The Income Tax Officer, Amritsar. V. Sh. Suman Aggarwal ,C/o M/s Jagan Nath Janki, Amritsar.

ITA 444/ASR/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9604 (ITAT-AMRITSAR)
• Duration Of Justice: 2 year(s) 1 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 26-07-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 04-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. A.D. JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER ITA NO.444(ASR)/2014 ASSESSMENT YEAR:2005-06 PAN: AARPA1618D INCOME TAX OFFICER, VS. SHRI SUMAN AGGARWAL, WARD 2(2), C/O M/S. JAGAN NATH JANKI DASS, AMRITSAR. BAZAR GUJRAN, MAJITH MANDI, AMRITSAR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH.RAHUL DHAWAN, DR RESPONDENT BY: SH. ASHWANI KALIA, CA DATE OF HEARING: 26/07/2016 DATE OF PRONOUNCEMENT: 26/08/2016 ORDER PER A.D. JAIN, JM: THIS IS THE DEPARTMENTS APPEAL FOR THE ASSESSMENT YEAR 2005-06, AGAINST THE ORDER, DATED 12.05.2014, PASSED BY THE LD. CIT(A), AMRITSAR, CONTENDING THAT THE LD. CIT(A) HAS ERRED IN DELETI NG THE ADDITION MADE ON ACCOUNT OF CAPITAL GAIN OF RS.1,47,80,892/- BY INVO KING THE PROVISION OF SECTION 50C OF THE INCOME TAX ACT, 1961, ON PROTECT IVE BASIS. 2. THE COMPLETED ASSESSMENT OF THE ASSESSEE WAS REO PENED BY RECORDING REASONS ON THE BASIS OF THE FOLLOWING INF ORMATION RECEIVED FROM ACIT, HARIDWAR: REASONS FOR REOPENING THE CASE WAS THAT INFORMATIO N WAS RECEIVED FROM THE ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE, HARIDWAR VIDE HIS OFFICE LETTER F. NO. ACIT/CIT/HDR/PASSING OF ITA NO.444(ASR)/2014 A.Y. 2005-06 2 INFORMATION/2009-10/2089 DATED 18.01.2010 SENDING T HERE UNDER COPY OF SALE DEED REGISTERED WITH SUB REGISTR AR, HARIDWAR THAT SHRI SUMAN KUMAR S/O SHRI DHARAM PAL, RESIDENT OF 838/7, BAZAR LACHMANSAR, AMRITSAR, SOLD LAND MEASURING 72 ,292/- SQ. FEET (6718.58 SQ. METER SITUATED WITHIN MUNICIPAL LIMITS, HARIDWAR ON THE BASIS OF GENERAL POWER OF ATTORNEY GIVEN BY SH. ASHUTOSH SHARMA AND ATHARAV SHARMA SONS OF LATE SHRI BHUSHA N SHARMA, VILLAGE LANDOWAL, TEHSIL AND DISTRICT LUDHIANA, ON 30.04.2004 FOR RS.30,00,000/- TO M/S. S.R.TRADERS THROUGH ITS PART NER SHRI SANJEEV AGGARWAL AS AGAINST VALUE DETERMINED BY THE STAMP V ALUATION AUTHORITY AT RS.1,47,80,892/- AS PER SALE DEED EXEC UTED ON 30.04.2004. THE VALUE SO ADOPTED FOR THE PURPOSE OF PAYMENT OF STAMP DUTY THEREFORE, SHALL FOR THE PURPOSE OF SECT ION 48 BE DEEMED TO BE THE FULL VALUE OF CONSIDERATION RECEIVED AS A RESULT OF SUCH TRANSFER AS PROVIDED U/S 50C OF THE INCOME TAX ACT, 1961. THE LAND IN QUESTION HAS BEEN SOLD BY THE ASSESSEE ON THE BA SIS OF POWER OF ATTORNEY AND AS SUCH THE COST PRICE TO THE ASSESSEE IN THIS CASE IS NIL AND THE ENTIRE AMOUNT OF RS.1,47,80,892/- IS CH ARGEABLE TO CAPITAL GAIN TAX . 3. IN THE ASSESSMENT PROCEEDINGS, THE ASSESSMENT HA D BEEN COMPLETED ON PROTECTIVE BASIS. IN THE ASSESSMENT P ROCEEDINGS, THE ASSESSEE DENIED OWNERSHIP OF THE LAND IN DISPUTE AN D HAS STATED THAT THE LAND HAD BEEN PURCHASED BY LATE SH. BHARAT BHUSHAN AND SH. ATHARAV SHARMA; AND THAT HE THE ASSESSEE, WAS POWER OF ATTO RNEY HOLDER IN RESPECT OF LEGAL HEIR OF SH. BHUSHAN SHARMA. AGAINS T THE PROTECTIVE ADDITION MADE, THE ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A), CONTENDING THAT HE WAS ONLY POWER OF ATTORNEY HOLDER AND SOLD LAND ON BEHALF OF SH. ASHUTHOSH SHARMA AND SH. ATHARAV SHARMA. HE ALSO CH ALLENGED THE APPLICATION UNDER SECTION 50C OF THE ACT, TAKING C OST OF ACQUISITION AT NIL AND MAKING PROTECTIVE ASSESSMENT BEFORE SUBSTANTIVE ASSESSMENT IN THE HANDS OF THE ACTUAL OWNERS. HE ALSO FILED A CERTIF IED COPY OF KHATONI OF THE CONCERNED LAND. THIS KHATONI SHOWED VARIOUS LIT IGATIONS OF VARIOUS ITA NO.444(ASR)/2014 A.Y. 2005-06 3 CLAIMS OVER THE LAND. THE LAND WAS AT THAT TIME SH OWN IN THE NAME AOF SH. HEMCHAND S/O SH. KUNDAN AND SH. SHUBASH SINGH S/O SH. AMIR SINGH. IN A WRIT PETITION FILED BEFORE THE HONBLE UTTRANCHAL PRADESH HIGH COURT, BY THE OWNERS SH. SHUBASH SINGH AND SH. HEMC HAND AGAINST SH. ASHUTOSH SHARMA AND ATHARAV SHARMA AND OTHERS AGAIN ST THE ORDER OF SDM, HARIDWAR, PASSED ON 25.07.2005, REGARDING ADMI SSION OF SH. ASHUTOSH SHARMA, SH. ATHARAV SHARMA, AND IN ANOTHER APPLICATION FILED BEFORE THE HONBLE HIGH COURT OF UTTRANCHAL PRADESH , IN A CONTEMPT APPLICATION BY THE SAME PARTIES AND AGAINST THE SA ME RESPONDENTS, IT WAS FOUND TO HAVE BEEN CLEARLY MENTIONED THAT THERE WERE SEVERAL CLAIMANTS TO THE LEGAL OWNERSHIP OF THE LAND IN QU ESTION, I.E., THE LEGAL HEIR OF RAMANAND, SH. BHUSHAN SHARMA AND SH. DINES H MEHTA. THE LD. CIT(A) FOUND THESE CLAIMS TO HAVE STARTED IN 1956 AND IT WAS OBSERVED THAT THERE WERE LARGE NUMBER OF CLAIMS PENDING IN D IFFERENT COURTS; THAT THE ISSUE HAD BEEN RAISED BY THE ASSESSEE IN VIEW O F THE SALE OF THE LAND VIDE REGISTRATION DEED DATED 30.03.2004 BY SH. ASHU TOSH SHARMA AND SH. ATHARAV SHARMA THROUGH THE ASSESSEE, WHO WAS T HEIR POWER OF ATTORNEY HOLDER TO S.R. TRADERS THROUGH PARTNER, SH. SANJEEV AGGARWAL FOR RS.30,00,000/-. THE ACIT, HARIDWAR WAS FOUND TO HAVE INFORMED THAT CIRCLE RATE WAS OF RS.1,47,80,892/- AS ABOVE, AND T HAT AS SUCH, THE PRICE SHOULD HAVE BEEN SHOWN ON THIS AMOUNT, IN ACCORDANC E WITH THE PROVISIONS OF SECTION 50C OF THE ACT. IT WAS OBSERV ED THAT IN THE REGISTRATION DEED, ALSO, THE ASSESSEE HAD BEEN SHOW N ONLY AS POWER OF ITA NO.444(ASR)/2014 A.Y. 2005-06 4 ATTORNEY HOLDER OF SH. BHUSHAN SHARMA, AS OWNER. TH E GENERAL POWER OF ATTORNEY IN FAVOUR OF THE ASSESSEE WAS FOUND TO HA VE BEEN EXECUTED BY SH. ASHUTOSH SHARMA AND SH. ATHARAV SHARMA. IN THIS REGARD, TITLE DEED DATED 03.07.1964 FOR PURCHASE OF THE PROPERTY HAD B EEN SUBMITTED BY THE ASSESSEE. MUTATION DATED 09.07.1984 IN THE NAM E OF SH. BHARAT BHUSHAN, ORDER DATED 10.04.1987 PASSED BY THE SDM, HARIDWAR AND DECREE DATED 18.05.1987, OBSERVING THE LAND BELONG TO SH. BHUSHAN SHARMA AND HOLDING THE MUTATION IN FAVOUR OF SH. RA MANAND, SH. AMIR SINGH AND SH. KUNDAN SINGH TO BE CANCELLED, WERE AL SO PERUSED BY THE LD. CIT(A). THE POWER OF ATTORNEY DATED 14.02.1991 WAS ALSO GONE INTO. IN THIS REGARD, THE LD. CIT(A) HAD ACCEPTED THE ASS ESSEES CONTENTIONS THAT THE POWER OF ATTORNEY IN HIS FAVOUR HAD BEEN EXECU TED BY SH. BHUSHAN SHARMA, AS SH. BHUSHAN SHARMA HAD PLANNED TO SHIFT FROM HARIDWAR TO LUDHIANA; THAT THE LAND IN QUESTION WAS FIERCELY DI SPUTED LAND, ON WHICH TWO OTHER PARTIES HAD ALSO BEEN CLAIMING TOTAL/OWNE RSHIP AND NUMEROUS CASES, CIVIL AND CRIMINAL WERE PENDING IN DIFFERENT COURTS, WHICH HAD BEEN DESIRED TO LOOK AFTER AND FOLLOWED UP BY THE ASSESSEE; THAT AFTER THE DEATH OF BHUSHAN SHARMA ON 15.11.2001, THE LAND HAD BEEN INHERITED BY SH. ASHUTOSH SHARMA AND SH. ATHARAV SHARMA; THAT HOWEVER, THE LAND COULD NOT BE REGISTERED IN THEIR NAMES DUE T O PENDENCY OF THE SAID NUMEROUS DISPUTES IN VARIOUS COURTS. THE LD. CIT(A) ALSO DULY TOOK INTO CONSIDERATION THE AFFIDAVIT FILED BY SH. ASHUTOSH S HARMA AND SH. ATHARAV SHARMA REGARDING OWNERSHIP OF THE LAND BY T HEIR FATHER AND THE ITA NO.444(ASR)/2014 A.Y. 2005-06 5 INHERITANCE OF THE LAND BY THEM ON THE DEMISE OF TH EIR FATHER. THE POWER OF ATTORNEY EXECUTED IN FAVOUR OF THE ASSESSEE BY SH. ASHUTOSH SHARMA AND SH. ATHARAV SHARMA WAS ALSO CONSIDERED. 4. THE LD. CIT(A) FOUND AS FOLLOWS: THUS, IT CAN BE SEEN FROM ABOVE COURT CASES AND AF FIDAVIT THAT LAND IS A DISPUTED PROPERTY AT VILLAGE SHAKUPURA, KANKHA L, SUB DIVISION JAWALAPUR, HARIDWAR AND VARIOUS COURT PROCEEDINGS REGARDING OWNERSHIP OF ABOVE LAND IS GOING ON AT PRESENT. IT IS CLEAR FROM THESE RECORDS THAT ASSESSEE IS NOT THE OWNER OF ABOVE LAN D AND THE AO HAS NOT BROUGHT ON RECORD ANY MATERIAL OR EVIDENCE TO PROVE THAT ASSESSEE WAS OWNER OR EVEN THE CLAIMANT OF OWNERSHI P FOR ABOVE LAND. THE AO HAS NOT CONTROVERTED AFFIDAVIT FILED B Y SH. ASHUTOSH SHARMA AND ATHARAV SHARMA REGARDING OWNERSHIP OF LA ND OF HIS FATHER AND LEGAL INHERITANCE OF IT. IN VIEW OF THE ABOVE AND IN VIEW OF THESE DISPUTES GOING ON IN VARIOUS COURTS, OWNERSHI P OF LAND CANNOT BE ASCERTAINED AT PRESENT. FURTHER, LAND PRICE ALSO CANNOT BE DECIDED ON BASIS OF CIRCLE RATE AS CIRCLE RATE IS NORMALLY PRICE OF UNDISPUTED, ENCUMBERANCE FREE PROPERTY. HOWEVER, IN VIEW OF SAL E DEED EXECUTED BY SH. ATHARAV SHARMA AND SH. ASHUTOSH SHARMA THROU GH POWER OF ATTORNEY OF THE ASSESSEE, LAND SHOULD BE TAXED IN T HE HAND OF LEGAL HEIR OF SH. BHUSHAN SHARMA, I.E., SH. ATHRAV SHARMA AND SH. ASHUTOSH SHARMA. IN VIEW OF ABOVE, TAXATION OF CAPI TAL GAIN IN THE HAND OF ASSESSEE IS NOT CORRECT AND HENCE DELETED. AS GROUND NUMBER ONE HAS BEEN DECIDED IN FAVOUR OF THE ASSESS EE, GROUND NUMBER TWO TO SIX HAVE BECOME INFRUCTUOUS AND ACADE MIC. 5. HAVING CONSIDERED THE ENTIRE CONSPECTUS OF THE M ATTER, WE DO NOT FIND ANY ERROR WHATSOEVER IN THE ORDER UNDER APPEAL , AS CORRECTLY OBSERVED BY THE LD. CIT(A) AND NOT SUCCESSFULLY DIS PUTED BEFORE US, THE LAND IN QUESTION IS A DISPUTED PROPERTY HAVING COM E UNDER NUMEROUS LITIGATIONS IN DIFFERENT COURTS PERTAINING TO ITS O WNERSHIP. THE ASSESSEE, IT IS OBSERVED, AS RIGHTLY HELD BY THE LD. CIT(A), IS NOT THE OWNER OF THE LAND. TOO, HE DOES NOT EVEN CLAIM THE OWNERSHIP THE REOF. HITHERTO, THE OWNERSHIP OF THE LAND IS UNASCERTAINABLE. THE PRICE OF THE LAND ALSO ITA NO.444(ASR)/2014 A.Y. 2005-06 6 CANNOT BE DECIDED ON THE BASIS OF CIRCLE RATE, IN V IEW OF THE VARIOUS DISPUTES GOING ON. IT IS TRITE THAT THE CIRCLE RATE IS NORMALLY APPLICABLE TO UNDISPUTED, UNENCUMBRANCE PROPERTY. THE LD. CIT(A) HAS ALSO CORRECTLY HELD THAT THE LAND OUGHT TO BE TAXED IN THE HANDS OF THE LEGAL HEIRS OF SH. BHUSHAN SHARMA AND NOT IN THE HANDS OF THE ASSE SSEE, AS THE SALE DEED WITH REGARD TO THE LAND WAS EXECUTED BY SH. AS HUTOSH SHARMA AND SH. ATHARAV SHARMA, LEGAL HEIRS OF LATE SH. BHUSHAN SHARMA, THEIR FATHER, THROUGH THE ASSESSEE, WHO IS THE POWER OF A TTORNEY HOLDER ONLY. THE ASSESSEE BEING A POWER OF ATTORNEY, HE CANNOT I N ANY MANNER BE SAID TO BE THE OWNER OF THE LAND. 6. THE LD. DR HAS SOUGHT TO PLACE RELIANCE ON THE F OLLOWING DECISIONS: I) BHAGMALO SAUDAGAR MAL VS. CIT, 267 ITR 637 (A LL) II) LALJI HARIDAS VS. ITO, 43 ITR 387 (SC) 7. HOWEVER, AS RIGHTLY CONTENDED ON BEHALF OF THE A SSESSEE, THESE DECISIONS ARE RELEVANT ONLY IN CASES OF DOUBT, AS T O, TO WHICH PRESENT INCOME BELONGS. IN THE PRESENT CASE, THIS IS NOT SO , AS OBSERVED, IT IS THE LEGAL HEIRS OF LATE SH. BHUSHAN SHARMA, IN WHOSE HA NDS, THE LAND OUGHT TO BE TAXED, I.E. SH. ASHUTOSH SHARMA AND SH. ATHAR AV SHARMA. THE OBSERVATION OF THE LD. CIT(A) TO THIS EFFECT, HAVE NOT BEEN SUCCESSFULLY REBUTTED BY THE DEPARTMENT. IN THIS REGARD, IN THE CERTIFIED COPY (APB 89-104) OF THE WRITTEN REPLY FILED BY THE RESPONDEN T NOS. 3 & 4 IN SUIT NO. 318/2004 IN THE COURT OF CIVIL JUDGE (J.D.) HAR IDWAR, TITLED DINESH ITA NO.444(ASR)/2014 A.Y. 2005-06 7 KUMAR MEHTA VS. SANJEEV AGGARWAL, IN PARA 10 THERE OF, IT HAS BEEN SUBMITTED AS FOLLOWS: 10. THAT THIS SUBMISSION OF THE PLAINTIFFS IS ALSO INCORRECT THAT THE RESPONDENT/DEFENDANTS ARE DISPUTE CREATING PERSONS OF ANY MANNER AND THEY MISREPRESENTED THE SON OF B HUSHAN SHARMA BEFORE YOURSELF RATHER THE RESPONDENTS/DEF ENDANTS ARE THE SONS OF BHUSHAN SHARMA IN REALITY AND AS TH E LEGAL HEIRS, BHUSHAN SHARMA HAS APPOINTED THE DEFENDANT N O.2 AS THE GENERAL POWER OF ATTORNEY HOLDER AND THE DEFEND ANT NO.2 HAVING CAPACITY OF THE GENERAL POWER OF ATTORNEY HO LDER, HAS HELD RIGHTS IN FAVOUR OF THE DEFENDANT NO.1 AND OTH ER PERSONS HAD EXECUTED THE SALE DEED AND THE RESPONDENTS/DEFENDANTS HAD OBTAINED CONSIDERATION S HOWN IN SALE DEED OF DAT3 30.04.2004 FROM THE DEFENDANT NUMBER 2, REST OF THE SUBMISSIONS OF THE PLAINTIFFS ARE IN CORRECT. 8. THUS, RELIANCE BY THE LD. DR ON THE AFORESAID TW O DECISIONS, IN OUR CONSIDERED OPINION, IS OF NO AID TO THE CAUSE OF TH E DEPARTMENT. 9. IN VIEW OF THE ABOVE, FINDING NO ERROR WHATSOEVE R IN THE ORDER OF THE LD. CIT(A), THE SAME IS HEREBY AFFIRMED. THE GRIEV ANCE SOUGHT TO BE RAISED BY THE DEPARTMENT BEING FOUND SHORN OF MERI TS, IS REJECTED. 10. IN THE RESULT, THE APPEAL OF THE DEPARTMENT IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 26/08/ 2 016. SD/- SD/- (T.S. KAPOOR) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER /SKR/ DATED: 26/08/2016 COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:SH. SUMAN AGGARWAL, AMRITSAR 2. THE ITO WARD 2(2), ASR. 3. THE CIT(A), ASR 4. THE CIT, ASR 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER