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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI MAHAVIR PRASAD & SHRI B.M. BIYANI
This appeal filed by the assessee is directed against the order dated 25.02.2015 of learned Commissioner of Income-Tax (Appeals), [“Ld. CIT(A)”] Bhopal, which in turn arises out of the order of assessment dated 15.03.2013 passed by the learned ITO-1(2), Bhopal [“Ld. AO”] u/s 147 read with section 143(3) of the Income-tax Act, 1961 [“the Act”] for Assessment-Year 2009-10, on the following grounds:
“1. That on the facts and in the circumstances of the case, the impugned order passed by the Ld. Lower authorities is contrary to Page 1 of 7
Smt. Yashoda Sisodia A.Y. 2009-10 law, materially incorrect and unsustainable in law as well as on facts. All the finding and conclusion of the Ld. AO are also contrary to the material, opposed to the facts, equity and law.
2. That on the facts and in the circumstances of the case, the Ld. Lower authorities have erred and were not justified in invoking the provisions of section 147/148 and thereby reopening assessment for applying the provision of section 50C of the IT Act. The aforesaid action on the part of the Ld. Lower Authorities are bad and visited in law.
3. That on the facts and circumstances of the case the lower authorities were not justified in not accepting the sale consideration of Rs. 91,00,000/-. The Ld. Lower Authorities have erred in taking the sale consideration of Rs.1,56,64,000/- as mentioned in the deed of sale. The consideration-receipt of Rs. 91,00,000/- at time of possession given by the appellant should have been accepted.
4. That on the facts and in the circumstances of the case and in law as well as the Ld. CIT(A) has erred in not considering the submission judicially. Therefore the impugned order is bad in law.
That the appellant craves leave to add, alter, and amend or to modify any grounds on or before the date of hearing.”
The assessee is an individual. Originally the return of income of the relevant assessment year 2009-10 was filed on 30.07.2009 declaring a total income of Rs. 10,560/- which was processed u/s 143(1) of the act. Subsequently, the Ld. AO received an information that the assessee had sold an agricultural land situated in village – Halalpur, Tehsil Huzur, Bhopal, on 31.03.2009 for Rs. 91,00,000/- whose value assessed by Stamps Authority was Rs. 1,56,64,000/-. The Ld. AO observed that the capital gain resulting from the transaction of sale was not offered for taxation and accordingly the Ld. AO re-opened assessment by issuing notice u/s 148 dated 29.07.2011. Thereafter the statutory-notices u/s 143(2) & 142(1) of the Act were issued from time to time and the assessee Page 2 of 7
Smt. Yashoda Sisodia A.Y. 2009-10 complied with. Finally, the Ld. AO completed assessment at total income of Rs. 68,87,674/- after making certain additions including an addition of Rs. 68,70,843/- on account of the long-term capital gain from impugned transaction of sale of land. Against the order of Ld. AO, the assessee filed an appeal to Ld. CIT(A). However, Ld. CIT(A) dismissed assessee’s claim and did not grant any relief. Aggrieved by order of Ld. CIT(A), the assessee has preferred this appeal and now before us.
At the start of hearing, Ld. AR carried our attention to the Written- Synopsis submitted by him wherein he has requested for not pressing Ground No. 1 and 2. Ld. DR did not object this request of Ld. AR. Therefore, Ground No. 1 and 2 are treated as withdrawn. It is further observed that Ground No. 5 is a general ground and does not require any adjudication. Therefore, the effective grounds for adjudication by us are Ground No. 3 and 4 only, which we proceed to decide.
Ground No. 4:
We first take up Ground No. 4 wherein the assessee has claimed that the Ld. CIT(A) has erred in not considering the submissions judicially.
5. Ld. AR drew our attention to the order of Ld. CIT(A) and pointed out that the assessee has made a detailed submission before Ld. CIT(A) to demonstrate that the impugned capital gain, as taxed by Ld. AO, was not taxable in the assessment-year 2009-10 under consideration for the reason that the assessee had sold the subject-land in an earlier year i.e. the previous year 2007-08 relevant to the assessment-year 2008-09 itself and the resultant capital gain had already been taxed by department in the assessment year 2008-09. But the Ld. CIT(A) has confirmed the action of Ld. AO without considering the submissions of assessee judicially.
Ld. AR explained that the subject-land was sold through “Agreement to Sale” dated 05.08.2007 followed by “Sale-cum-Possession Agreement” dated 13.12.2007 and copies of both of these agreements were filed to the lower authorities and are also placed in the Paper-Book. Drawing our
Smt. Yashoda Sisodia A.Y. 2009-10 attention to Page No. 2 of the “Agreement to Sale” dated 05.08.2007, Ld. AR demonstrated that the land was sold for a sum of Rs. 91,00,000/-, out of which a sum of Rs. 30,00,000/- was received through cheques on 26.09.2007 to 04.10.2007 as advance-payment. Thereafter, referring to the “Sale-cum-possession Agreement” dated 13.12.2007, Ld. AR submitted that the entire consideration of Rs. 91,00,000/- was received on various dates during 26.09.2007 to 06.12.2007 and the possession was also handed over to the buyer on 13.12.2007. Ld. AR submitted that the “Sale-cum-possession Agreement” dated 13.12.2007 contains various covenant including (i) complete details of the receipt of Rs. 91,00,000/- according to which the entire payment was paid / received through cheques only, (ii) a categorical averment that the entire consideration of Rs. 91,00,000/- had been received and nothing remained outstanding to be paid / received, and (iii) a categorical averment that the possession of the land had been handed over to the buyer. Thus, according to the Ld. AR, the subject-land had already been sold on 13.12.2007, falling within the previous year 2007-08, relevant to the assessment-year 2008-09. Therefore, the assessee offered the resultant capital gain in the return of income of assessment-year 2008-09 and paid tax by way of advance-tax / self-assessment. Ld. AR also submitted that the department had also accepted the capital gain and tax liability declared by the assessee and also given the credit of taxes paid by the assessee. Ld. AR submitted that, this way, the department has already taxed the transaction in assessment-year 2008-09 itself. Ld. AR submitted that the execution of sale-deed was, however, kept pending by the parties and finally got done on 31.03.2009 and therefore, the Ld. AO has re-taxed the same transaction in the assessment-year 2009-10, which is nothing but double taxation of the same transaction. With these submissions, the Ld. AR prayed to delete the addition made by Ld. AO.
Per contra, Ld. DR justified the action of lower authorities. Referring to the orders of lower authorities, Ld. DR emphasised following contentions:
Smt. Yashoda Sisodia A.Y. 2009-10 (i) The assessee has not submitted the original copy of the aforesaid “Sale-cum-possession Agreement” dated 13.12.2007 to the lower authorities and hence the lower authorities were not able to verify the genuineness of the agreement.
(ii) Even if the capital gain had already been taxed in the assessment- year 2008-09, it might have happened by way of proceeding u/s 143(1).
(iii) In any case, the capital gain is rightly taxed in the assessment-year 2009-10 under consideration because the agreement on the basis of which the land is claimed to have been sold was an unregistered document which cannot effectuate “transfer” within the meaning of section 2(47) of the act in the assessment-year 2008-09. Hence the transfer happened on 31.03.2009, when the sale-deed was executed, and therefore capital gain was rightly taxed by Ld. AO in the assessment-year 2009-10.
In rejoinder, the Ld. AR of assessee submitted that the assessee is having original copy of the agreement dated 13.12.2007 and ready to produce the same for the consideration of lower authorities.
We have considered rival contentions of both sides and perused the material held on record. We observe that both sides agree that the assessee has sold land and earned capital gain. There is no dispute about this basic aspect. However, the only dispute is with regard to the year in which the transaction was taxable, i.e. whether assessment-year 2008-09 or 2009-10. While the assessee has declared capital gain in assessment- year 2008-09 on the basis of “Sale-cum-possession Agreement” dated 13.12.2007, the Ld. AO has taxed the transaction in assessment-year 2009-10 on the basis of “Sale-deed” dated 31.03.2009. On a careful consideration of the orders of lower authorities, we observe that the lower authorities have doubted the genuineness of the “Sale-cum-possession Agreement” dated 13.12.2007 because the original copy of the agreement was not produced. However, as committed by Ld. AR, the assessee is Smt. Yashoda Sisodia A.Y. 2009-10 having in her possession and is also willing to produce the original agreement for verification of authorities. We further find merit in the claim of Ld. AR that the resultant capital gain had already been offered in the assessment-year 2008-09, taxes have been paid thereon and the department has also assessed the same as offered by the assessee. This important factor also deserves attention, particularly owing to the legal principle that the same income cannot be taxed twice. Therefore, we are of the considered view that the matter should be sent back to the Ld. AO himself who can verify the original-agreement as also the claim of assessee that the transaction has already been taxed in assessment-year 2008-09 or not. Accordingly, we remand this issue to the Ld. AO, who shall give a reasonable opportunity to the assessee to produce the relevant documents, verify the same and thereafter decide the issue afresh in accordance with the applicable provisions of law and judicial precedents.
Ground No. 3:
In this Ground, the assessee has claimed that the lower authorities were not justified in not accepting the sale consideration of Rs. 91,00,000/-. The Ld. lower authorities have erred in taking the sale consideration of Rs. 1,56,64,000/- as mentioned in the deed of sale. The consideration-receipt of Rs. 91,00,000/- at time of possession given by the appellant should have been accepted.
It is observed that the valuation of Rs. 1,56,64,000/- is mentioned on the back of Page No. 1 of the registered sale-deed dated 31.03.2009, which demonstrates that the valuation of Rs. 1,56,54,000/- was prevailing on 31.03.2009 and not on 13.12.2007 on which the assessee is claiming to have sold the subject-land. Since we have remanded Ground No. 4 back to the Ld. AO, the Ld. AO would make a fresh adjudication of the whole issue, which would also take care of the grievance involved in the Ground No. 3. Needless to mention that the Ld. AO would take into account the impact of section 50C.
Smt. Yashoda Sisodia A.Y. 2009-10 12. In the result, this appeal of assessee is allowed for statistical purpose.
Order pronounced as per Rule 34 of I.T.A.T. Rules 1963 on 18.08.2022.