SMT. KALPANA JAIN, Bhopal V. THE ACIT -1(2), Bhopal

ITA 785/IND/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5728 (ITAT-INDORE)
• Duration Of Justice: 2 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 07-09-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 15-07-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K G GOYAL
• Assessee Lawyers: N D PATWA
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Gift; Salary income
• Section: 50C; 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE .., .., % BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI O.P. MEENA, ACCOUNTANT MEMBER SMT.KALPANA JAIN, E-4/108, DHAN SHREE VILLA, ARERA COLONY, BHOPAL .. ./ PAN: AAUPJ0777F VS. ACIT, 1(2), BHOPAL / APPELLANT / RESPONDENT / APPELLANT BY SHRI ASHISH GOYAL AND SHRI N. D. PATWA, ADV. / RESPONDENT BY SHRI K. G. GOYAL, DR DATE OF HEARING 07.09.2016 DATE OF PRONOUNCEMENT 05.10.2016 / O R D E R PER O.P. MEENA, ACCOUTANT MEMEBR. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-II, INDORE .. . / I.T.A. NO. 785/IND/2016 %' ' / ASSESSMENT YEAR: 2009-10 I.T.A.NO.785/IND/2016 SMT.KALPANA JAIN, BHOPAL V. A CIT, PAGE 2 OF 17 AY 2009-10 [HEREINAFTER REFERRED TO AS THE CIT(A)] DATED 27.02 .2015 AND PERTAINS TO ASSESSMENT YEAR 2008-09 AS AGAINST APPE AL DECIDED IN ASSESSMENT ORDER DATED OF ITO WARD 5(1) INDORE [HEREINAFTER REFERRED TO AS THE AO]. 2. THE REGISTRY HAS POINTED OUT THAT THERE IS A DELAY IN FILING OF APPEAL OF 11 DAYS. THE ASSESSEE HAS FILED AN AFFIDAVIT DATED 22.08.2016 DEPOSING THEREIN THAT THE ORDER OF THE CIT(A) WAS RECEIVED BY HER ON 05.05.2016 AND APPEAL WAS TO B E FILED WITHIN 60 DAYS. SHE HAS DEPOSITED A CHALLAN OF RS. 1 0,000/- FOR FILING FEE OF APPEAL WAS DEPOSITED ON 14.07.2016 , WHICH WAS WITHIN TIME, BUT DELAY WAS OCCURRED AS HER MOTHER- IN-LAW WAS SERIOUSLY ILL AND DIED IN THE MONTH OF JUNE, 20 16. THE LD. COUNSEL FOR THE ASSESSEE PRAYED THAT THE SMALL DELA Y MAY KINDLY BE CONDONED CONSIDERING THE CIRCUMSTANCES OF THE CASE. 3. WE HAVE CONSIDERED THE FACTS AS NARRATED ABOVE AND ARE OF CONSIDERED OPINION THAT THERE IS GENUINE CAU SE FOR DELAY IN FILING OF APPEAL. THEREFORE, THE SAME IS CONDONE D. 4. THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPEAL : - 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE FINDINGS OF LD. CIT(A)-I, BHOPA L, I.T.A.NO.785/IND/2016 SMT.KALPANA JAIN, BHOPAL V. A CIT, PAGE 3 OF 17 AY 2009-10 ARE BAD AND OPPOSED TO FACTS, EQUITY AND LAW AND ARE, THEREFORE, UNSUSTAINABLE IN LAW. 2. THE ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A)-I, BHOPAL, ERRED I N MAKING A SCRUTINY ASSESSMENT U/S 148/143(3) OF THE ACT. 3. THE ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A), BHOPAL, WAS ERRED T O CONFIRM AN ADDITION OF RS. 7,00,000/- ON ACCOUNT OF UNDISCLOSED CAPITAL GAIN BY INVOKING PROVISION OF SECTION 50C OF THE ACT. LD. CIT(A)-I, BHOPAL WAS NOT UNDERSTAND FAMILY SETTLEMENT HAQUE TYAG BETWEEN FAMILY MEMBERS AND CONFIRMED THE ADDITIONS. ALSO THE LD. CIT(A) ERRED IN INVOKING PROVISION OF SECTI ON 50C WITHOUT REFERRING THE MATTER TO VALUATION OFFICER. 4. THE ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A)-I, BHOPAL, WAS ERRE D TO CONFIRM AN ADDITION OF RS. 1,00,000/- ON ACCOUNT OF AGRICULTURAL INCOME SHOWN IN THE RETURN. I.T.A.NO.785/IND/2016 SMT.KALPANA JAIN, BHOPAL V. A CIT, PAGE 4 OF 17 AY 2009-10 5. THE ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A)-I, BHOPAL, WAS ASSESSED U/S 148 WITHOUT REASONS RECORDED FOR INVOKING SECTION 50C OF THE ACT. 5. GROUND NOS. 1 & 2 ARE GENERAL IN NATURE. THEREFORE , NO ADJUDICATION IS REQUIRED ON OUR PART. 6. GROUND NO. 3 RELATES TO CONFIRMING THE ADDITION OF RS 7 LAKHS ON ACCOUNT OF UNDISCLOSED CAPITAL GAIN AND BY INVOKING THE PROVISIONS OF SECTION 50C WITHOUT UNDERSTANDING THE FACT THAT IT WAS A FAMILY SETTLEMENT (HAQUE TYAG) BETWEEN THE FAMILY MEMBERS OF THE ASSESSEE. 7. FACTS APROPOS OF THE ABOVE GROUND ARE THAT THE AO WA S IN POSSESSION OF AIR INFORMATION ACCORDING TO WHICH THE ASSESSEE ALONGWITH NINE FAMILY MEMBERS HAVE TRANSFER RED AN IMMOVABLE PROPERTY ON 26.03.2009. THEREFORE, THE AO REQUIRED THE ASSESSEE TO EXPLAIN THE NATURE OF TRANSACTION. IT WAS EXPLAINED THAT THE ASSESSEE WAS BELONGING TO A JOIN T FAMILY HAVING BEEN BROUGHT JOINTLY ALONGWITH THE FAMILY ME MBERS LIKE BROTHERS AND SISTERS ETC. AND AS PER MUTUAL FAMILY SETTLEMENT, THE ASSESSEE HAS RELINQUISHED ITS ENTIRE POWER AND RIGHT FROM I.T.A.NO.785/IND/2016 SMT.KALPANA JAIN, BHOPAL V. A CIT, PAGE 5 OF 17 AY 2009-10 THE PROPERTY IN FAVOUR OF HIS BROTHER-IN-LAW SHRI M ANOJ JAIN WITHOUT ANY CONSIDERATION BY WAY OF REGISTERED RELINQ UISHMENT DEED. THIS RELINQUISHMENT IS KNOWN AS HAQUE TYAG A ND THE PROPERTY IS NOT CONSIDERED AS TRANSFER U/S 2(47) OF THE INCOME- TAX ACT, 1961. THEREFORE, NO CAPITAL GAIN HAS BEEN EARNED AND RECEIVED BY THE ASSESSEE EITHER HERSELF OR OTHER FA MILY MEMBERS. THIS CONTENTION OF THE ASSESSEE WAS NOT FOU ND ACCEPTABLE BY THE AO. ACCORDING TO THE AO, THE TRAN SFER U/S 2(47) IN RELATION TO THE CAPITAL ASSETS INCLUDES TH E SALE, EXCHANGE OR RELINQUISHMENT OF THE ASSETS. THEREFORE , THE AO OBSERVED THAT THE RELINQUISHMENT IS KNOWN AS HAQUE T YAG AND THE PROPERTY IS NOT CONSIDERED AS TRANSFER U/S 2(47 ) OF THE ACT, IS NOT VALID. ACCORDINGLY, THE AO CONSIDERED MARKET VALUE OF THE PROPERTY AT RS. 66 LAKHS AND SINCE THIS PROPERT Y WAS RELINQUISHED BY NINE MEMBERS, THEREFORE, THE SHARES OF THE ASSESSEE WAS CONSIDERED AS 63/9 = RS. 7 LAKHS. ACCOR DINGLY, THE AO CONSIDERED THE AMOUNT OF RS. 7 LAKHS AS LONG TERM CAPITAL GAIN AND ADDED IN THE HANDS OF THE ASSESSEE . 8. AGGRIEVED WITH THE ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A). I.T.A.NO.785/IND/2016 SMT.KALPANA JAIN, BHOPAL V. A CIT, PAGE 6 OF 17 AY 2009-10 9. THE LD. CIT(A) NOTED THAT THE CAREFUL READING OF TH E ASSESSEES SUBMISSION REVEALED THAT IT IS A FULL OF CONTRADICTION AS ON THE ONE HAND, SHE SAYS THAT IT WAS A PARTITION OF HUF PROPERTY, HENCE NOT TAXABLE, ON THE OTHER HAND, SHE SAYS THAT IT WAS A GIFT BY THE BROTHERS AND SISTERS IN FAVOUR OF THE YOUNGER BROTHER AND AT ANOTHER PLACE, IT IS CLAIMED THAT IT WAS A RELINQUISHMENT/SURRENDER OF RIGHTS WITHOUT ANY CONSIDERATION. SOMEWHERE ELSE, IT IS CLAIMED THAT IT WAS A FAMILY SETTLEMENT WITH MUTUAL CONSENT. ON GOING THRO UGH THE DOCUMENTS PARTICULARLY THE RELEASE DEED ON RECORD, THE LD. CIT(A) OBSERVED THAT THIS WAS CERTAINLY NOT A PARTIT ION, AS NO DIVISION OF THE HUF PROPERTY HAS TAKEN PLACE BETWEE N BROTHERS AND SISTERS, WHO HAVE RELINQUISHED THEIR RIGHTS/INTE REST IN FAVOUR OF ANOTHER BROTHER. THE RELINQUISHMENT OF AS SETS, WHICH WAS COVERED AS TRANSFER OF AN ASSET U/S 2(47) OF THE ACT, THE RELEVANT PORTION OF WHICH IS REPRODUCED HEREUNDER :- (47) TRANSFER, IN RELATION TO CAPITAL ASSETS, INCLU DE (I) THE SALES, EXCHANGE OR RELINQUISHMENT OF THE ASSETS; OR (II) THE EXTINGUISHMENT OF ANY RIGHTS THEREIN; OR I.T.A.NO.785/IND/2016 SMT.KALPANA JAIN, BHOPAL V. A CIT, PAGE 7 OF 17 AY 2009-10 (III) .. THUS, ACCORDING TO THE LD. CIT(A), THE TRANSACTION IN QUESTION WAS COVERED UNDER THE PROVISIONS OF CLAUSE (I) AND C LAUSE (II) OF SUB SECTION (47) OF SECTION 2. THUS, THE LD. CIT(A) HAS CONFIRMED THE ACTION OF THE AO . 10. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS A MEMBER OF OPULENT FAMILY WHICH CONSIST S TEN MEMBERS INCLUDING THE ASSESSEE. THE UNDERLINED PROP ERTY WAS A FAMILY PROPERTY PURCHASED OUT OF THE COMMON FUNDS OF THE FAMILY ON 05.09.1994. THE TOTAL LAND WAS 174232 SQ.F T. OF WHICH 16117 SQ.FT. WAS REGISTERED IN THE NAME OF ASSE SSEE AND BALANCE WAS REGISTERED IN THE NAME OF EACH FAMILY ME MBER. THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE A LSO FILED A MAP SHOWING THE AREA OF EACH FAMILY MEMBERS WHICH IS PLACED AT PAPER BOOK PAGE 37. IT WAS SUBMITTED THAT UNDER T HE FAMILY ARRANGEMENT, THE RIGHT IN THE JOINT FAMILY PROPERTY TO THE EXTENT OF 3.26 ACRES (1.32 HECTARES) WAS RELINQUISHE D BY THE ASSESSEE ALONGWITH OTHER FAMILY MEMBERS IN FAVOUR O F MANOJ JAIN ( BROTHER-IN-LAW OF THE ASSESSEE ). THE RELEASE DEED/SETTLEMENT DEED 28.03.2009 PLACED AT PAPER BOO K PAGE I.T.A.NO.785/IND/2016 SMT.KALPANA JAIN, BHOPAL V. A CIT, PAGE 8 OF 17 AY 2009-10 NO.19 TO 22, WHEREBY THE ASSESSEE AND EIGHT OTHER FA MILY MEMBERS HAD RELEASED THE PROPERTY IN FAVOUR OF MANO J JAIN UNDER FAMILY SETTLEMENT. IT WAS FURTHER SUBMITTED TH AT IT IS MENTIONED IN THE RELEASE DEED PLACED AT PAPER BOOK PAGE NO. 20 THAT THE FAMILY IS A JOINT FAMILY PROPERTY. FURT HER, IT IS ALSO MENTIONED ON PAPER BOOK PAGE NO. 21 ( TOP ) THAT NO CONSIDERATION IS RECEIVED. THE AO TREATED THIS TRAN SACTION AS TRANSFER U/S 2(47) AND HELD THAT U/S 50C, THE STAMP VALUE SALE BE TREATED AS SALE CONSIDERATION. IN SUPPORT O F HIS CONTENTION THAT FAMILY ARRANGEMENT MADE VOLUNTARILY DID NOT AMOUNT TO TRANSFER AND NO CAPITAL GAIN ARISES FROM SUCH TRANSACTION, THE LD. AUTHORIZED REPRESENTATIVE OF T HE ASSESSEE PLACED RELIANCE ON THE FOLLOWING CASE LAWS :- 1. CIT VS. A.L. RAMANATHAN, 245 ITR 494 (MAD) 2. KUSUMBEN KANTILAL SHAH VS. ITO, 56 ITR 476 (AHD.) 3. SMT. T. GAYATHRI, (2014) 47 TAXMANN.COM 190 (BANGALORE TRIB.) 4. SHRISH S. MANIAR, (2008) 167 TAXMAN 81 ( MUM )(MAG.) I.T.A.NO.785/IND/2016 SMT.KALPANA JAIN, BHOPAL V. A CIT, PAGE 9 OF 17 AY 2009-10 5. MRS. P. SHEELA, (2009)_120 ITD 159 ( BANG. ) 6. NAVALCHAND BAVCHAND DANPATH, (2006) 153 TAXMANN 63 (RAJKOT) (MAG). 7. K.VENUGOPAL, 248 ITR 251 (MAD). 11. THE LD. COUNSEL FOR THE ASSESSEE AS AN ALTERNATIVE ARGUMENT, WHICH IS WITHOUT PREJUDICE, ALSO SUBMITTED THAT THE TRANSACTION CAN BE SAID TO BE A GIFT, AS THERE IS N O CONSIDERATION INVOLVED. THE GIFT OF AN ASSET HAS BE EN SPECIFICALLY EXCLUDED FROM THE DEFINITION OF TRANSF ER U/S 47(III) OF THE ACT. IN THE PRESENT CASE, THE ASSET WAS TRANS FERRED TO MANOJ JAIN WITHOUT CONSIDERATION. THEREFORE, A GIFT OF ASSET IS NOT LIABLE FOR ANY TAX IN THE HANDS OF TRANSFER BEI NG THE ASSESSEE. 12. THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE A LSO TOOK ANOTHER ALTERNATIVE PLEA THAT IT CAN BE SAID T O BE A PART AND PARCEL OF THE HUF AS MENTIONED IN THE RELEASE D EED, PROPERTY WAS A JOINT FAMILY PROPERTY. THE FAMILY DEC IDED TO SETTLE THE RIGHTS IN THE PROPERTY BY WAY OF A PARTIA L PARTITION. THEREFORE, THIS PROPERTY WAS, THEREFORE, GIVEN TO ON E OF THE I.T.A.NO.785/IND/2016 SMT.KALPANA JAIN, BHOPAL V. A CIT, PAGE 10 OF 17 AY 2009-10 MEMBERS OF THE FAMILY BY WAY PARTIAL PARTITION. THER EFORE, THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT AS PER SECTION 47(I) A TRANSFER UNDER A TOTAL OR PARTIAL PARTITION OF HUF IS NOT REGARDED AS A TRANSFER AND IS, THEREFORE, EXEMPT. 13. ATLAST, WITHOUT PREJUDICE TO THE ABOVE ALTERNATIVE P LEA, THE LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT THE AO APPLIED SECTION 50C WITHOUT MAKING REFERENCE TO THE DVO. THE AO, DISCHARGING A QUASI JUDICIAL FUNCTION, HAS THE BOUNDEN DUTY TO ACT FAIRLY AND TO GIVE A FAIR TREATMENT BY GIVING HIM AN OPTION TO FOLLOW THE COURSE PROVIDED BY LAW AS HELD I N SUNIL KUMAR AGARWAL, 372 ITR 83 (CAL)/ 14. THE LD. DEPARTMENTAL REPRESENTATIVE RELIED AND SUPPORTED THE ORDER OF AO AND LD. CIT(A). 15. WE HAVE CONSIDERED THE FACTS, MATERIALS AVAILABLE O N RECORD AND JUDICIAL PRONOUNCEMENT CITED BY THE ASSE SSEE. WE FIND FROM THE RECORD THAT THE ASSESSEE IS AN INDIVI DUAL HAVING INCOME FROM SALARY AND OTHER SOURCES. DURING THE YE AR UNDER CONSIDERATION , THE ASSESSEE ALONGWITH OTHER MEMBERS OF THE FAMILY HAS MADE A FAMILY ARRANGEMENT WITH ONE OF ITS MEMBERS, SHRI MANOJ JAIN THAT IS IS HIS BROTHER-IN- LAW AND I.T.A.NO.785/IND/2016 SMT.KALPANA JAIN, BHOPAL V. A CIT, PAGE 11 OF 17 AY 2009-10 OTHER FAMILY MEMBERS HAVE GIVEN UP THEIR INTEREST I N RESPECT OF THE FAMILY PROPERTY IN FAVOUR OF SHRI MANOJ JAIN. T HE FAMILY MEMBER OF THE ASSESSEE CONSISTS TEN MEMBERS IN WHICH SHRI K. C. JAIN IS (FATHER IN LAW OF THE ASSESSEE), THE H EAD OF THE FAMILY. WE FIND FROM THE RECORD THAT THE ASSESSEE A LONGWITH OTHER MEMBERS OF FAMILY OF SHRI K. C. JAIN HAS OWNED AN AGRICULTURAL LAND SITUATED AT VILLAGE HATHAI KHEDA, TEHSIL HUZUR, DISTRICT BHOPAL, M.P., ADMEASURING 3.2 ACRES . ALL THE MEMBERS OF THE FAMILY HAVE MUTUALLY DECIDED TO RELE ASE THEIR TITLE VIDE HAQUE TYAG, TYAG PATRA OR RELEASE DEED P LACED AT PAPER BOOK PAGE NO.20 DATED 28 TH MARCH, 2009. IN SUPPORT OF THE ABOVE SAID PROPERTY, IN THE NAME OF FAMILY MEMB ERS, SHRI MANOJ JAIN S/O SHRI K. C. JAIN. THE SAID RELEASE DE ED/HAQUE TYAG WAS GOT REGISTERED IN THE NAME OF SHRI MANOJ BY ALL THE FAMILY MEMBERS OF WHICH STAMP VALUATION WAS CONSIDERE D AT RS. 63 LAKHS FOR THE PURPOSE OF GETTING ITS REGISTR Y. ON GOING THROUGH THE RELEASE DEED, IT IS MENTIONED THEREON T HAT THE LAND BELONGS TO ALL UNDIVIDED FAMILY MEMBERS AND TH E NAMES OF ALL THE MEMBERS ARE MENTIONED THEREIN ARE JOINT OWNERS OF THE SAID AGRICULTURAL LAND. WE ALSO FIND THE HAQUE I.T.A.NO.785/IND/2016 SMT.KALPANA JAIN, BHOPAL V. A CIT, PAGE 12 OF 17 AY 2009-10 TYAG/RELEASE DEED HAVE BEEN EFFECTED WITHOUT ANY CONSIDERATION THEREOF. WE FURTHER FIND AT PAGE 4 O F THE RELEASE DEED THAT THE DEED HAS BEEN MADE VOLUNTARILY WITHOUT ANY PRESSURE AND WITH SOUND MIND AND IN BONA FIDE MANNER . IN UNREVOCABLE MANNER. THE LD. AUTHORIZED REPRESENTAT IVE OF THE ASSESSEE HAS PLACED RELIANCE IN THE CASE OF CIT VS. A.L. RAMANATHAN, (2000) 245 ITR 494 : (2003) 128 TAXMAN 87 (MAD), WHEREIN IT WAS HELD AS UNDER :- THE FAMILY ARRANGEMENT IS AN AGREEMENT BETWEEN THE MEMBERS OF THE SAME FAMILY INTENDED BE GENERALLY AN D REASONABLY FOR THE BENEFIT OF THE FAMILY EITHER BY COMPROMISING DOUBTFUL OR DISPUTED RIGHTS OR BY PRES ERVING THE FAMILY PROPERTY OR THE PEACE AND SECURITY OF TH E FAMILY BY AVOIDING, LITIGATION OR BY SAVING ITS HONOUR. SO , THE FAMILY ARRANGEMENTS ARE GOVERNED BY PRINCIPLES WHIC H ARE NOT APPLICABLE TO DEALINGS BETWEEN STRANGERS AND TH E FAMILY ARRANGEMENT AMONG THEM IS FOR THE INTEREST O F THE FAMILY, FOR THE HARMONIOUS WAY OF LIVING. SO, SUCH REALIGNMENT OF INTEREST BY WAY OF EFFECTING FAMILY I.T.A.NO.785/IND/2016 SMT.KALPANA JAIN, BHOPAL V. A CIT, PAGE 13 OF 17 AY 2009-10 ARRANGEMENT AMONG THE FAMILY MEMBERS WOULD NOT AMOUNT TO TRANSFER. IN THE INSTANT CASE, THE TRIBUNAL WAS PERFECTLY JUS TIFIED IN TAKING THE VIEW THAT THE TRANSACTION IN QUESTION BE ING A FAMILY ARRANGEMENT, DID NOT AMOUNT TO TRANSFER AND, THEREFORE, THERE WAS NO CHARGEABLE CAPITAL GAIN ARI SING FROM THAT TRANSACTION. SO, THE TRANSACTION OF THE A SSESSEE DID NOT AMOUNT TO TRANSFER AND THERE WAS NO CHARGEA BLE CAPITAL GAIN ARISING FROM THAT TRANSACTION. 16. SINCE IN THE INSTANT CASE, THE FAMILY ARRANGEMENT I N QUESTION APPEARS TO BE A BONA FIDE ONE, INASMUCH AS IT HAD BEEN SHOWN TO HAVE BEEN VOLUNTARY IS NOT INDUCED BY ANY FRAUD OR COALITION, EXCHANGE OF ASSETS UNDER SUCH F AMILY ARRANGEMENT, DID NOT AMOUNT TO TRANSFER. WE FURTHER FIND THAT AS THE PROVISIONS OF SECTION 47(I) ANY DISTRIBUTION OF CAPITAL ASSETS ON TOTAL OR PARTIAL PARTITION OF HUF DOES NO T AMOUNT A TRANSFER FOR THE PURPOSE OF SECTION 45 OF THE INCOM E-TAX ACT, 1961. THE PROVISIONS OF SECTION 47(I) ARE REPRODUCE D AS UNDER : - I.T.A.NO.785/IND/2016 SMT.KALPANA JAIN, BHOPAL V. A CIT, PAGE 14 OF 17 AY 2009-10 47. NOTHING CONTAINED IN SECTION 45 OF THE INCOME - TAX ACT, 1961, SHALL APPLY TO THE FOLLOWING TRANSFE RS :- (I) ANY DISTRIBUTION OF CAPITAL ASSETS ON THE TOTA L OR PARTIAL PARTITION OF A HINDU UNDIVIDED FAMILY;.. 17. WE FIND FROM THE RELEASE DEED ON 28 TH MARCH, 2009, BETWEEN THE ASSESSEE ALONGWITH OTHER FAMILY MEMBERS. THEREFORE, IT CANNOT BE TREATED AS TRANSFER IN THE LIGHT OF ABOVE PROVISIONS OF THE ACT. WE FIND THAT THE LD. CIT(A) HAS WITHOUT ANALYZING THE FACTS IN PROPER PERSPECTIVE, DRIVE AW AY BY THE SUBMISSION OF THE ASSESSEE, WHICH HAVE SOME CONTRADI CTION IN ITS SUBMISSION, WHEREAS THE RELEASE DEED/HAQUE TYAG, CLEARLY SPELL OUT THE FACTS THAT IT WAS A FAMILY ARRANGEMENT MADE BY THE ASSESSEE ALONGWITH EIGHT OTHER FAMILY MEMBERS IN FAVOUR OF ANOTHER FAMILY MEMBERS, WHICH, IN OUR CONSIDERED VIE W DOES NOT AMOUNT TO TRANSFER AND CONSEQUENTLY NO CAPITAL GAIN ARISES FROM SUCH TRANSFER OF CAPITAL ASSETS, WHICH IS OBVIO USLY WITHOUT CONSIDERATION. FURTHER, NO CAPITAL GAIN ARIS ES AS PER THE PROVISIONS OF SECTION 47(I) OF THE ACT. GROUND NO. 3, IS, THEREFORE, ALLOWED. I.T.A.NO.785/IND/2016 SMT.KALPANA JAIN, BHOPAL V. A CIT, PAGE 15 OF 17 AY 2009-10 18. GROUND NO. 4 RELATES TO CONFIRMING THE ADDITION OF RS. 1 LAKH AS AGRICULTURAL INCOME SHOWN IN THE RETURN. 19. THE ASSESSEE HAS SHOWN AGRICULTURAL INCOME OF RS. 2 LAKHS IN THE RETURN OF INCOME IN RESPECT OF AROUND 10 ACRES OF UN-IRRIGATED LAND AT PURA CHINDWARA AND THAT LAND WAS GIVEN TO LOCAL FARMER, WHO IN TURN, GIVES HALF OF AGRICULT URAL INCOME PRODUCED BY SUCH FARMERS. HOWEVER, THE AO WAS OF TH E VIEW THAT AS PER REGISTRY, THE LAND IS UN-IRRIGATED AGRI CULTURAL LAND. FURTHER, ACCORDING TO THE AO IF AT ALL UNDER AGRICU LTURAL ACTIVITIES CARRIED ON THE LAND, THEN ONE ACRE LAND REAPS THE FARMERS AFTER ALL EXPENSES AT ONLY ABOUT RS. 10,000 /- PER ACRE AS PROFIT AND IF THE SAME IS GIVEN TO ANOTHER PERSO N, THEN HALF THE AMOUNT. ACCORDINGLY, THE AO CONSIDERED RS. 5,00 0/- PER ACRE I.E. RS. 50,000/- AS AGRICULTURAL INCOME AND R EMAINING RS. 1.50 LAKHS WAS TREATED AS INCOME FROM OTHER SOUR CES. 20. THE LD. CIT(A) CONSIDERED THE FACTS AND ALSO JUDICI AL CITATIONS GIVEN BY THE ASSESSEE, MORE PARTICULARLY, HON'BLE M.P. HIGH COURT AND I.T.A.T., INDORE BENCH, WHEREIN THE AGRICULTURAL INCOME @ 9,000/- TO RS. 11,000/- PER A CRE PER ANNUM WAS UPHELD. ACCORDINGLY, THE LD. CIT(A) HAS AD OPTED I.T.A.NO.785/IND/2016 SMT.KALPANA JAIN, BHOPAL V. A CIT, PAGE 16 OF 17 AY 2009-10 AGRICULTURAL INCOME AT RS. 10,000/- PER ACRE, WHICH WORKED OUT TO RS. 1 LAKH. ACCORDINGLY, THE ADDITION OF RS. 1 LAKH WAS CONFIRMED AND RS. 50,000/- WAS DELETED. 21. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE FAC TS AS MADE BEFORE THE LOWER AUTHORITIES AND SUBMITTED THA T IN THE CASE OF SMT. SMITA BINOD, 18 ITJ 630, I.T.A.T., IND ORE BENCH HAVE ACCEPTED THE AGRICULTURAL INCOME AT RS. 22,000 /- PER ACRE, WHICH WAS ALSO FOLLOWED IN RAMNATH SHARMA, I.T.(SS)A.NOS. 118 TO 124/IND/2014 BY I.T.A.T. INDO RE BENCH. THEREFORE, IT WAS CONSIDERED THAT RS. 20,000/- PER ACRE WAS TREATED AS REASONABLE. 22. THE LD. DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. 23. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD. WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSEE HAS FILED COPY OF AGREEMENT ENTERED WITH THE LOCAL FARMERS BEFORE THE AO, WHO AFTER CONSIDERING THE FACTS HAS CONSIDERED RS. 5,00 0/- PER ACRE AS REASONABLE WHICH THE LD. CIT(A) HAS CONSIDERED A T RS. 10,000/- PER ACRE AS REASONABLE, ON CONSIDERING THE ORDER OF I.T.A.NO.785/IND/2016 SMT.KALPANA JAIN, BHOPAL V. A CIT, PAGE 17 OF 17 AY 2009-10 HON'BLE M.P. HIGH COURT IN THE CASE OF SUNITA SINGH AI VS. CIT, 23 ITJ 488 (M.P.). THEREFORE, WE FIND THAT THE LD. C IT(A) WAS REASONABLE IN ADOPTING AGRICULTURAL INCOME AT RS. 1 0,000/- PER ACRE. ACCORDINGLY, FINDINGS OF THE LD. CIT(A) ARE U PHELD. THIS GROUND OF THE ASSESSEE IS, THEREFORE, DISMISSED. 24. GROUND NO. 5 IS REGARDING INVOCATION OF SECTION 50C OF THE ACT, WHICH DOES NOT REQUIRE ANY ADJUDICATION, AS THE FACTS ARE ALREADY DECIDED IN GROUND NO.3. 25. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. THE ORDER HAS BEEN PRONOUNCED IN OPEN COURT ON THE 5 TH OCTOBER, 2016. SD/- (..) (D.T.GARASIA) JUDICIAL MEMBER SD/- (..) (O.P.MEENA) ACCOUNTANT MEMBER * / DATED : 5 TH OCTOBER,2016. CPU*