Dattatray Narayan Bhondve, Pune V. Income-tax Officer, Ward - 10 (2), Pune

ITA 1815/PUN/2019

AI Insights

The case involves an appeal by Mr. Dattatray Narayan Bhondve against the order of the Commissioner of Income Tax (Appeals)-6, Pune, which treated a cancelled development agreement as a 'transfer' and considered Rs.2,10,00,000 as its sale consideration for the assessment year 2009-10. The primary contention was whether the development agreement, which was cancelled in the subsequent year, should be considered a valid transfer affecting the tax liabilities of the assessee. The Tribunal noted that the issue of the development agreement being treated as a transfer was not examined by the AO during the reassessment proceedings due to the absence of details provided by the assessee at that stage. The Tribunal found merit in the assessee's arguments and remanded the matter for a detailed examination of all relevant documents and facts.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 132914 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-02-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 07-02-2023
• Assessment Year: 2009-2010
• Appeal Filed On: 20-11-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

आयकर अपीलीय अधिकरण “ए” न्यायपीठ पुणे में । IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER आयकर अपील सं. / ITA No.1815/PUN/2019 धििाारण वर्ा / Assessment Year : 2009-10 Mr. Dattatray Narayan Bhondve, Laxmi Nagar, Dehuroad, Ravet, Tal.-Haveli, Pune – 412113 PAN : AGBPB1952H ......अपीलार्थी / Appellant बिाम / V/s. The Income Tax Officer, Ward – 10(2), Pune ......प्रत्यर्थी / Respondent Assessee by : Shri Parag Bhujbal Revenue by : Shri Ramnath P. Murkunde सुनवाई की तारीख / Date of Hearing : 08-02-2023 घोषणा की तारीख / Date of Pronouncement : 09-02-2023 आदेश / ORDER PER S.S. VISWANETHRA RAVI, JM : This appeal by the assessee against the order dated 09-07-2019 passed by the Commissioner of Income Tax (Appeals)-6, Pune [‘CIT(A)’] for assessment year 2009-10. 2. The grounds raised by the assessee are as under : “1. Whether on the facts and circumstances of the case, the Ld. CIT(A) was justified in treating the development agreement, that was subsequently cancelled, as a ‘transfer’ and considering Rs.2,10,00,000/- as its sale consideration. 2 ITA No.1815/PUN/2019, A.Y. 2009-10 2. Whether on the facts and circumstances of the case, the Ld. CIT(A) was justified in not considering the deed of cancellation of agreement while holding the development agreement as a valid transfer. 3. Whether on the facts and circumstances of the case, the Ld. CIT(A) was justified in computing the capital gain without considering the indexed cost of acquisition and benefit of section 54F, if in case the transaction under consideration is to be treated as ‘transfer’. 4. The appellant craves leave to add, delete, amend, or alter any of the above grounds of appeal or raise any additional grounds of appeal.” 3. We note that the contention of ld. AR, Shri Parag Bhujbal is that the order of CIT(A) is not justified in confirming the order of AO by holding the transfer of right effected through Development Agreement dated 23-04- 2008 which was cancelled in the subsequent year by way of deed of cancellation dated 24-07-2009. Admittedly, no details whatsoever filed before the AO during the course of reopening proceedings, but however, we note that the same was raised before the CIT(A) in First Appellate proceedings. On perusal of page 6 at para 8 of the impugned order it is evident that there is no dispute with regard to cancellation of Development Agreement on 24-07-2009, but the consideration as mentioned in Development Agreement which is reproduced by the CIT(A) in page 9 of the impugned order, the ld. AR submits that it was adjusted in the subsequent transaction which effected with another party i.e. Tulshi Properties. Admittedly, this issue was not examined by the AO in the present reassessment proceedings as there were no details furnished by the assessee. Further, it was contended by the ld. AR that no capital gains arises in the year under consideration as the Development Agreement said to have been entered on 23-04-2008 was cancelled in the subsequent year relating to A.Y. 2010-11. We note that the assessee raised ground No. 2 in this regard challenging the action of CIT(A) in treating the Development Agreement which was cancelled in subsequent year as valid. It is also brought to our notice through ground No. 3 that there was no indexation cost of acquisition made available to the assessee by both the authorities 3 ITA No.1815/PUN/2019, A.Y. 2009-10 below. Therefore, considering all these, we deem it proper to remand the matter to the file of AO to consider the issue afresh taking into all contentions raised by the assessee with regard to the validity of Development Agreement, cancellation deed and subsequent sale deed which was stated to have been registered in the name of Tulshi Properties on 24-07-2009. We note that the ld. AR filed paper book containing 46 pages and on perusal of the same, we note the Development Agreement dated 23-04-2008, deed of cancellation dated 24-07-2209, sale deed dated 24-07-2009, mutation entry register dated 27-07-2009 and 7/12 extract are placed on record. 4. The ld. DR, Shri Ramnath P. Murkunde vehemently opposed in remanding the matter to the file of AO contending that the assessee failed to furnish any evidences before the AO inspite of having many opportunities. When the assessee did not avail the same, is not entitled to get another opportunity. The assessee filed the documents before the First Appellate Authority, the CIT(A) sought remand report from the AO. Considering the remand report the CIT(A) examined the issue in detail and held Development Agreement is valid which clearly shows the transfer of property effected through power of attorney and subsequent cancellation by way of deed of cancellation is an afterthought to escape the tax liability. 5. Considering the facts and circumstances of the case, arguments of ld. AR and ld. DR and in the interest of justice, the AO is directed to examine the issue afresh in terms of documents filed before us in the form of paper book containing 46 pages and pass an order, in accordance with law. The assessee is liberty to file evidences, if any, in support of its contention. 4 ITA No.1815/PUN/2019, A.Y. 2009-10 5. In the result, the appeal of assessee is allowed for statistical purpose. Order pronounced in the open court on 09 th February, 2023. Sd/- Sd/- (R.S. Syal) (S.S. Viswanethra Ravi) VICE PRESIDENT JUDICIAL MEMBER पुणे / Pune; दिनाांक / Dated : 09 th February, 2023. रदव आदेश की प्रधिधलधप अग्रेधर्ि / Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The CIT(A)-6, Pune 4. The Pr. CIT-5, Pune 5. दवभागीय प्रदतदनदि, आयकर अपीलीय अदिकरण, “ए” बेंच, पुणे / DR, ITAT, “A” Bench, Pune. 6. गार्ड फ़ाइल / Guard File. //सत्यादपत प्रदत// True Copy// आिेशानुसार / BY ORDER, वररष्ठ दनजी सदचव / Sr. Private Secretary आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune