Smt. Noothan P. Shetty, Mysore V. DCIT, Mysore

ITA 891/BANG/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 1609 (ITAT-BANGALORE)
• Duration Of Justice: 6 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-01-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 13-01-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 12-07-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MEERA SRIVASTAVA JT
• Assessee Lawyers: S SUKUMAR
• Keywords: Principle of natural justice; Additional evidence; Reassessment proceedings; Capital Gains
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ITA NO. 891/BANG/2010 ASSESSMENT YEAR : 2007 - 08 SMT. NOOTHAN P. SHETTY, NO.225, 8 TH CROSS, IIIRD STAGE, GOKULAM, MYSORE 572 002. : APP ELL ANT VS. THE DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, MYSORE. : RESPONDENT APP EL LA NT BY : SHRI S. SUKUMAR, ADVOCATE RESPONDENT BY : S MT. MEERA SRIVASTAVA, JT.CIT(DR) O R D E R PER A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT (A) - VI, BANGALORE, IN ITA NO: 161/DCIT/CC, MYSORE/CIT(A) - VI, BANGALORE, FOR THE ASSESSMENT YEAR 2007 - 08. 2. THE ASSESSEE HAD RAI SED AS MANY AS 22 GROUNDS IN AN ILLUSTRATIVE AND NARRATIVE MANNER. ON A CAREFUL PERUSAL OF THE GROUNDS RAISED, WE FIND THAT THE CRUXES OF THE ISSUES ARE TWO - FOLDS WHICH ARE LISTED OUT IN A CONCISE MANNER AS UNDER: ITA NO.891/BANG/10 PAGE 2 OF 11 (I) THE CIT (A) ERRED IN ENHANCING THE DISAL LOWANCE BY RS.20 LAKHS UNDER THE HEAD LAND DEVELOPMENT, DEMOLITION, LEVELING, CONSTRUCTION OF COMPOUND WALL ETC .; & (II) THE CIT (A) ERRED IN ENHANCING THE DISALLOWANCE BY RS.43 LAKHS UNDER THE HEAD COMMISSION PAYMENTS . 3. DURING THE COURSE OF HEARI NG, THE ASSESSEE CAME UP WITH A PLEA FOR RAISING AN ADDITIONAL GROUND [VIDE HER LETTER DATED 13.12.2010] WHICH IS REPRODUCED AS UNDER: THE ASSESSING OFFICER ERRED IN NOT ALLOWING HOUSE LOAN INTEREST OF RS.5,58,486/ - WHILE COMPUTING THE PROPERTY INCOME. 3.1. AFTER DUE CONSIDERATION OF THE ASSESSEE S PLEA AND ALSO HEARING THE EITHER PARTY, THE ADDITIONAL GROUND RAISED BY THE ASSESSEE WAS ADMITTED WITH A DIRECTION TO THE REGISTRY TO PLACE THE SAME ON RECORD. 4. THE ISSUES, IN BRIEF, ARE THAT THE ASSES SEE, AN INDIVIDUAL, DERIVES INCOME FROM SHARES, INVESTMENTS AND AGRICULTURE. DURING THE RELEVANT PERIOD UNDER DISPUTE, THE ASSESSEE HAD INDULGED IN A LAND DEALING AND ADMITTED SHORT TERM CAPITAL GAINS. THE ISSUE WAS THAT THE ASSESSEE ALONG WITH ONE K.SUB RAMANYA RAI HAVE ENTERED INTO AN AGREEMENT ON 25.9.06 TO BUY A PIECE OF LAND FROM H.N.SHIVANANJAIAH WHICH WAS LATER PURCHASED BY DMR ENTERPRISES ON 8.2.2007. IN THIS TRANSACTION, THE ASSESSEE APPEARS TO HAVE RECEIVED RS.3.97 CRORES AS CONSIDERATION BEING ONE OF THE CONFIRMING PARTIES, OUT OF WHICH, SHE HAD CLAIMED EXPENSES TOWARDS DEVELOPMENT, LEVELING ETC. AND ALSO COMMISSION IN ADDITION TO ADVANCE PAID TO THE LAND LORD. AFTER VERIFYING THE DETAILS, THE AO DISALLOWED RS. 34.54 LAKHS OUT OF THE CLAIM OF R S.54.54 LAKHS UNDER LAND DEVELOPMENT AND RS. 20 LAKHS OUT ITA NO.891/BANG/10 PAGE 3 OF 11 OF COMMISSION PAYMENT OF RS.53 LAKHS (SIC) RS.63 LAKHS [AS CLAIMED BY THE ASSESSEE] AND CONCLUDED THE ASSESSMENT ACCORDINGLY. 5. AGGRIEVED, THE ASSESSEE TOOK UP THE ISSUES BEFORE THE LD. CIT (A) FOR SOLACE. DUE CONSIDERATION OF THE ASSESSEE S SUBMISSIONS AS WELL AS THE EVIDENCES PRODUCED BY HER DURING THE COURSE OF APPELLATE PROCEEDINGS AND ALSO EXAMINING THE TERMS AND CONDITIONS REDUCED IN THE AGREEMENT ENTERED INTO WITH SHIVANANJAIAH, THE CIT (A) WAS OF THE VIEW THAT THE AO ERRED (I) IN ALLOWING THE EXPENSES TO THE TUNE OF RS.34.54 LAKHS (SIC) RS.20 LAKHS AND (II) IN ALLOWING COMMISSION PAYMENT OF RS.43 LAKHS, IGNORING THE FACT THAT THERE CANNOT BE 31 COMMISSION AGENTS FOR SALE OF A PIECE O F LAND ETC. 5.1. IN VIEW OF THE ABOVE, THE LD. CIT (A), BY INVOKING THE PROVISIONS OF S.250(4) OF THE ACT, REQUIRED THE AO TO MAKE FURTHER INQUIRY AND SEND A REPORT. ON THE BASIS OF INQUIRY REPORT OF THE AO DATED: 24.3.2010, THE CIT (A) ISSUED A LETTER (NOTICE) U/S 251(2) OF THE ACT TO THE ASSESSEE WHEREIN DETAILING THE INQUIRY CONDUCTED BY THE AO ON VARIOUS EXPENSES CLAIMED BY HER AND REQUIRED THE ASSESSEE TO SHOW - CAUSE AS TO WHY (I) THE DISALLOWANCE OF RS.20 LAKHS (SIC) RS.34.54 LAKHS MADE BY THE AO SHOULD NOT BE ENHANCED TO RS. 54.54 LAKHS ; AND (II) THE DISALLOWANCE OF THE COMMISSION OF RS.20 LAKHS BY THE AO SHOULD NOT BE ENHANCED TO RS.63 LAKHS. 5.2. AFTER CONSIDERATION OF THE ASSESSEE S EXPLANATION, SCRUTINIZING THE AGREEMENT ENTERED INTO FOR TH E LAND DEALING, CASH BOOKS, EVIDENCES PRODUCED DURING THE APPELLATE PROCEEDINGS AND ALSO THE AO S INQUIRY REPORT ITA NO.891/BANG/10 PAGE 4 OF 11 AND FOR THE DETAILED REASONS RECORDED IN HIS IMPUGNED ORDER UNDER CHALLENGE, THE LD. CIT (A) CAME TO A CONCLUSION THAT EXPENSE S ON LAND DEVELOPMENT: - (ON PAGE 26) CONSIDERING THE FACTS DISCUSSED ABOVE, THE APPEAL ON GROUND NOS. 2 AND 4 IS DISMISSED AND THE DISALLOWANCE (OUT) OF RS.34,54,000/ - OUT OF RS.54,54,000/ - MADE BY THE ASSESSING OFFICER IS ENHANCED TO RS.54,54,000/ - WHICH MEANS THE APPELLANT IS NOT ENTITLED FOR CLAIMING DEDUCTION UNDER SECTION 48 OF THE INCOME - TAX ACT ON THE ABOVE ACCOUNTS CLAIMED FOR RS.54,54,000/ EXPENSES ON COMMISSION : - (ON PAGE 32) .THE APPELLANT FAILED O PRODUCE ANY EVIDENCES TO SUPP ORT THAT ANY SERVICES WERE RENDERED BY THE ABOVE PERSONS IN RESPECT OF TRANSFER OF THE SAID PROPERTY, EVEN FROM THE ENQUIRIES CONDUCTED BY THE ASSESSING OFFICER BY ISSUE OF NOTICE UNDER SECTION 133(6) OF THE INCOME - TAX ACT, DISCUSSED ABOVE IT IS EVIDENT TH AT THE PERSONS TO WHOM THE ALLEGED COMMISSION WAS PAID WERE UNABLE TO PROVE THAT THEY HAVE RENDERED ANY SERVICES TO THE APPELLANT. IT IS ALSO EVIDENT FROM THE FACTS NARRATED ABOVE THAT THE ALLEGED COMMISSION WAS PAID TO SOME OF THE FAMILIES WHICH ITSELF INDICATES THAT THERE WERE NO SERVICES RENDERED FOR WHICH THE COMMISSION IS REQUIRED TO BE PAID. THE PAYMENT IS NOT GENUINE AS FOR TRANSFERRING ONE PROPERTY THERE CANNOT BE 31 COMMISSION AGENTS, THE COMMISSION, IF ANY, IS GIVEN TO THE AGENT WHO IS FINALL Y ABLE TO FIND OUT THE PARTY FOR SALE AND TO WHOM THE ACTUAL SALE IS EFFECTED. HENCE, THE APPELLANT IS NOT ELIGIBLE FOR DEDUCTION OF ALLEGED COMMISSION OF RS.63,00,000/ - . ACCORDINGLY DISALLOWANCE OF THE COMMISSION OF RS.20,00,000/ - MADE BY THE ASSESSING OFFICER IS ENHANCED TO RS.63,00,000/ - . 6. AGITATED, THE ASSESSEE HAS COME UP WITH THE PRESENT APPEAL. DURING THE COURSE OF HEARING, THE LD. A R HAD ARGUED AT A GREATER LENGTH AND CONTESTED THE STAND OF THE LD. CIT (A) IN ENHANCING THE INCOME (I) BY RS. 20 LAKHS UNDER LAND DEVELOPMENT ; AND (II) BY RS.43 LAKHS UNDER COMMISSION . THE SUBSTANCE OF THE ARGUMENT PUT - FORTH BY THE LD. AR IS SUMMARIZED AS UNDER: - THE WORK UNDER - TAKEN BY H.N. SHIVANANJAIAH AS AGREED UPON BY THE AGREEMENT DT.25.6.06 WAS NOT C OMPLETED AND, HENCE, THE ASSESSEE HAD INCURRED AN EXPENDITURE OF RS.54.54 LAKHS TO MAKE THE PROPERTY MARKETABLE; - THE CIT(A) ERRED IN NOT ENTERTAINING FRESH EVIDENCE SOUGHT TO BE PRODUCED BY THE ASSESSEE BY RELYING RULE 46A OF I.T.RULES; THAT THE CIT(A) OU GHT TO HAVE ADMITTED THE FRESH EVIDENCE AS HE HAD PROPOSED TO ENHANCE THE INCOME, WHOLLY IGNORING THAT SUCH ENHANCEMENT COULD BE MADE ONLY AFTER GIVING OPPORTUNITY TO THE ASSESSEE WHICH HE HAD FAILED TO DO SO; ITA NO.891/BANG/10 PAGE 5 OF 11 - THE CIT (A) FAILED TO NOTICE THAT THE AO HAD DISALLOWED RS.34.54 LAKHS AFTER A SPOT INSPECTION ON 18.10.08 AFTER VERIFYING THE WORK EXECUTED, CONDUCTING LOCAL ENQUIRIES AT THE SPOT; - HE HAD ERRED IN CONCLUDING THAT THE ASSESSEE HAD NOT INCURRED RS.20.30 LAKHS TOWARDS ERECTION OF COMPOUND WALL AS THE DETAILS OF DATES OF PAYMENT TO WORKERS DID NOT TALLY WITH SUBMISSION MADE BEFORE HIM ON 2.6.10 ETC. WITHOUT CONSIDERING THE COPY OF ACCOUNT FURNISHED BEFORE THE AO BY THE ASSESSEE VIDE HER LETTER DATED: 18.3.08 WHEREIN IT WAS CLEARLY SHOWN THAT THE SAID EXPENDITURE WAS INCURRED BY THE ASSESSEE S HUSBAND ON VARIOUS DATES AND LATER ON HIS ACCOUNT HAS BEEN CREDITED WITH THE NARRATION PAID FOR LAND DEVELOPMENT, DEMOLITION OF BUILDING AND COMPOUND WALL CHARGES . - ALSO ERRED IN CONCLUDING THAT RS.20 LAKHS PAID FOR EVICTION OF ILLEGAL OCCUPANTS OF THE PROPERTY AFTER THE SALE OF PROPERTY ON 8.2.07 TO DMR ENTERPRISES WITHOUT NOTICING THAT ON 13.2.07 THE ACCOUNT OF PRABHAKAR SHETTY (ASSESSEE S HUSBAND) WAS CREDITED RS.20 LAKHS BEING THE AMOUNT SPENT BY HIM ON BEHA LF OF THE ASSESSEE; - THAT THE CIT (A) ERRED TO APPRECIATE THAT RS.14.24 LAKHS WAS PAID TO SMT. VARALAKSHMI, W/O SHIVANANJAIAH WAS WHOLLY RELATED TO THE LAND WHICH WAS AGREED TO BE PURCHASED FROM HER HUSBAND. THIS AMOUNT AS PER AGREEMENT HAD TO BE SPENT BY SHIVANANJAIAH WHO HAD FAILED TO DISCHARGE HIS UNDERTAKING AS PER THE AGREEMENT AND, THUS, BORNE BY THE ASSESSEE; THAT THE SELLER WAS INTENTIONALLY DELAYING THE WORK UNDERTAKEN BY HIM, THE ASSESSEE HAD TO SPEND THE AMOUNT TO SALVAGE THE ADVANCE ALREADY PAI D TO THE SELLER OF THE LAND; - THAT THE CIT (A) HAD IGNORED THE FACT THAT IF THE EXPENSES OF RS.54.54 LAKHS WAS NOT ALLOWABLE AS NOT HAVING BEEN INCURRED WHOLLY SAND EXCLUSIVELY IN REGARD TO TRANSFER, THE SAME WAS ALLOWABLE AS THE COST OF THE ASSET TRANSFE RRED OR ALTERNATIVELY AS COST OF IMPROVEMENT OF THE ASSET; - THAT THE CIT (A) ERRED IN REJECTING THE EXPENDITURE OF RS.63 LAKHS AS COMMISSION PAID TO 31 AGENTS WHEREAS THE AO HAD DISALLOWED ONLY RS.20 LAKHS AFTER DUE ENQUIRIES U/S 133(6) OF THE ACT; - THAT THE CIT (A) ERRED IN NOT APPRECIATING THE EVIDENCE COLLECTED THROUGH BANK WHICH ESTABLISHED THAT THE PAYMENT OF RS.36.68 LAKHS TO THE AGENTS WERE THROUGH CROSSED CHEQUES AND THE PAYEES WERE IDENTIFIABLE AND THE BALANCE WAS BY OPEN CHEQUES. THE FACTS GATH ERED BY THE CIT(A) SHOW THAT THE PAYMENTS OF RS.63 LAKHS WERE FROM THE ASSESSEE S BANK ACCOUNT; THAT HE HAD FAILED TO APPRECIATE THE NEED TO ENGAGE THE SERVICES OF 31 AGENTS AS THE SALE HAD TO BE COMPLETED BY 24.3.07, OTHERWISE, THE ASSESSEE HAD TO FACE TH E RISK OF GETTING BACK THE ADVANCE OF RS.50 LAKHS PAID TO THE SELLER; & - THAT THE CIT (A) FAILED TO APPRECIATE THAT THE DISALLOWANCES MADE BY THE AO OF RS.34.54 LAKHS AND RS.20 LAKHS UNDER THE HEADS LAND DEVELOPMENT AND COMMISSION RESPECTIVELY WAS W ITH THE APPROVAL OF THE ADDL. CIT AS BOTH THE AUTHORITIES CONSIDERED THE DISALLOWANCE ADEQUATE ON THE FACTS OF THE CASE. 6.1. TO STRENGTHEN HIS ARGUMENT, THE LD. A.R FURNISHED A VOLUMINOUS PAPER BOOK CONTAINING 1 226 PAGES WHICH CONSIST OF, INTER A LIA, COPIES OF ITA NO.891/BANG/10 PAGE 6 OF 11 (I) AGREEMENT OF SALE DT.25.9.2006 WITH SHIVANANJAIAH; (II) AGREEMENT DT.7.2.2007 WITH DMR ENTERPRISES; (III) DEED OF ABSOLUTE SALE DEED AND CONVEYANCE DT.8.2.2007 WITH DMR ENTERPRISES AS CONFIRMING PARTY; (IV) CORRESPONDENCE WITH VARIOUS A UTHORITIES ETC., 6.2. ON THE OTHER HAND, THE LD. D R CAME UP WITH A SPIRITED ARGUMENT THAT THE LD. CIT(A) HAD, IN FACT, GATHERED ALL THE RELEVANT INFORMATION, ANALYZED THE SAME WITH REFERENCE TO THE ISSUES BEFORE HIM AT A GREATER LENGTH AND, FOR THE DETAILED REASONS RECORDED IN HIS FINDING WHICH IS UNDER SCRUTINY, CAME TO A CONCLUSION THAT (I) THE DISALLOWANCE OF RS.34.54 LAKHS OUT OF RS.54.54 LAKHS MADE BY THE AO WAS TO BE ENHANCED TO RS.54.54 LAKHS UNDER THE HEAD LAND DEVELOPMENT, LEVELING ETC ., AND (II) THE DISALLOWANCE OF THE COMMISSION PAYMENT OF RS.20 LAKHS MADE BY THE AO WAS TO BE ENHANCED TO RS.63 LAKHS UNDER THE HEAD COMMISSION . IT WAS EARNESTLY PLEADED BY THE LD. D R THAT AS THE FINDING OF THE LD. CIT (A) WAS BACKED WITH RELEVANT FACT S AND EVIDENCES WHICH REQUIRES NO INTERFERENCE BY THIS HON BLE BENCH AT THIS STAGE. 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS, THOROUGHLY PERUSED THE RELEVANT RECORDS AND ALSO THE DOCUMENTARY EVIDENCES PRODUCED BY THE LD. AR IN THE SHAPE OF A PAPER BOOK REFERRED SUPRA. 7.1. AT THE OUTSET, WE WOULD LIKE TO POINT OUT THAT THE ASSESSEE S ALLEGATION THAT THE CIT(A) ERRED IN NOT ADMITTING THE FRESH EVIDENCE SOUGHT TO BE PRODUCED BY THE ASSESSEE BEFORE HIM, RELYING ON RULE 46A OF I.T. RULES IS FOUND TO BE WANTING AS THE SAID RULE MAKES IT EXPLICIT THAT ITA NO.891/BANG/10 PAGE 7 OF 11 46A. (1) THE APPELLANT SHALL NOT BE ENTITLED TO PRODUCE BEFORE THE CIT(A) ANY EVIDENCE, WHETHER ORAL OR DOCUMENTARY, OTHER THAN THE EVIDENCE PRODUCED BY HIM DURING THE COURSE OF PROCEEDINGS BEFORE THE AO EXCEPT IN THE FOLLOWING CIRCUMSTANCES, NAMELY: - (A) WHERE THE AO HAS REFUSED TO ADMIT EVIDENCE WHICH OUGHT TO HAVE BEEN ADMITTED; OR (B) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING THE EVIDENCE WHICH HE WAS CALLED UPON TO PR ODUCE BY THE AO; OR (C) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING BEFORE THE AO ANY EVIDENCE WHICH IS RELEVANT TO ANY GROUND OF APPEAL; OR (D) WHERE THE AO HAS MADE THE ORDER APPEALED AGAINST WITHOUT GIVING SUFFICIENT OPPORTUNITY TO THE APPELLANT TO ADDUCE EVIDENCE RELEVANT TO ANY GROUND OF APPEAL 7.1.1. AS THE ASSESSEE HAD NOT BROUGHT ANY PROOF TO SUGGEST THAT (I) THE AO HAD REFUSED TO ADMIT, (II) THE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING THE SAME BEFORE THE AO; & (III) THE AO HAD MADE THE ORDER WITHOUT AFFORDING SUFFICIENT OPPORTUNITY TO THE ASSESSEE TO ADDUCE ANY EVIDENCE ETC., THE LD. CIT(A) WAS WITHIN HIS DOMAIN TO REFUSE TO ADMIT THE FRESH EVIDENCE SOUGHT TO BE PRODUCED BY THE ASSESSEE. 7.1.2. HOWEVER, I N THE INSTANT CASE, THE LD. CIT (A) HAD PROPOSED TO ENHANCE THE ADDITION OVER AND ABOVE THE ADDITIONS MADE BY THE LD. AO. IN SUCH CIRCUMSTANCES, THE PRINCIPLES OF NATURAL JUSTICE WARRANT THAT THE LD. CIT (A) SHOULD HAVE EXAMINED THE ADDITIONAL EVIDENCES ADVANCED BY THE ASSESSEE DURING THE COURSE OF APPELLATE PROCEEDINGS WHICH IS LACKING IN THIS CASE. 7.2. THE ASSESSEE S OTHER ALLEGATION THAT THE CIT(A) HAD NOT GIVEN PROPER OPPORTUNITY BEFORE RESORTING TO ENHANCEMENT OF THE ASSESSEE S INCOME IS ALSO FOUN D TO BE INCORRECT AS THE LD. CIT (A) VIDE HIS (COMMUNICATION) NOTICE U/S 251(2) OF THE ACT DATED: 25.3.2010 CALLED UPON THE ASSESSEE TO SHOW - CAUSE AS TO WHY THE DISALLOWANCE OF (I) RS.20 LAKHS ITA NO.891/BANG/10 PAGE 8 OF 11 (SIC) RS.34.54 LAKHS MADE BY THE AO ON ACCOUNT OF LAND DEVELO PMENT BE ENHANCED TO RS.54.54 LAKHS; AND (II) RS.20 LAKHS MADE BY THE AO ON ACCOUNT OF COMMISSION PAYMENTS SHOULD NOT BE ENHANCED TO RS.63 LAKHS AND THE ASSESSEE WAS REQUIRED TO EXPLAIN HER STAND ON THESE ISSUES BY 31.3.2010 [SOURCE: P 93 - 99 OF PB AR]. T HUS, IN OUR CONSIDERED VIEW, THE LD. CIT(A) HAD GIVEN PROPER OPPORTUNITY TO THE ASSESSEE BEFORE CONCLUDING THE APPELLATE PROCEEDINGS. 8. LET US NOW TURN OUR ATTENTION TO THE OTHER ISSUES RAISED BY THE ASSESSEE IN HER GROUNDS OF APPEAL. 8.1. WE HAVE DI LIGENTLY PERUSED THE IMPUGNED ASSESSMENT ORDER UNDER DISPUTE. FOR THE APPRECIATION OF FACTS, WE INDULGE IN TO REPRODUCE THE RELEVANT PORTION OF THE ORDER: 2. SHORT TERM CAPITAL GAINS ON SALE OF LANDS PURCHASED FROM LAKSHMI VENKATESH HAS BEEN OFFERED T O TAX. BESIDES, SURPLUS RECEIVED IN CONNECTION WITH THE LAND DEALINGS OF SHRI H.N.SHIVANANJIAH HAS BEEN DECLARED AS SHORT TERM CAPITAL GAINS. THE ASSESSEE, ALONG WITH SRI K. SUBRAMANYA RAI HAD ENTERED INTO AN AGREEMENT ON 25.9.2006 TO BUY THE LAND BELONGI NG TO SRI H.N. SHIVANANJIAH WHICH WAS LATER BOUGHT BY DMR ENTERPRISES ON 8.2.2007. THE ASSESSEE RECEIVED RS.3,97,11,130/ - CONSIDERATION AS ONE OF THE CONFIRMING PARTIES TO THE TRANSACTION. OUT OF THIS SUM, THE ASSESSEE HAS CLAIMED EXPENSES TOWARDS LAND DEVELOPMENT, DEMOLITION OF STRUCTURES, EVICTION EXPENSES AND COMMISSION TO PARTIES WHO ARRANGED FOR SALE IN ADDITION TO THE ADVANCE PAID TO THE LANDLORD. THE ASSESSEE IS NOT ABLE TO PRODUCE CONFIRMATION FROM THE PERSONS WHO CARRIED OUT THE WORK OF DEMOLIT ION, DEVELOPMENT, CONSTRUCTION OF COMPOUND, LEVELING AND EVICTION OF OCCUPANTS. CONSIDERING THE WORK ACTUALLY CARRIED OUT, A SUM OF RS.20 LAKHS IS TREATED AS REASONABLE. OUT OF THE COMMISSION OF RS.53 LAKHS PAID BY CHEQUES TO VARIOUS PERSONS, A SUM OF RS. 20 LAKHS IS TREATED AS EXCESSIVE. THIS LEAVES BALANCE OF RS.2,94,11,130/ - TAXABLE AS INCOME FROM THE TRANSACTION TO WHICH THE ASSESSEE S REPRESENTATIVE HAS CONSENTED. 8.2. THE ASSESSMENT ORDER, IT APPEARS, HAS BEEN FRAMED WITHOUT PROPER EXAMINATION O F THE FACTS THAT THE ASSESSEE HAD CLAIMED EXPENSES OF RS.54.54 LAKHS FOR LAND DEVELOPMENT, DEMOLITION OF BUILDING, LEVELING AND ERECTION OF COMPOUND WALL ETC., AND ALSO COMMISSION PAYMENTS TO THE AGENTS OF RS.63 LAKHS SINCE THE LD. AO HAD HIMSELF ADMI TTED THAT THE ITA NO.891/BANG/10 PAGE 9 OF 11 ASSESSEE IS NOT ABLE TO PRODUCE CONFIRMATION FROM THE PERSONS WHO CARRIED OUT THE WORK OF DEMOLITION, DEVELOPMENT, CONSTRUCTION OF COMPOUND, LEVELING AND EVICTION OF OCCUPANTS. CONSIDERING THE WORK ACTUALLY CARRIED OUT, A SUM OF RS.20 LAKHS IS TREATED AS REASONABLE. HOWEVER, THE AO HAD CONCLUDED THAT, CONSIDERING THE WORK ACTUALLY CARRIED OUT, THE EXPENSES TO THE TUNE OF RS.20 LAKHS WAS REASONABLE, WITHOUT RECORDING HIS REASONS FOR SUCH A FINDING. 8.3. THE ASSESSEE S CLAIM OF COMMISSI ON ALLEGED TO HAVE BEEN PAID TO THE AGENTS TO THE TUNE OF RS.63 LAKHS HAVE ALSO BEEN CONCEDED BY THE LD. AO TO THE EXTENT OF RS.43 LAKHS. WHILE DEALING WITH THIS ISSUE, THE AO MADE A MISTAKE IN MENTIONING THAT OUT OF THE COMMISSION OF RS.53 LAKHS PAID BY CHEQUES TO VARIOUS PERSONS, A SUM OF RS.20 LAKHS IS TREATED AS EXCESSIVE WHEREAS THE ASSESSEE HAS ALL ALONG BEEN CLAIMING THAT SHE HAD INCURRED EXPENDITURE TO THE TUNE OF RS.63 LAKHS UNDER COMMISSION PAYMENTS . THIS ISSUE ALSO HAS NOT BEEN PROPERLY DEALT WITH. 8.4. IN ORDER TO FACILITATE THE AO TO HAVE A FRESH LOOK AT THE ADDITIONAL EVIDENCES NOW IN POSSESSION OF THE ASSESSEE AND ALSO TO EXAMINE THE OBSERVATIONS MADE BY THE LD. CIT (A) IN HIS IMPUGNED ORDER UNDER DISPUTE, WE ARE OF THE UNANIMOUS VI EW THAT THE ISSUE SHOULD BE LOOKED INTO IN ITS ENTIRETY BY THE ASSESSING OFFICER WITH REFERENCE TO THE EVIDENCES ADVANCED BY THE ASSESSEE IN THE SHAPE OF CONFIRMATION LETTERS, AFFIDAVITS ETC., THE ENTIRE ISSUE IS REMITTED BACK ON THE FILE OF AO WITH A SPEC IFIC DIRECTION TO LOOK INTO THE ISSUE AFRESH AND TO TAKE APPROPRIATE ACTION IN ACCORDANCE WITH THE PROVISIONS OF THE ACT, OF COURSE, AFTER AFFORDING A REASONABLE OPPORTUNITY TO THE ASSESSEE OF BEING HEARD. IN THE MEANWHILE, ITA NO.891/BANG/10 PAGE 10 OF 11 THE ASSESSEE, THROUGH HER LD. A R, IS ADVISED TO FURNISH ALL THE RELEVANT PARTICULARS AT HER POSSESSION WHICH WOULD FACILITATE THE AO TO CARRY OUT THE DIRECTION OF THIS BENCH CITED SUPRA IN AN EXPEDITIOUS MANNER. IT IS ORDERED ACCORDINGLY. 9. WITH REGARD TO THE ADDITIONAL GROUND THAT T HE AO HAD NOT ALLOWED THE HOUSE LOAN INTEREST OF RS.5.58 LAKHS WHILE COMPUTING THE PROPERTY INCOME ETC., WE WOULD LIKE TO POINT OUT THAT THE ASSESSEE HAD NOT FURNISHED DETAILS DURING THE COURSE OF HEARING BEFORE US AND ALSO IT COULD NOT BE ASCERTAINED FR OM THE ASSESSMENT ORDER AS TO WHETHER THE ASSESSEE HAD RAISED THIS ISSUE DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND, IF SO, THE OUTCOME OF THE ASSESSEE S PLEA ETC. HOWEVER, THE ASSESSEE IS AT LIBERTY TO RAISE THIS ISSUE BEFORE THE AO DURING THE COURS E OF REASSESSMENT PROCEEDINGS. 10. IN THE RESULT , THE ASSESSEE S APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES . PRONOUNCED IN THE OPEN COURT ON THIS 28 TH DAY OF JANUARY, 2011 . SD/ - SD/ - ( SMT. P. MADHAVI DEVI ) ( A. MOHAN ALANKAMONY ) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 28 TH JANUARY, 2011 . DS/ - ITA NO.891/BANG/10 PAGE 11 OF 11 COPY TO: BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE. 1. APP EL LANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE