RANJANA JOHARI, Jaipur V. ACIT, Jaipur

ITA 544/JPR/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1909 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 5 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 07-06-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 20-05-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S L CHANDEL CIT DHK
• Assessee Lawyers: VIKAS RAJVANS HI
• Keywords: Cost of acquisition; Condonation of delay
• Section: 54F

Judgement Text

ITA NO.544/JP/2016 SMT. RANJANA JOHRI VS ACIT,CIRCLE -6, JAIPUR 1 VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH HKKXPUN] YS[KK LNL; DS LE{K BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 544/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2011-12 SMT. RANJANA JOHARI S-249, SANGHI FARM, MAHAVIR NAGAR, TONK ROAD, JAIPUR CUKE VS. THE ACIT CIRCLE - 6 JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AEOPJ 3476 P VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: SHRI VIKAS RAJVANSHI JKTLO DH VKSJ LS@ REVENUE BY :SHRI S.L. CHANDEL, ADDL. CIT LQUOKBZ DH RKJH[K@ DATE OF HEARING : 02/08/2017 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 30 /10/2017 VKNS'K@ ORDER PER BHAGCHAND, AM THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDER OF THE LD. CIT(A)-2, JAIPUR DATED 25-01-2016 FOR THE ASSESSMENT YEARS 2011-12 R AISING THEREIN FOLLOWING GROUNDS:- 1. THAT THE LD. CIT(A) HAS ERRED IN LAW AS WELL A S IN FACTS IN DISALLOWING 10% OF TRAVELLING EXPENSES OF RS. 1,46,539/- AMOUNT ING TO RS. 14,654/-. 2. THAT THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS IS IN FACTS IN INCREASING LONG TERM CAPITAL GAIN BY RS. 2,52,843/- BY REDUCING THE VALUE OF PURCHASE OF GOLD JUST ON THE BASIS OF SURMISE AND C ONJECTURE. ITA NO.544/JP/2016 SMT. RANJANA JOHRI VS ACIT,CIRCLE -6, JAIPUR 2 2.1 AT THE OUTSET OF THE HEARING, THE BENCH OBSERVE D THAT THE APPEAL FILED BY THE ASSESSEE IS LATE BY 2 DAYS FOR WHICH THE LD. AR OF THE ASSESSEE FILED THE APPLICATION FOR CONDONATION OF DELAY DATED 01-09-2016 WITH THE PRAYER THAT THE ASSESSEE WAS OUT OF JAIPUR DUE TO SOME URGENT WORK AND THEREFORE , HE WAS NOT ABLE TO SIGN FORM 36 WHICH LED TO DELAY OF 2 DAYS IN FILING THE APPEA L. 2.2 AFTER HEARING BOTH THE PARTIES, PERUSING THE MA TERIALS AVAILABLE AND THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, THE DELAY OF 2 DAYS IN LATE FILING THE APPEAL BY THE ASSESSEE IS CONDONED. 3.1 APROPOS GROUND NO. 1 OF THE ASSESSEE, THE FACTS AS EMERGES FROM THE ORDER OF THE LD. CIT(A) IS AS UNDER:- 3.3 I HAVE PERUSED THE FACTS OF THE CASE, THE ASSES SMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT. THE ASSESSING OFFICER EXAMINED THE EXPENDITURE UNDER THE HEAD TRAVELLING EXPENSES OF RS. 1,46,539/-. A DISALLOWANCE OF 20% WAS MADE FOR PERSONAL USE AND CASH PAYMENTS. AFTER PERUSING THE CONTENTIONS OF THE ASSESSEE AND THE AOS ORDER, IT IS FELT THAT 20% OF DISALLOWANCE IS ON THE HIGHER SIDE AND THE SAME IS RESTRICTED TO 10%. HENCE THIS GROUND IS PARTLY ALLO WED. 3.2 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IN THIS CASE THE AO OBSERVED THAT A SUM OF RS. 1,46,539/- WAS INCURRED BY THE ASSESSEE IN CASH ON ACCOUNT OF TRAVELLING EXPE NSES AND THE SAME WAS NOT VERIFIABLE. HENCE, THE AO DISALLOWED 20% OF RS. 1,4 6,539/- WHICH COMES TO RS. 29,308/- AND THUS MADE AN ADDITION OF RS. 29,308/- IN THE HANDS OF THE ASSESSEE. IN FIRST APPEAL, THE LD. CIT(A) HAS REDUCED THE SAME T O 10% WHICH COMES TO ITA NO.544/JP/2016 SMT. RANJANA JOHRI VS ACIT,CIRCLE -6, JAIPUR 3 RS. 14,654/-. DURING THE COURSE OF HEARING, THE LD. AR OF THE ASSESSEE SUBMITTED THE LEDGER ACCOUNT OF TRAVELLING EXPENSES INCURRED BY T HE ASSESSEE VIDE PBP 13 TO16. TAKING INTO CONSIDERATION THE FACTS AND CIRCUMSTANC ES OF THE CASE, IT WILL BE IN THE INTEREST OF EQUITY AND JUSTICE TO REDUCE THE TRAVEL LING EXPENSES TO RS. 4,654/-. THUS THE ASSESSEE WILL GET THE PARTIAL RELIEF OF RS. 10, 000/-. HENCE, THE GROUND NO. 1 OF THE ASSESSEE IS PARTLY ALLOWED. 4.1 APROPOS GROUND NO. 2 OF THE ASSESSEE, THE FACTS AS EMERGES FROM THE ORDER OF THE LD. CIT(A) IS AS UNDER:- 4.3 I HAVE PERUSED THE FACTS OF THE CASE, THE ASSES SMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT. DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HAS SHOWN LONG TERM CAPITAL GAIN ON SALE CONSIDERATION OF GOLD JEWELLERY. IT WAS SEEN THAT THE ASSESSEE HAS PURCHASED GOLD BAR OF 1000 GM . ON 11.11.2004 AND 300 GM ON 08.09.2006. THE SALE OF 800 GM IS MADE DURING TH E YEAR. THE ASSESSEE HAS TAKEN THE AVERAGE PRICE FROM THE TWO PURCHASES AND INDEXED THE COST FROM FINANCIAL YEAR 2006-07, HOWEVER, THE ASSESSING OFFI CER HAS HELD THAT THE SALE WAS MADE FROM THE BILL OF 1000 GM AND THE COST HAS BEEN TAKEN AS PER THE BILL BUT THE YEAR OF INDEXATION HAS BEEN TAKEN AS FINANCIAL YEAR 2006-07 I.E. RELATABLE TO THE PURCHASE BILL OF 300 GM. THE AUTHORIZED REPRESENTAT IVE HAS REQUESTED THAT THE INDEXATION SHOULD BE TAKEN FROM FINANCIAL YEAR 2004 -05 IN WHICH THE INITIAL PURCHASE WAS MADE. HE HAS ALSO SUBMITTED A CALCULAT ION SHEET WHICH IS REPRODUCED AS FOLLOWS: SALE CONSIDERATION (GOLD) 800 GMS ENCLOSED SALE INV OICE VIDE PB NO. 21 TO 23 16,05,130 LESS: PURCHASE OF GOLD (PURCHASED DATED 08.09.2006 300 GMS OF RS. 2,81,850@ 939.50/GM) AND INDEXED AMOUNT IS 2,81,850X711 =3,86,118/-) 519 LESS: PURCHASE OF GOLD (PURCHASED VIDE INVOICE NO. (04-05)G 2367 DATED 11.11.2004 VIDE PAGE NO. 24 1,000 GMS) HENCE, PURCHASE COST FOR 500 GMS IS 640X500 I.E. RS. 3,20,000/- AND INDEXED AMOUNT IS 3,20,000X711 =4,74,000/- 480 8,60,118 LESS: DEDUCATION U/S 54F PURCHASE OF RESIDENTIAL HO USE (1,25,760X7,45,012) 16,05,130 58,370 LONG TERM CAPITAL GAIN 6,86,642 LONG TERM CAPITAL GAIN AS PER RETURN 5,35,571 DIFFERENCE 1,51,125 ITA NO.544/JP/2016 SMT. RANJANA JOHRI VS ACIT,CIRCLE -6, JAIPUR 4 IN MY OPINION THE CORRECT CALCULATION WOULD BE TO T AKE THE PURCHASE PRICE AS PER THE BILL DATED 11.11.2004. SINCE, THE ENTIRE SALE O F 800 GM COULD HAVE BEEN MADE FROM THIS PURCHASE WHICH CONSISTED OF 100 GM THAT B EING SO THE INDEXATION WOULD BE TAKEN FROM FINANCIAL YEAR 2005-06. THE PURCHASE PRICE WOULD THUS BE 640X800X711/480 WHICH WOULD COME TO RS.7,58,400/- T HUS IN THE CALCULATION SUBMITTED BY THE ASSESSEE AS ABOVE FIGURE OF RS. 8, 60,118/- WILL GET REPLACED BY RS. 7,58,400/-, THE ASSESSING OFFICER TO MODIFY ACC ORDINGLY. 4.2 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS NOTED THAT THE AO COMPUTED THE LONG T ERM CAPITAL GAIN ON SALE OF GOLD AT RS. 8,32,915/- AFTER ALLOWING THE INDEXED C OST OF ACQUISITION AT RS. 7,01,410/- AND THUS MADE THE ADDITION OF RS. 2, 97,398/- TO THE LONG TERM CAPITAL GAIN COMPUTED BY THE ASSESSEE. BEFORE THE L D. CIT(A), THE ASSESSEE CLAIMED THAT INDEXED COST OF ACQUISITION SHOULD BE TAKEN AT RS. 8,60,118/- AND THUS LONG TERM CAPITAL GAIN SHOULD BE COMPUTED AT RS. 6, 86,642/- . HOWEVER, THE LD. CIT(A) COMPUTED THE INDEXED COST OF ACQUISITION AT RS. 7,58,400/- . FROM THE RECORDS SUBMITTED BY THE ASSESSEE, IT IS OBSERVED T HAT THE ASSESSEE HAD PURCHASED 300 GMS. GOLD IN F.Y. 2006-07 AND 1000 GMS. GOLD IN F.Y. 2004-05 WHEREAS THE 800 GMS IS SOLD DURING THE YEAR. THE LD. CIT(A) IS THEREFORE, JUSTIFIED IN HOLDING THAT 800 GMS. GOLD SOLD DURING THE YEAR IS OUT OF T HE GOLD PURCHASED IN F.Y. 2004- 05 BY FOLLOWING THE FIFO METHOD. IN THIS VIEW OF TH E MATTER, THE BENCH CONCURS WITH THE FINDING OF THE LD. CIT(A) IN ALLOWING THE INDEXED COST OF ACQUISITION AT RS. 7,58,400/-. THUS GROUND NO. 2 OF THE ASSESSEE I S DISMISSED. ITA NO.544/JP/2016 SMT. RANJANA JOHRI VS ACIT,CIRCLE -6, JAIPUR 5 5.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS P ARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 /10/201 7. SD/- HKKXPUN ( BHAGCHAND) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 30/10/ 2017 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SMT. RANJANA JOHARI,JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE ACIT, CIRCLE - 6, JAIPUR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO.544/JP/2016 ) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ @ ASSISTANT. REGISTRAR