Sh. Arvinder Singh, Faridabad V. ITO, New Delhi

ITA 3778/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 97328 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 2 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 07-09-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 13-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K K JAISWAL
• Keywords: Sale consideration of property below Jantri Value; Business income; Additional evidence; Valuation report
• Section: 80C; 50C; 234B

Judgement Text

1 ITA NO. 37 78/DEL/2013 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH:A NEW DELHI BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER & SMT. BEENA PILLAI, JUDICIAL MEMBER I.T.A .NO. 3778/DE L/2013 (ASSESSMENT YEAR-2008- 09) ARVINDER SINGH, SANTOSH GUPTA & CO., C.A., SCR-30P, SECTOR 16A, PART-1, FARIDABAD. AAAPS4688Q VS ITO, WARD 2(2), NEW DELHI. APPELLANT BY SH. VED JAIN, CA RESPONDENT BY SH. K.K. JAISWAL, DR ORDER PER BEENA PILLAI, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE APPELLANT AGAINST T HE ORDER OF THE LD. CIT(A)S- V, NEW DELHI DATED 15.03.2013 FOR A.Y . 2008-09 ON THE FOLLOWING GROUNDS: 1. THAT THE APPELLANT DENIES HIS LIABILITY TO BE ASSE SSED AT INCOME OF RS. 34,07,778/- AND ACCORDINGLY DENIES HI S LIABILITY TO PAY TAX, SURCHARGE AND INTEREST DEMANDED THEREON . 2. THAT HAVING REGARDS TO THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN C ONFIRMING ALL THE ADDITIONS/DISALLOWANCES MADE BY LD. AO. 3. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES O F THE CASE, THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN N OT ALLOWING THE LOSS OF RS. 1,50,000/- ON ACCOUNT OF PAYMENT OF LOAN DATE OF HEARING 07.09.2015 DATE OF PRONOUNCEMENT 11.09.2015 2 ITA NO. 37 78/DEL/2013 UNDER THE HEAD INCOME FROM HOUSE PROPERTY U/S 24( B) AS CLAIMED BY THE ASSESSEE IN THE RETURN OF INCOME. 4. THAT HAVING REGARD TO FACTS AND CIRCUMSTANCES OF TH E CASE, THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN MAKING ADDITION OF RS. 29,96,456/- AS SHORT TERM CAPITAL GAIN AND H AS FURTHER ERRED IN ADOPTING THE VALUE OF LAND AND BUILDING DE TERMINED BY THE STAMP VALUATION AUTHORITY FOR THE PURPOSE OF DETERMINATION OF SHORT TERM CAPITAL GAIN U/S 48 AND THE IMPUGNED ORDER HAS BEEN MADE BY RECORDING INCORRECT FACTS AND FINDINGS AND HAS ERRED IN NOT REFERRING THE MAT TER FOR VALUATION TO LD. DVO. 5. THAT HAVING REGARD TO FACTS AND CIRCUMSTANCES OF TH E CASE, THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN APPLYIN G THE PROVISIONS OF SECTION 50C WHICH ARE NOT APPLICABLE ON THE FACTS OF THE CASE OF THE ASSESSEE COMPANY. 6. THAT IN ANY CASE AND IN ANY VIEW OF THE MATTER ACTI ON OF CIT(A) IN CONFIRMING THE ADDITION MADE BY LD. AO OF RS. 29,96,456/- AS SHORT TERM CAPITAL GAIN AND WRONGLY APPLYING THE PROVISIONS OF SECTION U/S 50C IS CONTRARY TO LA W AND FACTS AND DESERVES TO BE DELETED. 7. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES O F THE CASE, THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN C ONFIRMING THE AGGREGATE ADDITION MADE BY LD. AO OF RS. 1,51,9 00/- ON ACCOUNT OF CASH DEPOSITS IN THE SAVING BANK ACCOUNT OF THE ASSESSEE BY TREATING IT AS UNDISCLOSED INOCME THAT TOO WITHOUT ANY BASIS. 8. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES O F THE CASE, THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN C ONFIRMING THE DISALLOWANCES MADE BY LD. AO ON ACCOUNT OF THE DEDUCTION FULLY U/S 80C AS CLAIMED BY THE ASSESSEE IN THE RETURN OF INCOME AND HAS FURTHER ERRED IN RESTRICTI NG THE DEDUCTION TO THE EXTENT OF RS. 73,042/- THAT TOO WI THOUT ANY BASIS. 9. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES O F THE CASE, THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN C ONFIRMING THE IMPUGNED ADDITIONS/DISALLOWANCES AND THE ORDER IS CONTRARY TO LAW AND FACTS AND WITHOUT PROVIDING ADE QUATE OPPORTUNITY OF HEARING AND WITHOUT CONFRONTING THE ENTIRE ADVERSE MATERIAL WHICH WAS USED AGAINST THE ASSESSE E AND 3 ITA NO. 37 78/DEL/2013 BY RECORDING INCORRECT FACTS AND FINDINGS AND THE ADDITIONS/DISALLOWANCES MADE IN THE ORDER ARE NOT SUSTAINABLE ON VARIOUS LEGAL AND FACTUAL GROUNDS AN D DESERVES TO BE QUASHED. 10.THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCE S OF THE CASE, LD. AO HAS ERRED IN LAW AND ON FACTS IN CHARG ING INTEREST U/S 234A AND 234B OF THE INCOME TAX ACT, 1 961. 11. THAT THE APPELLANT CRAVES THE LEAVE TO ADD, MOD IFY, AMEND OR DELETE ANY OF THE GROUNDS OF APPEAL AT THE TIME OF HEARING AND ALL THE ABOVE GROUNDS ARE WITHOUT PREJUDICE TO EACH OTHER. 2. BRIEF FACTS OF THE CASE ARE THAT THE APPELLANT IS AN INDIVIDUAL HAD FILED THE RETURN OF INCOME OF RS. 2,21,570/- FO R A.Y. 2008-09 ON 30.03.2009. THE CASE WAS SELECTED FOR SCRUTINY UND ER CASS. THE APPELLANT IS ENGAGED IN THE BUSINESS OF MANUFACTURI NG AND TRADING OF AUTO PARTS. THE APPELLANT HAD DECLARED INCOME U NDER THE HEAD HOUSE PROPERTY, BUSINESS AND SHORT TERM CAPITAL GA INS. THE BUSINESS INCOME IS DISCLOSED PROPRIETARY CONCERN OF THE APPELLANT UNDER THE NAME AND STYLED AUTO GEAR (INDIA). DURING THE ASSESSMENT PROCEEDINGS, THE AO HAD MADE ADDITIONS U/S 24B TO AN EXTENT OF RS. 1,50,000/- U/S 50C TO AN EXTENT OF RS. 29,96,456/- U/S 80C TO AN EXTENT OF RS. 73,042/- CASH DEPOSITS RS. 1,51,900/- 3. THE AO MADE ADDITIONS ON THE GROUND THAT DETAILS WERE NOT SUBMITTED AS REQUIRED BY THE AO. 4. AGGRIEVED BY THE ORDER OF THE AO THE APPELLANT I S ENGAGED IN THE BUSINESS OF MANUFACTURING AND TRADING OF AUTO P ARTS. WENT INTO APPEAL BEFORE THE LD. CIT(A). BEFORE THE LD. CIT(A) ADDITIONAL 4 ITA NO. 37 78/DEL/2013 EVIDENCES WERE FILED UNDER RULE 46A. THE LD. CIT(A ) CALLED FOR REMAND REPORT ON THE ADDITIONAL EVIDENCES SO FILED BY THE APPELLANT. THE LD. CIT(A) CONFIRMED THE ADDITIONS MADE BY THE AO ON THE BASIS OF THE REMAND REPORT. 5. AGGRIEVED BY THE ORDER OF THE LD. CIT(A) THE APP ELLANT IS IN APPEAL BEFORE US. 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF THE LD. A R AND PERUSED THE ORDER PASSED BY THE AUTHORITIES BELOW AND THE P APER BOOK BEFORE US. 7. IT IS OBSERVED FROM THE ORDER PASSED BY THE LD. CIT(A) THAT THE HE HAD CALLED FOR THE REMAND REPORT DATED 28.01.13, FR OM THE LD. AO WHICH HAS BEEN REPRODUCED IN HIS ORDER WHICH HAS BE EN ANNEXED TO THE PAPER BOOK AT PAGES 252 TO 255. 8. ON PERUSAL OF THE REMAND REPORT, WE FIND THAT TH E ADDITIONS MADE BY THE LD. AO IN RESPECT OF CASH DEPOSITS AND 80C, STANDS DULY VERIFIED. THE LD. AO IN PARA 3(1) OF THE REMAN D REPORT HOLDS THAT THE CASH DEPOSITS STOOD EXPLAINED FROM THE STA TEMENT OF AFFAIRS SUBMITTED BY THE APPELLANT. FURTHER IN RESPECT OF D EDUCTION CLAIMED BY THE APPELLANT U/S 80C, THE LD. AO IN THE REMAND REPORT IN PARA 4(1) HAS BEEN HELD TO BE JUSTIFIED. WE THEREFORE ALLOW GROUND NO.7 & 8 OF THE APPEAL 9. IN RESPECT OF THE ADDITION MADE U/S 24B OF THE A CT THE AO RECORDS THAT THE AMOUNT SO PAID AS INTEREST ON REPA YMENT OF LOAN ON THE GROUND THAT THE CONDITIONS FOR ALLOWANCE OF DEDUCTION/S.24(B) HAVE NOT BEEN SATISFIED. THE SECO ND PROVISO TO SEC.24(B) OF THE ACT PROVIDES THAT, WHERE THE SELF OCCUPIED PROPERTY 5 ITA NO. 37 78/DEL/2013 HAS BEEN ACQUIRED OR CONSTRUCTED WITH BORROWED CAPI TAL ON OR AFTER 1 ST APRIL, 1999, AND SUCH ACQUISITION IS COMPLETED WIT HIN THREE YEARS FROM THE END OF FINANCIAL YEAR IN WHICH THE C APITAL WAS BORROWED, THE AMOUNT OF DEDUCTION SHALL NOT EXCEED 1,50,000/-. IN THE FACTS OF THE PRESENT CASE, THE LD.AO HAS NOT VE RIFIED WHETHER THE CONSTRUCTION WAS COMPLETED WITHIN THREE YEARS, WHET HER ANY CONSTRUCTION WAS CARRIED OUT DURING THE RELEVANT PE RIOD, WHETHER THE BORROWED FUNDS WERE USED FOR THE PURPOSES OF CO NSTRUCTION OF THE PROPERTY. 10. IN RESPECT OF APPLICATION OF SECTION 50C(2) THE SALE CONSIDERATION, WE NOTE THAT THE APPELLANT HAD OBJEC TED TO THE VALUATION OF THE PROPERTY AS PER STAMP DUTY VALUATI ON, VIDE LETTER DATED 13.12.2010(PAGE 7-8 OF PAPER BOOK) AND HAD RE QUESTED THE LD.AO TO REFER THE SAME TO VALUATION OFFICER. THE LD. AO DID REFER IT TO THE DVO AND RELIED UPON THE VALUE DETERMINED BY THE STAMP VALUATION AUTHORITIES. 11. WE ARE, THEREFORE, OF THE CONSIDERED OPINION TH AT GROUND NOS. 1 TO 6, NEEDS TO BE SENT BACK TO THE FILES OF THE AO FOR RE-ADJUDICATION ON THE BASIS OF THE EVIDENCE AND REMAND REPORT SUBM ITTED. WE ALSO DIRECT THE LD. AO TO CALL FOR THE VALUATION REPORT IN RESPECT OF THE PROPERTY SOLD BY THE APPELLANT AND TO DECIDE THE IS SUE ON THE BASIS OF THE AGREEMENTS ENTERED INTO BY THE PARTIES THERE IN. FOR THE REASONS ABOVE, WE ALLOW THE GROUND NOS. 7 & 8 AND SET ASIDE GROUND NOS. 1 TO 6 FOR FRESH CONSIDERATION ON THE B ASIS OF THE EVIDENCES FILED. NEEDLESS TO SAY THAT FAIR OPPORTUN ITY OF BEING HEARD MAY BE GRANTED TO THE APPELLANT. 6 ITA NO. 37 78/DEL/2013 13. IN THE RESULT, THE APPEAL STANDS ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 11/09/2015 SD/- SD/- (INTURI RAMA RAO) (BEENA PILLAI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 11/09/2015 *KAVITA, P.S. COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE 1. DRAFT DICTATED ON 07.09.2015 2. DRAFT PLACED BEFORE AUTHOR 08.09.2015 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 11.09.2015 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. 11.09.2015 5. APPROVED DRAFT COMES TO THE SR.PS/PS 11.09.2015 6. KEPT FOR PRONOUNCEMENT ON 11.09.2015 7. FILE SENT TO THE BENCH CLERK 11.09.2015 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.