Smt.B S leelavathi Represented By Legal Heir Sri B S N Hari , Bangalore V. The Income Tax Officer Ward-7(2)(2), Bangalore

ITA 29/BANG/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 7679 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 7 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 09-04-2020
• Assessment Year: 2010-2011
• Appeal Filed On: 04-01-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: V SRINIVASAN SHRI SUNDAR RAJ
• Keywords: Sale consideration of property below Jantri Value
• Section: 143(3); 50C; 142(1); 250; 147; 148; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCHES A BENCH: BANGALORE BEFORE SHRI G. MANJUNATHA , ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO. 29 /BANG/2018 (ASSESSMENT YEAR: 20 10 - 11 ) SMT. B. S. LEELAVATHI, REP. BY LEGAL HEIR SRI B S N HARI, NO.1, GUTTE ANJANEYA TEMPLE STREET, HOSUR MAIN ROAD, WILSON GARDEN, BANGALORE - 560 027 .APPELLANT PAN AAPPL 8104M VS. INCOME TAX OFFICER , WARD 7 (2)(2), BANGALORE. RESPONDENT. ASSESSEE BY: SHRI V. SRINIVASAN, ADVOCATE. REVENUE BY: SHRI SUNDAR RAJAN, ADDL. CIT (D.R) DATE OF HEARING : 20.08. 20 20. DATE OF PRONOUNCEMENT : 31 .08 .20 20. O R D E R PER SHRI PAVAN KUMAR GADALE, JM : THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDER OF C OMMISSIONER OF INCOME TAX (APPEALS) - 10 , BANGALORE PASSED U/S . 143(3) R.W.S. 147 AND U/S 250 OF THE INCOME TAX ACT, 1961 (THE ACT). 2. TH E ASSESSEE HAS RAISED THE FOLL OWING GROUNDS OF APPEAL: 2 ITA NO. 29/BANG/2018 3 ITA NO. 29/BANG/2018 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND HAS INCOME FROM HOUSE PROPERTY AND INCOME OTHER SOURCES . THE ASSESSEE HAS FILED THE RETURN OF I NCOME ELECTRONICALL Y ON 12.04.2016 FOR ASSESSMENT YEAR 2010 - 11 WITH TOTAL INCOME OF RS.1,01,970 / - . THE A.O FOUND DURIN G THE F.Y. 2009 - 10 , THE ASSESSEE HAS SOLD THE IMMOVABLE PROPERTY AD MEASURING TWO ACRES OF LAND TO M/S. JB & HARA PRO PERTIES FOR A C ONSIDERATION OF RS.10,00 0 / - , WHERE AS THE GUIDANCE VALUE AS PER THE 4 ITA NO. 29/BANG/2018 STAMP REGISTRATION ACT IS RS.89,90,000 / - AND THE PROVISIONS OF SECTI ON 50C OF THE ACT SHALL APPLY AND INVOKED THE PROVISIONS OF SECTION 147 OF THE ACT, AND ISSUED NOTICE UNDER S ECTION 148 OF THE ACT WITH THE PRIOR APPROVAL OF PRIN. CIT. FURTHE R THE ASSESSING OFFICER ISSUED N OTICE UND ER SECT ION 142(1) OF THE ACT AND SHOW CAUSE NOTICE. IN COMPLIANCE, THE AUTHORIZED REPRESENTATIVE APPOINTED BY THE LEGAL HEIR O F THE ASSESSEE APPEARED AND FILED SUBMISSIONS ON 17.6.2016 . IT WAS SUBMITTED THAT THE ASSESSEE WAS ONLY A PROCURING AGENT FOR M/S. JB & HARA PROPERTIES AND THE LDAR REFERRED TO COPY OF MEMORANDUM OF UNDERST ANDIN G (MOU) DT.2.1.1995 AND THE SALE DEED WAS REGISTER ED ON 28.03.1995 WITH THE FUNDS PROVIDED BY M/S. JB & HARA PROPERTIES . IT WAS EMPHASIZED THAT T HE ASSESSEE IS ONLY A NOMINEE OWN ER AND HAS NOT INVESTED ANY MONEY . T HE AGRICULTURE LAND S WERE CONVERTED TO N ON AGRICULTURE BY ORDER DT.15. 11.1995 AND SUBSEQUENTLY IT WAS REGISTERED IN THE NAME OF M/S. JB & HARA PR OPERTIES BY SALE DEED DT.6.11.2009 . IN THE SALE DEED, THE ASSESSEE WAS REFERRED AS PROCURING AGENT AND THEREFORE THE PROVISIONS OF SECTION 50C OF THE ACT DOES NOT APPLY. FURTHER SUBMISSIONS WERE FILED ON 12.12.2016 EXPLAINING THAT THE ASSESSEE IS ONLY A PROCURING AGENT AND THE LAND WAS DISCLOSED IN THE FINANCIAL STATEMENTS OF M/S. JB & HARA PROPERTIES FOR THE ASSESSMENT YEAR 1998 - 99 T O A.Y. 2001 - 02. T HE ASSESSING OFFICER HAS NOT CONSIDERED THESE FACT S AND THE UNREGISTERED MOU, WHICH IS NOT ENFORCEABLE. T H E AO IS OF THE OPINION THAT THE ASSES SEE IS A RIGHTFUL OWNER AND APPLIED TH E GUIDANCE VALUE OF RS.89,90,000 / - AS 5 ITA NO. 29/BANG/2018 DEEMED CONSIDERATION AND ASSESSED THE TOTAL INCOME OF RS.86,75,443 / - AND PASSED ORDER UNDER SECTION 143(3) R.W.S. 147 OF THE ACT DT.30.12.201 6. AGGRIEVED BY THE ORDER, THE ASSESSEE HAS FILED AN APPEAL WITH THE CIT (APPEALS). THE CIT (APPEALS ) CONSIDERED THE GROUNDS OF APPEAL, SUBMISSIONS, AND FINDINGS OF T HE ASSESSING OFFICER AND CONCURRED WITH THE ACTION OF THE ASSESSING OFF ICER AND DISMISSED THE APPEAL. AGGRIEVED BY THE ORDER OF CIT (APPEALS), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 4. AT THE TIME OF HEARING, THE LEARNED AUTHORIZED REPRESENTATIVE MADE SUBMISSIONS ON THE MERITS OF THE CASE, AND MENTIONED THAT THE GROUND OF APPEAL NO.2 IS NOT PRESSED AND IS DISMISSED AS WITHDRAWN. THE CONTENTION S OF THE LD.AR THAT THE ASSESSEE IS NOT THE OWNER OF THE PROPERTY AND ONLY A PROCURING AGENT FOR THE PURPOSE OF ACQUIRING THE LAND AND FURTHER AFTER CONVERSION OF AGRICULTURAL LAND, THE PROPER TY WAS REGISTERED IN THE NAME OF M/S. JB & HARA PROPERTIES. THE ASSESSING OFFICER AND CIT (APPEALS) HAVE NOT CONSIDERED THE ORI GINAL MOU DT.2.1.1995 FILED IN THE ASSESSMENT PROCEEDINGS . H E EMPHASIZED ON THE MOU , WHICH IS VERY CLEAR THAT THE A SSESSEE I S ON LY A PROCURING AGENT. THE APPLICABILITY OF PROVISIONS OF SECTION 50C OF THE ACT DOES NOT ARISE AS THE A SSESSEE IS NOT RIGHTFUL OWNER AND THE PROPERTY IS NOT IN TH E POSSESSION OF THE ASSESSEE AND WAS DISCLOSED IN THE BOOKS OF ACCOUNTS OF M/S. JB & HARA PROP ERTIES AND SUPPORTED THE ARGUMENTS WITH THE 6 ITA NO. 29/BANG/2018 PAPER BOOK AND PRAYED FOR ALLOWI NG THE APPEAL. CONTRA, THE LD . DR RELIED ON THE ORDERS OF THE CIT (APPEALS) . 5. WE HEARD THE RIVAL SUBMISSIONS OF THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE SOLE DISPUT E D ISSUE CONTESTED BY THE LDAR WITH RESPECT TO THE APPLICABILITY OF PROVISIONS OF SECTION 50C OF THE ACT AND THE ASSESSEE IS NOT A OWNER, BUT ONLY A PROCURING AGENT. IN THE YEAR 1995, THE ASSESSEE ENTERED INTO MOU DT 2.1.1995 WI TH M/S. JB & HARA PROPERTI ES REFERRED AT P AGE 21 TO 24 OF THE PAPER BOOK, AND THE ASSESSEE IS ENTITLED TO COMMISSION IN RESPECT OF PURCHASE OF PROPERTY IN FAVOUR O F M/S. JB & HARA PROPERTIES. FURTHER T HE SALE DEED WAS EXECUTED ON 6. 11.2009 REFERRED AT PAGE 49 OF THE PAPER BOOK, T HAT THE ASSESSEE WAS A PROCUREMENT AGENT AND ALSO AT PAGE 51, WERE THE PRINCIPALS ARE IN POSSESSION AND ENJOYMENT OF THE SCHEDULE PROPERTY AND HAS PAID THE TAXES AND OTHER CHARGES AND THE PROPERTY WAS PURCHASED OUT OF THE FIRM FUNDS . THE A .O. HAS OVERLOOK ED THE UNREGISTERED MOU DT.2.1.1995 ENTERED BY THE ASSESSEE FOR PRO CUREMENT OF LAND ON COMMISSION . THE LDAR REFERRED TO THE INCOME TAX RETURNS FILED BY M/S. JB & HARA PROPERTIES PLACED AT PAGE 58 TO 69 OF THE PAPER BOOK A ND IN PARTICULAR AT PAGE 63 SERIAL NO 33 WHERE THE SAID LAND PROPERTY WAS DIS CLOSED . THE CONTENTION OF THE LD. AR , THAT THE ASSESSEE WAS ONLY A PROCUREMENT AGENT AND ENTITLED FOR COMMI SSION AND THE ORIGINAL OWNERS ARE M/S. JB & HARA PROPERTIES , WHO PRO VIDED THE FUNDS AND AFTER CONVERSION TO NON - AGRICULTURE LAND S, THE ASSESSEE HAS EXECUTED A REGISTERED SALE DEED IN FAVOUR OF M/S. JB & HARA PROPERTIES. T HE ASSESSING OFFICERS OBSERVATIONS THAT THE ASSESSEE IS A RIGHTFUL OWNER AND APPLYING THE PROVISIONS OF SECTION 50C OF THE ACT CANNOT BE A CCEPTED . WE FOUND THE LD. AR, HAS DEMONSTRATED THE MOU , WHICH PLAYS A VITAL ROLE IN DECIDING THE ROLE OF THE ASSESSEE AS PROCUREMENT AGENT OR OWNER . ACCORDINGLY, IN THE INTEREST OF JUSTICE , WE REMIT THE DISPUTED ISSUE FOR LIMITED PURPOSE TO THE FILE OF ASS ESSING OFFICER FOR EXAMIN ATION AND VERIFICATION OF 7 ITA NO. 29/BANG/2018 THE CLAIMS. THE ASSESSEE SHOULD BE PROVIDED ADEQUATE OPPORTUNITY OF HEARING AND SHALL CO - OPERATE IN SUBMITTING THE INFORMATION AND WE ALLOW THE GROUNDS OF APPEAL OF THE ASSESSEE FOR STATISTICAL PURPOSES. 6. IN THE RESULT, THE ASSES SEE S APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE. SD/ - SD/ - ( G. MANJUNATHA ) (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER J UDICIAL MEMBER DATED: 31 .08. 20 20 . *REDDY GP COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT (A) 4. PR. CIT 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME - TAX APPELLATE TRIBUNAL BANGALORE