Shri Ashok Kumar Wahi (HUF) , Bangalore V. Income Tax Officer Ward-7(1), Bangalore

ITA 719/BANG/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 4719 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-06-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 08-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PADMA MEENAKSHI
• Keywords: Income from undisclosed sources
• Section: 54F; 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-C BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO. 719 / BANG/201 8 ASSESSMENT YEAR : 20 09 - 10 SHRI ASHOK KUMAR WAHI [HUF], NO. C-17, NATASHA GOLF VIEW APARTMENTS, OLD AIRPORT ROAD, DOMLUR, BANGALORE 560 071. PAN: AACHA6044G VS. THE INCOME TAX OFFICER, WARD 7 [1], BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI NARENDRA SHARMA, ADVOCATE RESPONDENT BY : SMT. PADMA MEENAKSHI, JCIT (DR) DATE OF HEARING : 07 . 0 5 .2018 DATE OF PRONOUNCEMENT : 01. 06 .201 8 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE ASSESSEE WHICH IS DIREC TED AGAINST THE ORDER OF LD. CIT(A)-3, BANGALORE DATED12.01.2018 FOR ASSESSM ENT YEAR 2009-10. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER. 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME- TAX [APPEALS] PASSED UNDER-SECTION 250 OF THE ACT DATED 12/01/201 8 IN SO FAR AS IT IS AGAINST THE APPELLANT IS OPPOSED TO LAW, WEIGHT OF EVIDENCE, PROBABILITIES, FACTS AND CIRCUMSTANCES OF THE APPEL LANT'S CASE. 2. THE APPELLANT DENIES ITSELF LIABLE TO BE ASSESSE D ON A TOTAL INCOME OF RS. 14,59,033/- AS DETERMINED BY THE LEARNED ASSESS ING OFFICER AND CONFIRMED BY THE CIT [A] AS AGAINST THE INCOME REPO RTED BY THE APPELLANT OF RS. 2,27,280/-, ON THE FACTS AND CIRCU MSTANCES OF THE CASE. 3. THE LEARNED CIT [A] IS NOT JUSTIFIED IN CONFIRMI NG THE ADDITION MADE BY THE LEARNED ASSESSING OFFICER OF RS. 12,31,753/- AS UNEXPLAINED INCOME AND BROUGHT TO TAX UNDER THE HEAD INCOME FRO M THE OTHER SOURCES, ON THE FACTS AND CIRCUMSTANCES OF THE CASE . ITA NO.719/BANG/2018 PAGE 2 OF 7 4. THE LEARNED AUTHORITIES BELOW FAILED TO APPRECIA TE THE FACT THAT THE APPELLANT HAS ACTUALLY RECEIVED TOTAL SALE CONSIDER ATION OF RS. 40,91,753/- FROM THE SALE OF PROPERTY, ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. THE LEARNED AUTHORITIES BELOW FAILED TO APPRECIA TE THE EVIDENCES FILED DURING THE COURSE OF PROCEEDINGS BEFORE THE A UTHORITIES BELOW IN SUPPORT OF ITS CLAIM THAT IT HAD RECEIVED A TOTAL S ALE CONSIDERATION OF RS. 40,91,753/- AS AGAINST THE SALE CONSIDERATION S HOWN BY THE APPELLANT OF RS. 28,60,000/- IN THE SALE DEED AND F URTHER FAILED TO APPRECIATE THE SURROUNDING CIRCUMSTANCES OF THE FAC TS OF THE CASE, AND CONSEQUENTLY PASSED A PERVERSE ORDER, ON THE FACTS AND CIRCUMSTANCES OF THE CASE 6. THE APPELLANT DENIES ITSELF LIABLE TO BE CHARGED TO INTEREST UNDER SECTION 234A AND 234B OF THE ACT UNDER THE FACTS AN D CIRCUMSTANCES OF THE CASE. 7. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, SUBSTI TUTE AND DELETE ANY OR ALL OF THE GROUNDS OF APPEAL URGED ABOVE. 8. FOR THE ABOVE AND OTHER GROUNDS TO BE URGED DURI NG THE HEARING OF THE APPEAL THE APPELLANT PRAYS THAT THE APPEAL BE A LLOWED IN THE INTEREST OF EQUITY AND JUSTICE. 3. IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT ADMI TTEDLY, THE SALE PRICE OF THE TWO PROPERTIES SOLD BY THE ASSESSEE AS PER THE SALE DEE D HAS BEEN CONSIDERED BY THE AO AND CIT(A) AS THE SALE CONSIDERATION OF THES E TWO PROPERTIES FOR THE PURPOSE OF COMPUTING LONG TERM CAPITAL GAIN BUT IN FACT, THE ASSESSEE HAS RECEIVED AN AMOUNT OF RS. 40,91,753/- TOWARDS SALE CONSIDERATION OF THESE TWO PROPERTIES WHICH IS MORE THAN THE PRICE MENTIONED I N THESE TWO SALE DEEDS AND THEREFORE, THE SAME BEING ACTUAL SALE CONSIDERATION RECEIVED BY THE ASSESSEE SHOULD BE ADOPTED FOR THE PURPOSE OF COMPUTING LONG TERM CAPITAL GAIN IN THE PRESENT CASE. THE LD. DR OF REVENUE SUPPORTED THE ORDERS OF AUTHORITIES BELOW. 4. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. IT IS NOTED BY CIT(A) IN PARA 4.1 OF HIS ORDER THAT THE ASSESSEE HAS PLACED RELIANCE ON JUDG EMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF CIT VS. GEORGE HENDER SON AND CO. LTD. AS REPORTED IN 66 ITR 622 TO CONTEND THAT FULL VALUE O F CONSIDERATION FOR THE PURPOSE OF SECTION 48 OF THE ACT CANNOT BE CONSTRUE D AS THE MARKET VALUE BUT IT IS THE PRICE BARGAINED FOR BY THE PARTIES TO THE SA LE AND IT IS NECESSARY FOR THE ITA NO.719/BANG/2018 PAGE 3 OF 7 AO TO ASCERTAIN AS TO WHAT WAS THE PRICE BARGAINED BY THE PARTIES TO THE SALE. RELIANCE WAS ALSO PLACED ON JUDGEMENT OF HONBLE AL LAHABAD HIGH COURT RENDERED IN THE CASE OF CIT VS. INTEZAR ALI AS REPO RTED IN 372 ITR 651 AND ALSO ON A JUDGMENT OF HONBLE PUNJAB & HARYANA HIGH COUR T RENDERED IN THE CASE OF PCIT VS. QUARK MEDIA HOUSE INDIA PVT. LTD. AS REPOR TED IN 391 ITR 145. THE LD. CIT(A) HAS HELD IN PARA 4.6 OF HIS ORDER THAT T HESE JUDGEMENTS ARE NOT APPLICABLE IN THE PRESENT CASE. BEFORE ME, IT WAS ARGUED BY LD. AR OF ASSESSEE THAT THE CASE OF THE ASSESSEE SHOULD BE DECIDED IN THE LIGHT OF THESE JUDGEMENTS AND HENCE, I EXAMINE THE APPLICABILITY O F THESE JUDGEMENTS IN THE PRESENT CASE. FIRST I CONSIDER THE APPLICABILITY O F THE JUDGEMENT OF HONBLE PUNJAB & HARYANA HIGH COURT RENDERED IN THE CASE OF PCIT VS. QUARK MEDIA HOUSE INDIA PVT. LTD. (SUPRA). PARA NO. 20 OF THIS JUDGEMENT IS RELEVANT IN THE PRESENT CASE AND THE SAME IS REPRODUCED HEREINBELOW FOR THE SAKE OF READY REFERENCE. 20. WE DO NOT READ THE OBSERVATIONS IN PARAGRAPH-7 TO MEAN THAT THE CONSIDERATION REFERRED TO IN THE SALE DEED CANNOT B E QUESTIONED AT ALL. THE JUDGMENT IF READ AS A WHOLE DOES NOT INDICATE S UCH AN ABSOLUTE OR BLANKET RULE. THERE IS NOTHING IN THE JUDGMENT TO I NDICATE THAT THE REVENUE HAD CONTENDED THAT THE FULL VALUE OF CONSID ERATION RECEIVED OR ACCRUING WAS OTHER THAN WHAT WAS MENTIONED IN THE S ALE DEED. IT IS PROBABLY IN THAT VIEW OF THE MATTER THAT THE DIVISI ON BENCH HELD THAT THE EXPRESSION 'FULL VALUE OF CONSIDERATION' REFERS ONLY TO THE CONSIDERATION REFERRED TO IN THE SALE DEED. IF, HOW EVER, THAT IS WHAT WAS MEANT, WE RESPECTFULLY DISAGREE. THE FULL VALUE OF CONSIDERATION REFERRED TO IN SECTIONS 45AND 48 OF THE ACT REFERS TO THE FULL VALUE ACTUALLY RECEIVED OR ACCRUING AND NOT WHAT THE PART IES MERELY STATE OR DECLARE IN THE SALE DEED AS WAS PAID OR PAYABLE AND RECEIVED OR ACCRUING. SUCH A VIEW WOULD AS WE MENTIONED EARLIER ENABLE A PARTY TO AVOID THE LIABILITY TO TAX ON ACCOUNT OF CAPITAL GAINS BY MERELY STATING THE INCORRECT PRICE TO BE THE CONSIDERATION FOR SALE OR TRANSFER OF THE 21 OF 37 ASSET. THAT COULD NOT HAVE BEEN THE INTENTION OF THE LEGISLATURE. 5. FROM THE ABOVE PARA REPRODUCED FROM THE JUDGEMEN T OF HONBLE PUNJAB & HARYANA HIGH COURT, IT IS SEEN THAT AS PER THIS JUD GEMENT, IT WAS HELD THAT FULL VALUE OF CONSIDERATION REFERRED TO IN SECTIONS 45 A ND 48 OF IT ACT REFERS TO THE FULL VALUE ACTUALLY RECEIVED OR ACCRUING AND NOT WH AT THE PARTIES MERELY STATE OR DECLARE IN THE SALE DEED AS WAS PAID OR PAYABLE AND RECEIVED OR ACCRUING. HENCE AS PER THIS JUDGEMENT, IN THE PRESENT CASE AL SO, IF THE ASSESSEE CAN ITA NO.719/BANG/2018 PAGE 4 OF 7 ESTABLISH THAT THE VALUE STATED IN THE SALE DEED IS NOT CORRECT AND IF THE ASSESSEE CAN ESTABLISH THAT OVER AND ABOVE THIS VAL UE, SAME AMOUNT IS ACTUALLY RECEIVED BY THE ASSESSEE THEN FOR THE PURPOSE OF SE CTIONS 45 AND 48 OF IT ACT SUCH ACTUAL SALE CONSIDERATION RECEIVED BY THE ASSE SSEE HAS TO BE ADOPTED FOR THE PURPOSE OF COMPUTING LONG TERM CAPITAL GAIN IN THE PRESENT CASE. REGARDING THIS ASPECT, THE LD. AR OF ASSESSEE HAD DRAWN MY AT TENTION TO PAGES 32 TO 34 OF PAPER BOOK WHEREIN THE ASSESSEE HAS ENCLOSED THE PH OTO COPY OF VARIOUS CHEQUES AND DRAFTS SAID TO HAVE BEEN RECEIVED BY TH E ASSESSEE FROM THE BUYERS OF THESE TWO PROPERTIES. THE LD. AR OF ASSE SSEE HAS ALSO SUBMITTED THAT THE COMPLETE DETAILS OF VARIOUS CHEQUES AND DRAFTS RECEIVED BY THE ASSESSEE FROM THE BUYERS OF THESE TWO PROPERTIES IS AVAILABL E ON PAGE NO. 4 OF THE PAPER BOOK AND OUT OF THE SAME, TWO CHEQUES OF RS. 1 LAKH IS RECEIVED FROM THE BUYERS OF THESE TWO PROPERTIES ON 14.08.2008 AND TH ESE ARE NOT MENTIONED IN THESE TWO SALE DEEDS AND IN ADDITION TO THAT, A DD NO. 268832 DATED 27.08.2008 OF RS. 8,75,954/- WAS ALSO NOT MENTIONED IN THESE TWO SALE DEEDS. HE ALSO SUBMITTED THAT OUT OF THIS DEMAND DRAFT OF RS. 8,75,954/-, RS. 3,26,701/- IS RECEIVED FROM SHRI YOGISH DEVIHALLI M ALIGE SHETTY AND SMT. TEJASWINI YOGISH AND THE BALANCE AMOUNT OF RS. 5,49 ,253/- WAS RECEIVED FROM SRI RAGHU H R AND SMT. SHALINI RAGHU IN RESPECT OF THE SECOND PROPERTY. IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT THESE TWO PERSONS ARE FRIENDS AND THEREFORE, THEY PAID THESE AMOUNTS BY PURCHASING A COMMON DRAFT. HE ALSO SUBMITTED THAT THE REMAINING DRAFTS WHICH ARE ACCEP TED BY THE AO AS HAVING BEEN RECEIVED AS SALE CONSIDERATION OF THESE TWO PR OPERTIES BEING DD NOS. 268825, 268826, 268830, 268831 AND 268828 ARE ALSO PURCHASED ON THE SAME DATE I.E. 27.08.2008 FROM THE SAME BANK I.E. AXIS B ANK, SERVICE BRANCH, BANGALORE AND THE DRAFT NO. OF THE REMAINING ONE DR AFT IS 268832 WHICH IS IN CONTINUATION OF THE EARLIER ACCEPTED DRAFT NOS. AND THESE FACTS ALSO SUPPORT THE CASE OF THE ASSESSEE THAT THESE DRAFTS ARE PAID BY THE SAME BUYERS OF THE PROPERTY TOWARDS SALE CONSIDERATION OF THE PROPERTY ONLY. I FIND FORCE IN THESE SUBMISSIONS OF LD. AR OF ASSESSEE BECAUSE THIS IS N OT THE CASE OF THE AO THAT THIS DRAFT NO. 268832 OF RS. 8,75,954/- IS RECEIVED BY THE ASSESSEE FROM SOME OTHER PERSON OR FROM THESE TWO PERSONS ON ACCOUNT O F SOME OTHER TRANSACTION. THE AO COULD HAVE OBTAINED THE DETAILS OF BUYER OF THE DRAFT FROM THE ITA NO.719/BANG/2018 PAGE 5 OF 7 CONCERNED BANK I.E. AXIS BANK, SERVICE BRANCH, BANG ALORE AND COULD HAVE RECORDED A STATEMENT OF THESE BUYERS OF THE PROPERT Y TO FIND OUT THE ACTUAL REASON FOR WHICH THEY HAVE MADE THIS PAYMENT TO THE ASSESSEE. NOTHING OF THIS SORT HAS BEEN DONE BY THE AO PARTICULARLY WHEN THIS IS THE CLAIM OF THE ASSESSEE THAT THIS AMOUNT IS RECEIVED BY THE ASSESS EE ON ACCOUNT OF SALE CONSIDERATION OF THESE TWO PROPERTIES ONLY AND IN V IEW OF VARIOUS EVIDENCES SUCH AS THIS FACT THAT THE DD NOS. ARE SERIALLY NUM BERED, THE AO SHOULD EITHER HAVE ACCEPTED THE CLAIM OF THE ASSESSEE OR SHOULD H AVE MADE FURTHER ENQUIRIES TO DISLODGE THE CLAIM OF THE ASSESSEE. AS PER THIS JUDGEMENT OF HONBLE PUNJAB & HARYANA HIGH COURT RENDERED IN THE CASE OF PCIT V S. QUARK MEDIA HOUSE INDIA PVT. LTD. (SUPRA) OF WHICH RELEVANT PARA 20 I S REPRODUCED ABOVE, IT IS SEEN THAT FULL VALUE OF CONSIDERATION REFERRED TO IN SEC TIONS 45AND 48 OF THE ACT REFERS TO THE FULL VALUE ACTUALLY RECEIVED OR ACCRUING AND NOT WHAT THE PARTIES MERELY STATE OR DECLARE IN THE SALE DEED. HENCE THIS JUDG MENT SUPPORTS THE CLAIM OF THE ASSESSEE IN PRINCIPLE THAT THERE MAY BE EXTRA C ONSIDERATION HAVING BEEN RECEIVED BY THE ASSESSEE TOWARDS SALE CONSIDERATION OF THE PROPERTY IN QUESTION OVER AND ABOVE SALE PRICE NOTED IN THE SALE DEED AN D WHEN SUCH RECEIPT OF EXTRA MONEY IS BY WAY OF BANKING CHANNELS BY CHEQUE S AND DRAFTS DEPOSITED IN BANK ACCOUNT OF THE ASSESSEE, THE CLAIM OF THE ASSE SSEE CANNOT BE OUT RIGHTLY REJECTED WITHOUT MAKING FURTHER ENQUIRIES TO DISLOD GE THE CLAIM OF THE ASSESSEE. THE AO HAS NOT MADE ANY ENQUIRY AND HE HAS REJECTED THE CLAIM OF THE ASSESSEE ONLY ON THIS BASIS THAT THERE IS NO MENTIO N OF THESE CHEQUES AND DRAFTS IN THE SALE DEEDS. HENCE, BY RESPECTFULLY F OLLOWING THIS JUDGEMENT OF HONBLE PUNJAB & HARYANA HIGH COURT AND IN VIEW OF THE FACTS OF THE PRESENT CASE AS DISCUSSED ABOVE, I HOLD THAT FOR THE PURPOS E OF COMPUTING LONG TERM CAPITAL GAIN OF THE ASSESSEE ON ACCOUNT OF SALE OF THESE TWO PROPERTIES, THE SALE CONSIDERATION DECLARED BY THE ASSESSEE OF RS. 40,91 ,753/- SHOULD BE ADOPTED AND DEDUCTION ALLOWABLE TO ASSESSEE U/S. 54F OF IT ACT SHOULD BE ALLOWED ON THE BASIS OF SUCH LONG TERM CAPITAL GAIN AS PER LAW . I ORDER ACCORDINGLY. 6. NOW I ALSO EXAMINE THE APPLICABILITY OF JUDGEMEN T OF HONBLE ALLAHABAD HIGH COURT RENDERED IN THE CASE OF CIT VS. INTEZAR ALI ( SUPRA). THE FACTS OF THIS CASE ARE NOTED BY HONBLE ALLAHABAD HIGH COURT IN PARA 3 OF THIS JUDGMENT AND ITA NO.719/BANG/2018 PAGE 6 OF 7 THEREFORE, PARA 3 OF THIS JUDGEMENT IS REPRODUCED H EREINBELOW FOR READY REFERENCE. THIS PARA READS AS UNDER. 3. THE ASSESSEE VOLUNTARILY FILED RETURN ON 17.10.2 008 DISCLOSING TOTAL INCOME OF RS.64,188/- AND AGRICULTURAL INCOME OF RS.1,25,000/-. ON RECEIPT OF CERTAIN INFORMATION THAT THE ASSESSEE HAD DEPOSITED AN AMOUNT OF RS.1,08,32,752/- IN BANK ACCOUNT NO.4621 WITH SYNDICATE BANK, VILLAGE DEHRA, TEHSIL HAPUR, ENQUIRIES WERE M ADE AND STATEMENTS OF THE ASSESSEE AND PURCHASERS WERE RECO RDED. THE ASSESSEE STATED THAT HE HAD SOLD AGRICULTURAL LAND MEASURING 30 KACHCHA BIGHA SITUATE IN VILLAGE GORDHANPUR, TEHSIL HAPUR, DISTT. GHAZIABAD FOR A SUM OF RS.1,20,00,000/- ON 12.11.20 07 TO SHRI YAMEEN AND SHRI RAISUDDIN. BOTH THE PURCHASERS DENI ED IN THEIR STATEMENTS TO HAVE PURCHASED THE LAND FOR A CONSIDE RATION OF RS.1,20,00,000/- FROM THE ASSESSEE. THEY STATED THA T THEY HAD PURCHASED THE LAND ONLY FOR RS.22 LACS. THE SALE DE ED WAS EXECUTED ON THE SALE VALUE OF RS.22 LACS, WHEREAS THE ASSESSEE SHRI INTJAR ALI CLAIMED THAT HE HAD SOLD HIS LAND FOR RS.1,20,00,00 0/-. SURPLUS AMOUNT OF RS.97,80,000/- OVER SALE DEED VALUE WAS S USPECTED TO BE INCOME FROM UNDISCLOSED SOURCES AND CASE WAS SELECT ED FOR SCRUTINY ON WHICH NOTICE UNDER SECTION 143 (2) OF THE ACT WA S ISSUED ON 18.9.2009. 7. FROM THE ABOVE PARA AND IN PARA 8 OF THIS JUDGEM ENT, THE HONBLE HIGH COURT HAS REPRODUCED THE RELEVANT FINDINGS OF TRIBUNAL IN THAT CASE AND AS PER THE SAME, IT IS HELD BY TRIBUNAL IN THAT CASE THAT IT I S A PREVALENT PRACTICE IN THE LAND TRANSACTION THAT REAL SALE CONSIDERATION IS NOT SHO WN IN THE SALE DEED AND THERE WAS ALSO SUFFICIENT REASON FOR THE PURCHASERS TO CO NCEAL ACTUAL SALE CONSIDERATION IN THE SALE DEED TO EVADE TAX AND STA MP DUTY SINCE IT IS PAID BY THE PURCHASERS ONLY. THESE OBSERVATIONS OF TRIBUNA L IN THAT CASE ALSO SUPPORTS THE ASSESSEE IN THE PRESENT CASE. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- (ARUN KUMAR GARODIA) ACCOUNTANT MEMBER BANGALORE, DATED, THE 01 ST JUNE, 2018. /MS/ ITA NO.719/BANG/2018 PAGE 7 OF 7 COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.