Sh. Arunesh Kumar Shakar, Ex MLA, Hoshiarpur V. The Income-tax Officer, Dasuya

ITA 522/ASR/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8819 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-02-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 11-02-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 22-08-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S S KANWAL
• Assessee Lawyers: J S BHASIN
• Keywords: Capital asset
• Section: 54F; 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR BEFORE SH. A.D.JAIN, HONBLE JUDICIAL MEMBER AND SH. T.S. KAPOOR, HONBLE ACCOUNTANT MEMBER I.T.A NO.522(ASR)/2014 ASSESSMENT YEAR: 2007-08 SH. ARUNESH KUMAR SHAKAR, EX MLA, MUKERIAN, DIST:- HOSHIARPUR PAN:AMMPS9590B VS. INCOME TAX OFFICER, DASUYA. (APPELLANT) (RESPONDENT) I.T.A NO.523(ASR)/2014 ASSESSMENT YEAR: 2007-08 SH. RAMESH KUMAR DOGRA, EX MLA THRO L/HEIR SHRI RAMAN DOGRA, 445 NAI ABADI, DIST:- HOSHIARPUR PAN:AAPPD4138D INCOME TAX OFFICER, WARD II, HOSHIARPUR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. J.S. BHASIN (ADV.) RESPONDENT BY: SH. S.S.KANWAL (DR.) DATE OF HEARING: 11.02.2016 DATE OF PRONO UNCEMENT: 29.02.2016 ORDER PER T. S. KAPOOR (AM): THESE ARE TWO APPEALS FILED BY THE DIFFERENT ASSESS EES AGAINST THE SEPARATE ORDERS OF LEARNED CIT(A), DATED 19.06.2014 AND 17.06.2014 RESPECTIVELY. SIMILAR ISSUES ARE INVOLVED IN THESE APPEALS AND THESE ITA NOS.522 & 523(ASR)/2014 ASST. YE AR: 2007-08 2 APPEALS WERE HEARD TOGETHER, THEREFORE, FOR THE SAK E OF CONVENIENCE THESE CASES ARE BEING DISPOSED OFF THROUGH THIS COM MON AND CONSOLIDATED ORDER. 2. SINCE BOTH ASSESSEES HAS TAKEN SIMILAR GROUNDS O F APPEAL EXCEPT DIFFERENCE IN AMOUNT, THEREFORE, FOR THE SAKE OF CO NVENIENCE GROUNDS TAKEN BY ASSESSEE IN ITA NO.522(ASR)2014 ARE REPROD UCED ONLY. 1. THAT THE ID. CIT(A), IN THE GIVEN FACTS OF THE CASE, HAS ERRED IN UPHOLDING THE VALIDITY OF ASSUMPTION OF JURISDICTIO N U/S.147/148 BY THE ITO. 2. THAT THE ID .CIT(A) MISDIRECTED HIMSELF IN LAW A ND ON FACTS IN CONFIRMING THE TAXATION OF NOTIONAL CAPITAL GAIN OF RS. RS. 1,77,04,930/- BY WRONGLY UPHOLDING THAT THE TRANSFER OF LAND TOOK PLACE ON THE VERY DATE OF EXECUTION OF A JOINT DEVELOPMENT AGREE MENT WITH THE DEVELOPERS. 3. THAT THE ID. CIT(A) OUGHT TO HAVE READ THE J OINT DEVELOPMENT AGREEMENT IN TOTALITY, SO AS NOT TO INFER THE ACCRU AL OF CAPITAL GAIN ON THE VERY DATE OF EXECUTION OF THE SAID AGREEMENT. 4. THAT WHEN CIT(A) HIMSELF ADMITTED THAT THE FLA T, MADE PART OF SALE CONSIDERATION, WAS NON-EXISTENT, HIS UPHOLDING THE TAXATION OF CAPITAL GAIN, COMPUTED ON A SALE VALUE, COMPRISED MAINLY OF THE COST OF FLAT, WAS SELF CONTRADICTORY. 5. THAT THE ID. CIT(A) WAS NOT JUSTIFIED OVERLO OKING VARIOUS JUDICIAL AUTHORITIES RELIED UPON BY ASSESSEE, ON A FACIAL DI STINCTION DRAWN BY HIM. 6. THAT THE ASSESSEE'S CLAIM OF DEDUCTION U/S.54F O UGHT TO HAVE BEEN ALLOWED BY THE ID. CIT(A). 7. THAT THE ID.CIT(A) WRONGLY REJECTED THE ASSESSEE 'S CLAIM THAT THE IMPUGNED CAPITAL GAIN, IF ANY, COULD BE ASSESSED ON LY IN THE HANDS OF SOCIETY AND NOT THE ASSESSEE MEMBER. 8. THAT THE ASSESSEES CLAIM NOT TO TAX THE IM PUGNED GAIN ON THE PRINCIPLES OF MUTUALITY INVOLVED IN THE TRANSACTION S, HAS BEEN WRONGLY REJECTED BY LD. CIT(A). 9. THAT CHARGING OF INTEREST U/S. 234A & 234B H AS BEEN WRONGLY CONFIRMED. ITA NOS.522 & 523(ASR)/2014 ASST. YE AR: 2007-08 3 10. THAT INITIATION OF PENALTY U/S 271(1) (C ) HA S BEEN WRONGLY CONFIRMED. 11. THAT THE ORDER UNDER APPEAL IS WHOLLY AGAINST LAW AND FACTS OF THE CASE. 3. THE BRIEF FACTS OF THE CASES ARE THAT THE ASSESS EES ARE MEMBERS OF HOUSING SOCIETY OF MLAS AND EX MLAS, NAMED AS THE P UNJABI CO- OPERATIVE HOUSE BUILDING SOCIETY LTD. MOHALI AND TH E SOCIETY IN A TRIPARTITE JOINT DEVELOPMENT AGREEMENT WITH M/S HAS H BUILDERS (PVT.) LIMITED, CHANDIGARH AND TATA HOUSING DEVELOPMENT CO MPANY HAD ENTERED INTO AN AGREEMENT BY WHICH THE SOCIETY WOUL D TRANSFER ITS LAND FOR DEVELOPMENT IN LIEU OF MONETARY CONSIDERATION A ND ALSO CONSIDERATION IN KIND TO THE MEMBERS OF THE SOCIETY . SINCE ASSESSEES WERE ALSO MEMBERS OF THE SAID SOCIETY AND THE TOTA L CONSIDERATION WITH ASSESSEES WAS SETTLED AT RS.82,50,000/- IN CASH PLU S ALLOTMENT OF ONE FLAT OF 2250 SQ. FEET OF AREA VALUING AT RS.1,01,25 ,000/- OUT OF WHICH ASSESSEES HAD RECEIVED PART PAYMENTS DURING THE YEA R UNDER CONSIDERATION. THE ASSESSEES DID NOT DECLARE CAPITA L GAINS ON THE SALE OF SUCH LAND AND THEREFORE, THE CASES OF THE ASSESSEES WERE REOPENED U/S 147, AND ASSESSING OFFICER MADE THE ADDITION TO THE TUNE OF RS.1,77,04,930/- AND RS.16,26,5,846/- TO THE INCOME OF ABOVE ASSESSEES RESPECTIVELY ON ACCOUNT OF ALLEGED UNDECL ARED LONG TERM CAPITAL GAIN. ITA NOS.522 & 523(ASR)/2014 ASST. YE AR: 2007-08 4 4. AGGRIEVED WITH THE ORDER BOTH ASSESSEES FILED AP PEAL BEFORE LEARNED CIT(A) AND LEARNED CIT(A) CONFIRMED THE ADD ITIONS MADE BY ASSESSING OFFICER FOLLOWING THE ORDERS PASSED BY LE ARNED CIT(A) AND CONFIRMED BY HONBLE ITAT IN THE CASE OF OTHER MLAS UNDER SIMILAR FACTS AND CIRCUMSTANCES. THE LEARNED CIT(A) ALSO DI SMISSED THE GROUNDS OF APPEAL TAKEN BY ASSESSEES FOR REOPENING OF THE CASES AGAIN FOLLOWING THE ORDER OF HONBLE ITAT IN THE CASE OF OTHER ASSESSEES HAVING SIMILAR FACTS. 5. AGGRIEVED BOTH THE ASSESSEES FILED APPEAL BEFORE US. 6. AT THE OUTSET, ON MERITS OF THE CASES THE LEARNE D AR FILED A COPY OF AN ORDER IN THE CASE OF SHRI C.S. ATWAL & ORS. VS. CIT, 123 DTR 49 (P& H) IN ITA NO. 200 OF 2013 DECIDED ON 22 ND JULY, 2015. THE LEARNED AR SUBMITTED THAT UNDER SIMILAR FACTS AND CIRCUMSTANCE S IN THE CASE OF SHRI C.S. ATWAL & ORS. VS. CIT(SUPRA). THE HONBLE PUNJAB & HARYAN HIGH COURT HAS DECIDED THE ISSUE IN FAVOUR OF ASSES SEES AND THEREFORE, HE SUBMITTED THAT THE APPEALS IN THESE CASES ARE RE QUIRED TO BE REMITTED BACK TO THE AO WHO SHOULD DECIDE THE CASES IN THE LIGHT OF DECISION OF THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF SH. C.S. ATWAL & ORS. VS. CIT (SUPRA). 7. THE LEARNED AR FURTHER SUBMITTED THAT ASSESSING OFFICER IN ITA NO.522(ASR)/2014 ALSO DID NOT CONSIDER THE EXEMPTIO N AVAILABLE U/S 54F OF THE ACT. ITA NOS.522 & 523(ASR)/2014 ASST. YE AR: 2007-08 5 8. THE LEARNED DR ACCEPTED THAT THE MATTER WAS COVE RED BY THE ORDER OF HONBLE PUNJAB AND HARYANA HIGH COURT. 9. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT THE ISSUES RAISED BY ASSESSEES IN GROUND NO. 2 TO 5 ARE SIMILAR AS IN THE CASE OF SH.C.S. ATWAL & ORS. VS. CIT (SUPRA) AND HONBLE PUNJAB & HARYAN HIGH CO URT UNDER THE SIMILAR FACTS AND CIRCUMSTANCES HAD DECIDED THE ISS UE AS UNDER: 46. WE SUMMARIZE OUR CONCLUSION, AS UNDER:- 1. PERUSAL OF THE JDA DATED 25.02.2007 READ W ITH SALE DEEDS DATED 02.03.007 AND 25.04.2007 IN RESPECT OF 3.08 A CRES AND 4.62 ACRES RESPECTIVELY WOULD REVEAL THAT THE PARTIES HAD AGREED FOR PRO-RATA TRANSFER OF LAND. 2. NO POSSESSION HAD BEEN GIVEN BY THE TRANSFE ROR TO THE TRANSFEREE OF THE ENTIRE LAND IN PART PERFORMANCE O F JDA DATED 25.2.2007 SO A TO FALL WITHIN THE DOMAIN OF SECTION 53A OF 1882 ACT. 3. THE POSSESSION DELIVERED, IF AT ALL. WAS AS A LICENCEE FOR THE DEVELOPMENT OF THE PROPERTY AND NOT IN THE CAPACITY OF A TRANSFEREE. 4. FURTHER SECTION 53A OF 882 ACT. BY INCORPORATIO N, STOOD EMBODIED IN SECTION 2(47)(V) OF THE ACT AND ALL THE ESSENTIAL INGREDIENTS OF SECTION 53A OF 1882 ACT WERE REGISTERE D TO BE FULFILLED. IN THE ABSENCE OF REGISTRATION OF JDA DAT ED 25.2.2007 HAVING BEEN EXECUTED AFTER 24.9.2001, THE AGREEMENT DOES NOT FALL UNDER SECTION 53A OF 1882 ACT AND CONSEQUENTLY S ECTION 2(47)(V) OF THE ACT DOES NOT APPLY. 5. IT WAS SUBMITTED BY LEARNED COUNSEL FOR THE A SSESSEE- APPELLANT THAT WHATEVER AMOUNT WAS RECEIVED FROM TH E DEVELOPER, CAPITAL GAINS TAX HAS ALREADY BEEN PAID ON THAT AND SALE DEEDS HAVE ALSO BEEN EXECUTED. IN VIEW OF CANCELLATION OF JDA DATED ITA NOS.522 & 523(ASR)/2014 ASST. YE AR: 2007-08 6 25.2.2007, NO FURTHER AMOUNT HAS BEEN RECEIVED AND NO ACTION THEREON HAS BEEN TAKEN. IT WAS URGED THAT AS AND AN Y AMOUNT IS RECEIVED, CAPITAL GAIN TAX SHALL BE DISCHARGED THER EON IN ACCORDANCE WITH LAW. IN VIEW OF THE AFORESAID STAND , WHILE DISPOSING OF THE APPEALS, WE OBSERVE THAT THE ASSES SEE APPELLANTS SHALL REMAINS BOUND BY THEIR SAID STAND. 6. THE ISSUE OF EXIGIBILITY TO CAPITAL GAINS TAX HAVING BEEN DECIDED IN FAVOUR OF THE ASSESSEE, THE QUESTION OF EXEMPTION UNDER SECTION 54F OF THE ACT WOULD NOT SURVIVE ANY L ONGER AND HAS BEEN RENDERED ACADEMIC. 7. THE TRIBUNAL AND AUTHORITIES BELOW WERE NOT R IGHT IN HOLDING THE ASSESSEE-APPELLANT TO BE LIABLE TO CAPITAL GAIN S TAX IN RESPECT OF REMAINING LAND MEASURING 13.5 ACRES FOR WHICH NO CONSIDERATION HAD BEEN RECEIVED AND WHICH STOOD CAN CELLED AND INCAPABLE OF PERFORMANCE AT PRESENT DUE TO VARIOUS ORDERS PASSED BY THE SUPREME COURT AND THE HIGH COURT IN PILS. TH EREFORE, THE APPEALS ARE ALLOWED. 47. CONSEQUENTIALLY, THE SUBSTANTIAL QUESTION OF LA W AS REPRODUCED IN THE BEGINNING OF THE JUDGMENT ARE ANS WERED IN THE MANNER INDICATED HEREINBEFORE AND THE APPEALS OF TH E ASSESSEE ARE DISPOSED OF ACCORDINGLY. 10. IN VIEW OF THE ABOVE GROUND NOS.2 TO 5 ARE REST ORED TO ASSESSING OFFICER WHO SHOULD DECIDE THE ISSUE AFRESH AFTER TA KING INTO ACCOUNT THE DECISION OF PUNJAB & HARYANA HIGH COURT IN THE CASE OF SH.C.S. ATWAL & ORS. VS. CIT (SUPRA). THEREFORE, GROUND NOS.2 TO 5 ARE ALLOWED FOR STATISTICAL PURPOSES. 11. AS REGARDS GROUND NO.1 REGARDING ISSUE OF REOPE NING, THE LEARNED AR DID NOT PRESS THE SAME IN BOTH THE APPEALS, THER EFORE, THE SAME ARE DISMISSED AS NOT PRESSED. ITA NOS.522 & 523(ASR)/2014 ASST. YE AR: 2007-08 7 12. SIMILARLY, THE LEARNED AR IN ITA 523(ASR)2014 D ID NOT PRESS GROUND NO. 6 & 7 AND THEREFORE THE SAME ARE DISMISS ED AS NOT PRESSED. 13. AS REGARDS GROUND NO.6 IN ITA NO.522(ASR)/2014, THE SAME IS ALSO RESTORED TO THE OFFICE OF ASSESSING OFFICER F OR EXAMINATION OF CLAIM OF ASSESSEE U/S 54F OF THE ACT. THEREFORE, GROUND N O.6 IN ITA NO.522(ASR)/2014 IS ALLOWED FOR STATISTICAL PURPOSE S. 14. THE OTHER GROUNDS TAKEN BY ASSESSEES ARE CONSEQ UENTIAL AND DO NOT REQUIRE ADJUDICATION. 15. IN VIEW OF THE ABOVE APPEALS FILED BY ASSESSEE S ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH FEBRUARY, 2016. SD/- SD/- (A.D. JAIN) (T. S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED:29.02.2016. /PK/PS. COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.