Income-tax Officer, V. Shri Prasad Ramchandra Waghmare, Pune

ITA 334/PUN/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2693 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 11 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 15-02-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 21-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HITENDRA NINAWE
• Keywords: Sale consideration of property below Jantri Value; Cost of acquisition
• Section: 144

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE . . , ! , # $ BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.334/PN/2014 #& & / ASSESSMENT YEAR : 2005-06 ITO, WARD-10(2), PUNE . / APPELLANT V/S SHRI PRASAD RAMCHANDRA WAGHMARE, NEAR DATTA MANDIR, AT POST WAKAD, MULSHI, PUNE 411 057 PAN NO.AAYPW5569J . / RESPONDENT . / ITA NO.335/PN/2014 #& & / ASSESSMENT YEAR : 2005-06 ITO, WARD-10(2), PUNE . / APPELLANT V/S SHRI RAMCHANDRA VITTHAL WAGHMARE, NEAR DATTA MANDIR, AT POST WAKAD, MULSHI, PUNE 411 057 PAN NO.AAPPW5101A . / RESPONDENT / ASSESSEE BY : SHRI SUHAS BORA / REVENUE BY : SHRI HITENDRA NINAWE / ORDER PER R.K. PANDA, AM : THE ABOVE 2 APPEALS FILED BY THE REVENUE ARE DIRECTED A GAINST THE SEPARATE ORDERS DATED 27-11-2013 OF THE CIT(A) CEN TRAL, PUNE RELATING TO ASSESSMENT YEAR 2005-06. SINCE IDENTICAL GROU NDS HAVE / DATE OF HEARING :15.02.2016 / DATE OF PRONOUNCEMENT: 17.02.2016 2 ITA NO.334 & 335/PN/2014 BEEN TAKEN BY THE RESPECTIVE ASSESSEES, THEREFORE, FOR T HE SAKE OF CONVENIENCE, THESE WERE HEARD TOGETHER AND ARE BEING D ISPOSED OF BY THIS COMMON ORDER. 2. FIRST WE TAKE UP ITA NO.335/PN/2014 AS THE LEAD CAS E. FACTS OF THE CASE, IN BRIEF, ARE THAT INFORMATION WAS RECEIVED FROM THE TRANSACTIONS REPORTED IN AIR FURNISHED U/S.285BA OF THE I .T. ACT THAT THE ASSESSEE HAS SOLD PROPERTY FOR A CONSIDERATION OF RS .81 LAKHS DURING THE YEAR F.Y. 2004-05. ON THE BASIS OF THIS INFORMATIO N A NOTICE U/S.142(1) WAS ISSUED TO THE ASSESSEE CALLING FOR THE RETURN OF INCOME FOR A.Y. 2005-06. ALTHOUGH THE NOTICE WAS DULY SER VED ON THE ASSESSEE, THERE WAS NO COMPLIANCE FROM THE SIDE OF THE A SSESSEE FOR WHICH THE AO ISSUED ANOTHER NOTICE TO THE ASSESSEE CALLIN G FOR THE FOLLOWING DETAILS : 1. IN CASE OF SALE OF PROPERTY DURING F.Y. 2004-05, PLEASE FURNISH DATE OF ACQUISITION OF THE PROPERTY, COST OF ACQUISITI ON OF THE PROPERTY WITH NECESSARY DOCUMENTARY EVIDENCE ALONG WITH A COPY OF THE SALE DEED. 2. DETAILS OF CAPITAL GAINS ACCRUED ON TRANSFER OF TH E PROPERTY DURING THE YEAR AND DETAILS OF CAPITAL GAINS TAX PAID. IN C ASE, EXEMPTION OF CAPITAL GAIN IS CLAIMED, PLEASE FURNISH THE NECESSARY EV IDENCE IN SUPPORT OF CLAIM OF EXEMPTION. 3. DETAILS OF BANK ACCOUNTS MAINTAINED BY THE ASSESSEE DU RING F.Y. 2004-05 ALONG WITH BANK PASS BOOKS/BANK ACCOUNT STATEME NTS. 4. STATEMENT OF ASSETS/LIABILITIES AS ON 31-03-2006. 3. SINCE THERE WAS NON-COMPLIANCE FROM THE SIDE OF THE AS SESSEE IN FURNISHING THE REQUISITE DETAILS THE AO COMPLETED THE ASS ESSMENT ON A TOTAL INCOME OF RS.81 LAKHS BEING THE CONSIDERATION R ECEIVED OR ACCRUED ON ACCOUNT OF SALE OF THE LAND. 4. BEFORE CIT(A) IT WAS SUBMITTED THAT THE PROPERTY SITU ATED AT 169/7, AND 170/9 WAKAD ADMEASURING 8000 SQ.FT. MTRS. WAS INHERITED TO THE R.V. WAGHMARE HUF DUE TO DEATH OR LATE VITTHAL 3 ITA NO.334 & 335/PN/2014 WAGHMARE. AS PER REVENUE RECORD (PAGE NO.16 AND ENGLISH TRANSLATION PAGE 30 OF PB) THE PROPERTY IS HELD BY FOLLOWING PERSONS: A. MAINAHAI VITTHAL WAGMARE : WIFE OF VITTHAL B.RAMCHANDRA VITHHAL WAGHMARE : SON C. SUGRABAI PUNDLIK KAMBLE : DAUGHTER D. ABAI BABAN BANSODE : DAUGHTER C. TABAI VITTHAL WAGHMARE : DAUGHTER 5. THE SAID PROPERTY IS SOLD BY THE HUF & OTHER PERSON S FOR RS. 40,00,000/- HAVING STAMP DUTY VALUE OF RS. 81,00,000/-. ON RECEIPT OF NOTICE U/S.142(1) OF THE INCOME TAX ACT, 1961 FROM THE I TO (CIB-3) PUNE, THE ASSESSEE HAS SUBMITTED REPLY ON 31.12.2007, IN WHICH HE HAS CATEGORICALLY STATED THAT HE IS A MEMBER OF R.V WAGH MARE HUF AND THE TRANSACTION REGARDING SALE OF PROPERTY WILL BE DISC LOSED IN THE RETURN OF R.V. WAGHMARE HUF. HOWEVER THE AO HAS NOT CO NSIDERED THE SUBMISSIONS GIVEN BY THE ASSESSEE AND CONSIDERED RS .81 LAKHS ,AS LONG TERM CAPITAL GAIN IN THE HANDS OF THE ASSESSEE A S WELL AS HIS SON ALSO. 6. THE ASSESSEE ALSO FILED THE FOLLOWING DETAILS A. COPY OF AGREEMENT DATED 14-03-2005 BETWEEN R.V.WAGH MARE HUF AND DEVISNEH PARK CO-OP HOUSING SOCIETY. B. COPY OF ACKNOWLEDGEMENT OF RETURN OF INCOME FILED A LONG WITH STATEMENT OF INCOME FILED BY R.V.WAGHMARE HUF 7. BASED ON THE DETAILS FILED THE LD.CIT(A) CALLED FOR A REMAN D REPORT FROM THE AO. HOWEVER, THERE WAS NO COMPLIANCE FRO M THE SIDE OF THE AO DESPITE REMINDERS FROM THE CIT(A). SINCE THERE W AS NO COMPLIANCE FROM THE SIDE OF THE AO IN SUBMITTING THE REMAND REPORT THE LD.CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE BY OBSERVING AS UNDER: 5.5 I HAVE GIVEN CAREFUL CONSIDERATION TO ALL THE FACTS BEFORE ME. AS ALREADY STATED, THE APPELLANT HAS FILED A COPY OF INDEX-II AND A COPY OF THE REGISTERED SALE DEED IN RESPECT OF THE PROPERTY BEARING THE ADDRESS 4 ITA NO.334 & 335/PN/2014 (A) SURVEY NO.169/7, 00 HECTOR 49 ARES AND 00 HECTOR , 41 ARES AND (B) SURVEY NO.170/9, 00 HECTOR, 39 ARES. IT IS SEEN THAT I N INDEX-II, THE NAME OF THE APPELLANT IN HIS INDIVIDUAL CAPACITY AS WELL A S ON BEHALF OF THE HUF ARE SHOWN AS THE SELLERS. THE NAME OF THE APPELLANT'S SON SHRI PRASAD R. WAGHMARE WHOSE CASE ON IDENTICAL FACTS IS ALSO BEING D ISPOSED OF SIMULTANEOUSLY THROUGH A SEPARATE ORDER, ALSO APPEARS AS ONE OF THE SELLERS. THE LD. AR EXPLAINED THAT IT IS A LEGAL REQUI REMENT TO MENTION THE NAMES OF ALL THE MEMBERS HAVING A SHARE IN THE HUF PRO PERTY INDIVIDUALLY. AS ALREADY STATED, A COPY OF THE RETURN OF INCOME FILED BY RAMCHANDRA VITTHAL WAGHMARE (HUF) ON 31/03/2008 HAS ALSO BEEN SUBMITTED BY THE APPELLANT, PERUSAL OF THE COMPUTATIO N OF INCOME FILED WITH THE SAID RETURN OF INCOME SHOWS THAT TOTAL INCOME FOR THE YEAR IN THE HANDS OF THE SAID HUF HAS BEEN ARRIVED AT AS BELOW :- I. INCOME FROM CAPITAL GAINS LONG TERM SALE OF LAND AT WAKAD (1/3 SHARE), 13,33,333/- DATE OF SALE 14-03-2005 COST OF ACQUISITION RS.1,30,667/- 01-04-1981 6,27,2 02/- WITH INDEXATION @480/100 CAPITAL GAIN 7,06,131/- TOTAL LONG TERM CAPITAL GAINS 7, 06,131/- GROSS TOTAL INCOME 7,06,131/- TOTAL INCOME 7,06,130/- 5.6 FROM THE ABOVE, IT IS EVIDENT THAT THE AMOUNT OF RS.13,33,333/- HAS BEEN ARRIVED AT, AT THE RATE OF 1/3 RD OF THE TOTAL CONSIDERATION (RS.40 LAKH) AS PER THE AGREEMENT REFERRED TO IN PARA 5.3 SUPRA. 5.7 AS ALREADY MENTIONED, THE ABOVE SUBMISSIONS OF THE A PPELLANT WERE FORWARDED TO THE AO AND THE CASE REMANDED TO HIM FOR A FACTUAL REPORT. IN THE SAID ORDER UNDER SECTION 250(4), ALL THE FACTU AL AVERMENTS OF THE APPELLANT WERE MENTIONED IN DETAIL FOR THE REQUISITE INQUIRY TO BE CONDUCTED. HOWEVER, AS MENTIONED, NO REPORT HAS SO F AR BEEN RECEIVED FROM THE AO. UNDER THE CIRCUMSTANCES, HAVING CONSIDER ED THE SUBMISSIONS OF THE LD. AR BACKED BY THE EVIDENCE DISCUSSED IN PARA 5.4 AND 5.5 (SUPRA), THE ADDITION MADE BY THE AO WHILE C OMPLETING ASSESSMENT EX-PARTE UNDER SECTION 144 IS DELETED. CONSEQU ENTLY, THESE GROUNDS OF APPEAL ARE HEREBY ALLOWED. 8. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REVENUE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE CIT(A) WAS JUSTIFIED IN DIRECTING THE AO TO DELET E THE ENTIRE ADDITION MADE ON ACCOUNT OF LONG TERM CAPITAL GAIN, WITHOUT APPRECIATING THE FACT THAT EVEN AS PER THE CONTENTIO N OF THE ASSESSEE IT IS CLEAR THAT HE IS OWNER OF 1/3 RD SHARE OF THE PROPERTY AND IS LIABLE TO PAY TAXES ATLEAST ON HIS 1/3 SHARE OF RS. 81 LAKHS U/S 50 C FROM SALE OF THE SAID PROPERTY? 2. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) WAS CORRECT IN DELETING THE ENTIRE ADDITION OF CAPITAL GAINS MADE U/S 144 ON AN INFORMATION RECEIVED UNDER CIB ONLY ON THE SUBMISSIONS 5 ITA NO.334 & 335/PN/2014 THAT 1/3 RD WAS SHOWN BY HUF, WITHOUT TAKING ALL THE STEPS REQUIRE D TO BRING TAXATION OF ENTIRE SALE AMOUNTS TO TAX AS PER LA W, MORE SO WHEN IT IS EVIDENT THAT ENTIRE TRANSACTION HAS NOT BEEN TAXED AND THE AO WAS PREVENTED DURING REGULAR ASSESSMENT BY NOT SUBMITTING FU LL DETAILS, FORCING HIM TO COMPLETE IT EX- PARTE U/S 144? 3. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTER ANY OF THE ABOVE GROUNDS OF APPEAL. 9. (IDENTICAL GROUNDS HAVE BEEN TAKEN IN THE CASE OF SHR I PRASAD RAMCHANDRA WAGHMARE). 10. THE LD. DEPARTMENTAL REPRESENTATIVE HEAVILY RELIED ON THE ORDER OF THE AO. HE SUBMITTED THAT THE CIT(A) WAS NOT J USTIFIED IN DIRECTING THE AO TO DELETE THE ENTIRE ADDITION MADE ON ACCOUNT OF LONG TERM CAPITAL GAIN ESPECIALLY WHEN THE ASSESSEE IS HAVING O NLY 1/3 RD SHARE OF THE PROPERTY AND IS LIABLE TO PAY TAX ATLEAST ON HIS 1/3 RD SHARE OF RS.81 LAKHS U/S.50C ON ACCOUNT OF SALE OF THE SA ID PROPERTY. FURTHER, WHEN THE ASSESSEE HAD NOT FILED ANY DETAILS BEFOR E THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE CIT(A) W AS NOT JUSTIFIED IN GIVING RELIEF TO THE ASSESSEE. HE ACCORDINGLY SU BMITTED THAT THE MATTER MAY BE SET ASIDE TO THE FILE OF THE AO FO R FRESH ADJUDICATION. 11. THE LD. COUNSEL FOR THE ASSESSEE ON THE OTHER HAND WHILE SUPPORTING THE ORDER OF THE CIT(A) SUBMITTED THAT THE SA LE DEED CATEGORICALLY MENTIONS THAT SHRI RAMCHANDRA VITTHAL WAGHM ARE HAS EXECUTED THE SALE DEED AS KARTA OF SHRI RAMCHANDRA VITT HAL WAGHMARE HUF. THE HUF HAS DISCLOSED THE SAID TRANSACTION IN RESPECT OF THEIR SHARE IN THE RETURN OF INCOME FILED ON 3 1-03-2008. FURTHER, DESPITE REPEATED OPPORTUNITIES GIVEN BY THE CIT (A) THE AO HAS NOT SUBMITTED ANY REMAND REPORT WHICH MEANS THAT HE HAS NOT FOUND ANY ADVERSE MATERIAL AGAINST WHAT WAS SUBMITTED DU RING THE 6 ITA NO.334 & 335/PN/2014 APPEAL PROCEEDINGS. HE ACCORDINGLY SUBMITTED THAT THE O RDER OF THE CIT(A) BE UPHELD. 12. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOT H THE SIDES, PERUSED THE ORDERS OF THE AO AND CIT(A) AND THE P APER BOOK FILED ON BEHALF OF THE ASSESSEE. WE FIND IN THE INSTANT CASE THE ASSESSEE ALONG WITH VARIOUS OTHER PERSONS HAS SOLD THE PROPERTY FOR A CONSIDERATION OF RS.40 LAKHS AND THE MARKET VALUE FOR THE PURPOSE OF STAMP DUTY IS RS.81 LAKHS. AS PER INDEX NO.2, THE NAME O F THE VENDORS ARE AS UNDER : 1. RAMCHANDRA VITTHAL WAGHMARE, R/AT WAKAD, PUNE 2. PRAMOD RAMCHANDRA WAGHMARE 3. PRASAD RAMCHANDRA WAGHMARE 4. PRASHANT RAMCHANDRA WAGHMARE 5. VARSHARANI SANJAY SANKPAL 6. FULRANI PRAVIN KADLAK 7. ABAI BABAN BANSODE 8. NABAI DADU JAGTAP 9. SNEH CONSTRUCTION ASSOCIATES THROUGH PARTNER SHRI NITIN KANHAYALAL BHANSALI OF SHIVAJINAGAR, PUNE 411005 10. SAMPAT BHIMA WAGHMARE (MAHAR) THROUGH ATTORNEY HOLDER SHRI NITIN KANHAYALAL BHANSALI. 11. DEVI CONSTRUCTION CO. THROUGH PARTNER VINOD WANI . 13. WE FIND AFTER CONSIDERING THE VARIOUS SUBMISSIONS MADE BY THE ASSESSEE THE LD.CIT(A) CALLED FOR A REMAND REPORT FROM THE AO. HOWEVER, SINCE THERE WAS NON-COMPLIANCE FROM THE SIDE OF T HE AO A REMINDER WAS SENT BY THE LD.CIT(A) TO SUBMIT THE REMAND REPORT. HOWEVER, DESPITE A REMINDER GIVEN BY THE LD.CIT(A) THERE W AS NON- COMPLIANCE FROM THE SIDE OF THE AO FOR WHICH THE LD.CIT(A) HA D TO PASS THE ORDER ON THE BASIS OF THE SUBMISSIONS MADE BEFO RE HIM. HE HAD GONE THROUGH THE SALE DEED AND HE HAS NOTED THAT IN THE SALE DEED THE NAME OF THE ASSESSEE IN HIS INDIVIDUAL CAPACITY AS WELL AS ON BEHALF OF THE ASSESSEE HUF ARE SHOWN AS SELLERS. WE FURTH ER FIND FROM THE COPY OF THE RETURN OF INCOME FILED IN CASE OF SHR I 7 ITA NO.334 & 335/PN/2014 RAMCHANDRA WAGHMARE HUF FOR A.Y. 2005-06, A COPY OF WHICH IS PLACED AT PAGES 31 TO 35 OF THE PAPER BOOK, THAT THE H UF HAS DECLARED TOTAL INCOME OF RS.7,06,130/- AS LONG TERM CAPITAL GAIN AND PAID THE TAX THEREON. THE SUBMISSION OF THE ASSESSEE T HAT THE RETURN OF THE HUF HAS BEEN ACCEPTED AND NO PROCEEDINGS EITHER U/S.263 OR U/S.147 OF THE I.T. ACT, 1961 HAS BEEN INITIATED COULD NOT BE CONTROVERTED BY THE LD. DEPARTMENTAL REPRESENTATIVE. S INCE THE CIT(A) AFTER CONSIDERING THE RELEVANT MATERIAL FACTS AND SUB MISSIONS OF THE ASSESSEE HAS HELD THAT THE SHARE IN THE PROPER TY BELONGS TO THE HUF AND THE HUF HAS DULY DECLARED THE LONG TERM CAPITA L GAIN IN THE RETURN OF INCOME AND SINCE THE SAID RETURN HAS NOT BEEN DISTURBED, THEREFORE, IN ABSENCE OF ANY CONTRARY MATERIAL BROUGHT TO OUR NOTICE AGAINST THE ORDER OF THE CIT(A) WE DO NOT FIND ANY INFIRMITY IN HIS ORDER. ACCORDINGLY, THE SAME IS UPHELD. GROUNDS RAISED B Y THE REVENUE ARE DISMISSED. 14. IDENTICAL GROUNDS HAVE BEEN TAKEN BY THE REVENUE IN ITA NO.334/PN/2014 IN THE CASE OF MR. PRASAD RAMCHANDRA WAG HMARE. FOLLOWING OUR REASONINGS GIVEN AT PARA 12 AND 13 OF THE O RDER, WE UPHOLD THE ORDER OF LD.CIT(A). THE GROUNDS RAISED BY THE REVENUE ARE ACCORDINGLY DISMISSED. 15. IN THE RESULT, BOTH THE APPEALS FILED BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 17-02-2016. SD/- SD/- ( VIKAS AWASTHY ) ( R.K. PANDA ) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE ; DATED : 17 TH FEBRUARY, 2016. 8 ITA NO.334 & 335/PN/2014 ) *#,! -! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. THE CIT(A ) CENTRAL , PUNE 4. 5. 6. THE CIT CENTRAL, PUNE $ ''(, (, / DR, ITAT, B PUNE; - / GUARD FILE. / BY ORDER , // TRUE COPY // // $ ' //TRUE C /0 ' ( / SR. PRIVATE SECRETARY (, / ITAT, PUNE