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IN THE INCOME TAX APPELLATE TRIBUNAL "I" BENCH, MUMBAI
, ,
BEFORE SHRI SANJAY ARORA, AM AND SHRI VIVEK VARMA, JM
./I.T.A. No. 7750/Mum/2012
( / Assessment Year: 2009-10)
Income-tax Officer-15(3)(3), Iqbal Gulam Hussain Qureshi
Matru Mandir, Room No. 117, B/302, Karishma Apartments,
/
Opp. Grant Road (W), Agarwal Estate, Jogeshwari (W),
Mumbai-400 007 Vs. Mumbai-400 102
./ ./ PAN/GIR No. AADPQ 1533 B
( /Appellant) : ( / Respondent)
/ Appellant by : Shri Sacchidanand Dubey
/Respondent by : Shri B. G. Sakaria
/ : 03.12.2014
Date of Hearing
/
: 23.12.2014
Date of Pronouncement
/ O R D E R
Per Sanjay Arora, A. M.:
This is an Appeal by the Revenue directed against the Order by the Commissioner
of Income Tax (Appeals)-26, Mumbai (`CIT(A)' for short) dated 03.10.2012, partly
allowing the assessee's appeal contesting its assessment u/s.143(3) of the Income Tax
Act, 1961 (`the Act' hereinafter) for the assessment year (A.Y.) 2009-10 vide order dated
30.12.2011.
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ITA No. 7750/Mum/2012 (A.Y. 2009 -10)
ITO vs. Iqbal Gulam Hussain Qureshi
2. The only issue arising in this appeal is the maintainability or otherwise in law of
the addition in the sum of Rs.35,14,230/- made by the Assessing Officer (A.O.) on
account of alleged investment in a residential flat purchased by the assessee, since deleted
by the ld. CIT(A), so that the Revenue is in appeal.
3. It would be relevant to briefly recount the facts of the case. The assessee
purchased a Flat (bearing no. 301, Wing B, Karishma Apartments, Jogeshwari (W),
Mumbai) during 1999, paying a sum of Rs.4 lacs in the year of allotment itself. The sale
agreement in its respect, as well as its registration, however, was in the year 2008; the
relevant dates being 11.02.2008 and 03.05.2008 respectively. The agreement being
registered during financial year (f.y.) 2008-09, the assessee's case was selected for
scrutiny under the verification proceedings under the Act. The assessee explained to have
paid the entire purchase consideration in the year 1999, occupying the flat since the year
2000, producing a letter of possession dated 15.07.2000. The same was doubted by the
A.O. in-as-much as the occupancy certificate of the said building by the Municipal
Corporation was only on 23.06.2003. The assessee also could not exhibit the payment of
purchase price in the year 1999, nor adduce any material in support thereof, as in the
form of confirmation of payment or receipt from the seller, M/s. Bombay Stone Quarries,
Builders and Developers, Goregaon (W), Mumbai. The bank account disclosed by the
assessee, i.e., with Dena Bank, was also opened only on 31.12.2002, furnishing his
Borivali (W), Mumbai address, so that the assessee at the relevant time only resided
thereat, i.e., had not shifted his residence to Jogeswari, as contended. The AO, therefore,
finding the assessee's explanation as unsatisfactory, considered the year of registration of
agreement, i.e., f.y. 2008-09, as the year of payment. The market value of the property, as
determined by the stamp valuation authorities for the relevant year was at Rs. 33.43
lakhs. Including thereto the stamp duty (Rs. 1,49,350/-) and registration charges (Rs.
30,880/-), he made the addition in a sum of Rs. 35,14,230/-. In appeal, the assessee
furnished details of payment made, i.e., at total Rs. 7 lakhs, being at Rs. 4 lakhs and 3
lakhs toward purchase of Flat B/301 and Flat B/302 respectively in the said building in
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ITA No. 7750/Mum/2012 (A.Y. 2009 -10)
ITO vs. Iqbal Gulam Hussain Qureshi
the name of the assessee and his wife, which was during the period from 5.11.1999 to
31.1.2001, i.e., during the previous years relevant to the A.Ys. 2000-01 & 2001-02. The
possession of flat was given during the year 2000, as confirmed by the housing society,
so that there was nothing to impugn the possession letter dated 15.7.2000 pursuant to
letter of allotment dated 6.12.1999. Merely because the registration of agreement and,
thus, the property, had been delayed by about eight years, would not imply that the
purchase had not occurred, or otherwise entitle the Revenue to substitute the purchase
cost. The AO had, in effect, applied provision of section 50C, which is inapplicable to a
transaction of purchase. There was also nothing to show that the assessee had paid or the
builder had received any amount beyond Rs. 4 lakhs. The addition, as made, was
accordingly deleted. Aggrieved, the Revenue is in appeal.
4. We have heard the parties, and perused the material on record.
We do observe some inconsistencies in the assessee's case. How could, for
instance, the possession be given in the year 2000, when the occupancy certificate by the
Municipal authority, certifying the building as habitable, was given only in the year 2003.
In fact, possession of the property is accompanied by several incidents, viz. payment of
society maintenance charges, electricity, telephone, postal/communication address,
residence proof to various authorities/institutions, etc., so that it is surprising that the
assessee did not adduce the same, even as stated by the A.O. Again, it is surprising that
one would wait for nearly eight years for transfer of title. The parties generally, to ensure
performance, retain a part of the consideration pending the completion of any part of the
contract, which may include an aspect or part of construction work, or even execution of
agreement and its registration, only upon which there is transfer of title. However, that
would not by itself imply that purchase had not occurred earlier, and that it had occurred
only along with, i.e., the said transfer, about 8 years later. Further, there is nothing to
show that the purchase cost exceeded the stated consideration of Rs. 4 lakhs, or that any
part thereof, whatever be its value, was paid during the relevant year, or that it (the said
year) witnessed anything apart from the execution of the agreement and its registration.
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ITA No. 7750/Mum/2012 (A.Y. 2009 -10)
ITO vs. Iqbal Gulam Hussain Qureshi
Deferring the date of possession to the year 2003, i.e., after the date of occupancy
certificate, would not also advance the Revenue's case, which, as made out, is without
any credible evidence or legal basis.
So, however, we observe that the Revenue has per its Ground No. 2, referred to a
statement by the builder dated 26.12.2011, charging the first appellate authority to have
proceeded by ignoring the facts brought out thereby. The same, which may well be
relevant, is neither on record nor do we find any reference thereto in the assessment order
itself. In fact, we find the assessee to have per the `statement of facts' before the said
authority specifically contended that no adverse view could be drawn on the basis of
statement u/s. 131 by the promoter, Bombay Stone Quarries, copy of which had also not
been supplied to him, i.e., without affording an opportunity for cross examination. There
is no reference to this statement in the impugned order, even as the A.O.'s reliance
thereon is admitted. It is unfortunate that the parties did not bring the same to our notice
during the hearing. The tribunal in deciding an issue before it, is to answer all the grounds
raised, taking into account all the relevant facts. In fact, we observe this to be an aspect of
the issue arising for adjudication, though assumed in the form of a ground. The matter
would therefore warrant being restored back to the file of the ld. CIT(A) for considering
the import, if any, of the said statement by the Developer, observing the principles of
natural justice, so that both the parties before him are allowed adequate opportunity, and
of course the materials being relied upon by the other side, to state their case (refer:
Kapurchand Shrimal v. CIT [1981] 131 ITR 451 (SC)). He may, where deemed fit and
proper, also allow the assessing authority an opportunity to meet and rebut the assessee's
case in the matter. The addition of income qua purchase cost shall be decided afresh in
accordance with law, issuing definite findings of fact. We decide accordingly.
The foregoing, however, would operate to decide on the addition qua the payment,
if any, of the purchase cost, deemed at Rs. 33.34 lakhs, or a part thereof. The balance
addition made, i.e., Rs. 1,80,230/-, is for payment of stamp duty and registration charges,
which stands admittedly paid only during the current year. We find no basis for its
deletion by CIT(A), whose order does not bear any finding in respect thereof. Even the
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ITA No. 7750/Mum/2012 (A.Y. 2009 -10)
ITO vs. Iqbal Gulam Hussain Qureshi
assessee's submissions, reproduced in the impugned order, are silent on this aspect.
Under the circumstances, we only find fit and proper to, likewise, restore the matter qua
the deletion of Rs. 1,80,230/-, towards payment of stamp duty and registration charges
during the relevant year, back to the file of the first appellate authority for adjudication in
accordance with law per a speaking order, and after allowing both the parties an
opportunity to state their case before him. We decide accordingly
5. In the result, the Revenue's appeal is disposed of on the above terms.
Order pronounced in the open court on December 23, 2014
Sd/- Sd/-
(Vivek Varma) (Sanjay Arora)
/ Judicial Member / Accountant Member
Mumbai; Dated : 23.12.2014
.../Roshani, Sr. PS
/Copy of the Order forwarded to :
1. / The Appellant
2. / The Respondent
3. () / The CIT(A)
4. / CIT - concerned
5. , , / DR, ITAT, Mumbai
6. / Guard File
/ BY ORDER,
/ (Dy./Asstt. Registrar)
, / ITAT, Mumbai
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