Sri.N.V.George, Trichur V. DCIT, Trichur

ITA 266/COCH/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69125 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 1 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-12-2013
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 17-10-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 29-10-2012
• Court: TRIBUNAL
• Department Lawyers: K K JOHN
• Keywords: Business income; Cost of acquisition

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND B.R.BASKAR AN, AM I.T.A. NO. 266/COCH/2012 ASSESSMENT YEAR : 2009-10 SHRI N.V. GEORGE, 25/180, GEO BHAVAN, CHALAKUDY, THRISSUR. [PAN: AOAPG 4670G] VS. THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE, THRISSUR. (ASSESSEE -APPELLANT) (REVENUE-RESPONDEN T) ASSESSEE BY SHRI ANIL D. NAIR, ADV. REVENUE BY SHRI K.K. JOHN, SR. DR DATE OF HEARING 17/10/2013 DATE OF PRONOUNCEMENT 27/12/2013 O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 30- 07-2012 PASSED BY LD CIT(A)-I, KOCHI AND IT RELATES TO THE ASSESSMENT YEAR 2009-10. 2. THE APPEAL WAS INITIALLY DISPOSED OF BY THIS BEN CH OF THE TRIBUNAL ON 24- 05-2013. SUBSEQUENTLY, THE ASSESSEE FILED A MISCEL LANEOUS PETITION BY SUBMITTING THAT THE TRIBUNAL DID NOT DISPOSE OF THE GROUNDS NU MBERED AS (C), (D) AND (F) IN THE GROUNDS OF APPEAL FILED BEFORE THE TRIBUNAL. O N FINDING MERIT IN THE SAID SUBMISSIONS, THE TRIBUNAL, VIDE ITS ORDER DATED 23- 08-2013, RECALLED THE ORDER FOR THE LIMITED PURPOSE OF HEARING GROUNDS NUMBERED AS (C), (D) AND (F) IN THE GROUNDS OF APPEAL. ACCORDINGLY, THE PARTIES WERE H EARD ON THE ABOVE SAID GROUNDS. I.T.A. NO.266 /COCH/2012 2 3. IN THE GROUNDS NUMBERED AS (C), (D) AND (F) IN T HE GROUNDS OF APPEAL, THE ASSESSEE IS CONTENDING THAT THE ASSESSING OFFICER, WHILE COMPUTING THE BUSINESS INCOME ON SALE OF AGRICULTURAL LANDS, SHOULD HAVE A DOPTED THE PURCHASE PRICE OF THE LAND AT THE RATE IN THE SWORN STATEMENT, INSTEA D OF ADOPTING THE PURCHASE COST AS PER THE CONVEYANCE DEED. 4. THE FACTS RELATING TO THE ABOVE SAID ISSUE ARE S TATED IN BRIEF. THE ASSESSEE AND ANOTHER PERSON NAMED SHRI N.A. BABY TO GETHER PURCHASED 944.43 CENTS OF RUBBER PLANTATION IN AMBALLUR VILLAGE, THR ISSUR DISTRICT ON 09.5.2007 AND 07.07.2007. THE SAID LAND WAS LATER SOLD TO SHRI E. P. ANTONY, SHRI A.A. DAVIS AND OTHERS. A PERSON NAMED SHRI P.T. PAVUNNY WAS A MID DLEMAN OR BROKER IN THE DEAL. DURING THE SEARCH PROCEEDINGS AT THE RESIDEN CE OF SHRI P.T. PAVUNNY, A SALE AGREEMENT RELATING TO THE ABOVE SAID TRANSACTI ON OF SALE WAS SEIZED. FROM THE SAID AGREEMENT, IT WAS NOTICED THAT THE SELLING PRICE OF THE LAND WAS RS.25,000/- PER CENT, WHICH WAS FOUND TO BE HIGHER THAN THE DOCUMENTED VALUE. THE BUYER SHRI A.A. DAVIS AND THE CO-PURCHASER SHRI N.A. BABY CONFIRMED THAT THE TRANSACTION WAS CARRIED AT THE RATE OF RS.25,00 0/- PER CENT. ACCORDINGLY, THE ASSESSING OFFICER DETERMINED THE SALE CONSIDERATION OF THE LAND BY ADOPTING THE RATE OF RS. 25,000/- PER CENT. IN THE STATEMENT TA KEN FROM SHRI N.A. BABY, HE HAD STATED THAT THE LAND WAS PURCHASED AT RS.10,250 /-PER CENT. 5. BEFORE THE ASSESSING OFFICER, THE ASSESSEE C ONTENDED THAT THE IMPUGNED LAND WAS AN AGRICULTURAL LAND AND HENCE THE PROFIT ARISING ON ITS SALE IS EXEMPT. HOWEVER, THE AO NOTICED THAT THE ASSESSEE DID NOT C ARRY ON ANY AGRICULTURAL ACTIVITY AND FURTHER THE LAND WAS SOLD WITHIN A SHO RT PERIOD. FURTHER SHRI N.A. BABY CONFIRMED THAT HE DID NOT CARRY ON ANY AGRICUL TURAL ACTIVITY ON THE ABOVE SAID LAND. IT WAS FURTHER NOTICED THAT THE NATURE OF THE PROPERTY AT THE TIME OF REGISTRATION WAS CHANGED INTO A BARREN LAND DUE TO REMOVAL OF EARTH UPTO THE ROCK BOTTOM. ACCORDINGLY, THE ASSESSING OFFICER TO OK THE VIEW THAT THE I.T.A. NO.266 /COCH/2012 3 TRANSACTION CAN ONLY BE CONSIDERED AS AN ADVENTURE IN THE NATURE OF TRADE. ACCORDINGLY, THE AO PROCEEDED TO COMPUTE THE PROFIT ARISING ON SALE OF AGRICULTURAL LAND CITED ABOVE. AS STATED EARLIER, THE AO DETERMINED THE SALE CONSIDERATION BY ADOPTING THE SELLING RATE AT RS.25 ,000/- PER CENT AND ADOPTED THE PURCHASE COST OF THE LAND AS PER THE CONVEYANC E DEED, I.E., THE AO REJECTED THE CLAIM OF THE ASSESSEE THAT THE LAND WAS PURCHAS ED AT HIGHER RATE OF RS.10,250/- PER CENT AND NOT AT THE RATE SHOWN IN T HE PURCHASE DEED. THE AO REJECTED THE SAID CLAIM ON THE REASONING THAT THERE IS NO CORROBORATING EVIDENCE TO SUPPORT THE CLAIM OF THE ASSESSEE AND FURTHER TH E ASSESSEE, IN HIS LETTER DATED 18-09-2010, HAD DISCLOSED THE PURCHASE COST OF THE LAND AT THE DOCUMENTED PRICE ONLY. 6. THE LD CIT(A) ALSO REJECTED THE SAID CLAIM OF TH E ASSESSEE WITH THE FOLLOWING OBSERVATION:- THE APPELLANT PLEADED THAT THE ASSESSING AUTHORITY HAS COMPUTED THE SALE PRICE AT RS. 25,000 PER CENT AND ARRIVED THE T OTAL SALE PRICE AT RS.1,14,56,250/- RELYING ON SHRI N.A. BABYS STATEM ENT WHEN THE REGISTERED SALE DEEDS DT 27.03.2008 SHOWN THE SALE CONSIDERATION AT RS.19,75,00/- ONLY. HOWEVER, THE ASSESSING OFFICER IS NOT GIVING ANY RELIEF ON THE COST OF ACQUISITION, WHICH HE HAS DEP OSED AT RS. 10,250 PER CENT. THE ASSESSING OFFICER HAS ARRIVED THE COST O F ACQUISITION AT RS.18,35,000/- PLUS COST OF STAMP DUTY, REGISTRATIO N CHARGES ETC. AMOUNTING TO RS. 2,20,206/- ONLY BASED ON THE SALE DEED EXECUTED ON 07.07.2007. THUS, THE APPELLANT MADE A PLEA THAT T HE ASSESSING AUTHORITY SHOULD HAVE ADOPTED UNIFORM BASIS. I HAV E CONSIDERED THE APPELLANTS PLEA AND FOUND THEM UNTENABLE FOR THE F OLLOWING REASONS. THE ASSESSING OFFICER HAS NOT ASSESSED THE SALE CON SIDERATIONS BASED ON SHRI N.A. BABYS DEPOSITION ALONE. DURING THE SEARC H, THE SALE AGREEMENT WAS DISCOVERED. SHRI N.A. BABY AND THE PURCHASERS H AVE ALSO DEPOSED THAT IT INDICATED THE ACTUAL CONSIDERATION. EVEN OT HERWISE, THE CONTENTS OF THESE DOCUMENTS ARE PRESUMED TO BE TRUE WITHIN T HE SCOPE OF SECTION 132(4) RW SECTION 292C OF THE ACT UNLESS OTHERWISE REBUTTED WITH COGENT MATERIALS. HOWEVER, THE SEARCH PARTY HAVE NEITHER FOUND NOR SEIZED ANY MATERIAL EVIDENCING THE COST OF ACQUISITION CANVASS ED BY THE APPELLANT. THE APPELLANT HAS NOT PROVED BEFORE ASSESSING OFFIC ER THAT HE HAS PAID SUCH CONSIDERATION. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES AND I.T.A. NO.266 /COCH/2012 4 POSITION OF LAW, THIS GROUND OF APPEAL IS UNTENABLE AND HENCE DISMISSED. AGGRIEVED, THE ASSESSEE IS CONTESTING THE ABOVE SAI D DECISION OF LD CIT(A). 7. THE LD COUNSEL APPEARING FOR THE ASSESSEE SU BMITTED THAT THE AO HAS PLACED RELIANCE ON THE SWORN STATEMENT GIVEN BY SHR I N.A. BABY FOR ADOPTING THE SELLING RATE AT RS.25,000/- PER CENT, WHERE AS THE AO HAS REFUSED TO ADOPT THE PURCHASE RATE AT RS.10,250/- AS DISCLOSED BY SHRI N .A. BABY IN THE VERY SAME SWORN STATEMENT. HE FURTHER SUBMITTED THAT THE AO WAS NOT JUSTIFIED IN PLACING RELIANCE ON THE SWORN STATEMENT PARTIALLY TO SUIT H IS CONVENIENCE. HE SUBMITTED THAT THE AO SHOULD HAVE CONSIDERED THE SWORN STATEM ENT IN TOTO AND SHOULD HAVE ADOPTED THE PURCHASE RATE AT RS.10,250/- AS STATED IN THE STATEMENT, SINCE THE SAID STATEMENT WAS GIVEN SPONTANEOUSLY BY SHRI N.A. BABY. HE FURTHER SUBMITTED THAT THE ADMISSION MADE IN THE SWORN STAT EMENT IS CONSIDERED AS HAVING EVIDENTIARY VALUE AS HELD BY HONBLE KERALA HIGH COURT IN THE CASE OF CIT VS. O. ABDUL RAZAK (2012)(207 TAXMAN 193)(KER); CIT VS. HOTEL MARIYA (2011)(332 ITR 537). HE FURTHER SUBMITTED THAT THE AO DID NOT BRING ANY MATERIAL ON RECORD TO DISPROVE THE PURCHASE RATE AS STATED BY SHRI N.A. BABY. HE FURTHER SUBMITTED THAT THE VIEW ENTERTAINED BY THE AO THAT THE PERMISSION OF RBI IS REQUIRED FOR MAKING INVESTMENT IN PURCHASE OF LA ND IS NOT CORRECT, AS THE ASSESSEE IS ONLY A NON RESIDENT INDIAN. 8. ON THE CONTRARY, THE LD D.R SUBMITTED THAT T HE DEPARTMENT HAS UNEARTHED MATERIAL IN THE FORM OF SALE AGREEMENT RELATING TO THE SALE OF LAND AND FURTHER THE SELLING RATE MENTIONED IN THE SALE AGREEMENT WA S CONFIRMED BY SHRI N.A. BABY AND ALSO THE BUYER OF THE LAND. HENCE THE AO HAS ADOPTED THE SELLING RATE OF THE LAND AT RS.25,000/- PER CENT BY PLACING RELI ANCE ON THE SALE AGREEMENT ONLY. ACCORDINGLY THE LD D.R SUBMITTED THAT THE AS SESSEE WAS NOT CORRECT IN STATING THAT THE AO HAD ADOPTED THE SELLING RATE ON THE BASIS OF SWORN STATEMENT. THE LD D.R FURTHER SUBMITTED THAT THE ASSESSEE ALSO DID NOT BRING ANY MATERIAL TO I.T.A. NO.266 /COCH/2012 5 PROVE THAT THE PURCHASE RATE OF THE LAND WAS RS.10, 250/- PER CENT AS STATED BY SHRI N.A. BABY. ACCORDINGLY, THE LD D.R SUBMITTED THAT THE AO WAS JUSTIFIED IN REJECTING THE SAID STATEMENT REGARDING PURCHASE RAT E IN THE ABSENCE OF ANY CORROBORATING MATERIAL. 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND CARE FULLY PERUSED THE RECORD. AS SUBMITTED BY LD D.R, WE NOTICE THAT THE SELLING RAT E WAS ADOPTED BY THE AO ON THE BASIS OF THE SALE AGREEMENT, WHICH WAS ALSO CON FIRMED BY SHRI N.A. BABY, THE CO-OWNER OF THE LAND AND ALSO BY SHRI A.A. DAVIS, O NE OF THE PURCHASERS OF THE LAND. HENCE, THE BASIS FOR ADOPTION OF SALES RATE AT RS.25,000/- PER CENT IS THE SALE AGREEMENT ONLY AND NOT THE SWORN STATEMENT, AS CONTENDED BY THE LD A.R. THOUGH THE PURCHASE RATE WAS STATED AS RS.10,250/- PER CENT BY SHRI N.A. BABY IN HIS SWORN STATEMENT, YET NO CORROBORATIVE MATERI AL WAS BROUGHT ON RECORD BY THE ASSESSEE TO SUBSTANTIATE THE SAID STATEMENT. T HERE SHOULD NOT BE ANY DISPUTE THAT THE RESPONSIBILITY TO PROVE THE PURCHA SE CONSIDERATION LIES UPON THE ASSESSEE IN THE FACTS AND CIRCUMSTANCES OF THE INST ANT CASE, SINCE THE ASSESSEE IS CLAIMING THAT THE APPARENT IS NOT REAL. THE ASSESSE E HAS PURCHASED THE LAND IN JUNE/JULY, 2007 AND HENCE THE SAID INVESTMENT FALLS IN THE FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR 2008-09, I.E., THE IMMEDIATE LY PRECEDING YEAR TO THE YEAR UNDER CONSIDERATION. IT IS NOT THE CASE OF THE ASS ESSEE THAT THE REVENUE HAS INITIATED ANY PROCEEDING FOR ASSESSING THE DIFFEREN CE IN PURCHASE CONSIDERATION, IN WHICH CASE, THE RESULT OF THE SAID ASSESSMENT MA Y BE HAVING EFFECT ON THE ISSUE UNDER CONSIDERATION. HENCE, IN OUR VIEW, THE LD CIT(A) WAS JUSTIFIED IN REJECTING THE CLAIM OF THE ASSESSEE FOR ENHANCING T HE PURCHASE CONSIDERATION. ACCORDINGLY, WE CONFIRM HIS ORDER ON THIS ISSUE. I.T.A. NO.266 /COCH/2012 6 10. IN THE RESULT, THE GROUNDS C, G AND F ARE D ISMISSED. PRONOUNCED ACCORDINGLY ON 27-12- 2013 SD/- SD/- (N.R.S.GANESAN) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 27TH DECEMBER, 2013 GJ COPY TO: 1. SHRI N.V. GEORGE, 25/180, GEO BHAVAN, CHALAKUDY, THRISSUR. 2. THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL C IRCLE, THRISSUR. 3. THE COMMISSIONER OF INCOME-TAX(APPEALS)-I, KOCHI . 4. THE COMMISSIONER OF INCOME-TAX, CENTRAL, KOCHI. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T, COCHIN