Sri.T.G.Chandrakumar, Trichur V. ACIT, Trichur

CO 25/COCH/2013

• Counselvise Citation: [2013] 122 COUNSELVISE.COM (IT) 9046 (ITAT-COCHIN)
• Duration Of Justice: 1 month(s) 18 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 25-10-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 10-10-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 06-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: V SIVARAMAKRISHNAN
• Keywords: Capital asset
• Section: 54B

Judgement Text

1 ITA NO.465/COCH/2013 CO NO.25/COCH/2013 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI B.R. BASKA RAN(AM) I.T.A NO.465/COCH/2013 (ASSESSMENT YEAR 2009-10) A.C.I.T., CIR.2(1) VS SHRI T.G. CHANDRAKUMAR RANGE-2, TRICHUR PRASUNAM, SREE RAMAKRISHNA ASHRAM LANE, POOKUNAM TRICHUR-2 PAN : ABBPC2303A (APPELLANT) (RESPONDENT) C.O. NO.25/COCH/2013 (ARISING OUT OF I.T.A NO.465/COCH/2013) (ASSESSMENT YEAR 2009-10) SHRI T.G. CHANDRAKUMAR VS A.C.I.T., CIR.2(1) POOKUNAM, TRICHUR-2 TRICHUR (CROSS OBJECTOR) (RESPONDENT) REVENUE BY : SHRI M ANIL KUMAR, CIT SMT. LATHA V KUMAR ASSESSEE BY : SHRI V SIVARAMAKRISHNAN DATE OF HEARING : 10-10-2013 DATE OF PRONOUNCEMENT : 25-10-2013 O R D E R PER N.R.S. GANESAN (JM) THE REVENUE FILED THE PRESENT APPEAL AGAINST THE O RDER OF CIT(A)-V, KOCHI DATED 28-03-2013 FOR THE ASSESSMENT YEAR 2009 -10 AND THE 2 ITA NO.465/COCH/2013 CO NO.25/COCH/2013 ASSESSEE FILED THE CROSS OBJECTION AGAINST THE VERY SAME ORDER OF CIT(A). THEREFORE, WE HEARD THE APPEAL AND THE CROSS OBJECT ION TOGETHER AND DISPOSE OF THEM BY THIS COMMON ORDER. 2. SHRI M ANIL KUMAR, THE LD.DR SUBMITTED THAT THE ONLY ISSUE ARISES FOR CONSIDERATION IS GRANT OF DEDUCTION U/S 54B OF THE ACT. ACCORDING TO THE LD.DR, THOUGH THE DOCUMENT WAS EXECUTED AND REGISTE RED ON 28-06-2008 THE CIT(A) FOUND THAT ON THE DATE OF AGREEMENT ON 1 7-03-2007 THE POSSESSION OF THE PROPERTY WAS HANDED OVER TO THE P URCHASER TOWARDS PART PERFORMANCE OF THE AGREEMENT. THEREFORE, THERE WAS TRANSFER OF PROPERTY UNDER THE INCOME-TAX ACT. ACCORDING TO THE LD.DR, IF THERE IS A TRANSFER ON 17-03-2007, THEN THE TRANSFER TOOK PLACE IN THE ASS ESSMENT YEAR 2007-08, THEREFORE, DEDUCTION U/S 54B COULD BE CLAIMED ONLY IN ASSESSMENT YEAR 2007-08 AND NOT DURING THE YEAR UNDER CONSIDERATION . THEREFORE, THE CIT(A) IS NOT JUSTIFIED IN GRANTING DEDUCTION U/S 5 4B BY HOLDING THAT THE TRANSFER TOOK PLACE ON 17-03-2007. 3. ON THE CONTRARY, SHRI V SIVARAMAKRISHNAN, THE LD .REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT AS PER SECTION 54B OF T HE ACT, WHERE THE CAPITAL GAIN ARISES FROM THE TRANSFER OF A CAPITAL ASSET BEING LAND WHICH, IN THE TWO YEARS IMMEDIATELY PRECEDING THE DATE ON WHI CH THE TRANSFER TOOK 3 ITA NO.465/COCH/2013 CO NO.25/COCH/2013 PLACE, WAS BEING USED BY THE ASSESSEE OR A PARENT O F HIS FOR AGRICULTURAL PURPOSES, AND THE ASSESSEE HAS, WITHIN A PERIOD TWO YEARS AFTER THAT DATE, PURCHASED ANY OTHER LAND FOR BEING USED FOR AGRICUL TURAL PURPOSES, THEN, THE ASSESSEE IS ENTITLED FOR EXEMPTION FROM CAPITAL GAIN TAX UNDER THIS SECTION. IN THIS CASE, IT IS NOT IN DISPUTE THAT T HE ASSESSEE PURCHASED ANOTHER AGRICULTURAL LAND WITHIN A PERIOD OF TWO YE ARS AFTER THE TRANSFER I.E. 17-03-2007. ACCORDING TO THE LD.REPRESENTATIVE, TH E ASSESSEE COULD CLAIM DEDUCTION IN THE YEAR IN WHICH THE PURCHASE WAS COM PLETED. ACCORDING TO THE LD.REPRESENTATIVE, AFTER RECEIVING THE SALE CON SIDERATION ON 17-03-2007 IT WAS USED FOR PURCHASE OF AGRICULTURAL LAND ON 17 -04-2007. THEREFORE, ACCORDING TO THE LD.REPRESENTATIVE, THE AMOUNT WAS UTILIZED FOR PURCHASE OF ANOTHER PROPERTY WITHIN A PERIOD OF TWO YEARS. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. IT APPEA RS THAT THE ASSESSEE ENTERED INTO AN AGREEMENT FOR SALE OF PROPERTY ON 1 7-03-2007 FOR A TOTAL CONSIDERATION OF RS.107 LAKHS. AS PER THE SALE AGR EEMENT, PART OF THE SALE CONSIDERATION HAS TO BE PAID ON OR BEFORE 17-03-200 7 AND THE ASSESSEE HAS TO HAND OVER THE PHYSICAL POSSESSION OF THE PRO PERTY TO THE PURCHASER. THE PURCHASER APPEARS TO HAVE PAID RS.50 LAKHS IN T HREE INSTALMENTS BEFORE 17-03-2007 AND THE ASSESSEE HANDED OVER THE POSSESSION OF 50 4 ITA NO.465/COCH/2013 CO NO.25/COCH/2013 CENTS OF LAND. THE ASSESSEE INVESTED RS.56 LAKHS O N 17-04-2007 IN ANOTHER AGRICULTURAL LAND AND CLAIMED DEDUCTION U/S 54B OF THE ACT. THE ASSESSING OFFICER REJECTED THIS CLAIM OF THE ASSESS EE ON THE GROUND THAT THE INVESTMENT WAS MADE BEFORE EXECUTION OF THE REGISTE RED SALE DEED. THE ASSESSING OFFICER FOUND THAT THE REGISTERED SALE DE ED WAS EXECUTED ON 28- 06-2008, THEREFORE, THE INVESTMENT MADE BY THE ASSE SSEE BEFORE THE EXECUTION OF THE SALE DEED MAY NOT BE ELIGIBLE FOR EXEMPTION U/S 54B OF THE ACT. IT IS NOT IN DISPUTE THAT THE ASSESSEE HANDED OVER THE PHYSICAL POSSESSION OF THE PROPERTY ON 17-03-2007 AS PART PE RFORMANCE OF THE AGREEMENT FOR SALE ON RECEIPT OF RS.50 LAKHS. THER EFORE, THOUGH UNDER THE COMMON LAW, EXECUTION AND REGISTRATION OF THE SALE DEED IS MANDATORY FOR TRANSFER OF IMMOVABLE PROPERTY WORTH MORE THAN RS.1 00, UNDER THE INCOME- TAX ACT, WHEN THE POSSESSION OF THE PROPERTY WAS HA NDED OVER TO THE PURCHASER TOWARDS PART PERFORMANCE OF THE SALE AGRE EMENT, THERE WAS A TRANSFER. THEREFORE, THE CIT(A) FOUND THAT UNDER T HE INCOME-TAX ACT, THERE WAS A TRANSFER ON 17-03-2007 WHEN THE PHYSICAL POSS ESSION OF THE PROPERTY WAS HANDED OVER. THIS FINDING OF THE CIT( A) IS NOT DISPUTED BY THE REVENUE. THIS TRIBUNAL IS OF THE CONSIDERED OP INION THAT UNDER THE INCOME-TAX ACT, THE TRANSFER TOOK PLACE ON THE DATE ON WHICH THE PHYSICAL POSSESSION OF THE PROPERTY WAS HANDED OVER. 5 ITA NO.465/COCH/2013 CO NO.25/COCH/2013 5. NOW THE ONLY DISPUTE IS THAT WHEN THE TRANSFER T OOK PLACE ON 16-03- 2007, I.E. IN THE ASSESSMENT YEAR 2007-08, COULD TH E ASSESSEE CLAIM EXEMPTION U/S 54B IN THE ASSESSMENT YEAR UNDER CONS IDERATION? THE ASSESSEE INVESTED RS.56,00,006 ON 17-04-2007 FOR PU RCHASE OF THE PROPERTY. THEREFORE, THE ASSESSEE HAS UTILIZED THE FUNDS IMMEDIATELY AFTER RECEIVING THE SALE CONSIDERATION. SECTION 54B PROV IDES FOR EXEMPTION PROVIDED THE ASSESSEE PURCHASED THE PROPERTY WITHIN A PERIOD OF TWO YEARS AFTER THE DATE OF SALE. THOUGH THE INVESTMENT WAS MADE FOR PURCHASE OF ANOTHER PROPERTY, IT IS NOT KNOWN WHETHER THE ASSES SEE HAS ACTUALLY PURCHASED THE PROPERTY OR NOT? FROM THE ORDER OF T HE LOWER AUTHORITIES IT IS NOT KNOWN WHEN THE ASSESSEE ACTUALLY PURCHASED THE PROPERTY. UNDER THE INCOME-TAX ACT, THE ASSESSEE HAS TO PURCHASE THE PR OPERTY BY TAKING OVER THE PHYSICAL POSSESSION. THE TRANSACTION OF SALE S HALL BE COMPLETED WITHIN THE PERIOD OF TWO YEARS AFTER DATE OF SALE I.E. 17- 03-2007. IN THE ABSENCE OF ANY MATERIAL TO SHOW THAT THE TRANSACTION OF PUR CHASE OF PROPERTY BY THE ASSESSEE BY INVESTING THE SALE CONSIDERATION WITHIN A PERIOD OF TWO YEARS FROM THE DATE OF SALE, I.E. 17-03-2007, THIS TRIBUN AL IS OF THE CONSIDERED OPINION THAT THE ASSESSING OFFICER HAS TO RECONSIDE R THE MATTER AND FIND OUT WHEN ACTUALLY THE SALE WAS COMPLETED UNDER THE INCO ME-TAX ACT FOR PURCHASE OF PROPERTY INVESTING THE SALE CONSIDERATI ON. WE MAKE IT CLEAR THAT GIVING ADVANCE FOR PURCHASE OF PROPERTY IS ALS O A UTILIZATION OF THE SALE 6 ITA NO.465/COCH/2013 CO NO.25/COCH/2013 CONSIDERATION IN THE PROCESS OF PURCHASE OF THE PRO PERTY. THE LANGUAGE EMPLOYED BY THE LEGISLATURE IS PURCHASE. THEREFO RE, THE ASSESSEE SHOULD HAVE CONTROL OVER THE PROPERTY EITHER BY TAKING PHY SICAL POSSESSION AS PART PERFORMANCE OF SALE OR BY COMPLETING THE ENTIRE SAL E TRANSACTION. IN THE ABSENCE OF ANY MATERIAL, THIS TRIBUNAL IS NOT IN A POSITION TO CONCLUDE WHEN ACTUALLY THE PURCHASE TRANSACTION COMPLETED FOR CLA IMING EXEMPTION U/S 54B OF THE ACT. ACCORDINGLY, THE ORDER OF THE LOWE R AUTHORITIES ARE SET ASIDE AND THE ASSESSING OFFICER IS DIRECTED TO FIND OUT T HE DATE ON WHICH THE ASSESSEE HAS ACTUALLY PURCHASED ANOTHER AGRICULTURA L LAND AND THEREAFTER DECIDE THE ISSUE OF EXEMPTION U/S 54B OF THE ACT IN ACCORDANCE WITH LAW. 6. IN THE RESULT, THE APPEAL OF THE REVENUE AND CRO SS OBJECTION OF THE ASSESSEE STAND ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 21 ST OCTOBER, 2013. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 25 TH OCTOBER, 2013 PK/- 7 ITA NO.465/COCH/2013 CO NO.25/COCH/2013 COPY TO: 1. THE ACIT, CIR.2(1), RANGE-2, TRICHUR 2. SRI T.G. CHANDRAKUMAR, PRASUNAM, SREE RAMAKRISHN A ASHRAM LANE POOKUNAM, TRICHUR-2 3. THE COMMISSIONER OF INCOME-TAX, TCR, TRICHUR 4. THE COMMISSIONER OF INCOME-TAX(A)-V, 2 ND FLOOR, SAN JUAN TOWERS, OLD RAILWAY STATION ROAD, ERNAKULAM NORTH, KOCHI 68 2 018 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH