A. Vijay Kumar, Hyderabad V. ITO, Hyderabad

ITA 432/HYD/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 9683 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 30-03-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 22-03-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K E SUNIL BABU
• Assessee Lawyers: CHAITANYA KUMAR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH, HYDERABAD BEFORE SHRI G.C. GUPTA, VICE PRESIDENT AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER ITA NO.432/H/2010 ASSESSMENT YEAR 2005-06 SHRI A. VIJAY KUMAR, VS. HYDERABAD. (PAN AEYPA 9062 Q) THE ITO, WARD 4(1), HYDERABAD APPELLANT RESPONDENT APPELLANT BY : SHRI CHAITANYA KUMAR RESPONDENT BY : SHRI K.E. SUNIL BABU ORDER PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) V DATED 12.1.2010 AND P ERTAINS TO THE ASSESSMENT YEAR 2005-06. 2. THE MAIN GRIEVANCE OF THE ASSESSEE IN THIS APP EAL IS WITH REGARD TO DETERMINATION OF THE INCOME OF THE ASSESS EE AT RS.4,09,344/- AS AGAINST THE DECLARED INCOME AT RS.1,50,280/-. 3. BRIEF FACTS OF THE ISSUE ARE THAT THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BUSINESS OF SELLING FLATS AND REAL E STATE DEVELOPMENT. THE ASSESSEE FILED RETURN OF INCOME ADMITTING TOTAL INC OME OF RS.1,50,280/- ON 28.11.2005. THE ASSESSEE IN THE ASSESSMENT YEAR UNDER CONSIDERATION, JOINED HANDS WITH HIS FRIEND SHRI K. SOMANADRI, JOINTLY PURCHASED TWO VACANT SITES ADMEASURING 491.66 SQ. Y ARDS SITUATED AT 1- 3-176/35/22/1, BAKARAM, HYDERABAD ON 22-2-2002 AND 13.3.2003 RESPECTIVELY. THE ASSESSEE HAS GIVEN THESE TWO SIT ES TO DEVELOPER M/S ITA NO.432/H/2010 SHRI A. VIJAYA KUMAR, HYDERABAD 2 SVR ESTATES. AS PER THE AGREEMENT BETWEEN THE ASSE SSEE AND HIS FRIEND SHRI K. SOMANADRI AND THE DEVELOPERS, THE ASSESSEE HAS GOT 5 FLATS TO HIS SHARE AND HIS FRIEND SRI K. SOMANADRI HAS GOT 5 FLA TS TO HIS SHARE. OUT OF THE 5 FLATS FALLEN TO THE SHARE OF THE ASSESSEE, TH E ASSESSEE HAS SOLD 2 FLATS DURING THE PREVIOUS YEAR RELEVANT TO THE ASSE SSMENT YEAR 2004-05 AND 3 FLATS DURING THE PREVIOUS YEAR RELEVANT TO TH E ASSESSMENT YEAR 2005-06 WHICH IS UNDER CONSIDERATION AT THE RATE OF RS.6,05,000/- EACH FLAT. THE ASSESSEE HAS EXPLAINED HOW HE HAS ARRIVE D AT THE PROFIT OF RS.3,68,420/- FOR THE ASSESSMENT YEAR 2005-06 WHICH IS AS UNDER: SALE PROCEEDS OF 5 FLATS @ RS.6,05,00/- RS.30,25 ,000 LESS: TOTAL COST OF LAND FALLEN TO HIS SHARE RS. 24,10,970 (RS.48,21,940 2) ------------------- PROFIT RS.6,14,030 ---------------- 4. THE ABOVE TOTAL PROFIT HAS BEEN DIVIDED AS UND ER FOR THE TWO ASSESSMENT YEARS WHICH ARE AS FOLLOWS: PROFIT FOR THE ASSESSMENT YEAR 2004-05 (SALE OF 2 F LATS) RS.2,45,600/- PROFIT SHOWN FOR THE ASSESSMENT YEAR 2005-06 (SALE OF 3 FLATS) RS.3,68,430/- ---------------- RS.6,14,030 ---------------- 5. ACCORDING TO ASSESSING OFFICER, THE CLAIM OF E XPENDITURE AT RS.48,21,940/- IS NOT CORRECT AND THE ACTUAL EXPEND ITURE IS AT RS.39,28,385/- WHICH HAS BEEN ARRIVED AS FOLLOWS: ITA NO.432/H/2010 SHRI A. VIJAYA KUMAR, HYDERABAD 3 S.NO. DATE OF DOCUMENT EXTENT OF SITE PURCHASE CONSIDERATION (RS.) STAMP DUTY PAID (RS.) FEES PAID TO SUB REGISTRAR (RS.) TOTAL EXPENDITURE OF PURCHASE OF SITE (RS.) 1 13.3.2003 709.32 SQ.Y 20,000,000 52,500 15,475 2,067,975 2 20.2.2002 491.66 SQ.YARDS 1,750,000 100,000 10,410 1,860,410 TOTAL 1200.98 SQ.YDS. 3,750,000 152,500 25,885 3,928,385 6. FINALLY, THE ASSESSING OFFICER HAS COMPUTED TH E INCOME OF THE ASSESSEE AS FOLLOWS: ASSESSMENT YEAR SALE PROCEEDS OF FLATS (RS.) COST OF LAND FALLEN TO THE SHARE OF ASSESSEE IN RESPECT OF FLATS SOLD (RS.) PROFIT (RS.) 2004-05 1,210,00 785,676 424,324 2005-06 1,815,000 1,178,516 636,484 TOTAL 3,025,000 1,964,192 1,060,808 7. AGAINST THIS, THE ASSESSEE CARRIED THE APPEAL TO CIT(A) WHO HAS CONFIRMED THE ORDER OF THE ASSESSING OFFICER. AGAINST THIS, THE ASSESSEE IS IN APPEAL BEFORE US. 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE ASSESSING OFFICER HAS COM PUTED THE EXPENDITURE ON THE BASIS OF THE AGREEMENT OF SALE-CUM-IRREVOCAB LE GENERAL POWER OF ATTORNEY FOR PURCHASE OF TWO SITES AND SALE DEED. THE LOWER AUTHORITIES HAVE GIVEN AMPLE OPPORTUNITY TO THE ASSESSEE TO PRO DUCE EVIDENCE REGARDING INCURRING OF THE EXPENDITURE OF RS.48,21, 940/- . THE ASSESSEE WAS NOT ABLE TO LEAD ANY EVIDENCE REGARDING INCURRI NG OF THE ABOVE EXPENDITURE. WHEN THE ASSESSEE CLAIMED ANY EXPEND ITURE INCURRED FOR THE PURPOSE OF BUSINESS, IT IS THE DUTY OF THE ASSE SSEE TO PRODUCE AND PROVE THE VALID EVIDENCE. IN THE PRESENT CASE, THE ASSESSEE WAS NOT ABLE TO SUBSTANTIATE THE CLAIM TOWARDS THE EXPENDITURE. BEING SO, WE HAVE NO OTHER ALTERNATIVE THAN CONFIRM THE ORDER OF THE LOW ER AUTHORITIES ON THIS ITA NO.432/H/2010 SHRI A. VIJAYA KUMAR, HYDERABAD 4 ISSUE. ACCORDINGLY, WE HAVE NO HESITATION IN CONFI RMING THE ORDER OF THE LOWER AUTHORITIES AND DISMISS THE GROUND TAKEN BY T HE ASSESSEE. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE STAN DS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT O N: 31.3.2011 SD/- SD/- G.C. GUPTA CHANDRA POOJA RI VICE PRESIDENT ACCOUNTANT MEMBE R DATED THE 31 ST MARCH, 2011 COPY FORWARDED TO: 1. SHRI S. RAMA RAO, ADVOCATE, FLAT NO.102, SHRIYAS R ESIDENCY, ROAD NO.9, HIMAYAT NAGAR, HYDERABAD. 2. THE ITO, WARD 4(1), HYDERABAD 3. THE CIT(A) V, HYDERABAD 4. THE CIT, HYDERABAD 5. THE DR, ITAT, HYDERABAD NP