The ITO, Ward-6(3), Surat V. Shri Mansukhbhai Dayabhai Patel, Surat

ITA 30/AHD/2010

• Counselvise Citation: 3020514 RSA 2010
• Duration Of Justice: 2 year(s) 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 07-08-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 04-01-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K SINGH
• Keywords: Sale consideration of property below Jantri Value
• Section: 143(3); 50C; 145

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD C BENCH BEFORE: SHRI A. K. GARODIA, ACCOUNTANT MEMBER AND SHRI KUL BHARA T, JUDICIAL MEMBER INCOME TAX OFFICER WARD 6(3) SURAT (APPELLANT) VS. MANSUKHBHAI DAYABHAI PATEL SURAT (RESPONDENT) PAN NO. ABCPP1275F REVENUE BY : SHRI D.K. SINGH, SR. D.R. ASSESSEE BY : NONE DATE OF HEARING : 07-08-2012 DATE OF PRONOUNCEMENT : 28 -09-2012 / ORDER PER : KUL BHARAT, JUDICIAL MEMBER:- THIS APPEAL IS DIRECTED AGAINST THE ORDER OF COMM ISSIONER OF INCOME TAX (APPEALS)-VI SURAT DATED 28-10-2009. THE REVE NUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- [1] ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A)-IV, SURAT HAS ERRED IN DELETING THE ADDITION OF RS. 18,23,917/- MADE BY THE AO ON ACCOUNT OF STAMP VALU ATION DIFFERENCE. [2]. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A)-IV, SURAT OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. I.T.A. NO 30/AHD/2010 A.Y.:-2006-07 ITA NO. 30/AHD/2010 P AGE NO. ITA VS. MANSHUKHBHAI DAYABHAI PATEL 2 [3]. IT IS, THEREFORE, PRAYED THAT THE ORDERS OF TH E LD. CIT(A)- IV, SURAT MAY BE SET-ASIDE AND THAT OF THE ASSESSIN G OFFICER RESTORED. 2. BRIEFLY STATED FACTS ARE THAT IN THIS CASE ASSES SMENT UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REF ERRED TO AS THE ACT) WAS FINALIZED VIDE ORDER DATED 19-12-2008. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTICED BY THE ASSESSING OFFICE R THAT THE ASSESSEE HAD UNVALUED THE PRICE OF PURCHASE OF THE PROPERTIES I. E. 13 PLOTS, AS PER THE STAMP VALUATION AUTHORITY, THE ASSESSEE HAD PAID AD DITIONAL STAMP DUTY AND DID NOT GO IN APPEAL AGAINST VALUATION MADE BY THE SAID AUTHORITY. ACCORDINGLY, THE ASSESSING OFFICER MADE ADDITION OF RS. 18,23,927/- ON ACCOUNT OF DIFFERENTIAL VALUE. ON FURTHER APPEAL B EFORE THE LD.CIT(A), THE AFORESAID ADDITION WAS DELETED RELYING ON THE ORDER OF THE HONBLE CO- ORDINATE BENCH OF THIS TRIBUNAL RENDERED IN THE CAS E OF BHARAT PATEL IN ITA NO. 749/AHD/2008. THE REVENUE IS IN APPEAL BEFORE US. 3. NONE APPEARED ON BEHALF OF THE ASSESSEE. HOWEVE R AN APPLICATION DATED 01-08-2012 SEEKING ADJOURNMENT IS ON RECORD. IT IS TRANSPIRED FROM RECORDS THAT ON THE LAST DATE OF HEARING ALSO I.E. ON 14-06-2012 THE HEARING OF THIS APPEAL WAS ADJOURNED ON THE BASIS OF SIMILAR A PPLICATION MADE BY ONE SRI A.K. PARIKH, CA, PROPRIETOR OF M/S ASWIM PARIKH & CO. HAVING MEMBERSHIP NO. 42469. IT IS FURTHER TRANSPIRED FRO M THE RECORDS THAT NO LETTER OF AUTHORITY ON BEHALF OF THE ASSESSEE IN FA VOUR OF SRI A.K. PARIKH OR M/S ASWIM PARIKH & CO. HAS BEEN FILED, THEREFORE, T HE FILING OF SUCH APPLICATION BEFORE THIS TRIBUNAL WITHOUT PROPER AUT HORIZATION TANTAMOUNT TO MISREPRESENTATION. IT HAS BEEN NOTICED IN THE OTHE R CASES ALSO THAT THE SAID SRI A.K. PARIKH IS IN HABIT OF MAKING SUCH APPLICAT IONS. UNDER THESE CIRCUMSTANCES, THE APPLICATION DATED 01-08-2012 SEE KING ADJOURNMENT OF THIS ITA NO. 30/AHD/2010 P AGE NO. ITA VS. MANSHUKHBHAI DAYABHAI PATEL 3 APPEAL IS CONSIDERED TO BE NON-EST. WE ARE FURTHER CONSTRAINED TO OBSERVE THAT SUCH TACTICS ADOPTED BY SRI A.K. PARIKH RESULT S INTO WASTING OF THE VALUABLE TIME OF THIS TRIBUNAL. THIS TRIBUNAL WOULD BE CONSTRAINED TO IMPOSE EXEMPLARY COST AND REFER THE MATTER TO THE INSTITU TE OF CHARTERED ACCOUNTANTS OF INDIA FOR TAKING APPROPRIATE ACTION IF SUCH ACT IS REPEATED IN FUTURE. SINCE THE NOTICE OF HEARING OF THIS CASE W AS DULY SERVED UPON THE ASSESSEE AND NEITHER THE ASSESSEE NOR ANY PERSON A UTHORIZED ON HIS BEHALF IS PRESENT, THIS APPEAL WAS HEARD EX-PARTE. 4. THE ONLY EFFECTIVE GROUND IS AGAINST DELETION OF ADDITION OF RS. 18,23,917/- MADE BY THE ASSESSING OFFICER ON ACCOUN T OF STAMP AUTHORIZATION DIFFERENCE. 5. SRI D.K. SINGH, LD. SR. D.R. OF THE REVENUE SUBM ITTED THAT THE ADDITION WAS MADE BY THE ASSESSING OFFICER ON THE B ASIS THAT THE STAMP AUTHORIZATION AUTHORITY FOUND THAT THE SALE DEED AS EXECUTED WAS UNDERVALUED AND ACCORDINGLY, THE PROPERTIES FOR THE PURPOSE OF STAMP VALUATION WAS VALUED AT HIGHER THAN VALUE DECLARED BY THE ASSESSE E AND WHEREBY THE ASSESSEE HAD TO PAY ADDITIONAL STAMP DUTY. HE SUBM ITTED THAT THE ASSESSEE SUPPRESSED THE TRUE VALUE OF THE PROPERTY THEREFOR E, THE ASSESSING OFFICER WAS JUSTIFIED IN MAKING ADDITION U/S 69B OF THE DIF FERENTIAL VALUE. 6. WE HAVE HEARD LD. SR. D.R. PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE ASSESSING OFFICER REJECTED THE SUB MISSIONS OF THE ASSESSEE AND ALSO RELIANCE PLACED ON THE JUDGMENT ON THE BA SIS THAT ALL THE CASES AS RELIED BY THE LEARNED COUNSEL FOR THE ASSESSEE REL ATED TO PERIOD PRIOR TO INSERTION OF SECTION 50C OF THE ACT WHICH WAS INT RODUCED W.E.F 01-04-2003 ITA NO. 30/AHD/2010 P AGE NO. ITA VS. MANSHUKHBHAI DAYABHAI PATEL 4 BY THE FINANCE ACT OF 2002. HENCE, THE RATIO OF TH E REFERRED JUDGMENTS WERE NOT APPLICABLE AFTER INSERTION OF SECTION 50C. ACC ORDINGLY, THE ASSESSING OFFICER REJECTED THE CLAIM OF THE ASSESSEE THAT HE HAD NOT PAID ANY ADDITIONAL AMOUNT FOR PURCHASE OF SUCH PROPERTY. FURTHER, LD. CIT(A) HAS DECIDED THIS ISSUE AS UNDER:- I HAVE GONE THROUGH THE CONTENTS OF THE AR OF THE APPELLANT AND ASSESSMENT ORDER FRAMED BY THE ASSESSING OFFICE R. AS THE EXPENSES WAS NOT REFLECTED IN THE BOOKS OF ACCOUNTS I.E. SELF-MADE CASH BOOK, LEDGER ETC. AND AS PER GUIDING PRINCIPLES REG ARDING MAINTENANCE OF PROPER AND ACCEPTABLE BOOKS OF ACCOU NTS ARE ENVISAGED BY SECTION 145 OF THE ACT, 1961. SECTION 145 OF THE ACT, 1961 CASTS ONUS ON THE ASSESSEE TO MAINTAIN BOOKS O F ACCOUNT IN SUCH MANNER AND AS APPELLANT FAILED TO MEET REQUIREMENTS OF SECTION 145 OF THE IT ACT, SUCH AS CORRECTNESS, COMPLETENESS AND I RREGULARITY; I CONFIRM THE ASSESSING OFFICERS ACTION FOR REJECTIO N OF BOOKS OF ACCOUNTS AND ALSO THE DISALLOWANCE @ 25% OF TOTAL U NVERIFIABLE EXPENDITURE AT RS. 7,57,857/- [ TOTAL OF RS. 30,31, 427/-] FOLLOWING THE RATIO LAID DOWN IN VIJAY PROTEINS LTD. 9TTJ 76) IN CASE DECIDED BY ITAT AHMEDABAD. SECOND GROUND OF APPEAL RELATES TO DIFFERENCE OF ST AMP VALUATION. ITAT, AHMEDABAD IN CASE OF BHARAT PATEL (ITA NO. 749/AHD/2008), HAS THE FOLLOWING OBSERVATION ON THI S VERY ISSUE. AFTER CAREFUL CONSIDERATION OF THE RIVAL SUBMISSIO NS, FACTS AND CIRCUMSTANCES OF THE CASE, PROVISIONS OF LAW AS WELL AS DECISION(S) OF HONBLE SUPREME COURT AND VARIOUS BENCHES RELIED UPON BY THE PARTIES, WAS ARE OF THE OPINION THAT THE CIT(APPEALS) WAS NOT JUSTIFIED IN CONFIRMING THE AD DITION BY DRAWING THE ANALOGICAL PROVISIONS OF SECTION 50C OF THE ACT. THE CIT(APPEALS) CONFIRMED THE ADDITION BY OBSERVIN G THAT IF THIS PROPOSITION IS TO BE ACCEPTED, THEN THE DEEMIN G PROVISIONS OF SECTION 50C OF THE ACT WILL BECOME INOPERABLE. HE, FURTHER, HELD THAT SECTION 50C OF THE ACT IS APPLICABLE TO T HE SELLER AND PROVIDES THAT THE VALUATION MADE BY THE STAMP VALUA TION AUTHORITY IS TO BE DEEMED AS THE CONSIDERATION RECE IVED BY THE SELLER. HAVING SAID SO, THE CIT(APPEALS) FURTHER H ELD THAT THE ITA NO. 30/AHD/2010 P AGE NO. ITA VS. MANSHUKHBHAI DAYABHAI PATEL 5 CONVERSE WILL ALSO HAVE TO BE ACCEPTED AS TRUE, I.E . THE VALUATION OF THE STAMP VALUATION AUTHORITY WILL HAVE TO BE DE EMED AS THE CONSIDERATION PAID BY THE PURCHASER OF THE PROPERTY AS WELL. WE ARE UNABLE TO AGREE WITH THE AFORESAID ANALOGY D RAWN BY THE CIT(APPEALS) BECAUSE HAD THE LEGISLATURE INT ENDED SO, IT COULD HAVE EASILY SPECIFIED SUCH A PROPOSITION IN T HE PROVISION ITSELF. IN VIEW OF THE SETTLED PROPOSITION OF LAW THAT THE APPELLATE AUTHORITY HAS NO RIGHT EITHER TO ADD OR T O DELETE ANY WORD FROM THE PROVISIONS OF LAW UNLESS AND UNTIL TH E SAME ARE FOUND TO BE HAVING SOME AMBIGUITY, WE ARE UNABLE TO SUSTAIN THE STAND OF THE CIT(A), THERE BEING NO AMBIGUITY I N THE SECTION 50C OF THE ACT, WE ARE OF THE OPINION THAT THESE PR OVISIONS ARE NOT APPLICABLE TO THE PURCHASER. THERE IS NO DENYING THE FACT THAT EH ADDITION IN TH E HANDS OF THE PURCHASER IS MADE ON THE BASIS OF THE DEEMIN G PROVISIONS OF SECTION 50C OF THE IT ACT. THE ADDITION HOWEVER IS MADE U/S 69B, BEING UNDISCLOSED INVESTMENT. WHAT CANNOT BE DENIED IS THAT, SUCH ADDITION IS MADE WITHOUT ANY SUBSTANTIVE OR CORROBORATIVE EVIDENCE TO SHOW THAT THE PURCHASE PR ICE ACTUALLY PAID WAS MORE THAN WHAT HAS BEEN SHOWN IN THE PURCH ASE DEED. THUS, PLACING RELIANCE OF THE DECISION OF THE HON,B LE ITAT AHMEDABAD (SUPRA), THE AO IS DIRECTED TO DELETE THE ADDITION OF THE SUM OF RS. 1,73,001/-. IN THE CASE BEFORE ME ALSO THE FACTS OF THE ADDITIO N MADE BY THE ASSESSING OFFICER FOR STAMP VALUATION DIFFERENCE AR E SIMILAR WITH ABOVE MATTER. THEREFORE, IN MY OPINION ADDITION MA DE BY THE A.O FOR DIFFERENTIAL AMOUNT OF RS. 18,23,917/- FOLLOWING TH E ITATS JUDGMENT; THAT IS THE HIGHER JUDICIAL FACT FINDINGS AUTHORITY ; DESERVES TO BE DELETED. 7. WE DO NOT FIND ANY INFIRMITY INTO THE ORDER OF L D. CIT(A) AS THE REVENUE HAS NOT PLACED ANY EVIDENCE SUGGESTING THAT THE PROPERTIES WERE PURCHASED AT A HIGHER VALUE THAN THE DECLARED BY TH E ASSESSEE AND THE VALUE ITA NO. 30/AHD/2010 P AGE NO. ITA VS. MANSHUKHBHAI DAYABHAI PATEL 6 ADOPTED BY THE STAMP VALUATION AUTHORITY WAS IN FAC T CORRECT. NO SUCH EVIDENCE HAS BEEN PLACED ON RECORD. MOREOVER, SECT ION 50C OF THE ACT APPLIES ON THE TRANSFEROR OF THE PROPERTY, THEREFOR E, WOULD NOT APPLY TO THE PURCHASER OF THE PROPERTY. THEREFORE, RESPECTFULLY FOLLOWING THE RATIO LAID BY THE HONBLE CO-ORDINATE BENCH IN ITA NO. 1749/AHD/2 008, THIS GROUND OF THE REVENUES APPEAL IS DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE. SD/- SD/- (A.K. GARODIA) (KUL BHARAT) ACCOUNTANT MEMBER JU DICIAL MEMBER AHMEDABAD : DATED 28 /09/2012 A.K. / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. / CONCERNED CIT 4. - / CIT (A)-III, BARODA 5. , ! , '# / DR, ITAT, AHMEDABAD 6. $% &' / GUARD FILE. BY ORDER/ , ( / ' ) ! , '# *