Sri.Gopala Pillai Sivadasan Nair, Trivandrum V. The iTO, Trivandrum

ITA 318/COCH/2018

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 8269 (ITAT-COCHIN)
• Duration Of Justice: 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-10-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 05-07-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A S BINDHU
• Assessee Lawyers: K K JOHN ITP
• Keywords: Cost of acquisition

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI CHANDRA POOJAR I, AM & SHRI GEORGE GEORGE K, JM ITA NO. 318 /COCH/201 8 : ASST.YEAR 2008 - 2009 SRI. GOPALA PILLAI SIVADASAN NAIR, C/O.K.K. JOHN INCOME TAX PRACTITIONER, ORA 129, ALAPATT KIXHAKUDAN HOUSE, CHOONDY, ALUVA - 683 112. PAN : BXTPS9022F . VS. THE INCOME TAX OFFICER WARD 1(3) THIRUVANANTHAPURAM. (APPELLANT) (RESPONDENT) APPELLANT BY : SRI. K.K.JOHN, ITP RESPONDENT BY : SMT.A.S.BINDHU , SR.DR DATE OF HEARING : 25 .09.2018 DATE OF PRONOUNCEMENT : 03.10 .2018 O R D E R PER GEORGE GEORGE K., JM THIS APPEAL AT THE INSTANCE OF THE ASSESSEE IS DIRECTED AGAINST THE COMMISSIONER OF INCOME - TAX (APPEALS)S ORDER 3 RD MAY, 2018. THE RELEVANT ASSESSMENT YEAR IS 2008 - 2009 . 2. THE GROUND GROUNDS RAISED READ AS FOLLOWS: - 1. THE ORDER OF THE COMMISSIONER OF INCOME - TAX (APPEALS) DATED 03.05.2018, WITHOUT DISCUSSING OR TAKING INTO CONSIDERATION THE DOCUMENTARY EVIDENCES PRODUCED AND SUBMISSIONS MADE BY THE APPELLANT IS OPPOSED TO LAW, FACTS AND EVIDENCES OF THE CASE. 2. THE LEARNED CIT(APPEALS) ERRED IN CONFIRMING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER BY NOT ALLOWING THE CLAIM OF IMPROVEMENTS AND THE INDEXED CO ST THEREOF IN SPITE OF PROOF SUBMITTED. ITA NO. 318 / COCH /201 8 . SRI. GOPALA PILLAI SIVADASAN NAIR . 2 3. THE LEARNED CIT(APPEALS), ERRED IN OVERLOOKING THE FACT THAT STAMP DUTY AND REGISTRATION CHARGES INCURRED HAVE NOT BEEN ALLOWED BY THE ASSESSING OFFICER, WHILE COMPUTING THE COST OF ACQUISITION OF THE ACQUIRED L AND. 4. FOR THIS AND OTHER GROUNDS AND DOCUMENTS THAT MAY BE SUBMITTED AT THE TIME OF HEARING, IT IS HUMBLY PRAYED THAT THE HON.TRIBUNAL MAY BE PLEASED TO ALLOW THE APPEAL AND DIRECT THAT THE CLAIM OF THE APPELLANT FOR INDEXED COST OF IMPROVEMENT MAY BE ALLOWED. 3. BRIEF FACTS OF THE CASE ARE AS FOLLOWS: - 3.1 THE ASSESSEE IS A RETIRED EX - SERVICEMAN (DRIVER). THE ASSESSEE WAS IN POSSESSION OF 34 CENTS OF LAND IN PETTAH VILLAGE, TRIVANDRUM. HE HAD PURCHASED THE SAID PROPERTY DURING THE FINANCIAL YEAR 199 3 - 1994 FOR A TOTAL CONSIDERATION OF RS.1,54,360, WHICH INCLUDES STAMP DUTY CHARGES. OUT OF 34 CENTS OF LAND, THE ASSESSEE HAS SOLD 6 CENTS OF LAND FOR A CONSIDERATION OF RS.45,000 PER CENT IN APRIL, 1996. THE BA LANCE 28 CENTS OF LAND WAS COMPULSORILY ACQUI RED BY THE SPECIAL TA HSILDAR (LAND ACQUISITION), IN TERNATIONAL AIRPORT, TRIVANDRUM, FOR A TOTAL CONSIDERATION OF RS.16,73,815. 3.2 THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2008 - 2009 DECLARING LOSS FROM LONG TERM CAPITAL GAIN S (LTCG) AT RS.6,02,447. IN THE COMPUTATION STATEMENT, THE ASSESSEE HAD CLAIMED INDEXED COST OF ACQUISITION OF PROPERTY AT RS.22,76,262 . THE ASSESSING OFFICER, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, CALLED FOR THE ORIGINAL PURCHASE DEED AND ON PERUSAL OF THE SAME IT ITA NO. 318 / COCH /201 8 . SRI. GOPALA PILLAI SIVADASAN NAIR . 3 WAS NOTICED THAT THE COST OF ACQUISITION OF THE PROPERTY IN THE FINANCIAL YEAR 1993 - 94 WAS ONLY RS.1,36,000 (NOT INCLUDING STAMP DUTY CHARGES). FURTHER, IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE FILED REVISED COMPUTATION STATEME NT FOR LTCG ON 13.12.2010 . IT WAS CLAIMED IN THE REVISED COMPUTATION THAT ASSESSEE HAD INCURRED COST OF IMPROVEMENT ON THE SAID PROPERTY AT RS.8,000 PER CENT. THE ASSESSING OFFICER HELD THAT SINCE THE ASSESSEE DID NOT CLAIM ANY COST OF IMPROVEMENT IN THE O RIGINAL RETURN OF INCOME FILED, THE SAME CANNOT BE ENTERTAINED. ACCORDINGLY THE ASSESSMENT WAS COMPLETED BY REDUCING THE INDEXED COST OF ACQUISIT ION AT RS.2,52,918 FROM THE TOTAL COMPENSATION RECEIVED FOR 28 CENTS OF LAND. THE ASSESSING OFFICER DETERMINED THE INCOME ON ACCOUNT OF LTCG AT RS.14,20,900 (16,73,815 2,52,918). 4. AGGRIEVED BY THE ASSESSMENT ORDER IN DETERMINING THE LTCG AT RS.14,20,900 , THE ASSESSEE FILED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. THE C OPIES OF N OTARIZED ENGLISH TRANSLAT ION OF THE DOCUMENTS AND COPIES OF TRANSLATED PAGES OF THE NOTE BOOK, WHEREIN THE EXPENSES INCURRED FOR FILLING UP THE LAND WERE PRODUCED BEFORE THE CIT(A) . THE CIT(A), HOWEVER, CONFIRMED THE ASSESSMENT ORDER . 5. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL. THOUGH THE ASSESSEE HAD RAISED A GROUND THAT STAMP DUTY AND REGISTRATION CHARGES INCURRED SHOULD BE ALLOWED WHILE COMPUTING THE COST OF ACQUISITION, THE SA ID GROUND WAS NOT ARGUED IN THE COURSE OF HEARING BEFORE THE TRIBUNAL. THE ONLY ITA NO. 318 / COCH /201 8 . SRI. GOPALA PILLAI SIVADASAN NAIR . 4 ISSUE THAT WAS ARGUED WAS WHETHER THE INDEXED COST OF IMPROVEMENT BEING EXPENDITURE INCURRED FOR FILLING UP OF LAND AND CONSTRUCTION OF COMPOUND WALL WA S TO BE TAKEN INTO ACCOU NT FOR CALCULATION OF LTCG. THE LEARNED COUNSEL FOR THE ASSESSEE HAD FILED A PAPER BOOK ENCLOSING COPY OF NOTARIZED TRANSLATION OF SALE DEED DATED 15.04.1996, EVIDENCING THE SALE OF 6 CENTS OF LAND, THE TRANSLATED ORIGINAL PURCHASE DEED EXECUTED IN THE FIN ANCIAL YEAR 1993 - 1994 FOR A TOTAL CONSIDERATION OF RS.1,54,360, THE NOTICE ISSUED U/S 9(13) OF THE LAND ACQUISITION ACT, 1894 ETC . IT WAS FURTHER SUBMITTED THAT THE ASSESSEE HAD PRODUCED BEFORE THE CIT(A), THE OLD NOTE BOOK WHEREIN THE EXPENSES INCURRED FO R IMPROVEMENT OF LAND AND THE TRANSLATED PAGES OF NOTE BOOK. THE LEARNED COUNSEL TOOK US THROUGH THE T RANSLATED PAGE OF THE NOTE BOOK, WHEREIN THE TOTAL EXPENSES INCURRED FOR LAND FILLING AND CONSTRUCTION OF COMPOUND WALL WAS WORKED OUT MORE THAN RS.8,000 PER CENT. IT WAS SUBMITTED BY THE LEARNED COUNSEL THAT THE CONCLUSION OF THE CIT(A) THAT NO EVIDENCE WAS PRODUCED FOR INCURRING OF COST OF IMPROVEMENT IS INCORRECT. 5.1 THE LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE OTHER H AND, STRONGLY SUPPORTED THE ORDERS OF THE INCOME - TAX AUTHORITIES. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE SOLITARY ISSUE THAT WAS ARGUED BEFORE US IS THE DISALLOWANCE OF THE CLAIM OF INDEXED COST OF IMPROVEMENT. THE ASSESSEE HAD PRODUCED THE ORIGINAL PURCHASE DEED EXECUTED FOR THE FINANCIAL YEAR 1993 - 1994 FOR A ITA NO. 318 / COCH /201 8 . SRI. GOPALA PILLAI SIVADASAN NAIR . 5 TOTAL CONSIDERATION OF RS.1,54,360 . IN THE SA ID SALE DEED, THE DESCRIPTION OF THE PROPERTY IS ENUMERATED AS PADDY FIELD. THE ASSESSEE HAS ALSO PRODUCED A COPY OF THE LAND ACQUISITION NOTICE U/S 9(13) OF THE LAND ACQUISITION ACT, 1894, WHEREIN IT IS CLEARLY ENUMERATED THE LAND AS A FILLED WET LAND . THEREFORE, THESE DOCUMENTS CLEARLY SHOW THAT WHEN THE PURCHASE OF THE IMPUGNED PROPERTY WAS MADE, IT WAS A WET LAND AND SUBSEQUENTLY WHEN IT WAS COMPULSORILY ACQUIRED, THE SAME WAS A FILLED WET LAND. THE LEARNED AR, IN THE COURSE OF HEARING, HAD PRODUCED OLD NOTE BOOK, WHEREIN THE EXPENDITURE INCURRED FOR FILLING UP OF THE LAND AND CONSTRUCTING A COMPOUND WALL WAS HAND - WRITTEN . T HE TRANSLATED COPIES OF THE SAID NOTE BOOK WAS ENCLOSED IN THE PAPER BOOK FILED BY THE ASSESSEE. THE TRANSLATED VERSION OF THE NO TE BOOK WAS PRODUCED BEFORE THE CIT(A) AND THE SAME IS CERTIFIED BY THE AUTHORIZED REPRESENTATIVE. THEREFORE, THE CONCLUSION OF THE CIT(A) THAT NO EVIDENCES WERE PRODUCED BEFORE HIM , FOR INCURRING COST FOR IMPROVEMENT OF LAND, WAS FACTUALLY INCORRECT. THERE IS NO DOUBT THAT THE LAND PURCHASED BY THE ASSESSEE WAS PADDY WET LAND, WHICH WAS SUBSEQUENTLY FILLED UP AND THE SAME IS EVIDENCED FROM BOTH THE PURCHASE DEED AND THE LAND ACQUISITION NOTICE. THE ASSESSEE , OUT OF 34 CENTS, HAD SO LD 6 CENTS OF LAND IN APRIL 1996 . THE SAID 6 CENTS OF LAND WAS SOLD AFTER INCURRING COST FOR IMPROVEMENT AND HAD FETCHED HIGHER SALE PRICE OF RS.45,000 PER CENT COMPARED TO RS.4,500 PER CENT FOR WHICH IT WAS PURCHASED IN THE YEAR 1993 . THE ASSESSEE HAS ALS O PRODUCED THE DETAILS OF THE EXPENSES INCURRED FOR FILLING OF LAND AND COMPOUND WALL, ITA NO. 318 / COCH /201 8 . SRI. GOPALA PILLAI SIVADASAN NAIR . 6 WHICH WORKED OUT TO MORE THAN RS.8,000 PER CENT. I N THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE VIEW THAT THE ASSESSING OFFICER AND THE CIT(A) WERE NOT JUSTIF IED IN DENYING THE CLAIM OF INDEXED COST OF IMPROVEMENT ON THE LAND. ACCORDINGLY, WE DIRECT THE A.O. TO RE - CALCULATE THE LTCG AFTER TAKING INTO ACCOUNT THE INDEXED COST OF IMPROVEMENT OF RS.8,000 PER CENT , WHICH WAS INCURRED DURING THE PERIOD JULY 1995 TO MARCH 1996 . IT IS ORDERED ACCORDINGLY. 7 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED AS INDICATED ABOVE . ORDER PRONOUNCED ON THIS 03 RD DAY OF OCTOBER , 2018 . SD/ - SD/ - ( CHANDRA POOJARI ) ( GEORGE GEORGE K. ) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN ; DATED : 03 RD OCTOBER , 2018 . DEVDAS* COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT. REGISTRAR) ITAT, COCHIN 1. THE APPELLANT 2. THE RESPONDENT. 3. THE PR.CIT TRIVANDRUM 4. THE CIT (A) , THIRUVANANTHAPURAM . 5. DR, ITAT, COCHIN 6 . GUARD FILE.