DCIT, Chandigarh V. Sh. Yadwinder Singh Dhaliwal, Chandigarh

ITA 802/CHANDI/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6804 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Next Hearing Date: 06-07-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 11-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Keywords: Capital asset
• Section: 54F; 147; 148

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, B CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER & DR. B.R.R. KUMAR, ACCOUNTANT MEMBER ITA NO. 802/CHD/2017 ASSESSMENT YEAR: 2008-09 THE DCIT, CIRCLE 1(1), VS. SH. YADWINDER SINGH DHA LIWAL, CHANDIGARH CHANDIGARH PAN NO. AYZPD8160F & ITA NO. 803/CHD/2017 ASSESSMENT YEAR: 2008-09 THE DCIT, CIRCLE 1(1), VS. SH. RAJWINDER SINGH DHA LIWAL, CHANDIGARH CHANDIGARH PAN NO. AYSPD0381L (APPELLANT) (RESPONDENT) APPELLANT BY : SH. MANJIT SINGH RESPONDENT BY : SH. TEJ MOHAN SINGH DATE OF HEARING : 20.09.2017 DATE OF PRONOUNCEMENT : 28.09.2017 ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE ABOVE CAPTIONED APPEALS HAVE BEEN PREFERRED BY THE REVENUE AGAINST THE SEPARATE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS)- 1, [HEREINAFTER REFERRED TO AS CIT(A)], CHANDIGARH DATED 23.2.2017. 2 2. SINCE THE ISSUE INVOLVED IN BOTH THE APPEALS ARE IDENTICAL, THEREFORE, THE SAME WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS COMMON ORDER FOR THE SAKE OF CONVEYANCE. WE SHALL TAKE IT A NO. 802/CHD/2017 RELATING TO ASSESSMENT YEAR 2008-09 AS THE LEAD CAS E, WHEREIN THE FOLLOWING GROUNDS HAVE BEEN RAISED BY THE REVENUE. 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE CIT(A) HAS ERRED IN ALLOWING THE APPEAL OF THE ASSE SSEE WITHOUT APPRECIATING THE FACTS OF THE CASE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 1, 81,25,000/- MADE ON ACCOUNT OF CAPITAL GAIN AS TRANSFER HAD T AKEN PLACE WITHIN THE MEANING OF SECTION 2(47) OF THE I.T. ACT AND ACCORDINGLY CAPITAL GAIN WAS LIABLE TO BE PAID ON T HE TRANSACTION 3. BRIEF FACTS OF THE CASE ON THIS ISSUE ARE THAT A HOUSING SOCIETY, NAMED AS THE DEFENCE SERVICE COOPERATIVE HOUSE BUIL DING SOCIETY LTD., MOHALI (HEREINAFTER REFERRED TO AS 'SOCIETY' ), WAS THE OWNER OF 27.3 ACRES OF LAND IN VILLAGE KANSAL, DISTRICT MOHA LI. THIS SOCIETY ENTERED INTO A TRIPARTITE JOINT DEVELOPMENT AGREEME NT (HEREINAFTER REFERRED TO AS 'AGREEMENT') ON 27.04.2007 WITH M/S HASH BUILDERS PVT. LTD., CHANDIGARH (HEREINAFTER REFERRED TO AS 'HASH' ) AND M/S TATA HOUSING DEVELOPMENT COMPANY LTD., MUMBAI (HEREINAFT ER REFERRED TO AS THDC), BY VIRTUE OF WHICH THE SOCIETY WOULD TR ANSFER ITS LAND FOR DEVELOPMENT IN LIEU OF MONETARY CONSIDERATION AND A LSO CONSIDERATION IN KIND TO THE MEMBERS OF THE SOCIETY. THE ASSESSEE WAS ALSO A MEMBER OF THE SAID SOCIETY OWNING 500 SQ. YARDS LAN D. THE TOTAL CONSIDERATION WAS SETTLED AT RS. 80,00,000/- PLUS A LLOTMENT OF ONE FLAT 3 OF 2250 SQ. FEET TO THE ASSESSEE. IN VIEW OF THE AB OVE REASONS, NOTICE U/S 148 WAS ISSUED TO THE ASSESSEE ON AND IN RESPO NSE TO THAT THE ASSESSEE FILED THE RETURN OF INCOME ON 31.03.2015 D ECLARING TOTAL INCOME OF RS. 29,88,228/-. THE ASSESSING OFFICER MA DE ASSESSMENT AT RS. 1,81,25,000/- ON ACCOUNT OF CAPITAL GAINS ACCRU ING TO THE ASSESSEE AS A CONSEQUENCE OF THE TRIPARTITE AGREEMENT. 4. DURING THE APPELLATE PROCEEDINGS, ASSESSEE SUBMI TTED THAT CERTAIN MEMBERS OF THE SAID SOCIETY FILED APPEAL ON IDENTICAL FACTS RELATING TO THE ADDITIONS MADE BY THE ASSESSING OFF ICER IN RELATION TO THE SAME TRANSACTION BEFORE THE HON'BLE PUNJAB & HA RYANA HIGH COURT. THE HON'BLE PUNJAB & HARYANA HIGH COURT HAS DECIDED THE ISSUED IN THE CASE OF SHRI C.S.ATWAL IN ITA 200 OF 2013. THE LD. CIT(APPEALS) ON PERUSAL OF THE ORDER FOUND THAT ADD ITION ON ACCOUNT OF CAPITAL GAIN WAS MADE RELYING UPON ORDER OF ITAT CHANDIGARH BENCH IN THE CASE OF SHRI CHARANJEET ATWAL AND ASSE SSING OFFICER COMPUTED THE CAPITAL GAINS AT RS. 1.81,35,000/- BY TAKING INTO CONSIDERATION RECEIVABLE IN CASH AT RS. 80,000/- AN D VALUE OF ONE FLAT OF 2250 SQ.FT. @ RS. 4500/- SQ. FT. FOR RS. 1,01,25 ,000/-. THE ASSESSEE HAD DISCLOSED CAPITAL GAIN OF RS. 29,88,22 8/- AFTER CLAIMING THE COST OF INDEXATION IN HIS RETURN OF INCOME AS T HE ASSESSEE HAD RECEIVED RS. 32 LACS ONLY DURING THE YEAR UNDER CON SIDERATION. IT WAS, THEREFORE, SUBMITTED THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY ORDER OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF SHRI C.S.ATWAL DATED 22.07.2015, THE OPERA TING PART OF THE ORDER IS REPRODUCED AS UNDER:- ' 46. WE SUMMARISE OUR CONCLUSIONS AS UNDER:- 4 1. PERUSAL OF THE IDA DATED 25.02.2007 READ WITH SALE DEEDS DATED 02.03.2007 AND 25.04.2007 IN RESPECT OF 3.08 ACRES AND 4.62 ACRES RESPECTIVELY WOULD REVEAL THAT THE PARTIES HAD AGREED FOR PRO-RATA TRANSFER OF LAND. 2. NO POSSESSION HAD BEEN GIVEN BY THE TRANSFEROR TO T HE TRANSFEREE OF THE ENTIRE LAND IN PART PERFORMANCE O F JDA DATED 25.02.2007 SO AS TO FALL WITHIN THE DOMAIN OF SECTION 53A OF 1882 ACT. 3. THE POSSESSION DELIVERED, IF AT ALL, WAS AS A LICEN SEE FOR THE DEVELOPMENT OF THE PROPERTY AND NOT IN THE CAPACITY OF A TRANSFEREE. 4. FURTHER SECTION 53A OF 1882 ACT, BY INCORPORATION, STOOD EMBODIED IN SECTION 2(47)(V) OF THE ACT AND A LL THE ESSENTIAL INGREDIENTS OF SECTION 53A OF 1882 ACT WE RE REQUIRED TO BE FULFILLED. IN THE ABSENCE OF REGISTR ATION OF JDA DATED 25.02.2007 HAVING BEEN EXECUTED AFTER 24.09.2001, THE AGREEMENT DOES NOT FALL UNDER SECTI ON 53A OF 1882 ACT AND CONSEQUENTLY SECTION 2(47)(V) O F THE ACT DOES NOT APPLY. 5. IT WAS SUBMITTED BY LEARNED COUNSEL FOR THE ASSESSE E- APPELLANT THAT WHATEVER AMOUNT WAS RECEIVED FROM TH E DEVELOPER, CAPITAL GAINS TAX HAS ALREADY BEEN PAID ON THAT AND SALE DEEDS HAVE ALSO BEEN EXECUTED. IN VI EW OF CANCELLATION OF JDA DATED 25.02.2007, NO FURTHER AM OUNT HAS BEEN RECEIVED AND NO ACTION THEREON HAS BEEN T AKEN. IT WAS URGED THAT AS AND WHEN ANY AMOUNT IS RECEIVE D CAPITAL GAINS TAX SHALL BE DISCHARGED THEREON IN ACCORDANCE WITH LAW. IN VIEW OF THE AFORESAID STAND , WHILE DISPOSING OF THE APPEALS, WE OBSERVE THAT THE ASSESSEE APPELLANTS SHALL REMAIN BOUND BY THEIR SAI D STAND. 6. THE ISSUE OF EXIGIBILITY TO CAPITAL GAINS TAX HAVI NG BEEN DECIDED IN FAVOUR OF THE ASSESSEE, THE QUESTIO N OF EXEMPTION UNDER SECTION 54F OF THE ACT WOULD NOT SU RVIVE 5 ANY LONGER AND HAS BEEN RENDERED ACADEMIC. 7. THE TRIBUNAL AND THE AUTHORITIES BELOW WERE NOT RI GHT IN HOLDING THE ASSESSEE-APPELLANT TO BE LIABLE TO C APITAL GAINS TAX IN RESPECT OR REMAINING LAND MEASURING 13 .5 ACRES FOR WHICH NO CONSIDERATION HAD BEEN RECEIVED AND WHICH STOOD CANCELLED AND INCAPABLE OF PERFORMANCE AT PRESENT DUE TO VARIOUS ORDER PASSED BY THE SUPREME COURT AND THE HIGH COURT IN PILS. THEREFORE, THE APPEALS ARE ALLOWED. 47. CONSEQUENTLY, THE SUBSTANTIAL QUESTIONS OF LAW AS REPRODUCED INTEREST HE BEGINNING OF THE JUDGMENT AR E ANSWERED IN THE MANNER INDICATED HEREINBEFORE AND THE APPEAL S OF THE ASSESSEE ARE DISPOSED OF ACCORDINGLY. THE LD. CIT(APPEALS) FOLLOWING THE JUDGEMENT OF T HE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF SHRI C.S .ATWAL (SUPRA) DELETED THE ADDITIONS MADE BY THE ASSESSING OFFICER . 5. AFTER CONSIDERING RIVAL SUBMISSIONS, WE ARE OF T HE VIEW THAT ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY JUDGE MENT OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF SHRI C.S .ATWAL (SUPRA). THE ASSESSEE DURING THE YEAR HAD RECEIVED RS. 32 LA CS ON ACCOUNT OF SALE AGREEMENT EXECUTED, AND THE ASSESSEE HAD ALREA DY OFFERED THE CAPITAL GAINS ON THE ACTUAL AMOUNT RECEIVED IN THE RETURN OF INCOME FILED IN RESPONSE TO THE NOTICE ISSUED U/S 147 OF T HE ACT, HENCE, IN VIEW OF THE DECISION OF THE HON'BLE HIGH COURT IN T HE CASE OF SHRI C.S.ATWAL (SUPRA), NO FURTHER ADDITIONS ARE WARRANT ED. THE APPEAL OF THE REVENUE IS DISMISSED WITH THE OBSERVATION THAT THE TAXABLE INCOME OF THE ASSESSEE DURING THE YEAR WILL BE REST RICTED TO THE EXTENT OF INCOME RETURNED BY THE ASSESSEE DURING THE YEAR. 6 6. AS STATED ABOVE, THE FACTS AND ISSUE INVOLVED IN ITA NO. 803/CHD/2017 IS IDENTICAL TO THAT OF IN ITA NO. 802 /CHD/2017, THEREFORE, THIS APPEAL OF THE REVENUE ALSO STAND DI SMISSED SUBJECT TO THE OBSERVATIONS MADE ABOVE. 7. IN THE RESULT, THE APPEALS OF THE REVENUE ARE DI SMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 28.09. 2017 SD/- SD/- (DR. B.R.R. KUMAR) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 28.09.2017 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR