Late Shri Babubhai Patel Through L/H Pratapbhai Patel, Anand V. Income tax Officer (International Taxation), Surat

ITA 371/SRT/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 8203 (ITAT-SURAT)
• Duration Of Justice: 2 year(s) 10 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 14-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AMAR SHAH
• Keywords: Corroborative evidences
• Section: 147; 148; 144

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, HON'BLE JUDICIAL MEMBER AND DR. ARJUN LAL SAINI, HON'BLE ACCOUNTANT MEMBER (VIRTUAL HEARING) .../ I.T.A NO.371/SRT/2018 / ASSESSMENT YEAR: 2012-13 SHRI BABUBHAI PATEL, (THROUGH L/H PRATAPBHAI PATEL), DHARAMDAS NI KHADKI, TARAPUR, ANANDA 388120. [PAN: BHQPP 7269 E] VS . THE INCOME TAX OFFICER(INTERNATIONAL TAXATION), SURAT. / APPELLANT /RESPONDENT /ASSESSEE BY SHRI AMAR SHAH AR /REVENUE BY MS. USHA SHROTE SR.DR / DATE OF HEARING: 23.03.2021 / P RONOUNCEMENT ON: 23.03.2021 /O R D E R PER PAWAN SINGH, JUDICIAL MEMBER: 1. THIS APPEAL FILED BY THE LEGAL HEIRS OF ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-13, AHMEDABAD, HEREINAFTER REFERRED AS LD.CIT(A) DATED 28.02.2018 FOR THE A.Y.2012-13. THE ASSESSEE RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AND IN LAW, THE HON'BLE COMMISSIONER OF INCOME TAX (APPEAL)-13, AHMEDABAD HAS ERRED IN ARRIVING AT A CONCLUSION THAT THE APPELLANT HAS ONE- HALF (50%) SHARE IN THE PROPERTY. 2. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW THE HON'BLE COMMISSIONER OF INCOME TAX (APPEAL) HAS ERRED IN MAKING AN ASSUMPTION WITHOUT ANY SUPPORTING EVIDENCE THAT WHEN LATE SHRI BABUBHAI PATEL (THROUGH L/H PRATAPBHAI PATEL) VS. ITO(IT), SURAT / ITA NO.374/SRT/2018 FOR A.Y.2012-13 2 NO SPECIFIC SHARE IS MENTIONED IN THE PURCHASE DEED THAN LEGAL POSITION IS THAT SHARE OF ALL THE CO-OWNERS ARE EQUAL. 2. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS AN INDIVIDUAL. THE ASSESSEE NOT FILED RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR. THE ASSESSING OFFICER (AO) ON THE BASIS OF AIR INFORMATION THAT DURING THE RELEVANT FINANCIAL YEAR THE ASSESSEE SOLD IMMOVEABLE PROPERTY AND EARNED CAPITAL GAIN. THEREFORE, THE INCOME CHARGEABLE TO TAX ON SUCH CAPITAL GAIN EARNED BY THE ASSESSEE ESCAPED FROM ASSESSMENT. ON THE BASIS OF SUCH INFORMATION, THE CASE WAS REOPENED UNDER SECTION 147 OF THE ACT. AFTER RECORDING REASON THE A.O. ISSUED NOTICE UNDER SECTION 148 DATED 28.03.2016. THE A.O. RECORDED THAT NOTICE UNDER SECTION 148 WAS SERVED ON THE ASSESSEE. IN RESPONSE TO NOTICE UNDER SECTION 148 NO RETURN OF INCOMER WAS FILED BY THE ASSESSEE. THE A.O. AFTER SERVING STATUTORY NOTICES PROCEEDED FOR ASSESSMENT. DURING THE ASSESSMENT, THE AO NOTED THAT ASSESSEE HAS SOLD A LAND IN KHATA NO.231 IN R.S.NO.221/1 SITUATED IN KARAMSAD, VIDE DOCUMENT NO. 61 DATED 04.01.2012 FOR A SALE CONSIDERATION OF RS.1.32 CRORE. THE SAID LAND WAS PURCHASED BY ASSESSEE ALONG WITH HIS BROTHER NAMELY HARMAN BHAI PATEL IN THE YEAR 1993 FOR A CONSIDERATION OF RS.1,75,000/- AND STAMP DUTY OF RS.25,990/- AND REGISTRATION FEES RS.2,825/- WAS PAID. IN THE PURCHASE DEED THE SHARES OF LATE SHRI BABUBHAI PATEL (THROUGH L/H PRATAPBHAI PATEL) VS. ITO(IT), SURAT / ITA NO.374/SRT/2018 FOR A.Y.2012-13 3 ASSESSEE AND HIS BROTHER HARMAN BHAI WAS NOT CLEARLY DESCRIBED. THE CO-OWNER NAMELY HARMAN BHAI PATEL EXPIRED ON -------. THE SHARE OF HARMAN BHAI WAS INHERITED BY HIS SONS NAMELY PRAVINCHANDRA H. PATEL, YOGENDRAKUMAR H. PATEL AND SHRI HASMUKBHAI H. PATEL. ON 11.07.2009, THE ASSESSEE PAID CONVERSION CHARGES ON COMPLETING THE AGRICULTURAL LAND INTO NON-AGRICULTURAL LAND. THEREAFTER THE LAND WAS SOLD BY ASSESSEE ALONG WITH LEGAL HEIRS OF SHRI HARMAN BHAI PATEL. ON FURTHER VERIFICATION OF SALE DEED 04.01.2012, THE AO NOTED THAT THE ASSESSEE HAS CALCULATED CAPITAL GAIN ON 25% OF SALE CONSIDERATION AND REMAINING 75% WAS SHARED WITH LEGAL HEIRS OF CO-OWNER, NAMELY SHRI HARMAN BHAI PATEL. THE AO WAS OF THE VIEW THAT ASSESSEE AND LEGAL HEIRS OF CO-OWNER WERE WAS ENTITLED FOR 50% OF SHARE EACH. THE AO WORKED OUT CAPITAL GAIN ON THE BASIS OF 50% OF THE SALE CONSIDERATION IN ASSESSMENT ORDER DATED 27.12.2016 PASSED UNDER SECTION 144 R.W.S 147 OF THE ACT. 3. ON APPEAL BEFORE THE LD.CIT(A) THE ACTION OF THE AO WAS CONFIRMED. FURTHER AGGRIEVED, THE ASSESSEE HAS FILED PRESENT APPEAL BEFORE THIS TRIBUNAL. 4. WE HAVE HEARD THE SUBMISSION OF LD.AUTHORISED REPRESENTATIVE (AR) OF THE ASSESSEE AND SR.DEPARTMENTAL LATE SHRI BABUBHAI PATEL (THROUGH L/H PRATAPBHAI PATEL) VS. ITO(IT), SURAT / ITA NO.374/SRT/2018 FOR A.Y.2012-13 4 REPRESENTATIVE(SR.DR) FOR THE REVENUE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE AR OF THE ASSESSEE SUBMITS THAT ASSESSEE PURCHASED A PIECE OF LAND ALONG WITH HIS BROTHER, NAMELY SHRI HARMANBHAI PATEL. SHRI HARMANBHAI PATEL DIED ON 28.11.2006 WHO HAS BEEN LIVING WITH HIS THREE SONS. THE ASSESSEE ALONG WITH HIS THREE SONS OF HIS DISEASED BROTHER SOLD THE INHERITED LAND FOR A SALE CONSIDERATION OF RS.1.32 CRORE. THE ASSESSEE RECEIVED 1/4 TH CONSIDERATION I.E. RS.33,11,000/-. THE CONSIDERATION WAS RECEIVED BY WAY OF CHEQUE. THE ASSESSEE DEPOSITED THE SAID CHEQUE IN HIS BANK ACCOUNT WITH AXIS BANK. THE COPY OF SALE DEED ALONG WITH ITS TRUE ENGLISH TRANSLATION IS PLACED ON RECORD. THE COPY OF BANK PASSBOOK OF ASSESSEE IS ALSO FILED ON RECORD. THE AO DISREGARDED THE FACT ABOUT THE RECEIPT OF 1/4 TH SHARE OF CONSIDERATION ON SALE OF PLOT OF LAND. THE AO ASSUMED THAT ASSESSEE WAS HAVING 1/2 ND SHARE IN THE PROPERTY BEING CO-OWNER. 5. BEFORE THE LD.CIT(A), THE ASSESSEE ALONG WITH HIS WRITTEN SUBMISSION DATED 10.01.2018 FILED AFFIDAVIT OF SHRI PRAVINCHANDRA HARMANBHAI PATEL AND SHRI YOGENDRAKUMAR HARMANBHAI PATEL AND SHRI HASMUKBHAI HARMANBHAI PATEL. IN THE AFFIDAVIT, ALL THE CO-OWNERS [LEGAL HEIR OF CO-OWNER] CONFIRMED THAT THEY RECEIVED 1/4 TH OF SALE CONSIDERATION ON LATE SHRI BABUBHAI PATEL (THROUGH L/H PRATAPBHAI PATEL) VS. ITO(IT), SURAT / ITA NO.374/SRT/2018 FOR A.Y.2012-13 5 ACCOUNT OF SALE OF LAND. ALL THE CO-SHARERS RECEIVED CONSIDERATION THROUGH ACCOUNT PAYEE CHEQUE. ONE OF THE CO- SHARERS / LEGAL HEIRS OF SHRI HARMANBHAI PATEL ALSO DIED ON 09.05.2016, THUS, THE ASSESSEE FILED TWO AFFIDAVITS OF TWO CO- SHARERS. THE LD.CIT(A) ALSO DISREGARDED THE DOCUMENTARY EVIDENCES AND CONFIRMED THE ACTION OF THE AO. THE LD.AR OF THE APPELLANT SUBMITS THAT HE HAS PROVED HIS CASE BEYOND DOUBT BY PLACING DOCUMENTARY EVIDENCE ON RECORD THAT ONLY 1/4 TH CONSIDERATION WAS RECEIVED ON SALE OF LAND. 6. ON THE OTHER HAND, THE LD.SR.DR FOR THE REVENUE SUBMITS THAT THE ASSET/LAND WAS PURCHASED BY TWO PERSONS I.E. SHRI BABUBHAI PATEL AND SHRI HARMANBHAI PATEL. SINCE PLOT WAS PURCHASED BY TWO PERSONS, THUS, THE ASSESSEE WAS HAVING 50% OWNERSHIP IN THE LAND. AT THE TIME OF SALE, THE ASSESSEE CLAIMED THAT HE RECEIVED ONLY 25% OF THE SALE CONSIDERATION. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSION OF THE PARTIES AND HAVE GONE THROUGH THE ORDERS OF LOWER AUTHORITIES. THE AO REOPENED THE CASE OF ASSESSEE ON THE BASIS OF AIR INFORMATION THAT ASSESSEE HAS SOLD A PIECE OF LAND AND THE INCOME IS CHARGEABLE TO THE EXTENT OF CAPITAL GAIN HAS ESCAPED FROM ASSESSMENT. DURING THE ASSESSMENT PROCEEDINGS, THE AO NOTED THAT ON SALE OF SAID LAND, ASSESSEE ALONG WITH OTHER CO-OWNERS RECEIVED LATE SHRI BABUBHAI PATEL (THROUGH L/H PRATAPBHAI PATEL) VS. ITO(IT), SURAT / ITA NO.374/SRT/2018 FOR A.Y.2012-13 6 CONSIDERATION OF RS.1.32 CRORES. THE SAID LAND IN 1993 WAS PURCHASED BY ASSESSEE WITH HIS BROTHER SHRI HARMANBHAI PATEL. SHRI HARMANBHAI PATEL EXPIRED ON 28.11.2006, THUS HIS THREE SONS/LEGAL HEIRS NAMELY SHRI PRAVINCHANDRA HARMANBHAI PATEL AND SHRI YOGENDRAKUMAR HARMANBHAI PATEL AND SHRI HASMUKBHAI HARMANBHAI PATEL EXECUTED SALE DEED / TRANSFER DEED ON 04.01.2012. THE AO FURTHER NOTED THAT AS PER PURCHASE DEED, SHARE OF BOTH THE CO-OWNERS WAS 50%. HOWEVER, IN THE TRANSFER DEED/SALE DEED DATED 04.01.2012, THE ASSESSEE HAS SHOWN CONSIDERATION OF 25% ALONG WITH OTHER CO-OWNER. THE ASSESSEE CALCULATED CAPITAL GAIN ON 1/4 TH OF CONSIDERATION. 8. ON SHOW CAUSE, THE ASSESSEE EXPLAINED THE FACT AS RECORDED BY AO IN PARA 3.1 OF THE ASSESSMENT ORDER. THE ASSESSEE EXPLAINED THAT ASSESSEE 25% OF THE CONSIDERATION BEING RS.33,11,000/-. THE ASSESSEE ALSO FURNISHED THE COPY OF SALE DEED ALONG WITH COPY OF PASSBOOK SHOWING CLEARANCE OF CHEQUE OF SALE CONSIDERATION IN HIS BANK ACCOUNT IN AXIS BANK. THE AO PRESUMED THAT IN ABSENCE OF SPECIFIC SHARE IN THE PURCHASE DEED, THE ASSESSEE WAS HAVING 50% SHARE. THE AO, CONSIDERING THE 50% SHARE, DISREGARDED THE OTHER SUBMISSION INCLUDING THE DOCUMENTARY EVIDENCE FILED BY THE ASSESSEE. BEFORE THE LD.CIT(A) THE ASSESSEE FURNISHED THE AFFIDAVIT OF SHRI LATE SHRI BABUBHAI PATEL (THROUGH L/H PRATAPBHAI PATEL) VS. ITO(IT), SURAT / ITA NO.374/SRT/2018 FOR A.Y.2012-13 7 PRAVINCHANDRA HARMANBHAI PATEL AND SHRI YOGENDRAKUMAR HARMANBHAI PATEL. THE LD.CIT(A) CONFIRMED THE ACTION OF AO BY TAKING VIEW THAT WHEN NO SPECIFIC SHARE WAS MENTIONED IN THE PURCHASE DEED, THE SHARE OF CO-OWNERS ARE EQUAL. ON THE DEATH OF ONE OF THE CO-OWNERS, THREE LEGAL HEIRS BECAME OWNERS OF THE PROPERTY ALONG WITH SURVIVING CO-OWNER WITH THEIR CUMULATIVE SHARE WHICH CANNOT BE MORE THAN 50%. THE LD.CIT(A) FURTHER HELD THAT THE TOTAL INCOME AS DEFINED IN SECTION 2(45) OF THE ACT IS TO BE COMPUTED AS PER PROVISION OF THE ACT. THE INCOME IS TAXABLE IN THE HAND OF THE PERSON TO WHOM IT BELONGS. A LITERAL INTERPRETATION OF THE PROVISIONS LEADS TO THE CONCLUSION THAT A RIGHT PERSON IS LIABLE TO PAY TAX ON HIS INCOME AND NO OPTION IS AVAILABLE TO TAX INCOME IN THE HANDS OF PERSON OTHER THAN ONE IN WHOSE HANDS IT IS TAXABLE. 9. IN OUR VIEW, THERE IS NO AMBIGUITY IN SECT ION 2(45) OF THE ACT THAT ONLY A RIGHT PERSON IS LIABLE TO PAY TAX ON HIS INCOME AND NO OPTION IS AVAILABLE TO TAX INCOME IN THE HAND OF PERSON OTHER THAN WHOSE HANDS IT IS TAXABLE. THE INCOME TAX IS LEVIABLE ONLY ON THE REAL INCOME AND NOT ON ANY HYPOTHETICAL OR ON PRESUMING INCOME. THE APPELLANT BEFORE THE LOWER AUTHORITIES HAS CLEARLY BY PLACING DOCUMENTARY EVIDENCE IN THE FORM OF SALE DEED, COPY OF SALE CONSIDERATION AND BY CONFIRMATION BY CO-OWNER HAS LATE SHRI BABUBHAI PATEL (THROUGH L/H PRATAPBHAI PATEL) VS. ITO(IT), SURAT / ITA NO.374/SRT/2018 FOR A.Y.2012-13 8 PROVED THAT ASSESSEE HAS RECEIVED ONLY 25% OF THE SALE CONSIDERATION. IN OUR VIEW, THE AO AS WELL AS THE LD.CIT(A) WRONGLY PRESUMED THAT IN ABSENCE OF THE SPECIFIC SHARE IN THE PURCHASE DEED THE ASSESSEE WAS HAVING 50% SHARE. 10. AS NOTED ABOVE, INCOME TAX IS LEVIABLE ONLY ON THE REAL INCOME WHICH THE ASSESSEE HAS PROVED BEYOND DOUBT THAT ASSESSEE HAS RECEIVED ONLY 25% OF THE SALE CONSIDERATION, THUS, THE GROUNDS OF APPEAL RAISED BY ASSESSEE ARE ALLOWED. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 23.03.2021 BY PLACING RESULT ON NOTICE BOARD. SD/- SD/- (DR. ARJUN LAL SAINI) (PAWAN SINGH) ( /ACCOUNTANT MEMBER ( /JUDICIAL MEMBER) / SURAT, DATED : 23 MARCH , 2021 /# SGR COPY OF ORDER SENT TO- ASSESSEE/AO/PR. CIT/ CIT (A) ITAT (DR)/GUARD FILE OF ITAT. BY ORDER / / TRUE COPY / / ASSISTANT REGISTRAR, SURAT