ITO, Patiala V. Sh.Ravinder Singh Bhatti, Patiala

ITA 26/CHANDI/2017

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 3945 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-10-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 04-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: YOGINDER MITTAL
• Assessee Lawyers: B M MONGA
• Keywords: Capital asset
• Section: 54F

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH B CHANDIGARH !, ' # $ . .. . & , '( # BEFORE: SMT. DIVA SINGH, JM & DR. B.R.R.KUMAR, AM ./ ITA NO. 26/CHD/2017 / ASSESSMENT YEAR : 2008-09 THE INCOME TAX OFFICER, WARD-3, PATIALA. VS SHRI RAVINDER SINGH BHATTI, # 29, PHASE-I, PATIALA. ./ PAN NO: ABUPB8418Q / APPELLANT / RESPONDENT ! / REVENUE BY : SHRI YOGINDER MITTAL, SR.DR '# ! / ASSESSEE BY : SHRI B.M.MONGA & SHRI ROHIT KAURA $ % #&/ DATE OF HEARING : 16.07.2018 '()* #&/ D ATE OF PRONOUNCEMENT : 04.10.2018 ')/ ORDER PER DIVA SINGH THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE ASSAI LING THE CORRECTNESS OF THE ORDER DATED 30.11.2016 OF CIT (A) PATIA LA PERTAINING TO THE ASSESSMENT YEAR 2008-09 ON THE FOLLOWING GROUNDS : (I) IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WHETHER THE LD. CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN NOT CONSIDERING THAT CO NTEMPORANEOUS DOCUMENTS PERTAINING TO A TRANSACTION WHICH HAVE TO BE READ AS ONE, THEY ARE 'MOU'/'JOINT DEVELOPMENT AGREEMENT', 'POSSESSION LETTER' AND 'IRREVOCABLE PO WER OF ATTORNEY' AND 'RESOLUTION BY THE MEMBERS ALLOWING THE SOCIETY TO ENTER INTO A CONTRACT WITH THE DEVELOPERS', (II) IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WHETHER THE LD. CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN NOT CONSIDERING THAT CO NTEMPORANEOUS DOCUMENTS PERTAINING TO A TRANSACTION ARE READ AS ONE THEN 'REGISTRATION '/'EXECUTION' OF IRREVOCABLE POWER OF ATTORNEY WHICH INCORPORATED THAT 'TERMS AND CONDITI ONS' OF AN AGREEMENT SATISFIED THE CONDITIONS OF AMENDMENT OF SECTION 53A OF TRANSFER OF PROPERTY ACT, 1882 AND READ WITH SECTION 2(47)(V) OF THE INCOME TAX ACT. (III) IN THE FACTS AND CIRCUMSTANCES OF THE CASE , WHETHER THE LD. CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN NOT CONSIDERING THAT 'R EGISTRATION' IS NOT SINE QUA NON FOR 'TRANSFER' TO BE LEGAL UNDER SECTION 2(47)(V) READ WITH 2(47)(II) OF THE INCOME TAX ACT AS SECTION 2(47) IN AN INCLUSIVE DEFINITION. (IV) IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WHETHER THE LD. CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN NOT CONSIDERING THE 'INCLUSI VE' DEFINITION OF TRANSFER U/S 2(47) (II) AND (VI) OF INCOME TAX ACT IN WHICH AN ' AGREEMENT TO SELL' IS ENOUGH TO HOLD THAT U/S 2(47) (II) THERE IS AN EXTINGUISHMENT OF A RIGHT. ITA 26/CHD/2017 A.Y.2008-09 PAGE 2 OF 4 (V) IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WH ETHER THE LD.CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN NOT CONSIDERING THE 'IN CLUSIVE' DEFINITION OF 2(47) AND DEFINITION OF 'AGREEMENT TO TRANSFER' U/S 269 UA AS PER INCOME TAX ACT AND RELIED UPON DIFFERENT ACTS I.E. TRANSFE R OF PROPERTY ACT, 1882 AND REGISTRATION ACT, 1908 TO DECIDE THE PROPOSITIO N OF LAW THAT TRANSFER MANDATORY REQUIRES REGISTRATION AND PERPETUATED THE 'MISCHIEF SOUGHT TO BE REMEDIED BY THE INCORPORATION OF 2(47)(V) & (VI) AG AINST THE HEYDON RULE. (VI) IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WH ETHER THE LD.CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN COMING TO A DICHOTOMOUS FIND ING ON FACTS BY HOLDING THAT THE ASSESSEE TO BE A LICENCEE AS AGAINST THE FINDINGS O F FACT THAT THE POWER OF ATTORNEY CREATED 3 RD PARTY RIGHT UNDER SECTION 202 OF CONTRACT ACT. THE TWO BEING DIAMETRICALLY OPPOSITE PREPOSITION OF LAW AS LICENCEE CREATES 'NO INTEREST' AND SECTION 202 OF CONTRACT ACT CREATES INTEREST IN A PROPERTY. (VII) IN THE FACTS AND CIRCUMSTANCES OF THE CASE, W HETHER THE LD.CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN HOLDING THAT POSSESSION HAD NOT BEEN DELIVERED BY THE ASSESSEE IN RESPECT OF THE ENTIRE LAND WITHOUT APPRECIATION THAT THE AGREEMENT THAT THE ASSESSEE ENTERED WITH M/S BILLUS ENTERPRISES CLEARLY PROVIDE D FOR VACANT PHYSICAL POSSESSION TO BE HANDED OVER AND THAT SUCH VACANT PHYSICAL POSSES SION WAS ALSO HANDED OVER BY ASSESSEE. (VIII) IN THE FACTS AND CIRCUMSTANCES OF THE CAS E, WHETHER THE LD.CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN HOLDING THAT POSSESSION WAS NOT GIVEN BY THE ASSESSEE AND IF GIVEN, WAS IN THE NATURE OF A LICENCEE IGNORING THE CLEAR AND DET AILED PROVISIONS IN THE AGREEMENT THAT ASSESSEE ENTERED INTO THE WITH M/S BILLUS ENTERPRIS ES, WHOSE PROVISIONS AND AVAILABLE EVIDENCE DOES NOT INDICATE THAT THE TRANSACTION WAS IN NATURE OF A LICENCEE.' (IX) IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WHETHER THE LD.CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW BY FAILING TO APPRECIATE T HAT THE ASSESSEE HAD PAID/UNDERTOOK TO PAY TAX ON CAPITAL GAINS ACCRUING TO HER THUS AD MITTING THAT THE TRANSACTION WAS OF A NATURE WHERE CAPITAL GAIN WAS EXIGIBLE,' (X) IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WHE THER THE LD.CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN HOLDING THAT UNLESS RIGHT TO RECEIVE HAS BEEN ACCRUED, INCOME IS NOT TAXABLE EVEN UNDER THE HEAD 'CAPITAL GAINS' IGNORIN G THE PROVISIONS OF SECTION 45 READ WITH SECTION 48 OF INCOME TAX ACT, 1961.' 2. AT THE TIME OF HEARING, IT WAS A COMMON STAND OF THE PARTIES BEFORE THE BENCH THE ARGUMENTS ADVANCED IN ITA 25/CHD/2017 & ITA 27/CHD/2017 WOULD ADDRESS THE ISSUES HEREIN ALSO. IT WA S SUBMITTED THAT THE FACTS ARE IDENTICAL TO WHAT HAS BEEN ARGUED IN ITA 25 & 27/CHD/2017 AND IN THE FACTS OF THE PRESENT CASE ALSO T HE POINT AT ISSUE IS FULLY COVERED BY THE DECISION OF THE APEX COURT IN THE CASE OF IN THE CASE OF CIT VS BALBIR SINGH MAINI (2017) 86 TAXMANN.COM 94 WHEREIN THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF SHR I CHARANJIT SINGH ATWAL HAS BEEN AFFIRMED. ACCORDINGLY, IT WAS THE SUB MISSION OF THE LAR THAT THE APPEAL OF THE REVENUE IS NOT MAINTAINABLE. 3. THE LD. SR.DR RELIES UPON THE ASSESSMENT ORDER. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD AND FIND THAT ON FACTS THE ISSUE IS IDENTICAL TO THE FACTS AS CONSIDERED IN THE CASE OF ITO V SMT. NIRMAL SHARMA & ITO V SMT. RAMA RANI IN ITA NOS. 25 & 27/CHD/2017. IT IS SEEN THAT THE ISSUE WAS CONSIDERED BY THE CO-ORDINATE BENCH IN THE SAID APPEALS CONSIDERING ITA 26/CHD/2017 A.Y.2008-09 PAGE 3 OF 4 IDENTICAL RECEIPTS PURSUANT TO THE VERY SAME AGREEMENT. IT IS SEEN THAT FOR IDENTICAL REASONS, THE AO HELD THE RECEIPTS TO BE EXIGIBLE TO THE LONG TERM CAPITAL GAINS. THE CIT(A) CONSIDERING THE FACTS RELIED UPON T HE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF SHRI CHARANJIT SINGH ATWAL. THE SAID DECISION IS UNDER CHALLENGE IN THE PRESENT PROCEE DINGS. AS NOTED, IDENTICAL ISSUE HAS BEEN CONSIDERED BY THE CO-ORDINATE B ENCH AND THE DEPARTMENTAL APPEAL HAS BEEN DISMISSED. FOR READY REFER ENCE, THE RELEVANT EXTRACT OF THE SAID DECISION FOR ITO VS SMT. NIRMA LA SHARMA & ANOTHER IS EXTRACTED HEREUNDER : 5.1 CONSIDERING THE FACTS AND THE POSITION OF LAW THEREON, THE CIT(A) CAME TO THE CONCLUSION THAT THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CHARANJIT SINGH ATWAL WAS APPLICABLE. THE RELEVANT FINDING CHALLENG ED BY THE REVENUE IS EXTRACTED HEREUNDER : FURTHER, A PERUSAL OF THE ASSESSMENT ORDER SHOWS TH AT THE ADDITION WAS MADE BASED ON THE DECISION OF THE HON'BLE ITAT IN THE CASE OF CHARANJIT SINGH ATWAL IN ITA NO. 448/CHD/2011 DATED 23.07.2013 AS THE CORE FACTS IN THAT APPEAL WERE IDENTICAL WITH THE FACTS OF THE INSTANT CASE. ON FURTHER APPEAL, THE H ON'BLE PUNJAB & HARYANA HIGH COURT ON 22.07.2015 HAS DECIDED THE ISSUE IN FAVOUR OF SH. C HARANJIT SINGH ATWAL. THE RELEVANT PORTION OF THE JUDGMENT OF HON'BLE HIGH COURT IN TH E CASE OF C.S. ATWAL VS. CIT, LUDHIANA IS REPRODUCED AS UNDER: '46. WE SUMMARIZE OUR CONCLUSIONS AS UNDER: 1. PERUSAL OF THE JDA DATED 25.02.2007 READ WITH SA LE DEEDS DATED 02.03.2007 AND 25.04.2007 IN RESPECT OF 3.08 ACRES AND 4.62 ACRES RESPECTIVELY WOULD REVEAL THAT THE PARTIES HAS AGREED FOR PRO-RATA TRANSFER OF LAND. 2. NO POSSESSION HAD BEEN GIVEN BY THE TRANSFEROR TO T HE TRANSFEREE OF THE ENTIRE LAND IN PART PERFORMANCE OF JDA DATED 25.02.2007 SO AS T O FALL WITHIN THE DOMAIN OF SECTION 53A OF 1882 ACT. 3. THE POSSESSION DELIVERED, IF AT ALL, WAS AS A LICEN SEE FOR THE DEVELOPMENT OF THE PROPERTY AND NOT IN THE CAPACITY OF A TRANSFERE E. 4. FURTHER SECTION 53A OF 1882 ACT, BY INCORPORATION , STOOD EMBODIED IN SECTION 2(47)(V) OF THE ACT AND ALL THE ESSENTIAL I NGREDIENTS OF SECTION 53A IF 1882 ACT WERE REQUIRED TO BE FULFILLED. IN THE ABSENCE OF RE GISTRATION OF JDA DATED 25.02.2007 HAVING BEEN EXECUTED AFTER 24-.09.2001, THE AGREEME NT DOES NOT FALL U/S 53A OF 1882 ACT AND CONSEQUENTLY SECTION 2(47)(V) OF THE A CT DOES NOT APPLY. 5. IT WAS SUBMITTED BY LEARNED COUNSEL FOR THE ASSESSE E APPELLANT THAT WHATEVER AMOUNT WAS RECEIVED FROM THE DEVELOPER, CAPITAL GAI NS TAX HAS ALREADY BEEN PAID ON THAT AND SALE DEEDS HAVE ALSO BEEN EXECUTED. IN VIE W OF CANCELLATION OF JDA DATED 25.02.2007, NO FURTHER AMOUNT HAS BEEN RECEIVED AND NO ACTION THEREON HAS BEEN TAKEN. IT WAS URGED THAT AS AND WHEN ANY AMOUNT IS RECEIVED. , CAPITAL GAINS TAX SHALL BE DISCHARGED THEREON IN ACCORDANCE WITH LAW. IN VIEW OF THE AFORESAID STAND, WHILE DISPOSING OF THE APPEALS, WE OBSERVE T HAT THE ASSESSEE APPELLANTS SHALL REMAIN BOUND BY THEIR SAID STAND. 6. THE ISSUE OF ELIGIBILITY TO CAPITAL GAINS TAX HAVIN G BEEN DECIDED IN FAVOUR OF THE ASSESSEE, THE QUESTION OF EXEMPTION U /S 54F OF THE ACT WOULD NOT SURVIVE ANY LONGER AND HAS BEEN RENDERED ACADEMIC. 7. THE TRIBUNAL AND THE AUTHORITIES BELOW WERE NOT RIG HT IN HOLDING THE ASSESSEE-APPELLANT TO BE LIABLE TO CAPITAL GAIN S TAX IN RESPECT OF REMAINING LAND MEASURING 13.5 ACRES FOR WHICH NO CO NSIDERATION HAD BEEN RECEIVED AND WHICH STOOD CANCELLED AND INCAPAB LE OF PERFORMANCE AT PRESENT DUE TO VARIOUS ORDERS PASSED BY THE SUPR EME COURT AND THE HIGH COURT IN PILS. THEREFORE, THE APPEALS ARE ALLO WED. 5.2 NO CHANGE IN POSITION OF FACTS WAS BROUGHT T O OUR NOTICE BY THE LD. SR.DR. IN THE FACE OF FACTS WHICH REMAIN UNREBUTTED ON RECORD AND NO DISTINCTION ON FACTS HAS ALSO BEEN BROUGHT TO OUR NOTICE BY THE REVENUE NOTICING THAT THE LEGAL POSITION AS ADDRESSED BY THE ITA 26/CHD/2017 A.Y.2008-09 PAGE 4 OF 4 JURISDICTIONAL HIGH COURT HAS BEEN AFFIRMED BY THE HON'BLE APEX COURT, THE APPEALS OF THE REVENUE ARE DISMISSED. THE CROSS OBJECTIONS OF THE ASSESSEE ARE DISMISSED AS NOT PRESSED. SAID ORDER WAS PRONOUNCED IN THE OPEN COUR T AT THE TIME OF HEARING ITSELF. 6. IN THE RESULT, APPEALS OF THE REVENUE ALONGWITH CROSS OBJECTIONS OF THE ASSESSEE ARE DISMISSED. 6. RESPECTFULLY FOLLOWING THE SAME, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 04.10.2018. SD/- SD/- ( . .. . & ) ( ! ) (DR. B.R.R. KUMAR) (DIVA SINGH) '( #/ ACCOUNTANT MEMBER ' #/ JUDICIAL MEMBER + , (+ #,- .-#/ COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT - 2. / THE RESPONDENT - 3. $ /#/ CIT 4. $ /# ()/ THE CIT(A) 5. -23 #4, & 4, 67839/ DR, ITAT, CHANDIGARH 6. 38 :%/ GUARD FILE (+ $ / BY ORDER, ; / ASSISTANT REGISTRAR ITAT,CHANDIGARH.