Smt. Mithra Ram, CHENNAI V. ITO, CHENNAI

ITA 3160/CHNY/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7785 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2017
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 15-02-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 16-11-2016
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTHJCIT
• Keywords: Reopening of assessment; Capital asset; Tangible material; Reason to believe
• Section: 54F; 147; 148; 54

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI , ' # . $ & ' BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY, JUDICIAL MEMBER ./ I.T.A. NO. 3160/MDS/2016 / ASSESSMENT YEAR : 2007-08 SMT. MITHRA RAM, #7, KOTHARI ROAD, NUNGAMBAKKAM, CHENNAI - 600 034. [PAN: BDEPR 2205N] VS. INCOME TAX OFFICER, NON CORPORATE WARD -3(4), CHENNAI - 600 034. ( / APPELLANT) ( / RESPONDENT) ) * / APPELLANT BY : SHRI PHILP GEORGE, ADVOCATE SHRI M.P. SENTHIL KUMAR, ADVOCATE -.) * / RESPONDENT BY : SHRI A.V. SREEKANTH, JCIT & * /DATE OF HEARING : 15.02.2017 * /DATE OF PRONOUNCEMENT : 17.02.2017 /O R D E R PER M. BALAGANESH, ACCOUNTANT MEMBER: AT THE OUTSET WE FIND THAT THE ASSESSE HAS RAISED CERTAIN ADDITIONAL GROUNDS OF APPEAL CHALLENGING THE VALIDITY OF ASSUM PTION OF JURISDICTION U/S. 147 OF THE ACT FOR RE-OPENING THE ASSESSMENT FOR THE AS SESSMENT YEAR 2007-08. WE :-2-: I.T.A. NO. 3160/MDS/2016 FIND THAT THE ADJUDICATION OF THIS ADDITIONAL GROUN DS OF APPEAL WOULD HAVE TO BE ADDRESSED AT THE FIRST INSTANCE. ' 2. ADDITIONAL GROUNDS: 2.1. JURISDICTION U/S. 147 : 2.1.1. THE ASSESSING OFFICER HAS NO JURISDICTION X X] S. 147 TO REOPEN THE ASSESSMENT. 2.1.2. THE REASON FOR REOPENING THE ASSESSMENT PRO VIDED BY THE ASSESSING OFFICER THAT THE APPELLANT HAD SOLD PROPE RTY AT SRI KAPALEESWARAR NAGAR TO M/S. K2 ENGINEERS PVT. LTD. FOR RS.1,60,00 ,000/- DURING THE ASSESSMENT YEAR UNDER CONSIDERATION IS NOT CORRECT. 2.1.3. THE COMMISSIONER OF INCOME TAX (APPEALS) OU GHT TO HAVE APPRECIATED THAT THE ASSESSING OFFICER HAD NO REASO N TO BELIEVE THAT INCOME HAD ESCAPED ASSESSMENT TO EXERCISE JURISDICT ION U/S. 147. 2.1.4. THE COMMISSIONER OF INCOME TAX (APPEALS) OU GHT TO HAVE APPRECIATED THAT THE REOPENING OF ASSESSMENT WAS ON LY ON MERE SUSPICION, WHICH IS AGAINST THE MANDATE OF THE PROVISIONS OF I NCOME TAX ACT, 1961. 2.1.5. THE COMMISSIONER OF INCOME TAX (APPEALS) OU GHT TO HAVE EXERCISED THE POWER U/S. 251 AND ANNULLED THE REASS ESSMENT, WHICH IS PASSED BY THE ASSESSING OFFICER WITHOUT HAVING JURI SDICTION U/S. 147 OF THE INCOME TAX ACT, 1961. 2.1.6. THE COMMISSIONER OF INCOME TAX (APPEALS) OU GHT TO HAVE HELD THAT ASSESSING OFFICER HAS NO JURISDICTION TO REOPE N THE ASSESSMENT U/S. 147 TO ASSESS THE CAPITAL GAINS ARISING OUT OF TRAN SFER OF PROPERTY HELD BY THE APPELLANT.' IN ORDER TO ADMIT THE ADDITIONAL GROUND THE BASIC FACTS THAT ARE REQUIRED TO BE PRESENTED WOULD HAVE TO BE GONE INTO. THE BASIC FA CTS ARE AS FOLLOWS: :-3-: I.T.A. NO. 3160/MDS/2016 THE ASSESSEE DID NOT FILE HER ORIGINAL RETURN OF I NCOME FOR THE ASSESSMENT YEAR 2007-08. BASED ON AN INFORMATION OBTAINED FRO M THE REGISTRATION DEPARTMENT REGARDING THE SALE OF PROPERTY BY THE AS SESSEE, THE LD. AO ISSUED NOTICE U/S. 148 OF THE ACT AFTER RECORDING REASONS FOR RE-OPENING THE ASSESSMENT. IN RESPONSE TO SAID NOTICE, THE ASSESSEE FILED RETU RN OF INCOME DISCLOSING CAPITAL GAIN AMONG OTHER INCOMES AND ALSO CLAIMING EXEMPTIO N U/S. 54F OF THE ACT IN RESPECT OF RE-INVESTMENT IN ENTIRE PROPERTY. RE-AS SESSMENT WAS COMPLETED BY THE LD. AO DENYING THE CLAIM OF EXEMPTION U/S. 54F OF THE ACT THEREON BY ASSESSING THE CAPITAL GAINS IN RESPECT OF THE SALE OF PROPERTY. THE PRIMARY FACTS IN THE INSTANT CASE ARE THAT THE ASSESSEE PURCHASED THE PROPERTY MEASURING ABOUT 2 GROUNDS AND 1412 SQ.FT. AT SRI KAPALESWAR N AGAR, NO. 145, SHROTIUM NEELANKARAI VILLAGE, TAMBARAM TALUK, KANCHEEPURAM D ISTRICT BEARING SURVEY NO. 92/2A VIDE SALE DEED DATED 31.08.1994 REGISTERED AS DOCUMENT NO. 3655/1994. THE ASSESSEE EXECUTED POWER OF ATTORNEY (POA) IN FA VOUR OF M/S. K2 ENGINEERS PVT. LTD., ON 15.12.2006. THE COPY OF THE SAID POA WAS PLACED ON RECORD VIDE PAGE 25 OF THE PAPER BOOK. THE ASSESSEE RECEIVED T HE SUM OF RS. 1,60,00,000/- AS ADVANCE FROM M/S. K2 ENGINEERS PVT. LTD., IN DEC EMBER, 2006. THE ASSESSEE DID NOT ENTER INTO ANY AGREEMENT OF SALE IN WRITING PURSUANT TO EXECUTION OF POA ON 15.12.2006. FROM THE PERUSAL OF VARIOUS CLAUSES OF THE REGISTERED POA, WE ARE ABLE TO UNDERSTAND THAT NO POSSESSION OF THE SU BJECT MENTIONED PROPERTY WAS HANDED OVER BY THE ASSESSEE IN FAVOUR OF THE POA HO LDER. ULTIMATELY, THE ASSESSEE REPRESENTED BY HER POA HOLDER M/S. K2 ENGI NEERS PVT. LTD., SOLD THE PROPERTY TO FOUR DIFFERENT PERSONS AS BELOW:- :-4-: I.T.A. NO. 3160/MDS/2016 DATE DOC. NO. AREA PURCHASED BY CONSIDERATION 31.10.2007 5532/2007 1389 SQ.FT. SASWATI MISRA 2083 500 31.10.2007 5538/2007 1930 SQ.FT. ANSHUMAN MISHRA 28 95000 30.05.2008 2230/2008 1348 SQ.FT. RAMESHRAM MISHRA 2 422356 30.05.2008 2231/2008 1545 SQ.FT. RAJALAKSHMI MISHRA 2776365 2. THE LD. AR BEFORE US ARGUED THAT THE LD. AO COUL D NOT HAVE FORMED A BELIEF THAT INCOME HAS ESCAPED ASSESSMENT IN THE HA NDS OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2007-08 FOR THE SIMPLE REASON ON 15 .12.2006 WHAT WAS EXECUTED WAS ONLY A REGISTERED POA BY THE ASSESSEE, WHICH ADMITTEDLY DID NOT MENTION ANY CONSIDERATION AMOUNT AND ADMITTEDLY NO POSSESSION WAS HANDED OVER TO THE POA HOLDER BY THE ASSESSEE PURSUANT TO THE SAID REGISTERED POA. IN THESE CIRCUMSTANCES, THE PROVISIONS OF SECTION 2(47 )(V) R.W.S. 53A OF THE TRANSFER OF PROPERTY ACT WOULD NOT COME INTO PLAY STATING TH AT THE ASSESSEE HAD MADE TRANSFER BY WAY OF PART PERFORMANCE OF THE CONTRACT , THEREBY INVITING HIM WITH THE LEVY OF CAPITAL GAINS. IT WAS ONLY IN THE ASSE SSMENT YEAR 2008-09 AND IN 2009-10, THE ASSESSEE THROUGH HER POA AGENT HAD EXE CUTED SALE DEEDS AND THE CAPITAL GAINS, IF ANY, WOULD AROSE ONLY IN THOSE TW O YEARS AND DEFINITELY NOT IN ASSESSMENT YEAR 2007-08. HE ALSO REFERRED TO THE R EASONS RECORDED BY THE LD. AO WHEREIN IT HAS BEEN STATED THAT ASSESSEE HAS SOL D THE SUBJECT MENTIONED PROPERTY FOR RS. 1,60,00,000/- ON 15.12.2006 TO M/S . K2 ENGINEERS PRIVATE LTD. HE ARGUED AT THE COST OF REPETITION THAT THE DOCUME NTS WHICH WERE EXECUTED ON 15.12.2006 WAS ONLY POA WHICH ADMITTEDLY DO NOT CON TAIN ANY CONSIDERATION AMOUNT. APART FROM THIS NO OTHER DOCUMENT WAS EXEC UTED IN THE FORM OF :-5-: I.T.A. NO. 3160/MDS/2016 AGREEMENT OF SALE IN WRITING AND BY HANDING OVER PO SSESSION OF THE SUBJECT MENTIONED PROPERTY SO AS TO FALL WITHIN THE AMBIT O F PROVISIONS OF SECTION 53A OF TRANSFER OF PROPERTY ACT. HE ALSO PLACED RELIANCE ON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF SURAJ LAMP AND INDUSTR IES PVT. LTD., VS. STATE OF HARAYANA ENTERED IN SLP (C) NO. 13917/2009 DATED 11 .10.2011, REPORTED IN (2012) 340 ITR 1 (SC), WHEREIN AFTER ANALYSING THE RELEVANT PROVISIONS VIZ. SECTION 5 AND SECTION 53A, 54 AND 55 OF TRANSFER OF PROPERTY ACT, TOGETHER WITH SECTION 17 OF REGISTRATION ACT, 1908 HAD HELD AS FO LLOWS: ' IT IS THUS CLEAR THAT A TRANSFER OF IMMOVEABLE P ROPERTY BY WAY OF SALE CAN ONLY BE BY A DEED OF CONVEYANCE (SALE DEED ). IN THE ABSENCE OF A DEED OF CONVEYANCE (DULY STAMPED AND REGISTERE D AS REQUIRED BY LAW), NO RIGHT, TITLE OR INTEREST IN AN IMMOVEABLE PROPERTY CAN BE TRANSFERRED. 12. ANY CONTRACT OF SALE (AGREEMENT TO SELL) WHICH IS NOT A REGISTERED DEED OF CONVEYANCE (DEED OF SALE) WOULD FALL SHORT OF THE REQUIREMENTS OF SECTIONS 54 AND 55 OF TP ACT AND WI LL NOT CONFER ANY TITLE NOR TRANSFER ANY INTEREST IN AN IMMOVABLE PRO PERTY (EXCEPT TO THE LIMITED RIGHT GRANTED UNDER SECTION 53A OF TP ACT). ACCORDING TO TP ACT, AN AGREEMENT OF SALE, WHETHER WITH POSSESSION OR WITHOUT POSSESSION, IS NOT A CONVEYANCE. SECTION 54 OF TP A CT ENACTS THAT SALE OF IMMOVEABLE PROPERTY CAN BE MADE ONLY BY A REGIST ERED INSTRUMENT AND AN AGREEMENT OF SALE DOES NOT CREATE ANY INTERE ST OR CHARGE ON ITS SUBJECT MATTER. SCOPE OF POWER OF ATTORNEY 13. A POWER OF ATTORNEY IS NOT AN INSTRUMENT OF TR ANSFER IN REGARD TO ANY RIGHT, TITLE OR INTEREST IN AN IMMOVABLE PROPER TY. THE POWER OF ATTORNEY IS CREATION OF AN AGENCY WHEREBY THE GRANT OR AUTHORIZES THE :-6-: I.T.A. NO. 3160/MDS/2016 GRANTEE TO DO THE ACTS SPECIFIED THEREIN, ON BEHALF OF GRANTOR, WHICH WHEN EXECUTED WILL BE BINDING ON THE GRANTOR AS IF DONE BY HIM (SEE SECTION 1A AND SECTION 2 OF THE POWERS OF ATTORNEY ACT, 1882). IT IS REVOCABLE OR TERMINABLE AT ANY TIME UNLESS IT IS MA DE IRREVOCABLE IN A MANNER KNOWN TO LAW. EVEN AN IRREVOCABLE ATTORNEY D OES NOT HAVE THE EFFECT OF TRANSFERRING TITLE TO THE GRANTEE. AN ATTORNEY HOLDER MAY HOWEVER EXECUTE A DEED OF C ONVEYANCE IN EXERCISE OF THE POWER GRANTED UNDER THE POWER OF AT TORNEY AND CONVEY TITLE ON BEHALF OF THE GRANTOR. 15. THEREFORE, A SA/GPA/WILL TRANSACTION DOES NOT CONVEY ANY TITLE NOR CREATE ANY INTEREST IN AN IMMOVABLE PROPE RTY. THE OBSERVATIONS BY THE DELHI HIGH COURT, IN ASHA M. JA IN V. CANARA BANK - 94 (2001) DLT 841, THAT THE 'CONCEPT OF POWER OF AT TORNEY SALES HAVE BEEN RECOGNIZED AS A MODE OF TRANSACTION' WHEN DEAL ING WITH TRANSACTIONS BY WAY OF SA/GPA/WILL ARE UNWARRANTED AND NOT JUSTIFIED, UNINTENDEDLY MISLEADING THE GENERAL PUBL IC INTO THINKING THAT SA/GPA/WILL TRANSACTIONS ARE SOME KIND OF A RECOGNI ZED OR ACCEPTED MODE OF TRANSFER AND THAT IT CAN BE A VALID SUBSTIT UTE FOR A SALE DEED. SUCH DECISIONS TO THE EXTENT THEY RECOGNIZE OR ACCE PT SA/GPA/WILL TRANSACTIONS AS CONCLUDED TRANSFERS, AS CONTRASTED FROM AN AGREEMENT TO TRANSFER, ARE NOT GOOD LAW. 16. WE THEREFORE REITERATE THAT IMMOVABLE PROPERTY CAN BE LEGALLY AND LAWFULLY TRANSFERRED/CONVEYED ONLY BY A REGISTE RED DEED OF CONVEYANCE. TRANSACTIONS OF THE NATURE OF 'GP A SALES' OR 'SA/ GP A/WILL TRANSFERS' DO NOT CONVEY TITLE AND DO NOT AMOUNT TO TRANSFER, NOR CAN THEY BE RECOGNIZED OR VALID MODE OF TRANSFER OF IMM OVEABLE PROPERTY. THE COURTS WILL NOT TREAT SUCH TRANSACTIONS AS COMP LETED OR CONCLUDED :-7-: I.T.A. NO. 3160/MDS/2016 TRANSFERS OR AS CONVEYANCES AS THEY NEITHER CONVEY TITLE NOR CREATE ANY INTEREST IN AN IMMOVABLE PROPERTY. THEY CANNOT BE RECOGNIZED AS DEEDS OF TITLE, EXCEP T TO THE LIMITED EXTENT OF SECTION 53A OF THE TP ACT. SUCH TRANSACTI ONS CANNOT BE RELIED UPON OR MADE THE BASIS FOR MUTATIONS IN MUNICIPAL O R REVENUE RECORDS. WHAT IS STATED ABOVE WILL APPLY NOT ONLY T O DEEDS OF CONVEYANCE IN REGARD TO FREEHOLD PROPERTY BUT ALSO TO TRANSFER OF LEASEHOLD PROPERTY. A LEASE CAN BE VALIDLY TRANSFER RED ONLY UNDER A REGISTERED ASSIGNMENT OF LEASE. IT IS TIME THAT AN END IS PUT TO THE PERNICIOUS PRACTICE OF SA/GPA/WILL TRANSACTIONS KNO WN AS GPA SALE/S . 17. IT HAS BEEN SUBMITTED THAT MAKING DECLARATION THAT GPA SALES AND SA/GP A/WILL TRANSFERS ARE NOT LEGALLY VALID MO DES OF TRANSFER IS LIKELY TO CREATE HARDSHIP TO A LARGE NUMBER OF PERS ONS WHO HAVE ENTERED INTO SUCH TRANSACTIONS AND THEY SHOULD BE G IVEN SUFFICIENT TIME TO REGULARIZE THE TRANSACTIONS BY OBTAINING DEEDS O F CONVEYANCE. IT IS ALSO SUBMITTED THAT THIS DECISION SHOULD BE MADE AP PLICABLE PROSPECTIVELY TO AVOID HARDSHIP. 18. WE HAVE MERELY DRAWN ATTENTION TO AND REITERAT ED THE WELL- SETTLED LEGAL POSITION THAT SA/GPA/WILL TRANSACTION S ARE NOT 'TRANSFERS' OR 'SALES' AND THAT SUCH TRANSACTIONS CANNOT BE TRE ATED AS COMPLETED TRANSFERS OR CONVEYANCES. THEY CAN CONTINUE TO BE T REATED AS EXISTING AGREEMENT OF SALE. NOTHING PREVENTS AFFECTED PARTIES FROM GETTING REG ISTERED DEEDS OF CONVEYANCE TO COMPLETE THEIR TITLE. THE SAID SA/GPA /WILL TRANSACTIONS' MAY ALSO BE USED TO OBTAIN SPECIFIC P ERFORMANCE OR TO DEFEND POSSESSION UNDER SECTION 53A OF TP ACT. IF T HEY ARE ENTERED BEFORE THIS DAY, THEY MAY BE RELIED UPON TO APPLY F OR REGULARIZATION OF ALLOTMENTS/LEASES BY DEVELOPMENT AUTHORITIES. WE MA KE IT CLEAR THAT IF THE DOCUMENTS RELATING TO 'SA/GPA/WILL TRANSACTIONS ' HAS BEEN :-8-: I.T.A. NO. 3160/MDS/2016 ACCEPTED ACTED UPON BY DDA OR OTHER DEVELOPMENTAL A UTHORITIES OR BY THE MUNICIPAL OR REVENUE AUTHORITIES TO EFFECT MUTA TION, THEY NEED NOT BE DISTURBED, MERELY ON ACCOUNT OF THIS DECISION.' 3. THE LD. AR ALSO DREW THE ATTENTION OF THE BENCH THAT THE POSSESSION WAS ACTUALLY HANDED OVER BY THE ASSESSEE TO THE AFO RESAID BUYERS OF THE PROPERTY ON 31.10.2007 FOR FIRST TWO PURCHASERS, ON 30.05.20 08 FOR LAST TWO PURCHASERS (BEING THE DATE OF EXECUTION OF INDEPENDENT SALE DE EDS IN FAVOUR OF FOUR PURCHASERS). THIS FACT IS ALSO MENTIONED IN THE RE SPECTIVE SALE DEED ENCLOSED VIDE PAGE 54, 71, 87 AND 104 OF PAPER BOOK. HE ALS O ARGUED THAT THOUGH, THE ASSESSEE INITIALLY THOUGHT THAT THE TRANSFER HAD TA KEN PLACE IN ASSESSMENT YEAR 2007-08, WHICH IS PURSUANT TO THE EXECUTION OF POA AND AS PER THE ADVICE GIVEN TO HIM BY HIS TAX CONSULTANTS, MERELY BECAUSE THE A SSESSEE HAS ERRONEOUSLY OFFERED SUM RECEIPT/INCOME IN THE RETURNS, THAT ALO NE WOULD NOT ENABLE THE LD. AO TO TAKE ADVANTAGE OF THE IGNORANCE OF THE ASSESS EE WITH REGARD TO THE PROVISIONS OF LAW. HE FURTHER ARGUED THAT THERE IS NO ESTOPPEL AGAINST THE STATUTE. IN SUPPORT OF THIS, HE PLACED RELIANCE ON THE DECISION OF HON'BLE CALCUTTA HIGH COURT IN THE CASE OF MAYNAK PODDAR (HUF) VS. W EALTH TAX OFFICER REPORTED IN (2003) 262 ITR 633 (CAL). HE FURTHER ARGUED THA T IT IS THE EARNEST DUTY OF THE LD. AO TO TEACH THE ASSESSEE OF HIS VARIOUS TAX OBL IGATIONS AND THE REVENUE SHOULD NOT GET UNJUSTLY ENRICHED BY THE IGNORANCE O F PROVISIONS OF THE INCOME TAX ACT ON THE PART OF THE ASSESSEE. :-9-: I.T.A. NO. 3160/MDS/2016 BASED ON THESE ARGUMENTS, THE LD. AR ARGUED THA T THE LD. AO COULD NOT HAVE HAD REASON TO BELIEVE BY HAVING TANGIBLE MATERIAL R EPRESENTING SOME BENEFIT IN FACTS AND FIGURES IN ASST YEAR 2007-08 STATING THAT INCOME HAD ESCAPED ASSESSMENT AND ACCORDINGLY, THE RE-OPENING OF ASS ESSMENT IS BAD IN LAW. 4. IN RESPONSE TO THIS, THE LD. DR ARGUED THAT ADMI TTEDLY THE RE-OPENING IN THIS CASE HAD HAPPENED PURSUANT TO THE INFORMATI ON RECEIVED BY THE LD. AO FROM THE REGISTRATION DEPARTMENT. IN THE INSTANT C ASE, BOTH POA AS WELL AS THE SALE DEEDS WERE DULY REGISTERED WITH THE REGISTRATI ON DEPARTMENT THOUGH ON DIFFERENT DATES FILED IN TWO DIFFERENT ASSESSMENT Y EARS AND ACCORDINGLY HE ARGUED THAT INCOME IN THE HANDS OF THE ASSESSEE HAD ESCAPE D ASSESSMENT. HE ARGUED THAT IT IS ALREADY WELL SETTLED WITH SUFFICIENCY OF REASON NEED NOT BE TAKEN INTO ACCOUNT AT THE TIME OF RECORDING THE REASONS FOR AS SESSMENT. HE FURTHER ARGUED THAT THE DECISION RENDERED BY THE HON'BLE SUPREME C OURT IN THE CASE OF SURAJ LAMP (SUPRA) IS ONLY IN THE CONTEXT OF GENERAL LAW AND COULD NOT BE MADE APPLICABLE FOR INCOME TAX PROCEEDINGS. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD INCLUDING THE PAPER BOOK FILED BY THE ASSESSEE. WE FIND THAT THE ASSESSEE HAD FILED THE RETURN OF INCOME IN PURS UANT TO NOTICE ISSUED U/S. 148 OFFERING CAPITAL GAIN ON SALE OF THE SUBJECT MENTIO NED PROPERTY AND CLAIMING EXEMPTION U/S. 54F OF THE ACT, IN RESPECT OF THE RE -INVESTMENT OF ENTIRE PROPERTY OF KODAIKANAL. WE FIND THAT ON 15.12.2016, THE ASS ESSEE HAD MERELY EXECUTED :-10-: I.T.A. NO. 3160/MDS/2016 THE POA IN FAVOUR OF M/S. K2 ENGINEERS PRIVATE LTD. ADMITTEDLY, THE POSSESSION OF THE PROPERTY WAS NOT HANDED OVER BY THE ASSESSEE TO THE POA HOLDER BASED ON THE POA. THOUGH, THE VARIOUS CLAUSES IN THE POA CO NFERS VARIOUS POWERS ON THE POA HOLDER EVEN FOR EXECUTION OF SALE DEED IN CONNE CTION WITH THE SUBJECT MENTIONED PROPERTY, WE FEEL THAT THE SAID CLAUSES A RE ONLY GENERAL CLAUSES AS WOULD BE NORMALLY FOUND IN GENERAL POA. ADMITTEDLY , NO AGREEMENT IN WRITING IN THE FORM OF AGREEMENT OF SALE WAS EXECUTED BY THE A SSESSEE IN FAVOUR OF POA HOLDER. THE PROVISIONS OF SECTION 53A OF TRANSFER OF PROPERTY ACT ARE VERY CLEAR THAT IN ORDER TO CONSTRUE THE TRANSFER OF PROPERTY, IT COULD BE MADE BASED ON PART PERFORMANCE OF THE CONTRACT BY WAY OF A VALID AGREEMENT IN WRITING. SINCE, IN THE INSTANT CASE, THERE IS NO AGREEMENT IN WRITI NG EXECUTED BY THE ASSESSEE IN FAVOUR OF POA HOLDER, THE PROVISIONS OF IMPLICATING PART PERFORMANCE OF THE CONTRACT WITHIN THE PROVISIONS OF SECTION 53A OF TR ANSFER OF PROPERTY ACT CANNOT BE INVOKED ON THE ASSESSEE. WE FIND THAT THE HON'B LE SUPREME COURT IN SURAJ LAMP (SUPRA) HAS ELABORATELY DISCUSSED THIS ISSUE A S TO AT WHAT POINT OF TIME THE TRANSFER OF PROPERTY HAPPENS. THE SAME ARE NOT REI TERATED HEREIN FOR THE SAKE OF BREVITY. ONCE THE APPLICABILITY OF PROVISIONS OF S ECTION 53A OF THE TRANSFER OF PROPERTY ACT FAILS, THERE CANNOT BE NO TRANSFER OF CAPITAL ASSET WITHIN THE PROVISIONS OF SECTION 2(47)(V) OF THE ACT AND ACCOR DINGLY NO CAPITAL GAINS COULD ARISE FOR THE ASSESSEE IN ASSESSMENT YEAR 2007-08. ADMITTEDLY, THE SALE DEEDS WERE EXECUTED BY THE ASSESSEE IN FAVOUR OF FOUR PUR CHASERS ON 31.10.2007 AND 30.05.2008 ON WHICH DATE ONLY, THE PURCHASERS WERE PLACED IN POSSESSION OF THE PROPERTY BY THE ASSESSEE. IN THESE FACTS AND CIRCU MSTANCES, THE CAPITAL GAINS, IF :-11-: I.T.A. NO. 3160/MDS/2016 ANY, COULD AROSE ONLY IN ASSESSMENT YEARS 2008-09 A ND 2009-10 AS THE CASE MAY BE AND NOT IN THE YEAR UNDER APPEAL I.E., ASSESSMEN T YEAR 2007-08. 5.1. NOW LET US GO INTO THE REASONS RECORDED BY THE LD. AO WHICH ARE ENCLOSED IN PAGE 133 OF THE PAPER BOOK OF THE ASSES SEE. THE REASONS RECORDED BY THE LD. AO FOR RE-OPENING THE ASSESSMENT FOR THE ASSESSMENT YEAR 2007-08 ARE AS UNDER:- 'THE ASSESSEE MRS. MITHRA RAM HAS SOLD PROPERTY MEA SURING ABOUT TWO GROUNDS AND 1412 SQ.FT. AT SRI KAPALEESWARAR NAGAR, NO. 145, SHROTRIUM NEELANKARAI VILLAGE, TAMBARAM TALUK, KANCHEEPURAM D ISTRICT, BEARING SURVEY NO. 91/2A FOR A SALE CONSIDERATION OF RS. 1, 60,00,000/- ON 15.12.2006 TO M/S. K2 ENGINEERS P. LTD., CHENNA-41. THE ASSESSEE HAS NOT DISCLOSED THE CAPITAL GAINS ARISING OUT OF THE SALE OF THE ABOVE SAID PROPERTY MADE TO M/S. K2 ENGINEERS P. LTD. ' WE HAVE ALREADY SEEN BASED ON THE ARGUMENTS OF THE LD. DR THAT RE-OPENING ADMITTEDLY IN THIS CASE HAD HAPPENED BASED ON AIR I NFORMATION OBTAINED BY THE ASSESSING OFFICER FROM THE REGISTRATION DEPARTMENT. IT WOULD BE PERTINENT TO LOOK AS TO WHAT INFORMATION COULD HAVE BEEN PROVIDE D BY THE REGISTRATION DEPARTMENT IN THE INSTANT CASE. THE REGISTRATION D EPARTMENT COULD HAVE AT BEST PROVIDED ONLY THE POA EXECUTED BY THE ASSESSEE ON 1 5.12.2006 REGISTERED AS DOC. NO. 2537/2006 AT BOOK -IV IN THE OFFICE OF SUB -REGISTRAR, NEELANGARAI AND COPIES OF REGISTERED SALE DEEDS EXECUTED BY THE ASS ESSEE IN FAVOUR OF FOUR DIFFERENT INVOICES ON 31.10.2007 AND 30.05.2008 REG ISTERED AS DOC. NO. 5532/2007; 5538/2007; 2230/2008 AND 2231/2008. ADM ITTEDLY, NO :-12-: I.T.A. NO. 3160/MDS/2016 CONSIDERATION FIGURE HAS BEEN MENTIONED IN THE REGI STERED POA. ADMITTEDLY, NO AGREEMENT OF SALE IN WRITING HAS BEEN ENTERED INTO BY THE ASSESSEE IN FAVOUR OF THE POA. WE FIND THAT THE LD. AO HAD LINKED BOTH T HE INFORMATION (AIR INFORMATION) RECEIVED BY HIM ON TWO DIFFERENT DATES REPRESENTING COMPLETELY TWO DIFFERENT DOCUMENTS AND RECORDED THE REASONS FOR RE -OPENING THE ASSESSMENT BY STATING THAT ASSESSEE HAD SOLD THE PROPERTY FOR RS. 1,60,00,000/- ON 15.12.2006 ITSELF, WHEREAS, THE DOCUMENTS EXECUTED ON 15.12.20 06 WAS ONLY REGISTERED POA ARE ADMITTEDLY DID NOT CONTAIN ANY CONSIDERATION FI GURE. IN THESE FACTS AND CIRCUMSTANCES AND IN VIEW OF THE DECISION OF THE HO N'BLE SUPREME COURT (SUPRA) WE HOLD THAT THE LD. AO HAS LED HIMSELF TO RECORD T HE ERRONEOUS REASONS FOR RE- OPENING THE ASSESSMENT FOR THE ASSESSMENT YEAR 2007 -08. NOW, THE NEXT QUESTION HAVE TO BE ADDRESSED IS AS TO WHETHER THE ASSESSMENT BE RE-OPENED BY AN ERRONEOUS REASON. WE FIND THAT THIS ISSUE HAS B EEN DULY CONSIDERED IN THE FOLLOWING DECISIONS :- PR. CIT VS. LINCOLN PHARMACEUTICALS LTD., REPORTED IN (2016) 282 CTR 588 (GUJ), WHEREIN IT WAS HELD AS UNDER:- ' 16. IN THIS REGARD, THE FINDINGS RECORDED BY THE COMMISSIONER (APPEALS) ON THE MERITS OF THE ORDER PASSED BY THE ASSESSING OFFICER SHOW THAT VARIOUS NOTIFICATIONS WERE ISSUED BY THE MINIS TRY OF INDUSTRY (DEPARTMENT OF INDUSTRIAL POLICY AND PROMOTION) FRO M TIME TO TIME INCREASING THE LIMIT OF INVESTMENT IN PLANT AND MAC HINERY FOR TREATING THE UNDERTAKING AS A SMALL SCALE INDUSTRIAL UNIT. THE C OMMISSIONER (APPEALS) HAS RECORDED A FINDING TO THE EFFECT THAT THE INVES TMENT MADE BY THE ASSESSEE AT ALL TIMES WAS WITHIN THE LIMIT FOR PLAN T AND MACHINERY FOR THE ASSESSMENT YEARS UNDER CONSIDERATION. A PERUSAL OF THE TABLE SHOWING THE :-13-: I.T.A. NO. 3160/MDS/2016 CALCULATION OF PLANT AND MACHINERY AS ON THE 31ST M ARCH OF EACH YEAR WHICH HAS BEEN REPRODUCED IN THE ORDER OF THE COMMI SSIONER (APPEALS) AS WELL AS THE IMPUGNED ORDER PASSED BY THE TRIBUNAL, CLEARLY SHOWS THAT THE INVESTMENT MADE IN PLANT AND MACHINERY WAS WITHIN T HE LIMIT PRESCRIBED FOR AN SSI UNIT. AS POINTED OUT BY THE LEARNED COUN SEL FOR THE RESPONDENT ASSESSEE, CERTAIN ASSETS ARE EXEMPTED FROM THE COMP UTATION OF THE EXEMPTION LIMIT UNDER THE RELEVANT NOTIFICATION. TH E ASSESSING OFFICER, HOWEVER, HAD TAKEN INTO CONSIDERATION EVEN THE EXEM PTED ASSETS AND COME TO THE CONCLUSION THAT THE ASSESSEE HAD CROSSE D THE LIMIT. MOREOVER, THE ASSESSING OFFICER HAS FAILED TO TAKE INTO CONSI DERATION THAT AS PER NOTIFICATION NO.857(E) THE LIMIT FOR INVESTMENT IN PLANT AND MACHINERY FOR SSI UNITS MANUFACTURING DRUGS AND PHARMACEUTICAL PR ODUCTS WAS RS.3.00 CRORE AND AS PER NOTIFICATION NO.655(E) WITH EFFECT FROM 5TH JUNE, 2003 SUCH LIMIT HAS BEEN INCREASED TO RS.5.00 CRORE. THE REFORE, THE ASSESSEE REMAINED AN SSI UNIT FOR THE YEARS UNDER CONSIDERAT ION. IN THE AFORESAID PREMISES, IT IS EVIDENT THAT THE ASSESSING OFFICER HAS PROCEEDED ON AN ERRONEOUS ASSUMPTION THAT THE RESPONDENT ASSESSEE D OES NOT MEET WITH THE REQUIREMENT OF AN SSI UNIT WHEN THE RECORD CLEA RLY POINTS OUT TO THE CONTRARY. UNDER THE CIRCUMSTANCES, IT IS MANIFEST T HAT BASED UPON THE MATERIAL ON RECORD ON THE BASIS OF WHICH THE ASSESS ING OFFICER SOUGHT TO REOPEN THE ASSESSMENT, HE COULD NOT HAVE FORMED THE BELIEF THAT THE ASSESSEE DID NOT MEET WITH THE REQUIREMENTS OF AN S SI UNIT AND CONSEQUENTLY COULD NOT HAVE FORMED THE REQUISITE BE LIEF THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. IN THE AB SENCE OF HAVING ANY REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR THE ASSESSMENT YEARS UNDER CONSIDERATION, THE A SSUMPTION OF JURISDICTION ON THE PART OF THE ASSESSING OFFICER U NDER SECTION 147 OF THE ACT BY ISSUING NOTICE UNDER SECTION 148 OF THE ACT IS CLEARLY WITHOUT ANY AUTHORITY OF LAW. :-14-: I.T.A. NO. 3160/MDS/2016 DR. AJIT GUPTA VS. ACIT REPORTED IN (2016) 383 ITR 361 (DEL) , WHEREIN IT WAS HELD THAT :- ' SINCE THE ACTION OF THE REVENUE WAS BASED ON A FACTUALLY ERRONEOUS PREMISE, THE COURT IS OF THE VIEW THAT THE RE-OPENI NG OF THE ASSESSMENTS FOR THE SAID AYS IS NOT SUSTAINABLE IN LAW. THE CO URT IS ALSO SATISFIED THAT THE REQUIREMENT OF THE LAW, AS EXPLAINED BY THE COU RT IN COMMISSIONER OF INCOME TAX V. KELVINATOR OF INDIA LIMITED (2010) 32 0 ITR 561 (SC), AND REITERATED IN THE LATER DECISIONS, HAS NOT BEEN FUL FILLED IN THE PRESENT CASE. 24. ACCORDINGLY THE IMPUGNED NOTICES UNDER SECTION 148 OF THE ACT DATED 25TH MARCH, 2013 (FOR AY 2006-07), 28TH M ARCH, 2013 (FOR AY 2008-09), 5TH MARCH 2014 (FOR AY 2007-08) AND 7TH M ARCH, 2014 (FOR AY 2009-10) AND THE CORRESPONDING ORDERS DATED 13TH DE CEMBER, 2013 AND 11TH MARCH, 2015 REJECTING THE OBJECTIONS OF THE AS SESSEE TO THE SAID NOTICES, ARE HEREBY QUASHED. 25. THE WRIT PETITIONS ARE ALLOWED BUT IN THE CIRC UMSTANCES WITH NO ORDER AS TO COSTS. THE PENDING APPLICATIONS ARE ALSO DISPOSED OF.' RESPECTFULLY FOLLOWING THE AFORESAID DECISION OF HO N'BLE GUJARAT HIGH COURT AND DELHI HIGH COURT (SUPRA), WE HELD THAT THE LD. AO A SSUMING JURISDICTION BASED ON THE ERRONEOUS REASONS RECORDED BY HIM HAS TO BE DEC LARED VOID ABINITIO AND ACCORDINGLY RE-ASSESSMENT NOTICE ISSUED U/S. 148 OF THE ACT IS NOT SUSTAINABLE IN LAW AND REQUIRES TO BE QUASHED. 5.2. WE ALSO FIND THAT MERELY BECAUSE THE ASSESSEE HAD ERRONEOUSLY ADMITTED THE CAPITAL GAINS IN ASST YEAR 2007-08 AND HAD CLAIMED EXEMPTION U/S 54F OF THE ACT IN RESPECT OF REINVESTMENT IN PROPER TY AT KODAIKANAL AND HAD FILED A RETURN IN RESPONSE TO NOTICE U/S 148 OF THE ACT, THIS VERY ACTION ALONE WOULD NOT :-15-: I.T.A. NO. 3160/MDS/2016 STRENGTHEN THE REASONS RECORDED BY THE LD AO AND CO NFER HIM POWER TO FRAME THE REASSESSMENT. WE FIND THAT THOUGH THE ASSESSEE BAS ED ON MISTAKEN UNDERSTANDING OF PROVISION OF INCOME TAX ACT HAD FI LED THE RETURN IN RESPONSE TO NOTICE U/S. 148 OF THE ACT DISCLOSING CAPITAL GAINS AND CLAIMING EXEMPTION US 54F OF THE ACT FOR THE ASSESSMENT YEAR 2007-08, THAT ME RE ACT ALONE COULD NOT BE TREATED AS A REASON FASTENING UNWARRANTED TAX LIABI LITY BY THE ASSESSEE FOR THE YEAR UNDER APPEAL. IT IS WELL SETTLED THAT THERE I S NO ESTOPPEL AGAINST THE STATUTE AND RELIANCE IN THIS REGARD PLACED ON THE DECISION OF THE HON'BLE CALCUTTA HIGH COURT IN THE CASE OF MAYNAK PODDAR (HUF) VS. WTO RE PORTED IN 262 ITR 633 IS VERY WELL FOUNDED. IN VIEW OF THE AFORESAID FINDIN GS, WE DEEM IT FIT AND APPROPRIATE TO ADMIT THE ADDITIONAL GROUNDS RAISED BY THE ASSESSEE AS IT GOES INTO THE ROOT OF THE MATTER AND DOES NOT INVOLVE ANY INV ESTIGATION OF FACTS IN THE LIGHT OF THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF NATIONAL THERMAL POWER CORPORATION LTD., REPORTED IN 229 ITR 383 (S C). 5.3. ACCORDINGLY, IN VIEW OF OUR FINDINGS IN THE FA CTS AND CIRCUMSTANCES OF THE CASE AND RESPECTFULLY FOLLOWING THE JUDICIAL PR ECEDENTS RELIED UPON HEREIN ABOVE, WE ALLOW THE ADDITIONAL GROUNDS RAISED BY TH E ASSESSEE AND HOLD THAT THE RE-ASSESSMENT FRAMED BY THE LD. AO FOR THE ASSESSME NT YEAR 2007-08 IS NOT SUSTAINABLE IN LAW. ACCORDINGLY, THE GROUNDS RAISE D BY THE ASSESSEE ARE ALLOWED. :-16-: I.T.A. NO. 3160/MDS/2016 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED ON FRIDAY, THE 17TH DAY OF FEBRUAR Y, 2017 AT CHENNAI. SD/ - ( ' # . $ ) (DUVVURU RL REDDY) /JUDICIAL MEMBER SD/ - ( ) (M. BALAGANESH) / ACCOUNTANT MEMBER /CHENNAI, 3 /DATED: 17TH FEBRUARY, 2017 JPV * -&45 65 /COPY TO: 1. ) APPELLANT 2. -.) /RESPONDENT 3. 7 ( )/CIT(A) 4. 7 /CIT 5. 5 -&& /DR 6. 9 /GF