ITO, Ward 1(4), Nashik V. Late Smt. Sujata Surendra Muley through L/H Shri Surendra R. Muley, Nashik

ITA 788/PUN/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 89004 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 10 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 02-02-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 04-04-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B C MALAKAR
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Opportunity of being heard; Non compliance
• Section: 50C; 142(1); 144; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE MS. SUSHMA CHOWLA, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO. 788/PN/2013 (ASSESSMENT YEAR : 2008-09) ITO, WARD-1(4), NASHIK .. APPELLANT VS. LATE SMT. SUJATA SURENDRA MULEY, THROUGH LEGAL HEIR, SHRI SURENDRA RANGNATH MULEY, B-23, SHRI GAJANAN COOP. HOUSING SOCIETY, OPP : PANCHWATI KARANJA, NASHIK .. RESPONDENT PAN NO. AZKPM7627A ASSESSEE BY : NONE REVENUE BY : SHRI B.C. MALAKAR DATE OF HEARING : 02-02-2015 DATE OF PRONOUNCEMENT : 25-02-2015 ORDER PER R.K.PANDA, AM : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER DATED 09-01-2013 OF THE CIT(A)-I, NASHIK RELATING T O ASSESSMENT YEAR 2008-09. 2. DESPITE SERVICE OF NOTICE THROUGH RPAD (ACKNOWLE DGEMENT PLACED ON RECORD) NONE APPEARED ON BEHALF OF THE AS SESSEE NOR ANY PETITION SEEKING ADJOURNMENT OF THE CASE WAS FILED. WE THEREFORE PROCEED TO DECIDE THE ISSUE ON THE BASIS OF MATERIA L AVAILABLE ON RECORD AND AFTER HEARING THE LD. DEPARTMENTAL REPRE SENTATIVE. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT IN THIS CA SE INFORMATION WAS GATHERED ACCORDING TO WHICH THE ASSESSEE HAS TR ANSFERRED THE 2 PROPERTY AT SURVEY NO.158/1A 1, NASHIK FOR RS.17,51 ,000/- VIDE SALE DEED DATED 23-01-2008 REGISTERED VIDE NO.895/2 008 IN THE OFFICE OF THE JOINT SUB-REGISTRAR, NASHIK. ACCORDI NG TO THE AO, AS PER THE PROVISIONS OF SECTION 50C OF THE I.T. ACT, THE VALUE ADOPTED FOR THE PURPOSE OF SECTION 48 IS DEEMED TO BE THE F ULL VALUE OF CONSIDERATION RECEIVED OR ACCRUED AS A RESULT OF TR ANSFER. SINCE THE ASSESSEE HAD NOT FILED THE RETURN OF INCOME FOR A.Y . 2008-09 THE AO, AFTER RECORDING REASONS, ISSUED NOTICE U/S.148. THE NOTICE WAS ISSUED ON 27/12/2010 AND THE ASSESSEE WAS ASKED TO FILE THE RETURN OF INCOME WITHIN 30 DAYS FROM THE DATE OF RECEIPT O F THE SAID NOTICE. ALTHOUGH THE NOTICE WAS DULY SERVED ON THE ASSESSEE ON 01-1-2011, HOWEVER, NO RETURN OF INCOME WAS FILED BY THE ASSES SEE. SUBSEQUENTLY, THE AO ISSUED NOTICE U/S. 143(2) AND 142(1) IN RESPONSE TO WHICH THE LEGAL HEIR OF THE ASSESSEE SH RI SURENDRA RANGNATH MULEY APPEARED BEFORE THE AO AND BROUGHT T O THE NOTICE OF THE AO THAT SMT. SUJATA SURENDRA MULEY HAS EXPIR ED ON 16-02- 2008. SUBSEQUENTLY, THE AO ISSUED NOTICE ON THE LE GAL HEIRS IN RESPONSE TO WHICH THE FOLLOWING DOCUMENTS WERE FILE D : 1. DEVELOPMENT AGREEMENT DATED 24.12.2003 WITH BHAGATRAM B. KARAMCHANDANI REGISTERED WITH SUB REGISTRAR, NASHIK VIDE NO. 11172/2003 2. GPA DATED 24.12.2003 IN FAVOUR OF SHRI BHAGATRAM BILANDRAI KARAMCHANDANI REGISTERED WITH SUB REGISTRAR VIDE NO. 11173/2003 3. AGREEMENT DATED 23.1.2008 4. SALE DEED DATED 26/3/2009 3.1 FROM THE PERUSAL OF THE ABOVE, THE ASSESSING OF FICER NOTED THAT THE ASSESSEE HAD INTENDED TO DEVELOP THE PROPE RTY AT 158/1A-1, NASHIK THE ASSESSEE HAS ENTERED INTO DEVELOPMENT A GREEMENT WITH 3 SHRI BHAGATRAM BILANDRAI KARAMCHANDANI ON 24-12-200 3 WHICH IS ALSO REGISTERED WITH THE SUB REGISTRAR, NASHIK VIDE NO.11173/2003. BEFORE THE ASSESSING OFFICER IT WAS CLAIMED THAT MR S. MULEY HAS UTILISED THE AMOUNT RECEIVED FOR REPAYMENT OF OUTST ANDING LOANS TO OTHER PERSONS. THERE IS ANOTHER AGREEMENT DATED 23 -01-2008 REGISTERED VIDE NO.895/2008 WITH SUB REGISTRAR, NAS HIK. THIS AGREEMENT IS BETWEEN MR. KAUSHIK SUNDARDAS VED AND SHRI SWAPNIL PRAKASHCHANDRA RAKA PURCHASERS ON ONE PART AND THE ASSESSEE AND SHRI B.B. KARAMCHANDANI, SELLERS ON SE COND PART. THE PURCHASERS ON ONE PART HAS GIVEN CONSIDERATION OF R S.17,51,000/- TO THE SELLERS ON THE OTHER PART INCLUDING THE ASSESSE E. 3.2 THE ASSESSING OFFICER OBSERVED THAT SMT. SUJATA SURENDRA MULEY EXPIRED ON 16-02-2008 AND SHRI B.B. KARAMCHAN DANI WAS ALSO EXPIRED ON 23-09-2008. THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS HANDED OVER THE POSSESSION OF THE SAID PROPERTY AT SURVEY NO.158/1A-1, NASHIK VIDE AGREEMENT DATED 23- 01-2008. ACCORDING TO THE AO, THE HANDING OVER OF POSSESSION OF THE PROPERTY IS CRUCIAL CONDITION TO DETERMINE THE CAPI TAL GAIN IN THE TRANSFER OF PROPERTY. ACCORDING TO HIM THE CONSIDE RATION WAS ACCRUED TO THE ASSESSEE IN THE IMPUGNED ASSESSMENT YEAR. THE GOVERNMENT VALUATION OF THE SAID PROPERTY IS RS.30, 02,000/-. THE ASSESSING OFFICER, THEREFORE, APPLIED PROVISIONS OF SECTION 50C AND DETERMINED THE LONG TERM CAPITAL GAIN AT RS.25,33,6 50/-, THE WORKING OF WHICH IS AS UNDER : DATE OF PURCHASE OF 0H 17R LAND AT S.NO.158/1A/1, NASHIK 27-03-1987 4 VALUE ESTIMATED AT RS.7000/- PER R 17R INTO RS.7,000/- RS.1,19,000/- INDEXED COST : 551/140 MULTIPLIED BY RS.11,19,000/- RS4,68,350/- GOVT. VALUATION BEING SALE CONSIDERATION FOR THE PURPOSE OF SECTION 48 AND 50C RS.30,02,000/- LESS: INDEXED COST RS.4,68,350/- ------------------- LONG TERM CAPITAL GAIN RS.25,33,650/- ----------------- THE AO ACCORDINGLY COMPLETED THE ASSESSMENT U/S.144 DETERMINING THE LONG TERM CAPITAL GAIN AT RS.25,33,650/-. 4. BEFORE CIT(A) IT WAS SUBMITTED THAT DUE TO THE I NDEBTNESS OF SMT. SUJATA SURENDRA MULEY TO VARIOUS PERSONS SHE W AS COMPELLED TO TRANSFER ALL THE RIGHTS IN THE LAND IN QUESTION BY ENTERING INTO DEVELOPMENT AGREEMENT DATED 24-12-2003 WITH SHRI BH AGATRAM BILANDRAI KARAMCHANDANI. AS PER VARIOUS CLAUSES OF THE DEVELOPMENT AGREEMENT AND PARTICULARLY CLAUSE NOS. 6,7,26,28,29, 30 AND 41 ALL THE RIGHTS IN THE SAID LAND HAVE BEEN TRANSFERRED TO SHRI BHAGATRAM BILANDRAI KARAMCHANDANI. REFERRING TO CL AUSE 7 OF THE SAID AGREEMENT IT WAS SUBMITTED THAT THE TOTAL CONS IDERATION FOR DEVELOPMENT AGREEMENT HAS BEEN DETERMINED IN THIS A GREEMENT AND EXCEPT THE SAID AMOUNT RECEIVABLE THE ASSESSEE IS N OT CONCERNED IN ANY WAY WITH THE SAID PROPERTY. REFERRING TO CLAUS E NO. 29 OF THE AGREEMENT IT WAS SUBMITTED THAT IF ANY BUILDING IS CONSTRUCTED BY SHRI B.B. KARAMCHANDANI ON THE SAID LAND HE SHALL I NVEST THE CAPITAL AND ALL PROFIT AND LOSS SHALL BELONG TO HIM. AS PE R CLAUSE NO.30 IT WAS SPECIFIED THAT SHRI B.B. KARAMCHANDANI SHALL HA VE RIGHT TO SALE THE CONSTRUCTED PROPERTY AND SHALL ENTER INTO AGREE MENT AND ALSO CAN 5 REGISTER THE SAID AGREEMENT WITH THE SUB-REGISTRAR. AS PER CLAUSE 7 THE ASSESSEE HAS GIVEN ALL RIGHTS T O SHRI B.B. KARAMCHANDANI BY ENTERING INTO IRRECOVERABLE POWER OF ATTORNEY. IT WAS SUBMITTED THAT THE ASSESSEE HAS RECEIVED THE CONSIDERATION ON DEVELOPMENT AGREEMENT IN DECEMBER, 2003 AND THE DEB TS OF THE ASSESSEE AND HER FAMILY WERE ALSO CLEARED BY SHRI B .B. KARAMCHANDANI IN DECEMBER, 2003. RELYING ON THE D ECISION OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF CHATURBHUJ DWARKADAS KAPADIA VS. CIT REPORTED IN 260 ITR 491 (BOM), IT W AS ARGUED THAT THE DATE OF TRANSFER AS PER PROVISIONS OF SECTION 2 (47) IS THE DATE OF DEVELOPMENT AGREEMENT. THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF FIROZ MASANI, NASHIK WAS AL SO BROUGHT TO THE NOTICE OF THE CIT(A). 4.1 IT WAS ARGUED THAT SUBSEQUENTLY VIDE REGISTERED AGREEMENT DATED 31-12-2007 SHRI B.B. KARAMCHANDANI TRANSFERRE D THE SAID PROPERTY/ALL THE RIGHTS IN THE PROPERTY TO SHRI KAU SHIK SUNDARDAS VED AND SHRI SWAPNIL PRAKASHCHAND RAKA ON THE BASIS OF THE REGISTERED DEVELOPMENT AGREEMENT DATED 04-12-2003 A ND GENERAL POWER OF ATTORNEY DATED 24-12-2003 OBTAINED FROM TH E ASSESSEE BY HIM. SHRI B.B. KARAMCHANDANI VIDE REGISTERED AGREE MENT DATED 31- 12-2007 HAS RECEIVED CONSIDERATION OF RS.17,51,000/ - FROM SHRI KAUSHIK SUNDARDAS VED AND SWAPNIL PRAKASHCHAND RAKA . THE ASSESSEE HAS NOT RECEIVED ANY CONSIDERATION IN RESP ECT OF THE AGREEMENT DATED 31-12-2007 REGISTERED ON 23-01-2008 . THE ASSESSEE IS IN NO WAY CONCERNED WITH THE SAID DEAL WITH THE ABOVE- MENTIONED PARTIES. HOWEVER, SHE HAS SIGNED THE AGR EEMENT AS 6 AGREED IN DEVELOPMENT AGREEMENT DATED 24-12-2003 TO FACILITATE THE TRANSACTION BETWEEN THE ABOVE MENTIONED 2 PARTIES. THE TRANSFER OF THE PROPERTY/ALL THE RIGHTS IN THE PROPERTY HAS BEE N COMPLETED FROM SHRI B.B. KARAMCHANDANI TO SHRI KAUSHIK SUNDARDAS V ED AND SWAPNIL PRAKASHCHAND RAKA ON 31-12-2007 IN VIEW OF PROVISIONS OF SECTION 2(47). 4.2 THEREAFTER A REGISTERED PURCHASE DEED DATED 26- 3-2009 HAS BEEN ENTERED INTO BETWEEN SHRI KAUSHIK SUNDARDAS VE D AND SHRI SWAPNIL PRAKASHCHAND RAKA AND THE APPELLANT I.E. SU JATA S. MULEY AND SHRI B.B. KARAMCHANDANI FOR CONSIDERATION OF RS .17,51,000/- WHICH IS THE SAME CONSIDERATION AS PER AGREEMENT ST ATED IN PRECEDING PARA DATED 31-12-2007 REGISTERED ON 23-01 -2008 BETWEEN THE SAME PARTIES. THE SAME AGREEMENT HAS BEEN GIVEN EFFECT TO BY ENTERING INTO THE REGISTERED PURCHASE DEED ON 26-03 -2009. IT WAS REITERATED THAT THE TRANSFER OF THE PROPERTY / ALL RIGHTS IN THE PROPERTY FROM SHRI B.B. KARAMCHANDANI TO SHRI KAUSHIK SUNDAR DAS VED AND SHRI SWAPNIL PRAKASHCHAND RAKA TOOK PLACE ON 31-12- 2007 IN VIEW OF PROVISIONS OF SECTION 2(47) AND THE DECISIONS OF HON'BLE BOMBAY HIGH COURT AND HON'BLE ITAT, PUNE REFERRED TO IN EA RLIER PARA. FURTHER VIDE THIS PURCHASE DEED SHRI VED AND SHRI R AKA HAVE BECOME REGISTERED OWNERS OF THE PROPERTY. THE ASSES SEE IS IN NO WAY CONCERNED WITH THE TRANSACTION AND HAS NOT RECE IVED A SINGLE RUPEE IN RESPECT OF THE TRANSACTION BY PURCHASE DEE D. IT WAS ACCORDINGLY ARGUED THAT CAPITAL GAIN, IF ANY, HAS T O BE WORKED OUT IN THE HANDS OF SHRI B.B. KARAMCHANDANI AND NOT IN THE HANDS OF THE ASSESSEE SMT. SUJATA SURENDRA MULEY. 7 5. BASED ON THE ARGUMENTS ADVANCED BY THE ASSESSEE THE LD.CIT(A) DELETED THE ADDITION MADE BY THE AO BY OB SERVING AS UNDER : 7. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE , THE ASSESSMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT. THIS IS A CASE OF AN ASSESSMENT U/S 144 WHICH HAS HAPPENED BECAUSE O F CERTAIN NON COMPLIANCE ON THE PART OF THE ASSESSEE. IT IS A SETTLED POSITION OF LAW THAT IN MAKING A BEST JUDGEMENT ASSESSMEN T, THE AO DOES NOT POSSES ABSOLUTELY ARBITRARY AUTHORITY TO ASSESS AT ANY FIGURES HE LIKES AND HE SHOULD BE GUIDED BY RULES OF JU STICE EQUITY AND GOOD CONSCIENCE. A BEST JUDGEMENT ASSESSMENT, THEREFO RE, IS NOT BY WAY OF PENALTY FOR NON-COMPLIANCE AND THE BE ST JUDGMENT ASSESSMENT OUGHT TO BE BASED ON A FAIR AND PROPER ESTIMAT E OF THE ASSESSEE'S INCOME TO BE BASED ON MATERIAL TO THE EXTENT T O WHICH THE SAME IS AVAILABLE ON RECORD. FURTHER, THERE SHOULD BE AN INTELLIGENT AND WELL GROUNDED ESTIMATE AND SHOULD ALSO BE RATIONAL AND FAIR IN ALL CIRCUMSTANCES OF THE CASE. EVEN THOUGH THERE IS AN ELEMENT OF GUESS WORK IN A BEST JUDGEMENT ASSESSMENT IT SHO ULD NOT BE WILD ONE BUT SHOULD HAVE REASONABLE NEXUS TO TH E AVAILABLE MATERIAL AND THE CIRCUMSTANCES OF THE CASE. THEREFORE, THE POWER OF ASSESSMENT U/S 144 SHOULD BE EXERCISED IN A QUASI JUDICIAL MANNER. IT IMPLIES THAT THE AO SHOULD GIVE HIS REASONS FOR ARRIV ING AT A PARTICULAR FIGURE OF INCOME BECAUSE SUCH AN ORDER IS SU BJECT MATTER OF APPEAL. THE HON'BLE KOLKATA HIGH COURT DEALING W ITH BEST JUDGEMENT ASSESSMENT IN THE CASE OF JWALA DUTT JEEVAN KU MAR CWT (1995) 189 ITR 183 (CAL.) HAS HELD THAT THE FIRST APP ELLATE AUTHORITY NEED NOT NECESSARILY CONFINE ITSELF TO THE MATERIAL ON RECORD AT THE TIME OF ASSESSMENT. THEREFORE, IN DISPOSING OFF AN APPEAL AGAINST ASSESSMENT U/S 144, THE FIRST APPELLATE AUTHORITY IS REQUI RED TO MAKE SUCH ENQUIRIES AS IT THINKS FIT. 7.1 ON PERUSAL IT HAS BEEN NOTICED THAT THE APPELLAN T HAS TRANSFERRED A PLOT OF LAND AT S.NO. 158/1 A/1 AT TAR WALA NAGAR, DINDORI ROAD, MERI TO SHRI BHAGATRAM BILANDRAI KARA MCHANDANI AS PER REGISTERED DEVELOPMENT AGREEMENT AND IRREVOCABLE GPA ON 24/12/2003. IT HAS ALSO BEEN NOTICED THAT AS PER CLA USE NO. 6, 7, 26,28,29,30 AND 41 ALL THE RIGHTS IN THE SAID LAND HA VE BEEN TRANSFERRED TO SHRI BHAGATRAM BILANDRAI KARAMCHANDAN I. THE FACT OF TRANSFER OF ALL THE RIGHTS IS SPECIFICALLY MENTIONED IN PARA 6. IT HAS BEEN MENTIONED IN PARA 7 OF THE DEVELOPMENT AGREEME NT THAT THE TOTAL CONSIDERATION FOR DEVELOPMENT AGREEMENT HAS BEE N DETERMINED IN THIS AGREEMENT AND ACCEPT THE SAID AMOU NT RECEIVABLE, THE APPELLANT IS NOT CONCERNED IN ANY WA Y WITH THE SAID LAND. IT HAS ALSO BEEN NOTICED THAT IT IS CLEARLY STAT ED IN CLAUSE NO.29 THAT IF ANY BUILDING IS CONSTRUCTED BY SHRI BHAGATRA M BILANDRAI KARAMCHANDANI ON THE SAID LAND, HE SHALL INVEST CAPITA L AND ALL PROFIT AND LOSS SHALL BELONG TO HIM. FURTHER, AS PER CL AUSE 30, SHRI BHAGATRAM BILANDRAI KARAMCHANDANI HAS RIGHT TO SALE T HE CONSTRUCTED PROPERTY BY ENTERING INTO REGISTERED AGRE EMENTS WITH THE CUSTOMERS. FURTHER, THE APPELLANT HAS GIVEN ALL TH E RIGHTS IN THE PROPERTY TO SHRI BHAGATRAM BILANDRAI KARAMCHANDANI BY ENTERING INTO IRREVOCABLE GPA. 8 7.2 IN VIEW OF THE ABOVE FACTS, I AM OF THE CONSIDERE D VIEW THAT THE PROPERTY HAS BEEN TRANSFERRED BY THE APPELLANT T O SHRI BHAGATRAM BILANDRAI KARAMCHANDANI ON 24/12/2003 AS P ER THE PROVISIONS OF SECTION 2(47) OF THE ACT. THE ABOVE PROP OSITION OF LAW IS SUPPORTED BY THE DECISION IN THE CASE OF CHATURBHUJ DWARKADAS KAPADIA VS. CIT (2003) 260 ITR 491(BOM). IN THIS CASE, IT HAS BEEN LAID DOWN BY HON'BLE BOMBAY HIGH COURT THAT IF IN T HE CASE OF DEVELOPMENT AGREEMENT, IF THE CONTRACT DEED AS A WHO LE, INDICATES PASSING OF OR TRANSFERRING OF COMPLETE CONTROL OVER T HE PROPERTY IN FAVOUR OF THE DEVELOPER, THEN THE DATE OF THE CONTR ACT WOULD BE RELEVANT TO DECIDE THE YEAR OF CHARGEABILITY OF CAP ITAL GAINS AND SUBSTANTIAL PERFORMANCE OF CONTRACT WOULD BE IRRELEVA NT. THE HEAD NOTES OF THE SAID DECISION READS AS UNDER: 'CAPITAL GAINS-ACCRUAL-TRANSFER OF PROPERTY UNDER A DEVELOPMENT AGREEMENT-ARRANGEMENTS CONFERRING PRIVILEGES OF OWNER SHIP EVEN WITHOUT TRANSFER OF TITLE FALL UNDER S. 2(47)(V)-IN C ASES OF DEVELOPMENT AGREEMENTS, THE YEAR OF CHARGEABILITY OF CAPITAL GAINS IS THE YEAR IN WHICH THE CONTRACT IS EXECUTED - SUBSTA NTIAL PERFORMANCE OF THE CONTRACT IS NOT RELEVANT- IF THE CONTRACT, READ AS A WHOLE, INDICATES PASSING OF OR TRANSFERRING OF COMPL ETE CONTROL OVER THE PROPERTY IN FAVOUR OF THE DEVELOPER, THEN THE DATE OF THE CONTRACT WOULD BE RELEVANT TO DECIDE THE YEAR OF CH ARGEABILITY- UNDER THE TERMS OF THE AGREEMENT BETWEEN THE ASSESSEE AN D THE DEVELOPER A LIMITED POWER OF ATTORNEY WAS INTENDED T O BE GIVEN TO THE DEVELOPER TO DEAL WITH THE PROPERTY-HENCE, THE DATE OF CONTRACT VIZ. 18 TH AUG., 1994 WAS THE RELEVANT DATE OF TRANSFER UNDER S . 2(47)(V)-FINDING OF THE TRIBUNAL THAT THE TRANSFER H AD TAKEN PLACE DURING THE ASST. YR. 1996-97 IS ALSO VITIATED BY MISTAKE S APPARENT ON THE FACE OF THE RECORD'. 7.3 THE ABOVE PROPOSITION OF LAW CONTENDED BY THE A PPELLANT IS ALSO SUPPORTED BY FOLLOWING DECISIONS:- DR. MAYA SHENOY VS. ACIT 124 TTJ (HYD.) 692; DR. T. ACHYUTHA RAO VS. ACIT 13( 1) HYD. 106 ITD 338(HYD.); SMT. LALITHA RAMASWAMY VS. ITO (2000) 75 ITD 293 (MUM.); ACIT VS. MRS. GEETADEVI PASAN (2006) 104 TTJ 3 75(MUM.); VEMANNA REDDY (HUF) VS. ITO (2008) 1 DTR 321 (BANG.) ; TAHER ALI MOHAMMED POONAWALA VS. ADDL.CIT (2009) 124 TTJ (PUNE ) 387; SHRI SURESH CHANDRA AGRAWAL VS. ITO AND SUSHILA S. AGR AWAL VS. ITO (2011) TIOL 662 IT AT (MUM.). 7.4 IN VIEW OF THE ABOVE FACTS AND DISCUSSION, I AM OF THE CONSIDERED VIEW THAT THE CAPITAL GAIN HAS ACCRUED TO THE APPELLANT ON 24/12/2003 I.E. IN A.Y. 2004-05 ON TRANSFER OF TH E PROPERTY TO SHRI BHAGATRAM BILANDRAI KARAMCHANDANI; THE CAPITAL GAIN HAS ACCRUED TO SHRI BHAGATRAM BILANDRAI KARAMCHANDANI O N 23/01/2008 I.E. IN A.Y. 2008-09 ON TRANSFER OF THE P ROPERTY TO SHRI KAUSHIK SUNDARDAS VED AND SHRI SWAPNIL PRAKASHCHAND RA CA. THEREFORE, THE A.O. IS NOT JUSTIFIED IN TAXING THE CA PITAL GAIN IN THE HANDS OF THE APPELLANT IN A.Y. 2008-09. THE CAPITAL GAIN ASSESSED BY THE A.O. IN THE HANDS OF THE APPELLANT AT RS. 25,33, 650/- IS DELETED. THE A.O. IS DIRECTED ACCORDINGLY. GROUND NOS. 1 TO 3 ARE ALLOWED. 6. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REVE NUE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : 9 1. IN THE FACTS & CIRCUMSTANCES OF THE CASE, WHETHER THE LD CIT(A) WAS CORRECT IN ARRIVING AT THE CONCLUSION THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN TAXING THE CAPITAL GAIN IN THE HANDS OF THE APPELLANT FOR A.Y.2008- 09 AND THEREBY DELETED THE CAPITAL GAIN ASSESSED AT RS 25,33,650/-? 2. IN THE FACTS & CIRCUMSTANCES OF THE CASE, WHETHER T HE LD CIT(A) WAS CORRECT IN TAKING THE VIEW THAT THE CAPIT AL GAIN WAS ACCRUED TO THE ASSESSEE (APPELLANT) ON 24.12.2003 I.E. IN A.Y.2004- 05 ON TRANSFER OF PROPERTY TO MR BHAGATRAM BILANDRAI KARAMCHANDANI AND THE CAPITAL GAIN HAD ACCRUED TO S HRI BHAGATRAM BILANDRAI KARAMCHANDANI ON 23.01.2008 I.E. IN A.Y.2 008-09, AS AGAINST THE FACTS THAT, AS MENTIONED IN AGREEMENT REGI STERED ON 23.01.2008 VIDE REG.NO.895/2008 WITH THE SUB-REGISTR AT-1, NASHIK, IT IS SPECIFICALLY MENTIONED THAT MR. B.B. KAR AMCHANDANI WAS AGED & ILL WAS NOT ABLE TO DEVELOP THE SAID PROPER TY AND HE ACCORDINGLY INTIMATED TO THE ASSESSEE AND ACCORDINGLY T HE ASSESSEE HAS DECIDED TO SELL THE SAID PROPERTY TO MR. KAUSHIK S. VED & MR. SWAPNIL P. RAKA, AND MR. B.B. KARAMCHANDANI HAS GIVE N CONSENT TO THE TERMS AND CONDITIONS VIDE THIS AGREEMENT AND LATE SMT SUJATA S. MULEY AND B.B KARAMCHANDANI HAS ALSO SIGNED THE SAI D AGREEMENT? 3. THE APPELLANT RESERVES THE RIGHT TO ADD, TO ALTER , TO AMEND ANY GROUNDS OF APPEAL AT ANY STAGE OF THE APPELLATE P ROCEEDINGS BEFORE THE HON'BLE TRIBUNAL. 7. THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY OPP OSED THE ORDER OF THE CIT(A) IN DELETING THE ADDITION. HE S UBMITTED THAT THE DECISION OF CIT(A) IS NOT ACCEPTABLE. THE ASSESSEE INTENDED TO DEVELOP HER PROPERTY AT S.N0.158/1A/1, NASHIK. THE ASSESSEE & B.B. KARAMCHANDANI VIDE AGREEMENT DATED 23.01.2008 HAVE AGREED TO SALE THE PROPERTY FOR RS. 17,51,000/- TO K AUSHIK SUNDARDAS VED & MR. SWAPNIL PRAKASHCHANDRA RAKA. THUS THE AS SESSEE HAS HANDED OVER THE POSSESSION OF THE PROPERTY TO THE PURCHASERS VIDE AGREEMENT DATED 23-01-2008. THE LD. CIT(A) HAS NOT APPRECIATED THE FACTS THAT THE AGREEMENT DATED 23-01-2008 IS AC TUALLY SIGNED BY THE ASSESSEE AND MR. B.B. KARAMCHANDANI. THUS TH E DEVELOPMENT AGREEMENT AND POWER OF ATTORNEY BETWEEN THE ASSESSE E & MR. B.B. KARAMCHANDANI DATED 24.12.2003 WERE NOT REMAINED 10 OPERATIVE/IRREVOCABLE AS MR B.B.KARAMCHANDANI FAILE D TO DEVELOP THE SAID PROPERTY AND HE ALSO AGREED ALONGWITH THE ASSESSEE TO SALE THE PROPERTY TO MR. KAUSHIK S. VED & MR SWAPNIL P. RAKA. SINCE THE PROPERTY WAS NOT DEVELOPED BY MR. B.B. KARAMCHA NDANI, THE DECISIONS RELIED ON BY THE ID CIT(A) IN THE CASE OF CHATURBHUJ DWARKADAS KAPADIA VS. CIT (2003) 260 ITR 491 (BO M) ARE NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. HE SUB MITTED THAT IN AGREEMENT REGISTERED ON 23-01-2008 VIDE REG.NO.895/ 2008 WITH THE SUB-REGISTRAR-1, NASHIK, IT IS CLEARLY MENTIONE D THAT MR.B.B. KARAMCHANDANI WAS AGED & ILL AND WAS NOT ABLE TO DE VELOP THE SAID PROPERTY AND HE ACCORDINGLY INTIMATED TO THE ASSESS EE AND ACCORDINGLY THE ASSESSEE HAS DECIDED TO SELL THE SA ID PROPERTY TO MR. KAUSHIK S. VED & MR. SWAPNIL P. RAKA. MR. B.B. KARA MCHANDANI HAS GIVEN CONSENT TO THE TERMS AND CONDITIONS VIDE THIS AGREEMENT. THE LD CIT(A) HAS NOT CONSIDERED THESE FACTS. SO TH E LD. CIT(A)'S VIEWS THAT THE CAPITAL GAIN ACCRUED TO THE ASSESSEE ON 24-12-2003 AND TO MR B.B. KARAMCHANDANI ON 24-01-2008 ARE NOT CORRECT. THE ASSESSEE EVEN HAS NOT FURNISHED ANY EVIDENCE OF FIL ING OF RETURN U/S. 139(1) FOR A.Y.2004-05 BEFORE THE LD. CIT(A). THE L D. CIT(A) ALSO HAS NOT APPRECIATED THESE FACTS. AS PER PROVIS IONS OF SECTION 50C 'THE CONSIDERATION WAS ACCRUED AS A RESULT OF T HE TRANSFER BY THE ASSESSEE OF A CAPITAL ASSET'. THUS THE PROPERTY WAS TRANSFERRED VIDE AGREEMENT REGISTERED ON 23.01.2008 AND SINCE THE AS SESSEE HAS FAILED TO FILE THE RETURN OF INCOME FOR A.Y.2008-09 , THE LTCG WAS WORKED OUT AT RS.25,33,650/- AS PER PROVISIONS OF S ECTION 50C. 11 THUS THE LTCG INCOME WAS CORRECTLY ASSESSED IN THE PROPER ASSESSMENT YEAR 2008-09. 8. WE HAVE CONSIDERED THE ARGUMENTS ADVANCED BY THE LD. DEPARTMENTAL REPRESENTATIVE AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. FROM THE STATEMENT OF FACTS FIL ED BY THE REVENUE AS WELL AS THE DETAILS FILED BEFORE LD.CIT(A) WE FI ND THE ASSESSEE INTENDED TO DEVELOP HER PROPERTY AT S.NO.158/1A/1, NASHIK. THE ASSESSEE & B.B. KARAMCHANDANI VIDE AGREEMENT DATED 23-01-2008 HAVE AGREED TO SALE THE PROPERTY FOR RS. 17,51, 000/- TO KAUSHIK SUNDARDAS VED & MR. SWAPNIL PRAKASHCHANDRA RAKA. T HUS THE ASSESSEE HAS HANDED OVER THE POSSESSION OF THE PROP ERTY TO THE PURCHASERS VIDE AGREEMENT DATED 23-01-2008. THE AG REEMENT DATED 23-01-2008 IS ACTUALLY SIGNED BY THE ASSESSEE AND M R. B.B. KARAMCHANDANI. THEREFORE, WE FIND MERIT IN THE ARG UMENT OF THE LD. DEPARTMENTAL REPRESENTATIVE THAT THE DEVELOPME NT AGREEMENT AND POWER OF ATTORNEY BETWEEN THE ASSESSEE & MR. B. B. KARAMCHANDANI DATED 24-12-2003 WERE NOT REMAINED OP ERATIVE AS MR B.B.KARAMCHANDANI FAILED TO DEVELOP THE SAID PRO PERTY AND HE ALSO AGREED ALONGWITH THE ASSESSEE TO SALE THE PROP ERTY TO MR. KAUSHIK S. VED & MR SWAPNIL P. RAKA. SINCE THE PRO PERTY WAS NOT DEVELOPED BY MR. B.B. KARAMCHANDANI, THE DECISIONS RELIED ON BY THE LD. CIT(A) IN THE CASE OF CHATURBHUJ DWARKADAS KAPADIA VS. CIT (2003) 260 ITR 491 (BOM) IN OUR OPINION ARE NO T APPLICABLE TO THE FACTS OF THE PRESENT CASE. IN AGREEMENT REGIST ERED ON 23-01- 2008 VIDE REG.NO.895/2008 WITH THE SUB-REGISTRAR-1, NASHIK, IT IS CLEARLY MENTIONED THAT MR.B.B. KARAMCHANDANI WAS AG ED & ILL AND 12 WAS NOT ABLE TO DEVELOP THE SAID PROPERTY AND HE AC CORDINGLY INTIMATED TO THE ASSESSEE AND ACCORDINGLY THE ASSES SEE HAS DECIDED TO SELL THE SAID PROPERTY TO MR. KAUSHIK S. VED & M R. SWAPNIL P. RAKA. MR. B.B. KARAMCHANDANI HAS GIVEN CONSENT TO T HE TERMS AND CONDITIONS VIDE THIS AGREEMENT. HOWEVER, WE FIND TH E LD. CIT(A) HAS NOT CONSIDERED THESE FACTS. SO THE LD. CIT(A)'S VIEWS THAT THE CAPITAL GAIN WAS ACCRUED TO THE ASSESSEE ON 24-12-2 003 AND TO MR B.B. KARAMCHANDANI ON 24-01-2008 IN OUR OPINION ARE NOT BASED ON PROPER APPRECIATION OF FACTS. CONSIDERING THE TOTA LITY OF THE FACTS OF THE CASE AND IN THE INTEREST OF JUSTICE, WE DEEM IT PROPER TO RESTORE THE ISSUE TO THE FILE OF LD.CIT(A) WITH A DIRECTION TO DECIDE THE ISSUE AFRESH AND IN ACCORDANCE WITH LAW AFTER GIVIN G DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WE HOL D AND DIRECT ACCORDINGLY. THE GROUNDS RAISED BY THE REVENUE ARE ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES 9. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 25-02-2015. SD/- SD/- (SUSHMA CHOWLA) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBE R PUNE DATED: 25 TH FEBRUARY, 2015 SATISH COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. THE CIT(A)-I, NASHIK 4. THE CIT-I, NASHIK 5. THE D.R, B PUNE BENCH 6. GUARD FILE BY ORDER // TRUE COPY // ASSISTANT REGISTRAR ITAT, PUNE BENCHES, PUNE