Rajo Devi, Delhi V. ITO, Ward- 32(1), New Delhi

ITA 7279/DEL/2018

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 0743 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 10 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-10-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 14-09-2022
• Assessment Year: misc
• Appeal Filed On: 14-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Income from undisclosed sources; Opportunity of being heard; Valuation report; Set aside; Capital Gains
• Section: 271(1)(c); 2; 143(3); 50C; 2(14); 143(1); 143(2); 55A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : SMC : NEW DELHI BEFORE SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER ITA No.7279/Del/2018 Assessment Year 2010-11 Smt. Rajo Devi, W/o. Reshram, 76, Asola Village, Fatehpur Beri, New Delhi – 110 074. PAN ATWPR3396M vs. The Income Tax Officer, Ward-32(1), Room No.1804, 11 th Floor, E-2 Block, Civic Centre, New Delhi–110 001. (Appellant) (Respondent) For Assessee : Shri Sanjay Kumar, CA & Shri Pawan Kumar, CA For Revenue : Shri Mithalesh Kr. Pandey, Sr. DR Date of Hearing : 15.09.2022 Date of Pronouncement : 14.10.2022 ORDER This appeal filed by the assessee is directed against the order of the CIT(A)-31, New Delhi, dated 11.09.2018 relating to Assessment Year 2010-11. 2. Briefly stated facts of the case are that the assessee derives income from business and filed her return of income on 25.07.2011 declaring total income of Rs.1,48,103/-. The return was processed under section 143(1) of the I.T. Act, 2 ITA.No.7279/Del./2018 Smt. Rajo Devi, Delhi. 1961 and the case was selected for scrutiny under CASS. Thereafter, statutory notice under section 143(2) of the I.T. Act, 1961 dated 07.09.2012 was issued and served upon the assessee. In response to the said notice, the Authorised Representative for the Assessee appeared before the A.O. and filed necessary details which are placed on record by the A.O. The only issue involved in this case was that the assessee had deposited a sum of Rs.94 lakhs in her Bank A/c.xxxx7167 with Syndicate Bank, Fatehpur Beri, New Delhi during the year under consideration. During the course of assessment proceedings, the assessee was asked to furnish the source of cash deposit in the bank account. In response to the same, the assessee has submitted various details. On careful perusal of these details, the A.O. noted that the entire cash was received by the husband of the assessee viz., Sh. Resram and her brother-in-law Sh. Raghbar on sale of agricultural land in Faridabad, Haryana. Since, they do not have bank A/c the amount was deposited in assessee’s Bank A/c. The A.O. noted that the sale consideration of agricultural land was only of 3 ITA.No.7279/Del./2018 Smt. Rajo Devi, Delhi. Rs.54,31,250/-. Therefore, the A.O. asked the assessee to produce Sh. Res Ram. Inspite of several opportunities provided to the assessee, the assessee could not produce Sh. Res Ram. Therefore, the A.O. after considering the submissions of the assessee, made an addition of Rs.39,68,750/- [i.e., differential amount of bank deposit Rs.94,00,000/- (-) Rs.54,31,250/-] on account of income from undisclosed sources and computed the total income of the assessee at Rs.41,54,060/- under section 143(3) of the I.T. Act, 1961 vide order dated 25.03.2013 and initiated penalty proceedings under section 271(1)(c) of the I.T. Act separately. 2.1. Aggrieved by the order of the A.O, the assessee preferred an appeal before the Ld. CIT(A) who vide order dated 11.09.2018 confirmed the addition made by the A.O. after considering the remand reports from the A.O. The Ld. CIT(A) while confirming the addition made by the A.O. noted that the assessee was failed to prove his two claims i.e., that the land in question was sold at a price higher than that shown in sale deed and that the land in question being 4 ITA.No.7279/Del./2018 Smt. Rajo Devi, Delhi. agricultural land was not a capital asset within the meaning of section 2 (14) of the I.T. Act, 1961. 3. Aggrieved by the order of the Ld. CIT(A), the assessee is in appeal before the Tribunal and has raised the following grounds: “1. The learned Assessing Officer erred in law by adding Rs.39,68,750/- from undisclosed source of income in assessment order u/s 143(3) without initiating the process under section 68. 2. The learned first appellate authority erred in law by considering the agricultural land as the capital asset within the meaning under section 2(14) without giving proper opportunity of being heard. 3. The Assessing Officer and the learned first appellate authority both failed to consider the valuation report of valuation officer of income tax department under section 50C and Fair market value of the land in the remand report & assessment proceedings. 5 ITA.No.7279/Del./2018 Smt. Rajo Devi, Delhi. 4. The Assessee prays to add, modify or delete any ground of appeal.” 4. During the course of hearing, Learned Counsel for the Assessee, at the very outset submitted that the land in question was sold to Smt. Bijesh (Mustri) wife of Sh. Daya Ram at Village & Tehsil Ghata, Gurgaon at a consideration of Rs.1.60 crores paid in cash. The Learned Counsel for the Assessee submitted that on a reference made by the A.O. under section 55A of the I.T. Act, 1961, the Valuation Officer in his valuation report dated 17.01.2018 stated that the land in question is agricultural land as on 18.03.2010 and the land in question is valued at Rs.89,35,574/-. Copy of the Valuation Report of the Valuation Officer dated 17.01.2018 is placed on record. The Learned Counsel for the Assessee submitted that since the assessee has proved that the land in question is sold at a much higher rate than that shown in the sale deed and the land in question is agricultural land was not a capital asset which is exempt from capital gains tax within the meaning of Section 2(14) of the I.T. Act, 1961, the order of the Ld. CIT(A) cannot be 6 ITA.No.7279/Del./2018 Smt. Rajo Devi, Delhi. sustained in the eye of law and prayed that the orders of the authorities below be set aside by deleting the addition made in the hands of the assessee. 5. On the other hand, the Ld. D.R. relied on the orders of the authorities below. He submitted that since the assessee failed to produce Sh Reshram husband of assessee and her brother-in-law Sh. Raghbar who are close knit of the family, therefore, the addition made by the A.O. and sustained Ld. CIT(A) be confirmed. 6. I have heard the rival submissions and perused the orders of the authorities below and material available on record. In the instant case, it is an undisputed fact that the A.O. has accepted the sale consideration of Rs.54,31,250/- while making the impugned addition of Rs.39,68,750/- as income from undisclosed sources [i.e., cash deposit made by the assessee in her bank A/c at Rs.94,00,000/- (-) Sale consideration of Rs.54,31,250/-] in the hands of assessee on the ground that inspite of several opportunities provided to the assessee, the assessee failed to produce Sh Res Ram husband of assessee. In appeal, the finding of the Ld. CIT(A) 7 ITA.No.7279/Del./2018 Smt. Rajo Devi, Delhi. while confirming the addition made by the A.O. was on two counts i.e., the assessee failed to prove that the land in question was sold at a much higher price than that disclosed in the sale deed and the land in question is agricultural land which was not a capital asset within the meaning of Section 2(14) of the I.T. Act, 1961. Before the Tribunal, the contention of the assessee is that the land in question is sold at much higher rate than that disclosed in the sale deed and the land in question is agricultural land was not a capital asset and, therefore, exempt from tax. The lower authorities made the addition on the ground that the assessee failed to prove the cash deposit as well as the land in question is agricultural land under section 2(14) of the I.T. Act, 1961. From the careful perusal of the order of the Ld. CIT(A), I have noticed that the Ld. CIT(A) at page-12 of his order reproduced the scanned inspection report of the Inspector wherein it is noted that the assessee has sold the land to Smt. Bijesh (Mustri) wife of Sh Daya Ram at a consideration of Rs.1.60 crores all paid in cash. In the assessment order, the A.O. noted the sale consideration was 8 ITA.No.7279/Del./2018 Smt. Rajo Devi, Delhi. at Rs.54,31,250/- and accepted the same and added the balance amount of Rs.39,68,750/- only as against the bank deposit of Rs.94,00,000/-. To arrive to such conclusion and in order to know the market value of the land in question, the A.O. referred the matter to Valuation Officer under section 55A of the I.T. Act, 1961. The Valuation Officer furnished his valuation report dated 17.01.2018 to the ITO, Ward-32(1), New Delhi wherein the market value of the land in question worked out at Rs.89,35,574/- and in description of property it is mentioned as ‘agricultural land’ as on the date of valuation i.e., 18.03.2010 which is much before the assessment order dated 25.03.2013. The Valuation Report of the Valuation Officer dated 17.01.2018 vide No.VAL/VO/ ITD/RTK/CG-3/2017-18/152 is placed on record. From the careful perusal of the above documents which are placed on record, I find that the authorities below are not properly appreciated it’s own remand report and valuation report besides the explanations offered by the assessee and made the impugned addition in the hands of assessee arbitrarily. Since the assessee has proved the source of the cash 9 ITA.No.7279/Del./2018 Smt. Rajo Devi, Delhi. deposit in the bank account and the fact that the land in question is agricultural land under section 2(14) of the I.T. Act, 1961 which was not a capital asset and exempt from tax, the addition made by the A.O. and confirmed by the Ld. CIT(A) cannot be held as sustainable. Aforesaid finding also get strong support from the orders of Coordinate Benches of Cochin and Chennai Benches of the Tribunal in the cases of ITO vs., Dr. Koshy George [2009] 317 ITR (AT) 116 (Cochin) and in the case of Mr. V. Nagarajan, Lalgudy, Tamilnadu vs., ITO, Ward-1(1), Trichy order dated 18.05.2022 in ITA.No.593/CHNY/2019 for the A.Y. 2015-16 respectively, as vehemently relied upon by the Ld. AR. Since the facts and circumstances of the said both orders are almost identical to the facts and circumstances of the present case, therefore, respectfully following the orders of the Coordinate Benches of the Tribunal (supra), I reach to a logical conclusion that the addition made by the A.O. and sustained by the Ld. CIT(A) cannot be held as sustainable. Therefore, the A.O. is directed to delete the addition. Accordingly, the appeal of the assessee is allowed. 10 ITA.No.7279/Del./2018 Smt. Rajo Devi, Delhi. 7. In the result, appeal of the assessee is allowed. Order pronounced in the open Court on 14.10.2022. Sd/- [CHANDRA MOHAN GARG] JUDICIAL MEMBER Delhi, Dated 14 th October, 2022 VBP/- Copy to 1. The appellant 2. The respondent 3. Ld. CIT(A) concerned 4. CIT concerned 5. DR ITAT “SMC” Bench, Delhi 6. Guard File //By Order// Assistant Registrar, ITAT, Delhi Benches, Delhi.