Mirza Riyaz Baig, Bhubaneswar V. DCIT,Circle-2(1), Bhubaneswar

ITA 340/CTK/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 1538 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 30-06-2020
• Assessment Year: 2013-2014
• Appeal Filed On: 23-10-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Capital asset; Principle of natural justice; Reason to believe; Capital Gains
• Section: 147; 148

Judgement Text

P A G E 1 | 9 IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE SHRI CHANDRA MOHAN GARG , JUDICIAL MEMBER AND LAXMI PRASAD SAHU, ACCOUNTANT MEMBER ITA NO . 340 /CTK/201 9 ASSESSMENT YEAR : 2013 - 14 MIRZA RIYAZ BAIG, PLOT NO.74, SATYA NAGAR, BHUBANESWAR. VS. DCIT, CIRCLE - 2(1), BHUBANESWAR. PAN/GIR NO. AETPB 6425 R (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI SUNIL MISHRA , AR REVENUE BY : SHRI SUBHENDU DUTTA, DR DATE OF HEARING : 10 / 1 2 / 20 20 DATE OF PRONOUNCEMENT : 14 / 1 2 /20 20 O R D E R PER C.M.GARG,JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) - 1, BHUBANESWAR DATED 28.8.2019 FOR THE ASSESSMENT YEAR 2013 - 14. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(A) HAS ERRED IN NOT QUASHING THE ASSESSMENT ORDER WHICH HAS BEEN PASSED IN GROSS DISREGARD TO THE SETTLED PROVISIONS OF LAW THAT REOPENING U/S 147 OUGHT TO HAVE BEEN MADE AFTER RECORDING REASON TO BELIEVE, BUT NOT REASON TO SUSPECT, BY THE AO REGARDING ESCAPEMENT OF INCOME. 2. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(A) ERRED IN NOT QUASHING THE ASSESSMEN T ORDER AS THERE IS NO MENTION IN THE IMPUGNED ASSESSMENT ORDER REGARDING ITA NO.340/CTK/2019 ASSESSMENT YEAR : 2013 - 14 P A G E 2 | 9 VALID SATISFACTION OF THE RANGE HEAD BEFORE ISSUE OF IMPUGNED NOTICE U/S 148,WHICH LACUNA COULD NOT BE CURED BY THE REVENUE SUBSEQUENTLY EVEN BY FILING AFFIDAVIT. 3. FOR THAT ON TH E FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(A) ERRED IN NOT QUASHING THE NOTICE ISSUED U/S 148 OF THE I.T.ACT DATED 17/18.03.2016 INASMUCH AS NO INCOME HAS ESCAPED ASSESSMENT IN THE HAND OF THE APPELLANT. 4. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(A) HAS ERRED IN NOT DELETING THE ADDITION MADE IN THE HAND OF THE APPELLANT ON ACCOUNT OF LONG TERM CAPITAL GAIN WHEN THE APPELLANT HAS ACTED MERELY AS THE POWER OF ATTORNEY HOLDER OF TH E ACTUAL OWNER OF THE PROPERTY. 5. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(A) HAS ERRED IN NOT DELETING THE ADDITION MADE IN THE HAND OF THE APPELLANT ON ACCOUNT OF LONG TERM CAPITAL GAIN WHEN NO CONSIDERATION WAS PAID BY THE APPELLANT TO THE ACTUAL OWNER OF THE PROPERTY AT THE TIME OF EXECUTION OF THE POWER OF ATTORNEY. 6. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(A) HAS ERRED IN NOT DELETING THE ADDITION MADE IN TH E HAND OF THE APPELLANT ON ACCOUNT OF LONG TERM CAPITAL GAIN WHEN THERE IS NO TRANSFER TO OR ENABLING ENJOYMENT OF PROPERTY IN FAVOUR OF THE APPELLANT IN ANY MANNER. 7. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED C IT(A) HAS ERRED IN NOT DELETING THE ADDITION MADE IN THE HAND OF THE APPELLANT ON ACCOUNT OF LONG TERM CAPITAL GAIN WHEN THE AO HAS FAILED TO ESTABLISH OWNERSHIP RIGHT OF THE APPELLANT IN THE IMPUGNED PROPERTY. 8. FOR THAT ON THE FACTS AND IN THE CIRCU MSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(A) HAS ERRED IN NOT DELETING THE ADDITION MADE IN THE HAND OF THE APPELLANT ON ACCOUNT OF LONG TERM CAPITAL GAIN WHEN NO PROPERTY RIGHT HAS BEEN TRANSFERRED TO THE APPELLANT. 9. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(A) HAS ERRED IN NOT DELETING THE ADDITION MADE IN THE HAND OF THE APPELLANT ON ACCOUNT OF LONG TERM CAPITAL GAIN WHEN THE VALIDITY OF POWER OF ATTORNEY IS NOT UNDER ANY DOUBT. ITA NO.340/CTK/2019 ASSESSMENT YEAR : 2013 - 14 P A G E 3 | 9 10. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(A) HAS ERRED IN NOT DELETING THE ADDITION MADE IN THE HAND OF THE APPELLANT ON ACCOUNT OF LONG TERM CAPITAL GAIN WHEN THE APPELLANT HAS DULY DISCHARGED HIS ONUS AND THE SALE CONSIDERATI ON HAS NOT BEEN APPROPRIATED BY HIM IN ANY MANNER. 11. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(A) HAS ERRED IN NOT DELETING THE ADDITION MADE IN THE HAND OF THE APPELLANT ON ACCOUNT OF LONG TERM CAPITAL GAIN I NASMUCH AS THE AO HAS PASSED THE ASSESSMENT ORDER WITHOUT FOLLOWING THE PRINCIPLES OF NATURAL JUSTICE. 12. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, DELETE OR MODIFY ANY GROUNDS OF APPEAL AT THE TIME OF HEARING. 3. FACTS IN BRIEF ARE THAT THE ASSESSEE I S AN INDIVIDUAL, DERIVES INCOME FROM ORE RAISING CONTRACT. THE ASSESSMENT COMPLETED U/S.143(3) OF THE ACT WAS REOPENED ON THE GROUND THAT ON VERIFICATION OF THE REPORT OF SUB - REGISTRAR, KHURDA/KHANDAGIRI, ODISHA THAT THE ASSESSEE HAS DONE A LAND TRANSACTI ON OF RS.81,71,835/ - AND ASSESSED VALUE OF STAMP DUTY OF RS.52,27,200/ - ON 4.1.2013. THE AO NOTICED THAT THE ASSESSEE HAS NOT SHOWN THE INCOME FROM CAPITAL GAIN FOR THE ASSESSMENT YEAR 2013 - 14, WHICH RESULTED INTO ESCAPEMENT OF INCOME OF CAPITAL GAIN TAX TO THE ASSESSMENT. THEREFORE, THE AO REOPENED THE ASSESSMENT U/S.147 OF THE ACT. ACCORDINGLY, NOTICE U/S.148 OF THE ACT WAS ISSUED TO THE ASSESSEE ON 18.3.2016. IN RESPONSE TO NOTICES, THE ASSESSEE STATED THAT HE IS THE POWER OF ATTORNEY HOLDER OF THE P ROPERTY AND THERE IS NO SUCH FINANCIAL TRANSACTION MADE. THE POWER OF ATTORNEY WAS EXECUTED ON 15.9.2012 BETWEEN PRADEEP SETHY AND MIRZA RIAZ BAIG AND THE SCHEDULED PROPERTY OF P L OT NO.46, TAHESIL NO.244, UNIT NO.32, GOVIND PRASAD, BHUBANESWAR MEASURING 0.096 DCM I.E. ITA NO.340/CTK/2019 ASSESSMENT YEAR : 2013 - 14 P A G E 4 | 9 2380 SQ.FT. IT IS STATED THAT THE SAID PROPERTY WAS TRANSFERRED TO MR SURESH PATRA, JAGAMARA, KHANDAGIRI, BHUBANESWAR BY THE ASSESSEE AS A POWER OF ATTORNEY HOLDER A ND NO FINANCIAL TRANSACTION WAS MADE BY THE OWNER OF THE PROPERTY SHRI PRADEEP SETHY. HOWEVER, ON PERUSAL OF IRREVOCABLE GENERAL POWER OF ATTORNEY ENTERED BETWEEN THE ASSESSEE AND ONE MR PRADEEP KUMAR SETHY THE AO REFERRED TO VARIOUS CLAUSE AND OBSERVE D THAT - CLAUSE - 7 - T O RECEIVE THE AMOUNT FROM THE PURCHASER, MORTGAGE OR ANY OTHER PERSON, AS EARNEST MONEY, CONSIDERATION, LOAN, ADVANCE AND TO GIVE GOOD, VALID RECEIPT AND DISCHARGE FOR THE SAME, WHICH WILL PROTECT SUCH PERSON, INSTITUTION, AUTHORITY OR LEGAL ENTITY FOR ME AND ON MY BEHALF. CLAUSE NO.2, - THE POWER WAS GRANTED TO THE ASSESSEE TO ENTER INTO ANY AGREEMENT FOR SALE, MORTGAGE, BOND AND TO CANCEL AND REPUDIATE THE SAME. CLAUSE - 4, THE ASSESSEE IS THE AUTHORIZED LEGAL ENTITY TO RECEIVE THE AMOUNT FROM THE PURCHASER. CONSIDERING THE ABOVE CLAUSES, THE AO OBSERVED THAT THE ASSESSEE HAS RECEIVED THE SALE CONSIDERATION OF RS.81,71,835/ - FOR THE ABOVE LAND. HENCE, THE CONTENTION OF THE ASSESSEE THAT NO FINANCIAL TRANSACTI ON IN THE TRANSFER OF LAND WAS NOT ACCEPTABLE TO THE AO AND, THEREFORE, AN AMOUNT OF RS.81,71,835/ - WAS ADDED TO THE TAXABLE INCOME OF THE ASSESSEE. 4. ON APPEAL, THE LD CIT(A) UPHELD THE REOPENING OF ASSESSMENT AND CONSEQUENTLY, CONFIRMED THE ADDITION OF RS.81,71,835/ - . 5. HENCE, THE ASSESSEE IS IN APPEAL BEFORE US. 6. LD A.R. OF THE ASSESSEE REITERATED THE SUBMISSIONS MADE IN THE GROUNDS OF APPEAL AND FURTHER SUBMITTED THAT BEFORE REOPENING OF ITA NO.340/CTK/2019 ASSESSMENT YEAR : 2013 - 14 P A G E 5 | 9 ASSESSMENT, NO REASONS WERE RECORDED AND HENCE, SAME IS LIABLE TO BE QUASHED. ON MERITS, FURTHER, HE SUBMITTED THAT THE ASSESSEE HAS ACTED MERELY AS THE POWER OF ATTORNEY HOLDER OF THE ACTUAL OWNER OF THE PROPERTY AND NO CONSIDERATION WAS RECEIVED BY HIM. LD A.R. OF THE ASSESSEE RELIED ON THE DECISION OF ITAT JAIPU R BENCHES IN THE CASE OF SHRI GYAN CHAND AGARWAL VS ACIT IN ITA NO.266/JP/2017 AY: 2010 - 2011 ORDER DATED 10.7.2017, WHEREIN, ON SIMILAR FACTS, THE TRIBUNAL HAS DIRECTED TO DELETE THE ADDITION WITH THE LIBERTY TO TAKE ACTION AGAINST REAL OWNERS AS PER LAW. HENCE, HIS PRAYER WAS THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE. LD A.R. ALSO RELIED ON THE DECISION OF HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS C.SUGUMARAN IN TAX APPEAL NO.840 OF 2014 AND ALSO THE DECISION OF ITAT JAIPUR IN THE CASE OF SURAJ NARAIN VS ITO IN ITA NO.1043/JP/2011 IN SUPPORT OF HIS CLAIM. 7. REPLYING TO ABOVE, LD SR DR SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RECORD OF THE CASE. UNDISPUTEDLY, IN THIS CASE, THE ASSESSEE IS THE POWER OF ATTORNEY AND SIGNED THE DOCUMENT ON BEHALF OF THE OWNER OF THE LAND BUT CLAIMED THAT NO CONSIDERATION WAS RECEIVED BY HIM. BU T AS PER THE AO, IN THE CLAUSE OF THE AGREEMENT, IT IS CLEAR THAT THE POWER OF ATTORNEY HOLDER WILL RECEIVE THE SALE CONSIDERATION IN RESPECT OF TRANSFER/SALE OF THE LAND. SINCE IN THE ORIGINAL ITA NO.340/CTK/2019 ASSESSMENT YEAR : 2013 - 14 P A G E 6 | 9 ASSESSMENT, THIS WAS NOT DISCUSSED, THE AO REOPENED THE ASSE SSMENT ON THE GROUND THAT INCOME HAS ESCAPED ASSESSMENT. 9. NOW BEFORE US, THE ONLY ISSUE REQUIRED TO BE ADJUDICATED IS THAT WHETHER THE SALE CONSIDERATION OF THE LAND BELONGING TO SHRI PRADEEP KUMAR SETHY WILL BE TAXED IN THE HANDS OF THE ASSESSEE WHO IS ONLY A POWER OF ATTORNEY HOLDER. THE AO HAS OBSERVED THAT THE ASSESSEE HAS FAILED TO SUBSTANTIATE HIS CLAIM WITH ANY LEGALLY ADMISSIBLE EVIDENCE THAT HE HAS NOT RECEIVED ANY CONSIDERATION WITH REGARD TO TRANSFER OF LAND. IT IS NOT IN DISPUTE THAT THE AS SESSEE BEING THE POWER OF ATTORNEY HOLDER HAS EXECUTED THE SALE DEED BEFORE THE SUB - REGISTRAR, KHURDA AND ACTED AS AN AGENT OF THE OWNER OF THE LAND. NOTHING WAS BROUGHT ON RECORD BY THE LD D.R. TO SUBSTANTIATE THAT THE ASSESSEE HAS RECEIVED THE SALE CON SIDERATION, WHICH HAS NOT BEEN DECLARED AS INCOME OF THE ASSESSEE. 10. WE FIND THAT THE JAIPUR BENCH OF THE TRIBUNAL IN THE CASE OF SHRI GYAN CHAND AGARWAL (SUPRA) AFTER DEALING WITH THE DECISION OF HONBLE MADRAS HIGH COURT IN THE CASE OF C. SUGUMARAN (S UPRA) AND THE DECISION OF ITAT JAIPUR BENCH IN THE CASE OF SURA J NARAIN (SUPRA) HAS HELD AS UNDER: .. DURING THE COURSE OF HEARING LD. COUNSEL FOR THE ASSESSEE HAS PLACED RELIANCE ON THE JUDGMENT OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF COMMISSIO NER OF INCOME TAX VS. C. SUGUMARAN, DATED 3/11/2014 IN TAX CASE (APPEAL) NO. 840 OF 2014. THE HONBLE HIGH COURT, UNDER THE IDENTICAL FACTS DECIDED THE ISSUE OF TAX LIABILITY QUA THE ATTORNEY HOLDER AS UNDER: - 12. WE, THEREFORE, NOW PROCEED TO ANALYSE THE MEANING BEHIND CIRCULAR NO. 495 DATED 22.9.1987. THE INTERPRETATION OF THE CIRCULAR AS PUT FORWARD BY SRI T. RAVIKUMAR, LD. STANDING COUNSEL APPEARING FOR THE REVENUE, WE ARE NOT IN AGREEMENT. THE PROVISIONS OF SUB - CLAUSE (VI) OF SECTION 2(47) OF THE INCOME TAX ACT MAKE IT CLEAR THAT ITA NO.340/CTK/2019 ASSESSMENT YEAR : 2013 - 14 P A G E 7 | 9 THE TRANSACTION, WHICH HAS THE EFFECT OF TRANSFERRING OR ENABLING THE ENJOYMENT OF IMMOVABLE PROPERTY ALONE WOULD COME WITHIN THE AMBIT OF TRANSFER. THE CIRCULAR READS SOMETHING M ORE INTO THE PROVISIONS. WE ARE NOT INCLINED TO ACCEPT SUCH AN INTERPRETATION. THE CIRCULAR ALSO STATES THAT THE LEGAL OWNERSHIP WOULD CONTINUE WITH THE TRANSFEROR, BUT THE PROPERTY RIGHTS IT IS TRANSFERRED BY WAY OF POWER OF. ATTORNEY WOULD COME WITHIN TH E AMBIT OF SUB - CLAUSE (VI) OF SECTION 2(47) OF THE INCOME TAX ACT. ASSUMING WE ACCEPT THE INTENTION BEHIND THE CIRCULAR, THEN THERE SHOULD BE AN ELEMENT OF TRANSFER OR ENABLING ENJOYING OF PROPERTY RIGHT A STATED IN PARAGRAPH 11.2 OF THE CIRCULAR BY THE PO WER OF ATTORNEY HOLDER. 13. WE FIND NO SUCH RECITAL IN THE POWER OF ATTORNEY AS EXTRACTED BY THE TRIBUNAL AND REFERRED TO BY US. ON THE CONTRARY, THE TERMS OF THE POWER OF ATTORNEY CLEARLY SHOW THAT PROPERTY RIGHTS HAS NOT BEEN TRANSFERRED TO THE POWER O F ATTORNEY HOLDER AND THERE IS ALSO NO PROVISION FOR ENABLING ENJOYMENT. IT IS NOT THE CASE OF THE DEPARTMENT THAT THE POWER OF ATTORNEY IS SHAM. IF THEY ACCEPT THE POWER OF ATTORNEY IS VALID, THEN THE PLEA OF CAPITAL GAINS THAT THE HANDS OF THE ASSESSEE H AS NO LEGS TO STAND. ACCORDINGLY, WE FIND NO MERITS IN THIS TAX CASE (APPEAL). THE REVENUE HAS NOT BROUGHT ANY CONTRARY BINDING PRECEDENTS. THE ASSESSEE HAS ALSO PLACED RELIANCE ON THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF RAMBHAU NAMDEO G AJRE V. NARAYAN BAPUJI DHOTRA [2004 (8) SCC 614], WHEREIN THE HONBLE SUPREME COURT HAS HELD THAT A POWER OF ATTORNEY IS NOT AN INSTRUMENT OF TRANSFER IN REGARD TO ANY RIGHT, TITLE OR INTEREST IN ANY IMMOVABLE PROPERTY. THE POWER OF ATTORNEY IS A CREATION OF AN AGENCY WHEREBY THE GRANTOR AUTHORIZES THE GRANTEE TO DO ACTS SPECIFIED THEREIN, ON BEHALF OF GRANTOR, WHICH WHEN EXECUTED WILL BE BINDING ON THE GRANTOR AS IF DONE AND BY HIM. THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF SHRI SURAJ NARAIN VS. ITO IN ITA NO. 1043/JP/2011, UNDER THE IDENTICAL FACTS DECIDED THE SIMILAR ISSUE AS UNDER: - 12. THE ADMITTED FACT IS THAT THE APPELLANT AFTER CORRECTION OF REVENUE RECORD AND RECORDING THE SAID LAND MEASURING 0.30 HECT. IN THE NAME OF SHRI BHARAT SINGH AND SHRI VIJAY PAL SINGH, SOLD THE SAME TO SMT. RADHA KHATORIA VIDE SALE DEED DATED 19/12/2007 PLACED AT ASSESSEES PAPER BOOK PAGES 49 TO 54. THE SAID SALE DEED HAS BEEN EXECUTED BY THE APPELLANT IN HIS CAPACITY AS A POWER OF ATTORNEY OF SHRI BHARATE SING H AND SHRI VIJAY PAL SINGH FOR SALE CONSIDERATION OF RS. 4.11 LACS. SMT. RADHA DEVI KHATORIA HAPPENS TO BE WIFE OF THE APPELLANT. THE ENQUIRIES CONDUCTED BY THE AO REVEALS THAT SHRI SURAJ NARAIN KHATORIA, THE APPELLANT HAS NOT RETURNED OR MADE PAYMENT OF T HE AFORESAID SALE CONSIDERATION OF RS. 4.11 LACS TO SHRI BHARATE SINGH AND SHRI VIJAY PAL SINGH AS THE SAME IS STATED TO HAVE BEEN DENIED CATEGORICALLY BY THEM, BUT APPELLANTS CASE IS THAT THE SAID PAYMENT STOOD MADE TO SMT. MANJU YADAV AS IS ITA NO.340/CTK/2019 ASSESSMENT YEAR : 2013 - 14 P A G E 8 | 9 EVIDENCED BY THE SALE DEED EXECUTED BY THE APPELLANT. FOR SUCH A CONTROVERSY, THE REMEDY LIES SOMEWHERE ELSE. THE SUB - REGISTRAR, IN THIS CASE HAS ADOPTED VALUE OF THIS PROPERTY AT RS. 42 LACS FOR STAMP DUTY PURPOSES, WHICH HAS BEEN TREATED AS SALE CONSIDERATION BY THE AO. 13. PERUSAL OF THE SALE DEED DATED 19/12/2007 AT PAGE 50 OF THE ASSESSEES PAPER BOOK, IT IS REVEALED THAT SAID SHRI SURAJ NARAIN DID NOT EXECUTE THE SALE DEED AS AN OWNER OF THE AFORESAID LAND MEASURING 0.30 HECT. HE EXECUTED SALE DEED IN HIS CAPAC ITY AS A POWER OF ATTORNEY HOLDER ONLY WHEREIN HE HAD ONLY A DELEGATED RIGHT. THIS RIGHT WAS NOT INDEPENDENT RIGHT OF THE APPELLANT. THERE IS ALSO NO RELIABLE MATERIAL OR DOCUMENTARY EVIDENCE ON RECORD TO SHOW THAT THE SAID SHRI SURJA NARAIN, THE APPELLANT BEFORE S HAD PURCHASED THE AFORESAID LAND FROM ANY OF ITS EARLIER OWNERS BEFORE TRANSFERRING THE SAME IN THE NAME OF SMT. RADHA DEVI KHATORIA THROUGH SALE DEED DATED 19/12/2007 AS A POWER OF ATTORNEY HOLDER. IT IS A DIFFERENT MATTER THAT THE SAKE CONSIDER ATION RECEIVED BY HIM ON BEHALF OF THE PREVIOUS OWNERS WAS NOT PAID OR RETURNED TO THEM IMMEDIATELY AFTER EXECUTION OF SALE DEED OR EVEN UP TO THE TIME OF ENQUIRIES MADE BY THE AO. THE APPELLANT, THUS, BEING NEITHER OWNER NOR A DEEMED OWNER OF THE SAID CAP ITAL ASSET, THE SAID CAPITAL ASSET CANNOT BE TAKEN AS PROPERTY O THE APPELLANT. THE SALE CONSIDERATION OF THE AFORESAID LAND, THEREFORE, COULD NOT BE A SUBJECT MATTER OF TRANSFER OF HI S OWN CAPITAL ASSET. THE INCOME TAX DEPARTMENT HAS ALSO NOT ASSESSED HIM AS REPRESENTATIVES ASSESSEE OR AN AGENT OF THE SAID SHRI BHARAT SINGH AND SHRI VIJAY PAL SINGH AND AS SUCH QUESTION OF MAKING ASSESSMENT OF INCOME FROM CAPITAL GAINS BY APPLICATION OF PROVISIONS OF SECTION 50 - C OF THE ACT ADOPTING HE FULL VALUE OF CONSIDERATION OF RS. 42 LACS IN HIS HANDS, IS NEITHER JUSTIFIED NOR CALLED FOR. THE AUTHORITIES BELOW, THEREFORE, HAVE ERRED IN BRINGING TO TAX THE INCOME FROM CAPITAL GAINS IN HIS HAND THOUGH THE SAME MAY BE A SUBJECT MATTER OF TAXATION IN THE HANDS OF THE REAL OWNERS. IN THIS VIEW OF THE MATER, THE ADDITION SO MADE BEING UNJUST AND UNCALLED FOR, THE SAME IS DIRECTED TO BE DELETED. 4.5 IN VIEW OF THE ABOVE BINDING PRECEDENTS, ON THE ISSUE UN DER CONSIDERATION. WE ARE UNABLE TO SUSTAIN THE FINDING OF THE LD. CIT(A). HENCE, THE AO IS DIRECTED TO DELETE THE ADDITION HOWEVER, HE IS FREE TO TAKE ACTION AGAINST THE REAL OWNERS AS PER LAW. THE GROUND NO. 2 OF THE ASSESSEES APPEAL IS ALLOWED. 11. LD D.R. COULD NOT CONTROVERT THAT THE ISSUE UNDER CONSIDERATION IS NOT SIMILAR TO THE DECISION RENDERED BY JAIPUR BENCH OF ITAT IN THE CASE OF SHRI ITA NO.340/CTK/2019 ASSESSMENT YEAR : 2013 - 14 P A G E 9 | 9 GYAN CHAND AGARWAL (SUPRA). HENCE, FACTS BEING IDENTICAL, WE RESPECTFULLY FOLLOWING THE SAME DIRECT THE AO TO DELETE THE ADDITION WITH THE RIDER THAT THE AO IS FREE TO TAKE ACTION AGAINST REAL OWNER OF THE LAND SHRI PRADEEP KUMAR SETHY AS PER LAW. 12. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 14 /1 2 /20 20 . SD/ - SD/ - (LAXMI PRASAD SAHU) ( CHANDRA MOHAN GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER CUTTACK; DATED 14 / 1 2 /20 20 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER SR . PVT. S ECRETARY ITAT, CUTTACK 1. THE APPELLANT : MIRZA RIYAZ BAIG, PLOT NO.74, SATYA NAGAR, BHUBANESWAR. 2. THE RESPONDENT. DCIT, CIRCLE - 2(1), BHUBANESWAR. 3. THE CIT(A) - 1 , BHUBANESWAR 4. PR.CIT - 1 , BHUBANESWAR 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//