ITO, Jaipur V. RAJESH SHARMA, Jaipur

ITA 105/JPR/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5382 (ITAT-JAIPUR)
• Duration Of Justice: 3 year(s) 1 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-03-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 29-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P BHATEJA
• Assessee Lawyers: ATUL SETHI
• Keywords: Revised return
• Section: 143(3); 131; 54

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH VH-VKJ-EHUK] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI T.R. MEENA, AM VK;DJ VIHY LA-@ ITA NO. 105/JP/2013 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2009-10 THE I.T.O. WARD 2(4), JAIPUR CUKE VS. RAJESH SHARMA, 23/124, SWARN PATH, MANSAROVAR, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AILPS 6697 N VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS @ REVENUE BY : O.P. BHATEJA (ADDL.CIT) FU/KZKFJRH DH VKSJ LS @ ASSESSEE BY : SHRI ATUL SETHI (C.A.) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 18/2/2016 MN?KKS'K .KK DH RKJH[ K @ DATE OF PRONOUNCEMENT : 04/03/2016 VKNS'K @ ORDER PER: T.R. MEENA, A.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER DATED 16/11/2012 PASSED BY THE LD CIT(A)-I, JAIPUR FOR A. Y. 2009-10. THE SOLE EFFECTIVE GROUND OF APPEAL IS AS UNDER:- WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW THE LD CIT(A) IS JUSTIFIED IN:- AS THE ASSESSEE HAS PURCHASED PROPERTY FOR RS. 75 LACS FROM HIS SON BY SALE DEED WHICH WAS NOT REGISTERED. SELLER ITA 105/JP/2013_ ITO VS. RAJESH SHARMA 2 HAS STATED THAT THIS WAS ONLY SETTLEMENT. THE ASSESSE E IS NOT ELIGIBLE FOR EXEMPTION U/S 54. 2. THE SOLE GROUND OF THE REVENUES APPEAL IS AGAINS T ALLOWING DEDUCTION U/S 54 OF THE INCOME TAX ACT, 1961 (IN SHO RT THE ACT) ON UNREGISTERED PROPERTY PURCHASED FROM SON OF THE ASS ESSEE. THE ASSESSEE FILED RETURN OF INCOME ON 05/12/2009 DECLA RING TOTAL INCOME OF RS. 54,27,550/-. THE CASE WAS SCRUTINIZED U/S 143(3) OF THE ACT. THE ASSESSEE HAS SHOWN HIS INCOME FROM CONSULTANCY FOR INSURANCE BUSINESS, HOUSE PROPERTY AND INCOME FROM OTHER SOUR CES. THE LD ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS SH OWN LONG TERM CAPITAL GAIN OF RS. 52,10,008/- IN HIS COMPUTATION FROM SALE OF PROPERTY SITUATED AT C-54, TILAK NAGAR, JAIPUR DURING THE YEA R UNDER CONSIDERATION. THE ASSESSING OFFICER SUMMONED ASSESS EE U/S 131 OF THE ACT TO THE ASSESSEE AND STATEMENT HAS BEEN RECORDED . AS PER ASSESSING OFFICER, IT HAS BEEN ADMITTED BY THE ASSESSEE IN QU ESTIONS NO. 2 TO 5 THAT THIS PROPERTY BELONGS TO HIM AND ACQUISITION O F THIS PROPERTY WAS MADE IN F.Y. 2004-05. THE STATEMENT OF THE ASSESSEE HAS BEEN REPRODUCED BY THE ASSESSING OFFICER ON PAGE NOS. 2 AND 3 OF THE ASSESSMENT ORDER. THE ASSESSEE GOT CONSTRUCTION DON E ON PLOT NO. C- 54, TILAK NAGAR, JAIPUR AND DEDUCTIONS OF CONSTRUCTI ON WAS CLAIMED AT THE TIME OF CALCULATION OF LONG TERM CAPITAL GAIN. THE COMPUTATION HAS ITA 105/JP/2013_ ITO VS. RAJESH SHARMA 3 ALSO BEEN REPRODUCED ON PAGE NO. 3 OF THE ASSESSMEN T ORDER. AT THE TIME OF RETURN, THE ASSESSEE HAD CLAIMED DEDUCTION U/S 54 OF THE ACT AT RS. 75 LACS FOR PURCHASE OF A NEW HOUSE. THE LD ASSES SING OFFICER ASKED TO FURNISH DETAILS OF DEDUCTIONS CLAIMED U/S 54 FOR RS. 75 LACS. THE ASSESSEE HAD FILED A COPY OF AGREEMENT FOR PURCHASE OF HOUSE AT B-37, NEW LITE COLONY, JAIPUR. IT WAS NOTICED BY THE ASSESS ING OFFICER THAT THIS SALE AGREEMENT WAS EXECUTED ON 29/4/2009 BETWEEN SHRI NISHANT SHARMA, SON OF THE ASSESSEE AND SHRI RAJESH SHARMA, ASSESSEE FOR B- 37, NEW LITE COLONY, TONK ROAD, JAIPUR BUT THERE WAS N O REGISTERED DEED PRODUCED BY THE ASSESSEE FOR THIS PURPOSE. THE LD ASSESSING OFFICER ALSO ISSUED SUMMONS TO SON OF THE ASSESSEE SHRI NISHANT SHARMA AND STATEMENT U/S 131 ALSO RECORDED BY THE A SSESSING OFFICER. THE ASSESSING OFFICER CROSS VERIFIED THE SALE OF PLO T NO. B-37, NEW LITE COLONY, TONK ROAD, JAIPUR TO ASSESSEE AND ASKED THAT HE HAS NOT DISCLOSED CAPITAL ACCOUNT ON ACCOUNT OF SALE OF THI S PROPERTY. DURING THE COURSE OF STATEMENT, HE ADMITTED THAT THIS WAS ONLY A SETTLEMENT, THEREFORE IT WAS NOT SHOWN IN HIS INCOME TAX RETURN. THE LD ASSESSING OFFICER CONCLUDED THAT THE ASSESSEE HAD NOT PURCHAS ED ANY HOUSE FOR CLAIMING DEDUCTION U/S 54 OF THE ACT. THE LD ASSESS ING OFFICER FURTHER RELIED ON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF M/S SURAJ ITA 105/JP/2013_ ITO VS. RAJESH SHARMA 4 LAMP & INDUSTRIES PVT. LTD. VS. STATE OF HARYANA & ANRS. 2011 STPL(WEB) 879 SC WHEREIN THE HONBLE COURT HAS HELD THAT TRANSFER OF IMMOVABLE PROPERTY CAN BE LEGALLY AND LAWFULLY TRANS FERRED/CONVEYED ONLY BY A REGISTERED DEED OR CONVEYANCE. TRANSACTION S OF THE NATURE OF GAP SALES OR SA/GPA/WILL TRANSFERS DO NOT CONVE Y TITLE AND DO NOT AMOUNT TO TRANSFER, NOR CAN THEY BE RECOGNIZED OR V ALID MADE OF TRANSFER OF IMMOVABLE PROPERTY. ACCORDINGLY, HE NOT ALLOWED THE DEDUCTION U/S 54 OF THE ACT ON RS. 75 LACS. 3. BEING AGGRIEVED BY THE ORDER OF THE ASSESSING OF FICER, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD CIT(A), WH O HAD DELETED THE ADDITION BY OBSERVING AS UNDER:- 4.3 I HAVE CAREFULLY PERUSED THE ORDER OF THE AO A ND THE SUBMISSIONS OF THE AR ALONG WITH THE EVIDENCE FILED. I CONCUR WITH THE SUBMISSION OF THE AR ON THE FOLLOWING GROUNDS AS PER THE EVIDENCE ON RECORD: 1. THE PROPERTY WAS TRANSFERRED VIDE AGREEMENT TO SALE DEED WHICH WAS ADMITTEDLY NOT REGISTERED AND WAS EXECUTED ON 29/04/2009 BETWEEN SHRI NISHANT SHARMA AND SHRI RAJESH SHARMA. THE PAYMENT WAS MADE BY SHRI RAJESH SHARMA AS PER HIS BANK STATEMENT. 2. NISHANT SHARMA FILED A REVISED RETURN ON 19/01/2 012 SHOWING NET CAPITAL GAINS OF RS. 10,97,000/- ON THIS ITA 105/JP/2013_ ITO VS. RAJESH SHARMA 5 TRANSFER OF PROPERTY ON WHICH HE PAID TAX ON CAPITAL GAINS OF RS.4,42,150/-. 3. THEREFORE, THE TRANSACTION IS COVERED U/S 2(47)(V ) OF THE I.T. ACT, 1961. TO THIS EXTENT EVEN THE CASE LAW RELIED ON BY THE AO NAMELY M/S SURAJ LAMP & INDUSTRIES PVT. LTD. IS STATE OF HARYANA & ANRS. HA S MENTIONED THAT SUCH AGREEMENTS TO SALE ARE TO BE RECOGNIZED TO THE EXTENT OF SECTION 53A OF TP ACT. SINCE SECTION 53A OF TP ACT IS RECOGNIZED AS TRANSFE R FOR COMPUTING INCOME U/S 2(47)(V) OF THE I.T. ACT THIS TRANSACTION CANNOT BE DENIED GIVEN THE EVIDENC E ON RECORD. THEREFORE, ON THE BASIS OF FACTS AND THE LAW APPLICAB LE TO THESE FACTS THE DISALLOWANCE OF DEDUCTION CLAIMED U/ S 54 OF THE I.T. ACT OF RS.75,00,000/- IS DELETED. 4. NOW THE REVENUE IS IN APPEAL BEFORE US. THE LD DR HAS VEHEMENTLY SUPPORTED THE ORDER OF THE ASSESSING OFF ICER AND ARGUED THAT THE ASSESSEE HAD NOT PROVED THE PART PERFORMAN CE UNDER THE TRANSFER OF PROPERTY ACT AND U/S 53A OF THE ACT. EVE N TRANSFER AS PER SECTION 2(47) OF THE ACT HAS NOT BEEN PROVED BY THE ASSESSEE. THE ASSESSEE ALSO HAS NOT GOT IMMOVABLE PROPERTY REGIST ERED, THEREFORE, THIS TRANSACTION IS ONLY NOT TO PAY CAPITAL GAIN TA X BY THE ASSESSEE. 5. AT THE OUTSET, THE LD AR OF THE ASSESSEE HAS REI TERATED THE ARGUMENTS MADE BEFORE THE LD CIT(A). IT IS SUBMITTED THAT THE SALE ITA 105/JP/2013_ ITO VS. RAJESH SHARMA 6 AGREEMENT BETWEEN THE ASSESSEE AND HIS SON IS NOT RE GISTERED BUT IS AGREEMENT TO SALE. BOTH THE ASSESSEE AS WELL AS SON OF THE ASSESSEE SHRI NISHANT SHARMA HAD BEEN EXAMINED BY THE ASSESS ING OFFICER U/S 131 OF THE ACT. DURING THE COURSE OF STATEMENT, THE Y ADMITTED THAT THIS TRANSACTION WAS ONLY SETTLEMENT AND THEREFORE IT WAS NOT SHOWN IN THE RETURN OF INCOME. HE FURTHER REFERRED SECTION 54(1) OF THE ACT AND ARGUED THAT THE ASSESSEE IS AN INDIVIDUAL. THERE WAS A CAPITAL GAIN FROM TRANSFER OF RESIDENTIAL HOUSE, WHOSE INCOME IS TAXAB LE UNDER THE HEAD INCOME FROM HOUSE PROPERTY. THE TRANSFER IS LONG TER M CAPITAL GAIN. THE ASSESSEE HAS PURCHASED A RESIDENTIAL HOUSE PROPERTY WITHIN THE PRESCRIBED TIME FROM HIS SON I.E. AT B-37, NEW LITE COLONY, TONK ROAD, JAIPUR. HE FURTHER REFERRED THE TRANSFER DEFINITION PROVIDED U/S 2(47) OF THE ACT AND SUBMITTED THAT THERE IS A WRITTEN CONTRA CT FOR SALE OF SPECIFIC IMMOVABLE PROPERTY. THE TRANSFEREE HAS, IN PART PER FORMANCE OF THE CONTRACT, TAKEN POSSESSION OF THE PROPERTY, OR ANY PART THEREOF. THE TRANSFEREE SHOULD HAVE PERFORMED OR SHOULD BE WILLIN G TO PERFORM HIS PART OF THE CONTRACT AND HAS DONE SOME ACT IN FURTH ERANCE OF THE CONTRACT. THE ASSESSEE HAD ENTERED INTO AN AGREEMENT FOR PURCHASE OF HOUSE AT B-37, NEW LITE COLONY, TONK ROAD, JAIPUR ON 29/4/2009. THE TRANSFEREE HAD PAID THE SAID CONSIDERATION OF RS. 7 5 LACS AND IS WILLING ITA 105/JP/2013_ ITO VS. RAJESH SHARMA 7 TO FULFILL OTHER CONDITIONS AND HAS TAKEN OVER POSS ESSION OF THE SAME ON 29/4/2009. THEREFORE, THE TRANSFEREE GETS THE RIGHT OVER THE PROPERTY AND HAS BECOME THE OWNER OF THE PROPERTY, THEREFORE, FOR THE PUROSE OF DEDUCTION U/S 54 READ WITH SECTION 2(47)(V) OF THE A CT, THE PROPERTY HAS BEEN TRANSFERRED TO HIM. HE FURTHER RELIED ON T HE DECISION IN THE CASE OF GRIPWELL INDUSTRIES LIMITED VS. ITO 102 TTJ 04 41, 99 ITD 0368 ITAT MUMBAI BENCH WHEREIN TRANSFER U/S 2(47)(IV) HAS BEEN CONSIDERED BY THE HONBLE BENCH. HE FURTHER RELIED ON THE DECI SION IN THE CASE OF CIT VS. MRS. SHAHZADA BEGUM (1988) 173 ITR 0397 WHEREI N AFTER SELLING OF RESIDENTIAL HOUSE, THE ASSESSEE HAS AGRE ED TO BUY ANOTHER PROPERTY FOR SELF OCCUPATION AND SECURE POSSESSION OF THE PROPERTY WITHIN ONE YEAR FROM THE DATE OF SALE OF OTHER PROPE RTY. SHE IS ENTITLED FOR EXEMPTION FROM CAPITAL GAIN U/S 54(1) OF THE AC T. HE FURTHER RELIED ON THE VARIOUS CASE LAWS AND SOME CASE LAWS IS AS UND ER:- (I) CIT VS R.L. SOOD (2000) 245 ITR 727. (II) BALRAJ VS. CIT 254 ITR 0022. (III) CIT VS. T.N. ARAVINDA REDDY (1997) 12 CTR (SC) 423. (IV) CIT VS. VISHNU TRADING AND INVESTMENT COMPANY 1 76 CTR 0169. (V) CIT VS DR. LAXMICHAND NARPAL NAGDA 211 ITR 0804. (VI) ACIT VS OM PRAKASH GOYAL 53 SOT 0158 THEREFORE, HE PRAYED TO UPHOLD THE ORDER OF THE LD C IT(A). ITA 105/JP/2013_ ITO VS. RAJESH SHARMA 8 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE ASSESSEE HAD CLA IMED DEDUCTION U/S 54(1) OF THE ACT AT RS. 75 LACS AGAINST THE PUR CHASE MADE OF A RESIDENTIAL HOUSE AT B-37, NEW LITE COLONY, TONK ROAD , JAIPUR ON AGREEMENT TO SALE FROM HIS SON. THE ASSESSEE HAS TAK EN POSSESSION OF THAT HOUSE FROM THE SON AND PAID THE CONSIDERATION AND AS PER SECTION 2(47)(V) OF THE ACT, THE TRANSFER AS PER INCOME TAX ACT, HAS BEEN COMPLETED BY THE ASSESSEE. IT IS UNDISPUTED FACT TH AT THE NEW PROPERTY PURCHASED FROM HIS SON HAS NOT REGISTERED BEFORE TH E STAMP AUTHORITY. THE SON ALSO HAS DISCLOSED THE CAPITAL GAIN ON SALE OF RESIDENTIAL IMMOVABLE PROPERTY TO HIS FATHER IN THE INCOME TAX RETURN AND PAID THE TAX ON CAPITAL GAIN. THESE FACTS HAVE NOT BEEN CONTR OVERTED BY THE LD DR, THEREFORE, WE UPHOLD THE ORDER OF THE LD CIT(A). 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 04/03/2016. SD/- SD/- VKJ-IH-RKSYKUH VH-VKJ-EHUK (R.P.TOLANI) (T.R. MEENA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ @ JAIPUR FNUKAD @ DATED:- 04 TH MARCH, 2016 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- THE ITO, WARD 2(4), JAIPUR ITA 105/JP/2013_ ITO VS. RAJESH SHARMA 9 2. IZR;FKHZ @ THE RESPONDENT- SHRI RAJESH SHARMA, JAIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 105/JP/2013) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR