ITA Wd. 1(3), Nashik V. Smt. Vimal Baburao Jadhav, Nashik

ITA 841/PUN/2012

• Counselvise Citation: 84124514 RSA 2012
• Duration Of Justice: 1 year(s) 6 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 12-11-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 30-04-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N O N E
• Assessee Lawyers: S P WALIMBE
• Keywords: Sale consideration of property below Jantri Value; Opportunity of being heard; Additional evidence
• Section: 132; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE: SHRI G. S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO. 841 / PN/201 2 ASSESSMENT YEAR : 200 7 - 08 INCOME TAX OFFICER, WARD - 1(3), NA SHIK VS. SMT. VIMAL BABURAO JADHAV, 374, SHRI GANESH, JADHAV MALA, ANANDVALLI, GANGAPUR ROAD, NASHIK (APPELLANT) (RESPONDENT) PAN NO. AMWPJ2989D APPELLANT BY: N O N E RESPONDENT BY: SHRI S.P. WALIMBE DATE OF HEARING : 1 3 - 11 - 2013 DATE OF PRONOU NCEMENT : 26 - 11 - 2013 ORDER P ER R.S. PADVEKAR , JM : - IN THIS APPEAL, THE REVENUE HAS CHALLENGED THE IMPUGNED ORDER OF THE LD. CIT(A) - I , NASHIK DATED 28 - 02 - 2012 FOR THE A.Y. 200 7 - 08 . THE REVENUE HAS TAKEN THE FOLLOWING GROUND S: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE HONORABLE CIT(A) - I, NASIK ERRED IN DELETING THE ADDITION OF RS.62,21,500/ - MADE BY APPLYING THE PROVISIONS OF SECTION 50C. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE HONORABLE CIT(A) - I, NASIK ERRED IN HOLDING THAT POSSESSION OF THE LAND WAS NOT GIVEN BY THE APPELLANT AND THEREFORE THE CAPITAL GAINS WAS NOT TAXABLE IN THE YEAR UNDER CONSIDERATION, OVERLOOKING/IGNORING PARA 4 OF THE SALE/DEVELOPMENT AGREEMENT WHICH SPECIFICALLY STATES THAT POSSESSION OF THE LAND IS HA NDED OVER BY THE APPELLANT ON THE DATE OF THE AGREEMENT ITSELF. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE HONORABLE CIT(A) - I, NASIK ERRED IN GRANTING RELIEF TO THE APPELLANT QUOTING THE DECISION OF 2 ITA NO. 841 /PN/2012, SMT. VIMAL BABURAO JADHAV, NASHIK THE HONORABLE ITAT ' B ', PUNE BENCH DELIVERED IN THE CASE OF B.V. KODRE - HUF IN ITA NO.834/PN/2008 DATED 4/10/201 FOR A.Y. 2004 - 05, WHEN THE FACTS OF THE INSTANT CASE ARE DIFFERENT. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE HONORABLE CIT(A) - I, NASIK OVERLOOKED THE PROVISIONS OF SECTION 4 8 WHICH CLEARLY INDICATE THAT CAPITAL GAINS IS CHARGEABLE TO TAX ON THE BASIS OF RECEIPT OR ACCRUAL OF THE SALE CONSIDERATION . 2. THE ISSUE IN CONTROVERSY IS THE YEAR OF TAXABILITY OF THE CAPITAL GAIN S ON THE TRANSFER OF THE LAND FOR DEVELOPMENT. IN TH IS CASE, THE NOTICE HAS BEEN SERVED ON THE ASSESSEE THROUGH THE DEPARTMENT INFORMING THAT THIS APPEAL HAS BEEN FIXED FOR HEARING ON 12 - 11 - 2013 . THE REPORT OF THE SERVICE OF THE NOTICE IS PLACED ON RECORD. IN SPITE OF DUE SERVICE OF THE NOTICE , THE ASSESS EE DID NOT REMAIN PRESENT FOR HEARING NOR ANY APPLICATION FOR ADJOURNMENT IS FILED. WE , THEREFORE, DISPOSE OFF THIS APPEAL ON MERIT AFTER HEARING THE LD. DR. 3. AS PER THE FACTS ON RECORD , THERE WAS A SEARCH ACTION U/S. 132 OF THE INCOME - TAX ACT AGAINST ONE SHRI BHUPENDRA SHAH, PROPRIETOR OF M/S. BHAVIK DEVELOPERS OF NASHIK ON 08 - 02 - 2008. IN THE SAID SEARCH ACTION , IT WAS NOTICED THAT THE ASSESSEE HAS ENTERED INTO DEVELOPMENT AGREEMENT IN RESPECT OF HER LAND /PROPERTY WITH ONE SHRI ABHIJIT DEELIP NAGPURE ON 18 - 04 - 2006 , BEARING SURVEY NO. 14/1A/4 ADMEASURING 1500 SQ. MTRS. T H E ASSESSEE WAS TO RECEIVE TOTAL CONSIDERATION OF RS.36,00,000/ - . THE ASSESSING OFFICER EXAMINED THE DEVELOPMENT AGREEMENT WHICH WAS REGISTERED WITH THE SUB - REGISTRAR, NASHIK - 3 AND FO UND THAT AS PER THE SAID DEVELOPMENT AGREEMENT , MORE PARTICULARLY AS PER CLAUSE 4 , THE ASSESSEE HAS GIVEN THE POSSESSION OF THE LAND/PROPERTY TO THE DEVELOPER I.E. SHRI ABHIJIT DEELIP NAGPURE ON 18 - 04 - 2006. THE ASSESSING OFFICER, THEREFORE, CONCLUDED THAT THE CAPITAL GAIN ON THE TRANSFER OF THE RIGHTS IN 3 ITA NO. 841 /PN/2012, SMT. VIMAL BABURAO JADHAV, NASHIK THE SAID PROPERTY AS PER THE REGISTERED AGREEMENT , WAS LIABLE TO BE TAXED IN THE A.Y. 2007 - 08 . T HE ASSESSING OFFICER COMPLETED THE ASSESSMENT EX - PARTE U/S. 144 OF THE INCOME - TAX ACT BY ADOPTING THE VALUE OF THE PROPERTY AT RS.70,00,000/ - WHICH WAS ADOPTED FOR PAYMENT OF THE STAMP DUTY A T THE TIME OF REGISTRATION OF THE DEVELOPMENT AGREEMENT . T HE ASSESSING OFFICER DETERMINE THE LONG TERM CAPITAL GAIN OF RS.62,21,500/ - AFTER GIVING THE BENEFIT OF COST OF AC QUISITION. 4. THE ASSESSEE CHALLENGED THE ASSESSMENT ORDER BEFORE THE LD. CIT(A). BEFORE THE LD. CIT (A) THE ASSESSEE ARGUED THAT THE YEAR OF TAXABILITY OF CAPITAL GAIN IS A.Y. 2010 - 11 AS THE POSSESSION OF THE PROPERTY WHICH WAS SUBJECTED TO THE DEVELOP MENT AGREEMENT WAS GIVEN IN THE F.Y. 2009 - 10. THE ASSESSEE ALSO CHALLENGED THE SALE CONSIDERATION ADOPTED BY THE ASSESSING OFFICER. THE ASSESSEE CONTENDED BEFORE THE LD. CIT(A) THAT THE ASSESSEE HAS NOT RECEIVED MOST OF THE MAJOR PART OF THE AGREED CONSI DERATION OF RS.36,00,000/ - AND THERE WAS DISPUTE CARRIED TO THE COURT OF LAW IN RESPECT OF THE SAID DEVELOPMENT AGREEMENT AS THE ADVANCE CHEQUES GIVEN BY SHRI NAGPURE HAD BEEN BOUNCED. AFTER PROLONGED LITIGATION THE ASSESSEE COULD GET THE CONSIDERATION ON LY IN THE F.Y. 2009 - 10 AND THEREAFTER IN THE SAID YEAR THE POSSESSION OF THE LAND/PROPERTY WAS GIVEN TO SHRI NAGPURE. IT WAS CLAIMED BY THE ASSESSEE THAT EVEN IF IN THE AGREEMENT IT IS STATED THAT THE ASSESSEE HAS GIVEN THE POSSESSION BUT IN FACT NO POSSE SSION WAS GIVEN AT THE TIME OF AGREEMENT BY THE ASSESSEE TO THE DEVELOPER AND SEC. 53A OF THE T RANSFER OF THE P ROPERTY ACT IS NOT APPLICABLE. THE ASSESSEE ALSO FILED EVIDENCES BEFORE THE LD. CIT(A) TO SHOW THAT THE ASSESSEE WAS RESIDING IN THE SAID PROPER TY TILL THE POSSESSION WAS GIVEN IN THE F.Y. 2009 - 10. AS NOTED BY THE LD. CIT(A) THE SUBMISSIONS OF THE ASSESSEE WAS FORWARDED TO THE ASSESSING OFFICER FOR HIS COMMENTS AND THE ASSESSING OFFICER SENT HIS 4 ITA NO. 841 /PN/2012, SMT. VIMAL BABURAO JADHAV, NASHIK COMMENTS VIDE REPORT DATED 28 - 10 - 2010. THE LD. CIT (A) IS SILENT WHETHER THE ADDITIONAL EVIDENCES FILED BY THE ASSESSING OFFICER WAS SENT TO THE ASSESSING OFFICER AND WHETHER THE REMAND REPORT ON THE SAME WAS CALLED FOR. HE IS ALSO SILENT ON THE NATURE OF THE ADDITIONAL EVIDENCE WHICH WAS FILED BEFORE HIM . THE ASSESSING OFFICER OBJECTED TO THE CLAIM OF THE ASSESSEE THAT THE POSSESSION OF THE PROPERTY WAS NOT GIVEN TO THE DEVELOPER AS PER THE DEVELOPMENT AGREEMENT DATED 18 - 04 - 2006. HE ALSO OBJECTED FOR ADDITIONAL EVIDENCES FILED BY THE ASSESSEE WITH THE C LAIM THAT THE CAPITAL GAIN IS TAXABLE IN THE A.Y. 2010 - 11. THE LD. CIT(A) IS ALSO SILENT ON THE FACT WHETHER THE ASSESSEE HAS OFFERED THE CAPITAL GAIN IN THE A.Y. 2010 - 11. 5. IN THIS CASE, IT IS NOT DISPUTED THAT AS PER THE DEVELOPMENT AGREEMENT THE AS SESSEE HAS GIVEN THE PHYSICAL POSSESSION TO THE DEVELOPER ON THE LICENSE BASIS AND THAT IS CONFIRM IN CLAUSE ( 4 ) OF THE R EGISTERED D EVELOPMENT A GREEMENT. ONCE THERE IS DOCUMENTARY EVIDENCE IN THE FORM OF REGISTERED DEVELOPMENT AGREEMENT , THE LD. CIT(A) WA S DUTY BOUND TO ELABORATE WHAT WAS THE EVIDENCE WHICH WAS PLACED BEFORE HIM THAT THE ASSESSEE HAS NOT GIVEN ANY POSSESSION AT THE TIME OF EXECUTION OF THE DEVELOPMENT AGREEMENT. MOREOVER, THE LD. CIT(A) HAS ALSO NOT TAKEN ANY PAINS TO PUT ON RECORD T HE DE TAILS OF THE LITIGATION BETWEEN THE ASSESSEE AND THE DEVELOPER WHICH WAS STATED TO BE IN THE COURT OF LAW. IN OUR OPINION, THIS ISSUE NEEDS RECONSIDERATION BY THE LD. CIT(A) AS MANY OF THE RELEVANT FACTS ARE NOT BROUGHT ON RECORD. WE, ACCORDINGLY, SET AS IDE THE IMPUGNED ORDER AND RESTORE THE ISSUE TO FILE OF THE CIT(A) WITH DIRECTIONS TO DECIDE THE ISSUE IN THE LIGHT OF OUR ABOVE OBSERVATIONS BY BRINGING ON RECORD ALL THE RELEVANT FACT S TO ACCEPT THE STAND OF THE ASSESSEE THAT AS STATED IN THE REGISTERED DEVELOPMENT AGREEMENT T HE POSSESSION OF THE LAND/PROPERTY WAS NOT GIVEN ON 18 - 04 - 2006 BUT IT WAS 5 ITA NO. 841 /PN/2012, SMT. VIMAL BABURAO JADHAV, NASHIK GIVEN IN THE F.Y. 2009 - 10. NEEDLESS TO SAY THE CIT(A) IS DIRECTED TO GIVE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND TO PASS THE SPEAKING ORDER. 6. IN THE RESULT, THE REVENUES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 26 - 11 - 2013 SD/ - SD/ - ( G.S. PANNU ) ( R.S. PADVEKAR ) ACCOUNTANT MEMBER JUDICIAL MEMBER RK /PS PUNE , DATED : 26 TH NOVEMBER, 20 1 3 COPY TO 1 ASSESSEE 2 DEPARTMENT 3 THE CIT(A) - I, NASHIK 4 THE CIT - I, NASHIK 5 THE DR, ITAT, B BENCH, PUNE . 6 GUARD FILE. //TRUE COPY// BY ORDER PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE