Jagadish Ravikumar, CHENNAI V. ITO Non Corp. Ward 7(3), CHENNAI

ITA 2809/CHNY/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 4455 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 01-10-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: MRS S JAYASHREE
• Keywords: Sale consideration of property below Jantri Value; Salary income; Opportunity of being heard
• Section: 143(1)

Judgement Text

, , IN THE INCOME-TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . , . , BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER & SHRI DUVVURU RL REDDY, JUDICIAL MEMBER ./ I.T.A.NO.2809/CHNY/2018 / ASSESSMENT YEAR: 2014-15 SHRI JAGADISH RAVIKUMAR, NO. 26/10A, OLD POST OFFICE ROAD, NEW COLONY, CHENNAI 600 076. [PAN: ACTPR8094C] VS. THE INCOME TAX OFFICER, NON CORPORATE WARD 7(3), CHENNAI. ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MRS. S. JAYASHREE, C.A. / RESPONDENT BY : SHRI SRIDHAR DORA, JCIT / DATE OF HEARING : 26.02.2019 /DATE OF PRONOUNCEMENT : 22.03.2019 / O R D E R PER DUVVURU RL REDDY, JUDICIAL MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) 7, CHENNAI, DATED 29.06.2018 RELEVANT TO THE ASSESSMENT YEAR 2014-15. IN THE GROUNDS OF APPEAL, THE ASSESSEE MAINLY CHALLENGED THE CONFIRMATION OF ADDITION OF .12,50,000/- BY INVOKING THE PROVISIONS OF SECTION 56(2)(VII)(B)(II) OF THE INCOME TAX ACT, 1961 [ACT IN SHORT]. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND INVOLVED IN THE BUSINESS OF BUILDING CONSTRUCTION. THE ASSESSEE IS A PARTNER I.T.A. NO. 2809/CHNY/18 2 IN THE PARTNERSHIP FIRM P.C. CONSTRUCTION AND ALSO DERIVING SALARY INCOME FROM CHANDINI CONSTRUCTIONS. THE ASSESSEE FILED THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2014-15 ON 02.12.2014 ADMITTING A TOTAL INCOME OF .3,93,670/-. THE RETURN FILED BY THE ASSESSEE WAS PROCESSED UNDER SECTION 143(1) OF THE ACT. THEREAFTER, THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY UNDER CASS FOR THE REASON TRANSACTIONS WITH PERSON(S) LOCATED IN A JURISDICTION NOTIFIED IN SECTION 94A. ON PERUSAL OF THE DETAILS FILED AGAINST STATUTORY NOTICES, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE ALONG WITH SHRI J. GOPALAKRISHNAN HAS PURCHASED A RESIDENTIAL PROPERTY AT NO. 103/77, SOUTH MADA STREET, VILLIVAKKAM, CHENNAI 600 049 FOR A SUM OF .65.00 LAKHS PLUS STAMP DUTY AND OTHER EXPENSES OF .7,50,000/- AND THE TOTAL COST OF THE PROPERTY IS .72,50,000/- AND HALF SHARE OF THE ASSESSEE IS .36,25,000/-. WHILE GOING THROUGH THE SALE DEED DATED 29.04.2013 [DOCUMENT FOR PURCHASE OF THE ABOVE RESIDENTIAL PROPERTY] FILED BY THE ASSESSEE, THE ASSESSING OFFICER OBSERVED THAT THE PROPERTY WAS PURCHASED FOR A SUM OF .65.00 LAKHS, WHEREAS, THE MARKET VALUE OF THE LAND AND BUILDING OF THAT PROPERTY IS .90.00 LAKHS AS PER SUB-REGISTRATION DISTRICT KONNUR AND REGISTRATION DISTRICT OF CHENNAI-NORTH. ACCORDINGLY, BY INVOKING THE PROVISIONS OF SECTION 56(2)(VII)(B)(II) OF THE ACT, 50% SHARE OF THE ASSESSEE ON THE DIFFERENCE BETWEEN THE STAMP DUTY VALUE AND THE SALE VALUE I.E., .25,00,000/- [.90,00,000/- MINUS .65,00,000/-] WAS TREATED AS INCOME I.T.A. NO. 2809/CHNY/18 3 FROM OTHER SOURCES AND BROUGHT TO TAX. ON APPEAL, THE LD. CIT(A) CONFIRMED THE ADDITION. 3. ON BEING AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 4. WE HAVE HEARD BOTH THE SIDES, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW INCLUDING THE PAPER BOOK FILED BY THE ASSESSEE. DURING THE COURSE OF HEARING, BY REFERRING TO THE GROUNDS APPEAL, THE LD. COUNSEL FOR THE ASSESSEE VEHEMENTLY ARGUED THAT THE ACTUAL CONSIDERATION PAID WAS .113 LAKHS, WHICH INCLUDES AS PER SALE DEED .65.00 LAKHS WAS PAID, AS PER COMPROMISE MEMO AN ADDITIONAL AMOUNT OF .38 LAKHS WAS PAID AND FURTHER A SUM OF .10 LAKHS WAS ALSO PAID TO THE FIRST PLAINTIFF. THEREFORE, THE TOTAL CONSIDERATION PAID WAS .113 LAKHS AS AGAINST THE STAMP DUTY VALUATION OF .90 LAKHS AND THEREFORE, THERE IS NO APPLICATION OF SECTION 56(2)(VII) OF THE ACT AND PLEADED FOR DELETING THE ADDITION. ON CAREFUL PERUSAL OF VARIOUS AGREEMENTS, MEMO OF COMPROMISE, ETC. FILED IN THE FORM OF PAPER BOOK, WE FIND THAT THERE IS SOME MISCALCULATION OF THE TOTAL SALE CONSIDERATION CLAIMED TO HAVE PAID BY THE ASSESSEE AS WELL AS THE SUM TAKEN BY THE ASSESSING OFFICER. UNDER THESE FACTS AND CIRCUMSTANCES, WE DIRECT THE ASSESSING OFFICER TO INCORPORATE ALL THE AMOUNTS PAID BY THE ASSESSEE AND HIS BROTHER FOR ACQUIRING THE RESIDENTIAL PROPERTY AND DECIDE AS TO WHETHER INVOCATION OF PROVISION OF SECTION I.T.A. NO. 2809/CHNY/18 4 56(2)(VII) OF THE ACT IS REQUIRED OR NOT BY GIVING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THUS, THE GROUND RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THE 22 ND MARCH, 2019 IN CHENNAI. SD/- SD/- (A.MOHAN ALANKAMONY) ACCOUNTANT MEMBER (DUVVURU RL REDDY) JUDICIAL MEMBER CHENNAI, DATED, 22.03.2019 VM/- /COPY TO: 1. / APPELLANT, 2. / RESPONDENT, 3. ( ) /CIT(A), 4. /CIT, 5. /DR & 6. /GF.