The ITO, Ward-9(2), Ahmedabad V. M/s. Dharmaja Infrastructure, Ahmedabad

ITA 1862/AHD/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8161 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 11 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 19-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: J R SHAH HEARING CONCLUDED ON
• Keywords: Sale consideration of property below Jantri Value
• Section: 143(3); 50C

Judgement Text

ITA NO.1862/AHD/2015 ASSESSMENT YEAR: 2011-12 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR AM AND RAJPAL YADAV JM] ITA NO.1862/AHD/2015 ASSESSMENT YEAR: 2011-12 DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 3(3), AHMEDABAD. ..................APPELLANT VS. DHARMAJA INFRASTRUCTURE, ............................RESPONDENT A-3, ORCHID BUNGLOWS, THALTEJ-SHILAJ ROAD, AHMEDABAD 380 051. [PAN : AAHFD 1372 M] APPEARANCES BY MUDIT NAGPAL FOR THE APPELLANT J.R. SHAH FOR THE RESPONDENT HEARING CONCLUDED ON: 05.03.2018 ORDER PRONOUNCED ON : 06.06.2018 O R D E R PER PRAMOD KUMAR, AM: 1. THIS APPEAL IS DIRECTED AGAINST THE ORDER DATED 31 ST MARCH, 2015 PASSED BY THE LD. CIT(A) IN THE MATTER OF ASSESSMENT UNDER SECTIO N 143(3) OF THE INCOME TAX ACT, 1961, FOR THE ASSESSMENT YEAR 2011-12. 2. GRIEVANCES RAISED BY THE APPELLANT ARE AS FOLLOW S :- 1.1 THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DE LETING THE ADDITION OF RS.1,88,02,500/- MADE ON ACCOUNT OF UNEXPLAINED IN VESTMENT U/S.69B OF THE ACT. 1.2 THE FACTS OF THE CASE OF HONBLE ITAT AHMEDABAD BENCH IN THE CASE OF DCIT VS. VIRJIBHAI KALYANBHAI KUKADIA (2012) 138 ITD 255 AS RELIED BY THE CIT(A) ARE DIFFERENT FROM THE FACTS OF THE P RESENT CASE. 1.3 THE CIT(A) HAS ERRED IN LAW AND ON FACTS BY NOT CONSIDERING THE JANTRY VALUE AS FIXED BY THE REGISTRAR. ITA NO.1862/AHD/2015 ASSESSMENT YEAR: 2011-12 PAGE 2 OF 4 3. TO ADJUDICATE ON THIS APPEAL, ONLY A FEW MATERIA L FACTS NEED TO BE TAKEN NOTE OF. 4. THERE IS NO DISPUTE THAT THE IMPUGNED ADDITION I S MADE SOLELY ON THE BASIS OF MARKET VALUE OF LAND, AS ADOPTED BY THE SUB-REGISTR AR, AS TRUE VALUE OF PURCHASE OF LAND. LEARNED REPRESENTATIVES FAIRLY AGREE THAT THIS ISSU E IS NOW COVERED, IN FAVOUR OF THE ASSESSEE, BY A DECISION OF THE CO-ORDINATE BENCH I N THE CASE OF DCIT VS. VIRJIBHAI KALYANBHAI KUKADIA (138 ITD 255) WHEREIN THE CO-ORD INATE BENCH HAS, INTER ALIA , OBSERVED AS FOLLOWS :- 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE MATERIAL ON RECORD. IN THE PRESENT CASE BEFORE US, THE ISSUE IS APPLICA BILITY OF PROVISIONS OF SECTION 69B. SECTION 69B READS AS UNDER: 'AMOUNT OF INVESTMENTS, ETC., NOT FULLY DISCLOSED I N BOOKS OF ACCOUNT - WHERE IN ANY FINANCIAL YEAR THE ASSESSEE HAD MADE INVESTM ENTS OR IS FOUND TO BE THE OWNER OF ANY BULLION, JEWELLERY, OR OTHER VALUA BLE ARTICLE, AND THE A.O. FINDS THAT THE AMOUNT EXPENDED ON MAKING SUCH INVES TMENTS OR IN ACQUIRING SUCH BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE E XCEEDS THE AMOUNT RECORDED IN THIS BEHALF IN THE BOOKS OF ACCOUNT MAINTAINED B Y THE ASSESSEE FOR ANY SOURCE OF INCOME, AND THE ASSESSEE OFFERS NO EXPLAN ATION ABOUT SUCH EXCESS AMOUNT OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINION OF THE A.O., SATISFACTORY, THE EXCESS AMOUNT MAY BE DEEMED TO BE THE INCOME OF THE ASSESSEE FOR SUCH FINANCIAL YEAR.' WHEN WE EXAMINE THE PROVISIONS OF SEC.69B, WE FIND THAT SECTION 69B IS A DEEMING FICTION. IT IS PROVIDED THAT ADDITION CAN B E MADE BY THE A.O. WHEN THE FOLLOWING THREE CONDITIONS ARE SATISFIED: (1) IF IT IS FOUND THAT THE ASSESSEE HAS MADE INVES TMENT OR THE ASSESSEE IS FOUND TO BE THE OWNER OF ANY BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE, AND (2) IF IT IS FOUND THAT THE AMOUNT EXPENDED ON MAKI NG SUCH INVESTMENTS OR IN ACQUIRING SUCH BULLION, JEWELLERY OR OTHER VA LUABLE ARTICLE EXCEEDS THE AMOUNT RECORDED IN THAT BEHALF IN THE B OOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE, AND (3) EITHER THE ASSESSEE OFFERS NO EXPLANATION ABOUT SUCH EXTRA AMOUNT OR THE EXPLANATION OFFERED BY HIM IS NOT SATISFACTORY. 9. THE ABOVE CONDITIONS ARE CUMULATIVE. IF ALL THESE CIRCUMSTANCES EXIST, THE EXCESS AMOUNT MAY BE DEEMED TO BE THE INCOME OF THE ASSESSEE FOR THE FINANCIAL YEAR IN WHICH THE SAID INVESTMENT WAS MAD E OR THE ASSESSEE BECAME THE OWNER OF BULLION ETC. 10. THE FACTUAL POSITION IS THAT DURING THE YEAR THE ASSESSEE HAD ACQUIRED LAND. IT HAS BEEN SUBMITTED BY THE ASSESSEE THAT IT HAD PAID THE CONSIDERATION FOR PURCHASE OF LAND IN F.Y. 2000-01 AND GOT THE POSSES SION OF LAND IN F.Y. 2000-01 BUT THE DOCUMENTS COULD NOT BE EXECUTED IN F.Y. 200 0-01 AND WERE THEREFORE EXECUTED IN THE F.Y. 2005-06 RELEVANT TO A.Y. 2006- 07. THE ASSESSEE HAD ALSO BROUGHT ON RECORD THE COPIES OF THE AGREEMENT. THE LD. D.R. COULD NOT CONTROVERT THIS FACT BY BRINGING ANY MATERIAL TO THE CONTRARY ON RECORD. A.O. WAS OF THE VIEW THAT MARKET RATE DURING THE PERIOD CANNOT BE LESS T HAN THE JANTRI PRICE OF LAND. HE ITA NO.1862/AHD/2015 ASSESSMENT YEAR: 2011-12 PAGE 3 OF 4 ACCORDINGLY, TAKING INTO CONSIDERATION THE PREVAILI NG JANTRI PRICE OF LAND, ESTIMATED THE UNDISCLOSED INVESTMENT AT RS.3,62,54,200/-. AFT ER ADJUSTING FOR THE VALUE DISCLOSED IN THE BOOKS OF ACCOUNTS OF RS.1,06,27,99 5/-CONSIDERED RS.2,56,26,205/- AS THE NET UNDISCLOSED INCOME. THE A.O. HAS THUS RELIED ON THE JANTRI PRICE AND ON THAT BASIS PRESUMED THAT THE AM OUNT EXPENDED IS MORE THAN THE AMOUNT RECORDED IN THE BOOKS. THE A.O. HAS FAIL ED TO BRING ON RECORD ANY MATERIAL TO SUPPORT HIS ESTIMATED PRICE. 11. SECTION 50C IS A DEEMING PROVISION WHERE UNDER TH E STAMP DUTY RATE IS TREATED AS FULL VALUE OF CONSIDERATION FOR THE PURP OSE OF COMPUTING CAPITAL GAIN UNDER SECTION 48. IT IS APPLICABLE TO THE SELLER OF PROPERTY AND THEREFORE CANNOT BE INVOKED IN CASE OF PURCHASER OF PROPERTY FOR THE PU RPOSE OF SECTION 69B. CIT(A) HAS GIVEN A FINDING THAT THE A.O. HAS NOT MADE ANY INDEPENDENT ENQUIRY OR COLLECTED CORROBORATIVE EVIDENCE TO JUSTIFY THE ADD ITION. 12. IN THE CASE OF NARESH KHATTAR (HUF) (SUPRA) THE H ON'BLE DELHI HIGH COURT HAS HELD THAT TO INVOKE THE PROVISIONS OF SEC.69B, THE BURDEN IS ON THE REVENUE TO PROVE THAT THE REAL INVESTMENT EXCEEDS THE INVES TMENT SHOWN IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE. 13. IN THE CASE OF SMT. AMAR KUMARI SURANA (SUPRA) (R AJ.) THE HON'BLE HIGH COURT HAS OBSERVED AS UNDER: '10. IT IS TRUE THAT MERELY ON THE BASIS OF FAIR M ARKET VALUE NO ADDITION CAN BE MADE U/S. 69B OF THE ACT, 1961, BUT ON THE B ASIS OF SUFFICIENT MATERIAL ON RECORD SOME REASONABLE INFERENCE CAN BE DRAWN TH AT PETITIONER HAS INVESTED MORE AMOUNT THAN THE SHOWN IN ACCOUNT BOOK S, THEN ONLY THE ADDITION U/S. 69B CAN BE MADE. THE BURDEN IS ON THE REVENUE TO PROVE THAT REAL INVESTMENT EXCEEDS THE INVESTMENT SHOWN IN ACC OUNT BOOKS OF THE ASSESSEE.' 14. IN THE CASE OF HARLEY STREET PHARMACEUTICALS LTD. (SUPRA) IT HAS BEEN HELD THAT PROVISIONS OF SEC.50C ARE APPLICABLE ONLY FOR COMPUTATION OF CAPITAL GAINS IN REAL ESTATE TRANSACTION IN RESPECT OF SELLER ONLY A ND NOT FOR THE PURCHASER. LEGAL FICTION CANNOT BE EXTENDED ANY FURTHER AND HAS TO B E LIMITED TO THE AREA FOR WHICH IT IS CREATED. SECTION 50C CREATES A LEGAL FICTION FOR TAXING CAPITAL GAINS IN THE HANDS OF THE SELLER AND IT CANNOT BE EXTENDED FOR T AXING THE DIFFERENCE BETWEEN APPARENT CONSIDERATION AND VALUATION DONE BY STAMP VALUATION AUTHORITIES AS UNDISCLOSED INVESTMENT U/S. 69. 15. IN VIEW OF THE TOTALITY OF AFORESAID FACTS AND RE LYING ON THE DECISIONS OF THE HON'BLE HIGH COURTS AND OF THE CO-ORDINATE BENCH, W E ARE OF THE VIEW THAT PROVISIONS OF SEC.50C CANNOT BE APPLIED FOR MAKING ADDITION U/S. 69B. IN THE PRESENT CASE, SINCE THE A.O. HAS RELIED ON THE JANT RY RATES WITHOUT BRINGING ANY MATERIAL ON RECORD TO PROVE THAT ASSESSEE HAS IN FA CT MADE INVESTMENTS OVER AND ABOVE THAN THAT RECORDED IN THE BOOKS, NO ADDITION CAN BE MADE IN THE PRESENT CASE AND THEREFORE NO INTERFERENCE IS CALLED FOR TO THE ORDER OF CIT(A). WE THUS UPHOLD THE ORDER OF CIT(A). IN THE RESULT THE APPEA L OF THE REVENUE IS DISMISSED. 5. WE SEE NO REASONS TO TAKE ANY OTHER VIEW OF THE MATTER THAN THE VIEW SO TAKEN BY OUR ESTEEMED COLLEAGUES. RESPECTFULLY FOLLOWING THE SAME, WE UPHOLD THE STAND OF THE LEARNED CIT(A), WHO HAS FOLLOWED THE CO-ORDINAT E BENCH DECISION, AND DECLINE TO INTERFERE IN THE MATTER. ITA NO.1862/AHD/2015 ASSESSMENT YEAR: 2011-12 PAGE 4 OF 4 6. IN THE RESULT, THE APPEAL IS DISMISSED. PRONOUN CED IN THE OPEN COURT ON THIS 6 TH DAY OF JUNE, 2018. SD/- SD/- RAJPAL YADAV PRAM OD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) DATED: 6 TH JUNE, 2018. PBN/* COPIES TO: (1) THE APPELLANT (2) THE RESPONDE NT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD