Sunil Kumar Suman, Haridwar V. ITO, Ward- 1(3)(3), Haridwar

ITA 6593/DEL/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 6794 (ITAT-DELHI)
• Duration Of Justice: 8 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2014-2015
• Appeal Filed On: 01-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K TEWARI
• Keywords: Sale consideration of property below Jantri Value; Capital asset
• Section: 50C

Judgement Text

ITA NO. 6593/DEL/2017 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: G NEW DELHI BEFORE SHRI G.D. AGRAWAL, HONBLE PRESIDENT & SHRI K. NARASIMHA CHARY, JUDICIAL MEMBER ITA NO.-6593/DEL/2017 ( ASSESSMENT YEAR: 2014-15) SUNIL KUMAR SUMAN GANGA VALLEY HOSPITAL, OPP. DESH RAKSHAK AUSHDHALAYA, KANKHAL ROAD, KANKHAL, HARIDWAR, UTTARAKHAND. PAN NO. AGPPS3086D VS ITO, WARD 1(3)(3), HARIDWAR. ASSESSEE BY SH. GAUTAM JAIN, ADV. REVENUE BY SH. K. TEWARI, SR. DR ORDER PER K. NARASIMHA CHARY, J.M. CHALLENGING THE ORDER DATED 19.09.2017 IN APPEAL NO . 10509/CIT(A)/DDN/2016-17 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)-DEHRADUN (LD. CIT(A)) FOR A. Y. 2014-15. 2. ENTIRE DISPUTE IN THIS MATTER REVOLVES AROUND TH E QUESTION AS TO WHETHER UNPAID SALE CONSIDERATION COULD BE BROUG HT TO TAX IN THE HANDS OF THE ASSESSEE. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND DERIVING INCOME FROM MEDICAL PROFESSION. HE FILED HIS RETURN OF INCOME ON 27.11 .2014 DECLARING A TOTAL INCOME OF RS. 10,17,000/-. DURING THE SCRU TINY PROCEEDINGS, THE ASSESSING OFFICER (THE AO) OBSER VED THAT THE ASSESSEE SOLD A LANDED PROPERTY FOR A SUM OF RS. 48 LAKHS ON DATE OF HEARING 12.07.2018 DATE OF PRONOUNCEMENT 12.07.2018 ITA NO. 6593/DEL/2017 2 14.06.2013 THROUGH A SALE DEED, WHEREAS ITS CIRCLE RATE AS ON THE DATE WAS RS. 94,28,000/-. ASSESSEE ADMITTED THE TR ANSACTION, BUT PLEADED THAT THE SALE CONSIDERATION WAS NOT REC EIVED IN TOTAL. LD. AO, HOWEVER, TOOK THE SALE CONSIDERATION U/S 50 C OF THE INCOME TAX ACT, 1961 (THE ACT) AT RS. 94,28,000/- AND AFTER REDUCING THE SALE SAME BY THE INDEXED COST OF THE A CQUISITION I.E. RS. 3,38,464/-, DETERMINED THE LONG TERM CAPITAL GA IN AT RS. 90,89,536/- AND ADDED IT BACK TO THE INCOME OF THE ASSESSEE. 3. IN APPEAL LD. CIT(A) CONCURRED THE FINDING OF TH E LD. AO THAT INASMUCH AS THE ASSESSEE DELIVERED THE PHYSICAL POS ITION OF THE PROPERTY PURSUANT TO THE REGISTERED CONVEYANCE DEED HAVING RECEIVED A PART OF CONSIDERATION, THE TRANSFER IN R ELATION TO THE CAPITAL ASSET AS PER SECTION 2(47)(V) OF THE ACT WA S COMPLETE. LD. CIT (A) FURTHER OBSERVED THAT BEFORE THE SUB-JUDGE, PATNA THE ASSESSEE FILED A SUIT PRAYING FOR THE RECOVERY OF M ONEY OF RS. 38,40,000/- WITH 18% COMPOUND INTEREST AND SOUGHT T HE RELIEF OF REALIZATION OF THE SAME BY WAY OF SALE OF THE PROPE RTIES OF THE PURCHASER. BASING ON THIS LD. CIT(A) FORTIFIED HIS CONCLUSION THAT THERE IS VALID TRANSFER OF PROPERTY. HE, THEREFORE , DISMISSED THE APPEAL SUSTAINING THE ADDITION. 4. HENCE, THE ASSESSEE IS IN THIS APPEAL BEFORE US STATING THAT THE NON-RECEIPT OF THE ENTIRE SALE CONSIDERATION DO ES NOT ADMIT OF ANY DOUBT AND THE ISSUE OF SALE OF LAND IS SUB-JUDI CE. IT IS FURTHER STATED THAT IN THE ABSENCE OF THE RECEIPT OF SALE C ONSIDERATION THERE IS NO REAL INCOME TO BE BROUGHT TO TAX. THE ASSESSEE FURTHER CHALLENGED THE ACTION OF THE AO IN INVOKING THE PRO VISIONS U/S 50C OF THE ACT TO ADOPT THE FULL VALUE OF CONSIDERA TION AT RS. ITA NO. 6593/DEL/2017 3 94,28,000/- DESPITE THE FACT THAT ACTUAL AGREED CON SIDERATION WAS RS. 48 LAKHS OUT OF WHICH ONLY RS. 9,60,000/- WAS R ECEIVED. 5. LD. AR BASING ON HIS ARGUMENT ON TWO ASPECTS. FI RSTLY, THAT THE PROPERTIES DO NOT NECESSARILY PASSED AS SOON AS THE INSTRUMENT IS REGISTERED, FOR THE TRUE TEST IS THE INTENTION OF THE PARTIES. NEXTLY, HE SUBMITTED THAT THE INCOME FROM CAPITAL GAIN ON A TRANSACTION WHICH IS NOT FINALIZED IS AT BEST A HYPOTHETICAL INCOME AND CANNOT BE BROUGHT TO TAX. FOR THE PURPO SE, HE PLACED A RELIANCE ON THE DECISIONS REPORTED IN SMT. RAJ RA NI DEVI RAMANA (1993) 201 ITR 1032 (PATNA) AND CIT VS. BALB IR SINGH MAINI (2017) 398 ITR 531 (SC). 6. PER CONTRA, THE LD. DR SUBMITTED THAT IN THIS MA TTER HAVING RECEIVED A PART OF CONSIDERATION THE ASSESSEE DELIV ERED THE POSSESSION OF THE PROPERTY AND ALSO EXECUTED THE RE GISTERED INSTRUMENT, AS SUCH, AS RIGHTLY POINTED OUT BY THE AUTHORITIES BELOW THE TRANSFER U/S 2(47)(V) OF THE ACT. HE FUR THER SUBMITTED THAT THE DECISIONS RELIED UPON THE ASSESSEE HAVE NO APPLICATION TO THE FACTS OF THE CASE. 7. WE HAVE GONE THROUGH THE RECORD IN THE LIGHT OF THE SUBMISSIONS ON EITHER SIDE. IN THIS MATTER THE SAL E DEED IS TO BE FOUND AT PAGE NO. 109 OF THE PAPER BOOK. IT CLEARLY SHOWS THAT IN VIEW OF THE URGENT NEED OF MONEY THE PLAINTIFF TOOK THE PROPERTY TO SALE AND PURSUANT TO THE AGREEMENT SETTLED WITH ONE NEW TECH RESIDENCY PVT. LTD. FOR RS. 48 LAKHS THE PLAINTIFF RECEIVED ONE CHEQUE BEARING NO. 129 DATED 13.06.2013 FOR RS. 9,6 0,000/-, EXECUTED THE SALE DEED DATED 14.06.2013 AND RECEIVE D THE BALANCE ITA NO. 6593/DEL/2017 4 SALE CONSIDERATION BY WAY OF POST DATED CHEQUES EAC H FOR RS. 9,60,000/-. 8. BOTH THE AUTHORITIES BELOW RECORDED IN THEIR RES PECTIVE ORDERS THAT THE PLAINTIFF PRODUCED THE DOCUMENTS ES TABLISHING THE LITIGATION BETWEEN THE ASSESSEE AND THE PURCHASER I N RELATION TO THE LAND AND THE IMPUGNED SALE, AND AS A MATTER OF FACT THE PLAINTIFF FILED A SUIT WITH FILE ON THIS SUB-COURT- 1, PATNA CITY IN TITLE SUIT NO. 12 OF 2017, WHERE UNDER HE PRAYED TO PASS A DECREE FOR ANNULMENT OF THE SALE DEED AND TO DECLARE THAT THE DEFENDANTS THEREIN DID NOT ACQUIRE ANY RIGHT TITLE INTEREST AN D POSSESSION ON THE BASIS OF SUCH SALE DEED. THOUGH THE PLAINTIFF PRAYED FOR THE ALTERNATIVE RELIEF OF DECREE FOR MONEY THE FACT REM AINS THAT THE PLAINTIFF DID NOT RECEIVE THE FULFILL CONSIDERATION . IN SMT. RAJ RANI DEVI RAMANA (SUPRA) THE HONBLE PATNA HIGH COURT HE LD THAT THE PROPERTIES DO NOT NECESSARILY PASS AS SOON AS THE I NSTRUMENT IS REGISTERED, BUT THE REAL TEST IS THE INTENTION OF T HE PARTIES. SO ALSO, IN BALBIR SINGH MAINIS CASE IT WAS HELD THAT THE INCOME FROM CAPITAL GAIN ON A TRANSACTION WHICH NEVER MATE RIALIZED IS A HYPOTHETICAL INCOME. 9. IN THIS CASE ALSO, THE ASSESSEE PLEADS THAT HE H AS RECEIVED ANY INCOME EXCEPT RS. 9,60,000/- TOWARDS THE SALE C ONSIDERATION AND THE ENTIRE BALANCE SALE CONSIDERATION IS IN LIT IGATION AND THE ALLEGED TRANSFER IS ALSO DIRECTLY AND SUBSTANTIALLY INVOLVED IN THE SUB-COURT, PATNA. IN THE CIRCUMSTANCES, ACCORDING TO US FACTUAL FINDINGS ARE NECESSARY AS TO THE INTENTION OF THE P ARTIES, NAMELY, WHETHER THEY REALLY INTEND THE TRANSFER TO BE FINAL IZED. SINCE MERE READING OF THE SALE DEED DOES NOT MAKE THE THINGS C LEAR, WE DEEM IT JUST AND NECESSARY THAT THE EXAMINATION OF PARTI ES IS NECESSARY ITA NO. 6593/DEL/2017 5 TO CULL OUT SUCH AN INTENTION TO BE ACTED UPON. FO R THIS FACT FINDING, WE DEEM IT NECESSARY TO REMAND THIS MATTER TO THE FILE OF THE AO FOR EXAMINATION OF THE PARTIES AND TO READ T HE SALE DEED IN THE LIGHT OF SUCH STATEMENTS TO DECIDE THE FACT WHE THER THE SALE IS INTENDED TO BE FINALIZED BY THE PARTIES OR NOT. TH IS IS MORE PARTICULARLY IN VIEW OF THE FACT THAT NO SALE CONSI DERATION WAS RECEIVED BY THE ASSESSEE EXCEPT RS. 9,60,000/-. 10. IN THESE CIRCUMSTANCES AND FOR THIS PURPOSE, WE SET ASIDE THE IMPUGNED ORDER AND REMAND THE ISSUE TO THE FILE OF THE AO FOR DETERMINING THE QUESTION OF FACT AS TO THE TRANSFER OF PROPERTY AFTER AFFORDING AN OPPORTUNITY TO THE ASSESSEE. WE ANSWER THE ISSUE ACCORDINGLY. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 12.07.2018 SD/- SD/- (G.D. AGRAWAL) (K. NARSIMHA CHA RY) PRESIDENT JUD ICIAL MEMBER DATED: 12.07.2018 *KAVITA ARORA COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI ITA NO. 6593/DEL/2017 6 DATE OF DICTATION 12.07.2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 12.07.2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P S/PS 12.7.18 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 12.7.18 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS 12.7.18 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WE BSITE OF ITAT 12.7.18 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 12.7 .18 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER