Smt. Vimal Baburao Jadhav, Nashik V. Income-tax Officer,

ITA 1710/PUN/2014

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 5859 (ITAT-PUNE)
• Duration Of Justice: 7 year(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-09-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 16-09-2021
• Assessment Year: 2007-2008
• Appeal Filed On: 11-09-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VITTHAL BHOSALE
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Document seized; Principle of natural justice; Cost of acquisition; Fair market value; Corroborative evidences; Valuation report; Condonation of delay; Revised return; Documents seized; Set aside
• Section: 50C; 153A; 48; 13; 153C; 144; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE (THROUGH VIRTUAL COURT) BEFORE SHRI R.S.SYAL, VP AND SHRI PARTHA SARATHI CHAUDHURY, JM . / I TA NO. 1710 /PUN/20 14 / ASSESSMENT YEAR : 2007 - 08 SMT. VIMAL BABURAO JADHAV W/O. BABURAO GANGARAM JADHAV 374, SHRI GANESH JADHAV MALA, GANGAPUR ROAD, ANANDWALLI, NASHIK - 422 013 PAN : AMWPJ2989D ....... / APPELLANT / V/S. THE INCOME TAX OFFICER, WARD - 1(4), NASHIK. / RESPONDENT A SSESSEE BY : SHRI SANKET JOSHI REVENUE BY : SHRI VITTHAL BHOSALE / DATE OF HEARING : 16.09.2021 / DATE OF PRONOUNCEMENT : 17 . 0 9 .2021 / ORDER PER PARTHA SARATHI CHAUDHU RY, JM: THIS APPEAL PREFERRED BY THE ASSESSEE EMANATES FROM THE ORDER OF THE LD. CIT(APPEAL) - I, NASHIK DATED 07.03.2014 FOR THE ASSESSMENT YEAR 2007 - 08 AS PER THE FOLLOWING GROUNDS OF APPEAL ON RECORD: 1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS NOT JUSTIFIED IN DIRECTING THE AO TO RECALCULATE LTCG BY APPLYING PROVISIONS OF S 50C OF THE ACT BY ADOPTING SALE CONSIDERATION OF 2 ITA NO. 1710/PUN/2014 A.Y. 2007 - 08 RS.64,50,000/ - AS DETERMINED BY DVO IN HIS VALUATION REPORT. THE CONSIDERATION BEING AS PER AGREED CONSIDERATION THE SAME BE ACCEPTED. 2) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. C IT(A) WAS NOT JUSTIFIED IN ADOPTING THE SALE CONSIDERATION AS PER VALUATION REPORT OF DVO. THE LEGAL POSITION SHOWS THAT THE REFERENCE TO DVO ITSELF IS INVALID. IT BE HELD ACCORDINGLY. 3) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE APPELLANT - ASSESSEE ALSO DISPUTES THE YEAR OF THE TAXATION OF LTCG AS A.Y. 2007 - 08 WHICH YEAR IS NOT CORRECT. IT BE HELD ACCORDINGLY. 4) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE FILING OF THE APPEAL IS DELAYED. THE APPEAL WAS DECIDED BY THE LD. CIT (A) VIDE HIS ORDER DT. 07.03.2014. THE HUSBAND OF THE ASSESSEE EXPIRED ON 05.01.2014. SHE WAS IN MOURNING. THE DETAILED AFFIDAVIT WITH PRAYER TO CONDONE DELAY WILL BE FILED LATER. THE ASSESSEE - APPELLANT THEREFORE REQUESTS TO CONDONE THE DELAY AND ADMIT APP EAL FOR ADJUDICATION IN ACCORDANCE WITH THE PROVISIONS OF LAW. 5) THE APPELLANT CRAVES/LEAVE TO ADD, AMEND OR ALTER ANY OF THE ABOVE GROUNDS OF APPEAL. 2. AT THE VERY OUTSET, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THERE IS A DELAY OF 121 DAYS IN FILING THE APPEAL FOR WHICH HE HAS FILED AN AFFIDAVIT ALONG WITH CONDONATION PETITION FOR DELAY. THE CONTENTION S OF THE ASSESSEE IS THAT THE DELAY WAS CAUSED BECAUSE OF FACTORS WHICH WER E NOT ATTRIBUTABLE TO ANY DIRECT CONDUCT OR MALA - FIDE MOTIVE OF THE ASSESSEE. RATHER, THEY WERE ALL CIRCUMSTANTIAL AND UNAVOIDABLE IN NATURE. THE ASSESSEE IS AN OLD LADY OF 62 YEARS HAVING NO KNOWLEDGE OF INCOME TAX PROCEEDINGS. SHE IS ILLITERATE AND THE INCOME TAX MATTERS WERE LOOKED AFTER BY HER HUSBA ND. THAT BEFORE THE SCHEDULE DATE OF FILING APPEAL BEFORE THE TRIBU NAL, HUSBAND OF THE ASSESSEE DIED DUE TO HEART ATTACK FOR WHICH RELEVANT CERTIFICATE HAS ALSO BEEN ANNEXED. THE LD. DR DID NOT RAISE ANY OBJECTION REGARDING CONDONATION OF DELAY AND HENCE, DELAY OF 121 DAYS IS CONDONED AND THE CASE IS PROCEEDED TO BE HEARD ON MERITS. 3 . THE ASSESSEE HAS FILED GROUNDS OF APPEAL AS WELL AS ADDITIONAL GROUNDS OF APPEAL. THE ASSESSEE HAS ALSO FILED AN APPLICATION PRAYING FOR ADMISSION OF ADDITIONAL GROUND BASED ON THE DECISION OF THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF NTPC VS. CIT REPORTED IN 229 ITR 383 (SC) WHERE THE 3 ITA NO. 1710/PUN/2014 A.Y. 2007 - 08 ITAT IS EMPOWERED TO ADMIT SUCH ADDITIONAL GROUND. THE CONTENTION OF THE ASSESSEE IS THAT THE ADDITIONAL GROUND DOES NOT REQUIRE ANY FRESH VERIFICATION OF FACTS SINCE THE ISSUE S INVOLVED ARE PURELY LEGAL IN NATURE AND THE SAME READS AS UNDER: 1) THE ASSESSEE SUBMITS THAT IN THE INSTANT CASE, THE ASST. ORDER PASSED U/S.144 IS BAD IN LAW SINCE THE PROVISIONS OF SECTION 153C WERE APPLICABLE IN THE PRESENT CASE AND THEREFORE, ASST. PROCEEDINGS COMPLETED UNDER THE INCORRECT PROVISIONS OF SECTION 144 MAY BE DECLARED AS NULL AND VOID IN LAW. 2) THE ASSES SEE SUBMITS THAT THE PROVISIONS OF SECTION 50C WERE APPLICABLE ONLY IN RESPECT OF TRANSFER OF LAND OR BUILDING AND THE SAME WERE NOT ATTRACTED IN RESPECT OF TRANSFER OF DEVELOPMENT RIGHTS IN LAND AND THUS, THE A.O HAD WRONGLY MADE ADDITION IN THE INSTANT C ASE BY INVOKING THE PROVISIONS OF SECTION 50C IN RESPECT OF DEVELOPMENT AGREEMENT ENTERED INTO BY THE ASSESSEE. 3) THE LD. CIT(A) ERRED IN UPHOLDING THE FAIR MARKET VALUE OF THE IMPUGNED LAND AS ON 01.04.1981 ADOPTED BY THE AO WITHOUT APPRECIATING THAT THE SAID FAIR MARKET VALUATION WAS ARBITRARY AND INCORRECT ON THE FACTS OF THE CASE AND HENCE, THE FAIR MARKET VALUATION OF THE LAND AS ON 01.04.1981 AS CLAIMED BY THE ASSESSEE SHOULD HAVE BEEN ADOPTED FOR THE PURPOSES OF COMPUTING THE COST OF ACQUISITION OF THE SAID LAND. THE APPELLANT SUBMITS THAT THE ADDITIONAL GROUNDS RAISED ARE LEGAL IN NATURE AND AS ALL THE FACTS ARE ON RECORD, THE APPELLANT REQUESTS FOR ADMISSION OF THE ABOVE GROUNDS. 4. THE LD. DR DID NOT RAISE ANY OBJECTION WITH REGARD TO ADMISSION OF ADDITIONAL GROUND FOR ADJUDICATION. 5. HAVING HEARD THE SUBMISSIONS OF BOTH THE PARTIES HEREIN, WE FIND T HE ADDITIONAL GROUNDS RAISED BY THE ASSESSEE ARE LEGAL IN NATURE, HENCE, THE SAME IS ADMITTED IN LINE WITH THE DECISION OF HON'BLE SUPREME COURT OF INDIA IN THE CASE OF NTPC LTD. VS. CIT (SUPRA .) . 6. THAT STAR T ING HIS ARGUMENTS WITH REGARD TO THE FIRST ADDITIONAL GROUND, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN THIS CASE, THE ASSESSMENT HAS BEEN COMPLETED U/S.144 OF THE IN COME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) ON THE BASIS OF INCRIMINATING MATERIALS UNEARTH ED AT THE TIME OF S EARCH ACTION IN THE PREMISES OF A THIRD PARTY. THAT IT IS SETTLED POSITION OF 4 ITA NO. 1710/PUN/2014 A.Y. 2007 - 08 LAW WHENEVER INCRIMINATING MATERIALS ARE FOUND IN CONS EQUENT OF SEARCH PROCEEDINGS IN THE PREMISES OF A THIRD PARTY IN RELATION TO THE ASSESSEE, IN SUCH SCENARIO, ASSESSMENT FOR THE ASSESSEE SHOULD BE COMPLETED U/S.153C OF THE ACT AND NOT U/S.144 OF THE ACT. IN THIS CASE, THE ASSESSING OFFICER RESORTED TO BES T JUDGMENT ASSESSMENT U/S.144(1)(A) OF THE ACT WHEREIN IF ANY PERSON FAILS TO MAKE THE RETURN REQUIRED UNDER SUB SECTION (1) OF SECTION 139 AND HAS NOT MADE A RETURN OR A REVISED RETURN UNDER SUB SECTION (4) OR SUB SECTION (5) OF THAT SECTION.. IN THE INSTANT CASE, THE ASSESSEE HAS NOT FILED ANY RETURN OF INCOME AND THE ASSESSING OFFICER HAD RESORTED TO BEST JUDGMENT ASSESSMENT. 7. NOW REFERRING TO THE SUBMISSIONS MADE BY THE LD. COUNSEL FOR THE ASSESSEE, THE LD. DR SUBMITTED THAT THERE IS LETTER FROM ADIT, NASHIK TO ASSESSING OFFICER OF THE ASSESSEE THAT CERTAIN INCRIMINATING TRANSACTIONS, INFORMATION IN RELATION TO THE ASSESSEE WER E FOUND OUT IN COURSE OF SEARCH ACTION HELD AT THE PREMISES OF ONE SHRI BHUPENDRA SHAH, PROPRIETOR OF M/S. BHAVIK DEVELOPERS, NASHIK. IT WAS SUBMITTED BY THE LD. DR THAT ADIT, NASHIK IS NOT THE ASSESSING OFFICER OF THE SEARCHED PARTY. WE FIND THAT IN ORDER TO APPLY SECTION 153C OF THE ACT IN THE FACTS OF THE PRESENT CASE, THE REQUIREMENT OF THE SAID PROVISIONS HAS TO BE FULFILLED FIRST IN ORDER TO TRIGGER THE SAID PROVISIONS OF SECTION 153C OF THE ACT. THE REQUIREMENT OF SECTION 153C IS ABSOLUTELY CLEAR THA T IT HAS TO BE THE ASSESSING OFFICER OF THE SEARCHED PARTY WHO WILL HAND OVER THE INCRIMINATING MATERIALS/DOCUMENTS ETC. FOUND DURING THE SEARCH ACTION IN THE PREMISES OF THE THIRD PARTY TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH PERSON IN RELA TION TO WHOM THOSE INFORMATION/DOCUMENTS WERE FOUND. IN THIS CASE, IT IS THE ASSESSEE. HOWEVER, SUCH IS NOT THE POSITION SINCE IN THE INSTANT CASE BEFORE US, ADIT, NASHIK HAD REPORTED THESE INFORMATION S TO THE ASSESSING OFFICER OF THE ASSESSEE AND HE IS 5 ITA NO. 1710/PUN/2014 A.Y. 2007 - 08 NO T THE ASSESSING OFFICER OF SUCH SEARCHED PARTY AND HENCE, REQUIREMENT OF PROVISIONS OF SECTION 153C OF THE ACT IS NOT FULFILLED IN THIS CASE. 8. ON THE OTHER HAND, WHEN NO RETURN WAS FILED BY THE ASSESSEE SECTION 144(1)(A) OF THE ACT WAS ALREADY TRIGGERED AND THEREFORE, THE ASSESSING OFFICER HAS CORRECTLY RESORTED TO COMPLETE ASSESSMENT U/S.144 OF THE ACT. WE ALSO FIND THAT IN THE NON OBSTANTE CLAUSE IN SECTION 153A OF THE ACT, SECTION 144 IS NOT MENTIONED. THUS, ADDITIONAL GROUND NO.1 RAISED IN APPEAL BY THE ASSESSEE IS DISMISSED. 9. ADDITIONAL GROUND NO.2 IS WITH REGARD TO THE CONTENTION OF THE ASSESSEE THAT THE PROVISIONS OF SECTION 50C OF THE ACT, WERE APPLICABLE ONLY IN RESPECT OF TRANSFER OF LAND OR BUILDING AND THE SAME WERE NOT ATTRACTED IN RESPECT OF TRANSFER OF DEVELOPMENT RIGHTS IN LAND AND THUS, THE ASSESSING OFFICER HAD WRONGLY MADE ADDITION IN THE INSTANT CASE BY INVOKING THE PROVISIONS OF SECTION 50C OF THE ACT IN RESPECT OF DEVELOPMENT AGREEMENT ENTERED INTO BY THE ASSESSEE. 10. BRIE FLY ONCE AGAIN THE FACTS OF THE PRESENT CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND BASICALLY A HOUSEWIFE FROM AGRICULTURIST FAMILY. THE ASSESSEE HAD NOT FILED ANY RETURN OF INCOME FOR THE YEAR UNDER APPEAL AND THAT SHE HAD ENTERED INTO A DEVELOPMENT A GREEMENT WITH SHRI ABHIJIT D. NAGPURE ON 18.04.2006 FOR DEVELOPMENT OF HER IMMOVABLE PROPERTY AT SURVEY NO.14/1A/3, ANANDWALLI FOR RS.36 LACS. THERE WAS SEARCH ACTION U/S.132 OF THE ACT AGAINST ONE SHRI BHUPENDRA SHAH, PROPRIETOR OF M/S. BHAVIK DEVELOPERS, NASHIK ON 08.02.2008. FROM SUCH SEIZED DOCUMENTS, THE AFORESAID TRANSACTIONS OF THE ASSESSEE ENTERING INTO DEVELOPMENT AGREEMENT WITH SHRI NAGPURE WAS EVIDENT. THAT SHRI NAGPURE IS AN EMPLOYEE OF M/S. BHAVIK DEVELOPERS, PROPRIETOR OF SHRI BHUPENDRA S. SHA H. THE ASSESSING 6 ITA NO. 1710/PUN/2014 A.Y. 2007 - 08 OFFICER EXAMINED DEVELOPMENT AGREEMENT WHICH WAS REGISTERED WITH THE SUB - REGISTRAR, NASHIK - 3 AND FOUND THAT AS PER THE SAID DEVELOPMENT AGREEMENT, MORE PARTICULARLY AS PER CLAUSE - 4, THE ASSESSEE HAD GIVEN THE POSSESSION OF THE LAND/PROPER TY TO THE DEVELOPER I.E. SHRI ABHIJIT DEELIP NAGPURE ON 18.04.2006. THE ASSESSING OFFICER , THEREFORE , CONCLUDED THAT THE CAPITAL GAIN ON THE TRANSFER OF THE RIGHTS IN THE SAID PROPERTY AS PER THE REGISTERED AGREEMENT WAS LIABLE TO BE TAXED IN THE ASSESSME NT YEAR 2007 - 08. 11. THE ASSESSING OFFICER COMPLETED EX - PARTE ASSESSMENT U/S.144 OF THE ACT BY INVOKING PROVISIONS OF SECTION 50C OF THE ACT BY ADOPTING THE VALUE OF THE PROPERTY AT RS.70 LACS I.E. THE VALUE ADOPTED FOR PAYMENT OF THE STAMP DUTY AT THE T IME OF REGISTRATION OF THE DEVELOPMENT AGREEMENT. THE ASSESSING OFFICER DETERMINED THE LONG TERM CAPITAL GAIN OF RS.62,21,500/ - AFTER GIVING THE BENEFIT OF COST OF ACQUISITION. 12. THAT BEFORE THE LD. CIT(APPEAL), THE ASSESSEE HAD FILED DETAILED WRITTEN SUBMISSIONS AND CRUX OF SUCH SUBMISSIONS WAS THAT THE ASSESSEE HAD NOT RECEIVED MOST OF THE CONSIDERATION AGREED AT RS.36 LACS AND HENCE, THERE WAS DISPUTE IN THE COURT IN RESPECT OF THE SAID DEVELOPMENT AGREEMENT. THE CHEQUES GIVEN BY SHRI NAGPURE HAS BEE N BOUNCED. AFTER PROLONGED LITIGATION THE CONSIDERATION WAS RECEIVED BY THE ASSESSEE IN FINANCIAL YEAR 2009 - 10 RELEVANT TO ASSESSMENT YEAR 2010 - 11. THEREAFTER, THE POSSESSION OF THE LAND WAS IN FACT GIVEN TO SHRI NAGPURE IN FINANCIAL YEAR 2009 - 10 AFTER REC EIVING THE CONSIDERATION. 12.1 THAT IT WAS OBSERVED BY THE LD. CIT(APPEAL) THEREAFTER THAT THE ASSESSEE HAD SIMPLY REITERATED HER SUBMISSIONS THAT SHE WAS STAYING THERE AND HAD GIVEN POSSESSION AFTER RECEIVING THE ENTIRE AMOUNT OF THE SALE CONSIDERATION ONLY IN ASSESSMENT YEAR 2010 - 11. THE CONTENTION OF THE ASSESSEE WAS WITHOUT 7 ITA NO. 1710/PUN/2014 A.Y. 2007 - 08 ANY SUPPORTING EVIDENCES. IT WAS ALSO OBSERVED BY THE LD. CIT(APPEAL) THAT AS PER DEVELOPMENT AGREEMENT DATED 18.04.2006, THE ENTIRE CONSIDERATION OF RS.36 LACS WAS PAID AS ON 18.0 4.2006. THAT INST E AD OF PROVIDING ANY LEGALLY ACCEPTABLE DOCUMENTARY EVIDENCE TO PROVE THAT THE ASSESSEE HAD GIVEN POSSESSION IN ASSESSMENT YEAR 2010 - 11 THE ASSESSEE HAD BEEN RELYING ON CONFIRMATIONS/AFFIDAVITS OF THE NEIGHBOR WHO MAY NOT BE AWARE OF THE C OMPLETE FACTS OF THE CASE. 12.2 THAT SUMMONS WAS ALSO ISSUED U/S.131 OF THE ACT BY THE LD. CIT(APPEAL) TO SHRI ABHIJIT D. NAGPURE ASKING HIM TO APPEAR BEFORE HIM AND THE SUMMONS/NOTICES WAS COMPLIED WITH BY SHRI NAGPURE WHO ATTENDED HEARING BEFORE THE LD . CIT(APPEAL) ON 07.03.2014 AND FURNISHED A LETTER ON THAT SAME DATE IN WHICH HE HAS CLEARLY MENTIONED THAT POSSESSION OF THE PROPERTY UNDER REFERENCE WAS TRANSFERRED TO HIM ON THE DATE OF THE REGISTRATION OF THE DEVELOPMENT AGREEMENT BETWEEN HIM AND THE A SSESSEE. THEREAFTER, THE LD. CIT(APPEAL) AT PARA 6.3, 6.4 HAS BROUGHT OUT REASONS FOR NOT ACCEPTING THE CLAIM OF THE ASSESSEE THAT AS PER REASONING PROVIDED THEREIN, THE LD. CIT(APPEAL ) CAME TO THE CONCLUSION THAT THE TRANSFER OF POSSESSION OF THE LAND WAS GIVEN TO SHRI NAGPURE ON THE VERY DATE OF REGISTRATION OF THE DEVELOPMENT AGREEMENT AND SHRI ABHIJIT D NAGPURE HAD ALSO FURNISHED A LEDGER ACCOUNT OF THE ASSESSEE IN THE BOOKS OF ACCOUNT OF M/S. BHAVIK DEVELOPERS, PROP. SHRI BHUPENDRA S. SHAH AND BANK ST ATEMENT OF M/S. BHAVIK DEVELOPERS IN PIMPALGAON MERCHANTS CO - OP BANK LTD. WHICH SHOWED THE DETAILS OF PAYMENT OF ALL CHEQUES DURING THE ASSESSMENT YEAR 2007 - 08 ONLY. 12.3 THE LD. CIT(APPEAL ) REFERRED THE MATTER ALSO TO DVO FOR PROPER VALUATION WHO HAD VALUED THE PROPERTY AT RS.64,50,000/ - . IN THE VALUATION REPORT DATED30.04.2011, THE VALUATION OFFICER HAD ALSO GIVEN COMPLETE DETAILS 8 ITA NO. 1710/PUN/2014 A.Y. 2007 - 08 OF THE VARIOUS OBJECTIONS RAISED BY THE ASSESSEE AND THE RE PLY FURNISHED TO THE ASSESSEE WITH REGARD TO THE SAID OBJECTIONS. AFTER TAKING INTO CONSIDERATION, ALL THE RELEVANT FACTS AND OBJECTIONS OF THE ASSESSEE, THE DVO VALUED THE PROPERTY AT RS.64,50,000/ - AND THE ASSESSING OFFICER WAS DIRECTED BY THE LD. CIT(AP PEAL) TO RECALCULATE LTCG BY APPLYING THE PROVISIONS OF SECTION 50C OF THE ACT BY TAKING SALE CONSIDERATION OF RS.64,50,000/ - AS DETERMINED BY THE DVO AND NOT AT RS.70 LACS WHICH WAS THE VALUE OF THE PROPERTY FOR STAMP DUTY PURPOSES AS PER THE DEVELOPMENT AGREEMENT AND ACCORDINGLY, TAX THE CAPITAL GAIN IN ASSESSMENT YEAR 2007 - 08 AND THUS, PROVIDING PARTIAL RELIEF TO THE ASSESSEE. 13. AT THE TIME OF HEARING BEFORE US, THE LD. AR FOR THE ASSESSEE VEHEMENTLY OPPOSED THE FINDINGS OF THE SUB - ORDINATE AUTHORITIE S AND REITERATED HIS SUBMISSIONS MADE BEFORE THEM AND CONTENDED THAT SECTION 50C OF THE ACT IS NOT APPLICABLE IN THE CASE OF THE ASSESSEE FOR THE REASONS THAT TH ERE HAS NOT BEEN ANY TRANSFER OF CAPITAL ASSET, LAND OR BUILDING ETC. IN FAVOUR OF THE DEVELOPE R BY THE ASSESSEE AND WHAT WAS TRANSFERRED WAS ONLY DEVELOPMENT RIGHTS TO DEVELOP THE PROPERTY. THE OWNERSHIP OF THE LAND STILL BELONG ED TO THE ASSESSEE. THE LD. AR BROUGHT TO OUR NOTICE THE DEVELOPMENT AGREEMENT DATED 18.04.2006 ENTERED INTO BY THE DEVEL OPER, SHRI ABHIJIT DILEEP NAGPURE AND THE ASSESSEE WHICH HAS BEEN ANNEXED IN THE PAPER BOOK FILED BEFORE US. 14. THAT IN THE SAID DEVELOPMENT AGREEMENT, SPECIFICALLY CLAUSE 10 UNDER THE HEAD RECORDS OF RIGHTS, IT IS SPECIFICALLY MENTIONED THAT OWNERSHI P OF THE ABOVE PROPERTY IS STILL REGISTERED IN THE NAME OF SHRI BABURAO GANGARAM JADHAV. THIS CLAUSE HAS TO BE READ WITH CLAUSE 2, BACKGROUNDS OF THE FACTS HAS BEEN STATED WHEREIN IT IS MENTIONED THAT THE SAID PROPERTY WAS ORIGINALLY OWNED BY SHRI BABURAO GANGARAM JADHAV. THE ASSESSEE IS WIFE OF SHRI BABURAO GANGARAM JADHAV. SHE HAS FILED SUIT NO.35/ 9 6 IN THE CIVIL COURT, 9 ITA NO. 1710/PUN/2014 A.Y. 2007 - 08 NASHIK. AS PER THE ORDER PASSED BY THE HONBLE CIVIL COURT, SHRI BABURAO JADHAV AND THE ASSESSEE HAVE REACHED TO A COMPROMISE WHICH WAS V ETTED BY THE HONBLE CIVIL COURT BY PASSING AN ORDER TO THAT EFFECT. AS PER THE ORDER PASSED BY THE HONBLE CIVIL COURT AND AGREED COMPROMISE DEED, SHRI BABURAO JADHAV HAD TRANSFERRED ALL THE RIGHTS IN THE ABOVE PROPERTY IN THE NAME OF THE ASSESSEE. AS PER THE SAID ORDER, THE NAME OF THE ASSESSEE HAS BEEN ENTERED INTO RECORD OF RIGHTS VIDE MUTATION ENTRY NO.5225. 15. SIMILARLY IN THE PROTECTION CLAUSE OF THE SAID DEVELOPMENT AGREEMENT WHEREIN IT IS STATED THAT THE RESPONSIBILITY OF THE DEVELOPER TO PROTECT THE SAID PROPERTY, THE POSSESSION OF THE SAID PROPERTY AS WELL AS TO PROTECT THE OWNERSHIP RIGHTS OF THE OWNER/SECOND PARTY (ASSESSEE) IN THE SAID PROPERTY. AND TO PERFORM ALL SUCH ACTS. FOR THE PURPOSES OF PROTECTING THE POSSESSION OF THE PROPERTY AND OWNERSHIP RIGHTS OF THE SECOND PARTY VESTED THEREIN. FURTHERMORE, CLAUSE 4 OF THE SAID DEVELOPMENT AG REEMENT WHICH DEALS WITH POSSESSION OF THE PROPERTY ON THE BASIS OF WHICH ADDITION OF CAPITAL GAIN HAS BEEN INITIATED BY SUB - ORDINATE AUT HORITIES U/S.50C OF THE ACT , IT CLEARLY STATES THAT THE OWNER I.E. THE ASSESSEE HAS HANDED OVER THE ACTUAL POSSESSION OF THE SAID PROPERTY TO THE DEVELOPER FOR THE PURPOSES OF CARRYING OUT DEVELOPMENT WORK ON THE SAID PROPERTY ON LICENSE BASIS. THAT IT IS ALSO MENTIONED, THE OWNER HAS GIVEN THE DEVELOPER THE RIGHT TO DEVELOP THE PROPERTY AND UNDERTAKE CONSTRUCTION ON THE SAID PROPERTY. 16. WE FIND THIS CLAUS E DOES NOT SAY ANYTHING ABOUT ANY CHANGE OF OWNERSHIP FROM THE ASSESSEE TO THE DEVELOPER. THERE IS A LSO NO MENTION OF ANY REGISTERED DOCUMENTS WITH THE CONCERNED AUTHORITY BEING FILED TO SUGGEST THAT OWNERSHIP HAS BEEN TRANSFERRED BY THE ASSESSEE IN FAVOUR OF THE DEVELOPER. IT IS MERELY A TRANSFER OF DEVELOPMENT RIGHTS TO THE DEVELOPER AND THAT TO ON 10 ITA NO. 1710/PUN/2014 A.Y. 2007 - 08 LIC ENSE BASIS. THE CHARACTERISTIC OF LICENSE IN LEGAL JURISPRUDENCE IS ONE THAT IT CAN BE CANCELLED AND TERMINATED AT ANY POINT OF TIME BY THE OWNER AND IT DOES NOT CONFER PERMANENT RIGHT OVER THE PROPERTY ETC. IF SUCH LICENSE IS ISSUED. THAT AT CLAUSE 13 OF THE SAID DEVELOPMENT AGREEMENT, IT IS MENTIONED THAT THE ASSESSEE HAS GIVEN IRREVOCABLE LICENSE TO DEVELOP OR UNDERTAKE CONSTRUCTION. THIS IS A COMMON FORMAT WHEREIN THE DEVELOPER RIGHTS ALSO PROTECTED, AS HE IS INVESTING FOR THE SAID CONSTRUCTION AND IF T HE LICENSE IS REVOKED BY THE OWNER THEN THE DEVELOPER RIGHTS WOULD BE JEOPARDIZED. THIS IS THE STANDARD FORMAT IN THE DEVELOPMENT AGREEMENT WHEN DEVELOPMENT RIGHTS HAVE BEEN TRANSFERRED IN FAVOUR OF THE DEVELOPE R ON THE BASIS OF THE LICENSE, I T HAS TO BE A N IRREVOCABLE LICENSE FOR SUCH DEVELOPMENT PURPOSES . 17. THE LD. AR HAD ALSO REFERRED TO THE RIGHT TO FAIR COMPENSATION AND TRANSPARENCY IN LAND ACQUISITION REHABILITATION AND RE - SETTLEMENT ACT, 2013 WHICH IS ALSO ANNEXED IN THE PAPER BOOK AND THEREIN IN THE DEFINITION PART I.E. SECTION 3(R) DEFINES THE LAND OWNER. IT GIVES THERE DEFINITION STATING THAT THE LAND OWNER INCLUDES ANY PERS ON WHOSE NAME IS RECORDED AS THE OWNER OF THE LAND OR BUILDING OR PART THEREOF, IN THE RECORDS OF THE AUTHORITY CONCERNED. IF ANY LAND ACQUISITION TAKES PLACE THEN COMPENSATION WOULD BE GIVEN ONLY TO THE OWNER OF THE LAND AS ACCORDING TO SECTION 3(R) OF THE SAID LAND ACQUISITION ACT. IN THIS CASE, IN THE DEVELOPMENT AGREEMENT ITSELF IN THE RECORD OF RIGHTS, WE HAVE EXAMINED THE PROPERTY IS STILL REGISTERED IN THE NAME OF THE HUSBAND OF THE ASSESSEE VIDE MUTATION ENTRY NO.5225 AND THE COMPROMISE DEED ENTER ED INTO EARLIER BET WEEN HUSBAND AND THE ASSESSEE, T HE RECORDS OF RIGHTS IS NOW IN THE NAME OF THE ASSESSEE . THEREFORE, THERE HAS NOT BEEN ANY TRANSFER OF OWNERSHIP OF THE PROPERTY IN FAVOUR OF THE DEVELOPER BY THE ASSESSEE. 11 ITA NO. 1710/PUN/2014 A.Y. 2007 - 08 18. THE STARTING LINE OF SECT ION 50C OF THE ACTS STATES THAT WHERE THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET, BEING LAND OR BUILDING OR BOTH.. . THEREFORE, THE SAID PROVISION SPEAKS OF TRANSFER OF CAPITAL ASSET AND NOT TRANSFER OF DEVELOPMENT RIGHTS AS HAS TAKEN PLACE IN THIS CASE. WE HAVE ALSO EXAMINED THAT CLAUSE 4 OF THE SAID DEVELOPMENT AGREEMENT WHICH TALKS OF TRANSFER OF POSSESSION THERE ALSO, NOTHING SUGGESTS EVEN IN FORM OF WHISPER THAT THERE HAS BEEN ANY CHANGE OF OWNERSHIP FROM THE ASSESSEE IN FAVOUR OF THE DEVELOPER. RATHER ON LICENSE BASIS, THE DEVELOPER HAD BEEN AUTHORIZED TO CARRY OUT DEVELOPMENT WORK ON THE SAID PROPERTY. 19. THE LD. AR FOR THE ASSESSEE HAS ALSO CITED THE JUDGMENT OF THE HONBLE KARNATAK A HIGH COURT IN THE CASE OF V.S. CHANDRASHEKHAR VS. ACIT, ITA NO.70/2015 DATED 02.02.2021 WHEREIN AT PARA 11 OF THE SAID JUDGMENT, THE HONBLE HIGH COURT HAS DISCUSSED THE CIRCUMSTANCES OF APPLICABILITY OF SECTION 50C OF THE ACT. THE RELEVANT PORTION IS EX TRACTED AS FOLLOWS: 11. THUS, FROM PERUSAL OF THE AFORESAID PROVISIONS, IT IS AXIOMATIC THAT EXPLANATION 1 TO SECTION 2(47) USES THE TERM 'IMMOVABLE PROPERTY WHEREAS, SECTION 50C USES THE EXPRESSION 'LAND' INSTEAD OF IMMOVABLE PROPERTY. IT IS ALSO PERTINENT TO MENTION THAT WHEREVER THE LEGISLATURE INTENDED TO EXPAND THE MEANING OF THE LAND TO INCLUDE RIGHTS OR INTERESTS IN LAND, IT HAS SAID SO SPECIFICALLY VIZ ., SECTION 35(1)(A), SECTION 54G(1), SECTION 54GA(1) AND SECTION 269UA(D) AND EXPLANATION TO SECTION 155(5A). THUS, SECTION 50C APPLIES ONLY IN CASE OF A TRANSFEROR OF LAND WHICH IN THE INSTANT CASE IS M/S NAMASTE EXPORTS AND NOT THE ASSESSEE WHO WAS ONLY A CONSENTING PARTY AND NOT A TRANSFEROR / CO - OWNER OF THE PROPERTY. UNDOUBTEDLY, THE ASSESSEE HAD CERTAIN RIGHTS UNDER THE AGREEMENT, HOWEVER, FROM THE CLEAR PLAIN AND UNAMBIGUOUS LANGUAGE EMPLOYED IN SECTION 50C, IT IS EVIDENT THAT THE SAME DOES NOT APPLY TO A CASE OF RIGHTS IN LAND. IT IS EQUALLY WELL SETTLED RULE OF STATUTORY INTERPRETATION WITH REGARD TO TAXING STATUTE THAT AN ASSESSEE CANNOT BE TAXED WITHOUT CLEAR WORDS FOR THAT PURPOSE AND EVERY ACT OF THE PARLIAMENT HAS TO BE READ AS PER ITS NATURAL CONSTRUCTION OF WORDS. FOR THE AFOREMENTIONED REASONS, IN OUR CONSIDERED OPINION, THE PROVISIONS OF SECTION 50(C) ARE NOT APPLICABLE TO THE CASE OF THE ASSESSEE 12 ITA NO. 1710/PUN/2014 A.Y. 2007 - 08 THAT AS EVIDENT FROM THE AFORESAID JUDGMENT, SECTION 50C OF THE ACT APPLIES ONLY IN THE CASE OF TRANSFER OF LAND AND DOES NOT APPLY TO THE CASE OF RIGHTS IN LAND. THEREFORE, TAKING THE TOTALITY OF FACTS AND CIRCUMSTANCES, WE ARE OF THE CONSIDERED VIEW, IN THE CASE OF THE ASSESSEE APPLICABILITY OF SECTION 50C OF THE ACT IS NOT TRIGGERED . THUS , ADDITIONAL GROUND NO.2 RAISED IN APPEAL BY THE ASSESSEE IS ALLOWED. 20. ADDITIONAL GROUND NO.3 IS WITH REGARD TO THE CONTENTION OF THE A SSESSEE THAT THE LD. CIT(APPEAL ) HAD ERRED IN UPHOLDING THE FAIR MARKET VALUE OF THE IMPUGNED LAND AS ON 01.04.1981 ADOPTED BY THE ASSESSING OFFICER WITHOUT APPRECIATING THAT THE SAID FAIR MARKET VALUATION WAS ARBITRARY AND INCORRECT ON THE FACTS OF THE CASE AND HENCE, THE FAIR MARKET VALUATION OF THE LAND AS ON 01.04.1981 AS CLAIMED BY THE ASSESSEE SHOULD HAVE BEEN AD OPTED FOR THE PURPOSES OF COMPUTING THE COST OF ACQUISITION OF THE SAID LAND. 21. THE LD. AR FOR THE ASSESSEE APART FROM REITERATING THE SUBMISSIONS MADE BEFORE THE SUB - ORDINATE AUTHORITIES, VEHEMENTLY SUBMITTED THAT THE ASSESSING OFFICER HAD ADOPTED FAIR MARKET VALUE ON AD - HOC BASIS AND HE REFERRED PARA 4 OF THE ASSESSING OFFICERS ORDER WHEREIN THE ISSUE HAD BEEN DISCUSSED. 22. THE LD. CIT(APPEAL) ON THE OTHER HAND DISCUSSED THE ISSUE AT PARA 7 OF HIS ORDER. THE LD . AR FOR THE ASSESSEE SUBMITTED THAT BEFORE THE LD. CIT(APPEAL) IN THE WRITTEN SUBMISSIONS FILED, THE ASSESSEE HAS GIVEN BASIS OF THE CALCULATION OF THE FAIR MARKET VALUE OF THE LAND. WE HAVE GONE THROUGH THE SUBMISSIONS MADE IN THIS REGARD BY THE ASSESSEE BEFORE THE LD. CIT(APPEAL) AND OTHER RELEVANT RECORDS/DOCUMENTS AND WE FIND THAT AS LIKE THE ASSESSING OFFICER EVEN THE ASSESSEE HAS NOT BROUGHT OUT ANY COGENT REASON OR ANY LOGICAL BASIS FOR SUCH DETERMINATION OF THE FAIR MARKET VALUE. ALTERNATIVELY, IT 13 ITA NO. 1710/PUN/2014 A.Y. 2007 - 08 WAS PRAYED BY THE LD. AR FOR THE ASSESSEE THAT THE ISSUE MAY BE RESTORE TO THE FILE OF THE ASSESSING OFFICER FOR FRESH DETERMINATION OF THE FAIR MARKET VALUE AND THAT THE ASSESSEE MAY BE GIVEN ANOTHER OPPORTUNITY IN THIS REGARD. 23. THE LD. DR DID NOT RAISE ANY OBJECTION WITH REGARD TO THE SUBMISSIONS PUT FORTH BY THE LD. AR OF THE ASSESSEE. 24. HAVING HEARD THE PARTIES, WE ARE OF THE CONSIDERED VIEW, IN THE INTEREST OF JUSTICE THAT THE FAIR MARKET VALUE OF THE LAND HAS TO BE ADOPTED ON A REASONABLE BA SIS AND IT MUST BE REFLECTED FROM THE ORDER OF THE ASSESSING OFFICER ITSELF. REASONS BEHIND SUCH DETERMINATION OF THE FAIR MARKET VALUE SHOULD BE CLEARLY SPELLED OUT IN THE ORDER. THEREFORE, WE SET ASIDE THE ORDER OF THE LD. CIT(APPEAL ) ON THIS ISSUE AND R ESTORE THE SAME TO THE FILE OF THE ASSESSING OFFICER FOR ADJUDICATION AS PER LAW COMPLYING WITH THE PRINCIPLES OF NATURAL JUSTICE. THUS, ADDITIONAL GROUND NO.3 RAISED IN APPEAL BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 25. COMING TO THE GROUNDS OF APPEAL IN THE APPEAL MEMO FILED BY THE ASSESSEE, AT THE VERY OUTSET, THE LD. AR FOR THE ASSESSEE SUBMITTED THAT GROUND NO.5 IS GENERAL IN NATURE AND HENCE, REQUIRES NO ADJUDICATION. 26. GROUND NO.4 PERTAINS TO CONDONATION OF DELAY WHICH HAS ALREADY BE EN CONDONED AT THE VERY OUTSET. IN EFFECT THEREBY, GROUND N O.4 RAISED IN GROUNDS OF APPEAL IN APPEAL MEMO IS ALLOWED. 27. THE LD. AR FOR THE ASSESSEE SUBMITTED THAT HE IS NOT PRESSING GROUND NO.2 AND 3 AND IN VIEW THEREOF, GROUND NO.2 AND 3 RAISED IN GROUNDS OF APPEAL IN APPEAL MEMO ARE DISMISSED AS NOT PRESSED. 14 ITA NO. 1710/PUN/2014 A.Y. 2007 - 08 28. THE ONLY EFFECTIVE GROUND REMAINED IS GROUND NO.1 IN WHICH THE ASSESSEE SUBMITTED THAT THE LD. CIT(APPEAL) WAS NOT JUSTIFIED IN DIRECTING THE ASSESSING OFFICER TO RECALCULATE L TCG BY APPLYING PROVISIONS OF SECTION 50C OF THE ACT BY ADOPTING SALE CONSIDERATION OF RS.64,50,000/ - AS DETERMINED BY DVO IN HIS VALUATION REPORT. FURTHER IT WAS SUBMITTED BY THE ASSESSEE THAT THE CONSIDERATION BEING AS PER AGREED CONSIDERATION, THE SAME BE ACCEPTED. 29. NOW ON THIS GROUND, GENERAL FACTS OF THE CASE WE HAVE ALREADY DISCUSSED WHILE ADJUDICATING ADDITIONAL GROUND NO.2. THAT FURTHER FACTS BROUGHT ON RECORD AT PARA 6.1 OF THE LD. CIT( APPEAL)S ORDER WHEREIN IT IS BROUGHT OUT THAT THE ASSESSEE ENTERED INTO DEVELOPMENT AGREEMENT WITH SHRI NAGPURE ON 18.04.2006 AND THROUGH THIS DEVELOPMENT AGREEMENT, THE ASSESSEE HAS TRANSFERRED HER DEVELOPMENT RIGHTS OF THE LAND IN FAVOUR OF THE DEVELOPE R WHICH WE HAVE ALREADY ANALYZED WHILE ADJUDICATING THE APPLICABILITY OF SECTION 50C OF THE ACT. WE HAVE EXAMINED THAT THROUGH THIS DEVELOPMENT AGREEMENT ONLY THE DEVELOPMENT RIGHTS OF THE LAND HAD BEEN TRANSFE R R ED TO THE DEVELOPER, FOR WHICH, SECTION 50C OF THE ACT WAS NOT APPLICABLE AS OWNERSHIP OF THE LAND WAS STILL WITH THE ASSESSEE. THEREAFTER, THE ASSESSEE ENTERED INTO A SATHEKAT AGREEMENT ON 16.04.2008 WITH ONE SMT. SANGEETA BHUPENDRA SHAH WIFE OF SHRI BHUPENDRA S. SHAH, PROPRIETOR OF M/S. BHAVIK DE VELOPERS IN RESPECT OF THE SAID LAND /PROPERTY AT S NO.14/1A/3 FOR RS.36 LACS. 30. IT WAS CONTENDED BY THE LD. AR FOR THE ASSESSEE THAT WHEN THE ASSESSEE ENTERED INTO DEVELOPMENT AGREEMENT DATED 18 .04.2006, THAT TIME THE ASSESSEE HAD RECEIVED RS.36 LAKHS AND THEREAFTER, WHEN THE ASSESSEE TRANSFERRED HER OWNERSHIP RIGHTS ALSO AS PER THE SALE DEED AGREEMENT DATED 24.02.2009 THAT WAS WITHIN THE SAID AMOUNT ALREADY RECEIVED BY THE ASSESSEE I.E. 36 LACS. MEANING THEREBY, THE ASSESSEE HAS NOT RECEIVED ANY AMOUN T IN 15 ITA NO. 1710/PUN/2014 A.Y. 2007 - 08 THE YEAR WHEN SHE HAD TRANSFERRED OWNERSHIP RIGHTS TO THE DEVELOPER IN THE FINANCIAL YEAR 2008 - 09 RELEVANT TO ASSESSMENT YEAR 2009 - 10. NOW WE FIND THAT FOR A LAND OWNER THERE ARE ALWAYS TWO COMPONENTS I.E. (I) OWNERSHIP RIGHTS AND (II) DEVELOPMENT RIG HTS IN RESPECT OF THE LAND. 31. WE HAVE EXAMINED THAT DEVELOPMENT RIGHTS WERE PARTED AWAY WITH BY THE ASSESSEE THROUGH DEVELOPMENT AGREEMENT DATED 18.04.2006 . ADMITTEDLY, THE ASSESSEE RECEIVED ONLY RS.36 LAKHS WHICH COVERED NOT ONLY THE CONSIDERATION FOR TRANSFER OF DEVELOPMENT RIGHTS ON 18.04.2006 BUT ALSO FOR TRANSFER OF OWNERSHIP RIGHTS IN THE YEAR 2009. THE YEAR UNDER CONSIDERATION HAS ONLY RELEVANCE WITH THE TRANSFER OF DEVELOPMENT RIGHTS, IN RESPECT OF WHICH SECTION 50C OF THE ACT HAS BEEN HELD SUPRA TO BE NOT APPLICABLE. IN THAT VIEW OF THE MATTER, THE COMPUTATION OF CAPITAL GAIN FOR THE EXTANT YEAR HAS TO BE DONE U/S 48 OF THE ACT SANS PROVISIONS OF SECTION 50C OF THE ACT. AS REGARDS THE TRANSFER OF OWNERSHIP RIGHTS IN THE YEAR 2009, THE CAPIT AL GAINS ON SUCH TRANSFER CAN BE THE SUBJECT MATTER OF CONSIDERATION BY THE AO ONLY FOR SUCH LATER YEAR AND NOT UNDER THE YEAR IN QUESTION. THUS, THE GROUND NO.1 TAKEN IN THE MEMORANDUM OF APPEAL CHALLENGING THE ADOPTION OF STAMP VALUE AS FULL VALUE OF CO NSIDERATION IS HEREBY ALLOWED. 32 . IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRO NOUNCED ON 17 TH DAY OF SEPTEMBER , 20 2 1 . SD/ - SD/ - R.S.SYAL PARTHA SARATHI CHAUDHURY VICE PRESIDENT JUDICIAL MEMBER / PUNE; / DATED : 17 TH SEPTEMBER , 202 1 . SB 16 ITA NO. 1710/PUN/2014 A.Y. 2007 - 08 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(APPEAL) - 1, NASHIK. 4. THE CIT - 1, NASHIK. 5. , , , / DR, ITAT, B BENCH, PUNE. 6. / GUARD FILE. / BY ORDER, // TRUE COPY // / PRIVATE SECRETARY , / ITAT, PUNE . 17 ITA NO. 1710/PUN/2014 A.Y. 2007 - 08 DATE 1 DRAFT DICTATED ON 16.09.2021 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 1 6 .0 9 .202 1 SR.PS/PS 3 DRAFT PROPOSED AND PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/JM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7 DATE OF UPLOADING OF ORDER SR.PS/PS 8 FILE SENT TO BENCH CLERK SR.PS/PS 9 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 10 DATE ON WHICH FILE GOES TO THE A.R 11 DATE OF DISPATCH OF ORDER