DARSHAN R MEHTA, MUMBAI V. ITO 20(1)(4), MUMBAI

ITA 4465/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0238 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-07-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 15-02-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 28-07-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B SATYANARAYANA RAJU
• Assessee Lawyers: N M PORWAL
• Keywords: Sale consideration of property below Jantri Value; Opportunity of being heard; Additional evidence; Cost of acquisition
• Section: 143(3); 50C; 68

Judgement Text

, SMC , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC, MUMBAI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NO.4465/MUM/2015 : ASST.YEAR 2011-2012 SHRI DARSHAN R.MEHTA 12, MURLI MAHAL, II FLOOR 420, BHAVDAJI CROSS ROAD KING CIRCLE, MATUNGA MUMBAI 400 019. PAN : AADPM3310J. / VS. THE INCOME TAX OFFICER WARD 17(3)(1) MUMBAI. ( / APPELLANT) ( / RESPONDENT) /APPELLANT BY : SHRI N.M.PORWAL /RESPONDENT BY : SHRI B.SATYANARAYANA RAJU (SR.DR) / DATE OF HEARING : 16.05.2017 / DATE OF PRONOUNCEMENT : 04.07.2017 / O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A) DATED 13.04.2015 AND PERTAINS TO ASSESSMENT YEAR 2011-2012. 2. THE GROUNDS OF APPEAL READ AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING ADDITION ON ACCOUNT OF CAPITAL GAIN OF RS. 2116931/- ON SALE OF PROPERTY AT 'ANMOL PRIDE' BY INVOKING PROVISIONS OF SECTION 50C OF THE ACT AS AGAINST LOSS RS. 61033/- AS CLAIMED BY THE APPELLANT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN ARRIVING AT THE CONCLUSION THAT PROVISION OF SECTION 50C OF THE ACT IS APPLICABLE TO PROPERTY AT 'ANMOL PRIDE' SOLD DURING THE YEAR. ITA NO.4465/MUM/2015. SHRI DARSHAN R.MEHTA. 2 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING ACTION OF THE ASSESSING OFFICER OF NOT REFERRING MATTER FOR VALUATION TO VALUATION OFFICER BEFORE COMPUTING CAPITAL GAIN BY INVOKING PROVISIONS OF SECTION 50C OF THE ACT. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN REJECTING CLAIM OF COST OF ACQUISITION OF PROPERTY AT DEV DARSHAN IN RESPECTING OF FOLLOWING PAYMENTS. SUB STATION CHARGES 100000/- CAR PARK PAYMENTS 100000/- SOCIETY CHARGES 15000/- 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING ADDITION OF RS. 400000/- MADE BY THE ASSESSING OFFICER UNDER SECTION 68 OF THE ACT 6. THE ORDER MADE UNDER SECTION 143(3) OF THE ACT BY THE LEARNED ASSESSING OFFICER AND CONFIRMED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS ILLEGAL, BAD-IN-LAW, ULTRA VIRUS AND WITHOUT ALLOWING REASONABLE OPPORTUNITY OF THE HEARING, AND WITHOUT APPRECIATING FACTS, SUBMISSION AND EVIDENCES IN THEIR PROPER PERSPECTIVE AND IS LIABLE TO BE QUASHED / ANNULLED. 7. THE APPELLANT CRAVE LEAVE TO ADD, AMEND, ALTER AND / OR VARY ANY OF THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING. 2. AT THE OUTSET, LEARNED COUNSEL OF THE ASSESSEE SUBMITTED THAT HE SHALL NOT BE PRESSING GROUND NOS. 2 AND 6 ABOVE. HENCE, THESE GROUNDS ARE DISMISSED AS NOT PRESSED. ITA NO.4465/MUM/2015. SHRI DARSHAN R.MEHTA. 3 3. APROPOS ISSUE OF ADDITION U/S 50C: 3.1 THE BRIEF FACTS OF THE CASE ARE AS UNDER: THE AO NOTED THAT THE ASSESSEE HAD SOLD ANMOL PRIDE PROPERTY ON 14.01.2011 FOR TOTAL CONSIDERATION OF RS.1,07,00,000/-, AT WHICH THE ASSESSEE HAD WORKED OUT CAPITAL LOSS OF RS.61,033/-. ON VERIFICATION, IT WAS OBSERVED THAT THE MARKET VALUE OF SAID PROPERTY AS PER REGISTERED AGREEMENT WAS AT RS.1,26,30,681/-, AND THE PURCHASE VALUE WAS AT RS.L,00,00,000/- (PURCHASED ON 25.12.2010). ON BEING ASKED AS TO WHY THE PROVISIONS OF SEC.SOC SHOULD NOT BE APPLIED, THE ASSESSEE SUBMITTED THAT THE TRANSACTION OF SALE WAS MADE 20 DAYS AFTER THE DATE OF PURCHASE, AND WITHIN THIS PERIOD, THE STAMP DUTY VALUATION HAD INCREASED FROM RS.93,56,500/- TO RS.1,26,30,681/-, I.E. AN INCREASE OF 35%. ACCORDING TO ASSESSEE, THIS INCREASE IN VALUATION TO SIGNIFICANT EXTENT WITHIN 3 WEEKS WAS UNJUST AND IMPROPER; HOWEVER, THE PURCHASER OF PROPERTY PAID STAMP DUTY AND. DID NOT CONTEST THE VALUATION AND STAMP DUTY PAYABLE. THE ASSESSEE SUBMITTED THAT THE APPLYING OF PROVISIONS OF SEC. 50C WOULD BE UNJUST AND PUT A CONSIDERABLE HARDSHIP TO HIM AND HENCE REQUESTED NOT TO APPLY THE SAME. THE REPLY OF ASSESSEE WAS CONSIDERED BUT NOT FOUND TENABLE IN VIEW OF THE PROVISIONS OF SEC. 50C OF THE ACT. HENCE, AN ADDITION OF RS.26,30,681/-WAS MADE UNDER SHORT TERM CAPITAL GAIN, DISALLOWING THE CLAIM OF LOSS OF RS.61,033 /-. 4. BEFORE THE LEARNED CIT(A), ASSESSEE MADE FOLLOWING SUBMISSIONS:- 3.2 DURING APPELLATE PROCEEDINGS, THE APPELLANT SUBMITTED THE SEGREGATION OF COST AS UNDER: ITA NO.4465/MUM/2015. SHRI DARSHAN R.MEHTA. 4 PAID TO VIJAY ASSOCIATES (AGREEMENT VALUE) RS.1,00,00,000/- REGISTRATION RS. 30,000/- STAMP DUTY RS. 4,83,750/- SERVICE TAX RS. 2,52,783 /- -------------------------- PURCHASE COST RS.1,07,66,533/- THE APPELLANT FURTHER STATED THAT THE PURCHASE AGREEMENT WAS REGISTERED ON 11.01.2011 AND SALE AGREEMENT WAS REGISTERED ON '14.01.2011, I.E. JUST 3'DAYS AFTER. THE STAMP DUTY AUTHORITY HAD TAKEN THE MARKET VALUE OF PROPERTY AT THE TIME OF PURCHASE AT RS.93,56,500/-, WHEREAS AT THE TIME OF SALE, THE MARKET' VALUE WAS TAKEN AT RS.1,26,30,681/-. THE APPELLANT STATED THAT HE DOES NOT HAVE ANY SAY OVER THE MARKET VALUE CALCULATION OF STAMP DUTY AUTHORITY AND HE HAD SOLD THE PROPERTY IN DISTRESS SINCE HE WAS NOT SATISFIED WITH QUALITY OF CONSTRUCTION. HENCE, TAKING RS.1,26,30,381/- AS SALE VALUE IS BAD IN LAW. FURTHER, THE AO HAD TAKEN THE PURCHASE COST AT RS. 1,00,00,000/-(AGREEMENT VALUE) EVEN THOUGH COST OF ACQUISITION OF PROPERTY WAS RS.1,07,66,533/- (I.E. AGREEMENT VALUE PLUS STAMP DUTY, REGISTRATION CHARGES ETC.). 5. HOWEVER, THE LEARNED CIT(A) PROCEEDED TO CONFIRM THE ADDITION. HE HELD AS UNDER:- I HAVE PERUSED THE FACTS OF THE CASE AND APPELLANT'S SUBMISSIONS CAREFULLY. AS REGARDS THE APPLICABILITY OF SEC. 50C, THE APPELLANT'S CONTENTION CANNOT BE ACCEPTED IN VIEW OF THE CLEAR PROVISIONS IN THE ACT. THE STAMP VALUATION WAS NOT CHALLENGED BY THE APPELLANT; HENCE THE QUESTION OF REFERRING THE SAME TO VALUATION OFFICE ALSO DOES NOT ARISE. THERE IS NO DISCRETION WITH THE AO UNDER THE ACT, WHETHER TO APPLY THE SAID PROVISIONS OF SECTION 50C OR NOT, AND HENCE WHAT THE SAID PROVISIONS ARE TO BE STRICTLY ADHERED TO. HOWEVER, AS REGARDS THE COST OF ACQUISITION, THE APPELLANT'S CLAIM FOR REGISTRATION AND STAMP DUTY OF RS.30,000/- & RS.4,83,750/- RESPECTIVELY IS TO BE ACCEPTED, AS VERIFIED WITH COPY RELEVANT AGREEMENT SUBMITTED BY THE APPELLANT. AS REGARDS THE CLAIM FOR SERVICE TAX OF 2,52,783/-, ITA NO.4465/MUM/2015. SHRI DARSHAN R.MEHTA. 5 THE APPELLANT HAS NOT SUBMITTED ANY DOCUMENTARY EVIDENCE. THE PROPERTY IS NOT AN UNDER-CONSTRUCTION PROPERTY, HENCE THE APPLICABILITY OF SERVICE TAX IS ALSO NOT CLEAR. THEREFORE, NO RELIEF CAN BE GRANTED TOWARDS SUCH CLAIM. SUMMARILY, THE APPELLANT GETS RELIEF OF RS.30,000 + 4,83,750 = RS.5,13,750/- AGAINST THE ASSESSED SHORT TERM CAPITAL GAIN. THEREFORE, THE GROUND NO. 1 OF APPEAL IS PARTLY ALLOWED.' 6. AGAINST THIS ORDER, ASSESSEE IS IN APPEAL BEFORE THE ITAT. 7. I HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. I FIND THAT ASSESSEE HAS DULY OBJECTED TO THE VALUATION AS PER STAMP DUTY AUTHORITY BEFORE THE ASSESSING OFFICER AS WELL AS THE LEARNED COMMISSIONER OF INCOME- TAX. IN SUCH SITUATION, IT WAS INCUMBENT UPON THE AUTHORITIES BELOW TO SEND THE MATTER TO THE VALUATION CELL FOR VALUATION OF THE PROPERTY. HENCE, I FIND THAT THE ORDER OF THE AUTHORITIES BELOW WITHOUT REFERRING TO THE VALUATION CELL IS NOT SUSTAINABLE. 8. IN THIS REGARD, THE LEARNED COUNSEL OF THE ASSESSEE HAS REFERRED TO TRIBUNAL DECISION IN SMC BENCH, WHERE SUCH ASSESSMENT WAS SET ASIDE AND THE ADDITION DELETED. I FIND THAT THE HONBLE APEX COURT IN THE CASE OF KAPOORCHAND SHRIMAL 131 ITR 451 HAS HELD THAT IT IS THE DUTY OF THE APPELLATE AUTHORITY TO CORRECT THE ERRORS IN THE ORDERS OF THE AUTHORITIES BELOW AND REMIT THE MATTER FOR RECONSIDERATION UNLESS PROHIBITED BY LAW. I FIND THAT THE RATIO FROM ABOVE HONBLE APEX COURT DECISION IS APPLICABLE HERE. 9. HENCE, IN THE INTEREST OF JUSTICE, I REMIT THE MATTER TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER IS DIRECTED TO SEND THE ISSUE FOR VALUATION TO THE VALUATION CELL. THEREAFTER, HE SHALL DECIDE THE ISSUE AS PER LAW AFTER GIVING THE ASSESSEE PROPER OPPORTUNITY OF BEING HEARD. ITA NO.4465/MUM/2015. SHRI DARSHAN R.MEHTA. 6 10. APROPOS ISSUE OF ADDITION U/S 68: 10.1 THE ASSESSING OFFICER NOTED FROM AIR INFORMATION THAT THE ASSESSEE HAD DEPOSITED RS.4,00,000 IN CASH WITH SYNDICATE BANK. ON BEING ASKED TO EXPLAIN THE NATURE OF DEPOSIT AND SOURCE OF THE SAME, ME ASSESSEE STATED THAT A SUM OF RS.2,00,000 HAD BEEN WITHDRAWN FROM ACCOUNT OF PRIYAL VIKRAM SAVLA WITH BANK OF INDIA. HOWEVER, THE ASSESSEE DID NOT FILE THE BANK STATEMENT, LETTER OF CONFIRMATION, OR ITR IN RESPECT OF PRIYAL VIKRAM SAVLA. FURTHER, THE ASSESSEE FAILED TO FILE AN EXPLANATION IN RESPECT OF REMAINING CASH DEPOSIT RS.2,00,000. HENCE, THE ENTIRE AMOUNT OF RS.4,00,000 WAS ADDED UNDER INCOME FROM OTHER SOURCES AS INCOME FROM UNDISCLOSED SOURCE U/S 69A OF THE ACT. 11. UPON ASSESSEES APPEAL, THE LEARNED CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER BY HOLDING AS UNDER:- I HAVE PERUSED THE FACTS OF THE CASE AND APPELLANT'S SUBMISSIONS CAREFULLY. REGARDING-CASH LOAN OF RS.2,00,000/- CLAIMED TO BE RECEIVED FROM PRIYAL VIKRAM SAVLA, THE AO HAD CLEARLY STATED IN ASSESSMENT ORDER THAT THE ASSESSEE DID NOT FILE A COPY OF BANK STATEMENT, LETTER OF CONFIRMATION, OR ITR IN RESPECT OF PRIYAL VIKRAM SAVLA, THE APPELLANT HAS NOT SUBMITTED THESE DOCUMENTS EVEN DURING PRESENT APPELLATE PROCEEDINGS. THE ONLY SUPPORTING DOCUMENTS SUBMITTED BY APPELLANT ARE (I) COPY OF PASS BOOK OF APPELLANT WITH SYNDICATE BANK - COVER PAGE AND TRANSACTIONS SHOWING RECEIPT OF TWO CASH ENTRIES OF RS.2,00,000/- EACH, & (II) TRANSACTIONS SHOWING WITHDRAWAL OF RS.2,00,000/- WITH NO COVER PAGE SHOWING NAME OF THE PARTY, AND ALSO THE NARRATION OF THE ENTRY IS INVISIBLE. IT, THEREFORE,' APPEARS THAT THE APPELLANT IS PURPOSELY WITHHOLDING THE SUBMISSION OF WHOLE FACTS, IN SPITE OF GIVEN SUFFICIENT OPPORTUNITY. IN ANY CASE, THE CONTENTION OF CASH LOAN SEEMS ONLY ITA NO.4465/MUM/2015. SHRI DARSHAN R.MEHTA. 7 AN AFTER-THOUGHT, AFTER BEING QUESTIONED BY AO ABOUT THE SOURCE OF INCOME. NO PRUDENT PERSON WOULD TAKE CASH LOAN IN CONTRAVENTION OF SECTION 269SS OF THE ACT. NOW-A-DAYS, IT IS NOT DIFFICULT TO TRANSFER FUNDS THROUGH BANKING CHANNEL FROM ONE BANK TO OTHER ON THE SAME DAY THROUGH RTGS, THEREFORE, THE APPELLANT'S CONTENTION THAT THERE WAS TIME AVAILABLE TO DEPOSIT THE CHEQUE IS ALSO NOT SUSTAINABLE. REGARDING, BALANCE DEPOSIT OF RS.2,00,000/-, THE APPELLANT HAS ALREADY ADMITTED THAT HE IS UNABLE TO PROVE THE SOURCE, IN FACT FURTHER PROVES THAT THE APPELLANT HAS NOT COME WITH CLEAN HANDS. HENCE, THE ADDITION OF THE WHOLE AMOUNT OF RS.4,00,000/- IS CONFIRMED, AND THEREFORE, THE GROUND NO. OF APPEAL IS DISMISSED. 12. AGAINST THE ABOVE ORDER, THE ASSESSEE IS IN APPEAL BEFORE THE ITAT. 13. I HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. THE LEARNED COUNSEL OF THE ASSESSEE SUBMITTED CERTAIN ADDITIONAL DOCUMENTS WHICH RELATED TO THE BANK STATEMENT AND BALANCE SHEET OF THE CONCERNED DONOR / CREDITOR. THE LEARNED CIT(A) ALSO REFERRED TO DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN SUPPORT THE PLEA OF ADMISSION OF ADDITIONAL EVIDENCE. UPON CAREFUL CONSIDERATION, I FIND THAT THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE NEED TO BE ADMITTED AND THE ISSUE BE ADJUDICATED THEREAFTER. SINCE THESE DOCUMENTS WERE NOT BEFORE THE AUTHORITIES BELOW, I DEEM IT APPROPRIATE TO REMIT THE ISSUE TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL EXAMINE THE VERACITY OF THESE DOCUMENTS AND IS THEREFORE DIRECTED TO CONSIDER THE ISSUE AFRESH IN LIGHT OF THE ADDITIONAL DOCUMENTS BEING FILED BY THE ASSESSEE. NEEDLESS TO ADD, THE ASSESSEE SHOULD BE GRANTED ADEQUATE OPPORTUNITY OF BEING HEARD. ITA NO.4465/MUM/2015. SHRI DARSHAN R.MEHTA. 8 14. IN THE RESULT, THIS APPEAL FILED BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 04 TH DAY OF JULY, 2017. SD/- ( SHAMIM YAHYA ) ACCOUNTANT MEMBER MUMBAI; DATED : 04 TH JULY, 2017. DEVDAS* / COPY OF THE ORDER FORWARDED TO : TRUE COPY / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT, MUMBAI. 4. / CIT(A), MUMBAI 5. , , / DR, ITAT, MUMBAI 6. [ / GUARD FILE.