ITO Ward III (1), Coimbatore V. L.G.Nithyanandan Rep.By Krishnakumari, Coimbatore

ITA 2347/CHNY/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1113 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 13-03-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 31-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH CHENN AI BEFORE SHRI ABRAHAM P GEORGE, ACCOUNTANT MEMBER AND SHRI V.DURGA RAO, JUDICIAL MEMBER .. ITA NO.2347/MDS./2012 ASSESSMENT YEAR:2006-07 INCOME TAX OFFICER, WARD III(1), 63,RACE COURSE ROAD, COIMBATORE 641 018. VS. M/S.L.G.NITHYANANDAN, REP. BY SMT. KRISHNAKUMARI, NO.204,VIVAM RESIDENCY, DE SA BA COLONY, WEST CLUB ROAD, COIMBATORE 641 018. PAN AAAHL 7919 R (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI GURU BASHYAM JCIT D.R. RESPONDENT BY : SHRI K.RAGHU C.A. DATE OF HEARING : 13.03.13 DATE OF PRONOUNCEMENT : 15. 03.13 O R D E R PER ABRAHAM P GEORGE, ACCOUNTANT MEMBER : IN THIS APPEAL FILED BY REVENUE, ITS GRIEVANCE I S THAT CIT(A) HELD CAPITAL GAINS TO HAVE ARISEN PREVIOUS YEAR 31. 03.97 AGAINST PREVIOUS YEAR RELEVANT TO IMPUGNED ASSESSMENT YEAR, CONSIDERED BY THE ASSESSING OFFICER. ITA. 2347 /MDS/12 2 2. FACTS APROPOS ARE THAT ASSESSEE ALONG WITH HIS FAMILY MEMBERS SMT. KRISHNAKUMARI AND MS.NIVEDITHA HAD REG ISTERED A DEED TRANSFERING AN IMMOVABLE PROPERTY ON 10.06.200 5. SINCE ASSESSEE DID NOT RETURN ANY CAPITAL GAINS, A NOTICE UNDER SECTION 148 WAS ISSUED FOR THE IMPUGNED ASSESSMENT YEAR. A RGUMENT OF THE ASSESSEE WAS THAT TRANSFER WAS EFFECTED IN FINA NCIAL YEAR 1997-98, SINCE THERE WAS AN AGREEMENT FOR SALE AND HANDING OVER OF POSSESSION DURING THAT YEAR. AS PER ASSESS EE, THE TRANSFER STOOD EFFECTED, WITHIN THE MEANING OF SEC. 2(47)(V) OF THE ACT IN THE YEAR 1997-98. THEREFORE, THERE COULD NOT BE ANY LEVY OF CAPITAL GAINS FOR THE SAME TRANSFER IN A.Y.2006-07. THIS WAS NOT ACCEPTED BY THE ASSESSING OFFICER. A.O. CONSIDERED THE TRANSFER TO HAVE BEEN EFFECTED IN THE RELEVANT PREVIOUS YEAR AND TAXED CAPITAL GAINS ARISING OUT OF THE TRANSACTION ACCORD INGLY. ASSESSEE MOVED IN APPEAL BEFORE THE CIT(A) WHO HELD IN FAVOU R OF THE ASSESSEE RELYING ON THE DECISION OF THE TRIBUNAL IN THE CASE OF MS.N. NIVEDITA, ONE OF THE CO-OWNERS OF THE PROPERT Y. THIS TRIBUNAL HAD HELD, IN THE CASE OF MS.N.NIVEDITA, TH AT THERE WAS NO TRANSFER IN THE IMPUGNED ASSESSMENT YEAR AND TRANS FER HAD HAPPENED IN FINANCIAL YEAR 1997-98 ITSELF. TAKING THIS VIEW, THE ITA. 2347 /MDS/12 3 ADDITION OF CAPITAL GAINS WAS DELETED IN THE HANDS OF MS.N.NIVEDITA. 3. NOW BEFORE US, LD. DEPARTMENTAL REPRESENTATIVE FAIRLY AGREED THAT THE ISSUE WAS COVERED IN FAVOUR OF THE ASSESSEE BY VIRTUE OF THE DECISION OF THIS TRIBUNAL IN THE CASE OF SMT.KRISHNAKUMARI AND MS.NIVEDITA. 4. WE HAVE PERUSED THE ORDERS OF THE LOWER AUTHORI TIES AND HEARD THE CONTENTIONS. WITHOUT DOUBT, ASSESSEE WAS A CO-OWNER OF THE PROPERTY WITH SMT.KRISHNAKUMARI AND MS.NIVED ITA. SIMILAR ASSESSMENTS WERE DONE IN SUCH CO-OWNERS AS WELL. ON APPEALS FILED BY THE CO-OWNERS, THIS TRIBUNAL VIDE ITS ORD ER DATED 30.06.11 IN ITA NO.848/MDS./10 AND ORDER DATED 02.12.11 IN I TA NO.1564/MDS./11 HELD THAT THERE WAS NO TRANSFER DU RING THE IMPUGNED ASSESSMENT YEAR, THAT WOULD GIVE RISE TO ANY CAPITAL GAINS. RELEVANT PARA-5 OF THE TRIBUNALS ORDER DATE D 30.06.11 IS REPRODUCED HEREUNDER:- 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A P ERUSAL OF THE CLAUSE 2 OF THE AGREEMENT DATED 30-11-1997 CLEA RLY SHOWS THAT THE VENDORS HAVE PUT THE PURCHASERS IN POSSESS ION OF THE PROPERTY. THE SUPPLEMENTARY AGREEMENT ALSO CLEARLY RECOGNIZES AND RATIFIES THE AGREEMENT DATED 30-11-1997 AS PER CLAUSE 7 OF THE SUPPLEMENTARY AGREEMENT DATED 26-11-2002. ANOT HER ITA. 2347 /MDS/12 4 INTERESTING ASPECT, ON A PERUSAL OF THE AGREEMENT T O SELL, SUPPLEMENTARY AGREEMENT AS ALSO THE SALE DEED, IS T HAT THE SIGNATORY FOR THE ASSESSEE BEING VENDOR NO.3 IN THE AGREEMENT FOR SALE AND SUPPLEMENTARY AGREEMENT FOR SALE IS TH E SAME PERSON WHO IS THE POWER OF ATTORNEY AS PER THE AGRE EMENT TO SELL WHEN SIGNING THE SALE DEED IS THE CONFIRMING PARTY. THIS ALSO GIVES CREDENCE TO THE CLAIM OF THE ASSESSEE THAT PO SSESSION DID SHIFT FROM THE ASSESSEE TO THE AGREEMENT HOLDERS ON 30-11-1997 WHEN THE AGREEMENT TO SELL THE PROPERTY WAS ENTERED INTO. THE RECORDING OF THE ASSESSING OFFICER THAT THE SALE AG REEMENTS WERE NOT REGISTERED WOULD NOT AFFECT THE ISSUE INSOFAR A S THERE IS NO REQUIREMENT UNDER LAW THAT THE SALE DEED WAS TO BE REGISTERED. FURTHER THE SALE AGREEMENTS ALSO CLEARLY SHOW THE D ETAILS OF THE CONSIDERATION TO BE PAID, SUCH AS CHEQUE NUMBERS AN D DATES. THE FINDING OF THE LEARNED CIT(A) THAT IN THE ORIGI NAL AGREEMENT THERE WAS NO CLAUSE FOR NOMINATION IS FOUND TO BE W RONG INSOFAR AS THE SALE AGREEMENT DATED 30-11-1997 CLEARLY RECO GNIZES THE CLAUSE FOR NOMINATION IN CLAUSE 1 OF THE SAID AGREE MENT THE CLAIM OF THE LEARNED DR THAT THE ASSESSEE HAS NOT P ROVED THAT THE AGREEMENT HOLDERS HAD BEEN PUT INTO POSSESSION OF T HE PROPERTY CANNOT BE SUBSCRIBED TO INSOFAR AS THE ASSESSEE CAN NOT PROVE THE NEGATIVE. THE AGREEMENT HOLDERS HAD CLEARLY AD MITTED THAT THEY WERE PUT INTO POSSESSION EVEN THOUGH THE LETTE R IS UNDATED. IF THE ASSESSING OFFICER HAD DOUBTED THE VERACITY O F THE SAID LETTER, IT WAS VERY WELL OPEN TO HIM TO CALL UPON T HE AGREEMENT HOLDERS TO EXAMINE AS TO WHEN THEY WERE PUT INTO TH E POSSESSION OF THE PROPERTY. THIS HAS ALSO NOT BEEN DONE BY TH E REVENUE. IN THE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE POSS ESSION OF THE PROPERTY WAS TRANSFERRED TO THE AGREEMENT HOLDERS O N 30-11-1997 WHEN THE AGREEMENT FOR SALE WAS ENTERED INTO AND TH E ADVANCE WAS RECEIVED. THIS VIEW OF OURS ALSO FINDS SUPPORT FROM THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT I N THE CASE OF CIT V.G. SAROJA, REFERRED TO SUPRA. IN THE CIRCUMSTANC ES, WE ARE OF THE VIEW THAT THE CAPITAL GAIN IN REGARD TO THE SAL E OF THIS PROPERTY ITA. 2347 /MDS/12 5 WAS NOT LIABLE FOR TAX DURING THE ASSESSMENT YEAR 2 006-07. IN THE CIRCUMSTANCES, THE APPEAL OF THE ASSESSEE IS ALLOWE D. LD. CIT(A) HAD FOLLOWED THE ABOVE DECISION OF THE TRIBUNAL IN THE CASE OF CO-OWNERS AND DELETED THE ADDITION OF CAPIT AL GAINS IN ASSESSEES CASE. WE DO NOT FIND ANY REASON TO INTE RFERE WITH THE ORDER OF CIT(A). 5. IN THE RESULT, APPEAL OF REVENUE STANDS DISMISS ED. ORDER PRONOUNCED ON FRIDAY, THE 15 TH MARCH, 2013 AT CHENNAI. SD/- SD/- (V.DURGA RAO) (ABRAHAM P GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED 15 TH MARCH, 2013 . K S SUNDARAM COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE ITA. 2347 /MDS/12 6