Itta/251/2022 Of Syed Sikander Ali v. The Principal Commissioner Of Income Tax-1

IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD TUESDAY, THE TWENTIETH DAY OF SEPTEMBERTWO THOUSAND AND TWENTY TWO PRESENT THE HONOURABLE THE CHIEF JUSTTCE UJJALAHUYANANDTHE HONOURABLE SRI JUSTICE C.V. BHASKARREDDY I.A.NO.1 0F 2022 in /& !.T.T.A NO.251 oF 2022 Appeal unCer section 260A of the lncorne Tax Act, 1961 against the order ofthe lncome Tax Appellate Tribunal, Hyderabad Bench-A, Hyderabad dated 02-09-2O21 in l.T.A No.781iHydl2015 for the Assessment )rear m1O-11 preferred againstthe order of the Commissioner of tnmrne Tax lRppeals) 4, 3d Floor, Annexe,Aayakar Bhavan, Basheerbagh, Hyderabad dated 27-02-n1S in AppealNo.O514l2O14-15llTO., Wd.6(3yCtT (A)4lHydl2O14-1S preferred against the orderof the income Tax Officer, Ward S(3), Hyderabad dated 2241-2014 in pAN/GIRNo.ACVPA441Q Between: Syed Sikander Ali, H. No.8-2-413i1lA, Plot No.476, Road No. 4, Banjara Hifls,Hyderabad-5Oo004, PAN- ACVPA4441 Q. ...APPELLANT AND The PrincipalComrnissioner of lncome Tax-1, l.T. Towers, A.C. Guards,Hyderabad-500004 ...RESPONDENT lA NO: 1 OF 2022 Petition under Section 5 of Limitation Act read with Sec.260A(2[a) of thelncome Tax Ac, 1961 praying that in the ckcumsiances stated in the affidavitfiled in support of the petition, the High Court may be pleased to condone thedelay of 76 days in filing the above appeal, as otherwise the Petitioner/Appellantwill be put to irreparable loss and severe hardship.filed in support of the petition, the High Court may be pleased to condone thedelay of 76 days in filing the above appeal, as otherwise the Petitioner/Appellantwill be put to irreparable loss and severe hardship. Counsel for the Appellant [: ] Counsel for the ResPondents: [-]The Court made the [following: ] I i I I THE HON'BLETHE CHIEFJUSTICE UJJAL BHUYANANDTHE HON'BLE SRTJUSTICE C.V.BHASKAR REDDYI.A.No.1 of 2022 inl& I.T.T.A.No.251 of 2022 IIIDGMENT, [/P- ]'( [Hon'bl ][th? ][( ][hicilatrtu ][t ]fat [Bhryan)] Flearrd Mr. Manmohan Dundu, leamed coursel for theappellant 2. This appeal has been preferred by the assessee underSection 260-A of the Income Tax Act, 1961 [(briefly'the ]Act'hereinafter) against the order dared 02.09.2021 passed by theIncome Tax Appellate Tribunal, Hyderabad Bench '-N,Hyderabad (Tribunal)lnLT.ANo.Z81lH,/d/2015 for theassessment ye ar 20 l0- | l. 3. This appeal has been filed proposing the followingquestions as substantial questions of law: 1. [tff/hether ]on the facts and in the circumstances of the casethe Appellate Tribunal was [justified ]in confirming theaddition made by the fusessing Officer, overlooking tlrcpeculiar facts and circumstances of the case, morepanic ulrrly intenrion of the panies with regard to theconditional sale transaction, and also provisions of the l-aw, which would render the uftirnate conclusions of tbeTribunal pervene ? 2. \Vhetlrer on the facts and in rk circumstances of tlre caseand in law, the Appellate Tribunal was jrstifiod in rei.ctingtle adjoumrnenr requesr and treating it as karrd in violationof the prirrciples of natural justice, ovedookirg rhe fact thattle adjoumrnenr requesr and treating it as karrd in violationof the prirrciples of natural justice, ovedookirg rhe fact thatcounsel on recorrd w"x not well and the penon who hadappeared on behalf of the coumel was not tle power ofattomey holder but only requested to seek adjoununent ?attomey holder but only requested to seek adjoununent ?3. \Xtrether on the facts and in the circumstances of tfu caseand in law, the Appellate Tribunal was jtstified in passingthe orider without considering the plea of the appellantthe orider without considering the plea of the appellantdt.L6.04.2022, wherein it was requested to lreep thematter in abelarrce till the outcome of civil suit (OS.No.89ot 2021) ?ot 2021) ? 4. \'Xihether on rhe faca and in tlre circumstances of the caseand in laq the Appellate Tdbural was justified in passingthe or,Cer after rhe period of 3 monttrs from the &te ofhearing misundentanding the lerer and spiric of Rule 3a(5)of Income Tax (Appellate Tribunal) Rules, 1963 and judicialprecedens by wrongly taking aid from Apex Courtdirections dr.27.O4.2Q21 in M.ANo.665l2021 inSM(!0)CNo.3/2020 overlooking the &cision of supremecourt in the case of Anil Rai (supn) ?of Income Tax (Appellate Tribunal) Rules, 1963 and judicialprecedens by wrongly taking aid from Apex Courtdirections dr.27.O4.2Q21 in M.ANo.665l2021 inSM(!0)CNo.3/2020 overlooking the &cision of supremecourt in the case of Anil Rai (supn) ? 4. 4. To appreciate the above [questions, we ][may ][briefly ][refer ][to]the orden passed bythe [revenue ][authorities.] 5. Appellant is an association [under ][the ][Act ][having the ][status]of individual'. In [the ][assessment (re-assessment) ][proceedinp]for the assessment par [2010-11, ][assessing ][officer ][added]Rs.2,81,88,700.00 as long [term capital ][gains ][uide ][the ][assessment]order &ted 22.01.2014 [passed ][under Section ][1a3(3) ][of ][the Act]read with Section 147 of [the ][said ][Act.] 6. We have carefully [gone ][through the ][onder ][of ][assessrnent]dated 22.01.2014 and [find ][that ][assessing ][officer ][had elaborately]considered the agreement of [sale, ][power ][of ][amomey ][and ][sale]deed registered on 20.04.2009. [Assessing ][officer ][thereafter ][held]as follows, Accordingly, in the present case, [the ][capital]gain is computed on the basis of [sale ][deed]registered on 2O'h April 2009 and applied [the ][50C]provision since the market value of the [propeny]was mentioned Rs.1,05,11,300/-. The [assessment ][is]concluded acconCingly. Penalty proceedings U/s.271(1)(c) [is ][initjated]separetely with [the ][reason ][that ][tlrere ][is a ][clear]escapement of income [was ][foturd ][and ][the ][assessee]has not filed his return of [irrcorne ][till ][the ][issle ][was]uneanhed by the revenue [and ][even ][in ][the ][retum]filed in response to nodce served [U/s.148, ][tlre]assessee is tryrng to male belief [with ][the]unregiste red transacdons [entered ][into.] The assessee has not provided details [such ][as]cost of acqGition of Jand [and ][cost ][of]corstnrction. F{ence, the [value ]of [the ][land ][and]construction cost of the building [put ][together ][is]adopted @ tu.500/- per Sq. Yd. [as 01.04.1981,]since, the propeffy acquired is before [01.04.1981.]Toal area of the land is 235 Sq.Yds and the [cost ][of]acquisition is worked out to Rs.2J22,6@/- [aker]indexation. 7. 7. Aggrieved bythe aforesaid order of [assessrnent, ][appef,ant]preferred appeal before the Commissioner o[ Income [Tax](Appeals)-a, Hlderabad (briefly ['CXT(4' ][hereinafter). ][By ]th.appellate order dated 27.02.2015, [C[T(A) ][corsirJered ][the]submissions made by the appellant [and noted that *roughr*re]appellant had uken 21 grounds in [appeal, ][those ][relate ][,oi only] one issue ,:r., [assessment ][of ][capital ][gains ][on ][account ][of ][transfer]of properry [situated ][at ][road ][No.4, ][Banjara ][L{lls' ][H'lderabad ][u'b]document darcd [29.0+.zwg.] 8. First appellate [authority noted the ][basic ][contention ][of ][the]vhich [was ][that ][registration ][document ][could ][not ][be]appellant taken as a [conch:sive ][proof ][to ][hold ][that ][there ][was ][transfer]resulting in capital [gairs. ][It ][was ][urged ][on ][behalf ][of ][the appellant]that preceding [and ][subsequent ][events ][should ][also be ][taken ][into]account to arrive [at ][the true ][character ][of ][the ][transaction']had [contended ][that ][transaction ][was ][done ][only ][to ][avail]Appellant the loan by [mongaging ][the ][propeny' ][AJter ][considering ][the]contention of [the ][appellant, ][OT(A) ][dismissed ][the ][appeal ][by]holding as unden The assessment order, [the ][submissions ][of ][the] 8. First appellate [authority noted the ][basic ][contention ][of ][the]vhich [was ][that ][registration ][document ][could ][not ][be]appellant taken as a [conch:sive ][proof ][to ][hold ][that ][there ][was ][transfer]resulting in capital [gairs. ][It ][was ][urged ][on ][behalf ][of ][the appellant]that preceding [and ][subsequent ][events ][should ][also be ][taken ][into]account to arrive [at ][the true ][character ][of ][the ][transaction']had [contended ][that ][transaction ][was ][done ][only ][to ][avail]Appellant the loan by [mongaging ][the ][propeny' ][AJter ][considering ][the]contention of [the ][appellant, ][OT(A) ][dismissed ][the ][appeal ][by]holding as unden The assessment order, [the ][submissions ][of ][the] assessee during [the ][assessment ][proceedings ][and ][the]appellate proceedings [and ][the ][documents ][placed ][on ][recond]are considered. It [is ][seen ][that there is ][no ][ambiguiry ][as ][to ]whether there is transfer [within ][the ][meaning ][to ][Section ][)]2(47) on account of [execution ][of ][the ][document ][dated]29/04/2@9. The [document ][clearly ][rccords ][that ][the] ) \ consideratiofl has been received and the possessior has beenhanded over to the purchaser. The assessee's reliarce onearlier transaction and application of part of considerationfor repayment of money to Sri K. Vijaya Bhaskar Reddywith virom an eadier agreement of sale / GPA was enteredinto b of no relevarrce to decide the rntune of tlretransaction. The distribution of money between the broker,assessee and *re purchaser of the properry from tlre loanraised agairst the properry is a subsequent act which wouldnot change character of the trarsaction already entered intobythe assessee widl the purchaser of the properry. The factdrat ukimate purchaser Smt. Manju Devi Taparia hasadmiued on oath that the consideration as reconded in thedocwnent was passed on and the transaction duly recorrdedin her accounts and sho*n in the retum of incorne filed byher for the AY 2010-11. The above documentation dulyconfirrned by the ultimate purchaser is of utmostimponance to arrive at th€ true nature of the transaction. Asregards of the MOU dated 29/U/2@9, it is seen tlat tlereis no reference of any strch agreement in tlre registrationdeed entry into on 29/04/2009. Similarly the agreement offree convelance allegedly entered into on 18'h May, 2009, is, un-registered and cannot cornpletely [relied upon. ]Funher,the possession of the properry and receiving the rent fromthe tenant would depend on later undersanding berweenparties. This cannot be a cons ide ration to decide whether I ' the assessee property was passed on through a documentconferring enforceable rights to tlle purchaser. In view ofthe discussion as above, I hold that there was a transfelwithin the meaning of Section 2$7) of the Income Tax Act,1961 giving rise to capital gains as evidenced by thedocument dated29/04/2009 berween the assessee and Smt.K. Manju Devi Taparia. Accordingly, the action of AO inassessing the capital gains is confirmed and the assessee'sappeal on this ground is dismissed. 9. On fr.rther appeal, Tribunal dismissed the appealon02.09.2022 holding as follows: 'We have given our thoughdul consideration to rivalpleadrngs against and in suppon of the impugned addition.We find no reason to express our concurrence with thista-xpayels stand. This is for the reason that he has alreadyexecuted the impugned rcgistered sale deed; treated as avalid sa,r.g"t u/s2(+7)(v) of the Act which is deemed tohave superceded the oral as well as un- registered documentsberween the vendor and the vendee; as the case may be.And also that whatever are the documents sought to be filedby way of additional evidence, the same only containpleadings before tlre respective civil and criminal couns :(supra) x,hich are yet to anain firnlity. We are unable to treatthe assessee or his family members' pleadings or evidencetherein as forming the sole basis so far as assessment of his 'We have given our thoughdul consideration to rivalpleadrngs against and in suppon of the impugned addition.We find no reason to express our concurrence with thista-xpayels stand. This is for the reason that he has alreadyexecuted the impugned rcgistered sale deed; treated as avalid sa,r.g"t u/s2(+7)(v) of the Act which is deemed tohave superceded the oral as well as un- registered documentsberween the vendor and the vendee; as the case may be.And also that whatever are the documents sought to be filedby way of additional evidence, the same only containpleadings before tlre respective civil and criminal couns :(supra) x,hich are yet to anain firnlity. We are unable to treatthe assessee or his family members' pleadings or evidencetherein as forming the sole basis so far as assessment of his irytgned capital gains b corrcemed. Ve wish ro refer tohon'ble apex courr's decision in CIT VS. Balbir SinghMaini Q0l7) [86 taxmanncom 94] rejectrng thedepanment's plea seeking to invoke a transfer of registereddocumeng thereby squarely covering tie issue so far as thefacs herein are involved as tlis assessee had not onlyappeared before the registration awhoriry claiming thereinthat he had indeed transferred peaceful vacant possession oftle relevant capital asser but received the entirecorresponding sale consideration. Any prior or subsequentdocument therein to, oral as q/ell as unregistered one oughtto be talsen as superceded by the foregoing registeredtransfer docurnent in issue. !?'e there quote honble apexcourr's Fr another decision CIT K.y.pilli ah (1%7) t63 ITR4111 (Sq to express our concurrence with the CIT(A)tdetailed discussion under challenge. The assessee's srrongendeavour to rely on rhe foregoing lftigation (supra) as wellas evidence deserves to be declined in light of his registeredsab deed &.20-04-2W. We accorrdingly uphold theimpugned long term capiral gain addition in assessee'shands. All the assessee's applications,/petitiors seeking toadmit additional grounds and evidence shall be deemed tohave been disposed of in light of our foregoing deaileddiscussion. Ve lastly acknowledge that although the irstant lis tbeing decided after a period of 90 dap from the date of hearing as per Rule 3a(5) of [the ][IT(AT) ][Rules ][1963, ][the]same however, does not [apply ][in ][the ][covid ][lockdown]situation as per hon'ble [aPex ][couftrs ][recent ][directions ][dated]27-O+2OOL in lvLANo.665 /2OZl [n ][SM(VI)C ][No.3 ][/2020'In]Re Cogriiann for extenion [of ][bnitation' ][rnaking ][it ][clear ][that in]such cases where rhe [limitation ][period ][(inctuding ][that]prescribed for institution [as ][well ][as ][termination) ][shall ][stand]excluded from 14d of [lvlarch, 2021 ][ill ][further ][orrden ][in]above terms. 10. Thus according to [the Tribunal ][appellant ][had ][already]executed a registered [sale ][deed ][which ][is ][treated ][as ][valid transfer]under Section [2(47)N) ][of ][the ][Act. ][The ][other ][documents ][relied]upon by the [appellant ][tere ][only ][pleadings ][before ][cMl ][and]criminal courts, [which ][proceedings ][were ])'et [to ][attain ][finaliry']Tribunal [upheld ][the ][addition ][of ][long term ][capital]AccoriCingly, gains made by the [assessing ][officer ][as ][confirmed ][by ][the ][CIT(A)']After holding so, [Tribunal ][noted ][that the ][appeal ][was ][decided]after a period of [90 ]dap [from ][the ][dxe of ][hearing; ][the ][same ][was]because of the covid [lock ][down ][situation ][and ][referred ][to ][the]orders passed bythe Supreme [Coun ][extending ][limitation.] \ 11. On thorough consideration of all aspects of the maner, weare of the view that no substandal question of law arises out ofthe orrder of the Tribunal datedO2.09.2O21. Findings retumed bythe Tribunal are clear findinp of fact qzhich does not call for anyinterference. 12. App."l as well as I.ANo.i of 2022 filed for condonationof delayof 76 days in filing the appeal are accordinglydismissed.No costs. fu a sequel, miscellaneous peritions, pending if any, standdismissed- \ 11. On thorough consideration of all aspects of the maner, weare of the view that no substandal question of law arises out ofthe orrder of the Tribunal datedO2.09.2O21. Findings retumed bythe Tribunal are clear findinp of fact qzhich does not call for anyinterference. 12. App."l as well as I.ANo.i of 2022 filed for condonationof delayof 76 days in filing the appeal are accordinglydismissed.No costs. fu a sequel, miscellaneous peritions, pending if any, standdismissed- Sd/. B.S.CHIRANJEEVIJOINI-REGISTRAR//rRUE coPY/' .ec|Sftorrrcen To, 1. The lncome Tax Appellate [Tribunal, Hyderabad Bench-A' Hyderabad. ].2. The Commissionei 6f lncorne [Tax ][(Appeals) 4, ][3' ][Floor Annexe, ][Aayakar]Bhavan, Basheerbagh, HYderabad.2. The Commissionei 6f lncorne [Tax ][(Appeals) 4, ][3' ][Floor Annexe, ][Aayakar]Bhavan, Basheerbagh, HYderabad. 3. The lncome Tax Officer, Ward6(3), [Hyderabad.] 4. One CC to SRI DUNDU MANMOHAN, [Advocate ] 5. Two CD CopiesBSKt i HIGH COURT DATED:2010912022 1._tr€oORDER//k\)v?l.T.T.A.No.251 of 2022? [ [uEt ][?02?]., DISMISSING THE ITTAWITHOUT COSTS CO[@($]*g---,@V