SUBHASH CHANDRA SANGHAI, Jaipur V. ADIT, Jaipur

ITA 429/JPR/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99549 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 22-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJ MEHRA JCIT DR DHK
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Gift; Business income; Principle of natural justice; Cost of acquisition; Fair market value; Reason to believe
• Section: 50C; 147; 148; 54

Judgement Text

ITA NO. 429/JP/2013 SHRI SUBHASH CHANDRA SANGHAI VS. DY. DIT ((INTE RNATIONAL TAXATION) 1 VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH FOE FLAG ;KN O] YS[KK LNL; DS LE{K BEFORE:SHRI R.P.TOLANI, JM & SHRI VIKRAM SINGH YADA V, AM VK;DJ VIHY LA-@ ITA NO. 429/JP/2013 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2004-05 SHRI SUBHASH CHANDRA SANGHAI, 25, INDRA CHOWK, NEPAL 446 00 CUKE VS. THE DY. DIT(INTERNATIONAL TAXATION) JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 430/JP/2013 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2004-05 SHRI PAWAN KUMAR SANGHAI, 25, INDRA CHOWK, NEPAL 446 00 CUKE VS. THE DY. DIT(INTERNATIONAL TAXATION) JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI VINOD GUPTA, CA JKTLO DH VKSJ LS@ REVENUE BY : SHRI RAJ MEHRA, JCIT -DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 29/10/2015 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 30 /11/2015 VKNS'K@ ORDER PER R.P. TOLANI, JM:- THESE ARE TWO ASSESSEES APPEAL ARISING OUT OF THE COMMON ORDER OF LD. CIT(A)-II DATED 18-03-2013 FOR AY 2004-05 RAISI NG COMMON GROUNDS. ITA NO. 429/JP/2013 SHRI SUBHASH CHANDRA SANGHAI VS. DY. DIT ((INTE RNATIONAL TAXATION) 2 ORDER APPEALED AGAINST AND ISSUES INVOLVED BEING CO MMON ARE DISPOSED OF BY THIS COMMON ORDER FOR THE SACK OF CONVENIENCE. F OLLOWING COMMON GROUNDS ARE RAISED IN EACH APPEAL: GROUND OF APPEAL NO. 1 IMPUGNED ASSESSMENT ORDER PASSED U/S 143(3)/148 IS BAD IN LAW AND ON FACTS BEING AGAINST THE PRINCIPAL OF NATURAL JUSTICE AND FOR MANY MORE OTHER REASONS. FURTHER, THE LD. A.O. WAS NOT JUSTIFIED IN INITIATING PROCEEDING U/S 148 OF THE I .T. ACT. THE INITIATION OF PROCEEDING IS ILLEGAL AND UNJUSTIFIED . FURTHER, LD. CIT(A) ERRED BY UPHOLDING THE ACTION OF LD. AO. GROUND OF APPEAL NO. 2 THAT UNDER THE FACTS & CIRCUMSTANCES OF THE CASE LD . A.O. HAS ERRED BY HOLDING THAT, SALE OF PLOT OF LAND (SITUAT ED AT A-5, MAN NAGAR, JHUNJHUNU) WOULD BE CONSIDERED IN AY 2004-05 , THE YEAR IN WHICH THE SALE DEED HAS BEEN REGISTERED WIT H THE DY. INSPECTOR GENERAL OF STAMPS, AND THUS THE CAPITAL G AIN RISING ON THE SAME IS TAXABLE IN THE HANDS OF ASSESSEE IN AY 2004-05. FURTHER, LD. CIT(A) ERRED BY UPHOLDING THE ACTION O F LD. AO. FURTHER, CIT(A) HAS ERRED WHILE DERIVING SUCH CONCL USION BECAUSE OF FOLLOWING REASONS:- (A) THAT UNDER THE FACTS & CIRCUMSTANCES OF THE CAS E LD. CIT(A) HAS ERRED BY NOT DISCUSSING TRANSFER, ESPECIALLY WHEN THERE IS A SPECIFIC PROVISION UNDER THE INCOME TAX ACT U/S 2(47) FOR DETERMINING TRANSFER , WHILE DECIDING THE ORDER. (B) THAT UNDER THE FACTS & CIRCUMSTANCES OF THE CAS E LD. CIT(A) HAS ERRED BY WRONGLY DISTINGUISHING THE FOLLOWING CASE LAWS OF JURISDICTIONAL HIGH COURT OF RAJASTHAN, RELIED UPON ASSESSEE. ITA NO. 429/JP/2013 SHRI SUBHASH CHANDRA SANGHAI VS. DY. DIT ((INTE RNATIONAL TAXATION) 3 (I) MIRROR MANUFACTURING COMPANY, 260 ITR 503 (RAJ.) (II) VISHNU TRADING & INVESTMENT COMPANY 259 ITR 724 (RAJ.) GROUND OF APPEAL NO. 3 THAT UNDER THE FACTS & CIRCUMSTANCES OF THE CASE LD . A.O. HAS ERRED BY MAKING ADDITION OF RS. 27,76,200/- ON ACCO UNT OF LONG TERM CAPITAL GAIN, ARISING OUT OF SALE OF PLOT OF L AND SITUATED AT A-5, MAN NAGAR, JHUNJHUNU. FURTHER, LD.CIT(A) ERRED BY UPHOLDING THE ACTION OF LD. AO ON THE FOLLOWING BAS IS. (A) ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) IS FACTUALLY WRONG IN CONSIDERING THE SALE C ONSIDERATION TO BE RS. 27,00,000/- WHEREAS, THE ACTUAL SALE CONSIDE RATION WAS OF RS. 13,50,000/- AND THUS LD. CIT(A) FAILED TO UNDER STAND THE ISSUE UNDER APPEAL. (B) THAT UNDER THE FACTS & CIRCUMSTANCES OF THE CAS E LD. CIT(A) HAS WRONGLY PROCEEDED TO ASSUME THAT THE INDEXED COST OF ACQUISITION TAKEN BY THE LD. AO OF RS. 92,6 00/- HAS NOT BEEN DISPUTED BY THE APPELLANT. (C) THAT UNDER THE FACTS & CIRCUMSTANCES OF THE CAS E LD. CIT(A) HAS ERRED BY WRONGLY INTERPRETING THE PR OVISION OF SECTION 50C OF THE INCOME TAX ACT. 2.1 BRIEF FACTS ARE, BOTH THE ASSESSES ARE INDIVID UALS AND DURING THE YEAR UNDER CONSIDERATION, ASSESSEE HAVING RESIDENTIAL ST ATUS OF NON-RESIDENT AS THEY ARE LIVING IN NEPAL SINCE SEVERAL YEARS ENGAGE D IN THEIR BUSINESS ACTIVITIES. BOTH ASSESSES I.E. S/SHRI PAWAN SANGHA I AND SUBHASH SANGHAI WERE CO-OWNERS, OF A PROPERTY SITUATED AT PLOT A-5, MAN NAGAR, JHUNJHUNU, ADMEASURING ABOUT 1200 SQ. YDS. WHICH WAS SOLD BY T HEM IN THREE DIFFERENT ITA NO. 429/JP/2013 SHRI SUBHASH CHANDRA SANGHAI VS. DY. DIT ((INTE RNATIONAL TAXATION) 4 PARTS. NOTICES U/S 148 WERE ISSUED ON THEM QUA ONE PART OF THE PROPERTY ADM. 750 SQ. YDS., THE DETAILS THEREOF ARE MENTIONE D BELOW. SIZE OF PARTLY SOLD PLOT OUT OF ORIGINAL PLOT NO. A-5 SALE CONSIDERATION SHOWN IN THE SALE DEED (RS.) DATE OF EXECUTION OF SALE DEED BEFORE SUB- REGISTRAR DATE OF PRESENTATION OF SALE DEED FOR REGISTRATION TO SUB REGISTRAR JHUNJHUNU VALUE TAKEN BY THE DY. INSPECTOR GENERAL OF STAMPS (RS.) VIDE ORDER NO DATED NAME OF THE PURCHASER PARTY 750 SQ. YDS. 13,50,000/- (APPELLANT SHARE 6,75,000/-) 20.08.2001 20.08.2001 56,45,000/- 29/24/16534 DATED 28.03.2003/ 31.03.203 (APPELLANT SHARE 28,22,500/-) SMT. SANTOSH KEJARIWAL W/O SH. PAWAN KUMAR KEJARIWAL ACCORDING TO ASSESSEES BASED ON THE INFORMATION AS GIVEN IN REASONS RECORDED FOR ISSUING NOTICES U/S 148 WERE ILLEGAL FOR AT 2004-05 AND THE REASSESSMENTS WERE AND BAD IN LAW. BESIDES ON MERIT S ALSO THE ADDITIONS ON ACCOUNT OF LONG TERMS CAPITAL GAINS WERE EXPLAINED TO BE NOT COMPUTABLE IN AY 2004-05. LD. AO REJECTED ASSESSEES OBJECTIONS A ND DETERMINED THE LTCG ON TOTAL PROPERTY AT RS. 55,52,400/-; THEREO F I.E. RS. 27,76,200/- WAS ADDED TO THE INCOME OF BOTH THE ASSESSES. 2.2 AGGRIEVED BOTH FILED 1 ST APPEALS, WHERE LD. CIT(A), CONFIRMED THE ORDERS PASSED BY LD. AO. ITA NO. 429/JP/2013 SHRI SUBHASH CHANDRA SANGHAI VS. DY. DIT ((INTE RNATIONAL TAXATION) 5 AGGRIEVED, THE ASSESSEES ARE BEFORE US. 2.3 LD. COUNSEL FOR THE ASSESSEE SHRI VINOD GUPTA ( FCA) CONTENDS THAT LD. AO IN BOTH THE CASES RECORDED SAME REASONS FOR INITIATION OF THE PROCEEDINGS IN U/S 147 WHICH ARE AS UNDER: INCOME-TAX OFFICER, WARD-1, JHUNJHUNU VIDE LETTER NO. 5701 DATED 31.3.2010 AND LETTER NO. 70 DATED 23.4.2 009 FORWARDED DOCUMENTS RELATING TO TRANSACTIONS OF SAL E PURCHASE OF PROPERTY JOINTLY BY THE ABOVE SAID PERSONS OUT O F PLOT NO. A- 5, MAN NAGAR, JHUNJHUNU WHICH REVEALS THAT THOUGH T HE TRANSACTIONS OF SALE/PURCHASE WERE COMPLETED ON 20.8.2001 I.E. IN THE FINANCIAL YEAR 2001-02 RELEVANT TO THE ASSESSMENT YEAR 2002-03 BUT THE REGISTRATION OF THE PROPERTY TOOK P LACE ON 6.10.2003 I.E. RELEVANT TO THE A.Y. 2004-05. THE TO TAL SALE CONSIDERATION RECEIVED FROM PARTIES WAS RS. 13,50,0 00/- BUT THE VALUE U/S 50C ADOPTED BY THE REGISTRAR IS RS. 56,45 ,000/-. THE VALUE FOR THE PURPOSE OF CAPITAL GAIN EARNED BY THE ABOVE ASSESSEE IS, THEREFORE TO BE TAKEN AT RS. 56,45,000 /- THE ASSESSEE ARE RESIDING AT NEPAL DURING THE YEAR AS PER INFORMATION TO THIS OFFICE AND THEREFORE, NON-RESID ENT INDIANS DURING THE YEAR UNDER CONSIDERATION NO RETURNS OF I NCOME HAS BEEN FILED BY THE ABOVE SAID ASSESSEES IN RESPECT O F THE CAPITAL GAIN TAX EARNED BY THEM IN RESPECT OF THE ABOVE STA TED PROPERTY TRANSACTION. THEREFORE I HAVE REASON TO BELIEVE THA T A SUM OF RS. 28,00,000/- BEING UNDISCLOSED INCOME OF EACH OF THE ASSESSEE FOR THE AY 2004-05 HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF PROVISIONS OF SECTION 147 OF THE IT ACT 1961, THEREFORE, A NOTICE U/S 148 OF THE INCOME TAX ACT 1 961 IS REQUIRED TO BE ISSUED AND SERVED UPON THE ASSESSEE TO ASSESS THE INCOME ESCAPED AS STATED, HEREINABOVE FOR THE AY 20 04-05 2.4 ADVERTING TO FIRST GROUND ABOUT THE VALIDITY OF 147 PROCEEDINGS LD. COUNSEL CONTENDS THAT THE REASON AS RECORDED ARE SE LF CONTRADICTORY, AS ON ONE HAND LD AO ADMITTED THAT SALE/PURCHASE TRANSACT ION WAS COMPLETED ON ITA NO. 429/JP/2013 SHRI SUBHASH CHANDRA SANGHAI VS. DY. DIT ((INTE RNATIONAL TAXATION) 6 20.08.2001 I.E. RELEVANT TO AY 2002-03, THUS CORREC T YEAR OF INITIATION OF PROCEEDINGS U/S 147 WAS AY 2002-03 AND NOT AY 2004 -05. FOR AN INCOME WHICH HAS ESCAPED ASSESSMENT IN AY 2002-23 NOTICE U /S 147 CANNOT BE ISSUED FOR AY 2004-05. THUS THE NOTICE ISSUED U/S 1 47 AY 2004-05, IS BAD IN LAW AND AGAINST SETTLED JUDICIAL PRINCIPALS. LD. AO, ISSUING THE NOTICE U/S 148 FOR AY 2004-05 IS FURTHER WRONG IS FURTHER ILLE GAL AS THESE RECORDED REASONS REVEAL THAT DY. INSPECTOR GENERAL FINALLY D ETERMINED THE STAMP DUTY VALUE OF SAID PROPERTY ON 31.03.2003 VIDE HIS ORDER NO. 29/34/16534 DATED 28.03.2003; WHICH ALSO IS RELEVANT TO AY 2003-04 AN D NOT 2004-05. FROM THIS FACTUAL POSITION WHICH IS EXPLICIT FROM THE RE ASONS RECORDED ALTERNATIVELY MAY BE ISSUED FOR AY 2003-04 AND IN ANY CASE NOT FO R AY 2004-05. THUS, THE IMPUGNED NOTICES AND REASSESSMENT ORDERS NEED T O BE QUASHED, AS PER THE DESCRIPTION OF REASON RECORDED THE 148 NOTICES COUL D NOT HAVE BEEN ISSUED FOR AY 2004-05. CONSEQUENTLY REASSESSMENTS FRAMED F OR AY 2004-05 ARE BAD IN LAW. LD. AO IN THE IMPUGNED ORDER HAS ACCEPT ED THAT:- 1. THE SALE DEED WAS PREPARED AND PRESENTED BEFORE TH E SUB-REGISTRAR, JHUNJHUNU ON 20.08.2001 BUT FOR VERIFICATION OF PRO PER VALUATION, THE REGISTRATION PROCESSED WAS NOT COMPLETED ON THAT DA TE. DESPITE ACCEPTING THIS FACT LD. AO ERRONEOUSLY HELD THAT AS SESSEE HAS FAILED TO PROVE WITH EVIDENCE OF HANDING OVER THE POSSESSION OF THE ASSET TO THE PURCHASER BEFORE COMPLETION OF ALL TERMS AND CONDIT IONS OF THE INSTRUMENT OF TRANSACTION. WHILE HOLDING SO LD. AO FAILED TO CONSIDER THAT IN THE SALE DEED ITSELF IT WAS CLEARLY MENTION ED THAT THE POSSESSION HAS BEEN ALREADY DELIVERED AND AMOUNT OF CONSIDERAT ION RECEIVED BY ITA NO. 429/JP/2013 SHRI SUBHASH CHANDRA SANGHAI VS. DY. DIT ((INTE RNATIONAL TAXATION) 7 DDS. THUS THE OWNERSHIP IN IMPUGNED PROPERTY STOOD TRANSFERRED TO OWNER BY DELIVERY OF POSSESSION AND RECEIPT OF CONS IDERATION IN TERMS OF SEC. 2(47) RWS 48 AS ON 20-08-2001. LD. AO FURTH ER HAS RELIED ON THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CA SE OF CIT VS PODDAR CEMENT (P) LTD & ORS REPORTED AT (1997) 226 ITR 625 WHICH IN FACT HELPS THE CASE OF THE ASSESSEE. 2. LD. AO COMPLETELY IGNORED THE DEFINITION OF TRANSFE R GIVEN IN SECTION 2(47) OF THE IT ACT, 1961 WHICH IS APPLICABLE TO CO MPUTATION OF CAPITAL GAINS AND HARPED ON SECTIONS 17, 48 & 49 OF INDIAN REGISTRATION ACT, 1877 SECTION 5 & 54 OF TRANSFER O F PROPERTY ACT, 1882, WHICH DO NOT OVER RIDE SEC. 2(47). LD. CIT(A) THOUGH IMPLIEDLY ACCEPTED THAT THE DELIV ERY OF POSSESSION WAS MENTIONED IN THE SALE DEED HOWEVER R EJECTED IT ON AN ASSUMPTION THAT THE ARGUMENT THAT THE POSSESSION OF THE PROPERTY W AS TRANSFERRED TO THE BUYER ON 20.08.2001 BECAUSE LAST THREE LINES ON PAGE NO. 6 OF THE SALE DEED MENTION SO, CANNOT BE ACCEPTED IN THE ABS ENCE OF ANY OTHER MATERIAL PLACED ON RECORD BY THE APPELLANT BECAUSE THIS SALE DEED WAS NOT FINAL AND HAD BEEN SUBMITTED TO THE SUB-REGISTR AR OFFICE FOR REGISTRATION. LD. CIT(A) FURTHER OBSERVED REFER LAST PARA ON PAGE 20 OF THE ORDER THAT IN THE CASE OF VISHNU TRADING AND INVESTMENT COMPANY T HE TRIBUNAL HAS TAKEN THE VIEW THAT IN ABSENCE OF THE REGISTRATION OF THE SALE DEED, THERE IS NO TRANSFER AND NO CAPITAL GAIN TAX IS ATTRACTED, BUT HONBLE RAJASTHAN HIGH COURT HELD OTHERWISE THAT FOR TAXING CAPITAL GAIN R EGISTRATION IS NOT COMPULSORY. WE MUST NOT MISS THE POINT THAT TAXING OF CAPITAL GAIN HAS BEEN HELD EQUALLY IMPORTANT BY THE HONBLE HIGH COURT, BUT IN THE CASE OF THE APPELLANT NO CAPITAL GAINS WHATSOEVER HAS BEEN OFFE RED FOR TAX EVEN IN AY ITA NO. 429/JP/2013 SHRI SUBHASH CHANDRA SANGHAI VS. DY. DIT ((INTE RNATIONAL TAXATION) 8 2002-03 EVEN ON THE BASIS OF THE SALE DEED DATED 20 .08.2001 WHICH IS BEING RELIED UPON TO ESCAPE CAPITAL GAINS AT ALL. THE INT ENTION OF THE APPELLANT IS NOT TO PAY ANY CAPITAL GAINS TAX AS NO RETURNS HAS BEEN FILED WHATSOEVER. THUS FROM THE ORDER OF LD. CIT(A) IT CLEARLY EMERGES THA T HONBLE RAJASTHAN HIGH COURT IS IN FAVOUR OF THE ASSESSEE BUT AS THE CAPIT AL GAINS WERE NOT OFFERED IN AY 2002-03 IT IMPLIES THAT ASSESSEES HAVE NO INTENT ION TO PAY TAX, THEREFORE, IT IS TAXED IN AY 2004-05. LD. COUNSEL VEHEMENTLY C ONTENDS THAT THE CONCLUSION OF THE ISSUE BY LD. CIT(A) IS HIGHLY IMP ROPER TOTALLY OBLIVIOUS TO THE SETTLED LEGAL PROPOSITION THAT ANY INCOME CAN B E TAXED IN RIGHT HANDS AND IN RIGHT YEAR ONLY. MERELY BECAUSE THE TAX IS NOT P AID IN THE RIGHT ASSESSMENT YEAR, IT DOES NOT GIVE ANY POWER TO TAXING AUTHORIT IES TO TAX THE SAME IN AN YEAR THEY LIKE. IT IS UNDISPUTED THAT: I. THE VERY DOCUMENT I.E. SALE DEED UNEQUIVOCALLY DEMONSTRATES THAT THE POSSESSION OF THE PROPERTY WA S HANDED OVER BY THE SELLER TO THE BUYER ON 20.08.2001, I.E. ON THE DATE OF THE SIGNING OF THE SALE DEED, AND THE BUYER HAS ACKNOWLEDGED HAVING TAKEN OVER THE POSSESSION OF TH E PROPERTY ON THE SAME DATE. II. ALL THE RIGHTS TO ENJOY THE PROPERTY AS OWNER W ERE ALSO GIVEN SIMULTANEOUSLY THROUGH THE SAID SALE DEED TO THE BUYER. III. INCOME-TAX ACT HAS SPECIFIC DEFINITION FOR THE TERM TRANSFER. THEREFORE, WE ARE PRODUCING HEREINBELOW THE DEFINITION CONTAINED IN SECTION 2(47) OF THE INCOME -TAX ACT AS FOLLOWS FOR READY REFERENCE:- ITA NO. 429/JP/2013 SHRI SUBHASH CHANDRA SANGHAI VS. DY. DIT ((INTE RNATIONAL TAXATION) 9 (47) [TRANSFER, IN RELATION TO A CAPITAL ASSET, I NCLUDES, - (I) THE SALE, EXCHANGE OR RELINQUISHMENT OF THE ASS ET; OR (II) THE EXTINGUISHMENT OF ANY RIGHTS THEREIN; OR (III) THE COMPULSORY ACQUISITION THEREOF UNDER ANY LAW; OR (IV) IN A CASE WHERE THE ASSET IS CONVERTED BY THE OWNER THEREOF INTO, OR IS TREATED BY HIM AS, STOCK-IN-TRA DE OF A BUSINESS CARRIED ON BY HIM, SUCH CONVERSION OR TREATMENT;] [OR] [(IVA) THE MATURITY OR REDEMPTION OF A ZERO COUPON BOND; OR] [(V) ANY TRANSACTION INVOLVING THE ALLOWING OF THE POSSESSION OF ANY IMMOVABLE PROPERTY TO BE TAKEN OR RETAINED I N PART PERFORMANCE OF A CONTRACT OF THE NATURE REFERRED TO IN SECTION 53A OF THE TRANSFER OF PROPERTY ACT, 1882 ( 4 OF 1882); OR (VI) ANY TRANSACTION (WHETHER BY WAY OF BECOMING A MEMBER OF, OR ACQUIRING SHARES IN, A CO-OPERATIVE SOCIETY, COMPANY OR OTHER ASSOCIATION OF PERSONS OR BY WAY O F ANY AGREEMENT OR ANY ARRANGEMENT OR IN ANY OTHER MANNER WHATSOEVER) WHICH HAS THE EFFECT OF TRANSFER RING, OR ENABLING THE ENJOYMENT OF, ANY IMMOVABLE PROPERT Y. EXPLANATION.-FOR THE PURPOSES OF SUB-CLAUSES (V) AN D (VI), IMMOVABLE PROPERTY SHALL HAVE THE SAME MEANING AS IN CLAUSE (D) OF SECTION 269UA;] A. BY APPLYING THE REQUIREMENTS OF DIFFERENT CLAUSES O F THE SAID SECTION TO THE FACTS OF THESE CASES, WHAT QUALIFY FOR A TRA NSACTION TO BE HELD AS TRANSFER AS DEFINED IN SEC. 2(47) IT EMERGES THA T:- I. IT IS AN ADMITTED FACT THAT SALE DEED WAS EXECUTED ON 20.8.2001, HENCE, SALE WAS HAPPENED UPON EXECUTION OF SUCH DEED, THEREFORE, COVERS UNDER SUB-CLAUSE (I). II. THE RIGHTS OF SELLER IN THE SAID PROPERTY EXTINGUIS HES W.E.F. 20.08.2001 (REFER PARA 5 & 6 AT PAGE NO. 7 & 8 OF T HE SALE DEED, THEREFORE, COVERS UNDER SUB-CLAUSE (II). III. POSSESSION WAS GIVEN AND SAID POSSESSION WAS GIVEN IN PART PERFORMANCE OF A CONTRACT RELATED TO IMMOVABLE PROP ERTY, ITA NO. 429/JP/2013 SHRI SUBHASH CHANDRA SANGHAI VS. DY. DIT ((INTE RNATIONAL TAXATION) 10 HENCE, CONTRACT IS HAVING NATURE REFERRED TO THE S ECTION 53A OF TRANSFER OF PROPERTY ACT. THEREFORE, COVERED UNDER SUB-CLAUSE (V) ALSO. IV. THE SALE DEED SHOWS THAT COMPLETE PAYMENT WAS MADE FROM THE BUYER TO THE SELLER; THE POSSESSION OVER THE PR OPERTY WAS HANDED OVER FROM THE SELLER TO THE BUYER AND IT WAS ALSO AGREED VIDE CLAUSE NO. 6 THAT BUYER CAN ENJOY THE PROPERT Y AS OWNER, HENCE, ENABLED THE BUYER TO ENJOY THE PROPERTY AS O WNER. THEREFORE, COVERED UNDER SUB-CLAUSE (VI) ALSO. V. IT IS UNDISPUTED THAT SALE DEED WAS EXECUTED ON 20.8.2001, APPLYING THE ABOVE TESTS THE IMPUGNED SA LE OF PROPERTY QUALIFIES TO FALL UNDER FOUR DIFFERENT SUB -CLAUSES OF SAID SECTION ALTHOUGH ALL SUB CLAUSES ARE INDEPENDE NT MEANS A TRANSACTION CAN BE CLASSIFIED AS TRANSFER EVEN IF IT FALLS UNDER ANY OF SUB-CLAUSE. AS A MATTER OF FACT, AFTER INSERTION OF SUB-CLAUSE (V) AND (VI), THE SCOPE OF THE TERM T RANSFER UNDER THE INCOME-TAX ACT HAVE EXTENDED. VI. A PERUSAL OF THE ORDER OF AO & CIT(A) SHOWS THAT TH E BASIS FOR HOLDING THE IMPUGNED TRANSACTION TAXABLE IN A.Y. 2004-05 ARE A SUNDER:- A. THAT NO DOCUMENTS TO PROVE THE TRANSFER OF PROPERTY , LIKE SALE AGREEMENT, POWER OF ATTORNEY, GIFT DEED O R RELINQUISHMENT OF CHARGE ETC. HAS BEEN PRODUCED BY THE ASSESSEE TO AVOID THE NEED OR REQUIREMENT OF REGIST RATION OF SALE DEED. WHEREAS, ACCORDING TO A.O. THERE ARE SUCH DOCUMENTS IN THE CASE LAWS RELIED BY THE ASSESSEE V IZ. CIT V. PODDAR CEMENT (P) LTD PASSED BY THE HONBLE SUPREME COURT, AND CIT V. RAJASTHAN MIRROR MFG. CO. AND CIT V. VISHNU TRADING & INVESTMENT CO. PASSED B Y THE HONBLE RAJASTHAN HIGH COURT. B. THAT THE ASSESSEE HAS NOT SUBMITTED ANY OTHER DOCUM ENT IN SUPPORT OF HIS CLAIM THAT THE ASSESSEE ENTERED I NTO AN AGREEMENT TO SELL THE PROPERTY EVEN PRIOR TO REGIST ERED SALE DEED. ITA NO. 429/JP/2013 SHRI SUBHASH CHANDRA SANGHAI VS. DY. DIT ((INTE RNATIONAL TAXATION) 11 C.THAT THE ASSESSEE HAD NEITHER FILED HIS INCOME TA X RETURN FOR THE AY 2002-03 SHOWING LONG TERM CAPITAL GAIN A ND OFFERED TAX ON THAT. D. HOWEVER, THE BASIS ON WHICH LD AO AND CIT(A) FRA MED THEIR OPINION IS AGAINST THE SETTLED LEGAL POSITION DUE TO FOLLOWING REASONS:- I. THE ASSESSEE HAD EXECUTED INTO A SALE DEED ON 20.08 .2001 AND THE SAME WAS PRESENTED FOR REGISTRATION BEFORE SUB REGISTRAR ON 20.08.2001 ITSELF AS EVIDENT FROM THE BACK SIDE OF PAGE NOS. 1, 2 & 3 OF THE REGISTERED SALE DEED PRODUCED BY THE ASS ESSEE. THUS THE ALLEGATION THAT ASSESSEE FAILED TO PRODUCE ANY DOCUMENT TO PROVE AND SUPPORT THE SUBJECT TRANSFER OF IMMOVABLE PROPERTY IS INCORRECT, ERRONEOUS AND PERVERSE. MOREOVER, IT APP EARS THAT AO AS WELL AS CIT(A) ARE NOT RECOGNIZING EITHER SALE D EED AS DOCUMENT OR SALE DEED WITHOUT REGISTRATION AS DOCUM ENT. IN BOTH THE SITUATION AO & CIT(A) HAVE ERRED ON FACT, AS THE SALE DEED IS ENFORCEABLE DOCUMENT EVEN WITHOUT REGISTRAT ION, AS DISCUSSED HEREINAFTER. FURTHER, IF WE COMPARE UNREG ISTERED SALE DEED WITH AGREEMENT, THERE IS NO DIFFERENCE AS FAR AS CONTRACTUAL RIGHTS ARE CONCERN. II. IT IS PERTINENT TO MENTION HERE THAT, NOT ONLY THE SALE DEED WAS EXECUTED ON 20.08.2001, EVEN THE POSSESSION WAS TRA NSFERRED TO THE BUYER ON THE SAID DATE, FULL CONSIDERATION AS P ER SALE DEED WAS RECEIVED THROUGH BANKING CHANNEL BY THE ASSESSE E FROM THE BUYER PRIOR TO THE SAID DATE AND THE SALE DEED ITSE LF WAS PRESENTED FOR REGISTRATION BEFORE THE SUB-REGISTRAR ON 20.08.2001. AS EVIDENT FROM PAGE NO. 6 OF THE REGIS TERED SALE DEED. MOREOVER, THE CERTIFICATE FOR DLC VALUE WAS A LSO ISSUED BY THE DY. INSPECTOR GENERAL OF STAMPS VIDE CERTIFI CATE NO. 29/34/16534 DT. 28.03.2003 ON 31.03.2003, BUT THE R EGISTRATION COULD BE DONE ON 06.10.2003 UPON PAYMENT OF ADDITIO NAL STAMP DUTY AS EVIDENT FROM BACK SIDE OF PAGE 4 & 12 OF TH E REGISTERED SALE DEED. III. IT IS A MATTER OF RECORD AND FACT THAT THE TRANSACT ION OF TRANSFER OF IMMOVABLE PROPERTY CONCLUDED INSOFAR AS THE ASSESSE E AND THE ITA NO. 429/JP/2013 SHRI SUBHASH CHANDRA SANGHAI VS. DY. DIT ((INTE RNATIONAL TAXATION) 12 BUYER ARE CONCERNED ON 20.08.2001 FOR ALL PURPOSES. MERE DETERMINATION OF DLC VALUE ON 31.03.2003 AND REGIST RATION OF THE SALE DEED BY THE SUB-REGISTRAR ON 06.10.2003 CA NNOT DETERMINE THE DATE OF TRANSFER OF THE SUBJECTED IMM OVABLE PROPERTY IN YEARS DIFFERENT FROM THE YEAR IN WHICH THE TRANSFER ACTUALLY TOOK PLACE I.E. IN FY 2001-02. THERE IS NO SUCH LAW OR PRACTICE IN THE DEPARTMENT TO CONSIDER THE DATE OF REGISTRATION OF IMMOVABLE PROPERTY. THUS, THE VIEW OF AO AND CIT(A) IS CONTRARY TO LAW AND ESTABLISHED PRACTICE IN THE DEP ARTMENT. IV. FURTHER, IF ONE WERE TO TAKE A VIEW THAT A TRANSACT ION IS COMPLETE ONLY WHEN THE DOCUMENT IS REGISTERED WITH THE REGIS TRAR, THE DATE OF REGISTRATION WOULD REMAIN UNCERTAIN. REGIST RATION IS NOT AN ACT OF THE VENDOR OR VENDEE, BUT AN ACT OF A THI RD PARTY I.E. REGISTRATION AUTHORITY, WHO IS NOT A PARTY TO THE T RANSACTION. SINCE NO TIME LIMIT IS PROVIDED FOR REGISTRATION, T HERE MAY BE DELAYS IN THE SAME. THE PROFITS OR GAINS OF THE TRA NSFEROR AND THE TRANSFEREE CANNOT BE MADE DEPENDENT UPON THE ACTION OF A THIRD PARTY I.E. REGISTERING AUTHORITY. V. EFFECTING THE TRANSFER BY EXECUTING THE SALE DEED, ADMITTING ITS EXECUTION BEFORE THE SUB-REGISTRAR, RELINQUISHING R IGHTS IN THE IMMOVABLE PROPERTY, RECEIVING CONSIDERATION, PARTIN G WITH THE POSSESSION, VENDOR I.E. ASSESSEE HAS DONE EVERYTHI NG WITHIN HIS POWER. FURTHER, THE SELLER IS REQUIRED TO SHOW AS S ALE OF THE ASSET IN HIS BOOKS, CORRESPONDINGLY, AFTER ACQUIRING THE ASSET, THE BUYER IS REQUIRED TO SHOW THE PROPERTY IN ITS BOOKS . THUS, IF THE VIEW OF THE LD. AO WERE TO BE TAKEN THEN DUE TO UNC ERTAINTY ABOUT DATE OF REGISTRATION WHICH DEPENDS UPON THE A CTION OF REGISTERING AUTHORITY FOR WHICH NO TIME LIMIT IS PR OVIDED IN REGISTRATION ACT OR ELSEWHERE.FURTHER, EVEN AFTER D ETERMINATION OF STAMP DUTY, SAME IS REQUIRED TO BE PAID FOR REGI STRATION AND SAME MAY BE CHALLENGED IN COURT AND IT MAY TAKE YEA RS TO BE SETTLED AND TILL PAYMENT OF STAMP DUTY REGISTRATION CANNOT HAPPENED. UNDER SUCH CIRCUMSTANCE, NEITHER TAX LIAB ILITY CAN BE WORKED OUT NOR CAN ACCOUNTING TREATMENT GIVE EFFECT BY SELLER AND BUYER. THEREFORE, THE VIEW OF AO WOULD CREATE U NCERTAINTY AND CHAOS AND DEPARTMENT IS ALSO NOT CHARGING TAX A CCORDING TO SAID VIEW. ITA NO. 429/JP/2013 SHRI SUBHASH CHANDRA SANGHAI VS. DY. DIT ((INTE RNATIONAL TAXATION) 13 VI. IT IS WORTHWHILE TO FURTHER ADD HERE THAT, UNDER PA RT 12 OF THE INDIAN REGISTRATION ACT, THE REGISTRAR HAS POWER TO REGISTER A DOCUMENT DESPITE THE REFUSAL OF THE TRANSFEROR, WHI CH SHOWS THAT ONCE THE SALE DEED IS EXECUTED BETWEEN THE VENDOR A ND VENDEE, THE VENDOR LOSSES ALL THE RIGHTS IN THE PROPERTY, W HICH WAS ENJOYED BY HIM PREVIOUSLY BEFORE EXECUTION OF SALE DEED, AND THUS HE CANNOT REFUSE TO SELL OR TRANSFER THE PROPE RTY LATER ON ONCE THE DEED IS EXECUTED EVEN THOUGH NOT REGISTERE D. SINCE, IN THE INSTANT CASE ALSO SALE DEED WAS EXECU TED AND PRESENTED ON 20.08.2001 ALONG WITH TRANSFERRING OF POSSESSION AFTER RECEIVING FULL CONSIDERATION ON OR BEFORE 20. 08.2001, THE SELLER LOSSES HIS ALL RIGHTS VESTED IN THAT PROPERT Y W.E.F. 20.08.2001. VII. FURTHER, LD. AO & CIT(A), IN THE CASE LAW RELI ED UPON BY THEM CIT VS. PODDAR CEMENT (P) LTD. ETC., 226 ITR 625 (S C), MISINTERPRETED THE FACT OF THE CASE. RATHER THE FAC TS OF THE RELIED UPON CASE LAW ARE IN FAVOUR OF ASSESSEE, WHEREIN IT WAS HELD THAT WE ARE CONSCIOUS OF THE SETTLED POSITION THAT UNDER THE CO MMON LAW `OWNER' MEANS A PERSON WHO HAS GOT VALID TITLE LEGALLY CONV EYED TO HIM AFTER COMPLYING WITH THE REQUIREMENTS OF LAW SUCH AS TRAN SFER OF PROPERTY ACT, REGISTRATION ACT, ETC. BUT IN THE CONTEXT OF S . 22 OF THE IT ACT HAVING REGARD TO THE GROUND REALITIES AND FURTHER H AVING REGARD TO THE OBJECT OF THE IT ACT, NAMELY, `TO TAX THE INCOME', WE ARE OF THE VIEW, `OWNER' IS A PERSON WHO IS ENTITLED TO RECEIVE INCO ME FROM THE PROPERTY IN HIS OWN RIGHT. PERUSAL OF WHICH STRENGTHEN OUR CONTENTION THAT, REGISTRATION OF DOCUMENTS IS NOT A NECESSARY CONDITION TO CONSTITUTE TRANSFER UNDER IT ACT. THUS, LD. AO & CI T(A) FAILED TO APPRECIATE THE FINDINGS. VIII. IT IS ALSO IMPORTANT TO NOTE THAT LD CIT(A), IN LAST PARA AT PAGE 20 OF HER ORDER, WHILE DISCUSSING THE JUDGMENT OF J URISDICTIONAL HIGH COURT GIVEN IN THE CASE OF VISHNU TRADING & INVESTM ENT COMPANY, HERSELF HOLD THAT IN THE SAID CASE RAJASTHAN HIGH C OURT HELD THAT FOR TAXING CAPITAL GAIN REGISTRATION IS NOT COMPULSORY. IT IS RELEVANT HERE TO MENTION THAT THE HONBLE RAJASTHAN HIGH COURT LAID DOWN THE SAID PROPOSITION, RELYING ON THE JUDGMENT OF HONBLE SUP REME COURT GIVEN ITA NO. 429/JP/2013 SHRI SUBHASH CHANDRA SANGHAI VS. DY. DIT ((INTE RNATIONAL TAXATION) 14 IN THE CASE OF PODDAR CEMENT (SUPRA). UNDER THESE F ACTS AND CIRCUMSTANCES LD CIT(A) HAS FIRSTLY ERRED BY NOT FOLLOWING THE JUDGMENT OF JURISDICTIONAL HIGH COURT, WHEREIN, IT IS HELD THAT REGISTRATION IS NOT COMPULSORY FOR THE PURPOSE OF C APITAL GAIN TAX, WHEREAS, EVEN AFTER ADMITTING THE FINDING LD CIT(A) HAS HELD THAT REGISTRATION IS REQUIRED, SECONDLY THE SAID JUDGMENT HAS BEEN GIVEN RELYING THE SUPREME COURT JUDGMENT, THEREFORE, LD C IT(A) HAS FURTHER ERRED BY HOLDING THAT SAID SUPREME COURT JU DGMENT SAYS THAT REGISTRATION IS MANDATORY FOR THE MATTER UNDER INCO ME TAX ACT. IX. LD AO WHILE PASSING THE ASSESSMENT ORDER, RELIE D UPON THE JUDGMENT OF SUPREME COURT IN THE CASE OF PODDAR CEM ENT LTD. (SUPRA) (PARA 11 ON PAGE 09 OF THE ORDER OF AO) HELD THAT R EGISTRATION IS NECESSARY FOR CONSTITUTING THE TRANSFER, HOWEVER, W HILE GIVING REMAND REPORT, HE HIMSELF DISTINGUISHED THE SAID JUDGMENT AND SAID THAT IT IS ONLY APPLICABLE TO THE INCOME FROM HOUSE PROPERTY A ND NOT TO CAPITAL GAINS (PAGE 11 OF THE ORDER OF CIT(A)). FURTHER, IT IS SUBMITTED BY THE LD AO IN HIS REMAND REPORT THAT, THE REMAINING TWO CASES OF THE JURISDICTIONAL HIGH COUR T (SUPRA) ARE NOT APPLICABLE, SINCE THESE WERE GIVEN, RELYING ON THE SAID SUPREME COURT JUDGMENT IN THE CASE OF PODDAR CEMENT (SUPRA). HOW EVER, AS WE DISCUSSED, THESE TWO JUDGMENTS ARE RELATED TO CAPITAL GAINS. F URTHER, IN THE ASSESSMENT ORDER LD AO DISTINGUISHED THESE TWO JUDGMENTS BY OB SERVING THAT THESE ARE IN THE FAVOUR OF REVENUE, WHEREAS, ASSESSEE RELIED UPON THE PRINCIPLES LAID DOWN BY THESE JUDGMENTS. HONBLE JURISDICTIONAL HIGH COURT OF RAJASTHAN IN T HE CASE OF VISHNU TRADING & INVESTMENT CO, RELIED UPON ASSESSE E SQUARELY HELD THAT: THIS CONTROVERSY HAS BEEN RESOLVED BY THEIR LORDSHIPS IN THE CASE OF CIT VS. PODDAR CEMENT (P) ITA NO. 429/JP/2013 SHRI SUBHASH CHANDRA SANGHAI VS. DY. DIT ((INTE RNATIONAL TAXATION) 15 LTD. (SUPRA). 'WE ARE CONSCIOUS OF THE SETTLED POSI TION THAT UNDER THE COMMON LAW, 'OWNER' MEANS A PERSON WHO HAS GOT VALID TITLE LEGALLY CONVEYED TO HIM AFT ER COMPLYING WITH THE REQUIREMENTS OF LAW SUCH AS THE TRANSFER OF PROPERTY ACT, REGISTRATION ACT, ETC. BU T, IN THE CONTEXT OF S. 22 OF THE IT ACT, HAVING REGARD T O THE GROUND REALITIES AND FURTHER HAVING REGARD TO THE OBJECT OF THE IT ACT, NAMELY, 'TO TAX THE INCOME', WE ARE OF THE VIEW, 'OWNER' IS A PERSON WHO IS ENTITLE D TO RECEIVE INCOME FROM THE PROPERTY IN HIS OWN RIGHT.' - REJECTED ASSESSEES PLEA BY HOLDING (PARA 5) FOLLOWING THE VIEW TAKEN BY THEIR LORDSHIPS, WE AR E OF THE VIEW THAT FOR TAXING THE CAPITAL GAIN, REGISTRATION OF THE SALE DEED IS NOT NECESSARY UNDE R THE PROVISIONS OF THE IT ACT. IN THE RESULT, WE ANSWER THE QUESTION IN NEGATIVE I .E., IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESSEE. VII. CIT VS RAJASTHAN MIRROR MFG. CO. (RAJ) HONBLE RAJASTHAN HIGH COURT DECIDE THE ISSUE BY VARIOUS OBSERVATION, SOME OF THEM ARE:- - RELIED ON THE PRINCIPAL LAID DOWN BY HONBLE SUPREME COURT IN THE CASE OF PODDAR CEMENT (P) LTD. , REGARDING NON RELEVANCE OF REGISTRATION UNDER IT AC T (PARA 10) FOLLOWING THE LATEST VIEW OF THEIR LORDSHIPS IN TH E CASE OF CIT VS. PODAR CEMENT (P) LTD. &ORS. (SUPRA) , IN OUR VIEW BOTH THE AUTHORITIES HAVE COMMITTED ERR OR FOR THE PURPOSE OF TAXING INCOME UNDER THE SCHEME O F IT ACT, 1961. - OBSERVED IN PARA 10 THE OWNER IS A PERSON WHO IS ENTITLED TO RECEIVE INCOME FROM THE PROPERTY IN HIS OWN RIGHT, WHEN THE POSSESSION HAS BEEN HANDED OVER, AMOUNT HAS BEEN PAID, THOUGH THE DEED IS NOT REGISTERED. IN OUR VIEW, ITA NO. 429/JP/2013 SHRI SUBHASH CHANDRA SANGHAI VS. DY. DIT ((INTE RNATIONAL TAXATION) 16 IN SUCH CASES, TRANSFER IS COMPLETE FOR THE PURPOSE OF INCOME-TAX AND THE PROFIT OR GAIN OR INCOME SHOULD BE TAXED TREATING IT AS A TRANSFER . - REJECTED ASSESSEE PLEA (PARA 10) IN THE RESULT, WE ANSWER QUESTION NO. 1 IN NEGATIV E I.E., IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESSEE. B. UNDER THE FACTS AND CIRCUMSTANCES, THE CASE IS SQUARELY COVERED BY THE JUDGMENTS OF THE JURISDICTIONAL HIGH COURT AS WELL AS SUPREME COURT, THEREFORE, THE VERY BASIS OF CONCLUDING THAT THE TRANSFER HAPPENED IN A.Y. 2004-05 IS WRONG AND MISPLACED AND THEREFORE THE FINDING GIVEN BY LD AO & CIT (A) DESERVES TO BE DELETED. LD. COUNSEL FOR THE ASSESSEE CONTENDS THAT IN VIEW OF THESE FACTS, SUBMISSIONS AND CASE LAWS THE REASSESSMENTS IN QUESTION ARE BAD IN LAW AS THE RIGHT YEAR FOR REOPENING WAS AY 2002-03 WHEN THE TRANSFER IN T ERMS OF SEC. 2(47) WAS COMPLETED BY RECEIVING CONSIDERATION AND DELIVERING THE POSSESSION OF THE PROPERTY. AY 2004-05 CANNOT BE REOPENED ON AN UNTEN ABLE CONCEPT THAT TAXES WERE NOT PAID IN AY 2002-03. ON MERITS ALSO T HE IMPUGNED CAPITAL GAINS CANNOT BE TAXED IN AY 2004-05. 2.5 APROPOS ALTERNATIVE CONTENTIONS ON MERITS, IT I S PLEADED THAT FOR CALCULATION OF LONG TERM CAPITAL GAIN, LD AO HAS AD OPTED FAIR MARKET VALUE AS ON 01.01.1981 AS RS. 20,000/-, WHICH WAS BASED O N ESTIMATION. LD. AO NEITHER PROVIDED AN OPPORTUNITY TO APPELLANT, IN TH IS REGARD, NOR DID HE ITA NO. 429/JP/2013 SHRI SUBHASH CHANDRA SANGHAI VS. DY. DIT ((INTE RNATIONAL TAXATION) 17 OBTAINED REPORT FROM ANY AUTHENTICATE PERSON OR VAL UATION OFFICER. FURTHER, DURING THE APPELLATE PROCEEDINGS ALSO THIS ISSUE HA S BEEN RAISED BEFORE LD. CIT (A), WHICH WAS NOT CONSIDERED AND WAS ERRONEOUS LY CONCLUDED THAT APPELLANT HAS NOT DISPUTED THE INDEXED COST OF ACQU ISITION ADOPTED BY LD. AO. THUS, THE APPROACH ADOPTED BY LD. AO & LD. CIT( A) IS WRONG AND AGAINST THE PRINCIPAL OF NATURAL JUSTICE. LD CIT(A) CONSIDERED THAT THE TOTAL SALE CONSIDERATION WAS RS. 27,00,000/- I.E. APPELLA NTS SHARE WAS RS. 13,50,000/-, WHEREAS, THE TOTAL SALES CONSIDERATION WAS ONLY RS. 13,50,000/- I.E. APPELLANTS SHARE WAS RS. 6,75,000/- ONLY, WHI CH IS EVIDENT FROM THE SALE DEED. PERUSAL OF THIS SHOWS THAT LD. CIT(A) FAILED TO UNDERSTAND THE ISSUE AND PASSED ORDER IS HASTE. LD. AO COMPLETELY OVER LOOKED THE LAST TWO LINES OF PAGE NO. 09 OF THE SALE DEED, WHEREIN IT WAS CAT EGORICALLY STATED THAT THE STAMP REGISTRATION EXPENSES ARE BEING BORN BY ASSES SEE (JOINTLY BY SHRI PAWAN KUMAR & SHRI SUBHASH CHANDRA).THE INDIVIDUAL SHARE OF WHICH COMES OUT TO BE RS. 2,85,680/- [1/2 OF (RS. 247500/ - INCURRED ON STAMP EXPENSES PLUS RS. 13600/- INCURRED DUE TO SHORTAGE IN STAMP, AS CALCULATED BY SUB-REGISTRAR ON 20.08.2001 AT THE BACK SIDE OF PAGE NO. 1 OF SALE DEED PLUS RS. 310260/- INCURRED DUE TO SHORTAGE CALCULATED B Y DY. INSPECTOR GENERAL OF STAMPS,REFER BACK SIDE OF PAGE NO. 4 OF SALE DEED].THUS, THE LONG TERM CAPITAL GAIN CALCULATED BY LD. AO IS EXCESSIVE AND UNJUSTIFIED AND ITA NO. 429/JP/2013 SHRI SUBHASH CHANDRA SANGHAI VS. DY. DIT ((INTE RNATIONAL TAXATION) 18 FURTHER SHOWS THAT LD AO WAS BIASED WHILE FARMING T HE ASSESSMENT ORDER. FURTHER, LD. CIT(A) FAILED TO APPRECIATE THE WHOLE ISSUE AND MISAPPREHEND IT WITH THE PROVISIONS OF SECTION 50C. IT IS RELEVA NT TO MENTION HERE THAT THE STAMP REGISTRATION EXPENSES, BORNE BY THE APPELLANT S, ARE DEDUCTIBLE FROM THE FULL VALUE OF CONSIDERATION AS PER PROVISIONS OF SE CTION 48 OF THE ACT. UNDER SUCH FACTS AND CIRCUMSTANCES IT IS ABUNDANTLY CLEAR THAT CIT(A) FAILED TO APPRECIATE THE WHOLE ISSUE. IT IS CONTENDED BY LD. COUNSEL THAT THE CAPITAL GAINS MAY BE DELETED. 2.6 LD. DR SUPPORTED THE DETAILED ORDERS OF AUTHORI TIES BELOW. 2.7 WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PE RUSAL THE MATERIAL AVAILABLE ON RECORD. FOLLOWING FACTS ARE CLEARLY RE VEALED FROM THE RECORD: I. THE SALE DEED CLEARLY MENTIONS THAT THE SALE CONSID ERATION WAS RECEIVED BY ASSESSEE SELLERS AND POSSESSION OF THE IMPUGNED PROPERTY WAS HANDED OVER BY THE SELLERS TO THE BUYER ON 20.08.2001, I.E. ON THE DATE OF THE SIGNIN G OF THE SALE DEED. THE BUYER HAS ACKNOWLEDGED HAVING TAKEN OVER THE POSSESSION OF THE PROPERTY ON THE SAME DATE. II. IN THE REASONS AS RECORDED LD AO ADMITS THAT SA LE/PURCHASE TRANSACTION WAS COMPLETED ON 20.08.2001 I.E. RELEVA NT TO AY 2002-03. THE ISSUE ABOUT DATE OF TRANSFER OF OWNERS HIP IN A PROPERTY IS SETTLED BY HONBLE RAJASTHA HIGH COURT JUDGMENTS IN VISHNU TRADING AND M/S MIRROR TRADING (SUPRA) BY FOLLOWING ITA NO. 429/JP/2013 SHRI SUBHASH CHANDRA SANGHAI VS. DY. DIT ((INTE RNATIONAL TAXATION) 19 THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE O F PODDAR CEMENTS. IN TERMS OF DEFINITION OF TRANSFER PRESCRI BED BY I T ACT IN SEC. 2(47) AND RESPECFULLY FOLLOWING THESE J UDICIAL PRECEDENTS WE HAVE TO HOLD THAT THUS CORRECT YEAR O F TAXABILITY OF CAPITAL GAINS IS THE YEAR IN WHICH PART PERFORMA NCE OF CONTRACT IS COMPLETED BY RECEIVING THE CONSIDERATIO N AND DELIVERING THE POSSESSION OF THE PARTY. III. FROM THE FACTS AND CIRCUMSTANCES MENTIONED ABO VE THESE PARTS OF THE TRANSACTION ARE COMPLETED ON 20.08.200 1 AS MENTIONED IN REASONS RECORDED AS WELL AS IN BODY OF ASSESSMENT AND CIT(A) ORDER. IV. IN OUR CONSIDERED VIEW IT IS SETTLED PROPOSITIO N OF LAW THAT ANY INCOME IS TO BE TAXED IN THE RIGHT YEAR AND IN RIGHT HANDS BY LEGALLY PERMISSIBLE PROPOSITION AND NOT BASED ON SO ME ASSUMPTIONS WHICH ARE NOT IN CONFORMITY WITH SUCH PROPOSITIONS. V. ASSESSEES CANNOT BE TAXED ON IMPUGNED CAPITAL G AINS FORCIBLY IN AY 2004-05 ONLY BECAUSE IT WAS NOT TAXE D IN CORRECT YEAR I.E.AY 2002-03. THIS IS TOTALLY UNACCEPTABLE A PPROACH. VI WE FIND MERIT IN THE CONTENTION OF LD. COUNSEL T HAT PROCEEDINGS U/S 147 FOR AY 2004-05 CANNOT BE INITIA TED WHEN THE REASONS THEMSELVES INDICATE THE RIGHT YEAR FOR REOPENING WAS AY 2002-03. FOR AN INCOME WHICH HAS APPARENTLY ESCA PED ASSESSMENT IN AY 2002-23 NOTICE U/S 147 CANNOT BE I SSUED FOR ITA NO. 429/JP/2013 SHRI SUBHASH CHANDRA SANGHAI VS. DY. DIT ((INTE RNATIONAL TAXATION) 20 AY 2004-05. VARIOUS COURTS HAVE HELD THAT THE REASO NS RECORDED ARE FOUNDATION OF REOPENING PROCEEDINGS U/ S 147/148. IF THE REASONS ARE WRONGLY INVOKED THE CONSEQUENT REASSESSMENTS ARE BAD IN LAW. VII. IN THE GIVEN FACTS AND CIRCUMSTANCES WE HOLD THAT T HE REASONS RECORDED FOR AY 2004-05 SUFFER FROM A FUNDA MENTAL FLAW OF PROPOSING THE REOPENING OF WRONG YEAR AS TH E TEXT VIEWED IN THE PRISM OF LAW INDICATED ESCAPEMENT IF ANY IN AY 2002-03. THUS THE REASONS RECORDED ARE TREATED I N WRONG AND UNTENABLE MANNER AND HAVE NO LIVE NEXUS WITH TH E REASONS EXISTING FOR AY 2004-05. ON THIS SCORE THE REASONS ARE HELD TO BE BAD IN LAW CONSEQUENTLY THE REASSESS MENT IS ALSO BAD IN LAW. VIII. ON MERITS ALSO THE FACTS ON RECORD CLEARLY DEMONSTR ATE THAT CONSIDERATION OF SALE OF IMPUGNED PROPERTY IS RECEIVED BY SELLERS AND POSSESSION THEREOF IS DELIVERED TO B UYERS IN AY 2002-03, MERELY REGISTRATION WAS DELAYED. RESPEC TFULLY RELYING ON HONBLE RAJASTHA HIGH COURT JUDGMENTS IN VISHNU TRADING AND M/S MIRROR TRADING (SUPRA) WHICH FOLLOWED HONBLE SUPREME COURT JUDGMENT IN THE CASE OF PODDAR CEMENTS WE HAVE TO HOLD THAT IMPUGNED CAPITA L GAINS ARE NOT TAXABLE IN AY 2004-05. THE ADDITION O F LTCG IN AY 2004-05 IS DELETED. ITA NO. 429/JP/2013 SHRI SUBHASH CHANDRA SANGHAI VS. DY. DIT ((INTE RNATIONAL TAXATION) 21 3.0 IN THE RESULT THE APPEALS FILED BY BOTH THE ASS ESSES ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 /11/ 2015. SD/- SD/- FOE FLAG ;KNO VKJ-IH-RKSYKUH (VIKRAM SINGH YADAV) (R.P.TOLANI) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 30 /11/ 2015 *MISHRA VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI PAWAN KUMAR SANGHAI AND SHRI SUBHASH CHANDRA SANGHAI 2. IZR;FKHZ@ THE RESPONDENT- THE DY. DIT (INTERNATIONAL TAXATI ON) 3. VK;DJ VK;QDRVIHY ) @ CIT(A) 4. VK;DJ VK;QDR@ CIT 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO.429 & 430/JP/20113) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR