IN INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. T. S. KAPOOR, ACCOUNTANT MEMBER AND SH. N.K. CHOUDHRY, JUDICIAL MEMBER ITA No.573(Asr)/2015 Assessment year:2008-09 PAN : BOGPK2903D Asstt. Commr. of Income Tax, vs. Smt. Ranjit Kaur Hoshiarpur Circle, C/o Basra Nursing Home, Hoshiarpur. Miani Road, Dasuya. (Appellant) (Respondent) Appellant by: Sh. Rahul Dhawan, DR Respondent by: None Date of hearing: 27/09/2016 Date of pronouncement: 14/10/2016 ORDER PER T.S. KAPOOR, AM: This is appeal filed by Revenue against order dated 27.08.2015 passed by ld. CIT(A)-1, Jalandhar, relating to assessment year 2008-09. Revenue has raised following grounds of appeal: 1. That ld. CIT(A) has erred on facts and in law in deleting addition of Rs.1,55,37,787/- made by AO on account of Long Term Capital Gains. 2. ld. CIT(A) has erred both on facts and law in following judgment of Hon ble Punjab & Haryana High Court in case of C.S. Atwal & Others vs. CIT, Ludhiana while deleting addition of Rs.1,55,37,787/- in case of assessee. 3. ld. CIT(A) has erred both on facts and law in not adjudicating crucial issue of applicability of section 2(47)(ii) and (vi) of Act while deleting addition of 2 Rs.1,55,37,787/- in case of assessee and has failed to appreciate that these two provisions are de hors provisions under section 2(47)(v) read with section 53A of Transfer of Property Act and section 17(IA) of Registration Act. 4. It is prayed that order of ld. CIT(A) be set aside and that of A.O. restored. 2. None appeared on behalf of assessee. However, going through material on record, we found that matter can be disposed off even in absence of assessee or her counsel. 3. Briefly stated, facts of case are that assessee filed her return declaring income of Rs.26,71,000/- on 31.03.2010. Later on, AO received information from CCIT, Ludhiana and on basis of same, case was reopened and after considering reply of assessee, AO worked out capital gain on sale of land at Rs.1,81,25,000/- and after allowing already declared capital gain of Rs.25,87,213/- made addition of Rs.1,56,21,580/-. 4. Aggrieved with order of AO, assessee went in appeal before ld. CIT(A), who allowed appeal of assessee observing as follows: 7. I have carefully considered issue, assessment order and decision of Hon ble H.C. (Supra). There is no dispute that facts and circumstances of all cases are similar except minor variations in figures etc. relevant part of decision is reproduced, as under. We summarize our conclusions as under: - "Perusal of JDA dated 25.02.2007 read with sale deeds dated 2.3.007 and 25.4.200 7 in respect of 3.08 acres and which does not materialize. Where income has, in fact, been received and is subsequently given up in such circumstances that it remains income of recipient, even though given up. tax may be 3 payable. Where, however, income can be said not to have resulted at all, there is obviously neither accrual nor receipt of income, even though entry to that, effect might, incineration circumstances, have been made in books of account. This pronouncement was applied by Supreme Court in Godhra Electricity Co. Limited vs. CIT, (1997) 225 ITR 746 (SC) and followed by Calcutta High Court in CIT vs. Balarampur Commercial Enterprises limited, (2003) 262 ITR 439 (Cal.). Relying upon decision in Messrs Shoorji Vallcibhdas & Co. s case (supra), Supreme Court in CIT vs. Excel Industries Limited (2013) 338 ITR 295 (SC) held that income tax cannot be levied on hypothetical income. Income accrues when it becomes due but it must also be accompanied by corresponding liability of other party to pay amount. Only then can it be said that for purposes of taxability, income is not hypothetical and it has really accrued to assessee. It was observed as under: First of all, It is now well settled that income tax cannot be levied on hypothetical income. In Commissioner of Income Tax vs.. S hoorji Valaibhdas and Co., [1962] S 46 ITR 144 (SC) it was held as follows: Income-tax is levy on income. No doubt, Income-tax Act takes into account two points of time at which liability to tax is attracted, viz., accrual of income or its receipt; but substance of matter is income. If income ? does not result at all there cannot be with law. In view of aforesaid stand, . , while disposing of appeals, we observee that assessee appellants shall remain bound by their said stand. issue of exigibility to capital gains lax having been decided in favour of assessee, question of exemption under Section 54F of Act would not survive any longer and has been rendered academic. Tribunal and authorities below were not right in holding assessee- appellant to be liable to capital gains tax in respect of remaining land measuring 13.5 acres for which no consideration had been received and which stood cancelled and incapable of performance at present due to various orders passed by Supreme Court and High Court in PILs. Therefore, appeals are allowed. Consequently, substantial questions of law as reproduced in beginning of judgment are answered in manner indicated hereinbefore and appeals of assessee are disposed of accordingly. 8. Since facts and circumstances are similar and legal issue is common, respectfully following decision of H.C. of Punjab and Haryana (Supra). A.O. is directed to restrict computation of capital gain to amounts received by assessee only subject to law. Balance addition of Rs. 1,49,25,000/- stands deleted. 4 5. Now, Department is in appeal before us. 6. ld. DR relied on order of Assessing Officer. 7. Having heard Ld. DR in light of material available on record, we are of view that issue in dispute is squarely covered in favour of assessee and against Revenue by decision of Hon ble High Court of Punjab & Haryana in case of Charanjit Singh Atwal vs. CIT , vide order, dated 22.07.2015, passed in ITA No.200 of 2013 (O&N), reported as 279 CTR 330 (P&H), wherein, it has been held that since no possession had been given by transferor to transferee of entire land in part performance of JDA dated 25.02.2007 so as to fall within domain of section 53A of Transfer Act and consequently, section 2(47)(v) of I.T. Act, did not apply, that further, willingness to perform their part of contract was absent on part of developers, as it could not be performed by them, which was one of conditions precedent for applying section 53A of transfer Act. Further, in clause 26 of JDA dated 25.02.2007, principle of force majeure had been provided for, which would be applicable with full vigour in circumstances. From cumulative effect of covenants contained in JDA read with registered special power of attorney dated 26.02.2007, it could not be held that mandatory requirements of section 53A of Transfer Act were complied with, which stood incorporated in section 2(47)(v) of Act and once that was so, it could not be said that assessees were 5 liable to capital gain tax in respect of remaining land which was not transferred by them to developer/builder because of supervising event and not on account of any volition on their part; and that viewed from another angle, it could not be said that any income chargeable to capital gains tax in respect of remaining land had accrued or arisen to assessee in facts of case. 8. ld. CIT(A) has also followed aforesaid decision of Hon ble Punjab & Haryana High Court, while allowing appeal of assessee. 9. Therefore, respectfully following decision of Hon ble High Court of Punjab & Haryana in case of Charanjit Singh Atwal vs. CIT (supra), as facts of present case are exactly similar as those decided by Hon ble High Court, appeal of Revenue is dismissed 10. In result, appeal filed by Revenue is dismissed. Order pronounced in open court on 14/10/2016. Sd/- Sd/- (N.K. CHOUDHRY) (T.S. KAPOOR) ACCOUNTANT MEMBER JUDICIAL MEMBER /SKR/ Dated: 14/10/2016 Copy of order forwarded to: 1. Assessee:Smt. Ranjit Kaur, Dasuya 2. ITO, Dasuya. 3. CIT(A), Jalandhar 4. CIT. Jalandhar 5. SR DR, ITAT, Amritsar. True copy By order 6 Income Tax Appellate Tribunal, Amritsar Bench: Amritsar. Asstt. Commissioner of Income-tax, Hoshiarpur Circle, Hoshiarpur v. Ranjit Kaur