A.R.Sethumadhavan (INDL), Kumbakonam v. ITO, Kumbakonam

CO 17/CHNY/2010 | 2004-2005
Pronouncement Date: 21-10-2010 | Result: Dismissed

Appeal Details

RSA Number 1721723 RSA 2010
Assessee PAN AAMHS0733C
Bench Chennai
Appeal Number CO 17/CHNY/2010
Duration Of Justice 6 month(s)
Appellant A.R.Sethumadhavan (INDL), Kumbakonam
Respondent ITO, Kumbakonam
Appeal Type Cross Objection
Pronouncement Date 21-10-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted D
Tribunal Order Date 21-10-2010
Date Of Final Hearing 21-10-2010
Next Hearing Date 21-10-2010
Assessment Year 2004-2005
Appeal Filed On 21-04-2010
Judgment Text
IN THE INCOMETAX APPELLATE TRIBUNAL: D- BENCH:CHENN AI (BEFORE SHRI HARI OM MARATHA JUDICIAL M EMBER AND ABRAHAM P. GEORGE. ACCOUNTANT MEMBER 1) ITA NO.325/ MDS/2010 & C.O NO.16/MDS/10 ASST. YEAR 2004-05 AND 2) ITA NO.326/ MDS/2010 & C.O NO. 17/MDS/10 ASST. YEAR 2004-05 THE INCOME-TAX OFFICER WARD I(3) KUMBAKONAM VS 1)DR.A.R.SETHUMADHAVAN(HUF) & 2)DR.A.R.SETHUMADHAVAN(INDL.) 2 RAJAPANDI NAGAR KALLAPILLAI ST KUMBAKONAM PAN:AAMHS0733C & AASPS4279B (APPELLANT) (RESPONDENTS/CROSS-OBJECTORS) APPELLANT BY: RESPONDENT/CROSS OBJECTORS BY SRI K.E.B. RANGARAJAN JR.STANDING COUNSEL SHRI V.JAGADISAN ORDER PER BENCH: THESE ARE APPEALS OF THE REVENUE FOR ASSESSMENT YE AR 2004-05 AGAINST THE ORDERS OF THE CIT(A) DATED 29-12-2009. ASSESSEES CONCERNED ITA 325-6&CO16-17/MDS/2010 2 HAVE ALSO FILED CROSS-OBJECTIONS. SINCE THE GROUNDS TAKEN BY THE REVENUE IN BOTH THE APPEALS ARE SIMILAR AND EMANATE FROM SA ME SET OF FACTS THESE APPEALS AS WELL AS CROSS-OBJECTIONS ARE DISPOSED OF THROUGH A COMMON ORDER. 2. GRIEVANCE OF THE REVENUE IN BOTH THE APPEALS IS THAT THE CIT(A) HAD DELETED THE ADDITION MADE BY THE AO ENHANCING THE V ALUE OF LAND SOLD. ACCORDING TO THE REVENUE DURING THE COURSE OF A SU RVEY IN THE PREMISES OF M/S SUGAM MULTI SPECIALITY HOSPITAL BUYERS OF THE LAND A NOTE BOOK WAS FOUND WHEREIN THERE WAS AN ENTRY MENTIONING SITE PU RCHASE AND REGISTRATION FOR ` 76 08 650/-. ACCORDING TO THE REVENUE THE CIT(A) ERRED IN RELYING ON THE DECISION OF THE HONBLE PUNJAB & HAR YANA HIGH COURT IN THE CASE OF CIT VS. SATINDER KUMAR (250 ITR 484) WHICH HAD NO RELEVANCE HERE. 3. SHORT FACTS APROPOS ARE THAT THE ASSESSEES ARE DR.A.R.SETHUMADHAVAN IN HIS CAPACITY AS INDIVIDUAL AND IN HIS CAPACITY AS HUF. THEY HAD SOLD THEIR LANDS TO DR.S.SUNDARARAJAN AND SIX OTHERS ON 15- 12-2003 AND THE CONSIDERATION SHOWN AS FOR THE CONV EYANCE DEED WAS ` 42 LAKHS. AS PER THE ASSESSES THE BUYERS HAD PAID ` 6 LAKHS FOR THE PURCHASE. DURING THE COURSE OF SURVEY IN A HOSPITAL RUN BY TH E BUYERS CALLED SUGAM MULTI SPECIALITY HOSPITAL THERE WAS AN ENTRY FOUND IN THEIR BOOKS OF ACCOUNT AS PER WHICH THE SUM PAID FOR THE SITE PUR CHASE/REGISTRATION WAS ITA 325-6&CO16-17/MDS/2010 3 SHOWN AS ` 76 08 650/-. THE AO WAS THEREFORE OF THE OPINION THAT THE ACTUAL SALE CONSIDERATION RECEIVED BY THE ASSESSEE WAS ` 76 08 650/- AND NOT ` 42 LAKHS AS MENTIONED IN THE CONVEYANCE DEED. HE AL SO CONSIDERED A STATEMENT TAKEN FROM ONE OF THE BUIYERS DR.S.SUNDAR ARAJAN FOR COMING TO THIS CONCLUSION. HE THEREFORE COMPLETED THE ASSESS MENT CONSIDERING THE SALE CONSIDERATION AS ` 76 08 650/- AFTER DEDUCTING THE STAMP DUTY AND REGISTRATION EXPENSES OF ` 3 78 000/- AND REWORKED THE CAPITALS GAINS TAX. 4. IN THEIR APPEAL BEFORE THE CIT(A) ARGUMENT OF T HE ASSESSEES WAS THAT THE AO HAD PROCEEDED ON THE BASIS OF A STATEME NT RECORDED FROM ONE OF THE VENDORS NAMELY DR.S.SUNDARAJAN DURING THE CO URSE OF SURVEY. ACCORDING TO THEM SUCH A STATEMENT COULD NOT BE CO NSIDERED AS EVIDENCE FOR THE PURPOSE OF ASSESSMENT. ASSESSEE ALSO BROUG HT TO THE NOTICE OF THE CIT(A) THAT ASSESSEE HAD DENIED RECEIPT OF ANY ON-M ONEY FOR SALE OF THE LAND AND WHAT WAS STATED IN CONVEYANCE DEED WAS THE ACTUAL AMOUNT RECEIVED. FURTHER ACCORDING TO HIM LAND WAS NEVER PURCHASED BY M/S.SUGAM SUPER SPECIALITY HOSPITAL BUT BY SEVEN VE NDORS IN THEIR INDIVIDUAL NAMES. SPECIFICALLY IT WAS POINTED OUT T HAT THE ENTRY IN THE NOTE BOOK BASED ON WHICH THE SALE CONSIDERATION WAS ENHA NCED PERTAINED TO A LATER ACCOUNTING YEAR. LD. CIT(A) WAS APPRECIATIVE OF THESE CONTENTIONS. ACCORDING TO HIM THERE WAS NO BASIS FOR THE ADDITI ON MADE BY THE AO SINCE THERE WAS NO EVIDENCE FOR ANY ON MONEY RECEIV ED BY THE ASSESSEE. ITA 325-6&CO16-17/MDS/2010 4 IN HIS OPINION BASED ON AN ENTRY IN THE NOTE BOOK THE AO OUGHT NOT HAVE CAME TO A CONCLUSION THAT ANY ON MONEY WAS RECEIVED BY THE ASSESSEE. HE THEREFORE DELETED THE ADDITION MADE BY THE AO ENHANCING THE SALE CONSIDERATION TO ` 76 08 650/-. 5. NOW BEFORE US THE LD. DR SUBMITTED THAT ONE OF THE BUYERS NAMELY DR.S.SUNDARARAJAN HAD SPDCIFICALLY MENTIONED THAT T HE ENTRY IN THE NOTE BOOK OF M/S SUGAM SUPER SPECIALITY HOSPITAL MENTION ING SITE PURCHASE/REGISTRATION FOR ` 76 08 650/- REFERRED TO COST INCURRED FOR THE PURCHASE OF THE PROPERTY FROM THE ASSESSEE. ACCORDI NG TO HIM THEREFORE THE ENTRY IN THE BOOKS OF M/S SUGAM SUPER SPECIALIT Y HOSPITAL WAS SUFFICIENTLY CORROBORATED. HE THEREFORE ARGUED TH AT THE LD. CIT(A) ERRED IN DELETING THE ENHANCEMENT OF CAPITAL GAINS. 6. PER CONTRA THE LD. AR SUBMITTED THAT THE ASSESS EE HAD CLEARLY DENIED RECEIPT OF ANY ON MONEY. REFERRING TO QUESTI ON NO.27 PUT TO THE ASSESSEE BY THE AO DURING THE COURSE OF HIS EXAMIN ATION LD. COUNSEL SUBMITTED THAT ASSESSEE HAD CLEARLY MENTIONED THE C ONSIDERATION AS ` 42 LAKHS. AGAIN REFERRING TO THE ANSWER TO QUESTION NO .30. THE LD. COUNSEL SUBMITTED THAT THE ASSESSEE HAD DENIED RECEIPT OF A NY MONEY OTHER THAN ` 42 LAKHS. REFERRING TO THE SWORN STATEMENT GIVEN BY DR S.SUNDARARAJAN ONE OF THE BUYERS LD. COUNSEL SUBMITTED THAT THIS WAS RECORDED DURING THE COURSE OF SURVEY DONE IN THE PREMISES OF M/S SUGAM SUPER SPECIALITY ITA 325-6&CO16-17/MDS/2010 5 HOSPITAL AND AS PER THE DECISION OF THE HONBLE JUR ISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. S. KHADER KHAN SON (300 ITR 157 ) NO EVIDENTIARY VALUE COULD BE ATTACHED TO A STATEMENT TAKEN AT THE TIME OF SURVEY. 7. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL S UBMISSIONS. THE ENTRY IN THE BOOKS OF ACCOUNT FOUND AT THE TIME OF SURVEY IN M/S SUGAM SUPER SPECIALITY HOSPITAL MENTIONED AS UNDER: SITE PURCHASE/REGISTRATION ` 76 08 650/- COPY OF THE RELEVANT LEDGER PAGE PRODUCED BEFORE US BY THE LD. DR WOULD SHOW THAT THE ENTRY WAS MADE ON A DATE IMMEDIATELY PRIOR TO 13-12-2004. REPLY GIVEN BY DR.S.SUNDARARAJAN IN ANSWER TO QUEST ION NO.23 AGAIN PRODUCED BY LD. DR IS REPRODUCED HEREUNDER: Q.NO.23: YOU HAVE REPLIED TO Q.NO.16 THAT THE BOOKS MARKED AS PR/B&D/F-13 CONTAINS THE CONSTRUCTION EXPENDITURES NOTE BOOK OF SUGAM MLTI SPECIALITY HOSPITAL. IN THIS NOTE BOOK IN PAGE-3 FIRST LINE YOU HAVE WRITTEN AS SITE PURCHASWE/REGISTRATION FO R ` 76 08 650/-. THIS REFERS TO WHAT? EXPLAIN. ANS.NO.23: IN THE ABOVEMENTIONED NOTE BOOK ` 76 08 650/- REFERS TO THE PURCHASE COST OF THE SITE FOR THE ABOVE MOTIONE D HOSPITAL BUILDING. REGISTRATION EXPENSES COMPANY REGISTRATIO N AND FIRM REGISTRATION EXPENSES. BASED ON THESE TWO THE AO CAME TO A CONCLUSION THA T THE CONSIDERATION MENTIONED IN THE CONVEYANCE DEED OF ` 42 LAKHS WAS INCORRECT AND ACTUAL ITA 325-6&CO16-17/MDS/2010 6 CONSIDERATION WAS ` 76 08 650/-. IN THE FIRST PLACE IF WE LOOK AT THE A NSWER GIVEN BY DR.S.SUNDARARAJAN IT DOES NOT SAY THAT IT PERTAINED TO THE SAME LAND WHICH WAS PURCHASED FROM THE ASSESSEE. IN THE SECOND PLACE THE ENTRY IN THE BOOKS OF ACCOUNT OF M/S SUGAM MULTI SP ECIALITY HOSPITAL WAS IN DECEMBER 2004 WHEREAS THE SALE WAS EFFECTED IN THE PREVIOUS YEAR RELEVANT TO ASST. YEAR 2004-05 I.E. DURING THE COU RSE OF PREVIOUS YEAR ENDING 31-03-2004. FURTHER HONBLE JURISDICTIONAL H IGH COURT HAD CLEARLY HELD THAT NO EVIDENTIARY VALUE COULD BE ATTACHED TO A STATEMENT RECORDED DURING THE SURVEY UNDER SEC.133A OF THE ACT IN THE CASE OF S.KHADER KHAN SON (SUPRA). THUS IN OUR OPINION THE SUBSTITUTION OF THE CONSIDERATION AS SHOWN IN THE CONVEYANCE DEED BY AN AMOUNT WHICH WAS RECORDED BY A THIRD PARTY IN A LATER YEAR COULD NOT BE JUSTIFIE D. THERE IS NO EVIDENCE WITH THE AO TO SHOW THAT THE ENTRIES IN THE BOOKS OF ACC OUNT OF M/S SUGAM SUPER SPECIALITY HOSPITAL PERTAINED TO THE LAND PUR CHASED BY DR. S. SUNDARARAJAN AND SEVEN OTHERS FROM THE ASSESSEE DUR ING THE RELEVANT PREVIOUS YEAR. WE ARE THEREFORE OF THE OPINION THAT THE CIT(A) WAS JUSTIFIED IN DELETING THE ENHANCEMENT OF CAPITAL GAINS MADE B Y THE AO. NO INTERFERENCE IS CALLED FOR. APPEALS OF THE REVENUE STAND DISMISSED. 8. IN THE CROSS OBJECTIONS OF THE ASSESSES THE Y HAVE QUESTIONED THE REOPENING DONE. LD. COUNSEL FOR THE ASSESSES SUBMIT TED THAT HE WAS NOT ITA 325-6&CO16-17/MDS/2010 7 PRESSING THE CROSS OBJECTIONS. THEREFORE THE CROSS OBJECTIONS ARE DISMISSED AS NOT PRESSED. 9. TO SUMMARISE THE RESULT APPEALS OF THE REVENUE AS WELL AS CROSS OBJECTIONS OF THE ASSESSEES ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 21 -10-2010 . SD/- SD/- (HARI OM MARATHA) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI: 21 ST OCTOBER 2010 NBR CC: ASSESSEES/ ASSESSING OFFICER/ CIT(A)/ CIT/ D.R/ GUARD FILE.