SHRI. B RANGANATHAN, CHENNAI V. ITO NON CORPORATE WARD 19(2), CHENNAI

ITA 1681/CHNY/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 5422 (ITAT-CHENNAI)
• Duration Of Justice: 3 year(s) 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-09-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 16-05-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R ANITA
• Keywords: Sale consideration of property below Jantri Value; Capital Gains
• Section: 50C

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . , , , BEFORE SHRI DUVVURU RL REDDY, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ I.T.A. NO.: 1681/CHNY/2018 / ASSESSMENT YEAR : 2013-14 SHRI. B. RANGANATHAN, 37, FIRST MAIN ROAD, JAWAHAR NAGAR, CHENNAI 600 004. [PAN: AAJPR 2197L] VS. INCOME TAX OFFICER, NON CORPORATE WARD -19(2), CHENNAI 600 034. NEW JURISDICTION ACIT, NON CORPORATE CIRCLE -10(1), CHENNAI 600 034. ( / APPELLANT) ( / RESPONDENT) / APPELLANT BY : NONE / RESPONDENT BY : MS. R. ANITA, ADDL. CIT /DATE OF HEARING : 08.09.2021 /DATE OF PRONOUNCEMENT : 16.09.2021 /O R D E R PER S. JAYARAMAN, ACCOUNTANT MEMBER: THE ASSESSEE FILED THIS APPEAL AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)- 12, CHENNAI IN ITA NO. 25/CIT(A)-12/2016-17 DATED 20.02.2018 FOR THE ASSESSMENT YEAR 2013-14. :-2-: ITA NO: 1681/CHNY/2018 2. THIS CASE WAS HEARD THROUGH VIDEO CONFERENCING. THE HEARING LETTER SENT TO THE ASSESSEE WAS SERVED ON 04.08.2021 AND THE ACKNOWLEDGMENT IS PLACED ON RECORD , HOWEVER, NONE APPEARED FOR THE ASSESSEE. WE FIND THAT THIS APPEAL WAS FILED WITH A DELAY OF 20 DAYS. THE ASSESSEE FILED AN AFFIDAVIT IN WHICH IT WAS STATED THAT THE ASSESSEE HAS BEEN INDISPOSED ON AND OFF DUE TO EXTENSIVE TRAVEL IN CONNECTION WITH THE PARTY WORK AND PREPARATIONS FOR THE ENSUING KARNATAKA AND PARLIAMENTARY ELECTIONS AND HENCE COULD NOT FILE THE APPEAL IN TIME. THEREFORE, THE DELAY IN FILING THE APPEAL MAY BE CONDONED AND THE APPEAL MAY BE DECIDED ON MERITS. 3. SINCE, NONE APPEARED FOR THE ASSESSEE , IN THE CIRCUMSTANCES, WE HEARD THE CASE FROM THE LD. DR AND CONDONE THE DELAY IN THE INTERESTS OF JUSTICE. 4. THE ASSESSEE FILED THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF THE LEARNED ASSESSING OFFICER IS OPPOSED TO LAW AND CONTRARY TO THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE LEARNED ASSESSING OFFICER ERRED IN NOT ADHERING TO THE PROVISIONS OF SECTION 2(47) OF THE INCOME TAX ACT, 1961 3. THE LEARNED CIT(A) ERRED IN NOT ALLOWING THE ENTIRE EXPENDITURE OF RS. 46,00,000/- 4. THE LEARNED CIT(A) ERRED IN NOT ALLOWING THE INCOME OFFERED BY THE POWER OF ATTORNEY HOLDER, THEREBY THE INCOME IS DOUBLY TAXED. 5. THE APPELLANT CRAVES LEAVE OF THE APPELLATE TO RAISE FURTHER GROUNDS DURING THE COURSE OF PROCEEDINGS. :-3-: ITA NO: 1681/CHNY/2018 6. THE APPELLANT PRAYS THAT CAPITAL GAINS AS ARRIVED AT BY THE APPELLANT BE TAXED. 5. WE HEARD THE LD. DR. THE LD. DR TAKING THROUGH THE ORDERS OF THE LOWER AUTHORITIES SUBMITTED THAT THE ASSESSEE HAD REGISTERED POWER OF ATTORNEY ON 12.09.2012 IN FAVOUR OF SHRI GK PRASAD , TO SELL HIS PROPERTY AND CLAIMED TO HAVE RECEIVED RS.35 LAKHS ONLY FROM SHRI GK PRASAD TOWARDS THE SALE. ACCORDING TO THE ASSESSEE, SHRI. GK PRASAD AFTER TAKING POSSESSION SPENT RS. 46,00,900/- AND DEVELOPED THE PROPERTY AND SOLD TO RS. 81,00,900/- AND THEREFORE, THE AMOUNT INCURRED BY THE POWER OF ATTORNEY HOLDER TO DEVELOP THE PROPERTY BECAUSE OF WHICH THE SALE CONSIDERATION WAS ENHANCED TO RS. 81,00,900/- HAS TO BE ALLOWED WHILE COMPUTING THE CAPITAL GAIN . HOWEVER, THE AO DETERMINED THE CAPITAL GAIN AT RS. 62,36,625/-. AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT (A) AND SUBMITTED THAT THE POWER OF ATTORNEY HOLDER SHRI. GK PRASAD HAS INCURRED THE FOLLOWING EXPENDITURE WHICH HAS TO BE ALLOWED. 1. COMPOUND CONSTRUCTION 8,25,946/- 2. LAND FILLING 9,90,658/- 3. BUILDING RENOVATION 16,05,433/- 4. OTHER EXPENSES 11,78,863/- TOTAL 46,00,900/- 5.1 AFTER CONSIDERING THE ENTIRE MATERIAL, THE LD. CIT(A) HELD THAT THE PROPERTY SOLD WAS VALUED AT RS. 81,00,900/- AND NOT AT RS. 35,00,000/- AS :-4-: ITA NO: 1681/CHNY/2018 CLAIMED BY THE ASSESSEE. THE AO HAS READILY ADOPTED THE VALUE OF RS. 81,00,900/- WHICH IS ALSO AS PER SECTION 50C OF THE ACT. IT IS SEEN THAT CERTAIN AMOUNTS HAVE BEEN SPENT ON THE PROPERTY TO DEVELOP, BECAUSE OF WHICH IT FETCHED THE VALUE OF RS. 81,00,900/- INSTEAD OF RS. 35,00,000/-, AGREED UPON AT PRE-DEVELOPMENT STAGE. THE AR WAS ASKED TO SUBMIT THE EVIDENCES TO SHOW THAT THE POWER OF ATTORNEY HOLDER HAD INCURRED EXPENDITURE OF RS. 46,00,900/- AS CLAIMED BY THE ASSESSEE. THE AR HAS PRODUCED THE COPY OF THE INCOME TAX STATEMENT OF SHRI PRASATH. IT IS SEEN THAT IN THE P&L A/C FOR THE YEAR ENDED 31.03.2013, SHRI. PRASATH HAS SHOWN FOLLOWING AMOUNTS: COMPOUND CONSTRUCTION 8,25,946/- LAND FILLING 9,90,658/- BUILDING RENOVATION 16,05,433/- 34,22,037/- THERE ARE NO CLEAR EVIDENCES ON THE CLAIM OF BALANCE EXPENDITURE. THOUGH CERTAIN AMOUNTS ARE DEBITED IN THE P&L A/C UNDER OTHER HEADS, IT CANNOT BE SAID TO BE INCURRED EXCLUSIVELY FOR THE COST OF IMPROVEMENT IN THE ABOVE PROPERTY. SINCE RS. 34,22,037/- IS FOUND TO BE INVESTED FOR THE DEVELOPMENT OF THE PROPERTY BECAUSE OF WHICH THE PROPERTY FETCHED A HIGH VALUE TOO WHEN IT WAS SOLD, THE EXPENSES SUBSEQUENTLY (AS CONCLUDED BY ASSESSING OFFICER THAT APPELLANT HAS SOLD FOR RS. 81,00,900/- AND NOT RS. 35,00,000/- (PRE-DEVELOPMENT STAGE), HAVE TO BE TAKEN AS PART OF COST OF IMPROVEMENT. ACCORDINGLY, THE LD CIT :-5-: ITA NO: 1681/CHNY/2018 (A) DIRECTED THE ASSESSING OFFICER TO ALLOW COST OF IMPROVEMENT OF RS. 34,22,037/- AND TAX THE CAPITAL GAINS IN THE CASE OF THE APPELLANT AND THUS HE PARTLY ALLOWED THE APPEAL. THUS, IT IS CLEAR FROM THE ABOVE THAT NEITHER THE ASSESSEE NOR THE POWER OF ATTORNEY HOLDER PROVED THE OTHER EXPENSES OF RS. 11,78,863/- CLAIMED BY THE ASSESSEE/POWER OF ATTORNEY HOLDER BEFORE THE LOWER AUTHORITIES. EVEN BEFORE THE HONBLE TRIBUNAL ALSO, THE ASSESSEE HAS NOT PLACED RELEVANT MATERIAL IN SUPPORT OF HIS CLAIM AND THEREFORE, THE LD. DR SUBMITTED THAT THE ASSESSEES APPEAL MAY BE DISMISSED. 6. WE HEARD THE LD. DR AND GONE THROUGH THE RELEVANT MATERIAL. THE ONLY ISSUE IS THAT OUT OF RS. 46,00,900/- CLAIMED TO HAVE BEEN INCURRED BY THE POWER OF ATTORNEY HOLDER TO DEVELOP THE PROPERTY BECAUSE OF WHICH THE SALE CONSIDERATION WAS ENHANCED TO RS. 81,00,900/-, THE LD. CIT(A) DID NOT ALLOW THE ASSESSEES CLAIM OF OTHER EXPENSES OF RS. 11,78,863/- ALONE FOR THE REASON THAT THERE ARE NO CLEAR EVIDENCES ON THIS CLAIM TO ESTABLISH THAT THIS EXPENDITURE WAS INCURRED EXCLUSIVELY FOR THE ABOVE PROPERTY. AGGRIEVED, THE ASSESSEE FILED THIS APPEAL. HOWEVER, WE FIND THAT NEITHER THE ASSESSEE HAS FILED ANY MATERIAL / EVIDENCE NOR CAUSED TO FILE ANY MATERIAL / EVIDENCE TO DISLODGE THE FINDINGS RECORDED BY THE LD. CIT (A). THEREFORE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT (A) AND HENCE DISMISS THE ASSESSEES APPEAL. :-6-: ITA NO: 1681/CHNY/2018 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON 16 TH SEPTEMBER, 2021 AT CHENNAI. SD/- ( . ) (DUVVURU RL REDDY) /JUDICIAL MEMBER SD/- ( ) (S. JAYARAMAN) /ACCOUNTANT MEMBER /CHENNAI, /DATED: 16 TH SEPTEMBER, 2021 JPV /COPY TO: 1. / APPELLANT 2. /RESPONDENT 3. ( )/CIT(A) 4. /CIT 5. /DR 6. [ /GF