Deputy Commissioner Of Income Tax, Central Circle, Kota V. Shri Hari Om Bhatia, Kota

ITA 787/JPR/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 7639 (ITAT-JAIPUR)
• Duration Of Justice: 10 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 05-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BK GUPTA
• Assessee Lawyers: P C PARWAL CA DHK
• Keywords: Sale consideration of property below Jantri Value; Document seized; Fair market value; Documents seized
• Section: 50C

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKWO] U;KF;D LNL; ,OA JH FOE FLAG ;K NO ] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM AND SHRI VIKRAM SING H YADAV, AM VK;DJ VIHY LA-@ ITA NO. 787/JP/2018 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2014-15. THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE, KOTA. CUKE VS. SHRI HARI OM BHATIA, 49-A, NEW COLONY, GUMANPURA, KOTA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. ANAPB 6218 Q VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI B.K. GUPTA (CIT-DR) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL (CA) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 09.04.2019. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 25/04/2019. VKNS'K@ ORDER PER VIJAY PAL RAO, JM : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 26.03.2018 OF LD. CIT (A) FOR THE ASSESSMENT YEAR 2014-15. THE R EVENUE HAS RAISED THE FOLLOWING GROUNDS :- 1) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE THE CIT (A) WAS JUSTIFIED IN DELETING THE ADDITION OF RS. 66,40 ,200/- MADE BY THE AO U/S 2(24)(IV) OF THE IT ACT. 2) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND LAW, THE CIT (A) WAS JUSTIFIED IN OBSERVING THAT THE PRICE DETER MINED BY THE SUB REGISTRAR REPRESENTS FAIR MARKET VALUE OF THE PROPE RTY DESPITE THE FACT THAT UNDISPUTABLE EVIDENCES INDICATING SALE OF PROP ERTY BY M/S. BHATIA COLONIZERS P. LTD AT A VALUE SUBSTANTIALLY HIGHER F ROM THE REGISTERED VALUE WERE FOUND DURING THE COURSE OF SEARCH. THE APPLICANT CRAVE, LEAVE OR RESERVING THE RIGHT T O AMEND, MODIFY, ALTER ADD OR FOREGO ANY GROUND(S) OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. 2 ITA NO. 787/JP/2018 SHRI HARI OM BHATIA, KOTA. GROUND NOS. 1 & 2 RAISED BY THE REVENUE ARE REGARDI NG ADDITION MADE UNDER SECTION 2(24)(IV) OF THE IT ACT. 2. WE HAVE HEARD THE LD. D/R AS WELL AS THE LD. A/R AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. THE AO HAS MADE THE ADDITION B Y APPLYING THE PROPORTION OF ON MONEY/UNACCOUNTED CONSIDERATION BASED ON THE SEIZED MATERIAL WE HAVE CONSIDERED AN IDENTICAL ISSUE IN THE CASE OF SMT. R EEMA HARISH BHATIA FOR THE ASSESSMENT YEAR 2014-15 IN THE APPEAL OF THE REVENU E IN ITA NO. 789/JP/2018 IN PARA 24 OF EVEN DATE ORDER AS UNDER :- 24. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WE LL AS THE RELEVANT MATERIAL ON RECORD. WE NOTE THAT THE AO H AS TAKEN THE UNRECORDED CONSIDERATION FOUND IN THE SEIZED MATERI AL IN RESPECT OF PLOT NO. D-12, E-13 AND E-16 AND THEN WORKED OUT THE PROPORTION/RATIO OF RECORDED CONSIDERATION IN THE B OOKS OF M/S. BHATIA COLONIZERS PVT. LTD AND THE VALUE RECORDED I N THE SEIZED DOCUMENT. THEREFORE, THE AO ARRIVED AT UNRECORDED CONSIDERATION IN RESPECT OF THE PLOT NOS. D-12, E-1 3 AND E-16 AT 94.86% OF THE RECORDED CONSIDERATION. THIS RATIO WA S APPLIED BY THE AO IN THE CASE OF THE ASSESSEE FOR CONSIDERING THE FMV OF THE PROPERTY. HOWEVER, APPLYING THE RATIO WITHOUT CONSIDERING THE CONSIDERATION IN TERMS OF THE RATES IS HIGHLY A RBITRARY AND WITHOUT APPLICATION OF MIND. THE ASSESSEE HAS PURC HASED THE VILLA MEASURING 2400 SQ. FT AND CONSTRUCTED AREA 48 75 SQ. FT FOR A CONSIDERATION OF RS. 90 LACS. THE COST OF CONSTR UCTION WAS ESTIMATED BY THE LD. CIT (A) AT RS. 900/- PER SQ. F T. AND AFTER REDUCING THE COST OF CONSTRUCTION FROM THE TOTAL PU RCHASE CONSIDERATION, THE SALE PRICE OF PLOT OF LAND COMES TO RS. 46,12,500/-. THUS THE AVERAGE RATE CONSIDERED PER S Q. FT COMES TO RS. 1922/- AT WHICH THE ASSESSEE HAS PURCHASED T HE PLOT OF 3 ITA NO. 787/JP/2018 SHRI HARI OM BHATIA, KOTA. LAND IN QUESTION. THE AO HAS APPLIED THE RATE AS PE R THE SEIZED MATERIAL IN RESPECT OF THREE PLOTS OF LAND, THE DET AILS OF WHICH ARE AS UNDER :- PLOT NO. TYPE SIZE IN SQ. FT. VALUE AS PER SEIZED DOCUMENTS VALUE RECORDED IN BOOKS AVERAGE SALE PRICE AS PER SEIZED DOCUMENT. D - 12 PLOT 1000 15,50,000/ - 6,50,000/ - 1550/ - D - 13 PLOT 1800 30,15,000/ - 16,20,000/ - 1675/ - D - 16 PLOT 1800 30,15,000/ - 16,20,000/ - 1675/ - TOTAL 4600 75,80,000/ - 38,90,000/ - 1648/ - THEREFORE, AS PER THE SEIZED DOCUMENTS, THE TOTAL S ALE CONSIDERATION IN TERMS OF PER SQ. FT. RATE FOR THES E THREE PLOTS IS RANGING FROM RS. 1,550/- TO RS. 1,675/- AND THE AVE RAGE OF THESE THREE PLOTS COMES TO RS. 1,648/- PER SQ. FT. IF THE SAID RATE IS COMPARED WITH THE RATE OF THE ASSESSEES PL OT AT RS. 1,922/- THEN THE DECLARED PURCHASE CONSIDERATION OF THE ASSESSEE IS EVEN MORE THAN THE CONSIDERATION FOUND RECORDED IN THE SEIZED MATERIAL. THE AO WITHOUT CONSIDERING TH E FACT OF THE RATE DECLARED IN THE CASE OF THE ASSESSEE HAS APPLI ED THE RATIO OF RECORDED AND UNRECORDED VALUE IN CASE OF SALE OF OT HER PLOTS WHEREIN THE RECORDED CONSIDERATION WAS VERY LESS, I F IT IS TAKEN IN TERMS OF PER SQ. FT. IT IS CLEAR THAT FOR THE P LOT D-12, THE RATE PER SQ. FT. AS RECORDED IS RS. 650/- AND AS PER SEI ZED DOCUMENT IT IS RS. 1550/- WHEREAS IN THE CASE OF ASSESSEE TH E RECORDED CONSIDERATION ITSELF IS RS. 1922/- PER SQ. FT. HEN CE THE RATIO APPLIED BY THE AO WITHOUT CONSIDERING THE RELEVANT FACTS IS NOT JUSTIFIED. THE LD. CIT (APPEALS) HAS CONSIDERED TH IS ISSUE IN PARA 4.3 TO 4.3.5 AS UNDER :- 4.3. I HAVE CONSIDERED THE FACTS OF THE CASE, GON E THROUGH THE ASSESSMENT ORDER AND THE SUBMISSION OF THE APPELLAN T. 4 ITA NO. 787/JP/2018 SHRI HARI OM BHATIA, KOTA. 4.3.1. THE ONLY DISPUTE IN THIS ISSUE IS WHETHER AS SESSEE HAS OBTAINED ANY BENEFIT BY SELLING THE PLOT TO THE ASSESSEE FOR RS. 90,00,000/-. AO MADE THE ADDITION BY APPLYING THE PROVISIONS OF SECTION 2(24)(IV) BY HOLDING THAT ASSESSEE HAS P URCHASED THE VILLA FROM THE COMPANY AT LOWER PRICE THAN THE MARK ET PRICE. 4.3.2. I FIND THAT SECTION 2(24)(IV) IS A DEEMING F ICTION AND THE DEEMING FICTION NEEDS TO BE CONSTRUED STRICTLY. FOR MAKING ADDITION UNDER THIS SECTION THE ASSESSEE MUST HAVE OBTAINED SOME BENEFIT. THE VARIOUS CASES RELIED BY THE AR AL SO SUPPORTS THIS VIEW. 4.3.3. HOWEVER NO SUCH BENEFIT IS ACTUALLY OBTAINED . THE AO IN THE ASSESSMENT ORDER HAS ACCEPTED THAT THERE IS NO EVID ENCE OF ACTUAL RECORD OF ON MONEY AND THEREFORE NO BENEFI T IS ACTUALLY OBTAINED. 4.3.4. I FURTHER FOUND THAT THE SALE OF THE VILLA T O THE ASSESSEE IS AT A PRICE MORE THAN THE PRICE DETERMINED BY THE SUB REG ISTRAR. THIS REPRESENTS FAIR MARKET VALUE AS RECOGNIZED U/S 50C AND 43CA. FURTHER THE ASSESSEE HAS ALSO FILED COMPARATIVE CAS E OF VILLA SOLD TO OTHER PARTIES AT A PRICE LOWER THAN TO THE ASSES SEE WHICH PROVES THAT NO EXTRA BENEFIT IS GIVEN TO THE ASSESS EE. 4.3.5. THE AO FOR HOLDING THAT ASSESSEE HAS OBTAINE D EXTRA BENEFIT COMPARED THE THREE CASES WHEREIN ON MONEY EVIDENCE WAS FOUND IN SEARCH. THE RATE PER SQ. FT. OF THESE THRE E PLOTS INCLUDING ON MONEY WORKS OUT TO RS. 1648/- PER SQ. FT. WHEREAS THE VILLAS SOLD TO THE ASSESSEE IS AT 1922/- PER SQ . FT. THUS INFECT THE VILLAS IS SOLD TO THE ASSESSEE AT A HIGH ER PRICE THAN THE OTHERS AND THEREFORE IT CANT BE SAID THAT THERE IS ANY BENEFIT GIVEN TO THE ASSESSEE. IN VIEW OF THE ABOVE FACTS AS DISCUSSED ABOVE, WE D O NOT FIND ANY ERROR OR ILLEGALITY IN THE ORDER OF LD. CIT (A) IN DELETING THE ADDITION MADE BY THE AO UNDER SECTION 2(24)(IV) OF THE IT AC T. 5 ITA NO. 787/JP/2018 SHRI HARI OM BHATIA, KOTA. THEREFORE, FACTS AS WELL AS THE COMPUTATION OF ON M ONEY /UNACCOUNTED CONSIDERATION TAKEN BY THE AO ARE IDENTICAL WHEREAS WE FIND THAT THE ACTUAL RATE PER SQ. YARD/SQ. FT. PAID BY THE ASSESSEE IS MORE THAN THE RATE FOUND RECORDED IN THE SEIZED MATERIAL AS WELL AS CIRCULAR RATE OF THE PRO PERTY. ACCORDINGLY, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE ORDER OF THE LD. CIT (A) QUA THIS ISSUE. 3. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER IS PRONOUNCED IN THE OPEN COURT ON 25/04/ 2019. SD/- SD/- ( FOE FLAG ;KNO ) ( FOT; IKY JKWO (VIKRAM SINGH YADAV ) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 25/04/2019. DAS/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- THE DCIT, CENTRAL CIRCLE, KOTA. 2. THE RESPONDENT SHRI HARI OM BHATIA, KOTA. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 787/JP/2018) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR