P.H.Mohammed Kunju & Brother, Cochin V. DCIT, Ernakulam

ITA 389/COCH/2009

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 0840 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 8 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 01-07-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S C SONKAR
• Assessee Lawyers: S MOHANAN KITTICKAT

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.VIJAYAKUMARAN & SHRI SANJAY ARORA I.T.A.NO.389/COCH/2009 ASSESSMENT YEAR:2005-06 P.H.MOHAMAMED KUNJU & BROTHER, KOCHI. PA NO.AADFP 0200C VS. THE DY. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-2, KOCHI. (APPELLANT) ( RESPONDENT ) APPELLANT BY SHRI S. MOHANAN KITTICKAT RESPONDENT BY SHRI S.C. SONKAR, CIT.,DR O R D E R PER N.VIJAYAKUMARAN,J.M: THIS IS AN APPEAL BY THE ASSESSEE, VIZ. P.H.MOHAMA MED KUNJU & BROTHER, KOCHI. THIS APPEAL IS DIRECTED A GAINST THE ORDER OF THE LD. CIT(APPEALS)-III, KOCHI, DATED 9-4 -2009. THE ASSESSMENT YEAR INVOLVED IS 2005-06. THIS AP PEAL ARISES OUT OF THE ASSESSMENT COMPLETED U/S.153A R.W .S.153C & 143(3). 2. THERE WAS A SEARCH U/S.132 OF THE I.T.ACT,1961, CONDUCTED IN THE PREMISES OF THE ASSESSEE ON 5-10- 2005. DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSME NT YEAR UNDER CONSIDERATION, ASSESSEE PURCHASED 60.412 CENT S OF ITA NO. 389/COCH/2009 P.H.MOHAMM3ED KUNJU & BROTHER 2 LAND FROM THREE PERSONS FOR A CONSIDERATION OF RS.11,48,45,900/-. IN THE ACCOUNTS, THE VALUE OF THIS PROPERTY WAS SHOWN AS 1,57,36,700/- (INCLUDING ST AMP DUTY. FROM THE RESIDENCE OF TWO SELLERS, VIZ. RAVE ENDRAN AND RAJI SANAL, A PAPER GIVING FULL DETAILS OF THE CONSIDERATION GIVEN AND CHEQUE CONSIDERATION PAID B Y THEM WAS FOUND. WHEN CONFRONTED BOTH MR. KARTHIKEYAN , AND HIS BROTHER SHRI RAVEENDRAN ACCEPTED THE FACT THAT ADDITIONAL AMOUNT WAS RECEIVED. SMT. RAJI SANAL KUMAR DENIED THE SAME. THE RETURNS OF THE TWO BUYERS WERE FILED DE CLARING THE ADDITIONAL CONSIDERATION. ASSESSEE WAS FURNISH ED A COPY OF THE PAPER SEIZED FROM THE HOUSE OF THESE PERSONS AND REQUESTED TO SHOW CAUSE WHY THE VALUE MENTIONED IN THE PAPER RS.2,03,20,100/- SHOULD NOT BE SUBSTITUTED FO R THE SALE CONSIDERATION OF RS.54,74,200/- MENTIONED IN T HE DEED. THEY CONTENDED THAT THE PAPERS FOUND IN SOMEBODY EL SES HOUSE COULD NOT BE USED AGAINST THE ASSESSEE. HOW EVER, THE ASSESSING OFFICER OPINED THAT IT IS A WELL KNOW N FACT THAT PROPERTIES ARE NOT BEING SOLD AT THE DOCUMENTED PRI CE. THEREFORE ANY CONTRARY CLAIM OF THE ASSESSEE COULD NOT BE ACCEPTED. FROM THE SEIZED PAPERS, THE AMOUNT OF A DVANCE GIVEN, AMOUNT PAID IN CASH AND CHEQUE WAS ALSO MENT IONED. THE EVIDENCES FOUND FROM DIFFERENT PLACES SHOWED TH E SAME ITA NO. 389/COCH/2009 P.H.MOHAMM3ED KUNJU & BROTHER 3 FIGURES. THEREFORE, THE ASSESSING OFFICER ADDED T HE CASH CONSIDERATION MENTIONED IN THE SEIZED PAPER AS UNEX PLAINED INVESTMENT CHARGEABLE TO TAX U/S.69C OF THE ACT. THIS TREATMENT WAS CHALLENGED BY THE ASSESSEE IN APPEAL BEFORE THE LD. CIT(APPEALS), WHO UPHELD THE FINDINGS OF TH E ASSESSING OFFICER. HENCE, THE ASSESSEE IS ON SECOND APPEAL BEFORE THE TRIBUNAL. 3. THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT THE ASSESSING OFFICER HAS NOT DETECTED ANY UNACCOUNTED SOURCE TO THE ASSESSEE FROM WHERE THE ALLEGED PAYMENT OF M ORE THAN RS. 54 LAKHS WAS PAID TO THE VENDORS. THE FL OOR PRICE FIXED BY THE REGISTERING AUTHORITY FOR SIMILAR LAND IN THAT LOCATION WAS MUCH LOWER TO THE PRICE AT WHICH THIS PROPERTY IS PURCHASED. ANY OF THE VENDORS HAS CONCEDED HIG HER AMOUNT OF SALES CONSIDERATION. THE ACTION OF THE ASSESSING OFFICER IS BASED ONLY ON A COMPUTER PRINT OUT FROM THE VENDORS WHICH SHOWS THE RECEIPT OF SOME CASH BY THE M FROM THE ASSESSEE. ONE OF THE THREE VENDORS HAS DENIED T HIS RECEIPT. THE LD. COUNSEL FOR THE ASSESSEE RELIED ON THE DECISION HONBLE APEX COURT REPORTED IN 294 ITR 49 IN THE CASE OF CIT VS. P.V. KALYANASUNDARAM. THE LD. COU NSEL FOR THEE ASSESSEE FILED A COPY OF A COMBINED ORDER OF T HE ITA NO. 389/COCH/2009 P.H.MOHAMM3ED KUNJU & BROTHER 4 TRIBUNAL DATED 19-3-2010 IN THE CASE OF SANAL KUM AR AND RAJI SANAL KUMAR FOR THE ASSESSMENT YEAR 2005-06(IT A NO.822 & 823/COCH/2008), WHEREIN THE VERY SAME ISSU E WAS CONSIDERED AND WE HAVE HELD AS UNDER: WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE ADDITION TOWARD S CAPITAL GAIN HAS TO BE FIXED ON THE BASIS OF SALE CONSIDERATION REFLECTED IN THE REGISTERED SALE DEED , WHICH SHOULD BE THE CRITERIA FOR COMPUTATION OF CAPITAL G AIN. THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. BHANWARLKAL MURWATIYA (2008) 215 CTR 489 HAS HELD THAT THE PRICE OF THE LAND WAS DIFFERENT THAN THE O NE, RECITED IN THE SALE DEED UNLESS IT IS ESTABLISHED O N RECORD, THE DEPARTMENT HAS NO RIGHT TO MAKE ANY ADDITION. HOWEVER, THE LD. CIT, DR HAS RELIED ON THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CK SUDHAKARAN VS. ITO REPORTED IN 279 ITR 533 , WHICH IS NOT DIRECTLY APPLICABLE TO THE CASE IN HAND AND HAS RIGHTLY DISTINGUISHED BY THE LD. COUNSEL. IN THAT CASE, TH E PAYMENT WAS ADMITTED UNDER VDIS. THEREFORE, THE HONBLE JURISDICTIONAL HIGH COURT HAS HELD THAT THE REVENUE HAS DISCHARGED THE BURDEN OF PROVING THAT T HE ASSESSEE HAS ACTUALLY PAID MORE THAN WHAT THE ASSES SEE WAS RECEIVED. IT WAS UNDER THE GIVEN SET OF FACTS AND CIRCUMSTANCES, THE HONBLE HIGH COURT DECIDED THE I SSUE IN FAVOUR OF THE REVENUE BUT IN THE PRESENT CASE BEFOR E US, IT IS NOT ESTABLISHED THAT THE DEPARTMENT HAS DISCHARG ED THE BURDEN. IN OTHER WORDS, THE DEPARTMENT FAILED TO PROVE THAT THE CONSIDERATION RECEIVED FOR 12.567 CENTS OF LAND IS DIFFERENT FROM THE REGISTERED SALE DEED. THEREFOR E, THE EXCESS AMOUNT OR CONCEALED AMOUNT HAS TO BE ADOPTED FOR ITA NO. 389/COCH/2009 P.H.MOHAMM3ED KUNJU & BROTHER 5 COMPUTATION OF CAPITAL GAIN WILL NOT STAND TO TEST. UNDER THE ABOVE CIRCUMSTANCES, WE ARE OF THE VIEW THAT TH E ORDER OF THE LD. CIT(APPEALS) IS QUITE JUSTIFIED. IN VIEW OF THE ABOVE POSITION, THE LD. COUNSEL FOR THE ASSESSEE URGED US TO FOLLOW OUR OWN FINDING ON THE VERY SAME DEALING. 4. THE LD. CIT., DR SUPPORTED THE FINDINGS OF THE INCOME-TAX AUTHORITIES. 5. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD, INCLUDING THE PRECEDENTS. WE HAVE ALSO CONSIDERED THE EXTRACTED PORTION OF OUR ORDER. THE SEIZED DOCUMENT IS A CO MPUTER PRINT. IT BEARS NO SIGNATURE AND AS SUCH THERE IS NO EVIDENTIARY VALUE. IT HAS NOT BEEN SEIZED FROM TH E CUSTODY OF THE ASSESSEE. SIMILAR ISSUE WAS CONSID ERED BY THE TRIBUNAL IN THE CASE OF M/S. KAMAHENU MILK PRODUCTS, KOCHI IN IT(S&S)A NO.152/COCH/2004 DATED 15- 5-2009 AND IN ITA NO.351/COCH/2009 FOR THE ASSESSME NT YEAR 2005-06 IN THE CASE OF SMT. MEENAKSHI SUKUMARA N VS. DY.CIT DATED 09-03-2011 AND DECIDED IN FAVOUR O F THE ASSESSEE AND AGAINST THE REVENUE. THUS, CONSIDER ING ITA NO. 389/COCH/2009 P.H.MOHAMM3ED KUNJU & BROTHER 6 THE FACTS AND CIRCUMSTANCES OF THIS CASE AND THAT O F THE DECISION RELIED ON BY THE LD. COUNSEL AND THE EARLI ER DECISIONS OF THE TRIBUNAL IN ITS ENTIRETY, WE HOLD THAT THE ASSESSING OFFICER IS NOT AT ALL JUSTIFIED IN MAKING ADDITION OF RS.54,74,200 U/S.69C AND THE LD. CIT(APPEALS) IS WRONG IN CONFIRMING THE FINDINGS OF THE ASSESSING O FFICER. HENCE, WE SET ASIDE THE ORDERS OF THE AUTHORITIES B ELOW AND ALLOW THE CLAIM OF THE ASSESSEE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. SD/- SD/- (SANJAY ARORA) (N.VIJAYKUMARAN) ACCOUNTANT MEMBER JUDICIAL M EMBER ERNAKULAM, DATED THE 15 TH MARCH,2011. PM. COPY FORWARDED TO: 1. P.H.MOHAMAMED KUNJU & BROTHER, MARKET ROAD, ERNAKUL AM, KOCHI-31. 2. THE DY. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE- 2, KOCHI. 3. CIT(A)-III, KOCHI. 4. CIT, CENTRAL, KOCHI. 5. D.R.