SH. SHEO RAM,JAGADHARI vs. ITO, YAMUNANAGAR

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH ‘B’, CHANDIGARH BEFORE MS.DIVA SINGH, JUDICIAL MEMBER AND MS.ANNAPURNA GUPTA, ACCOUNTANT MEMBER

ITA No.364/Chd/2017 (Assessment Year :2007-08) Sh. Sheo Ram, Vs. The Income Tax Officer, Village Jaroda, Ward 3, Jagadhari. Yamunanagar. PAN: FHCPS9095D (Appellant) (Respondent)

Appellant by : Shri Rohit Goel Respondent by : Shri Ashish Abrol, DR Date of hearing : 09.01.2018 Date of Pronouncement : 09.04.2018

ORDER PER ANNAPURNA GUPTA, A.M.: This appeal has been preferred by the assessee against

the order of Ld. Commissioner of Income Tax (Appeals),

Panchkula (hereinafter referred to as (‘Ld.CIT(Appeals)’)

dated 14.9.2015.

delay of 457 days in filing the appeal before us. An

application requesting condonation of delay was filed on

23.3.2017. Referring to the same, the Ld. counsel for

assessee stated that the delay was on account of non

receipt of the original order passed by the CIT(Appeals)

dated 14.9.2015 and that the same was received

subsequently only on 5.12.2016 after a letter was filed by

the assessee to the CIT(Appeals) dated 28.10.2016 asking

for a copy of the order, if any, passed in the case. It was

pointed out that on receipt of this application by the

assessee, the administrative officer of the CIT(Appeals) vide

office letter dated 5.12.2016 ,sent a copy of the order to the

assessee after which the appeal was filed within stipulated

time. The Ld. counsel for assessee, therefore, stated that

the delay in filing the appeal could not be attributed to any

fault on the part of the assessee but due to the late receipt

of the order of the CIT(Appeals).

condonation of delay application stating that the order was

dispatched from the office of the CIT(Appeals) by Speed Post

on 17.9.2015 and had not been received back. The Ld. DR

drew our attention to the communication received from the

office of the CIT(Appeals), Panchkula in this regard, on

being asked by the Registry of the I.T.A.T. to intimate the

exact date on which the order was served on the assessee.

The Ld. DR also drew our attention to the copy of the Speed

Post received mentioning the fact of the dispatch of the

order on the aforestated date to the assessee which was

enclosed alongwith the reply filed by the office of the

CIT(Appeals), in response to the request of the Registry in

this regard.

reiterated that the copy of the original order which was

claimed to be dispatched on 17.9.2015 was never received

by the assessee and was received only on a request made to

the CIT(Appeals) for providing a copy vide assessee’s letter

dated 28.10.2016. It was also stated that a letter was also

written under the RTI Act to the Central Public Information

Officer and Superintendent, Post Office, Ambala for

confirming the delivery of post dated 21.9.2015, in response

to which the assessee was informed that records relating to

booking and delivery of Speed Post were preserved only for

a period of six months and, therefore, no record of the

delivery of the CIT(Appeals)’s order to the assessee was

available with the department of Post Office. All the above

facts were stated by the assessee on oath in the form of an

affidavit which was produced before us. The Ld. counsel for

assessee further referring to the application for condonation

of delay pointed out that the assessee was an illiterate

person having only agricultural income as his source of

income and was, therefore, not required to file his return of

income. It was further pointed out that in the impugned

assessment year no return was originally filed and it was

only when notice u/s 148 was received that the return was

filed and when the assessment was framed, making addition

to the income of the assessee, the service of a professional

were engaged for filing appeal against the said order. The

Ld. counsel for assessee referring to the application for

condonation of delay stated that the assessee was never

aware of the intricacies of income tax matters and did not

follow up the status of appeal proceedings from the counsel

and that it was only when a phone call was received from

the Income Tax office for depositing the demand then the

assessee contacted his counsel in the month of November,

2016 enquiring the status of appeal. The Ld. counsel for assessee stated

that in view of the background of the assessee, the delay be condoned.

illiterate agriculturist who has never filed his return in the past. We find

that these statements were made on affidavit by the assessee and were

never rebutted by the Revenue. We further find that in the present

peculiar facts and circumstances of the case, no advantage can be drawn

by the assessee by filing the appeal late, nor any disadvantage is caused

to the Revenue if the delay is condoned. In fact there is no vested right

with the Revenue that on account of late filing of appeal by the assessee

the Revenue is ousted from its settled position. Therefore, being satisfied

with the explanation of the assessee, we deem it appropriate to condone

the delay. This order was pronounced in open court in the presence of

both the parties and hearing of the appeal was thereafter directed to be

proceeded with.

Brief background of the case is that the Assessing Officer had

information about sale of half share of land by the assessee in village

Jaroda, Yamunanagar for Rs.7,51,95,313/- to one M/s Jewel Projects

Pvt. Ltd., New Delhi on 20.3.2007. Since the land was a capital asset,

falling within 8 km. of the municipal limit, the capital gain on such sale

was taxable and, therefore, the Assessing Officer issued notice u/s 148

of the Act for taxing the capital gain earned by the assessee on the

impugned transaction. In response to the same, the return was

filed by the assessee declaring Long Term Capital Gains of

Rs.41,17,969/- on account of the said transaction. During

assessment proceedings thereafter the Assessing Officer

confronted the assessee with the fact that complete capital

gain on account of the aforesaid transaction had not been

disclosed by the assessee but in fact capital gain pertaining

to the amount received by the assessee on account of the

said transaction in the impugned year in cash amounting to

Rs.1,50,000 and vide cheque dated 15.3.2017 amounting to

Rs.32,67,969/- had been disclosed. The Assessing Officer

noted that the remaining amount of Rs.3,41,79,688/-

received vide undated cheque No.009611 and realised by

the assessee on 14.8.2008 had not been considered for the

purpose of returning the capital gain, which in fact had

been offered to tax in the next year i.e. assessment year

2009-10. Due reply was filed by the assessee , after

considering which the Assessing Officer held that in the

facts of the present case wherein the sale consideration was

partly paid and partly promised, the immovable property is

to be deemed to have been transferred on execution and

registration of sale deed if the possession has been given to

the buyer as per the provisions of section 54 of the Transfer

of Property Act. The Assessing Officer noted that the

assessee had deposed before the Registering Authority that

the possession of land had been handed over to the vendee.

He, therefore, held that the claim of the assessee that there

would be two different dates for effecting the transfer in the

present case, was not tenable and accordingly, whole of the

sale consideration of Rs.3,68,96,010/- (assessee’s share)

was held to be taxable in the impugned assessment year.

the Ld.CIT(Appeals), who upheld the order of the Assessing

Officer ,dismissing the assessee’s appeal.

appeal before us raising following effective grounds:

“1. The learned CIT (Appeals) has erred in taw and facts in confirming an addition of Rs. 3,68,96,060/-made by AO as long term capital gain on sale of agriculture land measuring 109 kanal 7.5 marla for a consideration of Rs. 3,75,97,657/- by holding the transfer of land in the year under consideration despite the fact that only 10% of the sale consideration was received during the year and balance 90% consideration was received on 14.08.2008 i.e. AY 2009-10. 2. That learned CIT (Appeals) has erred in law and facts in not allowing the benefit of investments in new agriculture land amounting Rs. 3,08,96,330/- u/s 54B & construction of house amounting Rs. 43,00,000/- u/s 54 F invested subsequent to the receipt of money against sale of agriculture land. 3. That learned CIT (Appeals) has erred in law and facts in adopting indexed cost of land valued on the basis of land value on 1-4-1981 at Rs. 7,01,597/-. 4. That learned CIT (Appeals) has erred in law and faces in confirming the AO action by not allowing the benefit of improvement cost of land. 5. That authorities below has erred in law and facts in reopening the assessment u/s 148. 9. No arguments vis-a-vis Ground No.5 were made before

us. The same is therefore dismissed.

confirming the addition of Rs.3,68,96,060/- made by the

Assessing Officer as Long Term Capital Gains earned by the

assessee during the impugned year on account of sale of

land, in ground No.1, the Ld. counsel for assessee during

the course of hearing before us stated that the issue was

squarely covered by the judgment of the Chandigarh Bench

of the I.T.A.T. in group of cases with the lead case being

Shri Rajiv Kumar Vs. ITO in ITA No.17/Chd/2016 dated

29.6.2016 and which decision was subsequently followed in

the case of Sh.Purshottam Kumar, Smt.Payal Kumari and

Sh.Parveen Kumar Vs. ITO, Ward ,1,Yamunanagar in ITA No

968 to 971/Chd/2014 & 1185/Chd/2012 dated 17-08-

16.Copies of both the orders were placed before us.

Drawing our attention to the order passed in the case of

Rajiv Kumar (supra), Ld.Counsel for the assessee stated

that in the said case also the facts were identical with that

of the assessee wherein the land was acquired by builders

making only part payment of around 10% of the entire

consideration and promising to pay the balance vide

undated cheque and getting the sale deed registered in their

favour. It was pointed out that in the said case it was

brought to the notice of the Bench that the builders had

tried to dupe innocent agriculturists in this manner by

acquiring their lands by making meager payment of the

aggregate sale consideration, promising to pay the balance

in future, which in fact was never paid to the agriculturists.

It was pointed out that the agriculturists on being so duped

had filed case before the Hon'ble Punjab & Haryana High

Court who had ordered an investigation in the matter and

after considering the report of the investigator had directed

the Builders to make payment of the balance amount to the

agriculturists, which was paid and thus realized by the

assessee only in the succeeding year. It was pointed out to

the Bench in the said case that in the year when the sale

deed was registered the intention of the buyers was clearly

not to make payment of the entire agreed amount. It was

also pointed out that it was agreed to handover the

possession only when the complete payment was made to

the sellers on failure of which the sale deed would be

cancelled. The Ld. counsel for assessee pointed out from the

order that taking note of these averments made before it

and considering the evidences placed before it

substantiating the stated facts, the I.T.A.T. held that the

transfer could not be said to have taken place in the

impugned year but only when the final payment was

received by the assessee. It was pointed out that the

I.T.A.T. on this basis deleted the addition made by the

Assessing Officer of the entire capital gains in the year of

registration of the sale deed. The Ld. counsel for assessee

stated that the facts in the present case were identical to

that in the case of Rajiv Kumar & Others (supra),

Purshottam Kumar & Tejinder Kumar and a chart pointing

out identical facts was placed before us as under:

No. PARTICULARS Facts of Rajiv Facts of Facts of Facts of Sheo Ram Kumar ITA No. Tajinder Purshotam 17/CHD/2016 Kumar Kumar ITA ITA No.968 & No.19/CHD/ 969/CHD/20 2016 14 1. Date of 20-3-2007 20-3-2007 20-3-2007 20-3-2007 Registration of Sale Deed 2. Total value of sale 5,50,00,000 5,44,15,625 2,95,28,125 3,75,97,656 consideration 3. Date of Receipt of 25-3-2007 15-3-2007 20-3-2007 15-3-07 Advance Payment 4. Amount of Receipt 50,00,000 4946875 2693375 32,67,969 of Advance Payment 6. Date of Receipt of 16-6-2008 15-6-2008 16-6-2008 14-8-2008 Final Payment 7 Amount of Final 5,00,00,000 4,94,68,750 2,68,43,750 3,41,79,688

Payment 8 Clause in Sale Yes Yes Yes Yes Deed that in case of cheque not encashed sale deed will be cancelled 9 Writ Petition filed No but petition Yes No but No but petition before Punjab & filed by petition filed filed by Tajinder Haryana High Tajinder Kumar by Tajinder Kumar in Criminal Court in Criminal Kumar in Misc. No. 36372-M Misc. No. Criminal decided on 31-5- 36372-M Misc. No. 07 by P&H HC decided on 36372-M matter was 31-5-07 by decided on referred to SP Ynr P&H HC matter 31-5-07 by and further in was referred to P&H HC CWP 1908 of 2009 SP Ynr and matter was a SIT was formed further in CWP referred to SP under ADGP Crime 1908 of 2009 a Ynr and Branch to cover all SIT was formed further in farmers with a under ADGP CWP 1908 of direction to the Crime Branch 2009 a SIT Collector by Court to cover all was formed to prevent third farmers with a under ADGP party rights on direction to the Crime land or Collector by Branch to dispossession of Court to cover all farmers to whom prevent third Farmers with full sale party rights on a direction to consideration has land or the farmers not been paid. dispossession with a of farmers to direction to whom full sale the Collector consideration by Court to has not been prevent third paid. party rights on land or dispossession of farmers to whom full sale consideration has not been paid. 10 Date of Mutation of 31-3-2007 31-3-2017 31-3-2017 31-3-2017 Land in favour of Buyer 11 Date of Handing 16-6-2008 15-6-2008 16-6-2008 14-8-2008 over of Possession to buyer Company as evident from P&H HC order in CWP 1908 of 2009 dated 5-2-2009

issue was covered in favour of the assessee in view of the

aforesaid judgment of the I.T.A.T in the case of Rajiv

Kumar(supra) & Purshottam Kumar(supra).

following distinguishing facts in the present case with that

in the case of Rajiv Kumar (supra):

1) In the case of Rajiv Kumar (supra), on the day the

sale deed was registered i.e. 20.3.2007, the buyers had

executed an affidavit which was duly attested by the

Executive Magistrate, Jagadhri in which the buyers

had specifically affirmed that the sale deed of the land

had been registered but the spot possession would be

given at the time when the company would be making

the total payment of the post dated cheque of the

assessee. That in the case of assessee there is no

such fact on record but in fact as per the facts brought

out in the assessment order and the CIT(Appeals)’s

order, the possession of the land had also been handed

over to the buyers as per the sale deed executed.

2) That no evidence had been brought on record by

the assessee that the assessee’s land was also covered

in the civil case which was filed before the Hon’ble

High Court wherein direction was given by the Hon’ble

High Court, after constituting an SIT on the issue, to

the buyers to make payment of the balance amount to

the sellers of the land.

that factual finding with regard to the assessees land being

included and covered in the disputed lands before the High

Court, were not available on record but at the same time,

contended that the same could be established by the

assessee by placing relevant material and evidence on

record subject to verification by the department of the

same. The Ld. counsel for assessee requested, therefore,

that the issue be restored to the Assessing Officer so as to

enable the assessee to establish the identity of the facts of

the present case with that in the case of Rajiv Kumar

(supra). As for the affidavit regarding postponement of

handing over of possession of land by the sellers to the

buyers only on receipt of complete consideration, the Ld.

counsel for assessee stated that no such affidavit was filed

in the case of Parshotam Kumar which was also an identical

case decided on the lines of Rajiv Kumar(supra) following

the said decision.

Ld.Counsel for the assessee.

restore the issue back to the Assessing Officer for the

limited purpose of enabling the assessee to establish the

identity of the facts of the present case with that in the

case of Rajiv Kumar(supra) and Purshotam Kumar (supra)

and direct the Assessing Officer to verify the claim of the

assessee in this regard and thereafter pass an order in

accordance with law. This ground of appeal is, therefore,

allowed for statistical purposes.

entire capital gain to tax in the impugned year to the

Assessing Officer, we find that the remaining grounds i.e.

Ground No.2 to 4, with regard to the claim of exemption u/s

54B & 54F of the Act, considering fair market value of

property and relating to grant of benefit of cost of

improvement of land, cannot be adjudicated at this

juncture. These issues are, therefore, also restored to the

Assessing Officer to be adjudicated upon afresh after

deciding the main issue in the present appeal as per our

directions with regard to ground No.1 raised by the

assessee. The grounds of appeal Nos.2 to 4 are also,

therefore, allowed for statistical purposes.

allowed for statistical purposes.

Order pronounced in the Open Court. Sd/- Sd/- (DIVA SINGH) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated : 9th April, 2018 *Rati* Copy to: 1. The Appellant 2. The Respondent 3. The CIT(A) 4. The CIT 5. The DR Assistant Registrar, ITAT, Chandigarh