SMT. ANITA ASHOK MESHRAM, Nagpur V. ITO-WARD-1(3), Nagpur

ITA 211/NAG/2014

• Counselvise Citation: [2014] 117 COUNSELVISE.COM (IT) 8854 (ITAT-NAGPUR)
• Duration Of Justice: 6 month(s) 11 day(s)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 23-10-2014
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 27-06-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 11-04-2014
• Court: TRIBUNAL
• Department Lawyers: A R NINAWE
• Assessee Lawyers: R V LOYA
• Keywords: Sale consideration of property below Jantri Value; Opportunity of being heard
• Section: 50C; 234B; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI RAM LAL NEGI, JUDICIAL MEMBER ITA NO.211/NAG./2014 (ASSESSMENT YEAR : 200910 ) SMT. ANITA ASHOK MESHRAM PLOT NO.15, WEST SAMARTH NAGAR AJNI CHOWK, WARDHA ROAD NAGPUR 440 003 PAN AQVPM5732C . APPELLANT V/S INCOME TAX OFFICER WARD1(3), MECL BUILDING SEMINARY HILLS, NAGPUR 440 006 . RESPONDENT REVENUE BY : SHRI A.R. NINAWE ASSESSEE BY : SHRI R.V. LOYA DATE OF HEARING 23.03.2017 DATE OF ORDER 27.03 .2017 O R D E R PER SHAMIM YAHYA, A.M. AFORESAID APPEAL BY THE ASSESSEE IS DIRECTED AGAINS T THE IMPUGNED ORDER DATED 30 TH DECEMBER 2013, PASSED BY THE LEARNED COMMISSIONER (APPEALS)I, NAGPUR, FOR ASSESSMENT YE AR 200910. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE REPRODUCED B ELOW: (1) THAT THE ORDER OF THE INCOME TAX OFFICER, WARD 1(3) , NAGPUR IS BAD IN LAW AND WRONG ON FACTS AND THE LEA RNED CIT(A) ERRED IN CONFIRMING THE ORDER OF THE AO. (2) THAT THE AO ERRED IN LAW AND ON FACTS IN ADOPTING T HE VALUE OF PROPERTY AT RS.59,07,500/- (50 0 /0 SHARE OF RS. 1,18,15,000/-) FOR THE PURPOSE OF DETERMINING LONG TERM CAPITAL GA IN INSTEAD OF 2 SMT. ANITA ASHOK MESHRAM RS.5,00,000/- (50% SHARE IN RS 10,00,000/-) BEING A CTUAL CONSIDERATION RECEIVED BY THE ASSESSEE AND THE LEAR NED CIT(A) ERRED IN CONFIRMING THE ACTION OF THE AO. THE SAME IS IMPROPER AND UNJUSTIFIED. (3) THAT THE AO ERRED IN LAW AND ON FACTS IN ADOPTING T HE VALUE OF PROPERTY AS DETERMINED BY DVO INSPITE OF THE FAC T THAT THE VALUATION AS PER REPORT OF DVO IS WITHOUT CONSIDERI NG THE VARIOUS DISPUTES AND HAZARDS ON THE IMPUGNED PROPERTY WHICH HAS A DIRECT IMPACT ON THE MARKET VALUE. THE LEARNED CIT( A) ERRED IN IGNORING THE VARIOUS DISPUTES WHICH ARE BROUGHT ON RECORD BY THE ASSESSEE. (4) THAT THE VALUATION OF IMPUGNED PROPERTY BY DVO IS DEFECTIVE AND WITHOUT CONSIDERING THE VARIOUS DISPU TES GOING ON REGARDING THE TITLE OF THE PROPERTY AND THE LEGALIT Y OF THE SALE DEED. ON THE FACTS AND CIRCUMSTANCES OF THE CASE TH E ACTION OF THE DVO IS ARBITRARY AND UNJUSTIFIED. (5) THAT THE AO ERRED IN LAW AND ON FACTS IN TOTALLY RE LYING ON THE REPORT OF DVO AND DISREGARDING THE DISPUTES ABO UT THE TITLE OF THE PROPERTY AND LEGALITY OF THE SALE DEED. (6) THAT THE NOTICE ISSUED U/S. 148 AND THE PROCEEDINGS THEREAFTER U/S. 147 IS BAD IN LAW AND WRONG ON FACT S. (7) THAT THE INTEREST CHARGED UNDER SECTION 34A, 234B A ND 234C IS IMPROPER AND UNJUSTIFIED. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE ACTION OF THE AO IS NOT AS PER THE PROVISIONS OF THE ACT. 2. BRIEF FACTS ARE, DURING THE RELEVANT FINANCIAL YEAR 2008-09, THE ASSESSEE SOLD THE CO-OWNERSHIP PROPERTY KNOWN AS AG RICULTURAL LAND BEARING GAT NO. 14, P.H. NO.46, MOUZA ISASANI, TAHS IL HINGNA, DISTRICT NAGPUR ADMEASURING AREA ABOUT 3 ACRES. THE CONSIDER ATION TO THE SHARE OF APPELLANT AS A CO-OWNER TO THE EXTENT OF 5 0% WAS RECEIVED AT ` 5,00,000/-. THE ASSESSEE IS A HOUSEWIFE AND HAS NO OTHER SOURCE OF INCOME. THE ASSESSEE HAS PURCHASED AN AGRICULTURAL LAND FROM HER FATHER SITUATED AT KH.NO. 14/2, MOUZA ISASANI, TAHS IL HINGNA, DISTRICT 3 SMT. ANITA ASHOK MESHRAM NAGPUR JOINTLY WITH HER SISTER MRS. VINITA DHONE FO R RS.32,000 ON 19 TH JUNE, 1990. IT IS STATED TO BE AN AGRICULTURAL LAND OF ASSESSEE FATHER. THE ASSESSEE IN THE STATEMENT OF FACTS HAS STATED T HAT DUE TO PERSONAL FAMILY DISPUTE, ASSESSEES FATHER HAS SOLD HIS PROP ERTY TO ASSESSEE AND ASSESSEES SISTER WITHOUT CONSENT OF ASSESSEES BRO THERS. THE ASSESSEE FURTHER STATED THAT AFTER THE DEATH OF ASSESSEES F ATHER, A PERSON, NAMELY SHRI NAGORAO JAIKAR, HAS FILED A CIVIL SUIT NO.42/92 FOR POSSESSION OF SAID LAND SHOWING FALSE DOCUMENTS OF AGREEMENT OF PURCHASING OF SAID LAND FROM ASSESSEES FATHER AND HON'BLE COURT HAS ADMITTED THE CLAIM OF SHRI NAGORAO JAIKAR ON 18 TH FEBRUARY 1998 VIDE S.D. NO. 236/97. THUS, THE SALE DEED HAS BEEN EXECU TED THROUGH HON'BLE COURT ON 1 ST JULY 1999. THE ASSESSEE FURTHER SUBMITTED THAT SHE WAS UNABLE TO FILE SUIT AGAINST INJUSTICE, SO, ASSESSEE AND ASS'S SISTER HAVE COMPROMISED TO SELL THE PROPERTY TO APP ELLANT'S BROTHER AND HIS WIFE JOINTLY FOR RS. 10 LAKH. SO, ASSESSEE ALON G WITH THE OTHER CO- OWNER, SOLD THE PROPERTY VIDE REGISTERED SALE DEED DATED 8 TH SEPTEMBER 2008 FOR A TOTAL CONSIDERATION OF ` 10,00,000 AND THE APPELLANT RECEIVED THE SALE CONSIDERATION TO HER SH ARE AT ` 5,00,000. THE ASSESSEE HAS THUS PLEADED THAT THE AREA IN WHIC H THE ASSESSEE HAS SOLD THE LAND HAS BEEN DECLARED AS, RESIDENTIAL ZON E BY GOVERNMENT AND ITS VALUATION UNDER THE GOVERNMENT READY RECKON ER HAS SUBSTANTIALLY INCREASED. THE ASSESSEE THUS HAS PLEA DED THAT THE VALUE 4 SMT. ANITA ASHOK MESHRAM OF THE PROPERTY FOR THE PURPOSE OF TAXATION SHOULD BE TAKEN AT ` 10 LAKH, BEING THE ACTUAL SALE CONSIDERATION, FOR WHIC H THE PROPERTY HAS BEEN SOLD BY THE APPELLANT, WHICH HAS BEEN REGISTER ED WITH THE SUB- REGISTRAR, NAGPUR. HOWEVER, THE ASSESSING OFFICER W AS NOT CONVINCED AND INVOKED THE PROVISIONS OF SECTION 50C OF THE AC T BY MAKING THE IMPUGNED ADDITION. 3. UPON ASSESSEES APPEAL, THE LEARNED COMMISSIONER (AP PEALS) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. AGAI NST THIS ORDER, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 4. THE LEARNED COUNSEL FOR ASSESSEE SUBMITTED BEFORE U S THAT THE SAID PROPERTY WAS ALREADY SOLD AND DULY REGISTERED IN FAVOUR OF THE SHRI NAGORAO JAIKAR, ON THE DIRECTION OF THE COURT. UNDER THESE CIRCUMSTANCES, WHEN THE CONCERNED PROPERTY WAS ALSO SOLD AND REGISTERED IN THE NAME OF SHRI NAGORAO JAIKAR, THE ASSESSEE HAD NO RIGHT WHATSOEVER TO SELL THE PROPERTY. WHEN THE ASS ESSEE HAD NO RIGHT TO SELL THE PROPERTY, THERE IS NO QUESTION OF INVOK ING PROVISIONS OF SECTION 50C. THE LEARNED COUNSEL FOR ASSESSEE SUBMI TTED THAT SINCE THE ASSESSEE HAD NO RIGHT IN THE PROPERTY, IT CANNO T BE SAID THAT ASSESSEE HAD MADE ANY TRANSFER OF THE SAID PROPERTY AND, HENCE, TRANSACTION CANNOT BE SAID TO BE COMING UNDER THE A MBIT OF TRANSFER OF PROPERTY AND, HENCE, NO CAPITAL GAIN IS ATTRACTED. IN THIS REGARD, WE NOTE THAT THIS FACT HAS ALSO BEEN RECOGNIZED BY THE LEARNED 5 SMT. ANITA ASHOK MESHRAM COMMISSIONER (APPEALS) WHO IN PARA7.2 HAS NOTED TH AT IN VIEW OF THE FACTS STATED ABOVE, QUESTION DOES ARISE AS TO HOW T HE ASSESSEE COULD SELL THE PROPERTY IN QUESTION TO HER BROTHER WHEN T HE COURT HAS ALREADY EXECUTED THE SALE DEED IN FAVOUR OF SHRI NAGORAO JA IKAR. WE FIND THAT THE PLEA OF THE LEARNED COUNSEL FOR ASSESSEE IN THI S REGARD HAS CONSIDERABLE COGENCY WHEN THE PROPERTY STOOD REGIST ERED IN THE NAME OF SHRI NAGORAO JAIKAR, THEN IT CANNOT BE SAID THAT THE ASSESSEE BY SELLING THE SAID PROPERTY TO HER BROTHER HAS TRANSF ERRED ANY VALUABLE RIGHT IN THE SAID PROPERTY WARRANTING INVOCATION OF DEEMED PROVISIONS OF SECTION 50C. WE FIND THAT AUTHORITIES BELOW HAVE NOT EXAMINED THE ISSUE FROM THIS PERSPECTIVE. THEY HAVE GONE BY THE SIMPLE PREMISE THAT THE ASSESSEE HAS SOLD AND REGISTERED A PROPERT Y AND, HENCE, PROVISIONS OF SECTION 50C HAVE BEEN APPLIED. HOWEVE R, THIS ASPECT HAS BEEN COMPLETELY IGNORED THAT SINCE THE PROPERTY ALR EADY STOOD REGISTERED IN THE NAME OF SHRI NAGORAO JAIKAR, ASSE SSEE COULD NOT LEGALLY TRANSFER THE SAID PROPERTY AGAIN TO HER BRO THER. HENCE, THE TRANSACTION CANNOT BE SAID TO BE COMING UNDER THE A MBIT OF COMPUTATION OF CAPITAL GAIN. WHEN THE SAID TRANSACT ION OF THE ASSESSEE CANNOT BE SAID TO BE A TRANSFER IN THE PROPER LEGAL SINCE, THERE IS NO QUESTION OF INVOKING DEEMED PROVISIONS OF SECTION 5 0C. SINCE THIS ASPECT HAS NOT BEEN EXAMINED BY THE AUTHORITIES BEL OW. WE DEEM IT APPROPRIATE TO RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER. THE 6 SMT. ANITA ASHOK MESHRAM ASSESSING OFFICER SHALL EXAMINE AS TO WHETHER THE A SSESSEE HAS TRANSFERRED ANY VALUABLE RIGHT IN THE SAID PROPERTY TO WARRANT THE TRANSACTION COMING UNDER THE AMBIT OF TRANSFER AND CONSEQUENT INVOCATION OF PROVISIONS OF SECTION 50C. IT IS NOTE WORTHY THAT IT ALSO NEEDS TO BE EXAMINED AS TO WHETHER THE VALUE OF PRO PERTY WILL REMAIN THE SAME IN THE HANDS OF THE ORIGINAL OWNER AFTER I T HAS BEEN ALREADY LEGALLY SOLD TO ANY PARTNER SO AS TO WARRANT INVOCA TION OF PROVISIONS OF SECTION 50C, IN CASE THE SAID OWNER AGAIN SELLS / T RANSFERS THE SAID PROPERTY IN WHICH HE HAS LOST HIS RIGHT AFTER TRANS FERRING THE SAME TO ANOTHER PARTNER. NEEDLESS TO SAY THAT THE ASSESSING OFFICER SHALL PROVIDE REASONABLE OPPORTUNITY OF BEING HEARD TO TH E ASSESSEE. 5. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STA TISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 27.03.2017 SD/ - RAM LAL NEGI JUDICIAL MEMBER SD/ - SHAMIM YAHYA ACCOUNTANT MEMBER NAGPUR, DATED: 27.03.2017 7 SMT. ANITA ASHOK MESHRAM COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, NAGPUR CITY CONCERNED; (5) THE DR, ITAT, NAGPUR; (6) GUARD FILE. TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY (DY./ASSTT. REGISTRAR) ITAT, NAGPUR