ITO, BEHROR V. SUCHET SINGH YADAV, BEHROR

ITA 428/JPR/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1971 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-10-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 27-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: SATISH GUPTA CA DHK
• Keywords: Cost of acquisition
• Section: 143(3); 54F; 133A; 147; 131; 148

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 HKKXPUN] YS[KK LNL; ,OA JH DQY HKKJR] U;KF;D LNL; DS LE{K BEFORE: SHRI BHAGCHAND, AM AND SHRI KUL BHARAT, JM VK;DJ VIHY LA-@ ITA NO. 428/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2011-12. THE INCOME TAX OFFICER, BEHROR. CUKE VS. SH. SUCHET SINGH YADAV, S/O SH. SULTAN SINGH YADAV, WARD NO. 06, NEAR POLICE STATION, MOHALLA- MANPURA, BEHROR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. ASVPS 5939 H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI R.A. VERMA (ADDL.CIT) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI SATISH GUPTA (CA) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 12.10.2017. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 24/10/2017. VKNS'K@ ORDER PER SHRI KUL BHARAT, JM. THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER OF THE LD. CIT(A), ALWAR, DATED 26-02-2016 PERTAINING TO THE A SSESSMENT YEAR 2011-12. THE REVENUE HAS RAISED THE FOLLOWING GROUND OF APPE AL:- 1. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEAL S), ALWAR HAS ERRED ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN DELET ING THE ADDITION MADE BY THE AO ON ACCOUNT OF LONG TERM CAPITAL GAIN FOR RS. 1,53,11,568/-. 2. BRIEFLY STATED THE FACTS ARE THAT THE CASE WAS R EOPENED FOR ASSESSMENT AND THE ASSESSMENT U/S 147 AND READ WITH SECTION 143(3) OF THE INCOME TAX ACT, 1961(HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VIDE ORDER DATED 27.03.2015. 2 ITA NO. 428/JP/2016. SH. SUCHET SINGH YADAV, BEHROR. WHILE FRAMING THE ASSESSMENT THE ASSESSING OFFICER MADE ADDITION ON ACCOUNT OF LONG-TERM CAPITAL GAIN FOR RS. 1,53,11,568/- ON ACC OUNT OF AGREEMENT TO SALE WAS EXECUTED BY THE ASSESSEE. AGAINST THIS, THE ASSESS EE PREFERRED AN APPEAL BEFORE LD. CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS DIREC TED THE ASSESSING OFFICER TO ASSESS THE CAPITAL GAIN IN THE HANDS OF HUF OF THE ASSESSEE AS LAND TRANSFERRED BELONGS TO HUF. 3. LD. DEPARTMENTAL REPRESENTATIVES ARGUED THAT LD. CIT(A) WAS NOT JUSTIFIED IN DIRECTING THE CAPITAL GAIN TO BE ASSESSED IN THE HA NDS OF THE HUF. HE SUBMITTED THAT LAND IS TRANSFERRED BY THE ASSESSEE. 4. ON THE CONTRARY, LD. COUNSEL FOR THE ASSESSEE SU BMITTED THAT THE LAND WAS TRANSFERRED BY THE ASSESSEE HOWEVER, LAND BELONGS T O HUF. HE THEREFORE SUPPORTED THE ORDER OF THE ASSESSING OFFICER. 5. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDER OF THE AUTHORITIES BELOW . THE LD. CIT(A) WHO AFTER CONSIDERING THE SUBMISSIONS AS GIVEN A FINDING ON F ACT ON PARA 5.5 TO 5.17 AS UNDER:- 5.5 I HAVE PERUSED THE ASSESSMENT ORDER AS WELL AS REMAND REPORT OF THE AO, SUBMISSIONS MADE INCLUDING JUDICIAL CITATIONS G IVEN THEREIN AND CROSS REPLY OF THE APPELLANT AND FIND AN ADDITION OF RS. 1,53,11,568 HAS BEEN MADE BY THE AO ON ACCOUNT OF LONG TERM CAPITAL GAINS ON SALE OF LAND IN THE HANDS OF APPELLANT. A SURVEY U/S 133A OF THE IT ACT WAS CONDUCTED AT THE BUSINESS PREMISES OF M/S GANPATI PLAZA ON 29-30/08/2013, IN WHICH THE APPELLANT IS A PARTNER WITH 50% SHARE IN THE PROFIT OF THE FIRM. DURING THE COURSE OF SURVEY SOME SALE DEED/ AGREEMENTS PERTAINING TO SALE OF LA ND WERE FOUND AND IMPOUNDED. 3 ITA NO. 428/JP/2016. SH. SUCHET SINGH YADAV, BEHROR. 5.6 THEREAFTER, A STATEMENT OF THE APPELLANT WAS RE CORDED U/S 131 OF THE IT ACT ON 14.10.2013 AND IN THE STATEMENT IT WAS AD MITTED BY THE APPELLANT THAT GAINS HAVE BEEN MADE ON SALE OF AGRICULTURE LA ND IN FY 2010-11, SITUATED AT KHASRA NO. 698, TEHSIL- GANGABISHAN, BEHROR AND ON THIS NO TAX HAS BEEN PAID. THE APPELLANT HAD ALSO STATED BEFORE THAT AG REEMENT TO SELL FOR SALE OF AGRICULTURAL LAND @ RS. 5,000 PER SQ. YD. HAS BEEN ENTERED IN TO WITH SH. AKHILESH YADAV URF SUBHASH S/O NATHU RAM YADAV, BEH ROR. A COPY OF THE AGREEMENT DULY NOTARIZED WAS ALSO FILED. UNDER THIS AGREEMENT A PART OF THE CONSIDERATION AMOUNTING TO RS. 30 LACS HAD RECEIVED BY THE APPELLANT AND THE BALANCE AMOUNT WAS TO BE PAID AFTER PLOTTING THE LA ND AND ON FURTHER SALE OF PLOTS. 5.7 AO HAS COMPUTED THE TOTAL SALE CONSIDERATION A T RS. 1,59,60,000 AFTER TAKING 70% OF THE TOTAL AREA OF AGRICULTURAL LAND ( 38 AIRE I.E. 4560 SQ. YD.), AS THE PLOTTED AREA, WHICH COMES TO 3192 SQ. YDS. THE BALANCE 30% AREA HAS BEEN CONSIDERED BY THE AO TO HAVE BEEN USED FOR INT ERNAL ROADS AND PASSAGE. THIS AREA OF 3192 SQ. YD. OF PLOTS HAS BEEN MULTIPL IED WITH THE SELLING RATE OF RS. 5000 PER SQ. YD., TO ARRIVE AT THE TOTAL CONSID ERATION OF RS. 1,59,60,000. AO HAS ALSO GIVEN A DEDUCTION FOR THE INDEXED COST OF ACQUISITION TO ARRIVE AT THE LONG TERM CAPITAL GAINS OF RS. 1,53,11 568. 5.8 THE APPELLANT HAS IN THE COURSE OF ASSESSMENT PROCEEDINGS AND EVEN AT THE TIME OF INITIATION OF ASSESSMENT PROCEEDINGS U/S 148 OF THE IT ACT STATED THAT THE AGRICULTURAL LAND SOLD DOES NOT PER TAIN TO THE APPELLANT AND INSTEAD BELONGS TO THE HUF OF THE APPELLANT. THE LA ND IS STATED TO BE ANCESTRAL AND HAS BEEN RECEIVED ON SUCCESSION. IT IS SUBMITTE D THAT FATHER OF THE APPELLANT' LATE SH. SULTAN SINGH INHERITED SOME AGR ICULTURAL LAND BEARING KHASRA NO. 694, 698, 699, 700, 723, 763 TO 768, 770 , 778, 798, 845 SITUATED IN VILLAGE BEHROR FROM HIS FOREFATHERS. THEREAFTER THE SAID AGRICULTURAL LAND DEVOLVED UPON SH. SUCHET SINGH AND SH. TEJ SINGH (B ROTHER OF THE APPELLANT) 4 ITA NO. 428/JP/2016. SH. SUCHET SINGH YADAV, BEHROR. AND LATER THROUGH VIBHAJAN PATRA (PARTITION DEED) D ATED 26/2/02 THE SAID LAND WAS EQUALLY PARTITIONED BETWEEN TWO BROTHERS OF THE FAMILY. 5.9 IT IS SUBMITTED BY THE APPELLANT THAT HUF OF S H. SUCHET SINGH YADAV RECEIVED AGRICULTURAL LAND IN PARTITION. COPY OF PA RTITION DEED IN BETWEEN VIDHYA W/O LATE SHRI TEJ SINGH, SATISH KUMAR, NIHAL CHAND, SANJAY KUMAR S/O TEJ SINGH AND SUCHET SINGH WAS SUBMITTED BEFORE THE LOWER AUTHORITY AND IS AGAIN SUBMITTED IN THE PRESENT PROCEEDINGS. FURTHER , A COPY OF JAMA BANDI ENDORSING PARTITION OF LAND HAS ALSO BEEN SUBMITTED TO SUBSTANTIATE. AO HAS NOT STATED IN THE ORDER THAT THE CONTENTION OF THE APPELLANT THAT LAND BELONGS TO HUF IS FACTUALLY INCORRECT. THESE FACTS HAVE BEE N CONFIRMED BY THE APPELLANT AND HIS SON SUNIL YADAV, IN THE COURSE OF ASSESSMENT PROCEEDINGS. 5.10 THE APPELLANT HAS FURTHER SUBMITTED THAT THE AGREEMENT FOR SALE OF LAND ENTERED INTO WITH SH. AKHILESH YADAV URF SUBHA SH S/O NATHU RAM YADAV, BEHROR WAS CANCELLED AND PART CONSIDERATION RECEIVE D FROM HIM HAVE BEEN DULY RETURNED BACK. A RETURN OF INCOME SHOWING THE GAINS MADE ON SALE OF PLOTS ALONGWITH THE COPY OF SALE DEEDS FOR THE SALE OF PLOTS MADE IN FY 2010- 11, 2011-12, 2012-13 AND 2013-14 HAS BEEN FILED BY THE HUF, SINCE THE OWNERSHIP OF LAND WAS IN THE HANDS OF HUF OF THE AP PELLANT. 5.11 THE DETAILED SUBMISSION ALONGWITH THE SUPPORT ING EVIDENCE FILED BY THE APPELLANT WAS FORWARDED TO THE AO FOR EXAMINATI ON AND SUBMISSION OF REPORT AFTER CONDUCTING ENQUIRIES AS CONSIDERED NEC ESSARY. THE AO WAS ASKED TO EXAMINE CAREFULLY THE MATERIAL AVAILABLE ON RECO RD AND COMMENT ON THE FOLLOWING ISSUES:- (I) WHETHER GAINS ON SALE OF LAND HAVE TO BE ASSESS ED IN THE HANDS OF AN INDIVIDUAL OR AN HUF; (II) WHETHER SALE PRICE CAN BE DETERMINED ON THE BA SIS OF A CANCELLED AGREEMENT OR NOT; 5 ITA NO. 428/JP/2016. SH. SUCHET SINGH YADAV, BEHROR. (III) WHETHER THE CLAIM OF DEDUCTION U/S 54F OF THE IT ACT IS TO BE GIVEN OR NOT AND IF YES, IN THE HANDS OF INDIVIDUAL OR AN HUF; (IV) WHETHER THE GAINS ON SALE OF LAND HAVE TO BE A SSESSED OVER A PERIOD OF FOUR YEARS OR IN ONE YEAR. 5.12 AO IN THE REMAND REPORT HAS REITERATED THE FA CTS THAT GAINS FROM SALE OF LAND HAVE TO BE ASSESSED IN THE HANDS OF THE APP ELLANT, AS AN INDIVIDUAL AS THE SALE AGREEMENT WAS EXECUTED BY HIM WITH SH. SUB HASH. FURTHER, IT IS STATED THAT UNDER THE PROVISIONS OF SECTION 2(47)(V ) OF THE IT ACT R.W.S. 53A OF THE TRANSFER OF PROPERTY ACT, THE PROPERTY WAS TRAN SFERRED TO THE INTENDING BUYER UNDER THE ABOVE SAID AGREEMENT. THEREFORE, GA INS EARNED ON SALE OF SUCH LAND HAVE TO BE ASSESSED IN THE HANDS OF THE I NDIVIDUAL. AS REGARDS THE CHARGEABILITY OF THE GAINS ON SALE OF LAND IS CONCE RNED, THE SAME HAVE BEEN RIGHTLY ASSESSED IN THE PERIOD UNDER CONSIDERATION. IT IS STATED IN THE REPORT THAT DEDUCTION U/S 54F OF THE IT ACT MAY BE GIVEN T O THE APPELLANT. 5.13 THE APPELLANT HAS STATED IN THE CROSS REPLY F ILED THAT AO HAS FAILED TO CONSIDER THE FACT THAT SH. SUBHASH IN HIS STATEMENT RECORDED BEFORE THE AO IN THE COURSE OF ASSESSMENT PROCEEDINGS HAS CONFIRMED THE FACT THAT SALE AGREEMENT ENTERED INTO EARLIER WITH THE APPELLANT W AS CANCELLED AS HE FAILED TO MAKE THE BALANCE PAYMENT. FURTHER, NO COMMENTS W ITH REGARD TO THE OWNERSHIP OF LAND IN THE HANDS OF THE HUF HAVE BEEN MADE BY THE AO. THE POSSESSION OF LAND WAS WITH THE APPELLANT AND THERE FORE PROVISIONS OF SECTION 53A OF THE TRANSFER OF PROPERTY ACT HAVE BEEN WRONG LY INVOKED BY THE AO. 5.14 HAVING CAREFULLY EXAMINED THE DETAILED EVIDEN CE AVAILABLE ON RECORD. I FIND THAT THERE IS NO DISPUTE THAT THE LAND WAS OWN ED BY THE FATHER OF THE APPELLANT AND HAD BEEN RECEIVED BY HIS FATHER ON IN HERITANCE. AFTER THE DEATH OF SH. SULTAN SINGH FATHER OF THE APPELLANT, THE LA ND WAS JOINTLY OWNED BY THE FAMILY OF THE APPELLANT AND SH. TEJ SINGH (BROTHER OF THE APPELLANT). THE LAND WAS PARTITIONED BY EXECUTION OF A DEED ON 26-02-200 2 AND EQUALLY DIVIDED 6 ITA NO. 428/JP/2016. SH. SUCHET SINGH YADAV, BEHROR. BETWEEN THE TWO BROTHERS. THE FACT OF OWNERSHIP OF LAND BY THE HUF OF THE APPELLANT IS CLEARLY NOT CONTROVERTED WITH ANY MATE RIAL EVIDENCE BY THE AO. THE APPELLANT HAS ALSO PLACED ON RECORD A COPY OF T HE JAMABANDI TO EVIDENCE THE PARTITION OF LAND. 5.15 THUS, IN VIEW OF THE ABOVE FACTS, I FIND THAT AO WAS NOT JUSTIFIED IN IGNORING THE OVERWHELMING EVIDENCE AVAILABLE ON REC ORD AND TREATING THE APPELLANT TO BE THE OWNER OF THE LAND IN HIS INDIVI DUAL CAPACITY. ACCORDINGLY, I HOLD THAT OWNERSHIP OF LAND LIES WITH THE HUF OF TH E APPELLANT AND THEREFORE IT WOULD BE APPROPRIATE TO TAX ANY GAINS ARISING ON SA LE OF SUCH LAND IN THE HANDS OF THE HUF OF THE APPELLANT. THEREFORE, I DIR ECT THE AO TO INITIATE NECESSARY PROCEEDINGS UNDER THE PROVISIONS OF THE I T ACT FOR ASSESSMENT OF GAINS MADE ON SALE OF LAND IN THE HANDS OF THE HUF. FURTHER, THE CONTENTIONS OF THE APPELLANT AS REGARDS THE DISCLOSURE OF SUCH GAINS ALREADY MADE IN THE HANDS OF THE HUF MAY ALSO BE VERIFIED. 5.16 FURTHER, AS REGARDS THE QUANTIFICATION OF GAI NS ON SALE OF LAND IS CONCERNED, THE APPELLANT HAS IN THE COURSE OF ASSES SMENT PROCEEDINGS STATED BEFORE THE AO THAT AGREEMENT TO SALE EXECUTED WITH SH. SUBHASH HAS BEEN CANCELLED. THEREAFTER, LAND HAS BEEN SOLD AFTER PLO TTING THE SAME TO DIFFERENT BUYERS OVER A PERIOD OF 3-4 YEARS. THE CONTENTIONS OF THE APPELLANT WERE CONFIRMED BY THE AO AFTER RECORDING A STATEMENT OF SH. SUBHASH, IN THE COURSE OF ASSESSMENT PROCEEDINGS. THE APPELLANT HAS ALSO FILED ON RECORD A COPY OF ALL THE SALE DEEDS DULY EXECUTED WITH DIFFE RENT BUYERS FROM TIME TO TIME IN THE OFFICE OF THE SUB REGISTRAR. THESE FACT S HAVE NOT BEEN CONTROVERTED BY THE AO BY MAKING ANY FURTHER ENQUIR Y OR WITH ANY OTHER MATERIAL EVIDENCE. THUS, I HOLD THAT GAINS MADE ON SALE OF LAND CAN NOT BE ASSESSED ON THE BASIS OF AN AGREEMENT TO SALE, WHIC H HAS BEEN CANCELLED. ACCORDINGLY, THE AO IS BEING DIRECTED TO ASSESS THE GAINS MADE ON SALE OF LAND IN THE HANDS OF THE HUF IN THE YEAR OF SALE OF SUCH LAND. 7 ITA NO. 428/JP/2016. SH. SUCHET SINGH YADAV, BEHROR. 5.17 THUS, AN ADDITION OF RS. 1,53,11,568 MADE BY THE AO ON ACCOUNT OF LONG TERM CAPITAL GAINS IN THE HANDS OF THE APPELLA NT, IN INDIVIDUAL CAPACITY IS DELETED WITH A DIRECTION TO ASSESS SUCH GAINS IN TH E HANDS OF THE HUF OF THE APPELLANT. FURTHER, AO WOULD TAX SUCH GAINS IN THE YEAR OF SALE OF THE PLOTS. THE ABOVE FINDING ON FACT IS NOT CONTROVERTED BY TH E REVENUE BY PLACING ANY CONTRARY MATERIAL ON RECORD. ADMITTEDLY, THE ASSES SING OFFICER HAS NOT CONTROVERTED THE FACT THAT OWNERSHIP OF THE LAND BY HUF, WHICH I S EVIDENCED BY THE COPY OF THE JAMABANDI. THEREFORE, WE DO NOT SEE ANY REASON TO I NTERFERE INTO THE FINDING ON FACT AS ARRIVED BY THE LD. CIT(A), SAME IS HEREBY AFFIRM ED. THE GROUND RAISED IN THIS APPEAL IS REJECTED. 6. IN THE RESULT, APPEAL OF THE REVENUE IN ITA NO. 428/JP/2016 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON TUESDAY, THE 24 TH DAY OF OCTOBER 2017. SD/- SD/- ( HKKXPUN ( DQY HKKJR ) ( BHAGCHAND) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 24/10/2017. POOJA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- THE ITO, BEHROR. 2. THE RESPONDENT SH. SUCHET SINGH YADAV, BEHROR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 428/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 8 ITA NO. 428/JP/2016. SH. SUCHET SINGH YADAV, BEHROR.