Naresh Hathising Shah, Ahmedabad V. ITO, Intl.Taxn-1, Ahmedabad

ITA 1967/AHD/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0964 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 18-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NK GOEL
• Keywords: Sale consideration of property below Jantri Value; Income from undisclosed sources; Question of law; Cost of acquisition; Fair market value; Benefit of exemption
• Section: 143(3); 50C; 54F; 201; 48; 13; 148; 54; 139

Judgement Text

PAGE 1 OF 12 , IN THE INCOME TAX APPELLATE TRIBUNAL , SMC BENCH, AHMEDABAD BEFORE , SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND MS . MADHUMITA ROY , JUDICIAL MEMBER ./ ITA NO . 1967 /AHD/2018 / ASSTT. YEAR : 2011 - 2012 NARESH HATHISING SHAH , C/O. SHAH ENTERPRISE , DENA BANK BUILDING , PRITAMNAGAR , ELLISBRIDGE, AHMEDABAD - 380006 . PAN: CWIPS5336K VS . I.T .O , INTL. TAXN. - 1 , AHMEDABAD . & ./ ITA NO. 1968/AHD/2018 / ASSTT. YEAR: 2011 - 2012 RUPANDE NARESH SHAH, C/O. SHAH ENTERPRISE, DENA BANK BUILDING, PRITAMNAGAR, ELLISBRIDGE, AHMEDABAD - 380006. PAN: CWIPS5334M VS. I.T.O, INTL. TAXN. - 1, AHMEDABAD. (APPLICANT) ( RESPON D ENT ) ASSESSEE BY : SHRI ARTI N. SHAH , A.R REVENUE BY : SHRI N.K. GOEL , SR . DR / DATE OF HEARING : 26 / 09 / 201 9 / DATE OF PRONOUNCEMENT: 12 /12 /2 01 9 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THE CAPTIONED APPEAL S HAVE BEEN FILED AT THE INSTANCE OF DIFFERENT AS SESSEE AGAINST THE SEPARATE ORDER S OF THE LEARNED COMMISS IONER OF INCOME TAX (APPEALS) , ITA NO S.1967 - 1968 /AHD/2018 ASSTT. YEAR 2011 - 12 PAGE 2 OF 12 AHMEDABAD - 13 [ LD. CIT (A) IN SHORT] , OF EVEN DATED 31 / 08 / 2018 ARI SING IN THE MATTER OF ASSESSMENT ORDER PASSED UNDER S. 143(3) R.W.S . 147 OF THE INCOME TAX ACT, 1961 ( HERE - IN - AFTER REFERRED TO AS 'THE ACT') DATED 13 / 12 / 201 7 RELEVANT TO ASSESSMENT YEAR (A . Y) 2011 - 12 . ITA NO.1967/AHD/2018 FOR A.Y.2011 - 12 THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1 TH E LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 13, AHMEDABAD HAS ERRED IN LAW AND ON FACTS OF THE CASE IN HOLDING THAT THE ASSESSING OFFICER HAS RIGHTLY DENIED EXEMPTION U/S.54F IN RESPECT OF INVESTMENT MADE FOR BOOKING OF RESIDENTIAL BUNGALOW IN THE SCHEM E OF SHIVALIK LAKE VIEW, AND ACCORDINGLY, CONFIRMED THE ADDITION OF RS.13,46,203/ - . 2 THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 13, AHMEDABAD HAS ERRED IN LAW AND ON FACTS OF THE CASE IN CONFIRMING THE ADDITION OF RS.27,94,000/ - MADE BY THE ASSESSING OFFICER IN RESPECT OF CASH DEPOSITED IN BANK ACCOUNT BY THE APPELLANT. 3 YOUR APPELLANT PRAYS TO RESERVE THE RIGHT TO ADD, ALTER, AMEND AND/OR WITHDRAW ANY OF THE ABOVE GROUNDS OF APPEAL. 2. THE 1 ST ISSUE RAISED BY THE ASSESSEE IS THAT THE LEARNED CIT (A) ERRED IN CONFIRMING THE ORDER OF THE AO BY NOT ALLOWING THE EXEMPTION UNDER SECTION 54F OF THE ACT FOR THE INVESTMENT MADE IN THE RESIDENTIAL BUNGALOW AMOUNTING TO 13,46,203.00 ONLY. 3. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUAL AND NON - RESIDENT INDIAN . HIS (THE ASSESSEE) BROTHER SHRI VIJAY B HAI HATHI SINGH SHAH IS THE POWER OF ATTORNEY HOLDER ON BEHALF OF THE ASSESSEE. THE BROT HER OF THE ASSESSEE SHRI VIJAY B HAI HATHI SINGH SHAH IS A PARTNER IN A PA RTNERSHIP FIRM NAMELY M/S BHIKUBHAI INFRASTRUCTURE LLP ( IN SHORT BI LLP ) WHICH IS ENGAGED IN THE DEVELOPMENT OF THE PROPERTIES. 3.1 THE ASSESSEE THROUGH HIS BROTHER SHRI VIJAY B HAI HATHI SINGH SHAH ALONG WITH OTHER CO - OWNERS IN THE YEAR UNDER CONSIDERATION HAS SOLD THE PIECE OF LAND TO THE BI LLP FOR . 1,12,00,000.00 BUT THE VALUE FOR THE PURPOSE OF THE STAMP DUTY WAS ITA NO S.1967 - 1968 /AHD/2018 ASSTT. YEAR 2011 - 12 PAGE 3 OF 12 DETERMINED AT 1,38,32,653.00. ACCORDINGLY THE SHARE OF THE ASSESSE E IN THE SALE CONSIDERATION WAS CALCULATED AT 23,05442.00 BEING 1/6 SHARE IN THE OWNERSHIP OF THE LAND. AS SUCH THE ASSESSEE HAS OFFERED THE CAPITAL GAIN OF 3,13,472 TO TAX AS CAPITAL GAIN IN THE MANNER GIVEN BELOW: INCOME FROM LONG TERM CAPITAL GAIN SALE OF ITEMS AS PER LIST ENCLOSED RS.23,05,442/ - LESS: (COST OF ACQUISITION ETC.) INDEXED COST OF ACQUISITION ( - ) RS.6,45,767/ - LESS: (EXEMPTION U/S.54F) INVESTMENT IN HOUSE ( - ) RS.13,46,203/ - CAPITAL GAIN RS.3,13,472/ - 3.2 THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS JUSTIFIED THE EXEMPTION UNDER SECTION 54F OF THE ACT BY SUBMITTING THAT HE HAS MADE THE PAYMENT FOR THE INVESTMENT IN THE ANOTHER RESIDENTIAL PROPERTY DATED 25 FEBRUARY 2011 AND 10 MARCH 2011 AMOUNTING TO 7, 50,000.00 AND 1,20,000.00 RESPECTIVELY. 3.3 THE NEW PROPERTY WAS PU RCHASED BY THE ASSESSEE FROM BI LLP IN WHICH THE BROTHER OF THE ASSESSEE WAS THE PARTNER. HOWEVER, THE ASSESSEE COULD NOT PRODUCE THE COPY OF THE SALE DEED FOR THE NEW PROPERTY AS THE SAME WAS UNDER THE PROGRESS/CONSTRUCTION. 3.4 HOWEVER, THE AO OBSERVED CERTAIN FACTS DURING THE ASSESSM ENT PROCEEDINGS AS DETAILED UNDER: I. THE TIME LIMIT TO MAKE THE INVESTMENT IN THE NEW PROPERTY WAS UP TO 2 MARCH 2014 UNDER THE PROVISIONS OF SECTION 54F OF THE ACT AS THE IMPUGNED LAND WAS SOLD DATED 3 MARCH 2011. II. THE ASSESSEE THROUGH HIS BROTHER ALONG W ITH OTHER CO - OWNERS HAS SOLD THE LAND TO THE BI LLP IN WHICH THE BROTHER THE ASSESSEE WAS PARTNER. THE MONEY RECEIVED BY THE ASSESSEE FROM THE SALE OF LAND WAS AGAIN GIVEN BACK TO THE BI LLP WHICH WAS SHOWN AS INVESTMENT IN THE NEW PROPERTY. ITA NO S.1967 - 1968 /AHD/2018 ASSTT. YEAR 2011 - 12 PAGE 4 OF 12 ACCORDINGLY TH E ASSESSEE CLAIMED THE BENEFIT OF EXEMPTION PROVIDED UNDER SECTION 54F OF THE ACT. III. THE ASSESSEE DID NOT FILE ANY INCOME TAX RETURN UNDER THE PROVISIONS OF SECTION 139(1)/139(4) OF THE ACT DECLARING SUCH CAPITAL GAIN BUT WHEN THE NOTICE WAS ISSUED UNDER S ECTION 148 OF THE ACT, THEN HE CAME FORWARD WITH THE PLANNING OF TAX EVASION BY CLAIMING THE EXEMPTION UNDER SECTION 54F OF THE ACT. IN VIEW OF THE ABOVE, THE AO TREATED THE ENTIRE TRANSACTION FOR CLAIMING THE EXEMPTION UNDER SECTION 54F OF THE ACT AS A C OLOURABLE DEVICE BY USING DUBIOUS METHODS FOR TAX EVASION. ACCORDINGLY, THE AO WAS OF THE VIEW THAT SUCH PLANNING INVOLVING THE TAX EVASION CANNOT BE PERMITTED IN VIEW OF THE JUDGMENT OF THE HON BLE SUPREME COURT IN THE CASE OF MCDOWELL & CO. LTD. VS COMME RCIAL TAX OFFICER REPORTED IN 154 ITR 148. ACCORDINGLY THE LEARNED AO DENIED THE BENEFIT OF THE EXEMPTION PROVIDED UNDER SECTION 54F OF THE ACT AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. AGGRIEVED ASSESSEE PREFERRED AN APPEAL TO THE LEARNED CIT (A). 4. THE ASSESSEE BEFORE THE LEARNED CIT (A) SUBMITTED THAT HE HAS NOT FILED THE INCOME TAX RETURN UNDER THE PROVISIONS OF SECTION 139 OF THE ACT AS HE WAS UNDER THE BELIEF THAT HIS INCOME IS NOT CHARGEABLE TO TAX. 4.1 THE PURPOSE OF THE PROVISIONS OF S ECTION 54F OF THE ACT WAS TO MAKE THE INVESTMENT IN THE RESIDENTIAL PROPERTY WHICH HAS BEEN DONE IN THE CASE ON HAND. BUT THE SALE DEED WAS EXECUTED AS THE NEW RESIDENTIAL PROPERTY WAS UNDER THE CONSTRUCTION. THE ASSESSEE ALSO CLAIMED THAT THE PROVISIONS O F SECTION 54F OF THE ACT ARE THE BENEFICIAL PROVISION THEREFORE THE SAME SHOULD BE READ LIBERALLY. 4.2 THE ASSESSEE ALSO CLAIMED THAT IN THE CASE OF CO - OWNER NAMELY SHRI NIRANJANBHAI AND VIBHABEN, THE AO HAS ALLOWED THE EXEMPTION UNDER SECTION ITA NO S.1967 - 1968 /AHD/2018 ASSTT. YEAR 2011 - 12 PAGE 5 OF 12 54F OF TH E ACT IN THE ASSESSMENT FRAMED UNDER SECTION 147 READ WITH SECTION 143(3) OF THE ACT VIDE ORDER DATED 28 TH OF JANUARY 2016. IN VIEW OF THE ABOVE, THE ASSESSEE CLAIMED THAT THE IMPUGNED TRANSACTION CANNOT BE TREATED AS COLOURABLE DEVICE TO AVOID THE PAYMEN T OF TAX AS ALLEGED BY THE AO DURING THE ASSESSMENT PROCEEDINGS AS ALL THE TRANSACTIONS WERE MADE WITH THE GENUINE PARTIES WHICH WERE DULY DISCLOSED. 5. HOWEVER THE LEARNED CIT (A) DISAGREED WITH THE CONTENTION OF THE ASSESSEE AND CONFIRMED THE ORDER OF THE AO BY OBSERVING THAT THE ASSESSEE BESIDES THE PROOF OF THE PAYMENT HAS NOT FILED OTHER DOCUMENTS SUCH AS BOOKING FORM, ALLOTMENT LETTER OR AGREEMENT TO SELL EVIDENCING THAT THE ASSESSEE HAS ACQUIRED RIGHT IN THE PROPERTY TO BE CONSTRUCTED BY THE BUILD ER. MERELY MAKING THE PAYMENT TO THE BUILDER DOES NOT ENTITLE THE ASSESSEE TO CLAIM THE BENEFIT OF EXEMPTION AS PROVIDED UNDER SECTION 54F OF THE ACT. 5.1 THE LEARNED CIT (A) ALSO OBSERVED THAT THE TIME LIMIT PROVIDED UNDER THE PROVISIONS OF SECTION 54F OF THE ACT IS FOR 3 YEARS BUT THE ASSESSEE FAILED TO COMPLY THE CONDITIONS SPECIFIED THEREIN EVEN AFTER THE EXPIRY OF 6 YEARS. THUS, THE CONTENTION OF THE ASSESSEE THAT THE CONSTRUCTION OF THE PROPERTY IS UNDER PROGRESS CANNOT BE ENTERTAINED IN A SITUATION WHERE THE BUILDER IS THE RELATIVE OF THE ASSESSEE. 5.2 THE LEARNED CIT (A) FURTHER OBSERVED THAT THE ISSUE IN THE CASE OF CO - OWNER WAS IN RELATION TO THE PROVISIONS OF SECTION 50C OF THE ACT. AS SUCH THERE WAS NO DISCUSSION ABOUT THE EXEMPTION CLAIMED U NDER SECTION 54F OF THE ACT. ACCORDINGLY HE WAS OF THE VIEW THAT NO REFERENCE CAN BE MADE TO SUCH ASSESSMENT. FURTHERMORE EACH ASSESSMENT IS A SEPARATE ASSESSMENT AND THEREFORE THE RATIO LAID DOWN IN ONE ASSESSMENT CANNOT BE APPLIED TO THE OTHER ASSESSMENT . ITA NO S.1967 - 1968 /AHD/2018 ASSTT. YEAR 2011 - 12 PAGE 6 OF 12 IN VIEW OF THE ABOVE, THE LEARNED CIT (A) DISREGARDED THE CONTENTION OF THE ASSESSEE AND CONFIRMED THE ORDER OF THE AO. BEING AGGRIEVED BY THE ORDER OF THE LEARNED CIT (A) THE ASSESSEE IS IN APPEAL BEFORE US. 6. THE LEARNED AR BEFORE US FILED A PAPER BOOK RUNNING FROM PAGES 1 TO 26 AND SUBMITTED THAT THE IMPUGNED PROPERTY HAS FINALLY BEEN REGISTERED IN THE NAME OF THE ASSESSEE DATED 30 MARCH 2019. THE LEARNED AR IN SUPPORT OF HIS CLAIM FILED THE COPY OF THE SALE DEED WHICH IS PLACED ON RECORD. TH E LEARNED AR REITERATED THE SUBMISSIONS AS MADE BEFORE THE AUTHORITIES BELOW. 7. ON THE OTHER HAND, THE LEARNED DR SUPPORTED THE VIEW TAKEN BY THE AUTHORITIES BELOW BY REITERATING THE FINDINGS CONTAINED IN THE RESPECTIVE ORDERS. 8. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. FROM THE PRECEDING DISCUSSION WE FIND THAT THE BENEFIT OF EXEMPTION CLAIMED BY THE ASSESSEE UNDER SECTION 54F OF THE ACT WAS DENIED BY THE LOWER AUTHORITIES MAINLY ON 2 GR OUNDS. FIRSTLY, THE CONSTRUCTION WAS NOT COMPLETED WITHIN THE TIME PERMITTED UNDER THE PROVISIONS OF SECTION 54F OF THE ACT. SECONDLY, THE ENTIRE TRANSACTION FOR SALE OF THE LAND AND THE ALLEGED INVESTMENT IN THE PROPERTY FOR CLAIMING THE EXEMPTION UNDER S ECTION 54F OF THE ACT IS A COLOURABLE DEVICE WHICH IS IMPERMISSIBLE UNDER THE PROVISIONS OF LAW. 8.1 ADMITTEDLY, THE PROPERTY WAS FINALLY ACQUIRED BY THE ASSESSEE AS EVIDENT FROM THE COPY OF THE SALE DEED WHICH IS AVAILABLE ON RECORD. NOW THE QUESTION A RISES WHETHER THE ASSESSEE CAN BE DENIED THE BENEFIT OF THE PROVISIONS OF SECTION 54F OF THE ACT IN A SITUATION WHERE THE BUILDER HAS DELAYED THE CONSTRUCTION. IT IS ALSO NOT IN DISPUTE THAT THE PAYMENT FOR THE PURCHASE OF THE PROPERTY WAS MADE WELL WITHIN THE TIME SPECIFIED UNDER SECTION 54F OF THE ACT. IN OUR CONSIDERED VIEW, IN A SITUATION AS IN THE CASE ON HAND THE ASSESSEE CANNOT ITA NO S.1967 - 1968 /AHD/2018 ASSTT. YEAR 2011 - 12 PAGE 7 OF 12 BE DENIED THE BENEFIT OF EXEMPTION MERELY ON THE GROUND THAT THE CONSTRUCTION WAS NOT COMPLETED WITHIN THE TIME. IN THIS REG ARD WE FIND SUPPORT AND GUIDANCE FROM THE JUDGMENT OF HON BLE KARNATAKA HIGH COURT IN THE CASE OF CIT VERSUS SAMBANDAM UDAYKUMAR REPORTED IN 19 TAXMANN.COM 17 WHEREIN IT WAS HELD AS UNDER: 14. IN THE INSTANT CASE, THE MATERIAL ON RECORD DISCLOSES THAT THE ASSESSEE HAD INVESTED RS. 2,16,61,670/ - AS ON 31.10.2006 WITHIN TWELVE MONTHS FROM THE DATE OF REALIZATION OF SALE PROCEEDS OF SHARES. THE DEVELOPER ACKNOWLEDGING THE SAID AMOUNT HAS GIVEN PAR TICULARS OF THE STAGE OF CONSTRUCTION. ACCORDING TO HIM, ONLY MINOR FITTINGS LIKE WINDOW SHUTTERS AND SOME ELECTRICAL WORK WERE REQUIRED TO BE MADE. IN FACT, THE REPORT OF THE INQUIRY CONDUCTED BY THE DEPARTMENT ALSO DISCLOSES THE FLOORING WORK, ELECTRICAL WORK, FITTING OF DOOR AND WINDOW SHUTTERS WERE STILL PENDING. THE ASSESSEE HAS PRODUCED BEFORE THE AUTHORITIES THE REGISTERED SALE DEED DATED 7.11.2009 SHOWING THE TRANSFER OF THE PROPERTY IN HIS FAVOUR. THE SAID DOCUMENT DISCLOSES MARBLE TILES FLOORING H AS BEEN DONE, ELECTRICITY, WATER AND SANITARY CONNECTIONS HAVE BEEN GIVEN, WOOD USED IS TEAK IN RESPECT OF DOORS AND WINDOWS. THE ASSESSEE HAS BEEN PUT IN POSSESSION OF THE PROPERTY AND HE IS IN OCCUPATION. THEREFORE , THE ASSESSEE HAS INVESTED THE SALE CON SIDERATION IN ACQUIRING A RESIDENTIAL PREMISES AND HAS TAKEN POSSESSION OF THE RESIDENTIAL BUILDING AND IS LIVING IN THE SAID PREMISES. THE OBJECT OF ENACTING SECTION 54 OF THE ACT I.E., TO ENCOURAGE INVESTMENT IN A RESIDENTIAL BUILDING IS COMPLETELY FULFI LLED. 15. IN THAT VIEW OF THE MATTER, THE TRIBUNAL WAS JUSTIFIED IN EXTENDING THE BENEFIT OF SECTION 54F OF THE ACT TO THE ASSESSEE AND THE SAID ORDER DOES NOT SUFFER FROM ANY INFIRMITY WHICH CALLS FOR INTERFERENCE. 8.2 WE ALSO FIND SUPPORT AND GUIDANCE FROM THE JUDGMENT OF HON BLE KARNATAKA HIGH COURT IN THE CASE OF PCIT VERSUS C. GOPALASWAMY REPORTED IN 81 TAXMANN.COM 78 WHEREIN IT WAS HELD AS UNDER: THE ASSESSEE INVESTED LONG - TERM CAPITAL GAIN ON SHARES IN RESIDENTI AL HOUSE AND CLAIMED BENEFIT UNDER SECTION 54F. THE ASSESSING OFFICER DISALLOWED THE CLAIM OF EXEMPTION UNDER SECTION 54F ON THE GROUND THAT THE CONSTRUCTION OF VILLAS WAS NOT COMPLETED WITHIN THE STIPULATED TIME ALLOWED UNDER SECTION 54F. THE TRIBUNAL HEL D THAT IT WAS TRUE THAT THE AGREEMENT FOR CONSTRUCTION ENTERED BY THE ASSESSEE WITH THE BUILDER GAVE AN OUTER DATE, WHICH WENT BEYOND THE THREE YEAR PERIOD FROM THE DATE OF SALE OF THE SHARES. HOWEVER, THE ASSESSEE HAD DONE WHAT ALL IT COULD DO FOR ACQUIRI NG THE VILLA BY PAYING THE WHOLE OF THE PRICE. THE TRIBUNAL, ACCORDINGLY, ALLOWED CLAIM OF EXEMPTION. HELD THAT THE ISSUE IS ALREADY COVERED BY THE DECISION OF THIS COURT IN THE CASE OF CIT V. SAMBANDAM UDAYKUMAR [2012] 345 ITR 389/19TAXMANN.COM 17/206 TAXMAN 150 . SINCE THE TRIBUNAL HAS FOLLOWED THE SAID DECISION OF THIS COURT, NO SUBSTANTIAL QUESTION OF LAW WOULD ARISE FOR CONSIDERATION IN THE PRESENT APPEAL. ITA NO S.1967 - 1968 /AHD/2018 ASSTT. YEAR 2011 - 12 PAGE 8 OF 12 IN ADDIT ION TO THE ABOVE WE ALSO NOTE THAT THE REVENUE IN THE CASE OF THE CO - OWNER AS DISCUSSED ABOVE HAS ACCEPTED THE CLAIM MADE BY THE ASSESSEE IN THE ASSESSMENT FRAMED UNDER SECTION 147 READ WITH SECTION 143(3) OF THE ACT. THE COURTS HAVE HELD THAT ONCE THE CLA IM IN THE CASE OF THE CO - OWNER HAS BEEN ACCEPTED THEN SUCH CLAIM/BENEFIT CANNOT BE DENIED IN THE CASE OF OTHER CO - OWNER. REGARDING THIS, WE FIND SUPPORT AND GUIDANCE FROM THE JUDGMENT OF HON BLE MADRAS HIGH COURT IN THE CASE OF CIT V/S KUMARARANI SMT. MEEN AKSHI ACHI REPORTED IN 292 ITR 624 WHEREIN IT WAS HELD AS UNDER: IT IS TRITE THAT IF DURING THE SAME ASSESSMENT YEAR, THE SAME QUANTITY OF WEALTH IN POSSESSION OF ONE CO - SHARER IS SUBJECTED TO A LOWER RATE OF TAXATION, IT WOULD BE HIGHLY IMPROPER TO BURDEN A SIMILARLY SITUATED CO - SHARER WITH A HIGHER RATE OF TAX. IF SUCH AN ACTION ON THE PART OF THE ASSESSING AUTHORITIES IS SANCTIONED, IT WOULD MILITATE AGAINST THE PRINCIPLE OF EQUALITY OF LAW AS ENSHRINED IN ARTICLE 14 OF THE CONSTITUTION, VIDE JASWA NT RAI'S CASE ( SUPRA). [PARA 5] APPLYING THE RATIO LAID DOWN IN JASWANT RAI'S CASE ( SUPRA), TO THE FACTS OF THE INSTANT CASE WOULD LEAD TO THE FIRM CONCLUSION THAT THE ASSESSEE, WHO WAS ALSO A CO - OWNER OF THE PROPERTY, WAS ENTITLED TO THE BENEFIT ENJOYED B Y THE OTHER CO - OWNER, WHOSE VALUATION OF THE SAME PROPERTY, AT THE SAME RATE AS THAT OF THE ASSESSEE, WAS ACCEPTED BY THE COMMISSIONER AND RECORDED IN THE ORDER UNDER APPEAL BY THE TRIBUNAL. [PARA 6] FINDING NO REASON TO INTERFERE WITH THE ORDER OF THE TRIBU NAL, THE INSTANT APPEAL WAS TO BE DISMISSED. 8.3 WE ALSO NOTE THAT THE ITAT AHMEDABAD HAS ALSO TAKEN THE SIMILAR VIEW IN THE CASE OF SHRI CHANDULAL PARBATBHAI PATEL V/S DCIT IN ITA NO. 2444/AHD/2016 VIDE ORDER DATED 23 - 10 - 2018 WHEREIN IT WAS HELD AS UN DER; WITH THE ASSISTANCE OF LD.REPRSENTATIVES, WE HAVE GONE THROUGH THE RECORD CAREFULLY. THE GRIEVANCE OF THE ASSESSEE IS THAT THE LD.AO HAS ERRED IN ADOPTING VALUE OF THE LAND TRANSFERRED BY THE ASSESSEE EQUIVALENT TO THE VALUE ON WHICH STAMP DUTY WAS P AID. IT EMERGES OUT FROM THE RECORD THAT THE ASSESSEE WAS HAVING 25% SHARE IN THE LAND BEARING SURVEY NO.1089/90. HE HAS SOLD THIS LAND WITH OTHER CO - OWNERS. THE LD.AO WHILE COMPUTING THE CAPITAL GAIN UNDER SECTION 48 OF THE ACT ADOPTED FULL VALUE OF THE S ALE CONSIDERATION EQUIVALENT TO THE AMOUNT ON WHICH STAMP DUTY WAS PAID. THE CASE OF THE ASSESSEE WAS THAT IN THE CASE OF CO - OWNER, REFERENCE WAS GIVEN TO DVO UNDER SECTION 50C(2) WHO HAD DETERMINED FAIR MARKET VALUE OF THE PROPERTY. THE LD.COUNSEL FOR THE ASSESSEE CONTENDED THAT THE ASSESSEE MADE A PRAYER BEFORE THE LD.CIT(A) THAT THE SAME VALUE BE ADOPTED IN THE CASE OF THE ASSESSEE. WE FIND FORCE IN THIS CONTENTION OF THE ASSESSEE, BECAUSE SECTION (2) OF SECTION 50C CONTEMPLATES THAT IN CASE ASSESSEE RAI SES AN OBJECTION OF THE VALUE ON WHICH STAMP DUTY WAS PAID, THEN IN ORDER TO FIND FAIR MARKET VALUE OF THE ASSET, REFERENCE WOULD BE MADE TO THE DVO , SINCE IN THE CASE OF CO - OWNER SUCH REFERENCE WAS MADE ON THE SAME PIECE OF LAND. THE SAME VALUE ITA NO.24 44/AHD/2016 DETERMINED BY THE AO IN THE CASE OF CO - OWNER OUGHT TO BE ADOPTED IN THE CASE OF THE ASSESSEE. WE ALLOW THE APPEAL OF THE ASSESSEE AND REMIT THE ISSUE TO THE FILE OF THE AO WITH DIRECTION TO THE LD.AO TO COMPUTE THE CAPITAL GAIN ASSESSABLE IN TH E HANDS OF THE ASSESSEE ON TRANSFER OF THE ABOVE LAND BY ADOPTING FULL SALE CONSIDERATION EQUIVALENT TO THE AMOUNT DETERMINED BY THE DVO IN THE CASE OF CO - OWNER. WITH THIS DIRECTION, WE ALLOW THIS GROUND OF APPEAL. IN VIEW OF THE ABOVE, WE HOLD THAT THE IMPUGNED TRANSACTION CANNOT BE TREATED AS COLOURABLE DEVICE ADOPTED BY THE ASSESSEE TO ESCAPE FROM THE INCOME TAX ITA NO S.1967 - 1968 /AHD/2018 ASSTT. YEAR 2011 - 12 PAGE 9 OF 12 LIABILITY. ACCORDINGLY WE ARE OF THE OPINION THAT THE PRINCIPLES LAID DOWN IN THE CASE OF MCDOWELLS (SU PRA) CANNOT BE APPLIED IN THE CASE ON HAND. IN VIEW OF THE ABOVE, THE GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 9. THE 2 ND ISSUE RAISED BY THE ASSESSEE IS THAT THE LEARNED CIT (A) ERRED IN CONFIRMING THE ORDER OF THE AO BY SUSTAINING THE ADDITION OF 27,94,000 ON ACCOUNT OF CASH DEPOSITED IN THE BANK. 10. THE ASSESSEE IN THE YEAR UNDER CONSIDERATION HAS DEPOSITED CASH ON DIFFERENT DATES IN HIS SAVING BANK ACCOUNT BEARING NO. 009710003327 MAINTAIN WITH DENA BANK. ON QUESTION ABOUT THE SOURCE OF CAS H DEPOSITED, THE ASSESSEE REPLIED THAT HE HAS WITHDRAWN CASH AMOUNTING TO 35 , 02 , 500 .00 ON DIFFERENT DATES BEGINNING FROM 24 JUNE 2008 TO 16 JULY 2010 WHICH WAS UTILIZED TO DEPOSIT THE SAME IN THE BANK ACCOUNT IN THE YEAR UNDER CONSIDERATION . 10.1 HOWEVER, THE AO DISAGREED WITH THE CONTENTION OF THE ASSESSEE BY OBSERVING THAT THERE IS NO LINK/MATCH AND THE REASONS TO WITHDRAW THE CASH AND DEPOSIT THE SAME IN FUTURE . ACCORDINGLY THE AO WAS OF THE VIEW THAT, CASH WITHDRAWN HAS BEEN UTILIZED BY THE ASS ESSEE FOR SOME OTHER PURPOSES BEST KNOWN TO THE ASSESSEE . THUS HE CONCLUDED THAT THE AMOUNT OF CASH DEPOSIT REPRESENTS THE INCOME FROM UNDISCLOSED SOURCES. ACCORDINGLY HE TREATED THE DEPOSIT OF CASH OF 2 7 , 94 , 000 .00 AS UNDISCLOSED INCOME AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. AGGRIEVED ASSESSEE PREFERRED AN APPEAL TO THE LEARNED CIT (A). 11. THE ASSESSEE BEFORE THE LEARNED CIT (A) SUBMITTED THAT HE HAS VISITED IN INDIA FOR THE COUPLE OF MONTHS ONLY AND FILED THE COPY OF THE PASSPORT IN SUPPORT OF HIS CONTENTION. AS SUCH HE CLAIMED THAT THE MONEY WITHDRAWN FROM THE BANK WAS LYING WITH HIM IN INDIA WHICH WAS SUBSEQUENTLY DEPOSITED IN THE BANK ACCOUNT. ITA NO S.1967 - 1968 /AHD/2018 ASSTT. YEAR 2011 - 12 PAGE 10 OF 12 12. HOWEVER, THE LEARNED CIT (A) DISREGARDED THE CONTENTION OF THE ASSESSEE BY OBSERVING THAT NO PRUDENT PERSON WILL WITHDRAW THE CASH ON DIFFERENT DATES DESPITE THERE IS SUFFICIENT CASH BALANCE LYING WITH HIM. ACCORDINGLY HE CONFIRMED THE ORDER OF THE AO. BEING AGGRIEVED BY THE ORDER OF THE LEARNED CIT (A) THE ASSESSEE IS IN APPEAL BEFORE US. 13. THE LEARNED AR BEFORE US REITERATED THE SUBMISSIONS AS MADE BEFORE THE AUTHORITIES BELOW. 14. ON THE OTHER HAND THE LEARNER DR VEHEMENTLY SUPPORTED THE ORDER OF THE LOWER AUTHORITIES. 15. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATE RIALS AVAILABLE ON RECORD. FROM THE PRECEDING DISCUSSION, WE FIND THAT T HE CASH WITHDRAWAL FROM THE BANK HAS NOT BEEN DOUBTED BY THE AUTHORITIES BELOW . SIMILARLY NOTHING HAS BEEN BROUGHT ON RECORDS SUGGESTING THAT THE CASH WITHDRAWN FROM THE BANK HAS BEEN UTILIZED FOR SOME OTHER PURPOSES OTHER THAN THE DEPOSIT OF CASH AS ALLEGED BY THE AUTHORITIES BELOW. THE ONUS WAS OF THE REVENUE TO REJECT THE CONTENTION OF THE ASSESSEE BASED ON COGENT REASONS THAT THE CASH WAS NOT DEPOSITED OUT OF THE CASH WITHDRAWAL FRO M THE BANK . BUT THE REVENUE FAILED TO DO SO. THUS I N THE ABSENCE OF ANY DOCUMENTARY EVIDENCE, WE CAN SAFELY PRESUME THAT THE CASH WITHDRAWN FROM THE BANK WAS AVAILABLE WITH THE ASSESSEE WHICH WAS SUBSEQUENTLY DEPOSITED WITH THE BANK. THEREFORE, WE CANNOT T REAT THE SAME AS UNDISCLOSED INCOME OF THE ASSESSEE. I N VIEW OF THE ABOVE, WE ARE OF THE OPINION THAT THERE CANNOT BE ANY ADDITION ON ACCOUNT OF DEPOSIT OF CASH IN THE SAVING BANK ACCOUNT OF THE ASSESSEE BY ITA NO S.1967 - 1968 /AHD/2018 ASSTT. YEAR 2011 - 12 PAGE 11 OF 12 TREATING THE SAME AS UNDISCLOSED INCOME. HENCE T HE GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. COMING TO THE ITA NO. 1968/AHD/2018, AN APPEAL BY THE ASSESSEE THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. TH E LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 13, AHMEDABAD HAS ERRED IN LAW AND ON FACTS OF THE CASE IN HOLDING THAT THE ASSESSING OFFICER HAS RIGHTLY DENIED EXEMPTION U/S.54F IN RESPECT OF INVESTMENT MADE FOR BOOKING OF RESIDENTIAL BUNGALOW IN THE SCHEM E OF SHIVALIK LAKE VIEW, AND ACCORDINGLY, CONFIRMED THE ADDITION OF RS.13,46,203/ - . 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 13, AHMEDABAD HAS ERRED IN LAW AND ON FACTS OF THE CASE IN CONFIRMING THE ADDITION OF R S.15,76 ,000/ - MADE BY THE ASSESSING OFFICER IN RESPECT OF CASH DEPOSITED IN BANK ACCOUNT BY THE APPELLANT. 3. YOUR APPELLANT PRAYS TO RESERVE THE RIGHT TO ADD, ALTER, AMEND AND/OR WITHDRAW ANY OF THE ABOVE GROUNDS OF APPEAL. 16. T HE 1 ST ISSUE RAISED BY THE ASSESS EE IS THAT THE LEARNED CIT (A) ERRED IN CONFIRMING THE ORDER OF THE AO BY DENYING THE BENEFIT OF EXEMPTION UNDER SECTION 54F OF THE ACT FOR 13 , 46 , 203 .00 ONLY. 17. AT THE OUTSET WE NOTE THAT THE IDENTICAL ISSUE HAS BEEN DECIDED BY US IN FAVOUR OF ASSESSEE IN THE CASE OF NARESH H ATHSING SHAH IN ITA NO. 1967/AHD/2018 V IDE PARAGRAPH NO.8 OF THIS ORDER. FOR THE DETAILED DISCUSSION, PLEASE REFER THE RELEVANT PARAGRAPH. RESPECTFULLY FOLLOWING THE SAME , WE ALLOW THE GROUND OF APPEAL OF THE ASSESSEE. ITA NO S.1967 - 1968 /AHD/2018 ASSTT. YEAR 2011 - 12 PAGE 12 OF 12 18. THE 2 ND ISSUE RAISED BY THE ASSESSEE IS THAT THE LEARNED CIT (A) ERRED IN CONFIRMING THE ORDER OF THE AO BY SUSTAINING THE ADDITION OF 15,76,000 ON ACCOUNT OF CASH DEPOSITED THE BANK. 19. AT THE OUTSET WE NOTE THAT THE IDENTICAL ISSUE HAS BEEN DECIDED BY US IN FAVOUR OF ASSESSEE IN THE CASE OF NARESH HATHSING SHAH IN ITA NO. 1967/AHD/2018 V IDE PARAGRAPH NO.15 OF THIS ORDER. FOR THE DETAILED DISCUSSION, PLEASE REFER THE RELEVANT PARAGRAPH. RESPECTFULLY FOLLOWING THE SAME WE ALLOW THE GROUND OF APPEAL OF THE AS SESSEE. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. 20. IN THE COMBINED RESULT, THE APPEALS OF BOTH THE ASSESSEE ARE ALLOWED. O RDER PRONOUNCED IN THE COURT ON 12 /12 / 2019 AT AHMEDABAD. - SD - - SD - (MS MADHUMITA ROY ) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER (TRUE COPY) A HMEDABAD; DATED 12 / 12 /2019 M ANISH