Geetika Sachdev, Saharanpur V. ITO, Ward-3(2), Saharanpur

ITA 6638/DEL/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 9237 (ITAT-DELHI)
• Duration Of Justice: 8 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 17-10-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S L ANURAGI
• Keywords: Sale consideration of property below Jantri Value; Salary income; Principle of natural justice; Fair market value; Valuation report; Validity of assessment
• Section: 56(2)(vii)(b); 143(3); 56

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC, NEW DELHI BEFORE SH. R. K. PANDA, ACCOUNTANT MEMBER ITA NO.6638/DEL/2018 ASSESSMENT YEAR: 2014-15 SMT. GEETIKA SACHDEV D/O SH. KISHAN CHAND MEHTA MIG -232, DELHI ROAD, SAHARANPUR (U.P.) PAN NO.DIJPS2176H VS INCOME TAX OFFICER WARD 3 (2) SAHARANPUR (APPELLANT) (RESPONDENT) APPELLANT BY NONE RESPONDENT BY SHRI S. L. ANURAGI, SR. DR DATE OF HEARING: 01/07/2019 DATE OF PRONOUNCEMENT: 08/07/2019 ORDER PER R.K. PANDA, AM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 31.07.2018 OF THE CIT(A)-10, NEW DELHI RELATING TO A. Y. 2014-15. 2. DESPITE SERVICE OF NOTICE THROUGH RPAD NOBODY AP PEARED ON BEHALF OF THE ASSESSEE. IT WAS FURTHER SEEN THAT THE NOTICE ISSUED BY THE REGISTRY WAS RETURNED BY THE POSTAL A UTHORITIES WITH THE REMARKS NO SUCH PERSON. ASSESSEE HAS AL SO NOT TAKEN ANY STEPS TO INTIMATE THE CHANGED ADDRESS, IF ANY. THEREFORE, THIS APPEAL IS BEING DISPOSED OF ON THE BASIS OF PAGE | 2 MATERIAL AVAILABLE ON RECORD AND AFTER HEARING THE LD. DR. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE APPELL ANT, SMT. GEETIKA SACHDEV R/O H. NO. 497/19, MAIN ROAD, TOAHA NA DISTRICT FATEHABAD (HARYANA) IS DRAWING INCOME FROM SALARY, LONG TERM CAPITAL GAINS AND INCOME FROM OTHER SOURC ES. SHE FILED HER RETURN OF INCOME FOR A. Y. 2014-15 ON 26. 03.2016 DECLARING TAXABLE INCOME AT RS.1,39,370/-. THE CASE WAS SELECTED FOR LIMITED SCRUTINY AND ASSESSMENT UNDER SECTION 143 (3) OF THE INCOME TAX ACT, 1961 (THE ACT) WAS COMPL ETED ON 21.12.2016 DETERMINING TOTAL TAXABLE INCOME AT RS.3 4,25,370/- BY MAKING AN ADDITION OF RS.32,86,000/- U/S. 56 (2) (VII) (B) (II) OF THE ACT, ON ACCOUNT OF DIFFERENCE BETWEEN STAMP DUTY VALUE AND THE SALE CONSIDERATION PAID BY THE APPELLANT FO R THE PURCHASE OF A FLAT NO.203, ASRER-6, SUPER TECH E-CO URT, SECTOR- 93A, NOIDA. 4. IN APPEAL THE LD. CIT(A) RELYING ON VARIOUS DECI SIONS UPHELD THE ACTION OF THE ASSESSING OFFICER BY OBSER VING AS UNDER :- 8. GROUND OF APPEAL NO.L IS AGAINST ,THE VALIDITY OF ASSESSMENT PROCEEDINGS U/S 143(3) OF THE ACT. 9. THE APPELLANT HAS STATED IN THE GROUNDS OF APPEAL T HAT THE ORDER PASSED BY THE AO WAS OUT OF JURISDICTION AS SHE HAS SUBMITTED APPLICATION FOR THE TRANSFER OF THE CASE DUE TO CHANGE OF ADDRESS(FATEHBAD, HARYANA ). HOWEVER, THE PROCEEDINGS WERE NOT TRANSFERRED AND THE ASSESSMENT WAS COMPLETED BY THE AO (ITO WARD-3(2), SAHARANPUR). THE AR IN THE WRITTEN SUBMISSION HAS ARGUED THAT THAT THE APPELLANT WAS HAVING HER SOURCE OF INCOME (SALARY) FROM GURGAON AND PAGE | 3 WAS RESIDING AT NOIDA. THEREFORE, HER JURISDICTION WAS NOT WITH ITO WARD-3(2), SAHARANPUR, WHEREAS, THE AO HAS NOT TRANSFERRED THE PROCEEDINGS AND HAS COMPLETED THE ASSESSMENT U/S 143(3) OF THE ACT WITH OUT JURISDICTION. THE AR THUS ARGUED THAT SUCH ASSESSMENT SHOULD BE QUASHED. THE AO IN THE REMAND REPORT DATED 26-03-2018 VIDE LETTER DATED 03-04-2018 HAS S TATED THAT THE APPELLANT HAS SHOWN HER ADDRESS AS HOUSE NO.503, NEW AVAS VIKAS C OLONY, SAHARANPUR IN HER PAN. SHE HAS ALSO FILED HER RETURN OF INCOME FOR AY 2014-15 AT SAHARANPUR ADDRESS. SHE HAS NOT MADE ANY APPLICATION U/S 127 O F THE ACT BEFORE THE PRINCIPAL CIT, MUZAFFAMAGAR FOR THE TRANSFER OF JURISDICTION FROM SAHARANPUR TO FATEHBAD, HARYANA. THE AO HAS RELIED ON THE DECISION OF THE H ONBLE ALLAHABAD HIGH COURT IN THE CASE OF AYUSI STOCK BROKERS PVT. LTD. VS. AC IT (CIVIL MISC. WRIT PETITION NO.719, 1490 OF 2005). THE SUBMISSION OF THE AR AND REMAND REPORT OF THE AO ON THIS ISSUE HAVE BEEN REPRODUCED AS ABOVE FOR REFERE NCE. FROM THE MATERIAL ON RECORD, IT IS NOTED THAT THE A PPELLANT HAS SHOWN HER ADDRESS AT SAHARANPUR IN THE PAN PARTICULARS. SHE HAS FILED HER RETURN OF INCOME FROM HER SAHARANPUR ADDRESS. ONLY DURING THE ASSESSMENT PROC EEDINGS SHE HAS ONLY FILED A LETTER WITH THE AO TO TRANSFER THE PROCEEDINGS FROM SAHARANPUR TO FATEHBAD, HARYANA WITHOUT MAKING ANY FORMAL LETTER TO THE PRI NCIPAL, CIT, MUZAFFARNAGAR U/S. 127 OF THE ACT FOR TRANSFER OF JURISDICTION. THE APPELLANT HAS COMPLIED WITH THE ASSESSMENT PROCEEDINGS. IN THE CIRCUMSTANCES I T IS HELD THAT THERE IS NOT MERIT IN THE GROUND OF APPEAL TAKEN BY THE APPELLANT ON T HIS ACCOUNT AND THE AO HAS PASSED THE ASSESSMENT ORDER U/S. 143 (3) WITH VALID JURISDICTION OVER THE CASE. GROUND OF APPEAL NO.1 IS DISMISSED. 10. GROUND OF APPEAL NO.2 IS AGAINST THE ADDITION OF RS .32,86,000/- ON ACCOUNT OF INCOME FROM OTHER SOURCES U/S. 56 92) (V II) (B) OF THE ACT. 11. THE BRIEF FACTS OF THE CASE AS MENTIONED IN THE AS SESSMENT ORDER ARE AS UNDER:- THE APPELLANT HAS PURCHASED A FLAT DURING THE YEAR UNDER CONSIDERATION IN SECTOR 93A, NOIDA AT ASTER 6/203,1ST FLOOR, SUPERTECH EM ERALD COURT FOR RS.90 LAC ON 01- 10-2013, WHEREAS, THE VALUE OF THE SAID FLAT AS PER THE STAMP DUTY VALUATION PAGE | 4 WAS FOR RS. 1,22,86,000/-. THE AO AFTER CONFRONTING THE APPELLANT HAS MADE ADDITION OF RS.32,86,000/- AS INCOME OF THE APPELLA NT FROM OTHER SOURCES U/S 56(2)(VII)(B) OF THE ACT. IT HAS BEEN STATED BY THE AR THAT IN RESPONSE TO THE SHOW CAUSE NOTICE ISSUED BY THE AO, THE APPELLANT HAS OB JECTED VIDE LETTER DATED 12-12- 2016 BEFORE THE AO THAT THE FLAT HAS BEEN PURCHASED ON 01-10-2013 FOR RS.90 LAC AT THE PREVAILING MARKET RATE. THE AR FURTHER STATE D THAT THE FLAT PURCHASED BY THE APPELLANT ON THE 1ST FLOOR WHICH LACKED AIR CIRCULA TION AND LIGHT AND RATES OF LOWER FLOORS ARE LESS THAN THE UPPER FLOORS WHEREAS CIRCLE RATES ARE UNIFORM FOR ALL THE FLATS IRRESPECTIVE OF THEIR LOCATION AND CONDIT ION. THE AR ARGUED THAT THE AO HAS NOT REFERRED THE CASE TO VALUATION OFFICER AS R EQUIRED UNDER THE PROVISO TO SECTION 50C(2) OF THE ACT. THEREFORE, IN ORDER TO M EET THE PRINCIPLE OF NATURAL JUSTICE, THE MATTER WAS REFERRED TO THE DVO, MEERUT TO DETERMINE FAIR MARKET VALUE OF THE FLAT PURCHASED. THE DVO VIDE HIS REPOR T DATED 18-04-2018, AFTER CONSIDERING THE OBJECTIONS RAISED BY THE APPELLANT VIDE HER LETTER NO. NIL DATED 04-04-2018 AND OTHER EVIDENCES PRODUCED BY THE APPE LLANT BEFORE HIM, HAS ESTIMATED THE FAIR MARKET VALUE OF THE SAID FLAT AT RS.98,40,000/-. THE SAID VALUATION REPORT WAS MADE AVAILABLE TO THE APPELLAN T. SUBSEQUENTLY THE AR VIDE LETTER DATED 15-05-2018 HAS STATED THAT THE DVO HAS ESTIMATED THE FAIR MARKET VALUE OF THE SAID FLAT ON THE HIGHER SIDE THAN DIE ACTUAL PREVAILING MARKET PRICE AT THAT TIME. IT WAS POINTED OUT BY THE AR IN THE SAID LETTER THAT THE DVO HAS CONSIDERED THE COMPARABLE RATES FOR THE FLATS SOLD IN PARSVANATH PRESTIGE APARTMENTS, SECTION 93A, NOIDA AND HAS NOT CONSIDER ED COMPARABLE RATES FOR THE FLATS SOLD IN SUPERTECH EMERALD. AND FURTHER HE HAS NOT CONSIDERED THE FACT THAT THE FLATS AT THE LOWER FLOORS ARE CHEAPER THAN AT U PPER FLOORS. THE AR PRODUCED SOME SAMPLE SALE DEEDS TO SUPPORT HIS SUBMISSION. I T WAS FURTHER POINTED OUT THAT THE DIFFERENCE BETWEEN SALE CONSIDERATION SHOWN BY THE APPELLANT AT RS.90 LAC AND FAIR MARKET VALUE ESTIMATED BY THE DVO AT RS.984000 0/- WAS LESS THAN 10% AND ARGUED THAT SUCH DIFFERENCE IS LIABLE TO BE IGNORED . THE AR RELIED UPON THE DECISION OF THE HONBLE IT AT, PUNE IN THE CASE OF SITABAI KHETAN VS. ITO 88 TAXMAN.COM 377. THE DETAILED SUBMISSION OF THE AR H AS BEEN REPRODUCED AS ABOVE. PAGE | 5 THE FACTS OF THE CASE ALONG WITH MATERIAL ON RECORD HAVE BEEN GONE THROUGH. THE APPELLANT HAS DISPUTED THE ADDITION TO BE MADE AS M ENTIONED IN THE SHOW CAUSE NOTICE ISSUED BY THE AO U/S 56(2)(VII)(B) OF THE AC T BY STATING THAT THE PURCHASE CONSIDERATION PAID BY HER WAS AS PER PREVAILING MAR KET RATE AT THAT TIME. HOWEVER, THE AO HAS NOT REFERRED THE MATTERTO THE D VO FOR THE DETERMINATION OF THE FAIR MARKET VALUE OF THE FLAT PURCHASED AS REQU IRED UNDER THE RELEVANT PROVISIONS OF THE ACT. ACCORDINGLY THE AO HAS BEEN DIRECTED DURING THE APPELLATE PROCEEDINGS TO MAKE SUCH REFERENCE TO THE DVO TO ME ET THE PRINCIPLE OF NATURAL JUSTICE. THE DVO, AFTER CONSIDERING THE OBJECTIONS OF THE APPELLANT AND OTHER EVIDENCES PRODUCED BEFORE HIM BY THE APPELLANT, HAS DETERMINED THE FAIR MARKET VALUE OF THE SAID FLAT AT RS.98,40,000/-. THE AR HA S RAISED CERTAIN MORE OBJECTIONS AGAINST THE DETERMINATION FMV BY THE DVO DURING THE APPELLATE PROCEEDINGS BY STATING THAT THE DVO HAS NOT CONSIDERED COMPARABLE SALE DEEDS AND LOCATION OF THE FLAT PROPERLY. HOWEVER, THE AR ALSO STATED DURI NG THE APPELLATE PROCEEDINGS THAT OBJECTIONS SHOULD NOT BE SENT TO THE DVO ONCE AGAIN AND SHOULD BE CONSIDERED IN DECIDING THE GROUND OF APPEAL BY THE UNDERSIGNED. FROM THE FACTS OF THE CASE IT IS NOTED THAT REFERENCE HAS BEEN MADE T O THE DVO TO DETERMINE THE FMV OF THE FLAT PURCHASED BY THE APPELLANT ONLY DUE TO OBJECTION OF THE APPELLANT AND THE DVO HAS DETERMINED THE FMV AT RS.9840000/- AFTER CONSIDERING THE OBJECTIONS OF THE APPELLANT AND OTHER EVIDENCES PRO DUCED BEFORE HIM BY THE APPELLANT. .THE DVO BEING AN EXPERT ON THE SUBJECT, HIS REPORT IS TAKEN AS FINAL ON THIS ISSUE. THEREFORE, THERE IS NO JUSTIFICATION FO R FURTHER ALTERING THE FMV DETERMINED BY THE DYO AND FURTHER OBJECTIONS RAISED BY THE APPELLANT ARE HEREBY REJECTED. ACCORDINGLY UNDER THE FACTS OF THE CASE T HE ADDITION MADE BY THE AO IS CONFIRMED TO THE EXTENT OF RS.8,40,000/- AND THE BA LANCE ADDITION IS HEREBY DELETED. GROUND OF APPEAL NO.2 IS PARTLY ALLOWED. 5. AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE ASS ESSEE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING FOLLOWING GRO UNDS OF PAGE | 6 APPEAL :- 1. UPHOLDING THE VALIDITY OF ASSESSMENT WHICH IS WI THOUT JURISDICTION; 2. CONFIRMING THE ADDITION MADE U/S. 56 (2) (VII) (B ) (II) OF THE INCOME TAX ACT, 1961 TO THE EXTENT OF RS.8,40,000/- . 6. AFTER HEARING THE LD. DR AND ON PERUSAL OF THE O RDERS OF THE AUTHORITIES BELOW, I DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) IN PARTLY SUSTAINING THE ADDITION MADE B Y THE ASSESSING OFFICER. THE LD. CIT(A) HAS GIVEN VALID REASONS FOR UPHOLDING PART OF THE DISALLOWANCE MADE BY THE ASSE SSING OFFICER. IN MY OPINION THE ORDER OF THE CIT(A) IS A REASONED ONE WHICH CALLS FOR NO INTERFERENCE. ACCORDINGLY THE S AME IS UPHELD AND THE GROUNDS RAISED BY THE ASSESSEE ARE DISMISSE D. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 08.07.2019. SD/- (R.K PANDA) ACCOUNTANT MEMBER *NEHA* DATE:- 08.07.2019 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI PAGE | 7 DATE OF DICTATION 01.07.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 02.07.2019 DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS /PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/ PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WE BSITE OF ITAT 08.07.2019 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH FILE GOES TO THE HEAD CLERK. THE DATE ON WHICH FILE GOES TO THE ASSISTANT REGIST RAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER