ITO, Mohali V. Sh.Paramjit Singh, Mohali

ITA 1441/CHANDI/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5233 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-04-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 23-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Keywords: Revised return
• Section: 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO.1441/CHD/2016 (ASSESSMENT YEAR : 2008-09) THE INCOME TAX OFFICER, VS. SH.PARAMJIT SINGH, WARD 6(1), MOHALI. HOUSE NO.3647, SECTOR 69, MOHALI. PAN: BGKPS1441L (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI MANJIT SINGH, DR RESPONDENT BY : NONE DATE OF HEARING : 21.02.2017 DATE OF PRONOUNCEMENT : 18.04.2017 O R D E R PER ANNAPURNA GUPTA, A.M . : THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF CIT(APPEALS)-2, CHANDIGARH DAT ED 03.10.2016 RELATING TO ASSESSMENT YEAR 2008-09. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: I) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN PARTLY ALLOWING APPEAL OF THE ASSESSES WITHOUT APPRECIATING THE FACTS OF THE CASE. II) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.80,88,224/- WITH THE OBSERVATION THAT LIABILITY TO PAY CAPITAL GAIN TAKES PLACE WHEN THE FULL VALUE OF SALE 2 CONSIDERATION RECEIVED AND NOT ON THE DATE OF TRANSFER OF ASSET. III) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN HOLDING THAT NO POSSESSION HAD BEEN GIVEN BY THE TRANSFEROR TO THE TRANSFEREE OF THE ENTIRE LAND IN PART PERFORMANCE OF THE JDA SO AS TO FALL WITHIN THE DOMAIN OF SECTION 53A OF THE TRANSFER OF PROPERTY ACT, 1882 WHEN BY VIRTUE OF THE DULY REGISTERED IRREVOCABLE SPECIAL POWER OF ATTORNEY, THE DEVELOPER WAS IN COMPLETE CONTROL OF THE PROPERTY AND WAS IN POSSESSION THEREOF INCLUDING ALL RIGHTS OF A DEFACTO POWER. IV) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN RELYING ON THE DECISION OF THE HON'BLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF C.S. ATWAL IN ITA NO.200 OF 2013 DESPITE THE FACT THAT THE DEPARTMENT HAS FILED SLP AGAINST THE SAID DECISION WHICH IS PENDING FOR ADJUDICATION BEFORE THE HON'BLE SUPREME COURT. 3. THE ONLY EFFECTIVE GROUND TAKEN BY THE REVENUE IS AGAINST THE DELETION OF THE ADDITION OF RS. 80,88,2 24/- ON ACCOUNT OF CAPITAL GAINS EARNED ON TRANSFER OF CAP ITAL ASSET. 4. BRIEF FACTS OF THE CASE ON THIS ISSUE ARE THAT A HOUSING SOCIETY, NAMED AS THE DEFENCE SERVICES CO- OPERATIVE HOUSE BUILDING SOCIETY LTD., MOHALI (HERE INAFTER REFERRED TO AS 'SOCIETY') CONSISTING OF 207 MEMBERS WAS FORMED, WHICH WAS THE OWNER OF 27.3 ACRES OF LAND I N VILLAGE KANSAL, DISTRICT MOHALI. THIS SOCIETY ENTERED INTO A TRIPARTITE JOINT DEVELOPMENT AGREEMENT (HEREINAFTE R REFERRED 3 TO AS 'AGREEMENT') ON 27.04.2007 WITH M/S HASH BUILDERS PVT. LTD., CHANDIGARH (HEREINAFTER REFERRED TO AS ' HASH') AND M/S TATA HOUSING DEVELOPMENT COMPANY LTD., MUMBAI (HEREINAFTER REFERRED TO AS THDC'), BY VIRTUE OF W HICH THE SOCIETY WOULD TRANSFER ITS LAND FOR DEVELOPMENT IN LIEU OF MONETARY CONSIDERATION AND ALSO CONSIDERATION IN KI ND TO THE MEMBERS OF THE SOCIETY. THE ASSESSEE WAS ALSO A MEMBER OF THE SAID SOCIETY OWNING 250 SQ. YARDS PLO T OF LAND. THE TOTAL CONSIDERATION WAS SETTLED AT RS.34 ,00,000/- PLUS ALLOTMENT OF ONE FLAT OF 1150 SQ. FEET TO THE ASSESSEE. IN VIEW OF THE ABOVE REASONS, PROCEEDING U/S 147 OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT) WAS INIT IATED AND NOTICE U/S 148 WAS ISSUED TO THE ASSESSEE ON 14.10. 2013. IN RESPONSE TO NOTICE U/S 148 THE ASSESSEE SUBMITTE D THAT THE REVISED RETURN FILED ON 30.06.2009 DECLARING TO TAL INCOME OF RS.14,26,540/- MAY BE TREATED AS RETURN I N RESPONSE TO NOTICE U/S 148 IN WHICH LONG TERM CAPIT AL GAINS OF RS.12,08,267/- HAD BEEN DECLARED ON ACTUAL AMOUN T OF RS.16,00,000/- RECEIVED DURING THE YEAR.THE AO AFTE R CONSIDERING THE VARIOUS CLAUSES OF THE AGREEMENT HE LD THAT BY VIRTUE OF THE JDA, DOMAIN AND CONTROL OF THE ENT IRE PROPERTY HAD PASSED THUS EFFECTING TRANSFER IN TERM S OF SECTION 2(47) OF THE INCOME TAX ACT,1961 AND FOR TH E PURPOSE OF CALCULATING CAPITAL GAINS EARNED THEREON THE ENTIRE CONSIDERATION INCLUDING BOTH THE CASH COMPON ENT AND THE MARKET VALUE OF THE FLAT WHICH EACH MEMBER WAS TO GET WAS TO BE TAKEN INTO CONSIDERATION. ACCORDINGLY HE WORKED OUT THE FULL VALUE OF CONSIDERATION AT RS.94,75,000 /- 4 INCLUDING CASH RS.34,00,000/- AND VALUE OF FLAT WOR KED OUT AT RS.60,75,000/-.THUS LONG TERM CAPITAL GAIN WAS COMPUTED AT RS.92,96,491/- AND REDUCING THEREFROM T HE GAIN DISCLOSED BY THE ASSESSEE OF RS.12,08,267/- NE T ADDITION OF RS.80,88,224/- WAS MADE TO THE INCOME O F THE ASSESSEE. 5. THE MATTER WAS CARRIED IN APPEAL BEFORE THE LD.CIT(A).THE LD. CIT (APPEALS) DIRECTED THE ASSESS ING OFFICER TO RECOMPUTE THE LONG-TERM CAPITAL GAINS O N THE BASIS OF THE AMOUNT ACTUALLY RECEIVED BY THE ASSESS EE IN PURSUANCE OF THE SAID AGREEMENT, FOLLOWING THE DECI SION OF THE HONBLE PUNJAB AND HARYANA HIGH COURT IN THE CA SE OF SH.C.S. ATWAL IN ITA NO. 200 OF 2013 (O&M) V IDE ORDER DATED 22.7.015, WHICH THE LD. CIT (APPEALS) FOUND HAD DEALT WITH IDENTICAL FACTS. 6. AGGRIEVED BY THE SAME, THE REVENUE HAS NOW COME UP IN APPEAL BEFORE US. 7. DURING THE COURSE OF HEARING BEFORE US LD. DR RELIED UPON THE ORDER OF THE ASSESSING OFFICER WHIL E LD. COUNSEL FOR THE ASSESSEE RELIED UPON THE ORDER OF T HE CIT (APPEALS). 8. WE HAVE HEARD BOTH THE PARTIES. WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT (APPEALS). TH E ONLY ISSUE IN THE PRESENT APPEAL IS WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE CAPITAL GAIN IS T O BE COMPUTED ON THE CONSIDERATION ACTUALLY RECEIVED OR ON THE 5 BASIS OF THE FULL VALUE OF CONSIDERATION ACCRUED. IT IS NOT DISPUTED THAT THE ISSUE AND FACTS IN THE PRESENT C ASE ARE IDENTICAL TO THAT IN THE CASE OF C.S. ATWAL (SUPRA) WHICH HAS BEEN DECIDED BY THE HONBLE PUNJAB AND HARYANA HIGH COURT IN ITS JUDGEMENT AS REFERRED TO ABOVE. LD.DR HAS NOT BROUGHT ANY DISTINGUISHING FACTS TO OUR NOTICE. HAV ING SAID SO THE DECISION RENDERED THEREIN WOULD SQUARELY APP LY IN THE PRESENT CASE WHEREIN IT HAS BEEN HELD THAT CAPI TAL GAINS IS TO BE COMPUTED ONLY ON THE CONSIDERATION RECEIVE D. LD. CIT (APPEALS) HAVING RENDERED THE DECISION IN THE P RESENT CASE FOLLOWING THE SAID JUDGEMENT AND NO ANOMALY HA VING BEEN POINTED OUT BY THE LD. DR IN INTERPRETING THE SAID JUDGEMENT BY THE LD. CIT (APPEALS) AND THUS HOLDIN G THAT CAPITAL GAINS IS TO BE LEVIED ONLY ON THE AMOUNTS R ECEIVED AND NOT ON THAT ACCRUING OR RECEIVABLE, WE FIND NO REASON TO INTERFERE IN THE ORDER OF THE LD. CIT (APPEALS). 9. THE GROUND OF APPEAL RAISED BY THE REVENUE IS THEREFORE DISMISSED. 10. IN EFFECT THE APPEAL OF THE REVENUE IS DISMISS ED ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (BHAVNESH SAINI) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 18 TH APRIL, 2017 *RATI* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE DR ASSISTANT REGISTRAR, ITAT, CHANDIGARH 6