Ita/8/2018 Of Smt Joshna Rajendra v. The Income Tax Officer

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 4 DAY OF DECEMBER, 2019 PRESENT THE HON'BLE MR.JUSTICE ARAVIND KUMAR AND THE HON'BLE MR. JUSTICE SURAJ GOVINDARAJ| 1.T.A. No.8 OF 2018 BETWEEN: SMT. JIOSHNA RAJENDRANO.674, 4 ‘CC’ MAIN ROADOMBR LAYOUT, BHUVANAGARI|BANASAVADI, BENGALURU-560043 _. APPEKELLANT| (BY SRI. ASHOK A KULKARNI, ADVOCATE)| AND: THERE INCOME TAX OFFICEWARD-13(3)BBNGALURU-560032—. RBSPONDBENT (BY SRI. K.V. ARAVIND, ADVOCATE) RREEEK THIS APPEAL IS FILED UNDER SECTION 260-A OF|INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED|18.08.2017 PASSED IN ITA NO.1038/BANG/2014 ANDC.O.NO.95/B/2015, FOR THE ASSESSMENT YEAR 2009-2O10, PRAYING TO FORMULATE THE SUBSTANTIALQUESTIONS OF LAW AS STATED ABOVE AND SET ASIDETHR ORDER OF THR INCOME TAX APPBLLATEK TRIBUNAL IN-ITA|NO.1038/BANG/2014|ANTIC.0O.NO.95/8/2015DATED: 18.08.2017 IN ANNBXURE ‘A’ AND RESTORE THEORDER OF THR’ COMMISSIONER OF INCOME TAX(APPEALS)-VNO.2/SAL/CIT(A)-V /2013-14DATHD.20.05.2014 IN ANNEXURE ‘C’ AND BIC. THIS APPEAL COMING ON FOR ADMISSION THIS.DAY,ARAVIND KUMAR, J.,DELIVERED THE FOLLOWING:-JU DBGMEN Ti 1.Though matter is listed for admission by consentof learned advocates appearing for parties, it is taken upfor final disposal. 2.Heard Sri.Ashok A.Kulkarni, learned advocate|appearing for appellant and Sri.K.V.Aravind, learnedPanel Counsel appearing for respondent. 3.Appellant-assessee filed return of income for the assessment year 2009-10 on 31.07.2009 declaring atotal income of Rs.2,25,550/-. Same was processedunder Section 143(1)(a) of the Income Tax Act(hereinafter referred to as the ‘Act’, for short) on20.12.2010. Based on alleged information received, Assessing Officer issued notice to assessee undersection 148 of the Act on 17.02.2012. Subsequently,notices under Sections 143(2) and 142(1) of the Actcame to be issued to assessee on 16.03.2012 ands20.09.2012 respectively. On the basis of the replyreceived, assessment order came to be passed on19.03.2013 (Annexure-B). 4Being aggrieved by said order, an appeal came tobe filed before Commissioner of Income Tax (Appeals)-V,which came to be partly allowed by order dated20.05.2014. 5.Being aggrieved by the order of Commissioner ofIncome Tax (Appeals), assessee filed further appealbefore Income Tax Appellate Tribunal in ITA No.1038—(Bang) 2014, which was allowed in part by the Tribunal. —In the said appeal, assessee filed Cross-objectionsraising an issue with regard to the jurisdiction of theAssessing Officer exercised under Section 147 of the Act. and contending that there was no material evidenceavailable on record to arrive at a conclusion that the|income has escaped from assessment and as such,reopening of the reassessment was bad. However, thesaid contention came to be negatived by the Tribunaland insofar as issue relating to determination of thevalue of immovable property, matter came to beremanded back to Commissioner ot [Income Tax(Appeals) for adjudication. 6.As could be seen from the order of Tribunal,reason for issuance of notice for reopening of theassessment was on the basis of the information receivedfrom the office of Inspector General of Stamps and.Registration, Bangalore through the Commissioner ofIncome Tax, Bangalore-V, Bangalore whereunder it was.noticed that appellant along with Mrs.Ananda YogendraNaidu had sold the immovable property bearing OldNo.1A, now bearing Corporation No.119/2, Mahatma 6.As could be seen from the order of Tribunal,reason for issuance of notice for reopening of theassessment was on the basis of the information receivedfrom the office of Inspector General of Stamps and.Registration, Bangalore through the Commissioner ofIncome Tax, Bangalore-V, Bangalore whereunder it was.noticed that appellant along with Mrs.Ananda YogendraNaidu had sold the immovable property bearing OldNo.1A, now bearing Corporation No.119/2, Mahatma Gandhi Road, Bangalore to M/s.Gerdie ConstructionsPrivateLimitedforasaleconsiderationoT|Rs.59,00,000/- on 28.06.2008 as against the guidancevalueaS|perRegistrationAuthorities,|1t_WaSRs.3,29,17,500/- and as _ such, difference in salconsideration being to an extent of Rs.2,70,17,500/-, itattracted capital gains tax as per the provisions ofsection SOC of the Act. The basis for determining thecapital gains tax is valuation. The market value of theproperty or actual sale consideration whichever ishigher was required to be adopted. Assessing Officerfound that in the return of income, assessee neither)declared the capital gains or claimed exemption fromcapital gains tax. As such, it came to be held byAssessing Officer that there was reason to believe thatincome chargeable to tax under capital gains hadescaped assessment within the meaning of Section 147.ot the Act. T.Though Mr.Ashok Kulkarni, learned advocateappearing for appellant-assessee has made valiantattempt to contend that Tribunal erred in consideringthe cross-objection filed before Tribunal on the groundaiter having observed that there was no direction to theAssessing Officer and as such, there was no basis forre-opening of the assessment by exercising of powers. —We are not inclined to accept said contention for simplereason that in the very same order of Tribunal it has.been noticed that in the paper book which came to befiled by assessee which was tound at Page 43,information which necessitated the Assessing Officer toreopen the assessment had been found namely thecommunication received from the office of InspectorGeneral|ot stampsandRegistration,Bangalore|addressed to Commissioner of Income Tax, Bangalorewhich was forwarded to the jurisdictional AssessingOfficer by communication dated 09.02.2012 as well asto the Directorate of Income Tax (Intelligence) vide letter dated O1.02.2012. This material which was available|before the Assessing Officer had persuaded him to forman opinion that income chargeable to tax had escapedfrom assessment. This finding would not give rise for usto formulate substantial question of law as sought for inthe appeal memorandum. 8.Insofar as handing over possession of the propertyis concerned, learned counsel appearing for theassessee has contended that under the agreement ofsale dated 27.01.1995, possession has been deliveredand the said document was not disputed and as such,question of construing the possession delivered at alater date that too under sale deed dated 28.06.2008|would not arise and as such, question of determinationof the valuation based on said data does not arise, is anargument though at first blush look attractive is not so,for the simple reason that agreement of sale which isplaced on record before this Court at Annexure-A2 (agreement of sale 27.01.1995) has been perused by us—and Clause 6 of the said agreement reads:- “6.The Vendors|hasthis daydelivered the symbolic possession of the|Schedule Property to the Purchasers and|authorize the Purchasers to negotiate with|the tenants and obtain vacant possession.” QOA plain reading of above clause would clearlyindicate that possession of the property which has beendelivered is symbolic possession and not physicalpossession. (agreement of sale 27.01.1995) has been perused by us—and Clause 6 of the said agreement reads:- “6.The Vendors|hasthis daydelivered the symbolic possession of the|Schedule Property to the Purchasers and|authorize the Purchasers to negotiate with|the tenants and obtain vacant possession.” QOA plain reading of above clause would clearlyindicate that possession of the property which has beendelivered is symbolic possession and not physicalpossession. 10,By applying Section 53A of Transfer of PropertyAct and Section 2(47) (v) of I.T.Act, it has been rightlyheld that physical possession of the property was nottransferred to the purchaser under the agreement ofsale. In other words, it has been held by Tribunal thatin the absence of any finding about handing over ofpossession in any earlier year, it cannot be said thatproperty was transferred in any earlier year and for ascertaining same, matter has been remanded back toCommissioner of Income Tax (Appeals) with regard toissue of possession and said finding recorded by theTribunal cannot be found fault with. That apart, issuerelating to valuation, Tribunal|has noticed that'Assessing Officer had not referred the matter to thevaluation officer as required under Section 5OC(2). Saidvaluation would be the basis for determining theamount of capital gains tax which would be taxable forthe relevant year. The finding recorded by the Tribunalis purely question of facts not giving rise to substantialquestion of law being formulated. As such, we do notfind any other ground to entertain this appeal.Accordingly, it stands dismissed. 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