SUSHILA DEVI MEENA, Jaipur V. ITO, Jaipur

ITA 419/JPR/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6215 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 11 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-04-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2006-2007
• Appeal Filed On: 22-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SEEMA MEENA
• Keywords: Principle of natural justice; Cost of acquisition; Fair market value
• Section: 54F; 142(1); 147; 148; 144; 10

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA- @ ITA NO. 419/JP/2016 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2006-07 SMT. SUSHILA DEVI MEENA W/O SHRI PRABHU DAYAL MEENA R/O MEENO KA MOHALLA, BHANKROTA, JAIPUR. CUKE VS. THE ITO, WARD- 7(2), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: CMJPM 8513 R VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA- @ ITA NO. 420/JP/2016 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2006-07 SHRI JAGDISH PRASAD MEENA S/O SHRI BHANWAR LAL MEENA R/O MEENO KA MOHALLA, BHANKROTA, JAIPUR. CUKE VS. THE ITO, WARD- 7(2), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: ABMPM 3886 F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA- @ ITA NO. 421/JP/2016 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2006-07 SHRI MANNA LAL MEENA S/O SHRI BHURA RAM MEENA R/O MEENO KA MOHALLA, BHANKROTA, JAIPUR. CUKE VS. THE ITO, WARD- 7(2), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: BQCPM 4734 N VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT ITA NO. 419 TO 423/JP/2016 SMT. SUSHILA DEVI MEENA AND OTHERS VS. ITO 2 VK;DJ VIHY LA- @ ITA NO. 422/JP/2016 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2006-07 SMT. DHAPU DEVI MEENA W/O SHRI BHANWRA MEENA R/O MEENO KA MOHALLA, BHANKROTA, JAIPUR. CUKE VS. THE ITO, WARD- 7(2), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: NOT AVAILABLE VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA- @ ITA NO. 423/JP/2016 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2006-07 SHRI NEMI CHAND MEENA S/O SHRI BHURA RAM MEENA R/O MEENO KA MOHALLA, BHANKROTA, JAIPUR. CUKE VS. THE ITO, WARD- 7(2), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: BQCPM 4733 M VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI MAHESH GEHLOT (ADV.) JKTLO DH VKSJ LS @ REVENUE BY : SMT. SEEMA MEENA (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 28/03/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 04/04/2018 VKNS'K@ ORDER PER BENCH: THESE ARE FIVE APPEALS BY THE ASSESSEES WHO ARE FA MILY MEMBERS: MOTHER, THREE SONS AND ONE DAUGHTER-IN-LAW ARISING FROM ITA NO. 419 TO 423/JP/2016 SMT. SUSHILA DEVI MEENA AND OTHERS VS. ITO 3 SEPARATE ORDERS OF LD. CIT(A) ALL DATED 26.02.2016 FOR THE ASSESSMENT YEAR 2006-07. 2. THE ASSESSMENT IN THESE CASES WERE FRAMED BY THE AO U/S 147 R.W.S. 144 OF THE ACT. THE ASSESSING OFFICER HAS RE OPENED THE ASSESSMENT BY ISSUING NOTICE U/S 148 OF THE ACT TO ASSESS THE CAPITAL GAIN ARISING FROM SALE OF AGRICULTURAL LAND IN THE HANDS OF SMT. DHAPU DEVI MEENA AND THE DEPOSITS IN THE BANK ACCOUNTS OF THE SONS/ DAUGHTER IN LAW OF SMT. DHAPU DEVI MEENA. IN THE R EASSESSMENT THE AO ASSESS THE CAPITAL GAIN ARISING FROM SALE OF AGR ICULTURAL LAND IN THE HANDS OF SMT. DHAPU DEVI MEENA AND THE INCOME ON AC COUNT OF DEPOSITS MADE IN THE BANK ACCOUNTS OF THE SONS AND DAUGHTER IN LAW OF SMT. DHAPU DEVI MEENA. THE ASSESSEES CHALLENGED THE ACTION OF THE AO BEFORE THE LD. CIT(A) AND CONTENDED THAT THE AGRICU LTURAL LAND IN QUESTION WAS INHERITED BY ALL THE ASSESSEES ON DEA TH OF SHRI BHAWARA @ BHURA IN THE YEAR 2004 AND THEREAFTER THE LAND IN QUESTION WAS SOLD VIDE SALE DEED DATED 11.08.2005 FOR A CONSIDERATION OF RS. 1,76,34,000/-. SINCE, THERE WAS NO RESPONSE TO THE NOTICE ISSUED U/S 142(1) OF THE ACT THE AO ALSO MADE ADDITION IN THE HANDS OF SMT. DHAPU DEVI MEENA ON ACCOUNT OF UNEXPLAINED DEPOSITS IN BANK ACCOUNT OF RS. 32,95,345/-. HOWEVER, IT WAS CONTENDED BEFO RE THE LD. CIT(A) ITA NO. 419 TO 423/JP/2016 SMT. SUSHILA DEVI MEENA AND OTHERS VS. ITO 4 THAT ALL THE LEGAL HEIRS OF LATE SHRI BHAWARA @ BHU RA WERE HEAVING EQUAL SHARES IN THE LAND IN QUESTION AND THEREFORE, THE S ALE CONSIDERATION WAS ALSO RECEIVED IN EQUAL SHARES. SINCE, THERE WAS REL INQUISHMENT DEED DATED 14.06.2005 PRIOR TO THE TRANSFER OF THE PROPE RTY, THEREFORE, THE LD. CIT(A) DID NOT ACCEPT THIS CONTENTION OF THE ASSESS EE AND CONFIRMED THE ENTIRE CAPITAL GAIN IN THE HANDS OF SMT. DHAPU DEVI MEENA WIDOW OF LATE SHRI BHAWARA @ BHURA. THE ADDITIONS MADE BY TH E AO ON ACCOUNT OF UNEXPLAINED DEPOSITS IN THE BANK ACCOUNT WAS ALS O CONFIRMED BY THE LD. CIT(A) IN THE HANDS OF THE SONS AND DAUGHTER-IN -LAW AND THE EXPLANATION OF THE ASSESSEES THAT THE DEPOSITS WERE MADE OUT OF THE SALE PROCEEDS OF LAND IN QUESTION WAS NOT ACCEPTED. 3. BEFORE THE TRIBUNAL, THE ASSESSEE CHALLENGED THE ADDITION MADE BY THE AUTHORITIES BELOW AND ALSO FILED ADDITIONAL GROUNDS WHICH ARE COMMON IN THESE APPEAL AS UNDER:- 4) UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE A ND UNDER THE LAW, THE LEARNED A.O. GROSSLY ERRED IN IGNORING SALES RE CEIPTS OF THE AGRICULTURAL LAND I.E. SALES CONSIDERATION RECEIVED BY THE APPELLANT, IGNORING SEC. 8 AND SEC. 10 OF THE HINDU SUCCESSION ACT, 1956, READ WITH SEC. 4, 45 AND 48 OF THE INCOME TAX ACT, 1961. THIS IS IN CONNECTION WITH THE MATTER OF HER MOTHER-IN-LAW DHA PU DEVI MEENA (PAN: BZSPD1376G) 4.1) UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AND UNDER THE LAW, THE LEARNED A.O. HAS ADMITTED THAT THE AGR ICULTURAL ITA NO. 419 TO 423/JP/2016 SMT. SUSHILA DEVI MEENA AND OTHERS VS. ITO 5 LAND IN QUESTION WAS ANCESTRAL AND STILL, THE LD. A O HAS NOT DIVIDED THE GROSS SALE PROCEEDS AMONGST THE SIX SON S AND THE WIDOW APPELLANT. BY COMPULSION OF LAW, THE SONS HAD LEGAL AND VALID RIGHT TO RECEIVE THE PROPERTY AND THE SALE CO NSIDERATION THEREOF. 4.2) UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AND UNDER THE LAW, THE WIDOW ASSESSEE WAS, BY LAW, BOUND TO D IVERT THE GROSS RECEIPTS UNDER SEC. 8 AND SEC. 10 OF THE HIND U SUCCESSION ACT, 1956, AS THE COST OF TRANSFER, READ WITH SECTION 4, 45, 47, 48 (MODE OF COMPUTATION) OF THE INCOME TAX ACT, 1961. 5) UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AN D UNDER THE LAW, THE APPELLANT ASSESSEE WAS ENTITLED FOR THE FAIR MARKET VALUE AS COST OF ACQUISITION OF THE SAID AGRICULTURAL LAND, WHICH WAS ACQUIRED BEFORE 01/04/ 1981. THE LEARNED A.O. HAS NOT CALCULATED THE COST OF ACQ UISITION, WHICH IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE. 6) UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AND U NDER THE LAW, THE LEARNED A.O. HAS NOT ALLOWED THE DEDUCTION UNDER SECTION 54F IN RESPECT OF CONSTRUCTION OF NEW RESID ENTIAL HOUSE. THUS, THE ASSESSEES RAISED THE ISSUE THAT THE COST OF ACQUISITION WAS TAKEN BY THE AO AT NIL WHEREAS WHEN THE LAND WAS AC QUIRED BY THE ANCESTOR PRIOR TO 01.04.1981 THEN, AS PER PROVISION S OF SECTION 48 TO 49 OF THE INCOME TAX ACT THE COST OF ACQUISITION SHALL BE DEEMED AS PER ITA NO. 419 TO 423/JP/2016 SMT. SUSHILA DEVI MEENA AND OTHERS VS. ITO 6 THE FAIR MARKET VALUE OF THE LAND AS ON 01.04.1981. FURTHER, THE ADDITIONAL GROUNDS IS ALSO RAISED REGARDING THE SHA RING OF THE SALE CONSIDERATION AMONG ALL THE LEGAL HEIRS OF LATE SHR I BHAWARA @ BHURA AND THEREFORE, THE CAPITAL GAIN IF ANY ARISING FROM THE SALE OF THE LAND HAS TO BE ASSESSED IN THE HANDS OF THE LEGAL HEIRS WHO HAD SHARED THE SALE CONSIDERATION. 4. WE HAVE HEARD THE LD. AR AS WELL AS THE LD. DR O N THE ADDITIONAL GROUNDS RAISED BY THE ASSESSEES. WE FIND THAT THE A O HAS APPLIED THE COST OF ACQUISITION OF THE LAND AT NIL WITHOUT CONS IDERING THE PROVISIONS OF THE INCOME TAX ACT IN RESPECT OF THE ASSET WHICH WAS ACQUIRED BY THE ASSESSEE AS UNDER SUCCESSION/ INHERITANCE AND P REVIOUS OWNER THE LAND HAD ACQUIRED THE AGRICULTURAL LAND PRIOR TO 01 .04.1981. THEREFORE, WE FIND SUBSTANCE AND MERIT IN THE ADDITIONAL GROUN D RAISED BY THE ASSESSEE SO FAR AS THE COST OF ACQUISITION HAS TO B E DETERMINED BY CONSIDERING THE RELEVANT PROVISIONS OF THE ACT AS W ELL AS THE FAIR MARKET PRICE OF THE LAND AS ON 01.04.1981. AS REGARDS THE ISSUE OF ASSESSING THE CAPITAL GAIN IN THE HANDS OF THE LEGAL HEIRS WH O HAVE INHERITED THE AGRICULTURAL LAND IN QUESTION INSTEAD OF IN THE HAN D OF ONLY THE WIDOW OF LATE SHRI BHAWARA @ BHURA THERE WAS A RELINQUISHED DEED BY THE DAUGHTERS AND SONS OF LATE SHRI BHAWARA @ BHURA IN FAVOUR OF SMT. ITA NO. 419 TO 423/JP/2016 SMT. SUSHILA DEVI MEENA AND OTHERS VS. ITO 7 DHAPU DEVI MEENA WHEREBY RELEASED THEIR RIGHTS IN L AND TO FACILITATE THE SALE OF THE LAND VIDE SALE DEED DATED 11.08.2005. I T IS PERTINENT TO NOTE THAT APART FROM THE SONS, THE DAUGHTERS OF LATE SHR I BHAWARA @ BHURA HAVE EXECUTED RELINQUISHMENT DEED DATED 14.06.2005 BUT THE SALE CONSIDERATION HAS BEEN SHARED BY THE WIDOW AND 6 SO NS. THEREFORE ONCE, THE SALE CONSIDERATION WAS SHARED AMONG THE M OTHER AND 6 SONS BEING CO-OWNER OF THE LAND IN QUESTION AND EXCLUDED THE DAUGHTERS THEN LONG TERM CAPITAL GAIN ARISING FROM SALE OF LAND IN QUESTION IS REQUIRED TO BE ASSESSED IN THE HANDS OF 7 LEGAL HEIRS WHO HAVE INHERITED THE LAND AND ALSO SHARED THE SALE CONSIDERATION IN EQUAL SHA RE. WE FURTHER NOTE THAT THE AMOUNT WHICH IS SHARED BY THESE 7 LEGAL HE IRS OF LATE SHRI BHAWARA @ BHURA IS DULY REFLECTED IN THEIR RESPECTI VE BANK ACCOUNT. THE TRANSACTION OF SALE OF LAND AND THE AMOUNTS DEPOSIT ED IN THEIR RESPECTIVE BANK ACCOUNT OF THESE PERSONS/ASSESSEES ARE CONTEMPORANEOUS. THUS, ONCE THE AMOUNT DEPOSITED IN THE BANK ACCOUNT AND THE SALE TRANSACTIONS IN QUESTION ARE A T THE SAME POINT OF TIME AND THERE IS NO OTHER SOURCE OF INCOME THEN TH E EXPLANATION OF THE ASSESSEE THAT THE AMOUNT DEPOSITED IN THE RESPECTIV E BANK ACCOUNTS IS NOTHING BUT THEIR SHARES IN THE SALE CONSIDERATION RECEIVED ON TRANSFER OF AGRICULTURAL LAND IN QUESTION. THE LD. DR HAS RAISE D THE CONTENTION THAT ITA NO. 419 TO 423/JP/2016 SMT. SUSHILA DEVI MEENA AND OTHERS VS. ITO 8 ONCE SONS HAVE SIGNED AND EXECUTED THE RELINQUISHME NT DEED ALONG WITH THE DAUGHTERS OF LATE SHRI BHAWARA @ BHURA IN FAVOUR OF THEIR MOTHER THEN THE SUBSEQUENT SALE WOULD BE TREATED AS THE SALE BY ONLY ONE ASSESSEE SMT. DHAPU DEVI MEENA. WE FIND THAT TH E RELINQUISHMENT DEED WAS EXECUTED AS PER THEIR FAMILY ARRANGEMENT A ND MUTUAL UNDERSTANDING SO THAT THE FAMILY OF THE DAUGHTERS O F LATE SHRI BHAWARA @ BHURA AND SMT. DHAPU DEVI MEENA WOULD NOT CLAIM THE AMOUNT IN FUTURE AND THEREFORE, THE SOLE PURPOSE OF EXECUTING RELINQUISHMENT DEED WAS TO AVOID THE FUTURE DISPUTE/LITIGATION IN RESPE CT OF THE SHARE IN THE LAND. THUS, THE RELINQUISHMENT DEED MADE IT POSSIBL E TO SHARE AND DISTRIBUTE THE SALE CONSIDERATION AMONG THE MOTHER AND SONS EXCLUDING THE DAUGHTERS. SINCE, ONE OF THE SONS EXPIRED THERE FORE, THE WIFE OF THE SON IS REPRESENTING AS LEGAL HEIRS OF THE APPEAL IN ITA NO. 419/JP/2016. ACCORDINGLY, ALL SONS AND MOTHER HAVE SHARED THE SA LE CONSIDERATION RECEIVED ON TRANSFER OF THE LAND IN QUESTION AND TH E DEPOSIT IN BANK ACCOUNT OF THE ASSESSEES IS FROM AMOUNT RECEIVED BE ING REPRESENTED AS SALE CONSIDERATION. HENCE, WE FIND THAT THE NON ACC EPTANCE OF THE EXPLANATION OF SOURCE AS WELL AS THE SHARING OF THE SALE CONSIDERATION BY THESE ASSESSEE BY THE AUTHORITIES BELOW IS NOT PROP ER AND JUSTIFIED. ITA NO. 419 TO 423/JP/2016 SMT. SUSHILA DEVI MEENA AND OTHERS VS. ITO 9 ACCORDINGLY, IN VIEW OF THE ABOVE FACTS AND CIRCUMS TANCES OF THE CASE WE ADMIT THE ADDITIONAL AMOUNT RAISED BY THE ASSESS EES. 5. THESE 7 ASSESSEES MOTHER, SONS AND DAUGHTER-IN-L AW HAVE SHARED THE SALE CONSIDERATION IN EQUAL SHARE THEREFORE, TH E MATTER REQUIRES AFRESH CONSIDERATION FOR ASSESSING THE CAPITAL GAIN IN EQUAL SHARES IN THE HANDS OF THE 7 ASSESSEES OUT OF WHICH 5 ASSESSEES A RE BEFORE US. THE DETAILS OF THESE LEGAL HEIRS ARE AS UNDER:- TOTAL AMOUNT OF SALE CONSIDERATION IS RS. 1,77,41,0 00/- WIDOW (MOTHER) DHAPU DEVI 25,34,429/- SON1 ARJUNRAM 25,34,429/- SON2 NEMICHAND 25,34,429/- SON 3 JAGDISH 25,34,429/- SON4 MANNALAL 25,34,429/- SON5 PRABHUDAYAL 25,34,429/- SON 6 MADANLAL 25,34,429/- ACCORDINGLY, WE SET ASIDE THESE MATTERS TO THE RECO RD OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION OF THE SAME BY CONSI DERATION THE CAPITAL GAIN IN THE HANDS OF THESE ASSESSEES IN EQUAL SHARE S AS WELL AS CONSIDERING THE OTHER CLAIMS OF THE ASSESSEES AS PE R LAW. THE OTHER ISSUES IN THESE APPEALS ARE ALSO ACCORDINGLY STAND SET ASIDE TO THE RECORD OF THE AO. SINCE, THE AO IS REQUIRED TO CON SIDER THE COST OF ACQUISITION AS PER FAIR MARKET VALUE AS ON 01.04.19 81 THEREFORE ALL OTHER ITA NO. 419 TO 423/JP/2016 SMT. SUSHILA DEVI MEENA AND OTHERS VS. ITO 10 CLAIM OF INDEX COST AND OTHER DEDUCTIONS ARE ALSO R EQUIRED TO BE CONSIDERED BY THE AO. ACCORDINGLY, ALL THESE APPEAL S ARE SET ASIDE TO THE RECORD OF THE ASSESSING OFFICER IN THE ABOVE TERMS. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEES AR E ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 04/04/2018. SD/- SD/- FOE FLAG ;KNO FOT; IKY JKO (VIKRAM SINGH YADAV) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 04/04/2018. * SANTOSH. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SMT. SUSHILA DEVI MEENA, SHRI JAGDIS H PRASAD MEENA, SHRI MANNA LAL MEENA, SMT. DHAPU DEVI MEENA & SHRI NEMI CHAND MEENA, JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- ITO, WARD 7(2), JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 419 TO 423/JP/2016} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR