Geeta Thakur alias Swapna, Hyd, Hyderabad V. ITO, Ward-7(2), Hyd, Hyderabad

ITA 485/HYD/2015

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1903 (ITAT-HYDERABAD)
• Duration Of Justice: 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 12-10-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 29-04-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M SITARAM
• Assessee Lawyers: T CHAITANYA KUMAR
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Additional evidence; Cost of acquisition; Validity of assessment
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A', HYDERABAD BEFORE SHRI P.M.JAGTAP, ACCOUNTANT MEMBER AND SMT. P.MADHAVI DEVI, JUDICIAL ME MBER ITA NO.484/HYD/2015 : ASSESSMENT YEAR 2008-09 SHRI BHAGAT SINGH THAKUR, HYDERABAD (PAN ANYPS 9385 D ) V/S. INCOME TAX OFFICER, WARD 7(2), HYDERABAD (APPELLANT) (RESPONDENT) ITA NO.485/HYD/2015 : ASSESSMENT YEAR 2008-09 SHRI GEETHA THAKUR ALIAS SWAPNA, HYDERABAD (PAN AHUPS 5469 C) V/S. INCOME TAX OFFICER, WARD 7(2), HYDERABAD (APPELLANT) (RESPONDENT) APPELLANTS BY : SHRI T.CHAITANYA KUMAR RESPONDENT BY : SHRI M.SITARAM DR DATE OF HEARING 12 . 1 0 . 201 5 DATE OF PRONOUNCEMENT 14.10.2015 O R D E R PER P.M.JAGTAP, ACCOUNTANT MEMBER : THESE TWO APPEALS BY TWO ASSESSEES AGAINST TWO SEPARATE ORDERS PASSED BY THE LEARNED COMMISSIONER OF INCOME- TAX(APPEALS) III, HYDERABAD, BOTH DATED 9.1.2015 IN VOLVE COMMON ISSUES AND THE SAME, THEREFORE, HAVE BEEN HEARD TOG ETHER AND ARE BEING DISPOSED OF BY A SINGLE CONSOLIDATED ORDER FO R THE SAKE OF CONVENIENCE. ITA NO.484-485/ HY D/2015 SHRI BHAGAT SINGH THAKUR, HYDERABAD 2 ITA NO.484/HYD/2015: 2. FIRST, WE SHALL TAKE UP THE APPEAL FILED IN T HE CASE OF BHAGAT SINGH THAKUR, BEING ITA NO.484/HYD/2015. 3. RELEVANT FACTS ARE THAT THE ASSESSEE IS AN INDI VIDUAL, WHO ORIGINALLY FILED HIS RETURN OF INCOME FOR THE Y EAR UNDER CONSIDERATION ON 30.9.2009, DECLARING AN INCOME OF RS.2,86,185. THE SAID RETURN WAS INITIALLY ACCEPTED BY THE ASSES SING OFFICER UNDER S.143(1), DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD PURCHASED OPEN LAND ADMEASURING 5,160 SQ. YARDS IN SURVEY NOS. 81, 82, 84 AND 85 IN MADINAGUDA, SERILINGAMPALLY (M), RANGA REDDY DISTRICT, ALONGWTH 10 OTHERS FOR A TOTAL CONS IDERATION OF RS.1,58,42,000. THE ASSESSEES SHARE IN THE SAID LA ND WAS 14.5%. THE COST OF ACQUISITION OF IT ON PRO RATA BASIS WAS RS.22,19,044. ON 12.10.2007, THE ASSESSEE ALONGWITH OTHER CO-OWNERS ENTERED INTO A DEVELOPMENT AGREEMENT WITH M/S. APEX INFRASTRUCTURE S ON 50:50 BASIS. I.E. THE DEVELOPER WAS TO GIVE 50% OF THE C ONSTRUCTED AREA TO THE LAND OWNER AS THE CONSIDERATION FOR TRANSFE R OF THE REMAINING 50% SHARE IN THE LAND. THE CAPITAL GAINS ARISING FR OM THE TRANSFER OF ASSESSEES SHARE OF LAND AS PER THE DEVELOPMENT AGR EEMENT, WAS HOWEVER NOT DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME. A NOTICE UNDER S.148 WAS THEREFORE ISSUED BY THE ASSE SSING OFFICER ON 20.2.2013, REOPENING THE ASSESSMENT, AND IN RESPONS E TO THE SAME, THE RETURN OF INCOME WAS FILED BY THE ASSESSE E OFFERING SHORT TERM CAPITAL GAINS OF RS.18,66,850. DURING THE COU RSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTICED BY THE ASSES SING OFFICER FROM THE DEVELOPMENT AGREEMENT THAT THE COST OF CON STRUCTION OF THE BUILDING WAS SHOWN AT RS.6,90,20,000, AND THE M ARKET VALUE OF THE PROPERTY AS PER THE SRO WAS TAKEN AT RS.9,55,00 ,000. APPLYING THE PROVISIONS OF S.50C, THE ASSESSEES SH ARE OF ITA NO.484-485/ HY D/2015 SHRI BHAGAT SINGH THAKUR, HYDERABAD 3 RS.69,91,388 WAS TAKEN BY THE ASSESSING OFFICER AS SALE CONSIDERATION, AND AFTER REDUCING THE COST OF ACQUI SITION OF RS11,59,522 (50% OF RS.22,19,044), THE SHORT TERM C APITAL GAIN CHARGEABLE TO TAX IN THE HANDS OF THE ASSESSEE WAS WORKED OUT BY HIM AT RS.58,31,866. 4. IN HIS CAPITAL ACCOUNT WITH M/S. SRI SAI CONST RUCTIONS, CASH DEPOSITS OF RS.2,45,000 WERE MADE BY THE ASSES SEE DURING THE YEAR UNDER CONSIDERATION ON VARIOUS DATES. BEFORE THE ASSESSING OFFICER, THE ASSESSEE COULD NOT OFFER ANY EXPLANATI ON REGARDING THE SOURCES OF THESE DEPOSITS. THE ASSESSING OFFICER TH EREFORE, ADDED THE SUM OF RS.2,45,000 TO THE TOTAL INCOME OF THE A SSESSEE. HE ALSO MADE FURTHER ADDITION OF RS.1 LAKH TO THE TOT AL INCOME OF THE ASSESSEE ON ACCOUNT OF LOW WITHDRAWALS HOLDING THA T THE AMOUNT OF RS.97,837 SHOWN BY THE ASSESSEE AS WITHDRAWALS FOR PERSONAL AND HOUSEHOLD EXPENSES WAS NOT SUFFICIENT KEEPING IN VI EW THE SIZE OF HIS FAMILY AS WELL AS THEIR STANDARD OF LIVING. ACC ORDINGLY, THE TOTAL INCOME OF THE ASSESSEE WAS DETERMINED BY THE ASSESS ING OFFICER AT RS.64,63,050 IN THE ASSESSMENT COMPLETED UNDER S. 143(3) READ WITH S.147, VIDE ORDER DATED 20.1.2014. 5. AGAINST THE ORDER PASSED BY THE ASSESSING OFFI CER UNDER S.143(3) READ WITH S.147, AN APPEAL WAS PREFERRED B Y THE ASSESSEE BEFORE THE LEARNED CIT(A), CHALLENGING THE VALIDITY OF THE SAID ASSESSMENT AS WELL AS DISPUTING THE ADDITIONS MADE BY THE ASSESSING OFFICER THEREIN. AFTER CONSIDERING THE SU BMISSIONS MADE BY THE ASSESSEE AS WELL AS PERUSING THE RELEVANT MA TERIAL ON RECORD, THE LEARNED CIT(A) DID NOT FIND MERIT IN THE PRELIM INARY ISSUE RAISED BY THE ASSESSEE CHALLENGING THE VALIDITY OF ASSESSM ENT MADE BY THE ASSESSING OFFICER UNDER S.143(3) READ WITH S.14 7 AND UPHOLDING THE VALIDITY OF THE SAID ASSESSMENT, HE DECIDED THE PRELIMINARY ISSUE AGAINST THE ASSESSEE. HE ALSO CON FIRMED ITA NO.484-485/ HY D/2015 SHRI BHAGAT SINGH THAKUR, HYDERABAD 4 SUBSTANTIALLY THE OTHER ADDITIONS MADE BY THE ASSES SING OFFICER TO THE TOTAL INCOME OF THE ASSESSEE, AFTER ALLOWING SO ME MARGINAL RELIEF BY RESTRICTING THE QUANTUM OF CAPITAL GAINS DETERMINED BY THE ASSESSING OFFICER. AGGRIEVED BY THE ORDER OF THE LE ARNED CIT(A), ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBU NAL. 6. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES A ND ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. . GRO UND NO.1 RAISED BY THE ASSESSEE IN THIS APPEAL IS GENERAL, WHILE GR OUND NO.2 CHALLENGING THE VALIDITY OF ASSESSMENT MADE BY THE ASSESSING OFFICER UNDER S.143(3) READ WITH S.147 HAS NOT BEEN PRESSED BY THE LEARNED COUNSEL FOR THE ASSESSEE AT THE TIME OF HEA RING BEFORE US. THESE GROUNDS ARE ACCORDINGLY DISMISSED. 7. AS REGARDS THE COMMON ISSUE INVOLVED IN GROUND S NO.3 TO 8 RELATING TO DETERMINATION OF QUANTUM OF SHORT TERM CAPITAL GAINS CHARGEABLE TO TAX IN THE HANDS OF THE ASSESSE E AS A RESULT OF TRANSFER OF HIS LAND TO M/S. APEX INFRASTRUCTURES, BY WAY OF DEVELOPMENT AGREEMENT, THE LEARNED COUNSEL FOR THE ASSESSEE HAS RAISED TWO FOLD CONTENTIONS. THE FIRST CONTENTION R AISED BY HIM IS THAT WHAT WAS TRANSFERRED BY THE ASSESSEE BY WAY O F DEVELOPMENT AGREEMENT IS 50% OF HIS SHARE OF LAND, BUT THE ASSE SSING OFFICER AS WELL AS THE LEARNED CIT(A) HAVE WORKED OUT THE CAPI TAL GAINS AS IF THE ENTIRE LAND IS TRANSFERRED BY THE ASSESSEE. AFT ER GOING THROUGH THE ORDERS OF THE ASSESSING OFFICER AS WELL AS THE LEARNED CIT(A), WE ARE UNABLE TO ACCEPT THIS CONTENTION OF THE LEAR NED COUNSEL FOR THE ASSESSEE. THE ASSESSEES SHARE IN THE TOTAL LAN D IS 14.50% AND WHILE WORKING OUT THE CAPITAL GAINS, THE ASSESSEES SHARE IN THE TOTAL SALE CONSIDERATION OF RS.9.55 CRORES, AS TAKE N BY THE ASSESSING OFFICER AT RS.69,91,388 AND MODIFIED BY THE LEARNED CIT(A) TO RS.69,23,750, IS 7.25% AND NOT 14.5%. SIMILARLY, TH E DEDUCTION IS ALLOWED TOWARDS COST OF ACQUISITION TO THE EXTENT O F RS.11,59,522, ITA NO.484-485/ HY D/2015 SHRI BHAGAT SINGH THAKUR, HYDERABAD 5 WHICH IS 50% OF THE TOTAL COST OF ACQUISITION OF TH E ASSESSEES SHARE OF LAND. THE CAPITAL GAIN THUS IS COMPUTED BY THE A SSESSING OFFICER ONLY IN RESPECT OF THE 50% OF THE LAND OF THE ASSES SEE, WHICH WAS TRANSFERRED UNDER THE DEVELOPMENT AGREEMENT, AND TH ERE IS NO MERIT IN THE CONTENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT THE CAPITAL GAINS HAS BEEN WORKED OUT BY THE ASSESS ING OFFICER IN RESPECT OF THE ENTIRE SHARE OF THE ASSESSEE IN THE TOTAL LAND. 8. THE SECOND CONTENTION RAISED BY THE LEARNED COU NSEL FOR THE ASSESSEE IS THAT THE SRO VALUE AS SHOWN IN THE DEVELOPMENT AGREEMENT AT RS.9.55 CRORES AND ADOPTED BY THE ASSE SSING OFFICER AS SALE CONSIDERATION UNDER S.50C INCLUDED COST OF CONSTRUCTION ALSO, WHILE THE SUBJECT MATTER OF COMPUTATION OF CA PITAL GAINS WAS TRANSFER OF LAND ALONE, INSOFAR AS THE YEAR UNDER C ONSIDERATION IS CONCERNED. HE HAS CONTENDED THAT THE SRO VALUE OF THE ASSESSEES SHARE OF 50% OF THE LAND ALONE THUS IS REQUIRED TO BE ADOPTED AS SALE CONSIDERATION UNDER S.50C FOR THE COMPUTATION OF CAPITAL GAINS. HE HAS ALSO FIELD A COPY OF THE CERTIFICATE DATED 9.10.2015 ISSUED BY THE SRO TO GIVE SUCH VALUE AS OF 12.10.20 07, AS ADDITIONAL EVIDENCED. SINCE THIS ADDITIONAL EVIDENC E FILED BY THE ASSESSEE IS RELEVANT FOR DECIDING THE ISSUE INVOLVE D IN THIS APPEAL RELATING TO THE COMPUTATION OF CAPITAL GAINS AND TH E LEARNED DEPARTMENTAL REPRESENTATIVE HAS ALSO NOT RAISED ANY MATERIAL OBJECTION IN THIS REGARD, WE HAVE ADMITTED THE SAM E. THE LEARNED DEPARTMENTAL REPRESENTATIVE, HOWEVER, HAS CONTENDED THAT THE ASSESSING OFFICER SHOULD BE GIVEN OPPORTUNITY TO VE RIFY THIS ADDITIONAL EVIDENCE FILED BY THE ASSESSEE FOR THE F IRST TIME BEFORE THE TRIBUNAL. WE FIND MERIT IN THIS CONTENTION OF T HE LEARNED DEPARTMENTAL REPRESENTATIVE. ACCORDINGLY, THIS ISS UE IS RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR THE LIMITED P URPOSE OF DETERMINING THE SALE CONSIDERATION OF THE SHARE OF THE ASSESSEES LAND TRANSFERRED UNDER THE DEVELOPMENT AGREEMENT FO R THE PURPOSE ITA NO.484-485/ HY D/2015 SHRI BHAGAT SINGH THAKUR, HYDERABAD 6 OF COMPUTATION OF CAPITAL GAINS. THE ASSESSING OFFI CER SHALL WORK OUT SUCH SALE CONSIDERATION ON THE BASIS OF THE COST OF CONSTRUCTION OF THE BUILT UP AREA ALONE WHICH THE ASSESSEE IS ENTIT LED TO GET FROM THE DEVELOPER IN LIEU OF TRANSFER OF 50% OF HIS SHA RE OF LAND, AND ALSO CONSIDER THE SRO VALUE OF SUCH SHARE AS ON THE DATE OF TRANSFER DATED 12.10.2007, AND ACCORDINGLY DETERMINE THE SAL E CONSIDERATION FOR THE PURPOSES OF COMPUTATION OF CAPITAL GAINS, W HICH IS CHARGEABLE TO TAX IN THE HANDS OF THE ASSESSEE. THE RELEVANT GROUNDS OF THE ASSESSEES APPEAL ARE ACCORDINGLY TR EATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 9. AS REGARDS THE ISSUE INVOLVED IN GROUND NO.9 RE LATING TO THE ADDITION OF RS.2,45,000 MADE BY THE ASSESSING O FFICER AND CONFIRMED BY THE LEARNED CIT(A) ON ACCOUNT OF UNEXP LAINED CREDITS APPEARING IN THE CAPITAL ACCOUNT OF THE ASSESSEE WI TH M/S.SRI SAI CONSTRUCTIONS, IT IS OBSERVED THAT NO EXPLANATION W HATSOEVER WAS OFFERED BY THE ASSESSEE EITHER BEFORE THE ASSESSING OFFICER OR BEFORE THE LEARNED CIT(A) IN RESPECT OF SOURCES OF FUNDS FOR MAKING THE SAID DEPOSITS. EVEN BEFORE US, THE LEARNED COUN SEL HAS NOT BEEN ABLE TO OFFER ANY SATISFACTORY EXPLANATION WITH REG ARD TO THE SAID CREDITS. THIS BEING SO, WE FIND NO JUSTIFIABLE REAS ON TO INTERFERE WITH THE IMPUGNED ORDER OF THE LEARNED CIT(A) CONFIRMING THE ADDITION MADE BY THE ASSESSING OFFICER ON THIS ISSUE. GROUND NO.9 IS ACCORDINGLY DISMISSED. 10. AS REGARDS THE ISSUE RAISED IN GROUND NO.10 RE LATING TO THE ADDITION OF RS.1 LAKH MADE BY THE ASSESSING OFF ICER AND CONFIRMED BY THE LEARNED CIT(A) ON ACCOUNT OF LOW W ITHDRAWALS, IT IS OBSERVED THAT THE WITHDRAWALS OF RS.97,837 SHOWN BY THE ASSESSEE WERE CONSIDERED BY THE ASSESSING OFFICER AS WELL AS BY THE LEARNED CIT(A) AS INSUFFICIENT FOR MEETING THE PERSONAL AND HOUSEHOLD EXPENSES OF THE ASSESSEE, WITHOUT GIVING ANY COGENT OR CONVINCING ITA NO.484-485/ HY D/2015 SHRI BHAGAT SINGH THAKUR, HYDERABAD 7 REASONS. THE ONLY REASONS GIVEN BY THEM FOR TREATIN G THE SAID WITHDRAWALS AS INSUFFICIENT, VIZ. THE SIZE OF FAMIL Y AND STANDARD OF LIVING ARE TOO GENERAL TO ACCEPT THE SAME. ONUS I N THIS REGARD IS ON THE REVENUE TO SHOW THAT THE WITHDRAWALS SHOWN BY T HE ASSESSEE WERE NOT SUFFICIENT FOR HIS PERSONAL AND HOUSEHOLD EXPENSES, BY GIVING COGENT AND CONVINCING REASONS, AND SINCE THE ASSESSING OFFICER AS WELL AS THE LEARNED CIT(A) HAVE FAILED T O DISCHARGE THIS ONUS, WE ARE OF THE VIEW THAT THE AD-HOC ADDITION M ADE ON ACCOUNT OF THE LOW WITHDRAWALS CANNOT BE SUSTAINED. WE AC CORDINGLY DELETE THE SAME AND ALLOW GROUND NO.10 OF THE ASSESSEE IN THIS APPEAL. 11. GROUNDS NO.11 AND 13 RAISED IN THIS APPEAL ARE GENERAL IN NATURE, WHILE THE ISSUE RAISED IN GROUND NO.12 R ELATING TO CHARGING OF INTEREST UNDER S.234B AND 234C IS CONSE QUENTIAL IN NATURE, AND THE ASSESSING OFFICER IS ACCORDINGLY DI RECTED TO ALLOW CONSEQUENTIAL RELIEF TO THE ASSESSEE. 12. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALL OWED. ITA NO.485/HYD/2015 13. NOW TAKING UP THE APPEAL OF SHRI GEETHA THAKUR ALIAS SWAPNA, BEING ITA NO.485/HYD/2015, GROUNDS NO.1, 10 AND 12 ARE GENERAL AND DO NOT CALL FOR SEPARATE ADJUDICATION. GROUND NO.2 RELATING TO VALIDITY OF THE ASSESSMENT FRAMED UNDER S.143(3) READ WITH S.147 HAS NOT BEEN PRESSED BY THE LEARNED COUN SEL FOR THE ASSESSEE AT THE TIME FOE HARING. THE SAME IS ACCOR DINGLY DISMISSED. 14. COMMON ISSUE INVOLVED IN GROUNDS NO.3 TO 8 RE LATES TO DETERMINATION OF QUANTUM OF SHORT TERM CAPITAL GAIN S CHARGEABLE TO TAX IN THE HANDS OF THE ASSESSEE AS A RESULT OF TRA NSFER OF ASSESSEES ITA NO.484-485/ HY D/2015 SHRI BHAGAT SINGH THAKUR, HYDERABAD 8 SHARE IN THE LAND OF 5,150 SQ. YARDS OF LAND AT MAD INAGUDA TO M/S. APEX INFRASTRUCTURES, BY WAY OF DEVELOPMENT AGREEME NT. FACTS OF THE CASE AND THE CONTENTIONS OF THE PARTIES IN RELA TION TO THESE GROUNDS ARE SIMILAR TO THOSE CONSIDERED BY US IN RE LATION TO CORRESPONDING GROUNDS OF THE ASSESSEE IN THE CASE O F SHRI BHAGAT SINGH THAKUR HEREINABOVE. HENCE, FOR THE REASONS D ISCUSSED IN PARAS 7 AND 8 HEREINABOVE, WITH THE SAME DIRECTIONS AS GIVEN IN PARA 8 HEREINABOVE, WE PARTLY ALLOW THESE GROUNDS OF THE ASSESSEE FOR STATISTICAL PURPOSES. 15. SIMILARLY, THE ISSUE INVOLVED IN GROUND NO.9 OF THIS APPEAL RELATING TO THE ADDITION OF RS.1 LAKH MADE T O THE INCOME OF THE ASSESSEE ON ACCOUNT OF LOW WITHDRAWALS TOWARDS PERSONAL AND HOUSEHOLD EXPENSES, IS SIMILAR TO THE ONE CONSIDERE D BY US HEREINABOVE, WHILE DEALING WITH THE CORRESPONDING G ROUND, BEING GROUND NO.10, IN THE APPEAL OF SHRI BHAGAT SINGH TH AKUR. HENCE, FOR THE REASONS DISCUSSED IN PARA 10 ABOVE, WE DELE TE THE ADDITION OF RS.1 LAKH MADE BY THE ASSESSING OFFICER AND SUST AINED BY THE LEARNED CIT(A), ALLOWING THIS GROUND OF THE ASSESSE E. 16. IN THE RESULT, THIS APPEAL OF ASSESSEE IS ALSO PARTLY ALLOWED FOR STATISTICAL PURPOSES. 17. TO SUM UP, BOTH THE APPEALS OF THE ASSESSEES A RE PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 14 TH OCTOBER, 2015 SD/- SD/- (P.MADHAVI DEVI) (P.M.JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER DT/- 14 TH OCTOBER , 2015 ITA NO.484-485/ HY D/2015 SHRI BHAGAT SINGH THAKUR, HYDERABAD 9 COPY FORWARDED TO: 1. 2. SHRI BHAGAT SINGH THAKUR, C/O. SHRI T.CHAITANYAKUMA R, ADVOCATE, FLAT NO.409, METRO RESIDENCY, RAJBHAVAN R OAD, SOMAJIGUDA, HYDERABAD SHRI GEETHA THAKUR ALIAS SWAPNA, C/O. SHRI T.CHAITA NYAKUMAR, ADVOCATE, FLAT NO.409, METRO RESIDENCY, RAJBHAVAN R OAD, SOMAJIGUDA, HYDERABAD 3. 4. INCOME TAX OFFICER WARD 7(2), HYDERABAD ASST. COMMISSIONER OF INCOME-TAX(APPEALS) III, HYDERABAD 5. COMMISSIONER OF INCOME-TAX III, HYDERABAD 6. DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S