Income Tax Appellate Tribunal - Chandigarh
Dcit, Chandigarh vs M/S Punjab Tourism Development ... on 22 October, 2017
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IN THE INCOME TAX APPELLATE TRIBUNAL
CHANDIGARH BENCHES, 'B' CHANDIGARH
BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER &
Dr. B.R.R. KUMAR, ACCOUNTANT MEMBER
ITA No. 1363/Chd/2010
Assessment Year: 2007-08
The DCIT, Circle 1(1), Vs. M/s Punjab Tourism Development
Chandigarh Corporation Ltd, Chandigarh
PAN No. AAACP8513E
(Appellant) (Respondent)
ITA No. 1381/Chd/2010
Assessment Year: 2007-08
M/s Punjab Tourism Development Vs. The DCIT, Circle 1(1),
Corporation Ltd, Chandigarh Chandigarh
PAN No. AAACP8513E
&
ITA No. 789/Chd/2013
Assessment Year: 2007-08
The ACIT, Circle 1(1), Vs. M/s Punjab Tourism Development
Chandigarh Corporation Ltd, Chandigarh
PAN No. AAACP8513E
(Appellant) (Respondent)
Appellant By : Sh. Manjit Singh
Respondent By : Sh. A.K.Jindal
Date of hearing : 12.07.2017
Date of Pronouncement : 22. 09.2017
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ORDER
Per Sanjay Garg, Judicial Member:
The captioned cross appeals bearing ITA Nos. 1363/Chd/10 and 1381/Chd/10 preferred by the Revenue and the assessee respectively are against the order of the Commissioner of Income Tax (Appeals), [hereinafter referred to as CIT(A)], Chandigarh dated 22.07.2010 involving dispute relating to quantum additions for AY 2007-08 whereas another appeal bearing ITA No.787/Chd/13 preferred by the Revenue is against the order of CIT(A) Chandigarh dated 30.4.2014 for the same assessment year in relation to the issue of levy of penalty u/s 271(1) (c) of the Income Tax Act (in short 'the Act').
2. Since the issues raised in these appeals by the assessee are identical and co-related, therefore, for the sake of convenience, these appeals were heard together and are being disposed of by this common order.
3. First, we take up the appeals involving dispute relating to quantum additions. The Revenue in its appeal in ITA No. 1363/Chd/2010 has raised the following grounds of appeal:-
"1. On the facts and in the circumstances of the case and as per provisions of law, Ld. CIT(A) erred in allowing the relief to the assessee in not adopting the date of acquisition of the property of all the eight companies during the year as 02.11.2004.3
2. On the facts and circumstances of the case and as per the provisions of law Ld. CIT(A) has erred in allowing relief to the assessee in not relying upon the relevant clause of the sale deed which mentioned that the ownership and possession of the properties were transferred on 02.11.2014.
3. On the facts and circumstances of the case and as per the provisions of law Ld. CIT(A) has erred in not accepting the date of acquisition as 01.11.2014 and not upholding the capital gain as short term capital gain instead of long term as assessed by the Assessing officer as per the properties were sold with a period of 36 months".
Whereas, the assessee in ITA No. 1381/Chd/2010has agitated taken the following grounds of appeal:-
"1. That the Ld. CIT (A) is not justified in adjudicating ground No. 7 which reads as under:
" That the Ld. A. O. is not justified in holding that the assessee has not adopted the fair market value of property, without bringing any material to prove the same and further holding that the assessee has not valued the properties as per its own method, completely ignoring the registered valuer's report".
And hence not giving any finding regarding market value as on 1.4.1981 to be adopted for calculating indexed cost of acquisition in case of tourist complex at Pathankot and Shambhu."
2. That the Ld. CIT (A) is not justified in not 4 adjudicating the issue that in a case where appellant has not claimed any depreciation on building but has claimed indexed cost of acquisition for computing capital gain - whether the asset (i.e. building of Jalandhar, Sanghol and Hoshairpur complex) can be treated as capital asset & benefit of indexation has to be allowed.
3. (a) That the Ld. CIT (A) is not justified in holding that the date of acquisition of tourist complex at Madhopur has to be taken as 7.2.92 by saying that no evidence has been placed on record in respect of physical possession having been transferred to the appellant on 2.5.1979 completely ignoring the evidence filed.
(b) That the Ld. CIT (A) is not justified in not giving a finding regarding the cost of acquisition of Madhopur Complex to be adopted for calculating indexed cost of acquisition.
4. That the Ld. CIT (A) is not justified in holding that the date of acquisition of land at Jalandhar is 4.8.1996 as against 4.8.1986.
5. That the Ld. CIT (A) is not justified in holding that the cost of acquisition in the case of tourist complex at Moga & Kapurthala has to be taken at Nil under the facts & circumstances of the case.
4. The facts of the case have been discussed in para 5.1 onwards of the assessment order. On perusal of the documents, the Assessing officer observed that the assessee had sold the following properties comprising of land, building and other assets.
1. Tourist Complex - Moga Tourist Complex) 5
2. Tourist Complex - Kapurthala (GardeniaTourist Complex)
3. Tourist Complex - Pathankot (Gulmohar Tourist Complex)
4. Tourist Complex - Madhopur (Coral Tourist Complex)
5. Tourist Complex - Sanghoi (Mari Gold Tourist Complex)
6. Tourist Complex - Jalandhar (SukhchainTourist Complex)
7. Tourist Complex - Shambhu (Kachnar Tourist Complex)
8. Tourist Complex - Hoshiapur (Lajwanti Tourist Complex)
5. On the sale of the above said properties, the assessee had shown the income from "long term capital gain" in respect of land and "short term capital gain" in respect of buildings. Further, the value of land as on 01.04.1981 was taken by the assessee on the basis of value provided by the registered valuer M/s Kharbanda & Associates.
6. The Assessing Officer (A.O.) in order to verily the claim of the assessee gathered information u/s 133(6) of the Income-tax Act, 1961 from the concerned Sub-Registrar/Tehsildar, who provided the copy of mutation. He also took into consideration the deed of conveyance in respect of the above mentioned properties that was executed on 22.11.2004 between the assessee and the department of Tourism and Cultural Affairs, (Govt. of Punjab.) Based on the mutation and the conveyance deed dated 22.11.2004, the Assessing Officer reached to the conclusion that the date of acquisition of the above mentioned properties by the assessee should be taken as 02.11.2004 for the reason that the Deed of conveyance in respect of the above stated properties was executed on 02.11.2004.The Assessing officer also relied upon the relevant clause in the sale deeds vide which the assessee sold these properties to private parties, which mentioned that the 6 ownership and the possession of the above stated properties was transferred to the assessee on 02.11.2004. The relevant extract of that clause of the sale Deed is reproduced below: -
"more particularly described in the Schedule 'A ' hereto and delineated in the map annexed hereto (hereinafter referred to as the "Property"), having got the ownership and possession of the same from the Department of Tourism and Cultural Affairs, Government of Punjab vide order given by the Principal Secretary, Tourism and Cultural Affairs on the orders of the Governor of Punjab vide Notification dated 2 n d November, 2004 Reference No. 12/79/200l-ITC/2585 as mentioned in Schedule B hereto given on the basis of the order given by the Cabinet vide letter reference No. I/60/20&3/1CABINET/2127 dated 09.03.2003."
7. Since the date of acquisition was taken as 02.11.2004 by the A.O., and the properties as mentioned above, were sold in the financial year 2006- 07, the A.O. computed the income from sale of land as short term capital gains instead of long term capital gains as the above mentioned properties were sold within a period of 36 months from the date of acquisition.
8. In appeal before the CIT(A), the assessee submitted that as per the material on record, all the hotel properties that used to be run by Department of Tourism, (Government of Punjab) were transferred to the assessee 'M/s. Punjab Tourism Development Corporation Limited' (PTDC) to implement the decision of the Council of ministers with regard to setting up of Punjab Tourism Corporation to run those Hotels of the 7 Department of Tourism. A Memorandum for setting up the Punjab Tourism Development Corporation was placed before the Council of Ministers in their meeting dated 09.10.1978. The Council of Ministers approved the proposal given by the Department of Tourism. As per the approval of the Council of Ministers, the Corporation was to be set up as "Punjab Tourism Development Corporation" a Private Limited Company with authorised capital of Rs. 5 Crores. The entire assets of the department of tourism tentatively valued at 1,50,59,710.89 were to be transferred to the corporation as equity through book value. The breakup of the assets was part of letter No. 3236-STC-78/3853 dated 26.10.1979. As per the break-up, 10 Tourist Complexes including the Tourist Complexes mentioned above were transferred immediately after the incorporation of the PTDC. It was therefore pleaded that the date of acquisition of the aforesaid properties was prior to 1.4.1981 and hence the cost acquisition of the property has rightly been taken by the assessee as on 1.4.1981 and that the assessee has rightly returned the Long Term Capital Gains on the sale of land beneath the buildings.
9. The Ld. CIT(A), after considering the above submissions of the assessee and after going through the relevant records, observed that M/s Punjab Tourism Development Corporation Limited (PTDC) (assessee) was incorporated on 26.3.1979 vide registration No. 3951 dated. 26.03.1979. PTDC was incorporated in consequent to the letter No. 3236-STC-778/3853 dated 26.10.1978 which was from the Secretary to Government, Punjab Tourism and Cultural Affairs, Archaeology and Museums Department, 8 Punjab, Chandigarh. Through this letter, it was conveyed that the Governor of Punjab was pleased to accord sanction to the setting up of Punjab Tourism Development Corporation from the date it was registered. That first meeting of the Board of Directors of PTDC was held on 9.4.1979 and various decisions were taken. As per Resolution No. 1.7, the Board of Directors of PTDC resolved that the assets of the Tourism Directorate be taken over and its value would be treated as investment in the corporation as share capital of the State Government. As per item No. 30.2 of Meting of Board of Directors held on17.03.1986, a decision was taken to allot shares to the Government of Punjab in consideration of the transfer of entire assets of Director of Tourism, tentatively valued at Rs. 1,50,59,710.89. However, subsequently out of these assets, Tourism Bungalow at Shahpur Kandi and Youth Hostel, Amritsar were not transferred to the assessee. Due to this, the value was worked out at Rs. 1,42,25,495/- towards the value of the remaining building and serviceable current assets. Finally 1,42,554 equity shares of Rs. 10 each fully paid up bearing No. 272,400 to 414,654 were allotted in the name of governor of Punjab in consideration of the assets transferred to PTDC by the Directorate of Tourism. That all the assets were transferred by the Director of Tourism by way of Physical possession and no Conveyance Deed was executed at the time of the transfer of the assets. Further as per the first Annual report and Accounts for the year 1979-80, PTDC showed assets transferred from the Directorate of Tourism in its Accounts and claimed depreciation etc. Note No.1 to the accounts explained the entire transaction of transfer of assets by the Directorate of Tourism. Thereafter, PTDC has 9 been consistently showing these assets as part of its fixed assets and claimed depreciation and other expenses relating to these in its accounts and tax returns and the same were accepted by the Department of Income Tax and no objection were raised by the Department of Income Tax at any stage subsequently with regard to the ownership of the assets and other related transactions. The Ld. CIT(A) examined the records and the relevant evidences regarding each of the aforesaid properties and gave his findings as under:
"1. Tourist Complex, Moga I find that the assessee submitted the handling over and taking over physical possession of the land by the office of Director, Tourism to the Assessee company on 11.7.1988 without any cost. I father find that this property was inaugurated by the Hon'ble Minister of State for Tourism, Cultural Affairs, Information and Public Relation, Punjab on 12.11.1993. I find that the physical possession was handed over to the assessee, without conveyance deed or sale at that point of time. The Assessing officer did not accept these documents as cogent and reliable evidence in support of the claim of the assessee and rejected the claim of the assessee by citing reasons as stated in Para 6.2 of the assessment order. I find that handing over the physical possession to the assessee company on 11.7.1988 by a formal letter, is a positive evidence supporting the handing over of the physical possession. In view of the provisions of section 2(47) of the Income-tax Act, 1961, date of physical possession of the property would be treated as the date of acquisition in the hands of the buyer and therefore, in 10 this case date of acquisition would be taken on 11.7.1988 and the cost of acquisition of Rs. NIL.
2. Tourist Complex, Kapurthala I find that this property was transferred to the assessee by way of physical possession on 12.5.1989 without any cost. The assessee has taken the physical possession of this property from Municipal Committee on 12.5.1989. In view of this, I am of the opinion that 12.5.1989 being date of physical possession, should be considered as the date of acquisition by applying the provisions of section 2(47) of the Income-tax Act, 1961 and the cost of acquisition at Rs. NIL.
3. Tourist Complex, Pathankot I find that this property was transferred and physically handed over to the PTDC on 09.4.1979. In support of this I find that the assessee has placed on record various documents such as the memorandum duly approved by the Councils of Ministers for the purpose of setting up the assessee Corporation and transfer of certain properties including this property, consequent of the Government of Punjab on this, Resolution No. 17 of the first meeting of the Board of Directors of the assessee for the purpose of taking over certain assets including this property. The assessee further placed on record the first annual accounts of the assessee for the year 1979- 80 showing this property as its own property in the fixed assets schedule of the balance sheet and also claimed the depreciation thereon. The concerned Assessing officer accepted the tax return of the assessee and raised no objection in respect of the ownership of this asset at any stage after 09.04.1979. In view of this I am of the view 11 that 09.04.1979 should be taken as the date of acquisition of this property by the assessee.
4. Tourist Complex, Madhopur.
The assessee submitted that the land of this property was transferred to the assessee by physical possession on 02.05.1979. The assessee also placed on record copy of Intkaal that showed the name of the assessee on 07.02.1992. I find that the assessee has not placed on record any evidence in respect of physical possession and, therefore, the date at which entry with regard to the name of the assessee as stated in Intkaal i.e. 07.02.1992, is hereby taken as date of acquisition in the hands of the assessee.
5. Tourist Complex, Sanghol The assessee placed on record documents relating to taking over the physical possession of the land between the assessee and the Revenue department. As per the document, physical possession was given to the assessee on 06.07.1994. The assessee also made payment of Rs. 4,95,000./- on account of land. By applying the provisions of section 2(47) of the Income-tax Act, 1961, date of physical possession i.e. 06.07.1994 is taken as date of acquisition in the hands of the assessee.
6. Tourist Complex, Jalandhar The assessee placed on record allotment letter from the office of the Improvement Trust, Jalandhar at a total cost of Rs. 5,82,900/-. As per the documents, land of Yatri Niwas, was handed over physically on 04.08.1996. By applying the provisions of section 2(47) of the Income- tax Act, 1961, date of physical possession i.e. 04.08.1996 12 is taken as date of acquisition in the hands of the assessee.
7. Tourist Complex, Shambhu I find that this property was transferred and physically handed over to the PTDC on09.04.1979. in support of this, I find that the assessee had placed on record various documents such as the memorandum duly approved by the Councils of Ministers for the purpose of setting up the assessee Corporation and transfer of certain properties including this property, Consent of the Government of Punjab on this Resolution No. 17 of the first meeting of the Board of Directors of the assessee for the purpose of taken over certain assets including this property. The assessee further placed on record the first annual accounts of the assessee for the year 1979- 80 showing this property as its own property in the fixed assets schedule of the balance sheet and also claimed the depreciation thereon. The concerned also accepted the tax return of the assessee and raised no objection in respect of the ownership of this asset at any stage after 09.04.1979. In view of this, I am taking 09.04.1979 as the date of acquisition of this property in the hands of the assessee.
8. Tourist Complex, Hoshiapur, The assessee was transferred this property by Provincial Government for a total consideration of Rs. 5,91,415/-. In support of the ownership, a copy of Fard was placed on record. Copy of Fardshows the entry in the name of the assessee on10.08.1988 which in my opinion will be considered as the date of acquisition for the purpose of computation of capital gains.13
24. I find that all the properties as stated above were transferred earlier by way of physical possession or by entry in the Revenue record or by way of conveyance deed. I do not find any of the above stated properties were transferred to the assessee by way as specified in Section 49 of the Income Tax Act, 961. The assessee has not placed any evidence or material in support of its claim u/s 49 of the Income-tax Act, 1961. Therefore, the claim of the assessee to this effect tis rejected and not sustainable on facts and in law."
10. Now both the parties are in appeal before us. We have heard the rival submissions and have also gone through the record. The Revenue has mainly relied upon the recitation in the sale deeds of the respective properties vide which lands have been further transferred by the assessee to the third parties wherein it has been mentioned that the ownership of the properties described in the Schedule 'A' was transferred to the assessee Corporation from the Department of Tourism & Cultural Affairs, Government of Punjab vide Notification dated 2.11.2004 (as reproduced above) in para 6 of this order. The Revenue in this respect has also relied upon the decision of the Amritsar Bench of the Tribunal dated 29.4.2011 in the case of M/s Amritsar Hotel Ltd Vs. DCIT, ITA No. 1096/Chd/2010 for assessment year 2007-08 wherein the Tribunal while dealing with the dispute relating to the capital gain on entire property at Amritsar has relied upon the recitation in the sale deed regarding the passing of the full ownership of the said property vide notification dated 2.11.2004. The 14 Tribunal observed that the PTDC had become absolute ownership of the property from the Department of Tourism and Cultural Affairs vide notification dated 2.11.2004 (supra). The Tribunal thus observed that from the aforesaid recital in the Deed of Conveyance the absolute ownership inclusive of legal title and possession of the property transferred by the assessee company to the purchaser was acquired by it on 2.11.2004 from the Government of Punjab. The Tribunal observed that having recited in the sale deed that the assessee had become absolute ownership of the property on 2.11.2004, the assessee company could not be allowed to turn around at this stage and deny the aforesaid facts stated in the conveyance deed. However, the Ld. Counsel for the assessee, before us, has submitted that the conveyance deeds for sale of property at Kapurthala, Pathankot, Jalandhar, Shambu and Hoshiarpur have been got modified vide registered modification deeds, wherein, it has been conveyed that it had been wrongly recorded that the first party (PTDC) got the ownership and possession of properties from the Government of Punjab vide notification dated 2.11.2004, which has been substituted with the exact dates of acquisition of the respective properties. He has further submitted that the Ld. CIT(A) has thoroughly discussed about the relevant documents vide which land and building of different tourist complexes were transferred to the assessee from Punjab Tourism Development Corporation (PTDC).
11. We have considered the rival contentions. In our view, merely because in the mutation records, due to certain reasons, the property remained standing in the name of Department of Tourism before the issue 15 of notification dated 2.11.2004, that itself is not enough to hold that the property was not transferred to the assessee. Even the recitation in the respective sale deeds (vide which the property was further transferred by the assessee to third parties) regarding the transfer of the property to the Corporation on 2.11.2004 has also been got modified by way of registered modification deeds. In this way the said recitation of notification dated 2.11.2004 stood substituted in the respective sale deeds with the relevant dates on which the assessee claims to have taken over each of the propert y from the Tourism Department. As per the modification deed dated 5.6.2013 in respect of property situation at Shalimar Gardan, Kapurthala, the date of transfer of the property from Punjab Tourism Department to the PTDC has to be read vide letter No. 26/59/90/LR.V/9487 dated 6.6.91 issued by Government of Punjab Department of Revenue. The letter No. PTDC/Projects Kapurthala /91 20361-62 dated 24.12.1991 has to be read instead of Government of Punjab Notification dated 2.11.2004. Similarly, in respect of property at Gulmohar Tourist Complex, Pathankot, it is to be read as per conveyance deed vide Government of Punjab Memo No. 3236-3T&C-78/385-30 dated 26.10.1978 and the possession vide Board of Director of Tourism Resolution dated 9.4.1979. In respect of property situated at Master Tara Singh Nagar, Jalandhar, the conveyance of the property to the PTDC is to be read vide memo No. JIT/2971 dated 4.8.1986 from Jalandhar Improvement Trust. In respect of property at Kachnar Tourist complex, Shambu it is to be read as conveyed to the PTDC vide Government of Punjab No. Memo No. 3236-3T&C-78/385-30 dated 26.10.1978 and the possession taken vide Board of Director of 16 Tourism Resolution dated 9.4.1979. In the Modification deed relating to the property at Lajwanti Tourist Complex, Hoshiarpur, the same is to be read as transferred to the PTDC vide Government of Punjab notification dated 5/7/2002/1/TC/929 dated 21.5.2003. Thus the recitation in the respective sale deeds regarding the conveyance of the properties in question vide notification dated 2.11.2004 has already been substituted as discussed above.
12. In our view, reliance solely cannot be placed on the recitation either in original sale deeds or in the modified sale deeds (executed by the assessee in favour of third parties) regarding the actual dates of acquisition of the properties by the assessee corporation. The issue is required to be examined in the light of relevant evidences in this respect. It is also pertinent to mention here that the entry in the mutation records, though, is indicative of the ownership of the property but the same cannot be said to be the title of ownership of property. Sometimes, the ownership gets transferred to other party but the entry in the mutation record is not recorded, which may create certain doubts and disputes between the transferee and transferor or confusion to the public in general. The case of the assessee is also that to remove the confusion about the ownership and title of the property so that there should not be any doubt to the prospective buyers, another notification of 2004 was issued by the Government of Punjab conveying in clear terms the ownership of the properties in question to the assessee corporation so that it may be able to sell the same to the third parties without any hindrance. However, 17 subsequent notification issued by the government had not nullified the earlier letters of conveyance of the properties to the Corporation.
13. We agree with the above contentions raised by the Ld. AR of the assessee. Just because that there should not be any problem in further conveyance of the property to the prospective buyers to remove all types of doubts and ambiguities, if a fresh notification of 2004 was passed, that cannot be said to have nullified the earlier transactions of conveyance of the properties to the Corporation. It is open to the assessee to establish by way of evidence the dates of acquisition of the respective properties as per the provisions of Income Tax Act. Though, in common parlances the provisions of the transfer of property act are relevant to determine the date of transfer and the transfer is deemed to be complete on the execution of regd. sale deed, however, for determination of income Tax liability, the transfer is to be seen under the provisions of the Income Tax Act. By saying so, we do not mean that the subsequent notification of 2004 has no value or validity; if the assessee fails to prove by other evidence that the transfer was complete (as per the provisions of the Income Tax act) prior to the issue of notification, then the date of notification can be taken as the date of transfer.
14. We have examined the evidences relied upon by the assessee and as discussed by the Ld. CIT(A) in respect of acquisition of each of the property in dispute by the assessee corporation. Now we will deal about the date and cost of transfer of property/land in respect of each of the 18 Tourism complexes transferred by the Department of Tourism to the assessee Corporation: -
(i) In respect of property at Moga, Ld. CIT(A) has relied upon the letter dated 11.7.1988 and concluded that on the said date the assessee came into the possession of the said property and that the transfer was complete as per the provisions of section 2(47) of the Income-tax Act.
We have gone through the documents dated 11.7.1988 which are the copies of the daily diary (roznamcha) for the year 1987-88 from the register of the Patwari / Land Revenue Officer. According to these documents, the possession of land at Moga bearing Khasra No. 153 has been transferred by Provincial Government in favour of Tourism Department, Punjab with the approval of the Dy. Commissioner Faridkot. The Ld. Counsel for the assessee has stated that in fact on the said date, it was the assessee Corporation which has taken over actual affairs of the Tourism Department and that the possession of the land in fact was the transferred to the assessee corporation, however, the name of the Tourism Department has been wrongly mentioned.
It is the case of the assessee Corporation that the properties of Tourism Department were taken over by the Assessee Corporation. But from the said documents, it is gathered that before 11-07-1988 the Tourism Department was not owner of the land in question rather the same was used to be leased out 19 by the State Government to the private persons through Dy. Commissioner, Faridkot. In view of this, in our view, the issue is required to be re-examined;
(ii) Similar is the position relating to the land at Kapurthala. Relevant documents relied upon by the assessee and discussed by CIT(A) such as letter dated 12.5.1989 of the President, Municipal Council, Kapurthala to the Director Tourism Department, Punjab and of the Under Secretary, Government of Punjab to Dy. Commissioner Kapurthala, depict that the land was transferred by the Provincial Government to the Tourism Department, Punjab. The name of the assessee corporation does not figure;
(iii) & (iv): In respect of Tourist Complex, Pathankot and Tourism Complex, Shambu, the relevant documents relied upon by the assessee and discussed by the CIT(A) are not conclusive of the evidence as to when the land in respect of the aforesaid tourism complexes was transferred to the assessee. So far as the reliance of the assessee on the letter of memorandum No. 3236- 3T&C/78/385-30 dated 26.10.1978 is concerned, the same reveals the decision of the Government of Punjab for setting up of Punjab Tourism Development Corporation and it has been decided that the entire assets in the Department of Tourism tentatively valued at Rs. 15059710.89 will be transferred to the 20 Corporation as equity by book entry involving no cash out flow. Further another letter dated 3235-3TC-78/36332 dated 26.10.1978 shows that the Secretary to the Government of Punjab has decided to wind up the Directorate of Tourism. In Para 3 of the said letter, it has been mentioned as under:-
"3. The first problem would be regarding the transfer of the assets of the Department to the Corporation. Accordingly, to the advice of the Department of Planning, these assets have to be evaluated precisely. It is, therefore, suggested that necessary action in this behalf may be taken immediately so that the assets may be transferred by the Director, Tourism to the Managing Director of the Corporation."
The above mention shows that it was decided to transfer all the assets of the Tourism Department to the Assessee Corporation which were to be transferred by further action. This letter can not be said to be the deed of conveyance or confirmation of transfer of assets of the Tourism Department to the assessee Corporation on the said date;
(v) In respect of the Tourist Complex at Madhopur, the assessee has relied upon the letter of the Dy. Secretary, Tourism dated 1.6.1981 addressed to the Financial Commissioner, Irrigation and Secretary to Government of Punjab wherein it has been mentioned that the government has decided to set up a motel at Madhopur Headwork adjacent to the existing snack bar 21 being already run by the Punjab Tourism Development Corporation. It was, therefore, requested that the land at which the motel is to be built may be transferred to the Tourism Department at book value for the construction of the Motel. Further, there is a letter dated 10.1.1992 vide which a sanction has been accorded by the Chairman and the Managing Director of the Punjab Tourism Development Corporation to release the payment of Rs. 1,96,600/- to the Sub Divisional officer, Irrigation Department, Madhopur on account of cost of land for the Coral Bar and Restaurant, Punjab. The total cost has been mentioned as Rs. 2,22,600/-, already paid Rs. 26,000/- and the balance to be paid Rs. 1,96,600/-. Before proceeding further we may mention here that most of the documents relied upon b y the assessee are not readable. Even though, in the letter dated 1.6.1981, it has been mentioned that the motel will be run by the Punjab Tourism Development Corporation, however, request has been made to transfer the land in favour of the Department of Tourism Punjab;
(vi) So far as the property at Sanghol is concerned, the assessee has relied upon certain documents such as copy of the order dated 22.2.1994 and other letters. However, the same are not readable. It is also not clear whether the letters is question were addressed to the Tourism Department, Punjab or to the assessee Corporation.
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(vii) In respect of property at Jalandhar, the assessee Corporation was allotted land bearing 7 Kanals 5 marlas for construction of Yatri Niwas by the Improvement Trust, Jalandhar vide letter dated 4.8.1986 for a consideration of Rs. 5,82,900/-. From the letter dated 4.8.1986 it is established that the land at Jalandhar was allotted to the assessee by Jalandhar Improvement Trust for a consideration of Rs. 5,82,900/-, hence, in case of property at Jalandhar, it is held that the date of acquisition is 4.8.1986 and the cost of acquisition is Rs. 5,82,900/-.
(viii) So far as the land at Hoshiarpur is concerned, vide sale deed dated 10.8.1988, one Darshan Ram transferred the property in the name of the Director Tourism, Punjab for a consideration of a sum of Rs. 5,40,540/-. Another sale deed dated 19.8.1988 by Smt. Shanti Devi herself and being General Power of Attorney of Sh. Ved Parkash and others is of the land at Hoshiarpur transferred in favour of the Director Tourism, Punjab Government for a consideration of Rs. 43,875/-. Again from the perusal of the aforesaid sale deeds, it is not clear as to whether the land was transferred to the assessee Corporation or the Tourism Department, Punjab or when did the land was transferred by the Tourism Department in favour of the assessee. It is also not clear whether the payment was made b y the assessee Corporation for purchase of the aforesaid land or 23 by the Tourism Department for and on behalf of the assessee Corporation.
15. From the above discussion, except the property at Jalandhar, the date of the transfer of the remaining properties and the cost of acquisition of the said properties by the assessee Corporation cannot be said to be conclusively determinable from the documents relied upon by the assessee and as discussed by the Ld. CIT(A). Further the assessee has relied upon certain documents such as letter dated 10.3.1981 order of the Government of Punjab dated 11.10.1982, minutes of meeting held in the office of Dairy Development Corporation dated 14.8.1979 etc. However, perusal of the aforesaid letters reveals that the same pertain to the transfer / cost of building and not of the land. These documents are the additional evidences which have not been examined by the lower authorities. The issue is required to be examined at the hands of the Assessing officer. Accordingly, except the property at Jalandhar, the matter in respect of date of transfer/acquisition of the remaining properties in question is restored to the file of the Assessing officer to examine as on what date the Punjab Tourism Development Corporation (assessee) come into the possession of each of the property and whether such possession amounted to transfer as defined u/s 2(47) of the Act, if not, then to determine the date of transfer in respect of each of the property and further to decide the cost of acquisition also and to decide whether the income earned on subsequent transfer of the properties to the third parties would fall in the 24 definition of Long Term Capital Gain or Short Term Capital Gain and compute the capital gains accordingly.
16. However, we do not agree with the contention of the Ld. AR that the property was devolved on the assessee on the establishment of the Assessee Corporation from Tourism Department, Punjab as no such document or evidence in this respect has been placed on file. Rather the evidences show that it was decided that the assets of the Tourism Department will be transferred by further separate action. In view of this, we do not find force in the contention of the assessee that the properties may be deemed to be devolved upon the assessee as per the provisions of section 49 of the Act the Act. This issue is decided against the assessee. ITA No. 787/Chd/2013 (assessment year 2007-08)
17. In this appeal, the only ground raised by the Revenue reads as under:-
On the facts and circumstances of the case and in law, the Ld. CIT(A) in appeal No. 71/12-13, has erred in deleting the following penalty:-
1. The Ld. CIT(A) has erred in facts as well as law in deleting penalty u/s 271(1)(c) because the assessee can be held to have furnished inaccurate particular of income where the assessee makes a claim of deduction, which is incorrect as per law and is not as per provisions of the Act.25
18. The issue involved in this appeal is in relation to the levy of penalty u/s 271(1)(c) of the Act; since we have restored the issue relating to the quantum additions to the file of the Assessing Officer, hence the very basis for the levy of the penalty has ceased to exist. Moreover it does not seem to be the case of furnishing of inaccurate particulars of income or concealment of income, but of difference of opinion as to the date of acquisition of the properties in question. Therefore the impugned penalty levied by the AO, at this stage, has no legs to stand and hence, the same is ordered to be deleted. However, the AO during the set-aside assessment proceedings, if so deem fit in the facts and circumstances of the case, will be at liberty to initiate fresh penalty proceedings.
19. In the result, both the quantum appeals bearing ITA Nos. 1363/Chd/10 and 1381/Chd/10 are treated as partly allowed for statistical purposes whereas penalty appeal bearing ITA No ITA No.787/Chd/13 is treated as dismissed.
Order pronounced in open court on 22.09.2017
Sd/- Sd/-
(Dr. B.R.R. KUMAR) (SANJAY GARG)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated :22. 09.2017
Rkk
Copy to:
The Appellant
The Respondent
The CIT
The CIT(A)
The DR
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