JACQUELINE A. UBALE, MUMBAI V. ITO 23 (2)(1), MUMBAI

ITA 452/MUM/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 6691 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Appeal Filed On: 30-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Salary income
• Section: 56(2)(vii)(b)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC, BENCH M UMBAI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBE R ITA NO.452/MUM/2019 ( ASSESSMENT YEAR: 2015-16 ) SMT. JACQUELINE A.UBALE E-24, NUTAN NAGAR TURNER ROAD, BANDRA(W) MUMBAI-400 050 VS. ITO-23(2)(1) ROOM NO.111, MATRU MANDIR, TARDEO MUMBAI-400 007 PAN/GIR NO.AARPU2038D APPELLANT ) .. RESPONDENT ) REVENUE BY SHRI ASHISH KUMAR(DR) ASSESSEE BY SHRI K.K.LALKAKA, AR DATE OF HEARING 27/01/2020 DATE OF PRONOUNCEMENT 05/02/2020 / O R D E R PER G.MANJUNATHA (A.M) : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST, THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)48, MUMBAI, DATED 14/11/2018 AND IT PERTAINS TO ASSESSMENT YEAR 2015-16. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW, CIT (APPEALS) OUGHT TO HAVE FILED THAT THE REASSESS MENT PROCEEDINGS ARE BAD IN LAW, ILLEGAL, IN EXCESS OF AND/OR IN WANT OF JURISDICTION AND/OR OTHERWISE VOID. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW. THE CIT (APPEALS) OUGHT NOT TO HAVE SUSTAINED THE ORDER OF THE ASSESSING OFFICER HAVING REGARD TO THE FACT THAT IN FACT AND IN LAW THERE WAS NO LEGAL NECESSITY TO FRAME A PROTECTIVE ASSESSMENT IN VIEW OF THE FACT THAT ALL MATERIAL FACTS WERE PRODUCED BEFORE THE ASSESSING O FFICER THAT THE APPELLANT WAS NOT THE LEGAL OWNER OF THE TWO PROPER TIES WHICH WERE ITA NO.452/MUM/2019 JACQUELINE A. UBALE 2 OWNED BY HER HUSBAND AND THAT HER NAME WAS ONLY ENT ERED FOR THE PURPOSE OF CONVENIENCE IN THE SAID DOCUMENTS. 3. WITHOUT PREJUDICE TO GROUND NO. 2, THE CIT (APPE ALS) ERRED IN SUSTAINING THE ADDITION OF RS. 20,81,852/- ON INCON SEQUENTIAL AND IRRELEVANT GROUNDS BEING THE DIFFERENCE BETWEEN THE VALUE OF THE TRANSACTION IN THE AGREEMENT AND THE VALUE ADOPTED BY THE STAMP DUTY AUTHORITY BY THE APPELLANT IN THE COURSE OF APPELLA TE AND ASSESSMENT PROCEEDINGS. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS AN INDIVIDUAL DERIVES INCOME FROM SALARY, INCOME FROM BUSINESS AND PROFESSION BEING INTEREST ON CAPITAL AND REMUNERATI ON FROM PARTNERSHIP FIRMS, FILED HER RETURN OF INCOME FOR AY 2015-16 ON 28/03/2016, DECLARING TOTAL INCOME OF RS. 12,86,230 /-. THE CASE WAS SELECTED FOR SCRUTINY AND DURING THE COURSE OF ASSE SSMENT PROCEEDINGS, THE LD. AO NOTICED THAT, AS PER THE DE TAILS AVAILABLE WITH DEPARTMENT IN THE FORM OF AIR INFORMATION, IT WAS NOTICED THAT THE ASSESSEE HAS PURCHASED TWO PROPERTIES. THEREFOR E, HE CALLED UPON THE ASSESSE TO FILE NECESSARY DETAILS, INCLUDI NG COPIES OF SALE DEED ETC, IN ORDER TO RECONCILE THE RETURN WITH AIR INFORMATION. IN RESPONSE, THE ASSESSEE HAS FURNISHED DETAILS OF PUR CHASE OF PROPERTY, INCLUDING COPIES OF SALE DEED ETC. ON PER USAL OF DETAILS FILED BY THE ASSESEE, THE LD. AO NOTED THAT THE ASS ESSEE HAS PURCHASED TWO PROPERTIES ALONG WITH HER HUSBAND MR. AJAY UBALE, FOR A CONSIDERATION OF RS. 2.40 CRORES, WHEREAS THE VAL UE AS PER STAMP DUTY AUTHORITY IS AT RS. 2,60,81,852/-. THEREFORE, HE OPINED THAT THERE IS A DIFFERENCE IN VALUE OF THE PROPERTY, AS PER ST AMP DUTY VALUE AND VALUE FIXED, AS PER CONVEYANCE DATE AND ACCORDINGLY , BY TAKING NOTE OF THE FACT THAT THE ASSESSEE HAS NOT DISCLOSED SAI D PROPERTIES IN HER INDIVIDUAL CAPACITY AND ALSO CONSIDERING THE FACT T HAT THE HUSBAND OF THE ASSESSEE HAS DECLARED SAID PROPERTIES IN HIS IN DIVIDUAL CAPACITY ITA NO.452/MUM/2019 JACQUELINE A. UBALE 3 AND ALSO, EXPLAINED THE SOURCE OF AMOUNT INVESTED F OR PURCHASE OF PROPERTY, HAS MADE ADDITIONS TOWARDS DIFFERENCE IN VALUE OF PROPERTY, AS PER REGISTERED SALE DEED AND VALUE, AS PER STAM P DUTY AMOUNTING TO RS. 20,81,852/- U/S 56(2)(VII)(B) OF THE I.T.ACT , 1961, ON PROTECTIVE BASIS. 4. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD.CIT(A). BEFORE THE LD.CIT(A), THE ASSESSEE HAS REITERATED HER SUBMISSIONS MADE BEFORE THE LD. AO AND ARGUED THAT ALTHOUGH, HER NAME WAS INCLUDED IN REGISTERED DOCUMENT FOR PURCHASE OF PROPERTY, BUT THOSE TWO PROPERTIES HAD BEEN PURCHASED BY HER HUSBAND IN HIS INDIVIDUAL CAPACITY AND ALSO , THE SOURCE FOR PURCHASE OF PROPERTIES HAS BEEN PAID FROM HIS INDIV IDUAL BANK ACCOUNT, THEREFORE, THE SAME HAS NOT BEEN DISCLOSED IN HER INCOME TAX RETURNS FILED FOR THE YEAR AND HENCE, NO ADDITI ONS COULD BE MADE TOWARDS DIFFERENCE IN VALUE, AS PER REGISTERED DEED AND VALUE ADOPTED BY THE STAMP DUTY AUTHORITY ON PROTECTIVE B ASIS U/S 56(2)(VII)(B) OF THE I.T.ACT, 1961. THE LD.CIT(A) A FTER CONSIDERING RELEVANT SUBMISSIONS AND ALSO TAKEN NOTE OF THE PRO VISIONS OF SECTION 56(2)(VII)(B) OF THE I.T.ACT, 1961, HELD THAT THERE IS NOTHING ON RECORD, EITHER BEFORE THE LD. AO OR IN THE APPEAL PROCEEDIN GS, WHICH INDICATES THAT THE ASSESSEE HAS FILED NECESSARY DET AILS TO PROVE THAT THE SUBSTANTIVE ADDITIONS HAS BEEN MADE IN HER HUS BAND CASE. HE, FURTHER NOTED THAT SINCE ADDITION IS ON PROTECTIVE BASIS, THE SAME IS INTRINSICALLY RELATED TO THE SUBSTANTIVE ADDITION, WHICH WOULD HAVE BEEN MADE IN THE CASE OF ASSESSEE HUSBAND MR. AJAY UBALE. NOTHING HAS BEEN BROUGHT BEFORE ME IN THE APPEAL P ROCEEDINGS REGARDING THE STATUS OF ADDITIONS MADE IN THE CASE OF HUSBAND OF THE ASSESSEE. THEREFORE, HE OPINED THAT THERE IS NOTHIN G WRONG IN ITA NO.452/MUM/2019 JACQUELINE A. UBALE 4 MAKING ADDITION TOWARDS DIFFERENCE IN VALUE ON PROT ECTIVE BASIS U/S 56(2)(VII)(B) OF THE I.T.ACT, 1961AND ACCORDINGLY, CONFIRMED ADDITIONS MADE BY THE LD. AO. AGGRIEVED BY THE LD.CIT(A) ORDE R, THE ASSESSEE IS IN APPEAL BEFORE US. 5. THE LD. AR FOR THE ASSESSEE SUBMITTED THAT THE L D.CIT(A) WAS ERRED IN CONFIRMED PROTECTIVE ADDITIONS MADE BY THE LD. AO TOWARDS DIFFERENCE IN VALUE OF PROPERTY, AS PER REGISTERED DEED AND AS PER STAMP DUTY VALUE U/S 56(2)(VII)(B) OF THE I.T.ACT, 1961 WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAS SUBMITT ED NECESSARY DETAILS BEFORE THE LD. AO AND PROVED THAT TWO PROP ERTIES WERE ACQUIRED BY HER HUSBAND IN HIS INDIVIDUAL CAPACITY AND THE SOURCE FOR PURCHASE OF PROPERTY HAS BEEN PAID AND EXPLAINED BY HIM IN HIS INDIVIDUAL CAPACITY. THE LD. AR, FURTHER SUBMITTED THAT EACH AND EVERY AMOUNT PAID TOWARDS PURCHASE OF PROPERTY HAS BEEN EXPLAINED WITH CORRESPONDING BANK STATEMENTS, WHICH CATEGORIC ALLY PROVED THAT MONEY HAS BEEN PAID BY HER HUSBAND MR. AJAY UBALE. THEREFORE, IT IS INCORRECT TO MAKE ADDITIONS IN THE HANDS OF THE ASSESEE THAT TOO ON PROTECTIVE BASIS, WHEN NO ADDITION HAS BEEN MADE IN THE HANDS OF THE ASSESSEES HUSBAND ON SUBSTANTIVE BASIS. 6. THE LD. DR, ON THE OTHER HAND, STRONGLY SUPPORTI NG ORDER OF THE LD.AO, AS WELL AS THE LD.CIT(A) SUBMITTED THAT SINC E, THE ADDITION IS MADE ON PROTECTIVE BASIS, THE SAME IS INTRINSICALLY RELATED WITH SUBSTANTIVE ADDITION WHICH WOULD HAVE BEEN MADE IN THE CASE OF ASSESSEES HUSBAND MR. AJAY UBALE. SINCE THE ASSESS EE HAS BROUGHT NOTHING ON RECORD TO INDICATE STATUS OF ADD ITIONS MADE IN CASE OF HUSBAND OF ASSESSEE, THERE IS NO ERROR IN T HE FINDINGS OF THE ITA NO.452/MUM/2019 JACQUELINE A. UBALE 5 LD.CIT(A) IN CONFIRMING ADDITIONS MADE TOWARDS DIFF ERENCE IN VALUE OF PROPERTY ON PROTECTIVE BASIS. 7. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATE RIAL AVAILABLE ON RECORD AND GONE THROUGH ORDERS OF THE AUTHORITIE S BELOW. IT IS AN ADMITTED FACT THAT WHEN, THERE IS NO CLARITY ON OWN ERSHIP OF ANY ASSET OR SOURCE OF INCOME, WHEN TWO PERSONS CLAIMED OWNER SHIP OR SOURCE OF INCOME, THEN THE LD. AO IS BOUND TO MAKE ADDITIO NS IN ONE HAND ON SUBSTANTIVE BASIS AND PROTECTIVE ADDITION IN ANO THER CASE, BUT UNLESS, IN ORDER TO MAKE PROTECTIVE ADDITIONS, IN R ESPECT OF ANY INCOME, FIRST THE LD. AO HAS TO MAKE SUBSTANTIVE AD DITION IN ANOTHER CASE, UNLESS SUBSTANTIVE ADDITION IS MADE, NO PROTE CTIVE ADDITION COULD BE MADE IN ANOTHER HAND. IN THIS CASE, THE DI SPUTE WITH REGARD TO OWNERSHIP OF TWO PROPERTIES PURCHASED DURING TH E YEAR UNDER CONSIDERATION AND DIFFERENCE IN VALUE OF THE PROPER TIES, AS PER REGISTERED DEED AND VALUE, AS PER STAMP DUTY AUTHOR ITY. THE ASSESSEE CLAIMS THAT TWO PROPERTIES WERE ACQUIRED B Y HER HUSBAND MR. AJAY UBALE AND SOURCE OF INVESTMENT HAS BEEN PA ID AND EXPLAINED BY HIM IN HIS INDIVIDUAL CAPACITY AND THE REFORE, SHE DID NOT DISCLOSED PURCHASE OF PROPERTIES IN HER INCOME TAX RETURNS, FILED FOR THE YEAR. FOR THIS, SHE HAS FILED NECESSARY DETAIL S EXPLAINING THE TRANSACTIONS WITH CORRESPONDING EVIDENCES. THE LD. AO HAS ACCEPTED THAT THE SOURCE OF INVESTMENTS MADE FOR PU RCHASE OF PROPERTY BY HER HUSBAND, BUT MADE ADDITIONS TOWARDS DIFFERENCE IN VALUE OF PROPERTY, AS PER REGISTERED DEED AND AS PE R STAMP DUTY VALUE IN THE HANDS OF THE ASSESSEE ON PROTECTIVE BA SIS U/S 56(2)(VII)(B) OF THE I.T.ACT, 1961, WITHOUT MAKING ANY SUBSTANTIVE ADDITION IN THE HANDS OF ASSESSEE HUSBAND. IF THE PURCHASE OF TWO PROPERTIES AND SOURCE OF INCOME FOR PURCHASE OF PRO PERTY IS ITA NO.452/MUM/2019 JACQUELINE A. UBALE 6 EXPLAINED OR ADMITTED BY THE HUSBAND OF THE ASSESEE , THEN THERE CANNOT BE ANY ADDITIONS IN THE HANDS OF THE ASSESSE E, IN RESPECT OF DIFFERENCE IN VALUE OF PROPERTY U/S 56(2)(VII)(B) O F THE I.T.ACT, 1961, MORE PARTICULARLY, WHEN THERE IS NO SUBSTANTIVE ADD ITION IN THE HANDS OF HUSBAND OF ASSESSEE MR. AJAY UBALE. BUT, FACT RE MAINS THAT THE LD.CIT(A) HAD RECORDED A CLEAR FINDINGS THAT THE AS SESSEE HAS NOT FURNISHED THE FACTS WITH REGARD TO THE STATUS OF AD DITIONS MADE IN THE CASE OF HUSBAND OF ASSESSEE. ON THE OTHER HAND, AS SESSEE CLAIMS THAT THERE IS NO ADDITION IS MADE IN THE HANDS OF T HE HUSBAND OF ASSESSEE, BECAUSE HIS RETURNS WERE PROCESSED U/S 14 3(1) OF THE I.T.ACT, 1961, WITHOUT MAKING ANY ADJUSTMENTS TOWAR DS RETURNED INCOME. FACTS ARE CONTRADICTING EACH OTHER. THEREFO RE, WE ARE OF THE CONSIDERED VIEW THAT TO ASCERTAIN CORRECT FACTS WI TH REGARD TO STATUS OF ASSESSMENT IN THE HANDS OF HUSBAND OF THE ASSESS EE MR. AJAY UBALE, WE ARE OF THE CONSIDERED VIEW THAT THE ISSU E NEEDS TO GO BACK TO THE FILE OF THE LD. AO TO KNOW ADDITION, IF ANY MADE IN HIS HAND ON SUBSTANTIVE ASSESSMENT. IF THE LD. AO FOUN D THAT THERE IS NO SUBSTANTIVE ADDITIONS IN THE HANDS OF HUSBAND OF ASSESSEE MR. AJAY UBALE, THEN THE ADDITION MADE TOWARDS DIFFEREN CE IN VALUE OF PROPERTY ON PROTECTIVE BASIS IN THE HANDS OF THE AS SESSEE U/S 56(2)(VII)(B) OF THE I.T.ACT, 1961SHOULD BE DELETED . 8. IN THE RESULT, APPEAL FILED BY THE ASSESEE IS AL LOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 05/02/2 020 ITA NO.452/MUM/2019 JACQUELINE A. UBALE 7 SD/- (SAKTIJIT DEY) SD/- (G. MANJUNATHA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 05/02/2020 THIRUMALESH SR.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//