ACIT, Ghaziabad V. Surendra Singh, Ghaziabad

ITA 517/DEL/2012

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4851 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 28-02-2017
• Assessment Year: 2005-2006
• Appeal Filed On: 02-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MANISHA KINNU
• Keywords: Sale consideration of property below Jantri Value
• Section: 50C; 69; 148; 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G NEW DELHI BEFORE SHRI G.D. AGRAWAL, HONBLE PRESIDENT AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO. 517/DEL/2012 AY: 20 05-06 ACIT, CIRCLE-2, GHAZIABAD. VS SURENDRA SINGH, B-113, LOHIA NAGAR, GHAZIABAD. (PAN: ABZPS0425P) APPELLANT BY: SHRI M.P. RASTOGI, ADV. RESPONDENT BY : MS MANISHA KINNU, SR. DR DATE OF HEARING 11.08.2017 DATE OF PRONOUNCEMENT 30.08.2017 ORDER PER SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER THIS APPEAL HAS BEEN PREFERRED BY THE DEPARTMENT AG AINST THE ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - GHAZIABAD VIDE ORDER DATED 22 ND OF NOVEMBER 2011 AND PERTAINS TO ASSESSMENT YEAR 2005 2006. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE RETURN OF INCOME WAS FILED AT A TOTAL INCOME OF RS. 17,07,868/-. THE RET URN WAS INITIALLY PROCESSED UNDER SECTION 143 (1) OF THE INCOME TAX A CT, 1961 (HEREINAFTER CALLED THE ACT). THE AO RECEIVED AIR INFORMATION ITA 517/DEL/2012 ASSESSMENT YEAR 2005-06 2 REGARDING INVESTMENT OF RS. 42,52,000/- BY THE ASSE SSEE TOWARDS PURCHASE OF PROPERTY AT KHURJA ON 16/09/2004. AS TH E ASSESSEE HAD NOT DISCLOSED ANY SUCH INVESTMENT IN THE PROPER TY, THE ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 148 O F THE ACT. THE AO PROPOSED TO MAKE ADDITION UNDER SECTION 69B OF THE ACT ON THE AMOUNT ALLEGEDLY INVESTED BUT NOT RECORDED IN THE B OOKS OF ACCOUNT. THE ASSESSEE RESPONDED THAT THE ASSESSEE HAD PURCHA SED THE LAND VIDE REGISTERED SALE DEED DATED 16 TH OF SEPTEMBER 2004 FOR RS. 7,70,000/- WHEREAS THE VALUE AS PER THE CIRCLE RATE WAS RS. 42,52,000/-. IT WAS FURTHER SUBMITTED THAT THE ASSE SSEE HAD PAID FULL AMOUNT OF STAMP DUTY OF RS. 4,25,200/- AND, TH EREFORE, THE TOTAL VALUE OF PROPERTY APPEARING IN THE BOOKS OF A CCOUNTS AMOUNTED TO RS. 12,10,000/-. IT WAS FURTHER SUBMITT ED THAT THE ASSESSEE HAD PAID THE PURCHASE PRICE OF RS. 7,70,00 0/- IN CASH WHICH WAS DULY MENTIONED IN THE SALE DEED. IT WAS F URTHER SUBMITTED THAT THE VALUE AS PER THE CIRCLE RATE HAD NO RELEVANCE FOR THE PURPOSE OF SECTION 69B AND IT ONLY HAD RELEVANC E FOR DETERMINING THE SALE PRICE IN CASE OF THE SELLER AN D WHERE THE PROVISIONS OF SECTION 50C WERE TO BE APPLIED. IT WA S ALSO SUBMITTED THAT IN CASE OF THE PURCHASER, THE VALUE OF CONSIDE RATION DID NOT ITA 517/DEL/2012 ASSESSMENT YEAR 2005-06 3 DEPEND UPON THE MARKET VALUE OF THE PROPERTY BUT ON LY ON THE CONSIDERATION AS MENTIONED IN THE SALE DEED. THE AS SESSEE ALSO SUBMITTED THAT THE AO HAD NOT BROUGHT ANY DOCUMENT, RECORD OR EVIDENCE TO SUGGEST THAT THE ASSESSEE HAD PAID CONS IDERATION MORE THAN WHAT HAD BEEN STATED IN THE SALE DEED. HOWEVER , THE AO WAS NOT SATISFIED WITH THE REPLY OF THE ASSESSEE AND HE DEPUTED INSPECTOR OF INCOME TAX MAKE ENQUIRIES REGARDING TH E AVERAGE MARKET VALUE OF THE PLOT PURCHASED BY THE ASSESSEE. BASED ON SUCH ENQUIRY REPORT AS WELL AS ENQUIRIES FROM THE TEHSILDARS OF ADJOINING THE TEHSILS , THE AO PROCEEDED TO ADD AN AMOUNT OF RS. 34,82,00 0/- TO THE TOTAL INCOME OF THE ASSESSEE AND COMPLETED T HE ASSESSMENT AT RS. 55,49,868/-. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. FIRST APPELLATE AUTHORITY WHO DELETED THE A DDITION. NOW THE DEPARTMENT HAS APPROACHED THE ITAT AND HAS CHALLENG ED THE DELETION OF ADDITION BY THE LD. CIT (APPEALS). 3. AT THE OUTSET, THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT THE APPLICATION FILED UNDER RULE 27 OF THE INCOME T AX APPELLATE TRIBUNAL RULES FILED BY THE ASSESSEE WAS NOT BEING PRESSED. WE ACCORDINGLY DISMISS THE APPLICATION FILED BY THE AS SESSEE. ITA 517/DEL/2012 ASSESSMENT YEAR 2005-06 4 4. THE LD. DEPARTMENTAL REPRESENTATIVE READ OUT EXT ENSIVELY FROM THE ORDER OF ASSESSMENT AND VEHEMENTLY ARGUED THAT THE ASSESSING OFFICER HAD MADE ELABORATE ENQUIRIES FROM THE LOCAL PROPERTY DEALERS AND BASED ON THE INFORMATION SO GATHERED IT WAS CON CLUSIVE THAT THE RATE OF THE PROPERTY IN THAT AREA WAS MUCH MORE THA N THAT MENTIONED IN THE PURCHASE DEED. IT WAS ALSO SUBMITT ED THAT THERE WAS A REASONABLE INFERENCE THAT THE ASSESSEE HAD PA ID AN AMOUNT WHICH WAS MUCH MORE THAN WHAT HAD BEEN DISCLOSED IN THE SAID PURCHASE DEED. IT WAS FURTHER SUBMITTED THAT EVEN T HE ASSESSEE HAD PAID THE STAMP DUTY ON THE CIRCLE RATE AND HAD NOT CONTESTED THE SAME AND, THEREFORE, IT WAS AN ACCEPTANCE BY THE AS SESSEE OF THE FACT THAT THE INVESTMENT MADE BY THE ASSESSEE WAS M UCH MORE THAN WHAT WAS REFLECTED IN THE BOOKS OF ACCOUNTS. IT WAS ALSO SUBMITTED THAT THE CIRCLE RATE WAS AN ADEQUATE YARDSTICK FOR MEASURING THE DIFFERENCE. THE LD. SENIOR DR ALSO SUBMITTED THAT I T WAS INCUMBENT UPON THE LD. CIT (APPEALS) TO HAVE MADE ADEQUATE EN QUIRIES BEFORE HAVING DELETED THE ADDITION. 5. THE LD. AUTHORISED REPRESENTATIVE, IN RESPONSE, SUBMITTED THAT THE PROVISIONS OF SECTION 69B WERE NOT APPLICABLE T O THE FACTS OF THE ITA 517/DEL/2012 ASSESSMENT YEAR 2005-06 5 CASE. IT WAS SUBMITTED THAT THE AO HAD MADE THE IMP UGNED ADDITION BEING THE DIFFERENCE OF THE MARKET VALUE A DOPTED BY THE REGISTRATION AUTHORITIES FOR THE PURPOSE OF LEVY OF STAMP DUTY AND THE ACTUAL AMOUNT OF SALES CONSIDERATION SHOWN IN T HE SALES DEED WITHOUT BRINGING ANY MATERIAL ON RECORD WHICH WOULD SUGGEST THAT THE ASSESSEE HAD PAID THE AMOUNT OVER AND ABOVE THE ACTUAL AMOUNT OF SALE CONSIDERATION AS SHOWN IN THE SALE D EED. IT WAS SUBMITTED THAT IN ABSENCE OF ANY POSITIVE MATERIAL, ADDITION CANNOT BE SIMPLY MADE ON THE BASIS OF THE MARKET VALUE ADO PTED BY THE REGISTRATION AUTHORITIES FOR THE PURPOSE OF PAYMENT OF STAMP DUTY. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT UN DER SECTION 69 B OF THE ACT, ADDITION CAN BE MADE BY THE AO ONLY I F IT HAS BEEN FOUND BY THE AO THAT THE ASSESSEE HAS SPENT AN AMOU NT IN THE ACQUISITION OF ANY PROPERTY WHICH MORE THAN THE AMO UNT RECORDED IN THE BOOKS OF ACCOUNT BUT SUCH FINDING OF THE AO MUST BE BASED ON CONCRETE MATERIAL WHICH WOULD SUGGEST THAT SUCH AN AMOUNT HAS BEEN SPENT OVER AND ABOVE THE CONSIDERATION RECORDE D IN THE BOOKS OF ACCOUNT. THE LD. AUTHORISED REPRESENTATIVE ALSO SUBMITTED THAT BEFORE TAXING ANY PERSON IT IS TO BE SHOWN TO THE A SSESSEE THAT HE FELL WITHIN THE AMBIT OF THE CHARGE IN THE SECTION BY CLEAR WORDS ITA 517/DEL/2012 ASSESSMENT YEAR 2005-06 6 USED IN THE SECTION. IT WAS SUBMITTED THAT NO ONE C AN BE TAXED BY IMPLICATION. THE LD. AUTHORISED REPRESENTATIVE ALSO SUBMITTED THAT THE REPORT OBTAINED BY THE INCOME TAX INSPECTOR, AS REFERRED TO BY AND RELIED UPON BY THE AO, WAS ALSO NOT ADMISSIBLE IN LAW BECAUSE SUCH REPORT HAD BEEN OBTAINED BY THE AO BEHIND THE BACK OF THE ASSESSEE AND HAD NOT BEEN BROUGHT TO THE NOTICE OF THE ASSESSEE DURING THE COURSE OF ASSESSMENT AND WAS, HENCE, OF NO EVIDENTIARY VALUE. IT WAS SUBMITTED THAT IN LIGHT OF THE SETTLE D JUDICIAL POSITION, THE IMPUGNED ORDER SHOULD BE UPHELD. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE ALS O PERUSED THE RELEVANT MATERIAL ON RECORD. THE LD. CIT (APPEA LS) HAS DELETED THE ADDITION BY OBSERVING THAT THERE WAS NO MERIT I N THE ADDITION MADE BY THE AO AS THERE WAS NO PROVISION IN THE ACT WHICH COULD HAVE HELPED THE AO TO REACH A CONCLUSION THAT THE D IFFERENCE BETWEEN THE VALUE OF THE PROPERTY AS PER THE STAMP DUTY ACT AND THE VALUE OF THE PROPERTY AS PER THE PURCHASE DEED CAN BE STRAIGHT AWAY CONSTRUED TO HAVE BEEN PAID BY THE ASSESSEE IN EXCESS OF WHAT HAS BEEN DECLARED IN THE PURCHASE DEED. THE LD. CIT (APPEALS) HAS NOTED THAT IN ABSENCE OF ANY SPECIFIC INCRIMINATING EVIDENCE ITA 517/DEL/2012 ASSESSMENT YEAR 2005-06 7 BROUGHT ON RECORD BY THE AO, THE LEGALLY DECLARED C ONSIDERATION HAS TO BE ACCEPTED. THE LD. CIT (APPEALS) HAS GIVEN A F INDING THAT THERE WAS NO MATERIAL WITH THE AO WHICH COULD DISPROVE TH E CLAIM OF THE ASSESSEE AND, THEREFORE, THE ADVERSE CONCLUSION REA CHED BY THE AO WAS NOT WARRANTED. THE LD. CIT (APPEALS) HAS FURTHE R NOTED THAT THE SUBSTANTIAL DIFFERENCE BETWEEN THE VALUE AS WORKED OUT BY THE REGISTRATION AUTHORITIES AND THE VALUE OF PURCHASE AS DECLARED BY THE ASSESSEE CAN AT BEST BE A STARTING POINT FOR AN Y FURTHER INQUIRY/INVESTIGATION BUT CANNOT BE THE SOLE BASIS FOR ANY ADDITION. THE LD.CIT (APPEALS) HAS ALSO POINTED OUT THAT THE AO HAS NOT PROVED ANY UNDERHAND DEALING AND, THEREFORE, THE AD DITION WAS NOT TENABLE IN THE HANDS OF THE ASSESSEE PURCHASER. THE LD. CIT (APPEALS) HAS ALSO OBSERVED THAT IN CASE OF DIFFERE NCE THERE WAS A SPECIFIC PROVISION CONTAINED IN SECTION 50C OF THE INCOME TAX ACT WHICH APPLIED TO THE SELLER AND THAT THE AO WOULD B E ADVISED TO ENSURE THAT APPLICATION OF SECTION 50C WAS MADE IN THE CASE OF THE SELLER. THIS BEING THE FACTUAL POSITION AND THE LEG AL POSITION WHICH HAS BEEN LUCIDLY DISCUSSED BY THE LD. CIT (APPEALS) AND FURTHER BUTTRESSED BY THE FACT THAT THE DEPARTMENT COULD NO T LEAD ANY FURTHER EVIDENCE TO THE CONTRARY EVEN BEFORE US, WE ARE UNABLE TO ITA 517/DEL/2012 ASSESSMENT YEAR 2005-06 8 AGREE WITH THE CONTENTIONS OF THE LEARNED SENIOR DE PARTMENTAL REPRESENTATIVE AND HAVE NO HESITATION IN UPHOLDING THE ORDER OF THE LEARNED CIT (APPEALS). OUR VIEW ALSO FINDS SUPPORT FROM THE ORDER OF THE ITAT JAIPUR BENCH IN THE CASE OF ACIT VERSUS SW AMI COMPLEX (PRIVATE) LIMITED IN ITA NO. 449/JP/2005 REPORTED I N 111 TTJ 531 WHEREIN THE ITAT JAIPUR BENCH WAS PLEASED TO HOLD T HAT IN ABSENCE OF ANY POSITIVE EVIDENCE THAT THE ASSESSEES HAD ACT UALLY PAID MORE THAN THE CONSIDERATION SHOWN IN THE RESPECTIVE SALE DEEDS FOR THE PURCHASE OF PLOTS, ADDITION UNDER SECTION 69 COULD NOT BE MADE SIMPLY ON THE BASIS OF HIGHER VALUATION OF THE PLOT S EITHER BY THE DVO OR THE VALUES ADOPTED BY THE SUB-REGISTRAR OR T HE REVENUE BOARD FOR THE PURPOSE OF STAMP DUTY. 7. IN THE FINAL RESULT THE APPEAL OF THE DEPARTMENT STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH AUGUST, 2017. SD/- SD/- (G.D. AGRAWAL) (SUDHANSHU SRIVASTAVA) PRESIDENT JUDICIAL MEMBER DT. 30 TH AUGUST 2017 GS ITA 517/DEL/2012 ASSESSMENT YEAR 2005-06 9 COPY FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR BY ORDER ASSTT. REGISTRAR