TMI Blog2014 (3) TMI 355X X X X Extracts X X X X X X X X Extracts X X X X ..... f the CIT (A) – Decided against Assessee. Valuation of property – Fair market value – Held that:- Neither the Assessing Officer nor the CIT (A) have correctly adopted the FMV of the property as on 1-4-1981 - While the CIT (A) was correct in rejecting the FMV of Rs.10 per sq. yard adopted by Assessing Officer on the basis of SRO guidelines, but the FMV of Rs.100 per sq. yard as on 1-4-1981 adopted by him is also without any basis - Neither the Assessing Officer nor the CIT (A) conducted necessary enquiry and brought on record comparative instances of sale of land in that locality or nearby area which could have thrown some light on the FMV of the property as on 1-4-1981 - FMV of a property at Nacharam cannot be determined on the basis of few instances of sale at Banjara Hills as it is not in the immediate vicinity - Revenue as well as the assessee have failed to factually establish the FMV of the land as on 1-4-1981 – the matter is remitted back to the AO for ascertain the FMV of the land as on 1-4-1981 – Decided in favour of Assessee. Claim of deduction u/s 54F of the Act – Held that:- The CIT (A) held that as the built up areas registered under two separate sale deeds were c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on record and is therefore unsustainable both on facts and in law. ii. The ld CIT erred in placing reliance on the statement of Prem Sagar Rao who did not respond to the specific demand of the appellant for cross examination and therefore the statement could not be relied upon for the purposes of determining the sale consideration of the immovable property. iii. The ld CIT ought to have adopted tame F.M.V. of the property as on 1-4-81 at Rs.56,14,000 before indexation as valued by the registered valuer and indexed for the purposes of determinant the cost of property. iv. The ld. CIT having referred to the decision of the Delhi High Court in CIT vs. Geeta Duggal (2013) 30 Taxman.com.230 ought to heave allowed exemption ui/s 54F of the IT Act 1961, in respect of the value of all flats allotted to the appellant. 3. The grounds raised by the department read as under:- 1. The order of the CIT (A) is erroneous both on facts and in law. 2. The CIT (A) is not justified in directing the Assessing Officer to adopt the cost of acquisition as on 1-4-1981 at Rs.100/- per sq. yard instead of Rs.10/- per sq. yard, as adopted by the Assessing Officer on the basis of the informa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... states Pvt. Ltd., the total consideration paid by M/s Sainath Estates Pvt. Ltd. Towards sale consideration of aforesaid land was Rs.16,20,00,000/-. As per the seized document in annexure AA-SEPL/01 which contained payment receipts, the assessee and his son were paid an amount of Rs.3,10,00,000 in the financial year 2007-08 and balance amount of Rs.13,10,00,000/- was paid in the financial year 2008-09. The Assessing Officer noticed that the vouchers forming part of the seized document, some signed and some unsigned by the receiver, clearly revealed substantial cash payments. He further noted that during the post search proceeding a summon u/s 131 was issued to Sri K. Premsagar Rao, the Managing Director of Sainath Estates Pvt. Ltd. In the statement recorded u/s 131 on 12-5-2009 Sri K. Premsagar Rao categorically admitted that an amount of Rs.16,20,00,000 was paid towards sale consideration for acquiring the property in question. In his deposition Sri K. Premsagara Rao also furnished the details of payment made to Badal Chand Surana ( assessee s father) and his family members as under: in cash Rs.3,45,00,000/- By cheques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Nikhil Surana was Rs.14 crores including cash of Rs.1,85,00,000/- as per the seized vouchers. At the same time, he also stated that the amount of Rs.1,85,00,000/- received in cash was repaid to Sainath Estates Pvt. Ltd., as consideration over and above the agreement value towards purchase of flat from the said company. He however denied of having received the amount of Rs.1,75,00,000 as mentioned in the unsigned vouchers found and seized. He also stated the details of consideration received as under:- By way of cheques Rs.10,00,00,000/- By way of allotment of 10 flats Rs. 4,00,00,000 Total Rs.14,00,00,000/- 8. On the basis of the evidence as available on record in the form of seized material as well as depositions of the M.D of Sainath Estates Pvt. Limited, Sri K. Premsagar Rao and assessee s father Sri Badalchand Surana, the Assessing Officer concluded that the total sale consideration was Rs.16,20,00,000/-. He noted that that as per the ledger account of Sainath Estates Pvt. Limited which was seized during the search and seizure operation, the total ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess consideration received of Rs.15 lakhs also has to be considered as part of sale consideration, hence the total sale consideration should be treated as Rs.16.35 crores. The Assessing Officer concluded that cash component of Rs.1.60 crores should be treated as undisclosed income of assessee and his son and accordingly proceeded to quantify an amount of Rs.1,52,90,250/- at the hands of the assessee and an amount of Rs.7,09,750/- at the hands of his son for the purpose of computing capital gain. Being aggrieved of the addition so made assessee preferred appeal before the CIT (A). 11. In course of proceeding before CIT (A), it was contended on behalf of the assessee that during the relevant previous year the assessee and his son have sold the property in question on 12-6-2008 for a total consideration of Rs.14,75,60,000/-, including the recorded/unrecorded consideration in the sale deed. It was submitted that entire transaction was carried out in the assessment year under consideration. The assessee strongly denied of having received the amount of Rs.1,60,00,000/- recorded in the unsigned vouchers. The assessee also disputed the addition made on the basis of unsigned vouchers. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . However, it is clear that even the receipts of Rs. 1.85 crores in cash represented by vouchers with signatures had been initially denied by the appellant. The appellants were compelled to admit such receipts only on account of the fact that the said vouchers contained their signatures. The denial of the unsigned vouchers is therefore only an afterthought raised with a view to take advantage of the deficiencies in the document, even though the amounts represented therein are appearing in the ledger also. However, it is an established position of law that if part of a document is admitted as true and correct, the remaining entries therein have also to be presumed true and correct. Therefore, I am of the considered view that the consideration of Rs. 16.20 crores received for the Nacharam lands by Sri Harish Chand Surana and Nikhil Surana has been duly established. Further, nothing could be explained regarding excess consideration in kind of Rs. 15 lakhs as flats. Therefore, it is to be held that the total consideration received by the two vendors has been rightly taken at Rs. 16.35 lakhs. 12. We have heard the parties and perused the orders of the authorities below as well as o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r as well as CIT (A) submitted that unsigned vouchers are not the only evidence found during search which revealed the sale consideration of the property at Rs.16.20 crores. He submitted the payment vouchers, both signed and unsigned were corroborated by entries made in the books of accounts of the developer M/s Sainath Estates. He submitted that the M.D. of M/s Sainath Estates also categorically stated in his sworn deposition that actual amount paid towards sale consideration was Rs.16.20 crores. He further submitted that assessee initially admitted sale consideration of Rs.12.54 crores. Subsequently, when he was confronted with the seized materials viz., payment vouchers, books of accounts of M/s Sainath Estates and also the statement of K. Premsagar Rao, he came forward to disclose additional sale consideration by filing revised return. The assessee accepted major portion of the sale consideration shown in the books of M/s Sainath Estates except an amount of Rs.1,60,00,000/- represented by unsigned payment vouchers. The leaned DR therefore submitted that when the assessee is accepting cash payments mentioned in signed payment vouchers there is no reason to believe that assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5-2009, a statement was recorded from him. In the statement recorded he deposed that total sale consideration received by Harish Chand Surana and Nikhil Surana is Rs.14,00,00,000/- including cash payment of Rs.1,85,00,000/- as per page Nos. 5,8,9 and 10 of seized material marked as annexure AAA/SEPL/01 which represent signed payment vouchers. The sale consideration admitted in deposition of Sri Badal Chand Surana was followed up by the original returns filed on 31-7-2009 wherein an amount of Rs.12,54,48,700/- at the hands of Harish Chand Surana and an amount of Rs.1,25,51,300/- at the hands of Nikhil Surana total amounting to Rs.13.80 crores was shown towards sale consideration. On 26-10-2010 the assessee filed a revised return declaring additional sale consideration of Rs.95,60,000/-. Thus the total sale consideration finally shown both by the assessee and his son Nikhil Surana is Rs.14,75,60,000/-. From the aforesaid narration of facts it becomes absolutely clear that assessee s stand from the very beginning remains inconsistent and untrustworthy. Initially, the assessee totally denied of having received any cash payments. Subsequently when he was confronted with the seized payme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs.16.20 crores recorded in the books of accounts of M/s Sainath Estate is the actual amount received by the assessee and his son. So far as decisions relied upon by the learned AR are concerned, on careful examination we find them to be not applicable to the facts of the present case in those cases apart from the unsigned documents/loose sheets there are no other corroborative evidence. Whereas, in case of the assessee, the payment vouchers are corroborated by other evidences which demonstrate payment of sale consideration of Rs.16.20 crores. In aforesaid view of the matter, we do not find any infirmity in the order of the CIT (A). However, we need to mention here that in course of hearing the learned AR submitted that according to Assessing Officer total sale consideration received was Rs.16,35,00,000/-. The amount offered by assessee and his son is Rs.14,75,60,000/-. Therefore, shortfall is Rs.1,59,40,000/- whereas the Assessing Officer has added an amount of Rs.1,60,00,000/- resulting in excess addition of Rs.60,000. After considering the submissions of the learned AR, we direct the Assessing Officer to verify this aspect and if there is any excess addition as pointed out by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsidered to be the F.M.V. 21. The CIT (A) held that registered valuer s reasoning for adopting the rate of Rs.250 per sq. yard is not acceptable as he has adopted the said rate by adopting 50% of the rate Rs.500 per sq. yard in Banjara Hills on 1-4- 1981. The CIT (A) was of the view that land rate of Banjara Hills cannot be the basis for assessing land rate at Nacharam, as on 1981 when Banjara Hills has already started developing, there is no such development at Nacharam. He further opined that the registered valuer s opinion is not on the basis of any comparable instances in the same locality but only on the basis of his personal and subjective opinion. Similarly, the CIT (A) also did not approve the value of Rs.10 per sq. yard adopted by the Assessing Officer on the basis of SRO value. The CIT (A) having rejected the value adopted both by the Assessing Officer as well as registered valuer proceeded to estimate the value of land as on 1-4-1981 at Rs.100 per sq. yard. 22. We have heard the parties. On a perusal of the materials on record as well as orders of the Assessing Officer and CIT (A), we are of the view that neither the Assessing Officer nor the CIT (A) have correctl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all the flats allotted to him. Hence, we will deal with it at a later stage while considering the additional grounds raised by the assessee. 24. The assessee has raised three additional grounds. The learned AR contended that the additional grounds do not require investigation into new facts and can be decided on the basis of facts already on record. The addl. grounds are as under:- 1. The ld. CIT (A) failed to note that the flat No.215 admeasuring 2010 sq. ft. was only one flat which was split by the vendee M/s Sainath Estates (P) Ltd., into two sale deeds in order to enable them to claim exemption u/s 80IB(10) of the Incometax Act, 19961. 2. The ld. CIT (A) failed to note that the purchase of flat No.2315 was evidenced by an agreement of sale deed dated 9-6-2008 which clearly shows that the flat No.215 with a built up area of 2010 sq.ft., was only one flat and therefore the exemption as claimed by the appellant at Rs.57,11,200/- must be allowed. 3. The ld. CIT (A) ought to have allowed exemption u/s 54F for all the residential flats acquired by the appellant against sale of factory building and plot. 25. In additional ground Nos. 1 and 2, the assessee has raised t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... him but also in conformity with the view expressed by different High Courts. Therefore, we do not find any infirmity in the order of the CIT (A) on this issue which is accordingly confirmed. 28. As we have upheld the order of the CIT (A) on this issue ground No.3 of the department is dismissed. 29. In additional ground No.3 and main ground No.4, the assessee has raised the issue of allowability of deduction u/s 54F in respect of all the flats allotted to the assessee. 30. We have heard the parties. It is the contention of the learned AR that out of the 10 flats allotted by the builder 9 flats belong to the assessee, though they are registered in name of different family members. It was contended that as all the flats are in different floors of the same building assessee is eligible for deduction u/s 54F on all the flats. In support of such contention, the learned AR relied upon number of decisions which are as under: i) Vittal Krishna Conjeevaram vs. ITO (144 ITD 325) ii) CIT vs. Syed Ali Adil (352 ITR 418(AP) iv) DLF Commerciasl Projects Corporation and Another vs. ACIT (357 ITR 211 (Delhi) v) CIT vs. Smt. K.G. Rukminiamma (331 ITR 211 (Karn) On perusal of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that though the assessee has filed a petition u/s 154 of the Act before the Assessing Officer for rectifying the mistake but it still remains unattended. After considering the submissions of the parties, we are of the view that this issue is required to be remitted to the Assessing Officer for verifying the claim of the assessee. If these two flats have already been considered at the hands of Sri Harish Chand Surana, they cannot be considered again at the hands of the assessee This ground is allowed for statistical purposes. 35. In addition to the above main grounds, the assessee has also raised three additional grounds which are identical to the additional grounds raised in case of the other assessee Sri Harishchand Surana in ITA No.954/Hyd/2013. Following our decision in that case, we dismiss all the additional grounds raised. ITA No.1102/Hyd/2013 - (departmental appeal): 36. The first issue raised in ground Nos. 1 and 2 of the aforesaid cross appeals is with regard to f.m.v of land as on 1-4-1981 adopted by the CIT (A) at Rs.100 per sq. yard. 37. This issue is similar to ground No.2 of the department in ITA No.1087/Hyd/13 in case of Harishchand Surana. In view of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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