Kerala High Court
Green Valley Builders vs Cit on 4 February, 2005
Equivalent citations: [2008]296ITR225(KER), [2005]149TAXMAN671(KER)
Author: K.S. Radhakrishnan
Bench: K.S. Radhakrishnan, C.N. Ramachandran Nair
JUDGMENT K.S. Radhakrishnan, J.
This appeal arises out of an order passed by the Income Tax Appellate Tribunal, Kochi-Bench in I.T.A. Nos. 68 and 109/ Coch./98 and also against the order dated 7-2-2003 in M.P. No. 53/Coch./ 2002.
2. Appellant-assessee is a firm consisting of three partners. The firm had filed its return of income for the assessment year 1994-95 on 31-8-1994. Assessee had claimed a loss of Rs. 6,63,630. While completing the assessment under section 143(3) of the Income Tax Act, the assessing officer made certain disallowance and additions which resulted in determining the total income of the firm at Rs. 25,00,950. Assessing officer had quantified the loss at Rs. 2,37,530 as against the loss of Rs. 6,63,630 claimed by the assessee. Assessing officer added Rs. 27,38,475 as unaccounted income on sale of land,
3. Assessee was engaged in real estate business. Kerala State Industrial Development Corporation Limited had proposed to start a Nylon filament manufacturing unit at Mylam near Trivandrum for which a company by name Sun-flag Nylons Limited was floated with K.S.I.D.C. as one of the promoters. Land was acquired giving a promise to the landlords to the effect that at least one member from the family would be given employment in the proposed factory, Project did not materialise due to various reasons. M/s. Sunflag Nylons Limited had then proposed to sell the land to realise the investment. For the said purpose they had entered into an agreement with the assessee. As per the said agreement, assessee had to pay a sum of Rs. 1,00,001 immediately and the balance within a period of six months from the date of agreement. Agreement was entered into on 22-4-1993, On the basis of the said agreement, assessee started the sale of the land in different plots, after giving wide publicity in newspapers. Assessee had made a statement that he had sold the property as housing plots at the rate of Rs. 1,750 per cent. Assessing officer did not accept the statement and made his own enquiries. Several persons who had purchased house plots were questioned and materials collected. Ultimately the assessing officer found that the land was sold at the rate of Rs. 4,000 per cent. Assessing officer also found that out of the total area of 17 acres assessee had sold 13 acres. Purchasers were categorized into three. First category of persons are unrelated to the partners of the firm, second category are the partners themselves and the third category of persons were treated as benamis of the partners. Assessing officer completed the assessment accordingly. Petitioner took up the matter in appeal before the Commissioner (Appeals), Commissioner as per order dated 16-12-1997 partly allowed the appeal and the assessing authority was directed to modify the assessment order. Aggrieved by the same revenue as well as the assessee approached the Tribunal. The Tribunal dismissed the appeal filed by the assessee and allowed the appeal filed by the revenue.
4. Counsel appearing for the appellant submitted that the Tribunal had failed to appreciate the various points raised by the appellant since the appellant could not be present before the Tribunal. He later filed an application to recall the order passed by the Tribunal and to post the appeal for hearing afresh giving opportunity to the assessee.
5. We may at the outset indicate the Tribunal has not committed any error in disposing of the appeal. Appeals were filed in the year 1998 and they were posted for hearing on various occasions. On 27-11-2001 when the appeal was taken up for hearing, there was no appearance on behalf of the assessee and the Tribunal suo motu posted the appeals for hearing and disposal to 16-1-2002. Though application for adjournment was preferred on 16-1-2002, same was declined and the appeals were disposed of by common order on 24-1-2002. Then a petition M.P. 53/Coch./02 was preferred to set aside the order passed and to give an opportunity of hearing to the applicant. Same was rejected by the Tribunal by order dated 7-2-2003.
6. We have perused the order and we find no illegality. On merits also we find no reason to interfere with the order passed by the Assessing Authority which in our view has taken a very practical and reasonable approach. There is sufficient reasons for such categorization. Assessing officer after scrutinizing the documents has come to the conclusion that the sale price of Rs. 1,750 stated by the assessee was not the real sale price and the sale price was fixed at Rs. 4,000. The said fixation of land value is based on relevant materials. We therefore find no reason to interfere with the order passed by the Appellate Tribunal. The appeal is accordingly dismissed.