The ACIT, Circle-3, Surat V. Shri Ajay Thakordas Bansal, Surat

ITA 2160/AHD/2009

• Counselvise Citation: 216020514 RSA 2009
• Duration Of Justice: 2 year(s) 6 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2012
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 03-01-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 09-07-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B L YADAV SR DR SHRI K K SHAH
• Assessee Lawyers: PBB
• Keywords: Sale consideration of property below Jantri Value; Opportunity of being heard
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, D BENCH, AHMEDABAD BEFORE SHRI G. C. GUPTA, HONBLE VICE PRESIDENT AND SHRI A. K. GARODIA, ACCOUNTANT MEMBER I.T.A. NO.2160 / AHD/2009 & 1754/AHD/2010 (ASSESSMENT YEAR 2006-07 & 2005-06 RESPECTIVELY.) ACIT, CIRCLE 3, SURAT VS. SHRI AJAY THAKORDAS BANSAL PROP. SAI CONSTRUCTION & SURBHI AUTOMOBILES, 25, SAMARPAN SOCIETY, NEW RANDER ROAD, ADAJAN, SURAT PAN/GIR NO. : ABYPB6061B (APPELLANT) .. (RESPONDENT) APPELLANT BY: SHRI B L YADAV, SR. DR RESPONDENT BY: SHRI K K SHAH, AR DATE OF HEARING: 03.01.2012 DATE OF PRONOUNCEMENT: 19.01.2012 O R D E R PER SHRI A. K. GARODIA, AM:- BOTH THESE APPEALS OF THE REVENUE ARE DIRECTED AGA INST TWO SEPARATE ORDERS OF LD. CIT(A) II, SURAT DATED 23.03.2009 FOR THE ASSESSMENT YEAR 2006-07 AND DATED 26.02.2010 FOR THE ASSESSMENT YEA R 2005-06. SINCE COMMON ISSUE IS INVOLVED IN THESE TWO APPEALS, BOTH THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. ONE OF THE ISSUE RAISED IN ASSESSMENT YEAR 2006- 07 AND THE ONLY ISSUE RAISED IN ASSESSMENT YEAR 2005-06 IS REGARDIN G DELETION BY LD. I.T.A.NO.2160 /AHD/2009 I.T.A.NO. 1754/AHD/2010 2 CIT(A) OF THE DEDUCTION DISALLOWED BY THE A.O. U/S 80-IB OF RS.53,96,990/- IN ASSESSMENT YEAR 2006-07 AND RS.54 ,50,439/- IN ASSESSMENT YEAR 2005-06. 3. BRIEF FACTS OF THE CASE ARE THAT THE CLAIM OF TH E ASSESSEE REGARDING DEDUCTION U/S 80-IB(10) WAS REJECTED BY THE A.O. ON THE BASIS THAT THE ASSESSEE WAS NOT AN APPROVED DEVELOPER FOR THE PURP OSE OF SECTION 80- IB(10). THE A.O. HAS ALSO OBSERVED THAT NO APPROVA L WAS GIVEN TO THE ASSESSEE NOR COMPLETION CERTIFICATE WAS ISSUED IN H IS NAME AND HE WAS ONLY A CONTRACTOR. THE SECOND OBJECTION WAS THAT T HE PROJECT WAS APPROVED WITH A PORTION OF COMMERCIAL SPACE, WHICH WAS NOT PROVIDED UNDER THE AMENDED PROVISIONS OF THE SAID SECTION. THE 3 RD OBJECTION WAS THAT THE ASSESSEE HAS NOT DONE CONSTRUCTION ON A CO NSOLIDATED PIECE OF LAND AND THE LAND HAD BEEN DIVIDED INTO PLOTS AND T HE ASSESSEE DID THE CONSTRUCTION AS PER THE REQUEST AND SPECIFICATION O F THE PLOT OWNER. THE ASSESSEE HAS WORKED OUT A MINIMUM REQUIREMENT OF 1 ACRE OF LAND BY ADDING TOGETHER VARIOUS PLOTS AND THEREFORE, THE BA SIC REQUIREMENT OF SECTION 80-IB (10) WAS NOT FULFILLED BY THE ASSESSE E. THIS IS ALSO AN OBJECTION OF THE A.O. THAT AT LEAST TWO FLATS WERE HAVING BUILT UP AREA OF 1700 SQ. FT EACH WHICH IS IN EXCESS OF THE PERMITTE D BUILT UP AREA OF 1500 SQ. FT. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE LD. CIT(A) IN BOTH THE YEARS AND LD. CIT(A) DELETED THIS DISALLOWANCE IN BOTH THE YEARS BY FOLLOWING THE TRIBUNAL ORDER IN T HE CASE OF RADHEY DEVELOPERS AS REPORTED IN 113 TTJ 300 (AHD.). NOW, THE REVENUE IS IN APPEAL BEFORE US IN BOTH THE YEARS. 4. THE LD. D.R. OF THE REVENUE SUPPORTED THE ASSESS MENT ORDER WHEREAS THE LD. A.R. SUPPORTED THE ORDER OF LD. CIT (A). IT WAS ALSO SUBMITTED BY HIM THAT NOW, THE HONBLE GUJARAT HIGH COURT HAS DECIDED I.T.A.NO.2160 /AHD/2009 I.T.A.NO. 1754/AHD/2010 3 THIS ISSUE AND THE ORDER IS DULY PRONOUNCED BY THE HONBLE GUJARAT HIGH COURT BUT THE COPY OF THE DECISION IS NOT YET AVAIL ABLE AND HENCE, THE MATTER MAY BE REFERRED BACK TO CIT (A) FOR A FRESH DECISION IN THE LIGHT OF THIS DECISION OF HONBLE GUJARAT HIGH COURT. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSE D THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORIT IES BELOW. WE FIND THAT IT WAS THE SUBMISSIONS OF THE LD. A.R. THAT NO W, HONBLE GUJARAT HIGH COURT HAS DECIDED THIS ISSUE BUT THE COPY OF T HIS JUDGMENT IS NOT AVAILABLE TILL NOW. WHEN THE JUDGMENT OF HONBLE G UJARAT HIGH COURT IS AVAILABLE ON THIS ISSUE, THE MATTER SHOULD BE DECID ED IN THE LIGHT OF THIS JUDGEMENT OF HONBLE GUJARAT HIGH COURT AND SINCE T HIS JUDGEMENT IS NOT AVAILABLE BEFORE US, WE DEEM IT FIT AND PROPER THAT THIS MATTER MAY BE RESTORED BACK TO THE FILE OF LD. CIT (A) FOR A FRES H DECISION IN THE LIGHT OF THE DECISION OF HONBLE GUJARAT HIGH COURT ON THIS SUBJECT. 6. REGARDING THIS ASPECT THAT THE BUILT UP AREA OF TWO FLATS WERE OF 1700 SQ. FT, WHICH IS EXCESS TO THE PERMITTED AREA OF 1500 SQ. FT, IT IS MENTIONED BY THE LD. CIT (A) IN PARA 3 OF HIS ORDER THAT THIS IS SUPER BUILT UP AREA AND THE BUILT UP AREA WAS ACTUALLY ONLY 148 0 SQ. FT FOR EACH FLAT. ON THIS ACCOUNT, THE LD. CIT (A) HAS DIRECTED THE A . O. TO VERIFY THE FACTUAL ASPECT BUT WE FEEL THAT SINCE THE MATTE IS GOING BACK TO THE FILE OF LD. CIT (A), HE SHOULD EXAMINE THIS FACTUAL ASPECT ALSO AND SHOULD GIVE FINDING AS TO WHETHER THERE IS ANY FLAT CONSTRUCTED IN EXCESS OF THE PERMITTED BUILT UP AREA OF 1500 SQ. FT. OR NOT. 7. FOR THE 3 RD ASPECT I.E. REGARDING COMMERCIAL SPACE IN THE PROJ ECT, WE FIND THAT AS PER CLAUSE (D) OF SECTION 80-IB (10), THE BUILT UP AREA OF THE SHOPS AND OTHER COMMERCIAL ESTABLISHMENTS INCLUDED IN THE HOUSING PROJECT SHOULD NOT EXCEED 5% OF THE BUILT UP AREA O F THE HOUSING PROJECT I.T.A.NO.2160 /AHD/2009 I.T.A.NO. 1754/AHD/2010 4 OR 2000 SQ. FT WHICHEVER IS HIGHER DURING THAT PERI OD. FROM THE ORDERS OF AUTHORITIES BELOW, THIS IS NOT COMING OUT AS TO WHA T WAS THE AREA OF THE COMMERCIAL SPACE. ON PAGE 14 OF THE ASSESSMENT ORD ER, IT IS SUBMITTED BEFORE THE A.O. THAT THE ASSESSEE HAS BUILT UP SEVE N SHOPS. ON PAGE 20 OF THE ASSESSMENT ORDER, IT WAS SUBMITTED BEFORE THE A .O. THAT THE COMMERCIAL SPACE IN THE PROJECT IS VERY SMALL BUT T HE EXACT AREA OF SUCH COMMERCIAL SPACE IS NOT MENTIONED. HENCE, WE FEEL THAT ON THIS ASPECT ALSO, LD. CIT (A) SHOULD GIVE HIS FINDING AS TO WHA T IS THE ACTUAL AREA OF THE COMMERCIAL SPACE IN THE PROJECT. LD. CIT (A) S HOULD ALSO DECIDE THE ISSUE AFRESH AS PER ABOVE DECISION AFTER PROVIDING OPPORTUNITY OF BEING HEARD TO BOTH THE SIDES. GROUND NO.1 OF THE REVENU E STANDS ALLOWED FOR STATISTICAL PURPOSES IN BOTH THE YEARS. 8. GROUND NO.2 OF THE APPEAL IS AS UNDER IN ASSESSM ENT YEAR 2006-07 AND THERE IS NO OTHER ISSUE INVOLVED IN ASSESSMENT YEAR 2005-06. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) HAS ERRED IN DELETING THE ADDITION OF RS.23,35, 978/- MADE BY THE A.O. ON ACCOUNT OF ON MONEY RECEIPT. 9. BRIEF FACTS OF THIS ISSUE TILL THE ASSESSMENT ST AGE ARE NOTED BY LD. CIT(A) IN PARA 7.9 OF HIS ORDER WHICH ARE REPRODUCE D BELOW: 7.9 COMING TO THE THIRD GROUND OF APPEAL, REGARDIN G THE ADDITION OF THE SUM OF RS 23,35,978 ALLEGEDLY BEING THE ON-M ONEY RECEIVED FROM SOME OF THE BUYERS AND INVESTORS, IT HAS BEEN ARGUED BY THE AR THAT THE DIFFERENCE BETWEEN THE DOCUMENTED PRICE AND THE COST ACTUALLY INCURRED BY THE BUYERS WOULD HAVE BEEN ON ACCOUNT OF STAMP DUTY, REGISTRATION CHARGES, AND DOCUMENTATION CHARGES ETC. WHILE THAT IS A DISTINCT POSSIBILITY, THE AO DID NO T EXAMINE IN ANY DETAIL OR EVEN ANALYSE THE STATEMENTS MADE BY THE L ISTED 17 BUYERS, TO REALLY JUSTIFY THE ADDITION. EVEN THOUGH HE REPR ODUCED THE SUBMISSIONS OF THE ASSESSEE IN THIS REGARD IN PARA- 9.5 OF THE ORDER, HE SIMPLY DISMISSED THEM AS BEING VERY GENERAL IN N ATURE. IT IS ALSO VERY INTERESTING TO NOTE THAT WHEN THE ASSESSEE ASK ED FOR OPPORTUNITY TO CROSS-EXAMINE SUCH PARTIES, THE AO O BSERVED THAT I.T.A.NO.2160 /AHD/2009 I.T.A.NO. 1754/AHD/2010 5 THE COPIES OF STATEMENTS AND SELF DECLARATIONS IN S UCH CASES WERE PROVIDED TO THE ASSESSEE AND THAT, (PARA-9.6 PAGE-4 2) 'MAJORITY OF THE PERSONS ARE RESIDING IN THE CAMPUS 'BANSIDHAR R OW HOUSE'. THEY ALL WERE WITHIN REACH OF THE ASSESSEE. THEY MA Y BE CONTACTED FOR EXAMINATION ON THEIR STATEMENTS/SELF DECLARATIO N BY THE ASSESSEE ITSELF WAS A VERY UNDESIRABLE STATEMENT MADE BY THE AO WHO OUGHT TO BE IN THE KNOWLEDGE THAT IT WAS NOT THE ASSESSEE 'S RESPONSIBILITY TO CONTACT THE PERSONS WHOSE STATEMENTS HAD BEEN RE CORDED, NOR WAS IT POSSIBLE FOR THE ASSESSEE TO CROSS-EXAMINE T HEM OUTSIDE THE OFFICE OF THE AO. CROSS-EXAMINATION IF ANY WAS TO B E CARRIED OUT IN THE OFFICE OF THE AO AND IN THE PRESENCE OF WITNESS ES. THE CROSS- EXAMINATION WAS TO BE RECORDED AND SIGNED BY THE AS SESSEE'S REPRESENTATIVE, THE A.O. AND BY THE PERSON WHO WAS TO BE CROSS- EXAMINED. THEREFORE, I AM OF THE VIEW THAT IT WAS S IMPLY NOT JUSTIFIED ON THE PART OF THE AO TO SUMMARILY REJECT THE ASSESSEE'S REQUEST FOR CROSS-EXAMINATION OF SUCH PARTIES ESPEC IALLY WHEN, HE RELIED HEAVILY ON THEM AND USED THE ALLEGED STATEME NTS TO DRAW ADVERSE INFERENCE AGAINST THE ASSESSEE AND TO DISAL LOW THE CLAIM MADE. 10. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTE R IN APPEAL BEFORE LD. CIT(A). LD. CIT(A) DECIDED THIS ISSUE IN FAVOU R OF THE ASSESSEE ON THIS BASIS THAT EVEN IF THIS ADDITION IS MADE, DEDU CTION HAS TO BE ALLOWED TO THE ASSESSEE U/S 80-IB(10) FOR THIS AMOUNT ALSO. NOW, THE REVENUE IS APPEAL BEFORE US. 11. LD. D.R. OF THE REVENUE SUPPORTED THE ASSESSMEN T ORDER WHEREAS THE LD. A.R. SUPPORTED THE ORDER OF LD. CIT(A). 12. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE F IND THAT THIS ADDITION WAS DELETED BY THE LD. CIT(A) ON THIS BASI S THAT THE ASSESSEE HAS CLAIMED FOR DEDUCTION U/S 80-IB(10) ON THIS ON MON EY RECEIPT ALSO. SINCE THE ISSUE REGARDING DEDUCTION U/S 80-IB HAS BEEN RE STORED BACK BY US TO THE FILE OF THE LD. CIT(A) FOR A FRESH DECISION, CO NSEQUENTLY, THIS ISSUE IS ALSO REQUIRED TO BE RESTORED BACK TO THE FILE OF LD . CIT(A) FOR FRESH DECISION. HENCE, THIS ISSUE IS ALSO RESTORED BACK TO THE FILE OF LD. CIT(A) I.T.A.NO.2160 /AHD/2009 I.T.A.NO. 1754/AHD/2010 6 FOR A FRESH DECISION AFTER PROVIDING ADEQUATE OPPOR TUNITY OF BEING HEARD TO BOTH THE SIDES. THIS GROUND OF THE REVENUE IS A LLOWED FOR STATISTICAL PURPOSES. 13. GROUND NO.3 OF THE REVENUE IN ASSESSMENT YEAR 2 006-07 IS AS UNDER: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION MADE BY T HE A.O. OF RS.8,59,400/- MADE BY THE A.O. ON ACCOUNT OF UNEXPL AINED INVESTMENT U/S 69B OF THE ACT. 14. BRIEF FACTS ON THIS ISSUE ARE NOTED BY LD. CIT( A) IN PARA 9 OF HIS ORDER WHICH ARE REPRODUCED BELOW: 9. THE ASSESSEE CLAIMED TO HAVE PURCHASED A PIECE OF LAND AT THE DOCUMENTED PRICE OF RS 40 LAKHS, WHILE THE SVA HAD VALUED THE SAME LAND AT RS 48,59,400. THE AO THEREFORE SOUGHT TO TREAT THE DIFFERENCE OF RS 8,59,400 AS THE ASSESSEE'S UNDISCL OSED INVESTMENT U/S 69B OF THE ACT (PARA 8.1). THE ASSESSEE SUBMITT ED THAT THE VALUATION ADOPTED BY THE SVA ON THE BASIS OF THE JA NTRI PRICE FOR THE PURPOSE OF DETERMINING THE SALE CONSIDERATION I N THE CASE OF THE SELLER UNDER THE PROVISIONS OF SEC 50C OF THE ACT C OULD NOT BE ADOPTED OR EXTENDED TO TREAT THE DIFFERENCE AS UNDI SCLOSED INVESTMENT IN THE HANDS OF THE BUYER. IN SUPPORT OF HIS CONTENTIONS, THE ASSESSEE PLACED RELIANCE ON SEVERAL CASE-LAWS ( PAGE 3-4). THE AO REJECTED THE ASSESSEE'S SUBMISSIONS AND ALSO DIS MISSED THE VARIOUS CASE-LAWS RELIED UPON BY THE ASSESSEE AS BE ING NOT RELEVANT. ON HIS PART, THE AO PLACED RELIANCE ON TH E CASE OF CIT V/S GEORGE HENDERSON 1967 66 ITR 622 (SC), IN ASSER TING HIS RIGHT AS THE ASSESSING OFFICER TO DETERMINE THE FUL L VALUE OF THE PROPERTY PURCHASED, ESPECIALLY WHEN THE VALUE DECLA RED WAS UNUSUALLY LOW. THE AO THUS TREATED THE SUM OF RS 8, 59,400 AS REPRESENTING THE UNDISCLOSED INVESTMENT OF THE ASSE SSEE. 15. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTE R IN APPEAL BEFORE LD. CIT(A) WHO DELETED THIS ADDITION BY HOLDING THA T NO ADDITION CAN BE MADE IN THE HANDS OF THE PURCHASER ON THE BASIS OF DEEMING PROVISIONS OF I.T.A.NO.2160 /AHD/2009 I.T.A.NO. 1754/AHD/2010 7 SECTION 50C OF THE INCOME TAX ACT, 1961. NOW, THE REVENUE IS IN APPEAL BEFORE US. 16. LD. D.R. SUPPORTED THE ASSESSMENT ORDER WHEREAS THE LD. A.R. SUPPORTED THE ORDER OF LD. CIT(A). 17. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUS ED THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORIT IES BELOW. WE FIND THAT THE LD. CIT(A) HAS DECIDED THIS ISSUE IN FAVOU R OF THE ASSESSEE BY FOLLOWING THE TRIBUNAL DECISION IN THE CASE OF BHAR AT M PATEL VS CIT IN I.T.A.NO. 749/AHD/2008 DATED 29.08.2008. OTHERWISE ALSO, SUCH ADDITION CANNOT BE MADE U/S 69B ON THE BASIS OF DEEMING PROV ISIONS OF SECTION 50C ALONE WITHOUT BRINGING ANY MATERIAL ON RECORD R EGARDING ADDITIONAL PAYMENT BY THE ASSESSEE OVER AND ABOVE THE PURCHASE PRICE AS PER PURCHASE DEED. HENCE, ON THIS ISSUE, WE DO NOT FIN D ANY REASON TO INTERFERE IN THE ORDER OF LD. CIT(A). THIS GROUND OF THE REVENUE IS REJECTED. 18. IN THE RESULT, APPEAL OF THE REVENUE FOR THE AS SESSMENT YEAR 2006-07 IS PARTLY ALLOWED FOR STATISTICAL PURPOSE WHEREAS, APPEAL FOR THE ASSESSMENT YEAR 2005-06 STANDS ALLOWED FOR STATISTI CAL PURPOSES. 19. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED HEREINABOVE. SD./- SD./- (G. C. GUPTA) (A. K. GARODIA) VICE PRESIDENT ACCOUNTANT MEMBER SP COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) I.T.A.NO.2160 /AHD/2009 I.T.A.NO. 1754/AHD/2010 8 5. THE DR, AHMEDABAD BY ORDER 6. THE GUARD FILE AR,ITAT,AHMEDABAD 1. DATE OF DICTATION 12/1 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 13/1.OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P .S./P.S. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 19/01 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.23/01 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 23/01/2012 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 9. DATE OF DESPATCH OF THE ORDER. .