Coromandal Oils Pvt. Ltd., CHENNAI V. DCIT, CHENNAI

ITA 1880/CHNY/2013

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9857 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 07-05-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 23-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Reassessment proceedings
• Section: 50C; 147; 27; 148; 6

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . . . , . !' , $ % BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NOS.1880, 1881 & 1882/MDS/2013 ' (' / ASSESSMENT YEARS : 2009-10, 2010-11 & 2011-12 M/S COROMANDEL OILS PRIVATE LIMITED, DOSHI TOWERS, 9 TH FLOOR, 156, PH ROAD, CHENNAI - 600 010. PAN : AAACC 8855 E V. THE DEPUTY COMMISSIONER OF INCOME TAX, COMPANY CIRCLE I(3), CHENNAI - 600 034. (*+/ APPELLANT) (,-*+/ RESPONDENT) ./ ITA NOS.1937, 1938, 1939, 1940, 1941 & 1942/MDS/2013 ' (' / ASSESSMENT YEARS : 2009-10, 2010-11 & 2011-12 THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE I(3), CHENNAI - 600 034. V. M/S COROMANDEL OILS PRIVATE LIMITED, DOSHI TOWERS, 9 TH FLOOR, 156, PH ROAD, CHENNAI - 600 010. (*+/ APPELLANT) (,-*+/ RESPONDENT) './ /ASSESSEE BY : SH. B. RAMAKRISHNAN, FCA 0 /REVENUE : SH. PATHLAVATH PEERYA, CIT 2 I.T.A. NOS.1880 TO 1881/MDS/13 I.T.A. NOS.1937 TO 1942/MDS/13 1 2 /$ / DATE OF HEARING : 07.05.2015 3!( 2 /$ / DATE OF PRONOUNCEMENT : 26.06.2015 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: BOTH, THE ASSESSEE AND THE REVENUE FILED THE APPE ALS AGAINST THE RESPECTIVE ORDERS OF THE COMMISSIONER O F INCOME TAX (APPEALS)-I, CHENNAI, FOR THE ASSESSMENT YEARS 2009 -10, 2010-11 AND 2011-12. THE REVENUE ALSO FILED APPEALS AGAINS T THE ORDER OF THE CIT(APPEALS) ON PENALTY LEVIED UNDER SECTION 27 1(1)(C) OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). SINCE C OMMON ISSUE ARISES IN ALL THE APPEALS, WE HEARD THE APPEALS TOG ETHER AND DISPOSING OF THE SAME BY THIS COMMON ORDER. 2. FIRST, LETS TAKE THE ASSESSEES APPEALS FOR ASS ESSMENT YEARS 2009-10, 2010-11 AND 2011-12 IN I.T.A. NOS.1880, 18 81 & 1882/MDS/2013. 3. SH. B. RAMAKRISHNAN, THE LD. REPRESENTATIVE FOR THE ASSESSEE, SUBMITTED THAT THE ONLY ISSUE ARISES FOR CONSIDERATION IS WITH REGARD TO DETERMINATION OF SALE CONSIDERATION OF THE LAND FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAINS. THE LD. R EPRESENTATIVE SUBMITTED THAT THE ASSESSEE HAS ALSO RAISED AN ISSU E OF REOPENING 3 I.T.A. NOS.1880 TO 1881/MDS/13 I.T.A. NOS.1937 TO 1942/MDS/13 OF THE ASSESSMENT UNDER SECTION 147 OF THE ACT. RE FERRING TO THE REOPENING OF THE ASSESSMENT, THE LD. REPRESENTATIVE SUBMITTED THAT THE ASSESSING OFFICER BASED UPON AN ERRORNEOUS INFO RMATION IN RESPECT OF PERIOD OF HOLDING OF THE PROPERTY, DETER MINED THE SHORT TERM CAPITAL LOSS INSTEAD OF LONG TERM CAPITAL LOSS ON MUTUAL FUNDS. IN FACT, ACCORDING TO THE LD. REPRESENTATIVE, THE A SSESSMENT WAS REOPENED ONLY FOR THE PURPOSE OF ASSESSING THE CAPI TAL LOSS ON MUTUAL FUNDS BY ISSUING NOTICE UNDER SECTION 148 OF THE ACT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, NO INCOME WAS FOUND TO HAVE ESCAPED IN RESPECT OF CAPITAL LOSS ON MUTUAL F UNDS. HOWEVER, THE ASSESSING OFFICER MADE ADDITION IN RESPECT OF C APITAL GAIN ON SALE OF LAND ON ASSUMPTION AND PRESUMPTION. ON PLA CING RELIANCE ON THE JUDGMENT OF BOMBAY HIGH COURT IN CIT V. JET AIRWAYS (I) LTD. (2011) 331 ITR 236, THE LD. REPRESENTATIVE SUBMITTE D THAT AN ASSESSING OFFICER HAS NOT MADE ANY ADDITION ON THE REASONS FOR WHICH THE ASSESSMENT WAS REOPENED UNDER SECTION 148 OF THE ACT, THEREFORE, HE CANNOT MAKE ANY OTHER ADDITION IN THE REASSESSMENT PROCEEDINGS UNDER SECTION 147 OF THE ACT. THE LD. REPRESENTATIVE ALSO SUBMITTED THAT THE TIME LIMIT FOR ISSUING NOTI CE UNDER SECTION 148 HAS EXPIRED FOR ASSESSMENT YEARS 2009-10 AND 20 10-11. THEREFORE, THE REASSESSMENT PROCEEDING INITIATED UN DER SECTION 148 OF THE ACT FOR ASSESSMENT YEARS 2009-10 AND 2010-11 IS NOT VALID. 4 I.T.A. NOS.1880 TO 1881/MDS/13 I.T.A. NOS.1937 TO 1942/MDS/13 4. COMING TO THE MERIT OF THE APPEAL, THE LD. REPRE SENTATIVE FOR THE ASSESSEE SUBMITTED THAT THERE WAS A SURVEY IN T HE BUSINESS PREMISES OF THE ASSESSEE ON 24.1.2012 AND NO MATERI AL WAS FOUND DURING THE COURSE OF SURVEY OPERATION. THE ENTIRE ASSESSMENT WAS MADE ON THE BASIS OF MATERIAL FOUND IN THE COURSE O F COROMANDEL CABLES PVT. LTD. ACCORDING TO THE LD. REPRESENTATI VE, IN THE COURSE OF SURVEY IN THE CASE OF M/S COROMANDEL CABLES PVT. LTD., IT APPEARS THAT THE REVENUE AUTHORITIES FOUND CERTAIN DEVELOPM ENT AGREEMENT AND OTHER MATERIAL TO INDICATE THAT M/S COROMANDEL CABLES PVT. LTD. SOLD LAND TO M/S DOSHI HOUSING AND RECEIVED SALE CO NSIDERATION OVER AND ABOVE IT WAS DISCLOSED IN THE SALE DEED. ON THE BASIS OF THE MATERIAL FOUND IN THE CASE OF COROMANDEL CABLES PVT. LTD., THE ASSESSING OFFICER CAME TO A CONCLUSION THAT THE ASS ESSEE ALSO MIGHT HAVE RECEIVED THE SAME AMOUNT FOR TRANSFER OF ITS LAND. ACCORDING TO THE LD. REPRESENTATIVE, NO MATERIAL IS AVAILABLE ON RECORD TO SUGGEST THAT THE ASSESSEE HAS RECEIVED AN Y MONEY OVER AND ABOVE THE AMOUNT SHOWN IN SALE DEED. MERELY BE CAUSE THE ASSESSEES LAND HAPPENED TO BE ADJACENT TO THE LAND OF COROMANDEL CABLES PVT. LTD., IT DOES NOT MEAN THAT THE ASSESSE E HAS RECEIVED THE SAME MONEY ON SALE OF THE SAID LAND. IN THE AB SENCE OF ANY MATERIAL, ACCORDING TO THE LD. REPRESENTATIVE, THER E CANNOT BE ANY 5 I.T.A. NOS.1880 TO 1881/MDS/13 I.T.A. NOS.1937 TO 1942/MDS/13 ADDITION IN THE HANDS OF THE PRESENT ASSESSEE. ACC ORDING TO THE LD. REPRESENTATIVE, THE ENTIRE ASSESSMENT PROCEEDING IS BASED ON THE PRESUMPTION AND ASSUMPTION THAT THE ASSESSEE MIGHT HAVE RECEIVED THE SALE CONSIDERATION AS IT WAS IN THE CASE OF COR OMANDEL CABLES PVT. LTD. ACCORDING TO THE LD. REPRESENTATIVE, THI S BEING A JUDICIAL PROCEEDING, THERE CANNOT BE ANY ADDITION ON THE BAS IS OF ASSUMPTION AND PRESUMPTION. ACCORDING TO THE LD. R EPRESENTATIVE, THE ADDITION MADE BY THE ASSESSING OFFICER, WHICH W AS CONFIRMED BY THE CIT(APPEALS), IS NOT JUSTIFIED. 5. ON THE CONTRARY, SH. PATHLAVATH PEERYA, THE LD. DEPARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE ASS ESSEE OWNS A FACTORY AND LAND AT PERUNGUDI. THE ASSESSEE-COMPAN Y ENTERED INTO AN AGREEMENT WITH M/S DOSHI HOUSING TO DEVELOP A RE SIDENTIAL PROJECT, NAMELY, ETOPIA-II. IN FACT, THE LAND BE LONGING TO THE ASSESSEE IS SITUATED ADJACENT TO THE LAND OWNED BY M/S COROMANDEL CABLES PVT. LTD. ACCORDING TO THE LD. REPRESENTATI VE, THE TRANSACTION BETWEEN THE ASSESSEE AND THE DEVELOPERS ARE SO ARRANGED THAT THE HIGHER SALE CONSIDERATION FOR THE PURPOSE OF COMPUTING THE CAPITAL GAIN IN THE HANDS OF THE ASSE SSEE WAS SUPPRESSED BY DIVERTING THE MAJORITY PORTION OF THE PROFITS TO THE DEVELOPER OF THE PROPERTY SO AS TO CLAIM BENEFIT UN DER SECTION 80- 6 I.T.A. NOS.1880 TO 1881/MDS/13 I.T.A. NOS.1937 TO 1942/MDS/13 IB(10) OF THE ACT. THE LD. D.R. FURTHER SUBMITTED THAT THE PARTNERSHIP FIRM WAS RECONSTITUTED ON 1.4.2007 IN W HICH ONE SHRI M.G. SURENDRANATH WAS INTRODUCED AS PARTNER WITH A SHARE PROFIT AT 35%. HOWEVER, HE WAS NOT GIVEN ANY SHARE OF LOSS. ACCORDING TO THE LD. D.R., ALL THE THREE ENTITIES, NAMELY, M/S C OROMANDEL CABLES PVT. LTD., M/S COROMANDEL OILS PVT. LTD. (THE PRESE NT ASSESSEE) AND M/S DOSHI HOUSING PVT. LTD. ARE ALL BELONGING TO ON E GROUP, NAMELY, DOSHI GROUP IN WHICH SHRI HARSHAD V. DOSHI WAS AT T HE HELM OF AFFAIRS HAVING ABSOLUTE CONTROL IN ALL THE SPHERES OF ACTIVITIES. DURING THE COURSE OF SURVEY OPERATION, THE REVENUE AUTHORI TIES FOUND THAT M/S COROMANDEL CABLES PVT. LTD. ENTERED INTO A JOIN T DEVELOPMENT AGREEMENT WITH M/S DOSHI HOUSING, A PARTNERSHIP FIR M, FOR DEVELOPING A LAND BELONGING TO M/S COROMANDEL CABLE S PVT. LTD. A COPY OF JOINT DEVELOPMENT AGREEMENT ENTERED BETWEEN M/S COROMANDEL CABLES PVT. LTD. AND M/S DOSHI HOUSING W AS FOUND DURING THE COURSE OF SURVEY OPERATION. 6. THE MATERIAL FOUND DURING SURVEY OPERATION SHOWS THAT THE VALUE OF THE LAND BELONGING TO M/S COROMANDEL CABLE S PVT. LTD. WAS FOUND TO BE ` 35 CRORES APPROX. AS AGAINST THE VALUE OF ` 10 CRORES DISCLOSED IN THE SALE DEED. IN FACT, ACCORDING TO THE LD. D.R., M/S COROMANDEL CABLES PVT. LTD. DISCLOSED THE VALUE AS PER GUIDELINE 7 I.T.A. NOS.1880 TO 1881/MDS/13 I.T.A. NOS.1937 TO 1942/MDS/13 VALUE DETERMINED BY THE SUB-REGISTRAR. IN THE ASSE SSMENT OF M/S COROMANDEL CABLES PVT. LTD., THE ASSESSING OFFICER FOUND THAT M/S COROMANDEL CABLES PVT. LTD. IS ENTITLED FOR 37.54% OF THE VALUE OF SALEABLE AREA IN THE PROJECT. BASED UPON THAT AGRE EMENT, THE ASSESSING OFFICER PRESUMED THAT THE ASSESSEE ALSO M IGHT HAVE RECEIVED 37.54% OF SALEABLE AREA IN THE PROJECT. O THER THAN THE MATERIAL FOUND IN THE CASE OF M/S COROMANDEL CABLES PVT. LTD., NO OTHER MATERIAL IS AVAILABLE RELATING TO THE ASSESSE E TO INDICATE THAT THE ASSESSEE HAS RECEIVED OVER AND ABOVE THE CONSID ERATION DISCLOSED IN THE RELEVANT DOCUMENT. SINCE THE LAND BELONGING TO ASSESSEE IS ADJACENT TO THE LAND OWNED BY M/S COROM ANDEL CABLES PVT. LTD., THE LD. D.R. SUBMITTED THAT THE VALUE FO UND IN THE CASE OF M/S COROMANDEL CABLES PVT. LTD. ON THE BASIS OF THE MATERIAL FOUND DURING THE COURSE OF SURVEY OPERATION WAS ADOPTED O N ESTIMATION. ON AN ENQUIRY FROM THE BENCH - WHETHER ANY MATERIAL WAS FOUND DURING THE COURSE OF SURVEY OR DURING THE COURSE OF ENQUIRY IN THE COURSE OF ASSESSMENT PROCEEDING RELATING TO THE ASS ESSEE? THE LD. D.R. VERY FAIRLY SUBMITTED THAT NO MATERIAL WAS AVAILABLE ON RECORD IN THE CASE OF PRESENT ASSESSEE OTHER THAN T HE MATERIAL RELATING TO M/S COROMANDEL CABLES PVT. LTD. TO INDI CATE THAT THE VALUE OF LAND IS OVER AND ABOVE THE CONSIDERATION T HAT WAS DISCLOSED BY THE ASSESSEE IN THE AGREEMENT FOR SALE. IN OTHE R WORDS, THE LD. 8 I.T.A. NOS.1880 TO 1881/MDS/13 I.T.A. NOS.1937 TO 1942/MDS/13 D.R. CLARIFIED THAT OTHER THAN THE AGREEMENT FOR SA LE, NO OTHER MATERIAL WAS AVAILABLE WITH THE DEPARTMENT IN RESPE CT OF THE ASSESSEE. THE LD. D.R. FURTHER CLARIFIED THAT SINC E THE LAND BELONGING TO THE ASSESSEE IS ADJACENT TO THE LAND B ELONGING TO M/S COROMANDEL CABLES PVT. LTD., THE ASSESSING OFFICER ADOPTED THE SAME VALUE AS THAT OF M/S COROMANDEL CABLES PVT. LT D. ON ESTIMATION. ACCORDING TO THE LD. D.R., THERE IS NO OTHER MATERIAL IS AVAILABLE ON RECORD. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL ON RECORD. THE ONLY ISSUE ARISES FOR CONSIDERATION IS WITH REGARD TO DETERMINATION OF TH E VALUE OF THE LAND FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAINS IN THE HANDS OF THE ASSESSEE. ADMITTEDLY, THE ASSESSEE-COMPANY ENTERED INTO AN AGREEMENT WITH M/S DOSHI HOUSING FOR SALE OF ITS LA ND AT PERUNGUDI. A SURVEY WAS CONDUCTED IN THE PREMISES OF THE ASSES SEE AS WELL AS IN THE CASE OF M/S COROMANDEL CABLES PVT. LTD. ON 2 4.01.2012. ADMITTEDLY, NO MATERIAL WAS FOUND IN THE PREMISES O F THE ASSESSEE. IN THE CASE OF M/S COROMANDEL CABLES PVT. LTD., SEV ERAL INCRIMINATING MATERIALS WERE FOUND, INCLUDING JOINT DEVELOPMENT AGREEMENT, INDICATING THE PERCENTAGE OF THE DEVELOP ED AREA TO BE ALLOTTED TO M/S COROMANDEL CABLES PVT. LTD. ON THE BASIS OF THE 9 I.T.A. NOS.1880 TO 1881/MDS/13 I.T.A. NOS.1937 TO 1942/MDS/13 INCRIMINATING MATERIALS, IT APPEARS FROM THE ASSESS MENT ORDER THAT THE ASSESSING OFFICER CAME TO A CONCLUSION IN THE C ASE OF M/S COROMANDEL CABLES PVT. LTD. THAT THE VALUE OF THE L AND MAY BE HIGHER THAN ` 35 CRORES. IN THE CASE BEFORE US, THE ASSESSEE ENTERED INTO AGREEMENT FOR SALE AND DISCLOSED THE V ALUE AT ` 10.50 CRORES AND OFFERED TO LONG TERM CAPITAL GAINS ACCOR DINGLY. DURING THE COURSE OF SURVEY OPERATION, IT WAS FOUND THAT O NE SMT. RANI GOPINATH ADMITTED THAT IN THE CASE OF M/S COROMANDE L CABLES PVT. LTD., THE SUPPRESSED PROFIT WAS MORE THAN ` 25 CRORES ON THE BASIS OF INCRIMINATING MATERIALS. FROM THE ASSESSMENT OR DER IT APPEARS THAT APART FROM JOINT DEVELOPMENT AGREEMENT IN THE CASE OF M/S COROMANDEL CABLES PVT. LTD., CERTAIN LOOSE SHEETS A LSO FOUND CONTAINING 40 PAGES. ALL THE DOCUMENTS WERE RELATI NG TO M/S COROMANDEL CABLES PVT. LTD. THE ASSESSING OFFICER, ON THE BASIS OF SWORN STATEMENT RECORDED FROM SMT. RANI GOPINATH AN D THE INCRIMINATING MATERIAL FOUND IN THE CASE OF M/S COR OMANDEL CABLES PVT. LTD., CAME TO A CONCLUSION THAT THE VALUE OF T HE LAND TRANSFERRED BY M/S COROMANDEL CABLES PVT. LTD. WAS MORE THAN ` 35 CRORES. BY APPLYING SAME YARDSTICK, THE ASSESSING OFFICER ESTI MATED THE VALUE OF THE ASSESSEES LAND AT ` 35 CRORES. 10 I.T.A. NOS.1880 TO 1881/MDS/13 I.T.A. NOS.1937 TO 1942/MDS/13 8. NOW THE QUESTION ARISES FOR CONSIDERATION IS IN THE ABSENCE OF ANY MATERIAL FOUND IN THE CASE OF THE ASSESSEE, CAN INCRIMINATING MATERIAL FOUND IN RESPECT OF M/S COROMANDEL CABLES PVT. LTD. BE RELIED UPON FOR ESTIMATION OF VALUE OF THE ASSESSEE S LAND. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT IT CANNO T BE RELIED UPON. THE ASSESSMENT PROCEEDING IS A JUDICIAL PROCEEDING UNDER SECTION 136 OF THE INCOME-TAX ACT. THEREFORE, ASSUMPTION A ND PRESUMPTION HAS NO ROLE TO PLAY IN THE JUDICIAL PROCEEDINGS. U NLESS AND UNTIL THERE IS A CONCRETE MATERIAL TO ESTABLISH THAT THE ASSESSEE HAS RECEIVED ANY MONEY OVER AND ABOVE THE VALUE DISCLOS ED IN THE SALE AGREEMENT, WE CANNOT PRESUME THAT THE ASSESSEE HAS IN FACT RECEIVED THE MONEY OVER AND ABOVE THE VALUE SHOWN I N THE SALE AGREEMENT. 9. AS REPEATEDLY HELD BY THE APEX COURT, MARKET VAL UE IS NOTHING BUT THE PRICE AGREED BETWEEN THE WILLING PU RCHASER AND THE WILLING SELLER. THERE MAY BE SEVERAL FACTORS/REASO NS FOR AGREEING TO A PARTICULAR PRICE BY THE PARTIES. ONE OF THE REAS ONS PRESUMABLY THE ASSESSEE MAY BE COMPELLED TO SELL THE PROPERTY OR T RANSFER THE PROPERTY IN ANY ONE OF THE POSSIBLE MODE AGREED BET WEEN THE PARTIES. WHATEVER MAY BE THE REASONS WHEN TWO PART IES CAME INTO AN AGREEMENT TO TRANSFER THE LANDED PROPERTY, THE J UDICIAL AUTHORITIES 11 I.T.A. NOS.1880 TO 1881/MDS/13 I.T.A. NOS.1937 TO 1942/MDS/13 CANNOT STEP INTO THE SHOES OF THE PARTIES AND SAY T HAT THE PROPERTY MAY BE WORTH MORE THAN WHAT WAS AGREED BETWEEN THE PARTIES. IN FACT, IN ORDER TO AVOID THIS SETTLED POSITION, PARL IAMENT HAS INTRODUCED SECTION 50C OF THE I.T. ACT WITH EFFECT FROM 1.4.2003 BY FINANCE ACT, 2002. THEREFORE, WHEN THE ASSESSEE CL AIMS THAT THE VALUE OF THE LAND IS LESS THAN THE VALUE DETERMINED BY THE STAMP AUTHORITIES FOR PAYMENT OF STAMP DUTY, THE VALUE AD OPTED BY THE STAMP AUTHORITIES SHALL BE DEEMED TO BE THE FULL VA LUE OF THE CONSIDERATION RECEIVED OR ACCRUED TO THE ASSESSEE A S A RESULT OF SUCH TRANSFER. 10. WE HAVE ALSO CAREFULLY GONE THROUGH THE SALE AG REEMENT ENTERED BETWEEN THE ASSESSEE AND M/S DOSHI HOUSING, A COPY OF WHICH IS AVAILABLE IN PAGE 11 OF THE PAPER-BOOK. T HE AGREEMENT CLEARLY SAYS THAT THE ASSESSEE AGREED TO TRANSFER T HE LAND TO THE EXTENT OF 1,06,196 SQ.FT. FOR A TOTAL CONSIDERATION OF ` 10.50 CRORES AND AGREED TO EXECUTE THE SALE DEED IN FAVOUR OF M/ S DOSHI HOUSING OR ITS NOMINEE. IN FACT, THE ASSESSEE HAS EXECUTED SEVERAL SALE DEEDS IN FAVOUR OF THE PERSONS WHO ARE NOMINATED BY M/S DOSHI HOUSING. OTHER THAN THIS AGREEMENT FOR SALE DATED 1.4.2008, NO OTHER MATERIAL IS AVAILABLE ON RECORD. THE JOINT D EVELOPMENT AGREEMENT REFERRED BY THE ASSESSING OFFICER AND THE CIT(APPEALS) 12 I.T.A. NOS.1880 TO 1881/MDS/13 I.T.A. NOS.1937 TO 1942/MDS/13 IS RELATING TO M/S COROMANDEL CABLES PVT. LTD. AND NOT TO THE ASSESSEE. THEREFORE, THIS TRIBUNAL IS OF THE CONSI DERED OPINION THAT NO RELIANCE COULD BE PLACED ON THOSE INCRIMINATING MATERIALS FOUND IN THE CASE OF M/S COROMANDEL CABLES PVT. LTD. THI S TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE VALUE OF THE LAND H AS TO BE TAKEN ONLY AS ` 10.50 CRORES. IN CASE THE VALUE SHOWN IN THE SALE AGREEMENT AS ` 10.50 CRORES IS LESS THAN THE VALUE DETERMINED BY THE STAMP AUTHORITIES, THEN AT THE BEST, THE GUIDEL INE VALUE CAN BE TAKEN AS VALUE OF THE LAND. THEREFORE, THE LOWER A UTHORITIES ARE NOT JUSTIFIED IN ESTIMATING THE VALUE OF THE LAND ON TH E BASIS OF THE MATERIAL RELATABLE TO M/S COROMANDEL CABLES PVT. LT D. INCOME-TAX PROCEEDING, BEING A JUDICIAL PROCEEDING, THE ASSESS MENT HAS TO BE MADE ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. DOCUMENTS RELATING TO OTHER ASSESSEES CANNOT BE PLACED RELIAN CE IN THE CASE OF PRESENT ASSESSEE UNLESS THERE IS SUFFICIENT REASON TO RELY UPON THAT DOCUMENT. THIS TRIBUNAL IS OF THE CONSIDERED OPINI ON THAT THERE IS NO MATERIAL AVAILABLE ON RECORD TO SUGGEST THAT THE ASSESSEE RECEIVED MORE THAN ` 10.50 CRORES AS DISCLOSED IN THE SALE AGREEMENT DATED 1.04.2008. THEREFORE, THE LOWER AU THORITIES ARE NOT CORRECT IN ESTIMATING THE VALUE OF THE LAND ON THE BASIS OF THE MATERIALS RELATING TO M/S COROMANDEL CABLES PVT. LT D. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT IN THE ABSENCE O F ANY OTHER 13 I.T.A. NOS.1880 TO 1881/MDS/13 I.T.A. NOS.1937 TO 1942/MDS/13 MATERIAL, THE LOWER AUTHORITIES HAVE NO OTHER WAY E XCEPT TO ACCEPT THE VALUE OF THE LAND AT ` 10.50 CRORES AS DISCLOSED IN THE SALE AGREEMENT DATED 1.04.2008. ACCORDINGLY THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE AND THE APPEALS OF THE AS SESSEE ARE ALLOWED. 11. NOW COMING TO THE REVENUES APPEALS IN I.T.A. N OS.1937, 1939 & 1941/MDS/2013, THE ONLY CONTENTION OF THE LD . D.R. IS THAT THE SHARING RATIO OF THE DEVELOPED PROJECT WAS REDU CED BY THE CIT(APPEALS) TO 40% AS AGAINST 45% DETERMINED BY TH E ASSESSING OFFICER. ACCORDING TO THE LD. D.R., THE AGREEMENT WAS ENTERED INTO BY M/S COROMANDEL CABLES PVT. LTD. IN THE YEAR 2005 , WHEREAS THE PRESENT ASSESSEE ENTERED INTO AGREEMENT IN THE YEAR 2008. THEREFORE, DUE TO EFFLUX OF TIME, THE DEVELOPED ARE A IN THE YEAR 2008 IN COMPARISON TO 2005 WOULD BE NATURALLY MORE, THER EFORE, THE CIT(APPEALS) OUGHT TO HAVE CONFIRMED THE ADDITION M ADE BY THE ASSESSING OFFICER. 12. WE HAVE HEARD SHRI B. RAMAKRISHNAN, THE LD. REP RESENTATIVE FOR THE ASSESSEE ALSO. BY EFFLUX OF TIME, THE COST OF CONSTRUCTION OR COST OF LAND MIGHT HAVE INCREASED. HOWEVER, THE PE RCENTAGE OF THE SHARE WOULD NOT INCREASE. IF THE ASSESSEE ENTERED INTO AN AGREEMENT FOR SHARING THE CONSTRUCTED AREA AT 37.5% IN THE YEAR 14 I.T.A. NOS.1880 TO 1881/MDS/13 I.T.A. NOS.1937 TO 1942/MDS/13 2005, THE SAME SHARING RATIO WOULD CONTINUE IN 2008 ALSO. BY EFFLUX OF TIME, THE COST MAY INCREASE, ACCORDINGLY THE PRI CE MAY ALSO INCREASE, IT DOES NOT MEAN THAT THE SHARE IN CONSTR UCTED AREA WOULD ALSO INCREASE DUE TO EFFLUX OF TIME. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE CIT(APPEALS) HAS RIGHTL Y REDUCED THE SHARING RATIO TO 40% AS AGAINST THE RATIO DETERMINE D BY THE ASSESSING OFFICER AT 45%. THEREFORE, THIS TRIBUNAL DO NOT HAVE ANY REASON TO INTERFERE WITH THE ORDER OF THE CIT(APPEA LS) AND ACCORDINGLY, THE SAME IS CONFIRMED. 13. IN THE RESULT, THESE APPEALS OF THE REVENUE ARE DISMISSED. 14. NOW COMING TO THE REVENUES APPEALS WITH REGARD TO PENALTY IN I.T.A. NOS.1938, 1940 & 1942/MDS/2013, SH. PATHL AVATH PEERYA, THE LD. D.R. SUBMITTED THAT THE ASSESSING OFFICER L EVIED PENALTY. DURING THE COURSE OF SURVEY OPERATION, CERTAIN INCR IMINATING MATERIAL FOUND, INCLUDING THE JOINT DEVELOPMENT AGREEMENT DA TED 23.11.2005 OF M/S COROMANDEL CABLES PVT. LTD. ON THE BASIS OF THE MATERIAL FOUND, THE ASSESSING OFFICER CAME TO A CONCLUSION I N THE CASE OF M/S COROMANDEL CABLES PVT. LTD. THAT THE PROFIT ON SALE OF LAND WAS SUPPRESSED. THE ASSESSING OFFICER CAME TO A CONCLU SION THAT THE PRESENT ASSESSEE ALSO MIGHT HAVE SUPPRESSED THE SAL E PROFIT ON THE BASIS OF MATERIAL FOUND DURING THE COURSE OF M/S CO ROMANDEL CABLES 15 I.T.A. NOS.1880 TO 1881/MDS/13 I.T.A. NOS.1937 TO 1942/MDS/13 PVT. LTD. SINCE THE ASSESSEE FURNISHED INACCURATE PARTICULARS WITH REGARD TO SALE VALUE OF THE LAND, THE ASSESSING OFF ICER LEVIED PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 15. ON THE CONTRARY, SH. B. RAMAKRISHNAN, THE LD. REPRESENTATIVE FOR THE ASSESSEE, SUBMITTED THAT NO MATERIAL IS AVAILABLE ON RECORD TO SUGGEST THAT THE ASSESSEE HA S SUPPRESSED ANY PART OF THE INCOME ARISING OUT OF THE TRANSFER OF THE LAND TO M/S DOSHI HOUSING. ACCORDING TO THE LD. REPRESENTATIVE , THE ONLY DOCUMENT AVAILABLE ON RECORD IS THE AGREEMENT OF SA LE ENTERED BETWEEN THE ASSESSEE AND M/S DOSHI HOUSING ON 1.04. 2008. THIS AGREEMENT OF SALE CLEARLY SAYS THAT THE VALUE OF TH E LAND IS ` 10.50 CRORES. OTHER THAN THIS, THERE IS NO OTHER MATERIA L ON RECORD. THE IMPUGNED ADDITION WAS MADE ONLY ON THE BASIS OF THE INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SURVEY OPERATIO N IN THE CASE OF M/S COROMANDEL CABLES PVT. LTD. THIS MATERIAL FOUN D, WHICH IS RELATABLE TO M/S COROMANDEL CABLES PVT. LTD., CANNO T BE A BASIS FOR LEVY PENALTY UNDER SECTION 271(1)(C) OF THE ACT. T HEREFORE, THE CIT(APPEALS) HAS RIGHTLY DELETED THE PENALTY. 16. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND PERUSED THE RELEVANT MATERIAL ON RECORD. FOR LEVY ING PENALTY UNDER SECTION 271(1)(C) OF THE ACT, THE ASSESSEE HAS TO F URNISH INACCURATE 16 I.T.A. NOS.1880 TO 1881/MDS/13 I.T.A. NOS.1937 TO 1942/MDS/13 PARTICULARS OR FAILED TO DISCLOSE ANY PART OF THE I NCOME. IN THIS CASE, DURING THE COURSE OF SURVEY, THE SO-CALLED INCRIMIN ATING MATERIAL, INCLUDING JOINT DEVELOPMENT AGREEMENT DATED 23.11.2 005, IN RESPECT OF M/S COROMANDEL CABLES PVT. LTD. WAS FOUND. IN F ACT, NO MATERIAL WAS FOUND RELATING TO THE PRESENT ASSESSEE. ON THE BASIS OF THE MATERIAL FOUND IN THE CASE OF M/S COROMANDEL CABLES PVT. LTD., THE VALUE OF THE LAND WAS ESTIMATED. IN THE EARLIER PA RT OF THIS ORDER, WHILE CONSIDERING THE QUANTUM ADDITION MADE BY THE ASSESSING OFFICER, THIS TRIBUNAL FOUND THAT THERE CANNOT BE A NY ADDITION ON THE BASIS OF THE MATERIAL RELATABLE TO M/S COROMANDEL C ABLES PVT. LTD. IN THE ABSENCE OF ANY MATERIAL IN RESPECT OF THE PR ESENT ASSESSEE OTHER THAN THE AGREEMENT FOR SALE DATED 1.04.2008, WHICH DISCLOSES THE SALE CONSIDERATION AT ` 10.50 CRORES, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE CIT(APPEALS) HAS RIGHTL Y DELETED THE PENALTY. THIS TRIBUNAL DO NOT FIND ANY REASON TO I NTERFERE WITH THE ORDER OF THE CIT(APPEALS). ACCORDINGLY, THE SAME I S CONFIRMED. 17. IN THE RESULT, THE APPEALS OF THE ASSESSEE IN I .T.A. NOS. 1880, 1881 & 1882/MDS/2013 ARE ALLOWED AND THE APPEALS OF THE REVENUE IN I.T.A. NOS. 1937, 1938, 1939, 1940, 1941 & 1942/MDS/2013 ARE DISMISSED. 17 I.T.A. NOS.1880 TO 1881/MDS/13 I.T.A. NOS.1937 TO 1942/MDS/13 ORDER PRONOUNCED ON 26 TH JUNE, 2015 AT CHENNAI. SD/- SD/- (. !' ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 5 /DATED, THE 26 TH JUNE, 2015. KRI. 2 ,/67 87(/ /COPY TO: 1. ASSESSEE 2. ASSESSING OFFICER 3. 1 9/ () /CIT(A)-I, CHENNAI 4. 1 9/ /CIT, CHENNAI-I 5. 7: ,/ /DR 6. ;' < /GF.