE MATTER AND KEPT LAND OWNERS IN DARK AND SUBSEQUENTLY SOLD THE LAND FOR A CONSIDERATION OF RS. 1,69,97,500/ - . APPELLANT DID NOT RECEIVE AN Y AMOUNT OF OUT SALE CONSIDERATION OF SECOND SALE. IN ANY CASE, CHEQUES OF RS.73 LACS HANDED OVER TO POA WERE NOT ENCASHED. APPELLANT HAD NOT MADE ANY PAYMENT IN CASH BEYOND RS.5 LACS AND APPELLANT DID NOT GET ANY PAYMENT OUT OF SALE PROCEED. AS SUCH, ASSE SSMENT OF INCOME OF RS.73 LACS AND SHORT TERM CAPITAL GAIN IS ILLEGAL, INCORRECT AND AGAINST THE FACTS. 7. FOR THAT OTHER GROUNDS IN DETAIL WILL BE ARGUED AT THE TIME OF HEARING. 3 . BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF PROMOTERS AND FILED THE RETURN OF INCOME ELECTRONICALLY FOR THE ASSESSMENT YEAR 2010 - 2011 ON 17.09.2010 WITH TOTAL INCOME OF RS.13,69,010/ - AND THE RETURN OF INCOME WAS DULY PROCESSED U/S.143(1) OF 3 ITA NO. 1 60 /RAN/ 201 5 THE ACT AND THE CASE WAS SELECTED FOR SCRUTINY. SUBSE QUENTLY, NOTICE U/S.143(2) & 142(1) OF THE ACT WERE ISSUED TO THE ASSESSEE. IN COMPLIANCE, THE AR OF THE ASSESSEE APPEARED FROM TIME TO TIME AND CASE WAS DISCUSSED . THEREAFTER THE AO COMPLETED THE ASS ESSMENT AND MADE VARIOUS ADDITIONS AND ASSESSED TOTAL I NCOME AT RS.1,78,76,085/ - AND PASSED ORDER U/S.143(3) OF THE ACT, DATED 18.03.2013 . 4 . AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE HAS FILED AN APPEAL WITH THE CIT(A). IN THE APPELLATE PROCEEDINGS THE ASSESSEE ARGUED THE GROUNDS AND REITERATED THE SUB MISSIONS MADE BEFORE THE AO. THE CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF ASSESSEE AND THE FINDINGS OF AO, PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 5 . AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE HAS FILED AN APPEAL BEFORE THE TRIBUNAL. 6 . LD. A R BEFORE US SUBMITTED THAT THE CIT(A) HAS ERRED IN CONFIRMING THE ADDITION MADE U/S.69 OF THE ACT . LD. AR FURTHER SUBMITTED THAT THE ASSESSEE HAS PURCHASED THE LAND FROM SRI MIHIR MAHTO THROUGH POWER OF ATTORNEY FOR CONSIDERATION OF RS.78,00,000/ - VIDE SALE DEED DAT ED 28.07.2009 AND EXECUTED IN BETWEEN SRI MIHIR MAHATO, SRI BALRAM MAHATO AND ANANDVIHAAR PROMOTERS AND DEVELOPERS (P) LTD. AND OUT OF THE TOTAL AMOUNT RS.5 LAKHS WAS PAID BY CASH AND REST OF THE AMOUNT I.E. RS.73,00,000/ - WAS PAID THROUGH CHEQUE, HOWEVER, TH E CHEQUES WERE NOT ENCASHED TILL THE FINANCIAL YEAR. THE AO MADE ADDITION ON SURMISES AND THE AMOUNT HAS BEEN PAID BY THE ASSESSEE AND, THEREFORE, ON ASSESSE D 4 ITA NO. 1 60 /RAN/ 201 5 INCOME AND MADE THE ADDITION TOWARDS SHORT TERM CAPITAL GAINS OF RS.9 1,97,500/ - . LD.AR FURTHER SUBMITTED THAT BEFORE THE AO IT WAS BROUGHT TO THE KNOWLEDGE THAT THE PROPERTY WAS AGAIN SOLD IN PARTS AND IT WAS REGISTERED IN THE OTHERS NAME. FURTHER AS THERE IS NO COMPLIANCE IN RESPECT OF THE ENCASHMENT OF CHEQUES, THE SALE D EED WAS CANCELLED AND ALSO CIVIL SUIT WAS FILED AND THEREFORE, PRAYED THAT THE ASSESSEE SHALL NOT BE LIABLE TO PAY ANY TAX AS THE SALE DEED HAS BEEN CANCELLED. 7 . CONTRA, DR SUBMITTED THAT THE CIT(A) HAS ENHANCED THE ADDITION BASED ON THE FACTS AND ALSO TH E LD. AR HAS BROUGHT TO THE KNOWLEDGE N EW FACTS WITH RESPECT TO THE PROPERTY WAS AGAIN SOLD AND PRAYED FOR DISMISSAL OF THE ASSESSEES APPEAL. 8 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE SOLE DISPUTED ISSUE RAISED BY THE ASSESSEE THAT THE CHEQUES OF SALE TRANSACTION OF LAND HAS NOT BEEN ENCASHED AND, THEREFORE, THE SALE DEED WAS CANCELLED AND THE LD. A R DEMONSTRATED BEFORE US WITH COPY OF THE DEED OF TRANSFER BY SALE DATED 29.03.2010 AND ALSO COPY OF CANCELLATION DEED DATED 27.02.2013, WHICH IS PLACED AT PAGES 53 TO 58 OF THE PAPER BOOK. FURTHER LD. AR SUBMITTED THAT A CIVIL SUIT HAS BEEN FILED BEFORE THE CIVIL JUDGE, SENIOR DIVISION II, SERAIKELLA - KHARSAWAN IN TS NO.18/2010, DATED 30.11.2015, COPY OF WHICH IS PLACED AT 59 TO 75 OF THE PAP ER BOOK, WHERE THE SALE DEED WAS CANCELLED AND THE FINAL ORDER HAS BEEN PASSED IN FAVOUR OF THE ASSESSEE. ON THE QUERY FROM THE BENCH TO THE LD. AR AS TO WHETHER THESE FACTS WERE BROUGHT TO THE KNOWLEDGE OF THE LOWER AUTHORITIES, 5 ITA NO. 1 60 /RAN/ 201 5 LD. AR SUBMITTED THAT THE CIVIL SUIT WAS FILED SUBSEQUENT TO PASSING OF THE ORDER OF CIT( A ), THEREFORE, THERE IS NO OCCASION TO PLACE THESE DETAILS BEFORE THE CIT(A), WHEREAS LD.DR VEHEMENTLY OBJECTED THAT THESE ARE THE NEW FACTS AND EVIDENCE FILED BEFORE THE TRIBUNAL, WHICH THE L OWER AUTHORITIES WERE DEPRIVED OF TO VERIFY AND EXAMINE. THEREFORE, IN THE INTEREST OF SUBSTANTIAL JUSTICE, WE CONSIDERING THE FACTS AND LEGAL POSITION AND THE CIVIL SUIT AND THE LITIGATION WHICH WAS FOUGHT BY THE ASSESSEE IN THE COURT , FOUND THAT THE CIT(A) HAS PASSED THE ORDER ON 28.09.2015, WHEREAS THE JUDGMENT OF THE CIVIL SUIT HAS BEEN PASSED ON 30.11.2015, WHICH IS SUBSEQUENT TO THE ORDER PASSED BY THE CIT(A), THEREFORE, TH ERE WAS NO OCCASION TO BRING TH ESE FACT ON RECORD. ACCORDINGLY, WE REMI T THIS DISPUTED ISSUE TO THE FILE OF AO, WHO SHALL VERIFY AND EXAMINE THE COMPLETENESS OF THE INFORMATION WHICH HAS BEEN FILED BEFORE THE TRIBUNAL AND ALSO CALL FOR THE INFORMATION AS AND WHEN TO BE REQUIRED AND SHALL PASS ORDER. FURTHER THE ASSESSEE SHAL L BE PROVIDED ADEQUATE OPPORTUNITY OF HEARING AND SHALL COOPERATE IN FURNISHING THE INFORMATION BEFORE THE AO. THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 9 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTIC AL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 28 / 05 /201 8 SD/ - SD/ - ( N.S.SAINI ) ( PAVAN KUMAR GADALE ) ACCOUNTANT MEMBER JUDICIAL MEMBER RANCHI, DATED 28 / 05 /201 8 PRAKASH KUMAR MISHRA , SR. PS 6 ITA NO. 1 60 /RAN/ 201 5 COPY OF THE ORDER FORWARDED TO : BY ORDER, //TRUE COPY// SR.PS, ITAT, RANCHI 1. THE APPELLANT ANAND VIHAR PROMOTERS & DEVELOPERS (P) LTD., 1 ST FLOOR, MUNESHWARI BHAWAN, BISTUPUR, JAMSHEDPUR - 831001 2. THE RESPONDENT ITO, WARD - 1(1), JAMSHEDPUR 3. THE CIT(A) CONCERNED 4. CIT , CONCERNED 5. DR, ITAT, RANCHI 6. GUARD FILE.