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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI KUL BHARAT & SHRI MANISH BORAD
आदेश / O R D E R
PER KUL BHARAT, J.M: These two appeals by the revenue against two different
orders of the Ld. CIT(A), Ujjain pertaining to the
assessment year 2008-09. Both the appeals were taken up
together as the issues are common and are being disposed
of by way of a consolidated order.
First we take up ITA No.205/Ind/2017. The revenue
has raised following grounds of appeal:
On the facts and in the circumstances of the case Ld. CIT(A) erred in 1. Whether on the facts and in the circumstances of the case, Ld. CIT has erred in deleting the addition of Rs.25,75,513/- on account of Long Term Capital Gain. 2. Whether on the facts and in the circumstances of the case, Ld. CIT has erred in deleting the addition of Rs.25,75,513/- on account of Long Term Capital Gain ignoring the provisions of Transfer of Property Act, wherein it is mandatory to register any change in right, title or entitlement to be registered before the registering authority i.e. Sub registrar and stipulated stamp duty, as per prevailing circle rate of Jantri rates shall have to be paid. Only after completion of such legal formalities, there can be valid transfer of immovable property. 3. Whether on the facts and in the circumstances of the case, Ld. CIT has erred in deleting the addition of Rs.25,75,513/- on account of Long Term Capital Gain ignoring that transfer claim entities created there under as co- owner also have no legal sanctity. As such, 25% share in whole building
[ITA 204 & 205/Ind/2017] [Shri Kalimuddin Badnawarwala & Smt. Bilkis Bai Badnawarwala, Ratlam] transferred by Mrs. Bilkisbai Badnawarwala in favouir of her son Mr. Kalimuddin Badnawarwala is void. Note: The matter is covered under the exception as mentioned in para 8(c) of circular 21/2015. The appellant reserves his right to add, amend or alter the grounds of appeal on or before the date; the appeal is finally heard for disposal. 4. Briefly stated facts are that case of the assessee
was reopened for assessment and the assessment u/s
143(3) r.w.s. 147 of the Income Tax Act, 1961 (hereinafter
called as ‘the Act’) was framed vide order dated 29.2.2016.
While framing the assessment, the A.O. made addition of
Rs.25,75,513/- and assessed the income at Rs.26,09,433/-
against the declared income of Rs.33,950/-. The A.O.
observed that the assessee had claimed capital loss of
Rs.1,03,206/- on the land sold for Rs.1,50,00,000/-.
Aggrieved by the finding of the A.O., an appeal was
filed by the assessee before Ld. CIT(A), who after
considering the submissions deleted the additions.
[ITA 204 & 205/Ind/2017] [Shri Kalimuddin Badnawarwala & Smt. Bilkis Bai Badnawarwala, Ratlam] 6. Ld. D.R. supported the order of the A.O. and
submitted that Ld. CIT(A) was justified in deleting the
addition.
Per contra, Ld. Counsel for the assessee supported the
order of Ld. CIT(A) and submitted that the A.O. was not
justified in making the addition. He further submitted that
the finding of the Ld. CIT(A) is contrary to the recorded and
the material placed by the assessee.
We have heard the rival submissions, perused the
materials available on records and gone through the orders
of the authorities below. The Ld. CIT(A) has given finding
of facts by observing as under:
5.1 Ground No.1:- Through this ground of appeal the appellant has challenged the addition of Rs.25,75,513/- on account of long term capital gain. During the year under consideration the appellant sold the property situated at 37, Mitra Nivas Road (Tashkand Marg), Ratlam in which she was having 25% share. The appellant was having initially 50% share in the above stated property. As per the Hibba Nama under the Muslim Personal Law, she transferred 25% property to Mr. Kalimuddin who is son of the appellant. The 25% property has been sold by the appellant and the 25% has been sold by Mr. Kalimuddin. All the legal formalities like registration of the sale documents before the Sub-Registrar in respect of 25% has been done by the appellant and in
[ITA 204 & 205/Ind/2017] [Shri Kalimuddin Badnawarwala & Smt. Bilkis Bai Badnawarwala, Ratlam]
respect of 25% is done by Mr. Kalimuddin. The A.O. while calculating the capital gain has considered the sale price in respect of the appellant at 50% of the total receipt and the purchase price of the property also at 50% of the total purchase price and other expenditure like cost of construction at 25%. Since, the appellant owns 25% of the property at the time of transfer then it will be appropriate to consider sale price at Rs.37,50,000/- instead of Rs.75,00,000/- being 25% of the sale consideration. The A.O. should also have adopted plot purchase amount at Rs.8,28,250/- instead of Rs.16,56,500/-. Therefore, the capital gain of the appellant should be calculated as under:- Sale Assessee’s 1,50,00,000/- 37,50,000/- consideration 1/4th share Less: Year of Cost of Index Indexed cost acquisition acquisition of acquisition 2001-02 8,28,250/- 551/426 10,71,281/- 2001-02 3,10,750/- 551/426 4,01,933/- 2002-03 5,53,092/- 551/447 6,81,776/- 2003-04 12,74,976/- 551/463 15,17,304/- 2004-05 1,57,600/- 551/480 1,80,912/- 38,53,206/- LONG TERM CAPITAL GAIN -1,03,206/-
Therefore, the addition made by the A.O. amounting to Rs.25,75,513/- is Deleted. Therefore, the appeal on this ground is Allowed.
The aforesaid finding on fact is not rebutted by the
revenue by placing any adverse material on record.
Therefore, we do not see any infirmity in to the finding of
the Ld. CIT(A) and the same is hereby affirmed. Grounds
raised by the revenue are rejected.
[ITA 204 & 205/Ind/2017] [Shri Kalimuddin Badnawarwala & Smt. Bilkis Bai Badnawarwala, Ratlam] 10. Now we take up revenue’s appeal in ITA
No.204/Ind/2017. The facts are identical as were in ITA
No.205/Ind/2017. The respective representative have
adopted the same arguments as were in ITA
No.205/Ind/2015. We have sustained the finding of the
Ld. CIT(A). As revenue has not placed any adverse material
representing finding on fact by the Ld. CIT(A). Therefore,
taking a consistent view in the present appeal as well, we
do not see any infirmity in the finding of the Ld. CIT(A) and
the grounds raised by the revenue are rejected.
In the result, appeals filed by the revenue are
dismissed.
Order was pronounced in the open court on 08 .01.2019. Sd/- Sd/- (MANISH BORAD) (KUL BHARAT) ACCOUNTANT MEMBER JUDICIALMEMBER Indore; �दनांक Dated : 08/01/2019 VG/SPS
[ITA 204 & 205/Ind/2017] [Shri Kalimuddin Badnawarwala & Smt. Bilkis Bai Badnawarwala, Ratlam]
Copy to: Assessee/AO/Pr. CIT/ CIT (A)/ITAT (DR)/Guard file. By order
Assistant Registrar, Indore