Income Tax Appellate Tribunal - Jaipur
Rajesh Sharma, Jaipur vs Department Of Income Tax on 4 March, 2016
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IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR
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BEFORE: SHRI R.P. TOLANI, JM & SHRI T.R. MEENA, AM
vk;dj vihy la-@ITA No. 105/JP/2013
fu/kZkj.k o"kZ@Assessment Year : 2009-10
The I.T.O. cuke Rajesh Sharma,
Ward 2(4), Jaipur Vs. 23/124, Swarn Path, Mansarovar,
Jaipur.
LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AILPS 6697 N
vihykFkhZ@Appellant izR;FkhZ@Respondent
jktLo dh vksj ls@ Revenue by : O.P. Bhateja (Addl.CIT)
fu/kZkfjrh dh vksj ls@ Assessee by : Shri Atul Sethi (C.A.)
lquokbZ dh rkjh[k@ Date of Hearing : 18/2/2016
mn?kks"k.kk dh rkjh[k@ Date of Pronouncement : 04/03/2016
vkns'k@ ORDER
PER: T.R. MEENA, A.M. This is an appeal filed by the revenue against the order dated 16/11/2012 passed by the ld CIT(A)-I, Jaipur for A.Y. 2009-10. The sole effective ground of appeal is as under:-
"Whether on the facts and in the circumstances of the case and in law the ld CIT(A) is justified in:-
As the assessee has purchased property for Rs. 75 lacs from his son by sale deed which was not registered. Seller
2 ITA 105/JP/2013_ ITO Vs. Rajesh Sharma has stated that this was only settlement. The assessee is not eligible for exemption U/s 54."
2. The sole ground of the revenue's appeal is against allowing deduction U/s 54 of the Income Tax Act, 1961 (in short the Act) on unregistered property purchased from son of the assessee. The assessee filed return of income on 05/12/2009 declaring total income of Rs. 54,27,550/-. The case was scrutinized U/s 143(3) of the Act. The assessee has shown his income from consultancy for insurance business, house property and income from other sources. The ld Assessing Officer observed that the assessee has shown long term capital gain of Rs. 52,10,008/- in his computation from sale of property situated at C-54, Tilak Nagar, Jaipur during the year under consideration. The Assessing Officer summoned assessee U/s 131 of the Act to the assessee and statement has been recorded. As per Assessing Officer, it has been admitted by the assessee in questions No. 2 to 5 that this property belongs to him and acquisition of this property was made in F.Y. 2004-05. The statement of the assessee has been reproduced by the Assessing Officer on page Nos. 2 and 3 of the assessment order. The assessee got construction done on plot No. C- 54, Tilak nagar, Jaipur and deductions of construction was claimed at the time of calculation of long term capital gain. The computation has 3 ITA 105/JP/2013_ ITO Vs. Rajesh Sharma also been reproduced on page No. 3 of the assessment order. At the time of return, the assessee had claimed deduction U/s 54 of the Act at Rs. 75 lacs for purchase of a new house. The ld Assessing Officer asked to furnish details of deductions claimed U/s 54 for Rs. 75 lacs. The assessee had filed a copy of agreement for purchase of house at B-37, New Lite Colony, Jaipur. It was noticed by the Assessing Officer that this sale agreement was executed on 29/4/2009 between Shri Nishant Sharma, son of the assessee and Shri Rajesh Sharma, assessee for B- 37, New Lite Colony, Tonk Road, Jaipur but there was no registered deed produced by the assessee for this purpose. The ld Assessing Officer also issued summons to son of the assessee Shri Nishant Sharma and statement U/s 131 also recorded by the Assessing Officer. The Assessing Officer cross verified the sale of plot No. B-37, New Lite Colony, Tonk Road, Jaipur to assessee and asked that he has not disclosed capital account on account of sale of this property. During the course of statement, he admitted that this was only a settlement, therefore it was not shown in his income tax return. The ld Assessing Officer concluded that the assessee had not purchased any house for claiming deduction U/s 54 of the Act. The ld Assessing Officer further relied on the decision of Hon'ble Supreme Court in the case of M/s Suraj 4 ITA 105/JP/2013_ ITO Vs. Rajesh Sharma Lamp & Industries Pvt. Ltd. Vs. State of Haryana & Anrs. 2011 STPL(Web) 879 SC wherein the Hon'ble Court has held that transfer of immovable property can be legally and lawfully transferred/conveyed only by a registered deed or conveyance. Transactions of the nature of 'GAP sales' or "SA/GPA/Will transfers" do not convey title and do not amount to transfer, nor can they be recognized or valid made of transfer of immovable property. Accordingly, he not allowed the deduction U/s 54 of the Act on Rs. 75 lacs.
3. Being aggrieved by the order of the Assessing Officer, the assessee carried the matter before the ld CIT(A), who had deleted the addition by observing as under:-
"4.3 I have carefully perused the order of the AO and the submissions of the AR along with the evidence filed. I concur with the submission of the AR on the following grounds as per the evidence on record:
1. The property was transferred vide Agreement to Sale Deed which was admittedly not registered and was executed on 29/04/2009 between Shri Nishant Sharma and Shri Rajesh Sharma. The payment was made by Shri Rajesh Sharma as per his bank statement.
2. Nishant Sharma filed a revised return on 19/01/2012 showing net capital gains of Rs. 10,97,000/- on this
5 ITA 105/JP/2013_ ITO Vs. Rajesh Sharma transfer of property on which he paid tax on capital gains of Rs.4,42,150/-.
3. Therefore, the transaction is covered u/s 2(47)(v) of the I.T. Act, 1961. To this extent even the case law relied on by the AO namely M/s Suraj Lamp & Industries Pvt. Ltd. is State of Haryana & Anrs. has mentioned that such Agreements to Sale are to be recognized to the extent of section 53A of TP Act. Since section 53A of TP Act is recognized as transfer for computing income u/s 2(47)(v) of the I.T. Act this transaction cannot be denied given the evidence on record.
Therefore, on the basis of facts and the law applicable to these facts the disallowance of deduction claimed u/s 54 of the I.T. Act of Rs.75,00,000/- is deleted.
4. Now the revenue is in appeal before us. The ld DR has vehemently supported the order of the Assessing Officer and argued that the assessee had not proved the part performance under the Transfer of Property Act and U/s 53A of the Act. Even transfer as per Section 2(47) of the Act has not been proved by the assessee. The assessee also has not got immovable property registered, therefore, this transaction is only not to pay capital gain tax by the assessee.
5. At the outset, the ld AR of the assessee has reiterated the arguments made before the ld CIT(A). It is submitted that the sale 6 ITA 105/JP/2013_ ITO Vs. Rajesh Sharma agreement between the assessee and his son is not registered but is agreement to sale. Both the assessee as well as son of the assessee Shri Nishant Sharma had been examined by the Assessing Officer U/s 131 of the Act. During the course of statement, they admitted that this transaction was only settlement and therefore it was not shown in the return of income. He further referred Section 54(1) of the Act and argued that the assessee is an individual. There was a capital gain from transfer of residential house, whose income is taxable under the head income from house property. The transfer is long term capital gain. The assessee has purchased a residential house property within the prescribed time from his son i.e. at B-37, New Lite Colony, Tonk Road, Jaipur. He further referred the transfer definition provided U/s 2(47) of the Act and submitted that there is a written contract for sale of specific immovable property. The transferee has, in part performance of the contract, taken possession of the property, or any part thereof. The transferee should have performed or should be willing to perform his part of the contract and has done some act in furtherance of the contract. The assessee had entered into an agreement for purchase of house at B-37, New Lite Colony, Tonk Road, Jaipur on 29/4/2009. The transferee had paid the said consideration of Rs. 75 lacs and is willing 7 ITA 105/JP/2013_ ITO Vs. Rajesh Sharma to fulfill other conditions and has taken over possession of the same on 29/4/2009. Therefore, the transferee gets the right over the property and has become the owner of the property, therefore, for the purose of deduction U/s 54 read with Section 2(47)(V) of the Act, the property has been transferred to him. He further relied on the decision in the case of Gripwell Industries Limited Vs. ITO 102 TTJ 0441, 99 ITD 0368 ITAT Mumbai Bench wherein transfer U/s 2(47)(iv) has been considered by the Hon'ble Bench. He further relied on the decision in the case of CIT Vs. Mrs. Shahzada Begum (1988) 173 ITR 0397 wherein after selling of residential house, the assessee has agreed to buy another property for self occupation and secure possession of the property within one year from the date of sale of other property. She is entitled for exemption from capital gain U/s 54(1) of the Act. He further relied on the various case laws and some case laws is as under:-
(i) CIT Vs R.L. Sood (2000) 245 ITR 727. (ii) Balraj Vs. CIT 254 ITR 0022.
(iii) CIT Vs. T.N. Aravinda Reddy (1997) 12 CTR (SC) 423.
(iv) CIT Vs. Vishnu Trading and investment Company 176 CTR 0169.
(v) CIT Vs Dr. Laxmichand Narpal Nagda 211 ITR 0804.
(vi) ACIT Vs Om Prakash Goyal 53 SOT 0158 Therefore, he prayed to uphold the order of the ld CIT(A).
8 ITA 105/JP/2013_ ITO Vs. Rajesh Sharma
6. We have heard the rival contentions of both the parties and perused the material on record. The assessee had claimed deduction U/s 54(1) of the Act at Rs. 75 lacs against the purchase made of a residential house at B-37, New Lite Colony, Tonk Road, Jaipur on agreement to sale from his son. The assessee has taken possession of that house from the son and paid the consideration and as per Section 2(47)(v) of the Act, the transfer as per Income Tax Act, has been completed by the assessee. It is undisputed fact that the new property purchased from his son has not registered before the stamp authority. The son also has disclosed the capital gain on sale of residential immovable property to his father in the income tax return and paid the tax on capital gain. These facts have not been controverted by the ld DR, therefore, we uphold the order of the ld CIT(A).
7. In the result, the appeal of the revenue is dismissed.
Order pronounced in the open court on 04/03/2016.
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(R.P.Tolani) (T.R. Meena)
U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member
Tk;iqj@Jaipur
fnukad@Dated:- 04th March, 2016
*Ranjan
vkns'k dh izfrfyfi vxzsf'kr@Copy of the order forwarded to:
1. vihykFkhZ@The Appellant- The ITO, Ward 2(4), Jaipur 9 ITA 105/JP/2013_ ITO Vs. Rajesh Sharma
2. izR;FkhZ@ The Respondent- Shri Rajesh Sharma, Jaipur.
3. vk;dj vk;qDr@ CIT
4. vk;dj vk;qDr¼vihy½@The CIT(A)
5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur
6. xkMZ QkbZy@ Guard File (ITA No. 105/JP/2013) vkns'kkuqlkj@ By order, lgk;d iathdkj@Asst. Registrar