Dr.S.Sherifunisha, CHENNAI V. ITO, Tirunelveli

ITA 436/CHNY/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8184 (ITAT-CHENNAI)
• Duration Of Justice: 10 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2005-2006
• Appeal Filed On: 03-03-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DR B NISCHAL
• Assessee Lawyers: A S SRIRAMAN
• Keywords: Sale consideration of property below Jantri Value; Depreciation
• Section: 50C

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI . . . , . !'# ! , % !& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO. 436/MDS/2015 ( )( / ASSESSMENT YEAR : 2005-06 DR. S. SHERIFUNISHA, RAJA CLINIC, 37, AGASTHIAR KOIL STREET, PULIANGUDI POST, TIRUNELVELI DISTRICT 627 855. PAN : ALNPS 1263 K V. THE INCOME TAX OFFICER, WARD I(4), TIRUNELVELI. (+,/ APPELLANT) (-.+,/ RESPONDENT) +, / 0 / APPELLANT BY : SH. A.S. SRIRAMAN, ADVOCATE -.+, / 0 / RESPONDENT BY : DR. B. NISCHAL, JCIT 1 / 2% / DATE OF HEARING : 30.12.2015 3') / 2% / DATE OF PRONOUNCEMENT : 22.01.2016 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) II, MADU RAI, DATED 27.08.2014 AND PERTAINS TO ASSESSMENT YEAR 2005-06. 2 I.T.A. NO.436/MDS/15 2. THERE WAS A DELAY OF 128 DAYS IN FILING THIS APP EAL BY THE ASSESSEE. THE ASSESSEE HAS FILED A PETITION FOR CO NDONATION OF DELAY. WE HAVE HEARD THE LD.COUNSEL FOR THE ASSESS EE AND THE LD. D.R. WE FIND THAT THERE WAS SUFFICIENT CAUSE FOR N OT FILING THE APPEAL BEFORE THE STIPULATED TIME. THEREFORE, WE CONDONE THE DELAY AND ADMIT THE APPEAL. 3. SH. A.S. SRIRAMAN, THE LD.COUNSEL FOR THE ASSESS EE, SUBMITTED THAT THE FIRST ISSUE ARISES FOR CONSIDERA TION IS WITH REGARD TO COMPUTATION OF SHORT TERM CAPITAL GAIN AT ` 20,02,852/-. ACCORDING TO THE LD. COUNSEL, THE ASSESSING OFFICER FOUND THA T THE ASSESSEE SOLD 17077.5 SQ.FT. OF LAND AT KADAYANALLUR DURING THE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR UNDER CONSIDERATION. T HE ASSESSING OFFICER FOUND THAT THE SALE CONSIDERATION WAS ONLY ` 5,00,000/- AND THE STAMP DUTY AUTHORITIES VALUED THE TRANSACTION A T ` 23,00,000/-. SINCE THE LAND WAS TRANSFERRED WITHIN A PERIOD OF 3 6 MONTHS FROM THE DATE OF PURCHASE, THE ASSESSING OFFICER COMPUTE D THE SHORT TERM CAPITAL GAIN AT ` 20,02,852/-. ACCORDING TO THE LD. COUNSEL, THE ASSESSEE ENTERED INTO A JOINT VENTURE BY RAISING LO ANS AND TRIED TO SELL THE PROPERTY. HOWEVER, THIS WAS NOT APPRECIAT ED BY THE LOWER 3 I.T.A. NO.436/MDS/15 AUTHORITIES. THEREFORE, COMPUTATION OF CAPITAL GAI N BY APPLYING GUIDELINE VALUE IS NOT JUSTIFIED. 4. ON THE CONTRARY, DR. B. NISCHAL, THE LD. DEPARTM ENTAL REPRESENTATIVE, SUBMITTED THAT THE ASSESSEE HAS NOT RETURNED ANY CAPITAL GAIN IN THE RETURN OF INCOME FILED ON 12.08 .2005. THE ASSESSEE IN FACT ADMITTED THE PURCHASE OF 48.80 CEN TS OF LAND AT KADAYANALLUR VILLAGE. THE ASSESSING OFFICER COLLEC TED THE INFORMATION FROM THE SUB-REGISTRAR AND FOUND THAT T HE ASSESSEE IN FACT SOLD 17077.5 SQ.FT. OF LAND AT KADAYANALLUR DU RING THE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR 2005-06. THE SALE CONSIDERATION AS PER THE DOCUMENT IS ` 5,00,000/- AND THE VALUE ADOPTED BY THE REGISTRATION AUTHORITY FOR STAMP DUTY PURPOSE IS ` 23,00,000/-. THEREFORE, THE CAPITAL GAIN WAS COMPUTED BY TAKING THE VALUE ADOPTED BY THE REGISTRATION AUTHORITY UNDER SECTION 50C OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). SINCE TH E LAND WAS SOLD WITHIN A PERIOD OF 36 MONTHS FROM THE DATE OF PURCH ASE, THE ASSESSING OFFICER COMPUTED THE SHORT TERM CAPITAL G AIN AT ` 20,02,852/-, WHICH WAS RIGHTLY CONFIRMED BY THE CIT (APPEALS). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE FACT THAT THE 4 I.T.A. NO.436/MDS/15 ASSESSEE SOLD 17077.5 SQ.FT. OF LAND AT KADAYANALLU R DURING THE ASSESSMENT YEAR UNDER CONSIDERATION IS NOT DISPUTED . THE SALE CONSIDERATION DISCLOSED IN THE SALE DEED IS ONLY ` 5,00,000/-. HOWEVER, THE REGISTRATION AUTHORITY ADOPTED THE VAL UE FOR THE PURPOSE OF STAMP DUTY AT ` 23,00,000/-. THEREFORE, THE PROVISIONS OF SECTION 50C(1) OF THE ACT APPLIES AND THE ASSESSING OFFICER HAS RIGHTLY ADOPTED THE GUIDELINE VALUE AND WHICH WAS R IGHTLY CONFIRMED BY THE CIT(APPEALS). THEREFORE, THIS TRIBUNAL DO N OT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUT HORITY. ACCORDINGLY, THE ORDER OF THE CIT(APPEALS) IS CONFI RMED. 6. THE NEXT GROUND OF APPEAL IS WITH REGARD TO CAR DEPRECIATION, TELEPHONE CHARGES AND INTEREST PAID TO BANK WHILE C OMPUTING THE TOTAL INCOME. 7. SH. A.S. SRIRAMAN, THE LD. COUNSEL FOR THE ASSES SEE, SUBMITTED THAT THE ASSESSING OFFICER MADE AN ADDITI ON OF ` 6,086/-, BEING 1/5TH OF THE DEPRECIATION CLAIMED ON THE CAR AND ` 3,986/-, BEING 1/5TH OF TELEPHONE CHARGES. THE ASSESSING OF FICER HAS DISALLOWED ` 15,814/-, BEING THE INTEREST PAYMENT NOT RELATED TO BUSINESS. ACCORDING TO THE LD. COUNSEL, THE ASSESS ING OFFICER IS NOT JUSTIFIED IN MAKING DISALLOWANCE ON ESTIMATE BASIS WHEN THE CAR WAS 5 I.T.A. NO.436/MDS/15 USED ONLY FOR BUSINESS PURPOSE. THEREFORE, THE EST IMATION OF 1/5TH IS NOT JUSTIFIED. SIMILARLY, TELEPHONE CHARGES AND INTEREST PAYMENT IS ONLY FOR BUSINESS PURPOSES. 8. ON THE CONTRARY, DR. B. NISCHAL, THE LD. DEPARTM ENTAL REPRESENTATIVE, SUBMITTED THAT THE ASSESSEE CLAIMED THE VEHICLE MAINTENANCE EXPENSES AT ` 30,429/-. SINCE THE CAR WAS USED FOR PERSONAL PURPOSE ALSO, IN THE ABSENCE OF ANY MATERI AL AVAILABLE ON RECORD, THE ASSESSING OFFICER HAD TO NECESSARILY ES TIMATE THE EXPENDITURE. ACCORDINGLY, THE PERSONAL EXPENDITURE WAS ESTIMATED 1/5TH OF THE CLAIM AND DEPRECIATION WAS DISALLOWED. SIMILARLY, THE TELEPHONE CHARGES USED FOR PERSONAL PURPOSE IS ALSO TAKEN INTO CONSIDERATION. THE ASSESSEE AVAILED LOAN FROM ICIC I BANK AND UTILISED THE SAME FOR THE PURPOSE OF PURCHASING A P ROPERTY. THE LOAN WAS NOT USED FOR BUSINESS PURPOSE. THEREFORE, THE INTEREST PAID TO ICICI BANK CANNOT BE CLAIMED AS DEDUCTION W HILE COMPUTING THE PROFESSIONAL INCOME. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ASSESSEE CLAIMED CAR DEPRECIATION AND TELEPHONE CHARGES WHIL E COMPUTING TAXABLE INCOME. AS RIGHTLY SUBMITTED BY THE LD. D. R., USAGE OF CAR 6 I.T.A. NO.436/MDS/15 FOR PERSONAL PURPOSE AND THE USAGE OF TELEPHONE FOR PERSONAL PURPOSE CANNOT BE TOTALLY RULED OUT. IN THE ABSENC E OF ANY MATERIAL AVAILABLE ON RECORD, THIS TRIBUNAL IS OF THE CONSID ERED OPINION THAT THE ASSESSING OFFICER HAS REASONABLY ESTIMATED 1/5T H OF THE TOTAL CLAIM. 10. COMING TO THE PAYMENT OF INTEREST TO ICICI BANK LOAN, IT IS NOT IN DISPUTE THAT THE LOAN WAS USED FOR PURCHASIN G A PROPERTY. SINCE THE LOAN WAS NOT USED FOR PROFESSION, THIS TR IBUNAL IS OF THE CONSIDERED OPINION THAT THE INTEREST PAID ON SUCH L OAN CANNOT BE CLAIMED AS DEDUCTION WHILE COMPUTING PROFESSIONAL I NCOME. 11. IN VIEW OF THE ABOVE, THIS TRIBUNAL HAS NO REAS ON TO INTERFERE WITH THE ORDER OF THE CIT(APPEALS) AND ACCORDINGLY, THE SAME IS CONFIRMED. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED. ORDER PRONOUNCED ON 22 ND JANUARY, 2016 AT CHENNAI. SD/- SD/- (. !'# ! ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER 7 I.T.A. NO.436/MDS/15 /CHENNAI, 5 /DATED, THE 22 ND JANUARY, 2016. KRI. / -267 87)2 /COPY TO: 1. +, /APPELLANT 2. -.+, /RESPONDENT 3. 1 92 () /CIT(A)-II, MADURAI 4. 1 92 /CIT-II, MADURAI 5. 7: -2 /DR 6. ( ; /GF.