MR. MUKESH BIRLA, Indore V. THE ACIT RANGE 3, Indore

ITA 7/IND/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2350 (ITAT-INDORE)
• Duration Of Justice: 3 year(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 05-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: C P RAWKA
• Keywords: Sale consideration of property below Jantri Value; Capital asset
• Section: 143(3); 50C

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCHE, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO.07/IND/2015 ASSESSMENT YEAR: 2011-12 MR. MUKESH BIRLA, SASKAR BHAWAN, 21/4, RATLAM KOTHI, MAIN ROAD, INDORE, / VS. ACIT, RANGE - 3, INDORE ( REVENUE ) ( RESPONDENT ) P.A. NO. ACFPB4566M APPELLANT BY SHRI C. P. RAWKA, CA RESPONDENT BY SHRI RAJIV JAIN, SR. DR DATE OF HEARING: 03.01.2018 DATE OF PRONOUNCEMENT: 19 .01.2018 / O R D E R PER KUL BHARAT, J.M: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX(APPEALS)-I, INDORE, (IN SHORT CIT(A)), DATED 30.09.2014 PERTAINING TO A.Y. 2011-12. THE AS SESSEE HAS RAISED FOLLOWING ORIGINAL GROUNDS OF APPEAL: IT IS SUBMITTED THAT ASSESSEE HAS SOLD THE PROPERT Y DURING THE PERIOD RELEVANT TO A.Y. 2010-11. THE DEDUCTION WAS EXECUTED AND PRESENTED TO SUB REGISTRAR OF THE PROPERTY WELL BEFORE THE 31.03.2010. HOWEVER, DUE TO SOME REASONS THE REGIST RATION MUKESH BIRLA 2 COULD NOT BE COMPLETED BEFORE THE ABOVE DATE. THERE FORE, THE ASSESSEES CASE IS THAT THE TRANSFER HAD TOOK PLACE DURING THE PERIOD RELEVANT A.Y.2010-11 AS AGAINST WHICH LD. AS SESSING OFFICER AS WELL AS LD. COMMISSIONER OF INCOME TAX(A PPEAL) HAVE ASSESSED THE CAPITAL GAIN IN THE ASSESSMENT YEAR 20 11-12 WHICH IS AGAINST THE LEGAL POSITION ON THE SUBJECT MATTER. WITHOUT PREJUDICE TO THE ABOVE IT IS SUBMITTED THAT THE NET CONSIDERATION OF SALE OF PROPERTY AMOUNTS TO RS.29, 00,000/-, OUT OF WHICH RS.28,24,000/- HAVE BEEN INVESTED IN P URCHASE OF RESIDENTIAL UNIT AT 21/4, RATLAM KOTHI, INDORE. A C OPY OF THE LEDGER ACCOUNT OF THE NEW ASSET IS SUBMITTED HEREWI TH FOR READY REFERENCE PLEASE. IN ADDITION TO THE ABOVE GROUNDS OF APPEAL THE ASSE SSEE HAS ALSO RAISED FOLLOWING ADDITIONAL GROUND OF APPEAL: ON THE ADDITIONAL GROUND: FACTS AND CIRCUMSTANCES OF THE CASE, LD. AO AS WELL AS LD. COMMISSIONER OF INCOME TAX (APPEAL) ERRED IN ASSESSING THE CAPITAL GAIN WITHOU T APPRECIATING THAT, THE NET CONSIDERATION HAS BEEN INVESTED IN TH E ASSET SPECIFIED IN THE SECTION 54F. THEREFORE PROVISION O F SECTION 50C DOES NOT APPLY. 2. BRIEFLY STATED FACTS IN PRESENT APPEAL ARE THAT THE APPLICATION OF THE ASSESSEE WAS TOOK UP FOR SCRUTINY ASSESSMENT AN D THE ASSESSMENT U/S 143(3) OF THE ACT 1961(HEREINAFTER R EFERRED AS THE ACT) WAS FRAMED VIDE ORDER DATED 31.12.2013. THE ASSESSING OFFICER WHILE FRAMING THE ASSESSMENT MADE ADDITION OF RS.24 ,18,650/- ON ACCOUNT OF LONG TERM CAPITAL GAIN. AGAINST THIS THE ASSESSEE IS IN FURTHER APPEAL. 3. APROPOS GROUND NO.1 THE LD. COUNSEL FOR THE ASSE SSEE SUBMITTED THAT THE AUTHORITIES BELOW FAILED TO APPRECIATE THE FACTS THAT THE TRANSFER HAD TAKEN PLACE IN EARLIER YEAR. THE ASSES SEE HAD DULY MUKESH BIRLA 3 OFFERED GAIN ARISING OUT OF THAT IN THE ASSESSMENT YEAR 2010-11. HE SUBMITTED THAT THE SALE DEED WAS PRESENTED FOR REGI STRATION ON 31 ST MARCH, 2010. THE ENTIRE PAYMENT OF SALE CONSIDERATI ON WAS MADE ON 31.03.2010 BY WAY OF CHEQUE, THE POSSESSION OF T HE PROPERTY IN QUESTION WAS HANDED OVER ON 31.03.2010, THEREFORE, HE SUBMITTED THAT IN TERMS OF SECTION 2(47), THE TRANSFER TOOK P LACE DURING THE FINANCIAL YEAR 2009-10 RELEVANT TO A.Y. 2010-11. AC CORDINGLY, THE ASSESSEE HAD OFFERED CAPITAL GAIN ARISING THEREOF I N THE A.Y. 2010-11 IN SUPPORT OF THIS HE DREW OUR ATTENTION TO PAPER B OOK PAGE NUMBER 3. 4. ON THE CONTRARY LD. DR OPPOSED THE SUBMISSIONS A ND SUBMITTED THAT THE TRANSACTIONS WOULD RELATE TO THE YEAR WHEN SALE DEED IS ACTUALLY REGISTERED BY THE STAMP VALUATION AUTHORIT Y. HE CONTENDED THAT MERE PRESENTATION OF DOCUMENT FOR REGISTRATION WOULD NOT BE SUFFICIENT. THE STAMP VALUATION AUTHORITY IS REQUIR ED TO ASSESS THE STAMP DUTY. SECTION 50C OF THE ACT WOULD COME INTO PLAY WHEN THE STAMP DUTY IS ASSESSED AND DOCUMENT IS RELEASED AFT ER PAYMENT OF STAMP DUTY. 5. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED RELE VANT MATERIAL AVAILABLE ON RECORD. THE UNDISPUTED FACTS ARE THAT THE ASSESSEE PRESENTED SALE DEED FOR REGISTRATION ON 31.03.2010 TO THE STAMP VALUATION AUTHORITY. AS PER THE SALE DEED THE ASSE SSEE HAD MADE PAYMENT OF SALE CONSIDERATION BYWAY OF CHEQUES DRAW N ON KENRA BANK, M. G. ROAD, INDORE, HAD AMOUNTING TO RS.15,00 ,000/- & RS.14,00,000/- RESPECTIVELY. AS PER CLAUSE (3) OF S ALE DEED, THE ASSESSEE HAS HANDED OVER POSSESSION TO THE PURCHASE R. THE MUKESH BIRLA 4 CONTENTION OF THE ASSESSEE IS THAT IN TERMS OF SECT ION 2(47), TRANSFER TOOK PLACE IN THE F.Y. 2009-10, THEREFORE, THE AUTH ORITIES BELOW HAVE WRONGLY TAXED THE CAPITAL GAIN IN THE YEAR UNDER AP PEAL. FOR THE SAKE OF CLARITY SECTION 2(47) OF THE ACT IS REPRODU CED AS UNDER: TRANSFER, IN RELATION TO A CAPITAL ASSET, INCLUDES- (I) THE SALE, EXCHANGE OR RELINQUISHMENT OF THE ASSET, OR (II) THE EXTINGUISHMENT OF ANY RIGHTS THEREIN OR (III) THE COMPULSORY ACQUISITION THEREOF UNDER ANY LAW; O R (IV) IN A CASE WHERE THE ASSET IS CONVERTED BY THE OWNER THEREOF INTO, OR IS TREATED BY HIM AS, STOCK-IN-TRA DE OF A BUSINESS CARRIED ON BY HIM, SUCH CONVERSION OR TREA TMENT OR (IVA) THE MATURITY OR REDEMPTION OF A ZERO COUPON B OND, OR (V) ANY TRANSACTION INVOLVING THE ALLOWING OF THE POSSE SSION 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) OR (VI) ANY TRANSACTION (WHETHER BY WAY OF BECOMING A MEMBE R OF, OR ACQUIRING SHARES IN , A CO-OPERATIVE SOCIETY , COMPANY OR OTHER ASSOCIATION OF PERSONS OR BY WAY OF ANY AGREEMENT OR ANY ARRANGEMENT OR IN ANY OTHER MANNER WHATSOEVER) WHICH HAS THE EFFECT OF TRANSFERRING OR ENABLING THE ENJOYMENT OF ANY IMMOVABLE PROPERTY. [EXPLANATION 1]- FOR THE PURPOSES OF SUB-CLAUSES (V ) AND (VI) IMMOVABLE PROPERTY SHALL HAVE THE SAME MEANING A S IN CLAUSE (D) OF SECTION 269UA.] EXPLANATION 2- FOR THE REMOVAL OF DOUBTS, IT IS HER EBY CLARIFIED THAT TRANSFER INCLUDED AND SHALL BE DEEM TO HAVE ALWAYS INCLUDED DISPOSING OF OR PARTING WITH AN ASSET OR A NY INTEREST THEREIN OR CREATING ANY INTEREST IN ANY ASSET IN AN Y MANNER WHATSOEVER, DIRECTLY OR INDIRECTLY, ABSOLUTELY OR C ONDITIONALLY VOLUNTARILY OR INVOLUNTARILY, BY WAY OF AN AGREEMEN T OR OTHERWISE NOTWITHSTANDING THAT SUCH TRANSFER OF RIG HTS HAS BEEN CHARACTERISED AS BEING EFFECTED OR DEPENDENT UPON O R FLOWING FROM THE TRANSFER OF A SHARE OR SHARES OF A COMPANY REGISTERED OR INCORPORATED OUTSIDE INDIA;] MUKESH BIRLA 5 WHILE DICTATING THE ORDER IT CAME TO OUR NOTICE THA T SIMILAR ISSUE CAME UP BEFORE THE COORDINATE BENCH OF THIS TRIBUNA L, KOLKATA BENCH IN THE CASE OF DCIT, CIRCLE-9 KOLKATA VS. M/S . BAGREES INVESTMENTS PVT. LTD. IN ITA NO.1335/KOL/2011 WHERE IN THE TRIBUNAL OBSERVED AS UNDER: 7. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. AT THE OU TSET, WE FIND THAT THE APEX COURT HAS STAYED THE ORDER OF BAGRI I MPEX (P) LTD. (SUPRA) VIDE ITS ORDER DATED 10.05.2013 WHICH READS AS UNDER:- ISSUE NOTICE RETURNABLE IN THE LAST WEEK OF AUGUST , 2012. IN THE MEANTIME, THERE SHALL BE STAY OF IMPLEMENTATION OF THE ORDER DATED 16.1.2013 PASSED BY THE HIGH COURT T CALCUTTA IN ITA NO.277 OF 2012. AS THE MATTER IS PENDING IN THE COURT OF LAW THEREF ORE WE ARE INCLINED TO RESTORE THE ISSUE TO THE FILE OF AO FOR FRESH ADJUDICATION WITH THE DIRECTION TO PASS FRESH ORDER IN THE LIGHT OF THE DIRECTIONS TO BE ISSUE IN THE AFORESAID JUDGMEN T BY HON'BLE SUPREME COURT. HENCE THE APPEAL OF THE REVENUE IS A LLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT THE APPEAL OF THE REVENUE IS ALLOW ED FOR STATISTICAL PURPOSES. ITANO.1667/KOL/2011(M/S. BAGR I SYNTHETICS PVT. LTD.) 6. ACCORDINGLY, THIS APPEAL WAS FIXED FOR HEARING F OR CLARIFICATION ON 09.01.2018. THE LD. REPRESENTATIVE OF THE PARTIES W ERE HEARD AT LENGTH. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE RATIO OF THE JUDGMENT OF HON'BLE CALCUTTA, HIGH COURT IN THE CAS E OF BAGRI IMPEX (P) LTD. VS. ACIT 259 CTR (CAL) 553. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE RATIO OF THE HON'BLE CA LCUTTA HIGH COURT WOULD NOT BE APPLICABLE ON THE FACTS OF THE P RESENT CASE. MUKESH BIRLA 6 7. PER CONTRA LD. DR HAS RELIED UPON THE JUDGMENT OF HON'BLE SUPREME COURT RENDERED IN CIVIL APPEAL NO.15619 OF 2017 IN THE CASE OF CIT VS. BALBIR SINGH MAINI. WE HAVE HEARD T HE RIVAL CONTENTIONS. THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. BALBIR SINGH MAINI(SUPRA) HAS HELD AS UNDER: THE OBJECT OF SECTION 2(47)(VI) APPEARS TO BE TO B RING WITHIN THE TAX NET A DE FACTOR TRANSFER OF ANY IMMOVABLE PROPE RTY. THE EXPRESSION ENABLING THE ENJOYMENT OF TAKES COLOR FROM THE EARLIER EXPRESSION TRANSFERRING, SO THAT IT IS CL EAR THAT ANY TRANSACTION WHICH ENABLES THE ENJOYMENT OF IMMOVABL E PROPERTY MUST BE ENJOYMENT AS A PURPORTED OWNER THEREOF. THE IDEA IS TO BRING WITHIN THE TAX NET, TRANSACTIONS, WHERE, THRO UGH TITLE MAY NOT BE TRANSFERRED IN LAW, THERE IS, IN SUBSTANCE, A TRANSFER OF TITLE OF FACT. 8. WE FIND THAT THE FACTS IN THE CASE RELIED BY THE REVENUE ARE LITTLE DIFFERENT FROM THE FACTS OF THE PRESENT CASE. SINCE THE ISSUE IN THE PRESENT CASE IS WHAT WOULD BE THE CONSEQUENCE WHERE THE ENTIRE SALE CONSIDERATION IS PAID AND POSSESSION IS HANDED OVER IN A PARTICULAR FINANCIAL YEAR COUPLED WITH THE FACT THA T AGREEMENT IS PRESENTED FOR REGISTERING BEFORE THE REGISTRATION A UTHORITY FOR REGISTERING THE SAME, HOWEVER, THE REGISTRATION AUT HORITY DID NOT RELEASE THE DOCUMENT ON ACCOUNT OF VALUATION OF STA MP DUTY. IN THE CASE OF BAGRI IMPEX (P) LTD. VS. ACIT(SUPRA), THE I SSUE WAS WHAT SHOULD BE THE YEAR OF TRANSFER WHEN THE ASSESSEE HA S RECEIVED ENTIRE SALE CONSIDERATION AND HANDED OVER THE POSSESSION, IN PURSUANCE TO AN AGREEMENT FOR SALE OR IN THE YEAR WHEN THE CONVE YANCE DEED WAS EXECUTED. THE HON'BLE HIGH COURT OF CALCUTTA IN THE CASE OF BAGRI IMPEX(P) LTD. HAS RULED THAT THE YEAR WHEN SALE DEE D IS REGISTERED MUKESH BIRLA 7 SHOULD BE CONSIDERED AS YEAR OF TRANSFER IN TERMS O F SECTION 2(47) OF THE ACT. HOWEVER, THIS OPERATION OF THIS DECISION H AS BEEN STAYED BY THE HON'BLE SUPREME COURT. UNDER THESE FACTS WE DE EM IT PROPER TO SET ASIDE THE ASSESSMENT ORDER ON THIS ISSUE AND RE STORE THE SAME TO THE FILE OF THE AO WHO WOULD DECIDE THE SAME AFT ER OUTCOME OF THE CASE OF BAGRI IMPEX (P) LTD. VS. ACIT (SUPRA) PENDI NG BEFORE THE HON'BLE SUPREME COURT. 9 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED FOR STATISTICAL PURPOSES. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 19 .01 .2018. SD/- (MANISH BORAD) SD/- (KUL BHARAT) CCOUNTANT MEMBER JUDICIALMEMBER INDORE; DATED : 19 / 01/2018 CTX? P.S/. . . COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUA RD FILE. BY ORDER PRIVATE SECRETARY/DDO, INDORE