Smt. Veer Bala Agarwal, New Delhi V. ACIT, Meerut

ITA 2670/DEL/2010

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69682 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 6 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 04-12-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 03-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R S MEENA
• Keywords: Search and seizure; Fair market value; Valuation report; Revised return
• Section: 143(3); 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH H : NEW DELHI) SHRI U.B.S. BEDI, JUDICIAL MEMBER AND BEFORE SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NOS.2668, 2669 & 2670/DEL./2010 (ASSESSMENT YEARS : 2003-04, 2004-05 & 2005-06) SMT. VEER BALA AGARWAL, VS. ACIT, CENTRAL CIRCLE , W/O SHRI D.C. AGARWAL, MEERUT. A 242, GROUND FLOOR, NEW FRIENDS COLONY, NEW DELHI. (PAN : AEIPA3423R) CO NOS.52, 175 & 176/DEL/2011 (IN ITA NOS.2668, 2669 & 2670/DEL./2010) (ASSESSMENT YEARS : 2003-04, 2004-05 & 2005-06) ACIT, CENTRAL CIRCLE, VS. SMT. VEER BALA AGARWAL, MEERUT. W/O SHRI D.C. AGARWAL, A 242, GROUND FLOOR, NEW FRIENDS COLONY, NEW DELHI. (PAN : AEIPA3423R) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ANOOP SHARMA, ADVOCATE REVENUE BY : SHRI R.S. MEENA, CIT DR ORDER PER BENCH : ALL THESE APPEALS FILED BY THE ASSESSEE AND THE CRO SS OBJECTIONS FILED BY THE REVENUE EMANATE FROM THE THREE ORDERS OF THE CI T (APPEALS), MEERUT ALL DATED 26.03.2010. ITA NOS.2668, 2669 & 2670/DEL./2010 CO NOS.52, 175 & 176/DEL/2011 2 2. THE GROUNDS OF APPEAL IN ASSESSEES APPEALS ARE SAME, THEREFORE, THE GROUNDS OF APPEAL FOR ASSESSMENT YEAR 2003-04 ARE R EPRODUCED AS UNDER :- 1.(I) THE LD. C.LT. (A) HAS ERRED IN LAW AND ON FA CTS TO HOLD THAT PART OF PROPERTY NO.2, UNDERHILL ROAD, NEW DEL HI BELONGED TO THE ASSESSEE WAS PURCHASED AS RESIDENTIAL PROPER TY AND THAT ANOTHER PART OF THE SAME PROPERTY OWNED BY JAIN BRO THERS WAS AN INDEPENDENT COMMERCIAL PROPERTY. THE LD. CIT (A) HA S WRONGLY PRESUMED THAT PROPERTY OF JAIN BROTHERS WAS NOT ACQ UIRED BY DELHI ADMINISTRATION. (II) THE LD. C.LT. COMPLETELY IGNORED THE FACTS ELA BORATELY DISCUSSED BY THE AG IN THE ORDER U/S 143(3) THAT AG REEMENT FOR ENTIRE PROPERTY WAS MADE BETWEEN SHRI V.S.GARG (FAT HER OF ASSESSEE) & SHRI MADHO PRASAD JATIA (PREVIOUS OWNER ) AND THAT PROPERTY WAS REGISTERED IN THE NAME OF SMT. SHAKUNT LA GUPTA (MOTHER OF ASSESSEE) AND JAIN BROTHERS WHO FOR THE SPECIFIC PART OF PROPERTY WERE NOMINATED BY LATE SHRI V.S. GARG. (III) THE LD. CIT (A) IGNORED THE FACTS THAT CLAUSE 2 (PAGE 5) OF PURCHASE DEED DATED 7.5.1969 CLEARLY SHOWS THAT EVEN AT THE TIME OF PURCHASE, IN THE SAID PROPERTY; BUSINESS IN THE NAME 'GRAND HOTEL WEST' WAS CONTINUOUSLY RUN BY ASSESSEE 'S FATHER, LATE SHRI V.S.GARG. (IV) THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS BY GIVING DIFFERENT DECISION IN RESPECT OF PART OF PROPERTY O WNED BY THE ASSESSEE AND DIFFERENT DECISION FOR THE PART OF SAM E PROPERTY OWNED BY JAIN BROTHERS IN APPEAL NOS.474 TO 477/06- 07 DECIDED ON 20.11.09. 2. THE LD. C.I.T. (A) HAS ERRED IN LAW AND ON FACTS BY NOT APPRECIATING THAT: (I) PAGES 19 TO 32 OF PAPER BOOK FILED BEFORE HIM ON 4.2.2009 SHOW THAT 'GRAND HOTEL' WAS RUN IN THE PAR T OF PROPERTY OWNED BY ASSESSEE AND THAT ON PAGES 21-22' NAME OF ASSESSEE'S FATHER (V.S.GARG) IS CLEARLY MENTIONED. ITA NOS.2668, 2669 & 2670/DEL./2010 CO NOS.52, 175 & 176/DEL/2011 3 (II) INFORMATION COLLECTED UNDER R.T.I. ACT SHOW T HAT HOUSE TAX ON PROPERTY IN QUESTION WAS CHARGED BY THE MCD AT COMMERCIAL RATE.(PGS; 33-36 OF P. BOOK) (III) PROPERTY WAS ACQUIRED BY WILL AND IN VIEW OF SECTION 49(1)/55(2) (B) (II) COST AS ON 1.4.1981 @ RS.2049. 77/SQ.YD. AS PER VALUATION REPORT DATED 25.07.2007.; SEIZED PAGE S 139-143 OF ANNEXURE L-16 (PGS: 14-18 OF PAPER BOOK); WAS DEDUC TIBLE TO COMPUTE THE CAPITAL GAIN UNDER THE I.T. ACT (IV) AS SUBMITTED BY APPELLANT DURING COURSE OF AP PELLATE PROCEEDINGS; AS PER SETTLED LAW WHEN THERE ARE SPEC IFIC PROVISIONS; NEITHER ASSESSEE NOR THE DEPTT; CAN ADO PT ANY OTHER METHOD/BASIS FOR COMPUTING INCOME OR LEVY OF TAX -P ENALTY UNDER THE I.T.ACT. 3. ANY OTHER GROUND AS MAY AROSE OUT OF CIT'S (A) O RDER DATED 26-03-2010. IN THE CROSS OBJECTIONS ALSO, THE GROUNDS IN REVENU ES APPEALS ARE SAME, THEREFORE, THE GROUNDS IN THE CROSS OBJECTION FOR A SSESSMENT YEAR 2003-04 READ AS UNDER :- 1. THAT AS FAR AS THE CASE OF SHRI. VIPIN JAIN, SH RI. PRADEEP JAIN AND OTHERS ARE CONCERNED, THE PROPERTY WAS ACQ UIRED BY THEM IN THE YEAR 1968 AND ON THE SALE OF IT. CAPITA L GAINS WERE SHOWN ON THE BASIS OF VALUATION REPORT IN WHICH THE PROPERTY WAS STATED TO BE COMMERCIAL BUILDING,. THEY WERE PAYING HOUSE-TAX BILL ISSUED SINCE THE BEGINNING BY THE MUNICIPAL CO RPORATION, DEED WAS EXECUTED AS COMMERCIAL COMPLEX, THE MUNICI PALITY HAS DECIDED THE LAND USE AND CHARGED TAX ACCORDINGLY AS COMMERCIAL COMPLEX AND AS PER DELHI GOVERNMENT LAND AND D.O. DEPARTMENT THE VALUE OF COMMERCIAL LAND IN THE AREA AS ON 01.04.1982 WAS RS. 2,400 PER SQ. YARDS. 2. THAT THE BASIC DIFFERENCE BETWEEN THE CASE OF SH RI. VIPIN KUMAR JAIN AND MRS. VEER BALA AGGARWAL IS THAT SHRI . VIPIN JAIN AND OTHERS WERE ENJOYING THE RIGHTS OF COMMERC IAL LAND AND MAKING PAYMENTS FOR TAXES INCLUDING TAXES ON EXECUT ION OF SALE ITA NOS.2668, 2669 & 2670/DEL./2010 CO NOS.52, 175 & 176/DEL/2011 4 DEED ON THAT BASIS WHILE MRS. VEER BALA AGGARWAL HA S ACQUIRED THE LAND AS RESIDENTIAL PROPERTY. THIS SOLE DIFFERE NCE HAS LEAD THE A.O. TO TAKE THE VALUE OF RESIDENTIAL LAND AT RS. 5 33 PER SQ. YARDS. 3. THAT THE APPELLANT HAD HERSELF DISCLOSED THE FAR E MARKET VALUE AT RS.533/- PER SQD, YD. ON THE BASIS OF SALE DEED DATED 15.06.81, IN HER ORIGINAL RETURN FILED FOR THE ASSE SSMENT YEAR 2003-04 WHICH IS PRIOR TO SEARCH PERIOD WHEREAS IN THE REVISED RETURN U/S L53A OF THE INCOME TAX ACT, 1961, SHE HA S ADOPTED THE FAIR MARKET VALUE AT RS.2049.77 PER SQ. YD. WHI CH RESULTED THE TOTAL INCOME OF THE ASSESSEE REDUCED TO LESS TH AN THE INCOME DISCLOSED IN THE ORIGINAL RETURN AND WHICH AS PER L AW IS NOT PERMISSIBLE AS THE SAME IS CLEARLY HELD BY THE DECI SIONS OF HON'BLE ITA T IN THE CASE OF MR. CHARCHIT AGGARWAL (2009) 34 SOT 348 (DEL.) AND M/S SUNCITY ALLOYS (P) LTD. (200 9) 124 TTJ 674 (JODHPUR). ALL THESE APPEALS AND CROSS OBJECTIONS ARE BEING DI SPOSED OFF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. 3. THE MAIN CONTROVERSY INVOLVED IN THESE APPEALS I S WITH REGARD TO THE COMPUTATION OF THE CAPITAL GAINS BY ADOPTING THE FA IR MARKET VALUE AS ON 01.04.1981. 4. BRIEF FACTS OF THE CASE ARE AS UNDER. THE ASSES SEE IS AN INDIVIDUAL. A SEARCH AND SEIZURE OPERATION WAS CARRIED OUT ON 04. 10.2004. SHE FILED THE ORIGINAL RETURNS OF INCOME IN WHICH THE CAPITAL GAI NS WERE WORKED OUT BY TAKING FAIR MARKET VALUE @ RS.533/- PER SQ.YD. ON T HE BASIS OF A SALE DEED DATED 15.06.1981. A SEARCH AND SEIZURE OPERATION WA S CARRIED OUT ON 04.10.2004. SHE REVISED THE RETURN FOR ASSESSMENT YEARS 1999-2000 TO 2003- 04 AND ALSO FILED RETURN FOR ASSESSMENT YEARS 2004- 05 AND 2005-06. A ITA NOS.2668, 2669 & 2670/DEL./2010 CO NOS.52, 175 & 176/DEL/2011 5 STATEMENT U/S 134 OF THE INCOME-TAX ACT, 1961 WAS R ECORDED WHERE SHE HAS DECLARED RS.45.50 LACS FOR ASSESSMENT YEAR 2003-04 BEING CASE RECEIVED OVER AND ABOVE THE SALE CONSIDERATION OF RS.7.50 LACS SH OWN IN THE TWO SALE DEEDS EXECUTED IN THE NAME OF SHRI SATPAL SHARMA IN RESPE CT OF ROOM NO.3 & 32 OF PROPERTY NO.2, UNDER HILL ROAD, DELHI AND SHE ALSO ADMITTED THAT OVER AND ABOVE THE SALE CONSIDERATION SHOWN AT RS.45 LACS, C ASH AMOUNTING TO RS.1.80 CRORE WAS RECEIVED FROM SHRI SANJEEV AGARWAL TO WHO M ROOM NOS.4 TO 8 AND 29 OF THE SAME PROPERTY WERE SOLD VIDE TWO SALE DEE DS IN THE MONTHS OF SEPTEMBER, 2004. THE ASSESSEE ACQUIRED PROPERTY NO .2, UNDER HILL ROAD, DELHI WHICH WAS SOLD BY VIRTUE OF REGISTERED WILL O F HER MOTHER, SMT. SHAKUNTLA GUPTA. IN THE ORIGINAL RETURN, FAIR VALUE AS ON 01.04.1981 FOR WORKING OUT CAPITAL GAIN WAS ADOPTED AT RS.533/- PE R SQ.YARD ON THE BASIS OF REGISTERED SALE DEED DATED 15.06.1981 IN RESPECT OF THE PROPERTY IN THE SURROUNDING AREAS. THE NATURE OF PROPERTY WAS SHOW N AS RESIDENTIAL. IN THE REVISED RETURN FILED U/S 153A, THE WORKING OF CAPIT AL GAIN WAS DONE BY TAKING THE RATE ADOPTED @ RS.2,049.77 PER SQ.YARD AS ON 01 .04.1981. THE ASSESSEE CLAIMS THAT THE RATE APPLICABLE @ RS.533/- PER SQ.Y ARD FOR WORKING OUT THE CAPITAL GAIN WAS ONLY DUE TO LACK OF KNOWLEDGE. 5. WHILE PLEADING ON BEHALF OF THE ASSESSEE LEARNED AR SUBMITTED THAT THE PROPERTY WHICH WAS SOLD BY THE ASSESSEE WAS A COMME RCIAL PROPERTY IN WHICH THE HOTEL BUSINESS WAS CARRIED OUT SINCE LONG BACK. THIS PROPERTY WAS TAKEN BY ITA NOS.2668, 2669 & 2670/DEL./2010 CO NOS.52, 175 & 176/DEL/2011 6 THE DELHI ADMINISTRATION ON 03.04.1980 UNDER THE AC QUISITION OF IMMOVABLE PROPERTY ACT, 1952 AND IT HAS BEEN REVERTED BACK TO THE ASSESSEE ONLY ON 11.11.2002 BY AN ORDER OF HON'BLE SUPREME COURT. TH US, PROPERTY DURING THAT PERIOD WAS IN COMMERCIAL USE BY THE DELHI ADMINISTR ATION. THE ASSESSING OFFICER DID NOT AGREE WITH THE RATES ADOPTED OF RS. 2049.77 PER SQ.YD. AS ON 01.04.1981 THEN IT SHOULD HAVE BEEN REFERRED TO DEP ARTMENT VALUER. HE FURTHER SUBMITTED THAT INFORMATION UNDER THE RTI FROM THE M CD IN RESPECT OF THE PROPERTY NO.2, UNDER HILL ROAD, DELHI WAS RECEIVED IN WHICH THE PROPERTY TAX IN RESPECT OF THE SAID PROPERTY WAS CHARGED AT COMM ERCIAL RATES SINCE 1969. HE ALSO SUBMITTED THAT COMPARATIVE SALE DEEDS WERE ALSO FURNISHED OF THE NEARBY AREAS TO JUSTIFY THE RATES ADOPTED BY THE AS SESSEE IN THE REVISED RETURN. LD. AR FURTHER SUBMITTED THAT CIT (A) HAS GIVEN DIF FERENT DECISION IN RESPECT OF THE PART PROPERTY AS IN THE CASE OF JAIN BROTHER S IN ITS APPEAL NO.474, 475, 476 AND 477/06-07 DATED 20.11.2009. 6. ON THE OTHER HAND LD. DR RELIED ON THE AUTHORITI ES BELOW AND ALSO SUBMITTED THAT THIS PROPERTY IS SITUATED IN CIVIL L INES AREA, DELHI. THE ASSESSEE HIMSELF ADOPTED RS.533 PER SQ.YD. IN THE O RIGINAL RETURN OF INCOME BY STATING THAT THE USE OF THE PROPERTY AS RESIDENTIAL . WHEN THE SEARCH TOOK PLACE AND THE CASH WAS FOUND AT THE PREMISES OF THE ASSES SEE WHICH WAS DISCLOSED AND OM MONEY TAKEN ON THE SALE OF THE PROPERTY AND A REVISED RETURN WAS FILED IN RESPONSE TO SECTION 153A WHEREIN THE RATE FOR WO RKING OUT FAIR MARKET ITA NOS.2668, 2669 & 2670/DEL./2010 CO NOS.52, 175 & 176/DEL/2011 7 VALUE AS ON 01.04.1981 WAS ENHANCED TO RS.2049.77 P ER SQ.YD . WHICH IS CLEARLY A DEVICE NOT TO PAY THE TAX ON THE UNACCOUNTED MONEY FOUND A T THE RESIDENCE OF THE ASSESSEE. HE FURTHER SUBMITTED THA T THE ASSESSEE CANNOT RELY ON THE OTHER PROPERTY IN THE NAME OF JAIN BROTHERS BECAUSE IN ASSESSEES CASE IT WAS A RESIDENTIAL PROPERTY. FURTHER THIS PROPERT Y WAS ACQUIRED BY DELHI ADMINISTRATION FROM 03.04.1980. IN SUCH A SITUATION , THE FAIR MARKET VALUE AS ON 01.04.1981 MUST HAVE BEEN DEPRESSED ONE. THE ASS ESSEE HAS FAILED TO ESTABLISH THAT THIS PROPERTY WAS COMMERCIAL IN THE MUNICIPAL RECORDS. ALL THE EVIDENCES SUBMITTED BY THE ASSESSEE WERE ONLY SUGGE STING THAT IT WAS USED AS A HOTEL BUT WHETHER THE LAND WAS FOR COMMERCIAL USE OR RESIDENTIAL IS NOT ESTABLISHED. THE REGISTERED SALE DEED FOR PURCHASE OF THE IMPUGNED PROPERTY IN 1968 SHOWS THAT IT WAS A RESIDENTIAL. IN VIEW OF TH ESE FACTS, THE RATES ADOPTED BY THE ASSESSEE WERE COMPLETELY UNJUSTIFIED. 7. WE HAVE HEARD BOTH THE SIDES ON THIS ISSUE. THE ASSESSEE HAS SUBMITTED THE EVIDENCE THAT IT WAS USED AS A HOTEL PRIOR TO T HE ACQUISITION BY THE DELHI GOVERNMENT. NO RECORDS HAVE BEEN FILED WHETHER THIS PROPERTY WAS RESIDENTIAL OR COMMERCIAL IN THE MUNICIPAL RECORDS. LAND VALUE OF ANY PROPERTY DEPENDS ON THE TYPE OF ACTIVITIES ARE PERMISSIBLE ON THAT L AND. PURE COMMERCIAL LAND SHALL BE OF HIGHER PRICE THAN USE OF RESIDENTIAL TO COMMERCIAL. AS STATED, DURING THE ASSESSMENT PROCEEDINGS, THE BUILDING WAS IN DILAPIDATED CONDITION, THEREFORE THE VALUE OF THE LAND AS ON 01.04.1981 HA S TO BE WORKED OUT MAINLY ITA NOS.2668, 2669 & 2670/DEL./2010 CO NOS.52, 175 & 176/DEL/2011 8 ON THE BASIS OF LAND UNDERNEATH. IN OUR CONSIDERED VIEW, IN SUCH A SITUATION LIKE THIS, IT WOULD BE BETTER TO HAVE AN EXPERT ASS ISTANCE TO THE HELP OF ASSESSING OFFICER WHO MAY OTHERWISE BE NOT IN A POS ITION TO COUNTER OR DISLODGE THE CLAIM REGARDING THE FAIR MARKET VALUE PARTICULARLY WHEN IT WAS BACKED BY REPORT OF VALUER. IN THE INTEREST OF JUST ICE AND EQUITY, WE FIND IT APPROPRIATE TO REMIT THE ISSUE TO THE FILE OF THE A SSESSING OFFICER FOR OBTAINING A VALUATION REPORT AS PER SECTION 55A OF THE INCOME -TAX ACT, 1961 TO ARRIVE AT A FAIR AND REASONABLE RATE AS ON 01.04.1981 IN RESP ECT OF THE PROPERTY WHICH HAS BEEN SOLD BY THE ASSESSEE DURING THE FINANCIAL YEAR RELEVANT TO ASSESSMENT YEAR UNDER CONSIDERATION. THEREFORE, WE SET ASIDE T HE ORDERS OF THE AUTHORITIES BELOW AND RESTORED THE ISSUE TO THE FILE OF THE ASS ESSING OFFICER. 8. AS WE HAVE ALREADY SET ASIDE THE ORDERS OF THE A UTHORITIES BELOW AND RESTORED THE ISSUE TO THE FILE OF THE ASSESSING OFF ICER, THE CROSS OBJECTIONS FILED BY THE REVENUE HAVE BECOME INFRUCTUOUS. ACCOR DINGLY THE CROSS OBJECTIONS ARE DISMISSED AS INFRUCTUOUS. 9. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE A LLOWED FOR STATISTICAL PURPOSES AND THE CROSS OBJECTIONS FILED BY THE REVE NUE ARE DISMISSED AS INFRUCTUOUS. ORDER PRONOUNCED IN OPEN COURT ON THIS 20 TH DAY OF DECEMBER, 2013. SD/- SD/- (U.B.S. BEDI) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 20 TH DAY OF DECEMBER, 2013/TS ITA NOS.2668, 2669 & 2670/DEL./2010 CO NOS.52, 175 & 176/DEL/2011 9 COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A), MEERUT. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.