HEMENT SRIVASTAVA, Jaipur V. ITO, Jaipur

ITA 774/JPR/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4925 (ITAT-JAIPUR)
• Duration Of Justice: 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 25-08-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: POONAM RAI D DHK
• Keywords: Sale consideration of property below Jantri Value
• Section: 50C

Judgement Text

- VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH HKKXPUN] YS[KK LNL; DS LE{K BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 774/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2010-11 SHRI HEMANT SRIVASTAVA 4-KA-9, JAWAHAR NAGAR JAIPUR CUKE VS. THE ITO WARD 6(1) JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: ARBPS 9297 D VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: SHRI ROHAN SOGANI & SHRI RAJEEV SOGANI CA JKTLO DH VKSJ LS@ REVENUE BY: SMT. POONAM RAI, DCIT-DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 18/11/2016 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 23 /11/2016 VKNS'K@ ORDER PER BHAGCHAND, AM THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDE R OF THE LD. CIT(A)-2 , JAIPUR DATED 25-06-2016 FOR THE ASSESS MENT YEAR 2010-11 RAISING THEREIN FOLLOWING GROUNDS OF APPEAL. 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTI ON OF THE AO IN HOLDING THE PURCHASES FROM THE FOLLOWING PARTIES AS BOGUS. ITA NO. 774/JP/2016 SHRI HEMANT SRIVASTAVA VS. ITO,WARD- 6(1), JAIPUR 2 S.N. NAME AMOUNT IN(RS.) 1. M/S. GANESHAM TRADERS 1,58,755 2. M/S. V.S. EXPORTS 1,54,208 3. M/S. BLUE WORLD 1,47,864 4. M/S. RUBY EXPORT 1,41,683 TOTAL 6,02,510 THE ACTION OF THE LD. CIT(A) IS ILLEGAL, UNJUSTIFIE D, ARBITRARY AND AGAINST THE FACTS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY HOLDING THE ABOVE PURCHASES AS GENUINE. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, T HE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF AO IN REJECTING THE BOOKS OF ACCOUNT OF THE ASSESSEE BY INVOKING THE PR OVISIONS OF SECTION 145(3) AND THEREAFTER CONFIRMING THE TRADIN G ADDITION OF RS. 90,377/- OUT OF RS. 1,50,627/- MADE BY THE AO. THE ACTION OF THE LD. CIT(A) IS ILLEGAL, UNJUSTIFIED, ARBITRARY AND A GAINST THE FACTS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY QUASHING THE REJECTION OF BOOKS AND DELETING THE TRADING ADDITION OF RS. 90,3 77/-. 3(A) IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTI ON OF THE AO IN APPLYING THE PROVISION OF SECTION 50C OF THE I.T. A CT, 1961 AND ADOPTING THE SALE CONSIDERATION AT RS. 7,85,394/- A GAINST THE ACTUAL SALE CONSIDERATION OF RS. 4,50,000/- FOR THE PURPOS E OF COMPUTING THE LONG TERM CAPITAL GAIN. THE ACTION OF THE LD. C IT(A) IS ILLEGAL, UNJUSTIFIED, ARBITRARY AND AGAINST THE FACTS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY ACCEPTING THE SALE CONSIDERATI ON OF RS. 4,50,000/- FOR THE PURPOSE OF COMPUTING THE LONG TE RM CAPITAL GAIN. 3(B) IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTI ON OF THE AO IN NOT REFERRING THE MATER FOR VALUATION AS REQUESTED BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS. THE ACTION OF TH E LD. CIT(A) IS ITA NO. 774/JP/2016 SHRI HEMANT SRIVASTAVA VS. ITO,WARD- 6(1), JAIPUR 3 ILLEGAL, UNJUSTIFIED, ARBITRARY AND AGAINST THE FAC TS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY REFERRING THE MATTER TO TH E VALUATION OFFICER. 4. IN THE FACTS AND CIRCUMSTANCES OF THE ASSESSEE AND IN LAW THE LD. CIT(A) HAS ERRED IN CONFIRMING T HE ACTION OF THE AO IN NOT ALLOWING THE LONG TERM CAPITAL LOSS OF RS . 10,300/- ON SALE OF PROPERTY AS CLAIMED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE ACTION OF THE LD. CIT(A ) IS ILLEGAL, UNJUSTIFIED, ARBITRARY AND AGAINST THE FACTS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY ALLOWING THE LONG TERM CAPITAL LOSS OF RS. 10,300/-. 2.1 APROPOS GROUND NO. 1 AND 2 OF THE ASSESSEE, IT IS NOTED FROM THE ASSESSMENT ORDER THAT THE ASSESSEE HAD CLAIMED PURC HASES OF RS. 6,02,510/- AND THE PURCHASED MADE BY THE ASSESS EE FROM THESE PARTIES ARE UNVERIFIABLE PURCHASES AS OBSERVED BY THE AO. THE BOOKS OF ACCOUNT OF THE ASSESSEE U/S 145(3) OF THE ACT WERE REJECTED BY THE AO FOR WANT OF INCOMPLETE DETAILS. S.N. NAME AMOUNT IN(RS.) 1. M/S. GANESHAM TRADERS 1,58,755 2. M/S. V.S. EXPORTS 1,54,208 3. M/S. BLUE WORLD 1,47,864 4. M/S. RUBY EXPORT 1,41,683 TOTAL 6,02,510 SINCE AS PER OBSERVATION OF THE AO FROM THE BOOKS O F ACCOUNT OF THE ASSESSEE THAT THE PURCHASES MADE BY THE ASSESSEE FR OM THESE PARTIES ARE ITA NO. 774/JP/2016 SHRI HEMANT SRIVASTAVA VS. ITO,WARD- 6(1), JAIPUR 4 UNVERIFIABLE PURCHASES, THEREFORE, THE AO TAKING IN TO CONSIDERATION THE DECISION OF HON'BLE GUJARAT HIGH COURT IN THE CASE OF SANJAY OIL CAKE INDUSTRIES VS. CIT (2008) 10 DTR 153 DISALLOWED THE CLAIM OF THE ASSESSEE BY 25% OF THE TOTAL PURCHASES OF RS. 6,02 ,510/- WHICH RESULTED INTO AN ADDITION OF RS.1,50,627/-. 2.2 IN FIRST APPEAL, THE LD. CIT(A) HAS RESTRICTED THE ADDITION TO THE EXTENT OF 15% ON THE TOTAL UNVERIFIABLE PURCHASES OF RS. 6,02,510/- MADE BY THE ASSESSEE WHICH RESULTED INTO AN ADDITION OF RS. 90,377/-. 2.3 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS NOTED THAT THE ISSUE IN QUESTION IS COVERED BY THE DECISION OF THE COORDINATE BENCH DATED 22-10-2014 I N THE CASE OF SHRI ANUJ KUMAR VARSHNEY VS. ITO AND ANOTHER IN ITA NO. 187/JP/2012 WHEREIN THE COORDINATE BENCH HAS CONFIRMED THE NET PROFIT RATE AT 15% ON UNVERIFIABLE PURCHASES. SINCE THE LD. CIT(A) HAS RE STRICTED THE ADDITION TO THE EXTENT OF 15% ON UNVERIFIABLE PURCHASES OF THE ASSESSEE, THEREFORE, I FIND NO REASON TO INTERFERE WITH THE ORDER OF THE L D. CIT(A) WHICH IS SUSTAINED. THUS GROUND NO. 1 AND 2 OF THE ASSESSEE ARE DISMISSED. 3.1 APROPOS GROUND NO. 3 (A) (B) AND 4 OF THE ASSES SEE, THE BRIEF FACTS AS EMERGES FROM THE LD. CIT(A)S ORDER IS REPRODUCE D AS UNDER:- ITA NO. 774/JP/2016 SHRI HEMANT SRIVASTAVA VS. ITO,WARD- 6(1), JAIPUR 5 3.3 I HAVE PERUSED THE FACTS OF THE CASE, THE ASSESSMENT ORDER AND THE SUBMISSIONS OF THE APPELLA NT. DURING THE YEAR, THE ASSESSEE HAS SOLD AN IMMOVABLE PROPERTY FOR A SALE CONSIDERATION OF RS. 4,50,000/- WHICH WAS VALUED BY THE SUB-REGISTRAR AT A VALUE OF RS. 7,85, 934/-. AS NOTED IN THE ASSESSMENT ORDER, THE ASSESSEE HAD NOT SHOWN THIS TRANSACTION OF IMMOVABLE PROPERTY IN THE RETUR NED FILED AND WHEN SPECIFICALLY ASKED ABOUT THE SAME HAD STAT ED THAT IT HAD INADVERTENTLY NOT CLAIMED LONG TERM CAPITAL LOS S OF RS. 10,300/-. THE ASSESSING OFFICER APPLYING THE VALUE AS PER STAMP DUTY VALUATION AND PROVISIONS OF SECTION 50C, CALCULATED LONG TERM CAPITAL GAIN AT RS. 3,25,634/- . AT THIS STATE, THE ASSESSEE HAD TAKEN A PLEA THAT THE STAMP VALUE IS ERRONEOUS AND EXCEEDS THE MARKET VALUE AND HENCE TH E SAME MAY BE REFERRED TO THE VALUATION OFFICER. THE ASSES SING OFFICER REJECTED THIS PLEA OF THE ASSESSEE AS THE S AME HAD BEEN MADE AT THE FAG END OF THE FINANCIAL YEAR AND THAT TOO BECAUSE OF THE DELAY BY THE ASSESSEE. I HAVE PERUSE D THE LETTER FILED BY THE ASSESSEE AND NO REASONS AS TO WHY THE MARKET VALUE WOULD BE LESS HAS BEEN PUT FORTH. FURTHER, IT IS SEEN THAT THE ASSESSEE HAD NOT DISCLOSED THIS TRANSACTION IN HIS RETURN AND THE SAME HAS BEEN ADDED BY THE ASSESSING OFFICE R BASED ON INFORMATION AVAILABLE WITH HIM. IN VIEW OF THE A BOVE DISCUSSION, THE PROVISIONS OF SECTION 50C HAD BEEN CORRECTLY APPLIED BY THE ASSESSING OFFICER. GROUND OF APPEAL OF THE ASSESSEE IS DISMISSED. ITA NO. 774/JP/2016 SHRI HEMANT SRIVASTAVA VS. ITO,WARD- 6(1), JAIPUR 6 3.2 DURING THE COURSE OF HEARING, THE IMPETUS OF TH E ASSESSEE ON THE ISSUE IN QUESTION WAS THAT THE AO HAD NOT REFERRED THE MATTER TO THE VALUATION OFFICER FOR VALUATION OF THE PROPERTY SIT UATED AT PLOT NO. 1480, SACHIVALYA NAGAR, VATIKA ROAD, TONK ROAD, WHICH WAS SOLD BY THE ASSESSEE AT RS. 4.50 LACS TO SHRI AANISH DEV. THE S UB-REGISTRAR HAD EVALUATED ITS VALUE AT RS. 7,85,934/-. THE AO THUS INVOKED THE PROVISIONS OF SECTION 50C BY ADOPTING THE SALE CONSIDERATION A T RS. 7,85,394/- AGAINST THE ACTUAL SALE CONSIDERATION OF RS. 4,50,0 00/- FOR THE PURPOSE OF COMPUTING LONG TERM CAPITAL GAIN. THE LD. AR FURTHE R SUBMITTED THAT IN CASE, THE AO HAD REFERRED THE MATTER TO THE VALUATI ON OFFICER ABOUT THIS PROPERTY, THE CORRECT VALUATION OF THE PROPERTY COU LD HAVE BEEN WORKED OUT BY THE VALUATION OFFICER. HENCE, THE ASSESSEE HAS NOT BEEN PROVIDED THIS OPPORTUNITY BY THE AO TO REFER THE MATTER FOR VALUATION OF THE PROPERTY IN QUESTION BEFORE THE VALUATION OFFICER. 3.3 DURING THE COURSE OF HEARING, THE LD. DR RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. 3.4 AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIALS AVAILABLE ON RECORD, IT WILL BE IN THE INTEREST OF JUSTICE TO RESTORE THE ISSUE IN QUESTION TO THE FILE OF THE AO WITH THE DIRECTION T O REFER THE CASE OF ITA NO. 774/JP/2016 SHRI HEMANT SRIVASTAVA VS. ITO,WARD- 6(1), JAIPUR 7 ASSESSEE FOR VALUATION OF THE PROPERTY IN QUESTION BEFORE THE VALUATION OFFICER SO THAT ACTUAL VALUATION OF THE PROPERTY CO ULD HAVE BEEN WORKED OUT BY THE VALUATION OFFICER. HENCE, THE GROUND NO. 3 AND 4 OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 4.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 23 /11/ 2016. SD/- HKKXPUN ( BHAGCHAND) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 23 /11/ 2016 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI HEMANT SRIVASTAVA, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE ITO, 6(1), JAIPUR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 774/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ @ ASSISTANT. REGISTRAR