ACIT, Jaipur V. SHIR IQBAL SINGH GAMBHIR, Jaipur

ITA 699/JPR/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62019 (ITAT-JAIPUR)
• Duration Of Justice: 9 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-05-2012
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 27-07-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VINOD JOHRI
• Assessee Lawyers: G G MUNDRA
• Keywords: Corroborative evidences

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH : A JAIPUR. BEFORE SHRI R.K. GUPTA AND SHRI SANJAY ARORA ITA NO. 699/JP/2011 ASSTT. YEAR : 2008-09 PAN :ABIPG 1416 B THE ACIT VS. SHRI IQBAL SINGH GAMBHIR CIRCLE- 3 F-114A, JANPATH, SHYAM NAGAR JAIPUR JAIPUR (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VINOD JOHRI RESPONDENT BY SHRI G.G. MUNDRA DATE OF HEARING : 07.05.2012 DATE OF PRONOUNCEMENT : 11.05.2012 ORDER DATE OF ORDER :11/05/2012. PER R.K. GUPTA, J.M. THIS IS AN APPEAL BY THE REVENUE AGAINST THE ORD ER OF THE LD. CIT(A) RELATING TO ASSESSMENT YEAR 2008-09 WHEREIN THE DEPARTMENT HA S AGITATED THE DELETION OF ADDITION OF RS. 11.19,096/- AND RS. 26,96,750/- WHICH WAS MA DE BY THE AO ON ACCOUNT OF SHORT TERM CAPITAL GAIN ON SALE OF FOUR PLOTS AT PRATAP N AGAR AND TWO FARM HOUSES AT JAISINGHPURA. 2.1 THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE IS AN INDIVIDUAL AND DERIVING INCOME FROM FIRM, INCOME FROM INTEREST AND CAPITAL GAINS. THE ASSESSEE FILED HIS RETURN OF INCOME ON 9.9.08 DECLARING AN INCOME OF RS. 39,88,0 51/-. THE SAID INCOME INCLUDED SHORT TERM CAPITAL GAIN OF RS. 12,60,904/- ON SALE OF 4 P LOTS OF LAND AT PRATAP NAGAR TRANSFERRED THROUGH AGREEMENT TO SALE WITH POSSESSION AND LONG TERM CAPITAL GAIN OF RS. 498034/- 2 FROM SIMILAR TRANSFER OF FARM HOUSE LAND IN JAISING HPURA. THE CASE WAS TAKEN UP FOR SCRUTINY. IN COMPLIANCE TO THE STATUTORY NOTICE U/S 143 (3) INFORMATION AND DOCUMENTS WERE PRESENTED BEFORE THE AO AS RECORDED IN HIS ASS ESSMENT ORDER. AFTER EXAMINING THESE DOCUMENTS, THE AO MADE THE FOLLOWING ADDITIONS: - A) ADDITION ON ACCOUNT OF 4 PLOT NOS. 39, 40, 67 & 68 AT PRATAP NAGAR, JAIPUR. ALL THESE 4 PLOTS WERE SOLD UNDER THE AGREE MENT AND ARE NOT UNDER REGISTERED CONVEYANCE DEEDS ON 17.10.07 TO SMT. SAR LA GUPTA W/O SH. O.P. GUPTA AGAINST THE SALE CONSIDERATION AS UNDER:- PLOT NO. SALE AMOUNT 39 385452/- 40 945000/- 67 945000/- 68 385452/- TOTAL VALUE 2660904/- THE AO OBSERVED IN HIS ASSESSMENT ORDER THAT SINCE SIZE OF THE PLOTS WERE IDENTICAL THERE WAS NO JUSTIFICATION OF SELLING PLO T NOS. 39 & 68 AT A LOWER RATE PARTICULARLY WHEN THE ASSESSEE SOLD THEM TO ONE BUY ER. HE ALSO MENTIONED THAT THE ASSESSEE HAD NOT GIVEN ANY CONVINCING REPLY. B) AN ADDITION OF RS. 26,96,750/- WAS MADE ON ACCOU NT OF SALE OF AGRICULTURAL FARM NO. E-1 AND E-4 IN JAISINGHPURA S CHEME OF JDA, JAIPUR, HELD JOINTLY BY THE ASSESSEE AND HIS BROTHER SH. RAM PRA KASH GAMBHIR TO SH. ATMARAM GUPTA. THE AO OBSERVED THAT BOTH THESE FARM HOUSES WERE PURCHASED FROM JDA ON 10.10.06. FIFTY PERCENT OF THE ASSESSEES SHARE OF COST WAS RS. 13988327/-. THESE WERE SOLD UNDER AN AGREEMENT DATED 30.8.07 AN D 50% OF THE ASSESSEES SHARE CAME TO RS. 1.45 CRORES. THE AO OBSERVED THA T THE TOTAL AREA OF THESE TWO FARM HOUSES WAS 7643 SQ. MTRS. AND THE SALE VALUE A S PER AGREEMENT WAS RS. 3794 PER SQ. MTRS. HE HELD THIS VALUE TO BE INADEQUATE A ND NOT ACCEPTABLE. HE ALSO OBSERVED IN HIS ORDER THAT AS THE ASSESSEE HAD FAIL ED TO FURNISH ANY CORROBORATIVE EVIDENCE THE VALUE AT PREVAILING MARKET RATE SHOULD BE TAKEN AT RS. 4500 PER SQ. MTS. AT THIS RATE THE TOTAL VALUE OF THE TRANSACTIO N WAS DETERMINED AT RS. 3,43,93,500/- AND THE SHARE OF THE ASSESSEE DETERMI NED AT RS. 17,19,60,750/-. THE 3 DIFFERENCE BETWEEN THIS ESTIMATE AND THE RECEIPT SH OWN BY THE ASSESSEE WAS RS. 26,96,750/- WHICH WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 2.2 THE WRITTEN SUBMISSIONS WERE FILED BEFORE THE L D. CIT(A) WHICH HAS BEEN TABULATED AT PAGE 3 IN THE ORDER OF THE LD. CIT(A) AND THE SAME ARE AS UNDER:- (I) IT IS CORRECT THAT WHILE PURCHASING THE PLO TS EACH PLOT HAS AN AREA OF 350 SQ. YDS. AS PER SCHEME OF DEVELOPER OF COLONY B UT LATER ON IN RESPECT TO PLOT NO. 39 & 68 WHICH WERE OPENING ON MAIN ROAD THE R.H .B. INCREASED THE ROAD WIDTH AND DUE TO THAT THE PLOT SIZE OF EACH OF PLOT NO. 39 AND 68 WAS GOT REDUCED BY 207.27 SQ. YDS. AND PLOT REMAINED OF THE SIZE OF 142.73 SQ.YDS. THIS IS THE REASON THAT THE LOWER SALE PRICE FOR PLOT NO. 39 & 68 WAS RECEIVED. THE FACT IS FULLY DISCLOSED IN AGREEMENT TO SALE AND ASSESSEES LETTER TO DEVELOPER COMPANY OF COLONY AND FROM THEIR REPLY. (II) REGARDING THE ADDITION MADE ON ACCOUNT OF SALE OF AGRICULTURAL FARM HOUSE NO. E-1 & E-4 AT JAISINGHPURA SCHEME, HE SUBMITTED THAT NO ENQUIRY WAS MADE BY THE AO TO DETERMINE MARKET VALUE. THE A SSESSEE HAD DECLARED TRUE AND CORRECT SALE CONSIDERATION IN AGREEMENT TO SALE . THE JDA APPROVED FARM HOUSE LAND WHICH WAS TRANSFERRED BY AS WAS JOINTLY HELD BY HIM WITH HIS BROTHER RAM PRAKASH GAMBHIR (EACH HAVING SHARE) WHO HAD A LSO DECLARED SAME CAPITAL GAIN WHICH WAS ACCEPTED IN HIS CASE VIDE ASSESSMENT COMPLETED US/ 143(2). (III) IT WAS FURTHER SUBMITTED THAT ON 25/5/07 I.E. JUST ABOUT THE DATE OF AGREEMENT TO SALE EXECUTED BY THE ASSESSEE, SIMILAR JDA FARM HOUSE LAND SITUATED JUST OPPOSITE TO HIS PROPERTY WAS SOLD THR OUGH REGISTERED SALE DEED BY SOME OTHER PERSON @ 2976/- PER SQ. MT. COPY OF WHIC H WAS SUBMITTED. IT WAS CONTENDED THAT THE ASSESSEE HAD SOLD HIS PROPERTY @ RS. 3,794/- PER SQ. MT. WHICH WAS AT A HIGHER RATE. (IV) THE ASSESSEE ALSO IN PURSUANCE TO THE SAID AGR EEMENT OF SALE, LATER GOT THE SALE DEED REGISTERED ON 7/3/10. EVEN ON THA T DATE DECLARED SALE 4 CONSIDERATION OF RS. 2,90,00,000/- ( SHARE OF ASSE SSEE RS. 1,45,00,000/-) WAS MORE THAN THAT ESTIMATED BY THE SUB-REGISTRAR AT RS . 1,37,91,625/- FOR PURPOSE OF STAMP DUTY VALUATION. THUS IT WAS EVIDENT THAT DECL ARED SALE CONSIDERATION WAS TRUE AND CORRECT AND LD. A.O. HAD MADE AN ARBITRARY ADDITION WHICH DESERVES TO BE DELETED. 2.3 AFTER CONSIDERING THE SUBMISSIONS AND PERUSING THE MATERIALS ON RECORD, THE LD. CIT(A) GAVE THE FOLLOWING FINDINGS:- 5. I HAVE CAREFULLY PERUSED THE ORDER OF THE AO A ND SUBMISSION OF THE AR. ON VERIFICATION OF THE FACTS GIVEN BY THE AR FROM THE DOCUMENTS SUBMITTED IN THE PAPER BOOK, HIS CONT ENTION IS ADMISSIBLE. PLOT NO. 68 WAS PURCHASED FROM SMT. SARLA GUPTA AND AS PER IKRARNAMA PAGE 15 OF THE PAPER BOOK IT HAS BEEN CLEARLY MENTI ONED THAT: - ;G FD MIJKSDR IYKV UECJ 68 DK MRRJH FGLLK IYKV YXHK X IWOZ LS IF'PE 70 QHV] MRRJ LS NF{K.K 26 QHV 8 BAP VUQEKFUR {K S=QY 207-27 OXZXT 60 EHVJ @ 200 QHV PKSMH LMD DH VFRFJDR PKSMKBZ GSRQ VOKIR FD;K TKUK IZLRKFOR GS A ;G FD IZFKE I{K US MDR YXHKX 207-27 OXZXT VOKIR GKS US OKYH HKWFE DK HKQXRKU F}RH; I{K LS DE IZKIR FD;K GS SIMILARLY, PLOT NO. 39 WAS PURCHASED FROM SMT. SARL A GUPTA AND AS PER IKRARNAMA DATED 17.10.07 FROM PAGE 27 OF PAPER BOOK, IT HAS BEEN CLEARLY MENTIONED THAT:- ;G FD MIJKSDR IYKV UECJ 68 DK MRRJH FGLLK IYKV YXHKX IWOZ LS IF'PE 70 QHV] M RRJ LS NF{K.K 26 QHV 8 BAP VUQEKFUR {KS=QY 207-27 OXZXT 60 EHVJ@200 QHV P KSMH LMD DH VFRFJDR PKSMKBZ GSRQ VOKIR FD;K TKUK IZLRKFOR GS A ;G FD IZFKE I{K US MDR YXHKX 207-27 OXZXT VOKIR GKS US OKYH HKWFE DK HKQXRKU F}RH; I{K LS DE IZKIR FD;K GS A 5.1 THE AO HAS MENTIONED THAT SIZE OF EACH OF THE 4 PLOTS WAS 350 SQ.YDS. HOWEVER, ON VERIFICATION FROM THE IKRAR NAMA, IT IS SEEN THAT IN THE CASE OF PLOTS NOS. 39 & 68 APPROXIMATELY 207.27 SQ.YDS. WAS ACQUIRED BY THE JDA, AND WERE THUS SMALLER THAN PLOTS NO.S 4 0 & 67. IT IS NOT SURPRISING THAT THE VALUE OF CONSIDERATION RECEIVED WAS ALSO LESS FOR THESE PLOTS BEING SMALLER IN SIZE. THIS FACT HAS ALSO BEE N MENTIONED IN THE IKRARNAMA AS MENTIONED ABOVE. THE ADDITION MADE OF RS. 11,19,096/- ON THIS ACCOUNT HAS BEEN MADE WITHOUT TAKING INTO CONS IDERATION THIS FACT AND IS DELETED. FIRST GROUND OF APPEAL IS DECIDED IN FA VOUR OF THE ASSESSEE . 5.2 ON PERUSAL OF THE SUBMISSION AND CORROBORATIVE EVIDENCE FILED REGARDING SALE OF FARM HOUSE LAND NO. E-1 & E -4 IN JAISINGHPURA 5 SCHEME BY THE ASSESSEE AND HIS BROTHER VIDE AGREEME NT DATED 30.8.07, IT IS SEEN THAT THE AO HAS NOT BROUGHT ANYTHING ON RECORD TO INDICATE HOW THE MARKET RATE WAS DETERMINED BY HIM AT RS. 4500 PER S Q. MTRS. FROM THE ORDER IT APPEARS TO BE AN ESTIMATE. THE AR ON THE O THER HAND HAS FURNISHED THE FOLLOWING CORROBORATIVE EVIDENCES IN SUPPORT OF HIS CLAIM:- A) A REGISTERED SALE DEED DATED 25.5.07 OF FARM HOU SE LAND SITUATED OPPOSITE TO THE FARM HOUSE OF THE ASS ESSEE. AS PER THE SALE DEED RATE OF LAND WAS RS. 2,976/- PER SQ. MTRS . IF THIS IS TAKEN AS THE PREVAILING MARKET RATE THEN THE ASSESSEE SOL D HIS LAND AT A HIGHER RATE OF RS. 3794/- PER SQ. MTRS. B) THE MOST IMPORTANT EVIDENCE WHICH THE AR HAS SUBMITTED ARE THE COPIES OF REGISTRATION OF THE SAI D FARM HOUSE LAND, IN HIS PAPER BOOK PAGE NO. 56 AND 62 WHEREIN THE OFFICE OF THE SUB REGISTRAR, SANGANER HAS EVALUATED THE VALUE OF THIS FARM HOUSES AT RS. 97,15,500/- AND RS. 40,76,125/- FOR T HE PURPOSE OF DETERMINING STAMP DUTY. C) FINALLY THE FACT THAT THE DEPARTMENT HAS ACCEPTE D THE VALUE OF SALE CONSIDERATION RECEIVED IN THE CAS E OF HIS BROTHER FOR THE SAME TRANSACTION ALSO GOES IN FAVOUR OF THE ASSESSEE. 53 IN VIEW OF THE ABOVE FACTS, I HOLD THAT THE ESTI MATE MADE BY THE AO TO HAVE BEEN WITHOUT ANY BASIS AND THE ADDIT ION OF RS. 26,96,750/- MADE ON ACCOUNT OF SALE OF FARM HOUSES LAND AT JAIS INGHPURA IS DELETED. SECOND GROUND OF APPEAL IS DECIDED IN FAVOUR OF THE ASSESSEE. 2.4 NOW THE DEPARTMENT IS IN APPEAL HERE BEFORE THE TRIBUNAL. 2.5 THE LD. DR STRONGLY PLACED RELIANCE ON THE ORDE R OF THE AO. IT WAS FURTHER SUBMITTED THAT THOUGH THE LD. CIT(A) HAS DECIDED TH E APPEAL ON THE BASIS OF THE AGREEMENT FILED AND WITH OTHER DETAILS. HOWEVER, THE AO SHOUL D HAVE BEEN ALLOWED OPPORTUNITY FOR NECESSARY VERIFICATION. 2.6 ON THE OTHER HAND, THE LD. AR OF THE ASSESSEE S TATED THAT ALL THE DETAILS WHICH WERE FILED BEFORE THE LD. CIT(A) WERE ALSO FILED BEFORE THE AO. THEREFORE, THERE WAS NO QUESTION THAT THE AO WAS NOT ALLOWED ANY OPPORTUNIT Y. THE LD. CIT(A) HAS GIVEN THE FINDINGS ON THE BASIS OF THE DOCUMENTS AND EVIDENCE PLACED BEFORE HIM WHICH WERE FILED 6 BEFORE THE AO ALSO. THE ATTENTION OF THE BENCH WAS DRAWN TOWARDS VARIOUS EVIDENCES PLACED IN THE COMPILATION. 2.7 ON A QUERY FROM THE BENCH THAT WHILE COMPUTING THE CAPITAL GAIN IN RESPECT OF THE FOUR PLOTS, WHAT COST HAS BEEN CLAIMED BY THE ASSES SEE. IT WAS ENQUIRED THAT WHETHER FOUR PLOTS WHICH WERE OF 350 SQ. YARDS OUT OF WHICH 207. 27 SQ. YARDS WAS ACQUIRED BY THE JDA AND REMAINING PORTION WAS SOLD AND HOW COST HAS BEEN CLAIMED I.E. WHETHER THE COST OF 350 SQ. YARDS OR COST OF REMAINING 143 SQ. YARDS . THE LD. AR STATED THAT THOUGH HE IS NOT AWARE ABOUT THE FACT THAT HOW MUCH DEDUCTION ON ACCOUNT OF COST OF THE PLOTS HAS BEEN CLAIMED. HOWEVER, IN HIS VIEW, FULL COST HAS B EEN CLAIMED AS DEDUCTION. IT WAS FURTHER SUBMITTED THAT WHATEVER CONSIDERATION OUT O F ACQUISITION OF PLOT BY JDA WILL BE RECEIVED THAT WILL BE OFFERED FOR TAXATION IN THE Y EAR OF RECEIPT. 2.8 AFTER CONSIDERING THE SUBMISSIONS AND PERUSING THE MATERIALS ON RECORD, WE FIND THAT THE LD. CIT(A) HAS GIVEN THE REASONABLE FINDIN G IN RESPECT OF SALE CONSIDERATION RECEIVED BY THE ASSESSEE. REGARDING ADDITION OF RS. 11.19 LACS, IT IS SEEN TH AT THE AO HAS COMPUTED THE CAPITAL GAIN BY OBSERVING THAT ENTIRE PLOTS OF 350 SQ. YARDS WAS SOLD. HOWEVER, THE FACT IS THAT OUT OF 350 SQ. YARDS, 202.27 SQ. YARDS WERE ACQUIRED BY THE JDA. THIS FACT IS VERY CLEAR AS PER AGREEMENT PLACED ON RECORD. THE P RICE OF THE LAND WAS SETTLED KEEPING IN MIND EACH PLOT OF 350 SQ. YARDS WHICH WAS ACQUIRED IN PART BY THE JDA AND REMAINING PORTION WAS SOLD. CLAUSE 1, 2 AND 5 OF THE AGREEMEN T ARE VERY CLEAR BY WHICH IT HAS BEEN CLARIFIED THAT THE AREA OF 202.27 SQ. YARDS IS SUBJ ECT TO ACQUISITION BY JDA. THERE IS NO MATERIAL WITH THE AO THAT THE ASSESSEE HAD RECEIVED ANY AMOUNT OVER AND ABOVE THE AGREED AMOUNT. THEREFORE, DRAWING ANY INFERENCE AGA INST THE ASSESSEE WAS NOT JUSTIFIED. HOWEVER, WE WOULD LIKE TO CLARIFY HERE THAT THE COS T OF FOUR PLOTS CLAIMED FOR THE PURPOSE 7 OF CAPITAL GAIN SHOULD BE VERIFIED ONCE AGAIN WHETH ER THE ASSESSEE HAS CLAIMED TOTAL COST OF 350 SQ. YARDS OR REMAINING PORTION AS IT IS NOT CLEAR FROM THE MATERIAL AVAILABLE ON RECORD. THEREFORE, THE AO IS FREE TO EXAMINE THIS A SPECT AND FOR MAKING CAPITAL GAIN AS PER PROVISIONS OF LAW. 2.9 REGARDING OTHER ISSUE, I.E. ADDITION OF RS. 26 ,96,750/-, WE FOUND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A). THE LD. CIT(A) HAS EXA MINED THE ISSUE IN DETAIL. IT WAS FOND BY THE LD. CIT(A) THAT SIMILAR FARM HOUSE WAS SOLD WHICH WAS SITUATED OPPOSITE TO THE FARM HOUSE OF THE ASSESSEE AND THE LAND WAS SOLD @ RS. 2,976/- PER SQ. MTR WHEREAS THE ASSESSEE HAS SOLD HIS FARM HOUSE LAND @ RS. 3,794/- PER SQ. MTR . IT IS SEEN THAT THE REGISTRY OF THE FARM HOUSES WERE MADE IN SUBSEQUENT YEAR AND THE REGISTRAR HAS EVALUATED THE VALE OF THE FARM HOUSES AT RS. 97,15,500/- AND RS. 40,76,125/- RESPECTIVELY FOR THE PURPOSE OF DETERMINING THE STAMP DUTY. THE ASSESSE E HAS SHOWN HIGHER VALUE. THEREFORE, THERE IS NO CASE TO DETERMINE THAT THE ASSESSEE HAS SHOWN LOWER CONSIDERATION. THERE IS NO EVIDENCE ON RECORD TO CORROBORATE THE SALE CONSIDER ATION SHOWN BY THE ASSESSEE. IT IS FURTHER SEEN THAT THE ASSESSEE WAS 50% OWNER AS 50% OWNER WAS HIS BROTHER. HIS BROTHER HAS ALSO SOLD THE FARM HOUSE ALONGWITH THE ASSESSEE AND IN THE CASE OF THE BROTHER OF THE ASSESSEE, THE VALUE OF SALE CONSIDERATION SHOWN HAS BEEN ACCEPTED BY THE DEPARTMENT. THIS FINDING OF THE LD. CIT(A) REMAINED UNCONTROVER TED. THEREFORE, WE SEE NO REASON TO INTERFERE IN THE FINDING OF THE LD. CIT(A). ACCORDI NGLY WE CONFIRM THE FINDING OF THE LD. CIT(A) ON THIS ISSUE. 8 3. IN THE RESULT, APPEAL OF THE REVENUE IS DISPOSED OFF AS INDICATED ABOVE. . THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 11-0 5-2012. SD/- SD/- ( SANJAY ARORA ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR, *MISHRA COPY FORWARDED TO :- THE ACIT, CIRCLE- 3, JAIPUR SHRI IQBAL SINGH GAMBHIR THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 699/JP/2011) BY ORDER, AR ITAT JAIPUR.