Dr. Baldev Raj Chawla, Amritsar. V. The Depty Commissioner of Income Tax, Amritsar.

ITA 639/ASR/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0781 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 11-05-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 27-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S KANWAL
• Assessee Lawyers: K R JAIN
• Keywords: Capital asset; Question of law

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. A.D. JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER ITA NO. 639(ASR)/2014 ASSESSMENT YEAR:2007-08 PAN: AAJPC5918J DR. BALDEV RAJ CHAWLA, VS. DY. COMMR. OF INCOME TA X, HATHI GATE, CIRCLE-1, AMRITSAR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH.K.R. JAIN, ADVOCATE RESPONDENT BY: SH. S.S. KANWAL, DR DATE OF HEARING: 11/05/2016 DATE OF PRONOUNCEMENT: 12/05/2016 ORDER PER A.D. JAIN, JM: THIS IS THE ASSESSEES APPEAL FOR THE ASSESSMENT Y EAR 2007-08, AGAINST THE CONFIRMATION OF CONCEALMENT PENALTY OF RS.44,09,225/- BY THE LD. CIT(A). 2. THE FACTS ARE THAT ON 25.02.2007 THE PUNJABI COO PERATIVE HOUSE BUILDING SOCIETY LTD., MOHALI OF WHICH THE ASSESSEE IS A MEMBER, ENTERED INTO A TRIPARTITE JOINT DEVELOPMENT AGREEMENT WITH M/S. HASH BUILDERS (P) LTD., CHANDIGARH AND TATA HOUSING DEVELOPMENT C OMPANY LTD., MUMBAI (BUILDERS) WHEREIN IT WAS AGREED UPON AMONG THESE PARTIES THAT THE PUNJABI COOPERATIVE HOUSE BUILDING SOCIETY LTD. , MOHALI, WHICH IS THE OWNER OF 21.2 ACRE LAND SHALL TRANSFER ITS LAND TO M/S. TATA HOUSING DEVELOPMENT COMPANY LTD., (THDCL FOR SHORT) AGAINST FIXED MONETARY ITA NO.639(ASR)/2014 ASSESSMENT YEAR 2007-08 2 CONSIDERATION (PAYABLE IN 3 INSTALLMENTS) AND CONSI DERATION IN KIND IN THE FORM OF ALLOTTING ONE AND/OR TWO READY-BUILT F LATS ERECTED BY THDCL IN THE VICINITY OF THE SAID LAND OF 21.2 ACRES @ O NE SUCH READY BUILT FLAT TO EACH MEMBER HOLDING 500/1000 SQ. YDS SHARE RESPE CTIVELY IN THE SAID LAND. IT WAS THE STAND OF THE AO THAT AS PER FACTS, THE LAND, AFTER ITS TRANSFER ON THE BASIS OF NOC/AFFIDAVIT EXECUTED BY EACH MEMBER OF THE PUNJABI SOCIETY IN FAVOUR OF THE OTHER PARTIES, I.E . HASH & THDCL AD ADMITTEDLY TWO INSTALLMENTS HAVING BEEN RECEIVED IN HONOUR OF THE TRIPARTITE AGREEMENT DATED 25.02.2007 (REFER CLAUSE 2.1 OF THE AGREEMENT IN PARTICULAR), THE LTC GAIN SHOULD HAVE BEEN SUO MOTO OFFERED FOR TAXATION AND PARTICULARS OF THIS TRANSACTION SHOULD HAVE BEEN DISCLOSED IN THE RETURN ITSELF. THE AO OBSERVED THAT IT WAS A N UNDISPUTED FACT EMERGING FROM THE MATERIAL AVAILABLE ON RECORD, WHI CH WAS PROCURED DURING ASSESSMENT PROCEEDINGS AND FROM OTHER CASES THAT IT WAS DULY AGREED UPON THAT THE ASSESSEE WOULD RECEIVE RS.82, 50,000/- IN ADDITION TO IT, ONE READY BUILT FLAT OF 2250 SQ. FTS WORTH R S.1,01,25,000/- (TOTALING RS.1,83,75,000/-) FROM HASH & THDCL (OTHER PARTIES) AND TRANSFER TOOK PLACE ON ADMITTEDLY RECEIPT OF AMOUNT BY THE ASSESS EE; THAT FURTHER, IT WAS A MATTER OF RECORD THAT THE PART CONSIDERATION HAS NOT BEEN RETURNED TO OTHER TWO PARTIES; NEVERTHELESS THE AGREEMENT HA S BEEN DISPUTED IN LITIGATION; AND THAT THIS CONSTITUTED A TRANSFER AS DEFINED IN SECTIONS 2(47)(V) & 2(47)VI) OF THE I.T.ACT, 1961 AND THE TR ANSACTION IN THE IMMOVABLE PROPERTY TO BE TAKEN OR RETAINED IN PART PERFORMANCE OF A ITA NO.639(ASR)/2014 ASSESSMENT YEAR 2007-08 3 CONTRACT OF THE NATURE REFERRED TO IN SEC. 53A OF T HE TRANSFER OF PROPERTY ACT, 1972. 3. THE ASSESSING OFFICER LEVIED CAPITAL GAIN TAX, W HICH WAS UPHELD UPTO THE STAGE OF THE TRIBUNAL. 4. THE PENALTY, IN QUESTION HAS BEEN LEVIED, AS AS SESSEE HAS NOT DISCLOSED CAPITAL GAIN ON TRANSFER OF LAND CONSIDER ING SECTION 2(47)(V) & (VI) OF THE INCOME TAX ACT, 1961. THE ASSESSEE HAS TRANSFERRED COMPLETE LAND TO THE BUYER, WHEREAS HE HAS SHOWN A VERY SMAL L PART OF THAT AS HAS BEEN SOLD. THUS, THEREBY FURNISHED INACCURATE PARTI CULARS OF CAPITAL GAIN ON SALE OF SUCH LAND. 5. BEFORE THE LD. CIT(A), THE ASSESSEE CONTENDED TH AT ON APPEAL BY THE ASSESSEE IN QUANTUM, THE HONBLE PUNJAB & HARYA NA HIGH COURT HAD ADMITTED THE QUESTION OF LAW; THAT AS SUCH THE ISSUE WAS DEBATABLE DUE TO WHICH NO CONCEALMENT PENALTY WAS LEVIABLE. 6. BY VIRTUE OF THE IMPUGNED ORDER, HOWEVER, THE LD . CIT(A) CONFIRMED THE PENALTY OBSERVING THAT THE AOS ACTION OF LEVY OF CAPITAL GAIN TAX WAS CONFIRMED UP TO THE STAGE OF THE APPELLATE TRIBUNAL AND THAT MERE ADMISSION OF APPEAL BY THE HONBLE HIGH COURT COULD NOT BE CONSIDERED AS RENDERING THE ISSUE DEBATABLE, AS THE AOS ACTIO N HAS BEEN CONFIRMED NOT ONLY BY THE LD. CIT(A) BUT BY THE TRIBUNAL ALSO . 7. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE HAS FILED COPIES OF HIGH COURT ORDER DATED 22.07.2017, PASSED IN THE ASSESSE ES APPEAL IN ITA NO.291 OF 2013 (O&M) WHEREIN, THE ORDER OF THE HON BLE HIGH COURT, ITA NO.639(ASR)/2014 ASSESSMENT YEAR 2007-08 4 PASSED ON 22.07.2015 IN THE CASE OF C.S. ATWAL VS. CIT, LUDHIANA AND ANOTHER, IN ITA NO.200 OF 2013 (O&M) SINCE REPORT ED AT 378 ITR 244, HAS BEEN FOLLOWED TO HOLD THAT THE ASSESSEE WAS NOT LIABLE TO CAPITAL GAIN TAX. 8. ON THE OTHER HAND, THE LD. DR HAS PLACED STRONG RELIANCE ON THE IMPUGNED ORDER. 9. THE ORDER IN C.S. ATWAL (SUPRA), WHICH HAS BEE N FOLLOWED IN THE ASSESSEES CASE, SHOWS THAT THE HONBLE HIGH COURT HAS HELD THAT THE ASSESSEE, AMONGST OTHERS, IS NOT LIABLE TO CAPITAL GAIN TAX. THEREFORE, THE ACTION OF THE AO IN LEVYING CAPITAL GAIN ON THE AS SESSEE IS NO LONGER RES- JUDICATA. THE PENALTY HAS ITS GENESIS IN THE LEVY O F CAPITAL GAIN TAX. SINCE CAPITAL GAIN TAX ITSELF DOES NOT SURVIVE, THE PENAL TY LEVIED WHICH, AUTOMATICALLY MEET THE SAME FATE. 10. FOR THE ABOVE DISCUSSION, THE PENALTY IS DELETE D. 11. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 12/05/ 2016. SD/- SD/- (T.S. KAPOOR) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 12/05/2016 COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE: DR. BALDEV RAJ CHAWLA, ASR. 2. THE DCIT, CIRCLE-1, ASR. 3. THE CIT(A), ASR. 4. THE CIT, ASR. 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER