Mohd Mohiuddin, Ranchi V. ITO WD-2(2), Ranchi

ITA 264/RAN/2016

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 3854 (ITAT-RANCHI)
• Duration Of Justice: 3 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 01-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NISHA SINGH MARR
• Assessee Lawyers: RANABIR ROY
• Keywords: Sale consideration of property below Jantri Value; Valuation report; Set aside
• Section: 271(1)(c); 143(3); 50C; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RANCHI BENCH, RANCHI BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER AND MS. MADHUMITA ROY, JUDICIAL MEMBER I.T.A. NO. 264/RAN/2016 ASSESSMENT YEAR: 2009-10 MOHAMMAD MOHIUDDIN....APPELLANT SCHOOL ROAD, NOOR NAGAR, PURANI RANCHI, RANCHI. [PAN: AIFPM 1774 N] ITO, WARD 2(2), RANCHI................................................................................................RESPONDENT RANCHI. & I.T.A. NO. 102/RAN/2017 ASSESSMENT YEAR: 2009-10 MOHAMMAD MOHIUDDIN....APPELLANT SCHOOL ROAD, NOOR NAGAR, PURANI RANCHI, RANCHI. [PAN: AIFPM 1774 N] ITO, WARD 2(2), RANCHI................................................................................................RESPONDENT RANCHI. APPEARANCES BY: SHRI RANABIR ROY, ADVOCATE APPEARING ON BEHALF OF THE ASSESSEE. SMT. NISHA SINGH MARR, JCIT APPEARING ON BEHALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : NOVEMBER 05, 2019 DATE OF PRONOUNCING THE ORDER : NOVEMBER 08, 2019 ORDER PER PRADIP KUMAR KEDIA, AM ITA NO. 264/RAN/2016 THE CAPTIONED APPEAL HAS BEEN FILED BY THE ASSESSEE CONCERNING THE ASSESSMENT YEAR 2009-10 AGAINST THE ORDER OF THE LD. CIT(A), RANCHI, JHARKHAND DATED 30.12.2014 ARISING IN THE MATTER OF ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER (AO) U/S 143(3) OF THE I.T. ACT, 1961 (THE ACT) ON THE FOLLOWING GROUNDS: 2 I.T.A. NO. 264/RAN/2016 & 102/RAN/2017 ASSESSMENT YEAR: 2009-10 MOHAMMAD MOHIUDDIN I. FOR THAT THE LD. ASSESSING OFFICER HAS WRONGLY MADE ASSESSMENT U/S 143(3) OF THE I.T. ACT, 1961, ON THE BASIS OF WRONG BALANCE SHEET SUBMITTED BY THE AR OF THE ASSESSEE, WHICH ARE NEITHER APPROVED NOR SIGNED BY THE ASSESSEE. II. FOR THAT ALL THE TRANSACTIONS REGARDING SALE AND PURCHASE OF LAND ALREADY APPEARS IN THE CORRECT BALANCE SHEET FOR THE ASSESSMENT YEAR 2007-08, 2008-09 AND 2009-10. III. FOR THAT AS PER THE REGISTERED DEED THE CONSIDERATION AMOUNT PAID IS ONLY RS. 11,00,000/-. THE ASSESSING OFFICER HAS WRONGLY TAKEN SALE VALUE OF RS. 56,81,250/- WHICH IS ONLY THE REGISTERED VALUE OF LAND. HENCE THE AO, WITHOUT GOING TO THE FACT THAT THE LAND IN QUESTION IS DISPUTED WRONGLY TREATED THIS AS UNDISCLOSED INCOME OF RS. 42,08,208/-. IN THE PRESENT CASE CAPITAL GAIN DOES NOT ARISE WHEN THE PURCHASERS VALUE IS ACCEPTED BY THE DEPARTMENT. HENCE THIS ADDITION SHOULD BE DELETED. IV. FOR THAT THE LAND PURCHASED FOR RS. 8,87,000/- ALREADY SHOWN IN THE BALANCE SHEET ALONG WITH THE SOURCES OF FUNDS, FOR THE ASSESSMENT YEAR 2009-10. HENCE THIS SHOULD NOT BE TREATED AS UNDISCLOSED INCOME AND BE DELETED FROM THE TOTAL INCOME. V. FOR THAT THE UNSECURED LOAN FOR RS. 1,00,000/- HAS BEEN WRONGLY ASSESSED TO THE TOTAL INCOME OF THE ASSESSEE. THERE IS NO LOAN FOR THE RELEVANT YEAR, ALL THE UNSECURED LOANS ARE FOR THE EARLIER YEARS WHICH HAS BEEN DISCLOSED IN THE PREVIOUS RETURN SUBMITTED BY THE ASSESSEE TO THE DEPARTMENT. HENCE THE ADDITION OF UNSECURED LOAN FOR RS. 1,00,000/- SHOULD BE DELETED. VI. FOR THAT THE ADDITION MADE TO RETAIL TRADE IS UNJUST AND AGAINST THE LAW AND SHOULD BE DELETED AND INCOME DECLARED IN THE RETURN SHOULD BE ACCEPTED. FOR THAT IF ANY OTHER MATTER WOULD BE URGED AT THE TIME OF HEARING. 2. WHEN THE MATTER WAS CALLED FOR HEARING, THE LD. AR FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAD SOLD A PLOT OF LAND WHOSE REGISTERED VALUE WAS RS. 56,87,250/-. HOWEVER, THE ACTUAL CONSIDERATION INVOLVED TOWARDS PROPERTY WAS RS. 11 LACS ONLY. THE ASSESSING OFFICER HAS WRONGLY ADOPTED THE STAMP DUTY VALUE OF RS. 56,81,250/- TO BE THE DEEMED SALE CONSIDERATION WITHOUT RECOGNISING THE FACT THAT THE PROPERTY SOLD WAS DISPUTED AND WAS NOT FREELY 3 I.T.A. NO. 264/RAN/2016 & 102/RAN/2017 ASSESSMENT YEAR: 2009-10 MOHAMMAD MOHIUDDIN MARKETABLE. THE PROPERTY WAS ULTIMATELY SOLD TO MRS. FARJANA KHATOON WHO IS CONNECTED TO THE PARTIES LITIGATING THE PROPERTY. THE LD. AR ACCORDINGLY SUBMITTED THAT THE ASSESSEE WAS FORCED TO COME OUT OF THE PROPERTY AT A VERY LOW CONSIDERATION OWING TO THE SERIOUS CONSTRAINTS IMPOSED. IT WAS THUS SUBMITTED THAT THE MATTER MAY BE REMAINED BACK TO THE ASSESSING OFFICER FOR DETERMINATION OF THE CORRECT VALUE OF THE PLOT IN THE ATTENDANT CIRCUMSTANCES BY ROPING IN THE VALUER FOR FACTORING THE CIRCUMSTANCES. THE LD. DR, ON THE OTHER HAND, RELIED UPON THE ORDER OF THE LOWER AUTHORITIES. 3. CONSIDERING THE CIRCUMSTANCES NARRATED ABOVE ON BEHALF OF THE ASSESSEE AND HAVING REGARD TO THE PROVISIONS OF SECTION 50C OF THE ACT, WE DEEM IT EXPEDIENT TO SET ASIDE THE ISSUE AS PER GROUND NO. 1 TO 4 TO THE FILE OF THE AO FOR DE NOVO EXAMINATION IN ACCORDANCE WITH LAW AFTER GIVING REASONABLE OPPORTUNITY TO THE ASSESSEE IN THIS REGARD. IT SHALL BE OPEN TO THE ASSESSEE TO DEMONSTRATE THE INVOLVEMENT OF LITIGATION IN THE PROPERTY CAUSING LOWER SALE CONSIDERATION OF LAND. THE ASSESSING OFFICER MAY MAKE SUCH ENQUIRY AND SEEK VALUATION REPORT ETC AS HE MAY CONSIDER NECESSARY FOR DETERMINATION OF THE ISSUE IN ACCORDANCE WITH LAW. 4. IN THE RESULT, GROUND NO. 1 TO 4 IS ALLOWED FOR STATISTICAL PURPOSES. 5. GROUND NO. 5 CONCERNS ADDITION OF RS. 1,00,000/- U/S 68 OF THE ACT. WE STRAIGHTAWAY TAKE NOTICE OF THE PLEA RAISED ON BEHALF OF THE ASSESSEE THAT THE AFORESAID LOAN DOES NOT PERTAIN TO THE ASSESSMENT 4 I.T.A. NO. 264/RAN/2016 & 102/RAN/2017 ASSESSMENT YEAR: 2009-10 MOHAMMAD MOHIUDDIN YEAR IN THE QUESTION. THE LOAN HAS BEEN RECEIVED IN THE EARLIER YEARS AND, THEREFORE, SECTION 68 HAS NO APPLICATION IN THE FACTS OF THE CASE. GROUND NO. 5 OF THE APPEAL IS ALLOWED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ITA NO. 102/RAN/2017 THE CAPTIONED APPEAL HAS BEEN FILED BY THE ASSESSEE CONCERNING THE ASSESSMENT YEAR 2009-10 AGAINST THE ORDER OF THE LD. CIT(A), RANCHI, JHARKHAND DATED 24.02.2017 ARISING IN THE MATTER OF ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER (AO) U/S 271(1)(C) OF THE I.T. ACT, 1961 (THE ACT). 7. THE PENALTY U/S 271(1)(C) IS STATED TO HAVE BEEN IMPOSED BY THE ASSESSING OFFICER ON THE ADDITIONS MADE ON ACCOUNT OF LONG TERM CAPITAL GAIN AS PER THE QUANTUM APPEAL IN 264/RAN/2016. 8. IN THE LIGHT OF THE FACT THAT THE QUANTUM ADDITION HAS BEEN SET ASIDE TO THE FILE OF THE AO FOR DE NOVO ADJUDICATION, THE PENALTY U/S 271(1)(C) DOES NOT SURVIVING ON THIS SCORE. THE ASSESSING OFFICER SHALL BE AT LIBERTY BUT REVISIT THE PROVISIONS OF SECTION 271(1)(C) DEPENDING UPON THE DETERMINATION OF ISSUE IN THE FRESH PROCEEDINGS BEFORE AO WITH REGARD TO THE AFORESAID ISSUE. THE ADDITION U/S 68 HAS ALSO BEEN DELETED IN THE QUANTUM PROCEEDINGS. IN THE LIGHT OF AFORESAID OBSERVATION, THE PENALTY U/S 271(1)(C) IS QUASHED AND THE APPEAL OF THE ASSESSEE IS ALLOWED. 5 I.T.A. NO. 264/RAN/2016 & 102/RAN/2017 ASSESSMENT YEAR: 2009-10 MOHAMMAD MOHIUDDIN 9. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 08 NOVEMBER, 2018. SD/- SD/- ( MS. MADHUMITA ROY) (PRADIP KUMAR KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 08/11/2019 BISWAJIT, SR. PS COPY OF ORDER FORWARDED TO: 1. MOHAMMAD MOHIUDDIN. 2. ITO, WARD 2(2), RANCHI. 3. THE CIT(A) 4. THE CIT 5. DR TRUE COPY, BY ORDER, SR. P.S. / H.O.O. ITAT, RANCHI