The ACIT, Circle-2(1), Baroda V. Shri Baldevsinh J. Parmar, Baroda

ITA 2614/AHD/2013

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 9287 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-02-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 08-02-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 01-11-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: S N SOPARKAR
• Keywords: Capital asset

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH AHMEDABAD BEFORE SHRI N. K. BILLAIYA, ACCOUNTANT MEMBER, AND SHRI S. S. GODARA, JUDICIAL MEMBER. ITA NO.2614/AHD/2013 (ASSESSMENT YEAR:2009-10) THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE-2(1), 2 ND FLOOR, AAYAKAR BHAVAN, RACE COURSE CIRCLE, BARODA-390007 APPELLANT VS. BALDEVSINH J. PARMAR, PROP. SHIVANI POLYMERS, 31, SATYANARAYAN SOCIETY, DANTESHWA, PRATAPNAGAR, BARODA RESPONDENT PAN: AEQPP0804H /BY REVENUE : SHRI PRASOON KABRA, SR. D.R. /BY ASSESSEE : SHRI S. N. SOPARKAR, A.R. /DATE OF HEARING : 08.02.2017 /DATE OF PRONOUNCEMENT : 14.02.2017 ORDER PER S. S. GODARA, JUDICIAL MEMBER THIS REVENUES APPEAL FOR ASSESSMENT YEAR 2009-10 A RISES AGAINST THE CIT(A)-II, BARODAS ORDER DATED 14.06.2013 IN APPEA L NO. CAB/II-309/11-12, ALLOWING ASSESSEES CLAIM OF HAVING RECEIVED THE SU M IN QUESTION OF RS.1,32,42,418/- IN FURTHERANCE TO AN MOU DATED 14. 09.2009 EXECUTED WITH VENDORS OF THE CAPITAL ASSET IN QUESTION AS CAPITAL GAINS THEREBY REVERSING ITA NO. 2614/AHD/2013 (ACIT VS. BALDEVSINH J. PARMA R) A.Y. 2009-10 - 2 - ASSESSING OFFICERS ACTION TREATING THE SAME AS INC OME FROM OTHER SOURCES IN ASSESSMENT ORDER DATED 27.12.2011, IN PROCEEDINGS U /S.143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. 2. WE STRAIGHTWAY COME TO THE RELEVANT FACTS. THE ASSESSEE ACTED AS A CONFIRMING PARTY IN A SALE DEED DATED 10.09.2008 FO R RS.4,68,55,612/- PERTAINING TO THE CAPITAL ASSET IN QUESTION WHEREIN EIGHT VENDORS NAMELY ANIRUDH B. PATEL, ANSUYABEN PATEL, ASHOK B. PATEL, DINESH B. PATEL, AURNABEN PATEL, VIBHA PATEL, NILESH M. PATEL AND KA LPESHBHAI M. PATEL SOLD THEIR OWNERSHIP RIGHTS IN FAVOUR OF S/SHRI HARISH T ALATI, HEMANT R. RAVAL AND LALITCHANDRA J. RAJ (VENDEES); RESPECTIVELY. THIS FOLLOWED AN MOU DATED 14.09.2008 BETWEEN ASSESSEE AND THE ABOVE VENDORS. THE SAID VENDORS PAID HIM THE SUM IN QUESTION OF RS.1,32,42,418/-. THE A SSESSEE DECLARED THE SAME AS CAPITAL GAINS. THE ASSESSING OFFICER PROCEEDED TO EXAMINE DETAILS THEREOF IN THE COURSE OF SCRUTINY. THE ASSESSEE QUOTED A BA NAKHAT DATED 16.12.1986 BETWEEN ORIGINAL LAND OWNERS OF THE VERY LAND. HIS CASE WAS THAT THIS BANAKHAT STATED SALE CONSIDERATION OF RS.10LACS INV OLVING ADVANCE MONEY OF RS.5LACS. HE HIGHLIGHTED THE FACT THAT THE ABOVE V ENDORS AND HIMSELF HAD ARRIVED INTO THE MOU HEREINABOVE ON 14.09.2009 ACKN OWLEDGING HIS POSSESSION OVER THE CAPITAL ASSETS SOLD THEREBY PAY ING HIM THE ABOVE STATED SUM IN LIEU OF HIS RIGHTS INVOLVED THEREIN UNDER TH E PROVISIONS OF THE ACT. 3. THE CASE FILE INDICATES THAT THE ASSESSING OFFIC ERS ORDER DATED 27.12.2011 REJECTED THE ABOVESTATED PLEAS. HE FIRS T OF ALL OBSERVED THAT ASSESSEES BANAKHAT DATED 16.12.1986 WAS NOT A VALI D DOCUMENT BEING AN UNREGISTERED INSTRUMENT. HE THEN TOOK NOTE OF THE FACT THAT THE ASSESSEE HAD NOT FILED ANY DETAILS OF ADVANCE PAYMENT OF RS.5LAC S SO AS TO PROVE TRANSFER OF TITLE, ANY RIGHT OR INTEREST THEREUPON. HE ALSO CA ME ACROSS CONTENTS OF THE ABOVESTATED SALE DEED NOT STATING ANY AMOUNT TO HAV E BEEN PAID TO HIM FOR HIS ITA NO. 2614/AHD/2013 (ACIT VS. BALDEVSINH J. PARMA R) A.Y. 2009-10 - 3 - ROLE AS A CONFIRMING PARTY. ALL THIS MADE THE ASSE SSING OFFICER TO TREAT THE ABOVESTATED SUM OF RS.1,32,42,418/- AS INCOME FROM OTHER SOURCES INSTEAD OF ASSESSEES CAPITAL GAINS. 4. THE ASSESSEE PREFERRED APPEAL. THE CIT(A) SUMMA RISES ASSESSING OFFICERS TWO REASONS OF NON REGISTRATION OF BANAKH AT DATED 16.12.1986 AND LAC OF EVIDENCE PROVING ADVANCE PAYMENT OF RS.5LACS AS BROADER CONTOURS FOR REJECTING HIS ABOVESTATED EXPLANATION. HE THEN ACC EPTS ASSESSEES CONTENTIONS AS FOLLOWS: 3.3.1. I HAVE CAREFULLY CONSIDERED THE SUBMISSION S OF THE LEARNED AUTHORIZED REPRESENTATIVE AND THE ORDER OF THE ASSE SSING OFFICER. THERE IS NO DISPUTE IN THE ASSESSMENT ORDER THAT THE ASSESSEE H AS OFFERED LONG TERM CAPITAL GAIN (LTCG) FROM SALE OF TWO LANDED PROPERTIES. TH E FIRST ONE I.E., LAND AT KELANPUR S.NO. 450 ABC WAS NEVER OWNED BY THE ASSES SEE BUT HE WAS TREATED AS 'CONFIRMING PARTY' BOTH BY THE LAND OWNERS AS WELL AS BY THE PURCHASERS. THERE IS NO DISPUTE OF TAXATION OF LAND AT SAYAJIPURA WHICH WAS ALSO SOLD DURING THE YEAR. 3.3.2. THE OBJECTION RAISED BY THE A.O. IS THAT THE ASSESS EE WAS NOT THE OWNER OF THE LAND AT KELANPUR AND, THEREFORE, HE CA NNOT CLAIM CAPITAL GAIN ON THE SAID OF THAT LAND. THE A.O. TREATED THE AMOUNT OF R S.1,31,42,418/- RECEIVED BY THE ASSESSEE AS 'INCOME FROM OTHER SOURCES' AND DID NOT ALLOW (A) COST OF ACQUISIT ION OF THAT LAND I.E., RS.5,00,000/- AND ITS INDEXATION (B). A.O. HAS ALSO DISALLOWED EXEMPTION OF RS.53,14,104/- CLAIMED UNDER SECTION 5 4B AND 54EC OF THE ACT. ASSESSEE HAS CLAIMED TO BE THE BENEFICIAL OWNER OF THE IMPUGNED LAND BY VIRTUE OF BANAKHAT DATED 16.12.1986 BETWEEN HIM AND THE LAND OWNERS I.E., KALAVATIBEN B. PATEL, SHRI MAHENDRA B. PATEL, ANIRUDH B. PATEL, AS HOKBHAI B. PATEL, DINESH B. PATEL, ANSUYABEN B. PATEL & ARUNABEN B. PATEL. THE ASSESSING OFFICER HAS DOUBTED THE GENUINENESS OF THIS VERY DOCUMENTS BY O BSERVING THAT THIS IS AN AFTERTHOUGHT OF THE ASSESSEE. TWO GROUNDS HAVE BEEN CITED BY HIM FOR REACHING THIS CONCLUSION. FIRST OBSERVATION IS THAT THE BANAK HAT IS NOT REGISTERED AND IS NOT EVEN NOTARIZED. SECONDLY, ACCORDING TO THE A.O., TH ERE IS NO PROOF OF PAYMENT OF RS,5,00,000/- BY THE ASSESSEE TO THE LAND OWNERS AS CLAIMED IN THE BANAKHAT. SO FAR AS THE REGISTRATION OF BANAKHAT IS CONCERNED, THE O BSERVATION OF THE ASSESSING OFFICER IS CORRECT. HOWEVER, MERE NON REGISTRATION OF THE DOCUMENT WILL NOT RENDER THE SAME AS SHAM OR INVALID. THE BANAKHAT IS ON RS. 100/- STAMP PAPER AND THE SIGNATURE & SEAL OF STAMP VENDOR IS CLEAR. THE DATE OF SALE OF STAMP PAPER IS MENTIONED AS 16.12.1986. UNLESS PROVED CONTRARY, TH E NORMAL PRESUMPTION WOULD BE THAT THE DOCUMENT IS GENUINE. IT IS SIGNED BY AL L THE LANDOWNERS AS WELL AS BY THE ASSESSEE. THIS BANAKHAT IS RECOGNIZED BY THE PURCHA SERS OF THE LAND ALSO, WHO IN THE SALE DEED DATED 10.09.2008 HAVE ACKNOWLEDGED TH E SAME. LF THERE WAS ANY DOUBT IN THE MIND OF THE A.O. ABOUT THE GENUINENESS OF THE BANAKHAT, SEVERAL OPTIONS WERE OPEN BEFORE HIM. HE COULD HAVE SUMMONE D THE SIGNATORIES OF THE DOCUMENTS I.E., THE LAND OWNERS AND VERIFIED FROM T HEM. ALTERNATIVELY, THE ENQUIRY COULD HAVE BEEN MADE BY DEPUTING THE INSPECTOR AND RECORDING THE STATEMENTS OF ITA NO. 2614/AHD/2013 (ACIT VS. BALDEVSINH J. PARMA R) A.Y. 2009-10 - 4 - THE STAMP VENDOR. IN EXTREME CASE, MATTERS LIKE THI S ARE ALSO REFERRED TO THE FORENSIC LABORATORY TO DETERMINE THE EXACT DATE OF THE DOCUMENT. UNFORTUNATELY, NONE OF THE AVAILABLE OPTIONS WAS USED BY THE ASSES SING OFFICER AND HE SIMPLY BASED HIS OBSERVATION ON SURMISES AND CONJECTURES. THE SECOND OBJECTION OF THE A.O. WAS THAT THERE WAS NO PROOF OF PAYMENT MADE BY THE ASSESSEE TO THE LANDOWNERS. THIS IS AGAIN NOT TRUE AS THERE IS CLEA R CUT MENTION OF CASH PAYMENT OF RS.5,00,000/- IN THE BANAKHAT ITSELF. AGAIN, AS STA TED ABOVE, THE A.O. PREFERRED NOT TO MAKE ANY ENQUIRY FROM THE SIGNATORIES OF BANAKHA T, I.E., THE LANDOWNERS WHO HAD CLAIMED TO HAVE RECEIVED CASH PAYMENT OF RS.5,0 0,000/- FROM TIME TO TIME. UNDER THESE CIRCUMSTANCES, IT IS HELD THAT THE BANA KHAT DATED 16.12.1986 BETWEEN THE ASSESSEE AND THE LAND OWNERS I.E., KALAVATIBEN B. PATEL, SHRI MAHENDRA B. PATEL, ANIRUDH B. PATEL, ASHOKBHAI B. PATEL, DINESH B. PATEL, ANSUYABEN B. PATEL & ARUNABEN B. PATEL WAS A GENUINE DOCUMENTS AND A.O 'S. OBSERVATION THAT IT WAS AN AFTERTHOUGHT OF THE ASSESSEE IS NOT BASED ON COR RECT APPRECIATION IF FACTS. 5. WE HAVE HEARD BOTH THE PARTIES. CASE FILE PERUS ED. SHRI KABRA STRONGLY ARGUES IN FAVOUR OF REVENUES SOLE SUBSTAN TIVE GROUND THAT CIT(A) HAS ERRED IN ACCEPTING ASSESSEES CLAIM TO HAVE ENT ERED INTO THE IMPUGNED BANAKHAT DATED 16.12.1986. HIS CASE IS THAT THE AB OVE STATED BANAKHAT FOLLOWED BY THE MOU IN QUESTION DATED 14.09.2009 HA D BEEN RIGHTLY REJECTED IN COURSE OF ASSESSMENT PROCEEDINGS TO BE LACKING A NY COGENT EVIDENCE. SHRI SOPARKAR (LEARNED SENIOR COUNSEL) DRAWS STRONG SUPP ORT FROM THE CIT(A)S TWIN REASONING EXTRACTED HEREINABOVE. HE SEEKS TO PLACE VEHEMENT EMPHASIZE TO ASSESSEES PLEA THAT THE ASSESSING AUT HORITY NEVER SUMMONED THE ABOVE STATED VENDORS SO AS TO EXPRESS ANY DOUBT OVE R GENUINENESS OF HIS CLAIM OF HAVING ENTERED INTO THE BANAKHAT IN QUESTI ON. 6. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO RI VAL CONTENTIONS. THE SOLE DISPUTE BETWEEN THE PARTIES IS QUA ONUS OF PRO VING GENUINENESS OF THE BANAKHAT IN QUESTION DATED 16.12.1986 STATED TO BE EXECUTED BY THE ASSESSEE/VENDEE WITH THE OWNER OF THE LAND IN QUEST ION COMPRISED IN REVENUES SURVEY NO.613, VILLAGE KELANPUR, TALUKA V ADODARA ADMEASURING TOTAL AREA ACRE-HECTARE-KUNTHA 10-72-43. PAGES 12 TO 15 OF THE PAPER BOOK CONTAIN TRUE CERTIFIED COPY THEREOF ALONG WITH ITS GUJARATI VERNACULAR AT PAGES 10 TO 11. IT EMERGES FROM PAGE 14 THAT THE ABOVE S TATED VENDORS DECLARED ITA NO. 2614/AHD/2013 (ACIT VS. BALDEVSINH J. PARMA R) A.Y. 2009-10 - 5 - THEMSELVES TO BE IN CULTIVATION POSSESSION OF THE S AID AGRICULTURAL LAND AGREED TO BE SOLD TO THE ASSESSEE/VENDEE FOR A SUM OF RS.1 0LACS OUT OF WHICH RS.5LACS HAD ALREADY BEEN RECEIVED TILL THE SAID DA TE I.E. 16.12.1986 AS ADVANCE MONEY. THERE IS NO QUARREL THAT THE PARTIE S DID NOT QUOTE ANY EVIDENCE OF ADVANCE PAYMENT OF RS.5LACS TILL THE AB OVE STATED MOU. NOR DID THEY EXECUTE ANY SALE DEED FOR A TIME SPAN OF ALMOS T OF 22 YEARS. IT IS ONLY IN THE RELEVANT PREVIOUS YEAR I.E. 10.09.2011 WHEREIN THE VERY VENDORS SOLD THE SAID AGRICULTURAL LANDS TO OTHER VENDEES (SUPRA) IN CLUDING THE ASSESSEE TO BE A CONFIRMING PARTY. PAGE 49 OF THE PAPER BOOK CONTAIN S THE SAID VENDORS DECLARATION THAT THEY ARE INDEPENDENT OWNERS IN POS SESSION OF THE LAND IN QUESTION. THIS FOLLOWS THE MOU BETWEEN ASSESSEE AN D THE SAID VENDORS WHEREIN THEY HAVE PAID HIM THE SUM IN QUESTION OF R S.1.32 CRORES. WE FIND AT PAGE 64 THAT THESE VENDORS AGREED THAT THE ASSE SSEE WAS CULTIVATING THE ABOVE AGRICULTURAL LAND / CAPITAL ASSETS SOLD. IT IS THUS CLEAR THAT THIS MOU STATING THE ASSESSEE TO BE IN CULTIVATING POSSESSIO N IS NEITHER SUPPORTED BY THE BANAKHAT IN QUESTION DATED 16.12.1986 NOR THE SALE DEED DATED 10.09.2008. THERE IS FURTHER NO EVIDENCE IN THE CASE FILE IN TH E NATURE OF FORM 7/12 THAT THE ASSESSEE EVER REMAINED IN CULTIVATING POSSESSION OF THE LANDS SOLD. WE OBSERVE IN THESE PECULIAR FACTS THAT THE ASSESSEE H AS FAILED TO PROVE VERACITY/GENUINENESS OF THE BANAKHAT IN QUESTION DA TED 16.12.1986. WE THUS FIND FORCE IN ASSESSING OFFICERS OBSERVATIONS ON T HE LATTER ASPECT OF THE ISSUE THAT THE ASSESSEE HAD FAILED IN PROVING ANY ADVANCE PAYMENT OF RS.5LACS IN QUESTION BY WAY OF ANY SUPPORTIVE MATERIAL; WHATSOE VER. 7. SHRI SOPARKAR AT THIS STAGE VEHEMENTLY CONTENDS THAT THE CIT(A) HAS RIGHTLY HELD THE ASSESSEE TO HAVE PROVED THE ABOVE STATED BANAKAHAT INDICATING ADVANCE PAYMENT OF RS.5LACS. WE FAIL TO CONCUR WIT H THIS PLEA BECAUSE OF THE FACT THAT THE VERY BANAKHAT ITSELF IS IN DISPUTE BE TWEEN THE PARTIES. ONCE WE ITA NO. 2614/AHD/2013 (ACIT VS. BALDEVSINH J. PARMA R) A.Y. 2009-10 - 6 - HAVE HELD THE SAME TO BE NOT SUPPORTED BY ANY EVIDE NCE, THE RELEVANT TERMS THEREIN CANNOT BE RELIED UPON. WE ACCORDINGLY REJE CT ASSESSEES CONTENTION. 8. SHRI SOPARKARS NEXT ARGUMENT IS THAT THE ASSESS ING OFFICER OUGHT TO HAVE SUMMONED THE VENDORS IN QUESTION IN CASE HE HA D ANY DOUBT ABOUT THE BANAKHAT IN QUESTION. WE FIND NO MERIT IN THIS PLE A AS WELL AS THE SAID VENDORS HAD ALREADY PAID THE AMOUNT IN QUESTION TO THE ASSESSEE. THEY HARDLY HAD ANY FURTHER EXPLANATION TO MAKE IN VIEW OF THEI R ACTION MAKING THE PAYMENT IN QUESTION TO THE ASSESSEE. WE FURTHER MA KE IT CLEAR THAT THERE IS NO DISPUTE ABOUT THE FACT AS TO WHETHER OR NOT THE ASS ESSEE HAS RECEIVED THE PAYMENT OR NOT BUT THE ISSUE HEREIN IS ABOUT GENUIN ENESS OF HIS CLAIM OF HAVING EXECUTED THE BANAKHAT DATED 16.12.1986. WE THUS REJECT INSTANT ARGUMENT AS WELL. 9. SHRI SOPARKAR CONTINUES HIS STAND IN SUPPORT OF THE CIT(A)S FINDINGS AND SUBMITS THAT ASSESSING OFFICERS ACTION GOES AG AINST A REGISTERED DOCUMENT/SALE DEED DATED 10.09.2008 RECOGNISING ASS ESSEES STATUS AS THIRD PARTY. THIS PLEA ALSO FAILS TO IMPRESS UPON US. W E ARE OF THE OPINION IN GIVEN FACTS OF THE CASE THAT IT IS NOT THE SALE DEED WHIC H IS IN DISPUTE BUT THE ISSUE HEREIN IS ABOUT GENUINENESS OF ASSESSEES CLAIM TO HAVE ENTERED INTO THE ABOVE STATED BANAKHAT DATED 16.12.1986. WE THUS REJECT T HE INSTANT ARGUMENT AS WELL. 10. SHRI SOPARKAR THEN CONTENDS THAT THE ASSESSING OFFICER HAD ERRED IN REJECTING ASSESSEES EXPLANATION ON THE GROUND THAT THE ABOVE STATED BANAKHAT WAS NOT A REGISTERED DOCUMENT. SHRI KABRA FAILS TO QUOTE ANY MANDATORY CONDITION EITHER IN THE REGISTRATION ACT OR ANY OTH ER STATUTE TO THIS EFFECT THAT SUCH A BANAKHAT IS COMPULSORILY REGISTRABLE. WE TH US FIND NO REASON TO DISAGREE WITH THE LD. CIT(A)S OPINION. OUR INSTANT AGREEMENT WITH ASSESSEES CONTENTION ON THIS REGISTRATION ASPECT IS RENDERED ACADEMIC AS WE HAVE ITA NO. 2614/AHD/2013 (ACIT VS. BALDEVSINH J. PARMA R) A.Y. 2009-10 - 7 - ALREADY HELD ON MERITS THAT HE HAS FAILED IN PROVIN G VERACITY OF THE BANAKHAT IN QUESTION DATED 16.12.1986. WE ACCORDINGLY CONCL UDE THAT THE ASSESSING OFFICER HAD RIGHTLY ACTED IN TREATING THE ABOVE SUM RECEIVED OF RS.1.32 CRORES AS INCOME FROM OTHER SOURCES INSTEAD OF CAPITAL GAI NS IN ASSESSEES COMPUTATION. THE REVENUES SOLE SUBSTANTIVE GROUND STANDS ACCEPTED. 11. THIS REVENUES APPEAL IS ALLOWED. [PRONOUNCED IN THE OPEN COURT ON THIS THE 14 TH DAY OF FEBRUARY, 2017.] SD/- SD/- ( N. K. BILLAIYA ) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 14/02/2017 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ( )*+ ,--. . /0 / DR, ITAT, AHMEDABAD 1 +23 45 / GUARD FILE. BY ORDER / . // . /0