The DCIT, Circle-13, Ahmedabad V. Miss Janki H.Patel, Ahmedabad

ITA 1336/AHD/2011

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6946 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 7 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-12-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 08-12-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 04-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MK SINGH
• Keywords: Capital asset; Salary income; Earning of tax free income; Revised return
• Section: 143(3); 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD (BEFORE SHRI G.C.GUPTA VICE PRESIDENT & SHRI ANIL CHATURVEDI , A.M.) I. T. A. NO. 1336 / AHD/ 20 1 1 (A SSESSMENT YEAR: 2008 - 09) THE DY. COMMISSIONER OF INCOME - TAX, CIRCLE - 13, AHMEDABAD V/S MISS JANKI H. PATEL 18/389, SATYAGRAH CHHAVNI SATELITE, AHMEDAB AD (APPELLANT) (RESPONDENT) PAN: ANJPP8960E APPELLANT BY : SHRI M.K. SINGH, SR. D.R. RESPONDENT BY : SHR I BHAVIK KHANDHEDIYA WITH MANUBHAI A. PANCHAL, A.R. ( )/ ORDER DATE OF HEARING : 08 - 12 - 2014 DATE OF PRONOUNCEMENT : 12 - 12 - 2014 PER SHRI ANIL CHATURVEDI,A.M. 1. THIS APPEAL FILED BY THE REVENUE IS AGAINST THE ORDER OF CIT(A) - XXI, AHMEDABAD DATED 17.02.2011 FOR A.Y. 2008 - 09. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIA L ON RECORD ARE AS UNDER. 3. ASSESSEE IS AN INDIVIDUAL STATED TO BE DERIVING INCOME FROM SALARY CAPITAL GAINS AND OTHER SOURCES. ASSESSEE FILED HER RETURN OF INCOME FOR A.Y. 08 - 09 ON 31.07.2008 DECLARING TOTAL INCOME OF RS. 17,59,470 / - . THE CASE WAS SELEC TED FOR SCRUTINY AND THEREAFTER THE ASSESSMENT WAS FRAMED UNDER SE CTION 143(3) VIDE ORDER DATED 30.12.2010 AND THE TOTAL INCOME WAS DETERMINED AT RS. 17,59,470/ - . ASSESSEE D URING THE COURSE OF ASSESSMENT PROCEEDINGS HAD SUBMITTED TO THE ITA NO 1336/AHD/2011 . A.Y. 2008 - 09 2 A.O THAT SHE HAD DI SCLOSED RS. 16,29,310/ - RECEIVED TOWARDS PASSING RIGHTS IN THE RETURN OF INCOME AS SHORT TERM CAPITAL GAINS AND TAX WAS ALSO PAID ON THE SAME BUT AS THERE WAS NO TRANSFER OF CAPITAL ASSET WITHIN THE MEANING OF SECTION 2(47) OF THE ACT , NO CAPITAL GAIN AC CRUED TO HER AND THEREFORE THE AMOUNT RECEIVED TOWARDS PASSING RIGHTS WAS NOT LIABLE TO TAX AND SHE THEREFORE CLAIMED REFUND OF THE TAX PAID. THE SUBMISSION OF THE ASSESSEE WAS NO T FOUND ACCEPTABLE TO THE A.O. A S HE WAS OF THE VIEW THAT ASSESSEE HAD RELI NQUIS HED HER RIGHTS TO USE THE LAND AS SHE HAD ALLOWED SAHARA INDIA COMMERCIAL CORPORATION LTD. FOR USE THE LAND AS ROAD. FURTHER SINCE ASSESSEE HAD VOLUNTARILY OFFERED THE AMOUNT OF RECEIPT AS CAPITAL GAINS AND HAD PAID THE TAX , A.O. BY RELYING ON THE DEC ISION OF HON BLE APEX COURT IN THE CASE OF GOETZE INDI A LTD. VS. CIT 284 ITR 323 (SC), WAS OF THE VIEW THAT THE CLAIM WAS NOT ALLOWABLE AS ASSESSEE SHOULD HAVE FILED REVISED RETURN OF INCOME AND IN THE ABSENCE OF REVISED RETURN, THE CLAIM WAS NOT ALLOWABLE . AGGRIEVED BY THE ORDER OF A.O., ASSESSEE CARRIED THE MATTER BEFORE CIT(A) WHO DELETED THE ADDITION BY HOLDING AS UNDER: - 9.I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS MADE BY THE ASSESSEE AND OBSERVATIONS MADE BY THE A.C.I.T, CIRCLE - 13 FOR DISALLOWANCE M ADE FOR ASSESSEE'S CLAIM AND I AM OF THE OPINION THAT A.C.I.T. IS NOT JUSTIFIED IN REJECTING THE CLAIM OF THE ASSESSEE ON THE BASIS OF HON BLE SUPREME COURT IN THE C ASE OF GOETZE (INDIA) LTD. VS. C IT REPORTED IN 284 ITR 323 (SC) SINCE THE A.C.I.T. HAS NOT OBSERVED THE FACTS OF THE CASE WHICH ARE ENTIRELY ON DIFFERENT FOOTINGS AS AGAINST THE PRESENT CASE IN APPEAL. ON THE BASIS OF HON'BLE SUPREME COURT DECISION IN JUTE CORPORATION OF INDIA VS CIT(1990) 8 8 CTR(SC) 66 (1991) 187 ITR 688 (SC) WHEREIN THE FACTS OF THE CASE ARE VERY SIMILAR TO THAT OF THE CASE UNDER APPEAL AND WHEREIN THE APEX COURT ALLOWED THE DEDUCTION EVEN WHEN IT HAS NOT BEEN CLAIMED INITIALLY BY THE ASSESSEE IN THE RETURN OF INCOME. HENCE THE APPEALLANT IS ENTITLED TO CLAIM THE ADDITIONAL GRO UNDS FOR DEDUCTION EVEN WHEN THE SAME HAVE NOT BEEN CLAIMED IN THE RETURN OF INCOME FILLED BY THE ASSESSEE PROVIDED THE ASSESSMENT PROCEEDINGS ARE OPENED AND ARE CARRIED OUT. FURTHERMORE, THE JUDGMENTS PRONOUNCED BY THE VARIOUS COURTS IN THE FOLLOWING CASE S CANNOT ALSO BE OVERLOOKED WHICH ARE ALSO RELEVANT IN THIS CONTEXT: (A) NATIONAL THERMAL POWER CO. LTD. VS. COMMISSIONER OF INCOME TAX (1999) 157 CTR(SC) 249 : (1998) 229 ITR 383 (SC) (B)ORISSA CEMENT LTD. VS. COMMISSIONER OF INCOME TAX (2001) 169 CTR (DE L) 545 : (2001) 250 ITR 856 (DEL). (C) HINDUSTAN CONSTRUCTION CO. LTD. VS. COMMISSIONER OF INCOME TAX (1993) 113 CTR (BOM) 381 : (1994) 208 ITR 291 (BOM) HENCE, RELYING ON THE AFORESAID JUDGMENTS AND THE QUESTION IN DISPUTE BEING THE SUBSTANTIAL QUESTION O F LAW THE LEARNED A.C.I.T. SHOULD HAVE CONSIDERED ASSESSEE'S PROPOSITION AS AGAINST REJECTING THE SAME. 10 SO FAR AS THE ALLOWANCE OF THE CLAIM IS CONCERNED, I HAVE CAREFULLY STUDIED THE OBSERVATIONS MADE BY THE LEARNED A.C.I.T. AND THE SUBMISSIONS MADE B Y THE APPELLANT. I AM OF THE VIEW THAT THE LEARNED A.C.I.T. IS NOT JUSTIFIED IN REJECTING THE CLAIM OF THE APPELLANT TO CONSIDER THE SALE CONSIDERATION OF RS. 16,29,310/ - AS EXEMPT INCOME AND I AM IN AGREEMENT WITH THE ASSESSEE'S SUBMISSIONS IN THE LIGHTS OF VARIOUS JUDGMENTS CITED BY THE AUTHORIZED REPRESENTATIVES OF THE ASSESSEE WHICH ARE REPRODUCED BELOW: 10. NOW, IN LIGHTS OF THE ABOVE, I AGREE WITH THE CLAIM OF THE ASSESSEE FOR TREATING THE AMOUNT RECEIVED OF RS. 16,29,310/ - AS EXE MPT INCOME AND DIRECT THE A.C.I.T. TO ASSESS THE INCOME AFTER ALLOWING THE CLAIM OF THE ASSESSEE AS EXEMPT INCOME OF RS. 16,29,310/ - . ITA NO 1336/AHD/2011 . A.Y. 2008 - 09 3 4. AGGRIEVED BY THE ORDER OF CIT(A), REV ENUE IS NOW IN APPEAL BEFORE US AND HAS FOLLOWING GROUNDS: - 1. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING ADDITION OF RS. 16,29,310/ - CLAIMED AS EXEMPT INCOME, WHICH HAS BEEN DISCLOSED BY THE ASSESSEE AS SHORT TERM CAPITAL GAIN IN THE RETURN OF INCOME. 2. THE LEARNED CIT(A) HAS FAILED TO TAKE INTO CONSIDERATION THE REASONS/GR OUNDS AS DISCUSSED BY THE ASSESSING OFFICER IN.PARA - 4 OF THE ASSESSMENT ORDER. 3. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 4. IT IS THEREFORE PRAYED THAT THE ORDER OF THE LD. CIT(A) MAY BE CANCELLED AND THAT THE ORDER OF THE ASSESSING OFFICER BE RESTORED TO THE ABOVE EXTENT. 5. BEFORE US, LD. D.R. POINTED TO THE VARIOUS FINDINGS OF A.O AND SUPPORTED HIS ORDER. ON THE OTHER HAND, LD. A.R. REITERATED THE SUBMISSIONS MADE BEFORE A.O AND CIT(A). HE FURTHER POI NTED TO THE TRANSLATED COPY OF THE AGREEMENT OF U NDERSTANDING ENTERED BY THE ASSESSEE WITH SAHARA INDIA COMMERCIAL CORPORATION ENTERED ON 18 TH DAY OF OCTOBER, 2007 AND POINTED TO PARA 4 TO SUPPORT HIS CONTENTION THAT ASSESSEE HAD NOT TRANSFERRED THE LAND B UT HAD GIVEN ONLY PASSING RIGHTS AND THEREFORE THERE CANNOT BE A TRANSFER WITHIN THE MEANING OF SECTION 2(47) OF THE ACT. H E THUS SUPPORTED THE ORDER OF CIT(A). 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IN THE RETURN OF IN COME , ASSESSEE HAD DISCLOSED THE AMOUNT RECEIVED TOWARDS PASSING RIGHTS FROM SAHARA INDIA COMMERCIAL CORPORATION AS INCOME FROM SHORT TERM CAPITAL GAINS. A.O. WAS OF THE VIEW THAT IN VIEW OF SECTION 2(47) OF THE ACT ASSESSEE HAD RELINQUISHED THE RIGHTS IN THE ASSETS. AT THIS POINT OF TIM E, IT WOULD BE RELEVANT TO REFER TO THE RELEVANT CLAUSE 4 OF AGREEMEN T OF U NDERSTANDING ENTERED BY THE ASSESSEE WITH SAHARA INDIA COMMERCIAL CORPORATION WHICH READS AS UNDER: - 4 FURTHER BOTH PARTIES CAN USE THE SAID ROAD AND THE PARTY OF THE FIRST PART AND THE PARTY OF THE SECOND PART WILL HAVE RIGHT TO BRING ELECTRIC CABLES, POLES AND WIRES AND WATER LINES, DRAINAGE LINES, TELEPHONE LINES, TELEPHONE POLES, T.V. CABLE ABOVE AND UNDERNEATH THE ROAD AND BOTH PARTIES ARE ENTI TLED FOR OTHER EASEMENT RIGHTS. SUCCESSORS, TRANSFEREES, ASSIGNEES OF THE PARTY OF THE FIRST PART AND THE PARTY OF THE SECOND PART AND ITA NO 1336/AHD/2011 . A.Y. 2008 - 09 4 THEIR LEGAL HEIRS, GUARDIANS, SUCCESSORS CAN PASS THROUGH THE SAID ROAD BY WALKING AND / OR WITH ALL TYPES OF LIGHT OR HE AVY VEHICLES. 7. ON PERUSING THE AFORE SAID CLAUSE OF MOU , IT IS SEEN THAT ASSESSEE HAD NOT RELINQUISHED HER RIGHTS IN THE PROPERTY AND THE OWNERSHIP POSSESSION AND AL L RIGHTS OF THE ROAD REMAINED WITH THE ASSESSEE, ASSESSEE HAD ONLY GIVEN TRESPASSING RIGHTS TO SAHARA INDIA COMMERCIAL CORPORATION BY WAY OF CONSTRUCTION OF ROAD AND THE ROAD OF WHICH THE COMPANY HAD OBTAINED TRESPASSING RIGHTS WAS UNDER THE ABSOLUTE OWNERSHIP OF THE ASSESSEE. BEFORE US, REVENUE HAS NOT BROUGHT ANY MATERIAL ON RECORD TO CONTROVER T THE SUBMISSIONS OF THE LD. A.R. AND CIT(A). IN VIEW OF THE AFORESAID FACTS, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF CIT(A) AND THUS THIS GROUND OF REVENUE IS DISMISSED. 8. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED IN O PEN COURT ON 12 - 12 - 201 4 . SD/ - SD/ - (G.C.GUPTA) (ANIL CHATURVEDI) VICE PRESIDENT ACCOUNTANT MEMBER AHMEDABAD. TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHMEDABAD