ITO, Gwalior V. M/s Ganga Prasad Sharma, HUF, Gwalior

ITA 354/AGR/2009

• Counselvise Citation: 35420314 RSA 2009
• Duration Of Justice: 1 year(s) 10 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 21-07-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 09-09-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: HOMI RAJVANSH
• Assessee Lawyers: K C AGARWAL
• Keywords: Sale consideration of property below Jantri Value; Assessment record; Revised return
• Section: 143(3); 50C; 131; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI P.K. BANSAL, ACCOUNTANT MEMBER AND SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO.354/AGR/2009 ASSESSMENT YEAR: 2003-04 INCOME TAX OFFICER, VS. M/S GANGA PRASAD SHARMA, HUF, WARD 3(2), GWALIOR. MAHALGAON, KAROLI MATA MANDI R, GWALIOR. (PAN : AACHN 4745 B). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI HOMI RAJ VANSH, C.I.T. (D.R.) RESPONDENT BY : SHRI K.C. AGARWAL, ADVOCATE ORDER PER H.S. SIDHU, J.M. : THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST TH E ORDER DATED 28.05.2009 PASSED BY THE LD. CIT(A), GWALIOR ON THE FOLLOWING GROUNDS OF APPEAL :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LD. CIT(APPEALS) HAS ERRED IN DELETING THE ADDITION MAD E ON ACCOUNT OF LONG TERM CAPITAL GAIN AMOUNTING TO ` 1,49,91,380/-. THE APPELLANT RESERVES HIS RIGHT TO ADD, AMEND OR A LTER THE GROUNDS OF APPEAL ON OR BEFORE THE DATE, THE APPEAL IS FINALLY HEARD FOR DISPOSAL. 2 2. THE BRIEF FACTS RELATING TO THE ISSUE IN DISPUTE ARE THAT THE ASSESSEE IS A HUF FILED ITS RETURN OF INCOME ON 22.02.2005 SHOWING TO TAL INCOME OF ` 15,790/- AND AGRICULTURAL INCOME OF ` 48,000/- WHICH WAS PROCESSED BY THE ASSESSING OFFIC ER UNDER SECTION 143(1) OF THE INCOME TAX ACT, 1961 ( THE ACT HEREINAFTER). THE ASSESSING OFFICER ORIGINALLY COMPLETED THE ASSESSME NT UNDER SECTION 143(3) OF THE ACT ON 09.03.2006 DETERMINING TOTAL INCOME AT ` 16,51,615/-, AGGRIEVED BY THE SAME, THE ASSESSEE FILED APPEAL BEFORE THE LD. FIRS T APPELLATE AUTHORITY, GWALIOR WHO, VIDE ORDER DATED 10.08.2007, DELETED THE ADDIT ION MADE BY THE ASSESSING OFFICER BY ALLOWING THE APPEAL FILED BY THE ASSESSE E. THE DEPARTMENT HAS FILED AN APPEAL BEFORE THE I.T.A.T. WHICH WAS PENDING TILL T HE COMPLETION OF ASSESSMENT ORDER IN DISPUTE. 3. ON THE BASIS OF SOME INFORMATION, THE ASSESSING OFFICER NOTICED THAT DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR 2 003-04, THE ASSESSEE SOLD 4 BIGHAS OF AGRICULTURAL LAND SITUATED AT ODHPUR TO S HIVA GRAH NIRMAN SAHKARI SAMITI, MARYADIT, GWALIOR FOR ` 8,00,000/-. THIS SALE TRANSACTION WAS NOT SHOWN BY THE ASSESSEE IN THE ORIGINAL RETURN OF INCOME FI LED FOR ASSESSMENT YEAR 2003-04 ON 22.02.2005 FROM WHICH THE CAPITAL GAIN CAME TO ` 3,53,000/-. ON THE BASIS OF THE SAID INFORMATION, THE ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 148 OF THE ACT TO THE ASSESSEE ON 11.05.2007 WHICH WAS DULY SE RVED UPON THE ASSESSEE ON 14.05.2007. THE ASSESSEE RECTIFIED THE MISTAKE BY FILING REVISED RETURN ON 3 13.05.2007 IN WHICH THIS SALE TRANSACTION HAS BEEN DISCLOSED WHICH WAS NOT DISCLOSED IN THE ORIGINAL RETURN. 4. THE ASSESSING OFFICER RAISED THE FOLLOWING QUERI ES VIDE OFFICE LETTER DATED 20.11.2008 ENCLOSED WITH NOTICE UNDER SECTION 142(1 ) DATED 20.11.2008 AND THE ASSESSEE HAS SUBMITTED ITS REPLY TO THE QUERIES WHI CH ARE AS UNDER :- (I) ON PERUSAL OF ASSESSMENT RECORDS FOR A.Y. 2003 -04, IT WAS NOTICED THAT DURING THE PREVIOUS YEAR RELEVANT TO A .Y. 2003-04 THE FOLLOWING AGRICULTURAL LANDS SITUATED AT ODHPUR WAS SOLD BY THE ASSESSEE. DATE OF SALE NAME OF THE PURCHASER AREA OF LAND TOTAL SALE CONSIDERATION 11.09.2002 ANNAPURNA GRAH NIRMAN SAHKARI SAMITI LTD., GWALIOR 31.02 BIGHAS ` 31,27,500/- 22.01.2003 AWAS VIKAS GRAH NIRMAN SAHKARI SAMITI, GWALIOR 18.19 BIGHAS ` 18,50,000/- FROM THE INFORMATION IN POSSESSION OF THE DEPARTMEN T IN RESPECT OF ABOVE MENTIONED AGRICULTURAL LANDS IT IS SEEN TH AT ASSESSEE ENTERED INTO AN AGREEMENT ON 29.06.2001 WITH ANNAPURNA GRAH NIRMAN SAHKARI SAMKTI LIMITED, CITY CENTRE GWALIOR FOR SAL E OF ABOVE MENTIONED AGRICULTURAL LAND EXCEPT YOUR SHARE AND S HARE OF SHRI RAM KUMAR SHARMA FOR TOTAL SALE OF CONSIDERATION OF ` 1,29,75,000/- AND ASSESSEE RECEIVED A SUM OF ` 6,00,000/- IN CASH AT THE TIME OF AGREEMENT I.E. ON 29.06.2001. ASSESSEE WAS REQUEST ED TO PLEASE EXPLAIN THE CIRCUMSTANCES UNDER WHICH HE ENTERED IN TO SUCH AN AGREEMENT AND LATER ON THE SAID LAND WAS SOLD FOR ` 31,27,500/- AS AGAINST SALE AGREEMENT OF ` 1,29,75,000/- WITH SUPPORTING DOCUMENTARY EVIDENCES. 4 (II) FROM THE INFORMATION IN POSSESSION OF DEPARTME NT IT WAS SEEN THAT DURING THE PREVIOUS YEAR RELEVANT TO A.Y. 2003 -04 ASSESSEE SOLD 4 BIGHAS OF AGRICULTURAL LAND SITUATED AT ODHPUR TO S HIVA GRAH NIRMAN SAHKARI SAMITI GWALIOR FOR SALE CONSIDERATION OF ` 8,00,000/-. THIS SALE TRANSACTION WAS NOT DISCLOSED IN THE RETURN OF INCOME FILED FOR A.Y. 2003-04 ON 22.02.2005. ASSESSEE WAS ASKED TO EXPLAIN THE CIRCUMSTANCES UNDER WHICH THE SAID TRANSACTION WAS NOT DISCLOSED IN THE RETURN OF INCOME FILED FOR A.Y. 2003-04 ON 22.0 2.2005. (III) FROM THE INFORMATION IN POSSESSION OF DEPARTM ENT IT WAS SEEN THAT THE ASSESSEE ENTERED INTO AN AGREEMENT ON 13.0 5.1996 WITH MODERN GRAH NIRMAN SAHKARI SAMITI GWALIOR FOR SALE OF 51 BIGHAS OF AGRICULTURAL LAND SITUATED AT MAHALGAON, GWALIOR FO R ` 51,00,000/- @ ` 1,00,000/- PER BIGHA AND ENTIRE SALE AMOUNT OF ` 51,00,000/- WAS RECEIVED BY THE ASSESSEE IN CASH AT THE TIME OF AGR EEMENT. ASSESSEE REQUESTED TO STATE WHETHER THE SAID AGREEMENT HAS B EEN EXECUTED OR NOT. IF THE AGREEMENT HAS BEEN EXECUTED PLEASE FUR NISH DATE OF EXECUTION OF AGREEMENT WITH COPY OF SALE DEED. (IV) FROM THE INFORMATION IN POSSESSION OF DEPARTME NT IT WAS SEEN THAT DURING THE PREVIOUS YEAR RELEVANT TO A.Y. 2003 -04 SHRI RAM KUKMAR SHARMA, MEMBER OF HUF M/S GANGA PRASAD SHARM A & SONS (HUF) HAS PURCHASED A PORTION OF LAND AT OUDHPUR ON 28.11.2002 FROM ANNAPURNA GRAH NIRMAN SAHKARI SAMITI, GWALIOR FOR ` 9,35,000/-. ASSESSEE WAS REQUESTED TO EXPLAIN THE SOURCE OF INVESTMENT OF ` 9,35,000/- MADE IN PURCHASE OF ABOVE MENTIONED LAND WITH SUPPORTING DOCUMENTARY EVIDENCES. ASSESSEE WA S ALSO REQUESTED TO SATE WHETHER THE TRANSACTION HAS BEEN DISCLOSED OR NOT IN THE RETURN OF INCOME FILED FOR A.Y. 2003-04. 4. IN COMPLIANCE TO ABOVE MENTIONED QUERIES RAISED VIDE LETTER DATED 20.11.2008 ASSESSEE FILED A WRITTEN REPLY ON 28.11.2008. THE POINT-WISE REPLY TO THE QUERIES HAS BEEN SUBMITTED BY THE ASSESSEE AS UNDER :- (I) ASSESSEE SOLD LAND MEASURING 31.02 BIGHAS FOR ` 31,27,500/- TO M/S ANNAPURNA GRAH NIRMAN SAHKARI SAMITI ON 11.09.2 002 AND ALSO SOLD 18.19 BIGHAS LAND FOR ` 18,50,000/- TO AWAS GRAH NIRMAN SAHKARI SAMITI, GWALIOR ON 22.01.2003. BOTH THE TR ANSACTIONS HAVE BEEN MADE THROUGH THE REGISTERED SALE DEED. THE AS SESSEE ENTERED 5 INTO AN AGREEMENT TO SALE THE AGRICULTURE LAND MEAS URING 31.02 BIGHAS TO ANNAPURNA GRAH NIRMAN SAHKARI SAMITI, GWA LIOR FOR A TOTAL SALE CONSIDERATION OF ` 1,29,75,000/- AND HAS RECEIVED AN ADVANCE OF ` 6,00,000/-. THIS AGREEMENT HAS LATER ON BEING CANC ELLED BETWEEN TWO PARTIES DUE TO VARIOUS REASONS AND FOR WHICH THE PARTIES HAVE ENTERED INTO AN AGREEMENT TO CANCEL THE SAME T RANSACTION. LATER ON THE ASSESSEE SOLD THE SAME LAND TO ANNAPURNA GRA H NIRMAN SAHKARI SAMITI FOR ` 31,27,500/- AT THE PREVAILING MARKET RATE. THE ASSESSEE HAS ALSO SOLD ITS 18.19 BIGHAS OF LAND FOR ` 18,50,000/- ON 22.01.2003 AT THE SAME RAW TO ANOTHER SOCIETY NAMEL Y AWAS VIKAS GRAH NAIRMAN SAHKARI SAMITI GWALIOR. BOTH THE LAND S ARE SITUATED AT VILLAGE ODHPUR. (II) AS REGARDS SALE OF 4 BIGHAS OF AGRICULTURAL LA NDS SITUATED AT ODHPLUR TO SIVA GRAH NIRMAN SAHKARI SAMITI GWALIOR FOR SALE CONSIDERATION OF ` 18,00,000/- DURING THE PREVIOUS YEAR RELEVANT TO A.Y. 2003-04 IT HAS BEEN SUBMITTED BY THE ASSESSEE THAT THE ASSESSEE WAS MISTAKEN HAS OVER LOOKED TO REVEAL THE SALE OF LAND FOR ` 8,00,000/- IN THE ORIGINAL RETURN OF INCOME BUT LAT ER ON HAS VOLUNTARY FILED THE REVISED RETURN SHOWING THE ABOVE SAID TRA NSACTION. (III) AS REGARDS AGREEMENT MADE ON 13.05.1996 FOR S ALE OF 51 BIGHAS OF AGRICULTURAL LAND WITH MODERN GRAH NIRMAN SAHKARI SAMITI GWALIOR IT HAS BEEN SUBMITTED THAT THOUGH IT IS TRU E THAT ASSESSEE ENTERED INTO AN AGREEMENT WITH M/S MODERN GRAH NIRM AN SAHKARI SAMITI GWALIOR FOR SALE OF AGRICULTURAL LAND MEASUR ING 51 BIGHAS FOR ` 51,00,000/- BUT THIS TRANSACTION COULD NOT BE COMPL ETED BECAUSE THE PWD DEPARTMENT HAS CLAIMED THE OWNERSHIP OF THE LAN D AND THE MATTER IS UNDER LITIGATION BEFORE THE HONBLE M.P. HIGH COURT BENCH GWALIOR. THE ASSESSEE HAS ALSO ENCLOSED A COPY OF APPEAL FILED AGAINST THE PWD DEPARTMENT ON 19.02.2007. (IV) AS REGARDS PURCHASE OF LAND BY SHRI RAM KUMAR SHARMA MEMBER OF HUF FOR ` 9,35,000/- ON 28.11.2002 FROM ANNAPURNA GRAH NIRMAN SAHKARI SAMITI GWALIOR FOR ` 9,35,000/- IT HAS BEEN SUBMITTED BY THE ASSESSEE THAT THE HUF HAS NO KNOWL EDGE WITH THIS TRANSACTION AND HAS NOTHING TO DO WITH THIS TRANSAC TION MADE BY SHRI RAM KUMAR SHARMA. 6 5. AFTER GOING THOUGH THE REPLY DATED 28.11.2008, F ILED BY THE ASSESSEE TO THE QUERY RAISED BY THE ASSESSING OFFICER DATED 20.11.2 008, THE ASSESSING OFFICER WAS OF THE OPINION THAT THE ASSESSEE ENTERED INTO AN AG REEMENT WITH M/S ANNAPURNA GRAH NIRMAN SAHKARI SAMITI ON 29.06.2001 FOR SALE O F 25 BIGHAS 9 BISWAS OF AGRICULTURAL LAND SITUATED AT ODHPUR FOR TOTAL SALE CONSIDERATION OF ` 1,29,75,000/- AT THE RATE OF ` 5,00,000/- PER BHIGA AND LATER ON THE ENTIRE LAND M EASURING 31.02 BIGHAS INCLUDING 25 BIGHAS 9 BISWAS LAND FOR WHICH AGREEMENT TO SALE WAS MADE ON 29.06.2001 HAS BEEN SOLD TO M/S ANNAPURNA GRAH N IRMAN SAHKARI SAMITI ON 11.09.2002 FOR TOTAL SALE CONSIDERATION OF ` 31,27,500/- AT THE RATE OF ` 1,00,000/- PER BIGHA. THE ASSESSEE HAS ALSO SOLD 4 BIGHAS OF AGRICULTURAL LAND SITUATED AT ODHPUR TO SIVA GRAH NIRMAN SAHKARI SAMITI GWALIOR O N 17.05.2002 FOR TOTAL SALE CONSIDERATION OF ` 8,00,000/- WHICH HAS NOT BEEN DISCLOSED IN THE RET URN OF INCOME ORIGINALLY FILED FOR ASSESSMENT YEAR 2003-04 ON 22. 02.2005. 6. THE ASSESSING OFFICER ISSUED SUMMONS UNDER SECTI ON 131 OF THE ACT IN THE NAME OF SHRI GANGA PRASAD SHARMA, KARTA OF M/S GANG A PRASAD SHARMA & SONS HUF, GWALIOR ON 12.12.2008 AND SHRI RAJENDRA UPADHY AY, PRESIDENT AND SHRI M.K. SHARMA, EX-PRESIDENT OF ANNAPURNA GRAH NIRMAN SAHKARI SAMITI, GWALIOR ON 21.11.2008 AND 12.12.2008 TO EXAMINE THEM ON OAT H, IN CONNECTION WITH THE AGREEMENT TO SALE OF 25 BHIGA 1 BISWA AGRICULTURE L AND SITUATED AT ODHPUR MADE ON 29.06.2001 WITH ANNAPURNA GRAH NIRMAN SAHAKARI SAMI TI, GWALIOR FOR TOTAL SALE 7 CONSIDERATION OF ` 1,29,75,000/-. IN RESPONSE TO THE AFORESAID SUMMO N ISSUED IN THE NAME OF SHRI GANGA PRASAD SHARMA, SHRI DHARMEND RA SHARMA, S/O. SHRI GANGA PRASAD SHARMA APPEARED ON BEHALF OF HIS FATHER SHRI GANGA PRASAD SHARMA STATING THAT HIS FATHER IS MORE THAN 80 YEARS OF AGE AND IS UNABLE TO MOVE AND HE BEING ELDER SON AND AWARE OF ALL THE FACTS RELATING TO AG REEMENT MADE ON 29.06.2001 FOR SALE OF LAND PRESENTED HIMSELF FOR EXAMINATION ON O ATH. THE ASSESSING OFFICER RECORDED THE STATEMENT ON OATH OF SHRI RAJENDRA UPA DHYAY, PRESENT PRESIDENT AND SHRI MUKESH SHARMA, EX-PRESIDENT, ANNAPURNA GRAH NI RMAN SAHKARI SAMITI, GWALIOR ON 28.11.2008 AND 15.11.2008 RESPECTIVELY 7. KEEPING IN VIEW OF THE AFORESAID STATEMENTS RECO RDED BY THE ASSESSING OFFICER AS WELL AS THE WRITTEN REPLY FILED BY THE A SSESSEE, THE ASSESSING OFFICER WAS OF THE OPINION THAT THE AGREEMENT MADE ON 29.06 .2001 WAS DULY NOTARIZED AND WAS MADE WITH THE CONSENT OF ALL THE MEMBERS OF HUF IS A VALID AGREEMENT IN THE EYES OF LAW AND PROPOSED TO ADOPT THE SALE CONSIDER ATION OF AGRICULTURAL LAND SOLD DURING THE YEAR TO M/S ANNAPURNA GRAH NIRMAN SAHKAR I SAMITI FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAIN AT ` 1,29,75,000/- AS PER AGREEMENT DATED 29.06.2001 IN PLACE OF ` 31,27,500/-. THE ASSESSING OFFICER ASKED THE ASSE SSEE TO SUBMIT OBJECTION, IF ANY, BY 22.12.2008. IN RESPONSE TO T HE SAME, THE ASSESSEE FILED WRITTEN EXPLANATION DATED 22.12.2008 WHICH THE ASSESSING OF FICER HAS REPRODUCED IN PAGE NOS. 7 TO 11 AT PARAGRAPH NO 6.1 OF HIS ORDER. THE MAIN CONTENTION RAISED BY THE 8 ASSESSEE IN THE REPLY IS THAT THE AGREEMENT DATED 2 9.06.2001 HAS NOT BEEN APPROVED BY THE SOCIETY NOR ANY PAYMENT HAS BEEN MADE BY THE SOCIETY AND ALSO NOT ACTED UPON AND THE AGREEMENT DATED 29.06.2009 WHICH HAS A LREADY BEEN CANCELLED ON 03.02.2002 AND HAVING NO LEGAL LOCUS STANDY. THERE FORE, AGREEMENT DATED 29.06.2001 HAS NO EVIDENTIARY VALUE AND IT CANNOT B E CONSIDERED FOR ANY PURPOSE. 8. THE ASSESSING OFFICER CONSIDERED THE SUBMISSION MADE BY THE ASSESSEE AND HAS NOT ACCEPTED THE SAME. THE ASSESSING OFFICER H AS ALSO REJECTED THE SUBMISSION OF THE ASSESSEE BECAUSE THE ASSESSEE HAS FILED APPL ICATION UNDER SECTION 144A OF THE ACT TO THE ADDL. COMMISSIONER OF INCOME TAX, RANGE- 3, GWALIOR FOR ISSUE OF DIRECTIONS IN THE ABOVE MENTIONED CASE ON THE ISSUE INVOLVED AND THE ADDL. C.I.T., EANGE-3, GWALIOR VIDE HIS LETTER DATED 23.12.2008 H AD DIRECTED THE ASSESSING OFFICER TO ADOPT THE MARKET VALUE OF THE LAND AT TH E RATE OF ` 5,00,000/- PER BIGHA FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAIN ON S ALE OF AGRICULTURAL LAND SITUATED AT ODHPUR AND SOLD TO M/S ANNAPURNA GRAH NIRMAN SAH KARI SAMITI DURING THE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR 2003-04. THEREFORE, IN VIEW OF THE DIRECTION ISSUED BY THE ADDL. C.I.T., RANGE-3, GWAL IOR, VIDE LETTER DATED 23.12.2008, FULL VALUE OF SALE CONSIDERATION OF 31. 02 BIGHAS OF AGRICULTURAL LAND SOLD TO M/S ANNAPURNA GRAH NIRMAN SAHKARI SAMITI ON 11.09.2002, THE ASSESSING OFFICER HAS ADOPTED AT ` 1,56,37,500/- AT THE RATE OF ` 5,00,000/- PER BIGHA IN 9 PLACE OF ` 31,27,500/- FOR THE PURPOSE OF CALCULATION OF CAPIT AL GAIN ON AGRICULTURAL LAND SOLD BY THE ASSESSEE DURING THE YEAR. 9. THE ASSESSING OFFICER HAS ALSO HELD THAT THE ASS ESSEE HAS ALSO SOLD 18.19 BIGHAS OF AGRICULTURAL LAND SITUATED AT ODHPUR TO A WAS VIKAS GRAH NIRMAN SAHKARI SAMITI, GWALIOR ON 22.01.2003 FOR TOTAL SALE CONSID ERATION OF ` 18,50,000/- AT THE RATE OF ` 1,00,000/- PER BIGHA WHICH IS ADJACENT TO THE LAND SOLD TO M/S ANNAPURNA GRAH NIRMAN SAHKARI SAMITI, GWALIOR. HE ALSO ADOPT ED AT ` 92,50,000/- AT THE RATE OF ` 5,00,000/- IN PLACE OF ` 18,50,000/- SHOWN BY THE ASSESSEE FOR THE PURPOSE O F COMPUTATION OF CAPITAL GAIN IN VIEW OF DIRECTIONS I SSUED BY THE ADDL. C.I.T., RANGE-3, GWALIOR ON 23.12.2008. 10. THE ASSESSING OFFICER ALSO FOUND THAT THE ASSES SEE HAS ALSO SOLD 4 BIGHAS OF AGRICULTURAL LAND SITUATED AT ODHPUR TO SIVA GRAH N IRMAN SAHKARI SAMITI FOR SALE CONSIDERATION OF ` 8,00,000/- AT THE RATE OF ` 2,00,000/- PER BIGHA WHICH WAS NOT DISCLOSED IN THE ORIGINAL RETURN FILED ON 22.02.200 5. THIS LAND WAS ALSO SITUATED NEARBY TO THE LAND SOLD TO M/S ANNAPURNA GRAH NIRMA N SAHKARI SAMITI, GWALIOR AND AWAS VIKAS GRAH NAIRMAN SAHKARI SAMITI, GWALIOR , THE FULL VALUE OF CONSIDERATION OF THIS LAND WAS ALSO ADOPTED AT ` 20,00,000/- AT THE RATE OF ` 5,00,000//- PER BIGHA IN VIEW OF DIRECTIONS ISSUED BY THE ADDL. C.I.T., RANGE-3, GWALIOR ON 23.12.2008 AND HE COMPLETED THE ASSESSME NT ON 26.12.2008 IN THE CASE 10 OF THE ASSESSEE UNDER SECTION 143(3)/147 OF THE ACT . AGGRIEVED BY THE SAME, THE ASSESSEE FILED APPEAL BEFORE THE LD. FIRST APPELLAT E AUTHORITY WHO, VIDE THE IMPUGNED ORDER DATED 28.05.2009, PARTLY ALLOWED THE APPEAL OF THE ASSESSEE BY DELETING THE ADDITION MADE ON ACCOUNT OF LONG TERM CAPITAL GAIN AMOUNTING TO ` 1,49,91,380/-. NOW THE REVENUE, BEING AGGRIEVED BY THE IMPUGNED ORDER DATED 28.05.2009, HAS FILED THE PRESENT APPEAL. 11. THE LD. DEPARTMENTAL REPRESENTATIVE STATED THAT THE LD. FIRST APPELLATE AUTHORITY HAS WRONGLY DELETED THE ADDITION OF ` 1,49,91,380/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF LONG TERM CAPITAL GAIN WHICH IS AGAINST LAW AND FACTS ON FILE. THEREFORE, THE IMPUGNED ORDER DESER VES TO BE CANCELLED. HE RELIED UPON THE ORDER PASSED BY THE ASSESSING OFFICER. 12. ON THE CONTRARY, THE LD. COUNSEL FOR THE ASSESS STATED THAT THE LD. FIRST APPELLATE AUTHORITY HAS RIGHTLY PASSED THE IMPUGNED ORDER AFTER APPRECIATING THE EVIDENCES PRODUCED BY THE ASSESSEE AND AS PER LAW. HE FURTHER STATED THAT THE ORIGINAL ASSESSMENT IN THE CASE OF THE ASSESSEE WAS MADE UNDER SECTION 143(3) ON 09.03.2006 AND THE ASSESSING OFFICER ASSESSED THE I NCOME OF THE ASSESSEE AT ` 16,51,615/- WHICH INCLUDES ESTIMATION OF CAPITAL GA INS BY APPLYING THE PROVISIONS OF SECTION 50C OF THE ACT. AGGRIEVED BY THE SAME, THE ASSESSEE FILED APPEAL BEFORE THE LD. FIRST APPELLATE AUTHORITY WHO ACCEPTED THE APPEAL OF THE ASSESSEE. THE 11 DEPARTMENT HAS PREFERRED APPEAL BEFORE THE I.T.A.T. , AGRA AGAINST THE ORDER OF CIT(A) WHICH HAS ALSO BEEN REJECTED BY THE I.T.A.T. , AGRA BENCH. LATER ON, THE ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 148 O F THE ACT ON THE BASIS OF INFORMATION THAT THE ASSESSEE HAS FAILED TO DISCLOS E THE SALE OF APPROXIMATELY 4 BIGHAS OF AGRICULTURAL LAND FOR ` 8,00,000/- TO SHIVA GRAH NIRMAN SAHKARI SAMITI, GWALIOR IN THE YEAR UNDER CONSIDERATION AND ESTIMAT ED THE LONG TERM CAPITAL GAIN OF ` 3,53,000/- ON THE ABOVE SALE. THE ASSESSEE HAS VOL UNTARILY FILED THE REVISED RETURN SHOWING THE SALES TRANSACTION OF ` 8,00,000/- BEFORE SERVICE OF NOTICE UNDER SECTION 148 OF THE ACT. HE POINTED OUT THAT THE AS SESSING OFFICER, VIDE HIS LETTER DATED 20.11.2008, HAS ASKED THE ASSESSEE TO FURNISH THE EXPLANATION IN RESPECT OF SALE OF CERTAIN LAND AND PROPERTY PURCHASED. IN RE SPONSE TO THE SAME, THE ASSESSEE FURNISHED A LETTER DATED 28.11.2008 AND SATISFACTOR ILY REPLIED TO THE QUESTIONS OF ASSESSING OFFICER. 13. THE LD. COUNSEL FOR THE ASSESSEE MAINLY CONTEND ED THAT AN AGREEMENT DATED 29.06.2001 MADE BETWEEN THE FAMILY MEMBERS OF HUF A ND ANNAPURNA GRAH NIRMAN SAHKARI SAMITI, GWALIOR IN RESPECT OF SALE O F 25.9 BIGHAS OF AGRICULTURAL LAND SITUATED AT ODHPUR HAD BEEN CANCELLED BETWEEN THE PARTIES ON 03.02.2002. HE HAS ALSO DRAWN OUR ATTENTION TOWARDS THE AGREEMENT DATED 29.06.2001 AND CANCELLATION AGREEMENT DATED 03.02.2002 WHICH HE HA S ATTACHED IN THE PAPER BOOK AT PAGE NOS. 19 TO 23 AND 17 TO 18 RESPECTIVELY. H E ALSO FILED A PAPER BOOK 12 CONTAINING PAGE NOS.1 TO 72 IN WHICH HE HAS ATTACHE D WRITTEN REPLY FILED BY THE ASSESSEE BEFORE THE LD. FIRST APPELLATE AUTHORITY, STATEMENT OF SHRI MUKESH SHARMA, SHRI RAJENDRA UPADHYAY & SHRI DHARMENDRA SH ARMA. HE HAS ALSO DRAWN OUR ATTENTION TOWARDS THE REPLY FILED BY THE ASSESS EE DATED 28.11.2008 BEFORE THE ITO 3(2), GWALIOR AND VARIOUS ORDERS PASSED BY THE HONBLE SUPREME COURT OF INDIA AS WELL AS HONBLE DELHI HIGH COURT WHICH HE HAS ATTACHED IN THE SHAPE OF PAPER BOOK CONTAINING PAGE NOS. 1 TO 45. 14. HE CONTENDED THAT THE LD. FIRST APPELLATE AUTHO RITY HAS RIGHTLY APPRECIATED THE STATEMENT OF SHRI MUKESH SHARMA, PAST PRESIDENT AND SHRI RAJENDRA UPADHYAY, PRESENT PRESIDENT OF ANNAPURNA GRAH NIRMAN SAHKARI SAMITI, GWALIOR AS WELL AS THE CO-PARCENER SHRI DHARMENDRA SHARMA WHO HAS CON FIRMED BEFORE THE ASSESSING OFFICER THAT THE AGREEMENT DATED 29.06.2001 HAS BEE N CANCELLED VIDE AGREEMENT DATED 03.02.2002. THE ASSESSING OFFICER HAS NOT PR OPERLY APPRECIATED THE SAME AND MADE THE ADDITION WHICH HAS RIGHTLY BEEN CANCEL LED BY THE LD. FIRST APPELLATE AUTHORITY. 15. LASTLY, THE COUNSEL FOR THE ASSESSEE STATED THA T THE ADDL. C.I.T. HAS ALSO WRONGLY DIRECTED THE ASSESSING OFFICER TO ADOPT THE VALUE OF ` 5,00,000/- PER BIGHA ON THE LAND IN DISPUTE WHICH IS CONTRARY TO T HE LAW AND FACTS ON THE FILE. HE REQUESTED THAT KEEPING IN VIEW OF THE DOCUMENTARY E VIDENCES FILED BY THE ASSESSEE 13 BEFORE THE REVENUE AUTHORITIES AS WELL AS THE ORDER PASSED BY THE HONBLE SUPREME COURT OF INDIA ON THE IDENTICAL SITUATION O N THE ISSUE IN DISPUTE, THE APPEAL FILED BY THE DEPARTMENT MAY BE DISMISSED. 16. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RELEVANT RECORDS AVAILABLE WITH US AS WELL AS THE DECISIONS CITED BY THE LD. C OUNSEL FOR THE ASSESSEE. AS PER THE RECORDS, THERE ARE TWO AGREEMENTS, ONE AGREEMEN T FOR SALE BETWEEN THE ASSESSEE AND ANNAPURNA GRAH NIRMAN SAHKARI SAMITI, GWALIOR D ATED 29.06.2001 ON WHICH BASIS THE ASSESSING OFFICER HAS COMPLETED THE ASSES SMENT IN DISPUTE. THE SECOND AGREEMENT DATED 03.02.2002 WHICH IS ALSO BETWEEN TH E SAME PARTIES IN WHICH, ACCORDING TO THE ASSESSEE, EARLIER AGREEMENT DATED 29.06.2001 HAS BEEN CANCELLED. THE ASSESSING OFFICER ISSUED SUMMON UNDER SECTION 1 31 OF THE ACT TO SHRI MUKESH SHARMA, SHRI RAJENDRA UPADHYAY AND SHRI DHARMENDRA SHARMA TO VERIFY THE EXECUTION OF CANCELLATION AGREEMENT DATED 03.02.200 2. HE HAS RECORDED THE STATEMENT OF SHRI MUKESH SHARMA ON 15.12.2008, RAJE NDRA UPADHYAY ON 28.11.2008 AND SHRI DHARMENDRA SHARMA ON 16.12.2008 WHICH THE ASSESSEE HAS ATTACHED WITH ITS PAPER BOOK AT PAGE NOS. 24 TO 29. THE ASSESSEE HAS ALSO ATTACHED THE SAID TWO AGREEMENTS DATED 03.02.2002 AND 29.06. 2001 WHICH IS AT PAGE NOS. 17 TO 23 OF THE PAPER BOOK. WE HAVE THOROUGHLY GONE T HROUGH THE STATEMENTS MADE BY THE AFORESAID PERSONS ALONGWITH THE SAID TWO AGR EEMENTS. WE ARE OF THE CONSIDERED OPINION THAT THE AGREEMENT FOR SALE DATE D 29.06.2001 WAS DULY 14 NOTARIZED ON 29.06.2001 AND ALL THE MEMBERS OF HUF PUT THEIR SIGNATURES IN THIS AGREEMENT BEFORE THE NOTARY AND THE SAME HAS BEEN R EGISTERED AT SL. NO.1 DATED 29.06.2001 AT 5.00 P.M. AT GWALIOR. IN THIS AGREEM ENT, BOTH THE PARTIES, I.E., THE ASSESSEE AND ANNAPURNA GRAH NIRMAN SAHKARI SAMITI, GWALIOR HAVE AGREED FOR SALE CONSIDERATION OF AGRICULTURAL LAND AMOUNTING T O ` 1,29,75,000/- AT THE RATE OF ` 5,00,000/- PER BIGHA. TOTAL 25 BIGHAS AND 9 BISWAS LAND HAS BEEN SOLD FOR TOTAL CONSIDERATION OF ` 1,29,75,000/-. ACCORDING TO THIS AGREEMENT, THE SE LLER HAS ALSO RECEIVED ` 6,00,000/- AS ADVANCE IN CASH AND BALANCE SHALL BE PAID AT THE TIME OF EXECUTION OF SALE DEED. AS PER THE SECOND AGREEMEN T DATED 03.02.2002, WHICH IS AT PAGE NOS.17 & 18 IN THE ASSESSEES PAPER BOOK, IN W HICH, THE AGREEMENT DATED 29.06.2001 HAS BEEN CANCELLED AND ` 6,00,000/- HAS BEEN RETURNED TO THE PURCHASER. WE HAVE PERUSED THE AGREEMENT DATED 03.02.2002 AND FINDS THAT THIS AGREEMENT HAS BEEN MADE BETWEEN THE SAME PARTIES ON AN INDIAN NON -JUDICIAL STAMP PAPER OF ` 100/- WHICH HAS NOT BEEN REGISTERED OR ATTESTED BY ANY AUTHORITY. THE EARLIER AGREEMENT DATED 29.06.2001 HAS BEEN NOTARIZED UNDER PROPER PROCEDURES BUT THE ASSESSEE HAS NOT CANCELLED THE SAME IN THE REGISTER OF NOTARY TILL DATE AND THE ASSESSEE ITSELF CANCELLED THE AGREEMENT DATED 29.06 .2001 VIDE THEIR SELF MADE AGREEMENT DATED 03.02.2002, WHICH IS AFTER THOUGHT. THEREFORE, WE ARE UNABLE TO GIVE ANY BENEFIT ON THE AGREEMENT DATED 03.02.2002 MADE BY THE ASSESSEE WITH THE SAME PARTY. WE HAVE ALSO THOROUGHLY PERUSED THE ST ATEMENTS OF SHRI MUKESH SHARMA DATED 15.12.2008, SHRI RAJENDRA UPADHYAY DAT ED 28.11.2009 AND SHRI 15 DHARMENDRA SHARMA DATED 16.12.2008 WHICH THE ASSESS EE HAS ENCLOSED IN ITS PAPER BOOK AND WE ARE OF THE CONSIDERED OPINION THAT ALL THESE PERSONS, I.E. SHRI MUKESH SHARMA IN RESPONSE TO QUESTION NO.4 STATED THAT IT IS CORRECT THAT IN THE ORIGINAL AGREEMENT PAYMENT OF ` 6,00,000/- HAS BEEN WRITTEN BUT ACTUALLY NO PAYMENT OF ` 6,00,000/- HAS BEEN GIVEN TO THE SELLER OF THE LAND BY THE PURCHASER SOCIETY BUT WHEN WE HAVE PERUSED THE AGREEMENT DATED 03.02.2002 WHICH IS AT PAGE NOS.17 & 18, THE ASSESSEE ITSELF IN THIS AGREEMENT HAS WRITT EN THAT ` 6,00,000/- HAS BEEN RETURNED TO THE PURCHASER AND THEY HAVE SIGNED ON T HE SAME. THEY HAVE ALSO WRITTEN IN THE AGREEMENT DATED 03.02.2002 THAT THEY ARE MAKING THE STATEMENT CONSCIOUSLY AND SIGNING ON THE SAME WITHOUT ANY FEA R. ON THE CONTRARY, SHRI RAJENDRA UPADHYAY, PRESENT PRESIDENT, ANNAPURNA GRA H NIRMAN SAHKARI SAMITI, GWALIOR APPEARED ON 28.11.2008, IN RESPONSE TO THE SUMMON UNDER SECTION 131 OF THE ACT ISSUED BY THE ASSESSING OFFICER, MADE A STA TEMENT THAT THERE IS NOTHING ON RECORD OF PAYMENT OF ADVANCE OF ` 6,00,000/- BY HIS SOCIETY. SIMILARLY, SHRI DHARMENDRA SHARMA, CO-PARCENER, IN RESPONSE TO THE NOTICE UNDER SECTION 131 OF THE ACT ON BEHALF OF SHRI GANGA PRASAD SHARMA, MADE A STATEMENT THAT AGREEMENT WAS EXECUTED WITH ANNAPURNA GRAH NIRMAN SAHKARI SAM ITI, GWALIOR IN JUNE 2001 FOR SALE OF 31.5 BIGHAS OF AGRICULTURAL LAND FOR TO TAL ` 1,29,75,000/- BUT NO ADVANCE MONEY OF ` 6,00,000/- WAS PAID BY THE SOCIETY TO THE SELLER. BUT, IN THE AGREEMENT DATED 03.02.2002, IT IS VERY MUCH CLEARLY WRITTEN T HAT THE ASSESSEE IS RETURNING ` 6,00,000/- TO PARTY NO.2 I.E. ANNAPURNA GRAH NIRMAN SAHKARI SAMITI, GWALIOR 16 WHICH THEY HAVE TAKEN AS ADVANCE AND NOW NOTHING IS DUE THERE. IT ESTABLISHES THAT THE AGREEMENT DATED 03.02.2002, IN WHICH THE EARLIE R AGREEMENT DATED 29.06.2001 HAS BEEN CANCELLED, IS AFTER THOUGHT AND STATEMENT OF THE MEMBER OF HUF, WHO MADE THE STATEMENT BEFORE THE ASSESSING OFFICER, IS CONTRARY TO THE FACTS NARRATED IN THE AGREEMENT. THEREFORE, THE NOTARIZED AGREEMENT DATED 29.06.2001 MADE WITH THE CONSENT OF ALL THE MEMBERS OF HUF IN WHICH BOTH PARTIES AGREED TO ADOPT SALE CONSIDERATION OF AGRICULTURAL LAND SOLD DURING THE YEAR TO ANNAPURNA GRAH NIRMAN SAHKARI SAMITI, GWALIOR FOR THE PURPOSE OF COMPUTAT ION OF CAPITAL GAIN AT ` 1,29,75,000/- IS A VALID AGREEMENT AND CANCELLATION OF THE SAME AGREEMENT DATED 03.02.2002 IS AFTER THOUGHT. 17. AFTER PERUSING THE ORDER PASSED BY THE REVENUE AUTHORITIES, WE FIND THAT THE ASSESSEE FILED ITS RETURN OF INCOME ON 22.02.2005 S HOWING TOTAL INCOME OF ` 15,790/- AND AGRICULTURAL INCOME OF ` 48,000/-. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT ON 09.03.2006 UNDER SECTION 143(3) O F THE ACT DETERMINING THE TOTAL INCOME OF ` 16,51,615/- AGAINST WHICH THE ASSESSEE FILED APPEAL BEFORE THE LD. FIRST APPELLATE AUTHORITY WHO VIDE ORDER DATED 10.08.2007 DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. AGGRIEVED BY THE SAME, THE DEPARTMENT FILED APPEAL BEFORE THE I.T.A.T. AND THE SAME HAS BEEN DISMISSED, BUT O N THE BASIS OF SOME INFORMATION, THE ASSESSING OFFICER ISSUED NOTICE UN DER SECTION 148 OF THE ACT ON 11.05.2007 BECAUSE THE ASSESSEE HAS NOT SHOWN SOME SALE TRANSACTION IN THE 17 ORIGINAL RETURN OF INCOME FOR THE ASSESSMENT YEAR 2 003-04 FILED ON 22.02.205 AND HENCE ESCAPED LONG TERM CAPITAL GAIN. WHEN THE ASS ESSING OFFICER ISSUED NOTICE UNDER SECTION 148 OF THE ACT TO THE ASSESSEE, THEN THE ASSESSEE FILED ITS REVISED RETURN ON 13.05.2007 IN WHICH THE ASSESSEE HAS DISC LOSED THE ESCAPED SALE TRANSACTION. THE ACTION OF THE ASSESSEE ESTABLISHE D THAT IF THE ASSESSING OFFICER COULD NOT HAVE ISSUED THE NOTICE UNDER SECTION 148 OF THE ACT TO THE ASSESSEE ASKING ABOUT THE TRANSACTION IN DISPUTE, THEN MAJOR LOSS C AN BE OCCURRED TO THE ASSESSEE. THEREFORE, THE ASSESSING OFFICER HAS RIGHTLY MADE T HE ADDITION ON ACCOUNT OF LONG TERM CAPITAL GAIN. 18. THE LD. COUNSEL FOR THE ASSESSEE HAS CITED 7 DE CISIONS WHICH HE HAS FILED IN THE PAPER BOOK CONTAINING PAGES NOS.1 TO 45. WE HA VE THOROUGHLY GONE THROUGH THE SAME AND FOUND THAT THE FACTS OF THE CASE IN HA ND AND THE FACTS OF THE CASES RELIED UPON BY THE ASSESSEE ARE ENTIRELY DIFFERENT BECAUSE IN THE CASE LAW CITED BY THE LD. COUNSEL FOR THE ASSESSEE THERE WAS NO EVIDE NCE DIRECT OR INDIRECT WITH THE DEPARTMENT TO ESTABLISH THAT THE ASSESSEE HAS RECEI VED MORE THAN WHAT IS DECLARED OR DISCLOSED BY HIM AS CONSIDERATIONS BUT IN THE PRESE NT CASE LEGALLY VALID AGREEMENT DATED 29.06.2001 HAVING EVIDENTIARY VALUE IS AVAILA BLE WITH THE DEPARTMENT AND THE ASSESSING OFFICER HAS COMPUTED THE CAPITAL GAIN ON THE BASIS OF NOTARIZED AGREEMENT DATED 29.06.2001 AS WELL AS ON THE BASIS OF DIRECTION BY ADDL. C.I.T., RANGE-3, GWALIOR WHICH HAS BEEN GIVEN BY HIM ON THE APPLICATION OF THE ASSESSEE 18 MADE UNDER SECTION 144A OF THE ACT AS DISCUSSED ABO VE. KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES EXPLAINED ABOVE, WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSING OFFICER HAS RIGHTLY COMPUTED THE CAPITAL GAIN OF THE LAND IN DISPUTE ON THE BASIS OF NOTARIZED AGREEMENT DATED 29.06.2001 A S WELL AS ON THE DIRECTION DATED 23.12.2008 BY THE ADDL. C.I.T., RANGE-3, GWALIOR. BUT THE LD. FIRST APPELLATE AUTHORITY HAS NOT RIGHTLY APPRECIATED THE AGREEMENT DATED 29.06.2001 WHICH IS VALIDLY NOTARIZED AND HAS NOT BEEN CANCELLED TILL D ATE. THE LD. FIRST APPELLATE AUTHORITY HAS WRONGLY BELIEVED THE AGREEMENT DATED 03.02.2002 MADE BY THE ASSESSEE WHICH HAS NO LEGAL VALUE AND CONTRARY TO T HE AGREEMENT DATED 29.06.2001. THE LD. FIRST APPELLATE AUTHORITY HAS ALSO NOT TAKE N INTO CONSIDERATION THE STATEMENTS OF SHRI MUKESH SHARMA, SHRI RAJENDRA UP DAHYAY AND SHRI DHARMENDRA SHARMA WHICH IS CONTRARY TO THE AGREEMEN T DATED 29.06.2001 FOR RETURNING ADVANCE WHICH THE ASSESSEE HAS ITSELF WRI TTEN IN THE AGREEMENT DATED 03.02.2002. 19. KEEPING IN VIEW OF THE DISCUSSIONS IN THE FOREG OING PARAGRAPHS, WE ARE OF THE CONSIDERED OPINION THAT THE REVENUE AUTHORITIES HAS PASSED THE IMPUGNED ORDER CONTRARY TO THE LAW AND FACTS ON THE FILE. THEREFO RE, THE IMPUGNED ORDER DESERVES TO BE CANCELLED. WE CANCEL THE SAME AND RESTORING THE ASSESSMENT ORDER DATED 26.12.2008 PASSED BY THE ASSESSING OFFICER UNDER SE CTION 143(3)/147 OF THE ACT BY ACCEPTING THE APPEAL FILED BY THE REVENUE. 19 ITA NO.354/AGR/2009 ASSESSMENT YEAR: 2003-04 20. IN THE RESULT, APPEAL FILED BY THE REVENUE IS A LLOWED. (ORDER PRONOUNCED IN THE OPEN COURT ON 05.08.2 011). SD/- SD/- (P.K. BANSAL) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER PLACE: AGRA DATE: 5 TH AUGUST, 2011 PBN/* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT BY ORDER 3. CIT CONCERNED 4. CIT (APPEALS) CONCERNED 5. DR, ITAT, AGRA BENCH, AGRA 6. GUARD FILE ASSISTANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL, AGRA TRUE COPY