2015 (3) TMI 606

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....p circle rate / stamp value of the property, which was found to be at Rs. 14,89,520/- and consequent applicability of Section 50C thereon. The assessee furnished following reply. "(A) the appellant purchased semi constructed plot with unfinished boundary wall in the name of his sister Smt. Manju Dhanka during F.Y. 1991-92 from Shri Arum Kumar Gupta, 28/430, Gumanpura Kota, vide agreement dated 14-09-1991. Details of expenses incurred in F.Y. 1991-92 were as under:- (B) (i) lease rent payment made to Rajasthan Housing Board. Rs. 8,300/- (ii) Stamp expenses for getting registration from Rajasthan Housing Board. Rs. 22,998/- (iii) Payment made to Sh Arun Kumar Gupta (Vendor) Rs.1,98,811/- (iv) Stamp expenses on 09-03-1992 Rs. 23,635/- (v) Registration expenses on 10-03-1992 Rs. 17,496/- (vi) Expenses incurred on getting boundary wall repaired. Rs. 29,051-   Total Rs. 2,97311/-   (a) F.Y. 1991-92 Rs. 2,97,311/-. This is evident from zerox copy of deed of purchase of plot, copy whereof has been furnished by me vide annexure A of letter dated 02-06-2008. In my said letter it has been very categorically m....

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....8066 dtd 18-03-05 Rs. 1,897   A sum of Rs. 39,400/- is appearing in books of account and financial statements appended to ROI for assessment year 2005-06" 1.3 The AO further observed as under:- 1.4 In view of the material, facts and judicial precedents, ld. AO held it to be a colourable transaction and applied the ratio of Hon'ble Supreme Court in the case of Mcdowell and Co. Ltd. vs. Commercial Tax Officer, 154 ITR 148  which has been relied on in the case of Hon'ble Mumbai High Court in the case of Smt. Nayantara G. Agarwal vs. CIT, 207 ITR 639 by holding as under. "While considering device to avoid tax, it is not to ask whether the provision should be construed literally or liberally, nor whether the transaction is not unreal and not prohibited by the statute but whether the transaction is a device to avoid tax, and whether the transaction is such that the judicial process may accord its approval to it. It is up to the Court to take stock to determine the nature of the new and sophisticated legal devices to avoid tax and to consider whether the situation created by the devices could be related to the existing legislation with the aid of emerge....

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....ousing Board in name of Arun Kumar Gupta Rs. 22,998/- (b) Payment made to Rajasthan Housing Board Rs. 8,300/- (c) Expenses incurred on getting repairs Rs. 29,051/-     Rs. 60,349/-   However, before me the expenses of Rs. 60,349/- were claimed to be incurred on construction of boundary wall. Accordingly out of Rs. 27,937/- details in relation to Rs. 60,349/- were contradictory and cannot be accepted. Out of remaining expenses, there was no evidence in relation to expenses of Rs. 17,496/-. The remaining expenditure cannot be treated as spent for purchase of plot, this expenditure comes to Rs. 2,19,466/- As per Section 48, this expenditure is allowable as cost of acquisition. However, the Assessing Officer did not allow the expenses as entire expenses were admittedly undisclosed. In my opinion, in such cases Section 69C is directly applicable. For ready reference, the same is reproduced below:- "Where in any financial year an assessee has incurred any expenditure and he offers no explanation about the source of such expenditure or part [Assessing] officer, satisfactory, the amount covered by such expenditure or part....

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.... owned by the assessee albeit as Benami property, only the cost of acquisition, improvement and indexation has been denied as they are not reflected in the books of accounts. The revenue has not challenged the finding of ld. CIT(A) in respect of ownership and the asset being long terms benami property. Therefore, the issue about the assessee being Benami owner of the property in question is not in dispute. 3.2 Section 69C of the Act reads as under. "69C Where in any financial year an assessee has incurred any expenditure and he offers no explanation about the source4 of such expenditure or part thereof, or the explanation, if any, offered by him is not, in the opinion of the [Assessing] Officer, satisfactory, the amount covered by such expenditure or part thereof, as the case may be deemed to be the income of the assessee for such financial year:] [Provided that, notwithstanding anything contained in any other provision of this Act, such unexplained expenditure which is deemed to be income of the assessee shall not be allowed as a deduction under any head of income.]" The ld. Counsel for the assessee contends that once section 50C is held to be applicable and the transa....

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....ere incurred from explained sources. It is not true. Investment of Rs. 77726/- is verifiable from balance sheet of the appellate and Rs. 39400/- from balance sheet of Garg Sari Emporium. These are evident from PB 39 to 41 & 42 which were available with both lower authorities. Besides, it is further supported with capital account for assessment year 2006-07 also. Moreover, once expenses are proved with evidence even if it is not from explained source the same is to be deducted. 3.5 The ld. Counsel for the assessee contends that once section 50C is to be held applicable and the asset and sale thereof is held to be long term capital gains, the provision of section 48 will be automatically applicable as necessary consequences are provided as under:- "Section 48. The income chargeable under the head 'capital gains' shall be computed by deducting from the full value of the consideration received or accruing as a result of the transfer of the capital asset the following amounts, namely:- (i) expenditure incurred wholly and exclusively in connection with such transfer; (ii) the cost of acquisition of the asset and the cost of any improvement thereto;" 3.6 It is pleaded t....

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....nce' and it does not refer to any cost of improvement. Similarly in account for assessment year 2006-07 again, the only reference is of - "cost of plot transfer" there is again no mention about cost of improvement or boundary wall construction. Thus the story is fabricated by the assessee as an afterthought to evade maximum tax by such unfounded claims. The assessee has acted in a very indiscreet manner by not disclosing the Benami property and without making any investment in the books of account towards improvement of this property. Assessee as is obvious is a clever person well versed with the intricacies of law. It is unbelievable that he will dare to show expenditure of improvement for the property which is originally not disclosed in his earlier books at all. 4.3 It is contended that in empirical terms this is a fit case where the assessee's entire income in this behalf shall be treated as income from other sources. The materials available on record shows that the assessee has audacity to claim that though he has evaded taxes in past by not disclosing the cost of acquisition, nevertheless allow me all claims and no harm can be done by the Revenue for past years as ....

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....d Rs. 39,400/-, we have already rejected the assessee's claim being without any basis and it digress from the issue. 6. There is another provision of law which denies any such benefit to assessee in the form of sec. 4 of THE BENAMI TRANSACTIONS (PROHIBITION) ACT, 1988. Sec. 4 thereof reads as under: "4. Prohibition of the right to recover property held benami- (1) No suit, claim or action to enforce any right in respect of any property held benami against the person in whose name the property is held or against any other person shall lie by or on behalf of a person claiming to be real owner of such property. (2) No defence based on any right in respect of any property held benami, whether against the person in whose name the property is held or against any other person, shall be allowed in any suit, claim or action by or on behalf of a person claiming to be the real owner of such property." This law was introduced as an overriding law as mentioned in sec. 3 to curb the pernicious practices of Benami Transaction and denying the benefits of enjoyment of Benami property to real owner. Sec. 4(1) clearly forbids any claim or action from real owner in respect of any Be....

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....¥‡ यह अघोषित विनियोग उसी वर्ष में किया हैं । इसके अलावा जो विनियोग वित्तिय वर्ष 2002-03 में रू. 77726 /- तथा वित्तिय वर्ष 2004-05 रू.39400 / - होना बताया है, इसे निर्धारिती ने अपनी बैलेंश शीट में रू. 77726/- को प्लाट एडवांस के नाम से दिखाया हैं । उस बैलेंश शीट में यह न....

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....¹à¥€ होता है कि यह राशि इस बेचे गये प्लॉट में विनियोग की है । यह बात निर्धारिती के कथन व तथ्यों में विरोधाभास ही दर्शाती है । निर्धारिती द्वारा इस प्लॉट के सौदे की राशि को इसी वर्ष अघोषित विनियोग कहते हुये दिखाया है जो कि निर्धारिती....

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....¥€ प्रोफेशनल के रूप में एक सीनियर चार्टड एकाउन्टेण्ट की सेवाएँ लेता रहा है । ऐसे में उसका यह कहना कि उसे प्रावधानों की जानकारी नही है सत्य प्रतीत नही होता है । जबकि सभी संदर्भित बैलेन्श शीटस् की प्रविष्टियाँ उसकी देखरेख में तैय....

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....®à¥‡à¤‚ इस प्लाट की बिक्री की राशि को नियमित घोषित स्त्रोत से आय कैसे मानी जा सकती है चूँकि निर्धारिती ने उपरोक्त राशि प्रथम बार चालू वित्तिय वर्ष की लेखा पुस्तकों में पूँजी खाते के अनुसार दर्शायी है तथा पूर्ववर्ती निवेशों की घोषà....