JCIT (OSD), Coimbatore V. Shri Suresh Kamath, Coimbatore

ITA 753/CHNY/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64133 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2003-2004
• Appeal Filed On: 25-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VI KRAMADITYA
• Assessee Lawyers: S SRIDHAR
• Keywords: Cost of acquisition; Valuation report; Block assessment
• Section: 143(3); 147; 148; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER I.T.A. NO. 634/MDS/2011 (ASSESSMENT YEAR : 2003-04) SHRI J.S. KAMATH, 118, PONNURANGAM ROAD (WEST), R.S. PURAM, COIMBATORE 641 002. PAN : AFPPK2802Q (APPELLANT) V. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE III, COIMBATORE. (RESPONDENT) I.T.A. NO. 752/MDS/2011 (ASSESSMENT YEAR : 2003-04) THE JOINT COMMISSIONER OF INCOME TAX (OSD), CENTRAL CIRCLE III, COIMBATORE. (APPELLANT) V. SHRI R. PRABHASHANKAR, 48, FATHER RHONDY STREET, R.S. PURAM, COIMBATORE 641 002. PAN : AFPPK2802J (RESPONDENT) I.T.A. NO. 753/MDS/2011 (ASSESSMENT YEAR : 2003-04) THE JOINT COMMISSIONER OF INCOME TAX (OSD), CENTRAL CIRCLE III, COIMBATORE. (APPELLANT) V. SHRI SURESH KAMATH, NO.5, PONNURANGAM ROAD (EAST), R.S. PURAM, COIMBATORE 641 002. PAN : AFPPK2803R (RESPONDENT) 2 I.T.A. NO. 634/MDS/10 I.T.A. NOS. 752 TO 754/MDS/11 I.T.A. NO. 797/MDS/11 I.T.A. NO. 754/MDS/2011 (ASSESSMENT YEAR : 2003-04) THE JOINT COMMISSIONER OF INCOME TAX (OSD), CENTRAL CIRCLE III, COIMBATORE. (APPELLANT) V. SHRI R. JAGANNATHAN, 39, LIC COLONY, R.S. PURAM, COIMBATORE 641 002. PAN : AEEPK4030Q (RESPONDENT) I.T.A. NO. 797/MDS/2011 (ASSESSMENT YEAR : 2003-04) MRS. P. MANJU (LEGAL HEIR), LATE R. PRABHASHANKAR, 48, FATHER FHONDY STREET, R.S. PURAM, COIMBATORE 641 002. PAN : AFPPK2802J (APPELLANT) V. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE III, COIMBATORE. (RESPONDENT) ASSESSEES BY : SHRI S. SRIDHAR, ADVOCATE REVENUE BY : SHRI VIKRAMADITYA, JCIT DATE OF HEARING : 18.07.2012 DATE OF PRONOUNCEMENT : 08.08.2012 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : THESE APPEALS OF WHICH, TWO ARE OF THE ASSESSEES AND THREE ARE OF THE REVENUE. ALL RELATE TO AN ASSESSMENT OF CAP ITAL GAINS FOR CERTAIN PROPERTIES SOLD AT COIMBATORE. SINCE THE BASIC FAC TS GIVING RAISE TO THE 3 I.T.A. NO. 634/MDS/10 I.T.A. NOS. 752 TO 754/MDS/11 I.T.A. NO. 797/MDS/11 ASSESSMENT IN APPEALS ARE SAME, THE APPEALS ARE DIS POSED BY THIS CONSOLIDATED ORDER. 2. FACTS APROPOS ARE THAT DURING A SEARCH CONDUCTED ON 26.11.2002, IN THE PREMISES OF ONE M/S PAVIZHAM JEWELLERS OWNED BY ONE SHRI C.V. SUNNY, A FLOPPY DISC WAS FOUND FROM WHICH IT WAS AS CERTAINED BY THE REVENUE THAT THE SAID SHRI C.V. SUNNY HAD PURCHASED CERTAIN PROPERTIES AT COIMBATORE FROM SHRI J.S. KAMATH, ONE OF ASSESSE E HERE AND HIS BROTHER SHRI J.R. KAMATH. IT SEEMS A CONSEQUENTIAL SEARCH WAS CONDUCTED IN THE PREMISES OF SHRI J.S. KAMATH ON 2. 12.2002. IN THE COURSE OF ABOVE MENTIONED SEARCHES, IT WAS NOTED BY THE REVENUE THAT SHRI J.S. KAMATH, ONE OF THE ASSESSEES HERE ALONG W ITH HIS BROTHER SHRI J.R. KAMATH, HAD SOLD CERTAIN PIECES OF LAND TO ONE SHRI T. SHANTAKUMAR OF M/S KIRTILAL KALIDAS & CO. AND CERTAIN OTHER PER SONS, INCLUDING M/S PAVAZHAM JEWELLERS, AS DETAILED HEREUNDER:- SL.NO. NAME OF THE BUYER EXTENT OF LAND DATE OF SALE SALE CONSIDERATION AS PER SALE DEED ` ACTUAL CONSIDERATION AS PER REVENUE ` 1. T SHANTAKUMAR M/S KIRTILAL KALIDAS & CO., RAJA STREET, COIMBATORE 30.888 CENTS OF LAND & BUILDING 10.06.2002 21,621,600 30,888,000 2. MRS PINKY LIJO PAVIZHAM JEWELLERY GROUP 3.24 CENTS OF LAND & BUILDING 06.08.2002 1,982,000 3,402,000 4 I.T.A. NO. 634/MDS/10 I.T.A. NOS. 752 TO 754/MDS/11 I.T.A. NO. 797/MDS/11 3. MR. LIJO S CHUNGATH PAVIZHAM JEWELLERY GROUP 0.931 CENTS OF LAND & BUILDING 06.08.2002 690,000 977,550 4. SHRI C.V. SUNNY PAVIZHAM JEWELLERY GROUP 3.241 CENTS OF LAND & BUILDING 28.10.2002 1,616,685 3,403,050 5. MR. LIJO S CHUNGATH PAVIZHAM JEWELLERY GROUP 2.32 CENTS OF LAND & TOTAL 9.732 CENTS OF LAND & BUILDING 28.10.2002 1,146,990 2,436,000 TOTAL 40.62 CENTS (30.888 + 9.732) 27,057,275 41,106,600 THEREAFTER, BLOCK ASSESSMENT PROCEEDINGS WERE INITI ATED AGAINST SHRI J.S. KAMATH AND SUCH BLOCK ASSESSMENT WAS COMPLETED ON 12.12.2006 COMPUTING THE CAPITAL GAINS ARISING OUT OF THE SALE TAKING THE REALIZED CONSIDERATION AS ` 4,11,06,600/-. FIFTY PERCENT OF THE CAPITAL GAINS ALONE WAS CONSIDERED IN THE HANDS OF SHRI J.S. KAMATH, SI NCE THE PROPERTY AS AFOREMENTIONED WAS JOINTLY HELD BY HIM ALONG WITH H IS BROTHER SHRI J.R. KAMATH. SHRI J.S. KAMATH, THEREAFTER, MOVED IN APP EAL AGAINST THE ABOVE MENTIONED BLOCK ASSESSMENT, AND IN SUCH APPEA L, HE ASSAILED THE VALIDITY OF THE BLOCK ASSESSMENT AND THE COMPUTATIO N OF LONG TERM CAPITAL GAINS MADE BY THE ASSESSING OFFICER IN THE BLOCK AS SESSMENT. SINCE THE TRANSACTIONS OF SALE TOOK PLACE IN THE PREVIOUS YEA R IN WHICH SEARCH WAS 5 I.T.A. NO. 634/MDS/10 I.T.A. NOS. 752 TO 754/MDS/11 I.T.A. NO. 797/MDS/11 CONDUCTED, CIT(APPEALS) WAS OF THE OPINION THAT INC OME ARISING OUT OF SUCH TRANSACTIONS HAD TO BE DETERMINED ON THE BASIS OF BOOKS OF ACCOUNTS. ACCORDING TO THE LD. CIT(APPEALS), TRANS ACTION RECORDED IN DOCUMENTS MAINTAINED IN NORMAL COURSE COULD NOT BE CONSIDERED AS UNDISCLOSED INCOME. AS PER THE LD. CIT(APPEALS), T HE TRANSACTIONS WERE RECORDED IN A REGISTERED SALE DEED AND REGISTRATION OF SUCH SALE DEED WAS EFFECTED BEFORE THE DATE OF THE SEARCH. THEREF ORE, SUCH AMOUNTS WHICH WERE RECORDED IN THE REGISTERED SALE DEED COU LD NOT BE CONSIDERED AS PART OF UNDISCLOSED INCOME FOR THE BLOCK PERIOD. WITH REGARD TO THE COMPUTATION OF THE CAPITAL GAINS MADE BY THE ASSESS ING OFFICER, CIT(APPEALS) WAS OF THE OPINION THAT THOUGH ASSESSE E HAD MENTIONED ` 3,08,88,000/- AS PAYMENT MADE TO SHRI T. SHANTAKUMA R FOR PROPERTY MENTIONED AT SL.NO.1 OF THE TABLE ABOVE, SHRI T. SH ANTAKUMAR IN HIS STATEMENT BEFORE THE REVENUE HAD AFFIRMED THAT WHAT WAS PAID BY HIM WAS ONLY ` 2,16,21,600/- MENTIONED IN THE REGISTERED DEED. A SSESSEE IN HIS STATEMENT GIVEN DURING THE COURSE OF SEARCH, HA D MENTIONED THAT A SUM OF ` 92 LAKHS WAS PAID BY SHRI T. SHANTAKUMAR DIRECTLY TO THE TENANTS FOR VACATING THE PREMISES AND THEREFORE, TH IS WAS ALSO CONSIDERED BY THE ASSESSING OFFICER AS A PART OF TO TAL CONSIDERATION OF ` 3,08,80,000/-. HOWEVER, AS PER CIT(APPEALS), NONE OF THE TENANTS HAD ACCEPTED RECEIPT OF ANY AMOUNT FROM SHRI T. SHANTAK UMAR AND ACCORDING TO HIM, THE STATEMENT GIVEN BY THE ASSESS EE WAS NOT GOOD 6 I.T.A. NO. 634/MDS/10 I.T.A. NOS. 752 TO 754/MDS/11 I.T.A. NO. 797/MDS/11 ENOUGH TO CONSIDER ` 92 LAKHS AS UNDISCLOSED INCOME. EFFECTIVELY, CIT(APPEALS) HELD THAT ` 2,16,21,600/- MENTIONED IN THE REGISTERED SALE DEED FOR THE SALE EFFECTED TO SHRI T. SHANTAKUMAR C OULD BE CONSIDERED ONLY IN THE REGULAR ASSESSMENT FOR PREVIOUS YEAR TH OUGH IT FELL WITHIN THE FAG END OF THE BLOCK PERIOD, AND THAT THE SUM OF ` 92 LAKHS ALLEGED TO HAVE BEEN PAID BY SHRI T. SHANTAKUMAR TO THE TENANT S FOR VACATING THE PREMISES, COULD NOT BE CONSIDERED AS UNDISCLOSED IN COME AT ALL. HOWEVER, HE DID NOT ACCEPT THE ARGUMENT OF THE ASSE SSEE THAT THE ASSESSMENT ITSELF WAS NOT VALID. BOTH ASSESSEE AND REVENUE MOVED BEFORE THIS TRIBUNAL AND THIS TRIBUNAL DISMISSED TH E APPEAL OF THE REVENUE AND ACCEPTED THE APPEAL OF THE ASSESSEE HOL DING THAT BLOCK ASSESSMENT ITSELF WAS INVALID, FOR WANT OF SATISFAC TION OF THE REQUIREMENTS SPECIFIED IN SECTION 158BD OF INCOME-T AX ACT, 1961 (IN SHORT 'THE ACT'). 3. THEREAFTER, THE ASSESSING OFFICER, WHILE DOING T HE REGULAR ASSESSMENT OF THE ASSESSEE SHRI J.S. KAMATH FOR PRE VIOUS YEAR ENDING 31.3.2003 RELEVANT TO IMPUGNED ASSESSMENT YEAR, CON SIDERED THE DIRECTIONS OF THE CIT(APPEALS) IN THE BLOCK ASSESSM ENT PROCEEDINGS, AND MADE AN ADDITION FOR LONG TERM CAPITAL GAINS ARISIN G OUT OF THE ABOVE TRANSACTIONS MENTIONED IN THE TABLE AT PARA 2 ABOVE . IN SUCH REGULAR ASSESSMENT, HOWEVER, THE A.O. CONSIDERED ONLY THE C ONSIDERATION 7 I.T.A. NO. 634/MDS/10 I.T.A. NOS. 752 TO 754/MDS/11 I.T.A. NO. 797/MDS/11 RECORDED IN THE REGISTERED DOCUMENT FOR THE COMPUTA TION OF LONG TERM CAPITAL GAINS. NEVERTHELESS, WITH REGARD TO THE FA IR MARKET VALUE AS ON 1.4.1981, THE A.O. MADE SOME ADDITIONS. REGULAR AS SESSMENT WAS ACCORDINGLY COMPLETED. 4. ASSESSEE MOVED IN APPEAL BEFORE THE CIT(APPEALS) AGAINST THE ADDITION MADE IN THE REGULAR ASSESSMENT FOR THE LON G TERM CAPITAL GAINS. ACCORDING TO ASSESSEE, THE A.O. HAD DONE SUCH A REG ULAR ASSESSMENT FOR THE IMPUGNED ASSESSMENT YEAR BASED ON THE DIREC TIONS OF THE CIT(APPEALS) FOR THE BLOCK PERIOD WHICH STOOD QUASH ED BY THE TRIBUNAL. AS PER THE ASSESSEE, SUCH DIRECTIONS WERE THEREFORE , NO MORE VALID. THOUGH VARIOUS OTHER GROUNDS WERE ALSO RAISED BY TH E ASSESSEE, IT HAS BEEN CLEARLY MENTIONED BY THE CIT(APPEALS) IN HIS O RDER THAT NONE OF SUCH GROUNDS WERE PRESSED BY THE ASSESSEE BEFORE HI M. ON THE LEGAL GROUND RAISED BY THE ASSESSEE, LD. CIT(APPEALS) WAS OF THE OPINION THAT THE REGULAR ASSESSMENT ORDER FOR THE IMPUGNED ASSES SMENT YEAR HAVING BEEN PASSED TAKING INTO ACCOUNT THE MERITS OF THE C ASE COULD NOT BE HELD INVALID. ACCORDING TO HIM, ADDITIONS MADE IN THE R EGULAR ASSESSMENT HAD NOTHING TO DO WITH BLOCK ASSESSMENT ORDER, WHICH ST OOD QUASHED BY THE TRIBUNAL. DIRECTIONS OF THE CIT(APPEALS) FOR THE B LOCK ASSESSMENT PROCEEDINGS WAS NOT HIT BY QUASHING OF THE BLOCK AS SESSMENT. LD. CIT(APPEALS) ALSO NOTED THAT FOR THE IMPUGNED ASSES SMENT YEAR, IT WAS NOT AN ASSESSMENT BY WAY OF THE REOPENING BUT, ONLY A REGULAR 8 I.T.A. NO. 634/MDS/10 I.T.A. NOS. 752 TO 754/MDS/11 I.T.A. NO. 797/MDS/11 ASSESSMENT DONE UNDER SECTION 143(3) OF THE ACT. H E, THEREFORE, HELD THAT THE A.O. WAS JUSTIFIED IN CONSIDERING THE LONG TERM CAPITAL GAINS IN THE REGULAR ASSESSMENT. 5. SINCE THE PROPERTY SOLD WAS JOINTLY HELD BY SHRI J.S. KAMATH, THE ASSESSEE WITH SHRI J.R. KAMATH, AND SHRI J.R. KAMAT H EXPIRED, ASSESSING OFFICER INITIATED PROCEEDINGS AGAINST THE LEGAL HEIRS OF SHRI J.R. KAMATH ALSO. THE LEGAL HEIRS, NAMELY, SHRI R. PRABHASANKAR, SHRI R. JAGANNATHAN AND SHRI R. SURESH ARE ALL PARTIES T O THESE APPEALS, IN ADDITION TO SHRI J.S. KAMATH. PROCEEDINGS WERE INI TIATED AGAINST THESE THREE PERSONS SINCE THEY WERE ENTITLED TO ONE-THIRD OF THE HALF-SHARE HELD BY THEIR FATHER SHRI J.R. KAMATH. IN OTHER WORDS, EACH OF THESE WERE ENTITLED TO ONE-SIXTH OF THE TOTAL CONSIDERATION RE CEIVED ON THE SALE OF THE PROPERTY MENTIONED IN THE TABLE AT PARA 2 ABOVE. S UCH PROCEEDINGS WERE INITIATED UNDER SECTION 147 OF THE ACT. THESE THREE ASSESSEES FILED RETURNS ON RECEIPT OF NOTICES UNDER SECTION 148 OF THE ACT AND CLAIMED LONG TERM CAPITAL A LOSS AS ARISING ON THE SALE OF THE PROPERTY MENTIONED IN THE TABLE AT PARA 2 ABOVE. CLAIM OF LOSS BY THE SE THREE ASSESSEES WERE WORKED OUT AS UNDER:- (AMOUNT IN RUPEES) GROSS SALE CONSIDERATION RECEIVED ON SALE 4,10,06,600 LESS: EXPENSES IN CONNECTION WITH TRANSFER . 92,86,400 3,17,20,200 LESS: 50% SHARE DUE TO SHRI J.S. KAMATH 1,59,10,100 1,58,10,100 9 I.T.A. NO. 634/MDS/10 I.T.A. NOS. 752 TO 754/MDS/11 I.T.A. NO. 797/MDS/11 LESS: LIABILITIES SETTLED 64,70,000 NET SALE CONSIDERATION 94,40,100 LESS: INDEXED COST OF ACQUISITION 1,36,49,073 LONG TERM CAPITAL LOSS 42,08,973 SHARE OF CAPITAL LOSS CLAIMED BY EACH OF THE THREE ASSESSEES 14,02,991 6. AGAINST THE CLAIM OF EXPENSES OF ` 92,86,400/- IN CONNECTION WITH TRANSFER, AND ` 64,70,000/- CLAIMED AS LIABILITIES OF SHRI J.R. KA MATH, SETTLED BY THE ASSESSEES, ASSESSING OFFICER WAS OF THE OPINION THAT NO EVIDENCE WHATSOEVER WAS PRODUCED. ACCORDING TO HIM , LIABILITIES WHICH PERTAINED TO SHRI J.R. KAMATH WERE SETTLED BY LEGAL HEIRS USING THE SALE PROCEEDS, AND THIS WAS ONLY AN APPLICATION OF THE S ALE PROCEEDS AND NOT AN EXPENSE INCURRED IN CONNECTION WITH TRANSFER. I NSOFAR AS THE CLAIM OF ` 92,86,400/- WAS CONCERNED, A.O. WAS OF THE OPINION THAT THESE AMOUNTS WHICH WERE STATED TO HAVE BEEN PAID BY SHRI T. SHANTAKUMAR, ONE OF THE PURCHASERS, TO THE TENANTS DIRECTLY, WER E DENIED BOTH BY SHRI T. SHANTAKUMAR AS WELL AS THE TENANTS. THEREFORE, ACCORDING TO HIM, THE CLAIM OF EXPENSES OF ` 92,86,400/- ALSO COULD NOT BE ALLOWED. IN THIS VIEW OF THE MATTER, HE WORKED OUT THE CAPITAL GAINS OF THESE THREE ASSESSEES AS UNDER:- GROSS SALE CONSIDERATION AS PER TABLE AT PARA 2 ABOVE. 4,11,06,600 LESS: EXPENSES IN CONNECTION WITH TRANSFER CLAIMED AT ` 92,86,400 BY THE ASSESSEE NOT ALLOWED. NIL LESS: 50% SHARE DUE TO SHRI J.S.KAMATH 2,05,53,300 10 I.T.A. NO. 634/MDS/10 I.T.A. NOS. 752 TO 754/MDS/11 I.T.A. NO. 797/MDS/11 LESS: LIABILITIES CLAIMED AT ` 64,70,000 BY THE ASSESSEE NOT ALLOWED. NIL NET SALE CONSIDERATION 2,05,53,300 LESS: INDEXED COST OF ACQUISITION , TAKEN BY THE A.O. 8,89,530 LONG TERM CAPITAL GAINS 1,96,63,770 SHARE DUE TO EACH ASSESSEE (1/3) 65,54,590 INDEXED COST OF ACQUISITION CLAIMED BY THE ASSESSEE AT ` 1,36,49,073/- WAS REDUCED BY THE ASSESSING OFFICER TO ` 8,89,530/- ON THE BASIS OF A VALUATION REPORT FROM THE VALUATION DEPARTMENT. 7. ALL THE THREE ASSESSEES MOVED IN APPEAL BEFORE C IT(APPEALS). GROUNDS TAKEN BEFORE CIT(APPEALS) WAS THAT ASSESSME NT FOR CAPITAL GAINS COULD NOT HAVE BEEN MADE IN THE REGULAR ASSES SMENTS, BUT SHOULD HAVE BEEN MADE ONLY IN A BLOCK ASSESSMENT AS PER SE CTION 158BD OF THE ACT. ACCORDING TO THE ASSESSEES, WHEN INCRIMIN ATING DOCUMENTS BELONGING TO THIRD PARTIES WERE FOUND DURING THE CO URSE OF A SEARCH, PROCEDURE PRESCRIBED UNDER SECTION 158BD HAD TO BE FOLLOWED. ASSESSING OFFICER FELL IN ERROR IN MAKING A REGULAR ASSESSMENT OF INCOME, WHICH OTHERWISE WOULD HAVE BEEN PART OF UNDISCLOSED INCOME. INSOFAR AS THE DISALLOWANCE OF PAYMENT OF ` 64,70,000/- CLAIMED AS SETTLEMENT OF LIABILITIES OF SHRI J.R. KAMATH WAS CONCERNED, A RGUMENT OF THE ASSESSEES WAS THAT THESE LIABILITIES WERE ATTACHED TO THE PROPERTY SOLD AND HENCE, THEY WERE BOUND TO PAY SUCH AMOUNTS. AS FOR THE DISALLOWANCE OF ` 92,86,400/- CLAIMED AS EXPENSES RELATING TO TRANSF ER, 11 I.T.A. NO. 634/MDS/10 I.T.A. NOS. 752 TO 754/MDS/11 I.T.A. NO. 797/MDS/11 ARGUMENT OF THE ASSESSEE WAS THAT IF THIS WAS CONSI DERED AS PART OF SALE CONSIDERATION, THEN IT HAD TO BE ALLOWED AS EXPENSE . 8. CIT(APPEALS) WAS NOT IMPRESSED BY THE LEGAL ARGU MENT OF THE THREE ASSESSEES THAT ASSESSING OFFICER COULD NOT HA VE MADE AN ASSESSMENT UNDER SECTION 147 READ WITH SECTION 143( 3) OF THE ACT FOR THE IMPUGNED ASSESSMENT YEAR. ACCORDING TO HIM, TH ERE WAS NO INCRIMINATING DOCUMENTS PERTAINING TO THESE ASSESSE ES FOUND DURING THE SEARCH OF SHRI J.S. KAMATH. THE SEARCH IN THE CASE OF PAVIZHAM JEWELLERS HAD ONLY EVIDENCED PAYMENT OF ON-MONEY TO SHRI J.S. KAMATH AND OTHERS. JUST BECAUSE ASSESSEE WAS ONE OF THE P ARTIES IN A TRANSACTION MENTIONED IN A PRINT-OUT TAKEN FROM PRE MISES OF ANOTHER PERSON DURING THE COURSE OF SEARCH, IT WOULD NOT BE POSSIBLE TO SAY THAT PROCEEDINGS UNDER SECTION 158BD ALONE OUGHT HAVE BE EN INITIATED. THEREFORE, ACCORDING TO HIM, ASSESSING OFFICER WAS JUSTIFIED IN MAKING AN ASSESSMENT UNDER SECTION 147 R.W.S. 143(3) OF TH E ACT. AS FAR THE CLAIM OF LIABILITIES PAID TO M/S MUNICIPAL SOWBAGYA NIDHI LTD. AND M/S LORD KRISHNA BANK LTD., CIT(APPEALS) NOTED THAT THE RE WERE NO EVIDENCE FURNISHED BY THE ASSESSEE TO SHOW THAT THESE LIABIL ITIES WERE ATTACHED TO THE SUBJECT PROPERTY. ACCORDING TO HIM, IT WAS NOT HING BUT PAYMENTS MADE OUT OF THE MONEY RECEIVED. HOWEVER, CIT(APPEA LS) HELD THAT THE DISALLOWANCE OF ` 92,86,400/- WAS NOT CALLED FOR SINCE, ACCORDING TO HIM, 12 I.T.A. NO. 634/MDS/10 I.T.A. NOS. 752 TO 754/MDS/11 I.T.A. NO. 797/MDS/11 THERE WAS NO MATERIAL TO SUPPORT SUCH DISALLOWANCE. AS PER THE CIT(APPEALS), IF THE SUM OF ` 92 LAKHS STATED BY SHRI J.S. KAMATH TO HAVE BEEN PAID TO SHRI T. SHANTAKUMAR TO THE TENANT S WAS DISBELIEVED, THEN THE CONSIDERATION RECEIVED BY THE ASSESSEE ON THE SALE OF THE PROPERTY WOULD GO DOWN ACCORDINGLY. IF IT WAS BELI EVED, THEN SUCH PAYMENT HAS TO BE CONSIDERED AS EXPENSES IN CONNECT ION WITH THE TRANSFER AND HAD TO BE DEDUCTED. SINCE THE REGISTE RED SALE DEEDS WERE FOR ` 2,16,21,600/- AND NOT FOR ` 3,08,80,000/-, CIT(APPEALS) WAS OF THE OPINION THAT THE CONSIDERATION ON SALE HAD TO BE TA KEN AS THE FORMER AMOUNT. THUS, HE CONFIRMED THE ORDER OF THE ASSESS ING OFFICER IN THE CASE OF ALL THESE THREE ASSESSEES EXCEPT FOR DELETI NG THE DISALLOWANCE OF ` 92,86,400/-, WHILE COMPUTING THE LONG TERM CAPITAL GAINS. 9. NOW BEFORE US, APPEALS HAVE BEEN FILED BY THE AS SESSEE SHRI J.S. KAMATH AND LATE R. PRABHASANKAR REPRESENTED BY HIS LEGAL HEIR MRS. P. MANJU. OTHER APPEALS ARE BY THE REVENUE. OUT OF T HESE APPEALS, WE ARE TAKING THE APPEAL OF SHRI J.S. KAMATH FIRST. G ROUNDS TAKEN BY SHRI J.S. KAMATH ARE A BIT DIFFERENT WHEN COMPARED TO TH OSE IN THE OTHER APPEALS. GRIEVANCE OF THE ASSESSEE SHRI J.S. KAMAT H IS THAT THE CIT(APPEALS) SUSTAINED THE ORDER OF ASSESSMENT RELA TING THE TECHNICAL OBJECTIONS WITH REGARD TO THE PROCEEDINGS DONE UNDE R SECTION 143(3) OF THE ACT, DESPITE THE BLOCK ASSESSMENT ORDER IN ASSE SSEE'S OWN CASE 13 I.T.A. NO. 634/MDS/10 I.T.A. NOS. 752 TO 754/MDS/11 I.T.A. NO. 797/MDS/11 BEING QUASHED. AS PER THE ASSESSEE, THE CIT(APPEAL S) IN HIS ORDER IN THE APPEAL AGAINST THE BLOCK ASSESSMENT HAD GIVEN D IRECTION TO THE ASSESSING OFFICER FOR DOING A REGULAR ASSESSMENT FO R THE IMPUGNED ASSESSMENT YEAR FOR COMPUTING LONG TERM CAPITAL GAI NS ARISING OUT OF THE SALE OF PROPERTY, BASED ON CONSIDERATION MENTIONED IN REGISTERED DEEDS. SINCE THIS ORDER OF CIT(APPEALS) HAD BEEN SET ASIDE BY THE TRIBUNAL, THE REGULAR ASSESSMENT DONE FOR THE IMPUGNED ASSESSMENT YEAR WHICH HAD ITS GENESIS ON THE DIRECTIONS OF THE CIT(APPEALS), WAS INVALID. ASSESSEE IS ALSO AGGRIEVED THAT CIT(APPEALS) CONSIDERED OTHE R GROUNDS RAISED BEFORE HIM TO HAVE BEEN NOT PRESSED BY THE ASSESSEE . 10. BEFORE US, LEARNED A.R. STRONGLY ASSAILING THE ORDERS OF AUTHORITIES BELOW, SUBMITTED THAT THE SEARCH WAS DONE IN THE CA SE OF THE ASSESSEE ON 2.12.2002 AND SALE TRANSACTIONS OF LAND WERE ALL COMPLETED BEFORE THAT DATE. ACCORDING TO HIM, THEREFORE, ASSESSMENT OF SUCH AMOUNTS, WHETHER UNDER THE HEAD LONG TERM CAPITAL GAINS OR ANY OTHER HEAD, COULD ONLY BE DONE IN THE BLOCK ASSESSMENT PROCEEDI NGS. IN SUCH BLOCK ASSESSMENT, THESE AMOUNTS WERE CONSIDERED BY THE AS SESSING OFFICER FOR COMPUTING LONG TERM CAPITAL GAINS. RELIANCE WA S PLACED ON THE BLOCK ASSESSMENT ORDER PLACED AT PAPER-BOOK PAGES 8-18. ACCORDING TO HIM, CIT(APPEALS), ON ASSESSEES APPEAL, HAD UPHELD SUCH BLOCK ASSESSMENT ORDER OF THE A.O., BUT FOR THE SUM OF ` 92 LAKHS ALLEGED TO HAVE BEEN 14 I.T.A. NO. 634/MDS/10 I.T.A. NOS. 752 TO 754/MDS/11 I.T.A. NO. 797/MDS/11 PAID BY SHRI T. SHANTAKUMAR TO THE TENANTS FOR VACA TING THE PROPERTY. NEVERTHELESS, HE HAD DIRECTED THE ASSESSING OFFICER TO CONSIDER THE AMOUNTS AS MENTIONED IN THE REGISTERED SALE DEEDS I N THE REGULAR ASSESSMENT FOR THE IMPUGNED ASSESSMENT YEAR AND NOT IN THE BLOCK PERIOD. HOWEVER, LEARNED A.R. POINTED OUT THAT THE TRIBUNAL HAD QUASHED THE BLOCK ASSESSMENT ITSELF ON LEGAL GROUND S. THEREFORE, ACCORDING TO HIM, SUCH DIRECTION OF THE CIT(APPEALS ) HAD NO LEGS TO STAND. ASSESSING OFFICER COULD NOT DO A REGULAR AS SESSMENT FOR ANY INCOME FOUND AT THE TIME OF SEARCH AND PERTAINING T O THE PERIOD PRIOR TO THE DATE OF SEARCH IN A REGULAR ASSESSMENT. THEREF ORE, ACCORDING TO HIM, THE REGULAR ASSESSMENT DONE FOR IMPUGNED ASSES SMENT YEAR HAD TO BE QUASHED. IN ANY CASE, POINTING OUT THE STATEMEN T GIVEN BY THE ASSESSEE SHRI J.S. KAMATH UNDER SECTION 132(4) OF T HE ACT, PLACED AT PAPER-BOOK PAGES 4-7, LEARNED A.R. POINTED OUT THAT SHRI J.S. KAMATH HAD HIMSELF MENTIONED AS ANSWER TO QUESTION NO.3 TH AT REGISTERED AMOUNT AS PER THE DOCUMENT, WAS ONLY ` 2,16,21,600/- AND THE BALANCE AMOUNT OUT OF THE TOTAL SUM OF ` 3,08,80,000/- WAS PAID BY SHRI T. SHANTAKUMAR FOR SETTLING THE TENANTS IN GETTING THE M EVACUATED. THEREFORE, ACCORDING TO HIM, IF AT ALL THE AMOUNT W AS TO BE CONSIDERED IN THE REGULAR ASSESSMENT, THEN ONLY THE AMOUNT RECORD ED IN THE DOCUMENT ALONE COULD HAVE BEEN TAKEN, AND THIS WAS RIGHTLY A PPRECIATED BY THE CIT(APPEALS). 15 I.T.A. NO. 634/MDS/10 I.T.A. NOS. 752 TO 754/MDS/11 I.T.A. NO. 797/MDS/11 11. PER CONTRA, LEARNED D.R. SUBMITTED THAT JUST BE CAUSE THE ASSESSMENT UNDER BLOCK ASSESSMENT PROCEEDINGS STOOD QUASHED WOULD NOT MEAN THAT THE ASSESSING OFFICER WAS LEFT WITH N O POWER TO PROCEED WITH A REGULAR ASSESSMENT. ESPECIALLY SO, SINCE TH E DATE OF TRANSFER OF THE PROPERTY FELL WITHIN THE PREVIOUS YEAR IN WHICH SEARCH ITSELF WAS CONDUCTED AND ASSESSEE WAS STILL TO FILE A RETURN F OR THE RELEVANT PREVIOUS YEAR. THERE WAS NOTHING IN CHAPTER XIV-B WHICH STIPULATED THAT ASSESSING OFFICER WAS DEPRIVED OF HIS POWER TO MAKE A REGULAR ASSESSMENT. THEREFORE, ACCORDING TO HIM, THE ASSES SMENT WHICH WAS DONE WAS PERFECTLY VALID. ON OTHER GROUNDS RAISED BY THE ASSESSEE, LEARNED D.R. POINTED OUT THAT NO SUCH GROUNDS WERE PRESSED BY THE ASSESSEE BEFORE THE CIT(APPEALS) AND CIT(APPEALS) H AD RECORDED A SPECIFIC FINDING TO THIS EFFECT IN HIS ORDER. 12. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL SUBMISSIONS. THERE IS NO DOUBT THAT THE IMPUGNED SALE TRANSACTIO NS MENTIONED AT TABLE AT PARA 2 ABOVE, FELL BEFORE DATE OF THE SEAR CH, BUT, NEVERTHELESS, WERE WITHIN THE PREVIOUS YEAR RELEVANT TO IMPUGNED ASSESSMENT YEAR. DATE OF SEARCH IN ASSESSEES CASE WAS 2.12.2002 AND IN THE CASE OF M/S PAVIZHAM JEWELLERS WAS ON 26.11.2002. LAST OF THE SALE TRANSACTION WAS COMPLETED ON 28.10.2002. SO, ALL THESE EVENTS H APPENED WITHIN THE PREVIOUS YEAR 1.4.2002 TO 31.3.2003. NO DOUBT, THE RE WAS A BLOCK 16 I.T.A. NO. 634/MDS/10 I.T.A. NOS. 752 TO 754/MDS/11 I.T.A. NO. 797/MDS/11 ASSESSMENT DONE ON THE ASSESSEE FOR THE PERIOD 1.4. 96 TO 26.11.2002. IN SUCH ASSESSMENT, THE UNDISCLOSED INCOME ARISING OUT OF ALLEGED SALE OF LAND WAS INDEED CONSIDERED BY THE ASSESSING OFFI CER. IN ASSESSEES APPEAL, CIT(APPEALS) HELD THAT THE VALUES MENTIONED IN REGISTERED DOCUMENTS HAD TO BE CONSIDERED ONLY IN A REGULAR AS SESSMENT. AT THE SAME TIME, HE DELETED THE ADDITION OF ` 92 LAKHS SINCE THE BUYER AS WELL AS TENANTS HAD DENIED ANY SUCH AMOUNTS TO HAVE BEEN PAID AND RECEIVED. SUCH BLOCK ASSESSMENT STOOD QUASHED BY T HIS TRIBUNAL VIDE ITS ORDER DATED 26 TH JUNE, 2009. THE QUESTION BEFORE US IS WHETHER SUC H QUASHING OF BLOCK ASSESSMENT FOR THE PERIOD 1.4.96 TO 26.11.2002 WILL RENDER THE ASSESSING OFFICER HELPLESS FOR MAKING A REGULAR ASSESSMENT FOR THE IMPUGNED ASSESSMENT YEAR, CONSIDERING THE T RANSACTIONS WHICH HAPPENED NOT ONLY DURING THE PERIOD 27.11.2002 TO 3 1.3.2003, BUT ALSO FOR THE PERIOD 1.4.2002 TO 26.11.2002. PERTINENT P OINT WHICH IS TO BE NOTED HERE IS THAT WHAT WAS ASSESSED BY THE ASSESSI NG OFFICER IN THE REGULAR ASSESSMENT WAS THE COMPUTATION OF LONG TERM CAPITAL GAINS, BASED ON THE DOCUMENTED VALUE. THE DOCUMENTED VALU E WAS ` 2,70,57,275/- WHICH, INTER ALIA, INCLUDED ` 2,16,21,600/- PERTAINING TO THE SALE OF PROPERTY TO SHRI T. SHANTAKUMAR. ASSESSING OFFICER DID NOT TAKE THE SALE CONSIDERATION FROM THE STATEMENT GIVEN BY THE ASSESSEE DURING THE COURSE OF THE SEARCH, IN WHICH HE CLEARLY MENTI ONED THAT CONSIDERATION WAS ` 3,08,80,000/-, AGAINST REGISTERED VALUE OF ` 17 I.T.A. NO. 634/MDS/10 I.T.A. NOS. 752 TO 754/MDS/11 I.T.A. NO. 797/MDS/11 2,16,21,600/-. IN OTHER WORDS, ASSESSING OFFICER I N THE REGULAR ASSESSMENT HAD ONLY CONSIDERED THE AMOUNT RECORDED IN THE REGISTERED DEEDS FOR COMPUTING LONG TERM CAPITAL GAINS. THERE IS NOTHING IN THE INCOME-TAX ACT WHICH SAYS THAT PENDING REGULAR ASSE SSMENT PROCEEDINGS WERE TO BE FROZEN OR TO BE SUBSTITUTED WHEN AN ASSESSMENT OF UNDISCLOSED INCOME FOR A BLOCK PERIOD WAS DONE. EXERCISE UNDER SECTION 143(2) AND (3) FOR REGULAR ASSESSMENT IS IN CONTRAST TO THE EXERCISE OF A BLOCK ASSESSMENT UNDER SECTION 158BD READ WITH SECTION 158BC(B) WHERE AN ASSESSING OFFICER HAS TO ASSESS O NLY UNDISCLOSED INCOME BASED ON EVIDENCE FOUND AS A RESULT OF SEARC H. ASSESSEE HAD, FOR THE IMPUGNED ASSESSMENT YEAR, FILED RETURN OF I NCOME ON 30.9.2003. ONCE ASSESSEE HAD FILED SUCH A RETURN OF INCOME, AS SESSING OFFICER WAS DUTY BOUND TO COMPLETE THE ASSESSMENT AND THE ASSES SING OFFICER WAS ONLY DOING HIS STATUTORY DUTY WHILE COMPLETING SUCH ASSESSMENT. 13. PREVIOUS YEAR IS DEFINED IN SECTION 3 OF THE ACT AND ACCORDINGLY, PREVIOUS YEAR MEANS FINANCIAL YEAR IMMEDIATELY PR ECEDING AN ASSESSMENT YEAR. ONLY EXCEPTIONS ARE FOR A BUSINES S OR PROFESSION NEWLY SET UP, OR WHERE THE SOURCE OF INCOME WAS NEW LY COMING INTO EXISTENCE IN THE SAID FINANCIAL YEAR. SECTION 2(45 ) OF THE ACT STATES THAT TOTAL INCOME MEANS TOTAL AMOUNT OF INCOME REFERRE D TO IN SECTION 5. SECTION 5 STIPULATES THAT TOTAL INCOME OF ANY PREVI OUS YEAR OF A PERSON 18 I.T.A. NO. 634/MDS/10 I.T.A. NOS. 752 TO 754/MDS/11 I.T.A. NO. 797/MDS/11 WHO IS A RESIDENT, SHALL INCLUDE INCOME FROM WHATEV ER SOURCE DERIVED. THE CHARGE OF INCOME-TAX IS ON THE TOTAL INCOME OF A PERSON FOR THE PREVIOUS YEAR RELEVANT TO A GIVEN ASSESSMENT YEAR. THUS THE PREVIOUS YEAR IN ALL CASE BUT FOR THE EXCEPTIONS PROVIDED UN DER SECTION 3, WILL BE A FINANCIAL YEAR. THEREFORE, ASSESSING OFFICER IS EM POWERED TO CONSIDER ALL INCOME OF AN ASSESSEE FOR THE PREVIOUS YEAR AND ONLY WHERE UNDISCLOSED INCOME IS DETECTED AS A RESULT OF SEARC H, SUCH AMOUNT SHALL BE EXCLUDED FROM SUCH REGULAR ASSESSMENT. CIT(APPE ALS) WAS, IN OUR OPINION, CORRECT IN TAKING A VIEW THAT WHAT WAS DIS CLOSED IN THE REGISTERED SALE DEEDS WERE NOTHING BUT TRANSACTIONS RECORDED IN DOCUMENTS MAINTAINED IN NORMAL COURSE. WHEN THE DO CUMENTS ARE CONSIDERED AS MAINTAINED IN NORMAL COURSE, THE AMOU NTS RECORDED THEREIN COULD NOT BE CONSIDERED AS PART OF UNDISCLO SED INCOME. ASSESSING OFFICER HAD, FOR THE COMPUTATION OF LONG TERM CAPITAL GAINS IN THE CASE OF SHRI J.S. KAMATH, CONSIDERED ONLY THE A MOUNT MENTIONED IN THE REGISTERED DEEDS. HE HAD NOT EVEN GONE BY THE ADMISSION GIVEN BY THE ASSESSEE IN HIS OATH STATEMENT THAT THE ACTUAL CONSIDERATION WAS MORE. WE, THEREFORE, CANNOT FIND ANY INFIRMITY IN THE ORDER OF CIT(APPEALS) HOLDING THAT REGULAR ASSESSMENT FOR TH E IMPUGNED ASSESSMENT YEAR WAS VALID. 19 I.T.A. NO. 634/MDS/10 I.T.A. NOS. 752 TO 754/MDS/11 I.T.A. NO. 797/MDS/11 14. INSOFAR AS OTHER GROUNDS RAISED BY THE ASSESSEE WHICH ARE ON MERITS, WE FIND THAT NONE OF THESE ISSUES WERE PRES SED BY THE ASSESSEE BEFORE THE CIT(APPEALS). 15. WE ARE, THEREFORE, OF THE OPINION THAT THERE IS NO MERIT IN THE APPEAL OF THE ASSESSEE SHRI J.S. KAMATH. SUCH APPE AL STANDS DISMISSED. 16. NOW WE TAKE UP THE APPEALS OF THE REVENUE IN TH E CASE OF OTHER ASSESSEES, WHO ARE LEGAL HEIRS OF SHRI J.R. KAMATH. 17. LEARNED D.R., STRONGLY ASSAILING THE ORDERS OF CIT(APPEALS) IN THESE THREE CASES, STATED THAT CIT(APPEALS) ALLOWED DEDUCTION OF ` 92,86,400/- WHILE COMPUTING THE CAPITAL GAINS. ACC ORDING TO HIM, SHRI J.S. KAMATH HAD IN HIS ADMISSION DURING THE COURSE OF SEARCH, STATED THAT THE TOTAL CONSIDERATION RECEIVED FROM SHRI T. SHANTAKUMAR WAS ` 3,08,80,000/- AND NOT ` 2,16,21,600/-. THEREFORE, TO ALLOW SUCH SUMS AS EXPENSES, WHEN NEITHER THE BUYER NOR THE ALLEGED TE NANTS AFFIRMED, IT WAS NOT CORRECT. 18. PER CONTRA, LEARNED A.R. SUPPORTED THE ORDERS O F CIT(APPEALS) IN ALL THE THREE CASES. 20 I.T.A. NO. 634/MDS/10 I.T.A. NOS. 752 TO 754/MDS/11 I.T.A. NO. 797/MDS/11 19. WE HAVE PERUSED THE ORDERS IN THE CASE OF THES E ASSESSEES AND ALSO HEARD THE RIVAL SUBMISSIONS. IN ALL THESE THR EE CASES, ASSESSEES HAD SHOWN GROSS CONSIDERATION ON SALE OF LAND ` 4,10,06,600/- (CORRECT FIGURE OUGHT HAVE BEEN ` 4,11,06,600/- VIDE STATEMENT GIVEN BY SHRI J.S. KAMATH TABLE AT PARA 2 ABOVE.) THEY HAD COMPUTED LOSS FROM SALE OF PROPERTY AS ` 14,02,991/-. ASSESSING OFFICER HAD DISALLOWED THE CLAIM OF EXPENSES IN CONNECTION WITH TRANSFER ` 92,86,400/-. IT WOULD BE PERTINENT TO REPRODUCE THE ANSWER TO QUERY NO.3 GIVEN BY SHRI J.S. KAMATH WHEN HE WAS EXAMINED AT THE TIME OF SEARCH:- Q.NO.3: AS ANSWER TO Q.NO.3 OF YOUR STATEMENT DATED 27.11.02, YOU HAD STATED THAT A NET SALE CONSIDERATION OF ` 10.00 LAKHS PER CENT WAS RECEIVED BY YOU FROM SHRI T. SHANTAKUM AR OF M/S KIRTILAL KALIDAS & CO. AND THAT T. SHANTAKUMAR DISC HARGED A LIABILITY OF ` 84.00 LAKHS TOWARDS VACATING THREE TENANTS FROM THE SAID LAND AS DETAILED BELOW:- (1) M/S RANGASAMY CHETTIAR & CO. - ` 16.00 LAKHS (2) COIR - ON SHOP - ` 26.00 LAKHS (3) M/S SREE KRISHNA SWEET HOUSE - ` 42.00 LAKHS ` 84.00 LAKHS DO YOU CONFIRM THE ABOVE FACTS ONCE AGAIN NOW? ANS: WE ONCE AGAIN CONFIRM THE SALE CONSIDERATION OF ` 10.00 LAKHS PER CENT IN RESPECT OF SALE OF 30.88 CENTS TO SHR I T. SHANTAKUMAR. THEREBY A TOTAL SALE CONSIDERATION FO R THE EXTENT OF 30.88 CENTS WAS PAYABLE BY SHRI T. SHANTAKUMAR WHICH WAS WORKED OUT AS 3,08,80,000/-. OUT OF THIS, THE TRANSACTION WAS REGISTERED FOR ` 2,16,21,600/-. AND THIS WAS RECEIVED BY ME BY WAY OF CHEQUES. APART FROM THIS AMOUNT OF ` 2,16,21,600/-, ANOTHER SUM OF ` 42 LAKHS WAS HANDED OVER TO ME FOR SETTLING THE TENANTS VIZ. M/S RANGASAMY CHETTIA R & CO. AND 21 I.T.A. NO. 634/MDS/10 I.T.A. NOS. 752 TO 754/MDS/11 I.T.A. NO. 797/MDS/11 M/S COIR-ON SHOP, POLLACHI. I ALONG WITH A CONFIDE NTE OF SHRI T. SHANTAKUMAR WENT TO THE RESPECTIVE PARTIES AND DISB URSED ` 16.00 LAKHS AND ` 26.00 LAKHS RESPECTIVELY. IN THE LIGHT OF THE ABOVE FACTS, I STOOD MYSELF AS A WITNESS TO THE ABO VE DISBURSEMENTS. HOWEVER, FOR THE BALANCE CONSIDERAT ION OF ` 50,58,400/- {3,08,80,000 (2,16,21,600 + 42,00,000)}, I WAS TOLD BY SHRI T. SHANTAKUMAR THAT HE HAS DISBURSED A SUM OF ` 42,00,000/- TO SHRI B. BABU OF M/S SREE KRISHNA SWEET HOUSE, COIMBATORE AND THE REMAINING SUM OF ` 8,58,400/- WAS SAID TO HAVE BEEN UTILIZED FOR INCIDENTALS IN THE TRANSACTI ON, THE DETAILED ACCOUNTS OF WHICH WERE NOT FURNISHED TO ME BY SHRI T. SHANTAKUMAR. IT IS, HOWEVER, NOT DISPUTED THAT SHRI T. SHANTAKUM AR HAD STATED THAT WHAT WAS RECEIVED BY HIM WAS ONLY ` 2,16,21,600/- AND NOTHING WHATSOEVER WAS PAID BY HIM TO ANY TENANTS. STATEME NT OF SHRI T. SHANTAKUMAR TO THIS EFFECT WAS ALSO RECORDED. WHAT THE ASSESSEE STATED WAS THAT AMOUNT IN EXCESS OF ` 2,16,21,600/- WAS PAID FOR SETTLING THE TENANTS FOR VACATING THE PREMISES. THUS, IF WE TAKE ` 3,08,80,000/- AS MENTIONED BY SHRI J.S. KAMATH AS THE ACTUAL SALE CONSIDERATION PAID BY SHRI T. SHANTAKUMAR, THEN OF COURSE, THE SUM OF ` 92,86,400/- WOULD HAVE TO BE CONSIDERED AS EXPENSES RELATING TO INCUR RED WHOLLY IN CONNECTION WITH THE TRANSFER. IF WE BELIEVE THAT W HAT SHRI T. SHANTAKUMAR SAID WAS TRUE, THEN NOTHING CHANGED HAN DS ON THE SALE OF PROPERTY, BUT ONLY THE SUM OF ` 2,16,21,600/- MENTIONED IN THE REGISTERED DEED. SO, EITHER THE SALE CONSIDERATION HAS TO BE TAKEN AS ` 2,16,21,600/- OR IF IT IS TAKEN AS ` 3,08,80,000/-, THEN THE CLAIM OF PAYMENT MADE FOR VACATING THE PROPERTY WOULD HAVE T O BE ALLOWED. 22 I.T.A. NO. 634/MDS/10 I.T.A. NOS. 752 TO 754/MDS/11 I.T.A. NO. 797/MDS/11 ASSESSEES STATEMENT GIVEN AT THE TIME OF SEARCH CO ULD NOT HAVE BEEN DISBELIEVED IN PART. THUS, IN OUR OPINION, THE CIT (APPEALS) WAS JUSTIFIED IN GIVING DIRECTION THAT SUM OF ` 92 LAKHS HAD TO BE EXCLUDED IF THE GROSS SALE CONSIDERATION WAS TAKEN AS ` 4,11,06,600/-. WE DO NOT FIND ANY REASON TO INTERFERE WITH SUCH DIRECTIONS OF THE CIT (APPEALS). 20. APPEALS OF THE REVENUE IN THE CASE OF SHRI R. P RABHASANKAR, SHRI SURESH KAMATH AND SHRI R. JAGANNATHAN STAND DISMISS ED. 21. NOW WE ARE LEFT WITH A CROSS APPEAL BY ONE OF T HE ASSESSEES, NAMELY, SHRI R. PRABHASANKAR, WHO IS REPRESENTED BY HIS LEGAL HEIR MRS. P. MANJU, FOR ASSESSMENT YEAR 2003-04. 22. GRIEVANCE OF THE ASSESSEE RAISED VIDE GROUND NO S.2 TO 6 IS THAT PROCEEDINGS OUGHT HAVE BEEN INITIATED UNDER SECTION 158BD OF THE ACT AND RE-ASSESSMENT DONE UNDER SECTION 147 READ WITH SECTION 143(3) OF THE ACT FOR IMPUGNED ASSESSMENT YEAR WAS NOT VALID. WE DO NOT FIND ANY MERITS ON THIS ISSUE SINCE THE CONCERNED ASSESS EE HAD NOT FILED ANY RETURN FOR THE CONCERNED IMPUGNED ASSESSMENT YEAR U NDER SECTION 139 OF THE ACT, BUT, HAD FILED A RETURN IN PURSUANCE OF NOTICE UNDER SECTION 148 ISSUED ON 4.7.2007. THERE BEING NO ORIGINAL AS SESSMENT, AND NO RETURN FILED BY THE ASSESSEE, IN OUR OPINION, ASSES SING OFFICER WAS JUSTIFIED IN PROCEEDING UNDER SECTION 147 OF THE AC T, HAVING FOUND THAT 23 I.T.A. NO. 634/MDS/10 I.T.A. NOS. 752 TO 754/MDS/11 I.T.A. NO. 797/MDS/11 ASSESSEE HAD NOT RETURNED THE LONG TERM CAPITAL GAI NS ARISING OUT OF SALE OF LAND IN RESPECT OF HIS FATHER SHRI J.R. KAMATH. 23. AS FOR THE CLAIM OF THE ASSESSEE THAT PROCEEDIN GS OUGHT HAVE BEEN INITIATED ONLY UNDER SECTION 158BD OF THE ACT, WE H AVE ALREADY HELD AT PARAS 12 AND 13 ABOVE IN THE APPEAL OF SHRI J.S. K AMATH THAT ASSESSING OFFICER WAS JUSTIFIED IN CONSIDERING THE LONG TERM CAPITAL GAINS IN REGULAR ASSESSMENT. ESPECIALLY SO, SINCE WHAT WAS CONSIDER ED WAS ONLY THE VALUE AS PER THE REGISTERED SALE DEED FOR THE COMPU TATION OF CAPITAL GAINS. SUM OF ` 92,66,400/- WAS EXCLUDED WHILE COMPUTING THE CAPIT AL GAINS. HERE ALSO, THE SALE CONSIDERATION WOULD BE NOTHING BUT WHAT WAS DISCLOSED IN THE REGISTERED SALE DEED TO SHRI T. SH ANTAKUMAR AND ASSESSING OFFICER WAS NOT DEPRIVED OF HIS POWER TO CONSIDER SUCH SUM IN THE RE-ASSESSMENT PROCEEDING. THEREFORE, GROUND NO S.2 TO 6 OF THE ASSESSEE STAND DISMISSED. 24. GROUND NOS.7 AND 8 ARE NOT PRESSED BY THE ASSES SEE. 25. VIDE ITS GROUND NOS.9 AND 10, GRIEVANCE OF THE ASSESSEE IS THAT CLAIM OF LIABILITIES PAID TO M/S MUNICIPAL SOWBHAGY A NIDHI LIMITED AND M/S LORD KRISHNA BANK LTD., WAS NOT ALLOWED. 26. NOTHING WAS BROUGHT BEFORE US TO SHOW THAT THES E WERE PRE- EXISTING CHARGES ON THE PROPERTY TRANSFERRED. ASSE SSEE HAS BEEN UNABLE 24 I.T.A. NO. 634/MDS/10 I.T.A. NOS. 752 TO 754/MDS/11 I.T.A. NO. 797/MDS/11 TO SHOW THAT THE LIABILITIES TO THESE ENTITIES WERE IN ANY WAS CONNECTED TO THE PROPERTY SOLD BY SHRI J.R. KAMATH. THEREFORE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF CIT(APPEALS) IN THIS REGARD. 27. GROUND NOS.9 AND 10 STAND DISMISSED. 28. OTHER GROUNDS RAISED BY THE ASSESSEE ARE GENERA L NEEDING NO ADJUDICATION. 29. APPEAL OF THE ASSESSEE IS DISMISSED. 30. TO SUMMARISE THE RESULT, ALL THE REVENUES APPE ALS AS WELL AS ASSESSEES APPEALS ARE DISMISSED. THE ORDER WAS PRONOUNCED IN THE COURT ON WEDNESDAY, THE 8 TH OF AUGUST, 2012, AT CHENNAI. SD/- SD/- (VIKAS AWASTHY) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 8 TH AUGUST, 2012. KRI. COPY TO: (1) ASSESSEES (2) ASSESSING OFFICER (3) CIT(A)-II, COIMBATORE (4) CIT, CENTRAL-III, CHENNAI (5) D.R. (6) GUARD FILE