Income Tax Appellate Tribunal - Delhi
Gurpreet Kaur Maini,, New Delhi vs Assessee on 7 May, 2010
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH: 'C' NEW DELHI
BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND
SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER
W.T.A Nos. 34,35/Del/10
Asstt. Years - 2005-06, 2006-07
DCWT Vs. Ms. Gurpreet Kaur Maini,
Circle-41(1), 6-C, HUDCO Place,
Room No. 306, Andrews Ganj,
Mayur Bhawan, New Delhi.
New Delhi. AKKPM1855B
(Appellant) (Respondent)
AND
C.O. No.28/Del/11
WTA No. 34/Del/2010
Asstt. Year - 2005-06
Ms. Gurpreet Kaur Maini, Vs. DCWT
6-C, HUDCO Place, Circle-41(1), Room No. 306,
Andrews Ganj, Mayur Bhawan,
New Delhi. New Delhi.
AKKPM1855B
(Appellant) (Respondent)
Appellant by: Shri Rajnikant Gupta, CIT(DR)
Respondent by: Shri Sanjay Mehra, CA
2 WTA Nos. 34,35/Del/10
Asstt. years 2005-06, 2006-07
& CO No. 28/Del/2011
Asstt. year 2005-06
ORDER
PER BENCH:
The present two appeals are directed at the instance of revenue against the order of Ld. CWTA dated 7th May, 2010 passed for asstt.
years 2005-06 and 2006-07. On receipt of notice in the revenue's appeal for asstt. year 2005-06 assessee has filed the cross objection bearing No. 28/D/2011. The registry has pointed out that cross objection is time barred by 32 days.
2. With the assistance of Ld. Representative we have gone through the record carefully. We find that these appeals were filed by the revenue on 29.7.2010. The appeals were posted for hearing on 22nd September 2010. On 22nd September, 2010 no one appeared on behalf of the assessee. Hearing was adjourned to 23.11.2010. Notice of the hearing has been issued to the respondent by registered post. The revenue has filed revised ground of appeal vide letter dated 21.10.2010. In the original ground of appeal revenue has pleaded that Ld. CWTA has erred in deleting the addition of ` 7,28,99,200/- from the net taxable wealth of the assessee in each asstt. year. In the revised ground revenue has pleaded that this addition has been deleted by entertaining additional evidence in violation to Rule 5A of the Wealth Tax Rules 3 WTA Nos. 34,35/Del/10 Asstt. years 2005-06, 2006-07 & CO No. 28/Del/2011 Asstt. year 2005-06 1957. The service of this revised ground of appeal has not been effected upon the assessee. We have apprised the Ld. Counsel for the assessee about the revised ground of appeal. In view of this development, in our opinion the cross objection cannot be said to be time barred. Because on service of the revised ground of appeal the assessee can file the cross objection. With the above observation, we treat the cross objection well in time and proceed to adjudicate the appeal as well as the cross objection on merit.
3. The solitary common grievance in the revenue's appeal relates to deletion of ` 7,28,99,200/- from the net taxable wealth of the assessee by entertaining additional evidence in violation to rule 5A of the Wealth Tax Rules 1957.
4. The brief facts of the case are that assessment proceedings in both the years have been initiated by issuance of a notice u/s 17(1) of the Wealth Tax Act. This notice was issued on 27.2.2009. The assessee has filed wealth tax return on 3rd June, 2009, in both the assessment years, wherein she declared her taxable wealth at ` 11,90,550/- in asstt. year 2005-06 and ` 14,67,850/- in asstt. year 2006-
07. The AO has observed that assessee had a residential house property comprised at F-130/1, W-5 Lane, Western Avenue Sainik Farm, 4 WTA Nos. 34,35/Del/10 Asstt. years 2005-06, 2006-07 & CO No. 28/Del/2011 Asstt. year 2005-06 New Delhi. According to the AO, assessee claimed exemption of this asset u/s 5 (vi) of the Wealth Tax Act. It emerges out from the record that this property has devolved upon the assessee by way of relinquishment deed dated 4th June, 1998 executed by Smt. Darshan Chaudhary mother of the assessee. According to the AO this land is situated at Khasra No. 14/21 in Village Davali Tahsil. Mehrauli, New Delhi. It is known as Sainik Farm, New Delhi. This land is measuring 5 bighas and 4 biswas. The alleged house claimed by the assessee as exempt u/s 5(vi) of the Wealth Tax Act has been built upon an area of 1000 sq. yards. The total area of the Khasra No. is roughly 5000 sq. yards. According to the AO the assessee failed to disclose the wealth of 4000 sq. yards for the purpose of Wealth Tax Act. He was of the opinion that value of vacant land along with this house, measuring 4000 sq. yards ought to be included in the total wealth. He estimated the value of this property at ` 7,28,99,200/- and included it in the taxable wealth of the assessee.
5. Dissatisfied with the addition assessee carried the matter neither before the Ld. CWT(A). She apprised the Ld. CWT(A) that AO has failed to appreciate the relinquishment deed as well as purchase deed in right perspective. Assessee has prepared a list of events exhibiting the details 5 WTA Nos. 34,35/Del/10 Asstt. years 2005-06, 2006-07 & CO No. 28/Del/2011 Asstt. year 2005-06 of land in Khasra No. 14/21 and how it has devolved upon the assessee. Ld. CWT(A) has reproduced such event on page No. 3 of the impugned order. The assessee has filed copies of the sale agreement before the Ld. CWT(A). On an analysis of all these documents Ld. CWTA arrived at a conclusion that one Shri Avtar Singh and Shri Gurmeet Singh sons of Shri Raghunandan Singh were the owner of the property, total area measuring 5000 sq. yards. They entered into a development agreement with M/s. Competent Holdings Ltd. According to that arrangement M/s. Competent Holdings Limited will construct 5 houses on this land. The sale proceed of those 5 houses will be shared equally between the owners and developers i.e. 50% would come to Shri Avtar Singh and Shri Gurmeet Singh and 50% would go to M/s Competent Holdings Limited. The house owned by the assessee was originally purchased by Mr. Mukul Rastoghi, Mr. Rajiv Nayar and Mr. Ravi Shankar vide agreement to sale dated 27.11.95. Shri Mukul Rastoghi, Shri Rajiv Nayar and Shri Ravi Shankar has sold this property of house No. 1 which comprised on an area of 1000 sq. yards to Mrs. Darshan Chowdhary, assessee i.e Ms. Gurpreet Kaur and Mrs. Pritam Kaur vide sale agreement dated 6th December, 1996. On 4th June, 1998 Mrs. Darshan Chowdhary has relinquished her right in favour of assessee as 6 WTA Nos. 34,35/Del/10 Asstt. years 2005-06, 2006-07 & CO No. 28/Del/2011 Asstt. year 2005-06 per the family settlement. In this way assessee has been stated to be the owner of the house property which comprised in 1000 sq. yards only. Ld. CWT(A) accordingly deleted the addition.
6. Ld. Dr pointed out that during the assessment proceeding AO has confronted the assessee as to why value of 4000 sq. yards of land be not included in her net wealth. The assessee did not explain her position. The sale agreement referred to in the list of events have been filed for the first time before Ld. CWT(A). These agreements were not confronted with the AO by the Ld. First Appellate Authority. Therefore, the evidence could not be read while disposing off the appeal. He referred to sub rule 3 of Rule 5A and submitted that expression "shall" has been used in this sub rule. This rule contemplate that evidence entertained by the Ld. CWT (A) shall not be taken into account unless AO has been allowed a reasonable opportunity to examine the evidence or document or to cross examine the witness. The CWT(A) was duty bound to give an opportunity to the AO for leading additional evidence in rebuttal to the evidence produced by the assessee. Ld. Counsel on the other hand submitted that assessee has not produced additional evidence. These documents are forming part of the record. The relinquishment deed is already before the AO.
7 WTA Nos. 34,35/Del/10
Asstt. years 2005-06, 2006-07 & CO No. 28/Del/2011 Asstt. year 2005-06
7. We have duly considered the rival contention and gone through the record carefully. Sub rule 1 of rule 5A prohibits the appellant to produce additional evidence before the Ld. First Appellate Authority unless the case falls within the exception provided in sub clauses A to D of sub rule 1. Sub rule 2 of Rule 5A further provide that no evidence shall be admitted by the Ld. First Appellate Authority unless he records in writing the reasons for its admission. Sub rule 3 further provide that the evidence so permitted shall not be used unless AO has been given a reasonable opportunity to rebut the evidence produced by the appellant. Sub rule 4 of 5A empower the first Appellate Authority to call for any evidence which the authority deem fit for the just decision of the appeal. In the present case though assessee contested the argument of the revenue that no evidence was produced before the CWT(A), but from the paper book we find that assessee has filed a flow chart wherein she has demonstrated how the property has devolved upon her and what is the quantum of property. Neither this explanation was filed before the AO nor the supporting documents. The AO might have misconstrued the relinquishment deed but the sale agreement entered by Shri Avtar Singh with Shri Mukul Rastoghi and other available on page 30 of the paper book was not submitted before the AO. Similarly the document 8 WTA Nos. 34,35/Del/10 Asstt. years 2005-06, 2006-07 & CO No. 28/Del/2011 Asstt. year 2005-06 available on page 41 i.e an agreement to sale by Mr. Mukul Rastoghi and others in favour of the assessee and Mrs. Darshan Chowdhary was not submitted before the AO. Ld. CWT(A) has taken cognizance of these documents without affording due opportunity of hearing to the AO to rebut these documents.
8. We have perused the photocopies of the sale agreements. Prime facie reveals from these documents that assessee is the owner of a house property which is comprised in 1000 sq. yards. These documents are essential documents for silencing the controversy between the revenue and the assessee. From the copy of the relinquishment deed it does not discern that area of this house is 1000 sq. yards only. The relinquishment deed only disclose the Khasra No. which has an area of 5 bighas and 4 biswas. It also refer to the sale agreement between Mrs. Darshan Chowdhary and others and Mr. Mukul Rastoghi and others. But the exact area is not discernable. This might have led the AO to arrive at a wrong conclusion. Therefore, as far as entertainment of additional evidence by the Ld. CWT(A) is concerned, we do not find any fault in the order, because these documents are essential documents for the just decision of the appeals. The documents could have been called for, while exercising the powers under sub rule 4 of rule 5A. However, Ld. 9 WTA Nos. 34,35/Del/10 Asstt. years 2005-06, 2006-07 & CO No. 28/Del/2011 Asstt. year 2005-06 CWT(A) has violated the conditions enumerated in sub rule 3 of Rule 5A of the wealth tax rules. An opportunity to the AO is must before considering these documents. A remand report ought to have been called for. Therefore, the order of the Ld. First Appellate Authority on this point deserves to be set aside. We accordingly, allow the appeals of department for statistical purpose and set aside this issue in both the asttt. years to the file of Ld. First Appellate Authority for readjudicaition. Ld. First Appellate Authority shall call for a remand report from the AO on the additional evidence entertained by her and then decide the issue after affording due opportunity of hearing to the assessee.
Cross Objection No. 28/Del/11
9. This cross objection has been filed by the assessee in asstt. year 2005-06. In the cross objection assessee has disputed the valuation of a vacant plot of land at Mohali at ` 75,00,000/- the finding recorded by the AO on this issue read as under :-
"3. The wealth of the assessee includes one plot of land (urban) at Mohali measuring 500 sy. Yds. This plot is at no. 233, Sec for 70, Urban Estate, SAS Nagar, Mohali. The assessee has declared the value of this property at Rs. 8 lakhs only. The value declared by the assessee is very much on lower side and without any proper basis. Assessee has failed to give any explanation and evidence in this regard, though specifically asked to clarify the issue on many occasions (order sheet entry 09.12.2009 and 23.12.2009). Considering the fact that plot is in Mohali which is a fully developed city and is quite near to Chandigarh city, the fair market value of the land in this area is estimated at Rs. 15,000/- per sq. yards as on 31.3.2005. The value of this plot at this rate as such works out at Rs. 75,00,000/- (500 x 15,000). As such the value of this land as on 31.3.2005 is adopted at Rs. 75,00,000/-."10 WTA Nos. 34,35/Del/10
Asstt. years 2005-06, 2006-07 & CO No. 28/Del/2011 Asstt. year 2005-06
10. Appeal to the Ld. CIT(A) did not bring any relief to the assessee.
11. We have heard the Ld. Counsel and gone through the record carefully. On perusal of the asstt. order we do not find any basis for adopting the value of this plot at ` 75,00,000/-. The AO has neither referred any report of the DVO or the circle rate, if any, notified by the State Government, exhibiting the value of the vacant plots in this area for the purpose of stamp valuation etc. The AO has estimated the value by way of a thumb rule. In our opinion before arriving at this value he should have collected the evidence exhibiting this rate in the vicinity. The evidence could be in the shape of sale deeds etc. The adoption of the value of ` 75,00,000/- without their being anything on record cannot be upheld. Therefore, we set aside the order of the AO as well as Ld. CIT(A) on this issue in asstt. year 2005-06. We restore this issue to the file of AO for readjudication.
12. In the result, the appeals as well as cross objection are allowed for statistical purposes.
Order pronounced in the open court on 4.2.2011.
Sd/-
[SHAMIM YAHYA] [RAJPAL YADAV]
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated: 4.2.2011
11 WTA Nos. 34,35/Del/10
Asstt. years 2005-06, 2006-07
& CO No. 28/Del/2011
Asstt. year 2005-06
Veena
Copy forwarded to: -
1. Appellant
2. Respondent
3. CIT
4. CIT (A)
5. DR, ITAT TRUE COPY By Order,
Deputy Registrar,
ITAT