Jitendra Tyagi, Ghaziabad V. DCIT, Circle-1, Ghaziabad

ITA 2218/DEL/2018

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 6847 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 5 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 01-04-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Capital asset; Principle of natural justice; Additional evidence; Capital Gains
• Section: 147; 2(14); 201; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH ‘C’ : NEW DELHI) SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER and SHRI ANUBHAV SHARMA, JUDICIAL MEMBER ITA No.2218/Del./2018 (ASSESSMENT YEAR : 2009-10) Jitendra Tyagi, vs. DCIT, Circle 1, A – 241, Lajpat Nagar, Ghaziabad. Sahibabad, Ghaziabad – 201 005. (PAN : BAKPT0813P) (APPELLANT) (RESPONDENT) ASSESSEE BY : None REVENUE BY : Shri Anuj Garg, DR Date of Hearing : 07.09.2022 Date of Order : 15.09.2022 ORDER PER SHAMIM YAHYA, ACCOUNTANT MEMBER : This appeal by the assessee is directed against the order of the ld. CIT (A) - 2, Noida dated 29.12.2017 pertaining to assessment year 2009-10. 2. Grounds of appeal taken by the assessee read as under :- “1. On the hearing date of appeal the CIT (A) had given the following reasons as per order for failing and dismissing the appeal: ITA No.2218/Del./2018 2 (A) Deposit of Cash for Rs.40,50,000/- (Rs. 40,00,000/- cash deposit on account of amount received for sale of agriculture land and Rs.50,000/- as agriculture income: (I) On account of cash deposit of Rs. 40,50,000/- the CIT (A) has mentioned the chart showing sequence wise date of deposit of amount in bank .account. On the only base of sequence the CIT (A) has dismissed the appeal without taken our submission which was given through affidavit at the time of assessment u/s 147 under which the assessee has mentioned that the mentioned property was earlier sold to Mr. Rameshwar S/o Shri Ramuaa R/o : Village Morti, Ghaziabad, U.P. and the cash deposited in bank account was received from Mr Rameshwar and the deposit of bank account was done due to the cancellation of deal due to family pressure only. Out of Rs.40,50,000/- Rs. 50,000/- was on account of agriculture income which was also not considered as agriculture income. (II) After cancellation of deal amount was supposed to be return back to Mr Rameshwar but he did not accept and thereafter due to heavy cash from safety point of view it was deposited in bank. (III) This is the only co incidence which is reflecting in bank statement. (IV) The CIT (A) has said that this is only the story and not the fact. Whereas we have already submitted our affidavit even at the time of assessment u/s 147. (V) Once registry of agriculture land was made on 09.05.2018 and when it came to the notice of Mr Ramesh was he was ready to accept the amount and the assessee withdraw the cash from the bank on 05.06.2008 and 09.06.2008 and returned the money. (B) Calculation of Capital Gain: (i) The agriculture land was situated at Marti, Distt. Ghaziabad and the market rate was Rs. 1,00,000 on 01.04.1981, but the market rate of agriculture land was taken of Noor Nagar, ITA No.2218/Del./2018 3 Distt. Ghaziabad which was Rs.60,397/- on 01.04.1981. The difference in market rate amounts to Rs.39,603/-. (ii) Commission paid to broker for Rs. 2,50,000/- for sale of agriculture land was not considered while calculating capital gain which is legitimate expenses for transaction of any type of sale of property. The CIT (A) decision is against law and natural justice.” 3. Apropos issue of cash deposit. Brief facts of the case are that the assessee had deposited cash of Rs.40,50,000/- in the saving bank account of Bank of India, Ghaziabad. During the assessment proceedings it is observed by the AO that the assessee has filed only superficial submission without any supporting evidences regarding source of cash deposit The AO, therefore, made addition of Rs.40,50,000/- as unexplained cash deposit to the total income of the assessee. 4. Upon assessee’s appeal, ld. CIT (A) referred to the additional evidence filed. He admitted the same and obtained remand report from the AO and rejoinder from assessee. He upheld the addition by holding as under :- “4.10 I have considered the submission of the appellant, the assessment order, remand reports of the AO and rejoinder filed in response to remand reports. In regard to the issue of cash deposit, the assessing officer has examined the additional evidences and has observed in his remand report as "On perusal of submission filed by the assessee before your honor, it is noticed that the assessee submitted that the "cash of Rs.40,00,000/- was received from the purchaser of land but thereafter due to some argument with his elder brother the assessee didn't complete the transaction with the purchaser of ITA No.2218/Del./2018 4 land its means cash deposit into his saving bank account was not an income of assessee and Rs.50,000/ - deposited out of his agriculture income". But to substantiate the claim of the assessee he has not furnished the complete name & address of the purchasers before the A.O. as well as your honour during the appellate proceedings. Further, on perusal of record, it has revealed that on one side the assessee has sold the said property to M/s Parasnath Info System (P) Ltd., which was duly registered with the Sub-Registrar -II, Ghaziabad on 09.05.2008 and at the same time the assessee has made oral agreement also to sale out the same property to another person. The assessee has received Rs.4,50,000/- & Rs.20,62,375/- dated 06.05.2008 & 14.05.2008, respectively from M/s Parasnath Info System (P) Ltd. and after receiving the amount of Rs.4,50,000/- on 06.05.2008 the assessee has made oral agreement with another person, which is not logically possible. The relevant transaction made with Bank of India, Navyug Market, Ghaziabad A/c No.711310110001831 are as under:- Date of deposit Mode of deposit Amount 05.05.2008 By cash 50,000 06.05.2008 By clg. 926980 4,50,000 (out of sale of immovable Property) 09.05.2008 By Cash 40,00,000 14.05.2008 By Clg. 926985 20,62,375 (out of sale of immovable Property) From the above deposit entries it is clear that the assessee has received amount of Rs.4,50,000/- & Rs.20,62,375/- on 06.05.2008 & 14.05.2008, respectively through cheques out of sale proceeds of said immovable property to M/s. Parasnath Info System (P) Ltd. and further assessee has deposited Rs.40,00,000/- on 09.05.2008 which had been allegedly received from the oral agreement made with some persons to sell the same property. But the assessee has failed to furnish the complete name & address of these persons to whom oral ITA No.2218/Del./2018 5 agreement was made by the assessee for sale of the same immovable property. Thus, it is seen that the assessee has received the payment from two parties at the same time for sale of one property. The story created by the assessee are not matched with the transaction shown in his bank account.” 4.12 On perusal of the observation of the assessing officer in his remand report, I completely agree with that the appellant has failed to explain the source of cash deposit of Rs.40,50,000/. The appellant has received the sales consideration from the actual sale of the impugned property made to M/s Parasnath Info System (P) Ltd. In regard to the claim that there has been an oral agreement for the sale of same property during the same period, the appellant has not furnished any evidence in support and therefore failed to explain the source of cash deposit of Rs.40,50,000/. In view of the observation of the assessing officer in the remand report, after examining the additional evidences furnished by the appellant in this regard, it is held that the addition of Rs.40,50,000/- made on account of cash deposit is appropriate.” 5. Apropos issue of capital gain. Brief facts of the case are that the assessee has sold an immovable property to M/s Parasnath Info System Pvt. Ltd. with the sale consideration of Rs.50,24,750/- jointly with Shri Omender Singh. The share of the assessee was 50% of the property which comes to Rs.25,12,375/-. During the course of assessment proceedings the assessee had claimed that the property sold was an agricultural land and not liable to be taxed as capital gain. It was held by the assessing officer that the property sold by the assessee to M/ s Parasnath Info System Pvt. Ltd. ,situated at Village Morti, Post- Jalalabad, Dist: Ghaziabad is a capital asset within the meaning of section 2(14)(iii)(a) of the Act. Since the assessee has not furnished calculation of capital gain ITA No.2218/Del./2018 6 nor the copy of purchase deed of the property purchased by the assessee after sale of property, the profit on sale of property was treated as his income and an addition of Rs.25,12,375/ was made to the total income of the assessee. 6. Upon assessee’s appeal, ld. CIT (A) granted part relief by observing as under :- Pg 12 – 13 “4.14 On this issue, the assessing officer, after examining the additional evidences furnished by the appellant in this regard, in his remand report dated 23.11.2017 has observed as below: "Further, the second issue that the assessee has sold an immovable property to M/s Parasnath Info System Pvt. Ltd. with the sale consideration of Rs.50,24,750/ - jointly with Shri amender Singh S/o Shri Sheraj Singh. The share of the assessee was 50% of the property which comes to Rs.25,12,375/-. During the course of assessment proceedings the assessee has not furnished calculation of capital gain nor the copy of purchase deed of the property purchased by the assessee after sale of property. The assessee has received said amount of Rs.4,50,000/- through cheque No.826980 dated 05.05.2008 & Rs.20,62,375/- vide Cheque No. 926985 dated 09.05.2008 which is mentioned in the sale deed at page No. 24 & 25. The immovable property sold by the assessee is located at Village- Morti, Post- Jalalabad, Ghaziabad, which is situated within 8 Km of Municipal Limit of Nagar Nigam) Ghaziabad within the meaning of 'Capital Asset' u/s 2(4)(iii)(a) of the I.T. Act) 1961. During the course of appellate proceedings the assessee has filed copy of purchase deeds of two properties alongwith calculation of long term capital gain. On perusal of purchase deeds it is noticed that the assessee has purchased two immovable properties worth Rs.4,72,000/- which was registered on 09.06.2008 and at Rs.9,75,000/ - which was registered on 05.06.2008. The calculation of capital gain furnished by the assessee before your honour is reproduced as under:- ITA No.2218/Del./2018 7 Particulars Sale price/ year Indexed cost/ year Transfer expenses Indexed cost of improvement Exempt Capital Gain Agricultural Land 2512375 (9/5/08) 582000 (1/1/47) 250000 0.00 1555000 125375 Total 2512375 582000 250000 0.00 1555000 125375 On perusal of calculation of capital gain it is observed that the assessee has taken indexed cost of property as on 01.01.1947 at Rs.5,82,000/- and Transfer expenses claimed at Rs.2,50,000/-. The assessee has taken indexed cost /year of Rs.5,82,000/- as on 01.01.201947, but the basis of rate taken as on 01.01.1947 has not given by the assessee. 6. However, the immovable property sold by the assessee situated at Village - Morti, Distt. Ghaziabad, which is located at a distance within 8 KM of municipal limit from the Ghaziabad Municipality. Thus, the said property falls within the definition of capital asset as laid down u/s 2(14) of I.T. Act., 1961. Thus, after considering the above, the calculation of capital gain are as under- Sale consideration Rs.50,24,750/- Total salable area 0.505 Hectare = 6039.74 Sq. Yard. Half share of the assessee 0.252.5 Hecate Rs.25,12,375/- Less: Indexed cost of property 1981 3019.87 x 20 = 60,397/- (rate apply near by place Noor nagar) = 60,397 x 582 / 100 Rs.3,51,513/- Less: Investment in purchase of new immovable property Rs.15,43,260/- Long term capital gain (2512375 - 1894773) Rs.6,17,602/- From the above computation of capital gain, the Long term capital gain comes to Rs.6,17,602/ -. Therefore, the Long term capital gain of Rs.6,17,602/ - be added to the income of the in place of Rs.25,12,375/ - made by the AO on account of capital gain on sale of immovable property." 4.15 On perusal of the above observation of the assessing officer in his remand report, I am of the opinion that the assessing officer has taken into consideration all the relevant ITA No.2218/Del./2018 8 facts in computing the capital gains in the hand of the appellant. The assessing officer has judiciously allowed the benefit of indexed cost of acquisition to the appellant in computing the capital gain. Further, evidence of investment in purchase of new property for Rs.15,43,260/, filed by the appellant as additional evidence, was also considered by the assessing officer in computing the long term capital gain for Rs.6,17,602/ in the hand of the appellant. In view of the above, the capital gain of Rs.6,17,602/ is confirmed and appellant gets a relief of Rs.18,94,773/. Hence, the ground of appeal no. 2 is partly allowed.” 7. Against the above order of the ld. CIT (A), assessee has filed appeal before the ITAT. Several notices have been issued to assessee and many have returned unserved. None has appeared on behalf of the assessee. Hence we are adjudicating the appeal after hearing the ld. DR for the Revenue and perusing the record. 8. Upon careful consideration, we find the assessee’s plea have been correctly dealt with by ld. CIT (A). We do not find any infirmity in the well-reasoned order of the ld. CIT (A). Hence, we uphold the same. 9. In the result, the assessee’s appeal is dismissed. Order pronounced in the open court on this 15 th day of September, 2022. Sd/- sd/- (ANUBHAV SHARMA) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated the 15 th day of September, 2022 TS ITA No.2218/Del./2018 9 Copy forwarded to: 1.Appellant 2.Respondent 3.CIT 4.CIT(A)-2, Noida. 5.CIT(ITAT), New Delhi. AR, ITAT NEW DELHI.