Shri Shaileshkumar P.Lukhi, Surat V. The Income tax Officer,Ward-9(4), Surat

ITA 3188/AHD/2009

• Counselvise Citation: 318820514 RSA 2009
• Duration Of Justice: 2 year(s) 5 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-05-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 15-05-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 27-11-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D C SHARMA SR D R
• Assessee Lawyers: D K PARIKH
• Keywords: Sale consideration of property below Jantri Value; Assessment record
• Section: 69C; 50C

Judgement Text

, , , , A, IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, A BENCH BEFORE S/SHRI MUKUL KUMAR SHRAWAT, JUDICIAL MEMBER AND TEJ RAM MEENA, ACCOUNTANT MEMBER) ITA NO.3188/AHD/2009 [ASSTT.YEAR : 2006-2007] SHAILESH KUMAR P.LUKHI, C-1, SHRI JALARAM SOCIETY, B/H. GURU NAGAR, VARACHHA ROAD, SURAT PA NO. AAKPLO 0597 R VS. ITO, WARD 9(4) SURAT, AAYAKAR BHAVAN, MAJURA GATE, SURAT ( (( ( / APPELLANT) ( (( ( / RESPONDENT) !' / ASSESSEE BY : SHRI D.K.PARIKH , AR $%& !' / REVENUE BY : SHRI.D.C.SHARMA,SR.-DR !'&( )* / DATE OF HEARING : 1 5 TH MAY , 2012 +,- )* / DATE OF PRONOUNCEMENT : 23.05.2012 '. / O R D E R PER T.R. MEENA, ACCOUNTANT MEMBER : 1. THIS IS ONE APPEAL FILED BY THE ASSESSEE AGAINST OR DER OF THE CIT(A)-V, SURAT DATED 26.10.2009 FOR THE ABOVE ASSESSMENT YEA R. THE GROUNDS OF APPEAL ARE AS UNDER:- (I) THE LD. C.I.T.[A]. ERRED IN CONFIRMING CAPITAL GAIN TAX LIABILITY IN A.Y. 2006-07 INSTEAD OFA.Y.2007-08 AS CORRECTLY RET URNED BY THE ASSESSEE.. (II) THE C.I.T. (A) ERRED IN NOT DECIDING THE ISSUE OF APPLICABILITY OF SECTION 50C. THE VIRES OF SECTION 50C IS NOT APPLIC ABLE TO ASSESSEE. (III) THE LD. C.I.T.(A) HAS ERRED IN NOT FIXING THE CAPIT AL GAIN TAX LIABILITY IN THE YEAR OF CONSIDERATION RECEIVED ON PROPORTIONATE BASIS, AS WAS HELD BY CIT VS K.JEELANI IASHA [2002] 256 ITR282[MAD]. 2 (IV) THE CIT[A]ERRED IN NOT DECIDING AND DELETING THE AD DITION OF RS.172750/- BEING ALLEGED UNACCOUNTED PAYMENT TOWAR DS ADDITIONAL STAMP DUTY. (V) THAT THE ADDITIONAL CAPITAL GAIN TAX LIABILITY OF R S.15,63,675/- MAY KINDLY BE CANCELLED. (VI) THAT THE ADDITION OF RS.1,72,750/- MAY KINDLY BE CA NCELLED. 2. THE FACTS ARE THAT THE ASSESSEE HAD ENTERED AN AGREEMENT FOR SALE OF A FLAT BEARING NO. 704, BODING PRITI PALACE ,VILLE PA RLE [EAST] MUMBAI FOR A CONSIDERATION OF RS.2878000/-. HOWEVER NO CAPITAL G AIN ARISING OUT OF THE SAID SALE WAS OFFERED FOR TAXATION IN A.Y, 06-07. THE A. O. COLLECTED THE INFORMATION FROM THE SUB REGISTRAR ANDHERI, MUMBAI U/S 133[6] O F IT ACT. ON VERIFICATION OF SAID DEED IT WAS FOUND THAT THE MARKET VALUE FOR TH E PURPOSES OF STAMP DUTY HAD TAKEN AT RS. 4379760/- AFTER CONSIDERING THE REPLY OF THE ASSESSEE AND AGREEMENT FOR SALE DATED 28/2/2006 IN WITCH SALE CONSIDERATIO N WAS SHOWN AT RS. 2878000/-. THE ASSESSEE ALSO FILED COPY OF BANK PASS BOOK OF P URCHASERS ON WHICH ADDRESS WAS GIVEN B 704, PRITI PALACE VILLE PARLE MUMBAI. H E HELD THE TRANSACTION WAS PERTAINED TO A.Y. 06-07. THE DIFFERENCE OF MARKET VALUE TAKEN BY THE SUB REGISTRAR AND SALE CONSIDERATION SHOWN BY THE ASSES SEE AT RS. 1501760/- TREATED UNDISCLOSED RECEIPT OF THE ASSESSEE AND TAXED ACCOR DINGLY. FURTHER, STAMP DUTY PAID RS.172750/-WAS ALSO ADDED IN INCOME OF THE ASS ESSEE AS PAID UNACCOUNTED SOURCE. 3. BEING AGGRIEVED FROM THE ORDER OF THE AO, THE AS SESSEE FILED AN APPEAL BEFORE CIT(A)-V SURAT. THE CIT(A)- SURAT DISMISSED THE APPEAL BY OBSERVING AS UNDER:- 6. I HAVE PERUSED THE SUBMISSION OF THE APPELLANT AND THE VIEW OF THE A.O. THE AGREEMENT FOR SALE WAS EXECUTED ON 28/02/2006FOR STATED THE CONSIDERATION OF RS. 2878000/-. THIS AGR EEMENT FOR SALE WAS REGISTERED WITH THE STAMP DUTY AUTHORITIES AT M UMBAI WHO HAVE VALUED THE PROPERTY AT RS. 43,79,760/-/- AND RECOVE RED ADDITIONAL STAMP DUTY VIDE RECEIPT DATED 28.02.2006. IN THE RE GISTRY THE NAMES OF THE TRANSFEREES HAVE BEEN HAVE BEEN RECORDED ON 28.02.2006. THE MAIN THRUST OF THE ARGUMENT OF THE APPELLANT IS THAT THE TRANSFER IS NOT COMPLETED AND THE FULL CONSIDERATION HAS NOT BEEN RECEIVED DURING THE YEAR UNDER CONSIDERATION. SINCE THE TRAN SFER WAS COMPLETED AND THE SUBSTANTIVE CONSIDERATION WAS REC EIVED DURING THE A. Y. 2007-08 THE LIABILITY OF CAPITAL GAIN SHO ULD HAVE BEEN WORKED OUT IN HT NEXT YEAR. THIS ARGUMENT IS NOT VA LID. THE RECEIPT 3 OF FULL CONSIDERATION IS NOT A RELEVANT ASPECT. THE CONSIDERATION RECEIVED OR ACCRUING IS MATERIAL TO DETERMINE THE FULL VALUE OF CONSIDERATION. IN THIS CASE, WHEN THE AGREEMENT TO SALE FOR THE DISCLOSED CONSIDERATION OF RS.28,78,000/- WAS EXECU TED ON 28.02.206 THIS AMOUNT IN FULL IRRESPECTIVE OF AMOUN T ACTUALLY RECEIVED WAS ACCRUING TO THE ASSESSEE ON THAT DATE. THEREFORE, THE VALUATION ADOPTED BY THE STAMP DUTY AUTHORITY IS ON THAT DATE IS THE RELEVANT CONSIDERATION OF FULL VALUE OF CONSIDERATI ON U/S. 50-C FOR THE PURPOSE OF SECTION 48 OF THE ACT. 6.1 THE NEXT ISSUE IS THE ISSUE OF TRANSFER OF PR OPERTY. ACCORDING TO THE APPELLANT, THE AGREEMENT TO SALE D OES NOT AMOUNT TO TRANSFER OF THE PROPERTY WHICH WAS ONLY COMPLETE D BY WAY OF SALE DEED SAID TO HAVE BEEN EXECUTED BY THE ASSESSEE IN THE NEXT EAR I.E. A. Y. 2007-08. SECTION 2 (47) DEFINES TRANSFER WH ICH INCLUDES ANY TRANSACTION INVOLVING ALLOWING OF THE POSSESSI ON OF ANY IMMOVABLE PROPERTY TO BE TAKEN OR RETAINED IN PART PERFORMANCE OF A CONTRACT OF THE NATURE REFERRED TO IN SECTION 53 OF THE TRANSFER OF PROPERTY ACT, 1882 (4 OF 1882). IN THIS CASE, THE ASSESSING OFFICER HAS CATEGORICALLY MENTIONED THAT POSSESSION OF THE PROPERTY WAS HANDED OVER IN THAT YEAR. THIS FINDING OF FACT WHIC H IS BASED ON THE ENQUIRY IS MENTIONED IN PARA 4 OF THE ASSESSMENT OR DER. IN THE BANK PASSBOOK OF THE PURCHASERS ACCOUNTS MENTIONED WITH THE SARASWAT COOPERATIVE BANK LTD., THE ADDRESS OF THE PURCHASER S IS GIVEN AS 704, PRITI PAKACE, VILLE PARLE, MUMBAI. THE BANK AC COUNT WAS OPENED ON 01.03.2006. THE RESIDENTIAL PROOF OF AN A CCOUNT HOLDER IS A VERY ESSENTIAL REQUIREMENT AS PER RBIS KYC NO RMS (KNOW YOUR CUSTOMER). THIS STRICT PROOF IS REQUIRED TO BE SUBMITTED BY THE CUSTOMER TO ENABLE OPENING OF THE BANK ACCOUNT. THE REFORE, THE PURCHASER WAS ALREADY IN POSSESSION OF THIS PROPERT Y IN RESPECT OF WHICH PROOF OF RESIDENCE WAS SUBMITTED TO THE BANK. AS MENTIONED BY THE ASSESSING OFFICER, ANOTHER ACCOUNT WAS OPENE D IN THE NAME OF SHRI J. K. GABANI ON 16.06.2005 IN WHICH ALSO TH E ADDRESS IS GIVEN AT THE PROPERTY IN QUESTION. THEREFORE THE PO SSESSION OF THE PROPERTY EVEN BEFORE THE DATE OF AGREEMENT TO SALE CANNOT BE RULED OUT. THE AGREEMENT TO SALE TOGETHER WITH THE FACTUM OF POSSESSION DURING THE YEAR UNDER CONSIDERATION SATISFIES THE D EFINITION OF TRANSFER UNDER SUB CLAUSE (V) OF SECTION 2 (47) O F THE ACT. IN VIEW OF THIS, THE REQUIREMENTS OF SECTION 50-C ARE CLEAR LY MET WITH IN THE EAR UNDER REFERENCE. THEREFORE, THE ACTION TAKEN BY THE ASSESSING OFFICER IS CORRECT AND IN ACCORDANCE WITH LAW. I DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF THE ASSESS ING OFFICER. THE APPEAL IS THEREFORE DISMISSED. 4. THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THIS ORDER OF THE LEARNED CIT(A). AT THE TIME OF HEARING THE LEARNED AR THROU GH HIS WRITTEN SUBMISSION PLEADED BEFORE US AS UNDER: 4 1. THE APPELLANT HAVING NOT PARTED WITH POSSESSION OF THE FLAT IN FY 2005-06 SINCE ONLY RS.100107 & 140000 WERE R ECEIVED OUT OF RS.28,78,000, AND MAJOR BALANCE PAYMENT OF RS.26 ,25,000 WAS RECEIVED ONLY IN SUBSEQUENT YEAR (F 2006-07), THE C APITAL GAIN WAS RIGHTLY OFFERED BY APPELLANT IN ASST. YEAR: 2007-08 / 2. AS PER CLAUSE (2) OF AGREEMENT FOR SALE (PAGE 6 OF PAPER BOOK) IT WAS CLEAR THAT TRANSFEREE WAS TO BE GIVEN POSSESSION N THE BALANCE PAYMENT AND AGREEMENT WAS VALID ONLY SUBJEC T TO REALIZATION OF ALL CHEQUES ETC. 3. THE LD AO/CIT(A) HAVE NOT CONSIDERED THIS ASPECT AND MERELY ON THE BASIS OF ADDRESS IN THE PASS BOOK FOR BANK ACCOUNT OPENED ON 1.03.2006 HAVE PRESUMED THAT POSSESSION W AS HANDED OVER IN FY 2005-06. NO INQUIRY WITH TRANSFEREE WAS CONDUCTED. MERELY SUSPICION CANNOT FORM BASIS AS EVIDENCE WITH OUT INQUIRY. 4. THE APPELLANT HAS ALREADY OFFERED CAPITAL GAIN I N AY 2007- 08 WHEN FULL AMOUNT WAS RECEIVED AND POSSESSION HAN DED OVER. 5. THE AUTHORITIES BELOW OUGHT TO HAVE ACCEPTED THA T THERE BEING NO TRANSFER IN FY 2005-06, CAPITAL GAIN WAS N OT TO BE CHARGED IN ASST. YEAR 2006-07 AND WAS CHARGEABLE ON L8Y IN A. Y. 2007-08 AS DISCLOSED. 6. THE AO ALSO ERRED IN MAKING OF RS.1,72,750 BEING AMOUNT OF STAMP DUTY PRESUMED TO BE PAID BY APPELLANT AND HOL DING IT TO HAVE BEEN PAID OUT OF UNACCOUNTED SOURCES WITHOUT ANY CO GENT REASONS OR EVIDENCE OR NOTICE. NO ADDITION UNDER S. 69C CAN BE MADE UNLESS IT IS SHOWN THAT EXPENDITURE IS IN FACT INCURRED BY THE ASSESSEE AS HELD BY DELHI HIGH COURT IN CIT VS LUBTECH INDIA LT. (2009) 311 ITR 175 (DELHI). CIT(A) ERRED IN NOT DECIDING THE GROUND AND NOT DELETING THE ERRONEOUS ADDITION. 7. AS ALTERNATIVE PLEA, SINCE THE APPELLANT HAS ALR EADY OFFERED THE SAME CAPITAL GAIN IN AY 2007-08 (PAPER BOOK PAG E 11-13) DIRECTION BE GIVEN TO GIVE CREDIT FOR TAXES PAID AS HELD IN DY CIT VS STANDARD FIRE WORKS P LTD. (2010) 128 TTJ (CHENN AI) TM. 8. HONBLE ITAT HAS THE POWER TO GIVE SUCH DIRECTION AS HELD IN PERFECT EQUIPMENTS VS DY CIT (2003) 85 ITD 50 (AHD ). 5. THE LEARNED DR VEHEMENTLY OPPOSED THE PLEADINGS OF THE LEARNED AR AND SUBMITTED THAT THE ORDERS OF THE AUTHORITIES BE LOW MAY BE UPHELD. 6. WE HAVE PERUSED THE ASSESSMENT RECORDS, ORDER OF THE LEARNED CIT(A), SUBMISSIONS OF THE ASSESSEE AND COPY OF THE AGREEME NT FOR SALE AND CASE LAWS 5 RELIED UPON. AS PER SECTION 50C OF THE IT ACT THE C ONSIDERATION EITHER RECEIVED OR ACCRUED HAS TO BE CONSIDERED. IN THIS CASE, THE AGR EEMENT FOR SALE WAS EXECUTED ON 28-02-2006 BEFORE THE STAMP DUTY AUTHORITY, MUMB AI. ACCORDINGLY, THE CONSIDERATION ACCRUED ON THE DATE OF AGREEMENT FOR SALE. THE ASSESSEES CONTENTIONS RAISED THAT SECTION 2 (47) OF THE IT AC T IS APPLICABLE IN HIS CASE. AS PER SECTION 2(47) (V) POSSESSION OF IMMOVABLE PROP ERTY IS NECESSARY IN CASE OF PART PERFORMANCE U/S 53A OF THE TRANSFER OF PROPERT Y ACT, 1882, HAS NO RELEVANCY AS THERE IS NO PART PERFORMANCE U/S 53A O F THE TRANSFER OF PROPERTY ACT, 1882. THE STATE GOVERNMENT HAD AMENDED THE STA MP DUTY ACT AND STAMP DUTY IS TO BE PAID EVEN ON AGREEMENT FOR SALE. THE ASSESSEE HIMSELF PRODUCED THE COPY OF THE BANK ACCOUNT OF MRS. & MR. JADHABHAI GA BANI DURING THE COURSE OF ASSESSMENT PROCEEDINGS ON WHICH THE ADDRESS WAS GIV EN AT THE FLAT PURCHASED. THE BANK ACCOUNT WAS OPENED ON 01-03-2006. AS PER T HE TRANSFER OF PROPERTY ACT, 1882 THE REGISTRATION IS REQUIRED OF ANY IMMOV ABLE PROPERTY HAVING MARKET VALUE OF MORE THAN RS.100/- WHICH HAS BEEN MADE ON 28-02-2006 RELEVANT TO ASSESSMENT YEAR 2006-07. THUS, THERE IS NO CASE OF THE ASSESSEE. ACCORDINGLY, WE CONFIRM THE ORDER OF THE LEARNED CIT(A). THE ASSESS EES APPEAL ON THIS GROUND IS DISMISSED. 7. THE FOURTH GROUND OF APPEAL OF THE ASSESSEE I S AGAINST ADDITIONAL STAMP DUTY OF RS.1,72,750/-. THE AO HAD ADDED THIS AMOUNT TO T HE TOTAL INCOME AS PAID FROM UNACCOUNTED SOURCE. THE LEARNED CIT(A) HAD NOT ADJU DICATED THIS ISSUE IN THE APPELLATE ORDER WHICH WAS GROUND NO.5 OF THE ASSESS EE BEFORE THE LEARNED CIT(A). BEFORE US, THE LEARNED AR CONTENDED THAT AS PER CLAUSE 9 OF THE AGREEMENT FOR SALE DATED 28-02-2006 THE TRANSFEREE HAD TO PAY ALL THE LEGAL CHARGES, STAMP DUTY AND REGISTRATION CHARGES FOR TH E TRANSFER OF THE SAID FLAT IN HIS NAME. THE AO HAS NOT BROUGHT ON RECORD ANY MATERIAL WHICH SHOWS THAT 6 ADDITIONAL STAMP DUTY PAID BY THE ASSESSEE (TRANSFE RER). WE HAVE PERUSED ALL THE EVIDENCES SUBMITTED BEFORE US WHICH WERE ALSO SUBMI TTED BEFORE THE AO AND THE LEARNED CIT(A) AND FIND THAT THE ASSESSEE HAS NOT P AID ANY STAMP DUTY AND THE TRANSFEREE (PURCHASER) IS REQUIRED TO PAY THE STAMP DUTY. THEREFORE, THIS ADDITION IS DELETED. THE ASSESSEES APPEAL ON THIS GROUND IS ALLOWED. 8. THE ASSESSEE ALTERNATELY ARGUED THAT IF THE HON BLE BENCH CONCLUDED THAT TAXABILITY OF THE CAPITAL GAIN IS PERTAINED TO AY 2 006-07, THEN CREDIT OF TAX PAID IN AY 2007-08 MAY BE ALLOWED. HE RELIED ON THE DECI SION IN THE CASE DCIT VS STANDARD FIRE WORKS (PVT.) LTD. (2010) 128 TTJ 1 (C HENNAI) (T M), DCIT (SPL. RANGE- 27) VS OMAN INTERNATIONAL BANK, SAOG (2006) 100 ITD 285 (MUM.) (SB)/ (2006) 102 TTJ 260 (MUM.) (SB) AND PERFECT EQ UIPMENT VS DCIT (2003) 85 ITD 50 (HYD.). WE HAVE GONE THROUGH THE CASE REF ERRED BY THE APPELLANT AND ALSO ABOVE FINDING, THE AO IS DIRECTED TO GIVE CRED IT OF THE TAX PAID FOR CAPITAL GAIN SHOWN BY THE ASSESSEE IN AY 2007-08 IN AY 2006 -07. THE ASSESSEES APPEAL ON THIS GROUND IS ALLOWED. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 23.05 .2012 SD/- SD/- (MUKUL KUMAR SHRAWAT) (T.R. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER TRUE COPY 7 C OPY OF THE ORDER FORWARDED TO: ) : APPELLANT ) : RESPONDENT ) : CIT(A) ) : CIT CONCERNED ) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD 1. DATE OF DICTATION (DIRECT) : 17-05-2012 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER. : 17-05-2012 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P.S./P.S : 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT. : 5. DATE ON WHICH FAIR ORDER PLACED BEFORE OTHER MEMBER : 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P.S./P.S. : 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK. : 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK. : 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER. : 10. DATE OF DESPATCH OF THE ORDER :