Mohammed Layeeq, Hyderabad V. Income Tax Officer, Ward-4(1), Hyderabad

ITA 322/Hyd/2018

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 7746 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 11 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Assessment Year: 2009-2010
• Appeal Filed On: 14-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T. SUNIL GOUTAM
• Keywords: Sale consideration of property below Jantri Value; Capital asset
• Section: 54; 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD ‘ A ‘ BENCH, HYDERABAD. BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY, JUDICIAL MEMBER (THROUGH VIDEO CONFERENCE) ITA Nos.321 & 322/Hyd/2018 (Assessment Year : 2009-10) 1. Shri Mohammed Shakeel Quadri, Hyderabad. PAN AACPQ 9249H 2. Shri Mohammed Layeeq, Hyderabad. PAN ACWPL 1994Q Vs. Income Tax Officer, Ward 4(1), Hyderabad. Appellants Respondent Appellants By : None. Respondent By : Shri T. Sunil Goutam (D.R.) Date of Hearing : 17.01.2022. Date of Pronouncement : 20.01.2022. O R D E R Per Shri Duvvuru RL Reddy, J.M. : These two appeals filed by different assessees for Asst. Year 2009-10 arise from the Commissioner of Income Tax (Appeals)-1, Hyderabad orders dt.28.08.2017 & 24.08.2017 respectively u/s.144 r.w.s. 147 of the Income Tax Act, 1961 ('the Act'). The assessees raised mainly two issues i.e. (i) Denial of Long Term Capital Gain and (ii) Denial of deduction u/s.54 of the Act. 2 ITA Nos.321 & 322/Hyd/2018 Since the facts and circumstances are identical in both the appeals, consolidated order is being passed for the sake of convenience and brevity. ITA No.321/Hyd/2018 3. The assessee has raised the following grounds of appeal : 3 ITA Nos.321 & 322/Hyd/2018 4. Briefly stated facts are that the assessee is an individual and sold his property along with his brother Mohammed Layeeq bearing No.2-2-184/1 (Plot No,9), Turab Nagar, Amberpet, Hyderabad for a sale consideration of Rs.23,50,000 vide Sale Deed No.3347/2008 for the F.Y. 2008-09. This property is a joint property of assessee and his brother Mohd. Layaeeq. However, it was found that the assessee has not filed any Return of Income. On verification of the same, the Assessing Officer has issued several notices seeking the information from the assessee. There was no response from the assessee, the Assessing Officer invoked provisions of section 50C of the Act and adopted the SRO value for calculating the capital gains at Rs.34,16,000 as against the sale consideration adopted by the assessee in the sale deed of Rs.23,50,000. The assessee and his brother has entered into an agreement of sale on 5.10.2000 at 2-2-184, Turabnagar, Amberpet, Hyderabad admeasuring 206 sq. yds for a total consideration of Rs.3.70 lakhs from Sri Syed Salahuddin and the assessee has paidd entire amount by Feb., 2001 and taken over the possession of the property from the seller. The assessee's brother Mohd. Layeeq was out of country for a period of three years, due to that sale deed was 4 ITA Nos.321 & 322/Hyd/2018 not executed in Feb., 2001 but the physical possession and the enjoyment of the property was with the assessee and his brother since Feb., 2001. An Affidavit from the seller of the property confirming that the property was sold in the year 2001. The assessee sold the property on 13.10.2008 to Sri S.Rajendar. However the assessee and his brother got registered an Agreement of Sale cum GPA on 10.07.2006 vide Document No.2691/2006 for consideration of Rs.11,22,000. After the sale of the above property, the assessee bought a residential property vide Agreement of Sale cum General Power of Attorney in the name of Smt. Shamim begum (wife of assessee) and Mohd. Saleem vide document No.3374/08 dt.15.10.2008 from one Sri K. Banu admeasuring 185 sq. yds for a consideration of Rs.49,90,000. The assessee claimed long term capital gain for indexation benefit. The Assessing Officer as well as CIT(A) did not agree with the assessee since the agreement of sale dt.5.10.2000 is not registered. The Assessing Officer completed assessment on 30.12.2016 determining the total income of the assessee at Rs.9,28,000. Aggrieved by the assessment order, the assessee filed an appeal before the learned CIT(A). After considering the submissions of the 5 ITA Nos.321 & 322/Hyd/2018 assessee's counsel, the CIT(A) dismissed the assessee's appeal and upheld the order of Assessing Officer. 5. We have heard the learned DR and perused the material available on record. The contention of the assessee is that he purchased the property along with his brother and paid the entire sale consideration in Feb., 2001 and taken over the legal possession of the property, therefore, as per section 2(47) of the Act, the assessee and his brother were in the possession and enjoyment of the property. The other contention of the assessee is that his brother was out of country for a period of 3 years therefore sale deed was not executed in Feb., 2001. After his brother return, an agreement of sale cum GPA was executed on 30.06.2006 but the assessee and his brother enjoying the property since Feb., 2001. To establish the above said fact the assessee also filed an Affidavit from the seller of the property i.e. Sri Syed Salahuddin confirming the sale transaction was done by Feb., 2001. And in turn he sold the property to Sri S. Rajender vide sale deed dt.30.10.2008. Therefore the assessee claimed the property is in possession from Feb. 2001 to 13.10.2008. However the contention of the Revenue is that the valid sale deed was executed only on 10.7.2006 with 6 ITA Nos.321 & 322/Hyd/2018 SRO, Chikkadpally, Hyderabad. The assessee and his brother sold the property on 13.10.2008 only. Therefore the documentary evidence fairly establishes that the assessee had purchased the property on 10.07.2006 and sold the same on 13.10.2008. Therefore the Assessing Officer has correctly computed the STCG. In this case, the assessee did not place any evidence before the authorities below as well as before us. Moreover, the assessee did not appear before the Assessing Officer to establish the said fact inspite of repeated notices. Before us also, the assessee had not placed any satisfactory evidence that the sale transaction has been completed in Feb., 2001 except the cancellation of telephone connection in the property purchased by the assessee, it is difficult to come to a conclusion based on the cancellation of telephone connection that they are in possession of the property. Apart from this, the GPA was registered as document No.2691/2006 on 30.06.2006 at SRO, Chikkadpally, Hyderabad. Therefore, we are of the view that the sale has taken place only on 10.07.2006. Hence the Assessing Officer as well as the learned CIT(A) has rightly came to the conclusion that the assessee is entitled only for STCG. Hence, we do not find any infirmity in the order of Assessing Officer 7 ITA Nos.321 & 322/Hyd/2018 as well as the learned CIT(A). Hence this ground raised by the assessee is dismissed. 6. The second issue raised by the assessee is relating to claim of deduction u/s. 54 of the Act. 6.1 The ld. DR submitted that the assessee has claimed deduction u/s. 54 of the Act on purchase of residential property vide Agreement of Sale cum General Power of Attorney in the name of Smt. Shamim Begum, wife of the assessee and Mohammed Saleem vide document No.0605-2009 dt.13.03.2009 from Sri K. Satish Kumar admeasuring 185 sq. yards at Bharath Nagar, Amberpet, Hyderabad for a sale consideration of Rs.49,90,000/-, therefore, the assessee is claiming deduction u/s. 54 of the Act. He further submitted that the assessee did not file ownership rights of the property and he is only a GPA holder, hence he has no ownership right over the property, the assessee is not entitled for deduction u/s. 54 of the Act. He further submitted that the assessee fails to establish that he purchased a residential property. 6.2 We have heard the ld. DR and considered the documents available on record. If the assessee purchased a property or 8 ITA Nos.321 & 322/Hyd/2018 constructed a property, then the assessee is entitled for deduction u/s.54 of the Act. For ready reference we quote Section 54 of the Act reads as under : “ 54. (1) Subject to the provisions of sub-section (2), where, in the case of an assessee being an individual or a Hindu undivided family, the capital gain arises from the transfer of a long-term capital asset, being buildings or lands appurtenant thereto, and being a residential house, the income of which is chargeable under the head "Income from house property" (hereafter in this section referred to as the original asset), and the assessee has within a period of one year before or two years after the date on which the transfer took place purchased, or has within a period of three years after that date constructed, one residential house in India, then, instead of the capital gain being charged to income-tax as income of the previous year in which the transfer took place, it shall be dealt with in accordance with the following provisions of this section, that is to say,— (i) if the amount of the capital gain is greater than the cost of the residential house so purchased or constructed (hereafter in this section referred to as the new asset), the difference between the amount of the capital gain and the cost of the new asset shall be charged under section 45 as the income of the previous year; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its purchase or construction, as the case may be, the cost shall be nil; or (ii) if the amount of the capital gain is equal to or less than the cost of the new asset, the capital gain shall not be charged under section 45; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its purchase or construction, as the case may be, the cost shall be reduced by the amount of the capital gain: 45 [Provided that where the amount of the capital gain does not exceed two crore rupees, the assessee may, at his option, purchase or construct two residential houses in India, and where such option has been exercised,— (a) the provisions of this sub-section shall have effect as if for the words "one residential house in India", the words "two residential houses in India" had been substituted; (b) any reference in this sub-section and sub-section (2) to "new asset" shall be construed as a reference to the two residential houses in India: Provided further that where during any assessment year, the assessee has exercised the option referred to in the first proviso, he shall not be subsequently entitled to exercise the option for the same or any other assessment year.] 9 ITA Nos.321 & 322/Hyd/2018 (2) The amount of the capital gain which is not appropriated by the assessee towards the purchase of the new asset made within one year before the date on which the transfer of the original asset took place, or which is not utilised by him for the purchase or construction of the new asset before the date of furnishing the return of income under section 139, shall be deposited by him before furnishing such return [such deposit being made in any case not later than the due date applicable in the case of the assessee for furnishing the return of income under sub-section (1) of section 139] in an account in any such bank or institution as may be specified in, and utilised in accordance with, any scheme which the Central Government may, by notification in the Official Gazette, frame in this behalf and such return shall be accompanied by proof of such deposit; and, for the purposes of sub-section (1), the amount, if any, already utilised by the assessee for the purchase or construction of the new asset together with the amount so deposited shall be deemed to be the cost of the new asset : Provided that if the amount deposited under this sub-section is not utilised wholly or partly for the purchase or construction of the new asset within the period specified in sub-section (1), then,— (i) the amount not so utilised shall be charged under section 45 as the income of the previous year in which the period of three years from the date of the transfer of the original asset expires; and (ii) the assessee shall be entitled to withdraw such amount in accordance with the scheme aforesaid.” In this case, the assessee entered into an Agreement of sale cum GPA which was registered, vide Document No.3374/08 dt.15.10.2008. Apart from this, he has not placed any evidence before the lower authorities as well as before us establishing that he purchased or constructed a residential house as per provisions of section 54 of the Act. Therefore in the absence of any such evidence, the A.O. as well as CIT(A)dismissed the instant ground raised by the assessee. The assessee failed to establish ownership right over the residential property but being only a GPA holder and 10 ITA Nos.321 & 322/Hyd/2018 Agreement holder. After considering the findings of the lower authorities, we do not find any infirmity in the orders of authorities below. Hence ground raised u/s. 54 of the Act by the assessee is dismissed. 6.3 In the result, the assessee's appeal in ITA No.321/Hyd/2018 is dismissed. ITA No.322/Hyd/2018 7. Since the facts are identical in this appeal to the facts dealt with in preceding paras in ITA 321/Hyd/2018, same decision applies to this appeal of assessee also. 8. To sum up, both the appeals of assessees are dismissed. A copy of this common order be placed in the case file. Order pronounced in the open court on 20th Jan.,2022. Sd/- Sd/- (A.MOHAN ALANKAMONY) (DUVVURU RL REDDY) Accountant Member Judicial Member Hyderabad, Dt. 20.01.2022. * Reddy gp 11 ITA Nos.321 & 322/Hyd/2018 Copy to : 1. i) Shri Mohammed Shakeel Quadri, No.1-5-202, Zamistanpur, Ekminar Masjid, Musheerabad, Hyderabad-500 020. ii) Shri Mohammed Layeeq, No.1-5-5/B, Flat No.201, J.K. Heights, Krishna Colony, Musheerabad, Hyderabad-500 020. 2. ITO, Ward 4(1), Hyderabad. 3. Pr. C I T-1, Hyderabad. 4. CIT(Appeals)-1, Hyderabad. 5. DR, ITAT, Hyderabad. 6. Guard File. By Order Sr. Pvt. Secretary, ITAT, Hyderabad.