Shri Kailash Agarwal, F-281, Road No.13, VKI Area, jaipur, VKI Area, Jaipur V. Income Tax Officer Ward-4(2), Jaipur, Ward-4(2), Jaipur

ITA 268/JPR/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 8442 (ITAT-JAIPUR)
• Duration Of Justice: 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 27-02-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K C GUPTA
• Assessee Lawyers: C L YADAV
• Keywords: Unexplained cash credit; Sale consideration of property below Jantri Value; Capital asset; Cost of acquisition; Fair market value; Set aside; Capital Gains
• Section: 50C; 201; 2

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENC HES B JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRA M SINGH YADAV, AM VK;DJ VIHY LA- @ ITA NO. 268/JP/2019 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR :2010-11 SH. KAILASH AGARWAL F-281, ROAD NO. 13, VKI AREA, JAIPUR. CUKE VS. THE ITO, WARD-4(2), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: ADVPA 5826 E VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI C.L.YADAV (CA) JKTLO DH VKSJ LS @ REVENUE BY : SHRI K. C. GUPTA (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 08/01/2020 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT:13/01/2020 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A)-2, JAIPUR DATED 20.12.2018 FOR THE ASSESSMENT YEAR 201 0-11 WHEREIN THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL: - 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION OF RS. 2,50,313/- ON ACCOUNT OF SHORT TERM CAPITAL GAIN. 2. THE LD. AO GROSSLY ERRED IN LAW AND FACTORS THE PROVISIONS OF SUB- SECTION 2 OF SECTION 50C OF THE INCOME TAX, 1961 TO REFER THE MATTER TO VALUATION OFFICER AND THE LD. CIT(A) ALSO GROSSLY I GNORED THE FACTS AND LAW. 3. THE LD. CIT(A) GROSSLY ERRED IN LAW AND FACTS IN CONFIRMING THE ADDITION OF RS. 2,00,000/- AS AN UNEXPLAINED CASH DEPOSIT. ITA NO. 268/JP/2019 SH. KAILASH AGARWAL VS. ITO 2 2. REGARDING GROUNDS NO. 1 AND 2, THE LD AR TOOK US THROUGH THE FINDINGS OF THE ASSESSING OFFICER WHICH READS AS UNDER:- 6.1 INCOME FROM SHORT TERM CAPITAL GAINS:- THE ASS ESSEE HAS SOLD PLOT NO. 23, GIRDHAR COLONY, YOGANA, MAHAPURA ALIAS KUKA RKHEDA, SIKAR ROAD, JAIPUR FOR A SALE CONSIDERATION OF RS. 8,00,000/- D URING THE F.Y. 2009-10 I.E. PERIOD RELEVANT TO THE A.Y. 2010-11. THE SUB R EGISTRAR-V, JAIPUR HAS ADOPTED THE FINAL FACE VALUE OF THIS LAND AT RS. 1 0,30,213/- AND CHARGED STAMP DUTY ACCORDINGLY. THE CASE ATTRACTS P ROVISIONS OF SECTION 50C WHICH WERE INTRODUCED BY THE FINANCE AC T, 2002 W.E.F. 1-4-2003. THE RELEVANT PROVISIONS OF SECTION 50C RE ADS AS UNDER:- 50C. SPECIAL PROVISION FOR FULL VALUE OF CONSIDERAT ION IN CERTAIN CASES.- (1) WHERE THE CONSIDERATION RECEIVED OR ACCRUING AS A R ESULT OF THE TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET, BEING LAND OR BU ILDING OR BOTH, IS LESS THAN THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY ANY AUTHORITY OF A STATE GOVERNMENT (HEREAFTER IN THIS SECTION REFERRE D TO AS THE 'STAMP VALUATION AUTHORITY') FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THE VALUE SO ADOPTED OR ASSESSED OR ASSESSABLE SHALL, FOR THE PURPOSES OF SECTION 48, BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF S UCH TRANSFER. THUS, SECTION 50 C OF THE INCOME-TAX ACT, 1961 PROV IDES THAT WHERE THE CONSIDERATION RECEIVED OR ACCRUING AS A R ESULT OF THE TRANSFER OF LAND OR BUILDING OR BOTH IS LESS THAN T HE VALUE ADOPTED OR ASSESSED BY ANY AUTHORITY OF A STATE GOVERNMENT FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THE VALUE SO ADOPTED OR ASSESSED SHALL BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION AND CAPITAL GAINS SHALL BE COM PUTED ACCORDINGLY. IN THE PRESENT CASE THE SUB REGISTRAR HAS ADOPTED THE FINAL FACE VALUE AT RS. 10,30,213/-. THE ASSESSEE W AS SHOW CAUSED ITA NO. 268/JP/2019 SH. KAILASH AGARWAL VS. ITO 3 AS TO WHY THE SALE VALUE MAY NOT BE ADOPTED AT RS. 10,30,213/-. THE REPLY FURNISHED BY THE ASSESSEE IS AS UNDER:- (7) THE ASSESSEE HAS PURCHASED THE HOUSE IN 05.11.2 007 IN RS. 738940/ THE PURCHASES VALUE RS. 661000/ STAMP DUTY RS. 57840/ & BROKERAGE PAID RS. 20100/ TO GYAN CHAND SAMLANI TOT AL COST OF HOUSE IS RS. 738940/ & SALE CONSIDERATION AMOUNT RS . 800000/ SHORT TERM CAPITAL GAIN RS. 61060/ WHICH IS SHOWN I N LTR AS PER VAULE OF 50C THE SALE PROCEEDS VALUE RS. 10302013/ WHICH IS SHOWN WRONG BECAUSE THAT TIME MARKET VALUE WAS MAXIMUM RS . 800000/ ONLY BECAUSE PURCHASES TIME REGISTRY MADE WITH CONS TRUCTION RS. 661000/ & AFTER 33 MONTH THE REGISTRY MADE RS. 8000 00/ WHICH WAS ONLY PLOT THE CONSTRUCTION HAS BROKEN THEREFORE THE MARKET VALUE WAS THAT YEAR RS.800000/-. THE REPLY FILED BY THE ASSESSEE HAS BEEN EXAMINED. IT IS NOTICED THAT NO EVIDENCE HAS BEEN FURNISHED IN SUPPORT OF H IS CONTENTION THAT THE MARKET VALUE OF THE PLOT WAS RS. 8,00,000/ - ONLY. THE SUB REGISTRAR HAS ADOPTED THE MARKET VALUE AT RS. 1 0,30,213/-. IT HAS NOT BEEN STATED THAT THE VALUATION ADOPTED B Y THE SUB REGISTRAR HAS BEEN APPEALED EITHER BY THE ASSESSEE OR THE PURCHASER, WHICH CLEARLY INDICATES THAT THE VALUED ADOPTED BY THE SUB REGISTRAR HAS BEEN DULY ACCEPTED BY THE ASSESSE E AS WELL AS THE PURCHASER. CONSIDERING THE SAME AND THE EXISTIN G PROVISIONS OF SECTION 50C OF THE INCOME-TAX, 1961 THE SALE VALUE IS THUS ADOPTED AT RS. 10,30,213/-. THE ASSESSEE HAS CLAIMED THE COST OF ACQUISITION OF THIS PROPERTY AT RS. 7,38,940/- WHICH INCLUDES PURCHASE VALUE RS. 6, 61,000/-, STAMP DUTY RS. 57,840/-AND BROKERAGE PAID RS. 20,100/-. E VIDENCE IN SUPPORT OF DEDUCTION CLAIMED ON ACCOUNT OF BROKERAG E HAS NOT BEEN FILED AND THUS THE SAME CANNOT BE ALLOWED. THUS, TH E COST OF ACQUISITION / PURCHASE COST (ALSO PROPOSED IN THE F INAL SHOW CAUSE ITA NO. 268/JP/2019 SH. KAILASH AGARWAL VS. ITO 4 NOTICE DATED 03.11.2017) IS ADOPTED AT RS. 7,18,840/-. THE SHORT TERM CAPITAL GAIN ARISING ON SALE OF THIS PROPERTY WORKS OUT TO RS. 3,11,373/- (10,30,213 7,18,840). THE SHORT TERM C APITAL GAIN ARISING ON SALE OF PLOT NO. 23, GIRDHAR COLONY, YOJ ANA, MAHAPURA ALIAS KUKARKHEDA, SIKAR ROAD, JAIPUR IS THUS ASSESSED AT RS. 3,11,373/-. 3. FURTHER, THE LD. AR TOOK US THROUGH THE FINDINGS OF THE LD. CIT(A) WHICH READS AS UNDER:- 2.3 I HAVE PERUSED THE FACTS OF THE CASE, THE ASSE SSMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT. DURING THE YE AR, ASSESSEE SOLD A PLOT FOR RS. 8,00,000/- WHICH WAS VALUED BY SUB-REG ISTRAR AT RS. 10,30,213/-. AFTER REDUCING THE TOTAL COST AT RS. 7 ,38,940/-, THE ASSESSEE DECLARED SHORT TERM CAPITAL GAIN. ASSESSING OFFICER MADE THE ADDITION ON ACCOUNT OF DIFFERENCE BETWEEN SALE AND VALUE TAKEN BY SUB-REGISTRAR AS PER SECTION 50C AND DISALLOWED BROKERAGE EXPENSE OF RS. 20,100/-. THE ASSESSEE REITERATED HIS STANCE TAKEN BEFORE THE ASS ESSING OFFICER DURING APPELLANT PROCEEDINGS. 2.3.1. SINCE SECTION 50C IS MANDATORY, THEREFORE, A SSESSING OFFICER RIGHTLY ADOPTED VALUE AT RS. 10,30,213/- UNDER SECTION 50C WHICH IS UPHELD. NO EVIDENCE WAS FILED REGARDING CLAIM OF BROKERAGE EXP ENSE, THEREFORE, THIS ADDITION IS ALSO UPHELD. THIS GROUND OF APPEAL IS D ISMISSED. 4. IT WAS SUBMITTED BY THE LD AR THAT THE ASSESSEE HAS OBJECTED TO THE VALUATION ADOPTED BY THE STAMP DUTY AUTHORITY BEFOR E THE AO AND THEREFORE, THE MATTER SHOULD HAVE BEEN REFERRED BY THE AO TO T HE DVO FOR DETERMINATION OF FAIR MARKET VALUE. SINCE THE ASSESSING OFFICER H AS NOT REFERRED THE MATTER TO THE DVO, THE MATTER MAY BE SET ASIDE TO THE FILE OF THE ASSESSING OFFICER FOR DETERMINATION OF FAIR MARKET VALUE. ITA NO. 268/JP/2019 SH. KAILASH AGARWAL VS. ITO 5 5. PER CONTRA, THE LD. DR RELIED ON THE FINDINGS O F THE ASSESSING OFFICER AND SUBMITTED THAT THE ASSESSEE HAS NOT MADE ANY SPECIF IC REQUEST FOR REFERENCE OF THE MATTER TO THE DVO. THEREFORE, IN ABSENCE THEREO F, THE ASSESSING OFFICER WAS NOT REQUIRED TO REFER THE MATTER TO THE DVO. HE ACCORDINGLY SUPPORTED THE FINDINGS OF THE ASSESSING OFFICER. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSESSEE HAS SOLD A PLOT OF LAND FOR A CONSIDERATION OF RS. 8,00,000/- WHEREAS THE REGISTERING AUTHORITY HAS CO NSIDERED THE SALE VALUE AT RS. 10,30,213/- FOR THE PURPOSE OF STAMP DUTY. DUR ING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ISSUED A S HOW CAUSE NOTICE AND IN RESPONSE, THE ASSESSEE OBJECTED TO THE STAMP DUTY V ALUATION OF RS. 10,30,213/- AND REQUESTED TO ADOPT VALUE OF RS. 8,00,000/- AS P ER THE SALE REGISTRY. THEREFORE, WHERE THE ASSESSEE HAS OBJECTED TO THE S TAMP DUTY VIOLATION, AS PER THE PROVISIONS OF SECTION 50C(2) OF THE ACT, THE MA TTER SHOULD HAVE BEEN REFERRED BY THE ASSESSING OFFICER TO THE DVO FOR DE TERMINATION OF FAIR MARKET VALUE. IN THE INSTANT CASE, AS THE MATTER HAS NOT B EEN REFERRED TO THE DVO, WE DEEM IT APPROPRIATE TO SET ASIDE THE MATTER TO FILE OF THE ASSESSING OFFICER FOR REFERRING TO DVO TO DETERMINE THE FAIR MARKET VALUE OF THE LAND IN QUESTION AND DECIDED AS PER LAW. IN THE RESULT, THE GROUNDS OF A PPEAL ARE ALLOWED FOR STATISTICAL PURPOSES. 7. IN GROUND NO. 3, THE ASSESSEE HAS CHALLENGED THE SUSTENANCE OF ADDITION OF RS. 2,00,000/- AS UNEXPLAINED CASH CREDIT WHICH WAS DEPOSITED BY THE ASSESSEE IN HIS BANK ACCOUNT ON 27.01.2010 MAINTAIN ED WITH PUNJAB NATIONAL BANK. DURING THE COURSE OF HEARING, THE AR SUBMITTE D THAT THE CASH FLOW STATEMENT WAS SUBMITTED BY THE ASSESSEE BEFORE THE LOWER AUTHORITIES AND IT WAS SUBMITTED, ON PERUSAL OF THE SAID CASH FLOW STA TEMENT, IT IS CLEAR THAT THE ASSESSEE WAS HAVING SUFFICIENT BALANCE AS ON THE DA TE OF DEPOSIT OF CASH IN THE PUNJAB NATIONAL BANK ACCOUNT AND SOURCE THEREOF WAS EARLIER WITHDRAWALS MADE BY THE ASSESSEE FROM THE BANK ITSELF. ITA NO. 268/JP/2019 SH. KAILASH AGARWAL VS. ITO 6 8. PER CONTRA, THE LD. DR IS HEARD WHO HAS SUBMITTE D THAT SINCE THE ASSESSEE WAS CARRIED ON THE CONSTRUCTION ACTIVITIES , IT IS LIKELY THAT THE WITHDRAWAL SO MADE BY THE ASSESSEE FROM THE BANK WA S UTILIZED FOR CONSTRUCTION ACTIVITIES AND NOT NECESSARY AVAILABLE FOR RE-DEPOSIT IN HIS BANK ACCOUNT. HE ACCORDINGLY SUPPORTED THE ORDER OF THE LOWER AUTHORITIES. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ON PERUSAL OF THE CASH FLOW STATEMENT, WE FIND THAT THE ASSESSEE WAS HAVING SUFFICIENT CASH BALANCE OF RS 471,470 AS ON THE DATE OF DEPOSIT OF RS. 2,00,000/- IN HIS BANK ACCOUNT AND REGARDING WI THDRAWALS FOR MEETING CONSTRUCTION EXPENDITURE, WE FIND THAT THERE WERE W ITHDRAWALS TO THE TUNE OF RS 480,000 PRIOR TO DATE OF SUCH DEPOSIT AND SUBSEQUEN T WITHDRAWALS FROM THE BANK TO THE TUNE OF RS 640,000 WHICH WERE AVAILABLE FOR MEETING THE CONSTRUCTION EXPENDITURE. THEREFORE, THE EXPLANATI ON SO OFFERED BY THE ASSESSEE THAT DEPOSIT SO MADE IN THE BANK ACCOUNT I S OUT OF EARLIER WITHDRAWALS FROM HIS BANK APPEARS TO BE BONAFIDE WHICH IS HEREB Y ACCEPTED. IN THE RESULT, GROUND OF APPEAL IS ALLOWED. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISPOSED O FF IN LIGHT OF ABOVE DIRECTIONS. ORDER PRONOUNCED IN THE OPEN COURT ON 13/01/2020. SD/- SD/- FOT; IKY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 13/01/2020 *SANTOSH. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SH. KAILASH AGARWAL, JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- THE ITO, WARD-4(2), JAIPUR. 3. VK;DJ VK;QDR@ CIT ITA NO. 268/JP/2019 SH. KAILASH AGARWAL VS. ITO 7 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 268/JP/2019} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR