Kewal Krishna Loroiya, Lucknow V. Income Tax Officer-I(2), Lucknow

ITA 521/LKW/2013

• Counselvise Citation: 52123714 RSA 2013
• Duration Of Justice: 1 year(s) 9 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-04-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 09-03-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 08-07-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: PUNEET KUMAR
• Keywords: Sale consideration of property below Jantri Value; Cost of acquisition; Fair market value; Valuation report
• Section: 50C

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.521/LKW/2013 ASSESSMENT YEAR:2009 - 10 INCOME TAX OFFICER - 1(2), LUCKNOW. VS SHRI KEWAL KRISHNA LOROIYA, 5/3, MALVIYA NAGAR, AISHBAGH, LUCKNOW. PAN:ACTPL1437B (RESPONDENT) (APPELLANT) SHRI J. J. MEHROTRA, C. A. APPELLANT BY SHRI PUNEET KUMAR, D.R. RESPONDENT BY 09/03/2015 DATE OF HEARING 16 /04/2015 DATE OF PRONOUNCEMENT O R D E R PER A. K. GARODIA, A.M. THIS IS ASSESSEES APPEAL DIRECTED AGAINST THE ORDER PASSED BY LEARNED CIT(A) - I, LUCKNOW DATED 15/05/2013 FOR THE ASSESSMENT YEAR 2009 - 2010. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW THE LD. C.I.T.(A) IS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS.19,64,221/ - MADE BY THE LD. ASSESSING OFFICER U/S 50C OF THE I.T. ACT. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LA W THE LD. C.I.T.(A) IS NOT JUSTIFIED IN REJECTING THE CLAIM OF THE APPELLANT WITH REFERENCE TO COST OF ACQUISITION OF THE ASSET FOR WORKING OUT THE CAPITAL GAINS CHARGEABLE UNDER THE ACT. 3. THAT THE LD. C.I.T. (A) HAS FAILED TO APPRECIATE THE FACT THAT T HE APPELLANT HAD FILED OBJECTIONS TO THE REPORT OF THE D.V.O. U/S 50C(3) OF THE I.T. ACT WHICH HAVE NOT BEEN 2 REBUTTED NOR AN OPPORTUNITY WAS ALLOWED TO THE APPELLANT TO CROSS EXAMINE D.V.O. AND AS SUCH THE ADOPTION OF THE VALUE OF THE HOUSE PROPERTY AS ASS ESSED FOR STAMP DUTY PURPOSES FOR WORKING OUT THE CAPITAL GAINS IS ON ARBITRARY BASIS AND NOT TENABLE IN LAW. 4. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE ID. C.I.T.(A) IS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS.8,81,00 0/ - ON ACCOUNT OF UNEXPLAINED CASH DEPOSIT IN THE HANDS OF THE APPELLANT. 5. THAT THE ID. C.I.T. (A) HAS FAILED TO APPRECIATE THAT THE APPELLANT HAS BEEN CARRYING ON BUSINESS FOR THE LAST MORE THAN 40 YEARS AND AS SUCH IS NOT JUSTIFIED IN CONFIRMING THE A DDITION OF RS.8,81,000/ - REPRESENTING DEPOSIT IN THE BANK ACCOUNT OF THE APPELLANT BY TREATING THE SAME TO BE UNEXPLAINED ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW. 6. THAT IN ANY VIEW OF THE MATTER THE ADDITION OF RS.8,81,000/ - ON ACCO UNT OF UNEXPLAINED DEPOSIT MADE BY THE ID. ASSESSING OFFICER AND CONFIRMED BY THE LD. C.I.T.(A) IS UNJUST AND UNCALLED FOR, ALTERNATIVELY HIGHLY EXCESSIVE. 7. THAT THE ORDER PASSED BY THE ID. C.I.T.(A) IS AGAINST THE MERITS, CIRCUMSTANCES AND LEGAL ASPECT S OF THE CASE. 3. LEARNED A .R. OF THE ASSESSEE SUBMITTED THAT ADDITIONAL GROUND IS ALSO RAISED ON 24/12/2013 AND THE SAME IS REPRODUCED BELOW: THAT WITHOUT PREJUDICE, IN ANY VIEW OF THE MATTER, THE ADDITION OF RS.8,81,000/ - ON ACCOUNT OF UNEXPLAINED DEPOSIT IN THE BANK ACCOUNT MADE SIMULTANEOUSLY WITH ADDITION OF RS.19,64,221/ - UNDER SECTION 50C OF THE INCOME TAX ACT FOR ALLEGED UNDERSTATEMENT O F SALE CONSIDERATION OF PROPERTY TANTAMOUNT TO A DOUBLE ADDITION AND, THEREFORE, THE SAME IS NOT TENABLE IN LAW. 4. IT WAS SUBMITTED BY LEARNED A.R. OF THE ASSESSEE THAT THE D.V.O.S REPORT IS NOT CORRECT AND THE SAME SHOULD BE RE - EXAMINED. REGARDING 3 IN DEXED COST OF ACQUISITION, HE SUBMITTED THAT THE SAME SHOULD BE COMPUTED ON THE BASIS OF REPORT OF AUTHORIZED VALUER REGARDING COST AS ON 01/04/81. IN RELATION TO ADDITIONAL GROUND, HE SUBMITTED THAT EVEN IF THE ADDITION IS CONFIRMED ON ACCOUNT OF PROVISI ON OF SECTION 50C, TELESCOPING SHOULD BE ALLOWED AGAINST THE ADDITION SUSTAINED BY THE AUTHORITIES BELOW ON ACCOUNT OF ALLEGED UNEXPLAINED DEPOSIT IN THE BANK ACCOUNT. 5. AS AGAINST THIS, LEARNED D. R. OF THE REVENUE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT REGARDING THE ADDITION MADE BY THE ASSESSING OFFICER OF RS.19,64,221/ - ON ACCOUNT OF LONG TERM CAPITAL GAIN, THE ASSESSING OFFICER HAS ADOPTED SALE PROCEEDS AT RS. 40,35,560/ - ON THE BASIS OF STAMP VALUATION AS AGAINST SALE CONSIDERATION AS PER SALE DEED OF RS.32.50 LAC. THE ASSESSING OFFICER HAS ADOPTED THE INDEXED COST OF ACQUISITION AT RS.10,03,449/ - AN D INDEXED COST OF IMPROVEMENT AT RS.10,67,890/ - . REGARDING ADOPTING THE VALUE OF SALE PROCEEDS AT RS.40,35,560/ - , WE FIND THAT IT IS NOTED BY THE ASSESSING OFFICER THAT THE VALUE REPORTED BY D.V.O. WAS RS.45.70 LAC WHEREAS THE VALUE AS PER S TAMP DUTY VALU ATION WAS RS.40,35,665/ - AND THEREFORE, THE ASSESSING OFFICER ADOPTED THE VALUE AS PER STAMP DUTY VALUATION . REGARDING THIS CONTENTION OF LEARNED A.R. OF THE ASSESSEE THAT THERE IS MISTAKE IN THE REPORT OF D.V.O., WE FIND THAT APART FROM MAKING THIS BALD ASSERTION, NO MISTAKE C OULD BE POINTED OUT IN THE REPORT OF THE D.V.O. AND THEREFORE, ON THIS ASPECT, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF CIT(A). 7. REGARDING THE INDEXED COST OF ACQUISITION, AS ADOPTED BY THE ASSESSING OFFICER, WE FIN D THAT IT IS NOTED BY ASSESSING OFFICER IN THE ASSESSMENT ORDER THAT THE HOUSE WAS ORIGINALLY ALLOTTED TO THE ASSESSEE BY U.P. AVAS EVAM VIKAS PARISHAD ON 29/04/82 VIDE LETTER NO. 4265 AND SUBSEQUENTLY IT WAS 4 TRANSFERRED ON 16/06/82 IN THE NAME OF HIS WIFE SANTOSH LOROIYA. AS PER THE DETAILS OF PAYMENTS NOTED BY THE ASSESSING OFFICER ON PAGE NO. 3 & 4 OF THE ASSESSMENT ORDER, AN AMOUNT OF RS.5,000/ - WAS PAID ON 29/01/75 BUT OTHER PAYMENTS WERE MADE AFTER 12/05/82. IN THE LIGHT OF THESE FACTS, WE DO NOT FI ND ANY REASON OR BASIS TO ADOPT FAIR MARKET VALUE OF THE PROPERTY AS ON 01/04/81 BECAUSE ADMITTEDLY, THE PROPERTY WAS ACQUIRED BY THE ASSESSEE FROM U.P. AVAS EVAM VIKAS PARISHAD ON 29/04/82 BECAUSE MERE ADVANCE PAYMENT DOES NOT PROVIDE OWNERSHIP RIGHTS UNT IL THE ALLOTMENT. THE ASSESSING OFFICER HAS WORKED OUT THE INDEXED COST OF ACQUISITION AT RS.10,03,449/ - BY ADOPTING THE INDEXED COST OF THE RESPECTIVE YEAR OF PAYMENT AND NO MISTAKE COULD BE POINTED OUT BY LEARNED A.R. OF THE ASSESSEE IN THIS CALCULATION. HENCE, ON THIS ASPECT ALSO, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF CIT(A). 8. SIMILARLY THE ASSESSING OFFICER HAS WORKED OUT THE INDEXED COST OF IMPROVEMENT AT RS.10,67,890/ - . IN THIS REGARD , WE FIND THAT IT WAS CLAIMED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER THAT THE ASSESSEE HAS INVESTED FURTHER SUM OF RS.2.80 LAC IN ADDITION AND ALTERATION IN THAT HOUSE IN 1982 - 83 AND IN SUPPORT OF THIS, THE ASSESSEE HAS FURNISHED A REPORT FROM APPROVE D VALUER AS EVIDENCE. THE ASSESSING OFFICER ALSO OBTAINED REPORT OF D.V.O. IN THIS REGARD AND AS PER THIS REPORT, THE COST OF ADDITION AND ALTERATION HAS BEEN REPORTED AT RS.2 LAC. THE ASSESSING OFFICER HAS WORKED OUT THE INDEXED COST OF IMPROVEMENT AT R S.10,67,890/ - ON THE BASIS OF THIS REPORT OF D.V.O. THE ASSESSEE HAS FURNISHED A REPORT OF APPROVED VALUER REGARDING COST OF CONSTRUCTION IN 82 - 83 DATED 16/04//2013. THIS REPORT IS AVAILABLE ON PAGES 6 TO 14 OF THE PAPER BOOK. THERE IS ONE MORE REPORT O F APPROVED VALUER WITH REGARD TO THE SAME COST OF CONSTRUCTION IN 82 - 83 AND THIS REPORT IS UNDATED AND IN THIS REPORT, THE VALUE HAS BEEN REPORTED AT RS.2.79 LAC. THE REPORT OF D.V.O. WITH REGARD TO VALUE OF ADDITION/ALTERATION IS AVAILABLE ON PAGE 16 TO 5 24 OF THE PAPER BOOK AND IN THIS REPORT , THE D.V.O. HAS VALUED THE COST OF IMPROVEMENT DURING FINANCIAL YEAR 82 - 83 AT RS. 2 LAC. APART FROM THESE VALUATION REPORTS, NO OTHER EVIDENCE IS BROUGHT ON RECORD BY THE ASSESSEE IN SUPPORT OF THE CLAIM THAT THE AS SESSEE HAS INCURRED AN AMOUNT OF RS.2.80 LAC FOR IMPROVEMENT IN FINANCIAL YEAR 82 - 83. A COMPARISON OF THESE TWO REPORTS SHOWING VALUE AT RS.2 LAC AND RS.2.81 LAC IS AVAILABLE ON PAGES 10 TO 12 OF THE PAPER BOOK. BOTH THE REPORTS ARE ON THE BASIS OF IN SPE CTION OF PROPERTY BY THE RESPECTIVE VALUERS AT THE TIME OF MAKING THE REPORT AND NOBODY CAN ASCERTAIN AS TO WHETHER SUCH ITEMS WERE PROVIDED BY U.P. AVAS EVAM VIKAS PARISHAD OR IT WAS CONSTRUCTED BY THE ASSESSEE LATER ON IN FINANCIAL YEAR 82 - 83. APART FRO M THE VALUATION REPORT, NO OTHER EVIDENCE HAS BEEN BROUGHT ON RECORD BY THE ASSESSEE IN SUPPORT OF THIS CONTENTION AND SINCE THE ASSESSING OFFICER HAS ALSO ALLOWED THE COST OF IMPROVEMENT AT RS.2 LAC, WE ARE OF THE CONSIDERED OPINION THAT NO INTERFERENCE I S CALLED FOR IN THE ORDER OF CIT(A) ON THIS ISSUE ALSO. IN THIS MANNER, WE FIND THAT THE AMOUNT OF LONG TERM CAPITAL GAIN COMPUTED BY THE ASSESSING OFFICER AND CONFIRMED BY CIT(A) IS PROPER AND NO INTERFERENCE IS CALLED FOR IN THE SAME. 9. REGARDING THE ADDITION MADE BY THE ASSESSING OFFICER OF RS.8.81 LAC ON ACCOUNT OF UNEXPLAINED CASH DEPOSIT IN BANK, WE FIND THAT THIS ISSUE WAS DECIDED BY LEARNED CIT(A) AS PER PARA 6.2 OF HIS ORDER, WHICH IS REPRODUCED BELOW FOR THE SAKE OF READY REFERENCE: - 6.2 I HAVE CONSIDERED THE MATTER. THE ASSESSEE HAS NEVER FILED ANY INCOME TAX RETURN EARLIER ON THE GROUND THAT HIS INCOME IS BELLOW TAXABLE LIMIT. THERE IS NO EVIDENCE SUCH AS ANY SALES TAX RECORD, BILLS, VOUCHERS, BANK STATEMENTS ETC. WHICH COULD SUBSTANTIAT E THE CLAIM OF THE APPELLANT THAT HE WAS DOING THE BUSINESS OF SUPPLY OF FUEL WOOD TO THE SUGAR FACTORIES FOR LAST 40 - 45 YEARS AND WAS HAVING CAPITAL OF RS.25 LACS INVESTED IN SUCH BUSINESS. IN VIEW OF THE ABOVE, THE EXPLANATION FURNISHED BY THE APPELLANT IS NOT PLAUSIBLE. I ALSO FIND THAT THE AO HAS ALLOWED HIM BENEFIT OF CASH DEPOSIT OF RS.2 LACS MADE 6 OUT OF SUCH BUSINESS FUND. SINCE THERE IS NO INFIRMITY IN THE ORDER OF THE AO I CONFIRM THE ADDITION OF RS.8.81 LACS MADE BY THE AO. 9.1 FROM THE ABOVE PA RA FROM THE ORDER OF CIT(A), WE FIND THAT A CLEAR FINDING HAS BEEN GIVEN BY CIT(A) THAT THE A SSESSEE HAS NEVER FILED ANY INCOME TAX RETURN EARLIER ON THE GROUND THAT HIS INCOME IS BELLOW TAXABLE LIMIT. HE HAS ALSO GIVEN A FINDING THAT T HERE IS NO EVIDENCE SUCH AS ANY SALES TAX RECORD, BILLS, VOUCHERS, BANK STATEMENTS ETC. WHICH COULD SUBSTANTIATE THE CLAIM OF THE APPELLANT THAT HE WAS DOING THE BUSINESS OF SUPPLY OF FUEL WOOD TO THE SUGAR FACTORIES FOR LAST 40 - 45 YEARS AND WAS HAVING CAPITAL OF RS.25 LACS INVESTED IN SUCH BUSINESS. A SPECIFIC QUERY WAS RAISED BY THE BENCH IN COURSE OF HEARING THAT IF THE ASSESSEE WAS HAVING INCOME IN EARLIER YEARS, THE ASSESSEE HAS TO GIVE THE DETAILS OF SUCH INCOME AND THE ASSESSEE SHOULD ALSO SHOW THE DRAWINGS FOR HOUS E HOLD EXPENSES AND THEN ONLY IT CAN BE DETERMINED AS TO WHETHER THE ASSESSEE CAN HAVE ANY SURPLUS AVAILABLE WITH HIM FOR DEPOSITING IN BANK. THE ASSESSEE COULD NOT SUBMIT ANY SUCH DETAILS REGARDING INCOME AND HOUSE HOLD EXPENSES IN EARLIER YEARS. IN SPI TE OF THIS, WE FIND THAT THE ASSESSING OFFICER HAS ALLOWED BENEFIT OF PAST SAVINGS TO THE EXTENT OF RS.2 LAC. IN OUR CONSIDERED OPINION, THE RELIEF ALLOWED BY THE ASSESSING OFFICER ON ACCOUNT OF OPENING CASH IS REASONABLE AND THEREFORE, THE ADDITION MADE BY THE ASSESSING OFFICER OF RS.8.81 LAC IS JUSTIFIED AND NO INTERFERENCE IS CALLED FOR IN THE ORDER OF CIT(A). 10. REGARDING ADDITIONAL GROUND RAISED BY THE ASSESSEE, WE FIND THAT THE ADDITION UNDER CAPITAL GAIN HAS BEEN MADE BY THE ASSESSING OFFICER ON T HE BASIS OF DIFFERENCE BETWEEN SALE CONSIDERATION AS PER SALE DEED AND SALE VALUE AS PER STAMP DUTY RATE, WHICH IS TO THE EXTENT OF RS.7,85,560/ - . SINCE THIS AMOUNT WAS NOT RECEIVED BY THE ASSESSEE IN CASH AND THIS IS AN ADDITION ON DEEMING BASIS, THE ASS ESSEE DOES NOT DESERVE ANY TELESCOPING AGAINST THIS ADDITION. MOREOVER, AGAINST THE DECLARED CASH RECEIVED AGAINST SALE OF 7 HOUSE, IT WAS THE CLAIM OF THE ASSESSEE THAT RS.13 LAC WAS USED FOR DEPOSITING IN THE BANK AND THE BENEFIT HAS BEEN ALLOWED BY THE A SSESSING OFFICER FOR SUCH CLAIM BECAUSE AGAINST TOTAL CASH DEPOSITED IN THE BANK OF RS.23.81 LAC, THE ASSESSING OFFICER HAS MADE ADDITION OF RS.8.81 LAC ONLY AFTER ALLOWING BENEFIT OF RS.13 LAC AGAINST SALE OF HOUSE A ND RS.2 LAC ON ACCOUNT OF OPENING CASH BALANCE OUT OF PAST SAVINGS. HENCE, WE DO NOT FIND ANY MERIT IN THE ADDITIONAL GROUND ALSO. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS DISMISSED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 16 /04/2015 *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1.THE APPELLANT 2.THE RESPONDENT. 3.CONCERNED CIT 4.THE CIT(A) 5.D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR