The ITO-1, Ratlam V. Shri Kalimuddin Badnawarwala, Ratlam

ITA 204/IND/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7962 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 9 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 10-12-2018
• Assessment Year: 2008-2009
• Appeal Filed On: 09-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K G GOYAL
• Assessee Lawyers: T H KHAMOSI; KAID KANGSAWALA A RS
• Keywords: Cost of acquisition
• Section: 143(3)

Judgement Text

[ITA 204 & 205/IND/2017] [SHRI KALIMUDDIN BADNAWARWALA & SMT. BILKIS BAI BADNAWARWALA, RATLAM] , , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO.204/IND/2017 ASSESSMENT YEAR: ITO - 1 RATLAM / VS. SHRI KALIMUDDIN BADNAWARWALA 34, KADRI COLONY, RATLAM (M.P.) (REVENUE ) (APPELLANT) P.A. NO. AIGPB9948J ITA NO.205/IND/2017 ASSESSMENT YEAR: ITO - 1 RATLAM / VS. SMT. BILKIS BAI BADNAWARWALA, 94, SAIFEE MOHALLA, RATLAM (M.P.) (REVENUE ) (APPELLA NT) P.A. NO. AIGPB2128Q APPELLANT BY SHRI K.G. GOYAL, SR. D.R. RESPONDENT BY SHRI T.H. KHAMOSI & SHRI KAID KANGSAWALA, A.RS DATE OF HEARING: 10.12.2018 DATE OF PRONOUNCEMENT: 08.01.2019 [ITA 204 & 205/IND/2017] [SHRI KALIMUDDIN BADNAWARWALA & SMT. BILKIS BAI BADNAWARWALA, RATLAM] 2 / O R D E R PER KUL BHARAT, J.M: THESE TWO APPEALS BY THE REVENUE AGAINST TWO DIFFERENT ORDERS OF THE LD. CIT(A), UJJAIN PERTAINING TO THE ASSESSMENT YEAR 2008-09. BOTH THE APPEALS WERE TAKEN U P TOGETHER AS THE ISSUES ARE COMMON AND ARE BEING DISPOSE D OF BY WAY OF A CONSOLIDATED ORDER. 2. FIRST WE TAKE UP ITA NO.205/IND/2017. THE REVENU E HAS RAISED FOLLOWING GROUNDS OF APPEAL: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE L D. CIT(A) ERRED IN 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, LD. CIT HAS ERRED IN DELETING THE ADDITION OF RS.25,75,513/- ON ACCOUNT OF LONG TERM CAPITAL GAIN. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, LD. CIT HAS ERRED IN DELETING THE ADDITION OF RS.25,75,513/- ON ACCOUNT OF LONG TERM CAPITAL GAIN IGNORING THE PROVISIONS OF TRANSFER OF PROPERTY ACT, WHEREIN IT IS MANDATORY TO REGISTER ANY CHANGE IN RIGHT, TITLE OR ENTITLEMENT TO BE REGISTERED BEFORE THE REGISTERING AUTHORITY I.E. SU B REGISTRAR AND STIPULATED STAMP DUTY, AS PER PREVAILING CIRCLE RATE OF JANTRI RATES SHALL HAVE TO BE PAID. ONLY AFTER COMPLETION OF SUCH LEGAL FORMALIT IES, THERE CAN BE VALID TRANSFER OF IMMOVABLE PROPERTY. 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, LD. CIT HAS ERRED IN DELETING THE ADDITION OF RS.25,75,513/- ON ACCOUNT OF LONG TERM CAPITAL GAIN IGNORING THAT TRANSFER CLAIM ENTITIES CREATED THERE UNDER AS CO- OWNER ALSO HAVE NO LEGAL SANCTITY. AS SUCH, 25% SH ARE IN WHOLE BUILDING [ITA 204 & 205/IND/2017] [SHRI KALIMUDDIN BADNAWARWALA & SMT. BILKIS BAI BADNAWARWALA, RATLAM] 3 TRANSFERRED BY MRS. BILKISBAI BADNAWARWALA IN FAVOU IR OF HER SON MR. KALIMUDDIN BADNAWARWALA IS VOID. NOTE: THE MATTER IS COVERED UNDER THE EXCEPTION AS MENTIONED IN PARA 8(C) OF CIRCULAR 21/2015. THE APPELLANT RESERVES HIS RIGHT TO ADD, AMEND OR A LTER THE GROUNDS OF APPEAL ON OR BEFORE THE DATE; THE APPEAL IS FINALLY HEARD FOR DISPOSAL. 4. BRIEFLY STATED FACTS ARE THAT CASE OF THE ASSESSEE WAS REOPENED FOR ASSESSMENT AND THE ASSESSMENT U/S 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 (HERE INAFTER CALLED AS THE ACT) WAS FRAMED VIDE ORDER DATED 29.2.20 16. WHILE FRAMING THE ASSESSMENT, THE A.O. MADE ADDITION OF RS.25,75,513/- AND ASSESSED THE INCOME AT RS.26,09,433 /- AGAINST THE DECLARED INCOME OF RS.33,950/-. THE A.O. OBSERVED THAT THE ASSESSEE HAD CLAIMED CAPITAL LOSS OF RS.1,03,206/- ON THE LAND SOLD FOR RS.1,50,00,000/-. 5. AGGRIEVED BY THE FINDING OF THE A.O., AN APPEAL WAS FILED BY THE ASSESSEE BEFORE LD. CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS DELETED THE ADDITIONS. [ITA 204 & 205/IND/2017] [SHRI KALIMUDDIN BADNAWARWALA & SMT. BILKIS BAI BADNAWARWALA, RATLAM] 4 6. LD. D.R. SUPPORTED THE ORDER OF THE A.O. AND SUBMITTED THAT LD. CIT(A) WAS JUSTIFIED IN DELETING T HE ADDITION. 7. PER CONTRA, LD. COUNSEL FOR THE ASSESSEE SUPPORTED THE ORDER OF LD. CIT(A) AND SUBMITTED THAT THE A.O. WAS NO T JUSTIFIED IN MAKING THE ADDITION. HE FURTHER SUBMITT ED THAT THE FINDING OF THE LD. CIT(A) IS CONTRARY TO THE REC ORDED AND THE MATERIAL PLACED BY THE ASSESSEE. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIALS AVAILABLE ON RECORDS AND GONE THROUGH THE ORDER S OF THE AUTHORITIES BELOW. THE LD. CIT(A) HAS GIVEN FINDING OF FACTS BY OBSERVING AS UNDER: 5.1 GROUND NO.1:- THROUGH THIS GROUND OF APPEAL THE APPELLANT HAS CHALLENGED THE ADDITION OF RS.25,75,513/- ON ACCOUN T OF LONG TERM CAPITAL GAIN. DURING THE YEAR UNDER CONSIDERATION THE APPELLANT S OLD THE PROPERTY SITUATED AT 37, MITRA NIVAS ROAD (TASHKAND MARG), RATLAM IN WHI CH SHE WAS HAVING 25% SHARE. THE APPELLANT WAS HAVING INITIALLY 50% SHAR E IN THE ABOVE STATED PROPERTY. AS PER THE HIBBA NAMA UNDER THE MUSLIM P ERSONAL LAW, SHE TRANSFERRED 25% PROPERTY TO MR. KALIMUDDIN WHO IS S ON OF THE APPELLANT. THE 25% PROPERTY HAS BEEN SOLD BY THE APPELLANT AND THE 25% HAS BEEN SOLD BY MR. KALIMUDDIN. ALL THE LEGAL FORMALITIES LIKE REGISTR ATION OF THE SALE DOCUMENTS BEFORE THE SUB-REGISTRAR IN RESPECT OF 25% HAS BEEN DONE BY THE APPELLANT AND IN [ITA 204 & 205/IND/2017] [SHRI KALIMUDDIN BADNAWARWALA & SMT. BILKIS BAI BADNAWARWALA, RATLAM] 5 RESPECT OF 25% IS DONE BY MR. KALIMUDDIN. THE A.O. WHILE CALCULATING THE CAPITAL GAIN HAS CONSIDERED THE SALE PRICE IN RESPECT OF TH E APPELLANT AT 50% OF THE TOTAL RECEIPT AND THE PURCHASE PRICE OF THE PROPERTY ALSO AT 50% OF THE TOTAL PURCHASE PRICE AND OTHER EXPENDITURE LIKE COST OF CONSTRUCTI ON AT 25%. SINCE, THE APPELLANT OWNS 25% OF THE PROPERTY AT THE TIME OF TRANSFER TH EN IT WILL BE APPROPRIATE TO CONSIDER SALE PRICE AT RS.37,50,000/- INSTEAD OF RS .75,00,000/- BEING 25% OF THE SALE CONSIDERATION. THE A.O. SHOULD ALSO HAVE ADOP TED PLOT PURCHASE AMOUNT AT RS.8,28,250/- INSTEAD OF RS.16,56,500/-. THEREFORE , THE CAPITAL GAIN OF THE APPELLANT SHOULD BE CALCULATED AS UNDER:- SALE CONSIDERATION 1,50,00,000/- ASSESSEES 1/4 TH SHARE 37,50,000/- LESS: YEAR OF ACQUISITION COST OF ACQUISITION INDEX INDEXED COST OF ACQUISITION 2001-02 8,28,250/- 551/426 10,71,281/- 2001-02 3,10,750/- 551/426 4,01,933/- 2002-03 5,53,092/- 551/447 6,81,776/- 2003-04 12,74,976/- 551/463 15,17,304/- 2004-05 1,57,600/- 551/480 1,80,912/- 38,53,206/- LONG TERM CAPITAL GAIN -1,03,206/- THEREFORE, THE ADDITION MADE BY THE A.O. AMOUNTING TO RS.25,75,513/- IS DELETED. THEREFORE, THE APPEAL ON THIS GROUND IS ALLOWED. 9. THE AFORESAID FINDING ON FACT IS NOT REBUTTED BY TH E REVENUE BY PLACING ANY ADVERSE MATERIAL ON RECORD. THEREFORE, WE DO NOT SEE ANY INFIRMITY IN TO THE FIN DING OF THE LD. CIT(A) AND THE SAME IS HEREBY AFFIRMED. GROUN DS RAISED BY THE REVENUE ARE REJECTED. [ITA 204 & 205/IND/2017] [SHRI KALIMUDDIN BADNAWARWALA & SMT. BILKIS BAI BADNAWARWALA, RATLAM] 6 10. NOW WE TAKE UP REVENUES APPEAL IN ITA NO.204/IND/2017. THE FACTS ARE IDENTICAL AS WERE IN I TA NO.205/IND/2017. THE RESPECTIVE REPRESENTATIVE HAVE ADOPTED THE SAME ARGUMENTS AS WERE IN ITA NO.205/IND/2015. WE HAVE SUSTAINED THE FINDING OF TH E LD. CIT(A). AS REVENUE HAS NOT PLACED ANY ADVERSE MATER IAL REPRESENTING FINDING ON FACT BY THE LD. CIT(A). THE REFORE, TAKING A CONSISTENT VIEW IN THE PRESENT APPEAL AS WELL, WE DO NOT SEE ANY INFIRMITY IN THE FINDING OF THE LD. C IT(A) AND THE GROUNDS RAISED BY THE REVENUE ARE REJECTED. 11. IN THE RESULT, APPEALS FILED BY THE REVENUE ARE DISMISSED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 08 . 01.2019. SD/- (MANISH BORAD) SD/ - (KUL BHARAT) A CCOUNTANT MEMBER JUDICIALMEMBER INDORE; DATED : 08/01/2019 VG/SPS [ITA 204 & 205/IND/2017] [SHRI KALIMUDDIN BADNAWARWALA & SMT. BILKIS BAI BADNAWARWALA, RATLAM] 7 COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUAR D FILE. BY ORDER ASSISTANT REGISTRAR, INDORE