ACIT, Chandigarh V. Sh. Janmeja Singh Sekhon, Chandigarh

ITA 654/CHANDI/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8982 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-11-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2007-2008
• Appeal Filed On: 30-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Section: 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO. 654/CHD/2016 ASSESSMENT YEAR: 2007-08 THE ACIT, VS SHRI JANMEJA SINGH SEKHON, CIRCLE 4(1), HOUSE NO. 961, SECTOR 39-A, CHANDIGARH. CHANDIGARH. PAN: AIEPS9906M (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI MANJIT SINGH RESPONDENT BY : SHRI SUNIL KUMAR DATE OF HEARING : 10.11.2016 DATE OF PRONOUNCEMENT : 11.11.2016 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 21.03. 2016 FOR ASSESSMENT YEAR 2007-08 ON THE FOLLOWING GROUND : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE CIT(A) HAS ERRED IN HOLDING THAT SECTION 2(47) OF T HE ACT DOES NOT APPLY TO THE CASE OF THE ASSESSEE DESPITE THE FACT THAT THE POSSESSION AS WELL AS THE RIGHTS IN THE PROPERTY WERE TRANSFER RED TO THE DEVELOPERS(TRANSFREE) BY WAY OF DULY REGISTERED IRR EVOCABLE SPECIAL POWER OF ATTORNEY AND THE JOINT DEVELOPMENT AGREEME NT ENTERED INTO BY THE ASSESSEE AND THE DEVELOPERS. 2 2. BRIEF FACTS OF THE CASE ON THIS ISSUE ARE THAT A HOUSING SOCIETY, NAMED AS THE PUNJABI CO-OP HOUSE BUILDING SOCIETY LTD., MOHALI (HEREINAFTER REFERRED TO AS 'SOCIETY') CONSISTING OF 95 MEMBERS WAS FORMED, WHI CH WAS THE OWNER OF 21.2 ACRES OF LAND IN VILLAGE KANS AL, DISTRICT MOHALI. THIS SOCIETY ENTERED INTO A TRIPAR TITE JOINT DEVELOPMENT AGREEMENT (HEREINAFTER REFERRED T O AS 'AGREEMENT') ON 25.02.2007 WITH M/S HASH BUILDERS P VT. LTD., CHANDIGARH (HEREINAFTER REFERRED TO AS 'HASH' ) AND M/S TATA HOUSING DEVELOPMENT COMPANY LTD., MUMBAI (HEREINAFTER REFERRED TO AS THDC), BY VIRTUE OF W HICH THE SOCIETY WOULD TRANSFER ITS LAND FOR DEVELOPMENT IN LIEU OF MONETARY CONSIDERATION AND ALSO CONSIDERATI ON IN KIND TO THE MEMBERS OF THE SOCIETY. THE ASSESSEE WA S ALSO A MEMBER OF THE SAID SOCIETY OWNING 500 SQ. YA RDS LAND. THE TOTAL CONSIDERATION WAS SETTLED AT RS. 82,50,000/- PLUS ALLOTMENT OF ONE FLAT OF 2250 SQ. FEET TO THE ASSESSEE. IN VIEW OF THE ABOVE REASONS, PROCEEDING U/S 147 WAS INITIATED AND NOTICE U/S 148 WAS ISSUED TO THE ASSESSEE ON 25.07.2013. IN RESPON SE TO NOTICE U/S 148 THE ASSESSEE FILED THE RETURN OF INCOME ON 12.11.2009 DECLARING TOTAL INCOME OF RS. 14,94,420/- HEREIN NO CAPITAL GAIN HAVE BEEN DECLAR ED WHICH INCLUDED CAPITAL GAINS OF RS. 13,49,044/-. 3. DURING THE APPELLATE PROCEEDINGS, ASSESSEE SUBMITTED THAT THERE ARE 95 MEMBERS OF THE SAID SOC IETY WHO FILED APPEAL ON IDENTICAL FACTS AND APPEALS HAV E 3 BEEN DECIDED BY HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF SHRI C.S.ATWAL ITA 200 OF 2013. THE LD. CIT(APPEALS) ON PERUSAL OF THE ORDER FOUND THAT ADD ITION ON ACCOUNT OF CAPITAL GAIN WAS MADE RELYING UPON OR DER OF ITAT CHANDIGARH BENCH IN THE CASE OF SHRI CHARAN JEET ATWAL AND ASSESSING OFFICER COMPUTED THE CAPITAL GA INS AT RS. 1.82 CR BY TAKING INTO CONSIDERATION RECEIVA BLE IN CASH AT RS. 82,50,000/- AND VALUE OF ONE FLAT OF 2 250 SQ.FT. @ RS. 4500/- SQ. FT. FOR RS. 1,01,25,000/-. THE ASSESSEE HAD DISCLOSED CAPITAL GAIN OF RS. 13,49,04 4/- IN HIS RETURN OF INCOME AS THE ASSESSEE HAD RECEIVE D RS. 25 LACS ONLY IN PURSUANCE TO THE SAID AGREEMENT. I T WAS, THEREFORE, SUBMITTED THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY ORDER OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF SHRI C.S.ATWAL DA TED 22.07.2015 WHICH IS REPRODUCED IN THE IMPUGNED ORDE R IN WHICH IT WAS HELD THAT SECTION 2(47)(V) OF THE A CT DOES NOT APPLY. THE LD. CIT(APPEALS) FOLLOWING THE JUDGEMENT OF THE HON'BLE PUNJAB & HARYANA HIGH COUR T IN THE CASE OF SHRI C.S.ATWAL (SUPRA) ALLOWED THIS GROUND OF APPEAL OF THE ASSESSEE HOLDING NO CAPITAL GAIN AROSE. 4. AFTER CONSIDERING RIVAL SUBMISSIONS, WE ARE OF T HE VIEW THAT ISSUE IS COVERED IN FAVOUR OF THE ASSESSE E BY JUDGEMENT OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF SHRI C.S.ATWAL (SUPRA). THE JUDGEMENT IS REPRODUCED IN THE IMPUGNED ORDER. NO INFIRMITY HAVE 4 BEEN POINTED OUT IN THE ORDER OF LD. CIT(APPEALS). THEREFORE, APPEAL OF THE REVENUE IS DISMISSED. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- ( ANNAPURNA GUPTA) (BHAVNESH S AINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 11 TH NOVEMBER, 2016. POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT,DR ASSISTANT REGISTRAR, ITAT/CHD