Income Tax Officer, Amritsar. V. Sh. Vipan Khanna, Amritsar.

ITA 170/ASR/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 7838 (ITAT-AMRITSAR)
• Duration Of Justice: 2 year(s) 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 11-06-2019
• Assessment Year: 2011-2012
• Appeal Filed On: 06-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: R L MEHRA; RAJAT MEHRA LD CAS
• Keywords: Additional evidence; Cost of acquisition; Fair market value; Valuation report
• Section: 143(3); 234B; 143(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SH. VIKRAM SINGH YADAV , ACCOUNTANT MEMBER AND SH. N.K.CHOUDHRY, JUDICIAL MEMBER ITA NO.170(ASR)/2017 ASSESSMENT YEAR:2011-12 INCOME TAX OFFICER WARD-4(4), AMRITSAR VS. SH. VIPAN KHANNA, 159, GREEN AVENUE, AMRITSAR. [PAN:ABSPK 4368A] (APPELLANT) (RESPONDENT) CROSS OBJECTION NO.27(ASR)/2017 (ARISING OUT OF ITA NO.170/ASR/2017) ASSESSMENT YEAR:2011-12 SH. VIPAN KHANNA, 159, GREEN AVENUE, AMRITSAR. [PAN:ABSPK 4368A] VS. INCOME TAX OFFICER WARD-4(4), AMRITSAR (CROSS OBJECTOR) (RESPONDENT) APPELLANT BY: SH. CHARAN DASS (LD. DR) RESPONDENT BY: SH. R.L. MEHRA & SH. RAJAT MEHRA (LD. CAS) DATE OF HEARING: 11.06.2019 DATE OF PRONOUNCEMENT: 22.07.2019 ORDER PER N.K.CHOUDHRY, JM: THESE ARE APPEAL AND C.O. PREFERRED BY THE REVENUE DEPARTMENT AND ASSESSEE RESPECTIVELY, CHALLENGING THE ORDE R DATED 24.01.2017 PASSED BY THE LD. CIT(A), AMRITSAR U/ S 250(6) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED AS THE ACT) 2. ITA NO.170/ASR/2017 & C.O. NO.27/ASR/2017 ITO VS. VIPIN KHANNA WHEREBY THE LD. CIT(A) WHILE PARTLY AFFIRMING THE A SSESSMENT ORDER PASSED U/S 143(3) OF THE ACT, ALLOWED THE APPEAL OF THE ASSESSEE PARTLY. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HAD FILED ITS RETURN OF INCOME ON DATED 27/03/2012 DECLARING THE TOTAL INCOME AT RS.19,67,230/- WHICH WAS PROCESSED U/S 143(1) OF THE ACT ON DATED 20/06/2012 THEREAFTER STATUTORY NOTICES HA VE BEEN ISSUED TO THE ASSESSEE AND THE ADDITIONS OF RS.1,30,10,406/ -, RS.4,15,896/- AND RS.1,50,000/- HAVE BEEN MADE ON ACCO UNT OF LONG TERM CAPITAL GAIN, UNDECLARED PRE-REQUISITES AND HOUSE HOLD EXPENSES RESPECTIVELY. THE ASSESSMENT ORDER WAS CHALLENGED BEFORE THE LD. CIT(A) WHO WHILE DELETING THE ADDITIONS OF RS.1,20,96,570/- AND RS.4,37,839/- PARTLY SUSTAINED THE ADDITION OF RS.1,30,10,406/- BY HOLDING AS UNDER: DECISION:- THE ASSESSEE WAS THE JOINT OWNER OF RESIDENTIAL PROPERTY AT 27, MAQBOOL ROAD, AMRITSAR WHICH WAS CONSTRUCTED IN A PLOT MEASURING 3801.30 SQ. YARDS W HERE THE SHARE OF THE ASSESSEE WAS 36.82%. THE SAID PROPERTY WAS SOLD IN FY 2010-11. THE ASSESSEE HAD SHOWN NIL CAPI TAL GAINS IN THE COMPUTATION OF INCOME. THE SAID RESIDENTIAL PROPERTY WAS PURCHASED IN THE FY 1970-71 BY THE ASSESSEE AND HIS FAMILY MEMBERS FOR RS.234,500/- THROUGH 11 REGISTRATION DEEDS IN THE NAMES OF DIFFE RENT FAMILY MEMBERS. THE ASSESSEE HAD MENTIONED IN THE R ETURN OF INCOME THAT THE COST OF ACQUISITION AFTER INDEXA TION HAS BEEN TAKEN FOR THE IMPUGNED PROPERTY AT RS 508,54,7 02/- ON THE BASIS OF REPORT OF THE APPROVED VALUER SH RATAN SINGH DATED 16- 07-2010 AGAINST THE FULL VALUE OF CONSIDE RATION OF RS 531,00,000/-. THE AO DISCREDITED THE VALUATION REPORT OF THE APPROVED VALUER SH RATAN SINGH FOR THE REASONS THAT IT IS CONTRADICTORY IN ITSELF AND THE LAND RATES HAVE BEE N ADOPTED WITHOUT GIVING ANY COMPARABLE INSTANCE OF PURCHASE / SALE FOR THE AREA. ALSO THAT THE COST OF CONSTRUCTION WA S ESTIMATED 3. ITA NO.170/ASR/2017 & C.O. NO.27/ASR/2017 ITO VS. VIPIN KHANNA ON HIGHER SIDE WITHOUT APPLYING THE ESTABLISHED PWD OR CPWD RATES. THEREFORE THE AO ALLEGED THAT VALUATION REPORT IS MANAGED AFFAIR OF ASSESSEE TO SHOW MUCH HIGHER V ALUE AS ON 01-04-1981. FURTHER THAT VALUATION REPORT IS SHO WING TWO DIFFERENT YEARS OF CONSTRUCTION I.E. 1975 AND 1980. THE AO DID NOT REFER THE PROPERTY TO THE DEPARTMENT AL VALUATION OFFICER FOR VALUATION DUE TO PAUCITY OF T IME. THE AO OBTAINED THE CPWD RATES FROM THE VALUATION OFFICER AND APPLIED THE NORMAL COST INFLATION INDEX ON AVERAGE RATE OF 10% PER YEAR FROM 1970-71 TO 1980-81 ON THE LAND RATES AS SHOWN AT THE TIME OF PURCHASE AND ESTIMATED THE VALUE OF LAND AS ON 01-04-1981 AT RS 10,00,000/- AS AGAINST THE VALUE OF LAND ESTIMATED BY THE VALUATION OFFICER AT RS 45,61,560/-. SIMILARLY THE VALUE OF CONSTRUCTION WAS TAKEN @ RS 2265/- PER SQ MTR I.E. RS 210.50 PER SQ FT AS ON 01-01-1992 AS PER CPWD RA TES FOR DOUBLE STORY RESIDENTIAL HOUSE OF GOOD QUALITY. THE LONG TERM CAPITAL GAIN WAS COMPUTED BY THE AO BY WORKING OUT THE VALUE OF PROPERTY BY APPLYING COST INFLATION INDEX AND WORKED OUT THE NET TAXABLE LONG TERM CAPITAL GAIN I N THE HANDS OF THE ASSESSEE AT RS 130,10,406/-. IN THE VALUATION REPORT SH RATAN SINGH (APPROVED VALUER) HAD ESTIMATED THE FAIR MARKET VALUE OF THE PROPERTY AS ON 01-04-1981 AT RS 71,53,000/- WHICH INCLUDES T HE ESTIMATED VALUE OF BUILDING AT RS 25,91,000/- AND T HE VALUE OF LAND AT RS 45,62,000/- AT THE RATE OF RS 1200/- PER SQ YARDS. AS AGAINST THIS THE AO ESTIMATED THE VALUE O F LAND AT RS 10,00,000/- AS ON 01-04-1981 BY APPLYING COST INFLATION INDEX FROM 1970-71 TO 1981-82 ON THE PURCHASE PRICE OF RS 234,500/- IN 1970-71, AND ESTIMATED THE MARKET VALUE OF PROPERTY AS ON 01-04- 1981 AT RS 31,26,481/-. I.E. AS FOR CONSTRUCTION THE AO APPLIED THE RATE OF RS 210.50 SQ FT AS ON 01-01-199 2 AS PER CPWD RATES FOR DOUBLE STORY RESIDENTIAL HOUSE OF GO OD QUALITY AND ESTIMATED THE MARKET VALUE OF PROPERTY AS ON 01- 04-1981 AT RS.21,26,481/- AND ARRIVED AT THE MARKET VALUE OF CONSTRUCTION ON THE DATE OF SALE I.E. 14-07-2010 AT RS 75,97,628/- BY APPLYING INDEXATION. IN THE ASSESSMENT ORDER THE AO APPLIED THE NORMAL COST INFLATION INDEX ON AVERAGE RATE OF 10% PER YEA R FROM 4. ITA NO.170/ASR/2017 & C.O. NO.27/ASR/2017 ITO VS. VIPIN KHANNA 1970-71 TO 1980-81 ON THE LAND RATE SHOWN AT THE TI ME OF PURCHASE AND ESTIMATED THE VALUE OF LAND AS ON 01-0 4-1981 AT RS 10,00,000/-. I AM IN AGREEMENT WITH THE APPEL LANT THAT THE METHOD ADOPTED BY THE AO FOR DETERMINING THE FA IR MARKET VALUE OF THE PROPERTY AS ON 01-04-1981 BY AP PLYING COST INFLATION INDEX TO THE COST OF PURCHASE IN 197 0-71 IS INCORRECT. THE METHOD APPLIED BY THE AO IS PROVED I NCORRECT BY HIS OWN FINDINGS WHEN HE DETERMINED BY APPLYING COST INFLATION INDEX THE MARKET VALUE OF THE PROPERTY AT ONLY RS.1,47,07,628/-ON THE DATE OF SALE OF PROPERTY ON 14-07- 2010, WHEREAS ITS MARKET PRICE ON THE DATE OF SALE WAS ACTUALLY RS. 531,00,000/-. THE AO WAS ALSO INCORREC T IN ARRIVING AT THE MARKET VALUE OF LAND AT RS 71,10,00 0/- AS ON 14-07-2010 ( ON THE DATE OF SALE OF PROPERTY) BY AP PLYING COST INFLATION INDEX WHEREAS THE MARKET VALUE OF LAND ON THE BASIS OF REPORT OF THE REGISTERED VALUER WAS RS 324 ,32,692/- AS ON 14-07-2010. TO DETERMINE THE MARKET VALUE OF THE PROPERTY, THE BEST EVIDENCE OF THE MARKET VALUE OF THE PROPER TY IS THE PRICE AT WHICH IT IT COULD ACTUALLY BE SOLD. AS POINTED BY THE APPELLANT IN THE WRITTEN SUBMISSIONS EVEN BY ADOPTING THE METHOD FOLLOWED BY THE ASSESSING OFFIC ER, THE REVERSE CALCULATION OF COST INFLATION INDEX FROM 20 10-11 TO 1.4.1981 BACKWARDS, THE MARKET VALUE OF LAND MEASUR ING 3801.30 SQ.YDS WORKS OUT TO RS. 1965 PER SQ.YD ON 1 .4.1981 WHEREAS THE REGISTERED VALUER HAS ESTIMATED THE FAI R MARKET VALUE @ RS. 1,200/- PER SQ. YD ON 1.4.1981. THIS IS APPARENT FROM THE FOLLOWING WORKING GIVEN BY THE APPELLANT. SALE PROCEEDS AS ON 14.7.2010 = RS. 5,31,00,0007- AREA OF LAND 3,801,30 SQ.YDS. PRICE PER SQ.YD. ON 14.7.2010 RS. 13969 PER SQ.YD (53100000/3801.30 SQ.YD) COST INFLATION INDEX ON 1.4.1981 100 COST INDEX ON 14.7.2010 711 FAIR MARKET VALUE AS ON 1.4.1981 RS.1965/- P.SQ.YD (13969X100/711) THE APPELLANT HAD RELIED ON THE VALUATION REPORT OF THE APPROVED VALUER DATED 16-07-2010 AND DETERMINED THE LONG TERM CAPITAL GAIN AT NIL IN THE RETURN OF INCOME ON THE BASIS OF THIS VALUATION REPORT, WHICH WAS NOT ACCEPTED BY TH E AO. THE AO HAD OBJECTIONS THAT THE LAND RATES HAVE BEEN ADOPTED B Y THE REGISTERED VALUER ON THE BASIS OF VERBAL ENQUIRIES WITHOUT 5. ITA NO.170/ASR/2017 & C.O. NO.27/ASR/2017 ITO VS. VIPIN KHANNA GIVING ANY COMPARABLE INSTANCE OF PURCHASE/SALE FOR THE AREA. BUT AT THE SAME TIME THE VALUATION METHOD ADOPTED BY THE AO BY APPLYING COST INFLATION INDEX WAS ITSELF INCORRECT METHOD. AS AGAINST THIS, THE MARKET VALUE OF LAND A S ON 01- 04-1981 AS PER REGISTERED VALUERS REPORT WAS ESTIM ATED AT RS 45.61.560/- BY APPLYING THE RATE OF RS 1200/- PER SQ YARDS. THE AO HAD ESTIMATED THE MARKET VALUE OF LAND AS ON 01-04-1981 AT RS 10,00,000/- BY APPLYING COST INFLATION INDEX ON AVERAGE RATE OF 10% PER YEAR FRO M 1970-71 TO 1980-81 ON THE VALUE OF LAND AT THE TIME OF PURC HASE, WHICH METHOD OF DETERMINING THE MARKET VALUE OF LAN D AS ON 01-04-1981 IS INCORRECT. THE AO HAD OBJECTIONS THAT THE LAND RATES HAVE BEEN ADOPTED BY THE REGISTERED VALUER ON THE BASIS OF VERBAL ENQUIRIES WITHOUT GIVING ANY COMPAR ABLE INSTANCE OF PURCHASE/SALE FOR THE AREA. HOWEVER, AO HAS HIMSELF NOT RELIED UPON ANY COMPARABLE CASE OF PROPERTY IN THE VICINITY OF THE IMPUGNED PROPERTY OF THE APPELLANT AS ON 01-04-1981 TO VERIF Y THE MARKET VALUE OF LAND WHICH WAS DETERMINED AT RS 10,00,000/- BY HIS OWN ESTIMATION BY APPLYING COST INFLATION METHOD AND SIMPLY REJECTED THE REPORT OF THE APPROV ED VALUER ON THE GROUND THAT IT BASED ITS CALCULATIONS ON VER BAL ENQUIRIES AND WITHOUT GIVING ANY COMPARABLE INSTANC E OF PURCHASE/SALE OF THAT AREA. THE APPELLANT HAS SUBMITTED THE COPY OF THE CERTIFICATE OF THE SUB REGISTRAR, AMRITSAR VIDE HIS CERTIFICATE DATED 15-04-2014 AS ADDITIONAL EVIDENCE WHICH HAS BEEN ADMITTED UNDER RULE 46A(L)(C) AS ABO VE. THE SAID CERTIFICATE OF THE SUB REGISTRAR, AMRITSAR IS A VITAL PIECE OF EVIDENCE REGARDING THE MARKET VALUE OF THE LAND AND IT CLEARLY STATED THAT THE MARKET VALU E OF THE LAND AND IT CLEARLY STATED THAT THE MARKET VALU E OF THE IMPUGNED LAND AS ON 01-04-1981 WAS RS.1400/- PE R SQ YARDS. EVEN THE AO HAD MADE EFFORT TO GET THE LAND RATES FROM THE STATE REVENUE AUTHORITIES I.E. SUB REGISTR AR DURING THE ASSESSMENT PROCEEDINGS AS STATED ON PAGE 10 OF THE ASSESSMENT ORDER BUT THE SAID INFORMATION WAS NOT R ECEIVED TILL THE FINALIZATION OF ASSESSMENT. AS AGAINST THE MARKET RATE OF IMPUGNED LAND @RS 1400/- PER SQ YDS AS PER THE REPORT OF THE SUB REGISTRAR. AMRITSAR, THE GOVERNMENT APPROVED VALUER HAD VALUED THE IMPUGNED LAND @RS 1200/- PER SQ YDS AS ON 01-04-1981 6. ITA NO.170/ASR/2017 & C.O. NO.27/ASR/2017 ITO VS. VIPIN KHANNA ONLY AND APPLIED IT TO DETERMINE THE THE MARKET PRICE OF LAND AS ON 01-04-1981 AT RS 45.61.560/-. THE MARKET RATE ADOPTED BY THE GOVERNMENT APPROVED VALUER WAS EVEN LOWER THAN THAT FURNISHED BY THE SUB- REGISTRAR, AMRITSAR AND THEREFORE THE MARKET RATE OF IMPUGNED LAND @RS. 120 0/- PER SQ YARD IS UPHELD. THE VALUATION OF LAND AS ON 01.0 4.1981 AT RS( 1200X3801.30)= RS. 45,61,650/- IS UPHELD, AS AG AINST ESTIMATED VALUE OF RS. 10,00,000/- BY AO. AS REGARDS THE MARKET VALUE OF CONSTRUCTION OF THE IMPUGNED PROPERTY AS ON 01-04-1981, THE APPROVED VA LUER HAD VALUED IT AT RS.25,91,000/- AS AGAINST RS.21,26,481/- DETERMINED BY THE AO. AS STATED BY THE APPELLANT, THE PROPERTY IN QUESTION IS A BUILDING H AVING SPECIAL AND EXCELLENT FEATURES SUCH AS FIRST CLASS CONSTRUCTION WITH SPECIAL ARCHITECTURAL AND DECORATIVE FEATURES WITH TEAK WOOD, MARBLE FLOORING, KOTA STONE, PINK MARBLE, WAL L PANELING IN DRAWING ROOMS /BED ROOMS, SPECIAL UNDER GROUND CONDUCT WIRING, SPECIAL WHITE AND COLOURED SANITARY INSTALLATIONS, GRANITE IN ROAD, HAVING 14 INCH THIC K WALLS ETC MEANING THEREBY THAT THE QUALITY OF CONSTRUCTION WA S HIGH CLASS. I AM IN AGREEMENT WITH THE AO THAT HE HAD TAKEN THE VALUE OF CONSTRUCTION @ RS 2265/-PER SQ MTS I.E . RS 210.50 PER SQ FT AS ON 01-01-1992 AS PER CPWD RATES FOR A DOUBLE STORY RESIDENTIAL HOUSE OF GOOD QUALIT Y AS AGAINST THE AVERAGE RATE AS ON 01-04-1981 FOR THE C OVERED AREA WITH ANCILLARY CONSTRUCTIONS AS MENTIONED IN T HE VALUATION REPORT AT RS 256.48 PER SQ FT, WHICH WAS RIGHTLY CONSIDERED BY AO TO BE TOO HIGH. THE CPWD RATES AS ON 01-01-1992 FOR A DOUBLE STORY RESIDENTIAL HOUSE OF GOOD QUALITY WAS RS 210.50 PER SQ FT ONLY, MEANING THEREBY THAT THE RATE WOULD HAVE BEEN EVEN LOWER AS ON 01-04-1981, THEREFORE THE AO WAS JUSTIF IED IN APPLYING THE CPWD RATES OF RS 210.50 PER SQ FT TO W ORK OUT THE MARKET VALUE OF CONSTRUCTION AS ON 01-04-1981 A T RS 21,26,481/-, WHICH IS UPHELD. IN THE CERTIFICATE OF THE GOVERNMENT APPROVED REGISTERED VALUER DATED 19-07-2016 SUBMITTED DURING APPEAL PROCEEDINGS CONFIRMED THAT ON ACCOUNT OF TYPING MIS TAKE IN HIS REPORT DATED 16-07-2010 THE YEAR OF CONSTRUCTIO N WAS MENTIONED AS 1980/1975 INSTEAD OF 1962-63 AND HIS VALUATION REPORT DATED 16-07-2010 MAY BE TREATED AS AMENDED TO THAT EXTENT. THE SAID MISTAKE IN THE VAL UATION REPORT IS THEREFORE IGNORED. 7. ITA NO.170/ASR/2017 & C.O. NO.27/ASR/2017 ITO VS. VIPIN KHANNA THE AO HAD APPLIED COST INFLATION INDEX FROM 01-01- 1992 TO 14-07-2010 TO DETERMINE THE INDEXED MARKET VALUE OF CONSTRUCTION AS ON 14-07-2010 AT RS 75,97,628/- BUT HE HAS NOT GIVEN ANY BASIS / REASON FOR NOT APPLYING T HE COST INFLATION INDEX FROM 01-04-1981 TO 14-07-2010 TO DE TERMINE THE INDEXED MARKET VALUE OF CONSTRUCTION AS ON 14-0 7-2010, THEREFORE THE MARKET VALUE OF CONSTRUCTION AS ON 14 -07-2010 AT RS 75,97,628/- DETERMINED BY AO IS DISMISSED. THE INDEXED MARKET VALUE OF THE LAND AS ON 14-07- 2010 AFTER INDEXATION FROM 01.04.1981 TO 14.07.2010 WORKS OUT TO RS. 324,32,692 /- AND THE MARKET VALUE OF CONSTRUCTION AS ON 14-07 2010 WORKED OUT TO RS 151,19,279/- I.E. THE MARKET VALUE OF PROPERTY AS ON 14- 07-2010 I.E. ON THE DATE OF SALE OF PROPERTY AFTER INDEXATION WORKED OUT TO RS (324,32,692 + 151,91,279) = RS.4,75,51,971/-. THEREFORE THE LONG TERM CAPITAL GAIN ON THE SALE OF PROPERTY AS ON 14-07-2010 WORKS OUT AS UNDER- (I) MARKET VALUE OF LAND AS ON 01-04-1981 = RS 45,61,560/- (II) MARKET VALUE OF CONSTRUCTION = RS 21.26.481 / - (I)+ (II)- MARKET VALUE OF PROPERTY AS ON 01-04-1981 = RS 66,88041/- INDEXED MARKET VALUE OF PROPERTY AS ON 14-07-2010 (66,88,041X711/100) = RS. 4,75,51,971/- ( AFTER INDEXATION) ACTUAL SALE CONSIDERATION = RS.5,31,00,000/- THE LONG TERM CAPITAL GAINS =RS (531,00,000- 475,51,971) LONG TERM CAPITAL GAIN = RS 55,48,029/- AFTER DEDUCTING THE INDEXED COST OF ACQUISITION OF THE PROPERTY AT RS 4,75,51,971/-FROM THE ACTUAL SALE CONSIDERATION OF RS 531,00,000/-,THE LONG TERM CAPI TAL GAIN WORKED OUT TO RS 55,48,029/-. THE SHARE OF THE APPELLANT IN THE LONG TERM CAPITAL GAIN @ 36.83% WORKS OUT TO RS 20,43,339 /-. THE APPELLANT HAD ALREADY INVESTED RS 11,29,504/- I N NEW RESIDENTIAL HOUSE AS DECLARED IN THE RETURN OF INCOME WHICH HAS NOT BEEN DISPUTED BY THE AO. THEREFORE THE NET LONG TERM CAPITAL GAIN OF THE APPELLANT ON THE IMPUGNED TRANSACTION OF PROPERTY IS DETERMINED AT R S 8. ITA NO.170/ASR/2017 & C.O. NO.27/ASR/2017 ITO VS. VIPIN KHANNA (20,43,339 - 11,29,504) = RS 913,835/-, WHICH IS UPHELD. THE APPELLANT GETS RELIEF OF RS (130,10,406 - 913,835) = RS 1,20,96,570/-. III) THE GROUND OF APPEAL NO. 20 TO 25 ARE AGAINST THE, ADDITION OF RS.415,896/- ON ACCOUNT OF ALLEGED PERQ UISITE IN RESPECT OF CREDIT CARD USE. AS PER AIR INFORMATION ASSESSEE HAD INCURRED EXPENSES THROUGH HIS CREDIT CARD TO TH E TUNE OF RS.715,896/-. WHEN CONFRONTED THE ASSESSEE HAD STAT ED THAT NIRMAL SPINNING MILLS P LTD NEEDED THE FACILITY OF CREDIT CARD FOR THE PURPOSE OF BUSINESS BUT SINCE CREDIT C ARD IS NEVER ISSUED IN THE NAME OF THE COMPANY, THE COMPAN Y GOT THE CREDIT CARD ISSUED IN THE NAME OF THE ASSESSEE WHO IS A DIRECTOR OF THE COMPANY. HOWEVER, THE CREDIT CARD W AS USED FOR THE PURPOSE OF BUSINESS OF NIRMAL SPINNING MILL S P LTD AND THE SAID COMPANY MADE PAYMENT IN RESPECT OF THE SUM OF RS 715,896/-. THE SAID COMPANY HAD GIVEN CERTIFI CATE DATED 25-03-2014 IN THIS REGARD WHICH WAS SUBMITTED BEFORE THE AO IN THE ASSESSMENT PROCEEDINGS ALONG WITH THE DETAILS OF PAYMENTS OF RS 715,896/- MADE TO THE CITY BANK. THE AO HOWEVER CONFRONTED THE ASSESSEE WHY THE EXPENSES IN CURRED BY THE COMPANY ON PETROL, TELEPHONE, TRAVELLING AND ENTERTAINMENT THROUGH THE CREDIT CARD SHOULD NOT BE CONSIDERED AS A PERQUISITE IN THE HANDS OF THE ASSE SSEE. THE AO AFTER ALLOWING BENEFIT OF ONE PAYMENT OF RS 300, 000/- WHICH WAS DEBITED TO ASSESSEES OWN ACCOUNT IN THE BOOKS OF THE COMPANY, THE BALANCE RS 415,896/- WAS ADDED BACK TO THE INCOME AS UNDECLARED PERQUISITE. IN THE WRITTEN SUBMISSIONS FILED BY THE APPELLANT IN THE APPEAL PROCEEDINGS HE REITERATED THE SUBMISSIONS MADE BEFORE THE AO. HE ALSO STATED THAT THE ASSESSM ENT FOR A Y 2006- 07 WAS REOPENED ON ACCOUNT OF CREDIT CARD PAYMENT OF RS 291,123/- BUT DID NOT MAKE ANY ADDITI ON OF ACCOUNT OF CREDIT CARD PAYMENTS. LIKEWISE NO ADDITI ON WAS MADE ON ACCOUNT OF CREDIT CARD PAYMENT IN AY 2011-1 2. THE COMPANY ALSO INCURRED EXPENSES OF RS 764,530/- IN A Y 2013-14 THROUGH CREDIT CARD AND SIMILAR CERTIFICATE FROM THE COMPANY AND EXPLANATION WAS FURNISHED IN A Y 2013-1 4 BEFORE THE AO AND NO ADDITION WAS MADE ON THIS ACCOUNT. IT WAS STATED THAT THE CREDIT CARD OF CITI BANK IS USED FOR THE PURPOSE OF THE BUSINESS OF THE COMPANY SINCE 01-04-1982 AND NO ADDITION WAS MADE O N ACCOUNT OF CREDIT CARD IN ANY OF THE YEARS WHEN ASS ESSMENT WAS MADE U/S 143(3). IV) DECISION:- AS PER AIR INFORMATION ASSESSEE HAD INCURRED EXPENSES THROUGH HIS CREDIT CARD TO THE TUNE OF RS 715,896/-. 9. ITA NO.170/ASR/2017 & C.O. NO.27/ASR/2017 ITO VS. VIPIN KHANNA WHEN CONFRONTED THE ASSESSEE HAD STATED THAT NIRMAL SPINNING MILLS P LTD NEEDED THE FACILITY OF CREDIT CARD FOR THE PURPOSE OF BUSINESS BUT SINCE CREDIT CARD IS NEVER ISSUED IN THE NAME OF THE COMPANY, THE COMPANY GOT THE CREDIT CARD ISSUED IN THE NAME OF THE ASSESSEE WHO IS A DIRECTO R OF THE COMPANY. THE APPELLANT STATED THAT THE CREDIT CARD WAS USED FOR THE PURPOSE OF BUSINESS OF NIRMAL SPINNING MILL S P LTD AND THE SAID COMPANY MADE PAYMENT IN RESPECT OF THE SUM OF RS 715,896/-. THE SAID COMPANY HAD GIVEN CERTIFI CATE DATED 25-03-2014 IN THIS REGARD WHICH WAS SUBMITTED BEFORE THE AO IN THE ASSESSMENT PROCEEDINGS ALONG WITH THE DETAILS OF PAYMENTS OF RS 715,896/- MADE TO THE CITY BANK. THE AO HOWEVER CONFRONTED THE ASSESSEE WHY THE EXPENSES INCURRED BY THE COMPANY ON PETROL, TELEPHO NE, TRAVELLING AND ENTERTAINMENT THROUGH THE CREDIT CAR D SHOULD NOT BE CONSIDERED AS A PERQUISITE IN THE HANDS OF THE ASSESSEE. THE AO AFTER ALLOWING BENEFIT OF ONE PAYMENT OF RS 300,000/- WHICH WAS DEBITED TO ASSESSEES OWN ACCOUNT IN THE BOOKS OF ACCOUNT OF THE COMPANY, THE BALANCE RS 415,896/- WAS ADDED BACK TO THE INCOME AS UNDECLARED PERQUISITE. THE DETAILS OF THE PAYMENTS MADE TO THE CITI BANK I N RESPECT OF CREDIT CARD IN THE NAME OF THE APPELLANT WERE FILED BEFORE THE AO AND IN THE APPEAL PROCEEDINGS AND PER USED. IN RESPECT OF PAYMENTS OF RS 415,896/-FROM CREDIT CARD , THE AO HAD NOT POINTED OUT WHICH SPECIFIC EXPENDITU RE WAS INCURRED FOR THE PERSONAL USE OF THE APPELLANT. FURTHER AS EXPLAINED BY THE APPELLANT, THE PAYMENT MADE BY THE COMPANY THROUGH THE CREDIT CARD IN THE NAME OF THE APPELLANT DEBITED IN THE BOOKS OF ACCOUNTS OF THE COMPANY NIRMAL SPINNING MILLS P LTD IN THE RESPECTIVE HEADS OF ACCOUNTS AND WERE INCURRED FOR THE BUSINESS PURPOSE S OF THE COMPANY. MOREOVER AS POINTED OUT BY THE APPELLANT, NO ADDITI ON WAS MADE U/S 143(3) ON ACCOUNT OF CREDIT CARD PAYME NTS IN THE NAME OF THE APPELLANT EVEN THOUGH THE CREDIT CA RD OF CITI BANK WAS USED FOR THE PURPOSE OF THE BUSINESS OF TH E COMPANY SINCE 01-04-1982 SUCH AS A Y 2006-07, 2011- 12 AND 2013-14. THOUGH EACH YEAR IS INDEPENDENT, BUT NEVERTHELESS, CONSISTENCY SHOULD HAVE BEEN FOLLOWED AND NO ADDITION MADE ON ACCOUNT OF CREDIT CARD PAYMENTS IN THE YEAR UNDER CONSIDERATION. 10. ITA NO.170/ASR/2017 & C.O. NO.27/ASR/2017 ITO VS. VIPIN KHANNA ACCORDINGLY, IN VIEW OF THE ABOVE DISCUSSION, THE ADDITION OF RS 415,896/- WAS NOT JUSTIFIED AND THE SAID ADDITION IS DELETED. (V) THE GROUNDS OF APPEAL NO. 26 TO 33 ARE AGAINST THE ADDITION ON ACCOUNT OF HOUSEHOLD EXPENSES. LOOKING TO THE SIZE, STANDARD OF LIVING OF THE FAMILY AND THE FACT THAT HE WAS MAINTAINING HIS RESIDENCE AT DIFFERENT PLACES AT AM RITSAR, PANCHKULA AND MUMBAI, THE AO CONSIDERED THE HOUSE H OLD EXPENSES DECLARED AT RS 437,839/- AS LOW AND MADE T HE ADDITION OF RS 150,000/-. IN THE WRITTEN SUBMISSIONS FILED BY THE APPELLANT I N APPEAL PROCEEDINGS IT WAS STATED THAT AFTER THE SALE OF RESIDENTIAL BUNGLOW AT 27, MAQBOOL ROAD, AMRITSAR I N 2010 THE ASSESSEE SHIFTED TO 159 GREEN AVENUE, AMRITSAR IN F Y 2010-11. THEREFORE THE RESIDENTIAL HOUSE OF THE ASS ESSEE WAS ONLY IN AMRITSAR DURING THE F Y 2010-11. AS REG ARDS HIS RESIDENCE IN PANCHKULA, THE APPELLANT STATED THAT T HE SAID HOUSE NO. 343, SECTOR 21, PANCHKULA WHICH WAS NOT OWNED BY THE APPELLANT BUT ON RENT. MOREOVER THE ASSESSEE NEVER MAINTAINED ANY RESIDENTIAL HOUSE IN MUMBAI AT ANY TIME IN HIS LIFE. IT WAS SUBMITTED THAT THE HOUSE HOLD EXPENSES OF RS 437,839/- WERE IN ADDITION TO THE ITEMS DEBITED SEP ARATELY TO HIS CAPITAL ACCOUNT NAMELY BANK CHARGES RS 562/-, ICICI PRUDENTIAL LIFE INSURANCE RS 25,000/-, MEDICLAIM IN SURANCE RS 19165/-, LIP RS 53,287/-, HDFC LIFE INSURANCE RS 10,264/-, INTEREST PAID TO LIC RS 34,841/- AND PERS ONAL ACCIDENT INSURANCE RS 1756/- TOTALING TO RS 144,875 /- . THE APPELLANT ARGUED THAT THE AO HAS NOT POINTED OUT AN Y EXPENDITURE WHICH HAS NOT BEEN ACCOUNTED FOR BY THE ASSESSEE. DECISION :- IN THE ASSESSMENT ORDER LOOKING TO THE SIZE, STANDARD OF LIVING OF THE FAMILY AND THE FACT THAT HE WAS MAINTAINING HIS RESIDENCE AT DIFFERENT PLACES AT AM RITSAR, PANCHKULA AND MUMBAI, THE AO CONSIDERED THE HOUSE H OLD EXPENSES DECLARED AT RS. 437,839/- AS LOW AND MADE THE ADDITION OFRS.150,000/-. THE AO HAS NOT POINTED OUT THE NUMBER OF FAMILY MEMBERS OF THE APPELLANT, HIS EXPENDITURE ON RENT ( IF ANY), ELECTRICITY, CONVEYANCE, HOUSEHOLD EXPENSES ETC WHI CH WERE INCURRED BY THE APPELLANT AND THE SAME WERE IN EXCE SS OF THE HOUSE HOLD EXPENDITURE DECLARED BY THE APPELLANT AT RS 437,839/- . THE ONUS LIES UPON THE AO TO PROVE THAT CERTAIN EXPENSES HAVE BEEN INCURRED BY THE ASSESSEE IN ADDI TION TO 11. ITA NO.170/ASR/2017 & C.O. NO.27/ASR/2017 ITO VS. VIPIN KHANNA THE HOUSEHOLD EXPENSES DECLARED BY HIM IN HIS RETUR N. THE REVENUE ONLY AFTER DISCHARGING ITS OWN ONUS CAN ASK THE ASSESSEE TO EXPLAIN THE SOURCE OF THE SAME. MOREOVER THE AO HAD OMITTED TO OBSERVE THAT THE HOUSE HOLD EXPENSES OF RS 437,839/- INCURRED BY THE APPELLANT WERE IN ADDITION TO THE ITEMS DEBITED SEP ARATELY TO HIS CAPITAL ACCOUNT NAMELY BANK CHARGES RS 562/-, I CICI PRUDENTIAL LIFE INSURANCE RS 25,000/-, MEDICLAIM IN SURANCE RS19165/-, LIP RS.53,287/-, HDFC LIFE INSURANCE RS.10,264/-, INTEREST PAID TO LIC RS.34,841/- AND P ERSONAL ACCIDENT INSURANCE RS.1756/- TOTALING TO RS.144,875 /- . THE ADDITION OF RS.150,000/- MADE ON ACCOUNT OF LOW HOUSEHOLD WITHDRAWALS WAS WITHOUT ANY EVIDENCE AND CANNOT BE SUSTAINED. IN VIEW OF THE STATED FACTS AND DISCUSSION, THE ADDITION OF RS 150,000/- IS DELETED . (VI) THE GROUND OF APPEAL NO. 34, 35 AND 39 ARE AGA INST THE CHARGING OF INTEREST U/S 234A, 234B AND 234C. T HE CHARGING OF INTEREST UNDER THESE SECTIONS IS MANDAT ORY BUT CONSEQUENTIAL IN NATURE AND THE AO IS DIRECTED TO R ECOMPUTE THE INTEREST UNDER THESE SECTIONS AFTER GIVING EFFE CT TO THIS ORDER. 7. IN THE RESULT, APPEAL IS PARTLY ALLOWED . 3. THE REVENUE DEPARTMENT AS WELL AS THE ASSESSEE CHALLENGED THE IMPUGNED ORDER BEFORE US. THE GROUNDS R AISED BY THE REVENUE DEPARTMENT ARE AS UNDER: I) WHETHER ON THE FACTS & CIRCUMSTANCES OF THE CA SE LD. CIT(A) IS RIGHT IN LAW & FACTS BY IN DELETING THE A DDITION OF RS.1,20,96,570/ - AS THE A.O. HAS RIGHTLY DETERMINED THE MARKET RATE OF THE LAND AT RS. 10,00,000/- AS ON 01.04.1981 BY APPLYING COST OF INFLATION INDEX ON A VERAGE RATE OF 10% PER YEAR FROM 1970-71 TO 1980-81 ON THE VALUE OF LAND AT THE TIME OF PURCHASE. II) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE LD.CIT(A) IS RIGHT IN LAW & FACTS BY DELETING THE A DDITION OF RS. 4,37,839/- AS THE A.O. HAS RIGHTLY DONE THE ADD ITION OF RS. 4,37,839/- ON ACCOUNT OF PERQUISITE IN THE HAND S OF THE ASSESSEE AS THE EXPENSES INCURRED BY THE COMPANY ON 12. ITA NO.170/ASR/2017 & C.O. NO.27/ASR/2017 ITO VS. VIPIN KHANNA PETROL, TELEPHONE, TRAVELLING & ENTERTAINMENT THROU GH THE CREDIT CARD. III) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE LD.CIT(A) IS RIGHT IN LAW & FACTS BY DELETING THE A DDITION OF RS. 1,50,000/- WHEREAS THE A.O. WAS RIGHT IN MAKING ADDITION OF RS. 1,50,000/- ON ACCOUNT OF LOW HOUSE' HOLD EXPENSES. 4. LET US TO DECIDE FIRST, THE APPEAL OF THE REVENUE DEPARTMENT. 5. HAVING HEARD THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. AS PER ASSESSMENT ORDER, THE ASSESSEE WAS A JOINT OWNER QUA RESIDENTIAL PROPERTY NO.27, SITUATE D AT MAQBOOL ROAD, AMRITAR WHICH WAS CONSTRUCTED ON A PLOT MEASURING 3801.30 SQ. YARDS, IN WHICH THE SHARE OF THE ASSESSEE WAS36.82%. THE SAID RESIDENTIAL PROPERTY WAS PURCHASED AT RS.2,34,500 BY THE ASSESSEE AND HIS FAMILY MEMBERS IN F. Y. 1970-71 BY WAY OF 11 REGISTRATION DEEDS IN FAVOUR OF DIFFERENT FAMILY MEMBERS AND THE COST OF ACQUISITION AFTER INDEXAT ION OF THE PROPERTY WAS TAKEN AT RS.508,54,702/-, ON THE BASI S OF REPORT 16/07/2010 OF THE APPROVED VALUER SH. RATA N SINGH, AGAINST THE FULL OF CONSIDERATION OF RS.5,31,00,000/- . THE ASSESSING OFFICER DISCREDITED THE VALUATION REPORT HOWEVER , DID NOT REFER THE PROPERTY TO THE DEPARTMENTAL VALUATIO N OFFICER FOR THE VALUATION OF THE PROPERTY UNDER CONSIDERATION DUE TO PAUCITY OF TIME. THE ASSESSING OFFICER OBTAINED THE CPWD RATES F ROM THE VALUATION OFFICER AND APPLIED THE NORMAL COST INFLATIO N INDEX ON AVERAGE RATE OF 10% PER YEAR FROM 1970-71 TO 1980-8 1 ON THE LAND RATES AS SHOWN AT THE TIME OF PURCHASE AND ESTIMATED THE VALUE OF LAND AS ON 01/04/1981 AT RS. 10,00,000/- AS A GAINST 13. ITA NO.170/ASR/2017 & C.O. NO.27/ASR/2017 ITO VS. VIPIN KHANNA THE VALUE OF LAND ESTIMATED BY THE VALUATION OFFICER AT RS.45,61,560/-. THE ASSESSING OFFICER, ALSO TAKEN THE VALU E OF CONSTRUCTION @ RS.2256/- PER SQ. METER I.E. RS.210.50 PER SQ. FT AS ON 01/01/1992 AS PER CPWD RATES FOR DOUBLE STORY RESI DENTIAL HOUSE OF GOOD QUALITY AND THUS WORKED OUT THE LONG TE RM CAPITAL GAIN IN THE HANDS OF THE ASSESSEE AT RS.130,10,40 6/-. HOWEVER, THE LD. CIT(A) WHILE RELYING UPON THE VALUA TION REPORT OF SH. RATAN SINGH (APPROVED VALUER) AND CONSIDERING THE FACT THAT THE METHOD ADOPTED BY THE ASSESSING OFFICER FOR DETERMINING THE FAIR MARKET VALUE AS ON 01/01/1981 B Y APPLYING COST INFLATION INDEX TO THE COST OF PURCHASE IN 1970-71 AS INCORRECT. THE LD. CIT(A) FURTHER HELD THAT TO DETERM INE THE MARKET VALUE OF THE PROPERTY, THE BEST EVIDENCE OF TH E MARKET VALUE OF THE PROPERTY IS THE PRICE AT WHICH IT IS COULD ACTUALLY BE SOLD AND THE VALUATION METHOD HAD ADOPTED BY THE ASSE SSING OFFICER BY APPLYING COST INFLATION INDEX IS INCORRECT. FU RTHER THE ASSESSING OFFICER HAS HIMSELF NOT RELIED UPON ANY COMPARABL E CASES OF PROPERTIES IN THE VICINITY OF THE IMPUGNED PR OPERTY OF THE APPELLANT AS ON 1 ST APRIL, 1981 TO VERIFY THE MARKET VALUE OF THE LAND WHICH WAS DETERMINED AT RS.10,00,000/- BY HIS OWN ESTIMATION BY APPLYING COSTS INFLATION METHOD AND BY SI MPLY REJECTING THE REPORT OF THE APPROVED VALUER ON THE GROUND THAT IT BASED ITS CALCULATIONS ON VERBAL ENQUIRIES AND WITHOUT GIVING ANY COMPARABLE INSTANCE OF PURCHASE/SALE OF THAT AREA. FURT HER THE LD. CIT(A) ALSO CONSIDERED THE COPY OF THE CERTIFICATE DA TED 15/04/2014 AS ADDITIONAL EVIDENCE WHICH HAS BEEN ADMITT ED UNDER RULE 46A(1)(C) AS ABOVE. THE SAID CERTIFICATE OF THE SUB- REGISTRAR, AMRITSAR IS A VITAL PIECE OF EVIDENCE QUA MA RKET VALUE OF THE LAND AND IT CLEARLY STATED THAT THE MARKET VAL UE OF THE 14. ITA NO.170/ASR/2017 & C.O. NO.27/ASR/2017 ITO VS. VIPIN KHANNA IMPUGNED LAND WAS SHOWN AS ON 01/04/1981 @ RS.1400/- P ER SQ. YARDS. THE LD. CIT(A) FURTHER OBSERVED THAT DURIN G THE ASSESSMENT PROCEEDINGS, EVEN THOUGH AO HAD MADE EFFORTS T O GET THE LAND RATES FROM THE STATE REVENUE AUTHORITIE S I.E. SUB- REGISTRAR BUT THE SAID INFORMATION COULD NOT BE RECEIVE D TILL THE FINALIZATION OF THE ASSESSMENT. THE LD. CIT(A) ALSO OBSER VED THAT AS AGAINST THE MARKET RATE OF IMPUGNED LAND @ 1400 P ER SQ. YARDS AS PER REPORT OF THE SUB-REGISTRAR, AMRITSAR, THE GOVERNMENT APPROVED VALUER HAD VALUED THE IMPUGNED LAND @ RS.1200/- PER SQ. YARDS AS ON 01/04/1981 ONLY AND APPLI ED IT TO DETERMINE THE MARKET PRICE OF LAND AS ON 01/04/1981 A T RS.45,61,560/- THUS, THE MARKET RATE ADOPTED BY THE G OVT. APPROVED VALUER WAS EVEN LOWER THAN THAT FURNISHED BY THE SUB- REGISTRAR, AMRITSAR AND THEREFORE THE MARKET RATE OF IMPUGNED LAND @ 1200/- PER SQ. YARD AND IN TOTAL AT RS.45,61,6 50/- WAS UPHELD AS AGAINST THE ESTIMATED VALUATION OF RS.10,00,0 00/- BY ASSESSING OFFICER. 5.1 WITH REGARD TO THE MARKET VALUE OF CONSTRUCTION OF TH E IMPUGNED PROPERTY AS ON 01/04/1981, THE APPROVED VAL UER HAD VALUED THE IMPUGNED PROPERTY AT RS.25,91,000/- AS AG AINST RS.21,26,481/- AS DETERMINED BY THE AO. AS IT WAS CLAIM ED BY THE ASSESSEE/APPELLANT THAT THE PROPERTY IN CONSIDERATIO N WAS A BUILDING HAVING SPECIAL AND EXCELLENT FEATURES SUCH AS F IRST CLASS CONSTRUCTION WITH SPECIAL ARCHITECTURAL AND DECORATIVE FE ATURES WITH TEAK WOOD, MARBLE FLOORING, KOTA STONE, PINK MA RBLE, WALL PANELING IN DRAWING ROOMS/BED ROOMS, SPECIAL UNDERGROU ND CONDUIT WIRING, SPECIAL WHITE AND COLORED SANITARY INSTA LLATIONS, GRANITE IN ROAD, HAVING 14 INCH THICK WALLS ETC. MEANI NG THEREBY 15. ITA NO.170/ASR/2017 & C.O. NO.27/ASR/2017 ITO VS. VIPIN KHANNA THAT THE QUALITY OF CONSTRUCTION WAS HIGH CLASS, THEREFOR E, THE LD. CIT(A) CAME INTO AGREEMENT WITH THE AO THAT HE HAD T AKEN THE VALUE OF CONSTRUCTION @ RS.2265/- PER SQ. MTS. I.E. 210.5 0 PER SQ. FT. AS ON 01/01/1992 AS PER CPWD RATES FOR A DOUBLE STORY RESIDENTIAL HOUSE OF GOOD QUALITY AS AGAINST AVERAGE R ATES AS ON 01/04/1981 WITH ANCILLARY CONSTRUCTIONS AS MENTIONED IN THE VALUATION REPORT AT RS.256.48 PER SQ. FT., WHICH WAS RI GHTLY CONSIDERED BY AO TO BE TOO HIGH THEREFORE, THE LD. CI T(A) UPHELD AND JUSTIFIED THE ACTION OF THE ASSESSING OFFICER WHILE WORKING OUT THE CONSTRUCTION COSTS AT RS.21,26,481/- AS ON 1 ST APRIL, 1981 , APPLYING CPWD RATES OF RS.210.50 PER SQ. FT. . THE L D. CIT(A) ON THE BASIS OF AFORESAID REASONS WORKED OUT THE COST OF ACQUISITION OF THE PROPERTY AT RS.4,75,51,971/- (RS.3,24,32,692/- + 151,19,279/-) AS MARKET OF THE L AND INDEXED MARKET VALUE AS ON 14/07/2010 AFTER INDEXATI ON FROM 1 ST APRIL, 1982 AND RS.15,19,279/- AS MARKET VALUE OF CONST RUCTION AS ON 14/07/2010 AND DEDUCTED THE SAID AMOUNT FROM TH E ACTUAL SALE CONSIDERATION OF RS.5,31,00,000/- AND WORKED OUT T HE LONG TERMS CAPITAL GAIN AT RS.55,48,029/- AND ULTIMATELY W ORKED OUT THE CAPITAL GAIN OF RS.20,43,339/- AS @ 36.83% AS SHARE OF THE ASSESSEE IN THE LONG TERM CAPITAL GAIN AND RESULTANTLY DELETED THE ADDITION OF RS.1,20,96,570/- OUT OF TOTAL ADDITI ON OF 1,30,10,406/- ON ACCOUNT OF LONG TERM CAPITAL GAIN AS DETERMINED BY THE ASSESSING OFFICER. 5.2 WE HAVE INDEPENDENTLY APPLIED OUT MIND TO THE MATE RIAL AVAILABLE ON RECORD, ORDERS PASSED BY THE AUTHORITIES B ELOW AND RIVAL SUBMISSIONS OF THE PARTIES. THE LD. CIT(A) WHILE DECIDING THE ISSUE QUA LONG TERM CAPITAL GAIN NOT ONLY RELIED UPON 16. ITA NO.170/ASR/2017 & C.O. NO.27/ASR/2017 ITO VS. VIPIN KHANNA VALUATION REPORT GIVEN BY THE REGISTERED VALUER BUT ALSO TAKEN INTO CONSIDERATION THE CERTIFICATE DATED 15/04/2014 ISSU ED BY THE SUB-REGISTRAR, AMRITSAR WHEREIN THE MARKET VALUE OF THE LAND AS ON 01/04/1981 HAS BEEN DETERMINED AT RS.1400 PER SQ. YARD WHEREAS THE REGISTERED VALUER HAS TAKEN THE VALUE OF THE PROPERTY UNDER QUESTION AT RS.1200/- , WHICH UNDISPUTED LY WAS AT LOWER SIDE, THEREFORE, THE LD. CIT(A) HAS RELIED U PON THE VALUATION REPORT. THE LD. CIT(A) ALSO POINTED OUT TH E CERTAIN DISCREPANCIES AND SURMISES OBSERVED BY THE ASSESSING OFFICER WHILE WORKING OUT THE LONG TERM CAPITAL AND VALUING THE INDEX COSTS. THE LD. CIT(A) THOUGH UPHELD THE ACTION OF THE A SSESSING OFFICER IN TAKING THE VALUATE OF CONSTRUCTION @ 2265 A S TAKEN BY THE ASSESSING OFFICER ON THE BASIS OF CPWD RATES FOR A DO UBLE STORY RESIDENTIAL HOUSE OF GOOD QUALITY, HOWEVER WHILE COMING TO THE INDEXED MARKET VALUE OF THE LAND AS ON 14/07/201 0 RELEVANT FOR THE ASSESSMENT YEAR INVOLVED, WORKED OUT THE INDEX MARKET VALUE OF LAND AT RS.3,24,32,629/- AND MARKET VALUE O F THE PROPERTY AS ON 14/07/2010 AT RS.4,75,51,971/- ONLY WH ICH IN OUR CONSIDERED OPINION THE LD. CIT(A) HAS THOROUGHLY A ND EXTENSIVELY GONE INTO THE RELEVANT DETAILS AND DETERM INED THE LONG TERM CAPITAL GAIN ON THE BASIS OF THE MATERIAL A VAILABLE ON RECORD AND TAKING INTO CONSIDERATION FACTS AND CIRCUMSTANCE S OF THE CASE AND THE REVENUE DEPARTMENT ALSO FAILED TO CONT RADICT THE OBSERVATION AND CONCLUSION OF THE LD. CIT(A). EVEN OUR ATTENTION WAS ALSO DRAWN TO THE ASSESSMENT ORDER DATED 19/12/2018 IN THE NAME OF SH. JOGINDER KHANNA (BROT HER OF THE ASSESSEE) WHEREIN ALSO THE LONG TERM CAPITAL GAIN HAS BEE N DETERMINED AT RS.20,43,339/- AS @ 36.83% SHARE OF THE TOTAL LONG TERM CAPITAL GAIN OF RS.55,48,029/-. HENCE, WE AR E OF THE 17. ITA NO.170/ASR/2017 & C.O. NO.27/ASR/2017 ITO VS. VIPIN KHANNA CONSIDERED VIEW THAT THE ISSUE UNDER CHALLENGE DOES NOT R EQUIRE ANY INTERFERENCE BECAUSE THE SAME DOES NOT SUFFER FROM AN Y IMPROPRIETY, PERVERSITY AND/OR ILLEGALITY. 5.3 NOW COMING TO THE SECOND GROUND OF THE REVENUE DEPARTMENT WHICH RELATES TO THE DELETION OF ADDITION OF RS.4,37,839/- ON ACCOUNT OF PREREQUISITE IN THE HANDS OF THE ASSESSEE (PETROL, TELEPHONE, TRAVELLING & ENTERTAINMENT EXPENSES THROUGH THE CREDIT CARD). THE LD. CIT(A) WHILE DELETI NG THE SAID ADDITION OF RS.4,15,896/- CONSIDERED THE FACTS THAT THE DETAILS OF PAYMENT MADE TO CITI BANK QUA CREDIT CARD IN THE NAME OF THE ASSESSEE/APPELLANT WERE FILED BEFORE THE ASSESSING OFFICER A ND THE LD. CIT(A). FURTHER, THE PAYMENT MADE BY THE COM PANY THROUGH THE CREDIT CARD WERE DEBITED IN THE BOOKS OF A CCOUNT OF THE COMPANY I.E. NIRMAL SPINNING MILLS PVT. LTD. IN T HE RESPECTIVE HEADS OF THE ACCOUNT AND THE AMOUNT HAS BEEN INCURRED FO R THE BUSINESS PURPOSES OF THE COMPANY ONLY. THE LD. CIT(A) ALSO OBSERVED THAT NO ADDITION WAS MADE U/S 143(3) FOR THE ASST. YEAR 2006-07, 2011-12 AND 2013-14 WHERE IT IS A FACT THAT THE CREDIT CARD OF CITI BANK WHICH IS IN THE NAME OF THE ASSESSEE/APPELLANT HAS BEEN USED FOR THE PURPOSE OF THE BUSINESS OF THE COMPANY SINCE 01/04/1982, AS SUCH CONSISTENCIES SHOULD HAVE BEEN FOLLOWED. THE REVENUE DEPARTMENT DID NOT CONTROVERT THE FINDING OF THE LD. CIT(A). HENCE CONSIDERING THE PECULIAR FACTS AND CIRCUMSTANCES IN TOTA L AND INDEPENDENTLY, WE ARE OF THE CONSIDERED VIEW THA T DECISION ON THIS ISSUE ALSO DOES NOT SUFFER FROM ANY PERVERSITY, IL LEGALITY AND/OR IMPROPRIETY, HENCE, NEEDS NO INTERFERENCE. 18. ITA NO.170/ASR/2017 & C.O. NO.27/ASR/2017 ITO VS. VIPIN KHANNA 5.4 WHILE COMING TO THE THIRD GROUND, WHICH RELATES TO TH E ADDITION OF RS.1,50,000/- ON ACCOUNT OF LOW HOUSE HOLD EXPENSES. THE LD. CIT(A) HAS OBSERVED THAT AO HAS NOT PO INTED OUT THE NUMBER OF FAMILY MEMBERS OF THE ASSESSEE/APPELL ANT, HIS EXPENDITURE QUA RENT IF ANY, ELECTRICITY, CONVEYANCE AN D HOUSE HOLD EXPENSES ETC. WHICH WERE INCURRED BY THE APPELLANT AND THE SAME WERE IN EXCESS OF HOUSE HOLD EXPENDITURE AS DECLARED AT RS.4,37,839/-. THE LD. CIT(A) HAS FURTHER OBSERVED THA T ONUS LIES UPON THE ASSESSING OFFICER TO PROVE THAT CERTAIN EXPE NSES HAVE BEEN INCURRED BY THE ASSESSEE IN ADDITION TO THE HO USE HOLD EXPENSES DECLARED BY HIM IN HIS RETURN AND THE REVENUE DEPARTMENT ONLY AFTER DISCHARGING ITS ONUS, CAN ASK THE A SSESSEE TO EXPLAIN THE SOURCE OF THE SAME. FINALLY IT WAS OBSERV ED BY THE LD. CIT(A) THAT THE ADDITION OF RS.1,50,000/- WAS MAD E ON ACCOUNT OF LOW HOUSE WITHDRAWALS, WITHOUT ANY EVIDENCE AND THEREFORE CANNOT BE SUSTAINED. THE LD. CIT(A) ALSO OBSER VED THAT THE AO HAS OMITTED TO OBSERVE THE HOUSE HOLD EXPENSES O F RS.4,37,839/- INCURRED BY THE APPELLANT WERE IN ADDIT ION TO THE ITEMS DEBITED SEPARATELY TO HIS CAPITAL ACCOUNT NAMELY BA NK CHARGES RS.562/-, ICIC PRUDENTIAL LIFE INSURANCE RS.25,0 00/-, MEDICLAIM INSURANCE RS.19,165/-, LIP RS.53,287/-, HDFC L IFE INSURANCE RS.10,264/-, INTEREST PAID TO LIC RS.34,841/- AND PERSONAL ACCIDENT INSURANCE RS.1,756/- TOTALING TO RS.1,44 ,875/-. THE REVENUE DEPARTMENT DID NOT CONTROVERT THE FINDIN GS OF THE LD. CIT(A) AND EVEN WE DID NOT FIND ANY CONTRARY MAT ERIAL TO INTERFERE IN THE DECISION OF THE LD. CIT(A) QUA THE L OW HOUSE HOLD EXPENSES. 19. ITA NO.170/ASR/2017 & C.O. NO.27/ASR/2017 ITO VS. VIPIN KHANNA 6. CROSS OBJECTION NO.27(ASR)/2017 THE CROSS OBJECTION NOT PRESSED, HENCE DISMISSED AS WITHDRAWN. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE DEPA RTMENT AND THE CROSS OBJECTION FILED BY THE ASSESSEE STANDS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 22.07.2019. SD/- SD/- ( VIKRAM SINGH YADAV ) (N.K.CHOUDHRY) ACCOUNTANT MEMBER JU DICIAL MEMBER DATED: 22.07.2019 /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) SH. VIPIN KHANNA, 159, GREEN AVENUE, AMRITSAR . (2) THE ITO, WARD-4, AMRITSAR (3) THE CIT(A)-2, AMRITSAR (4) THE CIT CONCERNED (5) THE SR DR, I.T.A.T., AMRITSAR TRUE COPY BY ORDER