9911796707
TMI Blog2015 (5) TMI 574X X X X Extracts X X X X X X X X Extracts X X X X ..... itted now, which bring out in detail the dispute is pending in the civil court, has been furnished before the Tribunal and it was not available before the lower authorities. Thus the points raised by the assessee is quite significant because if assessee is able to demonstrate that the sale agreement could not be fructified in view of the pendency of civil suit in question, obviously, no cognizance of the same can be taken for assessing any income from such an agreement till the outcome of the civil proceedings crystallized. Thus set-aside the order of CIT(A) and restore the matter back to the file of Assessing Officer to make an assessment afresh with regard to the transaction in question. - Decided in favour of assessee for statistical purposes. - ITA No.755/PN/2013 - - - Dated:- 10-4-2015 - Shri G.S. Pannu And MS. Sushma Chowla JJ. For the Appellant : S/Shri Ajay R. Singh Ramesh N. Rao For the Respondent : Shri B. C. Malakar ORDER Per Sushma Chowla, JM: This appeal filed by the assessee is against the order of CIT(A)-I, Pune, dated 15.01.2013 relating to assessment year 2007-08 against order passed under section 147 r.w.s. 143(3) of the Income Tax Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sued an irrevocable Power of Attorney to one Mr. Sanjay Datatray Kakade in connection with the property situated at Survey No.1611, Shivaji Nagar, Pune in respect of his 1/24th share i.e. 1875 sq.ft. in the property. Pursuant to the received information, reasons were recorded for reopening of the assessment and notice under section 148 of the Act was issued. In consequent thereto, assessee clarified that he was a salaried person earning a monthly salary of ₹ 7,000/- from one M/s Rahul Enterprises and since his income for the year under consideration was below the taxable limit, no return of income was filed. Further, claim of the assessee was that he has not transferred any property during the year under consideration. However, he had entered into a sale agreement which could not be completed due to litigation in Court. As per the agreement, out of the total consideration of ₹ 93,75,000/- for sale of the property, the assessee had received a sum of ₹ 60,00,000/- on the date of agreement. The explanation of the assessee in this regard was that the other family members who were the co-owners of the property had filed a suit in the local court for stay on the sale of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade executed on 06th September, 2006 with respect to the permanent conveyance of their share in the said property under consideration for an amount of ₹ 3 crores plus. The MOU also mentioned that the individual share of each of the co-owner in the said property under consideration and the decree passed by the Civil Court, refers to individual shares in the said property. As per the Assessing Officer, the filing of the suit by other family members against the sale under consideration of the assessee s 1/24th share in the property was just a stunt due to afterthought, and a cunningly Mastered arrangement between the family members, in order to save the assessee from the clutches of the income tax. The Assessing Officer, thus, in view of the provisions of Income Tax Act and section 53A of the Transfer of Property Act, 1882 held that the sale consideration received by the assessee comes under the ambit of definition of transfer and therefore the sale consideration is to be considered for computing the capital gains tax. Vide para 10 of the assessment order, the Assessing Officer referred to decree and pointed out that though the court has restrained the purchaser from the taking ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty, without adopting due process of law till the disposal of the suit. 7. The CIT(A) vide para 7.5 after applying the provisions of section 2(47)(v) of the Act and section 53A of the Transfer of Property Act, 1882 pointed out that there must be an agreement for sale and part performance of contract covered by section 53A of the Transfer of Property Act, 1882 by giving the possession of the property. It was noted by the CIT(A) that In the present case, there is admittedly a registered sale deed but there is no possession given to the purchaser/transferee. As such, clause (v) of section 2(47) which has been invoked by the Assessing Officer is clearly not applicable in the present case . The CIT(A) made reference to the ratio laid down by the Hon ble Supreme Court in the case of Sunil Siddharthbhai vs. CIT reported in 156 ITR 509 (SC) and the Hon ble Gujarat High Court in the case of CIT vs. Hormasji Mancharji Vaid reported in 250 ITR 542 (Guj.) and held as under :- 7.7. Thus, the Full Bench of the Gujarat High Court held that transfer is complete in view of the fact that the vendor is not entitled in law to dispossess or question the title of the vendee. Though the case relat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eemption. The sale is final in the eyes of the appellant (para 7.2 refers) as per the Civil Court order. Hence, by virtue of section 2(47) r.w.s 45(1), the capital gains is deemed to be income in the hands of the appellant in the relevant F.Y. 2006-07 i.e. A.Y. 2007-08. This is also in line with the concept of accrual of income as per section 5 of the Income tax Act. Thus, keeping in view all these factors and also the judicial precedents referred to in the preceding paragraphs, it has to be held that capital gains u/s 45(1) has arisen from the transfer of the capital assets. Grounds No.7 to 11 are thus, dismissed. 9. The assessee is in appeal against the order of CIT(A). 10. The Ld. Authorized Representative as well as the Ld. Departmental Representative made their arguments in support of their stands. 11. We have heard the rival contentions and perused the record. The issue arising before us is in relation to the alleged transfer of share of the assessee in property situated at Survey No.1611, Shivaji Nagar, Pune. Admittedly, the assessee was a co-owner of the property and had 1/24th share in the said property. The assessee did enter into an agreement with Shri Sanjay K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eply dated 20.11.2005 issued by Advocate Krishna Kelkar; 13. Copy of Reply dated 03.12.2005 given by Defendant Nos.1 and 10 to final Decree application No.503 of 1989; 14. Copy of Written Statement dated 03.04.2006 given by Defendant Nos.1 and 10 in final Decree application No.503 of 1989. 12. We find that the aforesaid documents, which bring out in detail the dispute is pending in the civil court, has been furnished before the Tribunal and it was not available before the lower authorities. In our considered opinion, the points raised by the assessee is quite significant because if assessee is able to demonstrate that the sale agreement could not be fructified in view of the pendency of civil suit in question, obviously, no cognizance of the same can be taken for assessing any income from such an agreement till the outcome of the civil proceedings crystallized. However, in order to come to a concrete finding on this aspect, it would be necessary to verify the factual position based on the documents now being furnished by the assessee. For the said reason, we deem it fit and proper to set-aside the order of CIT(A) and restore the matter back to the file of Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
