T.Kanniya Rani, CHENNAI V. ITO, CHENNAI

ITA 3357/CHNY/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5742 (ITAT-CHENNAI)
• Duration Of Justice: 11 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 05-06-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 15-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR S GANESAN
• Assessee Lawyers: S SRIDHAR
• Keywords: Sale consideration of property below Jantri Value; Capital asset

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: CHENNAI . , ' , % & BEFORE SHRI ABRAHAM P.GEORGE, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER ./ ITA NO.3357/MDS/2016 %' ' /ASSESSMENT YEAR: 2010-11 SMT. T.KANNIYA RANI, NO.6, FIRST LINK STREET, CIT COLONY, MYLAPORE, CHENNAI-600 004. VS. THE INCOME TAX OFFICER, NON-CORPORATE WARD-1(4), CHENNAI-600 034. [PAN: AFMPK 7216 H ] ( ( /APPELLANT) ( )*( /RESPONDENT) ./ ITA NO.3358/MDS/2016 %' ' /ASSESSMENT YEAR: 2010-11 SMT. AMUDHA ANANDH, NO.4, FIRST LINK STREET, CIT COLONY, MYLAPORE, CHENNAI-600 004. VS. THE INCOME TAX OFFICER, NON-CORPORATE WARD-1(1), CHENNAI-600 034. [PAN: AABPA 2471 Q ] ( ( /APPELLANT) ( )*( /RESPONDENT) ASSESSEE BY : MR.S.SRIDHAR, ADV. DEPARTMENT BY : DR.S.GANESAN, JCIT , /DATE OF HEARING : 05.12.2017 , /DATE OF PRONOUNCEMENT : 06.12.2017 ITA NOS.3357 & 3358/MDS/2016 :- 2 -: / O R D E R PER GEORGE MATHAN , JUDICIAL MEMBER : ITA NO.3357/MDS/2016 IS AN APPEAL FILED BY THE ASS ESSEE SMT.T.KANNIYA RANI AGAINST THE ORDER OF THE COMMISS IONER OF INCOME TAX (APPEALS)-2, CHENNAI, IN ITA NO.67/CIT(A)-2/2015-16 DATED 30.09.2016 FOR THE AY 2010-11 AND ITA NO.3358/MDS/2016 IS AN A PPEAL FILED BY THE ASSESSEE SMT.AMUDHA ANANDH AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-2, CHENNAI, IN ITA NO.68/CIT(A )-2/2015-16 DATED 30.09.2016 FOR THE AY 2010-11 2. DR.S.GANESAN, JCIT, REPRESENTED ON BEHALF OF THE REVENUE AND SHRI S.SRIDHAR, ADV., REPRESENTED ON BEHALF OF THE ASSES SEES. 3. AS THE ASSESSEES IN BOTH THE APPEALS ARE INTERCO NNECTED, BOTH THE APPEALS ARE DISPOSED OFF BY THIS COMMON ORDER. 4. IT WAS SUBMITTED BY THE LD.AR THAT THE TWO ASSES SEES HAD BY TWO SEPARATE PURCHASE DOCUMENTS DATED 04.09.1986 HAD PU RCHASED 11 GROUNDS AND 653 SQ.FT. (TOTALLY 27,053 SQ.FT.) OF T HE LAND AT TANK BUNK ROAD, NUNGAMBAKKAM, CHENNAI. THE ASSESSEES HAD VID E JOINT SALE DEED SOLD THE SAID PART OF THE LAND TO MR.S.PALANICHAMY VIDE SALE DEED DATED 17.09.2009. ON AN EARLIER OCCASION, BOTH THE ASSESS EES HAD EXECUTED AN IRREVOCABLE REGISTERED POWER OF ATTORNEY DATED 14.0 9.1990 REGISTERED WITH THE SUB-REGISTRAR ON 17.09.1990 GRANTING IRREVOCABL E POWER OF ATTORNEY ITA NOS.3357 & 3358/MDS/2016 :- 3 -: TO SHRI S.PALANICHAMY. THE ASSESSEES HAD DISCLOSED THE CAPITAL GAINS IN RESPECT OF THE TRANSFER OF THE SAID LAND WHEN FILIN G THEIR RETURN OF INCOMES FOR THE AY 2002-03 WHICH IS SHOWN AT PAGE NOS.55 & 58 OF THE PAPER BOOK. THE SAID 27,053 SQ.FT. OF THE LAND WAS SOLD A S FOLLOWS: 1. 12,746 SQ.FT. OF THE LAND WAS SOLD EARLIER. 2. THE BALANCE OF 14,307 SQ.FT. OF THE LAND WAS SOLD F OR A CONSIDERATION OF RS.23,88,036/- AND THE CAPITAL GAI NS OFFERED DURING THE AY 2002-03. 5. THE RETURNS FILED BY THE ASSESSEES SMT.AMUDHA AN ANDH IS ON 22.07.2002 AND IN THE CASE OF SMT.T.KANNIYA RANI IS ON 30.07.2002. THE RETURNS FILED WERE PROCESSED AND AN INTIMATION WAS ISSUED U/S.143(1) DATED 05.02.2003 IN THE CASE OF SMT.T.KANNIYA RANI, IN THE CASE OF SMT.AMUDHA ANANDH, THE RETURN WAS PROCESSED U/S.143 (1) AND THE SAME WAS ALSO SUBJECT TO MATTER OF RECTIFICATION APPLICA TION U/S.154 DATED 15.02.2005. IT WAS A SUBMISSION THAT IN THE RECTIFI CATION APPLICATION THE CAPITAL LOSS DECLARED BY THE ASSESSEE ON ACCOUNT OF THE TRANSFER OF THE 14,307 SQ.FT. OF THE LAND HAS ALSO BEEN RECOGNIZED. IT WAS A SUBMISSION THAT AS THE 12,746 SQ.FT. WHICH WAS EARLIER SOLD, H AD BEEN CONSTRUCTED AND THE RESIDENTS OF THE SAID FLATS HAD DEMANDED RIGHT OF WAY OUT OF THE BALANCE OF 14306 SQ.FT., 3327 SQ.FT. OF PATH WAY HA D BEEN GIVEN AND THE BALANCE OF 10,979 SQ.FT. HAD BEEN REGISTERED IN THE NAME OF SHRI S.PALANICHAMY VIDE SALE DEED DATED 17.09.2009. THE LD.AR DREW OUR ATTENTION TO THE COPY OF THE SALE DEED EXECUTED ON 17.09.2009 WHEREIN THE DETAILS OF THE TOTAL LAND HOLDINGS AND THE BREA K UP ARE FULLY EXTRACTED. IT WAS A SUBMISSION THAT THE AO ON THE GROUND THAT THE SALE HAD BEEN ITA NOS.3357 & 3358/MDS/2016 :- 4 -: REGISTERED IN 2009 BROUGHT TO TAX, THE CAPITAL GAIN S ON TRANSFER OF THE 14,307 SQ.FT. OF THE LAND BY APPLYING THE PROVISION S OF SEC.50C OF THE ACT. IT WAS A SUBMISSION THAT THE PROPERTY HAVING ALREAD Y BEEN TRANSFERRED BY A REGISTERED POWER OF ATTORNEY AND POSSESSION IN RE SPECT OF THE SAID LAND HAVING BEEN HANDED OVER TO SHRI S.PALANICHAMY THROU GH THE REGISTERED IRREVOCABLE POWER OF ATTORNEY, THE CAPITAL GAINS WA S NOT LIABLE TO BE ASSESSED FOR THE AY 2010-11. IT WAS ALSO A SUBMISS ION THAT AS THE CAPITAL GAINS IN RESPECT OF THE TRANSFER OF THE PORTION OF THE LAND HAD ALREADY BEEN OFFERED DURING THE AY 2002-03 AND THE SAME HAVING B EEN ACCEPTED, THE SAME TRANSACTION COULD NOT BE TAXED AGAIN IN THE AY 2010-11, JUST BECAUSE, THE SALE DEED WAS REGISTERED ONLY DURING T HE SAID ASSESSMENT YEAR. THE LD.AR PLACED RELIANCE ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF SHRI BALBIR SINGH MAINI IN CIV IL APPEAL NO.15619 OF 2017 DATED 04.10.2017 WHEREIN IT HAS BEEN HELD THAT U/S.53A OF THE TRANSFER OF PROPERTY ACT ONCE IRREVOCABLE POWER OF ATTORNEY STANDS REGISTERED AND THE POSSESSION HAD BEEN HANDED OVER AND THE CONSIDERATION RECEIVED, THEN THE TRANSFER SHOULD BE COMPLETED. IT WAS A SUBMISSION THAT IN THE PRESENT CASE, THE TRANSFER W AS BY REGISTERED POWER OF ATTORNEY, THE POSSESSION OF THE PROPERTY HAD ALR EADY BEEN HANDED OVER TO SHRI S.PALANICHAMY AND THE CONSIDERATION HAD ALR EADY BEEN RECEIVED AND THE SAME HAD ALSO BEEN OFFERED FOR CAPITAL GAIN S TAX DURING THE AY 2002-03 AND THE SAME HAD ALREADY BEEN ACCEPTED. IT WAS A SUBMISSION THAT THE LEVY OF CAPITAL GAINS BY THE AO IN RESPECT OF THE SAME TRANSACTION FOR THE IMPUGNED ASSESSMENT YEAR WAS LIABLE TO BE D ELETED. ITA NOS.3357 & 3358/MDS/2016 :- 5 -: 6. IN REPLY, THE LD.DR VEHEMENTLY SUPPORTED THE ORD ER OF THE AO AND THE LD.CIT(A). 7. A PERUSAL OF THE ASSESSMENT ORDER SHOWS THAT THE AO HAS BROUGHT TO TAX THE CAPITAL GAINS IN RESPECT OF THE TRANSFER OF THE 14,307 SQ.FT. OF THE LAND BY APPLYING THE PROVISIONS OF SEC.50C FOR THE AY 2010-11 ON THE MAIN GROUND THAT THE ASSESSEE HAD NOT BEEN ABLE TO PRODUCE ANY DOCUMENTARY EVIDENCE, ANY PROOF OF THE TRANSACTION CLAIMED, TO HAVE TAKEN PLACE DURING THE YEAR 2002. A PERUSAL OF THE ORDER OF THE LD.CIT(A) SHOWS THAT THE LD.CIT(A) HAS HELD THAT THE ASSESSEE S DID NOT RELEASE THE RIGHTS OVER THE LAND ADMEASURING 14,307 SQ.FT. OF T HE LAND IN MARCH, 2002. THE LD.CIT(A) HAS TAKEN RECOURSE TO THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE APPEAL FILED BY TH E ASSESSEES IN OS NO.570 OF 1998 DATED 11.12.2003 WHEREIN THE HONBLE JURISD ICTIONAL HIGH COURT HAS HELD THAT BOTH THE ASSESSEES ARE ENTITLED FOR S EPARATE POSSESSION OF 14,307 SQ.FT. OF THE LAND. HOWEVER, THE AO & THE L D.CIT(A), IT IS NOTICED THAT HAS FAILED TO TAKE INTO CONSIDERATION, THE FAC T THAT THE REGISTERED IRREVOCABLE POWER OF ATTORNEY HAS BEEN EXECUTED BY BOTH THE ASSESSEES IN FAVOUR OF SHRI S.PALANICHAMY AND THE POSSESSION IN RESPECT OF THE SAID LAND HAS BEEN HANDED OVER TO SHRI S.PALANICHAMY AND THE ASSESSEES HAD RECEIVED THE CONSIDERATION AND HAD OFFERED THE SAME TO TAX DURING THE YEAR 2002. THIS BEING SO, IN VIEW OF THE PRINCIPLE S LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF SHRI BALBIR SI NGH MAINI REFERRED TO SUPRA, IT IS HELD THAT THE CAPITAL GAINS, IF ANY, I N RESPECT OF THE TRANSFER OF ITA NOS.3357 & 3358/MDS/2016 :- 6 -: THE 14,307 SQ.FT. OF THE LAND IS ASSESSABLE ONLY DU RING THE YEAR 2002 AS HAS BEEN RIGHTLY DISCLOSED BY THE ASSESSEE IN THEIR RETURNS FOR THE AY 2002-03. EVEN OTHERWISE, A PERUSAL OF THE PROVISO TO SEC.50C(1) INSERTED BY FINANCE ACT 2016 W.E.F. 01.04.2017 CLEARLY ADMIT S THAT THE PROVISIONS OF SEC.50C ARE NOT TO APPLY IN THE EVENT THAT THE D ATE OF AGREEMENT FIXING THE AMOUNT OF CONSIDERATION AND THE DATE OF REGISTR ATION FOR TRANSFER OF THE CAPITAL ASSET ARE NOT THE SAME, THEN THE VALUE ADOP TED OR ASSESSED OR ASSESSABLE BY STAMP VALUATION AUTHORITY ON THE DATE OF AGREEMENT, MAY BE TAKEN FOR THE PURPOSE OF COMPUTING THE FULL VALU E OF THE CONSIDERATION OF SUCH TRANSFER SUBJECT TO CONDITIONS. IN THE PRE SENT CASE, ADMITTEDLY, THE POWER OF ATTORNEY IS CONSIDERED AS THE AGREEMEN T AND THE SALE DEED EXECUTED ARE IN TWO DIFFERENT ASSESSMENT YEARS AND THE CONSIDERATION HAVING ALREADY BEEN RECEIVED BY THE ASSESSEE ON THE EXECUTION OF THE IRREVOCABLE REGISTERED POWER OF ATTORNEY AND THE SA ME HAVING BEEN OFFERED TO TAX DURING THE AY 2002-03, THE PROVISION S OF SEC.50C ITSELF CANNOT BE BROUGHT TO PLAY IN THE CASE OF THE ASSESS EES. 7. IN THE RESULT, THE APPEALS FILED BY BOTH THE AS SESSEES ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON DECEMBER 06, 2017, AT CHENNAI. SD/- SD/- ( . ) ( ABRAHAM P GEORGE ) /ACCOUNTANT MEMBER ( ' ) (GEORGE MATHAN) % /JUDICIAL MEMBER ITA NOS.3357 & 3358/MDS/2016 :- 7 -: /CHENNAI, 1 /DATED: DECEMBER 06, 2017. TLN , )%23 43 /COPY TO: 1. ( /APPELLANT 4. 5 /CIT 2. )*( /RESPONDENT 5. 3 )%% /DR 3. 5 ( ) /CIT(A) 6. ' /GF