Shri Amit Pravinchandra Shah, Ahmedabad V. The Income Tax Officer, Ward-10(2), Ahmedabad

ITA 700/AHD/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8004 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2011-2012
• Appeal Filed On: 27-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K SINGH
• Assessee Lawyers: D K PARIKH
• Keywords: Sale consideration of property below Jantri Value; Share purchase agreement
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH (BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) ITA. NO: 700/AHD/2015 (ASSESSMENT YEAR: 2011-12) SHRI AMIT PRAVINCHANDRA SHAH C/O RAVI MARKETING, 3, LAND MARK BLDG, HDFC HOUSE, NAVRANGPURA, AHMEDABAD V/S INCOME TAX OFFICER, WARD- 10 (2), AHMEDABAD (APPELLANT) (RESPONDENT) PAN: ACAPS6389Q APPELLANT BY : SHRI D. K. PARIKH, AR RESPONDENT BY : SHRI V.K. SINGH, SR. D.R. ( )/ ORDER DATE OF HEARING : 11 -04-201 8 DATE OF PRONOUNCEMENT : 29 -06-2018 PER MAHAVIR PRASAD, JUDICIAL MEMBER 1. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-5, AHMEDABAD DATED 27.01.2015 PERTAINING TO A.Y. 2011- 12 AND FOLLOWING GROUNDS HAVE BEEN TAKEN: ITA NO. 700/ AHD/2015 . A.Y. 2011-12 2 2. THE FACTS OF THE CASE ARE THAT AS PER AIR INFORMA TION, THE ASSESSEE HAS SOLD IMMOVABLE PROPERTY FOR RS. 65,38,500/- AS AGAINST R S. 20,00,00/- SHOWN BY THE ASSESSEE. THEREFORE, DURING THE COURSE OF ASSESSMEN T PROCEEDINGS, THE ASSESSEE WAS ASKED TO EXPLAIN THE REASON FOR THE SAME. IN RE SPONSE OF THE SAME, THE ASSESSEE VIDE HIS REPLY DATED 09.12.2013 CONTENDED THAT BY MISTAKE CAPITAL GAINS WAS OFFERED FOR TAXATION AS THE PROPERTY UNDER CONS IDERATION WAS JUST AGREEMENT TO SALE AND NOT SALE DEED AND FURTHER THE SAME AGREEMENT TO SALE WAS CANCELLED IN THE NEXT YEAR. A COPY OF THE SAME WAS ALSO FURNISHED BY THE ASSESSEE AND CONTENDED THAT LOOKING TO THE ABOV E FACT, QUESTION OF TAXING CAPITAL GAIN DOES NOT ARISE AND AIR INFORMATION DOE S NOT ARISE. BUT LD. A.O. WAS NOT AGREED WITH THE CONTENTION OF THE ASSESSEE AND MADE ADDITION OF RS. 50,63,470/- WAS TREATED AS LONG TERM CAPITAL GAIN A ND ADDED TO THE TOTAL INCOME OF THE ASSESSEE 3. IN THE APPELLATE PROCEEDINGS ALSO THE APPELLANT HAS REITERATED HIS VERSION. IT HAS BEEN NOTICED THAT IN THIS CASE ORIGINALLY A SALE DE ED WAS EXECUTED ON 20.08.200 BETWEEN THE APPELLANT AND THE PURCHASER NAMELY SHRI PIYUSH A SHAH PERHAPS SON OF THE APPELLANT FOR SALE OF THE SHOP NO. 6 ADM EASURING 36.62 SQR. MTRS. AT SHRI GANESH KRUPA CO.OP. HOUSING SOCIETY LTD. BUILD ING AT SIKKA NAGAR, V.P. ROAD, MUMBAI. IT HAS BEEN SEEN THAT IN FACT THE SAL E DEED WAS EXECUTED IN THE OFFICE OF THE SUB-REGISTRAR, MUMBAI AND THE STAMP D UTY OF RS. 3,27,010/- WAS PAID BY SHRI PIYUSH A. SHAH ON THE SALE CONSIDERATI ON AS PER THE STAMP VALUATION. MERELY THE TITLE OF THE DOCUMENTS AS MEN TIONED AGREEMENT FOR SALE WOULD NOT ALTER THE STATUS OF THE TRANSACTION AND I T WOULD BE SALE DEED. THIS IS NOTHING BUT THE SALE DEED BUT THE TITLED AS AGREEME NT FOR SALE. FROM THE SALE DEED IT IS VERY MUCH CLEAR THAT THE ENTIRE CONSIDER ATION HAS BEEN RECEIVED BY THE APPELLANT TOWARDS THE SALE AND DELIVERY OF THE POSS ESSION OF THE SAID SHOP TO THE ITA NO. 700/ AHD/2015 . A.Y. 2011-12 3 TRANSFEREE HAS TAKEN PLACE. BUT ON THE OTHER HAND, APPELLANT STATED THAT SHARE CERTIFICATE HAS NOT BEEN TRANSFERRED IN THE NAME OF TRANSFEREE BY THE SAID SOCIETY. AND LD. CIT(A) WAS NOT AGREED WITH THE CON TENTION OF THE APPELLANT HAS DISMISSED THE APPEAL OF THE APPELLANT. 4. WE HAVE GONE THROUGH RELEVANT RECORD IN THE IMPUGNE D ORDER. IN THIS CASE. HE SHOULD REGARDING CHARGING OF CAPITAL GAIN BY INVOKI NG SECTION 50C AND ADOPTING SALES CONSIDERATION AT RS. 65,38,500/- AS PER STAMP VALUATION IN RESPECT OF SHOP NO:6 AT GANESH KRUPA HSG COOP SOCIETY THE AO M ADE ADDITION OF RS. 46,28,428/-. ON THE OTHER HAND, APPELLANT CONTENDED BEFORE BOTH THE LOWER AUTHORITIES THAT THERE WAS NO ACTUAL AND EFFECTIVE TRANSFER AND HENCE THERE IS NO CAPITAL GAIN CHARGEABLE TO TAX. THOUGH THERE WAS RE GISTRATION OF AGREEMENT DATED 20.08.2010 AS PER TERMS OF THAT VERY AGREEME NT VIZ: (I) SHARE CERTIFICATE HAS YET NOT BEEN TRANSFERRED IN THE NAME OF TRANSFE ROR BY SAID SOCIETY (II) TRANSFEROR UNDERTAKES TO EXECUTE , PRODUCE , PROCUR E AND/ORCAUSE TO BE EXECUTED, PRODUCED OR PROCURED ANY WRITINGS, FORMS, DOCUMENTS AND/OR APPLICATIONS AS MAY BE NECESSARY FOR FURTHER ASSURI NG IN LAW AND FOR BETTER AND MORE PERFECTLY TRANSFERRING ALL HIS RIGHTS , INTERE ST AND BENEFITS IN RESPECT OF THE SAID SHOP & THE SAID SHARES UP TO TRANSFEREE FOR HI S EXCLUSIVE USE, OCCUPATION , OWNERSHIP , POSSESSION AND DISPOSAL THEREOF. (III) THE TRANSFEROR SHALL EXECUTE GENERAL POWER OF ATTORNEY ON THE DATE OF EXECUTION HEREOF IN FAVOUR OF THE TRANSFEREE AND /OR HIS NOMINEE IN RESPECT OF THE SA ID SHOP IN ORDER TO FACILITATE THE COMPLETE TRANSFER OF SAID SHOP TOGETHER WITH FI VE SHARES IN THE NAME OF THE TRANSFEREE OR HIS NOMINEE. ACCORDING TO ASSESSEE NO TRANSFER AND POSSESSION WAS NEVER HANDED OVER TO PIYUSH A SHAH BY APPELLANT . THE MATTER WAS NOT REFERRED TO DVO, WHEREAS, IN THE LIGHT OF HONBLE H IGH COURT OF CALCUTTA IN THE MATTER OF SUNIL KUMAR AGARWAL 372 ITR 83 THAT R EFERENCE TO DVO IS MUST ITA NO. 700/ AHD/2015 . A.Y. 2011-12 4 EVEN THOUGH WHERE THERE WAS NO OBJECTION RAISED BY THE ASSESSEE TO STAMP VALUATION. 5. IN VIEW OF THE ABOVE, WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND REMANDED THIS MATTER BACK TO THE FILE OF THE A.O. TO DECIDE THIS MATTER AFRESH AFTER CONSIDERING THE IMPACT REGISTERED CANCELLATION AGRE EMENT WILL ALSO SEE WHETHER SHARE CERTIFICATE HAS BEEN TRANSFERRED OR NOT AND BEFORE DECIDING THE MATTER A.O. WILL EXAMINE BOTH THE FACT, DOCUMENTS AND THER EAFTER WILL DECIDE THE MATTER AS PER LAW AND FOR ENABLING REFERENCE TO DVO IN THE EVENT THE ASSET IS TREATED AS HAVING BEEN LAWFULLY TRANSFERRED RESULTI NG IN TAX ABILITY OF CAPITAL GAINS IN THE HANDS OF THE TRANSFEROR. 6. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN OPEN COURT ON 29- 06- 2018 SD/- SD/- (PRAMOD KUMAR) (MAHAVIR PRASAD) ACCOUNTANT MEMBER TRUE COPY JUDICIAL MEMBER AHMEDABAD: DATED 29/06/2018 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD