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Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH, VISAKHAPATNAM
Before: SHRI DUVVURU RL REDDY, HON’BLE & SHRI S BALAKRISHNAN, HON’BLE
आयकर अपील सं./I.T.A.No.124/Viz/2017 (ननधधारण वर्ा / Assessment Year : 2011-12) K.Santha Kumari Vs. Income Tax Officer D.No.38-37-24 Ward-4(1) Bhaskar Gardens Visakhapatnam Marripalem Visakhapatnam [PAN : AEUPK8568H] (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent) अपीलधथी की ओर से/ Appellant by : None प्रत्यधथी की ओर से / Respondent by : Shri S.P.G.Mudaliar, DR सुनवधई की तधरीख / Date of Hearing : 01.06.2022 घोर्णध की तधरीख/Date of Pronouncement : 27.07.2022 O R D E R Per Shri Duvvuru RL Reddy, Judicial Member : These appeals are filed by the assessees against the orders of the Commissioner of Income Tax (Appeals) [in short, “CIT(A)”]-2, Visakhapatnam in & 99/2015-16/CIT(A)-2/W-4(1)/VSP/2016- 17 dated 15.12.2016 for the Assessment Year (A.Y.) 2011-12. Since the grounds raised in these appeals are common, these appeals are clubbed, heard together and a common order is being passed and the facts are extracted from I.T.A.No.123/Viz/2017 for the sake of convenience as under.
Brief facts of the case are that the assessee is an individual and not filed any return of income for the A.Y.2011-12. The AO received some information that the assessee along with 8 others has sold their immovable property admeasuring 2129 sq.yds of land located at Madhavadhara village on 12.11.2010 for a total consideration of Rs.2,98,56,000/-. The assessee received his share of sale consideration of Rs.74,71,100/- through cheques, but did not disclose the capital gains on account of sale of property by filing return of income. Since the immovable property purchased by the assessee on 26.12.2007 was sold within 36 months of the purchase, the same was treated as short term capital gains as per the Act. Notices u/s 148, 144 along with 142(1) were issued to the assessee. A statement u/s 131 of the Act was recorded, during which the assessee confirmed that the assessee executed the sale deed along with 8 others and received his share of Rs.74,71,100/- through cheques from M/s Indus Infra Promoters and Builders, but did not present the cheques in bank due to some personal reasons. The AO held that since the property was conveyed from seller to the buyer and the land got registered, the transaction is completed which gives rise to capital gains as defined u/s 2(47) of the Act and attracts short term capital gains u/s 45 of the Act. The AO completed the assessment u/s 144 ex-parte, assessing the short term capital gains of Rs.44,71,100/-.
3. Aggrieved by the order of the AO, the assessee preferred an appeal before the CIT(A). The Ld.AR contended before the Ld.CIT(A) that there was no passing of consideration as the assessee did not realize the cheques given by the vendee, M/s Indus Infra Promoters and Builders. The Ld.AR also contended that there were litigations in the said property and therefore the assessee could not realize the cheques unless the litigations could be resolved and the statutory permissions could be obtained by the vendee. The Ld.CIT(A) observed that the assessee entered into Memorandum of Understanding (MoU) with the vendee, dated 12.11.2010, as per which the vendee had requested the assessee not to encash the cheques given as sale consideration without prior intimation as the funds are being arranged and to which the assessee had agreed and assured that he would allow 24 months time to arrange the funds to cover the cheques given as sale consideration and agreed to pay an interest of 13% per annum. The Ld.CIT(A) observed that the MoU did not specify about any litigation to the property nor laid down any condition to the transfer effected under the registered sale deed dated 12.11.2010. The Ld.CIT(A) further observed that there is nothing to suggest that the property in the subject land would be conveyed after clearance of the alleged litigations. There is no such condition that the property would not be conveyed unless the statutory permissions are obtained by the vendee. The parties to the transaction have merely postponed the realization of the consideration as per their financial convenience under the said MoU. The Ld.CIT(A) referred to section 54 of the Transfer of Property Act, which defines ‘sale’ as transfer of ownership in exchange of price paid or promised or part-paid and part-promised. Thus, held that even a promise would constitute sufficient consideration for transfer. The sale deed dated 12.11.2010 clearly evidence transfer of possession and ownership to the property in exchange for the consideration paid to the vendor. Accordingly, the Ld.CIT(A) dismissed the appeal of the assessee.
Aggrieved by the order of the Ld.CIT(A), the assessee preferred an appeal before the Tribunal and raised the following grounds :
The order of the Commissioner of Income Tax (Appeals), Visakhapatnam is bad in law and on facts of the case.
2. In the facts and circumstances of the case, appellant objects to the assessment of STCG in an amount of Rs.44,71,100/-.
In the facts and circumstances of the case, there being non receipt of consideration by the wit petition by the vendee in the high court of Andhra Pradesh subjecting the transaction to assessment of STCG by the assessing officer is not justified in law. 4. In the facts and circumstances of the case, the subject matter of the assessment since amounted to assessment of hypothetical income duly determining the STCG at Rs.44,77,100/- is therefore objected to. 5. Appellant reserves the right to add, amend and alter the grounds as the occasion may warrant. 6. For these and other grounds of appeal that shall be added at the time of hearing, the appellant prays that the assessment be cancelled.
The sole contention of the assessee is that the Ld.CIT(A) erred in confirming the addition made by the AO on the consideration which was not actually received by the assessee in his hands. Therefore, requested to set aside the order of the Ld.CIT(A) and delete the addition made by the AO and allow the appeal of the assessee.
On the other hand, the Ld.DR relied on the order of the Ld.CIT(A) and pleaded for upholding the same and to dismiss the appeal of the assessee.
We have heard both the parties and perused the material placed on record. The main contention of the assessee is that the assessee has not received any sale consideration, therefore, capital gains does not arise. But the contention of the revenue is that the statement was recorded u/s 131 of the Act and the assessee has confirmed that the assessee along with 8 others executed the sale deed and received his share of sale consideration of Rs.74,71,000/- through cheques from M/s Indus Infra Promoters and Builders. Since the property was registered from the seller to the buyer and the landlord registered the sale transaction as completed, it gives rise to capital gains as defined u/s 2(47) of the Act and attracts short term capital gains u/s 45 of the Act. On this aspect, the assessee has not filed any evidence to establish that the buyer did not present the cheques in the bank due to some personal reasons. The assessee has not substantiated his case except orally pleaded before the AO, CIT(A) and even before us and has not filed any document. Inspite of receipt of notice the assessee did not appear before the ITAT to substantiate his case with proper evidence. In the absence of such evidence, we do not find any infirmity in the orders passed by the lower authorities. Therefore, we uphold the order passed by the Ld.CIT(A) and dismiss the grounds raised by the assessee.
In the result, appeals of the assessees are dismissed.
Order Pronounced in open Court on 27th July, 2022.
Sd/- Sd/- (एस बालाकृष्णन) (दुव्वूरु आर.एल रेड्डी) (S.BALAKRISHNAN) (DUVVURU RL REDDY) लेखा सदस्य/ACCOUNTANT MEMBER न्याधयकसदस्य/JUDICIAL MEMBER Dated : 27.07.2022 L.Rama, SPS आदेश की प्रतितिति अग्रेतिि/Copy of the order forwarded to:- 1. ननधधाऩरती/ The Assessee– (i) Katragadda Muralikrishna, D.No.38-37-24, Bhaskar Gardens, Marripalem, Visakhapatnam (ii) K.Santha Kumari, D.No.38-37-24, Bhaskar Gardens, Marripalem, Visakhapatnam 2. रधजस्व/The Revenue - Income Tax Officer, Ward-4(1), Visakhapatnam 3. प्रधान आयकर आयुक्त / The Commissioner of Income Tax-2, Visakhapatnam 4. आयकर आयुक्त (अपील) / Commissioner of Income Tax (Appeals)-2, Visakhapatnam 5. नवभधगीय प्रनतनननध, आयकर अपीलीय अनधकरण, नवशधखधपटणम/ DR,ITAT, Visakhapatnam 6.गधर्ा फ़धईल / Guard file आदेशधनुसधर / BY ORDER
Sr. Private Secretary ITAT, Visakhapatnam