AKUNURI SAI AVINASH,VISAKHAPATNAM vs. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE (INTERNATIONAL TAXATION), VISAKHAPATNAM
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Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH, VISAKHAPATNAM
Before: SHRI DUVVURU RL REDDY, HON‟BLE & SHRI S BALAKRISHNAN, HON‟BLE
Per contra, the Ld. DR submitted that as per the Transfer of Property Act, section 54 defines “sale”. It states that “such
6 transfer, in the case of tangible immoveable property of the value of one hundred rupees and upwards, or in the case of a reversion or other intangible thing, can be made only by a registered instrument.” Further, the Ld. DR also relied on the case of Hon‟ble High Court of Madras in the case of R. Krishnaswamy vs. CIT [2014] taxmann.com 177 (Madras). The Ld. DR therefore pleaded that the capital gains should be subjected to tax in the AY 2016-17 and thereby the directions of the Ld. DRP may please be upheld.
We have heard both the sides and perused the material available on record and the orders of the Ld. Revenue Authorities. It is the case of the Ld. AO whether the sale deed was registered on 11/5/2015 as per the sale deed copy submitted in page No.1 of the paper book. Even though the sale deed was executed on 3/3/2015, the document was registered on 11/5/2015. Further, from the recitals of the sale deed, we find that the agreed sale consideration of Rs. 14,85,000/- was paid by way of cash on various occasions. However, the sale deed failed to mention the date of payment made by the purchaser of the property. The case relied on by the Ld. AR on the ratio laid down by the Hon‟ble Supreme Court in the case of Kanwar Raj Singh (D) Th. LRs vs. GEJO (D) Th. LRs & Ors (supra), it is clear that if the consideration is paid on the date of execution of sale deed the
7 registered sale deed will operate from the date of its execution. However, in the instant case, the date of payment of consideration was not mentioned in the sale deed and hence the case relied on by the Ld. AR is of no assistance to him. In the case relied on by the Ld. DR, the Hon‟ble Madras High Court in the case of R. Krishnaswamy vs. CIT (supra) has held as follows:
“In the absence of any part performance as contemplated under section 53A of the Transfer of Property Act, 1882 and as pointed out by the Supreme Court in the case of Suraj Lamp & Industries (P.) Ltd vs. State of Haryana [2012] 340 ITR 1 / [2011] 302 Taxman 607/14 taxmann.com 103, registration of sale deed alone completes the transfer….”
Further, section 54 of the Transfer of Property Act, 1882 as pointed out by the Ld. DR also states that in the case of tangible immovable property transfer can be made only by a registered instrument. In view of the foregoing judicial pronouncements as discussed above and also considering the facts and circumstances of the case, we hereby uphold the directions of the Ld DRP in directing the Ld. AO to compute the capital gains based on the date of registration of the sale deed which is in the instant case AY 2016-17. Accordingly, we hereby dismiss the Grounds No. 3 & 4 raised by the assessee.
8 9. With respect to Ground No.5, the Ld. AR argued that the Ld. DVO has valued the property at Rs. 33,49,000/- by adopting the rate of Rs. 1446/- per sq. yd. The Ld. AR further submitted that the Ld. DVO has hypothetically added 45% of the value of Rs. 1446/- amounting to Rs. 651/- per sq. yd stating that the property is well connected and the size of the plot is regular and large size. The Ld. AR strongly objected to this hypothetical addition and pleaded that this addition may be deleted.
Per contra, the Ld. DR relied on the valuation report of the Ld. DVO.
We have heard both the sides and perused the material available on record and the orders of the Ld. Revenue Authorities. On perusal of the analysis of fair market value of the Ld. DVO, we find that the Ld. DVO has adopted the amount of Rs. 1446/- per sq. yd. Additionally, he had added 45% as the subjected property was well connected and the size of the plot is regular shape and large size. We find merit in the argument of the Ld. AR that this hypothetical valuation is not valid in law as it is not calculated based on any scientific basis. Further, we also find that the Ld. DVO has not given any valid reason for computing the additional 45% on the initial value of Rs. 1446/-
9 per sq. yd. We therefore direct the Ld. AO to adopt the rate of Rs. 1446/- per sq. yd while computing the sale consideration in accordance with the provisions of section 50C of the Act and compute the capital gains. Accordingly, this ground raised by the assessee is partly allowed for statistical purposes. 11. In the result, appeal of the assessee is partly allowed for statistical purposes as indicated herein above.
Pronounced in the open Court on 12th April, 2024.
Sd/- Sd/- (दुव्िूरु आर.एलरेड्डी) (एस बालाकृष्णन) (DUVVURU RL REDDY) (S.BALAKRISHNAN) न्याधयक सदस्य/JUDICIAL MEMBER लेखा सदस्य/ACCOUNTANT MEMBER Dated : 12.04.2024 OKK - SPS
10 Copy of the order forwarded to:- धनधााररती/ The Assessee–Akunuri Sai Avinash, Rep. by GPA Holder 1. Dr. Akunuri Sai Babu, D.No. 14-11-2A, Ramajogipeta, Visakhapatnam, Andhra Pradesh. राजस्ि/The Revenue –Asst. Commissioner of Income Tax, Circle 2. (International Taxation), O/o. ITO, Infinity Towers, Shankaramatam Road, Visakhapatnam, Andhra Pradesh – 530016. 3. The Principal Commissioner of Income Tax, आयकरआयुक्त (अपील)/ The Commissioner of Income Tax 4. धिभागीयप्रधतधनधध, आयकरअपीलीयअधधकरण, धिशाखापटणम/ DR,ITAT, 5. Visakhapatnam गाडाफ़ाईल / Guard file 6. आदेशानुसार / BY ORDER
Sr. Private Secretary ITAT, Visakhapatnam
