Income Tax Appellate Tribunal - Hyderabad
Bhavya Anant Udeshi, Hyderabad vs Assessee on 29 October, 2014
IN THE INCOME TAX APPELLATE TRIBUNAL
HYDERABAD BENCH "A", HYDERABAD
BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER
AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER
M.A. No. 118/Hyd/2014
(In ITA No. 1200/HYD/2011
Assessment Year: 2008-09)
Smt. Bhavya Anant Udeshi, ... Applicant
Hyderabad.
PAN - AALPU 3857A
Vs.
Income-tax Officer
(International Taxation)- I, ... Respondent
Hyderabad.
Assessee by : Shri Ajay Gandhi
Revenue by : Shri R. Mohan Reddy
Date of Hearing : 05/09/2014
Date of Pronouncement : 29/10/2014
ORDER
PER SAKTIJIT DEY, J.M.:
This Miscellaneous Application has been filed by assessee seeking rectification of mistake supposed to have crept into the order of the Tribunal in ITA No. 2100/Hyd/2011 dated 04/042014.
2. The first mistake, according to the assessee, which the Tribunal has committed is with regard to applicability of section 50C of the Act. In this respect assessee's contention is twofold. Submissions of the assessee in miscellaneous application and written submissions is, as assessee has challenged the valuation of the property for stamp duty purposes before the Collector and District 2 MA No. 118/Hyd/14 Smt. Bhavya Anant Udeshi Registrar, it is coming within the exception provided under section 50C(2)(b), hence, outside the ambit of section 50C. It was submitted by assessee that though the Tribunal has taken note of the submissions of assessee on this issue, however, while disposing of the appeal, the Tribunal has not passed a speaking order in the matter. The further submissions of assessee on applicability of section 50C is, as the property was transferred by assessee prior to coming into existence of section 50C in the statute, the said provision is not applicable in case of assessee. Further, to substantiate the claim that property was transferred in 1994 i.e. prior to insertion of section 50C to the statute, assessee has submitted that there is an agreement between the assessee and Smt. Neeraja Reddy on 20 th April, 1994, as per which, assessee transferred the property in question to Smt. Neeraja Reddy and handed over possession. In this context, he has referred to a letter of assessee submitted before the Jubilee Hills Cooperative House Building Society on 22/11/97. The learned AR submitted that the Tribunal while coming to its conclusion has not taken into consideration this evidence. The learned AR submitted that special power of attorney given by assessee to G. Yeshwant Reddy in conjunction with the transfer letter submitted before the society on 22/11/97 will make it clear that it was given as part of the agreement to sell the plot. He submitted that Smt. Neeraja Reddy has filed a writ petition before the Hon'ble High Court of AP, which was decided in her favour. This evidence shows that she was the buyer desirous of transfer getting effectuated, which she had sought for while applying transfer of plot in her name in letter dated 12/0-3/2001. The learned AR referring to the sale deed dated 23/10/07 between assessee and Shri G. Srinivasa Reddy submitted that not only it proves that the sale consideration of Rs. 1 lakh was paid to assessee by Smt. Neeraja Reddy, but, also delivery of possession of the plot in 1994. He submitted that the ITO also made enquiries with the purchaser Shri G. Srinivasa Reddy, who confirmed the fact that he purchased the plot from Smt. Neeraja Reddy for consideration of Rs. 1 lakh. Thus, it was submitted that all these 3 MA No. 118/Hyd/14 Smt. Bhavya Anant Udeshi evidences conclusively prove that there was preexisting agreement under which assessee had agreed to transfer the property to Smt. Neeraja Reddy in 1994. He submitted that regardless of transfer getting effected in terms of section 2(47) existence of an agreement to transfer the plot prior to 2003 makes section 50C inapplicable. It was submitted, the Tribunal while deciding the issue has not considered the applicability of section 50C in the light of the aforesaid evidences. Another mistake as pointed out in the miscellaneous application is, while deciding the appeal, the ITAT has failed to decide ground Nos. 8 & 9. The learned AR therefore contended for recalling the order passed by the Tribunal.
3. The learned DR, on the other hand, strongly refuting the contentions of assessee submitted that the Tribunal having passed the order after considering the submissions of the parties and all the facts and materials on record, it cannot be said that there is a mistake in the order of the Tribunal for non-consideration of assessee's submissions or evidences filed by assessee. The learned DR submitted that in the guise of M.A., assessee is seeking a review of the order passed by the Tribunal, which is outside the purview of section 254(2).
4. We have considered the submissions of the parties and perused the materials on record. As far as the submissions of the learned AR that provisions of section 50C is not applicable since assessee has challenged the stamp duty valuation made by the registering authority by preferring an appeal before the Collector and District Registrar, we find the same to be devoid of merit. A plain reading of section 50C as a whole makes it clear that filing of an appeal against valuation made by the stamp duty valuation authority for stamp duty purposes only makes the provision contained u/s 50C(2) inapplicable. However, so far as the applicability of section 50C(1) is concerned, filing of such appeal has absolutely no effect. In view of the aforesaid, we are unable to accept the contentions of the learned AR. So far as the non-
4 MA No. 118/Hyd/14Smt. Bhavya Anant Udeshi appreciation/non-consideration of evidences filed by assessee is concerned, as can be seen, the primary submissions of assessee in this regard is the letter submitted by assessee before the society on 22/11/97 clearly establishes the transfer of property by assessee in favour of Smt. Neeraja Reddy on 20/04/94 but which has not been considered by the Tribunal. However, on a perusal of the said letter, a copy of which is at page 24 of paper book would make it clear that though the letter is dated 20/04/94, but, it was submitted before the Jubilee Hills Cooperative House Building Society on 22/11/97 as per the endorsement made therein. Be that as it may, the filing of the said letter does not ipso-facto result in a transfer of the property in the name of Smt. Neeraja Reddy in absence of any other documentary evidence which shows conveyance of the property in favour of Smt. Neeraja Reddy. So far as assessee's contention that special power of attorney read in conjunction with letter submitted before the Jubilee Hills Cooperative House Building Society on 22/11/97 proves that there is an agreement to sale the plot, it is to be noted that the Tribunal while considering assessee's appeal has exhaustively dealt with the terms and conditions of the special power of attorney and has held that nowhere it speaks of transfer of plot in the name of Smt. Neeraja Reddy.
5. It is the contention of assessee that the Hon'ble High Court of AP while deciding writ petition filed by Smt. Neeraja Reddy proves that she was a buyer of the property desirous of getting it transferred in her name. However, from the facts on record, it appears that the High Court in the order passed in the writ petition in W.P No. 24202 of 1998, though, directed the Jubilee Hills Cooperative House Building Society to consider the application of assessee in accordance with bye-law of the society for admission as member and transfer of interest of other existing shareholders, it does not specifically refers either to assessee or to the property of assessee. Even assuming that the Hon'ble High Court has issued the writ to the society to consider the transfer letter and applications filed by Smt. Neeraja Reddy, there 5 MA No. 118/Hyd/14 Smt. Bhavya Anant Udeshi is no documentary evidence available on record, which could establish that Smt. Neeraja Reddy was either accepted as a member of the society or the plot belonging to assessee was transferred to her name, even after the order was passed by the Hon'ble AP High Court on 19/07/2000. On the contrary, the Jubilee Hills Cooperative House Building Society executed the registered sale deed in favour of the assessee on 15/12/06 in respect of the said property.
6. Further, it is the claim of assessee that the sale deed executed between assesesee and the ultimate buyer Shri G. Srinivasa Reddy clearly states that Smt. Neeraja Reddy had paid sale consideration of Rs. 1 lakh to assessee and took possession of the plot in 1994. Though, it may be a fact that there are recitals in the sale deed dated 23/10/07 between assessee and the ultimate buyer of property Shri G. Srinivasa Reddy to the effect that the assessee has received sale consideration of Rs. 1 lakh from Smt. Neeraja Reddy and handed over the possession of the property in 1994. However, clause (5), (6), (7) & (8) of the said sale deed makes it abundantly clear that on the date of sale, assessee still retained her ownership as well as other ancillary and incidental rights over the property. The said recitals in agreement not only has no reference to Smt. Neeraja Reddy but also makes it clear that it is the assessee who is responsible in respect of any claim or right or interest over the schedule property by third parties and indemnifies the purchaser in respect of the said claim. Therefore, considered in the aforesaid perspective when assessee retains her absolute ownership rights as per clause 5.1 of sale deed over the property and absolute right to alienate the property in favour of the purchaser, the so called handing over of possession in favour of Smt. Neeraja Reddy becomes meaningless. Furthermore, there is no documentary evidence to show that physical possession over the property was actually handed over in favour of Smt. Neeraja Reddy except recitals in the sale deed. If assessee's claim that the property was transferred to Smt. Neeraja Reddy in 1994 is correct, then, there was no necessity of assessee 6 MA No. 118/Hyd/14 Smt. Bhavya Anant Udeshi taking responsibility of indemnifying purchaser in the event of any future claim over the said property. It is also to be noted that the Tribunal in the appeal order has not only given a finding that there is no proof of payment of sale consideration of Rs. 1 lakh by Smt. Neeraja Reddy to assessee but the fact that assessee applied for permission to construct a house over the said plot in 2006 also proves that assessee was the owner of the property till it was sold to Shri G. Srinivas Reddy in the impugned assessment year. It is also relevant to note, the assessee herself declared the capital gain in the impugned assessment year and not in any earlier assessment year. In the aforesaid facts and circumstances, the contention of assessee that Tribunal has committed a mistake by not taking into consideration all these facts and evidences while considering assessee's submission in respect of applicability of section 50C, in our view, is without merit. As can be seen, on a perusal of the order passed by the Tribunal, it is very much clear that after considering all the facts and materials on record as well as the submissions of the assessee and decisions relied upon by the assessee, the Tribunal consciously came to a conclusion in para 16 of the order that the property was transferred by assessee in the AY under consideration, hence, upheld the applicability of section 50C.
7. Further, it will be pertinent to mention here that the ultimate purchaser Shri G. Srinivasa Reddy with whom assessee executed sale deed admittedly paid an amount of Rs. 74.20 lakhs to assessee. Though, it is the claim of assessee that she received the aforesaid amount from the purchaser for protecting her against future income- tax liability, but, in our view such claim is not acceptable. If the assessee has already transferred the property in favour of Smt. Neeraja Reddy in the year 1994, then, there is no reason why the purchaser should pay a substantial amount of Rs. 74.20 lakhs to assessee while executing the sale deed. As far as the contention of assessee while deciding the issue, Tribunal has not considered certain evidences submitted by assessee, such as, transfer letter dated 22/11/97, letter filed by smt. Neeraja Reddy in 2001, it is to be 7 MA No. 118/Hyd/14 Smt. Bhavya Anant Udeshi observed that the Tribunal has taken cognizance of these evidences while recording assessee's argument, which is clearly evident from the order of the Tribunal. Therefore, it cannot be said that the Tribunal has not considered these evidences only because they do not find any reference in the finding of the Tribunal. The Hon'ble Supreme Court in case of CIT Vs. Karam Chand Thapar and Bros. P. Ltd., 176 ITR 535 has held as under:
"It is equally settled that the decision of the Tribunal has not to be scrutinized sentence by sentence merely to find out whether all facts have been set out in detail by the Tribunal or whether some incidental fact which appears on the record has not been noticed by the Tribunal in its judgment. If the court, on a fair reading of the judgment of the Tribunal, finds that it has taken into account all relevant material and has not taken into account any irrelevant material in basing its conclusions, the decision of the Tribunal is not liable to be interfered with, unless, of course, the conclusions arrived at by the Tribunal are perverse."
In the present case, it cannot be said that the conclusion drawn by the Tribunal is either on the basis of irrelevant materials or not considering relevant material and it cannot also be said that the conclusion drawn by the Tribunal is perverse. In fact the assessee has also not made any allegation that Tribunal has considered irrelevant materials or its conclusion is perverse. As the Tribunal has taken a decision in respect of the year of taxability on capital gain as well as the application of section 50C on overall consideration of facts and materials on record as well as the submissions made by parties, there is no reason to accept assessee's contention that the order by the Tribunal is erroneous. The decisions relied upon by the assessee and referred to in the written submissions regarding inapplicability of section 50 would have applied only in the event transfer had taken place prior to 01/04/2003. Since ITAT has held that transfer has taken place n the impugned assessment year the decisions will not apply. From the issues raised in M.A., it is very much clear that assessee is only trying to reargue his case and wants a review of the order passed by the Tribunal. This, in our view, is not within the scope and ambit of section 254(2) of the Act, which envisages rectification of mistake apparent on the face of record. Therefore, we do not find any 8 MA No. 118/Hyd/14 Smt. Bhavya Anant Udeshi merit in assessee's contention that the order passed by the Tribunal is erroneous as it has failed to consider assessee's submissions with regard to applicability of section 50C. However, as for as assessee's contention that ground Nos. 8 & 9 have not been considered by the Tribunal while deciding the appeal, we find merit in the same. On a perusal of the order passed by the Tribunal, it is clear that Tribunal has not given any finding either way on the aforesaid grounds raised by assessee. Therefore, there is a mistake in the order of the Tribunal to that extent. Accordingly, we recall the order dated 04/04/2014 of Tribunal passed in ITA No. 2100/Hyd/2011 for the limited purpose of deciding ground Nos. 8 & 9 raised by assessee according to their own merits. The registry is directed to fix ITA No. 1200/Hyd/2011 for hearing in usual course only for deciding ground Nos. 8 & 9. Parties may be intimated accordingly.
8. In the result, M.A. of the assessee is partly allowed.
Pronounced in the open court on 29/10/2014.
Sd/- Sd/-
(B. RAMAKOTAIAH) (SAKTIJIT DEY)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Hyderabad, Dated: 29 th October, 2014.
kv
Copy to:-
1) Smt. Bhavya Anant Udeshi, C/o M/s Gandhi &
Gandhi, CAs., 1007, Paigah Plaza, Basheerbagh,
Hyderabad - 500 063.
2) ITO,(International Taxation-I),Hyderabad.
3) CIT(A)-V, Hyderabad.
4) The DIT (International Taxation), Hyderabad
5) The Departmental Representative, I.T.A.T.,
Hyderabad.