ITO, Ward 2(3), Aurangabad, Aurangabad v. Pashu Mohammad Zainuddin,, Aurangabad

ITA 1453/PUN/2009 | 2005-2006
Pronouncement Date: 22-07-2011 | Result: Dismissed

Appeal Details

RSA Number 145324514 RSA 2009
Assessee PAN DJULY2011S
Bench Pune
Appeal Number ITA 1453/PUN/2009
Duration Of Justice 1 year(s) 7 month(s) 1 day(s)
Appellant ITO, Ward 2(3), Aurangabad, Aurangabad
Respondent Pashu Mohammad Zainuddin,, Aurangabad
Appeal Type Income Tax Appeal
Pronouncement Date 22-07-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 22-07-2011
Assessment Year 2005-2006
Appeal Filed On 21-12-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO ACCOUNTANT MEMBER I.T.A. NO. 1453/PN/2009 : A.Y. 2005-06 I.T.O. WARD 2(3) AURANGABAD APPELLANT VS. PASHU MOHAMMED ZAINUDDIN N-9 CIDCO JADHAV WADI NEW MONDHA AURANGABAD PAN NOT ON RECORD RESPONDENT APPELLANT BY: SHRI M.K. KULKARNI RESPONDENT BY: SHRI SANJAY SINGH ORDER PER SHAILENDRA KUMAR YADAV JM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-AURANGABAD DATED 10-9-2009 FOR A.Y. 2005-06 ON THE FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LEARNED CIT(A) WHILE ALLOWING THE APPEAL ERRED IN HIS DECISION BY CONSIDERING SALE OF DARGAH LAND WAS OUTSIDE THE PURVIEW OF CAPITAL GAIN. IT IS CONTENDE D BY THE AR OF THE ASSESSEE THAT THE LAND IS AWARDED AS INAMI LAND TO THE ASSESSEE FOR THE SERVICE OF THE DARGAH (MOSQUE). BUT THE ASSTT. COLLECTORS ORDE R DATED 5-2-1996 THE SAID LAND IS AWARDED BY SUCCESSION TO THE ASSESSEE. HE IS FULLY ENTITLED TO RECEIVE THE RENT AS WELL AS ALL BENEFITS DERIVED FR OM THE LAND. IN FACT HE HAS ALREADY SHOWN THE RENTAL INCO ME AS HIS INCOME IN THE RETURN OF INCOME FILED FOR A.Y . 2005-06 AND 2004-05 AND EARLIER YEARS. THEREFORE THERE IS NO REASON WHY HE SHOULD NOT SHOW THE CAPIT AL GAIN ARISING OUT OF THE SALE PROCEEDS OF THE LAND A ND PAY TAXES THEREON. 2 ITA NO. 1453/PN/2009 PASHU M ZAINUDDIN A.Y. 2005-06 2. THE CASH DEPOSITED IN THE SAVING BANK ACCOUNT PERTAINS TO THE RECEIPT OF THE SALE PROCEEDS FROM MUNICIPAL CORPORATION DUE TO COMPULSORY ACQUISITION OF THE LAND. IN VIEW OF THIS IT IS NOT PROPER TO ASSESS THE DEPOSITS IN THE SAVING BANK ACCOUNT AS THE INCO ME OF THE ASSESSEE. HOWEVER AS PER THE REGISTER DEED THE GOVERNMENT VALUE OF THE LAND IS RS 53 LAKHS AND THE ASSESSEE HAS RECEIVED RS. 15 41 550/- TOWARDS THE SALE PROCEEDS. THEREFORE AS PER SECTION 50C OF TH E ACT THE ASSESSEE IS LIABLE TO PAY CAPITAL GAIN TAX AFTER GETTING INDEXATION BENEFIT ON RS. 53 LAKHS. 3. THE LEARNED CIT(A) HAS TAKEN HIS DECISION ON THE BASIS OF THE DECISION OF THE HONBLE MADHYA PRADESH HIGH COURT IN THE CASE OF CIT VS. HH MAHARAJA SAHIB SHRI LOKENDRA SINGHJI (1986) 162 ITR 93 (MP). THE JUDGMENT IS NOT APPLICABLE AS IT IS NOT A JURISDICT IONAL HIGH COURT AND THE FACTS OF THE CASE ARE DIFFERENT. 2. THE ASSESSING OFFICER NOTICED THAT THERE WERE CA SH DEPOSITS AMOUNTING TO RS. 15 51 543/- IN THE SAVING S BANK ACCOUNT MAINTAINED BY THE ASSESSEE. SINCE THE ASSE SSEE WAS UNABLE TO EXPLAIN THE SOURCE OF SUCH CASH DEPOS IT IN HIS SAVINGS BANK ACCOUNT THE ASSESSING OFFICER TRE ATED THE ENTIRE CASH DEPOSIT AS UNEXPLAINED INVESTMENT BY TH E ASSESSEE. ON APPEAL THE CIT(A) DELETED THE ADDITIO N OF RS. 15 51 543/- MADE BY THE ASSESSING OFFICER WHICH HAS BEEN CHALLENGED BEFORE US BY THE REVENUE. 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE STAND OF THE ASSESSEE WAS T HAT THE DEPOSITS WERE MADE OUT OF SALE PROCEEDS OF DARGAH L AND. IT WAS FURTHER EXPLAINED THAT THE ASSESSEE SOLD THE SA ID LAND IN THE REPRESENTATIVE CAPACITY OF DARGAH PEER BAHUD DIN 3 ITA NO. 1453/PN/2009 PASHU M ZAINUDDIN A.Y. 2005-06 BHANDARI SHAH AND THE AMOUNT DEPOSITED IN THE BANK BELONGED TO THE DARGAH. IT WAS FURTHER EXPLAINED T HAT LAND WAS RECEIVED IN GIFT BY THE ASSESSEES ANCESTORS AN D NO CAPITAL GAIN WAS ASSESSABLE ON ACCOUNT OF TRANSFER OF SUCH INAMI LAND. HOWEVER THE ASSESSING OFFICER WAS O F THE VIEW THAT SINCE THE ASSESSEE WAS ENTITLED TO RECEIV E THE RENT AND OTHER BENEFITS DERIVED FROM SUCH LAND THE TRAN SFER OF SUCH LAND WAS ASSESSABLE UNDER THE HEAD CAPITAL GAI N AND TAKEN THE ENTIRE SALE VALUE OF THE LAND AT RS. 53 0 0 000/- FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAIN INSP ITE OF ADMITTED POSITION THAT ONLY RS. 15 41 550/- WAS REC EIVED BY THE ASSESSEE ON TRANSFER OF SUCH LAND. 4. WE FIND THAT FOR CHARGING OF CAPITAL GAIN THE A SSETS REFERRED TO IN SECTION 45 OF THE ACT HAVE TO BE SUC H IN THE ACQUISITION OF WHICH THE ASSESSEE HAD INCURRED A C OST. ADMITTEDLY THE ASSESSEE HAS NOT INCURRED ANY COST FOR ACQUISITION OF ASSETS UNDER CONSIDERATION. THE ASSE SSING OFFICER HAS NOT BROUGHT ANYTHING ON RECORD TO SHOW THAT THE ASSESSEE HAD INCURRED ANY COST FOR ACQUISITION OF THE LAND IN QUESTION. THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. B.C. SRINIVASA SHETTY (1981) 128 ITR 294 TH AT THE LIABILITY TO TAX ON CAPITAL GAIN WOULD ARISE IN RES PECT OF ONLY THOSE CAPITAL ASSETS IN THE ACQUISITION OF WHICH A N ELEMENT OF COST IS EITHER ACTUALLY PRESENT OR IS CAPABLE O F BEING RECKONED AND NOT IN RESPECT OF THOSE ASSETS IN THE 4 ITA NO. 1453/PN/2009 PASHU M ZAINUDDIN A.Y. 2005-06 ACQUISITION OF WHICH THE ELEMENT OF COST IS ALTOGE THER INCONCEIVABLE. IN THE PRESENT CASE THE LAND WAS AC QUIRED BY THE ASSESSEES ANCESTOR FREE OF COST AS INAMI LA ND AS CHOLI BANGDI FOR MAINTENANCE AND SERVICES OF DARGAH PEER BAHUDDIN BHANDARI SHAH. THEREFORE ANY ELEMENT OF COST IN AN ACQUISITION OF AFORESAID LAND BY THE ANCESTOR S OF THE ASSESSEE IS INCONCEIVABLE. FURTHER IN CASE OF INAM I LAND AS CHOLI BANGDI THERE BEING NO COST OF ACQUISITION TH E QUESTION OF CAPITAL GAIN DOES NOT ARISE. IN THIS VI EW OF THE MATTER THE ORDER OF THE CIT(A) DOES NOT CALL FOR A NY INTERFERENCE AT OUR HAND. WE UPHOLD THE SAME AND D ISMISS THE GROUNDS RAISED BY THE REVENUE. 5. IN THE RESULT THE APPEAL OF THE REVENUE IS DISM ISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 22 ND JULY 2011 SD/- SD/- (D. KARUNAKARA RAO) ACCOUNTANT MEMBER (SHAILENDRA KUMAR YADAV) JUDICIAL MEMBER PUNE DATED THE 22 ND JULY 2011 ANKAM COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A)- AURANGABAD 4. THE CIT AURANGABAD 5. THE D.R ITAT A BENCH PUNE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL 5 ITA NO. 1453/PN/2009 PASHU M ZAINUDDIN A.Y. 2005-06