Rukshana Shabbir Tasira , Secunderabad V. Income Tax Officer, Ward-10(3), Hyderabad

ITA 1018/Hyd/2019

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 3716 (ITAT-HYDERABAD)
• Duration Of Justice: 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 26-11-2019
• Assessment Year: 2011-2012
• Appeal Filed On: 18-06-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K J DIVYA
• Assessee Lawyers: Y V BHANU NARAYANA
• Keywords: Sale consideration of property below Jantri Value; Capital Gains
• Section: 50C; 148

Judgement Text

ITA NO 1018 OF 2019 RUKSHANA SHABBIR TASIRA SECUNDE RABAD. PAGE 1 OF 6 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A SMC BENCH, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER ITA NO.1018/HYD/2019 ASSESSMENT YEAR: 2011-12 SMT. RUKSHANA SHABBIR TASIRA, SECUNDERABAAD PAN:AOSPS5402A VS. INCOME TAX OFFICER WARD 10(3) HYDERABAD (APPELLANT) (RESPONDENT) ASSESSEE BY: SRI Y.V. BHANUNARAYANA REVENUE BY : SMT. K.J. DIVYA, DR DATE OF HEARING: 26/11/2019 DATE OF PRONOUNCEMENT: 26/11/2019 ORDER THIS IS ASSESSEES APPEAL FOR THE A.Y 2011-12 AGAIN ST THE ORDER OF THE CIT (A)- 6, HYDERABAD, DATED 30.04 .2019. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, A N INDIVIDUAL WAS DERIVING INCOME FROM CONSULTANCY BUS INESS AND INTEREST INCOME. FOR THE RELEVANT A.Y, THE ASSESSEE FILED HER RETURN OF INCOME ON 7.7.2011 ADMITTING A TOTAL INCOME OF R S.2,69,050/-. ON PROCESSING THE 50C DATA RECEIVED BY THE AOS OFF ICE, THE AO CAME TO KNOW THAT THE ASSESSEE HAS SOLD A PROPERTY BEARING NO.001 ADMEASURING 1400 SFT FOR A CONSIDERATION OF RS.8,50,000/- AS AGAINST THE SRO MARKET VALUE OF RS.14.00 LAKHS. THEREFORE, HE ISSUED A NOTICE U/S 148 OF THE ACT ON 23.3.2018, IN RESPONSE TO WHICH, THE ASSESSEE FILED A LETTER STATING THAT THE RETURN FILED ON 7.7.2011 MAY BE TREATED AS THE RETURN FILED IN RESP ONSE TO THE NOTICE ISSUED U/S 148 OF THE ACT. ITA NO 1018 OF 2019 RUKSHANA SHABBIR TASIRA SECUNDE RABAD. PAGE 2 OF 6 3. THEREAFTER, ON A QUERY, THE ASSESSEE REPLIED THA T THE ASSESSEE HAD ENTERED INTO AN ORAL AGREEMENT FOR SAL E OF HER FLAT FOR A TOTAL CONSIDERATION OF RS.8,50,000/- AND RECEIVED A SUM OF RS.10,000/- ON 10.08.2006 AS ADVANCE AND THE VENDEE PROMISED TO PAY THE BALANCE AND GET THE SAME REGISTERED IN H IS NAME. HE SUBMITTED THAT HOWEVER, THERE WAS INORDINATE DELAY IN PAYMENT OF BALANCE OF THE SALE CONSIDERATION AND THE SAME WAS PAID ON INSTALMENTS ON VARIOUS DATES UPTO 24.12.2008 AND AL L THE PAYMENTS WERE RECEIVED BY A/C PAYEE CHEQUES ONLY. T HE REASON FOR THE DELAY AS WAS EXPLAINED BY LATE SHRI SAFDAR ROHAWALA, (THE VENDEE), WAS THAT HE HAD FINANCIAL DIFFICULTIES AND WAS VERY ILL. THOUGH THE ENTIRE CONSIDERATION WAS RECEIVED AND TH E ASSESSEE INSISTED ON THE VENDEE TO GET THE PROPERTY REGISTER ED IN HIS NAME, HE WAS POSTPONING THE SAME CITING HIS HEALTH REASON S AND FINALLY DURING THE FINANCIAL YEAR 2009-10 HE TOOK POSSESSIO N OF THE FLAT AND OCCUPIED THE FLAT AND PROMISED TO GET THE PROPE RTY REGISTERED IN HIS NAME SOON. SINCE THE ASSESSEE HAD RECEIVED T HE FULL SALE CONSIDERATION AND POSSESSION OF THE PROPERTY WAS AL SO GIVEN, THE ASSESSEE OFFERED THE CAPITAL GAINS TO TAX DURING TH E A.Y 2010-11 AND PAID THE RESULTANT TAXES ALONG WITH INTEREST. 4. SUBSEQUENTLY, SHRI SAFDAR ROHAWALA, THE VENDEE PASSED AWAY AND THEREFORE, THE LEGAL HEIRS APPROACH ED THE ASSESSEE AND REQUESTED HER TO EXECUTE THE SALE DEED IN THEIR FAVOUR AND ACCORDINGLY, THE SALE DEED WAS EXECUTED ON 05.10.2010 FOR AN AMOUNT OF RS.8,50,000/-. 5. THE AO HOWEVER, HELD THAT IN THE SALE DEED THERE IS NO MENTION ABOUT THE POSSESSION OF THE PROPERTY BEING HANDED OVER IN THE YEAR 2009-10 NOR IS THERE A MENTION OF AGREE MENT OF SALE ON ACCOUNT OF WHICH THE PROPERTY WAS HANDED OVER. HE T HEREFORE, ITA NO 1018 OF 2019 RUKSHANA SHABBIR TASIRA SECUNDE RABAD. PAGE 3 OF 6 HELD THAT THERE IS TRANSFER OF PROPERTY IN THE YEAR OF EXECUTION OF THE SALE DEED AND THEREFORE, THE ASSESSEE IS LIABLE TO PAY THE CAPITAL GAINS TAX IN THE A.Y 2011-12. AGGRIEVED, TH E ASSESSEE FILED AN APPEAL BEFORE THE CIT, (A) WHO CONFIRMED THE ORD ER OF THE AO BUT HOWEVER, DIRECTED THE AO TO GIVE CREDIT FOR THE TAXES PAID FOR THE A.Y 2010-11 IF THE ASSESSEE ACCEPTS THE ASSESSA BILITY OF SALE OF THE PROPERTY IN THE A.Y 2011-12 RATHER THAN 2010-11 . AGGRIEVED BY THE ORDER OF THE CIT (A), THE ASSESSEE IS IN SEC OND APPEAL BEFORE US. 6. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND S UBMITTED THAT THE ASSESSEE HAD RECEIVED THE SALE CONSIDERATI ON FROM THE YEAR 2006 ONWARDS AND HAS RECEIVED THE FULL CONSIDE RATION UPTO THE END OF FINANCIAL YEAR 2008-09 AND POSSESSION WA S ALSO HANDED OVER THEREAFTER AND THEREFORE, THE CORRECT A.Y IN W HICH THE CAPITAL GAINS WAS LIABLE TO BE TAXED WAS THE A.Y 2010-11 AN D THE ASSESSEE HAS ACCORDINGLY OFFERED THE CAPITAL GAINS TO TAX WH ICH HAS BEEN ACCEPTED BY THE AO. HE HAS ALSO REFERRED TO THE DET AILS OF THE PAYMENTS WHICH ARE ALL CHEQUE PAYMENTS TO DEMONSTRA TE THAT THE PAYMENTS WERE MADE BY A/C PAYEE CHEQUES ONLY. THERE FORE, HE SUBMITTED THAT THE SRO VALUE AS ON THE DATE OF THE AGREEMENT OF SALE FOR THE PURPOSE OF CAPITAL GAINS HAS TO BE ADO PTED AND THE ASSESSEE HAS FURNISHED THE COPY OF THE SRO VALUE (A T PAGE 58 OF THE PAPER BOOK) ACCORDING TO WHICH THE MARKET VALUE OF THE PROPERTY AS ON 1.10.2006 IS RS.3000/- PER SQ. YARD WHICH COMES TO RS.8.50 LAKHS ONLY. HE THEREFORE, SUBMITTED THAT THE ASSESSEES APPEAL SHOULD BE ALLOWED AND THE CAPITAL GAIN ON SA LE OF PROPERTY SHOULD NOT BE BROUGHT TO TAX IN THE RELEVANT A.Y. ITA NO 1018 OF 2019 RUKSHANA SHABBIR TASIRA SECUNDE RABAD. PAGE 4 OF 6 7. THE LEARNED DR HOWEVER, SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT SINCE THE REGI STERED SALE DEED HAS BEEN EXECUTED IN THE RELEVANT FINANCIAL YE AR, THE CAPITAL GAIN SHOULD BE BROUGHT TO TAX IN THIS YEAR ONLY AND THE CIT (A) HAS RIGHTLY DIRECTED THE AO TO GIVE THE CREDIT FOR THE TAXES PAID DURING THE EARLIER A.Y. 8. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD, I FIND THAT THE ASSESSEE HAS RECEIVED TH E ADVANCE PAYMENT IN THE FINANCIAL YEAR 2006-07 ITSELF AND TH E ENTIRE CONSIDERATION BY THE END OF 2008. THE RELEVANT DETA ILS ARE GIVEN IN THE AFFIDAVIT OF THE VENDEES LEGAL HEIRS ARE UNDER : WE, A. RASHIDA ROHAWALA, WIFE OF LATE SAFDER ROHAWALA, AGED ABOUT 49 YEARS, RESIDENT OF FLAT NO.1, GROUND FLOOR , SURVEY NO.LLO/1, SALEH MANZIL KANAJIGUDA, SECUNDERABAD B AII HUSSAIN, SON OF LATE SAFDER ROHAWALA, AGED AB OUT 28 YEARS, RESIDENT OF FLAT NO.1, GROUND FLOOR, SURVEY NO.110/1, SALEH MANZIL KANAJIGUDA, SECUNDERABAD DO HEREBY AFFIRM AND DECLARE AS FOLLOWS: WE BOTH ARE LEGAL HEIRS OF LATE SAFDER ROHAWALA, WH O, WHEN HE WAS ALIVE, AGREED TO PURCHASE THE HOUSE PROPERTY AT FLAT NO.1, GROUND FLOOR, SURVEY NO.110/1, SALEH MANZIL, KANAJIGUDA, SECUNDERABAD AND PAID THE AGREED SALE CONSIDERATION IN FULL AND FINAL SETTLEMENT: DATE NAME OF THE BANK CH. NO. AMOUNT 10.08.2006 CENTRAL BANK OF INDIA 137030 10000 09.10.2006 CENTRAL BANK OF INDIA 137032 20000 19.10.2006 CENTRAL BANK OF INDIA 137034 40000 26.10.2006 CENTRAL BANK OF INDIA 137035 30000 08.11.2006 CENTRAL BANK OF INDIA 137038 30000 11.12.2006 CENTRAL BANK OF INDIA 137048 50000 20.03.2007 CENTRAL BANK OF INDIA 144944 40000 24.01.2007 CENTRAL BANK OF INDIA 144941 20000 21.03.2007 CENTRAL BANK OF INDIA 144945 60000 13.08.2007 CENTRAL BANK OF INDIA 144950 300000 07.10.2008 CENTRAL BANK OF INDIA 149462 150000 24.12.2008 CENTRAL BANK OF INDIA 169468 100000 ---------- 850000 ====== ITA NO 1018 OF 2019 RUKSHANA SHABBIR TASIRA SECUNDE RABAD. PAGE 5 OF 6 LATE SAFDER ROHAWALA HAS PAID THE AFORESAID SUM TO THE VENDOR IN FULL AND FINAL SETTLEMENT BUT HE COULD NO T GET THE REGISTRATION OF THE AFORESAID PROPERTY DONE IN HIS NAME, DUE TO HIS ILL HEALTH. AS THE FULL SALE CONSIDERATION WAS PAID, THE VENDOR HAS GIVEN POSSESSION OF THE AFORESAID PROPER TY TO US DURING THE FINANCIAL YEAR 2009-2010 EVEN THOUGH THE SALE DEED WAS NOT REGISTERED DUE TO ILL HEALTH. HOWEVER, SAFDER ROHAWALA PASSED AWAY ON 22.04.2010. WE, WHO ARE THE LEGAL HEIRS HAVE REGISTERED THE PROPERTY IN OUR NAME ON 0 5.10.2010. WE SOLEMNLY AFFIRM THAT WHAT IS STATE ABOVE IS TRUE AND CORRECT TO THE BEST OF KNOWLEDGE AND BELIEF. DATE: 25.05.18 PLACE: SECUNDERABAD SD/- (RASHIDA ROHAWALA) THEREFORE, IT IS CLEAR THAT THERE WAS AN AGREEMENT OF SALE, MAY BE ORAL, BETWEEN THE PARTIES BY VIRTUE OF WHICH THE AS SESSEE RECEIVED THE PAYMENTS. THE ASSESSEE HAS ALSO REFLECTED THE A DVANCES RECEIVED FROM THE PARTY IN HER BALANCE SHEET FROM T HE A.Y. 2007- 08 ONWARDS. THEREFORE, THE CONTENTION OF THE ASSES SEE THAT THERE WAS AN AGREEMENT OF SALE FOR THE SALE OF THE PROPER TY IN 2006 ITSELF, IS TO BE ACCEPTED SINCE ALL THE PAYMENTS AR E BY WAY OF A/C PAYEE CHEQUES ONLY. SINCE THE AGREEMENT OF SALE IS IN AUGUST, 2006, THE SRO VALUE AS ON THE DATE OF AGREEMENT OF SALE IS TO BE CONSIDERED FOR ADOPTING THE PROVISIONS OF SECTION 5 0C OF THE ACT. I FIND THAT THE VALUE OF THE PROPERTY AS ON THE DATE OF AGREEMENT IS RS.8,50,000/- WHICH IS ALSO THE FINAL SALE CONSIDER ATION RECEIVED AND CONSIDERED BY THE ASSESSEE WHILE OFFERING THE C APITAL GAINS TO TAX IN THE EARLIER A.Y.2010-11. I FIND THAT THE ASS ESSEE HAS PAID THE TAXES IN THE EARLIER A.Y 2010-11 AND DOES NOT I N ANY WAY BENEFIT BY NOT OFFERING THE SAME TO TAX IN THE A.Y 2011-12 AND THEREFORE, THERE IS NO LOSS TO THE REVENUE BY BRING ING IT TO TAX IN THE A.Y 2010-11. THEREFORE, THE APPEAL OF THE ASSES SEE IS ALLOWED. ITA NO 1018 OF 2019 RUKSHANA SHABBIR TASIRA SECUNDE RABAD. PAGE 6 OF 6 9. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH NOVEMBER, 2019. SD/- HYDERABAD, DATED 26 TH NOVEMBER, 2019. VINODAN/SPS COPY TO: 1 SMT. RUKSHANA SHABBIR TASIRA, 4-2-256 OLD BHOIGUD A, SECUNDERABAD 2 ITO WARD 10(3) ROOM NO.512, 5 TH FLOOR, IT TOWERS, AC GUARDS, HYDERABAD 3 CIT (A)-6 HYDERABAD 4 PR. CIT 6 HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER (P. MADHAVI DEVI) JUDICIAL MEMBER