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Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’, NEW DELHI
Before: Sh. N. K. Saini
ORDER These three appeals by the assessees are directed against the separate orders each dated 24.02.2017 of ld. CIT(A)-I, Noida. to 3569/Del/2017 2 Mithlesh Dabas, Mithlesh Devi & Kushum Lata 2. Since the issues involved are common in all these appeals which were heard together so these are being disposed off by this common order for the sake of convenience and brevity.
At the first instance, we will deal with the appeal in in the case of Mithlesh Dabas. The only grievance of the assessee in this appeal relates to the sustenance of addition of Rs.8,16,750/- being 1/4th of Rs.32,67,000/- i.e. the sale deed value of land amounting to Rs.30,25,000/- and stamp duty of Rs.2,42,000/-.
Facts of the case in brief are that the assessee did not file her return of income. The AO on the basis of information received from CIB relating to sale of the immovable property valued at Rs.30,25,000/-, issued notice u/s 148 of the Income Tax Act, 1961 (hereinafter referred to as the Act). Since, no return of income was filed by the assessee in response to the aforesaid notice, the AO framed the assessment u/s 144 of the Act and made the addition of Rs.30,25,000/- by observing in para 3 of the assessment order dated 03.03.2016, as under: “3. As the case is barred by limitation and in the absence of supporting material the case will be decided on merits and Rs.30,25,000/- will be treated as undeclared income of the assessee and addition of Rs.30,25,000/- will be made to assessee’s income. Considering the fact that the assessee furnished neither any return of income nor any written reply it is presumed that the assessee has wilfully concealed the facts on the purchase of above mentioned property. to 3569/Del/2017 3 Mithlesh Dabas, Mithlesh Devi & Kushum Lata Therefore, the penalty proceedings u/s 271(1)(c) of the Act are being initiated separately regarding concealing the particulars of income.” (Addition of Rs.3025000/-) 5. Being aggrieved the assessee carried the matter to the ld. CIT(A) and submitted that the transfer of land by Sh. Desh Raj in favour of the assessee was a family settlement by the father- in-law in favour of his four daughters-in-law and there was no purchase of the subject agricultural land involved. It was further submitted that the entire value of transaction was Rs.32,67,000/- being Rs.30,25,000/-, the value of land and Rs.2,42,000/-, the stamp duty paid by the assessees for transfer of subject agricultural land in their favour. It was further submitted that in case of forth daughter-in-law being Smt. Saroj Devi wife of Sh. Madan Singh, the concerned AO has accepted the transaction and had not taken action against her in the same facts and in the same transaction.
6. The ld. CIT(A), however, did not find merit in the submissions of the assessee by observing in paras 5 to 10 of the impugned order as under: “5. The Deed of Transfer by which the subject agricultural land was transferred by Sh. Deshraj being the father in law in favour of the appellants being his three daughters in law and Smt. Saroj Devi, the fourth daughter in law was called for and examined.
The subject deed of transfer is titled Vikraya Patra which translated in English will be Sale Deed. A family settlement cannot be called Sale Deed. The title of the Transfer Deed notwithstanding the said Transfer Deed will clearly record that the transferor, i.e., Sh. Desh Raj is unfettered owner of the subject agricultural land and has sold it to the transferees, i.e., Smt. Saroj Devi, Smt. Kushum Lata, Smt. Mithlesh Devi and Smt. Mithlesh Dabas and has received the full consideration of Rs.30,25,000/- from the purchases being the four transferees in the presence of the witnesses and nothing remained further realizable by him.
In view of the clear recital to the effect that the transferor has sold the subject agricultural land to the transferees and has also received the entire sale consideration of Rs.30,25,000/- the claim of the appellants that the transaction was a family settlement is not maintainable. The admitted document which is registered with the concerned authority and is the document created by the parties records the transaction to be sale and therefore, the transaction is to be treated as sale only and the Id. A.O's acted correctly in treating the transaction to be sale. No interference is therefore called for on this issue. 8. However, it is seen that the Id. A.Os had treated the entire investment of Rs.30,25,000/- in the hands of Smt. Mithlesh Devi as well as in the hands of Smt. Mithlesh Dabas and the ld. A.O. in the case of Smt. Kusum Lata has added the amount of Rs.7,66,250/- being one fourth of the cost of the land. None of the AOs have added the stamp duty of Rs.2,40,000/- paid by the appellants and Smt. Saroj Devi.
ITA Nos. 3567 to 3569/Del/2017 5 Mithlesh Dabas, Mithlesh Devi & Kushum Lata 9. Therefore, while the AOs were correct in treating the transaction to be sale in the cases of Smt. Mithlesh Devi, Smt. Mithlesh Dabas and Smt. Kusum Lata the A.O. in the case of Smt. Saroj Devi was wrong in not taking any action at all. Therefore, the correct value of investment being Rs. 32,67,000/- is to be treated as money paid by the four sisters in law to Shri Deshraj for purchase of the subject agricultural land and the said investment is to be equally divided in the hands of these four sisters in law. The individual share of the each sisters in law will be Rs. 8,16,750/-.
10. The quantum of addition in the case of Smt. Mithlesh Devi and Smt. Mithlesh Dabas is therefore reduced to Rs. 8,16,750/- in the place of Rs. 30,25,000/- each and in the case of Smt. Kusum Lata is enhanced to Rs. 8,16,750/- in the place of Rs. 7,56,250/-. In the case of forth sister in law Smt. Saroj Devi where no action has been taken by the concerned A.O. the concerned Range incharge is directed to look into the matter and do the needful to protect the interest of Revenue. For the record the provisions of Article 14 of the Constitution does not extend to reverse discrimination. There cannot be equality in a negative sense. Merely, because the concerned A.O. has failed to lawful action in the case of Smt. Saroj Devi, the other assessees being party to the same transaction and the present appellants cannot claim that they too should be allowed to avoid paying tax on their income.”
7. Now the assessee is in appeal. The ld. Counsel for the assessee reiterated the submissions made before the authorities below and drew our attention towards page nos. 58 & 59 of the assessee’s paper book which is the copy of an affidavit furnished by Sh. Desh Raj Singh stating therein that the to 3569/Del/2017 6 Mithlesh Dabas, Mithlesh Devi & Kushum Lata subject agricultural land was transferred by him to her four daughters-in-laws in equal ratio because the behavior of his sons was not good due to their conflicts. He has also stated that he was not aware of the rules relating to Income Tax Department and that he had not taken any amount for making the sale deed which was made to resolve the conflicts between the sons. When a specific query was raised relating to the said affidavit, the ld. Counsel for the assessee admitted that the said affidavit was not available to the AO who passed the ex- parte order and that no cognizance was taken by the ld. CIT(A) to the said affidavit although it was furnished before him.
In his rival submissions, the ld. DR strongly supported the orders of the authorities below.
I have considered the submissions of both the parties and perused the material available on the record. In the present case, it an admitted fact that the AO passed the ex-parte order for the reason that it was going to become time barred, so it is clear that no opportunity of being heard was given to the assessee. It is also not in dispute that the affidavit of Sh. Desh Raj who transferred the land to his four daughters-in-law was not considered by the ld. CIT(A). I, therefore, considering the totality of the facts, deem it appropriate to set aside this issue to 3569/Del/2017 7 Mithlesh Dabas, Mithlesh Devi & Kushum Lata back to the file of the AO to be adjudicated afresh in accordance with law after providing due and reasonable opportunity of being heard to the assessee.
The facts in another appeals i.e. & 3569/Del/2017 relating to Smt. Mithlesh Devi and Smt. Kushum Lata are identical to the facts involved in the case of Smt. Mithlesh Dabas in ITA No. 3567/Del/2017 which I have already adjudicated in the former part of this order. Therefore, the findings given in respect of Smt. Mithlesh Dabas shall apply mutatis mutandis in the cases of Smt. Mithlesh Devi and Smt. Kushum Lata.
In the result, the appeals of the assessees are allowed for statistical purposes. (Order Pronounced in the Court on 10/11/2017)