ITO, Ward 1(3), Jalna V. Shri Radhesham Ramnarayan Rathi, Jalna

ITA 981/PUN/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6722 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 06-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S P WALIMBE
• Assessee Lawyers: PARIKSHIT S KABRA
• Keywords: Sale consideration of property below Jantri Value; Additional evidence
• Section: 50C; 147; 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHE B, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO.981/PN/2013 (ASSESSMENT YEAR : 2007-08) INCOME TAX OFFICER, WARD 1 (3), JALNA. . APPELLANT VS. SHRI RADHESHAM RAMNARAYAN RATHI, MANOJ AGENCIES, NEW MONDHA, JALNA. PAN : ABBPR3463J . RESPONDENT C.O. NO.54/PN/2014 (ARISING OUT OF ITA NO.981/PN/2013) (ASSESSMENT YEAR : 2007-08) SHRI RADHESHAM RAMNARAYAN RATHI, C/O BANSILAL KABRA, 20, AMBIKA MARKET, JALNA 431 203. PAN : ABBPR3463J . CROSS OBJECTOR VS. INCOME TAX OFFICER, WARD 1 (3), JALNA. . APPELLANT IN APPEAL DEPARTMENT BY : SHRI S. P. WALIMBE ASSESSEE BY : SHRI PARIKSHIT S. KABRA DATE OF HEARING : 05-05-2014 DATE OF PRONOUNCEMENT : 20-05-2014 ORDER PER G. S. PANNU, AM THE CAPTIONED APPEAL BY THE REVENUE AND THE CROSS- OBJECTION BY THE ASSESSEE IS DIRECTED AGAINST AN ORDER OF THE COMMIS SIONER OF INCOME TAX (APPEALS), AURANGABAD DATED 15.02.2013 WHICH, IN TU RN, HAS ARISEN FROM AN ORDER DATED 15.12.2011 PASSED BY THE ASSESSING OFFI CER U/S 144 R.W.S. 147 OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT) PERTAINING TO THE ASSESSM ENT YEAR 2007-08. ITA NO.981/PN/2013 C.O. NO.54/PN/2014 2. ALTHOUGH, THE REVENUE HAS RAISED MULTIPLE GROUND S OF APPEAL BUT THE SOLITARY ISSUE RAISED IN THIS APPEAL IS RELATING TO THE ACTION OF THE CIT(A) IN DELETING AN ADDITION OF RS.36,43,600/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF LONG TERM CAPITAL GAINS. 3. IN BRIEF, THE RELEVANT FACTS ARE THAT ASSESSEE I S AN INDIVIDUAL ENGAGED IN THE BUSINESS OF DISTRIBUTOR AND TRADING AS GENERAL MERCHANTS. FOR THE ASSESSMENT YEAR 2007-08, HE FILED A RETURN OF INCOM E DECLARING TOTAL INCOME OF RS.1,00,390/- WHICH WAS PROCESSED U/S 143(1) OF THE ACT ON 11.03.2008. HOWEVER, THE ASSESSING OFFICER REOPENED THE ASSESSM ENT BY ISSUANCE OF NOTICE U/S 148 OF THE ACT DATED 08.02.2011 ON THE G ROUND THAT CERTAIN INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. AS PER T HE ASSESSING OFFICER, ASSESSEE HAD FAILED TO DECLARE CAPITAL GAIN ON SALE OF PLOT OF LAND AT SURVEY NO.4076, MUNICIPAL PROPERTY NO.1-28-76, MANTHA ROAD , JALNA FOR A TOTAL CONSIDERATION OF RS.21,00,000/-. IN THE SUBSEQUENT ASSESSMENT FINALIZED U/S 144 R.W.S. 147 OF THE ACT DATED 15.12.2011, THE ASS ESSING OFFICER HAS RELIED UPON A SALE-DEED DATED 25.07.2006 WHEREBY IT HAS BE EN HELD THAT ASSESSEE SOLD THE AFORESAID LAND FOR A TOTAL CONSIDERATION O F RS.21,00,000/-. FURTHER, AS PER THE ASSESSING OFFICER, THE VALUE OF THE SAID LA ND FOR THE PURPOSES OF STAMP DUTY VALUATION WAS RS.36,43,000/- AND THEREFORE HE INVOKED THE PROVISIONS OF SECTION 50C OF THE ACT AND COMPUTED THE TOTAL LONG TERM CAPITAL GAIN OF RS.36,43,000/-, WHICH WAS ADDED TO THE ORIGINALLY R ETURNED INCOME OF RS.1,00,390/-. 4. IN APPEAL, THE ASSESSEE BROADLY CONTENDED THAT H E WAS NOT THE OWNER OF THE LAND SOLD AND IN-FACT HE WAS ONLY A GENERAL POWER OF ATTORNEY (GPA) HOLDER FOR THE SPECIFIC PURPOSE OF EXECUTING THE SA LE-DEED DATED 25.07.2006 IN FAVOUR OF THE PURCHASERS OF LAND I.E. SHRI DEEPAK K UNDANLAL RATHI AND SHRI SHIVRATAN MOTILAL RATHI WHEREAS THE SELLER WAS SHRI PAWANKUMAR BHAVARILAL AGRAWAL. IN SUPPORT OF THE SAME, ASSESSEE FURNISHE D THE FOLLOWING : (I) COPY OF ITA NO.981/PN/2013 C.O. NO.54/PN/2014 REGISTERED SALE-DEED OF LAND DATED 25.07.2006; (II) COPY OF REGISTER MAINTAINED BY THE GOVERNMENT AUTHORITIES; (III) COPY OF THE GP A DATED 25.07.2006 GIVEN TO ASSESSEE BY THE OWNER OF THE LAND, SHRI PAWANKUMAR BHAVARILAL AGRAWAL; (IV) COPY OF AFFIDAVITS OF THE PURCHASERS OF LAND, SHRI DEEPAK KUNDANLAL RATHI AND SHRI SHIVRATAN MOTILAL RATHI DATED 25.07.2006; (V) COPY OF COURT DECREE DATED 30.10.2003 AND COMPROMISE DECREE OF THE COURT DATED 10.11.2003 IN RESPECT OF THE DISPUTE BETWEEN THE PURCHASERS OF THE LAND A ND THE OWNER/SELLER OF THE LAND, SHRI PAWANKUMAR BHAVARILAL AGRAWAL. ON THE B ASIS OF THE AFORESAID, ASSESSEE SUBMITTED THAT THE OWNER OF THE LAND I.E. SHRI PAWANKUMAR BHAVARILAL AGRAWAL WAS THE SELLER AND THAT ASSESSEE WAS MERELY A GPA HOLDER FOR SPECIFIC PURPOSE OF EXECUTING THE SALE-DEED DAT ED 25.07.2006. THE CIT(A) NOTED THAT THE ASSESSMENT PROCEEDINGS WERE COMPLETE D EX-PARTE U/S 144 OF THE ACT AND THEREFORE HE FURNISHED THE SUBMISSIONS OF THE ASSESSEE AND OTHER MATERIAL RELIED UPON BY THE ASSESSEE TO THE ASSESSI NG OFFICER FOR HIS COMMENTS. THE CIT(A) HAS DULY CONSIDERED THE COMME NTS OF THE ASSESSING OFFICER FURNISHED AND HAS THEREAFTER CONSIDERED THE REPLIES OF THE ASSESSEE. AFTER CONSIDERING THE STAND OF THE ASSESSING OFFICE R AS WELL AS THE MATERIAL ON RECORD, THE CIT(A) HAS COME TO A CONCLUSION THAT TH ERE WAS NO EVIDENCE TO SUGGEST THAT THE IMPUGNED LAND WAS EVER PURCHASED, OWNED OR SOLD BY THE ASSESSEE. ACCORDINGLY, HE HELD THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN ASSESSING THE CAPITAL GAINS OF RS.36,43,000/- IN TH E HANDS OF THE ASSESSEE. AGAINST SUCH DECISION OF THE CIT(A), REVENUE IS IN APPEAL BEFORE US. 5. BEFORE US, THE LEARNED DEPARTMENTAL REPRESENTATI VE RELIED UPON THE STAND OF THE ASSESSING OFFICER AS MANIFESTED IN THE REMAND REPORT DATED 31.12.2002 FURNISHED TO THE CIT(A). ACCORDING TO T HE LEARNED DEPARTMENTAL REPRESENTATIVE, THE ASSESSING OFFICER HAD RIGHTLY A SSERTED BEFORE THE CIT(A) THAT ENTIRE SET OF DOCUMENTS FURNISHED BEFORE THE C IT(A) WERE AN AFTERTHOUGHT AND THE SAME WERE NOT BEFORE THE ASSESSING OFFICER DURING THE ASSESSMENT ITA NO.981/PN/2013 C.O. NO.54/PN/2014 PROCEEDINGS. ON THE SAID BASIS, THE ORDER OF THE C IT(A) IS SOUGHT TO BE ASSAILED. 6. WE HAVE CAREFULLY CONSIDERED THE OBJECTIONS RAIS ED BY THE REVENUE IN THE CONTEXT OF THE FINDINGS OF THE CIT(A) WHICH ARE TO THE EFFECT THAT ASSESSEE WAS NEVER THE OWNER OF THE PLOT OF LAND IN QUESTION AND THAT HE WAS ONLY A GPA HOLDER FOR SPECIFIC PURPOSE AS IS EVIDENT FROM THE STAND OF SHRI PAWANKUMAR BHAVARILAL AGRAWAL, WHO IS THE OWNER-SEL LER. THE FOLLOWING FACTUAL FINDINGS MADE BY THE CIT(A) ARE RELEVANT :- I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE AND RIVAL CONTENTIONS. ON PERUSAL OF THE SAME, IT HAS BEEN NOTICED THAT TH E SAID LAND ADMEASURING 984.55 SQ.MTRS. AT MANTHA ROAD, JALNA HAS BEEN TRAN SFERRED BY SHRI PAWANKUMAR BANWARILAL AGRAWAL RESIDING AT BANJARA H ILL ROAD NO.12, HYDERABAD (AP) TO SHRI DEEPAK KUNDANLAL RATHI, SHRI SHIVRATAN MOTILALJI RATHI RESIDING AT JALNA ON 28/08/2003 BY ENTERING INTO A NOTARIZED AGREEMENT AND GIVING POSSESSION OF THE SAID LAND AFTER RECEIVING SUBSTANTIAL CONSIDERATION. IN RESPECT OF THE SAID LAND, THE SALE DEED DATED 25/07 /2006 HAS BEEN ENTERED INTO BETWEEN SHRI PAWANKUMAR BANWARILAL AGRAWAL, SE LLER AND SHRI DEEPAK KUNDANLAL RATHI, SHRI SHIVRATAN MOTILALJI RATHI, PU RCHASERS. IT HAS ALSO BEEN NOTICED THAT SHRI RADHESHAM RAMNARAYAN RATHI (APPEL LANT) IS ONLY A GPA HOLDER FOR SPECIFIC PURPOSE MENTIONED IN THE GPA DA TED 25/07/2006. THE APPELLANT, SHRI RADHESHAM RATHI HAS NEVER OWNED THE SAID PLOT OF LAND. THE A.O. HAS NOT BROUGHT ON RECORD OR POINTED OUR ANY E VIDENCE TO HOLD THAT THE APPELLANT HAS PURCHASED AND SOLD THE IMPUGNED PLOT OF LAND AND HENCE QUESTION OF TAXING CAPITAL GAIN ON TRANSFER OF THE SAID PLOT IN THE HANDS OF THE APPELLANT DOES NOT ARISE. 10. IN FACT, THOUGH THERE IS NO EVIDENCE THAT THE APPELLANT HAS PURCHASED THE IMPUGNED PROPERTY FROM SHRI PAWANKUMA R BANWARILAL AGRAWAL AND HAS SOLD THE SAME TO SHRI DEEPAK KUNDANLAL RATH I AND SHRI SHIVRATAN MOTILALJI RATHI, THE A.O. HAS HELD THAT THE APPELLA NT HAS SOLD THE IMPUGNED PROPERTY AND HAS EARNED CAPITAL GAIN. IN THE REPORT DATED 31/12/2012, THE A.O. HAS TRIED TO JUSTIFY THE ASSESSMENT MADE U/S 144 OF THE ACT WHEREIN IT HAS B EEN HELD THAT THE APPELLANT HAS SOLD THE IMPUGNED PROPERTY TO SHRI DE EPAK KUNDANLAL RATHI AND SHRI SHIVRATAN MOTILALJI RATHI AND THE CAPITAL GAIN IS TAXABLE IN THE HANDS OF THE APPELLANT. FOR JUSTIFYING THE ASSESSMENT ORDER, THE A.O. HAS STATED VARIOUS OBSERVATIONS/REASONS WHICH ARE SUMMARIZED IN THE EA RLIER PARAGRAPH. THE SAID REASONS ARE APPARENTLY INCORRECT AND ARE SERIA LLY DEALT WITH AS UNDER - (1) THE SALE DEED DATED 25/07/2006 NOWHERE INDICATE S THAT THE APPELLANT IS A SELLER OF THE LAND SOLD. (2) THE PROVISIONS OF SECTION 50C CANNOT BE APPLIED TO THE CASE OF APPELLANT AS THE APPELLANT IS NOT SELLER OF THE LAN D. (3) THE APPELLANT I.E. SHRI RADHESHAM R. RATHI HAS NOT SOLD THE IMPUGNED LAND AND HENCE QUESTION OF SHOWING CAPITAL GAIN IN HIS RETURN OF INCOME DOES NOT ARISE. ITA NO.981/PN/2013 C.O. NO.54/PN/2014 (4) THE DOCUMENTS FILED BY THE APPELLANT I.E. REGIS TERED SALE DEED DATED 25/07/2006, NOTARIZED AGREEMENT TO SALE DATED 28/08 /2003, GPA DATED 25/07/2006 CANNOT BE REGARDED AS ADDITIONAL EVIDENC E AS FROM THE ASSESSMENT ORDER PASSED BY THE A.O. U/S 144 R.W.S. 147, THE ABOVE MENTIONED DOCUMENTS ARE AVAILABLE ON HIS RECORD. FURTHER, THE SAID EVIDENCE WHICH IS IN FACT NOT ADD ITIONAL EVIDENCE IS NECESSARY FOR DECIDING THE ISSUE UNDER APPEAL AND T HE SAME HAS TO BE CONSIDERED FOR DECIDING THE APPEAL. THE A.O. HAS BE EN GIVEN SUFFICIENT OPPORTUNITY TO CONSIDER & VERIFY THE SAID DOCUMENTS AND SUBMISSION OF THE APPELLANT AND TO FILE HIS REPORT ON THE SAID SUBMIS SION OF THE APPELLANT. (5) THE REASONS STATED BY THE A.O. FOR REJECTING TH E DOCUMENTS ARE INCORRECT AS OBSERVED BELOW - (I) THE SIGNATURE OF THE APPELLANT IS APPEARING IN THE SALE DEED AS GPA HOLDER AND NOT AS CONSENTING PARTY AS CLAIMED BY TH E A.O. (II) THE A.O. HAS NOT BROUGHT ON RECORD ANY UNREGIS TERED DOCUMENT TO SUPPORT HIS CLAIM THAT THE APPELLANT HAS PURCHASED THE IMPUGNED PROPERTY BY UNREGISTERED DOCUMENT. (III) THE NOTARIZED AGREEMENT DATED 28/08/2003 IS I N EXISTENCE AS THE SAME IS AVAILABLE ON RECORD. (IV) THE CONTENTION OF THE A.O. THAT THE SELLER HAS NOT RECEIVED ANY CONSIDERATION FOR THE PROPERTY IN THE YEAR 2003-04 IS APPARENTLY INCORRECT AS THE SAID CONSIDERATION HAS BEEN RECEIVED BY THE SEL LER FROM THE PURCHASERS OF THE IMPUGNED LAND BY BANK CHEQUES IN THE SAID YEAR AS MENTIONED IN THE REGISTERED SALE DEED WHICH IS DULY SIGNED BY THE PU RCHASERS AND THE SELLER. (V) THE CONTENTION OF THE A.O. THAT THE PURCHASER S HRI DEEPAK KUNDANLAL RATHI HAS DEPOSITED CASH IN HIS BANK ACCOUNT AND HA S ISSUED CHEQUES THERE FROM HAS NO RELEVANCE FOR DECIDING THE ISSUE UNDER APPEAL. (VI) THE CONTENTION OF THE A.O. THAT THE PAYMENT ME NTIONED IN THE REGISTERED SALE DEED FOR PURCHASE OF IMPUGNED PROPE RTY IS NOT TOWARDS PURCHASE OF PLOT BUT IN RESPECT OF SOME OTHER BUSIN ESS TRANSACTION IS NOT SUPPORTED BY ANY EVIDENCE. (VII) & (VIII) THE CONTENTIONS OF THE A.O. ARE IRRE LEVANT AND HAS NO RELEVANCE FOR DECIDING THE ISSUE UNDER APPEAL. (IX) THE CONTENTION OF THE A.O. IS NOT CORRECT AS C LAIMED BY THE APPELLANT AS THE PAYMENT OF RS.5 LAKHS HAS BEEN MENTIONED BY POS T DATED CHEQUE OF 30/09/2003 IN THE AGREEMENT DATED 28/08/2003. FURTH ER, THE CONTENTION OF THE A.O. IS NOT RELEVANT FOR DECIDING THE ISSUE UNDER A PPEAL. (X) THE CONTENTION OF THE A.O. IN RESPECT OF ADMISS IBILITY OF EVIDENCE IN RESPECT OF AGREEMENT DATED 28/08/2003 HAS NO RELEVA NT FOR DECIDING THE ISSUE UNDER APPEAL. IN VIEW OF THE ABOVE FACTS AND DISCUSSION, THE CONT ENTIONS RAISED BY THE A.O. IN THE REPORT DATED 31/12/2012 ARE FOUND T O BE INCORRECT AND HENCE REJECTED. FROM THE ABOVE FACTS AND DISCUSSION, IT I S EVIDENT THAT THERE IS NO EVIDENCE AVAILABLE ON RECORD TO SHOW THAT THE APPEL LANT HAS PURCHASED AND SOLD THE IMPUGNED PLOT OF LAND. 7. THE AFORESAID DISCUSSION BY THE CIT(A) BRINGS OU T TWO POINTS. FIRSTLY, THE DOCUMENTS RELIED UPON BY THE ASSESSEE BEFORE TH E CIT(A) I.E. REGISTERED SALE-DEED DATED 25.07.2006; THE NOTARIZED AGREEMENT DATED 28.08.2003; THE ITA NO.981/PN/2013 C.O. NO.54/PN/2014 GPA DATED 25.07.2006 ARE NOT PIECES OF ADDITIONAL E VIDENCE AS SOUGHT TO BE MADE OUT BY THE LEARNED DEPARTMENTAL REPRESENTATIVE BEFORE US INASMUCH AS ACCORDING TO THE CIT(A) THE ABOVEMENTIONED DOCUMENT S WERE AVAILABLE ON THE RECORD OF THE ASSESSING OFFICER. THEREFORE, WE ARE UNABLE TO APPRECIATE THE SAY OF THE REVENUE BEFORE US THAT THE CIT(A) HAS EN TERTAINED ADDITIONAL EVIDENCE WHICH WAS NOT BEFORE THE ASSESSING OFFICER . MOREOVER, THE CIT(A) FURTHER RECORDS THAT THE ASSESSING OFFICER WAS GIVE N SUFFICIENT OPPORTUNITY IN THE REMAND PROCEEDINGS TO CONSIDER AND VERIFY THE S AID DOCUMENTS AND FURNISH A REPORT. CONSIDERING THE AFORESAID, IN OUR VIEW, THERE IS NO MERIT IN THE PLEA OF THE REVENUE THAT THE CIT(A) HAS RELIED UPON ANY ADD ITIONAL EVIDENCE. 8. THE OTHER CONCLUSION RAISED BY THE CIT(A) IS TO SAY THAT THE SALE-DEED DATED 25.07.2006 NOWHERE INDICATES THAT THE APPELLANT IS A SELLER O F THE LAND SOLD . THE AFORESAID FINDING IS SUPPORTED BY THE MATERI AL ON RECORD. AT THE TIME OF HEARING, THE LEARNED COUNSEL FOR THE ASSESS EE APPEARED AND HAS FURNISHED A PAPER BOOK WHEREIN A COPY OF THE SALE-D EED DATED 25.07.206 IS PLACED. THE AFORESAID ASSERTION OF THE CIT(A) IS B ORNE OUT OF RECORD AND IN THE ABSENCE OF ANY COGENT EVIDENCE TO THE CONTRARY LEAD BY THE REVENUE, WE FIND NO REASON TO INTERFERE WITH THE SAID FINDING OF THE CIT(A). IN VIEW OF THE AFORESAID, CONSIDERING THAT THE CIT(A) HAS CORRECTL Y APPRECIATED THE MATERIAL AND EVIDENCE PLACED BEFORE HIM, WE HEREBY AFFIRM HI S CONCLUSION. AS A RESULT, WE FIND NO ERROR ON THE PART OF THE CIT(A) IN HOLDI NG THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN ASSESSING THE CAPITAL GAIN IN THE HANDS OF THE ASSESSEE AND ACCORDINGLY THE ORDER OF THE CIT(A) IS HEREBY A FFIRMED. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. 10. IN THE CROSS-OBJECTION PREFERRED BY THE ASSESSE E, THE GROUNDS RAISED ARE ONLY IN SUPPORT OF THE ORDER OF THE CIT(A), WHI CH WE HAVE ALREADY AFFIRMED ITA NO.981/PN/2013 C.O. NO.54/PN/2014 IN THE FOREGOING PARAGRAPHS. THUS, THE CROSS-OBJECT ION IS ALSO DISMISSED, AS INFRUCTUOUS. 11. RESULTANTLY, THE APPEAL OF THE REVENUE AS WELL AS THE CROSS-OBJECTION FILED BY THE ASSESSEE ARE DISMISSED, AS ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH MAY, 2014. SD/- SD/- (R.S. PADVEKAR) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED: 20 TH MAY, 2014. SUJEET COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A), AURANGABAD; 4) THE CIT, AURANGABAD; 5) THE DR B BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// SR. PRIVATE SECRETARY I.T.A.T., PUNE