MOINODDIN S/O RAHIMUDDIN, Ajmer V. ITO, Ajmer

ITA 380/JPR/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2076 (ITAT-JAIPUR)
• Duration Of Justice: 3 year(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-05-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 16-05-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AJAY MALIK CIT DHK
• Assessee Lawyers: SUBHASH PORWAL
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Depreciation; Additional evidence; Cost of acquisition; Fair market value; Valuation report
• Section: 50C; 5(2); 54

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS [KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YAD AV, AM VK;DJ VIHY LA-@ ITA NO. 380/JP/2014 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2008-09 SHIR MOINODDIN S/O RAHIMUDDIN, 86/3, KAMELA MOHALLA, DARGAH BAZAR, AJMER CUKE VS. THE ITO, WARD 1(1), AJMER LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AXUPM6079R VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI SUBHASH PORWAL ( CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI AJAY MALIK (ADDL. CIT ) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 04/05/2017 ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT: 22/05/2017. VKNS'K@ ORDER PER SHRI VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A), AJMER DATED 14.03.2014 FOR A.Y.2008-09 WHEREIN THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPEAL: (1) IN NOT GRANTING THE EXPENDITURE INCURRED ON SA LE OF TRANSFER OF RS. 1,58,983/- U/SEC. 48. (2) NON GRANTING THE FAIR MARKET VALUE OF PROPERTY AS ON 01.04.1981 AS PER REGISTERED VALUERS. (3) NON GRANTING THE BENEFIT OF COST OF CONSTRUCTI ON +IMPROVEMENT OF RS. 3,50,000.00 INCURRED BY ASSESSEE AFTER PURCHASE OF PROPERTY ON 25.07.2008 U/SEC. 54 (BESIDES PURCHASE COST). ITA NO.380/JP/2014 SHRI MOINODDIN VS.ITO WARD 1(1), A JMER 2 (4) CONFIRMING THE INCOME OF RS. 5,80,988.00 AS INC OME FROM OTHER SOURCES BEING INCOME FROM PAN SHOP. 2. EARLIER, THE SUBJECT APPEAL WAS DISMISSED EX-PAR TE FOR WANT OF PROSECUTION BY THE COORDINATE BENCH VIDE ITS ORDER DATED 30.10.2015. SUBSEQUENTLY, THE COORDINATE BENCH WITHDRAWN THE SA ID ORDER WHILE DISPOSING OFF THE MISCELLANEOUS APPLICATION FILED BY THE ASSE SSEE AND THE EARLIER EX- PARTE ORDER DATED 30.10.2015 WAS RECALLED BY THE CO ORDINATE BENCH BY ITS ORDER DATED 27.5.2016. NOW THE MATTER HAS COME UP F OR HEARING BEFORE THIS BENCH. 3. THE FACTS OF THE CASE ARE APPARENT FROM THE ORDE R OF THE LD CIT(A). THE FACTS AND AND RELEVANT FINDINGS OF THE LD. CIT(A) W HICH ARE UNDER CHALLENGE BEFORE US ARE AS UNDER:- 3.3 I HAVE CONSIDERED THE CONTENTIONS OF THE APP ELLANT AS WELL AS ASSESSMENT ORDER. THE ISSUES ARE DECIDED AS UNDER: (I) AS REGARDING THE SALE CONSIDERATION ADOPTED BY THE AO AT RS. 47,94,226 AS PER PROVISION OF SEC. 50C OF THE I .T. ACT, THE ASSESSEE HAS NO OBJECTION AS PER THE SUBMISSION. HENCE THE FIRST GROUND OF APPEAL IS DISMISSED. (II) AS REGARDING THE TRANSFER EXPENSES OF RS. 1,5 8,983 CLAIMED BY THE ASSESSEE, ASSESSEE HAS SUBMITTED THAT ASSESSEE PAID THE DALALI AND COMMISSION OF RS. 1,50,000 TO THE BROKER AND RS. 8, 983 AS OTHER PETTY EXPENSES AND HAS SUBMITTED RECEIPTS OF TWO PERSONS FOR THE DALALI OF RS. 1,50,000. HOWEVER, NO SUCH DOCUMENTS WERE PRODUCED BEFORE THE AO IN SPITE OF REPEATED OPPORTUNITIES GIVEN AS MENTIONED IN THE ASSESSMENT ORDER. DURING ITA NO.380/JP/2014 SHRI MOINODDIN VS.ITO WARD 1(1), A JMER 3 APPEAL, ASSESSEE CONTENDED THAT HE WAS ILL AT THAT TIME. HOWEVER, NO SUPPORTING DOCUMENTS IN THIS REGARD HAVE BEEN SUBMI TTED. SO THE ABOVE ADDITIONAL EVIDENCES ARE NOT ADMITTED. ACCORDINGLY, DISALLOWANCE ON THIS ACCOUNT MADE BY THE AO IS CONFIRMED. (III) AS REGARDING FAIR MARKET VALUE OF THE ASSET A S ON 01.04.1981, ASSESSEE HAS CLAIMED THE SAME TO BE RS. 3,00,050/- BASED ON THE VALUATION REPORT. HOWEVER, THE AO HAS POINTED OUT THAT AS PER THE REG ISTERED PARTITION DEED OBTAINED BY THE AO FROM THE SUB REGISTRAR, THE FAIR MARKET VALUE OF THE PROPERTY AS ON 25.04.1988 WAS RS. 35,000/- ONLY WHI CH HAS BEEN MENTIONED IN THE PARTITION DEED. AS SUCH, THERE CANNOT BE HIG HER VALUE AS ON 01.04.1981. THE ASSESSEES CLAIM THAT PARTITION DEED SPEAKS ABO UT ONLY CONSTRUCTION AND NOT LAND AND COMMON AREA IS NOT VALID AS IT IS APPA RENT FROM THE PARTITION DEED THAT THE MARKET VALUE OF THE SAID PROPERTY HAS BEEN MENTIONED BY THE OWNERS THEMSELVES AS RS. 35,000 FOR THE WHOLE OF TH E PROPERTY AND STAMP DUTY HAS BEEN PAID ACCORDINGLY. IN SUCH A CASE, ASS ESSEES CLAIM THAT THE VALUE OF THE PROPERTY AS ON 01.04.1981 WAS RS. 3,00 ,350 IS NOT SUSTAINABLE. FURTHER, THE ASSESSEE WHILE IN THE ORIGINAL PROCEED INGS HAD CLAIMED THE FAIR MARKET VALUE AS ON 01.04.1981 AT RS. 3,00,350 WHILE NOW ASSESSEE HAS REVISED THE SAME TO RS. 2,55,587 AS PER THE REVISED VALUATION REPORT. HOWEVER, IN THE REVISED VALUATION REPORT, IT HAS BE EN MENTIONED THAT GROUND FLOOR, FIRST FLOOR AND BALCONY WAS EXISTING AS ON 0 1.04.1981 BUT AS PER PARTITION DEED DATED 04.04.1988, NO SUCH CONSTRUCTION ON FIR ST FLOOR AND BALCONY HAS BEEN MENTIONED. ACCORDINGLY, NO RELIANCE CAN BE PLA CED ON THE SAID VALUATION REPORT FOR VALUE AS ON 01.04.1981. ITA NO.380/JP/2014 SHRI MOINODDIN VS.ITO WARD 1(1), A JMER 4 FURTHER, ASSESSEE HAS ONLY HALF SHARE IN THE PROPER TY WHICH WAS VALUED AT RS. 35,000/- AT THE TIME OF PARTITION AS DISCUSSED ABOV E. THE ASSESSEE WAS SHOW CAUSE AS TO WHY THE FAIR MARKET VALUE OF ASSESSEES SHARE AT THE TIME OF PARTITION SHOULD NOT BE TAKEN AT RS. 17,500 TO WHIC H ASSESSEE HAS REITERATED THE EARLIER CONTENTIONS PLACING RELIANCE ON THE VAL UATION REPORT WHICH HAS ALREADY REJECTED AS DISCUSSED ABOVE. IN VIEW OF THE ABOVE DISCUSSION, THE AO HAD THE REA SONABLE BASIS FOR ADOPTING THE FAIR MARKET VALUE AT RS. 35,000 AS ON 25.04.198 8 BASED ON THE PARTITION DEED AND ALLOWING THE INDEXATION FOR THE LATER PERI OD. HOWEVER, AS POINTED OUT EARLIER, THE ASSESSEES HAS ONLY HALF SHARE IN THE PROPERTY. SO FAIR MARKET VALUE AT THE TIME OF PARTITION SHOULD BE TAKEN AT RS. 17, 500 FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAINS. (V) THE ASSESSEE HAS CLAIMED DEDUCTION U/S 54 OF T HE I.T. ACT FOR THE INVESTMENT IN THE HOUSE PROPERTY OF RS. 30,50,000/- . DURING APPEAL, ASSESSEE HAS SUBMITTED THAT ON 25.07.2008, THE ASSESSEE HAS PURCHASED A HOUSE PROPERTY NO. 847/23 ON 25.07.2008 AT KAMELA MOHALLA , HARIJAN BASTI FOR RS. 20,00,000. THE SAID DOCUMENT REGARDING PURCHASE OF THE HOUSE IS REGISTERED DOCUMENT SO IT IS CONSIDERED RELEVANT FOR CLAIM OF DEDUCTION U/S 54 OF THE I.T. ACT. DURING APPEAL, THE AO HAS EXAMINED THE DOCUMEN T AND STATED IT BEING A REGISTERED DOCUMENT, MAY BE CONSIDERED FOR THE CLAI M OF THE ASSESSEE. THE ASSESSEE HAS CLAIMED THE DEDUCTION U/S 54 OF TH E I.T. ACT STATING THAT THE PROPERTY SOLD WAS THE ANCESTRAL PROPERTY WHICH WAS USED FOR THE RESIDENCE OF THE ASSESSEE WHICH IS EVIDENT FROM THE PARTITION DE ED AS WELL AS DETAILS OF THE PROPERTY AS MENTIONED IN THE PARTITION DEED AS WELL AS THE SALE DEED. THE SAID PROPERTY WAS A RESIDENTIAL HOUSE AND INCOME FROM TH E SAME WAS CHARGEABLE UNDER THE HEAD INCOME FROM HOUSE PROPERTY. THE AS SESSEES CONTENTIONS IN ITA NO.380/JP/2014 SHRI MOINODDIN VS.ITO WARD 1(1), A JMER 5 THIS REGARD ARE ACCEPTABLE IN VIEW OF THE PROVISION OF THE SEC. 54 OF THE I.T. ACT. THE ASSESSEE HAS PURCHASED A HOUSE PROPERTY NO. 847 /23 ON 25.07.2008 AT KAMELA MOHALLA, HARIJAN BASTI FOR RS. 20,00,000/- I N NAME OF HIS WIFE, SMT. ZUBEDA BIBI. THE ASSESSEE HAS EXPLAINED THAT THE SA ID PROPERTY WAS PURCHASED FROM THE SALE PROCEEDS OF THE ORIGINAL AS SET AND SMT. ZUBEDA BINI IS A HOUSEWIFE HAVING NO SOURCE OF INCOME. IT IS NO TED THAT IN THE CASE OF DIT INTERNATIONAL TAXATION VS. MRS. JENNIFER BHIDE 349 ITR 80 (KARN) REPLIED UPON BY THE APPELLANT, IT HAS HELD AS UNDER: (HEADNOTE) CAPITAL GAINS- EXEMPTION UNDER SS. 54/54EC-SCOPE A ND ALLOWABILITY- FOR PURPOSES OF SS. 54/54EC, IT IS NOT NECESSARY THAT PURCHASE OF PROPERTY OR INVESTMENT IN SPECIFIED BONDS MUST BE IN THE NAME OF ASSESSEE ONLY- ASSESSEE, OUT OF SALE PROCEEDS OF RESIDENTIAL PROPE RTY PURCHASING ANOTHER RESIDENTIAL PROPERTY AND SPECIFIED BONDS, EXEMPTION UNDER SS. 54/54EC COULD NOT BE DENIED TO HER TO THE EXTENT OF 50 PER CENT O N THE GROUND THAT NEW PROPERTY AND BONDS WERE PURCHASED IN THE NAMES OF A SSESSEE AND HER HUSBAND WHEN ADMITTEDLY NO CONSIDERATION FOLLOWED FROM THE HUSBAND. IN VIEW OF ABOVE FACTS, THE CLAIM OF DEDUCTION U/S 54 FOR THE PURCHASE CONSIDERATION OF RS. 20,00,000/- IS ALLOWABLE SUBJE CT TO DISCUSSION BELOW. IT IS SEEN THAT THE NEW HOUSE PROPERTY PURCHASED BY THE ASSESS IS CONSIST PARTLY OF THE SHOPS AND IS PARTLY RESIDENTIAL AS PE R THE PURCHASE DEED, DETAILS OF WHICH ARE AS UNDER: ,D TK;NKN IQ[RK IV~VH IKSK DWPH CUN FTLES XZKMM QY KSJ IJ NKS NWDKUS O IKAP DEJS O NKS JLKSBZ O NKS MCYW-LH-O NKS CKFK:E O ,D CJKENK O PCWRJH O NR IJ THUS CUS GQ;S GS E; [KQYK PKSD E; [KQYH HKWFE TKS LGUUQEK GS RFKK XZ KMM QYKSJ IJ GH DKEU ISLST GS ITA NO.380/JP/2014 SHRI MOINODDIN VS.ITO WARD 1(1), A JMER 6 FTLDH FKKYK HKWFE DK DQY {KS=QY 207.87 OXZ QQV RKS NQDKUKSA DKS GS TKS O;OLKF;D GS RFKK 1822-33 OXZ QQV VKOKLH; GS RFKK DKEU ISLST DK DQY {KS=QY 325-50 OXZ QQV DK 1 @ 2 VFOHKKTHR FGLLK VFKKZR 162-75 OXZ QQV GS] FTLESA FUFEZR HKKX 1470 OXZ QQV GS] E; FKKYK HKWFE] E; MLES CUH REKE RKEHJKR] E ; NR]