Nisar Ahmad, v. ITO Ward 1 (2),

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C: NEW DELHI BEFORE SHRI I.P. BANSAL JUDICIAL MEMBER AND SHRI K.D. RANJAN ACCOUNTANT MEMBER ITA NOS. 2789 TO 2793/DEL/2007 ASSESSMENT YEARS: 1988-89 TO 1992-93 LT. SH. FIROZ KHAN THROUGH L/H SH. NISAR AHMED SH. MOHD. ASLAM SMT. LATOOS SMT. SABILA & SMT. NASEEM R/O 314 SHAHNATTHAN MEERUT CITY. VS. ITO WARD 1(2) MEERUT. (APPELLANT) (RESPONDENT) APPELLANT BY : ABDUL WAHAB ADV. RESPONDENT BY: KISHORE B. SR. DR O R D E R PER BENCH : ALL THESE APPEALS ARE FILED BY THE ASSESSEE. THEY ARE DIRECTED AGAINST CONSOLIDATED ORDER OF CIT(A) DATED 04.01.07 FOR ASSESSMENT YEARS 1988-89 TO 1992-93. 2. GROUNDS OF APPEAL IN ALL THESE APPEALS WERE NARR ATIVE AND INTERLINKED WITH EACH GROUND. 3. LD. COUNSEL OF THE ASSESSEE AND DR WERE HEARD AT LENGTH AND AFTER HEARING THEM IT WAS FOUND THAT THE GRIEVANCE OF THE ASSESSEE IN ALL THESE APPEALS WAS LIMITED TO FOUR ISSUES. LD. COUN SEL OF THE ASSESSEE 2 ITA NOS. 2789 TO 2793/DEL/2007 WAS REQUIRED TO SUBMIT THOSE FOUR GRIEVANCES TO BE EXPRESSLY STATED SO THAT THESE APPEALS COULD BE DISPOSED OFF STATING TH E PRECISE GRIEVANCE OF THE ASSESSEE RELATING TO ALL THESE APPEALS. LD. AR OF THE ASSESSEE HAS SUBMITTED BEFORE US VIDE HIS LETTER DATED 7 TH MAY 2010 THE FOLLOWING FOUR GRIEVANCE REPRESENTED IN ALL THE FIVE APPEALS OF TH E ASSESSEE WHICH READ AS UNDER: - 1. THAT THE COST OF ACQUISITION @ 20% PER SQ. YD. IS TO BE GRANTED TO THE ASSESSEE FOR THE A.Y. 1990-91. 2. THAT THE DIRECTION GIVEN FINALLY IN MY CASE BY T HE HONBLE SUPREME COURT OF INDIA THAT THE INTEREST WILL NOT B E GRANTED TO THE ASSESSEE ON SOLATIUM AND ADDITIONAL COMPENSATION AS PER SEC. 23(1-A) AND SEC. 23(2) AND SEC. 28 OF THE AMENDED ACT 1984. 3. THAT THE LITIGATION EXPENDITURE TO CLAIM THE COM PENSATION AMOUNT FROM LOWER COURT TO HONBLE SUPREME COURT OF INDIA WILL BE CONSIDER BY THE ASSESSING AUTHORITIE S HIMSELF AS PER EVIDENCE ACCORDINGLY. 4. THAT A HUGE AMOUNT OF RS. 81 58 816.88 WAS ALREA DY DEPOSITED. HENCE THE INTEREST U/S 220(2) WILL NOT BE CHARGEABLE ACCORDINGLY. 4. LATE SH. FEROZ KHAN (ASSESSEE) WHO IS REPRESENTE D BY LEGAL HEIRS WAS AN AGRICULTURIST. HIS AGRICULTURAL LAND MEASUR ING 58 337.51 SQ. YD. WAS ACQUIRED BY UTTAR PRADESH AWAS VIKAS PARISHAD ( PARISHAD) AND POSSESSION WAS TAKEN BY THE PARISHAD ON 26 TH AUGUST 1987. OUT OF THAT COMPENSATION AN AMOUNT OF RS. 16 12 366/- HAS BEEN ASSESSED FOR LONG- TERM CAPITAL GAIN IN A.Y. 1988-89. SIMILARLY FOR A.Y. 1990-91 A SUM OF RS. 15 07 561/- IS CONSIDERED TO BE COMPENSATION AD DITIONAL COMPENSATION AND SOLATIUM FOR COMPUTING LONG-TERM C APITAL GAIN. OUT OF 3 ITA NOS. 2789 TO 2793/DEL/2007 THAT AO HAS GIVEN THE BENEFIT OF COST OF ACQUISITIO N @ RS. 12 PER SQ. YD. IN BOTH THESE YEARS. THE ASSESSEE HAD CONTESTED SU CH COST BEFORE LD. CIT(A) TO BE TAKEN AT HIGHER RATE. IT IS THE GRIEV ANCE OF THE ASSESSEE THAT THOUGH FOR A.Y. 1988-89 LD. CIT(A) HAS DIRECTED THE AO TO TAKE THE SAID COST @ RS. 20 PER SQ. YD. BUT BY MISTAKE HE DID NOT INCLUDE IN HIS ORDER SIMILAR DIRECTION FOR A.Y. 1990-91. OUR ATTENTION WAS DRAWN TO PARA (VIII) AT PAGE 10 OF THE ORDER OF CIT(A) WHERE HE HAS DIRE CTED THE AO TO TAKE THE COST OF ACQUISITION @ RS. 20 PER SQ. YD. FOR A. Y. 1988-89 BUT LD. CIT(A) DID NOT INCLUDE A.Y. 1990-91 IN WHICH YEAR S IMILAR COMPUTATION WAS MADE AND THUS THE LIMITED GRIEVANCE OF THE ASS ESSEE IS THAT BY ADOPTING THE SIMILAR LINE CIT(A) SHOULD HAVE DIRECT ED THE AO TO GIVE SUCH RELIEF TO THE ASSESSEE FOR A.Y. 1990-91 ALSO. 5. AFTER HEARING BOTH THE PARTIES WE FOUND FORCE I N SUCH CONTENTION OF LD. AR. WE FOUND THAT IN SIMILAR CASES TRIBUNAL HAS ALSO UPHELD THE COST OF ACQUISITION @ RS. 20 PER SQ. YD. THEREFORE WE DIRECT THE AO TO TAKE THE COST OF ACQUISITION @ RS. 20 PER SQ. YD. I N PLACE OF RS. 12/- TAKEN FOR A.Y. 1990-91. THIS GROUND RELATES ONLY T O A.Y. 1990-91. THEREFORE SUCH GROUND OF THE ASSESSEE IS ALLOWED. 6. THE SECOND GRIEVANCE OF THE ASSESSEE IS THAT ACC ORDING TO THE DECISION OF HONBLE SUPREME COURT INTEREST COULD NO T BE GRANTED ON THE SOLATIUM AND ADDITIONAL COMPENSATION. HE CONTENDED THAT AO HAS WRONGLY TAKEN THE INTEREST ON SOLATIUM AND ADDITION AL COMPENSATION WHICH IS AGAINST THE DIRECTION OF HONBLE SUPREME C OURT. IT WAS 4 ITA NOS. 2789 TO 2793/DEL/2007 CONTENDED THAT ASSESSEE DID NOT RECEIVE ANY SUCH IN TEREST. IT WAS SUBMITTED THAT THIS ISSUE MAY BE RESTORED BACK TO T HE FILE OF AO TO VERIFY THE CONTENTION OF THE ASSESSEE THAT NO INTEREST WHA TSOEVER WAS RECEIVED BY THE ASSESSEE IN RESPECT OF SOLATIUM AND ADDITION AL COMPENSATION AND IF NO INTEREST IS RECEIVED BY THE ASSESSEE ON SOLAT IUM AND ADDITIONAL COMPENSATION AND THERE WAS NO QUESTION OF MAKING AS SESSMENT ON THE INTEREST THEREON AS THE SAME WILL BE NOTIONAL ONLY. 7. WE HAVE HEARD BOTH THE PARTIES ON THIS ISSUE. T HERE CANNOT BE ANY DISPUTE TO THE PROPOSITION THAT IF NO INTEREST IS RECEIVED BY THE ASSESSEE ON SOLATIUM AND ADDITIONAL COMPENSATION TH EN THERE IS NO QUESTION OF MAKING ASSESSMENT OF THAT INTEREST TO T HE INCOME OF THE ASSESSEE. HOWEVER THIS CONTENTION OF THE ASSESSEE HAS TO BE VERIFIED. THEREFORE AFTER HEARING BOTH THE PARTIES WE RESTO RE THIS ISSUE FOR ALL THESE 5 YEARS TO THE FILE OF AO TO VERIFY SUCH CONT ENTION OF THE ASSESSEE AND IF NO INTEREST IS RECEIVED BY THE ASSESSEE ON T HE COMPONENT OF SOLATIUM OR ADDITIONAL COMPENSATION THEN THE QUESTI ON OF MAKING ASSESSMENT OF THE ALLEGED INTEREST DOES NOT ARISE A ND IF THE INTEREST IS RECEIVED ON SUCH COMPONENT THEN THE SAME MAY BE ASS ESSED AS PER PROVISIONS OF LAW. 8. FOR STATISTICAL PURPOSES THIS GROUND RELATING T O ALL THE YEARS IS ALLOWED. 5 ITA NOS. 2789 TO 2793/DEL/2007 9. THE THIRD GRIEVANCE OF THE ASSESSEE IN THE PRESE NT APPEALS IS FOR NON-GRANT OF LITIGATION EXPENSES AGAINST CAPITAL GA IN INCOME. THIS ISSUE HAS BEEN DISCUSSED BY LD. CIT(A) AT PAGE 9 IN PARA (VI). HE HAS MENTIONED TO THE ORDER OF CIT(A) DATED 16.11.1998 I N WHICH CERTAIN RELIEF WAS GRANTED TO THE ASSESSEE AND IT IS MENTIONED BY LD. CIT THAT NO FURTHER RELIEF IS WARRANTED. THE ASSESSEE IS AGGRI EVED HENCE IN APPEAL. IT IS THE CASE OF THE ASSESSEE THAT SUBSTANTIAL EXP ENSES HAVE BEEN INCURRED BY THE ASSESSEE ON LITIGATION TO GET THE I NCREASED COMPENSATION AND IT IS THE RESULT OF THAT LITIGATION THE ASSESSE E COULD RECEIVE LARGER AMOUNT THEREFORE EXPENSES TO THE TUNE OF 20% OF T HE AMOUNT RECEIVE SHOULD BE DEDUCTED AS LITIGATION EXPENSES. IT IS SEEN THAT FOR A.Y. 1988- 89 & 1990-91 THE EXPENSES ON ACCOUNT OF COST OF IMP ROVEMENT AND LITIGATION HAS BEEN ALLOWED BY THE AO AT RS. 23 000 /- AND RS. 21 000/- RESPECTIVELY AND FOR OTHER YEARS NO SUCH ALLOWANCE IS MADE. 10. DURING THE COURSE OF HEARING LD. AR WAS REQUIRE D TO EXPLAIN THAT UNDER WHICH SECTION OF INCOME TAX ACT 1961 SUCH EX PENSES ARE BEING CLAIMED. IT WAS SUBMITTED BY LD. AR THAT IN OTHER CASES THE LITIGATION EXPENSES HAVE BEEN ALLOWED AT 20% BY THE LD. CIT(A) BUT HE COULD NOT MENTIONED ABOUT THE SECTION UNDER WHICH SUCH ALLOWA NCE CAN BE MADE. THE AO MAY HAVE ALLOWED THESE EXPENSES ON PRODUCTIO N OF SOME EVIDENCES BY THE ASSESSEE. NO MATERIAL HAS BEEN BR OUGHT ON RECORD BY THE ASSESSEE TO SUGGEST THAT SUCH CLAIM OF THE ASSE SSEE WAS SUPPORTED BY ANY EVIDENCE OR BY ANY STATUTORY PROVISION. THE CONTENTION OF LD. AR WAS THAT ASSESSEE HAS BEEN INCURRING THE EXPENSES O N LITIGATION AND THE 6 ITA NOS. 2789 TO 2793/DEL/2007 EXPENSES THUS WERE NECESSARILY INCURRED. HOWEVER IN ABSENCE OF ANY EVIDENCE TO SHOW THAT ANY SUCH EXPENDITURES WERE IN CURRED AND ALSO IN ABSENCE OF ANY STATUTORY PROVISIONS FOR ALLOWABILIT Y FOR SUCH SUM WE ARE UNABLE TO ACCEPT THE SUBMISSION OF LD. AR THAT LITI GATION EXPENSES SHOULD BE ALLOWED AT UNIFORM RATE OF 20% FOR ALL THE YEARS UNDER CONSIDERATION. THEREFORE WE FOUND NO FORCE IN SUCH CONTENTION OF LD. AR AND THIS GROUND FOR ALL THE FIVE YEARS IS REJECTED. 11. IN GROUND NO. 4 IT IS THE GRIEVANCE OF THE ASS ESSEE THAT INTEREST UNDER VARIOUS PROVISIONS OF ACT COULD NOT BE CHARGE D IN VIEW OF THE HEAVY PAYMENT MADE BY THE ASSESSEE IN THE SHAPE OF TDS ETC. WE HAVE HEARD BOTH THE PARTIES ON THIS ISSUE. IF THE TDS ETC. IS IN EXCESS OF THE TAX DEMAND THEN OF COURSE THE SET OFF HAS TO BE GIVEN FIRST AND THEN TO COMPUTE THE INTEREST LIABILITY OF THE ASSESSEE U NDER VARIOUS PROVISIONS. NO PARTICULAR DATAS HAVE BEEN FURNISHED BEFORE US T O SHOW THAT INFACT THE ASSESSEE HAD MADE LARGER PAYMENTS AND DESPITE THOSE LARGER PAYMENTS INTEREST WAS CHARGED FROM THE ASSESSEE WITHOUT GIVI NG SET OFF OF THE SAME PRIOR TO LEVY OF THE INTEREST. THIS IS A MATT ER OF VERIFICATION. THEREFORE WE RESTORE THE ISSUE OF COMPUTATION OF I NTEREST TO THE FILE OF AO TO RE-COMPUTE THE INTEREST UNDER ALL THE PROVISI ONS FOR WHICH THE INTEREST IS LEVIED UPON THE ASSESSEE AFTER GIVING A SSESSEE A REASONABLE OPPORTUNITY OF HEARING. FOR STATISTICAL PURPOSES THIS GROUND FOR ALL THE FIVE YEARS IS ALLOWED. 7 ITA NOS. 2789 TO 2793/DEL/2007 12. IN THE RESULT ALL THE APPEALS ARE PARTLY ALLOW ED IN THE MANNER AFORESAID. ORDER PRONOUNCED IN THE OPEN COURT ON 21.05.10 (K.D. RANJAN) ACCOUNTANT MEMBER (I.P. BANSAL) JUDICIAL MEMBER DATED: *KAVITA COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT NEW DELHI. TRUE COPY BY ORDER DEPUTY REGISTRAR