Shivram Rakhmaj Bankar, Pune V. Deputy Commissioner of Income-tax, Circle - 8, Pune

ITA 1676/PUN/2017

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 7731 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 1 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 04-07-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: DAINI SHINDE SHRI S P WALIMBE
• Keywords: Capital asset; Cost of acquisition
• Section: 54B; 54F; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH, A, PUNE VIRTUAL COURT BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER ITA NO. 1676/PUN/2017 / ASSESSMENT YEAR : 2012-13 SHIVRAM RAKHMAJ BANKAR, BANKARWASTI, A/P. MOSHI PUNE NASHIK ROAD, TAL. HAVELI, PUNE 412 105 PAN : ABAPB6211F VS. DCIT, CIRCLE-8, PUNE APPELLANT RESPONDENT ITA NO. 1677/PUN/2017 / ASSESSMENT YEAR : 2012-13 SITARAM RAKHMAJ BANKAR, BANKARWASTI, A/P. MOSHI PUNE NASHIK ROAD, TAL. HAVELI, PUNE 412 105 PAN : AZQPB8796F VS. DCIT, CIRCLE-8, PUNE APPELLANT RESPONDENT / ORDER PER R.S.SYAL, VP : THESE TWO APPEALS BY DIFFERENT BUT CONNECTED ASSESSEES A RISE OUT OF SEPARATE ORDERS, BOTH DATED 10.03.2017, PASSED B Y THE CIT(APPEALS)-9, PUNE IN RELATION TO THE ASSESSMENT YEAR 20 12-13. SINCE COMMON ISSUES HAVE BEEN RAISED IN THESE APPEALS, WE ARE, ASSESSEE BY MS. DAINI SHINDE REVENUE BY SHRI S.P. WALIMBE DATE OF HEARING 26-08-2020 DATE OF PRONOUNCEMENT 31-08-2020 ITA NOS.1676 & 1677/PUN/2017 SHIVRAM R. BANKAR AND SITARAM R. BANKAR 2 THEREFORE, DISPOSING THEM OFF BY THIS CONSOLIDATED ORDER F OR THE SAKE OF CONVENIENCE. SHIVRAM R. BANKAR : 2. FIRSTLY, WE TAKE UP THE APPEAL FILED BY SHIVRAM R. BANKAR. AS AGAINST 10 GROUNDS RAISED IN THE ORIGINAL MEMORANDUM OF APPEAL, THE ASSESSEE HAS FILED CONCISE GROUNDS RUNNING IN TO FOUR GROUNDS, WHICH HAVE ONLY ONE ISSUE, WHICH IS BEING DISCUSS ED HEREINAFTER. BRIEFLY, THE FACTS ARE THAT A SURVEY ACTION U /S.133A OF THE INCOME-TAX ACT, 1961 (HEREINAFTER ALSO CALLED THE ACT) WAS CARRIED OUT ON 29-07-2013 IN THE CASE OF PHARANDE PROMOTE RS AND BUILDERS, PUNE, WHICH IS ENGAGED IN THE BUSINESS AS DEVELOP ERS AND BUILDERS. DURING THE COURSE OF SURVEY ACTION, IT TRANSP IRED THAT PHARANDE PROMOTERS AND BUILDERS HAD ENTERED INTO AN AGREEM ENT WITH THE ASSESSEE AND HIS FAMILY MEMBERS ON 21-10-2011 F OR PURCHASING A LAND SITUATED AT GAT NO.728 AND 734 ADMEASURIN G 40R FOR A TOTAL CONSIDERATION OF RS.3.00 CRORE. THE SAID LAND WAS ANCESTRAL PROPERTY OF THE ASSESSEE. THE ASSESSEE FILED H IS RETURN COMPUTING CAPITAL GAIN BY TAKING FULL VALUE OF CONSIDERATION AT RS.1.50 CRORE. THEREAFTER, EXEMPTION WAS CLAIMED U/SS. 54B AND 54F OF THE ACT. THE ASSESSING OFFICER (AO) OBSERVED THA T THE ITA NOS.1676 & 1677/PUN/2017 SHIVRAM R. BANKAR AND SITARAM R. BANKAR 3 ASSESSEES CLAIM FOR EXEMPTION U/S.54B AMOUNTING TO RS.69 .00 LAKH WAS NOT TENABLE BECAUSE THE NEW PIECE OF LAND WAS PUR CHASED BY THE ASSESSEE IN THE NAMES OF HIS TWO SONS, NAMELY, SHR I VINOD SHIVRAM BANKAR AND SHRI BIPIN SHIVRAM BANKER. SOME PROBLEM WAS FOUND QUA THE CLAIM OF EXEMPTION U/S.54F AS WELL. THE AO, THEREAFTER, COMPUTED THE CHARGEABLE CAPITAL GAIN AT RS.1,46,07,500/- AFTER REDUCING THE COST OF ACQUISITION OF RS.3,92,500/- FROM SALE CONSIDERATION OF RS.1.50 CRORE PERTAINING TO THE ASSESSEES SHARE. THE ASSESSEE CONTENDED BEFOR E THE LD. CIT(A) THAT AT THE TIME OF TRANSFER OF PROPERTY, HE HAD NO RIGHT OVER THE SAME EXCEPT THE AMOUNT RECEIVED TO THE TUNE OF RS.21.50 LAKH IN THE CAPACITY OF APPROVER. IT WAS SO CLAIMED ON THE GRO UND THAT FAMILY PARTITION TOOK PLACE BEFORE EFFECTING THE TRANSFER OF P ROPERTY AND THE LAND IN QUESTION WAS PARTITIONED IN FAVOUR OF HIS SONS . IN SUPPORT OF SUCH A CLAIM, THE ASSESSEE FILED A COPY OF PAR TITION DEED. THE LD. CIT(A) ACCEPTED THE ASSESSEES CONTENTION AND THEN CAME TO HOLD THAT THE ASSESSEE WAS NOT ELIGIBLE FOR EXEMPTIONS U/S .54B AND 54F BECAUSE THE OWNERSHIP OF THE PROPERTY DID NOT VES T IN HIM AND HENCE THE EXEMPTION WAS NOT AVAILABLE. THE ASSESSEE H AS COME UP IN APPEAL AGAINST SUCH FINDING. ITA NOS.1676 & 1677/PUN/2017 SHIVRAM R. BANKAR AND SITARAM R. BANKAR 4 3. WE HAVE HEARD BOTH THE SIDES THROUGH VIRTUAL COURT AND G ONE THROUGH THE RELEVANT MATERIAL ON RECORD. A COPY OF SALE DEE D DATED 21-10-2011 BETWEEN PHARANDE PROMOTERS AND BUILDERS AND TH E FAMILY OF THE ASSESSEE HAS BEEN PLACED AT PAGE 42 ONWAR DS OF THE PAPER BOOK, WHICH REFERS TO THE SALE OF THE DESIGNATED AGR ICULTURAL LAND. FROM SUCH SALE DEED, IT CAN BE SEEN THAT IT HAS BEEN EXECUTED BETWEEN PHARANDER PROMOTERS AND BUILDERS ON THE ONE HAND A S BUYER AND 13 PERSONS ON THE OTHER WHICH INCLUDE CLOSE AN D EXTENDED FAMILY MEMBERS OF THE ASSESSEE, WHO HAVE BEEN DESCRIBED AS VENDORS. THE EXTANT ASSESSEE AND THE OTHER ASSESSEE IN THIS BATCH OF APPEALS, NAMELY, SITARAM R. BANKAR HAVE BEEN DESCRIBED AS APPROVER IN THE SALE DEED. A COPY OF THE TRANSLATED PARTITION DEED DATED 11.8.2011 BETWEEN THE TWO ASSESSES IN THE INSTANT BATCH OF APPEALS AND THEIR CHILDREN, HAS BEEN PLACE D AT PAGES 11 ONWARDS OF THE PAPER BOOK. THE LD. CIT(A) HA S ACCEPTED THE VALIDITY OF THE PARTITION DEED BY RETURNING A CATEGORICAL FINDIN G IN PARA 7.4 OF THE IMPUGNED ORDER THAT: THE LAND WAS TRANSFERRED IN NAME OF SONS THROUGH DISTRIBUTION DEED DATED 11-08-2011 AND FURTHER SOLD TO BUILDER ON 21-10-2011. THE DISTRIBUTION DEED SHOWS THAT THE APPELLANT IS HAVING NO OWNERSHIP ON LAND SOLD. . . . . ITA NOS.1676 & 1677/PUN/2017 SHIVRAM R. BANKAR AND SITARAM R. BANKAR 5 . IN CASE OF THE ASSESSEE OWNERSHIP OF THE LAND WAS NOT THER E ON THE DATE OF TRANSFER OF LAND, THEREFORE THE ASSESSEE CANNOT CLAIM DEDUCTION U/S.54F . SIMILAR FINDING WAS RECORDED BY THE LD. CIT(A) IN PARA 10.3 OF THE IMPUGNED ORDER ANENT TO THE CLAIM OF EXEMPTION U/S.54B BY NOTICING THAT: THE APPELLANT WAS NOT HAVING OWNERSHIP OF THE LAND ON THE DATE OF TRANSFER THEREFORE NO CAPITAL GAIN WOULD ARISE TO THE APPELLANT . FROM THE ABOVE FINDINGS RECORDED BY THE LD. CIT(A), IT BECOMES APPARENT THAT HE AC CEPTED THE ASSESSEES CLAIM THAT HE WAS NOT OWNER OF THE PROPER TY AT THE TIME OF SALE INASMUCH AS THE PARTITION DEED, TRANSFERRING INTERE ST IN THE PROPERTY TO HIS SONS, WAS EXECUTED PRIOR TO THE DATE OF SALE. ONCE THE ASSESSEE WAS NOT THE OWNER OF THE PROPERTY, THER E COULD OBVIOUSLY HAVE BEEN NO QUESTION OF ALLOWING EXEMPTION U/SS.5 4B OR 54F OF THE ACT. TO THAT EXTENT, THE VIEW TAKEN BY THE LD. CIT(A) IS CORRECT. ONCE THE ASSESSEE IS NOT ENTITLED TO EXEMPTION BE CAUSE HE WAS NOT THE OWNER OF THE PROPERTY TRANSFERRED, THERE C AN BE NO QUESTION OF COMPUTING ANY CAPITAL GAIN IN HIS HANDS FROM THE TRANSFER OF THE SAME PROPERTY. ITA NOS.1676 & 1677/PUN/2017 SHIVRAM R. BANKAR AND SITARAM R. BANKAR 6 4. IT IS NO DOUBT UNDISPUTED THAT THE ASSESSEE DID COM PUTE CAPITAL GAIN IN HIS RETURN OF INCOME AND THEREAFTER CLAIMED EXEMPTIO NS U/SS.54B AND 54F OF THE ACT. SIMPLY BECAUSE SUCH A C OMPUTATION OF CAPITAL GAIN WAS MADE ON AN ILL-ADVICE, CANNOT BIND THE ASSESSEE FOR THE TIMES TO COME, IF, IN FACT, HE WAS NOT LIABLE FOR SU CH CAPITAL GAIN. AS THE PROCEEDINGS IN THE FIRST APPEAL ARE CONTINUATION OF THE ASSESSMENT PROCEEDINGS, THERE CAN BE NO IMPEDIMENT ON THE ASSESSEE IN MAKING A LAWFUL CLAIM BEFORE THE CIT(A) FOR TH E FIRST TIME AND THE CIT(A) ACCEPTING THE SAME, IF IT IS OTHERWISE SUSTAINABLE. THERE CAN BE NO ESTOPPEL AGAINST THE PROVISION S OF THE ACT. IF AN ASSESSEE IS NOT LEGALLY CHARGEABLE TO TAX, HE CA N VALIDLY MAKE SUCH A CLAIM BEFORE THE CIT(A) NOTWITHSTANDING THE FA CT THAT THE AMOUNT WAS WRONGLY INCLUDED IN THE RETURN OF INCOME. TH E CONTENTION OF THE LD. DR OBJECTING TO RAISING A FRESH CLAIM BE FORE THE LD. CIT(A) FOR THE FIRST TIME IS, ERGO, JETTISONED. WE TH US HOLD THAT NOT ONLY THE ASSESSEE WAS JUSTIFIED IN MAKING A CLAIM OF PARTITION DEED IN THE FIRST APPEAL, THE LD. CIT(A) WAS ALSO FULLY WITHIN HIS JURISDICTION IN ENTERTAINING SUCH A CLAIM. IN THE ABSE NCE OF THE REVENUE HAVING FILED ANY CROSS APPEAL ASSAILING THE ACCEPTANCE OF THE GENUINENESS OF SUCH A PARTITION DEED BY TH E LD. ITA NOS.1676 & 1677/PUN/2017 SHIVRAM R. BANKAR AND SITARAM R. BANKAR 7 CIT(A), SUCH A FINDING ATTAINED FINALITY AND THE SAME CANNOT BE CHALLENGED BEFORE THE TRIBUNAL WHEN THE APPEAL OF THE ASSES SEE IS UNDER CONSIDERATION. 5. THE LD. AR HAS INVITED OUR ATTENTION TOWARDS PAGE 5 OF TH E WRITTEN SUBMISSIONS WHICH INDICATE THAT THE ASSESSEE RECEIVED A SUM OF RS.21.50 LAKH TOWARDS EXTINGUISHMENT OF HIS RIGHT IN THE PROPERTY AT THE TIME OF SALE. SHE RAISED NO OBJECTION TO THE CHARGEABILITY OF THIS AMOUNT IN THE HANDS OF THE ASSESSEE AS CAPITAL GAIN. WE, THEREFORE, DIRECT THE AO TO CONSIDER THE INCOME CHARGEABLE UNDER THE HEAD CAPITAL GAIN IN THE HANDS OF TH E ASSESSEE BY TAKING FULL VALUE OF CONSIDERATION TOWARDS EXTINGUISHMENT OF HIS RIGHT IN THE PROPERTY AT RS.21.50 LAKH. 6. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. SITARAM R. BANKAR : 7. THE FACTS OF THE CASE OF SH. SITARAM R. BANKAR ARE MUTATIS MUTANDIS SIMILAR TO THOSE OF SH. SHIVRAM R BANKAR, WHOSE APPEAL HAS BEEN DISPOSED OF HEREINABOVE. HERE ALSO, THE RETURN WAS FILED UNDER MISCONCEPTION BY COMPUTING CAPITAL GAIN AND SIMULTANEOUSLY CLAIMING EXEMPTION U/SS.54B AND 54F OF THE AC T. ITA NOS.1676 & 1677/PUN/2017 SHIVRAM R. BANKAR AND SITARAM R. BANKAR 8 THE AO DID NOT ALLOW THESE EXEMPTIONS FOR ALMOST THE SIMILAR REASONS AS ASSIGNED IN THE ASSESSMENT OF SHIVRAM R BANKAR . DURING THE COURSE OF PROCEEDINGS BEFORE THE LD, CIT(A), THE ASSESSEE LODGED SIMILAR CLAIM. THE LD. CIT(A) RECORDED SIMILAR FINDINGS AS IN THE CASE OF SHIVRAM R. BANKAR THAT THE ASSES SEE WAS NOT THE OWNER OF THE PROPERTY AT THE TIME OF SALE ON 21-10- 2011 BECAUSE THE PARTITION DEED DATED 11-08-2011 HAD COME INTO F ORCE BEFORE THE DATE OF SALE AND AS SUCH THERE WAS NO QUESTION OF CLAIMING EXEMPTIONS U/SS.54B OR 54F. IN VIEW OF THE DECIS ION TAKEN IN THE CASE OF SHIVRAM R. BANKAR (SUPRA) , WE HOLD, IN PRINCIPLE, THAT THE ASSESSEE WAS ENTITLED TO MAKE A CLAIM BEFO RE THE LD. CIT(A) FOR THE FIRST TIME AGAINST WRONGFUL COMPUTATION OF CAPITAL GAIN IN THE RETURN OF INCOME. AS THE LD. CIT(A) HAS ACCEPTED THE GENUINENESS OF THE PARTITION DEED, WHICH REMAINS UNCHALLENGED, THERE CAN BE NO COMPUTATION OF CAPITAL GAIN ON THIS SCORE AND THE CONSEQUENTIAL EXEMPTIONS. THE SAME IS, THERE FORE, DIRECTED TO BE DELETED. 8. SIMILAR TO SHIVRAM R BANKAR, THIS ASSESSEE RECEIVED A SUM OF RS.17.48 LAKH AS SALE CONSIDERATION AS APPROVER FOR EXTINGUISHMENT OF RIGHT IN THE PROPERTY. THE LD. AR DID NOT R AISE ITA NOS.1676 & 1677/PUN/2017 SHIVRAM R. BANKAR AND SITARAM R. BANKAR 9 ANY DISPUTE AS TO THE CHARGEABILITY OF THIS AMOUNT IN THE HAN DS OF THE ASSESSEE UNDER THE HEAD CAPITAL GAIN. FOLLOWING THE VIE W TAKEN HEREINABOVE IN THE CASE OF SHIVRAM R. BANKAR, WE DIR ECT THE AO TO COMPUTE THE AMOUNT OF CAPITAL GAIN BY CONSIDERING THE ASSESSEES SHARE AT RS.17.48 LAKH TOWARDS EXTINGUISHMENT OF RIGHT IN THE PROPERTY IN THE COMPUTATION OF CAPITAL GAIN. 9. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST AUGUST, 2020. SD/- SD /- (PARTHA SARATHI CHAUDHURY) (R.S.SYAL) JUDICIAL MEMBER V ICE PRESIDENT PUNE; DATED : 31 ST AUGUST, 2020 SATISH / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. THE CIT(APPEAL)-9 ,PUNE 4. 5. 6. THE PR. CIT-5, PUNE THE DR, ITAT, PUNE; / GUARD FILE A BENCH, PUNE. / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE ITA NOS.1676 & 1677/PUN/2017 SHIVRAM R. BANKAR AND SITARAM R. BANKAR 10 DATE 1. DRAFT DICTATED ON 26-08-2020 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 26-08-2020 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. DATE OF UPLOADING ORDER SR.PS 8. FILE SENT TO THE BENCH CLERK SR.PS 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK 10. DATE ON WHICH FILE GOES TO THE A.R. 11. DATE OF DISPATCH OF ORDER. *