Dr. Hridaya Mohan Lal, Hyd, Hyderabad V. ITO, W-6(2), Hyderabad

ITA 351/HYD/2011

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 5574 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 9 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-01-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 06-06-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 08-03-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: A V RAGHURAM
• Keywords: Opportunity of being heard; Corroborative evidences
• Section: 54F; 148; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO.351/HYD/2011 ASSESSMENT YEAR: 2005-06. DR. HRIDAYA MOHAN LAL, -V- THE ITO, WARD-6(2), BANJARA HILLS,HYDERABAD. HYDERABAD. PAN:AAOPL8178N (APPELLANT) (RESPONDENT) APPELLANT BY SHRI A.V. RAGHU RA M RESPONDENT BY SHRI SOLGY JOSE T KO TTARAM DATE OF HEARING 08-11-2014. DATE OF PRONOUNCEMENT 07-O1-2014 ORDER PER SAKTIJIT DEY, J.M: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AG AINST THE ORDER DATED 13-1-2011 OF CIT (A)-IV, HYDERABAD PA SSED IN APPEAL NO.704/ ITO 6(2)/CIT(A)-IV/09-10 PERTAINING TO THE ASSESSMENT YEAR 2005-06. 2. THE ASSESSEE IN THE MEMORANDUM OF APPEAL HAS RA ISED 5 EFFECTIVE GROUNDS RELATING TO THE ISSUE OF TAXABILI TY OF CAPITAL GAIN IN THE IMPUGNED ASSESSMENT YEAR. IN ADDITION TO TH E MAIN GROUNDS, THE ASSESSEE HAS RAISED TWO ADDITIONAL GRO UNDS AT THE TIME OF HEARING OF APPEAL. 3. WE WILL FIRST DEAL WITH THE MAIN GROUNDS. BRIEFL Y STATED THE FACTS ARE, THE ASSESSEE IS AN INDIVIDUAL. FOR THE ASSESSMENT YEAR UNDER DISPUTE THE ASSESSEE FILED HIS RETURN OF INCO ME ON 1-8-2005 DECLARING TOTAL INCOME OF RS.10,97,210. DURING THE SCRUTINY ASSESSMENT PROCEEDING FOR THE ASSESSMENT YEAR 2006- 07, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD SHO WN SALE CONSIDERATION OF RS.1,11,00,000/- FROM SALE OF PROP ERTY AT 12-13- ITA NO.351 /HYD/2011 DOCTOR HRIDAYA MOHAN LAL, HYDERABAD 2 1271, TARNAKA, HYDERABAD AND COMPUTED LONG TERM CAP ITAL GAIN OF RS.73,22,658/-. AT THE SAME TIME, THE ASSESSEE ALS O CLAIMED EXEMPTION U/S 54 OF THE ACT TOWARDS PURCHASE OF A F LAT AT NOIDA. THE ASSESSING OFFICER HOWEVER WAS OF THE VIEW THAT CAPITAL GAIN PERTAINED TO THE ASSESSMENT YEAR 2005-06. HE THERE FORE ISSUED A NOTICE U/S 148 OF THE ACT REOPENING THE ASSESSMENT FOR THE IMPUGNED ASSESSMENT YEAR. DURING THE ASSESSMENT PR OCEEDINGS THE ASSESSING OFFICER ISSUED A NOTICE TO THE ASSESS EE REQUIRING HIM TO SHOW CAUSE AS TO WHY TRANSFER SHOULD NOT BE HELD TO HAVE OCCURRED IN FINANCIAL YEAR 2004-05 AS THE SALE DEED WAS REGISTERED ON 17-12-2004 AND 20-2-2006. THE ASSESSEE IN HIS R EPLY SUBMITTED THAT ON 17-12-2004 ONLY GPA WAS REGISTERE D AND THE ACTUAL SALE DEED WAS REGISTERED ON 20-2-2006 AFTER PAYMENT OF BALANCE CONSIDERATION OF RS.30.50 LAKHS. AFTER REC EIVING ASSESSEES REPLY, THE ASSESSING OFFICER SOUGHT CLAR IFICATION FROM THE SRO ON THE ISSUE OF REGISTRATION BEING DONE TWI CE. THE SRO IN HIS LETTER DATED 16-12-2008 CLARIFIED THAT THE DOCU MENT NO.459/06 EXECUTED ON 17-12-2004 WAS KEPT PENDING UNDER SECTI ON 47A OF INDIAN STAMP ACT, 1899 FOR DETERMINATION OF MARKET VALUE AND STAMP DUTY TO BE PAID THEREON. THE COLLECTOR, WHO IS THE DISTT. REGISTRAR DETERMINED THE MARKET VALUE OF THE PROPER TY AND THE DEFICIT STAMP DUTY OF RS.11,01,645/- WAS COLLECTED AND DOCUMENT WAS REGISTERED AND RETURNED TO THE PARTY. HE FURTH ER CLARIFIED THAT AS PER SEC.47 OF THE REGISTRATION ACT, 1908, THE RE GISTERED DOCUMENT OPERATED FROM THE DATE OF ITS EXECUTION ON 17-12-2004. IN ADDITION TO THE AFORESAID CLARIFICATION RECEIVED FROM SRO, THE ASSESSING OFFICER FURTHER NOTED THAT A PARTICULAR C LAUSE IN THE SALE DEED PROVIDED FOR HANDING OVER THE POSSESSION OF TH E PROPERTY ON PAYMENT OF BALANCE AMOUNT OF RS.50,000 BUT AT THE S AME TIME IT MENTIONS TRANSFER OF CLEAR TITLE BY WAY OF ABSOLUT E SALE TO THE PURCHASER. ITA NO.351 /HYD/2011 DOCTOR HRIDAYA MOHAN LAL, HYDERABAD 3 4. AS PER THE TERMS OF THE SALE DEED THE ASSESSEE HAS ALSO AUTHORISED THE PURCHASERS TO UNDERTAKE THE SURVEY, DEMARCATION, LEVELING AND MAKING PLANS, ARCHITECTURAL DESIGNS ET C. THE AGREEMENT FURTHER PROVIDED THAT THE PURCHASERS WERE CONFERRED ALL RIGHTS, TITLE AND INTEREST THEREIN AND PERMITTED TO DIVIDE OWNERSHIP AMONG 1. M/S. SHANTA SRIRAM CONSTRUCTIONS PVT. LTD. , 2. M/S SUNRISE HOMES LIMITED, 3. T. ASHOK KUMAR AND 4. D. SUMAN. THIS, ACCORDING TO THE ASSESSING OFFICER WOULD NOT BE POSSIBLE WITHOUT EXTINGUISHMENT OF RIGHTS OF THE ASSESSEE IN THE PROPERTY. THE ASSESSING OFFICER FURTHER NOTED THAT MORE THAN 99% OUT OF THE CONSIDERATION OF RS.1.11 CRORE WAS RECEIVED BY THE ASSESSEE LEAVING BEHIND A PALTRY SUM OF RS.50,000/-. ON THE BASIS OF THE AFORESAID FACTS, THE ASSESSING OFFICER CONCLUDED TH AT THERE IS A TRANSFER WITHIN THE MEANING OF SEC. 2(47)(V) DURING THE YEAR UNDER CONSIDERATION AND COMPUTED CAPITAL GAIN ACCORDINGLY . 5. BEING AGGRIEVED OF THE ASSESSMENT ORDER, THE ASS ESSEE PREFERRED AN APPEAL BEFORE THE CIT (A). THE CIT (A ) ALSO UPHELD THE VIEW OF THE ASSESSING OFFICER BY OBSERVING THAT THOUGH PART OF THE PAYMENT MIGHT HAVE BEEN PAID BELATEDLY BUT AS P ER SEC. 47 OF THE REGISTRATION ACT, 1908 AGREEMENT OF SALE CUM GP A IS OPERATIVE FROM THE DATE OF ITS EXECUTION I.E., 17-12-2004. T HE CIT (A) HELD THAT THE GPA EXTINGUISHED ALL THE RIGHTS, TITLE AND INTEREST OF THE ASSESSEE IN THE PROPERTY. 6. THE CIT (A) FURTHER REFERRING TO THE AGREEMENT OF SALE CUM GPA OBSERVED THAT THE SAID AGREEMENT ALSO AUTHO RIZES THE PURCHASER TO UNDERTAKE SURVEY, DEMARCATION, LEVELIN G PLANNING, ARCHITECTURALLY DESIGNING AND DETERMINING THE STRUC TURAL SPECIFICATION. IT ALSO AUTHORIZES TO SEEK ADDITION AL SUPPLY OF ELECTRICITY, WATER SUPPLY AND SEWERAGE CONNECTION R EQUIRED FOR THE PROPOSED BUILDING, AS ALSO OBTAINING SANCTION OF PL ANS FROM MUNICIPAL CORPORATION OF HYDERABAD. THE AGREEMENT ALSO AUTHORIZES TO UNDERTAKE CONSTRUCTION BY DEMOLISHING THE EXISTING ITA NO.351 /HYD/2011 DOCTOR HRIDAYA MOHAN LAL, HYDERABAD 4 STRUCTURE AT THEIR OWN COST AND EXPENSES. HE FURTH ER NOTED THAT THE FACT THAT IN TERMS WITH THE AGREEMENT OF SALE C UM GPA, THE ASSESSEE ALSO HANDED OVER ALL COPIES OF LINK DOCUME NTS RELATING TO THE SAID PROPERTY TO THE PURCHASER AND THE FOUR PUR CHASERS ALSO DECIDED THE MANNER IN WHICH THE OWNERSHIP OF THE SC HEDULE PROPERTY WAS TO BE DIVIDED AMONG THEM. THE CIT (A) FURTHER NOTED THAT BY WAY OF SAID AGREEMENT, THE ASSESSEE ALSO AU THORIZED THE PURCHASERS TO ENTER INTO AGREEMENTS OF SALE FOR THE SCHEDULED PROPERTY OR ANY PART THEREOF AND TO EXECUTE SIGN AN D PRESENT FOR REGISTRATION THE SALE DEED FOR A CONVEYANCE AND IND ENTURES, INTER ALIA CONVEYED THE WHOLE OR ANY PART OF THE SCHEDULE D PROPERTY WITH OR WITHOUT BUILT UP AREAS. THE AGREEMENT ALSO PROV IDED THAT THE PURCHASERS WERE RECEIVED AN APPROPRIATE SALE CONSID ERATION, ADVANCES, RENT AND OTHER MONIES AND ACKNOWLEDGE AND PASS RECEIPTS THEREFORE FROM THE BUYERS, LESSEES AND OTH ER PERSONS, ENTERING INTO ANY KIND OF TRANSACTION IN RESPECT OF THE SAID PROPERTY. THE PURCHASERS WERE ALSO ENTITLED TO APPL Y FOR MUTATIONS OF OWNERSHIP IN CONCERN RECORDS OF ASSESSMENTS IN F AVOUR OF THE PROSPECTIVE PURCHASER AS ALSO TO BORROW LOANS, RISE ADVANCES FROM ANY FINANCIAL INSTITUTION OR BANKS OR PRIVATE AGENC IES. ON CONSIDERING THE ARGUMENT AS A WHOLE, THE CIT (A) CO NCLUDED THAT THOUGH THE ASSESSEE HAD IN FACT TRANSFERRED ALL HI S RIGHTS AND TITLE IN THE PROPERTY UNDER REFERENCE, FOR THE MERE STIPU LATED BALANCE OF RS.50,000/- IT IS CLAIMED THAT THE POSSESSION WAS T O BE DELIVERED AFTER SUCH PAYMENT IS MADE. 7. THE CIT (A) NOTED THAT THE AGREEMENT MAKES I T CLEAR THAT THE ASSESSEE IN EFFECT GIVEN POSSESSION OF THE PRO PERTY CONCERNED AT THE TIME OF AGREEMENT OF SALE CUM GPA ON 17-12-2 004 ITSELF. THE CIT (A) WAS OF THE VIEW THAT EVEN THOUGH AS PER ITEM NO.3 ON PAGE NO.7 OF THE POSSESSION OF THE SCHEDULED PROPER TY WILL BE DELIVERED AT THE TIME OF ORIGINAL SALE DEED BUT IT IS CLEAR THAT THE ASSESSEE HAS TRANSFERRED THE PROPERTY AT THE TIME OF EXECUTION OF ITA NO.351 /HYD/2011 DOCTOR HRIDAYA MOHAN LAL, HYDERABAD 5 THE SAID AGREEMENT OF SALE CUM GPA ITSELF IN VIEW O F THE PROMISE OF THE PURCHASERS TO PAY THE CONSIDERATION OF RS.1, 11,00,000/-. IN VIEW OF SUCH PROMISE AND PERFORMANCE OF PURCHASERS , THE ASSESSEE DID NOT MAKE ANY EFFORT TO RESCIND THE AGR EEMENT AND ACCEPTED THE CONSIDERATION STIPULATED IN THE AGREEM ENT IN A MANNER DIFFERENT FROM THAT STIPULATED IN THE AGREEM ENT. THE CIT (A) FURTHER HELD THAT THE FACT THAT THE POSSESSION OF THE PROPERTY WAS GIVEN TO PURCHASERS WAS ALSO EVIDENT BECAUSE OF THE FACT THAT THE PURCHASERS HAD BEEN ALLOWED TO UNDERTAKE NUMBER OF ACTIVITIES THEREON WHICH COULD NOT HAVE BEEN POSSIBLE IN THE A BSENCE OF POSSESSION. THE CIT (A) FURTHER NOTED THAT THOUGH THE ASSESSEE CLAIMED THAT POSSESSION WAS GIVEN LATER BUT NO SUBS TANTIAL EVIDENCE COULD BE FURNISHED BY THE ASSESSEE TO ESTA BLISH THE FACT THAT THE PURCHASER EXERCISED ANY SUCH RIGHTS ONLY AFTER 27-3-2006 WHEN THE POSSESSION WAS ALLEGEDLY GIVEN TO THEM. T HE CIT (A) RELYING UPON A DECISION OF THE AUTHORITY FOR ADVAN CE RULING IN THE CASE OF J S. SARKARIA (294 ITR 196) AND A DECISION OF THE INCOME- TAX APPELLATE TRIBUNAL CHENNAI BENCH IN CASE OF KAL ANIDHI (122 TTJ 405) FINALLY CONCLUDED THAT THERE WAS A TRANSFER I N TERMS OF SECTION 2(47)(V) OF THE ACT AND ACCORDINGLY SUSTAI NED THE VIEW OF THE ASSESSING OFFICER IN TAXING THE CAPITAL GAINS I N THE IMPUGNED ASSESSMENT YEAR. 8. THE LEARNED AR SUBMITTED THAT THE AGREEMENT OF SAL E CUM GPA DATED 17-12-2004 IS NOTHING BUT A DOCUMENT FOR A SALE TRANSACT ION. THE LEARNED AR SUBMITTED THAT ON THE DATE OF EXECUTION OF AGREEME NT ON 17-12-2004 THE ASSESSEE ONLY RECEIVED AN AMOUNT OF RS.70 LAKHS THUS; THE PURCHASER HAS NOT PAID THE FULL CONSIDERATION ON THE DATE OF EXE CUTION OF AGREEMENT F SALE CUM GPA. THE LEARNED AR FURTHER SUBMITTED THAT N O OTHER CONDITION OF THE AGREEMENT OF SALE CUM GPA WAS FULFILLED UNTIL T HE REGISTRATION WAS MADE ON 27-2-2006. THE LEARNED AR SUBMITTED THAT T HE POSSESSION OF THE PROPERTY WAS ONLY HANDED OVER TO THE PURCHASER ON 27- 3-2006. IN THIS ITA NO.351 /HYD/2011 DOCTOR HRIDAYA MOHAN LAL, HYDERABAD 6 CONTEXT, THE LEARNED AR REFERRED TO THE POSSESSION CERTIF ICATE GIVEN BY THE PURCHASER, A COPY OF WHICH AT PAGE 39 OF THE PAPER BOOK. TO SUBSTANTIATE HIS CLAIM THAT THE FULL CONSIDERATION WAS NOT RECEIVED AT THE TIME OF EXECUTION OF AGREEMENT OF SALE CUM GPA THE LEA RNED AR REFERRED TO A CONFIRMATION LETTER OF M/S SHANTA SRIRAM CONSTRUCTION PVT. LTD. AT PAGE 40 OF THE PAPER BOOK. THE LEARNED AR SUBMITTED THAT THE NOC FOR THE PROJECT WAS ALSO GIVEN BY THE GOVERNMENT ON 5-4-2008. THE LEARNED AR REFERRING TO THE MUNICIPAL TAX RECEIPT, A COPY OF WHI CH IS AT 45 OF THE PAPER BOOK, AND WATER CHARGES PAYMENT RECEIPT SUBMITTED THAT THESE RECEIPTS WOULD PROVE THAT THE TRANSFER OF THE PROPER TY HAS NOT TAKEN PLACE IN THE FINANCIAL YEAR 2004-05. THE LEARNED AR REFE RRING TO SECTION 54 OF TRANSFER OF PROPERTY ACT, SUBMITTED THAT IN CASE OF IMMO VABLE PROPERTY, TRANSFER IS NOT COMPLETE UNLESS POSSESSION OF THE PROPERTY I S DELIVERED TO THE PURCHASER. THE LEARNED AR SUBMITTED THAT SINCE NO A CTION IN TERMS OF THE AGREEMENT OF SALE CUM GPA WAS UNDERTAKEN BY THE PURCHASER DURING THE FINANCIAL YEAR 2004-05 AND SINCE THE POSSESSION WAS ALSO NOT DELIVERED TO THE PURCHASER, IT CANNOT BE SAID THAT TRANSFER IN TER MS OF SECTION 2(47)(V) OF THE ACT HAS TAKEN PLACE DURING THE FINANCI AL YEAR 2004-05. IN SUPPORT OF SUCH CONTENTION,. THE LEARNED AR RELIED UPO N A DECISION OF ITAT, HYDERABAD BENCH IN THE CASE OF K. RADHIKA V/S. DCIT(47 SOT180). 9. THE LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HAND, SUBMITTED THAT NOT ONLY THE AGREEMENT OF SALE CUM GPA WAS EXECUTED ON 17-12-2004 AND PRESENTED BEFORE THE SRO BUT THE ASSESSE E ALSO RECEIVED ALMOST 99% OF THE SALE CONSIDERATION FROM THE PURCHASER LEAVING ASIDE A PALTRY SUM OF RS.50,000/-. IT WAS SUBMITTED THAT THE TERMS OF THE AGREEMENT OF SALE CUM GPA ALSO MADE IT CLEAR THAT THE O WNERSHIP OF THE PROPERTY HAS BEEN TRANSFERRED TO THE PURCHASER. THE L EARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE POSSESSION CERTIFICATE GIVEN BY THE PURCHASER STATING THAT THE POSSESSION WAS HAND ED OVER ON 27-3-2006 IS ONLY AN AFTERTHOUGHT TO DEFER THE TAX L IABILITY. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT WHEN THE A SSESSEE HAS ITA NO.351 /HYD/2011 DOCTOR HRIDAYA MOHAN LAL, HYDERABAD 7 EXECUTED THE AGREEMENT OF SALE CUM GPA AND HAS RECEIVED ALMOST ENTIRE SALE CONSIDERATION, EFFECTIVELY THERE IS A TRANSFER WITHI N THE MEANING OF SECTION 2(47) OF THE ACT IN THE IMPUGNED ASSESSMENT YEAR. IN SUPPORT OF SUCH CONTENTION, THE LEARNED DEPARTMENTAL REPRESENTATI VE RELIED UPON THE FOLLOWING DECISION:- I) MALI FLOREX LIMITED V/S. DCIT 19 ITR (TRIB.) 791 10. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIES AND PERUSED THE MATERIALS ON RECORD AS WELL AS THE ORDERS OF THE REVENUE AUTHORITIES. THE ISSUE BEFORE US IS WHETHER THE CAPITAL GAIN FROM SALE O F PROPERTY ARISES DURING THE IMPUGNED ASSESSMENT YEAR OR IN ASSESSMENT YEAR 2 006-07, AS CLAIMED BY THE ASSESSEE. IT IS NOT DISPUTED THAT THE ASSESSE E HAS ENTERED INTO AN AGREEMENT OF SALE CUM GPA WITH THE PURCHASERS ON 17-12-2004 AND THE SAID DOCUMENT WAS PRESENTED FOR REGISTRATION BEF ORE THE SRO. IT IS ALSO A FACT, WHICH IS ALSO PRETTY MUCH EVIDENT FROM TH E AGREEMENT OF SALE CUM GPA A COPY OF WHICH IS AT PAGE-5 OF THE PAPER BOOK SUBMITTED BY THE ASSESSEE, THAT ON THE DATE OF EXECUTION OF THE AGRE EMENT OF SALE CUM GPA THE ASSESSEE HAS RECEIVED ALMOST THE ENTIRE SALE CONSIDE RATION OF RS.1,11,00,000/- LEAVING ASIDE A BALANCE OF RS.50,000/ - ONLY. THE RECITAL AT PAGE-6 OF THE SAID AGREEMENT OF SALE CUM GPA ALSO M AKES IT CLEAR THAT ON RECEIPT OF THE CONSIDERATION THE ASSESSEE CONVEYS, TRAN SFERS, ASSIGNS AND GRANTS BY WAY OF ABSOLUTE SALE TO THE PURCHASERS THE TITLE OVER THE SCHEDULED PROPERTY. CLASUSE-2 AT 7 OF THE AGREEMENT A LSO AUTHORIZES THE PURCHASERS TO UNDERTAKE THE SURVEY DEMARCATION, LEVELING AND KAE PLANS, ARCHITECTURAL DESIGNS, DETERMINE THE STRUCTURAL SPECIFICATIO NS AND DO SUCH OTHER ANCILLARY ACTS AND DEEDS FOR CONSTRUCTION OF THE PR OPERTY. THEREFORE READING OF THE AGREEMENT AS A WHOLE GIVES AN IMPRESSION THAT THE ASSESSEE HAS TRANSFERRED HIS RIGHT OVER THE PROPERTY IN TE RMS WITH AGREEMENT OF SALE CUM GPA. THIS BECOMES FURTHER CLEAR F ROM THE FACT THAT THE AGREEMENT OF SALE CUM GPA WAS PRESENTED BEFORE THE SRO FOR REGISTRATION ON 17-12-2004 AND THE REGISTRATION OF TH E DOCUMENT WAS ITA NO.351 /HYD/2011 DOCTOR HRIDAYA MOHAN LAL, HYDERABAD 8 DEFERRED TILL 20-2-2006 ONLY BECAUSE THE MARKET VALUE OF THE PROPERTY FOR STAMP DUTY PURPOSES WAS PENDING FOR DETERMINATION BEFO RE THE DISTRICT REGISTRAR, HYDERABAD AND ON PAYMENT OF DEFICIT STAMP DU TY OF RS.11,01,645 THE DOCUMENT WAS REGISTERED AND RETURNED B ACK TO THE PARTY. THIS FACT AS CLARIFIED BY THE SRO VIDE HIS LE TTER DATED 16-12-2008 WHICH HAS BEEN EXTRACTED IN THE ASSESSMENT ORDER HAS NOT BE EN CONTROVERTED BY THE ASSESSEE. IT CLEARLY ESTABLISHES THE F ACT THAT THERE WAS A TRANSFER OF THE SCHEDULED PROPERTY BY THE ASSESSEE TO THE PURCHASER FOR ALL INTENT AND PURPOSES ON 17-12-2004 I.E. DURING THE FINANCIAL YEAR 2004-05. THIS COUPLED WITH THE FACT THAT ALMOST THE ENT IRE SALE CONSIDERATION WAS RECEIVED BY THE ASSESSEE ON THE DATE OF EXECUTION OF AGREEMENT OF SALE CUM GPA ON 17-12-2004 ALSO GIVE CREDE NCE TO THE FACT THAT THE AGREEMENT OF SALE CUM GPA WAS ACTED UPON. IT MAY BE A FACT THAT SOME OF THE CHEQUES ISSUED BY THE PURCHASERS BOUNCED AS A RESULT OF WHICH THE ASSESSEE COULD REALISE AN AMOUNT OF RS.80.50 LAKH S DURING THE FINANCIAL YEAR 2004-05 AND BALANCE RS.30.50 LAKHS WAS R ECEIVED SUBSEQUENTLY IN FINANCIAL YEAR 2005-06, BUT THAT DOES N OT IN ANY WAY DILUTE THE FACT THAT ASSESSEE HAD RECEIVED THE CONSIDERATION ON TH E DATE OF EXECUTION OF THE AGREEMENT AND CONVEYED THE PROPERTY TO THE PURCHASER. THE CERTIFICATE ISSUED BY THE PURCHASER ACKNOWLEDGING TAKI NG POSSESSION OF THE PROPERTY ON 27-3-2006, IN THE GIVEN CIRCUMSTANCES, IS ONLY A SELF SERVING DOCUMENT WITHOUT HAVING MUCH IMPORTANCE. SO F AR AS THE PAYMENT OF MUNICIPAL TAX IS CONCERNED, A PERUSAL OF THE SAME MAKES IT CLEAR THAT ONLY AFTER RECEIPT OF THE NOTICE U/S 148 OF THE ACT THE ASSESSEE HAD PAID THE MUNICIPAL TAX ON 9-7-2009 TO CREATE AN EVIDENCE IN ITS FAVOUR TO SHOW THAT HE WAS STILL IN POSSESSION OF THE SAID PROPERTY. 11. THE HONBLE BOMBAY HIGH COURT IN CASE OF CHATURBHUJ DWARKADAS KAPADIA V/S. CIT (260 ITR 491) HELD THA T DATE OF DELIVERY OF ACTUAL POSSESSION CANNOT BE THE SOLE IN DICATOR TO DECIDE TRANSFER.IF THE CONTRACT READ AS A WHOLE INDICATES PA SSING OF OR ITA NO.351 /HYD/2011 DOCTOR HRIDAYA MOHAN LAL, HYDERABAD 9 TRANSFERRING OF CONTROL OVER THE PROPERTY IN FAVOUR OF THE DEVELOPER, THEN THE DATE OF THE CONTRACT WOULD BE RELEVANT TO DE CIDE THE YEAR OF CHARGEABILITY. THE ITAT, HYDERABAD BENCH IN CASE OF K. RADHIKA V/S. DCIT (41 SOT 180) ALSO EXPRESSED SIMILAR VIEW BY HOLDING THAT IF THE JOINT DEVELOPMENT AGREEMENT IS ACTED UPON BY THE DEVELOPER BY PERFORMING HIS PART OF THE CONTRACT, THEN THE DATE OF AGREEMENT WOULD BE CONSIDERED AS THE DATE OF TRANSFER. IN THE CASE BEFORE US, THE AGREEMENT OF SALE CUM GPA READ AS A WHOLE COUPLE D WITH THE FACT THAT SUBSTANTIAL PORTION OF THE SALE CONSIDERATI ON WAS PAID TO THE ASSESSEE ON THE DATE OF AGREEMENT OF SALE CERTAINLY PROVES THAT THERE HAS BEEN A TRANSFER WITHIN THE MEANING OF SECTI ON 2(47)(V) OF THE ACT DURING THE FINANCIAL YEAR 2004-05. THE ASSE SSEE HAS NOT BEEN ABLE TO PROVE THE CONTRARY BY PRODUCING SUPPORTING EVIDENCE WHICH COULD ESTABLISH THAT THERE WAS NO ACT ON HIS P ART TO CONVEY, TRANSFER, ASSIGN THE TITLE OF THE PROPERTY TO THE OW NER BY WAY OF ABSOLUTE SALE AS MENTIONED IN THE AGREEMENT OF SALE CUM GPA DATED 17/12/2004. IN THIS VIEW OF THE MATTER, WE ARE NOT IN CLINED TO ACCEPT THE CONTENTION OF THE ASSESSEE AND ACCORDINGL Y UPHOLD THE ORDER OF AUTHORITIES BELOW IN CHARGING THE CAPITAL GAI N IN THE YEAR UNDER DISPUTE. THE GROUNDS RAISED ARE THEREFORE DISMIS SED. 12. THE ASSESSEE HAS ALSO RAISED THE FOLLOWING TWO ADDITIONAL GROUNDS:- I) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED ASSESSING OFFICER AND LEARNED CIT(A) F AILED TO APPRECIATE THAT THE APPELLANT IS ENTITLED TO CLA IM DEDUCTION U/S 54F OF THE I T ACT AS THE SALE PROCEE DS WERE INVESTED IN THE PURCHASE OF NEW FLAT AT NOIDA WELL WITHIN THE TIME PRESCRIBED UNDER SEC. 139(4) OF THE IT ACT. THE LEARNED ASSESSING OFFICER AND CIT(A) FAILED ITA NO.351 /HYD/2011 DOCTOR HRIDAYA MOHAN LAL, HYDERABAD 10 TO FOLLOW THE LAW LAID DOWN BY THE JURISDICTIONAL T RIBUNAL IN THE CASE OF CHALASANI SRIONIVAS IN THIS REGARD. II) THE LEARNED A.O AND THE LEARNED CIT(A) ERRED IN NOT ALLOWING THE DEDUCTION OF RS.5 LAKHS CLAIMED BY THE APPELLANT WHICH AMOUNT WAS PAID BY THE APPELLANT TO HIS SISTERS AS COMPENSATION FOR OBTAINING THEIR CONSENT FOR THE TRANSFER OF ASSET. THE AUTHORITIES BELOW FAILE D TO APPRECIATE THAT SINCE THE SAID EXPENDITURE IS CONNE CTED TO TRANSFER, THE SAME OUGHT TO HAVE BEEN ALLOWED AS DEDUCTION. SO FAR AS THE ADDITIONAL GROUND NO.1 RELATING TO DEDUC TION U/S 54F IS CONCERNED, IT IS THE CONTENTION OF THE LEARNED AR T HAT THE ASSESSEE HAD INVESTED THE SALE CONSIDERATION RECEIVED IN PURCH ASE OF A NEW FLAT AT NOIDA BY INVESTING AN AMOUNT OF RS.73,50,00 0/-. THE LEARNED AR FURTHER SUBMITTED THAT SINCE THE ASSESSEE HAD SHOWN THE CAPITAL GAIN IN THE ASSESSMENT YEAR 2006-07, HE HAD ALSO CLAIMED DEDUCTION U/S 54F OF THE ACT IN THE RETURN FILED FOR T HAT ASSESSMENT YEAR. HOWEVER, SINCE THE ASSESSING OFFICER HAS HELD TH E CAPITAL GAIN TO BE CHARGEABLE TO TAX IN THE ASSESSMENT YEAR 2005 -06, HE SHOULD ALSO HAVE CONSIDERED THE ASSESSEES CLAIM U/S 54F OF THE ACT AS THE SALE PROCEEDS WERE INVESTED IN THE PURCHASE OF NEW F LAT WELL WITHIN THE TIME PRESCRIBED U/S 139(4) OF THE ACT. IN SUPPORT OF SUCH CONTENTION, THE LEARNED AR RELIED UPON THE FOLLOWING TWO DECISIONS OF ITAT, HYDERABAD BENCH:- 1) ITA NO.277/HYD/2012- DATED 29-6-2012 IN CASE OF ACIT V/S. SRI T.C. ASHOK 2) ITA NO.717/HYD/08 DATED 11-7-2008 IN CASE OF CHALASANI SRINIVAS V/S. ITO ITA NO.351 /HYD/2011 DOCTOR HRIDAYA MOHAN LAL, HYDERABAD 11 13. THE LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE O THER HAND, SUBMITTED THAT SINCE THE ASSESSEE HAS NOT MADE ANY CLAIM OF DEDUCTION U/S 54F OF THE ACT IN THE RETURN FILED FOR THE IMPUGNED ASSESSMENT YEAR, NO DEDUCTION CAN BE ALLOWED. 14. WE HAVE HEARD THE SUBMISSIONS OF THE PARTIES AND PERUSED THE MATERIALS ON RECORD. A PERUSAL OF THE IMPUGNED ASSE SSMENT ORDER MAKES IT CLEAR THAT THE ASSESSING OFFICER HAS HIMSELF MENTIONED THAT THE ASSESSEE HAS CLAIMED DEDUCTION U/S 54F OF THE AC T IN THE RETURN FILED FOR THE ASSESSMENT YEAR 2006-07. HOWEVER, THE A SSESSING OFFICER HAS HELD THE CAPITAL GAIN TO BE CHARGEABLE TO TAX IN THE IMPUGNED ASSESSMENT YEAR I.E. 2005-06. THEREFORE, W HILE COMPUTING THE CAPITAL GAIN FOR THE IMPUGNED ASSESSME NT YEAR, THE ASSESSING OFFICER IS REQUIRED TO ALLOW ALL DEDUCTIONS AND BENEFITS PERMISSIBLE UNDER THE PROVISIONS OF THE ACT AND WHICH THE ASSESSEE IS ELIGIBLE TO GET. THEREFORE, IF THE ASSESSEE IS ELIG IBLE FOR DEDUCTION U/S 54F OF THE ACT, THE SAME CAN BE CONSIDERED BY THE A SSESSING OFFICER. SINCE THE AFORESAID ISSUE WAS NEITHER RAISED BEFORE T HE ASSESSING OFFICER NOR THE CIT(A) AND WAS RAISED FOR THE FIRST T IME BEFORE US, WE CONSIDER IT APPROPRIATE TO REMIT THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER WHO SHALL DECIDE THE SAME IN ACCOR DANCE WITH LAW AFTER AFFORDING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 15. GROUND NO.2 OF ADDITIONAL GROUND RAISED BY THE A SSESSEE IS WITH REGARD TO CLAIM OF EXPENDITURE OF RS.5 LAKHS BEI NG THE AMOUNT PAID BY THE ASSESSEE TO HIS SISTERS AS COMPENSATION FOR OBTAINING THEIR CONSENT FOR TRANSFER OF ASSETS. ITA NO.351 /HYD/2011 DOCTOR HRIDAYA MOHAN LAL, HYDERABAD 12 16. WE HAVE HEARD THE SUBMISSIONS OF THE PARTIES AND PERUSED THE MATERIAL ON RECORD. IT IS THE CONTENTION OF THE ASSE SSEE THAT AN AMOUNT OF RS.5 LAKHS WAS PAID AS COMPENSATION TO HI S SISTERS FOR OBTAINING THEIR CONSENT FOR TRANSFER OF ASSET WHICH SHO ULD HAVE BEEN ALLOWED AS EXPENDITURE. HOWEVER, FROM THE DISCUSSIONS MADE BY THE CIT(A) IN PARAGRAPH 8 AND 9 OF THE ORDER IT BECOMES CLE AR THAT THE DECLARATIONS FROM HIS SISTERS WERE OBTAINED PRIOR TO 1 7-12-2004 WHEREAS THE PAYMENT RS.5 LAKHS WAS MADE BY THE ASSE SSEE ONLY ON 2-4-21006. FURTHER, THE ASSESSEE WAS NOT ABLE TO S UBSTANTIATE WITH SUPPORTING EVIDENCE THAT THE AMOUNT OF RS.5 LAKHS W AS PAID TO HIS SISTERS ON ACCOUNT OF COMPENSATION TO THEM FOR OBTA INING THE SWORN DECLARATION. IN AFORESAID VIEW OF THE MATTER, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) WHICH IS ACCORDING LY CONFIRMED. 17. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 07-01-2014. SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER SD/- (SAKTIJIT DEY) JUDICIAL MEMBER HYDERABAD, DATED THE JANUARY, 2014. JMR* COPY FORWARDED TO:- 1. C/O SRI K. VASANT KUMAR, A.V. RAGHU RAM, ADVOCATES, 61 0, 6 TH FLOOR, BABUKHAN ESTATE, BASHEERBAGH, HYDERABAD. 2. ITO, WARD-6(2), HYDERABAD. 3. CIT (A)-IV, HYDERABAD. 4. CIT-III, HYDERABAD. 5. THE DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. ITA NO.351 /HYD/2011 DOCTOR HRIDAYA MOHAN LAL, HYDERABAD 13