Sheth Cement Products Pvt. Ltd., Ahmedabad V. The Income Tax Officer, Ward-8(3), Ahmedabad

ITA 695/AHD/2014

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9883 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 8 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 27-06-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 07-03-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL

Judgement Text

, C IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH, AHMADABAD BEFORE: SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH , ACCOUNTANT MEMBER ITA NO. 695/AHD/2014 ASSESSMENT YEAR : 2009-10 SHETH CEMENT PRODUCTS PVT. LTD. D-3, PUSHPAM CO. OPERATIVE HOUSING SOCIETY, ST. XAVIERS COLLEGE CORNER, NAVRANGPURA, AHMEDABAD - 380009 V S . INCOME TAX OFFICER, WARD 8(3), AHMEDABAD PAN NO. AAHCS2651R (APPELLANT) .. (RESPONDENT) /BY ASSESSEE SHRI PRITESH SHAH, A.R. /BY REVENUE SHRI KAMLESH MAKWANA, SR. D.R. /DATE OF HEARING 03/12/2018 /DATE OF PRONOUNCEMENT 05/12/2018 O R D E R PER : RAJPAL YADAV, JUDICIAL MEMBER THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAIN ST THE ORDER OF THE CIT(A)-XXI, AHMEDABAD DATED 30.01.2014 PASSED FOR A Y 2009-10. 2. IN THE FIRST GROUND OF APPEAL, GRIEVANCE OF THE ASSESSEE IS THAT THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.20LAKHS IN THE CALCULATION OF SHORT TERM CAPITAL GAIN UNDER S.50(1 ) OF THE INCOME TAX ACT. ITA NO. 695/AHD/14 A.Y.2009-10 (SHETH CEMENT PRODUCTS PVT. LTD. VS. ITO) PAGE 2 3. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE HA S FILED ITS RETURN OF INCOME ELECTRONICALLY ON 16 TH SEPTEMBER, 2009 DECLARING TOTAL INCOME AT RS.2,20,290/-. THE CASE OF THE ASSESSEE WAS SELECT ED FOR SCRUTINY ASSESSMENT AND NOTICE UNDER S.143(2) OF THE ACT WAS ISSUED AND SERVED UPON THE ASSESSEE. THE AO GOT INFORMATION FROM ANNUAL INFORMATION REPO RT WING EXHIBITING THAT ASSESSEE HAS SOLD IMMOVABLE PROPERTY VALUED AT RS.40LAKHS BY REGISTERED SALE DEED. HOWEVER, WHILE COMPUTING THE CAPITAL GAIN IT HAS SHOWN THE SALE CONSIDERATION AT RS.20 LAKHS. LEARNED AO HAS EXAMINED THIS ASPECT AND ULTIMATELY TOOK THE VALUE OF THE IMMOVABLE PROP ERTY AT RS.40 LAKHS AND COMPUTED SHORT TERM CAPITAL GAIN. THE CASE OF THE ASSESSEE IS THAT IT HAD PURCHASED A PROPERTY FROM GUJARAT FINANCIAL CORPORA TION WHICH WAS SOLD TO SHRI RAJENDRA BABULAL VANI ON 23 RD MAY, 2008. AS PER THE SALE DEED, VALUE WAS CONSIDERED AT RS.40 LAKHS. ACCORDING TO THE AS SESSEE, SHRI VANI CARRIED OUT A SURVEY OF THE FACTORY PREMISES AND INFORMED T HE ASSESSEE THAT CERTAIN MACHINERIES WERE IN BAD SHAPE IT CANNOT FETCH THIS MUCH VALUE. HENCE, ASSESSEE HAS AGREED FOR THE RETURN OF RS.20 LAKHS. THE ASSESSEE HAS CONSIDERED THOSE RS.20 LAKHS UNSECURED DEPOSITS ON BEHALF OF SHRI VANI IN ITS BOOKS OF ACCOUNTS. ACCORDINGLY, IN THE COMPUTATION OF CAPITAL GAIN, ASSESSEE TOOK VALUE OF RS.20 LAKHS ONLY. THE LEARNED AO WAS NOT SATISFIED WITH THIS CALCULATION OF ASSESSEE AND REJECTED THE SAME. HE TOOK THE VALUE AT RS.40 LAKHS AND CONFIRMED THE CAPITAL GAIN. 4. THE APPEAL TO THE CIT(A) DID NOT BRING ANY RELIE F TO THE ASSESSEE. 5. WITH THE ASSISTANCE OF LEARNED REPRESENTATIVES, WE HAVE GONE THROUGH THE RECORDS CAREFULLY. THE ONLY EVIDENCE REFERRED BY THE LEARNED COUNSEL FOR THE ASSESSEE IN SUPPORT OF THE CONTENTION OF THE AS SESSEE IS THE LETTER OF RAJENDRA VANI DATED 28 TH MAY, 2008 WHICH IS PLACED ON PAGE NO.115 OF THE PAPER BOOK. IT READ AS UNDER: ITA NO. 695/AHD/14 A.Y.2009-10 (SHETH CEMENT PRODUCTS PVT. LTD. VS. ITO) PAGE 3 MOHIT CEMENT PVT. LTD. MOBHA VILLAGE MUVAD CROSS ROADS, DIST VADODARA DATE: 28/5/2008 TO, SHETH CEMENT PRODUCTS PVT. LTD. THIRD FLOOR, PUSHPAM BUILDING, ST. XAVIERS COLLEGE CORNER, BESIDES CAMPUS CORNER, NAVRANGPURA, AHMEDABAD DEAR SIR, SUBJECT: IN THE MATTER OF REIMBURSEMENT OF ADDITION AL PAYMENT. THIS IS MOST RESPECTFULLY REQUESTED THAT THE AMOUN T OF CONSIDERATION OF RS. 40 LAKH WAS DECIDED BETWEEN US FOR THE PURCH ASE OF THE FACTORY AND ACCORDINGLY, THE SALE DEED HAS BEEN EXECUTED. HOWEV ER, THE MACHINERY IN THE FACTORY IS NOT ADEQUATE AND THEY HAVE BEEN STOL EN. IN THIS REGARD, A DISPUTE IS GOING ON BETWEEN GSFC. MOREOVER, THERE I S ALSO A POSSESSION OF UNAUTHORIZED PERSON OVER THE LAND AND AS PER MUTUAL LY DECIDED, YOU HAVE TO GIVE BACK THE AMOUNT OF RS. 20 LAKH AND THE SAM E AMOUNT OF US IS TO BE KEPT AS A LOAN AND IT IS REQUESTED TO RETURN US (TO REVERSE) BACK THE SAME IN CASE THE DISPUTE IS UNRESOLVED. OUR PAN NO. OS AEHP V7297M AND OUR ASSESSMENT IS MADE IN WARD/CIRCLE ____ BARODA. THANKING YOU. YOURS FAITHFULLY, MOHIT CEMENT PVT. LTD., SD/- RAJU VANI. WE HAVE CONFRONTED THE LEARNED COUNSEL TO SHOW US THE SURVEY CARRIED OUT BY THE TECHNICAL PERSON SHOWING THE DEPILATED C ONDITION OF THE BUILDING AND MACHINERY, RESOLUTION/AGREEMENT BETWEEN THE ASS ESSEE AND SHRI VANI FOR REDUCTION OF THE SALE CONSIDERATION, REFUND OF THE SALE CONSIDERATION AND MODIFICATION OF SALE DEED, NO SUCH DOCUMENTS HAVE B EEN REFERRED EVERYTHING HAS BEEN SUBMITTED ORALLY EXCEPT THE ABOVE LETTER. IT IS PERTINENT TO OBSERVE THAT IN THIS LETTER ALSO RS.20 LAKHS WAS AGREED TO BE KEPT IN SUSPENSE ACCOUNT I.E. ON BEHALF OF MOHIT CEMENT, SHRI RAJENDRA VANI. IT IS ONE SIDE OBSERVATION. IT IS TO BE PAID BACK TO THE PURCHASE R ON RESOLUTION OF THE DISPUTE. THE ASSESSEE HAS TO COMPUTE THE CAPITAL G AIN TAKING INTO ITA NO. 695/AHD/14 A.Y.2009-10 (SHETH CEMENT PRODUCTS PVT. LTD. VS. ITO) PAGE 4 CONSIDERATION THE SALE CONSIDERATION AGREED AND PAI D BY THE PURCHASER IN THE SALE DEED. IF THERE IS ANY SUBSEQUENT DEVELOPMENT AND ASSESSEE HAS RELINQUISHED CERTAIN RIGHTS IN FAVOUR OF THE PURCHA SER THEN ITS TREATMENT COULD BE GIVEN SUBSEQUENTLY IN THE YEAR IN WHICH ACTUALLY SUCH INCIDENT TOOK PLACE. THERE IS NOTHING ON THE RECORD EXCEPT A BALD STATEM ENT. THERE IS NO MATERIAL WITH THE ASSESSEE SHOWING THAT IT HAS NOT RECEIVED RS.40 LAKHS. THEREFORE, WE DO NOT FIND ANY MERIT IN THE SUBMISSIONS MADE BY THE LEARNED COUNSEL, ON THIS GROUND OF APPEAL, IT IS REJECTED. 6. IN THE NEXT GROUND OF APPEAL, ASSESSEE HAS PLEAD ED THAT LEARNED CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF RS.20,0 00/- UNDER S.37 OF THE INCOME TAX ACT. NO ARGUMENTS WERE RAISED ON THIS G ROUND OF APPEAL, HENCE IT IS REJECTED. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED. THIS ORDER PRONOUNCED IN OPEN COURT ON 05/12/2 018 SD/- SD/- (AMARJIT SINGH) (RAJPAL YADAV) ACCOUNTANT MEMBER J UDICIAL MEMBER AHMEDABAD: DATED 05/12/2018 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. ! '# $ / CONCERNED CIT 4. $ - / CIT (A) 5. %&' (('# , '# , ! / DR, ITAT, AHMEDABAD 6. '+, / GUARD FILE. BY ORDER/ , / '# , !