ITO, Jaipur V. SMT. BHARTI GAJARIA, Jaipur

ITA 708/JPR/2012

• Counselvise Citation: 70823114 RSA 2012
• Duration Of Justice: 3 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-08-2015
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 03-08-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PURSHOTTAM KASHYAP
• Assessee Lawyers: JAVED KHAN LQUOKB
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Opportunity of being heard; Additional evidence; Cost of acquisition; Fair market value; Corroborative evidences; Revised return
• Section: 143(3); 50C; 54

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH VH-VKJ-EHUK] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI T.R. MEENA, AM VK;DJ VIHY LA-@ ITA NO. 708/JP/2012 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2009-10 THE ITO WARD- 6 (3) JAIPUR CUKE VS. SMT. BHARTI GAJARIA O-8, ASHOK MARG C-SCHEME, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AHOPG 7018 D VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI PURSHOTTAM KASHYAP, JCIT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI MANISH AGARWAL, CA & SHRI JAVED KHAN, ADVOCATE LQUOKBZ DH RKJH[K@ DATE OF HEARING : 15/07/2015 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 11 /08/2015 VKNS'K@ ORDER PER T.R. MEENA, AM THIS IS AN APPEAL FILED BY THE REVENUE AGAINST T HE ORDER OF THE LD. CIT(A)-II, JAIPUR DATED 04-05-2012 FOR THE ASSESSME NT YEAR 2009-10 RAISING THEREIN GROUNDS AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) HAS ERRED IN:- (I) ACCEPTING THE ASSESSEES PLEA THAT THE PLOT IN QUESTION WAS PURCHASED IN THE YEAR 1980 BY MAKING P ART PAYMENT AND TAKING POSSESSION AND CONSEQUENTLY ADOP TING THE FAIR MARKET VALUE OF THE PROPERTY AS ON 1-04-19 81 AT RS. 5,35,919/- AND ALLOWING INDEXED COST OF ACQUISITION AT RS. 31,19,050/- IGNORING THE FOLLOWING VITAL FACTS. ITA NO.708/JP/2012 ITO, WARD- 6 (3), JAIPUR VS. SMT. BHARTI GAJARIA 2 (A) THE PHOTO COPY OF THE SALE AGREEMENT FILED BY THE ASSESSEE WAS UNDATED, UNREGISTERED AND UN-WITNE SSED ONE, WHICH WAS NOT LEGALLY ENFORCEABLE AND THE ASSE SSEE DID NOT PRODUCE THE ORIGINAL SALE AGREEMENT DESPITE SPE CIFIC REQUIREMENT AND OPPORTUNITY GIVEN. (B) THE REGISTERED SALE DEED DATED 2-11-1997 SPECIFIES THAT THE ACTUAL PHYSICAL POSSESSION WAS H ANDED OVER ONLY ON 28-1-1997 AFTER RECEIPT OF THE FULL CONSIDERATION, MEANING THEREBY THAT THE EFFECTIVE A ND ACTUAL PHYSICAL POSSESSION WAS HANDED OVER BY THE SELLER T O THE PURCHASER ONLY ON 28-1-1997. THE REGISTERED SALE DEED DATED 28-11-1997 CLEARLY SPECIFIES THAT THE AMOUNT OF RS. 40,000/- P AID BY THE BUYER IN MAY, 1980 WAS A LOAN AND THE SAME HAS BEEN ADJUSTED ON 28-11-1997 TOWARDS THE SALE CONSIDERATI ON AND THE ASSESSEE HAS MADE THE PAYMENT OF RS. 4,55,000/- THROUGH CHEQUE NO. 384890 DATED 27-11-1997 AND RS. 4,95,500 /- THROUGH CHEQUE NO. 384889 DATED 27-11-1997. (D) FOR ANY IMMOVABLE PROPERTY TO BE TRANSFERRED UNDER THE TRANSFER OF PROPERTY ACT, THERE SHOULD BE ACTUAL DELIVERY OF POSSESSION OF THE PROPERTY AND THE AGRE EMENT FOR TRANSFER OF TITLE OF THE PROPERTY SHOULD BE REGISTE RED AND ONLY ON REGISTRATION OF THE AGREEMENT TO SELL DOES THE O WNERSHIP OF THE PROPERTY GETS TRANSFERRED IN THE EYES OF LAW IN VIEW OF THE PROVISIONS OF SECTION 54 OF THE TRANSFER OF PRO PERTY ACT, SECTION 17 AND 23 OF THE INDIAN REGISTRATION ACT. I N ASSESSEE'S CASE, THE REGISTERED SALE DEED DATED 28 TH AND 29 TH NOV.1997 IS THE CLEAR EVIDENCE TO SHOW THAT THE ENT IRE SALE CONSIDERATION WAS PAID ON 28 TH / 29 TH NOV. 1997 AND ACTUAL AND EFFECTIVE POSSESSION OF THE PROPERTY WAS HANDED OVER THE BUYER BY THE SELLER ONLY AFTER RECEIPT OF THE ENTIR E SALE CONSIDERATION AS CLEARLY SPELT OUT IN THE REGISTERE D SALE DEED. (II) REJECTING THE AOS PLEA THAT IN VIEW OF DECISI ON OF HON'BLE SUPREME COURT IN THE CASE OF GOETZE IND IA LTD. VS. CIT, 284 ITR 323, THE ASSESSEE COULD NOT CLAIM DEDUCTION U/S 48 WITHOUT FILING A REVISED RETURN ON THE GROUN D THAT THIS PROPOSITION DOES NOT IMPINGE UPON THE POWER OF APPE LLATE AUTHORITIES. ITA NO.708/JP/2012 ITO, WARD- 6 (3), JAIPUR VS. SMT. BHARTI GAJARIA 3 2.1 BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE F ILED ITS RETURN OF INCOME ON 2-07-2009 DECLARING TOTAL INCOME AT RS. 5 ,70,916/-.THE ASSESSEE HAD INCOME FROM HOUSE PROPERTY. THE CASE O F THE ASSESSEE WAS SCRUTINIZED U/S 143(3) OF THE ACT. DURING THE COURS E OF ASSESSMENT PROCEEDINGS, VIDE QUERY LETTER DATED 15-02-2011, TH E ASSESSEE WAS REQUIRED TO FURNISH THE DETAILS OF TRANSACTIONS OF IMMOVABLE PROPERTY COVERED UNDER AIR INFORMATION. NO SUCH INFORMATION WAS FURNISHED BY THE ASSESSEE. IT WAS GATHERED THAT THE ASSESSEE HAD SOLD A HOUSE PROPERTY SITUATED AT KRISHNA TOWER, DHULESHWAR GARDEN, C-SCH EME, JAIPUR ON 26- 04-2008 FOR RS. 75,72,988/-. THE AO GAVE REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE ON THIS ISSUE AND ASKED TO CALCULATE THE CAPITAL GAIN ARISING ON SALE OF THE PROPERTY WHICH HAS NOT BEEN SHOWN IN THE RETURN. THE ASSESSEE FURNISHED THE COPY OF THE SAL E DEED DATED 28-04- 2008 AND ALSO COMPUTED THE CAPITAL GAIN AT NIL AFTE R MAKING THE CLAIM OF INDEXED COST OF ACQUISITION AND IMPROVEMENT. AS PER SALE DEED DATED 28- 04-2008, THE ASSESSEE ALONGWITH CO-OWNER SMT. SHASH I GAJARIA HAD SOLD A PORTION MEASURING 2670 SQ.FT SITUATED AT III FLOOR OF KRISHNA TOWER, DHULESHWAR GARDEN, C-SCHEME, JAIPUR TO SHRI SHANKAR JETHANI FOR RS. 45.00 LACS. THE SUB-REGISTRAR HAD ADOPTED THE VALUE OF THE PROPERTY AT RS. 75,72,988/- FOR CHARGING THE STAMP DUTY. THE AO HAD TAKEN THIS VALUE FOR COMPUTING THE CAPITAL GAIN AS PER SECTION 50C OF TH E ACT. THE ASSESSEE ALONGWITH SMT. SHASHI GAJARIA PURCHASED THE PLOT NO . 57, DHULESHWAR ITA NO.708/JP/2012 ITO, WARD- 6 (3), JAIPUR VS. SMT. BHARTI GAJARIA 4 GARDEN, JAIPUR FROM SMT. INDIRA ASHOK GAJARIA ON 28 /29-11-1997 AS PER THE SALE DEED EXECUTED WITH THE SUB-REGISTRAR, JAIP UR. SUBSEQUENTLY, THEY ENTERED INTO AN AGREEMENT WITH A DEVELOPER M/S. BLU E SKY BUILD ESTATE (P) LTD. FOR CONSTRUCTION OF A COMPLEX. IT IS A PO RTION OF COMPLEX WHICH HAS NOW BEEN SOLD TO SHRI SHANKAR JETHANI AS PER TH E SALE DEED DATED 28- 04-2008. THE TOTAL CONSTRUCTED AREA OF THE COMPLEX HAS NOT BEEN SPECIFIED NOR ANY SUCH DETAILS HAVE BEEN FURNISHED AS REQUIRE D. THE ASSESSEE HAS FURNISHED A CHART SHOWING COMPUTATION OF CAPITAL GA IN AS UNDER:- DATE OF SALE 28/4/2008 SALE CONSIDERATION RECEIVED RS. 2250000/- SALE CONSIDERATION AS PER SEC. 50C RS. 37,86,49 4/- (1/2 SHARE) DATE OF PURCHASE: 1980 FAIR MARKET VALUE AS ON 1/4/1981 RS. 535919 INDEXED COST OF PURCHASE/IMPOV. RS. 31,19,049 ADDITIONAL PAYMENT MADE TO SELLER AT THE TIME OF REGISTRY 27/11/1997 RS. 951000 RS. 16,72,151 COST OF IMPROVEMENT 2002-03 RS. 475706 RS. 418218 2003-04 RS. 145424 RS. 127850 2004-05 RS. 71529 RS. 62885 RS. 608953 RS.5400153 RS. 5400153 NIL THE AO OBSERVED IN THE COMPUTATION OF CAPITAL GAINS NOW FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAD MADE A CLAIM THAT THE ITA NO.708/JP/2012 ITO, WARD- 6 (3), JAIPUR VS. SMT. BHARTI GAJARIA 5 PLOT NO. 57, DHULESHWAR GARDEN, JAIPUR WAS PURCHASE D BY THEM IN THE YEAR 1980 BY MAKING PART PAYMENT AND POSSESSION WAS ALSO TAKEN IN THAT YEAR FROM SMT. INDIRA ASHOK GAJARIA. THE ASSESSEE W AS CALLED UP TO FURNISH COPY OF REGISTERED SALE DEED AND PROOF OF P AYMENT OF TAKING POSSESSION AND OTHER DOCUMENTARY EVIDENCES TO SUPPO RT THIS CLAIM. THE ASSESSEE HAD FILED A PHOTOCOPY OF UNDATED VIKRAY AN UBAND IN SUPPORT OF THE AFORESAID CLAIM WHICH WAS NOT REGISTERED WITH T HE REGISTRATION AUTHORITIES AND IT WAS UNDATED, NOT WITNESSED BY AN YONE AND THE PARTICULARS OF DESCRIPTION OF PROPERTY GIVEN WAS AL SO NOT CORRECT. THE AO THEREFORE, ASKED THE ASSESSEE TO PRODUCE THE ORIGIN AL SALE AGREEMENT IN ORDER TO MAKE FURTHER VERIFICATION. HOWEVER, THE AS SESSEE FAILED TO SUBMIT THE ORIGINAL SALE AGREEMENT ON THE PRETEXT THAT SAM E WAS NOT AVAILABLE. THEREFORE, THE AO PROPOSED TO DISALLOW THE INDEXED COST ACQUISITION IN THE YEAR 1980. THE ASSESSEE SUBMITTED REPLY VIDE LE TTER DATED 22-11-2011 WHICH HAS BEEN REPRODUCED BY THE AO AT PAGES 4 AND 5 OF THE ASSESSMENT ORDER. THE AO AFTER CONSIDERING THE ASSESSEE'S REPL Y CONCLUDED AS UNDER:- 8.2 (I) FIRST OF ALL, THE SO CALLED VIKRAY ANUBAND PHOTOCOPY OF WHICH HAS BEEN FILED, IS UND ATED. IT IS NOT KNOWN WHEN IT WAS WRITTEN AND SUCH A PAPER H AS NO LOCUS STANDI AND THE SAME IS NOT ENFORCEABLE IN THE EYE OF LAW. (II) THE SO-CALLED SALE AGREEMENT IS ALSO NOT WITNESSED BY ANYONE AS THE SPACE MEANT WITNESSES HA S BEEN LEFT BLANK. SUCH A DOCUMENT HAS NO EVIDENTIARY VALU E. ITA NO.708/JP/2012 ITO, WARD- 6 (3), JAIPUR VS. SMT. BHARTI GAJARIA 6 (III) THE DESCRIPTION OF THE PROPERTY GIVEN IN THE SO CALLED SALE AGREEMENT IS PLOT NO. 56 (CHAPPA N), DHULESHWAR GARDEN, JAIPUR WHICH IS INCORRECT. (IV) THERE IS NO EVIDENCE WITH THE ASSESSEE TO SHOW THAT THE SAID PROPERTY WAS IN ITS POSSESSION E XCEPT THE COPY OF UNDATED, UN-WITNESSED AND UNREGISTERED DOCU MENT, WHICH IS NOT ACCEPTABLE. (V) THE SO CALLED SALE AGREEMENT IS NOT REGISTERED WITH THE REGISTRATION AUTHORITIES. AS PE R THE PROVISION OF SECTION 17 OF THE INDIAN REGISTRATION ACT, 1908, ANY DOCUMENT WHICH PURPORTS TO TRANSFER ANY IMMOVAB LE PROPERTY OF THE VALUE OF RS. 100/- OR ABOVE HAS TO BE COMPULSORILY REGISTERED AND IF THERE IS A SITUATION WHICH REQUIRES A DECISION RELATING TO THE TRANSFER OF IMM OVABLE PROPERTY REFERRED TO THEREIN, THEN THE REGISTERED D OCUMENT SHALL TAKE EFFECT AGAINST EVERY UNREGISTERED DOCUME NT RELATING TO THE SAME PROPERTY. IN ASSESSEE'S CASE, THE SO- CALLED UNDATED SALE AGREEMENT IS NOT REGISTERED WIT H THE REGISTRATION AUTHORITIES WHEREAS THERE IS REGISTERE D SALE DEED DATED 28-11-1997 AND 29-1-1997 DULY REGISTERED WITH THE SUB-REGISTRAR-II, JAIPUR IN RESPECT OF THE PRO PERTY IN QUESTION, WHICH CLEARLY SPECIFIES THE RECEIPT OF FU LL SALE CONSIDERATION AND HANDING OVER OF ACTUAL PHYSICAL POSSESSION. THE REGISTERED SALE DEED DATED 28-11-19 97 CLEARLY SPECIFIES THAT AND WHEREAS THE BUYER HAS PAID THE TOTAL SALE CONSIDERATION OF RS. 4,95,000/- (RS. FOUR LAC NINET Y FIVE THOUSAND FIVE HUNDRED ONLY) TO THE SELLER IN THE MO DE AND MANNER AS FOLLOWS:- (I) RS.40000/- (RS. FOURTY THOUSAND ONLY) WAS PAID BY THE BUYER TO THE SELLER PREVIOUSLY AS LOAN, VIDE DD NO.B-477939 OF DENA BANK IN MAY 1980 WHICH HAS BEEN ADJUSTED BY THE SELLER AGAINST THE SALE CONSIDERATION AND WHICH THE SELLER HEREBY ACKNOWLEDGES AS RECEIVED PART OF THE SALE CONSIDERATION. ITA NO.708/JP/2012 ITO, WARD- 6 (3), JAIPUR VS. SMT. BHARTI GAJARIA 7 (II) RS.4,55,500/- (RS. FOUR LAC FIFTY FIVE THOUSAND FIVE HUNDRED ONLY) HAS BEEN RECEIVED BY THE SELLER FROM THE BUYER VIDE CHEQUE NO. 384890 DATED 27-11-1997, CANARA BANK, M.I. ROAD BRANCH, JAIPUR AT THE TIME OF EXECUTION OF THIS SALE DEED B EFORE THE SUB-REGISTRAR, JAIPUR CITY IN THIS WAY, THE BUYER HAS PAID ALL AND ENTIRE SUM OF SALE PRICE TO THE SELLER. THE RECEIPT WHEREOF THE SELLER ACKNOWLEDGES HEREIN THIS DEED OF SALE. NOW AFTER HAVING RECEIVED ALL AND ENTIRE SALE PRICE, THE SELLER HAS SOLD OUT, DISPOSED OFF, CONVEYED AND TRANSFERRED 1/4 TH UNDIVIDED PART OF THE SIAD IMMOVALE PROPERTY TO THE BUYER DESCRIBED IN GRATER DETAIL IN THE SCHEDULE-1 HEREINUNDER AND THE PROPERTY OF WHICH THIS PART HAS BEEN SOLD SHOWN BY YELLOW COLOUR IN THE SITE PLAN ENCLOSED TO THIS DEDUCTION OF SALE WHICH IS AN INDISPENSABLE PART AND PARCEL OF THIS D EED OF SALE. AND THE SELLER HAS HANDED OVER ACTUAL PHYSICAL POSSESSIONOF SOLD OUT PROPERTY TO THE BUYER WHICH THE LATTER HAS TAKEN OVER FROM THE SELLER . AND NOW THE BUYER HAS BECOME ABSOLUTE OWNER OF THE SOLD OUT PART OF IMMOVABLE PROPERTY INSTEAD OF THE SELLER AND THE BUYER IS ALL CAPABLE TO USE AND UTILIZE IT IN THE MANNER AS THE BUYER WISH. THE SOLD OUT PART OF THE SAID PROPERTY ALSO CONSISTS OF ALL RIGHTS, INTERESTS EASEMENT TO BE VESTED IN THE BUYER. FURTHER, THE REGISTERED SALE DEED IN RESPECT OF T HE OTHER 1/4 TH PART OF SOLD PROPERTY DATED 29-11-1997 ALSO SPECIFIES TH AT AND WHEREAS THE SELLER HAS DESIRED TO SELL OUT UN DIVIDED 1/4 TH PART OF THE SAID IMMOVABLE PROPERTY DESCRIBED HERE IN ITA NO.708/JP/2012 ITO, WARD- 6 (3), JAIPUR VS. SMT. BHARTI GAJARIA 8 BELOW IN SCHEDULE -1 FOR THE SALE PRICE OF RS. 4,95 ,500/- (RS. FOUR LAC NINETY FIVE THOUSAND FIVE HUNDRED ONLY) AND WHEREAS THE BUYER HAS PAID THE TOTAL SALE CONSI DERATION OF RS. 4,95,000/- /- (RS. FOUR LAC NINETY FIVE THOU SAND FIVE HUNDRED ONLY) TO THE SELLER IN THE MODE AND MANNER AS FOLLOWS:- (II) (I) OF RS. 4,95,000/- /- (RS. FOUR LAC NINETY FIVE THOUSAND FIVE HUNDRED ONLY) HAS BEEN RECEIVED BYTHE SELLER FROM THE BUYER VIDE CHEQUE NO. 384889 DATED 27-1-1997, CANARA BANK, M.I. ROAD BRANCH, JAIPUR AT THE TIME OF EXECUTION OF THIS SALE DEED OF SALE DEE D BEFORE THE SUB-REGISTRAR, JAIPUR CITY. IN THIS WAY, THE BUYER HAS PAID ALL AND ENTIRE SUM OF SALE PRICE TO THE SELLER. THE RECEIPT WHEREOF THE SELLER ACKNOWLEDGES HEREIN THIS DEED OF SALE. NOW AFTER HAVING RECEIVED ALL AND ENTIRE SALE PRICE, THE SELLER HAS SOLD OUT, DISPOSED OFF, CONVEYED AND TRANSFERRED 1/4 TH UNDIVIDED PART OF THE SAID IMMOVALE PROPERTY TO THE BUYER DESCRIBED IN GREATER DETAIL IN THE SCHEDULE-1 HEREUNDER AND THE PROPERTY OF WHICH THIS PART HAS BEEN SOLD SHOWN BY YELLOW CO LOUR IN THE SITE PLAN ENCLOSED TO THIS DEDUCTION OF SALE WH ICH IS AN INDISPENSABLE PART AND PARCEL OF THIS DEED OF SALE. AND THE SELLER HAS HANDED OVER ACTUAL PHYSICAL POSSESSIONOF SOLD OUT PROPERTY TO THE BUYER WHICH THE LATTER HAS TAKEN OVER FROM THE SELLER . AND NOW THE BUYER HAS BECOME ABSOLUTE OWNER OF THE SOLD OUT PART OF IMMOVABLE PROPERTY INSTEAD OF THE SELLER AND THE BUYER IS ALL CAPABLE TO USE AND UTILIZE IT IN THE MANNER AS THE BUYER WISH. THE SOLD OUT PART OF THE SAID PROPERTY ALSO CONSISTS OF ALL RIGHTS, INTERESTS EASEMENT TO BE VESTED IN THE BUYER. ITA NO.708/JP/2012 ITO, WARD- 6 (3), JAIPUR VS. SMT. BHARTI GAJARIA 9 ON THE BASIS OF ASSESSEE'S SUBMISSIONS, THE AO CONC LUDED THAT THE ASSESSEE WAS IN ACTUAL PHYSICAL POSSESSION OF THE P ROPERTY IN QUESTION FROM SELLER TO THE BUYER (ASSESSEE ) ONLY ON 28 TH /29 TH NOV. 1997 AFTER RECEIVING THE ENTIRE SALE PRICE AS CLEARLY SPELT OU T IN THE SALE DEED EXECUTED ON 28/29 TH NOV. 1997, DULY REGISTERED WITH THE SUB-REGISTRAR- II, JAIPUR CITY. THEREFORE, THE CONTENTION OF THE ASSE SSEE THAT THE PROPERTY SOLD TO HER BUY THE BUYER IN 1980 AND SHE WAS HAVIN G ITS POSSESSION FROM 1980 IS DEVOID OF ANY MERIT AND UNACCEPTABLE IN VIE W OF THE FACTS DISCUSSED ABOVE. HE FURTHER REFERRED TO TRANSFER OF PROPERTY ACT IN CASE OF TANGIBLE IMMOVABLE PROPERTY AND REGISTRATION REQ UIREMENT AND SECTION 53A OF TRANSFER OF PROPERTY ACT FOR PART PERFORMANC E. HE RELIED ON DECISION OF HON'BLE APEX COURT IN THE CASE OF M/S. SURAJ LAMP & INDUSTRIES (P) LTD. VS. STATE OF HARYANA & ORS 2011 STPL 879 (SC) WHEREIN IT WAS HELD THAT IMMOVABLE PROPERTY CAN BE LEGALLY AND LAWFULLY TRANSFERRED / CONVEYED ONLY BY A REGISTERED DEDUCTI ON OF CONVEYANCE. THE ASSESSEE LATER ON ENTERED INTO AN AGREEMENT WITH T HE DEVELOPER M/S. BLUE SKY BUILDESTATE (P) LTD. FOR CONSTRUCTION OF A COMP LEX. THIS AGREEMENT CLEARLY MENTIONS THAT THE PROPERTY WAS PURCHASED BY THE ASSESSEE ALONGWITH THE CO-OWNER ON 28 TH & 29 TH NOV. 1997. THE AGREEMENT FURTHER SPECIFIES THAT THE CHARGES FOR CHANGING LAND USED W ILL BE SHARED BY BOTH THE PARTIES ACCORDING THEIR RESPECTIVE SHARE AND IN CASE DEVELOPER OBTAINS PERMISSION FOR ADDITIONAL AREA, FEE CHARGES SHALL B E BORNE BY BOTH THE CO- ITA NO.708/JP/2012 ITO, WARD- 6 (3), JAIPUR VS. SMT. BHARTI GAJARIA 10 OWNERS AND THE DEVELOPER IN PROPORTION OF 53% AND 4 7% RESPECTIVELY. THE AGREEMENT FURTHER SPECIFIES THAT THE DEVELOPER SHALL BEAR THE COST INCURRED IN INSTALLING TRANSFORMER AND ELECTRIC CON NECTIONS IN THE RATIO OF 53% AND 47% RESPECTIVELY. AS PER THE DETAILS FILED BEFORE THE AO ON THE BASIS OF BILLS/ VOUCHERS, THE EXPENDITURE WAS INCUR RED AS UNDER:- F.Y. EXPENDITURE AS PER BILLS PRODUCED AND PLACED ON FILE AMOUNT 53% ATTRIBUTABLE TO BOTH THE CO- OWNERS SHARE OF ASSESSEE 2002-03 LAND CONVERSION AND OTHER CHARGES PAID TO JDA MUNICIPALITY RS. 87959 RS. 475706 RS. 237853 2003-04 ELECTRIC INSTALLATION EXP RS. 274385 RS. 14 5424 RS. 72712 2004-05 TRANSFORMER INSTALLATION EXP RS. 134961 RS. 71529 RS. 35764 RS. 1306905 RS. 692659 RS. 346329 THE EXPENDITURE HAD BEEN INCURRED FOR THE WHOLE COM PLEX BUILT BY THE DEVELOPER OUT OF WHICH ONLY A PORTION MEASURING 267 0 SQ.FT SITUATED IN 3 RD FLOOR HAS NOW BEEN SOLD BY THE ASSESSEE AND THE CO- OWNER. THE TOTAL CONSTRUCTED ARE OF THE BUILDING HAS NOT BEEN SPECIF IED IN MOU NOR SUCH DETAILS HAVE BEEN FURNISHED DESPITE SPECIFIC REQUIR EMENT. IN SUCH A SITUATION, PROPORTIONATE DEDUCTION WAS CALCULATED. IT HAS BEEN SPECIFIED IN THE SALE DEED THAT THE OWNERSHIP OF BASEMENT FLOOR, GROUND FLOOR AND FIRST FLOOR AND THIRD FLOOR IS IN THE COMPLETE OWNERSHIP OF THE ASSESSEE AND THE CO-OWNER WHEREAS THE SECOND FLOOR IS THE OWNERSHIP OF THE DEVELOPER COMPANY. SINCE THE ASSESSEE HAD SOLD ONLY THE THIRD FLOOR MEASURING 2670 FT , IT WOULD BE FAIR AND REASONABLE TO WORK OUT TH E INDEXED COST OF ITA NO.708/JP/2012 ITO, WARD- 6 (3), JAIPUR VS. SMT. BHARTI GAJARIA 11 ACQUISITION @ 20% OF THE TOTAL INDEXED COST OF ACQU ISITION AND BEING ITS CO-OWNER, SHE WOULD GET THE BENEFIT @ 10% OF THE EX PENDITURE ON ACCOUNT OF IMPROVEMENT AS THE 53% SHARE IN THE IMP ROVEMENT CHARGES HAS BEEN MET OUT BY THE ASSESSEE AND THE OTHER CO-O WNER. ON THE BASIS OF THE ABOVE DISCUSSIONS, THE LONG TERM CAPITAL GAIN W ORKED OUT BY THE AO IS AS UNDER:- SALES CONSIDERATION AS PER PROVISIONS OF SECTION 50C RS. 75752988 SHARE OF THE ASSESSEE RS. 3786494 LESS: INDEXED COST OF ACQUISITION 27 TH /28 TH NOV. 1977: RS. 495500+RS. 495500 = RS. 991000X582 331 RS. 1742483 20% THEREOF RS. 348496/- RS. 348496/ INDEXED COST OF IMPROVEMENT AS DISCUSSED ABOVE (20%) 2002-03 RS. 47570X582 447 RS. 61936 2003-04 RS. 14542X582 463 RS. 18280 2004-05 RS. 7152X 582 480 RS. 8671 RS. 88887 THEREOF ALLOWABLE RS. 44443 LTCG RS. 3393555 HE FURTHER HELD THAT AS TO INDEXED COST OF ACQUISI TION AND INDEXED COST OF IMPROVEMENT, THE ASSESSEE FILED THE RETURN ON 22-0 7-2009, THE ASSESSEE HAD NOT MADE ANY SUCH CLAIM. THE PLEA OF THE ASSESS EE WAS NOT ACCEPTED BY THE AO AS THE ASSESSEE HAS NOT SHOWN ANY CAPITAL GAIN IN THE RETURN. ITA NO.708/JP/2012 ITO, WARD- 6 (3), JAIPUR VS. SMT. BHARTI GAJARIA 12 THEREFORE, THE ASSESSEES CLAIMED WAS AN AFTER THOU GHT WHEN TRANSACTION DETECTED ON THE BASIS OF AIR INFORMATION. THUS IN V IEW OF HON'BLE SUPREME COURT JUDGMENT IN THE CASE OF GOETZE INDI A LTD. VS. CIT , 294 ITR 323, THERE WAS NO REVISED RETURN FILED BY THE A SSESSEE. HENCE, THE AO CALCULATED THE LONG TERM CAPITAL GAIN ON THE BASIS OF THE ABOVE DISALLOWANCE AT RS. 37,86,495/-. 2.2 BEING AGGRIEVED BY THE ORDER OF THE AO, THE ASS ESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) WHO AFTER CONSIDERING THE FACTS OF THE CASE AT PARA 3.1 AND 3.2 (FROM PAGES 7 TO 17) OF HIS ORDER FINALLY DIRECTED THE AO TO DELETE THE ADDITION OF RS. 37,86,495/- MADE BY HIM ON ACCOUNT OF LONG TERM CAPITAL GAIN. 2.3 NOW THE REVENUE IS BEFORE WHEREIN THE LD. DR AR GUED THAT THE LD. CIT(A) HAS ACCEPTED THE ASSESSEE'S EVIDENCES WITHOU T ALLOWING ANY OPPORTUNITY TO THE AO AND DECIDED THE CASE IN FAVOU R OF THE ASSESSEE. THE LD. DR SUBMITTED THAT IT IS A FACT ON RECORD THAT T HE ASSESSEE HAD NOT PRODUCED ORIGINAL SALE AGREEMENT BEFORE THE AO. IT IS ALSO A FACT THAT THE ASSESSEE HAD NOT DISCLOSED THIS TRANSACTION IN THE RETURN. THE AO ON THE BASIS OF AIR INFORMATION HAS ISSUED THE SHOW CAUSE NOTICE TO THE ASSESSEE. THEREAFTER HE CLAIMED THAT THERE IS NO TAXABLE CAPI TAL GAIN IN CASE OF THE ASSESSEE. IN THIS CASE, WHATEVER EVIDENCES WERE FIL ED BY THE ASSESSEE BEFORE THE LD. CIT(A) THE SAME WERE NOT CONSIDERED LEGALLY AS THE ASSESSEE HAS NOT GIVEN ANY APPLICATION OF ADDITIONA L EVIDENCE BEFORE THE ITA NO.708/JP/2012 ITO, WARD- 6 (3), JAIPUR VS. SMT. BHARTI GAJARIA 13 LD. CIT(A) UNDER RULE 46A OF THE INCOME TAX RULES A ND THE LD. CIT(A) HAS ALSO NOT PASSED ANY ORDER FOR ADMITTING THE ADD ITIONAL EVIDENCE FOR DISPOSAL OF THIS APPEAL WHICH GOES TO THE ROOT CAUS E OF THE CASE. THUS THE LD. DR PRAYED THAT THE MATTER MAY BE SET ASIDE TO T HE FILE OF THE AO. 2.4 DURING THE COURSE OF HEARING, THE LD. AR OF THE ASSESSEE SUPPORTED THE ORDER OF THE LD. CIT(A) AND SUBMITTED HIS PRAYE RS THROUGH THE WRITTEN SUBMISSION AS UNDER:- 1. THE FACT OF PAYMENT OF ADVANCE AMOUNT OF RS. 7 5,000/- IN SEPT. 1980 HAS NOT BEEN DOUBTED BY THE AO AND NO EVIDENCE/ MATERIAL HAVE BEEN BROUGHT ON RECORD BY T HE AO TO DISPUTE THESE PAYMENTS. 2. THE FACT OF THE ADVANCE PAYMENTS HAVING BEEN MAD E TO SELLER IS EVIDENT FROM THE REGISTERED SALE DEED ITS ELF AND THE AGREEMENT TO SALE ENTERED INTO BEFORE EXECUTING THE REGISTERED SALE DEED. 3. THE BUYER HAS BEEN IN POSSESSION OF THE SAID LAN D SINCE 1980 WHICH IN FACT IS EVIDENT AND NOTED IN TH E SALE DEED ITSELF AS WELL AS THE REGISTRATION TO SALE. 4. ACCORDING TO THE PROVISIONS OF SECTION 2(47) OF THE I.T. ACT, 1961, A CAPITAL ASSET IS CONSIDERED TO BE WHER E THE POSSESSION THEREOF HAS BEEN TRANSFERRED IN PART PER FORMANCE OF A CONTRACT OF THE NATURE REFERRED TO IN SECTION 53A OF THE TRANSFER OF PROPERTY ACT, 1882. THEREFORE, THE DATE OF ACQUISITION HAS TO BE CONSIDERED AS THE DATE OF TAK ING POSSESSION OF THE PROPERTY I.E. MAY, 1980. . 5. THE AO HAS DOUBTED ONLY THE ENFORCEABILITY OF AGREEMENT TO SALE ON THE GROUND THAT THE AGREEMENT WAS NOT WITNESSED AND WAS NOT REGISTERED. HOWEVER, THE AO F AILED TO ITA NO.708/JP/2012 ITO, WARD- 6 (3), JAIPUR VS. SMT. BHARTI GAJARIA 14 APPRECIATE THE CORROBORATING EVIDENCE IN THE SHAPE OF REGISTERED SALE DEED WHICH ALSO RECORDS THE SAME FA CTS AS ARE RECORDED IN THE AGREEMENT TO SALE AND THUS, THE SAL E DEED CORROBORATES THE FACTS NARRATED IN THE AGREEMENT TO SALE. THEREFORE, WHEN THERE IS A SUPPORTING EVIDENCE/ REG ISTERED SALE DEED, WHICH HAS NOT BEEN DOUBTED, THE AGREEMEN T TO SALE COULD NOT HAVE BEEN DISCARDED MERELY ON TECHNICAL CONSIDERATION. FURTHER, EVEN IF THE AGREEMENT TO SA LE STANDS DOUBTED BY THE AO, THE SALE DEEDS BEARS EVIDENCE TO THE FACT THAT THE ASSESSEE HAS BEEN IN POSSESSION OF THE LA ND SINCE 1980 AND HAD PAID ADVANCE AMOUNT IN THAT RESPECT. THEREFORE, THE ALLEGATION OF AO FAIL ON THIS ISSUE. 6. THAT THE PAYMENT OF SETTLEMENT AMOUNT OF RS. 19,02,000/- AT THE TIME OF EXECUTION OF SALE DEED H AS NOWHERE BEEN DOUBTED BY THE AO. 7. THE ASSESSEE HAS INCURRED AN EXPENDITURE ON IMPROVEMENT OF THE PROPERTY TO THE TUNE OF RS. 6,08 ,953/- (COST OF IMPROVEMENT) WHICH FACT TOO HAS NOT BEEN D OUBTED BY THE AO. 8. THE AO HAS WRONGLY PRESUMED THAT ALL OTHER FLOOR S OF CONSTRUCTED BUILDING EXCEPT IIND FLOOR ARE IN OWNER SHIP OF ASSESSEE AND HER CO-OWNER. RATHER THE ACTUAL FACT A S IS EVIDENT FORM THE SALE DEED IS THAT, THE ENTIRE CONS TRUCTED COMPLEX SHALL BE DIVIDED BETWEEN ASSESSEE INCLUDING HER CO- OWNER AND THE DEVELOPER COMPANY IN THE RATIO OF 53: 47% AND THUS BASEMENT, GROUND FLOOR AND 1ST FLOOR WERE SHARED BY THE PARTIES I THE SAID RATIO WHEREAS, SECOND FLO OR WAS KEPT BY DEVELOPER AND IIIRD FLOOR WAS KEPT BY ASSESSEE A ND HER CO-OWNER. HOWEVER, IN THIS ARRANGEMENT, THE RATIO O F DISTRIBUTION ESSENTIALLY REMAINED STATIC AT 53:47% IT IS SUBMITTED THAT ALL THESE FACTS WERE BRUSHED A SIDE BY THE AO AND HE WENT ON TO DISALLOW THE DEDUCTION OF COST OF ACQUISITION AS CLAIMED BY ASSESSEE. NEVERTHELES S, DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE LD. CIT( A), ALL THESE FACTS ALONGWITH RELEVANT EVIDENCES (ALREADY S UBMITTED ITA NO.708/JP/2012 ITO, WARD- 6 (3), JAIPUR VS. SMT. BHARTI GAJARIA 15 BEFORE AO) WERE SUBMITTED BEFORE LD. CIT(A) AND ALL THE ALLEGATIONS OF AO WERE ESTABLISHED AS BASELESS BEFO RE THE LD. CIT(A) WHO AFTER PERUSING THEM CAREFULLY PASSED A V ERY REASONED ORDER, ACKNOWLEDGING THEM ALL THE ABOVE MENTIONED FACTS IN LIGHT OF SETTLED LAW REGARDING S ECTION 2(47) R.W.S. 45/58 OF THE I.T. ACT AND THEREBY DELE TED THE ADDITION MADE BY THE AO. 2.5 THE LD. AR OF THE ASSESSEE RELIED ON FOLLOWING CASE LAWS:- (I) CHICAGO PHEUMATIC INDIA LTD. VS. DCIT (2007) 15 SOT 252 (MUM.) (II) CIT VS. JAI PARABOLIC SPRINGS LTD. (208) 306 I TR 42 (DEL.) (III) KIAN DISCETIONARY FAMILY TRUST REPORTED IN 11 3 TTJ 918 (AHD.) (IV) NATIONAL THERMAL POWER CO. LTD. VS. CIT (1998) 229 ITR 383 (SC) (V) CIT VS. RAMCO INTERNATIONAL (2011) 332 ITR 306 (P&H) (VI) ESSAR OIL LTD. (ITA NO. 3661 & 2827/M/2000) (VII) MR. GANESH V. LAKHIA VS. ADDL. CIT (ITA NO. 1823/MUM/2010 A.Y. 2006-07, ORDER DATED 8-04-2011 ) (VIII) MAHINDRA ENGG. & CHEMICAL PRODUCTS LTD. (ITA NOS. 1258 TO 1261/MUM/2010 A.Y. 2001-02 TO 2004-05 THE LD. AR OF THE ASSESSEE AT LAST REQUESTED TO DIS MISS THE APPEAL OF THE REVENUE. ITA NO.708/JP/2012 ITO, WARD- 6 (3), JAIPUR VS. SMT. BHARTI GAJARIA 16 2.6 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND FROM THE RECORDS THAT THE ASSESSEE HAS NOT PRODUCED THE ORIGINAL SALE AGREEMENTS ENTERED BETWE EN THE PARTIES BEFORE THE AO. THE ASSESSEE HAS ALSO NOT DISCLOSED THE CAP ITAL GAINS IN THE RETURN AS WELL AS IN REVISED RETURN. THE AO GOT INFORMATIO N THROUGH AIR THAT IT WAS AN IMMOVABLE PROPERTY SOLD BY THE ASSESSEE AND ON THAT BASIS, THE AO ASKED THE ASSESSEE TO GIVE PARTICULARS OF PROPER TY SOLD AND CAPITAL GAINS EARNED ON IT. THE ASSESSEE SUBMITTED PARTIAL EVIDENCES BEFORE THE AO AND CLAIMED THE CAPITAL GAINS IN CASE OF THESE I MMOVABLE PROPERTY TRANSACTIONS SHOWING INCOME AT NIL. HOWEVER, THE AO WAS NOT SUPPOSED TO ENTERTAIN THE ASSESSEE'S CLAIM BY RELYING ON DEC ISION OF HON'BLE APEX COURT IN THE CASE OF GOETZE INDIA LTD. VS. CIT (SUP RA). THE LD. CIT(A) HAS COTERMINOUS POWER AND WHATEVER ADDITIONAL EVIDENCES SUBMITTED BY THE ASSESSEE BEFORE HIM HAD NOT BEEN ADJUDICATED PROPER PERSPECTIVE AND IN LEGAL FRAMEWORK AS NO APPLICATION FOR FILING OF AD DITIONAL EVIDENCE HAD BEEN REFERRED BY HIM AND NO FINDING HAD BEEN GIVEN BY THE LD. CIT(A) THAT THESE EVIDENCES ARE REQUIRED TO DECIDE THE BAS IC CAUSE OF THE ASSESSEE. THEREFORE, IN THE INTEREST OF JUSTICE, WE SET ASIDE THE ISSUE TO THE FILE OF THE AO TO DECIDE IT DE NOVO BY PROVIDING REASONABLE OPP ORTUNITY OF BEING HEARD TO THE ASSESSEE. ITA NO.708/JP/2012 ITO, WARD- 6 (3), JAIPUR VS. SMT. BHARTI GAJARIA 17 3.0 IN THE RESULT, THE APPEAL OF THE REVENUE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 11/08/20 15. SD/- SD/- VKJ-IH-RKSYKUH VH-VKJ-EHUK (R.P.TOLANI) (T.R. MEENA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 11 /08/2015 *MISHRA VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE ITO, WARD- 6 (3), JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- SMT. BHARTI GAJARIA, JAIPUR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO.708/JP/2012) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR