MAHESH MATADIN VERMA, Jaipur V. ITO, JHUNJHUNU

ITA 173/JPR/2015

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6140 (ITAT-JAIPUR)
• Duration Of Justice: 3 year(s) 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 23-02-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: NEENA JEPH JCIT DHK
• Keywords: Sale consideration of property below Jantri Value; Cost of acquisition; Difference of opinion; Reason to believe; Change of opinion
• Section: 50C; 147; 148

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH HKKXPAN] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, A M VK;DJ VIHY LA-@ ITA NO. 173/JP/2015 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2007-08 MAHESH MATADIN VERMA, RISHIPURA, GUDHAGOR JI, JHUNJHUNU. CUKE VS. I.T.O., WARD-1, JHUNJHUNU. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: BSEPM 5685 C VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL (CA) JKTLO DH VKSJ LS@ REVENUE BY : SMT. NEENA JEPH (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 15/05/2018 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 17/05/2018 VKNS'K@ ORDER PER: BHAGCHAND, A.M. THE APPEAL FILED BY THE ASSESSEE EMANATES FROM THE ORDER OF THE LD. CIT(A)-3, JAIPUR DATED 31/12/2014 FOR THE A.Y. 2 007-08. 2. IN THIS CASE, THE RETURN WAS FILED ON 03/11/2010 IN RESPONSE TO NOTICE U/S 148 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 30/8/2010 DECLARING INCOME AT RS. 65,000/-. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE ALONGWITH OTHER CO-OWNERS EXECUTED A SALE DEED IN THE OFFICE OF SUB-REGISTRAR, ANDHERI NO. 2, MUMBAI ON ITA 173 /JP/2015_ MAHESH MATADIN VERMA VS ITO 2 27/10/2006. THE STAMP DUTY AUTHORITY ADOPTED THE VA LUE OF PROPERTY AT RS. 2.5 CRORES FOR STAMP DUTY PURPOSES. THE ASSES SING OFFICER WORKED OUT THE LONG TERM CAPITAL GAIN AND ALSO GAVE BENEFIT OF INDEXATION ON THE COST OF ACQUISITION ADOPTED AS ON 01/4/1981 AND MADE THE ADDITION. THE LD. CIT(A) HAS DISMISSED THE APPEAL FILED BY THE ASSESSEE BOTH ON THE GROUND OF REOPENING THE ASSESS MENT AS WELL AS ON MERITS OF THE ADDITION. 3. NOW THE ASSESSEE IS IN APPEAL BEFORE THE ITAT BY T AKING FOLLOWING GROUNDS OF APPEAL: GROUNDS OF ASSESSEES APPEAL: 1. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN UPHOLDING THE VALIDITY OF THE ORDER PASSED BY THE AO U/S 147. 2. THE LD. C1T(A) HAS ERRED ON FACTS AND IN LAW IN UPHOLDING THE ACTION OF THE AO IN ASSESSING THE LONG TERM CAPITAL GAIN AT RS. 48,48.452/- IN RESPECT OF PROPERTY SARASWATI BHAVAN , SITUATED AT TEJPAL SCHEME, SAHAKAR ROAD, VILLE PARLE (EAST), MU MBAI, BY NOT ACCEPTING THE FOLLOWING CONTENTIONS OF THE ASSESSEE :- (A) THAT THE PROPERTY UNDER CONSIDERATION WAS TRA NSFERRED BY SMT. BHANWARI DEVI MOTHER OF ASSESSEE TO SMT. SUMAN SHRIPAD H. VIDE AGREEMENT DT. 27.09.1992 FOR RS. 18 LACS AND C APITAL GAIN WAS ASSESSED BY AO IN THE HANDS OF SMT. BHANWARI DE VI IN A.Y. 1993-94 AND ALSO ASSESSED IN A.Y. 1995-96 ON THE BA SIS OF RETURN FILED BY SMT. BHANWARI DEVI. (B) THAT THE CANCELLATION DEED DT. 16.03.2002 MA DE BY SMT. BHANWARI DEVI WAS NOT ACTED UPON AND ORIGINAL AGREE MENT WAS REVIVED BY AGREEMENT FOR DEVELOPMENT DT. 06.08.2002 WITH V.B. SPAN DEVELOPERS, ASSOCIATES OF ORIGINAL PURCHASER O N FURTHER CONSIDERATION OF RS. 2.50 LACS. ITA 173 /JP/2015_ MAHESH MATADIN VERMA VS ITO 3 (C) THAT SMT. BHANWARI DEVI EXPIRED ON 21.05.20 04 AND THEREFORE SALE-DEED WAS EXECUTED BY ASSESSEE ALONG WITH OTHER LEGAL REPRESENTATIVE OF LATE SMT. BHANWARI DEVI ON 27.10.2006 IN FAVOUR OF GOPAL GOVIND DICHOLKAR WHO ACQUIRED THE R IGHTS OF V.B. SPAN DEVELOPERS ON PAYMENT OF RS. 22 LACS TO IT AND RS. 2.50 LACS TO THE LEGAL HEIRS OF THE ASSESSEE IN TERMS OF AGRE EMENT DT. 06.08.2002. THUS THE SALE DEED IS IN CONTINUATION T O AND IN PURSUANCE OF THE ORIGINAL AGREEMENT DT. 27.09.1992 BY WHICH THE PROPERTY ALREADY STOOD TRANSFERRED BY SMT. BHANWARI DEVI U/S 2(47) (V) OF THE L.T. ACT, 1961 READ WITH SECTION 5 3A OF THE TRANSFER OF PROPERTY ACT, 1882 AND THEREFORE NO CAP ITAL GAIN IS ASSESSABLE IN THE HANDS OF ASSESSEE IN THE YEAR UND ER CONSIDERATION. (D) THAT APPLICATION OF SECTION 50C OF THE L.T. ACT, 1961 BY TREATING THE SALE CONSIDERATION OF THE PROPERTY AT RS.2.50 LACS ON THE BASIS OF STAMP VALUATION AUTHORITY, ASSESSEES SHARE THEREIN AT RS. 50 LACS AND ASSESSING THE GAIN IN HANDS OF T HE ASSESSEE IS NOT AS PER LAW. (E) THAT APPLICATION OF SECTION 50C WITHOUT REF ERENCE TO VALUATION OFFICER U/S 50C(2) IS ILLEGAL AND BAD IN LAW. 3. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN MAKING VARIOUS OBSERVATIONS WHICH ARE CONTRARY TO THE FACTS ON REC ORD AND THEREBY IN ASSESSING THE CAPITAL GAIN IN THE HANDS OF THE ASSESSEE IN THE YEAR UNDER CONSIDERATION AND ALSO ERRED IN I GNORING THE FACT THAT THE ASSESSEE HAS NOT INHERITED THE PROPERTY AS IT WAS ALREADY TRANSFERRED BY HIS MOTHER AND THAT THE ASSESSEE HAS EXECUTED THE SALE DEED ALONG WITH THE OTHER LEGAL HEIRS AS HIS M ORAL DUTY IN FULFILLMENT OF THE AGREEMENT MADE BY HIS MOTHER. 4. THE ASSESSEE CRAVES TO AMEND, ALTER AND MODIFY A NY OF THE GROUNDS OF APPEAL. 5. APPROPRIATE COST BE AWARDED TO THE ASSESSEE. 4. IN THE GROUND NO. 1 OF THE APPEAL, THE ISSUE INV OLVED IS UPHOLDING THE VALIDITY OF THE ORDER PASSED U/S 147 OF THE ACT BY THE ASSESSING ITA 173 /JP/2015_ MAHESH MATADIN VERMA VS ITO 4 OFFICER. THE LD. CIT(A) HAS DECIDED THIS ISSUE AGAINS T THE ASSESSEE AFTER CONSIDERING THE PLEADINGS OF THE ASSESSEE BY HOLDIN G AS UNDER: 5.3 I HAVE CAREFULLY CONSIDERED THE FINDINGS OF THE AO AS ALSO THE SUBMISSION OF THE APPELLANT. THE APPELLANTS CASE I S THAT THE PROPERTY UNDER CONSIDERATION HAS ALREADY BEEN TAXED IN A.Y. 1993-94 AND A.Y. 1995-96 AND THAT THE DUE CAPITAL GAIN ON THE SALE O F SUCH PROPERTY HAS ALREADY BEEN PAID. THEREFORE ON THE SAME PROPERTY W HEN THE SALE DEED WAS EXECUTED ON 27.10.2006 AND THE VALUE OF THE PRO PERTY WAS DETERMINED FOR STAMP DUTY FOR RS. 2.50 CR. WHEREAS THE ACTUAL SALE CONSIDERATION AS PER THE SALE DEED WAS FOR RS. 2500 00, PROCEEDINGS U/S 147/148 CANNOT BE INITIATED. AS PER THE APPELLANT I NITIALLY LATE SMT. BHAWANRI DEVI ENTERED INTO A SALE CUM DEVELOPMENT A GREEMENT ON 27.9.1992 FOR SALE OF PROPERTY KNOWN AS SARASWATI B HAWAN FOR A LUMP- SUM CONSIDERATION OF RS. 18 LAKH AND AGAINST SUCH S ALE AGREEMENT RS. 2 LAKH WAS RECEIVED AS DOWN PAYMENT AND ANOTHER FIRST INSTALLMENT OF RS. 7 LAKH WAS RECEIVED ON 23.4.1993. THE ASSESSEE TREA TED SUCH TRANSACTIONS AS TRANSFER WITHIN THE MEANING SEC. 2( 47) OF IT ACT READ WITH SEC. 53A OF TRANSFER OF PROPERTY ACT AND AS TH E SUBSTANTIAL PAYMENT WAS RECEIVED ON 23.4.1993, THEREFORE THE TR ANSFER OF PROPERTY WAS TREATED TO BE EFFECTED IN A.Y. 1995-96 AND DUE TAX WAS PAID ON SUCH TRANSACTION BY WAY OF FILING OF IT RETURN ETC. HOWEVER, SUBSEQUENTLY THE DEPARTMENT REOPENED THE CASE U/S 1 47 OF IT ACT BY HOLDING THAT THE SAID PROPERTY WAS TAXABLE IN A.Y. 1993-94 AS THE SALE CUM DEVELOPMENT AGREEMENT WAS SIGNED ON 27.9.1992. THE ASSESSEE FURTHER SUBMITTED THAT THE ADDITION MADE BY THE AO IN A.Y. 1993-94 WAS CONFIRMED BY THE FIRST APPELLATE AUTHORITY. HOW EVER, THE HON. ITAT MUMBAI SUBSEQUENTLY SET-ASIDE THE ORDER OF THE APPE LLATE AUTHORITY WITH THE OBSERVATIONS THAT BOTH AO AND CIT(A) FAILE D TO EXAMINE THE ITA 173 /JP/2015_ MAHESH MATADIN VERMA VS ITO 5 FACTS AS TO WHEN THE ACTUAL AND PHYSICAL POSSESSION WAS HANDED OVER TO THE DEVELOPER AND THAT THE ACTUAL PHYSICAL HAND OVER OF THE PROPERTY SHOULD BE ASCERTAINED TO DETERMINE THE TAXABILITY O F CAPITAL GAIN IN PARTICULAR ASSESSMENT YEAR. AS PER THE APPELLANT TH OUGH THE CASE HAS BEEN SET ASIDE AND THE RESTORED TO THE FILE OF THE AO BUT THE FACT REMAINED THAT THE CAPITAL GAIN WAS TO BE TAXABLE EI THER IN A.Y. 1993-94 OR 1995-96. IT IS ALSO FACT THAT SUBSEQUENTLY THE A SSESSEE HAD EXECUTED A CANCELLATION DEED DATED 16.03.2002 AND ACCORDINGL Y THE SALE CUM DEVELOPMENT AGREEMENT DATED 27.9.92 WAS CANCELLED. HOWEVER, THE ORIGINAL AGREEMENT DATED 27.9.1992 WAS AGAIN STATED TO BE REVIVED ON 6.8.2002. IN THE MEANWHILE WITH THE DEATH OF SMT. B HAWANRI DEVI MATADIN VERMA, HER LEGAL HEIR SH. MAHESH MATADIN I. E. THE APPELLANT EXECUTED A DEED OF CONVEYANCE DATED 27.10.2006 FOR SALE OF THE ABOVE MENTIONED PROPERTY IN FAVOUR OF THE SH. GOPAL GOVIN D DIACHULAR. THE SALE CONSIDERATION WAS SHOWN FOR RS. 250000/- WHERE AS THE VALUE AS PER THE STAMP DUTY WAS DETERMINED FOR RS. 2.50 CR. THE OBJECTION OF THE APPELLANT IS THAT NO ASSET EXISTED IN THE YEAR UNDE R CONSIDERATION AND THEREFORE THERE WAS NO TRANSFER. IT IS ALSO CONTEND ED THAT NO ACTION CAN BE TAKEN AGAINST THE LEGAL REPRESENTATIVE U/S 147 R .W.S. 159 OF IT ACT AS ALSO THAT THE REOPENING OF THE ASSESSMENT FOR SECON D TIME TANTAMOUNT TO TAKING DIFFERENT VIEW ON THE SAME MATTER AND THE SAME WAS BAD IN LAW. ON THE OTHER HAND THE AOS CASE IS THAT THE AP PELLANT NAMELY SH. MAHESH MATADIN VERMA HAS EXECUTED A SALE DEED, ON 2 7.10.2006 IN THE OFFICE OF SUB- REGISTRAR ANDHERI NO. 2 AND AS P ER THE SALE DEED THE PROPERTY WAS SOLD FOR RS. 2.50 LAKH WHEREAS THE MAR KET VALUE OF THE PROPERTY AS PER THE STAMP DUTY WAS ARRIVED AT RS. 2 .5 CR. AND THESE FACTS JUSTIFIED ACTION U/S 147/148 OF IT ACT. ON CAREFUL CONSIDERATION OF ALL THESE FACTS IT IS N OTED THAT THE AO WAS HAVING INFORMATION THAT THE APPELLANT HAS SOLD ONE PROPERTY I.E. P. NO. ITA 173 /JP/2015_ MAHESH MATADIN VERMA VS ITO 6 8 (OLD NO.), NEW NO. 32 OF TEJPAL SCHEME, SURVEY NO . 51, 190/1, 190/11, OF VILLE PARLE (E) MEASURING 530.93 SQ. MET ERS KNOWN AS SARASWATI BHAWAN TO M/S GOPAL GOVIND DAICHULAR, B EING PURCHASER PARTY THROUGH M/S V.B. SPAN DEVELOPERS 11, GROUND F LOOR, DURGAN BHANWAN, SUBHASH ROAD, VILLE PARLE, MUMBAI BEING TH E CONFIRMING PARTY. THESE FACTS ARE NOT DISPUTED EVEN BY THE APP ELLANT. IT IS ALSO FACT THAT THERE WAS SUBSTANTIAL DIFFERENCE IN THE SALE A MOUNT SHOWN IN THE SALE DEED VIS-A-VIS MARKET VALUE OF THE PROPERTY AS PER THE REGISTRATION AUTHORITIES. AS PER THIS SALE DEED THE LAND HAS BEE N TRANSFERRED AND THEREFORE THE TRANSACTIONS WERE LIABLE FOR CAPITAL GAIN. THE ABOVE FACTS WERE INDICATED THAT THE AO WAS HAYING VALID INFORMA TION JUSTIFYING INITIATION OF PROCEEDINGS U/S 147/ 148 OF IT ACT. A S REGARDS THE OTHER FACTS STATED BY THE APPELLANT IT MAY BE NOTED THAT THESE ARE NOT OF MUCH RELEVANCE AS FAR AS INITIATION OF PROCEEDINGS U/S 147/148 ARE CONCERNED. AS REGARDS OF THE OBJECTION OF THE APPEL LANT THAT SUCH REOPENING IS ON SECOND TIME FOR THE SAME PROPERTY A ND THAT IT ONLY REPRESENTED CHANGE OF OPINION, IT MAY BE STATE THAT EARLIER WHEN THE PROCEEDINGS U/S 147/ 148 HAS BEEN INITIATED THE AGR EEMENT FOR SALE AND DEVELOPMENT HAS BEEN EXECUTED BY LATE SMT. BHAW ANRI DEVI AND ADMITTEDLY SUCH SALE CUM DEVELOPMENT AGREEMENT WAS SUBSEQUENTLY CANCELLED. THEREFORE, THE PRESENT SALE AGREEMENT IS PRIMA FACIE A NEW AND AN INDEPENDENT TRANSACTION. IT MAY ALSO BE MENT IONED THAT THE VERY ESSENTIAL CONDITION FOR INITIATING PROCEEDINGS U/S 147/ 148 IS THAT THE AO SHOULD HAVE REASON TO BELIEVE THAT ANY CHARG EABLE TO TAX INCOME HAS ESCAPED ASSESSMENT AND IN THE PRESENT CA SE THE EXECUTION OF SALE DEED AND VAST DIFFERENCE BETWEEN THE SALE C ONSIDERATION SHOWN IN THE SALE DEED AND THE ACTUAL MARKET VALUE AS PER THE REGISTRATION AUTHORITIES FOR STAMP DUTY PURPOSES DEFINITELY INDI CATED THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. THEREFORE AS FAR AS THE ITA 173 /JP/2015_ MAHESH MATADIN VERMA VS ITO 7 INITIATION OF PROCEEDINGS U/S 147/ 148 WAS CONCERNE D, NO MISTAKE CAN BE ATTRIBUTED TO THE ACTION OF THE AO. ACCORDINGLY, THE GROUND OF APPEAL IS DISMISSED. 5. WE HAVE HEARD BOTH THE SIDES ON THIS ISSUE AND A LSO CONSIDERED THE WRITTEN SUBMISSIONS OF LD AR AND VARIOUS CASE LA WS RELIED UPON BY BOTH THE SIDES. THE ASSESSEES CLAIM THAT THE CAPITA L GAIN ON TRANSFER WERE ALREADY TAXED IN THE ASSESSMENT YEAR 1993-94 AN D A.Y. 1995-96 IS NOT SUPPORTED BY ANY DOCUMENT WHETHER DUE CAPITAL GA IN WAS PAID. ASSESSEE FAILED TO PRODUCE ANY RELIABLE DOCUMENT TO SUPPORT THIS CONTENTION. THE FACTS ON RECORD ALSO SUGGEST THAT W HILE SUBMITTING BEFORE THE LD. CIT(A) DURING THE PROCEEDINGS U/S 264 OF THE ACT FOR THE A.Y. 1995-96, THE ASSESSEE HAS CATEGORICALLY PLEADE D THAT THERE WAS NO TRANSFER OF OWNERSHIP AND POSSESSION WAS NEVER GIVEN TO THE PURCHASER PARTY. MOREOVER, THE AGREEMENT DATED 27/09/1992 HAS NO BEARING ON THE TRANSACTION OF SALE DEED EXECUTED ON 27/10/2006 AS THE SAME WAS ALREADY CANCELLED. AGREEMENT DATED 27/09/1992, WHIC H WAS SUBSEQUENTLY CANCELLED HAS ALSO NO BEARING ON THE A GREEMENT DATED 06/08/2002. IN OUR CONSIDERED VIEW, THE ASSESSING OF FICER HAS RIGHTLY INITIATED THE PROCEEDINGS U/S 148 OF THE ACT AS THE SALE CONSIDERATION RECORDED IN THE SALE DEED WAS 27/10/2006 VERY MUCH D EPRESSED IN VIEW OF THE FACT THAT AGREEMENT DATED 27/09/1992 WAS ALRE ADY CANCELLED. IT ITA 173 /JP/2015_ MAHESH MATADIN VERMA VS ITO 8 IS ALSO IMPORTANT TO NOTE THAT THE REGISTRY DATED 2 7/10/2006 WAS IN DIFFERENT NAME THEN THE PERSONS WITH WHOM THE AGREEME NT DATED 06/8/2002 ENTERED INTO. THUS, THE FACTS ON RECORD ES TABLISH THAT REOPENING WAS BASED ON SUFFICIENT REASONS. THE LD AR HAS FAILED TO CONTROVERT THE FINDINGS RECORDED BY THE LD. CIT(A). IN VIEW OF THESE FACTS, WE HOLD THAT THERE WERE SUFFICIENT REASONS TO INITIATE THE PROCEEDINGS U/S 148 OF THE ACT. ACCORDINGLY, WE FIND NO MERIT IN THIS GROUND OF ASSESSEES APPEAL, HENCE THE SAME IS DISM ISSED. 6. IN THE GROUND NO. 2 OF THE APPEAL, WHICH HAS BEEN SUB-DIVIDED FROM GROUNDS NO. 2(A) TO 2(E), THE ISSUE INVOLVED I S UPHOLDING THE ACTION OF THE ASSESSING OFFICER IN ASSESSING THE LO NG TERM CAPITAL GAIN AT RS. 48,48,452/-. THE LD. CIT(A) HAS DECIDED THIS ISSU E BY HOLDING AS UNDER: 6.3 I HAVE CAREFULLY CONSIDERED THE FINDINGS OF TH E AO AS ALSO SUBMISSION OF THE APPELLANT. THERE IS NO DISPUTE ON THE FACT THAT THE SALE DEED OF PROPERTY SITUATED AT SARASWATI BHAWAN WAS EXECUTED ON 27.10.2006 BY: (I) SH. MAHESH MATADIN VERMA (SELF), (II) SMT. PUS HPA DEVI KISHORE VERMA (SELF) AND ON BEHALF OF HER TWO MINOR CHILDRE N, SH. RITESH KUMAR VERMA, MISS. RENUKA VERMA, (III) SMT. SHUSHILA LAXM INARAYAN VARMA (SELF), (IV)SMT. VIMLA SURENDRA RAJORIA (V) SMT. ME ENA DEVENDRA MARWAL, IN FAVOUR OF SH. GOPAL GOVIND DAICHULAR THR OUGH THE CONFIRMING PARTY NAMELY M/S V.B. SPAN DEVELOPERS AN D THE ASSESSEES SHARE IN THE SAID PROPERTY WAS L/5 TH . IT IS ALSO FACT THAT WHEN THE ITA 173 /JP/2015_ MAHESH MATADIN VERMA VS ITO 9 PROPERTY WAS SOLD THE SALE CONSIDERATION IN THE SAL E DEED WAS SHOWN FOR RS. 250000 WHEREAS THE MARKET VALUE OF THE PROP ERTY AS PER THE REGISTRATION AUTHORITY FOR STAMP DUTY WAS RS. 25000 0. THE AO HAS DETERMINED COST OF THE ACQUISITION OF THE SAID PROP ERTY FOR RS. 757740 AND 1/5 TH SHARE OF THE ASSESSEE WAS ACCORDINGLY DETERMINED F OR RS. 151548. THIS FACT IS ALSO NOT DISPUTED BY THE ASSES SEE. HOWEVER THE MAIN DISPUTE IS IN RESPECT OF LEVY OF CAPITAL GAIN AND THE APPELLANTS CASE IS THAT THERE WAS NO TRANSFER OF THE ASSET WIT HIN THE MEANING OF SEC. 2(47) OF IT ACT IN AS MUCH AS THE SAID PROPERT Y HAS ALREADY BEEN OFFERED FOR CAPITAL GAIN TWICE IN A.Y. 1993-94 (CAS E OPENED BY THE DEPARTMENT) AND A.Y. 1995-96 CAPITAL GAIN OFFERED B Y THE ASSESSEE VOLUNTARILY. THE APPELLANT HAS CONTENDED THAT THE P ROPERTY UNDER CONSIDERATION WAS TRANSFERRED IN A.Y. 1993-94 OR 19 95-96 IN PART PERFORMANCE OF A CONTRACT AS REFERRED IN SEC. 153 A OF TP ACT AND THAT ACCORDINGLY CAPITAL GAIN LIABILITY WAS PAID DURING THE A.Y. UNDER CONSIDERATION. IT IS ALSO CONTENDED THAT TAXING THE SAME PROPERTY FOR CAPITAL GAIN IN A.Y. 2007-08 ON THE BASIS OF SALE D EED EXECUTED ON 27.10.2006 WAS NOT PROPER AND BAD IN LAW. IT IS ALS O CONTENDED THAT THE PROVISION OF SEC. 50 C ARE NOT APPLICABLE IN TH IS CASE AS THE PROPERTY HAS ALREADY BEEN TRANSFERRED DURING A.Y. 1993-94 OR IN A.Y. 1995-96. ON THE OTHER HAND THE AOS CASE IS THAT THE ASSESSE ES MOTHER HAD OFFERED THE CAPITAL GAIN INCOME DURING A.Y. 1995-96 HOWEVER THERE WAS NO BASIS FOR OFFERING SUCH INCOME IN A.Y. 1995-96. AS REGARDS REOPENING OF THE ASSESSMENT FOR A.Y. 1993-94 THOUGH IT IS COR RECT THAT AS PER THE SALE AGREEMENT DATED 27.9.1992 THE ASSESSEES MOTHE R HAS GIVEN RIGHT AND POWER TO THE BUYER FOR CONSTRUCTION AND DEVELOP MENT OF PROPERTY BUT SUBSEQUENTLY SUCH AGREEMENT WAS CANCELLED ON 16 .03.2002 AND THEREFORE SUCH SALE AGREEMENT DID NOT REMAIN IN EXI STENCE. THE AO ALSO MENTIONED THAT IN ANY CASE AS REGARDS THE LEVY OF C APITAL GAIN IN A.Y. ITA 173 /JP/2015_ MAHESH MATADIN VERMA VS ITO 10 1993-94 THE HORN ITAT SET ASIDE THE ASSESSMENT WITH THE DIRECTION TO DETERMINE AS TO WHEN THE PROPERTY IN QUESTION WAS A CTUALLY TRANSFERRED. HOWEVER THE FACT REMAINED THAT AFTER T HE DECISION OF HON. ITAT THE SALE AGREEMENT DATED 27.9.1992 ON THE BASI S OF WHICH THE CAPITAL GAIN WAS SHOWN WAS ITSELF CANCELLED BY THE ASSESSEE ON 16.03.2002. THEREFORE AS PER AO THE SUBSEQUENT SALE DEED EXECUTED ON 27.10.2006 WAS INDEPENDENT TRANSACTION THROUGH WHIC H THE PROPERTY WAS TRANSFERRED TO AN ANOTHER ENTITY AND THEREFORE CAPITAL GAIN WAS LEVIABLE. ON CAREFUL CONSIDERATION OF ALL RELEVANT FACTS IT MAY BE MENTIONED THAT INITIALLY WHEN THE SALE AGREEMENT WA S EXECUTED BY THE MOTHER OF THE ASSESSEE SMT. BHANWARI MATADIN VERMA ON 27.9.1992 THE PROPERTY WAS TO BE TRANSFERRED/ SOLD AS PER DEV ELOPMENT AGREEMENT FOR RS. 18 LAKH TO MS. SUMAN SHREEPAD CAR RYING ON BUSINESS IN THE NAME AND STYLE OF SUMANGAL ENTERPRISES. IT I S ALSO FACT THAT AS AGAINST THE TOTAL LUMP-SUM SALE CONSIDERATION OF RS . 18 LAKH THE ASSESSEE RECEIVED 17 LAC UPTO AY 1995-96 AND ALSO T HAT FULL PAYMENT AS PER THE SALE AGREEMENT HAS NOT BEEN MADE. SUBSEQ UENTLY, VIDE AGREEMENT DATED 16.03.2002 LT. SMT. BHANWARI DEVI C ANCELLED THE SALE AGREEMENT DATED 27.9.1992, ANOTHER DEVELOPMENT AGRE EMENT WAS SIGNED ON 06.08.2002 AND DEVELOPMENT RIGHTS WERE AS SIGNED TO ANOTHER PARTY NAMELY SH. V.B. SPAN DEVELOPERS. THE ABOVE FACTS WILL INDICATE THAT THE SALE AGREEMENT ON WHICH BASIS THE DEPARTMENT HAS REOPENED THE ASSESSMENT FOR LEVY OF CAPITAL GAIN HA S SUBSEQUENTLY BEEN CANCELLED. FURTHER, THOUGH IT IS CORRECT THAT THE AO AS WELL AS THE FIRST APPELLATE AUTHORITY HAS TREATED SUCH TRANSFER IN A.Y. 1993-94 VALID FOR CAPITAL GAIN LIABILITY. HOWEVER, THE ACTION OF THE AO AND FIRST APPELLATE AUTHORITY WAS NOT APPROVED BY THE HON. IT AT WHO VIDE ORDER DATED 26.6.2007 DIRECTED TO ASCERTAIN THE EXACT PER IOD OF TRANSFER OF ASSET FOR LEVY OF CAPITAL GAIN. HOWEVER, EVEN BEFOR E SUCH DECISION OF ITA 173 /JP/2015_ MAHESH MATADIN VERMA VS ITO 11 HON. ITAT THE SALE AGREEMENT DATED 27.9.1992 WAS CA NCELLED BY THE ASSESSEE IN CONSENT WITH THE VENDOR PARTY. THEREFOR E, LEGALLY THERE REMAINED NO TRANSFER OF ASSET FOR LEVY OF CAPITAL G AIN IN RESPECT OF A.Y. 1993-94. IT IS ALSO FACT THAT THE ASSESSEE ADMITTED BEFORE THE WORTHY CIT DURING THE PROCEEDINGS U/S 264 IN RESPECT OF AY 1995-96 THAT THE AGREEMENT DATED 27.09.1992 WAS FOR LIMITED PURPOSE OF DEVELOPMENT OF PROPERTY AND THERE WAS NO TRANSFER OF OWNERSHIP AS ALSO THAT POSSESSION WAS NEVER GIVER TO THE PURCHASER PARTLY. AS REGARDS SHOWING OF CAPITAL GAIN IN A.Y. 1995-96, THE FACT REMAINS T HAT THERE WAS NO LEGAL BASIS FOR SHOWING SUCH CAPITAL GAIN BY THE ASSESSEE AND THEREFORE TO CLAIM THAT THERE WAS A TRANSFER WITHIN THE MEANING OF SEC. 2(47) IS NEITHER CORRECT NOT ACCEPTABLE. IT IS FURTHER NOTED THAT WITH THE DEATH OF SMT. BHANWARI DEVI, THE PROPERTY IN QUESTION WAS SU BSEQUENTLY TRANSFERRED BY WAY OF SALE DEED DATED 27.10.2006 BY THE ASSESSEE ON BEHALF OTHER LEGAL HEIRS. THE SALE DEED WAS EXECUTE D ON THIS DATE IN WHICH THE MARKET VALUE OF THE PROPERTY WAS DETERMIN ED FOR RS. 2.50 CR. AS THE REGISTRATION AUTHORITY HAS CERTIFIED THE SAL E OF THE PROPERTY AND THEREFORE THERE WAS A TRANSFER WITHIN THE MEANING O F SEC. 2(47) OF IT ACT ON THIS DATE. IT IS FURTHER NOTED THAT WHEREAS THE ORIGINAL SALE AGREEMENT DATED 27.9.1992 WAS EXECUTED IN FAVOUR OF SMT. SUMAN SHREEPAD WHEREAS THE SALE AGREEMENT DATED 27.10.200 6 IS EXECUTED IN FAVOUR OF GOPAL GOVIND DAICHOLIKAR THROUGH THE CONF IRMING PARTY NAMELY GAJANAND GOVIND PANTHOJI AND THESE FACTS IND ICATE THAT THE BUYER PARTY AS PER THE ORIGINAL AGREEMENT DATED 27. 9.1992 AND AS PER SALE DEED DATED 27.10.2006 ARE ALTOGETHER DIFFERENT . THEREFORE IT CANNOT SAID THAT THE SALE AGREEMENT DATED 27.10.200 6 WAS IN CONTINUANCE AND IN CONNECTION WITH THE AGREEMENT DA TED 27.9.1992. THE IMPORTANT POINT TO BE NOTED IS THAT PURCHASER P ARTY AS PER AGREEMENT DATED 27.09.1992 IS DIFFERENT THAN THE PU RCHASER PARTLY AS ITA 173 /JP/2015_ MAHESH MATADIN VERMA VS ITO 12 PER SALE DEED DATED 27.10.2006. FURTHER EVEN THE DE VELOPMENT AGREEMENT DATED 06.08.2002 WAS MADE WITH ALL TOGETH ER DIFFERENT PARTY. THEREFORE THE TRANSACTION OF SALE DATED 27.1 0.2006, WAS INDEPENDENT SALE TRANSACTION THOUGH IN THE DOCUMENT S IT IS REFLECTED IN A MANNER TO BE SHOWING IN CONTINUANCE TO AGREEMENT DATED 27.09.1992. ANOTHER IMPORTANT POINT TO BE TAKEN INT O CONSIDERATION IS THAT WHY A PERSON WILL TRANSFER OR SALE A PROPERTY FOR RS. 18 LACS ON THE RATE APPLICABLE IN AY 1993-94 TO A ALL TOGETHER DIF FERENT PURCHASER PARTY WHEN THE PREVAILING MARKET RATE OF THE PROPER TY WERE SO HIGH. THE CORROBORATIVE FACTS ALSO INDICATE THAT THE ACTU AL SALE CONSIDERATION MAY HAVE BEEN FOR RS. 2.5 CRORES OR MORE BUT TO AVO ID THE TAX LIABILITY IT WAS SHOWN FOR RS. 2.50 LACS, THAT TOO IN CONTINUANC E TO EARLIER AGREEMENT. KEEPING IN VIEW THESE FACTS IT IS HELD T HAT ON SALE OF THE PROPERTY AS PER SALE DEED DATED 27.10.2006, THE AO HAS RIGHTLY TAXED ASSESSEES SHARE AS LONG TERM CAPITAL GAIN. ACCORDI NGLY THE ADDITION MADE BY THE AO IS CONFIRMED. 7. WE HAVE HEARD BOTH THE SIDES AND CONSIDERED THE CASE LAWS RELIED UPON. WE HAVE ALSO CONSIDERED THE WRITTEN SUB MISSIONS OF THE LD AR. AFTER CONSIDERING ALL THESE, WE ARE OF THE VIEW T HAT THE CAPITAL GAIN BY INVOKING THE PROVISIONS OF SECTION 50C OF THE AC T ARE RIGHTLY TAXED IN THE YEAR UNDER CONSIDERATION. THE ASSESSEE HAS NEVER GIVEN POSSESSION OF THE LAND IN EARLIER YEARS. THERE WAS NO EXECUTION OF THE SALE DEED IN THE EARLIER YEARS. THE AGREEMENT DATED 27/09/1992 WA S CANCELLED. THE DEVELOPMENT AGREEMENT DATED 06/8/2002 WAS NOT WITH TH E PERSON WHICH WHOM THE SALE WAS EXECUTED ON 27/10/2006. THE F ACTS ON ITA 173 /JP/2015_ MAHESH MATADIN VERMA VS ITO 13 RECORD ALSO SUGGEST THAT SUCH AGREEMENT IN 1992 AND 2002 ARE SIMPLY TO AVOID THE PAYMENT OF VARIOUS TAXES ON TRANSFER O F PROPERTY. CONSIDERING ALL THESE ASPECTS OF THE MATTER, WE CONF IRM THE ORDER OF THE LD. CIT(A) ON THIS ISSUE. ACCORDINGLY, THIS GROUND O F ASSESSEES APPEAL IS DISMISSED. 8. IN THE GROUND NO. 3 OF THE APPEAL, THE ISSUE RAI SED HAS NO MERIT WHEREIN IT IS CLAIMED THAT THE ASSESSEE HAS NOT INHE RITED THE PROPERTY BUT THIS CLAIM IS CONTRARY TO THE FACTS OF THE CASE AFTER THE DEATH OF THE MOTHER OF THE ASSESSEE. THE PROPERTY GOT TRANSFERRED IN THE NAME OF THE ASSESSEE AS LEGAL HEIR AND THE ASSESSEE IS ONE OF THE EXECUTOR OF THE SALE DEED ALONGWITH OTHER LEGAL HEIRS. THEREFORE, THIS GROUND IS ALSO NOT SUPPORTED BY THE FACTS ON RECORD. HENCE, THIS G ROUND OF APPEAL IS DISMISSED. 9. GROUNDS NO. 4 AND 5 OF THE APPEAL ARE GENERAL IN NATURE AND DOES NOT REQUIRE ANY ADJUDICATION. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 17/05/2018. SD/- SD/- FOT; IKY JKO FOT; IKY JKO FOT; IKY JKO FOT; IKY JKO HKKXPAN HKKXPAN HKKXPAN HKKXPAN (VIJAY PAL RAO) (BHAGCHAND) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 17 TH MAY, 2018. ITA 173 /JP/2015_ MAHESH MATADIN VERMA VS ITO 14 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SHRI MAHESH MATADIN VERMA, JHUNJHUNU. 2. IZR;FKHZ @ THE RESPONDENT- THE ITO, WARD-1, JHUNJHUNU. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 173/JP/2015) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR