IN INCOME TAX APPELLATE TRIBUNAL B , BENCH KOLKATA BEFORE SHRI M. BALAGANESH, AM & SHRI S.S.VISWANETHRA RAVI, JM IT(SS)A No.59/Kol/2013 ( Assessment Year :2009-2010) Smt. Shakuntala Kanoi, Vs. ITO Ward-29(4), Kolkata, 23, Raja Santosh Road, Kolkata-700068 Alipore, Kolkata-700027 PAN/GIR No. : AGDPK 2663 G (Appellant) .. (Respondent) Assessee by : Shri S.Jhajharia, FCA Revenue by : Shri G.Mallikarjuna CIT DR Date of Hearing : 03/10/2016 Date of Pronouncement 19/10/2016 O R D E R PER M.BALAGANESH, AM This appeal of assessee arises out of order of Learned CIT(A)-XVI, Kolkata, in Appeal No.84/CIT(A)-XVI/Wd-29(4)/11-12/Kol, dated 27.02.2013 passed against assessment framed u/s. 143(3)/ 153C of Income Tax Act, 1961 (hereinafter referred to as Act ). 2. first issue to be decided in this appeal is as to whether ld CITA is justified in upholding addition made towards long term capital gain u/s 153C of Act in facts and circumstances of case. 2.1. brief facts of this issue is that assessee filed her return of income for Asst Year 2010-11 u/s 139(1) of Act declaring taxable income of Rs. 3,38,161/-. search and seizure operation u/s 132 of Act was carried out on Karan Group of Cases, Dhanbad at residential and office premises on 17.10.2008. ld AO observed that in letter of ACIT, Central Circle, Dhanbad, that during course of search and seizure of Karan Group of Cases, some incriminating documents were found and seized from residential and business premises which are related to assessee. During course of search and seizure, documents 2 IT(SS)A No.59/13 marked as PK-34 was seized. incriminating documents of PK-34 reflects payments made by persons of Karan Group of cases for purchase of build up area of premises to assessee both in cheque as well as in cash on different dates. Consequent to this information, notice u/s 153C of Act was issued on 28.3.2011 on assessee calling for return of income. assessee filed her return of income on 20.4.2011 in response to notice u/s 153C of Act declaring income of Rs. 3,38,160/- which was same as income declared by her in regular return u/s 139(1) of Act. 2.2. ld AO observed that assessee during relevant previous year had income from salary, capital gains and income from other sources. bank statements and other documents called for were produced by assessee. ld AO observed that assessee was owner of landed property measuring about 8 kathas 11 chhatak at Plot No. 2972 & 2973 under ward no. 2 , Holding No. 96 of Dhanbad Municipality, Jharia Mauza at Hirapur , and had entered into Development Agreement on 18.5.2003 with developer named M/s Shrishti Builders Pvt Ltd, Dhanbad for construction of residential / commercial premises on said land. building was constructed on said land by virtue of agreement which was popularly known as Yashoban Plaza . building was constructed by developer at its own cost. assessee was allotted 52 % of built up area of premises measuring about 9750 sq.ft as consideration in lieu of land. After completion of construction of said premises, said developer as well as assessee sold considerable portion of respective share of constructed premises to M/s Park Clinic, flagship concern of Karan Group(comprising of M/s Park Clinic, S K Saran HUF). assessee sold 4824 sq.ft of built up area to M/s Park Clinic & S K Karan (HUF) and 200 sq.ft to Sita Projects, 200 sq.ft to O.P.Agarwal and 140 sq.ft to Murali Prasad. 3 IT(SS)A No.59/13 2.3. ld AO explained in his order page wise detail analysis of incriminating documents marked as PK-34 vide page no. 27, its back side, page 27A , its back side, page 27B , its back side , page 28, its back side, page 29 , page 30 and its back side which were seized from bedroom of Dr S.K.Karan of Karan Group. Page-27: This is hand written sheet containing account of payments for purchase of shops at Yashovan Plaza- Dr. S.K.Karan, key person of Karan Group of cases stated under oath that--- "This is detail of accounts disclosed as well as undisclosed with Smt. Shakuntala Devi Kanoi for purchase of shop no. 2&4 and approximate area of 5000 sq. feet on third floor. amount indicated against "Books" are disclosed one and tinder "Cash" are unaccounted. Under heading "quick List" month wise payment of account of pan i.e, amount paid by cheque totaling Rs.24,16,011/- has been written and under head "cash "totaling Rs.15,48,639/- has been written. Second half of page is duplication of aforesaid payment. All these entries are prepared by representative of Shakuntala Kanoi which has been duly acknowledged by me and my signature along with date is appearing under 3rd item. page 27A is back side of visiting card which is receipt of unaccounted amount paid by me from Anshuman Agarwal representative of Shakuntala Kanoi back page of Page 27 gives details of payment for shop no.2 which reflects cash payment for Rs. 6,00,000/- Page No.27A & 27B of seized documents PK-34: As per statement of Dr. Karan under oath, these are visiting card of Sri Anshuman Agarwal, Executive Director of Data Alloys Pvt. Ltd. Back of card marked as 27 shows payment of Rs.5,48,640/- on 29/09/2006 by Dr. S.K.Karan. Back of card marked as 27B shows payment of Rs.5,00,000/- on 22/07/2006 by Dr.S.K.Karan. These payments have been made to Anshuman Agarwal out of undisclosed income of Dr. Karan. Page No.28 and its back of seized documents PK-34: It is again hand written account of purchases of shop at Yashovan Plaza. Dr. S.K.Karan, under oath, explained this page as under:- " This is detail account of purchase of various floors in Yashovan Plaza. This gives detail of floor area, rate, accounted payment i.e. by cheque and unaccounted payment i.e.in cash. payments I have made partly to Mrs. Shakuntala Kanoi and Srishti Builders. Under item, cash reference has been made to name" Giriji". Giriji was person running school in old building and Rs.12.50,440/- was paid to him for vacating this space. This payment was part of agreement between builder and Giriji and cash payment was paid by me to builder for Giriji for vacating space. Similar things are applicable for entry for shop LG-3 & 4 4 IT(SS)A No.59/13 Rs. 2, 50, 000/- for each shop by cheque and 7 & 8 lakh respectively in cash. second half of 'he page gives details of payments made by cheque under head "books" and in" cash" to Kanoiji and Srishti Builders. As per this page total payment made by cheque was Rs.99,81,439/- and in cash was Rs. 77,61,896/-" Page No.29 of seized document PK-34 is written as under :- SK S A/c Area Book s Cash rd 3 Floor 4483 @617 27,66,011 @433 19,41,139--- # Shop 2,50,000 7,00,000--- @ 30,16,011(a) 26,41,139 (c) PAID 4,25,000 (b) 9,55,000 CASH 1,10,000 MISC Exp 16,000 Co.Mobile phone 11,500 Mutation 10,92,500 (d) HENCE : Due A/C From DR.K. Book s = (a) (b) = 25,91,011 CASH = (c) (d)= 15,48,639 Page No. 29 & 30 are again hand written account of purchases of shop at Yashovan Plaza. Dr. S.K.Karan under oath, explained this page as under: "Page 29 is again handwriting of Srishti Builders and it gives summarrized of Page 27 with different that builder had claimed slighter higher area on 3rd floor which was disputed by me" Page 30 is duplicate copy of' page: 28 except second half of back page which is details of payment written in my handwriting, These payments are part of payments explained in page 28" "Page 30 is duplicate copy of page 28. However, it also mention various payments in respect of purchase of spaces at Yashovan Plaza along with dates. " Dr. S.K.Karan in statement under oath recorded during course of search and seizure operation on 18/10/2008 narrated above facts and mentioned that payment made in cash which is not reflected in books of accounts and offered amount to tax under head investment not fully disclosed in books. (Copy of relevant portion of statement under oath of Dr. S.K.Karan and copies of Page No.27 and its back side,27A and its back side, 27B and its back side,Pg.28 and its back side,Pg.29,Pg.30 and its back side under seized documents 5 IT(SS)A No.59/13 marked as PK-34 were given to tile assessee during tile assessment proceeding for explanation) Considering above facts and circumstances, capital gain on transfer of above mentioned property is calculated as under- Total value of sales of 5364 sq. feet sold out of 9750 Cheque = Rs.39,78,011/- Cash = Rs.32,41,139/- (Karan Group) Total Rs.72,19,150/- Add: Rs.3,36,000/- (Others) Rs.75,55,150/- (Rs. 3,36,000/- is difference of sale consideration and stamp authority valuation in case of Sita Projects,O.P.Agarwal and Murali Prasad with reference to section 50C) Cost of acquisition of 5364 sq. feet area Value of building as on 9/911987 = Rs.12,57,500/- Proportionate value of acquisition for sold area == Rs.6,91,818/- Indexed cost of acquisition for sold area = Rs.29,14,860/- Long Term Capital Gains(H.P)=Rs.75,55.150 - Rs.29,14,860 = Rs.46,40,290/- Where as in return for A. Y.20 1 0-11, assessee disclosed long term capital loss for Rs.2,37,924/- from house property by taking full value of consideration for Rs.39,78,011/- and indexed cost of acquisition for Rs.42,15,935/-. assessee was requested to give explanation on observations made above and also requested to show cause why capital gains on transfer of above mentioned property should not be taken for Rs.46,40,290/- 2.4. ld CIT(A) upheld action of ld AO. Aggrieved, assessee is in appeal before us on following grounds:- Grounds of Appeal 1. For that in view of facts and circumstances of case Ld. CIT(A) was wholly wrong and unjustified in confirming AO's action in initiating proceeding u/s 153C of Act by issue of notice u/s 153C on 28.03.2011 for AY 2010-11 after abnormal and unreasonable delay of around 2 years since date of search conducted u/s 132 of Act on 17.10.2008 in premises of third party simply holding that there is no time limit for 6 IT(SS)A No.59/13 issue of notice u/s 153A / 153C of Act. proceeding u/s 153C and notice u/s 153C, being totally invalid and void ab initio, are liable to be quashed / cancelled. 2. For that in view of facts and circumstances of case Ld. CIT(A) was wholly wrong and unjustified in confirming AO's action in initiating proceeding u/s 153C of Act for AY 2010-11 by issue of notice u/s 153C on 28.03.2011 after date of completion of search assessment u/s 153A of Act in case of said third party Dr. S. K. Karan, whose premises were searched u/s 153A on 17.10.2008. proceeding initiated u/s 153C and issue of notice u/s 153C, which are barred by limitation and hence invalid and void ab initio, are liable to be quashed / cancelled. 3. For that in view of facts and circumstances of case Ld. CIT(A) was wholly wrong and unjustified in confirming (i) initiation of proceeding u/s 153C and (ii) subsequent assessment made u/s 143(3) /153C for later AY 2010-11 without ever considering and analyzing fact that seized documents nowhere contained any entry or information that any sum of money, by cash or otherwise, was received by assessee at any time after 17.10.2008 (search was made on 17.10.2008) which can be basis for initiation of such proceeding and subsequent completion of high-pitched assessment for AY 2010-11. proceeding u/s 153C and assessment made u/s 143(3) / 153C, being totally invalid and void ab initio, are liable to be quashed / cancelled. 4. For that in view of facts and circumstances of case Ld. CIT(A) was wholly wrong and unjustified in confirming assessment u/s 143(3) / 153C of Act for AY 2010-11 made in hurry arbitrarily assessing total income at Rs. 49,80,910/-, without at all considering facts and explanation of assessee and without allowing proper and adequate opportunity of hearing and without providing even copy of reasons recorded for initiation of proceeding u/s 153C till date of completion of search assessment grossly violating principle of natural justice. assessment u/s 143(3)/153C made after initiating invalid proceeding u/s 153C, being illegal and void ab initio, is liable to be quashed / cancelled. 5. Without prejudice to Gr. Nos. 1 to 4 above, Ld. CIT(A) was wholly wrong and unjustified in confirming A.O's action in determining Long Term Capital Gain at Rs. 46,40,290/- on, sale of assessee's house property in search assessment U/S 143(3) / 153C blindly relying upon certain vague, casual and unsubstantiated entries in documents seized from premises of third party and statement of that third party alleging that in 7 IT(SS)A No.59/13 addition to consideration money paid by cheque recorded in registered sale deeds third party, purchaser, had also paid towards sale proceeds of property further unaccounted sum of Rs. 32,41,139/- in cash recorded in seized documents to assessee. 6. Without prejudice to Gr. Nos. 1 to 4 above, Ld. CIT(A) was wholly wrong and unjustified in confirming A.O's action in making arbitrary addition of said undisclosed sum of Rs. 32,41,139/- (allegedly received from third party, purchaser) to sale proceeds of house property while assessing L.T.C.G for A.Y 2010-11 without considering basic undenying fact that no portion of said sum of Rs.32,41,139/-, allegedly recorded in seized documents, was received by assessee during F. Y 2009-10 relevant to A. Y 2010-11. wrong full addition of said sum of Rs.32,41,139/- in assessment for A.Y 2010-11 and its confirmation by Ld. CIT(A) were wholly unreasonable, uncalled for, illegal and bad in law. 7. For that in view of facts and circumstances of case Ld. CIT(A) was wholly wrong and unjustified in confirming A.O's action in enhancing sale price of three shops in said property sold to 3(three) other purchasers by sum of Rs.3,36,000/- while assessing L.T.C.G by adopting higher valuation of stamp valuation authority ( in short S.V.A ) U/S 50C of Act in lieu of actual consideration money recorded in registered sale deeds without considering fact that no extra money was ever received by assessee in addition to sale price recorded in registered sale deeds and further that valuation made by S.V.A was without any basis. actions of A.O & Ld. CIT(A) were wholly biased, uncalled for and bad in law. 8. For that in view of facts and circumstances of case Ld. CIT(A) was wholly wrong and unjustified in rejecting assessee's computation of actual proportional cost of acquisition of portion of property sold at Rs. 10,42,700/- before indexation ( cost of acquisition Rs.12,57,500/- x portion sold 5,364 sq. ft 1 total area 6,469 sq.ft ) while computing Long Term Capital Gain and instead confirming A.O's action in computing proportional cost of acquisition of property sold at Rs. 6,91,818/- before indexation ( cost of acquisition Rs.12,57,500/- x 5,364 sq. ft sold total area wrongly taken at 9,750 sq.ft ) while assessing L.T.C.G at Rs. 46,40,290/- without assigning any reason for rejection of assessee's computation. 3. ld AR raised preliminary objection by stating that there was no incriminating materials that were found in course of search of Dr S K 8 IT(SS)A No.59/13 Karan which apparently belonged to assessee and hence there could not be any proceeding that could be lawfully initiated against assessee u/s 153C of Act. He also argued that satisfaction note in terms of section 153C of Act was recorded on 28.3.2011 which was after two and half months after completion of assessment u/s 153A of Act in hands of M/s Park Clinic (Dr S K Karan group ) on 31.12.2010. In support of these propositions, he placed reliance on following decisions :- (a) Decision of this Tribunal in case of Jyotsna Desai vs ACIT in IT(SS) Nos. 114 & 115/Kol/2011 dated 6.11.2015. (b) Decision of Hon ble Delhi High Court in case of CIT vs Bharat Bhushan Jain & Ors reported in (2016) 138 DTR (Del) 97 dated 8.1.2015. (c) Decision of Delhi Tribunal in case of Tanvir Collections (P) Ltd vs ACIT reported in (2015) 54 taxmann.com 379 (Delhi- Trib.) dated 16.1.2015. (d) Decision of Hon ble Delhi High Court in case of Pepsico India Holdings (P) Ltd vs ACIT reported in (2014) 50 taxmann.com 299 (Delhi) dated 14.8.2014. (e) Decision of Jaipur Tribunal in case of Satyam Food Specialities (P) Ltd vs DCIT reported in (2015) 57 taxmann.com 194 (Jaipur Trib.) dated 27.2.2015. (f) Decision of Hon ble Supreme Court in case of CIT vs Calcutta Knitwears reported in (2014) 362 ITR 673 (SC) (g) Decision of Hon ble Gujarat High Court in case of Vijaybhai N. Chandrani vs ACIT reported in (2011) 231 CTR 474 (Guj) 3.1. He also placed reliance on CBDT Circular issued to this effect vide Circular No. 24/2015 dated 31.12.2015. 3.2. He also placed reliance on Finance Bill, 2015 wherein provisions of section 153C of Act has been amended conferring powers to ld AO to proceed with such other person even if said documents / entries relates to such other person other than person searched u/s 132 of Act. 3.3. On merits, ld AR argued that in any case, capital gains in respect of 4824 sq.ft of building of subject mentioned property cannot 9 IT(SS)A No.59/13 be assessed in Asst Year 2010-11 as possession was handed over to buyer ie Dr S K Karan / Park Clinic on or before 17.10.2008 itself. Admittedly, search in premises of Karan Group of Cases happened in subject mentioned property on 17.10.2008 which falls in Asst Year 2009-10. Hence he argued that on date of search itself, possession was in hands of buyer and only registered sale deed happened in Asst Year 2010-11 which triggered assessee to offer capital gains in return and it is well settled that revenue cannot be unjustly enriched with mistaken understanding of provisions of law by assessee by collecting unjust taxes in wrong year. He argued that there is no estoppel against statute. 4. In response to this, ld DR argued that seized documents clearly proves that same belongs to assessee herein and same is also corroborated with statement given on oath by Dr S K Karan (i.e searched party) that cash portion was handed over to Mr Anshuman Agarwal, representative of assessee. It is also proved beyond doubt that entire workings were prepared by assessee as could be evident from seized documents and statement given by Dr S K Karan. assessee had not disputed same before lower authorities. With regard to recording of satisfaction note u/s 153C of Act on 28.3.2011, same was done expeditiously by ld AO within 3 months and since there was no time limit prescribed in statute for same, Hon ble Supreme Court had interpreted same as one of option that same is to be done immediately after completion of assessment of searched person. He argued that recording of same within 3 months should have to be construed as immediate and decision relied upon by ld AR on Hon ble Delhi High Court in case of Bharat Bhushan Jain supra does not apply to facts of case. He further argued that there is no malafide intention on part of ld AO to delay process of recording of satisfaction u/s 153C of Act. With regard to addition made on 10 IT(SS)A No.59/13 merits, he argued that assessee herself had offered capital gains in Asst Year 2010-11 (i.e year under appeal) both in original return as well as in return filed in response to notice u/s 153C of Act and she cannot be allowed to withdraw her plea and take different stand that capital gains did not arose in respect of 4824 sq.ft in Asst Year 2010-11. Moreover, assessee had not informed revenue about actual date of handing over of possession to M/s Park Clinic and capital gains cannot go unescaped from levy of taxation. 5. We have heard rival submissions and perused materials available on record. We find that assessee had filed her return of income in response to notice u/s 153C of Act on 20.4.2011 declaring total income of Rs. 3,38,160/- and total short term and long term capital loss of Rs. 2,38,736/- as were declared in original return. long term capital loss on sale of portion of house property at Dhanbad declared in both returns was Rs. 2,37,924/- (sale consideration of Rs. 39,78,011/- less indexed cost of acquisition Rs. 42,15,935/-). We find from development agreement dated 18.5.2003, developer after demolishing old structure had constructed multi storied building on subject mentioned land at its own cost and new building was named Yashoban Plaza . assessee was allotted 52% of total built up area of newly constructed building in exchange of her land and old building. total built up area allotted in her 52% share was 9750 sq.ft and Developer got balance 48% of total built up area of said building. It is not in dispute that assessee out of 9750 sq.ft area of said building Yashoban Plaza allotted to her, had sold 5364 sq.ft area of that building comprised of flats / shops to 5 parties at total consideration of Rs. 39,78,011/- recorded in registered sale deeds and same was received by assessee by cheque. total value determined by stamp valuation authority for these registered sale deeds was Rs. 50,36,000/-. value of land and old building as on 9.9.1987 prior to taking up construction of building 11 IT(SS)A No.59/13 by Developer was Rs. 12,57,500/-, which after indexation had resulted in long term capital loss of Rs. 2,37,924/- and same was returned by assessee. ld AO determined long term capital gain at Rs. 46,40,290/- by placing reliance on entries in seized loose sheets marked as PK-34 (pages 27 to 30) and statement of Dr S K Karan recorded by search team u/s 132(4) of Act on 18.10.2008. 5.1. We find that preliminary objection raised by ld AR on validity of assessment framed u/s 153C of Act on following counts:- (a) that seized document found from Dr S K Karan does not belong to assessee and hence no proceedings u/s 153C of Act could be validly initiated on assessee herein ; and (b) that satisfaction note u/s 153C of Act was recorded beyond guidelines stipulated by Hon ble Supreme Court in Calcutta Knitwears case supra (c) that there cannot be any capital gains in respect of sale of 4824 sq.ft of building to Dr S K Karan in Asst Year 2010-11 in hands of assessee as possession was already handed over to buyer (Dr S K Karan) which is quite evident from fact that search was conducted on buyer u/s 132 of Act on 17.10.2008 in subject mentioned premises. We find that reliance placed by ld AR on amendment brought in by Finance Act 2015 in section 153C of Act only advances case of revenue as said amended section confers powers on ld AO to proceed with such other person other than person searched u/s 132 of Act even if entries / documents relate to such other person provided ld AO of such other person (i.e section 153C person) is satisfied that those documents / entries would have bearing on determination of total income of such other person. Admittedly, in 12 IT(SS)A No.59/13 instant case, loose sheets clearly reflected payments of cash by Dr S K Karan to assessee towards purchase of building from assessee and those cash was handed over to Mr Anshuman Agarwal , representative of assessee. It is not in dispute that cheques were handed over to Anshuman Agarwal by Dr S K Karan which had found place in books of accounts of assessee as sale consideration of building. It is case of revenue that cash portion also was received by said party at behest of assessee from Dr S K Karan. Hence we have no hesitation to conclude that seized document found in premises of Dr S K Karan during course of search belongs to assessee herein and proceedings u/s 153C had to be initiated on her as per law. We do not deem it fit to dwell into case laws relied upon by ld AR as in those cases, there was finding that document did not belong to section 153C person. Hence those cases are factually distinguishable from assessee s case. Accordingly arguments advanced by ld AR in this regard are dismissed. 5.2. next argument advanced by ld AR is with regard to recording of satisfaction note u/s 153C of Act after gap of two and half months. We find that assessment was framed u/s 153A of Act on searched person u/s 132 of Act on 31.12.2010. satisfaction note was recorded by ld AO of searched person that certain loose sheets / documents found in search belongs to assessee herein and accordingly proceedings were to be initiated u/s 153C of Act. We find from satisfaction note that same was recorded after ascertaining / satisfying that said cash portion received on sale of property had not been found reflected in return of income of assessee. This fact was further sanctified / approved by ld AO of assessee also that same had not found reflected in IT return of assessee. We find that Hon ble Supreme Court in case of CIT vs Calcutta Knitwears reported in (2014) 362 ITR 673 (SC) had with regard to timing of recording of satisfaction note had held as under:- 13 IT(SS)A No.59/13 44. In result, we hold that for purpose of section 158BD of Act satisfaction note is sine qua non and must be prepared by AO before he transmits records to other AO who has jurisdiction over such other person. satisfaction note could be prepared at either of following stages : (a) at time of or along with initiation of proceedings against searched person under section 158BC of Act; (b) along with assessment proceedings under section 158BC of Act; and (c ) immediately after assessment proceedings are completed under section 158BC of Act of searched person. 5.3. We find that Circular No. 24/2015 dated 31.12.2015 also endorses views of Hon ble Supreme Court in Calcutta Knitwears supra. 5.4. It is well settled that provisions of section 158BC are pari materia with section 153A of Act and that of section 158BD are pari materia with section 153C of Act. instant case falls under category (c) above of Hon ble Apex Court judgement i.e recording of satisfaction after assessment proceedings are completed u/s 153A of searched person. In instant case , satisfaction note u/s 153C of Act was recorded on 28.3.2011 which is after two and half months of completion of assessment u/s 153A of Act. Whether same could be construed as recording of satisfaction immediately after completion of assessment of searched person as contemplated in guidelines of Hon ble Apex Court. ld AR placed reliance in this regard on decision of Hon ble Delhi High Court in case of CIT vs Bharat Bhushan Jain & Ors reported in (2016) 138 DTR (Del) 97 dated 8.1.2015 wherein it was held as below:- Satisfaction note recorded under section 158BD almost one year or more than one year after completion of assessment of searched person cannot be considered to be contemporaneous to assessment proceedings and therefore, impugned notices issued pursuant to such satisfaction notes were not in conformity with requirements of section 158BD. 14 IT(SS)A No.59/13 It could be seen that in said case , satisfaction note was recorded after one year after completion of assessment and hence Hon ble Delhi High Court relying on Hon ble Apex Court in Calcutta Knitwears supra held that same cannot be considered to be contemporaneous to assessment proceedings. In instant case, satisfaction note was recorded within 3 months from date of completion of assessment proceedings which could be considered as being done expeditiously by ld AO and hence decision relied upon on Hon ble Delhi High Court does not support case of assessee and arguments of ld AR. 5.5. next argument advanced by ld AR is that in any case , there cannot be any capital gains in Asst Year 2010-11 in respect of 4824 sq.ft of building sold to M/s Park Clinic as admittedly possession was handed over to buyer on or before 17.10.2008. In this regard, we find that admittedly, search in premises of buyer happened in subject mentioned property on 17.10.2008. It is not case of revenue that buyer was in illegal possession of subject mentioned property of seller (i.e assessee herein) on date of search. No legal proceedings for same ( i.e for illegal possession) were pending in any judicial forums that were brought to our knowledge by both parties. In this regard, hence it could be safely concluded that on date of search, possession of subject mentioned property was very much in hands of buyer. We find that buyer Dr S K Karan had in his statement on oath u/s 132(4) of Act on date of search on 17.10.2008 / 18.10.2008 had vide reply to Question No. 8 deposed as under:- Ans to Q. No. 8 Park Clinic firm in which I am partner is owner of second, third and fourth floor. Although it is yet to be registered in favour of Park Clinic. above mentioned property has been purchased from Shristi Builder, Smt. Shakuntala Kanoi. 15 IT(SS)A No.59/13 This reply has not been retracted by buyer at any time in future during subsequent proceedings. We find that only registration of property had happened on 30.7.2009 relevant to Asst Year 2010-11. assessee, no doubt, had reported capital loss on subject mentioned property in Asst Year 2010-11 in original return as well as in return filed in response to notice u/s 153C of Act. But what we see is possession of property had already been handed over by assessee to buyer and only registration has been delayed which was ultimately done in Asst Year 2010-11. In these circumstances, it could be safely held that capital gains cannot be assessed in Asst Year 2010-11 as that is not year of handing over of possession of property . We find lot of force in argument of ld AR that there is no estoppel against statute and revenue cannot take advantage of ignorance of assessee with regard to assessability of income in particular year. We find that Hon ble Jurisdictional High Court had addressed this aspect while rendering decision in case of CIT vs. Bhaskar Mitter reported in (1994) 73 Taxman 437 (Cal) at para 8 at pg. 442 referred in Maynak Poddar (HUF) vs Wealth Tax Officer reported in (2003) 262 ITR 0633 (Cal) by observing as under:-: "....... assessee is liable to pay tax only upon such income as can be in law included in his total income and which can he lawfully assessed under Act. law empowers ITO to assess income of assessee according to law and determine tax payable thereon. In doing so, he cannot assess assessee on amount, which is not taxable in law, even if same, is shown by assessee. There is no estoppel by conduct against law nor is there any waiver of legal right as much as legal liability to be assessed otherwise than according to mandate of law (sic). It is always open to assessee to take plea that figure, though shown in his return of total income, is not taxable in law. ........" 5.6. We also place reliance on decision of Hon ble Supreme Court in case of CIT vs Podar Cement (P) Ltd reported in (1997) 226 ITR 625 (SC) wherein it was held as below:- 16 IT(SS)A No.59/13 52. From circumstances narrated above and from Memorandum explaining Finance Bill, 1987 (supra), it is crystal clear that amendment was intended to supply obvious omission or to clear up doubts as to meaning of word 'owner' in section 22. We do not think that in light of clear exposition of position of declaratory/clarificatory Act it is necessary to multiply authorities on this point. We have, therefore, no hesitation to hold that amendment introduced by Finance Bill, 1988 was declaratory/clarificatory in nature so far as it relates to section 27(iii), (iiia) and (iiib ). Consequently, these provisions are retrospective in operation. If so, view taken by High Courts of Patna, Rajasthan and Calcutta, as noticed above, gets added support and consequently contrary view taken by Delhi, Bombay and Andhra Pradesh High Courts is not good law. 53. We are conscious of settled position that under common law owner means person who has got valid title legally conveyed to him after complying with requirements of law such as Transfer of Property Act, Registration Act, etc. But in context of section 22 having regard to ground realities and further having regard to object of Act, namely, 'to tax income', we are of view that owner is person who is entitled to receive income from property in his own right. 54. In light of above narration and discussion, we do not think it necessary to discuss any more separately submissions advanced across bar. 55. We answer question referred to this Court in I.R.C. Nos. 9- 10 of 1986 in negative and in favour of revenue. Civil Appeal No. 4165 of 1994 filed by revenue stands dismissed and Civil Appeal No. 4549 of 1996 by assessee, stands allowed. However, there will be no order as to costs. In instant case, subject mentioned property (i.e property for which possession was handed over to buyer by seller ) was address of property in which search and seizure action u/s 132 of Act was conducted by Income Tax Department on 17.10.2008 which goes to prove that possession was handed over to buyer by assessee on or before date of search. buyer (i.e Dr S K Karan and Park Clinic) would be entitled to fruits of subject mentioned property either being used for their own business without any attached costs thereon. In other words, buyer need not pay any 17 IT(SS)A No.59/13 rentals to anybody for subject mentioned property as they were already in possession of property on paying consideration to seller and only registration of property happened on 30.7.2009 falling in Asst Year 2010-11. 5.7. In view of aforesaid facts and findings and respectfully following decisions of Hon ble Jurisdictional High Court and Hon ble Supreme Court supra, we hold that capital gains / loss cannot be considered in hands of assessee in respect of sale of 4824 sq.ft of building to Dr S K Karan / Park Clinic in Asst Year 2010-11 . Accordingly grounds 1 to 6 raised by assessee are partly allowed. 5.8. other ground raised by assessee with regard to claim of indexation becomes infructuous to extent of 4824 sq.ft alone in view of our decision rendered hereinabove that capital gains for 4824 sq.ft of building would not be assessable in Asst Year 2010-11 in hands of assessee. 5.9. We hold that with regard to sale of remaining square feet of building (i.e 540 sq.ft) by assessee to (i) Sita Projects ; (ii) O.P.Agarwal and (iii) Murali Prasad, same would be assessable in Asst Year 2010-11. There is no contrary evidence brought on record for not taxing same in Asst Year 2010-11 as was present in case of sale of building to Dr S K Karan / Park Clinic. In this regard, we find that ld AO had adopted sale consideration at rates prescribed by stamp valuation authority in terms of section 50C of Act. We find that assessee had objected to adoption of value determined by stamp valuation authority u/s 50C of Act. In such case, law provides in section 50C(2) of Act that reference need to be made to District Valuation Officer for ascertaining value of property and necessary precautions are also provided thereon in statute to assessee. We find support from decision of Hon ble Jurisdictional 18 IT(SS)A No.59/13 High Court in case of Sunil Kumar Agarwal vs CIT reported in (2015) 372 ITR 83 (Cal) had held as below:- 7. We have already set out hereinabove recital appearing in Deeds of Conveyance upon which assessee was relying. Presumably, case of assessee was that price offered by buyer was highest prevailing price in market. If this is his case then it is difficult to accept proposition that assessee had accepted that price fixed by District Sub Registrar was fair market value of property. No such inference can be made as against assessee because he had nothing to do in matter. Stamp duty was payable by purchaser. It was for purchaser to either accept it or dispute it. assessee could not, on basis of price fixed by Sub-Registrar, have claimed anything more than agreed consideration of sum of Rs.10 lakhs which, according to assessee, was highest prevailing market price. It would follow automatically that his case was that fair market value of property could not be Rs.35 lakhs as assessed by District Sub Registrar. In case of this nature assessing officer should, in fairness, have given option to assessee to have valuation made by departmental valuation officer contemplated under Section 50C. As matter of course, in all such cases assessing officer should give option to assessee to have valuation made by departmental valuation officer. 8. For aforesaid reasons, we are of opinion that valuation by departmental valuation officer, contemplated under Section 50C, is required to avoid miscarriage of justice. legislature did not intend that capital gain should be fixed merely on basis of valuation to be made by District Sub Registrar for purpose of stamp duty. legislature has taken care to provide adequate machinery to give fair treatment to citizen/taxpayer. There is no reason why machinery provided by legislature should not be used and benefit thereof should be refused. Even in case where no such prayer is made by learned advocate representing assessee, who may not have been properly instructed in law, assessing officer, discharging quasi judicial function, has bounden duty to act fairly and to give fair treatment by giving him option to follow course provided by law. 9. For aforesaid reasons, order under challenge is set aside. 10. impugned order including orders passed by CIT(A) and assessing officer are all set aside. matter is remanded to assessing officer. He shall refer matter to departmental valuation officer in accordance with law. After such valuation is 19 IT(SS)A No.59/13 made, assessment shall be made de novo in accordance with law. Respectfully following decision of Hon ble Jurisdictional High Court in case of Sunil Kumar Agarwal supra, we direct ld AO to make reference to District Valuation Officer (DVO) of subject mentioned property (i.e shops pertaining to 540 sq.ft alone which were sold to three parties namely Sita Projects, O.P.Agarwal and Murali Prasad), in accordance with provisions of section 50C(2) of Act. 5.10. Since this limited issue of determination of sale consideration for 540 sq.ft of building is set aside to file of ld AO as directed above, we deem it fit and appropriate to set aside related claim of indexation thereon also to file of ld AO as it would become academic in terms of computation of capital gains / loss. grounds raised in this regard by assessee are allowed for statistical purposes. 6. Ground No. 9 raised by assessee is general in nature and does not require any adjudication. 7. In result, appeal of assessee is partly allowed for statistical purposes. Order pronounced in open court on this 19/10/ 2016. Sd/- Sd/- (S.S.VISWANETHRA RAVI) (M.BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER Kolkata; Dated 19/10/2016 Prakash Mishra, PS Copy of Order forwarded to : 1. Appellant 2. Respondent. 3. CIT(A), Kolkata. 4. CIT 5. DR, ITAT, Kolkata 6. Guard file. 20 IT(SS)A No.59/13 //True Copy// BY ORDER, (Asstt. Registrar) ITAT, Shakuntala Kanoi v. ITO Ward-29(4), Kolkata