Income Tax Appellate Tribunal - Chennai
M.Kandasamy, Tiruppur vs Assessee on 11 April, 2014
आयकर अपील य अ धकरण, 'डी' यायपीठ, चे नई
IN THE INCOME TAX APPELLATE TRIBUNAL
"D" BENCH, CHENNAI
डॉ. ओ. के. नारायणन, उपा य एवं
ी वकास अव थी, या यक सद य के सम
BEFORE Dr. O.K. NARAYANAN, VICE PRESIDENT &
SHRI VIKAS AWASTHY, JUDICIAL MEMBER
ITA No.864/Mds/2014
&
S.P. No.136/Mds/2014
(in ITA No.864/Mds/2014)
Assessment Year : 2009-10
Shri. M. Kandasamy, The Income Tax Officer,
7, Bridgeway Colony Extension, Vs Ward I(4),
th
4 Street, Kongu Main Road, Tirupur.
Tirupur 641 607.
[PAN :ADWPK0634K]
(अपीलाथ /Appellant/Petitioner) ( यथ /Respondent/Petitioner)
ITA No.865/Mds/2014
&
S.P No.137/Mds/2014
(in ITA No.865/Mds/2014)
Assessment Year : 2009-10
Smt. K. Malarvizhi, The Income Tax Officer,
7, Bridgeway Colony Extension, Vs Ward I(4),
th
4 Street, Kongu Main Road, Tirupur.
Tirupur 641 607.
[PAN :AFEPM7040P]
(अपीलाथ /Appellant) ( यथ /Respondent)
अपीलाथ क ओर से / Appellant by : Dr. Anita Sumanth, Advocate
यथ क ओर से / Respondent by : Srhi. Guru Bashyam, IRS, JCIT.
सन
ु वाई क तार ख/Date of hearing : 11.04.2014
घोषणा क तार ख /Date of Pronouncement : 23.05.2014
:- 2 -: SP Nos.136 & 137/Mds/2014
(in I.T.A.Nos.864 &865/Mds/2014 )
and I.T.A.Nos.864 &865/Mds/2014.
.
आदे श / O R D E R
PER VIKAS AWASTHY, JUDICIAL MEMBER
The assessees have filed appeals against the orders of the Commissioner of Income Tax (Appeals)-II, Coimbatore dated 26.02.2014 relevant to the assessment year 2009-10. The assessees in appeal are husband and wife. Since the issue in both appeals is similar and the facts are identical both the appeals are taken up together for adjudication. For the sake of convenience the facts are taken from ITA No.864/Mds/2014.
2. The assessee alongwith his wife sold two properties vide sale deed Nos.6157, 6158 and 6159 dated 22.12.2008. The said properties were purchased by one M/s. Ponmudy Muthusamy Gounder Trust. The trust was represented by assessee himself as Managing Trustee of the trust. The Assessing Officer rejected the sale consideration disclosed by the assessees in their respective returns of income for the purpose of computing Long Term Capital Gains. The Assessing Officer adopted the value as determined u/s.50C of the Income Tax Act, 1961 (herein after referred to as 'the Act'). Aggrieved against the :- 3 -: SP Nos.136 & 137/Mds/2014 (in I.T.A.Nos.864 &865/Mds/2014 ) and I.T.A.Nos.864 &865/Mds/2014.
.
assessment orders the assessees carried appeals to the Commissioner of Income Tax (Appeals). Before the Commissioner of Income Tax (Appeals), the assessees submitted that inadvertently properties in question were sold in violation of provisions of the Tamil Nadu Reforms (fixation of ceilings of Land) Act, 1961. The sale deeds were declared null and void by the Lok Adalat at Tirupur vide award dated 8.12.2012. The Commissioner of Income Tax (Appeals) demanded cancellation document of the registered sale deeds. Since the assessees were unable to produce cancellation deed, the Commissioner of Income Tax (Appeals) dismissed the appeals of the assessees. Aggrieved against the orders of the Commissioner of Income Tax (Appeals), the assesees have come in second appeal before the Tribunal.
3. Dr. Anita Sumanth, Advocate appearing on behalf of the assessees submitted that the transaction of sale of land has been cancelled by the Lok Adalat Award dated 08.12.2012. Since there is no sale transaction there is no question of Capital Gains and the provision of Sec. 50C cannot be invoked on cancelled transaction. The learned Counsel further submitted that the assessees have applied for cancellation deeds and the same shall be produced as and when the :- 4 -: SP Nos.136 & 137/Mds/2014 (in I.T.A.Nos.864 &865/Mds/2014 ) and I.T.A.Nos.864 &865/Mds/2014.
.
same is received. The ld. Counsel produced a photocopy of the Lok Adalat Award, Tirupur Taluk dated 08.12.2012.
4. On the other hand, Shri. Guru Bhasyam, representing the department vehemently supported the impugned orders. The learned departmental representative (DR) submitted that the assessees had not produced any document for cancellation of deeds before the authorities below. This clearly shows that the trust is enjoying the properties. Since the properties were transferred to the trust, the assessees are liable to pay Long Term Capital Gains as computed by the Assessing Officer.
5. We have heard both sides and have pursued the orders of the authorities below as well as the photocopy of the Lok Adalat Award, dated 08.12.2012. It is an undisputed fact that the assessees had sold two properties to M/s. Ponmudi Muthusamy Gounder Trust vide sale deed Nos.6157, 6158 & 6159, all dated 22.12.2008. Subsequently, it transpires that the assessees had executed sale deeds in violation of section 37B of the Tamil Nadu Land Reforms(fixation of ceilings of Land) Act, 1961. The aforesaid sale deeds registered with Sub- Register, Tirupur executed in favour of the trust were declared null and void by Lok Adalat vide its award dated 08.12.2012. The :- 5 -: SP Nos.136 & 137/Mds/2014 (in I.T.A.Nos.864 &865/Mds/2014 ) and I.T.A.Nos.864 &865/Mds/2014.
.
Commissioner of Income Tax (Appeals) has dismissed the appeals of the assessees on the ground that the assessees have not been able to produce any document showing cancellation of sale deeds.
6. An Award of Lok Adalat either on merits or in terms of settlement agreement shall be final and binding on all the parties thereto and on persons claiming under them. As per Sec.22 E of the Legal Services Authorities Act, 1987, every award of Lok Adalat is deemed to be a decree of a Civil Court.
In view of the fact that the sale deeds have been declared as null and void by the award of Lok Adalat, we are of the considered opinion that there is no further requirement for seeking cancellation deeds. Before us, the learned Counsel has produced a photocopy of the award. We remit the issue back to the Assessing Officer and direct the assessees to produce a certified copy of the Lok Adalat Award dated 8.12.2012 passed in Lok Adalat Case No.99/2012 between Mrs. Savitha Mohanraj vs. M/s. Ponmudi Muthusamy Gounder Trust, before the Assessing Officer. The Assessing Officer after verifying the award shall pass necessary order, in accordance with law.
:- 6 -: SP Nos.136 & 137/Mds/2014 (in I.T.A.Nos.864 &865/Mds/2014 ) and I.T.A.Nos.864 &865/Mds/2014.
.
7. The appeals of the assessees are allowed for statistical purposes.
8. The assessees have filed petitions for stay of impugned orders in the respective appeals. Since the appeals have been disposed off, the stay petitions have become infructuous and are dismissed as such.
Orders pronounced on Friday, the 23rd of May, 2014, at Chennai.
Sd/- Sd/-
(डॉ. ओ. के. नारायणन) ( वकास अव थी)
(DR. O.K. NARAYANAN) (VIKAS AWASTHY)
उपा य / VICE PRESIDENT या यक सद य /JUDICIAL MEMBER
चे नई/Chennai
दनांक/Dated:23.05.2014.
K.V
आदे श क त ल प अ े षत/Copy to: 1. अपीलाथ /Appellant 2. यथ /
Respondent 3. आयकर आयु त (अपील)/CIT(A) 4. आयकर आयु त/CIT
5. वभागीय त न ध/DR 6. गाड फाईल/GF.
:- 7 -: SP Nos.136 & 137/Mds/2014
(in I.T.A.Nos.864 &865/Mds/2014 )
and I.T.A.Nos.864 &865/Mds/2014.
.