Mrs Surinder Mohini Bawa, Kapurthala V. The Income-tax Officer, Kapurthala-II

ITA 614/ASR/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0816 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 6 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-04-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 05-04-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 09-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: J S BHASIN
• Keywords: Opportunity of being heard; Cost of acquisition; Reason to believe; Reassessment proceedings
• Section: 148; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR BEFORE SH. A.D.JAIN, HONBLE JUDICIAL MEMBER AND SH. T.S. KAPOOR, HONBLE ACCOUNTANT MEMBER I.T.A NO.614(ASR)/2014 ASSESSMENT YEAR : 2009-10 MRS. SURINDER MOHINI BAWA ITO, 1, GURU KIRPA, JALANDHAR ROAD, VS. KAPUR THALA-II KAPURTHALA. PAN:AAOPB0256B (APPELLANT) (RESPONDENT) APPELLANT BY: SH. J.S.BHASIN (ADV.) RESPONDENT BY: SH. TARSEM LAL (DR.) DATE OF HEARING: 05.04.2016 DATE OF PRONOUNCEMENT: 13.04.2016 ORDER PER T. S. KAPOOR (AM): THIS IS AN APPEAL FILED BY ASSESSEE AGAINST THE ORD ER OF LEARNED CIT(A), JALANDHAR, DATED 5.08.2014 FOR ASST. YEAR: 2009-10. 2. THE ASSESSEE HAS TAKEN EIGHT GROUNDS OF APPEAL, HOWEVER, THE CRUX OF GROUNDS OF APPEAL IS THE GRIEVANCE OF ASSES SEE WITH THE ACTION OF LEARNED CIT(A) BY WHICH HE HAD UPHELD THE VALIDI TY OF PROCEEDINGS U/S 147/148 OF THE ACT. AS REGARDS THE MERITS OF TH E CASE THE ASSESSEE IS AGGRIEVED WITH THE ACTION OF LEARNED CIT(A) BY W HICH HE HAD CONFIRMED THE ADDITION OF RS.76,42,480/- MADE BY AS SESSING OFFICER TOWARDS THE ALLEGED UNDISCLOSED CAPITAL GAIN ON SAL E OF PROPERTY AT KANPUR. ITA NO.614 (ASR)/2014 ASST. YEAR:2009-10 2 3. THE BRIEF FACTS OF THE CASE AS NOTED IN TH E ASSESSMENT ORDER ARE THAT AN INFORMATION WAS RECEIVED FROM ITO-I(3), KAN PUR THAT THE ASSESSEE HAD SOLD A PROPERTY AT KANPUR FOR SALE CON SIDERATION OF RS.25 LACS (WITH A CIRCLE RATE OF RS.76.42 LACS) THROUGH HER POWER OF ATTORNEY SH. PARVEEN KUMAR TALWAR. THE ASSESSING OFFICER NOT ED THAT ASSESSEE HAD NOT DISCLOSED THE CAPITAL GAIN ARISING OUT OF S ALE CONSIDERATION OF THE ABOVE PROPERTY, THEREFORE, A NOTICE U/S 148 WAS ISSUED AND SERVED ON THE ASSESSEE. IN RESPONSE THE ASSESSEE RAISED LE GAL ISSUES AGAINST REOPENING OF THE CASE AND ALSO EXPLAINED THE FACTS OF THE CASE. IT WAS SUBMITTED THAT THE SAID PROPERTY WAS SOLD IN 2005 B Y WAY OF FULL AND FINAL AGREEMENT TO SELL EXECUTED ON 21.11.2005 IN F AVOUR OF SMT. NEELAM TALWAR FOR A TOTAL CONSIDERATION OF RS.19.50 LACS AND BESIDES HANDING OVER PHYSICAL POSSESSION OF PROPERTY A REGI STERED POWER OF ATTORNEY WAS EXECUTED IN FAVOUR OF SH. PRAVEEN TALW AR ON THE SAME DATE. IT WAS SUBMITTED THAT FOR ALL PURPOSES THE PR OPERTY STOOD SOLD AND TRANSFERRED ON 21.11.2015 TO SMT. NEELAM TALWAR . ALONG WITH THE SAID REPLY THE ASSESSEE FILED COPY OF AGREEMENT TO SELL AND ALSO COPY OF POWER OF ATTORNEY BOTH EXECUTED ON 21.11.2015. IT W AS ALSO SUBMITTED THAT THE SALE PRICE OF RS.25 LACS OR RS.76.42 LACS WAS ASSESSABLE IN THE HANDS OF SMT. NEELAM TALWAR AND NOT IN THE HAND S OF ASSESSEE. THE ASSESSING OFFICER IN VIEW OF THE LEGAL OBJECTIO NS RAISED BY ASSESSEE DISPOSED OFF THE SAME VIDE LETTER NO.2049 DATED 30. 01.2014. ON RECEIPT OF SAID LETTER THE ASSESSEE AGAIN FILED OBJ ECTIONS VIDE LETTER ITA NO.614 (ASR)/2014 ASST. YEAR:2009-10 3 DATED 24.02.2014, WHEREIN SHE AGAIN REITERATED HER PLEADINGS ON LEGAL ISSUES AND ALSO SUBMITTED THAT THE LETTER WRITTEN B Y ASSESSING OFFICER DISPOSING OFF THE OBJECTIONS HAD MISSED OUT A CRUCI AL FACT THAT BESIDES POWER OF ATTORNEY AN AGREEMENT TO SELL WAS ALSO EXECUTED ON THE SAME VERY DATE AND POSSESSION OF PROPERTY WAS ALSO HANDE D OVER TO THEM. THE ASSESSEE ALSO INVITED THE ATTENTION OF ASSESSIN G OFFICER TO THE DEFINITION OF TRANSFER AS DEFINED IN CLAUSE-V OF SE CTION 2(47) OF THE ACT. HOWEVER, THE ASSESSING OFFICER DID NOT ACCEPT THE C ONTENTION OF THE ASSESSEE AND MADE THE ADDITION OF RS.76,42,480/- TR EATING THE COST OF ACQUISITION AS NIL AS THE ASSESSEE HAD FAILED TO FI LE PARTICULARS WITH REGARD TO COST OF ACQUISITION. 4. AGGRIEVED WITH THE ASSESSMENT ORDER THE ASSESSEE FILED APPEAL BEFORE LEARNED CIT(A) AND REITERATED HER SUBMISSION S, HOWEVER, THE LEARNED CIT(A) UPHELD THE VALIDITY OF PROCEEDINGS U /S 147/148 AND ALSO UPHELD THE ADDITION. 5. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE US. 6. AT THE OUTSET, THE LEARNED AR INVITED OUR ATTENT ION TO THE COPY OF REASONS RECORDED PLACED AT (PB-1) AND SUBMITTED THA T THE NAME OF THE ASSESSEE MENTIONED IN THE REASONS RECORDED WAS DIFF ERENT AND FURTHER THE ASSESSING OFFICER HAD NOT BROUGHT ON RECORD, TH E NATURE OF INFORMATION ON WHICH HE HAD RELIED FOR REOPENING TH E CASE OF THE ASSESSEE. IT WAS FURTHER SUBMITTED THAT ASSESSEE H AD FILED OBJECTIONS TO THE REASONS RECORDED AND OUR ATTENTION WAS INVIT ED TO (PB-2&3) AND ITA NO.614 (ASR)/2014 ASST. YEAR:2009-10 4 WHICH WAS DISPOSED BY ASSESSING OFFICER VIDE LETTER DATED 30.01.2014 PLACED AT (PB-10 TO 12). THE LEARNED AR FURTHER SUB MITTED THAT AGAINST THE SAID DISPOSAL OF OBJECTIONS THE ASSESSE E AGAIN OBJECTED VIDE LETTER DATED 24.02.2014 AND IN THIS RESPECT OU R ATTENTION WAS INVITED TO (PB-13 & 14). THE LEARNED AR SUBMITTED T HAT SECOND OBJECTION LETTER WAS FILED AS THE ASSESSING OFFICER HAD MISSED OUT HIS FINDINGS ON CRUCIAL ASPECT WITH REGARD TO THE FACT THAT POWER OF ATTORNEY WAS ALSO EXECUTED ALONG WITH AGREEMENT TO SELL AND SAME WAS ALSO FILED AND ATTENTION OF THE ASSESSING OFFICER W AS ALSO INVITED TO DEFINITION OF TRANSFER AS CONTAINED IN SECTION 2(47 )(V) BUT THE ASSESSING OFFICER HAD NOT DEALT WITH THIS ISSUE IN THE LETTER DISPOSING OFF THE OBJECTIONS. THE LEARNED AR SUBMITTED THAT ASSESSING OFFICER DID NOT DEAL WITH THE LEGAL OBJECTIONS DESPITE SECOND LETTE R OF ASSESSEE AND PROCEEDED TO COMPLETE REASSESSMENT PROCEEDINGS, WHI CH WAS BAD IN LAW. 7. WITHOUT PREJUDICE THE LEARNED AR SUBMITTED TH AT SINCE THERE WAS NO ORIGINAL ASSESSMENT, THEREFORE, REASSESSMENT WAS NOT VALID AS HELD BY HONBLE SUPREME COURT IN THE CASE OF STANDARD CHARTERED FINANCE LTD. CIT, 132 DTR SC 87 . AS REGARDS MERITS OF THE CASE THE LEARNED AR SUBMITTED THAT THE TRANSACTION OF SALE WAS COMPLETE D IN THE YEAR 2005 WHEN THE POWER OF ATTORNEY ALONG WITH AGREEMENT TO SELL WAS EXECUTED AND ASSESSEE HAD RECEIVED FULL CONSIDERATION AND IN THIS RESPECT OUR ATTENTION WAS INVITED TO (PB-4 TO 6) WHERE A COPY O F AGREEMENT TO SELL ITA NO.614 (ASR)/2014 ASST. YEAR:2009-10 5 WAS PLACED. OUR ATTENTION WAS ALSO INVITED TO GENER AL POWER OF ATTORNEY EXECUTED BY ASSESSEE IN FAVOUR OF SH. PARV EEN TALWAR. THE LEARNED AR SUBMITTED THAT IN VIEW OF THE EXECUTION OF THESE DOCUMENTS WHICH WERE SIMULTANEOUSLY EXECUTED ON THE SAME VERY DATE THE POSSESSION AND INTEREST IN THE PROPERTY HA D ALREADY PASSED ON TO THE PURCHASER AND FURTHER SUBMITTED THAT THE INTEREST IN THE PROPERTY WAS NOT PASSED WITHOUT CONSIDERATION AND I N FACT, ASSESSEE HAD RECEIVED FULL CONSIDERATION OF RS.19.50 LACS AN D IN THIS RESPECT OUR ATTENTION WAS INVITED TO (PB- 61) WHERE THE COP IES OF THE DRAFTS AND CHEQUE WERE PLACED. THE LEARNED AR INVITED OUR ATTENTION TO THE PROVISIONS OF SECTION 2(47)(V) OF THE ACT AND SUBMI TTED THAT AS PER THE DEFINITION OF TRANSFER AS CONTAINED IN INCOME TAX A CT, THE TRANSFER TOOK PLACE IN THE YEAR 2005 ONLY AND THEREFORE, THE ADDI TION COULD NOT HAVE BEEN MADE IN THE YEAR UNDER CONSIDERATION. INVITING OUR ATTENTION TO LEARNED CIT(A)S ORDER FOR DISMISSING THE APPEAL TH E LEARNED AR SUBMITTED THAT THE LEARNED CIT(A) HAS WRONGLY NOTED THE DATE OF DRAFT NO.396484 FOR RS.4,25,000/- TO BE 15 TH DECEMBER, 2005 WHEREAS THE FACT IS THAT ITS DATE IS 5.11.2005. IT WAS SUBMITTE D THAT LEARNED CIT(A) MISTOOK THE DATE OF 15.12.2005 WRITTEN ON THE CHEQ UE OF RS.4,70,000/- AND THEREFORE THE VERY BASIS OF LEARN ED CIT(A) FOR DISMISSING THE APPEAL OF THE ASSESSEE WAS MISPLACED . 8. THE LEARNED DR, ON THE OTHER HAND, SUBMITTED THA T ASSESSEE HAD NOT DISCLOSED HER CAPITAL GAIN EARNED ON THE SA LE OF PROPERTY IN ITA NO.614 (ASR)/2014 ASST. YEAR:2009-10 6 ANY OF THE YEAR AND ASSESSING OFFICER HAD RECEIVED AN INFORMATION THAT ASSESSEE HAD SOLD CERTAIN PROPERTY FOR RS.25 LACS A ND FOR WHICH HE HAD FOUND FROM THE RECORDS THAT ASSESSEE HAD NOT DE CLARED THE SAME IN HER INCOME OF RETURN AND THEREFORE, ASSESSING OF FICER HAD EVERY REASON TO BELIEVE THAT THE INCOME OF CAPITAL GAIN H AD ESCAPED. THE LEARNED DR, IN THIS RESPECT INVITED OUR ATTENTION T O THE COPY OF REASONS RECORDED AND SUBMITTED THAT THE SALE DEED ITSELF WA S THE MATERIAL WHICH WAS IN THE POSSESSION OF ASSESSING OFFICER AN D THEREFORE HE HAD RIGHTLY INVOKED THE PROVISIONS OF SECTION 147/148. AS REGARDS MERITS OF THE CASE THE LEARNED DR SUBMITTED THAT THE TRANS ACTIONS OF EXECUTING POWER OF ATTORNEY ALONG WITH AGREEMENT TO SELL CANNOT BE SAID TO BE COMPLETE UNLESS A SALE DEED IS REGISTERE D AND EXECUTED BY THE SELLER AND IN THIS RESPECT RELIANCE WAS PLACED ON THE CASE LAW OF SH. C.S ATWAL AND ORS. DECIDED BY PUNJAB & HARYANA HIGH COURT, FOR THE PROPOSITION THAT THE SALE CANNOT BE SAID TO HAV E BEEN COMPLETED WITHOUT EXECUTION OF SALE DEED. IN VIEW OF THE ABO VE DECISION OF PUNJAB & HARYANA HIGH COURT IN THE CASE OF SH. C.S ATWAL (SUPRA), IT WAS SUBMITTED THAT THE SALE CAN BE SAID TO HAVE BEE N COMPLETED IN THE YEAR UNDER CONSIDERATION ONLY AS THE POWER OF ATTOR NEY HAD EXECUTED SALE DEED ON BEHALF OF THE ASSESSEE IN THIS YEAR AN D THEREFORE, THE CAPITAL GAIN HAD RIGHTLY ACCRUED TO THE ASSESSEE, I N THIS YEAR. 9. THE LEARNED AR, IN HIS REJOINDER SUBMITTED THAT CASE LAW OF SH. C.S ATWAL & ORS. IS NOT APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF ITA NO.614 (ASR)/2014 ASST. YEAR:2009-10 7 THE CASE AS IN THAT CASE THE AGREEMENT TO SELL HAD BEEN CANCELLED AND THEREFORE, THE HONBLE COURT HAD HELD THAT SALE CAN NOT BE SAID TO HAVE BEEN COMPLETED. HE SUBMITTED THAT IN THE PRESENT CA SE THE AGREEMENT TO SELL WAS NOT CANCELLED AS THE ASSESSEE HAD RECEI VED FULL SALE CONSIDERATION AND HAD EXECUTED IRREVOCABLE POWER OF ATTORNEY. 10. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE T HROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT ON RECEIPT OF REASONS RECORDED THE ASSESSEE FILED HER OBJECTIONS IN WHICH CERTAIN LEGAL ISSUES WERE RAISED. IN HER OBJECTIONS THE ASSESSEE HAD SUBMITTE D THAT ASSESSING OFFICER HAD NOT MENTIONED AS TO ON WHICH DOCUMENTS HE HAD PLACED HIS RELIANCE AND HOW THE MATERIAL HAS BEEN ANALYZED TO REACH TO THE VIEW THAT INCOME HAD ESCAPED ASSESSMENT. THE LEARNE D AR, THEREFORE, SUBMITTED THAT ASSUMPTION OF JURISDICTION U/S 147/1 48 WAS BASED ON SURMISES ONLY AS THE ASSESSING OFFICER HAD NOT EVEN CALCULATED THE CAPITAL GAINS AND HAD MADE THE ADDITION TAKING THE WHOLE CONSIDERATION AS CAPITAL GAIN. THE ASSESSEE HAD ALS O FILED A COPY OF AGREEMENT TO SELL ALONG WITH REGISTERED POWER OF AT TORNEY. THE ASSESSING OFFICER DISPOSED OFF THE OBJECTIONS VIDE LETTER DATED 30.01.2014 AND AGAINST THIS DISPOSAL OF OBJECTIONS THE ASSESSEE AGAIN OBJECTED AS ASSESSING OFFICER HAD MISSED OUT HIS FI NDINGS ON A PART OF OBJECTIONS. IN THE SECOND LETTER THE ASSESSEE INVIT ED THE ATTENTION OF ASSESSING OFFICER TO THE DEFINITION OF TRANSFER AS CONTAINED IN SECTION 2(47) OF THE ACT. THE ASSESSING OFFICER WITHOUT DEA LING WITH SUCH ITA NO.614 (ASR)/2014 ASST. YEAR:2009-10 8 SUBMISSIONS OF ASSESSEE PROCEEDED TO MAKE ADDITION UNDER THE HEAD CAPITAL GAINS WHICH IS NOT AS PER LAW AS THE ASSESS ING OFFICER HAD TO DEAL WITH THE OBJECTIONS OBJECTIVELY. FOR THE SAKE OF CONVENIENCE COPY OF LEGAL OBJECTIONS AS ORIGINALLY FILED BY ASSESSEE AND ITS DISPOSAL BY ASSESSING OFFICER ALONG WITH FURTHER OBJECTIONS BY ASSESSEE ARE MADE PART OF THIS ORDER AND WHICH READS AS UNDER: TO, THE I.T.O., KAPURTHALA. IN RE: 2009-2010 ASSESSMENT OF SMT MOHINI BAWA, 1-G URU KIRPA, JALANDHAR ROAD, KAPUR: PAN NO.AAOPB0256B SUB: FILING OF LEGAL OBJECTIONS AGAINST REASONS REC ORDED U/S.148 DATED 28.03.2013 SIR, REASONS RECORDED U/S 148 IN THIS CASE, AS PROVIDED TO ASSESSEE, ON A CAREFUL EXAMINATION, HAVE BEEN FOUND TO BE ENTIRELY INCONSISTENT WITH THE NEAT AND BARE FACT OF - CASE. THEREFORE, IT IS FELT ESSENTIAL TO FIRST REGISTER LEGAL OBJECTIONS, SO AS TO SEEK THE AT PUG E PROCEEDINGS TO BE DROPPED AS SUCH. THE LEGAL OBJECT IONS, AS MANDATED BY THE HON'BLE APE COURT IN THE CASE OF GKN DRIVESH AFT VS. ITO 259 ITR 19(SC), ARE RAISED IN FOLLOWING TERMS: 1. NEITHER THE REASONS RECORDED ARE IN ASSESSEE'S NAM E NOR THE YEAR MENTIONED MATCHES WITH THE YEAR FOR WHICH NOTI CE U/S.148 HAS BEEN ISSUED. THIS GLARING INCONSISTENCY RENDERS :L IMPUGNED PROCEEDINGS VOID AB INITIO , SO AS NOT TO PURSUE THE SAME ANY FURTHER. 2. WHILE REFERRING TO THE INFORMATION IN POSSESSION, SHOWING SALE OF PROPERTY AT RS.25 LACS AGAINST CIRCLE RATE OF RS .76,42,480/-, THE NATURE OF INFORMATION POSSESSED, HAS NOT BEEN DISCL OSED. EVEN IN SECOND PARA, THERE IS REFERENCE TO THE 'RECORDS OF THE ASSESSEE' PURPORTEDLY EXAMINED TO INFER THAT CAPITAL GAIN ON SALE OF RS.76,42,480/- HAS ESCAPED ASSESSMENT WITHIN THE ME ANING OF SECTION 147. BUT AGAIN, WHAT ARE THE DOCUMENTS ON R ECORD OF THE ASSESSEE, WHETHER FILED BY ASSESSEE OR PROCURED FRO M ELSEWHERE, HAS NOT BEEN UNFOLDED. HOW THE MATERIAL RELIED UPON HAS BEEN ANALYZED TO REACH THE ABOVE SAID VIEW, IS ALSO NOT DISCLOSED TH E PROCESS OF REASONING IS ALTOGETHER MISSING. THEN HOW BY MERE R EFERENCE TO A SALE PRICE, THE CAPITAL GAIN COULD BE ASSUMED TO HAVE ESCAPED ASSESSMENT, SINCE IT IS NOT THE SALE PRICE, BUT THE REAL CAPITAL GAIN, IF ANY, WHICH HAS TO BE BROUGHT TO TAX. THERE IS NO DI LATION ON COST IN ITA NO.614 (ASR)/2014 ASST. YEAR:2009-10 9 THE REASONS RECORDED AND HENCE, THE ASSUMPTION OF CAPITAL GAIN IS ONLY IN THE REALM OF SURMISES. IT IS TRITE THAT WITHOUT FIRST ASCERTAINING THE COS T, THE CAPITAL GAIN CANNOT BE COMPUTED WITH MERE REFER ENCE TO SALE PRICE. THUS WHEN NEITHER THE INFORMATION, NOR THE PROCESS OF REASONING AND ABOVE ALL, WITH THE CAPITAL GAIN HAS BEEN COMPUTED, THE REASONS RECORDED ARE WHOLLY SUBJECTIVE, VAGUE - TENTATIVE, NOT LEADING TO NECESSARY BELIEF OF ESCAPEMENT OF INCOME. 3. THUS WITHOUT PREJUDICE TO THE LEGALITY OF REASONS R ECORDED, WHICH CAN NEITHER BE SUPPLEMENTED NOR IMPROVED UPO N, THE ASSESSEE WOULD LIKE TO STATE THAT THE IMPUGNED PROPERTY, AT KANPUR WAS SOLD BY HER, WAY BACK IN 2005, BY WAY OF FULL AND FINAL AGREEMENT-TO- EII EXECUTED ON 21.11.2005 WITH ONE SMT NEELAM TALWAR, WIFE OF SH PARVEEN TALWAR, R/O 15/202A DOODHWALA BANGLA, CIVIL LINES, KANPUR, FOR A TOTAL CONSIDERATION OF RS.19.50 LACS AND .ESI DES HANDING OVER PHYSICAL POSSESSION, REGISTERED POWER OF ATTORNEY W AS ALSO GOT EXECUTED N FAVOUR OF SHRI PARVEEN TALWAR ON THE SAM E VERY DAY. THUS, IN SO FAR AS THIS ASSESSEE IS CONCERNED, FOR ALL PU RPOSES, THE PROPERTY STOOD SOLD AND TRANSFERRED ON 21.11.2005 TO SMT NEE LAM TALWAR, ALTHOUGH, REGISTERED SALE DEED WAS NOT EXECUTED, AN D RATHER A POWER OF ATTORNEY WAS OBTAINED, PROBABLY FOR ITS SALE ELS EWHERE. TO FURTHER SUPPORT THIS CONTENTION, ASSESSEE IS FILING HEREWIT H COPIES OF THE 'AGREEMENT TO SELL' AND THE 'POWER OF ATTORNEY' BOT H EXECUTED ON 21.11.2005. 3.1 IT SEEMS THE INFORMATION POSSESSED BY THE DEPARTMEN T IS IN RESPECT OF THE SUBSEQUENT SALE MADE BY MR PRAVEEN TALWAR, AS POA HOLDER, FOR A CONSIDERATION OF RS.25 LACS, BY EXECU TING A REGISTERED SALE DEED. IF IT IS SO, THEN OBVIOUSLY THE GAIN IF ANY, WHETHER FOR SALE AT A PRICE OF RS.25 LACS OR FOR RS.76.42 LACS, IS ASSE SSABLE IN THE HANDS OF SMT NEELAM TALWAR, WIFE OF SHRI PARVEEN TALWAR A ND NOT IN THE HANDS OF THIS ASSESSEE. 4. THEREFORE, APPRECIATING THE ABOVE FACTUAL ASPECT OF THE CASE, THE PROCEEDINGS WRONGLY INITIATED AGAINST THIS ASSE SSEE, BE KINDLY DROPPED. THANKING YOU, DATED 11.11.2013 YOURS FAITHFULLY ASSESSEE THRO: J.S. BHASIN, ADVOCATE. TO SMT. MOHINI BAWA, 1, GURU KIRPA HOUSE, JALANDHAR ROAD, KAPURTHALA. MADAM, ITA NO.614 (ASR)/2014 ASST. YEAR:2009-10 10 SUB:- ASSESSMENT PROCEEDINGS FOR THE ASSESSMENT YEA R 2009-10-PAN - AAOPB0256B- REGARDING PLEASE REFER TO THE ASSESSMENT PROCEEDINGS FOR THE ASSESSMENT YEAR 2009-10. 2. WITH REFERENCE TO YOUR LETTER DT. 1/11/2013 FILE D BY YOUR COUNSEL SH. J.S BHASIN, ADVOCATE WHEREIN HE HAS RAISED LEGAL OBJECTION AND REQUESTED FOR DROPPING T HE PROCEEDINGS. IN THIS CONNECTION IT MAY BE POINTED OUT THAT YOU HAVE SOLD COMMERCIAL PROPERTY SITUATED AT 84/10, 18 -A, FACTORY AREA-1, JUHI, KANPUR ON 05/01/2008 THROUGH YOUR POWER OF ATTORNEY SH.PARVEEN KUMAR TALWAR S/O LATE SH. R.LL TALWAR R/O HOUSE NOL5/202A, DOOD WALA BANGLA , CIVIL LINES, KANPUR NAGAR VIDE POWER OF ATTORNEY DATED 21/11/2005 REGISTERED IN SERIAL NO 04/07/2007 WITH THE SUB REGISTRAR ,JALANDHAR , PUNJAB TO SMT. MANJU LAT A KEDIA W/O SH. PAWAN KUMAR KEDIA AND SMT . LAVITA KE DIA W/O SH MANOJ KUMAR KEDIA, BOTH RESIDENT OF HOUSE NO . 128/357 (B,C) BLOCKNO.H-2, KIDWAI NAGAR, KANPUR NAG AR FOR A SUM OF RS.251AC (CIRCLE RATE OF WHICH WAS RS. 76,42,480/- VIDE REGISTRATION DEED DATED 01/05/2008 REGISTERED WITH THE SUB-REGISTRAR, JONE NO-4,KANPUR NAGAR. AS PER SCHEDULE OF PAYMENT OF SALE CONSIDERATION OF RS.25 LAC AS MENTIONED ON PAGE 26-31 OF THE REGISTR ATION DEED DATED 01/05/2008, PAYMENT HAVE 26-31 PAYMENTS HAVE BEEN RECEIVED BY YOU THROUGH YOUR ATTORNEY SH. PAWAN KUMAR TALWAR. AS THE DATE OF REGISTRATION DEE D OF THE IMPUGNED PROPERTY IS 01/05/2008, IT IS RELEVANT TO ACCOUNT YEAR 2008-09 AND ASSESSMENT YEAR 2009-10. A S PER REASONS RECORDED FOR REOPENING THE SAID CASE IT MAY BE POINTED OUT THAT THE CASE HAS BEEN RIGHTLY REOPENED U/S. 147/148 AS YOU HAVE FAILED TO SHOW CAPITAL GAIN ARI SING FROM THE AS SALE OF SAID PROPERTY IN YOUR RETURN OF INCOME FOR THE ASSESSMENT YEAR 2009-10. YOUR OBJECTION THAT THE POWER OF ATTORNEY BEING IN FAVOUR SH.PARVEEN KUMAR TALWAR BEING DATED 21/1 1/2 005 WHEREBY YOU CLAIM TO HAVE ALREADY SOLD THE ABOVE SA ID PROPERTY ON 21/11/2007 THEREFORE YOU DISOWN THE SUBSEQUENT SALE MADE ON 30/04/2008/ 01/05/2008 FOR RS. 251ACS AGAINST THE COLLECTOR RATE OF RS.76,42,480/- IS FACTUALLY & LEGALLY INCORRECT AS FOR THE PURPOSE OF DETERMINING CAPITAL GAIN ON THE SALE OF IMMOVABLE P ROPERTY IT IS THE DATE OF REGISTRATION & NOT DATE OF POWER OF ATTORNEY WHICH IS MATERIAL FOR THE PURPOSE . THIS I S WHAT HAS BEEN HELD BY THE HONORABLE SUPREME COURT IN THE CASE OF SURA) LAMP & INDUSTRIES PVT. LTD VS. STATE OF HARYANA(2011)202 TAXMAN 607(SC). IT HAS BEEN CLEARL Y ITA NO.614 (ASR)/2014 ASST. YEAR:2009-10 11 HELD THEREIN THAT AS PER SECTION64 OF THE TRANSFER OF PROPERTY ACT, 1 882 IT IS THE DATE OF REGISTRATION AND NOT DATE OF POWER OF ATTORNEY IS RELEVANT FOR THE TRANS FER OF THE IMMOVABLE PROPERTY. MOREOVER AT THE TIME OF INITIATION OF THE ASSESSMEN T PROCEEDINGS U/S 147/148 WHAT IS REQUIRED IS THAT TH ERE SHOULD BE A PRIRNA FACIE CASE OF ESCAPEMENT OF INCO ME WHICH IS VERY MUCH THERE IN YOUR CASE AS YOU HAVE N OT DISCLOSED THE AMOUNT OF CAPITAL GAIN ARISING FROM T HE SALE OF AFORESAID PROPERLY IN YOUR RETURN OF INCOME FOR THE ASSTT YEAR 2009-10. FURTHER IT MAY ALSO BE POINTED OUT TH AT AT THIS STAGE THERE IS NO NEED TO ESTABLISH A CASE OF POSITIVE ESCAPEMENT OF INCOME. NOR CAN THE SUFFICIENCY OF RE ASONS BE GONE INTO AT THIS STAGE AS CONTENDED BY YOU IN Y OUR LEGAL OBJECTION. IN VIEW OF THE AFORESAID FACTS AND THE LEGAL POSITI ON OBTAINING THE POINT AT ISSUE YOUR LEGAL OBJECTIONS ARE HEREBY DISPOSED OF ACCORDINGLY. YOU SHOULD NOW FURNISH COMPLETE DETAILS OF CAPITAL GAIN ARISING OUT OF THE SALE OF THE IMPUGNED COMMER CIAL PROPERTY INCLUDING DOCUMENTARY EVIDENCE FOR THE COS T OF ACQUISITION OF THE SAID PROPERTY. PLEASE NOTE IN CA SE OF FAILURE TO DO SO, COST OF ACQUISITION OF THE SAID P ROPERTY. PLEASE NOTE IN CASE OF FAILURE TO DO SO, COST OF AC QUISITION OF THE IMPUGNED PROPERTY SHALL BE TAKEN AT NIL AND CAPITAL GAIN WILL BE WORKED OUT ACCORDINGLY. YOU CASE IS FIXED FOR HEARING 12/02/2014 AT 11.0 0 A.M. YOURS FAITHFULLY (NARINDER SHARMA) INCOME TAX OFFICER,KAPURTHALA. TO THE ITO., W-II KAPURTHALA. IN RE: 2009-2010 ASSESSMENT OF SMT MOHINI BAWA, 1-G URU KIRPA, JALANDHAR ROAD, KAPURTHALA. PAN NO. AAOPB0256B SUB: DISPOSAL OF LEGAL OBJECTIONS AGAINST REASONS R ECORDED U/S.148 DATED 28.03.2013 SIR, THIS REFERS TO YOUR LETTER DATED 30.01.2014 RECEIVE D BY ASSESSEE ON 07.2.2014. WHEREBY THE LEGAL OBJECTIONS FILED ON 11.1 1.2013 ARE CLAIMED TO HAVE BEEN DISPOSED OF AN D THE ITA NO.614 (ASR)/2014 ASST. YEAR:2009-10 12 ASSESSEE HAS BEEN CALLED UPON TO COMPLY WITH FURTHE R REQUIREMENTS TO COMPLETE RE-ASSESSMENT. 2. THE ABOVE LETTER, ON CLOSE EXAMINATION HAS BEEN FOUND TO HAVE MISSED OUT A MOST CRUCIAL FACT BROUGHT TO YOUR NOTICE THAT IT WAS NOT ONLY THE POWER OF ATTORNEY EXECUTED IN F AVOUR OF SHRI PARVEEN KUMAR TALWAR ON 21.11.2005, BUT SIMULTANEOU SLY AN AGREEMENT TO SELL WAS ALSO EXECUTED ON THE SAME VER Y DATE WITH HIS WIFE SMT NEELAM TALWAR, R/O 15/202A DOODHWALA B ANGLA, CIVIL LINES, KANPUR, FOR A TOTAL CONSIDERATION OF R S.19.50 LACS, BY VIRTUE OF WHICH, PHYSICAL POSSESSION OF THE DEMI SED PROPERTY WAS ALSO HANDED OVER TO THEM. THE ASSESSEE THUS PAR TED WITH ALL HER INTEREST IN THE SAID PROPERTY, AND THE SUBS EQUENT SALE, FOR WHICH THE IMPUGNED PROCEEDINGS HAVE BEEN INITIA TED, OUGHT TO HAVE BEEN EXAMINED IN THE CASE OF SAID BUYERS NA MELY SHRI PARVEEN KUMAR OR HIS WIFE SMT. NEELAM TALWAR. A COP Y OF THE AGREEMENT TO SELL DULY REGISTERED WITH THE OFFICE OF SUB- REGISTRAR, ALONGWITH THE ABOVE POA IN FAVOUR OF SH. PARVEEN KUMAR TALWAR WAS ALSO FILED ALONGWITH OUR OBJECTION S DATED 11.11.2003. ALSO PLEASE NOTE THAT NO PAYMENT BEYOND RS. 19.50 LACS WAS RECEIVED BY THIS ASSESSEE. AND THE B ALANCE PAYMENT AS PER THE SUBSEQUENT SALE DEED EXECUTED BY MR TALWAR, MUST HAVE GONE INTO HIS OR HIS WILES BANK ACCOUNTS, WHICH NEEDS TO BE VERIFIED AT HIS LEVEL BY HIS AO. I HEREFORE, IN SO FAR AS THE INCOME TAX LAW IS CONCERNED, THE TRANSF ER AS DEFINED IN CLAUSE (V) TO SECTION 2(47) WAS COMPLETE ON THE DATE OF EXECUTION OF SALE DEED ON 21.1 1.2005. FOR IMMEDIAT E REFERENCE, CLAUSE (V) TO SEC 2(47) READS AS UNDER: (V) ANY TRANSACTION INVOLVING THE ALLOWING OF THE P OSSESSION OF ANY IMMOVABLE PROPERTY TO BE TAKEN OR RETAINED IN P ART PERFORMANCE OF A CONTRACT OF THE NATURE REFERRED TO IN SECTION 53A OF THE TRANSFER OF PROPERTY ACT, 1882 (4 OF 1882); 2.1 APART FROM ABOVE, AS PER CLAUSE (I) AND CLAUSE (II) OF SEC.2(47) ALSO, RELINQUISHMENT OR EXTINGUISHMENT OF ANY RIGHTS IN THE PROPERTY ALSO AMOUNT TO 'TRANSFER. FURTHERM ORE, EXPLANATION 2 INSERTED BY THE FINANCE ACT,2012 W.R. E.F. 1.04.1962 HAS ALSO ENLARGED THE DEFINITION OF 'TRANSFER' BY INCLU DING AND DEEMED TO HAVE ALWAYS INCLUDED, DISPOSING OF OR PARTING WITH AN ASSET OR ANY INTEREST THEREIN OR CREATING ANY INTEREST IN ANY AS SET IN ANY MANNER WHATSOEVER DIRECTLY OR INDIRECTLY, ABSOLUTELY OR C ONDITIONALLY, VOLUNTARILY OR INVOLUNTARILY BY WAY OF AGREEMENT AN D (WHETHER ENTERED INTO IN INDIA OR OUTSIDE INDIA) OR OTHERWISE NOTWIT HSTANDING THAT SUCH TRANSFER OF RIGHTS HAS BEEN CHARACTERIZED AS BEING EFFECTED OR DEPENDENT UPON OR FLOWING FROM THE TRANSFER OF A SH ARE OR SHARES OF A COMPANY REGISTERED OR INCORPORATED OUTSIDE INDIA.) 2.2 IN VIEW OF THE ABOVE SPECIFIC PROVISIONS OF INC OME FAX ACT, AS ALSO THE LATEST EXPLANATION 2 INSERTED BY FINANCE ACT,2012 W.R.E.F. 1.04.1962, THE DECISION OL LLON'HLE APEX ITA NO.614 (ASR)/2014 ASST. YEAR:2009-10 13 COURT, IN THE CASE OF SURAI LAMP & INDUSTRIES P LTD V STATE OF HARYANA (2011) 202 FAXMAN 607(SQ, AS CITED BY YO U, IS NOT APPLICABLE IN INCOME TAX MATTERS. 3. IT IS ALSO CONTEXTUALLY RELEVANT TO INVITE ATT ENTION TO THE DECISION OF HONBLE BOMBAY HIGH COURT IN CHATUR BHUJ DWARIKADAS KAPADIA V CIT 260 ITR 491 (BORN) WHEREIN UNDER IDENTICAL FACTS AND CIRCUMSTANCES, THE TRANSF ER WAS HELD TO BE COMPLETE FOR LEVY OF CAPITAL GAIN TAX. INTERESTINGLY, THIS DECISION OF HONBLE BOMBAY HIGH COURT WAS GAINFULLY EMPLOYED BY THE DEPARTMENT, IN THE RE CENT PAST, IN ALL THE CASES OF THE MLAS BEING MEMBERS OF THE PUNJABI COOPERATIVE HOUSE BUILDING SOCIETY LIMITED, MOHALI, WHEN THE ENTIRE CAPITAL GAIN WAS BROUGHT TO TAX IN THE YEAR OF AGREEMENT EXECUTED ON 25.02.2007, WHEN THEY ENTERED INTO A TRIPARTITE JOINT DEVELOPMENT AGREEME NT WITH TWO OF THE DEVELOPERS, NAMELY TATA AND HASH BUILDER S, AND HANDED OVER POSSESSION FOR DEVELOPMENT AGAINST RECEIPT OF PART PAYMENT, EVEN WHEN REGISTERED SALES DEEDS FOR MAJOR PART OF LAND WERE YET TO BE EXECUTED AND PAYMENT WAS ALSO TO BE RECEIVED IN SUBSEQUENT YEARS. THE FI RST APPEALS OF ASSESSEES WERE DECIDED AGAINST THEM AND EVEN THE HON'BLE ITAT BENCH AT CHANDIAARH, VIDE ITS COMB INED ORDER DATED 29.07.2013 IN THE LEAD CASE OF SHRI C. S. ATWAL LTA.NO.448/CHD/201 I, CONFIRMED THE DECISION OF CIT (A) LUDHIANA. SO MUCH SO. THE ITAT AMRITSAR BENCH ALSO FOLLOWED THE SAID DECISION OF CHANDIGARH BENCH, TO DISMISS ALL THE APPEALS AS WERE BROUGHT BEFORE THE BENCH, A RISING OUT OF ORDERS OF C1T(A), JALANDHAR/AMRITSAR/BATHINDA. IMPORTANTLY, THE ASSESSEES RELIANCE ON HON'BLE APE X COURT DECISION, IN THE CASE OF SURAI LAMP & INDUSTRIES P LTD V STATE OF HARYANA (201 I) 202 TAXMAN 607(SC), WAS ALSO NOT ACCEPTED AS NOT APPLICABLE IN INCOME TAX MATTERS. 5. THEREFORE, IT IS REITERATED THAT PROCEEDINGS WRONGL Y INITIATED IN THIS CASE BE KINDLY- DROPPED AND FOR A LOGICAL CONCLUSION TO BE TAKEN IN THE INTEREST OF REVENUE, THE SAID PROCEEDINGS BE INITIATED AGAINST SHRI PARVEEN TALWA R AND HIS WIFE SMT. TALWAR. THANKING YOU, YOURS FAITHFULLY DATE: 24.02.2014 J S BHASIN ADVOCATE FORASSESSEE FROM THE ABOVE COMMUNICATION OF LETTERS BOTH BY ASS ESSEE AND ASSESSING OFFICER WE FIND THAT THE SECOND SET OF OB JECTIONS RELATING TO DEFINITION OF TRANSFER U/S 2(47) ALONGWITH ITS AMEN DMENT HAS NOT BEEN ITA NO.614 (ASR)/2014 ASST. YEAR:2009-10 14 DEALT WITH BY THE ASSESSING OFFICER BEFORE PROCEEDI NG TO COMPLETE ASSESSMENT U/S 147/148. THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF GKN DRIVESHAFTS (INDIA) LTD. VS. ITO & ORS. 259 ITR 19 HAS HELD THAT ON RECEIPT OF OBJECTIONS AGAINST THE REASONS R ECORDED FOR REOPENING THE ASSESSING OFFICER IS BOUND TO DISPOSE OFF THE SAME BY PASSING A SPEAKING ORDER. THE RELEVANT FINDINGS OF HONBLE COURT ARE REPRODUCED BELOW. WHEN A NOTICE UNDER SECTION 148 OF THE INCOME-TAX ACT, 1961, IS ISSUED, THE PROPER COURSE OF ACTION FOR THE NOTICE IS TO FILE THE RETURN AND, IF HE SO DESIRES, TO SEEK REASONS FOR ISSUING THE NOTICES. THE ASSESSING OFFICER IS BOUND TO FURNISH REASONS WITHI N A REASONABLE TIME. ON RECEIPT OF REASONS, THE NOTICE IS ENTITLED TO FI LE OBJECTIONS TO ISSUANCE OF NOTICE AND THE ASSESSING OFFICER IS BOUND TO DIS POSE OF THE SAME BY PASSING A SPEAKING ORDER. 11. THEREFORE, KEEPING IN VIEW THE JUDICIAL PRECEDE NTS AND IN THE INTEREST OF JUSTICE WE DEEM IT APPROPRIATE TO REMIT THIS ISSUE TO THE OFFICE OF ASSESSING OFFICER WHO SHOULD MAKE A FRESH ORDER AFTER DEALING WITH THE ASSESSEES OBJECTIONS IN HER LETTER DATED 24.2.2014 AND WE ORDER ACCORDINGLY. NEEDLESS TO SAY THAT ASSESSEE W ILL BE PROVIDED SUFFICIENT OPPORTUNITY OF BEING HEARD. 12. IN VIEW OF THE ABOVE, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH APRIL, 2016. SD/- SD/- (A.D.JAIN) (T.S.KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED:13.04.2016. /PK/PS. ITA NO.614 (ASR)/2014 ASST. YEAR:2009-10 15 COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL,