Case Law Details
Jitendra Nathubhai Katargamwala Vs ITO (ITAT Surat)
ITAT Surat held that in absence of any corroborative evidence with regard to payment of amount mentioned in sauda chitti, assessee is not entitled to claim enhanced cost of acquisition and hence appeal of the assessee dismissed.
Facts- During the assessment, AO noted the assessee has shown capital gains on sale of property. AO noted that assessee has sold immovable property by showing sale consideration at Rs.4.91 crores on 30.03.2015. The assessee was having 1/6th share of the property. As per AO, the assessee has suppressed capital gain of Rs. 35,83,472/-. Notably, assessee claimed that in his case in a search action a sauda chitthi was found wherein it was narrated that assessee has paid Rs.26,44,250/- over and above the declared amount on the sale deed at the time of acquisition of property. Therefore, assessee is to be allowed relief to that extent while computing index cost of acquisition for the purpose of long-term capital gains. Such reply of the assessee was not accepted by AO by taking view that assessee failed to prove such amount of sauda chitthi was offered for taxation in previous return of income. Thus, such benefit cannot be granted to the assessee. Accordingly, AO added difference amount of capital gains of Rs.35,83,472/-to the total income of assessee.
CIT(A) confirmed action of AO. Being aggrieved, the present appeal is filed.
Conclusion- Held that the assessee has not shown any evidence that actually such amount mentioned in the sauda chitti was actually paid on not. If any addition is made in the corresponding year, on the basis of evidence found in the search action, in the corresponding year to which the said documents relates or pertains, the assessee is certainly eligible for such deduction. Even otherwise, the cost with reference to modes of acquisition is prescribed under section 49 of Income Tax Act. The claim of assessee nowhere find place in any sub-section of clauses of section 49 of Income Tax Act. The assessee filed to bring any corroborative evidence to my notice substantiate his claim. Hence, I do not find any merit in the ground of appeal raised by the assessee.
FULL TEXT OF THE ORDER OF ITAT SURAT
1. This appeal by assessee is directed against the order of National Faceless Appeal Centre, Delhi [for short to as “NFAC/Ld. CIT(A)”] dated 25.03.2024 for assessment year 2015-16, which in turn arises out of assessment order passed by the Assessing Officer under section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 28.12.2017. The assessee has raised the following grounds of appeal:-
“1. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in not allowing deduction of Rs.26,44,250/- (index value Rs.34,49,206/-) while calculating long term capital gain and making addition of Rs.35,83,472/- alleged as suppression of long-term capita l gain.
2. On the facts and circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has not offered adequate opportunities to hear the case and passed ex-parte order and hence the case may please be set aside and restored back to the CIT(A) or AO.
3. It is therefore prayed that the above addition may please be deleted as learned Members of the Tribunal may deem it proper.
4. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of the hearing of the appeal. ”
2. Brief facts of the case are that the assessee is individual and filed his return of income for assessment year 2015-16 on 31.10.2015. The return was revised on 31.03.2017 declaring income at Rs.13,86,890/-. In the revised return, assessee claimed deduction of chapter VI-A of Rs.1,68,730/-. The revised return was selected for scrutiny. During the assessment, Assessing Officer recorded that assessee was running a petrol pump under dealership Hindustan Petroleum Corporation Limited (HPCL) and also partner in a firm. In the computation of income, the assessee has shown capital gains on sale of property. On further verification of details, Assessing Officer noted that assessee has sold immovable property situated at Block No.704 Kosad, Surat by showing sale consideration at Rs.4.91 crores on 30.03.2015. The assessee was having 1/6th share of the property. The assessee has shown his share on sale consideration at Rs.81,91,782/-. The said property was purchased on 01.08.2011. The assessee paid consideration of his share at Rs.35,07,500/-including all expenses. The assessee has shown index cost for computation of capital gains at Rs.45,75,389/-, instead of Rs. 81,92,792/- and the assessee has suppressed capital gain of Rs. 35,83,472/-. The assessee has offered capital gains of Rs. 33,931/- only. The Assessing Officer issued show cause notice vide order sheet entry dated 14.12.2017 as to why difference amount of capital gains of Rs.35,83,472/- should not be added as long-term capital gains. The assessee filed his reply on 18.12.2017. The Assessing Officer recorded that assessee agreed in principle for adopting sale price of assessee’s share at Rs.81,92,792/-. However, assessee claimed that in his case in a search action a sauda chitthi was found wherein it was narrated that assessee has paid Rs.26,44,250/- over and above the declared amount on the sale deed at the time of acquisition of property. Therefore, assessee is to be allowed relief to that extent while computing index cost of acquisition for the purpose of long-term capital gains. Such reply of the assessee was not accepted by Assessing Officer by taking view that assessee failed to prove such amount of sauda chitthi was offered for taxation in previous return of income. Thus, such benefit cannot be granted to the assessee. Accordingly, Assessing Officer added difference amount of capital gains of Rs.35,83,472/-to the total income of assessee.
3. Aggrieved by the addition made in the assessment order, assessee filed appeal before Ld.CIT(A). The Ld.CIT(A) confirmed the action of Assessing Officer recorded in his appellate order that assessee has not furnished any evidence to substantiate his claim of additional cost of acquisition. Thus, in absence of any contrary evidence, the assessee is not entitled for enhance purchase consideration as part of cost of acquisition for the purposes of computing index cost. Further, aggrieved the assessee has filed present appeal before the Tribunal.
4. I have heard the submissions of Ld. Authorized Representative (Ld.AR) for the assessee and Ld. Senior-Departmental Representative (Ld. Sr-DR) for the Revenue carefully. The ld AR of the assessee submits that once the documents found in the search action is accepted by the revenue, the assessee is eligible for claiming enhanced cost of acquisition on the basis of such evidence. Further, in case of co-owner who has sold the land alongwith the assessee, was also selected for scrutiny, who has been allowed full deduction of cost of acquisition, copy of the assessment order in case of Rajeshbhai Narainbhai Vaghani (PAN: ABBPV 0720 G) is filed on record. The ld AR of the assessee submits that he assessee cannot be treated differently. To support his submission, the ld AR of the assessee relied on the decision of this Tribunal in Sanjay Rameshbhai Patel Vs ITO in ITA No. 374/Srt/2028 dated 08.05.2023.
5. On the other hand, Ld. Sr-DR for the Revenue supported the order of lower authorities. The Ld. Sr-DR for the Revenue submits that assessee has not furnished any details either before Assessing Officer nor before Ld.CIT(A), if the assesse has paid any amount over and above the agreed amount shown in the sale deed, at the time of purchase of asset. The facts of the case of alleged co-owner are not clear, as no computation of income or any other evidence supporting the case of co-owner is filed. Similarly, the ration of the case law relied by the ld AR of the assessee in Sanjay Rameshbhai Patel Vs ITO (supra) is also not applicable on the facts of the present case as there is no evidence on record that additional cost of alleged payment was allowed in case of co-owner. The assessee has filed new evidence in the form of sauda chitti, which was not filed before lower authorities. The lower authorities have not verified such evidences, so no cognizance can be taken of such document. In case, such evidence is accepted, the evidence required verification at the end of assessing officer.
6. I have considered the rival submissions of both the parties and have gone through the orders of lower authorities carefully. I find that Assessing Officer not accepted enhanced cost of acquisition on the basis of alleged sauda chitti by taking a view that the assessee failed to prove the amount of sauda chitthi was offered for taxation in previous return of income. The ld CIT(A) also confirmed the action of the Assessing Officer by holding the assessee failed to prove that he has paid over and above the sale consideration as a part of acquisition. Before me the ld AR of the assessee simply relied on the copy of the alleged sauda chitti found in the search action. The ld AR of the assessee has not shown any evidence that actually such amount mentioned in the sauda chitti was actually paid on not. If any addition is made in the corresponding year, on the basis of evidence found in the search action, in the corresponding year to which the said documents relates or pertains, the assessee is certainly eligible for such deduction. Even otherwise, the cost with reference to modes of acquisition is prescribed under section 49 of Income Tax Act. The claim of assessee nowhere find place in any sub-section of clauses of section 49 of Income Tax Act. The assessee filed to bring any corroborative evidence to my notice substantiate his claim. Hence, I do not find any merit in the ground of appeal raised by the assessee. So far as reliance on the assessment of coo-owner, I do not find any reference in the entire assessment order regarding such claim on the basis of said sauda chitti, details of working of capital gain or computation of income or consideration thereof. Hence, neither the assessment order in case of co-owner or in case of Sanjay Kumar Patel (supra) is helpful to the assessee.
7. In the result, the appeal of the assessee is dismissed.
Order pronounced in open court on 13 November, 2024.
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