Ambesh Shrivastav Vs ITO (ITAT Indore)
The brief facts leading to the case is this that the assessee along with 21 co-sellers sold immovable property lying and situated at Talawali Chanda to M/s. Sarthak Innovations Pvt. Ltd. The sale deed was registered under Section 2(14) of the Act on 21.10.2009 for a stated consideration of Rs.30 Lakhs in which the assessee’s proportionate share comes to only Rs. 1,36,561/-. The case of the Revenue is this that the property is situated within a distance of 8 from the municipal limits of Indore. Therefore, it is a capital asset within the meaning of Section 2(14) of the Act and capital gain is chargeable on sale of such land. The deed was registered on 21.10.2009. Therefore, the capital gain has been found chargeable for the year under consideration. The market value of the property has been assessed by the Sub-Registrar at Rs. 1,31,00,000/- as against the sale consideration of Rs.30,00,000/-. Since, the document was registered on 31.10.2009 as per guideline of the A.Y. 2010- 11, the assessment was finalized upon addition under Section 50C of the Act, which was further confirmed by the first appellate authority.
This ground of appeal has been raised against the assessment of capital gain in accordance with the deeming provisions of section 50C of the Income Tax Act, 1961 considering the total consideration of impugned capital asset at Rs.1.31 Cores as assessed by the sub registrar. The AO has discussed the issue in details at para nos. 6 to 8 of the assessment order besides considering the same while disposing of the objections raised against reopening of the assessment which is also discussed in details at para no. 4 of the assessment order. The appellant, during the course of appeal proceedings has contended that the possession of the plot under consideration was handed over to the purchaser i.e. M/s Sarthak Innovation Pvt. Ltd. on 27/11/2007 which is relevant to A. Y.2008-09. In support of the same the appellant has relied on the draft sale deed which has been signed through the POA holder on behalf of the appellant. It has further been contended that the entire sale consideration of Rs. 1,36 ,561 /- has been received in the F. Y.2007-08 in pursuance of sale deed duly submitted to the sub-registrar office for the purpose of registration. Therefore, the appellant states that all the conditions required under the provision of section 2(47) of the Income Tax Act, 1961 have been fulfilled for making the transaction complete in the F. Y. 2007-08.
Plea of Appellant cannot be accepted that the transaction was complete in A. Y. 2008-09. Similarly, the document under consideration i.e. draft sale deed presented in the office of sub-registrar can neither be treated as complete sale deed nor the agreement to sale on the strength of which it could have been said that consideration was received and possession was handed over to the purchaser of the property. Therefore, various case laws cited by the appellant have also not been found applicable on the peculiar set of facts under consideration. Therefore, considering the above stated facts and the entirety of the circumstances and relevant documents, the AO has been found justified in assessing the capital gains in the A. Y. 2010-11 when the sale deed pertaining to the land belonging to as many as 22 persons was completed by way of proper registration. The same has been worked out by the AO at Rs.5,33,255/- on the basis of deemed sale consideration of Rs.5,96,315/- under section 50C of the Income Tax Act, 1961. The addition is therefore confirmed. Therefore, all the grounds of appeal are here by dismissed.
FULL TEXT OF THE ORDER OF ITAT INDORE
The instant appeal filed by the assessee is directed against the order dated 23.02.2019 passed by the Commissioner of Income Tax (Appeals)-1 Indore (in short ‘CIT(A)’), arising out of the order dated 27.12.2017 passed by the Income Tax Officer-1(4), Indore under section 143(3) r.w.s. 147 of the Income Tax Act, 1961 (hereinafter referred as to ‘the Act’) for Assessment Year 2010-11.
2. The assessment order was finalized by the Ld.AO on 27.12.2017 by making addition of Rs.5,33,255/- on long term capital gain.
3. In appeal, the same is confirmed by the Ld. CIT(A). Hence, the instant appeal before us.
4. The brief facts leading to the case is this that the assessee along with 21 co-sellers sold immovable property lying and situated at Talawali Chanda to M/s. Sarthak Innovations Pvt. Ltd. The sale deed was registered under Section 2(14) of the Act on 21.10.2009 for a stated consideration of Rs.30 Lakhs in which the assessee’s proportionate share comes to only Rs. 1,36,561/-. The case of the Revenue is this that the property is situated within a distance of 8 from the municipal limits of Indore. Therefore, it is a capital asset within the meaning of Section 2(14) of the Act and capital gain is chargeable on sale of such land. The deed was registered on 21.10.2009. Therefore, the capital gain has been found chargeable for the year under consideration. The market value of the property has been assessed by the Sub-Registrar at Rs. 1,31,00,000/- as against the sale consideration of Rs.30,00,000/-. Since, the document was registered on 31.10.2009 as per guideline of the A.Y. 2010- 11, the assessment was finalized upon addition under Section 50C of the Act, which was further confirmed by the first appellate authority.
5. None appeared at the time of hearing on behalf of the assessee. It further appears from the records that though the matter was fixed for hearing on number of occasions, the assessee neither filed written submission nor attended. However, Ld.DR made his argument and supported the order passed by the authorities below.
6. We also further considered the order passed by the Ld. CIT(A). The crux of the finding of the Ld. CIT(A) in regard to moot point enrolled in this particular matter as reproduced herein below:
“ 4. Ground Nos. 1 & 2: Both the grounds of appeal have been raised against the initiation of proceeding under section 147 of the Income Tax Act, 1961. During the course of assessment proceedings as well as appeal proceedings, the appellant has taken the plea that the issue of notice u/ s 148 of the Income Tax Act, 1961 by way of invoking section 147 of the Income Tax Act, 1961 was bad in law. It has mainly been contended that the impugned capital asset was transferred to the purchaser in F. Y. 2007-08 and the sale consideration was duly received in said year through the directly /through POA holder. Further, it was contended that since the possession of the land was also given in the above financial year, the reopening of the case for the A. Y. 2010-11, which is under consideration was bad in law. I have perused the facts of the case carefully. I have also noted the findings of the AO which is mainly based on the registered sale deed dated 21/10/2009. It has been observed that the documents for sale deed was prepared in this case continuously in three different financial years i.e. 2006-0 7, 2007-08 & 2008-09 and finally the sale deed was registered in F. Y. 2009-10 which is relevant to the A. Y. 2010-11. It is also observed that the sellers of the plots have signed the sale deed in three different financial years whereas the purchaser has paid the additional stamp duty in accordance with market value assessed by sub-registrar in the F. Y. 2009-10. Therefore, admittedly till the registration of the document, the same was simply a draft document having no legal sanctity. Moreover, the fact of transaction having been taken place had come to the possession of AO through AIR information leading to further proceedings. Since, no PAN of the sellers was specified in the sale deed, the information if not received from AIR would never have reached to the assessing officer. Therefore, it was valid and important information in possession of the AO relevant to the A. Y. 2010-11 which led the initiation of proceedings u/s 147 of the Income Tax Act, 1961. Therefore, in my considered opinion, the AO had no reason to reopen the case of A. Y. 2008-09 as the information was relevant to A.Y. 2010-11. Further, these objections were raised by the appellant before the AO during the assessment proceedings. The same have been found dealt with by the AO through a speaking order which is duly reproduced at page nos. 3 to 6 of the assessment order. The various case laws cited by the appellant have been gone through and the same have been found distinguishable on facts. Therefore, keeping in view the facts and circumstances of the case, I do not find any infirmity in invoking section 147 of the Income Tax Act, 1961 by the AO. Therefore, both the grounds of appeal are dismissed.
