Appell v. Sh. Balwinder Singh Bhunder

ITA No. 175 of 2016 (O&M)Date of decision: 22.02.2017 The Principal Commissioner of Income Tax-I, Chandigarh ..... Appell Vs. Sh. Balwinder Singh Bhunder| ..-.Respondent CORAM: HON BLE MR. JUSTICE AJAY KUMAR MITTALHON’ BLE MR. JUSTICEK RAMENDRA JAIN Present: Ms. Urvashi Dhugga, Advocate for the appellant. Ms. Radhika Suri, Sr. Advocate, with ©Ms. Rinku Dahiya, Advocate and Mr. Manpreet Singh,Advocate (in ITA Nos. 175 & 176 of 2016) Mr. Jagmohan Bansal, Advocate (in ITA No. 213 of 2016)for the assessee. Ajay Kumar Mittal,J. 1]This order shall dispose of ITA Nos. 175, 176 and 213 of 2016as according to the learned counsel for the parties, the issue involved in allthese appeals is identical. However, the facts are being extracted trom ITANo. 175 of 2016. |ITA No. 175 of 2016 has been preferred by the appellant-revenue under Section 260A of the Income Tax Act, 1961 (in short, “theAct’) against the order dated 8.12.2015, Annexure A.7, passed by the Income Tax Appellate Tribunal, Chandigarh Bench, Chandigarh (in short, “the Tribunal”) in ITA No. 27/Chd/2015 for the assessment year 2007-08,claiming following substantial questions of law:- (1)“Whether on the facts and circumstances of the case, theHon’ble ITAT was right in deleting the penalty when theassessee had not fully disclosed the accrued capital gain even inincome tax return filed under Section 148 and the appeal in theissue of quantum addition was pending before the Hon’bleSupreme Court? Hon’ble ITAT was right in deleting the penalty when theassessee had not fully disclosed the accrued capital gain even inincome tax return filed under Section 148 and the appeal in theissue of quantum addition was pending before the Hon’bleSupreme Court? (11)Whether on the facts and circumstances of the case and in law,the Hon’ble ITAT was right in deleting the penalty when theassessee had not fully disclosed the accrued capital gain andthereby furnishing inaccurate particulars of income especiallyin view of the decision of the Hon’ble Apex Court in the case ofSuraj] Lamp & Industries Private Limited Vs. State of Haryanaand another?the Hon’ble ITAT was right in deleting the penalty when theassessee had not fully disclosed the accrued capital gain andthereby furnishing inaccurate particulars of income especiallyin view of the decision of the Hon’ble Apex Court in the case ofSuraj] Lamp & Industries Private Limited Vs. State of Haryanaand another? 3.A few facts relevant for the decision of the controversyinvolved as narrated in the appeal may be noticed. The respondent-assesseeis one of the members of the Punjabi Cooperative House Building SocietyLimited consisting of 95 members present and Ex MLAs of PunjabLegislative Assembly who was the owner of 21.2 acres of land in VillageKansal, District Mohali (Punjab). The society entered into the tripartite JointDevelopment Agreement with M/s HASH Builders Private Limited (HASH)and M/s Tata Housing Development Company Limited Mumbai (THDC)which was agreed upon among these parties that the society shall transfer itsland to THDC in lieu of monetary consideration and consideration in kind.As per the agreement each member of the society having a plot of 500Square yards in the society shall received82,50,000/- as monetaryconsideration and as consideration in kind each member owning plot of 500°Square yards shall receive one furnished flat measuring 2250 square feet to be constructed by THDC. The cost of such furnished flat was ofd1,01,25,000/- The members owning plot of 1000 square were to get twosuch flats apart from the money as entire consideration. The assessee was theowner of 500 square yards of plot and as per the agreement, the totalconsideration accruing to the assessee came to.y1,83,75,000/-. The totalcapital gain on such transaction came to)y1,77,74,258/- out of which theassessee showed an amount of.211,11,785/- as long term capital gain in hisreturn of income. The balance amount of<1,66,62,2473/- was added back tothe income of the assessee by the Assessing Officer vide his order dated30.12.2010, Annexure A.1. Aggrieved by the order, the assessee filed anappeal before the Commissioner of Income Tax (Appeals) [CIT(A)]. Videorder dated 01.08.2011, Annexure A.2, the CIT(A) upheld the decision takenby the Assessing Officer and dismissed the appeal filed by the Assessee. Theassessee filed further appeal before the Tribunal. Vide order dated29.07.2013, Annexure A.3, the Tribunal dismissed the appeal of theassessee. The assessee thereafter filed an appeal before this Court. ThisCourt in a common judgment dated 22.07.2015 in ITA No. 200 of 2013C.S.Atwal Vs. Ihe Commissioner of Income Tax, Ludhiana and anotherdecided the case in favour of the assessee. The Assessing Officer imposedpenalty of<35,87,962/- under Section 271(1)(c) of the Act, vide order dated05.02.2014, Annexure A.5, for concealment of income and furnishinginaccurate particulars of income. Not satisfied with the order. The assesseefiled an appeal before the CIT(A). Vide order dated 21.10.2014, AnnexureA.6, the CIT(A) allowed the appeal of the assessee and deleted the penaltyimposed by the Assessing Officer holding that the assessee had furnished allthe material facts which were required to compute the correct capital gainwhich establishes his bonafides. Aggrieved by the order, the revenue filed an appeal before the Tribunal. Vide order dated 8.12.2015, Annexure A.7, theTribunal relying upon its order in the case of.ITO Vs. Shn Balwinder SinghDhillonin ITA No. 1140/Chd/2014 and.Shri Tey Parkash Singhin ITA!No.491/Chd/2015 dismissed the appeal of the revenue. Hence, the instantappeal by the revenue. 4We have heard learned counsel for the appellant. | 5 The matter is no longer res integra. In|C.S. Atwal’scase (Supra)in ITA No. 200 Of 2013 decided on July 22, 2015, the issue involvedregarding taxability of capital gains in such circumstances in the hand of theassessee stands decided by this Court. In the said case, the following issues emerged for consideration:- (1)Scope and legislative intent of Section 2(47)(11), (v) and (vi)of the Act;of the Act; (11)The essential ingredients for applicability of Section 53A of1882 Act;1882 Act; (111)Meaning to be assigned to the term “possession”?| (iv)Whether in the facts and circumstances, any taxable capitalgains arises from the transaction entered by the assessee?gains arises from the transaction entered by the assessee? After considering the relevant statutory provisions and the case law, thefollowing conclusions were drawn:- “(1) Perusal of the JDA dated 25.02.2007 read with sale deedsdated 2.03.2007 and 25.04.2007 in respect of 3.08 acres and4.62 acres respectively would reveal that the parties hadagreed tor pro-rata transfer of land.dated 2.03.2007 and 25.04.2007 in respect of 3.08 acres and4.62 acres respectively would reveal that the parties hadagreed tor pro-rata transfer of land. )+No possession had been given by the transferor to the|transferee of the entire land in part performance of JDA|dated 25.02.2007 so as to fall within the domain of Section|53A of 1882 Act. |transferee of the entire land in part performance of JDA|dated 25.02.2007 so as to fall within the domain of Section|53A of 1882 Act. | /+The possession delivered, if at all, was as a licencee for the.development of the property and not in the capacity of atransferee.development of the property and not in the capacity of atransferee. )+No possession had been given by the transferor to the|transferee of the entire land in part performance of JDA|dated 25.02.2007 so as to fall within the domain of Section|53A of 1882 Act. |transferee of the entire land in part performance of JDA|dated 25.02.2007 so as to fall within the domain of Section|53A of 1882 Act. | /+The possession delivered, if at all, was as a licencee for the.development of the property and not in the capacity of atransferee.development of the property and not in the capacity of atransferee. =+Further Section 53A of 1882 Act, by incorporation, stoodembodied in section 2(47)(v) of the Act and all theessential ingredients of Section 53A of 1882 Act wererequired to be fulfilled. In the absence of registration ofJDA dated 25.02.2007 having been executed after24.09.2001, the agreement does not fall under Section 53A_of 1882 Act and consequently Section 2(47)(v) of the Actdoes not apply.embodied in section 2(47)(v) of the Act and all theessential ingredients of Section 53A of 1882 Act wererequired to be fulfilled. In the absence of registration ofJDA dated 25.02.2007 having been executed after24.09.2001, the agreement does not fall under Section 53A_of 1882 Act and consequently Section 2(47)(v) of the Actdoes not apply. &+It was submitted by learned counsel for the assessee-appellant that whatever amount was received from thedeveloper, capital gains tax has already been paid on thatand sale deeds have also been executed. In view ofcancellation of JDA dated 25.02.2007, no further amounthas been received and no action thereon has been taken. It!was urged that as and when any amount is received capitalgains tax shall be discharged thereon in accordance withlaw. In view of the aforesaid stand, while disposing of theappeals, we observe that the assessee appellants shallremain bound by their said stand.appellant that whatever amount was received from thedeveloper, capital gains tax has already been paid on thatand sale deeds have also been executed. In view ofcancellation of JDA dated 25.02.2007, no further amounthas been received and no action thereon has been taken. It!was urged that as and when any amount is received capitalgains tax shall be discharged thereon in accordance withlaw. In view of the aforesaid stand, while disposing of theappeals, we observe that the assessee appellants shallremain bound by their said stand. (+The issue of exigibility to capital gains tax having beendecided in favour of the assessee, the question ofexemption under Section 54F of the Act would not surviveany longer and has been rendered academic. |decided in favour of the assessee, the question ofexemption under Section 54F of the Act would not surviveany longer and has been rendered academic. | %+The Tribunal and the authorities below were not right inholding the assessee-appellant to be liable to capital gainstax in respect of remaining land measuring 13.5 acres forwhich no consideration had been received and which!stood cancelled and incapable of performance at presentdue to various orders passed by the Supreme Court and theHigh Court in PILs. Therefore, the appeals are allowed.”holding the assessee-appellant to be liable to capital gainstax in respect of remaining land measuring 13.5 acres forwhich no consideration had been received and which!stood cancelled and incapable of performance at presentdue to various orders passed by the Supreme Court and theHigh Court in PILs. Therefore, the appeals are allowed.” 6_Learned counsel for the appellant has not been able tocontrovert the applicability of the decision inC.S. Atwal’scase (Supra) and|that quantum proceedings have been adjudicated in favour of the assessee.Once that is so, no penalty under Section 271(1)(c) of the Act would beexigible. The substantial questions of law claimed in these appeals areanswered acordingly. Consequently, the appeals stand dismissed. In view ofdismissal of the main appeal, CM No. 3773-ClIl of 2017 also standsdismissed. | February 22, 2017Whether speaking/reasonedWhether reportable (Ajay Kumar Mittal)Judge 6_Learned counsel for the appellant has not been able tocontrovert the applicability of the decision inC.S. Atwal’scase (Supra) and|that quantum proceedings have been adjudicated in favour of the assessee.Once that is so, no penalty under Section 271(1)(c) of the Act would beexigible. The substantial questions of law claimed in these appeals areanswered acordingly. Consequently, the appeals stand dismissed. In view ofdismissal of the main appeal, CM No. 3773-ClIl of 2017 also standsdismissed. | February 22, 2017Whether speaking/reasonedWhether reportable (Ajay Kumar Mittal)Judge (Ramendra Jain)JudgeYes/No)Yes |