The ACIT, 4(1), Indore V. Shri Sunil Narang, Indore

ITA 377/IND/2012

• Counselvise Citation: 37722714 RSA 2012
• Duration Of Justice: 4 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2012
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 14-06-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: SHRI; S N AGRAWAL
• Keywords: Sale consideration of property below Jantri Value
• Section: 50C; 43(5)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, J.M. AND SHRI R.C.SHARM A, A.M. PAN NO. : AAQPN1575K I.T.A.NO. 377 /IND/201 2 . A.Y. : 2008 - 09 ACIT, 4(1), INDORE. VS SHRI SUNIL NARANG, PROP. M/S. ANIL BROTHERS, INDORE. APPELLANT RESPONDENT I.T.A.NO. 400/IND/2012. A.Y. : 2008 - 09 SHRI SUNIL NARANG, PROP. M/S. ANIL BROTHERS, INDORE. VS ACIT, 4(1), INDORE APPELLANT RESPONDENT DEPARTMENT BY : SHRI R. A. VERMA, SR. DR ASS ESSEE BY : SHRI S.N. AGRAWAL AND SHRI PANKAJ MOGRA, CAS DATE OF HEARING : 11 . 10 .2012 DATE OF PRONOUNCEMENT : 25 . 10 .201 2 -: 2: - 2 O R D E R PER R. C. SHARMA, A.M. THESE ARE THE CROSS APPEALS BY THE ASSESSEE AND REV ENUE AGAINST THE ORDER OF CIT(A) DATED 23.3.2012 FOR THE ASSESSMENT YEAR 2008-09. 2. IN THIS APPEAL, THE FOLLOWING GROUNDS HAVE BEEN TAK EN BY THE REVENUE :- 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD. CIT(A) ERRED IN ALLOWING LOSS AS CLAIMED BY THE ASSESSEE ON ACCOUNT OF F & O AND COMMODITIES AS THE ASSESSEE IN ASSESSMENT PROCEEDINGS COULD NOT FURNISH ANY DETAIL WHICH MAY PROVE THAT THE SAID LOSS IS GENUINE. 2.1 WHILE HOLDING SO, THE LD. CIT(A) CONSIDERED THE MATERIAL PRODUCED BEFORE HIM WITHOUT APPRECIATING THAT THE SAID MATERIAL WAS NEVER PRODUCED AND CONSIDERED BY THE ASSESSING OFFICER AS PER EXPLANATION TO SECTION 43(5) OF THE INCOME-TAX ACT, 1961. -: 3: - 3 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 12,00,000/- MADE BY THE ASSESSING OFFICER WHICH WAS IN ACCORDANCE WITH SECTION 50C OF INCOME-TAX ACT, 1961, WITHOUT THERE BEING ANY EXPRESS OBJECTION FROM THE ASSESSEE AGAINST VALUATION OF STAMP VALUATION AUTHORITY. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN APPRECIATING THE RESTRICTED USAGE OF LAND WHEN REGISTERED SALE DEED CLEARLY MENTIONED THAT THE PLOT IS COMMERCIAL AND FURTHER ERRED IN RELYING UPON CERTAIN I.T.A.T. DECISIONS WHICH ARE ON ITS OWN FACTS, THAN THE FACT S IN THE CASE OF THE ASSESSEE. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADING IN MS & GI PIPES, SHARES & SECURITIES AND F & O AND COMMODITIES AND MAINTAINED REGULAR BOOKS OF ACCOUNT . THAT ASSESSEE HAS FILED HIS INCOME TAX RETURN ON 30.09.2 008 DECLARING INCOME OF RS. 9,43,280/-, WHICH INCLUDES LONG TERM -: 4: - 4 CAPITAL GAINS OF RS. 19,09,444/- IN RESPECT OF SH ARE IN GODOWN AT PIPLYARAO, INDORE, SOLD AT A CONSIDERATIO N OF RS. 35,00,000/-. ASSESSEE ALSO CLAIMED LOSS ON ACCOUNT OF F & O TRANSACTION OF SHARES. 4. DURING THE COURSE OF SCRUTINY ASSESSMENT, THE ASSESSING OFFICER DID NOT ACCEPT ASSESSEES CLAIM O F LOSS ON ACCOUNT F & O COMMODITIES ON THE PLEA THAT THE ASSE SSEE HAS NOT FURNISHED ANY DETAILS TO PROVE THE SAID LOSS AS GENUINE. 5. BY THE IMPUGNED ORDER, THE LD. CIT(A) DELETED ASSESSEES CLAIM OF LOSS BY OBSERVING AS UNDER :- IN GROUND NO.1 OF THE APPEAL, THE APPELLANT HAS CHALLENGED THE DISALLOWANCE OF LOSS OF RS. 9,56,652/-. THE ASSESSING OFFICER WHILE IGNORING TH E LOSS ON F & O MENTIONED IN THE BODY OF ORDER THAT THE APPELLANT HAS NOT FURNISHED THE DETAILS IN THE FORMAL AS REQUIRED. THE APPELLANT IN THE BOOK OF BROKER. THE APPELLANT, DURING THE COURSE OF APPELLA TE PROCEEDING, HAS CLARIFIED THAT IN FUTURE & OPTION T HE ASSESSEE PURCHASED QUANTITY IN TERM OF LOT BY PAYIN G ONLY MARGIN FOR THE SAME AND NOT FULL CONSIDERATION -: 5: - 5 OF THE QUANTITY PURCHASED BY THE APPELLANT. THE APPELLANT ALSO PRODUCED COPY OF BILLS RELATED TO TH E PURCHASE AND SALE OF F & O. IF, THE ASSESSING OFFIC ER DOUBTED THE GENUINENESS OF THE LOSS AS CLAIMED BY THE APPELLANT. IN THAT CASE NO ONE PREVENTED HIM TO MAKE NECESSARY INQUIRY. THE APPELLANT IN COURSE OF APPEAL PROCEEDINGS HAS FURNISHED COPIES OF F & O BILLS, WHICH WERE NUMBERING MORE THAN 250, WHICH ARE FOUND TO BE PRIMA FACIE GENUINE AND IN ORDER. MERELY BECAUSE PARTICULARS AND DETAILS WERE NOT PROVIDED IN THE SPECIFIC FORMAT, THE SAME CANNOT BE THE GROUND FOR DENYING THE LEGAL AND LEGITIMATE CLAIM OF THE APPELLANT. THE LOSS CLAIM IS FOUND TO BE GENUINE AND LEGALLY ADMISSIBLE. THE ASSESSING OFFICER IS HEREBY DIRECTED TO ALLOW THE LOSS AS CLAIMED BY THE APPELLANT ON ACCOUNT OF F & O AND COMMODITIES. 6. IN RESPECT OF ADDITION MADE U/S 50C ON ACCOUNT OF LONG TERM CAPITAL GAIN, THE LD. CIT(A) HAS GIVEN RE LIEF OF 20% AFTER HAVING THE FOLLOWING OBSERVATIONS :- -: 6: - 6 HOWEVER, COMING TO THE ALTERNATE AND SECOND LINE O F OF CONTENTION OF THE APPELLANT THERE IS APPARENTL Y SOME MERIT IN SUCH CONTENTION IN AS FAR AS THE STAMP DUT Y RATES ARE FIXED BY STATE GOVERNMENT AUTHORITIES FOR A LOC AL AREA AT THE UNIFORM RATE, WHEREAS IT IS KNOWN FACT THAT DIFFERENT PLOTS OF LAND HAVE DIFFERENT MARKET VALUE BECAUSE OF SIZE OF PLOT ( FOR WHICH EVEN CONCESSION IS GIVEN IN RATES FIXED FOR LARGER PLOT THAN SMALL SIZ E), LOCATION OF PLOT AND RESTRICTIONS ON THE USER OF SU CH LAND AND THE LAND BEING HALLOW OR PROPERLY FILLED UP LAN D ETC. THUS ON CONSIDERATION OF THE RESTRICTIVE USE PUT ON THE LAND BY DIVERSION ORDER, A COPY OF WHICH HAS BEEN P LACED ON RECORD, THE ASSESSING OFFICER IS DIRECTED TO ADO PT THE RATE FOR STAMP DUTY PURPOSES AFTER 20 % REDUCTION F ROM THE RATE PRESCRIBED BY STAMP DUTY AUTHORITIES, WHIC H WILL MEET THE CONSEQUENTIAL RELIEF. 7. AGAINST THE ABOVE ORDER OF CIT(A), BOTH REVENUE AND ASSESSEE ARE IN APPEAL BEFORE US. 8. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. THE LOSS OF RS. 8,67,793/- ON ACCOUNT OF P URCHASE AND SALE OF SHARES AND COMMODITIES WAS DISALLOWED B Y THE ASSESSING OFFICER ON THE PLEA THAT THE ASSESSEE HAS NOT FURNISHED DETAILS OF PURCHASE AND SALE OF SHARES IN THE FORMAT REQUIRED. THE ASSESSING OFFICER STATED THAT VIDE OR DER SHEET ENTRY DATED 22.1.2010, THE ASSESSEE WAS REQUIRED TO FURNISH DETAILS AND THE DATE WAS FIXED ON 30 TH NOVEMBER, 2010, BUT THE ASSESSEE HAS NOT COMPLIED TO THE TERMS OF THIS LETT ER ALSO. BY -: 7: - 7 STATING THAT THE ASSESSEE IS HIDING INFORMATION ON THIS POINT AND DOES NOT WANT TO DISCLOSE CORRECT FACT TO THE D EPARTMENT, HE DISALLOWED THE CLAIM OF LOSS. THE LD. CIT(A) DEL ETED THE SAME BY OBSERVING THAT IN THE COURSE OF APPELLATE PROCEE DINGS, THE ASSESSEE HAS FURNISHED COPIES OF F & O BILLS, WHICH WERE NUMBERING MORE THAN 250, WERE FOUND TO BE PRIMA FAC IE GENUINE AND IN ORDER. THE LD. CIT(A) FURTHER STATED THAT MERELY BECAUSE PARTICULARS AND DETAILS WERE NOT PROVIDED I N THE SPECIFIC FORMAT TO THE ASSESSING OFFICER, THE SAME CANNOT BE THE GROUND FOR DENYING LEGAL AND LEGITIMATE CLAIM O F THE ASSESSEE. IT IS CLEAR FROM THE ORDER OF THE ASSESS ING OFFICER THAT REQUIRED INFORMATION WAS NOT FURNISHED BEFORE THE ASSESSING OFFICER. EVEN THOUGH THE ASSESSEE HAS FUR NISHED COPIES OF F & O BILLS BEFORE THE CIT(A), BUT NO OPP ORTUNITY WAS GIVEN BY THE LD.CIT(A) TO THE ASSESSING OFFICER TO EXAMINE AND GIVEN HIS REPORT THEREON. WE FIND THAT EVEN THOUGH THE CIT(A) HAS ASKED FOR REMAND REPORT ON THE ISSUE OF ADDITIO N MADE U/S 50C, HOWEVER, NO COMMENTS OF ASSESSING OFFICER WAS ASKED FOR IN RESPECT OF COPIES OF F & O BILLS NUMBERING MORE THAN 250, WHICH WERE SUBMITTED FOR THE FIRST TIME BEFORE THE CIT(A). -: 8: - 8 THUS, IT IS CLEAR THAT NO OPPORTUNITY WAS GIVEN BY THE LD.CIT(A) TO THE ASSESSING OFFICER, WHICH AMOUNTS TO CONTRAVE NTION OF RULE 46A. THE REVENUE HAS ALSO TAKEN A SPECIFIC GRO UND BEFORE US TO THE EFFECT THAT CIT(A) CONSIDERED THE MATERIA L PRODUCED BEFORE HIM WITHOUT APPRECIATING THAT THE SAID MATER IAL WAS NEVER PRODUCED BEFORE AND CONSIDERED BY THE ASSESSI NG OFFICER AS PER EXPLANATION TO SECTION 43(5) OF INCOME-TAX A CT, 1961. IN THE INTEREST OF JUSTICE, WE RESTORE THIS GROUND BACK TO THE FILE OF THE ASSESSING OFFICER AND THE ASSESSEE IS DIRECT ED TO FILE DETAIL OF F & O TRANSACTION ALONGWITH COPIES OF THE BILLS BEFORE THE ASSESSING OFFICER FOR DECIDING AFRESH AS PER LA W. NEEDLESS TO SAY THAT THE ASSESSEE SHOULD BE GIVEN FULL OPPOR TUNITY BY THE ASSESSING OFFICER BEFORE DECIDING THE ISSUE. WE DIRECT ACCORDINGLY. 9. WITH REGARD TO ADDITION MADE ON ACCOUNT OF CAPITAL GAIN U/S 50C OF THE INCOME-TAX ACT, 1961, WE FOUND THAT THE CIT(A) HAS CALLED FOR A REMAND REPORT NOT ONLY FROM THE ASSESSING OFFICER BUT ALSO FROM THE DVO AND AFTER C ONSIDERING ALL THE ASPECTS WITH REGARD TO LOCATION OF PLOT AND RESTRICTIONS ON USE OF SUCH LAND AND THE LAND BEING HALLOW OR PR OPERLY -: 9: - 9 FILLED UP LAND ETC. AFTER CONSIDERING THE REMAND RE PORT RECEIVED FROM THE DVO VIS--VIS RESTRICTIVE USE PUT ON THE L AND BY THE DIVERSION ORDER, THE LD. CIT(A) HAS GIVEN FURTHER R ELIEF OF 20 % BY REDUCING THE RATE OF LAND PRESCRIBED BY STAMP DU TY. DETAILED FINDING RECORDED BY THE LD.CIT(A) HAS NOT BEEN CONTROVERTED EITHER BY LD. AUTHORIZED REPRESENTATIV E OR LD. SENIOR DR. ACCORDINGLY, WE UPHOLD THE ORDER OF CIT( A) ON THIS ACCOUNT AND DISMISS THE GROUND TAKEN BY ASSESSEE AN D REVENUE IN THIS REGARD. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED, WHEREAS APPEAL FILED BY THE REVENUE IS A LLOWED IN PART FOR STATISTICAL PURPOSES. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 25 TH OCTOBER, 2012. SD/ - SD/ - (JOGINDER SINGH) (R. C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 25 TH OCTOBER, 2012. CPU* 1222