M/s. Bharadia Engineering Industries, JAMNAGAR V. The Deputy Commissioner of Income Tax, Central Circle-1, RAJKOT-GUJARAT

ITSSA 2/RJT/2011

• Counselvise Citation: [2011] 124 COUNSELVISE.COM (IT) 8052 (ITAT-RAJKOT)
• Duration Of Justice: 6 month(s) 1 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 30-09-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 30-09-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 29-03-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MK SINGH
• Assessee Lawyers: J C RANPURA
• Keywords: Documents seized

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT BEFORE SHRI D.K. TYAGI (JUDICIAL MEMBER) AND SHRI A .L. GEHLOT (AM) I.T(SS)A. NO.02/RJT/2011 (ASSESSMENT YEAR 2004-05) M/S BHARADIA ENGG INDUSTRIES VS THE DY.CIT, CENT.C IR.1 9, PATEL COLONY RAJKOT JAMNAGAR PAN : AABFB9811D (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI JC RANPURA RESPONDENT BY: SHRI MK SINGH DATE OF HEARING : 30-09-2011 DATE OF PRONOUNCEMENT : 30-09-2011 O R D E R PER BENCH THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF CIT(A)-IV, AHMEDABAD DATED 02-11-2011 AND PERTAINS TO ASSESSME NT YEAR 2004-05. 2. THE SOLE EFFECTIVE GROUND RAISED IN THE APPEAL I S THAT THE CIT(A)-IV, AHMEDABAD ERRED ON FACTS AS ALSO IN LAW IN CONFIRMI NG ADDITION OF RS.6,84,989/- MADE ON ACCOUNT OF ALLEGED CAPITAL GAIN ON SALE OF INDUSTRIAL PLOT OF LAND. 3. A SEARCH OPERATION WAS CARRIED OUT AT THE PREMIS ES OF THE PARTNERS OF THE ASSESSEE FIRM ON 21-02-2008. DURING THE COURSE OF SEARCH ONE LOOSE PAPER FILE INVENTORISED AS ANNEXURE A-1 WAS FOUND AND SEIZED. FROM THE NOTINGS ON PAGE 80 OF THIS ANNEXURE, THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAD SOLD ITS PLOT NI.355/5, SHANKAR TEKARI, JAMNAGAR GIDEC FOR RS.8,0 3,250 OUT OF WHICH ONLY IT(SS)A NO.02/RJT/2011 2 RS.2,11,000/- WAS RECEIVED BY CHEQUE. THE SALE CON SIDERATION IS FURTHER EVIDENCED BY THE NOTINGS AT PAGE 81 OF ANNEXURE A-1 WHICH IS A RECEIPT ON STAMP PAPER GIVEN AND SIGNED BY THE PARTNER SHRI RAMESH B HARADIA. IT HAS BEEN STATED BY SHRI RAMESH BHARADIA, PARTNER OF THE ASSESSEE FI RM, IN THIS RECEIPT THAT THE PLOT AT 355/5 GIDC HAS BEEN SOLD AT RS.525 PER SQ.F T. AND RS.4,00,000/- HAS BEEN RECEIVED IN CASH. AS REGARDS THE YEAR OF TRANS FER, THE ASSESSEE CLAIMED THAT THE SALE WAS IN PREVIOUS YEAR RELEVANT TO A.Y. 2009 -10 AND CAPITAL GAIN WAS OFFERED IN A.Y. 20-09-10. THE ASSESSING OFFICER ON THE BASIS OF TRANSFER ORDER OF THE GIDC AT PAGE-74 OF ANNEXURE A-1 AND CERTIFICAT E DATED 14-10-2003 GIVEN BY GIDC HAD HELD THAT THE PLOT NO.355/5 WAS TRANSFE RRED IN THE NAME OF SHRI KRUSHNAKANTBHAI P MAKWANA ON 14-10-2003. ON THE BA SWIS OF DOCUMENTS SEIZED AT PAGE 80,, 81 AND 74 OF ANNEXURE A-1, THE ASSESSING OFFICER HAD COME TO THE CONCLUSION THAT THE PLOT NO.355/5 OF ASSESSE E FIRM WAS TRANSFERRED BY THE GIDC JAMNAGAR IN THE NAME OF SHRI KRUSHNAKANTBHAI P MAKWANA ON 14-10-2003 AND THE SAID TRANSFER WAS CERTIFIED BY THE CERTIFIC ATE DATED 14-10-2003. THE TOTAL SALE CONSIDERATION IN HIS VIEW WAS FOR RS.8,03,250 EVIDENCED BY THE NOTINGS OF PAGE 80 AND CORROBORATED BY THE CASH RECEIPT AS SHO WN AT PAGE 81 OF THE SEIZED PAPER. THE ASSESSING OFFICER ACCORDINGLY ON THE BA SIS OF DOCUMENTS SEIZED CALCULATED THE CAPITAL GAIN FOR RS.6,84,989 (RS.8,0 3,250 RS.1,18,261) AS TAXABLE IN THE YEAR UNDER CONSIDERATION AND MADE TH E ADDITION ACCORDINGLY. ON APPEAL, THE CIT(A) DISMISSED THE APPEAL OF THE ASSE SSEE. IT(SS)A NO.02/RJT/2011 3 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE G ONE THROUGH THE MATERIAL PLACED BEFORE US. THE CIT(A) WHILE DISMISSING THE APPEAL FILED BY THE ASSESSEE HAS FOUND THAT IN THE ASSESSEE CONTENTED BEFORE AO THAT THE NOTINGS AT PAGE 80 AS ROUGH AND TOTALLY IGNORED THE PAPERS SEIZED AT P AGE 81 AND PAGE 74 OF THE ANNEXURE A-1 WHEREAS IN THE EXPLANATION FILED BEFOR E CIT(A) THE CLAIM OF CASH RECEIPT OF RS.4,00,000 WAS DISPUTED ON THE GROUND T HAT THE CASH RECEIPTS SHOULD BE IN THE POSSESSION WHO GIVES THE CASH. THE CIT( A) FOUND NO SUBSTANCE IN THE SUBMISSION ON THE GROUND THAT IF AT ALL THE EXPLANA TION OF THE ASSESSEE THAT THE DEAL WAS INITIALLY STRUCK FOR RS.4 LAKHS WHICH WAS AGREED TO BE PAID IN CASH, THERE WAS NO POINT IN MAKING PAYMENT OF RS.2,10,000 ON 17 -10-2003 BY CHEQUE BY THE PURCHASER. THE CIT(A) THEREFORE, REJECTED THE CONT ENTIONS OF THE ASSESSEE WITH REGARD TO PAGES 80 AND 81 OF THE ANNEXURE A. HE AL SO FOUND THAT THE ASSESSEE CONVENIENTLY IGNORED THE CONTENTS ON PAGE 74 OF THE ANNEXURE A WHICH RELATED TO THE TRANSFER OF PLOT IN THE NAME OF PURCHASER AND T HE CERTIFICATE OF DATE OF TRANSFER. WITH REGARD TO THE APPLICABILITY OF PROVISIONS OF S ECTION 48 OF THE ACT, THE CIT(A) RECORDED THE FOLLOWING FINDINGS: 3.4 THE ISSUE TO BE DECIDED THUS RELATES TO THE CO MPUTATION OF CAPITAL GAINS, THE YEAR OF TAXABILITY OF THE CAPITA L GAINS AND THE FULL VALUE OF THE CONSIDERATION. IT IS EVIDENT FROM PAG E-74 OF ANNEXURE A-1 THAT PLOT NO.355/5 OF ASSESSEE FIRM WAS TRANSFE RRED BY THE GIDC JAMNAGAR IN THE NAME OF SHRI KRUSHNAKANTBHAI P MAKWANA ON 14.10.2003 AND THE SAID TRANSFER WAS CERTIFIED B Y THE CERTIFICATE OF THE GIDC DATED 14.10.2003. AFTER THE TRANSFER O F PLOT IN THE NAME OF SHRI KRISHNAKANTBHAI P MAKWANA ON 14.10.200 3 BY THE GIDC, THE ASSESSEE HAD LOST ALL ITS RIGHT ON THIS P LOT AND THE PLOT NO.355/5 AT GIDC HJAMNAGAR BECAME THE PROPERTY OF S HRI KRUSHNAKANTBHAI P MAKWANA IN ABSOLUTE TERMS. THE C APITAL GAIN WILL THUS BE CHARGEABLE TO TAX IN THE PREVIOUS YEAR RELATING TO THE A.Y. 2004-05 THE FULL VALUE OF CONSIDERATION WILL BE RS.8,903,250/- AS THE TOTAL SALE CONSIDERATION AND MODE OF RECEIPT OF THE SALE IT(SS)A NO.02/RJT/2011 4 CONSIDERATION NOTED DOWN TWICE ON PAGE-80 OF ANNEXU RE A-1 I.E. FIRSTLY AS 1530 X 525 = 803250 AND SECONDLY AS 142. 23 SQ. MT X 10.764 = 1530.95 SQ.FT X 525 = 8,03,748 DIFFERENCE OF RS.498.75 AT THE BOTTOM SIDE OF PAGE 80 OF ANNEXURE A-1. THE TO TAL SALE CONSIDERATION IS FURTHER CORROBORATED BY THE CASH R ECEIPT ON STAMP PAPER SIGNED AND GIVEN BY SHRI RAMESH BHARADIA, PAR TNER OF THE ASSESSEE FIRM, STATING IN THE RECEIPT THAT THE PLO T AT 355/5 GIDC BEEN SOLD AT RS.525 PER SQ.FT. AND RS.4,00,000/- HA S BEEN RECEIVED IN CASH. THUS, THERE IS NO DOUBT ABOUT THE FULL VA LUE OF CONSIDERATION OF RS.8,03,250/-. THOUGH AS PER THE NOTINGS ON PAGE-80 OF ANNEXURE A-1, THE ASSESSEE HAD RECEIVED RS.8,03,250/- BY WAY OF CASH OF RS.4,00,000/- AND RS.1,50,000/- A ND BY WAY OF EXPENSES INCURRED ON BEHALF OF THE ASSESSEE, THE FU LL VALUE OF CONSIDERATION WILL BE FOR RS.8,03,250/- EVEN IF ANY SUM IS NOT SO RECEIVED BUT RECEIVABLE BECAUSE THE PLOT WAS TRANSF ERRED IN THE NAME OF PURCHASER IN THE RECORD OF GIDC JAMNAGAR AN D SALE CONSIDERATION WERE AGREED FOR RS.525/- PER SQ.FOR T HE PLOT ADMEASURING 1530 SQ.FT. THE COMPUTATION OF CAPITAL GAIN HAD BEEN THUS CORRECTLY COMPUTED BY THE ASSESSING OFFICER FO R RS.6,84,989/- (RS.8,03,250/- -RS. 1,18,261/-). THE ADDITION MADE FOR RS.6,84,989/- IS HEREBY CONFIRMED. THE LD.AR OF THE ASSESSEE BEFORE US HAS SIMPLY RELI ED UPON THE SUBMISSIONS MADE BEFORE THE CIT(A). THEREFORE, IN THE GIVEN SE T OF FACTS AND CIRCUMSTANCES AND THAT HAVE BEEN CONSIDERED BY THE CIT(A), WE ARE OF THE OPINION, THERE IS LITTLE SCOPE FOR US TO INTERFERE WITH THE ORDER OF CIT(A). AS WE ARE UNABLE TO COME TO A DIFFERENT CONCLUSION THAN THE ONE ARRIVED AT BY THE CIT(A), WE HAVE TO NECESSARILY UPHOLD THE ORDER OF CIT(A). WE DO SO. 5. INA THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30-09-2011. SD/- SD/- (A.L. GEHLOT) (D.K. TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER RAJKOT, DT : 30 TH SEPTEMBER, 2011 PK/- IT(SS)A NO.02/RJT/2011 5 COPY TO: 1. ASSESSEE 2. REVENUE 3. THE CIT(A)-IV, AHMEDABAD 4. THE CI, CENTRAL-II, RAJKOT 5. THE DR, I.T.A.T., RAJKOT (TRUE COPY) BY ORDER ASSTT.REGISTRAR, ITAT, RAJKOT