M.Seenivasan, Salem V. ACIT, Salem

ITA 481/CHNY/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68727 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-09-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 18-09-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 25-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N MADHAVAN
• Assessee Lawyers: T VASUDEVAN
• Keywords: Corroborative evidences

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH A CHENNAI BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI S.S. GODARA, JUDICIAL MEMBER I.T.A. NOS. 481 & 482/MDS/2013 ASST. YEARS : 2008-09 & 2009-10 SHRI M. SEE NIVASAN, NO.2-12-1, YERCAUD MAIN ROAD, KANNANKURICHI, SALEM-636008. PAN : AYUPS1767J. (APPELLANT ) V. THE ASST . COMMISSIONER OF INCOME TAX , CIRCLE I, SALEM. (RESPONDENT) I.T.A. NOS 701 & 702/MDS/2013 ASST. YEARS . 2008-09 & 2009-10 THE ASST. COMMISSIONER OF INCOME TAX , CIRCLE I, SALEM. (APPELLANT ) V. SHRI M. SEE NIVASAN, NO.2-12-1, YERCAUD MAIN ROAD, KANNANKURICHI, SALEM-636008. (RESPONDENT) DEPARTMENT BY SHRI N. MADHAVA N , JCIT ASSESSEE BY : SHRI T. VASUDEVAN, ADVOCATE DATE OF HEARING : 18 SE P 2013 DATE OF PRONOUNCEMENT : 20 SEP 2013 ITA NOS. 481,482,701 & 702/MDS/2013. 2 O R D E R PER BENCH : THESE CROSS APPEALS BY ASSESSEE AS WELL AS REVENU E, FOR ASSESSMENT YEARS2008-09 AND 2009-10 ARISE FROM DIFFERENT ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS), SALEM, BOTH DATED 24.01.2013, PASSED IN APPEAL NO.157/2010 -11 AND NO.228/2011-12 RESPECTIVELY, IN PROCEEDINGS UNDER SEC.143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. IN THE COURSE OF HEARING, BOTH PARTIES ARE FAIR ENOUGH TO CLARIFY THAT THEIR GRIEVANCE IN THE APPEALS IS IDENTICAL IE. THE ASSESSING OFFICER HAD TREATED THE VALUE OF THE PLOT SOLD BY THE ASSESSEE @ ` .175/- PER SQ. FT. BY ENHANCING IT FROM ` .125/- PER SQ. FT. ALREADY DECLARED; WHEREAS THE COMMISSIONER OF INCOME TAX (APPEALS) HAS REDUCED IT TO ` .150/- PER SQ. FT. IN VIEW THEREOF, THE ASSESSEE VEHEMENTLY ARGUES THAT THE AU THORITIES BELOW SHOULD HAVE ACCEPTED SALE VALUE OF THE PLOT S OLD @ ` .125/- ITA NOS. 481,482,701 & 702/MDS/2013. 3 PER SQ. FT. ON THE OTHER HAND, THE CONTENTION OF T HE REVENUE IS THAT THE COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER TAKING TH E VALUE OF THE PLOTS @ ` .175/- PER SQ. FT. THEREAFTER, THE PARTIES PRAY FOR ACCEPTANCE OF THEIR APPEALS. WE HAVE HEARD BOTH PARTIES AT LENGTH AND PERUSED THE CASE FILE. KEEPING IN MIND THE FACT THAT THE I SSUE INVOLVED IN BOTH ASSESSMENT YEARS IS THE SAME, IE. PERTAINING TO SALE VALUE OF THE PLOTS SOLD BY THE ASSESSEE, WE TAKE UP ITA NO.481/MDS/2013 AND 701/MDS/2013 AS THE LEAD CASES . 3. THE ASSESSEE IS AN INDIVIDUAL, ENGAGED IN THE BUSINESS OF REAL ESTATE. HE IS STATED TO HAVE BEE N BUYING THE LANDS IN BULK, CONVERTS IT INTO PLOTS AND SELLS THE SAME. ON 30.10.2008, THE DEPARTMENT HAD CONDUCTED A SURVEY IN ASSESSEES CASE. IN THE COURSE THEREOF, THE ASSESS EE ADMITTED TO HAVE SOLD PLOTS MEASURING 81 @ ` .180/- TO ` .200/- PER SQ. FT, ITA NOS. 481,482,701 & 702/MDS/2013. 4 AGREED TO PAY TAXES ACCORDINGLY. ON 25.3.2010, HE FILED HIS RETURN DISCLOSING INCOME OF ` .13,88,530/-, COMPUTED HIS INCOME BY TAKING THE SALE PRICE OF THE PLOTS @ ` .125/- PER SQ. FT. AS QUOTED IN THE SALE DEEDS. IN THIS REGARD, THE ASSE SSEES BOOKS OF ACCOUNT HAD BEEN AUDITED BY A QUALIFIED ACCOUNTA NT UNDER SEC.44AB OF THE ACT. THE ASSESSING OFFICER IN THE COURSE OF SCRUTINY SOUGHT FOR RELEVANT DETAILS FROM THE ASS ESSEE. IN COURSE THEREOF, THE ASSESSEE CHOSE TO FILE A PETIT ION UNDER SEC.144A OF THE ACT BEFORE THE ADDITIONAL CIT DATED 06.12.2010. THE SAME WAS DISPOSED OF VIDE ORDER DATED 14.12.201 0. THE PAPER BOOK FILED BEFORE US REVEALS THAT THE ADDITIO NAL CIT DIRECTED THE ASSESSING OFFICER TO CONSIDER THE ACT UAL SALE VALUE WITH REGARD TO SALE OF THE PLOTS IN QUESTION. IN C OMPLIANCE THEREOF, THE ASSESSING OFFICER DEPUTED THE INSPECTO R (TAXATION) TO ENQUIRE ABOUT THE ACTUAL SALE VALUE OF THE PLOTS SOLD BY THE ASSESSEE. THE SAID OFFICER CAME TO THE CONCLUSION IN HIS REPORT THAT THE SALE VALUE OF THE PLOTS SOLD RANGED FROM ` .175/- TO ` .200/- PER SQ. FT. DEPENDING UPON THEIR LOCATION AN D OTHER ITA NOS. 481,482,701 & 702/MDS/2013. 5 RELEVANT FACTORS. IN THE ASSESSMENT ORDER DATED 3 1.12.2010, AS PER THE ASSESSING OFFICER OBSERVED THAT THE SALE V ALUE STATED IN THE SALE DEEDS WOULD NOT BE ALWAYS CORRECT. THEREF ORE, HE RELIED UPON THE REPORT OF INSPECTOR AND COMPUTED THE SALE VALUE @ ` .175/- PER SQ. FT. TO THE TUNE OF ` .1,16,47,475, LEADING TO A DIFFERENCE OF ` .33,12,725/- WHICH STOOD ADDED IN THE TOTAL INCOME. 4. IN ASSESSEES APPEAL, THE COMMISSIONER OF INCOM E TAX (APPEALS) HAS GRANTED HIM PART RELIEF BY RESTRI CTING THE SALE PRICE OF THE PLOTS SOLD FROM ` .175/- TAKEN BY THE ASSESSING OFFICER TO ` .150/- PER SQ. FT. BY OBSERVING AS FOLLOWS :- 9. I HAVE CONSIDERED ALL THE FACTS AND NOW PROCEED TO DECIDE ON THE GROUNDS OF APPEAL. THE ONLY ISSUE TO BE DECIDED IS THE ADOPTION OF SALE VALUE OF THE LAND. ALL THE GROUNDS RELATE TO THE SAME ISSUE. 9.1 THE APPELLANT HAS ACCOUNTED THE SALE PRICE AT `.125 PER SQ. FT. BASED ON THE SALE VALUE. THE ASSESSING OFFICER HAS ESTIMATED THE VALUE AT `.175 PER SQ. FT. THE APPEL LANTS MAIN LINE OF DEFENCE IS THAT THE ASSESSING OFFICER RELIA NCE ON THE ITA NOS. 481,482,701 & 702/MDS/2013. 6 STATEMENT IS NOT CORRECT IN VIEW OF THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF S.K.S.KHADERKHAN & SONS I N 210 TAXMAN 248 (SC), WHILE CONFIRMING THE JURISDICTIONA L HIGH COURT. THE APPELLANT STATES THAT THE ASSESSING OFF ICER HAD NO CORROBORATIVE EVIDENCE EXCEPT A REPORT OF THE INSPE CTOR, WHICH INTER ALIA SIMPLY STATES THAT ENQUIRIES WERE MADE W ITH THE LOCAL PEOPLE. HE OBJECTS TO THE ESTIMATION BASED ON THE INSPECTORS REPORT. 9.2 THE ASSESSING OFFICER ON THE OTHER HAND HAS RELIED ON THE TWO ENCUMBRANCE CERTIFICATES TO SHOW THE VALUE OF THE REGISTERED PROPERTY IS `.175 PER SQ. FT. AS PER RECORDS. 10. IN THIS CONTEXT THE OBSERVATION OF THE ADDITI ONAL COMMISSIONER OF INCOME TAX IN HIS DIRECTIONS U/S.14 4A IS THAT IT IS THE PRACTICE IN GENERAL AND IN SEVERAL CASES INVESTIGATED BY IT DEPARTMENT, THERE HAS BEEN A FIN DING WITH REGARD TO ACTUAL SALE CONSIDERATION BEING HIGH ER AS COMPARED TO THE SALE CONSIDERATION APPEARING IN THE SALE DEED. THIS FACT OF LIFE CANNOT BE IGNORED IN T HE INSTANT CASE ALSO. IT IS TRUE THAT THE APPELLANT DURING SURVEY HAS STATED A HIGHER VALUE, BUT AGAIN THAT CANNOT BE TAK EN AS THE VALUE OF SALE FOR ASSESSMENT PURPOSES AS NO VIABLE CORROBORATIVE EVIDENCES HAS BEEN BROUGHT ON RECORD EXCEPT IN TWO CASES, WHERE THE ASSESSING OFFICER HAS RELIED O N ENCUMBRANCE CERTIFICATE. 11. THERE ARE TWO VALUES AS BROUGHT OUT BY THE ASSESSMENT ORDER. FIRSTLY THE VALUE AT WHICH THE PROPERTY WAS REGISTERED IE., ` ..125 PER SQ. FT., WHICH IS THE VALUE ITA NOS. 481,482,701 & 702/MDS/2013. 7 ACCOUNTED FOR BY THE APPELLANT, SECONDLY, THE VALUE OF `.175/- PER SQ. FT., AS PER THE ASSESSING OFFICER ON THE ST RENGTH OF TWO ENCUMBRANCE CERTIFICATES. THERE IS NOTHING TO SHOW ON RECORD, IF ANY ENQUIRES WERE MADE WITH THE PURCHASERS SO AS TO THE ACTUAL PRICE PAID BY THEM. THIS COULD HAVE BEEN DO NE AT THE ASSESSMENT STAGE, AND WOULD HAVE FORMED BETTER CORROBORATIVE EVIDENCE. A SIMPLE REPORT BY THE INS PECTOR WITHOUT ANY SPECIFICS CANNOT BE RELIED UPON. 12. ADMITTEDLY, NO INCRIMINATING EVIDENCE WAS FOUN D DURING THE COURSE OF THE SURVEY. THE ONLY STRENGTH WAS THE STATEMENT OF THE APPELLANT. HOWEVER, IT IS ALSO A FACT OF LIFE THAT THE ACTUAL SALE VALUE IS SOMETIMES HIGHER THAN THE REGISTERED VALUE. AT THE SAME TIME THERE ARE AREA WERE THE GUIDELINE VALUES ARE MUCH HIGHER THAN THE ACTUAL MA RKET PRICE OF THE LANDS. THEREFORE, IT IS HELD THAT ADOPTION OF `.150/- PER SQ. FT AS THE SALE VALUE, WOULD BE FAIR AS BOTH, AS THE APPELLANT AND THE ASSESSING OFFICER HAVE A POINT BUT NEITHER OF THEM IS CONCLUSIVE. HOWEVER, THE VALUE IS TO BE ADOPTED AT `.175/- PER SQ. FT. FOR THE PLOT FOR WHICH CORROBORATIVE EVIDEN CE HAS BEEN OBTAINED. 13. IN THE RESULT, THE APPEAL IS ALLOWED PARTLY.. THIS LEAVES BOTH THE PARTIES AGGRIEVED. ITA NOS. 481,482,701 & 702/MDS/2013. 8 5. AFTER GIVING OUR THOUGHTFUL CONSIDERATION TO TH E PLEADINGS OF THE PARTIES, WE FIND THAT THE QUESTION WHICH ARISES FOR OUR ADJUDICATION IS AS TO WHETHER THE SALE PRIC E OF THE PLOT SOLD IS TO BE TAKEN AS ` .125/- PER SQ. FT. AS CLAIMED BY THE ASSESSEE OR ` .175/- PER SQ. FT. AS ARGUED BY THE REVENUE. PROCEEDING ON THIS ISSUE, WE ARE RE-NARRATING THE F ACTS IN BRIEF. THE REVENUES STRONG RELIANCE IS UPON THE STATEMEN T OF THE ASSESSEE IN THE COURSE OF SURVEY (SUPRA) ADMITTING THE SALE PRICE RANGING FROM ` .180/- PER SQ. FT. TO ` .200/- PER SQ. FT. AND THE REPORT OF THE I.T. INSPECTOR. UNDISPUTEDLY, NEITHE R IN THE FORMER NOR IN THE LATTER EVIDENCE, THERE IS ANY CONCRETE M ATERIAL FORTHCOMING TO JUSTIFY THE REVENUES VALUATION OF T HE SALE PRICE. IN OTHER WORDS, THE STATEMENT OF THE ASSESSEE RECOR DED DURING THE SURVEY IS NOT SUPPORTED BY ANY EVIDENCE. ON THE OTHER HAND, THE BOOKS OF ACCOUNT PREPARED UNDER SEC.44AB OF THE ACT ITA NOS. 481,482,701 & 702/MDS/2013. 9 QUOTING THE ACTUAL SALE PRICE HAVE NOWHERE BEEN REJ ECTED BY THE ASSESSING OFFICER. MOREOVER, THE DIRECTIONS UNDER SEC.144A OF THE ACT TO THE ASSESSING OFFICER (SUPRA) ALSO READ THAT INSTEA D OF ASSESSEES ADMISSION, HE IS TO GO BY THE ACTUAL SALE PRICE. THAT MEANS THAT AS PER REVENUE THE ASSESSEES STATEMENT HAS ITSELF LOST WEIGHT IN SEC.144A PROCEEDINGS. THE INSPECTOR OF INCOME- TAX HAS ALSO NOT QUOTED ANY MATERIAL SO AS TO COME TO THE CONCLU SION THAT THE SALE VALUE DECLARED BY THE ASSESSEE IS LESS THAN TH E ACTUAL SALE PRICE. IN THESE CIRCUMSTANCES, WE HOLD THAT THE AS SESSING OFFICER AS WELL COMMISSIONER OF INCOME TAX (APPEALS) HAVE E RRED IN TAKING THE SALE PRICE OF THE PLOTS SOLD BY THE ASSE SSEE TO ` .175/- AND ` .150/- RESPECTIVELY, INSTEAD OF THAT DISCLOSED @ ` .125/- PER SQ. FT. ACCORDINGLY, THE QUESTION FRAMED HEREINABO VE IS DECIDED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. SO, ITA NO.481/MDS/2013 IS ACCEPTED AND ITA NO.701/MDS/2013 STANDS REJECTED. ITA NOS. 481,482,701 & 702/MDS/2013. 10 6. CONSEQUENTLY, FOR THE ASSESSMENT YEAR 2009-10, THE APPEAL OF THE ASSESSEE IN ITA NO.482/MDS/2013 IS AC CEPTED AND ITA NO.702/MDS/2013 IS DECIDED AGAINST THE REVENUE. 7. TO SUM UP, BOTH APPEALS OF THE ASSESSEE ARE ALL OWED AND THAT OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED ON FRIDAY, THE 20 TH DAY OF SEPTEMBER 2013. SD/- SD/- ( N.S. SAINI ) ( S.S. GODARA ) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED : 20 TH SEPTEMBER 2013 ITA NOS. 481,482,701 & 702/MDS/2013. 11 JLS. C.C : APPELLANT/RESPONDENT/CIT(A)/CIT/DR/G.FILE