ITO, Bangalore v. Smt. Archana Anandkumar, Bangalore

ITA 566/BANG/2012 | 2006-2007
Pronouncement Date: 25-04-2014 | Result: Allowed

Appeal Details

RSA Number 56621114 RSA 2012
Assessee PAN ABKPA1815G
Bench Bangalore
Appeal Number ITA 566/BANG/2012
Duration Of Justice 1 year(s) 11 month(s) 25 day(s)
Appellant ITO, Bangalore
Respondent Smt. Archana Anandkumar, Bangalore
Appeal Type Income Tax Appeal
Pronouncement Date 25-04-2014
Appeal Filed By Department
Order Result Allowed
Bench Allotted C
Tribunal Order Date 25-04-2014
Date Of Final Hearing 15-04-2014
Next Hearing Date 15-04-2014
Assessment Year 2006-2007
Appeal Filed On 30-04-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN JUDICIAL MEMBER AND SHRI JASON P. BOAZ ACCOUNTANT MEMBER ITA NOS.566 & 567/BANG/2012 ASSESSMENT YEARS : 2006-07 & 2007-08 THE INCOME TAX OFFICER WARD 10(1) BANGALORE. VS. SMT. ARCHANA ANANDKUMAR NO.12 BANASHANKARI COMPLEX NHCS LAYOUT BASVESHWARANAGAR BANGALORE 560 079. PAN : ABKPA 1815G APPELLANT RESPONDENT APPELLANT BY : SHRI M.K. BIJU JT. CIT(DR) RESPONDENT BY : NONE DATE OF HEARING : 15.04.2014 DATE OF PRONOUNCEMENT : 25.04.2014 O R D E R PER N.V. VASUDEVAN JUDICIAL MEMBER BOTH THESE APPEALS ARE BY THE REVENUE AGAINST THE TWO ORDERS BOTH DATED 22.02.2012 OF CIT(APPEALS)-V BANGALORE RELAT ING TO ASSESSMENT YEARS 2006-07 & 2007-08. ITA NOS.566 & 567/BANG/2012 PAGE 2 OF 12 2. NOTICE OF HEARING FOR 15.4.2007 WAS DULY SERVED ON THE ASSESSEE. THE ASSESSEE HAS HOWEVER NEITHER APPEARED IN PERS ON OR THROUGH AR. CONSIDERING THE PAST HISTORY OF ADJOURNMENTS IN THI S CASE WE ARE OF THE VIEW THAT ENOUGH OPPORTUNITIES WERE GIVEN TO THE AS SESSEE WHICH HAVE NOT BEEN AVAILED BY THE ASSESSEE. WE THEREFORE PROCEED TO DECIDE THE APPEALS AFTER HEARING THE SUBMISSIONS OF THE LD. D R. 3. THE GROUNDS OF APPEAL RAISED BY THE REVENUE ARE COMMON FOR BOTH THE ASSESSMENT YEARS AND THEY READ AS FOLLOWS:- 1. THE ORDER OF THE CIT (A) IS OPPOSED TO FACTS O F THE CASE. 2. THE CIT (A) HAS ERRED IN TAKING THE SALE CONSID ERATION AS PER SALE DEED AS THE AMOUNT INCORPORATED BY THE SU B-REGISTRAR WHICH IS LOWER THAN THE SALE AGREEMENT. 3. THE CIT (A) HAS ERRED TO NOTICE THAT THE CONSID ERATION PAID BY THE ASSESSEE SMT ARCHANA ANANDA KUMAR IN INSTAL LMENTS IS EQUAL TO THE AMOUNT MENTIONED IN THE SALE AGREEMENT . 4. THE CIT (A) HAS ERRED TO NOTICE THAT THE ASSESS EE RECEIVED THE CONSIDERATION MORE THAN THE SALE CONSIDERATION FIXED BY THE SUB-REGISTRAR. 5. THE CIT (A) HAS ERRED TO NOTICE THAT THE ORIGIN AL SALE AGREEMENT SIGNED IN THE STAMP PAPER BY BOTH PURCHAS ER AND SELLER HAVE BEEN IMPOUNDED AT THE TIME OF SURVEY IS THE EV IDENCE TO PROVE THAT THE VALUE AS PER THE SALE AGREEMENT IS T RUE AS AGAINST THE VALUE OF SALE DEED. 6. FOR THESE AND SUCH OTHER GROUNDS THAT MAY BE UR GED AT THE TIME OF HEARING IT IS PRAYED THAT THE ORDER OF CIT (A) IS SET ASIDE AND THAT THE ORDER OF THE AO BE RESTORED. ITA NOS.566 & 567/BANG/2012 PAGE 3 OF 12 4. THE ASSESSEE IS AN INDIVIDUAL. SHE IS ENGAGED IN THE BUSINESS OF BUYING AND SELLING LANDS FLATS ETC. FOR THE AY 20 06-07 THE ASSESSEE FILED A RETURN OF INCOME ON 17.1.2007 DECLARING TOTAL INC OME OF RS.3 31 704. A SURVEY U/S. 133A OF THE ACT WAS CONDUCTED IN THE CA SE OF THE ASSESSEE ON 18.3.2008. CONSEQUENT TO THE SURVEY A NOTICE U/S . 148 WAS ISSUED ON 27.8.2009. IN THE COURSE OF SURVEY AGREEMENTS FOR SALE OF CERTAIN PROPERTIES WERE FOUND. THE SALE CONSIDERATION MENT IONED IN THOSE AGREEMENTS FOR SALE WERE MUCH HIGHER THAN THE SALE CONSIDERATION THAT WAS REFLECTED IN THE REGISTERED SALE DEED IN AND BY WHI CH THE PROPERTIES WERE CONVEYED BY THE ASSESSEE TO THE THIRD PARTIES. 5. AS FAR AS AY 2006-07 IS CONCERNED THE LONG TERM CAPITAL GAIN AND SHORT TERM CAPITAL GAIN ON SALE OF PROPERTIES WAS D ETERMINED BY THE AO AS FOLLOWS:- 1. SRINIDHI RESIDENCY : A. SALE OF 8 FLATS :- TOTAL SALE CONSIDERATION RS.1 28 00 000 PROPORTIONATE COST OF ACQUISITION AND CONSTRUCTION 82 00 000 -------------------- LONG TERM CAPITAL GAIN 46 00 000 -------------------- B. PROPERTY NO.-SURVEY NO.52/1 53/1 SALE CONSIDERATION RS.30 75 000 INDEX COST 4 99 497 -------------------- LONG TERM CAPITAL GAIN 25 75 503 -------------------- ITA NOS.566 & 567/BANG/2012 PAGE 4 OF 12 2. BANASHANKARI COMPLEX: SALE CONSIDERATION A. SRI AJITKUMAR AS PER SALE AGREEMENT DT: 30/11/06 RS.40 00 000 B. LAKSHMINARAYANA AS PER SALE AGREEMENT DT: 4/12/05 75 00 000 C. SRI PATNAK SALE AGREEMENT DT: 15/6/06 27 00 000 -------------------- TOTAL SALE CONSIDERATION 1 42 00 000 LESS: COST OF PURCHASE 84 00 000 -------------------- SHORT TERM CAPITAL GAINS 58 00 000 -------------------- 3. SALE CONSIDERATION OF 3 FLATS AS PER SALE DEED RS.75 00 000 LESS: PROPORTIONATE COST 44 00 000 -------------------- SHORT TERM CAPITAL GAINS 31 00 000 -------------------- GRAND TOTAL:- (I) LONG TERM CAPITAL GAINS RS.46 00 000 25 75 503 (II) SHORT TERM CAPITAL GAINS 89 00 000 -------------------- TOTAL LONG TERM & SHORT TERM CAPITAL GAIN RS.1 35 00 000 -------------------- 6. IT CAN BE SEEN FROM THE COMPUTATION OF SHORT TER M CAPITAL GAIN FOR THE AY 2006-07 THAT IN RESPECT OF SALE OF THREE FLATS I N BANASHANKARI COMPLEX THE FULL VALUE RECEIVED ON CONSIDERATION FOR TRANSF ER FOR THE PURPOSE OF COMPUTING SHORT TERM CAPITAL GAIN HAS BEEN ARRIVED AT BY THE AO ON THE BASIS OF AGREEMENT FOR SALE WHICH WERE FOUND AT TH E TIME OF SURVEY. BASED ON THESE THREE AGREEMENTS THE AO ARRIVED AT FULL V ALUE OF CONSIDERATION RECEIVED ON TRANSFER AT A SUM OF RS.1 42 00 000 AND DETERMINED THE SHORT ITA NOS.566 & 567/BANG/2012 PAGE 5 OF 12 CAPITAL GAINS OF RS.58 LAKHS AFTER DEDUCTING COST OF ACQUISITION OF RS.84 LAKHS. 7. IN RESPECT OF DETERMINATION OF LONG TERM CAPITAL GAINS AND SHORT TERM CAPITAL GAINS FOR THE OTHER PROPERTIES THE AO HAD ADOPTED ONLY THE SALE CONSIDERATION AS REFLECTED IN THE REGISTERED SALE D EED. THIS IS QUITE EVIDENT FROM THE LETTER DATED 23.12.2009 ISSUED BY THE AO T O THE ASSESSEE GIVING DETAILS OF CALCULATION OF LONG TERM AND SHORT TERM CAPITAL GAINS. 8. THE CIT(APPEALS) ON APPEAL BY THE ASSESSEE ACC EPTED THE CONTENTION OF THE ASSESSEE THAT THERE WAS NO MATERI AL BROUGHT ON RECORD TO SHOW THAT SALE VALUE SHOWN IN THE AGREEMENT WAS IN FACT RECEIVED BY THE ASSESSEE AND NOT THE MONEY THAT WAS RECORDED IN THE REGISTERED SALE DEED. IN THIS REGARD THE CIT(A) HELD AS FOLLOWS:- 8. INCOME FROM CAPITAL GAINS THE A.O HAD WORKED OUT INCOME FROM LONG TERM CAPI TAL GAINS AT RS. 71 75 503/- AND SHORT TERM CAPITAL GAI NS AT RS. 89 LAKHS IN RESPECT OF FLATS/HOUSES SOLD BY THE APPELL ANT IN THREE DIFFERENT LOCALITIES DURING THE YEAR. BEFORE ME THE A.R OF THE APPELLANT ARGUED THAT THE A.O HAD TAKEN ONLY SALE A GREEMENT VALUES FOR DETERMINING TILE CAPITAL GAINS EVEN THOU GH THE SALE DEEDS IN RESPECT OF EACH PROPERTY ARE FILED BEFORE THE A.O. ON EXAMINATION I FOUND THAT THE CONTENTION OF THE A.R OF THE APPELLANT IS CORRECT. DURING THE COURSE OF SURVEY A NUMBER OF SALE AGREEMENTS AND SALE DEEDS WERE IMPOUNDED AND THE A. O ADOPTED THE VALUES ONLY AS PER SALE AGREEMENTS. HOWEVER TH E A.O DID NOT BROUGHT OUT ANY FURTHER EVIDENCE TO PROVE THAT THE VALUE AS PER SALE AGREEMENT IS TRUE AS AGAINST THE VALUE AS PER SALE DEED. THEREFORE THE A.O IS DIRECTED TO RECOMPUTE THE CAP ITAL GAINS AS UNDER. ITA NOS.566 & 567/BANG/2012 PAGE 6 OF 12 8.1 LONG TERM CAPITAL GAINS A. SRINIDHI RESIDENCY :- * SALE CONSIDERATION OF 8 FLATS SOLD AS PER SALE DEEDS RS. 88 38 000/- LESS PROPORTIONATE COST (AS MENTIONED IN PARA 7 ABOVE THE TOTAL COST IS TAKEN AT RS. 1 36 66 000/- AS THERE ARE 12 FLATS IN THIS COMPLEX THE COST OF EACH FLAT IS TAKEN AT RS. 11 38 833/- AND THE COST OF 8 FLATS IS TAKEN AT RS. 91 10 666/-) RS. 91 1 0 666/- ------------------- * LOSS FROM SALE OF PROPERTY RS. 2 72 666/- B. 52/1 & 53/1 SIVANAHALLI :- * SALE CONSIDERATION AS PER SALE DEEDS RS. 30 75 000/- LESS INDEXED COST OF ACQUISITION (THE PROPERTY WAS PURCHASED FOR RS. 2 LAKHS IN 1991. THE INDEX WAS 199 FOR 1991 AND 497 FOR 2006. THE INDEXED COST IS RS. 2 LAKHS X 497 / 199) RS. 4 99 497/- ------------------- CAPITAL GAINS RS. 25 75 503/- * LESS LOSS AS PER (A) ABOVE RS. 2 72 666/- ------------------- * NET LONG TERM CAPITAL GAINS RS. 23 02 837/- ------------------- 8.2 SHORT TERM CAPITAL GAINS : C. BANASHANKARI PROPERTY * SALE CONSIDERATION OF 2 FLATS AS PER SALE DEEDS RS. 39 00 000/- * LESS COST OF CONSTRUCTION (COST OF EACH FLAT IS TAKEN AT RS.10 75 000/- AS PER THE AVAILABLE DETAILS) RS. 21 50 000/- ------------------ * SHORT TERM CAPITAL GAINS RS. 17 50 000/- ------------------ ITA NOS.566 & 567/BANG/2012 PAGE 7 OF 12 9. AS FAR AS AY 2007-08 IS CONCERNED THE FACTS ARE IDENTICAL AND THE COMPUTATION OF LONG TERM CAPITAL GAIN MADE BY THE A O WAS AS FOLLOWS:- A. SRINIDHI RESIDENCY :- SALE CONSIDERATION RS. 1 69 00 000 LESS: INDEX COST OF ACQUISITION 27 85 250X497 = RS.34 09 530 406 INDEXED COST OF CONSTRUCTION 75 00 000X407 = RS.61 41 851 RS. 95 51 381 497 ------------------------- RS. 73 48 619 ------------------------- B. SALE OF 3 FLATS SALE CONSIDERATION RS.40 67 000 COST OF ACQUISITION & CONSTRUCTION RS.27 00 000 LONG TERM CAPITAL GAINS RS. 13 67 000 C. BANASHANKARI COMPLEX :- SALE OF 3 FLATS SALE CONSIDERATION RS.67 00 000 LESS: PROPORTIONATE COST RS.40 00 000 SHORT TERM CAPITAL GAINS RS. 27 00 000 D. PROPERTY AT SHIVANAHALLI :- SALE CONSIDERATION RS.33 50 000 LESS: COST OF PURCHASE RS.15 00 000 SHORT TERM CAPITAL GAINS RS. 18 50 000 ITA NOS.566 & 567/BANG/2012 PAGE 8 OF 12 10. ON APPEAL BY THE ASSESSEE THE CIT(A) ACCEPTED THE CONTENTION OF THE ASSESSEE THAT THERE WAS NO MATERIAL BROUGHT ON RECORD THAT THE VALUE REFLECTED IN THE AGREEMENT FOR SALE WAS IN FACT REC EIVED BY THE ASSESSEE AND NOT THE CONSIDERATION AS REFLECTED IN THE REGIS TERED SALE DEED. THE FOLLOWING ARE THE OBSERVATIONS OF THE CIT(A):- 7. INCOME FROM CAPITAL GAINS THE A.O HAD WORKED OUT INCOME FROM LONG TERM CAPITA L GAINS AT RS. 87 15 619/- AND SHORT TERM CAPITAL GAI NS AT RS. 45 50 000/- IN RESPECT OF FLATS/HOUSES SOLD BY THE APPELLANT DURING THE YEAR. BEFORE ME THE A.R OF THE APPELLANT ARGUED THAT THE A.O HAD TAKEN ONLY SALE AGREEMENT VALUES FOR DETERMININ G THE CAPITAL GAINS EVEN THOUGH THE SALE DEEDS IN RESPECT OF EACH PROPERTY ARE FILED BEFORE THE A.O. ON EXAMINATION I FOUND THAT T HE CONTENTION OF THE A.R OF THE APPELLANT IS CORRECT. DURING THE COURSE OF SURVEY A NUMBER OF SALE AGREEMENTS AND SALE DEEDS WERE IMP OUNDED AND THE A.O ADOPTED THE VALUES ONLY AS PET SALE AGREEME NTS. HOWEVER THE A.O DID NOT BROUGHT OUT ANY FURTHER EV IDENCE TO PROVE THAT THE VALUE AS PER SALE AGREEMENT IS TRUE AS AGAINST THE VALUE AS PER SALE DEED. THEREFORE THE A.O IS DIREC TED TO RECOMPUTE THE CAPITAL GAINS AS UNDER. 7.1. LONG TERM CAPITAL GAINS * SALE CONSIDERATION OF 3 FLATS SOLD IN SRINIDHI RESIDENCY AS PER SALE DEEDS RS. 31 3 3 500/- * LESS PROPORTIONATE COST (THE TOTAL COST IS TAKEN AT RS. 1 36 66 000/- AS PER THE REPORT OF THE VALUATION OFFICER OF THE INCOME TAX DEPARTMENT. THERE ARE 12 FLATS IN THIS COMPLEX THE COST OF EACH FLAT IS TAKEN AT RS. 11 38 833/- AND THE COST OF 3 FLATS IS TAKEN AT RS. 34 16 500/-) RS. 34 16 500/- * LOSS FROM SALE OF PROPERTY RS. 2 83 000/- ITA NOS.566 & 567/BANG/2012 PAGE 9 OF 12 7.2 THE A.R OF THE APPELLANT ARGUED THAT THE A.O H AD WORKED OUT CAPITAL GAINS TWICE IN THE CASE OF SALE OF 3 FL ATS. ON VERIFICATION I FOUND THAT THE SAME IS TRUE AND THER EFORE THE ADDITION MADE BY A.O OF RS. 13 67 000/- IS DELETED . 8. SHORT TERM CAPITAL GAINS : * SALE CONSIDERATION OF 2 FLATS IN BANASHANKARI PROPERTY AS PER SALE DEEDS RS. 32 00 000/- * LESS COST OF CONSTRUCTION (COST OF EACH FLAT IS TAKEN AT RS. 10 75 000/- AS PER THE AVAILABLE DETAILS) RS. 21 50 000/- --------------------- * SHORT TERM CAPITAL GAINS RS. 10 50 000/- 8.1. THE A.O HAD ALSO COMPUTED SHORT TERM CAPITAL GAINS FROM SALE OF PROPERTY AT SHIVANAHALLI AT RS. 18 50 000/-. THE A.R OF THE APPELLANT CONTENDED THAT THE APPELLA NT NEVER SOLD ANY PROPERTY DURING THE YEAR BUT PURCHAS ED A PROPERTY. ON VERIFICATION I FOUND THAT THE CONTENTI ON OF THE A.R WAS CORRECT. THEREFORE THE ADDITION MADE B Y THE A.O TO THE EXTENT OF RS. 18 50 000/- IS DELETED. 9. THE A.O ALSO MADE AU ADDITION OF RS. 31 LAKHS A S UNEXPLAINED INVESTMENT U/S-69 OF THE ACT BASED ON D IFFERENCE IN SALE VALUE AND AGREEMENT VALUE. HOWEVER AS THERE W AS NO SUPPORTING EVIDENCE TO PROVE THIS THE ADDITION MADE BY THE A.O IS DELETED. 11. AGGRIEVED BY THE ORDER OF THE CIT(A) THE REVEN UE HAS PREFERRED THE PRESENT APPEALS RAISING COMMON GROUNDS OF APPEAL WH ICH HAS ALREADY BEEN SET OUT IN THE EARLIER PART OF THIS ORDER. 12. WE HAVE HEARD THE SUBMISSIONS OF THE LD. DR. T HE LD. DR SUBMITTED THAT ADMITTEDLY THE AO HAS PROCEEDED TO COMPUTE L ONG TERM CAPITAL GAIN / ITA NOS.566 & 567/BANG/2012 PAGE 10 OF 12 SHORT TERM CAPITAL GAIN BASED ON THE VALUE OF AS FO UND IN THE AGREEMENT FOR SALE FOUND AT THE TIME OF SURVEY U/S. 133A OF THE A CT AT THE BUSINESS PREMISES OF THE ASSESSEE. ADMITTEDLY THE SALE CON SIDERATION AS REFLECTED IN THE REGISTERED SALE DEED WAS MUCH LOWER THAN THE SALE CONSIDERATION AS STATED IN THE AGREEMENT FOR SALE. IN SUCH CIRCUMST ANCES BURDEN WOULD BE ON THE ASSESSEE TO SHOW THAT THE AMOUNT RECORDED AS SALE CONSIDERATION IN THE AGREEMENT FOR SALE WAS IN FACT NOT RECEIVED BY THE ASSESSEE AND IT WAS ONLY THE SALE CONSIDERATION REFLECTED IN THE REGIST ERED SALE DEED THAT WAS RECEIVED BY THE ASSESSEE. THE ASSESSEE DID NOT PRO DUCE ANY MATERIAL NOR EVEN PUT FORTH A CONTENTION WITH SUPPORTING EVIDENC E REGARDING ITS CLAIM THAT THE SALE CONSIDERATION RECORDED IN THE REGISTE RED SALE DEED SHOULD BE TAKEN AS FULL VALUE OF CONSIDERATION RECEIVED ON TR ANSFER. IT WAS SUBMITTED BY HIM THAT IN THE ABSENCE OF ANY EVIDENCE BY THE A SSESSEE IN THIS REGARD THE ACTION OF THE AO IN DETERMINING THE LONG TERM C APITAL GAIN AND SHORT TERM CAPITAL GAIN HAS TO BE UPHELD. 13. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LD. D R AND ARE OF THE VIEW THAT THE SAME ARE ACCEPTABLE. AS RIGHTLY CONT ENDED BY THE LD. DR THE ONUS WAS ON THE ASSESSEE TO SHOW THAT THE SALE CONS IDERATION REFLECTED IN THE AGREEMENT FOR SALE WAS IN FACT NOT RECEIVED BY THE ASSESSEE. IN SUCH CIRCUMSTANCES THE NATURAL INFERENCE THAT HAS TO BE DRAWN IS THAT THE SALE CONSIDERATION RECEIVED UNDER THE AGREEMENT FOR SALE IS THE FULL VALUE OF CONSIDERATION RECEIVED ON TRANSFER FOR THE PURPOSE OF COMPUTING CAPITAL GAINS. WE FIND THAT THE ASSESSEE DID NOT PARTICIPA TE IN THE PROCEEDINGS ITA NOS.566 & 567/BANG/2012 PAGE 11 OF 12 BEFORE THE AO AND THE SUBMISSIONS MADE BEFORE THE C IT(A) WERE VERY VAGUE. EVEN THE ORDER OF THE CIT(A) GIVING RELIEF TO THE ASSESSEE IS VAGUE AND LACKS ANY MATERIAL PARTICULARS. IN SUCH CIRCUM STANCES WE ARE OF THE VIEW THAT IT WOULD BE JUST AND APPROPRIATE TO SET A SIDE THE IMPUGNED ORDER OF THE CIT(APPEALS) AND REMAND THE ISSUE WITH REGAR D TO DETERMINATION OF LONG TERM CAPITAL AND SHORT TERM CAPITAL GAIN TO TH E CIT(APPEALS) FOR FRESH CONSIDERATION. THE CIT(A) WILL CALL FOR THE REQUIR ED INFORMATION FROM THE ASSESSEE TO SHOW HOW SALE CONSIDERATION RECORDED IN THE AGREEMENT FOR SALE WAS IN FACT NOT RECEIVED AND THAT ONLY THE SAL E CONSIDERATION MENTIONED IN THE SALE DEED WAS RECEIVED BY THE ASSE SSEE. THE CIT(A) WILL DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW. 14. FOR STATISTICAL PURPOSES THE APPEALS OF THE RE VENUE ARE TREATED AS ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS 25 TH DAY OF APRIL 2014 . SD/- SD/- ( JASON P. BOAZ ) ( N.V. VASUDEVA N ) ACCOUNTANT MEMBER JUDICIAL MEMBE R BANGALORE DATED THE 25 TH APRIL 2014 . /D S/ ITA NOS.566 & 567/BANG/2012 PAGE 12 OF 12 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR / SENIOR PRIVATE SECRETARY ITAT BANGALORE.