Income Tax Appellate Tribunal - Amritsar
Mohinder Kaur Josh Mla,, Hoshiarpur vs Assessee on 5 August, 2013
IN THE INCOME TAX APPELLATE TRIBUNAL
AMRITSAR BENCH; AMRITSAR.
BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER
AND SH. B.P. JAIN, ACCOUNTANT MEMBER
I.T.A. No. 295(Asr)/2011
Assessment year: 2007-08
PAN: ACYPJ9087A
Smt. Mohinder Kaur Josh, Vs. Asstt. Commissioner of
MLA, Ward No. 7, Piplanwala Income Tax, Hoshiarpur Circle,
Jalandhar Road, Hoshiarpur Hoshiarpur
(Appellant) (Respondent)
Appellant by: Sh. J.S. Bhasin, Advocate
Respondent by: Sh. Mahavir Singh, Sr. DR
Date of hearing: 05.08.2013
Date of pronouncement: 13.08.2013
ORDER
PER BENCH
1) The assessee has filed the present appeal against the impugned order dated 25.03.2011 passed by learned Commissioner of Income-tax, Jalandhar-I, Jalandhar, for the assessment year 2007-08 on the following grounds:
2
I.T.A. No. 295(Asr)/2011 Assessment year: 2007-08 i. That in the facts and circumstances of the case, the ld. CIT has grossly erred in invoking jurisdiction u/s 263 so as to set aside the assessment order passed by the ITO on 07.12.2009 u/s 143(3), more so when the said order is already the subject matter of appeal before the first appellate authority.
ii. That the ld. CIT has grossly erred, ignoring the evidence brought on record, in directing the ITO to bring to tax, notional capital gain, which has neither arisen nor accrued to assessee. The amount of consideration at Rs. 36750000/- has been adopted without any basis.
iii. That the order since passed by the ITO not being erroneous and prejudicial to the interest of the revenue, the impugned order of CIT passed u/s 263 setting aside that order, deserves to be knocked down as illegal.
iv. That the impugned order is wholly against law and facts of the case.
v. That the assessee craves right to add or delete any grounds of appeal.
2) The assessee being an MLA derives income from salary, pension and agriculture. She filed her return of income on 30.07.2007 declaring income of Rs. 2,44,817/- including agricultural income of Rs.
88,000/-, which was processed under Section 143(1) of the Income-tax Act, 1961 (in short "the Act"). The case of the assessee was selected for scrutiny and the Assessing Officer issued notice under Section 143(2) of the Act. Assessee filed her revised return on 11.04.2008 declaring income at Rs. 29,32,500/- including agricultural income at Rs. 88,000/-. 3
I.T.A. No. 295(Asr)/2011 Assessment year: 2007-08 She again filed her re-revised return on 27.02.2009 declaring total income at Rs. 2,50,817/-, including agricultural income at Rs. 88,000/- and the same was processed by the Assessing Officer under Section 143(1) of the Act on 12.08.2009. The Assessing Officer completed the assessment under Section 143(3) of the Act on 07.12.2009 at income of Rs. 28,44,498/- plus agricultural income of Rs. 88,000/-
3) As per record, in the original return, the assessee had not declared any capital gain made on account of transfer and sale of plot measuring 1000 sq. yrds. which was allotted to the assessee by the Co- operative society, namely, Punjabi Co-operative House Building Society Ltd, Mohali. This society with the consent of its members entered into tripartite Agreement with Hash Builders Pvt. Ltd. (HASH) and M/s Tata Housing Development Company Ltd., Mumbai (THDC), and as per which, each member against the plot size of 500 sq. yards was to receive a cash consideration of Rs. 82.50 Lac alongwith a flat measuring 2250 sq. ft. to be built by HASH. The cash consideration, however, was not to be paid in one time but in part from time to time. Till the end of accounting period, the assessee had received Rs. 30 lacs which in the revised return, was considered to work out Long Term Capital Gain at Rs. 26,81,681/-. This working of the assessee was accepted by the 4 I.T.A. No. 295(Asr)/2011 Assessment year: 2007-08 Assessing Officer. According to the Commissioner of Income Tax, Jalandhar-I, Jalandhar, this action of the Assessing Officer resulted in commiting a mistake of law since as per provisions of Section 48 of the Act, Capital Gain is to be computed by taking into account the full value of the consideration received or accrued as a result of transfer and which was Rs. 3,67,50,000/-. This tripartite agreement was for transfer and development of the whole land belonging to the society. Thus, the whole of the consideration was required to be considered for computing the Capital Gain and which was Rs. 1.65 crores in cash and two flats each measuring 2250 sq. ft. of the value of Rs. 2,02,50,000/-. The total consideration, thus, accrued as a result of this transfer was Rs. 3,67,50,000/- and which was required to be considered. According to learned Commissioner of Income Tax, Jalandhar-I, Jalandhar, the order of the Assessing Officer was erroneous as the provisions of Section 48 of the Act had been ignored or misapplied which was a mistake of law and this caused prejudice to the interest of the Revenue. Keeping these facts in view, a show-cause notice dated 24.02.2011 was issued to the assessee. In response to the same, the assessee filed her written submission pleading therein that when two views are possible and the A.O. has taken one view but with which the Commissioner does not 5 I.T.A. No. 295(Asr)/2011 Assessment year: 2007-08 agree, then in such a case, the order cannot be treated as erroneous and prejudice to the interest of the revenue. Secondly, the consideration was to be received in part as and when the sale deed for the part plot was to be executed. Since at that time only a part of the registry corresponding to the receipt of consideration of Rs. 30 lacs had been executed, thus, only this consideration was liable to be considered for computing capital gain.
4) Learned Commissioner of Income Tax, Jalandhar-I, Jalandhar, considered the written submission filed by the assessee but did not agree with the same and passed the impugned order on 25.03.2011 under Section 263 of the Act by holding that the order passed by the Assessing Officer is erroneous and prejudicial to the interest of the Revenue and set aside the order with a direction to the Assessing Officer to make it de- novo by re-computing capital gain taking the full value of the consideration accruing as a result of the transfer but after giving due opportunity as per law to the assessee.
5) Being aggrieved by the impugned order dated 25.03.2011 passed by learned Commissioner of Income Tax, Jalandhar-I, Jalandhar, under Section 263 of the Act, the assessee filed the present appeal. 6
I.T.A. No. 295(Asr)/2011 Assessment year: 2007-08
6) At the time of hearing, Sh. Mahavir Singh, learned Sr. DR, raised a preliminary objection that the issue in dispute has already been settled by I.T.A.T., Chandigarh Bench 'B', Chandigarh, in the case of Charanjit Singh Atwal Vs. ITO, Ward VI(1), Ludhiyana, passed in I.T.A. No. 448/Chd/2011 along with many other appeals on 29.07.2013 and decided the issue in dispute against the assessees and in favour of the Revenue by passing a detailed order. Thus, he requested that the appeal filed by the assessee may be dismissed.
7) Sh. J.S. Bhasin, Advocate, learned counsel for the assessee argued on the same line as argued before learned Commissioner of Income Tax, Jalandhar-I, Jalandhar. He also drew our attention towards the order passed by learned Commissioner of Income Tax(Appeals), Ludhiana, in the case of Sh. Satpal Gosain, dated 21.12.2011, annexed with the second paper book, in which the issue in dispute has been decided in favour of the assessee. He stated that when two views are possible then the provision of Section 263 of the Act does not apply.
8) The Bench has pointed out to learned counsel for the assessee that the aforesaid decision of learned Commissioner of Income Tax(Appeals), Ludhiana, in the case of Sh. Satpal Gosain, dated 21.12.2011, has been cancelled by the I.T.A.T., Chandigarh Bench 'B', 7 I.T.A. No. 295(Asr)/2011 Assessment year: 2007-08 Chandigarh, in the case of Charanjit Singh Atwal Vs. ITO, Ward VI(1), Ludhiyana, passed in I.T.A. No. 448/Chd/2011 along with many other cases, which he agreed.
9) Learned counsel for the assessee has also filed two paper books.
In the first paper-book containing pages from 1 to 60, he has filed show- cause notice u/s 263 of the Act; Reply filed by assessee; and Joint Development agreement executed with HASH/TATA. And in the second paper book containing pages from 1 to 24, he has filed 10 case laws rendered by Hon'ble Supreme Court, Hon'ble High Courts and many I.T.A.T. Benches, which include the order of Commissioner of Income Tax(Appeals), Ludhiana, in the case of Sh. Satpal Gosain, dated 21.12.2011.
10) We have heard both the parties and perused the relevant records available with us, especially the impugned order passed by learned Commissioner of Income Tax, Jalandhar-I, Jalandhar, along with the case laws relied upon by learned counsel for the assessee. We have also perused the order dated 29.07.2013 passed by I.T.A.T., Chandigarh Bench 'B', Chandigarh, in the case of Charanjit Singh Atwal Vs. ITO, Ward VI(1), Ludhiana, passed in I.T.A. No. 448/Chd/2011 along with many other cases. The facts and circumstances of the aforesaid case are 8 I.T.A. No. 295(Asr)/2011 Assessment year: 2007-08 totally identical to the facts and circumstances of the present case. The I.T.A.T., Chandigarh Bench has thoroughly adjudicated the issue in dispute and decided against the similarly situated assessees and in favour of the Revenue by dismissing the appeal filed by the assessees on 29.07.2013. In the present case, we have to see whether the order passed by the Assessing Officer dated 07.12.2009 under Section 143(3) of the Act is erroneous as well as prejudicial to the interest of Revenue or not. Keeping in view the fact and circumstances of the present case and the order dated 29.07.2013 passed by the I.T.A.T., Chandigarh Bench (supra), we are of the considered opinion that the order dated 07.12.2009 passed by the Assessing Officer under Section 143(3) of the Act is erroneous as well as prejudicial to the interest of Revenue. The Assessing Officer has not computed the capital gain by taking into account the full value of consideration received or accrued as a result of transfer. We are of the considered opinion that learned Commissioner of Income Tax, Jalandhar-I, Jalandhar has passed a well reasoned order after adopting prescribed procedure under the law and the argument of learned counsel for the assessee supported by various decisions are not helpful to the assessee and we reject the same by dismissing the appeal filed by the 9 I.T.A. No. 295(Asr)/2011 Assessment year: 2007-08 assessee and uphold the impugned order dated 25.03.2011 passed by the learned Commissioner of Income Tax, Jalandhar-I, Jalandhar.
11) In the result, the appeal filed by the assessee is dismissed. Order pronounced in the open court on 13th August, 2013 Sd/./- Sd/./-
(B.P. JAIN) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 13th August, 2013 /RK/ Copy of the order forwarded to:
1. The Assessee: Smt. Mohinder Kaur Josh, MLA, Ward No. 7, Piplanwala, Jalandhar Road, Hoshiarpur
2. The ACIT, Hoshiarpur Circle, Hoshiarpur
3. The CIT(A),
4. The CIT,
5. The SR DR, I.T.A.T., True copy By order (Assistant Registrar) Income Tax Appellate Tribunal, Amritsar Bench: Amritsar.