THE ITO, WARD-1, , TENALI vs. SMT KOGANTI VIJAYA KUMARI L/H OF LATE KOGANTI BHAVANI SANKAR, TENALI

We have heard both the sides and perused material available on record as well as the orders of the Ld. Revenue Authorities and also the written submissions made by the Ld. DR and the Ld. AR. It is the case of the Ld. AO that the impugned sale transaction has suffered various legal disputes including the dispute with the GPA holder leading to cancellation of GPA and subsequently entered into a MoU and execution of Ratification Deed with the purchasers and GPA holder. The Ld. AO observed that the final transaction was evidenced on the registration of sale deed during the FYs 2008-09 and 2009-10 for a total consideration of Rs. 4,70,35,000/-. The Ld. AO therefore based on the sale deed registered on 25/02/2009 vide Document No. 527 & 528 of 2009 arrived at a total consideration of Rs. 16.37 Crs as per the provisions of section 50C of the Act and computed 1/4th share to the assessee at Rs. 4,09,25,000/- as LTCG taxable in the AY 2009-10. There is merit in the written submissions made by the Ld. DR that when the actual possession of 07 Acres has been handed over to the purchaser M/s. NDL Infra Tech Private Limited why the agreement of sale-cum-GPA dated 5/9/2006 was executed for 4.16 Acres. Further, the assessee has also not admitted the capital gains during the AY 1996-97 wherein it was contested by the assessee that the transfer took place during the AY 1996-97. The assessee himself has admitted the capital gains during the AY 2009-10 and 2010-11 based on the sale consideration received from the purchaser subsequent to the Ratification Deed. From the recitals of the Ratification Deed executed on 30/12/2010, it is clear that the transfer of title and handing over the possession of the property to M/s. NDL Infra Tech Private Limited is during February, 2009 and April, 2009 only and not during the AY 1995-96. The Ld. AO therefore has rightly concluded that the transfer and possession of the property was handed over during the FY 2008-09 and 2009-20 and has computed the capital gains accordingly by applying the provisions of section 50C of the Act. There is no merit in the argument of the Ld.AR that the transfer took place in the FY 1995-96 wherein the assessee himself has voluntarily admitted capital gains during the AY 2009-10 and 2010-11 consequent to the registration of sale deed in favour of the purchaser M/s. NDL Infra Tech Private Limited. Since the transaction stood concluded in the FY 2009-10 and 2010-11, the provisions of section 50C shall be applicable and accordingly, the Ld. AO has invoked these provisions for the computation of capital gains. The decision of the Coordinate Bench of ITAT, Bangalore relied on by the Ld. AR in the case of Ayi Vaman Narasimha Acharya (supra)j is not binding on us being SMC Bench decision. Further, with respect to the decision of the Hon’ble Supreme Court relied on by the Ld. AR in the case of Gurbax Singh vs. Kartar Singh & Ors (supra), we find that the facts are distinguishable as the case was relating to the execution of the sale deed and the date of registration. In the case on hand, the agreement to sell was executed in the year 2006 which was registered in the year 2008 and hence the decision could not be applied in the instant case. As per the return of income filed by the assessee, we find that the grievance of the assessee is not with respect to computation of capital gains but with respect to the applicability of the provisions of section 50C of the Act. Admittedly, the original agreement of sale deed entered into in 1995, in our opinion, appears to be an afterthought of the assessee to overrule the provisions of section 50C of the Act. The agreement-cum-sale deed dated 20/11/1995 is also unregistered and was never produced before the Ld. Revenue Authorities. Hence, we are of the considered view that the Ld. CIT(A) has erred in relying on the unregistered document for determining the year of incidence of capital gains of the assessee. We therefore have no hesitation to set-aside the order of the Ld. CIT(A) by restoring the order of the Ld. AO thereby allowing the grounds raised by the Revenue.

In the result, appeal (ITA No. 161/Viz/2020) of the Revenue is allowed.

With respect to the other three appeals ie., 163 & 164/Viz/2020), since the issues raised by the Revenue in all these appeals are identical, considering the similar facts and circumstances of the case in all these four appeals, our decision given on the issues raised in ITA No.161/Viz/2020 mutatis mutandis applies to the other three appeals ie., ITA Nos. 162, 163 & 164/Viz/2024 also. Accordingly, the grounds raised by the Revenue in these appeals are allowed.

Ex-consequenti, all the appeals of the Revenue are allowed.