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Income Tax Appellate Tribunal, B BENCH: CHENNAΙ
Before: SHRI ABY T. VARKEYAND
आदेश / O R D E R
PER ABY T. VARKEY, JM:
This appeal has been filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals) / NFAC (in short “CIT(A)") dated 05.07.2024 for assessment year 2016-17 (in short “AY").
In the several grounds raised in the appeal, the assessee in sum & substance, has objected to the Ld. CIT(A)’s action of upholding the addition of Long Term Capital Gain ( in short ‘LTCG’) of Rs.18,92,30,000/- made by the Assessing Officer (in short ‘AO’), made by the Assessing Officer (in short ‘AO’), in the hands of the in the hands of the assessee, on the given facts and circumstances of the case. facts and circumstances of the case. facts and circumstances of the case.
Brief facts as noted Brief facts as noted are that, the AO of the assessee was in receipt are that, the AO of the assessee was in receipt of information that the assesse the assessee, Shri Palanisamy had transferred an immovable property of 1.27 acres of land situated at Ramanathapuram immovable property of 1.27 acres of land situated at Ramanathapuram immovable property of 1.27 acres of land situated at Ramanathapuram Village, Coimbatore on 31.03.2016to M/s. Hindust Village, Coimbatore on 31.03.2016to M/s. Hindusthan Educational an Educational & Charitable Trust, Coimbatore for a consideration of Rs.18,92,30,000/ Charitable Trust, Coimbatore for a consideration of Rs.18,92,30,000/ Charitable Trust, Coimbatore for a consideration of Rs.18,92,30,000/- vide document No.1213/2016 dated 31.03.2016 No.1213/2016 dated 31.03.2016 registered registered in the Sub- Registrar Office, Peelamedu, Coimbatore Registrar Office, Peelamedu, Coimbatore. According to AO, the impugned . According to AO, the impugned transfer of land was not disclosed by the assessee in the return of income transfer of land was not disclosed by the assessee in the return of income transfer of land was not disclosed by the assessee in the return of income and that he did not offer the corresponding capital gains to tax and and that he did not offer the corresponding capital gains to tax and and that he did not offer the corresponding capital gains to tax and therefore he formed a reasonable belief that income chargeable to tax therefore he formed a reasonable belief that income chargeable to tax therefore he formed a reasonable belief that income chargeable to tax had escaped assessment in the d assessment in the relevant year and accordingly and accordingly reopened assessment for AY 2016 for AY 2016-17 u/s. 147 of the Act. It is noted that, in 147 of the Act. It is noted that, in response to notices u/s.142(1) of the Act, notices u/s.142(1) of the Act, the assessee filed physical copy assessee filed physical copy of income-tax return along with computation of total tax return along with computation of total income and that he income and that he did not admit any capital gain qua the aforesaid property. The assessee is did not admit any capital gain qua the aforesaid property. The assessee is did not admit any capital gain qua the aforesaid property. The assessee is noted to have contended that, he was only the title owner of the property noted to have contended that, he was only the title owner of the property noted to have contended that, he was only the title owner of the property which he had conveyed during the year but the property was beneficially which he had conveyed during the year but the property was beneficially which he had conveyed during the year but the property was beneficially owned and was in physical possession of one Mr. T.S.R. Khannaiyann (in physical possession of one Mr. T.S.R. Khannaiyann (in physical possession of one Mr. T.S.R. Khannaiyann (in short ‘TSRK‘) having PAN AFZPK7832C short ‘TSRK‘) having PAN AFZPK7832C, who had actually transferred the who had actually transferred the property, received the sale consideration and had offered the property, received the sale consideration and had offered the property, received the sale consideration and had offered the Long Term Capital Gain (LTCG) from the transfer of property in questi from the transfer of property in questi from the transfer of property in question to tax in his return of income. The AO in this regard is noted to have also return of income. The AO in this regard is noted to have also return of income. The AO in this regard is noted to have also acknowledged that Mr. TSRK, had admitted LTCG from sale of scheduled acknowledged that Mr. TSRK, had admitted LTCG from sale of scheduled acknowledged that Mr. TSRK, had admitted LTCG from sale of scheduled property in his return of income for AY 2016 property in his return of income for AY 2016-17. The AO, at the same 17. The AO, at the same time, observed that, Mr. TSRK in his in time, observed that, Mr. TSRK in his income-tax assessment proceedings tax assessment proceedings had somersaulted on this issue, and had claimed that the gains were not had somersaulted on this issue, and had claimed that the gains were not had somersaulted on this issue, and had claimed that the gains were not taxable in his hands, which however was not accepted by the AO of Mr. taxable in his hands, which however was not accepted by the AO of Mr. taxable in his hands, which however was not accepted by the AO of Mr.
TSRK, whose action had been contested by Mr. TSRK before the Ld. , whose action had been contested by Mr. TSRK before the Ld. , whose action had been contested by Mr. TSRK before the Ld. CIT(A). On these facts therefore, the AO did not accede to the contention facts therefore, the AO did not accede to the contention facts therefore, the AO did not accede to the contention of assessee (Mr. Ramasami Palanisamy) that the impugned LTCG has of assessee (Mr. Ramasami Palanisamy) that the impugned LTCG has of assessee (Mr. Ramasami Palanisamy) that the impugned LTCG has already been taxed in the hands of Mr. TSRK, since the latter had already been taxed in the hands of Mr. TSRK, since the latter had already been taxed in the hands of Mr. TSRK, since the latter had contested the same, and therefore assessed the entire sale consider contested the same, and therefore assessed the entire sale consider contested the same, and therefore assessed the entire sale consideration of Rs.18,92,30,000/- as LTCG from the transfer of the property as LTCG from the transfer of the property as LTCG from the transfer of the property in the hands of the assessee as well hands of the assessee as well.
Aggrieved by the action of the AO, the assessee is noted to have Aggrieved by the action of the AO, the assessee is noted to have Aggrieved by the action of the AO, the assessee is noted to have preferred an appeal before the Ld. CIT(A). In appeal before the Ld. preferred an appeal before the Ld. CIT(A). In appeal before the Ld. preferred an appeal before the Ld. CIT(A). In appeal before the Ld.
CIT(A), the assessee primarily contended that, when the primarily contended that, when the equitable owner equitable owner of the property Mr. TSRK had already admitted the capital gains in of the property Mr. TSRK had already admitted the capital gains in of the property Mr. TSRK had already admitted the capital gains in relation to transfer of the impugned property to tax and that the Revenue relation to transfer of the impugned property to tax and that the Revenue relation to transfer of the impugned property to tax and that the Revenue finding him to be the rightful owner/transferor had alre finding him to be the rightful owner/transferor had already assessed him ady assessed him to tax, then the impugned addition made in the hands of the assessee, to tax, then the impugned addition made in the hands of the assessee, to tax, then the impugned addition made in the hands of the assessee, who had only conveyed the title in the property, as agreed with Mr. TSRK who had only conveyed the title in the property, as agreed with Mr. TSRK who had only conveyed the title in the property, as agreed with Mr. TSRK and had clearly not been benefitted in any manner, was unjustly taxed in and had clearly not been benefitted in any manner, was unjustly taxed in and had clearly not been benefitted in any manner, was unjustly taxed in this regard and that the impugned addition amounted to double taxation e impugned addition amounted to double taxation e impugned addition amounted to double taxation of the same sum. The assessee is noted to have brought to the notice of of the same sum. The assessee is noted to have brought to the notice of of the same sum. The assessee is noted to have brought to the notice of the Ld. CIT(A) that the impugned property which was transferred on the Ld. CIT(A) that the impugned property which was transferred on the Ld. CIT(A) that the impugned property which was transferred on 31.03.2016 to M/s. Hindusthan Educational & Charitable Trust was in 31.03.2016 to M/s. Hindusthan Educational & Charitable Trust was in 31.03.2016 to M/s. Hindusthan Educational & Charitable Trust was in fact beneficially owned and was in physical possession of Mr. TSRK and for beneficially owned and was in physical possession of Mr. TSRK and for beneficially owned and was in physical possession of Mr. TSRK and for that reason, even the purchaser had paid the entire sale consideration of even the purchaser had paid the entire sale consideration of even the purchaser had paid the entire sale consideration of Rs.18,92,30,000/- through various cheques drawn in the name of through various cheques drawn in the name of through various cheques drawn in the name of Mr.TSRK& his wife. He also showed the Ld. CIT Mr.TSRK& his wife. He also showed the Ld. CIT(A) that, the purchaser had (A) that, the purchaser had recognized Mr. TSRK as the seller of the property and had accordingly recognized Mr. TSRK as the seller of the property and had accordingly recognized Mr. TSRK as the seller of the property and had accordingly deducted tax u/s 194-IA of the Act in the name of Mr. TSRK, and; thus IA of the Act in the name of Mr. TSRK, and; thus IA of the Act in the name of Mr. TSRK, and; thus Mr. TSRK had offered the capital gains in relation to transfer of the Mr. TSRK had offered the capital gains in relation to transfer of the Mr. TSRK had offered the capital gains in relation to transfer of the impugned property viz., in excess of Rs.18 Cr., as his taxable capital viz., in excess of Rs.18 Cr., as his taxable capital viz., in excess of Rs.18 Cr., as his taxable capital gains in his return of income for AY 2016 gains in his return of income for AY 2016-17. It was further pointed out 17. It was further pointed out to the Ld.CIT(A) that the AO conveniently did to the Ld.CIT(A) that the AO conveniently didn’t take notice of the later t take notice of the later developments i.e., pursuant to search in the premises o developments i.e., pursuant to search in the premises o developments i.e., pursuant to search in the premises of Mr. TSRK on 06.03.2019, the Central Circle AO framed assessment u/s.153A of the Act 06.03.2019, the Central Circle AO framed assessment u/s.153A of the Act 06.03.2019, the Central Circle AO framed assessment u/s.153A of the Act wherein Mr. TSRK had again admitted and offered capital gains on sale of wherein Mr. TSRK had again admitted and offered capital gains on sale of wherein Mr. TSRK had again admitted and offered capital gains on sale of this impugned property and that upon verification of the facts, the same this impugned property and that upon verification of the facts, the same this impugned property and that upon verification of the facts, the same was accepted by the Depa was accepted by the Department. The assessee also brought to the notice rtment. The assessee also brought to the notice of the Ld. CIT(A), that Mr. TSRK by letter dated 05.06.2024 filed before of the Ld. CIT(A), that Mr. TSRK by letter dated 05.06.2024 filed before of the Ld. CIT(A), that Mr. TSRK by letter dated 05.06.2024 filed before his Ld. CIT(A) had withdrawn the grounds of appeal raised in the original his Ld. CIT(A) had withdrawn the grounds of appeal raised in the original his Ld. CIT(A) had withdrawn the grounds of appeal raised in the original assessment matters, against the action of the AO adding the c assessment matters, against the action of the AO adding the c assessment matters, against the action of the AO adding the capital gains of Rs.18 Crs. from the sale of of Rs.18 Crs. from the sale of ibid property registered vide document property registered vide document No.1213/2016 dated 31.03.2016. On these contemporaneous facts, the No.1213/2016 dated 31.03.2016. On these contemporaneous facts, the No.1213/2016 dated 31.03.2016. On these contemporaneous facts, the assessee is noted to have urged before the Ld. CIT(A) that, the reasons assessee is noted to have urged before the Ld. CIT(A) that, the reasons assessee is noted to have urged before the Ld. CIT(A) that, the reasons given by the AO in the present cas given by the AO in the present case to repel the contention of the e to repel the contention of the assessee that Mr. TSRK had not accepted the taxability of capital gains assessee that Mr. TSRK had not accepted the taxability of capital gains assessee that Mr. TSRK had not accepted the taxability of capital gains arising from sale of impugned property in question in his hands, was arising from sale of impugned property in question in his hands, was arising from sale of impugned property in question in his hands, was absent/no longer existing and therefore pleaded that the same addition of absent/no longer existing and therefore pleaded that the same addition of absent/no longer existing and therefore pleaded that the same addition of LTCG made in assessee’s hands ought to be deleted. e in assessee’s hands ought to be deleted.
5. It was also brought to the notice of the Ld. CIT(A) that, pursuant to It was also brought to the notice of the Ld. CIT(A) that, pursuant to It was also brought to the notice of the Ld. CIT(A) that, pursuant to the impugned assessment proceedings, the AO of the assessee also took the impugned assessment proceedings, the AO of the assessee also took the impugned assessment proceedings, the AO of the assessee also took note of the fact that the consideration in question was paid by note of the fact that the consideration in question was paid by note of the fact that the consideration in question was paid by M/s.Hindusthan Educational & Charitable Trust in the M/s.Hindusthan Educational & Charitable Trust in the bank account of bank account of Mr.TSRK, and he therefore also alleged escapement of income in the Mr.TSRK, and he therefore also alleged escapement of income in the Mr.TSRK, and he therefore also alleged escapement of income in the hands of Mr. TSRK, and accordingly proposed initiation of reassessment of hands of Mr. TSRK, and accordingly proposed initiation of reassessment of hands of Mr. TSRK, and accordingly proposed initiation of reassessment of Mr. TSRK for AY 2016-17 by issuance of notice u/s.148A of the Act. The 17 by issuance of notice u/s.148A of the Act. The 17 by issuance of notice u/s.148A of the Act. The notice issued u/s 148A(b) o notice issued u/s 148A(b) of the Act upon Mr. TSRK, was objected to by f the Act upon Mr. TSRK, was objected to by the latter, who pointed out that, the payment of Rs.14 crores to him was the latter, who pointed out that, the payment of Rs.14 crores to him was the latter, who pointed out that, the payment of Rs.14 crores to him was arising from transfer of impugned property in question and that the arising from transfer of impugned property in question and that the arising from transfer of impugned property in question and that the capital gains derived by him from the same had already been offered to capital gains derived by him from the same had already been offered to capital gains derived by him from the same had already been offered to tax by him, which fact has been accepted by the department and tax by him, which fact has been accepted by the department and tax by him, which fact has been accepted by the department and therefore contended that there was no escapement of income. The AO of therefore contended that there was no escapement of income. The AO of therefore contended that there was no escapement of income. The AO of Mr. TSRK is noted to have found merit in his submissions and therefore Mr. TSRK is noted to have found merit in his submissions and therefore Mr. TSRK is noted to have found merit in his submissions and therefore dropped the reopening proceedings vide order u/s. 14 dropped the reopening proceedings vide order u/s. 148A(d) of the Act 8A(d) of the Act dated 07.04.2023. Despite the aforesaid relevant facts brought to the dated 07.04.2023. Despite the aforesaid relevant facts brought to the dated 07.04.2023. Despite the aforesaid relevant facts brought to the notice of the Ld.CIT(A), which showed that the impugned property was notice of the Ld.CIT(A), which showed that the impugned property was notice of the Ld.CIT(A), which showed that the impugned property was actually transferred/sold by Mr. TSRK who had also offered the capital sold by Mr. TSRK who had also offered the capital sold by Mr. TSRK who had also offered the capital gain to tax in his hands, th gain to tax in his hands, the Ld. CIT(A) dismissed the appeal filed by the e Ld. CIT(A) dismissed the appeal filed by the assessee on the sole premise that the Sale Deed recognized the assessee assessee on the sole premise that the Sale Deed recognized the assessee assessee on the sole premise that the Sale Deed recognized the assessee as the seller. Aggrieved by this action of the Ld.CIT(A), the assessee is as the seller. Aggrieved by this action of the Ld.CIT(A), the assessee is as the seller. Aggrieved by this action of the Ld.CIT(A), the assessee is now before us.
6. Before us, the Ld. AR for the assessee has p Before us, the Ld. AR for the assessee has primarily reiterated the rimarily reiterated the contentions raised before the Ld. CIT(A) and has filed contentions raised before the Ld. CIT(A) and has filed contentions raised before the Ld. CIT(A) and has filed inter alia the following documents:-
(i) Memorandum of Compromise dated 18.11.2009 entered into the (i) Memorandum of Compromise dated 18.11.2009 entered into the (i) Memorandum of Compromise dated 18.11.2009 entered into the between the assessee and Mr.TSRK [refer Page Nos.22 between the assessee and Mr.TSRK [refer Page Nos.22-26 of PB]; 26 of PB]; (ii) Sale Deed related to the transfer of immovable property which is ed related to the transfer of immovable property which is ed related to the transfer of immovable property which is found placed at Page Nos.2 found placed at Page Nos.2-21 of the Paper Book
(iii) Assessment order passed by the AO u/s.143(3) dated 30.12.2018 (iii) Assessment order passed by the AO u/s.143(3) dated 30.12.2018 (iii) Assessment order passed by the AO u/s.143(3) dated 30.12.2018 in the case of Mr.TSRK [refer Page Nos.27 in the case of Mr.TSRK [refer Page Nos.27-42 of the PB] (iv) Acknowledged Letter (iv) Acknowledged Letter withdrawing the grounds raised by Mr. TSRK withdrawing the grounds raised by Mr. TSRK before the Ld. CIT(A) [refer Page Nos.42 before the Ld. CIT(A) [refer Page Nos.42-43 of the PB]. (iv) Copy of the assessment order passed u/s.153A of the Act dated (iv) Copy of the assessment order passed u/s.153A of the Act dated (iv) Copy of the assessment order passed u/s.153A of the Act dated 10.08.2021 in the case of Mr.TSRK [refer Page Nos.46 10.08.2021 in the case of Mr.TSRK [refer Page Nos.46-48 of PB]. 48 of PB]. (v) Order passed u/s.14 (v) Order passed u/s.148A(d) of the Act dated 07.04.2023 in the 8A(d) of the Act dated 07.04.2023 in the matters of Mr. TSRK for AY 2016 matters of Mr. TSRK for AY 2016-17 [refer Page Nos.49-51 of the PB] 51 of the PB]
7. Per contra, the Ld. DR for the Revenue supported the order of the Per contra, the Ld. DR for the Revenue supported the order of the Per contra, the Ld. DR for the Revenue supported the order of the lower authorities and argued that since the assessee was a party to the lower authorities and argued that since the assessee was a party to the lower authorities and argued that since the assessee was a party to the Sale Deed, the capital gains was rightly brought to tax in his hands. eed, the capital gains was rightly brought to tax in his hands. eed, the capital gains was rightly brought to tax in his hands.
We have heard both the parties and perused the records. The sole We have heard both the parties and perused the records. The sole We have heard both the parties and perused the records. The sole issue involved in the present appeal is regarding the taxability of the issue involved in the present appeal is regarding the taxability of the issue involved in the present appeal is regarding the taxability of the capital gains arising from the transfer of immovabl capital gains arising from the transfer of immovable property at e property at Coimbatore which was registered vide document No.1213/2016 dated Coimbatore which was registered vide document No.1213/2016 dated Coimbatore which was registered vide document No.1213/2016 dated 31.03.2016. From the material placed on record, it is noted that, the 31.03.2016. From the material placed on record, it is noted that, the 31.03.2016. From the material placed on record, it is noted that, the assessee, Shri Ramasami Palanisamy, had originally purchased the assessee, Shri Ramasami Palanisamy, had originally purchased the assessee, Shri Ramasami Palanisamy, had originally purchased the property in question [1.27 acres of land s property in question [1.27 acres of land situated at Ramanathapuram ituated at Ramanathapuram village, Coimbatore] by Sale/Purchase Deed dated 19.11.1991 and further village, Coimbatore] by Sale/Purchase Deed dated 19.11.1991 and further village, Coimbatore] by Sale/Purchase Deed dated 19.11.1991 and further by Release Deed dated 31.05.1993. It is observed that, for purchasing by Release Deed dated 31.05.1993. It is observed that, for purchasing by Release Deed dated 31.05.1993. It is observed that, for purchasing this property, the assessee had availed loan of Rs.1,29,307/ this property, the assessee had availed loan of Rs.1,29,307/ this property, the assessee had availed loan of Rs.1,29,307/- from Mr. TSRK. However, since the assessee could not re ince the assessee could not re-pay the loan, pay the loan, inspite of lender/Mr.TSRK insistence, it led to a dispute, which was referred to for lender/Mr.TSRK insistence, it led to a dispute, which was referred to for lender/Mr.TSRK insistence, it led to a dispute, which was referred to for arbitration and a compromise was struck between the assessee and Mr. arbitration and a compromise was struck between the assessee and Mr. arbitration and a compromise was struck between the assessee and Mr.
TSRK on 18.11.2009, copy of which has been placed at Page TSRK on 18.11.2009, copy of which has been placed at Page TSRK on 18.11.2009, copy of which has been placed at Page Nos.22-26 of PB. The relevant terms of the settlement PB. The relevant terms of the settlement inter-alia as agreed upon, is as agreed upon, is noted to be as under: a. In view of the Memorandum of Compromise and the particulars contained a. In view of the Memorandum of Compromise and the particulars contained a. In view of the Memorandum of Compromise and the particulars contained therein the claim of the Applicant is admitted and the Respondent shall therein the claim of the Applicant is admitted and the Respondent shall therein the claim of the Applicant is admitted and the Respondent shall handover the possession of the property and undertake appropriate steps to over the possession of the property and undertake appropriate steps to over the possession of the property and undertake appropriate steps to transfer all rights/title/charge on the property as per Schedule "A" mentioned transfer all rights/title/charge on the property as per Schedule "A" mentioned transfer all rights/title/charge on the property as per Schedule "A" mentioned towards full and final settlement of the entire disputes which arose as a result towards full and final settlement of the entire disputes which arose as a result towards full and final settlement of the entire disputes which arose as a result of the delay in repayment of the delay in repayment of the amount payable. b. The Respondent is directed to execute the necessary Sale deed on or before b. The Respondent is directed to execute the necessary Sale deed on or before b. The Respondent is directed to execute the necessary Sale deed on or before 30th May, 2010 dealing with the property suitably. The cost of Arbitration will May, 2010 dealing with the property suitably. The cost of Arbitration will May, 2010 dealing with the property suitably. The cost of Arbitration will be borne by both the parties to the present Arbitration proceedings. be borne by both the parties to the present Arbitration proceedings.
9. Pursuant to the above compromise, Mr. TSRK is noted to have come rsuant to the above compromise, Mr. TSRK is noted to have come rsuant to the above compromise, Mr. TSRK is noted to have come into physical possession and into physical possession and equitable ownership over the property in ship over the property in question, which he later sold on 31.03.2016 for a sale consideration of question, which he later sold on 31.03.2016 for a sale consideration of question, which he later sold on 31.03.2016 for a sale consideration of Rs.18.92 Crs. to the buyer, M/s. Hindusthan Educati Rs.18.92 Crs. to the buyer, M/s. Hindusthan Educational & Charitable onal & Charitable Trust. As agreed under the terms of compromise, the assessee being the Trust. As agreed under the terms of compromise, the assessee being the Trust. As agreed under the terms of compromise, the assessee being the titular owner, conveyed the title on behalf and at the behest of Mr. TSRK titular owner, conveyed the title on behalf and at the behest of Mr. TSRK titular owner, conveyed the title on behalf and at the behest of Mr. TSRK to the purchaser, M/s.Hindusthan Educational & Charitable Trust vide to the purchaser, M/s.Hindusthan Educational & Charitable Trust vide to the purchaser, M/s.Hindusthan Educational & Charitable Trust vide document No.1213/2016 da document No.1213/2016 dated 31.03.2016. We find that, it is not in ted 31.03.2016. We find that, it is not in dispute that even the purchaser recognized Mr. TSRK as the rightful dispute that even the purchaser recognized Mr. TSRK as the rightful dispute that even the purchaser recognized Mr. TSRK as the rightful owner/seller owner/seller owner/seller of of of the the the property property property pursuant pursuant pursuant to to to the the the above above above settlement/compromise and, therefore it had paid the entire agreed sale settlement/compromise and, therefore it had paid the entire agreed sale settlement/compromise and, therefore it had paid the entire agreed sale consideration of Rs.18 consideration of Rs.18.92 Crs. to Mr.TSRK and his wife. It is also .92 Crs. to Mr.TSRK and his wife. It is also particularly noted that, the applicable TDS arising pursuant to the transfer particularly noted that, the applicable TDS arising pursuant to the transfer particularly noted that, the applicable TDS arising pursuant to the transfer of immovable property, in terms of Section 194 of immovable property, in terms of Section 194-IA, was deducted and IA, was deducted and paid by the purchaser to the PAN of seller i.e., Mr.TSRK, details paid by the purchaser to the PAN of seller i.e., Mr.TSRK, details paid by the purchaser to the PAN of seller i.e., Mr.TSRK, details of which are found at Page No.9 of the Sale Deed (refer Page No.10 of the PB). are found at Page No.9 of the Sale Deed (refer Page No.10 of the PB). are found at Page No.9 of the Sale Deed (refer Page No.10 of the PB).
10. Pursuant thereto, Mr. TSRK is noted to have filed his original return Pursuant thereto, Mr. TSRK is noted to have filed his original return Pursuant thereto, Mr. TSRK is noted to have filed his original return of income for AY 2016 of income for AY 2016-17 declaring total income at Rs.35,13,69,000/ 17 declaring total income at Rs.35,13,69,000/- wherein, he inter-alia admitted the capital gains from the sale of ibid admitted the capital gains from the sale of ibid admitted the capital gains from the sale of ibid property to the tune of more thanRs.18 Crs. However, indeed during the property to the tune of more thanRs.18 Crs. However, indeed during the property to the tune of more thanRs.18 Crs. However, indeed during the course of assessment proceedings, he sought to withdraw his capital course of assessment proceedings, he sought to withdraw his capital course of assessment proceedings, he sought to withdraw his capital gains offered in respect of the property in question, but the AO d gains offered in respect of the property in question, but the AO d gains offered in respect of the property in question, but the AO didn’t accept the same and treated Mr. TSRK to be the seller/transferor of the accept the same and treated Mr. TSRK to be the seller/transferor of the accept the same and treated Mr. TSRK to be the seller/transferor of the impugned property and assessed the capital gains to tax in his hands and impugned property and assessed the capital gains to tax in his hands and impugned property and assessed the capital gains to tax in his hands and accordingly passed the assessment order u/s.143(3) of the Act dated accordingly passed the assessment order u/s.143(3) of the Act dated accordingly passed the assessment order u/s.143(3) of the Act dated 30.12.2018, by observing as 30.12.2018, by observing as under: -
………..The entire sale consideration has been received by him ………..The entire sale consideration has been received by him ………..The entire sale consideration has been received by him and his wife from the Trust and the TDS has been deducted for the and his wife from the Trust and the TDS has been deducted for the and his wife from the Trust and the TDS has been deducted for the entire amount only in the name of the assessee. ………………….. The entire amount only in the name of the assessee. ………………….. The entire amount only in the name of the assessee. ………………….. The payment of sale consideration by the HindusthanEductaional and payment of sale consideration by the HindusthanEductaional and payment of sale consideration by the HindusthanEductaional and Charitable Trust, the purchaser, to the assessee and his wife, Charitable Trust, the purchaser, to the assessee and his wife, Charitable Trust, the purchaser, to the assessee and his wife, deduction of tax at source in the PAN of assessee, the assessee deduction of tax at source in the PAN of assessee, the assessee deduction of tax at source in the PAN of assessee, the assessee admitting long term capital gain in his ) return of income, wrong PAN admitting long term capital gain in his ) return of income, wrong PAN admitting long term capital gain in his ) return of income, wrong PAN quoted in sale deed, non quoted in sale deed, non-appearance of the said seller Shri Palanisamy Palanisamy in response to summons u/s 131, in response to summons u/s 131, all of these go on prove that the all of these go on prove that the property in question is in fact belongs to the assessee and he property in question is in fact belongs to the assessee and he property in question is in fact belongs to the assessee and he transferred the same to Hindusthan Educational and Charitable transferred the same to Hindusthan Educational and Charitable transferred the same to Hindusthan Educational and Charitable Trust and the entire sale consideration was received Trust and the entire sale consideration was received by him and by him and his spouse. All these facts proves that Mr.Khannaiyan was his spouse. All these facts proves that Mr.Khannaiyan was his spouse. All these facts proves that Mr.Khannaiyan was having every right over the property which is evident from the having every right over the property which is evident from the having every right over the property which is evident from the facts enumerated and with this aspect only the assessee has facts enumerated and with this aspect only the assessee has facts enumerated and with this aspect only the assessee has rightfully returned the capital gain in his hands. Hence it is h rightfully returned the capital gain in his hands. Hence it is h rightfully returned the capital gain in his hands. Hence it is held that the income arrived out of the sale of property vide sale that the income arrived out of the sale of property vide sale that the income arrived out of the sale of property vide sale deed no.1213/2016 is the capital gain of assessee deed no.1213/2016 is the capital gain of assessee.
(emphasis supplied) (emphasis supplied)
From the above, it is observed that the Revenue was aware that the it is observed that the Revenue was aware that the it is observed that the Revenue was aware that the assessee, Mr. Ramasami Palanisamy had conveyed t assessee, Mr. Ramasami Palanisamy had conveyed the title in the he title in the impugned property but still it was categorically held that, the impugned impugned property but still it was categorically held that, the impugned impugned property but still it was categorically held that, the impugned property belonged to Mr. TSRK and that the sale consideration was property belonged to Mr. TSRK and that the sale consideration was property belonged to Mr. TSRK and that the sale consideration was received by him and that he had every right over the property and received by him and that he had every right over the property and received by him and that he had every right over the property and therefore, the gain from sale of pr the gain from sale of property was assessable to tax in his operty was assessable to tax in his hands. It is noted that these contemporaneous facts were available with hands. It is noted that these contemporaneous facts were available with hands. It is noted that these contemporaneous facts were available with the AO at the time of framing the impugned assessment in the hands of the AO at the time of framing the impugned assessment in the hands of the AO at the time of framing the impugned assessment in the hands of the assessee. We, indeed find it surprising that, when the Revenue had the assessee. We, indeed find it surprising that, when the Revenue had the assessee. We, indeed find it surprising that, when the Revenue had already held Mr. TSRK to be the right person to be assessed to tax as the held Mr. TSRK to be the right person to be assessed to tax as the held Mr. TSRK to be the right person to be assessed to tax as the seller/transferor of the property, then, it was unjustified on their part to transferor of the property, then, it was unjustified on their part to transferor of the property, then, it was unjustified on their part to turn around and allege that the same gains from the sale of the same turn around and allege that the same gains from the sale of the same turn around and allege that the same gains from the sale of the same property was also assessable in the hands o property was also assessable in the hands of the assessee. f the assessee.
12. Before us, the Ld. DR pointed out the AO’s observation that, Mr. Before us, the Ld. DR pointed out the AO’s observation that, Mr. Before us, the Ld. DR pointed out the AO’s observation that, Mr. TSRK had contested the action of the Revenue assessing the income from TSRK had contested the action of the Revenue assessing the income from TSRK had contested the action of the Revenue assessing the income from sale of property to tax in his hands and therefore since it was not clear as sale of property to tax in his hands and therefore since it was not clear as sale of property to tax in his hands and therefore since it was not clear as to whom did the capit to whom did the capital gains actually relate to, he was justified in al gains actually relate to, he was justified in assessing the said capital gains to tax in the hands of the assessee as assessing the said capital gains to tax in the hands of the assessee as assessing the said capital gains to tax in the hands of the assessee as well. We however note that, the AO had selectively chosen and picked out well. We however note that, the AO had selectively chosen and picked out well. We however note that, the AO had selectively chosen and picked out the relevant facts and skipped certain material facts as it su the relevant facts and skipped certain material facts as it su the relevant facts and skipped certain material facts as it suited his requirements for making the impugned addition. The Ld. AR for the requirements for making the impugned addition. The Ld. AR for the requirements for making the impugned addition. The Ld. AR for the assessee brought to our notice that, the AO of Mr. TSRK though had assessee brought to our notice that, the AO of Mr. TSRK though had assessee brought to our notice that, the AO of Mr. TSRK though had observed that, the income arrived out of the sale of property vide sale income arrived out of the sale of property vide sale income arrived out of the sale of property vide sale deed no.1213/2016 is the capital gain of a deed no.1213/2016 is the capital gain of assessee, but he had ultimately , but he had ultimately taxed the same by way of ‘Business Income’. Accordingly, Mr. TSRK had taxed the same by way of ‘Business Income’. Accordingly, Mr. TSRK had taxed the same by way of ‘Business Income’. Accordingly, Mr. TSRK had raised grounds challenging the action of assessing the gains itself and raised grounds challenging the action of assessing the gains itself and raised grounds challenging the action of assessing the gains itself and alternatively assessing the gains by way of ‘Business Income’ instead of alternatively assessing the gains by way of ‘Business Income’ instead of alternatively assessing the gains by way of ‘Business Income’ instead of ‘Capital Gains’. The relevant grounds raised before the Ld. CIT(A) by Mr. ains’. The relevant grounds raised before the Ld. CIT(A) by Mr. ains’. The relevant grounds raised before the Ld. CIT(A) by Mr.
TSRK, as taken note of by us, is as TSRK, as taken note of by us, is as follows: - i) That capital gains from the sale of property as per document That capital gains from the sale of property as per document That capital gains from the sale of property as per document No.1213/2016 dated 31.03.2016 should not be taxed in his No.1213/2016 dated 31.03.2016 should not be taxed in his No.1213/2016 dated 31.03.2016 should not be taxed in his hands. ii) The gain from the The gain from the sale of property couldn’t have been taxed as sale of property couldn’t have been taxed as business income but only as capital gains. business income but only as capital gains.
It has beenbrought to our notice that, It has beenbrought to our notice that, by letter dated 05.06.2024, by letter dated 05.06.2024, Mr. TSRK has withdrawn Ground No.1 meaning that he has withdrawn the Mr. TSRK has withdrawn Ground No.1 meaning that he has withdrawn the Mr. TSRK has withdrawn Ground No.1 meaning that he has withdrawn the grounds raised against the a grounds raised against the action of the AO taxing the profit/gains from ction of the AO taxing the profit/gains from the sale of property vide document No.1213/2016 dated 31.03.2016, the sale of property vide document No.1213/2016 dated 31.03.2016, the sale of property vide document No.1213/2016 dated 31.03.2016, copy of which is found placed at Page Nos.42 copy of which is found placed at Page Nos.42-43 of the Paper Book. 43 of the Paper Book.
Accordingly, we observe that, the only issue impugned in appeal is we observe that, the only issue impugned in appeal is we observe that, the only issue impugned in appeal is regarding the correct ‘head of income head of income’ under which the gains from sale of under which the gains from sale of property is to be taxed ; and that, Mr. TSRK had admitted Mr. TSRK had admitted, and accepted the AO’s action of assessing him as the rightful owner/seller of the the AO’s action of assessing him as the rightful owner/seller of the the AO’s action of assessing him as the rightful owner/seller of the property. Having regard to these facts, which could property. Having regard to these facts, which could not be controverted not be controverted by the Ld. DR as well, we agree with the assessee that, when Mr. TSRK by the Ld. DR as well, we agree with the assessee that, when Mr. TSRK by the Ld. DR as well, we agree with the assessee that, when Mr. TSRK had already been assessed to tax qua the income from sale of impugned had already been assessed to tax qua the income from sale of impugned had already been assessed to tax qua the income from sale of impugned property treating him to be the owner for income property treating him to be the owner for income-tax purposes, the AO’s tax purposes, the AO’s action of assessing the action of assessing the assessee again in relation to the same transaction assessee again in relation to the same transaction amounted to double taxation, which was unjustified. amounted to double taxation, which was unjustified.
Apart from the above, we also take note of the contemporaneous Apart from the above, we also take note of the contemporaneous Apart from the above, we also take note of the contemporaneous fact that, in the meanwhile, a search u/s 132 of the Act had taken place in fact that, in the meanwhile, a search u/s 132 of the Act had taken place in fact that, in the meanwhile, a search u/s 132 of the Act had taken place in the premise of Mr. TSRK on 06.03.2019 along with the purchaser, M/s. ise of Mr. TSRK on 06.03.2019 along with the purchaser, M/s. ise of Mr. TSRK on 06.03.2019 along with the purchaser, M/s.
Hindusthan Educational & Charitable Trust as well. Consequent to the Hindusthan Educational & Charitable Trust as well. Consequent to the Hindusthan Educational & Charitable Trust as well. Consequent to the search, notice u/s 153A of the Act was issued to Mr. TSRK inter alia for AY search, notice u/s 153A of the Act was issued to Mr. TSRK inter alia for AY search, notice u/s 153A of the Act was issued to Mr. TSRK inter alia for AY 2016-17 as well, and that Mr.TSRK in the return fi 17 as well, and that Mr.TSRK in the return filed in response to led in response to notice u/s 153A for AY 2016 notice u/s 153A for AY 2016-17 on 10.08.2021, copy of which was placed 17 on 10.08.2021, copy of which was placed at Page Nos.46-48 of the paper book, declared total income at 48 of the paper book, declared total income at 48 of the paper book, declared total income at Rs.35,13,69,000/- in which in which, he again, admitted the capital gains admitted the capital gains, from the the sale sale of of the the impugned impugned property property vide vide registered registered document document No.1213/2016 dated 31.03.2016 as income belonging to him. The No.1213/2016 dated 31.03.2016 as income belonging to him. The No.1213/2016 dated 31.03.2016 as income belonging to him. The ACIT,Central Circle-1, Coimbatore, who was the AO of Mr. TSRK, upon 1, Coimbatore, who was the AO of Mr. TSRK, upon 1, Coimbatore, who was the AO of Mr. TSRK, upon examination of facts, is noted to have accepted the same, by holding as examination of facts, is noted to have accepted the same, by holding as examination of facts, is noted to have accepted the same, by holding as under:
2.3 The assessee had 2.3 The assessee had offered Long Term Capital Gain in respect of two offered Long Term Capital Gain in respect of two properties in the original return of income filed in response to notice u/s 148 properties in the original return of income filed in response to notice u/s 148 properties in the original return of income filed in response to notice u/s 148 and subsequently at the assessment proceedings claimed that only one and subsequently at the assessment proceedings claimed that only one and subsequently at the assessment proceedings claimed that only one property belonged to him and the other did not belong to h property belonged to him and the other did not belong to him. The Assessing im. The Assessing Officer did not accept the claim of the assessee and treated both the properties Officer did not accept the claim of the assessee and treated both the properties Officer did not accept the claim of the assessee and treated both the properties belong to him only and also proceeded that they are not in the nature of belong to him only and also proceeded that they are not in the nature of belong to him only and also proceeded that they are not in the nature of Capital Gain, but are adventure in the nature of trade and assessed them as Capital Gain, but are adventure in the nature of trade and assessed them as Capital Gain, but are adventure in the nature of trade and assessed them as business income. Now while filing the Return of Income in response to notice income. Now while filing the Return of Income in response to notice income. Now while filing the Return of Income in response to notice u/s 153A dated 13/12/2019, the assessee admitted Capital Gain as both the u/s 153A dated 13/12/2019, the assessee admitted Capital Gain as both the u/s 153A dated 13/12/2019, the assessee admitted Capital Gain as both the properties contending that both the properties belonged to him. Therefore, properties contending that both the properties belonged to him. Therefore, properties contending that both the properties belonged to him. Therefore, there is no change in the stand of the there is no change in the stand of the Assessing Officer that the assessee was Assessing Officer that the assessee was holding both the properties. In respect of nature of income, in the original holding both the properties. In respect of nature of income, in the original holding both the properties. In respect of nature of income, in the original assessment it was held that the income is from the adventure in the nature of assessment it was held that the income is from the adventure in the nature of assessment it was held that the income is from the adventure in the nature of trade and was treated as business income. The same principle trade and was treated as business income. The same principle is also adopted is also adopted in this order also and the profit derived on the sale of property treated as in this order also and the profit derived on the sale of property treated as in this order also and the profit derived on the sale of property treated as income from business as against the claim of the assessee as Capital Gain. The income from business as against the claim of the assessee as Capital Gain. The income from business as against the claim of the assessee as Capital Gain. The assessee had disclosed the Capital Gain on the said properties at assessee had disclosed the Capital Gain on the said properties at assessee had disclosed the Capital Gain on the said properties at Rs.35,07,66,456/-, In that place the business income is computed at , In that place the business income is computed at , In that place the business income is computed at Rs.35,17,44,221/-. Accordingly, the assessment is completed as under: . Accordingly, the assessment is completed as under: . Accordingly, the assessment is completed as under:
Returned Income u/s 153A Returned Income u/s 153A Rs. 35,13,69,000 Rs. 35,13,69,000 Less: LTCG admitted by the assessee Less: LTCG admitted by the assessee Rs. 35,07,66,456 Rs. 35,07,66,456 Income from other heads of income Income from other heads of income Rs. 6,02,544 Add: Add: LTCG LTCG treated treated as as income income from from Rs. 35,17,44,221 Rs. 35,17,44,221 business Add: Income from House Property Add: Income from House Property Rs. 2,39,567 Assessed Income Rs.35,25,86,332 Rs.35,25,86,332
Thus, from the events discussed (supra), it is noted that the capital from the events discussed (supra), it is noted that the capital from the events discussed (supra), it is noted that the capital gains/profit from the transfer o gains/profit from the transfer of property in question registered vide f property in question registered vide document No.1213/2016 dated 31.03.2016 had already been brought to document No.1213/2016 dated 31.03.2016 had already been brought to document No.1213/2016 dated 31.03.2016 had already been brought to tax by the Revenue in the hands of Mr. TSRK treating him to be the tax by the Revenue in the hands of Mr. TSRK treating him to be the tax by the Revenue in the hands of Mr. TSRK treating him to be the rightful owner for income rightful owner for income-tax purposes. However, it is observed that, the tax purposes. However, it is observed that, the Revenue still did not stop there in the matters of Mr. TSRK, but again till did not stop there in the matters of Mr. TSRK, but again till did not stop there in the matters of Mr. TSRK, but again issued notice u/s.148A(b) of the Act on 20.03.2023 for AY 2016 issued notice u/s.148A(b) of the Act on 20.03.2023 for AY 2016 issued notice u/s.148A(b) of the Act on 20.03.2023 for AY 2016-17 conveying their intention to again re conveying their intention to again re-open his assessment for AY 2016 open his assessment for AY 2016-17 on this same issue (information shared by the AO of the information shared by the AO of the assessee) that, since the payment upon sale of property was received by Mr. TSRK in his since the payment upon sale of property was received by Mr. TSRK in his since the payment upon sale of property was received by Mr. TSRK in his bank account, the same was to be brought to tax in his hands i.e. Mr. bank account, the same was to be brought to tax in his hands i.e. Mr. bank account, the same was to be brought to tax in his hands i.e. Mr. TSRK. We observe that, this time Mr. TSRK objected TSRK. We observe that, this time Mr. TSRK objected to to the proposed- reopening by explaining that h reopening by explaining that he (Mr.TSRK) has already disclosed the e (Mr.TSRK) has already disclosed the entire sale consideration of Rs.18,92,30,000/ entire sale consideration of Rs.18,92,30,000/- from sale of the ibid from sale of the ibid property in his return of income and had offered LTCG and had also property in his return of income and had offered LTCG and had also property in his return of income and had offered LTCG and had also withdrawn the grounds of appeal raised by him before the Ld.CIT(A) withdrawn the grounds of appeal raised by him before the Ld.CIT(A) withdrawn the grounds of appeal raised by him before the Ld.CIT(A)
(supra) and thus, has remitted tax arising upon capital gain from the s, has remitted tax arising upon capital gain from the s, has remitted tax arising upon capital gain from the transfer of impugned property in question. Upon being convinced by the transfer of impugned property in question. Upon being convinced by the transfer of impugned property in question. Upon being convinced by the assertion made by Mr. TSRK, the Revenue is noted to have dropped the assertion made by Mr. TSRK, the Revenue is noted to have dropped the assertion made by Mr. TSRK, the Revenue is noted to have dropped the proceedings by an order passed u/s.148A(d) of the Act dated 0 proceedings by an order passed u/s.148A(d) of the Act dated 0 proceedings by an order passed u/s.148A(d) of the Act dated 07.04.2023 wherein the ACIT, Central Circle wherein the ACIT, Central Circle-1, Coimbatore, has recorded the 1, Coimbatore, has recorded the following observations:- -
It is found that the first property (1.27 Acres at Meena estate, Coimbatore) 5. It is found that the first property (1.27 Acres at Meena estate, Coimbatore) 5. It is found that the first property (1.27 Acres at Meena estate, Coimbatore) has been purchased on 31/03/2016 vide Doc. No. 1212/2016 registered before has been purchased on 31/03/2016 vide Doc. No. 1212/2016 registered before has been purchased on 31/03/2016 vide Doc. No. 1212/2016 registered before SRO, Peelamedu for Rs.18,92,30,000/ SRO, Peelamedu for Rs.18,92,30,000/- The above land has been sold by The above land has been sold by Shri.K.Palanisamy s/o Kulandaisamy Gounder, Periyavattam Village, Erode Shri.K.Palanisamy s/o Kulandaisamy Gounder, Periyavattam Village, Erode Shri.K.Palanisamy s/o Kulandaisamy Gounder, Periyavattam Village, Erode (PAN: BFIPP5270D) and purchaser being M/s. Hindusthan Educational (PAN: BFIPP5270D) and purchaser being M/s. Hindusthan Educational (PAN: BFIPP5270D) and purchaser being M/s. Hindusthan Educational Charitable Trust (PAN: AAATH2282D) acting throug Charitable Trust (PAN: AAATH2282D) acting through its Joint Secretary h its Joint Secretary Smt.K.Priya. However, no consideration was paid by the trust to Shri. K Smt.K.Priya. However, no consideration was paid by the trust to Shri. K Smt.K.Priya. However, no consideration was paid by the trust to Shri. K Palanisamy. It is claimed that the sale consideration was paid through cheque Palanisamy. It is claimed that the sale consideration was paid through cheque Palanisamy. It is claimed that the sale consideration was paid through cheque of City Union Bank, Ramnagar Branch to the assessee and his wife on the of City Union Bank, Ramnagar Branch to the assessee and his wife on the of City Union Bank, Ramnagar Branch to the assessee and his wife on the request of the seller. Out of the above sale consideration of Rs. 18,92,30,000/ he seller. Out of the above sale consideration of Rs. 18,92,30,000/ he seller. Out of the above sale consideration of Rs. 18,92,30,000/- , Rs. 14,46,30,000/- was paid to the assessee and Rs. 4,46,00,000/ was paid to the assessee and Rs. 4,46,00,000/- was paid was paid to her wife Smt. T.K.R Sarasuwathi. to her wife Smt. T.K.R Sarasuwathi.
In his reply, the assessee stated that the ownership of the property was 6. In his reply, the assessee stated that the ownership of the property was 6. In his reply, the assessee stated that the ownership of the property was with him only and he has claimed that the sale consideration belongs to him with him only and he has claimed that the sale consideration belongs to him with him only and he has claimed that the sale consideration belongs to him only. He has claimed that vide the unregistered memorandum of compromise only. He has claimed that vide the unregistered memorandum of compromise only. He has claimed that vide the unregistered memorandum of compromise he has obtained the ownership of the property. he has obtained the ownership of the property.
He has also stated that vide the assessment orders u/s 1 7. He has also stated that vide the assessment orders u/s 143(3) dated 43(3) dated 30.12.2018 and 143(3) r.w.s 153A dated 10.08.2021, the consideration 30.12.2018 and 143(3) r.w.s 153A dated 10.08.2021, the consideration 30.12.2018 and 143(3) r.w.s 153A dated 10.08.2021, the consideration received by the assessee from the trust has been treated as business income received by the assessee from the trust has been treated as business income received by the assessee from the trust has been treated as business income in the nature of adventure and taxed accordingly. in the nature of adventure and taxed accordingly.
8. The assessee has objected for invoking the pro 8. The assessee has objected for invoking the provisions of section 56(2)(vil) visions of section 56(2)(vil) of the Income Tax Act for receiving any sum of money without consideration. of the Income Tax Act for receiving any sum of money without consideration. of the Income Tax Act for receiving any sum of money without consideration. The assessee has argued that since the amount of Rs. 18,92,30,000/ The assessee has argued that since the amount of Rs. 18,92,30,000/ The assessee has argued that since the amount of Rs. 18,92,30,000/- has already been offered to tax, the same should not be taxed for a second time. already been offered to tax, the same should not be taxed for a second time. already been offered to tax, the same should not be taxed for a second time.
It is also gathered from records that, a sum of Rs. 25,14,24,600/ . It is also gathered from records that, a sum of Rs. 25,14,24,600/- has been has been added in the hands of M/s.Hindusthan Educational and Charitable Trust for the added in the hands of M/s.Hindusthan Educational and Charitable Trust for the added in the hands of M/s.Hindusthan Educational and Charitable Trust for the same year (AY 2016-17) as excess consideration. 17) as excess consideration.
After considering the material available on reco 10. After considering the material available on record and the reply of the rd and the reply of the assessee, I am satisfied that it is not a fit case for issue of notice u/s.148 of assessee, I am satisfied that it is not a fit case for issue of notice u/s.148 of assessee, I am satisfied that it is not a fit case for issue of notice u/s.148 of the I.T. Act. This order u/s.148A(d) is issued with the prior approval of the I.T. Act. This order u/s.148A(d) is issued with the prior approval of the I.T. Act. This order u/s.148A(d) is issued with the prior approval of DGIT(Inv), Chennai for the AY 2016 DGIT(Inv), Chennai for the AY 2016-17 as per the provisions of section 151(i 17 as per the provisions of section 151(ii) of the IT Act.
(emphasis supplied) (emphasis supplied)
Thus, from the above, it is noted that not only the AO from the above, it is noted that not only the AO from the above, it is noted that not only the AO, but his superior authorities including the DGIT(Inv), Chennai had agreed to the superior authorities including the DGIT(Inv), Chennai had agreed to the superior authorities including the DGIT(Inv), Chennai had agreed to the fact that, the ownership of the ownership of the impugned property for income for income-tax purposes was with Mr. TSRK, and that the sale consideration of Rs.18.32 with Mr. TSRK, and that the sale consideration of Rs.18.32 with Mr. TSRK, and that the sale consideration of Rs.18.32 crores belonged to him to him and that he being the right person was assessed and that he being the right person was assessed to tax in relation income from sale of the impugned property. Accordingly, to tax in relation income from sale of the impugned property. Accordingly, to tax in relation income from sale of the impugned property. Accordingly, we find that the Revenue had identified and alread we find that the Revenue had identified and already held Mr. TSRK to be y held Mr. TSRK to be the right person who is liable to be taxed, is liable to be taxed, in accordance ance to law, with respect to the income/gain arising from transfer of the impugned property the income/gain arising from transfer of the impugned property the income/gain arising from transfer of the impugned property vide registered Sale Deed dated 31.03.2016 and therefore, we agree with vide registered Sale Deed dated 31.03.2016 and therefore, we agree with vide registered Sale Deed dated 31.03.2016 and therefore, we agree with the Ld. AR that, the assessee was only party to the said Sale Deed to the assessee was only party to the said Sale Deed to the assessee was only party to the said Sale Deed to convey the title, as agreed in the terms of settlement convey the title, as agreed in the terms of settlement/compromise and compromise and that the sale consideration did not beneficially belong to him. that the sale consideration did not beneficially belong to him. that the sale consideration did not beneficially belong to him.
Our above findings Our above findings are also supported by another fact that, the also supported by another fact that, the Revenue taking note of Mr. TSRK being the actual owner of the impugned Revenue taking note of Mr. TSRK being the actual owner of the impugned Revenue taking note of Mr. TSRK being the actual owner of the impugned property who had sold property who had sold/transferred the same to M/s. Hindusthan transferred the same to M/s. Hindusthan Educational & Charitable Trust and not the assessee, had observed that, Educational & Charitable Trust and not the assessee, had observed that, Educational & Charitable Trust and not the assessee, had observed that, Mr. TSRK and M/s. Hindusthan Educational & Charita Mr. TSRK and M/s. Hindusthan Educational & Charitable Trust were ble Trust were related parties and that the impugned transaction was therefore in related parties and that the impugned transaction was therefore in related parties and that the impugned transaction was therefore in violation of Section 13(3) of the Act. Accordingly, accepting Mr. TSRK to violation of Section 13(3) of the Act. Accordingly, accepting Mr. TSRK to violation of Section 13(3) of the Act. Accordingly, accepting Mr. TSRK to be the owner/seller/transferor and the transferor and the equitable recipient of the recipient of the consideration from the purchaser, consideration from the purchaser, M/s. Hindusthan Educational & M/s. Hindusthan Educational & Charitable Trust, the income Charitable Trust, the income-tax assessment of M/s. Hindusthan tax assessment of M/s. Hindusthan Educational & Charitable Trust was also reopened and that aggregate sum Educational & Charitable Trust was also reopened and that aggregate sum Educational & Charitable Trust was also reopened and that aggregate sum of Rs.25,14,24,600/- was brought to tax, which included excess was brought to tax, which included excess consideration of Rs 9,68,11, consideration of Rs 9,68,11,750/- paid to Mr. TSRK by way of purchase paid to Mr. TSRK by way of purchase consideration, holding it to be in violation of Section 13(3) of the Act. consideration, holding it to be in violation of Section 13(3) of the Act. consideration, holding it to be in violation of Section 13(3) of the Act.
Upon query from the Bench, the Ld.AR clarified that, though the buyer of Upon query from the Bench, the Ld.AR clarified that, though the buyer of Upon query from the Bench, the Ld.AR clarified that, though the buyer of property, M/s. Hindusthan Educational & Charitable Trust, had conte property, M/s. Hindusthan Educational & Charitable Trust, had conte property, M/s. Hindusthan Educational & Charitable Trust, had contested the action of the Revenue, but had later on opted for amnesty scheme to the action of the Revenue, but had later on opted for amnesty scheme to the action of the Revenue, but had later on opted for amnesty scheme to settle the dispute and offered to tax the impugned addition under the settle the dispute and offered to tax the impugned addition under the settle the dispute and offered to tax the impugned addition under the Direct Tax Vivad Se Vishwas Scheme 2020. Direct Tax Vivad Se Vishwas Scheme 2020.
From the discussion (supra), we find that, not only had the Re From the discussion (supra), we find that, not only had the Re From the discussion (supra), we find that, not only had the Revenue brought the entire gains/profit arising from the transfer of property in brought the entire gains/profit arising from the transfer of property in brought the entire gains/profit arising from the transfer of property in question in the hands of Mr. TSRK, but treating him to be the owner/ question in the hands of Mr. TSRK, but treating him to be the owner/ question in the hands of Mr. TSRK, but treating him to be the owner/ seller had held the purchaser, M/s.Hindusthan Educational & Charitable seller had held the purchaser, M/s.Hindusthan Educational & Charitable seller had held the purchaser, M/s.Hindusthan Educational & Charitable Trust to have paid excess purchase co Trust to have paid excess purchase consideration, in violation of Section nsideration, in violation of Section 13(3) of the Act (since Mr. (since Mr. TSRK and M/s.Hindusthan Educational & Hindusthan Educational & Charitable Trust were related persons) were related persons) and had accordingly taxed the and had accordingly taxed the buyer as well. On these facts, we therefore hold that, the Ld. CIT(A) had buyer as well. On these facts, we therefore hold that, the Ld. CIT(A) had buyer as well. On these facts, we therefore hold that, the Ld. CIT(A) had factually erred in holding the assessee to be owner factually erred in holding the assessee to be owner/transferor of the transferor of the impugned property and taxing the gains/profit to tax in his hands, who impugned property and taxing the gains/profit to tax in his hands, who impugned property and taxing the gains/profit to tax in his hands, who undisputedly didn’t receive any sale consideration, and more particularly t receive any sale consideration, and more particularly t receive any sale consideration, and more particularly when Mr. TSRK was already held to be the person to whom the impugned when Mr. TSRK was already held to be the person to whom the impugned when Mr. TSRK was already held to be the person to whom the impugned property belonged to and the right person to whom the gain/profit from property belonged to and the right person to whom the gain/profit from property belonged to and the right person to whom the gain/profit from sale of property belonged to. Also, we agree with th sale of property belonged to. Also, we agree with the assessee, that if the e assessee, that if the action of AO is upheld, then in such a scenario, the Revenue would have action of AO is upheld, then in such a scenario, the Revenue would have action of AO is upheld, then in such a scenario, the Revenue would have to concede that it had wrongly assessed Mr. TSRK to tax as the to concede that it had wrongly assessed Mr. TSRK to tax as the to concede that it had wrongly assessed Mr. TSRK to tax as the transferor/owner of the impugned property and hence, refund the taxes transferor/owner of the impugned property and hence, refund the taxes transferor/owner of the impugned property and hence, refund the taxes to Mr. TSRK as well as the to Mr. TSRK as well as the buyer, M/s. Hindusthan Educational & buyer, M/s. Hindusthan Educational & Charitable Trust, as the assessee and the said Trust do not fall under the Charitable Trust, as the assessee and the said Trust do not fall under the Charitable Trust, as the assessee and the said Trust do not fall under the rigors/mischief of Section 13(3) of the Act, and therefore such of Section 13(3) of the Act, and therefore such of Section 13(3) of the Act, and therefore such reversal/action would certainly be prejudicial to the interest of Revenue. action would certainly be prejudicial to the interest of Revenue. action would certainly be prejudicial to the interest of Revenue.
In the light of the aforesaid facts, and in the peculiar facts of the In the light of the aforesaid facts, and in the peculiar facts of the In the light of the aforesaid facts, and in the peculiar facts of the present case, we are of the considered view that, the lower authorities present case, we are of the considered view that, the lower authorities present case, we are of the considered view that, the lower authorities were unjustified in taxing the assessee for the same transaction which is were unjustified in taxing the assessee for the same transaction which is were unjustified in taxing the assessee for the same transaction which is against principles of justice and fair p against principles of justice and fair play and tantamounts to triple lay and tantamounts to triple taxation, since the transfer of impugned property in question in the taxation, since the transfer of impugned property in question in the taxation, since the transfer of impugned property in question in the relevant AY has already suffered tax in the hands of Mr. TSRK, in the relevant AY has already suffered tax in the hands of Mr. TSRK, in the relevant AY has already suffered tax in the hands of Mr. TSRK, in the capacity of seller and also the buyer M/s. Hindusthan Educational & capacity of seller and also the buyer M/s. Hindusthan Educational & capacity of seller and also the buyer M/s. Hindusthan Educational & Charitable Trust for paying excess consideration to related party, Mr. r paying excess consideration to related party, Mr. r paying excess consideration to related party, Mr. TSRK u/s 13(3) of the Act; and thus, the impugned exercise of taxing the TSRK u/s 13(3) of the Act; and thus, the impugned exercise of taxing the TSRK u/s 13(3) of the Act; and thus, the impugned exercise of taxing the assessee again on the very same transfer of property is found to be assessee again on the very same transfer of property is found to be assessee again on the very same transfer of property is found to be excessive and unwarranted. Hence, for the aforesaid reasons, we excessive and unwarranted. Hence, for the aforesaid reasons, we excessive and unwarranted. Hence, for the aforesaid reasons, we are inclined to allow the appeal of the assessee and direct deletion of the inclined to allow the appeal of the assessee and direct deletion of the inclined to allow the appeal of the assessee and direct deletion of the impugned addition made by way of LTCG. impugned addition made by way of LTCG.
In the result, appeal filed by the assessee is allowed. In the result, appeal filed by the assessee is allowed. In the result, appeal filed by the assessee is allowed. Order pronounced on 25th March, 2025 at Chennai. Order pronounced on Sd/- Sd/ Sd/- (अिमताभ शु�ा) (एबी टी. . वक�) ) (AMITABH SHUKLA AMITABH SHUKLA) (ABY T. VARKEY ABY T. VARKEY) लेखासद�य/ACCOUNTANT MEMBER �याियकसद�य/JUDICIAL MEMBER /ACCOUNTANT MEMBER /JUDICIAL MEMBER