Padmavathi Reddy Gaddam , Hyderabad V. Dy. Commissioner of Income Tax, International Taxation-1, Hyderabad

ITA 538/Hyd/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 5670 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 4 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Next Hearing Date: 14-07-2021
• Assessment Year: 2008-2009
• Appeal Filed On: 16-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: K A SAI PRASAD
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Additional evidence; Valuation report; Capital receipt; Capital Gains
• Section: 143(3); 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD (THROUGH VIDEO CONFERENCE) BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER I.T.A. NO. 538/HYD/2019 ASSESSMENT YEAR: 2008-09 SMT.PADMAVATHI REDDY, C/O.GPA HOLDER SRI G.MURALI KRISHNA REDDY, NIZAMABAD [PAN: CCTPR1132B] VS DY.COMMISSIONER OF INCOME TAX-1, INTERNATIONAL TAXATION, HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI K.A.SAI PRASAD, AR FOR REVENUE : SHRI ROHIT MUJUMDAR, DR DATE OF HEARING : 14-07-2021 DATE OF PRONOUNCEMENT : 14-09-2021 O R D E R PER S.S.GODARA, J.M. : THIS ASSESSEES APPEAL FOR AY.2008-09 ARISES FROM TH E CIT(A)-10, HYDERABADS ORDER DATED 30-07-2018 PASSED IN CASE NO.0044/CIT(A)-10/2016-17, IN PROCEEDINGS U/S.143(3 ) R.W.S.147 OF THE INCOME TAX ACT, 1961 [IN SHORT, THE A CT]. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. IT TRANSPIRES AT THE OUTSET THAT THIS ASSESSEES INSTANT APPEAL SUFFERS FROM 89 DAYS DELAY STATED TO BE ATTRIBUTAB LE TO THE REASON(S) BEYOND HER CONTROL AS PER CONDONATION ITA NO. 538/HYD/2019 :- 2 -: PETITION/AFFIDAVIT. NO REBUTTAL HAS COME FROM THE DEPARTM ENTAL SIDE. THE IMPUGNED DELAY IS CONDONED THEREFORE. 3. THE ASSESSEE HAS RAISED THE FOLLOWING SUBSTANTIVE GROUNDS IN THE INSTANT APPEAL: 1.THE ORDER OF THE LEARNED FIRST APPELLATE AUTHORI TY IS NOT CORRECT EITHER IN LAW OR ON FACTS AND IN BOTH. 2.THE LEARNED FIRST APPELLATE AUTHORITY FAILED TO A PPRECIATE THE FACT THAT THE PROPERTY IN DISPUTE OWNED BY THE STATE GOV ERNMENT AS PER THE APEX COURT DECISION CANNOT BE CONSIDERED FOR CA PITAL GAINS U/S.50C OF THE I.T.ACT IN THE HANDS OF THE APPELLAN T. 3. THE LEARNED FIRST APPELLATE AUTHORITY IS NOT JUS TIFIED IN CONFIRMING THE ADDITION OF RS.1,36,33,062/- TOWARDS LONG TERM CAPITAL GAINS. 4. BOTH THE LEARNED REPRESENTATIVES NEXT INVITED OUR ATTENTION TO THE CIT(A)S DETAILED DISCUSSION TAKING INTO CONSIDERATION THE ASSESSING OFFICERS REMAND REPORT A S UNDER: 8. THE RELATED DISCUSSION IS AVAILABLE IN THE ASSE SSMENT ORDER FROM PARA 6 TO PARA 10. THE AO NOTED THAT AGAINST THE SA LE CONSIDERATION REPORTED BY THE APPELLANT AT RS.29,00,000/-, THE SR O VALUE, AS PER SECTION 50C, IS RS.2,81,06,000/-. THE APPELLANT STA TED THAT THE PROPERTY WAS IN LITIGATION AND AN SLP IS STILL PEND ING BEFORE THE HON 'BLE SUPREME COURT OF INDIA. AS THE APPELLANT RAISE D OBJECTIONS, THE AO INVOKED SECTION 50C (2) AND REFERRED THE MATTER TO THE VALUATION OFFICER. THE AO OBSERVED THAT AFTER RECEIPT OF THE VALUATION REPORT, AND IN CASE OF ANY VARIATION, THE LTCG WILL BE MODIFIED , ACCORDINGLY. STATING SO, THE AO CONCLUDED ASSESSMENT. 8.1.RESPONDING TO THE OBJECTIONS MADE BY THE APPELL ANT, THE AO OBSERVED THAT SECTION 50C(1) IS A DEEMING PROVISION AND NEEDS TO BE APPLIED, STRICTLY. THE ASSESSING OFFICER NOTED THAT NOTHING CAN PERSUADE THE SITUATION INCLUDING THE GENUINE AND VA LID DIFFICULTIES OF THE APPELLANT. IN THIS CONNECTION, THE AO ALSO PLAC ED RELIANCE UPON THE DECISION OF THE ITAT, HYDERABAD BENCH IN THE CASE O F SMT. CHITTI PARVATHA VARDHANAMMA (2014) 45 TAXMANN.COM 327. 9.IN THE COURSE OF THE APPEAL PROCEEDINGS, THE APPE LLANT REITERATED THE SUBMISSIONS MADE BEFORE THE AO. APART FROM THESE SU BMISSIONS, THE APPELLANT FURNISHED ADDITIONAL EVIDENCES AND STATED THAT THE HON'BLE SUPREME COURT GAVE A JUDGEMENT ON 09.08.2017 AND TH E PENDING LITIGATION GOT CONCLUDED. THE APPELLANT ARGUED THAT AS THE HON'BLE APEX COURT SCRAPPED ALL THE OWNERSHIP RIGHTS OF THE PRIVATE PARTIES ITA NO. 538/HYD/2019 :- 3 -: INVOLVED, IN THE PROPERTY UNDER CONSIDERATION, THER E CAN BE NO LONG TERM CAPITAL GAINS WHICH ARE TAXABLE IN THE CASE OF THE APPELLANT. 10.AFTER CONSIDERING THE ADDITIONAL EVIDENCES AND T HE DECISION OF THE HON'BLE SUPREME COURT, THE AO FURNISHED REMAND REPO RT WHICH IS REPRODUCED, AS BELOW. '2. THE ASSESSMENT ORDER WAS PASSED U/S. 143(3) R.W .S.147 OF THE INCOME TAX ACT, 1961 (HEREIN: 'ACT') IN THE CASE OF THE ASSESSEE SMT. C. PADMAVATHI REDDY ON 31.03.2016 BRINGING TO TAX T HE LTC THAT ESCAPED TAXATION. AN APPEAL WAS FILED BY THE ASSESS EE BEFORE THE LD. CIT(A) AGAINST THE ADDITIONS PROPOSED IN THE ASSESS MENT ORDER. FURTHER, A PETITION WAS FILED BY THE ASSESSEE BEFOR E THE LD. CIT(A) URGING ADMISSION OF ADDITIONAL GROUNDS OF APPEAL UN DER RULE 46A OF THE INCOME-TAX RULES, 1962 (HEREIN: 'RULES'). THE A SSESSEE PRAYED FOR ADMISSION OF THE HON'BLE SUPREME COURT JUDGEMENT IN THE CASE OF SHEIK AHMED BIN MD. AMOODI (D) TR. LRS & ORS. V STA TE OF ANDHRA PRADESH & ORS. IN CIVIL APPEAL NOS. 5439-5440 OF 20 15 (JUDGEMENT DELIVERED ON 09.08.2017). DURING THE SCRUTINY ASSES SMENT PROCEEDINGS, THE ASSESSEE BROUGHT TO THE NOTICE OF THE ASSESSING OFFICER ABOUT THE PENDING CASE BEFORE THE HON'BLE S UPREME COURT. HOWEVER, SINCE THE JUDGEMENT WAS NOT PRONOUNCED AS ON THE DATE OF ASSESSMENT IE., 31.03.2016, IS WAS NOT TAKEN CONSID ERATION WHILE COMPLETING THE ASSESSMENT PROCEEDINGS. A MENTION WA S, HOWEVER, MADE IN THE ASSESSMENT ORDER REGARDING THE PENDING PROCEEDINGS BEFORE THE HON'BLE SUPREME COURT. NOW SINCE THE JUD GEMENT IS PRONOUNCED BY THE HON'BLE SUPREME COURT, THE UNDERS IGNED HAS NO OBJECTION TO THE PRAYER OF THE ASSESSEE FOR ADMISSI ON OF THIS RULING OF THE APEX COURT AS ADDITIONAL EVIDENCE BY THE LD. CI T(A). THIS JUDGEMENT OF THE APEX COURT IS RELEVANT FOR THIS CA SE AND CAN BE TAKEN AS AN ADDITIONAL EVIDENCE UNDER RULE 46A(1)(C ) OF THE RULES. 3. AS PER THE ORDER OF THE HON'BLE SUPREME COURT DA TED 09.08.2017, THE PROPERTY TRANSACTION UNDER QUESTION IN THIS CAS E ANA PREVIOUS TRANSACTIONS FOR THE SAME PROPERTY ARE ALL DECLARED NULL AND VOID AS THE LAND IN QUESTION BELONGS TO THE GOVERNMENT OF U NDIVIDED ANDHRA PRADESH (NOW GOVERNMENT OF TELANGANA) AND THE VENDO RS MENTIONED IN THE SALE TRANSACTIONS WERE DECLARED TO BE LAND G RABBERS UNDER THE AP LAND GRABBING (PROHIBITION) ACT. HOWEVER, IT IS ALSO SEEN THAT SUBSEQUENT TO THE JUDGEMENT OF THE HON'BLE SUPREME COURT, NO ACTION SEEMS TO HAVE BEEN TAKEN BY EITHER T E GOVERNMENT O R THE VENDORS / VENDEES. THEREFORE, EVEN THOUGH ILLEGAL, A TRANSACT ION HAS TAKEN PLACE AND CAPITAL GAINS WAS REALIZED BY THE ASSESSE E. THE ASSESSEE, THEREFORE, IS LIABLE TO PAY TAX ON THIS LTCG. EVEN IF THE INCOME WAS NOT EARNED IN A LEGAL MANNER, STILL SUCH INCOME IS TAXABLE AND . IT IS NOT THE CONCERN OF THE INCOME-TAX DEPARTMENT AS TO HOW THE ASSESSEE EARNED HER INCOME. THIS WAS UPHELD IN MANY CASES VI Z. CIT V K. THANGAMANI [2009J 309 ITR 15, [2009J 221 CTR 742 (M ADRAS), K.P.G.B.U.G.M.S.S.A MOHAMMAD ABDUL KAREEM & CO. V C IT [1948] 16 ITA NO. 538/HYD/2019 :- 4 -: ITR 412 (MADRAS) AND CIT V S. C. KOTHARI [1968J 69 ITR 1 (GUJARAT). UNTIL THE TRANSACTION THAT TOOK PLACE GIVING RISE T O LTCG IN THE HANDS OF THE ASSESSEE IS OVERTURNED BY AN ACTION OF THE S TATE GOVERNMENT / ASSESSEE/VENDEES AND THE AMOUNTS RECEIVED ARE PAID BACK BY THE ASSESSEE TO THE VENDEE, THE TRANSACTION SHOULD BE C ONSIDERED ALIVE AND TAXED ACCORDINGLY.' 11. IN RESPONSE TO THE REMAND REPORT OF THE AO, THE APPELLANT FURNISHED OBJECTIONS VIDE LETTER DT. 05.07.2018 AND THE SAME ARE REPRODUCED, AS BELOW. 1.'IT HAS BEEN ACCEPTED THAT THE ORIGINAL PATTADARS WERE DECLARED TO BE LAND GRABBERS UNDER THE A.P. LAND GRABBING (PROH IBITION ACT) THAT THE PROPERTY BELONGS TO THE STATE GOVERNMENT. THERE FORE, ALL THE SUBSEQUENT TRANSACTIONS OF PURCHASE AND SALE WERE A LL DECLARED NULL AND VOID AND THERE WAS NO VALID TRANSFER AND THE SA LE DEED EXECUTED BY HER ON 17.11.2007 IN DOCUMENT NO. 3808/2007 IS D ECLARED TO BE INVALID BY VIRTUE OF THE DECISION OF THE SUPREME CO URT. THEREFORE, THERE IS NO CAPITAL GAIN AND THE ASSESSMENT TO BE Q UASHED. THE ASSESSEE HAS NO SAY IN THE. MATTER AND COULD NOT PE RSUADE THE STATE GOVERNMENT TO TAKE ANY MEASURES AND THE APPELLANT S TANDS IN THE CHAIN OF TRANSACTIONS AND COULD NOT DO ANYTHING ON HER OWN. 2.WITHOUT PREJUDICE TO THE ABOVE, IT IS SUBMITTED T HAT THE ASSESSING OFFICER REFERRED TO THE DECISIONS OF MADRAS HIGH CO URT AND GUJARAT HIGH COURT, WHERE IN THE INCOME EARNED BY THE ASSES SEE THROUGH DUBIOUS MEANS, IS HELD TO BE TAXABLE UNDER RESIDUAR Y HEAD, BEING INCOME FROM OTHER SOURCES. THERE IS NO SUCH ILLEGA L ACTIVITY NOR THE INCOME WAS TAINTED. THEREFORE, THE DECISIONS OF THE HON'BLE HIGH COURTS ARE NOT RELEVANT TO THE FACTS OF THE INSTANT CASE. THE TRANSACTION, WHICH IS NOW DECLARED NULL AND VOID, C OULD NOT BE TAXED UNDER THE RESIDUARY HEAD. 3.IT IS ALSO SUBMITTED THAT IN VIEW OF THE DISPUTES AND THE EVENTUAL DECISION OF THE APEX COURT, THE PROVISIONS OF SECTI ON 50C ARE NOT APPLICABLE, AS THERE WAS NO OWNERSHIP OVER THE LAND , WHICH IS A PRE- REQUISITE FOR APPLICATION OF SECTION 45 AND SECTION 50C. IT IS THEREFORE, PRAYED THAT THE INCOME FROM CAPITA L GAIN ASSESSED AT RS. 1,36,33,062 BE DELETED.' 11.1 IN ADDITION TO THE OBJECTIONS, AS ABOVE, THE A PPELLANT FURNISHED FURTHER OBJECTIONS VIDE LETTER DT. 05.07.2018 (RECE IVED ON 09.07.2018) AND THE SAME ARE REPRODUCED, AS BELOW. 1. 'THE SALE TRANSACTION OF PLOT OF LAND 935 SQ. YA RDS IN MUNICIPAL NO. 8-2-686/13 IN SURVEY NO. 129 OLD, 403 NEW, SHAIKPET VILLAGE AT ROAD NO.12, BANJARA HILLS, HYDERABAD OF 50% SHARE OF THE ASSESSEE, BY WAY OF AGREEMENT OF SALE-CUM-GENERAL POWER OF ATTOR NEY WITH POSSESSION EXECUTED ON 17.11.2007 AND REGISTERED AS DOCUMENT NO. ITA NO. 538/HYD/2019 :- 5 -: 3808/2007, FOR CONSIDERATION OF RS.29,00,000. THE S AID SALE TRANSACTION, NOW STANDS ANNULLED BECAUSE OF THE DEC ISION OF THE SUPREME COURT OF INDIA DTD. 09.08.2017 WHEREIN THE ORIGINAL OWNER WAS DECLARED LAND GRABBER AND THE PROPERTY IS HELD TO BELONG TO THE STATE GOVERNMENT. THEREFORE, THE MATTER BECOME FINA L AND THE PURCHASE TRANSACTION OF THE APPELLANT FROM THE OWNE R DTD. 29.11.1983 DOCUMENT NO.3134/1993 AND THE AFORESAID DOCUMENT DT D. 17.11.2007 AND ALL THE PREVIOUS DOCUMENTS STAND ANN ULLED AS CONSEQUENCE OF THE SUPREME COURT JUDGMENT. THERE IS NO SALE AND THE PROVISIONS OF THE SECTION 45 OF THE INCOME TAX ACT, 1961 ARE NOT APPLICABLE . 2. WITH REGARD TO THE NATURE OF THE AMOUNT RECEIVED FROM THE BUYERS OF RS. 29,00,000 AND HELD BY THE APPELLANT IS, AMOUNT DUE TO THEM AND PAYABLE AND WHEN THE ASSESSEE GETS HER MONEY FROM H ER VENDOR OF THE AMOUNT PAID BY HER AND THEN SALE AMOUNT RECEIVE R BY HER STANDS REFUNDABLE. UNIT SUCH TIME, THE AMOUNT HELD BY THE ASSESSEE IS A DEBT OWED. IT IS A CAPITAL RECEIPT AND NOT A REVENUE AS THE ONLY CAUSE FOR RECEIPT IS THE SALE OF LAND, A CAPITAL ASSET. THE R ECEIPT PARTAKES CHARACTER OF INCOME ONLY WHEN IT IS A REVENUE RECEI PT AND AS A RESULT OF SUCH ACTIVITY AS HELD IN ALL THE DECISIONS OF TH E HON'BLE COURTS AS REFERRED TO IN THE REPORT OF THE A.O. THE SAME IS N OT THE CASE WITH THE CAPITAL RECEIPT IN THE HANDS OF THE APPELLANT. THE SAME CAN BE CONSTRUED AS AN ADVANCE, IN THE MEANWHILE, AS PROVI DED U/S 51 OF THE INCOME TAX ACT, 1961. 3.AS CONSEQUENCE OF THE SUPREME COURT JUDGMENT, IT SHOULD NOT RESULT IN SUBJECTING TO TAX, THE RECEIPT OF AMOUNT UNDER T HE SALE DEED THAT HAS BECOME VOID. THE EFFECT OF THE APEX COURT JUDGM ENT SHOULD BE COMPLETE FOR ALL INTENTS AND PURPOSES AND THE AMOUN T COULD NOT BE BROUGHT TO TAX UNDER ANY OF THE INCOME HEADS IN THE GUISE OF HOLDING IT AS INCOME. OTHER-WISE, THIS WOULD TANTAMOUNT TO RESTRICTIVE IM PLEMENTATION OF THE JUDGMENT OF THE SUPREME COURT. PLEASE CONSIDER THE ABOVE AND ALLOW THE APPEAL. ' 12. THE MATERIAL AVAILABLE ON RECORD HAS BEEN CONSI DERED. I AM IN AGREEMENT WITH THE VIEW TAKEN BY THE AO. IN SO FAR AS THE QUESTION OF ADOPTING THE SRO VALUE IS CONCERNED, THE LAW IS CLE AR AND THE AO IS DUTY BOUND TO INVOKE SECTION 50C OF THE LT. ACT IN THE GIVEN SET OF FACTS. THERE CAN BE NO GRIEVANCE ON THE PART OF THE APPELLANT AS THE AO HAS ALREADY NOTED, IN THE ASSESSMENT ORDER, THAT THE VALUE SUGGESTED BY THE VALUATION OFFICER WILL TAKE PRECED ENCE IN CASE OF ANY VARIATION. THEREFORE, THE STAND OF THE APPELLAN T, IN RESPECT OF THE APPLICATION OF SECTION 50C, IS REJECTED. ITA NO. 538/HYD/2019 :- 6 -: 12.1 ON THE BASIS OF THE ADDITIONAL EVIDENCE FURNIS HED BY THE APPELLANT, IT IS SEEN THAT THE PROPERTY TRANSACTION UNDER CONSIDERATION, AND ALL PREVIOUS TRANSACTIONS IN RES PECT OF THE PROPERTY, HAVE BEEN DECLARED NULL AND VOID BY THE H ON'BLE SUPREME COURT VIDE ORDER DT.09.08.2017. THE PROPERTY NOW BE LONGS TO THE GOVERNMENT OF UNDIVIDED ANDHRA PRADESH AND THE VEND ORS, APPEARING IN THE SALE TRANSACTIONS, HAVE BEEN DECLA RED AS 'LAND GRABBERS'. 12.2 AS RIGHTLY POINTED OUT BY THE AO, THE FACT IS THAT THE APPELLANT ALREADY DERIVED CAPITAL GAINS EVEN THOUGH THE SALE TRANSACTION, RESULTING IN REALISATION OF CAPITAL GAINS, HAS NOW BEEN HELD TO BE ILLEGAL. THIS BASIC POSITION ON THE GROUND REMAINS UNALTERED AS THE SALE CONSIDERATION RECEIVED BY THE APPELLANT CONTIN UES TO REMAIN 'WITH THE APPELLANT. IT IS FOR THE APPELLANT TO DEMONSTRA TE THAT THE SALE CONSIDERATION ALREADY RECEIVED IS RETURNED BACK IN AN APPROPRIATE MANNER. THERE IS ALSO NOTHING ON RECORD TO SHOW THA T THE GOVERNMENT CONCERNED TOOK ANY ACTION IN PURSUANCE OF THE SAID ORDER OF THE HON 'BLE APEX COURT. 12.3 AS OF NOW, IT IS AN UNDISPUTED FACT THAT THE A PPELLANT ALREADY EARNED LONG TERM CAPITAL GAINS. EVEN IF THE RELATE D SALE TRANSACTION IS HELD TO BE ILLEGAL THE INCOME REALISED BY THE APPEL LANT IS STILL TAXABLE. IN THIS CONNECTION, IT IS ALSO SEEN THAT THE DECISI ONS CITED BY THE AO IE., CIT V K.THANGAMANI [2009] 309 ITR 15, [2009] 2 21 CTR 742 (MADRAS), K-P.G.B.U.G.M.S.S.A MOHAMMAD ABDUL KAREEM & CO. V CIT [1948] 16 ITR 412 (MADRAS) AND CIT V S.C. KOTHA RI [1968] 69 ITR 1 (GUJARAT) ARE APPLICABLE TO THE PRESENT CASE. 12.4 THERE IS NO MERIT IN THE OBJECTIONS RAISED BY THE APPELLANT. THE APPELLANT STATES THAT THERE IS NO CAPITAL GAIN AS T HERE IS NO VALID TRANSFER. THIS IS NOT THE CORRECT POSITION IN VIEW OF THE DISCUSSION MADE, AS ABOVE. EVEN IF THE TRANSFER IS INVALID, TH E INCOME ALREADY EARNED I.E., THE CAPITAL GAINS REALISED ARE STILL T AXABLE. THE APPELLANT STATED THAT THE DECISIONS, RELIED UPON BY THE AO, A RE NOT RELEVANT. THIS STATEMENT OF THE APPELLANT IS INCORRECT AS THE ESSENCE OF THE SAID DECISIONS IS THAT THE INCOME CAN BE TAXED EVEN IF T HE SAME IS NOT EARNED IN A LEGAL MANNER. 12.5 ALSO, THERE IS NO AMBIGUITY ABOUT THE HEAD OF THE INCOME IN THE PRESENT CASE. AS THE APPELLANT REALISED LONG TERM C APITAL GAINS, THE SAME WILL BE TAXED UNDER THE HEAD OF CAPITAL GAINS. IF AND WHEN THE SALE CONSIDERATION IS RETURNED BACK, IN AN APPROPRI ATE MANNER, AND THE DECISION OF THE HON'BLE APEX COURT IS IMPLEMENT ED, ON THE GROUND, THEN, THERE WILL BE NO CAPITAL GAINS TO BE TAXED. T HERE IS NO OTHER LEGALLY POSSIBLE SCENARIO AVAILABLE IN THE PRESENT SCHEME OF THINGS. 12.6 THE ARGUMENT OF THE APPELLANT THAT SECTION 50C WILL NOT APPLY IN THE ABSENCE OF OWNERSHIP IS WITHOUT ANY MERIT. BEFO RE THE HON'BLE ITA NO. 538/HYD/2019 :- 7 -: APEX COURT DECLARED THE SALE TRANSACTION AS ILLEGAL , THE APPELLANT HAD OWNERSHIP RIGHTS. THEREFORE, THE AO CORRECTLY APPLI ED SECTION 50C. AS ALREADY DISCUSSED ABOVE, THE APPELLANT GETS RELIEF FROM TAXATION OF CAPITAL GAINS ONLY WHEN THE SALE CONSIDERATION IS R ETURNED BACK IN AN APPROPRIATE MANNER. TILL SUCH TIME, THE CAPITAL GAI NS REALISED BY THE APPELLANT REMAINS TAXABLE. 12.7 THE APPELLANT ARGUED THAT AS THERE IS NO SALE TRANSACTION, THE AMOUNT HELD BY THE APPELLANT SHOULD BE TREATED AS A CAPITAL RECEIPT AND A DEBT OWED. THE APPELLANT ALSO ARGUED THAT TH E SALE CONSIDERATION RECEIVED CAN BE CONSTRUED AS AN ADVAN CE. THESE ARGUMENTS CANNOT BE ACCEPTED FOR THE SIMPLE REASON THAT THE NATURE OF THE RECEIPT, IN THE HANDS OF THE APPELLANT, IS A LREADY KNOWN AND CANNOT BE ARBITRARILY CHANGED. THERE IS NO LEGAL BA SIS FOR SUCH AN ATTEMPT. THE FACT OF THE MATTER IS THAT THERE WAS A SALE TRANSACTION WHICH RESULTED IN TAXABLE LONG TERM CAPITAL GAINS. ACCORDINGLY, THE GAINS WERE TAXED. MERE DECLARATION OF THE SALE TRAN SACTION, AS ILLEGAL, WILL NOT CHANGE THE POSITION IN RESPECT OF TAXABILI TY OF CAPITAL GAINS. ONLY WHEN THE APPELLANT PARTS WITH THE SALE CONSIDE RATION REALISED, THE QUESTION OF RELIEF FROM TAXATION OF CAPITAL GAI NS ARISES. 12.8 THE APPELLANT STATED THAT DENIAL OF RELIEF FRO M TAXING THE CAPITAL GAINS AMOUNTS TO RESTRICTIVE IMPLEMENTATION OF THE JUDGEMENT OF THE HON'BLE SUPREME COURT. INCOME EARNED, LEGALLY OR OT HERWISE, IS TAXABLE. THEREFORE, DENIAL OF RELIEF CANNOT BE SEEN AS RESTRICTIVE IMPLEMENTATION OF THE SAID DECISION. IT IS FOR THE GOVERNMENT CONCERNED AND THE PARTIES INVOLVED TO FOLLOW AND IM PLEMENT THE DECISION OF HON'BLE APEX COURT. IF THAT IS DONE AND THE SALE CONSIDERATION IS RETURNED BACK, THE QUESTION OF GRA NTING RELIEF ARISES. 12.9 CONSIDERING THE TOTALITY OF FACTS AND CIRCUMST ANCES, THESE GROUNDS OF APPEAL ARE DISMISSED. 13. IN THE RESULT, THE APPEAL STANDS DISMISSED. 5. A PERUSAL OF THE FOREGOING DETAILED LOWER APPELLAT E DISCUSSION MAKES IT CLEAR THAT THE ISSUE RELATES TO TITLE OF THE ASSESSEES CAPITAL ASSET I.E., PLOT OF LAND MEASURING 935 SQ. YARDS IN MUNICIPAL NO.8-2-686/13 IN SURVEY NO.129 ( OLD), 403 (NEW), SHAIKPET VILLAGE AT ROAD NO.12, BANJARA HILLS , HYDERABAD TO THE EXTENT OF SHARE INVOLVING POA CUM POSSESSION EXECUTED ON 17-11-2007 FORMING SUBJECT MA TTER OF ADJUDICATION BEFORE HON'BLE APEX COURT. THEIR LORDSH IPS DECISION DT.09-08-2017 UN-DISPUTEDLY HELD THEREIN TH E ORIGINAL ITA NO. 538/HYD/2019 :- 8 -: OWNER OF THE CAPITAL ASSET / ASSESSEES VENDOR TO BE A LAND GRABBER ONLY. THE NECESSARY COROLLARY THAT FLOWS THERE FORE IS THAT ALL THE SUBSEQUENT VENDORS AS WELL AS VENDEES (INC LUDING ASSESSEE) HAVE TO BE TREATED AS MERE TRESS-PASSERS HAVI NG NO RIGHT OR TITLE OVER THE LAND. THAT BEING THE CASE, WE CONCLUDE THAT THE LEARNED LOWER AUTHORITIES ACTION ASSESSING THE ASSESSEES CONSIDERATION MONEY IN ISSUE UNDER THE HEA D LONG TERM CAPITAL GAINS AFTER INVOKING SECTION 50C OF THE AC T HAS NO LEGS TO STAND. WE THUS DELETE THE IMPUGNED LONG TERM CA PITAL GAIN ADDITION OF RS.1,36,33,062/- FOR THIS PRECISE RE ASON ALONE. 6. LEARNED DEPARTMENTAL REPRESENTATIVE NEXT ARGUED THAT THE ASSESSEE HAS ADMITTEDLY RECEIVED THE IMPUGNED SALE CONSIDERATION FROM HER VENDEE(S) WHICH DESERVES TO BE ASSESSED AS UNDER THE RESIDUARY HEAD OF INCOME FROM OTHER SOURCES. WE THEREFORE LEAVE IT OPEN FOR THE DEPARTMENTAL AUTHORITIES TO PROCEED AGAINST THE ASSESSEE AS PER LAW SO AS TO ASSESS THE IMPUGNED SUM IN HER HANDS. IT IS FURTHER MA DE CLEAR THAT OUR INSTANT LIBERTY GRANTED TO THE DEPARTMENT SH ALL NOT PRECLUDE THE ASSESSEE FROM RAISING ALL HER LEGAL/ FACTUAL ARGUMENTS IN CONSEQUENTIAL PROCEEDINGS; IF ANY. 7. THIS ASSESSEES APPEAL IS ALLOWED IN ABOVE TERMS. ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH SEPTEMBER, 2021 SD/- SD/- (LAXMI PRASAD SAHU) (S.S.G ODARA) ACCOUNTANT MEMBER JUDICIAL MEM BER HYDERABAD, DATED: 14-09-2021 TNMM ITA NO. 538/HYD/2019 :- 9 -: COPY TO : 1.SMT.PADMAVATHI REDDY, C/O.GPA HOLDER SRI G.MURALI KRISHNA REDDY; C/O.CH.PARTHASARATHY & CO., 1-1-298/2/B/3, 1 ST FLOOR, ASHOKNAGAR, HYDERABAD. 2.DY.COMMISSIONER OF INCOME TAX-1, INTERNATIONAL TA XATION HYDERABAD. 3.CIT(APPEALS)-10, HYDERABAD. 4.CIT(IT&TP)-HYDERABAD. 5.D.R. ITAT, HYDERABAD. 6.GUARD FILE.