The DCIT, Circle-1, RAJKOT-GUJARAT V. Shri Chandrakant V. Bhalara, RAJKOT-GUJARAT

ITSSA 66/RJT/2009

• Counselvise Citation: [2011] 124 COUNSELVISE.COM (IT) 8169 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 8 month(s) 22 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 17-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 02-06-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 25-09-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JM SAHAY
• Assessee Lawyers: J C RANPURA
• Keywords: Unexplained investment; Sale consideration of property below Jantri Value
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT BEFORE SHRI A.L. GEHLOT (AM) AND SHRI N.R.S. GANESA N (JM) I.T.(SS)A. NO.66/RJT/2009 (ASSESSMENT YEAR 2005-06) DY.CIT, CENT.CIR.1 VS SHRI CHANDRAKANT V BHALARA RAJKOT PAVITRA, 2 SARVODAY SOCIETY OPP ST MARY SCHOOL, RAJKOT PAN :ACHPB0377Q (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI JM SAHAY RESPONDENT BY: SHRI JC RANPURA O R D E R PER N.R.S. GANESAN, JM THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF CIT(A)-IV, AHMEDABAD DATED 17-03-2009 AND PERTAINS TO ASSESSME NT YEAR 2005-06. 2. THE GROUNDS 1 & 2 OF APPEAL IS WITH REGARD TO AD DITION OF RS. 9,11,200 & RS.93,550 TOWARDS UNEXPLAINED INVESTMENT IN PROPERT Y. 3. SHRI JM SAHAY, THE LD.DR SUBMITTED THAT THE ASSE SSING OFFICER FOUND THAT THE ASSESSEE HAS PAID ADDITIONAL STAMP DUTY OF RS.76,34 5 AND PENALTY OF RS.250 ON 29-12- 2004. HOWEVER, THE ASSESSEE HAS SHOWN THE COST OF PROPERTY AT RS.2 LAKHS BESIDES PAYMENT OF STAMP DUTY AND THE ADDITIONAL STAMP DUTY . THEREFORE, THE ASSESSING OFFICER, ON THE BASIS OF THE VALUATION MADE BY THE STAMP DUT Y AUTHORITIES DETERMINED THE PRICE OF THE PROPERTY AND THE ADDITIONAL COST WAS DETERMINED TO THE EXTENT OF RS.9,11,200 AND RS.93,550 AND WAS ADDED TO THE INCOME OF THE ASSESS EE. HOWEVER, ON APPEAL BY THE ASSESSEE THE CIT(A) FOUND THAT THE ASSESSING OFFICE R HAS NO POSITIVE EVIDENCE TO SHOW THAT THE ASSESSEE HAS ACTUALLY PAID MORE THAN THE C ONSIDERATION SHOWN IN THE SALE DEED. REFERRING TO SECTION 50C OF THE INCOME-TAX ACT, THE LD.REPRESENTATIVE SUBMITTED THAT THE CIT(A) OBSERVED THAT IT IS APPLICABLE ONLY TO SELLE R AND NOT TO THE PURCHASER. ACCORDING TO THE LD.REPRESENTATIVE, SINCE THE ASSESSEE HAS PAID ADDITIONAL STAMP DUTY FOR THE PURPOSE OF GETTING SALE DEED REGISTERED BY ACCEPTING THE VA LUE OF THE LAND AT A HIGHER COST AS ITSS NO.66/RJT/2009 2 DETERMINED BY THE STAMP AUTHORITIES, THE SAID VALUE AS DETERMINED BY THE STAMP AUTHORITIES HAS TO BE TAKEN AS COST OF THE PROPERTY . 4. ON THE CONTRARY, SHRI JC RANPURA, THE LD.REPRESE NTATIVE SUBMITTED THAT THE ASSESSEE HAS RIGHTLY DISCLOSED THE SALE CONSIDERATI ON IN THE SALE DEED AND NO OTHER MATERIAL IS AVAILABLE ON RECORD TO SUGGEST THAT THE ASSESSEE HAS PAID MORE THAN WHAT WAS DISCLOSED IN THE SALE DEED. MERE PAYMENT OF AD DITIONAL STAMP DUTY WITHOUT ANY OTHER MATERIAL TO SHOW THAT THE ASSESSEE HAS PAID M ORE THAN WHAT WAS SHOWN IN THE SALE DEED WOULD NOT MAKE ANY GROUND FOR HOLDING THAT THE ASSESSEE HAS PAID MORE AMOUNT THAN WHAT WAS SHOWN IN THE SALE DEED. THE LD.REPRE SENTATIVE FURTHER SUBMITTED THAT THIS TRIBUNAL IN THE CASE OF DCIT VS PRAVINCHANDRA C SAV ALIA ITA NO.995/RJT/2009 DATED 25- 02-2011 FOUND THAT IN THE ABSENCE OF ANY MATERIAL O N RECORD TO SHOW THAT THE ASSESSEE HAS PAID MORE THAN WHAT IS STATED IN THE SALE DEED THERE CANNOT BE ANY OTHER ADDITION. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND HAVE ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE QUESTION ARI SES FOR CONSIDERATION IS WHAT IS THE SALE CONSIDERATION PAID BY THE ASSESSEE FOR PURCHAS E OF PROPERTY. THE SALE CONSIDERATION / PURCHASE PRICE IS NOTHING BUT A PRI CE AGREED BETWEEN A WILLING PURCHASER AND A WILLING SELLER. THEREFORE, WHEN A WILLING PU RCHASER AND A WILLING SELLER AGREE FOR A PARTICULAR PRICE, THEN THE SALE CONSIDERATION SHALL BE THE SAID AGREED PRICE BETWEEN THE PARTIES. THE SALE DEED HAS ALSO DISCLOSED THE AGRE ED PRICE BETWEEN THE PARTIES. IN VIEW OF THE COMPULSORY REGISTRATION OF THE DOCUMENT UNDE R THE REGISTRATION ACT, THE SALE DEED WAS PRESENTED FOR REGISTRATION. THE SAID REVENUE A UTHORITY WAS EMPOWERED TO COLLECT STAMP DUTY ON THE MARKET PRICE. THEREFORE, WHEN TH E AGREED SALE PRICE IS LESS THAN THE MARKET PRICE AN OPTION WAS GIVEN TO THE STAMP AUTHO RITY TO ESTIMATE THE MARKET VALUE OF THE PRICE AFTER MAKING LOCAL ENQUIRIES. THEREFORE, THE STAMP AUTHORITIES VALUE THE MARKET PRICE ON THE ESTIMATE BASIS AND COLLECT STAMP DUTY THEREON. MERELY BECAUSE THE MARKET PRICE WAS DETERMINED BY THE STAMP AUTHORITIES FOR T HE PURPOSE OF COLLECTION OF STAMP DUTY IT CANNOT BE CONSTRUED THAT THE SAID MARKET VALUE D ETERMINED BY THE STAMP AUTHORITIES HAS TO BE TREATED AS SALE CONSIDERATION. AS WE HAV E ALREADY DISCUSSED THE SALE CONSIDERATION IS A PRICE AGREED BETWEEN A WILLING P URCHASER AND WILLING SELLER. IT MAY BE EITHER MORE THAN THE MARKET VALUE AND IN SOME CASES LESS THAN THE MARKET VALUE. UNDER THE INCOME-TAX ACT, THE ASSESSING OFFICER WAS EMPOW ERED TO ASSESS THE INCOME AND COLLECT TAX THEREON. THEREFORE, THE ASSESSING OFFI CER HAS TO EXAMINE INDEPENDENTLY AND ITSS NO.66/RJT/2009 3 FIND OUT WHAT IS THE ACTUAL PRICE AGREED TO BETWEEN THE PARTIES AND WHAT WAS THE PRICE ACTUALLY PAID BY THE ASSESSEE FOR PURCHASE OF THE P ROPERTY. IN THIS CASE, THE ASSESSEE HAS DISCLOSED THE SALE CONSIDERATION AS AGREED TO B Y THE PARTIES AND NO OTHER MATERIAL IS ON RECORD TO SUGGEST THAT THE ASSESSEE HAS RECEIVED ANYTHING MORE THAN WHAT WAS DECLARED IN THE SALE DEED. IN SUCH A SITUATION, IN OUR OPINION, THE MARKET VALUE AS DETERMINED BY THE STAMP AUTHORITIES CANNOT BE SUBST ITUTED IN PLACE OF SALE CONSIDERATION. THE SALE CONSIDERATION REMAINS TO A PRICE / AMOUNT AGREED TO BETWEEN BOTH BUYER AND THE SELLER. THEREFORE, THE CIT(A), IN THE ABSENCE OF ANY OTHER MATERIAL TO JUSTIFY THAT THE ASSESSEE HAS RECEIVED ANY MONEY OVER AND ABOVE THE SALE CONSIDERATION DECLARED IN THE SALE DEED HAS RIGHTLY DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. A SIMILAR DECISION WAS TAKEN BY THIS TRIBUNAL IN THE CASE OF SHRI PRAVINCHANDRA C SAVALIA (SUPRA). ACCORDINGLY, THE ORDER OF CIT(A) IS CONFIRMED. 6. THE NEXT GROUND OF APPEAL IS WITH REGARD TO ADDI TION OF RS.45,000 AS AGAINST THE ADDITION MADE BY THE ASSESSING OFFICER TO THE EXTEN T OF RS.1,50,000. 7. SHRI JM SAHAY, THE LD.DR SUBMITTED THAT THE ASSE SSEE HAS SHOWN THE WITHDRAWAL FOR FAMILY EXPENSES AT LESS THAN RS.3,000 PER MONTH FOR THE ASSESSMENT YEARS 2000-01 TO 2003-04. MOREOVER, FOR THE ASSESSMENT YEARS 200 4-05 AND 2005-06 THE ASSESSEE HAS NOT SHOWN ANY EXPENDITURE FOR THE FAMILY. HOWE VER, FOR THE ASSESSMENT YEAR 2006- 07 THE ASSESSEE HAS SHOWN RS.8,000/-. THEREFORE, T HE ASSESSING OFFICER, AFTER CONSIDERING THE NORMAL EXPENDITURE OF FAMILY INCLUD ING THE EDUCATION OF THE CHILDREN MADE ADDITION OF RS.1 LAKH FOR THE ASSESSMENT YEARS 2000-01 TO 2005-06. SIMILARLY FOR THE ASSESSMENT YEAR 2006-07 AN ADDITION OF RS.1 LAK H WAS MADE BY THE ASSESSING OFFICER. HOWEVER, THE LD.REPRESENTATIVE FOR THE AS SESSEE SUBMITTED THAT ON APPEAL THE CIT(A) FOUND THAT THERE ARE OTHER FAMILY MEMBERS, W HO WERE ALSO CONTRIBUTING TOWARDS HOUSEHOLD EXPENSES. SINCE THE ASSESSING OFFICER MA DE THE ADDITION WITHOUT ANY POSITIVE EVIDENCE, THE CIT(A) HAS RIGHTLY RESTRICTED THE DIS ALLOWANCE TO RS.45,000 FOR THE YEAR UNDER CONSIDERATION. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND HAVE ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THOUGH ADDITION WAS MADE BY THE ASSESSING OFFICER FROM ASSESSMENT YEARS 2001-02 TO 2006-07 THE REVENU E HAS FILED THE APPEAL BEFORE THIS TRIBUNAL FOR THE ASSESSMENT YEAR 2005-06 ONLY. IT IS NOT KNOWN WHAT HAPPENED TO THE ITSS NO.66/RJT/2009 4 OTHER ASSESSMENT YEARS. IF THE CIT(A) HAS RESTRIC TED SIMILARLDISALLOWANCE IN RESPECT OF OTHER YEARS WHICH FALLS IN THE BLOCK PERIOD, THE RE VENUE CANNOT CHALLENGE THE ORDER OF CIT(A) FOR THIS YEAR. WE ARE CONSCIOUS THAT THE PR INCIPLES OF RES JUDICATA ARE NOT APPLICABLE TO INCOME-TAX PROCEEDINGS. HOWEVER, IT IS WELL SETTLED PRINCIPLES OF LAW THAT PUBLIC POLICY / JUDICIAL DISCIPLINE REQUIRES CONSIS TENCY IN JUDICIAL DECISIONS. THEREFORE, WHEN THE REVENUE ACCEPTED THE RESTRICTION MADE BY T HE CIT(A) IN OTHER ASSESSMENT YEARS WHICH FALL IN THE BLOCK PERIOD IT CANNOT CHAL LENGE SUCH RESTRICTION FOR THE ASSESSMENT YEAR 2005-06 ALONE. EVEN OTHERWISE AS R IGHTLY OBSERVED BY THE CIT(A), THERE IS NO MATERIAL AVAILABLE ON RECORD FOR MAKING ANY ADDITION IN THE HANDS OF THE ASSESSEE. IT IS ALSO NOT IN DISPUTE THAT THE OTHER FAMILY MEMBERS HAVE ALSO CONTRIBUTED TO THE HOUSEHOLD EXPENDITURE. IN VIEW OF THE ABOVE , WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF LOWER AUTHORITY. ACCOR DINGLY THE SAME IS CONFIRMED. 9. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 17-06-2011. SD/- SD/- (A.L. GEHLOT) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER RAJKOT, DT : 17 TH JUNE, 2011 PK/- COPY TO: 1. ASSESSEE 2. REVENUE 3. THE CIT(A)-IV, AHMEDABAD 4. THE CIT, CENTRAL-II. AHMEDABAD 5. THE DR, I.T.A.T., RAJKOT (TRUE COPY) BY ORDER ASSTT.REGISTRAR, ITAT, RAJKOT