SHRI NITIN LALCHANDANI, Bhopal V. THE ACIT 1(1), Bhopal

ITSSA 116/IND/2016

• Counselvise Citation: [2017] 122 COUNSELVISE.COM (IT) 3030 (ITAT-INDORE)
• Duration Of Justice: 8 month(s) 1 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 21-02-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 08-02-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 20-06-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S S MANTRI
• Assessee Lawyers: S S DESPHANDE
• Keywords: Sale consideration of property below Jantri Value; Fair market value; Corroborative evidences; Valuation report; Block assessment
• Section: 143(3); 50C; 153A; 131

Judgement Text

I.T.(SS)A.NOS. 115 & 116/IND/2016 SHRI NITIN LALCHA NDANI A.YS.2004-05 & 2006-07 PAGE 1 OF 14 , , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE .. , . . , # BEFORE SHRI C. M. GARG, JUDICIAL MEMBER AND SHRI O.P. MEENA, ACCOUNTANT MEMBER . . /. I.T.(SS)A.NOS. 115 AND 116/IND/2016 / ASSESSMENT YEARS: 2004-05 AND 2005-06 SHRI NITIN LALCHANDANI, BHOPAL. VS. ACIT, 1(1), BHOPA L / / / / APPELLANT / / / / RESPONDENT .../ PAN: ABBPL 4827C / / / / APPELLANT BY SHRI S.S.DESPHANDE, C. A. / / / / RESPONDENT BY SHRI S.S. MANTRI, CIT / / / / DATE OF HEARING 08.02.2017 / / / / DATE OF PRONOUNCEMENT 21.02.2017 / / / / O R D E R PER O.P. MEENA, ACCOUTANT MEMEBR. THESE APPEALS ARE FILED BY THE ASSESSEE AGAINST THE ORDERS OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-II, BHOPAL [HE REINAFTER REFERRED TO AS THE CIT (A)] DATED 30.03.2016 AND PERTAIN TO ASSESSMENT YEARS 2004-05 AND 2006- 07 AS AGAINST APPEALS DECIDED IN RESPECT OF ASSESSM ENT ORDERS DATED 30.12.2008 PASSED U/S 153C R.W.S. 153A R.W.S. 143(3 ) OF THE INCOME-TAX ACT, 1961,(HEREIN AFTER REFERRED TO AS 'THE ACT) BY THE ACIT, 1(1), BHOPAL [HEREINAFTER REFERRED TO AS THE AO]. I.T.(SS)A.NOS. 115 & 116/IND/2016 SHRI NITIN LALCHA NDANI A.YS.2004-05 & 2006-07 PAGE 2 OF 14 I.T.(SS)A.NO. 115/IND/2016 A.Y. 2004-05 : 2. THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APP EAL :- 1. THE ASSESSMENT FRAMED IS ILLEGAL AND BAD IN LAW AND WITHOUT JURISDICTION . THE LD. CIT(A) ERRED IN MAINTAIN ING THE SAME. 2. THE LD. CIT(A) HAS ERRED IN MAINTAINING THE ADDI TIONS MADE IN THE ASSESSMENT ON SURMISES, CONJECTURES AND HYPOTH ETICAL GROUNDS WITHOUT FINDING ANY INCRIMINATING DOCUMENTS OR PAPERS. THE ADDITIONS WITHOUT FINDING ANY INCRIMINATING MATERIAL ARE ILLEGAL AND BAD IN LAW IN VIEW OF THE VARIOUS JUDGMENTS. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED AND NOT IS JUSTIFIED IN HIS FINDING TH AT THE AGRICULTURE INCOME AMOUNTING TO RS. 71,622/- IS INCOME FROM UND ISCLOSED SOURCES. SUCH UNLAWFUL AND UNJUSTIFIED FINDINGS BE QUASHED A ND THE ADDITION OF THE SAID AMOUNT OF RS. 71,622/- MAY KINDLY BE DELET ED AND THE AGRICULTURE INCOME AS SHOWN IN THE RETURN BE ACCEPT ED. 3. FACTS APROPOS TO THE ABOVE GROUNDS NO. 1, 2 & 3 ARE THAT THE ASSESSEE HAS SHOWN AGRICULTURAL INCOME AT RS. 71,622/-. AS P ER DETAILS SUBMITTED BY THE ASSESSEE, IT WAS NOTICED THAT THE ASSESSEE IS HOLDI NG AGRICULTURAL LAND AT CHANDANPURA. THE DOCUMENTS FOUND DURING THE COURSE OF SEARCH INDICATED THAT THE LAND SITUATED AT CHANDANPURA IS UN-IRRIGAT ED AND MARKED AS BADA CHHAD KA JUNGLE. FURTHER, IN REPLY TO QUESTIONNAIRE RELATED TO CAPITAL GAIN, THE ASSESSEE HIMSELF SUBMITTED THAT THE LAND SITUATED A T CHUNA BHATTA IS ACTUALLY I.T.(SS)A.NOS. 115 & 116/IND/2016 SHRI NITIN LALCHA NDANI A.YS.2004-05 & 2006-07 PAGE 3 OF 14 DISPUTED LAND AND, THEREFORE, THERE IS NO QUESTION OF ANY AGRICULTURAL OPERATION. BESIDES THIS, THE ASSESSEE WAS ALSO HOLDING LAND AT BHAHMUGHALIA AND KOHEFIZA AROUND 1.25 ACRES. DURING THE COURSE OF SE ARCH, NO SUPPORTING OR RELEVANT DOCUMENTS WERE FOUND, WHICH COULD INDICATE THAT THE ASSESSEE IS HAVING ANY AGRICULTURAL INCOME. THE ASSESSEE WAS NO T ABLE TO PRODUCE ALL THE SUPPORTING AGRICULTURAL SALE BILLS IN RESPECT OF HI S CLAIM. HOWEVER, THE ASSESSEE HAS CLAIMED AGRICULTURAL INCOME ON THE BASIS OF ORI GINAL RETURN FILED. THEREFORE, IN THE ABSENCE OF SUPPORTING EVIDENCES, THE AGRICUL TURAL INCOME OF RS. 71,622/- SHOWN BY THE ASSESSEE WAS TREATED AS INCOME FROM UN DISCLOSED SOURCES. 4. THE MATTER CARRIED TO THE APPEAL BEFORE THE LD. CIT (A), WHO CONFIRMED THE ACTION OF THE AO BY OBSERVING THAT THE DOCUMENTS SE IZED DURING THE SEARCH WHICH SHOWED THAT THE AGRICULTURAL LAND AT CHANDANP URA OWNED BY THE ASSESSEE WAS UN-IRRIGATED AND MARKED AS BADA CHHAD KA JUNGLE, WHICH SHOWS THAT THERE WAS NO AGRICULTURAL INCOME FROM THIS LAN D, WHEREAS THE ASSESSEE AND OTHER CO-OWNERS WERE SHOWING AS AGRICULTURAL INCOME IN VARIOUS BLOCK ASSESSMENT YEARS. THEREFORE, IN THE INSTANT CASE, I T CANNOT BE SAID THAT THERE WAS NO DOCUMENTS FOUND DURING THE COURSE OF SEARCH, WHICH APPARENTLY FALSIFIED THE CLAIM OF THE RECEIPT OF AGRICULTURAL INCOME. THEREFORE, THE LD. CIT(A) HAS HELD THAT DOCUMENTS/INFORMATION GATHERED DURING THE COURSE OF SEARCH CONSTITUTED SUFFICIENT INCRIMINATING MATERIAL AT TH E INITIAL STAGE OF ISSUANCE OF NOTICE U/S 153C. THE INCRIMINATING NATURE OF MATERI AL IS NOT REQUIRED TO BE PRE- ASCERTAINED SURETY AT THIS STAGE. ACCORDINGLY, THE ASSESSMENT U/S 153C READ I.T.(SS)A.NOS. 115 & 116/IND/2016 SHRI NITIN LALCHA NDANI A.YS.2004-05 & 2006-07 PAGE 4 OF 14 WITH SECTION 153A READ WITH SECTION 143(3) OF THE A CT WAS HELD TO BE VALIDLY MADE BY THE AO. 5. BEING AGGRIEVED, THE ASSESSEE FILED THIS APPEAL BEF ORE THE TRIBUNAL. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT NO INCR IMINATING MATERIAL HAS BEEN FOUND AND AS SUCH NO ADDITION CAN BE MADE IN T HE CASE OF THE ASSESSEE. THE HON'BLE TRIBUNAL HAD AN OCCASION TO CONSIDER TH E SAME ISSUE IN THE CASE OF MAYA DEVI LALCHANDANI FOR THE ASSESSMENT YEAR 2002- 03 AND AFTER CONSIDERING VARIOUS CASE LAWS IN PARA 6.1 OF THE ORDER, THE HON 'BLE TRIBUNAL HELD THAT SINCE INCRIMINATING MATERIAL IS NOT FOUND, THE NON-ABATED ASSESSMENT AS VOID AB INITIO. 6. ON THE OTHER HAND, THE LD. DR SUBMITTED THAT IT IS SEEN FROM THE ASSESSMENT ORDER AS WELL AS ORDER OF THE LD. CIT(A) THAT DOCUMENTS WERE FOUND AND SEIZED DURING THE COURSE OF SEARCH INDICATED TH AT THE LAND SITUATED AT CHANDANPURA IS AN UN-IRRIGATED AND MARKED AS BADA C HHAD KA JUNGLE, THEREFORE, THERE WAS SUFFICIENT MATERIAL SEIZED DUR ING THE COURSE OF SEARCH FOR THE RELEVANT ASSESSMENT YEAR AND AFTER RECORDING VA LID SATISFACTION NOTE IN THE CASE OF THE ASSESSEE, NOTICE U/S 153C WAS ISSUED ON 19.05.2008. THEREFORE, IT WAS CONTENDED THAT THE SEIZED MATERIAL IN THE FORM OF LAND RECORD DOES CONSTITUTE INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. THEREFORE, THE CONTENTION OF THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE THAT NO INCRIMINATING MATERIALS WERE FOUND DURING THE COURS E OF SEARCH IS WITHOUT ANY BASIS. I.T.(SS)A.NOS. 115 & 116/IND/2016 SHRI NITIN LALCHA NDANI A.YS.2004-05 & 2006-07 PAGE 5 OF 14 7. WE HAVE CONSIDERED THE FACTS, RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE ASSE SSEE HAS FURNISHED HIS ORIGINAL RETURN OF INCOME ON 30.05.2008 DECLARING T OTAL INCOME AT RS. 1,61,741/- SHOWING INCOME FROM BUSINESS OF HIRING O F ROD, MACHINES ON RENT AND AGRICULTURAL INCOME OF RS. 71,622/-. NO NOTICE U/S 143(2) WAS ISSUED. THEREFORE, ON THE DATE OF SEARCH I.E. 15.11.2006, N O PROCEEDINGS WERE PENDING FOR THE ASSESSMENT YEAR 2004-05. THUS, IT WAS A CAS E OF NON-ABATED ASSESSMENT. HOWEVER, DURING THE COURSE OF SEARCH, THE DOCUMENTS FOUND AND SEIZED INDICATED THAT THE LAND SITUATED AT CHANDANP URA WAS AN UN-IRRIGATED LAND AND MARKED AS BADA CHHAD KA JUNGLE. THUS, SEIZ ED MATERIAL INDICATED THAT THERE WAS NO AGRICULTURAL INCOME FROM THE SAID LAND. THEREFORE, THOSE CONSTITUTED AS INCRIMINATING DOCUMENTS, WHICH WERE MADE THE BASIS FOR INITIATING PROCEEDINGS U/S 153C OF THE INCOME-TAX A CT, 1961, IN THE CASE OF THE ASSESSEE AND A SATISFACTION NOTE WAS DULY RECORDED THE SEIZED MATERIAL ALSO SHOWED THAT THERE WAS NO SCOPE OF AGRICULTURAL INCO ME FROM THE LAND SITUATED AT CHANDANPURA. THEREFORE, THE CONTENTION OF THE LD . AUTHORIZED REPRESENTATIVE OF THE ASSESSEE THAT NO INCRIMINATING DOCUMENTS WER E FOUND DURING THE COURSE OF SEARCH IS DEVOID OF ANY MERIT. THEREFORE, WE ARE OF THE CONSIDERED OPINION THAT DOCUMENTS/INFORMATION GATHERED DURING THE COUR SE OF SEARCH CONSTITUTED SUFFICIENT INCRIMINATING MATERIAL AT THE INITIAL ST AGE FOR ISSUANCE OF NOTICE U/S 153C OF THE ACT AND THE NATURE OF MATERIAL IS NOT R EQUIRED TO BE PRE-ASCERTAINED AT THIS STAGE. ACCORDINGLY, WE ARE OF THE CONSIDERE D ,OPINION THAT THE LD. CIT(A) HAS RIGHTLY HELD THAT PROCEEDINGS U/S 153C READ WIT H SECTION 143(3) HAVE BEEN I.T.(SS)A.NOS. 115 & 116/IND/2016 SHRI NITIN LALCHA NDANI A.YS.2004-05 & 2006-07 PAGE 6 OF 14 VALIDLY CARRIED OUT IN THE CASE OF THE ASSESSEE. AC CORDINGLY, THE FINDINGS OF THE LD. CIT(A) ON THIS ISSUE IS UPHELD. 8. AS REGARDS SHOWING OF AGRICULTURAL INCOME AT RS. 71 ,622/-, WE FIND THAT THE ASSESSEE HAS OWNED 15 ACRES OF LAND OF WHICH NO DETAILS WERE MAINTAINED WITH REGARD TO AGRICULTURAL PRODUCE. WE FIND THAT T HE ASSESSEE HAS FAILED TO PRODUCE THE SALE BILLS OF THE AGRICULTURAL PRODUCE. NO BILLS OF PURCHASE OF SEEDS, FERTILIZERS ETC. WERE FILED. THE AO HAS ALSO OBSERV ED IN THE ASSESSMENT ORDER THAT NO AGRICULTURAL ACTIVITIES WERE UNDERTAKEN AT THE LAND AS THE SAME WAS UN- IRRIGATED AND MARKED AS BADA CHHAD KA JUNGLE. BESID ES THIS, THE ASSESSEE IS ALSO HOLDING LAND AT BHAHMUGHALIA AND KOHEFIZA ARO UND 1.25 ACRES. HOWEVER, NO DETAILS OF AGRICULTURAL PRODUCE EARNED FROM THIS LAND IS FILED. WE FIND THAT THE SIMILAR DISALLOWANCE OF AGRICULTURAL INCOME WAS RESTRICTED TO 50% BY THIS TRIBUNAL IN THE CASE OF ASSESSEES MOTHER VIDE ITS ORDER DATED 25.11.2016 PASSED IN I.T.(SS)A.NO.118/IND/2013, (COPY PLACED O N FILE) WHEREIN THE TRIBUNAL HELD AS UNDER :- 12. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF BOT H THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON THE FILE. WE FIND THAT IT IS NOT DISPUTED THAT THE ASSESSEE OWNED 10 ACRES AGRICULTU RAL LAND. THE ASSESSEE DID NOT MAINTAIN DETAILS. ON CONSIDERATION OF FACTS AND CIRCUMSTANCES, WE ARE OF THE VIEW THAT TO CUT SHORT THE MATTER AND AN END TO THE LITIGATION, IT WOULD BE FAIR AND JUSTIFIED I F THE ADDITION OF RS. 30,213/- IS RESTRICTED TO 50%. WE ORDER ACCORDINGLY. I.T.(SS)A.NOS. 115 & 116/IND/2016 SHRI NITIN LALCHA NDANI A.YS.2004-05 & 2006-07 PAGE 7 OF 14 9. CONSIDERING THE FINDINGS OF TRIBUNAL IN THE CASE OF SMT. MAYA LALCHANDANI AND AFTER CONSIDERING THE FACTS OF THE CASE, WE DEEM IT FIT TO RESTRICT THE DISALLOWANCE OF RS. 4,71,622/- TO 50% AS AGRICULTURAL INCOME, HENCE ADDITION OF RS. 71,622/- IS RESTRICTED TO RS. 35,811/-. ACCORDINGLY, GROUND NOS. 1 TO 3 ARE PARTLY ALLOWED. 10. IN THE RESULT, THE APPEAL FOR ASSESSMENT YEAR 2 004-05 IS PARTLY ALLOWED. I.T.(SS)A.NO. 116/IND/2016 A.Y. 2006-07 : 11. GROUND NOS. 1 & 2 ARE NOT PRESSED. HENCE, THE S AME ARE DISMISSED. 12. GROUND NO. 3 READS AS UNDER :- THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, AN D IN LAW, THE LD. CIT(A) ERRED AND IS NOT JUSTIFIED IN HIS FINDING TH AT THE AGRICULTURE INCOME AMOUNTING TO RS. 21,085/- IS INCOME FROM UNDISCLOSE D SOURCES. SUCH UNLAWFUL AND UNJUSTIFIED FINDINGS BE QUASHED AND TH E ADDITION OF THE SAID AMOUNT OF RS. 21,085/- MAY KINDLY BE DELETED A ND THE AGRICULTURE INCOME AS SHOWN IN THE RETURN BE ACCEPTED. 13. FACTS APROPOS THIS GROUND ARE THAT THE AO MADE ADDITION BY HOLDING THAT AS PER AVAILABLE DETAILS, THE ASSESSEE IS HOLDING A GRICULTURAL LAND AT CHANDANPURA WHICH IS UN-IRRIGATED AND FURTHER 1.25 ACRE OF LAND AT BHAGMUGHALIA AND KOH-E-FIZA. INSPITE OF REPEATED OP PORTUNITIES, THE ASSESSEE FAILED TO EXPLAIN THE LAND HOLDING OR THE BASIS FOR ARRIVING AT THE NET AGRICULTURAL INCOME. THE ASSESSEE ALSO FAILED TO PRODUCE THE SUP PORTING SALE BILLS OF THE AGRICULTURAL PRODUCE. NO BILLS FOR PURCHASE OF SEED S, FERTILIZERS, PESTICIDES ETC. WERE FILED. NO DETAILS WERE GIVEN OF THE USE/HIRING OF MACHINERY, LABOUR OR IRRIGATION ETC. IT HAS BEEN MENTIONED BY THE AO IN THE ASSESSMENT ORDER THAT NO I.T.(SS)A.NOS. 115 & 116/IND/2016 SHRI NITIN LALCHA NDANI A.YS.2004-05 & 2006-07 PAGE 8 OF 14 AGRICULTURAL ACTIVITIES WERE UNDERTAKEN ON THE LAND AS THE SAME WAS UNIRRIGATED AND MARKED AS BADA CHHAD KA JUNGLE AND FURTHER THE ASSESSEE ALSO FAILED TO ADDUCE ANY COGENT EVIDENCE TO PROVE THAT ANY AGRICULTURAL ACTIVITY WAS UNDERTAKEN BY HIM IN THE YEAR UNDER CONSIDERATI ON. 14. THE MATTER CARRIED TO THE LD. CIT(A) AND THE LD . CIT(A) HAS CONFIRMED THE ADDITION OF RS. 21,085/-. 15. THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESS EE RELIED ON THE JUDGMENT OF THE TRIBUNAL IN THE CASE OF MAYA LALCHANDANI HOL DING THAT THE INCOME AT 50% HAS BEEN ACCEPTED. 16. THE LD. DR AGREED TO IT. 17. WE HAVE CONSIDERED THE FACTS, RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD AND ALSO HAVE GONE THR OUGH ORDER OF THIS TRIBUNAL AND WE FIND THAT THE SIMILAR DISALLOWANCE WAS RESTR ICTED TO 50% BY THIS TRIBUNAL IN THE CASE OF ASSESSEES MOTHER VIDE ITS ORDER DATED 25.11.2016 PASSED IN I.T.(SS)A.NO.118/IND/2013, (COPY PLACED O N FILE) WHEREIN THE TRIBUNAL HELD AS UNDER :- 12. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF BOT H THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON THE FILE. WE FIND THAT IT IS NOT DISPUTED THAT THE ASSESSEE OWNED 10 ACRES AGRICULTU RAL LAND. THE ASSESSEE DID NOT MAINTAIN DETAILS. ON CONSIDERATION OF FACTS AND CIRCUMSTANCES, WE ARE OF THE VIEW THAT TO CUT SHORT THE MATTER AND AN END TO THE LITIGATION, IT WOULD BE FAIR AND JUSTIFIED I F THE ADDITION OF RS. 30,213/- IS RESTRICTED TO 50%. WE ORDER ACCORDINGLY. 18. WE, THEREFORE, FOLLOWING OUR OWN ORDER (SUPRA), RESTRICT THE ADDITION OF RS. 21,085/- TO 50% AT RS. 10,543/-. WE ORDER ACCORDING LY. GROUND NO. 3 IS PARTLY ALLOWED. I.T.(SS)A.NOS. 115 & 116/IND/2016 SHRI NITIN LALCHA NDANI A.YS.2004-05 & 2006-07 PAGE 9 OF 14 19. GROUND NO. 4 READS AS UNDER :- THE LD. CIT(A) HAS ERRED IN MAKING THE ADDITION OF RS. 3,00,000/- U/S 68 ON THE GROUND THAT THE ASSESSEE HAS FAILED TO FURNI SH BANK STATEMENTS OF THE LENDER. 4.1 IT WAS PROVED BEFORE THE LD. CIT(A) THAT THE LE NDER IS AN INCOME TAX ASSESSEE AND THE CONFIRMATION WAS FILED. THE ADDITIONS HAVE BEEN SUSTAINED INSPITE OF THE FACT T HAT THE ASSESSEE REQUESTED THE LD. AO AND THE LD. CIT(A) TO ISSUE NOTICES U/S 131 DIRECTING THE CREDITOR TO FILE THE NECESSARY DETAILS. 4.2 THE ADDITION OF RS. 3,00,000/- MAY PLEASE BE D ELETED. 20. GROUND NO. 5 READS AS UNDER :- THE LD. CIT(A) HAS ERRED IN MAKING THE ADDITION OF RS. 95,500/- U/S 68 ON THE GROUND THAT THE ASSESSEE HAS FAILED TO FURNISH EXPLANATION. 5.1 IT WAS PROVED BEFORE THE LD. CIT(A) THAT THE LE NDER IS AN INCOME TAX ASSESSEE AND THE CONFIRMATION WAS FILED AND SUBMITTED VALID EXPLANATION. 5.2 THE ADDITION OF RS. 95,500/- MAY PLEASE BE DELETED. 21. THE FACTS APROPOS THE ABOVE GROUNDS NO. 4 & 5 A RE THAT THE AO MADE THE ADDITION IN RESPECT OF CASH CREDIT IN THE NAME OF T WO PERSONS I.E. RS. 3,00,000/- IN THE NAME OF DEVENDRA SINGH GILL AND RS. 5,95,500 /- IN THE NAME OF INDUS I.T.(SS)A.NOS. 115 & 116/IND/2016 SHRI NITIN LALCHA NDANI A.YS.2004-05 & 2006-07 PAGE 10 OF 14 COLONIZER. THE AO OBSERVED THAT THE ASSESSEE FILED ONLY CONFIRMATION LETTERS AND THE BANK STATEMENTS AND THE RETURNS OF INCOME H AVE NOT BEEN SUBMITTED. 22. THE MATTER CARRIED TO THE LD. CIT(A) AND THE LD . CIT(A) HAS DELETED THE ADDITION OF RS. 5,00,000/- FOR ADVANCE TO INDUS COL ONISER ON THE GROUND THAT THIS IS NOT A CASH CREDIT BUT THE AMOUNT GIVEN BY T HE ASSESSEE AGAINST THE BOOKING OF THE PLOT, WHICH HAS BEEN RETURNED BACK A ND AS SUCH THIS CANNOT BE ADDED U/S 68. THE LD. CIT(A) MAINTAINED THE ADDITIO N OF RS.95,500/-. 23. THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESS EE SUBMITTED BEFORE HIM THAT THIS AMOUNT WAS GIVEN AS ADVANCE BY THE BROTH ER OF THE ASSESSEE SHRI RATAN LALCHANDANI. THE LD. CIT(A) OBSERVED THAT THE RE WAS NO PROOF OF RETURNING THIS AMOUNT TO SHRI RATAN LALCHANDANI AND AS SUCH THE ADDITION OF RS. 95,000/- WAS UPHELD. 24. REGARDING THE ADDITION OF RS. 3,00,000/-, LD. A UTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT THIS AMOUNT WAS RECE IVED BY CHEQUE FOR A SHORT PERIOD AND THE SAME WAS RETURNED BACK THROUGH THE B ANKING CHANNEL. THE CONFIRMATION FROM THE PARTY ALONGWITH THE PERMANENT ACCOUNT NO. WAS GIVEN. THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE S UBMITTED THAT THE SAID PARTY WAS ASSESSED AT BHOPAL AND THE AMOUNT RECEIVED COUL D HAVE BEEN CONFIRMED FROM HIS RETURN. THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE FURTHER SUBMITTED THAT IN THE CASE OF SHRI CHANDRABAN LALCH ANDANI, THE FATHER OF THE ASSESSEE, THIS TRIBUNAL HAS DELETED THE SIMILAR ADD ITION. THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE CONCLUDED THAT ADDIT IONS SO MADE MAY PLEASE BE DELETED. I.T.(SS)A.NOS. 115 & 116/IND/2016 SHRI NITIN LALCHA NDANI A.YS.2004-05 & 2006-07 PAGE 11 OF 14 25. WE HAVE CONSIDERED THE FACTS, RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE LD. CIT(A) HAS DELETED THE ADDITION OF RS. 5 LAKHS FOR ADVANCE TO INDUS COLONI ZERS ON THE GROUND THAT THIS IS NOT THE CASH CREDIT, BUT THE AMOUNT GIVEN BY THE ASSESSEE AGAINST THE BOOKING OF THE PLOT, WHICH HAS BEEN RETURNED BACK A ND AS SUCH THIS CANNOT BE ADDED U/S 68. HOWEVER, THE LD. CIT(A) HAS MAINTAIN ED THE ADDITION OF RS. 95,000/-, WHICH WAS ALSO CLAIMED TO BE AS ADVANCES GIVEN BY THE ASSESSEES BROTHER SHRI RATAN LALCHANDANI. HOWEVER, THE SAME WAS UPHELD ON THE GROUND THAT NO PROOF OF RETURNING THIS AMOUNT TO SHRI RATA N LALCHANDANI WAS FILED. WE FIND THAT THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE HAS CLAIMED THAT THE AMOUNT OF RS. 95,000/- HAS BEEN SHOWN BY SHRI RATAN LALCHANDANI IN HIS ACCOUNT. THEREFORE, WE DEEM FIT TO RESTORE THIS MAT TER TO THE FILE OF THE AO FOR VERIFICATION WHETHER THE SAID AMOUNT IS APPEARING I N THE RETURN OF SHRI RATAN LALCHANDANI AND, IF SO, NO ADDITION THERETO IS CALL ED FOR AND, IF NOT, THE ADDITION MAY BE TREATED AS CONFIRMED. 26. AS REGARDS, THE ADDITION OF RS. 3 LAKHS, THE AS SESSEE HAS FILED A CONFIRMATION WITH PAN NO. AND THE SAME WAS CLAIMED TO BE REFLECTED IN THE RETURN OF INCOME OF SHRI CHANDERBHAN LALCHANDANI, F ATHER OF THE ASSESSEE. SIMILAR ADDITION WAS ALSO DELETED BY THE TRIBUNAL V IDE PARA 22 PAGE 69 ONWARDS. WE, THEREFORE, DEEM IT FIT TO RESTORE THIS ISSUE TO THE FILE OF AO FOR LIMITED PURPOSE OF VERIFICATION, WHETHER THE SAID A MOUNT OF RS. 3 LAKHS HAVE BEEN SHOWN BY SHRI CHANDERBHAN LALCHANDANI IN HIS R ETURN OF INCOME. IF SO, THEN NO ADDITION IS CALLED FOR AND IF THIS AMOUNT I S NOT REFLECTED IN THE RETURN OF I.T.(SS)A.NOS. 115 & 116/IND/2016 SHRI NITIN LALCHA NDANI A.YS.2004-05 & 2006-07 PAGE 12 OF 14 INCOME OF SHERI CHANDERBHAN LALCHANDANI, THEN THE A DDITION MAY BE TREATED AS SUSTAINED. THE ABOVE GROUNDS OF APPEAL ARE, THER EFORE, SET-ASIDE ACCORDINGLY. 27. GROUND NO. 6 READS AS UNDER :- 6. THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 5,36,165/- WHILE COMPUTING THE LONG TERM CAPITAL GAINS ON SALE ,OF PROPERTY INSTEAD OF THE ACTUAL SALE COMPLETELY. 6.1 ON THE BASIS OF THE REASONS AND EXPLANATIONS G IVEN DURING PROCEEDINGS, FOR THE PURPOSES OF CAPITAL GAINS, THE ACTUAL SALE CONSIDERATION MAY KINDLY BE ADOPTED. THE ADDITION O F RS. 5,36,165/- MAY PLEASE BE DELETED. 6.2 NO INCRIMINATING DOCUMENTS WERE FOUND SUGGESTI NG THAT ASSESSEE HAS RECEIVED AMOUNT OVER AND ABOVE ACTUAL SALE CONSIDERATION AND THE LD. CIT(A) ERRED AND IS NOT J USTIFIED IN HIS FINDING/ADOPTION OF SALES CONSIDERATION WHILE COMPU TING THE LONG TERM CAPITAL GAIN IN VIOLATION OF SECTION 50C OF TH E INCOME-TAX ACT, 1961. THEREFORE, APPLICATION OF SECTION 50C OF THE INCOME-TAX IS BAD IN LAW AND SHALL BE QUASHED. 28. FACTS ARE THAT THE ASSESSEE HAD SOLD HIS SHARE IN THE DISPUTED LAND FOR RS. 67,857/- AGAINST THE VALUATION BY THE REGISTER ING AUTHORITY AT RS. 5,77,150/-. THE AO HAS MADE THE ADDITION OF RS. 5,3 6,165/- U/S 50C ON THE GROUND THAT THE STAMP VALUATION AUTHORITY HAS VALUE D THE PROPERTY AT A HIGHER PRICE. IT WAS SUBMITTED BEFORE THE AO THAT THERE WE RE LOT OF DISPUTES FOR THIS LAND AND AS SUCH THE ASSESSEE HAS SOLD THE SAME AT A REASONABLE PRICE. 29. THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESS EE CONTENDED THAT THE AO OUGHT TO HAVE REFERRED THE MATTER FOR THE VALUATION OF THE MARKET PRICE U/S 50C. THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE P RAYED THAT THE ADDITIONS MADE MAY PLEASE BE DELETED OR IN THE ALTERNATIVE BE RESTRICTED TO A REASONABLE FIGURE. I.T.(SS)A.NOS. 115 & 116/IND/2016 SHRI NITIN LALCHA NDANI A.YS.2004-05 & 2006-07 PAGE 13 OF 14 30. THE LD. DR RELIED UPON THE ORDERS OF THE LOWER AUTHORITIES AND SUBMITTED THAT THE REPLY SUBMITTED BY THE ASSESSEE DOES NOT S HOW ANY EVIDENCE THAT THE ASSESSEE HAS CLAIMED BEFORE THE AO THAT THE VALUE A SSESSED BY THE STAMP VALUATION OFFICER EXCEEDS THE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF TRANSFER AS PROVIDED U/S 50C(2) OF THE INCOME-TAX A CT, 1961. 31. WE HAVE CONSIDERED THE FACTS, RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE ASSE SSEE PURCHASED LAND ADMEASURING 1.2 ACRES ON 22.09.1999 WITH CO-OWNERS M/S KHIALDAS CONSTRUCTIONS PVT. LIMITED AND RATAN LALCHANDANI. T HE SAID LAND WAS SOLD VIDE SALE DEED DATED 17.03.2006 FOR TOTAL CONSIDERATION OF RS. 8 LAKHS, IN WHICH ASSESSEES SHARE OF CONSIDERATION WAS SHOWN AT RS. 67,857/- BEING .095 ACRES OF LAND PERTAINING TO THE ASSESSEE. HOWEVER, THE S TAMP DUTY VALUATION OFFICER HAS SHOWN THE VALUE OF PROPERTY AT RS. 72,90,000/- FOR STAMP DUTY PURPOSES. ACCORDINGLY, THE SHARE OF THE ASSESSEE COMES TO RS. 5,77,150/- U/S 50C OF THE ACT. ACCORDINGLY, THE AO COMPUTED LONG TERM CAPITAL GAIN AT RS. 5,36,165/- ( RS. 5,77,150/- (-) RS. 40,950/- COST OF ACQUISITIO N ). WE FIND THAT THE SAID PROPERTY WAS IN DISPUTE BEFORE THE HON'BLE MADHYA P RADESH HIGH COURT UNDER THE PETITION FILED BY THE ORIGINAL OWNER MRS. MAYA MITRA AND MRS. BEENA BOSE CLAIMING THAT THEY HAD RESCINDED THE POWER OF ATTOR NEY IN FAVOUR OF SHRI ANIL SEETHA IN JUNE, 1999, AND THAT THE SAID POWER OF AT TORNEY HOLDER WAS NOT AUTHORIZED TO SELL THE PROPERTY. WE ALSO FIND FROM THE CLAIM OF THE ASSESSEE AS APPEARING IN PARA 8.3 OF THE CIT(A)S ORDER THAT TH E OBJECTION WITH REGARD TO APPLICABILITY OF SECTION 50C WAS RAISED BEFORE THE AO BUT THE AO DID NOT DEAL I.T.(SS)A.NOS. 115 & 116/IND/2016 SHRI NITIN LALCHA NDANI A.YS.2004-05 & 2006-07 PAGE 14 OF 14 WITH THE SAME IN ACCORDANCE WITH THE PROVISIONS OF LAW. IN VIEW OF THESE CIRCUMSTANCES, WE ARE OF THE CONSIDERED OPINION THA T SINCE THE LAND IS DISPUTED ONE, THEREFORE, THE AO OUGHT TO HAVE ASCERTAINED TH E FAIR MARKET VALUE BY MAKING REFERENCE TO THE VALUATION OFFICER FOR ASCER TAINING THE CORRECT MARKET VALUE ON THE DATE OF SALE. IN THE LIGHT OF THESE FA CTS, WE DIRECT THE AO TO MAKE A REFERENCE TO THE DVO FOR VALUATION OF THE PROPERTY AND AFTER ASCERTAINING THE SALE CONSIDERATION, THE VALUE SO ARRIVED MAY BE CON SIDERED FOR WORKING THE LONG TERM CAPITAL GAIN ACCORDINGLY IN THE CASE OF THE AS SESSEE. IN VIEW OF THIS, THIS GROUND OF APPEAL IS SET-ASIDE TO THE FILE OF AO TO DECIDE THE ISSUE AFRESH AFTER OBTAINING VALUATION REPORT FROM DVO. 32. IN THE RESULT, THE APPEAL FOR THE ASSESSMENT YE AR 2004-05 IS PARTLY ALLOWED AND APPEAL FOR THE ASSESSMENT YEAR 2005-06 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. THE ORDER PRONOUNCED IN THE OPEN COURT ON 21.02.201 7. SD/- SD/- ( .. ) (C.M.GARG) JUDICIAL MEMBER (..) (O.P.MEENA) ACCOUNTANT MEMBER / DATED : 21 ST FEBRUARY , 2017 CPU*