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Income Tax Appellate Tribunal, “SMC” BENCH : KOLKATA
Before: Hon’ble Shri J.Sudhakar Reddy, AM]
This appeal by the Assessee arises out of the order of the Learned Commissioner of Income Tax (Appeals)-XXX, Kolkata [ in short the ld CITA] dated 22.10.2013 against the order passed by the I.T.O, Ward-45(2), Hooghly [ in short the ld AO] under section 143(3)(ii)/147 of the Income Tax Act, 1961 (in short “the Act”) dated 30.12.2010 for the Assessment Year 2003-04.
After hearing contentions of both the parties, I find that the assessee has assigned all her rights in her house property which is situated at 379, Block-FE at Sector-III, Salt Lake City Extension area, in North 24 Parganas, District-West Bengal, to Smt. Sakuntala Devi Mall, 260, M.G. Road, Kolkata-07, by an agreement dated 15.04.2012 for consideration of Rs. 23 lacs. This agreement was executed on Rs. 100 stamp papers. The assessee received 2 lacs. earnest money by way of cheques. The balance consideration was given by way of three postdated cheques as mentioned in the
2 ITA No.308/Kol/2014 Smt. Sushma Tandon A.Yr.2003-04 agreement. The amount of Rs. 25,000/- was paid at the time of registration of the assignment documents.
The assessing officer came into possession of an agreement dt 27.02.2002, allegedly entered into by Shri Satish Kr. Tandon, husband of the assessee, as her constituted power of attorney, to sell the rights of this property, to Shri Jyoti Mohan Mall who is the son of Smt. Shakuntala Devi Mall. This agreement was for a higher figure. The AO took the difference between the two agreement as undisclosed sale consideration and added an amount of Rs. 23,51,000/- as long term capital gain in the hands of the assessee. The sale consideration mentioned in the agreement dated 27.02.2002 entered into by the husband was taken as the correct figure of considerations.
The assessee’s contention is that, she has not given any power of attorney to her husband, to act on her behalf and sell the property. Thus she submits that, an agreement entered by her husband allegedly on her behalf is void ab-initio and cannot be a basis for coming to a conclusion that, she has received unaccounted cash on the assignment of her rights in her property. The ld. Counsel for the assessee Mr. M.L. Rawat argued that an illegal document alleged to have been entered by her husband, without any authority whatsoever cannot be the basis for making the addition. Mr. Rawat further submits that the AO has not discharged the onus that lay on him, consequent to the assessee submiting that the said agreement is illegal and entered into without authority. He disputed the reliance placed by the AO as this alleged document entered into by the assessee’s husband and pointed out some defects in that document and submitted that the addition has to be deleted as no evidence whatsoever was available on record to come to a conclusion that excess consideration than what was mentioned in the agreement dated 15.04.2012 has been paid to the assessee. He prayed for relief.
The ld. DR relied on the order of the AO as well as the Ld. CIT(A). 2
3 ITA No.308/Kol/2014 Smt. Sushma Tandon A.Yr.2003-04
Rival contentions heard. On a careful consideration of the facts and circumstances of the case, a perusal of the papers on record, orders of the authorities below as well as case law cited, I hold as follows.
The Ld. CIT(A) has considered all the evidences and has at para 5.2 of his order held as follows: “The matter was remanded to the A.O. for his comments vide the letter of CIT(A)-XXX, Kolkata dated 07.05.2012. The A.O.'s report in response is dated 07.06.2012 and 24.07.2012. The Appellant, Sushma Tandon, was the owner of the property at FE-379, Salt Lake City, Sector-III, Kolkata-700 09. She entered into the -safe agreement with Shri Jyoti Mohan Mall, son of Shri Ram Kishan Mall. Thereafter in respect of the same property, the assessee entered into the another agreement with Smt. Shakuntala Devi Mall, wife of Shri Ram Kishan Mali, on 15.04.2002. Thus, in respect of the same property, two agreements were made, one dated 27.02.2002 is with Shri Jyoti Mohan Mall and the other dated 15.4.2002 is with -Smt. Shakuntala Devi Mall. Jyoti and Shakuntala are the members of the same family, former being son of Shri Ram Kishan Mall and the later being wife of Shri Ram Kishan Mall. The 1st payment in cheque of Rs.2,00,000/- was received by the Appellant from Smt. Shakuntala Devi Mall and Jyoti Mohan Mall [mother/son] the cheque was issued from the accounts of G.P. Traders (Pvt.) Ltd. and was signed by Shri Jyoti Mohan Mall, Director of G.P. Traders (Pvt.) Ltd. The Appellant claims that the agreement dated 27.02.2002 between the Appellant and Jyoti Mohan Mall (signed by Jyoti Mohan Mall and Satish Kr. Tandon) contains the signature of Satish Kr. Tandon who had no Power of Attorney granted by the Appellant, Sushma Tandon. Sushma Tandon is the wife of Satish Kr. Tandon and thus the Appellant is only raising technical objection whereas seized papers clearly indicate that in respect of the property sold, Sushma Tandon and her husband, Satish Kr. Tandon received cash/undisclosed amount of RS.26.51 lakhs. In the facts and circumstances of the case, it is immaterial whether Satish Kr. Tandon, husband of the Appellant, had proper Power of Attorney or not. Such Documents, even if it was there, can be produced only by the Appellant. The Appellant has failed to establish that there was no cash involved in the sale proceeds of the property at Salt Lake which was sold to Mall family. The two documents clearly establish that cash/undisclosed amounts were paid by Mall family to the Appellant's family. The point here is that the property was sold and the capital gain has to be computed on the said transfer taking into consideration the full value of the consideration of the property. These two documents clearly show that the sale value was not Rs. 23,00,000/- as claimed by the Appellant but it was actually Rs.49.51 lakhs as detailed in the two documents. It is interesting to note from the two documents that the cheque amount noted are identical, the first documents mentions the 3
4 ITA No.308/Kol/2014 Smt. Sushma Tandon A.Yr.2003-04 cash amounts but the second documents does not mention any cash amount. Thus the second document is for compliance purposes in other words for the department to show lower consideration of Rs.23,00,000/- but the first documents contains both the cash part and the cheque part. The cheque amounts noted as installments even in the first agreement has been adhered to in the second document and payment has also been made in cheque in those amounts. The first documents has been signed by Satish Kr. Tandon and Jyoti Mohan Mall and the second document has been signed by Sushma Tandon and Shakuntala Devi Mall. The plea of the Appellant is that the property deal as communicated in terms of the first document was cancelled as there was no buyer and the buyer, Shri Jyoti Mohan Mall, could not meet the terms of the agreement. Having cancelled the first deal, the Appellant claims to have entered into another deal in respect of the same property at Salt Lake with Shakuntala Devi Mall, who is the mother of Jyoti Mohan Malll. The Appellant claims that the second deal which has been detailed in the second agreement was finalized at Rs.23 lakhs of a sale consideration as there was no other buyer in the market and they had to sell it at much lower price than the first deal. The said claim of the Appellant is baseless and lacks any truth. Deal continues to be the same only the buyer's name has been changed. In place of son's name in the first agreement and mother's name has been introduced in the second agreement. Within two months the price of Rs.49.51 lakhs as noted in the first agreement cannot crash down to Rs.23 lakhs of the same property as noted in the second agreement. It is interesting to note that the cheque amount in the first agreement is more or less identical to the disclosed amount in the second agreement. The first agreement in Page-2 under Para 2 clearly indicates that total consideration of Rs.49.51 lakhs will consist of Rs.26.51 lakhs in cash and Rs.23 lakhs in A/c. Payee Cheque. The first installment of Rs.5 lakhs (in terms of first agreement) will be paid at the time of signing of agreement in sums of Rs.3 lakhs in cash and RS.2 lakhs in A/c. Payee Cheques. The second installment of Rs.23.5 lakhs in cash will be paid at the time of handing over the said plot by the assigner to the assignee. The handing over of possession and payment of Rs.23.51 lakhs will be made on or before 2nd April, 2002 in terms of Clause 2, Para 2 of the first agreement. Balance pavrnent of Rs.21 lakhs is stipulated to be paid in three equal installments of Rs.7 lakhs by way of A/c. Payee Cheques by 30th April, 31st May and 31st July, 2002. It may be noted that the installments and the cheque amounts have been paid exactly in the same manner and along the same time line. The first agreement dated 27.02.2002 and the second agreement dated 15.04.2002 are closely related as RS.2 lakhs of payment from the Buyer to the -seller Appellant as acknowledged in the second agreement is dated 26.2.2002, whereas the second agreement is dated 15.4.2002, several weeks after the payment of cheque of Rs.2 lakhs dated 26.2.2000he first agreement dated 27.2.2002 thus refers to the same cheque of RS.2 lakhs as the second agreement dated 15.4.2002. Similarly, the first agreement provides for payment of Rs.21 lakhs by cheque in three equal installments of Rs. 7 lakhs each, on three dates being 30th April, 2002, 31st May, 2002 and 31st July, 2002. The second agreement also notes down the same amount of cheques on almost same dates being 26th or 24th April, May and July. The cash payment of RS.26.51 lakhs in terms of Clause-2 (Pg. 2) of agreement 1 does not find mention in agreement 2 because 4
5 ITA No.308/Kol/2014 Smt. Sushma Tandon A.Yr.2003-04 agreement 2 omits cash consideration altogether including Rs. 3 lakhs of cash paid on 27.02.2002 in terms of Clause 1 (pg. 2) of agreement 1. Thus, the deal documented in agreement 1 is the same as that in agreement 2, except for the cash amounts of Rs. 26.51 lakhs as discussed above. Thus claim of the Appellant that the first agreement was cancelled and the property was sold for much lower consideration in terms of the second agreement is false and is therefore rejected. AO’s finding on the point is upheld. Ground is not ‘allowed.’”
These factual findings of the Ld. CIT(A) could not be controverted by the ld. Counsel for the assessee. Merely stating that Shri Satish Kumar Tandon does not have power of attorney to enter into an agreement, does not suffice. The documents found during the course of search, support the case of the revenue. The assessee could not bring an evidence to rebut this presumption and the conclusion of the ld. AO. Hence I uphold the order of the ld. first appellate authority and dismiss this appeal of the assessee.
In the result, the appeal of the assessee is dismissed. Order pronounced in the Court on 27.06.2018
Sd/- [ J.Sudhakar Reddy] Accountant Member Dated : 27.06.2018 SB, Sr. PS Copy of the order forwarded to: 1. Smt. Sushma Tandon, C/o, R.C. Merchandise Pvt. Ltd., 166, M.G. Road, Kolkata-700007 2. ITO, Ward-45(2), Kolkata, 3, Govt. Place, (West), Kolkata-700001. 3..C.I.T.(A)- , Kolkata 4. C.I.T.- Kolkata. 5. CIT(DR), Kolkata Benches, Kolkata.