ITO, Bhubaneswar V. The Legal Heirs of the Late Sitanshu Sekhar Chakraborty, Bhubaneswar

ITA 295/CTK/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3884 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-04-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 05-04-2017
• Assessment Year: 2001-2002
• Appeal Filed On: 12-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN
• Assessee Lawyers: ABHINASH KEDIA
• Keywords: Capital asset; Cost of acquisition; Fair market value
• Section: 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK SMC BENCH, CUTTACK BEFORE SHRI N.S SAINI, ACCOUNTANT MEMBER ITA NO.295/CTK/2015 ASSESSMENT YEAR : 2001 - 02 INCOME TAX OFFICER, WARD 2(2), BHUBANESWAR. VS. THE LEGAL RE PRESENTATIVE/HEIRS OF THE (LATE) SHRI SITANSHU SEKHAR CHAKRABORTY, PLOT NO.159, BUDHESWARI COLONY, BHUBANESWAR. PAN/GIR NO. AETPC 3007 N (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI ABHINASH KEDIA REVENUE BY : SHRI D.K.PRADHAN , DR DATE OF HEARING : 05 /04 / 2017 DATE OF PRONOUNCEMENT : 07 /04 / 2017 O R D E R THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) - 2, BHUBANESWAR , DATED 23.3.2015 , FOR THE ASSESSMENT YEAR 2001 - 02 2. THE SOLE ISSUE INVOLVED IN THIS APPEAL IS THAT THE LD CIT( A) IS NOT JUSTIFIED IN LAW AS WELL AS ON FACTS IN DIRECTING THE ASSESSING OFFICER TO DELETE THE COMPUTATION OF TAXABLE LONG TERM CAPITAL GAIN MADE IN THE HANDS OF THE ASSESSEE AND DIRECTING THE ASSESSING OFFICER TO TAX THE TAXABLE LONG TERM CAPITAL GAIN IN RESPECTIVE ASSESSMENT YEARS IN WHICH THE PROPERTIES 2 ITA NO.295/CTK/2015 ASSESSMENT YEAR :2001 - 02 RECEIVED WERE SOLD BY THE LEGAL REPRESENTATIVE/HEIRS OF THE DECEASED APPELLANT IN RESPECTIVE HANDS OF SUCH LEGAL REPRESENTATIVE/HEIRS. 3. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF LOWE R AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. THE UNDISPUTED FACTS OF THE CASE ARE THAT T HE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE ENTERED INTO A DEVELOPMENT AGREEMENT ON 18.12.1996 WITH MS ATRICK CONSTRUCTION (P) LTD, HAVING ITS REGISTERED OFFICE AT 328, CUTTACK ROAD, BBSR FOR TRANSFER OF 450 DEC, OF LAND ON 277 AND 278/ KHATA NO.1406 FOR DEVELOPING FLATS AND GARAGE OVER THE SAID PLOT BY THE NAME RASHMI VIHAR. AS PER THE AGREEMENT , THE ASSESSEE HAS RECEIVED IN FINANCIAL YEAR 2000 - 2001, 22% OF THE TOTAL BUILT UP AREA (I.E. 6607 SFT.) CONSISTING OF 6 FLATS (FLAT NOS.101,103,104 ON THE GROUND FLOOR, 302 AND 303 ON SECOND FLOOR, 404 ON THIRD FLOOR) BESIDES 5 GARAGES SPACES (04.05,13,14,20) THE TOTAL CONSIDERATION OF WHICH WOULD BE AROUND RS.33,0 0,000/ - AS DETAILED BY THE BUILDER IN THEIR LETTER DATED 18.1.2003. AS PER AGREEMENT D ATED 18 TH DAY OF DECEMBER, 1996, WITH THE BUILDER M/S ATRIK CONSTRUCTION (P) LTD., HAVING ITS REGD. OFFICE AT 328, CUTTACK ROAD , BHUBANESWAR, THERE WAS TRANSFER OF A.0.4 50 DEC. OF LAND ON PLOT NOS.277 & 278/KHATA NO.1406 FOR DEVELOPING FLATS AND GARAGES OVER THE SAID PLOT BY THE NAME OF RASHMI V IHAR APARTMENT. AS PER THE SAID DEVELOPMENT AGREEMENT, 22% OF THE TOTAL BUILT UP AREA WAS RECEIVED BY THE ASSESSEE AND 78% I .E. A,0.351 DEC OF THE BUILT UP AREA WAS TRANSFERRED TO THE ABOVE - NAMED BUILDER M / S ATRICK CONSTRUCTION (P) LTD, DURING THE FINANCIAL YEAR 2000 - 01 3 ITA NO.295/CTK/2015 ASSESSMENT YEAR :2001 - 02 RELEVANT TO THE ASSESSMENT YEAR 2001 - 02 FOR CONSIDERATION OF RS,36,61,000/ - AS PER RETURN OF INCOME FILED. 4. THE ASSESSING OFFICER OBSERVED THAT ON A REFERENCE TO THE DISTRICT REGISTRAR KHURDA, BHUBANESWAR VIDE LETTER N O .1112 DT.22/3/2006 SENT BY THE I .T.O,,W - 2 (2),BHUBANESWAR, IT WAS INFORMED T HAT IN SATYA NAGAR AREA THE VALUATION OF LAND IN THE FINANCIAL YEAR .1981 - 82 WAS TAKEN AS UNDER: - AREA VALUE AO,114 DEC. RS,9000 OR PER 1 ACRE IS RS. 78,947/ - A0.129 DEC. RS.6000 OR PER 1 ACRE IS RS. 46,512/ - THUS, THE AVERAGE PRICE PER ACRE IS RS.62,730/ - . AS THERE WA S NO MUCH DIFFERENCE IN THE PRICE OR VALUE OF LAND AT CUTTACK ROAD AREA AND SATYA NAGAR AREA, BY ADOPTING THE RATE OF RS.62,730/ - PER ACRE, THE VALUE OF A0.351 DEC. WOUL D BE RS,22,018/ - AND ACCORDINGLY , THE INDEXED COST OF AC QUISITI ON WOULD BE RS.89,393/ - [(RS.22,0 18/ - X 406)DIVIDED BY 100]. THEREFORE, THE ASSESSING OFFICER BY TAKING THE SALE CONSIDERATION SHOWN AT RS.36,61,000/ - AND TAKING RS.60,000/ - TOWARDS TRANSFER EXPENSES CLAIMED BY THE ASSESSEE ARRIVED AT THE INCOME AMOUNT OF RS.36,01,600/ - AND ALLOWED DEDUCTION THEREFROM THE INDEXED COST OF ACQUISITION OF RS.89,393/ - AND THE BALANCE AMOUNT OF RS.35,11,607/ - WAS FURTHER REDUCED BY THE INDEXED COST OF IMPROVEMENT DURING 1987 - 88 AS CLAIMED RS.1,35,333/ - AND ARRIVED AT A FIGURE OF RS.33,76,274/ - FROM WHICH HE ALLOWED DEDUCTION U/S.54EC OF 4 ITA NO.295/CTK/2015 ASSESSMENT YEAR :2001 - 02 RS.3,00,000/ - AND BROUGHT TO TAX THE BALANCE AMOUNT OF LONG TERM CAPITAL GAIN OF RS.30,76,274/ - . 5. THE ASSESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) OBSERVED THAT BEFORE HIM, THE ISSUE WAS THAT SINCE THE ASSESSEE SHRI SITANSU SEKHAR CHAKRABORTY DIED ON 21.2.2006, WHETHER HIS SON SHRI BIBHU PRASAD CHKRABORTY WOULD BE LIABLE TO LONG TERM CAPITAL GAINS TAX ON THE TRANSACTION IN ASSESSMENT YEAR 2001 - 02 AND WHETHER THE TAX ON LONG TERM CAPITAL GAIN WOULD BE ATTRACTED IN ASSESSMENT YEAR 1997 - 98 AS CL AIMED BY THE ASSESSEE SINCE THE PROPERTY BEING LAND IN WHICH THE LATE ASSESSEES SON AND DAUGHTER HAD NO SHARE - HAD BEEN HANDED OVER TO THE DEVELOPER M / S ATRICK CONSTRUCTION (P) LTD, ON 18. 1 2.1996 UPON WHICH LATE SHRI SITANSHU SEKHAR CHAKRABORTY RECEIVED R S.3,00,000/ - . THE CIT(A) OBSERVED THAT AN AMOUNT OF RS.3 LAKHS ALLEGEDLY RECEIVED BY THE ASSESSEE WHEN THE PROPERTY IN WHICH THE LATE ASSESSEE S S ON AND DAUGHTER HAD NO SHARE WAS HANDED OVER TO THE DEVELOPER M / S ATRICK CONSTRUCTION (P) LTD, ON 18. 1 2.1996. IT WAS CLEAR THAT THE LAND HAD BEEN HANDED OVER FOR DEVELOPMENT AND THE SAID DEVELOPMENT WAS COMPLETED ONLY IN THE FINANCIAL YEAR 2000 - 2001 SINCE THE IMPUGNED RECEIPT OF RS.3 LAKHS WAS ONLY AN ADVANCE AND NOT THE FULL VALUE OF CONSIDERATION. THE ASSESSEE HAS ARGUED THAT AT THE MOST THE INVESTMENT IF ANY MADE BY THE DEVELOPERS REMAINS A LIABILITY OF THE LAND OWNER AGAINST TOTAL COST OF THE ASSET NEWLY CONSTRUCTED. THIS ARGUMENT WAS INCONSISTENT WITH AND CONTRADICTS THE CLAIM OF FULL TRANSFER ON 18 .12.1996. THE ARGUMENT OF THE ASSESSEE WAS REJECTED AND LONG TERM CAPITAL GAIN WAS RIGHTLY HELD TO BE 5 ITA NO.295/CTK/2015 ASSESSMENT YEAR :2001 - 02 COMPUTED IN THE FINANCIAL YEAR 2000 - 2001 WHEN THE INTER SE EXCHANGE (TRANSFER) OF LAND FOR FLATS WAS COMPLETED AND CONCLUDED. THIS W OULD MEAN THAT THE SALE CONSIDERATION OF RS.36,61,000/ - WOULD INCLUDE THE ALLEGED ADVANCE RECEIVED EARLIER OF RS.3,00,000/ - . HOWEVER, SINCE THE SALE CONSIDERATION ITSELF IS NOT SUBSTANTIATED BY THE ASSESSEE AND HAS BEEN REJECTED, THE FIGURE OF RS.3 LAKHS WILL BE INCLUD ED, IF NECESSARY IN WHATEVER VALUE IS DEEMED/DECIDED/COMPUTED AS THE SALE CONSIDERATION. 6. THE CIT(A) FURTHER OBSERVED THAT WHETHER THE DEVELOPMENT OF ONES OWN PROPERTY THROUGH A DEVELOPER IN EXCHANGE FOR FLATS WOULD CONSTITUTE A TRANSFER U/S.2(47) OF TH E ACT. HE OBSERVED AS UNDER: A) THE DATE OF SIGNING OF THE DEVELOPMENT AGREEM ENT IS THE MOST ACCEPTABLE DATE ON WHIC H THE TRANSFER HAS TAKEN PLACE FROM THE SELLER TO THE DEVELOPER AS PER THE PROVISIONS OF SECTION 2(47)(V) OF THE INCOME TAX ACT, AND SECTI ON 53A OF THE TRANSFER OF PROPERTY B) THE ABOVE TRANSFER IS ENFORCEABLE IN SITUATIONS WHERE THE SELLER HAS TRANSFERRED POSSESSION OF THE LAND - TO THE DEVELOPED AND/OR RECEIVED MONEYS AS CONSIDERATION TOWARDS THE SAME; C) IF THE SELLER CONTINUED TO BE IN SUBSTANTIAL CONTROL OF THE LAND EVEN AFTER THE AGREEMENT WAS SIGNED, TRANSFER U/S 2(47) COULD NOT BE SAID TO HAVE BEEN EFFECTED. D) IF THE AGREEMENT WAS SIGNED AND NO CONSIDERATION WAS RECEIVED, EXCEPT THE ARRANGEMENT THAT SOME OF THE FLATS WOULD BE HAN DED OVER TO THE SELLER FOR HIS OWNERSHIP AND USE, THEN NO TRANSFER U/S.2(47) COULD NOT BE SAID TO HAVE BEEN EFFECT. 7. THE CIT(A) THEREAFTER OBSERVED THAT IN THE INSTANT CASE (LATE) ASSESSEE WAS STATED TO HAVE SIGNED THE AGREEMENT WITH THE DEVELOPER M / S ATRICK CONSTRUCTION (P) LTD, ON 18.12.1996 AND THE LAND WAS STATED TO BE HANDED OVER ON THE SAID DATE. RS. 3,00,000 WAS ALLEGEDLY STATE D RECEIVED 6 ITA NO.295/CTK/2015 ASSESSMENT YEAR :2001 - 02 BY THE LATE ASSESSEE AT THAT TIME, WHICH AMOUNT HAS ALREADY BEEN HELD TO BE CONSIDERED AS AN ADVANCE. SINCE T HE POSSESSION OF THE LAND HAS APPARENTLY BEEN HANDED OVER TO THE DEVELOPER, PART OF THE MONEYS (RS. 3,00,000) HAD BEEN ALLE GEDLY RECEIVED AND THE ASSESSEE AS THE SELLER THEREAFTER HAD NO SUBSTANTIAL CONTROL OF THE LAND, TRANSFER U/S 2(47)( V ) OF THE INCOME - TAX ACT READ WITH SECTION 53A OF THE TRANSFER OF PROPERTY ACT CAN BE CONSIDERED TO HAVE BEEN EFFECTED IN THE F.Y. 1996 - 97. 8. THE CIT(A) FURTHER OBSERVED THAT THE TRANSFER OF LAND IN QUESTION AND THE TAXABILITY OF LONG TERM CAPITAL GAIN THEREFROM CAN BE C ONSIDERED TO BE APPLICABLE IN THE FINANCIAL YEAR 1996 - 97. THIS POSSIBILITY IS RULED OUT SINCE THE DATE OF LIMITATION FOR REOPENING THE ASS ESSMENT PROCEEDINGS FOR THE ASSESSMENT YEAR 1997 - 98 HAS LONG LAPSED. HE OBSERVED THAT I N ANY EVENT, SINCE THE INDEX ED COST OF ACQUISITION OF THE LAND AND OF THE IMPROVEMENTS T HEREON COMPUTED BY THE ASSESSEE AT RS. 9,47,333 IS HIGHER THAN THE ADVANCE R ECEIVED OF RS. 3,00,000, NO LONG TERM CAPITAL GAIN IS SEEN TO HAVE BEEN ATTRACT ED IN THE HANDS OF THE ASSESSEE IN THE FI NANCIAL YEAR 1996 - 97. HE FURTHER OBSERVED THAT E VEN IF THE VALUES OF THE COSTS OF ACQUISITION AND EXPENSES TOWARDS IMPRO VEMENTS CLAIMED BY THE ASSESSEE ARE NOT ACCEPTED, THE VALUE OF THE LAND HANDED OVER (WHICH EQUALS BY IMPLICATION, THE PRESENT FINANCIAL V ALUE OF THE FLATS AND GARAGE SPACES TO BE RECEIVED IN THE FUTURE IN FINANCIAL YEAR 2000 - 01) WILL BE IN EXCESS OF THE KNOWN CONSIDERATION RECEIVED OF THE ADVANCE OF RS. 3,00,000 (AS NO OTH ER CONSIDERATION HAS BEEN SHOWN TO BE RECEIVED BY THE ASSESSEE) . HE FURTHER OBSERVED THAT 7 ITA NO.295/CTK/2015 ASSESSMENT YEAR :2001 - 02 ALSO, IF LONG TERM CAPITAL GAIN ON THE LAND IS TO BE COMPUTED FOR TH E ASSESSMENT YEAR 1997 - 98, SINCE THE ASSESSEE IS BY VIRTUE OF THE AGREEMENT GETTING IN RETURN THE PRESENT FINANCIAL VALUE OF THE FLATS AND GARAGE SPACES TO B E RECEIV ED IN THE FUTURE IN FINANCIAL YEAR 2000 - 01, THE LATER VALUE WILL REPRESENT RE - INVESTMENT IN RESIDENTIAL HOUSE PROPERTY WHICH IS TAX - EXEMPT U/S 54 OF THE ACT. IN SHORT, NO LTCG IS LIKELY TAXABLE FOR THE APPLICABLE ASSESSMENT YEAR 1997 - 98. THE CIT(A) THEREA FTER OBSERVED THAT THE LONG TERM CAPITAL GAIN WILL BE ATTRACTED IN THE HANDS OF THE ASSESSEES LEGAL REPRESENTATIVE (TENANTS - IN - COMMON) BEING HIS SONS AND DAUGHTERS AND OTHER LEGAL HEIRS UNDER THE - DAYABHAGA SYSTEM IN THE YEAR WHENEVER THE SAID LEGAL REPRESENTATIVES SELL OR O THERWISE TRANSFER/ALIENATE THE 6 FLATS AND 5 GARAGE SPACES IN THEIR POSSESSION. IF THE LEGAL REPRESENTATIVES HAVE DIVIDED THE PROPERTY AMONGST THEMSELVES IN LINE WITH THE DAYABHAGA SYSTEM, THEN THE LTCG WILL NEED TO BE COMPUTED ON THE APPROPRIATE SHARES AND THE VALUES OF THE RESPECTIVE FLAT(S) THAT WAS (WERE) SOLD. AT THAT TIME, THE SALE CONSIDERATION AS KNOWN WILL BE EMPLOYED IN THE COMPUTATIONS, WHILE THE INDEXED WILL BE DETERMINED BASED ON THE FAIR MARKET VALUE OF THE LAND HANDE D OVER (WHICH EQUALS BY IMPLICATION, THE THEN PRESENT FINANCIAL VALUE OF THE FLATS AND GARAGE SPACES RECEIVED IN THE THEN FUTURE FINANCIAL YEAR 2000 - 2001 TO THE DEVELOPER AS ON 18.12.1996. 9. THE CIT(A) HAS ALSO OBSERVED THAT I T IS TO BE NOTED THAT UNDER THE DAYABHAGA SCHOOL, THE FAT HER IS REGARDED AS THE ABSOLUTE OWNER OF HIS PROPERTY WHETHER IT IS SELF - ACQUIRED OR INHERITED FROM HIS ANCESTORS . UNDER 8 ITA NO.295/CTK/2015 ASSESSMENT YEAR :2001 - 02 THE SAID SCHOOL NEITHER SON NOR DAUGHTER HAS ANY RIGHT IN THE ANCESTRAL PROPERTY UNTIL AFTER THE DEATH OF HIS FATHER. THE SON OR DAUGHTER IS NOT ACCORDED ANY RIGHTS BY BIRTH OR BY SURVIVORSHIP. ON THE DEATH OF THE FATHER THE SONS AND DAUGHTERS INHERIT THE PROPERTY AS TENANTS - IN - COMMON. AFT ER THE LIFE TIME OF FATHER ANY CHILDREN CAN FILE A SUIT FO R PARTITION TO CULL OUT HIS/HER SHARE IN THE PROPERTY REGARDLE SS WHETHER IT IS ANCESTRAL OR SELF ACQUIRED. THEREFORE, UNDER THE DAYABHAGA LAW, SUCCESSION RATHER THAN SURVIVORSHIP IS THE RULE. IF ONE OF THE MALE HEIRS DIES, HIS HEIRS, INCLUDING FEMALES SU CH AS HIS WIFE AND DAUGHTER WOULD BECOME MEMBERS OF THE JOINT PROPERTY, NOT IN THEIR OWN RIGHT, BUT REPRESENTING HIM. SINCE FEMALES COULD BE COPARCENERS, THEY COULD ALSO ACT AS KARTAS , AND MANAGE THE PROPERTY ON BEHALF OF THE OTHER MEMBERS. THE FOUNDER OF THE DAYABHAGA SYSTEM, JIMUTVAHANA HOLDS THAT THE SEVERAL COPARCENERS ARE LIKE TENAN T COMMON, EACH HAVING A RIGHT TO THE UNDIVIDED PORTION, SO THAT ON THE DEATH OF ONE, THERE IS NO RIGHT OF SURVIVORS HIP TO INTERCEPT HIS WIDOW'S RIGHT OF SUCCESSION. THE DAY ABHAG SYSTEM LAYS DOWN THAT AFTER THE DEATH OF THE FATHER THE SONS HAVE NO INDEPENDENT POWE R TO PARTITION FATHER'S ESTATE THROUGHOUT THE LIFETIME OF THE MOTHER, YET THE SON IS GIVEN A POSITION OF EMINENCE. THE WIDOW MOTHER'S SEEMINGLY ABSOLUTE RIGHT IN THE HUSBA NDS PROPERTY IS CIRCUMSCRIBED BY THE RIGHTS OF THE SON. THOUGH THE SONS ACQUIRE OWNERSHI P IN FATHER'S PROPERTY IMMEDIATELY UPON THE LATTER'S DEATH, THE ACTUAL POSITION, IN RES PECT OF SUCH OWNERSHIP IS POSTPONED UNTIL THE DEATH OF THE MOTHER. HOWEVER, THE SONS MAY DIVIDE THE PROPERTY WITH THE MOTHERS CONSENT. 9 ITA NO.295/CTK/2015 ASSESSMENT YEAR :2001 - 02 10. IN THE INSTANT CASE, IT WOUL D MEAN THAT THE ACTION OF THE ASSESSING OFFICER IN PASSING THE IMPUG NED ASSESSMENT ORDER IN THE NAME OF LATE SHRI. SITANSHU SE KHAR CHAKRABORTY IS CORRECT IN LAW SINCE THE MATTER IN DISPUTE RELATES TO THE TRANSFER OF LAND THAT WAS SELF - ACQUIRED BY THE DECEASED INDIVIDUAL AND, UPON HIS DEATH ON 21.02.2006, HELD ENTIRELY BY HIS SONS DAUGHTERS AS TENANTS - IN - COMMON. THIS WOULD MEAN THAT ALL OF THE SONS AND DAUGHTERS OF DECEASED ASSESSEE , INCLUDING SHRI. BIBHU PRASAD CHAKRABORTY WOULD BE HIS LE GAL REPRESENTATIVES. THIS WOULD MEAN THAT SHRI. B IBHU PRASAD CHAKRABORTY WAS ONLY THE LEGAL REPRESENTA TIVES OF THE DECEASED ASSESSEE. 11. THE CIT(A) FURTHER HELD THAT H OWEVER, SINCE THE IMPUGNED ASSESSMENT OF LTCG FOR THE ASSESSMENT YEAR 2001 - 02 HAS BEEN SHOWN TO BE INCORRECT AND NOT IN ACCORDANCE WITH LAW , WHAT WILL BE NEEDED FOR THE ASSESSING OFFICER IS TO DETERMINE THE LTCG IN THE HANDS OF THE APPROPRIATE LEGAL HEIRS IN THE APPROPRIATELY APPLICABLE ASSESSMENT YEARS (IN WHICH THE FLATS/GARAGE SPACES WERE SOLD) IF THE PARTITION OF THE ASSETS HELD AS TENANTS - IN - COMMON HAS BEEN CARRIED OUT UNDER THE DAYABHAGA SCHOOL PRINCIPLES. ELSE (IF NO DIVISION/PARTITION OF ASSETS HAVE TAKEN PLACE), THE ASSESSING OFFICER WILL NEED TO DETERMINE ONE VALUE OF THE LTCG IN THE HANDS OF THE ASSESSEE IN THE FINANCIAL YEAR WHEN THE FLATS/GARAGE SPACES WERE SOLD. 12. LD D.R. RELIED ON THE ORDER OF THE ASSESSING OFFICER. 13. ON THE OTHER HAND, LD AUTHORISED REPRESENTATIVE SUPPORTED THE ORDER OF THE CIT(A). 10 ITA NO.295/CTK/2015 ASSESSMENT YEAR :2001 - 02 14. I FIND THAT IN THE CASE, THE UNDISPUTED FACTS OF THE CASE ARE THAT THE ASSESSEE IS LEGAL SUCCESSOR OF LATE SHRI SITANSHU SEKHAR CHAKRABORTY AND IS ASSESSED AS LEGAL REPRESENTATIVE OF SAID LATE SHRI SITANSHU SEKHAR CHAKRABORTY. LATE SHRI SITANSHU SEKHAR CHAKRABORTY UNDER A WRITTEN AGREEMENT DATED 18.12.1996 HANDED OVER THE POSSESSION OF LAND IN QUESTIO N TO THE BUILDER M/S. ATRICK CONSTRUCTON (P) LTD., IN CONSIDERATION OF RECEIVING RS.3,00,000/ - AND 22% OF THE CONSTRUCTED AREA WHICH WAS TO BE CONSTRUCTED ON THE SAID LAND. IN THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION, THE ASS ESSEE LATE SHRI SITANSHU SEKHAR CHAKRABORTY RECEIVED POSSESSION OF 22% OF THE CONSTRUCTED AREA IN PURSUANCE TO THE AGREEMENT DATED 18.12.1996. ON THE ABOVE UNDISPUTED FACTS, THE CASE OF THE REVENUE IS THAT LONG TERM CAPITAL GAIN IS EXIGIBLE TO TAX IN THE YEAR UNDER CONSIDERATION WHEREAS AS PER THE CIT(A) SAME IS NOT TAXABLE IN THE YEAR UNDER CONSIDERATION. 15. I FIND THAT AS PER PROVISIONS OF SECTION 45 OF THE INCOME TAX ACT, CAPITAL GAIN IS CHARGEABLE TO TAX IN THE YEAR IN WHICH TRANSACTION OF RELATED CA PITAL ASSET TAKES PLACE. IN THE INSTANT CASE, THE TRANSFER WHICH TOOK PLACE WAS 78% OF UNDIVIDED RIGHT OF THE LAND OF A.0.450 DEC ON PLOT NOS.277 & 278/KHATA NO.1406. THE ISSUE BEFORE ME IS WHETHER THE SAID TRANSACTION TOOK PLACE IN ASSESSMENT YEAR 2001 - 02 OR NOT AND CONSEQUENTLY THE CAPITAL GAIN IS CHARGEABLE TO TA X IN ASSESSMENT YEAR 2001 - 02 OR NOT. 11 ITA NO.295/CTK/2015 ASSESSMENT YEAR :2001 - 02 16. A PERUSAL OF THE PROVISIONS OF SECTION 2(47)(V) OF THE ACT SHOWS THAT TRANSFER OF A CAPITAL ASSET INCLUDES ANY TRANSACTION INVOLVING THE ALLOWING OF TH E POSSESSION OF ANY IMMOVABLE PROPERTY TO BE TAKEN OR RETAINED IN PART PERFORMANCE OF A CONTRACT OF THE NATURE REFERRED TO IN SECTION 53A OF THE TRANSFER OF PROPERTY ACT, 1882. IN THE INSTANT CASE, IT IS NOT IN DISPUTE THAT UNDER A WRITTEN AGREEMENT DATED 18.12.1996, THE ASSESSEE HANDED OVER THE POSSESSION OF LAND TO THE BUILDER M/S. ATRICK CONSTRUCTION (P) LTD., ON A CONSIDERATION OF RS.3 LAKHS AND 22% OF THE CONSTRUCTED AREA TO BE BUILT BY THE BUILDER. THUS, THE TRANSFER OF 78% OF THE UNDIVIDED RIGHT OF THE LAND TOOK PLACE IN THE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR 1997 - 98. IN VIEW OF MY ABOVE FINDINGS, THE RELATED CAPITAL GAIN IS NOT EXIGIBLE TO TAX IN THE YEAR UNDER CONSIDERATION I.E. 2001 - 02. I, THEREFORE, DO NOT FIND ANY MERIT IN THIS APPEAL OF THE REVENUE AND HENCE, THE SAME IS DISMISSED. 17. IN THE RESULT, THE APPEAL F ILED BY THE REVENUE IS DISMISSED. ORDER PRO NOUNCED IN THE OPEN COURT ON 7 /04 /2017 IN THE PRESENCE OF PARTIES. SD/ - ( N.S SAINI ) A CCOUNTANT MEMBER CUTTACK; DATED 7 /04 /2017 B.K.PARIDA, SPS 12 ITA NO.295/CTK/2015 ASSESSMENT YEAR :2001 - 02 COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY ITAT, CUTTACK 1. THE APPELLANT : INCOME TAX OFFICER, WARD 2(2), BHUBANESWAR 2. THE RESPONDENT. THE LEGAL REPRESENTATIVE/HEIRS OF THE (LATE) SHRI SITANSHU SEKHAR CHAKRABORTY, PLOT NO.159, BUDHESWARI COLONY, BHUBANESWAR 3. THE CIT(A) - 2, BHUBANESWAR 4. CIT - 1, BHUBANESWAR 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//