Ashok Kumar Aggarwal, Panchkula v. Dy.Commissioner of Income Tax, Panchkula

ITA 1225/CHANDI/2016 | 2012-2013
Pronouncement Date: 29-11-2017 | Result: Allowed

Appeal Details

RSA Number 122521514 RSA 2016
Assessee PAN ABKPA9671N
Bench Chandigarh
Appeal Number ITA 1225/CHANDI/2016
Duration Of Justice 1 year(s) 3 day(s)
Appellant Ashok Kumar Aggarwal, Panchkula
Respondent Dy.Commissioner of Income Tax, Panchkula
Appeal Type Income Tax Appeal
Pronouncement Date 29-11-2017
Appeal Filed By Assessee
Tags No record found
Order Result Allowed
Bench Allotted Not Allotted
Tribunal Order Date 29-11-2017
Date Of Final Hearing 28-02-2017
Next Hearing Date 28-02-2017
First Hearing Date 28-02-2017
Assessment Year 2012-2013
Appeal Filed On 25-11-2016
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCHA CHANDIGARH BEFORE SHRI SANJAY GARG JUDICIAL MEMBER AND DR. B.R.R. KUMAR ACCOUNTANT MEMBER ITA NO.1225/CHD/2016 ASSESSMENT YEAR: 2012-13 SH. ASHOK KUMAR AGGARWAL VS. THE DCIT HOUSE NO. 931 SECTOR-8 PANCHKULA PANCHKULA PAN NO. ABKPA9671N (ASSESSEE) (RESPONDENT) ASSESSEE BY : SH. AMITOJ KAMBOJ REVENUE BY : SMT. CHANDRAKANTA DATE OF HEARING : 27/11/2017 DATE OF PRONOUNCEMENT : 29/11/2017 ORDER PER DR. B.R.R. KUMAR A.M. THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A) PANCHKULA DT. 26/09/2016. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THAT THE LD. CIT(A) HAS WRONGLY CONFIRMED THE AD DITION OF RS. 47 41 133/- IN THE SALE CONSIDERATION SHOWN IN THE COMPUTATION OF CAPI TAL GAIN OF LAND IGNORING THE FACT THAT THE SAID TRANSFER WAS OF BOTH LAND AN D BUILDING AND THE ASSESSEE HAVE CLAIMED THE SAID CONSIDERATION SEPARATELY IN T HE BUILDING UNDER THE BLOCK OF ASSETS. 2. THAT THE LD. CIT(A) IS WRONG IN DIRECTING THE LD . AO TO RECALCULATE THE TRANSFER EXPENSES ONLY BASED ON STAMP DUTY CHARGES PAID AND DISALLOWING THE OTHER EXPENSES CLAIMED I.E. LAND DEVELOPMENT CHARGES BEIN G ON ACCOUNT OF COST OF IMPROVEMENT AND COMMISSION CHARGES. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA VING INCOME FROM PROPRIETARY BUSINESS CAPITAL GAINS AND OTHER SOURC ES FILED ITS RETURN OF INCOME ON 30.08.2012 DECLARING INCOME OF RS.36 77 2 70/-. THE AO COMPLETED THE ASSESSMENT U/S 143(3) AT AN INCOME OF RS.85 95 740/- AFTER MAKING ADDITIONS TO THE INCOME ON VARIOUS ACCOUNTS. 4. GROUND NO. 1 RELATES TO THE ADDITION OF RS.47 41 133/- ON ACCOUNT OF SALE CONSIDERATION OF LAND ALONG WITH BRICK KILN. 5. THE AO NOTED THAT THE ASSESSEE HAD SOLD HIS LAND SITUATED AT BASMA & KHERI ON 13.09.2011 AND 14.09.2011 AND SHOWN SALE CONSIDERATION IN HIS 2 COMPUTATION OF INCOME OF RS.28 10 031/- RS.24 66 3 36/- AND RS.5.83.500/-. THE AO ASKED THE ASSESSEE TO PRODUCE THE COPIES OF REGISTERED DEEDS. 6. THE ASSESSEE COULD NOT PRODUCE THE SAME. THEREAF TER THE COPIES OF SALE DEEDS WERE OBTAINED FROM THE OFFICE OF SUB REG ISTRAR RAJPURA DERABASSI AND BANUR U/S 131 OF THE ACT. THE AO OBSE RVED THAT THE ASSESSEE HAD SOLD LAND AT KHERI FOR RS.61 31 000/- BUT THE SALE CONSIDERATION WAS SHOWN FOR RS. 30 49 836/- (RS. 24 66 336 + RS. 5 83 500/-) ONLY IN HIS COMPUTATION OF INCOME. ANOTHER LAND AT BASMA WAS SOLD FOR RS.44 700 000/- BUT THE SALE CONSIDERATION WAS SHOWN OF RS.28 10 031/-. IN VIEW OF LOWER CONSIDERATIONS SHOWN FOR COMPUTATION OF INCOME FROM CAPITAL GAINS I.E. RS.30 81 164/- FOR LAND OF KHERI AND RS. 16 59 969/- FOR LAND AT BASMA THE AO ASKED THE ASSESSEE TO EXPLAIN THE DISCREPANCIES AND PRODUCE E VIDENCES. 7. THE ASSESSEE REPLIED THAT THE LAND SOLD CONSISTS OF THE BRICK KILN TUBE WELL AND TUNNEL KILN ATTACHED TO IT. AO NOTED THAT IN NONE OF THE DEEDS THERE WAS ANY MENTION OF BUILDING ON THE SAID LAND. 8. AFTER CONSIDERING THE REPLY FILED BY THE ASSESSE E AND ON PERUSAL OF THE SALE DEEDS THE ASSESSING OFFICER HELD THAT TH E SALE DEED SPECIFICALLY MENTIONS THE AMOUNT BEING PAID FOR LAND AND BUILDIN G SEPARATELY. MOREOVER THE SALE DEED IN WHICH LAND AND BUILDING ARE SOLD AS A COMPOSITE UNIT CLEARLY GIVES THE DESCRIPTION OF TH E LAND AND BUILDING SEPARATELY. IN THE INSTANT CASE THE SALE DEED HAD ONLY DESCRIPTION OF THE LAND ALSO THE TOTAL AMOUNT OF THE -CONSIDERATION T ALLIED WITH THE VALUE OF LAND AS PER COLLECTOR RATE. THEREFORE THE CONSIDER ATIONS IN THE SALE DEEDS WERE ONLY FOR THE LANDS. THE AO OBSERVED THAT THE W HOLE SUBMISSION BY THE ASSESSEE WAS A DEVICE TO EVADE PAYMENT OF TAXES . ACCORDINGLY AN ADDITION OF RS.47 41 133/- WAS MADE TO THE RETURNED INCOME ON ACCOUNT OF DIFFERENCE IN VALUE OF SALE DEEDS AND FOR COMPUT ATION OF LONG TERM CAPITAL GAINS. 9. DURING THE PROCEEDINGS BEFORE THE LD. CIT(A) THE ASSESSEE SUBMITTED THAT THE ADDITION WAS MADE DUE TO THE FACT THAT THE COPIES OF THE REGISTRIES WERE NOT PRODUCED BEFORE THE AO AND COMP UTATION OF CAPITAL GAIN ON THE SAME WAS NOT PROVIDED. WHEREAS THE REA SON FOR NOT PRODUCING THE COPIES OF REGISTRIES WAS OF THE FACT THAT THE ASSESSEE WAS NOT AVAILABLE IN THE CITY DUE TO THE LOSS OF HIS MO THER IN LUDHIANA; AT THE TIME REQUEST FOR COPIES OF REGISTRIES WERE MADE I.E . AROUND 20.03.2015. 3 EVEN AFTER MENTAL AND PHYSICAL PRESSURE OF LOSING H IS MOTHER THE ASSESSEE WAS ABLE TO PROVIDE THE RESPONSE OF THE DISCREPANCI ES RAISED BY THE AO. THE LD. AO DID NOT CONSIDER THE AGREEMENT FOR COMPU TATION OF CAPITAL GAIN BUT GAVE EMPHASIS ON REGISTRY OF LAND ONLY. FU RTHER THE LD. AO DISAPPROVED THE COMPUTATION OF CAPITAL GAIN ON THE BASIS THAT THERE WAS NO MENTION OF SALE OF BUILDING UNDER REGISTRY OF LA ND WHEREAS THE ACTUAL TRANSFER OF ASSET WAS THROUGH AGREEMENT BETWEEN THE PARTIES. 10. BEFORE THE LD. CIT(A) THE ASSESSEE SUBMITTED TH AT AN AGREEMENT WAS MADE BETWEEN AA INFRA DEVELOPERS (P) LTD. (BUYER) A ND SH. ASHOK KUMAR AGGARWAL (SELLER). SH. ASHOKKUMAR AGGARWAL WAS RUNN ING BUSINESS OF MANUFACTURING OF BRICKS AND SEWERAGE PIPE AT VILLAG E KHERI GURNA PUNJAB UNDER THE NAME AND STYLE OF M/S A.A. BRICK C OMPANY. ON 05.09.2011 AN AGREEMENT WAS MADE FOR TRANSFER OF I NDUSTRIAL UNIT OF M/S AA BRICK CO. CONSISTING OF BUILDING PLANT & MACHIN ERY AND FURNITURE ALONGWITH LAND AT VILLAGE KHERI GURNA AND BASMA TO THE BUYER I.E. M/S A.A. INFRA DEVELOPERS PVT. LTD. THE CONSIDERATION O F THE INDUSTRIAL UNIT WAS FIXED FOR RS. 1 36 53 914/- FOR LAND BUILDING PLA NT & MACHINERY AND FURNITURE OF THE UNIT. THE FULL VALUE OF CONSIDERAT ION RECEIVED TO THE ASSESSEE WAS RS. 1 36 53 914/-. THE TOTAL OPENING W RITTEN DOWN VALUE OF THE INDUSTRIAL UNIT OF M/S A. A. BRICK CO. WAS RS.7 7 94 047/- WHICH WAS TRANSFERRED AND ASSET WAS REDUCED TO ZERO. THE TOTA L COST OF PURCHASE OF LAND AFTER INDEXATION WAS RS.45.78.281/-. SINCE THE ASSETS WERE REDUCED TO ZERO CAPITAL GAIN WAS COMPUTED AS PER SECTION 50 A ND SECTION 56 OF THE ACT. 11. BEFORE THE LD. CIT(A) THE ASSESSEE FURTHER SUBM ITTED THAT THE AO GAVE PREFERENCE TO THE SALE DEED BETWEEN M/S AA INF RA DEVELOPER (P) LTD. AND SH. ASHOK KUMAR AGGARWAL INSTEAD OF THE AG REEMENT. AS PER THE LD. AO THE SALE DEED GIVES DESCRIPTION OF THE LAND IN QUESTION ONLY. SINCE NO INFORMATION OR DESCRIPTION OF BUILDING OR MACHIN ERY WAS PROVIDED IN THE SALE DEED; THE SAME WAS ASSUMED TO BE SOLD SEPARATE LY. THE LD. AO HAD THOROUGHLY CHECKED THE CONSIDERATION RECEIVED AND T HE SAME WAS OF RS. 1 36.54 914/- FOR THE INDUSTRIAL UNIT BY M/S AA INF RA DEVELOPERS (P) LTD. AS PER THE AGREEMENT BETWEEN THE PARTIES. 12. THE ASSESSEE CONTENDED THAT THE LAND AND BUILDI NG ARE PART OF EACH OTHER THE SAME SHOULD BE CONSIDERED WHILE COMPUTIN G INCOME. FURTHER THERE WILL BE NO DIFFERENCE IN COMPUTATION OF CAPIT AL GAIN HAD THE AMOUNT OF RS. 1.06 01 000/- MAY BE CONSIDERED FOR O NLY LAND SINCE THE LOSS 4 ON BUILDING WILL BE SET OFF WITH THE GAIN ON SALE O F LAND. THE ASSESSEE CONTENDED THAT THE AO WAS NOT JUSTIFIED IN TAKING T HE OPTION OF THE SALE DEED BUT NOT CONSIDERING THE LOSS ON SALE OF BUILD ING WAS NOT JUSTIFIED. 13. THE LD. CIT(A) IN HIS ADJUDICATION HELD THAT TH E COPIES OF SALE DEEDS FOR LAND AT VILLAGE KHERI AND BASMA WERE NOT PRODUC ED AND THE ASSESSEE HAS NOT DECLARED THE ACTUAL SALE CONSIDERATION AS P ER THE DEEDS. THE SALE CONSIDERATIONS FOR LAND AT KHERI WAS RS.61 31 000/- AND FOR LAND AT BASMA FOR RS.44 70 000/- INSTEAD OF THE SALE CONSIDERATIO NS OF RS.30 49 836/- (24 66 336 + 5 83 500) AND RS.28 10 031/-RESPECTIVE LY AS SHOWN IN THE COMPUTATION OF INCOME. THE LD. CIT(A) HELD THAT THE ASSESSEE HAS SUBMITTED THAT THE INDUSTRIAL UNIT OWNED AS PROPRIE TARY BUSINESS M/S A.A. BRICK COMPANY WAS SOLD TO A.A. INFRA DEVELOPERS PVT . LTD. WHERE THE ASSESSEE HIMSELF IS PROMOTER OF THE COMPANY. 14. THE ORDER OF THE LD. CIT(A) WHILE CONFIRMING TH E ORDER OF THE ASSESSING OFFICER STATES AS UNDER: THE ASSETS INCLUDING BUILDING MACHINERY FURNITURE AS PER WRITTEN DOWN VALUE (WDV) WERE SOLD AS PER AGREEMENT FOR A FULL V ALUE OF CONSIDERATION OF RS. 1 36 53 914/-. THE ASSESSEE HAS COMPUTED A C APITAL GAIN ON SUCH SALE BY TAKING THE VALUE OF CONSIDERATION AS PER AG REEMENT. HOWEVER THE SALE OF BLOCKS OF ASSETS DOES NOT FALL UNDER CAPITA L GAIN RATHER ANY PROFIT DERIVED ON SUCH SALE IS CONSIDERED AS TAXABLE PROFI T AND ADDED TO THE INCOME. MOREOVER THERE ARE SEPARATE REGISTRATIONS FOR SALE DEED OF LAND WHERE THE AMOUNT OF SALE CONSIDERATIONS ARE MENTION ED. THE ASSESSEE HIMSELF HAS SHOWN CAPITAL GAINS ON SALE OF SUCH LAN DS IN ITS COMPUTATION OF INCOME SEPARATELY FOR SALE OF EACH PIECE OF LAND. S O IT IS CLEAR THAT THE SALE OF LAND WILL NOT FALL IN SALE OF ASSETS AS PER BLOCK OF ASSETS SHOWN IN THE BALANCE SHEET. THERE IS LIABILITY OF CAPITAL GAIN O N SALE OF LANDS WHICH HAS ALSO BEEN CONSIDERED IN THE . COMPUTATION OF INCOME FILED ALONGWITH THE RETURN. HOWEVER THE ASSESSEE HAS WRONGLY SHOWN THE SALE CONSIDERATION FOR THE COMPUTATION OF CAPITAL GAIN. BEFORE THE AO. THE PLEA WAS TAKEN THAT THE SALE CONSIDERATION INCLUDING LAND AND BUIL DING WHICH THE AO HAS CLEARLY FOUND THAT AS PER SALE DEED THERE IS NO SAL E OF BUILDING. THE AO'S OBSERVATION IS ALSO CORRECT THAT LAND AND BUILDING ARE SOLD AS COMPOSITE UNIT WHEREAS THE SALE DEEDS DEPICT ONLY SALE OF LAN D. SINCE THE ASSESSEE HAS NOT SHOWN THE ENTIRE VALUE OF SALE CONSIDERATIO NS ON SALE OF SUCH LANDS THEREFORE I DO NOT FIND ANY REASON TO DIFFE R WITH THE FINDING OF THE AO. HENCE THE ADDITION OF RS.47 41 133/- MADE BY THE A O IS CONFIRMED. 15. BEFORE US THE LD. AR RELIED ON THE ARGUMENTS TA KEN BEFORE THE LD. CIT(A) WHILE THE LD. DR RELIED HEAVILY ON THE ORDER OF THE LOWER AUTHORITIES. 16. WE HAVE GONE THROUGH THE ENTIRE MATERIAL PLACED BEFORE US. THERE HAS BEEN A DIFFERENCE IN THE STAND TAKEN BY THE ASS ESSING OFFICER IN DETERMINING THE CAPITAL GAIN. THE CAPITAL GAIN WAS CALCULATED SOLELY BASED ON THE VALUE OF THE LAND AS PER THE COLLECTOR RATE. SIMILARLY THE EMPHASIS GIVEN ON THE SALE DEED ONLY WITHOUT TAKING INTO CONSIDERATION THE PLANT AND MACHINERY BRICK KILN SITUATED IN TH E LAND. HENCE THE MATTER IS BEING REFERRED BACK TO THE FILE OF THE AS SESSING OFFICER FOR 5 VERIFICATION AND COMPUTATION OF CAPITAL GAINS AFTER TAKING THE VALUATION OF LAND & BUILDING TOGETHER AS A COMPOSITE UNIT. THERE FORE THIS GROUND OF APPEAL IS TREATED AS SET ASIDE. 17. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. 18. GROUND NO. 2 RELATES TO ADDITION OF RS.18 19 12 8/- ON ACCOUNT OF TRANSFER EXPENDITURE. 19. DURING ASSESSMENT PROCEEDINGS THE AO NOTED THA T THE ASSESSEE HAD CLAIMED TRANSFER EXPENSES IN THE COST OF ACQUIS ITION OF THE PROPERTIES SOLD BY HIM DURING THE YEAR UNDER CONSIDERATION. TH E AO ASKED THE ASSESSEE TO JUSTIFY THE TRANSFER EXPENSES CLAIMED T HAT WERE INCURRED AT THE TIME OF PURCHASE OF PROPERTY. THE ASSESSEE FILED IT S REPLY WHICH IS REPRODUCED IN PARA 3 OF THE ASSESSMENT ORDER. AFTER CONSIDERING THE SUBMISSION FILED BY THE ASSESSEE. THE AO OBSERVED T HAT THE ASSESSEE HAS NOT GIVEN ANY DETAIL OF THE EXPENSES ALONGWITH THE DOCUMENTARY EVIDENCES. THE EXPENSES CLAIMED BY THE ASSESSEE WER E FOUND TO BE ON THE HIGHER SIDE I.E. THE LAND AT KHERI WAS PURCHASE D ON 12.12.2000 FOR RS.3.25 000/- ON WHICH ASSESSEE CLAIMS TO HAVE INCU RRED SUM OF RS.2.10.000/- AS TRANSFER EXPENSES SIMILARLY THE LA ND AT BASMA WAS PURCHASED ON 16.08.2005 FOR RS. 1 50 000/- ON WHICH THE ASSESSEE CLAIMS TO HAVE INCURRED OF RS. 1 45.000/- AS TRANSFER EXPENSE S. AS THE ASSESSEE FAILED TO GIVE ANY DOCUMENTARY EVIDENCE THE EXPENSES CLAI MED BY THE ASSESSEE WERE RESTRICTED TO 30% OF THE EXPENSES CLA IMED AND REST 70% WERE DISALLOWED. 20. DURING APPELLATE PROCEEDINGS BEFORE THE LD. CI T(A) THE ASSESSEE SUBMITTED THAT THE DOCUMENTARY EVIDENCE ON THE TRAN SFER EXPENSES WAS ASKED VIDE ORDER SHEET ENTRY DATED 20.03.2015. THE DOCUMENTARY EVIDENCES WERE NOT PROVIDED AS THE ASSESSEE WAS OUT OF CITY. THE DETAILS OF EXPENSES ALONGWITH COPIES OF TWO RECEIPTS WERE S UBMITTED AT THE APPELLATE STAGE. THE EXPENSES OF PURCHASE IN LAND I NCLUDED STAMP DUTY CHARGES COMMISSION PAYMENT LAND LEVELING/MAINTENA NCE CHARGES. THE EXPENSES AT VILLAGE GHARAUNDA WERE PAID TO SH. RAJ BEER SINGH AND THE EXPENSES AT VILLAGE KHERI GURNA AND VILLAGE BASMA W ERE PAID TO SH. SWARN SINGH. THE ASSESSEE FURTHER SUBMITTED THAT TH ESE EXPENSES WERE RELATED TO ACQUISITION OF CAPITAL ASSET AND THE SAM E WERE PART OF COST OF ACQUISITION. 6 21. THE LD. CIT(A) HAS DIRECTED TO RE-COMPUTE THE D ISALLOWANCE AFTER GIVING BENEFIT ONLY ON CLAIM OF STAMP DUTY CHARGES AND NOT ON ANY ESTIMATION BASIS. 22. BEFORE US THE LD. AR RELIED ON THE ARGUMENTS TA KEN BEFORE THE LD. CIT(A) WHILE THE LD. DR RELIED ON THE ORDER OF THE LOWER AUTHORITIES. 23. WE HAVE GONE THROUGH THE MATERIAL PLACED BEFORE US. THE ASSESSEE HAS SUBMITTED DETAILS OF TRANSFER EXPENSES IN THE F ORM OF STAMP DUTY COMMISSION LAND DEVELOPMENT AND MISC. EXPENSES FRO M THE PERIODS FROM 1999 TO 2011. SINCE THE STAMP DUTY IS STATUTORY EXP ENSE AND A CERTAIN PERCENTAGE OF COMMISSION VARYING FROM 1% TO 2% ON L AND DEALS IS ALSO A NORMAL TREND IN THE LAND DEALS THE SAME MAY BE GIV EN BENEFIT OF. REGARDING THE LAND DEVELOPMENT AND OTHER MISC. EXPE NSES THE MATTER IS BEING SENT BACK TO THE FILE OF THE ASSESSING OFFICE R TO GIVE AN OPPORTUNITY TO THE ASSESSEE TO SUBMIT ANY DOCUMENTARY EVIDENCES OR PROOF THEREOF AND ALLOW REASONABLE EXPENDITURE BASED ON THE EVIDE NCES SUBMITTED. 24. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (SANJAY GARG) (B.R.R.KUMAR ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 29/11/2017 AG COPY TO: THE ASSESSEE THE RESPONDENT THE CIT THE CIT(A) THE DR