JANMANADAS & CO., MUMBAI V. ITO 14(1)(3), MUMBAI

ITA 1542/MUM/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3185 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2016
• Appeal Filed By: Assessee
• Bench Allotted: J
• Next Hearing Date: 26-02-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 05-03-2014
• Court: TRIBUNAL
• Assessee Lawyers: SANJIV M SHAH
• Keywords: Depreciation

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL J , BENCH MUMBAI BEFORE SHRI R.C.SHARMA , A M & SHRI SANDEEP GOSAIN , J M ./ ITA NO . 1542 /MUM /20 1 4 ( / ASSESSMENT YEAR : 20 10 - 20 11 ) JA MNADAS & CO., 1203/04, A WING, BHOOMI PARK - III, NEAR JAN KALYAN NAGAR, MUMBAI - 400095 VS. ITO - 14(1)(3), MUMBAI ./ ./ PAN/GIR NO. : A A HFM 1250 F ( / APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : SHRI SANJIV M. SHAH /REVENUE BY : SHRI RAJENDRA KUMAR / DATE OF HEARING : 04 / 0 3 /2016 / DATE OF PRONOUNCEMENT 31/03 /201 6 / O R D E R PER R.C.SHARMA (A.M) : TH IS IS AN APPEAL FILED BY THE A SSESSEE AGAINST THE ORDER OF CIT(A), MUMBAI , DATED 2 - 1 - 2014 , FOR THE ASSESSMENT YEAR 20 10 - 11 2. IN THIS APPEAL, THE ASSESSEE IS AGGRIEVED FOR ADDITION MADE ON ACCOUNT OF CAPITAL GAINS. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. EVEN THOUGH S IX GROUNDS OF APPEAL HAS BEEN RAISED BUT ASSESSEE IS ONLY AGGRIEVED FOR COMPUTING CAPITAL GAIN BY TAKING VALUE AS ON 1 - 4 - 1981 WITHOUT CONSIDERING THE DVOS REPORT. 3. WE HAVE CONSIDERED RIVAL CONTENTIONS AND FOUND THE ASSESSEE IS A PARTNERSHIP FIRM CONSIS TING OF TWO PARTNERS. IT IS ASSESSED TO INCOME TAX SINCE 1965 - 66. IT ACQUIRED A PLOT OF LAND ON TENANCY BASIS MEASURING 1500 SQ.YARDS FOR THEIR BUSINESS FOR 11 MONTHS FROM 01 - 10 - 1964 TO 30 - 09 - 1965. ITA NO. 1542 /1 4 2 THE SAID PLOT OF LAND IS SITUATED AT VITHALWADI, GHATLA RO AD, CHEMBUR. THE SAID PARTNERSHIP FIRM CONSTRUCTED FACTORY SHEDS ON THE SAID LAND FOR THE PURPOSE OF ITS BUSINESS. THE S A ID JAMNADAS & CO. CARRIED ON ITS BUSINESS SINCE LAST NO. OF YEARS. HOWEVER, FOR THE LAST SEVERAL YEARS ITS BU S I N ESS WAS TOTALLY DORMANT AS CAN BE SEEN FROM THE VARIOUS RETURN OF INCOMES FILED BY IT DURING THE LAST SEVERAL YEARS. IT NEVER CLAIMED ANY DEPRECIATION ON THE FACTORY SHEDS CONSTRUCTED BY IT. A CASE WAS FILED BY THE SUPERIOR LANDLORDS I.E JAGDISH HIMATLAL JANI & OTHERS BEING SUIT NO.287/386 OF 1981 IN THE SMALL CAUSES AT BOMBAY FOR GETTING VACANT POSSESSION OF THE PIECE AND PARCEL OF THE LAND AT MEASURING 1500 SQ.YARDS. THE LANDLORDS LOST THE CASE UNDER AN ORDER DATED 29 - 01 - 2000 PASSED BY THE JUDGE COURT ROOM NO.25, SMALL CAUSES AT BOMBAY. THE ASSESSEE WAS CONFIRMED AS A TENANT. T HE LANDLORDS AGAIN FIL E D A CASE IN THE COURT OF SMALL CA USES BEING T.E.R, SUIT NO.20 11224 OF 2007 FO R GETTING THE VACANT POSSESSION OF THE PREMISES. AFTER PROLONGED LITIGATION A CONSENT DECREE WAS SETTLE D BETWEEN THE PARTIES ON 03 - 12 - 2009. AS PER THE CONSENT DECREE THE ASSESSEE AGREED, CONFIRMED & UNDERTOOK TO SURRENDER ALL ITS RIGHTS, TITLE AND INTEREST IN THE PLOT OF LAND AS WELL AS IN THE VARIOUS STRUCTURES CONSTRUCTED AND OWNED BY IT AND ALSO THE VAR I OUS STRUCTURES BELONGING TO RADHESHYAM DYING & BLEACHING WORKS. IT RECEIVED TOTAL COMPENSATION OF RS. 1 ,90,00,000 / - FOR THE SAME FROM THE SUPERIOR LANDLORDS. HOWEVER, WHILE COMPUTING CAPITAL GAIN, THE AO REFERRED THE MATTER TO THE DVO FOR ARRIVING AT THE FA IR MARKET VALUE AS ON 1 - 4 - 1981. IN ITA NO. 1542 /1 4 3 THE ABSENCE OF DVOS REPORT, THE AO HIMSELF HAD TAKEN THE VALUE AS ON 1 - 4 - 1981 AND CONFIRMED THE CAPITAL GAIN. 4. WE FOUND THAT DVOS REPORT WAS DELAYED, THEREFORE, CANNOT BE CONSIDERED BY THE AO. IN THE INTEREST OF JUST ICE, WE RESTORE THIS ISSUE BACK TO THE FILE OF AO WITH A DIRECTION TO RECOMPUTE CAPITAL GAIN BY CONSIDERING THE DVOS REPORT DETERMINING/ESTIMATING VALUE OF PROPERTY AS ON 1 - 4 - 1981. THE AO IS ALSO DIRECTED TO ALLOW INDEXATION ON THE VALUATION SO ARRIVED AT BY DVO AS ON 1 - 4 - 1981 AND TO RECOMPUTE THE CAPITAL GAIN. WE DIRECT ACCORDINGLY. 5 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . O RDER PRONOUNCED IN THE OPEN COURT ON THIS 31/03 / 201 6 . SD/ - SD/ - ( S ANDEEP GOSAIN ) ( R.C.SHARMA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED 31/03 /201 6 . . /PKM , . / PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. //TR UE COPY//