ITO, New Delhi V. Sh. Dharam Pal Vig, New Delhi

ITA 5563/DEL/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 97887 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 30-10-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 02-11-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KESANG Y SHIRPA
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Opportunity of being heard
• Section: 50C; 142(1); 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH B , NEW DELHI) BEFORE SHRI N. K. SAINI, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER I.T.A. NO.5563 /DEL/2012 ASSESSMENT YEAR : 2009-10 ITO, WARD 25(3), VS. SH. DHARAM PAL VIG, NEW DELHI 29/35, PUNJABI BAGH, NEW DELHI GIR / PAN:AABPV2548R (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI KESANG Y SHIRPA, SR. DR RESPONDENT BY : SHRI VIPIN JAIN, CA DATE OF HEARING : 30.10.2015 DATE OF PRONOUNCEMENT : 20/11/2015 ORDER PER KULDIP SINGH, JM: THE APPELLANT, ITO, WARD 25(3), NEW DELHI, BY FILI NG THE PRESENT APPEAL, SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATE D 23.08.2012 PASSED BY LD. CIT(A)- XXIV, NEW DELHI FOR THE A.Y. 2009-10, D ELETING THE ADDITION OF RS.24,07,290/- BEING SHORT TERM CAPITAL GAIN ON SALE OF PROPERTY, ON THE GROUNDS INTER ALIA THAT: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) HAS ERRED IN: I) DELETING THE ADDITION OF RS.24,07,290/- BEING SHORT TERM CAPITAL GAIN ON SALE OF IMMOVABLE PROPERTY. II) IN HOLDING THAT APPELLANT WAS ONLY GPA HOLDER AND PROVISIONS OF SECTION 50C DO NOT APPLY IN THE CASE OF THE APPELLANT. ITA NO.5563/DEL/2012 2 2. BRIEFLY STATED THE FACTS OF THIS CASE ARE THAT D URING THE PROCESSING OF RETURN OF INCOME FILED BY THE ASSESSEE DECLARING IN COME OF RS.7,85,780/- FOR THE A.Y. 2009-10, THE CASE OF ASSESSEE WAS SUBJECTE D TO SCRUTINY AND CONSEQUENTLY, NOTICES U/S 143(2) AND 142(1) OF THE ACT WERE ISSUED AND IN RESPONSE THERETO, SHRI VIPIN JAIN, CA FILED REQUISI TE DETAILS ALONG WITH SUPPORTING DOCUMENTS AND ATTENDED THE PROCEEDINGS F ROM TIME TO TIME. ON RECEIPT OF INFORMATION FROM SUB-REGISTRAR JAIPUR V, 1, JAI SINGH HIGHWAY, BANIPARK, JAIPUR TO THE EFFECT THAT THE ASSESSEE HA S SOLD IMMOVABLE PROPERTY FOR A CONSIDERATION OF RS.1,15,98,850/- WHEREAS NO SUCH SALE OF PROPERTY WAS DISCLOSED BY THE ASSESSEE IN HIS RETURN OF INCOME A VAILABLE ON RECORD, THE ASSESSEE WAS CALLED UPON TO EXPLAIN AS TO WHY THE C APITAL GAIN SHOULD NOT BE COMPUTED ON THE BASIS OF CIRCLE RATE SHOWN IN THE S ALE DEED, WHO (ASSESSEE) HAS REPLIED AS UNDER: 1 SH. PADAM KUMAR, MAHESH KUMAR, ANIL KUMAR & SHI KHAR CHAND ALL SONS OF SH. / GCPI CHAND, AND ALL RESIDE NT OF VILLAGE KESHU PURA, TEHSIL SANGANER, DISTT JAIPUR (RAJASTHA N), HERE-IN-AFTER COLLECTIVELY KNOWN (1S THE ORIGINAL O\VNERS OWNED C ERTAIN AGRICULTURE LAND AT VILLAGE KCSHU PURA, TEHSIL SANG ANER, DISTT JAIPURRKAJASTHAN), WHICH CAME UNDER ACQUISITION BY THE RAJASTHAN GOVT., FOR WHICH THE PERSONS NAMED ABOVE WERE PAID COMPENSATION PARTLY IN MONETARY TERMS AND PARTLY BY ALLOTMENT (I F ALTERNATE LAND BY THE RAJASTHAN GOVT. WHICH WAS AVAILABLE [OR DEVELOP MENT FOR NON COMMERCIAL PURPOSES, HERE-IN-AFTER REFERRED TO AS T HE PROPERTY. 2. THE OR1GINAL OWNERS ABOVE THEN ENTERED INTO AN AGREEMENT FOR SALE OF THE PROPERTY IN QUESTION ABOV E WITH ONE MIS PAL MOHAN DEVELOPERS PVT. LTD. (COLON1ZERS) HAVING OFFICE AT 15-AJS, WEA KAROL BAGH, NEW DELHI- 110005. 3. THAT IN THE MEANTIME, SOMETIME IN AUGUST/SEPTEMB ER 2006, THE ASSESSEE SH. DHARAM PAL VIG ENTERED INTO AN AGREEME NT WITH M/S PAL MOHAN DEVELOPERS PVT. LTD., ABOVE, FOR PURCHASE OF A PORTION OF THE ITA NO.5563/DEL/2012 3 PROPERTY ABOVE FOR A TOTAL CONSIDERATION OF RS.68,6 4,000/-, AND PAID THE PURCHASE CONSIDERATION AS UNDER:- (I) RS.50,00,000/- ON 11.08.2006 FROM ACCOUNT NO.54 S-1-006138-1 WITH STANDARD CHARTERED BANK, PUNJABI BAGH BRANCH, NEW DELHI. COPY OF BANK STATEMENT FROM WHERE THE ASSESSEE PAID THIS SUM IS FILED AT PAGE 3. (II) RS. 18,64.000/- ON 12.09.2006 FROM CURRENT AC COUNT WITH DENA BANK, NEW DELHI, IN THE NAME OF M/S. BHARAT P ETROLEUM, THEN SOLE PROPRIETOR FIRM OF THE ASSESSEE SH. DHARAM PAL VIG. COPY OF THE BANK STATEMENT FROM WHERE THE ASSESSEE PAID THIS SU M IS FILED AT PAGE 4. (III) THERE ARE CERTAIN PROCEDURAL DELAYS AT THE E ND OF THE RAJASTHAN GOVT. IN GRANTING NECESSARY CLEARANCES AND IN HANDI NG OVER POSSESSION OF THE PROPERTY IN QUESTION TO THE ASSES SEE AND TO PAL MOHAN DEVELOPERS P\T. LTD., AND TILL DATE THE POSSE SSION OF TEE PROPERTY IN QUESTION HAS NOT BEEN MADE. IV) THE ASSESSEE HAD THE PROPERTY IN THE NAME OF M/S GO LDEN EDGE FABTECH PVT. LTD., A BODY CORPORATE IN WHICH H E AND HIS FAMILY MEMBERS HAVE 100% INTEREST/CONTROL, GOLDEN EDGE FAB TECH ?VT. LTD, HAS ITS REGISTERED OFFICE AT 29/35 PUNJABI BAGH, NE W DELHI. IT IS ASSESSED UNDER PAN:AACCG8075G. DIRECTORS OF GOLDEN EDGE FABTECH ARE AS UNDER:- A) SH. MOHIT VIG (ELDER SON OF THE ASSESSEE) (B) SH. ABHISHEK VIG (YOUNGER SON OF THE ASSESSEE) SHAREHOLDERS OF GODEN EDGE FABTECH ARE AS UNDER: A) SH. MOHIT VIG (ELDER SON OF THE ASSESSEE) (B) SH. ABHISHEK VIG (YOUNGER SON OF THE ASSESSEE) (C) SMT. RATULA VIG (WIFE OF SH. ABHISHEK VIG ABOVE ) FROM THE ABOVE IT IS ABUNDANTLY CLEAR THAT THE ASSE SSEE HAD PAID FOR THE PURCHASE CONSIDERATION OF THE PROPERTY FROM HIS PERSONAL RESOURCES IN THE YEAR 2006 AND THE PROPERTY WAS GOT REGISTERED IN THE NAME OF THE BODY CORPORATE ABOVE. THERE IS NO CAPIT AL GAIN/RESULTING TO THE ASSESSEE.' ITA NO.5563/DEL/2012 4 3. THE ASSESSEE HIMSELF HAS ADMITTED THAT THE PROPE RTY WAS PURCHASED BY HIM OUT OF HIS PERSONAL FUNDS AND LATER ON TRANSFER RED TO THE SAID COMPANY WITHOUT ANY CONSIDERATION. SINCE THE ASSESSEE HAS PURCHASED THE PROPERTY FROM M/S. PAL MOHAN DEVELOPERS AND NOT FROM ITS ORI GINAL OWNER, AS PER NOTE SHEET ENTRY DATED 22.12.2011, HE WAS ASKED TO PRODUCE COPY OF AGREEMENT WITH M/S. PAL MOHAN DEVELOPERS PVT. LTD. THE RIGHTS IN THE CAPITAL IN QUESTION WAS PURCHASED BY THE ASSESSEE T HROUGH POA AND THERE IS NO DIFFERENCE THAT THE SALE DEED WAS NOT REGISTERED IN THE NAME OF THE ASSESSEE U/S 2(47)(V) OF THE ACT AND TRANSFER IN RE LATION TO CAPITAL ASSET INCLUDED ANY TRANSACTION INVOLVING THE ALLOWING OF THE POSSESSION OF ANY IMMOVABLE PROPERTY TO BE TAKEN OR RETAINED IN PART PERFORMANCE OF A CONTRACT OF THE NATURE REFERRED TO IN SECTION 53A OF THE TRA NSFER OF PROPERTY ACT, 1882 (4 OF 1882). 4. THE A.O. BY INVOKING THE PROVISIONS CONTAINED U/ S50C(1) VALUED THE PROPERTY TRANSFERRED BY ASSESSEE TO M/S. GOLDEN EDG E FAB TECH CO. BY THE ASSESSEE AT RS.92,71,290/- AS AGAINST RS.68,64,000/ - DECLARED BY THE ASSESSEE AND NO CAPITAL GAIN SHOWN, AND WORKED OUT THE SHORT TERM CAPITAL GAIN ON TRANSFER OF CAPITAL ASSET AS UNDER: SALE CONSIDERATION AS PER STAMP VALUATION AUTHORIT Y RS.92,71,290/- LESS: COST OF PURCHASE RS.68,64,000/- SHORT TERM CAPITAL GAIN RS.24,07,290/- CONSEQUENTLY A.O. MADE ADDITION OF RS.24,07,290/-. 5. THE ASSESSEE CARRIED THE ASSESSMENT ORDER BEFORE LD. CIT(A) WHO HAS PARTLY ALLOWED THE APPEAL. FEELING AGGRIEVED, THE REVENUE HAS COME UP BEFORE THE TRIBUNAL BY WAY OF FILING THE PRESENT AP PEAL. ITA NO.5563/DEL/2012 5 6. LD. D.R. CHALLENGING THE IMPUGNED ORDER CONTENDE D THAT THE ORIGINAL OWNER OF THE PROPERTY IN QUESTION I.E. ASSESSEE WAS UNDER OBLIGATION TO PAY THE CAPITAL GAIN AND THE LD. CIT(A) HAS WRONGLY HEL D THAT THE TRANSACTION DID NOT COME IN THE AMBIT OF THE PROVISIONS CONTAINED U /S 50C OF THE ACT AND RELIED UPON THE ORDER PASSED BY THE A.O. 7. ON THE OTHER HAND, LD. A.R. CONTENDED THAT THE A .O. HAS ARBITRARILY PASSED THE ORDER WITHOUT DETERMINING THE FACT AS TO WHO HAS PAID THE SALE CONSIDERATION AND AGAIN WHO HAS OFFERED THE AMOUNT FOR TAX AND PRAYED FOR ALLOWING THE APPEAL. 8. NOW, THE SOLE QUESTION ARISES FOR DETERMINATION IN THIS CASE IS, AS TO WHETHER LD. CIT(A) HAS ERRED IN DELETING THE ADDITI ON OF RS.24,07,290/- BEING SHORT TERM CAPITAL GAIN ADDED BY A.O. BY INVO KING PROVISIONS CONTAINED U/S 50C OF THE ACT . 9. FOR FACILITY OF REFERENCE, PROVISIONS CONTAINED U/S 50C OF THE ACT ARE REPRODUCED AS UNDER: 50C. (1) WHERE THE CONSIDERATION RECEIVED OR ACCRU ING AS A RESULT OF THE TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET, BEI NG LAND OR BUILDING OR BOTH, IS LESS THAN THE VALUE ADOPTED OR ASSESSED 1L[ OR ASSESSABLE] BY ANY AUTHORITY OF A STATE GOVERNMENT (HEREAFTER I N THIS SECTION REFERRED TO AS THE 'STAMP VALUATION AUTHORITY') FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THE VALUE SO ADOPTED OR ASSESSED II [OR ASSESSABLE] SHALL, FOR T HE PURPOSES OF SECTION 48, BE DEEMED TO BE THE FULL VALUE OF THE C ONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF SUCH TRANSFER. (2) WITHOUT PREJUDICE TO THE PROVISIONS OF SUB-SECT ION (1), WHERE- (A) THE ASSESSEE CLAIMS BEFORE ANY ASSESSING OFFICE R THAT THE VALUE ADOPTED OR ASSESSED II[ OR ASSESSABLE] BY THE STAMP VALUATION AUTHORITY UNDER SUB-SECTION (1) EXCEEDS THE FAIR MA RKET VALUE OF THE PROPERTY AS ON THE DATE OF TRANSFER; ITA NO.5563/DEL/2012 6 (B) THE VALUE SO ADOPTED OR ASSESSED '[OR ASSESSABL E] BY THE STAMP VALUATION AUTHORITY UNDER SUB-SECTION (1) HAS NOT B EEN DISPUTED IN ANY APPEAL OR REVISION OR NO REFERENCE HAS BEEN MADE BE FORE ANY OTHER AUTHORITY, COURT OR THE HIGH COURT, THE ASSESSING O FFICER MAY REFER THE VALUATION OF THE CAPITAL ASSET TO A VALUATION OFFIC ER AND WHERE ANY SUCH REFERENCE IS MADE, THE PROVISIONS OF SUB-SECTI ONS (2), (3), (4), (5) AND (6) OF SECTION 16A, CLAUSE (L) SUB-SECTION (1) AND SUB-SECTIONS (6) AND (7) OF SECTION 23A, SUB-SECTION (5) OF SECTION 24, SECTION 34AA, SECTION 35 AND SECTION 37 OF THE WEALTH-TAX ACT, 19 57 (27 OF 1957), SHALL, WITH NECESSARY MODIFICATIONS, APPLY IN RELAT ION TO SUCH REFERENCE AS THEY APPLY IN RELATION TO A REFERENCE MADE BY THE ASSESSING OFFICER UNDER SUB-SECTION (1) OF SECTION 16A OF THE ACT. 10. LD. CIT(A) IN PARA 4.6 OF THE IMPUGNED ORDER HE LD THAT THE PROVISIONS OF SECTION 50C WOULD NOT APPLY IN CASE OF APPELLANT SINCE THE PROPERTY IN QUESTION HAS NEVER BEEN REGISTERED IN HIS NAME AS A SSESSEE WAS A MERE ATTORNEY OF ORIGINAL OWNER NAMELY S/SHRI PADAM KUMA R, MAHESH KUMAR, ANIL KUMAR AND SHIKHAR CHAND, DESPITE ADMITTING FAC T THAT ASSESSEE HAD PAID THE AMOUNT OF RS.68,64,000/- OUT OF HIS OWN PO CKET TO M/S. PAL MOHAN DEVELOPERS PVT. LTD. AND RULED OUT THE APPLICABILIT Y OF SECTION 50C OF THE ACT. 11. WHEN ADMITTEDLY THE SALE DEED WAS EXECUTED BY T HE ASSESSEE, SHRI DHARAMPAL VIG, THOUGH AS ATTORNEY OF THE ORIGINAL L AND OWNER AND ADMITTEDLY PAID THE SALE CONSIDERATION OF RS.68,64, 000/- BY VIRTUE OF THE POWER OF ATTORNEY OUT OF HIS OWN POCKET, IT IS DIFF ICULT TO BELIEVE THAT ASSESSEE WAS NOT OWNER OF THE LAND IN QUESTION. TH E QUESTION REQUIRED TO BE DETERMINED FIRSTLY BY THE A.O. AND THEN BY LD. CIT( A) WAS AS TO WHO HAS OFFERED THE AMOUNT TO PAY CAPITAL GAIN. ASSESSMENT ORDER AS WELL AS THE IMPUGNED ORDER, ARE SILENT AS TO WHO HAS PAID THE C APITAL GAIN IN THIS CASE. IN THE FACE OF ADMITTED FACT THAT THE ASSESSEE TRANSFE RRED THE LAND IN QUESTION, ITA NO.5563/DEL/2012 7 THOUGH AS ATTORNEY, ACQUIRED BY MAKING PAYMENT OF R S.68,64,000/- OUT OF HIS OWN POCKET TO THE ORIGINAL OWNERS NAMELY SHRI PADAM KUMAR AND OTHERS. WITHOUT DETERMINING THE FACT THAT AS TO WHO HAS PA ID THE SALE CONSIDERATION ON BEHALF OF M/S. GOLDEN EDGE FABTECH PVT. LTD., I NVOKING THE PROVISIONS CONTAINED U/S 50C(1) OF THE ACT IS A PERVERSITY WHI CH REQUIRES TO BE RECTIFIED. 12. WHEN THE A.O., ON THE BASIS OF ADMITTED FACT T HAT THE PROPERTY IN QUESTION WAS PURCHASED BY THE ASSESSEE OUT OF HIS P ERSONAL FUNDS AND SUBSEQUENTLY TRANSFERRED TO M/S. GOLDEN EDGE FABTEC H PVT. LTD, MERE STATEMENT OF THE ASSESSEE BEFORE CIT(A) THAT HE HAS TRANSFERRED THE SAID PROPERTY WITHOUT ANY CONSIDERATION IS NOT ENOUGH TO APPLY THE PROVISIONS CONTAINED U/S 50C OF THE ACT. EVEN OTHERWISE, THE LD. CIT(A) HAS NOT DETERMINED AS TO HOW THE LAND IN QUESTION HAS BEEN TRANSFERRED IN THE NAME OF M/S. GOLDEN EDGE FABTECH PVT. LTD., A JURISTIC P ERSON, WITHOUT CONSIDERATION. SO, WE ARE OF THE CONSIDERED VIEW T HAT THE MATTER IS REQUIRED TO BE RESTORED TO THE A.O. TO DETERMINE THE CRUCIAL ISSUE AS TO WHO HAS ACTUALLY PAID THE SALE CONSIDERATION TO FURTHER PRO CEED WITH THE MATTER. 12. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, WE HE REBY ALLOW THE APPEAL FILED BY REVENUE FOR STATISTICAL PURPOSE WITH ORDER TO RESTORE THE CASE BACK TO THE A.O. TO DECIDE THE MATTER AFRESH AFTER PROVIDIN G ADEQUATE OPPORTUNITY OF BEING HEARD TO THE PARTIES. 13. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH NOV., 2015. SD./- SD./- ( N. K. SAINI) (KULDIP SIN GH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 20.11.2015 SP ITA NO.5563/DEL/2012 8 COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER (ITAT, NEW DELHI). S.NO. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 17/11 SR. PS/PS 2 DRAFT PLACED BEFORE AUTHOR 17,19,20/11 SR. PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/AM 5 APPROVED DRAFT COMES TO THE SR. PS/PS 20/11/15 SR. PS/PS 6 KEPT FOR PRONOUNCEMENT 20/11 SR. PS/PS 7 FILE SENT TO BENCH CLERK 20/11 SR. PS/PS 8 DATE ON WHICH THE FILE GOES TO HEAD CLERK 9 DATE ON WHICH FILE GOES TO A.R. 10 DATE OF DISPATCH OF ORDER