2017 (10) TMI 1390

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....e assessee has not filed return of income for the assessment year 2008-09. Notice U/s 148 of the Income Tax Act, 1961 (in short the Act) issued on 23/03/2015. Regarding the facts and observation, the Assessing Officer has observed as under: 2. As per information available in this office, it was gathered that the assessee sold an immovable property situated at Plot No 106, Tarn Chhaya Nagar, Scheme on 07.05.2007 for consideration of Rs. 11,70,000/-. The value of the property was adopted at Rs. 53,11,367/- by the sub Registrar IV, Jaipur. During the assessment proceedings documents of purchase/agreement and sale were submitted by the assessee. On perusal of the purchase deed it was seen that the property under consideration was purchased by the assessee through an agreement on 20.03.2003 for a consideration of Rs. 9,50,000/- from one Shri Harbhan Singh and thus he became the owner of the property. In the agreement it was clearly mentioned at page No 2 that the purchaser has become the owner and possession has been taken over by him. Further, the property under consideration was sold to Shri Bhupendra Kumar Dak for sale consideration of Rs.l 1,70,000/- on 07.05.2007 ....

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....ty in shape of plot and plea of the assessee that rights were sold out is not acceptable. A show cause vide order sheet dated 11.01.2016 was given to the assessee as why not sales consideration be taken at Rs. 53,11,637/- adopted by the stamp registration authorities within the meaning and purview of section 50C of the IT Act. The assessee has not submitted any reply/written submission Therefore it is assumed that he has nothing to say in this regard. 4. The assessee has not filed any return of income for A.Y 2008-09 in response to notice u/s 148 and also no return of income was filed earlier u/s 139(1) of the IT Act. During the assessment proceedings the assessee has only filed a unsigned computation of total income for A.Y 2008-09 along with his letter dated 05.10.2015. Capital gain loss of Rs. 1,22,303/- was shown in the said computation. However no return of income was filed by the assessee in response to notice issued u/s 148. Therefore in such circumstances and facts a show cause u/s 144(1) of the IT Act) 1961 was issued on 28.01.2016. In the show cause it was proposed to consider sale consideration at Rs. 53,11,367/- i.e. the value as adopted by stamp authorities fo....

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....of the appellant. It is noted that the assessee had made a sale of immovable property at Rs. 11,70,000/- sale consideration, and no return of income had been filed on the relevant year. In response to notice under section 148, return was filed returning a capital loss on the transaction at Rs. 1,22,303/-. As per information with the Assessing Officer, the value of the property was adopted at Rs. 53,11,367/- by the Sub- Registrar IV, Jaipur. The Assessing Officer noted that the said property had been purchased for a consideration of Rs. 9,50,000/- from one Shri Harbhajan Singh through an agreement on 20.03.2003 and sold to Shri Bhupendra Kumar Dak for a consideration of Rs. 11,70,000/- on 07.05.2007 and the sale deed was registered with sub-registrar-IV, Jaipur. Further facts of the case are that the property was initially allotted to Shri Harbhjan Singh by M/s Subhash Sindhi Cooperative Society and a dispute was going on between RIICO and the society as the land had been acquired by the government and handed over to RIICO and yet the Subhash Sindhi Cooperative Society had purchased the same from the Khatedars being aware of the fact of its acquisition by the Government. During asse....

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.... case dated 12.02.2013. Considering the above factual matrix that all the parties involved right from M/s Subhash Sindhi Society, in reference to which the order of Apex Court has been rendered and the subsequent sellers and purchasers are aware of the illegality of the transaction as the land had already been acquired by the Government and handed over to RIICO as per the order. The Authorized Representative is also relying on the fact that since the Apex Court has held the transaction as void, the sale and its subsequent events are also void and application of section 50C of the I.T. Act. 1961 is correct. The observation of the Hon'ble Court regarding the behavior of the society included that society members had entered into an agreement to sell even though, a notification under section 4 to carry out acquisition had been issued by the government, fully knowing the legal implications that may arise and the bonafides of the society had been questioned. However, the relevant and important point is that at the time of the sale transaction, the Hon'ble Rajasthan High Courts order was in force in this case, in which it had been ruled as follows (para 27 of the Apex Courts....

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....d through documents that to start with, DGDC had demanded only 35 acres of land. This demand was raised from time to time and ultimately, it reached upto 105 acres. It is also on record that the RIICO had given only 80 acres of land to DGDC as against the allotment of 105 acres. In such a situation, if a small piece of land measuring 17 Bighas 9 Biswas out of the land allotted to DGDC is restored back to the petitioner Society it cannot have any adverse impact on the business prospects of DGDC nor the RIICO may 29 Page 30 have any just objection and the State Government which has already acquiesced with the release of such acquired lands in large number of cases, cannot have any legitimate case to contest the grant of relief to the petitioner society and the petitioner Society is found to be entitled for the same on the principles of parity as well as equity." Due to the same, the ownership of the land was legal at the time of registration of sale deed and vested with the seller. Further, the noting in the registered sale deed regarding the land and its ownership are reproduced below: In view of the discussion as above, it is clear that on the date of transaction,....

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....here- (a) the assessee claims before any Assessing Officer that the value adopted or assessed or assessable by the stamp valuation authority under sub-section (1) exceeds the fair market value of the property as on the date of transfer; (b) the value so adopted or assessed or assessable by the stamp valuation authority under sub-section (1) has not been disputed in any appeal or revision or no reference has been made before any other authority, court or the High Court, the Assessing Officer may refer the valuation of the capital asset to a Valuation Officer and where any such reference is made, the provisions of sub-sections (2), (3), (4), (5) and (6) of section 16A, clause (i) of sub-section (1) and subsections (6) and (7) of section 23A, sub-section (5) of section 24, section 34AA, section 35 and section 37 of the Wealth-tax Act, 1957 (27 of 1957), shall, with necessary modifications, apply in relation to such reference as they apply in relation to a reference made by the Assessing Officer under subsection (1) of section 16A of that Act. Explanation 1.-For the purposes of this section, "Valuation Officer" shall have the same meaning as in clause (r) of ....

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2017 (10) TMI 1390