Appeal Details
Counselvise Citation
[2013] 120 COUNSELVISE.COM (IT) 4829 (ITAT-HYDERABAD)
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
1 year(s) 5 month(s) 7 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
26-11-2013
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
A
Assessment Year
2007-2008
Appeal Filed On
19-06-2012
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A ', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO.958/HYD/12 : ASSESSMENT YEAR 2007 - 08 ITA NO.959/HYD/12 : ASSESSMENT YEAR 2007 - 08 SHRI HARI BHAGWAN KANYALAL, HYDERABAD (PAN ADOPK 9344 C ) V/S. ADLL. COMMISSIONER OF INCOME - TAX RANGE 13, HYDERABAD (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI P.MURALI MOHAN RAO RESPONDENT BY : SHRI P.SOMASEKHAR REDDY DR DATE OF HEARING 25 .1 1 .2013 DATE OF PRONOUNCEMENT 25.11.2013 O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THESE TWO APPEALS BY THE ASSESSEE RELATE TO ASSESSMENT YEAR 2007 - 08. WHILE THE APPEAL, ITA NO.958/HYD/2012 IS DIRECTED AGAINST THE ORDER OF THE CIT(A) II, HYDERABAD DATED 13.2.2012, THE OTHER APPEAL, ITA NO.959/HYD/2012 IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME - TAX I, HYDERABAD DATED 12.1.2012 PASSED UNDER S.263 OF THE ACT. SINCE THESE TWO APPEALS ARE INTER - CONNECTED AND INVOLVE A COMMON ISSUE, TH E Y ARE BEING DISPOSED OF BY THIS C OMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. FACTS OF THE CASE LEADING TO THE FILIN G OF THE PRESENT APPEALS BEFORE US, IN BRIEF, ARE THAT THE ASSESSEE, PROPRIETOR OF ASIAN FIL M S DOING BUSINESS OF DI S TR I BUTION AND EXHIBITION OF FILMS FILED HIS RETURN OF INCOME ON 8.8.2007 DECLARING INCOME FROM BUSINESS AND CAPITAL GAINS OF R S .18,61,650. THE ASSESSING OFFICER GATHERED FROM THE RETURN, IN CONNECTION WITH THE INCOME OFFERED UNDER THE HEAD CAPITAL GAINS IN RESPECT OF SALE OF PROPERTY AT PLOT NO1, SURVEY NO.11, ADMEASURING 1119 SQ. ITA NO. 95 8 - 959 / HYD/201 2 SHRI HARI BHAGWAN KANYALAL, HYDERABAD 2 Y ARDS (OR 935.63 SQ. M. ) SITUATED AT GUTTALA BEGAMPET, VILL. SERILINGAMALLY MANDAL AND MUNICIPALITY, R.R. DISTRICT, THAT THE ASSESSEE SOLD THE SAID PROPERTY FOR A CONSIDERATION STATED TO HAVE BEEN RECEIVED AS PER SALE DEED OF RS.35 LAKHS. THE SAME WAS REGISTERED WITH THE DISTRICT RE G I S TRAR, R A NGA REDDY DI S TRICT ON 13.10.2006 WHEREIN THE SRO ADOPTED THE VA LUE FOR STAMP DUTY PURPO S ES AT R S .64,14,000. TH E RE IS THUS A DIFFE R ENCE OF RS.32.14 LAKHS BETWEEN THE VALUE ADOPTED BY THE S RO AND THE CONSIDERED SAID TO HAVE BEEN RECEIVED BY THE ASSESSEE. ASSESSEE EXPLAINED BEFORE THE ASSESSING OFFICER, IN THIS REGARD A S FOLLO W S - WITH REFERENCE TO YOUR ABOVE, WE ARE HEREWLTH SUBMITTING THE FOLLOWING INFORMATION IN RESPECT OF SRI HARI 8HAGWAN KANYALAI (PROP: ASIAN FILMS) FOR THE ASST. YEAR 2007 - 2008. 1 . WE WOULD LIKE TO SUBMIT THAT, LEDGER A/C. COPIES IN THE BOOKS OF ASIAN THEATRES PVT. LTD. FOR JOINT VENTURE SHARE. THE COPIES OF THE CONFIRMATION LETTERS ARE ALSO ENCLOSED FOR YOUR KIND INFORMATION AND RECORDS. 2 . WE WOULD LIKE TO SUBMIT THAT DURING THE YEAR THE ASSESSEE HAS NOT DONE ANY BUSINESS AND HENCE THE INCOME ON ACCOUNT OF DISTRIBUTION INCOME HAS NOT BEEN RECEIVED BY THE ASSESSEE AND ONLY EXPENDITURE HAS BEEN INCURRED FOR RUNNING THE BUSINESS AND THE BUSINESS E XPENDITURE SUCH AS SALARIES, RENT, AND OTHER OFFICE EXPENSES HAS BEEN INCURRED BY THE ASSESSEE WHICH IS TOWARDS THE RUNNING AND MAINTENANCE OF THE OF THE BUSINESS OF THE ASSESSEE AND THE SAME MAY PLEASE BE ALLOWED TO THE ASSESSEE FOR THE ABOVE YEAR. IN THE EARLIER YEAR WE ARE HAVING THE INCOME TOWARDS THE DISTRIBUTION AND PRODUCTION INCOME AND DURING THE NEXT YEAR WE GOT INCOME UNDER THAT HEAD. THE EXPENDITURE TOWARDS THE STAFF SALARIES, OFFICE RENT, OFFICE MAINTENANCE, ELECTRICITY AND TELEPHONE CHARGES, MA Y PLEASE BE ALLOWED TO THESE EXPENDITURE. 3 . WE WOULD LIKE TO SUBMIT FOLLOWING FACTS IN RESPECT OF THE PROPERTY AT .GUTTALA BEGUMPET WHICH WAS SOLD FOR A CONSIDERATION OF RS. 35 LAKHS. THE ASSESSEE HAS ENTERED INTO FOR THE AGREEMENT FOR THE SALE OF THE PROPE RTY ON 12.06.2006 AT THAT TIME THE MARKET RATE OF PROPERTY WAS RS. 4000/ - PER SQ YARD AND THAT TIME THE PROPERTY HAD BEEN IN LITIGATION AND THERE WAS A PROBLEM OF CLEAR TITLE OF THE PROPERTY AND AS IT HAD BEEN IN LITIGATION AND DUE TO THAT WE HAVE ENTERED INTO FOR THE AMOUNT OF RS. 35.00 LAKHS ONLY. WE WOULD LIKE TO SUBMIT THAT, THE VALUE AS PER THE SALE DEED OF THE PROPERTY WHICH HAD BEEN TAKEN PLACE IN THE MONTH OF OCTOBER, 2006 AND AT THAT TIME THE MARKET RATE OF THE PROPERTY ITA NO. 95 8 - 959 / HYD/201 2 SHRI HARI BHAGWAN KANYALAL, HYDERABAD 3 HAD BEEN RS. 6000/ - PER SQ YARD AND AS THE MARKET VALUE OF THE PROPERTY HAD BEEN INCREASED TO RS. 67.00 LAKHS FOR THAT PROPERTY. THE COPY OF MARKET VALUATION OF THE PROPERTY AS ON 30 - 06 - 2006 AND 13 - 10 - 2006 IS ENCLOSED HEREWITH FOR YOUR KIND INFORMATION AND RECORDS. WE HAVE RECEIVED THE AMOUNT OF RS. 35 ONLY AND NOT RS. 67.00 LAKHS. AS PER THE AGREEMENT HAS BEEN ENTERED INTO AS PER THE MARKET PRICE AVAILABLE ON THAT DATE BEING RS. 40001 - PER SQ., YARD AND HENCE PRICE OF RS. 35.00 LAKHS ONLY ARRIVED AT AND THE PROPERTY HAD ALS O BEEN UNDER LITIGATION AND HENCE IN VIEW OF THE ABOVE, THE PROVISIONS OF SECTION 50 C CANNOT BE MADE APPLICABLE TO THE CASE OF THE ASSESSEE. 'THIS IS FOR YOUR KIND INFORMATION AND REGARDS.' AFTER GOING THROUGH THE ABOVE REPLY OF THE ASSESSEE, THE ASSESS ING OFFICER ADOPTED THE SALE CONSIDERATION OF R S .35 LAKHS AND BROUGHT THE DIFFERENCE TO TAX AS CAPITAL GAINS. 3. A G AIN S T THIS, ASSESSEE CARRIED THE MATER IN APPEAL BEFORE THE CIT(A). 4. DURING THE COURSE OF PENDENCY OF ASSESSEES APPEAL BEFORE THE CIT(A), THE COMMISSIONER OF INCOME - TAX ASSUMING JURISDICTION UNDER S.263 OF THE ACT, SET ASIDE THE ASSESSMENT MADE BY TH ASSESSING OFFICER AND ULTIMATELY, VIDE HIS ORDER DATED 12.1.2012, PASSE D UNDER S.263 OF THE ACT, RESTORED THE MATTER TO THE ASSESSING OFFICER WITH A DIRECTION TO REFER THE MATTER TO THE VALUATION CELL IN CASE ASSESSEE OBJECTS TO ADOPTION OF THE VALUE AS PER SUB - REGISTRAR, IN TERMS OF S.50C OF THE INCOME - TAX ACT. 5. AGGRIE VED BY THE ORDER OF THE COMMISSIONER OF INCOME - TAX PASSED UNDER S.263 OF THE ACT, ASSESSEE PREFERRED APPEAL, ITA NO.959/H7YD/ 2012 BEFORE US. 6 . THE CIT(A) THEREAFTER, WHILE DECIDING THE APPEAL OF THE ASSESSEE AGAINST THE ASSESSMENT, VIDE HIS ORDER 13.2 .2012 OBSERV ING THAT AS THE ASSESSMENT ORDER PASSED UNDER S.143(3) DATED 24.12.2009, WAS SUBJECT MATTER O F REVISION BY THE COMMISSIONER OF INCOME - TAX UNDER ITA NO. 95 8 - 959 / HYD/201 2 SHRI HARI BHAGWAN KANYALAL, HYDERABAD 4 S.263 OF THE ACT, THE SUBJECT MATTER OF APPEAL BEFORE HIM, VIZ. ASSESSMENT MADE BY THE ASSESSING OFFICER, NO LONGER SURVIVED AND AS SUCH DECLINING TO GO INTO THE MERITS OF THE GROUNDS OF APPEAL BEFORE HIM, DISMISSED THE APPEAL O F T H E ASSESSEE . 7 . AGAINST THIS, THE ASSESSEE FILED APPEAL ITA NO.958/ H YD/2012 BEFORE US. 8. THE LEARNED AUTHORISED REPRESENTATIVE , IN THE CONTEXT OF APPEAL ITA NO.958/HYD/2012 ARISING OUT OF THE ASSESSMENT MADE, RELYING O N THE ORDER OF THE TRIBUNAL DATED 29 TH JANUARY, 2010 IN THE CASES OF KHAJA KUTUBUDEDIN KHAN, HYDERABAD, BEING CROSS APPEALS FOR ASSESSMENT YEARS 2004 - 05 AND 2005 - 06(ITA NOS.1451 AND 1452/HYD/2008 OF THE REVENUE AND ITA NOS.1574 AND 1575/HYD.2008 OF THE ASSESSEE RESPECTIVELY ) AND SUBMITTED THAT NO ADDITION CAN BE MADE BASED ON THE RATES AS PER SRO FOR STAMP DUTY PURPOSES IS NOT JUSTIFIED. IN THE C ONTEXT OF APPEAL AGAINST THE ORDER OF THE COMMISSIONER OF INCOME - TAX PASSED UNDER S.263 OF THE ACT, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE JURISDICTION ASSUMED BY THE COMMISSIONER OF INCOME - TAX UNDER S.263 OF THE ACT IS NEITHER LEGAL NOR V ALID, AND AS SUCH THE ORDER PASSED UNDER S.263 OF THE ACT IS LIABLE TO BE CANCELLED. 9. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ORDER OF THE ASSESSING OFFICER, HAVING BEEN REVISED BY THE COMMISSIONER OF INCOME - TAX VIDE HIS ORDER UNDER S.263, THERE IS NO SURVIVING ORDER OF THE ASSESSING OFFICER PENDING ADJUDICATION. IN THE CONTEXT OF THE APPEAL OF THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME - TAX UNDER S.263, HE OPPOSED THE GROUNDS OF THE ASSESSEE AN D SUPPORTED THE REVISIONARY ORDER OF THE COMMISSIONER. 10. W E HAVE CON S I D ERED THE RIVAL SUBMISSIONS. AS FOR THE ASSESSABILITY OF ANY DIFFERENCE BETWEEN THE VALUE AS PER SALE DEED AND THE ITA NO. 95 8 - 959 / HYD/201 2 SHRI HARI BHAGWAN KANYALAL, HYDERABAD 5 VALUE ADOPTED BY THE SRO FOR STAMP DUTY PURPOSES, WE FIND THAT THE ISSUE IS COV E RED BY THE DECISION OF THE T RIBUNAL IN THE CASE OF KHAJA KUDUBUDDIN KHAN (SUPRA), WHEREIN, THE TRIBUNAL IN SIMILAR CIRCUMSTANCES, HELD VIDE PARA 19 OF THE SAID ORDER, AS FOLLOWS - 19. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF THE PART IES AND' PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS SETTLED LAW THAT WHEN THE ASSESSING OFFICER NOT ADOPTING THE SALE CONSIDERATION MENTIONED IN THE SALES DEEDS IN RESPECT OF TRANSFER OF CAPITAL ASSETS AND THE VALUE ADOPTED OR ASSESSED BY THE STAMP V ALUATION AUTHORITY IS MORE THAN THE SALE CONSIDERATION MENTIONED I N THE SALE DEEDS, THEN THE ASSESSING OFFICER IS DUTY BOUND TO REFER THE MATTER TO THE VALUATION OFFICER IN CASE THE ASSESSEE CLAIMS BEFORE THE ASSESSING OFFICER THAT THE VALUE SO ADOPTED BY THE STAMP VALUATION AUTHORITY EXCEEDS THE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF TRANSFER. IT IS CLEAR FROM THE RECORD THAT THE ASSESSEE PRIMA - FACIE OBJECTED TO THE PROPOSALS MADE IN THE SHOW CAUSE NOTICE TO ADOPT THE RATES FIXED BY THE SRO AS DEEMED SALE CONSIDERATION IN RESPECT OF THE PROPERTIES SOLD DURING THE YEARS UNDER CONSIDERATION. HAVING INVOKED THE PROVISIONS OF SECTION 50 OF THE ACT , THE ASSESSING OFFICER SHOULD HAVE FOLLOWED THE PROVISIONS COMPLETELY. THE ASSESSING OFFICER FOLLOWED ONLY SUB - SECTION (1)OF THE SECTION 50C OF THE ACT AND NOT FOLLOWED THE SUBSEQUENT SUB - SECTION (2) OF THE ACT . AS SUCH, THE ACTION OF THE ASSESSING OFFICER IS FOUND TO BE NO T IN ACCOR D ANC E W I T H T H E PROVI S ION S O F THE ACT. IN OUR CONSIDERED VIEW, THE ASSES SING OFFICER SHOULD NO T HA VE INVOKED THE P R OVIS I ON S OF SECTION 50C OF THE ACT WITHOUT REFERRING THE MAT T ER TO THE V A LU A TION CELL. IT I S ALSO CLEAR FROM THE ASSESSMENT ORDER THAT THE ASSESSING OFFICER DID NO T CONSIDER A N Y OF TH E SUBMI S SION S MADE BY THE AS SESSEE BEFORE ADOPTING THE SRO RATES AS D E EMED SALE CON S ID E RATION. HENCE, THE ACTION OF THE ASSESSING OFFICER CANNOT B E SUSTAINED. EVEN ON MERITS, WE AGREE WITH THE OB S ERVATION S MADE BY THE CIT(A) WITH REGARD TO THE JUSTIFICATION FOR THE SALE CON S I D ERA T ION BEIN G LESS THAN THE RATES FIXED BY THE SRO. CON S I D ERING THE TOTALITY OF FACTS AND CIRCUMSTANCES O F THE CASE, WE HOL D THAT THE SRO RATES ADOPTED BY THE ASSESSING OFFICER AS DEEMED SALE CON S I DE RATION ARE NO T APPROPRIATE AND THE SAME CANNOT BE SUSTAINED. HE NCE, WE DO NO T SEE ANY INFIRMITY IN THE O RD ERS OF THE CIT(A) ON THIS ISSUE. ACCOR D INGLY, WE C ONFIRM THE SAME. .. 11. SIMILARLY, THE COORDINATE BENCH OF THE TRIBUNAL CONSIDERED THIS VERY ISSUE IN THE CASE OF SHRI S.VENKAT REDDY HYDERABAD AND ANR. IN ITA NO.974 AND 975/HYD/2010 FOR THE ASSESSMENT YEAR 2006 - 07, WHEREIN, VIDE ORDER DATED 9.11.20121, IT HAS BEEN HELD AS FOLLOWS - 16. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. ADMITTEDLY, THERE WAS A SALE OF PROPERTY AND THE SALE DEED WAS DATED 25.11.2005. THE ONLY ISSUE FOR CONSIDERATION IS WHAT IS ITA NO. 95 8 - 959 / HYD/201 2 SHRI HARI BHAGWAN KANYALAL, HYDERABAD 6 THE SALE CONSIDERATION FOR SALE OF PROPERTY FOR COMPUTATION OF CAPITAL GAIN. THE LEARNED AR PLEADED BEFORE US THAT AS ON THE DATE OF SALE AGREEMENT DATED 13.6.2005, THE GUIDELINES VALUE AS PER SRO RATE AS NOTIFIED BY THE STATE GOVERNMENT IS AT RS. 4,800 PER SQ. YD. HOWEVER, LATER THE SRO RATE WAS MODIFIED AT RS. 8, 000 PER SQ. YD., THEREBY RESULTED IN ENHANCED VALUE FOR THE PURPOSE OF REGISTRATION WITH THE SRO. UNDER THE COMMON LAW, THE DATE OF EXECUTION OF SALE DEED SHALL BE TAKEN AS DATE OF SALE OF THE PROPERTY. HOWEVER UNDER THE INCOME TAX ACT THE LEGISLATURE MADE A DEPARTURE FROM THE COMMON LAW. UNDER THE INCOME - TAX ACT, 1961 THE PROVISIONS OF SECTION 2 (47) (V) PRESCRIBED THAT ANY TRANSFER INVOLVING ALLOWING OF POSSESSION OF ANY IMMOVABLE PROPERTY HAS TO BE TAKEN OR RETAINED IN PART PERFORMANCE OF A CONTRACT OF N ATURE AS PROVIDED IN SECTION 53A OF THE TRANSFER OF PROPERTY ACT WOULD ALSO TO BE CONSIDERED A TRANSFER UNDER THE INCOME - TAX ACT. THEREFORE, WE HAVE TO SEE WHETHER THE ASSESSEE HAS HANDED OVER THE PHYSICAL POSSESSION OF PROPERTY ON 13.6.2005 WHEN THE AGREE MENT OF SALE WAS EXECUTED. THE ASSESSEE HAS FILED A COPY OF SALE AGREEMENT BEFORE US. THE IMPORTANT CLAUSE NO. 7 READS AS UNDER. '7. THAT THE VACANT, PHYSICAL PEACEFUL POSSESSION OF THE SCHEDULE PROPERTY IS HEREBY DELIVERED BY THE INTENDING SELLER TO THE I NTENDING PURCHASER ON THIS DAY AND THE INTENDING PURCHASER IS AT LIBERTY TO ENJOY THE SAME.' 17. WE HAVE CAREFULLY GONE THROUGH THE ABOVE CLAUSE OF THE SALE AGREEMENT DATED 13.6.2005 AND SALE DEED DATED 23.11.2005. FURTHER THE ASSESSEE ALSO FILED A COPY OF REGISTERED RECTIFICATION DEED OF SALE DEED DATED 14.10.2009 WHEREIN UNDER THE CLAUSES IN THE RELATION TO THE DATE OF HANDING OVER THE POSSESSION OF THE PROPERTY IN THE SALE DEED EXECUTED ON 25.11.2005 WAS RECTIFIED WHICH CONFIRMS THE FACT THAT THE POSSESS ION WAS GIVEN TO THE PURCHASER ON 13.6.2005. TO SUPPORT THE CLAIM OF THE ASSESSEE AN AFFIDAVIT FROM THE ADVOCATE NAMELY D. JITENDRA KUMAR WAS ALSO FILED. ACCORDING TO THE DR CLAUSE NO. 3 OF THE SALE DEED SHOWS THAT THE POSSESSION OF THE PROPERTY HAS BEEN G IVEN TO THE PURCHASER ON THE DATE OF SALE DEED. BEING SO, THERE CANNOT BE HANDING OVER OF THE SAME PROPERTY AT TWO TIMES. SHE SUBMITTED THAT THERE CANNOT BE TRANSFER EVEN UNDER SECTION 2 (47) (V) OF THE ACT. WE HAVE CAREFULLY GONE THROUGH SUBMISSION OF THE LEARNED DR. THE LAW IS THAT PROVISIONS OF THE SECTION 50C ARE APPLICABLE ON REGISTRATION OF SALE DEED. AS PER PROVISIONS OF SECTION 50C VALUATION ADOPTED FOR STAMP VALUATION PURPOSES IS TO BE CONSIDERED AS THE CONSIDERATION RECEIVED OR ACCRUED TO THE ASSE SSEE. THUS ONLY ON REGISTRATION OF SALE DEED THE PROVISIONS OF SECTION 50C ARE APPLICABLE. HOWEVER WHEN THE ASSESSEE IS NOT ACCEPTING THE VALUE MENTIONED IN THE SALE DEED FOR STAMP VALUATION PURPOSES ON THE TREATING THE SAME AS CONSIDERATION RECEIVED ON TR ANSFER OF THE PROPERTY THE ASSESSEE COULD EXERCISE THE PROVISIONS OF 50C (2) OF THE IT ACT TO REFER THE MATTER TO THE DVO. IN THE PRESENT CASE, THE ASSESSEE HAS NOT EXERCISED THIS OPTION AND ONLY CHALLENGED THE ADOPTION OF THE VALUE CONSIDERED FOR STAMP VA LUATION PURPOSES TO DETERMINE THE CONSIDERATION ON TRANSFER OF THE PROPERTY AS THE TRANSFER WAS COMPLETED VIDE SALE AGREEMENT DATED 13.6.2005 AND FOR THIS PURPOSE HE RELIED ON THE ORDER OF THE TRIBUNAL IN THE CASE OF SMT. S. SUVARNA REKHA DATED 29.10.2010 IN ITA NO. 743/HYD/09 FOR THE ITA NO. 95 8 - 959 / HYD/201 2 SHRI HARI BHAGWAN KANYALAL, HYDERABAD 7 A.Y. 2006 - 07. IN THE CASE OF SMT. S. SUVARNA REKHA WHEREIN THE TRIBUNAL GIVEN A FINDING THAT SINCE THE PHYSICAL POSSESSION OF THE PROPERTY ON TRANSFER WAS GIVEN VIDE AGREEMENT OF SALE AS THE VALUE MENTIONED THEREIN HAS TO BE C ONSIDERED INSTEAD OF THE VALUE ADOPTED BY THE STATE AUTHORITIES FOR STAMP DUTY PURPOSES. IN THAT CASE THE TRIBUNAL RESTED ITS CONCLUSION ON THE DECISION OF PUNE BENCH IN THE CASE OF RAHUL CONSTRUCTIONS VS. DCIT (38 DTR 19) WHEREIN THE TRIBUNAL DIRECTED THE ASSESSING OFFICER TO TAKE THE CONSIDERATION AT RS. 70 LAKHS AGAINST THE ESTIMATED VALUE BY VALUATION OFFICER AT RS. 75,76,712 AS THE VALUE OF THE PROPERTY SO ESTIMATED THAT A DIFFERENCE OF 10 % WHICH IS BECAUSE OF THE OPINION OF THE INDIVIDUAL VALUATION OFFICER. NO ONE IS EXPECTED TO VALUE THE PROPERTY ACCURATELY SINCE SOME OF THE ITEMS ARE TO BE VALUED ON GUESS WORK OR NOTIONALLY. BEING SO THE DIFFERENCE OF LESS THAN 10% IS TO BE IGNORED. 18. FURTHER IT WAS DECIDED IN THE FOLLOWING CASES THAT AS PER S ECTION 2(47)(V), WHEN THE VENDOR GIVEN THE POSSESSION OF THE PROPERTY TO THE PURCHASER, IT IS TO BE CONSIDERED THAT THE TRANSFER IS COMPLETE ON THE DATE OF AGREEMENT OF SALE: (A) CIT VS. VEEPEES ENTERPRISES (325 ITR 414) (KERALA) WHEREIN HELD THAT PURSUANT TO THE AGREEMENT FOR SALE POSSESSION ITSELF WAS GIVEN BY VENDOR TO PURCHASER AND IN THE CIRCUMSTANCES VENDOR IS NOT ENTITLED TO CONTEND THAT SECTION 2(47)(V) OF THE INCOME - TAX ACT WAS NOT APPLICABLE. (B) CHATURBHUJ DWARKADAS KAPADIA VS. CIT (260 ITR 491) (BOM) WHEREIN HELD THAT IN CASE OF DEVELOPMENT AGREEMENT, IF THE CONTRACT, READ AS A WHOLE INDICATES PASSING OF OR TRANSFERRING OF COMPLETE CONTROL OVER THE PROPERTY IN FAVOUR OF THE DEVELOPER, THEN DATE OF THE CONTRACT WOULD BE RELE VANT TO DECIDE THE YEAR OF CHARGEABILITY OF CAPITAL GAIN AND SUBSTANTIAL PERFORMANCE OF THE CONTRACT WOULD BE IRRELEVANT. (C) M. SIVAPARVATHI AND OTHERS VS. ITO (7 ITR (TRIB) 468 (VIZAG) WHEREIN HELD THAT THE DELAY IN REGISTERING THE SALE DEED HAD OCCURRED BECAUSE OF GENUINE REASONS WHICH WERE BEYOND THE CONTROL OF THE ASSESSEES. THE AVERAGE COST ACCORDING TO THE SALE AGREEMENT WAS MORE THAN THE MARKET VALUE FIXED BY THE JOINT SUB - REGISTRAR AT THE TIME THE SALE AGREEMENT WAS ENTERED INTO. THERE WAS NO UNDER STATEMENT OR SUPPRESSION OF ACTUAL CONSIDERATION AND THE DEPARTMENT FAILED TO BRING OUT ANY OTHER MATERIAL TO SHOW THAT THERE WAS SUPPRESSION OF ACTUAL CONSIDERATION. THE PROVISIONS OF SECTION 50C OF THE ACT COULD NOT BE APPLIED TO THE SALE AGREEMENT SINCE THE SECTION WAS INTRODUCED IN THE STATUTE BOOK ONLY AFTER SALE AGREEMENT HAD BEEN ENTERED INTO. SINCE THE FINAL REGISTRATION OF THE SALE WAS ONLY IN FULFILMENT OF THE CONTRACTUAL OBLIGATION, THE LOGICAL CONCLUSION WAS THAT THE PROVISIONS WHICH DID NOT APP LY AT THE TIME OF ENTERING INTO THE TRANSACTION INITIALLY WOULD NOT BE APPLICABLE AT THE TIME OF COMPLETION OF THE TRANSACTION. 19. CONSIDERING ALL THESE FACTS, IF THE TRANSFER IS COMPLETED IN TERMS OF SECTION 2(47)(V) BY GIVING THE POSSESSION OF THE PROPE RTY IN TERMS OF THE SALE AGREEMENT DATED 13.6.2005 AND SRO RATE AS ON THE DATE OF THIS DATE WAS CONSIDERED IN THE SALE AGREEMENT AND IF ITA NO. 95 8 - 959 / HYD/201 2 SHRI HARI BHAGWAN KANYALAL, HYDERABAD 8 THE REGISTRATION WAS DELAYED ON BONA FIDE REASONS WHICH IS BEYOND THE CONTROL OF THE ASSESSEE AND THE SALE DEED EXECUTED ON 25.11.2005 IS ONLY A LEGAL FORMALITY, THEN, THE ASSESSING OFFICER IS REQUIRED TO ADOPT THE SRO RATE AS ON THE DATE OF TRANSFER VIDE SALE AGREEMENT FOR THE PURPOSE OF DETERMINING CAPITAL GAIN CONSEQUENT TO THE TRANSFER OF CAPITAL ASSET. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO CAUSE NECESSARY ENQUIRY WITH REGARD TO SRO RATE AS ON 13.6.2005 AND ALSO THE FACT OF GIVING THE POSSESSION OF THE PROPERTY TO THE PURCHASER ON 13.6.2005 ITSELF, AND TO DECIDE THE ISSUE IN THE LIGHT OF THE TRIBUNAL ORDER IN T HE CASE OF M. SIVAPARVATHI & RS. (SUPRA) AND THE JUDGEMENT OF KERALA HIGH COURT IN THE CASE OF VEEPEE ENTERPRISES (SUPRA) AND THE BOMBAY HIGH COURT JUDGEMENT IN THE CASE OF CHATURBHUJ DWARKADAS KAPADIA (SUPRA). THE ASSESSING OFFICER IS ALSO DIRECTED TO CON SIDER ALL THE DOCUMENTS PRODUCED BY THE ASSESSEE BEFORE THE CIT(A) WHILE DECIDING THE ISSUE AS THE GRIEVANCE OF THE ASSESSING OFFICER IS THAT ASSESSEE HAS SUBMITTED ADDITIONAL EVIDENCE WHICH WAS NOT FILED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER. 20. I N THE RESULT, BOTH THE APPEALS OF THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES. 12. IN THE FACTS OF THE PRESENT CASE, SALE TRANSACTION W AS FINALIZED BEFORE 13.9.2006. T HE FIRST PAYMENT OF R S .10 LAKH S WAS MADE BY THE ASSESSEE BY CHEQUE BEARING N O.73 41901 AND ANOTHER AMOUNT O F RS .25 LAKH S BY CHEQUE NO.719004 DATED 1 3.9.2006 DRAWN ON IOB, WHICH WAS CREDITED IN THE VYSYA BANK , S.P. ROAD , S E CUN D ERABAD . A T THE TIME OF FINALIZATION OF TRANSACTION AS ON 30.6.2006, AS PER SRO CERTIFICATE DATED 14.12.2009, TH E PREVAILING RATE WAS RS.4,000 PER SQ. YARD . HO WE VER, THE SAME WAS REVISED AND ENHAN C ED TO R S .6,000 AS ON 13.10.2006, A S CERTIFIED BY THE S RO, VIDE HIS LETTER DATED 16.12.2009. THE ASSESSEE HAS PAID CONSIDERATION BEFORE 13.9.2006 AND THE SALE DEED WAS REGISTERED ON 13 TH OF OCTOB E R, 2006. A CCORDING TO THE LEARNED AUTHORISED REPRESENTATIVE, THE CONSIDERATION WAS VERY MUCH P A SSED TO THE SELLER BY 13.10.2006 AND THE ASSESSEE ONLY COMPLETED THE LEGAL FORMALITIES AND GOT THE PROPERTY RE G I S T E RED ON 13.10.200 6 VIDE DOCUMENT NO.22205 ON 2006/1928/S E OF BOOK NO.1 OF DEPUTY REGIS T RAR R A NGA R E DDY. BEING SO, THE ASSESSING OFFICER CON S I D ERED ONE OF THE POSSIBLE VIEWS, WHICH ALSO FIN D S SUP P O R T FROM THE DECISIONS OF THE TRIBUNAL NO T ED ABOVE, WE CANNOT FIND FAULT WITH THE DECISION OF THE ASSESSING OFFICER IN ADOPTING THE VALUE OF THE PROPERTY AS AT THE TIM E OF FI N ALISIN G THE TRANSACTION, AS THE ENTIRE ITA NO. 95 8 - 959 / HYD/201 2 SHRI HARI BHAGWAN KANYALAL, HYDERABAD 9 CONSIDERATION HAS BEEN PAID. ACCORDINGLY, WE APPROVE THE VIEW TAKEN BY THE ASSESSING OFFICER ON THIS ISSUE. IN THIS VIEW OF THE MATTER, WE FIND THAT THERE IS NOTHING ERRONEOUS, MUCH LESS PREJUDICIAL TO THE INTERESTS OF THE REVENUE IN THE ORDER OF THE ASSESSING OFFICER, AND THE COMMISSIONER OF INCOME - TAX WAS NOT JUSTIFIED IN INVOKING THE REVISIONARY JURISDICTION UNDER S. 263 OF THE ACT. WE ACCORDINGLY CANCEL THE ORDER UNDER S.263 OF THE ACT DATED 12.1.2012, IMPUGNED IN ITA NO.959/HYD/2012. CONSEQUENTLY, THE GROUNDS OF THE ASSESSEE IN ITS APPEAL ITA NO.95 9 /HYD/2012 ARE ALLOWED. 1 3 . IN VIEW OF OUR ABOVE DECISION, THE AP PEAL OF THE ASSESSEE AGAINST THE ORDER PASSED BY THE CIT(A) ON THE APPEAL ARISING OUT OF THE ASSESSMENT MADE BY THE ASSESSING OFFICER, BEING ITA NO.95 8 /HYD/2012, HAS BECOME INFRUCUTOUS. THE SAME IS ACCORDINGLY DISMISSED. 12. IN THE RESULT, ASSESSEES A PPEAL ARISING OUT OF THE ASSESSMENT, BEING ITA NO.958/HYD/2012 , BEING INFRUCTUOUS, IS DISMISSED, AND THE APPEAL AGAINST THE ORDER UNDER S.263 OF THE ACT, BEING ITA NO.959/HYD/2012 IS ALLOWED . ORDER PRONOUNCED IN THE COURT AT THE CONCLUSION OF HEARING ON 25.11.2013 SD/ - SD/ - ( ASHA VIJAYARAGHAVAN ) (CHANDRA POOJARI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED/ - 25 TH NOVEMBER, 2013 COPY FORWARDED TO: 1 SHRI HARI BHAGWAN KANYALAL, C/O. M/S.P.MURALI & CO.,CHARTERED ACCOUNTANTS, 6 - 3 - 655/2/3, 1ST FLOOR, SOMAJIGUDA, HYDERABAD - 82 2 ADDL. COMMISSIONER OF INCOME - TAX RANGE 13, HYDERABAD 3 COMMISSIONER OF INCOME - TAX(A) I I , HYDERABAD ITA NO. 95 8 - 959 / HYD/201 2 SHRI HARI BHAGWAN KANYALAL, HYDERABAD 10 4 COMMISSIONER OF INCOME - TAX, HYDERABAD 5 DEPARTMENTAL REPRESENTATIVE ITAT, HYDERABAD B.V.S
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