Smt. Bijalben Vipulbhai Haria, Ahmedabad V. The Dy. Commissioner of Income Tax, Circle-1(1)(1), Ahmedabad

CO 110/AHD/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 1951 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 24 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 05-09-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 11-07-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: L P JAIN
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Business income
• Section: 50C

Judgement Text

, C IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER & SHRI WASSEM AHMED, ACCOUNTANT MEMBER ./ I.T.A. NO. 1554/AHD/2016 WITH C.O. NO. 110/AHD/2016 ( / ASSESSMENT YEAR: 2010-11) DCIT CIR. 1(1)(1), A WING, ROOM NO. 309, 3 RD FLOOR, PRATYAKHSH KAR BHAVAN, AMBAWADI, AHMEDABAD- 380015 SMT BIJALBEN VIPULBHAI HARIA 2, INDRAPRASTHA BUNGLOW, OPP MANAGEMENT ENCLAVE, VASTRAPUR, AHMEDBAD-380015 / VS. SMT BIJALBEN VIPULBHAI HARIA 2, INDRAPRASTHA BUNGLOW, OPP MANAGEMENT ENCLAVE, VASTRAPUR, AHMEDBAD- 380015 DCIT CIR. 1(1)(1), A WING, ROOM NO. 309, 3 RD FLOOR, PRATYAKHSH KAR BHAVAN, AMBAWADI, AHMEDABAD- 380015 ./ ./ PAN/GIR NO. : AAC PH7 513 E ( APPELLANT /RESPONDENT ) .. ( RESPONDENT /CROSS OBJECTOR ) / APPELLANT BY : SHRI L. P. JAIN, SR. DR, / RESPONDENT BY : SHRI DHIREN SHAH, AR / DATE OF HEARING 13/06/2019 !'# / DATE OF PRONOUNCEMENT 05/09/2019 $%/ O R D E R PER MAHAVIR PRASAD - JM: THIS APPEAL HAS BEEN PREFERRED BY THE REVENUE AGAIN ST THE ORDER OF LD. CIT(A)-VI/DCIT, CIR-1/146/2013-14 DATE D 29.03.2016 ARISING OUT OF ASSESSMENT ORDER DATED 26.03.2013. IN THE REVENUES APPEAL ASSESSEE HAS ALSO FILED CROSS OBJECTION CAPT IONED ABOVE. ITA NO.1554/AHD/2016 WITH C.O. NO. 110/AHD/2016 [DC IT VS. SMT. BIJALBEN VIPULBHAI HARIA] A.Y. 2010-11 - 2 - 2. FACTS OF THE CASE ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDING LD. AO RECEIVED AIR INFORMATION THAT ASS ESSEE HAD SOLD THREE PIECES OF LAND DURING THE PREVIOUS YEAR PERTI NENT TO A.Y. 2010- 11 TO M/S. AQUEST ESTATE PVT. LTD. THE DETAILS OF THE SAME ARE AS UNDER:- SL. NO. LAND DETAIL TOTAL SALES CONSIDERATION A. SURVEY NO. 324/2 1,00,76,070 B. SURVEY NO. 324/1 32,80,950 C. SURVEY NO. 323 1,32,57,660 BUT LD. AO WAS NOT AGREE WITH THE CONTENTION AND MA DE DISALLOWANCE U/S. 50C TO THE TUNE OF RS. 2,56,94,89 6/- AGAINST THE SAID ORDER THEREAFTER ASSESSEE PREFERRED FIRST STAT UTORY APPEAL BEFORE THE LD. CIT(A) WHO ALLOWED THE APPEAL OF THE ASSESS EE. 3. NOW REVENUE HAS COME BEFORE US BY WAY OF SECOND STATUTORY APPEAL. 4. WE HAVE GONE THROUGH THE RELEVANT RECORD AND HEA RD BOTH THE PARTIES. THE QUESTION BEFORE US IS WHETHER CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF RS. 2,56,94,896/- MADE ON ACCOUNT OF 50C OF THE ACT OR NOT. ASSESSEE PURCHASED FOLLOWING PR OPERTIES IN THE NAME OF M/S. KIRTIKUMAR KANTILAL SHAH (HUF) DURING THE PERIOD FROM F.Y. 1995-96 TO 1999-00 FOR A TOTAL CONSIDERAT ION OF RS. 12,76,493/-. THE DETAILS OF THE PURCHASE ARE AS UN DER:- SL. NO. SURVEY NO. YEAR OF PARTICULARS AMOUNT PAID 1. 324/1 1995-96 PURCHASE OF LAND 48,500 1996-97 MAINTENANCE EXPENSES 10,870 1997-98 INTEREST AND 10,237 ITA NO.1554/AHD/2016 WITH C.O. NO. 110/AHD/2016 [DC IT VS. SMT. BIJALBEN VIPULBHAI HARIA] A.Y. 2010-11 - 3 - SERVICE CHARGES 1998-99 INTEREST 12,530 1999-00 INTEREST 19,726 AND LATER OF THESE PROPERTIES ABOVE SAID PROPERTIES WERE MORTGAGED WITH THE MADHUPURA MERCANTILE CO. OP. BANK LTD. AGA INST LOAN TAKEN FOR THEIR BUSINESS PURPOSE. THEREAFTER, SHE ENTERED INTO A BANAKHAT (AGREEMENT TO SELL) WITH M/S. RADHE INFRAS TRUCTURE (INDIA) LTD. ON 02 .05.2005 FOR SALE OF THE LANDS AT A CONS IDERATION OF RS. 38,57,200/- AND RECEIVED AN AMOUNT OF RS. 20,00,000 /- TOWARDS THE SAME OF ADVANCE. HOWEVER, AS PER THE POSSESSION OF AGREEMENT AMOUNT OF RS. 20,00,000/- WAS PAID ON30.04.2006 AS PER THE AGREEMENT TO SALE DATED 02.05.2005. THE ASSESSEE W AS REQUIRED GET THE TITLE OF THE PROPERTIES CLEARED AND MAKES THE S AME MARKETABLE. THE FINAL CONVEYANCE DEED WAS TO BE CARRIED OUT AFT ER CONVERSION OF THE LANDS TO NON-AGRICULTURE LAND. HOWEVER, THE BU YER WAS TO BEAR ALL COSTS OF SUCH CONVERSION. THE SECOND PARTY IN THE BANAKHAT WAS TO BE CONFIRMING PARTY WHEN THE LAND IS FINALLY SOL D AT HIS INSTANCE. THE ASSESSEE IN THE MEANWHILE WAS TO GET THE CHARGE OF MADHUPURA MERCANTILE CO. OP. BANK LTD. REMOVED FROM THE PROPE RTY AND OBTAINED A NOC FROM THE BANK IN THIS REGARD. ACCOR DING TO THE ASSESSEE, THE LAND WAS FINALLY CONVERTED TO NON-AGR ICULTURAL USE IN THE YEAR UNDER CONSIDERATION AND SOLD TO ULTIMATE B UYER, AQUEST ESTATE PVT. LTD. THE CONVEYANCE DEED WAS MADE BY T HE ASSESSEE AND RADHE INFRASTRUCTURE (INDIA) LTD. WAS THE CONFIRMIN G PARTY. THE TOTAL SALES CONSIDERATION WAS SHARED BETWEEN THE AS SESSEE AND THE CONFIRMING PARTY IN THE FOLLOWING MANNER:- SL. NO. LAND DETAILS DATE OF REGD. SALE DOCUMENT TOTAL SALE CONSIDERATION OWNER (SMT BIJAL HARIA) CONFIRMING PARTY (RADHE INFRASTRUCTURE (I) LTD.) I LAND AT SURVEY NO. 324/2 25.08.2009 1,00,76,070 19,21,400 1,13,36,260 ITA NO.1554/AHD/2016 WITH C.O. NO. 110/AHD/2016 [DC IT VS. SMT. BIJALBEN VIPULBHAI HARIA] A.Y. 2010-11 - 4 - II LAND AT SURVEY NO. 324/1 25.08.2009 32,80,950 4,75,500 28,05,450 III LAND AT SURVEY NO. 323 25.08.2009 1,32,57,660 14,60,300 89,15,770 2,66,14,680 38,57,200 2,27,57,480 AND FINALLY LAND WAS CONVERTED INTO NON-AGRICULTURE LAND ON 06.08.2009, JUST PRIOR TO ITS SALE BY EXECUTING THE SALE DOCUMENT ON 25.08.2009. FROM THE FACTS, IT IS CLEAR THAT THE S AID LAND WHICH WAS AN AGRICULTURE LAND ON TILL 05.08.2009. THE SAID L AND WHICH WAS AN AGRICULTURE LAND IN 2006, COULD NOT BE SOLD BY THE AGRICULTURIST TO A NON-AGRICULTURIST, IN GUJARAT AS PER THE BOMBAY TEN ANCY AND AGRICULTURAL LANDS ACT, 1948. THE ASSESSEE SOLD TH E LAND IN QUESTION FOR TOTAL CONSIDERATION OF RS. 2,66,14,680 /-. OUT OF WHICH IT IS SHOWN THAT THE ASSESSEE RECEIVED RS. 38,57,20 0/- AND BALANCE IS SHOWN AS RECEIVED BY THE BUILDER AQEUST ESTATE PVT. LTD. AS CONFIRMING PARTY. THE RADHE INFRASTRUCTURE PVT. LT D. AND PROJECT RECEIVED RS. 2,27,57,480/- AS CONFIRMING PARTY TO T HE CONVEYANCE DEED EXECUTED BY THE ASSESSEE IN FAVOUR OF ACQUEST ESTATE PVT. LTD. AND THE SAME HAS BEEN OFFERED BY THE SAID COMPANY I N THE RETURN OF INCOME FILED FOR A.Y. 2010-11. WHEN ACQUEST ESTATE PVT. LTD. HAS OFFERED IN ITS RETURN OF INCOME THAT CANNOT BE TAXE D IN THE HANDS OF THE ASSESSEE. IN SUPPORT OF ITS CONTENTION ASSESSE E CITED A JUDGMENT OF CO-ORDINATE BENCH IN THE MATTER OF SMT. SAPNABEN DIPAKHAI PATEL VS. ITO [2016] 73 TAXMANN.COM 288 (AHMEDABAD TRIB .) WHEREIN IN SIMILAR CIRCUMSTANCES MATTER WAS DECIDED IN FAVO UR OF ASSESSEE WITH FOLLOWING OBSERVATION:- SECTION 45, READ WITH SECTION 2(47), OF THE INCOME- TAX ACT, 1961 CAPITAL GAINS CHARGEABLE AS (UNREGISTERED SALE DE ED) ASSESSMENT YEAR 2010-11 ASSESSEE PURCHASED CERTAIN AGRICULTU RAL LAND BETWEEN 18- 12-2007 TO 4-3-2008 ON 4-4-2008, ASSESSEE ENTERED INTO AN AGREEMENT WITH SDS TO SELL SAID LAND FOR CERTAIN CONSIDERATIO N SUBSEQUENTLY, BY ANOTHER AGREEMENT DATED 2-3-2009 ENTERED INTO AMONG ASSESSEE, SDS AND ITA NO.1554/AHD/2016 WITH C.O. NO. 110/AHD/2016 [DC IT VS. SMT. BIJALBEN VIPULBHAI HARIA] A.Y. 2010-11 - 5 - ONE GPPL SAID LAND WAS AGREED TO BE SOLD TO GPPL FO R A MUCH HIGHER SUM BY ANOTHER AGREEMENT OF SAME DATE ASSESSEE WA S PAID SALE CONSIDERATION AS PER AGREEMENT DATED 4-4-2008 POS SESSION OF LAND WAS HANDED OVER BY ASSESSEE TO GPPL DEED OF SALE WAS REGISTERED ON 27-1- 2010 DISCLOSING HIGHER AMOUNT OF SALE CONSIDERATION ASSESSING OFFICER HELD THAT CAPITAL GAINS ON TRANSFER OF LAND WAS TO BE ASSESSED IN YEAR 2010-11 ON BASIS OF SALE DEED REGISTERED ON 27-1-20 10 FOR HIGHER SALE CONSIDERATION WHETHER SINCE SDS HAD A RIGHT TO GE T AGREEMENT DATED 4- 4-2008 ENFORCED BY WAY OF SUIT FOR SPECIFIC PERFORM ANCE AND ASSESSEE COULD BE PERSUADED TO EXECUTE SALE DEED IN FAVOUR O F SDS BY VIRTUE OF THIS AGREEMENT, SHE COULD BE CHARGED FOR CAPITAL GA IN ON AMOUNT MENTIONED IN THAT AGREEMENT ONLY HELD, YEA WHET HER, TRANSFER WITHIN MEANING OF SECTION 2(47)(V) WAS COMPLETE ON EXECUTI ON OF AGREEMENT DATED 2-3-2009, WHEN POSSESSION OF LAND WAS HANDED OVER TO GPPL AND CAPITAL GAINS ON SALE PROPERTY COULD NOT BE CHARGED IN RELEVANT ASSESSMENT YEAR ON BASIS OF SALE DEED REGISTERED ON 21-1-2010 HELD, YES [PARA 32] [IN FAVOUR OF ASSESSEE] 5. SINCE M/S. RADHE INFRASTRUCTURE AND PROJECTS (IN DIA) LTD. HAS DECLARED INCOME IN ITS RETURN, THEREFORE, SAME CANN OT BE ASSESSED IN THE HANDS OF THE ASSESSEE. THUS, IN PARITY WITH CO -ORDINATE BENCH JUDGMENT AND FACTS AND CIRCUMSTANCES OF THE CASE WE DO NOT INTERFERE IN THE ORDER PASSED BY THE LD. CIT(A) AS HE HAS PASSED DETAILED AND REASONED ORDER. 6. IN THE RESULT, APPEAL FILED BY THE REVENUE IS D ISMISSED. 7. NOW WE COME TO C.O. NO. 110/AHD/2016 FILED BY TH E ASSESSEE. SINCE C.O. SUPPORTIVE TO THE ORDER OF THE LD. CIT(A ), THEREFORE, SAME IS DISMISSED AS INFRUCTUOUS. 8. IN THE RESULT, C.O. OF THE ASSESSEE IS DISMISSED . SD/- SD/- (WASEEM AHMED) (MAHA VIR PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 05/09/2019 TANMAY TRUE COPY !' #' / COPY OF ORDER FORWARDED TO:- 1. / REVENUE THIS ORDER PRONOUNCED IN OPEN COURT ON 05/09/2019 ITA NO.1554/AHD/2016 WITH C.O. NO. 110/AHD/2016 [DC IT VS. SMT. BIJALBEN VIPULBHAI HARIA] A.Y. 2010-11 - 6 - 2. $ / ASSESSEE 3. ) *+ , / CONCERNED CIT 4. ,- / CIT (A) 5. 012 33*+, *+#, 56$)$ / DR, ITAT, AHMEDABAD 6. 289 : / GUARD FILE. BY ORDER / $% , ;/5 *+#, 56$)$ < 1.DATE OF DICTATION ON 29.08.2019 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING MEMBER 04.09.2019 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. 04.09.2019 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 04.09.2019 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S 05.09.2019 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 05.09.2019 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER