M.Kandasamy, CHENNAI V. ITO, Tiruppur

ITA 864/CHNY/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77301 (ITAT-CHENNAI)
• Duration Of Justice: 1 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-05-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2009-2010
• Appeal Filed On: 07-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SRHI GURU BASHYAM IRS
• Assessee Lawyers: DR ANITA SUMANTH
• Keywords: Sale consideration of property below Jantri Value
• Section: 50C

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI . . . , ! , ' # $ BEFORE DR. O.K. NARAYANAN, VICE PRESIDENT & SHRI VIKAS AWASTHY, JUDICIAL MEMBER ITA NO.864/MDS/2014 & S.P. NO.136/MDS/2014 (IN ITA NO.864/MDS/2014 ) ASSESSMENT YEAR : 2009-10 SHRI. M. KANDASAMY, 7, BRIDGEWAY COLONY EXTENSION, 4 TH STREET, KONGU MAIN ROAD, TIRUPUR 641 607. [PAN :ADWPK0634K] ( !% /APPELLANT/PETITIONER) VS THE INCOME TAX OFFICER, WARD I(4), TIRUPUR. ( &'!% /RESPONDENT/PETITIONER) ITA NO.865/MDS/2014 & S.P NO.137/MDS/2014 (IN ITA NO.865/MDS/2014 ) ASSESSMENT YEAR : 2009-10 SMT. K. MALARVIZHI, 7, BRIDGEWAY COLONY EXTENSION, 4 TH STREET, KONGU MAIN ROAD, TIRUPUR 641 607. [PAN :AFEPM7040P] ( !% /APPELLANT) VS THE INCOME TAX OFFICER, WARD I(4), TIRUPUR. ( &'!% /RESPONDENT) / APPELLANT BY : DR. ANITA SUMANTH, ADVOCATE / RESPONDENT BY : SRHI. GURU BASHYAM, IRS, JCIT. /DATE OF HEARING : 11.04.2014 /DATE OF PRONOUNCEMENT : 23.05.2014 SP NOS.136 & 137/MDS /2014 (IN I .T.A.NOS.864 &865/MDS/2014 ) AND I.T.A.NOS. 864 &865/MDS/2014. . :- 2 -: #( / O R D E R PER VIKAS AWASTHY, JUDICIAL MEMBER THE ASSESSEES HAVE FILED APPEALS AGAINST THE OR DERS OF THE COMMISSIONER OF INCOME TAX (APPEALS)-II, COIMBATORE DATED 26.02.2014 RELEVANT TO THE ASSESSMENT YEAR 2009-10. THE ASSESSEES IN APPEAL ARE HUSBAND AND WIFE. SINCE THE ISSUE IN BOT H APPEALS IS SIMILAR AND THE FACTS ARE IDENTICAL BOTH THE APPEALS ARE TA KEN UP TOGETHER FOR ADJUDICATION. FOR THE SAKE OF CONVENIENCE THE FAC TS ARE TAKEN FROM ITA NO.864/MDS/2014. 2. THE ASSESSEE ALONGWITH HIS WIFE SOLD TWO PROPERTIES VIDE SALE DEED NOS.6157, 6158 AND 6159 DATED 22.12.2008. THE SAID PROPERTIES WERE PURCHASED BY ONE M/S. PONMUDY MUTHUSAMY GOUND ER TRUST. THE TRUST WAS REPRESENTED BY ASSESSEE HIMSELF AS MA NAGING TRUSTEE OF THE TRUST. THE ASSESSING OFFICER REJECTED THE SALE CONSIDERATION DISCLOSED BY THE ASSESSEES IN THEIR RESPECTIVE RETU RNS OF INCOME FOR THE PURPOSE OF COMPUTING LONG TERM CAPITAL GAINS. THE ASSESSING OFFICER ADOPTED THE VALUE AS DETERMINED U/S.50C OF THE INC OME TAX ACT, 1961 (HEREIN AFTER REFERRED TO AS THE ACT). AGGRI EVED AGAINST THE SP NOS.136 & 137/MDS /2014 (IN I .T.A.NOS.864 &865/MDS/2014 ) AND I.T.A.NOS. 864 &865/MDS/2014. . :- 3 -: ASSESSMENT ORDERS THE ASSESSEES CARRIED APPEALS TO THE COMMISSIONER OF INCOME TAX (APPEALS). BEFORE THE COMMISSIONER O F INCOME TAX (APPEALS), THE ASSESSEES SUBMITTED THAT INADVERTENT LY PROPERTIES IN QUESTION WERE SOLD IN VIOLATION OF PROVISIONS OF TH E TAMIL NADU REFORMS (FIXATION OF CEILINGS OF LAND) ACT, 1961. THE SALE DEEDS WERE DECLARED NULL AND VOID BY THE LOK ADALAT AT TIRUPUR VIDE AWA RD DATED 8.12.2012. THE COMMISSIONER OF INCOME TAX (APPEALS) DEMANDED C ANCELLATION DOCUMENT OF THE REGISTERED SALE DEEDS. SINCE THE A SSESSEES WERE UNABLE TO PRODUCE CANCELLATION DEED, THE COMMISSION ER OF INCOME TAX (APPEALS) DISMISSED THE APPEALS OF THE ASSESSEES. AGGRIEVED AGAINST THE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEA LS), THE ASSESEES HAVE COME IN SECOND APPEAL BEFORE THE TRIBUNAL. 3. DR. ANITA SUMANTH, ADVOCATE APPEARING ON BEHALF OF THE ASSESSEES SUBMITTED THAT THE TRANSACTION OF SALE OF LAND HAS BEEN CANCELLED BY THE LOK ADALAT AWARD DATED 08.12.2012. SINCE THERE IS NO SALE TRANSACTION THERE IS NO QUESTION OF CAPITA L GAINS AND THE PROVISION OF SEC. 50C CANNOT BE INVOKED ON CANCELLE D TRANSACTION. THE LEARNED COUNSEL FURTHER SUBMITTED THAT THE ASSESSEE S HAVE APPLIED FOR CANCELLATION DEEDS AND THE SAME SHALL BE PRODUCED A S AND WHEN THE SP NOS.136 & 137/MDS /2014 (IN I .T.A.NOS.864 &865/MDS/2014 ) AND I.T.A.NOS. 864 &865/MDS/2014. . :- 4 -: SAME IS RECEIVED. THE LD. COUNSEL PRODUCED A PHOT OCOPY OF THE LOK ADALAT AWARD, TIRUPUR TALUK DATED 08.12.2012. 4. ON THE OTHER HAND, SHRI. GURU BHASYAM, REPRESENTIN G THE DEPARTMENT VEHEMENTLY SUPPORTED THE IMPUGNED ORDERS . THE LEARNED DEPARTMENTAL REPRESENTATIVE (DR) SUBMITTED THAT THE ASSESSEES HAD NOT PRODUCED ANY DOCUMENT FOR CANCELLATION OF DEEDS BEFORE THE AUTHORITIES BELOW. THIS CLEARLY SHOWS THAT THE TRU ST IS ENJOYING THE PROPERTIES. SINCE THE PROPERTIES WERE TRANSFERRED T O THE TRUST, THE ASSESSEES ARE LIABLE TO PAY LONG TERM CAPITAL GAINS AS COMPUTED BY THE ASSESSING OFFICER. 5. WE HAVE HEARD BOTH SIDES AND HAVE PURSUED THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE PHOTOCOPY OF THE L OK ADALAT AWARD, DATED 08.12.2012. IT IS AN UNDISPUTED FACT THAT TH E ASSESSEES HAD SOLD TWO PROPERTIES TO M/S. PONMUDI MUTHUSAMY GOUNDER TR UST VIDE SALE DEED NOS.6157, 6158 & 6159, ALL DATED 22.12.2008. SUBSEQUENTLY, IT TRANSPIRES THAT THE ASSESSEES HAD EXECUTED SALE DEE DS IN VIOLATION OF SECTION 37B OF THE TAMIL NADU LAND REFORMS(FIXATION OF CEILINGS OF LAND) ACT, 1961. THE AFORESAID SALE DEEDS REGISTER ED WITH SUB- REGISTER, TIRUPUR EXECUTED IN FAVOUR OF THE TRUST WERE DECLARED NULL AND VOID BY LOK ADALAT VIDE ITS AWARD DATED 08.12.2 012. THE SP NOS.136 & 137/MDS /2014 (IN I .T.A.NOS.864 &865/MDS/2014 ) AND I.T.A.NOS. 864 &865/MDS/2014. . :- 5 -: COMMISSIONER OF INCOME TAX (APPEALS) HAS DISMISSED THE APPEALS OF THE ASSESSEES ON THE GROUND THAT THE ASSESSEES HAV E NOT BEEN ABLE TO PRODUCE ANY DOCUMENT SHOWING CANCELLATION OF SALE D EEDS. 6. AN AWARD OF LOK ADALAT EITHER ON MERITS OR IN TERMS OF SETTLEMENT AGREEMENT SHALL BE FINAL AND BINDING ON ALL THE PARTIES THERETO AND ON PERSONS CLAIMING UNDER THEM. AS PER SEC.22 E OF THE LEGAL SERVICES AUTHORITIES ACT, 1987, EVERY AWARD O F LOK ADALAT IS DEEMED TO BE A DECREE OF A CIVIL COURT. IN VIEW OF THE FACT THAT THE SALE DEEDS HAVE BEE N DECLARED AS NULL AND VOID BY THE AWARD OF LOK ADALAT, WE ARE O F THE CONSIDERED OPINION THAT THERE IS NO FURTHER REQUIREMENT FOR SE EKING CANCELLATION DEEDS. BEFORE US, THE LEARNED COUNSEL HAS PRODUCED A PHOTOCOPY OF THE AWARD. WE REMIT THE ISSUE BACK TO THE ASSESSIN G OFFICER AND DIRECT THE ASSESSEES TO PRODUCE A CERTIFIED COPY OF THE LO K ADALAT AWARD DATED 8.12.2012 PASSED IN LOK ADALAT CASE NO.99/20 12 BETWEEN MRS. SAVITHA MOHANRAJ VS. M/S. PONMUDI MUTHUSAMY GOUNDER TRUST, BEFORE THE ASSESSING OFFICER. THE ASSESSING OFFICER AFTER VERIFYING THE AWARD SHALL PASS NECESSARY ORDER, IN ACCORDANCE WITH LAW. SP NOS.136 & 137/MDS /2014 (IN I .T.A.NOS.864 &865/MDS/2014 ) AND I.T.A.NOS. 864 &865/MDS/2014. . :- 6 -: 7. THE APPEALS OF THE ASSESSEES ARE ALLOWED FOR ST ATISTICAL PURPOSES. 8. THE ASSESSEES HAVE FILED PETITIONS F OR STAY OF IMPUGNED ORDERS IN THE RESPECTIVE APPEALS. SINCE THE APPEAL S HAVE BEEN DISPOSED OFF, THE STAY PETITIONS HAVE BECOME INFRUC TUOUS AND ARE DISMISSED AS SUCH. ORDERS PRONOUNCED ON FRIDAY, THE 23RD OF MAY, 2014, AT CHENNAI. SD/- SD/- ( . . . ) (DR. O.K. NARAYANAN) / VICE PRESIDENT ( ! ) (VIKAS AWASTHY) ' # / JUDICIAL MEMBER /CHENNAI /DATED:23.05.2014. K.V ' #$% &% /COPY TO: 1. ' APPELLANT 2. / RESPONDENT 3. ( ( )/CIT(A) 4. ( /CIT 5. %)* ##+, /DR 6. *-. / /GF. SP NOS.136 & 137/MDS /2014 (IN I .T.A.NOS.864 &865/MDS/2014 ) AND I.T.A.NOS. 864 &865/MDS/2014. . :- 7 -: