Gopichand Chhabaria, Ahmedabad v. The CIT,A'bad-I,., Ahmedabad

ITA 1285/AHD/2013 | 2008-2009
Pronouncement Date: 16-11-2017 | Result: Allowed

Appeal Details

RSA Number 128520514 RSA 2013
Assessee PAN AAKPC1256A
Bench Ahmedabad
Appeal Number ITA 1285/AHD/2013
Duration Of Justice 4 year(s) 6 month(s) 10 day(s)
Appellant Gopichand Chhabaria, Ahmedabad
Respondent The CIT,A'bad-I,., Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 16-11-2017
Appeal Filed By Assessee
Tags No record found
Order Result Allowed
Bench Allotted D
Tribunal Order Date 16-11-2017
Date Of Final Hearing 01-08-2017
Next Hearing Date 01-08-2017
First Hearing Date 01-08-2017
Assessment Year 2008-2009
Appeal Filed On 06-05-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL BENCH D AHMEDABAD BEFORE SHRI MAHAVIR PRASAD JUDICIAL MEMBER AND SHRI AMARJIT SINGH JUDICIAL MEMBER ITA.NO.1285/AHD/2013 / ASSTT.YEAR : 2008-09 SHRI GOPICHAND CHHABARIA SHOP NO.5 SINDHI CLOTH MARKET B/H. REVADI BAZAR POST OFFICE KALUPUR AHMEDABAD 380 001. PAN : AAKPC 1256 A VS CIT - I AHMEDABAD. ITA NO.433/AHD/2016 / ASSTT.YEAR : 2008-09 SHRI GOPICHAND CHHABARIA SHOP NO.5 SINDHI CLOTH MARKET B/H. REVADI BAZAR POST OFFICE KALUPUR AHMEDABAD 380 001. VS ITO WARD - 2(1) NOW WARD-1(2)(2) AMBAWADI AHMEDABAD. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI HARDIK VORA AR REVENUE BY : VASUNDHARA UPMANYA CIT - DR / DATE OF HEARING : 30/10/2017 / DATE OF PRONOUNCEMENT: 16/11/2017 !'/ O R D E R PER MAHAVIR PRASAD JUDICIAL MEMBER: BOTH APPEALS ARE PREFERRED BY THE ASSESSEE AGAINST ORDER OF THE LD.CIT-I AHMEDABAD. ITA NO.1285/AHD/2013 AND 433/AHD/2016 2 2. IN BOTH THE APPEALS FACTS AND CIRCUMSTANCES ARE SIMILAR. THEREFORE FOR THE SAKE OF CONVENIENCE WE WOULD LIKE TO DISPOSE OF MATTERS WITH THIS CONSOLIDATED ORDER. 3. IN ITA NO.1285/AHD/2013 THE ASSESSEE HAS TAKEN F OLLOWING GROUNDS: 1.1 THAT THE ORDER PASSED BY HONORABLE COMMISSIONER OF INCOME TAX IS UNTENABLE IN LAW. HONORABLE COMMISSIONER HAS WRO NGLY INVOKED SEC. 263 OF THE ACT. 1.2 THE ASSESSING OFFICER HAD ALREADY CALLED FOR AN D EXAMINED VARIOUS DETAILS ABOUT CAPITAL GAIN ON SALE OF BUNGLOW. APPE LLANT HAD MADE DETAILED SUBMISSIONS TO THE ASSESSING OFFICER. APPE LLANT HAD SUBMITTED VARIOUS DETAILS INCLUDING AFFIDAVIT BY HIM CONFIRMI NG THE SALE PRICE. FURTHER ALL THE EVIDENCES IN CONNECTION WITH SALE DEED OF RS. 1 37 00 000/- WHICH WAS NOT EXECUTED AT ALL HAVE BE EN FILED WITH THE ASSESSING OFFICER. THE ASSESSING OFFICER HAS PASSED THE ORDER AFTER EVALUATING ALL THESE EVIDENCES AND CAM TO CONCLUSIO N THAT THE SALE DEED OF RS. 1 37 00 000/- HAS NO EFFECT AS THE SAME WAS NOT EXECUTED AT ALL. THE APPELLANT THEREFORE SUBMITS NO ACTION NOW CAN B E TAKEN U/S. 263 OF THE ACT. 2.1 WITHOUT PREJUDICE TO THE ABOVE THE APPELLANT R ESPECTFULLY SUBMITS THAT HE HAD EXECUTED SALE DEED FOR RS. 3 70 00 000/ - ONLY ON WHICH LONG TERM CAPITAL GAIN IS COMPUTED. THERE CANNOT BE TWO REGISTERED DEEDS FOR THE SAME PROPERTY TO BE EXECUTED ON THE SAME DAY. T HE PURCHASERS HAVE CONFIRMED BY AFFIDAVIT THAT NO DEED OF RS. 1 3 7 00 000/- IS IN FACT EXECUTED NOR ANY SALE CONSIDERATION IN EXCESS OF RS . 3 70 00 000/- IS PAID TO SELLERS. IN VIEW OF CATEGORICAL UNDERTAKING OF THE PURCHASERS IT IS RESPECTFULLY SUBMITTED THAT THE CAPITAL GAIN SHOULD BE COMPUTED ONLY WITH REFERENCE TO SALE DEED OF RS. 3 70 00 000/-. 2.2 THE APPELLANT REFERS AND RELIES VARIOUS SUBMISS IONS MADE BEFORE HONORABLE CIT AND REQUEST THAT THE SAME MAY BE SPEC IFICALLY TREATED AS AGITATED HERE ALSO. 2.3 THE APPELLANT THEREFORE RESPECTFULLY SUBMITS TH AT THE ORDER PASSED BY HONORABLE CIT U/S. 263 OF THE ACT BE QUASHED. 3.1 THE APPELLANT CRAVES LEAVE TO ADD TO A LTER OR TO AMEND ANY OF THE GROUNDS OF APPEAL BEFORE FINAL HEARING OF APPEA L. ITA NO.1285/AHD/2013 AND 433/AHD/2016 3 4. FACTS OF THE CASE ARE THAT RETURN OF INCOME DECL ARING TOTAL INCOME OF RS.2 31 950/-WAS FILED ON 30.03.2009. THE SAME WAS PROCESSED U/S 143(1) OF THE I.T. ACT 1961. THE CASE WAS SELECTED FOR SCRUT INY AND A NOTICE U/S. 143(2) ISSUED ON 15.09.2009 FIXING HEARING ON 30.09.2009 A ND DULY SERVED BY RPAD. DUE TO CHANGE OF INCUMBENT A FRESH NOTICE U/S 142(1) WAS ISSUED ON 06.07.2010 DULY SERVED TO THE ASSESSEE. THE ASSE SSEE IS DEALING IN CLOTHS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS VARIOUS DETAILS IN RELATION TO THE INCOME DERIVED BY THE ASSESSEE HAVE BEEN CALLED FOR . THE DETAILS CALLED FOR HAVE BEEN DULY SUBMITTED BY THE ASSESSEE WHICH HAVE BEEN VERIFIED. BASED ON THE VERIFICATION OF DETAILS AND SUBMISSIONS FURNISH ED BY THE ASSESSEE THE ASSESSMENT PROCEEDING WAS COMPLETED SUBJECT TO THE FOLLOWING OBSERVATIONS/FINDINGS. AFTER DISCUSSION AND MATERIA L AVAILABLE ON RECORD TOTAL INCOME OF THE ASSESSEE IS COMPUTED AS UNDER: TOTAL INCOME AS PER RETURN OF INCOME RS.2 31 950/- TOTAL ASSESSED INCOME RS.2 31 9 50/- 5. THEREAFTER THE LD.CIT HAS CALLED FOR AND EXAMIN ED RECORD OF ASSESSMENT PROCEEDINGS FOR THE ASSTT.YEAR 2008-09. IN THIS CASE THE LD.CIT WAS OF THE OPINION THAT THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) OF THE ACT ON 31.12.2010 BY ITO WARD-2(1) AHMEDABAD DETERMINING THE TOTAL INCOME AT RS.2 31 950/- WAS ERRONEOUS IN SO FAR AS IT WAS PREJUDICIAL TO THE INTEREST OF REVENUE ON THE FOLLOWING GROUNDS: 'THE ASSESSEE HAD ONLY ACCOUNTED FOR THE SALE OF LA ND VALUED AT RS 3.70 CRORES AND NOT ACCOUNTED FOR THE CAPITAL GAINS ARISING FROM TH E SALE DEED OF SUPERSTRUCTURE VALUED AT RS.1.37 CRORE. THE ASSESSEE HAD TAKEN A P LEA THAT SALE DEED OF RS. 1.37 CRORES EXECUTED ON 31.01.2008 WAS ULTIMATELY CANCEL LED AS PER THE CANCELLATION DEED DATED 31.12.2010 AND HENCE THE ASSESSEE DID N OT RECEIVE ANY AMOUNT RESULTING IN CAPITAL GAINS. ITA NO.1285/AHD/2013 AND 433/AHD/2016 4 HOWEVER WHAT IS NOTICEABLE IS THAT THE SALE DEEDS OF RS.3.70 CRORES FOR LAND AND RS.1.37 CRORES FOR SUPER STRUCTURE WERE EXECUTED ON 31.01.2008 (AY 2008-09) WHEREAS THE DEED CANCELLING THE SALE DEED OF SUPERS TRUCTURE (RS.1.37 CRORES) WAS EXECUTED ON 31.12.2010. THE ORDER U/S 143(3) WAS AL SO PASSED ON 31.12.2010. HENCE IT IS EVIDENT THAT THE CANCELLATION DEED HAS BEEN EXECUTED AFTER ALMOST THREE YEARS FROM THE YEAR IN WHICH THE ORIGINAL DEED WAS EXECUTED (31.01.2008) AS AN AFTERTHOUGHT BY THE ASSESSEE DURING ASSESSMENT PROC EEDINGS. THE ASSESSEE IS LIKELY TO BE WELL AWARE WHILE EXECUTING THE TWO DEEDS AND THERE IS NO SCOPE OF BELIEVING THAT THE DEED OF RS.1.37 CRORES WAS EXECUTED BY MIS TAKE. THEREFORE THE ACTUAL INTENTION OF THE ASSESSEE AND THE TAXABILITY OF PRO FITS IN AY 2008-09 ON ACCRUAL BASIS DUE TO EXECUTION OF SALE DEED OF RS.1.37 CROR ES ON 31.08.2008 NEED TO BE ASCERTAINED WITH REQUISITE EVIDENCES.' 6. THEREAFTER THE LD.CIT ISSUED A NOTICE TO THE AS SESSEE. IN RESPONSE TO NOTICE UNDER SECTION 263 THE ASSESSEE REPLIED BEFO RE THE LD.CIT AS FOLLOWS: 3. THE BRIEF FACTS ARE THAT THE RETURN OF INCOME W AS FILED FOR A.Y.2008- 09 DECLARING INCOME OF RS.2 31 950/-. THE ASSESSMEN T U/S 143(3) WAS MADE ON 31-12-2010 ACCEPTING THE RETURNED INCOME. I N AN OFFICE NOTE APPENDED TO THE ORDER IT WAS RECORDED BY THE A.O. THAT INFORMATION WAS RECEIVED TO THE EFFECT THAT IN RESPECT OF THE S AME PROPERTY VIZ (SURVEY NO. 1298 T.P. SCHEME NO.15 FINAL PLOT NO. 173 FOR LAND AND 2 BUNGLOWS KNOWN AS 'DWARKESH' HAVING LAND AREA OF 11 30.50 SQ. METER AND CONSTRUCTED AREA OF TWIN BUNGLOWS OF 894.90 SQ. METERS) TWO SALE DEEDS HAD BEEN EXECUTED ON THE SAME DAY SEPARATELY FOR SALE OF LAND (RS.3.70 CRORES) AND FOR SALE OF SUPER-STRUCTURE (R S.1.37 CRORES). THESE TWO REGISTRATIONS AT SR. NO.1229/08 AND 1231/08 WER E CONFIRMED BY THE SUB-REGISTRAR ON INQUIRY MADE BY THE A.O. A SHOW CA USE NOTICE WAS THEREAFTER SERVED TO THE ASSESSEE CALLING UPON HIM TO SHOW CAUSE WHY THE SALE AT RS.1.37 CRORE SHOULD NOT BE CONSIDERED AS CAPITAL GAIN SINCE THE SAME HAD NOT BEEN DISCLOSED IN THE RETURN. THE ASSESSEE'S EXPLANATION WAS THAT THE LATTER REGISTRATION AT DOC UMENT NO. 1231/08 FOR RS.1.37 CRORES WAS ERRONEOUSLY EXECUTED. AFFIDA VITS WERE FILED BY THE PURCHASERS TO THE EFFECT THAT NO CONSIDERATION HAD PASSED EXCEPT RS.3.70 CRORES. BASED ON THE AFFIDAVIT OF THE PURCH ASER THE BANK STATEMENT OF THE ASSESSEE AND THE AVERMENT OF THE A SSESSEE THAT THE SECOND REGISTRATION WAS ERRONEOUS THE A.O. ACCEPTE D THE CONTENTION OF THE ASSESSEE AND DID NOT INCLUDE THE RECEIPT FROM T HE SECOND SALE IN THE TAXABLE INCOME FOR THE YEAR. IN THE REVISIONARY PRO CEEDINGS IT WAS SUBMITTED BY THE ID. AR THAT THE ASSESSEE CAME TO K NOW ABOUT THE SECOND SALE DOCUMENT FOR THE FIRST TIME ON RECEIPT OF NOTICE FROM THE ITA NO.1285/AHD/2013 AND 433/AHD/2016 5 A.O. THE FACT OF THE SECOND SALE WAS DENIED AND THE SAME ARGUMENTS WERE PUT FORTH NAMELY THAT (I) THE ASSESSEE HAD NO KNOWLEDGE OF THE SECOND DEAL AND (II) THE PURCHASERS OF THE PROPERTY KANEKLETA UMENGBHAI THAKKER AND UMANGBHAI HIRALALTHAKKER HAD FILED AFFIDAVITS STATING THAT THEY PAID ONLY RS.3.70 CROR ES AND THAT THE SALE DEED OF RS. 1.37 CRORES WAS EXECUTED BY MISTAKE. HE NCE NO INCOME IN RESPECT OF THE SECOND SALE ACCRUED TO THE ASSESSEE. 7. BUT THE LD.CIT WAS NO AGREED WITH CONTENTIONS OF THE ASSESSEE AND DIRECTED THE AO TO MAKE FRESH ASSESSMENT OF TOTAL I NCOME OF THE ASSESSEE FOR THE SAID ASSESSMENT YEAR. THEREAFTER THE LD.AO CA NCELLED CAPITAL GAINS AND TOTAL INCOME WAS ASSESSED AT RS.36 56 950/- PURSUAN T TO THE ORDER OF THE LD.CIT. AGAINST THE SAID ORDER ASSESSEE PREFERRED APPEAL BUT WITH NO FRUITFUL RESULTS. 8. WE HAVE GONE THROUGH THE RECORD AND RELEVANT ORD ERS. IN THIS CASE APPELLANT HAD SOLD A BUNGALOW LOCATED AT SURVEY BNO .1298 T.P.SCHEME NO.15 FINAL PLOT NO.173. IT WAS HAVING LAND AREA OF 1130.50 SQ.METERS AND CONSTRUCTED AREA OF 894.90 SQ.METERS. THE APPELLAN T SOLD PROPERTY FOR RS.3 70 00 000/-. THE SALE DEED WAS REGISTERED VID E ENTRY NO.1229. THE APPELLANT WAS HAVING 1/5 TH SHARE IN THE PROPERTY. APPELLANT SHOWN SALE CONSIDERATION FOR RS.74 00 000/- (3 70 00 000 * 20% ). DURING THE ASSESSMENT PROCEEDINGS UNDER SECTION 143(3) THE AO ISSUED A N OTICE TO THE ASSESSEE THAT ANOTHER SALE DEED WAS ALSO REGISTERED FOR THIS PROP ERTY FOR RS.1.37 CRORES VIDE ENTRY NO.1231. IT WAS MENTIONED IN THIS SECOND DEE D THAT IT WAS EXECUTED FOR CONSTRUCTION ONLY. APPELLANT WAS NEVER AWARE OF TH IS SALE DEED BEFORE THIS NOTICE. HE HAD NEITHER EXECUTED SUCH DEED NOR RECE IVED ANY SALE CONSIDERATION FOR THIS DEED. THEREFORE ON COMING T O KNOW ABOUT THIS DEED HE MADE AN AFFIDAVIT CONFIRMING THAT SECOND SALE DEED WAS FAKE. HE ALSO FILED CIVIL SUIT AND CRIMINAL SUITS AGAINST PURCHASER OF THE PROPERTY UMANG H. ITA NO.1285/AHD/2013 AND 433/AHD/2016 6 THAKKAR AND KANAKLATA THAKKAR FOR COMMITTING FRAUD. APPELLANTS SUBMITTED THAT HE HAS NOT EXECUTED THE SECOND SALE DEED. FUR THER IN THE FIRST SALE DEED ITSELF IT WAS MENTIONED THAT DEED WAS FOR LAND AND BUILDING THEREON. THERE CANNOT BE ANOTHER SALE DEED FOR THE SAME BUILDING. IN CIVIL SUIT NO.1816 OF 2011 WHICH WAS DECIDED ON 4.1.2013 A COMPROMISE W AS ENTERED INTO BY BOTH THE PARTIES AND IT WAS AGREED BY BOTH THE PARTIES T HAT THEY ARE NOT THE EXECUTORS OF DOCUMENTS FOR RS.1 37 00 000/- REGISTERED VIDE S ERIAL NO.1231 AND THE SAID DOCUMENT BE DECLARED AS INVALID NON EST ILLEGAL AND NOT BINDING TO THE PLAINTIFF. IN OUR CONSIDERED VIEW THAT IN VIEW OF CIVIL SUIT JUDGMENT BY THE CIVIL COURT THERE CANNOT BE ANY ADDITION FOR SHARE IN SALE CONSIDERATION OF RS.1 37 00 000/-. THEREFORE WE ARE OF THE CONSIDE RED OPINION THAT ORDER UNDER SECTION 263 PASSED BY THE LD.CIT NEEDS TO BE QUASHED. ACCORDINGLY WE ALLOW THE APPEAL OF THE ASSESSEE. 9. SO FAR AS ITA NO.433/AHD/2016 IS CONCERNED THE GROUNDS ARE COMMON AND SINCE WE HAVE DECIDED THE MATTER IN FAVOUR OF T HE ASSESSEE THIS APPEAL IS ALSO ALLOWED. 10. IN THE RESULT BOTH APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE COURT ON 16 TH NOVEMBER 2017 AT AHMEDABAD. SD/- SD/- ( AMARJIT SINGH ) ACCOUNTANT MEMBER ( MAHAVIR PRASAD ) JUDICIAL MEMBER AHMEDABAD; DATED 16/11/2017