The ACIT, 1(2), Indore V. Smt. Kasturibai Sukhram, Indore

ITA 492/IND/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 98958 (ITAT-INDORE)
• Duration Of Justice: 2 year(s) 1 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-08-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2004-2005
• Appeal Filed On: 20-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G S GAUTAM
• Assessee Lawyers: SHRI; S N AGRAWAL

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.492/IND/2013 A.Y. : 2004-05 ACIT, SMT. KASTURIBAI 1(2), INDORE. VS. SUKHRAM KHANDELWAL TRUST, INDORE APPELLANT RESPONDENT C.O.NO.108/IND/2013 (ARISING OUT OF I.T.A.NO.492/IND/2013) A.Y. : 2004-05 ACIT, SMT. KASTURIBAI 1(2), INDORE. VS. SUKHRAM KHANDELWAL TRUST, INDORE CROSS OBJECTOR RESPONDENT PAN NO. AAATK4585A DEPARTMENT BY : SHRI G. S. GAUTAM, DR ASSESSEE BY : SHRI S.N. AGRAWAL AND SHRI PANKAJ MOGRA, CAS -: 2: - 2 DATE OF HEARING : 27.07.2015 DATE OF PRONOUNCEMENT : .08.2015 O R D E R PER GARASIA, J.M. APPEAL BY THE DEPARTMENT AND CROSS OBJECTION BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF CIT(A)- I, INDORE, DATED 22.03.2013 FOR THE ASSESSMENT YEAR 2004-05. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE T RUST HAS FILED ITS RETURN OF INCOME FOR THE ASSESSMENT Y EAR 2004-05 DECLARING LOSS OF RS. 2,82,308/- ON 8.10.2004. THE ASSESSEE TRUST HAS EARNED THE CAPITAL FROM SALE OF LAND TO O NE M/S. MAHAVEER ENTERPRISES, INDORE. THE SAID LAND WAS DIS PUTED LAND. THE LAND WAS OWNED BY THE FOREFATHER OF HARI CHAND AIREN, ONE OF THE BENEFICIARIES OF CAPITAL GAINS AR ISING OUT OF THE SALE OF LAND BY THE ASSESSEE. THE ASSESSEE TRUS T HAD NO PURCHASE DEED/OWNERSHIP DOCUMENTS OF THE DISPUTED -: 3: - 3 PROPERTY. THE LAND HAVE BEEN TAKEN OVER BY THE ASSE SSEE TRUST AND THE DECREE WAS OBTAINED IN RESPECT OF THIS LAND . SHRI HARI CHAND AIREN HAS DISPUTED THAT THEIR FOREFATHERS HAD NOT SOLD ANY LAND, WHICH WAS CHALLENGED IN THE COURT. THE MA TTER WENT UP TO THE HON'BLE SUPREME COURT AND ULTIMATELY, THE MATTER WAS COMPROMISED AND WHILE THEY HAVE MADE THE SALE O F LAND AT CHITAWAD TO MAHAVEER ENTERPRISES VIDE AGREEMENT EXECUTED ON 21.04.2003 FOR RS. 70 LACS. THE ASSESSEE PAID RS . 15,12,000/- DIRECTLY TO AIREN FAMILY IN RESPECT OF LIABILITY PAYABLE ON THE SAID LAND . THE AO WAS OF THE VIEW T HAT THE PAYMENT MADE TO AIREN FAMILY IS NOT THE OBJECT OF T HE TRUST. THEREFORE, IT WAS DISALLOWED. 3. THE MATTER CARRIED TO LD. CIT(A). THE LD. CIT(A) HA S ALLOWED THE CLAIM BY OBSERVING AS UNDER :- 4.3 I HAVE CONSIDERED THE APPELLANTS SUBMISSIONS AND THE AOS OBSERVATIONS. FROM THE FACT OF THIS CASE, IT IS EVIDENT THAT THE PAYMENT OF RS. 15,12,000/- HAS BEEN MADE TO THE AIREN FAMILY IN ORDER TO MAKE THE TITLE OF THE APPELLANT ON THE LAND PERFECT. THIS FAMILY HAD -: 4: - 4 TAKEN STAY FROM COURT OVER THE SALE OF LAND AND HENCE WITHOUT MAKING SUCH PAYMENT THE APPELLANT COULD NOT HAVE SOLD THE PROPERTY AS ITS TITLE TO THE LAND ITSELF WAS UNDER CHALLENGE. AS PER THE SALE DEED, THE LAND HAS BEEN SOLD FOR RS. 70 LACS OUT OF WHICH RS. 15,12,000/- HAS BEEN PAID DIRECTLY TO AIREN FAMILY BY THE PURCHASER. THE APPELLANT HAS COMPUTED CAPITAL GAIN ON THE BALANCE AMOUNT OF RS. 54.88 LACS. HENCE, THE DISALLOWANCE MADE BY THE ASSESSING OFFICER IS NOT CORRECT AND IS ACCORDINGLY DIRECTED TO BE DELETED. 4. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT IT IS FACT ON RECORD THAT THE ASSESSEE ACQUIRED DISPUTED LAND FOR THE OBJECT OF THE TRUST. THE TITL E OF THE SAID PROPERTY LAND WAS GIVEN BY THE COURTS ORDER. THE C OURTS ORDER WAS OBJECTED BY SHRI HARI CHAND AIREN FAMILY AND THEY ARE CLAIMING THAT THEY ARE THE OWNERS OF THE SAID L AND. THE MATTER WENT TO HON'BLE SUPREME COURT AND THERE THEY HAVE -: 5: - 5 COMPROMISED THE SUIT. THE ASSESSEE TRUST THEREAFTER SOLD THIS PROPERTY AND THEY HAVE PAID RS. 15,12,000/- TO AIRE N FAMILY TO MAKE THE TITLE OF THE LAND PERFECT. THE ASSESSEE COULD NOT SALE THE LAND. THEREFORE, THIS EXPENDITURE IS WHOLL Y AND EXCLUSIVELY INCURRED IN CONNECTION WITH THE TRANSFE R OF THE SAID PROPERTY WITHIN THE MEANING OF SECTION 48(I) OF THE INCOME-TAX ACT, 1961. WE GET SUPPORT FROM THE DECISION OF CIT VS. MR. P.RAJENDRAN, 127 ITR 810 (KER), WHEREIN IT IS HELD THAT WHEN PAYMENT IS MADE TO SECURE THE TITLE WAS EXPENDITURE INCURRED WHOLLY AND EXCLUSIVELY IN CONNECTION WITH TRANSFER OF SAID PROPERTY WITHIN THE MEANING OF SECTION 48(I) OF THE INCOME-TAX ACT, 1961. THEREFORE, THE LD. CIT(A) HAS DELETED TH E ADDITION. WE FIND SUPPORT FROM VARIOUS COURTS THAT ANY EXPEND ITURE IS INCURRED IN ORDER TO MAKE THE PERFECT TITLE WILL BE ALLOWABLE DEDUCTION U/S 48(I) OF THE ACT. THEREFORE, WE ARE O F THE VIEW THAT THE LD. CIT(A) IS JUSTIFIED IN HIS ACTION AND OUR INTERFERENCE IS NOT CALLED FOR. 5. CROSS OBJECTION WAS NOT PRESSED. THE CROSS OBJECTIO N IS DISMISSED AS NOT PRESSED. -: 6: - 6 6. IN THE RESULT, THE DEPARTMENTAL APPEAL AS WELL AS C ROSS OBJECTION BOTH ARE DISMISSED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 18 TH AUGUST, 2015. SD/- (B. C. MEENA) ACCOUNTANT MEMBER SD/- ( D.T.GARASIA) JUDICIAL MEMBER DATED : 18 TH AUGUST, 2015. CPU* 2718