High Court Of Madras
Basheer Ahamed vs. CIT-II
Section 143(3)
R. Banumathi & K. Ravichandrabaabu, JJ.
Tax Case (Appeal) No. 278 of 2010
18th February, 2013
Counsel appeared:
J. Balachandran, S. Sridhar for the Appellant.: J. Narayanaswamy for the Respondent
R. BANUMATHI, J.
1. Being aggrieved by dismissal of his appeal in I.T.A.No.101 of 2009 (30.10.2009), assessee has preferred this appeal. The Tax Case (Appeal) was admitted on the following substantial question of law:
“Whether the adoption of Rs.6,48,000/-as the full sale consideration of the property relying on the confession statement of the purchasers without furnishing the appellant copy of such information gathered behind his back and without any additional materials is valid in law?”
2. The assessee was the owner of a vacant plot measuring 4800 sq. ft. in Old R.S.No.466, New R.S.No.396/1A at Letchathoppu village, Thanjavur Taluk, Thanjavur District. The assessee sold the said property under sale deed dated 21.08.2000 for a sum of Rs.2,33,760/- to A. Helan and M. Meena, who were both partners of M/s.Marble World, a partnership firm at Thanjavur.
3. There was a survey in the premises of M/s. Marble Word. During the course of survey, a copy of sale agreement executed on 09.09.1999 between Asiya Basheer, wife of the assessee and the above said two purchasers (A.Helan and M. Meena) were seized. In the said agreement, Asiya Basheer, wife of assessee had agreed to sell her husband’s vacant plot to the said purchasers for a sale consideration of Rs.6,48,000/- at the rate of Rs.135/-per sq. ft. As per the said agreement, the purchasers were paid an advance of Rs.1,50,000/-to Asiya Basheer on the date of agreement. On the other hand, the registered sale deed dated 21.08.2000 showed the consideration as Rs.2,33,760/-. Notice under Section 148 of Income Tax Act was issued to the assessee on 09.09.2004. In response to which, assessee had returned a total income of Rs.40,393/-comprising of property income, business income and income from other sources. Agricultural income of Rs.6,000/- was also disclosed. The capital gains on sale of property was not disclosed. Therefore, assessee was asked to produce Books of Account, Bank Accounts etc. In response to the same, the assessee filed a revised return showing capital gains at Rs.59,193/-. Assessee was asked to explain the difference in the sale consideration in the two documents viz., sale agreement and sale deed. The assessee submitted an application under Section 144A of the Act to the Additional Commissioner of Income Tax. The Additional Commissioner of Income Tax noted that the assessment in the case of purchaser had been completed as per the income returned by her which represented her share by purchase of property at Rs.6,48,000/-and hence, the objection of the assessee was rejected. The Assessing Officer completed the assessment under Section 143(3) on 28.03.2006 adopting the sale consideration at Rs.6,48,000/-as per the sale agreement dated 09.09.1999 and thereby adopting the long term capital gains at Rs.5,13,826/-. The Assessing Officer found that the said sale consideration was adopted as considered in the case of purchaser.
In the appeal filed by the assessee, the Commissioner of Income Tax (Appeals) confirmed the order of Assessing Officer by observing that the purchaser had admitted to have paid sale consideration of Rs.6,48,000/- for purchase of the property. In the further appeal filed by the assessee, the Tribunal highlighted three aspects and most importantly, the amount of Rs.6,48,000/- has been accepted as the purchaser’s investment in her income tax assessment. Tribunal further held that “it would be an anomaly if in the case of purchaser the sale consideration of Rs.6,48,000/- is accepted and it is not accepted in the case of the seller”.
Mr. J. Balachandran, learned counsel for assessee contended that the alleged sale agreement dated 09.09.1999 was signed by Asiya Basheer only on the part of vendors and by both purchasers and at that time, the assessee was not in India and there was no power/authorisation given by the assessee to anyone to deal with the property. Learned counsel further submitted that the agreement to sell the property by a person without proper registered Power of Attorney from the real owner does not have any legal existence in the eye of law and while so, the Additional Commissioner of Income Tax erred in believing that the assessee’s wife obtained necessary instructions from her husband for executing the sale agreement. It was also contended that Asiya Basheer is not the owner of the property and the Authorities did not consider as to why she could execute the agreement and she has no right and further the sale deed dated 21.08.2000 was executed by one party only i.e. Basheer Ahmed and hence the sale deed dated 21.08.2000 cannot said to have been effected consequent to an earlier sale agreement dated 09.09.1999 as claimed by the revenue.
Mr. J. Narayanasamy, learned counsel for revenue supported the orders of the lower Authorities and submitted that when the agreement dated 09.09.1999 showed the sale consideration of Rs.6,48,000/- and when the returns filed by the purchaser showing an amount of Rs.6,48,000/has been accepted as purchaser’s investment, the Authorities rightly calculated the capital gains taking the sale consideration at Rs.6,48,000/-and the order of Tribunal does not suffer from any legal infirmity.
Even though strenuous contentions were advanced disputing the agreement dated 09.09.1999, the assessee cannot dispute the signature of his wife Asiya Basheer in the agreement. In the said agreement, Asiya Basheer signed for herself and on behalf of her husband. The assessee has honoured the agreement entered into by his wife. The sale deed dated 21.08.2000 also refers to the receipt of consideration prior to the sale deed. When the assessee was asked to produce Books of Accounts and Bank Accounts etc., the assessee himself filed the revised return showing the capital gains at Rs.59,193/- and when the assessee himself had shown the capital gains, the factum of sale of the property has to be accepted.
In the agreement of sale dated 09.09.1999 executed by Asiya Basheer, wife of assessee, the sale consideration was stated as Rs.6,48,000/-; whereas the sale deed was executed on 21.08.2000 stating the sale consideration as Rs.2,33,760/-. In her return, the purchaser of the property shown that an amount of Rs.6,48,000/- was invested for purchase of the property in Nilgiri Therkku Thottam. Amount of Rs.6,48,000/- has been accepted as the purchaser’s investment in her income tax assessment. Purchaser had shown investment at Rs.6,48,000/- as the sale consideration for acquisition of property at Nilgiri Therkku Thottam. As pointed out by the Tribunal, it would be an anomaly if in the case of purchaser the sale consideration of Rs.6,48,000/is accepted and it is not accepted in the case of the seller. Referring to the recitals in the agreement of sale and that it was executed by Asiya Basheer, wife of assessee which is substantiated by the income tax returns filed by the purchaser, the Assessing Officer rightly held that sale consideration was Rs.6,48,000/- which was confirmed by the Commissioner of Income Tax (Appeals) and the Tribunal. We do not find any legal infirmity warranting interference with the order of the Tribunal. The substantial question of law raised in this appeal is answered in favour of the revenue and Tax Case (Appeal) is dismissed. No costs.
[Citation : 352 ITR 157 ]
