Muzammil Hasan, Lucknow V. Income Tax Officer, Lucknow

ITA 197/LKW/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4349 (ITAT-LUCKNOW)
• Duration Of Justice: 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 12-07-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 19-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Capital asset
• Section: 50C

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH SMC, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER ITA NO.197/LKW/2016 ASSESSMENT YEAR 2011-12 INCOME TAX OFFICER, RANGE 2(2), AAYKAR BHAWAN, ASHOK MARG, LUCKNOW 226001 VS MUZAMMIL HASAN, 49/3,PRAG NARAIN ROAD, OPPOSITE KALYAN BHAWAN, LUCKNOW PAN A ACPH 1355 B (RESPONDENT) (APPELLANT) SHRI MANOJ BHATNAGAR, CA APPELLANT BY SHRI AMIT NIGAM, DR RESPONDENT BY 12/07/2016 DATE OF HEARING 20/07/2016 DATE OF PRONOUNCEMENT O R D E R THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST TH E ORDER OF THE LD. CIT(A) INTER ALIA ON FOLLOWING GROUNDS: 1. ON THE FACTS OF THE CASE THE LEARNED COMMISSION ER OF INCOME TAX (APPEALS)-L, LUCKNOW OUGHT TO HAVE DELETED THE TAXATION OF LONG TERM CAPITAL GAINS IN THE AY 2011-12 ON A FRES H COMPUTATION OF RS 25,74,038/- ON A 'TRANSFER1 WHICH TOOK PLACE IN JULY 2008 IN THE AY 2009-10 WHICH WAS ALREADY DE CLARED AND OFFERED TO TAX BY THE ASSESSE ON HIS OWN IN THE ITR OF AY 2009-10 AS LONG TERM CAPITAL GAINS COMPUTED AT RS 3 ,61,Q59/- ON THE BASIS OF 'TRANSFER' BY HANDING OVER OF PHYSI CAL POSSESSION AFTER RECEIVING FULL CONSIDERATION THROU GH A/C PAYEE CHEQUES, AND THAT THE RENT OF THE PROPERTY, FROM JU LY 2008 ONWARDS, WAS ENJOYED BY THE BUYER AND REFLECTED IN HIS RETURN OF INCOME, ALTHOUGH THE REGISTRY OF THE PROPERTY WA S EXECUTED TWO YEARS LATER AFTER GETTING IT FREEHOLD. 2 2. ON THE FACTS ON THE CASE THE LEARNED COMMISSIONE R OF INCOME TAX (APPEALS)-L, LUCKNOW OUGHT TO HAVE DELETED THE TREATMENT OF RS 50,OQO/- AS THE 'INCOME FROM OTHER SOURCES' O UT OF DECLARED AGRICULTURE INCOME OF RS 2,00,000/-. 2. DURING THE COURSE OF HEARING, LD. COUNSEL FOR THE A SSESSEE HAS INVITED MY ATTENTION THAT HE HAS SOLD THE PROPERTY IN THE ASSE SSMENT YEAR 2009-10, AS THE POSSESSION OF PROPERTY WAS HANDED OVER IN JULY 2008 . THEREFORE, THE CAPITAL GAIN OR LOSS SHOULD HAVE BEEN TAKEN INTO CONSIDERAT ION IN ASSESSMENT YEAR 2009-10 INSTEAD OF IN ASSESSMENT YEAR 2011-12 ADOPT ED BY THE ASSESSING OFFICER ON THE BASIS OF SALE DEED. LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT THE ASSESSEE HAS RECEIVED THE SALE CONSIDERATION IN APRIL 2008 AND HAS ALSO HANDED OVER THE POSSESSION OF THE PROPERTY IN THE Y EAR 2008 BUT FOR CERTAIN REASONS THE SALE DEED COULD NOT BE EXECUTED. THE SA LE DEED WAS EXECUTED IN THE ASSESSMENT YEAR 2011-12, THEREFORE, AT THE TIME OF EXECUTION OF SALE DEED NO CAPITAL GAIN HAS ARISEN TO THE ASSESSEE. FIRST O F ALL THERE IS NO LIABILITY OF CAPITAL GAIN ACCRUED AGAINST THE ASSESSEE, AS THE A SSESSEE HAS ALREADY COMPUTED THE CAPITAL GAIN WHILE FILING THE RETURN F OR THE ASSESSMENT YEAR 2009- 10 AND OFFERED THE CAPITAL GAIN AS SUCH. THEREFORE, NO CAPITAL GAIN CAN BE CHARGED IN THE IMPUGNED ASSESSMENT YEAR. 3. LD. DR OF THE REVENUE HAS PLACED RELIANCE UPON THE ORDER OF THE CIT(A) WITH THE SUBMISSION THAT WHEN THE ASSESSEE HIMSELF HAS HANDED OVER THE POSSESSION OF THE PROPERTY AGAINST THE TOTAL SALE C ONSIDERATION RECEIVED BY HIM IN THE ASSESSMENT YEAR 2009-10, NO JUSTIFIABLE REAS ON WAS FURNISHED BY THE ASSESSEE AS TO WHY THE SALE DEED WAS EXECUTED AFTER TWO YEARS. NO PRUDENT MEN WILL KEEP THE ISSUE OF EXECUTION OF SALE DEED P ENDING AFTER MAKING THE FULL PAYMENT OF SALE CONSIDERATION. 4. HAVING CAREFULLY EXAMINED THE ORDERS OF THE LOWE R AUTHORITIES IN THE LIGHT OF RIVAL SUBMISSIONS, I FIND THAT THE ASSESSEE HAS RECEIVED THE PAYMENT T HROUGH 3 CHEQUE IN THE ASSESSMENT YEAR 2009-10, AFTER HANDIN G OVER THE POSSESSION TO THE BUYER. THOUGH HE HAS OFFERED THE CAPITAL GAIN I N THAT YEAR BUT THE CALCULATION OF CAPITAL GAIN WAS NOT EXAMINED BY THE ASSESSING OFFICER, AS THE ASSESSING OFFICER WAS OF THE VIEW THAT THE CAPITAL GAIN WAS ACCRUED IN THE ASSESSMENT YEAR 2011-12 WHEN THE SALE DEED WAS EXEC UTED. BUT DURING THE COURSE OF HEARING, LD. COUNSEL FOR THE ASSESSEE COU LD NOT FURNISH THE SATISFACTORY EXPLANATION AS TO WHY THE SALE DEED WAS EXECUTED AF TER A PERIOD OF TWO YEARS FROM THE RECEIPT OF SALE CONSIDERATION AND HANDING OVER THE POSSESSION. HOWEVER, I AM OF THE VIEW THAT THIS ASPECT WAS NOT PROPERLY EXAMINED BY THE ASSESSING OFFICER. THEREFORE, THIS ISSUE REQUIRES A PROPER ADJUDICATIO N WHETHER THIS SALE OF CAPITAL ASSETS WAS DONE IN THE ASSESSM ENT YEAR 2009-10 ? IN VIEW OF SECTION 2(47) (V) OF THE ACT IF IT IS HELD THAT CAP ITAL ASSET WAS TRANSFERRED IN THE ASSESSMENT YEAR 2009-10 THEN THE ASSESSING OFFICER SHOULD HAVE ASSESSED CAPITAL GAIN ON THE CAPITAL ASSETS IN THE LIGHT OF THE PROVISIONS OF SECTION 50C OF THE ACT. IF NEED BE, A REFERENCE CAN ALSO BE MADE T O DVO FOR THE VALUATION OF CAPITAL ASSETS AFTER COLLECTING ALL RELEVANT EVIDEN CES. ACCORDINGLY, THE ORDER OF THE CIT(A) IS SET ASIDE AND THE MATTER IS RESTORED TO THE FILE OF THE ASSESSING OFFICER TO READJUDICATE THE ISSUE IN THE TERMS INDI CATED ABOVE. 5. THE OTHER GROUND IN THIS APPEAL IS WITH REGARD T O THE ADDITION OF RS.50,000/- AS INCOME FROM OTHER SOURCES. IN THIS R EGARD IT WAS STATED BY THE ASSESSEES COUNSEL THAT THE ASSESSEE HAS DECLARED T HE AGRICULTURAL INCOME AT RS.2.00 LAKH BUT THE ASSESSING OFFICER HAS ACCEPTED IT TO BE RS.1.50 LAKH AND MADE ADDITION OF DIFFERENCE OF RS.50,000/- AS INCOM E FROM OTHER SOURCES. 6. BEFORE US, ASSESSEE HAS FILED THE AFFIDAVIT OF T HE AGRICULTURAL HOLDINGS. IN THE LIGHT OF AGRICULTURE HOLDING OF THE ASSESSEE, I AM OF THE VIEW THAT AGRICULTURAL INCOME DECLARED BY THE ASSESSEE IS PROPER AND REASO NABLE AND NO INTERFERENCE 4 IS CALLED THEREIN. ACCORDINGLY, I FIND MERIT IN THE CASE OF THE ASSESSEE AND SET ASIDE THE ORDER OF THE CIT(A) AND DELETE THE ADDITI ON IN THIS REGARD. 7. IN THE RESULT, APPEAL OF THE ASSESSEE STANDS ALL OWED FOR STATISTICAL PURPOSES. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DAT E MENTIONED ON THE CAPTION PAGE) SD/- (S.K. YAD AV ) JUDICIAL MEMBER DATED: 20/07/2016 AKS COPY OF THE ORDER FORWARDED TO : 1.THE APPELLANT 2.THE RESPONDENT. 3.CONCERNED CIT 4.THE CIT(A) 5.D.R., I.T.A.T., LUCKNOW ASSTT. REGIS TRAR