SHRI SANAT ROY CHOWDHURY,KOLKATA vs. JCIT, RG-2, HOOGHLY, HOOGHLY

This appeal by the assessee is against the order of Commissioner of Income Tax (Appeals)-6, Kolkata dated 23.03.2015. Assessment was framed by J.C.I.T., Range-2, Hooghly u/s 147/143(3) of the Income tax Act, 1961 (hereinafter referred to as ‘the Act ‘) vide his order dated 28.03.2013 for assessment year 2008-09.

The 1st issue raised by assessee in this appeal is that learned CIT-A erred in confirming the order of AO by holding the assessee’s share in the impugned property at Rs. 22,25,225.00. -Shri Sanat Roy Chowdhury A.Y.2008-09 2

The facts in brief are that the assessee in the present case is an individual and has declared its income under the head capital gain. The assessee was one of the joint owner in the properties located at 11/10A & 10B, S.C. Chatterjee Street, Konnagar Hooghly. The share in the property was sold by the assessee along with the other owners for Rs. 16,50,000.00 which was registered at the office of ADSR, Serampore vide entry in the book number-I, CD volume No. 2 pages from 2337 to 2357 being Deed No. 00938 dated 15-2-2008 as detailed below :

Assessee preferred an appeal to learned CIT-A. The assessee before the learned CIT-A submitted that all the Sellers of the impugned property belong to a family being brothers and mother. As per the understanding between all the members of the family Mr. Samar Roy Chowdhury developed the building at his own cost and expenses. There was clear understanding between the members that the building exclusively belongs to Mr. Samar Roy Chowdhury. Therefore the assessee is liable to pay the capital gain arising out of the transfer of sale of land. However the learned CIT-A expressed his unwillingness to accept the argument of the assessee and confirmed the order of AO by observing as under : “ 4.5 Assessee and his family members in connivance with each other had tried to defraud the State Government from the legitimate stamp duty. as well as LT. Department by not explaining the source of investment, as well as not paying legitimate tax. After being caught by the Registering Authority regarding non-disclosure of the building on land, while registering the assessee and his family members have come up with the plea of nominal investment by one family member (Samar Roy Chowdhury), which was claimed as his contribution as partnership capital. That it is an after thought is evident from the conduct during the registering process, when the very existence of building was suppressed. Further. no evidence at all has been Produced to substantiate how one co-owner can claim entire ownership of building without any written agreement or other evidence to that effect, whereas all the co-owners become joint of owner of the building in their proportionate share, as per their share in ownership of land, if no evidence to the contrary is produced. This is the share of property sold which has been accepted by A.O. while computing capital gains. In view of the above facts which has clearly been brought out by A.O. in his order which clearly points out to under valuation, to avoid payment of tax under the head Capital Gains, A.O.'s determination of income under the head capital gains under section 50C is accepted.” -Shri Sanat Roy Chowdhury A.Y.2008-09 4

Being aggrieved by the order of learned CIT-A assessee is in 2nd appeal before us. The learned AR before us filed paper books along with supplementary paper book which are running from pages 1 to 134. The learned AR before us submitted that indeed the building was constructed on the land but it only belonged to Mr. Samar Roy Chowdhury and assessee has no connection either directly or indirectly with the impugned building. The learned AR in support of his claim has submitted the deed of partnership between the developer and Mr. Samar Roy Chowdhury which is placed on pages 22 to 29 of the paper book. The learned AR before us prayed to restore the matter to the file of AO for fresh adjudication as many aspects of the case have not been considered by the lower authorities. On the contrary the learned AR raised no objection if the matter is leased order to the AO.

We have heard the rival contentions and perused the materials available on record. The issue in the instant case relates to the sale of land but the lower authorities have held that the land was sold along with the building. The learned AR claimed that the assessee in the instant case is the owner of the land only and he has no connection with the building constructed on such land. As per the assessee the building was constructed by the co-owner Mr. Samar Roy Chowdhury. However no documentary evidence was submitted before the lower authorities in support of assessee’s claim. However the assessee has claimed to have filed several documents before the lower authorities which are placed in the paper books. Besides the learned AR has also challenged the valuation made by the lower authorities for the purpose of working out the capital gain under section 50C of the Act. On examination of the order of lower authorities we find that the argument of the assessee that he has no connection with the building either directly or indirectly has not been adjudicated in the absence of documentary evidence. However in our view the lower authorities before reaching to the conclusion should have cross verified the contention of the assessee from Mr. Samar Roy Chowdhury which they failed to do so. Therefore Sanat Roy Chowdhury A.Y.2008-09 5 in the interest of Justice and fair play we’re inclined to give one more opportunity to the assessee to submit his arguments with documentary evidence to justify his claim. Hence we restore this ground of appeal of the assessee to the AO for fresh adjudication in accordance with the law and in the light of above is stated discussion. Thus the ground of appeal raised by the assessee is allowed for statistical purposes. The 2nd issue raised by assessee in this appeal is that learned CIT-A erred in the working of indexed cost of acquisition of the land/property under section 48 of the Act sold by the assessee. At the outset we find that the learned AR prayed to the bench to restore the file to AO for fresh adjudication and on this learned DR raised no objection. As we have already restored the ground number 1 in the instant case to the AO for fresh adjudication, therefore we’re inclined to restore this issue also to the file of AO for fresh adjudication in accordance with the law. Hence this ground of appeal of the assessee is allowed for statistical purposes.