ITO 15(3)(3), MUMBAI V. IQBAL GULAM HUSSAIN QURESHI, MUMBAI

ITA 7750/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 84631 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: I
• Next Hearing Date: 03-12-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 28-12-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SACCHIDANAND DUBEY
• Assessee Lawyers: B G SAKARIA
• Keywords: Sale consideration of property below Jantri Value; Principle of natural justice; Cost of acquisition
• Section: 50C; 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL I BENCH, MUMBAI , , BEFORE SHRI SANJAY ARORA, AM AND SHRI VIVEK VARMA, JM ./ I.T.A. NO. 7750/MUM/2012 ( / ASSESSMENT YEAR: 2009 - 10 ) INCOME - TAX OFFICER - 15(3)(3), MATRU MANDIR, ROOM NO. 117, OPP. GRANT ROAD (W), MUMBAI - 400 007 / VS. IQBAL GULAM HUSSAIN QURESHI B/302, KARISHMA APARTMENTS, AGARWAL ESTATE, JOGESHWARI (W), MUMBAI - 400 102 ./ ./ PAN/GIR NO. AADPQ 1533 B ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI SACCHIDANAND DUBEY / RESPONDENT BY : SHRI B. G. SAKARIA / DATE OF HEARING : 03.12.2014 / DATE OF PRONOUNCEMENT : 23 .12.2014 / O R D E R PER SANJAY ARORA, A. M.: THIS IS AN A PPEAL BY THE REVENU E DIRECTED AGAINST THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 26 , MUMB AI (CIT(A) FOR SHORT) DATED 03.10.2012 , PARTLY ALLOWING THE ASSESSEES APPEAL CONTESTING ITS ASSESSMENT U/S.143(3) OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) FOR THE ASSESSMENT YEAR (A.Y.) 2009 - 10 VIDE ORDER DATED 30.12.2011. 2 ITA NO. 7750/MUM/2012 (A.Y. 2009 - 10) ITO VS. IQBAL GULAM HUSSAIN QURESHI 2. THE ONLY ISSUE ARISING IN THIS APPEAL IS THE MAINTAINABILITY OR OTHERWISE IN LAW OF THE ADDITION IN THE SUM OF RS.35,14,230/ - MADE BY THE ASSESSING OFFICER (A.O.) ON ACCOUNT OF ALLEGED INVESTMENT IN A RESIDENTIAL FLAT PURCHASED BY THE ASSESSEE, SINCE DELETED BY THE LD. CIT(A), SO THAT THE REVENUE IS IN APPEAL. 3. IT WOULD BE RELEVANT TO BRIEFLY RECOUNT THE FACTS OF THE CASE. THE ASSESSEE PURC HASED A F LAT ( B EARING N O. 301, WING B, KARISHMA APARTMENT S , JOGESHWARI (W), MUMBAI) DURING 1999, PAYING A SUM OF RS.4 LACS IN THE YEAR OF ALLOTMENT ITSELF. THE SALE AGREEMENT IN ITS RESPECT, AS WELL AS ITS REGISTRATION, HOWEVER, WAS IN THE YEAR 2008; THE RELEVANT DATES BEING 11.02.2008 AND 03.05.2008 RESPECTIVELY. THE AGREEMENT BEING REGISTERED DURING FINANCIAL YEAR (F.Y.) 2008 - 09, T HE ASSESSEES CASE WAS SELECTED FOR SCRUTINY UNDER THE VERIFICATION PROCEEDINGS UNDER THE ACT. THE ASSESSEE EXPLAINED TO HAVE PAID THE ENTIRE PURCHASE CONSIDERATION IN THE YEAR 1999, OCCUPYING THE F LAT SINCE THE YEAR 2000, PRODUCING A LETTER OF POSSESSION DATED 15.07.2000. THE SAME WAS DOUBTED BY THE A.O. IN - AS - MUCH AS THE OCCUPANCY CERTIFICATE OF THE SAID BUILDING BY THE MUNICIPAL CORPORATION WAS ONLY ON 23.06.2003. T HE ASSESSEE ALSO COULD NOT EXHIBIT THE PAYMENT OF PURCHASE PRICE IN THE YEAR 1999, NOR ADD UCE ANY MATERIAL IN SUPPORT THEREOF, AS IN THE FORM OF CONFIRMATION OF PAYMENT OR RECEIPT FROM THE SELLER, M/S. BOMBAY STONE QUARRIES, BUILDER S AND DEVELOPER S , GOREGAON (W), MUMBAI. THE B ANK ACCOUNT DISCLOSED BY THE ASSESSEE, I.E. , WITH DENA BANK, WAS ALSO OPENED ONLY ON 31.12.2002, FURNISHING HIS BORIVALI (W), MUMBAI ADDRESS, SO THAT THE ASSESSEE AT THE RELEVANT T IME ONLY RESIDE D THEREAT, I.E., HAD NOT SHIFTED HIS RESIDENCE TO JOGESWARI, AS CONTENDED. THE AO, THEREFORE, FINDING THE ASSESSEES EXPLANATION A S UNSATISFACTORY, CONSIDERED THE YEAR OF REGISTRATION OF AGREEMENT, I.E. , F.Y. 2008 - 09, AS THE YEAR OF PAYMENT. THE MARKET VALUE OF THE PROPERTY, AS DETERMINED BY THE STAMP VALUATION AUTHORITIES FOR THE RELEVANT YEAR WAS AT RS. 33.43 LAKHS. INCLUDING THERE TO THE STAMP DUTY (RS. 1,49,3 5 0 / - ) AND R EGISTRATION CHARGES (RS. 30,880 / - ), HE MADE THE ADDITION IN A SUM OF RS. 35,14,230/ - . IN APPEAL, THE ASSESSEE FURNISHED DETAILS OF PAYMENT MADE, I.E. , AT TOTAL RS. 7 LAKHS , BEING AT RS. 4 LAKHS AND 3 LAKHS TOWARD PUR CHASE OF F LAT B/301 AND FLAT B/302 RESPECTIVELY IN THE SAID BUILDING IN 3 ITA NO. 7750/MUM/2012 (A.Y. 2009 - 10) ITO VS. IQBAL GULAM HUSSAIN QURESHI THE NAME OF THE ASSESSEE AND HIS WIFE, WHICH WAS DURING THE PERIOD FROM 5.11.1999 TO 31.1.2001, I.E. , DURING THE PREVIOUS YEAR S RELEVANT TO THE A.YS. 2000 - 01 & 2001 - 02. THE POSSESSION OF FLAT WAS GIVEN DURING THE YEAR 2000, AS CONFIRMED BY THE HOUSING S OCIETY, SO THAT THERE WAS NOTHING TO IMPUGN THE POSSESSION LETTER DATED 15.7.2000 PURSUANT TO LETTER OF ALLOTMENT DATED 6.12.1999. MERELY BECAUSE THE REGISTRATION OF AGREEMENT AND, THUS, THE PROPERTY , HAD BEEN DELAYED BY ABOUT EIGHT YEARS, WOULD NOT IMPLY THAT THE PURCHASE HAD NOT OCCURRED, OR OTHERWISE ENTITLE THE REVENUE TO SUBSTITUTE THE PURCHASE COST. THE AO HAD, IN EFFECT, APPLIED PROVISION OF SECTION 50C , WHICH IS INAPPLICABLE TO A TRANSACTION OF PURCHASE. THERE WAS ALSO NOTHING TO SHOW THAT THE ASSESSEE HAD PAID OR THE BUILD ER HAD RECEIVED ANY AMOUNT BEYOND RS. 4 LAKHS. THE A DDITION , A S MADE, WAS ACCORDINGLY DELETED. AGGRIEVED, THE REVENUE IS IN APPEAL. 4. WE HAVE HEARD THE PARTIES , AND PERUSED THE MATERIAL ON RECORD. WE DO OBSERVE SOME INCONSISTENCIES IN THE ASSESSEES CASE. HOW COULD, FOR INSTANCE, THE POSSESSION BE GIVEN IN THE YEAR 2000, WHEN THE OCCUPANCY CERTIFICATE BY THE MUNICIPAL AUTHORITY, CERTIFYING T HE BUILDING AS HABIT ABLE, W AS GIVEN ONLY IN THE YEAR 2003. IN FACT, POSSESSION OF THE PROPERTY IS ACCOMPANIED BY SEVERAL IN CIDENTS, VIZ. PAYMENT OF SOCIETY MAINTENANCE CHARGES, ELECTRICITY, TELEPHONE, POSTAL / COMMUNICATION ADDRESS, RESIDENCE PROOF TO VARIOUS AUTHORITIES/INSTIT UTIONS, ETC., SO THAT IT IS SURPRISING THAT THE ASSESSEE DID NOT ADDUCE THE SAME , EVEN AS STATED BY THE A . O. AGAIN, IT IS SURPRISING THAT ONE WOULD WAIT FOR NEARLY EIGHT YEARS FOR TRANSFER OF TITLE. THE PARTIES GENERALLY , TO ENSURE PERFORMANCE , RETAIN A PA RT OF THE CONSIDERATION PENDING THE COMPLETION OF ANY PART OF THE CONTRACT, WHICH MAY INCLUDE AN AS P EC T OR PA R T OF CONSTRUCTION WORK, OR EVEN EXECUTION OF AGREEMENT AND ITS REGISTRATION, ONLY UPON WHICH THERE IS TRANSFER OF TITLE. HOWEVER, THAT WOULD NOT B Y ITSELF IMPLY THAT PURCHASE HAD NOT OCCURRED EARLIER, AND THAT IT HAD OCCURRED ONLY ALONG WITH , I.E. , THE SAID TRANSFER, ABOUT 8 YEARS LATER. FURTHER , THERE IS NOTHING TO SHOW THAT THE PURCHASE COST EXCEEDED THE STATED CONSIDERATION OF RS. 4 LAKHS, OR THA T ANY PART THEREOF, WHATEVER BE ITS VALUE, WAS PAID DURING THE RELEVANT YEAR, OR THAT IT (THE SAID YEAR) WITNESSED ANYTHING APART FROM THE EXECUTION OF THE AGREEMENT AND ITS REGISTRATION. 4 ITA NO. 7750/MUM/2012 (A.Y. 2009 - 10) ITO VS. IQBAL GULAM HUSSAIN QURESHI DEFERRING THE DATE OF POSSESSION TO THE YEAR 2003, I.E., AFTER THE D ATE OF OCCUPANCY CERTIFICATE, WOULD NOT ALSO ADVANCE THE REVENUES CASE, WHICH, AS MADE OUT, IS WITHOUT ANY C REDIBLE EVIDENCE OR LEGAL BASIS. SO , HOWEVER, WE OBSERVE THAT THE REVENUE HAS PER ITS G ROUND NO. 2, REFERRED TO A STATEMENT BY THE BUILDER DATED 26 .12.2011, CHARGING THE FIRST APPELLATE AUTHORITY TO HAVE PROCEEDED BY IGNORING THE FACT S BROUGHT OUT THEREBY. THE SAME , WHICH MAY WELL BE RELEVANT , IS NEITHER ON RECORD NOR DO WE FIND ANY REFERENCE THERETO IN THE ASSESSMENT ORDER ITSELF . IN FACT, WE FIND T HE ASSESSEE TO HAVE PER THE STATEMENT OF FACTS BEFORE THE SAID AUTHORITY SPECIFICALLY CONTENDED THAT NO ADVERSE VIEW COULD BE DRAWN ON THE BASIS OF STATEMENT U/S. 131 BY THE PROMOTER, BOMBAY STONE QUARRIES, COPY OF WHICH HAD ALSO NOT BEEN SUPPLIED TO H I M , I.E. , WITHOUT AFFORDING AN OPPORTUNITY FOR CROSS EXAMINATION. THERE IS NO REFERENCE TO THIS STATEMENT IN THE IMPUGNED ORDER , EVEN AS THE A.O.S RELIANCE THEREON IS ADMITTED . IT IS UNFORTUNATE THAT THE PARTIES DID NOT BRING THE SAME TO OUR NOTICE DURING THE HEARING. THE T RIBUNAL IN DECID ING AN ISSUE BEFORE IT, IS TO ANSWER ALL THE GROUNDS RAISED, TAKING INTO ACCOUNT ALL THE RELEVANT FACTS. IN FACT, WE OBSERVE THIS TO BE AN ASPECT OF THE ISSUE ARISING FOR ADJUDICATION, THOUGH ASSUMED IN THE FORM OF A GROUN D. THE MATTER WOULD THEREFORE WARRANT BEING RESTORED BACK TO THE FILE OF THE LD. CIT(A) FOR CONSIDERING THE IMPORT, IF ANY, OF THE SAID STATEMENT BY THE DEVELOPER, OBSERVING THE PRINCIPLES OF NATURAL JUSTICE, SO THAT BOTH THE PARTIES BEFORE HIM ARE ALLOWED ADEQUATE OPPORTUNITY, AND OF COURSE THE MATERIALS BEING RELIED UPON BY THE OTHER SIDE, TO STATE THEIR CASE (REFER: KAPURCHAND SHRIMAL V. CIT [1981] 131 ITR 451 (SC) ) . HE MAY, WHERE DEEMED FIT AND PROPER, ALSO ALLOW THE ASSESSING AUTHORITY AN OPPORTUNITY TO MEET AND REBUT THE ASSESSEES CASE IN THE MATTER. THE ADDITION OF INCOME QUA PURCHASE COST SHALL BE DECIDED AFRESH IN ACCORDANCE WITH LAW, ISSUING DEFINITE FINDINGS OF FACT. WE DECIDE ACCORDINGLY. THE F OR E GOING, HOWEVER, WOULD OPERATE TO DECIDE ON TH E ADDITION QUA THE PAYMENT , IF ANY, OF THE PURCHASE COST , DEEMED AT RS. 33.34 LAKHS, OR A PART THEREOF. THE BALANCE ADDITION MADE, I.E. , RS. 1,80,230/ - , IS FOR PAYMENT OF STAMP DUTY AND REGISTRATION CHARGES, WHICH STANDS ADMITTEDLY PAID ONLY DURING THE CUR RENT YEAR. WE FIND NO BASIS FOR ITS DELETION BY CIT(A), WHOSE ORDER DOES NOT BEAR ANY FINDING IN RESPECT THEREOF. EVEN THE 5 ITA NO. 7750/MUM/2012 (A.Y. 2009 - 10) ITO VS. IQBAL GULAM HUSSAIN QURESHI ASSESSEES SUBMISSION S , REPRODUCED IN THE IMPUGNED ORDER, ARE SILENT ON THIS ASPECT. UNDER THE CIRCUMSTANCES, WE ONLY FIND FIT AND PR OPER TO , LIKEWISE , RESTORE THE MATTER QUA THE DELETION OF RS. 1,80,230/ - , TOWARDS PAYMENT OF STAMP DUTY AND REGISTRATION CHARGES DURING THE RELEVANT YEAR, BACK TO THE FILE OF THE FIRST APPELLATE AUTHORITY FOR ADJUDICATION IN ACCORDANCE WITH LAW PER A SPEAK ING ORDER, AND A F TER ALLOWING BOTH THE PARTIES AN OPPORTUNITY TO STATE THEIR CASE BEFORE HIM. WE DECIDE ACCORDINGLY 5. IN THE RESULT, THE REVENUES APPEAL IS DISPOSED OF ON THE ABOVE TERMS. ORDER PRONOUNCED IN THE OPEN COURT ON DECEM BER 23 , 201 4 SD/ - SD/ - ( VIVEK VARMA ) (S ANJAY ARORA) / J UDICIAL MEMBER / A CCOUNTANT MEMBER MUMBAI ; DATED : 23. 1 2 .201 4 . . ./ ROSHANI , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RE SPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F ILE / BY O RDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI