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TMI Blog2011 (2) TMI 1122X X X X Extracts X X X X X X X X Extracts X X X X ..... ng 6.749 hectares at the "Circle Rate" of Rs. 16 lakhs per hectare works out to Rs. 1,07,98,400/- whereas the actual sale price received from sale of land was Rs. 1,81,22,000/- which is much higher than the "Circle Rate". The ld. AO and the ld. CIT(A) have instead concluded that the sale was below the "Circle Rate" and proceeded on inaccurate inferences. 4. The ld. CIT(A) having observed and recorded that the two sale deeds categorically state the "Circle Rate"of land as Rs. 16 lakhs per hectare and also that the land value as per "Circle Rate" is Rs. 61,40,800/- * Rs. 46,57,600/- totaling to Rs.1,07,98,400/-, erred om accepting the ld. AO's conclusion that the "Circle Rate" is Rs. 1,60,65,000/-. 5. The ld. CIT(A) failed to appreciate that merely because the rate of stamp duty on property held by firm/company is double than that held by an individual, it does not and cannot mean that there are two different "Circle Rates" of the same plot of land - one if held by an individual and another if held by a firm/company. 6. The ld. CIT(A)has failed to consider the well-established view repeatedly held by the Hon'ble Supreme Court and various other High Courts that the "Circle Rate" ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sis for submission of additional evidence at the appellate stage, particularly where the assessee does not spell out the compelling circumstances which prevented it from submitting the evidence sought to be produced at the appellate stage, before the AO; and that further, the assessee had not submitted any particular document which was sought to be filed under Rule 46A of the I.T. Rules. In this manner, the ld. CIT(A) rejected the assessee's application for admission of additional evidence. 5. Before us, the learned counsel for the assessee has contended that it was only on 17.12.08 that for the first time, the assessee raised questions to the assessee; that the assessee had made a complete disclosure in its balance sheet, a copy of relevant portion whereof is at Assessee's Paper Book ('APB' for short). The learned counsel for the assessee has contended, as also available from the Statement of Facts filed before us, that the assessee company, Kalindi Bright Steels & Tubes Ltd., because of financial problems became sick and was registered with BIFR as case No. 60/93; that the BIFR recommended winding up of the company and the Hon'ble Delhi High Court ordered winding up of the compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unsel for the assessee has contended that a copy of the application for admission of additional evidence, as filed before the ld. CIT(A), is at APB 8 to 14; that therein, all the facts have been narrated before the ld. CIT(A); that in the said circumstances, the AO did not provide the assessee company with sufficient time for producing the evidence sought to be produced as additional evidence before the ld. CIT(A); that the business of the assessee company having been suspended temporarily, time was required to trace the said documents; that the ld. CIT(A) has failed to take into consideration these facts, coupled with the fact that because of the temporary suspension of the assessee's business, the persons who had advanced loans were not cooperating with the assessee. It has also been contended that the onetime settlement ultimately came about only in 2008. The learned counsel for the assessee has sought to place reliance on "Dwarika Prasad v. ITO", 63 ITD 1(Pat)[TM[, wherein, it had been held, inter alia, that in the day-to-day human affairs, there may be sufficient valid and explainable reasons as to why relevant evidence was not produced before the AO; and that if the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsideration of the land in accordance with section 50 C of the I.T. Act. The AO also noticed that as per the Sale Deeds, the total value for which lands had been sold, was Rs. 1,86,72,000/- as against Rs. 1,81,22,000/-. 9. Apropos the alleged difference in Circle Rate and the value for which the land had been sold, the assessee submitted that the sale value of the land was at best the prevailing market rate. The assessee had not made any claim that the value adopted or assessed by the Stamp Valuation Authority exceeded the fair market value of the property as on the date of transfer. It was stated that the valuation of land was also got done by PICUP and Bank of India. Concerning the difference between the total value for which the lands had been sold, i.e., Rs. 1,86,72,000/-, as against Rs. 1,81,22,000/-, as shown ITA Nos. 10 4308 & 4309(Del)09 in the return, it was explained that the Sale Deed included the building amount of Rs. 5,50,000/-, which was depreciable asset, computed separately. 10. The AO took the Circle Rate value of the land sold at Rs. 1,60,65,000/- as the value of sale consideration, statedly, in view of the provisions of Section 50 C of the Act. Further, observ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowed any indexation benefit to the assessee while calculating the long term capital gain. It has further been contended that all the details of the land had been filed before the AO; that however, the AO did not refer the matter to the Departmental Valuation Officer. In this regard, reliance has been placed on "Chandini Bhuchar", P&H), which has been upheld by the Hon'ble High Court. It has further been contended that the AO went wrong in observing that there was no basis for valuation of the land. It has been pointed out that the valuation as on 1.4.81 has been given in the copy of Valuation Report dated 26.6.06 (APB 235 - 242), which was filed before both the Authorities below. It has also been contended that the Purchase Deed as asked for by the AO could not be produced since it was with the official Liquidator and not in the possession of the assessee; that however, it was sought to be filed by way of additional evidence before the ld. CIT(A); and that however, the ld. CIT(A) failed to deal with this aspect of the matter. 13. The ld. DR, on the other hand, has placed strong reliance on the impugned order. As discussed above, since all the papers and books of account of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rates and Taxes. 16. Attention has also been drawn to APB 27, which is a copy of assessee's balance sheet as on 31.3.06, showing that all liabilities stood paid off. It has been pointed out that the total current liability was of Rs. 3.42 lakhs. It has been contended that this being so, addition of Rs. 8,00,000/- could not have been made. Attention has again been drawn to APB 278, which is the copy of No Due Certificate from the Bank of India, issued on 15.9.05. 17. The ld. DR, has placed strong reliance on the impugned order. 18. Here again, it is seen, that the relevant evidence was sought to be placed for the first time before the ld. CIT(A), which request was rejected. In order to arrive at a correct conclusion in the matter, the AO would have to consider the evidence. Accordingly, this issue is also remitted to the file of the AO to be decided in accordance with law on considering the evidence filed by the assessee. 19. The amended ground No.5 concerns disallowance of Rs. 22,200/-. The AO disallowed the legal expenses of Rs. 22,200/- u/s 40(a)(ia) of the Act, observing that no TDS had been deducted on this amount. The ld. CIT(A) upheld the disallowance. 20. It has been co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oo for ten to twelve years, which was beyond the control of the assessee company. Attention has been drawn to APB 284 to 287, which are the details of the amounts written off and copies of ledger account. Apropos the fixed assets written off, attention has been drawn to APB 288 to 290, containing the details of the debtors written off. 25. The ld. DR has again relied on the impugned order. 26. Here also, in keeping with the earlier years, the matter is remitted to the file of the AO to be examined and decided afresh in the light of the evidence filed by the assessee. 27. The amended ground No.7 challenges confirmation of addition of Rs. 67,50,000/- in respect of unsecured loans raised during the year. The AO observed that the assessee company had shown unsecured loan of Rs.1,30,85,20,000/-. The assessee was asked to furnish ledger accounts, confirmations, bank statement and copy of ITR in respect of unsecured loans. The assessee could not do so, for the afore-discussed reasons. The AO held that the assessee had not discharged its burden of proving genuineness of the transactions and the credit worthiness of the identity of some of the creditors amounting to Rs.70,00,000/-. The a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he value of land measuring 1.113 hectare as per "Circle Rate" of Rs. 16 lakhs per hectare works out to Rs. 17,80,800/- and the actual sale price received from sale of land was Rs. 32,63,000/- which is much higher than the "Circle Rate". The ld. AO and the ld. CIT(A) have surprisingly concluded that the sale was below the "Circle Rate" which is contrary to facts. 4. The ld. CIT(A) failed to appreciate that merely because the rate of stamp duty on property held by firm/company is double than that held by an individual, it does not and cannot mean that there are two different "Circle Rates" of the same plot of land -one if held by an individual and another if held by a firm/company. 5. The ld. CIT(A) has failed to consider the well established view repeatedly held by the Hon'ble Supreme Court and various other High Courts that the "Circle Rate" have no statutory base or force and cannot form the foundation for determining the market value of land. In the case of "Ram Adhar v. State of UP and Ors.", the Hon'ble High Court at Allahabad and in the case of Thulasimani Ammal v. CIT and Anr." [2000] 158 CTR 0005-(Mad), the Hon'ble Madras High Court and in the case of "Ramesh Chand Bansal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ernational, Hi Fi Trade Com Pvt. Ltd., now known as Octal Suppliers Pvt. Ltd., return of income e-filed by M/s. Octal Suppliers Pvt. Ltd. For assessment year 2006-07, balance confirmation of M/s. Tripti Merchants Pvt. Ltd., acknowledgement of return of income e-filed by Tripti Merchants Pvt. Ltd. for assessment year 2006-07, details of brought forward unsecured loans of Rs. 45,000/- from Ritu Delmia, documents pertaining to administrative expenses disallowed, details of interest to Bank and FI, copy of No Due Certificate of Bank of India dated 15.9.2005, copy of letter dated 17.8.2005 of appellant to Bank of India for payment of interest along with copy of cheque, copy of letter dated 30.9.2005 of appellant to UPFC for interest payment under OTS settlement, details of amount written off and other expenses, copies of receipts issued by Registrar of Companies (ROC) for fees paid for filing documents and copy of Bank Statement of the appellant for A.Y. 2006-07 38. Ground No. 3 states that the ld. CIT(A) has erred in confirming the capital gain of Rs. 57,83,640/- computed by the AO u/s 50C of the Act. It has been contended on behalf of the assessee that it was not taken in the origina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the buyer. vii) That the ld. AO has made inaccurate inferences and mathematical errors. viii) The valuation basis of 31.3.81 as contained in the valuation report was duly filed before the ld. AO but ignored by him. The valuation report clearly stated that the market value of land at Rs.11,31,350/- which was the basis for calculating the cost of acquisition." 40. Further, APB page 6 is the assessee's request dated 7.9.09 before the ld. CIT(A) for admission of the following additional ground:- "The AO invoked section 50 C of the Income Tax Act, 1961 by assuming the Circle Rate as the sale value of the land whereas the land was sold at market rate which is a price below the Circle Rate. The assessee during the course of assessment proceedings requested the AO to refer the valuation to a Valuation Officer as per the provisions laid down in section 50 C but the AO did not accede to the request and completed the assessment without observing the due process of law and violating then principles of natural justice." 41. In the impugned order, however, the ld. CIT(A) has not considered the aforesaid additional ground raised by the assessee. The matter, in our considered opinion, requir ..... X X X X Extracts X X X X X X X X Extracts X X X X
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