Subhash Chand, Mandi V. Addl. CIT, Mandi

ITA 999/CHANDI/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86177 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 03-02-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 12-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR AMARVEER
• Keywords: Unexplained investment; Sale consideration of property below Jantri Value; Source of fund; Valuation report
• Section: 50C; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES A CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R. SOOD, ACCOUNTANT MEMBER ITA NOS. 998 & 999/CHD/2014 ASSESSMENT YEAR: 2007-08 SHRI SUBHASH CHAND, VS THE ADDL. CIT, PROP M/S BHARAT CLOTH HOUSE, MANDI RANGE, MANDI SUDNERNAGAR, DISTT. MANDI PAN NO. ABPPC2790R (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VISHAL MOHAN RESPONDENT BY : DR. AMARVEER DATE OF HEARING : 03.02.2015 DATE OF PRONOUNCEMENT : 06.02.2015 ORDER PER T.R.SOOD, A.M. BOTH THE APPEALS FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER DATED 24.02.2011 AND 04.09.2014 OF CIT(A), SHIMLA. 2. FIRST WE SHALL DEAL WITH ITA NO. 998/CHD/2014. 3. THIS APPEAL IS LATE BY 1279 DAYS. THE ASSESSEE H AS FILED A CONDONATION APPLICATION. 4. THE LD. COUNSEL OF THE ASSESSEE REFERRED TO THIS APPLICATION AND SUBMITTED THAT ORIGINALLY THE APPEAL WAS DECIDED BY CIT(A), S HIMLA AND THE ORDER WAS RECEIVED BY THE ASSESSEE ON 14.3.2011. AGAINST THA T ORDER, THE ASSESSEE PREFERRED AN APPLICATION U/S 154 AND ASSESSEE WAS H OPEFUL THAT IT WOULD BE 2 DECIDED FAVORABLY. HOWEVER, THE SAID APPLICATION WA S DECIDED AFTER MORE THAN THREE YEARS ON 4.9.2014. THE DELAY IN FILING OF TH E PRESENT APPEAL IS BECAUSE OF THIS REASON. THERE IS NO MALAFIDE IN FILING THE APP EAL LATE AND ASSESSEE IS REALLY AGGRIEVED, THEREFORE, THE DELAY MAY BE CONDONED. 5. ON THE OTHER HAND, LD. DR SUBMITTED THAT ASSESSE E HAS NOT GIVEN ANY REASON FOR FILING THE APPEAL LATE. IF ASSESSEE WAS WAITING FOR THE OUTCOME OF THE RECTIFICATION APPLICATION, THEN NO APPEAL SHOULD HA VE BEEN FILED. IN ANY CASE THE REASON GIVEN BY THE ASSESSEE IS NOT SUFFICIENT EXPL ANATION FOR FILING THE APPEAL LATE. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFUL LY AND FIND THAT REASON GIVEN BY THE ASSESSEE FOR FILING THE APPEAL LATE IS NOT SUFFICIENT. IN OUR OPINION, IF ASSESSEE WANTED TO APPEAL, THEN HE SHOULD HAVE P REFERRED THE APPEAL IMMEDIATELY HE RECEIVED THE ORDER. IN OUR OPINION, THE ASSESSEE HAS NOT BEEN ABLE TO EXPLAIN THE REASON FOR FILING THE APPEAL LA TE, THEREFORE, APPEAL IS DISMISSED BEING LATE. 7. IN THE RESULT, APPEAL THE DISMISSED. ITA NO. 199/CHD/2014 8. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLO WING GROUND:- 1. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) IS NOT JUSTIFIED IN DISMISSING THE APPLICATI ON FILED UNDER SECTION 154 OF THE INCOME TAX ACT, 1961 TREAT ING THE SAME NOT BE A MISTAKE APPARENT FROM RECORD. THE ORD ER OF THE LD. CIT(A) IS ABSOLUTELY ILLEGAL AND NOT SUSTAINABL E IN THE EYES OF LAW. 9. AFTER HEARING BOTH THE PARTIES WE FIND THAT A SU RVEY WAS CONDUCTED IN THE PREMISES OF THE ASSESSEE AND DURING SURVEY IT WAS N OTICED THAT ASSESSEE HAS MADE 3 INVESTMENT IN PURCHASE OF LAND IN THE NAME OF SON O N 29.4.2006. THE ASSESSEE HAS ALSO INVESTED IN FURTHER PURCHASE OF LAND IN TH E NAME OF DAUGHTER-IN-LAW. ON THESE TWO COUNTS THE ASSESSEE MADE A SURRENDER OF R S. 4,47,000/- AND RS. 3,70,000/-. HOWEVER, THE MATTER WAS REFERRED TO TH E VALUATION OFFICER PARTICULARLY BECAUSE THE STAMP VALUATION FOR THE PU RPOSE OF EXECUTION OF SALE DEED WAS MUCH HIGHER THAN THE SALE VALUE SHOWN IN T HE SAID SALE-PURCHASE DEEDS. THEREFORE, THE NET ADDITION OF RS. 26,39,280/- WAS MADE TO THE INCOME OF THE ASSESSEE ON ACCOUNT OF UNEXPLAINED INVESTMENT WHICH WAS NOT DISCLOSED BY THE ASSESSEE. 9. ON APPEAL, IT WAS MAINLY SUBMITTED THAT SON AND DAUGHTER-IN-LAW HAD PURCHASED THE PROPERTIES SEPARATELY BY TWO SEPARATE SALE DEEDS ON 17.8.2006 AND 20.4.2006 FOR CONSIDERATION OF RS. 6,50,000/- AND RS. 6 LAKHS. THE SALE DEEDS HAVE BEEN EXECUTED BEFORE THE REGISTRAR ACCORDINGLY . IT WAS FURTHER SUBMITTED THAT ASSESSING OFFICER HAS NOT BROUGHT ANY MATERIAL ON RECORD EXCEPT FOR THE VALUATION REPORT AND THE HIGHER VALUE IN THE SALE D EED FOR STAMP DUTY PURPOSES. IT WAS CONTENDED THAT THE SALE CONSIDERATION COULD NOT BE ENHANCED IN THE ABSENCE OF ANY OTHER MATERIAL IN THE LIGHT OF THE D ECISION OF HON'BLE SUPREME COURT IN THE CASE OF VARGHESE V ITO 131 ITR 597 (SC ) . IT WAS ALSO CONTENDED THAT THERE WAS ONLY ONE DEEMING PROVISION IN RESPEC T OF THIS ISSUE IN THE FORM PF SECTION 50C BUT THE SAME WAS FOR THE PURPOSE OF CA PITAL GAIN TAX ON THE SALE OF PROPERTY AND THE SAME CANNOT BE APPLIED TO THE PRE SENT CASE. RELIANCE WAS ALSO PLACED ON VARIOUS CASE LAWS. 10. THE LD. CIT(A) AFTER EXAMINING THESE SUBMISSIO NS OBSERVED THAT CASE LAWS CITED BY THE ASSESSEE WAS DISTINGUISHABLE. SH E ACTUALLY CONFIRMED THE ADDITION BY CHANGING THE NATURE OF ADDITION BY OBSE RVING THAT THE ASSESSEE HAS TRANSFERRED THIS PROPERTY IN THE NAME OF HIS SON SH RI SHIV KUMAR AND DAUGHTER IN LAW SMT. POOJA JAGOTA AND, THEREFORE, SECTION 50C WAS APPLICABLE. 4 11. BEFORE US, LD. COUNSEL FOR THE ASSESSEE SUBMITT ED THAT CIT(A) HAS DIRECTED THE ASSESSING OFFICER TO COMPUTE THE CAPIT AL GAINS AFTER INVOKING THE PROVISIONS OF SECTION 50C. HE POINTED OUT THAT THE ISSUE BEFORE LD. CIT(A) WAS NOT SALE OF PROPERTY BUT ADDITION OF RS. 26,39,280/ - MADE ON ACCOUNT OF UNDISCLOSED INVESTMENT FOR PURCHASE OF PROPERTY IN THE NAME OF SON AND DAUGHTER-IN-LAW. SINCE THE CIT(A) HAS CHANGED THE NATURE OF ADDITION I.E. WHY THE RECTIFICATION APPLICATION WAS ALSO FILED, COPY OF WHICH IS AVAILABLE AT PAGES 41 TO 42 OF THE PAPER BOOK. 12. THE LD. COUNSEL FURTHER SUBMITTED THAT LD. CIT( A) HAS DISMISSED THE APPLICATION WITHOUT GOING THROUGH THE CONTENTIONS O F THE APPLICANT WHICH IS NOT JUSTIFIED. 13. ON THE OTHER HAND LD. DR REFERRED TO THE COPY O F THE SALE DEED AND SUBMITTED THAT IN THE FIRST PAGE ITSELF THE ASSESSE E SHRI SUBHASH CHAND HAS BEEN SHOWN AS ATTORNEY HOLDER OF THE SELLER OF THE PROPE RTY TO THE SON AND DAUGHTER IN LAW OF THE ASSESSEE. THIS MEANS ASSESSEE MUST HAVE PURCHASED THE PROPERTY INITIALLY THROUGH POWER OF ATTORNEY AND LATER ON SO LD TO HIS SON AND DAUGHTER IN LAW AND I.E. WHY THE LD. CIT(A) WAS JUSTIFIED IN CO NFIRMING THE ADDITION UNDER THE HEAD CAPITAL GAINS 14. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFU LLY. NO DOUBT THE ASSESSEE I.E. SHRI SUBHASH CHAND IS DECLARED AS POW ER OF ATTORNEY HOLDER IN THE SALE DEED EXECUTED ON 20.4.2006, COPY OF WHICH IS A VAILABLE AT PAGE 23. THIS BECOME CLEAR FROM THE SALE DEED PAGE 1, WHICH READ S AS UNDER:- SALE DEED OF LAND SALE DEED VALUE 20,00, 000/- STAMP DUTY 1,60,000/- ATTACHED AS MARKET VALUE 5 THIS DEED OF SALE IS EXECUTED ON THIS 20 TH DAY OF APRIL 2006 AT SUDNERNAGAR BY SHRI SUKHRAJ SINGH S/O SHRI DHANW ANT SINGLH S/O KIRPAL SINGH, R/O MUHAL BHOJPUR, TEHSIL SUNDERNAGAR, DISTRCT MANDI H.P. THROUGH GENERAL POW ER OF ATTORNEY SHRI SUBHASH CHANDI S/O SHRI CHET RAM S/O PRITHVI CHAND R/O BHOJPUR, TEHSIL SUDNER NAGAR, DISTT. MAND I H.P. (HEREINAFTER CALLED THE VENDOR OF THE FIRST PART) I N FAVOUR OF SHRI SHIV KUMR S/O SHI SUBHASH CHAND S/O SHRI CHET RAM R/O BHOJPUR, TEHSIL SUDNER NAGAR, DISTT. MANDI H.P (HEREINAFTER CALLED THE VENDEE OF THE OTHER PART) W ITNESS AS UNDER:-.. 15. HOWEVER, THIS IS IN RESPECT OF LAND MEASURING 54.89 SQUARE METERS SITUATED IN MUHAL BHOJPUR WHICH HAS BEEN SOLD BY SH RI SUKHRAJ SINGH IN WHICH ASSESSEE IS A POWER OF ATTORNEY HOLDER TO THE SELLE R OF THE LAND TO THE SON OF THE ASSESSEE. THERE IS ANOTHER SALE DEED COPY OF WHICH IS AVAILABLE AT PAGES 11 TO 22 OF THE PAPER BOOK IN RESPECT OF 53.12 SQUARE METER S SITUATED IN KHATONI NO. 579 AND 493 WHICH ISDIFFERENT FROM THE FIRST PROPERTY. IN THIS PROPERTY THE ASSESSEE HAS NOT BEEN SHOWN AS ATTORNEY HOLDER. OTHERWISE AL SO, THERE IS NO MATERIAL AVAILABLE WITH THE REVENUE TO HOLD THAT PROPERTY WA S FIRST PURCHASED BY THE ASSESSEE AND THEN SOLD TO THE SON AND DAUGHTER-IN- LAW OF THE ASSESSEE. EVEN ASSESSING OFFICER HAS MADE ADDITION ON ACCOUNT OF U NDISCLOSED CONTRIBUTION MADE BY THE ASSESSEE IN THE PROPERTY PURCHASED BY T HE ASSESSEES SON AND DAUGHTER-IN-LAW WHO HAD NO SOURCES OF INCOME. THE REFORE, CLEARLY LD. CIT(A) HAS COMMITTED A MISTAKE AND SHE COULD HAVE RECTIFIE D THE SAME BY ADJUDICATING THE ORIGINAL ISSUE WHETHER THE ASSESSEE HAS REALLY MADE UNDISCLOSED CONTRIBUTION IN PURCHASE OF PROPERTY BY THE SON AND DAUGHTER OF THE ASSESSEE. THEREFORE, IN THE INTEREST OF JUSTICE WE SET ASIDE THE ORDER OF L D. CIT(A) PASSED U/S 154 AND RESTORE THE MATTER TO HER FILE FOR RECONSIDERATION OF THE RECTIFICATION APPLICATION AND THEN PASS AN ORDER AFTER PROVIDING ADEQUATE OPP ORTUNITY OF HEARING TO THE ASSESSEE. 6 16. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 06.02.2015 SD/- SD/- (BHAVNESH SAINI) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 6 TH FEBRUARY,2015 RKK COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR