Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, MUMBAI BENCH “D” MUMBAI
Before: SHRI AMIT SHUKLA & SHRI OM PRAKASH KANT
PER OM PRAKASH KANT, AM
This appeal by assessee is directed against order dated 02/03/2020 passed by the Learned Commissioner of Income-tax (Appeals)-3, Mumbai [in short ‘the Ld. CIT(A)’] for assessment year 2014-15, raising following grounds:
1. The Hon. CIT(A) erred in confirming the addition to the extent of Rs.1,16,51,000/-made W/s 56(2)(vii)(b)(i) of the I.
Ranjit Shivram Raut 2 ITA No. 1902/M/2020 T. Act 1961, due to differenc T. Act 1961, due to difference between the actual e between the actual purchase consideration of 3 N.A. plots of land situated at purchase consideration of 3 N.A. plots of land situated at purchase consideration of 3 N.A. plots of land situated at village Navghar, Taluka Vasai, Dist. Palghar and market village Navghar, Taluka Vasai, Dist. Palghar and market village Navghar, Taluka Vasai, Dist. Palghar and market value as per stamp valuation authorities, not appreciating value as per stamp valuation authorities, not appreciating value as per stamp valuation authorities, not appreciating that the lands purchased were not capital assets and that the lands purchased were not capital assets and that the lands purchased were not capital assets and therefor therefore the provisions of section 56(2)(vii)(b)(i) were not e the provisions of section 56(2)(vii)(b)(i) were not attracted and the addition was not justified. attracted and the addition was not justified.
2. The Hon. CIT(A) erred in confirming the addition to the The Hon. CIT(A) erred in confirming the addition to the The Hon. CIT(A) erred in confirming the addition to the extent of Rs.1,16.51,000% extent of Rs.1,16.51,000%-made u/s 56(2)(vii)(b)(i) of the I. made u/s 56(2)(vii)(b)(i) of the I. T. Act 1961, due to difference between T. Act 1961, due to difference between the actual purchase consideration of 3 N.A. plots of land situated at purchase consideration of 3 N.A. plots of land situated at purchase consideration of 3 N.A. plots of land situated at village Navghar, Taluka Vasai, Dist. Palghar, by adopting village Navghar, Taluka Vasai, Dist. Palghar, by adopting village Navghar, Taluka Vasai, Dist. Palghar, by adopting the value determined by the Asst. Valuation officer, Thane, the value determined by the Asst. Valuation officer, Thane, the value determined by the Asst. Valuation officer, Thane, vide order dt. 31.10.2017, which substantially ignored the vide order dt. 31.10.2017, which substantially ignored the vide order dt. 31.10.2017, which substantially ignored the various various reasons. reasons. determining determining the the actual actual purchase purchase consideration and therefore the addition was not justified. consideration and therefore the addition was not justified. consideration and therefore the addition was not justified.
3. The Hon. CIT(A) erred in not considering the sum of The Hon. CIT(A) erred in not considering the sum of The Hon. CIT(A) erred in not considering the sum of Rs.66,00,000/ Rs.66,00,000/- paid in cash for purchase of plots at paid in cash for purchase of plots at village Navghar, Taluka Vasai, Dist. Palghar, as part of village Navghar, Taluka Vasai, Dist. Palghar, as p village Navghar, Taluka Vasai, Dist. Palghar, as p actual purchase consideration for working out the addition actual purchase consideration for working out the addition actual purchase consideration for working out the addition us 56(2)(vi)(b(i) of the I.T. Act 1961 and therefore the us 56(2)(vi)(b(i) of the I.T. Act 1961 and therefore the us 56(2)(vi)(b(i) of the I.T. Act 1961 and therefore the addition to that extent was not appropriate. addition to that extent was not appropriate.
Briefly stated fact stated facts of the case that the assessee, an individual s of the case that the assessee, an individual, was engaged in the business of undertaking small civil construction was engaged in the business of undertaking small civil construction was engaged in the business of undertaking small civil construction work. For the year under consideration, the assessee filed return of work. For the year under consideration, the assessee filed return of work. For the year under consideration, the assessee filed return of income on 16/11/2015, declaring total income of income on 16/11/2015, declaring total income of ₹11,43, 11,43,220/-. The Ld. CIT(A) has noted that the assessee had shown to have income Ld. CIT(A) has noted that the assessee had shown to Ld. CIT(A) has noted that the assessee had shown to Ranjit Shivram Raut 3 ITA No. 1902/M/2020 from salary and income from house property. The return of income from salary and income from house property. The return of income from salary and income from house property. The return of income filed by the assessee was selecte filed by the assessee was selected for scrutiny assessment and d for scrutiny assessment and statutory notices under the Income statutory notices under the Income-tax Act, 1961 (in short in short ‘the Act’) were issued and complied with. During assessm were issued and complied with. During assessment proceeding, the ent proceeding, the Ld. Assessing Officer observed that as per Assessing Officer observed that as per the Annual Information Annual Information Return (AIR) filed by t (AIR) filed by the office of the Sub-Registrar Registrar, Vasai, the assessee purchased three plots of land, at Navghar, Talika Vasai land, at Navghar, Talika Vasai, District Vasai (Maharashtra Maharashtra) for total consideration of consideration of ₹9 lakh (₹3 lakh for each plot) against the fair market value of ₹1,70,91,000/- lakh for each plot) against the fair market value of lakh for each plot) against the fair market value of (₹56,97,000/- for each plot for each plot). According to the Assessing Officer ording to the Assessing Officer, the difference amount of difference amount of ₹1,61,91,000/- was taxable under section was taxable under section 56(2)(vii)(b) of the Act Act. The contention of the assessee that Section . The contention of the assessee that Section 56(2)(vii)(b) of the Act Act was not applicable being plots purchased was not applicable being plots purchased were not capital asset, was rejected by the Assessing Officer. The were not capital asset, was rejected by the Assessing Officer. The were not capital asset, was rejected by the Assessing Officer. The Assessing Officer also rejected the contention of the assessee that Assessing Officer also rejected the contention of the assessee that Assessing Officer also rejected the contention of the assessee that payments of ₹66 lakh was paid by 66 lakh was paid by one Sh Rajeev Patil to the seller one Sh Rajeev Patil to the seller of the property i.e. M/s United in cash operty i.e. M/s United in cash, should be considered as , should be considered as payment made in cash by the assess payment made in cash by the assessee for purchase of the property. ee for purchase of the property. However, on the request of the assessee, the Assessing Officer ma , on the request of the assessee, the Assessing Officer made , on the request of the assessee, the Assessing Officer ma
Ranjit Shivram Raut 4 ITA No. 1902/M/2020 a reference to the Departmental Valuation Officer Departmental Valuation Officer Departmental Valuation Officer for ascertaining the fair market value of t the fair market value of the properties as per the provis he properties as per the proviso to section 56(2)(vii)(b) of the Act Act. Till the finalization of the assessment, ation of the assessment, valuation report was not received from the valuation report was not received from the Departmental Valuation mental Valuation Officer and therefore the and therefore the Ld. Assessing Officer assessed the Assessing Officer assessed the difference between the value of the properties as per stamp duty difference between the value of the properties as per stamp duty difference between the value of the properties as per stamp duty authorities and value declared by the assessee in the registered authorities and value declared by the assessee in the registered authorities and value declared by the assessee in the registered agreement, amounting to agreement, amounting to ₹1,61,91,000/- in assessment order dated ment order dated 23/12/2016, passed under se 23/12/2016, passed under section 143(3) of the Act. Before ction 143(3) of the Act. Before, the Ld. CIT(A) the assessee contested the addition made under section CIT(A) the assessee contested the addition made under section CIT(A) the assessee contested the addition made under section 56(2)(vii)(b) of the Act Act and also challenged the merit of the addition. nged the merit of the addition. It was submitted by the assessee that It was submitted by the assessee that there were a lot of there were a lot of unauthorized encroachment on the plot of land therefore market ed encroachment on the plot of land therefore market ed encroachment on the plot of land therefore market value of the plots was lower and value of the plots was lower and Ld. Departmental Valuation Officer Departmental Valuation Officer did not take those factors into did not take those factors into account while determining the f account while determining the fair market value of the three plots at market value of the three plots at ₹1,25,51,000/ 000/-. It was also reiterated before the Ld. CIT(A) to give credit of reiterated before the Ld. CIT(A) to give credit of ₹66 lakh paid in 66 lakh paid in cash by Sh Rajeev Patil to the seller. The Ld. CIT(A), after calling for cash by Sh Rajeev Patil to the seller. The Ld. CIT(A), after calling for cash by Sh Rajeev Patil to the seller. The Ld. CIT(A), after calling for the remand report from the Assessing Officer rejected the the remand report from the Assessing Officer rejected the the remand report from the Assessing Officer rejected the Ranjit Shivram Raut 5 ITA No. 1902/M/2020 contention of the assessee of n contention of the assessee of non-applicability of section 56(2)(vii)(b) applicability of section 56(2)(vii)(b) of the Act. The Ld. CIT(A) considered the fair market value of the . The Ld. CIT(A) considered the fair market value of the . The Ld. CIT(A) considered the fair market value of the plots determined by the plots determined by the Departmental Valuation Officer Departmental Valuation Officer (DVO) at ₹1,25,51,000/- and after subtracting the value of and after subtracting the value of ₹ ₹9 lakh declared by the assessee in the registered agreement, sustain in the registered agreement, sustain in the registered agreement, sustained the difference amount of ₹1,16,51,000/- as a addition u/s 56(2)(vii)(b) difference amount of as a addition u/s 56(2)(vii)(b) of the Act. The contention of giving credit of . The contention of giving credit of ₹66 lakhs while 66 lakhs while determining addition under section 56(2)(vii)(b) was also rejected by determining addition under section 56(2)(vii)(b) was also rejected by determining addition under section 56(2)(vii)(b) was also rejected by the Ld. CIT(A). Aggrieved, the assessee is in appeal before the A). Aggrieved, the assessee is in appeal before the A). Aggrieved, the assessee is in appeal before the Income-tax Appellate Tribunal (ITAT), raising the grounds as tax Appellate Tribunal (ITAT), raising the grounds as tax Appellate Tribunal (ITAT), raising the grounds as reproduced above.
Before us the assessee filed a paper book containing pages 1 Before us the assessee filed a paper book containing pages 1 Before us the assessee filed a paper book containing pages 1 to 205 inter alia, copy of submissions filed before the Ld. C , copy of submissions filed before the Ld. CIT(A), , copy of submissions filed before the Ld. C copy of remand report, copy of purchase deed etc. copy of remand report, copy of purchase deed etc.
We have heard rival submission have heard rival submissions of the parties on the issue in of the parties on the issue in dispute and perused the relevant material on record. dispute and perused the relevant material on record. dispute and perused the relevant material on record.
Ranjit Shivram Raut 6 ITA No. 1902/M/2020 4.1 In ground No. 1 In ground No. 1, the assessee has challenged applicability of , the assessee has challenged applicability of section 56(2)(vii)(b) of the Act, claiming that provision is not , claiming that provision is not applicable because the three slum occupied applicable because the three slum occupied Non-agriculture agriculture (NA) plots were purchase plots were purchased for the purpose of subsequent sale and purpose of subsequent sale and therefore such plots were held as were held as stock in trade and section 56(2) is stock in trade and section 56(2) is applicable on capital asset only. applicable on capital asset only. The section 56(2)(vii)(b) refers to The section 56(2)(vii)(b) refers to deeming the difference of difference of stamp duty value of immovable property stamp duty value of immovable property and consideration paid/payable of and consideration paid/payable of any immovable property by any any immovable property by any individual or Hindu individual or Hindu Undivided Family (HUF) as income where as income wherever the stamp duty value of the property stamp duty value of the property exceeds ₹50,000/ 50,000/-. The term “property” has been further defined in explanation below the section “property” has been further defined in explanation below the section “property” has been further defined in explanation below the section 56(2)(vii)(b) of the Act Act, which reads as under:
“Explanation.- For the purpose o For the purpose of this clause- (a)
(b)
(c)
Ranjit Shivram Raut 7 ITA No. 1902/M/2020 (d) “property” means the following capital asset of the assessee, “property” means the following capital asset of the assessee, “property” means the following capital asset of the assessee, namely :-
(i) immovable property being land or building or both; (i) immovable property being land or building or both; (i) immovable property being land or building or both; (ii) to (ix) ……………………………………………” (ii) to (ix) ……………………………………………”
4.2 Thus, according to the provisions of the according to the provisions of the Act Act the section 56(2)(vii)(b) is applicable where the property is capital asset in the 56(2)(vii)(b) is applicable where the property is capital asset in the 56(2)(vii)(b) is applicable where the property is capital asset in the hand of the recipient. hand of the recipient. The explanatory notes to the provisions of the e provisions of the Finance Act, 2010 issued by the CBDT by way of circular No. , 2010 issued by the CBDT by way of circular No. , 2010 issued by the CBDT by way of circular No. 01/2011 also explained “property” for the 01/2011 also explained “property” for the purpose of the section purpose of the section 56(2)(vii)(b) of the Act Act should be in the nature of capital asset in the should be in the nature of capital asset in the hands of the recipient. The relevant part of the hands of the recipient. The relevant part of the Circular Circular (supra) is reproduced as under : reproduced as under :
“13.4 The provisions of section 56(2) (vii) were introduced as a The provisions of section 56(2) (vii) were introduced as a The provisions of section 56(2) (vii) were introduced as a counter evasion mechanism to prevent laundering of unaccounted ter evasion mechanism to prevent laundering of unaccounted ter evasion mechanism to prevent laundering of unaccounted income. The provisions were intended to extend the tax net to such income. The provisions were intended to extend the tax net to such income. The provisions were intended to extend the tax net to such transactions in kind. The intent is not to tax the transactions transactions in kind. The intent is not to tax the transactions transactions in kind. The intent is not to tax the transactions entered into in the normal course of business or trade, the profit entered into in the normal course of business or trade, the profit entered into in the normal course of business or trade, the profits of which are taxable under specific head of income. Therefore. the which are taxable under specific head of income. Therefore. the which are taxable under specific head of income. Therefore. the definition of property has been amended to provide that section definition of property has been amended to provide that section definition of property has been amended to provide that section 56(2vii) will have application to the property' which is in the nature 56(2vii) will have application to the property' which is in the nature 56(2vii) will have application to the property' which is in the nature
Ranjit Shivram Raut 8 ITA No. 1902/M/2020 of a capital asset of the recipient and therefore wo of a capital asset of the recipient and therefore would not apply to uld not apply to stock-in-trade, raw material and consumable stores of any business trade, raw material and consumable stores of any business trade, raw material and consumable stores of any business of such recipient. of such recipient.” 4.3 The Ld. CIT(A) has also concurred The Ld. CIT(A) has also concurred with the contention of the the contention of the assessee that provision of section 56(2)(vii)(b) of the Act are assessee that provision of section 56(2)(vii)(b) of the assessee that provision of section 56(2)(vii)(b) of the applicable on transfer applicable on transfer of property being capital asset in the hand of of property being capital asset in the hand of the recipient, however, the Ld. CIT(A) the recipient, however, the Ld. CIT(A) rejected the contention of the rejected the contention of the assessee that the 3 NA plots received by the assessee the 3 NA plots received by the assessee were stock in the 3 NA plots received by the assessee trade and thus upheld the action of Assessing Officer and thus upheld the action of Assessing Officer of property and thus upheld the action of Assessing Officer being capital asset in the hands of the assessee g capital asset in the hands of the assessee.
4.4 Before us, though the assessee contested that plots were Before us, though the assessee contested that plots were Before us, though the assessee contested that plots were purchased for further sale to Sh Rajeev Y purchased for further sale to Sh Rajeev Y Patil, and therefore same , and therefore same were stock in trade in the hands of stock in trade in the hands of the assessee. The facts of the the assessee. The facts of the case of the assessee ssessee, shows that prior to this transaction of shows that prior to this transaction of purchase, he was never engaged in trading of plots of land. This purchase, he was never engaged in trading of plots of land. purchase, he was never engaged in trading of plots of land. was an isolated transaction of purchase ted transaction of purchase. Whether any transaction Whether any transaction of sale (purchase) will fall under the head will fall under the head ‘profit and gains profit and gains’ of the business of profession or under the business of profession or under the head ‘capital gain capital gain’, depends on overall appreciation of overall appreciation of multiple factors including intention multiple factors including intention of Ranjit Shivram Raut 9 ITA No. 1902/M/2020 holding, frequency of transactions, volume of transactions, , frequency of transactions, volume of transactions, , frequency of transactions, volume of transactions, treatment in books of accounts treatment in books of accounts etc. The Hon’ble Supreme etc. The Hon’ble Supreme Court in the case of CIT (Central), Calcutta v. Associated Industrial CIT (Central), Calcutta v. Associated Industrial CIT (Central), Calcutta v. Associated Industrial Development Company (P) Ltd. (82 ITR 586) observed that Development Company (P) Ltd. (82 ITR 586) Development Company (P) Ltd. (82 ITR 586) whether a particular holding of shares is by way of investment or whether a particular holding of shares is by way of investment or whether a particular holding of shares is by way of investment or forms part of the stock forms part of the stock-in-trade, is a matter within the knowle trade, is a matter within the knowledge of the assessee, when holds the share and it should, in normal the assessee, when holds the share and it should, in normal the assessee, when holds the share and it should, in normal circumstances, be in position to produce evidence from its record as circumstances, be in position to produce evidence from its record as circumstances, be in position to produce evidence from its record as to whether it has maintained any distinction between those shares to whether it has maintained any distinction between those shares to whether it has maintained any distinction between those shares which are its stock- -in-trade and those which are held trade and those which are held by way of investment. The assessee has not demonstrated before us that The assessee has not demonstrated before us that The assessee has not demonstrated before us that whether he fulfils the criteria for treating the purchase of three fulfils the criteria for treating the purchase of three fulfils the criteria for treating the purchase of three plots as a stock in trade of his business. Merely presumption by the plots as a stock in trade of his business. Merely presumption by the plots as a stock in trade of his business. Merely presumption by the assessee that those three plots were assessee that those three plots were intended for further sale and further sale and therefore those were therefore those were stock in trade, is not sufficient and it has is not sufficient and it has to be proved by way of evidences, which the assessee has failed, proved by way of evidences, which the assessee has failed, proved by way of evidences, which the assessee has failed, therefore, we do not find any error in the order of the Ld. CIT(A) on therefore, we do not find any error in the order of the Ld. CIT(A) on therefore, we do not find any error in the order of the Ld. CIT(A) on the issue in dispute the issue in dispute in upholding the applicability bility of section Ranjit Shivram Raut 10 ITA No. 1902/M/2020 56(2)(vii)(b) of the Act in the case of the assessee 56(2)(vii)(b) of the Act in the case of the assessee. Accordingly, we . Accordingly, we dismiss the ground No. dismiss the ground No. 1 of the appeal of the assessee. of the appeal of the assessee.
The Ground No. No. 2 in respect of challenge to valuation report of in respect of challenge to valuation report of Departmental Valuation Officer Departmental Valuation Officer.
Brief facts qua the issue in dispute are that the Assessing ief facts qua the issue in dispute are that the Assessing ief facts qua the issue in dispute are that the Assessing Officer referred the valuation of the plots purchased to the Officer referred the valuation of the plots purchase Officer referred the valuation of the plots purchase Departmental Valuation Officer Departmental Valuation Officer, who valued the properties , who valued the properties vide order dated 31/10/2017, as under: order dated 31/10/2017, as under:
Sr. Date of F.Y. Description Description of of the the Name of Amount Market Value No. Transaction/ property property (i.e. (i.e. land land at at the Paid as per Value as determined by Registration Navghar) Navghar) Vendor agreement per Valuation No. (₹) stamp Officer, Thane valuation authoritie s 1. 21.01.2014 2013-14 S. No. 17A/4, plot S. No. 17A/4, plot No. 34, M/s Maa 3,00,000/- 56,97,00 41,70,000/- 440/2014 Area 392.89 sq. Area 392.89 sq. Mtrs. Mtrs. United 0/- (1/3 (1/3rd share) 2. 28.01.2014 2013-14 S. No. 17A/4, S. No. 17A/4, S. 17B, S. M/s Maa 3,00,000/- 56,97,00 41,70,000/- 618/2014 No. 17A/5 No. 17A/5 plot No. 34, United 0/- Area 392.89 sq. Area 392.89 sq. Mtrs. Mtrs. (1/3 (1/3rd share) 3. 04.02.2014 2013-14 S. No. 17A/4, S. No. 17A/4, S. 17B, S. M/s Maa 3,00,000/- 56,97,00 41,70,000/- 784/2014 No. 17A/5 No. 17A/5 plot No. 34, United 0/- Area 392.89 sq. Area 392.89 sq. Mtrs. Mtrs. (1/3 (1/3rd share) Total 1,25,10,000/- 6.1 The assessee filed copy of valuation report by registered valuer assessee filed copy of valuation report by registered valuer assessee filed copy of valuation report by registered valuer M/s Apte associates, Virar (a copy of which has been placed on M/s Apte associates, Virar (a copy of which has been placed on M/s Apte associates, Virar (a copy of which has been placed on paper book page 183 to 199. The Ld. CIT(A) adopted the value of the paper book page 183 to 199. The Ld. CIT(A) adopted the value of the paper book page 183 to 199. The Ld. CIT(A) adopted the value of the property for the purpose of section 56(2)(vii)(b) as determined by the property for the purpose of section 56(2)(vii)(b) as determined property for the purpose of section 56(2)(vii)(b) as determined
Ranjit Shivram Raut 11 ITA No. 1902/M/2020 departmental valuer as against the stamp duty value adopted by departmental valuer as against the stamp duty value adopted by departmental valuer as against the stamp duty value adopted by the Assessing Officer and reduced the amount of addition the Assessing Officer and reduced the amount of addition the Assessing Officer and reduced the amount of addition accordingly.
Before us the Ld. counsel Ld. counsel of the assessee assailed that the sale of the assessee assailed that the sale instances relied upon by the instances relied upon by the Ld. Departmental V Departmental Valuer for determining the fair market value of plots the fair market value of plots are not correct, are not correct, in view of following:
(a) the plot in reference were encroached by slum dwellers and the plot in reference were encroached by slum dwellers and the plot in reference were encroached by slum dwellers and unauthorized ‘ unauthorized ‘chawls’ ( hutments) were constr ( hutments) were constructed on the land including a “ land including a “Sulabh Toilet” and for vacati Sulabh Toilet” and for vacating of those unauthorised encroacher and demolishing the illegal unauthorised encroacher and demolishing the illegal unauthorised encroacher and demolishing the illegal construction of ‘chawls’, the assessee would be required to construction of ‘chawls’, the assessee would be required to construction of ‘chawls’, the assessee would be required to incur substantial expenditure, and therefore valuation incur substantial expenditure, and therefore valuation incur substantial expenditure, and therefore valuation based on sale instances based on sale instances are not comparable with the lands are not comparable with the lands acquired by the ass acquired by the assessee. (b) The concerned plots had incumb The concerned plots had incumberance of one erance of one ‘Juhi Vikas Vartak’, whose n , whose name is recorded in the column ‘ ame is recorded in the column ‘other rights’ of the 7/12 extracts, which forms part of the registered of the 7/12 extracts, which forms part of the registered of the 7/12 extracts, which forms part of the registered
Ranjit Shivram Raut 12 ITA No. 1902/M/2020 purchase agreement, but the purchase agreement, but the Departmental Valuation Departmental Valuation Officer did not take into consideration this did not take into consideration this incumb incumberance of the property. the property. (c) The stamp duty ready recknor rates does not denote the The stamp duty ready recknor rates does not denote the The stamp duty ready recknor rates does not denote the correct market value of the area because the ready recknor correct market value of the area because the ready recknor correct market value of the area because the ready recknor rates of the plots in reference have gone up more than twice rates of the plots in reference have gone up more than twice rates of the plots in reference have gone up more than twice from calendar from calendar year 2011 to 2014 whereas capital gain index year 2011 to 2014 whereas capital gain index has changed from 711 in 2011 to 939 in 2014. has changed from 711 in 2011 to 939 in 2014. has changed from 711 in 2011 to 939 in 2014.
7.1 The Ld. counsel Ld. counsel of the assessee submitted that the assessee of the assessee submitted that the assessee contested the valuation report of the contested the valuation report of the Departmental Valuation Departmental Valuation Report before the Ld. CIT(A) but he did before the Ld. CIT(A) but he did not any cognizance to those cognizance to those submission of the assessee. submission of the assessee.
7.2 Before us the assessee has filed an application dated Before us the assessee has filed an application dated Before us the assessee has filed an application dated 06/09/2022 for admitting following documents as additional 06/09/2022 for admitting following documents as additional 06/09/2022 for admitting following documents as additional evidences, to show the existence of unauthoriz show the existence of unauthorized encroachment on ed encroachment on the plot of the land: i. Photography of the plots (4) showing construction of Photography of the plots (4) showing construction of Photography of the plots (4) showing construction of unauthorised chawls on the plots. unauthorised chawls on the plots.
Ranjit Shivram Raut 13 ITA No. 1902/M/2020 ii. Colour print of Google Map (1) showing existence of structures Colour print of Google Map (1) showing existence of structures Colour print of Google Map (1) showing existence of structures on the plots. on the plots. iii. Response letter dt 25.08.2022 from appropriate authority of Response letter dt 25.08.2022 from appropriate authority of Response letter dt 25.08.2022 from appropriate authority of Vasai Vasai - Virar Municipal Corporation, stating that the chawl Corporation, stating that the chawl constructed on the concerned plots is unauthorised. Copies of constructed on the concerned plots is unauthorised. Copies of constructed on the concerned plots is unauthorised. Copies of application and response to information sought under the application and response to information sought under the application and response to information sought under the Right to Information Act, 2005 in Marathi and its English Right to Information Act, 2005 in Marathi and its English Right to Information Act, 2005 in Marathi and its English Translation thereof are submitted at pg. no Translation thereof are submitted at pg. no's 206 to 209. 's 206 to 209.
7.3 The Ld. counsel Ld. counsel submitted that above evidences submitted that above evidences could be gathered only after completion of the assessment er completion of the assessment er completion of the assessment/appellate proceedings and therefore could not be placed before the lower proceedings and therefore could not be placed before the proceedings and therefore could not be placed before the authorities.
The Ld. DR on the other hand objected to t on the other hand objected to the arguments of the he arguments of the Ld. counsel of the assessee on the ground that no such objections of the assessee on the ground that no such objections of the assessee on the ground that no such objections were raised before the were raised before the Ld. Departmental Valuer during valuation during valuation proceedings. He also referred to the relevant part of purchase deed proceedings. He also referred to the relevant part of purchase deed proceedings. He also referred to the relevant part of purchase deed (PB-117) where description of the prop 117) where description of the property is mentioned and erty is mentioned and submitted that the land had been shown submitted that the land had been shown as without any as without any encumbrance. Therefore assessee should not be allowed . Therefore assessee should not be allowed . Therefore assessee should not be allowed to further delay adjudication on delay adjudication on the issue in dispute.
Ranjit Shivram Raut 14 ITA No. 1902/M/2020
We have heard rival submission of the party on the issue in We have heard rival submission of the party on the issue in We have heard rival submission of the party on the issue in dispute and perused the relevant material on record. On perusal of dispute and perused the relevant material on record. On perusal dispute and perused the relevant material on record. On perusal Departmental Valuation Report Departmental Valuation Report, a copy of which is placed on paper , a copy of which is placed on paper book pages 177 to 182, we find that book pages 177 to 182, we find that Ld. DVO has taken into consideration the fact of encroachment and construction of Sulabh ideration the fact of encroachment and construction of Sulabh ideration the fact of encroachment and construction of Sulabh toilet on the land, which is evident from specifications of the toilet on the land, which is evident from specifications of the toilet on the land, which is evident from specifications of the property under description, which reads as under: property under description, which reads as under:
“3.3. Specification All the three properties are situated at Mauje All the three properties are situated at Mauje- Navghar. Dist. Palghar about 3KM away from Vasai Road Railway t. Palghar about 3KM away from Vasai Road Railway station. Chawls are constructed on the entire plot. There station. Chawls are constructed on the entire plot. There is no boundary wall defining the actual position of the is no boundary wall defining the actual position of the subject property. The subject property is surrounded by subject property. The subject property is surrounded by Flats and Buildings i.e. Eastern side by Vartak College e by Vartak College and Andy Burger building. Western side by Vartak and Andy Burger building. Western side by Vartak Engineering College. Northern side by Sulabh toilet etc. Engineering College. Northern side by Sulabh toilet etc. and Southern side by Engineering College road. All and Southern side by Engineering College road. All requisite amenities are available in the vicinity of the requisite amenities are available in the vicinity of the subject property and is located in developed location. s located in developed location.”
9.1 The Ld. Departmental Valuer Departmental Valuer has relied on for instances of has relied on for instances of the sale happened in the proximate period, but there is no remark, sale happened in the proximate period, but there is no remark, sale happened in the proximate period, but there is no remark, whether those lands were also subjected to encroachment. If those whether those lands were also subjected to encroachment. If those whether those lands were also subjected to encroachment. If those lands were not subjected lands were not subjected to encroachment, then he is required to to encroachment, then he is required to Ranjit Shivram Raut 15 ITA No. 1902/M/2020 consider impact of adverse possession by the encroacher on the consider impact of adverse possession by the encroacher consider impact of adverse possession by the encroacher land of the assessee land of the assessee and corresponding impact on the value of the and corresponding impact on the value of the property. During the course of the hearing, the Ld. DR also property. During the course of the hearing, the property. During the course of the hearing, the expressed his inability expressed his inability to verify or confirm this fact readily. In the verify or confirm this fact readily. In the circumstances, we feel it appropriate to restore this issue back to circumstances, we feel it appropriate to restore this issue back to circumstances, we feel it appropriate to restore this issue back to the file of the Ld. Assessing Officer for verification from the Assessing Officer for verification from the Ld. Assessing Officer for verification from the Departmental Valuation Officer Departmental Valuation Officer and consider the impact of and consider the impact of encroachment on t encroachment on the land, if not already considered in the he land, if not already considered in the valuation report dated 31/10/2017. The ground of the appeal of the valuation report dated 31/10/2017. The ground of the appeal of the valuation report dated 31/10/2017. The ground of the appeal of the assessee is accordingly allowed for the statistical purposes. accordingly allowed for the statistical purposes. accordingly allowed for the statistical purposes.
The Ground No. No. 3 relates to considering amount of relates to considering amount of ₹ 66 lakh as paid in cash by Sh Rajeev Y Patil towards the consideration for s paid in cash by Sh Rajeev Y Patil towards the consideration for s paid in cash by Sh Rajeev Y Patil towards the consideration for purchase of property. purchase of property.
The Ld. counsel Ld. counsel submitted that the assessee purchased those submitted that the assessee purchased those three plots for recorded consideration of three plots for recorded consideration of ₹9 lakh excluding excluding stamp duty and registration charges duty and registration charges, out of funds directly received from funds directly received from one Mr. Rajeev Y Patil. He submitted that during the course of Rajeev Y Patil. He submitted that during the course of Rajeev Y Patil. He submitted that during the course of search action under section 132 of the action under section 132 of the Act at the premises of Mr at the premises of Mr.
Ranjit Shivram Raut 16 ITA No. 1902/M/2020 Rajeev Y Patil, it was , it was revealed that apart from ₹ 3.50 .50 lakhs per plot by cheque, he paid ₹ ₹22 lakh in cash for purchase of each plot of in cash for purchase of each plot of land. He submitted that evidences in this regard were vouchers of land. He submitted that evidences in this regard were vouchers of land. He submitted that evidences in this regard were vouchers of ₹22 lakh each plot, which have , which have been seized from the premises of Sh been seized from the premises of Sh Rajeev Y Patil along along along with with with relevant relevant relevant purchase purchase purchase agreements. agreements. agreements. Accordingly, the Ld. counsel Ld. counsel submitted that total consideration submitted that total consideration towards plots of the land should be taken towards plots of the land should be taken at ₹76,43,800/ 800/- as under:
NA Plots acquired from M/s Maa United NA Plots acquired from M/s Maa United ₹10,43,800/ (i) Agreement Value as well as stamp Agreement Value as well as stamp 10,43,800/- duty and registration charges for 3 duty and registration charges for 3 plots (ii) Amount paid in Amount paid in cash ₹66,00,000/ 66,00,000/- Total ₹76,43,800/ 76,43,800/- 12. We find that the Ld. CIT(A) rejected the similar contention of find that the Ld. CIT(A) rejected the similar contention of find that the Ld. CIT(A) rejected the similar contention of the assessee before him observing as under: the assessee before him observing as under:
“9.1 I have perused the facts of the case. I find that the appellant is asking 9.1 I have perused the facts of the case. I find that the appellant is asking 9.1 I have perused the facts of the case. I find that the appellant is asking for payment of cash of for payment of cash of Rs.66 lacs by one Shri Rajeev Patil to the seller of Rs.66 lacs by one Shri Rajeev Patil to the seller of the land. However, there is no specific documentary evidence to the land. However, there is no specific documentary evidence to the land. However, there is no specific documentary evidence to authenticate contention that the cash paid by Shri Rajeev Patil is for and authenticate contention that the cash paid by Shri Rajeev Patil is for and authenticate contention that the cash paid by Shri Rajeev Patil is for and on behalf of the appellant. In appellate proceedings, nothing has been on behalf of the appellant. In appellate proceedings, nothing ha on behalf of the appellant. In appellate proceedings, nothing ha brought on record to establish that cash has been paid on behalf of the brought on record to establish that cash has been paid on behalf of the brought on record to establish that cash has been paid on behalf of the appellant. Therefore, this contention of the appellant deserves to be appellant. Therefore, this contention of the appellant deserves to be appellant. Therefore, this contention of the appellant deserves to be rejected. The Third Ground of Appeal is therefore dismissed. rejected. The Third Ground of Appeal is therefore dismissed.” ”
Ranjit Shivram Raut 17 ITA No. 1902/M/2020
Before us also the us also the Ld. counsel of the ass of the assessee failed to substantiate whether those payment substantiate whether those payments made by Rajeev Y made by Rajeev Y Patil have been made to the seller of the land been made to the seller of the land on behalf of the assessee. The on behalf of the assessee. The assessee did not produce Mr Rajeev Y assessee did not produce Mr Rajeev Y Patil or the seller of the land or the seller of the land before the lower authorities before the lower authorities to support his contention that those his contention that those cash amounts were were paid on behalf of the assessee paid on behalf of the assessee. In such circumstances, we do not find any error in the order of the Ld. circumstances, we do not find any error in the order of the Ld. circumstances, we do not find any error in the order of the Ld. CIT(A) on the issue in dispute and accordingly CIT(A) on the issue in dispute and accordingly, we uphold the same. we uphold the same. The Ground of the appeal of the assessee of the appeal of the assessee is accordingly dismissed. accordingly dismissed.
In the result, the appeal of the assessee is partly allowed for In the result, the appeal of the assessee is partly allowed for In the result, the appeal of the assessee is partly allowed for the statistical purposes. the statistical purposes.
Order pronounced in the open ounced in the open Court in 16/1 /11/2022. Sd/- Sd/- Sd/ (AMIT SHUKLA AMIT SHUKLA) (OM PRAKASH KANT OM PRAKASH KANT) JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER Mumbai; Dated:16/11/2022 Dragon Legal/Rahul Sharma, Sr. P.S. Rahul Sharma, Sr. P.S. Copy of the Order forwarded to Copy of the Order forwarded to :
1. 1. The Appellant 2. The Respondent. 3. The CIT(A)- Ranjit Shivram Raut 18 ITA No. 1902/M/2020