DCIT, Kanpur V. M/s. Yash Papers Ltd., Kanpur

ITA 428/LKW/2010

• Counselvise Citation: 42823714 RSA 2010
• Duration Of Justice: 4 year(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-06-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 13-05-2014
• Assessment Year: 2003-2004
• Appeal Filed On: 10-06-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R K RAM
• Assessee Lawyers: P K KAPOOR
• Keywords: Sale consideration of property below Jantri Value; Business income; Cost of acquisition; Revenue expenditure
• Section: 50C; 80HHC

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.428/LKW/2010 ASSESSMENT YEAR:2003 - 04 DY. C.I.T. - 4, KANPUR. VS. M/S YASH PAPERS LTD., 47/81, HATIA BAZAR, KANPUR. PAN:AAACY0482H (APPELLANT) (RESPONDENT) C.O.NO.32/LKW/2010 (IN ITA NO.428/LKW/2010) ASSESSMENT YEAR:2003 - 04 M/S YASH PAPERS LTD., 47/81, HATIA BAZAR, KANPUR. PAN:AAACY0482H VS. DY.C.I.T. - 4, KANPUR. (OBJECTOR) (RESPONDENT) REVENUE BY SHRI R. K. RAM, D.R. ASSESSEE BY SHRI P. K. KAPOOR, C.A. DATE OF HEARING 13/05/2014 DATE OF PRONOUNCEMENT 1 3 /06/2014 O R D E R PER A. K. GARODIA, A.M. THE APPEAL IS FILED BY THE REVENUE AND THE CROSS OBJECTION IS FILED BY THE ASSESSEE, WHICH ARE DIRECTED AGAINST THE ORDER OF CIT (A) - II, KANPUR DATED 29/03/2010 FOR ASSESSMENT YEAR 2003 - 2004. 2. FIRST WE TAKE UP THE APPEAL FILED BY THE REVENUE. GROUND NO. 1 OF REVENUES APPEAL IS AS UNDER: 2 1. THAT THE COMMISSIONER OF INCOME TAX (APPEALS) - II, KANPUR HAS ERRED IN LAW AND ON FACTS IN DIRECTING THE ASSESSING OFFICER TO EXCLUDE INTEREST FROM FIXED DEPOSITS TO THE EXTENT OF 90% IGNORING THE FACTS THAT INTER EST EARNED FROM FIXED DEPOSITS HAS NO DIRECT NEXUS WITH THE BUSINESS ACTIVITY OF THE ASSESSEE. 3. LEARNED D.R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER AND PLACED RELIANCE ON THE JUDGMENT OF HON'BLE DELHI HIGH COURT RENDERED IN THE CASE OF CIT VS. SHRI RAM HONDA POWER EQUIP AS REPORTED IN 289 ITR 475 . 4. AS AGAINST THIS, LEARNED A.R. OF THE ASSESSEE SUPPORTED THE ORDER OF LEARNED CIT(A). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND THE JUDGMENT CITED BY LEARNED D.R. OF THE REVENUE. WE FIND THAT THE ASSESSEE HAS SHOWN A N INCOME OF RS.1,88,126/ - ON ACCOUNT OF INTEREST ON FDR. THIS INCOME WAS DECLARED BY THE ASSESSEE UNDER THE HEAD INCOME FROM BUSINESS BUT THE ASSESSING OFFICER ASSESSED THE SAME UNDER THE HEAD INCOME FROM OTHER SOURCES AND AS A CONSEQUENCE , THIS INCOME WAS NOT CONSIDERED FOR COMPUTING DEDUCTION ALLOWABLE TO THE ASSESSEE U/S 80HHC OF THE ACT. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A) WHO HELD THAT ONLY 9 0% OF SUCH INTEREST INCOME SHOULD BE EXCLUDED FROM BUSINESS INCOME FOR THE PURPOSE OF COMPUTING DEDUCTION ALLOWABLE TO THE ASSESSEE U/S 80HHC OF THE ACT. UNDER THESE FACTS, IN OUR CONSIDERED OPINION, THE JUDGMENT OF HON'BLE DELHI HIGH COURT CITED BY LEARN ED D.R. OF THE REVENUE HAVING BEEN RENDERED IN THE CASE OF SHRI RAM HONDA POWER EQUIP (SUPRA) IS SQUARELY APPLICABLE. IN THIS CASE , IT WAS HELD BY HON'BLE DELHI HIGH COURT THAT EVEN IF THE INTEREST INCOME IS EARNED ON FDR WHICH WERE PLACED WITH THE BANK F OR AVAILING CREDIT FACILITIES, EVEN THEN SUCH INTEREST INCOME IS ASSESSABLE UNDER THE HEAD INCOME FROM OTHER SOURCES. RESPECTFULLY, FOLLOWING THIS JUDGMENT OF HON'BLE DELHI HIGH COURT, WE REVERSE 3 THE ORDER OF CIT(A) ON THIS ISSUE AND RESTORE THAT OF THE A SSESSING OFFICER. ACCORDINGLY, GROUND NO. 1 OF REVENUES APPEAL IS ALLOWED. 6. GROUND NO. 2 OF THE REVENUES APPEAL IS AS UNDER: 2. THAT THE COMMISSIONER OF INCOME TAX (APPEALS) - II, KANPUR HAS ERRED IN LAW AND ON FACTS IN ALLOWING THE CLAIM OF THE ASSESSEE TO WRITE OFF THE ADVANCE PAID FOR DEVELOPMENT OF COMPUTER SOFTWARE AMOUNTING TO RS.3,00,000/ - WHICH WAS NOT RECOVERED BY THE ASSESSEE IGNORING THE FACTS THAT THE NON - RECOVERABLE ADVANCE OF CAPITAL GOODS SHOULD BE TREATED AS CAPITAL LOSS. 7. LEARNED D.R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER. HE FURTHER SUBMITTED THAT NO EFFORT WAS MADE BY THE ASSESSEE FOR RECOVERY OF THIS ADVANCE OF RS.3,00,000/ - . RELIANCE WAS PLACED ON THE FOLLOWING JUDICIAL PRONOUNCEMENT S : (I) COMMISSIONER OF INC OME - TAX VS ANJANI KUMAR CO. LTD. [2003] 259 ITR 114 (RAJ) (II) BADRIDAS DAGA VS COMMISSIONER OF INCOME - TAX [1958] 34 ITR 10 (SC) (III) ALEMBIC CHEMICAL WORKS CO. LTD. VS COMMISSIONER OF INCOME - TAX [1989] 177 ITR 377 (SC) 8. AS AGAINST THIS, LEARNED A.R. O F THE ASSESSEE SUPPORTED THE ORDER OF CIT(A). 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND THE JUDGMENT S CITED BY LEARNED D .R. OF THE REVENUE. WE FIND THAT IN THE ASSESSMENT ORDER , THE ASSESSING OFFICER HAS FO LLOWED THE JUDGMENT OF HON'BLE APEX COURT RENDERED IN THE CASE OF COMMISSIONER OF INCOME - TAX VS MYSORE SUGAR CO. LTD. [1962] 46 ITR 649 (SC) . THE RELEVANT PORTION HAS BEEN REPRODUCED BY THE ASSESSING OFFICER ON PAGE 4 OF THE ASSESSMENT ORDER, WHICH IS RE PRODUCED BELOW ALSO FOR THE SAKE OF READY REFERENCE: 4 TO FIND OUT WHETHER AN EXPENDITURE IS ON THE CAPITAL ACCOUNT OR ON REVENUE, ONE MUST CONSIDER THE EXPENDITURE IN RELATION TO THE BUSINESS. SINCE ALL PAYMENTS REDUCE CAPITAL IN THE ULTIMATE ANALYSIS, ONE IS APT TO CONSIDER A LOSS AS AMOUNTING TO A LOSS OF CAPITAL. BUT THIS IS NOT TRUE OF ALL LOSSES, BECAUSE LOOSE S IN THE RUNNING OF THE BUSINESS CANNOT BE SAID TO BE OF CAPITAL. THE QUESTIONS TO CONSIDER IN THIS CONNECTION ARE : FOR WHAT WAS THE MONEY LAID OUT ? WAS IT TO ACQUIRE AN ASSET OF AN ENDURING NATURE FOR THE BENEFIT OF THE BUSINESS, OR WAS IT AN OUTGOING IN THE DOING OF THE BUSINESS ? IF MONEY BE LOST IN THE FIRST CIRCUMSTANCE, IT IS A LOSS OF CAPITAL, BUT IF LOST IN THE SECOND CIRCUMSTANCE, IT IS A REVENUE LOSS. IN THE FIRST, IT BEARS THE CHARACTER OF AN INVESTMENT, BUT IN THE SECOND, TO USE A COMMONL Y UNDERSTOOD PHRASE, IT BEARS THE CHARACTER OF CURRENT EXPENSES. 9.1 AFTER REPRODUCING THIS PARA FROM THE JUDGMENT OF HON'BLE APEX COURT, THIS FINDING IS GIVEN BY THE ASSESSING OFFICER THAT THE ADVANCES IN QUESTION WERE GIVEN FOR CAPITAL GOODS AND T HEREFORE, IT IS A CAPITAL LOSS AS PER THE JUDGMENT OF HON'BLE APEX COURT. THE CIT(A) HAS DELETED THIS DISALLOWANCE BY FOLLOWING THE SAME JUDGMENT OF HON'BLE APEX COURT WHICH HAS BEEN FOLLOWED BY THE ASSESSING OFFICER FOR MAKING DISALLOWANCE. UNDER THIS S ITUATION, WE HAVE TO FIND OUT AND DECIDE AS TO WHETHER THE ASSESSING OFFICER IS JUSTIFIED IN DISALLOWING THE AMOUNTS BY FOLLOWING TH IS JUDGMENT OF HON'BLE APEX COURT OR AS TO WHETHER THE CIT(A) IS JUSTIFIED IN DELETING THIS DISALLOWANCE BY FOLLOWING THE SAME JUDGMENT OF HON'BLE APEX COURT. FROM T HE RELEVANT PARA OF THE JUDGMENT OF HON'BLE APEX COURT REPRODUCED BY THE ASSESSING OFFICER A ND BY US ALSO AS ABOVE, WE FIND THAT IT WAS HELD BY HON'BLE APEX COURT IN THIS CASE THAT THE ADVANCES ARE TO BE CATEGORIZED IN TWO CATEGORIES. THE FIRST CATEGORY IS WHE RE THE MONEY WAS LAID OUT TO ACQUIRE AN ASSET OF ENDURING NATURE FOR THE BENEFIT OF THE BUSINESS AND THE SECOND CATEGORY WAS HELD TO BE AN OUTGOING IN DOING OF THE BUSINESS. THEREAFTER IT WAS HELD BY HON'BLE APEX COURT THAT I F MONEY IS LOST IN THE FIRST CATEGORY , THEN THIS IS A LOSS OF CAPITAL NATURE AND IF LOST IS IN THE SECOND CATEGORY , I T IS A REVENUE LOSS. IN THE PRESENT CASE , AS PER THE FACTS NOTED BY THE ASSESSING OFFICER, THE MONEY IS LOST IN THE FIRST 5 CATEGORY AND THEREFORE, AS PER THE JUDGMENT OF HON'BLE APEX COURT, THE LOSS IN QUESTION IS CAPITAL LOSS AND NOT ALLOWABLE AS REVENUE LOSS. THIS FACTUAL FINDING OF THE ASSESSING OFFICER IS NOT CONTROVERTED AS PER THE ORDER OF LEARNED CIT (A) AND LEARNED AR OF THE ASSESSEE ALSO COULD NOT POINT OUT ANY MISTAKE IN THE SAME. WHEN THE ASSESSING OFFICER HAS DISALLOWED THE CLAIM BY FOLLOWING THE JUDGMENT OF HON'BLE APEX COURT, THE OTHER JUDGMENTS FOLLOWED BY CIT(A) BEING THE JUDGMENT OF HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME - TAX VS ANJANI KUMAR CO. LTD . (SUPRA) IS NOT RELEVANT BECAUSE A JUDGMENT OF APEX COURT HAS TO BE FOLLOWED IN PREFERENCE TO THE JUDGMENT OF ANY HIGH COURT. BY RESPECTFULLY FOLLOWING THIS JUDGMENT OF HON'BLE APEX COURT, WE REVERSE THE ORDER OF CIT(A) ON THIS ISSUE AND RESTORE THAT OF THE ASSESSING OFFICER. GROUND NO. 2 OF THE REVENUE IS ALSO ALLOWED. 10. GROUND NO. 3 OF THE REVENUES APPEAL IS AS UNDER: 3. THAT THE COMMISSIONER OF INCOME TAX (APPEALS) - II, KANPUR HAS ERRED IN LAW AND ON FACTS IN ALLOWING THE EXP ENSES AMOUNTING TO RS.1,50,000/ - GIVEN AS ADVANCE FOR SUPPLY OF COMPUTER SOFTWARE UNDER THE HEAD 'LEGAL & PROFESSIONAL CHARGES'. 11. LEARNED D.R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER. HE DRAWN OUR ATTENTION TO PAGE NO. 21 & 22 OF THE PAPER BOOK AND POINTED OUT THAT AS PER THE VOUCHER AND BILL OF STRABUS ERP AVAILABLE IN THE PAPER BOOK, THE AMOUNT WAS GIVEN FOR DELIVERY OF BASE MODULES OF STRABUS ERP AND NOT FOR CONSULTANCY CHARGES, AS HAS BEEN CLAIMED. 12. LEARNED A.R. OF THE ASSESSEE SUPPORTED THE ORDER OF LEARNED CIT(A). 13. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THIS DISALLOWANCE WAS MADE BY THE ASSESSING OFFICER ON THE BASIS THAT O UT OF VARIOUS AMOUNTS CLAIMED BY THE ASSESSEE UNDER THE HEAD LEGAL AND 6 PROFESSIONAL CHARGES, AN AMOUNT OF RS.1,50,000/ - IS NOT ALLOWABLE BECAUSE THE SAME WAS GIVEN AS ADVANCE FOR SUPPLY OF COMPUTER SOFTWARE. THIS DISALLOWANCE WAS DELETED BY CIT(A) ON THE BASIS THAT THIS ISSUE IS SIMILAR TO THE ISSUE AS PER GROUND NO. 4, RAISED BY THE ASSESSEE BEFORE HIM AND, THEREFORE, HE ALLOWED RELIEF TO THE ASSESSEE. AS PER GROUND NO. 4, THE ISSUE RAISED BEFORE CIT(A) WAS REGARDING DISALLOWANCE OF RS.3,00,000/ - BEING A DVANCE PAID FOR DEVELOPMENT OF COMPUTER SOFTWARE, WHICH WAS NOT RECOVERED AND WAS WRITTEN OF UNDER THE HEAD BALANCE S WRITTEN OFF. ON THAT ISSUE ALSO , WE HAVE REVERSED THE ORDER OF CIT (A) AND RESTORED THAT OF THE ASSESSING OFFICER. MOREOVER, THE ISSUE IN BOTH THESE GROUNDS RAISED BEFORE THE CIT(A) ARE DIFFERENT. THE FIRST ISSUE IS REGARDING WRITING OFF OF ADVANCES WHICH MAY BE ALLOWABLE IF THE ADVANCES WERE IN THE COURSE OF RUNNING OF BUSINESS. BUT THE ISSUE INVOLVED IN GROUND NO. 5 RAISED BEFORE CIT(A) WAS REGARDING ADVANCE GIVEN FOR SUPPLY OF COMPUTER SOFTWARE. ON THIS ISSUE, THIS IS NOT THE CASE OF THE ASSESSEE THAT THIS ADVANCE WAS NOT RECOVERABLE AND NO SUPPLY WAS MADE BY THE ASSESSEE TO WHOM ADVANCE OF RS.1,50,000/ - WAS GIVEN. SUBSEQUENTLY, AS PE R THE BILL OF THE PARTY AVAILABLE ON PAGE NO. 22 OF THE PAPER BOOK, THIS BILL IS NOT FOR ANY CONSULTANCY CHARGES BUT FOR DELIVERY OF BASE MODULES OF STRABUS ERP. SUCH CHARGES FOR ACQUISITION OF NEW SOFTWARE IS NOT ALLOWABLE AS REVENUE EXPENDITURE. HENCE, ON THIS ISSUE ALSO , WE REVERSE THE ORDER OF CIT(A) AND RESTORE THAT OF THE ASSESSING OFFICER. ACCORDINGLY, GROUND NO. 3 IS ALSO ALLOWED. 14. GROUND NO. 4 OF THE REVENUES APPEAL IS AS UNDER: 4. THAT THE COMMISSIONER OF INCOME TAX (APPEALS) - II, KANPUR HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF CLOSING STOCK AMOUNTING TO RS.2,37,010/ - IN CASE OF RAW MATERIALS AND RS.96,979/ - IN CASE OF PADDY HUSK IGNORING THE FACT THAT THE A.O. HAS EXERCISED HIS POWER U/S 145(3) OF THE ACT NOT TO ACCEPT TH E METHOD OF CALCULATION OF CLOSING STOCK WHICH HAS NOT BEEN REGULARLY FOLLOWED BY THE ASSESSEE. 7 15. LEARNED D.R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER WHEREAS LEARNED A.R. OF THE ASSESSEE SUPPORTED THE ORDER OF CIT(A). 16. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THIS ADDITION WAS MADE BY THE ASSESSING OFFICER ON THE BASIS THAT THE ASSESSEE HAS CHANGED THE METHOD OF VALUATION OF CLOSING STOCK IN RESPE CT OF B AGASSE, OLD GUNNY/JUTE BAGS, IMPORTED WASTE PAPER, CORRUGATED CARTON AND WASTE PAPER . HE HAS NOTED ON PAGE NO. 6 OF THE ASSESSMENT ORDER THAT UP TO ASSESSMENT YEAR 2002 - 03 , THE EXPENSES INCURRED ON THE SHIFTING CHARGES WAS INCLUDED IN THE PURCHASE COST AND CONSEQUENTLY THE PROPORTIONATE AMOUNT WAS INCLUDED IN THE CLOSING STOCK. HE HAS FURTHER NOTED THAT FROM THE PRESENT YEAR, THE ASSESSEE HAS MAINTAINED SEPARATE ACCOUNT FOR SHIFTING CHARGES BY NOT INCLUDING IN THE COST OF PURCHASE OF THESE RAW MATERIALS AND CONSEQUENTLY THE PROPORTIONATE AMOUNT OF THE SHIFTING CHARGES HAS NOT BEEN INCLUDED IN THE CLOSING STOCK. THIS ADDITION WAS DELETED BY CIT(A) ON THE BASIS THAT THE CHAN GE IN METHOD OF VALUATION OF STOCK ADOPTED BY THE ASSESSEE IS PROVIDED IN AS - 2 AND THIS ADDITION DOES NOT COME UNDER THE PURVIEW OF SECTION 145A OF THE ACT. WE FIND THAT AS PER AS - 2, IT IS PRESCRIBED THAT THE COST OF INVENTORY SHOULD COMPRISE OF COST OF P URCHASE, COST OF CONVERSION AND OTHER COST INCURRED FOR BRINGING THE INVENTORY TO THEIR PRESENT LOCATION AND CONDITION. THIS IS NOT IN DISPUTE THAT AMOUNT OF SHIFTING CHARGES HAS BEEN INCURRED IN BRINGING THE CLOSING STOCK OF INVENTORY IN THE PRESENT LOCA TION AND CONDITION AND THEREFORE, IN OUR CONSIDERED OPINION, AS PER AS - 2, THIS SHIFTING CHARGES HAS TO BE INCLUDED IN CLOSING STOCK IRRESPECTIVE OF METHOD OF ACCOUNTING BEING FOLLOWED BY THE ASSESSEE REGARDING THE EXPENSES INCURRED ON SUCH SHIFTING UNLESS IT IS SHOWN BY THE ASSESSEE THAT ON THE MATERIAL LYING IN CLOSING STOCK, NO SHIFTING CHARGES WAS INCURRED MEANING THEREBY THAT THE MATERIAL LYING IN CLOSING STOCK IS SUCH WHICH IS YET TO BE SHIFTED . NO SUCH ARGUMENT WAS 8 ADVANCED AND NO SUCH FINDING IS GIVE N BY CIT (A) AND BEFORE US ALSO, NO SUCH EVIDENCE IS PRODUCED. MERELY BECAUSE SHIFTING CHARGES ARE NOT INCLUDED IN TO PURCHASES , IT CANNOT BE A BASIS TO EXCLUDE SUCH EXPENDITURE FROM THE VALUE OF THE CLOSING STOCK. HENCE, ON THIS ISSUE ALSO, WE REVERSE THE ORDER OF CIT(A) AND RESTORE THAT OF THE ASSESSING OFFICER. ACCORDINGLY, THIS GROUND IS ALSO ALLOWED. 17. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS ALLOWED. 18. NOW WE TAKE UP THE CROSS OBJECTION OF THE ASSESSEE I.E. C.O. NO.32/LKW/2010 FOR THE AS SESSMENT YEAR 2003 - 04. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: 1. BECAUSE THE LEARNED CIT (APPEALS) HAS ERRED IN LAW AND ON FACTS IN UPHOLDING THE COMPUTATION OF LONG TERM CAPITAL LOSS AS HAD BEEN REDUCED BY THE ASSESSING OFFICER FROM RS.28,45 ,624/ - TO RS.24,30,199/ - . 2. BECAUSE THE APPELLANT'S CLAIM FOR DETERMINATION OF LONG TERM CAPITAL LOSS AT RS.28,45,624/ - STOOD FULLY SUPPORTED BY THE RELEVANT MATERIAL AND INFORMATION AND THE AUTHORITIES BELOW COULD NOT HAVE VARIED THE SAME WITHOUT MAKING REFERENCE TO THE D.V.O. 3. BECAUSE ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ASSESSING OFFICER WAS OBLIGED UNDER THE LAW TO MAKE A REFERENCE TO THE DVO AND VIEW TO THE CONTRARY AS TAKEN BY HIM AND UPHELD BY THE LEARNED CIT(A), IS WHOLLY ERRONEOUS. 4. BECAUSE THE LEARNED CIT (APPEALS) HAS ERRED IN LAW AND ON FACTS IN UPHOLDING A PART OF THE AD HOC DISALLOWANCES (AS MADE BY THE ASSESSING OFFICER) AMOUNTING TO (A) RS.12,000:OUT OF VEHICLE RUNNING & MAINTENANCE EXPENSES; AND (B) RS.17,800: OUT OF TELEPHONE EXPENSES ON THE GROUND OF 'PERSONAL USER' BY THE DIRECTORS OF THE APPELLANT COMPANY. 5. BECAUSE THE APPELLANT STOOD FULLY REIMBURSED BY THE 'PERSONAL USER' OF 'TELEPHONE' AND 'VEHICLES' BY ITS DIRECTORS/ THROUGH THE RECOVERIES MADE FROM THEM AN D ANY 9 FURTHER DISALLOWANCE WAS WHOLLY UNCALLED FOR, ON THE FACTS OF THE CASE. 6. BECAUSE IN ANY CASE, THE APPELLANT BEING A BODY CORPORATE, NO PERSONAL USER AS SUCH WAS INVOLVED AND THE DISALLOWANCES AS SUSTAINED BY THE LEARNED CIT(APPEALS) ARE WHOLLY ERRO NEOUS. 19. REGARDING GROUND NO. 1,2 & 3 ARE RELATING TO THE SAME ISSUE AND IT WAS SUBMITTED BY LEARNED A.R. OF THE ASSESSEE THAT IT WAS SUBMITTED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER AS PER LETTER DATED 05/01/2006 THAT THE LAND IN QUESTION WAS AGRICULTURAL LAND AND THEREFORE, THE INCREASE IN PRICE WAS NOT AS PER MARKET PRICE AND THEREFORE, THE ASSESSEE HAS ACCOUNTED FOR THE SALE PRICE AS REALIZED AND HENCE, THE ASSESSING OFFICER IS NOT JUSTIFIED TO INVOKE THE PROVISIONS OF SECTION 50C OF THE AC T IN RESPECT OF SUCH SALE. HE PLACED RELIANCE ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS: (I) COMMISSIONER OF INCOME - TAX VS CHANDNI BHUCHAR [2010] 323 ITR 510 (P&H) (II) CIT, FARIDABAD VS. SMT. SHWETA BHAUCHAR [2010] 192 TAXMAN 0067 (P&H) (III) C IT , D ELHI - II VS . K HOOBSURAT R ESORTS (P.) L TD . [2012] 211 TAXMAN 0510 (DEL) 20. AS AGAINST THIS , LEARNED D.R. OF THE REVENUE SUPPORTED THE ORDER OF LEARNED CIT(A). 21. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND THE JUDG MENT S CITED BY LEARNED A.R. OF THE ASSESSEE. WE FIND THAT IT IS NOT IN DISPUTE THAT THE VALUE OF THE LAND SOLD AS PER THE PROVISIONS OF SECTION 50C IS THE SAME AS HAS BEEN ADOPTED BY THE ASSESSING OFFICER. NOW WE HAVE TO EXAMINE AND DECIDE AS TO WHETHER AS PER THE JUDGMENTS CITED BY LEARNED A.R. OF THE ASSESSEE, THE ASSESSING OFFICER CAN ADOPT THE STAMP DUTY PRICE FOR THE PURPOSE OF CAPITAL GAIN OR NOT. 21.1 THE FIRST JUDGMENT CITED BY LEARNED A.R. OF THE ASSESSEE IS THE JUDGMENT OF HON'BLE PUNJAB & HA RYANA HIGH COURT RENDERED IN THE CASE OF 10 COMMISSIONER OF INCOME - TAX VS CHANDNI BHUCHAR (SUPRA). THIS JUDGMENT IS NOT APPLICABLE IN THE FACTS OF THE PRESENT CASE BECAUSE THIS JUDGMENT IS IN RESPECT OF ADOPTING THE PURCHASE PRICE AS PER THE STAMP DUTY VALUE AND NOT THE SALE PRICE AS HAS BEEN DONE IN THE PRESENT CASE. HENCE, THIS JUDGMENT IS NOT APPLICABLE IN THE PRESENT CASE. 21.2 THE SECOND JUDGMENT CITED BY LEARNED A.R. OF THE ASSESSEE IS ALSO A JUDGMENT OF HON'BLE PUNJAB & HARYANA HIGH COURT RENDERED IN THE CASE OF CIT, FARIDABAD VS. SMT. SHWETA BHAUCHAR (SUPRA). THIS JUDGMENT IS ALSO N OT APPLICABLE BECAUSE IN THIS CASE ALSO , THE ADJUSTMENT WAS MADE BY THE ASSESSING OFFICER IN RESPECT OF PURCHASE PRICE PAID BY THE ASSESSEE AND THAT WAS NOT THE CASE OF ADJUSTING THE SALE PRICE DECLARED BY THE ASSESSEE AS IN THE PRESENT CASE. 21.3 THE TH IRD JUDGMENT CITED BY LEARNED A.R. OF THE ASSESSEE IS THE JUDGMENT OF HON'BLE DELHI HIGH COURT RENDERED IN THE CASE OF C IT , D ELHI - II VS . K HOOBSURAT R ESORTS (P.) L TD . (SUPRA). THIS JUDGMENT IS ALSO NOT APPLICABLE BECAUSE THE FACTS ARE DIFFERENT. IN THAT C ASE ALSO, THE ADDITION WAS MADE BY THE ASSESSING OFFICER IN RESPECT OF PURCHASE PRICE OF THE PROPERTY ON THE BASIS OF DIFFERENCE IN CIRCLE RATE AND THE PURCHASE PRICE. SECTION 50C OF THE ACT IS IN RESPECT OF ADDITION FOR THE PURPOSE OF COMPUTING CAPITAL G AIN IN RESPECT OF SALE OF PROPERTY BY ADOPTING THE SALE VALUE OF THE PROPERTY ON THE BASIS OF STAMP DUTY AND NO ADDITION CAN BE MADE ON THE BASIS OF SECTION 50C WHERE THE PURCHASE PRICE OF THE PROPERTY DECLARED BY THE ASSESSEE IS LESSER THEN THE STAMP DUTY . IN THIS CASE , THE ADDITION IS MADE BY COMPUTING CAPITAL GAIN IN RESPECT OF THE PROPERTY SOLD BY ADOPTING STAMP DUTY VALUE OF THE PROPERTY SOLD AND THEREFORE, THIS JUDGMENT IS ALSO NOT APPLICABLE. 21.4 FROM THE ABOVE DISCUSSION, IT COMES OUT THAT NONE OF THE JUDGMENTS CITED BY LEARNED A.R. OF THE ASSESSEE IS RENDERING ANY HELP TO THE ASSESSEE 11 AND SINCE THE ASSESSING OFFICER HAD ADOPTED THE SALE VALUE OF THE PROPERTY AS PER STAMP DUTY VALUATION AS PRESCRI BED IN SECTION 50C OF THE ACT, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF THE AUTHORITIES BELOW ON THIS ISSUE. ACCORDINGLY, GROUND NO. 1, 2 & 3 ARE REJECTED. 22. REGARDING GROUND NO. 4, 5 & 6, IT WAS SUBMITTED BY LEARNED A.R. OF THE ASSESSEE THAT SINCE THE ASSESSEE IS A LIMITED COMPANY AND THEREFORE, NO SUCH DISALLOWANCE IS JUSTIFIED AS PER THE JUDGMENT OF HON'BLE GUJARAT HIGH COURT RENDERED IN THE CASE OF SAYAJI IRON AND ENGG. CO. VS COMMISSIONER OF INCOME - TAX [2002] 253 ITR 749 (GUJ) . RESPE CTFULLY FOLLOWING THIS JUDGMENT, THIS DISALLOWANCE IS DELETED. ACCORDINGLY, GROUND NO. 4, 5 & 6 OF THE CROSS OBJECTION OF THE ASSESSEE ARE ALLOWED. 23. IN THE COMBINED RESULT, THE APPEAL OF THE REVENUE IS ALLOWED AND THE CROSS OBJECTION OF THE ASSESSEE I S PARTLY ALLOWED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DA TED: 1 3 /06/2014. *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. DR, ITAT, LUCKNOW ASSISTANT REGISTRAR 12