Income Tax Appellate Tribunal - Delhi
Dcit, New Delhi vs Smt. Silky Khattar, Gurgaon on 27 April, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL
(DELHI BENCH 'G' : NEW DELHI)
BEFORE SHRI N.K. SAINI, ACCOUNTANT MEMBER
and
SHRI KULDIP SINGH, JUDICIAL MEMBER
ITA No.563/Del./2010
(ASSESSMENT YEAR : 2006-07)
DCIT, Central Circle 11, vs. Smt. Silky Khattar,
New Delhi. 54, Sukh Chain Marg,
DLF Phase - 1,
Gurgaon (Haryana).
(PAN : AIPPK7372N)
ITA No.565/Del./2010
(ASSESSMENT YEAR : 2006-07)
DCIT, Central Circle 11, vs. Smt. Nirmal Rani,
New Delhi. 54, Sukh Chain Marg,
DLF Phase - 1,
Gurgaon (Haryana).
(PAN : AAIPK8710F)
(APPELLANT) (RESPONDENT)
ASSESSEE BY : Shri Yogesh Kumar Jagia, CA
REVENUE BY : Shri M. Baranwal, Senior DR
Date of Hearing : 26.04.2018
Date of Order : 27.04.2018
ORDER
PER KULDIP SINGH, JUDICIAL MEMBER :
Since common questions of facts and law have been raised in both the aforesaid appeals, the same are being disposed of by way of consolidated order to avoid repetition of discussion. 2 ITA No.563 & 565/Del./2010
2. The appellant, Deputy Commissioner of Income-tax, Circle 11, New Delhi (hereinafter referred to as 'the Revenue') by filing the present appeals, sought to set aside the impugned orders both dated 26.11.2009 passed by Ld. CIT (Appeals)-I, New Delhi qua the assessment year 2006-07 on the grounds inter alia that :-
"ITA NO.563/DEL/2010
1. The order of the Ld. CIT (Appeals) is not correct in law and facts.
2. On the facts and circumstances of the case, the Ld. CIT(A) has erred in law & facts in deleting the addition of Rs.28,66,950/- made u/s 69 without considering the spirit of the provisions contained in sections 50C and 56(2)(vii) of the IT Act and the strength of the arguments of the AO.
3. On the facts and circumstances of the case, the Ld. CIT (A) has erred in law & facts in deleting the addition of Rs.28,795/- ignoring the fact that the assessee has failed to furnish the details as required by the AO.
4. On the facts and circumstances of the case, the Ld. CIT (A) has erred in law & facts in deleting the addition of RS.10 lacs without properly appreciating the facts that Sh. Harish Dua did not have capacity and creditworthiness to advance the alleged sum and the explanation offered by the assessee was unsatisfactory.
5. On the facts and circumstances of the case, the Ld. CIT (A) has erred in law & facts in deleting the addition of Rs.16,57,920/- by ignoring the evidence put on record by the AO."
"ITA NO.565/DEL/2010
1. The order of the Ld. CIT (Appeals) is not correct in law and facts.
2. On the facts and circumstances of the case, the Ld. CIT(A) has erred in law & facts in deleting the addition of Rs.51,25,990/- made u/s 69 without considering the spirit of the 3 ITA No.563 & 565/Del./2010 provisions contained in sections 50C and 56(2)(vii) of the IT Act and the strength of the arguments of the AO.
3. On the facts and circumstances of the case, the Ld. CIT (A) has erred in law & facts in deleting the addition of Rs.14,32,460/- made by the AO as unexplained investment in the purchase of land u/s 69 of the I.T. Act."
2. Briefly stated the facts necessary for adjudication of the controversy at hand are : Assessing Officer made addition of Rs.28,66,950/- and Rs.51,25,990/- in respect of Silky Khattar and Nirmal Rani respectively under section 69 of the Income-tax Act, 1961 (for short 'the Act') as the assessee has made investment in purchase of various land out of income from undisclosed sources by showing less rate of the land purchased than the market rate. AO further made addition of Rs.28,795/- in case of Silky Khattar qua sale of paintings of Rs.1,21,205/- on failure of the assessee to furnish details of the painting receipt and expenses. AO further made addition of Rs.10,00,000/- in respect of Silky Khattar on her failure to prove the sources of expenses qua land purchased at Ghilot, Rajasthan. AO further made addition of Rs.16,57,920/- in respect of Silky Khattar on account of short term capital gain qua sale of agricultural land qua which assessee has claimed exemption on the ground that the land being agricultural is exempt u/s 2(44) of the Act. AO further made addition of Rs.14,32,460/- u/s 69 of the Act in case Nirmal Rani invested by the assessee in purchase of 4 ITA No.563 & 565/Del./2010 land which she fails to explain by treating the same as income from undisclosed sources.
3. Assessee carried the matter by way of an appeal before the ld. CIT (A) who has deleted the addition by allowing the appeal. Feeling aggrieved, the Revenue has come up before the Tribunal by way of filing the present appeals.
4. We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case.
GROUND NO.1 IN CASE OF SILKY KHATTAR AND NIRMAL RANI
5. Ground No.1 in case of Silky Khattar and Nirmal is general in nature, hence does not require any adjudication. GROUND NO.2 IN CASE OF SILKY KHATTAR AND NIRMAL RANI
6. AO has made the addition on the basis of provisions contained u/s 50C of the Act. It is also not in dispute that the income chargeable under the head 'Capital gain' is required to be computed by deducting from total value of the consideration received from or accruing as a result of transfer of asset, expenditure incurred wholly and exclusively regarding such 5 ITA No.563 & 565/Del./2010 transfer and cost of acquisition of assets and cost of improvement, if any. It is also not in dispute that the assessees have purchased various chunks of land in Village Ghilot, Fatehpura, Gram Choubara Shahjahpur and Gram Dudhera Behror. AO has made addition merely on the basis of assumption that the assessees have made investment in purchasing lands out of her income from undisclosed sources by showing less purchase price than the market rates/circle rates. The ld. CIT (A) has thrashed the issue in entirety in the light of various judgments.
7. The ld. CIT (A) has also discussed the provision contained u/s 50C invoked by the AO in the light of Circular No.8 of 2002 dated 27.08.2002 and has rightly reached the conclusion that in case of consideration received or accruing as a result of the transfer by the assessees of a capital asset is less than the value adopted by an authority, the circle rates for the purpose of stamp duty in respect to such transfer, the value shall be taken for the purpose of section 48 of the Act and deemed to be value of the consideration received or accruing as a result of such transfer. So, section 50C of the Act clearly provides for application to provision contained in section 48 of the Act for computation of capital gain on sale of land, so section 48 has no application for investment in land. So, merely by invoking section 50C, AO cannot reach at the 6 ITA No.563 & 565/Del./2010 conclusion that there is an unexplained investment u/s 69 of the Act. Even otherwise, there is no evidence available on record to reach at the conclusion that the assessee has made investment which has entirely been made by the AO on the basis of assumptions. So, the figures recorded in the sale deed for the purpose of making payment of sale consideration cannot be discarded to assume that the same has been executed for lesser rate to conceal the undisclosed income unless the Revenue has proved some agreement between the parties to the land deal; that higher amount mentioned in the sale was paid. So, we are of the considered view that the ld. CIT (A) has rightly deleted the addition made by the AO. So, ground no.2 is determined against the Revenue.
GROUND NO.3 IN CASE OF SILKY KHATTAR
8. The addition of Rs.28,795/- deleted by ld. CIT (A) has been made by the AO on account of undisclosed sale consideration of sale of painting. Assessee has submitted complete details for sale of paintings and expenses which has been duly reproduced by the ld. CIT (A) in para 7.1 of the impugned order. It is the case of the assessee that against the gross receipt of Rs.1,60,300/- expenditure of Rs.39,095/- has been claimed which is 25% of the gross receipt. 7 ITA No.563 & 565/Del./2010 The ld. CIT (A) has rightly arrived at the finding that since the assessee has already disclosed consideration of sale of painting at Rs.1,60,300/- and claimed expenses only on RS.39,095/- and there is not income of RS.1,21,205/-. AO has merely proceeded on the basis of assumptions by stating that since profit of assessee is not subject to verification, provisions contained u/s 145 are applicable. When actually there is no material with the Revenue to estimate the income from the painting at Rs.1,50,000/-, the ld. CIT (A) has rightly deleted the addition. Consequently, ground no.3 in case of Silky Khattar is determined against the Revenue. GROUND NO.4 IN CASE OF SILKY KHATTAR
9. So far as next deletion of Rs.10,00,000/- by ld. CIT (A) made by the AO on account of unexplained investment is concerned, the same has been made by the AO on failure of the assessee to furnish any document in support of its claim regarding advance received. Assessee has produced Agreement to Sell dated 10.04.2005 executed by Shri Harish Dua showing advance of Rs.10,00,000/- against the purchase of agricultural land as additional evidence which has been accepted by the ld. CIT (A) by calling the remand report form AO. AO has not disputed the fact that the amount of Rs.10,00,000/- was given by virtue of the 8 ITA No.563 & 565/Del./2010 Agreement dated 10.04.2005 but has disputed the capacity and creditworthiness of Shri Harish Dua for payment of Rs.10,00,000/- as claimed by the assessee. It is settled principle of law that the AO cannot insist upon source of sources particularly when the assessee has categorically proved the fact that he has taken the amount of Rs.10,00,000/- from Shri Harish Dua by virtue of Agreement to Sell as earnest money. It is up to Revenue to separately enquire about the sources of Shri Harish Dua and assessee cannot be made to suffer on this score. Ld. CIT (A) has relied upon the decision rendered by Hon'ble Supreme Court in case cited as CIT vs. Daulat Ram Rawatmall reported in 87 ITR 349 (SC). So, we are of the considered view that there is no illegality or perversity in the deletion of Rs.10,00,000/- made by the AO. So, ground no.4 is determined against the Revenue. GROUND NO.5 IN CASE OF SILKY KHATTAR AND GROUND NO.3 IN CASE OF NIRMAL RANI
10. The ld. CIT (A) has deleted the addition of Rs.16,57,920/- and Rs.14,32,460/- in case of Silky Khattar and Nirmal Rani respectively made by the AO on the ground that the agricultural land sold by the assessee qua which they have claimed short term capital gain was situated within 8 kms. of the municipal limit. But, 9 ITA No.563 & 565/Del./2010 undisputedly, the ld. CIT (A) has deleted this addition by calling a remand report. AO in its remand report has furnished the necessary confirmation issued by concerned Tehsildar stating therein that the land in question is situated beyond 8 kms. of municipal limit. However, AO has tried to override the report given by the Tehsildar by deputing one Inspector which is not sustainable in the eyes of law. So, we are of the considered view that the ld. CIT (A) has rightly deleted the addition of Rs.16,57,920/- and Rs.14,32,460/- in case of Silky Khattar and Nirmal Rani respectively after ascertaining the fact that the land in question is situated beyond 8 kms. of municipal limit. So, ground no.5 & ground no.3 in case of Silky Khatta and Nirmal Rani respectively are determined against the Revenue.
11. Resultantly, both the appeals filed by the Revenue are dismissed.
Order pronounced in open court on this 27th day of April, 2018.
Sd/- sd/-
(N.K. SAINI) (KULDIP SINGH)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated the 27th day of April, 2018
TS
10 ITA No.563 & 565/Del./2010
Copy forwarded to:
1.Appellant
2.Respondent
3.CIT
4.CIT(A)-I, New Delhi.
5.CIT(ITAT), New Delhi. AR, ITAT
NEW DELHI.