Pavitra P. Walvekar, Pune V. Commissioner of Income-tax - IV,

ITA 499/PUN/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 0999 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 5 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 31-08-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 13-03-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: NARENDRA KUMAR
• Keywords: Sale consideration of property below Jantri Value; Cost of acquisition
• Section: 50C; 263

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE . . , ! , # $ BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.499/PN/2014 #& & / ASSESSMENT YEAR : 2007-08 SMT. PAVITRA P. WALVEKAR, 503, PECAN, MARIGOLD, PHASE-II, KALYANI NAGAR, PUNE 411 014 PAN :AAVPW9107B . / APPELLANT V/S CIT - IV , PUNE . /RESPONDENT / ASSESSEE BY : NONE / RESPONDENT BY : SHRI NARENDRA KUMAR, CIT / ORDER PER R.K.PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 26-12-2013 PASSED U/S.263 OF THE I.T. ACT BY THE CIT-IV, PUNE RELATING TO ASSESSMENT YEAR 2007-08. 2. THIS APPEAL WAS FIRST FIXED FOR HEARING ON 30-07-2015 A ND SINCE THEN THE APPEAL WAS GETTING ADJOURNED FROM TIME TO TIME. ON 01-03-2016, THE LD. COUNSEL FOR THE ASSESSEE SOUGHT AD JOURNMENT FOR WHICH THE CASE WAS ADJOURNED TO 11-05-2016. THE L D. COUNSEL FOR THE ASSESSEE APPEARED ON 11-05-2016 AND AGAIN SOU GHT ADJOURNMENT FOR WHICH THE CASE WAS ADJOURNED TO 20-0 7-2016. ON 20-07-2016, THE LD. COUNSEL FOR THE ASSESSEE WITHDREW H IS POWER OF / DATE OF HEARING :31.08.2016 / DATE OF PRONOUNCEMENT:31.08.2016 2 ITA NO.499/PN/2014 ATTORNEY AND THE CASE WAS ADJOURNED TO 31-08-2016. ALTHOUGH NOTICE WAS ISSUED THROUGH RPAD ON THE ADDRESS GIVEN BY THE ASSESSEE, HOWEVER, THE SAME WAS RETURNED BY THE POSTA L AUTHORITIES WITH REMARKS UNCLAIMED. THEREFORE, THE MATTER IS BEING DECIDED ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AND AFTER HEARING THE LD. DEPARTMENTAL REPRESENTATIVE. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS AN INDIVIDUAL. IN THIS CASE, INFORMATION WAS RECEIVED FROM THE INVESTIGATION WING THAT ALTHOUGH THE ASSESSEE HAD TAXAB LE INCOME OF RS.77,95,550/- ON ACCOUNT OF SHORT TERM CAPITAL GAIN AND LO NG TERM CAPITAL GAIN THE ASSESSEE HAD NOT FILED ANY RETURN OF INCOME. THE AO THEREAFTER INITIATED PROCEEDINGS U/S.147 AND ISSUED NOTICE U/S.148 OF THE I.T. ACT, 1961. IN RESPONSE TO THE NOTICE ISSUED U/S.148 THE ASSESSEE FILED RETURN DECLARING TOTAL INCOME OF RS.77,95,550/- . THE AO COMPLETED THE ASSESSMENT U/S.143(3)/147 ON 26-12-201 1 ACCEPTING SUCH RETURNED INCOME. 3.1 SUBSEQUENTLY, THE LD.CIT, ON EXAMINATION OF THE RECORD S, NOTICED THAT THE COMPUTATION OF INCOME FILED BY THE ASSESS EE SHOWED SHORT COMPUTATION OF SHORT TERM CAPITAL GAIN BY AN AMOUN T OF RS.12,98,500/-. HE OBSERVED THAT THE ASSESSEE, WHILE COMP UTING SHORT TERM CAPITAL GAIN OF RS.65,11,500/-, HAS CONSIDERED T HE COST OF ACQUISITION OF THE PROPERTY AT RS.15,23,500/- WHEREAS THE SALE DEED PLACED ON RECORD SHOWS COST OF ACQUISITION OF THE SAID PR OPERTY IN ASSESSEES HAND AT RS.2,25,000/- ONLY. HE, THEREFORE, ISS UED A NOTICE U/S.263 ASKING THE ASSESSEE TO EXPLAIN AS TO WHY THE ORDER PASSED U/S.143(3)/147 SHOULD NOT BE SET ASIDE. AFTER CONS IDERING THE SUBMISSIONS MADE BY THE ASSESSEE FROM TIME TO TIME T HE LD.CIT 3 ITA NO.499/PN/2014 NOTED THAT NO ENQUIRY WAS CONDUCTED BY THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS. EVEN THE AUTHORISED REPRESENT ATIVE OF THE ASSESSEE HAD ALSO CONFIRMED BEFORE HIM THAT NO ENQUIRIES W ERE CONDUCTED BY THE AO. FURTHER, THE AO ISSUED NOTICE U/S .148 FOR WHICH THE REASONS WERE RECORDED ON 28-02-2011. ALTHOU GH THE RETURN WAS TO BE FILED WITHIN 30 DAYS FROM THE DATE OF SER VICE OF NOTICE BUT THE ASSESSEE FILED THE RETURN ON 01-12-2011 FOR WHICH THE TIME BARRING DATE FOR COMPLETION OF ASSESSMENT WAS 31-12- 2012. THE ORDER SHEET ENTRY DATED 23-12-2011 SHOWS THAT T HE AUTHORISED REPRESENTATIVE OF THE ASSESSEE APPEARED ON 23-12-2011 AND SUBMITTED CERTAIN DETAILS AND THE ORDER WAS PASSED ON 2 6-12-2011, I.E. WITHIN 3 DAYS OF THE SOLITARY HEARING CLEARLY SUGGESTS T HAT THIS IS A CASE OF MIS-APPLICATION OF MIND AND LAW AS WELL AS LACK OF EN QUIRY ON THE PART OF THE AO. RELYING ON VARIOUS DECISIONS THE LD.CIT HELD THAT MISTAKE ON THE PART OF THE AO TO CARRY OUT THE R EQUISITE VERIFICATION/ENQUIRIES AND ACCEPTING THE WORKING OF THE SHOR T TERM CAPITAL GAIN AS OFFERED BY THE ASSESSEE HAVE RENDERED TH E ASSESSMENT ORDER ERRONEOUS AND PREJUDICIAL TO THE INTER EST OF THE REVENUE. HE THEREFORE HELD THAT THE ORDER DATED 26-12 -2011 IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE . HE ACCORDINGLY SET ASIDE THE SAME. 4. AGGRIEVED WITH SUCH ORDER OF THE CIT THE ASSESSEE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT-IV, PUNE HAD JUSTIFIED IN PASSING THE ORDER U/ S.263 OF THE INCOME TAX ACT, 1961 HOLDING THAT THE ASSESSMENT ORDER DATED 26-12- 2011 PASSED BY AO AND TRO, RANGE-7, PUNE AGAINST THE P ETITIONER, IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE AND ACCORDINGLY HAS SET IT ASIDE. DESPITE THE FACT THAT ASSESSEE HAS SUBMITTED ALL THE REQUISITE PARTICULARS AND BANK STATEMENT AND ALL OTHER RELEVANT INFORMATION TO THE AO. 4 ITA NO.499/PN/2014 2. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTER ANY OF THE ABOVE GROUNDS OF APPEAL. 5. WE HAVE HEARD THE LD. CIT-DR AND PERUSED THE MATE RIAL AVAILABLE ON RECORD. AFTER HEARING THE LD. DEPARTMENTAL REPRESENTATIVE AND PERUSAL OF THE ORDER OF THE AO WE DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED U/S.263 BY THE LD.CIT. ADMITT EDLY, THE AO HAS NOT CONDUCTED ANY ENQUIRY AND HAS SIMPLY ACCEP TED THE SHORT TERM CAPITAL GAIN COMPUTED BY THE ASSESSEE AND P ASSED THE ORDER WITHIN 3 DAYS FROM THE DATE OF IST APPEARANCE OF T HE AUTHORISED REPRESENTATIVE. THE VARIOUS FACTS BROUGHT ON RECORD BY THE LD.CIT SHOWS THAT THE AO HAS NOT ALL APPLIED HIS MIND AND ALLOWED THE CLAIM OF SHORT TERM CAPITAL GAIN DECLARED BY THE ASSESSEE WITHOUT EVEN GOING THROUGH THE DOCUMENTS, BANK ACCOUNT S WHICH WERE REQUIRED TO BE VERIFIED. FURTHER, THE LD.CIT HAS ALSO STATED THA T THE AO HAD FAILED TO CARRY OUT INDEPENDENT VERIFICATION OF T HE FOLLOWING POINTS : 1. WITH REGARD TO THE DEPOSITS AND WITHDRAWALS OUT OF THE BANK ACCOUNT MAINTAINED WITH THE J & K BANK, MG ROAD, PU NE ESPECIALLY WITH REGARD TO THE CASH DEPOSITS AND THE SOURCE THEREOF 2. THAT AS TO HOW THE ASSESSING OFFICER ACCEPTED THE COST OF ACQUISITION OF THE PROPERTY AS PER SECTION 50C I.E. FO R RATE FOR STAMP DUTY PURPOSES WHEREAS THE PROVISIONS OF SECTION 50C ARE APPLIC ABLE TO THE VALUE OF CONSIDERATION ON ACCOUNT OF SALE 3. THAT THE ASSESSING OFFICER FAILED TO NOTE THAT THE MODE OF COMPUTATION OF CAPITAL GAINS AS PER SECTION 48 AND COST OF ACQUISITION AS PER SECTION 49 OF THE ACT CLEARLY GOES AGAINST THE WOR KING OF CAPITAL GAINS GIVEN BY THE ASSESSEE TO THE ASSESSING OFFICER DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS 4. THAT THE ASSESSING OFFICER FAILED TO NOTE THE EXISTEN CE OF MOU DATED 06.09.2006 VIDE WHICH THE PROPERTY LOCATED AT SHIVAJINAGAR WAS TO BE SOLD AT RS.3,01,27,500/- AS AGAINST WHICH THE PRO PERTY WAS SOLD AT MUCH LESSER PRICE AT RS.2,00,95,000/- VIDE SALE AGREEM ENT DATED 03.11.2006 & 5 ITA NO.499/PN/2014 5. THAT NO REFERENCE IS MADE TO VERIFY THE VALUATION OF THE PROPERTY AS ON THE DATE OF SALE TO DETERMINE THE ADEQUACY OF THE SALE CONSIDERATION AND ESPECIALLY IN VIEW OF THE FACT OF EXISTENCE OF MOU DATED 06.09.2006. 6. IN VIEW OF THE ABOVE, WE ARE OF THE CONSIDERED OPINION THAT THIS IS A CASE WHERE NO PROPER ENQUIRY HAS BEEN CONDUCTED BY THE AO BEFORE COMPLETION OF THE ASSESSMENT FOR WHICH THE ORDER PASSED BY THE AO HAS BECOME ERRONEOUS AS WELL AS PREJUDICIAL TO TH E INTEREST OF THE REVENUE. THEREFORE, THE PROVISIONS OF SECTION 263 HAV E BEEN RIGHTLY INVOKED BY THE LD.CIT IN THE INSTANT CASE. WE, T HEREFORE, UPHOLD THE SAME AND THE GROUNDS RAISED BY THE ASSESSE E ARE DISMISSED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEA RING ITSELF, I.E. ON 31-08-2016 SD/- SD/- (VIKAS AWASTHY) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE; ' DATED :31 ST AUGUST, 2016. ) *#,! -!/ COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3 . THE ADDL.CIT, RANGE - 7, PUNE 4. $ ''( , ( , / DR, ITAT, B PUNE; 5 . + / GUARD FILE. / BY ORDER, // TRUE COPY // // $ ' //TRUE -. ' ( / SR. PRIVATE SECRETARY ( , / ITAT, PUNE