LATE SHRI PRABHU DAYAL KASLIWAL, Jaipur V. ITO, Jaipur

ITA 866/JPR/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78098 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 8 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-06-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 05-10-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D C SHARMA
• Assessee Lawyers: S L PODDAR
• Keywords: Gift; Additional evidence; Reassessment proceedings
• Section: 143(3); 147; 148

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH, JAIPUR (BEFORE SHRI R.P. TOLANI AND SHRI T.R. ME ENA) ITA NO. 866/JP/2011 ASSESSMENT YEAR : 2006-07 PAN : ABNPK 2727 J LATE SHRI PRABHU DAYAL KASLIWAL VS. THE ITO THRU: L/H SHRI SUBHASH KASLIWAL WARD- 3(4) B-117, SCHEME NO. 10-B, JAIPUR GOPALPURA MODE, JAIPUR (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S.L. PODDAR DEPARTMENT BY: SHRI D.C. SHARMA DATE OF HEARING: 11-06-2014 DATE OF PRONOUNCEMENT: 13-06-2014 ORDER PER R.P. TOLANI, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST OR DER OF THE LD. CIT(A)- I, JAIPUR DATED 02-09-2011 FOR THE ASSESSMENT YEAR 2006-07 WHEREIN FOLLOWING GROUNDS HAVE BEEN RAISED BY THE ASSESSEE . 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF TH E AO IN COMPLETING THE ASSESSMENT U/S 143(3) WITHOUT MENTIONING ANY REASON AND SUPPLYING THE COPY OF THE REASON RECORDED. THEREFORE, THE ASSESSMENT FRAME IS BAD IN LAW AND VOID AB-INITIO AND DESERVES TO BE QUASHE D. 2 2. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE TH E LD. CIT(A) HAS ERRED IN CONFIRMING THE COMPUTATION OF CAPITAL GAIN INCOME AT RS. 1,36,14,882/- SPECIALLY WHEN THE SAME CAPITAL GAIN INCOME ASSESSED U/S 143(3) OF THE I.T. ACT , 1961 AT RS. 19,91,800/- THEREBY ENHANCEM ENT OF CAPITAL GAIN INCOME BY RS. 1,16,23,020/- 2.1 DURING THE COURSE OF HEARING, THE LD. AR OF THE ASSESSEE, SHRI S.L PODDAR, DID NOT PRESS THE GROUND NO. 1 ABOUT VALID ITY OF REASSESSMENT PROCEEDINGS . HENCE, THE SAME IS DISMISSED BEING N OT PRESSED. 3.1 APROPOS SECOND GROUND, THE BRIEF FACTS OF THE C ASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME ON 24-12-2010 D ISCLOSING CAPITAL GAIN ON THE SALE OF IMMOVABLE PROPERTY AT A CONSIDERATION O F RS. 99.21 LACS. THE ASSESSMENT WAS COMPLETED ACCORDINGLY. THEREAFTER A SEARCH WAS CONDUCTED ON A BUILDER FIRM M/S. MOTI DEVELOPERS AND ITS TWO PARTNERS SHRI SANJAY CHHABRA AND SHRI SANDEEP CHABRA WHERE DOCUMENTS WER E FOUND INDICATING THAT THE ASSESSEE HAD ACTUALLY SOLD THE SAME PROPE RTY FOR RS. 2.38 CRORES. THEREFORE, THE ASSESSMENT WAS REOPENED BY THE AO AF TER RECORDING THE REASONS. IN RESPONSE TO NOTICE U/S 148 OF THE ACT, THE ASSESSEE DID NOT FILE ANY RETURN OF INCOME. THE AO, THEREFORE, ISSUED A QUEST IONNAIRE AND AS PER AOS FINDING IN PARA 2 AT PAGE 2, THE COPY OF THE AGREE MENT FOUND FROM M/S. MOTI DEVELOPERS WAS SUPPLIED TO THE ASSESSEE. IN RE SPONSE TO SHOW CAUSE NOTICE, THE ASSESSEE VIDE HIS SUBMISSION DATED 26-1 1-2010 AGREED TO ADOPT 3 THE SALE CONSIDERATION OF RS. 2.38 CRORES FOR COMPU TATION OF CAPITAL GAINS AS UNDER:- WITH REFERENCE TO THE ABOVE PROCEEDINGS U/S 147 OF THE I.T. ACT, 1961 AND AFTER INSPECTION OF THE R EASONS RECORDED FOR INITIATING PROCEEDINGS U/S 147 OF THE I.T. ACT, 1961, I AM UNABLE TO RECOLLECT THE FACTS OF THE SAL E OF PLOT NO. A- 28, JANTA COLONY, JAIPUR VIDE AGREEMENT DATED 5-01- 2006. SINCE I AM A PERSON OF NEAR ABOUT 88 YEARS OF AGE AND I H AVE ALMOST LOST MY MEMORY IN LAST 2-3 YEARS. ON GOING THROUGH THE PAPERS AND OTHER RECORDS WHICH IS AVAILABLE WITH ME, I FIN D THAT I HAVE SOLD THIS PROPERTY ONLY FOR RS. 99,21,000/- BUT AFT ER GOING THROUGH THE REASONS RECORDED AND OTHER CIRCUMSTANCE S SURROUNDING TO ME AS I AM LIVING ALONE ALL MY FIVE SONS HAVE SEPARATED FROM ME. MY WIFE HAS ALSO EXPIRED IN 2006 . I HAVE ALREADY EXHAUSTED ALL THE FUNDS RECEIVED BY SALE OF ABOVE PLOT BY GIFTING THE SAME TO MY NEAR AND DEAR RELATIVES A ND BALANCE AMOUNT WAS UTILIZED FOR PURCHASE OF RESIDENCE IN WH ICH I AM PRESENTLY RESIDING AND RS. 6,00,000/- WERE INVESTED IN NABARD CAPITAL BONDS WHICH ARE GOING TO MATURE IN M ARCH 201. PRESENTLY I HAVE NO MONEY AND MY ONLY SOURCE O F INCOME IS PENSION INCOME. THEREFORE, I AM NOT IN A POSITIO N TO CONTEST THE PROCEEDINGS INITIATED BY YOU AND TO PURCHASE OF PEACE OF MIND AND AVOID LITIGATION. I AM READY TO PAY TAX ON THE ALLEGED SALE CONSIDERATION OF RS. 2.38 CRORES AS MENTIONED IN YOUR NOTICE SUBJECT TO THE RIDER THAT NO PENALTY PROCEED INGS WILL BE INITIATED AND I WILL BE GIVEN REASONABLE TIME TO DE POSIT TAX AMOUNT.. 3.2 IN THESE FACTS AND CIRCUMSTANCES, THE AO TAXED ASSESSEE'S CAPITAL GAIN BY OBSERVING AS UNDER:- THEREFORE, CONSIDERING THE ABOVE SUBMISSION OF TH E ASSESSEE, IT IS CLEAR THAT THE ACTUAL SALE CONSIDE3 RATION OF THE ABOVE PROPERTY AT A-28, JANTA COLONY, JAIPUR WAS RS . 2.38 CRORES, AS IS EVIDENT FROM THE CONTENTS OF THE ARGU MENT DATED 5- 01-2006 BETWEEN THE ASSESSEE AND THE PURCHASER SHR I SANJAY 4 CHABRA AND SHRI SANDEEP CHABRA, P/O M/S. MOTI DEVEL OPERS, JAIPUR. FURTHER, THE PURCHASERS HAVE DISCLOSED THE ON-MONEY GIVEN IN THEIR RETURNS OF INCOME FOR A.Y. 2006-07 A S UNDISCLOSED INVESTMENT. THEREFORE, THE SALE CONSIDE RATION IS TAKEN AT RS. 2.38 CRORES FOR CHARGING CAPITAL GAIN. 3.3 AGGRIEVED, THE ASSESSEE PREFERRED FIRST APPEAL WHERE THE ASSESSEE DID NOT DISPUTE THE CONTENTS OF THE LETTER OFFERING TH E SALE CONSIDERATION OF RS. 2.38 CRORES. HOWEVER, THE ASSESSEE TOOK CERTAIN OBJ ECTIONS THAT THE AO DID NOT ESTABLISH THAT THE ASSESSEE RECEIVED CASH ON MONEY OUT OF RS. 2.38 CRORES FOR SALE OF PLOT AND NO OTHER CORROBORATIVE EVIDENCE HAS BEEN BROUGHT ON RECORD BY THE AO. THE ORIGINAL AGREEMENT DATED 5 -01-2006 COULD BE NOT RELIED ON WITHOUT ANY SUPPORTING MATERIAL. THE ASSE SSEE ALSO FILED ADDITIONAL EVIDENCE BEING A SALE DEED FOR PLOT NO. 29 AT THE S AME LOCALITY AND THE SELLING RATE OF THIS PLOT WAS NEARLY SIMILAR TO ASS ESSEE'S SALE VALUE AS PER ORIGINAL RETURN. THIS ADDITIONAL EVIDENCE WAS FORWA RDED BY THE LD. CIT(A) TO THE AO, WHO IN REMAND REPORT CATEGORICALLY STATED THAT ASSESSEE'S ADDITIONAL EVIDENCE HAS NO MERIT IN AS MUCH AS THAT PURCHASER OF THE PROPERTY ALSO HAS ALREADY ACCEPTED THE ACTUAL SALE CONSIDERATION OF R S. 2.38 CRORES AND OFFERED TO TAX THE DIFFERENTIAL AMOUNT. DURING REASSESSMENT PROCEEDINGS, THE ASSESSEE HIMSELF HAS ACCEPTED THE ENHANCED SALE CONSIDERATIO N OF RS. 2.38 CRORES VOLUNTARILY AND AGREED TO PAY TAX THEREON. THEREFO RE, THERE WAS NO MERIT IN THE ASSESSEE'S CONTENTION TO DISPUTE THE ADDITIONS MADE BY HIS VOLUNTARY 5 OFFER. THE LD. CIT(A) THEREAFTER DISMISSED ASSESSEE 'S APPEAL AFTER OBSERVING AS UNDER:- IN VIEW OF THE ABOVE FACTS, I DO NOT CONCUR WITH THE SUBMISSIONS BY THE A.R. THE DEPARTMENT HAS BROUGHT ENOUGH EVIDENCE ON RECORD TO SHOW THAT SALE CONSIDERATION OF RS. 2.38 CRORES WAS PAID TO THE ASSESSEE BY THE PURCHASERS. HE HIMSELF HAS ADMITTED AS MUCH DURING THE COURSE OF ASSESSMEN T PROCEEDINGS BEFORE THE AO. THUS THE A.R, SEEMS TO B E TAKING FLIMSY ARGUMENT REGARDING THERE NOT BEEN SUFFICIENT EVIDENCE IN THIS CASE. ONCE, THE AGREEMENT WAS FOUND REFLECTING THE TRUE PAYMENT MADE BY THE PURCHASERS AND THIS HAS BEEN AD MITTED TO BY THEM VIDE THEIR ACTIONS IN TERMS OF DECLARING TH IS AMOUNT IN THEIR RETURNS IT IS SUFFICIENT INFORMATION. IT IS N OT CLEAR WHAT FURTHER CORROBORATIVE EVIDENCE SHOULD HAVE BEEN GAT HERED BY THE AO. MOREOVER, THE EVIDENCE FILED REGARDING THE SALE OF PLOT AT 29, JANTA COLONY, JAIPUR AT A RATE SIMILAR TO TH AT DECLARED BY THE ASSESSEE WHILE FILING HIS RETURN OF INCOME IS A LSO NOT HELD TO BE A COMPARABLE CASE. BECAUSE IN THE CASE OF THE AS SESSEE, THE DEPARTMENT WAS ABLE TO UNEARTH SPECIFIC DOCUMENTARY EVIDENCE OF EXCESS SALE CONSIDERATION PAID. ON THE BASIS OF THIS EVIDENCE THE PURCHASER EVEN PAID TAXES. THIS WAS NOT THE FAC T IN THE CASE OF THE TRANSACTION RELIED ON BY THE A.R. AS A COMPA RABLE CASE. THEREFORE, THE SALE TRANSACTION RELIED ON BY THE A. R. CANNOT BE HELD TO BE COMPARABLE TO THAT OF THE ASSESSEE AS FA CTS WERE DIFFERENT. IN VIEW OF THE ABOVE FACTS, THE CAPITAL GAIN COMPUTED BY THE AO AT RS. 1,36,84,910/- IS CONFIRMED. 3.4 AGGRIEVED, ASSESSEE IS BEFORE US. THE LD. COUNS EL FOR THE ASSESSEE SHRI S.L. PODDAR IN ALL FAIRNESS DID NOT DISPUTE THE LET TER WRITTEN BY THE ASSESSEE OFFERING THE AMOUNT OF SALES CONSIDERATION OF PLOT AT RS. 2.38 CRORERS. HOWEVER, ACCORDING TO HIM THE IMPUGNED COMPUTATION OF CAPITAL GAIN CANNOT 6 BE MADE IN THE ABSENCE OF OTHER MATERIAL LIKE EXIST ENCE OF ANY EVIDENCE FOR CASH PAYMENT OF ON-MONEY. THE ADDITIONAL EVIDENCE F ILED BEFORE THE LD. CIT(A) SUPPORTED THE ASSESSEE'S CLAIM THAT THE SALE PRICE MENTIONED IN ORIGINAL AGREEMENT WAS COMPARABLE TO SIMILAR SALE INSTANCE. 3.5 ON THE OTHER HAND, THE LD. DR SHRI D.C. SHARMA CONTENDED THAT THE ASSESSEE HAS BEEN GIVEN ADEQUATE OPPORTUNITIES OF HEARING. NO RETURN OF INCOME WAS FILED IN RESPONSE TO SECTION 148 OF THE ACT. THE AO ISSUED A QUESTIONNAIRE AND IN REPLY THERETO WITHOUT RAISING ANY OBJECTION ABOUT THE EXISTENCE OF ANY OTHER MATERIAL BY A VOLUNTARY LETT ER DATED 26-11-2010. THE ASSESSEE ACCEPTED THE SALE CONSIDERATION OF PLOT A T RS. 2.38 CRORES AND OFFERED IT FOR TAXATION. THE ASSESSMENT WAS COMPLET ED ON 15-12-2010 U/S 147 OF THE ACT. NEITHER IN FIRST APPEAL NOR BEFORE ITAT, THE ASSESSEE HAS CHALLENGED THE VALIDITY OF THIS LETTER AND OFFER CO NTAINED THEREIN. ONCE THE ASSESSEE HAS VOLUNTARILY AGREED THAT ACTUAL SALE CO NSIDERATION WAS AT RS. 2.38 CRORES THE CAPITAL GAINS CANNOT BE NOW CHANGED ON F LIMSY ARGUMENTS. IT IS A CLINCHING FACT THAT PURCHASER OF PROPERTY HAS ALSO ACCEPTED THE SAME SALE CONSIDERATION OF RS. 2.38 CRORES AS ADDITIONAL INCO ME AND PAID TAXES THEREON. THE FLIMSY ARGUMENTS BEING RAISED BY THE ASSESSEE ABOUT THE PROOF OF CASH RECEIPTS ARE NON-RELEVANCE OF AGREEMENT AND HAVE NO LEGS TO STAND IN ASMUCH 7 AS THESE ISSUES ARE SUITABLY ANSWERED BY THE AO IN HIS REMAND REPORT. THEREFORE, ASSESSEE'S APPEAL IS LIABLE TO BE DISMIS SED. 3.6 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ISSUE OF VALIDITY OF REOPE NING OF THE ASSESSMENT OR ASSESSEE'S LETTER DATED 26-11-2010 IS NOT IN DISPUT E. THE ASSESSEE'S LETTER VOLUNTARILY ACCEPTING THE ACTUAL CONSIDERATION OF R S. 2.38 CRORES IS MENTIONED ABOVE. THE SALE CONSIDERATION OF PLOT BEI NG RS. 2.38 CRORES IS SUPPORTED AND SUBSTANTIATED ALSO BY THE PURCHASER OF THE PLOT I.E. MOTI DEVELOPERS. AFTER RECOVERY OF INCRIMINATING MATERIA L DURING THE COURSE OF SEARCH, THEY ADMITTED THAT THE PLOT WAS ACTUALLY P URCHASED AT RS. 2.38 CRORES WHICH WAS OFFERED BY THEM AND TAX PAID THEREON. IN OUR VIEW THE ISSUE IN QUESTION IS CLINCHED BY THESE FACTS ALONE AND THER E IS NO ONUS ON THE REVENUE TO PRODUCE FURTHER EVIDENCE, WHEN THE ACTU AL VALUE OF TRANSACTION IS ACCEPTED BY BOTH THE SELLERS AND PURCHASERS. THE OB JECTIONS BEING RAISED BY THE LD. COUNSEL FOR THE ASSESSEE HAVE NO MERIT AND AMOUNT TO FRIVOLOUS OBJECTIONS WHICH HAVE NO LEGS TO STAND IN VIEW OF T HE CLINCHING FACTS AS MENTIONED ABOVE. THUS, IN THE GIVEN FACTS, WE SEE N O MERIT IN THE ASSESSEE'S APPEAL WHICH IS DISMISSED. 8 4.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED.. THE ORDER PRONOUNCED IN OPEN COURT ON 13 TH JUNE, 2014 SD/- SD/- (T.R. MEENA) (R.P. TOLANI) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR DATED: 13 TH JUNE, 2014 *MISHRA COPY FORWARDED TO:- 1. LATE SHRI PRABHU DAYAL KASLIWAL, JAIPUR 2. THE ITO , WARD- 3(4), JAIPUR 3. THE LD. CIT 4. THE LD. CIT(A), JAIPUR 5..THE LD. DR 6.THE GUARD FILE (IT NO. 866/JP/2011) BY ORDER AR ITAT, JAIPUR 9