Income Tax Appellate Tribunal - Ahmedabad
Ashalata Kulshrestha, Ahmedabad vs The Ito, Ward-7(1)(3), Ahmedabad on 28 June, 2023
IN THE INCOME TAX APPELLATE TRIBUNAL
"D" BENCH, AHMEDABAD
BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER &
Ms. MADHUMITA ROY, JUDICIAL MEMBER
आयकर अपील सं./I.T.A. No. 738/Ahd/2019
( नधा रण वष / Assessment Year : 2016-17)
Ashalata Kulshrestha बनाम/ ITO
14, Radhekrishan Vs. Ward 7(1)(3), Ahmedabad
Banglow, Nr. Fire Station,
Bodakdev, Ahmedabad -
380054
थायी ले खा सं . /जीआइआर सं . /PAN/GIR No. : AJMPK6180G
(अपीलाथ /Appellant) .. ( यथ / Respondent)
अपीलाथ ओर से /Appellant by : Shri S. N. Soparkar, Sr. Advocate
यथ क ओर से/Respondent by : Shri Rajdeep Singh, Sr. D.R.
सुनवाई क तार ख / Date of
14/06/2023
Hearing
घोषणा क तार ख /Date of
28/06/2023
Pronouncement
ORDER
PER Ms. MADHUMITA ROY - JM:
The instant appeal filed by the assessee is directed against the order dated 27.03.2019 passed by the Ld. Commissioner of Income Tax (Appeals)- 7, Ahmedabad arising out of the order dated 14.12.2018 passed by the ITO, Ward-7(1)(3), Ahmedabad under section 144(3) of the Income Tax Act, 1961 (hereinafter referred as to 'the Act') for Assessment Year 2016-17, whereby and whereunder the income on the sale of property has been held to be short term capital gain and the claim of deduction under Section 54F of the Act has been denied.ITA No. 738/Ahd/2019 (Ashalata
Kulshrestha vs. ITO) A.Y.- 2016-17 -2-
2. We have heard the rival submissions made by the respective parties and we have also perused the relevant materials available on record.
3. The appellant filed its return of income under Section 139 of the Act on 19.07.2016 declaring total income at Rs.18,54,950/- which was processed under Section 143(1) of the Act on 14.09.2016 with a refund of Rs.160/-. The case was selected for limited scrutiny under CASS on the ground as to whether deduction from capital gains has been claimed correctly or not.
Statutory notices were duly served upon the assessee. The brief facts leading to this issue is this that the appellant was allotted a residential unit from Gujarat State Housing Board on 01.01.1979 upon making payment of Rs.52,500/- in respect of the land and construction area measuring about 66.92 sq. mtr. The appellant also paid Rs.11,286/- for the extra land measuring about 235.94 sq.mtr. On 05.08.1986, a deed of conveyance was executed by and between the appellant and the Gujarat State Housing Board, whereby and whereunder the right title interest of the land alongwith the superstructure measuring about 66.92 sq.mtr. were transferred in favour of the appellant. All the Schedules A, B & C mentioned the total area of land measuring about 66.92 sq.mtr. which is also evident from the documents annexed with the paper book appearing at Page Nos. 25, 26 & 27 therein. It is an admitted fact that the open area of land measuring about 235.94 sq.mtr. purchased by the appellant were not mentioned in the said deed of conveyance dated 05.08.1986.
4. On 31st July, 2015, the appellant executed a rectification deed, namely, "Sudharano Lekh" with said Gujarat State Housing Board for clarifying the ownership in respect of the open land area measuring about 235.94 sq.mtr. without making any further payment. In the meantime, the appellant sold the ITA No. 738/Ahd/2019 (Ashalata Kulshrestha vs. ITO) A.Y.- 2016-17 -3- property by executing a deed of conveyance dated 16.03.2006 with the superstructure to her daughter, namely, Mrs. Amy Patel for a consideration of Rs.4,15,000/-, the schedule whereof mentioned is constructed property of 66.92 sq.mtr. of Tenement No.304 in Block No. M/41 of Saraswatinagar Housing Colony lying and situated at Survey No.44 Paiki of Final Plot Nos. 44 to 46 Paiki in the Town Planning Scheme No.31, in the District of Ahmedabad, Sub-District, Ahmedabad -3 (Memnagar Division, Vastrapur).
However, the purchaser, namely, the daughter of the assessee failed to record her name in the City Survey Record of Ahmedabad, in the absence of clear title of the total area of land measuring about 302.86 sq.mtr. as was not mentioned in the original deed of conveyance entered into by the appellant and the Gujarat State Housing Board on 05.08.1986 neither conveyed to her.
5. On the other hand, the said Gujarat State Housing Board was neither agreed to enter into with the said Alteration agreement 'Sudhara no lekh' with the daughter of the assessee but with the original allottee being the appellant before us and therefore having no other alternative the deed of conveyance registered by and between the appellant and her daughter dated 16.03.2006 conveying the right title interest of the property measuring about 66.96 sq.mtr. was decided to be cancelled and stood cancelled. Relevant to mention that the amount of consideration paid to the appellant by the daughter to the tune of Rs.4,15,000/- was also returned to the appellant which was cleared from the Bank Account No. 0751081000000014 held with South Indian Bank Ltd. on 02.07.2016 to your appellant. In that view of the matter, the first case of the assessee is this that the deed executed on 16th March, 2006 between the appellant and the daughter become void ab initio and the appellant continued as legal owner of the clear title of the said property since 01.01.1979.
ITA No. 738/Ahd/2019 (AshalataKulshrestha vs. ITO) A.Y.- 2016-17 -4-
6. On 31.07.2015, a rectification deed was executed by and between the Gujarat State Housing Board by the Executor being the Estate Manager, Gujarat State Housing Board, Ahmedabad with the appellant rectifying the measurement of land mentioned in the old deed having total area of 66.92 sq.mtr. to constructed area of 66.92 sq.mtr. and 235.94 sq.mtr. open land adjacent to the house i.e. total area measuring about 302.86 sq.mtr. of land. The same is appearing in Gujarati version at Page Nos. 62 to 92 of the paper book and translated in English version at Page Nos. 183 to 189 of the paper book filed before us.
7. Ultimately, on 09.10.2015, the land with constructed portion thereon sold to the third party by way of deed of conveyance appearing at Page Nos. 93 to 133 of the Paper Book No.1, the translated copy whereof is appearing at Page Nos. 190 to 209 of the paper Book No.2 filed before us, at a consideration of Rs.2,31,00,000/-; the deed of conveyance executed by and between the appellant and Shri Rajubhai Merubhai Sohla on 09.10.2015 mentions the total area of land admeasuring about 302.86 sq.mtr. in respect of property of Tenement No.304 in Block No. M/41/304 in the Scheme namely "Saraswatinagar Housing Society" known as "120 M.I.G. Tenement "E" Type, Vastrapur under the University Staff Housing Scheme, Himatlal Park, Vastrapur, Ahmedabad having land with construction of 66.92 sq.mtr. and its open land admeasuring 235.94 sq.mtr. in the Schedule of property therein. Thereafter, the assessee deposited Rs.2256900/- from the total consideration received in the capital gain account maintained with Bank of Baroda, S. G. Road, Ahmedabad and claimed long term capital gain arose from the sale of residential property while filing return of income for A.Y. 2016-17.
ITA No. 738/Ahd/2019 (AshalataKulshrestha vs. ITO) A.Y.- 2016-17 -5-
8. The assessee's case as also argued by the Ld. Senior Counsel Mr. S. N. Soparkar is this that by and under the rectification deed dated 31.07.2015 executed by and between the Gujarat State Housing Board and the appellant. The right title interest of the property conveyed to the appellant relates to the original allotment dated 01.01.1979 and subsequently, conveyance deed dated 05.08.1986. In that view of the matter, since the assessee hold the property more than 36 months, the assessee is entitled to long term capital gain which was wrongly denied by the authorities below on the sole ground that the property held with the assessee less than 36 months as the same was conveyed to the daughter of the appellant on 16.03.2006 and reversed back on 30.07.2015.
9. The holding period have been rightly decided to be reckoned on and from 30.07.2015 and rightly denied the claim of long term capital gain by the authorities below as of the argument advanced by the Ld. DR. He, thus, vehemently supported the orders passed by the authorities below.
10. The argument advanced by the Ld. Senior Counsel Mr. S. N. Soparkar is on two counts. According to him, the Schedule of property mentioned in the earlier deed of conveyance dated 05.08.1986 executed between the appellant and the Gujarat State Housing Board stood rectified from the constructed area of 66.92 sq.mtr. to total area of 302.86 sq.mtr. including 235.94 sq.mtr. open land adjacent to the house by and under the rectification deed dated 13.07.2015 executed by and between the appellant and Gujarat State Housing Board. Thus, the right, title and interest mentioned in the rectification deed dated 31.07.2015 relates back to the original deed of allotment dated 01.01.1979 in respect of the said plot of land in favour of the appellant. Admittedly, therefore, the appellant was holding the land more than ITA No. 738/Ahd/2019 (Ashalata Kulshrestha vs. ITO) A.Y.- 2016-17 -6- 36 months and upon the deed of sale dated 09.10.2015 executed by and between the appellant as the vendor and Shri Rajubhai Merubhai Sohla for the total consideration of Rs.2,31,00,000/-, the appellant rightly claimed long term capital gain out of such sale of the residential property. Alternatively, it was further argued by him that since the appellant conveyed the right, title and interest of property in respect of only 66.92 sq.mtr. and executed by and under the deed of sale dated 16.03.2006 to her daughter which remained with her daughter till 30.07.2015 i.e. the date of cancellation of the earlier deed of sale dated 16.03.2006, the benefit of capital gain in respect of this particular area of land being 66.92 sq.mtr. for this holding period can be denied. Meaning thereby, the balance area measuring about 235.94 sq.mtr. holding period whereof with the assessee starting for the initial date of allotment dated 01.01.1979 to 09.10.2015 confers a clear right of claiming long term capital gain arising out of the sale of the residential property. However, the Ld. DR vehemently argued in respect of the case made out by the Revenue to this effect that once the property had sold to her daughter, the question of long term capital gain either for the entire area or for the balance area as aforesaid does not and cannot arise because of the holding period is much less than 36 months. However, the admitted position remains like this that the assessee was in position of the entire plot of land since 01.01.1979 but the Schedule of property mentions therein only in respect of 66.92 sq.mtr. and not 302.86 sq.mtr. and therefore, the title transferred to the daughter is of course in respect to this portion of area of land of measuring about 66.92 sq.mtr. and not the total area 302.86 sq.mtr. Legally, the assessee has been conferred with the right of possession of the entire plot of land measuring about 302.86 sq.mtr. only by way of the deed of rectification dated 31.07.2015 but the same relates back to the original date of allotment dated 01.01.1976 ITA No. 738/Ahd/2019 (Ashalata Kulshrestha vs. ITO) A.Y.- 2016-17 -7- when under the University Staff Housing Scheme the assessee was allotted with the same plot of land. Under these facts and circumstances, admittedly, the assessee is entitled to the claim of long term capital gain under Section 54 of the Act in respect of balance of land measuring 235.94 sq.mtr. which was never conveyed by way of deed of sale by the appellant to her daughter. We, therefore, accept the contention made by the Ld. Senior Counsel appearing for the assessee and direct the Ld. AO to calculate the capital gain in respect of the area of land admeasuring to 235.94 sq.mtr. and grant relief to the assessee. With the aforesaid observations, we allow the appeal preferred by the assessee partly.
11. In the result, assessee's appeal is partly allowed.
This Order pronounced on 28/06/2023
Sd/- Sd/-
(WASEEM AHMED) (MADHUMITA ROY)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Ahmedabad; Dated 28/06/2023
S. K. SINHA True copy
आदे श क त ल प अ े षत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent.
3. संबं%धत आयकर आयु'त / Concerned CIT
4. आयकर आय'
ु त(अपील) / The CIT(A)-
5. *वभागीय -त-न%ध, आयकर अपील य अ%धकरण, अहमदाबाद / DR, ITAT, Ahmedabad
6. गाड3 फाईल / Guard file.
आदे शानस ु ार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपील$य अ%धकरण, अहमदाबाद / ITAT, Ahmedabad