ACIT Non Corporate Circle 3, CHENNAI V. Shafiq Mohamed Shah, CHENNAI

ITA 2621/CHNY/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5046 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 6 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 01-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B SAGADEVAN
• Assessee Lawyers: D ANAND
• Section: 133A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , ! ' # , % #& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ./ ITA NO.2621/CHNY/2017 ) *) / ASSESSMENT YEAR : 2014-15 THE ASSISTANT COMMISSIONER OF INCOME TAX, NON-CORPORATE CIRCLE 3, CHENNAI - 600 034. V. SHRI SHAFIQ MOHAMED SHAH, 33 (NEW NO.60), VEERABADRAN STREET, NUNGAMBAKKAM, CHENNAI - 600 034. PAN : AAJPS 3460 P (,-/ APPELLANT) (./,-/ RESPONDENT) ,- 0 1 / APPELLANT BY : SHRI B. SAGADEVAN, JCIT ./,- 0 1 / RESPONDENT BY : SHRI D. ANAND, ADVOCATE 2 0 3% / DATE OF HEARING : 09.05.2019 45* 0 3% / DATE OF PRONOUNCEMENT : 31.05.2019 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -4, CHENNA I, DATED 14.08.2017 AND PERTAINS TO ASSESSMENT YEAR 2014-15. 2. SHRI B. SAGADEVAN, THE LD. DEPARTMENTAL REPRESEN TATIVE, SUBMITTED THAT THE ONLY ISSUE ARISES FOR CONSIDERAT ION IS COMPUTATION OF CAPITAL GAIN. ACCORDING TO THE LD. D.R., THERE WAS A SURVEY UNDER 2 I.T.A. NO.2621/CHNY/17 SECTION 133A OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') IN THE CASE OF M/S PARAMOUNT BUILDERS (CHENNAI) LIMITED ON 05.03.2014. DURING THE COURSE OF SURVEY, IT WAS FOUND THAT THE ASSESSEE ALONG WITH 13 OTHERS HAD ENTERED INTO A JOINT DEVELOPMENT AGREEMENT ON 27.06.2006 WITH M/S P.S. SRIJAN REALTY FOR DEVELOPM ENT OF PROPERTY SITUATED AT NO.137, VELACHERY MAIN ROAD, VELACHERY, CHENNAI-42. ACCORDING TO THE LD. D.R., THE ASSESSEE ALONG WITH 13 OTHERS HANDED OVER 50% SHARE OF TOTAL LAND AREA TO THE DEV ELOPER. IN TURN, THE DEVELOPER HAS TO HAND OVER 1,30,812 SQ.FT. OF C ONSTRUCTED AREA TO THE ASSESSEE AND THE 13 PERSONS. ACCORDING TO T HE LD. D.R., THE ASSESSING OFFICER COMPUTED THE SHORT TERM CAPITAL G AIN SINCE THE HOLDING PERIOD OF THE PROPERTY IS LESS THAN 36 MONT HS. 3. THE LD. D.R. FURTHER SUBMITTED THAT ON APPEAL BY THE ASSESSEE, THE CIT(APPEALS) BY PLACING RELIANCE ON T HE ORDER OF THIS TRIBUNAL IN ANOTHER CO-OWNERS CASE, FOUND THAT THE TRANSFER TOOK PLACE ON THE BASIS OF THE JOINT DEVELOPMENT AGREEME NT DATED 27.06.2006 DURING THE ASSESSMENT YEAR 2007-08 AND N OT DURING THE ASSESSMENT YEAR 2014-15. ACCORDING TO THE LD. D.R. , DURING THE ASSESSMENT YEAR 2007-08, THERE WAS NO PART PERFORMA NCE OF THE CONTRACT. HENCE, THERE WAS NO TRANSFER OF PROPERTY WITHIN THE 3 I.T.A. NO.2621/CHNY/17 MEANING OF 2(47) OF THE ACT. ACCORDING TO THE LD. D.R., THE ASSESSEE ALONG WITH 13 OTHERS ENTERED INTO JOINT DE VELOPMENT AGREEMENT FOR THE PURPOSE OF DEVELOPING BY WAY OF C ONSTRUCTION ON THE LAND, THEREFORE, THERE WAS NO TRANSFER OF OWNER SHIP TOOK PLACE IN THE ASSESSMENT YEAR 2007-08. HENCE, ACCORDING TO T HE LD. D.R., IT HAS TO BE TAXED DURING THE YEAR UNDER CONSIDERATION . WHEN THE ATTENTION OF THE LD. D.R. WAS DRAWN TO THE ORDER OF THIS TRIBUNAL IN ONE OF THE OWNERS IN DCIT V. SHRI SATHAK AHMED SHAW IN I.T.A. NO.401/CHNY/2018 DATED 05.10.2018 WHEREIN IT WAS FO UND THAT THE CAPITAL GAIN IS TAXABLE ONLY IN THE ASSESSMENT YEAR 2007-08 AND NOT IN THE ASSESSMENT YEAR 2014-15, THE LD. D.R. VERY F AIRLY SUBMITTED THAT HE LEAVES THE MATTER TO THE DISCRETION OF THE TRIBUNAL. IN FACT, IN THE ABOVE CASE, THIS TRIBUNAL PLACED ITS RELIANCE O N THE ORDER OF ANOTHER CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE C ASE OF ANOTHER CO- OWNER SHRI SHAFIQ MOHAMMED SHAH IN I.T.A. NO.1331/M DS/2016 DATED 11.05.2017. 4. WE HEARD SHRI D. ANAND, THE LD.COUNSEL FOR THE A SSESSEE ALSO. ACCORDING TO THE LD. COUNSEL, THE ASSESSEE O WNED THE PROPERTY ALONG WITH 13 CO-OWNERS. IN THE CASE OF O NE OF THE CO- OWNERS SHAFIQ MOHAMMED SHAH (SUPRA), THIS TRIBUNAL HAD AN 4 I.T.A. NO.2621/CHNY/17 OCCASION TO CONSIDER THE SAME JOINT DEVELOPMENT AGR EEMENT DATED 27.06.2006 AND FOUND THAT THERE WAS NO TRANSFER OF PROPERTY DURING THE YEAR UNDER CONSIDERATION AND THE TRANSFER, IN F ACT, TOOK PLACE IN ASSESSMENT YEAR 2007-08. ACCORDING TO THE LD. COUN SEL, THIS ORDER OF THIS TRIBUNAL WAS FOLLOWED IN ANOTHER CO-OWNERS CASE IN SHRI SATHAK AHMED SHAW (SUPRA). THEREFORE, ACCORDING TO THE LD. COUNSEL, IN RESPECT OF THE VERY SAME JOINT DEVELOPM ENT AGREEMENT ANOTHER CO-ORDINATE BENCH OF THIS TRIBUNAL FOUND TH AT THERE WAS NO TRANSFER DURING THE YEAR UNDER CONSIDERATION AND TR ANSFER IN FACT TOOK PLACE DURING THE ASSESSMENT YEAR 2007-08. THEREFOR E, CAPITAL GAIN, IF ANY, HAS TO BE ASSESSED ONLY IN THE ASSESSMENT Y EAR 2007-08. HENCE, ACCORDING TO THE LD. COUNSEL, THE CIT(APPEAL S) HAS RIGHTLY DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. 5. HAVING HEARD THE LD. D.R. AND THE LD.COUNSEL FOR THE ASSESSEE, WE ALSO PERUSED THE RELEVANT MATERIAL AVA ILABLE ON RECORD. ADMITTEDLY, THE ASSESSEE IS ONE OF THE CO- OWNERS OF THE PROPERTY. THERE ARE 13 OTHER CO-OWNERS WHO OWNED T HE VERY SAME PROPERTY. THE JOINT DEVELOPMENT AGREEMENT ENTERED INTO BY THE ASSESSEE AND 13 OTHER PERSONS WAS THE SUBJECT MATTE R OF DISCUSSION BY THIS TRIBUNAL IN THE CASE OF ONE OF T HE CO-OWNERS SHRI 5 I.T.A. NO.2621/CHNY/17 SHAFIQ MOHAMMED SHAH (SUPRA). THIS TRIBUNAL BY AN ORDER DATED 11.05.2017 IN I.T.A. NO. 1331/MDS/2016 FOUND THAT T HE TRANSFER OF PROPERTY TOOK PLACE IN THE ASSESSMENT YEAR 2007-08 AND NOT IN THE ASSESSMENT YEAR 2014-15, THEREFORE, THERE CANNOT BE ANY ASSESSMENT OF CAPITAL GAIN DURING THE YEAR UNDER CO NSIDERATION. THIS ORDER OF THE TRIBUNAL IN SHAFIQ MOHAMMED SHAH (SUPRA) WAS SUBSEQUENTLY FOLLOWED BY ANOTHER CO-ORDINATE BENCH IN ANOTHER CO- OWNERS CASE IN SHRI SATHAK AHMED SHAW (SUPRA). TH EREFORE, THE TWO CO-ORDINATE BENCHES OF THIS TRIBUNAL EXAMINED T HE VERY SAME JOINT DEVELOPMENT AGREEMENT IN THE CASE OF THE CO-O WNERS AND FOUND THAT THERE WAS NO TRANSFER DURING THE YEAR UN DER CONSIDERATION. IN VIEW OF THE DECISION OF CO-ORDIN ATE BENCHES OF THIS TRIBUNAL HOLDING THAT THE TRANSFER IN FACT TOOK PLA CE DURING THE ASSESSMENT YEAR 2007-08 AND NOT DURING THE ASSESSME NT YEAR UNDER CONSIDERATION, THIS TRIBUNAL IS OF THE CONSID ERED OPINION THAT THE CIT(APPEALS) HAS RIGHTLY FOLLOWED THE ORDER OF THIS TRIBUNAL. HENCE, THIS TRIBUNAL DO NOT FIND ANY REASON TO INTE RFERE WITH THE ORDER OF THE LOWER AUTHORITY AND ACCORDINGLY THE SA ME IS CONFIRMED. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE S TANDS DISMISSED. 6 I.T.A. NO.2621/CHNY/17 ORDER PRONOUNCED IN THE COURT ON 31 ST MAY, 2019 AT CHENNAI. SD/- SD/- ( ! ' # ) ( . . . ) (INTURI RAMA RAO) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 7 /DATED, THE 31 ST MAY, 2019. KRI. 0 .389 :9*3 /COPY TO: 1. ,- /APPELLANT 2. ./,- /RESPONDENT 3. 2 ;3 () /CIT(A)-4, CHENNAI-34 4. PRINCIPAL CIT- 5, CHENNAI 5. 9< .3 /DR 6. =) > /GF.