Shri Hanif Sheikh, Indore V. ACIT-5(1), Indore

ITA 725/Ind/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 0721 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 18-02-2021
• Assessment Year: 2015-2016
• Appeal Filed On: 24-06-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Fair market value; Onus to prove; Set aside
• Section: 143(3); 50C; 142(1); 143(2); 139(1); 48

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE HONBLE KUL BHARAT, JUDICIAL MEMBER AND HONBLE MANISH BORAD, ACCOUNTANT MEMBER ITA.NO.725/IND/2019 ASSESSMENT YEAR 2015-16 SHRI HANIF SHEIKH,, 125, KHIZRABAD COLONY, KHAJRANA, INDORE PAN : BNVPS0865G : APPELLANT V/S ACIT-5(1), INDORE : REVENUE ASSESSEE BY SHRI S.S. SOLANKI, CA REVENUE BY S HRI HARSHIT BARI, SR.DR DATE OF HEARING 1 8 .02.2021 DATE OF PRONOUNCEMENT 19 .02.2021 O R D E R PER MANISH BORAD, A.M THE ABOVE CAPTIONED APPEAL FILED AT THE INSTANCE OF THE ASSESSEE PERTAINING TO ASSESSMENT YEAR 2015-16 IS D IRECTED AGAINST THE ORDERS OF LD. COMMISSIONER OF INCOME TAX-II (I N SHORT LD. CIT], INDORE DATED 12.03.2019 WHICH IS ARISING OUT OF TH E ORDER U/S HANIF SHEIKH ITA NO.725/IND/2019 2 143(3) OF THE INCOME TAX ACT 1961(IN SHORT THE AC T) DATED 22.12.2017 FRAMED BY ACIT-5(1)-2, INDORE. 2. ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: - 1.THAT THE LEARNED CIT(A) ERRED IN MAINTAINING DISA LLOWANCE OF BROKERAGE PAID OF RS.3,60,000/-. THAT THE BROKERAGE PAID WAS A GENUINE EXPENDITURE, CREDIT FOR THE SAME OUGHT TO HAVE BEEN ALLOWED. WITHOUT PREJUDICE TO THE ABOVE 2. THAT THE LEARNED CIT(A) ERRED IN MAINTAINING ADDITI ON OF RS.14,11,600/- MADE U/S 50C OF THE IT ACT. THAT ON VALUATION, THE DIFFERENCE BETWEEN VALUE DETERMINED BY DVO AND ASSESSEE WAS 10.53% ONLY. TH E ADDITION SO MADE, MAY VERY KINDLY BE DELETED. 2. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER OR DELETE THE SAID GROUNDS OF APPEAL. 3. BRIEF FACTS OF THE CASE AS CULLED OUT FROM THE R ECORDS ARE THAT THE ASSESSEE IS A SENIOR CITIZEN DERIVING INCOME FR OM LONG TERM CAPITAL GAIN. ASSESSEE FILED HIS RETURN OF INCOME O N 30.11.2015 U/S 139(1) DECLARING TOTAL INCOME OF RS.61,37,400/-. TH E CASE WAS SELECTED FOR LIMITED SCRUTINY BY CASS. NOTICE U/S 143(2) AND 142(1) SERVED UPON THE ASSESSEE. ASSESSMENT U/S 143(3) OF THE ACT WAS COMPLETED AT TOTAL INCOME OF RS.79,09,900/- AFTER M AKING ADDITION U/S 50C AT RS.14,11,600/- AND DISALLOWANCE OF BROKE RAGE EXPENSES AT RS.3,60,000/-. HANIF SHEIKH ITA NO.725/IND/2019 3 4. AGGRIEVED ASSESSEE PREFERRED APPEAL BEFORE LD. C IT(A) AND PARTLY SUCCEEDED. 5. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNA L. 6. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US AND CAREFULLY GONE THROUGH THE SUB MISSIONS MADE BY BOTH THE AUTHORITIES AND PAPER BOOK FILED BY LD. COUNSEL FOR THE ASSESSEE. 7. AS REGARDS GROUND NO.1 RELATING TO DISALLOWANCE OF BROKERAGE EXPENSES AT RS.3,60,000/-, WE FIND THAT THE ASSESSE E CLAIMED THE BROKERAGE EXPENSES @ 3% PAID TO BROKER ON THE SALE CONSIDERATION OF RS.1,20,00,000/- RECEIVED FROM SALE OF IMMOVEABL E PROPERTY. EVIDENCE TO PROVE THE GENUINENESS OF BROKERAGE EXPE NSES WERE FILED. LD. A.O WAS NOT SATISFIED AND HE INSISTED ON PRODUC ING THE PERSON WHO RECEIVED THE BROKERAGE. IN ABSENCE THERE OF BR OKERAGE EXPENSES WAS DISALLOWED AND HIS ACTION WAS CONFIRME D BY LD. CIT(A). 7A. WE HOWEVER ON GOING THROUGH THE RECORDS FIND TH AT THE BROKERAGE WAS PAID THROUGH ACCOUNT PAYEE CHEQUE AND COPY OF HANIF SHEIKH ITA NO.725/IND/2019 4 BANK STATEMENT IS FILED. COMPLETE DETAIL OF BROKER INCLUDING HIS ADDRESS, MOBILE NUMBER WERE FILED ALONG WITH CONFI RMATION LETTER BEFORE THE LD. A.O. IN OUR VIEW THE ASSESSEE HAS D ULY DISCHARGED HIS ONUS TO PROVE THE GENUINENESS OF THE EXPENSES. LD. A.O FAILED TO FIND ANY ADVERSITIES IN THESE EVIDENCE NOR HE MA DE ANY EFFORT TO CALL THE BROKER. IN THESE GIVEN FACTS AND CIRCUMST ANCES OF THE CASE THE ACTION OF THE LD. A.O IS UNJUSTIFIED, WE THEREF ORE SET ASIDE THE FINDING OF LD. CIT(A) AND DELETE THE DISALLOWANCE O F BROKERAGE EXPENSES OF RS.3,60,000/-. GROUND NO.1 OF THE ASSE SSEE IS ALLOWED. 8. AS REGARDS GROUND NO.2 WHICH RELATES TO ADDITION OF RS.14,11,600/- MADE U/S 50C OF THE ACT WE OBSERVE T HAT THE ASSESSEE SOLD LEASED PROPERTY AT RS.1,20,00,000/-. ASSESSEE CLAIMED IT TO BE A DISPUTED PROPERTY. THE GUIDELIN E VALUE OF THE SAME WAS RS.1,80,00,000/-. ASSESSEE CHALLENGED THI S VALUATION CONTENDING THAT THE FAIR MARKET VALUE OF THE PROPER TY IS MUCH LESS AND PROVISION OF SECTION 50C OF THE ACT ARE NOT APP LICABLE ON LEASED PROPERTY. LD. A.O REFERRED THE VALUATION TO THE DE PARTMENTAL VALUATION OFFICER (IN SHORT DVO), WHO VALUED THE PROPERTY AT RS.1,34,11,600/- AS AGAINST THE GUIDELINE RATE OF R S.1,80,00,000/-. HANIF SHEIKH ITA NO.725/IND/2019 5 THE DIFFERENCE BETWEEN THE ACTUAL SALE CONSIDERATIO N RECEIVED AND THE VALUATION DONE BY THE DVO IS 11.6%. THIS DIFFE RENCE AMOUNTING TO RS.14,11,600/- WAS ADDED TO THE INCOME OF THE AS SESSEE U/S 50C OF THE ACT BY THE LD. A.O AND SUBSEQUENTLY WAS CONF IRMED BY LD. CIT(A) ALSO. 9. FROM THE ABOVE STATED FACTS WE FIND THAT THE CLA IM OF THE ASSESSEE THAT LEASED PROPERTY IN QUESTION WAS DISPU TED AND THE FAIR MARKET VALUE IS MUCH LOWER THAN THE GUIDELINE RATE IS CONFIRMED BY THE REPORT OF DVO WHO HAS VALUED THE PROPERTY AT RS .1,34,11,600/- AS AGAINST THE VALUE OF PROPERTY AS PER GUIDELINE R ATE AT RS.1,80,00,000/-. IT IS ALSO A KNOWN FACT THAT VAL UATION BY THE DVO IS ALSO AN ESTIMATE. THE VALUE ADOPTED BY THE DVO IS HIGHER BY 11.6% TO ACTUAL SALE CONSIDERATION RECEIVED BY THE ASSESSEE. THE SITUATION NEEDS EXAMINATION IN LIGHT OF PROVISO TO SECTION 50C OF THE ACT WHICH PROVIDES THAT WHERE THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY THE STAMP VALUATION AUTHORITY DOES NOT EXCEED 110% OF THE SALE CONSIDERATION OR ACCRUING AS A RES ULT OF THE TRANSFER, THE CONSIDERATION SO RECEIVED OR ACCRUING AS A RESU LT OF THE TRANSFER, ASSESSEE FOR THE PURPOSE OF SECTION 48 BE ADMITTE D TO BE THE FULL HANIF SHEIKH ITA NO.725/IND/2019 6 VALUE OF CONSIDERATION. SO IN CASE THE SALE CONSIDERATION RECEIVED IS WITHIN THE RANGE OF 110% OF THE VALUE ADOPTED BY TH E VALUE ADOPTING AUTHORITY (IN THIS CASE VALUE AS PER THE D VO REPORT IN PLACE OF THE VALUE AS PER THE GUIDELINE RATE) NO AD DITION IS CALLED FOR U/S 50C OF THE ACT. 10. IN THE INSTANT CASE LOOKING TO THE FACTS AND CI RCUMSTANCES OF THE CASE WHERE THE PROPERTY BEING LEASED AND ALSO D ISPUTED, WHICH IS NOT COMMANDING THE GUIDELINE RATE IN THE OPEN MA RKET AND THIS FACT IS FURTHER SUPPORTED BY THE REPORT OF DVO WHO HAS VALUED THE PROPERTY IN QUESTION MUCH LOWER THAN THE GUIDELINE RATE ARE SUFFICIENT ENOUGH TO PROVE THAT THE CLAIM OF ASSESS EE HAVING RECEIVED THE SALE CONSIDERATION AT RS.1.20 CRORE IS CORRECT AND THUS MAKING THE ADDITION FOR RS.14,11,600/- U/S 50C OF T HE ACT IS UNCALLED FOR. WE THEREFORE SET ASIDE THE FINDING OF LD. CIT(A) AND DELETE THE ADDITION MADE BY LD. A.O U/S 50C OF THE ACT AT RS.14,11,600/-. GROUND NO.2 OF THE ASSESSEE IS ALL OWED. HANIF SHEIKH ITA NO.725/IND/2019 7 11. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED . ORDER WAS PRONOUNCED IN THE OPEN COURT ON 19.02.20 21 SD/- SD/- ( KUL BHARAT) (MANI SH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER / DATED : 19 FEBRUARY, 2021 /DEV COPY TO: THE APPELLANT/RESPONDENT/CIT CONCERNED/CIT (A) CONCERNED/ DR, ITAT, INDORE/GUARD FILE. BY ORDER, ASSTT.REGISTRAR, I.T.A.T., INDORE