Mohd. Mujeeb, Hyderabad v. Addl.C.I.T., Hyderabad

ITA 1632/HYD/2010 | 2007-2008
Pronouncement Date: 11-03-2011 | Result: Allowed

Appeal Details

RSA Number 163222514 RSA 2010
Assessee PAN ACQPM1182R
Bench Hyderabad
Appeal Number ITA 1632/HYD/2010
Duration Of Justice 2 month(s) 21 day(s)
Appellant Mohd. Mujeeb, Hyderabad
Respondent Addl.C.I.T., Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 11-03-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 11-03-2011
Assessment Year 2007-2008
Appeal Filed On 20-12-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B' HYDERABAD BEFORE SHRI G.C. GUPTA VICE PRESIDENT AND SHRI CHANDRA POOJARI ACCOUNTANT MEMBER I.T.A. NO. 1632/HYD/2010 (ASSESSMENT YEAR 2007-08) MR. MOHD. MUJEEB H. NO. 5-9-1049 HYDERABAD PAN: ACQPM1182R VS. THE ADDL. CIT RANGE-5 HYDERABAD APPELLANT RESPONDENT APPELLANT BY: SHRI V. SRINIVAS RESPONDENT BY: SHRI K.E. SUNIL BABU O R D E R PER CHANDRA POOJARI AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE CIT(A)-V HYDERABAD DATED 21.10.2010 AND PERTAINS T O ASSESSMENT YEAR 2007-08. 2. THE ONLY EFFECTIVE GROUND TAKEN BY THE ASSESSEE IS AS FOLLOWS: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) ERRED IN UPHOLDING THE ADDITION OF R S. 32 69 000/- MADE BY THE LEARNED ASSESSING OFFICER U /S. 69 OF I.T. ACT IN RESPECT OF ALLEGED DIFFERENCE IN INVESTMENT IN EDEN GARDENS PROPERTY. 3. BRIEF FACTS OF THE CASE ARE THAT DURING THE ASSESSM ENT PROCEEDINGS THE ASSESSING OFFICER FOUND THAT THE A SSESSEE HAD PURCHASED A HOUSE AT PLOT NO. 4 EDEN GARDENS KING KOTI HYDERABAD FOR RS. 78 69 000 WHICH WAS MENTIONED ON THE REVERS E SIDE OF THE REGISTERED DOCUMENT. HOWEVER AS PER THE REGISTERE D DOCUMENT THE AMOUNT WAS RS. 46 00 000. FINDING THAT THE ASSESSE E HAD ONLY I.T.A. NO. 1632/HYD/2010 MR. MOHD. MUJEEB ===================== 2 DECLARED THE LATTER AMOUNT THE ASSESSING OFFICER A DDED THE DIFFERENCE AS UNEXPLAINED INVESTMENT. 4. AS PER THE REGISTERED SALE DEED OF THE DOCUMENT TH E ASSESSEE HAD PURCHASED HOUSE AT PLOT NO. 4 EDEN GARDENS KI NG KOTI HYDERABAD FROM MR. KHAJA BARKATULLAH KHAN AND MR. S YED ESHAN-UL- HAQ FOR RS. 78 69 000 AS PER OBVERSE SIDE OF PAGE 2 OF THE DOCUMENT AS AGAINST THE AMOUNT OF RS. 53 50 000 (RS. 46 00 0 00 + STAMP DUTY AND REGISTRATION FEES OF RS. 7 50 000). THE DIFFER ENCE IS WORKED OUT AT RS. 32 69 000. WHEN THE ASSESSEE WAS ASKED TO EXPL AIN THE SOURCES OF ADDITIONAL INVESTMENT IN THE PROPERTY THE ASSESSEE HAS ARGUED THAT HE HAS PAID ONLY RS. 46 00 000 TOWARDS COST OF THE PROPERTY EVEN THOUGH THE REGISTERED VALUE IS RS. 78 69 000. THE ASSESSEE DID NOT PRODUCE ANY EVIDENCE IN SUPPORT OF HIS CONTENTION. SINCE THE VALUE OF THE PROPERTY IS MORE AS PER SUB-REGISTRAR OFFICE TH AN THE AMOUNT DISCLOSED BY THE ASSESSEE THE DIFFERENCE OF RS. 32 69 000 WAS ADDED BY THE ASSESSING OFFICER TO THE TOTAL INCOME OF THE ASSESSEE. 5. IN APPEAL THE CIT(A) RELYING ON THE DECISION OF TH E AMRITSAR BENCH OF THIS TRIBUNAL IN SHRI INDERPAL SINGH AHUJA VS. ACIT IN I.T.A NO. 93/(ASR)/2005 DATED 22.02.2006 HELD THAT IT IS ONLY THROUGH THE SURROUNDING CIRCUMSTANCES AND HUMAN PROBABILITY THA T THE EXACT AMOUNT INVOLVED IN THE TRANSACTIONS CAN BE INFERRED . IN THE PRESENT CASE THE PROPERTY IS FREE FROM ALL ENCUMBRANCES I T HAS NO LEGAL BLOCKAGES TO IT AND THE ASSESSEE DID NOT SELL IT UN DER ANY DISTRESS. I.T.A. NO. 1632/HYD/2010 MR. MOHD. MUJEEB ===================== 3 MOREOVER THE ASSESSEE HAS NOT PROVIDED ANY EVIDENC E TO SHOW THAT IN THE NEIGHBOURING AREAS AT THAT TIME SIMILAR PROP ERTIES WERE BEING SOLD FAR BELOW THE SRO RATE. ACCORDINGLY HE UPHELD THE ORDER OF THE ASSESSING OFFICER. 6. THE LEARNED COUNSEL FOR THE ASSESSEE RELIED ON THE ORDER OF THIS TRIBUNAL IN THE CASE OF ITO VS. HARLEY STREET PHARM ACEUTICALS LTD. 38 SOT 486 (AHD.) WHEREIN IT WAS HELD THAT SECTION 50C CREATES LEGAL FICTION FOR TAXING CAPITAL GAIN IN THE HANDS OF THE SELLER AND IT CANNOT BE EXTENDED FOR TAXING THE DIFFERENCE BETWEEN THE A PPARENT CONSIDERATION AND VALUATION DONE BY THE STAMP VALUA TION AUTHORITIES AS UNDISCLOSED INVESTMENT U/S. 69B OF THE ACT WHER E THERE WAS NO EVIDENCE AVAILABLE ON RECORD TO SHOW THAT THE CONSI DERATION OVER AND ABOVE WHAT HAS BEEN RECORDED IN THE SALE DEED HAS BEEN MADE BY THE ASSESSEE. FURTHER HE RELIED ON 315 ITR 204 IN CIT VS. KISHAN KUMAR & ORS. FOR THE SAME PROPOSITION. 7. ON THE OTHER HAND THE LEARNED DR RELIED ON THE ORD ERS OF THE LOWER AUTHORITIES AND ALSO ON THE ORDER OF THE AMRI TSAR BENCH OF THIS TRIBUNAL IN THE CASE OF INDERPAL SINGH AHUJA VS. AC IT 103 ITD 271. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND ALSO PERUSED THE MATERIAL ON RECORD. WE FIND THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE RAJAS THAN HIGH COURT IN SMT. AMAR KUMARI SURANA VS. CIT (1996) 89 TAXMAN 54 4 (RAJ) WHEREIN I.T.A. NO. 1632/HYD/2010 MR. MOHD. MUJEEB ===================== 4 IT WAS HELD THAT MERELY ON THE BASIS OF FAIR MARKET VALUE NO ADDITION CAN BE MADE UNDER SECTION 69B BUT IF ON THE BASIS OF SUFFICIENT MATERIAL ON RECORD SOME REASONABLE INFERENCE CAN BE DRAWN THAT THE ASSESSEE HAS INVESTED MORE AMOUNT IN PURCHASE OF PL OT THAN THAT SHOWN IN ACCOUNT BOOKS THEN ONLY THE ADDITION UNDE R SECTION 69B CAN BE MADE. THE BURDEN IS ON THE REVENUE TO PROVE THA T REAL INVESTMENT EXCEEDED THE INVESTMENT SHOWN IN ACCOUNT BOOKS OF T HE ASSESSEE. 9. LET US CONSIDER IS THERE ANY PASSAGE BETWEEN THE PR OVISIONS OF SECTION 50C AND SECTION 69B OF THE ACT. ON READING OF THESE TWO SECTIONS WE ARE OF THE OPINION THAT THERE IS A TRA P FOR THE ASSESSEE. SECTION 50C EXPLORES THE GAP BETWEEN THE FAIR VALUE OF THE CONSIDERATION AND ACTUAL AMOUNT RECEIVED OR RECEIVA BLE FROM THE TRANSFER OF THE LAND OR BUILDING WHEREAS SECTION 69 B SEEMS MENACING TO TAX THIS GAP IN THE HANDS OF THE PURCHASER. THI S IS BECAUSE THE PURCHASER MIGHT HAVE RECORDED THE INVESTMENT AT HIS COST WHEREAS THE ASSESSING OFFICER MIGHT CONSIDER THE VALUE ADOP TED BY THE STAMP VALUATION AUTHORITY ON THE DATE OF PURCHASE. 10. WE FIND THE AHMEDABAD B BENCH OF THIS TRIBUNAL IN ITO VS. HARLEY STREET PHARMACEUTICALS LTD. (2010) 35 (II) I TCL 128 HAS DISCUSSED THIS ISSUE ELABORATELY AND HELD THAT THER E IS NO RULE OF LAW TO THE EFFECT THAT THE VALUE DETERMINED FOR THE PURPOS ES OF STAMP DUTY IS THE ACTUAL CONSIDERATION PASSED BETWEEN THE PARTIES TO THE SALE. IN THE PRESENT CASE THE ASSESSING OFFICER HAS APPLIED THE PROVISIONS OF I.T.A. NO. 1632/HYD/2010 MR. MOHD. MUJEEB ===================== 5 SECTION 50C FOR COMPUTATION OF UNEXPLAINED INVESTME NT UNDER SECTION 69B OF THE ACT AND WHICH IS NOT PERMISSIBLE UNDER T HE ACT. APART FROM THE STAMP DUTY VALUATION THERE IS NOTHING ON RECOR D WHICH SUGGESTS THAT THE REVENUE HAS PROVED THAT THE ASSESSEE HAS A CCEPTED OVER AND ABOVE WHAT HAS BEEN RECORDED AS PURCHASE CONSIDERA TION OF THE LAND IN THE INSTRUMENT I.E. THE SALE DEED. THE TRIBUN AL ACCORDINGLY DISMISSED THE ORDER OF THE REVENUE. 11. BEFORE US THE REVENUE COULD NOT BRING ANY EVIDENCE TO SUPPORT THAT THE ASSESSEE HAS PAID ANY CONSIDERATIO N OVER AND ABOVE WHAT HE HAS PAID ON TRANSFER OF THE PLOT. THE HON BLE ALLAHABAD HIGH COURT IN DINESH KUMAR MITTAL V. ITO (1992) 193 ITR 770 (ALL.) HELD THAT THERE IS ALSO NO LAW TO THE EFFECT THAT THE VALUE D ETERMINED FOR THE PURPOSES OF STAMP DUTY IS THE ACTUAL CONSIDERATION PASSED BETWEEN THE PARTIES TO THE SALE. THUS THE LAW IS QUITE CLE AR ON TO WHAT EXTENT DEEMING PROVISIONS CAN BE APPLIED. THE BURDEN LIES ON THE REVENUE TO PROVE THAT THE ASSESSEE HAS UNDISCLOSED INVESTME NTS. RELYING ON THE RATIO LAID DOWN BY THE ALLAHABAD HIGH COURT IN DINESH KUMAR MITTAL (SUPRA) WE SET ASIDE THE ORDERS OF THE LOWE R AUTHORITIES AND THE GROUND RAISED BY THE ASSESSEE IS ALLOWED. THE ADDITION MADE BY THE ASSESSING OFFICER IS ACCORDINGLY DELETED. WE R ELY ON THE FOLLOWING JUDGEMENTS IN SUPPORT OF OUR DECISION: I. KAMAL KISHORE CHANDAK VS. ITO 103 TTJ 843 (JODH.) II. ACIT VS. SWAMI CONSTRUCTIONS PVT. LTD. 111 TTJ 531 (JAIPUR). I.T.A. NO. 1632/HYD/2010 MR. MOHD. MUJEEB ===================== 6 III. JAI MARWAR & CO. PVT. LTD. VS. ACIT 79 TTJ 178 (JOD H.) IV. ITO VS. SATYANARAYAN AGARWAL 112 TTJ 717 (JODH.) V. DINESH JAIN VS. CIT 34 SOT 444 (DELHI) VI. ACIT VS. EXCELLENT LAND DEVELOPERS PVT. LTD. 1 ITR (TRIB) 563 (DELHI). 12. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH MARCH 2011. SD/- (G.C. GUPTA) VICE PRESIDENT SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER HYDERABAD DATED 11 TH MARCH 2011 TPRAO COPY FORWARDED TO: 1. MR. MOHD. MUJEEB H.NO. 5-9-1049 GUNFOUNDRY HY DERABAD. 2. THE ADDL. CIT RANGE-5 HYDERABAD. 3. THE CIT(A)-V HYDERABAD. 4 THE CIT-IV HYDERABAD 5. THE DR B BENCH ITAT HYDERABAD