Ms. Shivani, Panchkula V. ITO, Ambala

ITA 574/CHANDI/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68418 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 17-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J S NAGAR
• Keywords: Capital asset; Principle of natural justice
• Section: 2(14)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES B CHANDIGARH BEFORE SHRI T.R. SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO. 574/CHD/2013 ASSESSMENT YEAR: 2009-10 M/S SHIVANI, VS. THE ITO L/H OF LATE SHRI. SHASHI PAL GUPTA WARD-2 PANCHKULA, HARYANA AMBALA, PAN NO. AJCPG1820F (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI NEERAJ JAIN RESPONDENT BY : SHRI J.S.NAGAR DATE OF HEARING : 13/08/2013 DATE OF PRONOUNCEMENT : 23/08/2013 ORDER PER T.R.SOOD, A.M. THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINS T THE ORDER PASSED BY THE CIT(A), PANCHKULA DATED 30.4.2013. 2. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLO WING GROUNDS:- 1. THAT THE LD. CIT(A) IS NOT JUSTIFIED IN NOT PRO VIDING THE PROPER OPPORTUNITY OF HEARING WHICH IS AGAINST THE NATURAL JUSTICE AND THE ORDER PASSED BY LD. CIT(A) U/S. 271(1)(C) BE QUASHED. 2. THAT THE LD. CIT(A) IS NOT JUSTIFIED IN INVOKIN G THE PROVISIONS OF SECTION 271 (1)(C) FOR LEVYING THE PENALTY. 3. THAT THE LD. CIT(A) IS NOT JUSTIFIED IN LEVYING THE PENALTY AMOUNTING TO RS. 3,73,000.00 4. THAT WITHOUT PREJUDICE TO ABOVE GROUNDS OF APPE ALS, THE APPELLANT DISPUTES THE QUANTUM OF PENALTY. 2 4. AFTER HEARING BOTH THE PARTIES WE FIND THAT DURI NG ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER HAD NOTICED THAT ASSESSEE HAD DEPOSITED A SUM OF RS. 17 LAKHS AND RS. 28 LAKHS IN CASH IN HIS SAVING BANK ACCOUNT. ON QUERY, IT WAS SUBMITTED THAT THE AMOUNT WAS DEPOSIT ED ON SALE OF HOUSE. THE ASSESSING OFFICER AFTER DETAILED DISCUSSION SUBJECT ED THE SALE CONSIDERATION TO CAPITAL GAIN TAX AND THE CAPITAL GAIN WAS COMPU TED AT RS. 32,90,000/-. WHEN ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) OBJ ECTING TO THIS ADDITION, THE NATURE OF ADDITION WAS CHANGED TO INCOME FROM OTHER SOURCES BECAUSE ACCORDING TO LD. CIT(A) SINCE ASSESSEE HAS NOT PROD UCED ANY SALE DEED, THEREFORE, THE CASH DEPOSIT IS TO BE TREATED AS INC OME FROM OTHER SOURCES. THUS INCOME WAS ENHANCED BY RS. 12,10,000/-. THE LD. CIT(A) FURTHER LEVIED A PENALTY ON THIS ENHANCED AMOUNT OF INCOME U/S 271(1) (C) OF THE ACT AND AT THE MINIMUM RATE OF 100% AMOUNTING TO RS. 3, 73,000/-. 5. BEFORE US, LD. COUNSEL FOR THE ASSESSEE SUBMITT ED THAT ENHANCED AMOUNT OF INCOME HAS ALREADY BEEN DELETED BY THE TR IBUNAL IN ITA NO. 1225/CHD/2012, THEREFORE, PENALTY PROCEEDINGS WILL NOT SURVIVE. 6. ON THE OTHER HAND, LD. DR SUPPORTED THE ORDER O F CIT(A). 7. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE FIND THAT THIS ISSUE HAS BEEN ADJUDICATED BY THE TRIBUNAL IN ASSESSEES OWN CASE RELATING TO ASSESSMENT YEAR 2009-10 IN ITA NO. 1225/CHD/2012 IN PARA NO.9. THE RELEVANT PORTION OF I.E. PARA 9 READS AS UNDER:- 9 AFTER CONSIDERING THE RIVAL SUBMISSIONS WE REPRO DUCE SECTION 45 WHICH IS AS UNDER: 3 45(1) ANY PROFITS OR GAINS ARISING FROM THE TRANSF ER OF CAPITAL ASSET EFFECTED IN THE PREVIOUS YEAR SHAL L, SAVE AS OTHERWISE PROVIDED IN SECTIONS54, 54B, 54D, 54E, 54EA, 54EB, 54FM 54G AND 54H BE CHARGEABLE TO INCOM E TAX UNDER THE HEAD CAPITAL GAINS AND SHALL BE DEE MED TO BE THE INCOME OF THE PREVIOUS YEAR IN WHICH THE TRANSFER TOOK PLACE. PLAIN READING OF ABOVE PROVISION SHOWS THAT ONE OF THE MOST IMPORTANT INGREDIENT FOR CHARGING PROFIT AND GAINS FROM TRANSFER OF AN ASSET IS THAT THERE SHOULD BE A CAPITAL ASSET AND THE SAME HAS BEEN TRANSFERRED DURING THE YEAR. IT CANNOT BE DENIED THAT HOUSE WOULD CONSTITUTE CAPITAL ASSET U/S 2(14) OF T HE ACT. SECTION 2(47) WHICH DEALS WITH THE TRANSFER READS A S UNDER: SECTION 2(47) TRANSFER, IN RELATION TO A CAPITAL ASSET, INCLUDES - (I) TO (IV) (V) ANY TRANSACTION INVOLVING THE ALLOWING OF THE POSSESSION OF ANY IMMOVABLE PROPERTY TO BE TAKEN OR RETAINED IN PART PERFORMANCE OF A CONTRACT OF TH E NATURE REFERRED TO IN SECTION 53A OF THE TRANSFER O F PROPERTY ACT, 1882. THE ABOVE PROVISION CLEARLY SHOWS THAT ONCE THE POS SESSION HAS BEEN GIVEN AND THE TRANSFEREE HAS DONE SOMETHING IN PART PERFORMANCE OF THE CONTRACT THEN SAME WOULD CONSTIT UTE TRANSFER. IN THE CASE BEFORE US, THE TRANSFEREE HA D NOT ONLY PERFORMED IN PART BUT HAS FULLY DISCHARGED HIS PART BY PAYING FULL CONSIDERATION IN CASH. THE ASSESSEE HAS EXECU TED THE AGREEMENT OF SALE AND ALSO HANDED OVER THE PHYSICAL POSSESSION AND THE SAME WOULD CONSTITUTE TRANSFER OF CAPITAL A SSET. IN THE CIRCUMSTANCES, WE ARE OF THE OPINION THAT THE ASSES SING OFFICER HAS CORRECTLY SUBJECTED THE RECEIPT TO CAPITAL GAIN AND THE LD. CIT(A) IS NOT JUSTIFIED IN CONCLUDING THAT THE SALE PROCEEDS OF THE HOUSE HAS TO BE TREATED AS INCOME FROM OTHER SO URCES IN THE ABSENCE OF ANY REGISTERED SALE DEED. ACCORDINGLY W E SET ASIDE THE ORDER OF THE LD. CIT(A) AND DELETE THE ENHANCEM ENT MADE BY HIM AMOUNTING TO RS. 12,10,000/-. 4 8. FROM THE ABOVE, IT BECOMES CLEAR THAT ENHANCEMEN T HAS ALREADY BEEN DELETED BY THE TRIBUNAL, THEREFORE, PENALTY ON THE SAME WILL NOT SURVIVE. ACCORDINGLY, WE SET ASIDE THE ORDER OF LD. CIT(A) A ND DELETE THE PENALTY. 9. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 23/08/2013 SD/- SD/- (SUSHMA CHOWLA) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMER DATED : 23 RD AUGUST, 2013 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR TRUE COPY BY ORDER ASSISTANT REGISTRAR