LALA RAM MEENA, Jaipur V. ITO, Jaipur

ITA 867/JPR/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2071 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 17-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Keywords: Sale consideration of property below Jantri Value; Fair market value; Corroborative evidences; Valuation report
• Section: 50C; 54F; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR BEFORE: SMT. DIVA SINGH, JUDICIAL MEMBER ITA NO. 867/JP/2014 ASSESSMENT YEAR : 2006-07 LALA RAM MEENA, VILLAGE- HARVAR, TEHSIL- AMER, JAIPUR. VS. I.T.O., WARD 7(3), JAIPUR. PAN/GIR NO.: BBVPM 5606 D RESPONDENT ASSESSEE BY : NONE. REVENUE BY : SHRI R.A. VERMA (ADDL.CIT) DATE OF HEARING : 23/03/2017 DATE OF PRONOUNCEMENT: 17/05/2017 ORDER PER DIVA SINGH, J.M THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A SSAILING THE CORRECTNESS OF THE ORDER DATED 28/10/2014 OF CIT(A)-III, JAIPUR PERTAINING TO 2006-07 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS: '1 . THE ID. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CON FIRMING THE ASSESSMENT OF INCOME FROM LONG TERMS CAPITAL GAIN AT RS. 8,05,200 /- BY:- (I) TAKING THE SALE CONSIDERATION OF THE LAND AT R S. 15,50,700/- ON THE BASIS OF THE VALUE DETERMINED BY THE STAMP VALUATION AUTH ORITY INSTEAD OF ACTUAL CONSIDERATION OF RS. 25,00,000/-. (II) CONSIDERING THE FAIR MARKET VALUE OF THE AGRI CULTURE LAND AS ON 01/4/1981 AT RS. 1,50,0007- INSTEAD OF RS. 2,50,000 /- CLAIMED BY THE ASSESSEE AND (III) NOT ALLOWING THE EXEMPTION U/S 54F. 1.1 THE ID. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE ADDITION OF RS. 14,00 7 000/- U/S 69A BY TREATING THE CASH DEPOSIT IN THE B ANK ACCOUNT AS UNEXPLAINED BY NOT APPRECIATING THAT THIS REPRESENT THE SALE CONSI DERATION OF THE LAND SOLD BY THE ASSESSEE.' 2. AT THE TIME OF HEARING, NO ONE WAS PRESENT ON TH E BEHALF OF THE ASSESSEE. ADJOURNMENT WAS SOUGHT BY PROXY COUNS EL SHRI RAJEEV SOGANI. HOWEVER, SINCE THE APPEAL COULD BE DECIDED ON THE B ASIS OF MATERIAL AVAILABLE ON RECORD, THE ORAL REQUEST WAS REJECTED AND THE ID. S R. DR WAS REQUIRED TO ADDRESS THE ISSUES ON MERIT. 3. THE ID. SR. DR RELIES ON THE IMPUGNED ORDER. THE FACTS ON RECORD ARE THAT THE ASSESSEE, WHO IS STATED TO BE DERIVING INCOME ONLY FROM AGRICULTURAL ACTIVITIES, WAS ISSUED NOTICE U/S 148 OF THE INCOME TAX ACT, 19 61 (IN SHORT THE ACT) AND REQUIRED TO FILE RETURN. IN RESPONSE THERETO, THE ASSESSEE D ECLARED INCOME OF RS. 89,274/-. IN ADDITION, AGRICULTURE INCOME OF RS. 25,000/- WAS AL SO DECLARED. HOWEVER, SINCE, THERE WERE TOTAL DEPOSITS OF RS. 18.00 LACS IN THE ASSESSEE'S SAVINGS BANK ACCOUNT MAINTAINED WITH BANK OF INDIA, KUKAS HAVING ACCOUNT NO. 27960100001511 (LEGACY ACCOUNT NO. SB2002601, THE ASSESSEE WAS REQUIRED TO EXPLAIN THE SAME. FURTHER IT WAS ALSO NOTED THAT IN THE YEAR UNDER CONSIDERATION, TH E ASSESSEE HAD SOLD HIS SHARE IN LAND BEARING KHASARA NO. 761, 760,764, 765, 766, 767, 76 8, 769/957 SITUATED AT VILLAGE 2 HARVAR, TEHSIL AMER, DISTRICT- JAIPUR AND HAD GOT R EGISTERED WITH THE SUB REGISTRAR, AMER ON 15/02/2006 TO SHRI KALU RAM MEENA, S/O- SHRI JAI NARAYAN MEENA RESIDENT OF PLOT NO. A/2, JAIKISHAN COLONY, TONK PHATAK, JAIPUR AT S ALE CONSIDERATION OF RS. 11,00,000/- RECEIVED THROUGH CHEQUE NO. 010409 DATE D 15/2/2013 DRAWN ON CENTRAL BANK OF INDIA, JYOTI NAGAR, JAIPUR AND CASH AMOUNT OF RS. 4,00,000/-. THE VALUE OF THE LAND FOR THE STAMP PURPOSES WAS CALCULATED AT R S. 15,50,700/- BY THE SUB- REGISTRAR. THE VALUE CONSIDERING SECTION 50C OF THE INCOME TAX ACT, 1961 WAS TAKEN AT RS. 15,50,700/- FOR THE CAPITAL GAIN PURPOSES. A PART FROM THIS, THE ASSESSEE WAS FOUND TO HAVE TAKEN COST OF LAND AS ON 01/4/1981 AT RS. 2 .50 LACS AND AFTER INDEXING THE SAME HAD CLAIMED DEDUCTION OF RS. 12,42,500/- BY SHOWING SALE CONSIDERATION OF RS. 15.50 LACS EXEMPTION OF RS. 2,18,226/- U/S 54F WAS ALSO CLAIME D. 3.1 THE ASSESSEE WAS REQUIRED TO FURNISH THE BASIS OF C OST TAKEN. IN RESPONSE TO THIS, THE ASSESSEE SUBMITTED THAT THE FAIR MARKET VALUE OF LA ND AS ON 01/4/1981 WAS TAKEN. SINCE IT WAS NOT SUPPORTED BY ANY DOCUMENTARY EVIDENCE, T HE ASSESSING OFFICER HELD THAT, LOOKING AT THE LOCATION OF THE LAND AND OTHER FACTO RS, THE COST OF THE LAND AS ON 01/4/2013 WAS TO BE TAKEN AT RS. 1,50,000/-AND ACCO RDINGLY INDEXED COST RS. 7,45,500/- IS ALLOWED. AS A RESULT THEREOF, LONG TERM CAPITAL GAIN WAS RE-COMPUTED AT RS. 8,05,200/- AND ADDITION OF RS. 14.00 LACS WAS ALSO MADE AS INCOME FROM OTHER SOURCES AMOUNTING TO RS. 14.00 LACS. 4. THE ASSESSEE CARRIED THE ISSUE BEFORE THE CIT(A) STATING THAT THE ASSESSEE HAD ACTUALLY RECEIVED RS. 25.00 LACS FOR THE SALE TRANS ACTION AND THE DEPOSIT OF RS. 14.00 LACS IN HIS ACCOUNT ALSO FORMED PART OF THE SALE CO NSIDERATION AND THE VALUE TAKEN FOR THE PURPOSES OF STAMP DUTY BY THE REGISTERING AUTHO RITY AS RS. 15,50,700/- DOES NOT REFLECT THIS. THE EXPLANATION WAS REJECTED BY THE C IT(A) NOTING THAT THE SALE CONSIDERATION MENTIONED IN THE SALE DEED WAS ONLY R S. 11.00 LACS AND EVEN THE BUYER HAD NOT ACKNOWLEDGED ANY SUCH SALE CONSIDERATION OF RS. 25.00 LACS. 4.1 ON THE ISSUE OF DETERMINATION OF INDEXING COS T, THE CIT(A) REJECTED THE ASSESSEES ARGUMENTS HOLDING THAT IN THE ESTIMATE OF THE ASSES SING OFFICER THE ASSESSEE HAD NOT POINTED OUT ANY MISTAKE. 4.2 THE CIT(A) ALSO REJECTED THE CLAIM OF DEDUCT ION U/S 54F OF THE ACT ON THE GROUND THAT BEFORE THE ASSESSING OFFICER THE ONLY EVIDENCE WAS IN REGARD TO THE PURCHASE OF PLOT AND NO EVIDENCE OF CONSTRUC TION WAS FILED. THE RELIANCE PLACED ON SOME VALUATION REPORT DATED 23/9/2014 WAS DISCARDED HOLDING THAT IN THE ABSENCE OF INDEPENDENT EVIDENCE THE APPROVED VALUER S REPORT FOR THE PERIOD OF CONSTRUCTION THE CLAIM OF CONSTRUCTION COST OF RS. 15,28,307/- WAS CONSIDERED TO BE NOT RELEVANT OR RELIABLE AS IT AT ASSESSEES BEHEST. 5. THE ID. SR. DR WAS REQUIRED TO SUPPORT THE FINDI NGS AND EXPLAIN HOW THE ESTIMATE OF THE ASSESSING OFFICER WAS MORE RELIABLE THAN THAT O F THE ASSESSEE. AS EVIDENTLY FOR BOTH THE ESTIMATES, THERE IS NO SUPPORTING EVIDENCE. 5.1 SIMILARLY FOR DISPUTING THE CLAIM OF THE ASSESS EE WHO ADMITTEDLY HAD ONLY INCOME 3 FROM SALE OF AGRICULTURAL LAND OR AGRICULTURAL INCO ME, WHAT WAS THE EVIDENCE AVAILABLE TO DISPUTE THE SAID CLAIM THAT CASH DEPOSIT WAS NOT SO URCED FROM THE SALE PROCEEDS OF HIS ONLY ASSET I.E; HIS SHARE IN THE AGRICULTURAL LAND / PROCEED. LD. SENIOR DR AGAIN RELIES UPON THE IMPUGNED ORDER. 5.2 SIMILARLY IT WAS QUESTIONED HOW WITHOUT REBUTTI NG THE EVIDENCE THE CLAIM OF COST OF CONSTRUCTION BE DISMISSED BASED ON SUSPICION. TH E LD. SR. DR RELIED ON THE ORDERS. 6. I HAVE HEARD THE SUBMISSIONS AND PERUSED THE MAT ERIAL AVAILABLE ON RECORD. I FIND THAT IN THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE THE REJECTION OF THE ASSESSEE CLAIM SOLELY BECAUSE THE BUYER DOES NOT CONFIRM IS NOT CORRECT. PLACING RELIANCE UPON THE CONFIRMATION OF THE BUYER IN THE PECULIAR FACTS AND CIRCUMSTANCES TO MY MIND IS AN UNNECESSARY AND IMPOSSIBLE BURDEN UPON THE TAX PAYE R WHOSE SOLE SOURCE OF INCOME IS SALE OF AGRICULTURAL LAND AND AGRICULTURAL PROCEEDS . IT IS VERY RARE THAT A BUYER WILL COME OUT AND ACCEPT THAT HE HAS PAID MORE FOR THE AGRICU LTURAL LAND THAN WHAT WAS RECORDED IN THE DOCUMENTS. ACCORDINGLY THE REASONING TAKEN B Y THE TAX AUTHORITIES TO DISMISS THIS PRIMA FACIE ALLOWABLE CLAIM CANNOT BE APPROVED. IN FACT, THE TAX AUTHORITIES WOULD HAVE BEEN WELL ADVISED TO TAKE A DEEPER LOOK INTO T HE DENIAL OF THE BUYER. THE AGRICULTURIST WHO PARTS WITH HIS SHARE OF AGRICULTU RAL LAND I.E; HIS SOLE ASSET MAY NOT NECESSARILY HAVE HAD THE BENEFIT OF ADEQUATE LEGAL ADVICE / TAX PLANNING AS HIS EXPOSURE TO TAX LITIGATION MAY BE VIRTUALLY NON-EXI STENT. IN THE CIRCUMSTANCES HE MAY BE EXCUSED FOR ENTERTAINING THE BELIEF THAT HIS CLAIM MADE IN GOOD FAITH ON CORRECT FACTS IS ACCEPTABLE. THUS IF THE TAX AUTHORITIES HAD TO NEGA TE THE CLAIM THEN SOME POSITIVE COGENT EVIDENCE IN THE PECULIAR FACTS OF THE PRESEN T CASE SHOULD HAVE BEEN RELIED UPON. THE ASSET HAS BEEN PARTED WITH, SOURCE IS STA TED TO BE SALE OF THE SAME AND THERE IS NO OTHER SOURCE OF INCOME WITH THE TAX PAYER THE AMOUNT QUOTED IS NOT SHOWN TO BE AN IMPOSSIBLY PREPOSTEROUS AMOUNT, ACCORDINGLY THE CONSISTENT CLAIM OF THE ASSESSEE IN THE PECULIAR FACTS AND CIRCUMSTANCES OF THE PRESEN T CASE IN THE ABSENCE OF AN CONTRARY EVIDENCES HAS TO BE ALLOWED. ORDERED ACCORDINGLY. 6.1 ADDRESSING THE REMAINING CLAIM OF THE ASSESSEE I.E, THE COST OF LAND AS ON 01/04/1981 IT IS SEEN THAT THE CLAIM OF THE TAX PAY ER HAS BEEN THROWN OUT BY THE REVENUE ON THE GROUNDS THAT THE EVIDENCE IN SUPPORT OF THE SAME WAS LACKING. ON A PERUSAL OF THE RECORD, IT IS SEEN THAT SIMILAR DEME RIT IS EVIDENT IN THE ESTIMATE OF THE ASSESSING OFFICER ALSO. ACCORDINGLY THE SAID ISSUE IS RESTORED BACK TO THE ASSESSING OFFICER TO DECIDE THE ISSUE DE NOVO. THE ASSESSEE W OULD BE AT LIBERTY TO PLACE FRESH EVIDENCES IN SUPPORT OF ITS CLAIM. 6.2 THE LAST ISSUE WHICH REMAINS FOR CONSIDERATION BEING THE CLAIM OF CONSTRUCTION OF HOUSE WHEREIN THE LD. SR. DR RELIES ON THE IMPUGNED ORDER. IT IS SEEN THAT THE TAX AUTHORITIES HAVE DISCARDED THE REPORT OF THE APPROV ED VALUER ONLY ON THE GROUND THAT IT IS FOR THE BENEFIT OF THE ASSESSEE. REJECTION ONLY ON THE BASIS OF PRESUMPTION IS NOT APPROVED. AS OPPOSED TO THE EVIDENCE PLACED ON RECO RD INDEPENDENT EVIDENCE HAS BEEN SOUGHT BY THE TAX AUTHORITIES. ACCORDINGLY, IT IS DEEMED APPROPRIATE TO SET ASIDE THIS ISSUE BACK TO THE AO ALSO DIRECTING THE SAID A UTHORITY TO ADDRESS THE VALUATION 4 REPORT RELIED UPON AND SPELL OUT FOR THE BENEFIT OF THE TAX PAYER AS TO WHAT KIND OF INDEPENDENT EVIDENCE CAN BE MADE AVAILABLE IN RE GARD TO THE CONSTRUCTION OF THE PROPERTY IN THE SPECIFIC AREA WHERE THE CONSTRU CTION IN THE REQUISITE PERIOD IS STATED TO HAVE TAKEN PLACE. IN CASE, THERE IS NO IN DEPENDENT EVIDENCE CAPABLE OF BEING FILED THE TAX PAYER CANNOT BE DIRECTED TO PER FORM THE IMPOSSIBLE. IN SUCH AN EVENTUALITY THE ISSUE HAS TO BE DECIDED ON THE BASI S OF VALUATION REPORT AVAILABLE ON RECORD. THE VALUATION REPORT CANNOT BE DISBELIEVED ONLY ON THE GROUND THAT IT SUPPORTS THE TAX PAYERS CLAIM. THIS MANNER OF ADVERSARIAL DECISION MAKING IS NOT IN THE CORRECT AND TRUE SPIRIT OF TAX ADJUDICATION AND CANNOT BE COUNTENANCED AND GIVEN A LEGAL SANCTION. ACCORDINGL Y, THE IMPUGNED ORDER TO THE EXTENT STATED ABOVE IS SET ASIDE BACK TO THE FILE O F THE ASSESSING OFFICER. SAID ORDER WAS PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ITSELF. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 17/05/2017 SD/- (DIVA SINGH) JUDICIAL MEMBER POONAM / AG(CHD) COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A)` 5. THE DR ASSTT. REGISTRAR ITAT, JAIPUR.