The Commissioner of Income Tax [Central] V. Sri Sitendranarayan Mahendra Narayan Rai

ITTA/39/2014

AI Insights

The case involves an appeal by the Commissioner of Income Tax (Central), Hyderabad against the judgment and order of the learned Tribunal concerning the assessment year 2007-08. The core issue was the determination of the date of possession transfer by the developer, which is crucial for computing capital gains under the Income Tax Act. The Assessing Officer initially relied on a registered agreement of sale and a subsequent General Power of Attorney, but later considered an unregistered agreement of sale executed after the registered one. The Tribunal found the original assessment correct, leading to the appeal. The court dismissed the appeal, agreeing with the Tribunal's findings and rejecting the claims of perversity in the Tribunal's decision.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 679562 (HC-HYDERABAD)
• Appeal Type: Others
• Pronouncement Date: 13-02-2014
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Keywords: Assessment Reopened; Capital Gain; Development agreement; Income Tax; Possession Transfer
• Section: 147

Judgement Text

"HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND HON’BLE SRI JUSTICE SANJAY KUMAR I.T.T.A.No.39 of 2014 Date: 13.02.2014 Between: The Commissioner of Income Tax (Cental) Hyderabad .....Appellant AND Sri Sitendranarayan Mahendra Narayan Rai, Hyderabad. ...Respondent HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND HON’BLE SRI JUSTICE SANJAY KUMAR I.T.T.A.No.39 of 2014 JUDGMENT: (per Hon’ble the Chief Justice Sri Kalyan Jyoti Sengupta ) This appeal is sought to be preferred and admitted against the judgment and order of the learned Tribunal dated 13th September 2013 in relation to the assessment year 2007-08 on the following suggested questions of law: (1) Whether on the facts and circumstances of the case and in law, the decision of the Tribunal is correct in holding that there is no tangible material before the Assessing Officer to initiate proceedings under Section 147 of the Income Tax Act without appreciating that the letter of the assessee informing that the possession is handed over on 02.05.2006 is on record before reopening the case under Section 147 of the Income Tax Act? (2) Whether on the facts and circumstances of the case and in law, the decision of the Tribunal holding that possession of the land deemed to have been delivered to the developer on the date of execution of the Development Agreement (ignoring the letter dated 15.12.2008 submitted by the assessee to the Additional Commissioner of Income Tax, Range-6, Hyderabad) is not perverse? (3) Whether on the facts and circumstances of the case and in law, the decision of ITAT is not perverse to the extent of taking into cognizance the registered sale deed dated 20.12.2005, while the assessee himself has claimed the said document to be void ab initio in his letter to the Assessing Officer dated 30.10.2009? We have heard the learned Counsel for the appellant and gone through the judgment and order of the learned Tribunal. It appears, in this matter, the assessment was reopened under Section 147 of the Income Tax Act, 1961 and while doing so the Assessing Officer has reversed the earlier order of the assessment and again an appeal was preferred to the Commissioner of Income Tax (Appeals). The issue in this matter is what is the date of taking possession by the developer in order to hold there has been transfer within the meaning of the Income Tax Act to compute the capital gain. At the first instance, the Assessing Officer relied on the registered agreement of sale coupled with the General Power of Attorney, which was executed subsequent to the unregistered agreement of sale. Later, the Assessing Officer thought that the unregistered agreement of sale, which was executed after the registered one, should have been considered. According to us, what evidence and what material should be accepted by the Assessing Officer is his individual appreciation of evidence. It cannot be re-appreciated subsequently by another Assessing Officer in exercise of power under Section 147 of the Income Tax Act, 1961. Moreover, the learned Tribunal examined the fact and documents in detail and found that the decision taken earlier by the Assessing Officer was correct. This appreciation of fact cannot be substituted by us as it is not a case of perversity as has been incorrectly contended by the learned Counsel for the appellant before us. Perversity is a case where there is no evidence or there is irrelevant materials. In this case, it is neither of the cases. Under these circumstances, we do not find any reason to interfere with the Judgment and order of the learned Tribunal, naturally we do not admit the same. Accordingly, the appeal is dismissed. No order as to costs. ___________________ K.J. SENGUPTA, CJ __________________ SANJAY KUMAR, J 13.02.2014 Gsn "