Sub Registra - Bavla, Ahmedabad V. The Director of Income Tax, (INCI), Ahmedabad

ITA 3323/AHD/2016

• Counselvise Citation: [2018] 112 COUNSELVISE.COM (IT) 5130 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2013-2014
• Appeal Filed On: 09-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B L MEENA
• Assessee Lawyers: PF JAIN
• Keywords: Sale consideration of property below Jantri Value; TDS
• Section: 273B; 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENC H (BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER & SHRI WASEEM AHMED, ACCOUNTANT MEMBER) ITA. NO: 3323/AHD/2016 (ASSESSMENT YEAR: 2013-14) SUB REGISTRAR- BAVLA MAMLATDAR OFFICE COMPOUND, TAL. BAVLA, AHMEDABAD-382325 V/S DIRECTOR OF INCOME TAX (I&CI) ROOM NO. 8. GROUND FLOOR, AAYKAR BHAVAN, AHMEDABAD (APPELLANT) (RESPONDENT) PAN: ABXPP2150Q APPELLANT BY : SHRI P. F. JAIN, AR RESPONDENT BY : SHRI B. L. MEENA, SR. D.R. ( )/ ORDER DATE OF HEARING : 17 -09-201 8 DATE OF PRONOUNCEMENT : 28-09-2018 PER MAHAVIR PRASAD, JUDICIAL MEMBER 1. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. DIT(I&CI), AHMEDABAD DATED 26.10.2016 PERTAINING TO A.Y. 2012- 13 AND FOLLOWING GROUND HAS BEEN TAKEN: ITA NO. 3323 /AHD/2016 . A.Y. 2012-13 2 1. THE LD. DIT(I&CI) HAS ERRED IN LAW AND ON FACTS IN LEVYING PENALTY OF RS. 1,15,100/- U/S. 271FA WITHOUT PROPERLY CONSIDERING AND APPRECIATING THE FACTS OF THE CASE. 2. BRIEFLY STATED THE FACTS OF THE CASE ARE DIRECTOR O F INCOME TAX WAS IN RECEIPT OF INFORMATION REPORTED THREE HIGH VALUE PROPERTY TRAN SACTIONS IN THE AIR FOR FINANCIAL YEAR 2012-13, OUT OF WHICH TWO WERE UNDER THE JURISDICTION OF SUB REGISTRAR, BAVLA. LETTER DATED 08.04.2016 WAS ISSUE D TO THE SUB REGISTRAR BAVLA TO RECTIFY THE AIR BY 26.04.2016, FAILING WHICH PEN ALTY WOULD BE IMPOSABLE. 3. IN THE REPLY OF THE NOTICE, SUB REGISTRAR, BAVLA SU BMITTED COPIES OF THE TWO REGISTRATION DEEDS AND CLAIMED THAT THE TRANSACTION S, PERTAINING TO DEVELOPMENTAL AGREEMENT, WERE NOT REPORTABLE U/S. 2 85BA OF THE INCOME TAX ACT. 4. BUT LD. DIT(I&CI) WAS NOT SPECIFIED WITH THE REPLY OF THE SUB REGISTRAR, BAVLA. THUS, WITH FOLLOWING OBSERVATIONS: THESE ARE CASES WHERE THE LAND OWNER HAS GIVEN 'IRR EVOCABLE LICENSE' AND AUTHORITY TO THE DEVELOPER (PACIFICA DEVELOPERS) AND ITS REPRESENTAT IVES TO ENTER THE LAND, AND HAS ALSO HANDED OVER TO THEM ALL THE TITLE DEEDS AND ORIGINA L DOCUMENTS IN RELATION TO THE LAND. CLAUSE II OF THE AGREEMENTS STATES THAT THE DEVELOP ER, AT ITS SOLE DISCRETION, AND WITHOUT ANY CONSENT OR REFERENCE OF THE LAND OWNER FOR THE CONSTRUCTION OR DEVELOPMENT OF THE SAID PROJECT, SHALL PURCHASE ALL SUCH NECESSARY THI NGS, MATERIALS ETC. UNDER SUCH TERMS AND CONDITIONS TO BE DECIDED BY THE DEVELOPER. THE DEVE LOPER SHALL ALSO MAKE RULES AND REGULATIONS FOR BETTER ADMINISTRATION AND MAINTENAN CE OF THE COMMON AREAS AND SUCH RULES SHALL BE BINDING ON THE INTENDING PURCHASERS AND TH E EXISTING MEMBERS HAVING OWNERSHIP OF THE PLOT IN THE SAID PROJECT. THE AGREEMENTS SPECIF ICALLY STATE THAT THE LAND OWNERS UNDERTAKE THAT THEY SHALL NOT ENTER INTO ANY OTHER AGREEMENT IN RELATION TO THE SAID LAND IN FAVOUR OF ANY PERSON OTHER THAN THE DEVELOPER, AND SHALL ALSO NOT ASSIGN THE WORK TO ANY OTHER PERSON WHICH AFFECTS THE PROJECT. IT WOULD BE EVIDENT FROM THE ABOVE THAT FOR ALL PRACTICAL PURPOSES, RIGHTS OVER THE SAID PLOTS OF L AND HAVE BEEN IRREVOCABLY TRANSFERRED TO THE DEVELOPER. A SPECIFIC CLAUSE IN THE AGREEMENTS STATE S THAT UNTIL THE SALE OF ALL THE UNITS TO BE CONSTRUCTED BY THE DEVELOPER UNDER THE DEVELOPME NT AGREEMENT, THE POSSESSION OF LAND TOGETHER WITH CONSTRUCTION MADE IN THE PROJECT, SHA LL BE MAINTAINED WITH THE DEVELOPERS. THEREFORE, A MERE STATEMENT IN THE AGREEMENTS STATI NG THAT THIS TRANSACTION WILL NOT BE TREATED AS SALE U/S 56-A OF THE TRANSFER OF PROPERTY ACT, DOES NOT HAVE ANY SIGNIFICANCE. WHAT IS INTERESTING TO NOTE IS THAT THE AGREEMENTS ALSO ENVISAGE TRANSFER OF MONEY, ITA NO. 3323 /AHD/2016 . A.Y. 2012-13 3 INCLUDING PAYMENT OF RS. 32,71,43,2007- AND RS.2,11 ,26,860/- FOR THE TWO DIFFERENT AGREEMENTS BY THE LAND OWNERS BY WAY OF STAMP DUTY, WHICH IS PAYABLE ONLY AT THE TIME 'TRANSFER'. THE DEVELOPER HAS ALSO PAID AN AMOUNT O F RS.7,20,28,000/- AND RS.29,72,000/-RESPECTIVELY, TO THE LAND-OWNERS, PUR PORTEDLY FOR GAINING ENTRY AND FOR DEVELOPMENT OF THE LAND. 4. IN VIEW OF THE ABOVE, THE TRANSACTIONS MADE BY W AY OF DEVELOPMENT AGREEMENT ARE COVERED WITHIN THE MEANING OF 'SPECIFIED FINANCIAL TRANSACT ION' FOR THE PURPOSES OF SUB-SECTION (3) OF SECTION 285BA WHICH, INTER-ALIA, INCLUDES ANY TRANSA CTION OF SALE, OR OF TRANSFER OF RIGHT OR INTEREST IN A PROPERTY, OR ANY TRANSACTION FOR REND ERING ANY SERVICE. 5. AGAINST THE AFORESAID BACKDROP, I HOLD THAT AIR W AS REQUIRED TO BE FILED IN RESPECT OF THE TRANSACTIONS CONDUCTED W.R.T. BOTH THE DEVELOPM ENT AGREEMENTS. SINCE THE SRO CONCERNED HAS DEFAULTED IN FILING THE AIR IN RESPECT OF BOTH THE AGREEMENTS, WHICH WERE DUE TO BE FILED ON 31-08-2013, PENALTY U/S. 271FA IS LEV IED @ RS.100 PER DAY FOR A TOTAL OF 1151 DAYS (01/09/2013 TO 25/10/2016). THE PENAL AMOUNT WORKS OUT TO RS.1,15,100/- . 5. HE LEVIED THE PENALTY OF RS. 1,15,100/-. 6. WE HAVE GONE THROUGH THE RELEVANT RECORD AND IMPUGN ED ORDER. IN THIS CASE, ASSESSEE IS WORKING AS A SUB-REGISTRAR WITH THE GOV T. OF GUJARAT. HIS JOB IS TO REGISTER DOCUMENT PERTAINING TO MOVEABLE OR IMMOVAB LE PROPERTY. IN THIS CASE, TWO OF THE DEVELOPER AGREEMENTS WERE NOT SUBMITTED TO THE INCOME TAX AUTHORITIES FOR WHICH PENALTY WAS LEVIED BY THE INC OME TAX DEPARTMENT. APPELLANTS CONTENTION IS THAT AS PER OFFICE MEMORA NDUM OF DATED 10 MAY, 2007 SUB-REGISTRAR IS SUPPOSED TO SEND THE DETAILS PERTAINING TO PURCHASE OR SALE BY ANY PERSON OF IMMOVABLE PROPERTY VALUED AT RS. 3 0 LACS OR MORE AND ACCORDING TO APPELLANT THESE TWO AGREEMENTS WERE NO T WITH REGARD TO SALE AND PURCHASE. ON THE OTHER HAND, REVENUE STAND WAS THAT AS PER SECTION 271FA SUB-REGISTRAR IS DUTY BOUND TO SEND STATEMENT OF FI NANCIAL TRANSACTION OR REPORTABLE ACCOUNT. 7. LD. A.R. ALSO CITED JUDGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT (TDS) VS. ARK CORPORATION, IT IS HELD: ITA NO. 3323 /AHD/2016 . A.Y. 2012-13 4 PENALTY UNDER S. 272A(2)(G)-LEVIABILITY-DELAY IN ISS UING TDS CERTIFICATES-FOR A MERE TECHNICAL DEFAULT OF DELAY IN ISSUING TDS CER TIFICATES, THERE IS HARDLY ANY REASON TO LEVY PENALTY UNDER S. 272A(2)(G) RE VENUE CANNOT BE ALLOWED TO IMPOSE PENALTY ONLY BECAUSE IT HAS POWER TO DO SO W ITHOUT EXERCISING THE DISCRETION IN A JUDICIAL MANNER- HINDUSTAN STEEL LT D. VS. STATE OF ORISSA (1972) 83 ITR 26 (SC) RELIED ON 8. IN THIS CASE, OFFICE MEMORANDUM OF MINISTRY OF FINA NCE, DEPARTMENT OF REVENUE DATED 10 MAY, 2007 SUPPORT THE CONTENTION O F THE APPELLANT AS WELL AS RULE 114E OF INCOME TAX RULES 1962 ALSO SUPPORTS CO NTENTION OF THE APPELLANT WHICH SAYS ANY PURCHASE OR SALE BY ANY PERSON OF IM MOVABLE PROPERTY FOR AN AMOUNT OF RS. 30 LAKHS OR MORE OR VALUED BY THE STA MP AUTHORITY REFERRED TO IN SECTION 50C OF THE ACT AT RS. 30 LAKHS OR MORE, SAME TO BE REPORTED TO THE REVENUE AUTHORITY. IN OUR CONSIDERED OPINION, A BEN EFIT OF SECTION 273B CAN BE GIVEN TO THE APPELLANT. 9. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN OPEN COURT ON 28 - 09- 2018 SD/- SD/- (WASEEM AHMED) (MAHAVIR PRASAD) ACCOUNTANT MEMBER TRUE COPY JUDICIAL MEMBER AHMEDABAD: DATED 28/09/2018 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD