TMI Blog2022 (2) TMI 931X X X X Extracts X X X X X X X X Extracts X X X X ..... g Adequate consideration/rent, however, market rent or rate is not the sole yardstick; other circumstances of the case also need to be considered. Commissioner stressed that the adequacy of the price has to be judged only in the light of the market value of the property transferred and according to him, there is no other yardstick which could be applied to a situation like this. We are unable to agree. We may explain why we disagree with him by taking an example. Supposing an old lady who owns a neighbouring property, wants to part with it to a medical practitioner, so that the medical practitioner would be of immediate assistance to her as and when she needs it and she parts with the property at what the parties conceive to be a reasonable price, could it be said that there was a gift of the property to the extent of the difference between what is later taken to be the market value and what was conceived to be the reasonable price for the property. It has also to be remembered that the computation of market value is in most cases a matter of estimate, which may also vary. Such a variable concept would not have been made the yardstick. The investigation to be made in the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PL. 32406/2021, ITA 115/2021 and ITA 15/2022 - - - Dated:- 16-2-2022 - HON'BLE MR. JUSTICE MANMOHAN AND HON'BLE MR. JUSTICE NAVIN CHAWLA Appellant Through: Mr. Abhishek Maratha, Sr. Standing Counsel. Respondent Through: Mr.Salil Aggarwal, Sr. Adv. with Mr. Madhur Aggarwal, Adv. NAVIN CHAWLA, J. 1. This batch of appeals is directed against the common order dated 01.11.2019 passed by the learned Income Tax Appellate Tribunal, Delhi Bench C , New Delhi (hereinafter referred to as the learned ITAT ) in ITA No. 1640/Del/2019 (AY 2007-08); ITA No. 4789/Del/2012 (AY 2008-09); ITA No. 5411/Del/2012 (AY 2009-10); and ITA No. 3403/Del/14 (AY 2010-11), inter alia holding therein that there was no justification for the addition made by the Assessing Officer by invoking the provisions of Section 13(2)(b) read with Section 13(3) of the Income Tax Act, 1961 (hereinafter referred to as the Act ) and consequently, directing deletion thereof. 2. In the present batch of appeals, the appellant/revenue has proposed the following questions of law for consideration of this Court: (1) Whether Hon ble Income Tax Appellate Tribunal was correct in the eyes of law, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent/assessee for the Assessment Year 2009-10 against which the respondent/assessee preferred an appeal before the learned ITAT, being ITA No. 5411/Del/2012. The learned CIT(A), however, accepted the appeals of the respondent/assessee for the Assessment Year 2008-09 and 2010-11. The appellant/revenue challenged these Orders in appeal(s), before the learned ITAT in the form of ITA No. 4789/Del/2012 and ITA No. 3403/Del/2014 respectively. 6. As noted hereinabove, the learned ITAT, by its common Order dated 01.11.2019, allowed the appeal(s) in favour of the respondent/assessee, holding that the Assessing Officer, in the facts of the case, could not have invoked Section 13(2)(b) read with Section 13(3) of the Act and directed deletion of the additions made by the Assessing Officer relying upon the said provisions. 7. The learned counsel for the appellant/revenue submits that the learned ITAT has erred in placing reliance on the Order of the learned CIT(A) for the Assessment Year 2008-09 while deciding the appeal of the respondent/assessee for the Assessment Year 2007-08. He submits that the learned ITAT has acted in total disregard of the law that each assessment year is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property. 10. The learned counsel for the appellant/revenue submits that the learned ITAT has also erred in holding that the rent received by the respondent/assessee from Hamdard Dawakhana (Wakf) is more than the standard rent under the Delhi Rent Control Act, 1958. He submits that the learned ITAT has not disclosed the source and the basis/calculation for reaching the figure of standard rent. The learned counsel for the appellant/revenue further submits that the learned ITAT, instead of setting aside the additions made by the Assessing Officer, should have remanded the matter to the Assessing Officer to decide the issue afresh by granting an opportunity to the respondent/assessee to confront the evidence on record. In this regard, he places reliance on the Order of the Supreme Court in Income Tax Officer v. M. Pirai Choodi, (2010) 15 SCC 283. 11. On the other hand, the learned senior counsel for the respondent/assessee submits that the learned ITAT has noted that as per the Lease Agreement between the assessee and the Hamdard Laboratories (India), the property at Asaf Ali Road had been let out to Hamdard Laboratories (India) right since 1981-82 with a periodical increase ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 317 ii. Commissioner of Income Tax v. Nova Promoters Finlease (P) Ltd., 2012 SCC OnLine Del 969:(2012) 342 ITR 169 (Del); and iii. Commissioner of Income Tax v. Gangeshwari Metal Pvt. Ltd., 2013 SCC OnLine Del 270. 16. Lastly, the learned senior counsel for the respondent submits that the revenue has been accepting the Lease Agreement for the Asaf Ali Road property right since 1981 and has not invoked the provisions of Section 13(2)(b) read with Section 13(3) of the Act. The revenue cannot be allowed to flip-flop on the issue and it ought to let the matter rest rather than spend the taxpayers money pursuing the litigation for the sake of it and should abide by the principle of consistency. In support, he places reliance on the following judgments: i. Commissioner of Income Tax v. Excel Industries Ltd., (2014) 13 SCC 459; ii. M/s Radhasoami Satsang, Saomi Bagh, Agra v. Commissioner of Income Tax, (1992) 1 SCC 659; and iii. Berger Paints India Ltd. v. Commissioner of Income Tax, Calcutta, (2004) 12 SCC 42. 17. We have considered the submissions made by the learned counsels for the parties. 18. As noted hereinabove, the questions of la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en in favour of the assessee on the questions raised, starting with Assessment Year 1992-1993, that the benefits under the advance licences or under the duty entitlement passbook do not represent the real income of the assessee. Consequently, there is no reason for us to take a different view unless there are very convincing reasons, none of which have been pointed out by the learned counsel for the Revenue. 25. In Radhasoami Satsang v. CIT this Court did not think it appropriate to allow the reconsideration of an issue for a subsequent assessment year if the same fundamental aspect permeates in different assessment years. In arriving at this conclusion, this Court referred to an interesting passage from Hoystead v. Taxation Commr.2 , wherein it was said: ( Radhasoami Satsang case , SCC pp. 665-66, para 14) 14. Parties are not permitted to begin fresh litigations because of new views they may entertain of the law of the case, or new versions which they present as to what should be a proper apprehension by the court of the legal result either of the construction of the documents or the weight of certain circumstances. If this were permitted, litigation would ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mining Adequate consideration/rent, however, market rent or rate is not the sole yardstick; other circumstances of the case also need to be considered. 20.2.1. In Reva Investment Pvt. Ltd. v. Commissioner of Gift Tax, Gujarat II, (2001) 9 SCC 111, while considering Section 4(1) of the Gift Tax Act, 1958, the Supreme Court held that it is necessary for the Assessing Officer to show that the property has been transferred otherwise than for adequate consideration. The finding as to the inadequacy of the consideration is an essential sine qua non for application of the provisions of deemed gift . The provision is to be construed in a broad commercial sense and not in a narrow sense. In order to hold that a particular transfer is not for adequate consideration, the difference between the true value of the property transferred and the consideration that passed for the same must be appreciated in the context of the facts of the particular case. 20.2.2. In Commissioner of Gift Tax, Tamil Nadu I v. Indo Traders Agencies (Madras) P. Ltd., (1981) 131 ITR 313 (Madras), again while considering the provision of Section 4(1)(a) of the Gift Tax Act, 1958, the High Court of Madr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be said that the purchase money was so grossly inadequate that its inadequacy amounts to proof of an imposition upon the plaintiff . In Coles v. Trecothick [1804] 9 Ves. J 234 , Lord Chancellor Elden held with regard to the facts of the case before him that inadequacy of price was out of the question and made the following observation at p. 246: Inadequacy of price does not depend upon a person giving pretium affection is, from any peculiar motive, beyond what any other man would give, the reasonable price. But, further, unless the inadequacy of price is such as shocks the conscience, and amounts in itself to conclusive and decisive evidence of fraud in the transaction, it is not itself a sufficient ground for refusing a specific performance . The considerations which weighed with the courts in examining the adequacy of the consideration in respect of the sale by a minor or in respect of a relief for specific performance would also apply in the examination of a transaction under s. 4(1)(a). Unless the price was such as to shock the conscience of the court that it cannot be the reasonable consideration at all, it would not be possible to hold that the transaction is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equate consideration has to be construed in a broad sense, and merely because there may be some difference between the consideration for a transfer, and the true value of the property transferred, the same would not attract the applicability of section 4(a) of the Act. In order that the court may hold that a particular transfer is not for adequate consideration, the difference between the true value of the property transferred, and the consideration that passed for the same, must be appreciable in the context of the facts and figures of the particular case. It may be that in a given case a few hundred rupees would lead to the conclusion of inadequacy of consideration, whereas, in another case, a few lakhs of rupees may not lead to such conclusion. The expression adequate consideration cannot be construed with precision but, as already stated above, it must be construed in relation to the facts and figures of each particular case . If the Legislature had contemplated as a universal rule that the market value should alone be the criterion for testing the adequacy of consideration, the provision would have been differently worded. The wording would then have been, where the prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted by the learned Assessing Officer from the Internet as well as the estate agents cannot be termed as the collaborative piece of evidence to any facts which is established substantively first; that the actual rent received by the assessee from HLI far exceeds the valuation adopted by the MCD for the purpose of levying house tax as could be seen from the information furnished by the assessee and also that unless and until the learned Assessing Officer brings on record some credible information, the burden to rebut does not shift to the assessee. 16. We are, therefore, convinced with the reasoning given by the Ld. CIT(A) in his order for the Assessment Year 2008-09 wherein while dealing with this issue in detail, the Ld. CIT(A) reached a conclusion that on the date of the observations of the learned Assessing Officer that there is no mechanism with the Department to determine valuation of rents imperative the adjudicatory authorities to look further corroborative evidence in the absence of which it is not desirable to disturb the consistent view taken over a period of more than two decades. We are in agreement with the Ld. CIT(A) that not only on the basis of the rule of co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l. Adopting any other approach is not permissible . It has also been held that there is a difference between a question of law and a substantial question of law . Recently, while considering a similar provision in the Electricity Act, 2003, the Supreme Court in Maharashtra State Electricity Distribution Company Limited v. Maharashtra Electricity Regulatory Commission Ors., 2021 SCC OnLine SC 913, observed that the word substantial question of law means not only a substantial question of law of general importance, but also any substantial question of law arising in a case between the parties on which the decision in the lis depends. A question of law that arises accidentally or collaterally and has no bearing on the final outcome, will not be a substantial question of law. Whether the question raised is a question of law and, if so, whether the question is a substantial question of law is also not determined by the enormity of the stakes involved in the same. To be substantial , a question of law must be debatable, not previously settled by the law of the land or any binding precedent, and must have a material bearing on the decision of the case and/or rights of the partie ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
