M/S SHRI PREM SINGH LALPURA, Tarn Taran V. THE Income Tax Officer, Tarn Taran

ITA 133/ASR/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7822 (ITAT-AMRITSAR)
• Duration Of Justice: 2 year(s) 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 14-06-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 04-03-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Capital asset; Condonation of delay
• Section: 54F

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. 133/(ASR)/2015 ASSESSMENT YEAR: 2007-08 PAN: ACGPL1394N M/S. SH. PREM SINGH LALPURA, (DECEASED), THROUGH ONLY LOCAL L/HR. MR. DALJIT SINGH (SON) & HOLDER OF APPELLANT, BATH COLONY, TARN TARAN ROAD. VS. INCOME TAX OFFICER, WARD-1 (4), TARN TARAN. (APPELLANT) (RESPONDENT) APPELLANT BY : SH. VINAMAR GUPTA (C. A. ) RESPONDENT BY: SH. RAHUL DHAWAN (D. R.) DATE OF HEARING: 05.09.2017 DATE OF PRONOUNCEMENT: 11.09.201 7 ORDER PER T. S. KAPOOR (AM): THIS IS AN APPEAL FILED BY ASSESSEE AGAINST THE ORD ER OF LD. CIT(A), AMRITSAR DATED 07.11.2012 FOR ASST. YEAR: 2007-08. 2. THE ASSESSEE HAS TAKEN NINE GROUNDS OF APPEAL BU T AT THE TIME OF HEARING THE LD. AR SUBMITTED THAT HE WILL BE PRESSI NG GROUNDS NO. 5 TO 7 ONLY AND THEREFORE GROUND NO. 1 TO 4 AND 8 TO 9 ARE DISMISSED AS WITHDRAWN. GROUND NO. 5 TO 7 OF THE APPEAL ARE REPR ODUCED BELOW: 5. THE LD. ASSESSING OFFICER HAS ERRED ON FACTS AN D IN LAW TO ROPE IN RECEIPT OF ADJUSTABLE ADVANCE/EARNEST MONEY AND BEN EFITS IN EXPECTANCY WITH IN THE AMBIT OF TRANSFER AS CONTEMP LATED U/S 53A OF TRANSFER OF PROPERTY ACT. 6. THAT LD. ASSESSING OFFICER HAS MISAPPLIED THE FA CTS AND LAW IN TREATING FUTURE AND UNCERTAIN AND UNQUANTIFIABLE BE NEFITS AS SO ITA NO. 133(ASR)/2015 ASSESSMENT YEAR: 2007-08 2 CALLED CONSIDERATION FOR ALLEGED TRANSFER AND ACCOR DINGLY HE HAS VALUED NON EXISTENT PROPERTY BENEFITS FOR LEVY OF C APITAL GAINS. 7. THAT THE INCOME ASSESSED AT RS.1,83,75000 AS CAP ITAL GAIN STANDS TO BE DELETED BECAUSE LD. ASSESSING OFFICER HAS FAI LED TO DISCHARGE THE SINE QUA NON ONUS OF PROVING THE NEXUS OF THE R ECEIPT OF THE IMPUGNED AMOUNTS TO ANY KIND OF TRANSFER AS CONTEMP LATED U/S 2(47) OF THE INCOME TAX ACT 1961. 3. AT THE OUTSET, THE LD. AR SUBMITTED THAT THERE IS A DELAY OF 775 DAYS IN FILING OF THE APPEAL AND THE REASON FOR DEL AY IN FILING OF THE APPEAL WAS THE CONTINUOUS ILL HEALTH OF R.C. KHANNA THE CO UNSEL OF THE ASSESSEE. IT WAS SUBMITTED THAT ASSESSEE WAS UNDER BONAFIDE B ELIEF THAT HIS APPEAL AGAINST CIT(A) ORDER HAS BEEN FILED BY HIS COUNSEL BUT LD. COUNSEL COULD NOT FILE THE APPEAL DUE TO HIS BAD HEALTH, LD. AR S UBMITTED THAT AN APPLICATION FOR CONDONATION OF DELAY ALONGWITH AFFI DAVIT OF THE ASSESSEE WAS ON RECORD AND IT WAS PRAYED THAT IN THE INTERES T OF JUSTICE THE DELAY IN FILING THE APPEAL MAY BE CONDONED. THE LD. DR HA D NO OBJECTION TO THE CONDONATION OF DELAY AND THEREFORE THE DELAY WAS CO NDONED AND LD. AR WAS DIRECTED TO PROCEED WITH HIS ARGUMENTS. 4. THE LD. AR AT THE OUTSET SUBMITTED THAT THE CASE OF THE ASSESSEE WAS COVERED IN FAVOUR OF ASSESSEE BY THE ORDER OF P UNJAB & HARYANA HIGH COURT IN THE CASE OF C. S. ATWAL AND OTHERS VS. CIT . 5. THE LD. DR FAIRLY AGREED THAT THE MATTER WAS COV ERED IN FAVOUR OF ASSESSEE. 6. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE THROUGH THE MATERIAL PLACED ON RECORD. THE BRIEF FACTS OF THE C ASE ARE THAT THE ASSESSEE WAS A MEMBER OF THE PUNJAB CO-OPERATIVE HO USE BUILDING ITA NO. 133(ASR)/2015 ASSESSMENT YEAR: 2007-08 3 SOCIETY LTD. AND AS A MEMBER OF THE SAID SOCIETY; T HE ASSESSEE WAS HAVING 500 SQ. YARDS OF PLOT IN THE LAND OWNED BY T HE SOCIETY. A TRIPARTITE AGREEMENT DATED 25.02.2007 WAS ENTERED INTO BETWEEN PUNJAB CO-OP HOUSING DEVELOPMENT COMPANY HOUSE BUILDING SOCIETY LTD. M/S HASH BUILDERS (P) LTD. CHANDIGARH AND M/S TATA HOUSING D EVELOPMENT COMPANY FOR TRANSFER OF LAND OF THE SOCIETY ACCORD ING TO WHICH EACH MEMBER OF THE SOCIETY HAVING PLOT OF 500 SQ. YARDS SHALL RECEIVE RS.82,50,000/- AS MONETARY CONSIDERATION AND ONE FU RNISHED FLAT MEASURING 2250 SQ. FT. TO BE CONSTRUCTED BY M/S TAT A HOUSING COMPANY LTD. MUMBAI, AND THE COST OF WHICH @ RS.4500/- PER SQ. FT. WAS RS.1,01,25,000/- AND THEREFORE, AS PER THE ABOVE SA ID TRIPARTITE AGREEMENT, THE ASSESSEE WAS TO RECEIVE TOTAL CONSID ERATION OF RS.1,83,75,000/-. THE ASSESSEE RECEIVED A PART PAYM ENT OF RS.15,00,000/- ON 24.02.2007 AND ANOTHER PAYMENT OF RS.18,00,000/- WAS RECEIVED IN APRIL, 2007, BUT THE AGREEMENT COUL D NOT BE COMPLETED AND ASSESSEE DID NOT RECEIVE BALANCE PAYMENT ALONG WITH THE FURNISHED FLAT. THE ASSESSEE THEREFORE, DID NOT DECLARE THE C APITAL GAIN ON THE SALE OF SUCH PLOT AS IN HIS OPINION NO CAPITAL GAIN HAD ACC RUED. HOWEVER, THE ASSESSING OFFICER CALCULATED THE CAPITAL GAIN ON AC CRUAL BASIS AND WORKED OUT THE CAPITAL GAIN TO THE EXTENT OF RS.1,83,75000 /-. 7. ON APPEAL BEFORE LD. CIT(A), THE ASSESSEE DID NO T GET ANY RELIEF AND THEREFORE, THE ASSESSEE FILED THE APPEAL BEFORE THE HONBLE TRIBUNAL. WE FIND THAT THE CASE OF THE ASSESSEE IS SQUARELY COVE RED BY THE ORDER OF THE PUNJAB & HARYANA HIGH COURT IN THE CASE OF C. S. AT WAL AND SONS & ITA NO. 133(ASR)/2015 ASSESSMENT YEAR: 2007-08 4 OTHERS. THE FINDINGS OF THE HON'BLE COURT ARE REPRO DUCED AS HEREIN BELOW. 1. PERUSAL OF THE JDA DATED 25.02.2007 READ WITH SALE DEEDS DATED 02.03.2007 AND 25.04.2007 IN RESPECT OF 3.08 ACRES AND 4.62 ACRES RESPECTIVELY WOULD REVEAL THAT THE PARTIES HAD AGRE ED FOR PRO-RATA TRANSFER OF LAND. 2. NO. POSSESSION HAD BEEN GIVEN BY THE TRANSFEROR 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 1882 AC T. 3. THE POSSESSION DELIVERED, IF AT ALL, WAS AS A LI CENSE FOR THE DEVELOPMENT OF THE PROPERTY AND NOT IN THE CAPACITY OF A TRANSFEREE. 4. FURTHER SECTION 53A OF 1882 ACT, BY INCORPORATIO N, STOOD EMBODIED IN SECTION 2(47)(V) OF THE ACT AND ALL THE ESSENTIA L INGREDIENTS OF SECTION 53A OF 1882 ACT WERE REQUIRED TO BE FULFILL ED. IN THE ABSENCE OF REGISTRATION OF JDA DATED 25.02.2007 HAVING BEEN EXECUTED AFTER 24.09.2001, THE AGREEMENT DOES NOT FALL UNDER SECTI ON 53A OF 1882 ACT AND CONSEQUENTLY SECTION 2(47)(V) OF THE ACT DO ES NOT APPLY. 5. IT WAS SUBMITTED BY LEARNED COUNSEL FOR THE ASSE SSEE- APPELLANT THAT WHATEVER AMOUNT WAS RECEIVED FROM THE DEVELOPE R, CAPITAL GAINS TAX HAS ALREADY BEEN PAID ON THAT AND SALE DE EDS HAVE ALSO BEEN EXECUTED. IN VIEW OF CANCELLATION OF JDA DATED 25.02.2007, NO FURTHER AMOUNT HAS BEEN RECEIVED AND NO ACTION THER EON HAS BEEN TAKEN. IT WAS URGED THAT AS AND WHEN ANY AMOUNT IS RECEIVED, CAPITAL GAINS TAX SHALL BE DISCHARGED THEREON IN AC CORDANCE WITH LAW. IN VIEW OF THE AFORESAID STAND, WHILE DISPOSIN G OF THE APPEALS, WE OBSERVE THAT THE ASSESSEE APPELLANTS SHALL REMAI N BOUND BY THEIR SAID STAND. 6. THE ISSUE OF ELIGIBILITY TO CAPITAL GAINS TAX HA VING BEEN DECIDED IN FAVOUR OF THE ASSESSEE, THE QUESTION OF EXEMPTION U NDER SECTION 54F OF THE ACT WOULD NOT SURVIVE ANY LONGER AND HAS BEE N RENDERED ACADEMIC. 7. THE TRIBUNAL AND THE AUTHORITIES BELOW WERE NOT RIGHT IN HOLDING THE ASSESSEE-APPELLANT TO BE LIABLE TO CAPITAL GAINS TA X IN RESPECT OF REMAINING LAND MEASURING 13.5 ACRES FOR WHICH O CON SIDERATION HAD BEEN RECEIVED AND WHICH STOOD CANCELLED AND INCAPAB LE OF PERFORMANCE AT PRESENT DUE TO VARIOUS ORDERS PASSED BY THE SUPREME COURT AND THE HIGH COURT IN PILS. THEREFORE , THE APPEALS ARE ALLOWED. ITA NO. 133(ASR)/2015 ASSESSMENT YEAR: 2007-08 5 IN VIEW OF THE ABOVE FINDINGS OF HON'BLE PUNJAB & HARYANA HIGH COURT, WE FIND THAT THE ORDER OF LD. CIT(A) IS NOT SUSTAINABLE AS THE HON'BLE. COURT HAS DECIDED THAT UNDER THESE CIRCUMS TANCES THE CAPITAL GAIN HAS TO BE RESTRICTED TO THE PROPORTIONATE AMOU NT OF SALE CONSIDERATION RECEIVED DURING THE YEAR AND THE REST OF THE CAPITAL GAIN WILL BE TAXABLE IN THE YEAR IN WHICH REST OF THE CO NSIDERATION IS RECEIVED. THEREFORE THE ASSESSING OFFICER IS DIRECTED COMPUTE CAPITAL GAINS TAX ON THE BASIS OF ACTUAL RECEIPTS DURING THE YEAR. 8. IN VIEW OF THE ABOVE, THE APPEAL FILED BY ASSESS EE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 11.09.2017 SD/- SD/- SD (N. K. CHOUDHRY) (T. S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 11.09.2017. /GP/SR. 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