TMI Blog2017 (11) TMI 1902X X X X Extracts X X X X X X X X Extracts X X X X ..... uy peace and subject to no penal action lacks merits. Because the Assessee sold his property by making unregistered Agreement to sell and received part payment only and somehow, the said deal could not be finalized , therefore he under the impression that he will return the earnest money to the buyer therefore has not shown the said amount in his income, although the said circumstances have been explained to the revenue authorities however did not yield any result , therefore we are of Asst. Year:2009-10 the considered view that the penalty proceedings are quasi-criminal in nature cannot be fastened only on the probabilities and from the facts as emerged that the assessee has not concealed the particulars of income, hence, we order for deletion of penalty. - Decided in favour of assessee. - I.T.A No.202(Asr)/2016 - - - Dated:- 8-11-2017 - Sh. T.S. Kapoor, Accountant Member And Sh. N.K.Choudhry, Judicial Member Appellant by: Sh. Sudarshan Kapoor (Ld. Adv.) Respondent by: Sh. Rahul Dhawan (Ld. D.R) ORDER N.K.Choudhry, The instant appeal has been preferred by the assessee, on feeling aggrieved against the order dated 30.07.2012 passed by the Ld. CIT(A), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0,000/- and the same was processed u/s 143(1) of the I.T. Act and later on, it was revealed by the Department that the assessee has cash deposit of ₹ 22,50,000/- in his Saving Bank Account maintained with the HDFC Bank, Nawanshar during the financial year 2008-09 in Account No.69, 602 25275, and on confrontation, the assessee surrendered the amount of ₹ 22,50,000/- for the Asst. Year 2009-10 in order to buy peace of mind and vide litigation and subject to no penalty and any other penalty action on the part of the Department. Further, it was Asst. Year:2009-10 also revealed that interest of ₹ 2,89,769/- also stands credited in the Saving Banks Accounts of assessee held with HDFC Bank, Nawanshar and the assessee had only declared Saving Bank interest of ₹ 22,000/- only in his return of income and on questioning the assessee admitted the mistake and after discussion, the Assessing Officer made addition of ₹ 2,69,769/- in the taxable income of the assessee and finally the Assessing Officer initiated the penalty proceedings while issuing of notice u/s 271(1) (c) of the Act for concealment of particulars of income. Subsequently, vide order dated 26.06.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not retain the documents pertaining to deal. Further, it was submitted on behalf of the assessee that the assessee although tried to contact Mr. Gurnam Singh (who was the purchaser of the property) but he was out of satiation, therefore could not be produced before the Revenue Authorities. Even otherwise, it was also submitted the documents pertaining to the land was also lying with him, however, being a law abiding citizen and do not want to enter into much litigation and keeping in view to avoid litigation, the assessee had surrendered the amount of ₹ 22,50,000/- in his income for the Asst. Year.2009-10 in order to buy peace of mind and to avoid litigation and subject to no penalty and any other penal action. Further the assessee relied upon the judgment passed by the Hon'ble Jurisdictional High Court in 121 ITR 834 (P H) wherein it was held that where there is no material before the ITO to give definite finding and he did not probe into the matter on the basis of offer made by the assessee, the assessee cannot be penalized and the offer of the assessee to add a certain amount in his total income for assessment purchase cannot be called a definite income of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the affidavits of Sh. Rajkumar (purchaser broker) , also confirmed the said deal as well as receiving of advance of ₹ 22.50 lacs and Sh. Raj kumar further deposed that the total sale consideration of the agricultural land was ₹ 80,00,000/- and that being a property broker had received an amount of ₹ 20,000/- as brokerage from Sh. Gurnam Singh. Further established that the sale agreement was computer typed from Sh. Darshan Ram S/0 Sh. Sat Pal who is a Deed Writer in the Tehsil, Nawanshahar. Further he also witnessed the sale agreement. Further by affidavit of Sh. Darshan Ram, it was established that Sh. Darshan Ram have been working as Computer Deed Writer in the Tehsil, Nawanshahar for the last many years and he had typed the sale agreement executed between Sh. Gurnam Singh and Sh. Gurdev Singh and both had signed the sale agreement at his shop situated in Tehsil, Nawanshahar, however, the sale agreement was not registered with the Sub-Registrar. As in the instant case, it was fairly submitted by the Ld. AR that although Apex Court Judgment passed in the case of MAK Data P. Ltd. vs. CIT ((2014) 1 SCC 674) is against the Assessee , however, the difference can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d its return of income. Had it been the intention of the assessee to make full and true disclosure of its income, it would have filed the return declaring an income inclusive of the amount which was surrendered later during the course of the assessment proceedings. Consequently, it is clear that the assessee had no intention to declare its true income. It is the statutory duty of the assessee to record all its transactions in the books of account, to explain the source of payments made by it and to declare its true income in the return of income filed by it from year to year.The AO, in our view, has recorded a categorical finding that he was satisfied that the assessee had concealed true particulars of income and is liable for penalty proceedings under Section 271 read with Section 274 of the Income Tax Act, 1961. From the judgment referred above, it is trite to say that surrender of income subject to buy peace of mind or to avoid litigation and no penal action is no more acceptable. However, as the Ld. AR respectfully submitted that in the aforesaid case, the Asst. Year:2009-10 Hon'ble Supreme Court dealt with the case of the company but in the instant case, the assessee is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , or acquiring shares in, a co-operative society, company or other association of Asst. Year:2009-10 persons or by way of any agreement or any arrangement or in any other manner whatsoever) which has the effect of transferring, or enabling the enjoyment of any immovable property. 45. Capital gains - (1) Any profits or gains arising from the transfer of a capital asset effected in the previous year shall, save as otherwise provided in sections 54, 54B, 54D, 54E, 54EA, 54EB, 54F, 54G and 54H, be chargeable to income-tax under the head *Capital gains , and shall be deemed to be the income of the previous year in which the transfer took place. 48. Mode of computation - The income chargeable under the head Capital gains shall be computed, by deducting from the full value of the consideration received or accruing as a result of the transfer of the capital asset the following amounts, namely: (i) expenditure incurred wholly and exclusively in connection with such transfer; ii) the cost of acquisition of the asset and the cost of any improvement thereto: 18. Section 53A, as is well known, was inserted by the Transfer of Property Amendment Act, 1929 to import into In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 49. Effect of non-registration of documents required to be registered. No document required by Section 17 or by any provision of the Transfer of Property Act, 1882 (4 of 1882), to be registered shall- (a) affect any immovable property comprised therein, or (b) confer any power to adopt, or (c) be received as evidence of any transaction affecting such property or conferring such power, unless it has been registered: Provided that an unregistered document affecting immovable property and required by this Act or the Transfer of Property Act, 1882 (4 of 1882), to be registered may be received as evidence of a contract in a suit for specific performance under Chapter II of the Specific Relief Act, 1887 (1 of 1877) or as evidence of any collateral transaction not required to be effected by registered instrument. 20. The effect of the aforesaid amendment is that, on and after the commencement of the Amendment Act of 2001, if an agreement, like the JDA in the present case, is not registered, then it shall have no effect in law for the purposes of Section 53A. In short, there is no agreement in the eyes of law which can be enforced under Section 53A o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts of this case, we need not go into any other factual question. 22. The object of Section 2(47)(vi) appears to be to bring within the tax net a de facto transfer of any immovable property. The expression enabling the enjoyment of' takes color from the earlier expression transferring , so that it is clear that any transaction which enables the enjoyment of immovable property must be enjoyment as a purported owner thereof. The idea is to bring within the tax net, transactions, where, though title may not be transferred in law, there is, in substance, a transfer of title in fact. 23. A reading of the JDA in the present case would show that the owner continues to be the owner throughout the agreement, and has at no stage purported to transfer rights akin to The maxim noscitur a sociis has been repeatedly applied by this Court. A recent application of the maxim is contained in Coastal Paper Limited v. Commissioner of Central Excise, Visakhapatnam, (2015) 10 SCC 664 at 677, para 25. This maxim is best explained as birds of a feather focking together. The maxim only means that a word is to be judged by the company it keeps qwnership to the developer. At the highest, posses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to in Section 53A of the Transfer of Property Act, 1882 (4 of 1882) can only be subjected to taxation. A reading of Section 17(1A) and Section 49 of the Registration Act shows that in the eyes of law that as unregistered Agreement, there is no contract which can be taken cognizance of, for the purpose specified in Section 53A. therefore it can be easily construed as has been stated above, there is no contract in the eye of law in force under Section 53A after 2001 unless the said contract is registered. While coming to the instant case, undisputedly the agreement to sell was not registered and it he same would have been registered then certainly the Assessee instead of filling secondary evidence, could have produced the certified copy of the agreement to sell or could have summoned the Registration authority to bring on record Asst. Year:2009-10 the said agreement. As the assessee had only received part payment and did not hand over possession of Property and unregistered agreement does not give any right in favour of the Assessee to claim the capital gain and although he was of the bonafide belief that receiving the part payment as earnest money, he has not earned any income, h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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