MARIYANKANDATHIL K. SUNDER, MUMBAI V. ITO 15(3)(2), MUMBAI

ITA 6457/MUM/2011

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8758 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 3 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-01-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 02-01-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 22-09-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SOMAN KUMAR
• Keywords: Sale consideration of property below Jantri Value; Value adopted by valuation officer; Valuation report
• Section: 143(3); 50C; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI BEFORE SHRI JASON P.BOAZ (AM) AND SHRI RAM LAL NEGI ( JM) ITA NO. 6457/MUM/2011 ASSESSMENT YEAR: 2008-09 MARIYANKANDATHIL K. SUNDER. HOUSE NO. 7091, GORAI BEACH ROAD, GORAI VILLAGE, BORIVALI (W), MUMBAI- 400 092. PAN: BADPS8928P VS. THE ITO - 15(3)(2), MATRU MANDIR, GRANT ROAD, MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY : SHRI. SOMAN KUMAR DATE OF HEARING: 0 2/01/2017 DATE OF PRONOUNCEMENT: 18/01/201 7 O R D E R PER RAM LAL NEGI, JM THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAI NST IMPUGNED ORDER DATED 18/07/2011 PASSED BY THE LD. CIT (APPEALS)-26 , MUMBAI, FOR THE ASST. YEAR 2008-09, WHEREBY THE LD CIT(A) PARTLY ALLOWED THE APPEAL FILED BY THE ASSESSEE AGAINST ORDER DATED 30/12/2010 PASSED U/S 143(3) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT). 2. CASE WAS CALLED FOR HEARING, HOWEVER, NONE APPEA RED ON BEHALF OF THE ASSESSEE. WE NOTICED THAT THIS IS THE FOURTH OCCASI ON THAT THE ASSESSEE EITHER DID NOT APPEAR ON THE DATES FIXED FOR HEARING OR SO UGHT ADJOURNMENT. THE ASSESSEE DID NOT APPEAR SUCCESSIVELY FOR THE LAST T WO DATES WHEN THE CASE WAS FIXED FOR HEARING NOR ANY REQUEST WAS RECEIVED FOR ADJOURNMENT. FROM THE 2 ITA NO. 6457/MUM/2011 ASSESSMENT YEAR: 2008-09 CONDUCT OF THE ASSESSEE WE ARE SATISFIED THAT THE A SSESSEE IS NOT INTERESTED IN PURSUING ITS APPEAL. WE ACCORDINGLY, DECIDED TO PRO CEED EX PARTE AGAINST THE APPELLANT/ASSESSEE ON THE BASIS OF MATERIAL ON RECO RD AFTER HEARING THE DEPARTMENTAL REPRESENTATIVE (DR). 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, A N INDIVIDUAL, FILED ITS RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR DECLARIN G THE TOTAL INCOME OF RS. 4,29,200/-. THE SAME WAS PROCESSED U/S 143(1) OF TH E ACT. ON THE BASIS OF DETAILS FURNISHED BY THE ASSESSEE AND SUBMISSIONS M ADE IN RESPONSE TO THE NOTICE ISSUED U/S 142(2) OF THE ACT, ASSESSMENT ORD ER WAS PASSED U/S 143(3) OF THE ACT DETERMINING THE TOTAL INCOME OF THE ASSESSE E AT RS. 67,01,200/- AFTER MAKING ADDITION OF RS. 62,72,000/-AS SHORT TERM CAP ITAL GAIN U/S 50C OF THE ACT. IN APPEAL, THE LD, CIT(A) PARTLY ALLOWED THE A PPEAL OF THE ASSESSEE AND MODIFIED THE ORDER ASSESSMENT ORDER BY DIRECTING TH E AO TO COMPUTE THE TAXABLE CAPITAL GAIN AFTER CONSIDERING THE DVOS RE PORT. 4. STILL AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFOR E THE TRIBUNAL ON THE FOLLOWING GROUNDS OF APPEAL:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ADDITION MADE OF SHORT- TERM CAPITAL GAIN IN RESPECT OF THE PROPERTY BELONG S TO S/SHRI S.A. FEREIRA, F.A. FEREIRA AND MRS. Y.L. DIAS SOLD BY TH E APPELLANT ON THE STRENGTH OF POWER OF ATTORNEY. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE AO HAS MADE THE ASSESSMENT BY ADDING SHORT TERM CAP ITAL GAIN OF RS. 62,72,000/- (AS PER THE DEPARTMENTAL VALUATION THE MARKET VALUE AT RS. 25,76,000/-) OF THE APPELLANT, ALTHOUGH THE APPELLANT HAS PUT FORWARD ALL THE TRUE AND CORRECT INFORMATION, BY MA KING AN ADDITION OF RS. 62,72,000/- (AS PER THE VALUATION REPORT RS. 25,76,OOO/-) AS SHORT TERM CAPITAL GAIN ON THE PROPERTY SOLD BY THE APPELLANT AS PER 3 ITA NO. 6457/MUM/2011 ASSESSMENT YEAR: 2008-09 THE POWER OF ATTORNEY DATED 6/7/2007 GIVEN BY S/SHR I S.A. FEREIRA, F.A. FEREIRA AND MRS. Y.L. DIAS TO THE APPELLANT, 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE AO HAS NOT MADE ANY INQUIRY WITH THE LANDLORDS S/SH RI S.A. FEREIRA. F.A. FEREIRA AND MRS. Y.L. DIAS, ALTHOUGH THE APPEL LANT HAS GIVEN THE FULL ADDRESS AND ALSO MENTIONED PAYMENT DETAILS MAD E TO THE LAND LORDS. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT APPEAL HAS NOT CALLED FOR ANY REMAND RE PORT FROM THE AO IN RESPECT OF THE PAYMENT MADE BY THE APPELLANT TO THE LANDLORD. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE AO AS WELL AS THE CIT (APPEAL) HAVE DETERMINED THAT THE COST OF THE LAND TO THE APPELLANT IS 'O, ALTHOUGH THE APPELLAN T HAS PAID RS. 9 LAKHS BY WAY OF CHEQUE TO THE THREE LANDLORDS, RS. 1,30,000/- PAID AS STAMP DUTY AND REGISTRATION AND PAID RS. 60,000/ - ON THE DATE OF POWER OF ATTORNEY DAY. THE APPELLANT HAS TRULY AND CORRECTLY SUBMITTED THAT REMAINING AMOUNT OF 11 LAKHS HAS ALS O BEEN PAID TO THE LANDLORDS IMMEDIATELY AFTER THE SALE OF THE LAN D ON WHICH THE POWER OF ATTORNEY GIVEN TO THE APPELLANT BY THE LAN DLORDS. THUS THE APPELLANT HAS PAID RS. 22 LAKHS TO THE LANDLORDS. T HESE FACTS CAN BE VERIFIED FROM THE RETURN OF INCOME OF THE ASSESSMEN T YEAR, WHEREIN IT IS CLEARLY MENTIONED THAT THE APPELLANT HAS TAKEN T HE LOAN OF RS. 6 LAKHS FROM WIFE AND SISTER- IN-LAW AND PAID RS. 9 L AKHS TO THE LANDLORD AND THE LOAN AMOUNT TAKEN FROM WIFE AND SI STER-IN-LAW OF RS. 6 LAKHS HAVE BEEN RETURNED IMMEDIATELY AFTER TH E RECEIPT OF SALE CONSIDERATION. THESE FACTS CAN ALSO BE VERIFIED FRO M THE BANK STATEMENT. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE AO HAS NOT SINCERELY TRIED TO FIND OUT THE TRUTH AN D EXACT NATURE OF TRANSACTION DONE BY THE APPELLANT AND THE LANDLORDS . 7. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE AO HAS NOT ENQUIRED WITH THE LANDLORDS WHETHER THE SALES PROCEEDS 4 ITA NO. 6457/MUM/2011 ASSESSMENT YEAR: 2008-09 HAVE BEEN RECEIVED FROM THE APPELLANT, WHICH WAS SO LD BY THE APPELLANT ON THE STRENGTH OF POWER OF ATTORNEY GIVE N BY THE LANDLORD. 8. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE APPELLANT HAS NOT CHALLENGED THE ASSESSMENT ORDER P ASSED BY THE AO BEFORE THE LEARNED CIT(APPEAL) THAT THE ASSESSME NT IS AS BAD-IN- LAW AND VOID, WHEREIN THE FIRST PARA IT IS STATED T HAT 'RETURN OF INCOME WAS FILED ON 30/7/2008 DECLARING TOTAL INCOM E OF RS. 4,29,200/-. THE SAME WAS PROCESSED UNDER SECTION 14 3(1) OF THE IT ACT. 9. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LEARNED CIT(APPEAL) ERRED NOT ALLOWED THE APPEAL AL THOUGH THE APPELLANT WAS ON 100% BELIEF THAT THE LEARNED CIT(A PPEAL) WILL GIVE THE BENEFIT OF DOUBT TO THE APPELLANT AND THEREBY D ELETE THE SHORT TERM CAPITAL GAIN OF RS. 62,72,000/- SINCE THE APPE LLANT IS THE ONLY POWER OF ATTORNEY HOLDER GIVEN BY THE LANDLORDS. 10. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE IN LAW, THE AO HAS NOT SUPPLIED WITH THE INTIMATION UNDER SECTION 143(1) OF THE IT ACT ALONG WITH THE REFUND CLAIM ON THE REVISED RETU RN SUBMITTED BY THE APPELLANT ON 30/7/2009, BUT THE AO HAS CONSIDER ED THE RETURN OF INCOME FILED ON 30/7/2008 AND THE NOTICE UNDER S ECTION 143(2) DATED 13/9/2010. THE NOTICE UNDER SECTION 143(2) IS SERVED OUT OF DATE AS THE NOTICE UNDER SECTION 143(2) OF THE IT A CT SHOULD HAVE BEEN SERVED TO THE APPELLANT ON OR BEFORE 30/9/2009 . HENCE THE ORDER PASSED UNDER SECTION 143(3) DATED 30.12.2010 BY THE AO IS BAD IN LAW AND VOID. 11. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE IN LAW, THE APPELLANT PRAYS THAT EITHER THE ADDITION MADE BY TH E AO UNDER THE HEAD SHORT TIME CAPITAL GAIN MAY BE DELETED, SINCE THE APPELLANT IS ONLY A POWER OF ATTORNEY HOLDER OF THE LAND LORDS S /SHRI S.A FEREIRA, F.A FEREIRA AND MRS .Y. L DIAS (POWER OF ATTORNEY H OLDER CANNOT BE CONSIDERED AS THE OWNER OF THE PROPERTY AND NO TAX CAN BE LEVIED ON THE POWER OF ATTORNEY HOLDER) OR REQUEST YOUR HONOU R TO CANCEL THE ASSESSMENT MADE ON THE APPELLANT AS VOID AND BAND I N LAW, SINCE THE AO HAS PASSED THE ORDER UNDER 143(3) ON THE ORI GINAL RETURN OF 5 ITA NO. 6457/MUM/2011 ASSESSMENT YEAR: 2008-09 INCOME FILED 30/7/2008 AND AS SUCH NOTICE UNDER SEC TION 143(2) SHOULD HAVE BEEN SERVED ON THE APPELLANT ON OR BEFO RE 30/9/2009 AND IN THE APPELLANT'S CASE THE NOTICE UNDER SECTIO N 143(2) IS SERVED ON 30/9/2010, WHICH IS NOT A VALID SERVICE. THE APPELLANT THEREFORE PRAYED TO YOUR GOODSELVES T HAT THE ADDITION MADE AS SHORT TIME CAPITAL GAIN OF RS. 62,72,000/- (AS PER THE VALUATION REPORT 25,76,000/-) MAY PLEASE BE DELETED OR CANCEL THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) DATED 30/12/2010 AS INVALID AND BAD IN LAW. 5. BEFORE US, THE LD. DR RELYING ON THE ORDER PASSE D BY THE LD.CIT(A) SUBMITTED THAT THERE IS NO INFIRMITY IN THE IMPUGNE D ORDER TO INTERFERE WITH THE SAME. THE LD. CIT(A) HAS RIGHTLY DIRECTED THE AO TO RECOMPUTED THE TAXABLE CAPITAL GAIN AFTER TAKEN INTO CONSIDERA TION THE DVOS REPORT. 6. WE HAVE GONE THROUGH THE MATERIAL ON RECORD. THE ONLY ISSUE INVOLVED IN THIS APPEAL IS WHETHER THE LD. CIT (A) HAS ERRED IN DIRECTING THE AO TO COMPUTE THE SHORT TERM CAPITAL GAIN AFTER CONSIDERING DVOS REPORT. IN ORDER TO DECIDE THIS ISSUE IT IS NECESSA RY TO DISCUSS THE MATERIAL FACTS OF THE PRESENT CASE. THE ASSESSEE ENTERED INT O AN AGREEMENT FOR DEVELOPMENT OF LAND OWNED BY MRS. Y.L. DIAS, MR. FR ANCIS A. PAREIRA AND MR. STEPHEN A. PAREIRA VIDE POWER OF ATTORNEY DATED 02.07.2007. THE ASSESSEE INSTEAD OF DEVELOPING THE SAID LAND SOLD S OME PORTION OF THE SAID LAND FOR RS. 22,00,000/-. THE BUYER PAID RS. 3,13,6 00/-TOWARDS STAMP DUTY ON THE MARKET VALUE RS.62,70,000/- OF THE SAID LAND. DURING ASSESSMENT PROCEEDINGS THE ASSESSEE WAS ASKED AS TO WHY CAPITAL GAIN SHOULD NOT BE WORKED OUT U/S 50C OF THE ACT ON MARK ET VALUE OF RS. 62,72,000/-. THE ASSESSEE SUBMITTED THAT THE MARKET VALUE HAS BEEN OVER ASSESSED. SECONDLY, THE ASSESSEE CONTENDED THA T THE LAND WAS SOLD IN THE CAPACITY OF AN ATTORNEY OF THE LAND OWNERS A ND THE CONSIDERATION RECEIVED WAS HANDED OVER TO THE OWNERS CONCERNED. 6 ITA NO. 6457/MUM/2011 ASSESSMENT YEAR: 2008-09 7. AS REQUESTED BY THE ASSESSEE, THE AO REFERRED TH E MATTER REGARDING VALUATION OF THE LAND TO THE DEPARTMENTAL VALUATION OFFICER (DVO) FOR ITS REPORT AND THE OWNERS OF THE LAND WERE SUMMONED TO VERIFY THE CONTENTION OF THE ASSESSEE. NO RESPONSE WAS RECEIVE D FROM ANY OF THE OWNER. THE ASSESSEE FAILED TO PRODUCE ANY EVIDENCE TO PROVE THAT THE CONSIDERATION WAS PAID TO THE OWNERS. THE AO THEN M ADE ADDITION OF SHORT TERM CAPITAL GAIN OF RS. RS. 62,72,000/-SUBJE CT TO RECTIFICATION U/S 154 OF THE ACT AS PER DVO REPORT. 8. DURING THE FIRST APPELLATE PROCEEDINGS, THE ASSE SSEE SUBMITTED THAT DVO HAS SENT ITS REPORT TO THE AO AND THE FAIR MARK ET VALUE HAS BEEN ESTIMATED AT RS. 25,76,000/-. THE ASSESSEE FURTHER SUBMITTED THAT AO MAY BE DIRECTED TO PASS A PROTECTIVE ASSESSMENT ON THE TILL SUBSTANTIVE ASSESSMENT IS MADE IN THE HANDS OF THE LANDLORDS. E VEN DURING THE FIRST APPELLATE PROCEEDINGS THE ASSESSEE DID NOT PRODUCE ANY EVIDENCE TO PROVE THAT CONSIDERATION AMOUNT WAS PAID TO THE OWNERS OF THE LAND. UNDER THESE CIRCUMSTANCES, WE DO NOT FIND ANY FACTUAL OR LEGAL INFIRMITY IN THE ORDER OF THE LD. CIT(A). WE THEREFORE, UPHOLD THE F INDINGS OF THE LD. CIT(A) AND DISMISS THE SOLE GROUND OF THE APPEAL OF THE ASSESSEE 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE FOR THE A.Y. 2008-09 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT 18 TH JANUARY, 2017. SD/- SD/- ( JASON P BOAZ ) (RAM LAL NEGI) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED: 18/01/2017 7 ITA NO. 6457/MUM/2011 ASSESSMENT YEAR: 2008-09 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A)- 4. / CIT 5. !' , $ !'% , / DR, ITAT, MUMBAI 6. &' ( / GUARD FILE. / BY ORDER, ) //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI PRAMILA