B.Bhuvaneswari, CHENNAI V. ITO, CHENNAI

ITA 3423/CHNY/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7399 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 21-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUPRIYO PAL
• Assessee Lawyers: A S SRIRAMAN
• Keywords: Unexplained investment; Salary income; Cost of acquisition
• Section: 69

Judgement Text

, .. , IN THE INCOME TAX APPELLATE TRIBUNAL , SMC B BENCH, CHENNAI . , ! BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.3423/MDS/2016 ( / ASSESSMENT YEAR: 2011-12) SMT. B. BHUVANESWARI, C/O. S. SRIDHAR, A.S. SRIRAMAN, ADVOCATES, NEW NO.14, OLD NO.82, FLAT NO.5, 1 ST AVENUE, INDIRA NAGAR, ADYAR, CHENNAI 600 020 VS THE INCOME TAX OFFICER, NON CORPORATE WARD 16(2), CHENNAI PAN: AISPB7306G ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI A.S. SRIRAMAN, ADVOCATE /RESPONDENT BY : SHRI SUPRIYO PAL, JCIT /DATE OF HEARING : 22.03.2017 ! /DATE OF PRONOUNCEMENT : 29.03.2017 / O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-4, CHENNAI DATED 24.10.2016 IN IT APPEAL NO.117/2015-16/A.Y.2011-12/ CIT(A)-4/ FOR THE ASSESSMENT YEAR 2011-12. 2. THE ASSESSEE HAS RAISED SEVERAL GROUNDS IN HER A PPEAL, HOWEVER THE CRUX OF THE ISSUE IS THAT THE LD.CIT(A) HAS ERRED IN SUSTAINING THE ORDER OF THE LD.AO WHO HAD TREATED T HE DIFFERENCE BETWEEN THE AMOUNT OF PURCHASE CONSIDERATION OF THE UNDIVIDED SHARE 2 ITA NO.3423/MDS/2016 OF LAND STATED IN THE PURCHASE DEED AND PURCHASE AG REEMENT AMOUNTING TO RS.10,80,000/- AS UNEXPLAINED INVESTME NT U/S. 69 OF THE ACT. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS AN INDIVIDUAL EARNING SALARY INCOME AND CAPITAL GAINS, FILED HER RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR ON 10.06.2011 ADMITTIN G INCOME OF RS.2,26,516/-. DURING THE RELEVANT ASSESSMENT YEAR , THE ASSESSEE HAD SOLD HER LAND ON 26.04.2010 FOR RS.13,00,000/- AND PURCHASED A RESIDENTIAL FLAT FROM A BUILDER FOR RS.27,70,000/-. IN THE SALE AGREEMENT THE ASSESSEE HAD STATED THE COST OF THE UNDIVIDED S HARE OF LAND AS RS.7,20,000/- (UDS 400 SQ.FT. @ 1800/- PER SQ.FT.). HOWEVER IN THE PURCHASE DEED DATED 28.03.2013, DOCUMENT NO.2124 TH E SALE CONSIDERATION FOR THE 400 SQ.FT., UNDIVIDED SHARE O F LAND WAS SHOWN AS RS.18,00,000/-. THEREFORE THE LD.AO OPINED THAT TH E DIFFERENCE OF RS.10,80,000/- (18,00,000-7,20,000) SHOULD BE TREAT ED AS THE UNDISCLOSED INVESTMENT OF THE ASSESSEE AND ACCORDIN GLY HE MADE ADDITION. ON APPEAL, THE LD.CIT(A) ALSO SUBSCRIBED TO THE VIEW OF THE LD.AO BY OBSERVING AS UNDER: 17. REGARDING THE FIRST ISSUE, IT HAS BEEN CONTEND ED BY THE APPELLANT THAT THE DIFFERENCE IN THE VALUE OF SALE CONSIDERAT ION HAD OCCURRED BECAUSE OF THE FACT THAT AT THE TIME OF REGISTRATIO N OF THE SAID LAND ON 3 ITA NO.3423/MDS/2016 28/03/2013, THE GUIDELINE VALUE OF THE PROPERTY HAD INCREASED TOR STAMP DUTY PURPOSES FOR WHICH THE VALUE OF THE LAND /UDS WAS TAKEN AT RS.18 LAKHS. HENCE, AS ARGUED BY THE LD. A.R., T HIS VALUE OF RS.18 LAKHS WAS ONLY A GUIDELINE VALUE AND NOT AN ACTUAL CONSIDERATION. I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT AN D, ACCORDINGLY, HAVE EXAMINED THE PHOTO COPY OF THE RELEVANT SALE D EED DATED 8/03/2013. IT IS NOTICED THAT AT PAGE 4, PARA 3, OF THE SALE DEED, IT IS CLEARLY MENTIONED AS, WHEREAS VENDOR'S POWER AGE NT HAS OFFERED TO CONVEY THE 400 FT.', UNDIVIDED SHARE IN THE SCHE DULE 'A 'PROPERTY, WHICH IS MORE FULLY DESCRIBED IN SCHEDULE 'S' HEREU NDER BY WAY OF ABSOLUTE SALE TO THE PURCHASER FOR THE SALE CONSIDE RATION OF RS.18,00,000/- NET FREE FROM ALL ENCUMBRANCES.' FUR THER, AT PAGE 5, PARA ONE, IT CLEARLY READS THAT, ' WHEREAS IN PURSU ANCE OF WHAT IS MENTIONED ABOVE AND IN CONSIDERATION OF THE SUM OF RS.18,00,000/- ALREADY PAID BY THE PURCHASER TO THE VENDOR'S POWER AGENT, THE RECEIPT OF WHICH THE VENDOR'S POWER AGENT HAD B Y ADMITTED AND ACKNOWLEDGE AND DISCHARGE THE PURCHASER FROM FO R THE PAYMENT, THEREOF AND THE VENDORS DO HEREBY SELL, GR ANT, CONVEY, AND ASSIGN UP TO THE PURCHASER ........ 18. FROM THE ABOVE FACTS OF THE CASE, MENTIONED IN THE RELEVANT SALE DEED, IT IS EVIDENT THAT THE PROPERTY WAS SOLD FOR A CONSIDERATION OF RS.18,00,000/- WHICH HAD ALREADY BEEN PAID BY THE P URCHASER TO THE VENDOR'S POWER AGENT. IN FACT, THE MARKET VALUE OF THE SAID PROPERTY WAS ALSO AT RS.18,00,000/- WHICH IS MENTIONED AT PA GE 9 OF THE RELEVANT SALE DEED. HENCE, IT IS PROVED THAT THE AM OUNT OF RS.18,00,000/- WAS NOT ONLY THE MARKET VALUE OF THE SAID PROPERTY FOR THE PURPOSES OF STAMP DUTY BUT THE ACTUAL TRANSACTI ON HAD ALSO TAKEN PLACE AT RS.18,00,000/- ONLY. THEREFORE, THE CONTEN TION OF THE 4 ITA NO.3423/MDS/2016 APPELLANT THAT THIS AMOUNT OF RS.18 LAKHS WAS ONLY A NOTIONAL VALUE TAKEN FOR CALCULATING THE STAMP DUTY, IS FOUND FACT UALLY INCORRECT. HENCE, THE FINDING OF THE AO IN THIS REGARD IS CONF IRMED. 4. AT THE OUTSET THE LD.AR SUBMITTED THAT THE ASSES SEE HAD PAID TOTAL CONSIDERATION OF RS.27,70,000/- FOR ACQUIRING THE NEW ASSET AND TO THAT EXTEND THE ASSESSEE IS ENTITLED FOR THE BENEFI T OF DEDUCTION U/S.54 OF THE ACT AND THERE IS NO SCOPE FOR MAKING ADDITIO N TOWARDS UNDISCLOSED UNEXPLAINED INVESTMENT. THE LD. AR FUR THER REQUESTED THAT THE MATTER MAY BE REMITTED BACK TO THE FILE OF LD.AO SO THAT THE ASSESSEE AND HER REPRESENTATIVE WOULD BE ABLE TO EX PLAIN THE ENTIRE TRANSACTION VIVIDLY. THE LD. DR VEHEMENTLY OPPOSED TO THE SUBMISSION OF THE LD.AR AND REQUESTED FOR SUSTAININ G THE ORDERS OF THE REVENUE AUTHORITIES. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y PERUSED THE MATERIALS AVAILABLE ON RECORD. FROM THE ORDERS OF T HE REVENUE AUTHORITIES, IT IS NOT CLEARLY COMING OUT AS TO THE ACTUAL INVESTMENT MADE BY THE ASSESSEE FOR ACQUIRING THE NEW FLAT. O NLY BY EXAMINING THE SALE DEED FOR PURCHASE OF THE UNDIVIDED SHARE I N LAND AMOUNTING TO RS.18,00,000/- ALONE WOULD NOT SUFFICE FOR ARRIVING AT THE TOTAL COST OF ACQUISITION OF THE RESIDENTIAL HOUSE. UNLESS THE T OTAL COST OF ACQUISITION 5 ITA NO.3423/MDS/2016 OF THE NEW ASSET IS DOCUMENTARILY ESTABLISHED THE E LIGIBLE DEDUCTION U/S.54 OF THE ACT, CANNOT BE COMPUTED. THEREFORE IN THE INTEREST OF JUSTICE, WE REMIT BACK THE MATTER TO THE FILE OF LD .AO FOR DE-NOVA CONSIDERATION. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE 29 TH MARCH, 2017. SD/- ( . ) (A. MOHAN ALANKAMONY) / ACCOUNTANT MEMBER '# /CHENNAI, $% /DATED 29 TH MARCH, 2017 JR % '( )( /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. , ( )/CIT(A) 4. , /CIT 5. (-. / /DR 6. .0 /GF