Assistant Commissioner of Income-tax, Pune V. Late Jaiprakash Ramkrishna Kanyadi, Pune

ITA 2034/PUN/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1110 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 8 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 06-06-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 25-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIL CHAWARE
• Assessee Lawyers: PYAYAG I PATWA
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Diversion of income; Cost of acquisition
• Section: 50C; 263

Judgement Text

] IQ.KS ] IQ.KS ] IQ.KS ] IQ.KS IQ.KS IQ.KSIQ.KS IQ.KS IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE , . . , # BEFORE MS. SUSHMA CHOWLA, JM AND SHRI R.K. PANDA, AM . / ITA NO.2034/PN/2013 % % / ASSESSMENT YEAR : 2009-10 ACIT, CIRCLE - 5, PUNE . / APPELLANT V/S LATE JAIPRAKASH RAMKRISHNA KANYADI, L/H SMT. NIRUPAMA JAYPRAKASH RAO, A-2/1, BHOSALE PARADISE,RANGE HILLS ROAD, SHIVAJINAGAR,PUNE. PAN NO. AJFPK9592D . / RESPONDENT / APPELLANT BY : SHRI ANIL CHAWARE / RESPONDENT BY : SHRI PYAYAG I. PATWA / ORDER PER R.K. PANDA, AM : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 06-09-2013 OF THE CIT(A)-III, PUNE RELATING TO THE ASSESSMENT YEAR 2009-10. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS A N INDIVIDUAL AND FILED HIS RETURN OF INCOME ON 28-07-2009 DECLA RING TOTAL INCOME AT RS.41,76,538/. T HE ASSESSEE HAD SHOWN INCOME FROM SHOR T TERM CAPITAL GAIN IN RESPECT OF TRANSFER OF PLOT OF LAND ADMEASURING 7 HECTARES 57 R AT NEW SURVEY NOS . 21, 22 AND 23, VILLAGE MOGHARPADA, DIST . THANE . THE LAND HAD BEEN PURCHASED VIDE AGREEMENT FOR SALE DATED 29.10.2006 WHICH WAS DULY / DATE OF HEARING :19.07.2016 / DATE OF PRONOUNCEMENT:12.08.2016 2 ITA NO.2034/PN/2013 REG I STERED W I TH THE SUB REGISTRAR THANE. THE FINAL DEED OF CONVEYANCE WAS SIGNED ON 08-08-2008 FOR A TOTAL PURCH ASE CONSIDERATION OF RS . 90,00 , 000/- FROM THE BHISE FAM I LY OF THANE. THE ASSESSEE AND HIS WIFE SMT . NIPURAMA JAYPRAKASH RAO WERE CO- OWNERS HAVING 50% SHA R E EACH. THUS THE COST OF ACQUISITION IN THE HANDS OF EACH CO-OWNER WAS RS . 48,26 , 430/-. THE ASSESSEE ENTERED INTO AN MOU ON 22-12-2006 WITH ONE SHR I DANSINGH MAWRI , FOR SELLING THE P L OT ON 'AS IS WHERE IS ' BASIS FOR A TOTAL CONSIDERATION OF RS.1,50,00 , 000/- . HOWEVER, THE PROPERTY WAS EVENTUA LL Y SOLD VIDE DEED OF CONVEYANCE DATED 29.08.2008, TO M/S. TANVI INFRAST RUCTURE AND DEVELOPERS PVT. LTD . FOR A CONSIDERATION OF RS. 3,25,00,000/- . SHRI DANSINGH MAWR I WAS A CONSENT I NG PARTY TO THE SAID TRANSACTION AND WAS PAID RS . 1 , 50,00 , 000/- . SINCE THE MARKET VALUE OF THE PROPERTY FOR STAMP DUTY PURPOSES AS PER I NDEX-II WAS RS . 4,83,26 , 720/- THE ASSESSING OFFICER INVOKED THE PROVISION OF SEC. 50C AND REFERRED THE VALUATION OF THE PROPERTY TO T HE DVO. THE DVO VALUED THE PROPERTY VIDE HIS LETTER DATED 07-1 2-2011 AT RS. 3,68,29,080/- . THE AO ADOPTED THIS FIGURE FOR COMPUTING THE INCOME FROM CAPITAL GAINS IN THE HAND OF THE ASSESSEE AND THERE IS NO DISPUTE ON THIS ISSUE. 3 . THE AO ASKED THE ASSESSEE VIDE LETTER DATED 09-12-201 1, TO JUSTIFY THE REASON FOR PAYMENT OF RS . 1.5. CRORE, OUT OF THE TOTAL CONSIDERATION TO SHRI DANSINGH MAWRI, ALONG WITH COMPLETE DOCUMENTARY EVIDENCES IN SUPPORT OF THE EFFORTS MADE BY THE CONSENTING PARTY TOWARDS PERFORMANCE OF THE TERMS AND COND I TIONS OF THE MO U . THE ASSESSEE WAS ALSO ASKED TO JUST I FY T HE PAYMENT T O SH RI MAWR I , ESPECIALLY IN VIEW OF FACT THAT THE PROPERTY COULD NOT BE SOLD TO SHRI MAWRI DUE TO HIS FINANCIAL POSITION AND THEREFO RE THE 3 ITA NO.2034/PN/2013 MOU REMAINED INCONCLUSIVE . THE ASSESSEE SUBMITTED IN HIS REPLY THAT THE PARA 2 OF MOU CLEARLY SPECIFIED THAT THE TRANSACTION SHALL BE CONSIDERED TO BE CONCLUDED ON THE FINAL DECISION OF THE APPEAL FILED BY SOME OF THE ENCROACHERS OF THE LAND OR IF THE PART Y OF THE SECOND PART I . E. SHRI DANSINGH MAWRI DECIDED TO SELL THE LAND IN FAVOUR OF ANOTHER PURCHASER . THE ASSESSEE'S CONTENTION WAS THAT THIS CLAUSE CREATED EFFECTIVE RIGHTS IN FAVOUR OF SHRI MAWRI . THE AOS ATTENTION WAS ALSO DRAWN TO CLAUSE 9 OF THE MOU, AC CORDING TO WHICH THE ASSESSEE HAD THE RIGHT TO CANCEL THE MOU, ONLY IN A SITUATION WHERE SHRI MAWRI FAILED TO PAY THE BALANCE CONSIDERATION, AFTER DECISION OF THE RTS APPEAL . THEREFORE, ACCORDING TO THE ASSESSEE, THE TERMS OF THE MOU MADE IT CLEAR THAT HE AND THE CO-OWNER HAD NO RIGHT TO SELL THE PROPERTY TO ANY OTHER PERSON OTHER THAN SHRI MAWRI TILL THE APPEAL WAS DECIDED. SINCE THE APPEAL REMAINED UNDECIDED TILL THE DATE OF SALE, SHRI MAW RI HAD RIGHT/TITLE ON THE PROPERTY AS ACKNOWLEDGED IN THE FIN AL SALE AGREEMENT WITH M/S. TANVI INFRASTRUCTURE AND DEVELOPERS PVT . LTD . IT WAS ARGUED THAT IT WAS ONLY BECAUSE OF HIS EFFORTS THAT THE FINAL DEAL COULD BE NEGOTIATED WITH THE PURCHASE R . 4. HOWEVER, THE AO DID NOT ACCEPT THE JUSTIFICATION PUT FORW ARD BY THE ASSESSEE. ACCORDING TO THE AO THE ASSESSEE CO ULD NOT JUSTIFY THAT ANY EFFORTS WERE MADE BY SHRI MAWRI TO GET THE RTS DECIDED . THE AO ALSO HELD THAT THE CLAUSE 9 OF THE MOU HAD BECOME REDUNDANT AS NEITHER THE APPEAL HAD BEEN DECID ED NOR THE BALANCE CONSIDERATION HAD BEEN PAID BY SHRI MAWRI . THE AO ALSO INTERPRETED CLAUSE 8 OF THE MOU WHICH MENTIONED THAT FINAL CONVEYANCE WOULD BE GIVEN TO SHRI MAWRI ONLY ON RECEIPT OF THE ENTIRE CONSIDERATION OR IN FAVOUR OF OTHER INTENDING PURCHA SERS TO 4 ITA NO.2034/PN/2013 MEAN THAT THE MOU DID NOT CONVEY ANY ABSOLUTE RIGHT ON SHRI MAWRI TO DIRECT THE ASSESSEE TO EXECUTE THE CONVEYANC E DEED IN FAVOUR OF A THIRD PERSON OF HIS CHOICE. THE AO ALSO HELD THA T THE MOU WAS NOT A REGISTERED DOCUMENT AND HAS BEEN EXEC UTED ON A STAMP PAPER OF RS.100/- ONLY AND THE STAMP THERE ON IS DATED 29- 10-2 006. SHE OBSERVED THA T SHRI MAWRI HAD BEEN VESTED IN THE R I GHTS OF THE LAND ON THE BASIS OF WHICH HE HAS RECEIVED R S . 1.5 CRORES BY PAYING MERELY RS. 5,00.000/ - AT THE TIME OF SIGNING THE MOU, WHEREAS THE ASSESSEE WHO IS THE LEGAL OWNER, HAS INV ESTED RS . 90,00,000/- AND HAS RECEIVED ONLY RS . 1 . 75 CRORES . THE CONVEYANCE DEED DOES NOT REVEAL THAT SHRI MAWRI NEGOTIA TED THE FINAL SALE TO M/S. TANVI INFRASTRUCTURE AND DEVELOPERS PVT . LTD. THE AO, THEREFORE, CONSIDERED THE PAYMENT OF RS . 1 . 5 CRORES MADE TO SHRI MAWRI AS UNJUSTIFIED AND ADDED HALF OF THIS AMOUNT NAME LY RS.75,00,000/- IN THE HANDS OF THE ASSESSEE FOR COMPUTIN G THE INCOME FROM SHORT TERM CAPITAL GAINS. 5. BEFORE THE CIT(A) THE ASSESSEE CHALLENGED THE VALIDITY OF AO'S ACTIONS IN IGNORING THE MOU BETWEEN THE ASSESSEE AND SH RI MAWRI, IGNORING THE SALE AGREEMENT DATED 29.08.2008 WHEREIN THE CONSIDERATION OF RS. 1.50 CRORES HAS BEEN DIRECTLY PAID TO SHRI MAWRI AND IN HOLDING THAT NO RIGHTS OVER THE PROPERTY WE RE CREATED IN FAVOUR OF THE CONFIRMING PARTY SHRI MAWRI . IT WAS ARGUED THAT THE MOU DATED 22-12-2006 IS A CONTRACT FOR SALE IN TERM S OF TRANSFER OF PROPERTY ACT, 1882 AND SINCE NEITHER THE MOU NOR THE GPA GIVEN IN FAVOUR OF SHRI MAWRI HANDED OVER POSSESSION O R PART POSSESSION TO SHRI MAWRI IN ACCORDANCE WITH SEC . 53A OF THE TRANSFER OF PROPERTY ACT, 1882, IT DID NOT REQUIRE ANY REG ISTRATION. THE ASSESSEE FILED EXHAUSTIVE SUBMISSIONS BEFORE CIT(A) JUST IFYING 5 ITA NO.2034/PN/2013 THE PAYMENT OF RS.1.50 CRORE TO THE CONFIRMING PARTY BY T HE BUYER AS PER THE MOU. 6. BASED ON THE ARGUMENTS ADVANCED BY THE ASSESSEE THE LD.CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE BY OBSERVING AS UNDER: 3.4. THE SHORT ISSUE TO BE DECIDED AND ADJUDICATED I N THIS APPEAL IS WHETHER THE MOU DATED 22.12.2006, EXECUTED BY THE A SSESSEE IN FAVOUR OF SHRI DANSINGH MAWRI CREATED CERTAIN RIGHTS IN THE HANDS OF SHRI MAWRI , ENTITLING H I M TO A SHARE OF THE SALE CONSIDERATION AS CONSENTING PARTY . AT THIS STAGE, IT IS NECESSARY TO RECAPITULATE THE , FACTS OF THE CASE IN ORDER TO APPRECIATE THE LEGAL IMPLICA TIONS. THE ASSESSEE AND HIS WIFE ENTERED INTO AN AGREEMENT TO PURCHASE THE IMPUG NED PROPERTY ON 29.10.2006 . ADMITTEDLY, THE PROPERTY WAS A LITIGATED PROPERTY AND THE NAMES OF CERTAIN AGRICULTURISTS ARE R ECORDED IN THE 7/12 EXTRACTS AS PROTECTED TENANTS. THE SELLER OF THE PROPERTY I . E . THE BHISE FAMILY HAD FILED AN APPEAL BEARING RTS APPEAL NO. 24/2005 BEFORE THE SDO, THANE AGAINST THE MUTATION ENTRIES RE CORDING THE R I GHTS OF THE PROTECTED TENANTS. THERE WERE ALSO CERTAI N OTHER ENCUMBRANCES ON THE PROPERTY BY OTHER TRESPASSERS. THE P ROPERTY WAS THUS AGREED TO BE TRANSFERRED TO THE ASSESSEE AND HIS WIFE ON 'AS IS WHERE IS' BASIS FOR A CONSIDERATION OF RS.90 , 00,000/ - THE ASSESSEE AND HIS WIFE PAID AN AMOUNT OF RS . 77 , 00 , 000/- UPTO THE DATE OF SIGNING THE AGREEMENT AND THE BALANCE RS.13,00 , 00/-WAS PAYABLE WITHIN 45 DAYS OF THE DATE OF EXECUTION. 3.5 THEREAFTER, THE APPELLANT ENTERED INTO AN MOU O N 22.12.2006 WITH SHRI MAWRI, R/O. THANE, WHO WAS APPARENTLY IN T HE BUSINESS OF DEVELOPING AND SELLING LANDS. THE MOU MENTIONED THE FACT THAT THERE ARE A NUMBER OF ILLEGAL TRESPASSERS INHABITING THE SAID LANDS AND CLAIMING RIGHT THEREON. THE LAND WAS AGREED TO BE SO LD FOR A CONSIDERATION OF RS.1 . 50 CRORES ON 'AS IS WHERE IS BASIS'. A SUM OF RS . 5 LAKHS WAS RECEIVED BY THE APPELLANT AS EARNEST MONEY A ND THE SALE WAS TO BE CONCLUDED ON L Y O N THE F I NAL D I SPOSAL OF THE APPEAL FILED AGAINS T THE T RESPASSERS . S H RI MAW RI WAS . SPECIFICALL Y I N FORMED OF THE RTS APPEAL FILED BY SHRI BHISE AND OTHERS (SELLER OF THE LAND) AND WAS REQUIRED TO TAKE NECESSARY STEPS TO PROSECUTE THE APPEA L . CLAUSE - 2 OF THE MOU WHICH DEALT WITH THE ABOVE ISSUE ALSO MENTIONS THAT THE LAND WAS TO BE SOLD IN FAVOUR OF ANY THIRD PARTY AS DIRECT ED BY SHRI MAWRI BY EXECUTING THE SALE DOCUMENTS IN FAVOUR OF THE SAID THIRD PARTY. 3 . 6. CLAUSE-9 OF THE MOU IS ALSO IMPORTANT AND IS THEREF ORE REPRODUCED BELOW : 'IF THE PARTY OF THE SECOND PART FAILS TO PAY THE BA LANCE AMOUNT OR PURCHASE PRICE AFTER THE ABOVEMENTIONED APPEAL HAS BE EN DECIDED THE PARTY OF THE FIRST PART SHALL BE AT LIBER TY TO EITHER REVOKE OR CANCEL THIS TRANSACTION AND FORFEIT THE EAR NEST MONEY RECEIVED OR CONTINUE WITH THIS MEMORANDUM OF UNDERSTA NDING.' 6 ITA NO.2034/PN/2013 3.7. WHEN CLAUSE-2 OF MOU IS R/W CLAUSE-9 IT BECOMES C LEAR THAT THE AGREEMENT TO SELL THE PROPERTY IN FAVOUR OF SHRI MAWRI IS CONTI NGENT ON THE EVENT THAT THE RTS APPEAL FILED AGAINST THE T RESPASSERS STANDS DECIDED. THE MOU WOULD GET CANCELLED/REVOKED IF AFT ER THE DECISION THE APPEAL, SHRI MAWRI IS UNABLE TO PAY THE BALANCE THAT IS DUE FROM HIM. THUS, WHEN THESE TWO CLAUSES ARE READ TOGETHER, IT IS CLEAR THAT THE MOU CREATES CERTAIN RIGHT IN THE HANDS OF SHRI MA WRI SINCE (A) EVEN AFTER THE DECISION OF THE RTS APPEAL AND NON-PA YMENT/NON- PROSECUTION BY SHRI MAWRI, THE MOU COULD BE CONTINUE D; ( B) PRIOR TO THE DECISION TO THE APPEAL, THE PROPERTY COULD BE SOL D IN FAVOUR OF THIRD PARTY AS DIRECTED BY SHRI MAWRI . THEREFORE, THE MOU SIGNED WITH SHRI MAWRI DOES NOT RESULT IN TRANSFER OR RELINQUISHMEN T OF CAPITAL ASSET AS DEFINED U/S 2(47) OF THE IT ACT, 1962 BUT IS A SPECIFIC CONTRACT FOR SALE. NEITHER THE PROPERTY STANDS TRANSFERRED NOR P OSSESSION IS GIVEN IN TERMS OF SEC . 53A OF THE TRANSFER OF PROPERTY ACT, 1882 . THE MOU SPECIFICALLY INVESTS SHRI MAWRI WITH THE OBJECTIVE OF EITHER TAKING THE RTS APPEAL TO THE LOGICAL CONCLUSION OR TO EXECU TE THE NECESSARY CONVEYANCE IN FAVOUR OF THE INTENDING PURCHASER. BE ING IN THE NATURE OF CONTRACT OF SALE, THE MOU IS SEEN TO REQUIRE NO REG ISTRATION IN TERMS OF SEC.17(1A) OF THE INDIAN REGISTRATION ACT, 1908 A ND THE ASSESSING OFFICER WAS NOT JUSTIFIED IN REJECTING THE MOU ON THE GROUND. 3.8. IT IS ALSO SEEN THAT THE APPELLANT AND HIS WIFE H AVE SIGNED A GENERAL-POWER OF ATTORNEY IN FAVOUR OF SHRI MAWRI V IDE REGISTERED DEED DATED 07.03.2008, WHEREIN HE HAS BEEN VESTED WIT H THE FULL POWER TO APPEAR AND ACT BEFORE ALL COURTS AND AUTHOR ITIES INCLUDING LAND ACQUISITION, FOREST, TOWN PLANNING, REGISTRATION, PUBLIC WORKS ETC AND ALSO TO MAKE NECESSARY APPLICATION TO THANE MUNICI PAL CORPORATION FOR SANCTION OF BUILDING PLAN, TO THE RE VENUE AUTHORITIES FOR CONVERSION OF PROPERTY OF NON-AGRICULTURAL PURPO SES AND TO THE AUTHORITIES UNDER URBAN LAND (CEILING REGULATION) AC T FOR THE NECESSARY PERMISSION FOR DEVELOPMENT OF THE SAID PROPER TY. 3 . 9. THE APPELLANT HAS CONTENDED THAT THE MOU WAS ENTE RED INTO IN VIEW OF THE FACT THAT IT WAS DIFFICULT ON HIS PART TO ATTEND TO THE DISPUTE MATTER DUE TO HIS HEALTH PROBLEMS AND AGE . SINCE , SHRI MAWRI WAS IN BUSINESS OR DEVELOPING AND SELLING OF THE LAND, AND WAS BASED IN THANE, HE WAS ENTRUSTED WITH THE RESPONSIBILITY OF CLEA NING OF THE LAND AND FINDING A VENDOR FOR THE SAME IN THE EVENT THAT THE TRESPASSERS COULD NOT BE EVICTED . THE SECURITY DEPOSIT RS. 2,50 , 000/- RECEIVED BY THE APPELLANT HAS BEEN DULY SHOWN IN THE RETURN OF IN COME FILED FOR THE A . Y . 2007-08. THESE FACTS ARE SEEN TO BE BORNE OUT FROM TH E RECORD AND CLARIFIED THE INTENTION OF THE APPELLANT . FURTHER, AS PER THE FINAL SALE DEED DATED 29.08 , 2008, AN AMOUNT OF RS . 1,50,000/- HAS BEEN DIRECTLY PAID BY THE PURCHASER TO SHRI DANSIGH MAWRI . IN THE ABSENCE OF ANY CONTRARY FACT BEING BROUGHT ON RECORD BY THE ASSESSING OFFICER THAT THE MONEY HAS NOT BEEN RECEIVED BY SHRI MAWRI OR THAT IT HAS ACTUALLY BEEN PAID TO THE APPELLANT AND HIS WIFE, IT HAS TO BE HELD THAT THE CONSIDERATION BEING DIRECTLY RECEIVED BY SHRI MAWRI IS ASSESSABLE IN HIS HANDS ONLY, AND THE SAME CANNOT BE ASSESSED IN THE HA NDS OF THE APPELLANT . THE ASSESSING OFFICER IS DIRECTED TO COMMUNICATE THE INFORMATION REGARDING RECEIPT OF RS. 1 . 5 CRORES BY SHRI DANSINGH MAWRI TO HIS ASSESSING OFFICER, AS INFORMED TO HER DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS. GROUND NOS.2 TO 5 ARE THUS ALLOWE D. 7 ITA NO.2034/PN/2013 7. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REVENUE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : 1. THE ORDER OF THE COMMISSIONER OF INCOME -TAX (AP PEALS) IS CONTRARY TO THE LAW AND FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE COMMISSIONER OF INCOME-TAX (APPEALS) ERRED ON FACTS AND IN LAW IN ALLOWING THE RELIEF OF RS.1.5 CRORE, GROSSLY IGNORING THE FACTS THAT THE BASE OF ADDITION BY THE ASSESSING OFFICER IS VALUATIO N DETERMINED BY THE DVO VIDE ORDER DATED 22-10-2011 AND NOT THE SALE CONSIDERATION RECEIVED UNDER THE DEED OF CONVEYANCE DATED 29-08-2 008 AND THE DVO HAS VALUED THE PROPERTY AFTER CONSIDERING THE OBJECTI ON OF ONGOING LITIGATION ETC. RAISED BY THE ASSESSEE; HENCE FURTHER DE DUCTION WILL AMOUNT TO DOUBLE DEDUCTION. 3. FOR THESE AND SUCH ABOVE OTHER GROUNDS AS MAY BE UR GED AT THE TIME OF THE HEARING, THE ORDER OF THE LEARNED CIT(A PPEALS) MAY BE VACATED AND THAT OF THE ASSESSING OFFICER BE RESTORED. 4. THE APPELLANT CRAVES , LEAVE TO ADD, AMEND , ALTER OR DELETE ANY OF T H E ABOVE GROUND OF APPEAL DURING THE COURSE OF THE AP PE L LAN T PROCEEDINGS BEFORE THE ITAT . 8. THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY OPPOSE D THE ORDER OF THE CIT(A). HE SUBMITTED THAT CIT(A) WAS NOT JUS TIFIED ON FACTS AND IN LAW IN ALLOWING THE RELIEF OF RS.1.5 CRORE ESPECIALLY WHEN THE ASSESSEE WAS UNABLE TO JUSTIFY THE EFFORTS MAD E BY THE CONSENTING PARTY TOWARDS PERFORMANCE AND THE TERMS AN D CONDITIONS OF THE MOU. HE SUBMITTED THAT THE AMOUNT OF R S.1.5 CRORE PAID TO MR.MAWRI IS NOTHING BUT DIVERSION OF INCOME S O AS TO AVOID THE LONG TERM CAPITAL GAIN TAX IN THE HANDS OF THE A SSESSEE AND THE CO-OWNER. HE SUBMITTED THAT THE ORDER OF THE AO IS BASED ON FACTS AND THEREFORE THE ORDER OF THE CIT(A) BE SET AS IDE AND THAT OF THE AO BE RESTORED. 9. THE LD. COUNSEL FOR THE ASSESSEE ON THE OTHER HAND WHILE SUPPORTING THE ORDER OF THE CIT(A) SUBMITTED THAT ASSESS EE HAS 50% SHARE IN THE LAND AND THE OTHER 50% BELONGS TO HIS WIFE. IN THE CASE OF THE WIFE, ASSESSMENT HAS BEEN COMPLETED U/S.1 43(1) 8 ITA NO.2034/PN/2013 AND NO PROCEEDINGS U/S.147 OR 263 HAS BEEN INITIATED. TH EREFORE, WHEN IN THE HANDS OF THE WIFE, THE PAYMENT OF RS.75 LAKHS H AS BEEN ALLOWED, THEREFORE, IT IS NOT UNDERSTOOD AS TO HOW TH E DEPARTMENT CAN CHALLENGE THE ORDER OF THE CIT(A) NOW FOR ALLOWING THE RELIEF. HE ACCORDINGLY SUBMITTED THAT THE ORDER OF TH E CIT(A) BE UPHELD AND THE GROUNDS RAISED BY THE REVENUE BE DISMISSED. 10. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOT H THE SIDES, PERUSED THE ORDERS OF THE AO AND CIT(A) AND THE P APER BOOK FILED ON BEHALF OF THE ASSESSEE. IN THE INSTANT CASE THE ASSESSEE HAD SHOWN THE INCOME FROM SHORT TERM CAPITAL GAIN IN RESP ECT OF TRANSFER OF A PLOT OF LAND AT VILLAGE MOGHARPADA. THE LAND WAS PURCHASED VIDE AGREEMENT FOR SALE DATED 29-10-2006 AND THE FINAL DEED OF CONVEYANCE WAS SIGNED ON 08-08-2008 FOR A TOTA L PURCHASE CONSIDERATION OF RS.90 LAKHS FROM THE BHISE FAMILY OF THANE. THE ASSESSEE AND HIS WIFE SMT. NIRUPAMA JAYPRAKASH RAO WERE CO- OWNERS HAVING 50% SHARE EACH. THE ASSESSEE ENTERED IN TO AN MOU ON 22-12-2006 WITH ONE SHRI DANSINGH MAWRI FOR SELLING THE PLOT ON AS IS WHERE IS BASIS FOR A TOTAL CONSIDERATION OF RS .1.50 CRORE. SUBSEQUENTLY, THE PROPERTY WAS SOLD VIDE DEED O F CONVEYANCE DATED 29-08-2008 TO M/S. TANVI INFRASTRUCTU RE AND DEVELOPERS PVT. LTD. FOR A TOTAL CONSIDERATION OF RS.3,25,00,00 0/-. AS PER THE SALE DEED, SHRI DANSINGH MAWRI WAS A CONSENTIN G PARTY TO THE SAID TRANSACTION TO WHOM AN AMOUNT OF RS.1.5 CROR E WAS PAID. THE ASSESSEE HAD COMPUTED THE SHORT TERM CAPITA L GAIN BY DEDUCTING THE AMOUNT OF RS.1.50 CRORE FROM THE TOTAL SALE CONSIDERATION. THE AO DISALLOWED THE CLAIM OF DEDUCTION OF RS .1.5 CRORE OUT OF THE TOTAL CONSIDERATION BUT IN APPEAL THE LD .CIT(A) ALLOWED THE SAID CLAIM. 9 ITA NO.2034/PN/2013 11. IT IS THE GRIEVANCE OF THE REVENUE THAT THE CIT(A) W AS NOT JUSTIFIED IN ALLOWING THE DEDUCTION OF RS.1.5 CRORE PAID TO MAWRI FOR COMPUTING THE SHORT TERM CAPITAL GAIN. IT IS THE SUBMISSIO N OF THE LD. COUNSEL FOR THE ASSESSEE THAT SINCE THE PAYMENT HAS BEEN MADE BY THE PURCHASER TO THE CONSENTING PARTY DIRECTL Y AND SINCE IN THE CASE OF THE WIFE OF THE ASSESSEE, NO ACTION HAS BEE N TAKEN U/S.147 OR 263, THEREFORE, THE ORDER OF THE CIT(A) BE UPHELD. 12. WE FIND FORCE IN THE ABOVE ARGUMENT OF THE LD. COUNS EL FOR THE ASSESSEE. ADMITTEDLY, THE ASSESSEE AND HIS WIFE AR E THE CO- OWNERS IN THE SAID PLOT. BOTH OF THEM HAVE SHOWN SHORT TERM CAPITAL GAIN ON ACCOUNT OF SALE OF THE PLOT. THE LD. COUNSE L FOR THE ASSESSEE FILED A COPY OF THE STATEMENT OF INCOME OF THE WIFE OF THE ASSESSEE FOR THE YEAR 2008-09 ALONG WITH THE ACKNOWLEDG EMENT WHEREIN THE SHORT TERM CAPITAL GAIN ON ACCOUNT OF SALE OF PLOT HAS BEEN DECLARED AT RS.36,70,070/-. ALTHOUGH THE ASSESSMENT HAS BEEN COMPLETED U/S.143(1) THE LD. DEPARTMENTAL REPRESENTA TIVE COULD NOT CONTROVERT THE SUBMISSION OF THE LD. COUNSEL FO R THE ASSESSEE THAT NO PROCEEDINGS U/S.147 OR 263 HAS BEEN INITIATED IN THE CASE OF THE WIFE OF THE ASSESSEE. SINCE THE REVENUE HAS NOT DISTURBED THE RETURN FILED BY THE WIFE OF THE ASSESSEE CLAIM ING THE SHORT TERM CAPITAL GAIN AFTER THE DEDUCTION OF RS.1.5 CROR E PAID TO MR. MAWRI AND SINCE THE AMOUNT OF RS.1.5 CRORE HAS BEEN DIRECTLY PAID TO MR. MAWRI BY THE BUYER, THEREFORE, UNDER THE ABOV E FACTS AND CIRCUMSTANCES OF THE CASE AND IN VIEW OF THE DETAILED REASONING GIVEN BY THE LD.CIT(A) ON THIS ISSUE, WE FIND NO IN FIRMITY IN HIS ORDER. NOTHING CONTRARY WAS ALSO BROUGHT TO OUR NOTICE BY THE LD. DEPARTMENTAL REPRESENTATIVE AGAINST THE FACTUAL FINDINGS GIVEN BY THE CIT(A). UNDER THESE CIRCUMSTANCES, WE FIND NO 10 ITA NO.2034/PN/2013 INFIRMITY IN THE ORDER OF THE CIT(A). ACCORDINGLY, THE SAME IS UPHELD AND THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 13. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 12-08-2016. SD/- SD/- ( SUSHMA CHOWLA ) ( R.K. PANDA ) JUDICIAL MEMBER ACCOUNTANT MEMBER IQ.KS PUNE ; DATED : 12 TH AUGUST , 2016. LRH'K ' (*+ ,+ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. % ( ) - THE CIT(A)-III, PUNE 4. % S / THE CIT-III, PUNE 5. ( ++, , , , IQ.KS / DR, ITAT, A PUNE; 6. 0 / GUARD FILE. / BY ORDER , ( + //TRUE COPY// 23 + , / SR. PRIVATE SECRETARY ,, IQ.KS / ITAT, PUNE