The Dy.CIT, Agra v. Sri Amit Jain, Agra

ITA 298/AGR/2009 | 2003-2004
Pronouncement Date: 18-03-2011 | Result: Dismissed

Appeal Details

RSA Number 29820314 RSA 2009
Assessee PAN ADWPJ8978M
Bench Agra
Appeal Number ITA 298/AGR/2009
Duration Of Justice 1 year(s) 7 month(s) 24 day(s)
Appellant The Dy.CIT, Agra
Respondent Sri Amit Jain, Agra
Appeal Type Income Tax Appeal
Pronouncement Date 18-03-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 18-03-2011
Date Of Final Hearing 20-01-2011
Next Hearing Date 20-01-2011
Assessment Year 2003-2004
Appeal Filed On 24-07-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH AGRA BEFORE SHRI P.K. BANSAL ACCOUNTANT MEMBER AND SHRI H.S. SIDHU JUDICIAL MEMBER ITA NO. 298 299 /AGRA/2009 ASSTT. YEAR : 2003-04 & 2004-05 DY. COMMISSIONER OF INCOME-TAX VS. SHRI AMIT JAI N CENTRAL CIRCLE AGRA. 17-18 GOPAL KUNJ NEW AG RA. (PAN ADWPJ 8978 M) (APPELLANT) (RESPONDENT) FOR APPELLANT : SHRI HOMI RAJVANSH CIT DR. FOR RESPONDENT : SHRI K.C. AGARWAL ADVOCATE. ORDER PER BENCH: THE REVENUE HAS FILED THESE APPEALS AGAINST THE O RDERS OF CIT(A) DATED 01.04.2009 FOR A.Y. 2003-04 & 2004-05. 2. THE FIRST ISSUE RAISED BY REVENUE IN A.Y. 2003-0 4 VIDE GROUNDS NOS. 1 TO 3 RELATES TO DELETION OF ADDITION OF RS.2 25 163/- MADE U/S. 50C OF THE INCOME-TAX ACT. THE BRIEF FACTS APROPOS THIS ISSUE ARE THAT THE ASSESSEE PURCHASED A PROPERTY AT BASAI JOINTLY WITH SHRI GURMEET SINGH EACH HAVING 50% SHARE FOR RS.9 00 000/- PLU S STAMP CHARGES OF RS.90 000/- AND REGISTRATION CHARGES OF RS.5 020/- TOTALING TO RS .9 95 020/-. THE VALUE OF ASSESSEES SHARE THUS CAME TO RS.4 97 510/-. THE 1/3 RD OF THE ABOVE PROPERTY WAS JOINTLY SOLD TO ONE SHRI RAJEEV MITTAL ON 10.01.2003 FOR RS.3 00 000/-. HOWEVER THE STAMP VALUATION OF THE LAND WAS RS.7 82 000/-. THE ASSESSING OFFICER NOTICED THAT THE SHARE OF ASS ESSEE IN THE COST OF ACQUISITION OF LAND WAS RS.1 65 837/- WHEREAS THE HIS SHARE IN FULL SALE CO NSIDERATION OF PROPERTY WAS RS.3 91 000/-. THE ASSESSEE WAS REQUIRED TO FILE WORKING OF CAPITAL GA INS AS PER PROVISIONS OF SECTION 50C OF THE ACT 2 BUT SINCE NO SUCH WORKING WAS FILED NOR ANY EXPLANA TION WITH RESPECT THERETO WAS OFFERED THE ASSESSING OFFICER MADE AN ADDITION OF RS.2 25 163/- (RS.3 91 000 1 65 837) U/S. 50C OF THE ACT. 3. BEFORE THE LEARNED CIT(A) THE ASSESSEE CONTENDE D THAT THE ASSESSEE IS NOT AN INVESTOR BUT A DEALER IN REAL ESTATE AS IS EVIDENT FROM THE FAC T THAT THE ASSESSING OFFICER HIMSELF IN THE LAST YEAR HAS ASSESSED THE PROFIT ON SALE OF LAND FOR RS .4 00 000/-. THEREFORE THE PROVISIONS OF SECTION 50C ARE NOT ATTRACTABLE IN THE CASE OF REAL ESTATE DEALERS LIKE ASSESSEE AND THE PROFIT CAN BE CALCULATED ON THE BASIS OF REAL COST OF ACQUISITION AND ACTUAL SALE CONSIDERATION. THEREFORE THE ADDITION OF RS.2 25 863/- MADE BY THE ASSESSING OFF ICER WAS CLAIMED TO BE UNJUSTIFIED AND LIABLE TO BE DELETED. THESE SUBMISSIONS WERE FORWARDED BY THE CIT(A) TO THE ASSESSING OFFICER FOR SEEKING REMAND REPORT. THE ASSESSING OFFICER HOWEV ER MADE NO COMMENTS ON THE SUBMISSIONS OF ASSESSEE INTER ALIA OBSERVING THAT THE SAME HA VE BEEN CONSIDERED IN THE ASSESSMENT PROCEEDINGS AND NO FURTHER COMMENTS ARE REQUIRED TH EREON. THE CIT(A) AFTER CONSIDERING THE PURCHASE DEED OF LAND AND THE SALE DEED OF 1/3 RD OF THE PROPERTY OBSERVED THAT THE ASSESSEES SHARE IN ACQUISITION OF LAND WAS RS.1 65 835/- AND ITS 50% SHARE IN SALE CONSIDERATION WAS RS.1 50 000/- AS THE PROPERTY WAS SOLD FOR RS.3 00 000/-. HE THEREFORE SUSTAINED A LOSS OF RS.15 837/- ON THIS TRANSACTION. HE ALSO OBSERVED T HAT SINCE THE ASSESSEE DEALS IN REAL ESTATES AND HAS ALSO SHOWN THE PROFIT AND LOSS FROM THIS BUSINE SS THE PROVISIONS OF SECTION 50C ARE NOT ATTRACTED. HE THEREFORE DELETED THE ADDITION OF R S.2 25 163/- MADE BY ASSESSING OFFICER U/S. 50C OF THE ACT. BEING AGGRIEVED THE REVENUE IS IN APPE AL BEFORE US. 3 4. THE LEANED DR CONTENDS THAT SINCE THE ASSESSEE C OULD NOT BE ABLE TO SUBMIT ANY EXPLANATION BEFORE THE ASSESSING OFFICER AGAINST AP PLICABILITY OF SECTION 50C NOR COULD HE SUBMIT THE WORKING OF CAPITAL GAINS ON PURCHASE AND SALE O F PROPERTY THE CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION. IT WAS ALSO SUBMITTED THAT N O LOSS AS OBSERVED BY LD. CIT(A) HAS BEEN CLAIMED BY ASSESSEE. IT WAS ALSO SUBMITTED THAT TH E LD. CIT(A) WAS NOT JUSTIFIED IN ACCEPTING THE PLEA OF ASSESSEE THAT HE WAS NOT AN INVESTOR BUT A DEALER IN REAL ESTATE WITHOUT APPRECIATING THE FACT THAT THE IMPUGNED PROPERTY WAS SHOWN AS FIXED ASSET IN THE BALANCE SHEET. 5. THE LEARNED AR ON THE OTHER HAND RELIED ON THE ORDER OF CIT(A). 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE PER USED THE MATERIAL AVAILABLE ON RECORD. HAVING CONSIDERED THE REMAND REPORT SUBMITTED BY TH E ASSESSING OFFICER ON THE SUBMISSIONS OF THE ASSESSEE AND SUPPORTING ANNEXURES WE FIND THAT THE ASSESSING OFFICER HAS MADE NO ADVERSE COMMENTS THEREON AND THEREFORE IN OUR OPINION TH E LEARNED CIT(A) HAS RIGHTLY ACCEPTED THE CONTENTION OF ASSESSEE THAT THE PROVISIONS OF SECTI ON 50C ARE NOT APPLICABLE IN THE CASE OF ASSESSEE BEING A DEALER IN REAL ESTATE. THIS FINDI NG OF LEARNED CIT(A) FURTHER STANDS SUBSTANTIATED FROM THE UNCONTROVERTED PLEA OF THE ASSESSEE THAT I N THE PRECEDING YEAR THE ASSESSEE HAD SHOWN PROFIT OF RS.400000/- ON THE SALE OF LAND AND THE S AME WAS ASSESSED BY THE ASSESSING OFFICER AS SUCH. IN SUCH CIRCUMSTANCES IN OUR OPINION THE LD . CIT(A) APPEARS TO HAVE COMMITTED NO ERROR WHILE CONSIDERING THE CONTENTION OF ASSESSEE THAT H E SUFFERED A LOSS OF RS.15837/- WHICH HAS TO BE WORKED OUT ON THE BASIS OF ACTUAL PURCHASE AND A CTUAL SALE CONSIDERATION OF THE PROPERTY. THE LEARNED CIT(A) HAS DONE SO AFTER EXAMINING THE PURC HASE DEED OF LAND IN QUESTION AND SALE DEED OF THE PORTION THAT WAS SOLD BY HIM TO ONE SHRI RAJ EEV MITTAL AS SUBMITTED BY THE ASSESSEE. THE 4 REVENUE HAS BROUGHT OUT NO MATERIAL ON RECORD TO DI SCARD THE FINDINGS REACHED BY THE LEARNED CIT(A) IN THE IMPUGNED ORDER. WE THEREFORE FIND N O REASON TO INTERFERE WITH THE SAME. ACCORDINGLY THE ORDER OF LEARNED CIT(A) IS CONFIRM ED ON THIS COUNT. 7. GROUND NOS. 4 & 4(I) IN APPEAL FOR A.Y. 2003-04 AND THE ONLY GROUND NOS. 1 & 1(I) IN APPEAL FOR A.Y. 2004-05 CHALLENGE THE DELETION OF A DDITION OF RS.13 14 500/- AND RS.1 27 41 000/- RESPECTIVELY MADE ON ACCOUNT OF U NEXPLAINED INVESTMENT IN PROPERTIES PURCHASED IN THE NAME OF KSHAMA SAHKARI AVAS SAMITI . 8. THE BRIEF FACTS OF THE CASES ARE THAT THE ASSESS EE IS A SECRETARY OF THE SOCIETY M/S. KSHAMA SAHKARI AVAS SAMITI 17-18 GOPAL KUNJ AGRA I.E. THE RESIDENCE OF ASSESSEE. A SEARCH U/S. 132(1) WAS CONDUCTED AT THE BUSINESS AND RESIDENTIA L PREMISES OF THE ASSESSEE AND HIS FAMILY MEMBERS THE ASSESSING OFFICER ISSUED NOTICE U/S. 15 3A ON 24.07.2007 IN RESPONSE TO WHICH THE ASSESSEE FILED RETURNS OF INCOME AT RS.20.08.2007 D ECLARING THE INCOME OF RS.1 13 333/- AND RS.1 13 487/- RESPECTIVELY FOR A.Y. 2003-04 AND 200 4-05. THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAD BEEN PURCHASING AND SELLING LANDS IN T HE NAME OF SOCIETY WHO HAD PURCHASED FOLLOWING LAND DURING THE PERIOD 11.10.2002 TO 27.1 2.2003 : SALE DEED REGISTRATION NO. AND DATE. NAME AND ADDRESS OF SELLER DETAILS OF PROPERTY SALE CONSIDERATION/ VALUE TAKEN FOR STAMP DUTY. 3522 11.10.2002 PRAKASH CHAND RAM NIWAS RESIDENTS OF LAKAWALI AARAJI KHATA NO.62 KHASARA NO.602 RAKBA 0.300 HECTARE MAUJA BASAL MUSTAQUIL 500000/- 1650000/- 1907 21.05.03 HARENDER SINGH BUNDU KATRA AGRA. AARAJI BASAL MUSTAQUIL KHASRA NO.550 RAKBA 1.455 HECTARE 1500000/- 4002000/- 3697 KISHAN CHAND AGARWAL & AARAJI VILLAGE TORA KHA SRA 1000000/- 5 10.09.2003 VISHNU AGRAWAL S/O H.G. AGARWAL 19 BAGH FARZANA AND OTHERS NO.13/1 RAKBA 0.918 HECTARE 1836000/- 4125 20.10.2003 JOMA S/O NAND LAL LAKAWALI AGRA AARAJI VILLAGE TORA KHASRA NO. 803 OF RAKBA 1.822 HECTARE 3500000/- 5170000/- 5199 27.12.2003 TIKAM SINGH MAHENDER SINGH HARI SINGH SONS OF SALIG RAM R/O KALAL KHERIA AGRA. AARAJI VILLAGE TORA KHASRA NO. 164 OF RAKBA 2.587 HECTARE 4800000/- 5170000/- THE TOTAL PURCHASES BY THE SOCIETY DURING THE ABOVE PERIOD WAS OF RS.1 13 00 000/- AND THE VALUE FOR STAMP DUTY WAS RS.1 76 69 000/-. 9. THE SUMMONS U/S. 131(1A) WERE ISSUED BY THE INVE STIGATION WING TO THE SOCIETY THROUGH ITS SECRETARY ASKING FOR CERTAIN DETAILS. THE ASSES SING OFFICER NOTED FROM THE STATEMENT OF SHRI AMIT JAIN THAT HE WAS STUDENT OF B. COM.-II YEAR. H E COULD NOT GIVE ANY DETAILS OF ANY TRANSACTION ON WHICH HE HAS EARNED COMMISSION INCOM E ALTHOUGH HE ADMITTED THAT HE IS SECRETARY OF THE SOCIETY WHICH WAS INCORPORATED IN THE YEAR 2003 AND THE SOCIETY IS DEALING IN PURCHASE AND SALE OF LAND ON NO PROFIT NO LOSS BASI S. THE WORK OF THE SOCIETY WAS BEING DONE BY ONE SHRI POORAN KHAN AND SOME OTHER PERSONS WHOSE NAMES HE DOES NOT KNOW. IT WAS ALSO STATED THAT HIS FATHER IS DOING BUSINESS OF PURCHAS E AND SALE IN SOCIETY FROM 17-18 GOPAL KUNJ AGRA. THE ASSESSING OFFICER WAS THEREFORE OF THE VIEW THAT SHRI AMIT JAIN WAS MERELY A NAME LENDER AND IS BEING USED AS A RUBBER STAMP BY THE S OCIETY AS SECRETARY. HE SUMMONED AND EXAMINED ON OATH SHRI SATYA NARAIN JAIN WHO ADMITTE D THAT THE SOCIETY IS OPERATING FROM HIS HOME AND THE WORK OF THE SOCIETY IS BEING LOOKED AF TER BY HIS SON SHRI AMIT JAIN. THE ASSESSING OFFICER NOTED THAT FROM THE PREMISES NO. 17-18 GOP AL KUNJ AGRA DURING THE COURSE OF SEARCH CERTAIN PAPERS CONTAINING THE DETAILS OF TRANSACTIO NS RELATING TO SOCIETY WERE FOUND WHICH IS 6 PLACED AT ANNEXURE A-30 PAGE 13. IN THIS ACCOUNT P AYMENTS AND RECEIPTS HAVE BEEN SHOWN FROM BANK OF BARODA ACCOUNT IN THE FOLLOWING MANNER : 23.11.2002 80 000/- PAID 07.12.2002 1 50 000/- PAID 10.12.2002 70 000/- PAID 14.01.2003 3 00 000/- RECEIVED. -------------- TOTAL : 6 00 000/- -------------- 10. THE ASSESSING OFFICER ACCORDINGLY ISSUED A QUES TIONNAIRE TO THE ASSESSEE. HE OBSERVED THAT SHRI SATYA NARAIN JAIN HAS CREATED MANY SOCIET IES BUT ULTIMATELY HE IS THE BENEFICIARY HIMSELF. HE THEREFORE TOOK THE VIEW THAT THE SOCI ETY WAS CREATED BY SRI AMIT JAIN AND HIS FATHER SATYA NARAIN JAIN DELIBERATELY AND CONSCIOUSLY TO C ONCEAL THE PROPERTY TRANSACTIONS AND TAX INCIDENCE THEREON. SINCE SHRI AMIT JAIN IS THE SEC RETARY OF SOCIETY AND HAD DONE ALL THE TRANSACTIONS IN THE NAME OF THE SOCIETY THEREFORE ENTIRE INVESTMENT AND TRANSACTION IN THE NAME OF SOCIETY WERE HELD TO BE THE TRANSACTIONS AND INV ESTMENTS OF SRI AMIT JAIN. HE NOTED THAT DURING THE ASSESSMENT YEAR 2004-05 INVESTMENT OF R S.15 LACS + 10 LACS + 35 LACS + 48 LACS = 1.08 CRORE WAS MADE IN PROPERTY AT SL. NO. 2 TO 5 O F ABOVE CHART AND DURING THE ASSESSMENT YEAR 2003-04 AN INVESTMENT OF RS.5 00 000/- WAS MADE IN THE PROPERTY. THE ADDITIONS OF THESE INVESTMENTS WERE MADE ON SUBSTANTIVE BASIS IN THE C ASE OF ASSESSEE WHILE ON PROTECTIVE BASIS IN THE HANDS OF SOCIETY. SIMILARLY HE PRESUMED THAT T HE SOCIETY WOULD HAVE INCURRED EXPENDITURE AT LEAST 10% OF THE VALUE OF THE PROPERTY IN STAMP DUT Y 3% BY WAY OF COMMISSION AND MISCELLANEOUS EXPENSES. HE THEREFORE ESTIMATED TH E SALE VALUE OF THESE PROPERTIES FOR THE A.Y. 2003-04 AT RS.16 50 000/- AND FOR A.Y. 2004-05 AT R S.1 61 78 000/- AND ACCORDINGLY ESTIMATED THE INVESTMENT IN STAMPS IN ASSESSMENT YEAR 2003-04 AT RS.1 65 000/- AND FOR A.Y. 2004-05 AT RS.16 17 800/-. THE COMMISSION FOR THE ASSESSMENT Y EAR 2003-04 WAS ESTIMATED AT RS.49 500/- 7 AND FOR ASSESSMENT YEAR 2004-05 AT RS.3 24 000/-. T HUS THE ASSESSING OFFICER WORKED OUT UNDISCLOSED INVESTMENT IN STAMP AND COMMISSION FOR THE ASSESSMENT YEAR 2003-04 AT RS.2 14 500/- AND FOR THE ASSESSMENT YEAR 2004-05 A T RS.19 41 000/-. HE ADDED THEREIN THE SUM OF RS.500000/- AND 600000/- FOR THE ASSESSMENT YEAR 2003-04 AND WORKED OUT UNEXPLAINED INVESTMENT FOR THE A.Y. 2003-04 AT RS.13 14 500/- A ND ADDED A SUM OF RS.1.08 CRORE AND 19 41 000/- FOR A.Y.2004-05 WORKING OUT UNDISCLOSED INVESTMENT AT RS.1 27 41 000/- AND ADDED THESE UNEXPLAINED INVESTMENTS ON PROTECTIVE BASIS I N THE INCOME OF THE ASSESSEE FOR BOTH THE YEARS. 11. THE LEARNED CIT(A) DELETED THE ADDITIONS FOR BO TH THE YEARS INTER ALIA OBSERVING THAT THE SOCIETY IS THE ABSOLUTE OWNER OF ALL THE PURCHASE A ND SALE TRANSACTIONS OF PROPERTY AND IT IS THE SOCIETY WHO HAS TO BE ASSESSED AS SEPARATE LEGAL EN TITY. HE ALSO OBSERVED THAT THE ASSESSEE HAS NO CONCERN WITH THE DEALINGS OF THE SOCIETY IN INDIVID UAL CAPACITY. THE CIT(A) HAS ALSO CONSIDERED THE SUBSTANTIVE ADDITIONS OF THE IMPUGNED UNEXPLAIN ED INVESTMENTS IN THE HANDS OF SOCIETY WHILE DELETING THE ADDITIONS IN THE HANDS OF ASSESSEE. 12. WE HAVE HEARD BOTH THE PARTIES AND HAVE PERUSED THE ENTIRE MATERIAL ON RECORD. KEEPING IN VIEW OUR DECISION OF THE EVEN DATE IN THE CASE O F SOCIETY M/S. KSHAMA AVAS SAMITI WE FIND NO JUSTIFICATION TO INTERFERE WITH THE DECISION REA CHED BY THE CIT(A) ON THIS COUNT. IN THAT CASE THE IMPUGNED UNEXPLAINED INVESTMENTS ADDED IN THE HANDS OF ASSESSEE IN THE PRESENT CASES HAVE BEEN CONSIDERED TO BE THE INVESTMENTS OF THE SOCIET Y AND THEIR SOURCE HAS ALSO BEEN ACCEPTED AS EXPLAINED ONE. THEREFORE IN OUR OPINION THE SAME INVESTMENTS CANNOT BE ADDED AS UNEXPLAINED INVESTMENTS IN THE HANDS OF ASSESSEE PARTICULARLY WHEN THE SAID INVESTMENTS STAND ADMITTED BY 8 THE SOCIETY TO HAVE BEEN MADE IN PURCHASE OF LANDS AND THE SOURCES OF SUCH INVESTMENTS STAND EXPLAINED BY THE SOCIETY AND ACCEPTED BY US. THE OR DER OF CIT(A) THEREFORE CALLS FOR NO INTERFERENCE. 13. IN THE RESULT BOTH THE APPEALS OF REVENUE FOR THE ASSESSMENT YEARS 2003-04 AND 2004-05 ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18.03.11. SD/- SD/- (H.S. SIDHU) (P.K. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 18 TH MARCH 2011 *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) BY ORDER 4. CIT CONCERNED 5. DR ITAT AGRA 6. GUARD FILE ASSISTANT REGISTRAR TRUE COPY