THE ITO, 5(1), Indore V. SMT. SUSHMA SHUKLA (JAIN), Indore

ITA 437/IND/2015

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 5932 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 08-06-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K G GOYAL
• Assessee Lawyers: V S BANTHIA
• Keywords: Sale consideration of property below Jantri Value; Value adopted by valuation officer; Opportunity of being heard
• Section: 50C; 54F; 54

Judgement Text

ITA NOS.345/IND/15 & 437/IND/2015 SMT. SUSHMA SHUKLA (JAIN) 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE .., ..!', #$ # !% BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI O.P. MEENA, ACCOUNTANT MEMBER ..&./ I.T.A. NO.345/IND/2015 ' ( )*( / ASSESSMENT YEAR: 2008-09 SMT. SUSHMA SHUKLA (JAIN) INDORE PAN AEAPS 4933G :: + / APPELLANT VS ITO 3(2) INDORE :: ,-+ / RESPONDENT ..&./ I.T.A. NO.437/IND/2015 ' ( )*( / ASSESSMENT YEAR: 2008-09 ITO 3(2) INDORE :: + / APPELLANT VS SMT. SUSHMA SHUKLA (JAIN) INDORE :: ,-+ / RESPONDENT ' (. / # / ASSESSEE BY SHRI V.S. BANTHIA 0) / # / REVENUE BY SHRI K.G. GOYAL 1 ')2 / $ DATE OF HEARING 10.1.2017 3456* / $ DATE OF PRONOUNCEMENT 1 9 .1.2017 ITA NOS.345/IND/15 & 437/IND/2015 SMT. SUSHMA SHUKLA (JAIN) 2 #7 / O R D E R PER SHRI D.T. GARASIA, JM ITA NO. 345/IND/2015 IS FILED BY THE ASSESSEE WHERE AS ITA NO. 437/IND/2015 IS FILED BY THE REVENUE. SINCE IDENTICAL ISSUES ARE INVOLVED, THESE APPEALS ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE O F CONVENIENCE. 2. THE SHORT FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PARTNER IN THE FIRM M/S HITECH INFOSOFT, AHMEDABAD, AND ALSO DERIVES INCOME FROM HER INDIVIDUAL BUSINESS. DUR ING THE YEAR UNDER CONSIDERATION THE ASSESSEE HAD SOLD A HO USE PROPERTY IN AHMEDABAD SITUATED AT 76, NEHRU PARK, VASTRAPUR. THE PROPERTY WAS PURCHASED IN THE YEAR 1991 JOINTLY BY HER AND HER HUSBAND. AFTER PURCHASE OF THE PROPERTY FOR RS. 3,30,000/-, RS. 9 LACS WERE INVESTE D IN THE YEAR 1992 TO MAKE THE PREMISES LIABLE AND HABITABLE. THE VALUE OF THE HOUSE AS PER REGISTRAR OF STAMP DUTY WAS ITA NOS.345/IND/15 & 437/IND/2015 SMT. SUSHMA SHUKLA (JAIN) 3 TAKEN AT RS. 14 LACS APPROX. AND THE STAMP DUTY OF RS. 90,002/-. THE ASSESSEE IS MAINTAINING HER OWN CASH BOO K, BALANCE SHEET AND STATEMENT OF AFFAIRS ON DAY TO DAY BASIS FROM THE YEAR 2002-03. THE STATEMENT OF AFFAIRS OF THE ASSESSEE FOR DIFFERENT YEARS INCLUDING 1991-92 TO 200 7-08 WERE FILED BEFORE THE ASSESSING OFFICER ON YEAR TO Y EAR BASIS. THE CO-OWNER OF THE PROPERTY SHRI VIKRAM KUMAR JAIN ALI AS VIKRAM SINGH BANTHIA DISAPPEARED IN THE YEAR 1994 LEAVING BEHIND A WILL MAKING SMT. SUHAG KUNVAR BANTHIA HIS MOTHER AS HIS EXECUTRIX. OF THE ESTATE LEFT BY H IM AND AS PER HIS WILL, THE ESTATE WAS TO REMAIN IN EXISTENCE TILL HIS SON DHRUV BECOMES MAJOR. THE ASSESSEE SOLD HER PORTI ON OF THE HOUSE OWNED BY HER FOR RS.52.5 LACS AND ALSO SOLD THE SECOND PART OF THE BUNGALOW OWNED BY HER HUSBAND SHRI VIKRAM SINGH BANTHIA FOR ANOTHER RS.52.5 LACS. THE CIT HASCONSIDERED THE AMOUNT RECEIVED BY HER AND, THEREFOR E, THE CAPITAL GAIN WAS TAXED IN THE HANDS OF THE ASSESSEE. ITA NOS.345/IND/15 & 437/IND/2015 SMT. SUSHMA SHUKLA (JAIN) 4 SECONDLY, THE ASSESSEE HAS PURCHASED NEW PROPERTIES F ROM THE SALE PROCEEDS RECEIVED BY HER IN INDORE AT 458, SIRPUR, INDORE, FROM THREE BROTHERS BY THREE SEPARATE REGISTR IES. IT WAS PURCHASE OF ONE PARENTAL HOUSE OF RATHORE FAMILY WHERE ALL THE THREE BROTHERS WERE RESIDING WITH THEI R FAMILY AND THE ASSESSEE SPENT RS. 2.25 LACS ON NEW CONSTRUCT ION AND PART OF THE HOUSE WAS GIVEN ON RENT AND THE RENTAL INCOME IS SHOWN IN THE ASSESSMENT YEAR 2011-12 ONWARDS . THE ASSESSING OFFICER AND THE LEARNED CIT(A) DID NOT GRANT THE CLAIM U/S 54 BUT CONSIDERED THE DEDUCTION OF CLAI M U/S 54F OF THE ACT. MOREOVER, THE ASSESSEE WAS HAVING HUG E CASH BALANCE IN HAND ON THE OPENING OF THE YEAR AS EVIDEN T FROM THE BALANCE SHEET OF THE EARLIER ASSESSMENT YEAR. IN ADDITION, SHE HAD RECEIVED THE AMOUNT FROM THE FIRM WHEREIN SHE IS A PARTNER. SHE HAS ALSO WITHDRAWN AMOUNTS FROM ONE BANK ACCOUNT AND DEPOSITED IN ANOTHER BANK ACCOUNT AS THE CHEQUE WAS ISSUED FROM THE OTHER BANK. ITA NOS.345/IND/15 & 437/IND/2015 SMT. SUSHMA SHUKLA (JAIN) 5 SHE HAD WITHDRAWN AMOUNTS FROM BANK AND REDEPOSITED IN SOME OTHER BANK EITHER ON THE SAME DAY OR IF THE AMOUN T WAS LYING IN THE LOCKER OR GIVEN ON SOME LOAN TO HER EMPLOYEES OR FRIEND. THE LEARNED CIT(A) HAS NOT DECID ED THIS ISSUE. CONSIDERING ALL THESE FACTS, THE ASSESSIN G OFFICER HAS MADE THE ASSESSMENT ON THE GROUND THAT AS PER AIR INFORMATION THE ASSESSEE HAS MADE CASH DEPOSITS OF RS.19,99,500/- IN AXIS BANK ACCOUNT DURING THE FINANCI AL YEAR 2007-08. THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF CASH DEPOSIT. AFTER CONSIDERING THE REPLY OF THE ASSESSEE, THE ASSESSING OFFICER WAS OF THE VIEW THAT T HE ASSESSEE COULD NOT EXPLAIN REGARDING THE AMOUNT OF RS.20,35,400/-. THEREFORE, IT WAS ADDED TO THE INCOM E OF THE ASSESSEE. IN RESPECT OF 54F CLAIM THE ASSESSING O FFICER OBSERVED THAT THE ASSESSEE HAS PURCHASED LAND AT SIRPUR WITHIN THE MUNICIPAL LIMIT OF INDORE AND THE LAND COME S UNDER RESIDENTIAL COMMERCIAL PROPERTY. THEREFORE, THAT LAND ITA NOS.345/IND/15 & 437/IND/2015 SMT. SUSHMA SHUKLA (JAIN) 6 WAS A PLOT ONLY AND IT WAS HANDED BY RESIDENTIAL COLONY. THEREFORE, THE ASSESSING OFFICER WAS OF THE VIEW THAT THE ASSESSEE HAS NOT PURCHASED A NEW RESIDENTIAL HOUSE BUT THE ASSESSEE HAS PURCHASED THE LAND. THEREFORE, EXEMPTI ON U/S 54F WAS DISALLOWED AND THE COST OF IMPROVEMENT WAS ALSO DISALLOWED. THEREFORE, THE ASSESSEE WAS BEFORE THE LEARNED CIT(A). THE LEARNED CIT(A) ALLOWED GROUND NO S. 1 AND 13 AND REST OF THE GROUNDS WERE DISMISSED AS UNDER :- 11. GR. NO. 7 OF APPEAL IS AGAINST ADDITION OF CAS H CREDITS OF RS.40 LAKH SHOWN AS RECEIVED BY APPELLAN T FROM ESTATE OF VIKRAM KUMAR JAIN. ACCORDING TO APPELLANT THIS AMOUNT OF RS.40 LAKH WAS A PART OF CAPITAL GAIN RECEIPT OF RS. 52.50 LAKH AS 50% PART OF ESTATE OF VIKRAM KUMAR JAIN, WHICH WAS RECEIVED BY APPELLANT. IT IS SEEN IN REGISTERED SALE DEED THAT ENTIRE AMOUNT ON SALE OF RS. 1.05 CRORE WAS RECEIVED BY APPELLANT OUT OF WHICH THE ESTATE OF SH. VIKRAM KUM AR ITA NOS.345/IND/15 & 437/IND/2015 SMT. SUSHMA SHUKLA (JAIN) 7 JAINW AS SHOWN AS CREDITOR FOR RS.40 LAKH IN THIS Y EAR & RS.12.50 LAKH IN EARLIER YEAR THROUGH JOURNAL ENT RIES ONLY. SINCE ENTIRE AMOUNT OF CAPITAL GAINS OF RS. 1 .05 CRORE IS NOW BEING TAXED IN HANDS OF APPELLANT, HEN CE SEPARATE ADDITION OF CASH CREDIT OF RS.40 LAKH WHIC H IS PART OF SAME AMOUNT OF RS.1.05 CRORE THIS ADDITION OF CASH CREDIT OFRS. 40 LAKH IN NAME OF ESTATE OF SH. VIKRAM KUMAR BANTHIA (JAIN) IS HEREBY DELETED. GROU ND NO. 7 OF APPEAL IS ALLOWED. XXX XXX 13. GR. NO.9 OF APPEAL IS AGAINST CHARGING OF TAX O N CAPITAL GAIN AT 30% RATE INSTEAD OF 20%. SINCE A.O. HAS HIMSELF ACCEPTED SUCH CAPITAL GAIN, AS LONG TERM CA PITAL GAIN, HENCE, THERE IS NO LOCUS STANDI TO CHARGE IT AS 30% RATE. A.O. IS DIRECTED TO CHARGE IT AT RATES APPLIC ABLE TO LTCG. THIS GROUND OF APPEAL IS ALLOWED. ITA NOS.345/IND/15 & 437/IND/2015 SMT. SUSHMA SHUKLA (JAIN) 8 REST OF THE GROUNDS OF APPEAL WERE DISMISSED BY THE LEARNED CIT(A), THEREFORE, THE ASSESSEE IS IN APPEAL BE FORE THE TRIBUNAL AGAINST REST OF THE GROUNDS AND THE REVENU E IS IN APPEAL AGAINST THE RELIEF GRANTED BY THE LEARNED CIT (A). 3. DURING THE COURSE OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE, WHO HAPPENS TO BE EX-COMMISSIONER OF INCOME TAX, HAS ARGUED THE MATTER PERSONALLY. DURING TH E COURSE OF HEARING, THE ASSESSEE HAS TAKEN TH GROUND TH AT NO SUFFICIENT OPPORTUNITY OF HEARING WAS GRANTED TO TH E ASSESSEE AND SECONDLY THE NOTICE U/S 142 WAS NOT SERVE D ON THE ASSESSEE. THIS GROUND WAS TAKEN BEFORE US. DURI NG THE COURSE OF HEARING, WEHAVE VERIFIED THE RECORD AND THE ASSESSEES COUNSEL HAS AGREED THAT THE NOTICE U/S 142 W AS ISSUED AND THAT NOTICE WAS PROPERLY SERVED, THEREFORE, HE HAS AGREED BEFORE US THAT HE IS NOT PRESSING GROUND NO S. 1 TO 4 REGARDING NOTICE U/S 142(2) OF THE ACT. THEREFO RE, THESE GROUNDS WERE DISMISSED DURING THE COURSE OF HEARING. ITA NOS.345/IND/15 & 437/IND/2015 SMT. SUSHMA SHUKLA (JAIN) 9 4. DURING THE COURSE OF HEARING REGARDING THE REMAININ G GROUNDS IT WAS ARGUED BY THE LEARNED COUNSEL FOR THE ASSESSEE MAINLY THAT THE ASSESSEE AND HER HUSBAND SOLD THE PROPERTY AT NEHRU PARK, AHMEDABAD, AND THE ASSESSEE HAS SHOWN THE CAPITAL GAIN OF RS. 52,50,000/- ON THE SA LE OF THE PROPERTY OF THE ASSESSEE AND CLAIMED THE INDEXAT ION COST OF RS.9,69,095/- AND HE HAS ALSO CLAIMED COST OF IMPROVEMENT OF RS. 22,23,676/-. THE ASSESSEE HAS ALSO CLAIMED DEDUCTION U/S 54F OF THE ACT FOR PURCHASE OF PROPERTY AT SIRPUR, INDORE. THE LEARNED COUNSEL FOR T HE ASSESSEE FAIRLY CONCEDED BEFORE US THAT THE ASSESSEE HAS PURCHASED NEW PROPERTY WHICH IS A LAND SURROUNDED BY MANY RESIDENTIAL HOUSES AND IT WAS ALSO DECIDED BY THE COURT IN THAT PROPERTY THAT IT WAS RESIDENTIAL PROPERTY . THEREFORE, 54F DEDUCTION MUST BE ALLOWED BUT THE LEAR NED COUNSEL FOR THE ASSESSEE FAIRLY ADMITTED THAT THE DVO REPORT WAS NOT OBTAINED BY THE REVENUE AUTHORITIES BEF ORE ITA NOS.345/IND/15 & 437/IND/2015 SMT. SUSHMA SHUKLA (JAIN) 10 REJECTING THE CLAIM U/S 54F OF THE ACT. THE ASSESSIN G OFFICER DID NOT CALL FOR THE DVO REPORT BEFORE REJEC TING THE CLAIM OF THE ASSESSEE U/S 54F OF THE ACT. 5. ON THE OTHER HAND, THE LEARNED DR RELIED ON THE OR DERS OF THE AUTHORITIES BELOW. 6. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE SI DES. WE FIND THAT AN IDENTICAL ISSUE HAD COME UP BEFORE THE TRIBUNAL IN THE CASE OF SHRICHAND MAKHIJA S. ITO; ITA N O. 426/IND/2016 AND THE TRIBUNAL VIDE ITS ORDER DATED 8.6.2016 HAS DECIDED THE ISSUE AS UNDER :- THIS IS AN APPEAL PREFERRED BY THE ASSESSEE AGAINST THE ORDER DATED 19.2.2016 OF THE LEARNED CIT(A)-22, NEW DELHI, HAVING CONCURRENT JURISDICTIO N OF CIT(A), INDORE. 2. THE ONLY GROUND TAKEN BY THE ASSESSEE IN THIS APPEAL IS THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN MAKING ADDITION OF RS.3,89,750/- BY INVOKING PROVISIONS OF SECTION 50C OF THE ACT. 3. BRIEF FACTS OF THE CASE ARE THAT DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE SOLD AGRICULTURAL LAND SITUATED AT VILLAGE TEJPUR GADBADI, TEHSIL INDORE WHICH WAS IN THE JOINT NAME OF SHRI PANKAJ ITA NOS.345/IND/15 & 437/IND/2015 SMT. SUSHMA SHUKLA (JAIN) 11 MAKHIJA FOR RS.10,79,500/- (MARKET VALUE) ON 6.8.2005 BUT IN THE RETURN OF INCOME THE ASSESSEE HAS TAKEN SALE CONSIDERATION OF RS. 1,50,000/- (1/2 SHARE) FOR THE CALCULATION OF LONG TERM CAPITAL GAI N. AFTER INDEXATION, THE ASSESSEE HAS SHOWN RS. 30,475/- AS INCOME FROM LONG TERM CAPITAL GAIN IN T HE COMPUTATION OF INCOME. THE ASSESSING OFFICER WHILE CONSIDERING THE CASE OF THE ASSESSEE CALCULATED THE LONG TERM CAPITAL GAIN ON AGRICULTURAL LAND AT RS.4,20,225/- WHEREAS IN THE COMPUTATION FILED, THE ASSESSEE HAS SHOWN THE SAME AT RS.30,475/-. THE ASSESSING OFFICER, THEREFORE, ADDED RS.3,89,750/- T O THE TOTAL INCOME OF THE ASSESSEE. 4. BEING AGGRIEVED WITH THE ADDITION MADE BY THE ASSESSING OFFICER, THE ASSESSEE PREFERRED APPEAL BEFORE THE LEARNED CIT(A). THE LEARNED CIT(A) CONSIDERING THE FACTS OF THE CASE AND THE SUBMISSIONS OF THE ASSESSEE, CONFIRMED THE ACTION O F THE ASSESSING OFFICER. NOW, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. BEFORE ME, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN MAKING THE ADDITION WITHOUT ANY BASIS. HE SUBMITTED THAT THE ASSESSING OFFICER, WHO IS NOT A TECHNICAL EXPERT, INSTEAD OF ESTIMATING THE LONG TERM CAPITAL GAIN HIMSELF, SHOULD HAVE REFERRED THE MATTER TO TH E DVO FOR VALUATION OF AGRICULTURAL LAND. THE LEARNED COUNSEL FOR THE ASSESSEE ALSO RELIED UPON THE DECISION OF THE JODHPUR BENCH OF THE TRIBUNAL IN TH E CASE OF MEGHRAJ BAID VS. ITO; (2008) 114 TTJ (D) 84 1. ITA NOS.345/IND/15 & 437/IND/2015 SMT. SUSHMA SHUKLA (JAIN) 12 6. ON THE OTHER HAND, THE LEARNED DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE LONG TERM CAPITAL GAIN AS CALCULATED IN TH E CASE BY THEM IS FULLY JUSTIFIED. 7. I HAVE HEARD BOTH THE SIDES. AFTER CONSIDERING THE ARGUMENTS OF BOTH THE SIDES, I AM OF THE VIEW THAT THE ASSESSING OFFICER WAS NOT AN EXPERT IN CALCULATING THE VALUE OF THE AGRICULTURAL LAND SOLD AND AS SUCH IT WAS INCUMBENT UPON HIM TO REFER THE MATTER TO THE DVO FOR VALUATION OF THE SAME. A SIMILAR ISSUE WAS DECIDED BY JODHPUR BENCH OF THE TRIBUNAL IN THE CASE OF MEGHRAJ BAID VS. ITO; (2008 ) 114 TTJ (D) 841 WHEREIN THE ASSESSING OFFICER WAS DIRECTED TO REFER THE ISSUE TO THE DVO. CONSIDERING THIS ASPECT OF THE MATTER, I DIRECT THE ASSESSING OFFICER TO REFER THE MATTER TO THE DVO FOR CALCULAT ION OF THE SALE OF AGRICULTURAL LAND AND ACCORDINGLY COMPUTE THE LONG TERM CAPITAL GAIN THEREON. I ORDER ACCORDINGLY. RESPECTFULLY FOLLOWING THE ABOVE DECISION OF THE TRI BUNAL, WE DIRECT THE ASSESSING OFFICER TO REFER THE MATTER TO THE DVO BEFORE DISALLOWING THE CLAIM U/S 54F OF THE ACT AN D AFTER OBTAINING HIS REPORT ON THE ISSUE, DECIDE THE S AME ACCORDING AFTER AFFORDING THE ASSESSEE REASONABLE OPPORTUNITY OF BEING HEARD. ITA NOS.345/IND/15 & 437/IND/2015 SMT. SUSHMA SHUKLA (JAIN) 13 7. IN RESPECT OF THE DEPARTMENTAL APPEAL AND THE ASSESSEES APPEAL AGAINST CASH CREDIT, WE RELY UPON THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF TOLARAM HASSOMAL; 298 ITR 22 WHEREIN IT IS HELD TH AT WHEN THE ASSESSEES CLAIM IS NOT EXAMINED AND IF THE EXAMINED AT THE END OF THE ASSESSING OFFICER THEN THE MATTER IS TO BE RESTORED TO THE ASSESSING OFFICER AND THE DECISION OF THE LEARNED CIT(A) IS TO BE REVERSED. TH EREFORE, FOLLOWING THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT, WE RESTORE THE WHOLE OF THE ISSUES TO THE FI LE OF THE ASSESSING OFFICER FOR DE NOVO ASSESSMENT. THE ASSES SING OFFICER IS DIRECTED TO DECIDE THE MATTER AFRESH AFTER CONSIDERING ALL THE MATERIAL AVAILABLE ON RECORD. THE ASSESSEE IS NOT AT LIBERTY TO FILE ANY ADDITIONAL DOCUME NTARY EVIDENCE BEFORE THE ASSESSING OFFICER SO THAT THE MAT TER MAY NOT BECOME MORE COMPLICATED. THEREFORE, IN THE INTEREST OF JUSTICE AND FAIR PLAY, THE ASSESSING OFFI CER IS ITA NOS.345/IND/15 & 437/IND/2015 SMT. SUSHMA SHUKLA (JAIN) 14 DIRECTED TO OBTAIN THE REPORT OF THE DVO AND DECIDE T HE MATTER AFRESH AS PER THE RECORD AVAILABLE ON RECORD. 8. IN THE RESULT, THE ASSESSEES APPEAL AND THE DEPARTMENTAL APPEAL ARE ALLOWED FOR STATISTICAL PURPOSES. THE ORDER HAS BEEN PRONOUNCED IN OPEN COURT ON 19 TH JANUARY, 2017. SD/- SD/- (..) ( . .) (O.P.MEENA) (D.T.GARASIA) ACCOUNTANT MEMBER JU DICIAL MEMBER / DATED : 19 TH JANUARY, 2017. DN/