DCIT 4(3)(1), MUMBAI V. THE NEW PIECE GOODS BAZAR CO. LTD, MUMBAI

ITA 100/MUM/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7945 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 08-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN KUMAR LD
• Assessee Lawyers: B V JHAVERI LD
• Keywords: Capital asset
• Section: 143(3); 2(14)

Judgement Text

ITA NO.100/MUM/2016 THE NEW PIECE GOODS BAZAR CO. LTD. ASSESSMENT YEAR-2012-13 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI . . , , BEFORE SHRI D.T. GARASIA, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO.100/MUM/2016 ( / ASSESSMENT YEAR: 2012-13) DEPUTY COMMISSIONER OF INCOME TAX 4(3)(1) ROOM NO.649,6 TH FLOOR AAYKAR BHAVAN,M.K.ROAD MUMBAI-400 020 / VS. THE NEW PIECE GOODS BAZAR CO.LIMITED 2 ND FLOOR,OFFICE GALLY, M.J.MARKET, KALBADEVI ROAD MUMBAI-400 002 ! ./ ./PAN/GIR NO. AAACT-1770-F ( !# /APPELLANT ) : ( $%!# / RESPONDENT ) A SSESSEE BY : B.V.JHAVERI ,LD.AR RE VENUE BY : SUMAN KUMAR, LD. SR.DR / DATE OF HEARING : 25/10/2017 / DATE OF PRONOUNCEMENT : 13/12 /2017 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THE CAPTIONED APPEAL BY REVENUE FOR ASSESSMENT Y EAR [AY] 2012- 13 CONTEST THE ORDER OF THE LD. COMMISSIONER OF INC OME-TAX (APPEALS)-9 [CIT(A)], MUMBAI, APPEAL NO.CIT(A)-9/CIR.4/414/2014-15 DATED 16/10/2015 BY RAISING THE FOLLOWING GROUNDS OF APPE AL:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN DIRECTING THE AO TO ASSESS PREMIUM OF RS.4 ,97,95,000/- AS CAPITAL GAIN U/S.45(1) INSTEAD OF ASSESSING IT AS THE INCOME FRO M OTHER SOURCES U/S.56(1) ITA NO.100/MUM/2016 THE NEW PIECE GOODS BAZAR CO. LTD. ASSESSMENT YEAR-2012-13 2 WHEN THE OWNERSHIP OF THE PROPERTY DOES NOT CHANGE FROM THE HANDS OF THE ASSESSEE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN RELYING UPON THAT MERELY GIVING CONSENT TO CHANGE IN THE POSSESSION OF RENTED PROPERTY FROM OLD TENANT TO THE NEW TENANT D OES NOT CONSTITUTE THE CHANGE OF OWNERSHIP IN THE HANDS OF THE ASSESSEE AN D THEREFORE PREMIUM RECEIVED ON PROPERTY IS NOT A CAPITAL GAIN. THE ASSESSMENT FOR IMPUGNED AY WAS FRAMED BY LD. DE PUTY COMMISSIONER OF INCOME TAX-4(3)(1) [AO] U/S 143(3) OF THE INCOME TAX ACT, 1961 VIDE ORDER DATED 18/03/2015 AT RS.522,24, 560/- AS AGAINST RETURNED INCOME OF RS.4,71,74,555/- FILED BY THE AS SESSEE ON 25/09/2012. 2.1 DURING ASSESSMENT PROCEEDINGS, IT WAS NOTE THAT THE ASSESSEE WAS OWNER AND LANDLORD OF SHETH MULJI JETHA CLOTH MARKET, MUMBAI AND THE SHOPS IN SAID MARKET WAS GIVEN TO VARIOUS TENANTS O N RENTAL BASIS. DURING THE YEAR, THERE WAS A CHANGE OF TENANCY OF 1 7 SHOPS WHEREIN SOME NEW TENANTS WERE INTRODUCED IN PLACE OF OLD ON ES AGAINST WHICH THE ASSESSEE RECEIVED PREMIUM OF RS.4,97,95,000/- O N SUCH TRANSFERS. THE SAME WAS REFLECTED AS LONG TERM CAPITAL GAINS [LTCG] BEING TAXABLE @20%. THE ASSESSEE CLAIMED DEDUCTION OF RS. 50 LACS U/S 54EC FROM LTCG. 2.2 THE LD. AO, OPINED THAT THE SAID RECEIPTS WERE TAXABLE AS INCOME FROM OTHER SOURCES SINCE THE ASSESSEE CONTINUES TO BE THE OWNER OF THE SHOP AND THERE WAS MERE CHANGE OF TENANTS. FINALLY, THE ASSESSMENT WAS COMPLETED BY TREATING THE SAME AS INCOME FROM OTHER SOURCES. 3. AGGRIEVED, THE ASSESSEE CONTESTED THE SAME WITH SUCCESS BEFORE LD. CIT(A) VIDE IMPUGNED ORDER DATED 16/10/2015 WHE RE LD. CIT(A) RELYING UPON THE DECISION OF ITS PREDECESSORS IN AS SESSEES OWN CASE FOR ITA NO.100/MUM/2016 THE NEW PIECE GOODS BAZAR CO. LTD. ASSESSMENT YEAR-2012-13 3 SEVERAL OTHER YEARS, UPHELD THE STAND OF THE ASSESS EE. AGGRIEVED, THE DEPARTMENT IS IN FURTHER APPEAL BEFORE US. 4. THE LD. COUNSEL FOR ASSESSEE [AR], AT THE OUTSET , DREW OUT ATTENTION TO THE FACT THAT THE REVENUE CONTESTED TH E ISSUE BEFORE THIS TRIBUNAL FOR VARIOUS OTHER YEARS ALSO AND THE ISSUE STOOD COVERED IN ASSESSEES FAVOR BY THOSE ORDERS OF THE TRIBUNAL. T HE LD. DEPARTMENTAL REPRESENTATIVE [DR] FAIRLY CONCEDED THE SAME. THE R ELEVANT ORDERS OF THE TRIBUNAL HAVE BEEN PLACED BEFORE US. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED RELEVANT MATERIAL ON RECORD INCLUDING CITED ORDERS OF THE TRIBUNAL. W E FIND THAT THE ISSUE IS OF RECURRING IN NATURE AND STOOD IN ASSESSEES FAVO R FROM AY 2007-08 TO 2011-12 BY THE FOLLOWING ORDERS OF THE TRIBUNAL:- 1. ITA NO.6983/MUM/2012 FOR A.Y.2009-10 DATED 25/05 /2016 2.ITA NOS.5234/MUM/2013 AND OTHERS FOR AY 2007-08 T O 2011-12 DATED 17/02/2017 THE RELEVANT PORTION FROM ITA NO. 6983/MUM/2012 IS EXTRACTED BELOW FOR EASE OF REFERENCE:- 6. WE HAVE GONE THROUGH THE FINDINGS OF LD. CIT(A). WE AGREE WITH THE OBSERVATIONS OF THE LD. CIT(A) THAT DURING THE COUR SE OF TIME THE ASSESSE ACQUIRED BUNDLE OF RIGHTS WITH RESPECT TO THE IMPUGNED SHOPS . THESE RIGHTS INCLUDE INTERALIA, RIGHTS OF POSSESSION IN TENANCY. AS PER SECTION 2(1 4) CAPITAL ASSET MEANS PROPERTY OF ANY KIND HELD BY AN ASSESSEE, WHETHER O R NOT CONNECTED WITH HIS BUSINESS OR PROFESSION. A PERUSAL OF THIS DEFINITIO N SHOWS THAT THE LEGISLATURE HAS INTENDED TO DEFINE THE TERM CAPITAL ASSET IN THE WIDEST POSSIBLE MANNER. THIS DEFINITION HAS BEEN CURTAILED TO THE EXTENT OF EXCL USIONS GIVEN IN SECTION 2(14) ITSELF WHICH INCLUDE STOCK IN TRADE AND PERSONAL EFFECTS. THE IMPUGNED ASSET DOES NOT CLEARLY FALL IN THE AFORESAID EXCLUSIONS GIVEN IN S ECTION 2(14). THE BUNDLE OF RIGHTS ACQUIRED BY THE ASSESSE ARE UNDOUBTEDLY VALUABLE IN TERMS OF MONEY. IN OUR VIEW, THE SAID TENANCY RIGHTS SHALL FORM PART OF A CAPITA L ASSET IN THE HANDS OF THE ASSESSE AND, THEREFORE, ANY GAINS ARISING THEREFROM WOULD B E ASSESSABLE UNDER THE HEAD INCOME FROM CAPITAL GAINS ELIGIBLE FOR DEDUCTION U /S 54EC OF THE ACT. UNDER THESE CIRCUMSTANCES WE FIND THAT THE FINDINGS OF THE LD. CIT(A) ARE WELL REASONED AND IN ACCORDANCE WITH LAW AND FACTS AND DO NOT REQUIRE AN Y INTERFERENCE. ACCORDINGLY, THE ORDER OF LD. CIT(A) IS UPHELD. ITA NO.100/MUM/2016 THE NEW PIECE GOODS BAZAR CO. LTD. ASSESSMENT YEAR-2012-13 4 SIMILAR VIEW HAS BEEN TAKEN FOR OTHER ASSESSMENT YE ARS ALSO. RESPECTFULLY FOLLOWING THE SAME, WE DISMISS THE REV ENUES APPEAL. 6. RESULTANTLY, THE REVENUES APPEAL STANDS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH DECEMBER, 2017. SD/- SD/- (D.T. GARASIA) (MANOJ KUMAR AGGARW AL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 13.12. 2017 SR.PS:- THIRUMALESH ! / COPY OF THE ORDER FORWARDED TO : 1. !# / THE APPELLANT 2. $%!# / THE RESPONDENT 3. + ( ) / THE CIT(A) 4. + / CIT CONCERNED 5. $'- , - , / DR, ITAT, MUMBAI 6. . / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI