Both Tcas v. Shri P.n.thiagarajan

In the High Court of Judicature at Madras Coram : The Honourable Mr.Justice T.S.SIVAGNANAM and The Honourable Mr.Justice K.RAVICHANDRABAABU Tax Case Appeal Nos.675 & 676 of 2017& CMP.No.17564 of 2017 The Commissioner of Income Tax,Non Corporate Circle 10(1), Chennai. ...Appellant in both TCAs Vs...Respondent inTCA.No.675/2017 Shri P.N.Thiagarajan Smt.P.T.Geetha Ramani ...Respondent inTCA.No.676/2017 APPEALS under Section 260A of the Income Tax Act, 1961against the common order dated 31.1.2017 made respectively inITA.Nos.2385 and 2384/Mds/2016 on the file of the Income TaxAppellate Tribunal, 'B' Bench, Chennai for the assessment year2010-11. TC(A) 675 & 676/2017: Appeal against the order passed by the commissioner ofIncome Tax (Appeals)-12, 121 Mahatma Gandhi Road, Chennai 34,dated 31.05.2016 in ITA.Nos.73/CIT(A)-12/2013-14, ITA.NO.74/CIT(A)-12/2013-14, for the assessment year 2010-11, against theorder passed by the Joint Commissioner of Income Tax BusinessRange XV(I/C), Chennai, dated 17/03/14 and 1413/14 inGIR.NO/PA.NO.AA.DPT1455B, and ALWPG5281G for the assesment year2010-11 respectively. For Appellant : Mr.M.Swaminathan and Ms.V.Pushpa COMMON JUDGMENT (Judgment was delivered by T.S.SIVAGNANAM,J) Heard the learned Senior Standing Counsel for the Revenue. https://hcservices.ecourts.gov.in/hcservices/ 2. These appeals have been filed by the Revenue raising thefollowing substantial questions of law : "i. Whether the Tribunal is right in holding that the transfer of property hastaken place in the assessment year 2009-10relying on an unregistered sale agreementwhereas the actual sale deed was registeredin the assessment year 2010-11 ?ii. Whether the Tribunal was right inupholding that the transfer of impugnedproperty took place in assessment year 2009-10 without considering the provisions ofSections 53A read with 17(1A) of theTransfer of Property Act, 1882 as amended in2001 ? iii. Whether the Tribunal is right inholding that the capital gain is assessableonly in assessment year 2009-10 even thoughthe agreement and power of attorney holderhas disclosed commission income from thesale of asset vide sale document dated27.4.2009 ? andiv. Whether the Tribunal was right inholding that the word 'assessable' wasintroduced only with effect from 01.10.2009and hence, Section 50C is not applicable inthis case though the property has alreadybeen assessed by the stamp valuingauthorities through sale deed dated27.4.2009 prior to insertion of the word'assessable' ?"3. Before we go into the aspect as to whether the abovequestions of law arise for consideration, we are required totake note of the following facts: The Revenue filed appeals before the Tribunal against theorders passed by the Commissioner of Income Tax (Appeals)deleting the disallowance of long term capital gains for theassessment year 2010-11 where transfer took place in thefinancial year 2008-09 as per the unregistered sale agreementdated 23.7.2008. The Revenue contended that the Commissioner ofIncome Tax (Appeals) erred in applying the provisions of Section2(47)(vi) of the Income Tax Act, 1961 read with Section 53A ofthe Transfer of Property Act and holding that the assessees hadgiven possession to the purchaser whereas the property was inthe possession of M/s.Voltas Limited on a long lease andoverlooked the judicial decisions irrespective of the fact thatthe transfer took place only on the date of registration of thesale deed on 27.4.2009. 4. The assessees filed the return of income for theassessment year 2010-11 disclosing the total income ofRs.14,32,470/- and Rs.1,94,230/- and the assessments were 4. The assessees filed the return of income for theassessment year 2010-11 disclosing the total income ofRs.14,32,470/- and Rs.1,94,230/- and the assessments were reopened by issuing notices under Section 148 of the Income TaxAct. The assessees submitted a letter requesting the AssessingOfficer to treat the return of income filed earlier as theirreply. The assessees, who are two in number, are co-owners ofthe property along with 18 co-owners, who had leased out theproperty to M/s.Voltas Limited for a period of 30 years from1975 onwards. The original owner of the property was oneMr.P.N.Chettiar and after his demise, his legal heirs are saidto have executed a power of attorney in favour of oneMr.S.Saravanan, who, in turn, executed the sale deed dated27.4.2009 in favour of the purchaser of the property. 5. In the reopening proceedings, the Assessing Officerfound that these facts were not disclosed in the return ofincome, which aspect was explained by the assessees stating thatthey had entered into an agreement dated 23.7.2008, though thesale deed was executed by the power of attorney holder on27.4.2009. The Assessing Officer applied the provisions ofSection 50C of the Income Tax Act and came to the conclusionthat the assessees sold the property during the financial year2009-10 irrespective of the fact that possession was given tothe purchaser based on the sale agreement dated 23.7.2008 for aconsideration of Rs.3,07,55,400/- and was of the opinion thatthe transfer took place in the assessment year 2010-11 and thatcapital gains are taxable in the hands of the assessees andaccordingly, two orders were passed respectively dated 17.3.2014and 14.3.2014. 6. Aggrieved by such orders, the assessees preferredappeals before the Commissioner of Income Tax (Appeals)reiterating the stand, which they had taken before the AssessingOfficer. The Commissioner of Income Tax (Appeals) considered thesale agreement and also the transaction, which took place in thefinancial year 2008-09 and held that the assessees received thefull sale consideration though the property was registered bythe power of attorney holder in 2009. After considering theprovisions of Section 2(47) of the Income Tax Act and Section53A of the Transfer of Property Act and the decision of thisCourt in the case of D.Kasthuri Vs. CIT [reported in (2010) 323ITR 40], it was held that the capital gains arose to theassessees on the basis of the sale agreement between the vendorand the vendee and applied the provisions of Section 2(47)(v) ofthe Income Tax Act and the transfer is complete in all aspects. 7. The Tribunal noted the findings rendered by theCommissioner of Income Tax (Appeals) in paragraph 32 of itsorder and held that the observation of the Commissioner ofIncome Tax (Appeals) that the assessee had complied with theprovisions in the financial year 2008-09 and paid capital gainsand that there were no long term capital gains taxable in theassessment year 2010-11 to be just and proper. The above findingrendered by the Tribunal is on re-appreciation of the factualposition as recorded by the Commissioner of Income Tax(Appeals). In respect of other co-owners, similar orders were passed by the Commissioner of Income Tax (Appeals) and they hadattained finality, as the Revenue did not prefer appeals againstthose orders. In the light of the above factual position, we areof the considered view that the above questions framed by theRevenue stating to be the substantial questions of law would notarise for consideration in these appeals, as the entire matteris fully factual. There is no error of law committed by theTribunal warranting interference by this Court. 8. Accordingly, the above tax case appeals are dismissed.No costs. Consequently, the connected CMP is also dismissed. passed by the Commissioner of Income Tax (Appeals) and they hadattained finality, as the Revenue did not prefer appeals againstthose orders. In the light of the above factual position, we areof the considered view that the above questions framed by theRevenue stating to be the substantial questions of law would notarise for consideration in these appeals, as the entire matteris fully factual. There is no error of law committed by theTribunal warranting interference by this Court. 8. Accordingly, the above tax case appeals are dismissed.No costs. Consequently, the connected CMP is also dismissed. Sd/- Asst.Registrar (CCC) /true copy/Sub Asst. RegistrarTo1.The Income Tax Appellate Tribunal, 'B' Bench, Chennai.2.The Commissioner of Income Tax,(Appeals-12)121 Mahatma Gandhi Road.Chennai 343.The Joint Commissioner of Income TaxBusiness Range XV(I/C)Chennai.+2cc to Mr.M.Swaminathan, Advocate sr.89447 TCA.Nos.675 & 676 of 2017and CMP.No.17564 of 2017 ssi(co)nr 12/01/2018 https://hcservices.ecourts.gov.in/hcservices/