ACIT, New Delhi V. Shri Avtar Singh Sethi, New Delhi

ITA 2201/DEL/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 3532 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-07-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 12-07-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 10-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRATIMA KAUSHIK
• Keywords: Sale consideration of property below Jantri Value; Value adopted by valuation officer; Capital asset; Fair market value; Valuation report; Capital Gains
• Section: 50C; 69B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A DELHI BEFORE SHRI I.P. BANSAL AND SHRI K.D. RANJAN ITA NO. 2201(DEL)/2010 ASSESSMENT YEAR: 2006-07 ASSISTANT COMMISSIONER OF AVTA R SINGH SETHI, INCOME-TAX, CIRCLE 25(1), VS. 22/6 6, PUNJABI BAGH WEST, NEW DELHI. NEW DELHI. PAN-AAKPS 7305L (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. PRATIMA KAUSHIK, SR. DR RESPONDENT BY: NONE ORDER PER K.D. RANJAN: A.M. THIS APPEAL BY THE REVENUE FOR ASSESSMENT YEA R 2006-07 ARISES OUT OF ORDER OF CIT(APPEALS)-XXIV, NEW DELHI. 2. THE ONLY ISSUE FOR CONSIDERATION RELATES TO D ELETING THE ADDITION MADE ON ACCOUNT OF CAPITAL GAINS ON SALE OF PROPE RTY. THE FACTS OF THE CASE STATED IN BRIEF ARE THAT ASSESSEE HAD SOLD A PROPERTY IN WHICH HE HAD, AS A CO-OWNER, 50% SHARE. THE ASSESSEE DERIVED CAPITAL GAINS OF RS. 5,97,368/-. THE AO REFERRED THE PROPERTY T O VALUATION CELL U/S 55A OF THE ACT, WHO VALUED THE PROPERTY AT RS. 48,81,3 29/-. THIS ENHANCED ITA NO. 2201(DEL)/2010 2 VALUATION CONSEQUENTLY INCREASED THE CAPITAL GA INS BY RS. 9,40,655/-, WHICH HAS BEEN TAXED BY THE AO. 3. BEFORE LD. CIT(APPEALS), IT WAS SUBMITTED THAT UNDER SECTION 48 OF THE ACT, NOTHING OTHER THAN THE FULL VALUE OF CONSIDERATION CAN BE TAKEN FOR CAPITAL GAINS. RELIANCE WAS PLACED ON VARIO US DECISIONS, IN WHICH IT HAS BEEN HELD THAT AO COULD NOT SUBSTITUTE THE ALLEGED FAIR MARKET VALUE OF THE PROPERTY SOLD IN PLACE OF ACTUAL SALE CO NSIDERATION RECEIVED AS PER SALE DEED UNLESS THERE WAS EVIDENCE THAT THE ASSESSEE HAD RECEIVED CONSIDERATION OVER AND ABOVE THE CONSIDERATION MENTIONED IN THE SALE DEED. RELIANCE WAS ALSO PLACED ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. GODAWARI CORP. LTD . (1993) 200 ITR 567, WHEREIN IT WAS HELD THAT UNLESS THERE IS EVIDEN CE THAT MORE THAN WHAT WAS STATED WAS RECEIVED NO HIGHER PRICE OR VA LUE CAN BE TAKEN TO BE THE BASIS FOR COMPUTATION OF CAPITAL GAINS. THE ASSE SSEE ALSO PLACED RELIANCE ON THE DECISION OF APEX COURT IN THE CASE OF CI TY V. SHIVSHMI (P) LTD., 159 ITR 71 (SC) AND DELHI HIGH COURT IN CIT VS. GULSHAN KUMAR, 257 ITR 703; CIT VS. NARESH KHATTAR (HUF) 261 ITR 66 4 AND CIT VS. SMT. SUSHILA DEVI, 256 ITR 179 (DEL). THE ASSESSEE ALSO PLACED RELIANCE ON SEVERAL OTHER DECISIONS. THE LD. CIT(APPEALS) ON CONSIDERATION OF THE FACTS OF THE CASE AND THE DECISIONS RELIED UPON BY TH E ASSESSEE, OBSERVED THAT ITA NO. 2201(DEL)/2010 3 THERE WERE DOCUMENTS EVIDENCING THE SALE AND THERE WAS NOTHING ON RECORD TO PROVE THAT THE ASSESSEE HAD RECEIVED ANYTHING MORE THAN THE SUM STATED IN THE SALE DEED. THE SALE CONSIDER ATION, THEREFORE, SHOULD BE THE VALUE STATED IN THE DOCUMENT OF SALE AND NOT ANY OTHER VALUE CAN BE TAKEN FOR COMPUTING THE INCOME OF THE SELLER. HE ALSO NOTED THAT THE PROVISIONS OF SECTION 50C OF THE ACT WERE NOT APPLICABLE FOR COMPUTING CAPITAL GAINS IN THE HANDS OF SELLER BECAUSE T HE PROPERTY, BEING CAPITAL ASSET, HAD NOT BEEN SOLD AT A PRICE LESSER T HAN THE PRICE TAKEN FOR STAMP CHARGES. HE ALSO NOTED THAT A PERSON WHO AL LEGES A PARTICULAR FACT HAS TO PROVE THE SAME BY COGENT POSITIVE EVIDENC E. ONCE EVIDENCE IS LED AND THE INDIVIDUAL AGAINST WHOM IT IS ALLEG ED IS CONFRONTED WITH THE EVIDENCE, THE LAW PRESUMES THAT INDIVIDUAL ALLE GING A FACT HAS DISCHARGED THE ONUS AND, THEREFORE, IT IS FOR THE OTHER INDIVIDUAL AGAINST WHOM THE EVIDENCE IS PRODUCED TO REBUT THE SAME AND DEMO NSTRATE THAT THE EVIDENCE LED IS NOT A GOOD AND SUFFICIENT EVIDE NCE. IN THE CASE OF ASSESSEE, THE SALE CONSIDERATION HAS BEEN PROVED BY VALUATION REPORT. THERE WAS NOTHING ON RECORD TO DEMONSTRATE THAT T HE LOWER AMOUNT THAN THE SPECIFIED IN THE SALE DEED WAS RECEIVED. IN THE COURSE OF APPELLATE PROCEEDINGS BEFORE HIM THE ASSESSEE ALSO FILED THE COPIES OF SALE DEEDS OF PROPERTIES SITUATED IN THE ADJOINING AREAS SOLD BY SHRI P.K. ARORA, SHRI ITA NO. 2201(DEL)/2010 4 DEVINDER SINGH, SMT. AMARJEET KAUR AND OTHERS AN D M/S JAGAT OVERSEAS. IT WAS SUBMITTED THAT THE DEPARTMENT HAD NOT CHA LLENGED THE PURCHASE PRICE AS NO ADDITION HAD BEEN DONE EITHER IN THE HANDS OF PURCHASER OR IN THE HANDS OF OTHER CO-OWNER, NAMELY, MRS. JA SLEEN SURI. IT WAS ALSO SUBMITTED THAT THE VALUATION MADE BY DVO WAS N OT BASED ON ACTUAL RATE. THE DVO HAD APPLIED AUCTION RATE OF LAN D BY DDA WITH THE CORRECTION FACTOR AND COST OF CONSTRUCTION OF BU ILDING TAKEN BY CPWD AS ON 1.1.1992 WHICH COULD NOT BE TAKEN AS THAT PROPERTY WAS NOT SITUATED IN THE NEARBY LOCALITY AND MULTIPLICATION BY CORREC TION FACTOR IN MATHEMATICAL WAY COULD NOT DETERMINE THE SALE CONSIDERATION OF THE PROPERTY AS THE SALE CONSIDERATION WAS DEPENDE NT ON VARIOUS FACTORS. LD. CIT(APPEALS) IN VIEW OF ABOVE FACTORS AND A LSO RELYING ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF K.P. VERGHESE VS. ITO, 131 ITR 597 HELD THAT TO THROW THE BURDEN OF SH OWING THAT THERE WAS NO UNDER-STATEMENT OF CONSIDERATION RECEIVED, ON THE ASSESSEE WOULD BE TO CAST AN ALMOST IMPOSSIBLE BURDEN UPON HIM TO ESTA BLISH A NEGATIVE THAT HE DID NOT RECEIVE ANY CONSIDERATION MORE THAN WHAT HAS BEEN DECLARED BY HIM. THEREFORE, IF THE REVENUE SEEKS TO HOLD THAT THE ASSESSEE HAD RECEIVED MORE THAN WHAT HAS BEEN DECLARED BY HI M IN RESPECT OF THE ASSESSMENT IN QUESTION, THE ONUS WOULD LIE ON THE REVENUE TO PROVE THIS ITA NO. 2201(DEL)/2010 5 FACT BY BRINGING SOME MATERIAL ON RECORD. THE LD. CIT(APPEALS) ACCORDINGLY DELETED THE ADDITION. 4. WE HAVE HEARD THE LD. SR. DR AND GONE THR OUGH THE MATERIAL AVAILABLE ON RECORD. FROM THE ABOVE FACTS, IT IS CLEAR THAT THE AO HAD NO MATERIAL WITH HIM TO PROVE THAT HIGHER AMOUNT OF MONEY WAS RECEIVED BY THE ASSESSEE ON SALE OF HIS PROPERTY. WE FI ND THAT THIS ISSUE IS COVERED BY THE DECISION OF HONBLE DELHI HIGH COURT IN TH E CASE OF CIT VS. NARESH KHATTAR (HUF), 261 ITR 664, WHEREIN IT HAS BEEN HELD THAT IN ORDER TO INVOKE THE PROVISIONS OF SECTION 69B OF THE INCOM E-TAX ACT, THE BURDEN IS ON THE REVENUE TO PROVE THAT THE REAL INVESTMENT EXCEEDS THE INVESTMENT DONE IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. H ONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. SMT. SUSHILA DEVI, 256 ITR 179 , HAS HELD THAT WHERE THE TRIBUNAL HAD FOUND THAT IT WAS NOT THE CASE OF REVENUE THAT THE ASSESSEE HAD RECEIVED AN AMOUNT OF CONSIDERATION OVER AND ABOVE WHAT WAS STATED IN THE REGISTERED SALE DEED, AND T HAT THERE WAS ALSO NO DISPUTE THAT THE SALE TRANSACTIONS WERE EFFECTED TO ABSOLUTE STRANGERS. IT HAS ALSO BEEN HELD THAT SECTION 52(2) OF INCOME-TAX ACT, WAS NOT APPLICABLE. WE ALSO FIND THAT HONBLE SUPREME COURT IN THE CASE OF K.P. VERGHESE HAS HELD THAT THE BURDEN LIES ON THE AO TO PROVE THAT THE CONSIDERATION ITA NO. 2201(DEL)/2010 6 RECEIVED WAS MORE THAN WHAT WAS RECORDED IN T HE SALE DEED. IN THE CASE BEFORE US, THERE IS NO EVIDENCE ON RECORD BROUGHT BY AO TO SUGGEST THAT MORE AMOUNT THAN WHAT IS RECORDED IN THE S ALE DEED WAS RECEIVED. THEREFORE, IN OUR CONSIDERED OPINION, NO ADDI TION CAN BE MADE ON THE BASIS OF VALUATION REPORT. MOREOVER, THE FULL VALU E OF CONSIDERATION CANNOT BE SUBSTITUTED FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAINS BY THE MARKET VALUE OF THE PROPERTY. IN VIEW OF ABOVE, IN OUR C ONSIDERED OPINION, THE LD. CIT(APPEALS) WAS JUSTIFIED IN DELETING THE A DDITION HENCE AND NO INTERFERENCE IS CALLED FOR. 5. IN THE RESULT, APPEAL FILED BY THE REVENUE IS D ISMISSED. THE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 2 3RD JULY, 2010. SD/- SD/- (I.P.BANSAL) (K.D.RANJAN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE OF ORDER: 23RD JULY, 2010. SP SATIA COPY OF THE ORDER FORWARDED TO:- SHRI AVTAR SINGH SETHI, NEW DELHI. ASSTT. CIT, CIRCLE 25(1), NEW DELHI. CIT(A), CIT THE DR, ITAT, NEW DELHI. ASSISTANT REGISTRAR.