Sri.A.V.Manaf, Palakkad V. DCIT, Trichur

ITA 381/COCH/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2617 (ITAT-COCHIN)
• Duration Of Justice: 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-04-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 28-12-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M ANIL KUMAR
• Assessee Lawyers: C B M WARRIER
• Section: 263

Judgement Text

1 ITA NO.381/COCH/2012 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI B.R. BASKA RAN(AM) I.T.A NO. 381/COCH/2012 (ASSESSMENT YEAR 2005-06) SHRI A.V. MANAF VS DY.CIT, CENT.CIR. SAMRUDHI THRISSUR KALIKKAD, PALAKKAD PAN : AFIPA5241G (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI CBM WARRIER RESPONDENT BY : SHRI M ANIL KUMAR, C.I.T. DATE OF HEARING : 04-04-2013 DATE OF PRONOUNCEMENT : 12-04-2013 O R D E R PER N.R.S. GANESAN (JM) THIS APPEAL OF THE TAXPAYER IS DIRECTED AGAINST TH E ORDER OF THE ADMINISTRATIVE COMMISSIONER (CENTRAL), KOCHI DATED 16-11-2012 AND PERTAINS TO ASSESSMENT YEAR 2005-06. 2 ITA NO.381/COCH/2012 2. SHRI CBM WARRIER, THE LD.REPRESENTATIVE FOR THE TAXPAYER SUBMITTED THAT THE TAXPAYER IS A PARTNER IN SEVERAL PARTNERSH IP FIRMS AND THERE WAS A SEARCH IN ONE OF THE PARTNERSHIP FIRMS, M/S WELCARE HOSPITAL AND ALSO AT THE RESIDENTIAL PREMISES OF THE TAXPAYER. ACCORDING TO THE LD.REPRESENTATIVE, THE REVENUE AUTHORITIES SEIZED DOCUMENT RELATING TO SALE OF 10 CENTS OF LAND AT PATTIKKARA ON 31-03-2005. ACCORDING TO THE LD.R EPRESENTATIVE, THE TAXPAYER SOLD THE PROPERTY FOR RS.1 LAKHS TO SHRI R V RADHAKRISHNAN. IT APPEARS, SHRI RV RADHAKRISHNAN AVAILED A LOAN OF RS .10 LAKHS FROM KERALA STATE CO-OPERATIVE BANK BY MORTGAGING THAT PROPERTY . THE LOAN AVAILED BY SHRI RV RADHAKRISHNAN WAS SUBSEQUENTLY PASSED ON TO WELCARE HOSPITAL AS LOAN. WELCARE HOSPITAL REPAID THE LOAN WITH INTERE ST. 3. THE ADMINISTRATIVE COMMISSIONER, IN EXERCISE OF HER POWERS U/S 263 OF THE INCOME-TAX ACT FOUND THAT THERE WAS AN UNDIS CLOSED CONSIDERATION TO THE EXTENT OF RS.9 LAKHS SINCE THE PROPERTY WAS IMM EDIATELY MORTGAGED FOR RS.10 LAKHS BY THE PURCHASER. ACCORDING TO THE LD. REPRESENTATIVE, THE TRANSACTION BETWEEN THE TAXPAYER AND SHRI RV RADHAK RISHNAN HAS TO BE TAKEN INTO CONSIDERATION FOR THE PURPOSE OF DETERMI NING THE SALE CONSIDERATION. MERELY BECAUSE THE PURCHASER HAS AV AILED A LOAN WHICH WAS 3 ITA NO.381/COCH/2012 MORE THAN THE SALE CONSIDERATION OF THE PROPERTY, T HE ADMINISTRATIVE COMMISSIONER CANNOT DOUBT THE SALE CONSIDERATION OT HERWISE DISCLOSED IN THE REGISTERED SALE DEED. THEREFORE, ACCORDING TO THE LD.REPRESENTATIVE, THE ADMINISTRATIVE COMMISSIONER IS NOT JUSTIFIED IN REV ISING THE ORDER OF THE ASSESSING OFFICER. THE LD.REPRESENTATIVE FURTHER S UBMITTED THAT A SIMILAR ADDITION WAS MADE IN RESPECT OF THE VERY SAME TRANS ACTION TO THE EXTENT OF RS.9 LAKHS FOR THE ASSESSMENT YEAR 2008-09. THEREF ORE, ACCORDING TO THE LD.REPRESENTATIVE, THERE WAS A DOUBLE ADDITION. WH EN THE ADMINISTRATIVE COMMISSIONER FOUND THAT THE ADDITION SHOULD BE MADE FOR THE YEAR UNDER CONSIDERATION, HE SHOULD HAVE SIMULTANEOUSLY DIRECT ED THE ASSESSING OFFICER TO DELETE THE ADDITION FOR THE ASSESSMENT YEAR 2008 -09. THE ADMINISTRATIVE COMMISSIONER HAS NOT DONE SO. THEREFORE, ACCORDING TO THE LD.REPRESENTATIVE, IN FACT, THE ORDER PASSED BY THE ADMINISTRATIVE COMMISSIONER IS ERRONEOUS AND NOT THE ORDER OF THE ASSESSING OFFICER. 4. ON THE CONTRARY, SHRI M ANIL KUMAR, THE LD.DR SU BMITTED THAT THE VERY FACT THAT THE PURCHASER OF THE PROPERTY MORTGA GED THE PROPERTY AND AVAILED LOAN OF RS.10 LAKHS CLEARLY SHOWS THAT THE PURCHASER HAS UNDER STATED THE SALE CONSIDERATION IN THE SALE DEED. TH EREFORE, THE 4 ITA NO.381/COCH/2012 ADMINISTRATIVE COMMISSIONER HAS RIGHTLY EXERCISED H ER REVISIONAL JURISDICTION U/S 263 OF THE ACT. ON A QUERY FROM T HE BENCH AS TO WHETHER IF THE ADDITION HAS TO BE MADE FOR THE YEAR UNDER CONS IDERATION, THEN, COULD THE SAME ADDITION BE MADE FOR THE ASSESSMENT YEAR 2 008-09, THE LD.DR SUBMITTED THAT IF THE ADDITION IS CONFIRMED FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, THEN THERE CANNOT BE ANY ADDITION FO R THE ASSESSMENT YEAR 2008-09, THEREFORE, IT HAS TO BE DELETED FROM THE A SSESSMENT FOR ASSESSMENT YEAR 2008-09. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. ADMITTED LY, THERE WAS A SEARCH OPERATION IN THE PREMISES OF THE TAXPAYER AND THE D OCUMENT RELATING TO SALE OF 10 CENTS OF LAND AT PATTIKKARA WAS FOUND AN D SEIZED. THE SALE CONSIDERATION OF THE PROPERTY, AS PER THE DOCUMENT WAS RS.1 LAKH. HOWEVER, THE PURCHASER SHRI RV RADHAKRISHNAN AVAILE D A LOAN OF RS.10 LAKHS FROM THE BANK BY MORTGAGING THE PROPERTY. THE ASSE SSING OFFICER FOUND THAT NO BANK WOULD GIVE LOAN OF RS.10 LAKHS AGAINST THE MORTGAGE OF PROPERTY. THEREFORE, HE PRESUMED THAT THERE WAS UNDER STATEME NT OF SALE CONSIDERATION IN THE SALE DEED. ACCORDINGLY, THE A SSESSING OFFICER MADE 5 ITA NO.381/COCH/2012 ADDITION OF RS.9 LAKHS FOR THE ASSESSMENT YEAR 2008 -09 WHICH IS APPARENT FROM THE ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2 005-06. THE ASSESSING OFFICER HAS NOT MADE ANY ADDITION FOR THE ASSESSMEN T YEAR 2005-06. THEREFORE, IT IS NOT A DOUBLE ADDITION AS CONTENDED BY THE LD.REPRESENTATIVE FOR THE TAXPAYER. 6. HOWEVER, THE ADMINISTRATIVE COMMISSIONER, IN EXE RCISE OF HER REVISIONAL JURISDICTION FOUND THAT THE ADDITION OF RS.9 LAKHS SHOULD HAVE BEEN MADE FOR THE ASSESSMENT YEAR 2005-06 AND NOT F OR THE ASSESSMENT YEAR 2008-09. THE SUBJECT MATTER OF DISPUTE IS SAL E OF PROPERTY BY THE TAXPAYER TO ONE SHRI RV RADHAKRISHNAN. THEREFORE, WHAT IS TO BE EXAMINED IS - WHAT WAS THE SALE CONSIDERATION FOR THE PROPER TY WHICH WAS SOLD BY THE TAXPAYER TO SHRI RV RADHAKRISHNAN. THE TRANSACTION BETWEEN SHRI RV RADHAKRISHNAN AND THE BANK MAY BE ONE OF THE FACTOR S TO BE TAKEN INTO CONSIDERATION, BUT THAT CANNOT BE A CONCLUSIVE EVID ENCE TO SHOW THAT THE TAXPAYER HAS RECEIVED MORE CONSIDERATION. NORMALLY , THE SALE CONSIDERATION DISCLOSED IN THE REGISTERED SALE DEED WOULD BE PRIMA FACIE EVIDENCE FOR SALE OF THE PROPERTY. IF THE REVENUE AUTHORITIES HAVE ANY OTHER MATERIAL TO SHOW THAT THE SALE CONSIDERATION WAS MO RE THAN WHAT WAS 6 ITA NO.381/COCH/2012 DISCLOSED IN THE SALE DEED, THEN THE ASSESSING OFFI CER IS VERY WELL WITHIN HIS POWERS TO MAKE ADDITION ON THE BASIS OF THE MATERIA L ON RECORD. IN THIS CASE, THE ASSESSING OFFICER MADE ADDITION ONLY ON T HE BASIS OF THE MORTGAGE LOAN OBTAINED BY THE PURCHASER SHRI RV RADHAKRISHNA N FROM KERALA STATE CO-OPERATIVE BANK, PATTIKKARA. THE ASSESSING OFFIC ER HAS NOT EXAMINED WHETHER THE SALE CONSIDERATION WAS MORE THAN WHAT W AS DISCLOSED IN THE REGISTERED SALE DEED. IN THE ABSENCE OF ANY FINDIN G THAT THE SALE CONSIDERATION WAS MORE THAN WHAT WAS DISCLOSED IN T HE SALE DEED, THERE CANNOT BE ANY ADDITION MERELY BECAUSE THE PURCHASER HAS AVAILED LOAN OF RS.10 LAKHS WHICH IS MORE THAN WHAT WAS DISCLOSED I N THE SALE DEED AS PURCHASE CONSIDERATION. THE ENTIRE ADDITION HAS BE EN MADE ON SURMISES WITHOUT ANY PROPER EXAMINATION OF FACTS BY THE ASSE SSING OFFICER. MOREOVER, AS RIGHTLY POINTED OUT BY THE ADMINISTRAT IVE COMMISSIONER, THE SALE TOOK PLACE ON 31-03-2005, THEREFORE, THE ADDIT ION, IF ANY, HAS TO BE MADE ONLY FOR THE ASSESSMENT YEAR 2005-06 AND NOT F OR THE ASSESSMENT YEAR 2008-09. THEREFORE, THE ASSESSING OFFICER HAS TO EXAMINE WHETHER THE TAXPAYER HAS RECEIVED MORE AMOUNT THAN WHAT WAS DIS CLOSED IN THE REGISTERED SALE DEED AS SALE CONSIDERATION. SINCE SUCH AN EXERCISE WAS NOT DONE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION TH AT THE ADMINISTRATIVE 7 ITA NO.381/COCH/2012 COMMISSIONER HAS RIGHTLY EXERCISED HIS REVISIONAL J URISDICTION U/S 263 OF THE INCOME-TAX ACT. WE MAKE IT CLEAR THAT SINCE THE SAL E ITSELF TOOK PLACE ON 31- 03-2005, THE ADDITION, IF ANY, COULD BE MADE ONLY F OR THE ASSESSMENT YEAR 2005-06 AND THERE CANNOT BE ANY ADDITION FOR THE AS SESSMENT YEAR 2008-09. THEREFORE, AS RIGHTLY SUBMITTED BY THE LD.REPRESENT ATIVE FOR THE TAXPAYER, THE ADMINISTRATIVE COMMISSIONER OUGHT TO HAVE SIMUL TANEOUSLY DIRECTED THE ASSESSING OFFICER TO DELETE THE ADDITION MADE F OR ASSESSMENT YEAR 2008- 09. IN VIEW OF THE ABOVE DISCUSSION, WHILE CONFIRM ING THE ORDER OF THE ADMINISTRATIVE COMMISSIONER WE DIRECT THE ASSESSING OFFICER TO EXAMINE WHETHER THE TAXPAYER HAS RECEIVED ANY AMOUNT MORE T HAN WHAT WAS DISCLOSED IN THE REGISTERED SALE DEED. IF ANY MATE RIAL IS AVAILABLE ON RECORD TO SUGGEST THAT THE TAXPAYER HAS RECEIVED MORE AMOU NT THAN WHAT WAS DISCLOSED IN THE SALE DEED, THEN THAT AMOUNT HAS TO BE TREATED AS SALE CONSIDERATION AND BE BROUGHT TO TAX FOR THE ASSESSM ENT YEAR 2005-06. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THERE CA NNOT BE ANY ADDITION FOR ASSESSMENT YEAR 2008-09 IN RESPECT OF THE SALE OF P ROPERTY ON 31-03-2005. 8 ITA NO.381/COCH/2012 7. WITH THE ABOVE OBSERVATIONS, THE ORDER OF THE AD MINISTRATIVE COMMISSIONER IS CONFIRMED AND THE APPEAL FILED BY T HE TAXPAYER DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 12 TH DAY OF APRIL, 2012. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 12 TH APRIL, 2013 PK/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE COMMISSIONER OF INCOME-TAX 4. THE COMMISSIONER OF INCOME-TAX(A) 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH