Rishi Goyal, New Delhi V. DCIT, New Delhi

ITA 1690/DEL/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1535 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 8 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-12-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2011-2012
• Appeal Filed On: 21-03-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SURENDER PAL
• Keywords: Corroborative evidences
• Section: 143(3); 143(1)

Judgement Text

ITA NO.- 1690/DEL/2017. RISHI GOYAL. PAGE 1 OF 12 IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH: F: NEW DELHI) BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER ITA NO:- 1690/DEL/2017 ( ASSESSMENT YEAR: 2011-12) RISHI GOYAL, NEW DELHI. VS. DCIT, CIRCLE-46(1), NEW DELHI. PAN NO: AALPG5610P APPELLANT RESPONDENT ASSESSEE BY : NONE REVENUE BY : SHRI SURENDER PAL, SR. DR ORDER PER ANADEE NATH MISSHRA, AM [A] THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE IMPUGNED APPELLATE ORDER DATED 06.12.2016 PASSED BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-21, NEW DELHI, [IN SHORT, LD.CIT(A)] PERTAINING TO ASSESS MENT YEAR 2011-12. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL:- 1. ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CAS E AND IN LAW THE ID. AO DCIT CIR 46(1) AND THE CIT(A)-21 ERRED IN DISALLOWING THE CL AIM OF ASSESSEE AS TO THE COST OF IMPROVEMENT EVIDENCED BY THE BILL OF THE CONTRACTOR WITHOUT VERIFYING THE SAME. NEITHER OF THEM EVEN ENDEAVORED TO ENQUIRE FROM THE COUNSEL OF THE ASSESSEE ABOUT THE MODE OF PAYMENT OR CONFIRMATION FROM THE-CONTRA CTOR. THEY PRESUMED THAT SINCE MODE OF PAYMENT IS NOT MENTIONED ON THE BILL AND SE RVICE TAX NO. OR TAN WAS NOT ITA NO.- 1690/DEL/2017. RISHI GOYAL. PAGE 2 OF 12 MENTIONED ON THE BILL THE EXPENDITURE INCURRED BY T HE ASSESSEE IS IN-GENUINE. HAD EITHER OF THEM TRIED TO CROSS EXAMINE THE TRANSACTI ON W.R.T. PROPERTY DOCUMENTS AND ASSOCIATED EXPENDITURE CLAIMED BY' THE ASSESSEE, TH EY COULD HAVE VERY WELL SATISFIED THEMSELVES ABOUT THE GENUINENESS OF THE COST INCURR ED. THEY COMPLETELY IGNORED THE CONDITION OF THE PROPERTY, WHICH WAS AT THE TIME OF PURCHASE AND WHICH WAS AT THE TIME OF SALE AFTER RENOVATION. CONSEQUENT UPON SUCH MODIFICATION THE ASSESSEE WAS ABLE TO FETCH GOOD AMOUNT DESPITE SLOW-DOWN IN PROP ERTY MARKET. 2. THE ID. AO AND CIT(A) ERRED IN DISALLOWING ASSES SEE'S CLAIM AS TO PAYMENT OF BROKERAGE ON THEIR PRESUMPTION OF NO SUCH PAYMENT. NEITHER OF THEM ASKED FOR THE BILL OF THE BROKER NOR MADE ANY ENDEAVOR TO VERIFY THE CLAIM MADE BY THE ASSESSEE. EVEN IN NOWHERE DURING THE COURSE OF ASSESSMENT PRO CEEDINGS THE AO OR THE CIT(A) QUESTIONED THE GENUINENESS OF PAYMENT MADE TO BROKE R OR HAD ASKED TO PRODUCE ANY DOCUMENTARY EVIDENCE IN SUPPORT OF THE CLAIM MA DE BY THE ASSESSEE. THEY EVEN APPEAR TO BE UNAWARE OF PREVAILING PRACTICE OF PROP ERTY BROKERAGE BUSINESS AND BROKERAGE CHARGED BY DEALERS FOR MATERIALIZING PROP ERTY SALE AND PURCHASE TRANSACTIONS. THE LEARNED AO PROBABLY PRESUMED THAT ASSESSEE HIMSELF FOUND SELLER AND BUYER OF THE SUBJECT PROPERTY. 3. BOTH THE ID. AO AND CIT(A) ERRED IN DISALLOWING ASSESSEE'S CLAIM AS TO PRE-CLOSURE CHARGES PAID TO ING VYSYA BANK. THE ASSESSEE WAS FO RCED TO PRE-CLOSE SUBJECT LOAN TO PROVIDE CLEAR TITLE TO THE BUYER OF PROPERTY, FR EE FROM ALL ENCUMBRANCES AND MORTGAGES. IN THIS VIEW, IT CAN BE CLEARLY APPREHEN DED THAT SUCH EXPENDITURE FALLS UNDER 'EXPENDITURE INCURRED WHOLLY AND EXCLUSIVELY IN CONNECTION WITH SUCH TRANSFER' AND HAD SUCH EXPENDITURE NOT INCURRED, THE SUBJECT TRANSACTION OF SALE OF SUBJECT PROPERTY COULD NOT HAVE TAKEN PLACE AND CONSEQUENTL Y NO QUESTION OF CAPITAL GAIN SUBJECT TO CAPITAL GAIN TAX. THE SIMILAR POSITION HAS BEEN UPHELD BY THE JUDGMEN T OF THE HIGH COURT OF MUMBAI (1991) 190 ITR 56(BOM) BETWEEN CIT I/S SHAKUNTALA KANTILAL: THE SALE TRANSACTION WITH MESSR COSMAS CO-OPERATIVE HOUSING SOCIETY LTD, UNDER THE AGREEMENT DATED MARCH 30, 1967, WOULD NOT RATHER WOULD NOT, HAVE MATERIALI2ED IF TH IS TRANSACTION HAD NOT MATERIALIZED, THERE WOULD PERHAPS HAVE BEEN NO QUESTION OF CAPITA L GAINS. THE SALE WOULD HAVE THEN TAKEN PLACE AT THE RATE OF RS 29 PER SQ YARD AS AGAINST RS 51 PER SQ YARD. ONE WAY OF LOOKING AT THE PROBLEM C OULD BE TO SAY THAT THE FULL VALUE OF THE CONSIDERATION IN THIS CASE WAS NOT THE APPARENT CONSIDERATION, I.E, RS 2,58,672 BUT RS.2,23,168 {IF, RS. 2,58,672 MINUS RS .35,504). 4. BOTH THE ID. AO AND THE CIT(A) ALSO ERRED IN DIS ALLOWING SET OFF OF CARRIED FORWARD SHORT TERM CAPITAL LOSS FROM A.Y. 2009-10 A GAINST THE SHORT TERM CAPITAL LOSS ARISEN DURING THE YEAR IN CONTRAVENTIO N OF PROVISIONS OF SECTION 74 OF THE INCOME TAX ACT, 1961. THEY ERRED IN TREAT ING 6 MEAGRE TRANSACTIONS OF SALE/ PURCHASE OF MUTUAL FUND UNITS AS BUSINESS TRANSACTION INVOLVING A TOTAL SALE VALUE OF RS. 13.09 LACS TO S ALE AND PURCHASE OF RS. 11.83 CRORES BY ARTIFICIALLY INTERPRETING TRANSACTI ON AS HUGE AND TREATING THE SAME AS BUSINESS TRANSACTION, WHICH IN ITSELF IS IN CORRECT AND UNJUST. THEY ARE ALSO NOT JUSTIFIED IN INVOKING CBDT CIRCULAR NO . 4/2007 DATED 15.06.2007 ITA NO.- 1690/DEL/2017. RISHI GOYAL. PAGE 3 OF 12 AND JUDGMENTS OF HON'BLE SUPREME COURT, WHICH HAVE NO RELEVANCE WITH THE PRESENT CASE. CONSEQUENT UPON WRONG INTERPRETATION, THEY ARE ALSO NOT JUSTIFIED IN REJECTING SET OFF OF CARRY FORWARD LOSSES DULY REPORTED BY THE ASSESS EE DURING THE RELEVANT ASSESSMENT YEAR AND JUSTIFIABLY ADJUSTING AGAINST INCOME DURIN G THE ASSESSMENT YEAR UNDER SCRUTINY. THEY ALSO EXCEEDED THEIR POWER IN CHANGIN G THE NATURE OF INCOME/LOSS DULY REPORTED AND CLAIMED BY THE ASSESSEE IN PRECEDING P REVIOUS YEAR (A.Y. 2009-10). THE AO IS ALSO NOT JUSTIFIED IN DISREGARDING AND EN CROACHING UPON STATED PROVISIONS OF EXPLANATION (B) TO SECTION 143(1) WHICH CLEARLY STA TES THAT 'THE ACKNOWLEDGEMENT OF THE RETURN SHALL BE DEEMED TO BE THE INTIMATION IN A CASE WHERE NO SUM IS PAYABLE BY, OR REFUNDABLE TO, THE ASSESSEE UNDER CLAUSE (C) , AND WHERE NO ADJUSTMENT HAS BEEN MADE UNDER CLAUSE (A).' FURTHER HE NEITHER ASK ED NOR EXPECTED TO ASK FOR DOCUMENTARY EVIDENCE RELATING TO DETERMINATION OF L OSS AS CLAIMED BY THE ASSESSEE IN VIEW OF NO SUCH ASSESSMENT MADE FOR THE RELEVANT AS SESSMENT YEAR. IN VIEW OF THIS THE AO IS NOT JUSTIFIED IN DISALLOW ING SET OFF OF CARRIED FORWARD LOSS CLAIM OF RS. 8,60,931/- ON ACCOUNT OF SHORT TERM CA PITAL LOSS. 5. THE CIT(A)-21 HAD DECIDED APPEAL IN A CASUAL MAN NER WITHOUT PAYING DUE ATTENTION TO THE FACTS AND SUPPORTING EVIDENCE PRODUCED BY TH E COUNSEL OF THE ASSESSEE. THIS IS EVIDENT FROM THE FACT THAT EVEN THE GROUND NOT RAIS ED IN APPEAL HAS ALSO BEEN DECIDED (REFER PARA 2 TO THE APPELLATE ORDER). 6. THAT THE APPELLANT CRAVES LEAVE TO ADD TO, ALTER , AMEND, MODIFY, SUBSTITUTE, DELETE, AND/OR RESCIND ALL OR ANY OF THE GROUNDS OF APPEAL ON OR BEFORE THE FINAL HEARING, IF NECESSITY SO ARISES. [B] VIDE ASSESSMENT ORDER DATED 28.03.2014 PASSED UNDE R SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). THE RELE VANT PORTION OF THE ASSESSMENT ORDER DATED 28.03.2014 IS REPRODUCED AS UNDER:- ITA NO.- 1690/DEL/2017. RISHI GOYAL. PAGE 4 OF 12 ITA NO.- 1690/DEL/2017. RISHI GOYAL. PAGE 5 OF 12 ITA NO.- 1690/DEL/2017. RISHI GOYAL. PAGE 6 OF 12 ITA NO.- 1690/DEL/2017. RISHI GOYAL. PAGE 7 OF 12 [C] THE ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A). V IDE IMPUGNED APPELLATE ORDER DATED 06.12.2016, THE LD. CIT(A) DISMISSED THE ASSE SSEES APPEAL. THE RELEVANT PORTION OF THE ORDER DATED 06.12.2016 OF THE LD. CIT(A) IS REPRODUCED AS UNDER: ITA NO.- 1690/DEL/2017. RISHI GOYAL. PAGE 8 OF 12 ITA NO.- 1690/DEL/2017. RISHI GOYAL. PAGE 9 OF 12 ITA NO.- 1690/DEL/2017. RISHI GOYAL. PAGE 10 OF 12 [D] THIS PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE AFORESAID IMPUGNED APPELLATE ORDER DATED 06.12.2016 OF THE L D. CIT(A). AT THE TIME OF HEARING, REVENUE WAS REPRESENTED BY SHRI SURENDER PAL, THE L EARNED SENIOR DEPARTMENTAL REPRESENTATIVE (LD. SR. DR, FOR SHORT). HOWEVER, NONE WAS PRESENT FROM THE ASSESSEES SIDE. IN THE ABSENCE OF ANY REPRESENTA TION FROM ASSESSEES SIDE, AT THE TIME OF HEARING BEFORE US, WE HEARD THE LD. SR. DR; WHO RELIED UPON THE ORDER DATED 28.03.2014 OF THE ASSESSING OFFICER AND THE AFORESA ID IMPUGNED ORDER DATED 06.12.2016 OF THE LD. CIT(A). AFTER PERUSAL OF TH E MATERIALS ON RECORD, INCLUDING THE ORDER OF THE AO AND THE AFORESAID IMPUGNED ORDER DA TED 06.12.2016 OF THE LD. CIT(A), WE FIND THAT THE LD. CIT(A) HAS PASSED SPEAKING ORD ER ON MERITS. RELEVANT PORTION OF THE IMPUGNED ORDER OF THE LD. CIT(A) HAS ALREADY BE EN REPRODUCED IN FOREGOING PARAGRAPH [C] OF THIS ORDER. WE FIND THAT THE LD. CIT(A) HAS GIV EN DETAILED REASONS FOR HIS DECISION ON MERITS IN THE AFORESAID IMPUGNED AP PELLATE ORDER DATED 06.12.2016 OF ITA NO.- 1690/DEL/2017. RISHI GOYAL. PAGE 11 OF 12 LD. CIT(A). DURING APPELLATE PROCEEDINGS IN INCOME TAX APPELLATE TRIBUNAL (ITAT, FOR SHORT) NO MATERIAL HAS BEEN BROUGHT FOR OUR CONSIDE RATION TO PERSUADE US TO TAKE A VIEW DIFFERENT FROM THE VIEW TAKEN BY THE LD. CIT(A) IN THE IMPUGNED ORDER ON MERIT. AFTER HEARING THE LD. SR. DR AND AFTER PERUSAL OF MATERIA LS ON RECORD, AND FURTHER, IN VIEW OF THE FOREGOING DISCUSSION, WE DECLINE TO INTERFERE W ITH THE AFORESAID IMPUGNED APPELLATE ORDER DATED 06.12.2016 OF LD. CIT(A), AND ACCORDIN GLY, THIS APPEAL IS DISMISSED. [E] BEFORE WE PART; WE EXPLICITLY CLARIFY THAT THE ASSESSEE WILL BE AT LIBERTY TO APPROACH ITAT FOR RESTORATION OF THE APPEAL IN ACCO RDANCE WITH PROVISO TO RULE 24 OF INCOME TAX (APPELLATE TRIBUNAL), RULES, 1963. IF THE ASSESSEE DOES APPROACH ITAT FOR RESTORATION OF THE APPEALS I N ITAT, THE MATTER WILL BE CONSIDERED IN ACCORDANCE WITH LAW HAVING REGARD TO THE FACTS AND CIRCUMSTANCES. [F] IN THE RESULT, APPEAL FILED BY ASSESSEE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 12 /12/2019. SD/- SD/- (AMIT SHUKLA) (ANADEE NATH MISSHRA) JUDICIAL MEMBER ACCOUN TANT MEMBER DATED: 12/12/2019 POOJA/- COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI ITA NO.- 1690/DEL/2017. RISHI GOYAL. PAGE 12 OF 12 DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER