Smt. Smt Manjeet Kaur, Gurdaspur V. The Dy. Commissioner of Income Tax, Pathankot

ITA 112/ASR/2015

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3742 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 10 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 13-10-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 20-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: J S BHASIN
• Keywords: Capital asset; Question of law; Cost of acquisition; Corroborative evidences; Revised return
• Section: 54F; 234B; 54; 263; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR BEFORE SH.T.S. KAPOOR, ACCOUNTANT MEMBER AND SH.N.K.CHOUDHRY, JUDICIAL MEMBER I.T.A. NO.112(ASR)/2015 ASSESSMENT YEAR: 2007-08 SMT. MANJEET KAUR THRO L/H SURINDER SINGH, 637, DASHMESH NAGAR, TIBRI ROAD, GURDASHPUR. PAN:AVKPA5786G VS. DY. CIT PATHANKOT. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. J.S. BHASIN (ADV.) RESPONDENT BY: SH. RAHUL DHAWAN (DR) DATE OF HEARING :13.10.2016 DATE OF PRONOU NCEMENT :30.12.2016 ORDER PER N. K. CHOUDHRY (JM): THIS IS AN APPEAL PREFERRED BY THE ASSESSEE, AGAINS T THE ORDER OF LD. CIT(A), AMRITSAR, DATED 11.11.2014, PERTAINING TO A SST. YEAR:2007-08. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF A PPEAL. 1. THAT THE ID.CIT(A) MISDIRECTED HIMSELF IN LAW AND ON FACTS IN REJECTING THE FOLLOWING CONTENTIONS OF ASSESSEE, TO UPHOLD TH E VALIDITY OF IMPUGNED ORDER OF ASSESSMENT: I) THAT LATE SMT MANJIT KAUR, SIMPLY BEING A NOMINEE O F THE DECEASED ASSESSEE SHRI KARTAR SINGH PAHARA, COULD NOT BE ASS ESSED AS LEGAL HEIR OF THE DECEASED FOR HIS SHARE IN PUNJABI COOP. HOUSE BUILDING SOCIETY LTD, IN EXCLUSION OF ALL THE REMAINING FIVE LEGAL HEIRS OF THE DECEASED; II) THAT LATE SMT MANJIT KAUR, COULD HAVE BEEN FURTHER ASSESSED, THROUGH HER LEGAL HEIRS, ONLY IN RESPECT OF HER 1/6 TH SHARE IN THE ABOVE PROPERTY, AND NOT THE WHOLE; III) THAT BY ANY RECKONING, IN THE GIVEN FACTS, THE ASSE SSMENT OUGHT TO HAVE BEEN FRAMED IN THE STATUS OF AOP BY IMPLEADING ALL THE LEGAL HEIRS OF THE DECEASED SHRI KARTAR SINGH PAHARA. ITA NO. 112 (ASR)/2015 ASST. YEARS: 2007-08 2 2. THAT WITHOUT PREJUDICE TO ABOVE LEGAL GROUND S, THE ID. CIT(A) HAS ERRED IN CONFIRMING THE TAXATION OF NOTIONAL CAPITA L GAIN OF RS.3,65,06,833/- BY WRONGLY UPHOLDING THAT THE TRANS FER OF LAND TOOK PLACE ON THE VERY DATE OF EXECUTION OF A JOINT DEVE LOPMENT AGREEMENT WITH THE DEVELOPERS. 3. THAT THE LD. CIT(A) OUGHT TO HAVE READ THE JOIN T DEVELOPMENT AGREEMENT IN TOTALITY, SO AS NOT TO INFER THE ACCRU AL OF CAPITAL GAIN ON THE VERY DATE OF EXECUTION OF THE SAID AGREEMENT. 4. THAT THE LD. CIT(A) WAS NOT JUSTIFIED OVERLOOKIN G VARIOUS JUDICIAL AUTHORITIES RELIED UPON BY ASSESSEE, ON A FACIAL DI STINCTION DRAWN BY HIM. 5. THAT EXEMPTION CLAIMED U/S. 54F OUGHT TO HAVE BE EN ALLOWED. 6. THAT THE LD. CIT(A) WRONGLY REJECTED THE ASSESSE ES CLAIM THAT THE IMPUGNED CAPITAL GAIN, IF ANY, COULD BE ASSESSED ON LY IN THE HANDS OF SOCIETY AND NOT THE ASSESSEEE MEMBER. 7. THAT THE ASSESSEES CLAIM NOT TO TAX THE IMPUGNE D GAIN ON THE PRINCIPLES OF MUTUALITY INVOLVED IN THE TRANSACTION S, HAS BEEN WRONGLY REJECTED BY LD.CIT(A). 8. THAT CHARGING OF INTEREST U/S 234A & 234B HAS BE EN WRONGLY CONFIRMED. 9. THAT INITIATION OF PENALTY U/S 271(1 (C) HAS BEE N WRONGLY CONFIRMED. 10. THAT THE ORDER UNDER APPEAL IS WHOLLY AGAINST L AW AND FACTS OF THE CASE. 3. IN THE INSTANT APPEAL, THERE IS DELAY OF 1 DAY WHI LE FILING IN APPEAL. THE LD. AR SUBMITTED THAT THE DELAY WAS OCCURRED BE CAUSE OF HIS PERSONAL DIFFICULTIES AND THE SAME WAS NOT INTENTIO NAL AND MALAFIDE AND ALSO RELIED UPON THE CASE OF COLLECTOR, LAND ACQUISITION VS. MST KATIJI & ORS. REPORTED IN (1987) 167 ITR 471(SC) AND SHOWN SUFFICIENT CAUSE FOR 1 DAY DELAY FOR FILING THE INSTANT APPEAL, SO IN THE INTEREST OF JUSTICE, THE DELAY OF 1 DAY IS CONDONED. 4. THE BRIEF FACTS OF THE CASE AS NOTED IN THE ASSESSM ENT ORDER ARE THAT ON 25.02.2007, THE PUNJABI CO-OPERATIVE HOUSE BUILDING SOCIETY LTD., MOHALI, OF WHICH THE HUSBAND OF LATE SMT. MAN JIT KAUR WAS A MEMBER AND WAS ALLOTTED PLOT NO.44 MEASURING 1000 S Q. YARD BY THE SAID SOCIETY, ENTERED INTO A TRIPARTITE JOINT DEVELOPMEN T AGREEMENT WITH M/S. HASH BUILDERS (P) LTD., CHANDIGARH AND M/S. TATA HO USING DEVELOPMENT COMPANY LTD. MUMBAI. BY VIRTUE OF TRIPARTITE, AGREE MENT IT WAS AGREED ITA NO. 112 (ASR)/2015 ASST. YEARS: 2007-08 3 AMONG THE PARTIES THAT THE PUNJABI CO-OP.HOUSING SO CIETY LTD., MOHALI, OWNER OF 21.2 ACRE LAND, SHALL TRANSFER ITS LAND TO M/S. TATA HOUSING DEVELOPMENT COMPANY LTD. IN LIEU OF MONETARY CONSID ERATION AND ALSO IN KIND. AS PER THE AGREEMENT THE ASSESSEE WOULD RECEI VE RS.1,65,00,000/- IN ADDITION TO TWO FLATS OF 2250 SQ. FEET EACH, WOR TH RS.2,02,50,000/-. THE ASSESSEE FILED RETURN OF INCOME DECLARING TOTAL INCOME OF RS.25,71,833/- ON 31.03.2008. THE SAME WAS PROCESSE D U/S 143(1) OF THE I.T. ACT ON 20.06.2007. THE ASSESSEE HAD ALSO F ILED AS REVISED RETURN DECLARING NIL INCOME ON 30.06. 2009. AS THE ORIGINA L RETURN FILED BY THE ASSESSEE WAS BELATED, THE SAME CANNOT BE REVISED SO THE RETURN FILED BY THE ASSESSEE ON 30.06.2009. AS THE ORIGINAL RETURN FILED BY THE ASSESSEE WAS BELATED, THE SAME CANNOT BE REVISED SO THE RETU RN FILED BY THE ASSESSEE ON 30.06.2009 IN NON-EST AND AS SUCH IT IS FILED. FINALLY THE ASSESSING OFFICER DETERMINED THE LIABILITY AS UNDER : I PROPOSED TO ASSESSEE THE DIFFERENCE IN THE INDEXE D COST AS SHOWN IN THE ORIGINAL RETURN FILED ON 31.03.2008 AN D THE CONSIDERATION OF 36.32% OF YOUR SHARE I.E. RS.1,31,0 4,483/- (RS.1,33,47,600/-(-)RS.2,43,117/-) AS A LONG TERM CAP ITAL GAIN. IN CASE YOU HAVE ANY OBJECTION TO THE SAME FILE THE SAME ON THE DATE OF HEARING ALONG WITH SUPPORTING EVIDENCE. FURTHER, I PURPOSED TO ASSESS RENTAL INCOME AT RS.2 5,200/- AND INTEREST INCOME AT RS.5,384/-. NOTICE U/S.142(1) FIXING YOUR CASE FOR 11/12/2009 I S ENCLOSED. PLEASE NOTE THAT NO ADJOURNMENT WILL BE A LLOWED AS IT A TIME BARRING CASE. THEREAFTER, THE LD. CIT INITIATED THE PROCEEDINGS U /S.263 AND NOTICES HAVE BEEN ISSUED TO THE LEGAL HEIR OF THE ASSESSEE AND IN PURSUANCE TO THE ORDER PASSED U/S 263, THE ASSESSING OFFICER DET ERMINED THE LIABILITY AGAIN WHICH REPRODUCED HEREIN BELOW. 13.0 ANOTHER ISSUE IS REGARDING THE AMOUNT OF CONSIDERAT ION WHICH HAS BEEN PROPOSED IN THE SHOW CAUSE IN PRESENT PROCEEDINGS A T RS.3,67,50,000/-. ITA NO. 112 (ASR)/2015 ASST. YEARS: 2007-08 4 THERE IS NO DISPUTE ON THE ISSUE THAT THE TOTAL CONSIDERATION INVOLVED IN THIS TRANSACTION INCLUDES THE AMOUNT OF CASH COMPONENT REFERRED TO IN CLAUSE 4.1 OF THE AGREEMEN T AND THE VALUE OF THE FLAT WHICH HAS TO BE GIVEN BY THE DEVELOPER TO THE MEMBERS OF THE SOCIETY. AS REGARDS VALUATION OF THE SAID FLAT EACH AT RS.450G P ER SQUARE FEET, THE RATE HAS TO BE TAKEN AS PER THE RATE OFFERED TO THE GENE RAL PUBLIC. THAT WOULD BE THE ACTUAL RATE OF FLAT AT WHICH THE BUILDER WOULD OFFER TO ANY PERSON. THE SUM OF RS.4500/- PER SQ. FEET IS RATE AS PER WHICH H ASH IS LIABLE TO BUY FROM THDC. IT IS A CLEAR INDICATION OF THE VALUE OF FLAT , DEVOID OF ANY SPECIAL BENEFIT TO THE MEMBERS. THE RATE WHICH COULD BE OFF ERED TO GENERAL PUBLIC WOULD IN ANY CASE BE NOT LESS THAN 4500/- PER SQ. F T. THEREFORE, ACCORDING TO FACTS, THE TOTAL VALUE OF CONSIDERATION TO BE ADOPT ED COMES AT RS.3,67,50,000/-. 14.0 IN VIEW OF THE ABOVE, THE TRANSACTION IS TREATED A S TRANSFER AND THE CAPITAL GAIN IS COMPUTED AS UNDER: SALE CONSIDERATION: RS.3,67,50,000/- LESS COST OF ACQUISITION AFTER INDEXATION RS.2,43,167/- LONG TERM CAPITAL GAIN RS.3,65,06,833/- 15.0 THE ASSESSEE HAS OTHER INCOME RS.25,200/- FROM RENT AND RS.5,384/- FROM INTEREST. THE SAME IS ALSO TO BE ADDED TO THE INCOM E. 16.0 I AM SATISFIED THAT BY NOT SHOWING THE CORRECT AMO UNT OF CAPITAL GAIN THE ASSESSEE HAS CONCEALED INCOME AND FURNISHED INACCUR ATE PARTICULARS OF INCOME. THEREFORE, PENALTY PROCEEDINGS ARE BEING IN ITIATED U/S 271(1)(C) OF THE INCOME TAX ACT 1961. 17.0 THE INCOME OF THE ASSESSEE IS RE-COMPUTED AS UNDER: INCOME FROM LTCG AS PER RETURN :RS.27,56,833/- ADDITION ON ACCOUNT OF LTCG :RS.3,37,50, 000/- ADDITION ON ACCOUNT OF RENT :25,200/- ADDITION ON ACCOUNT OF INTEREST :RS.5,384/- TOTAL INCOME :RS.3,65,37,417/- ASSESSED AS ABOVE, CHARGE INTEREST U/S 234A, 234B AND 234C OF THE IT ACT 1961. ISSUE PENALTY NOTICE U/S 271(1)(C) OF THE IT ACT, 1961. ISSUE DEMAND NOTICE AND CHALLAN. 5. FEELING AGGRIEVED BY THE ORDER PASSED BY THE ASSES SING OFFICER, THE ASSESSEE PREFERRED THE FIRST APPEAL BEFORE THE CIT( A). THE LD. CIT (A) CONFIRMED THE ORDER PASSED BY THE A.O BY OBSERVING AS UNDER: 7. 11 KEEPING IN VIEW THE AFORESAID FACTUAL AND LE GAL POSITION, I AM OF THE CONSIDERED VIEW THAT THE AO WAS FULLY JUSTIFIED IN HOLDING THAT TRANSACTION REFERRED TO IN JDA FALLS WITHIN THE SCOPE OF TRANSF ER AS ENVISAGED IN SECTION 2(47) OF THE INCOME TAX ACT AND THE APPELLANT WAS L IABLE TO PAY TAX UNDER THE HEAD CAPITAL GAINS ON THE SAID TRANSACTION DU RING THE YEAR 2006-07 I.E AY 2007-08. THE RELEVANT GROUND OF APPEAL DESERVES TO BE REJECTED. 7.12 IN THE TOTALITY OF FACTS & CIRCUMSTANCES DISCU SSED SUPRA, I AM OF THE CONSIDERED OPINION THAT IT IS A FIT CASE TO UPHOLD THE ADDITION OF RS. ITA NO. 112 (ASR)/2015 ASST. YEARS: 2007-08 5 3,65,06,833/- ON ACCOUNT OF LTC GAIN WORKED OUT BY SUBTRACTING THE RESULTANT COST OF ACQUISITION AS ON 1.2.2001 AT RS.2,43,167/- FROM THE TOTAL TRANSFER CONSIDERATION OF RS.3,65,06 ,833/- AND THE SAME IS HEREBY CONFIRMED AND SUSTAINED. THIS DISPOSES OF GROUND OF APPEAL NO.6 TO 7 ACCORDINGLY AGAINST THE APPELLANT. 8 . REGARDING GROUND OF APPEAL NO.8 PERTAINING TO THE A PPELLANTS GRIEVANCE AGAINST NON PROVIDING THE BENEFIT CLAIMED U/S.54F, THE APPELLANT NOT ONLY FAILED TO ADDUCE RELEVANT DOCUMENTARY EVIDENCE IN S UPPORT OF HIS CLAIM U/S.54F BEFORE THE ASSESSING OFFICER, BUT SHE HAS A LSO FAILED TO PROVIDE RELEVANT CORROBORATIVE EVIDENCE BEFORE THE UNDERSIG NED DURING THE APPELLATE PROCEEDINGS, UNDER CONSIDERATION. SECTION 54 LAYS D OWN TWO IMPORTANT PRE CONDITIONS TO CLAIM BENEFIT ONE IS PROVIDED IN 54F( 4), WHICH IS REPRODUCED AS UNDER: THE AMOUNT OF THE NET CONSIDERATION WHICH IS NOT APPROPRIATED BY THE ASSESSEE TOWARDS THE PURCHASE O F THE NEW ASSET MADE WITHIN ONE YEAR BEFORE THE DATE ON WHICH THE TRANSFER OF THE ORIGINAL ASSET TOOK PLACE, OR WHICH IS NOT UTIL IZED BY HIM FOR THE PURCHASE OR CONSTRUCTION OF THE NEW ASSET BEFORE TH E DATE OF FURNISHING THE RETURN OF INCOME UNDER SECTION 139, SHALL BE DEPOSITED BY HIM BEFORE FURNISHING SUCH RETURN [SUCH DEPOSIT BEING MADE IN ANY CASE NOT LATER THAN THE DUE DATE APPLICABLE IN THE CASE OF THE ASSESSEE FOR FURNISHING THE RETURN OF INCOME UNDER SUBSECTION (1) OF SECTION 139 IN AN ACCOUNT IN ANY SUCH BANK OR INSTI TUTION AS MAY BE SPECIFIED IN, AND UTILIZED IN ACCORDANCE WITH, ANY SCHEME WHICH THE CENTRAL GOVERNMENT MAY, BY NOTIFICATION IN THE OFFI CIAL GAZETTEE, FRAME IN THIS BEHALF AND SUCH RETURN SHALL BE ACCOM PANIED BY PROOF OF SUCH DEPOSIT; AND FOR THE PURPOSE OF SUBSECTION (1) THE AMOUNT, IF ANY, ALREADY UTILIZED BY THE ASSESSEE FOR THE PURCH ASE OR CONSTRUCTION OF THE NEW ASSET TOGETHER WITH THE AMO UNT SO DEPOSITED SHALL BE DEEMED TO BE THE COST OF THE NEW ASSET;] THE ASSESSEE HAS NOT DEMONSTRATED THAT BEFORE THE D ATE OF FILLING RETURN FOR A.Y 2007-08, HE HAS DEPOSITED ABOVE SUM IN SPECIFIED BANK OR INSTITUTION. EVEN TILL DATE THESES DETAILS HAVE NOT BEEN SUBMITTED BY THE ASSESSEE. SIMILARLY, ASSESSEE HAS TO SATISFY CONDIT IONS AS PROVIDED IN THE PROVISION TO SECTION 54F(1), WHICH IS REPRODUCED AS UNDER:- PROVIDED THAT NOTHING CONTAINED IN THIS SUBSECTION SHALL APPLY WHERE (A) THE ASSESSEE,- (I) OWNS MORE THAN ONE RESIDENTIAL HOUSE, OTHER THAN T HE NEW ASSET, ON THE DATE OF TRANSFER OF THE ORIGINAL ASSE T; OR (II) PURCHASES ANY RESIDENTIAL HOUSE, OTHER THAN THE NE W ASSET, WITHIN A PERIOD OF ONE YEAR AFTER THE DATE OF TRANS FER OF THE ORIGINAL ASSET; OR (III) CONSTRUCTS ANY RESIDENTIAL HOUSE, OTHER THAN THE NE W ASSET, WITHIN A PERIOD OF THREE YEARS AFTER THE DAT E OF TRANSFER OF THE ORIGINAL ASSET; AND (IV) THE INCOME FROM SUCH RESIDENTIAL HOUSE, OTHER THAN THE ONE RESIDENTIAL HOUSE OWNED ON THE DATE OF TRANSFER OF THE ORIGINAL ASSET, IS CHARGEABLE UNDER THE HEAD INCOME FROM HOUSE PROPER TY ITA NO. 112 (ASR)/2015 ASST. YEARS: 2007-08 6 AGAIN THESE DETAILS WERE NEITHER SUBMITTED TO AO NO R TO UNDERSIGNED. FURTHER NO DETAILS OF CONSTRUCTION OF HOUSE HAS BEEN SUBMITTED FOR VERIFICATION PURPOSES TO THE ASSESSIN G OFFICER. UNDER THE CIRCUMSTANCES AO HAS RIGHTLY REJECTED THE CLAIM OF DEDUCTION U/S 54F. 9. AS REGARDS, THE NEXT GROUND OF APPEAL NO. 10 PERTAI NING TO CHARGING OF INTEREST UNDER SECTIONS 234A 85 234B OF THE I.T. ACT, 1961, IT IS PERTINENT TO POINT THAT IN MY CONSIDERED OPINION, THIS GROUND OF APPEAL BEING CONSEQUENTIAL IN NATURE, REQUIRES NO COMMENTS. GROU ND OF APPEAL NO.12 IS GENERAL AND CONSEQUENTIAL IN NATURE, HENCE DISMISSE D. 6. FEELING AGGRIEVED BY THE ORDER PASSED BY THE LD. C IT(A), THE ASSESSEE PREFERRED THE INSTANT APPEAL . 7. THAT AT THE OUTSET , THE LD. AR ARGUED THAT ALL TH E SIX LEGAL HEIRS SHOULD HAVE BEEN BROUGHT ON RECORD AND THE ASSESSEE (DECEASED) WAS ONLY A NOMINEE AND ACTED AS A NOMINEE ONLY, HOWEVER , THE REVENUE DETERMINED THE COMPLETE LIABILITY ON THE ASSESSEE ( DECEASED) AS THE SAME IS AGAINST THE LAW BECAUSE THE PROPERTY OF THE DEC EASED IS REQUIRED TO BE VEST ACCORDING TO SEC.159 & SEC.168 OF I.T. ACT AND ALSO IN SUCCESSION LAW, ALL THE LEGAL HEIRS ENTITLED TO GET THEIR RESP ECTIVE SHARES IN THE PROPERTY OF THE DECEASED HUSBAND OF THE ASSESSEE. T HE ASSESSEE ALSO FILED THE REVISED RETURN AND CLARIFIED HER STAND THAT SHE IS NOT LIABLE TO PAY ANY TAX AS AN INDIVIDUAL WITH REGARD TO THE PROPERTY OF HER DECEASED HUSBAND. THE LD. AR ALSO SUBMITTED THAT EVEN OTHERW ISE NO ESTOPPLE CAN BE APPLIED IN THE INSTANT CASE AS IT IS AGAINST THE LAW BECAUSE INADVERTENTLY THE ASSESSEE HAD FILED THE RETURN BY DISCLOSING THE TRANSACTIONS OF TWO PROPERTIES IN HER NAME BUT SUBS EQUENTLY, SHE FILED THE REVISED RETURN AND CLARIFIED, THEREFORE, IF INA DVERTENTLY SHE HAD SHOWN THE PROPERTY AS HER OWN THEN ALSO SHE CANNOT BECOME A FULL OWNER AS LAW MANDATES THAT ALL THE LEGAL HEIRS ARE ENTITLED TO GET THEIR RESPECTIVE SHARE UNLESS AND UNTIL SEPARATE ARRANGEMENT HAS BEE N MADE AND/OR DEBARRED FROM INHERITANCE. THE LD. AR ALSO RELIED U PON THE JUDGMENT PASSED BY THE PUNJAB & HARYANA HIGH COURT IN THE CA SE OF CIT VS. BAKSHI SAMPURAN SINGH 133 ITR 0650 AND ARGUED THAT FACTS OF THE CASE ARE SIMILAR TO THE INSTANCE CASE AS THE HONBLE HIG H COURT HELD AS UNDER: ITA NO. 112 (ASR)/2015 ASST. YEARS: 2007-08 7 8.AFTER HEARING THE LEARNED COUNSEL FOR THE PARTIE S AND GOING THROUGH THE RECORD OF THE CASE, WE ARE OF THE OPINION THAT THE QUESTION OF LAW REFERRED TO US HAS TO BE ANSWERED IN THE AFFIRMATIV E, I.E., IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. MR. AWASTHY, LEARN ED F COUNSEL FOR THE REVENUE, COULD NOT CITE ANY AUTHORITY IN SUPPORT OF HIS CASE. IT IS WELL SETTLED THAT THE INCOME RECEIVED BY THE EXECUTOR DU RING THE COURSE OF ADMINISTRATION BELONGS TO HIM AND HE ALONE IS LIABL E TO BE ASSESSED AS SUCH. THE TITLE OF THE RESIDUARY LEGATEE ACCRUES ON LY WHEN THE ADMINISTRATION IS COMPLETE AND AFTER THE RESIDUE IS ASCERTAINED AND NOT TILL THEN. THIS PRINCIPLE IS ENSHRINED IN THE PROVISIONS OF S. 168 OF THE ACT. THIS VIEW ALSO FINDS SUPPORT; FROM A NUMBER OF DECIDED C ASES, SUCH AS, V. M. RAGHAVALU NAIDU AND SONS VS. CIT (SUPRA), ASIT KUMA R GHOSE VS. COMMR. OF AGRL. IT(SUPRA), GOBINDLAL VS. ITO (SUPRA) AND ADMINISTRATOR- GENERAL OF WEST BENGAL FOR THE ESTATE OF RAJA P. N. TAGORE VS. CIT (SUPRA). MR. AWASTHY LEARNED COUNSEL FOR THE REVENUE COULD NO T CITE ANY AUTHORITY TAKING A CONTRARY VIEW. THIS ALSO FOLLOWS FROM A PL AIN READING OF THE PROVISIONS OF S. 168 OF THE ACT. SECTION 168 OF THE ACT IS ALSO DIRECTLY APPLICABLE TO THE INSTANT CASE, THEREFORE, THE ASSESSEE LIABILITY CAN BE REST RICTED TO THE PARTICULAR SHARE. IT WAS FURTHER ARGUED BY THE LD. AR THAT THE CIT(A ) HAS ALSO ERRED IN CONFIRMING THE TAXATION OF NOTIONAL CAPITAL GAIN OF RS.3,65,06,833/- BY WRONGLY UPHOLDING THAT THE TRANSFER OF LAND TOOK PL ACE ON THE VERY DATE OF EXECUTION OF A JOINT DEVELOPMENT AGREEMENT WITH THE DEVELOPERS. IT WAS ARGUED BY THE LD. AR THAT THE LD. CIT(A) HAS ADOPTE D THE WRONG NOTION AND NOT FOLLOWED THE JUDGMENT PASSED BY THE HONBLE HIGH COURT IN C.S. ATWAL VS. CIT 279 CTR 330 (P&H) WHEREAS THE HONBLE HIGH HAS HELD THAT THAT SINCE NO POSSESSION HAD BEEN GIVEN BY THE TRAN SFEROR TO THE TRANSFEREE OF THE ENTIRE LAND IN PART PERFORMANCE O F JDA DATED 25.02.2007 SO AS TO FALL WITHIN THE DOMAIN OF SECTI ON 53A OF THE TRANSFER ACT AND CONSEQUENTLY, SECTION 2(47)(V) OF THE I.T. ACT, DID NOT APPLY, THAT FURTHER, WILLINGNESS TO PERFORM THEIR PART OF THE C ONTRACT WAS ABSENT ON THE PART OF THE DEVELOPERS, AS IT COULD NOT BE PERF ORMED BY THEM, WHICH WAS ONE OF THE CONDITIONS PRECEDENT FOR APPLYING SE CTION 53A OF THE TRANSFER ACT. FURTHER, IN CLAUSE 26 OF THE JDA DATE D 25.02.2007, THE PRINCIPLE OF FORCE MAJORE HAD BEEN PROVIDED FOR, WH ICH WOULD BE APPLICABLE WITH FULL VIGOUR IN THE CIRCUMSTANCES. F ROM THE CUMULATIVE ITA NO. 112 (ASR)/2015 ASST. YEARS: 2007-08 8 EFFECT OF THE COVENANTS CONTAINED IN THE JDA READ W ITH THE REGISTERED SPECIAL POWER OF ATTORNEY DATED 26.02.2007, IT COUL D NOT BE HELD THAT THE MANDATORY REQUIREMENTS OF SECTION 53A OF THE TRANSF ER ACT WERE COMPLIED WITH, WHICH STOOD INCORPORATED IN SECTION 2(47)(V) OF THE ACT AND ONCE THAT WAS SO, IT COULD NOT BE SAID THAT THE ASS ESSEES WERE LIABLE TO CAPITAL GAIN TAX IN RESPECT OF THE REMAINING LAND W HICH WAS NOT TRANSFERRED BY THEM TO THE DEVELOPER/BUILDER BECAUS E OF SUPERVISING EVENT AND NOT ON ACCOUNT OF ANY VOLITION ON THEIR P ART; AND THAT VIEWED FROM ANOTHER ANGEL, IT COULD NOT BE SAID THAT ANY I NCOME CHARGEABLE TO CAPITAL GAINS TAX IN RESPECT OF THE REMAINING LAND HAD ACCRUED OR ARISEN TO THE ASSESSEE IN THE FACTS OF THE CASE. THE LD. AR FURTHER SUBMITTED THAT EXEMPTION CLAIMED U/S 54F OUGHT TO HAVE BEEN ALLOWED IN FAVOUR OF THE ASSESSE E. 8. ON THE CONTRARY, THE LD. DR SUBMITTED THAT THE CAS ES WHICH HAVE BEEN RELIED UPON BY THE LD. AR ARE DISTINGUISHABLE TO THE FACTS OF THE INSTANT CASE. IT WAS FURTHER ARGUED THAT EVEN OTHER WISE OTHER LEGAL HEIRS HAVE NOT OBJECTED TO THE ORIGINAL RETURN OF THE ASS ESSEE (DECEASED) NOW AS REFLECTS FROM THE ASSESSMENT ORDER ITSELF. IT WAS FURTHER ARGUED BY THE LD. DR THAT THE ORDER PASSED U/S 263 BY THE LD. CIT WAS NEVER BEEN AGITATED AND/OR CHALL ENGED BY THE ASSESSEE, THEREFORE, THE ORDER PASSED BY THE AUTHOR ITIES BELOW DOES NOT REQUIRES TO BE INTERFERED WITH AND SAME ARE LIKELY TO BE UPHELD/CONFIRMED. 9. WE HAVE GONE THROUGH THE FACTS AND CIRCUMSTANCES O F THE CASE AND RELEVANT RECORD AS WELL AS RIVAL SUBMISSIONS OF THE PARTIES. AT THE OUTSET, IT IS RELEVANT TO MENTION HEREIN THAT THE ASSESSEE WAS A WIFE OF LATE SHRI KARTAR SINGH, WHO HAD DIED ON 6.01.2006, AND HE WAS SURVIVED BY THREE SONS, TWO DAUGHTERS AND ONE WIFE AS KARTAR SINGH WA S A MEMBER OF THE ITA NO. 112 (ASR)/2015 ASST. YEARS: 2007-08 9 PUNJAB CO-OPERATIVE HOUSE BUILDING SOCIETY, MOHALI AND HE WAS ALLOTTED PLOT NO.44 MEASURING 1000 SQ. YARDS VI DE ALLOTMENT LETTER DATED 9 TH JANUARY, 2014, THAT THE ASSESSEE HAD ENTERED INTO T HE SALE AGREEMENT AND NONE OF THE OTHER LEGAL HEIRS ACTED O R PARTICIPATED IN THE TRANSACTIONS AND IT REFLECTS FROM THE RECORD THAT S MT. MANJEET KAUR (ASSESSEE) ACTED AS SOLE OWNER OF THE SAID PROPERTY MAY BE ON WRONG INFORMATION, GUIDANCE OR LACK OF KNOWLEDGE. ACCORDI NG TO THE HINDU SUCCESSION ACT AND OR OTHER SUBSIDIARY LAW IN INTES TATE SUCCESSION , ALL THE LEGAL HEIRS ARE ENTITLED TO GET THEIR RESPECTIV E SHARES IN THE PROPERTY OF DECEASED IN ACCORDANCE WITH LAW, HOWEVER IN THE INS TANT CASE THE ASSESSEE FILED THE ORIGINAL RETURN IN WHICH SHE HAD SHOWN THE TRANSACTION OF PROPERTY UNDER QUESTION BUT LATER ON FILED THE R EVISED RETURN AND TRY TO APPRISE THE REVENUE AUTHORITIES THAT SHE IS NOT A S OLE OWNER OF THE SAID PROPERTY AND HAVING DISCUSSED THE DETAILS OF THE LE GAL HEIRS AND OTHER RELEVANT INFORMATION RELATING TO HER DECEASED HUSBA ND, IT WAS INCUMBENT UPON THE ASSESSING OFFICER TO BRING ON RECORD ALL T HE LEGAL HEIRS OF TO ASSESS THE IMPUGNED CAPITAL GAIN, RATHER THAN RESTR ICTING IT IN THE HANDS OF MRS. MANJEET KAUR. WE HAVE MINUTELY GONE THROUGH THE DOCUMENTS AS IT REFLECTS FROM THE FACTS THAT THE ASSESSEE HAVE R ECEIVED THE EARNEST MONEY FROM THE PUNJAB CO-OPERATIVE HOUSE BUILDING S OCIETY, MOHALI, BUT THERE IS NO DOCUMENT WHICH REFLECTS THAT EARNEST MO NEY HAVE BEEN DISTRIBUTED AMONG THE LEGAL HEIRS OR NOT EVEN OTHER WISE THIS REQUIRED TO BE INVESTED THAT WHETHER THE ASSESSEE HAD SHOWN HER SELF AS SOLE AND EXCLUSIVE OWNER OF THE PROPERTIES UNDER CONSIDERATI ON AND/OR HAVING ANY TESTAMENTARY DOCUMENTS TO CLAIM EXCLUSIVE OWNERSHIP WITH RIGHTS TO TAKE CARE, DEAL AND DISPOSED OFF THE PROPERTY UNDER QUES TION. FOR THE SAKE OF BREVITY, WE FEEL IT APPROPRIATE TO REPRODUCE THE CONTENTS OF THE SECTION159 & 168 OF THE I.T. ACT. SEC.159(1 ) WHERE A PERSON DIES, HIS LEGAL REPRESENTATIVE SHA LL BE LIABLE TO PAY ANY SUM WHICH THE DECEASED WOULD HAVE BEEN LIABLE T O PAY IF HE HAD NOT DIED, IN THE LIKE MANNER AND TO THE SAME EX TENT AS THE DECEASED. (2) FOR THE PURPOSE OF MAKING AN ASSESSMENT (INCLU DING AN ASSESSMENT, REASSESSMENT OR RECOMPUTATION UNDER SEC TION 147) OF ITA NO. 112 (ASR)/2015 ASST. YEARS: 2007-08 10 THE INCOME OF DECEASED AND FOR THE PURPOSE OF LEVYI NG ANY SUM IN THE HANDS OF THE LEGAL REPRESENTATIVE IN ACCORDANCE WITH THE PROVISIONS OF SUB-SECTION(1),- (A) ANY PROCEEDING TAKEN AGAINST THE DECEASED BEFO RE HIS DEATH SHALL BE DEEMED TO HAVE BEEN TAKEN AGAINST TH E LEGAL REPRESENTATIVE AND MAY BE CONTINUED AGAINST THE LEG AL REPRESENTATIVE FROM THE STAGE AT WHICH IT STOOD ON THE DATE OF THE DEATH OF THE DECEASED; (B) ANY PROCEEDING WHICH COULD HAVE BEEN TAKEN AGA INST THE DECEASED IF HE HAD SURVIVED, MAY BE TAKEN AGAINST T HE LEGAL REPRESENTATIVE; AND (C ) ALL THE PROVISIONS OF THIS ACT SHALL APPLY ACC ORDINGLY. (3) THE LEGAL REPRESENTATIVE OF THE DECEASED SHALL , FOR THE PURPOSES OF THIS ACT, BE DEEMED TO BE AN ASSESSEE. (4) EVERY LEGAL REPRESENTATIVE SHALL BE PERSONALLY LIABLE FOR ANY TAX PAYABLE BY HIS IN HIS CAPACITY AS LEGAL REPRESENTAT IVE IF, WHILE HIS LIABILITY FOR TAX REMAINS UNDERCHARGED, HE CREATES A CHARGE ON OR DISPOSES OF OR PARTS WITH ANY ASSETS OF THE ESTATE OF THE DECEASED, WHICH ARE IN, OR MAY COME INTO, HIS POSSESSION, BUT SUCH LIABILITY SHALL BE LIMITED TO THE VALUE OF THE ASSET SO CHARG ED, DISPOSED OF OR PARTED WITH. (5) THE PROVISIONS OF SUB-SECTION (2) OF SECTION 1 61, SECTIO162, AND SECTION 167, SHALL, SO FAR AS MAY BE AND TO THE EXT ENT TO WHICH THEY ARE NOT INCONSISTENT WITH THE PROVISIONS OF THIS SE CTION, APPLY IN RELATION TO A LEGAL REPRESENTATIVE. (6) THE LIABILITY OF A LEGAL REPRESENTATIVE UNDER THIS SECTION SHALL, SUBJECT TO THE PROVISIONS OF SUB-SECTION (4) AND SU B-SECTION(5), BE LIMITED TO THE EXTENT TO WHICH THE ESTATE IS CAPABL E OF MEETING THE LIABILITY. SEC. 168 (1) SUBJECT AS HEREINAFTER PROVIDED, THE INCOME OF THE ESTATE OF A DECEASED PERSON SHALL BE CHARGEABLE TO TAX IN THE H ANDS OF THE EXECUTOR,- (A) IF THERE IS ONLY ONE EXECUTOR, THEN, AS IF THE EXE CUTOR WERE AN INDIVIDUAL; OR (B) IF THERE ARE MORE EXECUTORS THAN ONE, AS IF THE EXECUTOR WERE AN ASSOCIATION OF PERSONS; AND FOR THE PURPOSES OF THIS ACT, THE EXECUTO R SHALL BE DEEMED TO BE RESIDENT OR NON-RESIDENT ACCORDING AS THE DECEASED PERSONS WAS A RESIDENT OR NON-RESIDENT DURING THE PREVIOUS YEAR I N WHICH HIS DEATH TOOK PLACE. (2) THE ASSESSMENT OF AN EXECUTOR UNDER THIS SECTI ON SHALL BE MADE SEPARATELY FROM ANY ASSESSMENT THAT MAY BE MADE ON HIM IN RESPECT OF THIS OWN INCOME. (3) SEPARATE ASSESSMENT SHALL BE MADE UNDER THIS S ECTION ON THE TOTAL INCOME OF EACH COMPLETED PREVIOUS YEAR OR PART THEREOF AS IS INCLUDED IN THE PERIOD FROM THE DATE OF THE DEATH TO THE DATE OF COMPLETE DISTRIBUTION TO THE BENEFICIARIES OF THE ESTATE ACCORDING TO THEIR SEVE RAL INTERESTS. (4) IN COMPUTING THE TOTAL INCOME OF ANY PREVIOUS YEAR UNDER THIS SECTION, ANY INCOME OF THE ESTATE OF THAT PREVIOUS YEAR DISTRIBU TED TO, OR APPLIED TO THE BENEFIT OF, ANY SPECIFIC LEGATEE OF THE ESTATE DURI NG THAT PREVIOUS YEAR SHALL BE EXCLUDED; BUT THE INCOME SO EXCLUDED SHALL BE IN CLUDED IN THE TOTAL INCOME OF THE PREVIOUS YEAR OF SUCH SPECIFIC LEGATE E. ITA NO. 112 (ASR)/2015 ASST. YEARS: 2007-08 11 IN THE INSTANT CASE ALSO THE ASSESSEE CANNO T BE FASTEN WITH THE COMPLETE LIABILITY UNTIL AND UNLESS FINALIZATION/AN D/OR RECEIVING THE ENTIRE SALE CONSIDERATION AS THE PUNJAB & HARYANA H IGH COURT IN THE CASE OF C.S. ATWAL VS. CIT (SUPRA) HELD AS UNDER: SINCE NO POSSESSION HAD BEEN GIVEN BY THE TRANSFER OR TO THE TRANSFEREE OF THE ENTIRE LAND IN PART PERFORMANCE OF JDA DATED 25 .02.2007 SO AS TO FALL WITHIN THE DOMAIN OF SECTION 53A OF THE TRANSFER AC T AND CONSEQUENTLY, SECTION 2(47)(V) OF THE I.T. ACT, DID NOT APPLY, TH AT FURTHER, WILLINGNESS TO PERFORM THEIR PART OF THE CONTRACT WAS ABSENT ON TH E PART OF THE DEVELOPERS, OR IT COULD NOT BE PERFORMED BY THEM, WHICH WAS ONE OF THE CONDITIONS PRECEDENT FOR APPLYING SECTION 53A OF THE TRANSFER ACT; THAT IN CLAUSE 26 OF THE JDA DATED 25.02.2007, THE PRINCIPLE OF FORCE MA JOR HAD BEEN PROVIDED FOR, WHICH WOULD BE APPLICABLE WITH FULL VIGOUR IN THE CIRCUMSTANCES; THAT FROM THE CUMULATIVE EFFECT OF THE COVENANTS CONTAIN ED IN THE JDA READ WITH THE REGISTERED SPECIAL POWER OF ATTORNEY DATED 26. 02.2007, IT COULD NOT BE HELD THAT THE MANDATORY REQUIREMENTS OF SECTION 53A OF THE TRANSFER ACT WERE COMPLIED WITH, WHICH STOOD INCORPORATED IN SEC TION 2(47)(V) OF THE ACT; THAT ONCE THAT WAS SO, IT COULD NOT BE SAID THAT TH E ASSESSEES WERE LIABLE TO CAPITAL GAIN TAX IN RESPECT OF THE REMAINING LAN D WHICH WAS NOT TRANSFERRED BY THEM TO THE DEVELOPER/BUILDER BECAUS E OF SUPERVISING EVENT AND NOT ON ACCOUNT OF ANY VOLITION ON THEIR PART; A ND THAT VIEWED FROM ANOTHER ANGLE, IT COULD NOT BE SAID THAT ANY INCOME CHARGEABLE TO CAPITAL GAINS TAX IN RESPECT OF THE REMAINING LAND HAD ACCR UED OR ARISEN TO THE ASSESSEE IN THE FACTS OF THE CASE. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE S AND ALSO RESPECTFULLY FOLLOWING THE JUDGMENT PASSED BY THE H ONBLE PUNJAB & HARYANA HIGH COURT, WE FEEL IT APPROPRIATE THAT THE LD. CIT WOULD HAVE TAKEN INTO CONSIDERATION OF THE ACTUAL AMOUNT RECEI VED AS AN EARNEST MONEY FOR TAXATION PURPOSES. WITH REGARD TO THE CASES RELIED UPON BY THE LD AR, IT REFLECTS THAT ALTHOUGH THE CONTROVERSY MORE OR LESS IS THE SAME A S IN THE INSTANT CASE, HOWEVER, THE FACTS ARE DISSIMILAR BECAUSE IN THOSE CASES, THE PROPERTY HAVE BEEN INHERITED THROUGH WILL BUT IN THE INSTANT CASES THAT IS NOT OF THE CASE. FINALLY AS THE INSTANT CASE REQUIRES ELABORATE DIS CUSSION WITH REGARD TO THE RIGHTS OF THE ASSESSEE AS WELL AS OTH ER LEGAL HEIRS QUA ENTITLEMENT /RIGHTS/ OBLIGATION/LIABILITIES OF INDI VIDUAL AND AS THE ORDER ITA NO. 112 (ASR)/2015 ASST. YEARS: 2007-08 12 PASSED BY THE LD. CIT IS ERRONEOUS TO THE EXTENT TH AT HE HAS CONSIDERED THE COMPLETE AMOUNT INCLUDING UNPAID AN D UNREALIZED ALSO AS NOTIONAL CAPITAL GAIN, THEREFORE, IN OUR CONSIDE RED OPINION, THIS IS FIT CASE TO BE REMANDED TO THE FILE OF THE LD. ASSESSIN G OFFICER FOR DECIDING AFRESH WHILE CONSIDERING THE DOCUMENTS PERTAINING T O THE SALE DEED, AGREEMENT, SOCIETY DOCUMENTS, RELINQUISHMENT DEEDS ETC. AND OTHER DOCUMENTS SUBMITTED BY THE OTHER LEGAL HEIR AND/OR CLAIM OF THE ASSESSEE AS WELL AS IN THE LIGHT OF THE JUDGMENTS, THE APPLICABILITY OF THE SAME IN THE INSTANT CASE AND ALSO WHILE CONSIDERING THE SEC.159 AND 168 OF I.T. ACT AND HINDU SUCCESSION ACT ETC TO WHICH THE ASSESSEE AND LEGAL HEIRS ARE SUBJECTED, HENCE, IN THE INTEREST O F JUSTICE, WE REMAND THE CASE TO THE FILE OF LD. ASSESSING OFFICER FOR DECI DING AFRESH. 11. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 30. 12. 2016 SD/- SD/- (T. S. KAPOOR) (N.K.CHOUDHRY) ACCOUNTANT MEMBER JUDICIA L MEMBER DATED:30.12.2016. /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER