Income Tax Appellate Tribunal - Delhi
Naseem Ahmad, Rampur vs Assessee
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH : G : NEW DELHI
BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER
AND
SHRI K.D. RANJAN, ACCOUNTANT MEMBER
ITA No.3094/Del/2010
Assessment Year : 2007-08
C.O. No.231/Del/2010
(ITA No.3163/Del/2010)
Assessment Year : 2007-08
Naseem Ahmed, Vs. ITO II,
S/o Anees Ahmed, Income Tax Building,
C/o Modern Cloth House, Civil Lines,
Bazar Safdar Ganj, Rampur.
Rampur.
PAN : ABKPA8443N
ITA No.3163/Del/2010
Assessment Year : 2007-08
ITO, Vs. Naseem Ahmed,
Ward- II, S/o Anees Ahmed,
Rampur.. C/o Modern Cloth House,
Bazar Safdar Ganj,
Rampur.
PAN : ABKPA8443N
ITA No.3161/Del/2010
Assessment Year : 2007-08
ITO, Vs. Tasneem Ahmad,
Ward- II, S/o Shri Anees Ahmed,
Rampur.. C/o Modern Cloth Store,
Bazar Safdar Ganj,
Rampur.
2 ITA No.3094/Del/2010, C.O. No.231/Del/2010
ITA No.3163/Del/2010, ITA No.3161/Del/2010
C.O. No.229/Del/2010 ,ITA No.3162/Del/2010
C.O. No.230/Del/2010
C.O. No.229/Del/2010
(ITA No.3161/Del/2010)
Assessment Year : 2007-08
Tasneem Ahmad, Vs. ITO,
S/o Shri Anees Ahmed, Ward- II,
C/o Modern Cloth Store, Rampur..
Bazar Safdar Ganj,
Rampur.
ITA No.3162/Del/2010
Assessment Year : 2007-08
ITO, Vs. Shakab Ahmad,
Ward- II, S/o Shri Anees Ahmed,
Rampur.. C/o Modern Cloth Store,
Bazar Safdar Ganj,
Rampur.
C.O. No.230/Del/2010
(ITA No.3162/Del/2010)
Assessment Year : 2007-08
Shakab Ahmad, Vs. ITO,
S/o Shri Anees Ahmed, Ward- II,
C/o Modern Cloth Store, Rampur..
Bazar Safdar Ganj,
Rampur.
(Appellant) (Respondent)
Assessee by : Shri K. Sampath &
Shri Raj Kumar, Advocates
Revenue by : Smt. S. Mohanthy, DR
ORDER
PER BENCH:
ITA Nos.3094/Del/2010 and 3163/Del/2010 are cross appeals inthe case of Shri Naseem Ahmed. C.O. No.231/Del/2010 is also filed by Shri Naseem Ahmed in respect of assessment years 2007-08; ITA 3 ITA No.3094/Del/2010, C.O. No.231/Del/2010 ITA No.3163/Del/2010, ITA No.3161/Del/2010 C.O. No.229/Del/2010 ,ITA No.3162/Del/2010 C.O. No.230/Del/2010 No.3161/Del/2010 is an appeal filed by the revenue in the case of Shri Tasneem Ahmed and C.O. No.229/Del/2010 is filed by Shri Tasneem Ahmed in respect of Assessment Year 2007-08; ITA No.3162/Del/2010 is an appeal filed by the revenue in the case of Shakab Ahmad and CO No.230/Del/2010 is filed by Shri Shakab Ahmad in respect of Assessment Year 2007-08. Since the issues involved in these appeals and cross objections are common, these appeals and cross objections were argued together by both the parties, hence, for the sake of convenience all of them are being disposed by this single order.
2. In the departmental appeals the common issue involved is regarding application of Section 50-C in respect of following properties:-
(i) Industrial leasehold plot of 600 sq. mtrs. at Greater Noida, District Gautam Budh Nagar, UP, which was purchased by the partnership concern of these three assessees, namely, M/s SNT Enterprises and is stated to be purchased in the course of business of real estate; and
(ii) Industrial plot at Ghaziabad measuring 615 sq. mtrs (in the case of Shri Naseem Ahmed only).
3. The industrial leasehold plot at Greater Noida is shown to be sold for a consolidated sum of ` 9 lac vide sale agreement dated 21st August, 2006 which was purchased by these assessees for a total consideration of ` 7 lac vide agreement of purchase dated 23rd May, 2005. The Assessing Officer applied the provisions of Section 50-C and finding that the said plot was located within the area of Surajpur of Greater Noida has applied a prescribed rate of ` 6,000/- per sq. mtr. Therefore, the Assessing Officer has estimated the value of the said plot at ` 36 lac instead of ` 9 lac declared by the assessee and short-
4 ITA No.3094/Del/2010, C.O. No.231/Del/2010 ITA No.3163/Del/2010, ITA No.3161/Del/2010 C.O. No.229/Del/2010 ,ITA No.3162/Del/2010 C.O. No.230/Del/2010 term capital gain has been computed thereon. After deducting the sale consideration of ` 9 lac shown by the assessee from the aforementioned amount of ` 36 lac, the balance of ` 27 lac has been divided into three shares being ` 9 lac each and the said amount has been added to the income of the each assessee.
4. Similarly, in respect of industrial plot at Ghaziabad which was purchased by Shri Naseem Ahmed for a sum of ` 2 lac and was sold for ` 3,75,000/- vide sale agreement dated 18th July, 2006, the Assessing Officer found that prescribed rate of the area was ` 3,000/- per sq. mtr and accordingly he computed the market value of the said plot at ` 18,45,000/-. After reducing a sum of ` 3,75,000/- therefrom, the balance amount ` 14,70,000/- has been added to the income of Shri Naseem Ahmed.
5. The other common issue involved in all these three appeals is regarding agricultural income which is shown by all these three assessees at a sum of ` 1,14,533/- each.
6. The Assessing Officer asked the assessee to substantiate the said agricultural income. It was explained that it represented sale price of the popular trees as well as sale of Bagh Bahar, but no supporting evidence was filed despite various opportunities given in this regard. However, certain photo copies of receipt executed on stamp paper of ` 10/- were filed. The Assessing Officer, ignoring all these evidences estimated the agricultural income of each of the assessee at ` 35,000/- on the ground that the quantum of agricultural income in earlier years was in the range of ` 30,000/- to ` 35,000/-. Thus, the remaining sum of ` 79,533/- has been added to the income of each of the assessees.
5 ITA No.3094/Del/2010, C.O. No.231/Del/2010 ITA No.3163/Del/2010, ITA No.3161/Del/2010 C.O. No.229/Del/2010 ,ITA No.3162/Del/2010 C.O. No.230/Del/2010
7. Another common issue involved is regarding household withdrawals which have been estimated by the Assessing Officer at `10,000/- per month and the balance amount has been added to the income of the assessee which in the case of each assessee is as under:-
Name of the Household expenses Household Addition assessee of the assessee as withdrawal per estimate of shown by the Assessing Officer Assessee Naseem Ahmed ` 1,20,000/- ` 61,104/- ` 58,896/-
Tasneem Ahmed ` 1,20,000 ` 70,792 ` 49,208
Shakab Ahmed - - NIL
8. Another issue involved in the case of Tasneem Ahmed is regarding deletion of addition of ` 5,50,000/ which represent cash credit in the books of the assessee in respect of Smt. Fareeha Tarioq.
According to the grounds of appeal this deletion has been made by the CIT (A) on the basis of additional evidence submitted by the assessee before CIT (A).
9. Learned CIT (A) dwelling on the issue in respect of leasehold industrial plot at Greater Noida, has come to the conclusion that since the agreement of the assessee with the buyer of that land was not registered with the Registering authority of the UP Government and the Assessing Officer has no evidence with him to show that the consideration mentioned in the sale agreement was not correct, Section 50-C could not be applied. Therefore, he has held that the Assessing Officer on the basis of rate gathered from website of the Registrar of UP Government could not make the addition as Section 50C was not applicable. Taking the similar view in respect of 6 ITA No.3094/Del/2010, C.O. No.231/Del/2010 ITA No.3163/Del/2010, ITA No.3161/Del/2010 C.O. No.229/Del/2010 ,ITA No.3162/Del/2010 C.O. No.230/Del/2010 Ghaziabad property in the case of Naseem Ahmed, he has also deleted the said addition.
10. So far as it relates to the addition of agricultural income, learned CIT (A), after considering the facts and circumstances of the case, has arrived at a conclusion that the disallowance on account of agricultural income should be restricted to ` 40,000/-.
11. So far as it relates to household withdrawals also he has restricted the addition to ` 40,000/-.
12. In nutshell, the position is as under:-
In the case of Shri Naseem Ahmed
i) The department is agitating the deletion of addition of ` 9 lac in respect of Greater Noida Industrial plot; The addition of ` 14,70,000/- in respect of industrial leasehold plot at Ghaziabad; The deletion of a sum of ` 39,533/- on account of agricultural income (wrongly written in the grounds of appeal as addition made u/s 68 of the Act).
ii) In the appeal filed by the assessee, sustained addition of ` 40,000/- on account of agricultural income; and sustained addition of ` 40,000/- on account of household expenses have been challenged.
iii) In the Cross Objections, the deletion of ` 9 lac in respect of industrial leasehold plot of Greater Noida has been supported; deletion of ` 14,70,000/- in respect of leasehold industrial plot of Ghaziabad has been supported; sustained addition of ` 40,000/- in respect of agricultural income is 7 ITA No.3094/Del/2010, C.O. No.231/Del/2010 ITA No.3163/Del/2010, ITA No.3161/Del/2010 C.O. No.229/Del/2010 ,ITA No.3162/Del/2010 C.O. No.230/Del/2010 agitated; sustained addition of ` 40,000/- in respect of household expenses is agitated.
In the case of Shri Tasneem Ahmed
i) In departmental appeal the deletion of ` 9 lac on account of leasehold industrial plot of Greater Noida has been agitated; deletion of ` 39,533/- on account of agricultural income is agitated (though written in the grounds of appeal as addition u/s 68 of the Act); in ground Nos.3 and 4 deletion of ` 5,50,000/- u/s 68 is opposed.
ii) In the Cross Objections, deletion of ` 9 lac on account of leasehold industrial plot of Greater Noida is supported; in ground No.2, deletion of ` 5,50,000/- u/s 68 is supported; in ground No.3, sustained addition of ` 40,000/- on account of agricultural income is agitated; in ground No.4, sustained addition of ` 40,000/- in respect of household withdrawal is agitated.
In the case of Shakab Ahmed
i) In the departmental appeal the deletion of ` 9 lac on account of leasehold industrial plot of Greater Noida is agitated; deletion of ` 39,533/- on account of agricultural income is agitated.
ii) In the cross objections, deletion of addition of ` 9 lac is supported; sustenance of addition of ` 40,000/- on account of agricultural income is agitated;
13. Here, it will be appropriate to mention a few facts about the addition of ` 9 lac made in the case of each of the assessees. The plot 8 ITA No.3094/Del/2010, C.O. No.231/Del/2010 ITA No.3163/Del/2010, ITA No.3161/Del/2010 C.O. No.229/Del/2010 ,ITA No.3162/Del/2010 C.O. No.230/Del/2010 as mentioned earlier, is Numbered as 129, situated at block 1 of sector C, within the Surajpur, Greater Noida, district Gautam Budh Nagar, UP and is measuring 600 sq. mtrs and was purchased by a firm constituted by all these three assessees for a total consideration of ` 7 lac vide agreement of purchase dated 23rd May, 2005. Copy of the agreement was filed with the Assessing Officer. The said plot was sold for a total consideration of ` 9 lac against sale agreement dated 21st August, 2006. Copy of this agreement was also filed with the Assessing Officer. The agreement to sell was effected on stamp paper of ` 100 only. On the sale of such industrial plot, all the three assessees have declared 1/3rd share of ` 7,416/- as short-term capital gain. On these facts, the Assessing Officer by obtaining the rates from website has estimated the sale value of this plot at ` 36 lac on the basis of which the addition of ` 9 lac in the case of each of the assessee has been made. As per the main submissions of the assessee before CIT (A) such course could not be adopted by the Assessing Officer by referring to Section 50c as the transfer, if any, was simply on the stamp paper of ` 100 and such transfer does not fall within the ambit of Section 50C. According to the assessee, section 50-C would be applicable on the transfer by an assessee of a capital asset either being land or being building or both is less than the value "adopted or assessed" by any authority of a State Government (which is termed to be as "stamp valuation authority") for the purpose of payment of the stamp duty in respect of such transfer, the value so "adopted or assessed" shall, for the purpose of Section 48 be deemed to be the full value of the consideration received or accrued as a result of such transfer. Referring to these provisions, it is the case of the assessee that the transfer under consideration was neither subject of adoption or assessment by any authority of the State Government for the purpose of stamp duty. It was a transfer in the record of UPSIDC 9 ITA No.3094/Del/2010, C.O. No.231/Del/2010 ITA No.3163/Del/2010, ITA No.3161/Del/2010 C.O. No.229/Del/2010 ,ITA No.3162/Del/2010 C.O. No.230/Del/2010 on simple payment of transfer fee. It is also the case of the assessee that no evidence whatsoever was available with the Assessing Officer that any consideration more than the consideration stated in the agreement to sell was either paid by the purchaser of the plot or received by the assessee. It is on these grounds the assessee has agitated the addition made by the Assessing Officer before the CIT (A) and learned CIT (A) has accepted such contentions.
14. After narrating the facts, the learned DR vehemently pleaded that the assessee had understated the sale consideration. The market price of the said plot was much higher. The Assessing Officer after obtaining rates from the website had adopted the rate of ` 6000/- per sq. mtr. She submitted that the assessee was provided with ample opportunity to bring on record the circle rates of the said plot. Despite those opportunities the assessee failed to submit such evidence. Therefore, she pleaded that the Assessing Officer was right in adopting such rate and the addition was rightly made. Learned CIT (A) has wrongly deleted the addition and his order in this regard should be set aside and that of the Assessing Officer be restored.
15. On the other hand, relying upon the facts mentioned in the assessment order and the submissions made by the assessee before the CIT (A) and also relying upon the following decisions, it is the case of the learned AR that the addition has rightly been deleted by the CIT (A) and his order in this regard should be upheld:-
i) Navneet Kumar Thakkar vs. ITO 110 ITD 525 in which it has been held that what is relevant for the applicability of Section 50C is that the property which is under transfer by the assessee should have been assessed at higher value for stamp duty purpose than that received or accruing to the 10 ITA No.3094/Del/2010, C.O. No.231/Del/2010 ITA No.3163/Del/2010, ITA No.3161/Del/2010 C.O. No.229/Del/2010 ,ITA No.3162/Del/2010 C.O. No.230/Del/2010 assessee - value adopted or assessed by the stamp valuation authorities has to be in respect of very same property. Since the assessee transferred a property by executing an agreement which was not registered with the registering authority, Section 50C could not be applied. This decision has been rendered by SMC Bench of the Tribunal.
ii) Smt. Vijay Laxmi Dhaddha vs. ITO (2009) 20 DTR (Jp) (Trib) 365 wherein it has been held that provisions of Section 50C cannot be invoked in the absence of a registered document i.e., in the absence of any value adopted or assessed by any authority of State Government for the purpose of payment of stamp duty in respect of such transfer. Since no registered sale deed was executed and there was no evidence that the assessee had received higher amount of the consideration against the sale of plot, than, that shown in the agreement to sell, the addition was not sustainable.
iii) Carlton Hotel (P) Ltd. vs. ACIT 122 TTJ (Lucknow) 515 wherein similar proposition has been laid down.
iv) ACIT vs. Smt. J.K. Engineer (2009) 14 MTC 104 (Lucknow Trib).
Copy is placed at pages 65 to 72 of the paper book wherein also similar proposition has been laid down.
16. Referring to the above decisions it was submitted by the learned AR that the addition has rightly been deleted and the order of the learned CIT (A) should be upheld.
17. We have carefully considered the rival submissions in the light of the material placed before us. The aforementioned decision of the Tribunal are laying down the proposition that Section 50C could not be applied in a case where the transaction is not supported by registered 11 ITA No.3094/Del/2010, C.O. No.231/Del/2010 ITA No.3163/Del/2010, ITA No.3161/Del/2010 C.O. No.229/Del/2010 ,ITA No.3162/Del/2010 C.O. No.230/Del/2010 document as there will be complete absence of any value adopted or assessed by any authority of the State Government for the purpose of stamp duty in respect of such transfer as the same is necessary ingredient for application of Section 50-C. The present case relates to Assessment Year 2007-08 i.e., before the insertion of the word "or assessable" along with the words "adopted or assessed" which has been brought to the statute by the Finance (No.2) act, 2009 w.e.f. 1.10.2009. Respectfully following the aforementioned decisions of co- ordinate Bench, we find no infirmity in the order of the CIT (A) vide which it has been held that the aforementioned addition could not be made u/s 50-C of the Act. It may also be mentioned here that no contrary decision has been brought to our notice by the department, therefore, we decline to interfere in the relief granted by the learned CIT (A) in respect of addition made by the Assessing Officer u/s 50-C of the Act.
18. In view of the above discussion, we also decline to interfere in the order of CIT (A), in respect of similar addition made in the hands of Shri Naseem Ahmed in respect of Ghaziabad industrial plot. The deletion of Rs.14,70,000/- in his hands is upheld and this ground of revenue is dismissed.
19. Now, coming to the grounds relating to addition made on account of agricultural income, the addition has been made by the Assessing Officer mainly on the ground that the income shown is excessive. The Assessing Officer himself has estimated the agricultural income in the hands of the assessee at ` 35,000/- each. Learned CIT (A) after considering the facts of the case has restricted the disallowance to ` 40,000/- and has granted further relief of ` 39,333/-. Considering the facts of the case and after considering the 12 ITA No.3094/Del/2010, C.O. No.231/Del/2010 ITA No.3163/Del/2010, ITA No.3161/Del/2010 C.O. No.229/Del/2010 ,ITA No.3162/Del/2010 C.O. No.230/Del/2010 arguments of both the parties, we find that learned CIT (A) is reasonable in estimating the disallowance at ` 40,000/- in the hands of each of the assessee as assessee could not bring ample evidence on record to substantiate the quantum of agricultural income. We decline to interfere in these findings of learned CIT (A) and this ground of the revenue in all these appeals are dismissed.
20. As we have upheld the order of learned CIT (A) on this issue, the grounds raised by the respective assessees in their respective cross objections and appeals with regard to sustained addition of agricultural income is dismissed.
21. So far as it relates to addition on account of household expenses, learned CIT (A) has taken into consideration the facts of each of the case, the status of the family of the assessee, etc., and after giving thoughtful consideration to all these particulars, he has upheld the addition on account of household expenses at ` 40,000/- each in the case of Shri Naseem Ahmed and Shri Tasneem Ahmed. No material has been brought on record to assail these findings of learned CIT (A) by either of the parties. Therefore, after hearing both the parties and after carefully considering the facts of the case, we decline to interfere in the part relief granted by the learned CIT (A). Therefore, ground of appeal of the revenue agitating part relief given to the assessee are dismissed. Similarly, the grounds of the assessee in which sustenance of this part addition has been agitated are also dismissed.
22. Now, we are left with the issue of ` 5,50,000/- in the case of Shri Tasneem Ahmed. Though the learned AR submitted that all the evidences which have been discussed by learned CIT (A) to grant the relief to the assessee were filed before the Assessing Officer, but, he 13 ITA No.3094/Del/2010, C.O. No.231/Del/2010 ITA No.3163/Del/2010, ITA No.3161/Del/2010 C.O. No.229/Del/2010 ,ITA No.3162/Del/2010 C.O. No.230/Del/2010 submitted that he has no objection if the issue is restored back to the file of Assessing Officer with a direction to re-adjudicate the said issue as it is the case of the department that while granting the relief on this account learned CIT (A) has relied upon certain material which was not presented to the Assessing Officer. The learned DR also did not have any objection for setting aside of this issue to the file of the Assessing Officer. In this view of the situation, after hearing both the parties, we set aside this issue to the file of the Assessing Officer with a direction to re-adjudicate the same after giving the assessee a reasonable opportunity in this regard. We direct accordingly. For statistical purposes, this ground of the revenue is allowed and the grounds of cross objections supporting this deletion will become infructuous in view of re-adjudication of this issue by the Assessing Officer.
23. In the result, the departmental appeals except ITA No.3161/Del/2010 in the case of Shri Tasneem Ahmed are dismissed;
ITA No.3161/Del/2010 is partly allowed for statistical purposes in themanner aforesaid; all the Cross Objections filed by the assessee are partly allowed in the manner aforesaid; and ITA No.3094/Del/2010 filed by the assessee is dismissed.
The order pronounced in the open court on 17.02.2012.
Sd/- Sd/-
[K.D. RANJAN] [I.P. BANSAL]
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated, 17.02.2012.
dk
14 ITA No.3094/Del/2010, C.O. No.231/Del/2010
ITA No.3163/Del/2010, ITA No.3161/Del/2010
C.O. No.229/Del/2010 ,ITA No.3162/Del/2010 C.O. No.230/Del/2010 Copy forwarded to: -
1. Appellant
2. Respondent
3. CIT
4. CIT(A)
5. DR, ITAT TRUE COPY By Order, Deputy Registrar, ITAT, Delhi Benches