ITO, New Delhi V. Sh. Gurcharan Singh, New Delhi

ITA 4730/DEL/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7241 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 10 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 09-06-2016
• Assessment Year: 2003-2004
• Appeal Filed On: 07-08-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: K P GANGULY
• Keywords: Sale consideration of property below Jantri Value
• Section: 50C

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C NEW DELHI BEFORE SHRI S.V. MEHROTRA : ACCOUNTANT MEMBER AND SMT. BEENA A. PILLAI: JUDICIAL MEMBER ITA NO. 4730/DEL/2013 ASSTT. YR: 2003-04 INCOME TAX OFFICER, VS. SH. GURCHARAN SINGH, WARD 33(2), NEW DELHI. 38/2065, NAIWALA KAROL BA GH, NEW DELHI-110005. PAN: AATPS 6989 D ( APPELLANT ) (RESPONDENT) APPELLANT BY : SMT. RITU SHARMA SR. DR RESPONDENT BY : SHRI K.P. GANGULY ADV. DATE OF HEARING : 09/06/2016. DATE OF ORDER : 27/06/20126. O R D E R PER S.V. MEHROTRA, A.M: THIS IS REVENUES APPEAL AGAINST THE ORDER DATE D 31.05.2013, PASSED BY THE LD. CIT(A) IN APPEAL NO. 417/2010-11 RELATI NG TO AY 2003-04, RAISING FOLLOWING GROUNDS OF APPEAL: 1. THE CIT(A) HAS ERRED IN DELETING ADDITION OF RS . 1,39,86,300/- MADE BY AO ON ACCOUNT OF LONG TERM CA PITAL GAIN. 2. THE CIT(A) HAS ERRED IN NOT APPRECIATING THE FAC T THAT THE ASSESSEE COULD NOT PROVE THAT THE PROPERTY WAS OCCU PIED BY THE TENANTS AND THEREFORE IT WAS SOLD BELOW THE PREVAIL ING MARKET RATE. 2 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FI LED RETURN OF INCOME DECLARING THE INCOME OF RS. 1,11,304/-. THE AO HAS OBSERVED THAT IN THIS CASE A REPORT FROM ITO(INV.), UNIT-VI(2), NEW DELHI ON THE TEP AGAINST SH. GURCHARAN SINGH WAS RECEIVED VIDE LETTER F. NO. ITO (INV)/UNIT VI(2)/2009/37 DATED 8.2.2009. ACCORDINGLY, THECASE WAS REOPENED ON THE GROUND THAT THE ASSESSEE SOLD PROPERTY NO. J-117, R AJOURI GARDEN, NEW DELHI AND THE SAME WAS ALLEGED TO HAVE BEEN SOLD FOR RS. 1,47,00,000/-, BUT SHOWN IN THE RETURNED INCOME FOR RS. 13,50,000/- AND HENC E AN INCOME OF RS. 1,34,00,000/- HAD ESCAPED ASSESSMENT FOR AY 2003-04 . THE ASSESSEE WAS ASKED TO EXPLAIN, HOW THE PROPERTY NO. J-117, RAJOU RI GARDEN, NEW DELHI, AGAINST WHICH ADVANCE OF RS. 20,00,000/- WAS TAKEN AND AGREEMENT FOR RS. 68 LACS, WAS ENTERED INTO, LATER ON, SOLD BY THE AS SESSEE, FOR A SUM OF RS. 13,50,000/- ONLY. THE AO FURTHER NOTICED THAT THERE WAS SPECIFIC INFORMATION AGAINST THE ASSESSEE THAT HE WAS COMPELLED BY THE H IGH COURT IN CASE NO. 1A- 9780/2000 TO REFUND THE ADVANCE OF RS. 20 LACS TAKE N BY HIM AGAINST THE SALE AGREEMENT OF J-117 RAJOURI GARDEN, NEW DELHI AND BA CKED OUT OF THE DEAL OF RS. 68 LACS FOR THE PROPERTY (AS PER THE NOTICE SERVED TO HIM BY ADVANCE MR. WADHWA ON BEHALF OF THE PLAINTIFF). THE HIGH CO URT ORDER DATED 1.12.2000 PASSED BY HONBLE JUSTICE K.S. GUPTA WAS AS UNDER: PLAINTIFF HAVE AGREED TO TAKE BACK RS. 20 LACS IN FULL AND FINAL SETTLEMENT OF CLAIM ON OR BEFORE 30/11/2000 FROM DE FT. AND SETTLED SUM OF RS. 20 LACS STANDS PAID. SUIT IS DISMISSED A S WITHDRAWN. 3. HE FURTHER OBSERVED THAT IT WAS FURTHER ALLEGED THAT THE SAME PROPERTY WAS ACTUALLY SOLD BY HIM FOR RS. 1,47,00,000/- IN M ARCH 2003 AND THE SALE DEEDS WERE REGISTERED IN FOUR PARTS TOTALING TO RS. 13,50,000/-. HE CONCLUDED THAT THE PROPERTY WHICH WAS AGREED TO BE SOLD FOR RS. 68 LACS AND AGAINST WHICH AN ADVANCE OF RS. 20 LACS WAS TAKEN B Y THE ASSESSEE COULD NOT 3 BE SOLD FOR RS. 13,50,000/- ONLY AND THAT TOO AFT ER A PERIOD OF 2 YEARS 6 MONTHS. KEEPING IN VIEW THESE FACTS THE AO TOOK THE SALE CONSIDERATION AT RS. 1,47,00,000/- AND AFTER DEDUCTING THE INDEX COS T OF RS. 6,36,300/-, COMPUTED THE CAPITAL GAINS AT RS. 1,40,63,700/-. 4. LD. CIT(A) ALLOWED THE ASSESSEES APPEAL, INTER ALIA, OBSERVING THAT THOUGH THE INVESTMENT WING FOUND THE TAX EVASION PE TITION AT RS. 1,47,00,000/-, NEITHER THE INVESTIGATION ITO NOR TH E AO COULD FOUND ANY EVIDENCE OF SALE OF LAND TO THE TUNE OF RS. 1,47,00 ,000/- NOR ANY AGREEMENT TO SELL OF RS. 68,00,000/- WAS IN POSSESSION OF EIT HER THE AO OR THE ASSESSEE. UNDER SUCH CIRCUMSTANCES, LD. CIT(A) HAS OBSERVED T HAT HE HAS NO OTHER ALTERNATIVE BUT TO TAKE THE SALE CONSIDERATION AT R S. 13,50,000/- AS PER THE REGISTERED SALE DEED. 5. LD. CIT(A) HAS FURTHER OBSERVED THAT ITO (INV.) OR AO WHILE DOING THE SCRUTINY WORK SHOULD BRING OUT EVIDENCES LIKE I NSPECTOR ENQUIRY REPORT, REPORT OF REGISTRATION OF LAND IN THIS LOCALITY IN THE CONCERNED FINANCIAL YEAR WHICH HAD BEEN DETERMINED AT HIGHER VALUE PER SQUAR E METER OR COMPARABLE FIGURES SO THAT IF THERE WAS ANY ASSESSMENT BY ANY AUTHORITY WHILE REGISTERING THE SALE DEED THEN SECTION 50C COULD HAVE BEEN APPL IED AT THAT STAGE. HE POINTED OUT THAT ASSESSMENT FOR FY 2002-03 WAS DON E AFTER TEN YEARS AND AT THIS STAGE PROPER EVIDENCE CANNOT BE BROUGHT. HE PO INTED OUT THAT IN THE ABSENCE OF ANY INQUIRY OR INVESTIGATION MADE BY AO IT IS VERY DIFFICULT TO SUSTAIN SUCH A BIG ADDITION, WHERE THE DEAL WAS FIN ALIZED WITH SALE DEEDS REGISTERED. 6. LD. DR SUBMITTED THAT ASSESSEE DID NOT PROVIDE ANY EVIDENCE REGARDING TENANTS WHO WERE IN OCCUPATION OF THE PRO PERTY AND TO VACATE THEM 4 THE ASSESSEE HAD TO PART WITH SUBSTANTIAL AMOUNT. L D. DR FURTHER SUBMITTED THAT IT IS DIFFICULT TO ACCEPT THAT A PROPERTY WHIC H WAS AGREED TO BE SOLD AT RS. 68 LACS MORE THAN TWO AND HALF YEARS AGO, WAS SOLD JUST FOR RS. 13,50,000/-. 7. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT DEPA RTMENT HAS NOT BROUGHT ON RECORD ANY EVIDENCE ON RECORD EXCEPT TAX EVASION PETITION TO TAKE THE SALE CONSIDERATION AT RS. 1,47,00,000/-. HE SUB MITTED THAT THE PROPERTY HAD BEEN SOLD ON THE PREVAILING MARKET PRICE AND TH E AFFIDAVIT CONFIRMING THAT THE SAID PROPERTY WAS SOLD FOR RS. 13,50,000/- BY SHRI GURCHARAN SINGH TO 4 PARTIES HAD BEEN FILED BEFORE THE AO. HE RELIE D ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF K.P. VARGHESE VS. ITO 131 ITR 597 TO SUBMIT THAT APPARENT STATE OF AFFAIR IS REAL UNL ESS CONTRARY IS PROVED. 8. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND HAVE PERUSED THE RECORD OF THE CASE. THE FACTS ARE NOT D ISPUTED. ADMITTEDLY THE PROPERTY EARLIER HAD BEEN AGREED TO BE SOLD AT RS. 68,00,000/- AND THE ASSESSEE HAD ALSO GOT ADVANCE OF RS. 20 LACS IN PUR SUANCE OF THE SAID AGREEMENT. HOWEVER, SUBSEQUENTLY THE ADVANCE TAKE N BY ASSESSEE WAS REFUNDED AFTER SETTLEMENT WHICH HAS BEEN RECORDED B Y HONBLE JUDGE, AS REPRODUCED EARLIER. THE AO HAS TAKEN THE SALE CONSI DERATION AT RS. 1,47,00,000/- ON THE BASIS OF TAX EVASION PETITION WHICH DEFINITELY CANNOT BE A BASIS FOR SUBSTITUTING THE SALE CONSIDERATION AS RECORDED IN THE FOUR SALE- DEEDS, AGGREGATING TO RS. 13,50,000/-. LD. CIT(A) H AS ACCEPTED THE SALE CONSIDERATION AT RS. 13,50,000/- BUT HAS POINTED OU T VARIOUS SHORT COMINGS IN THE ASSESSMENT MADE DUE TO WHICH SECTION 50C COULD NOT BE APPLIED. 9. SECTION 50C CLEARLY DEALS WITH SUCH KIND OF SIT UATION. THE VALUATION ADOPTED BY SOME VALUATION AUTHORITY FOR THE PURPOSE OF PAYMENT OF STAMP 5 DUTY IN RESPECT OF THE TRANSFER, THE VALUE SO ADOPT ED OR ASSESSED, IS DEEMED TO BE THE FULL VALUE OF CONSIDERATION RECEIVED OR ACCR UING AS A RESULT OF SUCH TRANSFER. IT IS ALSO PERTINENT TO NOTE THAT ASSESS EES CLAIM WAS THAT PROPERTY WAS OCCUPIED BY TENANTS AND IN ORDER TO VACATE THE PROPERTY CONSIDERATION WAS PAID, BUT NO DETAILS IN THIS REGARD HAVE BEEN F URNISHED BY ASSESSEE. CONSIDERING THE VAST DIFFERENCE BETWEEN THE CONSIDE RATION STATED IN THE SALE- DEED AND THE CONSIDERATION WHICH WAS EARLIER AGREED TO FOR TRANSFER VIZ. RS. 68 LACS, IT WOULD BE PROPER TO RESTORE THE MATTER T O THE FILE OF AO TO EXAMINE THE APPLICABILITY OF SECTION 50C AS HE HAS NOT EXAM INED THE FACTS FROM THIS LEGAL PERSPECTIVE. WE MAY POINT OUT THAT IF THE STA MP DUTY VALUATION ON THE DATE OF REGISTRATION OF SALE DEED WAS LESS THAN TH E STATED SALE CONSIDERATION IN THE SALE DEED THEN NO ADDITION IS CALLED FOR. TH EREFORE, FOR THE LIMITED PURPOSE OF FINDING OUT THE DEEMED SALE CONSIDERATIO N AS PER SECTION 50C, THE MATTER IS RESTORED TO THE FILE OF AO. 10. IN THE RESULT, REVENUES APPEAL STANDS ALLOWED FOR STATISTICAL PURPOSES ONLY. ORDER PRONOUNCEMENT IN OPEN COURT ON 27/06/2016. SD/- SD/- (BEENA A. PILLAI) (S.V. MEHROTRA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED:____/06/2016. *MP* COPY OF ORDER TO: 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR, ITAT, NEW DELHI.