Syed Sikander Ali V. The Principal Commissioner of Income Tax-1

ITTA/251/2022

AI Insights

The case involves Syed Sikander Ali, the appellant, who contested the addition of long-term capital gains assessed by the Income Tax Officer for the assessment year 2010-11. The gains were attributed to a property transaction documented by a registered sale deed. The appellant argued that the transaction was a conditional sale to avail a loan and not a transfer resulting in capital gains. The Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal both upheld the assessment. The High Court, after reviewing the Tribunal's decision, found no substantial question of law arising from the case and dismissed the appeal.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 692444 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 20-09-2022
• Assessment Year: misc
• Other Referred Cases: CIT vs. Balbir Singh Maini, CIT K.Y.Pilli vs. Anil Rai
• Laws Referred To: Income Tax Act, 1961, Limitation Act
• Result in Favour of: Revenue
• Court: HIGH COURT
• Assessee Lawyers: DUNDU MANMOHAN
• Keywords: Assessment; Capital Gains; Condonation of delay; Transfer of property
• Section: 147; 143(3); 271(1)(c); 260A; 5; 2(47)

Judgement Text

"{ 32e51 IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD TUESDAY, THE TWENTIETH DAY OF SEPTEMBER TWO THOUSAND AND TWENTY TWO PRESENT THE HONOURABLE THE CHIEF JUSTTCE UJJALAHUYAN AND THE HONOURABLE SRI JUSTICE C.V. BHASKARREDDY I.A.NO.1 0F 2022 in /& !.T.T.A NO.251 oF 2022 Appeal unCer section 260A of the lncorne Tax Act, 1961 against the order of the lncome Tax Appellate Tribunal, Hyderabad Bench-A, Hyderabad dated 02-09- 2O21 in l.T.A No.781iHydl2015 for the Assessment )rear m1O-11 preferred against the order of the Commissioner of tnmrne Tax lRppeals) 4, 3d Floor, Annexe, Aayakar Bhavan, Basheerbagh, Hyderabad dated 27-02-n1S in Appeal No.O514l2O14-15llTO., Wd.6(3yCtT (A)4lHydl2O14-1S preferred against the order of the income Tax Officer, Ward S(3), Hyderabad dated 2241-2014 in pAN/GIR No.ACVPA441Q Between: AND Syed Sikander Ali, H. No.8-2-413i1lA, Plot No.476, Road No. 4, Banjara Hifls, Hyderabad-5Oo004, PAN- ACVPA4441 Q. ...APPELLANT The PrincipalComrnissioner of lncome Tax-1, l.T. Towers, A.C. Guards, Hyderabad-500004 ...RESPONDENT lA NO: 1 OF 2022 Petition under Section 5 of Limitation Act read with Sec.260A(2[a) of the lncome Tax Ac, 1961 praying that in the ckcumsiances stated in the affidavit filed in support of the petition, the High Court may be pleased to condone the delay of 76 days in filing the above appeal, as otherwise the Petitioner/Appellant will be put to irreparable loss and severe hardship. Counsel for the Appellant : SRI DUNDU MANMOHAN Counsel for the ResPondents: - The Court made the following: JUOGMENT I i I I I ln Flearrd Mr. Manmohan Dundu, leamed coursel for the appellant 2. This appeal has been preferred by the assessee under Section 260-A of the Income Tax Act, 1961 (briefly'the Act' hereinafter) against the order dared 02.09.2021 passed by the Income Tax Appellate Tribunal, Hyderabad Bench '-N, Hyderabad (Tribunal) LT.ANo.Z81lH,/d/2015 for the assessment ye ar 20 l0- | l. 3. This appeal has been filed proposing the following questions as substantial questions of law: 1. tff/hether on the facts and in the circumstances of the case the Appellate Tribunal was justified in confirming the addition made by the fusessing Officer, overlooking tlrc peculiar facts and circumstances of the case, more panic ulrrly intenrion of the panies with regard to the conditional sale transaction, and also provisions of the l-aw, THE HON'BLETHE CHIEFJUSTICE UJJAL BHUYAN AND THE HON'BLE SRTJUSTICE C.V.BHASKAR REDDY I.A.No.1 of 2022 inl& I.T.T.A.No.251 of 2022 IIIDGMENT, /P- '( Hon'bl th? ( hicilatrtu t fat Bhryan) which would render the uftirnate conclusions of tbe Tribunal pervene ? 2. Vhetlrer on the facts and in rk circumstances of tlre case and in law, the Appellate Tribunal was jrstifiod in rei.cting tle adjoumrnenr requesr and treating it as karrd in violation of the prirrciples of natural justice, ovedookirg rhe fact that counsel on recorrd w\"x not well and the penon who had appeared on behalf of the coumel was not tle power of attomey holder but only requested to seek adjoununent ? 3. Xtrether on the facts and in the circumstances of tfu case and in law, the Appellate Tribunal was jtstified in passing the orider without considering the plea of the appellant dt.L6.04.2022, wherein it was requested to lreep the matter in abelarrce till the outcome of civil suit (OS.No.89 ot 2021) ? 4. 'Xihether on rhe faca and in tlre circumstances of the case and in laq the Appellate Tdbural was justified in passing the or,Cer after rhe period of 3 monttrs from the &te of hearing misundentanding the lerer and spiric of Rule 3a(5) of Income Tax (Appellate Tribunal) Rules, 1963 and judicial precedens by wrongly taking aid from Apex Court directions dr.27.O4.2Q21 in M.ANo.665l2021 in SM(!0)CNo.3/2020 overlooking the &cision of supreme court in the case of Anil Rai (supn) ? I I I i ij ii ..r.. -i I I i 3 4. To appreciate the above questions, we may briefly refer to the orden passed bythe revenue authorities. 5. Appellant is an association under the Act having the status of individual'. In the assessment (re-assessment) proceedinp for the assessment par 2010-11, assessing officer added Rs.2,81,88,700.00 as long term capital gains uide the assessment order &ted 22.01.2014 passed under Section 1a3(3) of the Act read with Section 147 of the said Act. 6. We have carefully gone through the onder of assessrnent dated 22.01.2014 and find that assessing officer had elaborately considered the agreement of sale, power of amomey and sale deed registered on 20.04.2009. Assessing officer thereafter held as follows, Accordingly, in the present case, the capital gain is computed on the basis of sale deed registered on 2O'h April 2009 and applied the 50C provision since the market value of the propeny was mentioned Rs.1,05,11,300/-. The assessment is concluded acconCingly. it it Penalty proceedings U/s.271(1)(c) is initjated separetely with the reason that tlrere is a clear escapement of income was foturd and the assessee has not filed his return of irrcorne till the issle was uneanhed by the revenue and even in the retum filed in response to nodce served U/s.148, tlre assessee is tryrng to male belief with the unregiste red transacdons entered into. The assessee has not provided details such as cost of acqGition of Jand and cost of corstnrction. F{ence, the value of the land and construction cost of the building put together is adopted @ tu.500/- per Sq. Yd. as 01.04.1981, since, the propeffy acquired is before 01.04.1981. Toal area of the land is 235 Sq.Yds and the cost of acquisition is worked out to Rs.2J22,6@/- aker indexation. 7. Aggrieved bythe aforesaid order of assessrnent, appef,ant preferred appeal before the Commissioner o[ Income Tax (Appeals)-a, Hlderabad (briefly 'CXT(4' hereinafter). By th. appellate order dated 27.02.2015, C[T(A) corsirJered the submissions made by the appellant and noted that *roughr*re appellant had uken 21 grounds in appeal, those relate ,oi only :t4:.: ,' ! ; i i I t i 5 one issue ,:r., assessment of capital gains on account of transfer of properry situated at road No.4, Banjara L{lls' H'lderabad u'b document darcd 29.0+.zwg. 8. First appellate authority noted the basic contention of the appellant vhich was that registration document could not be taken as a conch:sive proof to hold that there was transfer resulting in capital gairs. It was urged on behalf of the appellant that preceding and subsequent events should also be taken into account to arrive at the true character of the transaction' Appellant had contended that transaction was done only to avail the loan by mongaging the propeny' AJter considering the contention of the appellant, OT(A) dismissed the appeal by holding as unden The assessment order, the submissions of the assessee during the assessment proceedings and the appellate proceedings and the documents placed on recond are considered. It is seen that there is no ambiguiry as to ) whether there is transfer within the meaning to Section ) 2(47) on account of execution of the document dated 29/04/2@9. The document clearly rccords that the 6 consideratiofl has been received and the possessior has been handed over to the purchaser. The assessee's reliarce on earlier transaction and application of part of consideration for repayment of money to Sri K. Vijaya Bhaskar Reddy with virom an eadier agreement of sale / GPA was entered into b of no relevarrce to decide the rntune of tlre transaction. The distribution of money between the broker, assessee and *re purchaser of the properry from tlre loan raised agairst the properry is a subsequent act which would not change character of the trarsaction already entered into bythe assessee widl the purchaser of the properry. The fact drat ukimate purchaser Smt. Manju Devi Taparia has admiued on oath that the consideration as reconded in the docwnent was passed on and the transaction duly recorrded in her accounts and sho*n in the retum of incorne filed by her for the AY 2010-11. The above documentation duly confirrned by the ultimate purchaser is of utmost imponance to arrive at th€ true nature of the transaction. As regards of the MOU dated 29/U/2@9, it is seen tlat tlere is no reference of any strch agreement in tlre registration deed entry into on 29/04/2009. Similarly the agreement of free convelance allegedly entered into on 18'h May, 2009, is ' , un-registered and cannot cornpletely relied upon. Funher, the possession of the properry and receiving the rent from the tenant would depend on later undersanding berween parties. This cannot be a cons ide ration to decide whether I t 7 the assessee property was passed on through a document conferring enforceable rights to tlle purchaser. In view of the discussion as above, I hold that there was a transfel within the meaning of Section 2$7) of the Income Tax Act, 1961 giving rise to capital gains as evidenced by the document dated29/04/2009 berween the assessee and Smt. K. Manju Devi Taparia. Accordingly, the action of AO in assessing the capital gains is confirmed and the assessee's appeal on this ground is dismissed. 9. On fr.rther appeal, Tribunal dismissed the appeal on02.09.2022 holding as follows: 'We have given our thoughdul consideration to rival pleadrngs against and in suppon of the impugned addition. We find no reason to express our concurrence with this ta-xpayels stand. This is for the reason that he has already executed the impugned rcgistered sale deed; treated as a valid sa,r.g\"t u/s2(+7)(v) of the Act which is deemed to have superceded the oral as well as un- registered documents berween the vendor and the vendee; as the case may be. And also that whatever are the documents sought to be filed by way of additional evidence, the same only contain pleadings before tlre respective civil and criminal couns : (supra) x,hich are yet to anain firnlity. We are unable to treat the assessee or his family members' pleadings or evidence therein as forming the sole basis so far as assessment of his ti li 8 I irytgned capital gains b corrcemed. Ve wish ro refer to hon'ble apex courr's decision in CIT VS. Balbir Singh Maini Q0l7) [86 taxmanncom 94] rejectrng the depanment's plea seeking to invoke a transfer of registered documeng thereby squarely covering tie issue so far as the facs herein are involved as tlis assessee had not only appeared before the registration awhoriry claiming therein that he had indeed transferred peaceful vacant possession of tle relevant capital asser but received the entire corresponding sale consideration. Any prior or subsequent document therein to, oral as q/ell as unregistered one ought to be talsen as superceded by the foregoing registered transfer docurnent in issue. !?'e there quote honble apex courr's Fr another decision CIT K.y.pilli ah (1%7) t63 ITR 4111 (Sq to express our concurrence with the CIT(A)t detailed discussion under challenge. The assessee's srrong endeavour to rely on rhe foregoing lftigation (supra) as well as evidence deserves to be declined in light of his registered sab deed &.20-04-2W. We accorrdingly uphold the impugned long term capiral gain addition in assessee's hands. All the assessee's applications,/petitiors seeking to admit additional grounds and evidence shall be deemed to have been disposed of in light of our foregoing deailed discussion. Ve lastly acknowledge that although the irstant lis t being decided after a period of 90 dap from the date of I I I : . 9 hearing as per Rule 3a(5) of the IT(AT) Rules 1963, the same however, does not apply in the covid lockdown situation as per hon'ble aPex couftrs recent directions dated 27-O+2OOL in lvLANo.665 /2OZl n SM(VI)C No.3 /2020'In Re Cogriiann for extenion of bnitation' rnaking it clear that in such cases where rhe limitation period (inctuding that prescribed for institution as well as termination) shall stand excluded from 14d of lvlarch, 2021 ill further orrden in above terms. 10. Thus according to the Tribunal appellant had already executed a registered sale deed which is treated as valid transfer under Section 2(47)N) of the Act. The other documents relied upon by the appellant tere only pleadings before cMl and criminal courts, which proceedings were )'et to attain finaliry' AccoriCingly, Tribunal upheld the addition of long term capital gains made by the assessing officer as confirmed by the CIT(A)' After holding so, Tribunal noted that the appeal was decided after a period of 90 dap from the dxe of hearing; the same was because of the covid lock down situation and referred to the orders passed bythe Supreme Coun extending limitation. t l ) / ::10:: 11. On thorough consideration of all aspects of the maner, we are of the view that no substandal question of law arises out of the orrder of the Tribunal datedO2.09.2O21. Findings retumed by the Tribunal are clear findinp of fact qzhich does not call for any interference. 12. App.\"l as well as I.ANo.i of 2022 filed for condonation of delayof 76 days in filing the appeal are accordinglydismissed. No costs. fu a sequel, miscellaneous peritions, pending if any, stand dismissed- i To, Sd/. B.S.CHIRANJEEVI JOINI-REGISTRAR //rRUE coPY/' .ec|Sftorrrcen 1. The lncome Tax Appellate Tribunal, Hyderabad Bench-A' Hyderabad. . 2. The Commissionei 6f lncorne Tax (Appeals) 4, 3' Floor Annexe, Aayakar Bhavan, Basheerbagh, HYderabad. 3. The lncome Tax Officer, Ward6(3), Hyderabad. 4. One CC to SRI DUNDU MANMOHAN, Advocate [OPUC] 5. Two CD Copies BSK t I I I I i i I I i HIGH COURT DATED:2010912022 ORDER l.T.T.A.No.251 of 2022 DISMISSING THE ITTA WITHOUT COSTS ._t r€ 1 ) ? [ uEt ?02? v ? ., CO@($ *g--- ,@V //k o "