Ms. Seema Jagota, Jalandhar V. The Dy. Commissioner of Income-tax, Jaandhar city

ITA 13/ASR/2014

• Counselvise Citation: 1320914 RSA 2014
• Duration Of Justice: 1 year(s) 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 19-02-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 08-01-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V K SINGH
• Keywords: Principle of natural justice; Additional evidence; Benefit of exemption

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. A.D.JAIN, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO.13(ASR)/2014 ASSESSMENT YEAR:2008-09 PAN :AALPJ7799J MS. SEEMA JAGOTTA, VS. DY.COMMR. OF INCOME TAX, CIVIL LINES, CIRCLE-III, JALANDHAR. JALANDHAR. (APPELLANT) (RESPONDENT) APPELLANT BY:SH.SANDEEP VIJH, CA RESPONDENT BY:SH.V.K.SINGH, DR DATE OF HEARING:19/02/2015 DATE OF PRONOUNCEMENT:26/02/2015 ORDER PER A.D.JAIN, JM: THIS IS ASSESSEES APPEAL FOR THE ASSESSMENT YEAR 2 008-09, CONTENDING THAT THE LD. CIT(A) HAS ERRED IN UPHOLDING THE ADDI TION OF RS.13,78,316/-, MADE UNDER THE HEAD SHORT TERM CAPITAL GAIN THERE BY DENYING THE BENEFIT OF EXEMPTION U/S 54EC OF THE INCOME TAX ACT, 1961 ( IN SHORT, THE ACT), TO THE ASSESSEE. ITA NO.13(ASR)/2014 2 2. THE ADDITION OF RS.13,78,316/- WAS MADE BY WAY OF SHORT TERM GAIN ON THE SALE OF IMMOVABLE PROPERTY AS AGAINST THE A SSESSEES CLAIM THAT THE CAPITAL GAIN EARNED BY THE ASSESSEE WAS A LONG TERM CAPITAL GAIN. IN HER APPEAL BEFORE THE LD. CIT(A), THE ASSESSEE HAD FILE D THE FOLLOWING WRITTEN SUBMISSION DATED 23.10.2013: THIS IS WITH REFERENCE TO THE HEARING OF THE APPEA L WHEN YOU HAD ASKED FOR CERTAIN INFORMATION. IN THIS CONNECTI ON WE ARE TO SUBMIT AS UNDER: THE AGREEMENT TO SELL DATED 18.6.2003 IN ORIGINAL W AS RETURNED TO THE OTHER PARTY AFTER THE SECOND REGISTRATION DE ED WAS EXECUTED. THE ASSESSEE HAD HOWEVER RETAINED A COPY OF THE AGREEMENT TO SELL, A COPY OF WHICH HAS BEEN FILED O N PAGE NO. 21 & 22 OF THE SUBMISSION DATED 22.7.2013. THE REVERSE OF THE AGREEMENT HOWEVER WAS NOT PHOTOCOPIES WHILE FILING IT WITH THE ABOVE SUBMISSION. WE ARE NOW ENCLOSING A COMPLETE PHOTOCOPY OF THE AGREEMENT INCLUDING THE REVERSE OF THE PAGE AT PAGE NO. 1 & 2 WHERE THE NAME OF THE STAMP VENDOR AND ALSO THE SERIAL NUMBER AT WHICH THE TRANSACTION WAS RECO RDED BY THE STAMP VENDOR IN HIS REGISTER IS MENTIONED. THE DOCU MENT WAS NOT REGISTERED WITH REVENUE AUTHORITIES. 2. THE PAPER FOR THE AGREEMENT TO SELL WAS PURCHASE D ON 17.6.2003 AND THIS DATE IS MENTIONED ON THE REVERSE OF THE DOCUMENT ENCLOSED AT PAGES NO. 1 & 2 ABOVE. AS PER THE AGREEMENT THE LAND WAS TO BE PURCHASED BY SIX BUYERS FOR RS.14,62,500 AS PER THE AGREEMENT ITSELF , A SUM OF RS.51,000 WAS GIVEN TO THE SELLERS IMMEDIATELY. SUB SEQUENTLY, FOR THE LAND MEASURING 4 K-10M [ASSESSEE HAVING 1/ 4 TH SHARE] THE PAYMENT OF RS.182,812 WAS MADE ON 7/5/2004 THRO UGH BANK DRAFT [MENTIONED IN THE PURCHASE DEED PLEASE SEE PAGE NO. 19 OF THE SUBMISSION DATED 23.7.2003] AND THE REGISTRA TION DEED WAS EXECUTED ON 17.5.2004. COPY OF THE RELEVANT PAG ES OF THE REGISTRATION DEED WITH COPY OF THE REVERSE IS ENCLO SED AT PAGE ITA NO.13(ASR)/2014 3 NO.3. FOR THE LAND MEASURING 4K 9M [ASSESSEE HAVING 1/6 TH SHARE ] THE PAYMENT OF RS.121,875 WAS MADE ON 26.10 .2004 THROUGH CHEQUES [MENTIONED IN THE PURCHASE DEED P LEASE SEE OAGE NO.11 OF THE SUBMISSION DATED 23.7.2013] AND T HE REGISTRATION DEED WAS EXECUTED ON 26.10.2004. COPY OF THE RELEVANT PAGE OF THE REGISTRATION DEED WITH COPY OF THE REVERSE IS ENCLOSED AT PAGE NO.4. THE PAYMENT OF RS.51,000 LYING WITH THE SELLERS WAS RETURNED AT THE TIME OF THE EXECUTI ON OF THE SECOND REGISTRATION DEED. [RS.182,812 X 4 + RS.121, 875 X 6 = RS.14,62,500]. ALSO COPY OF THE BANK STATEMENT IN S UPPORT OF THE PAYMENT MADE BY THIS ASSESSEE IS ENCLOSED AT PAGE N O.4. AS SUBMITTED EARLIER, THE OWNERSHIP OF THE LAND WO ULD COMMENCE ON THE BASIS OF THE AGREEMENT TO PURCHASE THE ENTIRE LAND AND THE EFFECTIVE DATE WOULD BE THE DATE WHEN THE PURCHASE DEED DATED 17.5.2004 WAS EXECUTED AND THE POSSESSION OF THE ENTIRE LAND WAS HANDED OVER. RELI ANCE IS ALSO PLACED ON THE DECISION OF THE KERALA HIGH COURT IN THE CASE OF RAJAGIRI RUBBER & PRODUCE CO. LTD. VS. CIT REPORTED AT 203 ITR 663 WHEREIN THE VIEW THAT THE OWNERSHIP IS REL ATED TO THE DATE OF POSSESSION WAS AFFIRMED. COPY OF THE DECISI ON IS ENCLOSED AT PAGE NO. 6 & 7. 3. THE ORIGINAL SALE DEEDS REGISTERED DURING THE YE AR UNDER ASSESSMENT ARE WITH THE PURCHASERS. THE ACTION OF THE AO IS THUS NOT JUSTIFIED AND TH E SALE TRANSACTIONS OF LAND HAVE TO BE TREATED AS LONG TER M AND CONSEQUENTIAL BENEFIT U/S 54EC SHOULD BE ALLOWED. 3. THE LD. CIT(A) HELD AS FOLLOWS: 5.4. I HAVE CONSIDERED THE OBSERVATIONS OF THE AO AS MADE IN THE ASSESSMENT ORDER AS WELL AS THE WRITTEN SUBMISS IONS OF THE ASSESSEE COMPANY MADE VIDE LETTERS DATED 22.07.2013 & 23.10.2013, I HAVE ALSO CONSIDERED THE JUDICIAL PRO NOUNCEMENT RELIED UPON BY THE ASSESSEE AS WELL AS OTHER MATERI AL BROUGHT ON RECORD. ITA NO.13(ASR)/2014 4 5.5. ON PERUSAL OF VARIOUS DOCUMENTS BROUGHT ON REC ORD, IT HAS BEEN NOTICED THAT AN AGREEMENT TO SELL WAS ENTE RED INTO BETWEEN THE SELLERS AND ASSESSEE ALONG WITH OTHERS ON 18.06.2003 IN RESPECT OF A PROPERTY MEASURING 8 K 1 9 M. AS PER THE TERMS AND CONDITIONS OF THE AGREEMENT TO SELL D ATED 18.06.2013, THE VACANT POSSESSION OF WHOLE OF THE P ROPERTY WILL BE HANDED OVER BY THE SELLERS TO THE ASSESSEE ALONG WITH OTHERS IF THE ASSESSEE & OTHERS (PURCHASERS) WILL GET SALE DEED EXECUTED IN RESPECT OF AT LEAST HALF OF THE PROPERT Y UNDER CONSIDERATION ON OR BEFORE 25.05.2004. THE FIRST SA LE DEED WAS GOT EXECUTED BY THE PURCHASERS INCLUDING THE ASSESS EE EACH HAVING 1/4 TH SHARE ON 6.5.2004 IN RESPECT OF THE PART OF PROPER TY MEASURING 4 K 10 M. AS PER THE AGREEMENT, THE LAND WAS ON LEASE AT THE TIME OF EXECUTION OF AGREEMENT TO SELL DATED 18.6.2003 AND IT WAS TO BE GOT VACATED AND HANDED OVER TO THE PURCHASERS IF THE CONDITIONS AS LAID DOWN IN THE AG REEMENT ARE FULFILLED. IN REALITY NO ONE CAN SAY WITH SURETY TH AT AS TO WHETHER THE VACANT POSSESSION OF WHOLE OF THE PROPERTY WAS GIVEN TO THE ASSESSEE ALONG WITH OTHERS ON 6.5.2004 OR NOT. THE ASSESSEE CLAIMS THAT THE POSSESSION OF WHOLE OF THE PROPERTY WAS TAKEN ON 6.5.2004 AS PER THE TERMS AND CONDITIONS OF THE AGREEMENT. THE SALE DEED IN RESPECT OF THE BALANCE PROPERTY ME ASURING 4 K 9 M WAS ALSO GOT EXECUTED ON 25.10.2004 BY THE ASSE SSEE ALONG WITH OTHER CO-PURCHASERS EACH HAVING 1/4 TH SHARE. ON CAREFUL CONSIDERATION OF THE CONTENTS OF THE SALE DEED DATE D 25.10.2004, IT HAS BEEN NOTICED THAT VACANT POSSESSION OF THE B ALANCE PROPERTY MEASURING 4 K 9 M WAS GIVEN ONLY ON 25.10 .2004 AS IT HAS CLEARLY BEEN MENTIONED IN THE SALE DEED ON P AG 2. IT HAS BEEN CLEARLY MENTIONED IN THE SALE DEED ON PAGE 2 T HAT THE VACANT POSSESSION OF PROPERTY MEASURING 4 K 9 M HAS BEEN GIVEN TODAY I.E. ON 25.10.2004 TO THE PURCHASER. IN THESE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE VERSION O F THE ASSESSEE THAT POSSESSION OF WHOLE OF THE PROPERTY WAS TAKEN ON 6.5.2004 IS INCORRECT IN VIEW OF THE ABOVE NOTED FACTS. IT M EANS, IT HAS TO BE ADMITTED THAT THE VACANT POSSESSION OF THE PROPE RTY MEASURING 4 KANAL 9 MARLA WAS HANDED OVER TO THE AS SESSEE AND OTHERS ONLY ON 25.10.2004 AND NOT ON 06.05.2004 . 5.6. IN THESE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, I AM OF THE OPINION THAT THE AO IS JUSTIFIED IN TAKING T HE GAIN ON THE ITA NO.13(ASR)/2014 5 SALE OF PROPERTY WHICH WAS PURCHASED ON 25.10.2004 AS SHORT TERM CAPITAL GAIN. THUS, THE ADDITION OF RS.13,78, 316/- MADE BY THE AO ON ACCOUNT OF SHORT TERM CAPITAL GAIN IS JUSTIFIED AND IS, THEREFORE, CONFIRMED. IN THE RESULT, GROUNDS OF APPEAL NO. 1 & 1(A) TAKEN BY THE ASSESSEE ARE, THEREFORE, DISMIS SED. 4. IT WAS ON THE BASIS OF THE ABOVE OBSERVATION THA T THE LD. CIT(A) CONFIRMED THE ADDITION MADE BY THE AO. 5. BEFORE US, THE ASSESSEE HAS FILED AN APPLICATION FOR ADDITIONAL EVIDENCE, SEEKING TO PRODUCE AN AFFIDAVIT OF THE S ELLER OF THE AGRICULTURAL LAND PURCHASED BY THE ASSESSEE. IT HAS BEEN CONTEND ED IN THE APPLICATION THAT THE LD. CIT(A) WRONGLY DECIDED AGAINST THE ASSESS EE ON A SPECIOUS OBSERVATION TO THE FACT THAT THERE WAS NO SURETY AS TO WHETHER THE POSSESSION OF THE WHOLE OF THE PROPERTY WAS GIVEN TO THE ASSES SEE ON 17.05.2004. THE ASSESSEES GRIEVANCE IS THAT IF THE LD. CIT(A) NU RTURED THIS DOUBT, THE ASSESSEE SHOULD HAVE BEEN CONFRONTED WITH THE SAME DURING THE APPEAL PROCEEDINGS AND THE ASSESSEE SHOULD HAVE BEEN ASKED FOR AN EXPLANATION. IT IS CONTENDED THAT SANS SUCH AN OPPORTUNITY, THERE WAS NO OCCASION FOR THE ASSESSEE TO PRODUCE THE AFFIDAVIT OF THE SELLER AT ANY STAGE. IT HAS, THEREFORE, BEEN REQUESTED THAT THE ADDITIONAL EVIDENCE MAY BE ALLOWED TO BE PLACED ON RECORD. ITA NO.13(ASR)/2014 6 6. PER CONTRA, LD. DR CONTENDED THAT IT WAS THE DUT Y OF THE ASSESSEE TO PLACE ALL DOCUMENTARY EVIDENCE IN HER FAVOUR BEFORE THE AO IN THE ASSESSMENT PROCEEDINGS. 7. WE HAVE HEARD THE PARTIES IN THE LIGHT OF THE M ATERIAL PLACED ON RECORD. A PERUSAL OF THE IMPUGNED ORDER, AS ABOVE, MAKES IT EVIDENT THAT IT IS ONLY IN THE ORDER THAT THE LD. CIT(A) HAS EXPRESSE D HIS DOUBT CONCERNING THE DATE OF HANDING OVER OF THE POSSESSION OF THE LAND PURCHASED BY THE ASSESSEE. SINCE THIS DOUBT WAS NOT PUT TO THE ASSES SEE BEFORE PASSING OF THE ORDER, THE ASSESSEE WAS DENIED OPPORTUNITY TO OFFER HER EXPLANATION BY SUPPORTING IT WITH THE AFFIDAVIT NOW SOUGHT TO BE F ILED AS ADDITIONAL EVIDENCE. IT IS TRITE LAW THAT NO ONE CAN BE CONDEM NED UNHEARD. DUE OPPORTUNITY OF HEARING IS THE VERY BASIS OF THE PRI NCIPLE OF AUDI ALTEREAM PARTEM, WHICH IS THE FOUNDATION OF ADMINISTRATION OF NATURAL JUSTICE. 8. IN VIEW OF THE ABOVE, WE ACCEPT THE APPLICATION FOR ADDITIONAL EVIDENCE FILED BY THE ASSESSEE AND REMIT THE MATTER TO THE FILE OF THE AO TO BE DECIDED AFRESH IN ACCORDANCE WITH LAW, ON TAKING INTO CONSIDERATION THE AFFIDAVIT FILED BY THE ASSESSEE OF THE ADDITIONAL E VIDENCE. THE ASSESSEE SHALL BE AFFORDED ADEQUATE OPPORTUNITY OF HEARING TO HER CASE AND SHE WILL, NO DOUBT, CO-OPERATE WITH THE AO IN THE REMAND PROCEED INGS. ITA NO.13(ASR)/2014 7 9. IN THE RESULT, FOR STATISTICAL PURPOSES, THE APP EAL OF THE ASSESSEE IS TREATED AS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 26TH FEBRUARY, 2015. SD/- SD/- (B.P. JAIN) (A.D.JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 26TH FEBRUARY, 2015 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:MS. SEEMA JAGOTA, CIVIL LINES, JALANDH AR. 2. THE DCIT, CIR. III, JALANDHAR. 3. THE CIT(A), JALANDHAR. 4. THE CIT, JALANDHAR 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER