Khuddus Haji Hasanali , Solapur V. Income-Tax Officer, Ward 2(3), Pune

ITA 604/PUN/2020

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 0116 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-08-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 08-11-2020
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Capital asset; Cost of acquisition; Fair market value
• Section: 32; 143(3); 43

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, PUNE SINGLE MEMBER CASE SHRI S.S. GODARA, JUDICIAL MEMBER ITA No. 604/PUN/2020 : Assessment Year : 2007-08 Khuddus Haji Hasanali Shaikh 256 Jodbhavi Peth, Solapur – 413 002 PAN: ACLPS 8791 B :Appellant Vs. The Income-tax Officer Ward 2(3) Pune. : Respondent Appellant by : None Respondent by : Shri M.G. Jasnani Date of Hearing : 28-07-2022 Date of Pronouncement : 17-08-2022 ORDER This assessee’s appeal for A.Y. 2007-08 is against CIT(A)-1, Pune’s order dated 12-03-2020 passed in case No. PN/CIT(A)-1/ITO Wd 2(3)/Sol.123/2017-18/39 involving proceedings u/s 143(3) r.w.s. 147 of the Income-tax Act, 1961, in short “the Act”. 2. None appears at the assessee’s behest inspite of notices of hearing fixing the case on 8-11-2021, 01-03-2022 and 30-06-2022 were issued. I therefore, proceed ex parte against the assessee. 3. The assessee pleads the following substantive grounds. “1. On the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in confirming the action of the ld. AO in treating appellant as the owner of the land on 07-01-1985 and not prior to 01-04-1981 without appreciating the facts and legal position. 2. On the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in not allowing the fair market value as on 01-04-1981 as the cost of acquisition of the land. 3. On the facts and in the circumstances of the case and in law the ld. CIT(A) erred in confirming the cost of acquisition of Rs. 838/-.” 4. Mr. Jasnani invited my attention to CIT(A)’s detailed discussion on the instant issue of cost of acquisition of the assessee’s capital asset as follows: “7.3 DECISION: I have considered the observation of the AO and submission of the appellant. 2 ITA No. 604/PUN/2020 Khuddus Haji Hasanali Shaikh A.Y. 2007-08 7.4 In this case relevant facts are that an agricultural land situated at Old survey No. 105 and New Survey No. 103 and 23/2A/22 of Kasbe Solapur and village Shelgi originally belonged to Mrs. Rakhamabai Dhondiba Sarvade and Shri Pandurang Dhondiba Sarvade of Solapur. Haji Hasan AH Mohammad Ali Shaikh (father of the appellant) was tenant of the said land. Under the provisions of Bombay Tenancy And Agricultural Lands Act 1948 under the Provisions of Section 32-M Mr. Haji Hasan AH Mohammad Ali Shaikh purchased the said land by depositing a sum of Rs.838/-on 07/0111985 to the Agricultural Lands Tribunal North Solapur. On the death of Mr. Hasan Ali Mohammad Ali Shaikh (father of the appellant) the appellant along with his mother and three brothers became the owners being legal heirs. Subsequently this property was sold to Mr. Ayyub Babumiya Shaikh for Rs. 76,00,000/- on 28/12/2006. AO noticed that while working out Indexed cost of acquisition in the computation of income enclosed with the return of income, the appellant had taken the date of acquisition of asset as 02/11/1998 and in the revised computation has taken the date of acquisition as 01/0411981 and cost of acquisition was taken as per valuation report as on 01/04/1981. However, based upon facts, the AO held that the father of the appellant purchased the said land by depositing a sum of RS.838/-on 07/0111985 to the Agricultural Lands Tribunal North Solapur and thus became owner of the land on 07-01-1985 only and not before 01-04-1981 as claimed by the appellant and computed L TCG accordingly. Secondly, the appellant claimed Rs.4,25,OOO/- as sale expenses for legal expenses. However, as no evidence was furnished, the AO still allowed 50% i.e. Rs 2,12,5001- as legal expenses related to sale and the share of the appellant in the expenses incurred was taken being at Rs.42,5001- being 1/5th of Rs 2,12,5001- . Thereafter the income of the appellant was assessed at Rs 15,10,800/- as Long Term Capital Gain. The appellant has not disputed the disallowance of reduction in cost of sale from 4,25,0001- to Rs 2,12,500/- and has contended against the date of acquisition taken by the AO as 01-01-1985 The appellant has referred to the provisions of the Provisions of Section 32 of Bombay Tenancy and Agricultural Lands Act, 1948 and has stated that the First day of April, 1957 was declared to be the "Tillers day'. If a person remained a tenant on the said date, by reason of the legal fiction created under Section 32 of the Tenancy Act, he would be deemed to have purchased the land from his landlord, free from all encumbrances subsisting thereon on the said. Therefore the appellant argued that as per the provisions of Section 32(1) of Bombay Tenancy and Agricultural Lands Act, 1948 given above, the ownership of the said land vested to Mr. Hazi Hasanali Shaikh w. e. f. 01.04.1957 by operation of said law and not when the certificate in form IX of the said Act was granted by the Additional Tahasildar Agricultural Lands Tribunal, North Solapur on 07/01/1985 upon deposit of Rs. 838 as price of land as per law. The passing of order by Additional Tahsildar and deposition of sum of Rs. 838 is only a procedural aspect confirming the ownership. The appellant also furnished following facts:- i). The appellant furnished the 7/12 extract of the year 1976-77 pertaining to Gat No. 23/2A of Village Shelagi, Taluka - North Solapur i.e. the land, capital gain arising from sale of such land is the subject matter of this appeal. The said extract is in the name of Dhondiba Subhana Saravade and Rakhambai Dhondiba Saravade as owner. These two names are then replaced by Dhondiba Saravade as legal heir of these two upon their death. The name of Jame Mohamadiya Ahile Hadis Trust through Chairman Haji Hasanali Haji Mohammad All Shaikh is appearing in record of other rights as tenant and is shown as eligible under Section 43 of Tenancy Act. ii) The appellant further stated that prima facie it appears that the trust viz. Jame Mohamadiya Ahile Hadis Trust is tenant thereof. However the name of trust was inadvertently added and the proper name of Haji Hasan Haji Mohammad Ali Shaikh was recorded by the Authorities of Land records. Tahasildar, North Solapur vide his order dated 28/11/2006 bearing No. KUKANASHII/174/06 held 3 ITA No. 604/PUN/2020 Khuddus Haji Hasanali Shaikh A.Y. 2007-08 that the name of Jame Mohamadiya Ahile Hadis Trust has been erroneously recorded and it has been properly corrected and Haji Hasan Ali Mohammadali Shaikh is rightful tenant/owner and the trust has no interest of whatsoever nature in the said land. iii) The above order was challenged post sale before the Joint Charity Commissioner, Latur Region, Latur by Noor Ahmed Mehboobsab Khalifa and Abdul Salam Noor Ahmed Khalifa vide miscellaneous application No. 8/2007. The said application was rejected by the Joint Charity Commissioner, Latur Region, Latur vide order dated 02/09/2008. iv) From the above it will be evident that the Haji Hasanali Haji Mohammadali Shaikh, father of appellant and the previous owner to the land, had right to the property as owner prior to 01/4/1981 the certificate of which is only confirmed by issue of a certificate in Form No. 32M vide order No. IPLl318 dated 07/01/1985. 7.6 However above facts narrated at S. i, ii, iii & iv above only show that there was a dispute whether the name of the Jame Mohamadiya Ahile Hadis Trust was to be there in the land records or the name of the Chairman of the trust Haji Hasan Haji Mohammad Ali Shaikh should have been there in land records in his personal capacity. As per claim of the appellant, legal heirs of Late Haji Hasan Haji Mohammad Ali Shaikh won the legal battle and it was held that the name of Late Haji Hasan Haji Mohammad Ali Shaikh should have been in the land records in place of the trust. 7.7 However, even if the version of the appellant is accepted, the basic issue remains the same i.e. when Late Haji Hasan Haji Mohammad AU Shaikh became the owner of the land. 7.8 Land was transferred in name of family member of appellant on 07/01/1985 on payment of RS.8301-. In case, transfer payment was not made, land would not have been transferred at all. Thus, the status of the appellant became "owner" from 'tenant' only after due payment, Further, there is no evidence of any payment other than payment of Rs 838/-.The appellant might have certain right over land but he become complete owner only on 07101/1985 after paying Rs. 838/-. Thus the AO was justified in treating the date of acquisition of property as 01-01-1985 and cost of acquisition as only Rs 838/-. Thus, Grounds No 1,2 & 3 are DISMISSED.” 5. I have given my thoughtful consideration to assessee’s pleadings and Revenue’s vehement contention. There is hardly any merit found in the assessee’s instant sole substantive ground. This is for the precise reason that it is only after paying the sum in issue of Rs. 838/- on 07-01-1985 that this tax- payer had acquired his absolute title over the land to the exclusion of all including State Government. I thus conclude in this factual background that both the lower authorities have rightly adopted the cost of acquisition of Rs. 838/- only. The assessee fails in his instant substantive grievances. 6. Delay of 85 days in filing of the instant appeal instituted on 09-11-2020 stands condoned since falling in Covid 19 Pandemic outbreak period. 4 ITA No. 604/PUN/2020 Khuddus Haji Hasanali Shaikh A.Y. 2007-08 7. This assessee’s appeal is dismissed. Order pronounced in the open Court on this 17 th August 2022. Sd/- (SATBEER SINGH GODARA) JUDICIAL MEMBER Pune; Dated, this 17 th day of August 2022 Ankam Copy of the Order forwarded to : 1. The Appellant. 2. The Respondent. 3. The Pr. CIT - 6, Pune 4. The CIT(A)-1, Pune 5. The SMC Bench, ITAT Pune. 6. Guard File BY ORDER, /// TRUE COPY /// Sr. Private Secretary ITAT, Pune. 5 ITA No. 604/PUN/2020 Khuddus Haji Hasanali Shaikh A.Y. 2007-08 Date 1 Draft dictated on 02-08-2022 Sr.PS 2 Draft placed before author 03-08-2022 Sr.PS 3 Draft proposed and placed before the second Member JM/AM 4 Draft discussed/approved by second Member AM/JM 5 Approved draft comes to the Sr. PS/PS Sr.PS/PS 6 Kept for pronouncement on 17-08-2022 Sr.PS/PS 7 Date of uploading of order 17-08-2022 Sr.PS/PS 8 File sent to Bench Clerk 17-08-2022 Sr.PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R 11 Date of dispatch of order