ACIT, CHANDRAPUR CIRCLE, Chandrapur V. SHRI CHANDRAKANT KIMATRAMJI ADWANI, Chandrapur

ITA 190/NAG/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88705 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 10 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 08-06-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 03-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A R NINAWE
• Keywords: Capital asset

Judgement Text

1 ITA NO. 190/NAG/2013. IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI RAM LAL NEGI, JUDICIAL MEMBER.. I.T.A. NO. 190/NAG/2013. ASSESSMENT YEAR : 2009 - 10. ASSTT. COMMISSIONER OF INCOME - TAX, SHRI CHANDRAKANT KIMATRAMJI ADWANI, CHANDRAPUR CIRCLE, CHANDRAPUR. VS. CHANDRAPUR. APPELLANT. RESPONDENT. APPELLANT BY : SHRI A.R. NINAWE. . RESPONDENT BY : SHRI K.P. DEWANI. DATE OF HEARING : 22 - 03 - 2017. DATE OF PRONOUNCEMENT : 23 RD MARCH, 2017. O R D E R. PER SHAMIM YAHYA, A.M. : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(APPEALS) - II, NAGPUR DATED 27 - 02 - 2013 AND PERTAINS TO ASSESSMENT YEAR 2009 - 10. THE GROUNDS OF APPEAL READ AS UNDER : 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD CIT(A) IS CORRECT IN HOLDING THAT THE TURNOVER IN THE VAT RETURN INCLUDES TRANSACTION CHARGES WHILE THE MATERIAL ON RECORD IS NOT SPECIFIC ABOUT THE SAME? 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD CIT(A) IS CORRECT IN HOLDING THAT A MERE DOCUMENT OF POWER OF ATTORNEY IN FAVOUR OF THE ASSESSEE BY THE SELLER/OWNER/POSSESSOR OF THE PROPERTY (M/S ARMOUR DEVELOPERS PVT. LTD.) WOULD MAKE THE ASSESSEE THE LEGAL OWNER OF THE PROPERTY IN HOLDING THE SALE PROCEEDS THERE FROM, TO BE ASSESSED UNDER THE HEAD, CAPITAL GAINS AND NOT INCOME FROM OTHER SOURCES ? 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD CIT(A) IS CORRECT IN HOLDING AN UNREGISTERED DEED OF CLARIFICATION AT PAR WITH A DULY REGISTERED SALE DEED & CONSEQUENTLY HOLDING THAT THE SHARING RATIO OF THE SALE PROCEEDS OF THE PROPERTY SOLD BETWEEN 2 ITA NO. 190/NAG/2013. THE SELLERS COULD BE OTHERWISE THAN THE RATIO OF LAND AREA HELD BY THE SELLERS BETWEEN THEM? 2. APROPOS GROUND NO. 1: ON THIS ISSUE THE AO COMPARED THE ASSESSEES SALES AS PER VAT RETURNS AND THAT A S PER PROFIT & LOSS ACCOUNT AND MADE THE ADDITION AS UNDER : SALES AS PER VAT RETURNS (AS STATED BY ASSESSEE) RS. 59,04,68,958/ - SALES AS PER P & L A/C. RS. 58,90,43,607/ - RS. 14,25,351 3. UPON ASSESSEES APPEAL, LEARNED CIT(APPEALS) DELETED THE ADDITION HOLDING AS UNDER : I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE AND THE SUBMISSIONS OF HE ASSESSEE. THE BOOKS OF ACCOUNT OF THE ASSESSEE ARE DULY AUDITED BY A CHARTERED ACCOUNTANT. THE SAID AMOUNT OF RS.14,25,351/ - BEING TRANSPORT RECEIPTS ARE SEPARATELY SHOWN BY THE ASSESSEE IN ITS P&L A/C. NECESSARY EVIDENCES IN THIS REGARD HAVE BEEN FURNISHED BY THE A SSESSEE BEFORE THE LD. AO AND ALSO DURING THE COURSE OF APPELLATE PROCEEDINGS. THE ASSESSEE HAS ALSO PRODUCED BIFURCATION OF SALES SHOWN AS PER VAT RETURN AND AS APPEARING IN ITS LEDGER ACCOUNT TO ESTABLISH THAT THE SALE SHOWN IN THE VAT RETURN IS INCLUSIV E OF TRANSPORTATION CHARGES AND THAT THERE IS NO DIFFERENCE IN THE SALE SHOWN AS PER ITS BOOKS OF ACCOUNT AND AS REPORTED IN THE VAT RETURN. I HAVE ALSO PERUSED SAMPLE SALE BILLS OF THE ASSESSEE AND IT SEEN THAT VAT HAS BEEN CALCULATED ON THE SALE PRICE IN CLUSIVE OF THE TRANSPORTATION CHARGES. THUS THE ASSESSEE HAS CLEARLY ESTABLISHED THAT THERE IS NO DISCREPANCY AS STATED BY THE LD. AO. AO IS THEREFORE DIRECTED TO DELETE THE SAID ADDITION OF RS.14,25,351/ - . 4. AGAINST THE ABOVE ORDER THE REVENUE IS IN APPE AL BEFORE US. 5. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. WE FIND THAT LEARNED CIT(APPE A LS) HAS GIVEN A CLEAR FINDING THAT THE DIFFERENCE OF RS.14,25,351/ - HAS EMERGED ONLY BECAUSE 3 ITA NO. 190/NAG/2013. TRANSPORTATION RECEIPT HAS BEEN SEPARATELY SHOWN BY THE AS SESSEE IN PROFIT AND LOSS ACCOUNT WHILE THE BILLS OF VAT ARE INCLUSIVE OF TRANSPORTATION CHARGES. HENCE WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LEARNED CIT(APPEALS). ACCORDINGLY WE UPHOLD THE SAME. 6. APROPOS GROUND NO. 2 & 3. WE MAY GAINFULLY REFER TO THE GROUNDS RAISED HERE AS UNDER : 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD CIT(A) IS CORRECT IN HOLDING THAT A MERE DOCUMENT OF POWER OF ATTORNEY IN FAVOUR OF THE ASSESSEE BY THE SELLER/OWNER/POSSESSOR OF THE PROPERTY (M/S ARMOUR DEVELOPERS PVT. LTD.) WOULD MAKE THE ASSESSEE THE LEGAL OWNER OF THE PROPERTY IN HOLDING THE SALE PROCEEDS THERE FROM, TO BE ASSESSED UNDER THE HEAD, CAPITAL GAINS AND NOT INCOME FROM OTHER SOURCES ? 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD CIT(A) IS CORRECT IN HOLDING AN UNREGISTERED DEED OF CLARIFICATION AT PAR WITH A DULY REGISTERED SALE DEED & CONSEQUENTLY HOLDING THAT THE SHARING RATIO OF THE SALE PROCEEDS OF THE PROPERTY SOLD BETWEEN THE SELLERS COULD BE OTHERWISE T HAN THE RATIO OF LAND AREA HELD BY THE SELLERS BETWEEN THEM? 7. WE FIND THAT THE ABOVE GROUNDS CLEARLY RELATE TO A LEGAL ISSUE WHETHER FOR COMPUTATION OF CAPITAL GAINS , I T IS NECESSARY FOR THE TRANSFER DOCUMENTS TO BE REGISTERED AS CAPITAL GAINS ARISES ON TRANSFER OF A CAPITAL ASSET. THE TRANSFER IN RELATION TO CAPIT A L ASSET HAS BEEN DEFINED IN SECTION 2(47) A S UNDER : TRANSFER, IN RELATION TO A CAPITAL ASSET, INCLUDES (I) [THE SALE, EXCHANGE OR RELINQUISHMENT OF THE ASSET; OR (II) THE EXTINGUISHMENT OF ANY RIGHTS THEREIN; OR (III) THE COMPULSORY ACQUISITION THEREOF UNDER ANY LAW; OR (IV) IN A CASE WHERE THE ASSET IS CONVERTED BY THE OWNER THEREOF INTO, OR IS TREATED BY HIM AS, STOCK - IN - TRADE OF A BUSINESS CARRIED ON BY HIM, SUCH CONVERSION OR TREATMENT;] [OR] 4 ITA NO. 190/NAG/2013. [(IV) THE MATURITY OR REDEMPTION OF A ZERO COUPON BOND; OR] [(V) ANY TRANSACTION INVOLVING THE FOLLOWING OF THE POSSESSION OF ANY IMMOVABLE PROPERTY TO BE TAKEN OR RETAINED IN PART PERFORMANCE OF A CONTRACT OF THE NATURE REFERRED O IN SECTION 53A OF THE TRANS FER OF PROPERTY ACT, 1882 (4 OF 1882); OR (VI) ANY TRANSACTION (WHERE BY WAY OF BECOMING A MEMBER OF, OR ACQUIRING SHARES IN, A CO - OPERATIVE SOCIETY, COMPANY OR OTHER ASSOCIATION OF PERSONS OR BY WAY OF ANY AGREEMENT OR ANY ARRANGEMENT OR ANY OTHER MANNER WHATSOEVER) WHICH HAS THE EFFECT OF TRANSFERRING, OR ENABLING THE ENJOYMENT OF, ANY IMMOVABLE PROPERTY. [EXPLANATION 1] - FOR THE PURPOSES, OF SUB - CLAUSE (V) AND (VI) IMMOVABLE PROPERTY SHALL HAVE THE SAME MEANING AS IN CLAUSE (D) OF SECTION 269UA]. [EXPLANATION 2. FOR THE REMOVAL OF DOUBTS, IT IS HEREBY CLARIFIED THAT TRANSFER INCLUDES AND SHALL BE DEEMED TO HAVE ALWAYS INCLUDED DISPOSING OF OR PARTING WITH AN ASSET OR ANY INTEREST THEREIN, OR CREATING ANY INTEREST IN ANY ASSET IN ANY MANNER WHAT SOEVER, DIRECTLY OR INDIRECTLY, ABSOLULTELY OR CONDITIONALLY, VOLUNTARILY OR IN VOLUNTARILY, BY WAY OF AN AGREEMENT, (WHETHER ENTERED INTO IN INDIA OR OUTSIDE INDIA) OR OTHERWISE NOTWITHSTANDING THAT SUCH TRANSFER OF RIGHTS HAS BEEN CHARACTERISED AS BEING E FFECTED OR DEPENDENT UPON OR FLOWING FROM THE TRANSFER OF A SHARE OR SHARES OF A COMPANY REGISTERED OR INCORPORATED OUTSIDE INDIA. FROM THE ABOVE DEFINITION IT IS CLEAR THAT FORMAL REGISTRATION OF DOCUMENT IS NOT A S I NE QUO NON FOR THE TRANSACTION COMING UNDER THE AMBIT OF TRANSFER FOR THE PURPOSE OF CAPITAL GAINS. HENCE THE GROUNDS RAISED BY THE REVENUE IN THIS CA S E ARE NOT SUSTAINABLE. REVENUE HAS NOT DISPUTED THAT THERE HAS ACTUALLY BEEN ANY TRANSFER. REVENUE IS ONLY DISPUTING THE MODE OF TRANSF ER BEING AN UNREGISTERED DEED. HENCE WE FIND THAT THE GROUNDS RAISED IN THIS REGARD DESERVE TO BE DISMISSED. 5 ITA NO. 190/NAG/2013. 8. LEARNED CIT(APPEALS) HAS ALSO DULY DEALT WITH THE ADDITION ON MERITS AS UNDER : 8. I HAVE CONSIDERED THE FACTS OF THE CASE AND THE SUBMISSIONS OF THE APPELLANT. THE APPELLANT HAS ACQUIRED THE SAID PROPERTY BY ENTERING INTO AN AGREEMENT TO SELL WITH ONE M/S ARMOUR DEVELOPERS PVT. LTD. ON 25 TH JULY, 2007 AND PAID THE CONSIDERATION OF RS.102 LACS. THE ASSESSEE HAS RECEIVED PHYSICAL POSSESSION OF THE SAID PROPERTY ON THE DATE OF EXECUTION OF THE AGREEMENT TO SELL AND WAS ALSO HOLDING POWER OF ATTORNEY IN PURSUANCE TO THE AGREEMENT TO SELL. THE SAID TRANSACTION IS DULY REFLECTED IN THE RETURN OF INCOME OF THE PRECEDING YEAR. THE SAID ACQUISITION OF THE ASSESSEE HAS BEEN SHOWN IN THE BALANCE SHEET OF THE ASSESSEE FOR A.Y. 2008 - 09 AT RS. 108 LACS. THUS THE FACT THAT APPELLANT ENTERED INTO AN AGREEMENT FOR PURCHASE OF THE SAID PROPERTY AND THE FACT THAT PHYSICAL POSSESSION OF THE SAID PROPERTY WAS WITH THE APPELLANT IS NOT IN DOUBT. IT IS ALSO DULY REFLECTED IN ITS BOOKS OF ACCOUNT FOR AY 2008 - 09. 8.1 IN THE AY 2009 - 10 THE ASSESSEE HAS SOLD THE SAID PROPERTY TO M/ SANGAMNER LONI INFRASTRUCTURE PVT. LTD. FOR CONSIDERATION OF RS.110 LACS BY ENTERING INTO A RE GISTERED SALE DEED ON 12 TH JULY, 2008. PERUSAL OF THE SAID DEED SHOWS THAT THE PROPERTY HAS BEEN SOLD BY THE ASSESSEE AS A CONSTITUTED ATTORNEY OF M/S ARMOUR DEVELOPERS PVT. LTD. WITH WHOM THE AGREEMENT TO SELL HAD BEEN ENTERED INTO BY THE ASSESSEE ON 25 TH JULY, 2007. THUS IT IS CLEAR THAT APPELLANT WAS LEGAL OWNER OF THE SAID PROPERTY AND ON SALE OF THE SAME HAS RECEIVED THE SAID CONSIDERATION. THE DIFFERENCE BETWEEN PURCHASE PRICE AND SALE PRICE AMOUNTING TO RS.2 LAC HAS BEEN OFFERED CORRECTLY BY THE ASSE SSEE AS SHORT TERM CAPITAL GAIN. THE ACTION OF THE LD. AO TO TAX THE ENTIRE AMOUNT OF RECEIPTS AMOUNTING TO RS. 110 LACS TO BE EITHER COMMISSION OR FEES OR SERVICE CHARGES FOR WORKING AS ATTORNEY IS INCORRECT AND IS THEREFORE DIRECTED TO BE DELETED. THESE GROUNDS ARE THEREFORE ALLOWED. 9. WE FIND THAT THE LEARNED CIT(APPEALS) HAS PASSED A REASONABLE ORDER WHICH DOES NOT NEED ANY INTERFERENCE ON OUR PART. HENCE THESE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 6 ITA NO. 190/NAG/2013. 10. IN THE RESULT THIS APPEAL FILED BY THE REVENUE STAND S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 23 RD DAY OF MARCH, 2017. SD/ - SD/ - (RAM LAL NEGI) ( SHAMIM YAHYA) JUDICIAL MEMBER. ACOUNTANT MEMBER. NAGPUR, DATED: 23 RD MARCH, 2017. COPY FORWARDED TO : 1. SHRI CHANDRAKANT KIMATRAMJI ADWANI, PROP. HARISH WINES SHOP, BAPAT NAGAR, CHANDRAPUR. 2. A.C.I.T., C HANDRAPUR CIRCLE, CHANDRAPUR. 3. CIT(APPEALS) - II, NAGPUR. 4. C.I.T. - IV, NAGPUR. 5. D.R., ITAT, NAGPUR. 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR. WAKODE.