ITO, Nagercoil V. Smt. J.Bella Bai, Nagercoil

ITA 1229/CHNY/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81188 (ITAT-CHENNAI)
• Duration Of Justice: 3 year(s) 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-09-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 11-09-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 04-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GURU BHASHYAM
• Assessee Lawyers: R MEENAKSHISUNDRAM
• Keywords: Tax effect
• Section: 143(3); 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI . , . . , ! ' [BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMB ER AND SHRI S. S. GODARA, JUDICIAL MEMBER] ./ I.T.A.NO.1229/MDS/2011 / ASSESSMENT YEAR : 2005-06 THE INCOME TAX OFFICER WARD I(1) NAGERCOIL VS. SMT. J.BELLA BAI PROP. ANNALAKSHMI TRADERS MUDALIMAR SOUTH STREET KOTTAR, NAGERCOIL - 2 [PAN AGKPB 5130 E ] ( #$ / APPELLANT) ( %&#$ /RESPONDENT) / APPELLANT BY : SHRI GURU BHASHYAM, JCIT /RESPONDENT BY : SHRI R. MEENAKSHISUNDRAM, ADVOCATE / DATE OF HEARING : 11-09-2014 ! / DATE OF PRONOUNCEMENT : 25-09-2014 ' / O R D E R PER S.S.GODARA, JUDICIAL MEMBER THIS REVENUES APPEAL FOR ASSESSMENT YEAR 2005 -06, IS DIRECTED AGAINST ORDER OF THE COMMISSIONER OF INCO ME-TAX(APPEALS)-I MADURAI, DATED 1.3.2011, PASSED IN I.T.A.NO.0097/07 -08 DELETING CAPITAL GAINS ADDITION OF ` 21,40,876/- IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT). I.T.A.NO. 1229/11 :- 2 -: 2. THE ASSESSEE IS AN INDIVIDUAL. SHE IS A RICE ME RCHANT. THE ASSESSEE HAD FILED HER RETURN ON 30.10.2005 ADMITTI NG TOTAL INCOME OF ` 1,04,852/- WITH AGRICULTURAL INCOME OF ` 2,57,700/-. THE SAME WAS SUMMARILY PROCESSED. 3. THEREAFTER, THE ASSESSING OFFICER ISSUED SECTION 14 8 NOTICE DATED 27.11.2006 TO EXAMINE THE CAPITAL LOSS OF ` 72,270/- CARRIED FORWARD FROM ASSESSMENT YEAR 2004-05. THE ASSESSE E REITERATED HER RETURN ALREADY SUBMITTED. THE ASSESSING OFFICER TO OK UP RE- ASSESSMENT. THE ASSESSEE HAD OWNED/POSSESSED AN IM MOVABLE PROPERTY AT MELA RAMANPUTHUR, THIRUKUNDUMBA KOVIL S TREET, NAGERCOIL VILLAGE, DISTRICT KANYAKUMARI. SHE HAD EXECUTED A SALE AGREEMENT/POWER OF ATTORNEY DATED 8.3.2004 IN RESPE CT THEREOF MEASURING 6653 SQ FT IN FAVOUR OF SHRI ROBERT SHIBU DAS FOR ` 2.5 LAKHS. POSSESSION ALSO APPEARS TO HAVE BEEN DELIV ERED. THIS TRANSACTION FELL WITHIN THE ACCOUNTING PERIOD 1.4.2 003 TO 31.3.2004 I.E PREVIOUS YEAR RELEVANT TO THE PRECEDING ASSESSMENT YEAR 2004-05. THE ASSESSEE HAD TREATED THE SAID AGREEMENT/GENERA L POWER OF ATTORNEY AS TRANSFER OF HER PROPERTY; ADMITTED CA PITAL LOSS OF ` 72,270/- AND SOUGHT TO CARRY IT FORWARD IN RETURN P ERTAINING TO ASSESSMENT YEAR 2004-05. THE ASSESSING OFFICER DIS ALLOWED THIS CAPITAL CLAIM ON 22.11.2006 AND HELD THAT IN VIEW O F SALE DEEDS I.T.A.NO. 1229/11 :- 3 -: EXECUTED ON 12.1.2005 AND 16.3.2005 (IN IMPUGNED AS SESSMENT YEAR) NO TRANSFER HAD TAKEN PLACE IN THE SAID ASSESSMEN T YEAR. THE CIT(A) REVERSED THE SAID FINDING ON 7.12.2007. THE 'TRIBU NAL' UPHELD THE CIT(A)S ORDER BECAUSE OF LOW TAX EFFECT. 4. THEREAFTER, IN THE RELEVANT ACCOUNTING PERIOD PER TAINING TO THE IMPUGNED ASSESSMENT YEAR, THE VENDEE/POWER OF A TTORNEY HOLDER (SUPRA) HAD EXECUTED TWO SALE DEEDS DATED 12.1.2005 AND 16.3.2005 FOR ` 4.72 LAKHS AND ` 4,40,500/-, RESPECTIVELY. PER ASSESSING OFFICER, THE TRANSFER HAD TAKEN PLACE ONLY IN THE IMPUGNED A SSESSMENT YEAR. HE TOOK INTO ACCOUNT THE ASSESSMENT OF ASSESSMENT Y EAR 2004-05 AND RE-OPENED THE ONE PERTAINING TO THE IMPUGNED ASSESS MENT YEAR. HE FRAMED RE-ASSESSMENT ON 27.12.2007 ASSESSING IMPUGN ED CAPITAL GAINS OF ` 21,40,876/- AFTER OBSERVING THAT THE TRANSFERS P ERTAINING TO THE ASSESSEES PROPERTIES SUBJECT MATTER OF AGREEMENT A ND GENERAL POWER OF ATTORNEY(SUPRA) HAD TAKEN PLACE ONLY IN THE IMPU GNED ASSESSMENT YEAR. 5. THE ASSESSEE PREFERRED AN APPEAL. THE CIT(A) HAS DELETED THIS CAPITAL GAINS ADDITION BY HOLDING THAT THE VER Y TRANSACTION HAD ALREADY BEEN HELD TO BE TRANSFER IN THE PRECEDING ASSESSMENT YEAR. HE HOLDS THAT THE POWER HOLDER HAD JOINED ADJOINING PROPERTIES, DEVELOPED THE ENTIRE CHUNK AND SOLD IT AS I.T.A.NO. 1229/11 :- 4 -: RESIDENTIAL PLOTS FOR WHICH THE ASSESSEE IS NOT LI ABLE TO BE ASSESSED. THEREFORE, THE ASSESSEE HAS SUCCEEDED BEFORE THE C IT(A). THIS LEAVES THE REVENUE AGGRIEVED. 6. WE HAVE HEARD BOTH PARTIES AND PERUSED THE CASE FIL E. THE ONLY DISPUTE BETWEEN THE PARTIES IN THE PRESENT CAS E IS AS TO WHETHER THE ASSESSEE HAD TRANSFERRED HER PROPERTIES IN ASS ESSMENT YEAR 2004- 05 BY WAY OF AGREEMENT TO SELL, GENERAL POWER OF AT TORNEY AND DELIVERY OF POSSESSION OR SALE DEEDS EXECUTED IN ASSESSMENT YEAR 2005-06. WE FIND THAT THE CIT(A) HAS ALREADY HELD THAT THE S ALE AGREEMENT/ GENERAL POWER OF ATTORNEY AMOUNTED TO TRANSFER U /S 2(47) OF THE ACT. A CO-ORDINATE BENCH OF THE 'TRIBUNAL' HAS ALSO UPHE LD THE SAID FINDINGS. MORE PARTICULARLY, FOR LOW TAX EFFECT. THE REVEN UE IS TECHNICALLY RIGHT IN SUBMITTING THAT THE TRIBUNALS ORDER HAS NOT UPH ELD THE CIT(A)S FINDINGS ON MERITS. THE FACT REMAINS THAT THE ASS ESSEES SALE AGREEMENTS AND POWER OF ATTORNEY(SUPRA) HAVE ALREAD Y BEEN ASSESSED ACCORDINGLY FOR COMPUTING CAPITAL LOSS. ONCE THAT IS THE CASE, NECESSARY CONSEQUENCES HAVE TO FOLLOW AND THE VERY PROPERTY CANNOT BE ASSESSED TWICE I.E IN ASSESSMENT YEAR 2004-05 A ND 2005-06. IT ALSO EMANATES FROM THE CASE FILE THAT IN THE ASSES SEES PLACE, THE VENDEE/POWER OF ATTORNEY HOLDER(SUPRA) HAS ACTED A S OWNER IN BOTH SALE DEEDS. THUS, WE INFER THAT THE ASSESSEE HAD CEASED TO BE OWNER I.T.A.NO. 1229/11 :- 5 -: OF HER IMMOVABLE PROPERTIES AFORESAID ON 8.3.2004 I TSELF. THIS ALSO LEADS US TO A FURTHER CONCLUSION THAT ONLY SHRI ROB ERT SHIBU DAS HAD CARRIED OUT DEVELOPMENT IN THE PROPERTY AND SOLD IT FOR GAINS WHICH CANNOT BE ASSESSED IN THE ASSESSEES HANDS. SO, WE REJECT THE REVENUES GROUNDS AND UPHOLD THE CIT(A)S ORDER. 7. THE REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED ON THURSDAY, THE 25 TH OF SEPTEMBER, 2014, AT CHENNAI. SD/- SD/- ( . ) (A. MOHAN ALANKAMONY) / ACCOUNTANT MEMBER ( . . ) (S. S. GODARA) ! / JUDICIAL MEMBER '# / CHENNAI $% / DATED: 25 TH SEPTEMBER, 2014 RD %& '()( / COPY TO : 1 . / APPELLANT 2 . / RESPONDENT 3. *+, / CIT(A) 4. * / CIT 5. (-. / / DR 6. .01 / GF