Smt. Shakuntala Kanoi, Kolkata v. I.T.O Wd - 29(4),kolkata, Kolkata

ITSSA 59/KOL/2013 | 2010-2011
Pronouncement Date: 19-10-2016

Appeal Details

RSA Number 5923516 RSA 2013
Assessee PAN AGDPK2663G
Bench Kolkata
Appeal Number ITSSA 59/KOL/2013
Duration Of Justice 3 year(s) 5 month(s) 4 day(s)
Appellant Smt. Shakuntala Kanoi, Kolkata
Respondent I.T.O Wd - 29(4),kolkata, Kolkata
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 19-10-2016
Appeal Filed By Assessee
Bench Allotted B
Tribunal Order Date 19-10-2016
Date Of Final Hearing 03-10-2016
Next Hearing Date 03-10-2016
Assessment Year 2010-2011
Appeal Filed On 15-05-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL B BENC H KOLKATA BEFORE SHRI M. BALAGANESH AM & SHRI S.S.VISWANETHR A RAVI JM IT(SS)A NO.59/KOL/2013 ( / ASSESSMENT YEAR :2009-2010) SMT. SHAKUNTALA KANOI 23 RAJA SANTOSH ROAD ALIPORE KOLKATA-700027 VS. ITO WARD-29(4) KOLKATA KOLKATA-700068 ./ ./PAN/GIR NO. : AGDPK 2663 G ( /APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : SHRI S.JHAJHARIA FCA /REVENUE BY : SHRI G.MALLIKARJUNA CIT DR / DATE OF HEARING : 03/10/2016 /DATE OF PRONOUNCEMENT 19/10/2016 / O R D E R PER M.BALAGANESH AM THIS APPEAL OF THE ASSESSEE ARISES OUT OF THE ORDE R OF LEARNED CIT(A)-XVI KOLKATA IN APPEAL NO.84/CIT(A)-XVI/WD- 29(4)/11-12/KOL DATED 27.02.2013 PASSED AGAINST THE ASSESSMENT FRAM ED U/S. 143(3)/ 153C OF THE INCOME TAX ACT 1961 (HEREINAFTER REFER RED TO AS THE ACT). 2. THE FIRST ISSUE TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE LD CITA IS JUSTIFIED IN UPHOLDING THE ADDITION MADE TOWARDS LONG TERM CAPITAL GAIN U/S 153C OF THE ACT IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 2.1. THE BRIEF FACTS OF THIS ISSUE IS THAT THE ASSE SSEE FILED HER RETURN OF INCOME FOR THE ASST YEAR 2010-11 U/S 139(1) OF THE ACT DECLARING TAXABLE INCOME OF RS. 3 38 161/-. A SEARCH AND SEIZURE OPE RATION U/S 132 OF THE ACT WAS CARRIED OUT ON KARAN GROUP OF CASES DHANBA D AT THE RESIDENTIAL AND OFFICE PREMISES ON 17.10.2008. THE LD AO OBSER VED THAT IN THE LETTER OF ACIT CENTRAL CIRCLE DHANBAD THAT DURING THE C OURSE OF SEARCH AND SEIZURE OF KARAN GROUP OF CASES SOME INCRIMINATING DOCUMENTS WERE FOUND AND SEIZED FROM THE RESIDENTIAL AND BUSINESS PREMISES WHICH ARE RELATED TO ASSESSEE. DURING THE COURSE OF SEARCH A ND SEIZURE DOCUMENTS IT(SS)A NO.59/13 2 MARKED AS PK-34 WAS SEIZED. THE INCRIMINATING DOCU MENTS OF PK-34 REFLECTS THE PAYMENTS MADE BY THE PERSONS OF KARAN GROUP OF CASES FOR THE PURCHASE OF THE BUILD UP AREA OF THE PREMISES T O THE ASSESSEE BOTH IN CHEQUE AS WELL AS IN CASH ON DIFFERENT DATES. CONS EQUENT TO THIS INFORMATION NOTICE U/S 153C OF THE ACT WAS ISSUED ON 28.3.2011 ON THE ASSESSEE CALLING FOR RETURN OF INCOME. THE ASSESSE E FILED HER RETURN OF INCOME ON 20.4.2011 IN RESPONSE TO NOTICE U/S 153C OF THE ACT DECLARING INCOME OF RS. 3 38 160/- WHICH WAS SAME AS INCOME D ECLARED BY HER IN THE REGULAR RETURN U/S 139(1) OF THE ACT. 2.2. THE LD AO OBSERVED THAT THE ASSESSEE DURING TH E RELEVANT PREVIOUS YEAR HAD INCOME FROM SALARY CAPITAL GAINS AND INCO ME FROM OTHER SOURCES. THE BANK STATEMENTS AND OTHER DOCUMENTS C ALLED FOR WERE PRODUCED BY THE ASSESSEE. THE LD AO OBSERVED THAT THE ASSESSEE WAS THE OWNER OF A LANDED PROPERTY MEASURING ABOUT 8 KA THAS 11 CHHATAK AT PLOT NO. 2972 & 2973 UNDER WARD NO. 2 HOLDING NO. 96 OF DHANBAD MUNICIPALITY JHARIA MAUZA AT HIRAPUR AND HAD ENT ERED INTO DEVELOPMENT AGREEMENT ON 18.5.2003 WITH A DEVELOPER NAMED M/S S HRISHTI BUILDERS PVT LTD DHANBAD FOR CONSTRUCTION OF A RESIDENTIAL / COMMERCIAL PREMISES ON THE SAID LAND. THE BUILDING WAS CONSTRUCTED ON T HE SAID LAND BY VIRTUE OF THE AGREEMENT WHICH WAS POPULARLY KNOWN AS YASH OBAN PLAZA. THE BUILDING WAS CONSTRUCTED BY THE DEVELOPER AT ITS OW N COST. THE ASSESSEE WAS ALLOTTED 52 % OF THE BUILT UP AREA OF THE PREMI SES MEASURING ABOUT 9750 SQ.FT AS CONSIDERATION IN LIEU OF LAND. AFTER COMPLETION OF THE CONSTRUCTION OF THE SAID PREMISES THE SAID DEVELOP ER AS WELL AS THE ASSESSEE SOLD A CONSIDERABLE PORTION OF RESPECTIVE SHARE OF THE CONSTRUCTED PREMISES TO M/S PARK CLINIC THE FLAGSH IP CONCERN OF KARAN GROUP(COMPRISING OF M/S PARK CLINIC S K SARAN HUF) . THE ASSESSEE SOLD 4824 SQ.FT OF BUILT UP AREA TO M/S PARK CLINIC & S K KARAN (HUF) AND 200 SQ.FT TO SITA PROJECTS 200 SQ.FT TO O.P.AGARWA L AND 140 SQ.FT TO MURALI PRASAD. IT(SS)A NO.59/13 3 2.3. THE LD AO EXPLAINED IN HIS ORDER THE PAGE WISE DETAIL ANALYSIS OF THE INCRIMINATING DOCUMENTS MARKED AS PK-34 VIDE PAGE N O. 27 ITS BACK SIDE PAGE 27A ITS BACK SIDE PAGE 27B ITS BACK SIDE PAGE 28 ITS BACK SIDE PAGE 29 PAGE 30 AND ITS BACK SIDE WHICH WERE SEIZ ED FROM THE BEDROOM OF DR S.K.KARAN OF KARAN GROUP. PAGE-27: THIS IS A HAND WRITTEN SHEET CONTAINING AC COUNT OF PAYMENTS FOR THE PURCHASE OF SHOPS AT YASHOVAN PLA ZA- DR. S.K.KARAN A KEY PERSON OF THE KARAN GROUP OF CASES STATED UNDER OATH THAT--- 'THIS IS THE DETAIL OF ACCOUNTS DISCLO SED AS WELL AS UNDISCLOSED WITH SMT. SHAKUNTALA DEVI KANOI FOR PUR CHASE OF SHOP NO. 2&4 AND APPROXIMATE AREA OF 5000 SQ. FEET ON TH IRD FLOOR. THE AMOUNT INDICATED AGAINST THE 'BOOKS' ARE DISCLOSED ONE AND TINDER THE 'CASH' ARE UNACCOUNTED. UNDER THE HEADING 'QUIC K LIST' THE MONTH WISE PAYMENT OF ACCOUNT OF PAN I.E AMOUNT PA ID BY CHEQUE TOTALING RS.24 16 011/- HAS BEEN WRITTEN AND UNDER THE HEAD 'CASH 'TOTALING RS.15 48 639/- HAS BEEN WRITTEN. SECOND H ALF OF THE PAGE IS THE DUPLICATION OF THE AFORESAID PAYMENT. ALL TH ESE ENTRIES ARE PREPARED BY REPRESENTATIVE OF SHAKUNTALA KANOI WHIC H HAS BEEN DULY ACKNOWLEDGED BY ME AND MY SIGNATURE ALONG WITH THE DATE IS APPEARING UNDER THE 3 RD ITEM. THE PAGE 27A IS THE BACK SIDE OF VISITING CARD WHICH IS THE RECEIPT OF UNACCOUNTED A MOUNT PAID BY ME FROM ANSHUMAN AGARWAL REPRESENTATIVE OF SHAKUNTALA KANOI THE BACK PAGE OF PAGE 27 GIVES THE DETAILS OF PAYME NT FOR THE SHOP NO.2 WHICH REFLECTS THE CASH PAYMENT FOR RS. 6 00 0 00/- PAGE NO.27A & 27B OF SEIZED DOCUMENTS PK-34: AS PER STATEMENT OF DR. KARAN UNDER OATH THESE ARE VISITING CARD OF SRI ANSHUMAN AGARWAL EXECUTIVE DIRECTOR OF DATA ALLOYS PVT. LTD . BACK OF THE CARD MARKED AS 27 A SHOWS PAYMENT OF RS.5 48 640/- ON 29/09/2006 BY DR. S.K.KARAN. BACK OF THE CARD MARKE D AS 27B SHOWS PAYMENT OF RS.5 00 000/- ON 22/07/2006 BY DR. S.K.KARAN. THESE PAYMENTS HAVE BEEN MADE TO ANSHUMAN AGARWAL O UT OF UNDISCLOSED INCOME OF DR. KARAN. PAGE NO.28 AND ITS BACK OF SEIZED DOCUMENTS PK-34: IT IS AGAIN HAND WRITTEN ACCOUNT OF PURCHASES OF SHOP AT YASHOV AN PLAZA. DR. S.K.KARAN UNDER OATH EXPLAINED THIS PAGE AS UNDER :- ' THIS IS A DETAIL ACCOUNT OF PURCHASE OF VARIOUS F LOORS IN YASHOVAN PLAZA. THIS GIVES THE DETAIL OF FLOOR AREA RATE A CCOUNTED PAYMENT I.E. BY CHEQUE AND UNACCOUNTED PAYMENT I.E.IN CASH. THE PAYMENTS I HAVE MADE PARTLY TO MRS. SHAKUNTALA KANOI AND SRI SHTI BUILDERS. UNDER THE ITEM CASH A REFERENCE HAS BEEN MADE TO A NAME' GIRIJI'. GIRIJI WAS A PERSON RUNNING A SCHOOL IN THE OLD BUI LDING AND RS.12.50 440/- WAS PAID TO HIM FOR VACATING THIS SP ACE. THIS PAYMENT WAS A PART OF AGREEMENT BETWEEN BUILDER AND GIRIJI AND THE CASH PAYMENT WAS PAID BY ME TO THE BUILDER FOR GIRI JI FOR VACATING THE SPACE. SIMILAR THINGS ARE APPLICABLE FOR ENTRY FOR SHOP LG-3 & 4 IT(SS)A NO.59/13 4 RS. 2 50 000/- FOR EACH SHOP BY CHEQUE AND 7 & 8 LAKH RESPECTIVELY IN CASH. THE SECOND HALF OF 'HE PAGE G IVES THE DETAILS OF PAYMENTS MADE BY CHEQUE UNDER THE HEAD 'BOOKS' A ND IN' CASH' TO KANOIJI AND SRISHTI BUILDERS. AS PER THIS PAGE T HE TOTAL PAYMENT MADE BY CHEQUE WAS RS.99 81 439/- AND IN CASH WAS R S. 77 61 896/-' PAGE NO.29 OF SEIZED DOCUMENT PK-34 IS WRITTEN AS UNDER :- SK S A/C AREA BOOKS CASH 3 RD FLOOR 4483 @617 27 66 011 @433 19 41 139--- # SHOP 2 50 000 7 00 000--- @ 30 16 011(A) 26 41 139 (C) PAID 4 25 000 (B) 9 55 000 CASH 1 10 000 MISC EXP 16 000 CO.MOBILE PHONE 11 500 MUTATION 10 92 500 (D) HENCE : DUE A/C FROM DR.K. BOOKS = (A) (B) = 25 91 011 CASH = (C) (D)= 15 48 639 PAGE NO. 29 & 30 ARE AGAIN HAND WRITTEN ACCOUNT OF PURCHASES OF SHOP AT YASHOVAN PLAZA. DR. S.K.KARAN UNDER OATH E XPLAINED THIS PAGE AS UNDER: 'PAGE 29 IS AGAIN THE HANDWRITING OF SRISHTI BUILDE RS AND IT GIVES A SUMMARRIZED OF PAGE 27 WITH A DIFFERENT THAT BUILDE R HAD CLAIMED SLIGHTER HIGHER AREA ON 3 RD FLOOR WHICH WAS DISPUTED BY ME' PAGE 30 IS THE DUPLICATE COPY OF' PAGE: 28 EXCEPT T HE SECOND HALF OF THE BACK PAGE WHICH IS DETAILS OF PAYMENT WRITTEN I N MY HANDWRITING THESE PAYMENTS ARE PART OF THE PAYMENTS EXPLAINED I N PAGE 28' 'PAGE 30 IS THE DUPLICATE COPY OF PAGE 28. HOWEVER IT ALSO MENTION THE VARIOUS PAYMENTS IN RESPECT OF THE PURCHASE OF SPACES AT YASHOVAN PLAZA ALONG WITH DATES. ' DR. S.K.KARAN IN STATEMENT UNDER OATH RECORDED DURI NG THE COURSE OF SEARCH AND SEIZURE OPERATION ON 18/10/2008 NARRA TED THE ABOVE FACTS AND MENTIONED THAT PAYMENT MADE IN CASH WHICH IS NOT REFLECTED IN THE BOOKS OF ACCOUNTS AND OFFERED THE AMOUNT TO TAX UNDER THE HEAD INVESTMENT NOT FULLY DISCLOSED IN TH E BOOKS. (COPY OF THE RELEVANT PORTION OF STATEMENT UNDER OA TH OF DR. S.K.KARAN AND COPIES OF PAGE NO.27 AND ITS BACK SID E 27A AND ITS BACK SIDE 27B AND ITS BACK SIDE PG.28 AND ITS BACK SIDE PG.29 PG.30 AND ITS BACK SIDE UNDER SEIZED DOC UMENTS IT(SS)A NO.59/13 5 MARKED AS PK-34 WERE GIVEN TO TILE ASSESSEE DURING TILE ASSESSMENT PROCEEDING FOR EXPLANATION) CONSIDERING THE ABOVE FACTS AND CIRCUMSTANCES THE CAPITAL GAIN ON TRANSFER OF THE ABOVE MENTIONED PROPERTY IS CALCULA TED AS UNDER- TOTAL VALUE OF SALES OF 5364 SQ. FEET SOLD OUT OF 9 750 CHEQUE = RS.39 78 011/- CASH = RS.32 41 139/- (KARAN GROUP) TOTAL RS.72 19 150/- ADD: RS.3 36 000/- (OTHERS) RS.75 55 150/- (RS. 3 36 000/- IS THE DIFFERENCE OF SALE CONSIDERA TION AND STAMP AUTHORITY VALUATION IN THE CASE OF SITA PROJECTS O. P.AGARWAL AND MURALI PRASAD WITH REFERENCE TO SECTION 50C) COST OF ACQUISITION OF 5364 SQ. FEET AREA VALUE OF BUILDING AS ON 9/911987 = RS.12 57 500/- PROPORTIONATE VALUE OF ACQUISITION FOR THE SOLD ARE A == RS.6 91 818/- INDEXED COST OF ACQUISITION FOR THE SOLD AREA = RS. 29 14 860/- LONG TERM CAPITAL GAINS(H.P)=RS.75 55.150 - RS.29 1 4 860 = RS.46 40 290/- WHERE AS IN THE RETURN FOR THE A. Y.20 1 0-11 THE ASSESSEE DISCLOSED LONG TERM CAPITAL LOSS FOR RS.2 37 924/- FROM HOUSE PROPERTY BY TAKING FULL VALUE OF CONSIDERATION FOR RS.39 78 011/- AND INDEXED COST OF ACQUISITION FOR RS.42 15 935/-. THE ASSESSEE WAS REQUESTED TO GIVE EXPLANATION ON T HE OBSERVATIONS MADE ABOVE AND ALSO REQUESTED TO SHOW CAUSE WHY CAPITAL GAINS ON TRANSFER OF THE ABOVE MENTIONED PR OPERTY SHOULD NOT BE TAKEN FOR RS.46 40 290/- 2.4. THE LD CIT(A) UPHELD THE ACTION OF THE LD AO. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE US ON THE FOLLOWING GR OUNDS:- GROUNDS OF APPEAL 1. FOR THAT IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) WAS WHOLLY WRONG AND UNJUSTIFIED IN CONF IRMING THE AO'S ACTION IN INITIATING THE PROCEEDING U/S 153C OF THE ACT BY ISSUE OF NOTICE U/S 153C ON 28.03.2011 FOR THE AY 2010-11 AF TER AN ABNORMAL AND UNREASONABLE DELAY OF AROUND 2 YEAR S SINCE THE DATE OF SEARCH CONDUCTED U/S 132 OF THE ACT ON 17.1 0.2008 IN THE PREMISES OF A THIRD PARTY SIMPLY HOLDING THAT THERE IS NO TIME LIMIT FOR IT(SS)A NO.59/13 6 ISSUE OF NOTICE U/S 153A / 153C OF THE ACT. THE PRO CEEDING U/S 153C AND THE NOTICE U/S 153C BEING TOTALLY INVALID AND VOID AB INITIO ARE LIABLE TO BE QUASHED / CANCELLED. 2. FOR THAT IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) WAS WHOLLY WRONG AND UNJUSTIFIED IN CONF IRMING THE AO'S ACTION IN INITIATING THE PROCEEDING U/S 153C OF THE ACT FOR THE AY 2010-11 BY ISSUE OF NOTICE U/S 153C ON 28.03.2011 A FTER THE DATE OF COMPLETION OF THE SEARCH ASSESSMENT U/S 153A OF THE ACT IN THE CASE OF THE SAID THIRD PARTY DR. S. K. KARAN WHOSE PREMISES WERE SEARCHED U/S 153A ON 17.10.2008. THE PROCEEDING INI TIATED U/S 153C AND THE ISSUE OF NOTICE U/S 153C WHICH ARE BA RRED BY LIMITATION AND HENCE INVALID AND VOID AB INITIO AR E LIABLE TO BE QUASHED / CANCELLED. 3. FOR THAT IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) WAS WHOLLY WRONG AND UNJUSTIFIED IN CONF IRMING (I) THE INITIATION OF THE PROCEEDING U/S 153C AND (II) THE SUBSEQUENT ASSESSMENT MADE U/S 143(3) /153C FOR THE LATER AY 2 010-11 WITHOUT EVER CONSIDERING AND ANALYZING THE FACT THA T THE SEIZED DOCUMENTS NOWHERE CONTAINED ANY ENTRY OR INFORMATIO N THAT ANY SUM OF MONEY BY CASH OR OTHERWISE WAS RECEIVED BY THE ASSESSEE AT ANY TIME AFTER 17.10.2008 (SEARCH WAS MADE ON 17 .10.2008) WHICH CAN BE THE BASIS FOR INITIATION OF SUCH PROCE EDING AND SUBSEQUENT COMPLETION OF A HIGH-PITCHED ASSESSMENT FOR THE AY 2010-11. THE PROCEEDING U/S 153C AND THE ASSESSMENT MADE U/S 143(3) / 153C BEING TOTALLY INVALID AND VOID AB INITIO ARE LIABLE TO BE QUASHED / CANCELLED. 4. FOR THAT IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) WAS WHOLLY WRONG AND UNJUSTIFIED IN CONF IRMING THE ASSESSMENT U/S 143(3) / 153C OF THE ACT FOR THE AY 2010-11 MADE IN A HURRY ARBITRARILY ASSESSING THE TOTAL INCOME A T RS. 49 80 910/- WITHOUT AT ALL CONSIDERING THE FACTS AND EXPLANATIO N OF THE ASSESSEE AND WITHOUT ALLOWING PROPER AND ADEQUATE OPPORTUNIT Y OF HEARING AND WITHOUT PROVIDING EVEN A COPY OF THE REASONS RE CORDED FOR INITIATION OF THE PROCEEDING U/S 153C TILL THE DATE OF COMPLETION OF THE SEARCH ASSESSMENT GROSSLY VIOLATING THE PRINCIPLE O F NATURAL JUSTICE. THE ASSESSMENT U/S 143(3)/153C MADE AFTER INITIATIN G AN INVALID PROCEEDING U/S 153C BEING ILLEGAL AND VOID AB INIT IO IS LIABLE TO BE QUASHED / CANCELLED. 5. WITHOUT PREJUDICE TO THE GR. NOS. 1 TO 4 ABOVE THE LD. CIT(A) WAS WHOLLY WRONG AND UNJUSTIFIED IN CONFIRMING THE A.O'S ACTION IN DETERMINING THE LONG TERM CAPITAL GAIN AT RS. 46 40 290/- ON SALE OF THE ASSESSEE'S HOUSE PROPERTY IN THE SEARCH ASSE SSMENT U/S 143(3) / 153C BLINDLY RELYING UPON CERTAIN VAGUE C ASUAL AND UNSUBSTANTIATED ENTRIES IN THE DOCUMENTS SEIZED FRO M THE PREMISES OF THE THIRD PARTY AND THE STATEMENT OF THAT THIRD PARTY ALLEGING THAT IN IT(SS)A NO.59/13 7 ADDITION TO THE CONSIDERATION MONEY PAID BY CHEQUE RECORDED IN THE REGISTERED SALE DEEDS THE THIRD PARTY THE PURCHASE R HAD ALSO PAID TOWARDS SALE PROCEEDS OF THE PROPERTY FURTHER UNACC OUNTED SUM OF RS. 32 41 139/- IN CASH RECORDED IN THE SEIZED DOCU MENTS TO THE ASSESSEE. 6. WITHOUT PREJUDICE TO THE GR. NOS. 1 TO 4 ABOVE THE LD. CIT(A) WAS WHOLLY WRONG AND UNJUSTIFIED IN CONFIRMING THE A.O'S ACTION IN MAKING ARBITRARY ADDITION OF THE SAID UNDISCLOSED S UM OF RS. 32 41 139/- (ALLEGEDLY RECEIVED FROM THE THIRD PART Y PURCHASER) TO THE SALE PROCEEDS OF THE HOUSE PROPERTY WHILE ASSES SING THE L.T.C.G FOR THE A.Y 2010-11 WITHOUT CONSIDERING THE BASIC UNDENYING FACT THAT NO PORTION OF THE SAID SUM OF R S.32 41 139/- ALLEGEDLY RECORDED IN THE SEIZED DOCUMENTS WAS REC EIVED BY THE ASSESSEE DURING THE F. Y 2009-10 RELEVANT TO THE A. Y 2010-11. THE WRONG FULL ADDITION OF THE SAID SUM OF RS.32 41 139/- IN THE ASSESSMENT FOR THE A.Y 2010-11 AND ITS CONFIRMATION BY THE LD. CIT(A) WERE WHOLLY UNREASONABLE UNCALLED FOR ILLE GAL AND BAD IN LAW. 7. FOR THAT IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) WAS WHOLLY WRONG AND UNJUSTIFIED IN CONF IRMING THE A.O'S ACTION IN ENHANCING THE SALE PRICE OF THREE SHOPS I N THE SAID PROPERTY SOLD TO 3(THREE) OTHER PURCHASERS BY A SUM OF RS.3 36 000/- WHILE ASSESSING THE L.T.C.G BY ADOPTI NG THE HIGHER VALUATION OF THE STAMP VALUATION AUTHORITY ( IN SHO RT S.V.A ) U/S 50C OF THE ACT IN LIEU OF THE ACTUAL CONSIDERATION MONE Y RECORDED IN THE REGISTERED SALE DEEDS WITHOUT CONSIDERING THE FACT THAT NO EXTRA MONEY WAS EVER RECEIVED BY THE ASSESSEE IN ADDITION TO THE SALE PRICE RECORDED IN THE REGISTERED SALE DEEDS AND FUR THER THAT THE VALUATION MADE BY THE S.V.A WAS WITHOUT ANY BASIS. THE ACTIONS OF THE A.O & THE LD. CIT(A) WERE WHOLLY BIASED UNCALLED FOR AND BAD IN LAW. 8. FOR THAT IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) WAS WHOLLY WRONG AND UNJUSTIFIED IN REJE CTING THE ASSESSEE'S COMPUTATION OF ACTUAL PROPORTIONAL COST OF ACQUISITION OF THE PORTION OF THE PROPERTY SOLD AT RS. 10 42 700/- BEFORE INDEXATION ( COST OF ACQUISITION RS.12 57 500/- X PORTION SOLD 5 364 SQ. FT 1 TOTAL AREA 6 469 SQ.FT ) WHILE COMPUTING THE LONG TERM CA PITAL GAIN AND INSTEAD CONFIRMING THE A.O'S ACTION IN COMPUTING TH E PROPORTIONAL COST OF ACQUISITION OF THE PROPERTY SOLD AT RS. 6 9 1 818/- BEFORE INDEXATION ( COST OF ACQUISITION RS.12 57 500/- X 5 364 SQ. FT SOLD TOTAL AREA WRONGLY TAKEN AT 9 750 SQ.FT ) WHILE ASS ESSING THE L.T.C.G AT RS. 46 40 290/- WITHOUT ASSIGNING ANY REASON FOR REJECTION OF THE ASSESSEE'S COMPUTATION. 3. THE LD AR RAISED A PRELIMINARY OBJECTION BY STAT ING THAT THERE WAS NO INCRIMINATING MATERIALS THAT WERE FOUND IN THE COUR SE OF SEARCH OF DR S K IT(SS)A NO.59/13 8 KARAN WHICH APPARENTLY BELONGED TO THE ASSESSEE A ND HENCE THERE COULD NOT BE ANY PROCEEDING THAT COULD BE LAWFULLY INITIA TED AGAINST THE ASSESSEE U/S 153C OF THE ACT. HE ALSO ARGUED THAT T HE SATISFACTION NOTE IN TERMS OF SECTION 153C OF THE ACT WAS RECORDED ON 28 .3.2011 WHICH WAS AFTER TWO AND HALF MONTHS AFTER COMPLETION OF ASSE SSMENT U/S 153A OF THE ACT IN THE HANDS OF M/S PARK CLINIC (DR S K KARAN G ROUP ) ON 31.12.2010. IN SUPPORT OF THESE PROPOSITIONS HE PLACED RELIANC E ON THE FOLLOWING DECISIONS :- (A) DECISION OF THIS TRIBUNAL IN THE CASE OF JYOTSN A DESAI VS ACIT IN IT(SS) A NOS. 114 & 115/KOL/2011 DATED 6.11.2015. (B) DECISION OF HONBLE DELHI HIGH COURT IN THE CAS E OF CIT VS BHARAT BHUSHAN JAIN & ORS REPORTED IN (2016) 138 DTR (DEL) 97 DATED 8.1.2015. (C) DECISION OF DELHI TRIBUNAL IN THE CASE OF TANVI R COLLECTIONS (P) LTD VS ACIT REPORTED IN (2015) 54 TAXMANN.COM 379 (DELH I- TRIB.) DATED 16.1.2015. (D) DECISION OF HONBLE DELHI HIGH COURT IN THE CAS E OF PEPSICO INDIA HOLDINGS (P) LTD VS ACIT REPORTED IN (2014) 50 TAXM ANN.COM 299 (DELHI) DATED 14.8.2014. (E) DECISION OF JAIPUR TRIBUNAL IN THE CASE OF SATY AM FOOD SPECIALITIES (P) LTD VS DCIT REPORTED IN (2015) 57 TAXMANN.COM 1 94 (JAIPUR TRIB.) DATED 27.2.2015. (F) DECISION OF HONBLE SUPREME COURT IN THE CASE O F CIT VS CALCUTTA KNITWEARS REPORTED IN (2014) 362 ITR 673 (SC) (G) DECISION OF HONBLE GUJARAT HIGH COURT IN THE C ASE OF VIJAYBHAI N. CHANDRANI VS ACIT REPORTED IN (2011) 231 CTR 474 (G UJ) 3.1. HE ALSO PLACED RELIANCE ON THE CBDT CIRCULAR I SSUED TO THIS EFFECT VIDE CIRCULAR NO. 24/2015 DATED 31.12.2015. 3.2. HE ALSO PLACED RELIANCE ON THE FINANCE BILL 2015 WHEREIN THE PROVISIONS OF SECTION 153C OF THE ACT HAS BEEN AMEN DED CONFERRING POWERS TO THE LD AO TO PROCEED WITH SUCH OTHER PERS ON EVEN IF THE SAID DOCUMENTS / ENTRIES RELATES TO SUCH OTHER PERSON OT HER THAN THE PERSON SEARCHED U/S 132 OF THE ACT. 3.3. ON MERITS THE LD AR ARGUED THAT IN ANY CASE THE CAPITAL GAINS IN RESPECT OF 4824 SQ.FT OF BUILDING OF THE SUBJECT ME NTIONED PROPERTY CANNOT IT(SS)A NO.59/13 9 BE ASSESSED IN ASST YEAR 2010-11 AS THE POSSESSION WAS HANDED OVER TO THE BUYER IE DR S K KARAN / PARK CLINIC ON OR BEFOR E 17.10.2008 ITSELF. ADMITTEDLY THE SEARCH IN THE PREMISES OF KARAN GRO UP OF CASES HAPPENED IN THE SUBJECT MENTIONED PROPERTY ON 17.10 .2008 WHICH FALLS IN ASST YEAR 2009-10. HENCE HE ARGUED THAT ON THE DAT E OF SEARCH ITSELF THE POSSESSION WAS IN THE HANDS OF THE BUYER AND ONLY T HE REGISTERED SALE DEED HAPPENED IN ASST YEAR 2010-11 WHICH TRIGGERED THE ASSESSEE TO OFFER CAPITAL GAINS IN THE RETURN AND IT IS WELL SE TTLED THAT THE REVENUE CANNOT BE UNJUSTLY ENRICHED WITH THE MISTAKEN UNDER STANDING OF THE PROVISIONS OF LAW BY THE ASSESSEE BY COLLECTING UNJ UST TAXES IN THE WRONG YEAR. HE ARGUED THAT THERE IS NO ESTOPPEL AGAINST THE STATUTE. 4. IN RESPONSE TO THIS THE LD DR ARGUED THAT THE SEIZED DOCUMENTS CLEARLY PROVES THAT THE SAME BELONGS TO THE ASSESSEE HEREIN AND THE SAME IS ALSO CORROBORATED WITH THE STATEMENT GIVEN ON OATH BY DR S K KARAN (I.E THE SEARCHED PARTY) THAT THE CASH PORTION WAS HANDE D OVER TO MR ANSHUMAN AGARWAL REPRESENTATIVE OF THE ASSESSEE. IT IS ALSO PROVED BEYOND DOUBT THAT THE ENTIRE WORKINGS WERE PREPARED BY THE ASSESSEE AS COULD BE EVIDENT FROM THE SEIZED DOCUMENTS AND THE STATEMENT GIVEN BY DR S K KARAN. THE ASSESSEE HAD NOT DISPUTED THE SA ME BEFORE THE LOWER AUTHORITIES. WITH REGARD TO THE RECORDING OF SATIS FACTION NOTE U/S 153C OF THE ACT ON 28.3.2011 THE SAME WAS DONE EXPEDITIOUS LY BY THE LD AO WITHIN 3 MONTHS AND SINCE THERE WAS NO TIME LIMIT P RESCRIBED IN THE STATUTE FOR THE SAME THE HONBLE SUPREME COURT HAD INTERPR ETED THE SAME AS ONE OF THE OPTION THAT THE SAME IS TO BE DONE IMMED IATELY AFTER THE COMPLETION OF ASSESSMENT OF SEARCHED PERSON. HE AR GUED THAT THE RECORDING OF THE SAME WITHIN 3 MONTHS SHOULD HAVE T O BE CONSTRUED AS IMMEDIATE AND THE DECISION RELIED UPON BY THE LD AR ON THE HONBLE DELHI HIGH COURT IN THE CASE OF BHARAT BHUSHAN JAIN SUPRA DOES NOT APPLY TO THE FACTS OF THE CASE. HE FURTHER ARGUED THAT T HERE IS NO MALAFIDE INTENTION ON THE PART OF THE LD AO TO DELAY THE PRO CESS OF RECORDING OF SATISFACTION U/S 153C OF THE ACT. WITH REGARD TO THE ADDITION MADE ON IT(SS)A NO.59/13 10 MERITS HE ARGUED THAT THE ASSESSEE HERSELF HAD OFF ERED THE CAPITAL GAINS IN ASST YEAR 2010-11 (I.E THE YEAR UNDER APPEAL) BO TH IN THE ORIGINAL RETURN AS WELL AS IN THE RETURN FILED IN RESPONSE TO NOTIC E U/S 153C OF THE ACT AND SHE CANNOT BE ALLOWED TO WITHDRAW HER PLEA AND TAKE A DIFFERENT STAND THAT CAPITAL GAINS DID NOT AROSE IN RESPECT OF 4824 SQ.F T IN ASST YEAR 2010-11. MOREOVER THE ASSESSEE HAD NOT INFORMED THE REVENUE ABOUT THE ACTUAL DATE OF HANDING OVER OF POSSESSION TO M/S PARK CLIN IC AND THE CAPITAL GAINS CANNOT GO UNESCAPED FROM THE LEVY OF TAXATION . 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT THE ASSESSEE HAD FILED HER RETURN OF INCOME IN RESPONSE TO NOTICE U/S 153C OF THE ACT ON 20.4.2011 DECLARING TOTAL INCOME OF RS. 3 38 160/- AND TOTAL SHORT TERM AND LONG TERM CAPITAL LOSS OF RS. 2 38 736/- AS WERE DECLARED IN THE ORIG INAL RETURN. THE LONG TERM CAPITAL LOSS ON SALE OF A PORTION OF THE HOUSE PROPERTY AT DHANBAD DECLARED IN BOTH THE RETURNS WAS RS. 2 37 924/- (SA LE CONSIDERATION OF RS. 39 78 011/- LESS INDEXED COST OF ACQUISITION RS. 42 15 935/-). WE FIND FROM THE DEVELOPMENT AGREEMENT DATED 18.5.2003 THE DEVELOPER AFTER DEMOLISHING THE OLD STRUCTURE HAD CONSTRUCTED A MUL TI STORIED BUILDING ON THE SUBJECT MENTIONED LAND AT ITS OWN COST AND THE NEW BUILDING WAS NAMED YASHOBAN PLAZA. THE ASSESSEE WAS ALLOTTED 52% OF THE TOTAL BUILT UP AREA OF THE NEWLY CONSTRUCTED BUILDING IN EXCHANGE OF HER LAND AND OLD BUILDING. THE TOTAL BUILT UP AREA ALLOTTED IN HER 52% SHARE WAS 9750 SQ.FT AND THE DEVELOPER GOT THE BALANCE 48% OF THE TOTAL BUILT UP AREA OF THE SAID BUILDING. IT IS NOT IN DISPUTE THA T THE ASSESSEE OUT OF THE 9750 SQ.FT AREA OF THE SAID BUILDING YASHOBAN PLAZ A ALLOTTED TO HER HAD SOLD 5364 SQ.FT AREA OF THAT BUILDING COMPRISED OF FLATS / SHOPS TO 5 PARTIES AT TOTAL CONSIDERATION OF RS. 39 78 011/- RECORDED IN THE REGISTERED SALE DEEDS AND THE SAME WAS RECEIVED BY ASSESSEE BY CHEQ UE. THE TOTAL VALUE DETERMINED BY THE STAMP VALUATION AUTHORITY F OR THESE REGISTERED SALE DEEDS WAS RS. 50 36 000/-. THE VALUE OF THE LAND AND THE OLD BUILDING AS ON 9.9.1987 PRIOR TO TAKING UP THE CONS TRUCTION OF THE BUILDING IT(SS)A NO.59/13 11 BY THE DEVELOPER WAS RS. 12 57 500/- WHICH AFTER I NDEXATION HAD RESULTED IN A LONG TERM CAPITAL LOSS OF RS. 2 37 924/- AND T HE SAME WAS RETURNED BY THE ASSESSEE. THE LD AO DETERMINED THE LONG TERM C APITAL GAIN AT RS. 46 40 290/- BY PLACING RELIANCE ON THE ENTRIES IN T HE SEIZED LOOSE SHEETS MARKED AS PK-34 (PAGES 27 TO 30) AND STATEMENT OF D R S K KARAN RECORDED BY SEARCH TEAM U/S 132(4) OF THE ACT ON 18 .10.2008. 5.1. WE FIND THAT THE PRELIMINARY OBJECTION RAISED BY THE LD AR ON THE VALIDITY OF ASSESSMENT FRAMED U/S 153C OF THE ACT O N THE FOLLOWING COUNTS:- (A) THAT THE SEIZED DOCUMENT FOUND FROM DR S K KARA N DOES NOT BELONG TO THE ASSESSEE AND HENCE NO PROCEEDINGS U /S 153C OF THE ACT COULD BE VALIDLY INITIATED ON THE ASSESSEE HERE IN ; AND (B) THAT THE SATISFACTION NOTE U/S 153C OF THE ACT WAS RECORDED BEYOND THE GUIDELINES STIPULATED BY THE HONBLE SUPREME CO URT IN THE CALCUTTA KNITWEARS CASE SUPRA (C) THAT THERE CANNOT BE ANY CAPITAL GAINS IN RESPE CT OF SALE OF 4824 SQ.FT OF BUILDING TO DR S K KARAN IN ASST YEAR 2010 -11 IN THE HANDS OF THE ASSESSEE AS THE POSSESSION WAS ALREADY HANDE D OVER TO THE BUYER (DR S K KARAN) WHICH IS QUITE EVIDENT FROM TH E FACT THAT THE SEARCH WAS CONDUCTED ON THE BUYER U/S 132 OF THE AC T ON 17.10.2008 IN THE SUBJECT MENTIONED PREMISES. WE FIND THAT THE RELIANCE PLACED BY THE LD AR ON TH E AMENDMENT BROUGHT IN BY THE FINANCE ACT 2015 IN SECTION 153C OF THE A CT ONLY ADVANCES THE CASE OF THE REVENUE AS THE SAID AMENDED SECTION CON FERS POWERS ON THE LD AO TO PROCEED WITH SUCH OTHER PERSON OTHER THAN THE PERSON SEARCHED U/S 132 OF THE ACT EVEN IF THE ENTRIES / DOCUMENTS RELATE TO SUCH OTHER PERSON PROVIDED THE LD AO OF SUCH OTHER PERSON (I.E SECTION 153C PERSON) IS SATISFIED THAT THOSE DOCUMENTS / ENTRIES WOULD H AVE A BEARING ON THE DETERMINATION OF TOTAL INCOME OF SUCH OTHER PERSON. ADMITTEDLY IN THE IT(SS)A NO.59/13 12 INSTANT CASE THE LOOSE SHEETS CLEARLY REFLECTED TH E PAYMENTS OF CASH BY DR S K KARAN TO THE ASSESSEE TOWARDS PURCHASE OF BU ILDING FROM THE ASSESSEE AND THOSE CASH WAS HANDED OVER TO MR ANSHU MAN AGARWAL REPRESENTATIVE OF THE ASSESSEE. IT IS NOT IN DISPU TE THAT THE CHEQUES WERE HANDED OVER TO ANSHUMAN AGARWAL BY DR S K KARAN WHI CH HAD FOUND PLACE IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE AS S ALE CONSIDERATION OF BUILDING. IT IS THE CASE OF THE REVENUE THAT THE CA SH PORTION ALSO WAS RECEIVED BY THE SAID PARTY AT THE BEHEST OF THE ASS ESSEE FROM DR S K KARAN. HENCE WE HAVE NO HESITATION TO CONCLUDE THA T THE SEIZED DOCUMENT FOUND IN THE PREMISES OF DR S K KARAN DURI NG THE COURSE OF SEARCH BELONGS TO THE ASSESSEE HEREIN AND PROCEED INGS U/S 153C HAD TO BE INITIATED ON HER AS PER LAW. WE DO NOT DEEM IT FIT TO DWELL INTO THE CASE LAWS RELIED UPON BY THE LD AR AS IN THOSE CASES TH ERE WAS A FINDING THAT THE DOCUMENT DID NOT BELONG TO SECTION 153C PERSON. HENCE THOSE CASES ARE FACTUALLY DISTINGUISHABLE FROM THE ASSESSEES C ASE. ACCORDINGLY THE ARGUMENTS ADVANCED BY THE LD AR IN THIS REGARD ARE DISMISSED. 5.2. THE NEXT ARGUMENT ADVANCED BY THE LD AR IS WIT H REGARD TO THE RECORDING OF SATISFACTION NOTE U/S 153C OF THE ACT AFTER A GAP OF TWO AND HALF MONTHS. WE FIND THAT THE ASSESSMENT WAS FRAME D U/S 153A OF THE ACT ON THE SEARCHED PERSON U/S 132 OF THE ACT ON 31.12. 2010. THE SATISFACTION NOTE WAS RECORDED BY THE LD AO OF THE SEARCHED PERSON THAT CERTAIN LOOSE SHEETS / DOCUMENTS FOUND IN SEARCH B ELONGS TO ASSESSEE HEREIN AND ACCORDINGLY PROCEEDINGS WERE TO BE INITI ATED U/S 153C OF THE ACT. WE FIND FROM THE SATISFACTION NOTE THAT THE S AME WAS RECORDED AFTER ASCERTAINING / SATISFYING THAT THE SAID CASH PORTIO N RECEIVED ON SALE OF PROPERTY HAD NOT BEEN FOUND REFLECTED IN THE RETURN OF INCOME OF THE ASSESSEE. THIS FACT WAS FURTHER SANCTIFIED / APPRO VED BY THE LD AO OF THE ASSESSEE ALSO THAT THE SAME HAD NOT FOUND REFLECTED IN THE IT RETURN OF THE ASSESSEE. WE FIND THAT THE HONBLE SUPREME COURT IN THE CASE OF CIT VS CALCUTTA KNITWEARS REPORTED IN (2014) 362 ITR 673 ( SC) HAD WITH REGARD TO THE TIMING OF RECORDING OF SATISFACTION NOTE HAD HELD AS UNDER:- IT(SS)A NO.59/13 13 44. IN THE RESULT WE HOLD THAT FOR THE PURPOSE OF SECTION 158BD OF THE ACT A SATISFACTION NOTE IS SINE QUA NON AND MUS T BE PREPARED BY THE AO BEFORE HE TRANSMITS THE RECORDS TO THE OTHER AO WHO HAS JURISDICTION OVER SUCH OTHER PERSON. THE SATISFACT ION NOTE COULD BE PREPARED AT EITHER OF THE FOLLOWING STAGES : (A) AT THE TIME OF OR ALONG WITH THE INITIATION OF PROCEEDINGS AGAINST THE SEARCHED PERSON UNDER SECTION 158BC OF THE ACT; (B) ALONG WITH THE ASSESSMENT PROCEEDINGS UNDER SEC TION 158BC OF THE ACT; AND (C ) IMMEDIATELY AFTER THE ASSESSMENT PROCEEDINGS A RE COMPLETED UNDER SECTION 158BC OF THE ACT OF THE SEARCHED PERS ON. 5.3. WE FIND THAT THE CIRCULAR NO. 24/2015 DATED 31 .12.2015 ALSO ENDORSES THE VIEWS OF THE HONBLE SUPREME COURT IN CALCUTTA KNITWEARS SUPRA. 5.4. IT IS WELL SETTLED THAT THE PROVISIONS OF SECT ION 158BC ARE PARI MATERIA WITH SECTION 153A OF THE ACT AND THAT OF SECTION 15 8BD ARE PARI MATERIA WITH SECTION 153C OF THE ACT. THE INSTANT CASE FAL LS UNDER THE CATEGORY (C) ABOVE OF THE HONBLE APEX COURT JUDGEMENT I.E RECOR DING OF SATISFACTION AFTER THE ASSESSMENT PROCEEDINGS ARE COMPLETED U/S 153A OF THE SEARCHED PERSON. IN THE INSTANT CASE SATISFACTIO N NOTE U/S 153C OF THE ACT WAS RECORDED ON 28.3.2011 WHICH IS AFTER TWO AN D HALF MONTHS OF COMPLETION OF ASSESSMENT U/S 153A OF THE ACT. WHET HER THE SAME COULD BE CONSTRUED AS RECORDING OF SATISFACTION IMMEDIAT ELY AFTER THE COMPLETION OF ASSESSMENT OF SEARCHED PERSON AS CON TEMPLATED IN THE GUIDELINES OF HONBLE APEX COURT. THE LD AR PLACED RELIANCE IN THIS REGARD ON THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS BHARAT BHUSHAN JAIN & ORS REPORTED IN (2016) 138 DTR (DEL) 97 DATED 8.1.2015 WHEREIN IT WAS HELD AS BELOW:- SATISFACTION NOTE RECORDED UNDER SECTION 158BD ALMO ST ONE YEAR OR MORE THAN ONE YEAR AFTER THE COMPLETION OF ASSESSME NT OF THE SEARCHED PERSON CANNOT BE CONSIDERED TO BE CONTEMPO RANEOUS TO THE ASSESSMENT PROCEEDINGS AND THEREFORE IMPUGNED NOTICES ISSUED PURSUANT TO SUCH SATISFACTION NOTES WERE NOT IN CONFORMITY WITH THE REQUIREMENTS OF SECTION 158BD. IT(SS)A NO.59/13 14 IT COULD BE SEEN THAT IN THE SAID CASE THE SATISF ACTION NOTE WAS RECORDED AFTER ONE YEAR AFTER THE COMPLETION OF ASSESSMENT A ND HENCE THE HONBLE DELHI HIGH COURT RELYING ON HONBLE APEX COURT IN C ALCUTTA KNITWEARS SUPRA HELD THAT THE SAME CANNOT BE CONSIDERED TO BE CONTEMPORANEOUS TO THE ASSESSMENT PROCEEDINGS. IN THE INSTANT CASE T HE SATISFACTION NOTE WAS RECORDED WITHIN 3 MONTHS FROM THE DATE OF COMPL ETION OF ASSESSMENT PROCEEDINGS WHICH COULD BE CONSIDERED AS BEING DONE EXPEDITIOUSLY BY THE LD AO AND HENCE THE DECISION RELIED UPON ON THE HONBLE DELHI HIGH COURT DOES NOT SUPPORT THE CASE OF THE ASSESSEE AND THE ARGUMENTS OF THE LD AR. 5.5. THE NEXT ARGUMENT ADVANCED BY THE LD AR IS TH AT IN ANY CASE THERE CANNOT BE ANY CAPITAL GAINS IN ASST YEAR 2010-11 IN RESPECT OF 4824 SQ.FT OF BUILDING SOLD TO M/S PARK CLINIC AS ADMITTEDLY T HE POSSESSION WAS HANDED OVER TO THE BUYER ON OR BEFORE 17.10.2008. IN THIS REGARD WE FIND THAT ADMITTEDLY THE SEARCH IN THE PREMISES OF THE BUYER HAPPENED IN THE SUBJECT MENTIONED PROPERTY ON 17.10.2008. IT IS NO T THE CASE OF THE REVENUE THAT THE BUYER WAS IN ILLEGAL POSSESSION OF THE SUBJECT MENTIONED PROPERTY OF THE SELLER (I.E THE ASSESSEE HEREIN) ON THE DATE OF SEARCH. NO LEGAL PROCEEDINGS FOR THE SAME ( I.E FOR ILLEGAL PO SSESSION) WERE PENDING IN ANY JUDICIAL FORUMS THAT WERE BROUGHT TO OUR KNO WLEDGE BY BOTH THE PARTIES. IN THIS REGARD HENCE IT COULD BE SAFELY CONCLUDED THAT ON THE DATE OF SEARCH THE POSSESSION OF THE SUBJECT MENTIONED PROPERTY WAS VERY MUCH IN THE HANDS OF THE BUYER. WE FIND THAT THE B UYER DR S K KARAN HAD IN HIS STATEMENT ON OATH U/S 132(4) OF THE ACT ON T HE DATE OF SEARCH ON 17.10.2008 / 18.10.2008 HAD VIDE REPLY TO QUESTION NO. 8 DEPOSED AS UNDER:- ANS TO Q. NO. 8 PARK CLINIC A FIRM IN WHICH I AM A PARTNER IS THE OWNER OF SECOND THIRD AND FOURTH FLOOR. ALTHOUGH IT IS YET TO BE REGISTERED IN THE FAVOUR OF PARK CLINIC. THE ABOVE MENTIONED PROPERTY HAS BEEN PURCHASED FROM SHRISTI BUILDER S MT. SHAKUNTALA KANOI. IT(SS)A NO.59/13 15 THIS REPLY HAS NOT BEEN RETRACTED BY THE BUYER AT A NY TIME IN FUTURE DURING THE SUBSEQUENT PROCEEDINGS. WE FIND THAT ONLY THE REGISTRATION OF THE PROPERTY HAD HAPPENED ON 30.7.2009 RELEVANT TO ASST YEAR 2010-11. THE ASSESSEE NO DOUBT HAD REPORTED CAPITAL LOSS ON TH E SUBJECT MENTIONED PROPERTY IN ASST YEAR 2010-11 IN THE ORIGINAL RETUR N AS WELL AS IN THE RETURN FILED IN RESPONSE TO NOTICE U/S 153C OF THE ACT. B UT WHAT WE SEE IS THE POSSESSION OF THE PROPERTY HAD ALREADY BEEN HANDED OVER BY THE ASSESSEE TO THE BUYER AND ONLY REGISTRATION HAS BEE N DELAYED WHICH WAS ULTIMATELY DONE IN ASST YEAR 2010-11. IN THESE CI RCUMSTANCES IT COULD BE SAFELY HELD THAT THE CAPITAL GAINS CANNOT BE ASSESS ED IN THE ASST YEAR 2010-11 AS THAT IS THE NOT THE YEAR OF HANDING OVER OF THE POSSESSION OF THE PROPERTY . WE FIND LOT OF FORCE IN THE ARGUME NT OF THE LD AR THAT THERE IS NO ESTOPPEL AGAINST THE STATUTE AND REVENUE CANN OT TAKE ADVANTAGE OF THE IGNORANCE OF THE ASSESSEE WITH REGARD TO ASSESS ABILITY OF INCOME IN A PARTICULAR YEAR. WE FIND THAT THE HONBLE JURISDICT IONAL HIGH COURT HAD ADDRESSED THIS ASPECT WHILE RENDERING THE DECISION IN THE CASE OF CIT VS. BHASKAR MITTER REPORTED IN (1994) 73 TAXMAN 437 (CAL) AT PARA 8 AT PG. 442 REFERRED IN MAYNAK PODDAR (HUF) VS WEALTH TAX O FFICER REPORTED IN (2003) 262 ITR 0633 (CAL) BY OBSERVING AS UNDER:-: '....... AN ASSESSEE IS LIABLE TO PAY TAX ONLY UPON SUCH INCOME AS CAN BE IN LAW INCLUDED IN HIS TOTAL INCOME AND WHIC H CAN HE LAWFULLY ASSESSED UNDER THE ACT. THE LAW EMPOWERS THE ITO TO ASSESS THE INCOME OF AN ASSESSEE ACCORDING TO LAW AND DETERMIN E THE TAX PAYABLE THEREON. IN DOING SO HE CANNOT ASSESS AN A SSESSEE ON AN AMOUNT WHICH IS NOT TAXABLE IN LAW EVEN IF THE SA ME IS SHOWN BY AN ASSESSEE. THERE IS NO ESTOPPEL BY CONDUCT AGAINS T LAW NOR IS THERE ANY WAIVER OF THE LEGAL RIGHT AS MUCH AS THE LEGAL LIABILITY TO BE ASSESSED OTHERWISE THAN ACCORDING TO THE MANDATE OF THE LAW (SIC). IT IS ALWAYS OPEN TO AN ASSESSEE TO TAKE THE PLEA T HAT THE FIGURE THOUGH SHOWN IN HIS RETURN OF TOTAL INCOME IS NOT TAXABLE IN LAW. ........' 5.6. WE ALSO PLACE RELIANCE ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS PODAR CEMENT (P) LTD REPORTED IN (1997) 226 ITR 625 (SC) WHEREIN IT WAS HELD AS BELOW:- IT(SS)A NO.59/13 16 52. FROM THE CIRCUMSTANCES NARRATED ABOVE AND FROM THE MEMORANDUM EXPLAINING THE FINANCE BILL 1987 (SUPRA ) IT IS CRYSTAL CLEAR THAT THE AMENDMENT WAS INTENDED TO SUPPLY AN OBVIOUS OMISSION OR TO CLEAR UP DOUBTS AS TO THE MEANING OF THE WORD 'OWNER' IN SECTION 22. WE DO NOT THINK THAT IN THE LIGHT OF THE CLEAR EXPOSITION OF THE POSITION OF A DECLARATORY/CLARIFI CATORY ACT IT IS NECESSARY TO MULTIPLY THE AUTHORITIES ON THIS POINT . WE HAVE THEREFORE NO HESITATION TO HOLD THAT THE AMENDMENT INTRODUCED BY THE FINANCE BILL 1988 WAS DECLARATORY/CLARIFICATOR Y IN NATURE SO FAR AS IT RELATES TO SECTION 27(III) (IIIA) AND (IIIB ). CONSEQUENTLY THESE PROVISIONS ARE RETROSPECTIVE IN OPERATION. IF SO T HE VIEW TAKEN BY THE HIGH COURTS OF PATNA RAJASTHAN AND CALCUTTA A S NOTICED ABOVE GETS ADDED SUPPORT AND CONSEQUENTLY THE CONT RARY VIEW TAKEN BY THE DELHI BOMBAY AND ANDHRA PRADESH HIGH COURTS IS NOT GOOD LAW. 53. WE ARE CONSCIOUS OF THE SETTLED POSITION THAT UNDE R THE COMMON LAW OWNER MEANS A PERSON WHO HAS GOT VALID TITLE LE GALLY CONVEYED TO HIM AFTER COMPLYING WITH THE REQUIREMENTS OF LAW SUCH AS TRANSFER OF PROPERTY ACT REGISTRATION ACT ETC. BU T IN THE CONTEXT OF SECTION 22 HAVING REGARD TO THE GROUND REALITIES AN D FURTHER HAVING REGARD TO THE OBJECT OF THE ACT NAMELY 'TO TAX TH E INCOME' WE ARE OF THE VIEW THAT THE OWNER IS A PERSON WHO IS ENTIT LED TO RECEIVE INCOME FROM THE PROPERTY IN HIS OWN RIGHT. 54. IN THE LIGHT OF THE ABOVE NARRATION AND DISCUSSION WE DO NOT THINK IT NECESSARY TO DISCUSS ANY MORE SEPARATELY T HE SUBMISSIONS ADVANCED ACROSS THE BAR. 55. WE ANSWER THE QUESTION REFERRED TO THIS COURT IN I .R.C. NOS. 9- 10 OF 1986 IN THE NEGATIVE AND IN FAVOUR OF THE REV ENUE. THE CIVIL APPEAL NO. 4165 OF 1994 FILED BY THE REVENUE STANDS DISMISSED AND CIVIL APPEAL NO. 4549 OF 1996 BY THE ASSESSEE STAN DS ALLOWED. HOWEVER THERE WILL BE NO ORDER AS TO COSTS. IN THE INSTANT CASE THE SUBJECT MENTIONED PROPERTY (I.E THE PROPERTY FOR WHICH POSSESSION WAS HANDED OVER TO THE BUYER BY TH E SELLER ) WAS THE ADDRESS OF THE PROPERTY IN WHICH THE SEARCH AND SEI ZURE ACTION U/S 132 OF THE ACT WAS CONDUCTED BY THE INCOME TAX DEPARTMENT ON 17.10.2008 WHICH GOES TO PROVE THAT THE POSSESSION WAS HANDED OVER TO THE BUYER BY THE ASSESSEE ON OR BEFORE THE DATE OF SEARCH. THE BUYER (I.E DR S K KARAN AND PARK CLINIC) WOULD BE ENTITLED TO THE FR UITS OF THE SUBJECT MENTIONED PROPERTY EITHER BEING USED FOR THEIR OWN BUSINESS WITHOUT ANY ATTACHED COSTS THEREON. IN OTHER WORDS THE BUYER NEED NOT PAY ANY IT(SS)A NO.59/13 17 RENTALS TO ANYBODY FOR THE SUBJECT MENTIONED PROPER TY AS THEY WERE ALREADY IN POSSESSION OF THE PROPERTY ON PAYING THE CONSIDERATION TO THE SELLER AND ONLY THE REGISTRATION OF THE PROPERTY HA PPENED ON 30.7.2009 FALLING IN ASST YEAR 2010-11. 5.7. IN VIEW OF THE AFORESAID FACTS AND FINDINGS A ND RESPECTFULLY FOLLOWING THE DECISIONS OF THE HONBLE JURISDICTIONAL HIGH CO URT AND HONBLE SUPREME COURT SUPRA WE HOLD THAT THE CAPITAL GAINS / LOSS CANNOT BE CONSIDERED IN THE HANDS OF THE ASSESSEE IN RESPECT OF SALE OF 4824 SQ.FT OF BUILDING TO DR S K KARAN / PARK CLINIC IN ASST YEAR 2010-11 . ACCORDINGLY THE GROUNDS 1 TO 6 RAISED BY THE ASSESSEE ARE PARTL Y ALLOWED. 5.8. THE OTHER GROUND RAISED BY THE ASSESSEE WITH REGARD TO CLAIM OF INDEXATION BECOMES INFRUCTUOUS TO THE EXTENT OF 48 24 SQ.FT ALONE IN VIEW OF OUR DECISION RENDERED HEREINABOVE THAT CAPITAL G AINS FOR 4824 SQ.FT OF BUILDING WOULD NOT BE ASSESSABLE IN ASST YEAR 2010- 11 IN THE HANDS OF THE ASSESSEE. 5.9. WE HOLD THAT WITH REGARD TO THE SALE OF REMAIN ING SQUARE FEET OF BUILDING (I.E 540 SQ.FT) BY THE ASSESSEE TO (I) SIT A PROJECTS ; (II) O.P.AGARWAL AND (III) MURALI PRASAD THE SAME WOULD BE ASSESSABLE IN ASST YEAR 2010-11. THERE IS NO CONTRARY EVIDENCE BR OUGHT ON RECORD FOR NOT TAXING THE SAME IN ASST YEAR 2010-11 AS WAS PRE SENT IN THE CASE OF SALE OF BUILDING TO DR S K KARAN / PARK CLINIC. IN THIS REGARD WE FIND THAT THE LD AO HAD ADOPTED THE SALE CONSIDERATION AT THE RATES PRESCRIBED BY THE STAMP VALUATION AUTHORITY IN TERMS OF SECTION 5 0C OF THE ACT. WE FIND THAT THE ASSESSEE HAD OBJECTED TO THE ADOPTION OF T HE VALUE DETERMINED BY THE STAMP VALUATION AUTHORITY U/S 50C OF THE ACT. I N SUCH CASE THE LAW PROVIDES IN SECTION 50C(2) OF THE ACT THAT THE REFE RENCE NEED TO BE MADE TO THE DISTRICT VALUATION OFFICER FOR ASCERTAINING THE VALUE OF PROPERTY AND NECESSARY PRECAUTIONS ARE ALSO PROVIDED THEREON IN THE STATUTE TO THE ASSESSEE. WE FIND SUPPORT FROM THE DECISION OF TH E HONBLE JURISDICTIONAL IT(SS)A NO.59/13 18 HIGH COURT IN THE CASE OF SUNIL KUMAR AGARWAL VS CI T REPORTED IN (2015) 372 ITR 83 (CAL) HAD HELD AS BELOW:- 7. WE HAVE ALREADY SET OUT HEREINABOVE THE RECITAL APP EARING IN THE DEEDS OF CONVEYANCE UPON WHICH THE ASSESSEE WAS REL YING. PRESUMABLY THE CASE OF THE ASSESSEE WAS THAT PRICE OFFERED BY THE BUYER WAS THE HIGHEST PREVAILING PRICE IN THE MARKE T. IF THIS IS HIS CASE THEN IT IS DIFFICULT TO ACCEPT THE PROPOSITION THAT THE ASSESSEE HAD ACCEPTED THAT THE PRICE FIXED BY THE DISTRICT S UB REGISTRAR WAS THE FAIR MARKET VALUE OF THE PROPERTY. NO SUCH INFE RENCE CAN BE MADE AS AGAINST THE ASSESSEE BECAUSE HE HAD NOTHING TO DO IN THE MATTER. STAMP DUTY WAS PAYABLE BY THE PURCHASER. IT WAS FOR THE PURCHASER TO EITHER ACCEPT IT OR DISPUTE IT. THE AS SESSEE COULD NOT ON THE BASIS OF THE PRICE FIXED BY THE SUB-REGISTRA R HAVE CLAIMED ANYTHING MORE THAN THE AGREED CONSIDERATION OF A SU M OF RS.10 LAKHS WHICH ACCORDING TO THE ASSESSEE WAS THE HIG HEST PREVAILING MARKET PRICE. IT WOULD FOLLOW AUTOMATICALLY THAT HI S CASE WAS THAT THE FAIR MARKET VALUE OF THE PROPERTY COULD NOT BE RS.3 5 LAKHS AS ASSESSED BY THE DISTRICT SUB REGISTRAR. IN A CASE O F THIS NATURE THE ASSESSING OFFICER SHOULD IN FAIRNESS HAVE GIVEN A N OPTION TO THE ASSESSEE TO HAVE THE VALUATION MADE BY THE DEPARTME NTAL VALUATION OFFICER CONTEMPLATED UNDER SECTION 50C. AS A MATTER OF COURSE IN ALL SUCH CASES THE ASSESSING OFFICER SHOULD GIVE AN OPTION TO THE ASSESSEE TO HAVE THE VALUATION MADE BY THE DEPARTME NTAL VALUATION OFFICER. 8. FOR THE AFORESAID REASONS WE ARE OF THE OPINION TH AT THE VALUATION BY THE DEPARTMENTAL VALUATION OFFICER CO NTEMPLATED UNDER SECTION 50C IS REQUIRED TO AVOID MISCARRIAGE OF JU STICE. THE LEGISLATURE DID NOT INTEND THAT THE CAPITAL GAIN SH OULD BE FIXED MERELY ON THE BASIS OF THE VALUATION TO BE MADE BY THE DIS TRICT SUB REGISTRAR FOR THE PURPOSE OF STAMP DUTY. THE LEGISL ATURE HAS TAKEN CARE TO PROVIDE ADEQUATE MACHINERY TO GIVE A FAIR T REATMENT TO THE CITIZEN/TAXPAYER. THERE IS NO REASON WHY THE MACHIN ERY PROVIDED BY THE LEGISLATURE SHOULD NOT BE USED AND THE BENEFIT THEREOF SHOULD BE REFUSED. EVEN IN A CASE WHERE NO SUCH PRAYER IS MAD E BY THE LEARNED ADVOCATE REPRESENTING THE ASSESSEE WHO MAY NOT HAVE BEEN PROPERLY INSTRUCTED IN LAW THE ASSESSING OFFI CER DISCHARGING A QUASI JUDICIAL FUNCTION HAS THE BOUNDEN DUTY TO AC T FAIRLY AND TO GIVE A FAIR TREATMENT BY GIVING HIM AN OPTION TO FOLLOW THE COURSE PROVIDED BY LAW. 9. FOR THE AFORESAID REASONS THE ORDER UNDER CHALLENG E IS SET ASIDE. 10. THE IMPUGNED ORDER INCLUDING ORDERS PASSED BY THE CIT(A) AND THE ASSESSING OFFICER ARE ALL SET ASIDE. THE MATTER IS REMANDED TO THE ASSESSING OFFICER. HE SHALL REFER THE MATTER TO THE DEPARTMENTAL VALUATION OFFICER IN ACCORDANCE WITH LAW. AFTER SUC H VALUATION IS IT(SS)A NO.59/13 19 MADE THE ASSESSMENT SHALL BE MADE DE NOVO IN ACCOR DANCE WITH LAW. RESPECTFULLY FOLLOWING THE DECISION OF HONBLE JURI SDICTIONAL HIGH COURT IN THE CASE OF SUNIL KUMAR AGARWAL SUPRA WE DIRECT TH E LD AO TO MAKE A REFERENCE TO DISTRICT VALUATION OFFICER (DVO) OF TH E SUBJECT MENTIONED PROPERTY (I.E THE SHOPS PERTAINING TO 540 SQ.FT ALO NE WHICH WERE SOLD TO THREE PARTIES NAMELY SITA PROJECTS O.P.AGARWAL AND MURALI PRASAD) IN ACCORDANCE WITH PROVISIONS OF SECTION 50C(2) OF THE ACT. 5.10. SINCE THIS LIMITED ISSUE OF DETERMINATION OF SALE CONSIDERATION FOR 540 SQ.FT OF BUILDING IS SET ASIDE TO THE FILE OF T HE LD AO AS DIRECTED ABOVE WE DEEM IT FIT AND APPROPRIATE TO SET ASIDE THE REL ATED CLAIM OF INDEXATION THEREON ALSO TO THE FILE OF THE LD AO AS IT WOULD B ECOME ACADEMIC IN TERMS OF COMPUTATION OF CAPITAL GAINS / LOSS. THE GROUND S RAISED IN THIS REGARD BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSE S. 6. THE GROUND NO. 9 RAISED BY THE ASSESSEE IS GENER AL IN NATURE AND DOES NOT REQUIRE ANY ADJUDICATION. 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 19/10 / 2016. SD/ - (S.S.VISWANETHRA RAVI) SD/ - (M.BALAGANESH) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA ; $% DATED 19/10/2016 & ()*/PRAKASH MISHRA . / PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. 4 ( ) / THE CIT(A) KOLKATA. 4. 4 / CIT 5. 567 8 8 / DR ITAT KOLKATA 6. 79 / GUARD FILE. IT(SS)A NO.59/13 20 / BY ORDER / ( ASSTT. REGISTRAR) & ' / ITAT 5 //TRUE COPY//