Smt. Meenakhi Devi, Lucknow V. DCIT Rg, I, Lucknow

ITA 644/LKW/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62160 (ITAT-LUCKNOW)
• Duration Of Justice: 8 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 25-06-2012
• Assessment Year: misc
• Appeal Filed On: 24-10-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Cost of acquisition; Fair market value; Valuation report; Onus to prove
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B : LUCKNOW BEFORE SHRI S. K. YADAV, JUDICIAL MEMBER AND SHRI MEHAR SINGH , ACCOUNTANT MEMBER I.T.A. NO. 644 /LKW/1 1 ASSESSMENT YEAR S : 2007 - 08 SMT. MEENAKSHI DE V I, VS. DY. C.I.T., B - 17, MAHANAGAR, RANGE - I, LUCKNOW. LUCKNOW. PAN:ABQPD9929E (APPELLANT) (RESPONDENT) I.T.A. NO. 666 /LKW/1 1 ASSESSMENT YEAR S : 2007 - 08 A.C.I.T., VS. SMT. MEENAKSHI DEVI, RANGE - 2, LUCKNOW. LUCKNOW. (APPELLANT) (RESPONDENT) ASSESS EE B Y : SHRI K. R. RASTOGI, C.A. RESPONDENT BY : S MT.SWATI RATAN, SR.D.R. DATE OF HEARING : 25 / 06 /201 2 DATE OF PRONOUNCEMENT : 27/06/2012 ORDER PER MEHAR SINGH ; A.M.: THESE ARE CROSS APPEALS FILED BY THE ASSESSEE AND THE REVENUE . THE ASSESSEE APPELLANT FILED APPEAL AGAINST THE ORDER , DATED 23/08/2011 , OF THE CIT(A) FOR THE ASSESSMENT YEAR 2007 - 2008 , PASSED U/S 250(6) OF THE I.T. ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 2 1. THE LD. C. I. T. (APPEAL) - II, LUCKNOW ERRED ON FACTS AND IN LAW IN ESTIMATING, FAIR MARKET VALUE OF LAND AS ON 01.04.1981, AT ` 36/ - PER SQ. FT. INSTEAD OF ` 50 - 00 PER SQ. FT. SHOWN BY THE APPELLANT. 2. THE LD. C. I. T. (APPEALS) - II, ERRED ON FACTS AND IN LAW IN NOT CONSIDERING COST OF IMPROVEMENT IN BUILDING INCURRED IN A. Y. 1988 - 89 AND 1989 - 90 IN COMPUTATION OF LONG TERM CAPITAL GAIN, AS SHOWN BY THE APPELLANT. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS IN ITS APPEAL: 1. THE LD. CIT(A) HAS ERRED IN LAW ON FACTS IN DELETING THE ADDITION OF ` 7,00,000/ - ON ACCOUNT OF TWO CASH DEPOSITS IN THE ASSESSEE'S ACCOUNT WITH INDUS BANK AND ABN AMRO BANK. 2. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN ADOPTING COST OF ACQUISITION OF PROPERTY SITUATED AT 13, GOKHLE MARG, LUCKNOW AS ON 01.04 .1 981 AT THE RATE OF ` 36/ - SQ. FT AS AGAINST THE RATE OF ` 22/ - PER SQ. FT. ADOPTED BY THE A.O. FOR COMPUTING LONG TERM C APITAL GAI N ON SALE OF THE SAID PROPERTY. 3. THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY ONE OR MORE OF THE GROUND OF APPEAL AS STATED AS AND WHEN NEED FOR DOING SO ARISES WITH THE PRIOR PERMISSION OF THE HON'BLE BENCH. 3. IN THE FIRST GROUND OF APPEAL THE ASSESSEE APPELLANT CONTENDED THAT THE CIT(A) , ERRED ON FACTS AND IN LAW IN ESTIMATING FAIR MARKET VALUE OF LAND , AS ON 01/04/1981 , AT ` 36 / - PER SQ. FT. INSTEAD OF ` 50/ - PER SQ. FT. AS DISCLOSED . IN THE COURSE OF PRESENT AP PELLATE PROCEEDINGS BEFORE US, THE ASSESSEE ALSO CONTENDED THAT THE RATES ADOPTED BY THE ASSESSEE ARE BASED ON THE REPORT OF THE REGISTERED VALUER AND A COMPARABLE CASE. THE ASSESSING OFFICER HAS ADOPTED ` 22/ - PER SQ. FT. , AS COST OF THE LAND AND WORKED OUT THE SAME AS AT ` 14,96,000/ - , AS ON 01/04/1981. THIS RATE HAS BEEN TAKEN BY THE ASSESSING OFFICER ON THE BASIS OF 3 DM CIRCLE RATE OF THE LAND , IN THE AREA, WHICH WAS RANGING FROM ` 20/ - TO ` 25/ - . THE ASSESSING OFFICER ACCORDINGLY COMPUTED THE CAPITAL GAIN AND TAXED THE SURPLUS REALIZED. 3(1) . THE LEARNED A.R. CONTENDED THAT THE ASSESSEE HAD ADOPTED ` 50/ - PER SQ. FT. AS FAIR MARKET VALUE OF THE LAND AS ON 01/04/1981 BASED ON THE VALUATION REPORT OF THE REGISTERED VALUER. SIMILARLY, HE A LSO REFERRED TO THE COMPARABLE CASE AND FILED A COPY OF THE REGISTERED SALE DEED WHICH WAS EXECUTED , ON 12/03/1981 , FOR THE SALE OF LAND AND BUILDING , SITUATED AT 13, GOKHLE MARG, LUCKNOW , IN WHICH SALE CONSIDERATION OF THE LAND HAS BEEN CONSIDERED AT ` 60/ - PER SQ. FT. THE LEARNED A. R. PLACED RELIANCE ON THE DECISION REPORTED IN DINESH KUMAR MITTAL VS INCOME - TAX OFFICER [1992] 193 ITR 770 (ALL) WHEREIN THE HON'BLE ALLAHABAD HIGH COURT HAS HELD AS UNDER: THAT, IN THE INSTANT CASE, THE MARKET VALUE O F THE HOUSE FOR THE PURPOSE OF STAMP DUTY WAS SHOWN AS ` 2,07,500/ - BUT THE ACTUAL CONSIDERATION WAS STATED TO BE ` 1,50,000/ - . THE PETITIONER BROUGHT TO THE NOTICE OF THE COMMISSIONER THAT THE PORTION PURCHASED BY HIM WAS UNDER THE TENANCY OF HIS MOTHER AND ACTUALLY THEY WERE THEMSELVES OCCUPYING IT. THIS FACT HAD NOT BEEN CONSIDERED BY THE INCOME - TAX AUTHORITIES. THE ORDERS OF ALL THE THREE AUTHORITIES ADDING ONE - HALF OF THE DIFFERENCE BETWEEN THE AMOUNT PAID AND THE VALUE FOR PURPOSES OF STAMP DUTY TO THE INCOME OF THE ASSESSEE WAS LIABLE TO BE QUASHED AND THE MATTER REMITTED TO THE INCOME - TAX OFFICER FOR REDETERMINATION OF THE ACTUAL CONSIDERATION. 4 . THE LEARNED D.R. PLACED RELIANCE ON THE ASSESSMENT ORDER AND ON THE DECISION, IN THE CASE REPORTED IN 207 TAXMAN 16. 5 . WE HAVE CAREFULLY PERUSED RIVAL SUBMISSIONS, FACTS OF THE CASE AND THE RELEVANT RECORDS , INCLUDING THE CASE LAWS RELIED UPON BY THE PARTIES . A BARE 4 PERUSAL OF THE ASSESSMENT ORDER DATED 27/11/2009 , PASSED U/S 143(3) OF THE ACT REVEALS THAT THE ASSESSING OFFICER HAD ADOPTED DM CIRCLE RATE VI S - A - VI S THE RATE DISCLOSED BY THE ASSESSEE , ON THE BASIS OF VALUATION REPORT FROM THE REGISTERED VALUER AND A COMPARABLE CASE. THE LEARNED CIT(A) , HAS ADOPTED THE VALUE @ ` 36/ - PER SQ. FT. , ON THE FOUNDATION OF FAIRNESS AND REASONABLENESS. RELEVANT FINDING OF LEARNED CIT(A) AS CONTAINED IN PARA 5.3 ARE REPRODUCED AS UNDER: 5.3 HAVING REGARD TO THE MATERIAL PLACED ON RECORD, ESTIMATE MADE BY THE AO AND THE CONTENTIONS RAISED BY THE APPELLANT TO QUESTION AND DISPUTE THE ESTIMATED RATE APPLIED BY THE AO, I AM OF THE CONSIDERED VIEW THAT IT WILL BE FAIR AND REASONABLE TO ADOPT THE V ALUE @ ` 36/ - PER SQ. FT. TO ARRIVE AT THE VALUE AS ON 01.04.2011 FOR ESTIMATING THE COST OF ACQUISITION FOR THE PURPOSES OF COMPUTATION OF LONG TERM CAPITAL GAINS. THE AO IS DIRECTED TO COMPUTE THE LONG TERM CAPITAL GAIN ON THE LINES AS DECIDED ABOVE AND CONSEQUENTLY THE APPELLANT GETS A PARTIAL RELIEF ON THIS ISSUE. 6 . THE ADOPTION OF THE RATE BY THE ASSESSING OFFICER AND SUBSEQUENT REDUCTION OF THE SAME BY THE CIT(A) , CANNOT BE SUSTAINED , IN VIEW OF THE RELEVANT DOCUMEN TARY EVIDENCE FILED BY THE ASSESSEE IN THE FORM OF REPORT FROM THE REGISTERED VALUER AND A COMPARABLE CASE. IN THIS CONTEXT , IT IS MENTIONED THAT THE APPELLANT ASSESSEE HAS FILED A SALE DEED APPEARING AT PAGE NO. 13 OF THE PAPER BOOK , EVIDENCING THE CONT ENTION OF THE ASSESSEE , AS COMPARABLE CASE. IN VIEW OF THIS, WE ARE OF THE CONSIDERED OPINION THAT THE IMPUGNED RATE SHOWN BY THE ASSESSEE IS FOUNDED , ON RELEVANT DOCUMENTARY EVIDENCE AND CANNOT BE UPSET ON THE GROUND OF FAIRNESS AND REASONABLENESS. ACCORDINGLY, GROUND NO. 1 OF ASSESSEES APPEAL IS ALLOWED. 5 7 . IT IS PERTINENT TO MENTION HERE THAT THE REVENUE HAS RAISED SIMILAR CONTENTION , IN GROUND NO. 2 AGAINST THE ADOPTION OF RATE AT ` 36/ - PER SQ. FT. AS AGAINST THE RATE OF ` 22/ - PER SQ. FT. ADOP TED BY THE ASSESSING OFFICER. IN VIEW OF THE FINDING ABOVE, THIS GROUND OF REVENUES APPEAL IS DISMISSED. 8 . IN GROUND NO. 2 OF ITS APPEAL, THE ASSESSEE HAS CONTENDED THAT THE CIT(A) HAS ERRED ON FACTS AND IN LAW IN NOT CONSIDERING THE COST OF IMPROVEMENT , IN BUILDING , IN ASSESSMENT YEAR 1988 - 89 AND 89 - 90. THE LEARNED A. R. REFERRED TO PAGES 46 AND 47 OF THE DIARY , TO SUPPORT HIS CONTENTION THAT THE RENOVATION WAS CARRIED OUT , IN THE SAID BUILDING AND , HENCE , SUCH EXPENSES BE ALLOWED WHILE COM PUTING THE CAPITAL GAINS. 9 . THE LEARNED D.R. ON THE OTHER HAND PLACED RELIANCE , ON THE ORDER OF ASSESSING OFFICER AND CIT(A). 1 0 . WE HAVE CAREFULLY PERUSED RIVAL SUBMISSIONS, FACTS OF THE CASE AND THE RELEVANT RECORDS . THE ASSESSING OFFICER HAS RECORDE D CATEGORICAL FINDING THAT NO EVIDENCE HA D BEEN PRODUCED BY THE ASSESSEE , TO SUPPORT HIS CLAIM THAT RENOVATION WORK WAS UNDERTAKEN BY HIM , IN THE SAID PROPERTY. SIMILAR FINDING HAS BEEN RECORDED BY THE CIT(A) . NOW , BEFORE THE BENCH, THE LEARNED A.R. MERELY REFERRED TO CERTAIN PAGES OF THE DIARY , WHICH CANNOT BE CONSTRUED AS CREDIBLE AND RELIABLE EVIDENCE. THE SUBMISSION MADE BY THE ASSESSEE IS NOT PLAUSIBLE AND IN THE ABSENCE OF CO GENT AND CORROBORATIVE EVIDENCE S , THE SAME CANNOT BE ACCEPTED. NEEDLESS TO SAY THAT THE ONUS TO PROVE THE INCURRING OF EXPENDITURE , ON RENOVATION SQUARELY LIES ON THE ASSESSEE AND THE ASSESSEE HAS MISERABLY 6 FAILED , TO PROVE THE FACTUM OF INCURRING OF THE EXPENSES . ACCORDINGLY, THE FINDING OF THE CIT(A) ARE UPHELD AND THE GROUND OF APPEAL OF THE ASSESSEE IS DISMISSED. AS A RESULT, THE APPEAL OF T HE ASSESSEE IS PARTLY ALLOWED. 1 1 . IN GROUND NO. 1, THE REVENUE CONTENDED THAT CIT(A) ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF ` 7, 00,000/ - , ON ACCOUNT OF TWO CASH DEPOSITS IN THE ASSESSEES ACCOUNT WITH INDUS BANK AND ABN AMRO BANK. T HE LEARNED D.R. CONTENDED THAT THE EXPLANATION FILED BY THE ASSESSEE IS NOT EXPLANATION , IN THE LIGHT OF DECISION OF HON'BLE SUPREME COURT IN THE CASE OF CIT VS. P. MOHANKALA [2007] 291 ITR 278. HE REFERRED TO PARA 4 OF THE CIT(A)S ORDER AND CONTENDED THAT THE ORDER OF CIT(A) , IS PERVERSE , AS NO REASONS ARE RECORDED BY HIM. 1 2 . LEARNED A.R. ON THE OTHER HAND SUPPORTED THE ORDER OF CIT(A) , AND DEMONSTRATED BY WAY OF CASH FLOW STATEMENT AND BANK ACCOUNT , AS AVAILABLE , IN THE PAPER BOOK THAT THE MONEY HAS BEEN WITHDRAWN FROM THE BANK. 1 3 . WE HAVE CAREFULLY PERUSED RIVAL SUBMISSIONS, FACTS OF THE CASE AND THE RELEVANT PAGES OF THE PAPER BOOK AS CITED BY LEARNED A.R. AND THE CASE LAWS RELIED UPON . THE HON'BLE SUPREME COURT HAS HELD THE EXPRESSION ASSESSEE OFFERS NO EXPLANATION MEANS THE ASSESSEE OFFERS NO PROPER, REASONABLE AND ACCEPTABLE EXPLANATION AS REGARDS THE SUM FOUND CREDITED IN THE BOOK S MAINTAINED BY THE ASSESSEE . IN THE PRESENT CASE THE ASSESSEE HAS FILED CASH FLOW STATEMENT, PHOTOCOPY OF THE BANK ACCOUNT AND SUCCESSFULLY DEMONSTRATED THE WITHDRAWAL OF CASH AND DEPOSITED , THOUGH AFTER A GAP OF TIME , IN THE 7 IMPUGNED BANK. THIS HAS BEEN DULY DEMONSTRATED BY LEARNED A.R. BY WAY OF EVIDENCE IN THE PAPER BOOK , AT PAGE NO. 6 8 OF THE PAPER BOOK WHERE WITHDRAWAL HAS BEEN MADE , FROM ALLAHABAD BANK FOR ` 7,00,000/ - ON 22/04/2006 AND AGAIN A WITHDRAWAL OF ` 1,00,000/ - WAS MADE FROM ALLAHABAD BANK , ON 24/11/2006. SIMILARLY , WITHDRAWAL , ON 25/11/2006 AND 15/12/2006 HA D BEEN MADE FROM INDUS BANK AT ` 60,000/ - AND CITI BANK AT ` 2,00,000/ - . THE CASH HAS BEEN DEPOSITED IN THE INDUSIND BANK TO THE TUNE OF ` 5,00,000/ - , ON 19/06/2006 AND THE CASH OF ` 2,00,000/ - HAS BEEN DEPOSITED , ON 30/08/2006 , IN ABN AMRO BANK. ACCORDINGLY, THE A. R. IS OF THE OPINION THAT THE DEPOSIT HAS BEEN MADE FROM THE WITHDRAWAL S MADE FROM THE BANKS. IN VIEW OF THE EVIDENCES , FILED BY THE ASSESSEE, WE DO NOT FIND ANY REASON TO UPSET THE FINDING OF LEARNED CIT(A). THIS GROUND OF REVENUES APPEAL IS DISMISSED. 1 4 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED AND APPEAL OF THE REVENUE IS DISMISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 27/0 6/2012 ) SD/. SD/. ( S. K. YADAV ) ( MEHAR SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 27/06/2012 *SINGH COPY FORWARDED TO THE: 1. APPELLANT. 2. RESPONDENT. 3. CIT (A) 4. CIT 5. DR. ASSISTANT REGISTRAR