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Income Tax Appellate Tribunal, DELHI BENCH: ‘SMC-II’ NEW DELHI
Before: SMT DIVA SINGH
ORDER The present appeal has been filed by the assessee assailing the correctness of the order dated 14.06.2016 of CIT(A)-I, Noida pertaining to 2007-08 assessment year on various grounds including Ground No.-2 wherein it is agitated that the Commissioner(Appeals) while passing the order failed to decide Ground No.3 before him.
An adjournment petition has been moved on behalf of the Revenue stating that the Ld. Sr. DR is on leave. Considering the material available on record and the submissions of the Ld. AR, the adjournment request was rejected. The relevant facts of the case are that the assessee in the year under consideration declared an income of Rs.1,57,025/-. After issuance of notice u/s 148 of the I.T. Act, 1961, the AO passed an order u/s 147/143(3) holding that the specific property No.B-95, Sector-39, Noida was sold on 15.06.2006 made an addition u/s 50C of Rs.18,17,550/- considering the stamp duty difference on the said date.
The assessee carried the issue in appeal before the First Appellate Authority. Relying on the submissions before the AO, it was submitted that the property stood transferred on 25.06.1999 and only the sale deed was registered on 25.06.2006. It was submitted that the Noida Authorities allotted residential plot No.95 (area measuring 162 sq. Mtrs.), Block-B, Sector-39, Noida, Gautam Budha Nagar, U.P to Sh. J.K.Aggarwal. The allotment it was stated was conditional and among the various conditions there was a condition that the said allotment will not be eligible for transfer up to a certain period. The allotment it was I.T.A .No.-4564/Del/2016 Neelam Sharma vs ITO
Page 2 of 3 submitted was by way of a lease and not by sale. The allottee, it was submitted entered into an agreement to sell in favour of Sh. N.K.Sharma, husband of the assessee. Apart from that, the allottee also executed the general of Power of Attorney in respect of said plot in favour of the assessee; a Special Power of Attorney in favour of the assessee and also a Will bequeathing the said plot in favour of the Sh. N.K. Sharma i.e the husband of the assessee.
Considering the submissions, the CIT(A) concluded that the Sh.J.K.Aggarwal was not the owner of the plot and thus he could not have sold the plot. Thus, Agreement to Sell dated 25.06.1999 executed by Sh.J.K. Aggarwal in favour of Sh. N.K.Sharma, it was considered had no meaning in law as he was only a lease holder and as a result, the addition was confirmed. The assessee is in appeal by the said order.
The Ld.AR appearing on behalf of the assessee submitted that the conclusion drawn by the CIT(A) that Sh.J.K.Aggarwal had no authority to enter into an Agreement to Sell was wrong and if it was true then how the Noida Authorities have transferred the said plot in the name of Sh.N.K.Sharma. Accordingly, it was his prayer that the impugned order be set aside not only on the ground that Ground No.3 before the CIT(A) has not been decided which is Ground No.2 in the present proceedings but also on the ground that there are factual inaccuracies and wrong presumptions drawn by the CIT(A).
I have heard the submissions of the Ld.AR and perused the material available on record. I find that the Ld. Commissioner while considering the issues before him mis-directed himself in drawing the conclusion. The primary document i.e. the allotment letter of Noida Authority in favour of the assessee/Sh.N.K.Sharma is required to be seen and considered. In case the tax authorities wanted to ascertain the status of Sh.J.K.Aggarwal who executed the Agreement to sell; G.P.A and SPA alongwith WILL in favour of the assessee/and or his wife exhibiting his intent to transfer the leasehold rights of the specific property then enquiry either from Noida Authority or the primary document should have been considered. The issue for consideration before the Ld. Commissioner was whether addition resorting to Section 50C was maintainable or not in view of the peculiar facts that the specific property on payment of I.T.A .No.-4564/Del/2016 Neelam Sharma vs ITO
Page 3 of 3 Rs.7,50,000/- was allegedly sold on 25.06.1999. In support of the said claim, Agreement to Sell was relied upon by the assessee. The assessee has stated that the transfer was effected on the expiry of the specific period which banned the sale of the allotted property as a result of this ban the Registration of the sale was concluded on 15.06.2006 by the assessee’s wife as GPA holder of Sh.N.K.Sharma. The fact that the sale consideration to Sh. J.K.Agarwal was made on 25.06.1999 and thus whether addition u/s 50C in the circumstances was maintainable or not, it is seen remains undecided. The issue whether Sh.J.K.Aggarwal had any right to execute the Agreement to Sell. GPA, SPA etc. was not an issue for consideration before the CIT(A). As noted even if this fact was considered to be a relevant fact for determining the maintainability of the addition u/s 50C then the primary documents should have been sought from the Noida Authority. Moreover, the fact the Ground No.3 remained undecided is evident on record. Accordingly, in the absence of any representation on the part of the Revenue to defend the order and considering the short-comings in the impugned order, the issue is set aside back to the file of the AO as required directing the said authority to pass a speaking order in accordance with law after giving the assessee a reasonable opportunity of being heard. If need be, the assessee would be at liberty to file fresh evidence in support of its claim.