Balaji Foundation, Aruppukottai V. ITO, Ward-1, Virudhunagar

ITA 227/CHNY/2019

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 5725 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-10-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 31-01-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: N ARJUN RAJ C A SHRI S SRIDHAR

Judgement Text

, / , IN THE INCOME TAX APPELLATE TRIBUNAL A SMC BENCH, CHENNAI ... , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER ./ ITA NO.227/CHNY/2019 ' #$' / ASSESSMENT YEAR : 2007-08 M/S BALAJI FOUNDATION, @DEVAR NORTH STREET, THUMBUCHINNAMPATTI, MANDAPASALAI POST, ARUPPUKOTTAI. PAN : AAFFB 3039 D V. THE INCOME TAX OFFICER, WARD 1, VIRUDHUNAGAR. (&'/ APPELLANT) (()&'/ RESPONDENT) &' * + / APPELLANT BY : SHRI N. ARJUN RAJ, CA FOR SHRI S. SRIDHAR, ADVOCATE ()&' * + / RESPONDENT BY : SHRI AR.V. SREENIVASAN, JCIT , # * -. / DATE OF HEARING : 17.07.2019 /0$ * -. / DATE OF PRONOUNCEMENT : 01.10.2019 / O R D E R THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -1, MADURA I, DATED 04.12.2018 AND PERTAINS TO ASSESSMENT YEAR 2007-08. 2. SHRI N. ARJUN RAJ, THE LD. REPRESENTATIVE FOR TH E ASSESSEE, SUBMITTED THAT THE ASSESSING OFFICER MADE AN ADDITI ON OF 2 I.T.A. NO.227/CHNY/19 2,04,000/- BEING THE DIFFERENCE BETWEEN ACTUAL SALE VALUE AND ADMITTED VALUE. ACCORDING TO THE LD. REPRESENTATIV E, THE ASSESSEE ENGAGED LOCAL INTERMEDIARIES FOR REMOVING OBSTRUCTI ON FROM CANVASSING AND TAKING NECESSARY PRECAUTIONS TO AVOI D OBSTRUCTION FROM LOCAL VIPS FOR REGISTRATION OF PLOTS. THE EXC ESS AMOUNT STATED IN THE AGREEMENT WAS SPECIFICALLY INTENDED TO MEET THE EXTRA EXPENDITURE FOR REMOVING OBSTRUCTION. IN FACT, ACC ORDING TO THE LD. REPRESENTATIVE, THIS AMOUNT WAS COLLECTED IN ADVANC E THROUGH SALE AGREEMENT. THEREFORE, THE DIFFERENCE OCCURRED BETW EEN THE ACTUAL SALE AND SALE VALUE ADMITTED IN THE RETURN OF INCOM E. HENCE, ACCORDING TO THE LD. REPRESENTATIVE, TO VERIFY THE FACTS, THE MATTER MAY BE REMITTED BACK TO THE FILE OF THE ASSESSING O FFICER. 3. ON THE CONTRARY, SHRI AR.V. SREENIVASAN, THE LD. DEPARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE SAL E AGREEMENT WAS FOUND DURING THE COURSE OF SURVEY OPERATION AND THE SAME WAS IMPOUNDED. ACCORDING TO THE LD. D.R., THE ACTUAL S ALE VALUE OF PLOTS SOLD DURING THE YEAR UNDER CONSIDERATION WAS 41,09,078/-, WHEREAS, THE ASSESSEE ADMITTED THE SALE VALUE AT 39,05,078/-. WHEN THE ASSESSING OFFICER REQUESTED THE ASSESSEE T O EXPLAIN THE DIFFERENCE OF 2,04,000/-, ACCORDING TO THE LD. D.R., THE ASSESSEE COULD NOT EXPLAIN PROPERLY, THEREFORE, THE ADDITION WAS MADE. 3 I.T.A. NO.227/CHNY/19 4. HAVING HEARD THE LD. REPRESENTATIVE FOR THE ASSE SSEE AND THE LD. D.R., THIS TRIBUNAL FINDS THAT ADMITTEDLY T HERE WAS DIFFERENCE BETWEEN THE ACTUAL SALE VALUE AND ADMITTED SALE VAL UE. THE ASSESSEE CLAIMS THAT EXTRA MONEY WAS OBTAINED FOR C ANVASSING AND TAKING PRECAUTION FOR AVOIDING OBSTRUCTION FROM LOC AL VIPS. IT IS NOT KNOWN WHAT KIND OF OBSTRUCTION WOULD COME FROM LOCA L VIPS FOR SELLING THE PLOTS. EVEN IT IS ASSUMED THAT THERE I S OBSTRUCTION FROM LOCAL VIPS AND THE ASSESSEE HAD TO PAY EXTRA MONEY TO AVOID THIS OBSTRUCTION, THIS WOULD AMOUNT TO ILLEGAL PAYMENT. THEREFORE, SUCH A PAYMENT CANNOT BE ALLOWED AS EXPENDITURE. IN OTH ER WORDS, THE MONEY COLLECTED OVER AND ABOVE THE SALE CONSIDERATI ON DISCLOSED IN THE RETURN OF INCOME HAS ALSO NECESSARILY TO BE TAK EN AS SALE CONSIDERATION. THEREFORE, THE DIFFERENCE OF 2,04,000/- HAS TO BE NECESSARILY CONSIDER AS INCOME OF THE ASSESSEE. HE NCE, THIS TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE WITH T HE ORDER OF THE LOWER AUTHORITY AND ACCORDINGLY THE SAME IS CONFIRM ED. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS DISMISSED. 4 I.T.A. NO.227/CHNY/19 ORDER PRONOUNCED IN THE COURT ON 1 ST OCTOBER, 2019 AT CHENNAI. SD/- ( ... ) (N.R.S. GANESAN) /JUDICIAL MEMBER /CHENNAI, 2 /DATED, THE 1 ST OCTOBER, 2019 KRI. * (-34 54$- /COPY TO: 1. &' /APPELLANT 2. ()&' /RESPONDENT 3. , 6- () /CIT(A)-1, MADURAI 4. PRINCIPAL CIT, MADURAI-2, MADURAI 5. 4#7 (- /DR 6. 8' 9 /GF.