Mrs. Vidhu Rshmi, Lucknow V. The Income Tax Oficer, Lucknow

ITA 541/LKW/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8167 (ITAT-LUCKNOW)
• Duration Of Justice: 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-08-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 24-07-2012
• Assessment Year: misc
• Appeal Filed On: 15-09-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R K RAM
• Assessee Lawyers: A P SINHA
• Keywords: Cost of acquisition; Valuation report

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A , LUCKNOW BEFORE SHRI S UNIL KUMAR YADAV , JUDICIAL MEMBER AND SHRI SANJAY ARORA , ACCOUNTANT MEMBER ITA NO. 541/LKW/2011 ASSESSMENT YEAR: 2007 - 08 MRS. VIDHU RASHMI MERCURY INDUSTRIES, GOODS SHED R OAD, AISHBAGH, LUCKNOW V. THE INCOME TAX OFFICER IV(4) LUCKNOW PAN: AALPR8679R (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI. A. P. SINHA, ADVOCATE RESPONDENT BY: SHRI. R. K. RAM, D.R. DATE OF HEARING: 27.07.2012 DATE OF PRONOUNCEMENT: 22.08.2012 O R D E R PER S UNIL KUMAR YADAV : THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A) ON VARIOUS GROUNDS, WHICH ARE AS UNDER: - 1 - THE LD. C.I.T. (A), LUCKNOW ERRED WHILE NOT APPRECIATING THE FOLLOWING EVIDENCES IN SUPPORT OF EXISTENC ES OF BOUNDARY WALL ON THE PLOT OF LAND SOLD BY THE APPELLANT DURING THE YEAR : - ( I ) VALUATION REPORT OF APPROVED VALUER DATED 10.6.1992. ( II ) CONFIRMATORY LETTER OF TH E PURCHASER OF PLOT [CONFIRMING THE EXISTENCE OF BOUNDARY WALL]. : - 2 - : L - (A) THE LD. C.I.T. (A), LUCKN OW FURTHER ERRED WHILE NOT APPRECIATING THE VALUATION REPORT PREPARED BY A TECHNICALLY QUALIFIED IN RESPECT OF EXISTENCE OF BOUNDARY WALL CANNOT BE IGNORED/COMMENTED BY A NON TECHNICAL PERSON THE ASSESSING OFFICER. L - (B) THE LD. C.I.T. (A), LUCKNOW FURTH ER ERRED WHILE NOT CONSIDERING THE VALUATION REPORT AT ALL AND PASSED THE ORDER ON TOTALLY A WRONG PREMISE. L - (C) THE LD. C.I.T. (A), LUCKNOW FURTHER ERRED WHILE HOLDING THAT THE 'VALUATION REPORT JUST COMPUTES THE COST OF CONSTRUCTION OF WALL. IT IS NOT A DOCUMENT WHICH PROVES WHEN THE WALL WAS CONSTRUCTED.' HE MISERABLY FAILED TO SEE THAT THE VALUATION REPORT OF THE BOUNDARY WALL IS DATED 10.6.1992 AND THE SALE HAS BEEN DONE IN THE RELEVANT YEAR THEN HOW THE PURCHASER CAN CONSTRUCT THE BOUNDARY WALL. L - ( D) THE LD. C.I.T. (A), LUCKNOW FURTHER ERRED WHILE PASSING THE ORDER ON THE BASIS OF SALE DEED DATED 6.5.2008 I.E. ASSESSMENT YEAR 2009 - 2010 WHILE THE CASE IS OF ASSESSMENT YEAR 2007 - 2008. THE PLOT IN QUESTION WAS SITUATED IN CHINHAT, LUCKNOW AND THE SALE DEED ON WHICH THE LD. C.I.T. (A), LUCKNOW PLACED RELIANCE IS SITUATED IN KAKORI, LUCKNOW, WHICH IS STILL OWNED BY THE APPELLANT IT IS RESPECTFULLY - PRAYED THAT THE BENEFIT OF EXISTENCE OF BOUNDARY WALL SHOULD BE ALLOWED TO THE APPELLANT. 2 . THROUGH THESE GRO UNDS, THE ASSESSEE HAS ASSAILED THE COMPUTATION OF CAPITAL GAIN WORKED OUT BY THE LOWER AUTHORITIES AFTER EXCLUDING THE COST OF CONSTRUCTION OF BOUNDARY WALL. 3 . THE FACTS IN BRIEF BORNE OUT FROM THE RECORD ARE THAT THE ASSESSEE HAS FILED COMPUTATION OF TAX ABLE INCOME FOR THE YEAR UNDER CONSIDERATION AND CAPITAL GAIN ON SALE OF PLOT AT CHINHAT HAS BEEN SHOWN AT : - 3 - : ` 2,38,063 AFTER DEDUCTING THE INDEXED COST OF ACQUISITION OF ` 18,11,937 FROM THE SALE CONSIDERATION OF ` 20,50,000. WHILE COMPUTING THE COST OF ACQUI SITION, THE ASSESSEE HAS INCLUDED THE COST OF CONSTRUCTION OF BOUNDARY WALL. THE ASSESSING OFFICER VIDE ORDER SHEET ENTRY DATED 1.12.2009 ASKED THE ASSESSEE TO PROVE THE COST OF CONSTRUCTION OF BOUNDARY WALL AND SOURCE OF INVESTMENT THEREOF. IN RESPONSE THERETO, THE ASSESSEE FURNISHED VALUATION REPORT DATED 10.6.1992 SHOWING THE COST OF CONSTRUCTION OF BOUNDARY WALL AT ` 3,30,000, BUT NOTHING WAS REPLIED ABOUT THE SOURCE OF INVESTMENT IN RELATION TO THE ALLEGED COST OF CONSTRUCTION . THE ASSESSEE WAS FURT HER ASKED TO FURNISH EVIDENCE IN SUPPORT OF THE ALLEGED COST OF CONSTRUCTION OF ` 3,30,000 , IF INCURRED BY HER. IN REPLY THERETO, AN AFFIDAVIT WAS FILED STATING THEREIN THAT SHE HAS INVESTED ` 3.30 LAKHS IN CONSTRUCTION OF THE BOUNDARY WALL AND TIN SHED. 4 . TH E ASSESSING OFFICER FURTHER SOUGHT INFORMATION FROM THE U.P.S.I.D.C. WITH REGARD TO THIS CONSTRUCTION OF THE BOUNDARY WALL AND THE U.P.S.I.D.C. HAS FURNISHED THE INFORMATION THAT NO BOUNDARY WALL AND TIN SHED WAS EXISTING AT THE TIME OF TRANSFER OF THE PLO T ON 27.6.2006. THE ASSESSING OFFICER HAS ALSO NOTICED THAT RESTORATION CHARGES WERE PAID BY THE ASSESSEE AND FROM THE COPY OF LETTER DATED 6.3.2006 ISSUED BY THE U.P.S.I.D.C. REFLECTS THAT THE PLOT WAS LEFT BARREN AND WITHOUT ANY BOUNDARY WALL ETC . AND D UE TO WHICH THE RESTORATION CHARGES APPEARED TO HAVE BEEN DEMANDED BY THE U.P.S.I.D.C. THE ASSESSING OFFICER HAS ALSO EXAMINED THE VALUATION REPORT AND BEING NOT CONVINCED WITH THE EXPLANATIONS OF THE ASSESSEE, HE RECOMPUTED THE CAPITAL GAIN BY EXCLUDING THE COST OF CONSTRUCTION OF BOUNDARY WALL AT ` 12,63,658 AS AGAINST THE CAPITAL GAIN SHOWN BY THE ASSESSEE AT ` 2,38,063. 5 . THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) AND REITERATED HER CONTENTIONS, BUT DID NOT FIND FAVOUR WITH HIM. : - 4 - : 6 . NOW THE ASSESSE E HAS PREFERRED AN APPEAL BEFORE THE TRIBUNAL AND REITERATED HER CONTENTIONS AS RAISED BEFORE THE LOWER AUTHORITIES. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE HAS CONSTRUCTED BOUNDARY WALL AND IN SUPPORT THEREOF VALUATION REPORT DAT ED 10.6.1992 WAS FILED BEFORE THE ASSESSING OFFICER, BUT IT WAS NOT TAKEN INTO ACCOUNT BY THE ASSESSING OFFICER WITHOUT ASSIGNING ANY REASON. SINCE THE ASSESSEE HAS PLACED ALL THE RELEVANT EVIDENCE IN SUPPORT OF CONSTRUCTION OF BOUNDARY WALL, THE CLAIM OF THE ASSESSEE SHOULD HAVE BEEN ACCEPTED BY THE LOWER AUTHORITIES WHILE COMPUTING THE LONG TERM CAPITAL GAIN. 7 . THE LD. D.R. , BESIDES PLACING RELIANCE UPON THE ORDER OF THE LD. CIT(A), HAS EMPHATICALLY ARGUED THAT THE ASSESSEE WAS REPEATEDLY ASKED BY THE LOWE R AUTHORITIES TO PRODUCE EVIDENCE WITH REGARD TO THE CONSTRUCTION OF BOUNDARY WALL , BUT NOTHING WAS PLACED BEFORE ANY OF THE LOWER AUTHORITY. THE ASSESSEE HAS SIMPLY FILED THE VALUATION REPORT OF THE BOUNDARY WALL IN SUPPORT OF HER CONTENTIONS, BUT NO OTH ER DOCUMENTARY EVIDENCE WAS FILED. THE ASSESSING OFFICER HAS MADE A SPECIFIC INQUIRY FROM THE U.P.S.I.D.C. AND VIDE LETTER DATED 4.12.2009 THE ASSESSING OFFICER WAS CATEGORICALLY INFORMED BY THE U.P.S.I.D.C. THAT THERE WAS NO CONSTRUCTION OF BOUNDARY WALL . THE ASSESSING OFFICER HAS A LSO RECEIVED THE COPY OF REGISTERED LEASE DEED BETWEEN U.P.S.I.D.C. AND THE ASSESSEE AND EVEN IN THAT REGIST ERED LEASE DEED THERE WAS NO NARRATION WITH REGARD TO THE CONSTRUCTION OF BOUNDARY WALL. SINCE THE ASSESSEE HAS RAISE D THE CLAIM OF CONSTRUCTION OF BOUNDARY WALL, THE ONUS IS UPON HER TO PLACE RELEVANT EVIDENCE IN SUPPORT OF HER CLAIM , BUT THE ONUS WAS NOT PROPERLY DISCHARGED. THE VALUATION REPORT CANNOT BE CALLED TO BE A SACROSANCT DOCUMENT , ON THE BASIS OF WHICH THE D ISPUTE UNDER CONSIDERATION CAN BE DECIDED. 8 . HAVING GIVEN A THOUGHTFUL CONSIDERATION TO THE RIVAL SUBMISSIONS AND FROM A CAREFUL PERUSAL OF RECORD, WE FIND THAT THE ASSESSEE HAS MADE A SPECIFIC CLAIM WITH REGARD TO THE CONSTRUCTION OF BOUNDARY WALL WHILE : - 5 - : C OMPUTING THE LONG TERM CAPITAL GAIN, BUT NO DIRECT EVIDENCE WAS FILED IN THIS REGARD. SH E PLACED HEAVY RELIANCE UPON THE VALUATION REPORT SUBMITTED TO THE ASSESSING OFFICER. BUT NO DOCUMENTARY EVIDENCE WAS FILED TO SUBSTANTIATE THAT THAT THE BOUNDARY WAL L WAS CONSTRUCTED BEFORE SALE OF THE PLOT. MOREOVER, THE ASSESSING OFFICER HAS MADE NECESSARY INQUIRY FROM THE U.P.S.I.D.C. AND THE U.P.S.I.D.C. HAS CATEGORICALLY STATED THAT NO BOUNDARY WALL WAS CONSTRUCTED. THE LEASE DEED WAS REGISTERED ON 31.3.2003. THE COPY OF THE REGISTERED LEASE DEED WAS ALSO SUPPLIED TO THE ASSESSING OFFICER , IN WHICH THERE IS NO NARRATION WITH REGARD TO THE BOUNDARY WALL. WHEREAS THE ASSESSEE HAS TOOK A STAND THAT BOUNDARY WALL WAS CONSTRUCTED IN THE YEAR 1992, BUT NO EVIDENCE W AS FILED IN THIS REGARD. THE ASSESSING OFFICER HAS ALSO TAKEN NOT E THAT IF THE ASSESSEE HAS EVER CONSTRUCTED THE BOUNDARY WALL , ITS COST OF CONSTRUCTION MUST HAVE BEEN ENTERED INTO HER BOOKS OF ACCOUNT. SINCE NOTHING WAS PLACED BEFORE THE ASSESSING OFFIC ER TO PROVE THAT THE BOUNDARY WALL WAS EVER CONSTRUCTED BEFORE THE SALE OF LAND, THE ASSESSING OFFICER WAS RIGHT IN IGNORING THE COST OF CONSTRUCTION OF BOUNDARY WALL WHILE COMPUTING THE COST OF ACQUISITION OF PLOT FOR THE PURPOSE OF COMPUTING THE LONG TER M CAPITAL GAIN. WE, THEREFORE, FIND NO MERIT IN THE CLAIM OF THE ASSESSEE , AS THE ASSESSEE HAS BADLY FAILED TO DISCHARGE THE PRIMARY ONUS WHICH LAY S ON HER. WE ACCORDINGLY CONFIRM THE ORDER OF THE LD. CIT(A). 9 . IN THE RESULT, APPEAL OF THE ASSESSEE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22.8.2012. S D/ - S D/ - [SANJAY ARORA ] [ S UNIL KUMAR Y ADAV ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 22.8.2012 JJ: 0208 : - 6 - : COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR ASSISTANT REGISTRAR