Shri Sanat Roy Chowdhury, Kolkata V. JCIT, RG-2, HOOGHLY, Hooghly

ITA 918/KOL/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9310 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 8 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-03-2017
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Next Hearing Date: 01-12-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 22-06-2015
• Court: TRIBUNAL
• Department Lawyers: RAJENDRA PRASAD
• Assessee Lawyers: S M SURANA
• Keywords: Sale consideration of property below Jantri Value; Cost of acquisition
• Section: 50C

Judgement Text

ITA NO.918/KOL/2015-SHRI SANAT ROY CHOWDHURY A.Y.20 08-09 1 IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA BEFORE HONBLE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI S.S.VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A. NO.918/KOL/2015 ASSESSMENT YEAR : 2008-09 SHRI SANAT ROY CHOWDHURY, C/O V.N.PUROHIT & CO., CHARTERED ACCOUNTANTS, DIAMOND CHAMBERS, UNIT-III, 4 TH FLOOR, SUIT NO.4G, 4, CHOWRINGHEE LANE, KOLKATA-700016. PAN : ADGPR 7343 N V/S . J.C.I.T., RANGE- 2,(HOOGHLY) AAYAKAR BHAWAN, G.T.ROAD, CHINSHURA, HOOGHLY PIN:712 101. /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI S.M.SURANA, ADVOCATE /BY RESPONDENT SHRI RAJENDRA PRASAD, JCIT /DATE OF HEARING 11.01.2017.. /DATE OF PRONOUNCEMENT 03.03.2017. / O R D E R PER WASEEM AHMED, AM THIS APPEAL BY THE ASSESSEE IS AGAIN ST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-6, KOLKATA DATED 23.03.2015. A SSESSMENT WAS FRAMED BY J.C.I.T., RANGE-2, HOOGHLY U/S 147/143(3) OF THE IN COME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ) VIDE HIS OR DER DATED 28.03.2013 FOR ASSESSMENT YEAR 2008-09. 2. THE 1 ST ISSUE RAISED BY ASSESSEE IN THIS APPEAL IS THAT LE ARNED CIT-A ERRED IN CONFIRMING THE ORDER OF AO BY HOLDING THE ASSESS EES SHARE IN THE IMPUGNED PROPERTY AT RS. 22,25,225.00. ITA NO.918/KOL/2015-SHRI SANAT ROY CHOWDHURY A.Y.20 08-09 2 3. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IN T HE PRESENT CASE IS AN INDIVIDUAL AND HAS DECLARED ITS INCOME UNDER THE HEAD CAPITAL GAIN. THE ASSESSEE WAS ONE OF THE JOINT OWNER IN THE PROPERTIES LOCATED AT 11/ 10A & 10B, S.C. CHATTERJEE STREET, KONNAGAR HOOGHLY. THE SHARE IN THE PROPERTY WAS SOLD BY THE ASSESSEE ALONG WITH THE OTHER OWNERS FOR RS. 16,50,000.00 WH ICH WAS REGISTERED AT THE OFFICE OF ADSR, SERAMPORE VIDE ENTRY IN THE BOOK NU MBER-I, CD VOLUME NO. 2 PAGES FROM 2337 TO 2357 BEING DEED NO. 00938 DATED 15-2-2008 AS DETAILED BELOW : S.NO. NAMES OF THE OWNERS SHARE IN THE PROPERTY S ALE PROCEEDS 1. SANAT ROY CHOWDHURY 8.58% 2,50,000.00 (ASSESSEE) 2. SAMAR ROY CHOWDHURY 8.58% 2,50,000.00 3. NIKHIL ROY CHOWDHURY 8.58% 2,50,000.00 4. SMT. CHHANDA ROY CHOWDHURY 76.26% 9,00,000.00 HOWEVER THE AO DURING ASSESSMENT PROCEEDINGS DISCOV ERED THAT THERE IS 6 STORIED BUILDING ON SUCH LAND CONSISTING OF 25 FLAT S AND 20 SHOPS WHICH WAS NOT SHOWN AT THE TIME OF REGISTRY OF THE LAND. THE REGI STRY WAS MADE BY THE AFORESAID JOINT OWNERS BY SHOWING THE IMPUGNED PROPERTY AS VA CANT LAND. AS THE ASSESSEE ALONG WITH OTHER JOINT OWNERS AND PURCHASERS OF THE IMPUGNED PROPERTY HAS COMMITTED FRAUD ON THE GOVERNMENT REVENUE THEREFORE FIR WAS FILED BY ADDITIONAL DISTRICT SUB REGISTRAR AGAINST ALL THE P ERSONS. FINALLY THE PROPERTY WAS VALUED FOR THE STAMP DUTY PURPOSE AT RS. 2,59,35,020.00 BY THE REGISTERING AUTHORITY. ACCORDINGLY THE AO CA LLED UPON ASSESSEE TO PUT FORTH HIS SUBMISSION IF ANY WITH REGARD TO THE VALUATION OF THE IMPUGNED PROPERTY. IN COMPLIANCE THERE TO THE ASSESSEE SUBMITTED THAT HE IS THE OWNER OF THE LAND AND NOT OF THE BUILDING. THE ENTIRE INVESTMENT IN THE C ONSTRUCTION OF THE BUILDING WAS MADE ONLY BY MR. SAMAR ROY CHOWDHURY. THE REGISTERI NG AUTHORITY HAS VALUED ITA NO.918/KOL/2015-SHRI SANAT ROY CHOWDHURY A.Y.20 08-09 3 THE LAND AT RS. 16,50,000.00 ONLY AND HIS SHARE IN THE LAND IS LIMITED TO 8.58% ONLY OUT OF WHICH HIS SHARE IN MONETARY TERMS COMES TO RS.1,47,570.00 ONLY. HOWEVER THE AO DISREGARDED THE SUBMISSION OF THE AS SESSEE BY OBSERVING THAT IT IS NOT POSSIBLE TO SALE THE LAND WITHOUT THE BUILDI NG. MOREOVER CRIMINAL PROCEEDINGS WERE INITIATED AGAINST THE PARTIES TO D UPE THE REVENUE. THE REGISTRY WAS MADE IN FAVOUR OF PURCHASERS FOR THE ENTIRE BUI LDING AND THERE WAS NO SEPARATE REGISTRATION DEED FOR THE LAND ALONE. ACCO RDINGLY THE AO WORKED OUT THE SHARE OF THE ASSESSEE IN THE SALE CONSIDERATION FOR RS. 22,25,225.00 BEING 8.58% ON RS. 2,59,35,020.00. 4. ASSESSEE PREFERRED AN APPEAL TO LEARNED CIT- A. THE ASSESSEE BEFORE THE LEARNED CIT-A SUBMITTED THAT ALL THE SELLERS OF THE IMPUGNED PROPERTY BELONG TO A FAMILY BEING BROTHERS AND MOTHER. AS PER THE UNDERS TANDING BETWEEN ALL THE MEMBERS OF THE FAMILY MR. SAMAR ROY CHOWDHURY DEVEL OPED THE BUILDING AT HIS OWN COST AND EXPENSES. THERE WAS CLEAR UNDERSTANDIN G BETWEEN THE MEMBERS THAT THE BUILDING EXCLUSIVELY BELONGS TO MR. SAMAR ROY CHOWDHURY. THEREFORE THE ASSESSEE IS LIABLE TO PAY THE CAPITAL GAIN ARISING OUT OF THE TRANSFER OF SALE OF LAND. HOWEVER THE LEARNED CIT-A EXPRESSED HIS UNWILLINGNE SS TO ACCEPT THE ARGUMENT OF THE ASSESSEE AND CONFIRMED THE ORDER OF AO BY OB SERVING AS UNDER : 4.5 ASSESSEE AND HIS FAMILY MEMBERS IN CONNIVANCE WITH EACH OTHER HAD TRIED TO DEFRAUD THE STATE GOVERNMENT FROM THE LEGITIMATE STAMP DUTY . AS WELL AS LT. DEPARTMENT BY NOT EXPLAINING THE SOURCE OF INVESTMENT, AS WELL AS NOT PAYING LEGITIMATE TAX. AFTER BEING CAUGHT BY THE REGISTERING AUTHORITY REGARDING NON-D ISCLOSURE OF THE BUILDING ON LAND, WHILE REGISTERING THE ASSESSEE AND HIS FAMILY MEMBERS HAV E COME UP WITH THE PLEA OF NOMINAL INVESTMENT BY ONE FAMILY MEMBER (SAMAR ROY CHOWDHUR Y), WHICH WAS CLAIMED AS HIS CONTRIBUTION AS PARTNERSHIP CAPITAL. THAT IT IS AN AFTER THOUGHT IS EVIDENT FROM THE CONDUCT DURING THE REGISTERING PROCESS, WHEN THE VERY EXIST ENCE OF BUILDING WAS SUPPRESSED. FURTHER. NO EVIDENCE AT ALL HAS BEEN PRODUCED TO SU BSTANTIATE HOW ONE CO-OWNER CAN CLAIM ENTIRE OWNERSHIP OF BUILDING WITHOUT ANY WRIT TEN AGREEMENT OR OTHER EVIDENCE TO THAT EFFECT, WHEREAS ALL THE CO-OWNERS BECOME JOINT OF O WNER OF THE BUILDING IN THEIR PROPORTIONATE SHARE, AS PER THEIR SHARE IN OWNERSHI P OF LAND, IF NO EVIDENCE TO THE CONTRARY IS PRODUCED. THIS IS THE SHARE OF PROPERTY SOLD WHI CH HAS BEEN ACCEPTED BY A.O. WHILE COMPUTING CAPITAL GAINS. IN VIEW OF THE ABOVE FACTS WHICH HAS CLEARLY BEEN B ROUGHT OUT BY A.O. IN HIS ORDER WHICH CLEARLY POINTS OUT TO UNDER VALUATION, TO AVOID PAY MENT OF TAX UNDER THE HEAD CAPITAL GAINS, A.O.'S DETERMINATION OF INCOME UNDER THE HEAD CAPIT AL GAINS UNDER SECTION 50C IS ACCEPTED. ITA NO.918/KOL/2015-SHRI SANAT ROY CHOWDHURY A.Y.20 08-09 4 5. BEING AGGRIEVED BY THE ORDER OF LEARNED CIT-A ASSESSEE IS IN 2 ND APPEAL BEFORE US. THE LEARNED AR BEFORE US FILED PAPER BOO KS ALONG WITH SUPPLEMENTARY PAPER BOOK WHICH ARE RUNNING FROM PAGES 1 TO 134. T HE LEARNED AR BEFORE US SUBMITTED THAT INDEED THE BUILDING WAS CONSTRUCTED ON THE LAND BUT IT ONLY BELONGED TO MR. SAMAR ROY CHOWDHURY AND ASSESSEE HA S NO CONNECTION EITHER DIRECTLY OR INDIRECTLY WITH THE IMPUGNED BUILDING. THE LEARNED AR IN SUPPORT OF HIS CLAIM HAS SUBMITTED THE DEED OF PARTNERSHIP BETWEEN THE DEVELOPER AND MR. SAMAR ROY CHOWDHURY WHICH IS PLACED ON PAGES 22 TO 29 OF THE PAPER BOOK. THE LEARNED AR BEFORE US PRAYED TO RESTORE THE MATT ER TO THE FILE OF AO FOR FRESH ADJUDICATION AS MANY ASPECTS OF THE CASE HAVE NOT B EEN CONSIDERED BY THE LOWER AUTHORITIES. ON THE CONTRARY THE LEARNED AR RAISED NO OBJECTION IF THE MATTER IS LEASED ORDER TO THE AO. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERU SED THE MATERIALS AVAILABLE ON RECORD. THE ISSUE IN THE INSTANT CASE RELATES TO TH E SALE OF LAND BUT THE LOWER AUTHORITIES HAVE HELD THAT THE LAND WAS SOLD ALONG WITH THE BUILDING. THE LEARNED AR CLAIMED THAT THE ASSESSEE IN THE INS TANT CASE IS THE OWNER OF THE LAND ONLY AND HE HAS NO CONNECTION WITH THE BUILDIN G CONSTRUCTED ON SUCH LAND. AS PER THE ASSESSEE THE BUILDING WAS CONSTRUCTED BY THE CO-OWNER MR. SAMAR ROY CHOWDHURY. HOWEVER NO DOCUMENTARY EVIDENCE WAS SUBMITTED BEFORE THE LOWER AUTHORITIES IN SUPPORT OF ASSESSEES CLAIM. H OWEVER THE ASSESSEE HAS CLAIMED TO HAVE FILED SEVERAL DOCUMENTS BEFORE THE LOWER AUTHORITIES WHICH ARE PLACED IN THE PAPER BOOKS. BESIDES THE LEARNED AR H AS ALSO CHALLENGED THE VALUATION MADE BY THE LOWER AUTHORITIES FOR THE PUR POSE OF WORKING OUT THE CAPITAL GAIN UNDER SECTION 50C OF THE ACT. ON EXAMINATION O F THE ORDER OF LOWER AUTHORITIES WE FIND THAT THE ARGUMENT OF THE ASSESS EE THAT HE HAS NO CONNECTION WITH THE BUILDING EITHER DIRECTLY OR INDIRECTLY HAS NOT BEEN ADJUDICATED IN THE ABSENCE OF DOCUMENTARY EVIDENCE. HOWEVER IN OUR VIE W THE LOWER AUTHORITIES BEFORE REACHING TO THE CONCLUSION SHOULD HAVE CROSS VERIFIED THE CONTENTION OF THE ASSESSEE FROM MR. SAMAR ROY CHOWDHURY WHICH THEY FA ILED TO DO SO. THEREFORE ITA NO.918/KOL/2015-SHRI SANAT ROY CHOWDHURY A.Y.20 08-09 5 IN THE INTEREST OF JUSTICE AND FAIR PLAY WERE INCL INED TO GIVE ONE MORE OPPORTUNITY TO THE ASSESSEE TO SUBMIT HIS ARGUMENTS WITH DOCUME NTARY EVIDENCE TO JUSTIFY HIS CLAIM. HENCE WE RESTORE THIS GROUND OF APPEAL OF TH E ASSESSEE TO THE AO FOR FRESH ADJUDICATION IN ACCORDANCE WITH THE LAW AND I N THE LIGHT OF ABOVE IS STATED DISCUSSION. THUS THE GROUND OF APPEAL RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. THE 2 ND ISSUE RAISED BY ASSESSEE IN THIS APPEAL IS THAT LE ARNED CIT-A ERRED IN THE WORKING OF INDEXED COST OF ACQUISITION OF THE LAND/ PROPERTY UNDER SECTION 48 OF THE ACT SOLD BY THE ASSESSEE. AT THE OUTSET WE FIND THAT THE LEARNED AR PRAYED TO THE BENCH TO RESTORE THE FILE TO AO FOR FRESH ADJUDICATION AND ON THIS LEARNED DR RA ISED NO OBJECTION. AS WE HAVE ALREADY RESTORED THE GROUND NUMBER 1 IN THE INSTANT CASE TO THE AO FOR FRESH ADJUDICATION, THEREFORE WERE INCLINED TO RESTORE T HIS ISSUE ALSO TO THE FILE OF AO FOR FRESH ADJUDICATION IN ACCORDANCE WITH THE LAW. HENC E THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. IN THE RESULT THE APPEAL BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT /03/2017 ( ') ( ') (S.S.VISWANETHRA RAVI) (WASEE M AHMED) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) *RG.SR.PS $- /03 //201 7 ITA NO.918/KOL/2015-SHRI SANAT ROY CHOWDHURY A.Y.20 08-09 6 / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. / 2 / CONCERNED CIT 4. 2- / CIT (A) 5. 5 /, /, KOLKATA / DR, ITAT, KOLKATA 6. ; / GUARD FILE. BY ORDER/ , / /,