ACIT, Gurgaon v. Sh. Sat Narain Yadav, Gurgaon

ITA 4547/DEL/2009 | 2006-2007
Pronouncement Date: 11-05-2010 | Result: Dismissed

Appeal Details

RSA Number 454720114 RSA 2009
Assessee PAN AAUPY8764H
Bench Delhi
Appeal Number ITA 4547/DEL/2009
Duration Of Justice 5 month(s) 8 day(s)
Appellant ACIT, Gurgaon
Respondent Sh. Sat Narain Yadav, Gurgaon
Appeal Type Income Tax Appeal
Pronouncement Date 11-05-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted G
Tribunal Order Date 11-05-2010
Date Of Final Hearing 11-05-2010
Next Hearing Date 11-05-2010
Assessment Year 2006-2007
Appeal Filed On 03-12-2009
Judgment Text
I.T.A. NO. 4547 /DEL/2009 1/7 IN THE INCOME TAX APPELLATE TRIBUNAL NEW DELHI BENCH G BEFORE SHRI A.D. JAIN JUDICIAL MEMBER AND SHRI A K GARODIA ACCOUTANT MEMBER ITA NO. 4547 /DEL/2009 (ASSESSMENT YEAR 2006-07) ACIT GURGAON CIRCLE VS. SH. SAT NARAIN YADAV GURGAON H.NO.B-552A SUSHANT LOK PHASE I GURGAON (APPELLANTS) (RESPONDENTS) PAN / GIR NO. AAUPY8764H APPELLANT BY: SHRI NIKHIL CHAUDHARY SR. DR RESPONDENT BY: SHRI K. SAMPATH ADV. ORDER PER A. K. GARODIA AM: 1. THIS IS THE REVENUES APPEAL DIRECTED AGAINST TH E ORDER OF LD. CIT(A) PANCHKULA DATED 18.09.2009 FOR THE ASSESSMENT YEAR 2006-07. THE GROUNDS RAISED BY THE REVENUE READ AS UNDER: ON THE FACTS AND I THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN DELETIN G THE ADDITION OF RS.1 55 52 000/- MADE BY THE A.O. O N ACCOUNT OF DIFFERENCE IN THE VALUE OF THE PROPERTY ESPECIALLY WHEN THE ASSESSEE HAD FAILED TO EXPLAIN THE REASONS OF DIFFERENCE AND IS CONTRARY TO THE PROVISIONS OF SECTION 50C READ WITH SECTION 69B OF THE I. T. ACT 1961. I.T.A. NO. 4547 /DEL/2009 2/7 2. BRIEFLY STATED THE FACTS ARE THAT IT IS NOTED B Y THE A.O. IN PARA 3 OF THE ASSESSMENT ORDER THAT THE ASSESSEE HAS PURCHASED AN INDUSTRIAL PLOT IN GURGAON MEASURING 1 000 SQ. MTRS. WITH COVERED AREA OF 12 000 SQ. FT. AS MENTIONED IN THE SALE DEED FOR A TOTAL CONSIDERATIO N OF RS.60 LACS. IT IS FURTHER NOTED BY THE A.O. THAT T HE VALUE OF THIS PROPERTY WAS DETERMINED BY STAMP DUTY OFFIC ER OF GURGAON AT RS.215.52 LACS FOR THE PURPOSE OF PAYMENT OF STAMP DUTY AS AGAINST THE AMOUNT OF SALE CONSIDERATION OFRS.60 LACS SHOWN IN THE PURCHASE DE ED. THE A.O. ISSUED SHOW CAUSE NOTICE TO THE ASSESSEE O N THIS ASPECT AND THE REPLY WAS FILED BY THE ASSESSEE IN WHICH IT IS STATED BY THE ASSESSEE THAT THE PLOT PU RCHASED BY THE ASSESSEE IS ADJOINING TO POCKET T SECTOR 37 KHANDSA GURGAON. IT IS SUBMITTED THAT FOR POCKET T SECTOR 37 GURGAON THE CIRCLE RATES ARE LOWER AND H ENCE SECTION 50C IS NOT APPLICABLE IN THE PRESENT CASE. THEREAFTER THE A.O. HAS INVOKED THE PROVISIONS OF SECTION 50C AND ALSO SECTION 69 READ WITH SECTION 6 9B AND IT IS HELD BY HIM THAT THE VALUE OF INVESTMENT HAS BEEN UNDER REPORTED BY THE ASSESSEE TO THE EXTENT O F DIFFERENCE BETWEEN THE STAMP DUTY VALUATION AND THE DECLARED PURCHASE VALUE. HE MADE ADDITION OF THE DIFFERENCE AMOUNT OF RS.155.52 LACS. AGGRIEVED THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD . I.T.A. NO. 4547 /DEL/2009 3/7 CIT(A) WHO HAD DELETED THE ADDITION ON THE BASIS TH AT PROVISIONS OF SECTION 50C OF THE I. T. ACT ARE A LE GAL FICTION SOLELY FOR THE PURPOSE OF COMPUTATION OF CA PITAL GAIN AND HENCE THE SAME CANNOT BE INVOKED FOR DETERMINING THE INVESTMENT MADE BY THE ASSESSEE. H E HAS RELIED UPON THE JUDGEMENT OF HON'BLE SUPREME COURT RENDERED IN THE CASE OF CIT VS VADILAL LALUBH AI AS REPORTED IN 86 ITR 02 WHEREIN IT WAS HELD THAT T HERE IS NO RULE OF LAW TO THE EFFECT THAT THE VALUE DETE RMINED FOR THE PURPOSE OF STAMP DUTY IS ACTUAL CONSIDERATI ON OF PLOT BETWEEN THE PARTIES. HE HAS ALSO FOLLOWED THE JUDGEMENT OF HON'BLE HIGH COURT OF ALLAHABAD RENDERED IN THE CASE OF DINESH K MITTAL VS ITO REPORTED IN 193 ITR 77 (ALLD.). NOW THE REVENUE I S IN APPEAL. 3. IT IS SUBMITTED BY THE LD. D.R. THAT THIS PLOT W AS NOT PURCHASED BY THE ASSESSEE DIRECTLY FROM HSIDC AND I T WAS A CASE OF RESALE BY THE ORIGINAL BUYER AND HENC E THE RATES OF HSIDC ARE NOT APPLICABLE AND THE MARKET RA TE HAS TO BE CONSIDERED. IT IS ALSO SUBMITTED BY HIM THAT ONCE IN THE HANDS OF THE SELLER IT IS ACCEPTED THAT THE STAMP DUTY VALUATION IS THE SALE CONSIDERATION FOR THE PURPOSE OF CAPITAL GAIN IN THE HANDS OF THE SELLER IN THE HANDS OF THE BUYER ALSO ADVERSE INFERENCE HAS TO B E DRAWN THAT EQUAL AMOUNT WAS PAID BY THE BUYER FOR I.T.A. NO. 4547 /DEL/2009 4/7 PURCHASE OF THE PROPERTY IN QUESTION AND IF LESSER AMOUNT IS DECLARED AS PURCHASE CONSIDERATION ADDIT ION CAN BE MADE FOR THE DIFFERENCE AS HAS BEEN DONE BY THE A.O. IN THE PRESENT CASE. HE SUPPORTED THE ASSESSM ENT ORDER. AGAINST THIS THE LD. A.R. SUPPORTED THE ORD ER OF THE LD. CIT(A). RELIANCE WAS PLACED ON THE TRIBUNA L DECISION RENDERED IN THE CASE OF ITO VS SHRI SHARAD GILANI IN I.T.A. NO. 1577/DEL/2009. HE SUBMITTED T HE COPY OF THE TRIBUNAL DECISION AND POINTED OUT THAT UNDER SIMILAR FACTS IT WAS HELD BY THE TRIBUNAL THAT BY INVOKING THE PROVISIONS OF SECTION 50C ADDITION CA NNOT BE MADE IN THE HANDS OF THE BUYER ON THE BASIS OF ALLEGED UNEXPLAINED INVESTMENT IN THE PROPERTY. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS PERUSED THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE TRIBUN AL DECISION CITED BY THE LD. A.R. WE FIND THAT IN THE TRIBUNAL DECISION THE TRIBUNAL HAS FOLLOWED ANOTHE R TRIBUNAL DECISION DATED 27.02.09 RENDERED IN THE CA SE OF SMT. CHANDNI UCHAR IN I.T.A. NO. 1580/DEL/2008 AND PARA 7 OF EARLIER TRIBUNAL DECISION WAS REPRODUCED BY THE TRIBUNAL WHICH IS REPRODUCED BY US AS HEREINBEL OW FOR THE SAKE OF READY REFERENCE: 7 FROM A PLAIN READING OF THIS PROVISION IT EMERGES OUT THAT THE VALUE ADOPTED OR ASSESSED BY ANY AUTHORITY OF A STATE GOVERNMENT FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF LAND OR I.T.A. NO. 4547 /DEL/2009 5/7 BUILDING OR BOTH SHALL FOR THE PURPOSE OF SECTION 48 BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF TRANSFER. IT NOWHERE PROVIDES THAT THE VALUATION DONE BY THE STATE GOVERNMENT FOR THE PURPOSE OF STAMP DUTY ETC. WOULD IPSO FACTO TAKE PLACE THE ACTUAL CONSIDERATIO N AS BEING PASSED ON TO THE SELLER BY THE PURCHASER I N THE ABSENCE OF ANY OTHER EVIDENCE. THE ASSESSING OFFICER IS REQUIRED TO BRING POSITIVE EVIDENCE ON RECORD INDICATING THE FACT THAT ASSESSEE HAS PAID ANYTHING MORE THAN THE ONE DISCLOSED IN THE PURCHAS E DEED. THE DEPARTMENT HAS TAKEN AN ARGUMENT IN THE GROUNDS OF APPEAL THAT ASSESSING OFFICER SHOULD BE DIRECTED TO MAKE A REFERENCE TO THE VALUATION OFFIC ER U/S 142A OF THE ACT. IT ALSO RAISED A PLEAS THAT ASSESSING OFFICER HAS WRONGLY MADE A REFERENCE OF SECTION 50C WHILE MAKING THE ADDITION IN FACT THE ADDITION IS MADE U/S 69B ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE PROPERTY. WE HAVE TAKEN COGNIZANCE OF BOTH THESE ARGUMENTS. IT IS THE ASSESSING OFFICER WHO HIMSELF OUGHT TO HAVE COLLECTED THE EVIDENCE INDICATING THE FACT THAT ASSESSEE HAS PAID MORE MONEY THAN THE ONE DISCLOSED IN THE PURCHASE DEED. THE ITAT WHILE SITTING THE SECOND APPEAL IS NOT SUPPOSED TO GIVE DIRECTIONS ON THE APPEAL OF REVENUE THAT A REFERENCE TO THE VALUA TION OFFICER IS TO BE MADE IN ORDER TO SUBSTANTIATE THE ADDITION. THE STEPS WHICH ASSESSING OFFICER COULD HAVE TAKEN IF NOT TAKEN THEN THAT LACUNA CANNOT BE FILLED UP AT THE END OF THE ITAT. IN THE ABSENCE O F ANY EVIDENCE EXHIBITING THE FACT THAT THE ASSESSEE HAS MADE UNEXPLAINED INVESTMENT IN THE HOUSE PROPERTY NO ADDITION CAN BE JUSTIFIED. LEARNED 1 ST APPELLATE AUTHORITY HAS APPRECIATED THE FACTS AND CIRCUMSTANCES IN RIGHT PERSPECTIVE. WE DO NOT FIND ANY ERROR IN THE IMPUGNED ORDER ON THIS GROUND. I.T.A. NO. 4547 /DEL/2009 6/7 THUS THE GROUND OF APPEAL RAISED BY THE REVENUE IS REJECTED. 5. WE FIND THAT IN THE ABOVE CASE ALSO ADDITION WAS MADE BY THE A.O. ON THE BASIS OF VALUE INDICATED AND ASS ESSED BY THE GOVERNMENT FOR THE PURPOSE OF PAYMENT OF STA MP DUTY. IT IS HELD BY THE TRIBUNAL THAT THE A.O. IS REQUIRED TO BRING NECESSARY EVIDENCE ON RECORD INDICATING TH E FACT THAT THE ASSESSEE HAS PAID ANYTHING MORE THAN THE ONE DISCLOSED IN THE PURCHASE DEED. AN ARGUMENT WA S MADE BEFORE THE TRIBUNAL IN THAT CASE THAT THE A.O. HAS WRONGLY MADE REFERENCE TO SECTION 50C WHILE MAKING ADDITION AND IN FACT THE ADDITION WAS MADE U/S 69B ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE PROPERTY. THIS WAS ALSO THE ARGUMENT BEFORE THE TRIBUNAL IN T HAT CASE THAT THE MATTER MAY BE RESTORED BACK TO THE FI LE OF THE A.O. AND THE A.O. MAY BE DIRECTED TO MAKE REFERENCE TO THE VALUATION OFFICER U/S 142A OF THE I T ACT. AFTER TAKING COGNIZANCE OF THESE ARGUMENTS I T WAS HELD BY THE TRIBUNAL THAT THE A.O. OUGHT TO HAVE COLLECTED THE EVIDENCE INDICATING THE FACT THAT THE ASSESSEE HAS PAID MORE MONEY THAN ONE DISCLOSED IN THE PURCHASE DEED. IT WAS HELD BY THE TRIBUNAL THAT TH E STEPS WHICH THE A.O. COULD HAVE TAKEN BUT NOT TAKEN THEN THAT LACUNA CANNOT BE FILLED UP AT THE END OF ITAT. IT WAS FURTHER HELD THAT IN THE ABSENCE OF EVIDENCE EXHIBI TING I.T.A. NO. 4547 /DEL/2009 7/7 THE FACT THAT THE ASSESSEE HAS MADE UNEXPLAINED INVESTMENT IN THE HOUSE PROPERTY NO ADDITION CAN B E JUSTIFIED. IN THE PRESENT CASE ALSO NOTHING HAS B EEN BROUGHT OUT ON RECORD BY THE REVENUE EXHIBITING THA T THE ASSESSEE HAS MADE UNEXPLAINED INVESTMENT IN THE IMPUGNED PROPERTY BY MAKING EXTRA PAYMENT OVER AND ABOVE THE PAYMENT DISCLOSED IN THE PURCHASE DEED AN D HENCE BY RESPECTFULLY FOLLOWING THAT TRIBUNAL DECI SION WE HOLD THAT NO INTERFERENCE IS CALLED FOR IN THE O RDER OF LD. CIT(A) IN THE PRESENT CASE. WE THEREFORE CONF IRM THE ORDER OF LD. CIT(A). 6. IN THE RESULT THE APPEAL OF THE REVENUE IS DISM ISSED. 7. THIS DECISION WAS PRONOUNCED IN THE OPEN COURT O N 11 TH MAY 2010. SD./- SD./- (A. D. JAIN) (A K GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED:11 TH MAY 2010 SP. COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT TRUE COPY: BY ORDER 4. CIT(A) 5. DR DY. REGISTRAR ITAT NEW DELHI