Dy.Commissioner of Income Tax, Mohali V. M/s Surinder Singh House No 1721, Mohali

ITA 560/CHANDI/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 95555 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 10-09-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 21-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Assessee Lawyers: N K SAINI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS. RANO JAIN, ACCOUNTANT MEMBER ITA NO. 560/CHD/2015 ASSESSMENT YEAR: 2008-09 THE DCIT, VS M/S SURINDER SINGH, CIRCLE 6(1), HOUSE NO. 1721, MOHALI. PHASE 7, MOHALI. PAN: BMSPS4024H (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI MANJIT SINGH RESPONDENT BY : SHRI N.K.SAINI DATE OF HEARING : 10.09.2015 DATE OF PRONOUNCEMENT : 16.09.2015 O R D E R PER BHAVNESH SAINI,JM THIS APPEAL BY REVENUE IS DIRECTED AGAINST THE ORDER OF LD. CIT(APPEALS)-2 CHANDIGARH DATED 02.03. 2015 FOR ASSESSMENT YEAR 2008-09 CHALLENGING THE CANCELLATION OF PENALTY UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT. 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE WA S A MEMBER OF M/S DEFENCE SERVICES COOPERATIVE HOUSE BUILDING SOCIETY LTD., MOHALI (HEREINAFTER REFERRED TO AS 2 SOCIETY) WHICH WAS THE OWNER OF 27.3 ACRES OF LAN D IN VILLAGE KANSAL, DISTRICT MOHALI. THIS SOCIETY ENTE RED INTO A TRIPARTITE JOINT DEVELOPMENT AGREEMENT ON 27.04.2007 WITH M/S HASH BUILDERS (PVT.) LTD. AND M /S TATA HOUSING DEVELOPMENT COMPANY LTD., MUMBAI BY VIRTUE OF WHICH THE SOCIETY WOULD TRANSFER ITS LAND FOR DEVELOPMENT IN LIEU OF MONETARY CONSIDERATION AND A LSO CONSIDERATION IN KIND TO THE MEMBERS OF THE SOCIETY . THE ASSESSEE WAS A MEMBER OF THE SAID SOCIETY, OWNI NG 250 SQ. YARDS LAND. THE TOTAL CONSIDERATION WAS SET TLED AT RS. 40,75,000/- PLUS ALLOTMENT OF ONE FLAT OF 11 50 SQ. FEET TO THE ASSESSEE, OUT OF WHICH THE ASSESSEE HAD RECEIVED RS. 16.30 LACS. THE ASSESSEE FURNISHED RET URN OF INCOME FOR THE ASSESSMENT YEAR UNDER APPEAL DECLARING LONG TERM CAPITAL GAIN OF RS. 12,70,961/- AND INCOME FROM OTHER SOURCES AT RS. 31,865/-. THE ASSESSING OFFICER NOTED THAT AS PER THE AGREEMENT D ATED 27.04.2007, AS MEMBER OF THE SOCIETY, THE ASSESSEE WAS TO RECEIVE RS. 40,75,000/- IN CASH AND A FURNISHED FLAT WITH MARKET VALUE OF RS. 51,75,500/-. THUS, THE TOT AL CONSIDERATION FOR TRANSFER OF PLOT CAME TO RS. 92,50,000/-. THE ASSESSING OFFICER COMPUTED THE INC OME OF THE APPELLANT BY WAY OF CAPITAL GAINS BY ADOPTIN G THIS AMOUNT AS SALE CONSIDERATION. FINALLY, THE ASSESSME NT WAS MADE BY TAKING LONG TERM CAPITAL GAINS AT RS. 88,90,961/-. THE ASSESSING OFFICER VIDE SEPARATE ORDER LEVIED THE PENALTY. 3 3. THE PENALTY ORDER WAS CHALLENGED BEFORE LD. CIT(APPEALS). THE LD. CIT(APPEALS) CONSIDERING THE FACTS OF THE CASE AND MATERIAL ON RECORD, NOTED THAT THE VIEW TAKEN BY THE ASSESSING OFFICER THAT THE AMOUNT OF CAPITAL GAINS HAS TO BE COMPUTED BY TAKING THE TOTA L CONSIDERATION ACTUALLY RECEIVED OR RECEIVABLE BY TH E ASSESSEE AS SALE CONSIDERATION AND THAT THE TOTAL AMOUNT OF CAPITAL GAIN IS ASSESSABLE AS INCOME OF T HE YEAR UNDER APPEAL, HAS BEEN UPHELD BY THE TRIBUNAL. THE LD. CIT(APPEALS) FOUND THE EXPLANATION OF THE ASSESSEE TO BE BONAFIDE BECAUSE WHATEVER SALE CONSIDERATION WAS ACTUALLY RECEIVED DURING THE PREV IOUS YEAR, WAS SHOWN AS CAPITAL GAIN AND ACCORDINGLY, IT WAS FOUND THAT IT IS NOT A FIT CASE FOR LEVY OF PENALTY FOR CONCEALMENT OF INCOME AND ACCORDINGLY, CANCELLED TH E PENALTY AND ALLOWED THE APPEAL OF THE ASSESSEE. 4. THE LD. COUNSEL FOR THE ASSESSEE, AT THE OUTSET SUBMITTED THAT THE ASSESSEE PREFERRED APPEAL AGAINS T QUANTUM ORDER OF THE TRIBUNAL BEFORE HON'BLE PUNJAB & HARYANA HIGH COURT IN ITA 273 OF 2013 AND APPEAL OF THE ASSESSEE HAS BEEN ALLOWED BY THE HIGH COURT VID E ORDER DATED 22.07.2015 BY FOLLOWING JUDGEMENT IN TH E CASE OF C.S.ATWAL V CIT. HE HAS ALSO FILED COPY OF THE ORDER OF THE HIGH COURT IN THE CASE OF ASSESSEE AND IN THE CASE OF C.S.ATWAL IN WHICH THE HON'BLE HIGH COU RT HELD THAT THE AGREEMENT DOES NOT FALL UNDER SECTION 53A OF TRANSFER OF PROPERTY ACT AND CONSEQUENTLY, SECTI ON 4 2(47(V) OF INCOME TAX ACT DOES NOT APPLY. WHATEVER AMOUNT WAS RECEIVED BY THE ASSESSEE, CAPITAL GAIN H AS ALREADY BEEN DECLARED AND TAXES PAID. THE ISSUE OF EXIGIBILITY TO CAPITAL GAIN HAS ALREADY BEEN DECIDE D IN FAVOUR OF THE ASSESSEE. THE LD. COUNSEL FOR THE ASS ESSEE, THEREFORE, SUBMITTED THAT SINCE QUANTUM MATTER IS DECIDED IN FAVOUR OF THE ASSESSEE, DEPARTMENTAL APP EAL HAS NO MERIT. 5. THE LD. DR, ON GOING THROUGH THE JUDGEMENT OF TH E HON'BLE HIGH COURT, COULD NOT CONTRIBUTE ANYTHING O N THE ISSUE. 6. ON CONSIDERATION OF THE FACTS OF THE CASE IN THE LIGHT OF THE JUDGEMENT OF THE HIGH COURT, IT IS CLE AR THAT THE CASE OF THE ASSESSEE WOULD NOT FALL UNDER SECTI ON 53A OF THE TRANSFER OF PROPERTY ACT AND CONSEQUENTL Y, SECTION 2(47)(V) OF THE ACT WOULD NOT APPLY IN THE CASE OF THE ASSESSEE AS PER JUDGEMENT OF THE HON'BLE HIGH COURT. WHATEVER AMOUNT WAS RECEIVED BY ASSESSEE, CAPITAL GAIN TAX HAS ALREADY BEEN PAID ON THE SAME. SINCE THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY HON'BLE HIGH COURT, THEREFORE, NOTHING SURVIVES IN FAVOUR OF THE REVENUE TO LEVY THE PENAL TY. THE ITAT CHANDIGARH BENCH IN THE CASE OF ITO VS BALWINDER SINGH DHILLON IN ITA 1140/2014 VIDE ORDER DATED 03.08.2015 ON IDENTICAL FACTS CONFIRMED THE O RDER OF LD. CIT(APPEALS) IN CANCELING THE PENALTY AND DISMISSED APPEAL OF THE REVENUE. COPY OF THE ORDER IS 5 PLACED ON RECORD. THE LD. CIT(APPEALS) WAS, THEREF ORE, JUSTIFIED IN CANCELING THE PENALTY. 7. IN THE RESULT, DEPARTMENTAL APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- ` SD/- (RANO JAIN) (BHAVNE SH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 16 TH SEPTEMBER, 2015. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT CHANDIGARH