Shri Raghvendra Goswami Bhopal v. The Acit 3 1 Bhopal

In The Income Tax Appellate Tribunal Indore Benche Indore Before Shri Kul Bharat Judicial Member And Shri Manish Borad Accountant Member Ita No 113 Ind 2016 Assessment Year 2009 10 Shri Raghvendra Goswami 172 C Section Industrial Area Govindpura Bhopal Vs Acit 3 1 Bhopal Appellant Revenue P A No Aazpg 0982 C Appellant By Shriashishgoyal N D Patva Ars Revenue By Shri K G Goyal Sr Dr Date Of Hearing 04 12 2017 Date Of Pronouncement 05 12 2017 O R D E R Per Kul Bharat J M This Appeal By The Assessee Is Directed Against The Order Of Ld Commissioner Of Income Tax Appeals Bhopal 2 Madh Ya Pradesh In Short Cit Dated 16 11 2015 For The A Y 200 9 10 The Assessee Has Raised Following Grounds Of Appeal 1 On The Facts And In The Circumstances Of The Ca Se The Ld Cit Was Not Justified In Upholding That The Order U S 143 3 147 Passed By The Assessing Officer Was Not Illegal Invalid And Untenable In Law Raghvendragoswami 2 2 On The Facts And In The Circumstances Of The Cas E The Ld Cit A Was Not Justified In Holding That The Assess Ing Officer Has Rightly Invoked The Provisions Of Section 50 C To Co Mpute Long Term Capital Gain At Rs 61 53 470 3 On The Facts And In The Circumstances Of The Cas E The Ld Cit A Was Not Justified In Holding That The Amendm Ent To Section 50 C From 01 10 2009 Applied Retrospectively To The Transaction That Took Place In The Assmt Year 2008 09 4 On The Facts And In The Circumstances Of The Cas E The Ld Cit Was Not Justified In Directing The Assessing Officer To Assess The Long Term Capital Gain Of Rs 61 53 470 In The Assemt Year 2008 09 In Place Of Rs 22 50 190 Wh Ich Was Already Assessed U S 143 3 And In This Way To Incr Ease The Capital Gain By Rs 39 03 280 In The Assmt Year 2 008 09 2 Briefly Stated Facts Are That The Case Of The Ass Essee Was Reopened For Assessment In The Assessment U S 143 3 R W Section 147 Was Framed Vide Order Dated 18 03 2014 Pertaini Ng To The A Y 2009 10 While Framing Reassessment The Assessing Of Ficer Observed That During The Year Under Appeal The Assessee Had Sold An Agricultural Land At Sale Consideration Of Rs 28 00 000 However As Per The Stamp Duty Valuation Authority The Same Is Rs 67 55 000 After Giving Notices To The Assesse E The Assessing Officer Adopted The Value As Adopted By Stamp Duty Valuation Authority And Recomputed The Capital Gain Thereby T He Assessing Officer Made Addition Of Rs 61 53 470 And Assesse D Income At Rs 96 79 760 Against The Income Declared At Rs 35 26 290 3 Being Aggrieved The Assessee Preferred An Appeal Before The Ld Cit A Who After Considering The Submissions Partly Allowed The Raghvendragoswami 3 Appeal Thereby He Directed The Assessing Officer To Assess The Long Term Capital Gain Of Rs 61 53 470 For A Y 2008 0 9 Where The Part Of It Already Stood Assessed At Rs 22 50 190 4 Ground No 1 Is Against Validity Of The Reassessm Ent Ld Counsel For The Assessee Vehemently Argued That The Authorities Below Were Not Justified In Making The Addition In The Year Under Appeal He Submitted That The Stand Of T He Revenue Is Contradicted He Contended That The Agreement To Sa Le Was Executed On 31 05 2007 Whereby The Possession Of Land Was Gi Ven To The Assessee And Entire Sale Consideration Was Also Pai D On That Date Itself Under These Facts In Terms Of Section 2 4 7 Of The Income Tax Act The Transfer Stood Completed On 31 05 2007 Th Erefore The Transaction Is To Be Related Back To Assessment Yea R 2008 09 As Against The Assessment Year 2009 10 Which Is Reopen Ed By The Assessing Officer He Therefore Submitted That Unde R These Facts The Reopening Of The Assessment For A Y 2009 10 Is Vit Iated On The Contrary Ld Departmental Representative Dr Stro Ngly Supported The Orders Of The Authorities Below And Submitted T Hat The Transaction Was Completed In The Year Under Appeal Therefore The Assessing Officer Was Justified In Reopening The As Sessment Of The Assessment Year 2009 10 And Assessing The Income Es Caped In The Year Under Appeal 5 We Have Heard The Rival Contentions Perused The Material Available On Record And Going Through The Orders Of The Authorities Raghvendragoswami 4 Below Before Adverting To The Rival Contentions I T Is Pertinent To Note That The Undisputed Facts Is That The Assesse E Executed An Agreement To Sale On 31 05 2007 In Pursuance Of T His Agreement Parties Thereto Received Entire Sale Consideration And Possession Thereof In Terms Of The Agreement To Sale Dated 31 05 2007 This Fact Is Not Controverted By The Revenue By Placing Any Contrary Material On Record Section 2 47 Of The Income Tax Act Defines Transfer As Under Transfer In Relation To A Capital Asset Includes I The Sale Exchange Or Relinquishment Of The Asset Or Ii The Extinguishment Of Any Rights Therein Or Iii The Compulsory Acquisition Thereof Under Any Law O R Iv In A Case Where The Asset Is Converted By The Owner Thereof Into Or Is Treated By Him As Stock In Tra De Of A Business Carried On By Him Such Conversion Or Trea Tment Or Iva The Maturity Or Redemption Of A Zero Coupon B Ond Or V Any Transaction Involving The Allowing Of The Posse Ssion Of Any Immovable Property To Be Taken Or Retained In P Art Performance Of A Contract Of The Nature Referred To In Section 53 A Of The Transfer Of Property Act 1882 4 Of 1882 Or Vi Any Transaction Whether By Way Of Becoming A Membe R Of Or Acquiring Shares In A Co Operative Society Company Or Other Association Of Persons Or By Way Of Any Agreement Or Any Arrangement Or In Any Other Manner Whatsoever Which Has The Effect Of Transferring Or Enabling The Enjoyment Of Any Immovable Property Explanation 1 For The Purposes Of Sub Clauses V And Vi Immovable Property Shall Have The Same Meaning A S In Clause D Of Section 269 Ua Explanation 2 For The Removal Of Doubts It Is Her Eby Clarified That Transfer Included And Shall Be Dee M To Raghvendragoswami 5 Have Always Included Disposing Of Or Parting With A N Asset Or Any Interest Therein Or Creating Any Inter Est In Any Asset In Any Manner Whatsoever Directly Or Indirec Tly Absolutely Or Conditionally Voluntarily Or Involunt Arily By Way Of An Agreement Or Otherwise Notwithstanding Th At Such Transfer Of Rights Has Been Characterised As Being Effected Or Dependent Upon Or Flowing From The Tran Sfer Of A Share Or Shares Of A Company Registered Or Incorp Orated Outside India 6 The Capital Gain Is To Be Computed U S 45 Of The Act Arising From The Transfer Of Capital Asset It Is The Contentions Of The Assessee That The Tra Nsfer Of The Capital Asset Took Place On 31 05 2007 In The F Y 2007 08 Relevant To A Y 2008 09 The Assessing Officer Has Reopened The Assessment In Respect Of The Income Escaped Assessm Ent Pertaining To The A Y 2009 10 And Further It Is Contended Tha T It Is Undisputed Fact That The Assessee Has Duly Disclosed This Tran Sactions In His Return Of Income Pertaining To The A Y 2008 09 And In The Computation Of Income Of Capital Gain Of Rs 22 50 1 90 Is Offered For Tax In Support Of These Contentions Our Attenti On Was Drawn To Paper Book Page 16 7 The Ld Counsel For Assessee Also Drew Our Atte Ntion To The Reasons Recorded By The Ao For Issuance Of Notice U S 148 At Page 32 Of Paper Book Wherein The Assessing Officer Has Stated That He Has Reason To Believe That During The Assessment Ye Ar 2009 10 The Income To The Tune Of Rs 39 55 000 Has Been Escap Ed From Assessment However The Ld Cit A While Deciding The Appeal Of Raghvendragoswami 6 The Assessee Directed The Ao To Assess The Long Ter M Capital Gain Of Rs 61 53 470 In The Assessment Year 2008 09 Where Part Of It Already Stood Assessed At Rs 22 50 190 Against T His Finding Of Ld Cit A The Revenue Has Not Preferred Any Appea L Therefore It Can Be Safely Inferred That The Revenue Has Accepte D That Income Which Escaped Assessment Was Pertaining To The A Y 2008 09 However As Per The Notice For Reopening The Assess Ment Year For Opening Is Taken As Assessment Year 2009 10 In Our View This Is Not Permissible Under The Law In View Of The Expla Nation To Section 2 47 Wherein It Clarifies That Transfer Includes And Shall Be Deem To Have Always Included Disposing Of Or Parting Wit H An Asset Or Any Interest Therein Or Creating Any Interest In Any As Set In Any Manner Whatsoever Directly Or Indirectly Absolutely Or C Onditionally Voluntarily Or Involuntarily By Way Of An Agreemen T Or Otherwise Notwithstanding That Such Transfer Of Rights Has Be En Characterised As Being Effected Or Dependent Upon O R Flowing From The Transfer Of A Share Or Shares Of A Company Hen Ce Under The Facts Of The Present Case The Transfer Of Capital A Sset Took Place In The Financial Year 2007 08 Relevant To A Y 2008 0 9 The Assessing Officer Is Empowered As Per Section 147 If The Asse Ssing Officer Has Reason To Believe That Any Income Chargeable To Tax Has Escaped Assessment Or Any Assessment Year He May Subject T O The Provisions Of Sections 148 To 153 Assess Or Reasses S Such Income And Also Any Other Income Chargeable To Tax Which H As Escaped Assessment And Which Comes To His Notice Subsequent Ly In The Course Of The Proceedings Therefore The Assessing Officer Should Raghvendragoswami 7 Form A Belief In Respect Of The Escapement Of Incom E Pertaining To A Particular Assessment Year In The Given Case The I Ncome Escaped Relates To The Earlier Year And Notice Is Issued U S 148 For The Subsequent Year 8 Thus The Foundation Of Reopening Is Contrary To The Provisions Of The Act We Therefore Quash The Impugned Assessme Nt Order The Other Grounds Raised In This Appeal Have Become Inf Ructuous Hence Dismissed Before Parting We May Clarify The Revenu E Would Be At Liberty To Take Appropriate Action If Law So Permit S In Respect Of Appropriate Assessment Year 9 In The Result The Appeal Of The Assessee Is Dispo Sed Of In Terms Of Indicated Hereinabove Order Was Pronounced In The Open Court On 05 12 201 7 Sd Manish Borad Sd Kul Bharat Accountant Member Judicialmember Indore Dated 05 12 2017 Ctx P S Copy To Assessee Ao Pr Cit Cit A Itat Dr Gua Rd File By Order Private Secretary Ddo Indore