Income Tax Officer-1(2), Bareilly V. Shri Om Prakash, L/H Late Smt. Jhammo Devi, Bareilly

ITA 78/LKW/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1063 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 1 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 27-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: IS REPRODUCED BELOW THAT OF LE
• Section: 147

Judgement Text

I.T.A. NO.78/LKW/2017 ASSESSMENT YEAR:2008-09 1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI T. S. KAPOOR, ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER I.T.A. NO.78/LKW/2017 ASSESSMENT YEAR:2008-09 INCOME TAX OFFICER-1(2), BAREILLY. VS. SHRI OM PRAKASH L/H LATE SMT. JHAMMO DEVI, VILL. BROON NAGLA, BILASPUR ROAD, BAREILLY. PAN:CTZPP 9050 R (APPELLANT) (RESPONDENT) O R D E R PER T. S. KAPOOR, A.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) DATED 28/11/2016. THE ONLY EFFECTIVE GROUND OF APPE AL TAKEN BY THE REVENUE IS REPRODUCED BELOW: 1. THAT THE ORDER OF LEARNED CIT(A), BAREILLY IS E RRONEOUS IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.57,24,784/- RIGHTLY MADE BY THE ASSESSING OFFICE R IGNORING THE FACT THAT THE POSSESSION OF THE LAND I N QUESTION WAS HANDED OVER TO THE BUYER IN FINANCIAL YEAR 2007-08 AND NOT IN FINANCIAL YEAR 2003-04 AS SUPPOR TED BY THE REGISTRY. APPELLANT BY CHAUDHARY ARUN KUMAR SINGH, D.R. RESPONDENT BY WRITTEN SUBMISSIONS AMICUS CURIAE (SHRI RAKESH GARG, ADVOCATE) DATE OF HEARING 13/03/2018 DATE OF PRONOUNCEMENT 15 /0 3 /2018 I.T.A. NO.78/LKW/2017 ASSESSMENT YEAR:2008-09 2 2. AT THE TIME OF HEARING IT WAS OBSERVED THAT NONE WAS PRESENT ON BEHALF OF THE ASSESSEE. HOWEVER, THE ASSESSEE HAD PLACED WRITTEN SUBMISSIONS AND HAD REQUESTED THAT HIS CASE MAY BE DECIDED ON THE BASIS OF WRITTEN SUBMISSIONS. HOWEVER, TO UNDERSTAND THE FA CTS OF THE CASE PROPERLY, THE BENCH APPOINTED SHRI RAKESH GARG, ADVOCATE AS A MICUS CURIAE TO HELP THE COURT. 3. AT THE OUTSET, LEARNED D. R. SUBMITTED THAT THE ASSESSEE HAD SOLD IMMOVABLE PROPERTY IN THE YEAR UNDER CONSIDERATION AND FOR WHICH SALE DEED WAS EXECUTED AND THEREFORE, CAPITAL GAIN AROSE DURI NG THE YEAR UNDER CONSIDERATION ITSELF WHEREAS THE LEARNED CIT(A) HAS ALLOWED RELIEF TO THE ASSESSEE HOLDING THAT THE TRANSACTIONS RELATED TO T HE FINANCIAL YEAR 2003-04. LEARNED D. R. SUBMITTED THAT MERE ENTERING INTO AN AGREEMENT TO SELL IN THE FINANCIAL YEAR 2003-04 CANNOT BE SAID TO HAVE COMPL ETED THE SALE TRANSACTIONS WHEREAS THE SALE DEED HAPPENED IN FINA NCIAL YEAR 2007-08 THEREFORE, THE ORDER OF THE ASSESSING OFFICER SHOUL D BE UPHELD. 4. THE AMICUS CURIAE APPOINTED BY THE BENCH INVITED OUT ATTENTION TO THE COPY OF AGREEMENT TO SELL DATED 11/06/2003 PLAC ED AT PAGES 6 TO 15 OF THE PAPER BOOK AND SUBMITTED THAT THIS AGREEMENT WA S A REGISTERED AGREEMENT AND THE ENTIRE CONSIDERATION OF RS.8,88,1 01/- EXCEPT AN AMOUNT OF RS.1,00,000/- WAS RECEIVED BY THE ASSESSEE WHILE EXECUTING THIS AGREEMENT. THE AMICUS CURIAE FURTHER SUBMITTED THA T THE POSSESSION LETTER WAS ALSO HANDED OVER TO THE PURCHASER, A COPY OF WH ICH WAS PLACED AT PAGE NO. 16 OF THE PAPER BOOK WHEREIN ON 18/08/2003 AFTE R RECEIVING THE BALANCE AMOUNT OF RS.1,00,000/- THE ASSESSEE HAD GIVEN POSS ESSION OF THE SAID PROPERTY. IT WAS ARGUED THAT ON THE BASIS OF THESE AGREEMENTS, THE TRANSACTION OF SALE STOOD COMPLETED DURING THE FINA NCIAL YEAR 2003-04 ITSELF AND WHICH IS IN ACCORDANCE WITH THE PROVISIONS OF S ECTION 2(47)(V) OF THE ACT THEREFORE, THERE IS NO INFIRMITY IN THE ORDER OF LE ARNED CIT(A). I.T.A. NO.78/LKW/2017 ASSESSMENT YEAR:2008-09 3 5. WE HAVE HEARD LEARNED D.R. AND LEARNED AMICUS CU RIA AND HAVE GONE THROUGH THE WRITTEN SUBMISSIONS AND OTHER MATERIAL PLACED ON RECORD. WE FIND THAT THE CASE OF THE ASSESSEE WAS REOPENED U/S 147 OF THE ACT AND THE ASSESSMENT WAS FRAMED ON SMT. JHAMMO DEVI WIFE OF S HRI OM PRAKASH AS A LEGAL HEIR. THE CASE OF THE ASSESSEE WAS REOPENED TO EXAMINE THE TAXABILITY UNDER THE HEAD CAPITAL GAIN ON THE SALE OF IMMOVABL E PROPERTY. THE LEGAL HEIR OF THE ASSESSEE SUBMITTED BEFORE THE ASSESSING OFFICER THAT LAND WAS SOLD IN FINANCIAL YEAR 2003-04 AND FULL PAYMENT WAS RECEIVED IN THAT YEAR ITSELF AND POSSESSION OF LAND WAS ALSO HANDED OVER DURING THAT YEAR ITSELF AND THEREFORE, THE CAPITAL GAINS CANNOT BE SAID TO HAVE ACCRUED DURING THE YEAR UNDER CONSIDERATION. HOWEVER, THE ASSESSING O FFICER HELD THAT THE IMMOVABLE PROPERTY WAS NOT HANDED OVER AT THAT TIME I.E. IN THE FINANCIAL YEAR 2003-04 THEREFORE, LIABILITY OF CAPITAL GAIN I N THE CASE AROSE AT THE TIME OF REGISTRY WHICH FALLS UNDER THE YEAR UNDER CONSID ERATION. THEREFORE, THE ASSESSING OFFICER COMPUTED THE TAX LIABILITY UNDER THE HEAD LONG TERM CAPITAL GAIN. BEFORE LEARNED CIT(A) DETAILED SUBMI SSIONS WERE FILED AND IT WAS SUBMITTED THAT AS PER THE PROVISIONS OF SECTION 2(47)(V) OF THE ACT, THE TRANSACTION WAS COMPLETED IN FINANCIAL YEAR 2003-04 AND THEREFORE, CAPITAL GAIN DID NOT ARISE DURING THE YEAR UNDER CONSIDERAT ION. THE ASSESSEE HAD PLACED RELIANCE ON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF SANJEEV LAL VS. CIT AND ANOTHER [2014] 365 ITR 389 (SC) WHEREIN IT HAS BEEN HELD THAT EVEN AGREEMENT TO SELL IS EXTINGUISH MENT OF RIGHT IN THE PROPERTY AND TRANSFER IS COMPLETE IN THE YEAR OF AG REEMENT TO SELL ITSELF. LEARNED CIT(A) ALLOWED RELIEF TO THE ASSESSEE BY HO LDING AS UNDER: I HAVE CAREFULLY TAKEN INTO CONSIDERATION THE DETA ILED SUBMISSIONS MADE BY THE AR FOR THE APPELLANT AND AL SO PERUSED THE ASSESSMENT ORDER.,IT IS NOTICED THAT THE AO HAS COMPUTED CAPITAL GAIN OF RS.57,24,784/ ON ACCOUNT OF SALE OF AGRICULTURAL LAND. IT IS NOTICED THAT THE APPELLANT SHRI OM PRAK ASH IS HUSBAND OF LATE JHAMMO DEVI. SHE SOLD HER AGRICUTRA L LAND VIDE I.T.A. NO.78/LKW/2017 ASSESSMENT YEAR:2008-09 4 REGISTERED AGREEMENT TO SELL DATED 11.6.2003 AT A P RICE OF RS.8,88,101/-. AT THE TIME OF AGREEMENT RS.7,88,10 1/- WAS PAID BY THE BUYER TO THE SELLER. THE COPY OF AGREEM ENT TO SELL AS FILED BEFORE THE ASSESSING OFFICER IS ENCLOSED H EREWITH FOR READY REFERENCE PURPOSES. THEREAFTER ON 18.8.2003, THE BALANCE SUM OF RS.10.000/- WAS ALSO PAID BY THE BUYER TO SM T. JHAMMO DEVI AND POSSESSION OF THE SAID AGRICULTURE LAND WA S TAKEN BY THE BUYER. THUS, ENTIRE TRANSACTION OF SALE WAS COM PLETE DURING FY 2003-04. THE FACT OF SALE OF AGRICULTURAL LAND I N EARLIER YEARS HAS NOT BEEN REBUTTED BY THE ASSESSING OFFICER BY A NY DOCUMENTARY EVIDENCE BY THE ASSESSING OFFICER. THE ASSESSING OFFICER HAS ALSO NOT MENTIONED THE REASON FOR HER B ELIEF FOR TAKING RECOURSES TO SECTION 147/148 OF THE ACT. I H AVE ALSO TAKEN INTO CONSIDERATION THE JUDGMENT CITED BY THE AR FOR THE APPELLANT-DELIVERE3D BY THE HON'BLE SUPREME COURT R EPORTED IN 365 ITR 389 (SC) WHEREIN IT IS HELD BY HON'BLE APEX COURT THAT EVEN AGREEMENT TO SELL IS EXTINGUISHMENT OF RIGHT I N THE PROPERTY AND TRANSFER IS COMPLETE IN THE YEAR OF AG REEMENT TO SELL ITSELF. RESPECTFULLY FOLLOWING THE JUDICIAL PR ONOUNCEMENT OF THE APEX COURT, IN MY OPINION ON THE FACTS AND CIRC UMSTANCES EXPLAINED BY THE AR IN THE WRITTEN REPLY/ EXPLANATI ON THERE WAS NO TRANSFER OF ANY ASSET DURING THE YEAR UNDER CONS IDERATION. HENCE NO CAPITAL GAIN IS CHARGEABLE TO TAX IN THE Y EAR UNDER APPEAL. THE COMPUTATION OF INCOME AS MADE BY THE AS SESSING OFFICER IS ANNULLED. THE GROUNDS OF APPEAL AS RAISE D BY THE APPELLANT STAND SUCCEEDED. 5.1 FROM THE COPY OF AGREEMENT TO SELL PLACED AT PA GES 6 TO 15 OF THE PAPER BOOK, WE FIND THAT THE AGREEMENT IS A REGISTE RED AGREEMENT WHEREIN THE SALE CONSIDERATION OF RS.8,88,101/- HAS BEEN ME NTIONED AND OUT OF WHICH RS.7,88,101/- WAS RECEIVED BY THE ASSESSEE ON THE EXECUTION OF AGREEMENT ON 11/06/2003. THE BALANCE PART OF THE S ALE CONSIDERATION AMOUNTING TO RS.1,00,000/- HAS BEEN RECEIVED BY THE ASSESSEE ON 18/08/2003 AND POSSESSION WAS HANDED OVER TO THE PU RCHASER ON 18/08/2003 ITSELF. THIS FACT IS VERIFIABLE FROM TH E COPY OF RECEIPT OF RS.1,00,000/- PLACED AT PAGE NO. 16 OF THE PAPER BO OK WHEREIN THE ASSESSEE HAD GIVEN POSSESSION OF THE IMMOVABLE PROP ERTY. THE PROVISIONS OF SECTION 2(47)(V) CLEARLY STATE THAT ANY TRANSACT ION INVOLVING THE HANDING I.T.A. NO.78/LKW/2017 ASSESSMENT YEAR:2008-09 5 OVER OF POSSESSION OF ANY IMMOVABLE PROPERTY HAS TO BE TAKEN AS PART PERFORMANCE OF A CONTRACT OF THE NATURE REFERRED TO IN SECTION 53A OF THE TRANSFER OF PROPERTY ACT. HON'BLE SUPREME COURT IN THE CASE OF SANJEEV LAL VS. CIT AND ANOTHER [2014] 365 ITR 389 (SC) HAS ALS O HELD THAT EVEN AGREEMENT TO SELL IS EXTINGUISHMENT OF RIGHT IN THE PROPERTY AND TRANSFER IS COMPLETE IN THE YEAR OF AGREEMENT TO SELL ITSELF. IN VIEW OF THESE FACTS AND CIRCUMSTANCES, THERE WAS NO TRANSFER OF ANY ASSET D URING THE YEAR UNDER CONSIDERATION AND HENCE NO CAPITAL GAIN IS CHARGEAB LE TO TAX. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, WE DO NOT FIND ANY I NFIRMITY IN THE ORDER OF LEARNED CIT(A). 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 15/03/2018) SD/. SD/. (PARTHA SARATHI CHAUDHURY) ( T. S. KAPOOR ) JUDICIAL MEMBER A CCOUNTANT MEMBER DATED:15/03/2018 *SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW