Smt Veena Naidu , Bangalore V. The Income Tax officer Ward-7(2)(2), Bangalore

ITA 2171/BANG/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 4096 (ITAT-BANGALORE)
• Duration Of Justice: 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-08-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 11-07-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: BALAKRISHNAN
• Assessee Lawyers: V SRINIVASAN
• Keywords: Opportunity of being heard; Cost of acquisition; Corroborative evidences
• Section: 54B; 54F; 133(6); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-A BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO. 2 171 /BANG/201 8 ASSESSMENT YEAR : 20 07 - 08 SMT. VEENA NAIDU, 375, 6 TH CROSS, WILSON GARDEN, BANGALORE 560 027. PAN: ACTPN8766H VS. THE INCOME TAX OFFICER, WARD 7 [2] [2], BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI V. SRINIVASAN, ADVOCATE RESPONDENT BY : SHRI BALAKRISHNA .N, ADDL. CIT (DR) DATE OF HEARING : 26. 0 7 .2018 DATE OF PRONOUNCEMENT : 10. 0 8 .2018 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE ASSESSEE AND THE SAME I S DIRECTED AGAINST THE ORDER OF LD. CIT(A)-7, BANGALORE DATED 10.05.2018 FOR ASS ESSMENT YEAR 2007-08. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER. 1. THE ORDERS OF THE AUTHORITIES BELOW IN SO FAR AS THEY ARE AGAINST THE APPELLANT ARE OPPOSED TO LAW, EQUITY, WEIGHT OF EVIDENCE PROBABILITIES, FACTS AND CIRCUMSTANCES OF THE APPEL LANT'S CASE. 2. THE ORDER OF RE-ASSESSMENT IS BAD IN LAW AND VOI D-AB-INITIO FOR WANT OF REQUISITE JURISDICTION ESPECIALLY, THE MAND ATORY REQUIREMENTS TO ASSUME JURISDICTION U/S 148 OF THE ACT DID NOT E XIST AND HAVE NOT BEEN COMPLIED WITH ANDCONSEQUENTLY, THE RE-ASSESSME NT REQUIRES TO BE CANCELLED. 3. THE LEARNED CIT[A] IS NOT JUSTIFIED IN UPHOLDING THE ASSESSMENT ORDER PASSED REJECTING THE CONTENTIONS RAISED THAT THERE WAS NO VALID NOTICE U/S. 143[2] OF THE ACT THAT WAS SERVED UPON THE APPELLANT IN COURSE OF ASSESSMENT PROCEEDINGS RELYING UPON THE P ROVISIONS OF SEC. 29266 OF THE ACT UNDER THE FACTS AND IN THE CIRCUMS TANCES OF THE APPELLANT'S CASE. 4. THE LEARNED CIT[A] IS NOT JUSTIFIED IN UPHOLDING THE RESTRICTION OF EXEMPTION CLAIMED U/S 546 OF THE ACT TO A SUM OF RS . 30,11,600/- ITA NO. 2171/BANG/2018 PAGE 2 OF 6 BASED ON THE SALE DEED DATED 12/03/2007 AS AGAINST A SUM OF RS. 62,72,536/- CLAIMED BY THE APPELLANT BASED ON THE S ALE AGREEMENT DATED 12/03/2007 UNDER THE FACTS AND IN THE CIRCUMS TANCES OF THE APPELLANT'S CASE. 4.1 THE LEARNED CIT[A] OUGHT TO HAVE APPRECIATED TH AT THE APPELLANT ALONG WITH OTHER CO-OWNERS HAD ENTERED INTO A SINGL E SALE AGREEMENT DATED 12/03/2007 WITH THE VENDOR OF THE LANDS AND H AD MADE PAYMENTS THROUGH BANKING CHANNELS AND THUS, THE EXT ENT OF INVESTMENT MADE IN PURCHASE OF THE AGRICULTURAL LANDS OVER AND ABOVE THE CONSIDERATION SPECIFIED IN THE SALE DEEDS STANDS ES TABLISHED AND THEREFORE, THE EXEMPTION AS CLAIMED BY THE APPELLAN T OUGHT TO HAVE BEEN ALLOWED. 5. THE LEARNED CIT[A] IS NOT JUSTIFIED IN HOLDING T HAT THE APPELLANT WAS NOT ENTITLED TO EXEMPTION U/S 54F OF THE ACT ON THE GROUND THAT THE APPELLANT OWNED MORE THAN 2 HOUSES ON THE DATE OF S ALE OF THE ORIGINAL ASSET UNDER THE FACTS AND IN THE CIRCUMSTANCES OF T HE APPELLANT'S CASE. 5.1 THE LEARNED CIT[A] OUGHT TO HAVE APPRECIATED TH AT THE APPELLANT DID NOT OWN 2 HOUSES AND THERE WAS ONLY A TYPOGRAPH ICAL ERROR IN THE STATEMENT OF AFFAIRS FILED BEFORE THE LEARNED A.O. AND THE SAME WAS ALSO EXPLAINED IN THE REJOINDER TO THE REMAND REPOR T AND THUS, THE DENIAL OF EXEMPTION U/S. 54F OF THE ACT WAS OPPOSED TO LAW AND FACTS OF THE APPELLANT'S CASE. 6. WITHOUT PREJUDICE TO THE RIGHT TO SEEK WAIVER BE FORE THE HON'BLE DG/CCIT, THE APPELLANT DENIES HERSELF LIABLE TO BE CHARGED TO INTEREST U/S. 234-B AND 234-C OF THE ACT, WHICH REQUIRES TO BE CANCELLED UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANT 'S CASE. 7. FOR THE ABOVE AND OTHER GROUNDS THAT MAY BE URGE D AT THE TIME OF HEARING OF THE APPELLANT, YOUR APPELLANT HUMBLY PRA YS THAT THE APPEAL MAY BE ALLOWED AND JUSTICE RENDERED AND THE APPELLA NT MAY BE AWARDED COSTS IN PROSECUTING THE APPEAL AND ALSO OR DER FOR THE REFUND OF THE INSTITUTION FEES AS PART OF THE COSTS. 3. AT THE VERY OUTSET, IT WAS SUBMITTED BY LD. AR O F ASSESSEE THAT GROUND NOS. 2 AND 3 REGARDING VALIDITY OF REOPENING ARE NOT PRESS ED AND HENCE, THESE GROUNDS ARE REJECTED AS NOT PRESSED. 4. HE FURTHER SUBMITTED THAT ONLY ISSUE REGARDING M ERIT IS REGARDING RESTRICTING ASSESSEES CLAIM FOR DEDUCTION U/S. 54B OF IT ACT T O A SUM OF RS. 30,11,600/- AS AGAINST THE ASSESSEES CLAIM FOR RS. 62,72,536/-. HE SUBMITTED THAT ON PAGE NOS. 132 TO 139 OF PAPER BOOK IS THE COPY OF REJOIN DER FILED BY THE ASSESSEE BEFORE CIT(A) AND IN PARTICULAR MY ATTENTION WAS DR AWN TO PAGE NO. 136 OF ITA NO. 2171/BANG/2018 PAGE 3 OF 6 PAPER BOOK IN WHICH IT WAS POINTED OUT THAT IT WAS EXPLAINED BY THE ASSESSEE AS TO WHY THE ASSESSEE INSISTED FOR SALE AGREEMENT ALT HOUGH THE SALE DEED WAS EXECUTED ON THE SAME DATE WHEN THE SALE AGREEMENT W AS ENTERED INTO. HE FURTHER POINTED OUT THAT MR. IQBAL KHAN VENDOR HAD INSISTED UPON SHOWING LESSOR AMOUNT IN SALE DEED AND WAS REFUSING TO SELL IF THE TRUE CONSIDERATION WAS REFLECTED IN THE REGISTERED SALE DEEDS. HE FURTHER SUBMITTED THAT ON PAGE NO. 135 IS THE DETAILS GIVEN REGARDING SALE CONSIDERATI ON PAID OF RS. 60 LAKHS WHICH WAS PAID BY WAY OF CHEQUE NO. 644728 OF RS. 24 LAKH S, RS. 10 LAKHS VIDE CHEQUE NO. 644730, RS. 13 LAKHS VIDE CHEQUE NO. 644 733 AND RS. 13 LAKHS VIDE CHEQUE NO. 644732 TOTAL OF RS. 60 LAKHS. HE A LSO SUBMITTED THAT THE SAID SALE AGREEMENT IS AVAILABLE ON PAGES 9 TO 19 OF PAP ER BOOK AND AS PER PAGE NO. 16 OF THE PAPER BOOK, THE SALE CONSIDERATION WA S DETERMINED AT RS. 60 LAKHS. THEREAFTER HE SUBMITTED THAT THE COPY OF SA LE DEED IS AVAILABLE ON PAGES 23 TO 35 OF PAPER BOOK AND IN PARTICULAR MY A TTENTION WAS DRAWN TO PAGE NO. 42 OF PAPER BOOK AND IT WAS POINTED OUT THAT IT IS NOTED THEREIN THAT SUM OF RS. 13.04 LAKHS WAS PAID BY WAY OF CHEQUE NO. 64472 8 DATED 25.12.2006 DRAWN ON BANK OF BARODA, BANASHANKARI BRANCH, BANGA LORE. HE FURTHER SUBMITTED THAT THE RELEVANT BANK STATEMENT IS AVAIL ABLE ON PAGES 20 AND 21 OF PAPER BOOK AND FROM THE SAME, IT CAN BE SEEN THAT T HE CHEQUES CLEARED FROM THE BANK ACCOUNT OF ASSESSEE ARE CHEQUE NO. 644728 OF RS. 24 LAKHS, 644730 OF RS. 10 LAKHS, 644733 OF RS. 13 LAKHS AND 644732 OF RS. 13 LAKHS. HE SUBMITTED THAT WHEN THE CONSIDERATION IS PAID BY WA Y OF CHEQUE AND IT IS TALLYING WITH THE AMOUNT NOTED IN THE SALE AGREEMENT AND MER ELY BECAUSE IN SALE DEED, THE LESSER AMOUNT IS SHOWN ON THE INSISTENCE OF VEN DOR, THE ASSESSEE CANNOT BE DENIED THE DEDUCTION U/S. 54B. THE LD. DR OF RE VENUE SUPPORTED THE ORDER OF CIT(A). 5. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. I FIND THAT THE ISSUE REGARDING ALLOWABILITY OF DEDUCTION U/S. 54B WAS DECIDED BY C IT(A) AS PER PARAS 8, 8.1 AND 8.2. HENCE FOR THE SAKE OF READY REFERENCE, TH ESE PARAS FROM THE ORDER OF CIT(A) ARE REPRODUCED HEREINBELOW. 8. IN GROUND 5, THE APPELLANT HAS CHALLENGED THE AC TION OF AO AS REGARDS LTCG ON SALE OF AGRICULTURAL LAND AT AMANI BELANDURKHANE VILLAGE. DURING THE YEAR, AGRICULTURAL LAND ADMEASU RING 1 ACRE AT AMANI BELANDURKHANE VILLAGE WAS SOLD BY THE ASSESSE E ALONG WITH ITA NO. 2171/BANG/2018 PAGE 4 OF 6 FOUR OTHER FAMILY MEMBERS AS CO-OWNERS FOR A CONSID ERATION OF RS. 5 CRORE. THE SHARE OF THE ASSESSEE WAS 1 CRORE. AFT ER DEDUCTING COST OF ACQUISITION AND COST OF TRANSFER, THE CAPITAL GAINS WAS WORKED AT RS. 96,72,400. THE APPELLANT HAS CLAIMED EXEMPTION U/S. 54EC FOR INVESTMENT OF RS.50 LAKHS IS REIC BONDS AND RS 12,5 5,107 U/S. 54B FOR INVESTMENT IN AGRICULTURAL LAND AND EXEMPTION U /S 54F FOR INVESTMENT IN PLOT OF RESIDENTIAL LAND. THE AO HAS VERIFIED THE CLAIM OF THE ASSESSEE AS REGARDS INVESTMENT IN PURCHASE OF L AND FOR WHICH EXEMPTION CLAIMED U/S.54B AND FOUND THAT ACTUAL CON SIDERATION PAID FOR PURCHASE OF THE AGRICULTURAL LAND WAS RS. 26 LA KHS AS CONFIRMED BY THE SELLER OF THE LAND SRI.IQBAL KHAN. THUS, THE AO HELD THAT TOTAL EXEMPTION CLAIMED BY THE ASSESSEE AND HIS FAMILY ME MBERS HAS TO BE RESTRICTED TO RS. 30,11,600 (INCLUDING STAMP DUTY A ND REGISTRATION FEES) AS AGAINST THE CLAIM OF RS. 62,72,536 BY THE ASSESSEE. THUS, THE AO ACCORDINGLY DISALLOWED RS.6,52,787 CLAIMED AS EX EMPTION U/S.54B AND ADDED TO THE INCOME OF THE ASSESSEE. 8.1 THE SUBMISSION OF THE APPELLANT CONTENDING THAT AN AMOUNT OF RS.62,75,536 HAS BEEN PAIDFOR PURCHASE OF AGRICULTU RAL LAND THROUGH CHEQUES, HAS BEEN CONSIDERED. IN ITS WRITTEN SUBMIS SION FILED ON 22- 11-2017, THE APPELLANT CLAIMS THAT AN AMOUNT OF RS 60 LAKHS WAS ACTUALLY PAID TO MR. IQBAL KHAN FROM THE BANK ACCOU NT OF MR. KN SRINIVAS FOR THE PURCHASE OF THE LANDS AT DODDABAND AHALLI VILLAGE, MULBAGAL TALUK. A COPY OF THE AGREEMENT DATED 12-03 -2007 HAS BEEN FILED IN SUPPORT. IT MAY BE MENTIONED THAT THESE LA NDS HAVE BEEN PURCHASED BY THE APPELLANT AND HER FAMILY MEMBERS O N 12-03-2007 VIDE FOUR REGISTRATION DEEDS. THEREFORE, IT IS PERT INENT TO ASK AS TO WHAT IS THE LOGIC AND NECESSITY TO ENTER INTO AN AGREEME NT FOR SALE ON THE VERY DAY THE SALE HAS ACTUALLY BEEN EFFECTED BY REG ISTRATION OF THE SALES DEED. THIS QUESTION HAS NOT BEEN ANSWERED BY THE AP PELLANT EITHER BEFORE THE AO OR DURING THE APPELLATE PROCEEDINGS. 8.2 AN AGREEMENT FOR SALE, IT IS APPARENT, HAS TO P RECEDE THE SALE AND ANY ADVANCE CONSIDERATION GIVEN AT THE TIME OF AGRE EMENT GETS MENTIONED IN THE SALE DEED ALONG WITH THE DETAILS O F PAYMENT FOR BALANCE AMOUNT. BUT IN THE CASE OF THE APPELLANT TH ERE IS NO SUCH ADVANCE PAYMENT AS A CONSEQUENCE TO AGREEMENT OF SA LE. THE SALE DEED MENTIONS THE AMOUNT OF CONSIDERATION AND THE C HEQUE NUMBER FOR THE SAME: THEREFORE, THERE IS NO BASIS FOR ACCEPTIN G THE CLAIM OF THE APPELLANT THAT THE CONSIDERATION PAID IS MORE THAN THE VALUE MENTIONED IN THE SALE DEED. EVEN THOUGH APPARENTLY THE AMOUNTS DEBITED TO THE BANK ACCOUNT VIDE CONCERNED CHEQUES ARE MORE THAN THE AMOUNT OF SALE CONSIDERATION AS PER SALES DEED, IT CANNOT BE SAID THAT THE ENTIRE AMOUNT WAS MEANT FOR SALES CONSIDERATION FOR THE LANDS PERTAINING TO THOSE PARTICULAR FOUR SALES DEED. BESIDES, THE FINDINGS/OBSERVATIONS OF THE AO FOR RE FUTING THE CLAIM OF THE ASSESSEE, WHICH ARE VERY RELEVANT, ARE AS UNDER : I. FIRST AND FOREMOST, THE ASSESSEE SUBMITTED BEFOR E THE AO THE DETAILS OF PAYMENT AS MENTIONED IN THE AGREEMENT FOR SALE A ND HAS REITERATED ITA NO. 2171/BANG/2018 PAGE 5 OF 6 IN APPELLATE PROCEEDINGS THE SAME. HOWEVER, THE OBS ERVATION OF THE AO THAT THERE IS NO LOGIC IN MAKING A SALE AGREEMEN T ON THE SAME DAY OF SALE, WAS NEVER EXPLAINED BY THE APPELLANT. II. AS REGARDS THE AMOUNT OF RS 10,00,000 CLAIMED T O BE PAID BY CHEQUE NO 644730 DATED 02-02-2007 NO SUPPORTING EVI DENCE WAS FILED BEFORE AO. DURING APPEAL PROCEEDINGS, THE APPELLANT ADMITS IN ITS WRITTEN SUBMISSION FILED ON 22-11-2017 THAT THIS PA YMENT IS NOT MENTIONED IN ANY SALE DEED OR SALE AGREEMENT. III. THE DOUBT OF THE AO AS TO THE SIGNATURE OF THE VENDOR LOOKING DIFFERENT IN THE SALE DEED FROM THAT IN THE SALE AG REEMENT, WAS NOT ATTEMPTED TO BE CLARIFIED DURING APPELLATE PROCEEDI NGS. IV. THE WITNESS WHO SIGNED BOTH THESE DOCUMENTS ARE DIFFERENT THOUGH BOTH THE DOCUMENTS WERE PREPARED ON THE SAME DAY. V. MOST IMPORTANTLY, THE LETTER OF THE VENDOR SHRI IQBAL KHAN, OBTAINED U/S 133(6) BY THE AO, DOES NOT MENTION ABOUT ANY SA LE AGREEMENT OR POWER OF ATTORNEY AND ALSO DOES NOT CONFIRM RECEIPT OF RS 34 LAKHS FROM THE ASSESSEE (24 LAKHS ON 25-12-2016 AND 10 LA KHS ON 02-03- 2007) AS MENTIONED IN AGREEMENT FOR SALE. IN VIEW OF ABOVE, THE CONTENTIONS OF THE APPELLANT IN GROUND 5 CANNOT BE ACCEPTED AND HENCE, THE ACTION OF THE AO TO REST RICT EXEMPTION U/S 54B BY DISALLOWING AMOUNT OF RS 6,52,787 IS UPHELD. 6. FROM THE ABOVE PARAS, IT IS SEEN THAT THIS IS ST ATED BY CIT(A) THAT REGARDING PAYMENT OF RS. 10 LAKHS BY CHEQUE NO. 644730 DATED 02.02.2007, NO SUPPORTING EVIDENCE WAS FILED BEFORE THE AO. I ALS O FIND THAT MUCH RELIANCE HAS BEEN PLACED BY CIT(A) ON THE LETTER OF SHRI IQBAL K HAN U/S. 133(6) WRITTEN TO THE AO AND IT IS NOTED BY HIM THAT THIS LETTER DOES NOT MENTION ABOUT ANY SALE AGREEMENT OR POWER OF ATTORNEY AND ALSO DOES NOT CO NFIRM RECEIPT OF RS. 34 LAKHS FROM THE ASSESSEE (24 LAKHS ON 25.12.2016 AND 10 LAKHS ON 02.03.2007) AS MENTIONED IN AGREEMENT FOR SALE. WHEN THE PAYME NT OF RS. 60 LAKHS IS MADE BY CHEQUES AND THE RELEVANT BANK STATEMENTS AR E AVAILABLE ON RECORD, I FEEL IT PROPER TO RESTORE THE MATTER BACK TO THE FI LE OF CIT(A) FOR FRESH DECISION AFTER EXAMINING THE VENDOR AND HIS BANK ACCOUNT TO COME TO THE TRUTH AS TO WHETHER THE VENDOR HAS RECEIVED RS. 60 LAKHS OR NOT AS BEING CLAIMED BY THE ASSESSEE AND WHAT IS THE NATURE OF SUCH RECEIPT OF RS. 60 LAKHS IF THIS AMOUNT OF RS. 60 LAKHS IS CREDITED IN HIS BANK ACCOUNT AS PER THE CHEQUE NUMBERS GIVEN BY THE ASSESSEE. THE CIT(A) SHOULD PASS NECE SSARY ORDER AS PER LAW AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO BOTH SIDES. REGARDING ITA NO. 2171/BANG/2018 PAGE 6 OF 6 DISALLOWANCE OF ASSESSEES CLAIM FOR DEDUCTION U/S. 54F ALSO, I FEEL IT PROPER TO RESTORE THE MATTER BACK TO THE FILE OF CIT(A) FOR F RESH DECISION AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO BOTH SIDES B ECAUSE THIS IS THE CLAIM OF THE ASSESSEE THAT THE ASSESSEE DID NOT OWN TWO HOUS ES AND THERE WAS TYPOGRAPHICAL ERROR IN THE STATEMENT OF AFFAIRS FIL ED BEFORE THE AO AND THE SAME WAS ALSO EXPLAINED IN THE REJOINDER AND REMAND REPO RT. ON THIS ISSUE ALSO, THE CIT(A) SHOULD DECIDE THE ISSUE AFRESH AFTER PROVIDI NG ADEQUATE OPPORTUNITY OF BEING HEARD TO BOTH SIDES. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DA TE MENTIONED ON THE CAPTION PAGE. SD/- (ARUN KUMAR GARODI A) ACCOUNTANT MEMBER BANGALORE, DATED, THE 10 TH AUGUST, 2018. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.