Mrs. Paramjit Kaur Dhillon, Mohali V. DCIT, Mohali

ITA 1111/CHANDI/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6140 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 5 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-04-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 22-04-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 29-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Section: 54F

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B, CHANDIGARH BEFORE SHRI T.R. SOOD, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO. 1111/CHD/2012 ASSESSMENT YEARS : 2009-10 MRS. PARAMJIT KAUR DHILLON VS. D.C.I.T. CIRCLE 6( 1) FLAT NO. A-404 MOHALI IVORY TOWERS, SECTOR 70 MOHALI AEYPD 0785R (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI TEJ MOHAN SINGH RESPONDENT BY: SHRI MANJIT SI NGH DATE OF HEARING 22.4.2014 DATE OF PRONOUNCEMENT 28.4.2014 O R D E R PER T.R. SOOD, A.M THIS APPEAL IS DIRECTED AGAINST THE ORDER DATED 3. 9.2012 OF THE LD CIT(A), CHANDIGARH. 2. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLO WING GROUNDS: 1 THAT THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN UPHOLDING THE ADDITION OF RS. 11904375/- BEING ALLE GED LONG TERM CAPITAL GAINS ON SALE OF AGRICULTURAL LAND ON HYPOT HETICAL BASIS INVOKING SEC 45(1) OF THE ACT WHICH IS ARBITRARY A ND UNJUSTIFIED. 2 THAT THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS O N FACTS IN UPHOLDING THE FINDING OF THE ASSESSING OFFICER THAT THE POSSESSION WAS GIVEN AND AS SUCH THE TRANSFER WAS COMPLETE WHI CH IS FACTUALLY INCORRECT AND AS SUCH THE ORDER PASSED BY THE LD. C IT(A) IS ILLEGAL, ARBITRARY AND UNJUSTIFIED. 3 THAT THE AGREEMENT RELIED UPON BY THE ASSESSING O FFICER HAS TO BE READ AS A WHOLE AND NOT IN PARTS WHICH HAS SO BEEN DONE BY THE ASSESSING OFFICER AS CLAUSES RELATING TO TRANSF ER OF OWNERSHIP RIGHTS, TERMINATION, POSSESSION HAVE BEEN BRUSHED A SIDE WHILE ONLY THE CONSIDERATION CLAUSE HAS BEEN REFERRED TO WHICH CANNOT UNDER ANY CIRCUMSTANCES BE READ IN ISOLATION AND AS SUCH THE ENTIRE ADDITION MADE AND UPHELD BY LD. CIT(A) MERITS DELET ION. 4 THAT THE LD. CIT(A) HAS PROCEEDED ON A WRONG PREM ISE THAT THE ASSESSEE HAD RECEIVED THE AMOUNT CALCULATED ON NOTIONAL BASIS BY THE ASSESSING OFFICER WHICH IN FACTS WAS NEVER R ECEIVED FROM M/S ANSAL PROPERTIES AND INFRASTRUCTURE LTD. 5 THAT THE ENTIRE ADDITION OF RS. 11904375/- IS BAS ED PURELY ON SUSPICION, SURMISES AND CONJECTURES IN AS MUCH A S NO AMOUNT 2 IN EXCESS OF RS. 75 LAKHS HAS BEEN RECEIVED FROM M/ S ANSAL PROPERTIES AND INFRASTRUCTURE LTD AN AS SUCH THE HY POTHETICAL ADDITION MADE AND UPHELD BY THE LD. CIT(A) IS ILLEG AL, ARBITRARY AND UNJUSTIFIED. 6 THAT THE LD. CIT(A) HAS FURTHER ERRED IN UPHOLDIN G THE CHARGING OF INTEREST U/S 234A AND234B OF THE ACT WH ICH IS NOT CHARGEABLE IN THE FACTS OF THE CASE. 3 BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FIL ED RETURN OF INCOME DECLARING INCOME OF RS. 4394930/- WHICH INCLUDED LONG TERM CAPITAL GAIN OF RS. 4067400/-. THE ASSES SEE HAD ALSO CLAIMED DEDUCTION U/S 54F AND 54EC. THE ASSES SEE HAD DECLARED LONG TERM CAPITAL GAIN ON SALE OF AGRICULT URAL LAND AND THE SALE CONSIDERATION WAS SHOWN AT RS. 1,41,00,00 0/-. THE ASSESSEE ALONG WITH HER SISTER MRS. AMARJIT KAUR HA D INHERITED THE LAND MEASSUING 7.7625 ACRES IN VILLAGE AJIJULLA PUR, DISTT. PANIPAT, HARYANA FROM HER LATE FATHER. THE ASSESSE E HAD ENTERED INTO AN AGREEMENT WITH M/S ANSAL PROPERTIES & INFRASTRUCTURE LTD (DEVELOPER) ALONG WITH HER SISTE R FOR DEVELOPMENT OF A RESIDENTIAL COLONY. AS PER THE DE VELOPMENT AGREEMENT THE ASSESSEE WAS ENTITLED TO 1150 SQYD OF PLOTTED AREA FOR EVERY ACRE PROVIDED BY THEM TO THE DEVELOP ER. IT WAS FURTHER PROVIDED IN THE AGREEMENT THAT THE DEVELOPE R VALUED THE PLOTTED AREA AT RS. 67 LAKHS OF 1150 SQYD. THE ASS ESSEE HAD RECEIVED PART PAYMENT OF RS. 75 LAKHS AND FOR THE BALANCE, THE ASSESSEE OPTED FOR DEVELOPED PLOTS. THE ASSESSING OFFICER OBSERVED THAT IN THIS BACKGROUND CONSIDERATION OF RS. 1.41 LAKHS INS NOT CORRECT AND TOTAL CONSIDERATION SHOU LD HAVE BEEN RAISED TO RS. 2,60, 04, 375/-. HE FURTHER OBSERVED THAT ONCE THE POSSESSION FOR THE LAND WAS GIVEN TO THE DEVELO PER WHOLE CONSIDERATION IS TO BE CHARGED U/S 45 AND ACCORDIN GLY HE ADOPTED THE SALE CONSIDERATION OF RS. 2,60,04,375/ - AND COMPUTED THE CAPITAL GAIN ACCORDINGLY. 3 4 ON APPEAL ACTION OF THE ASSESSING OFFICER WAS CON FIRMED BY THE LD. CIT(A). 5 BEFORE US. THE LD. COUNSEL FOR THE ASSESSEE POINT ED OUT THAT THE POSSESSION WAS NEVER GIVEN BY THE ASSESSEE TO THE DEVELOPER AND IT WAS FURTHER POINTED OUT THAT THE D EVELOPER DID NOT HONOUR ITS PART OF THE AGREEMENT AND THEREFORE BALANCE OF THE PLOTTED AREA WAS SOLD BY THE ASSESSEE TO SOME O UTSIDERS. THEREFORE ONLY ACTUAL CONSIDERATION COULD HAVE BEEN SUBJECTED TO TAXATION. 6 ON THE OTHER HAND, THE LD. D.R. FOR THE REVENUE SUBMITTED THAT ONCE THE LAND WAS GIVEN FOR DEVELOPM ENT AND THE POSSESSION WAS GIVEN THEN WHOLE OF THE CONSIDER ATION IS REQUIRED TO BE CHARGED U/S 45 OF INCOME -TAX ACT, 1 961. HE STRONGLY SUPPORTED THE ORDER OF THE LD. CIT(A). 7 WE HAVE GONE THROUGH THE RIVAL SUBMISSIONS CAREFU LLY. COPY OF THE DEVELOPMENT AGREEMENT AT PAGE 12 TO 14. THE SAME DOES NOT SHOW THAT THE POSSESSION WAS GIVEN BY THE ASSESSEE TO THE DEVELOPER. IT IS ALSO NOT CLEAR THA T HOW THE AGREEMENT WAS NOT HONOURED BY THE DEVELOPER AND HOW THE LAND WAS SOLD TO THE OUTSIDER. IN FACT THE ASSESSI NG OFFICER HAS NOT EXAMINED THE ISSUE PROPERLY. THEREFORE WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND REMIT THE MATTER BACK T O THE FILE OF THE ASSESSING OFFICER FOR DENOVO ASSESSMENT. THE A SSESSING OFFICER SHOULD VERIFY FROM THE DEVELOPER WHETHER TH E POSSESSION WAS GIVEN OR NOT AND HOW THE LAND WAS SOLD TO THE O UTSIDER THEN DECIDE THE ISSUE IN ACCORDANCE WITH LAW. 4 8 IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES ONLY. ORDER PRONOUNCED IN THE OPEN COURT ON 28.4.2014 SD/- SD/- (SANJAY GARG) (T.R. SOOD ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 28.4.2014 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/THE DR