Shri Navghanbhai Laxman Rabari, Vadodara V. The ITO, Ward-3(1)(1), Vadodara

ITA 1864/AHD/2019

AI Insights

The case revolves around the appeal by Shri Navghanbhai LaxmanRabari against the order of the Learned Commissioner of Income Tax (Appeals)-3, Vadodara, which confirmed the assessment order treating the sale of land as a short-term capital gain. The land, co-owned by the assessee and ten others, was sold for Rs.4,80,00,000. The assessee claimed the gain was long-term, based on a notarized 'Banakhat' dated 19.12.2007, asserting possession and payment occurred earlier than the registered sale deed dated 14.09.2009. However, the Assessing Officer (AO) and the CIT(A) rejected this claim, emphasizing that the property transfer is effective only upon actual possession or through a registered sale deed, not merely through an unregistered agreement.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 127170 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-01-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 11-01-2023
• Assessment Year: 2013-2014
• Appeal Filed On: 17-12-2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Cost of acquisition
• Section: 54F

Judgement Text

आयकर अपील य अ धकरण, अहमदाबाद यायपीठ IN THE INCOME TAX APPELLATE TRIBUNAL, ‘’SMC’’ BENCH, AHMEDABAD BEFORE SHRIWASEEM AHMED, ACCOUNTANT MEMBER आयकरअपीलसं./ITA No.1864/AHD/2019 नधा रणवष /Asstt. Year: 2013-14 Shri Navghanbhai LaxmanRabari 12-13, GF, Rabariwad, Opp: Ramnath Samashan, Near Sikortar Mata Mandir, Gajarawadi, Vadodara PAN: ATTPR6280P Vs. ITO Ward-3(1)(1), Vadodara (Applicant) (Respondent) Assessee by : None Revenue by : Shri Sanjaykumar, Sr. D.R स ु नवाईक तार ख/Date of Hearing : 12/01/2023 घोषणाक तार ख/Date of Pronouncement: 18/01/2023 आदेश/O R D E R The captioned appeal hasbeen filed at the instance of the Assessee against the order of the Learned Commissioner of Income Tax(Appeals)-3,Vadodara dated 03/09/2019 arising in the matter of assessment order passed under s.143(3) of the Income Tax Act, 1961 (here-in-after referred to as "the Act") relevant to the Assessment Year 2013-14. 2. The assessee has raised the following grounds of appeals: “1. The ld. CIT(appeals) erred in law and on facts in confirming action of the AO in treating the sale of land as Short Term Capital Gain by considering purchase deed dated 14.09.2009 & not considering notarized Banakhat dated 19.12.2007 for calculating period of holding of the asset(land), though actual possessing of land was obtained by the Appellant from the date of the Banakhat i.e. 19.12.2007 and payment have been made thereafter. 2. The ld.CIT(appeals) erred in law and on facts in confirming action of AO in non granting of deduction U/s. 54F of Rs. 41,50,000/- by considering Long Term Capital Gain as Short Term Capital Gain even though the appellant has submitted possession letter towards purchase of new house. Your Appellant most humbly reserves the right to add, amend, alter or substitute any of the grounds in this appeal on or before the time of Hearing.” ITA No.1864/AHD/2019 A.Y. 2013-14 2 3. In the present case the assessee is an individual and engagedin the business of selling milk. The case was selected for scrutiny. As per the details available with the AO, it was observed that the assessee has sold a piece of land for a consideration of Rs.4,80,00,000/- with other ten persons on 24.05.2012. The land was owned by all of them equally. So the assessee’s share in the sale consideration i.e. 1/11 th of 4,40,00,000 was Rs.43,63,636/- only. The assessee has claimed indexed cost of acquisition amounting to Rs.3,39,722/- and the balance long term capital gain was claimed as deduction under section 54F of the Act. So, the long term capital gain resulted to be NIL. However, on verification, the AO found that the assessee has purchased that piece of land as on 14.09.2009. Since the assessee has held that piece of land for less than 36 months, it shall be treated as short term capital Gain and deduction under section 54F cannot be claimed against short term capital Gain. Thus, the AO sought a clarification from the assessee on the facts discussed above. 4. The assessee has filed a “Banakhat” dated 19.12.2007 to justify that the possession of land was already transferred to him (the assessee) earlier as mentioned in it. So, it should be treated as long term capital Gain. However, the AO has disregarded the claim of the assessee by observing that non-registered Banakhat is not a valid document to transfer the property, secondly even in the sale deed there is no mention of any Banakhat and thirdly the assessee has not mentioned about it unless and until, the same was pointed out by the AO. As per the AO, it was a frivolous and after thought attempt by the assessee to misguide the authority. So the AO has disregarded the contention of the assessee and added the sum of 41,11,645.00to the total income of the assessee. 5. Aggrieved assessee preferred an appeal before the Ld. CIT(A). 6. The Ld. CIT(A) has confirmed the decision of the AO by observing that the assessee has held the land for less than 36 months. The period of holding has to be calculated since the time the property has been physically transferred not merely executing on paper through notarized Banakhat. The right of the property ITA No.1864/AHD/2019 A.Y. 2013-14 3 is transferred either by possession or by sale deed and not by any simply agreement. 7. Aggrieved assessee preferred an appeal before me. 8. At the outset, I may like to mention that neither the concerned Counsel nor any other person on behalf of the assessee appeared before the Tribunal to represent the case or even to seek an adjournment at the time of hearing. The case is very old pertaining to AY 2013-14 and has already been listed ten times for hearing but none of the time, anybody appeared. The Appellate Tribunal is the appointed machinery under the Act for finally deciding questions of fact in relation to assessment of income-tax. The provisions of Income Tax Act oblige it to decide an appeal, after giving an opportunity to the parties to put forward their case. The giving of the opportunity only emphasizes the character of the quasi- judicial function performed by the Appellate Tribunal. The fact that that opportunity is not availed of in a particular case, will not entitle the Tribunal not to decide the case. Although this appeal was filed by the assessee only. I was inclined to hear the contentions of the assessee. The Right to be heard in a suit is one of the tenets of principles of natural justice but the continuous absence and negligence of the assessee has left no option to me except to hear it ex-party.This liberty is in consonance with the proviso to Rule 24 of the Income-Tax (Appellate Tribunal) Rules, 1963, (hereinafter referred as "ITAT Rules") which read as under: " Where, on the day fixed for hearing or on any other date to which the hearing may be adjourned, the appellant does not appear in person or through an authorised representative when the appeal is called on for hearing, the Tribunal may dispose of the appeal on merits after hearing the respondent :” 9. Therefore, in the given circumstances and considering the nature of dispute, I decided to proceed to dispose off the appeal ex–parte qua the assessee with the assistance of the learned Departmental Representative. 10. The Ld. DR before me vehemently relied upon the order of the authorities below. ITA No.1864/AHD/2019 A.Y. 2013-14 4 10.1 I have heard the Ld. DR and perused the materials available on records. It was observed that the order of the authorities below has passed a speaking order and incorporated lots of evidences to substantiate their decision against the assessee. The transfer of property cannot take place on simple agreement.The transfer of the property only takes place when either the possession of the property istransferred or sale deed is executed. Documents like unregistered Banakhat, power of attorney are not the substitute of sale deed. So in present case the land has been sold and sale deed is executed on 14.09.2009 only. The sale of the piece of land within 36 months resulted in short term gain to the assessee.Even in the sale deed there is no mentioned of Banakhat. The issue of invoking the exemption under sec 54F was also held invalid by the lower authorities. The onus to proof the findings of the authorities below as not justified lies upon the assessee. However, the assessee has not brought anything contrary to the findings of the authorities below. As such, it seems that the assessee is not interested in pursuing his claims as he failed to appear despite giving so many opportunities by the Tribunal.Therefore, we are not inclined to interfere in the finding given by the Ld. CIT(A). Hence, the ground of appeal raised by the assessee is dismissed. 11. In the result, the appeal filed by the assessee is dismissed. Order pronounced in the Court on 18/01/2023 at Ahmedabad. Sd/- (WASEEM AHMED) ACCOUNTANT MEMBER Ahmedabad; Dated 18/01/2023 Tanmay, Sr. PS TRUE COPY आदेशक त ल प!े षत/Copy of the Order forwarded to : आदेशान ु सार/BY ORDER, उप/सहायकपंजीकार (Dy./Asstt.Registrar) आयकरअपील यअ धकरण, अहमदाबाद / ITAT, Ahmedabad 1. अपीलाथ / The Appellant 2. यथ / The Respondent. 3. संबं धतआयकरआय ु त/ Concerned CIT 4. आयकरआय ु त(अपील) / The CIT(A) 5. !वभागीय $त$न ध, आयकरअपील यअ धकरण/ DR, ITAT, 6. गाड&फाईल / Guard file.