Dr T.V. Nagarathnamma, Bangalore v. ITO, Bangalore

ITA 47/BANG/2010 | 1999-2000
Pronouncement Date: 07-01-2011 | Result: Dismissed

Appeal Details

RSA Number 4721114 RSA 2010
Assessee PAN AAVPK0631K
Bench Bangalore
Appeal Number ITA 47/BANG/2010
Duration Of Justice 11 month(s) 19 day(s)
Appellant Dr T.V. Nagarathnamma, Bangalore
Respondent ITO, Bangalore
Appeal Type Income Tax Appeal
Pronouncement Date 07-01-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 07-01-2011
Date Of Final Hearing 03-01-2011
Next Hearing Date 03-01-2011
Assessment Year 1999-2000
Appeal Filed On 19-01-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH A BEFORE DR. O.K. NARAYANAN VICE PRESIDENT AND SMT. P. MADHAVI DEVI JUDICIAL MEMBER ITA NOS.47 & 48(BANG)/2010 (ASSESSMENT YEAR: 1999-00 & 2000-01) DR. T.V.NAGARATHNAMMA PROP. MARUTI NURSING & MATERNITY HOME # 5 IYANNA SETTY LAYOUT MYSORE ROAD BANGALORE-26. PAN : AAVPK 0631K APPELLANT VS. INCOME-TAX OFFICER WARD 4(4) BANGALORE. RESPONDENT APPELLANT BY: SHRI V.SRINIVASAN. RESPONDENT BY : SMT. JACINTA ZIMIK VASHAI. O R D E R PER SMT. P. MADHAVI DEVI JM : THESE ARE APPEALS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(APPEALS)-II BANGALORE DATED 26-10-2009 FOR THE ASSESSMENT YEARS 1999-00 AND 2000-01. 2. THE ASSESSEE HAS RAISED THE FOLLOWING MATERIAL GROUNDS OF APPEAL IN ITA NO.48(BANG)/2010 FOR ASSESSMENT YEAR 2000-01: ITA NOS.47 & 48(BANG)/2010 PAGE 2 OF 9 2. THE LEARNED CIT(A) IS NOT JUSTIFIED IN UPHOLDING THE ADDITION OF RS.1 70 000/- CONSIDERED AS THE ALLEGED PROFIT ON THE SALE OF SITES AT KENGERI WHICH WAS ACCEPTED OUT OF SHEAR DESPERATION BEFORE THE AO TO GIVE EFFECT TO THE ORDER OF THE HONBLE ITAT ALTHOUGH THE SAME IS NOT WARRANTED BY THE UNDISPUTED FACTS NOTED IN THE ASSESSMENT ORDER UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANTS CASE. THE ADDITION IS PURELY ON SUSPICION AND SURMISE AND ON ASSUMPTIONS AND THEREFORE DESERVES TO BE DELETED. 3. WITHOUT PREJUDICE TO THE RIGHT TO SEEK WAIVER WITH THE HONBLE CCIT/DG THE APPELLANT DENIES HERSELF LIABLE TO BE CHARGED TO INTEREST U/S 234- A 234-B AND 234-C OF THE ACT WHICH UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANTS CASE DESERVES TO BE CANCELLED. 2.1 BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S A DOCTOR. SHE FILED HER RETURN OF INCOME FOR THE ASS ESSMENT YEAR UNDER CONSIDERATION WHICH WAS COMPLETED U/S 143(3) OF THE INCOME-TAX ACT 1961 [HEREINAFTER REFERRED TO AS 'T HE ACT'] COMPUTING THE TOTAL INCOME AT RS.50 31 47 61/-. TH E ASSESSEE FILED AN APPEAL BEFORE THE CIT(APPEALS) AGAINST THI S ORDER WHICH WAS DISMISSED AND THE ASSESSEE PREFERRED SECOND APP EAL BEFORE THE ITAT. THE ITAT BY ITS ORDER DATED 19-8-2005 IN ITA NO.836/BANG/2004 SET ASIDE THE ADDITION OF RS.13 LA KHS ON ACCOUNT OF PROFIT ON PURCHASE AND SALE OF LAND AND SITES WITH A DIRECTION TO THE AO TO ARRIVE AT OR ESTIMATE THE PR OFIT WITH SOME BASIS BY MAKING LOCAL ENQUIRY AND DULY CONFRONTING THE SAME TO THE ASSESSEE. IN THE SET ASIDE PROCEEDINGS THE AO CALLED FOR VARIOUS DETAILS TO FORM THE BASIS FOR THE QUANTUM T HAT COULD BE ASSESSED TO TAX. HOWEVER AS REGARDS THE PROFIT ON SALE OF SITES ITA NOS.47 & 48(BANG)/2010 PAGE 3 OF 9 THE ASSESSEE DID NOT FURNISH DETAILS OF NUMBER OF S ITES FORMED DATES AND NUMBER OF SITES SOLD SALE CONSIDERATION RECEIVED ETC. AS NO REGISTRATION OF SALE DEEDS WERE PERMITTED DUR ING THOSE DAYS PEOPLE WERE TRANSACTING IN LANDS BY WAY OF GE NERAL POWER OF ATTORNEY (GPA) WHICH WERE NOT EVEN REGISTERED T HE ASSESSEE PROVIDED ONLY ONE GPA AT THE TIME OF SURVEY WHICH R EVEALED SALE OF ONE SITE MEASURING 2465 SQ.FT. BY THE ASSES SEE IN FAVOUR OF SMT.GAYATRI DEVI MADE ON 27-9-1997 FOR A CONSIDE RATION OF RS.45 000/-. IT WAS STATED BY THE ASSESSEE THAT NE ITHER THE ASSESSEE NOR HER REPRESENTATIVE KNOWS THE LOCATION OF LAND IN QUESTION AND NO OTHER INSTANCE OF SALE PERTAINING T O THAT AREA WAS REGISTERED IN THE OFFICE OF THE SUB REGISTRAR I N OR AROUND THE PERIOD UNDER CONSIDERATION. IN THE ABSENCE OF ANY OTHER USEFUL INFORMATION THE AO DECIDED TO ARRIVE AT THE PROFIT DEEMED TO HAVE BEEN DERIVED BY THE ASSESSEE ON THE ALLEGED SALE OF SITES. HE ACCORDINGLY HAS TAKEN THE SELLIN G RATE ON THE BASIS OF THE SALE MADE BY THE ASSESSEE TO SMT. GAYA TRI DEVI AS THE SALE CONSIDERATION AND HE DIVIDED THE EXTENT OF LAND INTO VARIOUS PLOTS AND ARRIVED AT THE SALEABLE AREA AND ALSO OBSERVED THAT SINCE 2465 SQ.FT. WAS ALREADY SOLD IN 1997-98 THE REMAINING SALEABLE AREA IS ONLY 28 898 SQ.FT. AND T HE PRICE FOR THIS AREA AT RS.18.25 PER SQ.FT. WILL BE RS.5 27 39 0/-. HE ALSO OBSERVED THAT THE REPRESENTATIVE HAS AGREED FOR ASS UMING THAT THE REMAINING SALEABLE AREA OF 28 898/- IS SOLD IN THE FINANCIAL YEAR 1999-00 I.E. TWO YEARS LATER AND THE HIKE IN T HE VALUE OF SITE IN THAT AREA IS ASSUMED TO BE 15% PER YEAR AND THE ITA NOS.47 & 48(BANG)/2010 PAGE 4 OF 9 REPRESENTATIVE HAS AGREED FOR THE SAME. HE THEREF ORE INCREASED THE SALE CONSIDERATION BY 15% FOR EVERY Y EAR TO ARRIVE AT THE SALE CONSIDERATION IN THE FINANCIAL YEAR 199 9-00 WHICH WORKS OUT TO RS.6 97 472/- WHICH WAS ROUNDED OFF TO RS.7 LAKHS. THEREAFTER HE ARRIVED AT THE COST OF ACQUI SITION OF THE SAID AREA AT RS.5 30 000/- AND THEREAFTER COMPUTED THE NET PROFIT AT RS.1 70 000/-. THEREAFTER THE ASSESSEES REPRESENTATIVE PLEADED THAT THIS INCOME MAY BE TREA TED AS INCOME FROM LONG TERM CAPITAL GAINS AND ASSESSED TO TAX ACCORDINGLY AS THE TAX LIABILITY WILL BE 20% INSTEA D OF 30%. BUT THE AO HELD IT TO BE AN ADVENTURE IN THE NATURE OF TRADE AND TREATED IT AS INCOME FROM BUSINESS AND TAXED IT A CCORDINGLY. AGGRIEVED BY THE SAME THE ASSESSEE PREFERRED AN AP PEAL BEFORE THE CIT(A) WHO CONFIRMED THE ORDER OF THE AO AND THE ASSESSEE IS IN SECOND APPEAL BEFORE US. 2.2 SHRI V.SRINIVASAN THE LEARNED COUNSEL FOR THE ASSESSEE WHILE REITERATING THE SUBMISSIONS MADE BE FORE THE AUTHORITIES BELOW SUBMITTED THAT THE ASSESSEE HAS R IGHTLY COMPUTED THE INCOME FROM SALE OF SITES AND THE AO H AS ERRONEOUSLY ARRIVED AT THE NET PROFIT AT RS.1 70 00 0/- AND THE ASSESSEE HAD AGREED TO THE SAME OUT OF SHEER DESPER ATION AND TO BUY PEACE BUT THE ADDITION IS NOT WARRANTED. SMT.JACINTA ZIMIK VASHAI THE LEARNED DR HOWEVER SUPPORTED THE ORDERS OF THE AO AND THE CIT(A). 2.3 HAVING HEARD BOTH THE PARTIES AND HAVING CONSID ERED THE RIVAL CONTENTIONS AND THE MATERIAL ON RECORD W E FIND THAT ITA NOS.47 & 48(BANG)/2010 PAGE 5 OF 9 THE TRIBUNAL HAD DIRECTED THE AO TO RE-COMPUTE THE PROFIT ON SALE OF SITES WITH SOME BASIS BY MAKING LOCAL ENQUI RY AND DULY CONFRONTING THE SAME TO THE ASSESSEE. THE AO HAS A CCORDINGLY CALLED FOR DETAILS AND THE AO HAS ALSO MADE ENQUIRI ES WITH THE SUB REGISTRARS OFFICE AND ONLY AFTER HAVING CONSID ERED THE ASSESSEES GPA EXECUTED BY THE ASSESSEE IN FAVOUR O F SMT.GAYATRI DEVI THE AO HAS ARRIVED AT THE SALE CO NSIDERATION AND AFTER TAKING INTO CONSIDERATION THE RATE OF LAN D IN THE AREA IN 1993-94 BY MAKING LOCAL ENQUIRIES HE ARRIVED AT THE COST OF ACQUISITION AND THUS ARRIVED AT THE NET PROFIT OF R S.1 70 000/-. THE ASSESSEE HAS MERELY RELIED UPON THE SUBMISSIONS MADE BEFORE THE AO BUT HAS NOT BROUGHT ON RECORD ANY EVI DENCE TO REBUT THE FINDINGS OF THE AO. IN VIEW OF THE SAME WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDERS OF THE AO OR THE CIT(A). THE GROUND NO.2 IS REJECTED.. 2.4 GROUND NO.3 BEING CONSEQUENTIAL TO GROUND NO.2 IS ALSO REJECTED. 2.5 IN THE RESULT THE ASSESSEES APPEAL IS DISMISS ED. 3. THE ASSESSEE HAS RAISED THE FOLLOWING MATERIAL G ROUNDS OF APPEAL IN ITA NO.47(BANG)/2010 FOR ASSESSMENT YEAR 1999-00: 2. THE ORDER OF REASSESSMENT IS BAD IN LAW AND VOID-AB-INITIO FOR WANT OF REQUISITE JURISDICTION ESPECIALLY THE MANDATORY REQUIREMENT TO ASSUME JURISDICTION U/S 148 OF THE ACT DID NOT EXIST AND HAVE NOT BEEN COMPLIED WITH AND CONSEQUENTLY THE REASSESSMENT REQUIRES TO BE CANCELLED. ITA NOS.47 & 48(BANG)/2010 PAGE 6 OF 9 3. WITHOUT PREJUDICE TO THE ABOVE THE LEARNED CIT(A) IS NOT JUSTIFIED IN SUSTAINING A SUM OF RS.5 00 000/- FROM OUT OF THE ADDITION OF RS.8 90 000/- MADE BY THE LEARNED AO BEING THE GIFTS RECEIVED BY THE APPELLANT FROM HER RELATIVES THAT TOO U/S 69 OF THE ACT WHICH WAS ACCEPTED OUT OF SHEER DESPERATION AND THERE WAS ABSOLUTELY NO MATERIAL TO HOLD THAT THE GIFTS ARE NOT GENUINE. THE ADDITION MADE IS PURELY ON SUSPICION AND SURMISE ASSUMPTIONS AND PRESUMPTIONS AND CONSEQUENTLY THE SAME IS LIABLE TO BE DELETED. 4. WITHOUT PREJUDICE TO THE RIGHT TO SEEK WAIVER WITH THE HONBLE CCIT/DG THE APPELLANT DENIES HERSELF LIABLE TO BE CHARGED TO INTEREST U/S 234- A 234-B AND 234-C OF THE ACT WHICH UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANTS CASE DESERVES TO BE CANCELLED. 3.1 AS REGARDS GROUND NO.2 LEARNED COUNSEL FOR THE ASSESSEE DID NOT ADVANCE ANY ARGUMENT IN SUPPORT OF THE SAME AND THEREFORE THE SAME IS NOT ADJUDICATED AND REJ ECTED AS SUCH. 3.2 AS REGARDS GROUND NO.3 BRIEF FACTS OF THE CAS E ARE THAT ASSESSEE FILED HER RETURN OF INCOME FOR THE RE LEVANT ASSESSMENT YEAR 31-3-2000 RETURNING AN INCOME OF RS.2 11 736/-. THE RETURN WAS PROCESSED U/S 143(1) OF THE ACT. THEREAFTER ON 5-1-2000 A SURVEY U/S 133A OF THE A CT WAS CONDUCTED ON THE PREMISES OF THE ASSESSEE AND DURIN G THE COURSE OF SURVEY CERTAIN DISCREPANCIES WERE NOTICE D IN THE SOURCES FOR INVESTMENT MADE IN THE NURSING HOME BUI LDING PARTICULARLY IN THE CASH GIFTS RECEIVED BY THE ASSE SSEE. THE SAID CASH GIFTS HAD BEEN DISCLOSED BY THE ASSESSEE AS BE ING RECEIVED FROM HER FATHER BROTHER AND OTHER RELATIVES AMOUNT ING TO ITA NOS.47 & 48(BANG)/2010 PAGE 7 OF 9 RS.17 65 000/-. FURTHER THE ASSESSEE IN HER REPLY TO QUESTION NO.16 OF HER SWORN STATEMENT RECORDED ON 11-1-2001 STATED THAT SOME OF THE GIFTS ARE DIFFICULT TO PROVE AND H ENCE SHE VOLUNTARILY CAME FORWARD TO DECLARE AN AMOUNT OF RS .5 LAKHS OUT OF TOTAL CASH GIFTS RECEIVED OF RS.7 65 000/-. IN VIEW OF THIS THE AO CAME TO CONCLUSION THAT THERE WAS ESCAPEMENT OF INCOME OF RS.8 90 000/- TO THE INCOME OF THE ASSESS EE. 3.3 AGGRIEVED THE ASSESSEE PREFERRED AN APPEAL BEF ORE THE CIT(A) WHO CONFIRMED THE ADDITION OF RS.5 LAKHS AGREED TO BY THE ASSESSEE AND DELETED THE ADDITION OF RS.3 90 000/- BY HOLDING THAT NO EVIDENCE WAS BROUGHT ON RECORD BY T HE AO TO SUBSTANTIATE THIS ADDITION. AGGRIEVED BY THE ABOVE CONFIRMATION BY THE CIT(A) THE ASSESSEE IS IN SECOND APPEAL BEF ORE US. 3.4 LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW WHILE THE LEARNED DEPARTMENTAL REPRESENTATIVE SUPPORTED THE O RDERS OF THE AUTHORITIES BELOW. 3.5 HAVING HEARD BOTH THE PARTIES AND HAVING GONE THROUGH THE MATERIAL ON RECORD WE FIND THAT THE CI T(A) HAS CONFIRMED THE ADDITION OF RS.5 LAKHS ON THE GROUND THAT THIS ADDITION HAS ALREADY BEEN CONFIRMED BY THE ITAT. W E HAVE GONE THROUGH THE ORDER OF THE ITAT DATED 19-8-2005. THE TRIBUNAL HAS AFTER CONSIDERING THE ASSESSEES SURR ENDER OF RS.5 LAKHS AS CONSIDERATION HELD THAT THESE GIFTS HAVE BEEN RECEIVED IN THE FINANCIAL YEAR 1998-99 AND THEREFORE BOGUS GIFTS CANNOT BE TAXED IN THE ASSESSMENT YEAR 2000-01. IT THERE FORE ITA NOS.47 & 48(BANG)/2010 PAGE 8 OF 9 DIRECTED THE AO TO RE-CONSIDER THE ADDITION MADE ON ACCOUNT OF LOANS FROM AGRICULTURISTS. THUS WE FIND THAT THE DIRECTION OF THE ITAT IS ONLY FOR ASSESSMENT YEAR 2000-01 AND THERE IS NO SUCH ORDER OF ITAT FOR THE ASSESSMENT YEAR 1999-00 AND T HEREFORE THE FINDING OF THE CIT(A) THAT THIS ADDITION HAS BE EN CONFIRMED BY ITAT IS NOT CORRECT. HOWEVER AFTER GOING THROU GH MERITS WE FIND THAT EVEN THE ASSESSEE HAS NOT BEEN ABLE TO BR ING ANY MATERIAL ON RECORD BEFORE US TO PROVE THAT THESE GI FTS WERE REALLY RECEIVED OR THAT HER DECLARATION WAS UNDER D URESS OR UNDER DESPERATION. IN VIEW OF THE SAME WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDER OF THE CIT(A) CO NFIRMING THE ADDITION OF RS.5 LAKHS. GROUND NO.3 IS ALSO REJECT ED. 3.6 GROUND NO.4 IS CONSEQUENTIAL TO GROUND NO.3. T HE SAME IS ALSO REJECTED. 3.7 IN THE RESULT THE ASSESSEES APPEAL IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH JANUARY 2011. SD/- SD/- (DR. O.K. NARAYANAN) VICE PRESIDENT (SMT. P.MADHAVI DEVI) JUDICIAL MEMBER PLACE : BANGALORE DATED: 7 TH JANUARY 2011. EKS ITA NOS.47 & 48(BANG)/2010 PAGE 9 OF 9 COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) CONCERNED 4. CIT 5. DR ITAT BANGALORE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR ITAT BANGALORE