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Income Tax Appellate Tribunal, “B” BENCH, AHMEDABAD
Before: SMT.ANNAPURNA GUPTA & SMT.SUCHITRA KAMBLE
O R D E R
PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER Present appeal has been filed by the assessee against order passed by the ld. Commissioner of Income-Tax(Appeals)-4, Ahmedabad [hereinafter referred to as “Ld.CIT(A) under section 250(6) of the Income Tax Act, 1961 ("the Act" for short) dated 31.10.2019 pertaining to the Asst.Year 2011-12.
The ground raised by the assessee in his appeal as under:
1. The Ld. C.I.T.(A) erred in law and on facts in confirming addition of Rs.2,43,272/- to the returned income of appellant by treating information contained in ITS as related to transaction of sale of immovable property of Rs.43,41,358/- without appreciating the facts and law of the case properly.
2 2. The Ld. CIT (A) erred in law holding that ITS information is pertaining to sales transaction without appreciating the facts that assessing officer has conceded in the remand report that he did not possess any documentary evidences except the ITS information with regard to the entry of ITS Rs.43,41,358/- 3. The appellant craves leave to add, amend or alter the aforesaid grounds of appeal at the time of hearing, if the need arise.
3. At the outset, ld.counsel for the assessee stated that addition confirmed by the ld.CIT(A) on account capital gain earned by the assessee on alleged sale of property during the impugned is grossly unjustified and against the facts of the case, and has been made despite repeated assertion of the assessee that the Individual Transaction Statement (ITS) information in the possession of the Revenue authority, on the basis of which addition was made, related to one and same transaction which was repeated twice in the statement. That therefore the interpretation of the Ld.CIT(A) in treating the two transactions reported in the ITS as distinct and pertaining to purchase and sale of the same property during the impugned year was grossly incorrect on facts.
4. Drawing our attention to the facts of the case, the ld.counsel for the assessee pointed out that as per ITS data in possession of the AO it was noticed that the assessee had purchased two immoveable properties during the year of Rs.73,41,358/- (Rs.30,00,000/- + Rs.43,41,358/-) .On being asked to justify the same the assessee had accepted investing in one property of Rs.30,00,000/- , admitting to his share in the same being to the extent of 20% only. The AO, noting that no source of investment was provided by the assessee, made addition of total investment made by the assessee in both the properties, accepting his claim of share in one being 20% ,resulting in total addition of Rs.49,41,358/-(20% of Rs.30,00,000/- and Rs.43,41,358/-).
5. Before the ld.CIT(A), the assessee reiterated his contention, but the ld.CIT(A) applied his own logic and held that the second transaction related to sale of same plot number, and accordingly, brought to tax the capital again allegedly earned by the assessee on the said transaction computed to be Rs.2,43,272/-. Our attention was drawn to para 4.1& 4.2 of the CIT(A) in this regard as under:
4.1 The ground no.2 of appeal is relating to addition of Rs.49,41,358/-u/s. 69 of the IT act 1961. The AO has made addition on account of two different properties i.e. Rs.6,00,000/- and Rs.43,41,358/- respectively. The appellant filed an affidavit during appellate proceeding saying that there was only one property which was purchased and her share was 20% at Rs.6,00,000/-. A copy of saving bank account no.002110100055940 has been filed to show that the investment of Rs.6,00,000/- is properly explained(page no.39-41/PB). A copy of return of income filed for concerned assessment year 2010-11 by Shri Haresh Ramniklal Bhansali(42-48/PB) and enclosures to explain the source of investment. The return of income has been filed in the year 2011. In view of these independent evidences, it is felt that the investment of Rs.6,00,000/- is explained. The addition of Rs.6,00,000/- made by the AO is hereby deleted. The another contention raised by the appellant was that this are same transactions for same property. The ITO was specifically asked to verify this contention as per letter dated 03.09.2019.
Sub: Remand Report u/s. 250(4) in the case of Shri Rasilaben H. Bhansali, Appeal No.CIT(A)-4/10514/2018- 19 A.Y. 2011-12, - Additional Evidences-- regarding Please refer to the above.
2. The assessment in this case has been completed u/s.143(3) r.w.s.147 of I.T. Act,1961. The appellant has submitted affidavit during assessment proceedings(para 5) saying that there was no transaction of property for Rs.43,41,358/-. The AO has not discharged onus by verifying the contention raised in the said affidavit.
You are directed to send evidences of investment/sale for which addition of Rs.43,41,358/- has been made within 15 days from receipt of this letter.” “4.2 Consequently, the AO has forwarded remand report and the cc-are reproduced as under: "During the course of assessment proceedings, notice u/s.133(6) was issued to the Sub- Registrar, Ahmedabad on 23/10/2010. Subsequently, a reminder was also issued on 29/11/2018. However, the information has not been received from the Sub-Registrar: The assessee was also requested to furnish the copy of registration document respect of purchase and sale of immovable properties as mentioned above. However the assessee has furnished only the copy of the purchase deed. The value of purchase of the property in the said purchase deed has been shown at Rs.30,00,000/-. On verification, it is seen that the copy of purchase deed furnished by the assessee does not contain the stamp of Sub-Registrar Office. Further, the slip of payment of registration fee has also not been furnished. In respect of sale of property, the assessee has not furnished the copy of sale deed or any other details.
In view of above facts and circumstances, the A.O. has disallowed 20% of Rs.30,00,000/- i.e. the total purchase consideration of the property and the entire sale proceeds of the property i.e. Rs.49,41,358/-." There has been lack of explanation and evidence but it has been admitted that the purchase of Rs.6,00,OOO/- is properly vouched and nothing is unexplained. I have examined a copy of e-proceedings(pp-7-8/PB) wherein sale deed of Rs.43,41,358/- has been mentioned. The appellant's contention that the plot no. such as 2270 is same at both places hence it is one transaction is not accepted. The fact remains that the appellant along with other four persons invested in property wherein Rs.6,00,000/- investment has been explained. However, further it is gathered that the sale of the same property has been claimed at Rs.6,25,000/-. The appellant expressed her inability to provide any further documentary evidences. The AO has also not placed any additional document on record except a sheet of e-proceedings. Therefore, chaff has to be separated from grains as per best possible attempt to disburse justice in this case. Hence, it is concluded that the second document is actually pertaining to sale of same plot number and surprisingly different co-owners have signed the sale agreement on different dates. It is quite unusual as per registration procedure. There may be some mistakes in writing of dates of sale by the office of registrar. However, the second amount of Rs.43,41,358/- is relating to the sale wherein the appellant has 20% share. The purchase of Rs.30,00,000/- and the sale of Rs.43,41,358/- does make the information as logical. The appellant's share in the impugned asset was 20% of the total asset. As per sale price from the registered document, the 20% comes to Rs.8,68,272/-, therefore, the addition of Rs.2,43,272/-(Rs.8,68,272 - Rs.6,25,000/-) is hereby confirmed. The ground no.2 is partly allowed.”
Before us, the ld.counsel for the assessee reiterated his contention that the transaction reflected in the ITS statement was with respect to purchase of one property only, in which the assessee had 20% share and denied any other investment made during the year. The Ld.Counsel for the assessee contended that the assessee had repeatedly claimed to having made only one investment both before the AO and the Ld.CIT(A) and had submitted to have sold the said property in A.Y 2012-13 returning the capital gains earned thereon to tax in the said year.He contended that the Revenue was repeatedly requested to provide the basis for holding the assessee to have made the other investment but the Revenue had failed to provide any basis for the second transaction reported in the ITS and even inquiries conducted by the AO with the Sub- Registrars office had elicited no information, which even the AO had admitted to in his remand report.
In this regard, he first drew our attention to the AIR information with the Department filed at PB Page No.67 wherein first transaction entered by the assessee is reflected at transaction amount of Rs.30 lakhs, and transaction dated mentioned as 20.4.2010. He drew our attention to second transaction reflected therein mentioning the transaction amount of Rs.43,41,358/- and date of transaction as 29.7.2010.
Thereafter our attention was drawn to replies filed to the AO and the Ld.CIT(A) making averments to the effect that only one investment of Rs.30,00,000/- ,with assesses share therein of 20%, was made, substantiated with copy of purchase deed of the same and also affidavit of the assessee stating so on oath and asking for basis for holding assessee to have made the other investment also placed before us in Paper Book as under:
Replies filed during course of assessment proceedings along with its acknowledgement (Page No.1 to 10) 3. Affidavit of the appellant (Page No.17-18) 4. Conveyance deed dated 22.04.2010 executed for purchase of properties (Page Nos.19-35)
Our attention was also drawn to identical submissions made before the Ld.CIT(A) at P.B 53-60 and the remand report submitted by the AO placed at P.B 63 admitting to no information forthcoming from the Sub- Registrar’s Office of investments made by the assessee on inquiries conducted u/s 133(6) of the Act. Our
6 attention was further invited to the submissions made before the Ld.CIT(A) dated 17-10-2019 at P.B 68-71, in response to the remand report of the AO pointing out similarities in both the transaction details mentioned in the ITS as referring to the same registration No. of 2270 thus proving that both the transactions related to the same investment admitted to be made by the assessee .
Attention was invited to letter dated 17-10-2019 filed to the Ld.CIT(A) submitting complete set of registered document for purchase of property by the assessee along with other co-owners worth Rs.30,00,000/-
Reference was made to letter dated 24-10-2019 filed to the Ld.CIT(A) placed at P.B 102-119 submitting the fact of sale of the property so admittedly purchased by the assessee in the impugned year ,in A.Y 2012-13 and returning capital gain earned thereon to tax, substantiated with all evidences including copy of return of income of the assessee for A.Y 2012-13.
Ld.Counsel for the assessee also contended that the assessee had attempted giving its own explanation of the second transaction reflected in the ITS at Rs. 43,87,755/-,as relating to the same transaction of purchase of immoveable property for Rs.30,00,000/- pointing out that the said value represented the stamp duty value of the property so purchased worked out by applying the stamp duty rate applicable to the stamp duty actually paid by the assessee. Attention was drawn to the said explanation placed at P.B 130 .
Ld.Counsel for the assessee therefore stated that the assessee having purchased only one property, the source of which was explained to the Revenue authority, who had accepted the same also, there was no reason to make any addition to the income of the 7 assessee on account of any other alleged investment made by the assessee, that too without any material or basis.
The Ld.DR however relied on the order of the Ld.CIT(A).
We have heard contentions of the both the parties. The addition of Rs.2,43,272/- upheld by the Ld.CIT(A) in the present case is on account of alleged capital gains earned by the assessee on purchase and sale of immoveable property ,both of which transactions were divulged by the Revenue from the ITS data relating to the assessee.
We are not in agreement with the Ld.CIT(A) on this count. We find that the assessee had repeatedly admitted to having entered into in only one transaction of purchase of immoveable property of value Rs.30,00,000/- with her share in the same being 20%.The assessee had duly substantiated this investment with necessary documentary evidence by way of furnishing copy of purchase deed of the said property. The assessee’s explanation with regard to this investment was examined and duly accepted by the Revenue authorities as the source of investment in the same being explained. With respect to this transaction of Rs.30,00,000/- reported in the ITS of the assessee, the Revenue, we have noted, is satisfied with the assesses explanation of source of investment.
With respect to the other transaction reported in the ITS of value Rs.43,41,358/-,which the Ld.CIT(A) has interpreted to relate to sale of the property purchased by the assessee, we find that other than the ITS information the Revenue had no other basis for treating the said information so. Even inquiries conducted by the AO from the sub Registrars office revealed no information relating to this transaction. The assessee on the other hand we find repeatedly
8 asserted that the two transactions reported in the ITS were relating to one and same transaction of purchase of immoveable property for Rs.30,00,000/- . The other transaction being different has all along being denied by the assessee. In fact, we find ,that the Ld.CIT(A) ‘s inference that the second transaction related to sale of the immoveable property was also demonstrated by the assessee to be incorrect who had pointed out that the said property had in fact been sold in A.Y 2012-13 and not the impugned year ,and capital gains earned thereon by the assessee returned to tax. The explanation was substantiated with copy of return of income for A.Y 2012-13 reflecting capital gains therein. Also we find that the assessee had pointed out how the two transactions reflected in the ITS pertained to one transaction of purchase of immoveable property, pointing out the same registration no. mentioned against the two transactions in the ITS and also pointing out that based on the stamp duty paid by the assessee on the property purchased ,the value of the second transaction reflected the stamp duty value of the said transaction and hence the two transactions were nothing but one transaction reflected twice in the ITS.
We find that none of the above averments of the assessee have been dealt with by the Ld.CIT(A) while holding the second transaction to represent sale of immoveable property purchased by the assessee. The assesses contention duly substantiated that the property was sold in A.Y 2012-13 , has not been controverted by the Ld.CIT(A). Nor has the Ld.CIT(A) cared to even apply his mind to the similarities pointed out by the assessee in the two transactions reported in the ITS. The entire exercise of the Ld.CIT(A) in holding the second transaction reported in the ITS to reflecting sale of the property purchased appears to be totally adhoc,without any basis and per his own whims and fancies ,in total disregard of the assesses explanation.
We therefore agree with the Ld.Counsel for the assessee that there was no reason for treating the second transaction reported in the ITS of Rs.43,41,358/- as being distinct from the first transaction.
The addition made to the income of the assessee of Rs.2,43,272/- ,on account of capital gain earned by the assessee by treating the second transaction reported in the ITS as distinct from the first and being sale of property purchased, is accordingly directed to be deleted.
All the grounds raised by the assessee are allowed.
In effect appeal of the assessee is allowed. Order pronounced in the Court on 7th October, 2022 at Ahmedabad.