SHRI RAGHVENDRA GOSWAMI, Bhopal V. THE ACIT-3(1), Bhopal

ITA 113/IND/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2162 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 9 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 15-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K G GOYAL
• Assessee Lawyers: SHRIASHISHGOYAL N D PATVA ARS
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Reason to believe
• Section: 143(3); 50C; 147; 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCHE, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO.113/IND/2016 ASSESSMENT YEAR: 2009-10 SHRI RAGHVENDRA GOSWAMI, 172, C-SECTION INDUSTRIAL AREA GOVINDPURA, BHOPAL, / VS. ACIT - 3(1), BHOPAL (APPELLANT) (REVENUE ) P.A. NO.AAZPG0982C APPELLANT BY SHRIASHISHGOYAL& N. D. PATVA, (ARS) REVENUE BY SHRI K. G. GOYAL SR. DR DATE OF HEARING: 04.12.2017 DATE OF PRONOUNCEMENT: 05.12.2017 / O R D E R PER KUL BHARAT, J.M: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX(APPEALS), BHOPAL-2, MADH YA PRADESH (IN SHORT CIT), DATED 16.11.2015 FOR THE A.Y. 200 9-10. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT() WAS NOT JUSTIFIED IN UPHOLDING THAT THE ORDER U/S. 143(3)/147 PASSED BY THE ASSESSING OFFICER WAS NOT ILLEGAL, INVALID AND UNTENABLE IN LAW. RAGHVENDRAGOSWAMI 2 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) WAS NOT JUSTIFIED IN HOLDING THAT THE ASSESS ING OFFICER HAS RIGHTLY INVOKED THE PROVISIONS OF SECTION 50C TO CO MPUTE LONG TERM CAPITAL GAIN AT RS.61,53,470/-. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) WAS NOT JUSTIFIED IN HOLDING THAT THE AMENDM ENT TO SECTION 50C FROM 01.10.2009 APPLIED RETROSPECTIVELY TO THE TRANSACTION THAT TOOK PLACE IN THE ASSMT. YEAR 2008 -09. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT() WAS NOT JUSTIFIED IN DIRECTING THE ASSESSING OFFICER TO ASSESS THE LONG TERM CAPITAL GAIN OF RS.61,53,470/- IN THE ASSEMT. YEAR 2008-09 IN PLACE OF RS.22,50,190/-, WH ICH WAS ALREADY ASSESSED U/S 143(3) AND IN THIS WAY TO INCR EASE THE CAPITAL GAIN BY RS.39,03,280/- IN THE ASSMT. YEAR 2 008-09. 2 . BRIEFLY STATED FACTS ARE THAT THE CASE OF THE ASS ESSEE WAS REOPENED FOR ASSESSMENT IN THE ASSESSMENT U/S 143(3 ) R.W. SECTION 147 WAS FRAMED VIDE ORDER DATED 18.03.2014 PERTAINI NG TO THE A.Y. 2009-10 WHILE FRAMING REASSESSMENT THE ASSESSING OF FICER OBSERVED THAT DURING THE YEAR UNDER APPEAL THE ASSESSEE HAD SOLD AN AGRICULTURAL LAND AT SALE CONSIDERATION OF RS.28,00 ,000/- HOWEVER AS PER THE STAMP DUTY VALUATION AUTHORITY THE SAME IS RS.67,55,000/-. AFTER GIVING NOTICES TO THE ASSESSE E, THE ASSESSING OFFICER ADOPTED THE VALUE AS ADOPTED BY STAMP DUTY VALUATION AUTHORITY AND RECOMPUTED THE CAPITAL GAIN THEREBY T HE ASSESSING OFFICER MADE ADDITION OF RS.61,53,470/- AND ASSESSE D INCOME AT RS.96,79,760/- AGAINST THE INCOME DECLARED AT RS.35 ,26,290/-. 3. BEING AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) WHO AFTER CONSIDERING THE SUBMISSIONS PARTLY ALLOWED THE RAGHVENDRAGOSWAMI 3 APPEAL THEREBY HE DIRECTED THE ASSESSING OFFICER TO ASSESS THE LONG TERM CAPITAL GAIN OF RS.61,53,470/- FOR A.Y. 2008-0 9 WHERE THE PART OF IT ALREADY STOOD ASSESSED AT RS.22,50,190/-. 4. GROUND NO.1 IS AGAINST VALIDITY OF THE REASSESSM ENT. LD. COUNSEL FOR THE ASSESSEE VEHEMENTLY ARGUED THAT THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN MAKING THE ADDITION IN THE YEAR UNDER APPEAL. HE SUBMITTED THAT THE STAND OF T HE REVENUE IS CONTRADICTED. HE CONTENDED THAT THE AGREEMENT TO SA LE WAS EXECUTED ON 31.05.2007 WHEREBY THE POSSESSION OF LAND WAS GI VEN TO THE ASSESSEE AND ENTIRE SALE CONSIDERATION WAS ALSO PAI D ON THAT DATE ITSELF. UNDER THESE FACTS, IN TERMS OF SECTION 2(4 7) OF THE INCOME TAX ACT, THE TRANSFER STOOD COMPLETED ON 31.05.2007, TH EREFORE, THE TRANSACTION IS TO BE RELATED BACK TO ASSESSMENT YEA R 2008-09 AS AGAINST THE ASSESSMENT YEAR 2009-10 WHICH IS REOPEN ED BY THE ASSESSING OFFICER. HE THEREFORE SUBMITTED THAT UNDE R THESE FACTS THE REOPENING OF THE ASSESSMENT FOR A.Y. 2009-10 IS VIT IATED ON THE CONTRARY. LD. DEPARTMENTAL REPRESENTATIVE (DR) STRO NGLY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED T HAT THE TRANSACTION WAS COMPLETED IN THE YEAR UNDER APPEAL. THEREFORE, THE ASSESSING OFFICER WAS JUSTIFIED IN REOPENING THE AS SESSMENT OF THE ASSESSMENT YEAR 2009-10 AND ASSESSING THE INCOME ES CAPED IN THE YEAR UNDER APPEAL. 5. WE HAVE HEARD THE RIVAL CONTENTIONS PERUSED THE MATERIAL AVAILABLE ON RECORD AND GOING THROUGH THE ORDERS OF THE AUTHORITIES RAGHVENDRAGOSWAMI 4 BELOW. BEFORE ADVERTING TO THE RIVAL CONTENTIONS, I T IS PERTINENT TO NOTE THAT THE UNDISPUTED FACTS IS THAT THE ASSESSE E EXECUTED AN AGREEMENT TO SALE ON 31.05.2007, IN PURSUANCE OF T HIS AGREEMENT PARTIES THERETO RECEIVED ENTIRE SALE CONSIDERATION AND POSSESSION THEREOF IN TERMS OF THE AGREEMENT TO SALE DATED 31. 05.2007. THIS FACT IS NOT CONTROVERTED BY THE REVENUE BY PLACING ANY CONTRARY MATERIAL ON RECORD. SECTION 2(47) OF THE INCOME TAX ACT, DEFINES TRANSFER AS UNDER: TRANSFER, IN RELATION TO A CAPITAL ASSET, INCLUDES - (I) THE SALE, EXCHANGE OR RELINQUISHMENT OF THE ASSET, OR (II) THE EXTINGUISHMENT OF ANY RIGHTS THEREIN OR (III) THE COMPULSORY ACQUISITION THEREOF UNDER ANY LAW; O R (IV) IN A CASE WHERE THE ASSET IS CONVERTED BY THE OWNER THEREOF INTO, OR IS TREATED BY HIM AS, STOCK-IN-TRA DE OF A BUSINESS CARRIED ON BY HIM, SUCH CONVERSION OR TREA TMENT OR (IVA) THE MATURITY OR REDEMPTION OF A ZERO COUPON B OND, OR (V) ANY TRANSACTION INVOLVING THE ALLOWING OF THE POSSE SSION OF ANY IMMOVABLE PROPERTY TO BE TAKEN OR RETAINED IN P ART PERFORMANCE OF A CONTRACT OF THE NATURE REFERRED TO IN SECTION 53A OF THE TRANSFER OF PROPERTY ACT, 1882(4 OF 1882) OR (VI) ANY TRANSACTION (WHETHER BY WAY OF BECOMING A MEMBE R OF, OR ACQUIRING SHARES IN , A CO-OPERATIVE SOCIETY , COMPANY OR OTHER ASSOCIATION OF PERSONS OR BY WAY OF ANY AGREEMENT OR ANY ARRANGEMENT OR IN ANY OTHER MANNER WHATSOEVER) WHICH HAS THE EFFECT OF TRANSFERRING OR ENABLING THE ENJOYMENT OF ANY IMMOVABLE PROPERTY. [EXPLANATION 1]- FOR THE PURPOSES OF SUB-CLAUSES (V ) AND (VI) IMMOVABLE PROPERTY SHALL HAVE THE SAME MEANING A S IN CLAUSE (D) OF SECTION 269UA.] EXPLANATION 2- FOR THE REMOVAL OF DOUBTS, IT IS HER EBY CLARIFIED THAT TRANSFER INCLUDED AND SHALL BE DEE M TO RAGHVENDRAGOSWAMI 5 HAVE ALWAYS INCLUDED DISPOSING OF OR PARTING WITH A N ASSET OR ANY INTEREST THEREIN OR CREATING ANY INTER EST IN ANY ASSET IN ANY MANNER WHATSOEVER, DIRECTLY OR INDIREC TLY, ABSOLUTELY OR CONDITIONALLY VOLUNTARILY OR INVOLUNT ARILY, BY WAY OF AN AGREEMENT OR OTHERWISE NOTWITHSTANDING TH AT SUCH TRANSFER OF RIGHTS HAS BEEN CHARACTERISED AS BEING EFFECTED OR DEPENDENT UPON OR FLOWING FROM THE TRAN SFER OF A SHARE OR SHARES OF A COMPANY REGISTERED OR INCORP ORATED OUTSIDE INDIA;] 6. THE CAPITAL GAIN IS TO BE COMPUTED U/S 45 OF THE ACT,ARISING FROM THE TRANSFER OF CAPITAL ASSET. IT IS THE CONTENTIONS OF THE ASSESSEE THAT THE TRA NSFER OF THE CAPITAL ASSET TOOK PLACE ON 31.05.2007 IN THE F.Y. 2007-08 RELEVANT TO A.Y. 2008-09. THE ASSESSING OFFICER HAS REOPENED THE ASSESSMENT IN RESPECT OF THE INCOME ESCAPED ASSESSM ENT PERTAINING TO THE A.Y. 2009-10 AND FURTHER IT IS CONTENDED THA T IT IS UNDISPUTED FACT THAT THE ASSESSEE HAS DULY DISCLOSED THIS TRAN SACTIONS IN HIS RETURN OF INCOME PERTAINING TO THE A.Y. 2008-09 AND IN THE COMPUTATION OF INCOME OF CAPITAL GAIN OF RS.22,50,1 90/- IS OFFERED FOR TAX IN SUPPORT OF THESE CONTENTIONS OUR ATTENTI ON WAS DRAWN TO PAPER BOOK PAGE 16. 7. THE LD. COUNSEL FOR ASSESSEE ALSO DREW OUR ATTE NTION TO THE REASONS RECORDED BY THE AO FOR ISSUANCE OF NOTICE U /S 148 AT PAGE 32 OF PAPER BOOK WHEREIN THE ASSESSING OFFICER HAS STATED THAT HE HAS REASON TO BELIEVE THAT DURING THE ASSESSMENT YE AR 2009-10 THE INCOME TO THE TUNE OF RS.39,55,000/- HAS BEEN ESCAP ED FROM ASSESSMENT. HOWEVER, THE LD. CIT(A) WHILE DECIDING THE APPEAL OF RAGHVENDRAGOSWAMI 6 THE ASSESSEE DIRECTED THE AO TO ASSESS THE LONG TER M CAPITAL GAIN OF RS.61,53,470/- IN THE ASSESSMENT YEAR 2008-09 WHERE PART OF IT ALREADY STOOD ASSESSED AT RS.22,50,190/-. AGAINST T HIS FINDING OF LD. CIT(A), THE REVENUE HAS NOT PREFERRED ANY APPEA L. THEREFORE, IT CAN BE SAFELY INFERRED THAT THE REVENUE HAS ACCEPTE D THAT INCOME WHICH ESCAPED ASSESSMENT WAS PERTAINING TO THE A.Y. 2008-09. HOWEVER, AS PER THE NOTICE FOR REOPENING THE ASSESS MENT YEAR FOR OPENING IS TAKEN AS ASSESSMENT YEAR 2009-10. IN OUR VIEW, THIS IS NOT PERMISSIBLE UNDER THE LAW, IN VIEW OF THE EXPLA NATION TO SECTION 2(47) WHEREIN IT CLARIFIES THAT TRANSFER INCLUDES AND SHALL BE DEEM TO HAVE ALWAYS INCLUDED DISPOSING OF OR PARTING WIT H AN ASSET OR ANY INTEREST THEREIN OR CREATING ANY INTEREST IN ANY AS SET IN ANY MANNER WHATSOEVER, DIRECTLY OR INDIRECTLY, ABSOLUTELY OR C ONDITIONALLY VOLUNTARILY OR INVOLUNTARILY, BY WAY OF AN AGREEMEN T OR OTHERWISE NOTWITHSTANDING THAT SUCH TRANSFER OF RIGHTS HAS BE EN CHARACTERISED AS BEING EFFECTED OR DEPENDENT UPON O R FLOWING FROM THE TRANSFER OF A SHARE OR SHARES OF A COMPANY. HEN CE, UNDER THE FACTS OF THE PRESENT CASE THE TRANSFER OF CAPITAL A SSET TOOK PLACE IN THE FINANCIAL YEAR 2007-08, RELEVANT TO A.Y. 2008-0 9. THE ASSESSING OFFICER IS EMPOWERED AS PER SECTION 147 IF THE ASSE SSING OFFICER HAS REASON TO BELIEVE THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT OR ANY ASSESSMENT YEAR, HE MAY SUBJECT T O THE PROVISIONS OF SECTIONS 148 TO 153 ASSESS OR REASSES S SUCH INCOME AND ALSO ANY OTHER INCOME CHARGEABLE TO TAX WHICH H AS ESCAPED ASSESSMENT AND WHICH COMES TO HIS NOTICE SUBSEQUENT LY IN THE COURSE OF THE PROCEEDINGS. THEREFORE, THE ASSESSING OFFICER SHOULD RAGHVENDRAGOSWAMI 7 FORM A BELIEF IN RESPECT OF THE ESCAPEMENT OF INCOM E PERTAINING TO A PARTICULAR ASSESSMENT YEAR IN THE GIVEN CASE, THE I NCOME ESCAPED RELATES TO THE EARLIER YEAR AND NOTICE IS ISSUED U/ S 148 FOR THE SUBSEQUENT YEAR. 8. THUS, THE FOUNDATION OF REOPENING IS CONTRARY TO THE PROVISIONS OF THE ACT, WE, THEREFORE, QUASH THE IMPUGNED ASSESSME NT ORDER. THE OTHER GROUNDS RAISED IN THIS APPEAL HAVE BECOME INF RUCTUOUS HENCE DISMISSED. BEFORE PARTING WE MAY CLARIFY THE REVENU E WOULD BE AT LIBERTY TO TAKE APPROPRIATE ACTION IF LAW SO PERMIT S, IN RESPECT OF APPROPRIATE ASSESSMENT YEAR. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISPO SED OF IN TERMS OF INDICATED HEREINABOVE. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 05.12.201 7. SD/- (MANISH BORAD) SD/- (KUL BHARAT) /ACCOUNTANT MEMBER / JUDICIALMEMBER INDORE; DATED : 05/ 12/2017 CTX? P.S/. . . COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUA RD FILE. BY ORDER PRIVATE SECRETARY/DDO, INDORE