ITO WD-1(4), Jamshedpur V. Shri Vishwanath Pd Vishwakarma,

ITA 298/RAN/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7793 (ITAT-RANCHI)
• Duration Of Justice: 1 year(s) 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-05-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 04-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K MONDAL
• Assessee Lawyers: D SANNIGRAHI CA LD
• Keywords: Unexplained cash credit; Capital asset; Additional evidence; Cost of acquisition; Fair market value; Revised return
• Section: 143(3); 142(1); 131; 69; 54; 6

Judgement Text

1 ITA NO.298/RAN/16 IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI BENCH, RANCHI BEFORE: SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIA L MEMBER I.T.A NO. 298/RAN/16 A.Y 2013-14 I.T.O., WARD 1(4), JAMSHEDPUR APPELLANT VS. SHRI VISHWANATH PD. VISHWAKARMA PAN: ABQPV7125E RESPONDENT FOR THE APPELLANT : SHRI P.K. MONDAL, JCIT FOR THE RESPONDENT : SHRI D. SANNIGRAHI, CA, LD.A R DATE OF HEARING : 28-02-2018 DATE OF PRONOUNCEMENT : 04 -05-2018 ORDER PER BENCH: THIS APPEAL BY THE REVENUE IS AGAINST THE ORDER DT. 16-08-2016 OF CIT(A), JAMSHEDPUR FOR THE ASSESSMENT YEAR 2013- 14, WHEREIN HE DELETED THE VARIOUS ADDITIONS MADE BY THE AO IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. GROUND NOS. 1 & 2 ARE RELATING TO DELETION OF AD DITION OF RS.1,34,00,000/- AND ACCEPTANCE OF SALE CONSIDERATI ON AT RS. 3,20,00,000/- BY THE CIT-A. 3. ON EXAMINATION OF DOCUMENTS SUBMITTED/GATHERED I N RESPECT OF LONG TERM CAPITAL GAIN, THE AO FOUND THAT THE ASSES SEE INITIALLY ENTERED INTO AN AGREEMENT FOR SALE OF LAND SITUATED AT KASHIDIH, SAKCHI FOR RS.3,20,00,000/- WITH SHRI JAI PRAKASH S INGH ON 26-03- 2012. FROM WHICH THE AO FOUND THAT THE PURCHASER, S HRI JAI PRAKASH SINGH HAD PAID RS. 11,00,000/- IN CASH AND BALANCE AMOUNT OF 2 ITA NO.298/RAN/16 RS.3,09,00,000/- IS TO PAID BEFORE NEGOTIATION. FRO M THE SALE DEED, WHICH WAS EXECUTED ON 27-07-2012 THE AO FOUND THE S ALE CONSIDERATION AT RS.1,75,00,000/- AND THE DETAILS O F PAYMENTS MADE TO SHRI VISWANATH PRASAD VISHWAKARMA, THE ASSESSEE HEREIN. THE AO FOUND THAT WHILE COMPUTATION OF LONG TERM CAPITAL G AIN THE ASSESSEE HAD TAKEN SALE CONSIDERATION OF RS.3,20,00,000/- IN PLACE OF RS.1,75,00,000/- MENTIONED IN THE SALE DEED DT. 27- 07-2012. THE AO ASKED THE ASSESSEE TO EXPLAIN THE ACTUAL SALE CONSI DERATION. THE ASSESSEE EXPLAINED THAT HE RECEIVED SALE CONSIDERAT ION OF RS.3,20,00,000/- AND TO REDUCE STAMP VALUE, THE PU RCHASER, SHRI JAI PRAKASH SINGH SHOWN LESS SALE CONSIDERATION AT RS. 1,75,00,000/-. TO VERIFY THIS TRANSACTION, THE AO ISSUED SUMMON U/S. 131 OF THE ACT TO PURCHASER OF LAND, SHRI JAI PRAKASH SINGH AND HIS S TATEMENT WAS RECORDED U/S. 131 OF THE ACT, STATED THAT THE TOTA L SALE CONSIDERATION IS RS.1,75,00, 000/- AND DENIED EXCESS PAYMENT OF SALE CONSIDERATION AS CLAIMED BY THE ASSESSEE. 4. DURING CROSS EXAMINATION OF STATEMENTS RECORDED, THE ASSESSEE STATED THAT HE RECEIVED RS.3,20,00,000/- WHICH INCL UDES CASH OF RS.1,45,00,000/-ON VARIOUS DATES. MONEY RECEIPT ACK NOWLEDGING THE CASH PAYMENTS WERE ISSUED AND PHOTO COPIES OF MONE Y RECEIPTS WERE ALSO FURNISHED IN SUPPORT OF HIS CLAIM AND CONTENTI ON. FURTHER, STATED THAT THE STATEMENT OF THE PURCHASER, SHRI JAI PRAKA SH SINGH IS FALSE AND SHOWN THE CASH DEPOSITS IN BANKS IN THE NAME O F HIMSELF & HIS FAMILY MEMBERS ON DIFFERENT DATES REPRESENTING THE SALE PROCEEDS OF LAND. FURTHER ASSESSEE STATED THAT PURCHASER OF LAN D, SHRI JAI PRAKASH SINGH WANTED TO EVADE STAMP DUTY PAYABLE TO THE GOV ERNMENT BY SHOWING LOWEST SALE CONSIDERATION. 5. SHRI JAI PRAKASH SINGH, PURCHASER OF LAND STATED THAT THE AGREEMENT FOR SALE OF LAND WAS MADE FOR A CONSIDERA TION OF RS.3,20,00,000/- AND ON THE LEGAL ADVICE IT WAS RE DUCED TO RS.1,75,00, 000/- ON MUTUAL AGREEMENT AS THE PROP ERTY IN QUESTION FALLEN UNDER THE PURVIEW OF CNT ACT. 3 ITA NO.298/RAN/16 6. IN LIGHT OF THE ABOVE FACTS & CIRCUMSTANCES OF T HE CASE, AO COMPUTED THE SALE CONSIDERATION OF LAND & LONG TERM CAPITAL GAIN TOWARDS SALE OF LAND AS UNDER:- SALE CONSIDERATION OF LAND RS.1,86,00,000/- COMMUTATION OF LONG TERM CAPITAL GAIN SALE CONSIDERATION RS.1,86,00,000/- DEDUCTION U/S. 48 (I) COST OF ACQUISITION AFTER INDEXATION RS.42,60, 000/- (II) EXPENDITURE ON TRANSFER RS.10,00,000/- R S.52,60,000/- BALANCE RS. 1,33,40,000/- DEDUCTION U/S. 54 (BEING AMOUNT DEPOSITED IN CAPITAL GAIN A/C) RS.1,33,40,000/ - TAXABLE LONG TERM CAPITAL GAIN NIL 7. THE AO FOUND THAT THE CLAIM OF ASSESSEE REGARDIN G DEPOSIT OF RS.1,34,00,000/- NOT PROVED BY THE ASSESSEE. HENCE, THE AO TREATED THE SALE CONSIDERATION OF LAND OF RS.1,34,00, 000/ - ( RS.1,45,00,000 RS. 11,00,000) AS UNEXPLAINED CASH CREDIT U/S. 6 9A OF THE ACT AND ADDED THE SAME TO THE TOTAL INCOME OF ASSESSEE BY P ASSING AN ORDER U/S. 143(3) OF THE ACT DT. 26-03-2015. 8. BEFORE THE CIT-A THE ASSESSEE SUBMITTED THAT HE RECEIVED RS. 1,75,00,000/- BY SIX CHEQUES AND CASH OF RS. 1,45,0 0,000/-. THE DETAILS OF PAYMENT RECEIVED BY THE ASSESSEE ARE AS UNDER:- A) PAYMENT RECEIVED BY A/C PAYEE CHEQUES: CHEQUE NO. DATED AMOUNT IN LACS BANKS ON WHICH 388269 15-06-2012 25.00 CORPORATION BANK 388270 16-06-2012 25.00 CORPORATION BANK 388271 20-07-2012 44.00 CORPORATION BANK 006389 20-07-2012 19.00 ICICI BANK 006390 21-07-2012 18.00 ICICI BANK 388372 21-07-2012 44.00 CORPORATION BANK TOTAL 175.00 B) PAYMENT RECEIVED BY WAY OF CASH: DATED AMOUNT IN LACS DATE OF AGREEMENT 26/03/2012 11.00 MONEY RECEIPT NO. 01 30/03/2012 15.00 02 13/04/2012 24.00 03. 02/05/2012 45.00 04. 02/06/2012 25.00 - 16/06/2012 25.00 TOTAL 145.00 4 ITA NO.298/RAN/16 9. IT WAS SUBMITTED AS PER TERMS & CONDITIONS OF T HE AGREEMENT, THE PURCHASER HAS PAID AN AMOUNT OF RS. 11 LAKHS ON THE SAID DATE OF EXECUTION AND AS THE PURCHASER AGREED TO PAY THE B ALANCE AMOUNT OF RS. 3,09,00,000/- ONE WEEK BEFORE THE REGISTRATION OF THE SALE DEED AND THE ASSESSEE RAISED THE SAME AS DETAILED ABOVE. 10. THE CIT-A CONSIDERING THE DETAILED SUBMISSIONS OF ASSESSEE AND FOLLOWING THE CASE LAWS AS RELIED ON BY THE ASSESSE E DIRECTED THE AO TO ACCEPT THE SALE CONSIDERATION AT RS.3,20,00,000 /- AND CALCULATE THE CAPITAL GAIN ACCORDINGLY AND TO DELETE THE ADDI TION OF RS.1,34,00,000/- MADE BY THE AO. 11. THE LD.DR SUBMITS THAT THE CIT-A HAS NO POWER T O DIRECT TO DELETE THE IMPUGNED ADDITION MADE BY THE AO WITHOUT SEEKING ANY COMMENTS AND REMAND REPORT FROM THE AO TO CALCULAT E THE CAPITAL GAIN AND DELETE THE ADDITION. HE RELIED ON THE ORDE R OF THE AO. 12. ON THE OTHER HAND, THE LD.AR SUBMITS THAT THE C IT-A CONSIDERING THE EVIDENCE AND EXPLANATION ACCEPTED T HE SALE CONSIDERATION AT RS. 3,20,00,000/- AND DIRECTED TO AO COMPUTE CAPITAL GAIN AND EXAMINE THE DEDUCTION U/SEC. 54 OF THE ACT. THE LD. AR SUBMITS THAT NO ADDITIONAL EVIDENCE WAS FILED BE FORE THE CIT-A REQUIRING A REMAND REPORT FROM AO. THE CIT-A EXAMIN ED THE RECORD WHICH WAS AVAILABLE BEFORE THE AO AND FOUND SATISFI ED WITH EXPLANATION OFFERED BY THE ASSESSEE. HE SUPPORTED T HE ORDER OF THE CIT-A. 13. HEARD RIVAL SUBMISSIONS AND PERUSED THE RECORD. THE ASSESSEE DECLARED LONG TERM CAPITAL GAIN OF RS. 2,54,25,861/ - AND CLAIMED EXEMPTION U/S. 54 OF THE ACT IN HIS RETURN OF INCOM E. ACCORDING TO AO, NO COMPLIANCE WAS MADE IN RESPONSE TO NOTICES ISSUE D U/S. 143(2) AND 142(1) OF THE ACT, 1961. THE ASSESSEE DECLARED CAPITAL GAIN OF RS.95,38,120/- IN THE REVISED RETURN OF INCOME. THE AO FOUND CAPITAL GAIN IS UNDER VALUED CAPITAL GAIN. THE AO MADE ADD ITION ON ACCOUNT 5 ITA NO.298/RAN/16 OF UNEXPLAINED CASH CREDIT U/S. 69A OF THE ACT. THE LD. CIT(A) HAS ON AN EXAMINATION OF FACTS AT PARA 4.3 OF HIS ORDER CO ME TO CONCLUSION THAT, THE SALE CONSIDERATION OF THE PROPERTY IS RS. 3,20,000/-. THIS COULD NOT BE CONTRADICTED BY THE LD.DR. HENCE, WE U PHOLD THIS FINDING. IN OUR VIEW THE LD. CIT(A) RIGHTLY DELETED THE ADD ITION U/S. 69 OF THE ACT. HENCE, THESE GROUNDS OF THE REVENUE ARE DISMI SSED. 14 REGARDING GROUND NO. 3, WE FIND FROM RECORDS, TH AT THE ASSESSEE FILED TWO FAIR MARKET VALUE REPORTS BEFORE THE AO I.E ONE ON HIS OWN AND ANOTHER BY REGISTERED VALUER. THE CIT- A OBSERVED THAT THE ASSESSEE FILED NO SUBSTANTIVE DOCUMENTS OR BASI S FOR SUCH INDEXED COST ACQUISITION BEFORE THE AO, THEREBY THE CIT-A CONFIRMED THE FAIR MARKET VALUE AS DETERMINED BY THE AO. THE ISSUE IS IN BEFORE US IN RESPECT OF GROUND NO. 3 WHETHER THE CIT-A JUS TIFIED IN DIRECTING THE AO TO CONSIDER THE ASSESSEES CLAIM OF EXEMPTIO N U/S. 54 OF THE ACT. WE FIND THAT THE ASSESSEE SOLD LAND & BUILDIN G BEARING NEW PLOT NO. 2960, NEW KHATA NO. 145 MEASURING AN AREA OF 9. 96 DCML. ( APPROX 6 KATHAS) SITUATED AT KASIDIH, P.S SAKCHI, J AMSHEDPUR TO SHRI JAI PRAKASH SINGH FOR A TOTAL CONSIDERATION OF RS. 3,20,00,000/-, WHICH WAS ACCEPTED BY THE CIT-A. THERE IS NO DISPUT E WITH REGARD TO SALE CONSIDERATION AND RECEIPT OF ABOVE SALE CONSID ERATION BY THE ASSESSEE FROM THE ORDERS OF AO AND CIT-A. IF THIS IS SO, WE ARE INCLINED TO UPHOLD THE FINDING OF THE CIT-A IN REMA NDING THE ISSUE TO THE FILE OF AO FOR VERIFICATION OF CLAIM U/S. 54 OF THE ACT. SECTION 54 OF THE ACT PROVIDES A DEDUCTION IN RESPECT OF CAPITAL GAIN ARISING FROM THE TRANSFER OF LONG TERM CAPITAL ASSET BEING BUILD ING OR LAND OR APARTMENT THERETO AND BEING A RESIDENTIAL HOUSE. TH E SAID DEDUCTION IS TO BE EXAMINED AND VERIFIED IN ACCORDANCE WITH L AW. WE FIND NO INFIRMITY IN THE ORDER OF CIT (A) IN DIRECTING THE AO TO EXAMINE THE DEDUCTION AS AVAILABLE U/S. 54 OF THE ACT. GROUND NO 3 IS DISMISSED. 6 ITA NO.298/RAN/16 15. IN THE RESULT, THE APPEAL OF THE REVENUE IN IT A NO. 298/RAN/2016 FOR THE A.Y 2013-14 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 04-05-2018 SD/- SD/- J. SUDHAKAR REDDY S.S. VISWANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATED :04-05-2018 PP(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT/DEPARTMENT INCOME TAX OFFICER, WARD 1(4) , 47-C.H AREA, JAMSHEDPUR-831001. 2 RESPONDENT/ASSESSEE SHRI VISHWANATH PD. VISHWAKARM A, 108, RAJIV PATH, DIMNA ROAD, MANGO, JAMSHEDPUR-8310 12. 3 . THE CIT(A), RANCHI 4. 5. CIT , RANCHI DR, ITAT RANCHI BENCHES, RANCHI. / TRUE COPY, BY ORDER, SR.PS ITAT, RANCHI