ITO 16(1)(1), MUMBAI V. LATE SHRI RAMESH F SINGHAL, L/H SMT. VEENA R SINGHAL, MUMBAI

ITA 2682/MUM/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62319 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-05-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2007-2008
• Appeal Filed On: 07-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D S SUNDER SINGH
• Assessee Lawyers: D J SHUKLA
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Cost of acquisition; Fair market value; Competent authority
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D , MUMBAI BEFORE : SHRI P. M. JA GTAP, ACCOUNTANT MEMBER & SHRI AMIT SHUKLA, JUDICIAL MEMBER ITA NO.2682 /MUM/2011 ASSESSMENT YEAR: 2007-2008 ITO-16(1)(1), MUMBAI LATE SHRI RAMESH F. SINGHAL, L/H SMT. VEENA R. SINGHAL, 2-A, WOODLANDS, 67, PEDDAR RD, MUMBAI-400 026 PAN NO.AALPS7324J APPELLANT-REVENUE VS. RESPONDENT-ASSESSEE A N D C.O.NO.178/MUM/2011 ASSESSMENT YEAR: 2007-2008 LATE SHRI RAMESH F. SINGHAL, L/H SMT. VEENA R. SINGHAL, 2-A, WOODLANDS, 67, PEDDAR RD, MUMBAI-400 026 PAN NO.AALPS7324J ITO-16(1)(1), MUMBAI CROSS OBJECTOR VS. RESPONDENT-REVENUE APPELLANT-ASSESSEE BY : MR. D.J.SHUKLA RESPONDENT-REVENUE BY : MR. D.S.SUNDER SINGH DATE OF HEARING : 24 TH APRIL 2012 DATE OF PRONOUNCEMENT : 11 TH MAY 2012 O R D E R PER AMIT SHUKLA (J.M.) : THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER DATED 9-12-2010, PASSED BY THE CIT( A)-27, MUMBAI FOR THE QUANTUM OF ASSESSMENT PASSED UNDER SECTIONS 143 (3) FOR THE ASSESSMENT YEAR ITA NO.2682/M/11 2 & CONO.178/MUM/2011 2007-2008. THE ASSESSEE HAS ALSO FI LED A CROSS OBJECTION AGAINST THE SAME ORDER. THE REVENUE HAS RAISED FOLLOWING GROUND IN ITS APPEAL :- 1. THE LD. CIT(A) ERRED IN HOL DING THAT THE PROVISIONS OF SECTION 50-C OF THE I.T. ACT, 1961 ARE NOT APPLICABLE FOR THE A.Y. UNDER CONSIDERATI ON WHEREAS THE ASSESSEE HAS OFFERED LONG TERM CAPITAL GAIN IN THE YEAR UNDER CONSIDERATION. 2 . BRIEF FACTS APROPOS THIS GROUND IS THAT THE ASSESSEE ALONG WITH HIS WIFE SMT. VEENA R. SINGHAL INHER ITED A PLOT OF LAND IN PUNE FROM HIS IN-LAWS SIDE. THE ASSESSEES FATHER-IN-LAW MR. ARJUN DAS DHINGRA HAD PURCHASED A PLOT OF LAND AT ER ANDAVANE, PUNE IN THE YEAR 1953. HE DIED INTESTATE ON 25 TH JUNE, 1976 LEAVING BEHIND HIS WIFE, SON AND A MARRIED DAUGHTER. AS PER THE ORDER OF THE HONBLE BOMBAY HIGH COURT, SMT. DAYAWATI DHINGRA, WIFE OF LATE SHRI ARJUNDAS DHINGRA WAS APPOINTED AS ADMINISTRATIX AND EXECUTRIX OF THE SAID PROPERTY. SMT. DAYAWATI DHINGRA DURING HER LIFETIM E SOLD PART OF THE SAID LAND AD MEASURING 1000 SQ.MTRS. IN RESPECT OF BALANCE LAND OF 2136 SQ.MTRS., WHICH WAS DECLARED AS SURPLUS VACANT LAND BY THE COMPETENT AUTHORITY PUNE UNDER THE URBAN LAND CEILING ACT, SHE NOMINATED M/S HINDUSTAN BUILDERS, A PARTNERSHIP FIRM AS A DEVELOPER. HOWEVER, BEFORE THIS COULD MATERIALISE, SMT.DAYAWATI DHINGRA EXPIRED ON 28-7-1986, SURVIVED BY HER DAUGHTER SMT. VEENA R.SINGHAL AND SON SHRI SWADESH KUMAR DHINGRA. THE ENTIRE PROPERTY WAS EQUALLY DIVIDED BY THEM, I.E., BOTH GOT 50% OF THE SHARE. LATER ON MR. SWADESH KUMAR EXECUTED A DEED ITA NO.2682/M/11 3 & CONO.178/MUM/2011 OF RENUNCIATION OF SHARE IN THE PROPERTY IN FAVOUR OF HIS BROTHER-IN-LAW I.E. THE ASSESSEE AND HIS SISTER SMT. VEENA R. SINGHAL EQUALLY. THUS, THE ASSESSEE INHERITED 25% SHARE AND HIS WIFE HAD 75% SHARE IN THE SAID PROPERTY. THE ASSESSEE AND HIS WIFE ENTERED INTO A FORMAL AGREEMENT DATED 3-5-1988 FOR TRANSFERRING THE DEVELOPMENT RIGHTS IN THE AFORESAID PROPERTY TO M/S HINDUSTAN BUILDERS AS A DEVELOPER, THROUGH ITS PARTNER M/S DILIP VISHWANATH MEHENDALE. AS PER THE AGREEMENT, THE DEVELOPMENT RIGHTS OF THE SAID PROPERTY WERE TRANSFERRED FOR A CONSIDERATION OF RS.2,00,000/- AND THE ASSESSEE AND HIS WIFE RECEIVED SUM OF RS.1,85,000/- OUT OF THE ABOVE SAID CONSIDERATION AT THE TIME OF EXEC UTION OF THE AGREEMENT AND REMAINING AMOUNT OF RS.15,000/- WAS AGREED TO BE PAID AT THE TIME OF EXECUTING THE FINAL SALE DEED. UNDER THE SAID AGREEMENT THE DEVELOPER M/S HINDUSTAN BUILDERS WAS GIVEN FULL POSSESSION OF THE SAID LAND AND ALSO THE ABSOLUTE DEVELOPMENT RIGHTS FO R THE DEVELOPMENT UPON THE SAID LAND. ON THE DATE OF AGREEMENT ITSE LF I.E. ON 3-5-1988. IRREVOCABLE POWER OF ATTORNEY WAS ALSO EXECUT ED IN FAVOUR OF THE PURCHASER, M/S HINDUSTAN BUILDERS, WHICH WAS REGISTERED WITH THE SUB REGISTRAR ON THE SAID DATE ITSELF. THUS, THE ENTIRE RIGHTS IN RESPECT OF THE SAID LAND WAS TRANSFERRED TO DEVELOPER AND IT CONTINUED UPTO THE POSSESSION OF THE DEVELOPERS SINCE THEN. THEREAFTE R THE ASSESSEE SUFFERED MULTIPLE SERIOUS HEALTH PROBLEM. THE DEVELOPERS INSISTED UPON EXECUTING THE CONVEYANCE DEED AS EARLY AS POSSI BLE. THE ASSESSEE INSISTED THE ITA NO.2682/M/11 4 & CONO.178/MUM/2011 PURCHASER TO PAY EXTRA CONSIDERAT ION FOR EXECUTING THE CONVEYANCE DEED. AFTER PROLONGED INITIATION, IT WAS MUTUALLY AGREED THAT AN AMOUNT OF RS.20,00,000/- WOULD BE PAID IN STEAD OF RS.15,000/-, WHICH WAS PAYABLE AS PER THE AGREEMENT DATED 3-5-1988. ACCORDINGLY, THE ASSESSEE AND HIS WIFE RECEIVED AN AMOUNT OF RS.20,00,000/- WHICH WAS DIVIDED BETWEEN THE ASSESSEE AND HIS WIFE AS PER THEIR SHARE AT RS.5,00,000/- AND RS.15,00,000/- RESPECTIVELY. THE ASSESSEE COMPUTED THE LONG TERM CAPITAL GAIN FROM THE SAID TRANSACTIONS BY ADOPTING AN AMOUNT OF RS.5,00,000/- AS SALE CONSIDERATION AND WORKED OUT THE COST OF ACQUISITION AFTE R TAKING THE FAIR MARKET VALUE AS ON 1-4-1981. 3. THE ASSESSING OFFICER HELD THAT TRANSFER ITSELF HAS TAKEN PLACE IN THE ASSESSMENT YEAR 2007-2008, AS THE ASSESSEE HIMSELF HAS COMPUTED LONG TERM CAPITAL GAIN IN THIS YEAR. HE ALSO INVOKED THE PROVISIONS OF SECTION 50C TO ADOPT THE SALE VALUE FOR THE ENTIRE LAND. ACCORDINGLY, HE TOOK THE MARKET PRIC E OF THE LAND AS PER THE VALUATION BY STAMP VALUATION AUTHORITY, WHICH WAS DETERMINED AT ` .1,27,69,872/- AND COMPUTED THE LONG TERM CAPITAL GAIN AT RS.62,35,836/-, BEING THE SHARE OF T HE ASSESSEE. SO FAR AS THE EXCESS AMOUNT OF RS.19,85,000/- RECEIVED BY THE ASSESSEE, THE ASSESSING OFFICER TREATED THE SAME AS INCOME FROM OTHER SOURCES. THE ASSESSING OFFICER HAS FURTHER HELD THAT THE ASSESSEES SHARE WOULD BE 50% AS ITA NO.2682/M/11 5 & CONO.178/MUM/2011 THE PROPERTY HAS DEVOLVED ON TWO LEGAL HEIRS AFTER THE DEATH OF SMT. DAYAWATI DHINGRA AND UPON RELINQUISHMENT OF 1/4 TH RIGHTS IN THE PROPERTY BY MR. SWADESH DHINGRA, BROT HER-IN-LAW OF THE ASSESSEE, THE ASSESSEES SHARE HAS BECOME HALF (50%). 4 . LEARNED CIT(A), FIRST OF ALL, HELD THAT THE ASSESSEES SHARE WOULD BE ONLY 25% AS THE ASSESSEE HAS NOT RECEIVED ANYTHING FROM THE MOTHER-IN-LAW BUT ONLY HALF OF THE SHARE FROM HIS BROTHER-IN-LAW WHICH COMES TO 25% ONLY. SO FAR AS THE APPLICATION OF SECTION 50C, THE CIT(A) HELD THAT IT HAS NO APPLICAT ION IN THE PRESENT CASE AS THE TRANSFER OF THE CAPITAL ASSET TOOK PLACE IN THE FINANCIAL YEAR 1988-1989, RELEVANT TO ASSESSMENT YEAR 1989-1990, WHEN THE AGREEMENT BETWEEN THE ASSESSEE (ALONG WITH HIS WIFE) AND DEVELOPER HAD TAKEN PLACE ON 3-5-1988. HE HELD THAT CAPITAL GAIN IF ANY WILL ARISE FROM THE SAID DATE OF AGREEMENT AND WOULD BE TAXABLE IN THE ASSESSMENT YEAR 1989-1990 ONLY. THEREFORE, THE PROVISION OF SE CTION 50C WILL NOT BE APPLICABLE IN THE CASE OF THE ASSESSEE AS IT WAS BROUGHT IN THE STATUTE W.E.F. 1-4- 2003. THE FINAL CONCLUSION OF T HE LEARNED CIT(A) ARE REPRODUCED HEREIN BELOW :- THE APPELLANT HAS TAKEN THE GROUND NOS.2, 3 & 4 THAT THE PROPERTY WAS TRANSFERRED IN 1988 ITSELF AND THEREFORE THE PROVISIONS OF SECTION 50C HAVE NO APPLICATION AT PRESENT AND ACCORDINGLY, THE AOS COMPUTATION OF LTCG BE REJECTED. I HAVE CAREFULLY CONSIDERED THE SUBM ISSIONS MADE BY THE APPELLANT. HAVING REGARD TO THE CONTENTS OF THE ARTICLE OF AGREEMENT ITA NO.2682/M/11 6 & CONO.178/MUM/2011 EXECUTED ON 3 RD MAY, 1988 AND SUBSEQUENT EXECUTION OF IRREVOCABLE POWER OF ATTORNEY , HANDING OVER THE POSSESSION FOR THE PROPERTY TO THE DEVELOPER, AND THE FACT THAT THE DEVELOPER CONTINUE TO HAVE THE POSSESSION OF THE SAME AND MADE EFFORTS TO OBTAIN VARIOUS PERMISSIONS TO DEVELOP THE PROPERTY ETC., I HOLD THAT THE TRANSFER OF THE IMPUGNED CAPITAL ASSET TOOK PLACE IN THE F.Y. RELEVANT TO A.Y. 1989-90 ITSELF. IN SUCH A SITUATION, THE CAPITAL GAINS IF ANY ARISING FROM THE SAID TRANSACTION ARE TAXABLE IN THE A.Y. 1989-90 ONLY. THUS, THE TRANSACTION HAVING BEEN CONCLUDED IN ALL ITS FINER ASPECTS, THE FORMAL CONVEYANCE OF THE PROPERTY BY SINGING THE SALE DEED IS ONLY INCIDENTAL TO THE SAID CONCLUDED TRANSACTION. SECONDLY, THE PROVISIONS OF SECTION 50C ARE BROUGHT ON STATUTE AND MADE APPLICABLE FOR THE CAPITAL ASSETS TRANSFERRED ON OR AFTER 1.4.2003, I.E. MUCH LATER TO THE TRANSFER OF THE IMPUGNED PROPERTY. IN VIEW OF THE ABOVE DISCUSSIONS, I HOLD THAT AT THE FIRST INSTANCE, THE C APITAL GAINS FROM THE TRANSACTION UNDER CONSIDERATION ARE TAXABLE IN A.Y. 1989-90 ONLY AND THEREFORE, OFFERING OF THE CAPITAL GAINS TO TAX BY THE APPELLANT IN A.Y. UNDER CONSIDERATION IS NOT CORRECT. AS A LOGICAL COROLLARY TO THIS, I FURTHER HOLD THAT THE PROV ISIONS OF SECTION 50C ARE NOT APPLICABLE IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE. THEREFORE, THE COMPUTATION OF THE CAPITAL GAINS MADE BY THE AO IS NOT IN ORDER AND ACCORDINGLY, THE SAME IS DELETED. THE APPELLANT SUCCEEDS ON THIS GROUND. 5. LEARNED SR. DR ON BEHALF OF THE DEPAR TMENT SUBMITTED THAT THE CAPITAL GAIN WOULD ARISE IN TH E ASSESSMENT YEAR 2007-2008 WHEN THE FINAL CONVEYANCE DEED WAS EXECUTED AS IT WAS IN THIS YEAR THE PROPERTY CAN BE CONSIDERED TO BE SOLD WHEN THE ASSESSEE RECEIVED FINAL CONSIDERATION. THE ACTION OF T HE ASSESSING OFFICER ALSO STANDS APPROVED BY THE FACT THAT THE ASSESS EE ITSELF HAS OFFERED THE CAPITAL ITA NO.2682/M/11 7 & CONO.178/MUM/2011 GAIN ON THE AMOUNT RECEIVED DURING THE YEAR IN RESPECT OF SAME TRANSACTION OF THE LAND WHICH WA S ENTERED ON 3-5-1988. HE FURTHER SUBMITTED THAT IF THE CAPITAL GAIN HAS ARISEN IN THE ASSESSMENT YEAR 1989-90, WHY THE ASSESSEE HAS NOT O FFERED ANY CAPITAL GAIN IN THAT YEAR, AND THEREFORE, THE AGREEMENT ENTERED EARLIER IN FINANCIAL YEAR 1988-1989 CANNOT CONSTITUTE SALE AND TRANSFER OF PROPERTY. ONCE THE PROPERTY HAS BEEN SOLD IN A.Y.2007-2008, THE PROVISION OF SECTION 50C THUS WOULD BECOME APPLICABLE. LASTL Y, HE, RELIED UPON THE FINDING AND THE REASONING GIVEN BY T HE ASSESSING OFFICER. 6 . PER CONTRA , LEARNED COUNSEL ON BEHALF OF THE ASSESSEE SUBMITTED THAT IN THE CASE OF T HE ASSESSEES WIFE I.E. SMT. VEENA SINGHAL, THE ASSESSING OFFICER AFTER RAISING SIMILAR QUERY HAS ACCEPTED THE FACT THAT THE TRANSFER OF CAPITAL ASSET TOOK PLACE IN THE ASSESSMENT YEAR 1989-90 AND THE PROVISIONS OF SE CTION 50C IS NOT APPLICABLE. HE SUBMITTED THAT OTHERWISE ALSO VIDE AGREEMENT DATED 3-5-1988, THE ENTIRE POSSESSION AND RIGHT WAS GIVEN AND THERE WAS IRREVOCABLE POWER OF ATTORNEY GIVEN TO THE DEVEL OPER, WHICH, ITSELF SHOWS THAT THE ENTIRE INTEREST IN THE PROPERTY WAS TRANSFERRED IN THE ASSESSMENT YEAR 1989-90. HE, THEREFORE, VEHEMENTLY RELIED UPON THE FINDING OF THE CIT(A) GIVEN ON THIS SCORE. 7 . WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL ON RECORD AS WELL AS THE FINDING GIVEN IN THE IMPUGNED ORDERS. ITA NO.2682/M/11 8 & CONO.178/MUM/2011 SO FAR AS THE FACTS WHICH HAVE BEEN NARRATED ABOVE THEY ARE NOT IN DISPUTE. ONLY ISSUE IN THE DEPARTM ENTAL APPEAL IS WHETHER LONG TERM CAPITAL GAIN HAS ARISEN IN THE ASSESSMENT YEAR 2007-2008 OR IN THE ASSESSMENT YEAR 1989-1990 AND C ONSEQUENTLY THE PROVISIONS OF SECTION 50C WOULD BE APPLICABLE OR NOT. FROM THE PERUSAL OF THE RECORD, IT IS SEEN THAT THE ASSE SSEE AND HIS WIFE HAD ENTERED INTO AN AGREEMENT DATED 3-5-1988 BY WHICH THE ENTIRE RIGHTS AND POSSESSION WAS HANDED OVER TO THE DEVELOPERS M/S HINDUSTAN BUILDERS. LET US NOW EXAMINE THE VARIOUS CLAUSES OF THE AGREEMENT TO SEE WHETHER THERE WAS EXTINGUISHMENT OF RI GHTS IN THE SAID PROPERTY :- (I) AS PER THE CLAUSE 1 OF THE AGREEMENT, THE OWNERS GRANTED ABSOLUTE DEVELOPMENT RIGHTS AND TO EXPLOIT THE FULL F.S.I. OF THE SAID PLOT OF LAND ADMEASURING 2136 SQ.MTRS. TO M/S HINDUSTAN BUILDERS. (II) CLAUSES 2 & 3 PROVIDE THAT THE DEVELOPER SHALL PURSUE WITH THE GOVERNMENT AUTHORITIES IN RESPECT OF THE SAID SCHEME OR ANY REVISED/MODIFIED SCHEME AND FURTHER PREPARE A FRESH PLAN, IF NECE SSARY, FOR THE CONSTRUCTION OF BUILDINGS ON THE SAID PLOT AND SUBMIT THEM TO THE LOCAL GOVERNMENT/PUNE MUNICIPAL CORPORATION FOR APPROVAL AND CONSTRUCT RESIDENTIAL FLATS FOR SALE ON OWNERSHIP BASIS. ITA NO.2682/M/11 9 & CONO.178/MUM/2011 (III) AS PER CLAUSE 4, THE DEVELOPER IS EMPOWERED AND AUTHOSRISED TO EXPLOIT THE FULL F.S.I. ACCORDING TO THE BUILDING REGULATIONS AND MODIFY THE PLANS, IF NECESSARY, AND HE IS FURTHER ENTITLED AND AUTHORISED TO TRANSFER THE DEVELOPMENT RIGHTS TO PERSONS OF HIS CHOICE WITHOUT THE CONSENT OF THE OWNERS. (IV) IN CLAUSE 5, THE DEVELOPER MAY ENTER INTO AGREEMENTS WITH THE PROSPECTIVE PURCHASERS OF FLATS AND RECEIVE CONSIDERATION THEREOF. (V) AS PER CLAUSE 7, THE OW NERS HAVE TO EXECUTE AN IRREVOCABLE POWER OF ATTORNEY IN FAVOUR OF THE DEVELOPER TO CARRY OUT THE SCH EME AND TO SELL THE FLATS ON OWNERSHIP BASIS. (VI) AS PER CLAUSE 8, THE DEVELOPER HAD AGREED TO PAY A SUM OF ` .2,00,000/- TOWARDS PART PERFORMANCE OF THIS AGREEMENT OUT OF WHICH ` .1,85,000/- WAS PAID ON 2-5- 1988 AND REMAINING AMOUNT OF ` .15,000/- COULD BE PAYABLE ON THE DATE OF FINAL SALE DEED. (VII) IN CLAUSE 9, IT WAS PROVIDED THAT THE OWNERS SHALL HAVE NO RIGHT TO CLAIM ON ANY ADDITIONAL PROFITS IN THE ENTIRE SCHEME. 7.1 FROM THE PERUSAL OF THE AGREEMENT, IT IS EVIDENT THAT THERE WAS A SPECIFIC PERFORMANCE BY WHICH T HE ASSESSEE AND HIS WIFE HAVE GIVEN ITA NO.2682/M/11 10 & CONO.178/MUM/2011 ABSOLUTE RIGHT AND POSSESSION TO THE DEVELOPERS AND SUCH AN ABSOLUTE ASSIGNING OF RIGHT IN THE LAND AMOUNTS TO TRANSFER WITHIN THE MEANING OF SECTION 2(47) OF THE I.T. ACT. SUB-SECTION 14 OF SECTION 2, DEFINES CAPITAL ASSET WHICH MEANS PROPERTY OF ANY KIND HELD BY AN ASSESSEE, WHETHER OR NOT CONNECTED WITH THE BUSINESS OR PROFESSION. THE WORD PROPERTY USED IN SECTION 2 (14) IS A WORD OF THE WIDEST AMPLITUDE. ANY RIGHT WHICH CAN BE CALLED PROPERTY W ILL BE INCLUDED IN THE DEFINITION OF CAPITAL ASSET. AS PER THE DEFINITION GIVEN IN SECTION 2(47), THE TRANSFER ALSO INCLUDES EXTINGUISHMENT OF ANY RIGHT IN A CAPITAL ASSET. THUS, WHEN THE ASSESSEE ENTERED INTO THE AFORESAID AGREEMENT ON 3-5-1988, HE HAS TRANSFERRED HIS ABSOLUTE RIGHT ON THE SAID LAND AND, THEREFORE, THE TRANSFER OF THE CAPITAL ASSET (I.E. PLOT) TOOK PLACE ONLY IN THE FINANCIAL YEAR 1988-1989 I.E. IN T HE A.Y.1989-90 AND NOT IN A.Y. 2007- 2008. IN THE IMPUGNED ASSESSMENT YEAR, THE ASSESSEE HAD ONLY SIGNED THE CONVEYANCE DEED FOR THE FINAL SALE OF THE PLOT WHICH WAS IN PURSUANCE OF EARLIER AGREEMENT AND TH IS CANNOT BE HELD TO BE THE DATE OF TRANSFER IN THE PRESENT CASE AS THE ASSESSEE HAD ALREADY TRANSFERRED THE ENTIRE RIGHT AND GIV EN FULL POSSESSION WAY BACK IN MAY, 1988. THE FINDING GIVEN BY THE CIT(A) THAT THE CAPITAL GAIN WOULD ARISE IN THE ASSESSMENT YEAR 1989-90 DOES NOT SUFFER FROM ANY LEGAL INFIRMITY. ITA NO.2682/M/11 11 & CONO.178/MUM/2011 7.2 ONCE IT HAS BEEN HELD THAT THE TRANSFER HAD TAKEN PLACE IN THE ASSESSMENT YEAR 1989-90 AND LONG TERM CAPITAL GAIN IS TAXABLE IN THE YEAR 1989-1990, IPSO FACTO IT LEADS TO A CONCLUSION THAT PROVISIONS OF SECTION 50C WILL NOT BE APPLICABLE AS THIS SECTION HAS BEEN BROUGHT IN THE STATUTE W.E.F. 1-4-2003 I.E. FROM THE ASSESSMENT YEAR 2003-2004. IN VIEW OF THE ABOVE THE FINDING GIV EN BY THE CIT(A) ON THIS SCORE ARE UPHELD. IN THE RESULT APPEAL FILED BY THE DEPARTMENT IS DISMISSED . 8. IN THE CROSS OBJECTION , THE ASSESSEE HAS CHALLENGED THE TAXABILITY OF AMOUNT OF ` .4,96,250/- RECEIVED BY THE ASSESSEE IN THE RELEVANT FINANCIAL YEAR AS A CONSIDERATION FOR SINGING OF CONVEYANCE DEED AS INCOME FROM OTHER SOURCES INSTEAD OF LONG TERM CAPITAL GAIN. THE CIT(A) HAS CONFIRMED THE A CTION OF THE ASSESSING OFFICER IN TREATING THE AMOUNT RECEIVED FROM THE DEVELOPER AT THE TIME OF SIGNING OF CONVEYANCE DEED AS TAXABLE INCOME IN THIS YEAR AS CASUAL INCOME WHICH IS TO BE TAXED AS INCO ME FROM OTHER SOURCES. 9. SINCE WE HAVE ALREADY HELD ABOVE T HAT THE TRANSFER OF THE CAPITAL ASSET HAS TAKEN PLACE ON 3-5-1988 I.E. IN THE ASSESSMENT YEAR 1989- 90, THE LONG TERM CAPITAL GAIN WOULD BE COMPUTED/TAXED IN THE ASSESSMENT YEAR 1989-90 ONLY, THER EFORE WHAT THE ASSESSEE HAS RECEIVED IN THIS YEAR, IS FLOWING FROM THE SAME TRANSACTION ONLY. THE SOURCE OF RECEIPTS RECEIVED DURING T HE YEAR WILL RELATE BACK TO SAME TRANSACTION, EXCEPT FOR THE FACT THAT AFTER THE NEGOTIATION AT THE TIME OF ITA NO.2682/M/11 & CONO.178/MUM/2011 12 SIGNING FINAL CONVEYANCE DEED THE C ONSIDERATION HAS INCREASED AND INCREASED AMOUNT HAS BEEN RECEIVED BY THE ASSESSEE IN THIS YEAR. ONCE THIS RECEIPT IS ARISING OUT OF TR ANSFER OF AN ASSET ONLY, IT WOULD BE TAXED UNDER THE HEAD LONG TERM CA PITAL GAIN AND NOT INCOME FROM OTHER SOURCES. ACCORDINGLY, THE GROUND TAKEN BY THE ASSESSEE IN CROSS OBJECTION IS ALLOWED. 10. IN THE RESULT APPEAL OF THE DEPARTMENT IS DISMISSED AND THE CROSS OBJECTION FILED BY T HE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THIS 11 TH DAY OF MAY, 2012. SD/- SD/- ( P.M.JAGTAP ) ( AMIT SHUKLA ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DT: 11 TH MAY, 2012 COPY FORWARDED TO : 1. THE APPELLANT, 2. THE RESPONDENT, 3. THE C.I.T. 4. CIT (A) 5. THE DR, B - BENCH, ITAT, MUMBAI //TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI PKM