Sri Syed Meeraj Ahmed, Rep. By its GPA Sri. M.A. Mannan Khan, Hyderabad V. I.T. O. Ward 5(3), Hyderabad

ITA 1327/HYD/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74513 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 4 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-01-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 03-09-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Capital asset
• Section: 142(1); 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO. ASST. YEAR . APPELLANT RESPONDENT 1309/HYD/12 1999 - 00 SRI ZIAUDDIN AHMED, REP.BY ITS GPA SRI M.A.MANNAN KHAN, HYD. PAN:ADFPK0456L ITO, WARD - 5(3), HYDERABAD. 1310/HYD/12 2000 - 01 - DO - - DO - 1311/HYD/12 2001 - 12 - DO - - DO - 1312/HYD/12 2002 - 03 - DO - - DO - 1313/HYD/12 2003 - 04 - DO - - DO - 1314/HYD/12 1999 - 00 SRI SYED MEERAJAHMED, REP. BY ITS GPA SRI M.A. MANNAN KHAN,HYDERABAD. S-701/5(3)/HYD. - DO 1315/HYD/12 1999 - 00 SMT. RUHINA AHMED, REP. BY ITS GPA SRI MAMANNAN KHAN, HYDERABAD. PAN:ADFPK0456L - DO - 1316/HYD/12 2000 - 01 - DO - DO - 1317/HYD/12 2001 - 02 - DO - DO - 1318/HYD/12 2002 - 03 - DO - - DO - 1319/HYD/12 1999 - 00 SMT. NAYEEMUNNISA BEGUM, REP. BY ITS GPA SRI MAMANNAN KHAN, HYDERABAD. PAN:ADFPK0456L - DO - 1320/HYD/12 2000 - 01 - DO - - DO - 1321/HYD/12 2001 - 02 - DO - - DO - 1322/HYD/12 2002 - 03 - DO - - DO - 1323/HYD/12 2004 - 05 - DO - - DO - 1324/HYD/12 2000 - 01 SRI SYED MEERAJ AHMED, REP. BY ITS GPA SRI MAMANNAN KHAN, HYDERABAD. PAN:ADFPK0456L - DO - 2 ITA NO.1309 AND OTHERS OF 2012 SRI ZIAUDDIN AHMED AND OTHERS,HYDERABAD. . 1325/HYD/12 2001 - 02 - DO - - DO - 1326/HYD/12 2002 - 03 - DO - - DO - 1327/HYD/12 2004 - 05 - DO - - DO APPELLANT S BY SHRI A.V.RAGHU RAM RESPONDENT BY SHRI SOLGY JOSE KOTTARAM (DR) DATE OF HEARING 24 - 10 - 201 3 . DATE OF PRONOUNCEMENT 17 - 0 1 - 2014 ORDER PER SAKTIJIT DEY, J.M: THESE ARE BUNCH OF 19 APPEALS BY DIFFERENT ASSESS EES AGAINST SEPARATE ORDERS OF CIT (A). SINCE FACTS ARE IDENTIC AL, ISSUES ARE COMMON AND ASSESSEES BELONG TO ONE GROUP, ALL THE A PPEALS ARE CLUBBED TOGETHER, HEARD AND DISPOSED OF IN A COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. ALL THE APPEALS HAVE BEEN FILED ON THE FOLLOWING COMMON GROUNDS:- 1. THE ORDER OF THE CIT (A) IS NOT ONLY PERVERSE B UT IS ERRONEOUS BOTH ON FACTS AND IN LAW. 2. THE CIT (A) KNOWING FULLY WELL THAT THE TRIBUNAL HAS HELD THAT IN THE EARLIER CIT (A) ORDER THE ISSU E OF YEAR OF TAXABILITY IS NOT DECIDED, ERRED IN STAT ING THAT SUBMISSIONS ON THIS ISSUE WERE CONSIDERED IN THE EARLIER ORDER AD CONCLUDING THAT CAPITAL GAINS AROSE IN EACH YEAR IN WHICH THERE IS A TRANSFER OF A 3 ITA NO.1309 AND OTHERS OF 2012 SRI ZIAUDDIN AHMED AND OTHERS,HYDERABAD. . PORTION OF THE LAND WITHOUT CONSIDERING THE PRESENT SUBMISSIONS. 3. THE CIT (A) FAILED TO APPRECIATE THE FACT THAT CAPITAL GAINS IN RESPECT OF AN IMMOVABLE PROPERTY WILL ARISE AS PER SEC. 2(47) ONLY IN THE YEAR N WHI CH POSSESSION IS GIVEN AND FURTHER FACT THAT POSSESSION AND TRANSFER TOOK PLACE AS EARLIER AS 1963 AND THEREBY ERRED IN CONCLUDING THAT IT AROSE IN EACH YEAR IN WHICH THERE IS A TRANSFER THOUGH SUCH A TRANSFER IS NOT THERE. 4. THE CIT (A) ERRED IN NOT CONSIDERING THE DECISIO N OF THE JURISDICTIONAL HIGH COURT THAT IS RELIED UPON T O HOLD THAT NO CAPITAL GAINS ARISES WHEN THE DECREE HAS NOT BECOME FINAL AND THEREBY ERRED IN HOLDING THAT CAPITAL GAINS ARISES IN EACH YEAR IN WHICH A PORTION OF LAND IS TRANSFERRED. 5. ANY OTHER GROUND THAT MAY BE URGED AT THE TIME O F HEARING. 3. BRIEFLY THE FACTS AS TAKEN FROM APPEAL FOLDER IN ITANO.1314/HYD/12 ARE, THE ASSESSEE AN INDIVIDUAL I S ONE OF 13 CO- OWNERS OF THE PROPERTY SITUATED AT MIYAPUR, SERILIN GAMPALLY MANDAL, RANGA REDDY DISTRICT. AS PER THE INFORMATION GATHER ED DURING THE SCRUTINY ASSESSMENT PROCEEDING ONE OF THE CO-OWNERS M.A. BASITH KHAN, THE ASSESSING OFFICER FOUND THAT DURING THE F INANCIAL YEARS RELEVANT TO ASSESSMENT YEARS 1999-2000 TO ASST. YEA R 2002-03, THE ASSESSEE RECEIVED CAPITAL GAINS ON RELINQUISHMENT O F RIGHTS IN THE SHARE OF A PROPERTY SITUATED AT MIYAPUR, HYDERABAD. ACCORDINGLY, THE ASSESSING OFFICER ISSUED A NOTICE U/S 148 OF TH E ACT TO ASSESSEE. 4 ITA NO.1309 AND OTHERS OF 2012 SRI ZIAUDDIN AHMED AND OTHERS,HYDERABAD. . SINCE THERE WAS NO COMPLIANCE TO THE NOTICE ISSUED U/S 148, THE ASSESSING OFFICER ISSUED A NOTICE U/S 142(1) ALONG WITH A SHOW CAUSE NOTICE AS TO WHY ASSESSMENT WILL NOT BE COMPL ETED EX PARTE U/S 144 OF THE ACT. SINCE, STILL THERE WAS NO COM PLIANCE FROM THE ASSESSEE, THE ASSESSING OFFICER PROCEEDED TO COMPLE TE ASSESSMENT ON THE BASIS OF INFORMATION AVAILABLE ON RECORD. A S NARRATED BY THE ASSESSING OFFICER IN ASSESSMENT ORDER, THE PROPERTY AT MIYAPUR MEASURING 136 ACRES ORIGINALLY BELONGED TO LATE ABD UL BASITH KHAN THE ASSESSEES GRAND FATHER. LATE ABDUL BASITH KHA N HAD TWO SONS AND THREE DAUGHTERS. AFTER THE DEATH OF ABDUL BASI TH KHAN, IN THE YEAR 1947, HIS ELDEST SON ABDUL BAQUER KHAN SOLD TH E ENTIRE PROPERTY TO SRI RAM GNANESHWAR AND FOUR OTHERS IN THE YEAR 1963, WHO IN TURN SOLD THE SAID PROPERTY TO M/S MATRUSRI CO-OPERATIVE HOUSING SOCIETY IN THE YEAR 1979. THE SAID SOCIETY ALLOTTED THE LAND TO ITS MEMBERS. IN THE MEANWHILE THE SECOND SON OF LATE ABDUL BASITH KHAN ALONG WITH HIS THREE SISTERS FILED SU IT FOR PARTITION OF SHARE IN THE JOINT FAMILY PROPERTY. THE 1 ST ADDL. DISTRICT JUDGE, RANGA REDDY PASSED A PRELIMINARY DECREE ON 29-12-20 00 IN O.S. NO.38 OF 1993 CONFIRMING THE SHARES OF THE ASSESSEE ALONG WITH 13 OTHERS TO THE EXTENT OF 12/28 IN THE LAND AT MIYAPU R WHICH CONSTITUTES 42% OF THE JOINT PROPERTY. 4. TO SETTLE THE DISPUTE WITH THE MEMBERS OF MATRUS HRI CO-OP. HOUSE BUILDING CO-OP. SOCIETY AND TO DISPOSE OF TH EIR SHARE OF RIGHTS IN THE PROPERTY, THE ASSESSEE ALONG WITH OTH ER CO-OWNERS APPROACHED M/S SRI VENKATESHWARA BUILDERS, KUKATPAL LY, HYDERABAD WHO OFFERED TO MEDIATE BETWEEN THE TWO PARTIES. AC CORDINGLY, AN AGREEMENT OF SALE WAS EXECUTED ON 9-12-1997 BY THE ASSESSEE AND OTHER CO-OWNERS WITH SRI VENKATESHWARA BUILDERS TO SETTLE THE 5 ITA NO.1309 AND OTHERS OF 2012 SRI ZIAUDDIN AHMED AND OTHERS,HYDERABAD. . DISPUTE BY SELLING THEIR RIGHT IN SHARE OF THE PROP ERTY FOR AN AGREED CONSIDERATION OF RS.2.72 CRORES. IN COURSE OF THE ASSESSMENT PROCEEDING SRI M.V. KRISHNA REDDY, M.D. OF SREE VEN KATESWARA REDDY WAS EXAMINED. IN HIS DEPOSITION, HE STATED T HAT SREE VENKATESWARA BUILDERS HAD ONLY MEDIATED BETWEEN SRI M.A. BASITH KHAN AND OTHER CO-OWNERS AND THE PLOT OWNERS OF MA TRUSRI CO-OP HOUSING SOCIETY FOR SETTLEMENT OF DISPUTE OVER THE TITLE OF LAND. HE FURTHER STATED THAT THEY HAD COLLECTED THE AMOUNT A S PER SETTLEMENT FROM THE PLOT OWNERS AND PASSED ON THE SAME TO M.A. BASITH KHAN AND OTHERS FOR SETTLEMENT OF THE DISPUTES. HE ALSO STATED THAT ONCE THE ENTIRE AGREED AMOUNT WAS PAID BY THE PLOT OWNER S, MOU WAS SIGNED BY M.A. BASITH KHAN AND OTHERS IN FAVOUR OF THE PLOT OWNERS RELINQUISHING THEIR SHARE OF RIGHT OVER THE RESPECT IVE PLOTS. FROM THESE FACTS THE ASSESSING OFFICER CONCLUDED THAT AS M.A. BASITH KHAN AND OTHERS HAVE RELINQUISHED THEIR RIGHTS OVER EACH PLOT SEPARATELY BY SIGNING A MOU AFTER THE ENTIRE AGREED CONSIDERAT ION IS RECEIVED BY THEM FROM THE PLOT OWNERS, THERE IS A TRANSFER W ITHIN THE MEANING OF SEC. 53A OF THE T.P. ACT. THE ASSESSIN G OFFICER TOOK THE DATE OF SIGNING OF MOU AS THE BASIS FOR CALCULATION OF CAPITAL GAINS. FROM THE LIST OF PAYMENTS FURNISHED BY SREE VENKATE SWARA BUILDERS THE ASSESSING OFFICER NOTICED THAT SOME PAYMENTS HA VE BEEN MADE TO PERSONS OTHER THAN THE ACTUAL OWNERS OF THE PROP ERTY. ON QUERY MADE BY THE ASSESSING OFFICER SRI M.A. BASITH KHAN CLARIFIED IN HIS DEPOSITION THAT THOSE PERSONS DID NOT HAVE ANY SHAR E OR INTEREST IN THE PROPERTY AT MIYAPUR. ONLY ON THE INSTRUCTIONS OF SRI M.A. BASITH KHAN AND OTHER CO-OWNERS, SREE VENKATESWARA BUILDER S ISSUED CHEQUES TO THOSE PERSONS. HOWEVER, THOSE PERSONS H AVE HANDED OVER THE ENTIRE AMOUNTS IN CASH TO THE ACTUAL OWNER S AFTER 6 ITA NO.1309 AND OTHERS OF 2012 SRI ZIAUDDIN AHMED AND OTHERS,HYDERABAD. . ENCASHMENT OF THE CHEQUES. THIS FACT WAS ALSO CORR OBORATED BY SOME OF THOSE PERSONS EXAMINED BY THE ASSESSING OFF ICER. ON THE BASIS OF THE AFORESAID FACTS THE ASSESSING OFFICER PROCEEDED TO COMPUTE CAPITAL GAINS AT THE HANDS OF ALL CO-OWNER S FOR VARIOUS ASSESSMENT YEARS COMMENCING FROM ASSESSMENT YEAR 19 99-2000. 5. THE ASSESSEE CHALLENGED THE ASSESSMENT ORDER BY WAY OF AN APPEAL BEFORE THE CIT (A). THE CIT (A) HAVING CONF IRMED THE ASSESSMENT ORDER, THE ASSESSEE CARRIED AN APPEAL TO THE INCOME-TAX APPELLATE TRIBUNAL. THE INCOME-TAX APPELLATE TRIBUN AL REJECTED ALL THE CONTENTIONS OF THE ASSESSEE SAVE AND EXCEPT THE CONTENTION RAISED IN THE ADDITIONAL GROUND WITH REGARD TO YEAR OF ASSESSABILITY OF CAPITAL GAINS. THE I.T.A.T REMITTED THE MATTER BACK TO THE CIT (A) ONLY ON THE LIMITED ISSUE OF DECIDING THE YEAR OF TAXABILITY OF CAPITAL GAIN. 6. IN PURSUANCE TO THE DIRECTION OF THE INCOME-TAX APPELLATE TRIBUNAL, THE CIT (A) CONSIDERED THE ISSUE AFRESH. IN COURSE OF PROCEEDING BEFORE THE CIT (A), THE ASSESSEE SUBMITT ED THAT THE CAPITAL GAINS WHICH HAVE BEEN BROUGHT TO TAX RELATE TO AMOUNTS RECEIVED BY THE ASSESSEE AS PER AGREEMENT OF SALE D ATED 9-12-1997 WITH SRI VENKATESWARA BUILDERS WHICH IN TURN ENTERE D INTO AN MOU WITH THE PLOT OWNERS OF MATRUSRI CO-OPERATIVE HOUSI NG SOCIETY. THESE DOCUMENTS REVEAL THAT ACTUAL SALE TO MATRUSRI HOUSING SOCIETY TOOK PLACE QUITE LONG TIME BACK AND THE SAID SOCIET Y IN TURN HAS SOLD THE PLOT TO VARIOUS PERSONS. IT WAS SUBMITTED THAT THE AGREEMENT BETWEEN THE ASSESSEE AND SRI VENKATESWARA BUILDERS IS ONLY DUE TO A DECREE GRANTED BY COURT HOLDING THE ASSESSEE AND OTHER CO-OWNERS TO BE THE RIGHTFUL OWNERS OF 42% SHARES IN THE SUBJ ECT LAND. 7 ITA NO.1309 AND OTHERS OF 2012 SRI ZIAUDDIN AHMED AND OTHERS,HYDERABAD. . HOWEVER, SUCH DECREE HAS NOT BECOME FINAL AS THE LI TIGATION IS PENDING BEFORE THE HONBLE HIGH COURT AND THE HONB LE HIGH COURT HAS SUSPENDED THE DECREE IN THE APPEAL FILED BY CO MMERCIAL & INDUSTRIAL FINANCE PVT. LIMITED. IT WAS FURTHER CO NTENDED THAT ABDUL BAQUER KHAN HAD SOLD THE PROPERTY TO THE SOCIETY IN 1963 AND HANDED OVER THE POSSESSION. THE SOCIETY IN TURN PL OTTED AND SOLD THE LAND TO VARIOUS PERSONS. HENCE, THE POSSESSION OF THE PROPERTY IS WITH THE MEMBERS OF SOCIETY. THESE MEMBERS FOR AVOIDING LITIGATION HAVE COME FORWARD BY ENTERING MOU WITH SRI VENKATESWARA BUILDERS AND THE ASSESSEE MAKING PAYME NTS TOWARDS THEIR SHARE IN THE PROPERTY. IN THIS CONTEXT, IT W AS SUBMITTED THAT SALE OF THE LAND HAS ALREADY TAKEN PLACE LONG TIME BACK WHICH IS NOW RATIFIED IN VIEW OF SUBSEQUENT LITIGATION. HENCE, T HERE CANNOT BE ANY SALE NOW. THE ASSESSEE SUBMITTED THAT WHEN THE DECR EE IS NOT IMPLEMENTED AND THE ASSESSEE HAS NOT GOT BACK POSSE SSION OF LAND TO THE EXTENT OF THEIR SHARE, IT CANNOT BE SAID THA T ANY TRANSFER WAS EFFECTED IN TERMS OF SEC. 2(47) BY THE ASSESSEE AS THERE IS NO DELIVERY OF POSSESSION OF THE PROPERTY BY THE ASSES SEE. 7. THE CIT (A) HOWEVER DID NOT ACCEPT THE CONTENTIO NS OF THE ASSESSEE AND DECIDED THE ISSUE AGAINST HIM BY HOLDI NG AS UNDER:- 6.1 FROM THE FACTS, I FIND THAT THE ENTIRE RIGHT I N THE PROPERTY WAS NOT TRANSFERRED BY THE APPELLANT IN ON E GO. RATHER THE TRANSFER WAS AFFECTED IN VARIOUS PARTS W HERE RIGHT OVER A PARTICULAR AREA WAS TRANSFERRED IN 1999-2000 ; THE RIGHT OVER ANOTHER AREA WAS TRANSFERRED IN 2000-01 AND SO ON. DURING APPEAL PROCEEDINGS, I ENQUIRED OF THE LEARNE D AR WHETHER THIS TRANSFER OR RIGHT OVER PORTIONS OF AND WAS CORRECT. THE LEARNED AR CONFIRMED THAT THE ASSESSI NG OFFICER 8 ITA NO.1309 AND OTHERS OF 2012 SRI ZIAUDDIN AHMED AND OTHERS,HYDERABAD. . WAS RIGHT BECAUSE THE ENTIRE TRANSFER DID NOT TAKE PLACE IN ONE SINGLE YEAR. 6.2. THE CHART REGARDING TRANSFER AS MADE BY THE AS SESSING OFFICER I.E., STATEMENT SHOWING WORKING OUT OF THE LONG TERM CAPITAL GAINS AND THE TAXABLE LONG TERM CAPITAL GAI NS IN THE HANDS OF THE CO-OWNERS IN PARA 6.2 OF THE CIT (A) S ORDER. 6.3 FROM THE CHART AS EXTRACTED IN PARA 6.2 OF THE CIT (A)S ORDER, IT IS CLEAR THAT IN THE CASE OF THE APPELLAN T THE RIGHT OVER A CERTAIN AREA OF PROPERTY WAS RELINQUISHED AN D SOLD IN EACH OF THE ASSESSMENT YEARS GIVEN IN THE CHART. T HEREFORE, THE CAPITAL GAINS IS ALSO TO BE BROUGHT TO TAX IN T HE RELEVANT ASSESSMENT YEARS WHERE THE TRANSFER TOOK PLACE. IN THE CASE OF THE APPELLANT, THE TRANSFERS TOOK PLACE FROM A.Y 1999-2000 TO A.Y 2004-05. THEREFORE, I HOLD THAT THE ASSESSI NG OFFICER IS CORRECT IN BRINGING TO TAX THE RELEVANT CAPITAL GAINS IN EACH OF THE AFOREMENTIONED ASSESSMENT YEARS. I, THEREFOR E, UPHOLD THE ACTION OF THE ASSESSING OFFICER AND ALSO HOLD T HAT SEPARATE CAPITAL GAINS AROSE TO THE APPELLANT IN TH E ASSESSMENT YEARS AS GIVEN ABOVE AND SEPARATE ASSESS MENT FOR EACH YEAR HAS CORRECTLY FRAMED. THE ISSUE OF YE ARS OF TAXABILITY OF CAPITAL GAINS IS ACCORDINGLY DECIDED IN FAVOUR OF THE REVENUE. 8. THE LEARNED AR MOSTLY REITERATED THE CONTENTIONS RAISED BEFORE THE CIT (A). HE SUBMITTED THAT THE ELDEST SON OF O RIGINAL OWNER LATE ABDUL BASITH KHAN HAD TRANSFERRED THE PROPERTY IN T HE YEAR 1963 WHICH WAS SUBSEQUENTLY SOLD AGAIN TO MATRUSHRI CO-O PERATIVE SOCIETY IN THE YEAR 1979. HENCE THE ASSESSEE NEITH ER HAD ANY RIGHT OR POSSESSION OVER THE PROPERTY. ASSESSEE ALONG WI TH OTHER CO- 9 ITA NO.1309 AND OTHERS OF 2012 SRI ZIAUDDIN AHMED AND OTHERS,HYDERABAD. . OWNERS FILED A SUIT IN 1992. THE COURT PASSED THE PRELIMINARY DECREE ON 29-12-2000 WHICH WAS SUSPENDED BY THE HON BLE HIGH COURT ONLY AFTER FOUR MONTHS. THUS, IN REAL TERMS THE ASSESSEE ENJOYED SOME KIND OF RIGHTS OVER THE PROPERTY FOR A BRIEF PERIOD OF FOUR MONTHS TILL THE DECREE WAS SUSPENDED BY THE HO NBLE HIGH COURT. THEREFORE, SINCE THE ASSESSEE HAD NEITHER A NY RIGHT NOR POSSESSION OVER THE PROPERTY THERE CANNOT BE A TRAN SFER IN TERMS OF SECTION 2(47) OF THE ACT. IT WAS SUBMITTED THAT SEC . 52 OF T.P. ACT PROHIBITS TRANSFER OF PROPERTY DURING PENDENCY OF A NY LITIGATION. REFERRING TO THE AGREEMENT OF SALE DATED 9-12-1997 AT PAGE-15 AND THE MOU AT PAGE 22 OF PAPER BOOK THE LEARNED AR CON TENDED THAT IF AT ALL THERE IS ANY TRANSFER THEN IT IS IN PURSUANC E TO THE AGREEMENT OF SALE. THE MOU IS ONLY IN COMPLIANCE TO THE AGREE MENT OF SALE FOR COMPLETING THE FORMALITIES. THEREFORE, CAPITAL GAI N CANNOT BE TAXED IN IMPUGNED ASSESSMENT YEAR. 9. THE LEARNED DR, ON THE OTHER HAND, SUBMITTED THA T THE FACT THAT THERE IS TAXABLE CAPITAL GAIN, HAS BECOME FINA L BY VIRTUE OF THE ORDER PASSED BY THE TRIBUNAL EARLIER. THE ONLY ISS UE WHICH REMAINS IS YEAR OF TAXABILITY. IT WAS SUBMITTED THAT SINCE TRANSFER HAS TAKEN PLACE ON SIGNING OF MOU AND RECEIPT OF PAYMENTS THE CAPITAL GAIN HAS BEEN RIGHTLY TAXED IN THE ASSESSMENT YEAR UNDER CONSIDERATION. 10. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTI ES AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS OTHER MATERIALS ON RECORD. AS CAN BE SEEN FROM THE CONCL UDING PORTION OF PARAGRAPH -6 OF THE ORDER DATED 30-4-2010 PASSED BY TRIBUNAL, A COPY OF WHICH IS AT PAGE-80 OF THE PAPER BOOK, THE TRIBUNAL HAS REMITTED THE MATTER BACK TO THE CIT (A) ONLY FORTHE LIMITED PURPOSE 10 ITA NO.1309 AND OTHERS OF 2012 SRI ZIAUDDIN AHMED AND OTHERS,HYDERABAD. . OF DECIDING THE YEAR OF TAXABILITY OF CAPITAL GAI N. THE FACT THAT THERE IS A TRANSFER WHICH RESULTED IN CAPITAL GAIN HAS BECOME FINAL AFTER THE AFORESAID ORDER OF THE TRIBUNAL. THEREFO RE, THE ONLY ISSUE BEFORE US IS YEAR OF TAXABILITY. THE SUM AND SUBST ANCE OF ASSESSEES CONTENTION IS, THE PROPERTY WAS SOLD BY ABDUL BAQUE R KHAN IN THE YEAR 1963 TO RAM GNANESHWAR WHO SUBSEQUENTLY SOLD T O M/S MATRUSHRI CO-OPERATIVE SOCIETY IN THE YEAR 1979, TH EREFORE THE ASSESSEE NEITHER HAD ANY RIGHT NOR POSSESSION OVER THE PROPERTY. THOUGH THE ASSESSEE AND OTHER CO-OWNERS HAD FILED A CIVIL SUIT AND THE CIVIL COURT PASSED A DECREE IN THEIR FAVOUR BUT BY VIRTUE OF AN ORDER PASSED BY THE HONBLE HIGH COURT THE DECREE O F THE CIVIL COURT WAS SUSPENDED. IN THESE CIRCUMSTANCES, THERE CANNO T BE ANY TRANSFER IN THE IMPUGNED ASSESSMENT YEAR. WE ARE U NABLE TO ACCEPT THE CONTENTIONS OF THE ASSESSEE. FROM THE FACTS NA RRATED HEREINBEFORE IT IS CLEAR THAT THE PROPERTY IN QUES TION BELONGED TO THE ORIGINAL OWNER LATE ABDUL BASITH KHAN WHO DIE D IN THE YEAR 1947. THOUGH LATE ABDUL BASITH KHAN HAD FIVE CHILD REN BUT HIS ELDEST SON SOLD THE PROPERTY IN EXCLUSION OF OTHERS IN THE YEAR 1963. THEREFORE, THE REST OF THE CHILDREN OF LATE BASITH KHAN FILED A SUIT FOR PARTITION OF THE SAID PROPERTY IN THE CIVIL COURT. THE CIVIL COURT ON 29-12-2000 PASSED A PRELIMINARY DECREE IN FAVOUR OF THE ASSESSEE AND OTHER CO-OWNERS BY DECREEING THEIR RIGHT, TITLE AND INTEREST OVER 42% OF THE TOTAL EXTENT OF LAND AND ALSO DECIDED TH E EXTENT OF SHARE TO BE GIVEN TO EACH OF THE CO-OWNERS, THOUGH OF COU RSE THE HONBLE HIGH COURT GRANTED INTERIM STAY OF THE DECREE IN OR DER DATED 13/4/2001. HOWEVER, THE FACT THAT THE ASSESSEE AND OTHER CO- OWNERS ARE HAVING RIGHTS, TITLE AND INTEREST OVER T HE PROPERTY IS RECOGNISED. IT IS ALSO A FACT THAT BEFORE THE PASS ING OF DECREE BY 11 ITA NO.1309 AND OTHERS OF 2012 SRI ZIAUDDIN AHMED AND OTHERS,HYDERABAD. . THE CIVIL COURT THE ASSESSEE ALONG WITH OTHER CO-OW NERS ENTERED INTO NEGOTIATIONS WITH SRI VENKATESWARA BUILDERS AND OWN ERS OF PLOTS SOLD BY M/S MATRUSHRI CO-OPERATIVE SOCIETY FOR SETT LEMENT OF DISPUTE BY SELLING THEIR SHARE IN THE LAND. AN AGREEMENT O F SALE WAS ENTERED INTO BETWEEN THE ASSESSEE AND SRI VENKATESWARA BUIL DER FOR SALE OF THE RESPECTIVE SHARES FOR AN AGREED TOTAL SALE CONS IDERATION OF RS.2.72 CRORES. 11. A PERUSAL OF THE AGREEMENT OF SALE DATED 9-12 -1997 A COPY OF WHICH IS AT PAGE 3 OF PAPER BOOK, REVEALS THAT A TO KEN AMOUNT OF RS.10 LAKHS OUT OF THE AGREED SALE CONSIDERATION WA S PAID TO THE CO-OWNERS AT THE TIME OF EXECUTION OF AGREEMENT OF SALE. SUBSEQUENTLY, THE ASSESSEE AND OTHER CO-OWNERS ENTE RED INTO MOU WITH M/S SHREE VENKATESWARA BUILDERS AND INDIVIDUAL PURCHASERS OF PLOTS FROM M/S MATRUSHRI O-OPERATIVE SOCIETY RELIN QUISHING THEIR RIGHTS, TITLE AND INTEREST OVER THE PROPERTY IN FAV OUR OF THE INDIVIDUAL PLOT OWNERS. IT IS WORTHWHILE TO TAKE NOTE OF THE RELEVANT CLAUSE FROM THE MOU, A COPY OF WHICH IS AT PAGE 22 OF PAPE R BOOK, WHICH READS AS UNDER:- WHEREAS THE PARTY OF THE FIRST PART HAVING AN UNDER STANDING AND AN AGREEMENT OF SALE WITH THE PARTY OF THE SECO ND PART AND RECEIVED AN AMOUNT OF RS.16,666/- (RUPEES SIXTE EN THOUSAND SIX HUNDRED SIXTY SIX ONLY) THROUGH THE S ECOND PART TOWARDS THEIR AGREED SHARE OF CONSIDERATION ON ACCO UNT OF THE SAID PLOT NO.904 ADMEASURING 333.33 YARDS IN SY. NO .44/1 AND HEREBY WITHDRAWN RELINQUISH ALL THEIR RIGHTS AN D CLAIMS INTEREST TITLE OF WHAT SO EVER NATURE IN FAVOUR OF THE THIRD PART. BOTH THE FIRST AND SECOND PARTIES ASSURE TO THE THIRD 12 ITA NO.1309 AND OTHERS OF 2012 SRI ZIAUDDIN AHMED AND OTHERS,HYDERABAD. . PART THAT THEY WILL NOT RAISE ANY CLAIM OVER THE AB OVE SAID PLOT OF LAND IN FUTURE. 12. ON A PERUSAL OF THE AGREEMENT OF SALE AND MOU W OULD SHOW THAT EVEN BEFORE THE PRELIMINARY DECREE WAS PASSED THE ASSESSEE ALONG WITH OTHER CO-OWNERS HAVE NEGOTIATED FOR SALE OF THEIR SHARES AND PARTIES ALSO WENT AHEAD WITH THE DEAL BY EXECUT ING MOU ON PAYMENT OF AGREED SALE CONSIDERATION. THIS CLEARLY ESTABLISHES THE FACT THAT PARTIES TO THE MOU RECOGNISE ASSESSEE AND OTHER CO- OWNERS RIGHT, TITLE AND INTEREST OVER THE PROPERTY HENCE PAYMENTS OF RS.2.72 CRORES WAS MADE TO THE ASSESSEE AND CO-O WNERS FOR RELINQUISHING THEIR RIGHT, TITLE AND INTEREST OVER THEIR RESPECTIVE SHARES IN THE PROPERTY. SINCE THE RIGHT, TITLE AND INTEREST OVER THE PROPERTY IS A CAPITAL ASSET, THE RELINQUISHMENT OF SUCH RIGHT, TITLE AND INTEREST WILL AMOUNT TO TRANSFER AS PER SEC. 2( 47) (I) OF THE ACT. AS SUCH RELINQUISHMENT HAS TAKEN PLACE ON SIGNING O F MOU AFTER RECEIPT OF CONSIDERATION, THE YEAR OF TAXABILITY OF CAPITAL GAIN WOULD BE THE YEAR IN WHICH THE RESPECTIVE MOUS WERE EXECU TED. SO FAR AS THE CONTENTION OF THE ASSESSEE IS CONCERNED, THAT T HERE CANNOT BE ANY TRANSFER DURING PENDENCY OF LITIGATION IT IS TO BE NOTED THAT THE PROPERTY IN QUESTION WAS ALREADY SOLD IN THE YEAR 1 963. WHAT THE ASSESSEE AND OTHER CO-OWNERS HAVE TRANSFERRED IS NO T ONLY THEIR RIGHT, TITLE AND INTEREST BUT THEY HAVE ALSO GIVEN UP ALL THEIR CLAIM OVER THE PROPERTY. FURTHERMORE, THE ISSUE OF TRANS FER STANDS CONCLUDED IN THE ORDER DATED 30-4-2010 OF THE TRIBU NAL. THE ONLY ISSUE LEFT TO BE DECIDED WAS THE YEAR OF TAXABILITY . SINCE THE ASSESSEE HAS RELINQUISHED HIS RIGHT, TITLE AND INTE REST OF OVER THE PROPERTY BY ENTERING INTO THE MOU ON RECEIPT OF CON SIDERATION THE FINANCIAL YEAR IN WHICH THE MOU WAS EXECUTED WOULD BE THE YEAR OF 13 ITA NO.1309 AND OTHERS OF 2012 SRI ZIAUDDIN AHMED AND OTHERS,HYDERABAD. . TAXABILITY OF CAPITAL GAIN. IN THE AFORESAID VIEW OF THE MATTER WE UPHOLD THE ORDER OF THE CIT (A) AND DISMISS THE GRO UNDS RAISED BY THE ASSESSEE. 13. SINCE FACTS AND GROUNDS ARE IDENTICAL AND COMMO N IN OTHER APPEALS AS MENTIONED IN CAUSE-TITLE, FOLLOWING THE REASONING GIVEN HEREINABOVE IN ITA NO.1314/HYD/12 PERTAINING TO THE ASSESSMENT YEAR 1999-2000, WE UPHOLD THE ORDERS OF THE FIRST A PPELLATE AUTHORITY FOR THE YEARS UNDER CONSIDERATION AND DIS MISS THE GROUNDS RAISED BY THE ASSESSEES. 14. IN THE RESULT, ALL THE APPEALS FILED BY THE ASS ESSEES STAND DISMISSED. ORDER PRONOUNCED IN THE COURT ON 17-01-2014. SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER SD/- (SAKTIJIT DEY) JUDICIAL MEMBER HYDERABAD, DATED THE 17 TH JANUARY, 2014. JMR* COPY TO:- 1) ALL ASSESSEES, C/O SRI K. VASANT KUMAR, A.V. RAGHU RAM, P. VINOD AND B. PEDDI RAJULU, ADVOCATES, FLAT NO.610, 6 TH FLOOR, BABHUKHAN ESTATE, BASHEERBAGH, HYDERABAD. 2) ITO, WARD-5(3), HYDERABAD. 3) CIT (A)-V, HYDERABAD. 4) CIT-IV, HYDERABAD. 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABAD. 14 ITA NO.1309 AND OTHERS OF 2012 SRI ZIAUDDIN AHMED AND OTHERS,HYDERABAD. . 15 ITA NO.1309 AND OTHERS OF 2012 SRI ZIAUDDIN AHMED AND OTHERS,HYDERABAD. .