The I.T.O. 2(1), Indore V. Shri Sundardas Jethwani, Indore

ITA 486/IND/2013

• Counselvise Citation: 48622714 RSA 2013
• Duration Of Justice: 2 year(s) 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-08-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 17-06-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: G S GAUTAM
• Section: 54F; 6; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, J.M. AND SHRI B.C.MEENA, A.M. I.T.A.NO.486/IND/2013 A.Y. : 2008-09 ITO, SHRI SUNDARDAS JETHWANI, 2(1), VS C/O NEW KANGAN STORES, INDORE. APPELLANT INDORE. RESPONDENT P.A.N. NO ABSPJ0017B APPELLANT BY SHRI G.S.GAUTAM, DR RESPONDENT BY NONE DATE OF HEARING : 27.07.2015 DATE OF PRONOUNCEMENT : 27.07.2015 -: 2: - 2 O R D E R PER GARASIA, J.M. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF CIT(A)-I, INDORE, DATED 18.2.2013 FOR THE ASSESS MENT YEAR 2008-09. 2. THE SHORT FACTS OF THE CASE ARE AS UNDER. 3. THE ASSESSEE HAS PURCHASED SHOP NO. 1 AT RANIPURA MATAN MARKET, INDORE, FROM M/S. SOHAN ENTERPRISES, FOR RS. 10 LAKHS ON 25.5.2005. THE SHOP WAS PURCHASED JOINT LY WITH HIS SON AND RS. 5 LAKHS PAID BY THE ASSESSEE AND RS . 5 LAKHS WAS PAID BY HIS SON. THE TOTAL EXPENSES FOR TRANSFE R OF THE LEASE WAS INCURRED AT RS. 88,776/-, WHICH WAS BORNE BY CO- OWNERS EQUALLY. THE EXPENSES WERE DULY PAID TO MUNI CIPAL CORPORATION, INDORE. THE ASSESSEE HAS SOLD THIS PRO PERTY FOR S. 12 LAKHS AND HE HAS CLAIMED THE EXPENSES FOR REGIST ERING THE LEASE EXECUTED WITH MUNICIPAL CORPORATION, INDORE. THE EXPENSES OF RS. 44,368/- RELATES TO THE TRANSFER OF THE SHOPS, WHICH WAS DISALLOWED BY THE ASSESSING OFFICER. -: 3: - 3 4. THE MATTER CARRIED TO LD. CIT(A). THE LD. CIT(A) HA S ALLOWED THE CLAIM. 5. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THE LD. CIT(A) HAS HELD THAT ON PERUSA L OF THE AGREEMENT AND LEASE DEED, THE ASSESSEE SOLD THE PRO PERTY FOR RS. 12 LACS AND THE REGISTRATION CHARGES OF RS 44,3 68/- WAS INCURRED FOR TRANSFERRING THE SHOP, WHICH WAS ALLOW ABLE DEDUCTION U/S 48(I) OF THE ACT. WE FIND FROM THE OR DER OF THE CIT(A) THAT THE LD. CIT(A) HAS NOT VERIFIED WHETHER THE ASSESSEE HAS INCURRED THESE EXPENSES OR NOT. THE LD. AUTHORI ZED REPRESENTATIVE HAS TAKEN THE CONTENTION BEFORE THE LD. CIT(A) THAT THE AO HAS NOT GIVEN THE PROPER OPPORTUNITY OF HEARING AND THE ASSESSEE WAS NOT GIVEN ANY TIME FOR SUPPLYI NG THE EVIDENCE IN SUPPORT OF HIS CONTENTION. WE FIND THA T THE LD. CIT(A) HAS NOT VERIFIED THE SAME AND WITHOUT VERIFY ING THE CONTENTION OF THE AO, HE HAS ALLOWED THE APPEAL. WE FIND THAT THE LD. CIT(A) HAS CO-TERMINUS POWER WITH THE AO. I F THE AO FAILED TO VERIFY THE CLAIM, THE LD. CIT(A) CAN VERI FY THE CLAIM AND ALLOW. IN THE INSTANT CASE, THE LD. CIT(A) HAS NOT VERIFIED THE -: 4: - 4 CLAIM AND ALLOWED THE APPEAL. THEREFORE, WE REVERSE THE FINDING OF CIT(A) AND RESTORE BACK THIS ISSUE TO THE FILE O F CIT(A) TO DECIDE THE ISSUE AFRESH AFTER GIVING DUE OPPORTUNIT Y OF BEING HEARD TO THE ASSESSEE. THE LD. CIT(A) IS DIRECTED T O VERIFY THE EXPENDITURE INCURRED FOR REGISTRATION PURPOSES AND THE LD. CIT(A) IS DIRECTED TO GIVE THE SPECIFIC FINDING ON IT. THE LD. CIT(A) HAD LIBERTY TO CALL FOR THE REMAND REPORT FR OM THE AO IF HE DEEMS FIT. GROUND NO.2 : 6. THE ASSESSEE HAS SOLD 1 ACRE OF LAND SITUATED AT BHICHOLI MARDANA. THE ASSESSEE HAS CLAIMED SHORT TE RM CAPITAL GAINS OF RS. 42 LAKHS AND CLAIMED THE EXEMP TION U/S 54F OF THE ACT, AS THE AMOUNT OF SALE PROCEEDS INVE STED FOR PURCHASE OF RESIDENTIAL HOUSE UNDER CONSTRUCTION AT SAHARA CITY, INDORE. THE ASSESSEE HAS PURCHASED THE AGRICU LTURAL LAND IN QUESTION ON 08.01.2004 FOR CONSIDERATION OF RS. 3,05,000/- BY AGREEMENT TO SALE DEED AND, THEREAFTER, HE HAS S OLD THIS LAND. THE AO HAS VERIFIED THE CLAIM OF THE ASSESSEE AND HE FOUND THAT THE AGREEMENT TO SALE WAS EXECUTED IN BE TWEEN THE PARTIES, BUT THE AGREEMENT IS MADE ON STAMP OF RS. 100/- AND -: 5: - 5 IT WAS NOT REGISTERED AND IT WAS ALSO NOT NOTARIZED BEFORE ANY AUTHORITY. THEREFORE, THE AO HELD THAT AGREEMENT OF SALE DEED IS NOT VERIFIABLE. THEREFORE, THE DATE OF TRANSFER WAS TAKEN ON THE DATE OF REGISTERED DEED THAT WAS 23.3.2006 AND IF THAT DATE IS TAKEN, IT IS A SHORT TERM CAPITAL GAINS AND NOT A LONG TERM CAPITAL GAINS. 7. THE MATTER CARRIED TO LD. CIT(A). THE LD. CIT(A) HA S ALLOWED THE CLAIM BY OBSERVING AS UNDER :- 5.3 HAVING CONSIDERED THE AOS ORDER AS WELL AS TH E APPELLANTS SUBMISSION, IT IS EVIDENT THAT THE AO H AS MERELY TREATED THE LONG TERM CAPITAL GAINS AS SHORT TERM CAPITAL GAIN ON PRESUMPTION BASIS. IT IS ALSO SEEN THAT THE AO HIMSELF HAS DESCRIBED THE DETAILS OF LAND AS WEL L AS THE DETAILS OF TRANSACTIONS TOOK PLACE AND THERE IS NO DISPUTE ON THESE ISSUES BY THE ASSESSING OFFICER EVEN I FIN D THAT THE AO HAS MAINLY POINTED OUT A DEFECT THAT THE AGR EEMENT OF PURCHASE OF AGRICULTURAL LAND DO NOT CONSIST NAM E OF BOTH THE PARTIES AND ACCORDINGLY HE EMPHASIZED ON T HIS PRESUMPTION. HOWEVER, I FIND THAT THE AO HAS NOT VE RIFIED THE LEGAL POSITION IN THIS REGARD. AS IT IS EVIDENT THAT -: 6: - 6 SECTION 35 OF INDIAN STAMPS ACT PROVIDES THAT THE S TAMPS FOR ANY AGREEMENT MUST BE IN THE NAME OF ANY OF THE PARTY TO THE AGREEMENT AND IN THE INSTANT CASE ALSO IT IS IN THE NAME OF PURCHASER I.E. APPELLANT AND HIS WIFE. THUS , ON THIS PRETEXT ALSO, THE AO WAS NOT JUSTIFIED IN TREA TING THE LONG TERM CAPITAL GAIN AS SHORT TERM CAPITAL GAIN. IN VIEW OF THE SAME AND ALSO TAKING NOTE OF THE APPELLANTS SUBMISSION, I AM OF THE CONSIDERED VIEW THAT THE AO WAS COMPLETELY UNJUSTIFIED AND INCORRECT IN TREATING TH E CLAIM OF LONG TERM CAPITAL GAIN AS SHORT TERM CAPITAL GAIN. ACCORDINGLY, THIS GROUND OF APPEAL IS ALLOWED. 8. HAVING HEARD THE LD. SENIOR D.R., WE HAVE GONE THROUGH THE ORDER OF COMMISSIONER AND THE COMMISSIO NER HAS NOT VERIFIED THE AGREEMENT TO SALE DEED OF 2004. TH E AGREEMENT TO SALE DEED IS VALID OR NOT, THAT HAS NOT BEEN DEC IDED BY THE LD. CIT(A) AND LD. CIT(A) WITHOUT VERIFYING THESE F ACTS HAS ALLOWED THE CLAIM OF THE ASSESSEE. THE LD. CIT(A) H AS NOT PASSED THE SPEAKING ORDER. WHILE DECIDING THE APPEA L, IT IS THE DUTY OF THE LD. CIT(A) TO PASS THE SPEAKING ORDER. THE LD. CIT(A) -: 7: - 7 AS PER SECTION 250(6) OF THE INCOME-TAX ACT, 1961, WHICH SAYS THAT THE ORDER OF CIT(A) WHILE DISPOSING THE APPEAL SHALL BE IN WRITING AND SHALL STATE THE POINT OF DETERMINATION , THE DECISION THEREON AND REASON FOR THE DECISION. IN TH E INSTANT CASE, THE COMMISSIONER HAS NOT GIVEN ANY REASON FOR HIS DECISION. THEREFORE, WE REVERSE THE FINDING OF THE CIT(A) AND RESTORE BACK THIS ISSUE TO THE FILE OF CIT(A) TO DE CIDE THE ISSUE AFRESH. 9. IN THE RESULT, THE APPEAL OF THE DEPARTMENT IS ALLO WED FOR STATISTICAL PURPOSES. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 27 TH JULY, 2015. SD/- (B. C. MEENA) ACCOUNTANT MEMBER SD/- ( D.T.GARASIA) JUDICIAL MEMBER DATED : 27TH AUGUST, 2015. CPU*