ITO, New Delhi V. Sh. Chander Shekhar, Noida

ITA 430/DEL/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3032 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 4 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-06-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 30-05-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 23-01-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ANIL KR SHARMA
• Assessee Lawyers: RAJAN GUPTA
• Section: 143(3); 142(1)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH 'B, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER ITA NO. 430/DEL/2013 A.Y. 2009-10 INCOME TAX OFFICER, VS. SH. CHANDER SHEKHAR, WARD 34(2), NEW DELHI C-166, SECTOR-51, NOIDA, ROOM NO. 318, BLOCK-D, U.P. 201 301 VIKAS BHAWAN, I.P. ESTATE, (PAN: AMHPS9399B) NEW DELHI 110 002 (APPELLANT) (RESPONDENT) DEPARTMENT BY : SH. ANIL KR. SHARMA, SR. DR ASSESSEE BY : SH. RAJAN GUPTA CA ORDER PER H.S. SIDHU, JM : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-XXVII, NEW DEL HI DATED 06.11.2012 PERTAINING TO ASSESSMENT YEAR 2009-10 ON THE FOLLOWING GROUNDS:- 01. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE ORDER OF THE LD. CIT(A) IS BAD IN LAW AND NOT IN CONSONANCE WITH THE FACTS OF THE CASE. 2 2. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DIRECTING THE A.O . U/S 50 C ON THE GROUND THAT LEASE HOLD RIGHT HOLD RIGHT ARE NOT COVERED UNDER THE PURVIEW OF THIS SECTION. 3. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IGNORED THE FACT THAT TRANSFER OF THE PROPERTY TOOK PLACE IN THE YEAR UNDER CONSIDERATION ON 01.10.2008. 4. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) IGNORED THE FACT THAT DURING TH E COURSE OF ASSESSMENT PROCEEDINGS, THE APPELLANT FAI LED TO FILE ANY DETAIL OF THE PURCHASE OF THE PROPERTY. ' 5. THE LD. CIT (A) FAILED TO APPRECIATED THE FACT T HAT IT IS THE OWNER OF THE PROPERTY WHO CAN SELL THE SA ME. BEFORE BECOMING THE OWNER OF A PROPERTY, THE SAME CANNOT BE SOLD. 'THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND ANY /ALL THE GROUNDS OF APPEAL BEFORE OR DURING THE COU RSE OF HEARING OF THE APPEAL.' 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE HAD FILED HIS RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR 2008-09 ON 22.1.2010 DECLARING INCOME OF RS. 1,40,670/-. SUBSEQUENTLY, T HE CASE OF THE 3 ASSESSEE WAS TAKEN UP FOR SCRUTINY ASSESSMENT. NOT ICE U/S. 143(2) OF THE I.T. ACT, 1961 WAS ISSUED ON 29.9.2010. SUBSEQUENTL Y, NOTICE U/S. 142(1) ALONGWITH QUESTIONNAIRE ISSUED ON 21.1.2011, FOLLOW ED BY ANOTHER QUESTIONNAIRE DATED 04.3.2011. IN RESPONSE TO THE N OTICES ISSUED, ASSESSEES A.R. ATTENDED THE PROCEEDINGS FROM TIME TO TIME. THE ASSESSEE IS ENGAGED IN RETAIL TRADING AND HAS DECLA RED HIS INCOME U/S. 44AF AT RS. 1,78,308/- ON THE TOTAL TURNOVER OF RS. 9,90,600/-. IN THIS CASE AN INFORMATION WITH REGARD TO SALE OF PROPERTY FOR CONSIDERATION OF RS. 99,20,000/- ON 1.10.2008 WAS RECEIVED BY AO. D URING THE COURSE OF ASSESSMENT, THE ASSESSEE WAS ASKED TO EXPLAIN THE S OURCE OF INVESTMENT OF THE ABOVE-SAID SUM IN THE PROPERTY AND ACCORDING LY ASSESSEE SUBMITTED ITS REPLY. AFTER CONSIDERING THE RELY OF THE ASSES SEE, THE AO OBSERVED THAT FULL OF CONSIDERATION AS ADOPTED BY THE STAMP VALUA TION AUTHORITY IS TAKEN AS LONG TERM CAPITAL GAIN, AND THE TOTAL SALE PRICE I.E. RS. 99,20,000/- WAS ADDED BACK TO THE TOTAL INCOME OF T HE ASSESSEE AND AO ASSESSED THE INCOME OF THE ASSESSEE AT RS. 1,00,60, 670/- VIDE ORDER DATED 29.12.2011 PASSED U/S. 143(3) OF THE I.T. A CT, 1961. AGGRIEVED BY THE ASSESSMENT ORDER DATED 29.12.2011, THE ASSESSE E APPEALED BEFORE THE LD. CIT(A), WHO VIDE HIS IMPUGNED ORDER DATED 0 6.11.2012 HAS DELETED THE ADDITION AND ALLOWED THE APPEAL OF THE ASSESSEE. 3. AGGRIEVED WITH THE IMPUGNED ORDER OF THE LD. CI T(A), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 4 4. LD. DR RELIED UPON THE ORDER OF THE AO AND REIT ERATED THE CONTENTIONS RAISED IN THE GROUNDS OF APPEAL. 5. ON THE CONTRARY, LD. A.R. OF THE ASSESSEE RELIE D UPON THE ORDER OF THE LD. CIT(A). 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORDS, ESPECIALLY THE ORDER OF THE LD. CIT(A). WE FIND THAT LD. FIRST APPELLATE AUTHORITY HAS ELABORATELY DISCUSSED AND ADJUDICATED THE ISSUE IN DISPUTE VIDE PARA NO. 9 AT PAGE NO. 6 TO 7 OF THE IMPUGNED ORDER. THE SAID RELEVANT FINDINGS OF THE LD. CIT(A) ARE REPRODUCED AS UNDER:- I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE APPELLANT, THE OBSERVATIONS MADE BY THE A.O. IN THE ASSESSMENT ORDER AND THE FACTS OF THE CASE. THE APPELLANT WAS ALLOTTED A RESIDENTIAL PLOT ON 19.01. 2004 IN SECTOR-105, NOIDA THROUGH LOTTERY ON PAYMENT OF ALLOTMENT MONEY OF RS. 1,30,000/-. THE TOTAL PURCHA SE PRICE OF THE PLOT WAS RS. 16,75,000/-. THE APPELLAN T ON 28.02.2004 ENTERED INTO AN AGREEMENT TO SELL IN RES PECT OF THIS PLOT WITH MIS ROSEBUD CONSTRUCTION PVT. LTD THROUGH ITS DIRECTOR SH. RAJEEV SHARMA. THE APPELLA NT RECEIVED AN AMOUNT OF RS. 1,30,000/- FROM THE COMPANY IN LIEU OF AGREEING TO SELL THIS PLOT TO TH E COMPANY. THE BALANCE AMOUNT TO BE PAID FOR THE ACQUISITION OF THE PLOT I.E. RS. 15,45,000/- WAS AG REED TO BE PAID BY THE COMPANY DIRECTLY TO THE NOIDA AUTHORITY. LATER ON, SH. SANJAY KUMAR, THE GPA HOLD ER OF THE APPELLANT ENTERED INTO THE SALE DEED (TRANS FER OF LEASE HOLD RIGHTS IN RESPECT OF THE PROPERTY IN THE NAME 5 OF THE COMPANY). THUS, AS FAR AS THE APPELLANT WAS CONCERNED HE HAD TRANSFERRED ALL HIS RIGHTS IN THE PROPERTY ON 28.2.2004 BY SIGNING AN AGREEMENT TO SE LL AND RECEIVING THE PAYMENT OF RS.1,30,000/- FROM THE COMPANY M/S ROSEBUD CONSTRUCTION PVT. LTD AND BY APPOINTING SH. SANJAY KUMAR KNOWN TO THE COMPANY AS HIS GPA. SALE OF PROPERTY THROUGH OPA WAS A PREVALE NT PRACTICE TILL 2011 WHEN IT WAS SPECIFICALLY BANNED BY THE HON'BLE SUPREME COURT. THE FACT THAT SH. SANJAY KUM AR ULTIMATELY TRANSFERRED THE LEASE HOLD RIGHTS THROUG H TRANSFER DEED DATED 01.10.2008 IN THE NAME OF THE COMPANY FURTHER SUPPORTS THE APPELLANT'S CONTENTION THAT HE HAD SOLD ALL HIS RIGHTS IN THE PROPERTY ON 28.04.2004 BY APPOINTING SH. SANJAY KUMAR AS HIS OP A ACCORDING TO WHICH THE GPA APPOINTED BY THE APPELLA NT ON 28.02.2004 CONTINUED TO BE VALID AND WAS NOT REVOKED TILL 01.10.2008. ON THAT DATE IT WAS THE OP A, SH. SANJAY KUMAR WHO SIGNED THE DEED OF TRANSFER OF LEASE HOLD RIGHTS IN FAVOUR OF THE COMPANY M/S ROSE BUD CONSTRUCTION PVT. LTD. AND NOT THE APPELLANT. THE APPELLANT'S NAME IN THE DEED OF TRANSFER OF LEASE H OLD RIGHTS WAS MENTIONED ONLY BECAUSE THE ORIGINAL ALLOTMENT WAS IN HIS NAME. THEREFORE, AS FAR AS THE APPELLANT IS CONCERNED, HE DID NOT HAVE OWNERSHIP O F THE SAID PROPERTY DURING THE YEAR UNDER CONSIDERATION A ND THEREFORE, THERE IS NO QUESTION OF ANY TRANSACTION OF SALE OF THE SAID PROPERTY DURING THE YEAR UNDER CONSIDERATION. THEREFORE, THERE WAS NO QUESTION OF ANY CAPITAL GAINS IN THE APPELLANT'S 'HANDS. THE ADDITI ON OF RS. 99,20,000/- MADE BY THE A.O. ON THIS ACCOUNT IS THEREFORE, DELETED. 6 7. ON GOING THROUGH THE AFORESAID FINDINGS OF THE LD.CIT(A), WE FIND THAT THE ASSESSEE WAS ALLOTTED A RESIDENTIAL PLOT O N 19.01.2004 IN SECTOR-105, NOIDA THROUGH LOTTERY ON PAYMENT OF ALL OTMENT MONEY OF RS.1,30,000/-. THE TOTAL PURCHASE PRICE OF THE PLOT WAS RS. 16,75,000/-. THE ASSESSEE ON 28.02.2004 ENTERED INTO AN AGREEMEN T TO SELL IN RESPECT OF THIS PLOT WITH M/S ROSEBUD CONSTRUCTION PVT. LTD THROUGH ITS DIRECTOR SH. RAJEEV SHARMA. THE ASSESSEE RECEIVED AN AMOUNT OF RS. 1,30,000/- FROM THE COMPANY IN LIEU OF AGREEING TO SELL THIS P LOT TO THE COMPANY. THE BALANCE AMOUNT TO BE PAID FOR THE ACQUISITION OF TH E PLOT I.E. RS. 15,45,000/- WAS AGREED TO BE PAID BY THE COMPA NY DIRECTLY TO THE NOIDA AUTHORITY. THE AO HAS HELD THAT THE TRANSFER OF PROPERTY TOOK PLACE IN THE YEAR UNDER CONSIDERATION ON 01.10.2008 AND FURTHER NO DETAIL OF THE PURCHASE PRICE OF THE PROPERTY WAS FILED BY THE ASSESSEE, HENCE, THE AO ADOPTED THE WHOLE VALUE OF STAMP VALUATION A UTHORITY VALUE AT RS. 99,20,000/- AS THE CAPITAL GAINS RESULTING FROM THE TRANSFER OF THE PROPERTY. HOWEVER, THE LD. CIT(A) HAS OBSERVED THA T THE ASSESSEES NAME IN THE DEED OF TRANSFER OF LEASE HOLD RIGHTS W AS MENTIONED ONLY BECAUSE THE ORIGINAL ALLOTMENT WAS IN HIS NAME, HEN CE, THE ASSESSEE DID NOT HAVE OWNERSHIP OF THE SAID PROPERTY DURING THE YEAR UNDER CONSIDERATION AND THEREFORE, THERE IS NO QUESTION O F TRANSACTION OF SALE OF THE SAID PROPERTY DURING THE YEAR UNDER CONSIDERATI ON AND CAPITAL GAINS IS NOT ACCRUED. HOWEVER, IN OUR CONSIDERED VIEW, THE CAPITAL GAINS SHOULD BE TAKEN INTO ACCOUNT ONLY AFTER DEDUCTED THE PRIC E OF THE PLOT FROM THE VALUE OF THE PROPERTY I.E. RS. 99,20,000 (-) MINUS RS. 16,75,000/- I.E. THE 7 COST OF THE PLOT (TO BE PAID TO THE NOIDA AUTHORI TY) = RS. 82,45,000/-. ACCORDINGLY, WE SET ASIDE THE ISSUE IN DISPUTE TO T HE FILE OF THE AO WITH THE DIRECTION TO COMPUTE THE CAPITAL GAINS ON THE DIFFE RENCE OF THE STAMP DUTY AMOUNT AND PRICE OF THE IMPUGNED PROPERTY AFTER AP PLYING THE RELEVANT PROVISIONS OF THE ACT. ACCORDINGLY, THE ORDER OF TH E LD. CIT(A) IS REVERSED. 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 05/06/2017. SD/- SD/- (O.P. KANT) (H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 05/06/2017 'SRBHATNAGAR' COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES