Sh. Jai Kishan Saini, Jalandhar V. The Addl. Commissioner of Incomet-ax, Jalandhar

ITA 477/ASR/2012

• Counselvise Citation: 47720914 RSA 2012
• Duration Of Justice: 7 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-08-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 01-08-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 27-12-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: Y K SUD
• Keywords: Additional evidence; Cost of acquisition; Corroborative evidences

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO.477(ASR)/2012 ASSESSMENT YEAR:2006-07 PAN :ABLPS8498J SHRI JAI KISHAN SAINI, VS. ADDL. COMMR. OF INCOME TAX, PATHANKOT ROAD, JALANDHAR. RANGE-II, JALANDHAR. (APPELLANT) (RESPONDENT) APPELLANT BY:SH.Y.K.SUD, CA RESPONDENT BY:SH.MAHAVIR SINGH, DR DATE OF HEARING: 01/08/2013 DATE OF PRONOUNCEMENT:06/08/2013 ORDER PER BENCH ; THIS APPEAL OF THE ASSESSEE ARISES FROM THE ORDER OF THE CIT(A), JALANDHAR, DATED 25.10.2012 FOR THE ASSESSMENT YEAR 2009-10. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THAT THE CIT(A) HAS WRONGLY SUSTAINED THE ACTI ON OF AO IN WORKING OUT THE LONG TERM CAPITAL GAIN AT RS.4099 453/- AGAINST RS.3954857/- DECLARED BY THE ASSESSEE. 2. THAT THE CIT(A) WAS NOT JUSTIFIED IN SUSTAINING THE ACTION OF THE AO OF DISALALOWANCE OF RS.100000/- SPENT BY THE ASS ESSEE FOR CONSTRUCTION OF BOUNDARY WALL AND RS.5050/- TOWARDS THE MISC. ITA NO.477(ASR)/2012 2 EXPENSES INCURRED FOR GETTING THE REGISTRATION OF T HE LAND EXECUTED. 3. THAT THE ORDERS OF CIT(A) AND THE AO ARE AGAINST TH E LAW AND FACTS OF THE CASE. 2. THE BRIEF FACTS IN THE GROUNDS OF THE ASSESSEE A RE THAT THE ASSESSEE HAS SHOWN LONG TERM CAPITAL GAIN ON SALE OF LAND WHICH IS LOCATED AT VILLAGE DHAKOLI, DERA BASSI. THE SAID LAND HAS BEEN SOLD FO R RS.50,00,000/-. AS PER THE ASSESSEES CALCULATION, THE COST PRICE OF THE S AID LAND WAS RS.641050/- DURING FINANCIAL YEAR 1998-99. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO FURNISH SALE AND PURCHASE DEEDS OF THE SAID PROPERTY. FROM THE PURCHASE DEED FURNISHED, IT WAS OBSERVED BY THE AO THAT THE SAID LAND WAS PURCHASED FOR RS.6,00,000/- AND S TAMP DUTY OF RS.36,000/- HAS BEEN PAID THEREON. THE TOTAL COST OF ACQUISITIO N THEREFORE WAS WORKED OUT AT RS.6,36,000/- AS AGAINST THE COST PRICE OF RS. 641050/- DECLARED BY THE ASSESSEE, SINCE NO PROOF OR DETAIL OF ANY ADDITIONA L EXPENDITURE INCURRED HAS BEEN PRODUCED BY THE ASSESSEE. ALSO IN THE CAPITAL GAINS CALCULATION ANNEXED WITH THE RETURN OF INCOME, THE ASSESSEE HAS CLAIMED COST OF IMPROVEMENT OF RS.70,000 FOR F.Y.1998-99 AND RS.30,000/- FOR F.Y.1 999-2000 ON WHICH INDEXATION HAS BEEN CLAIMED. DURING THE COURSE OF A SSESSMENT PROCEEDINGS, THE ASSESSEES AUTHORIZED REPRESENTATIVE WAS ASKED TO PRODUCE DOCUMENTARY EVIDENCE IN SUPPORT OF THIS COST OF IMPROVEMENT CLA IMED. VIDE ORDER SHEET ENTRY DATED 19.09.2009, 06.10.2009 AND 21.10.2008, THE ASSESSEES ITA NO.477(ASR)/2012 3 AUTHORISED REPRESENTATIVE HAS BEEN ASKED TO FURNISH DETAILED DATE-WISE ACCOUNT OF EXPENDITURE INCURRED AND BILLS/VOUCHERS/ SUPPORTING EVIDENCE REGARDING THE SAID COST OF IMPROVEMENT OF LAND CLAI MED AT RS.1,00,000/-. IN RESPONSE, THE ASSESSEES AUTHORIZED REPRESENTATIVE HAS FILED A WRITTEN REPLY OF THE ASSESSEE, STATING THAT AS REGARDS THE BILLS AND VOUCHERS FOR EXPENSES INC URRED ON CONSTRUCTION OF BOUNDARY WALL, I WOULD LIKE TO SUBM IT THAT I DO NOT MAINTAIN ANY BOOKS OF ACCOUNTS IN MY INDIVIDUAL CAPACITY. H OWEVER, THE SAID AMOUNT FOR CONSTRUCTION OF BOUNDARY WALL HAS BEEN SPENT OU T OF THE WITHDRAWALS FROM BANK DURING THE YEAR UNDER ASSESSMENT. MOREOVE R, THE CONSTRUCTION HAS BEEN MADE LONG BACK AND I WOULD HAVE TO LOOK FOR TH E RECORDS, IF ANY, AVAILABLE WITH ME. 3. THE AO ACCORDINGLY OBSERVED VIDE PAGE 2 & 3 OF HIS ORDER THAT NO COPIES OF ACCOUNT AND BILLS OF CONSTRUCTION HAVE B EEN PRODUCED IN SUPPORT OF THE CLAIM OF THE ASSESSEE AND ACCORDINGLY, HE DISAL LOWED THE COST OF IMPROVEMENT OF RS.1,00,000/- AND TOOK COST OF ACQU ISITION AT RS.6,36,000/- INSTEAD OF COST OF ACQUISITION CLAIMED AT RS.6,41, 050/- I.E. THE A.O. DISALLOWED ACCORDINGLY RS.5050/-. ULTIMATELY THE AO MADE A DISALLOWANCE OF RS.1 LAC ON ACCOUNT OF COST OF IMPROVEMENT AND RS.5050/- ON ACCOUNT OF EXPENSES CLAIMED BY THE ASSESSEE. 4. BEFORE THE LD. CIT(A), THE ASSESSEE SUBMITTED TH E ADDITIONAL EVIDENCE IN THE FORM OF THREE RECEIPTS FROM ONE SH. AKASH DE EP SHARMA, CONTRACTOR DATED 18.03.1999, 18.09.1999 AND 11.02.1999 FOR RS. 18,000/-, RS.9,000/- AND RS.53,000/- RESPECTIVELY FOR BRICK WORK, SAND A ND LABOUR. THE SAID ITA NO.477(ASR)/2012 4 ADDITIONAL EVIDENCE WAS ADMITTED BY THE LD. CIT(A) UNDER RULE 46A(1)(C) OF THE INCOME TAX RULES, 1962. HOWEVER, THE LD. CIT (A) EVEN AFTER ACCEPTING THE ADDITIONAL EVIDENCE OBSERVED VIDE PAR A 10 & 11 THAT EXPLANATION APPEARS TO BE AFTER-THOUGHT WITH REGARD TO THE EXPENSES OF RS.1 LAC AND ACCORDINGLY CONFIRMED THE ACTION OF THE A.O . WITH REGARD TO THE EXPENSES OF RS.5050/-, THE SAME WAS ALSO CONFIRMED SINCE NO EVIDENCE WAS PLACED ON RECORD BY THE ASSESSEE. 5. THE LD. COUNSEL FOR THE ASSESSEE SH.Y.K.SUD, CA ARGUED THAT THE LD. CIT(A) HAS ADMITTED THE ADDITIONAL EVIDENCE AND IT WAS UP TO HIM TO CALL FOR THE REMAND REPORT OR CONDUCT AN ENQUIRY, WHICH POWE RS ARE VESTED WITH THE LD. CIT(A) UNDER SECTION 250(4) OF THE ACT. THE LD. CIT(A) IS NOT JUSTIFIED IN COMING TO THE CONCLUSION IN REJECTING THE EVIDEN CE PLACED ON RECORD WITHOUT PASSING ANY REASONED ORDER OR IN THE ABSENC E OF ANY ADVERSE MATERIAL ON RECORD. MR. Y.K.SUD, CA, THEREFORE, PRAYED TO RE VERSE THE ORDER OF THE LD. CIT(A) AND ALLOW THE CLAIM OF THE ASSESSEE. 6. THE LD. DR, MR. MAHAVIR SINGH, ON THE OTHER HAND , RELIED UPON THE ORDERS OF BOTH THE AUTHORITIES BELOW. HE ARGUED THA T IT IS AN AFTER-THOUGHT CLAIM MADE BY THE ASSESSEE AND SUCH CLAIM SHOULD NO T BE ACCEPTED. HE ACCORDINGLY PRAYED TO CONFIRM THE ORDER OF THE LD. CIT(A). 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. THERE IS NO DISPUTE TO THE FACTS THAT THE LD. CIT( A) ADMITTED THE ADDITIONAL ITA NO.477(ASR)/2012 5 EVIDENCE IN THE FORM OF RECEIPTS ISSUED BY ONE SH. AKASH DEEP SHARMA, CONTRACTOR FOR THE CONSTRUCTION OF BOUNDARY WALL AN D THE TOTAL BILLS ARE FOR RS.80,000/- AS AGAINST THE CLAIM OF THE ASSESSEE AT RS.1,00,000/-. AS PER SECTION 250(4), THE LD. CIT(A) MAY, BEFORE DISPOSIN G OF ANY APPEAL, IF HE THINKS FIT TO MAKE FURTHER ENQUIRY OR DIRECT THE AO TO MAKE FURTHER ENQUIRY. IN THE PRESENT FACTS AND CIRCUMSTANCES, THE LD. CIT (A) AFTER ACCEPTING THE ADDITIONAL EVIDENCE HAS HIMSELF NOT MADE ANY ENQUI RY THOUGH THE AO HAS OBJECTED TO THE ADMISSION OF ADDITIONAL EVIDENCE. I T WAS NECESSARY FOR THE LD. CIT(A) TO MAKE ENQUIRY ON THE ADDITIONAL EVIDENCE SUBMITTED BY THE ASSESSEE BEFORE COMING TO ANY ADVERSE CONCLUSION. T HE LD. CIT(A) VIDE PARA 10 OF HIS ORDER HAS GIVEN HIS OPINION THAT THE EXPL ANATION GIVEN BY THE ASSESSEE APPEARS TO BE AN AFTER-THOUGHT. ANY CONCLU SION BY THE LD. CIT(A) ON THE BASIS OF SURMISES AND CONJECTURES CANNOT BE HEL D TO BE A VALID CONCLUSION. SUCH REASONING CANNOT BE HELD TO A COGE NT REASONING WHICH IS BASED ON NO MATERIAL OR IN THE ABSENCE OF ANY ENQUI RY MADE. HOWEVER, THE ASSESSEE HAS SUBMITTED THE EVIDENCES FOR CONSTRUCT ION OF BOUNDARY WALL FOR RS.80,000/- AND THEREFORE, THE CLAIM OF THE ASSESSE E IS VALID TO THE EXTENT OF RS.80,000/- AND ACCORDINGLY THE ORDER OF THE LD. CI T(A) IS REVERSED TO THE EXTENT OF RS.80,000/- AND THE A.O. IS DIRECTED TO A LLOW THE CLAIM OF THE ASSESSEE ON THE CONSTRUCTION OF BOUNDARY WALL AT RS .80,000/- WHILE ITA NO.477(ASR)/2012 6 COMPUTING THE CAPITAL GAIN. THEREFORE, THE COST OF IMPROVEMENT CLAIMED AT RS.1,00,000/- IS DIRECTED TO BE ALLOWED AT RS.80,00 0/-. 8. AS REGARDS THE EXPENSES OF RS.5050/- BEING THE C OST OF ACQUISITION AS CLAIMED BY THE ASSESSEE AT RS.6,41,050/- WHICH WAS ALLOWED BY THE AO AT RS.6,36,000/- AND CONFIRMED BY THE LD. CIT(A), IT W AS SUBMITTED THAT THESE EXPENSES ARE RELATED TO REGISTERATION WHICH ARE 0.5 % OF THE VALUE OF THE DOCUMENT AND THE EXPENSES OF DEED WRITER. SUCH EXP ENSES ARE FOUND TO BE REASONABLE EXPENSES SINCE WITHOUT EXPENDITURE OF R EGISTRATION AND EXPENSES TO THE DEED WRITER, NO REGISTRATION CAN BE MADE. AC CORDINGLY EXPENSES INCURRED AND CLAIMED ARE REASONABLE EXPENSES THOUG H NO EVIDENCE HAS BEEN PLACED ON RECORD. IN SUCH FACTS AND CIRCUMSTANCES, NO DISALLOWANCE CAN BE MADE AND THE SAME IS DIRECTED TO THE DELETED. THUS, GROUND NO. 1 & 2 OF THE ASSESSEE ARE PARTLY ALLOWED. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IN ITA NO.477(ASR)/2012 IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 6TH AUGUST, 2013. SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 6TH AUGUST, 2013 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:SHRI JAI KISHAN SAINI, JALANDHAR 2. THE ADDL. CIT, R-II, JALANDHAR. 3. THE CIT(A), JLR ITA NO.477(ASR)/2012 7 4. THE CIT, JLR 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.