Sh. Aniruddha Yadav, Noida V. ACIT, Noida

ITA 6768/DEL/2014

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 1207 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 3 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 15-12-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: JANARDAN DAS
• Keywords: Capital asset; Gift
• Section: 143(3); 54F; 6

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: A, NEW DELHI BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ITA NO. 6768/DEL/2014 ASSESSMENT YEAR: 2011-12 ANIRUDDHA YADAV, VS. ACIT, CIRCLE-1, P-500, SECTOR-21, NOIDA JALVAYU VIHAR, NOIDA (PAN: ACJPY9604M) (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. SATYEN SETHI, ADV. REVENUE BY : SH. JANARDAN DAS, SR. DR. ORDER PER H.S. SIDHU, JM THE ASSESSEE HAS FILED THE APPEAL AGAINST THE ORDE R DATED 4.8.2014 OF THE LD. CIT(A), NOIDA PERTAINING TO ASSESSMENT Y EAR 2011-12 ON THE FOLLOWING GROUNDS:- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE COMMISSIONER OF INCOME TAX (APPEALS), NOIDA [BRIEFLY THE CIT(A)] HAS ERRED IN DIRECTING THE ASSESSING OFFICER THAT THE CAPITAL GAINS ON SALE OF IMMOVABLE PROPERTY SITUATE AT NAGPUR BE ASSESSED TO TAX IN THE ASSESSMENT YEAR 2008-09. 2 1.1 THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE DIRECTION ISSUED BY THE CIT(A) TO ASSESS THE CAPITAL GAINS IN THE ASSESSMENT YEAR 2008-09 WAS UNWARRANTED, UNNECESSARY AND WAS NOT REQUIRED FOR THE DISPOSAL OF APPEAL. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) HAS ERRED IN RECORDING THE FINDING THAT THE CAPITAL GAINS ON SAL E OF LAND HAD ARISEN DURING THE PREVIOUS YEAR RELEVANT T O THE ASSESSMENT YEAR 2008-09. 2.1 THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) FAILED TO APPRECIATE THAT THE PROCEEDINGS INITIATED BY THE ADDITIONAL COLLECTOR URBAN LAND CEILING HOLDING, NAGPUR HAD CLOUDED THE ENTIRE TRANSACTION OF SALE AND THE CLOUD WAS LIFTED ONLY ON 20.4.2010, WHEN TH E WRIT PETITION CHALLENGING THE ORDER PASSED UNDER TH E URBAN LAND CEILING ACT WAS ALLOWED AND THE TRANSACTION OF SALE WAS COMPLETED ONLY DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR 2008- 09. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) HAS ERRED IN HOLDING THAT THE APPELLANT ASSESSEE WAS NOT ENTITLED TO THE DEDUCTION OF RS.59,56,561/- UNDER SECTION 54F OF TH E INCOME TAX ACT, 1961 (BRIEFLY THE ACT) ON ACCOUNT OF INVESTMENT IN RESIDENTIAL HOUSE PROPERTY. THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEN D OR VARY ANY OF THE GROUND EITHER AT OR BEFORE THE HEARING OF THE APPEAL. 3 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E BEING AN INDIVIDUAL FILED HIS RETURN OF INCOME FOR A.Y. 2011-12 DECLARI NG TAXABLE INCOME OF RS.10,25,46,114/- ON 29/7/2011. THE RETURN OF THE ASSESSEE WAS PROCESSED U/S. 143(1)(A) OF THE INCOME TAX ACT, 196 1 (IN SHORT ACT) AND WAS SUBSEQUENTLY SELECTED FOR SCRUTINY. THE ASS ESSMENT U/S. 143(3) OF THE ACT WAS COMPLETED VIDE ORDER DATED 30/12/201 3 AFTER DISALLOWING DEDUCTION AMOUNTING TO RS. 59,56,561/- CLAIMED BY T HE ASSESSEE U/S. 54F OF THE I.T. ACT. ACCORDINGLY TAXABLE INCOME WAS ASS ESSED AT RS.10,85,02,675/- AS AGAINST THE RETURNED INCOME OF RS.10,25,46,114/-. AGGRIEVED WITH ABOVE DISALLOWANCE THE ASSESSEE APPE ALED BEFORE THE LD. CIT(A), WHO VIDE HIS IMPUGNED ORDER DATED 4.8.2014 HAS DISMISSED THE APPEAL OF THE ASSESSEE. AGAINST THE IMPUGNED ORDER DATED 4.8.2014, ASSESSEE IS IN APPEAL BEFORE US. 3. DURING THE HEARING, LD. COUNSEL FOR THE ASSESSEE HAS STATED THAT THE LD. CIT(A) HAS ERRED IN DIRECTING THE ASSESSING OFF ICER THAT THE CAPITAL GAINS ON SALE OF IMMOVABLE PROPERTY SITUATE AT NAGP UR BE ASSESSED TO TAX IN THE ASSESSMENT YEAR 2008-09. HE FURTHER SUBMITTE D THAT THE DIRECTION ISSUED BY THE LD. CIT(A) TO ASSESS THE CAPITAL GAIN S IN THE ASSESSMENT YEAR 2008-09 WAS UNWARRANTED, UNNECESSARY AND WAS N OT REQUIRED FOR THE DISPOSAL OF APPEAL. IT WAS ALSO SUBMITTED THAT LD. CIT(A) HAS WRONGLY RECORDED THE FINDING THAT THE CAPITAL GAINS ON SALE OF LAND HAD ARISEN DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR 2008-09. HE FURTHER SUBMITTED THAT LD. CIT(A) HAS IGNORED THE FACT THAT THE PROCEEDINGS INITIATED BY THE ADDITIONAL COLLECTOR U RBAN LAND CEILING 4 HOLDING, NAGPUR HAD CLOUDED THE ENTIRE TRANSACTION OF SALE AND THE CLOUD WAS LIFTED ONLY ON 20.4.2010, WHEN THE WRIT PETITIO N CHALLENGING THE ORDER PASSED UNDER THE URBAN LAND CEILING ACT WAS ALLOWED AND THE TRANSACTION OF SALE WAS COMPLETED ONLY DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR 2008-09. IT WAS FURTHER SUBMITTED T HAT LD. CIT(A) HAS WRONGLY HELD THAT THE ASSESSEE WAS NOT ENTITLED TO THE DEDUCTION OF RS.59,56,561/- UNDER SECTION 54F OF THE INCOME TAX ACT, 1961 ON ACCOUNT OF INVESTMENT IN RESIDENTIAL HOUSE PROPERTY . HE FURTHER SUBMITTED THAT CAPITAL GAIN CANNOT ARISE IN THE ASSESSMENT Y EAR 2008-09 BECAUSE THE ASSESSEE WAS NOT OWNER OF THE SAID PROPERTY. H ENCE, THE QUESTION OF THE SAID PROPERTY BY THE ASSESSEE DOES NOT ARISE. I T IS ON RECORD THAT THE ASSESSEE WAS NOT ONE OF THE VENDORS IN THE AGREEMEN T FOR SALE DATED 30.4.2017. IT WAS FURTHER SUBMITTED THAT IN CASE I T IS HELD THAT CAPITAL GAIN HAD ARISEN IN THE ASSESSMENT YEAR 2008-09, THE N THE INCOME OFFERED CANNOT BE TAXED IN THE HANDS OF THE ASSESSEE, FOR A S ON 30.4.2007, THE ASSESSEE WAS NOT THE OWNER OF THE SAID PROPERTY AND HE COULD NOT HAVE PASSED ANY TITLE TO THE BUYER M/S HAGWOOD COMMERCI AL DEVELOPERS PVT. LTD. IT WAS FURTHER SUBMITTED THAT CAPITAL GAIN WAS RIGHTLY OFFERED TO TAX IN THE ASSESSMENT YEAR 2010-11, FOR THE ASSESSEE BECAM E ONE HALF OF 20% SHARE OF THE SAID PROPERTY ON 3.1.2009 I.E. AFTER D EMISE OF HER MOTHER AND TRANSFERRED HIS SHARE IN THE PROPERTY AS A VEND OR ONLY BY THE RECTIFICATION CUM CONFIRMATION AGREEMENT. IN VIEW OF ABOVE, HE STATED THAT IT IS WELL SETTLED THAT IF A PARTICULAR INCOME WAS NOT TAXABLE UNDER THE ACT, IT CANNOT BE TAXED MERELY BECAUSE THE SAME WAS DECLARED AS INCOME 5 AND DOCTRINE OF ESTOPPEL IS NOT APPLICABLE TO TAX T HE INCOME, WHICH IS OTHERWISE NOT TAXABLE AND IN SUPPORT OF THIS VIEW H E RELIED UPON THE DECISION OF GKW LTD. VS. CIT 92012) 347 ITR 429 (CA L.) AT PAGE 438 AND DY. CIT VS. SANMUKHDAS WADHWANI (2003) 85 ITD 734 ( NAG.) AT PAGE 743. 4. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND STATED THAT THEY HAVE PASSED WELL REASO NED ORDERS, WHICH DO NOT NEED ANY INTERFERENCE AND NEEDS TO BE UPHELD. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORDS ESPECIALLY THE IMPUGNED ORDER AND THE RIVAL SUBMISSIONS, WE N OTE THAT DURING THE ASSESSMENT YEAR 2011-12 THE TOTAL INCOME AS DECLARE D BY THE ASSESSEE WAS RS. RS. 9,71,37,248/- ON ACCOUNT OF INCOME FROM CAPITAL GAIN AND RS. 54,08,866/- ON ACCOUNT OF INCOME FROM OTHER SOURCE S. IN THE RETURN THE ASSESSEE HAS DECLARED LONG TERM CAPITAL GAINS ARISI NG FROM SALE OF LAND BEARING KHASRA NOS,,25,29 & 30, PATWARI HALKA NO.43 , MOUZA CHICHBAVAN TEHSIL, AND DIST, NAGPUR BEING 50% SHARE OF 1/5 TH SHARE OF RS.105 CRORES AS PER AGREEMENT FOR SALE REGISTERED VIDE SERIAL NO . AS PER 2548/2007 DATED 30/4/2007 BEFORE JOINT SUB-REGISTRAR, NAGPUR. OUT OF TOTAL SALE CONSIDERATION OF RS. 105.0 CRORES THE APPELLANT REC EIVED RS. 10.5 CRORES AS HIS SHARE AND DECLARED LONG TERM CAPITAL GAINS A MOUNTING RS. 10,30,93,809/- OUT OF WHICH AN AMOUNT OF RS. 59,56, 561/- WAS CLAIMED AS DEDUCTION U/S. 54F WITH RESPECT TO INVESTMENT MA DE IN RESIDENTIAL HOUSE IN BHOPAL ON 7/1/2011. WE FURTHER NOTE THAT AS PER PROVISIONS OF 6 SECTION 54F THE DEDUCTION IS ADMISSIBLE IN RESPECT OF CAPITAL GAINS ARISING FROM TRANSFER OF LONG TERM CAPITAL ASSET PROVIDED T HE ASSESSEE HAS WITHIN THE PERIOD OF ONE YEAR BEFORE OR TWO YEARS AFTER TH E DATE OF SUCH TRANSFER PURCHASED A RESIDENTIAL HOUSE. ON PERUSAL OF RELEVANT MATERIAL AVAILABLE ON RECORD IT IS NOTICED THAT THE AGREEMEN T FOR SALE BETWEEN THE VENDORS (INCLUDING ASSESSEE) AND THE BUYERS GOT REG ISTERED ON 30/4/2007 BY WHICH DATE THE VENDOR RECEIVED RS. 90 CRORES (OU T OF TOTAL CONSIDERATION OF RS. 105 CRORES) BY WAY OF DD WHERE AS AGAINST BALANCE AMOUNT OF RS. 15 CRORES THE BUYER FURNISHED BANK GU ARANTEE TO THE VENDOR BY VIRTUE OF WHICH THE BANK WAS SUPPOSED TO UNCONDITIONALLY PAY THE SAID AMOUNT OF RS. 15 CRORES AT ANY TIME ON/OR AFTER 1-1-2008 AGAINST THE DEMAND MADE BY THE VENDOR. IN CONSIDERA TION OF ABOVE PAYMENT OF RS. 90 CRORES BY WAY OF DD AND FURNISHIN G OF BANK GUARANTEE OF RS. 15 CRORES, THE VENDOR PUT THE PURCHASER IN Q UIET, VACANT, AND PEACEFUL POSSESSION OF THE SAID PROPERTY ON OR BEFO RE THE DATE OF REGISTRATION OF AGREEMENT FOR SALE (I.E. 30/4/2007) AND THE PURCHASER BECAME ENTITLED TO ITS SOLE, EXCLUSIVE AND ABSOLUTE USE, OCCUPATION AND POSSESSION WITHOUT ANY HINDRANCE/OBJECTION/ OBSTRUC TION FROM THE VENDOR. FROM ABOVE IT IS CLEAR THAT IN CONSIDERATION OF PAY MENT OF SUBSTANTIAL PART OF TOTAL CONSIDERATION AND FURNISHING OF BANK GUARA NTEE THE VACANT AND PEACEFUL POSSESSION WAS HANDED OVER TO THE PURCHASE R BY VIRTUE OF WHICH THE PURCHASER HAD STARTED ENJOYING SUBSTANTIAL DOMA IN OVER THE SAID PROPERTY. FURTHER THE VENDORS ALSO REPRESENTED BEFO RE THE BUYER THAT THEY ARE NOT RESTRICTED/RESTRAINED UNDER INCOME TAX ACT, GIFT TAX ACT, URBAN 7 LAND (CEILING AND REGULATION ACT) AND ANY OTHER ACT S ETC. ON CAREFUL EXAMINATION OF ABOVE FACTS AND IN THE LIGHT OF PROV ISIONS OF SECTION 2(47)(V) OF INCOME TAX ACT, IN THE PRESENT CASE TR ANSFER OF LAND HAS TAKEN PLACE ON 30/4/2007 WHEN AGREEMENT FOR SALE GOT REGISTERED AND CAPITAL GAINS ON SALE OF PROPERTY HAS ALSO ARISEN D URING THE F.Y. 2007-08 TO BE TAXED IN A.Y. 2008-09 ONLY. FURTHER IN THE L IGHT OF PROVISIONS OF SECTION 54F THE DEDUCTION COULD HAVE BEEN CLAIMED O NLY WHEN THE PURCHASE OF NEW HOUSE WAS MADE BETWEEN THE PERIOD F ROM 30/4/2006 TO 30/4/2009 IN THIS CASE. SINCE THE ASSESSEE HAS PURC HASED NEW RESIDENTIAL HOUSE AT BHOPAL ONLY ON 7/1/2011, THE LD. CIT(A) HA S RIGHTLY HELD THAT ASSESSEE WAS NOT ENTITLED TO DEDUCTION U/S. 54F SIN CE THE INVESTMENT WAS NOT MADE WITHIN THE AFORESAID TIME PERIOD. REGARDI NG DISPUTE RAISED BY THE URBAN LAND CEILING AUTHORITY, WE FIND THAT AS ON THE DATE OF TRANSFER I.E. 30/4/2007 THERE WAS NO DISPUTE REGARDING ENTIT LEMENT OF SELLER TO SALE THE PROPERTY AND THAT VENDORS (INCLUDING ASSESSEE) WERE NOT RESTRICTED/RESTRAINED UNDER INCOME TAX ACT, GIFT TA X ACT OR URBAN LAND (CEILING AND REGULATION ACT.) ETC. THIS FACT ALSO G OT RECORDED AT PAGE 23 OF AGREEMENT FOR SELL. HOWEVER SUBSEQUENTLY DISPUTE WAS RAISED BY URBAN LAND CEILING AUTHORITY REGARDING APPLICABILITY OF P ROVISIONS OF URBAN LAND CEILING ACT AGAINST WHICH THE ASSESSEE FILED WRIT P ETITION BEFORE HONBLE HIGH COURT, MUMBAI WHICH DECIDED THE ISSUE IN FAVOU R OF THE ASSESSEE. AS SUCH, THE AGREEMENT FOR SALE DATED 31/4/2007 STANDS COMPLETELY VALID FOR THE PURPOSE OF DECIDING THE TAXABILITY OF CAPITAL G AINS AND CLAIM FOR DEDUCTION U/S. 54F OF THE I.T ACT. THE TIME PERIOD BETWEEN RAISING OF 8 DISPUTE BY URBAN LAND CEILING AUTHORITY AND DECISIO N OF HON'BLE HIGH COURT OF MUMBAI DID NOT APPEAR TO HAVE ANY BEARING ON THE ASSESSMENT PROCEEDINGS INITIATED BY THE AO ACCORDING TO RELEVA NT PROVISIONS OF I.T. ACT. IN THIS REGARD IT IS ALSO RELEVANT TO NOTICE T HE FACT THAT NEITHER THE BUYERS OF THE PROPERTY NOR THE AO WERE MADE PARTIES TO THE WRIT PETITION DECIDED BY THE HONBLE HIGH COURT OF MUMBAI AND THE RE WAS NO STAY ON AO AGAINST INITIATING ASSESSMENT PROCEEDING SO AS T O ASSESS AND TAX CAPITAL GAIN ARISING ON TRANSFER OF ABOVE LAND AS P ER RELEVANT PROVISIONS OF INCOME TAX ACT, 1961 IN THE HANDS OF SELLER. SIMILA RLY THE HONBLE MUMBAI HIGH COURT ALSO DID NOT PUT ANY RESTRICTION ON THE BUYERS AGAINST ABSOLUTE USE, OCCUPATION AND POSSESSION OF THE SAID PROPERTY WITHOUT ANY HINDRANCE. TAKING INTO THE CONSIDERATION THE ABOVE FACTS, THE SUBSEQUENT DISPUTE BETWEEN THE VENDOR (INCLUDING MY ASSESSEE) AND URBAN LAND CEILING AUTHORITY DID NOT HAVE BEARING ON ASSESSMEN T PROCEEDING INITIATED BY THE AO. THEREFORE, LD. CIT(A) HAS RIGHTLY HELD T HAT THE DATE OF 'TRANSFER' HAS TO BE TAKEN AS 30/4/2007 AND ACCORDI NGLY THE CLAIM FOR DEDUCTION U/S. 54F MADE BY THE ASSESSEE WAS RIGHTLY REJECTED BY THE AO. SINCE THE 'TRANSFER' HAS BEEN HELD BY THE LD. CIT(A ) HAVE TAKEN PLACE WITHIN THE MEANING OF THE TERM TRANSFER AS DEFINE D IN SECTION 2(47)(V) OF THE I.T. ACT ON 30.4.2007, THE LONG TERM CAPITAL GA INS ARISING FROM SALE OF PROPERTY HAS TO BE TAXED IN AY 2008-09 AND NOT IN ASSESSMENT YEAR 2011-12 AS HAS BEEN WRONGLY DONE BY THE AO IN THIS CASE. HENCE, THE AO WAS RIGHTLY DIRECTED TO TAKE NECESSARY ACTION FOR T AXING THE LONG TERM CAPITAL GAINS IN ASSESSEE'S HAND IN A.Y. 2008-09 AS PER RELEVANT 9 PROVISIONS OF THE ACT AND TO DEAL WITH THE CLAIM FO R DEDUCTION U/S. 54F OF THE I.T. ACT, WHICH DOES NOT NEED ANY INTERFERENCE ON OUR PART, THEREFORE, WE UPHOLD THE ORDER OF THE LD. CIT(A) ON THE ISSUES IN DISPUTE AND REJECT THE GROUNDS RAISED BY THE ASSESSEE. ALSO THE CASE LAWS CITED BY THE LD. COUNSEL FOR THE ASSESSEE ARE ON DISTINGUISHED FACTS . 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON 19-03-2019. SD/- SD/- [N.K. BILLAIYA] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 19/03/2019 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4.CIT (A) 5. D R, ITAT BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES