ITO, Ward - 29(3), Kolkata , Kolkata V. Sri Sharad Kumar Gupta, Kolkata

ITA 2425/KOL/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2115 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 07-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Capital asset
• Section: 56(2)(vii)(b); 250; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, KOLKATA BEFORE SRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER & SRI S.S. GODARA, JUDICIAL MEMBER I.T.A. NO.2425/KOL/2017 (ASSESSMENT YEAR: 2015-16) ITO, WARD-29(3), KOLKATA...... ..APPELLANT VS. SRI SHARAD KUMAR GUPTA................. ..........................................RESPONDENT [PAN : ADXPG2715J ] & C.O NO.21/KOL/2018 (A/O I.T.A. NO.2425/KOL/2017) (ASSESSMENT YEAR: 2015-16) SRI SHARAD KUMAR GUPTA................. ..........................................CROSS-OBJECTOR [PAN : ADXPG2715J ] VS. ITO, WARD-29(3), KOLKATA...... ...RESPONDENT APPEARANCES BY: SHRI C.J. SINGH, JCIT, SR. DR, APPEARING ON BEHALF OF THE REVENUE. SHRI AKSHAY RINGASIA, CA, APPEARING ON BEHALF OF THE ASSESSEE . DATE OF CONCLUDING THE HEARING : MAY 16 TH , 2019 DATE OF PRONOUNCING THE ORDER : JUNE 19 TH ,2019 O R D E R PER J. SUDHAKAR REDDY :- THE APPEALS FILED BY THE REVENUE AND CROSS-OBJECTION FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - 8, KOLKATA (HEREINAFTER THE LD. CIT (A)), PASSED U/S 250 OF THE INCOME TAX ACT, 1961 (THE ACT). 2. THE FACTS OF THE CASE STATED BY THE ASSESSING OFFICER ARE AS FOLLOWS. SRI SHIV KUMAR GUPTA, FATHER OF THE ASSESSEE, ENTERED INTO AN AGREEMENT WITH M/S WESTERN BUILDING CORPORATION ON 19.07.73 ON BEHALF OF THE ASSESSEE, A MINOR AT THAT TIME, REGARDING PURCHASE OF A FLAT NO. 20B MEASURING 700SQ. FT. AT EVEREST BUILDING AT JAWAHARLAL NEHURU ROAD, KOLKATA-71. FULL PAYMENT OF CONSIDERATION OF RS.42,000/- WAS MADE. BUT THE SAID VENDER, M/S WESTERN BUILDING CORPORATION FAILED TO EXECUTE AND 2 I.T.A. NO.2425/KOL/2017 & C.O NO.21/KOL/2018 SRI SHARAD KUMAR GUPTA REGISTER THE DEED OF CONVEYANCE IN FAVOUR OF DIFFERENT PURCHASERS INCLUDING THE ASSESSEE. A SUIT WAS FILED BEFORE THE HON'BLE HIGH COURT CALCUTTA. BY THE ORDER OF THE COURT DT. 25.08.1980, AN ADMINISTRATOR WAS APPOINTED WHO ON THE APPLICATION OF SHRI SHARAD KUMAR GUPTA, A MAJOR AT THAT TIME, DULY RECORDED THE CHANGE OF OWNERSHIP OF THE SAID FLAT IN FAVOUR OF THE ASSESSEE. BUT THE M/S WESTERN BUILDING CORPORATION, THE VENDER AGAIN FAILED TO EXECUTE AND REGISTER THE DEED OF CONVEYANCE. FINALLY BY ANOTHER ORDER OF THE COURT DT. 31.12.14, A SPECIAL OFFICER WAS APPOINTED AND THE DEED OF CONVEYANCE WAS FINALLY REGISTERED ON 19.01.15. THE STAMP DUTY VALUATION WAS MADE AT RS.L,04,44,350/- BY THE REGISTERING AUTHORITY BASED ON THE CURRENT CIRCLE RATE. THE CASE WAS SELECTED THROUGH CASS FOR REGULAR ASSESSMENT FOR A.Y.2015-16. THE AO ON VERIFICATION OF THE DEED OF CONVEYANCE, FOUND THAT THE SAID DEED WAS REGISTERED ON 19.01.15 AND THE STAMP DUTY VALUATION WAS MADE AT RS.1,04,44,350/- WHEREAS THE PURCHASE CONSIDERATION WAS SHOWN AT RS.42,000/-ONLY. THE AO CONCLUDED THAT THESE FACTS ATTRACTED PROVISION OF SEC.56(2)(VII)(B)(II) OF THE ACT AND ACCORDINGLY ADDED THE DIFFERENCE OF STAMP DUTY VALUE AND PURCHASE CONSIDERATION WHICH IS RS.1,04,03,350/- TO THE TOTAL INCOME OF THE ASSESSEE. 3. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE THE CIT(A). THE LD. CIT(A) DELETED THE ADDITION ON THE GROUND THAT SECTION SEC.56(2)(VII)(B)(II) OF THE ACT IS NOT ATTRACTED ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 4. AGGRIEVED THE REVENUE IS IN APPEAL. RIVAL CONTENTIONS HEARD. ON A CAREFUL CONSIDERATION ON THE FACTS AND CIRCUMSTANCES OF THE CASE, PERUSING THE PAPERS ON RECORD AND ORDERS OF THE AUTHORITIES BELOW AS WELL AS CASE LAWS CITED, WE ARE OF THE CONSIDERED OPINION THAT THE ORDER OF THE LD. CIT(A) CALLS FOR NO INTERFERENCE AS THE PROPERTY, IN QUESTION, WAS PURCHASED IN THE YEAR 1973 AND THE ASSESSEE WAS IN POSSESSION OF THE SAME IN THE YEAR 1976 AND INCOME FROM THIS PROPERTY WAS ASSESSED IN THE HANDS OF THE ASSESSEE UNDER THE HEAD INCOME FROM HOUSE PROPERTY IN EARLIER YEARS. DUE TO CERTAIN CIRCUMSTANCES, THE COURT HAD TO ULTIMATELY STEP IN AND THE DOCUMENT GOT REGISTERED IN THE NAME OF THE ASSESSEE. THIS ACTION OF THE COURT RELATES BACK TO THE DATE ON WHICH THE CAUSE OF ACTION ARISES I.E THE YEAR 1976. IN THAT YEAR THE AFORESAID SECTION 56(2)(VII) WAS NOT IN EXISTENCE. ON THESE FACTS, WE UPHOLD THE FOLLOWING FINDINGS OF LD. CIT(A): 9. SECTION 56(2)(VII)(B)(II), IN THE FACTS AND CIRCUMSTANCES OF THIS CASE, IS NOT ATTRACTED. 9.1 THE SAID PROPERTY HAD BEEN PURCHASED BY AGREEMENT DATED 19.07.1973. 3 I.T.A. NO.2425/KOL/2017 & C.O NO.21/KOL/2018 SRI SHARAD KUMAR GUPTA THE POSSESSION HAD BEEN SINCE 05.11.1976. THE APPELLANT HAD BEEN THE RECOGNISED OWNER SINCE THEN RECOGNISED BY THE HIGH COURT APPOINTED ADMINISTRATOR OF THE SAID EVEREST BUILDING, THE STATE GOVERNMENT, THE MUNICIPAL CORPORATION, ETC. THE APPELLANT HAD LET OUT OF THE PROPERTY SINCE THE YEAR 1976. THE APPELLANT COULD HAVE ONLY LET OUT THE PROPERTY ONLY WHEN HE IS THE OWNER. THIS IS ALSO IN ACCORDANCE WITH SECTION 22 OF THE INCOME TAX ACT FOR THE INCOME FROM HOUSE PROPERTY IS ONLY WHEN THE ASSESSEE IS THE OWNER. THE APPELLANT HAD ALL ALONG BEEN SHOWING THE RENTAL INCOME IN HIS RETURN OF INCOME UNDER THE HEAD INCOME FROM HOUSE PROPERTY. SO WHEN THE PROPERTY HAS ALL ALONG BEEN ACCEPTED BY THE DEPARTMENT THAT THE PROPERTY BELONGS TO THE APPELLANT, AND FROM WHICH INCOME FROM HOUSE-PROPERTY WAS REGULARLY BEING SHOWN; THEN JUST BECAUSE NOW THE CONVEYANCE DEED HAS BEEN EXECUTED AND REGISTERED AND THAT TOO UPON ORDER/DIRECTION OF THE HONBLE HIGH COURT AND SO, CONSEQUENTLY THAT THE REGISTRATION OF THE CONVEYANCE DEED HAVING BEING REPORTED IN THE AIR RETURN U/S 285BA OF THE O/O THE REGISTRAR, FOR WHICH THE CURRENT STAMP DUTY VALUATION AS ON THE DATE OF REGISTRATION WAS APPLICABLE THIS BUT ONLY REGISTRATION OF THE DOCUMENT, CANNOT OBLITERATE NOR SUBSTITUTE THE FACT THAT THE PURCHASE HAD BEEN MADE ON 19.07.1973 IN FACT, THE CONVEYANCE DEED IN THE RECITALS CONFIRMS THE FACT THAT THE PURCHASE WAS MADE ON 19.07.1973, AND THE POSSESSION ON 05.11.1976. THUS, IN THE FACTS AND CIRCUMSTANCES OF THIS CASE, THE CONVEYANCE DEED HAS NO INCOME TAX ANGLE AT ALL. THUS, SECTION 56(2)(VII)(B)(II) IS NOT ATTRACTED AT ALL. TO FURTHER ELABORATE ON THIS POINT THE SPECIAL OFFICER APPOINTED BY THE HONBLE HIGH COURT IS ALSO REFERRED TO AS VENDOR IN THE DEED OF CONVEYANCE. SO IN EFFECT, IT IS AS IF THERE WAS CONVEYANCE FROM THE HIGH COURT TO THE APPELLANT. SO TOO, SECTION 56(2)(VII)(B) CANNOT BE ATTRACTED. FOR THAT MATTER TOO THE ORIGINAL SELLERS [M/S WESTERN BUILDING CORPORATION] IS NO MORE ONLY BEING REPRESENTED FOR PROCEDURAL REQUIREMENT BY ONE MS. PRIYANKA PRASAD. 9.2 IN ANY CASE, EVEN FOR BRIEF REFERENCE SAKE ONLY, THE KEY-WORD IN THE SECTION 56(2)(VII) IS: WHERE AN INDIVIDUAL .. . ... RECEIVES.......... [EMPHASIS ADDED]. THE APPELLANT HAS NOT RECEIVED ANYTHING; RATHER HE HAD TO INCUR SUBSTANTIAL EXPENDITURE FOR THE STAMP-DUTY AND REGISTRATION FEES. THE RECEIVING OF THE PROPERTY WAS ALREADY OVER WAY BACK ON 05.11.1976. 05.11.1976 IS ALSO THE DATE OF EFFECTIVE TRANSFER AS DEFINED IN SECTION 2(47) OF THE INCOME TAX ACT, AND IN PARTICULAR CLAUSE (V):POSSESSION OF THE IMMOVABLE PROPERTY. ALL INCOME- TAX MATTERS AS REGARDS PURCHASE OF THE PROPERTY HAD ENDED ON 05.11.1976. 10. EVEN IN THE ALTERNATIVE IF APPLYING SECTION 56(2)(VIIL(B)(II), THE CASE IS COVERED BY THE EXCEPTION PROVIDED FOR IN THE 1 ST PROVISO. 5. IN VIEW OF THE ABOVE, WE UPHOLD THE ORDER OF THE LD. CIT(A) AS WE FIND NO INFIRMITY IN THE SAME AND DISMISS THIS APPEAL OF THE REVENUE. 4 I.T.A. NO.2425/KOL/2017 & C.O NO.21/KOL/2018 SRI SHARAD KUMAR GUPTA 6. THE CROSS-OBJECTION ONLY SUPPORTS THE ORDER OF THE LD. CIT(A) AND HENCE REQUIRES NO SEPARATE ADJUDICATION. THIS C.O IS DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE AND THE C.O ARE DISMISSED. KOLKATA, THE 19 TH JUNE, 2019. SD/- SD/- [ S.S. GODARA ] [J. SUDHAKAR REDDY] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 19.06.2019 (RS, SR. PS) COPY OF THE ORDER FORWARDED TO: 1. ITO, WARD-29(3), KOLKATA 2. SRI SHARAD KUMAR GUPTA, 13/1/2A MONICA APARTMENT, PRIYA NATHA MALLICK ROAD, KOLKATA 700 026. 3. CIT(A)- 4. CIT- , 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, KOLKATA BENCHES