Shri Mohd. Afzal, Ghaziabad V. ITO, Ghaziabad

ITA 3272/DEL/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3938 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-11-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 24-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KOUSHLENDRA TEWARI
• Assessee Lawyers: SANJAY PARASHAR
• Keywords: Capital asset; Additional evidence
• Section: 54F; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES SMC : DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA.NO.3272/DEL./2017 ASSESSMENT YEAR 2010-2011 SHRI MOHD. AFZAL VILLAGE BISOKHAR, MODINAGAR DIST. GHAZIABAD (U.P.) PAN AAWPA7653D VS. THE INCOME TAX OFFICER, WARD-1(5), CGO COMPLEX, 1 ST HAPUR CHUNGI, GHAZIABAD. (U.P.) 201 002. (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI ANOOP SHARMA, ADVOCATE & SHRI SANJAY PARASHAR, ADVOCATE FOR REVENUE : SHRI KOUSHLENDRA TEWARI, SR. DR DATE OF HEARING : 02.11.2017 DATE OF PRONOUNCEMENT : 0 3 .11.2017 ORDER THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF THE LD. CIT(A), GHAZIABAD, DATED 10 TH MARCH, 2017, FOR THE A.Y. 2010-2011. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT ASSESSEE FILED RETURN OF INCOME ON 11 TH FEBRUARY, 2011 DECLARING INCOME OF RS.1,65,540. THE ASSESSEE DID NOT COMPLY WITH THE STATUTORY NOTI CES. THEREFORE, EX-PARTE ASSESSMENT ORDER UNDER SECTION 144 WAS PAS SED. THE A.O. NOTED ON THE BASIS OF THE FACTS AND MATERIAL ON REC ORD THAT DURING 2 ITA.NO.3272/DEL./2017 SHRI MOHD AFZAL, GHAZIABAD. ASSESSMENT YEAR UNDER APPEAL, THE ASSESSEE SOLD IMM OVABLE PROPERTY OF RS.44,28,000 JOINTLY WITH HIS BROTHER SHRI MOINU DDIN ON 1 ST APRIL, 2009 TO SHRI RAJENDRA KUMAR SHARMA THROUGH POWER OF ATTORNEY. THE ASSESSEES SHARE IN THE PROPERTY SOLD IS 50% WH ICH WORKS-OUT TO RS.22,14,000. THE A.O. HAD TAKEN COST OF ACQUISITIO N AT NIL AND MADE ADDITION OF RS.22,14,000. 2.1. THE ASSESSEE CHALLENGED THE ADDITION BEFORE L D. CIT(A) AND IT WAS CONTENDED THAT ASSESSEE WAS ONLY POWER OF AT TORNEY HOLDER OF SHRI ABDUL AZIZ ALONG WITH HIS BROTHER SHRI MOINUDD IN FOR SIGNING THE SALE DEED. COPY OF THE POWER OF ATTORNEY AND SALE D EED SHOWS THAT ASSESSEE WAS NOT OWNER OF THE PROPERTY. A REMAND RE PORT FROM THE A.O. WAS CALLED FOR ON THE ADDITIONAL EVIDENCE. THE A.O. IN THE REMAND REPORT REITERATED THE EX-PARTE ORDER PASSED. HOWEVE R, HE DID NOT DISPUTE THAT ASSESSEE WAS ONLY POWER OF ATTORNEY HO LDER OF SHRI ABDUL AZIZ ALONG WITH HIS BROTHER SHRI MOINUDDIN FOR SIGN ING THE SALE DEED. FURTHER, IT WAS STATED THAT ASSESSEE FAILED TO MENT ION THIS FACT AT THE ASSESSMENT STAGE AND THAT THIS FACT IS NOT MENTIONE D IN THE SALE DEED. IT IS ALSO STATED THAT CONSIDERATION HAS BEEN RECEIVED BY THE ASSESSEE AND HIS BROTHER. THEREFORE, PRAYER WAS MAD E TO DISMISS THE 3 ITA.NO.3272/DEL./2017 SHRI MOHD AFZAL, GHAZIABAD. APPEAL OF ASSESSEE. THE ASSESSEE IN THE REJOINDER A LSO SUBMITTED THAT THE ASSESSMENT ORDER IN THE CASE OF HIS BROTHER SHR I MOINUDDIN HAS BEEN PASSED VIDE ORDER DATED 25 TH FEBRUARY, 2014 UNDER SECTION 147/143(3) FOR A.Y. 2010-2011 IN WHICH ON THE SAME ISSUE THE A.O. HAS ALLOWED DEDUCTION UNDER SECTION 54F OF THE I.T. ACT AND NO ADDITION ON ACCOUNT OF CAPITAL GAINS HAVE BEEN MADE . 2.2. THE LD. CIT(A) NOTED THAT ASSESSEE HAS SUBMIT TED COPY OF THE SALE DEED IN SUPPORT OF THE CONTENTION THAT ASS ESSEE WAS ONLY POWER OF ATTORNEY HOLDER OF SHRI ABDUL AZIZ. AS PER THE REMAND REPORT THE SALE DEED SPECIFICALLY MENTIONED ASSESSEE AND H IS BROTHER SHRI MOINUDDIN AS SELLER. SHRI ABDUL AZIA IS FATHER OF T HE ASSESSEE. THE ASSESSEE DID NOT SUBSTANTIATE THE FACT THAT HE DID NOT RECEIVE PART OF THE SALE CONSIDERATION. FURTHER, THE ASSESSEE DID N OT SUBSTANTIATE THE CLAIM OF BENEFIT UNDER SECTION 54F OF THE I.T. ACT. THE LD. CIT(A) HOWEVER, GIVING BENEFIT OF COST OF INDEXATION PARTL Y ALLOWED THE APPEAL OF ASSESSEE. HOWEVER, THE ASSESSEES CLAIM OF DEDUC TION UNDER SECTION 54F WAS DENIED. 4 ITA.NO.3272/DEL./2017 SHRI MOHD AFZAL, GHAZIABAD. 3. THE ASSESSEE IS IN APPEAL CHALLENGING THE ADDIT ION ON MERIT AS WELL AS CHALLENGING THE DENIAL OF BENEFIT UNDER SECTION 54F OF THE I.T. ACT, 1961. 4. AFTER CONSIDERING THE RIVAL CONTENTIONS, I AM O F THE VIEW THAT ADDITION IS WHOLLY UNJUSTIFIED. THE A.O. EVEN THOUGH PASSED THE EX-PARTE ORDER HAS MENTIONED IN THE ASSESSMENT ORDE R THAT ASSESSEE AND HIS BROTHER SOLD THE PROPERTY THROUGH POWER OF ATTORNEY. PB-7 IS ASSESSMENT ORDER IN THE CASE OF BROTHER OF THE ASSE SSEE SHRI MOINUDDIN FOR ASSESSMENT YEAR UNDER APPEAL I.E., 20 10-2011 DATED 25 TH FEBRUARY, 2014 UNDER SECTION 147/143(3) IN WHICH T HE SAME FACTS HAVE BEEN CONSIDERED FOR SALE OF PROPERTY BY ASSESSEE AND HIS BROTHER. THE A.O. AFTER VERIFYING THE FACT OF INVES TMENT IN THE CONSTRUCTION OF RESIDENTIAL PROPERTY, ALLOWED DEDUC TION UNDER SECTION 54F OF THE I.T. ACT AND DID NOT MAKE ANY ADDITION A GAINST THE ASSESSEE. PB-9 IS THE REGISTERED POWER OF ATTORNEY BY SHRI ABDUL AZIZ, FATHER OF THE ASSESSEE IN FAVOUR OF SHRI MOINUDDIN BROTHER OF ASSESSEE AND ASSESSEE FOR DOING CERTAIN ACTS ON HIS BEHALF A S A POWER OF ATTORNEY HOLDER. PB-15 IS SALE DEED IN QUESTION BY ASSESSEE AND HIS BROTHER SHRI MOINUDDIN AS A POWER OF ATTORNEY HOLDE R OF SHRI ABDUL 5 ITA.NO.3272/DEL./2017 SHRI MOHD AFZAL, GHAZIABAD. AZIZ FOR MAKING THE SALE ON BEHALF OF OWNER OF THE PROPERTY SHRI ABDUL AZIZ. THESE FACTS THEREFORE, CLEARLY PROVE THAT ASS ESSEE WAS ONLY A POWER OF ATTORNEY HOLDER OF THE OWNER OF THE PROPER TY AND HAS ACTED AS A POWER OF ATTORNEY ONLY ON BEHALF OF THE OWNER OF CAPITAL ASSET. THE ASSESSEE MERELY ACTED AS A POWER OF ATTORNEY HO LDER AND NO EVIDENCE HAS BEEN BROUGHT ON RECORD TO PROVE IF ANY CONSIDERATION WAS PAID BY ASSESSEE TO HIS FATHER AT THE TIME OF E XECUTING THE POWER OF ATTORNEY IN FAVOUR OF THE ASSESSEE AND HIS BROTH ER SHRI MOINUDDIN. THEREFORE, POWER OF ATTORNEY HOLDER WOULD NOT BE TR EATED AS OWNER OF THE PROPERTY. THEREFORE, THERE IS NO QUESTION OF CO MPUTING CAPITAL GAINS IN THE HANDS OF THE ASSESSEE. THE LEARNED COU NSEL FOR THE ASSESSEE RELIED UPON AN UN-REPORTED DECISION OF HON BLE MADRAS HIGH COURT IN THE CASE OF CIT VS. SHRI C. SUBUMARAN IN T AX APPEAL NO.840 OF 2014 DATED 03.11.2014 IN WHICH THE TRIBUNAL ON T HE SAME ISSUE WAS OF THE VIEW THAT ASSESSEE COULD NOT BE TREATED AS OWNER OF THE PROPERTY ON THE BASIS OF TRANSFER THROUGH POWER OF ATTORNEY AND NO CAPITAL GAIN WOULD BE COMPUTED IN THE HANDS OF THE ASSESSEE. THE DEPARTMENTAL APPEAL HAS BEEN DISMISSED. IT MAY ALSO BE NOTED HERE THAT ON THE SAME FACTS THE REVENUE DEPARTMENT IN TH E CASE OF BROTHER 6 ITA.NO.3272/DEL./2017 SHRI MOHD AFZAL, GHAZIABAD. OF THE ASSESSEE SHRI MOINUDDIN HAS ALLOWED DEDUCTIO N UNDER SECTION 54F OF THE I.T. ACT AGAINST THE INVESTMENT SO MADE IN CONSTRUCTION OF RESIDENTIAL PROPERTY ALONG WITH HIS BROTHER I.E., A SSESSEE SHRI MOHD. AFZAL. THEREFORE, BY FOLLOWING THE RULE OF CONSISTE NCY, THE DEPARTMENT SHOULD HAVE ALLOWED DEDUCTION UNDER SECTION 54F OF THE I.T. ACT ATLEAST IN FAVOUR OF THE ASSESSEE. ON CONSIDERING T HE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, I AM OF THE VI EW THAT THE AUTHORITIES BELOW WERE WHOLLY UNJUSTIFIED IN MAKING THE ADDITION OF RS.22,14,000 ON ACCOUNT OF CAPITAL GAINS IN THE HAN DS OF THE ASSESSEE. I, ACCORDINGLY, SET ASIDE THE ORDERS OF T HE AUTHORITIES BELOW AND DELETE THE ENTIRE ADDITION. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DELHI, DATED 03 RD NOVEMBER, 2017 VBP/- 7 ITA.NO.3272/DEL./2017 SHRI MOHD AFZAL, GHAZIABAD. COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT SMC BENCH, DELHI 6. GUARD FILE. // BY ORDER // ASST. REGISTRAR : ITAT DELHI BENCHES : DELHI.