ITO,, Kaithal v. Sham Lal, Cheeka

ITA 132/CHANDI/2009 | 2005-2006
Pronouncement Date: 31-03-2011 | Result: Dismissed

Appeal Details

RSA Number 13221514 RSA 2009
Assessee PAN AGPPS9681A
Bench Chandigarh
Appeal Number ITA 132/CHANDI/2009
Duration Of Justice 2 year(s) 2 month(s) 3 day(s)
Appellant ITO,, Kaithal
Respondent Sham Lal, Cheeka
Appeal Type Income Tax Appeal
Pronouncement Date 31-03-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 31-03-2011
Date Of Final Hearing 09-02-2011
Next Hearing Date 09-02-2011
Assessment Year 2005-2006
Appeal Filed On 28-01-2009
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES B CHANDIGARH BEFORE SHRI D.K.SRIVASTAVA ACCOUNTANT MEMBER AND MS SUSHMA CHOWLA JUDICIAL MEMBER ITA NO.71/CHD/2009 ASSESSMENT YEAR: 2005-06 SHRI SHAM LAL VS. THE ITO WARD-3 PROP. M/S SINGLA PUMPS & PIPES KAITHAL CHEEKA PAN NO. AGPPS9681A & ITA NO.132/CHD/2009 ASSESSMENT YEAR: 2005-06 THE ITO VS. SHRI SHAM LAL KAITHAL PROP. M/S SINGLA PUMPS & PIPES CHEEKA PAN NO. AGPPS9681A (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUDHIR SEHGAL RESPONDENT BY: SMT. SARITA KUMARI ORDER PER SUSHMA CHOWLA JM THE APPEAL BY THE ASSESSEE IS AGAINST THE ORDER OF CIT(A) KARNAL RELATING TO ASSESSMENT YEAR 28.11.2008 AGAINST THE ORDER PASSED UNDER SECTION 143(3) OF THE I.T. ACT 1961. THE REVENUE H AS FILED A CROSS APPEAL AGAINST THE SAID ORDER. 2 2. BOTH THE APPEALS RELATING TO THE ASSESSEE AND RE VENUE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLID ATE ORDER FOR THE SAKE OF CONVENIENCE 3. THE GROUND NOS 1 2 & 6 RAISED BY THE LD. COUNSE L FOR THE ASSESSEE WERE NOT PRESSED AND HENCE THE SAME ARE DISMISSED. THE GROUND NOS. 7 TO 10 BEING GENERAL IN NATURE ARE ALSO DISMISSED. 4. THE OTHER GROUNDS RAISED BY THE ASSESSEE REMAINI NG FOR ADJUDICATION ARE AS UNDER:- 3. THAT NOTWITHSTANDING ABOVE SAID GROUNDS OF APPEAL T HE LD. CIT(A) KARNAL HAS ERRED IN ESTIMATING THE COST OF AGRICULTURAL LAND @ RS. 50 000/- PER ACRE AS ON 1.4.1981 AGAINST AVERAGE COST OF RS. 1 28 391/- PER ACRE ON THE BASIS OF SEVEN REGISTRATION DEEDS SHOWN BY THE APPELLANT. 4. THAT THE LD. CIT(A) KARNAL HAS ALSO ERRED IN NOT ALLOWING BENEFIT OF COST OF IMPROVEMENT ON THE AGRICULTURAL LAND IN RESPECT OF CONSTRUCTION OF HOU SES ETC. EXCEPT ALLOWING COST OF TUBE WELL TO THE TUNE OF RS. 10 000/- WHICH IS VERY LESS. 5. THAT THE LD. CIT(A) KARNAL HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN MAKING ADDIT ION ON ACCOUNT OF CREDITOR OF M/S GARG TRADERS TO THE T UNE OF RS. 3348/- AND ALSO IN MAKING DISALLOWANCE OF RS . 8800/- OUT OF SALARY. 9. THAT THE PENALTY PROCEEDINGS U/S 271 (1)(C) OF THE ACT HAS BEEN WRONGLY INITIATED AND INTER U/S 234B WRO NGLY CHARGED . 4. THE GROUNDS OF APPEAL RAISED BY THE REVENUE ARE AS UNDER:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS. 12 11 280/- MADE ON ACCOUNT OF LONG TERM CAPITAL GAINS. 3 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION O F RS. 20 000/- MADE ON ACCOUNT OF UNDISCLOSED INCOME SHOW N BY THE ASSESSEE AS AGRICULTURAL INCOME. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS. 50 000/- MADE ON ACCOUNT OF VALUATION OF CLOSING STOCK. 5. THE ISSUE IN GROUND NO.3 RAISED BY THE ASSESSEE IS COMMON WITH THE ISSUE RAISED BY THE REVENUE IN GROUND NO.1. 6. THE ASSESSEE IS AGGRIEVED BY THE ESTIMATION OF C OST OF AGRICULTURAL LAND AS ON 1.4.1981 @ RS. 50 000/- PER ACRE AS AGAI NST AVERAGE COST OF RS. 1 28 391/- PER ACRE SHOWN BY THE ASSESSEE. THE RE VENUE IS AGGRIEVED BY THE ORDER OF CIT(A) IN DELETING AN ADDITION OF RS. 10 36 080/- MADE ON ACCOUNT OF LONG TERM CAPITAL GAINS. 7. THE BRIEF FACTS OF THE CASE ARE THAT DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HAD SHOWN INCOME FROM LO NG TERM CAPITAL GAIN ON SALE OF LAND SITUATED AT BALABHERA ROAD CHEEKA TEHSIL GUHLA. THE ASSESSEE CLAIMED THE SAID LAND TO BE AGRICULTURAL L AND AND IN VIEW THEREOF NO CAPITAL GAIN WAS SHOWN BY THE ASSESSEE. THE AS SESSING OFFICER SHOW CAUSED THE ASSESSEE IN THIS REGARD AS THE LAND WAS FOUND TO BE SITUATED IN THE MUNICIPAL COMMITTEE AREA OF CHEEKA AND THE ASSE SSEE WAS REQUIRED TO COMPUTE THE CAPITAL GAIN ON THE SALE OF THE SAID AS SETS. THE SALE CONSIDERATION SHOWN BY THE ASSESSEE HAS BEEN ACCEPT ED BY THE ASSESSING OFFICER. HOWEVER IN THE ABSENCE OF ANY PURCHASE D EED OR MARKET VALUE AS ON 1.4.1981 THE ASSESSING OFFICER MADE INQUIRIES I N RESPECT OF THE COST OF LAND FROM THE TEHSILDAR GUHLA. THE TEHSILDAR REPO RTED THE AVERAGE RATE TO BE RS. 16 640/- PER ACRE. ANOTHER LETTER WAS WRIT TEN BY THE ASSESSING 4 OFFICER TO THE DISTRICT REVENUE OFFICER KAITHAL TO FURNISH THE COPY OF ANY REGISTERED DEED OF APRIL 1981 IN THE AREA AND VIDE LETTER NO. 1050 DATED 18.12.2007 A COPY OF REGISTRATION DEED DATED 2.5. 1981 FOR A CONSIDERATION OF RS. 22 000/- AGAINST LAND MEASURING 12 KANALS 18 MARLAS WAS FURNISHED BY THE DISTRICT COMMISSIONER KAITHAL. THE ASSES SEE WAS SHOW CAUSED AS TO WHY THE CAPITAL GAINS BE NOT COMPUTED BY INDEXIN G THE VALUE OF RS. 16 000/- PER ACRE AS ON 1.4.1981. THE ASSESSEE FA ILED TO APPEAR BEFORE THE ASSESSING OFFICER AND THE ASSESSMENT WAS COMPLETED BY TAKING THE VALUE OF LAND AS ON 1.4.1981 AT THE COST OF RS. 16 000/- PER ACRE. 8. BEFORE THE CIT(A) THE ASSESSEE FURNISHED THE COPY OF REGISTERED SALE DEED OF 1 KANAL SOLD FOR RS. 10 000- ON 4.6.19 81. FURTHER A REQUEST WAS MADE FOR RAISING ADDITIONAL GROUNDS OF APPEAL. THE CIT(A) ASKED FOR A REMAND REPORT TO WHICH A REJOINDER WAS ALSO FILED BY THE ASSESSEE BOTH OF WHICH ARE REPRODUCED BY THE CIT(A) IN THE APPELLATE ORDER. THE SAID REJOINDER WAS ALSO CONFRONTED TO THE ASSESSING OFFI CER AND THE REPLY IS AVAILABLE. THE ASSESSEE PLACED ON RECORD THE COPIE S OF REGISTERED DOCUMENTS TOTALING NUMBER SEVEN EVIDENCING THE SALE TRANSACTIONS IN AND AROUND 1.4.1981 IN THE SURROUNDING AREAS AND ALLEGE D THAT THE AVERAGE PRICE PER ACRE WAS RS. 1 28 391/-. ANOTHER PLEA WAS ALSO RAISED THAT THE LD. AR THAT THE VALUATION BE ADOPTED BY TAKING INTO CONSIDERATION THE COST OF LAND OF RS. 10 000/- PER KANAL AND ALSO INVESTME NT IN COST OF HOUSE TUBE WELL BE ACCEPTED. THE ASSESSING OFFICER IN R EJOINDER POINTED OUT THAT THE ASSESSEE HAS FILED DETAILS OF SEVEN SALES OF LAND AND WORKED OUT THE AVERAGE RATE ON THE BASIS OF THE SAID SALES. THE ASSESSING OFFICER POINTED OUT THAT OUT OF SEVEN CASES TWO SALES QUO TED BY THE ASSESSEE WERE FOR SALE OF LAND MEASURING 1 KANAL OF LAND I.E. AP PROXIMATELY 500 SQUARE YARDS WHEREAS IN THE CASE THE SALE WAS FOR 94.9 KAN ALS OF AGRICULTURAL LAND. 5 IN THE THIRD CASE THE LAND SOLD WAS 6 KANALS 12 MA RLAS IN VILLAGE SALEMGARH TO THREE PARTIES AND RATES PER ACRE COME TO RS. 74 164/- AND NOT 1 22 977/- AS CALCULATED BY THE ASSESSEE. THE ASSE SSING OFFICER OBSERVED THAT THE SAID RATES HAD NO RELEVANCE WITH THE CASE OF THE ASSESSEE. IN RESPECT OF THE BALANCE FOUR SALE TRANSACTIONS IT W AS POINTED OUT BY THE ASSESSING OFFICER THAT THE LAND WAS PURCHASED BY RI CE MILLER FOR SETTING UP THE INDUSTRY AND THEY DO NOT DEPICT THE AVERAGE RATE OF AGRICULTURAL LAND PREVAILING AT THE TIME. WITH REGARD TO THE EXPENSES INCURRED ON IMPROVEMENT THE ASSESSING OFFICER POINTED OUT THA T THE EVIDENCE FURNISHED NOW BEFORE THE CIT(A) COULD NOT BE ENTERT AINED AS THE SAME WAS NOT FILED DURING THE ASSESSMENT PROCEEDINGS. THE C IT(A) HELD THAT THE LAND SOLD BY THE ASSESSEE THOUGH WAS AGRICULTURAL L AND BUT WAS LOCATED WITHIN 8 KMS FROM THE LOCAL LIMITS OF THE MUNICIPAL COMMITTEE HENCE THE TRANSFER OF SUCH LAND WAS SUBJECT TO CAPITAL GAINS TAX. IN RESPECT OF THE COST OF LAND AS ON 1.4.1981 AND COST OF IMPROVEMENT OF THE SAID LAND THE CIT(A) NOTED THE COMMENTS OF THE ASSESSING OFFICER AND ALSO THE OBJECTIONS OF THE ASSESSEE THAT ASSESSING OFFICER H AD APPLIED RATE OF RS. 16 000/- PER ACRE ON THE BASIS OF TWO REGISTERS SUP PLIED BY THE TEHSILDAR IN RESPECT OF LAND BEING FAR OFF FROM THE MAIN ROAD. THE CLAIM OF THE ASSESSEE WAS THAT HIS LAND WAS LOCATED ON THE MAIN ROAD AND RELIANCE WAS PLACED ON ANOTHER REGISTRY ON THE BASIS OF WHICH RA TES COME TO RS. 80 000/- PER ACRE WHICH WAS NOT CONSIDERED BY THE ASSESSING OFFICER BEING FOR A SMALLER PLOT. THE CIT(A) DID NOT AGREE WITH THE C ONTENTIONS OF THE ASSESSING OFFICER AS THE COMPARISON WAS MADE WITH A LAND WHICH WAS LOCATED FAR OFF. THE CIT(A) OBSERVED THAT THE LAN D IN QUESTION WAS LOCATED WITHIN MUNICIPAL LIMITS AND HENCE WAS HELD TO BE TAXABLE UNDER SECTION 2(14)(III) OF THE ACT AND SUCH LANDS ARE TR ANSACTED TO BE USED OR DEVELOPMENT FOR RESIDENTIAL / COMMERCIAL PURPOSES. THE CIT(A) WAS OF 6 THE VIEW THAT THE LAND RATES SUPPLIED BY THE ASSESS EE ON THE BASIS OF ONE SALE DEED DURING THE ASSESSMENT PROCEEDINGS AND SE VEN SALE DEEDS DURING THE APPELLATE PROCEEDINGS DESERVED TO BE CONSIDERED . IN VIEW THEREOF THE LAND PRICE WAS ESTIMATED AT RS. 50 000/- PER ACRE A S ON 1.4.1981 BY THE CIT(A). BOTH THE ASSESSEE AND REVENUE ARE IN APPEA L AGAINST THE SAID ESTIMATION OF COST OF LAND AS ON 1.4.1981. 9. THE LD. AR FOR THE ASSESSEE FAIRLY ADMITTED THAT THE SALE CONSIDERATION OF THE SAID AGRICULTURAL LAND HAD BEE N ACCEPTED AND THE ISSUE WAS ONLY IN RESPECT OF COST OF LAND AS ON 1.4.1981 WHERE THE ASSESSEE HAD ADOPTED AVERAGE COST OF RS. 1 28 391 PER ACRE THE ASSESSING OFFICER ADOPTED RATE OF RS. 16 000- PER ACRE AND CIT(A) RS. 50 000/- PER ACRE. IT WAS POINTED OUT BY THE LD. AR THAT A SALE DEED WITH RATE AT RS. 80 000 /- PER ACRE IN RESPECT OF THE LAND AT CHEEKA DISTRIC T KAITHAL FALLING WITHIN MUNICIPAL LIMIT WAS FILED BEFORE THE CIT(A) AND AT BEST THE SAME MAY BE ADOPTED FOR COMPUTING THE CAPITAL GAINS. AS PER THE LD. AR THE ASSESSING OFFICER RELIED ON VALUE OF LAND SITUATED OUTSIDE MUNICIPAL LIMITS. THE LD. DR IN REPLY PLACING RELIANCE ON TH E ORDER OF THE ASSESSING OFFICER AND THE REMAND REPORT POINTED OUT THAT EXTE NSIVE ENQUIRES WERE MADE FROM THE TEHSILDAR AS AGAINST WHICH THE ASSESS EE PLACES RELIANCE ON ONE PARTICULAR DEED FILED DURING THE ASSESSMENT PRO CEEDINGS WHICH RELATED TO A SMALLER PIECE OF LAND. THE LD. DR FOR THE RE VENUE FILED ON RECORD THE COPY OF THE ASSESSMENT ORDER IN THE CASE OF ANO THER CO-OWNER SHRI SATPAL WHEREIN RELIANCE IS PLACED ON A REGISTRY WHE RE THE COST OF LAND AS ON 1.4.1981 CAME TO RS. 80 000/- PER ACRE. THE CALC ULATION WAS BASED ON A REGISTERED SALE DEED DATED 4.6.1981 FOR 1 KANAL OF LAND AT RS. 10 000/-. THE ASSESSING OFFICER WHILE COMPLETING THE ASSESSMENT P ROCEEDINGS IN THE CASE OF SHRI SATPAL OTHER CO-OWNER OF THE SAME PIECE OF LAND OBSERVED THAT ONE 7 KANAL IS EQUAL TO 500 SQUARE YARDS WHICH CANNOT BE COMPARED TO A SUBSTANTIAL AREA OF LAND I.E. 123 KANALS 9 MARLS W HICH IS ABOUT 15.5 ACRES SOLD BY THE CO-OWNER. . FURTHER IT WAS OBSERVED B Y THE ASSESSING OFFICER THAT THE LAND UNDER CONSIDERATION WAS SITUATED IN V ILLAGE CHEEKA WHEREAS RELIANCE WAS PLACED ON A PIECE OF LAND OF ONE KANAL IN ANOTHER VILLAGE I.E. KUSHAL MAJRA. THE SECOND PIECE OF LAND WAS SOLD F OR RESIDENTIAL PURPOSES AS IS EVIDENT FROM THE REGISTRATION DEED AS COMPARE D TO THE LAND UNDER QUESTION BEING AGRICULTURAL LAND SOLD BY THE CO OWN ERS. THE ASSESSING OFFICER WHILE COMPLETING THE ASSESSMENT IN THE CASE OF SHRI SATPAL ALSO CONSIDERED THE SEVEN SALE DEEDS AS FILED IN THE PRE SENT CASE BEFORE US AND WAS OF THE VIEW THAT RS. 16 000/- PER ACRE WAS TO B E ADOPTED AS COST OF LAND AS ON 1.4.1981. THE PLEA THAT HALF SHARE OF THE LAND BELONGING TO THE BROTHER I.E. SHRI SHAM LAL WAS TAKEN AT RS. 50 000/ - PER ACRE AS ON 1.4.1981 WAS REJECTED BY THE ASSESSING OFFICER IN V IEW OF THE APPEAL FILED BY THE REVENUE BEFORE THE TRIBUNAL. 10. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORDS. THE ISSUE IN THE PRESENT APPEAL ARISING BEFORE US IS IN CONNECTION WITH THE COST OF AGRICULTURAL LAND SOLD BY THE ASSESSEE TO BE WOR KED OUT AS ON 1.4.1981. THE ASSESSEE ALONG WITH HIS BROTHER CO-OWNER OF TH E PROPERTY HAD SOLD ABOUT 15.5. ACRES OF AGRICULTURAL LAND FOR A CONSID ERATION OF RS. 54 03 000/-. THE SAID LAND WAS HELD TO BE CAPITAL ASSETS AMIABLE TO THE PROVISIONS OF INCOME TAX ACT AND THE INCOME FROM CA PITAL GAINS ON THE SALE OF THE LAND WAS COMPUTED DURING ASSESSMENT PRO CEEDINGS. ON ENQUIRIES BY THE ASSESSING OFFICER THE TEHSILDAR GUHANA CERTIFIED THAT THE AVERAGE RATE IN THE CHEEKA AREA WHERE THE LAND OF THE ASSESSEE WAS SITUATED WAS ABOUT RS. 16 640/- PER ACRE. THE D ISTRICT REVENUE OFFICER KAITHAL HAD SUBMITTED A REGISTERED SALE DEED OF RS. 22 000/- FOR LAND 8 MEASURING 12 KANALS 18 MARLAS. ACCORDING TO WHICH THE RATE OF SALE OF LAND COMES TO RS. 13 643 PER ACRE. THE ASSESSING O FFICER ADOPTED THE COST OF LAND AS ON 1.4.1981 AT RS. 16 000/- PER ACRE AND COMPUTED THE INCOME FROM CAPITAL GAINS IN THE HANDS OF THE ASSESSEE. S IMILAR COMPUTATION WAS MADE IN THE HANDS OF THE OTHER CO-OWNER SHRI SATPAL AS IS EVIDENT FROM THE COPY OF THE ASSESSMENT ORDER PLACED ON RECORD BY TH E LD. DR FOR THE REVENUE. BEFORE THE CIT(A) THE ASSESSEE PLACED ON RECORD REGISTERED SALE DOCUMENTS IN RESPECT OF SEVEN PROPERTIES WHICH ARE ENUMERATED AT PAGE 10 OF THE APPELLATE ORDER. THE SAID SALE DEED S ARE IN RESPECT OF PROPERTIES TRANSACTED IN AND AROUND THE AREA IN WHI CH THE PROPERTY OF THE ASSESSEE IS SITUATED AND AROUND THE DATE OF RECKONI NG I.E. 1.4.1981. THE ASSESSEE FURTHER PLACED RELIANCE ON A SALE DEED EXE CUTED FOR A PIECE OF LAND MEASURING 1 KANAL WHICH WAS SOLD FOR RS. 10 000/- I N VILLAGE KUSHAL MAJRA. THE CLAIM OF THE ASSESSEE IS THAT THE SAID SALE OF LAND MEASURING 1 KANAL BE ADOPTED FOR COMPUTING THE COST OF LAND MEA SURING 123 KANALS 9 MARLAS AS ON 1.4.1981. WE FIND NO MERIT IN THE S AID CLAIM OF THE ASSESSEE AND ARE IN CONFORMITY WITH THE ORDER OF CIT(A) IN T HIS REGARD THAT THE VALUE OF A SMALL PORTION OF LAND SOLD IN THE VICINI TY CANNOT BE THE BASIS FOR WORKING OUT THE COST OF AGRICULTURAL LAND WHICH IS MUCH BIGGER IN SIZE AND THE LAND USE ALSO BEING DIFFERENT NO RELIANCE COUL D BE PLACED ON SUCH EVIDENCE FILED BY THE LD. AR FOR THE ASSESSEE. IN RESPECT OF THE OTHER SALE TRANSACTIONS POINTED OUT BY THE LD. AR AS MENTIONED AT PAGE 10 OF THE APPELLATE ORDER THE FIRST TWO TRANSACTIONS ARE IN CONNECTION WITH PIECE OF LAND MEASURING 1 KANAL WHERE THE AVERAGE COST PER A CRE IS HIGHER THE SAME CANNOT BE BASIS FOR ADOPTING THE COST OF LAND IN TH E HANDS OF THE ASSESSEE. HOWEVER THE ASSESSEE HAS FURNISHED ON RECORD THE R EGISTERED DOCUMENTS OF SALE OF LAND MEASURING ABOUT 21 TO 25 KANALS IN AND AROUND THE SAME AREA WHICH HAS BEEN PURCHASED BY RICE MILLERS AT RATES V ARYING BETWEEN RS. 9 35 000/-0 TO 50000/-. THE OTHER INSTANCE POINTED OUT BY THE ASSESSEE WAS A SMALLER PIECE OF LAND. THE CIT(A) HAS BEEN FAIR IN ADOPTING THE COST OF LAND AT RS. 50000/- PER ACRE AS ON 1.4.1981 AND DIR ECTING THE ASSESSING OFFICER TO COMPUTE THE INCOME FROM CAPITAL GAINS AC CORDINGLY. UPHOLDING THE ORDER OF CIT(A) IN THIS REGARD WE DISMISS THE GROUND NO.3 RAISED BY THE ASSESSEE AND 1 RAISED BY THE REVENUE. 11. THE GROUND NO.4 RAISED BY THE ASSESSEE IS IN RE SPECT OF THE BENEFIT OF THE COST OF CONSTRUCTION OF THE HOUSE TO BE ALLO WED. THE CASE OF THE ASSESSEE WAS THAT A HOUSE IS IN THE LAND RECORDS H OWEVER IN THE SALE DEED A REFERENCE WAS MADE ONLY TO THE AGRICULTURAL LAND SOLD BY THE ASSESSEE. THE SECOND LIMB OF ASSESSEES ARGUMENT WAS IN RESPE CT OF THE COST OF TUBE WELL ON THE SAID LAND. THE ASSESSING OFFICER REJEC TED THE PLEA OF THE ASSESSEE WITH REGARD TO BOTH THE COST OF INVESTMENT IN THE HOUSE AND THE TUBE WELL. THE CIT(A) HELD THAT NO BENEFIT OF THE HOUSE IS TO BE ALLOWED TO THE ASSESSEE BECAUSE MERE MENTION OF A HOUSE IN REVENUE RECORD DOES NOT GIVE ANY IDEA ON THE COST OR THE PARAMETERS OF THE HOUSE AND THE KIND OF CONSTRUCTION. FURTHER AS PER THE CIT(A) THE A SSESSEE HAD FAILED TO FURNISH ANY EVIDENCE WHICH PROVES THE EXISTENCE OF THE HOUSE WITH THE COST. IT WAS OBSERVED BY CIT(A) THAT IT WAS ALSO NOT CLEAR WHETHER THE TWO HOUSES WERE SMALL ROOMS FOR TUBEWELLS OR OTHER INDEPENDENT HOUSES. HOWEVER AS TWO TUBE WELLS WERE MENTIONED IN THE JA MABANDI FILED BY THE ASSESSEE FOR THE YEAR 1985-86 THE EVIDENCE OF EXIST ENCE OF TUBEWELL WAS ACCEPTED AND ON ESTIMATE BASIS COST OF IMPROVEMENT OF RS. 20 000/- FOR TWO TUBE WELLS SUBJECT OF FURTHER INDEXATION WAS AL LOWED BY THE CIT(A). THE LONG TERM CAPITAL GAIN WAS COMPUTED BY THE CIT (A) UNDER PARA 7 AT PAGES 20 OF THE APPELLATE ORDER IN THIS REGARD. 10 12. THE ASSESSEE IS IN APPEAL IN RESPECT OF THE NON ALLOWANCE OF COST OF INVESTMENT IN THE HOUSE AND THE REVENUE IS IN APPEA L AGAINST THE VALUE OF TUBE WELL BEING ALLOWED AS COST OF IMPROVEMENT OF T HE AGRICULTURAL LAND SOLD BY THE ASSESSEE. THE ASSESSEE DREW OUR ATT ENTION TO THE WITHDRAWALS MADE FROM A PARTNERSHIP CONCERN IN WHICH THE ASSESS EE WAS A PARTNER AND SUBMITTED THAT THE SAME WAS ON ACCOUNT OF COST OF I MPROVEMENT OF THE HOUSE. WE FIND THAT THE CLAIM OF THE ASSESSEE WAS REJECTED AS THE ASSESSEE HAD FAILED TO BRING ON RECORD ANY EVIDENCE WHICH PR OVE THE EXISTENCE OF THE HOUSE AND FURTHER THE KIND OF THE HOUSE CLAIMED BY THE ASSESSEE TO BE EXISTED ON THE SAID LAND. MERELY BECAUSE SOME WITH DRAWALS HAVE BEEN MADE FROM A CONCERN IN WHICH ASSESSEE IS A PARTNER DOES NOT ESTABLISH THE EXISTENCE OF THE HOUSE OR THE KIND OF HOUSE ON THE SAID LAND. THE ONUS CAST UPON THE ASSESSEE TO PROVE ITS CLAIM HAD NOT B EEN DISCHARGED BY THE ASSESSEE AND IN THE ABSENCE WE FIND NO MERIT IN THE CLAIM OF THE ASSESSEE AND HENCE THE SAME IS REJECTED. THE GROUND NO.4 RA ISED BY THE ASSESSEE IS THUS DISMISSED. HOWEVER WE ARE IN CONFORMITY WITH THE ORDER OF CIT(A) IN ALLOWING THE BENEFIT OF COST OF IMPROVEMENT OF R S. 20 000/- ON ACCOUNT OF TWO TUBE WELLS BEING EVIDENCED BY A NOTING IN T HE JAMABANDI FILED BY THE ASSESSEE RELATING TO THE YEAR 1985-86. IN VI EW THEREOF WE UPHOLD THE ORDER OF CIT(A) IN ALLOWING THE INDEXATION OF THE C OST OF IMPROVEMENT AND ACCORDINGLY DISMISS THE GROUND NO.2 RAISED BY THE R EVENUE AND GROUND NO.4 RAISED BY ASSESSEE. 13. THE LAST GROUND OF APPEAL RAISED BY THE ASSESSE E BEING GROUND NO.5 IS AGAINST THE ADDITION OF RS. 10 000/- MADE OUT OF TELEPHONE BILLS AND SHOP EXPENSES. THE PLEA OF THE ASSESSEE IS THAT THE RESIDENCE TELEPHONE EXPENSES WERE FULLY DISALLOWED BY THE ASSESSING OFF ICER. THE PERUSAL OF THE ORDER OF THE ASSESSING OFFICER REVEALS THAT THE ASSESSEE TO HAVE 11 CLAIMED TELEPHONE EXPENDITURE OF RS. 30 683/- WHICH WERE INCLUDED IN SHOP EXPENSES. THE BILLS OF THE RESIDENCE TOTALIN G RS. 6 789/- AND THE SHOP EXPENSES INCLUDED DONATIONS AND EXPENSES ON TE A NEWSPAPERS FOR WHICH NO BILLS WERE PRODUCED. THE ASSESSEE FAILE D TO JUSTIFY THE CLAIM OF THE RESIDENCE TELEPHONE EXPENSES FOR THE PURPOSE OF BUSINESS AND FURTHER NON VERIFIABILITY OF MISC. EXPENSES AND DONATION R ESULTED IN DISALLOWANCE OF RS. 10 000/- OUT OF SHOP EXPENSES. IN THE ABSEN CE OF ANY DETAILS BEING FURNISHED BY THE ASSESSEE TO DISPROVE THE CASE OF T HE ASSESSING OFFICER AND IN THE FACTS OF THE CASE WE ARE IN CONFORMITY WITH THE SAID DISALLOWANCE AND DISMISS THE GROUND NO.5 RAISED BY THE ASSESSEE. 14. THE GROUND NO.2 RAISED BY THE REVENUE IS AGAINS T THE ADDITION OF RS. 20 000/-. THE ASSESSEE HAD SHOWN AGRICULTURAL INCOME OF RS. 40 000/- AND THE ASSESSING OFFICER ESTIMATED IT TO BE RS. 20 000/- AS THE LAND WAS SOLD IN NOVEMBER. THE CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE HOLDING THAT THE LEAST MONEY FOR A PART OF THE YEAR WORKS O UT OF RS. 40 000/-. THE CLAIM OF THE ASSESSEE HAS THAT IT HAD RECEIVED RS. 11 000/- PER ACRE AND CLAIMED ONLY 50% AT RS. 40 000/- AS AGRICULTURAL IN COME. WE ARE IN CONFORMITY WITH THE ORDER OF CIT(A) AND DISMISS THE GROUND NO.2 OF THE REVENUE. 15. THE GROUND NO.3 IS IN RESPECT OF DELETION OF AD DITION OF RS. 50 000/- ON ACCOUNT OF VALUATION OF CLOSING STOCK. THE ASS ESSING OFFICER WHILE COMPLETING THE ASSESSMENT AFTER REJECTION OF THE BO OKS OF ACCOUNT HAD MADE AN ADDITION OF RS. 50 000/- ON AD HOC BASIS TO COVER UP UNDER VALUATION OF CLOSING STOCK. THE CIT(A) DELETED TH E SAME AS TOTAL PURCHASE AND SALE BILLS WERE AVAILABLE WITH THE ASSESSEE AND THE SAME WERE NOT DENIED. NO DEFECT WERE POINTED OUT IN THE BOOKS OF ACCOUNT. THE REVENUE HAS FAILED TO POINT OUT ANY CONTRARY FINDINGS TO TH E ORDER OF CIT(A) AND 12 ACCORDINGLY CONFIRMING THE SAME WE DISMISS THE GR OUND NO.3 RAISED BY THE REVENUE. 16. IN THE RESULT APPEAL OF THE ASSESSEE AND THE R EVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 31 ST DAY OF MARCH 2011. SD/- SD/- (D.K.SRIVASTAVA) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : MARCH 2011 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR