G.SHANMUGANATHAN,COIMBATORE vs. DCIT, COIMBATORE

आयकर अपीलीय अिधकरण, ’सी’ �ायपीठ, चे�ई IN THE INCOME-TAX APPELLATE TRIBUNAL ‘C’ BENCH, CHENNAI �ी वी दुगा� राव �ाियक सद� एवं �ी जी. मंजुनाथा, लेखा सद� के सम� Before Shri V. Durga Rao, Judicial Member & Shri G. Manjunatha, Accountant Member आयकर अपील सं./I.T.A. No. 2273/Chny/2015 िनधा�रण वष�/Assessment Year:2007-08 Shri G. Shanmuganathan, The Deputy Commissioner of C/o S. Ramachandran, B. Com, FCA, Vs. Income Tax, Chartered Accountant, “Sethuram” Central Circle I, No. 15, Sundaresa Iyer Layout, Trichy Coimbatore. Road, Coimbatore 641 018. [PAN:AQEPS4036J] (अपीलाथ�/Appellant) (��थ�/Respondent) अपीलाथ� की ओर से / Appellant by : Shri S. Ramachandran, C.A. ��थ� की ओर से/Respondent by : Shri P. Sajit Kumar, JCIT सुनवाई की तारीख/ Date of hearing : 22.06.2022 घोषणा की तारीख /Date of Pronouncement : 15.07.2022 आदेश /O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: This appeal filed by the assessee is directed against the order of the ld. Commissioner of Income Tax (Appeals) 18, Chennai, dated 15.10.2015 relevant to the assessment year 2007-08.

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premises of the assessee at No.7/8, Palghat Main Road, Kuniamuthur, Coimbatore 641 008 on 31.07.2008. Based on the information at the time of survey, the Assessing Officer initiated proceedings under section 147 of the Act and issued notice under section 148 of the Act dated 25.08.2011. The assessee had originally filed the return of income for this assessment year on 21.11.2008 admitting income of ₹.85,84,920/-. In response to the notice under section 148 of the Act, the assessee filed another return of income on 04.11.2011 admitting the same total income of ₹.85,84,920/-.

2.1 During the course of reassessment proceedings, the Assessing Officer noticed that the cost of purchase for the portion of the land belonging to the assessee was taken only at ₹.24,37,400/-, whereas, the total purchase price of 50.26 acres comes to ₹.2,99,91,600/- and the share of cost for 16.075 acres (including the Martin Land) as per the impounded document was ₹.1,15,29,000/-. Since the purchase price of ₹.5.40 lakhs per acre paid by other parties was supported by the impounded material, the assessee’s share of total consideration comes to ₹.1,15,29,000/- excluding the registration and stamp duty, the Assessing Officer asked the assessee to file his objections to the

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proposed adoption of cost to be computed at ₹.90,91,600 (1,15,29,000 – 24,37,400) and to brought to tax under section 69 of the Act. After analysing the detailed objections of the assessee, the Assessing Officer has taken the assessee’s share of cost for 16.075 acres (including the Martin Land i.e., 4.21+3.34+6.91+1.61) as per the impounded document at ₹.1,15,29,000/- and after deducting the disclosed cost of ₹.24,37,400/- + incidental expenses of ₹.1,51,990/-, the balance amount of ₹.89,39,619/- being the investment in purchase of land not fully disclosed in the books of account has been computed to tax under section 69B of the Act. On appeal, after considering the submissions of the assessee, the ld. CIT(A) has observed as under: “5.6 If this theory is accepted how this appellant pays less than others to the seller. Even then the consideration ought to have been paid by this appellant should not be less than the amount his friends paid to the seller per acre. Hence, I direct the AO to adopt Rs.5.4 lacs per acre which will meet the end of justice. Accordingly, the grounds raised in this regard are partly allowed.” 3. On being aggrieved, the assessee is in appeal before the Tribunal and raised the following grounds: 1) The Order of the learned CIT(A), is unsustainable both in law and on facts of the case. 2) The learned CIT(A) has erred in not deleting the entire addition of Rs.89,39,610/- made by the learned AO u/s 69B and granting a relief of only Rs.28,45,800/- against the said addition.

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3) The learned CIT(A) ought to have appreciated the addition made by the learned AO was only based on an incomplete excel statement which was in the process of preparation on a Cut, Copy, Past mode, taken as a print out from the computer of the Assessee, when the staff of the Assessee was actually working on the statement and hence should not be relied upon and has no evidentiary value. 4) The learned CIT (A) ought to have accepted that there is no material or convincing corroborative evidence to think that the Appellant might have invested a higher amount than that admitted by him. 5) The learned CIT(A) ought to have considered and appreciated the fact placed before him that in many other investments in Land during the year and in the earlier years the Appellant has recorded in his books much higher value than that was known to the Department with various materials that they had impounded/seized, which goes to prove that the Appellant has recorded the true consideration in each transaction.. 6) The learned CIT(A) failed to pass an order against the contention that under the Survey u/s 133A, conducted on 31-7-2008, in the Residence of the Assessee was void ab-initio and hence the Assessment order is Null and Void. For these and other grounds that may be adduced at the time of hearing, it is humbly submitted that the order of the learned DCIT is against law, equity, facts, the Principles of Natural Justice and weight of evidence adduced and it is prayed that the addition of Rs.60,91,110/-, resulting out of the order the learned CIT(A), to the Returned Income be deleted.” 4. Against the above grounds raised by the assessee, the Tribunal has taken up the jurisdiction issue raised in ground No. 6 for adjudication and vide order dated 04.05.2016 in I.T.A. No. 2273/Mds/2015 and remitted the matter back to the file of the ld. CIT(A) for adjudication as the ld. CIT(A) has not given any findings/order in respect of the above ground.

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recalled as per the Miscellaneous Petition of the assessee and vide order dated 10.05.2019 in M.P. No. 61/Chny/2019 only for the purpose of adjudicating ground Nos. 1 to 5 as raised in the appeal filed by the assessee and posted the appeal for hearing.

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assessee nor the ld. DR could produce any order of the ld. CIT(A) passed under section 250(6) r.w. section 254 of the Act with regard to the ground No. 6 raised by the assessee. Without prejudice to any findings given upon the jurisdiction issue by the ld. CIT(A), we proceed to adjudicate the issue of fixing the cost of purchase of land on merits.

8.1 There was a survey conducted under section 133A of the act, as has been confirmed by the Assessing Officer vide letter dated 05.12.2008, the Department has extended its arms to the residential premises of the assessee, without any provision. Upon the impounded materials from the residence of the assessee, the Assessing Officer completed the assessment under section 143(3) r.w.s. 147 of the Act dated 30.03.3013 by adopting the cost of purchase of land at ₹.1,15,29,000/- and computed the investment not fully disclosed in the books of accounts at ₹.89,39,610/- and brought to tax under section 69B of the Act by taking into account the loose sheets impounded from the residence of the assessee. On appeal, by considering the cost of the land purchased by four of assessee’s friends for a sale consideration of ₹.5.40 lakhs per acre, the ld. CIT(A) was of the opinion that the cost paid by the assessee should not be less than other friends

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paid to the seller. We are unable to accept the above concept of the ld. CIT(A). Admittedly, the ld. CIT(A) has not given any cognizance over the impounded materials from the residence of the assessee, which was the base for assessing the purchase consideration at ₹.1,15,29,000/- by the Assessing Officer by adopting per acre cost at ₹.5.40 lakhs. It is also an admitted fact that the Assessing Officer has failed to summon the seller under section 133(6) of the Act to verify the actual sale consideration received by him or verified seller’s return of income or recorded any statement of the seller.

8.2 On perusal of the orders of authorities below, the assessee has purchased for himself 16.075 acres of land and arranged four of his friends to purchase a large extent of 354.185 acres for a sale consideration of ₹.5.40 lakhs per acre, we are of the opinion that there is every possibility of getting much lesser price for assessee’s portion even book value. In the absence of any verification from the seller under section 133(6) of the Act as well as seller’s return of income and ignorance of impounded materials from the residence of the assessee by the ld. CIT(A) and also absence of referring to DVO for determining the FMV, we direct the Assessing Officer to adopt stamp duty value of

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the SRO as actual purchase consideration per acre. Thus, the ground raised by the assessee is allowed.

Sd/- Sd/- (G. MANJUNATHA) (V. DURGA RAO) ACCOUNTANT MEMBER JUDICIAL MEMBER Chennai, Dated, 15.07.2022 Vm/- आदेश की �ितिलिप अ�ेिषत/Copy to: 1. अपीलाथ�/Appellant, 2.��थ�/ Respondent, 3. आयकर आयु� (अपील)/CIT(A), 4. आयकर आयु�/CIT, 5. िवभागीय �ितिनिध/DR & 6. गाड� फाईल/GF.