ITO, New Delhi V. Shri Hardeep Malhotra, New Delhi

ITA 4951/DEL/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61729 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 12-04-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 08-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATPAL SINGH
• Assessee Lawyers: ANUJ K SINHA
• Keywords: Opportunity of being heard; Cost of acquisition
• Section: 143(3); 11A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH `G : NEW DELHI) BEFORE SHRI U.B.S. BEDI, JUDICIAL MEMBER AND SHRI A.N. PAHUJA, ACCOUNTANT MEMBER ITA NO.4951/DEL./2011 (ASSESSMENT YEAR : 2008-09) ITO, WARD 47(1), VS. SHRI HARDEEP MALHOTRA, NEW DELHI C-5D, MIG FLATS, MAYAPURI, NEW DELHI. (PAN/GIR NO.ADGPM4492D) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ANUJ K. SINHA, ADV. REVENUE BY : SHRI SATPAL SINGH, SR.DR ORDER PER U.B.S. BEDI, J.M. THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT (A)- XXX, NEW DELHI, DATED 26.8.2011, RELEVANT TO ASSESS MENT YEAR 2008-09, RAISING THE FOLLOWING GROUNDS: 1. WHETHER THE CIT(A) WAS JUSTIFIED IN DECIDING TH E APPEAL OF THE ASSESSEE BY ACCEPTING THE CONTENTIONS OF THE ASSESSEE ONLY AND NOT CONSIDERING THE FACTS GIVEN IN THE ASSESSMENT ORDER. 2. WHETHER THE CIT(A) WAS JUSTIFIED IN ADMITTING AD DITIONAL EVIDENCE IN CONTRAVENTION TO THE PROVISIONS OF RULE 46A(3) OF T HE I.T. RULES WITHOUT GIVING AN OPPORTUNITY TO THE ASSESSING OFFICER. 3. WHETHER THE CIT(A) WAS JUSTIFIED IN HOLDING THAT ASSESSEE SOLD ONLY ONE PROPERTY WITHOUT GIVING REASONS THEREOF WHEREAS THE ASSESSING OFFICER HELD THAT ASSESSEE SOLD TWO IMMOVABLE PROPERTIES DU RING THE YEAR UNDER CONSIDERATION. 4. WHETHER THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF RS.7 LAC IN RESPECT OF FITTINGS AND FIXTURES BY CONSIDERING THE M AS PERSONAL EFFECTS WITHOUT GIVING ANY REASONS THEREOF WHEREAS THE ASSE SSING OFFICER TREATED THE SALE OF FITTINGS AND FIXTURES AS PART OF SALE O F IMMOVABLE PROPERTY. I.T.A. NO.4951/DEL./2012 (A.Y. : 2008-09) 2 2. FACTS INDICATE THAT THE ASSESSEE FILED RETURN DE CLARING INCOME OF RS.11,71,500/- ON 22.12.2008, WHEREAS THE ASSESSING OFFICER HAS MADE ASSESSMENT U/S 143(3) ON 23.12.2010 FOR RS.71,48,270/- BY MAKING TWO ADDITIO NS OF RS.24,20,512/- AND RS.35,56,252/-, AS PER PARAS.11(A) & 11(B) OF THE A SSESSMENT ORDER WHICH GIVE FOLLOWING NARRATION: 11A LONG TERM CAPITAL GAINS ON PROPERTY AS MENTION ED IN COMPUTATION OF INCOME. SALE OF FLAT RS.35,50,000/- COST OF ACQUISITION IN 1982-83 = RS.15,000 (AS PER COMPUTATION OF INCOME) INDEXED COST OF ACQUISITION = 15,000X551/109 RS.75, 826/- INDEXED COST OF IMPROVEMENT NIL NIL (COST OF IMPROVEMENT IS TAKEN AT NIL IN VIEW OF CONCLUSION AT PARA 9 ABOVE) LONG TERM CAPITAL GAINS RS.34,741,174 THE ASSESSEE HAS SHOWN LONG TERM CAPITAL GAINS ON T HE SALE OF PROPERTY IN HER COMPUTATION OF INCOME AT RS. 10,53,662/- WHEREAS TH E LONG TERM CAPITAL GAINS, AS DISCUSSED ABOVE IS COMPUTED AT RS.34,74,174 10,53 ,662) IS BEING MADE TO THE INCOME OF THE ASSESSEE AS LONG TERM CAPITAL GAINS O N ACCOUNT OF SALE OF PROPERTY WHICH HAS NOT BEEN DISCLOSED BY THE ASSESSEE IN HER RETURN OF INCOME. THE PENALTY PROCEEDINGS U/S 271(1)(C) OF THE I.T. ACT, 1961 ARE BEING INITIATED SEPARATELY. 11B). LONG TERM CAPITAL GAINS ON PROPERTY FOR WHICH PAPERS WERE FILED DURING ASSESSMENT PROCEEDINGS DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AR FILED A COPY OF SALE DEED DATED 31.12.2007 OF FLAT NO.1326, SECTOR B, POCKET- 1, VASANT KUNJ, NEW DELHI WHICH WAS SOLD BY THE ASSESSEE FOR A SUM OF RS.35,0 0,000/-. FURTHER, THE AR FILED AN AGREEMENT TO SELL AND PURCHASE (FITTINGS & FIXTU RES) DATED 31.12.2007 IN RELATION TO THE FIXTURES & FITTINGS INSTALLED IN FL AT NO.1326, SECTOR-B, POCKET-1, VASANT KUNJ, NEW DELHI. AS PER THE SAID AGREEMENT THESE FITTINGS & FIXTURES WERE SOLD FOR A CONSIDERATION OF RS.10 LAKHS. VIDE ORDE R SHEET ENTRY DATED 25.10.2010 THE ASSESSEE WAS REQUIRED TO FURNISH THE DETAILS OF THESE FITTINGS & FIXTURES ALONG WITH THE DETAILS OF THEIR PURCHASE AND REQUIRED TO EXPLAIN WHY THIS AMOUNT SHOULD NOT BE TAKEN AS A PART OF SALE CONSIDERATION OF THE FLAT. AFTER THE DATE FIXED AND OPPORTUNITIES WERE PROVIDED TO THE ASSESSEE, BUT OF NO AVAIL AS NO REPLY WAS FILED BY THE ASSESSEE IN THIS REGARD, THEREFORE, THIS SUM OF RS.10 IS BEING TREATED AS A PART OF SALE CONSIDERATION. IN VIEW OF THIS DISCUS SION THE SALE CONSIDERATION OF THE FLAT AT VASANT KUNJ IS BEING TAKEN AT RS.45,00,000/ - INSTEAD OF RS.35,00,000/- AS I.T.A. NO.4951/DEL./2012 (A.Y. : 2008-09) 3 MENTIONED IN THE SALE DEED DATED 31.12.2007. THE L ONG TERM CAPITAL GAIN IS COMPUTED AS UNDER: SALE CONSIDERATION RS.45,00,000/- COST OF ACQUISITION IN THE YEAR 1989-90 RS.2,94,6 00 INDEXED COST OF ACQUISITION =294600X551/172 RS. 9,43,748/- LONG TERM CAPITAL GAINS RS.35,56,252/- SINCE THE ASSESSEE HAS NOT SHOWN SALE OF THIS PROPE RTY IN HER RETURN OF INCOME, THEREFORE, AN ADDITION OF RS.35,56,252/- IS BEING M ADE TO THE INCOME OF THE ASSESSEE AS LONG TERM CAPITAL GAINS NOT DISCLOSED B Y THE ASSESSEE IN HER RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION. IN VIEW O F THE ABOVE DISCUSSION, I AM SATISFIED THAT THE ASSESSEE HAS CONCEALED HER INCOM E. THE PENALTY PROCEEDINGS U/S 27(1)(C) OF THE I.T. ACT, 1961 ARE BEING INITIATED SEPARATELY. 3. THE ASSESSEE TOOK UP THE MATTER IN APPEAL AND LD .AR OF THE ASSESSEE EXPLAINED THAT ASSESSEE WAS NOT HAVING TWO PROPERTIES, BUT ON LY ONE PROPERTY WHICH WAS SOLD BY SALE DEED REGISTRATION NO.23902 IN THE FINANCIAL YEAR 2 007-08 ON 26.12.2007, THE PROPERTY IS LOCATED AT VASANT KUNJ, IN THE SALE DEED WHICH IS D EED OF CONVEYANCE, THE FLAT NO. HAS BEEN MENTIONED AS 1236+SG, POCKET I, SF+TF,(DUPLEX) , SECTOR-B, SFS-III, CATEGORY, VASANT KUNJ NEW DELHI. THE ASSESSING OFFICER HAD T AKEN IT AS SALE OF 2 PROPERTIES AT SALE CONSIDERATION OF RS.35,50,000/- AND THE 2 ND PROPERTY AT RS.35,00,000 + RS.10 LAKH TAKEN FOR FITTINGS AND FIXTURES IN THE BUILDING. THE AR EXPLAINED THAT IT IS A SALE OF A DUPLEX HOUSE VIDE ABOVE SALE DEED WHICH HAS BEEN ISSUED BY THE SUB-REGISTRAR-VII, NEW DELHI. THE DEED IS ALSO RECTIFIED ON 20.12.2007. THE AR W AS ASKED TO GIVE THE COMMENTS ON ASSESSMENT ORDER IN A TABULAR MANNER WHICH WERE DUL Y FURNISHED BY THE ASSESSEE ON EACH OF THE POINTS RAISED IN ASSESSMENT ORDER AND PRAYED FOR ACCEPTING THE APPEAL OF THE ASSESSEE. 4. THE CIT(A) WHILE CONSIDERING THE APPEAL OF THE A SSESSEE AND IN THE LIGHT OF DETAILED SUBMISSIONS AND POINT-WISE REPLY HAS CONCL UDED TO ALLOW PARTLY AND GAVE RELIEF AS PER PARA. 4 AS UNDER: I.T.A. NO.4951/DEL./2012 (A.Y. : 2008-09) 4 I HAVE CONSIDERED THE DETAILED SUBMISSIONS OF THE APPELLANT AND THE ORDER OF THE ASSESSING OFFICER CAREFULLY. THE COUNSEL OF THE AP PELLANT APPEARED BEFORE ME AND FILED SALE DEED, AFFIDAVIT AND RECTIFICATION DEED F OR THE PROPERTY. THE APPELLANT HAD SOLD ONLY ONE PROPERTY AND HIS CHILDREN ARE SET TLED ABROAD. AS PER AGREEMENT ASSESSEE HAD SOLD FITTING AND FIXTURE SEPARATELY WO RTH RS.10 LAKHS. HENCE, FROM PERSONAL EFFECTS OF RS.10 LAKHS, RS.3 LAKHS IS CONS IDERED FOR FURNITURE AND FIXTURE AND BALANCE FURNITURE ARE MOVEABLE ASSETS USED BY A PPELLANT FOR PERSONAL USE. THUS TOTAL SALE CONSIDERATION COMES TO RS.35,50,000 /- + RS.3,00,000/- I,E, EQUAL TO RS.38,50,000/-. THE INDEX COST OF ACQUISITION IS A S PER THE COMPUTATION GIVEN BY THE AR WHICH IS REPRODUCED AS UNDER: SALE CONSIDERATION RS.35,00,000/- LESS: COST OF ACQUISITION RS.13,00,000/- INITIAL MONEY PAID IN 1982-83 (15,000*551/109) RS. 75,826/- PAID ON ALLOTMENT IN 1989-90 (2,94,000*551/172) RS.9,41,826/- PAID AT THE TIME OF REGISTRATION OF CONVEYANCE DEED ALONG WITH STAMP DUTY ((32,370+21,420+100) RS.83,890/- LONG TERM CAPITAL GAIN RS.26,98,459 /- SINCE THE LADY IS STAYING ALONE IN INDIA AND CHILDR EN ARE SETTLED ABROAD. SHE IS FACING HARDSHIPS AND PAYING TAX NOW. THE ASSESSING OFFICE R MAY GIVE AN OPPORTUNITY OF BEING HEARD BEFORE GIVING EFFECT TO THIS ORDER AND VERIFY THE COMPONENTS OF COST OF IMPROVEMENT AND PURCHASE COST OF THE FLAT FROM DDA. I HAVE VERI FIED THE EVIDENCES FILED BY THE APPELLANT CAREFULLY, BUT ASSESSING OFFICER SHOULD S ATISFY HIMSELF BEFORE FINALIZING THE APPELLATE ORDER AND CHARGE INTEREST AS PER LAW. 5. AGGRIEVED BY THE ORDER OF CIT(A), DEPARTMENT HAS COME UP IN APPEAL AND CHALLENGED THE ACTION OF THE CIT(A) RAISING VARIOUS GROUNDS AND LD.DR WHILE REITERATING THE PLEAS RAISED IN THE GROUNDS OF APPEAL HAS PLEAD ED FOR SETTING ASIDE THE ORDER OF THE CIT(A) AND RESTORING THAT OF THE ASSESSING OFFICER. LD.DR, WHEN ASKED TO SHOW OR INDICATE ANY INFIRMITY OR FLAW IN THE ORDER PASSED BY THE CIT(A), HE JUST RELIED UPON THE ORDER OF THE ASSESSING OFFICER, WHEREAS LD.AR OF TH E ASSESSEE SUBMITTED THAT CIT(A) HAS I.T.A. NO.4951/DEL./2012 (A.Y. : 2008-09) 5 PASSED VERY DETAILED REASONED AND ELABORATE ORDER C ONSIDERING EACH AND EVERY ASPECT OF THE MATTER GIVING VALID REASONS. THEREFORE, HIS OR DER IS LIABLE TO BE CONFIRMED. IT WAS THUS PLEADED FOR CONFIRMATION OF THE IMPUGNED ORDER . 6. WE HAVE HEARD BOTH THE SIDES, CONSIDERED THE MAT ERIAL ON RECORD AND FIND THAT CIT(A) HAS PASSED A JUST AND APPROPRIATE ORDER AFTE R SEEKING APPROPRIATE DETAILS AND REPLY TO VARIOUS QUERIES IN A TABULAR FORM AGAINST EACH A NY POINT RAISED IN ASSESSMENT ORDER AND NEITHER ANY INFIRMITY OR FLAW HAS BEEN POINTED OUT BY THE LD.DR., NOR NOTICED BY THIS BENCH. CONSIDERING THE ENTIRETY OF FACTS, CIRCUMST ANCES AND MATERIAL ON RECORD, WE DO NOT FIND ANY JUSTIFIABLE REASON TO INTERFERE IN THE ORD ER PASSED BY THE CIT(A), WHICH IS CONFIRMED AND APPEAL OF THE DEPARTMENT BEING DE VOI D OF ANY MERITS IS DISMISSED. 7. AS A RESULT, THE APPEAL FILED BY THE DEPARTMENT GETS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 31.05.2012. SD/- SD/- (A.N. PAHUJA) ACCOUNTANT MEMBER (U.B.S. BEDI ) JUDICIAL MEMBER DATED : MAY 31, 2012 SKB COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A)-XXX NEW DELHI. 5. CIT(ITAT) DEPUTY REGISTRAR, ITAT I.T.A. NO.4951/DEL./2012 (A.Y. : 2008-09) 6