Ratan Paul , Coochbehar V. ITO, Ward - 2(2), Coochbehar , Coochbehar

ITA 312/KOL/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1838 (ITAT-KOLKATA)
• Duration Of Justice: 6 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 21-02-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SATYAJIT MONDAL
• Assessee Lawyers: MIRAJ D. SHAH
• Keywords: Gift; Salary income; Valuation report

Judgement Text

ITA NO.312/KOL/2018 RATAN PAUL A.Y.2013-14 1 IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH SMC K OLKATA [BEFORE HONBLE SHRI J.SUDHAKAR REDDY, AM] ITA NO.312/KOL/2018 ASSESSMENT YEAR : 2013-14 RATAN PAUL -VERSUS- I.T.O., WARD-2 (2) KOLKATA KOLKATA (PAN: ACFPA 9161K) (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI MIRAJ D.SHAH, AR FOR THE RESPONDENT: SHRI SATYAJIT MONDAL, ADDL.CIT DATE OF HEARING : 28.06.2018. DATE OF PRONOUNCEMENT : 05.09.2018. ORDER PER J.SUDHAKAR REDDY, AM: THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AG AINST THE ORDER OF THE COMMISSIONER OF INCOME TAX-(A)-JALPAIGURI DATED 05. 12.2017 PASSED U/S 250 OF THE INCOME TAX ACT, 1961 (THE ACT ) RELATING TO A.Y. 2013-14. 2. THE FACTS OF THE CASE ARE BROUGHT OUT BY THE LD . CIT(A) IN DETAIL BY THE CIT(A) IN HIS ORDER FROM PAGES 4 TO 9 OF HIS ORDER. FOR SA KE OF BREVITY I DO NOT EXTRACT THE SAME. THE ASSESSEE IS AN INDIVIDUAL AND DERIVES INCOME FR OM LAND. THE ISSUE WHICH IS BEFORE ME IS THE COMPUTATION OF LONG TERM CAPITAL GAIN ON SALE OF LAND. THE ASSESSEE PURCHASED LAND ON 28.12.1990 FOR RS.9,000/-. HE CLA IMED THAT HE HAD CARRIED OUT IMPROVEMENTS ON THIS LAND. THE COST OF IMPROVEMENT INCURRED AND CLAIMED BY THE ASSESSEE AND THE COST OF IMPROVEMENT ALLOWED BY THE LD. AO IS AS FOLLOWS :- A.Y. COST OF IMPROVEMENT EXPENSES CLAIMED BY ASSESSEE EXPENSES ALLOWED BY THE AO 1990-91 RS.3,50,000/- RS.6,898/- ITA NO.312/KOL/2018 RATAN PAUL A.Y.2013-14 2 1991-92 RS.3,45,000/- RS.8,892/- 1992-93 RS.2,50,150/- RS.9,505/- 2012-13 RS.3,36,000/- RS.1,27,546/- THE ABOVE SAID LAND WAS SOLD FOR RS.46,00,000/-. TH E AO WAS OF THE VIEW THAT THE ASSESSEE BEING A GOVERNMENT EMPLOYEE, DID NOT HAVE ADEQUATE SOURCES TO SUBSTANTIATE HIS CLAIM THAT, EXPENSES WERE INCURRED BY HIM TOWAR DS COST OF IMPROVEMENT ON THE LAND FROM A.Y.1990-91 TO 1992-93 AND FOR THE A.Y.20 12-13. HE TOOK INTO ACCOUNT THE SALARY EARNED BY THE ASSESSEE DURING THESE YEARS AN D 50% OF THE SALARY WAS ALLOWED AS EXPENDITURE INCURRED TOWARDS COST OF IMPROVEMENT OF THE LAND. 3. THE ASSESSEE CLAIMED THAT HE HAS RECEIVED GIFTS FROM FRIENDS AND RELATIVES FOR ALL THESE ABOVE REFERRED ASSESSMENT YEARS AND THE S OURCE OF EXPENDITURE FOR IMPROVEMENT OF LAND WERE THESE CASH GIFTS FROM TOTA L 18 DONORS. GIFT DEEDS WERE FILED FROM ALL THESE 18 PERSONS, FROM WHOM THE ASSESSEE C LAIMED TO HAVE RECEIVED DONATIONS. ON THE DIRECTIONS OF THE AO, THE ASSESSE E PRODUCED 11 DONORS ON 31.08.2016 AND 4 DONORS ON 16.09.2016 AND THREE DON ORS COULD NOT BE PRODUCED. OUT OF THE 11 GIFT DONORS PRODUCED ON 31.08.2016, FOUR DONORS DENIED THAT THEY HAVE GIVEN GIFTS TO THE ASSESSEE. SEVEN DONORS, THOUGH CONFIRM ED THE GIFT HAD STATED THAT THE GIFT DEED WAS EXECUTED IN THE YEAR 2016 ITSELF, WHEREAS THE DATE OF EXECUTION ON THE GIFT DEEDS AS PRODUCED BY THE ASSESSEE WAS RECORDED AS T HE DATE OF GIFT DEEDS I.E. EITHER IN THE YEAR 1990 OR 1991 ETC. SOME OF THE GIFT DONORS HAD STATED THAT THE GIFT DEEDS IN QUESTION WERE EXECUTED IN THAT YEAR IN WHICH THE CA SH GIFTS WERE GIVEN. IN VIEW OF SUCH CONTRADICTORY STATEMENT, THE CLAIM OF THE ASSE SSEE WAS NOT ACCEPTED BY THE AO. ON APPEAL THE FIRST APPELLATE AUTHORITY CONFIRMED T HE SAME., AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE ME. 4. I HAVE HEARD RIVAL CONTENTIONS. THE ENTIRE ISSUE IN MY VIEW HAS BEEN DIVERTED IN THIS CASE. THE ISSUE IS WHETHER THE ASSESSEE HAS IN CURRED EXPENDITURE TOWARDS COST OF IMPROVEMENT OF THE LAND ACQUIRED BY HIM. THE SAID E XPENDITURE IS CLAIMED TO HAVE BEEN INCURRED BY HIM DURING THE FINANCIAL YEAR 1990 -91, 1991-92 AND 1992-93. THIS IS MORE THAN 25 YEARS AGO. NOW, TO ASK THE ASSESSEE TO SUBSTANTIATE THE SOURCE OF INCOME ITA NO.312/KOL/2018 RATAN PAUL A.Y.2013-14 3 EARNED BY HIM IN THESE YEARS FOR MEETING HIS CLAIM OF HAVING INCURRED EXPENDITURE FOR IMPROVEMENT OF LAND AND TO ADJUDICATE THE SAME, IS IN MY VIEW UNCALLED FOR. THE BETTER WAY WOULD HAVE BEEN TO EXAMINE AS TO WHETHER THE ASSESSEE HAD ACTUALLY INCURRED THE EXPENDITURE AS CLAIMED. IF THE ASSESSE E CANNOT PRODUCE THE EVIDENCE OF HAVING INCURRED SUCH EXPENDITURE, ON THE GROUND THA T IT IS VERY OLD, THEN A VALUATION REPORT CAN BE TAKEN FROM A VALUER IN SUPPORT OF THE CLAIM. ALLOWING 50% OF THE SALARY INCOME AS EXPENDITURE INCURRED IS IN MY VIEW IS NOT CORRECT. AT THE SAME TIME THE CLAIM OF THE ASSESSEE OF HAVING RECEIVED CASH GIFTS IN THESE YEARS DOES NOT APPEAR TO BE CORRECT, THOUGH CERTAIN DONORS HAVE CONFIRMED THE G IFTS. SOME OF THE DONORS DENIED HAVING GIVEN THE GIFTS. SOME DONORS DISPUTE THE DAT E OF EXEXUTION OF THE GIFT DEEDS. 5. IN VIEW OF THE IRRATIONAL MANNER IN WHICH THE SO URCE OF THE ASSESSEE 25 YEARS AGO IS SOUGHT TO BE EXAMINED AND ALSO IN VIEW OF TH E UNSUBSTANTIATED EXPLANATIONS SOUGHT TO BE BROUGHT ON RECORD BY THE ASSESSEE, I A M OF THE CONSIDERED OPINION THAT INTEREST OF JUSTICE WOULD BE MET IF THE CLAIM OF TH E ASSESSEE IS CONSIDERED ON ADHOC MANNER AS THE AO HAD ACCEPTED PART CLAIM OF THE ASS ESSEE. THE EXPENDITURE INCURRED ON COST OF IMPROVEMENT MAY BE ALLOWED AT 25% OF THAT WHICH IS CLAIMED BY THE ASSESSEE IN EACH OF T HE A.YRS. 1990-91, 1991-92, 1992- 93 AND 2012-13 AND THE LONG TERM CAPITAL GAIN COM PUTED ACCORDINGLY. I ORDER ACCORDINGLY. 6. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLO WED IN PART. O RDER PRONOUNCED IN THE COURT ON 05.09.2018. SD/- [ J.SUDHAKAR REDDY ] ACCOUNTANT MEMBER DATED : 05.09.2018. [RG SR.PS] ITA NO.312/KOL/2018 RATAN PAUL A.Y.2013-14 4 COPY OF THE ORDER FORWARDED TO: 1.RATAN PAUL, C/O D.J.SHAH & CO., KALYAN BHAVAN, 2, ELGIN ROD, KOLKATA-700020. 2. I.T.O., WARD-2(2), COOCHBEHAR 3. C.I.T.(A)- JALPAIGURI 4. C.I.T-JALPAIGURI 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER, SENIOR PRIVATE SECRETARY HEAD OF OFFICE/D.D.O, ITAT KOLKATA BENCHES