Income Tax Officer, V. Smt. Praveena Ramsisaria,

ITA 108/RAN/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0343 (ITAT-RANCHI)
• Duration Of Justice: 1 year(s) 7 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 11-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A RAKSHIT
• Assessee Lawyers: R K GARODIA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RANCHI CIRCUIT BENCH, RANCHI BEFORE SHRI N.S. SAINI, HONBLE ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, HONBLE JUDICIAL MEMBER ITA NO. 108/RAN/2014 (ASST. YEAR : 2009-10) ITO, WARD-2(3), RANCHI. VS. SMT. PRAVEENA RAMSISARIA, 264, PURULIA ROAD, RANCHI. PAN NO. ABQPR 5848 A (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI R.K. GARODIA ADV. DEPARTMENT BY : SHRI A. RAKSHIT - DR DATE OF HEARING : 26/10/2015. DATE OF PRONOUNCEMENT : 26/10/2015. O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS), RANCHI, DATED 10/12/2013. 2. THE SOLE ISSUE INVOLVED IN THIS APPEAL IS THAT TH E COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DELETING THE ADDITION OF RS. 25,10,000/- MADE ON ACCOUNT OF SALE OF TWO FLATS WHICH WERE OWN ED THROUGH THE ORIGINAL DEED OF PURCHASE DATED 07/06/2000 THROUGH SALE DEED DATED 17/03/2009. 3 . FACTS OF THE CASE, IN BRIEF, ARE THAT ASSESSING O FFICER OBSERVED THAT BY VIRTUE OF AGREEMENT DATED 21/12/2005 THE AS SESSEE HAD ENTERED INTO AN AGREEMENT WITH M/S. TIRUPATI DEVELO PERS FOR CONSTRUCTION OF A BUILDING ON THE LAND SITUATED AT NABIN MITRA ROAD, 2 ITA NO. 108/RAN/2014 LALPUR RANCHI BY WHICH THE ASSESSEE WAS TO GET 35% OF THE SUPER BUILT UP AREA INCLUDING PARKING SPACE. THIS AGREEMENT W AS SIGNED BY THE ASSESSEE BEING LAND OWNER AND M/S. TIRUPATI DEVELOP ERS THROUGH ITS PARTNERS. NOWHERE IN THE AGREEMENT IT WAS STATED T HAT THE AGREEMENT WAS BETWEEN THE KARTA OF HUF AND THE BUILDER. HE F URTHER OBSERVED THAT THE ASSESSEE SOLD THE TWO FLATS TO SHRI OM PRA KASH BAJAN & SMT.SANGITA BAJAJ VIDE SALE DEED DATED 17/03/2009 A ND THE OTHER FLAT TO SHRI MANOJ BHALOTIA & SMT. PUSHPA DEVI BHALOTIA FOR A CONSIDERATION OF RS. 25,10,000/- EACH AND THE CONSIDERATION AMOUN T WAS RECEIVED BY THE ASSESSEE BEING THE OWNER OF THE FLATS AND THE K ARTA OF HUF IS NOWHERE IN THE PICTURE. THE ASSESSING OFFICER ON T HE BASIS OF LEGAL DOCUMENTS I.E. PURCHASE DEED, SALE DEED, AGREEMENT BETWEEN THE ASSESSEE AND THE BUILDER HELD THAT IT CLEARLY INDIC ATES THAT THE ASSESSEE IS AN ABSOLUTE OWNER OF THE PROPERTY AND INTRODUCTI ON OF M/S. TIRUPATI DEVELOPERS WAS AN ARTIFICIAL DEVICE FOR ESCAPING CA PITAL GAINS TAX AND MERELY IN THE PROFIT & LOSS ACCOUNT OF M/S. TIRUPAT I DEVELOPERS FILED WITH THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2009-1 0, A SUM OF RS.50,20,000/- BEING CREDITED WILL NOT DECIDE THE I SSUE OF OWNERSHIP. THE ASSESSING OFFICER ALSO STATED THAT THE ASSESSEE CAMOUFLAGE THE REAL NATURE OF TRANSACTION BUT INCIDENTALLY M/S. TIRUPAT I DEVELOPERS IS A FAMILY CONCERN OF THE ASSESSEE. HE, THEREFORE, OBS ERVED THAT THE ASSESSEE IS LIABLE TO LONG TERM CAPITAL GAINS TAX O F SALE OF FLATS AMOUNTING TO RS. 64,63,540/- UNDER SECTION 50(1) RE AD WITH SEC. 48 OF THE ACT. 4. ON APPEAL, COMMISSIONER OF INCOME TAX (APPEALS) OB SERVED THAT IT IS NOTED THAT THE DEVELOPMENT AGREEMENT WAS EXEC UTED ON 21/12/2005 BETWEEN THE ASSESSEE AND M/S. TIRUPATI D EVELOPERS. THE SALE PROCEED WAS RECEIVED BY THE DEVELOPER FIRM AND DUE TAX WAS PAID ON THE INCOME OF SALE OF TWO FLATS UNDER CONSIDERAT ION BY THE DEVELOPER FIRM AND THE ASSESSING OFFICER IS NOT RIGHT IN LAW AS WELL AS ON FACT OF THE CASE TO TAX THE RECEIPTS IN THE HANDS OF THE ASSESS EE AS CAPITAL GAIN. 3 ITA NO. 108/RAN/2014 FURTHER, THE SALE AGREEMENT DATED 02/07/2008 EXECUT ED BY THE DEVELOPER M/S. TIRUPATI DEVELOPERS WITH TWO DIFFERE NT BUYERS WERE SUBMITTED BY THE ASSESSEE BEFORE THE ASSESSING OFFI CER IN WHICH IT IS CLEARLY MENTIONED THAT THE FLATS WERE SOLD AT RS. 2 5,10,000/- EACH BY THE DEVELOPER. FURTHER, COMMISSIONER OF INCOME TAX (APPEALS) OBSERVED THAT IT IS EVIDENT FROM THE INCOME TAX RET URN FILED BY THE DEVELOPER FIRM M/S. TIRUPATI DEVELOPER FOR THE ASSE SSMENT YEAR 2009-10 ALONG WITH COMPUTATION OF TAX, AUDITED COPY OF BALA NCE SHEET AND PROFIT & LOSS ACCOUNT OF THE FIRM WHEREIN THE FIRM IN ADDI TION TO THE REGULAR CONTRACT RECEIPT HAS ALSO SHOWN RECEIPT OF RS. 50,2 0,000/- BEING SALE PROCEEDS OF FLAT NOS. 101 AND 102 SOLD TO MR. MANOJ BHALOTIA & SHRI OM PRAKASH BAJAN RESPECTIVELY AT A PRICE OF RS. 25,10, 000/-. THE COMMISSIONER OF INCOME TAX (APPEALS) IN VIEW OF THE SE FACTS OBSERVED THAT IT IS NOTED THAT THE ASSESSEE IS NOT LIABLE TO PAY TAX ON THESE TRANSACTIONS AS THE TRANSITIONS ARE OF THE DEVELOPE R AND THERE IS NO REASON FOR THESE TRANSACTIONS TO BE REFLECTED IN TH E RETURN OF THE ASSESSEE. THE COMMISSIONER OF INCOME TAX (APPEALS) FURTHER NOTED THAT AS PER DEVELOPERS BANK STATEMENT, IT IS EVIDE NT THAT THE SALE PROCEEDS WERE RECEIVED BY THE DEVELOPER ON DIFFEREN T DATES AND MAXIMUM PAYMENT WERE RECEIVED BY ACCOUNT PAYEE CHEQ UES AND THE SAME WERE DEPOSITED IN THE FIRMS BANK ACCOUNT WITH BANK OF INDIA, RANCHI BRANCH. THE COMMISSIONER OF INCOME TAX (APP EALS) ALSO NOTED THAT IN SPITE OF ADMITTING FACT THAT THE DEVELOPMEN T AGREEMENT WAS EXECUTED ON 21/12/2005 BETWEEN THE ASSESSEE AND M/S . TIRUPATI DEVELOPERS, THE SALE PROCEEDS WAS RECEIVED BY M/S. TIRUPATI DEVELOPERS (FIRM) AND DUE TAX WAS PAID ON THE INCOME OF SALE O F TWO FLATS UNDER CONSIDERATION BY THE DEVELOPER FIRM, THE ASSESSING OFFICER ERRED IN LAW AS WELL AS ON FACT OF THE CASE TO ASSESS THE CAPITA L GAIN IN THE HANDS OF THE ASSESSEE. THE ASSESSING OFFICER IN HER ORDER H AS ONLY GIVEN STRESS THAT THE ASSESSEE HAD SIGNED THE SALE AGREEMENT. THE COMMISSIONER OF INCOME TAX (APPEALS) OBSERVED THAT IT IS TO BE N OTED THAT IF THE ARGUMENT OF ASSESSING OFFICER IS ACCEPTED, IT WOULD AMOUNT TO TAXING 4 ITA NO. 108/RAN/2014 SOME INCOME WITH REGARD TO THE SAME PROPERTY IN THE HANDS OF THE TWO DIFFERENT PERSONS WHICH IS NOT A FACTUALLY CORRECT CONCLUSION. THEREFORE, COMMISSIONER OF INCOME TAX (APPEALS) DELETED THE AD DITION OF RS. 64,63,540/-. 5. DEPARTMENTAL REPRESENTATIVE COULD NOT POINT OF ANY ERROR IN THE ABOVE FINDINGS OF THE COMMISSIONER OF INCOME TAX (A PPEALS) THAT THE SALE CONSIDERATION OF THE TWO FLATS IN QUESTION AMO UNTING TO RS.50,20,000/- WAS RECEIVED BY THE DEVELOPER AND WA S CREDITED IN THE BANK ACCOUNT OF THE DEVELOPER AND THE DEVELOPER HAD SHOWN THE SAID AMOUNT AS ITS INCOME IN THE RETURN OF INCOME FILED AND PAID DUE TAX THEREON. IN THE ABOVE FACTS AND CIRCUMSTANCES OF T HE CASE, WE FIND NO INFIRMITY IN THE ORDER OF THE COMMISSIONER OF INCOM E TAX (APPEALS) WHICH IS CONFIRMED AND THE GROUND OF APPEAL OF THE REVENUE IS DISMISSED. 6 . IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED . ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE H EARING ON MONDAY, THE 26 TH DAY OF OCTOBER, 2015 AT RANCHI. SD/- SD/- (GEORGE MATHAN) (N.S.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 26 TH OCTOBER, 2015. VR/- 5 ITA NO. 108/RAN/2014 COPY TO: 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT 4. THE CIT(A) 5. THE D.R. 6. GUARD FILE. BY ORDER ASSISTANT REGISTRAR I.T.A.T., RANCHI 6 ITA NO. 108/RAN/2014 DATE INITIAL ORIGINAL DICTATION PAD & DRAFT ARE ENCLOSED IN THE FILE 1. DRAFT DICTATED ON 26/10/2015 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 27/10/2015 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 27/10/2015 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 27/10/2015 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 27/10/2015 SR.PS 6. DATE OF PRONOUNCEMENT 26/10/2015 SR.PS 7. FILE SENT TO THE BENCH CLERK 27/10/2015 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER