Appeal details
Counselvise Citation
[2018] 125 COUNSELVISE.COM (IT) 9934 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 9 month(s) 10 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
15-03-2018
Appeal Filed By
Department
Order Result
Allowed
Bench Allotted
J
Next Hearing Date
13-04-2017
Assessment Year
2005-2006
Appeal Filed On
04-06-2015
Judgement Text
, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES J , MUMBAI , . . , , BEFORE SHRI JOGINDER SINGH, J UDICIAL M EMBER, A ND SH RI N.K. PRADHAN , A CCOUNTANT M EMBER ITA NO. 3408 /MUM/20 15 ASSESSMENT YEAR: 20 05 - 06 INCOME TAX OFFICER WARD - 23(1)(3) ROOM NO.116, 1 ST FLOOR MATRU MANDIR, TARDEO ROAD MUMBAI 400 007 / VS. SHRI BHUPINDER PAL WALIA 802, OCEAN VIEW, 8 TH FLOOR, UNION PARK , PALI HILL, BANDRA (WEST) MUMBAI 400 050 ( / REVENUE) ( /ASSESSEE) P.A. NO. AAKPW4874G ITA NO. 20 /MUM/20 16 ASSESSMENT YEAR: 2005 - 06 SHRI BHUPINDER PAL WALIA 802, OCEAN VIEW, 8 TH FLOOR, UNION PARK, PALI HILL, BANDRA (WEST) MUMBAI 40 0 050 / VS. INCOME TAX OFFICER WARD - 19(3 ) (1 ) , MUMBAI ( /ASSESSEE) ( / REVENUE) P.A. NO. AAKPW4874G / ASSESSEE BY SHRI KIRAN MEHTA / REVENUE BY MS. AARJU GARODIA / DATE OF H EARING : 15 /0 3 /2018 / DATE OF ORDER : 15 /0 3 /2018 SHRI BHUPINDER PAL WALIA ITA NO. 3408 /MUM/2015 ITA NO. 2 0 /MUM/2016 2 / O R D E R PER JOGINDER SINGH ( JUDICIAL MEMBER ) THE ASSESSEE AS WELL AS THE REVENUE ARE IN CROSS APPEAL FOR THE ASSESSMENT YEAR 2005 - 06 AGAINST THE IMPUGNED ORDER OF THE LD. CO MMISSIONER OF INCOME TAX (APPEAL), DATED 24 TH MARCH 2015. FIRST WE SHALL TAKE UP APPEAL OF THE REVENUE, WHEREIN THE ONLY GROUND PERTAINS TO HOLDING THE AGREEMENT FOR SALE OF PROPERTY AS MOU AND DIRECTING TO COMPUTE THE LONG TERM CAPITAL GAIN ON SALE CONSID ERATION OF RS. 79,45,750 AGAINST THE CONSIDERATION OF RS. 3.44 CRORE AS ENVISAGED IN SALE AGREEMENT FOR PROPERTY AT KRISHNA NAGAR, DELHI. 2 . DURING THE HEARING, SHRI KIRAN MEHTA, LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET CLAIMED THAT THE IMPUGNED ISSUE IS COVERED BY THE DECISION OF THE TRIBUNAL IN THE CASE OF CO - OWNER OF THE PROPERTY IN JAGJIT P AL SING AHLUWALIA , ITA NO.4349/MUM./2011 AND ITA NO.4204/MUM./2011, FOR ASSESSMENT YEAR 2006 - 07 , ORDER DATED 09.01.2015 . ON THE OTHER HAND, MS. AARJU GARODIA, LD. SR . D.R., THOUGH, DEFENDED THE ASSESSMENT SHRI BHUPINDER PAL WALIA ITA NO. 3408 /MUM/2015 ITA NO. 2 0 /MUM/2016 3 ORDER BUT DID NOT CONTROVERT THAT THE IMPUGNED ISSUE HAS BEEN DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE. 2.1 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN VIEW OF T HE ABOVE, WE ARE REPRODUCING HEREUNDER THE RELEVANT PORTION FROM THE AFORESAID ORDER OF THE TRIBUNAL DATED 09.01.2015, FOR READY REFERENCE AND ANALYSIS : - THE ABOVE TITLED CROSS APPEALS, ONE BY THE ASSESSEE AND THE OTHER BY THE REVENUE HAVE BEEN DIRECTED AGAINST THE ORDER DATED 14.3.2011 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREIN FURTHER REFERRED TO AS CIT(A). 2. THE BRIEF FACTS OF THE CASE ARE THAT IN HIS RETURN OF INCOME, THE ASSESSEE HAD SHOWN LONG TERM CAPITAL GAIN OF RS.5,00,000/ - UNDER THE HEAD 'DEVELOPMENT RIGHTS OF PROPERTY OF KRISHNA NAGAR'. EXEMPTION U/S. 54E WAS CLAIMED ON INVESTMENT OF RS.7,50,000/ - IN RURAL ELECTRIFICATION BONDS. ON PERUSAL OF THE BALANCE SHEET WITH THE RETURN OF INCOME OF THE ASSESSEE, THE ASSESSING OFFICER (HEREINAF TER REFERRED TO AS THE AO) OBSERVED THAT THE ASSESSEE HAD SHOWN AN AMOUNT OF RS.66,22,000/ - AS LIABILITY UNDER THE HEAD 'ADVANCE FOR PROPERTY AT KRISHNA NAGAR, DELHI'. HOWEVER, THE ASSESSEE HAD SHOWN CAPITAL GAIN AT NIL IN THE COMPUTATION OF TOTAL INCOME . ON BEING ASKED TO EXPLAIN IN THIS RESPECT, THE ASSESSEE PLEADED BEFORE THE AO THAT A PLOT OF LAND WAS PURCHASED BY THE FATHER OF THE ASSESSEE IN 1947. HE DIED IN 1975 AND THE PROPERTY DEVOLVED ON THE ASSESSEE AND HIS TWO BROTHERS. THE DELHI DEVELOPMENT A UTHORITY ACQUIRED THE SAID PLOT OF LAND IN 1979 WHICH WAS CHALLENGED IN THE COURT AND THE PROPERTY WAS IN DISPUTE. SUBSEQUENTLY, A DISPUTE AROSE WITH HIS COUSIN BROTHER, PROPRIETOR OF M/S. AHLUWALIA CONSTRUCTION. IN THE MEANTIME A PURCHASER APPROACHED THE THREE BROTHERS FOR BUYING THE PROPERTY WHICH THE THREE BROTHERS READILY AGREED SHRI BHUPINDER PAL WALIA ITA NO. 3408 /MUM/2015 ITA NO. 2 0 /MUM/2016 4 FOR CONSIDERATION OF RS.3.44 CRORES. AN AGREEMENT DATED 18.02.2005 WAS ENTERED INTO AS PER WHICH THE ASSESSEE RECEIVED RS.23,20,000/ - IN F.Y. 2004 - 05 AND RS.43,02,000/ - IN F.Y. 2005 - 06 BEING HIS 1/3RD SHARE WHICH WAS APPEARING AS ADVANCE OF RS.66,22,000/ - AS ON 31.03.2006 IN BALANCE SHEET. DELHI POLICE HAD ALSO LODGED A CRIMINAL CASE AGAINST THE THREE BROTHERS ON 21.10.2005 AND IF THE THREE BROTHERS LOSE THE CASE IN COURT, THEY W OULD HAVE TO REFUND THE MONEY WITH INTEREST AND HENCE THERE WAS NO SALE AND THE AMOUNT OF RS.66,22,000/ - WAS SHOWN AS LIABILITY. 3. THE AO SOUGHT INFORMATION U/S.133(6) FROM THE THREE PURCHASERS VIZ. R.K. AGRAWAL, SIDDHART GOEL AND RAM KARAN SHARMA. IN RE SPONSE TO LETTER U/S.133(6) ISSUED BY AO, THE PURCHASER OF LAND SHRI RAM KARAN SHARMA PROVIDED THE INFORMATION VIDE HIS LETTER DATED 29/10/2008 AS REPRODUCED ON PAGE 5 OF THE ASSESSMENT ORDER AS UNDER : - '(A) THAT THE AGREEMENT DT. 18 - 02 - 2005 FOR PURCHASE OF LAND MEASURING 5 BIGHAS AND 2 BISWAS, IN KASARA NO. 42/2 AND 48/4, SITUATED IN KRISHAN NAGAR, HUMAYANPUR DELHI WAS TERMINATED BY BOTH THE PARTIES. (B) THAT THE AGREEMENT DATED 18 - 02 - 2005 WAS NULL AND VOID AND THE SAME WAS NEVER ACTED UPON SO NO SALE DEED WAS MADE ON THE BASIS OF THAT AGREEMENT. (C) THAT A NEW AGREEMENT ACCORDING TO SETTLEMENT WAS EXECUTED BETWEEN THE PRITHIPAL SINGH, JAGJIT PAL SINGH AND SH. BHUPINDER PAL SINGH PARTY NO. 1 AND RAM KARAN SHARMA AND RANBIR SINGH PARTY NO. 2 TO PURCHAS E THE LAND MEASURING 578 SQ. YARDS OUT OF THE LAND MEASURING 5 BIGHA 2 BISWAS OF KHASARA NO. 42/2 SITUATED IN KRISHNA NAGAR, HUMAYANPUR ,DELHI FOR A CONSIDERATION OF RS. 9 LAC. THE PAYMENT WAS MADE BY US THROUGH CHEQUES FROM THE ICICI BANK ROHTAK ALREADY. (D) THAT THE 1ST PARTY HAVE SOLD THEIR WHOLE REMAINING SHARE OF LAND ON 16 - 09 - 05 THROUGH DIFFERENT SALE DEEDS TO OTHER PERSONS. I HAVE ONLY CONCERNED WITH THIS PROPERTY UPTO 578 SQ. YARDS THROUGH SALE DEED NO.27036 DT. 16 - 09 - 2005. (E) THAT THE 1ST PAR TY HAS REFUNDED AMOUNT RECEIVED IN CONNECTION WITH THE EARLIER AGREEMENT OTHER THAN AN AMOUNT OF RS.4.5 IAKHS WHICH IS PENDING WITH THE FIRST PARTY TILL TODAY. SHRI BHUPINDER PAL WALIA ITA NO. 3408 /MUM/2015 ITA NO. 2 0 /MUM/2016 5 4. FURTHER, VIDE LETTER DATED 31.10.2008 ANOTHER PURCHASER SHRI SIDDHANT GOEL STATED THAT THE FIRST AGREEMENT HAD BECOME NULL AND VOID AND EXCEPT FOR A PAYMENT OF RS.4.5 LAKHS, THE FIRST PARTY HAD RETURNED BACK THE ENTIRE SALE CONSIDERATION AND THAT HE HAD PURCHASED ANOTHER 578 SQ. YARDS OF LAND FOR AN IDENTICAL CONSIDERATION OF RS.9,00,000/ - ALONG WITH SHRI. KULDEEP DAHIYA. AFTER CONSIDERING THE REPLIES FILED BY THE PURCHASERS, THE AO OBSERVED THAT IN THE RETURN OF INCOME THE ASSESSEE HAD NOT DISCLOSED ABOUT THE TERMINATION OF FIRST AGREEMENT AND SUBSEQUENT TRANSACTION ENTERED FOR SALE OF LAND WITH THE SAME PURCHASERS AND THEIR NOMINEES WITHIN FEW MONTHS OF THE SIGNING OF FIRST AGREEMENT IN THE SAME FINANCIAL YEAR. DURING THE COURSE OF ASSESSMENT PROCEEDINGS ALSO, THE ASSESSEE HAD NOT DISCLOSED THESE FACTS. HE CONCLUDED THAT TERMINATION OF AGREEMENT DATED 18.02.2005 AND NEW AGREEMENT CAME TO LIGHT ONLY BECAUSE OF ENQUIRIES CONDUCTED. HE OBSERVED THAT THE LAND HAD BEEN GROSSLY UNDERVALUED IN THE SUBSEQUENT SALE AND THAT THOSE WERE NON GENUINE TRANSACTIONS WITH THE SOLE PURPOSE OF TAX EVASION. THE AO D ETERMINED MARKET VALUE OF PLOT AS PER ORIGINAL AGREEMENT DATED 18.2.2005 AT RS.3.44 CRORES AND COMPUTED LONG TERM CAPITAL GAIN OF RS.1,13,62,296/ - OF THE ASSESSEE. HE FURTHER OBSERVED THAT SIDDHARTH GOEL AND RAM KARAN SHARMA HAD STATED THAT MOST OF THE ADV ANCES WERE RETURNED. THEREFORE, THE AMOUNT OF RS.66,22,000/ - WAS NOT EXPLAINED BY THE ASSESSEE. HE ADDED RS. 66,22,000/ - U/S.68 OF THE ACT TO THE TOTAL INCOME OF THE ASSESSEE. BEING AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A). 5. DURING T HE APPELLATE PROCEEDING BEFORE THE LD. CIT(A), THE ASSESSEE SUBMITTED THAT THE ASSESSEE WAS 1/3RD OWNER OF THE LAND AT KRISHNA NAGAR, VILLAGE HUMAYUNPUR, DELHI. IN THE YEAR 1969, DDA ISSUED NOTIFICATION TO ACQUIRE THE PROPERTY. HOWEVER, THE AWARD FOR COMPE NSATION WAS FINALIZED IN 1979. THE ASSESSEE ALONG WITH HIS BROTHERS HAD FILED CASES WITH THE RESPECTIVE AUTHORITY/HIGH COURT DISPUTING THEIR ACQUISITION. THE AWARDS HAD GONE AGAINST THE ASSESSEE IN EARLIER YEARS AND COURT CASES WERE PENDING BEFORE THE HIGH COURT PRIOR TO 2005. IN THE MEANTIME THE ASSESSEE ALONG WITH HIS BROTHERS RECEIVED AN ADVANCE FROM M/S. AHLUWALIA CONSTRUCTIONS TOWARDS DEVELOPMENT OF THE SAID PROPERTY. IN OR AROUND 2005 THE ASSESSEE ALONG WITH HIS BROTHERS FOUND A BUYER AND A MOU WAS DR AWN FOR A TOTAL CONSIDERATION OF RS.3.44 CRORES. THE MOU STATED THAT LIABILITIES TO THE EXTENT OF RS.30 LACS HAD TO BE PAID TO M/S. SHRI BHUPINDER PAL WALIA ITA NO. 3408 /MUM/2015 ITA NO. 2 0 /MUM/2016 6 AHLUWALIA CONSTRUCTIONS FOR OBTAINING AN NOC AND A LUMP SUM PAYMENT TOWARDS BROKERAGE. THE ADVERSE COURT ORDER HAD BEEN RECE IVED ON AUGUST 2005 AND HENCE THE BUYERS REFUSED TO HONOUR THE MOU AND BUY THE PROPERTY AND BACKED OUT OF THE SAID MOU. THE ASSESSEE AND HIS BROTHERS, FEARING THAT THE SAID PROPERTY WOULD NOT GET A BUYER CONSIDERING THAT THE PROPERTY WAS IN DISPUTE WITH DD A AND WITH AN ADVERSE COURT DECREE AGAINST IT, DECIDED TO RENEGOTIATE WITH THE BUYER WHO AGREED TO PURCHASE THE SAME FOR A TOTAL CONSIDERATION OF RS.79,45,750/ - ON AN AS IS WHERE IS BASIS. THIS AMOUNT WAS SUBSTANTIALLY HIGHER THAN THAT BEING AWARDED BY DEL HI DEVELOPMENT AUTHORITY. FURTHER, AROUND THE SAME TIME IN AUGUST 2005 A PERSON BY THE NAME OF CHATTER SINGH RESIDENT OF HN 71, VILLAGE HUMAYUNPUR, NEW DELHI CLAIMED OWNERSHIP TO THE SAID PROPERTY WHICH HAD BEEN REFUTED BY THE ASSESSEE. THE SAID PERSON FIL ED A CRIMINAL COMPLAINT WITH THE SAROJI NAGAR POLICE STATION SEEKING OWNERSHIP OF THE SAID PROPERTY. IN VIEW OF ALL THE ABOVE DISPUTE, THE ASSESSEE TO AVOID UNNECESSARY LITIGATION AND MENTAL AGONY DECIDED TO DISPOSE OFF THE PROPERTY AS A DISTRESS SALE TO B UY PEACE OF MIND WHICH WAS MORE IMPORTANT TO THE ASSESSEE AND HIS BROTHERS WHO ARE ALL WERE OVER THE AGE OF 70 YEARS. HENCE, AGREEMENTS WERE ENTERED INTO WITH THE SIGNATORIES OF THE MOU AND/OR THEIR NOMINEES ON 16.09.2005 FOR PLOT OF SMALLER SIZES EACH FOR A TOTAL CONSIDERATION OF RS.79,45,750/ - IN TWELVE AGREEMENTS. THE STAMP DUTY WAS ALSO DULY PAID ON THESE AGREEMENTS AND THE SAME WERE DULY REGISTERED. THE EARLIER MOU WAS A DOCUMENT OF AN INTENTION TO PURCHASE/SELL ON WHICH NO STAMP DUTY PAID NOR WAS THE SAME REGISTERED. THE ABOVE FACTS HAD BEEN REITERATED BY THE BUYERS IN REPLY TO NOTICE U/S 133(6) OF THE INCOME TAX ACT, 1961 ISSUED BY THE LD. AO. IT HAD BEEN FURTHER SUBMITTED THAT THE MOU DATED 18.02.2005 WAS NULL AND VOID AND HENCE THE QUESTION OF ANY R ECEIPTS BASED ON SUCH MOU DID NOT ARISE. THE ASSESSEE WAS READY TO OFFER FOR TAXATION HIS 1/3RD SHARE OUT OF THE FRESH RENEGOTIATED AGREED VALUE OF RS.9,45,750/ - WHICH CAME OUT TO RS.26,48,583/ - AND THE CAPITAL GAIN COULD BE WORKED ACCORDINGLY. IT HAD BEE N FURTHER SUBMITTED THAT THE ASSESSEE DID NOT COMPUTE THE CAPITAL GAINS ON THE GENUINE BELIEF THAT THE PROPERTY BEING IN DISPUTE HE WOULD HAVE TO REFUND THE AMOUNT IF THE COURT DECIDES OTHERWISE AND ALSO FOR THE FACT THAT THERE WERE VARIOUS COMPLAINTS AND CROSS COMPLAINTS AND SUCH OTHER CRIMINAL COMPLAINTS FOR AND AGAINST THE PROPERTY. SHRI BHUPINDER PAL WALIA ITA NO. 3408 /MUM/2015 ITA NO. 2 0 /MUM/2016 7 6. AFTER CONSIDERING THE SUBMISSION MADE BY THE ASSESSEE'S REPRESENTATIVE, THE LD. CIT(A) OBSERVED THAT IT WAS A FACT THAT THE ASSESSEE HAD ENTERED INTO MOU FOR SALE OF LAND AT KRISHNA NAGAR ALONG WITH HIS TWO BROTHERS HOLDING 1/3RD SHARE EACH. IT WAS ALSO A FACT THAT LAND HAD BEEN ACQUIRED BY DDA BY ISSUING NOTIFICATION. FURTHER ASSESSEE HAD FILED APPEAL BEFORE THE HIGH COURT DISPUTING THE ACQUISITIONS. THE ASSESSEE HAD FILE D THE CASE BEFORE THE COURT BEFORE ENTERING INTO MOU ON 18 TH FEBRUARY, 2005. HOWEVER, THE HIGH COURT ORDER ON AUGUST 2005 WAS AGAINST THE ASSESSEE. IT WAS ALSO A FACT THAT THE MOU WAS CANCELLED AND THE SAME HAD BEEN REITERATED BY THE PURCHASERS. A NEW REG ISTERED SALE DEED AS A DISTRESS SALE WAS ENTERED INTO ON 16.09.2005 FOR SMALLER PLOTS AGGREGATING TO THE TOTAL AREA FOR A SUM OF RS.79,45,750/ - AND THE SAME HAD BEEN REGISTERED WITH THE LAND AUTHORITY. HE FURTHER OBSERVED THAT THE SALE AT LOWER PRICE WAS N ECESSITATED AS NO OTHER PERSON WAS WILLING TO RISK TO PURCHASE THE DISPUTED PROPERTY. HE FURTHER OBSERVED THAT A REGISTERED SALE DOCUMENT WAS THE MOST IMPORTANT DOCUMENT IN MATTER OF DISPUTE WHEREAS THE MOU DT.18.02.2005 WAS NOT A REGISTERED DOCUMENT. THAT STAMP DUTY HAD BEEN PAID AS PER SALE CONSIDERATION AS MENTIONED IN THE SALE DEED. NO HIGHER VALUE HAD BEEN DETERMINED BY THE SUB - REGISTRAR, NEW DELHI. HE THEREFORE HELD THAT THE AO HAD WRONGLY TAKEN COGNIZANCE OF A NULL AND VOID MOU DATED 18.02.2005 AND T HUS DIRECTED HIM TO RECOMPUTE THE CAPITAL GAINS ON SALE CONSIDERATION OF RS.79,45,750/ - INSTEAD OF RS.3.44 CRORES ON THE BASIS OF REGISTERED SALE DEEDS. SO FAR SO ADDITION OF RS.66,22,000/ - MADE BY THE AO AS AN UNEXPLAINED CASH CREDIT WAS CONCERNED, HE OBS ERVED THAT NO PROOF HAD BEEN FILED BY THE ASSESSEE TO PROVE THE CONTENTION THAT RS.66,22,000/ - WAS A PART OF SALE CONSIDERATION OF RS.79,75,450/ - . HENCE, RS.66,22,000/ - COULD NOT BE TREATED AS PART OF SALE CONSIDERATION. HE, HOWEVER, HELD THAT OUT OF THE T OTAL AMOUNT OF RS.66,22,000/ - , AN AMOUNT OF RS.23,20,000/ - PERTAINED TO A.Y. 2005 - 06 AS THE SAME WAS RECEIVED IN THE PREVIOUS YEAR 2004 - 05. HE OBSERVED THAT THE AO HAD ADDED THE ENTIRE AMOUNT OF RS.66,22,000/ - U/S.68 OF THE I.T. ACT, BUT ONLY THAT AMOUNT C OULD HAVE BEEN ADDED U/S.68 FOR THE A.Y. 2006 - 07 WHICH WAS INTRODUCED IN THE BOOKS OF ACCOUNTS DURING THE YEAR UNDER CONSIDERATION. IT WAS AN UNDISPUTED FACT THAT RS.43,02,000/ - HAD BEEN RECEIVED DURING THE YEAR UNDER CONSIDERATION. THEREFORE, ADDITION OF RS.66,22,000/ - WAS RESTRICTED BY HIM TO RS.43,02,000/ - . SHRI BHUPINDER PAL WALIA ITA NO. 3408 /MUM/2015 ITA NO. 2 0 /MUM/2016 8 7. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE ASSESSEE HAS PREFERRED THE APPEAL BEFORE US AGITATING THE CONFIRMATIONS OF ADDITIONS OF RS.43,02,000/ - AS UNEXPLAINED CASH CREDIT, WHEREAS THE REVENUE HAS COME IN APPEAL AGAINST THE DIRECTION OF THE LD. CIT(A) TO COMPUTE THE CAPITAL GAINS ON SALE CONSIDERATION OF RS.79,45,750/ - AS AGAINST THE SALE CONSIDERATION OF RS.3.44 CRORES COMPUTED BY THE AO. 8. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND ALSO G ONE THROUGH THE RECORD. IT IS REVEALED FROM THE FACTS ON THE FILE THAT AT THE TIME OF EXECUTION OF FIRST AGREEMENT DATED 18.2.2005, THERE WAS AN INTERIM INJUNCTION ORDER PASSED BY THE COURT IN FAVOUR OF THE ASSESSEE. HOWEVER, THE SUIT WAS ULTIMATELY DISMIS SED BY THE COURT AND THUS STAY WAS VACATED. AFTER AN ADVERSE ORDER AGAINST THE ASSESSEE RELATING TO THE OWNERSHIP AND DOMAIN OF THE ASSESSEE OVER THE PROPERTY, IT APPEARS QUITE PROBABLE THAT THE INTENDING PURCHASERS WOULD HAVE BACKED OUT OF THEIR COMMITMEN T. THE PLEA OF THE ASSESSEE THAT OWING THE ABOVE DEVELOPED CIRCUMSTANCES AND ALSO IN VIEW OF HIS OLD AGE, THE ASSESSEE DECIDED TO SELL THE PROPERTY AT A LOWER PRICE, WHICH HOWEVER, WAS MORE THAN THE PRICE TO BE PAID TO HIM BY DDA. SUBSEQUENT SALES WERE MAD E THROUGH REGISTERED SALE DEEDS AND STAMP DUTY WAS PAID. THERE WAS NO HIGHER ASSESSMENT OF STAMP DUTY ON SALE CONSIDERATION BY THE STAMP DUTY AUTHORITIES. EXCEPT THE FIRST MOU DATED 18.2.2005, WHICH WAS NOT ACTED UPON BY THE PARTIES, THERE IS NO EVIDENCE O N THE FILE WHICH SHOWS THAT THE ASSESSEE HAD RECEIVED THE SALE CONSIDERATION AS PER MOU DATED 18.2.2005 OR IN EXCESS OF THAT WAS MENTIONED IN THE REGISTERED SALE DEEDS. THOUGH THE ASSESSEE BEFORE THE AO HAD CONCEALED THE FACT OF SUBSEQUENT SALE DEEDS AND H AD SHOWN THE RECEIPTS ON ACCOUNT OF FIRST AGREEMENT AS LIABILITIES, BUT THAT ITSELF IS NOT SUFFICIENT TO HOLD THAT THE FIRST AGREEMENT WAS ACTUALLY ACTED UPON OR THAT THE SUBSEQUENT SALES WERE NOT GENUINE. WE THEREFORE DO NOT FIND ANY INFIRMITY IN THE ORDE R OF THE LD. CIT(A) IN THIS RESPECT. 2.2 WE FIND THAT THE ASSESSEE IS HAVING 1/3 RD SHARE OF THE PROPERTY AND IN THE CASE OF CO - SHARE SHRI JAGJITPAUL SINGH AHLUWALIA, THE TRIBUNAL HAS MADE AN ELABORATE DISCUSSION ON THE ISSUE IN HAND AND FINALLY FOUND NO SHRI BHUPINDER PAL WALIA ITA NO. 3408 /MUM/2015 ITA NO. 2 0 /MUM/2016 9 INFIRMITY IN THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEAL) AND OBSERVED THAT EXCEPT THE FIRST MOU DATED 18.02.2005, WHICH WAS NOT ACTED UPON THE PARTIES, THERE WAS NO EVIDENCE ON FILE EVIDENCING THAT THE ASSESSEE HAS RECEIVED THE SALE CONSIDERAT ION AS PER MOU DATE 18.02.2005 OR IN EXCESS OF THAT WAS MENTIONED IN THE REGISTERED SALE DEED. CONSIDERING THE FACTUAL MATRIX AND FOLLOWING THE AFORESAID ORDER OF THE TRIBUNAL, WE AFFIRM THE STAND TAKEN BY THE LD. COMMISSIONER OF INCOME TAX (APPEAL), RESUL TING INTO, DISMISSING OF APPEAL OF THE REVENUE. 3 . NOW, WE SHALL TAKE UP THE APPEAL OF THE ASSESSEE (ITA NO.20/MUM./2016). THERE IS A DELAY OF 209 DAYS IN FILING THE APPEAL BEFORE THIS TRIBUNAL. THE ASSESSEE HAS FILED AN APPLICATION, SUPPORTED BY AN AFFID AVIT, EXPLAINING THE REASONS OF DELAY. IT WAS CONTENDED THAT THE DELAY MAY BE CONDONED . IT WAS CLAIMED THAT THE IMPUGNED ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER IN ITA NO. 21/MUM/2016 (A.Y. 2006 - 07) ORDER DATED 25.10.2017 . THE LD. D.R. CONTE NTED THAT THE ASSESSEE IS EXPECTED TO EXPLAIN THE DELAY OF EACH DAY . SHRI BHUPINDER PAL WALIA ITA NO. 3408 /MUM/2015 ITA NO. 2 0 /MUM/2016 10 3.1 IN VIEW OF THE ASSERTIONS MADE BY THE LD. RESPECTIVE COUNSEL, SO FAR AS, CONDONATION OF DELAY IS CONCERNED, N O DOUBT FILING OF AN APPEAL IS A RIGHT GRANTED UNDER THE STATUTE TO THE AS SESSEE AND IS NOT AN AUTOMATIC PRIVILEGE, THEREFORE, THE ASSESSEE IS EXPECTED TO BE VIGILANT IN ADHERING TO THE MANN ER AND MODE IN WHICH THE APPEAL IS TO BE FILED IN TERMS OF THE RELEVANT PROVISIONS OF THE ACT. NEVERTHELESS, A LIBERAL APPROACH HAS TO BE AD OPTED BY THE APPELLATE AUTHORITIES, WHERE DELAY HAS OCCURRED FOR BONA FIDE REASONS ON THE PART OF THE ASSESSEE OR T HE REVENUE IN FILING THE APPEAL . IN MATTERS CONCERNING THE FILING OF APPEAL , IN EXERCISE OF THE STATUT ORY RIGHT, A REFUSAL TO CONDONE THE DE LAY CAN RESULT IN A MERITORIOUS MATTER BEING THROWN OUT AT THE THRESHOLD, WHICH MAY LEAD TO MISCARRIAGE OF JUSTICE. THE JUDICIARY IS RESPECTED NOT ON ACCOUNT OF ITS POWER TO LEGALIZE IN JUSTICE ON TECHNICAL GROUNDS BUT BECAUSE IT IS CAPABLE OF REMOVING INJ USTICE AND IS EXPECTED TO DO SO. 3.2 THE HONBLE APEX COURT IN A CELEBRATED DECISION IN COLLECTOR, LAND ACQUISITION VS MST. KATIJI & ORS. 167 ITR 471 OPINED THAT WHEN TECHNICAL SHRI BHUPINDER PAL WALIA ITA NO. 3408 /MUM/2015 ITA NO. 2 0 /MUM/2016 11 CONSIDERATION AND SUBSTANTIAL JUSTICE ARE PITTED AGAINST EACH OTHER, THE COUR TS ARE EXPECTED TO FURTHER THE CAUSE OF SUBSTANTIAL JUSTICE. THIS IS FOR THE REASON THAT AN OPPOSING PARTY, IN A DISPUTE, CANNOT HAVE A VESTED RIGHT IN INJUSTICE BEING DONE BECAUSE OF A NON - DELIBERATE DELAY. THEREFORE, IT FOLLOWS THAT WHILE CONSIDERING MATTERS RELATING TO THE CONDONATION OF DELAY, JUDICIOUS AND LIBERAL APPROACH IS TO BE ADOPTED. IF SUFFICIENT CAUSE IS FOUND TO EXIST, WHICH IS BONA - FIDE ONE, AND NOT DUE TO NEGLIGENCE OF THE ASSESSEE, THE DELAY NEEDS TO CONDONED IN SUCH CASES. THE EXPRES SION SUFFICIENT CAUSE IS ADEQUATELY ELASTIC TO ENABLE THE COURTS TO APPLY LAW IN A MEANINGFUL MANNER, WHICH SUB - SERVES THE END OF JUSTICE - THAT BEING THE LIFE PURPOSE OF THE EXISTENCE OF THE INSTITUTION OF THE COURTS. WHEN SUBSTANTIAL JUSTICE AND TECHNI CAL CONSIDERATION ARE PITTED AGAINST EACH OTHER, THE CAUSE OF SUBSTANTIAL JUSTICE DESERVES TO BE PREFERRED. THE HONBLE APEX COURT IN VEDABHAI VS SANTARAM 253 ITR 798(SC) OBSERVED THAT INORDINATE DELAY CALLS OF CAUTIOUS APPROACH. THIS MEANS THAT THERE SHO ULD BE NO MALA - FIDE OR DILATORY TACTICS. SUFFICIENT CAUSE SHOULD SHRI BHUPINDER PAL WALIA ITA NO. 3408 /MUM/2015 ITA NO. 2 0 /MUM/2016 12 RECEIVE LIBERAL CONSTRUCTION TO ADVANCE SUBSTANTIAL JUSTICE. THE HONBLE APEX COURT IN 167 ITR 471 OBSERVED AS UNDER: - 3. THE LEGISLATURE HAS CONFERRED THE POWER TO CONDONE DELAY BY ENACT ING SECTION 51 OF THE LIMITATION ACT OF 1963 IN ORDER TO ENABLE THE COURTS TO DO SUBSTANTIAL JUSTICE TO PARTIES BY DISPOSING OF MATTERS ON DE MERITS. THE EXPRESSION SUFFICIENT CAUSE EMPLOYED BY THE LEGISLATURE IS ADEQUATELY ELASTIC TO ENABLE THE COURTS T O APPLY THE LAW IN A MEANINGFUL MANNER WHICH SUBSERVES THE ENDS OF JUSTICE THAT BEING THE LIFE - PURPOSE OF THE EXISTENCE OF THE INSTITUTION OF COURTS. IT IS COMMON KNOWLEDGE THAT THIS COURT HAS BEEN MAKING A JUSTIFIABLY LIBERAL APPROACH IN MATTERS INSTITUTE D IN THIS COURT. BUT THE MESSAGE DOES NOT APPEAR TO HAVE PERCOLATED DOWN TO ALL THE OTHERS COURTS IN THE HIERARCHY. 3.3 FURTHERMORE, THE HON'BLE SUPREME COURT IN THE CASE OF VEDABAI ALIA VAIJAYANATABAI BABURAO PATIL VS. SHANTARAM BABURAO PATIL 253 IT R 798 (SC) HELD THAT THE COURT HAS TO EXERCISE THE DISCRETION ON THE FACTS OF EACH CASE KEEPING IN MIND THAT IN CONSTRUING THE EXPRESSION SUFFICIENT CAUSE, THE PRINCIPLE OF ADVANCING SUBSTANTIAL JUSTICE IS OF PRIME IMPORTANCE. THE COURT HELD THAT THE EXP RESSION SUFFICIENT CAUSE SHOULD RECEIVE LIBERAL CONSTRUCTION. 3.4 THE DECISION OF THE TRIBUNAL IN PEOPLE INFOCOM PRIVATE LTD. V/S CIT (ITA NO.210/MUM/2013) SHRI BHUPINDER PAL WALIA ITA NO. 3408 /MUM/2015 ITA NO. 2 0 /MUM/2016 13 ORDER DATED 19/05/2016, M/S NEUTRON SERVICES CENTRE PVT. LTD VS ITO (ITA NO.1180/MUM/2012) OR DER DATED 18/02/2016, SHRI SAIDATTA COOP - . CREDIT SOCIETY LTD. V/S ITO (ITA NO.2379/MUM/2015) ORDER DATED 15/01/2016 AND MR. NIKUNJ BAROT (PROP. ENIGMA) VS ITO (ITA NO.4887/MUM/2015) ORDER DATED 06/01/2016, WHEREIN, SUBSTANTIAL DELAY WAS CONDONED, SUPPORTS THE CASE OF THE PRESENT ASSESSEE. HAVING MADE THE AFORESAID OBSERVATION AND VARIOUS DECISIONS DISCUSSED HEREINABOVE, INCLUDING FROM HONBLE APEX COURT, THE CIRCUMSTANCES NARRATED BY THE ASSESSEE, WHEREIN, HE HAS STATED THE REASONS WHICH CAUSED THE DELAY, THEREFORE, WE ARE SATISFIED WITH THE EXPLANATION OF THE ASSESSEE AND CONDONE THE DELAY. 4. SO FAR AS THE MERITS OF THE CASE IS CONCERNED, AS CLAIMED BY THE LD. COUNSEL FOR THE ASSESSEE, WE ARE REPRODUCING HEREUNDER THE RELEVANT PORTION FROM THE ORDER OF TH E TRIBUNAL DATED 15.10.2017, IN THE CASE OF ASSESSEE ITSELF FOR READY REFERENCE AND ANALYSIS: - THIS APPEAL BY THE ASSESSEE IS ARISING OUT OF THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 32, MUMBAI, [IN SHRI BHUPINDER PAL WALIA ITA NO. 3408 /MUM/2015 ITA NO. 2 0 /MUM/2016 14 SHORT CIT(A)] IN APPEAL NO. CIT(A) - 32, MUMBAI/I T - 173/19(3)(1)/14 - 15 DATED 17 - 11 - 2015. THE ASSESSMENT WAS FRAMED BY INCOME TAX OFFICER, WARD - 19(3)(1), MUMBAI (IN SHORT ITO OR AO) FOR THE ASSESSMENT YEAR 2006 - 07 VIDE ORDER DATED 26 - 03 - 2014 UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961(HEREINAFTER THE ACT). 2. AT THE OUTSET, THE ASSESSEE STATED THAT NEITHER THE CIT(A) NOR THE AO HAS DEALT WITH THE OBJECTIONS RAISED BY THE ASSESSEE AGAINST THE ISSUANCE OF NOTICE U/S. 148 OF THE ACT AND REASONS RECORDED THEREOF. THE ASSESSEE, IN PERSON PRESENT BEFORE U S, DREW OUR ATTENTION TO THE FOLLOWING GROUND NO.3: THE LEARNED CIT(A) ERRED IN NOT APPRECIATING THAT IN THE FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE AND IN LAW, THE ASSESSMENT IN REFERENCE IS BAD - IN - LAW, IN AS MUCH AS THE NOTICE U/S 148 UNDER WHI CH THE LEARNED AO ASSUMED THE JURISDICTION WAS BAD IN LAW AND THE ASSESSMENT IN REFERENCE WAS MADE WITHOUT PROPERLY FOLLOWING THE PROCEDURE TO DEAL WITH THE OBJECTIONS RAISED BY THE APPELLANT. WHEN THIS WAS POINTED OUT TO THE LEARNED SENIOR DR, WHETHER T HE ASSESSING OFFICER HAS ADJUDICATED THE OBJECTIONS RAISED BY THE ASSESSEE VIDE ITS LETTER DATED 05.09.2013? THE LEARNED DR FAIRLY CONCEDED THAT THE ISSUE CAN BE REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER FOR ADJUDICATING THE OBJECTIONS OF THE ASSE SSEE IN THE FIRST INSTANCE AND, THEREAFTER, IN CASE THE OBJECTIONS ARE REJECTED, THE AO WILL DEAL WITH THE ISSUES ON MERITS ALSO. ON THIS THE LEARNED COUNSEL FOR THE ASSESSEE FAIRLY AGREED. 3. AFTER HEARING BOTH THE PARTIES AND GOING THROUGH THE FACTS IN ENTIRELY, WE ARE OF THE VIEW THAT THE ASSESSING OFFICER SHOULD HAVE DEALT WITH THE OBJECTIONS RAISED FOR ISSUANCE OF NOTICE U/S. 148 OF THE ACT AND THE REASONS RECORDED THEREOF. THIS PROCEDURE IS LAID DOWN BY HONBLE SUPREME COURT IN THE CASE OF GKN DRIVES HAFTS (INDIA) LTD. VS ITO 259 ITR 19 (SC), WHEREIN IT HAS BEEN HELD AS UNDER: WE SEE NO JUSTIFIABLE REASON TO INTERFERE WITH THE ORDER UNDER CHALLENGE. HOWEVER, WE CLARIFY THAT WHEN A NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT IS ISSUED, THE PROPER C OURSE OF ACTION FOR THE NOTICEE IS TO FILE RETURN AND IF HE SHRI BHUPINDER PAL WALIA ITA NO. 3408 /MUM/2015 ITA NO. 2 0 /MUM/2016 15 SO DESIRES, TO SEEK REASONS FOR ISSUING NOTICES. THE ASSESSING OFFICER IS BOUND TO FURNISH REASONS WITHIN A REASONABLE TIME. ON RECEIPT OF REASONS, THE NOTICE IS ENTITLED TO FILE OBJECTIONS TO IS SUANCE OF NOTICE AND THE ASSESSING OFFICER IS BOUND TO DISPOSE OF THE SAME BY PASSING A SPEAKING ORDER. IN THE INSTANT CASE, AS THE REASONS HAVE BEEN DISCLOSED IN THESE PROCEEDINGS, THE ASSESSING OFFICER HAS TO DISPOSE OF THE OBJECTIONS, IF FILED, BY PASSI NG A SPEAKING ORDER, BEFORE PROCEEDING WITH THE ASSESSMENT IN RESPECT OF THE ABOVE SAID FIVE ASSESSMENT YEARS. IN TERMS OF THE DECISION OF THE HONBLE SUPREME COURT, THE ASSESSING OFFICER IS DIRECTED THAT HE WILL DISPOSE OF THE OBJECTIONS QUA RE - OPENING AND REASONS RECORDED THEREOF AND ONLY THEN PROCEED FOR FRAMING OF ASSESSMENT. THE MATTER IS RESTORED TO THE FILE OF THE ASSESSING OFFICER WITH THE ABOVE DIRECTIONS. 4.1 IN THE AFORESAID ORDER, THE TRIBUNAL HAS DULY CONSIDERED THE RATIO / PROCEDURE LAID D OWN BY THE HON'BLE APEX COURT IN GKN DRIVE SHAFTS (I) LTD. V / S INCOME TAX OFFICER, 259 ITR 19 (SC) AND FINALLY DIRECTED THE ASSESSING OFFICER TO DISPOSE OFF THE OBJECTIONS QUA RE - OPENING AND REASONS RECORDED THEREOF AND ONLY THEN PROCEED FOR FRAMING ASSESS MENT. THE MATTER WAS RESTORED TO THE FILE OF THE ASSESSING OFFICER. CONSIDERING THE TOTALITY OF FACTS AND FOLLOWING THE AFORESAID ORDER OF THE TRIBUNAL, WE DIRECT THE ASSESSING OFFICER TO EXAMINE THE FACTUAL MATRIX AND DECIDE THE YEAR OF TAXABILITY AND SHRI BHUPINDER PAL WALIA ITA NO. 3408 /MUM/2015 ITA NO. 2 0 /MUM/2016 16 QUA NTUM OF CAPITAL GAIN IN THE PRESENT APPEAL. THE ASSESSEE BE GIVEN OPPORTUNITY OF BEING HEARD AND DECIDE AFRESH IN ACCORDANCE WITH LAW. THUS, THIS APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. FINALLY, THE APPEAL OF THE REVENUE (ITA NO.3408/M UM./2015) IS DISMISSED AND THAT OF THE ASSESSEE (ITA NO.20/MUM./2016) IS ALLOWED FOR STATISTICAL PURPOSES. T HIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LEARNED REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 15/03/2018 SD/ - ( N.K. PRADHAN ) SD/ - (JOGINDER SINGH) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; DATED : 1 5 / 03 /2018 PRADEEP J. CHOWDHURY , SR. PS SHRI BHUPINDER PAL WALIA ITA NO. 3408 /MUM/2015 ITA NO. 2 0 /MUM/2016 17 / COPY OF THE ORDER FORWARDED TO : 1. / THE ASSESSEE 2. / THE REVENUE 3. , ( ) / THE CIT, MUMBAI. 4. / CIT(A) - , MUMBAI 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI
