SH. BRIJ BHUSHAN AGGARWAL,SAHARANPUR vs. ITO, SAHARANPUR
In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.
What did the Tribunal hold?
The Tribunal held that the assessee failed to provide any documentary evidence to substantiate the claim of expenditure on land filling. The additional evidence produced before the Tribunal was rejected as an afterthought. Therefore, the disallowance made by the lower authorities was confirmed.
What were the facts?
The assessee claimed a deduction for the indexed cost of filling soil in land sold for capital gains. The Assessing Officer and CIT(A) disallowed this claim for lack of documentary evidence. The assessee failed to provide substantiating evidence before the lower authorities and the Tribunal.
What were the issues?
Whether the claim for indexed cost of improvement for land filling is allowable without documentary evidence. Whether additional evidence produced at the appellate stage without proper justification should be admitted.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’ NEW DELHI
Before: SHRI B.P. JAIN
This appeal of the assessee arises from the order of learned CIT(A), Muzaffarnagar, vide order dated 04.10.2016 for the assessment year 2014- 15. 2. The assessee has raised the following grounds of appeal. “1. That the order passed by the Ld. CIT(A) is bad in law to the extent it confirms the additions made by the Assessing Officer on account of refusal to accept the deductions claimed.
2. That the Ld. CIT(A) erred on both facts and in law in as much as not considering the fact that the deduction was claimed in respect of improvements conducted in the land i.e. filing of earth, it’s loading, unloading, transporting and levelling etc. in the year 2004 i.e. more than 10 years back, which is an unorganized sector, and ample evidence to that effect was provided by the appellant to both the Assessing Officer and Ld. CIT, Appeals.
3. That the Ld. CIT(A) erred in law in rejecting the contentions of Appellant without providing any reasoning for the same in a non speaking order.
4. That both Assessing Officer and Ld. CIT(A) erred in not conduct any inspection/ enquiry at site before disallowing the indexed cost of improvement law and also before controverting the statement made on a sworn affidavit by the appellant.
5. That Ld. CIT (A) ignored the settled position of law that when a factual statement is provided by an assessee in the form of affidavit, the said statement should be dismissed only on cogent basis. In the instant case, the Ld. CIT(A) merely dismissed statement without any basis and without considering not only statements made but also without looking into the evidence record. 6. That Ld. CIT (A) also erred m not considering a very cogent evidence provided by the appellant in the form of Schedule of Rates by the Central Public Works Department (CPWD). The deduction claimed by the appellant was in line with the rates prescribed by the Central Government and still CIT (A) ignored the said evidence and went ahead to disallow the claimed deduction. It is pertinent to mention that neither the Assessing Officer nor CIT(A) dealt with the said ground in their order. 7. That both the Assessing Officer and Ld. CIT (A) have not disputed anywhere that the land which was sold by the assessee was earlier being used for making bricks by digging the soil/ earth which led it to become very deep as compared to the adjoining land. It has also not been controverted that digging led to constant water logging and thus proper cultivation was not possible without filling it up, which task was undertaken by the Appellant by incurring cost. 8. That the order of Ld. CIT (A) abruptly dismisses the contention of the Appellant by stating that the same are not supported by any evidence, while completely ignoring the CPWD rates annexed to the appeal and the sworn affidavit of the appellant himself submitting the same. That some new evidence which has come in the possession of the Appellant, provided with a separate application, also confirms to the said fact i.e. the land was being used for making bricks and that the land was improved as claimed by the appellant (vide License dated 07.04.1992 along with Certificate of Sarpanch of the area where the land is located). 9. That Ld. Assessing Officer has illegally and without any basis later on has issued a penalty notice under Section 271 of the Income Tax Act, 1961 in as much as Section 271 deals with concealment of income by the .assessee, which is not the case' here. Therefore,
the said notice of levy of penalty needs to be set aside on that basis.”
The assessee has also submitted additional evidences, i.e., the certificate of license granted by the Municipal Corporation of Muzaffarnagar dated 14.01.2005 and affidavit by Sarpanch of the village dated 21.12.2016.
Learned counsel for the assessee appearing before me could not establish the reasons for not submitting these evidences before the authorities below and especially the certificate which he claims to be the affidavit of Sarpanch which is dated 21.12.2016 and what prevented the assessee to procure such certificate during the assessment proceedings or appellate proceedings. The specific question was argued from the learned AR which should not be unserved in the open Court and accordingly learned AR has failed to substantiate and establish the necessity of such additional evidence at this stage. Accordingly such evidences, appeared to be afterthought. Accordingly the additional evidences submitted by the learned counsel for the assessee are rejected.
As regards the facts of the present case which are reproduced in the order of the learned CIT(A) in paragraph 3 is reproduced hereinbelow. “3. During the course of assessment proceedings it was found that during the year under consideration the assessee sold 20 bighas of land for a total sale consideration of Rs.70,54,000/-. In the computation of Long Term Capital Gain the assessee has claimed indexed cost of filling of soil in Bhatta Land for 20 beghas at Rs.9,78,125/-. In this regard the assessee was asked vide order sheet Entry dated 06.10.2015 to produce some proof to substantiate his claim. On 09.11.2015 the assessee filed an affidavit stating that "as regards the land filing of 20 bighas land to lying low as compared road level and invested Rs.five lacs on contract basis including the cost of soil, loading transportation of soil, unloading
and leveling also in the year 2004 and as the deponent said earlier no books of account has been maintained, there is no other evidence with the deponent after ten years for this investment. Further on 16.11.2015 notice u/s 142(1) of the l.T. Act alongwith Proposed Show Cause Notice before making addition was issued, fixing the date for compliance on 23.11.2015. On the date fixed the Advocate of the assessee attended the proceedings but he could not produce any evidence regarding above claim of Indexed Cost of Filling Soil at Rs.9)8,125/-. From the above discussion it is clear that the assessee does not have any single documentary proof regarding his claim of Indexed Cost of Filling Soil at Rs.9,78,125/-. In the absence of any proof the amount claimed as Indexed Cost of Filling of Soil in Bhatta Land cannot be allowed to the assessee. Therefore, the same is hereby added to the total income of the assessee. (Addition Rs.9,78, 125/-)
Learned CIT(A) in fact dismissed the grounds of the assessee and his findings which in paragraph 6 are reproduced hereinbelow.
“6. The facts of the case as well as submission made by the appellant have been considered. In this case the appellant has sold 20 bighas of land for consideration of Rs.7054000/- and has shown Long Term Capital Gain upon the same. In the computation, the appellant has claimed cost ofRs.9781251- on account of land filling in the year 2004. The appellant has failed to substantiate the claim in respect to the same during the assessment proceedings by not furnishing any documentary evidence to support the same. Accordingly the A.O. has disallowed the amount of Rs.9781251- as deduction from the computation of Long Term Capital Gain. During the appellate proceedings also the appellant could not furnish any evidence to support his claim on this account. The onus was on the appellant to furnish satisfactory explanation with supporting evidences. However, the appellant has failed to discharge the onus cost upon him. In the circumstances the AO was justified to compute the capital gain by disallowing sum of Rs.9,78,125/-. The same is hereby confirmed. Grounds of appeal Nos.1 to 5 are dismissed.”
6. I have heard the rival contentions and perused the facts of the case. A specific question was raised before the learned AR by this court that why the documentary evidences in support of the claim of the assessee was not put forward before any authorities below. Learned AR failed to the said question of the Court. There was not placed as documentary evidence on record before any authorities below or even before me to show that expenditure of Rs.9,78,125/- has actually been incurred on account of land filled in the year 2004. The assessee has also not filed any valuation report of the registered valuer to substantiate his claim. The learned AR in fact blamed the authorities below that no inquiry has been conducted by any of the authorities below on the said land and it was the duty of the officer below to do the same. The assessee has produced the PWD rates in this regard, it should have been taken into consideration by the authorities below and by the Bench. Such type of pleadings before the bench in fact cannot help the assessee and are without any documentary evidence, therefore, are rejected. Thus, all the grounds of the assessee are dismissed.
In the result, the appeal of the assessee is dismissed. Order pronounced in the open court on this day 24th April, 2017
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