Manish Batra, New Delhi V. ITO NWard-41(3), New Delhi

ITA 2646/DEL/2019

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4680 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Assessment Year: 2014-2015
• Appeal Filed On: 27-03-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Application of stay; Cost of acquisition; TDS
• Section: 234B; 143(1)

Judgement Text

STAY NO. 522/D/2019 (IN ITA 2646/D/2019) 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E NEW DELHI BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER STAY APPLICATION NO. 522/DEL/2019 (IN ITA NO.2646/DEL/2019) ASSESSMENT YEAR: 2014-15 ITA NO.2646/DEL/2019 ASSESSMENT YEAR: 2014-15 MANISH BATRA, 10, AVTAR ENCLAVE, PASCHIM VIHAR, NEW DELHI-110063 (PAN: ABYPB9298G) VS INCOME TAX OFFICER, WARD-41(3), NEW DELHI APPELLANT RESPONDENT ASSESSEE BY : SHRI A.K. SRIVASTAVA , CA DEPARTMENT BY: MS RINKU SINGH, SR. DR DATE OF HEARING : 22.05.2019 DATE OF PRONOUNCEMENT : 31.05.2019 O R D E R PER SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER : THE CAPTIONED APPEAL IS PREFERRED BY THE ASSESSEE A GAINST THE ORDER DATED 22.1.2019 PASSED BY THE LD. COMMISS IONER OF INCOME TAX (APPEALS)-14, NEW DELHI {CIT (A)} FOR AS SESSMENT YEAR 2014-15. 2.0 BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADING OF TABLE MATS, TABLE COV ERS BEING STAY NO. 522/D/2019 (IN ITA 2646/D/2019) 2 CARRIED ON IN THE NAME AND STYLE OF M/S MAHAVIR IMP EX. RETURN DECLARING INCOME OF RS. 2,42,003/- WAS FILED WHICH WAS PROCESSED INITIALLY U/S 143(1) OF THE INCOME TAX AC T, 1961 (HEREINAFTER CALLED 'THE ACT') AND SUBSEQUENTLY, TH E CASE WAS SELECTED FOR LIMITED SCRUTINY THROUGH CASS. AS PER THE AIR INFORMATION RECEIVED, THE ASSESSEE HAD SOLD CERTAIN PROPERTIES ON 31.01.2014 FOR A SUM OF RS. 1,30,00,000/-. THE ASS ESSING OFFICER NOTED THAT NO LONG TERM CAPITAL GAIN HAD BE EN DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME. AS PER THE I NFORMATION AVAILABLE WITH THE ASSESSING OFFICER, THE COST OF P ROPERTY SOLD WAS RS. 27,66,500/- AND AFTER INDEXATION, THE COST OF ACQUISITION FOR THE ASSESSEE WORKED OUT TO RS. 50,05,286/-. THUS, BASED ON THESE FIGURES, THE ASSESSING OFFICER PROPOSED AN AD DITION OF RS. 80,00,714/- ON ACCOUNT OF LONG TERM CAPITAL GAIN. IN RESPONSE, THE ASSESSEE SUBMITTED BEFORE THE ASSESSING OFFICER THAT THE LONG TERM CAPITAL GAIN, AS COMPUTED BY THE ASSESSING OFF ICER, WAS NOT TAXABLE IN THE HANDS OF THE ASSESSEE AS THE SALE OF THE PROPERTY WAS NOT EFFECTED FOR THE REASON THAT THE PART SALE CONSIDERATION RECEIVED THROUGH CHEQUE AMOUNTING TO RS. 57 LAKH WA S DISHONOURED. THEREFORE, THE SALE WAS NOT COMPLETED . IT WAS FURTHER SUBMITTED BY THE ASSESSEE BEFORE THE ASSESS ING OFFICER STAY NO. 522/D/2019 (IN ITA 2646/D/2019) 3 THAT SALE CONSIDERATION OF RS. 73 LAKH PAYABLE TO T HE ASSESSEE IN CASH WAS ALSO NOT PAID TO HIM AND, THUS, THE ASSESS EE WAS CHEATED BY THE PURCHASER. IT WAS ALSO SUBMITTED BE FORE THE ASSESSING OFFICER THAT THE ASSESSEE HAD FILED SUITS IN DISTRICT COURT OF GHAZIABAD FOR DECLARING THE SALE AS NULL A ND VOID AND FOR THE CANCELLATION OF THE SALE DEED EXECUTED BY THE A SSESSEE. HOWEVER, THE ASSESSING OFFICER DID NOT ACCEPT THE A SSESSEES CONTENTION AND NOTED THAT AS PER THE SALE DEED EXEC UTED AND REGISTERED, THE ASSESSEE HAD RECEIVED RS. 73 LAKH B Y CASH AND RS. 57 LAKH BY WAY OF CHEQUES AND, THEREFORE, THE ASSES SEES CONTENTION THAT THE SALE HAD NOT MATERIALISED WAS N OT ACCEPTABLE. THE ASSESSING OFFICER PROCEEDED TO MAKE AN ADDITION OF RS. 80,00,714/- ON ACCOUNT OF LONG TERM CAPITAL GAINS. A FURTHER ADDITION OF RS. 5,31,748/- WAS ALSO MADE TO THE INC OME OF THE ASSESSEE AS INCOME FROM OTHER SOURCES AND THE ASSES SMENT WAS COMPLETED AT AN INCOME OF RS. 87,74,195/-. 2.1 AGGRIEVED, THE ASSESSEE APPROACHED THE LD. FIR ST APPELLATE AUTHORITY AND CHALLENGED THE ACTION OF TH E ASSESSING OFFICER IN MAKING THE IMPUGNED ADDITIONS. HOWEVER, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DISMISSED THE ASSESSEES STAY NO. 522/D/2019 (IN ITA 2646/D/2019) 4 APPEAL AND NOW, THE ASSESSEE IS BEFORE THIS TRIBUNA L (ITAT) CHALLENGING THE ADDITIONS ON THE FOLLOWING GROUNDS: - 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, AS AVAILABLE IN THE ASSESSMENT ORDER AND ON T HE FILE OF THE ASSESSING OFFICER, THE LEARNED COMMISSI ONER OF INCOME TAX (APPEALS), ERRED IN NOT CONSIDERING T HE SAME, BEFORE CONFIRMING THE ADDITION OF RS. 80,00,1 74/- ON ACCOUNT OF CAPITAL GAIN ON SALE OF PLOT. 2. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) BEING AWARE OF THE FACT THAT THE CHEQUES FOR RS. 57,00,000/- ISSUED BY THE BUYER HAVING BEEN DISHONOURED, HE OUGHT TO HAVE HELD THAT THE SALE DE EDS EXECUTED, WERE TO BE TREATED AS CANCELLED / NON-EST AS PER THE TERMS OF THE SALE DEEDS, AND THAT NO CAPITA L GAIN ACCRUED TO THE APPELLANT. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS), ERRED IN NOT CONSIDERING AND COMMENTING ON THE CASE LAWS CITED BEFORE THE ASSESSING OFFICER WH ICH ARE PARTLY REPRODUCED IN THE ASSESSMENT ORDER. 4. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAVING OBSERVED THAT THE ASSESSEE HAD RECEIVED INTEREST AMOUNTING TO RS. 5,31,748/- FROM M/S COSMIC STRUCTURES LTD., AS PER 26AS, WHICH ALSO SHO WS TDS OF RS. 53,171/-, OUGHT TO HAVE DIRECTED THAT CR EDIT FOR THE SAME BE ALLOWED . 5. THAT THE CALCULATION OF TAX PAYABLE AND INTERE ST U/S 234B BEING INCORRECT, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE DIRECTED THE ASSESSING OFFICER TO RE-COMPUTE THE TAX AND INTERES T PAYABLE AFTER ALLOWING CREDIT OF TDS. 6. THAT THE ORDER BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS BAD IN LAW AND HAS BEEN PASSED WITHOUT GIVING SUFFICIENT OPPORTUNITY. STAY NO. 522/D/2019 (IN ITA 2646/D/2019) 5 THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND, MODIFY, VARY OR DELETE ANY GROUND OF APPEAL BEFORE OR AT THE TIME OF HEARING. 3.0 THE LD. AUTHORISED REPRESENTATIVE (AR) SUBMITT ED THAT THE REGISTRATION OF SALE DEED, ALTHOUGH, HAS EVIDEN TIARY VALUE BUT IT IS NOT CONCLUSIVE. IT WAS SUBMITTED THAT IF THE ASSESSEE, DESPITE THE REGISTRATION OF SALE DEED, IS ABLE TO PROVE THA T NO SALE HAS IN FACT TAKEN PLACE AND THAT THE TRANSACTION IS SHAM, CAPITAL GAINS TAX IS NOT LEVIABLE. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE HAS FILED SUITS IN THE DISTRICT COURT OF GHAZIABAD FOR TREATING THE SALE AS NULL AND VOID AND FOR CANCELLATION OF THE S ALE DEED IN VIEW OF SPECIFIC CLAUSE IN THE SALE DEED WHICH PROVIDED THAT IN CASE THE CHEQUES WERE NOT HONOURED, THE SALE DEED SHALL BE D EEMED TO HAVE BEEN CANCELLED. OUR ATTENTION WAS DRAWN TO TH E RELEVANT PAGES IN THE PAPER BOOK CONTAINING THE COPY OF THE SALE DEED. IT WAS FURTHER SUBMITTED THAT THE LD. FIRST APPELLATE AUTHORITY HAD FAILED TO NOTE THAT THE TERMS OF THE SALE DEED CLEA RLY PROVIDED THAT IN CASE A CHEQUE IS NOT HONOURED, THE SALE DEED WAS TO BE TREATED AS CANCELLED. IT WAS FURTHER SUBMITTED THAT CAPITA L GAINS CAN BE TAXED ONLY IF THERE IS ACTUAL TRANSFER AND THAT SIN CE PAYMENT OF PURCHASE CONSIDERATION IS AN ESSENTIAL PART OF TRAN SFER OF PROPERTY, THE IMPUGNED SALE CANNOT BE SAID TO HAVE MATERIALISED STAY NO. 522/D/2019 (IN ITA 2646/D/2019) 6 AND TRANSFER OF THE IMPUGNED PROPERTY EFFECTED WHEN THE SALE CONSIDERATION HAD NOT BEEN PAID. IT WAS SUBMITTED THAT ALTHOUGH REGISTRATION IS PRIMA FACIE PROOF OF INTENTION TO TRANSFER THE PROPERTY, THE SAME IS NOT PROOF OF OPERATIVE TRANSF ER IF THE PAYMENT OF CONSIDERATION IS A CONDITION PRECEDENT F OR PASSING OF THE PROPERTY. THE LD. AR, RELYING ON JUDICIAL PREC EDENTS PRAYED THAT THE ADDITION MADE ON ACCOUNT OF CAPITAL GAINS BE DELETED. 4.0 HOWEVER, ON A QUERY FROM THE BENCH, THE LD. A R AGREED THAT THE MATTER MAY BE RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR EXAMINING THE ISSUE AFRESH IN LIGHT OF THE EVIDENCES AND THE ASSESSEE BE GIVEN THE LIBERTY TO FILE NECES SARY FRESH BEFORE THE ASSESSING OFFICER IN SUPPORT OF HIS CONTENTION. 5.0 THE LD. SR. DEPARTMENTAL REPRESENTATIVE HAD NO OBJECTION TO THE ISSUE BEING RESTORED TO THE FILE O F THE ASSESSING OFFICER. 6.0 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIAL AVAILABLE ON RECORD. WE DULY TAKE NOTE OF THE FACT THAT THE ASSESSEE HAS FILED SUIT FOR DECLARING THE IMPUG NED SALE AS NULL AND VOID. WE ALSO NOTE THAT ALTHOUGH THE SALE DEED STATES THAT THE SALE CONSIDERATION HAS BEEN PAID TO THE ASSESSE E, IT IS THE ASSESSEES CONTENTION THAT THE CHEQUES HAVE BEEN DI SHONOURED STAY NO. 522/D/2019 (IN ITA 2646/D/2019) 7 AND THAT THE CASH COMPONENT OF THE SALE CONSIDERATI ON HAS ALSO NOT BEEN RECEIVED. WE ALSO NOTE THAT THE SALE DEED MENTIONS THAT THE SELLER I.E. THE ASSESSEE HAS RECEIVED THE SALE CONSIDERATION PRIOR TO THE EXECUTION OF THE SALE DEED. HOWEVER, IT IS FURTHER NOTED THAT THE SALE DEED ALSO MENTIONS THAT THE SAL E DEED WILL BE DEEMED TO HAVE BEEN CANCELLED IN THE EVENT OF THE C HEQUES BEING DISHONOURED. ALL THESE FACTS WOULD NECESSARILY HAV E TO BE EXAMINED BY THE ASSESSING OFFICER BEFORE THE IMPUGN ED PROCEEDS CAN BE BROUGHT TO TAX. DURING THE COURSE OF HEARIN G, THE LD. AR ALSO COULD NOT APPRISE THE BENCH ON THE OUTCOME OF THE CIVIL SUIT WHICH HAD BEEN FILED BY THE ASSESSEE FOR DECLARING THE SALE AS NON-EST . ACCORDINGLY, IT WILL BE IN THE FITNESS OF THINGS IF THE ASSESSING OFFICER RE-EXAMINES THE ISSUE AFTER DULY CONSIDERING WHATEVER EVIDENCE THE ASSESSEE MAY DEEM APPROPRIATE TO FILE BEFORE THE ASSESSING OFFICER IN SUPPORT OF HIS CLAI M AND THEREAFTER PASS THE ASSESSMENT ORDER AS PER LAW. THE ASSESSIN G OFFICER WILL AFFORD PROPER OPPORTUNITY TO THE ASSESSEE TO PRESEN T HIS CASE AND THE ASSESSEE WILL ALSO FULLY COOPERATE IN THE ASSES SMENT PROCEEDINGS IN THIS REGARD WHENEVER HE IS CALLED UP ON TO DO SO FAILING WHICH THE ASSESSING OFFICER SHALL BE AT LIB ERTY TO PROCEED EX PARTE QUA THE ASSESSEE IN ACCORDANCE WITH LAW. ACCORDINGLY, IN STAY NO. 522/D/2019 (IN ITA 2646/D/2019) 8 LIGHT OF OUR ABOVE OBSERVATIONS, WE RESTORE THE ENT IRE APPEAL TO THE FILE OF THE ASSESSING OFFICER. THUS, THE APPE AL STANDS ALLOWED FOR STATISTICAL PURPOSES. 7.0 SINCE THE ASSESSEES APPEAL HAS BEEN RESTORED TO THE FILE OF THE ASSESSING OFFICER, THE STAY PETITION BE COMES IN FRUCTUOUS AND IS DISMISSED. 8.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS A LLOWED FOR STATISTICAL PURPOSES AND THE STAY APPLICATION OF TH E ASSESSEE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST MAY, 2019. SD/- SD/- (G.D. AGRAWAL) (SUDHANSHU SR IVASTAVA) VICE PRESIDENT JUDIC IAL MEMBER DATED: 31 ST MAY, 2019 GS COPY FORWARDED TO: - 1) APPELLANT 2) RESPONDENT 3) CIT(A) 4) CIT 5) DR BY ORDER ASSTT. REGISTRAR