ITO, CHENNAI V. M.Sathya Rao, CHENNAI

ITA 2624/CHNY/2014

• Counselvise Citation: 262421714 RSA 2014
• Duration Of Justice: 7 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2008-2009
• Appeal Filed On: 17-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PATHLAVATH PEERYA
• Assessee Lawyers: M NARAYANAN RETD

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI . . . , . !'# ! , % !& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.2624/MDS/2014 ( )( / ASSESSMENT YEAR : 2008-09 THE INCOME TAX OFFICER, SALARY WARD II(4), CHENNAI - 600 034. V. SHRI M. SATHYA RAO, 107-F, B.B. ROAD, PERAMBUR, CHENNAI - 600 039. PAN : AJYPS 1164 L (+,/ APPELLANT) (-.+,/ RESPONDENT) +, / 0 / APPELLANT BY : SH. PATHLAVATH PEERYA, CIT -.+, / 0 / RESPONDENT BY : SH. M. NARAYANAN, RETD. ADDL. CIT 1 / 2% / DATE OF HEARING : 14.05.2015 3') / 2% / DATE OF PRONOUNCEMENT : 29.05.2015 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-II, CHENNA I, DATED 22.05.2014 AND PERTAINS TO ASSESSMENT YEAR 2008-09. THE ONLY 2 I.T.A. NO.2624/MDS/14 ISSUE ARISES FOR CONSIDERATION IS WITH REGARD TO AS SESSMENT OF ` 1,68,63,000/- TOWARDS INCOME FROM OTHER SOURCES. 2. SH. PATHLAVATH PEERYA, THE LD. DEPARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE ASSESSEE HAS SOL D 30.66 ACRES OF AGRICULTURAL LANDS AT THOMUR VILLAGE, THIRUVALLU R, ON 14.06.2007 TO ONE SMT. MAHALAKSHMI, DAUGHTER OF SHRI R. RANGARAJA N, THE FOUNDER-CHAIRMAN OF VELTECH GROUP OF EDUCATIONAL IN STITUTIONS. THE TOTAL SALE CONSIDERATION AS PER THE REGISTERED SALE DEED WAS ONLY ` 45,99,000/-. DURING THE COURSE OF ENQUIRY, IT WAS FOUND THAT THE ASSESSEE HAD RECEIVED ` 2,14,62,000/- ON SALE OF SUCH LANDS. ON FURTHER ENQUIRY, THE ASSESSING OFFICER FOUND THA T THE ASSESSEE SOLD THE ABOVE PROPERTY JOINTLY WITH SIX OTHER CO-O WNERS/CO-VENDORS. ON EXAMINATION, TWO OF THE CO-VENDORS TOLD THE INVE STIGATION WING THAT THEY DID NOT KNOW ABOUT THE ACTUAL SALE CONSID ERATION. THE OTHER CO-VENDORS DID NOT APPEAR BEFORE THE ASSESSIN G OFFICER EVEN AFTER ISSUE OF SUMMONS. ACCORDING TO THE LD. D.R., THOUGH THE ASSESSEE CLAIMS THAT THE TOTAL SALE CONSIDERATION W AS ` 2,14,62,000/- THERE IS NO MATERIAL ON RECORD TO SHOW THAT THE ASS ESSEE HAS RECEIVED ` 1,68,63,000/- ON SALE OF THE AGRICULTURAL LANDS. A S PER THE REGISTERED SALE DEED, THE SALE CONSIDERATION WAS ` 45,99,000/-. THEREFORE, THE BALANCE AMOUNT OF ` 1,68,63,000/- WAS ADDED AS 3 I.T.A. NO.2624/MDS/14 INCOME FROM OTHER SOURCES. THE CIT(APPEALS) ALLOWE D THE CLAIM OF THE ASSESSEE WITHOUT ANY JUSTIFIABLE CAUSE. 3. ON THE CONTRARY, SHRI M. NARAYANAN, THE LD. REPR ESENTATIVE FOR THE ASSESSEE, SUBMITTED THAT ADMITTEDLY THE ASS ESSEE SOLD 30.66 ACRES OF AGRICULTURAL LANDS ALONG WITH OTHER CO-OWN ERS TO SMT. MAHALAKSHMI, DAUGHTER OF SHRI R. RANGARAJAN. THE T OTAL SALE CONSIDERATION WAS ` 2,14,62,000/-. HOWEVER, THE SALE CONSIDERATION DISCLOSED IN THE REGISTERED SALE DEED WAS ONLY ` 45,99,000/-. THE BALANCE AMOUNT OF ` 1,68,63,000/- WAS RECEIVED BY THE ASSESSEE IN CASH. THE ASSESSING OFFICER HERSELF FOUND THAT THE MONEY RECEIVED BY THE ASSESSEE IS ON SALE OF AGRICULTURAL LANDS AT THOMUR VILLAGE, THEREFORE, IT IS EXEMPTED FROM TAXATION. SINCE THE ENTIRE SALE CONSIDERATION OF ` 1,68,63,000/- IS ONLY FOR WALE OF 30.66 ACRES OF LAND, THE ENTIRE RECEIPT IS NOT SUBJECTED TO TAXATI ON UNDER THE INCOME-TAX ACT. 4. THE LD. REPRESENTATIVE FOR THE ASSESSEE FURTHER SUBMITTED THAT DURING THE COURSE OF EXAMINATION BY ADDL. DIRE CTOR OF INCOME TAX (INVESTIGATION), SHRI M. SATHYA RAO, IN HIS STA TEMENT DATED 24.11.2008 HAD ADMITTED THAT THE TOTAL SALE CONSIDE RATION OF 30.66 ACRES OF AGRICULTURAL LANDS WAS ` 2,14,62,000/-. THE LD. REPRESENTATIVE FURTHER SUBMITTED THAT THE PURCHASER OF THE LANDS 4 I.T.A. NO.2624/MDS/14 SMT. MAHALAKSHMI ADMITTED IN HER RETURN OF INCOME F ILED UNDER SECTION 153C OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') THAT THE TOTAL CONSIDERATION WAS ` 2,14,62,000/-. WHEN THE PURCHASER ADMITS THAT THE TOTAL CONSIDERATION WAS ` 2,14,62,000/-, THE ASSESSING OFFICER MAY NOT BE CORRECT IN SAYING THAT THE SALE CONSIDERATION WAS ONLY ` 45,99,000/-. IN FACT, ACCORDING TO THE LD. REPRES ENTATIVE, ` 45,99,000/- WAS RECEIVED THROUGH CHEQUE AND BALANCE AMOUNT OF ` 1,68,63,000/- WAS RECEIVED IN CASH. SINCE THE ENTI RE SALE CONSIDERATION OF ` 2,14,62,000/- WAS ONLY FOR SALE OF 30.66 ACRES OF LAND AT THOMUR VILLAGE, ACCORDING TO THE LD. REPRES ENTATIVE, THE ENTIRE PROFIT ON SALE OF SUCH LANDS IS EXEMPTED FRO M TAXATION. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL ON RECORD. FROM THE ORDERS OF THE LOWER AUTHORITIES IT APPEARS THAT THERE WAS A SEARC H AND SEIZURE OPERATION IN THE CASE OF VEL TECH GROUP OF EDUCATIO NAL INSTITUTIONS. DURING THE COURSE OF SEARCH OPERATION, THE REVENUE AUTHORITIES FOUND THAT SMT. MAHALAKSHMI PURCHASED 30.66 ACRES O F AGRICULTURAL LANDS FROM THE ASSESSEE AND OTHER CO-VENDORS FOR A TOTAL CONSIDERATION OF ` 2,14,62,000/-. HOWEVER, THE REGISTERED DOCUMENT DISCLOSED THE SALE CONSIDERATION AT ` 45,99,000/-. ON FURTHER INVESTIGATION, THE REVENUE AUTHORITIES FOUND THAT A S PER THE 5 I.T.A. NO.2624/MDS/14 REGISTERED SALE DEED DATED 12.06.2007, THE SALE CON SIDERATION DISCLOSED WAS ONLY ` 45,99,000/- WHICH WAS RECEIVED BY WAY OF DEMAND DRAFT FROM THE PURCHASER. THEREFORE, ONLY T O THE EXTENT OF ` 45,99,000/- ALONE DOES NOT COME UNDER THE PURVIEW O F CAPITAL GAIN FOR TAXATION. THERE IS NO MATERIAL AVAILABLE ON RE CORD TO SUGGEST THAT THE ASSESSEE HAS NOT RECEIVED ANY MONEY OVER AND AB OVE THE SALE CONSIDERATION DISCLOSED IN THE SALE DEED. IN FACT, WHEN THE ASSESSEE WAS EXAMINED ON 24.11.2008 BY THE ADDL. DI RECTOR OF INCOME TAX (INVESTIGATION), HE ADMITTED THAT HE REC EIVED ENTIRE MONEY TOWARDS SALE CONSIDERATION ON THE ABOVE SAID AGRICULTURAL LANDS. THE ASSESSEE HAS ADMITTED THAT THE AMOUNT D ISCLOSED IN THE SALE DEED TO THE EXTENT OF ` 45,99,000/- WAS RECEIVED BY DEMAND DRAFT AND THE BALANCE AMOUNT OF ` 1,68,63,000/- WAS RECEIVED IN CASH. THE ASSESSEE ADMITTED THAT THE CASH WAS RECE IVED AFTER COMING OUT OF SUB-REGISTRARS OFFICE BY THE ASSESSE E ON BEHALF OF THE CO-VENDORS. 6. ONE SMT. SURYAKANTHAM WAS ALSO ADMITTED BEFORE T HE ADDL. DIRECTOR OF INCOME TAX (INV.) BY HIS STATEMENT DATE D 24.11.2008 THAT THE TOTAL SALE CONSIDERATION FOR THE SALE OF A GRICULTURAL LANDS WAS ` 2,14,62,000/-. THE PURCHASER SMT. MAHALAKSHMI ALSO FILED HER RETURN OF INCOME IN PURSUANCE OF NOTICE ISSUED BY T HE DEPARTMENT 6 I.T.A. NO.2624/MDS/14 UNDER SECTION 153C OF THE ACT. IN THE SAID RETURN, SMT. MAHALAKSHMI ADMITTED THAT THE TOTAL SALE CONSIDERAT ION WAS ` 2,14,62,000/-. THEREFORE, IT IS OBVIOUS THAT ASSES SEE BEING ONE OF THE VENDORS AND THE PURCHASER SMT. MAHALAKSHMI ADMI TTED THAT THE SALE CONSIDERATION OF ` 45,99,000/- WAS PAID BY CASH WHICH WAS DISCLOSED IN THE SALE DEED AND OVER AND ABOVE THE S ALE CONSIDERATION SMT. MAHALAKSHMI ALSO PAID A SUM OF ` 1,68,63,000/- FOR PURCHASE OF THE LANDS FROM THE ASSESSEE AND OTH ER VENDORS. THEREFORE, IT WOULD NOT BE RIGHT TO SAY THAT THERE IS NO EVIDENCE TO SHOW THA THE SALE CONSIDERATION RECEIVED OVER AND A BOVE THE CONSIDERATION DISCLOSED IN THE SALE DEED IS NOT FOR SALE OF THE PROPERTY. AS RIGHTLY FOUND BY THE CIT(APPEALS), TH E SALE CONSIDERATION WAS ` 2,14,62,000/- AND THE SALE CONSIDERATION DISCLOSED IN THE SALE DEED WAS ` 45,99,000/-. THE ASSESSEE HAS RECEIVED ` 1,68,63,000/- IN CASH. THEREFORE, THE ENTIRE SALE CONSIDERATION OF ` 2,14,62,000/- IS FOR SALE OF 30.66 ACRES OF AGRICULTURAL LANDS AT THOMUR VILLAGE. ADMITTEDLY, THE SALE CONSIDERATION OF THE AGRICULTURAL LANDS AT THOMUR V ILLAGE IS EXEMPTED FROM TAXATION. IN FACT, THE ASSESSING OFF ICER HERSELF ADMITTED IN THE ASSESSMENT ORDER THAT THE SALE CONS IDERATION DISCLOSED IN THE SALE DEED IS EXEMPTED FROM TAXATIO N. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ENTIRE SALE C ONSIDERATION IS 7 I.T.A. NO.2624/MDS/14 EXEMPTED FROM TAXATION. THEREFORE, THIS TRIBUNAL D O NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(APPEALS) AND ACCO RDINGLY THE SAME IS CONFIRMED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED ON 29 TH MAY, 2015 AT CHENNAI. SD/- SD/- (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) (. !'# ! ) ( . . . ) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 5 /DATED, THE 29 TH MAY, 2015. KRI. / -267 87)2 /COPY TO: 1. +, /APPELLANT 2. -.+, /RESPONDENT 3. 1 92 () /CIT(A)-II, CHENNAI 4. 1 92 /CIT-II, CHENNAI 5. 7: -2 /DR 6. ( ; /GF.