BHIM SINGH, Jaipur V. ITO, Jaipur

ITA 297/JPR/2014

• Counselvise Citation: 29723114 RSA 2014
• Duration Of Justice: 1 year(s) 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-09-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 21-04-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAJ MEHRA JCIT DR DHK
• Assessee Lawyers: SL GUPTA
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Fair market value; Wrong claim; Onus to prove
• Section: 50C; 2(14); 131; 54

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JUDICIAL MEMBER VK;DJ VIHY LA-@ ITA NO. 297/JP/2014 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2008-09 SHRI BHIM SINGH P.NO.9, BHARATI COLONY BHARAMPUR, JAIPUR CUKE VS. THE ITO WARD- 5 (1) JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AXEPS 7965 H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI S.L. GUPTA JKTLO DH VKSJ LS@ REVENUE BY :SHRI RAJ MEHRA, JCIT -DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 23/09/2015 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 29/09/2015 VKNS'K@ ORDER PER R.P. TOLANI, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST T HE ORDER OF THE LD. CIT(A)-II, JAIPUR DATED 5-03-2014 FOR THE ASSESSMEN T YEAR 2008-09 WHEREIN THE ASSESSEE HAS RAISED FOLLOWING GROUNDS: - 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A)-II JAIPUR IS WRONG, UNJUST AND HAS E RRED IN LAW IN UPHOLDING OF ADOPTION OF THE STAMP DUTY VALUE OF RS. 8,68,230/- FOR THE PURPOSE OF CALCULATING THE CAPIT AL GAIN INSTEAD OF ACTUAL SELLING PRICE OF RS. 6.50 LACS WH ICH WAS THE ITA NO. 297/JP/2014 SHRI BHIM SINGH VS. ITO , WARD- 5 (1), JAIPUR . 2 FAIR MARKET VALUE AT THE TIME OF SALE AS CLAIMED B Y THE ASSESSEE WITHOUT OBTAINING VALUATION OF FAIR MARKET VALUE FROM VALUATION OFFICER IN SPITE OF REQUEST BY THE A SSESSEE. 2. THE LD. CIT(A)-II, JAIPUR IS FURTHER WRONG, UNJUST AND HAS ERRED IN LAW IN CONFIRMING DISALLOWA NCE OF THE COST OF CONSTRUCTION OF RS. 2.50 LACS CLAIMED IN TH E COMPUTATION OF CAPITAL GAINS AND ALSO DISALLOWANCE OF DEDUCTION CLAIMED U/S 54 AVAILABLE FOR RESIDENTIAL PROPERTY. 2.1 DURING THE COURSE OF HEARING, THE LD. AR OF THE ASSESSEE HAS NOT PRESSED GROUND NO. 1. THEREFORE, THE SAME IS DISMIS SED BEING NOT PRESSED. 3.1 APROPOS GROUND NO. 2, BRIEF FACTS ARE THAT AS P ER THE REGISTERED SALE DEED EXECUTED BY THE ASSESSEE, ONLY A PLOT OF THE O F LAND WAS SOLD. HOWEVER, IN THE COMPUTATION OF INCOME, THE ASSESSEE WHILE OFFERING CAPITAL GAINS THEREON, CLAIMED THAT HE HAS INCURRED THE COST OF CONSTRUCTION OF RS. 2.50 LACS FOR LEVELING OF LAND, CONSTRUCTION OF BOUNDARY WALL, ONE ROOM, KITCHEN AND LAT BATH, THE WORK WAS COMPLETED ON 31-01-2008. THE AO DURING ASSESSMENT PROCEEDINGS INQUIRED ABOUT THE SALE DEED MENTIONING ONLY SALE OF PLOT AND ASKED THE ASSESSEE TO SUBMIT THE DETAILS, EVIDENCE AND SOURCES FOR CLAIM OF ALLEGED COST OF C ONSTRUCTION INCURRED DURING THE YEAR 2007-08. BESIDES THE DETAILS AND EV IDENCE OF THE INVESTMENT IN HOUSE PROPERTY FOR CLAIM OF EXEMPTION U/S 54 OF THE ACT. ITA NO. 297/JP/2014 SHRI BHIM SINGH VS. ITO , WARD- 5 (1), JAIPUR . 3 THE ASSESSEE FILED AFFIDAVITS OF CONTRACTOR ONE SHR I MOOL CHAND AND THE SUPERVISOR ONE SHRI BHUPENDRA KUMAR FOR CONSTRUCTI ON OF THE HOUSE. THE AO CALLED FOR THE BUYERS OF THE LAND WHO BY AN STAT EMENT ON OATH DEPOSED THAT THERE WAS NO CONSTRUCTION ON THE PLOT PURCHASE D BY HIM. THE AO HELD THAT ASSESSEE FAILED TO ESTABLISH VALID CLAIMS IN T HIS BEHALF AND DISALLOWED THE CLAIMS OF THE ASSESSEE BY FOLLOWING OBSERVATION S (A) THERE IS ENOUGH EVIDENCES AVAILABLE ON RECORD T O PROVE THAT THERE WAS NO CONSTRUCTION ON THE PLOT OF LAND SOLD BY THE ASSESSEE WHICH MAY BE DETAILED AS UNDER:- (I) IN PARA 2 AT PAGES 5 OF THE REGISTERED SALE DEE D DATED 15-02-2008, IT IS CLEARLY MENTIONED THAT THERE IS N O CONSTRUCTION ON THIS PLOT OF LAND. ACCORDINGLY, THE STAMP DUTY AND REGISTRATION CHARGES HAVE BEEN LEVIED BY T HE SUB- REGISTRAR ON THE VALUE OF LAND ONLY. (II) VIDE ORDER SHEET ENTRY DATED 18-11-2011, THE A SSESSEE WAS REQUIRED TO SUBMIT WATER AND ELECTRICITY BILL R EGARDING THE PROPERTY SOLD AT ALWAR. HOWEVER, THE ASSESSEE COLD NOT SUBMIT THE SAME. OBVIOUSLY, THERE WAS NO CONSTRUCTI ON AND HENCE THE QUESTION OF WATER ELECTRICITY DOES NOT AR ISE. (III) AS MENTIONED ABOVE IN THE STATEMENTS RECORDED U/S 131 OF THE BUYER SHRI SURENDRA KUMAR SEN ON 14-12-2 011, HE CATEGORICALLY DENIED OF THERE BEING ANY CONSTRUC TION AT ALL ON THE IMPUGNED PLOT OF LAND SOLD BY THE ASSESSEE . ITA NO. 297/JP/2014 SHRI BHIM SINGH VS. ITO , WARD- 5 (1), JAIPUR . 4 (B) THE OBJECTION OF LD. AR REGARDING THE OPPORTUNI TY OF CROSS EXAMINATION OF THE BUYER SHRI SURENDRA KUMAR SEN IS NOT TENABLE. COPY OF HIS STATEMENTS WERE SUPPLIED T O THE ASSESSEE. HE IS THE BUYER OF THE PLOT SOLD BY THE A SSESSEE. HIS STATEMENTS ARE SUPPORTED WITH DOCUMENTARY EVIDENCE IN THE FORM OF REGISTERED SALE DEED WHICH HAS ALSO BEEN SI GNED BY THE ASSESSEE. (C) REGARDING APPLICATION OF SECTION 50C ALSO, THE SUBMISSIONS OF LD. AR DO NOT HELP THE ASSESSEE. SEC TION 50C IS DEEMING PROVISION WHICH IS MANDATORY IN NATURE. THEREFORE, FOR THE PURPOSE OF COMPUTING CAPITAL GAI NS, SALE CONSIDERATION IS TAKEN TO BE RS. 8,68230/- AS ADOPT ED BY THE STAMP AUTHORITY. (D) AS REGARDS CONTENTION OF SELLING LEASING RIGHTS IN PLOT AND NOT THE LAND ITSELF, IT IS CLEAR FROM THE LANGU AGE OF THE SALE DEED DATED 15-02-2008 THAT PLOT OF LAND HAS BE EN SOLD. THERE IS NO MENTION OF SELLING LEASE RIGHTS ONLY OF THIS PLOT. MOREOVER, AS PER DEFINITION OF CAPITAL ASSET GIVEN IN SECTION 2(14) OF I.T. ACT, CAPITAL ASSET MEANS PROPERTY OF ANY KIND HELD BY AN ASSESSEE .. THUS THE CONTENTION O F CAPITAL ASSETS ALSO COVERS THE LEASE RIGHT. THIS CO NTENTION OF LD. AR IS UNFOUNDED AND HENCE NOT ACCEPTABLE. THEREFORE, THE CLAIM OF ALLEGED COST OF CONSTRUCTIO N AND DEDUCTION U/S 54 WAS DISALLOWED AS PROPERTY SOLD IN QUESTION WAS NOT A RESIDENTIAL HOUSE BUT ONLY A PLOT OF LAND. 3.2 AGGRIEVED, THE ASSESSEE PREFERRED FIRST APPEAL BEFORE THE LD. CIT(A) WHO UPHELD THE ORDER OF THE AO ON THESE ISSUES BY F OLLOWING OBSERVATIONS. ITA NO. 297/JP/2014 SHRI BHIM SINGH VS. ITO , WARD- 5 (1), JAIPUR . 5 3.3 I HAVE CONSIDERED THE FACTS OF THE CASE, ASSESSMENT ORDER OF AO AND APPELLANTS WRITTEN SUBM ISSION. APPELLANT CLAIMED CONSTRUCTION COST OF PLOT OF LAND ALONGWITH DEDUCTION U/S 54. ASSESSING OFFICER DISAL LOWED THE COST OF CONSTRUCTION ON THE GROUND THAT IN THE SALE DEED, THERE IS NO REFERENCE OF ANY CONSTRUCTION OF STRUCTURE. A PPELLANT SUBMITTED AFFIDAVITS OF TWO PERSONS CLAIMING CONSTR UCTION OF BOUNDARY WALL AND ROOM AND KITCHEN ETC. ASSESSING O FFICER ASKED APPELLANT TO PRODUCE THESE PERSONS FOR EXAMIN ATION SINCE THE CLAIM OF CONSTRUCTION WAS AGAINST THE FAC TS NOTED IN SALE DEED. HOWEVER, APPELLANT DID NOT PRODUCE THESE PERSONS AND THEREFORE, THE CLAIMS MADE IN AFFIDAVIT COULD N OT BE CONFIRMED ASSESSING OFFICER CALLED THE BUYER OF THE PROPERTY AND EXAMINED HIM ON OATH. THE BUYER CATEGORICALLY D ENIED ANY CONSTRUCTION ON THE PLOT OF LAND PURCHASED BY H IM. HE EVEN DENIED HAVING BOUNDARY WALL ON THE PLOT OF LAN D WHICH CLEARLY SHOWS THAT APPELLANTS CLAIM OF CONSTRUCTIO N OF HOUSE ON THE PLOT OF LAND IS FALSE AND CONSEQUENTLY THE C LAIM OF DEDUCTION U/S 54 IS ALSO INCORRECT. ASSESSING OFFIC ER PROVIDED COPY OF STATEMENT OF BUYER TO THE APPELLAN T. APPELLANT DID NOT ASK FOR ANY CROSS EXAMINATION OF THE BUYER AND THEREFORE, STATEMENT OF BUYER HAS BECOME FINAL. THE APPELLANTS ARGUMENTS WITH JUDICIAL DECISION THAT W ITHOUT CROSS-EXAMINATION, STATEMENT RECORDED HAS NO EVIDEN TIARY VALUE IS NOT APPLICABLE IN THE CASE OF APPELLANT SI NCE APPELLANT NEVER ASKED FOR CROSS-EXAMINATION OF THE BUYER AND THEREFORE, AO COULD NOT HAVE ALLOWED SUCH OPPORTUNI TY. BY PROVIDING A COPY OF STATEMENT OF THE BUYER, AO DISC HARGED HIS ONUS. IF APPELLANT DISPUTED ANY PART OF THE STA TEMENT, HE COULD HAVE COUNTERED THE SAME BY NECESSARY EVIDENCE S OR COULD HAVE ASKED FOR CROSS EXAMINATION. HOWEVER, AP PELLANT DID NOT DO ANYTHING AND THEREFORE, THE STATEMENT OF THE BUYER TOGETHER WITH SALE DEED ARE SUFFICIENT EVIDENCES TO PROVE THAT THERE WAS NO CONSTRUCTION ON THE PLOT OF LA ND SOLD AND THEREFORE, ASSESSING OFFICER IS JUSTIFIED IN NOT ALLOWING ANY COST OF CONSTRUCTION WHILE COMPU TING CAPITAL GAINS. CONSEQUENTLY, WHAT WAS SOLD WAS PLOT OF LAND ITA NO. 297/JP/2014 SHRI BHIM SINGH VS. ITO , WARD- 5 (1), JAIPUR . 6 AND NOT HOUSE THEREFORE, NO DEDUCTION U/S 54 IS AVA ILABLE TO THE APPELLANT. BOTH THE GROUNDS OF THE APPELLANT AR E DISMISSED AND AOS ACTION IS CONFIRMED. 3.3 LD. COUNSEL FOR THE ASSESSEE CONTENDS THAT FIND ING OF THE LD. CIT(A) THAT ASSESSEE DID NOT ASK FOR CROSS EXAMINAT ION OF THE BUYER SHRI SURENDRA KUMAR SEN IS NOT CORRECT AS AO HAS REFERRE D TO SUCH REQUEST IN THE ASSESSMENT ORDER. THEREFORE, THE FINDING OF THE LD. CIT(A) IS ERRONEOUS AND OPPORTUNITY OF CROSS MAY BE GIVEN TO THE ASSESSEE AND THE ISSUE MAY BE SET ASIDE. 3.4 ON THE OTHER HANDS, THE LD. DR CONTENDS THAT CO URTS HAVE HELD THAT THERE IS NO UNIVERSAL RULE THAT IN EACH AND EVERY C ASE, THE RIGHT OF CROSS EXAMINATION CANNOT BE GRANTED, IT DEPENDS ON THE FA CTS OF THAT CASE. THE ASSESSEE GAVE THE NAMES OF THE CONTRACTORS I.E. SHR I MOOLCHAND (CONTRACTOR) AND SHRI BHUPENDRA SINGH, SUPERVISOR A ND CLAIMED TO HAVE MADE PAYMENTS THROUGH CONTRACTOR; NO EVIDENCE OF TD S DEDUCTED ON THE CONTRACT AMOUNT HAS BEEN GIVEN. BOTH OF THEM WERE N OT PRODUCED BEFORE THE AO TO SUBSTANTIATE THE AFFIDAVIT. THE SALE DEED IS A REGISTERED DOCUMENT ON THE BASIS OF WHICH RIGHTS OF IMMOVABLE PROPERTY ARE TRANSFERRED AND THERE NO REFERENCE AT ALL ABOUT ALL EGED CONSTRUCTION OF HOUSE THEREON. THEREFORE, THE ASSERTIONS OF THE ASS ESSEE ARE TOTALLY ITA NO. 297/JP/2014 SHRI BHIM SINGH VS. ITO , WARD- 5 (1), JAIPUR . 7 UNSUBSTANTIATED. THE OVERWHELMING EVIDENCES AVAILAB LE ON RECORD DEMONSTRATED THAT NO HOUSE WAS CONSTRUCTED. ONCE TH ERE IS SUFFICIENT EVIDENCE ON RECORD TO ESTABLISH THESE FACTS AGAINST THE ASSESSEE THEN THERE IS NO NECESSITY OF CROSS EXAMINATION. SINCE THE ASS ESSEE FAILED TO PRODUCE MOOLCHAND, HIS AFFIDAVIT HAS NO EVIDENTIARY VALUE. IN VIEW THEREOF, IT IS AN ESTABLISHED FACT THAT NO HOUSE WAS CONSTRUCTED BY T HE ASSESSEE A FALSE CLAIM HAS BEEN MADE TO REDUCE THE TAXABILITY AND TO SOMEHOW CLAIM BENEFIT OF DEDUCTION U/S 54 OF THE ACT. ORDERS OF T HE LOWER AUTHORITIES ARE RELIED UPON. 3.5 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS CLEAR FROM THE FACTS ON RECORDS THAT SALE DEED WHICH IS AN IMPORTANT DOCUMENT FOR TRANSFER OF PROP ERTY AND THE BASIS OF TRANSFER OF PROPERTY U/S 2(47) DOES NOT CONTAIN ANY REFERENCE TO SELL / TRANSFER OF ANY RESIDENTIAL HOUSE OR CONSTRUCTION. THEREFORE, NO LEGAL INFERENCE CAN BE DRAWN IN FAVOUR OF THE ASSESSEE ON THIS ISSUE. DESPITE THE AOS INSISTENCE, ASSESSEE NEITHER PRODUCED THE CONT RACTOR NOR THE SUPERVISOR TO SUBSTANTIATE HIS VERSION. CONSEQUENTL Y, THE ASSESSEE FAILED TO DISCHARGE THE BURDEN CAST ON HIM TO LEAD ANY CREDIB LE EVIDENCE TO SUPPORT HIS PLEA ABOUT THE PLOT AND TRANSFER OF THE SAME. N ON-DISCHARGING OF THE ITA NO. 297/JP/2014 SHRI BHIM SINGH VS. ITO , WARD- 5 (1), JAIPUR . 8 BURDEN TO PROVE THE ELIGIBILITY OF ANY CLAIM WILL D ISENTITLE THE ASSESSEE FROM AVAILING THE SAME. 3.6 APROPOS CLAIM OF CROSS EXAMINATION, I FIND MERI T IN THE ARGUMENTS OF THE LD. DR THAT THERE IS NO UNIVERSAL RULE TO PR OVIDE CROSS-EXAMINATION IN EACH AND EVERY CASE, MORE SO WHEN EVIDENCE ON RE CORD IS PALPABLE AGAINST THE ASSESSEE. EVEN IF THE EVIDENCE OF SUREN DRA KUMAR SEN IS EXCLUDED, THE EVIDENCE ON RECORD IS CLINCHED AGAINS T THE ASSESSEE. IN VIEW THEREOF, THE CROSS EXAMINATION OF SHRI SURENDRA KUM AR SEN BECOMES IRRELEVANT AS SUFFICIENT MATERIAL IS ON RECORD EVEN IF THE STATEMENT OF VENDEE IS IGNORED. IN VIEW THEREOF, I UPHOLD THE OR DER OF THE LOWER AUTHORITIES AND REJECT THE CLAIM OF THE ASSESSEE FO R CONSTRUCTION COST AND DEDUCTION U/S 54FOF THE ACT. THUS THE GROUND NO. 2 OF THE ASSESSEE IS DISMISSED. 4.0 IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMIS SED ORDER PRONOUNCED IN THE OPEN COURT ON 29/09/2 015 SD/- VKJ-IH-RKSYKUH (R.P.TOLANI) U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 29 /09/ 2015 ITA NO. 297/JP/2014 SHRI BHIM SINGH VS. ITO , WARD- 5 (1), JAIPUR . 9 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI BHIM SINGH, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE ITO, WARD- 5 (1), JAIPUR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 297/JP/2014) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR