Asha Real Estates and Developers Private Ltd., Kolkata V. ITO, Ward-9(1), Kolkata, Kolkata

ITA 1967/KOL/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 3340 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 10 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 06-10-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SAURABH KUMAR CIT SRDR
• Assessee Lawyers: RAJIV KUMAR MAHAJAN
• Keywords: Sale consideration of property below Jantri Value; Fair market value
• Section: 143(3); 194C

Judgement Text

, C , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH C KOLKATA BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND DR. A.L. SAINI, ACCOUNTANT MEMBER ITA NO. 1967 / KOL / 20 16 ASSESSMENT YEAR :2011-12 ASHA REAL ESTATES AND DEVELOPERS PVT. LTD., ROOMNO.210, 2 ND FLOOR, 163, RABINDRA SARANI, KOLKATA-69 [ PAN NO.AAECA 4266 F ] V/S . INCOME TAX OFFICER, WARD-9(1), KOLKATA /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI RAJIV KUMAR MAHAJAN, FCA /BY RESPONDENT SHRI SAURABH KUMAR, ADDL. CIT-SR-DR /DATE OF HEARING 12-07-2018 /DATE OF PRONOUNCEMENT 24-08-2018 / O R D E R PER S.S.GODARA, JUDICIAL MEMBER:- THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2011-12 ARISES FROM THE COMMISSIONER OF INCOME TAX (APPEALS)-16 KOLKATAS O RDER DATED 08.08.2016, PASSED IN CASE NO.594/CIT(A)-16/KOL/2015-16/W-991), UPHOLDING THE ASSESSING OFFICERS ACTION ADDING AN AMOUNT OF 14,92,918/- AS REPRESENTING UNDER VALUATION OF SALE CONSIDERATION AND MAKING U/ S 40(A)(IA) DISALLOWANCE 44,00,968/-; RESPECTIVELY IN ASSESSMENT ORDER DATED 31.03.2014 INVOLVING PROCEEDINGS U/S 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. WE COME TO THE FORMER ISSUE OF UNDER VALUATION O F FLATS SALES AMOUNTING TO 14,92,918/-. THERE IS NO DISPUTE ABOUT THE ASSESSEE S ACTUAL SALE PRICE IN ITA NO.1967/KOL/2016 A.Y. 2011-12 ASHA REAL ESTATES & DEVELOPERS PVT LTD. VS . ITO WARD-9(1), KOL. PAGE 2 THE TWO FLATS AND 2B ON SECOND FLOOR AND 3A AND 3B ON THIRD FLOOR AT DIFFERENT RATES. THE ASSESSEES CASE BEFORE THE ASSESSING OFF ICER WAS THAT SAID SALE PRICES WERE AN INSTANCE OF DISTRESS SALE BEING IN D IRE NEED OF IMMEDIATE PAYMENT FOR MAKING CORRESPONDING PAYMENTS TO SUPPLI ERS AS WELL AS FRESH LAND PURCHASES. ALL THIS FAILED TO IMPRESS UPON THE ASSESSING OFFICER WHO ADDED THE IMPUGNED UNDER VALUATION QUA THE TWO FLATS IN QUESTION 2B AD 3A TO THE TUNE OF 1,40,182 AND 13,52,736/-; RESPECTIVELY TOTALING TO 14,92,918/- IN QUESTION. THE CIT(A) UPHOLDS THE ASSESSING OFFICER S ACTION AS FOLLOWS:- 4 GROUNDS NO. 3, 4 AND 5 ARE ADDITION ON ACCOUNT O F UNDER VALUATION OF SALES IN FLATS. DURING THE COURSE OF ASSESSMENT IT WAS FOUND THAT T HE ASSESSEE HAD SOLD FLATS 2B AND 3A AT LESS THAN THE MARKET VALUE OR STAMP DUTY VALUE OF THE FLATS. THE AO SAME TO THE CONCLUSION THAT S INCE THE DEED VALUE IS LESS THAN THE STAMP DUTY VALUE OR THE MARKET VALUE, THE CASH COMPONENT IS DEFINITELY THERE AND HENCE MADE AN ADDITION OF R S.14,92,918/-. BEFORE ME, THE AR HAS MADE SUBMISSION THAT THE ASSE SSEE WAS IN NEED OF FUNDS, AND HENCE FLAT WERE SOLD LESS THAT THE MA RKET VALUE. RELIANCE HAS BEEN ALSO DRAWN TOWARDS THE JUDGMENTS OF NARIMA N LAND DEVELOPERS PRIVATE LIMITED VS. DEPARTMENT OF INCOME TAX VIDE ITA NO.365/3695/MUM/2009, WHICH IT HAS BEEN HELD THAT S OME MATERIALS SHOULD BE FOUND TO DISPUTE THE CONTENTION OF THE AS SESSEE. HERE IN THIS CASE, THIS JUDGMENT IS NOT APPLICABLE BECAUSE THE F LATS HAVE BEEN SOLD LESS THE STAMP VALUE AND LESS THE MARKET VALUE OF T HE FLATS. HENCE, THE ORDER OF THE AO IS CONFIRMED AND THE APPEAL OF THE ASSESSEE IS DISMISSED ON GROUNDS 3, 4 AND 5. 3. BOTH THE LEARNED REPRESENTATIVES REITERATE THEIR RESPECTIVE STANDS. THE REVENUE IS VERY PARTICULAR IN VEHEMENTLY CONTENDING THAT THE ASSESSEE HAD SHOWN IMPUGNED ACTUAL SALE CONSIDERATION TO BE MUCH LESS THAN BOTH STAMP VALUE OR THE MARKET VALUE AS CLARIFIED IN THE CIT(A )S FINDINGS HEREIN. WE FIND NO MERIT IN THE INSTANT ARGUMENTS AS NEITHER OF THE LOWER AUTHORITIES HAS INDICATED AS TO WHAT WAS THE ACTUAL MARKET PRICE OR THE STAMP PRICE OF THE TWO FLATS TAKEN AS THE FAIR MARKET VALUE OF THE ASSET I N QUESTION. WE FIND THAT THE TRIBUNAL CO-ORDINATE BENCHS DECISION (SUPRA) DECID ED THE IDENTICAL ISSUE AGAINST THE REVENUE IN ABSENCE OF ANY MATERIAL ON R ECORD INDICATING UNDER VALUATION OF SALE CONSIDERATION. NEITHER OF THE LOW ER AUTHORITY HAS REFERRED TO ANY MATERIAL ON RECORD INDICATIVE OF ANY CASH COMPO NENT INVOLVED IN SALE PRICE ITA NO.1967/KOL/2016 A.Y. 2011-12 ASHA REAL ESTATES & DEVELOPERS PVT LTD. VS . ITO WARD-9(1), KOL. PAGE 3 OF THE ABOVE TWO FLATS. WE THEREFORE ACCEPT ASSESSE ES INSTANT FORMER SUBSTANTIVE GROUND. THE IMPUGNED ADDITION OF 14,92,918/- STANDS DELETED ACCORDINGLY. 4. NEXT COMES THE LATTER ISSUE OF SECTION 40(A)(IA) DISALLOWANCE OF 44,00,968/- ON ACCOUNT OF ASSESSEES FAILURE IN DE DUCTING TDS ON PAYMENT TO CONTRACTORS FOR SUPPLY OF LABOUR, MARBLE WORK, E LECTRIC WORK, CARPANTRY WORK ON VARIOUS SITES AS WELL AS LABOUR PAYMENTS, PLASTE R OF PARIS AND ELECTRIC WORKS. THE TAXPAYERS CASE BEFORE THE ASSESSING OFF ICER WAS THAT IT HAD DULY SUBJECTED ALL THE PAYMENTS TO TDS APPLICABLE AND AL SO @ 20% ON ABSENCE OF PAYEES PANS. IT FURTHER EXPLAINED THAT THE RELEVANT LABOUR PAYMENT HAD ALSO NOT EXCEEDED EITHER THE PER DAY LIMIT OR THE GROSS AMOUNT LIMIT INDICATED IN SECTION 194C OF THE ACT SO AS TO INVITE ANY TDS DED UCTION. THE ASSESSING OFFICER QUOTED ONE OF SUCH PAYMENT TO MR. JALAL UDD IN MONDALS CASE INVOLVING LABOUR CHARGES OF 1,54,155/- IN FOUR INSTANCES TO CONCLUDE THAT THE SAID CORRESPONDING PAYMENTS WERE NOT IN THE NATURE OF DAILY WAGES. HE THUS DELETED THE AMOUNT IN QUESTION OF 44,00,968/- AS UPHELD IN COURSE OF LOWER APPELLATE PROCEEDINGS. 5. LEARNED COUNSEL VEHEMENTLY CONTENDS DURING THE C OURSE OF HEARING THAT BOTH THE LOWER AUTHORITIES HAVE ERRED IN LAW AS WEL L AS ON FACTS IN DISALLOWING THE IMPUGNED LABOUR PAYMENTS. HE HAS FILED ASSESSEE S DETAILED WRITTEN SUBMISSIONS INDICATING THEREIN THAT AN AMOUNT OF 34,65,948/- WRONGLY DEBITED STOOD REVISED IN NEXT FINANCIAL YEAR 2011-12, RECON CILIATION INDICATING AMOUNTS REFLECTED IN TDS QUARTERLY RETURNS OF 40,13,320/-, LABOUR CHARGES FOR SITE AS- 217 AND AB-69 INVOLVING SUMS OF 13,52,059/- AND 10 LAC RESPECTIVELY FOR REFERENCE, SEVEN PAYEES CASES INVOLVING PAYMENTS OF LESS THAN 30,000/- EACH NOT REQUIRING ANY TDS DEDUCTION, 20% TDS DEDUC ED IN CASE OF TWO PARTIES SEK ISLAM AND JELANI FURNITURE ETC. WE FIND THAT NEITHER OF THE LOWER AUTHORITIES HAS CONSIDERED ALL THESE DETAILS. THE F ACT ALSO REMAINS THAT THE ASSESSING OFFICER & THE CIT(A) HAVE INVOKED THE IMP UGNED DISALLOWANCE IN ITA NO.1967/KOL/2016 A.Y. 2011-12 ASHA REAL ESTATES & DEVELOPERS PVT LTD. VS . ITO WARD-9(1), KOL. PAGE 4 ENTERITY WITHOUT EXAMINING EACH PAYEES CASE SINCE GOING BY THE SOLITARY INSTANCE OF MR. MONDAL (SUPRA) ONLY. WE THEREFORE R ESTORE 40(A)(IA) ISSUE BACK TO THE ASSESSING OFFICER FOR AFRESH ADJUDICATION AS PER LAW AFTER AFFORDING ADEQUATE HEARING TO THE TAXPAYER. 5. THIS ASSESSEES APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT 24/08/2018 SD/- SD/- ( %) (' %) (DR. A.L. SAINI) (S.S.GODARA) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) KOLKATA, *DKP, SR.P.S (- 24 / 08 /201 8 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-ASHA REAL ESTATES & DEVELOPERS PVT. LTD. , ROOM NO.210, 2 ND FLOOR, 163, RABIND RA SARANI, KOLKATA-69 2. /RESPONDENT-ITO WARD-9(1), KOLKATA 3. 3 4 / CONCERNED CIT KOLKATA 4. 4- / CIT (A) KOLKATA 5. 7 ''3, 3, / DR, ITAT, KOLKATA 6. < / GUARD FILE. BY ORDER/ , /TRUE COPY/ SR. PRIVATE SECRETARY, HEAD OF OFFICE/DDO 3,