The ACIT, Circle-3,, Surat v. Smt. Harshaben M.Sheta, Surat

ITA 3046/AHD/2009 | 2006-2007
Pronouncement Date: 22-01-2010 | Result: Dismissed

Appeal Details

RSA Number 304620514 RSA 2009
Assessee PAN AQMPS2060G
Bench Ahmedabad
Appeal Number ITA 3046/AHD/2009
Duration Of Justice 2 month(s) 9 day(s)
Appellant The ACIT, Circle-3,, Surat
Respondent Smt. Harshaben M.Sheta, Surat
Appeal Type Income Tax Appeal
Pronouncement Date 22-01-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 22-01-2010
Date Of Final Hearing 12-01-2010
Next Hearing Date 12-01-2010
Assessment Year 2006-2007
Appeal Filed On 13-11-2009
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD. BEFORE: HON'BLE SHRI T.K. SHARMA JUDICIA L MEMBER AND HON'BLE SHRI N.S. SAINI ACCOUNTANT MEMBER ITA NO. 3046/AHD/2009 ASSESSMENT YEAR : 2006-2007 ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE-3 SURAT VERSUS SMT. HARSHABEN M. SHETA SURAT PAN: AQMPS 2060 G (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI GOVIND SINGHAL SR. D.R. FOR THE RESPONDENT : NONE (WRITTEN SUBMISSION FI LED) ORDER PER T K SHARMA JUDICIAL MEMBER :- THIS APPEAL BY THE REVENUE IS AGAINST THE ORDER DATED 10.08.2009 OF LD. COMMISSIONER OF INCOM E TAX(APPEALS)-V SURAT FOR THE ASSESSMENT YEAR 2006-07 DELETING THE ADDITION O F RS.9 78 800/- MADE BY THE A.O. ON ACCOUNT OF UNEXPLAINED INVESTMENT UNDER SECTION 69B OF THE INCOME TAX ACT 1961. 2. BRIEF FACTS RELATING TO CONTROVERSY INVOLVED IN THE AFORESAID GROUND OF APPEAL IS THAT IN THE ASSESSMENT ORDER THE A.O. MADE ADDITIO N OF RS.9 78 800/- ON ACCOUNT OF UNEXPLAINED INVESTMENT UNDER SECTION 69B IN RESPECT OF DIFFERENCE OF SHORT ACCOUNTING OF VALUE IN THE BOOKS OF ACCOUNTS AMOUNTING TO RS.9 78 800/- IN RESPECT OF PLOT OF LAND PURCHASED AT UMRA. ON APPEAL IN THE IMPUGNED ORDER THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) DELETED THE ADDITION ON THE FOL LOWING GROUNDS :- I) THE ADDITION FOR UNDERVALUATION OF PURCHASE O F AFORESAID PROPERTIES IS MADE IN THE HANDS OF THE 'PURCHASER' ON THE BASI S OF 'DEEMING PROVISIONS OF SECTION 50C OF THE 1. T. ACT' R WHERE AS THE ADDITION IN THE CASE OF THE ASSESSES IS MADE U/S. 69B OF THE ACT BE ING 'UNDISCLOSED INVESTMENT'. II) WHAT CANNOT BE DENIED IS THAT SUCH ADDIT ION IS MADE BY THE AO WITHOUT ANY SUBSTANTIVE OR CORROBORATIVE EVIDENCE T O SHOW THAT THE PURCHASE PRICE ACTUALLY PAID BY THE ASSESSEE WAS MO RE THAN WHAT HAS BEEN SHOWN IN THE PURCHASE DEED III) RELIANCE IS PLACED ON THE DECISION OF THE HON. ITAT AHMEDABAD BENCH IN THE CASE OF BHARAT M. PATEL- V/S .- ACIT DTD. 29.8.2008 WHEREIN THE HON'BLE ITAT HAS ON THE IDENT ICAL ISSUE DELETED THE ADDITION MADE BY THE ACIT U/S. 69B OF THE ACT. 2 ITA NO.3046/AHD/2009 AGGRIEVED BY THE ORDER OF LEARNED COMMISSIONER OF I NCOME TAX(APPEALS) THE REVENUE IS IN APPEAL BEFORE US. 3. ON THE DATE FIXED FOR HEARING NONE WAS PRESENT ON BEHALF OF THE ASSESSEE. HOWEVER WRITTEN SUBMISSIONS WERE FILED WHEREIN IT WAS CONTENDED THAT CONTROVERSY INVOLVED IN THIS APPEAL IS SQUARELY COVERED BY THE DECISION OF ITAT AHMEDABAD IN VARIOUS CASES INCLUDING THE CASE OF SHRI BHARAT M. PATEL IN ITA NO. 1749/AHD/2008 ORDER DATED 29.08.2008. THE LD. LEARNED COMMISSIONE R OF INCOME TAX(APPEALS) HAS DELETED THE ADDITION FOLLOWING THE DECISION OF ITAT AHMEDABAD IN THE CASE OF BHARAT N. PATEL (SUPRA). IN THE WRITTEN SUBMISSION A PRAY ER WAS MADE TO DISMISS THE APPEAL OF THE DEPARTMENT BECAUSE THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS FOLLOWED THE DECISION OF THE HON'BLE JURISDICTIONAL TRIBUNAL IN DELETING THE ADDITION OF RS.9 78 800/- MADE UNDER SECTION 69B OF THE INCOME TAX ACT. 4. ON THE OTHER HAND SHRI GOVIND SINGHAL SR. D.R. APPEARING ON BEHALF OF REVENUE CONTENDED THAT THE DECISION OF LEARNED COMM ISSIONER OF INCOME TAX(APPEALS) IS NOT ACCEPTABLE FOR THE FOLLOWING RE ASONS :- I) THE LD. CIT(A) HAS NOT APPRECIATED THAT S ECTION 50C OF THE I. T. ACT MAY BE A 'DEEMING PROVISION' FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAIN YET IT LAYS DOWN A VERY BASIC PRINCIP LE THAT ANY TRANSACTION WITHIN A PARTICULAR AREA WILL HAVE TO M ATCH WITH THE 'JANTRI PRICE' FIXED BY THE STAMP DUTY AUTHORITIES GOVERNED BY GOVT. OF GUJARAT FIXED FOR THE AREA AND THE SALE CONSIDERATI ON WOULD BE THE RATE AT WHICH THE PROPERTY IS EXPECTED TO BE SOLD IN THE SAID AREA. II ) THE LD C1T(A) HAS NOT APPRECIATED THAT THE 'JANTRI RATES' ARE NOT SIMPLY A 'BLANKET GUIDELINES' AND IT TAKES INTO ACCOUNT /CONSIDERATION ALL RELEVANT FACTORS OF AN AREA AND IS FIXED BY THE FIELD STAMP DUTY AUTHORITIES III) THE LD. C1T(A) HAS NOT APPRECIATED THAT ONCE IT IS 'DEEMED' AND 'ACCEPTED' THAT THE PROPERTY HAS BEEN SOLD FOR A PARTICULAR PRICE WHICH IS THE FAIR MARKET VALUE IN A GIVEN AREA THEN IT WOULD ALSO HAVE TO BE DEEMED AND ACCEPTED THAT THE PURCHASER HAS PA ID THE SAME AMOUNT. IV) THE LD. CIT(A) HAS NOT APPRECIATED THAT TH E DEEMING PROVISIONS DO NOT EXIST IN A THIN AIR NOR IT IS JUST AN ABSTRA CT CONCEPT. THE DEEMING PROVISIONS HAVE TO BE ANCHORED TO CERTAIN GROUND RE ALITIES AND DAY TO DAY PRACTICAL INTERACTIONS AND DEALINGS THEREFORE WHEN A PROPERTY IS SOLD FOR A PARTICULAR SUM IT FOLLOWS AS A NATURAL C OROLLARY THAT IT HAS BEEN BOUGHT AT THE SAME PRICE AS WELL 3 ITA NO.3046/AHD/2009 V) THE LD. CLT(A) HAS NO APPRECIATED THAT THE JANTRI FACTORS ARE FIXED ON FACTORS LIKE ROAD FACILITY THE DEVELOPMEN T STAGE OF THAT AREA AND THE AMENITIES AVAILABLE IN THE SAID AREA BY THE GOVERNMENT AUTHORITIES AS WELL AS PREVAILING MARKET RATES OF T HE LANDS REMAIN FAR GREATER THAN THE JANTRY RATE FIXED BY THE STAMP DUT Y AUTHORITIES. VI) THE LD. CLT(A) HAS NOT APPRECIATED THAT T HE ASSESSEE HAD ACCEPTED THE UNACCOUNTED INVESTMENT BY WAY OF ACCEP TING THE VALUE DETERMINED BY THE STAMP DUTY AUTHORITIES AND HAS NO T OFFERED ANY EXPLANATION TO THE AO DURING THE COURSE OF ASSESSME NT PROCEEDING WITH REGARD TO THE NATURE ANTI SOURCES OF SUCH INVESTMEN T VII) THE LD CIT(A) HAS RELIED UPON THE DECISI ON OF THE HON. LTAT IN THE CASE OF SHRI BHARAT M. PATEL (1TA NO 1749/AHD/ 2008 DTD 29.8.2008 WHEREIN THE IDENTICAL ISSUE WAS INVOLVED AND THE HON. 1TAT HAS REVERSED THE ORDER OF CIT(A) UPHOLDING THE ORDE R OF AO FOR MAKING ADDITION U/S. 69B OF THE ACT THE DECISION OF THE H ON. LTAT IN THE CASE OF BHARAT N. PATEL IS NOT ACCEPTED IN PRINCIPLE BY THE DEPARTMENT BUT NO APPEAL U/S. 260A WAS PREFERRED BY THE DEPARTMENT IN THE SAID CASE AS THE TAX EFFECT INVOLVED IN THE SAID CASE WAS BEL OW RS. 4 LAKH IN VIEW OF INSTRUCTION NO. 5 OF 2008 DATED 15.05.2008 ISSUE D BY THE CBDT R.W.S. 268A OF THE ACT. IN ADDITION TO ABOVE THE LD. D.R. SUBMITTED THAT W HERE THERE IS A SIGNIFICANT UNDER VALUATION OF IMMOVABLE PROPERTY IN DISCLOSED APPARE NT CONSIDERATION THERE WOULD BE REBUTTABLE PRESUMPTION OF UNDER STATEMENT OF CONSID ERATION ALSO. IN THIS CASE THE ASSESSEE PURCHASED PLOT OF LAND AT UMRA AT APPARENT CONSIDERATION. IN SUPPORT OF THIS RELIANCE WAS PLACED ON THE DECISION OF ITAT A BE NCH DELHI IN THE CASE OF HANEMP PROPERTIES (P.) LTD. VS.- ACIT WARD-12(3) REPORTE D IN [2006] 101 ITD 19 (DELHI) WHEREAS VALUE OF SAID PLOT ADOPTED BY STAMP DUTY VA LUATION AUTHORITY IS RS.13 33 800/-. THUS THERE WAS SIGNIFICANT UNDER VA LUATION. THE ONUS WAS ON THE ASSESSEE TO EXPLAIN UNDER WHAT CIRCUMSTANCES HE COU LD AVAIL TO PURCHASE THE PLOT OF LAND IN QUESTION WHICH IS JUST EQUIVALENT TO 25% O F MARKET VALUE. NO EXPLANATION WHATSOEVER IS FURNISHED BY THE ASSESSEE. THEREFORE ON THIS GROUND ALONE ADDITION OF RS.9 78 800/- MADE BY THE A.O. ON ACCOUNT OF UNEXPL AINED INVESTMENT UNDER SECTION 69B BE RESTORED. 5. HAVING HEARD THE LD. DEPARTMENTAL REPRESENTATIVE WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF AUTHORITIES BELOW AS WELL AS THE DECISION OF HON'BLE ITAT AHMEDABAD BENCH IN THE CASE OF BHARAT M. PATEL (SUP RA). SECTION 50C OF THE INCOME TAX ACT IS VERY SPECIFIC AND INSERTED SPECIFICALLY TO TAX THE CAPITAL GAIN FROM TRANSFER OF IMMOVABLE PROPERTY AND IT CANNOT BE APPLIED TO T HE BUYER OF THE PROPERTY. IN THE IMPUGNED ORDER THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS MERELY 4 ITA NO.3046/AHD/2009 FOLLOWED THE DECISION OF HON'BLE ITAT AHMEDABAD BE NCH IN THE CASE OF BHARAT M. PATEL (SUPRA) AND HELD IN PARA 7 TO 10 OF THE IMPUG NED ORDER AS UNDER :- 7. I HAVE CONSIDERED THE VIEWS OF THE ASSESSING OFF ICER SUBMISSIONS OF THE APPELLANT AND JUDICIAL DECISIONS REFERRED TO BY THE APPELLANT. I FIND THAT THE ACTION OF THE ASSESSING OFFICER IS NOT SUSTAINABLE. THE HON'BLE ITAT IN THE CASE OF BHARATKUMAR N. PATEL V S.- ACIT CIRCLE-3 SURAT HAS DELETED THE ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PROPERTY MADE BY THE VERY SAME ASSESSING OFFICER ACIT CIR. 3 SURAT FOR THE ASSESSMENT YEAR 2005-06 AND HAS HELD AS UNDER :- 10. AFTER CAREFUL CONSIDERATION OF THE RIVAL SUBMI SSIONS FACTS AND CIRCUMSTANCES OF THE CASE PROVISIONS OF LAW AS WEL L AS DECISION(S) OF HON'BLE SUPREME COURT AND VARIOUS BENCHES RELIED UP ON BY THE PARTIES WE ARE OF THE OPINION THAT THE C.I.T.(A) WAS NOT JU STIFIED IN CONFIRMING THE ADDITION BY DRAWING THE ANALOGICAL PROVISIONS O F SECTION 50C OF THE ACT. THE C.I.T.(A) CONFIRMED THE ADDITION BY OBSERV ING THAT IF THIS PROPOSITION IS TO BE ACCEPTED THEN THE DEEMING PRO VISIONS OF SECTION 50C OF THE ACT WILL BECOME INOPERABLE. HE FURTHER HELD THAT SECTION 50C OF THE ACT IS APPLICABLE TO THE SELLER AND PROVIDES THAT T HE VALUATION MADE BY THE STAMP VALUATION AUTHORITY IS TO BE DEEMED AS TH E CONSIDERATION RECEIVED BY THE SELLER. HAVING SAID SO THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) FURTHER HELD THAT THE CONVERSE WILL ALSO HAVE TO BE ACCEPTED AS TRUE I.E. THE VALUATION OF STAMP VALUA TION AUTHORITY WILL HAVE TO BE DEEMED AS THE CONSIDERATION PAID BY THE PURCH ASER OF THE PROPERTY AS WELL. 10.1. WE ARE UNABLE TO AGREE WITH THE AFORESAID ANA LOGY DRAWN BY THE CIT(APPEALS) BECAUSE HAD THE LEGISLATURE INTENDED S O IT COULD HAVE EASILY SPECIFIED SUCH A PROPOSITION IN THE PROVISIO N ITSELF. 11. IN VIEW OF THE SETTLED PROPOSITION OF LAW THAT THE APPELLATE AUTHORITY HAS NO RIGHT EITHER TO ADD OR TO DELETE A NY WORD FROM THE PROVISIONS OF LAW UNLESS AND UNTIL THE SAME ARE FOU ND TO BE HAVING SOME AMBIGUITY WE ARE UNABLE TO SUSTAIN THE STAND OF TH E CIT(APPEALS) THERE BEING NO AMBIGUITY IN THE SECTION 50C OF THE ACT W E ARE OF THE OPINION THAT THESE PROVISIONS ARE NOT APPLICABLE TO THE PUR CHASER. 8. THE DECISION OF THE HON'BLE ITAT IS VERY CLEAR O N THE SUBJECT ISSUE UNDER APPEAL. THE DECISION OF THE JURISDICTIONAL IT AT IS BINDING ON THE TAX AUTHORITIES WORKING IN THE SAME JURISDICTION. JUDIC IAL DISCIPLINE AND PROPRIETY MANDATES STRICT ADHERENCE OF THE ORDER OF JURISDICT IONAL COURT OR TRIBUNAL. THE ASSESSING OFFICER HAS ERRED IN NOT FOLLOWING TH E ORDER OF THE JURISDICTIONAL ITAT WHICH WAS BROUGHT TO HIS NOTICE AT THE TIME OF ASSESSMENT PROCEEDINGS AND REFERRED TO IN PARA 4.1 OF THE ASSESSMENT ORDER . 9. IT IS ALSO PERTINENT TO MENTION THAT THE ASSESSI NG OFFICER HAS NOT CARRIED OUT ANY INDEPENDENT INVESTIGATION TO SHOW T HAT THE ASSESSEE HAS MADE ANY INVESTMENT IN THE PROPERTY OTHER THAN THE DISCL OSED CONSIDERATION WHICH IS EITHER NOT RECORDED IN HER BOOKS OR EXPLANATION OFF ERED BY HER IN RESPECT OF SUCH INVESTMENT IS NOT FOUND TO BE SATISFACTORY. IN VIEW OF THE ABOVE AND RESPECTFULLY FOLLOWING THE DECISION OF THE HON'BLE ITAT AHMEDABAD BENCH I 5 ITA NO.3046/AHD/2009 DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION OF RS.9 78 800/- MADE U/S. 69B OF THE ACT. 10. IN VIEW OF THIS SPECIFIC DECISION OF HON'BLE IT AT AHMEDABAD I DO NOT FIND IT NECESSARY TO GO INTO THE OTHER JUDICIAL DEC ISIONS WHICH HAVE BEEN REFERRED TO IN THE WRITTEN SUBMISSIONS AND COPIES S UBMITTED DURING THE PROCEEDINGS BEFORE ME BY THE A.R. 6. WITH REGARD TO THE DECISION OF ITAT A BENCH DELHI IN THE CASE OF HANEMP PROPERTIES (P.) LTD. VS.- ACIT WARD-12(3) REPORTE D IN [2006] 101 ITD 19 (DELHI) (SUPRA) RELIED BY THE LD. D.R. IN THAT DECISION T HE TRIBUNAL WAS NOT CONCERNED WITH THE PROVISIONS CONTAINED IN SECTION 50C OF THE INCO ME TAX ACT 1961. IN THE IMPUGNED ORDER THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS FOLLOWED THE DECISION OF ITAT AHMEDABAD IN VARIOUS CASES IN CLUDING THE CASE OF SHRI BHARAT M. PATEL IN ITA NO. 1749/AHD/2008 ORDER DATED 29.0 8.2008 (SUPRA) WHEREIN IT WAS HELD THAT DEEMING PROVISIONS OF SECTION 50C IS VERY SPECIFIC AND IS APPLICABLE TO SELLER AND NOT TO BUYER. SINCE THE ASSESSEE BEFORE US IS A BUYER AND NOT SELLER THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) IS LEGALLY AND FACTUALLY CORRECT IN FOLLOWING THE DECISION OF ITAT AHMEDABAD IN THE CASE OF SHRI BHARAT M. PATEL IN ITA NO. 1749/AHD/2008 ORDER DATED 29.08.2008 (SUPRA) AND D ELETING THE ADDITION OF RS.9 78 800/- MADE UNDER SECTION 69B OF THE INCOME TAX ACT 1961. WE THEREFORE DECLINE TO INTERFERE. 7. IN THE RESULT THE APPEAL OF THE REVENUE IS DISM ISSED. THIS ORDER IS PRONOUNCED IN OPEN COURT ON 22 ND JANUARY 2010. SD/- SD/- (N.S. SAINI) (T.K. SHARMA) ACCOUNTANT MEMBER JUD ICIAL MEMBER DATED: 22 /01/2010 COPY OF THE ORDER IS FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) CONCERNED 4. THE CIT 5. THE DR AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER // TRUE COPY // ASSTT. REGISTRAR/ DEPUTY REGISTRAR ITAT AHMEDABAD BENCHES AHMEDABAD. LAHA/SR. P.S.