9911796707
TMI Blog2016 (11) TMI 251X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts and in the circumstances of the case and in law the learned Assessing Officer and Commissioner of Income Tax (Appeal) was incorrect and unjustified in adopting the value of the property under reference in this case at Rs. 13,93,400/- instead of value of the property of Rs. 2,30,000/- for which the property was sold. 4. On the facts and in the circumstances of the case and in law the learned Assessing Officer and Commissioner of Income Tax (Appeal) erred in holding of denying the exemption u/s 11 without any reason basis and evidence. 5. On the facts and in the circumstances of the case and in law the learned Assessing Officer and Commissioner of Income Tax (Appeal) was incorrect and unjustified in assessing the assessee in the status of AOP. 6. On the facts and in the circumstances of the case and in law the learned Assessing Officer and Commissioner of Income Tax (Appeal) erred in holding the assessment only on the ground that the case was time barring and the Assessing Officer was left with no alternative but to the complete the assessment. 7. On the facts and in the circumstances of the case and in law the learned Assessing and Commissioner of Income Tax ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f full value consideration enhanced by the Assessing Officer on sale of building on estimate basis. 5.1 The facts in respect of issue in dispute are that in the relevant financial year 2001-02, the assessee sold office premises at Flatted Factory Complex, Jhandewalan , New Delhi for a sum of Rs. 2,30,000/-, which was purchased in financial year 1994-1995 for a consideration of Rs. 2,32,933/- and shown capital loss of Rs. 2,933/-, which was computed as under: S. No. Particulars Amount (Rs.) 1. Full value consideration received and accrued 2,30,000/- 2. Less: Cost 2,32,933/- 3. Capital Gain/loss (-) 2,933/- 5.2 The Assessing Officer did not accept the sale consideration shown by assessee and estimated the full value of consideration at Rs. 13,93,400/- and after reducing the cost of Rs. 2,30,000/- he computed the capital gain at Rs. 11,60,400/-. Before the Assessing Officer, it was submitted on behalf of the assessee (i) that in financial year 1994-95 , the seller sold the flat to the assessee club and given the power of attorney in the name of Sh. Surender Sharma, son of late Sh. Bal Kishan Vaid, the then President of the assessee club (ii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer for his comments under section 250(4) of the Act, but no report was received from the Assessing Officer concerned. The Ld. Commissioner of Income-tax (Appeals) on the basis of the interim report of Assistant Valuation Officer upheld the addition with following findings: "2.6 I have observed that in this case reason best known to itself the appellant has not complied with any of the notices of the Deptt. i.e. from the side of the AO and also from the side of the Valuation Officer. The Deptt. has no authority to comply attendance of an assessee otherwise than due process of law. The record reveals that repeated opportunities were allowed both by the Deptt. and by the Valuation Cell but to no avail. If an appellant decides not to comply with the notice of the Deptt. either from the AO or from the Valuation Cell and if the valuation officer on the basis of his judgment gives a report (may be an interim report), there is no reasonable ground for appellant to contest the same. The appellant decided not to comply with the direction of the Deptt. at the assessment stage and to comply only at the appellate stage and to raise ground which was never raised before the A.O. The record re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear 2003-04 and not from the instant assessment year. 5.8. In view of the above submissions, the learned Authorized Representative prayed to delete the addition. 5.9 On the other hand, learned Senior Departmental Representative relied on the orders of the lower authorities. 5.10 We have heard the rival submissions and perused the relevant material on record. The undisputed fact in the case is that the addition of Rs. 11,60,400/- has been made keeping in view the full value of consideration of Rs. 13,93,400/-, estimated on the basis of the interim report of the Assistant District Valuation Officer . We find that in the case of CIT versus Smt. Nilofer (supra), it has been held as under: "7. These decisions make it more than clear that the expression "full value of consideration" that is used in s. 48 of the present Act does not have any reference to the market value but only to the consideration referred to in the sale deeds as the sale price of the assets which have been transferred." 5.11 In view of the above precedent, we find that the value of the consideration declared by the assessee as full value consideration received in accrued cannot be substituted by the value estim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned Authorized Representative further submitted that the flat was transferred to Sh. Ashish Sharma , through Sh. Surender Sharma because of compelling circumstances of prohibition of transfer by the Delhi government and the assessee was having no option other than to dispose off the said flat. On the other hand, the Ld. senior departmental representative relied on the finding of the lower authorities. 6.2 We have heard the rival submissions and perused the material on record. The Assessing Officer has withdrawn the exemption on the ground that the assessee has sold the flat for the benefit of person referred to in subsection 3 of Section 13 and thus violated the provisions of section 13 of the Act. According to section 13(1)(c) of the Act the provisions of section 11 of the Act are not applied, in case any income or property of the trust for charitable purpose is applied directly or indirectly for the benefit of the persons, whose list is mentioned in subsection 3 of section 13 of the Act. The list of such persons is reproduced as under: "3) The persons referred to in clause (c) of sub-section (1) and sub-section (2) are the following, namely :- (a) the author of the trust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view of the restriction on the use of the property and lack of title in the favour of the assessee, the assessee was compelled to transfer the property to Sh. Surender Sharma in absence of any buyer as stated by Sh. Dinesh Chand Gupta, President of the club at the time of assessment proceeding. In his statement recorded on 18/02/2005 under section 131 of the Act, he stated the facts and circumstances under which the property was sold to Sh. Surender Sharma and justified that the property was sold at market value. Relevant part of the statement has already been reproduced by the Assessing Officer in the assessment order . In view of above circumstances, we find that there is no violation of provisions of section 13(2) (f) of the Act in the case of the assessee and accordingly the benefit of exemption under section 11 of the Act cannot be withdrawn. Thus the actions of the Assessing Officer in assessing the assessee club as AOP and withdrawing of exemption are held as incorrect and not according to the law. The grounds No. 4 & 5 of the appeal are accordingly allowed. 7. In ground No. 7, the assessee challenged the disallowance of Rs. 3,44,614/- @ 20%, out of expenditure incurred of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing best judgment assessment, the authorities concerned should try to make an honest and fair estimate of the income and should not make the addition of arbitrarily. We find that in the case of the assessee also the disallowance has been made in ad hoc manner without any justified reasons, therefore the disallowance made by the Assessing Officer and confirmed by the learned Commissioner of Income-tax (Appeals) is deleted. The ground No. 7 of the appeal is accordingly allowed. 8.4 In ground No. 9 of the appeal, the assessee challenged disallowance of Rs. 75,000/- out of the expenses of Rs. 2,32,946/- on account of annual general meetings and members meeting. The Assessing Officer noted that those expenses are unverifiable and in the nature of personal nature, and therefore he disallowed the expenses of Rs. 75,000 out of Rs. 2,32,946/- claimed by the assessee. The learned Commissioner of Income-tax (Appeals) upheld the disallowance. 8.5 Before us, the learned Authorized Representative submitted that disallowance was without any basis and not permissible in law in view of the judgments referred in case of ground No. 7 of the appeal. 8.6 The learned Sr. Departmental Representative, ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
