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Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI
Before: SHRI ABRAHAM P.GEORGE & SHRI GEORGE MATHAN
आदेश / O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER:
Smt.T.Kanniya Rani against the Order of the Commissioner of Income Tax (Appeals)-2, Chennai, in dated 30.09.2016 for the AY 2010-11 and ITA No.3358/Mds/2016 is an appeal filed by the assessee Smt.Amudha Anandh against the Order of the Commissioner of Income Tax (Appeals)-2, Chennai, in ITA No.68/CIT(A)-2/2015-16 dated 30.09.2016 for the AY 2010-11
2. Dr.S.Ganesan, JCIT, represented on behalf of the Revenue and Shri S.Sridhar, Adv., represented on behalf of the assessees.
As the assessees in both the appeals are interconnected, both the appeals are disposed off by this common order.
It was submitted by the Ld.AR that the two assessees had by two separate purchase documents dated 04.09.1986 had purchased 11 grounds and 653 sq.ft. (totally 27,053 sq.ft.) of the land at Tank Bunk Road, Nungambakkam, Chennai. The assessees had vide Joint Sale Deed sold the said part of the land to Mr.S.Palanichamy vide Sale Deed dated 17.09.2009. On an earlier occasion, both the assessees had executed an irrevocable registered Power of Attorney dated 14.09.1990 registered with the Sub-Registrar on 17.09.1990 granting irrevocable Power of Attorney & 3358/Mds/2016 :- 3 -:
to Shri S.Palanichamy. The assessees had disclosed the Capital Gains in respect of the transfer of the said land when filing their return of incomes for the AY 2002-03 which is shown at Page Nos.55 & 58 of the Paper Book. The said 27,053 sq.ft. of the land was sold as follows:
12,746 sq.ft. of the land was sold earlier.
The balance of 14,307 sq.ft. of the land was sold for a consideration of Rs.23,88,036/- and the Capital Gains offered during the AY 2002-03.
The returns filed by the assessees Smt.Amudha Anandh is on 22.07.2002 and in the case of Smt.T.Kanniya Rani is on 30.07.2002. The returns filed were processed and an intimation was issued u/s.143(1) dated 05.02.2003 in the case of Smt.T.Kanniya Rani, in the case of Smt.Amudha Anandh, the return was processed u/s.143(1) and the same was also subject to matter of rectification application u/s.154 dated 15.02.2005. It was a submission that in the rectification application the Capital Loss declared by the assessee on account of the transfer of the 14,307 sq.ft. of the land has also been recognized. It was a submission that as the 12,746 sq.ft. which was earlier sold, had been constructed and the residents of the said flats had demanded right of way out of the balance of 14306 sq.ft., 3327 sq.ft. of path way had been given and the balance of 10,979 sq.ft. had been registered in the name of Shri S.Palanichamy vide Sale Deed dated 17.09.2009. The Ld.AR drew our attention to the copy of the Sale Deed executed on 17.09.2009 wherein the details of the total land holdings and the break up are fully extracted.
It was a submission that the AO on the ground that the sale had been & 3358/Mds/2016 :- 4 -: registered in 2009 brought to tax, the Capital Gains on transfer of the 14,307 sq.ft. of the land by applying the provisions of Sec.50C of the Act.
It was a submission that the property having already been transferred by a registered Power of Attorney and possession in respect of the said land having been handed over to Shri S.Palanichamy through the registered irrevocable Power of Attorney, the Capital Gains was not liable to be assessed for the AY 2010-11. It was also a submission that as the Capital Gains in respect of the transfer of the portion of the land had already been offered during the AY 2002-03 and the same having been accepted, the same transaction could not be taxed again in the AY 2010-11, just because, the Sale Deed was registered only during the said assessment year. The Ld.AR placed reliance on the decision of the Hon’ble Supreme Court in the case of Shri Balbir Singh Maini in Civil Appeal No.15619 of 2017 dated 04.10.2017 wherein it has been held that u/s.53A of the Transfer of Property Act once irrevocable Power of Attorney stands registered and the possession had been handed over and the consideration received, then the transfer should be completed. It was a submission that in the present case, the transfer was by registered Power of Attorney, the possession of the property had already been handed over to Shri S.Palanichamy and the consideration had already been received and the same had also been offered for Capital Gains tax during the AY 2002-03 and the same had already been accepted. It was a submission that the levy of Capital Gains by the AO in respect of the same transaction for the impugned assessment year was liable to be deleted. & 3358/Mds/2016 :- 5 -:
In reply, the Ld.DR vehemently supported the order of the AO and the Ld.CIT(A).
7. A perusal of the Assessment Order shows that the AO has brought to tax the Capital Gains in respect of the transfer of the 14,307 sq.ft. of the land by applying the provisions of Sec.50C for the AY 2010-11 on the main ground that the assessee had not been able to produce any documentary evidence, any proof of the transaction claimed, to have taken place during the year 2002. A perusal of the order of the Ld.CIT(A) shows that the Ld.CIT(A) has held that the assessees did not release the rights over the land admeasuring 14,307 sq.ft. of the land in March, 2002.
The Ld.CIT(A) has taken recourse to the decision of the Hon’ble Jurisdictional High Court in the appeal filed by the assessees in OS No.570 of 1998 dated 11.12.2003 wherein the Hon’ble Jurisdictional High Court has held that both the assessees are entitled for separate possession of 14,307 sq.ft. of the land. However, the AO & the Ld.CIT(A), it is noticed that has failed to take into consideration, the fact that the registered irrevocable Power of Attorney has been executed by both the assessees in favour of Shri S.Palanichamy and the possession in respect of the said land has been handed over to Shri S.Palanichamy and the assessees had received the consideration and had offered the same to tax during the year 2002. This being so, in view of the principles laid down by the Hon’ble Supreme Court in the case of Shri Balbir Singh Maini referred to supra, it is held that the Capital Gains, if any, in respect of the transfer of & 3358/Mds/2016 :- 6 -: the 14,307 sq.ft. of the land is assessable only during the year 2002 as has been rightly disclosed by the assessee in their returns for the AY 2002-03. Even otherwise, a perusal of the proviso to Sec.50C(1) inserted by Finance Act 2016 w.e.f. 01.04.2017 clearly admits that the provisions of Sec.50C are not to apply in the event that the date of agreement fixing the amount of consideration and the date of registration for transfer of the capital asset are not the same, then the value adopted or assessed or assessable by Stamp Valuation Authority on the date of agreement, may be taken for the purpose of computing the full value of the consideration of such transfer subject to conditions. In the present case, admittedly, the Power of Attorney is considered as the agreement and the Sale Deed executed are in two different assessment years and the consideration having already been received by the assessee on the execution of the irrevocable registered Power of Attorney and the same having been offered to tax during the AY 2002-03, the provisions of Sec.50C itself cannot be brought to play in the case of the assessees.
In the result, the appeals filed by both the assessees are allowed.
Order pronounced in the Open Court on December 06, 2017, at Chennai.