Anil Kumar Bansal, Delhi V. ITO, Ghaziabad

ITA 4039/DEL/2015

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6499 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 8 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 01-03-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 18-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BEDOBINA CHAUDHURI
• Keywords: Additional evidence; Cost of acquisition
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC, NEW DELHI BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER ITA NO.4039/DEL/2015 ASSESSMENT YEAR : 2010-11 ANIL KUMAR BANSAL, C/O KAPIL GOEL, ADV., F-26/124, SECTOR-7, ROHINI, DELHI. VS. ITO, WARD- 1(1), GHAZIABAD. PAN : ADBPB 3742 J (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI KAPIL GOEL, ADV. RESPONDENT BY : MS. BEDOBINA CHAUDHURI, SR.DR DATE OF HEARING : 01-03-2017 DATE OF PRONOUNCEMENT : 09-03-2017 O R D E R PER S.V. MEHROTRA, A.M : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 17.03.2015 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS), MUZAFFARNAGAR, U/S 143(3) OF THE INCOME TAX ACT, 19 61 (IN SHORT THE ACT), RELATING TO ASSESSMENT YEAR 2010-11. 2. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE SOUG HT PERMISSION TO ADDUCE ADDITIONAL EVIDENCE UNDER RULE 29 OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES, 1963, WHICH IS ARCHITECTS CERTIFICATE FOR V ALUATION OF CONSTRUCTION AT RS.59,48,600/-. THE ASSESSEES RELIANCE IS PRIMARI LY ON THE DECISION OF 2 ITA NO.4039/DEL/2015 HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF TE XT HUNDRED INDIA PVT. LTD. (ORDER DATED 14.01.2011), 197 TAXMANN.COM 128, WHEREIN, IT HAS BEEN, INTER-ALIA, HELD THAT DISCRETION LIES WITH THE TRIBUNAL TO ADMI T ADDITIONAL EVIDENCE IN THE INTEREST OF JUSTICE AND ONCE THE TR IBUNAL FORMS AN OPINION THAT DOING SO WOULD BE NECESSARY FOR PROPER ADJUDIC ATION OF THE MATTER, THE ADDITIONAL EVIDENCE SHOULD BE ADMITTED. LD. DR STR ONGLY OBJECTED TO THE ADMISSION OF ADDITIONAL EVIDENCE SOUGHT TO BE FILED BY ASSESSEE AT THIS STAGE OF PROCEEDINGS AND POINTED OUT THAT THE ASSESSEE HA S NOT EXPLAINED AS TO WHAT WAS THE SUFFICIENT CAUSE WHICH PREVENTED HIM F ROM FILING THIS ARCHITECTS CERTIFICATE BEFORE THE ASSESSING OFFICE R. 3. BEFORE COMING TO ANY CONCLUSION, IT IS NECESSARY TO REFER TO THE FACTS LEADING TO FILING OF THE ADDITIONAL EVIDENCE IN THE FORM OF ARCHITECTS CERTIFICATE. THE ASSESSING OFFICER RECEIVED INFORM ATION THROUGH AIR REGARDING TRANSACTION IN PROPERTY. HE REQUIRED THE ASSESSEE TO FURNISH THE DETAIL OF ALL THE TRANSACTIONS DURING THE YEAR FOR WHICH THE ASSESSEE FURNISHED COPIES OF SALE DEED OF THREE FLATS CONSTRUCTED AT P LOT NO.B-14, PATEL NAGAR, GHAZIABAD MEASURING 172.94 SQ.MTRS. WHICH WAS ACQUI RED BY THE ASSESSEE IN THE PRECEDING ASSESSMENT YEAR ON 30.04.2008 FOR RS. 24,60,000/-. THE DETAILS OF CAPITAL GAIN/LOSS AS FURNISHED BY THE AS SESSEE WAS AS UNDER :- 3 ITA NO.4039/DEL/2015 COST OF ACQUISITION COST OF PURCHASE - RS.24,60,000/ - STAMP DUTY CHARGES - RS. 2,46,000/- REGISTRY OFFICE CHARGES - RS. 10,020/ - CHARGES PAID TO GDA - RS. 2,74,486/- TOTAL PURCHASE COST OF LAND - RS.29,90,506/- B/F TOTAL PURCHASE COST OF LAND RS.29,90,506/ - COST OF CONSTRUCTION RS.60,25,471/- TOTAL COST OF LAND & FLATS RS.90, 15,977/ - RS.90,15,977/ - COST OF SALE SALE OF GROUND FLOOR RS.30,00,000/- SALE OF FIRST FLOOR RS.21,50,000/ - SALE OF IIND FLOOR (WITH ROOF) RS.37,55,000/- R S .89,05,000/ - RS.89,05,000/ - CAPITAL LOSS RS. 1,10,977/- 4. THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO F URNISH THE DETAILS OF COST OF CONSTRUCTION CLAIMED BY HIM IN CONSTRUCTION OF FLATS AT RS.60,25,471/- WITH REFERENCE TO BOOKS OF ACCOUNT, BILLS AND VOUCHERS MAINTAINED BY HIM. THE ASSESSING OFFICER DID NOT A CCEPT THE ASSESSEES CLAIM FOR THE FOLLOWING REASONS :- (A) THE ASSESSEE EXPRESSED HIS INABILITY TO PRODUCE ALL BILLS AND VOUCHERS TO SUPPORT HIS CLAIM FOR COST OF CONSTRUCT ION EXCEPT FURNISHING SOME OF THE BILLS OF BRICKS, IRON BARS, WOODEN CHOWKHAT AND LABOURS. (B) THE ASSESSING OFFICER NOTED FOLLOWING DISCREPAN CIES IN THE BILLS FURNISHED BY ASSESSEE :- (I) THE ASSESSEE FURNISHED TWO BILLS DATED 23.10.20 08 OF M/S BABU RAM SHRI CHAND KABARI BOTH AMOUNTING TO RS.13,668.7 5 FOR WOODEN DOORS & WINDOWS CHAUKHATS. THE FIRST BILL F ROM BOOK NO.01, SL. NO.001 HAVING DETAIL/MEASUREMENT OF CHAU KHATS AND THE SECOND BILL IS ALSO HAVING BOOK NO.01, SL.NO.001 WI THOUT 4 ITA NO.4039/DEL/2015 DETAIL/MEASUREMENT BUT MENTIONING THEREIN 12 NUMBER S OF WINDOWS/CHAUKHATS IN DIFFERENT SIZES. ONLY SECOND BILL IS HAVING MODE OF TRANSPORTATION UP15C/9831 AND FIRST ONE IS SILENT ABOUT THE TRANSPORTATION. (II) THE ASSESSEE FURNISHED BILLS OF ELECTRIC FANS FROM CLASSIC DISTRIBUTORS DT.25.02.2009, 29.05.2009 & 31.05.2009 OUT OF WHICH ONLY ONE BILL DATED 31.05.09 BEARING BOOK NO.03 SL. NO.141 IS HAVING DETAIL OF VAT CHARGES ETC. AND APPEARS TO BE AUTHENTIC AND OTHER TWO BILLS HAVE NO DETAIL ABOUT VAT ETC., SIGN ATURES ON THE BILLS ARE ALSO NOT MATCHING WITH EACH OTHER. (III) HE OBSERVED THAT IT WAS SURPRISING TO NOTE T HAT NOWHERE IN THE SALE-DEED, IT WAS MENTIONED THAT THE FLATS WERE WELL FURNISHED AND EQUIPPED WITH THE ELECTRIC ACCESSORIES, BEDS AN D MATTRESSES, ETC.. HE, THEREFORE, CONCLUDED THAT IT COULD NOT B E SAID THAT THESE BILLS WERE ACTUALLY FOR THE FANS INSTALLED & MATTRE SSES PUT IN THE FLATS. (IV) THERE IS ALSO A BILL FROM M/S BALAJI ENTERPRI SES BEARING BOOK NO.04 SERIAL NO.175 WHEREBY SALE OF IRON BARS AMOUNTING TO RS.4,75,310/- HAS BEEN SHOWN. IT IS ALSO WORTH TO MENTION HERE THAT FROM THE PERUSAL OF SALE-DEED OF IIND FLOOR FL AT, IT IS SEEN THAT THE SAID FLAT WAS SOLD OUT ON 04.05.2009 FOR RS.37, 55,000/- AND AT PAGE NO.11 OF THE SALE-DEED PHOTO-GRAPH OF THE BUIL DING IS SHOWN. ON THE FIRST LOOK OF THIS PHOTO-GRAPH EVEN A LAYMAN CAN SAY THAT THE FLATS WERE READY ON 04.05.2009 BUT THE BILL FOR AS MUCH AS 17.490 M.T. OR IRON BARS HAS BEEN FURNISHED WHICH C ANNOT BE SAID TO BE USED FOR THE AFORESAID CONSTRUCTION. SUCH AR E OTHER BILLS OF CEMENT DATED 21.10.2009 (400 BAGS) RS.91,200/-, DT. 25.10.2009 (500 BAGS) RS.1,14,000/- & 30.10.2009 (500 BAGS) RS .1,14,000/- EVEN THESE BILLS DO NOT BEAR THE MODE OF TRANSPORTA TION OF CEMENT. (V) ORDER-SHEET ENTRY DATED 18.02.2013 POINT NO.6, THE ASSESSEE WAS REQUIRED TO FURNISH THE COMPLETION CER TIFICATE OF THE FLATS FROM THE GDA BUT THE SAME WAS NOT FURNISHED. (VI) THE ASSESSEE DID NOT FILE ANY VALUATION REPOR T FROM A GOVERNMENT APPROVED VALUER TO JUSTIFY THE CLAIM. (C) THE ASSESSING OFFICER ADOPTED THE COST OF CONST RUCTION AS PER VALUE OF THE STAMP VALUATION OFFICER AT THE RATE OF RS.7,500/- PER 5 ITA NO.4039/DEL/2015 SQ.MTRS. AND DETERMINED THE COST OF CONSTRUCTION AT RS.27,28,125/- OBSERVING AS UNDER :- 2.3 IT IS ALSO WORTH TO MENTION HERE THAT THE ASSE SSEE HAS DECLARED THE SALE PRICE OF THE FLATS EXACTLY AS PER THE VALUE OF STAMP VALUATION OFFICER (D.M.) WHEREAS THE ACTUAL VALUE OF FLATS IN THE VIC INITY IS NOT LESS THAN RS.50 LACS HAVING SUPER COVERED AREA OF 121.25 SQ.M ETER (ONE DRAWING/ DINING ROOM, FOUR BED ROOMS, ONE KITCHEN, LOBBY & T WO TOILETS) BUT INFLATED THE COST OF CONSTRUCTION. THE COST OF CON STRUCTION ADOPTED BY THE STAMP VALUATION OFFICER IS RS.7,500/- PER SQ.METER & IS ACCORDING TO THE GOVT. RATES WHICH HAS BEEN APPLIED BY THE STAMP VAL UATION OFFICER. THUS, THE COST OF CONSTRUCTION OF ALL THE THREE FLO ORS COMES TO RS.27,28,125/- (RS.7,500 X 121.25 X 3 FLOORS). THE RATES OF CONSTRUCTION BY THE GOVERNMENT ALTHOUGH REPRESENTS ON THE HIGHER SIDE THAN THE ACTUAL COST OF CONSTRUCTION BY THE PRIVATE CONTRACTORS BUT GIVING BENEFIT OF THE SAME TO THE ASSESSEE AND CONSIDERING THE SAME REASO NABLE & AUTHENTIC, THE COST OF CONSTRUCTION IS ADOPTED @ RS.7,500/- PE R SQ.METER. 5. HE, ACCORDINGLY, COMPUTED THE CAPITAL GAINS AT R S.31,86,370/- AS AGAINST THE LOSS OF RS.1,10,977/- DECLARED BY THE A SSESSEE. BEFORE LD. CIT(A), THE ASSESSEE HAD EXPLAINED THE REASONS FOR DISCREPANCIES POINTED OUT BY THE ASSESSING OFFICER WHICH ARE IN THE WRITTEN S UBMISSIONS REPRODUCED IN THE LD. CIT(A)S ORDER FROM PAGE 3 ONWARDS. THE AS SESSEE ALSO POINTED OUT THAT THE STAMP VALUATION AUTHORITY ADOPT THE VALUE ON THE BASIS OF READY RECKONER WHICH PRESCRIBES AREA-WISE FLAT RATES. IT WAS POINTED OUT THAT THE READY RECKONER WAS BEING PREPARED AND MAINTAINED BY STAMP AUTHORITIES FOR THE PURPOSE OF COLLECTING STAMP DUTY. IT HAD NO ST ATUTORY FORCE AND IT COULD NOT FORM A FOUNDATION TO DETERMINE THE VALUE OF AN ASSET. IT WAS FURTHER 6 ITA NO.4039/DEL/2015 SUBMITTED THAT READY RECKONER DOES NOT PROVIDE A RE ALISTIC VALUE OF ALL THE PROPERTIES FOR THE SIMPLE REASON THAT THERE CANNOT BE A RULE OF THUMB IN THE MATTER OF PROPERTY PRICES. THE DETAILS MENTIONED I N THIS REGARD ARE CONTAINED AT PAGE 5 AND 6 OF LD. CIT(A)S ORDER. HOWEVER, LD . CIT(A) CONFIRMED THE ASSESSING OFFICERS ACTION OBSERVING AS UNDER :- THE ORDER OF THE AO AND THE SUBMISSION OF THE APPE LLANT HAVE BEEN CONSIDERED. FIRST OF ALL THE AO HAS GIVEN A CATEGORICAL FINDING IN THE ASSESSMENT ORDER THAT THE APPELLANT EXPRESSES HIS INABILITY TO PRODUCE AL L BILLS AND VOUCHERS TO SUPPORT HIS CLAIM FOR COST OF CONSTRUCTION EXCEPT FURNISHIN G SOME OF THE BILLS OF BRICKS, IRON BARS, WOODEN CHAUKHAT AND LABOURS. THIS FINDI NG OF THE AO HAS NOT BEEN CONTROVERTED BY THE APPELLANT. THIS PROVES THAT TH E APPELLANT COULD NOT PRODUCE ALL THE BILLS AND VOUCHERS IN SUPPORT OF HIS CLAIM OF CONSTRUCTION OF RS.60,25,471/-. AS REGARDS THE DISCREPANCIES IN THE BILLS ARE CONCE RNED, THE APPELLANT COULD NOT EXPLAIN THE REASON WHY THE BILLS OF IRON BARS AND CEMENT RELATE TO THE PERIOD AFTER THE FLAT WAS SOLD. THE APPELLANTS EX PLANATION IN THIS REGARD IS AS FOLLOWS:- THE MATERIAL WAS TAKEN ON CREDIT AND WHEN THE FLAT WAS SOLD HE MADE THE PAYMENTS TO THE SUPPLIERS AND ASKED FOR THE BILLS. THE ABOVE EXPLANATION IS NOT ACCEPTABLE AS NOBODY W ILL GIVE THE BILLS AFTER THE PAYMENT IS RECEIVED. IN FACT, ON CREDIT SALE I T IS MORE IMPORTANT FOR THE SELLERS TO RAISE THE BILL AND TAKE ACKNOWLEDGEMENT FROM THE PURCHASER. NO EVIDENCE HAS BEEN PRODUCED IN THIS PROCEEDING TO SUBSTANTIATE TH E CLAIM OF EXPENDITURE AMOUNTING TO RS.6025471/-. IN VIEW OF THESE FACTS, THE AO WAS JUSTIFIED IN REJECTING THE CLAIM OF THE APPELLANT. THE AO HAS B EEN REASONABLE IN ADOPTING THE RATE OF RS.7500 PER SQ. METER FOR COST OF CONSTRUCT ION WHICH IS THE PRESCRIBED GOVERNMENT RATE. THE ORDER OF THE AO IS CONFIRMED. THE GROUND OF APPEAL NO.1 IS DISMISSED. 6. LD. COUNSEL REFERRED TO PAGE 148 OF PAPER BOOK, WHEREIN, DETAILS OF ALL PURCHASES MADE WITH NAME OF PARTIES, ADDRESS, T IN NUMBER, PAN 7 ITA NO.4039/DEL/2015 NUMBER, DETAILS OF ITEM PURCHASED AND MODE OF PAYME NT IS GIVEN. LD. COUNSEL SUBMITTED THAT THE ASSESSING OFFICER IS NOT COMPETENT TO MAKE VALUATION OF PROPERTY AND HE SHOULD HAVE REFERRED T HE MATTER TO AN EXPERT SUCH AS GOVERNMENT APPROVED VALUER OR DVO. LD. COU NSEL FURTHER REFERRED TO LD. CIT(A)S FINDINGS, AS REPRODUCED EARLIER, AN D POINTED OUT THAT HE HAS NOT EXAMINED THE DETAILS FURNISHED BY ASSESSEE. LD . DR SUBMITTED THAT ONUS WAS ON ASSESSEE TO ESTABLISH THE COST OF CONSTRUCTI ON WHICH HE FAILED TO SUBSTANTIATE AND, THEREFORE, THE ADDITIONAL EVIDENC E IN THE FORM OF ARCHITECTS CERTIFICATE SHOULD NOT BE ADMITTED. 7. I HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PA RTIES AND PERUSED THE RECORD OF THE CASE. ADMITTEDLY, THE ASSESSING OFFI CER HAS ADOPTED THE COST OF CONSTRUCTION AS PER STAMP VALUATION READY RECKON ER WHICH CANNOT SUBSTITUTE THE ACTUAL COST OF CONSTRUCTION PROVIDED ASSESSEE IS ABLE TO SUBSTANTIATE HIS CLAIM. HOWEVER, IF ASSESSEE IS NO T ABLE TO SUBSTANTIATE ITS CLAIM THEN VALUATION OF PROPERTY NEEDS TO BE REFERR ED TO A REGISTERED VALUER/ DVO FOR DETERMINATION OF VALUE OF PROPERTY. WHATEV ER THE DISCREPANCIES WERE POINTED OUT BY THE ASSESSING OFFICER FOR REJEC TING THE ASSESSEES CLAIM WERE EXPLAINED BEFORE LD. CIT(A), HOWEVER, LD. CIT( A) HAS NOT COMMENTED 8 ITA NO.4039/DEL/2015 UPON THE SAME IN DETAIL. THE HONBLE DELHI HIGH CO URT IN THE CASE OF TEXT HUNDRED INDIA PVT. LTD. (SUPRA) HAS, INTER-ALIA, HELD AS UNDER :- 13. THE AFORESAID CASE LAW CLEARLY LAYS DOWN A NEA T PRINCIPLE OF LAW THAT DISCRETION LIES WITH THE TRIBUNAL TO ADMIT ADDITION AL EVIDENCE IN THE INTEREST OF JUSTICE ONCE THE TRIBUNAL AFFIRMS THE OPINION THAT DOING SO WOULD BE NECESSARY FOR PROPER ADJUDICATION OF THE MATTER. THIS CAN BE DONE EVEN WHEN APPLICATION IS FILED BY ONE OF THE PARTIES TO THE APPEAL AND IT NE ED NOT TO BE A SUO MOTU ACTION OF THE TRIBUNAL. THE AFORESAID RULE IS MADE ENABLING T HE TRIBUNAL TO ADMIT THE ADDITIONAL EVIDENCE IN ITS DISCRETION IF THE TRIBUN AL HOLDS THE VIEW THAT SUCH ADDITIONAL EVIDENCE WOULD BE NECESSARY TO DO SUBSTA NTIAL JUSTICE IN THE MATTER. IT IS WELL-SETTLED THAT THE PROCEDURE IS HANDMADE OF J USTICE AND JUSTICE SHOULD NOT BE ALLOWED TO BE CHOKED ONLY BECAUSE OF SOME INADVERTE NT ERROR OR OMISSION ON THE PART OF ONE OF THE PARTIES TO LEAD EVIDENCE AT THE APPROPRIATE STAGE. ONCE IT IS FOUND THAT THE PARTY INTENDING TO LEAD EVIDENCE BEF ORE THE TRIBUNAL FOR THE FIRST TIME WAS PREVENTED BY SUFFICIENT CAUSE TO LEAD SUCH AN EVIDENCE AND THAT THIS EVIDENCE WOULD HAVE MATERIAL BEARING ON THE ISSUE W HICH NEEDS TO BE DECIDED BY THE TRIBUNAL AND ENDS OF JUSTICE DEMAND ADMISSION O F SUCH AN EVIDENCE, THE TRIBUNAL CAN PASS AN ORDER TO THAT EFFECT. 8. CONSIDERING THE ENTIRETY OF FACTS, I CONSIDER IT IN THE INTEREST OF JUSTICE THAT THE ARCHITECTS CERTIFICATE BEING THAT OF AN E XPERT SHOULD BE ADMITTED TO ADVANCE THE CAUSE OF SUBSTANTIAL JUSTICE. THE ASSE SSING OFFICER WOULD BE FREE TO REFER THE VALUATION OF PROPERTY TO DVO FOR PROPER DETERMINATION OF COST OF CONSTRUCTION OF PROPERTY. AFTER TAKING INT O CONSIDERATION THE OPINION OF TWO EXPERTS, HE WILL FRAME THE ASSESSMENT DE-NOVO . IN THE RESULT, THE ASSESSEES APPLICATION UNDER RULE 29 OF ITAT RULES, 1963 IS ALLOWED AND THE MATTER IS RESTORED BACK TO THE FILE OF THE ASSE SSING OFFICER FOR DE-NOVO ASSESSMENT IN TERMS OF AFOREMENTIONED OBSERVATIONS. 9 ITA NO.4039/DEL/2015 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 09 TH DAY OF MARCH, 2017. SD/- (S.V. MEHROTRA) ACCOUNTANT MEMBER DATED : 09-03-2017. SUJEET COPY OF ORDER TO: - 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT 4) THE CIT(A) 5) THE DR, I.T.A.T., NEW DELHI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, NEW DELHI