DIKSON & COMPANY, MUMBAI V. ITO 14(1)(3), MUMBAI

ITA 1062/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1675 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 9 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 02-12-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 17-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B S BIST
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Capital receipt
• Section: 143(3); 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH D, MUMBAI BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA NO.1062/M/2014 ASSESSMENT YEAR: 2010-11 M/S. DIKSON & COMPANY, 380-D, SHANKER SETH WADI, JSS ROAD, CHIRABAZAR, MUMBAI-400 002 PAN: AAAFD2743B VS. INCOME TAX OFFICER 14(1)(3), EARNEST HOUSE, NARIMAN POINT, MUMBAI - 400021 (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI NEEL KHANDELWAL, A.R. REVENUE BY : SHRI B.S. BIST, D.R. DATE OF HEARING : 19.10.2016 DATE OF PRONOUNCEMENT : 09.12.2016 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSES SEE AGAINST THE ORDER DATED 31.01.2014 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT Y EAR 2010-11. 2. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL: THE GROUND OR GROUNDS OF APPEAL ARE WITHOUT PREJUD ICE TO ONE ANOTHER. 1.A) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION TO THE EXTENT OF R S.38,14,560/- MADE BY THE AO TO THE INCOME OF APPELLANT ON ACCOUNT OF INCOME FROM O THER SOURCES IN RESPECT OF CONSIDERATION RECEIVED ON SALE OF DEVELOPMENT RIGHT S IN THE PIECE OF LANDS ON 29-6- 2001. B) THE ID. CIT(A) FAILED TO APPRECIATE THAT:- (I) THE APPELLANT HAD SOLD DEVELOPMENT RIGHTS IN THE PI ECE OF LANDS TO M/S. DARSHAN BUILDERS ON 29-6-2001 AND THEREBY PERM ITTED THE DEVELOPERS TO DEVELOP RESIDENTIAL BUILDINGS AT THEI R OWN COST, RISK AND EXPENSES; ITA NO.1062/M/2014 M/S. DIKSON & COMPANY 2 (II) THE TRANSFER OF THE PIECE OF LANDS WAS COMPLETED DU RING THE PREVIOUS YEAR RELEVANT TO A.Y. 2002-03 SINCE THE POSSESSION WAS GIVEN IN PART PERFORMANCE OF CONTRACT IN THE NATURE OF DEVELOPMEN T AGREEMENT DATED 29-6-2001; (III) THE APPELLANT HAS PASSED DOMAIN AND CONTROL OF THE IMMOVABLE PROPERTY BY GRANT OF AN IRREVOCABLE AUTHORITY AND L ICENCE AND AS SUCH THE DATE OF AGREEMENT OF DEVELOPMENT DATED 29-6-200 1 WOULD BE CONSTITUTE THE DATE OF TRANSFER OF THE CAPITAL ASSE T; AND (IV) NO CONSIDERATION WAS RECEIVED BY THE APPELLANT FROM TULSI GRUH NIRMAN & ASSOCIATES DURING THE PREVIOUS YEAR AND AS SUCH NO INCOME HAS ACCRUED OR ARISED TO THE APPELLANT DURING THE P REVIOUS YEAR. (V) IN REACHING TO THE CONCLUSION AND CONFIRMING SUCH A DDITION THE LD. CIT(A) OMITTED TO CONSIDER RELEVANT FACTORS, CONSID ERATIONS, PRINCIPLES AND EVIDENCES WHILE HE WAS OVERWHELMED, INFLUENCED AND PREJUDICED BY IRRELEVANT CONSIDERATIONS AND FACTORS. 2.A) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE ID. CIT(A) ERRED IN HOLDING (WITHOUT PREJUDICE) THAT:- (I) IN CASE IT IS BEING HELD THAT THE SAID INCOME OF TH E APPELLANT IS TO BE TAXED AS LONG TERM CAPITAL GAIN WITH INDEXATION OF THE COST, THE (II) IN CASE IT IS BEING HELD THAT THE SAID INCOME OF TH E APPELLANT IS TO BE TAXED AS LONG TERM CAPITAL GAIN WITH INDEXATION OF THE COST, THE INDEXATION SHOULD BE MADE ONLY UP TO A.Y.2002-03; A ND (III) IN CASE IT IS BEING HELD THAT THE SAID INCOME OF TH E APPELLANT IS TO BE TAXED AS LONG TERM CAPITAL GAIN WITH INDEXATION OF THE COST UP TO A.Y.2010-11, THE SALE CONSIDERATION SHOULD BE ASSES SED ON THE MARKET VALUE OF SAID LAND BY INVOKING THE PROVISIONS OF SE CTION 50C OF THE ACT. B) IN REACHING TO SUCH CONCLUSION AND HOLDING SO, T HE ID. CIT(A) OMITTED TO CONSIDER RELEVANT FACTORS, CONSIDERATIONS, PRINCIPLES AND EV IDENCES WHILE HE WAS OVERWHELMED, INFLUENCED AND PREJUDICED BY IRRELEVAN T CONSIDERATIONS AND FACTORS. 3 THE LD. CIT(A) ERRED IN NOT PASSING ANY ORDER ON THE GROUND NO.3 RAISED BY THE APPELLANT DISPUTING THE LEVY OF INTEREST U/S.234B O F THE INCOME TAX ACT, 1961. 4.THE ID. CIT(A) ERRED IN NOT PASSING ANY ORDER ON THE GROUND NO. 4 RAISED BY THE APPELLANT DISPUTING INITIATION OF PENALTY PROCEEDIN GS U/S.271(1)(C). THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR DELETE ANY OR ALL OF THE ABOVE GROUNDS OF APPEAL. 3. THE BRIEF FACTS OF THE CASE AS DERIVED FROM THE IMPUGNED ORDER ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM. THE ASSESSEE F ILED THE RETURN OF INCOME DECLARING TOTAL INCOME AS NIL. THE CASE WAS SELECT ED FOR SCRUTINY ASSESSMENT ITA NO.1062/M/2014 M/S. DIKSON & COMPANY 3 UNDER SECTION 143(3) OF THE ACT. THE ASSESSING OFFI CER (HEREINAFTER REFERRED TO AS THE AO) NOTED THAT AS PER THE AIR INFORMATION, D URING THE F.Y. 2009-10 RELEVANT TO A.Y. 2010-11, THE ASSESSEE SOLD LAND PR OPERTY SITUATED AT KARJAT FOR A TOTAL CONSIDERATION OF RS.1.71 CRORE. ON PERUSAL OF VARIOUS DETAILS FILED BY THE ASSESSEE, THE AO OBSERVED THAT THE ASSESSEE HAD ENTERED INTO A DEVELOPMENT AGREEMENT ON 29.06.2001 WITH M/S. DARSHAN DEVELOPER S FOR A TOTAL CONSIDERATION OF RS.45,50,000/-. THE AO FURTHER OBS ERVED THAT IN THE A.Y. 2010-11 UNDER CONSIDERATION IN WHICH THE ASSESSEE H AD ENTERED INTO DEED OF CONVEYANCE DATED 27.10.2009, THE ASSESSEE HAD FULLY SET OFF THE RECEIPT OF RS.45,50,000/- AGAINST THE INDEXED COST OF RS.46,47 ,981/- FOR A.Y. 2010-11 RESULTING IN CAPITAL LOSS OF RS.97,981/-. THE ASSES SEE EXPLAINED THAT THE DEVELOPMENT RIGHTS IN THE LAND WERE SOLD BY THE ASS ESSEE TO M/S. DARSHAN BUILDERS IN THE YEAR 2001 ITSELF AGAINST CONSIDERAT ION OF RS.45,50,000/-. HOWEVER, IN THE F.Y. 2009-10, THE SAID M/S. DARSHAN BUILDERS HAS SOLD THE LAND TO M/S. TULSI GRUH NIRMAN FOR RS.1.71 CRORES A ND THE SAID M/S. DARSHAN BUILDERS HAS OFFERED THE CAPITAL GAINS ON THE ENTIR E AMOUNT OF RS.1.71 CRORES. THE AO, HOWEVER, STATED THAT SINCE THE ASSESSEE HAD TRANSFERRED THE ENTIRE RIGHTS IN THE PROPERTY BY VIRTUE OF DEVELOPMENT AGR EEMENT DATED 29.06.2001, THE LONG TERM CAPITAL GAIN SHOULD HAVE BEEN OFFERED TO TAX IN A.Y.2002-03, CALCULATED AT RS.14,17,026/- ALTERNATELY, IN CASE T HE CAPITAL GAIN WAS TO BE OFFERED TO TAX IN A.Y. 2010-11 ON EXECUTION OF DEED OF CONVEYANCE, SINCE THE ASSESSEE RECEIVED ONLY 27% OF TOTAL SALE CONSIDERAT ION OF RS.1.71 CRORES, AND IN SUCH CASE THE LONG TERM CAPITAL GAIN WOULD BE WORKE D OUT AT RS.45,50,000 -- 27% OF RS.46,47,981 = RS.32,95,045/-. HOWEVER, SINC E THE ASSESSEE HAD NOT RETURNED THE CAPITAL GAINS IN A.Y. 2002-03 EVEN AS THE PROPERTY HAD BEEN TRANSFERRED IN THAT YEAR AS PER SEC. 2(47) OF THE A CT, THE QUESTION HAD ARISEN AS TO WHETHER THE SALE CONSIDERATION OF RS.45,50,000/- WAS TO BE TAXED IN A.Y. 20 10-11 AS CAPITAL GAINS OR NOT. THE AO OPINED THAT T HE FINAL SALE CONSIDERATION SHOULD NOT BE TREATED AS CAPITAL RECEIPT IN F.Y. 20 10-11, AND IT CAN ONLY BE TREATED AS INCOME FROM OTHER SOURCES. THEREFORE, TH E AO TREATED THE ENTIRE ITA NO.1062/M/2014 M/S. DIKSON & COMPANY 4 SUM OF RS.45,50,000/- AS INCOME FROM OTHER SOURCES AND ADDED TO THE INCOME OF THE ASSESSEE. THE AO WITHOUT PREJUDICE STATED TH AT IF AT ALL THE CONSIDERATION OF RS.45,50,000/- RECEIVED BY THE ASSESSEE NEEDS TO BE CONSIDERED AS CAPITAL GAINS FOR A.Y.2010-11, THE ASSESSEE IS NOT AT ALL E NTITLED FOR THE ENTIRE BENEFIT OF INDEXED COST AS THE ASSESSEE HAD RECEIVED ONLY 27% OF THE TOTAL CONSIDERATION OUT OF RS.1.71 CRORES. BEING AGGRIEVED BY THE ORDE R OF THE AO THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A). 4. IN APPEAL, THE LD. CIT(A) ALSO HELD THAT THE LAN D IN QUESTION WAS TRANSFERRED BY THE ASSESSEE TO M/S. DARSHAN BUILDER S VIDE AGREEMENT DATED 29.06.01 AND THAT THE ASSESSEE SHOULD HAVE RETURNED THE CAPITAL GAINS IN THE ASSESSMENT YEAR 2002-03. HE ALSO OBSERVED THAT THE ASSESSEE HIMSELF HAS OFFERED THE CAPITAL GAIN/LOSS IN THE ASSESSMENT YEA R 2010-11. HE HELD THAT THE ASSESSEE WAS NOT ENTITLED TO THE INDEXATION BENEFIT UP TO ASSESSMENT YEAR 2010- 11 BUT ONLY UP TO ASSESSMENT YEAR 2002-03. HE THER EFORE UPHELD THE ORDER OF THE AO THAT THE AMOUNT OF RS.45,50,000/- SHOWN BY T HE ASSESSEE AS RECEIPT ON ACCOUNT OF SALE OF LAND UNDER THE HEAD LONG TERM C APITAL GAINS WAS TO BE TREATED AS INCOME FROM OTHER SOURCES FOR THE ASSESS MENT YEAR UNDER CONSIDERATION I.E. ASSESSMENT YEAR 2010-11. HE, HO WEVER, HELD THAT THE ASSESSEE WAS ENTITLED TO GET DEDUCTION OF THE DEEME D COST OF THE LAND AS ON 01.04.1981 AT RS.7,35,440/- AS AN EXPENDITURE UNDER SECTION 57(III) OF THE ACT. HE ALSO HELD THAT IN CASE THE CONSIDERATION RECEIVE D BY THE ASSESSEE IS TO BE TAXED AS CAPITAL GAINS THEN THE ASSESSEE WOULD NOT BE ENTITLED TO INDEXATION AFTER ASSESSMENT YEAR 2002-03 AND FURTHER THAT THE DEEMED SALE CONSIDERATION SHOULD BE CONSIDERED AS PER THE MARKET VALUE OF THE SAID LAND IN THE ASSESSMENT YEAR 2010-11 AT RS.1,39,74,500/- UNDER SECTION 50C OF THE ACT. THE RELEVANT PART OF THE OBSERVATIONS MADE BY THE LD. CIT(A) FOR THE SAKE OF REFERENCE IS REPRODUCED AS UNDER: 6.1 THE APPELLANT HAS ADMITTED THAT SINCE THE DEVE LOPMENT RIGHTS IN THE PROPERTY WERE TRANSFERRED TO THE DEVELOPER VIDE DEVELOPMENT AGREEMENT DATED 29-06-2001, CAPITAL GAIN ARISING FROM SUCH TRANSFER WAS TAXABLE IN A.Y. 2002-03, RELYING UPON THE JUDGMENT OF HON'BLE BOMBAY HIGH COURT IN THE CASE O F CHATURBHUJ DWARKADAS ITA NO.1062/M/2014 M/S. DIKSON & COMPANY 5 KAPADIA V. CIT 260 ITR 491 (BOM) WHEREIN IT WAS HEL D THAT IN CASE OF PASSING OF DOMAIN AND CONTROL OF THE IMMOVABLE PROPERTY BY GRA NT OF AN IRREVOCABLE AUTHORITY OR LICENCE, THE DATE OF AGREEMENT OF DEVELOPMENT WI LL CONSTITUTE THE DATE OF TRANSFER OF THE CAPITAL ASSET. I FIND THAT THE AO IS ALSO NO T AVERSE TO SAID CONTENTION OF THE APPELLANT SINCE HE HIMSELF HAS STATED THAT IDEALLY THE ASSESSEE SHOULD HAVE RETURNED THE CAPITAL GAIN DURING THE A.Y. 2002-03 ONLY. HOWE VER, IT IS A FACT THAT THE APPELLANT FAILED TO OFFER THE INCOME TO TAX IN THE A.Y. 2002- 03 ON THE PRETEXT OF WRONG ADVICE RECEIVED BY APPELLANT FROM HIS TAX CONSULTANT AT TH AT TIME. 6.2 IN THE PRESENT A.Y. 2010-11, THE ASSESSEE OFFE RED THE INCOME TO TAX ON EXECUTION OF DEED OF CONVEYANCE DATED 27-10-2009, WHEREIN ADM ITTEDLY THE APPELLANT BECAME A PARTY TO THE AGREEMENT IN ACCORDANCE WITH THE TER MS OF DEVELOPMENT AGREEMENT DATED 29-06-2001 ONLY FOR THE SAKE OF CONVENIENCE B ECAUSE IN THE GOVERNMENT RECORDS THE PIECE OF LAND STILL REMAINED IN THE NAM E OF THE APPELLANT, THOUGH THE DEVELOPMENT RIGHTS HAD ALREADY BEEN SOLD IN 2001. T HE APPELLANT FURTHER CONTENDED THAT THE ENTIRE CONSIDERATION OF RS.1,71,00,000/- V IDE THE DEED OF CONVEYANCE WAS RECEIVED BY M/S DARSHAN BUILDERS (THE DEVELOPER) FR OM M/S TULSI GRUH NIRMAN AND ASSOCIATES (PURCHASER OF LAND), AND ALSO THE ENTIRE CONSIDERATION OF RS. 1,71,00,000/- WAS ASSESSED IN HANDS OF M/S DARSHAN BUILDERS IN A. Y. 2010-11, AS PER COPY OF THEIR ASSESSMENT ORDER SUBMITTED BY THE APPELLANT. IN THIS REGARD, I FIND THAT THE APPELLANT AT ONE HA ND HAS CONTENDED THAT THE LAND WAS REGISTERED IN ITS NAME TILL THE DATE OF EX ECUTION OF THE DEED OF CONVEYANCE IN A.Y. 2010-11 ONLY FOR NAME SAKE, AS ACTUAL TRANS FER HAD ALREADY TAKEN PLACE IN THE A.Y. 2002-03; WHILE AT THE OTHER HAND, THE APPELLAN T HAS CALCULATED THE LONG TERM CAPITAL GAIN IN A.Y. 2010-11 BY INDEXING THE DEEMED COST OF LAND AS ON 01.04.1981 OF RS. 7,35,440/- BY COST INFLATION INDEX OF '632' DECLARED FOR A.Y. 2010-11 (F.Y. 2009- 10), THEREBY ARRIVING AT INDEXED COST AT RS.7,35,44 0 X 632 / 100 = RS.46,47 98 1/-, AND LONG TERM CAPITAL GAIN/ (LOSS) AT RS 45 50,000 - RS 46,47,981 = RS (97,981/-). THIS IS CLEARLY NOT ACCEPTABLE DUE TO FOLLOWING REASONS: I) HAD THE APPELLANT OFFERED THE LONG TERM CAPITAL GAIN TO TAX IN A.Y. 2002 03, WHICH WAS IDEALLY REQUIRED AND ACCEPTED AS SUCH BY THE APPELLANT, THE LONG TERM CAPITAL GAIN, WOULD HAVE BEEN WORKED OUT AT 45,50 0 00 - 7,35,440 X 426/ 100 = RS.14,17,026/- AND THE APPELLANT WAS LIABLE TO PAY TAX ON SUCH AMOUNT AT THAT TIME ITSELF. II) INSTEAD OF RECOUPING THE LOSS TO THE REVENUE ( TAX + INTEREST) ON ACCOUNT OF WITHHOLDING THE OFFERING OF ABOVE INCOME OF RS. 14, 17,026/- TO TAX FOR 8(EIGHT) LONG YEARS (SINCE A.Y. 2002-03 TO A.Y. 2010-11), THE APP ELLANT HAS ON THE CONTRARY CONVERTED THE INCOME INTO LOSS, BY CLAIMING INDEXAT ION BENEFIT UP TO A.Y. 2010-11, EVEN THOUGH CLEARLY ADMITTING ITSELF THAT THE LAND WAS HELD BY IT ONLY FOR THE NAME SAKE. 6.3 IT IS PROVED BY THE AFORESAID DISCUSSIONS THAT THE STAND TAKEN BY THE APPELLANT CANNOT BE ACCEPTED UNDER ANY CIRCUMSTANCES. NOW, TH E QUESTION ARISES WHETHER THE TREATMENT GIVEN BY THE AO TO TAX THE SAID RECEIPT O F RS.45,50,000/- AS INCOME FROM OTHER SOURCES WITHOUT GRANTING ANY DEDUCTION OF COS T THERE FROM WAS JUSTIFIED. IN THIS REGARD, I AM OF THE OPINION THAT FIRSTLY THE APPELL ANT SHOULD GET DEDUCTION OF THE DEEMED COST OF RS.7,35,440/-, AS IT WOULD BE AN ALL OWABLE EXPENDITURE EVEN U/S 57(III) OF THE ACT. SECONDLY, AS REGARDS THE INDEXA TION OF SAID COST AND TREATMENT OF NET CONSIDERATION AS LONG TERM CAPITAL GAIN (INSTEA D OF INCOME FROM OTHER SOURCES), ITA NO.1062/M/2014 M/S. DIKSON & COMPANY 6 I AM OF AN OPINION THAT IN VIEW OF THE APPELLANT'S ACT OF TRYING TO CONCEAL ITS INCOME ON SEVERAL COUNTS AS STATED ABOVE, AND ALSO TO RECO UP THE LOSS OF REVENUE FOR LATE OFFERING OF THE ASSESSABLE INCOME TO TAX FOR 8(EIGH T) LONG YEARS, THE APPELLANT SHOULD NOT BE GRANTED ANY SUCH BENEFIT. THEREFORE, THE APP ELLANT IS ENTITLED TO GET A RELIEF OF RS.7,35,440/-. 6.4 WITHOUT PREJUDICE, IN CASE IT IS HELD THAT THE SAID INCOME OF THE APPELLANT IS TO BE TAXED AS LONG TERM CAPITAL GAIN WITH INDEXATION OF THE COST, THE INDEXATION SHOULD BE MADE ONLY UP TO A.Y. 2002-03, SINCE AFTER THAT T HE APPELLANT WAS THE OWNER ONLY FOR THE NAME SAKE, AS ADMITTED BY THE APPELLANT ITS ELF. 6.5 FURTHER, WITHOUT PREJUDICE, IN CASE IT IS HELD THAT THE SAID INCOME OF THE APPELLANT IS TO BE TAXED AS LONG TERM CAPITAL GAIN WITH INDEXATION OF THE COST UP TO A.Y. 2010-11, THE SALE CONSIDERATION SHOULD BE ASSE SSED ON THE MARKET VALUE OF SAID LAND, BY INVOKING THE PROVISIONS OF SEC. 50C OF THE ACT. THE APPELLANT HAS OFFERED THE INCOME TO TAX IN A.Y. 2010-11 BASED ON EXECUTION OF THE DEED OF CONVEYANCE. THE SAID DEED OF CONVEYANCE DATED 27.10.2009 SHOWS THE MARKET VALUE OF SAID LAND AT RS.1,39,74,500/-. AS PER SEC. 50C [AS AMENDED BY FI NANCE (NO. 2) ACT, 2009, W.E.F 1- 10-2009, I.E. EFFECTIVE AS ON THE DATE OF EXECUTION OF SAID DEED OF CONVEYANCE], EVEN THE SALE CONSIDERATION 'ASSESSABLE' SHALL BE DEEMED TO BE THE FULL VALUE OF CONSIDERATION RECEIVED. 6.6. IN NUTSHELL, THE APPELLANT GETS RELIEF OF RS.7 ,35,440/- AND THE GROUNDS OF APPEAL ARE PARTLY ALLOWED. 5. BEING AGGRIEVED BY THE ABOVE ORDER OF THE LD. CI T(A), THE ASSESSEE HAS COME IN APPEAL BEFORE US. 6. A PERUSAL OF THE ASSESSMENT ORDER AS WELL AS ORD ER OF THE LD. CIT(A) GIVES IMPRESSION THAT THE LOWER AUTHORITIES THEMSEL VES ARE NOT SURE AS TO THE TAXABILITY OF THE YEAR REGARDING THE SALE RECEIPTS OF THE LAND RECEIVED BY THE ASSESSEE. ADMITTEDLY, THE DEVELOPMENT AGREEMENT WA S EXECUTED WITH M/S. DARSHAN BUILDERS BY THE ASSESSEE AND THE POSSESSION WAS ALSO HANDED OVER IN THE YEAR 2001 ITSELF. THE ASSESSEE HAD ALSO EXECUT ED AN IRRECOVERABLE POWER OF ATTORNEY IN FAVOUR OF M/S. DARSHAN BUILDERS. THERE FORE, THE TRANSFER AS PER THE PROVISIONS OF INCOME TAX ACT WAS COMPLETED IN T HE YEAR 2001. HOWEVER, THE REGISTERED SALE DEED WAS NOT EXECUTED. HENCE, IN THE RECORDS, THE LAND WAS RECORDED IN THE NAME OF THE ASSESSEE TILL THE EXECU TION OF THE SALE DEED IN THE FINANCIAL YEAR 2009-10 RELEVANT TO ASSESSMENT YEAR 2010-11. THE ASSESSEE HAS ITA NO.1062/M/2014 M/S. DIKSON & COMPANY 7 OFFERED THE CAPITAL LOSS BY COMPUTING THE COST OF I NDEXATION UP TO THE ASSESSMENT YEAR 2010-11. THE FIRST QUESTION FOR DETERMINATION BEFORE US IS A S TO THE NATURE OF THE AMOUNT RECEIVED BY THE ASSESSEE AS TO WHETHER THE I NCOME OR LOSS ARISING THEREOF IS TO BE COMPUTED UNDER THE HEAD CAPITAL G AINS OR AS INCOME FROM OTHER SOURCES. ADMITTEDLY, THE AMOUNT IN QUESTION WAS RECEIVED BY THE ASSESSEE ON ACCOUNT OF SALE OF LAND AND FURTHER THA T THE ASSESSEE IS NOT IN THE BUSINESS OF SALE AND PURCHASE OF LANDS. HENCE, UND ER THE CIRCUMSTANCES THE INCOME OF THE ASSESSEE IS TO BE COMPUTED UNDER THE HEAD CAPITAL GAINS. 7. SO FAR AS THE QUESTION OF YEAR OF TAXABILITY IS CONCERNED, THOUGH THE LOWER AUTHORITIES HAVE THEMSELVES HELD THAT IN FACT SUCH AN INCOME WAS REQUIRED TO BE TAXED IN THE ASSESSMENT YEAR 2002-03 ITSELF, YET, THE FACT REMAINS THAT THE TRANSFER OF THE LAND WAS NOT AFFECTED IN T HE RECORDS. THE OWNERSHIP OF THE LAND WAS STANDING IN THE NAME OF THE ASSESSEE U P TO THE ASSESSMENT YEAR 2010-11. THERE WAS NO MEANS OR WAYS FOR THE REVENU E AUTHORITIES TO NOTE THAT THE ASSESSEE HAS SOLD THE LAND IN THE YEAR 2001. I T WAS ONLY WHEN THE ASSESSEE HIMSELF DISCLOSED THE SALE IN THE ASSESSMENT YEAR 2 010-11 ON EXECUTION OF THE SALE DEED THAT THE MATTER CAME TO THE KNOWLEDGE OF THE REVENUE AUTHORITIES. THE ASSESSEE HIMSELF HAS SHOWN THE CAPITAL GAIN/LOS S TREATING THAT THE TRANSFER HAS TAKEN PLACE IN THE ASSESSMENT YEAR 2010-11. NO W THE ASSESSEE IS ESTOPPED FROM HIS OWN ACT AND CONDUCT TO SAY THAT THE TRANSF ER HAS TAKEN PLACE IN THE YEAR 2001 RELEVANT TO ASSESSMENT YEAR 2002-03. MOR EOVER, NO ONE CAN BE ALLOWED TO TAKE THE BENEFIT OF HIS OWN WRONG. 8. NOW THE SECOND QUESTION ARISES AS TO WHAT SHOULD BE THE AMOUNT OF SALE CONSIDERATION WHICH SHOULD BE TAXED IN THE HANDS OF THE ASSESSEE AS CAPITAL GAINS. ADMITTEDLY, THE ASSESSEE HAS RECEIVED ONLY A SUM OF RS.45,50,000/- AS PER THE AGREEMENT DATED 29.06.01. IT IS NOT THE CA SE OF THE REVENUE THAT THE ASSESSEE HAS RECEIVED ANY AMOUNT OVER AND ABOVE THE SAID AMOUNT OF RS.45,50,000/-. HENCE, WE DO NOT FIND ANY MERIT IN THE FINDINGS OF THE LD. ITA NO.1062/M/2014 M/S. DIKSON & COMPANY 8 CIT(A) THAT THE SALE CONSIDERATION OF THE LAND SHOU LD BE TAKEN AS MARKET VALUE OF THE SAID LAND UNDER SECTION 50C OF THE ACT. 9. SO FAR AS THE INDEXATION BENEFIT IS CONCERNED, I F THE TRANSFER IS TO BE TREATED AS DATED BACK TO YEAR 2001, NO TAX CAN BE L EVIED ON THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION NEITHER ON ACCOUNT OF CAPI TAL GAINS NOR UNDER THE HEAD INCOME FROM OTHER SOURCES. AS OBSERVED ABOVE, IF WE TREAT THE TRANSFER BEING DONE IN THE FINANCIAL YEAR 2009-10 RELEVANT TO ASSE SSMENT YEAR 2010-11, THEN THE ASSESSEE IS ENTITLED TO THE INDEXATION COST UP TO THE DATE OF TRANSFER. 10. NOW THE NEXT QUESTION RAISED BY THE AO IS THAT THE ASSESSEE HAD RECEIVED ONLY 27% OUT OF THE TOTAL CONSIDERATION OF RS.1.71 CRORES ON ACCOUNT OF SALE DEVELOPMENT LAND BY M/S. DARSHAN BUILDERS TO M/S. T ULSI GRUH NIRMAN. THE PECULIAR FACT THAT IS TO BE NOTED HERE THAT THE SAI D ENTIRE SALE CONSIDERATION HAS BEEN RECEIVED BY THE M/S. DARSHAN BUILDERS AND THEY HAVE OFFERED THE SAID AMOUNT FOR TAXATION AS PER THE PROVISIONS OF LAW. SO FAR AS THE CONSIDERATION OF RS.45,50,000/- OF LAND RECEIVED BY THE ASSESSEE IS CONCERNED THAT WAS NOT ON ACCOUNT OF ANY PART OF SALE OF LAND. THE ASSESSEE WAS THE OWNER OF THE ENTIRE LAND WHICH WAS TRANSFERRED BY THE ASSESSEE AS PER T HE TERMS OF THE AGREEMENT DATED 29.06.01. UNDER THE CIRCUMSTANCES IT IS NOT A CASE OF SINGLE TRANSACTION OF SALE. IT IS IN FACT A CASE OF TWO TRANSACTIONS OF SALE. THE FIRST SALE TRANSACTION MADE BY THE ASSESSEE TO THE M/S. DARSHAN BUILDERS I S FOR A CONSIDERATION OF RS.45,50,000/-. SECOND SALE TRANSACTION IS DONE BY M/S. DARSHAN BUILDERS TO M/S. TULSI GRUH NIRMAN & ASSOCIATES FOR A SUM OF RS .1.71 CRORES. SO FAR AS THE SECOND TRANSACTION IS CONCERNED, THE SAID M/S. DARSHAN BUILDERS HAS ALREADY OFFERED THE ENTIRE CONSIDERATI ON OF RS.1.71 CRORES FOR TAXATION AS PER THE PROVISIONS OF LAW. SO FAR AS T HE FIRST TRANSACTION IS CONCERNED WHICH WAS NOT RELATING TO ANY PART OF THE LAND BUT WAS IN RELATION TO THE SALE OF RIGHTS OF THE ASSESSEE IN THE ENTIRE LA ND, HENCE, THE ASSESSEE WAS ENTITLED TO THE INDEXED COST IN RELATION TO THE ENT IRE LAND AND NOT 27% OF THE ITA NO.1062/M/2014 M/S. DIKSON & COMPANY 9 TOTAL CONSIDERATION RELATING TO THE SECOND TRANSACT ION. UNDER THESE CIRCUMSTANCES, WE DO NOT FIND ANY JUSTIFICATION ON THE PART OF THE AUTHORITIES EITHER TAXING THE SALE CONSIDERATION RECEIVED BY TH E ASSESSEE AS INCOME FROM OTHER SOURCES OR IN RESTRICTING THE INDEXATION BENE FIT TO THE ASSESSEE UP TO ASSESSMENT YEAR 2002-03 OR UP TO THE 27% OF THE SAL E CONSIDERATION. 11. IN VIEW OF OUR FINDINGS GIVEN ABOVE, THE APPEAL OF THE ASSESSEE IS ALLOWED AND ADDITIONS MADE BY THE LOWER AUTHORITIES ON THE ISSUE UNDER CONSIDERATION ARE HEREBY ORDERED TO BE DELETED. ORDER PRONOUNCED IN THE OPEN COURT ON 09.12.2016. SD/- SD/- (ASHWANI TANEJA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 09.12.2016. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.