Pawan Kumar Bansal, Chandigarh V. ITO, W-4(5), Chandigarh

ITA 909/CHANDI/2018

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 6768 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 29-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N D GUPTA

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, SMC, CHANDIGARH , BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER ./ ITA NO. 909/CHD/2018 / ASSESSMENT YEAR : 2014-15 SH. PAWAN KUMAR BANSAL, SCO 171, SECTOR 38C, CHANDIGARH VS. THE ITO, WARD 4(5), CHANDIGARH ./PAN NO: ABJPB2545F / APPELLANT /RESPONDENT ! /ASSESSEE BY : SH. AJAY JAIN, ADVOCATE ' ! / REVENUE BY : SH. N.D. GUPTA, SR. DR # $ % /DATE OF HEARING : 19.12.2018 &'() % / DATE OF PRONOUNCEMENT : 19.12 .2018 / ORDER THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER DATED 24.4.2018 OF THE COMMISSIONER OF INCOM E TAX(APPEALS)-2, CHANDIGARH [HEREINAFTER REFERRED TO AS CIT(A)]. 2. THE SOLE DISPUTE RAISED IN THIS APPEAL IS REGARD ING THE TREATMENT OF THE HEAD OF THE INCOME OF RS. 16,50,000/-, WHETHER THE SAME FALLS UNDER THE HEAD CAPITAL GAINS OR INCOME FROM OTHER SOUR CES . 3. THE BRIEF FACTS RELATING TO THE ISSUE ARE THAT T HE ASSESSEE PURCHASED A HOUSE ON 28.2.2014 AT THE COST OF RS. 2.86 CRORES. HOWEVER, WITHIN A SHORT SPAN, THE ASSESSEE HAS SOLD THE AFORESAID HOUSE ON 18.3.2014 FOR A CONSIDERATION OF RS. 2.90 CRORES. IN THE INCOME TAX RETURN, THE ASSESSEE CLAIMED THAT IT HAD ALSO EARNED AN AMOUNT OF RS. 16 .50 LACS TOWARDS THE ITA NO. 909-CHD-2018- SH. PAWAN KUMAR BANSAL, CHANDIGARH 2 SALE OF DILAPIDATED SUPER STRUCTURE BRICKS AND OTHE R MATERIAL. THE PLEA OF THE ASSESSEE HAS BEEN THAT IN FACT THE ASSESSEE FI RSTLY SOLD THE DEPLICATED SUPER STRUCTURE FOR A SUM OF RS. 16.50 LACS AND THE REAFTER THE PLOT WAS SOLD VIDE SALE DEED DATED 18.3.2014. THAT THOUGH IN THE SALE DEED, THE NOMENCLATURE WAS MENTIONED AS HOUSE AS THE SAME WAS MENTIONED AS SUCH IN THE EARLIER PURCHASE DEED OF DATED 28.2.201 4. HOWEVER, THAT WAS REQUIRED TO BE MENTIONED SO DUE TO SOME TECHNICAL DIFFICULTY AS THE DETAIL OF THE PROPERLY HAS BEEN COMPUTERIZED IN THE OFFICE OF THE ESTATE OFFICER AND UNTIL AND UNLESS THERE IS SOME CHANGE IN THE RE CORD BROUGHT OUT BY SPECIFIC ORDERS, SUCH AS, BY WAY OF APPLYING FOR CH ANGE OF MAP ETC., THE DETAIL OF PROPERTY WILL REMAIN SUCH. IT HAS BEEN FU RTHER CONTENDED THAT SINCE THE SALE WAS EFFECTED WITHIN ONE MONTH OF THE DATE OF PURCHASE WHICH WAS TOO SHORT A PERIOD TO EFFECT THE CHANGE BROUGHT IN THE PROPERLY IN THE OFFICIAL RECORD, HENCE, OFFICE OF THE ESTATE OFFIC ER PICKED UP THE SAME DIMENSIONS INCLUDING COVERED AREA WHILE REGISTERING THE SALE DEED ON 18.3.2014. THE LD. ASSESSING OFFICER FURTHER HELD THAT SINCE IN THE SALE DEED WAS EFFECTED ON 18.3.2014, THE COVERED AREA WA S IDENTICALLY MENTIONED IN THE PURCHASE DEED DATED 28.2.2014, HEN CE, IT WAS DOUBTFUL THAT THE ASSESSEE HAD EARNED THE INCOME OF RS. 16.5 0 LACS FROM THE SALE OF DEPLICATED SUPER STRUCTURE OVER THE PROPERTY IN QU ESTION. SHE, THEREFORE, TREATED THE AFORESAID DECLARED INCOME OF RS. 16.50 LACS AS INCOME FROM OTHER SOURCES AND CHARGED TAX THEREUPON ACCORDINGL Y. 4. THE ASSESSEE UNSUCCESSFULLY CONTESTED THE MATTER BEFORE THE CIT(A). 5. BEFORE THIS TRIBUNAL, THE LD. COUNSEL FOR THE AS SESSEE HAS REITERATED THE CONTENTION AS WAS RAISED BEFORE THE LOWER AUTHO RITIES. ITA NO. 909-CHD-2018- SH. PAWAN KUMAR BANSAL, CHANDIGARH 3 6. ON THE OTHER HAND, THE LD. DR HAS RELIED ON THE FINDINGS OF THE LOWER AUTHORITIES AND HAS FURTHER SUBMITTED THAT, EVEN OT HERWISE, THE ASSESSEE HAD NOT RECEIVED THE AFORESAID PAYMENT OF RS. 16.50 LAC S THROUGH BANKING CHANNEL, RATHER, THE SAME WAS SHOWN TO BE RECEIVED IN CASH, THEREFORE, THE ASSESSEE HAS FAILED TO PROVE THAT THE AFORESAID REC EIPT WAS ON ACCOUNT OF SALE OF DEBRIS. 7. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE GONE THROUGH THE RECORD. ADMITTEDLY, THE HOUSE IN QUESTION WAS SOLD WITHIN THE PERIOD OF 18 DAYS FROM THE DATE OF PURCHASE. IT CAN SAFELY BE AS SUMED THAT SUCH TYPE OF SALE IN SHORT SPAN OF TIME IS GENERALLY DONE TO EAR N PROFIT / APPRECIATION IN PRICE. THE PLEA OF THE ASSESSEE IS THAT AFTER PURCH ASE OF THE PROPERTY IN QUESTION, HE FIRSTLY SOLD THE SUPER STRUCTURE / DEB RIS AND THEREAFTER SOLD THE VACANT PLOT AND THEREBY HE NOT ONLY EARNED A SUM OF RS. 16.50 LACS FROM THE DEBRIS BUT ALSO A GAIN OF RS. 4 LACS FROM THE S ALE OF THE PROPERLY IN QUESTION. HOWEVER, AFTER EXCLUDING THE STAMP DUTY CHARGE AND OTHER EXPENSES NET GAIN EARNED BY THE ASSESSEE IS OF RS. 6 LACS. THE ASSESSEE HAS ALSO GIVEN A REASONABLE EXPLANATION THAT SINCE THE SALE DEED WAS AFFECTED ONLY AFTER 18 DAYS OF THE DATE OF PURCHASE, HENCE, UNDER THE CIRCUMSTANCES, THE DETAILS REGARDING AFFECTING THE CHANGES, REMOVA L OF THE SUPER STRUCTURE WERE NOT INCORPORATED IN THE RECORDS OF THE ESTATE OFFICE. ANOTHER FACT ON THE FILE IS THAT THE ASSESSING OFFICER HAD NO EVIDE NCE OF RECEIPT OF ANY INCOME BY THE ASSESSEE FROM ANY OTHER SOURCE. IT W AS ONLY WHEN THE ASSESSEE DECLARED THE AFORESAID RECEIPT OF RS. 16. 50 LACS, THAT THE ASSESSING OFFICER TREATED THE SAME AS INCOME FROM OTHER SOURCES. IF THE ABOVE TREATMENT OF THE ASSESSING OFFICER FOR THE S AKE OF ARGUMENTS IS TAKEN ITA NO. 909-CHD-2018- SH. PAWAN KUMAR BANSAL, CHANDIGARH 4 AS CORRECT, THEN, THE RESULTANT EFFECT WILL BE THAT THE ASSESSEE WOULD HAVE SOLD THE HOUSE IN QUESTION AT A LOSS AFTER INCLUDIN G THE STAMP DUTY CHARGES INTO THE PURCHASE PRICE OF THE HOUSE AT RS. 2.86 CR ORES. GENERALLY, A PRUDENT MAN WILL NOT SALE A PROPERTY WITHIN 18 DAYS OF PURCHASE AT A LOSS. THE ASSESSEE HAS SHOWN A REASONABLE GAIN OF RS. 6 L ACS UPON THE AFORESAID PROPERLY SOLD WITHIN 18 DAYS OF THE PURCHASE. MOREO VER, THE ASSESSING OFFICER DID NOT MAKE ANY INQUIRY BY SENDING ANY INS PECTOR ETC. TO SEE THE ACTUAL POSITION OF THE PROPERTY WHICH HE MAY HAVE CONVENIENTLY VERIFIED. UNDER THE CIRCUMSTANCES, IT WOULD BE UNREASONABLE T O ASSUME THAT THE ASSESSEE HAD EARNED THE AFORESAID INCOME OF RS. 16. 50 LACS AS INCOME FROM OTHER SOURCES. I DO NOT FIND ANY JUSTIFICATION ON THE PART OF THE LOWER AUTHORITIES IN TAKING THE ABOVE AMOUNT OF RS. 16.50 LACS UNDER THE HEAD INCOME FROM OTHER SOURCES INSTEAD OF TAKING IT AS PART OF THE CAPITAL GAIN RECEIVED BY THE ASSESSEE. THEREFORE, THE ORDER OF T HE LOWER AUTHORITIES IN TREATING THE AFORESAID ADDITION OF RS. 16.50 LACS A S INCOME FROM OTHER SOURCES IS NOT TENABLE AND THE SAME IS SET ASIDE. THE ASSESSING OFFICER IS DIRECTED TO TREAT THE AMOUNT OF RS. 16.50 LACS AS PART OF THE CAPITAL GAINS EARNED BY THE ASSESSEE. THE APPEAL OF THE ASSESSEE IS ACCORDINGLY ALLOWED. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS AL LOWED. ORDER DICTATED AND PRONOUNCED IN THE OPEN COURT IMM EDIATELY ON COMPLETION OF HEARING. ( / SANJAY GARG) / JUDICIAL MEMBER DATED : 19.12. 2018 .. ITA NO. 909-CHD-2018- SH. PAWAN KUMAR BANSAL, CHANDIGARH 5 '+ ,- .- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. # / / CIT 4. # / ( )/ THE CIT(A) 5. -01 2 , % 2 , 34516 / DR, ITAT, CHANDIGARH 6. 15 7$ / GUARD FILE '+ # / BY ORDER, 8 ' / ASSISTANT REGISTRAR