Popular Estate Management Ltd.,(Previously known as pioneer Technopark Ltd), Ahmedabad V. The Dy.CIT, Circle-3(1)(1), Ahmedabad

ITA 2703/AHD/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 9107 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 1 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 20-11-2019
• Assessment Year: 2012-2013
• Appeal Filed On: 04-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUBHAS BAIN
• Assessee Lawyers: NUPUR SHAH A RS
• Keywords: Unexplained cash credit; Related party transaction; Capital asset; Business income; Additional evidence; Question of law; Fair market value; Capital receipt; Set aside; Capital Gains
• Section: 2(14); 48; 13; 68; 6

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ./ITA NO. 2703/AHD/2017 ( / ASSESSMENT YEAR : 2012-13) POPULAR ESTATE MANAGEMENT LTD. (PREVIOUSLY KNOWN AS PIONEER TECHNOPARK LTD.) 81, NEW YORK TOWER A OPP. MUKTIDHAM DERASAR SG HIGHWAY THALTEJ CROSS ROAD AHMEDABAD -380 054 / VS. THE DCIT CIRCLE-3(1)(1) AHMEDABAD ./ ./ PAN/GIR NO. : AABCM 0617 P ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI DHIREN SHAH & SHRI NUPUR SHAH, ARS / RESPONDENT BY : SHRI SUBHAS BAIN CIT-DR / DATE OF HEARING 20/11/2019 !'# / DATE OF PRONOUNCEMENT 08/01/2020 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TA X (APPEALS)9, AHMEDABAD [CIT(A) IN SHORT] VIDE APPEAL NO.CIT(A)-9 /121/DCIT.CIR- 3(1)(1)/15-16 DATED 25/10/2017 ARISING IN THE A SSESSMENT ORDER PASSED UNDER S.143(3) OF THE INCOME TAX ACT, 1961(HEREINA FTER REFERRED TO AS 'THE ACT') DATED 27/03/2015 RELEVANT TO ASSESSMENT YEAR (AY) 2012-13. ITA NO.2703/AHD/2017 POPULAR ESTATE MANAGEMENT LTD. VS. DCIT ASST .YEAR - 2012-13 - 2 - THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL:- 1. THE LD.CIT(A) HAS GROSSLY ERRED IN LAW AND ON FA CTS IN DISMISSING THE APPEAL. HE OUGHT TO HAVE ALLOWED THE APPEAL FULLY IN ACCORDANC E WITH THE GROUNDS OF APPEAL RAISED BY THE APPELLANT BEFORE HIM. I. ADDITION ON ACCOUNT OF ALLEGED UNEXPLAINED CASH CREDIT U/S.68 OF THE I.T.ACT, 1961 ON ACCOUNT OF RELINQUISHMENT OF RIGHT RS.18,02,53 ,000/-. 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS I N CONFIRMING THE ADDITION OF RS.18,02,53,000/- AS MADE BY THE LD.A.O. WHILE TREA TING THE COMPENSATION RECEIVED FOR RELINQUISHMENT OF RIGHT TO SUE AS TAXABLE BUSIN ESS INCOME AND ACCORDINGLY REVENUE RECEIPT AS AGAINST THE4 CAPITAL RECEIPT NOT ASSESSABLE EITHER AS CAPITAL GAINS OR BUSINESS INCOME. 2. THAT THE LD.CIT(A) HAS FAILED TO CONSIDER T HE FACT THAT THE RIGHTS ACQUIRED BY THE APPELLANT COMPANY UNDER DIFFERENT DEVELOPMENT A GREEMENTS WAS A RIGHT TO SUE AND AS PER THE PROVISIONS OF SECTION 6(E) OF THE TR ANSFER OF PROPERTY ACT, RIGHT TO SUE IS NOT A PROPERTY AND THEREBY IT IS NOT A CAP ITAL ASSET AND AS A CONSEQUENCE, IMPUGNED RECEIPT OF RS.18,02,53,000/- RECEIVED AS C OMPENSATION/DAMAGES FOR RELINQUISHMENT OF RIGHT TO SUE IN THE COURTS OF LAW IS A CAPITAL RECEIPT IN THE HANDS OF THE APPELLANT COMPANY NOT ASSESSABLE EITHER AS C APITAL GAINS OR BUSINESS INCOME IN VIEW OF THE HONBLE JURISDICTIONAL GUJARAT HIGH JUR ISDICTIONAL HIGH COURT IN THE CASE OF (I) BARODA CEMENT & CHEMICALS LTD VS. CIT 1 58 ITR 636 (GUJ.), (II) CIT VS. HIRALAL MANILAL MODY 131 ITR 421 (GUJ.), (III) HON BLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. ASHOKA MARKETING LTD. 164 ITR 664 ( CAL.), (IV) CIT VS. J. DALMIA 149 ITR 215 (DEL.) & (V) SATYAM FOOD SPECIALTIES (P) LT D. VS. DCIT, CENTRAL CIRCLE-2, JAIPUR [2015] 57 TAXMANN.COM 194. 3. THE LD.CIT(A) HAS GROSSLY ERRED IN LAW AND ON FACTS IN FAILING TO CONSIDER THE FACT THAT HONBLE ITAT, AHMEDABAD A BENCH IN THE CASE OF APPELLANT COMPANYS OWN CASE RENDERED THE APPELLATE ORDER VIDE ITA NO.212/A HD/2014 DATED 29/08/2017 FOR AY 2009-10, WHEREIN, THE COMPENSATION FOR RELINQUIS HMENT OF RIGHT TO SUE WAS THE GROUNDS OF APPEAL BEING THE SAID COMPENSATION WHETH ER SUBJECT TO TAX OR NOT WAS THE ISSUE AND THE HONBLE ITAT, AHMEDABAD, A BENCH HA S ALLOWED THE APPEAL OF THE APPELLANT COMPANY IN FAVOUR OF THE APPELLANT COMPAN Y BY HOLDING THAT THE AMOUNT RECEIVED AS A CAPITAL RECEIPT NOT ASSESSABLE EITHER AS A CAPITAL GAIN OR BUSINESS INCOME IN VIEW OF THE HONBLE JURISDICTIONAL HIGH C OURT IN THE CASE OF (I) BARODA CEMENT & CHEMICALS LTD. VS. CIT 158 ITR 636 (GUJ.), (II) CIT VS. HIRALAL MANILA I MODY 131 ITR 421 (GUJ.), (II) HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. ASHOKA MARKETING LTD. 164 ITR 664 (CAL.), (IV) CIT VS. J. DALMIA 149 ITR 215 (DEL.) & (V) SATYAM FOOD SPECIALTIES (P) LTD. VS. DCIT, CE NTRAL CIRCLE-2, JAIPUR [2015] 57 TAXMANN.COM 194 AND THEREBY DELETED THE ADDITION AS MADE BY THE LD. A.O. IN THE ASSESSMENT ORDER AND COPY OF THE HONBLE ITAT ORDER DATED 29/08/2017 FOR AY 2009- 10 HAS ALREADY BEEN PROVIDED TO THE LD.CIT(A) IN TH E APPELLATE PROCEEDINGS. ITA NO.2703/AHD/2017 POPULAR ESTATE MANAGEMENT LTD. VS. DCIT ASST .YEAR - 2012-13 - 3 - THE APPELLANT COMPANY RESERVES ITS RIGHT TO ADD, AM END, ALTER OR MODIFY ANY OF THE GROUNDS STATED HEREINABOVE EITHER BEFORE OR AT THE TIME OF HEARING. PRAYER THE APPELLANT THEREFORE RESPECTFULLY PRAYS THAT :- 1. THE ADDITION OF RS.18,02,53,000/- ON ACCOUNT OF AL LEGED UNEXPLAINED CASH CREDIT U/S.68 OF THE I.T.ACT, 1961 CONFIRMED BY THE LD.CIT(A) MAY KINDLY BE DELETED. 2. SUCH AND FURTHER RELIEF AS THE NATURE AND CIRCUMSTA NCES OF THE CASE MAY JUSTIFY. THE EFFECTIVE GROUND OF APPEAL RAISED BY THE ASSESS EE IS THAT THE LD. CIT(A) ERRED IN CONFIRMING THE ORDER OF THE AO BY T REATING THE CAPITAL RECEIPT OF RS. 18,02,53,000/- AS INCOME OF THE ASSE SSEE. 2. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IN T HE PRESENT CASE IS A LIMITED COMPANY AND ENGAGED IN THE BUSINESS OF CONSTRUCTION AND ENGINEERING ACTIVITIES. THE AO DURING THE ASSESSMENT PROCEEDING S OBSERVED THAT THE ASSESSEE HAS RECEIVED CERTAIN AMOUNT FOR RELINQUISH MENT OF ITS RIGHT WHICH WAS TREATED AS CAPITAL RECEIPT, NOT CHARGEABL E TO TAX. HOWEVER, THE AO WAS OF THE VIEW THAT SUCH RECEIPT IN THE HANDS O F THE ASSESSEE IS REVENUE RECEIPT AND CHARGEABLE TO TAX. ACCORDINGLY HE SHOW CAUSED THE ASSESSEE VIDE NOTICE DATED 20 TH MARCH 2015 PROPOSING TO TREAT SUCH AMOUNT AS REVENUE RECEIPTS. 2.1. HOWEVER, THE ASSESSEE IN RESPONSE TO SUCH N OTICE DID NOT MAKE ANY SUBMISSION ON MERIT. THEREFORE THE AO IN THE ABSENC E OF ANY DOCUMENTARY EVIDENCE, AND FURTHER OBSERVING THAT SI MILAR RECEIPT WAS TREATED AS INCOME OF THE ASSESSEE IN THE EARLIER AS SESSMENT YEAR, TREATED ITA NO.2703/AHD/2017 POPULAR ESTATE MANAGEMENT LTD. VS. DCIT ASST .YEAR - 2012-13 - 4 - THE SAME AS UNEXPLAINED CASH CREDIT UNDER SECTION 6 8 OF THE ACT AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. AGGRIEVED ASSESSEE PREFERRED AN APPEAL TO THE LEARN ED CIT(A). 3. THE ASSESSEE BEFORE THE LEARNED CIT (A) SUBMIT TED THAT IT HAS ENTERED INTO THE AGREEMENTS WITH DIFFERENT SOCIETIES WHICH WERE HOLDING THE AGRICULTURE LANDS. AS PER THE AGREEMENT, THE ASSESS EE WAS APPOINTED BY THE SOCIETIES AS PROJECT CONSULTANT AND ORGANIZER T O DEVELOP SUCH AGRICULTURAL LANDS. THERE WAS ALSO A CLAUSE IN THE AGREEMENT THAT IN CASE THE SOCIETY TERMINATES THE DEVELOPMENT AGREEMENT OR WISHS TO SALE THE LAND, THEN THE ASSESSEE SHALL HAVE THE PRE-EMPTIVE RIGHT FOR THE PURCHASE OF SUCH LAND. SIMILARLY, THERE WAS ALSO A CLAUSE IN THE AGREEMENT THAT IN CASE THE SOCIETY TERMINATES THE AGREEMENT AND DOES NOT WISH TO SELL THE LAND TO THE ASSESSEE, THEN THE SOCIETIES WILL PAY C OMPENSATION TO THE ASSESSEE. 3.1 AS SUCH, THE SOCIETIES TERMINATED THE AGREEMENT AND DECIDED TO SELL THE LAND TO DIFFERENT PERSONS AFTER MAKING THE PAYM ENT OF THE COMPENSATION TO THE ASSESSEE. ACCORDINGLY THE ASSES SEE CLAIMED TO HAVE RECEIVED A SUM OF RS.18,02,53,000/- AS COMPENSATION BY RELINQUISHING ITS RIGHT IN SUCH PROPERTIES/LANDS OF THE SOCIETIES. TH US THE ASSESSEE FURTHER CLAIMED THAT SUCH COMPENSATION REPRESENTS THE CAPIT AL RECEIPT NOT CHARGEABLE TO TAX. ITA NO.2703/AHD/2017 POPULAR ESTATE MANAGEMENT LTD. VS. DCIT ASST .YEAR - 2012-13 - 5 - 3.2. THE ASSESSEE IN SUPPORT OF ITS CONTENTION ALSO FILED THE FOLLOWING DOCUMENTARY EVIDENCE: 1) COPIES OF DEVELOPMENT AGREEMENTS ENTERED INTO WITH AFORESAID SOCIETIES/MANDLI ARE ATTACHED HEREWITH AS PER EXHIB IT I (PAGE NO.1 TO 181). I) COPIES OF TERMINATION AGREEMENTS ENTERED INTO WITH AFORESAID SOCIETIES/MANDLI ARE ATTACHED HEREWITH AS PER EXHIB IT II (PAGE NO.182 TO 229). II) COPIES OF SALE DEEDS ENTERED INTO BY THE AFORESAID SOCIETIES/MANDLI ARE ATTACHED HEREWITH AS PER EXHIBIT II-A (PAGE NO.230 TO 689). III) COPY OF SAID LEDGER ACCOUNT OF COMPENSATION DAMAGES RECEIVED FROM AFORESAID SOCIETIES/MANDLI ARE ATTACHED HEREWITH AS PER EXHIBIT III (PAGE NO.690). IV) COPIES OF SAID LEDGER ACCOUNTS AFORESAID SOCIETIES/ MANDLI ARE ATTACHED HEREWITH AS PER EXHIBIT IV (PAGE NO.691 TO 699). 3.3. THE ASSESSEE FURTHER SUBMITTED THAT THE CO MPENSATION RECEIVED BY IT ON ACCOUNT OF THE RELINQUISHMENT OF RIGHT CANNOT BE TREATED AS A CAPITAL ASSET WITHIN THE MEANING OF THE PROVISIONS OF SECTI ON 2(14) READ WITH SECTION 45 OF THE ACT. ONCE, THE AGREEMENT WAS TERM INATED BY THE SOCIETY THE ONLY RIGHT AVAILABLE TO THE ASSESSEE WAS TO FIL E SUE IN THE COURT OF LAW FOR THE BREACH OF THE CONTRACT. SUCH RIGHT CANNOT B E TERMED AS CAPITAL ASSETS. THEREFORE, THE COMPENSATION RECEIVED BY THE ASSESSEE IN LIEU OF FILING SUE IN THE COURT OF LAW AGAINST THE SOCIETY FOR TERMINATION OF THE AGREEMENT, REPRESENTS THE CAPITAL RECEIPT NOT CHARG EABLE TO TAX. 4. THE LEARNED CIT (A) ON THE DETAILS FILED BY THE ASSESSEE CALLED FOR THE REMAND REPORT FROM THE AO VIDE LETTER DATED 7 TH FEBRUARY 2017. THE AO ACCORDINGLY FILED THE REMAND REPORT VIDE LETTER DATED 24 TH APRIL 2017. THE AO IN THE REMAND REPORT SUBMITTED THAT THE CASE OF THE ASSESSEE DOES NOT FALL WITHIN THE CIRCUMSTANCES SPECIFIED UNDER R ULE 46A FOR ADMITTING ITA NO.2703/AHD/2017 POPULAR ESTATE MANAGEMENT LTD. VS. DCIT ASST .YEAR - 2012-13 - 6 - THE ADDITIONAL EVIDENCES, THEREFORE THE AO OBJECTED ON THE ADMISSION OF THE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE BEFO RE THE LEARNED CIT-A. 4.1. THE AO WITHOUT PREJUDICE TO THE ABOVE ALSO DOUBTED ON THE TERMINATION OF THE AGREEMENT WITH THE SOCIETIES AND OBSERVED CERTAIN DEFECTS AS DETAILED UNDER: I. ALL THE DEVELOPMENT AGREEMENTS WERE MADE AT THE FAG END OF MARCH 2007. II. ALL THE DEVELOPMENT AGREEMENTS WERE UNREGISTERED. III. ALL THE DEVELOPMENT AGREEMENTS WERE MADE IN THE SAM E FONTS WHICH WERE NOTARIZED BY THE COMMON NOTARY PUBLIC. IV. SIMILARLY ALL THE TERMINATION AGREEMENTS WERE MADE AT THE FAG END OF MARCH 2011. V. ALL THE TERMINATION AGREEMENTS WERE UNREGISTERED. VI. ALL THE TERMINATION AGREEMENTS WERE MADE IN THE SAM E FONTS WHICH WERE NOTARIZED BY THE COMMON NOTARY PUBLIC. 4.2. THE AO IN THE REMAND REPORT FURTHER OBSERVED THAT THE TERMINATION OF THE DEVELOPMENT AGREEMENT WITH ALL THE PARTIES/S OCIETIES DOES NOT APPEAR TO BE TRUE. IT IS BECAUSE THE STORY OF TERMI NATING THE AGREEMENT WITH 8 PARTIES CANNOT BE CONSIDERED REASONABLE/POSS IBLE IN THE COMMON BUSINESS PARLANCE. FURTHERMORE, THE CHARACTER OF TH E COMPENSATION AMOUNT RECEIVED ON ACCOUNT OF THE TERMINATION AGREE MENT IS OF THE BUSINESS RECEIPT. THEREFORE THE SAME SHOULD BE TAXA BLE AS THE BUSINESS INCOME OF THE ASSESSEE. 4.3. THE AO ALSO OBSERVED THAT THE ASSESSEE HAS MADE CERTAIN PAYMENT TO THE SOCIETIES BEFORE AND AFTER ENTERING INTO DEV ELOPMENT AGREEMENT AS ITA NO.2703/AHD/2017 POPULAR ESTATE MANAGEMENT LTD. VS. DCIT ASST .YEAR - 2012-13 - 7 - EVIDENT FROM REMAND REPORT REPRODUCED AT PAGE 19 & 20 OF THE LEARNED CIT (A) ORDER. 4.4. THE ASSESSEE IN THE REBUTTAL SUBMITTED THAT THE OBSERVATIONS MADE BY THE AO DURING THE REMAND PROCEEDINGS ARE GENERAL AND NO ADVERSE INFERENCE CAN BE DRAWN AGAINST THE ASSESSEE. AS SUC H ALL THE TRANSACTIONS BETWEEN THE ASSESSEE AND THE SOCIETIES ARE SUPPORTE D BASED ON THE AGREEMENT WHICH WERE DULY COMPLIED BY BOTH THE PART IES. 4.5. THE ASSESSEE FURTHER SUBMITTED THAT THE RI GHT ACQUIRED BY IT IN PURSUANCE TO THE AGREEMENT WITH THE SOCIETY WAS TO FILE SUE FOR THE SPECIFIC PERFORMANCE OF THE AGREEMENT WHICH CANNOT BE TREATED AT PAR WITH THE CAPITAL ASSETS. 4.6. THE ASSESSEE ALSO CLAIMED THAT THERE WAS N O COMPENSATION RECEIVED BY IT IN THE ASSESSMENT YEAR 2007-08 AS AL LEGED BY THE AO THEREFORE THE QUESTION OF OFFERING SUCH COMPENSATIO N TO THE INCOME DOES NOT ARISE. AS SUCH THE RECEIPT IN THE ASSESSMENT YE AR 2007-08 WAS REPRESENTING THE INTEREST INCOME WHICH WAS OFFERED TO TAX BUT THE SAME CANNOT BE COMPARED WITH THE COMPENSATION RECEIVED B Y THE ASSESSEE IN THE YEAR UNDER CONSIDERATION. 4.7. THE ASSESSEE ALSO SUBMITTED THAT THE HONBL E ITAT AHMEDABAD A BENCH IN THE OWN CASE OF THE ASSESSEE INVOLVIN G IDENTICAL FACTS AND CIRCUMSTANCES HAS DECIDED THE ISSUE IN FAVOUR OF TH E ASSESSEE VIDE ITA ITA NO.2703/AHD/2017 POPULAR ESTATE MANAGEMENT LTD. VS. DCIT ASST .YEAR - 2012-13 - 8 - NO. 212/AHD/2014 ORDER DATED 29 AUGUST 2017 PERTAIN ING TO THE ASSESSMENT YEAR 2009-10. 4.8. HOWEVER, THE LEARNED CIT(A) OBSERVED THAT THE FACTS OF THE CASE FOR THE ASSESSMENT YEAR 2009-10 ARE DIFFERENT WITH THE FACTS OF THE CASE FOR THE YEAR UNDER CONSIDERATION. ACCORDINGLY THE L EARNED CIT (A) POINTED OUT SUCH DIFFERENCES IN THE FACTS AS DETAIL ED UNDER: I. DURING THE A.Y. 2009-10 ALL THE ACTIVITIES/ TRANSAC TIONS SUCH AS SIGNING OF THE DEVELOPMENT AGREEMENT, TERMINATION O F THE AGREEMENT AND SALE OF THE LAND TO THE OTHERS PERSON S HAPPENED IN SAME FINANCIAL YEAR I.E. 2008-09 CORRESPONDING T O A.Y. 2009- 10 WHEREAS IN THE YEAR UNDER CONSIDERATION THE SIGN ING OF THE DEVELOPMENT AGREEMENT WAS DONE IN THE ASSESSMENT YE AR2007- 08, TERMINATION OF THE AGREEMENT WAS DONE IN THE AS SESSMENT YEAR 2011-12 AND THE COMPENSATION RECEIVED BY THE A SSESSEE WAS IN THE ASSESSMENT YEAR 2012-13 I.E. THE YEAR UN DER CONSIDERATION. II. DURING THE ASSESSMENT YEAR 2009-10, THERE WAS NO PA YMENT MADE BY ASSESSEE TO THE SOCIETIES WHEREAS FOR THE Y EAR UNDER CONSIDERATION THE ASSESSEE HAS MADE THE PAYMENT TO THE SOCIETIES AS DETAILED UNDER: SR.NO. NAME OF SOCIETY AMOUNT AS PER THE AGREEMENT (RS.) TO BE PAID BY THE APPELLANT DATE OF PAYMENT PAYMENT TO MANDALI 1. SAHELI SAMUDAYIK KHETI SAH.MANDLI LTD. 35,00,000 - - 2. SOMESHWARA DARSHAN CO-OP.H.S.L. V-6 50,00,000 10 - 04 - 2007 12-05-2007 01-02-2008 21-03-2008 2000000 1014000 5000 500000 3519000 ITA NO.2703/AHD/2017 POPULAR ESTATE MANAGEMENT LTD. VS. DCIT ASST .YEAR - 2012-13 - 9 - 3. SEJAL CO.OP.HSG.SOC.LTD. V-I 50,00,000 - - 4. SEJAL CO.OP. HSG. SOC. LTD. 50,00,000 21 - 08 - 2004 25-08-2004 2000000 478000 2478000 5. SHITAL CO.OP. HSG.SOC. 50,00,000 - - 6. SARANGA CO.OP.HSG.SOC.LTD. (SPACE LEFT BLANK IN THE AGREEMENT) 01/07/2004 01/07/2004 13/07/2004 21/07/2004 24/07/2004 26/03/2008 03/03/2010 09/03/2010 30/04/2010 2500000 2500000 1700000 2600000 700000 -1285000 540000 130000 380000 9765000 7. SARAL SAMUDAYIK KHETI SAH.MANDLI LTD. 25,00,000 23 - 03 - 2007 1256000 8. HANUMAN DARSHAN SAM. K.S.M. LTD. V-I 50,00,000 28 - 03 - 2007 813000 III. THE DIRECTORS/SHAREHOLDERS OF THE ASSESSEE COMPANY AND THE MEMBERS OF THE SOCIETIES VIS-A- VIS THE BUYERS OF T HE LANDS FROM THE SOCIETIES WERE EITHER CLOSELY CONNECTED OR RELA TED TO EACH OTHER. BUT THE ITAT IN ITS ORDER FOR THE ASSESSMENT YEAR 2009- 10 HAS NOT CONSIDERED THIS ASPECT WHICH IS QUITE VI TAL FOR DECIDING THE ISSUE ON HAND. AS PER THE LD. CIT-A TH ERE WERE FOUR PERSONS WHO WERE CONTROLLING THE ENTIRE POPULA R GROUP ALONG WITH THEIR FAMILY MEMBERS NAMELY CHHAGANBHAI BHOLIDAS PATEL, RAMANBHAI BHOLIDAS PATEL, DASRATHBHAI BHOLID AS PATEL AND NATWAR LAL BHOLIDAS PATEL. THE NAME OF THESE FO UR PERSONS AND THEIR FAMILY MEMBERS CAN BE FOUND EITHER AS SIG NATORY OF SOCIETIES OR ULTIMATE BUYER OF THE LAND. THE DETAIL S OF SUCH PERSONS ALONG WITH FAMILY MEMBERS ARE CONTAINED ON PAGES 60 TO 63 OF LD. CIT-A ORDER. IV. SIMILARLY, THE TERMINATION AGREEMENTS BETWEEN THE A SSESSEE AND THE SOCIETIES VIZ A VIZ THE SALE AGREEMENTS BETWEEN THE SOCIETIES ITA NO.2703/AHD/2017 POPULAR ESTATE MANAGEMENT LTD. VS. DCIT ASST .YEAR - 2012-13 - 10 - AND THE BUYERS OF THE LANDS WERE NOT CONSIDERED BY THE ITAT IN ITS ORDER WHICH IS QUITE VITAL FOR DECIDING THE ISS UE ON HAND. 4.9. IN VIEW OF ABOVE DIFFERENCE IN FACTS OF THE CASE THE LD. CIT (A) DISAGREED WITH THE DECISION OF HONBLE ITAT AHMEDAB AD A BENCH IN ASSESSEES OWN CASE AS DISCUSSED ABOVE. ACCORDINGLY THE LD. CIT(A) FURTHER MADE HIS OWN OBSERVATION AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE AND THE REMAND REPORT OF THE AO WHICH ARE DETAILED AS UNDER: A. AS PER THE INFORMATION RECEIVED FROM SOCIETY REGIST RATION OFFICE WITH RESPECT TO 3 SOCIETIES OUT OF 8 SOCIETIES, IT WAS GATHERED THAT THERE WAS NOT SUFFICIENT FUND OR SOURCE OF INCOME A VAILABLE TO SOCIETY TO PURCHASE LAND. AS SUCH THE FUND WAS PROV IDED BY THE ASSESSEE WITH PRE-EMPTIVE PURCHASE RIGHT. THERE WAS NO INFORMATION RECEIVED WITH RESPECT TO THE REMAINING 5 SOCIETIES FROM THE REGISTRATION OFFICE DESPITE THE SAME WAS REQUIS ITIONED. B. THERE WAS CHANGE IN THE MANAGING COMMITTEE /MEMBERS OF THE SOCIETIES WHEN THE DEVELOPMENT AGREEMENT WAS SIGNED BY THE ASSESSEE WITH SUCH SOCIETIES AND WHEN THE TERMINATI ON AGREEMENT WAS SIGNED BY THE ASSESSEE WITH SUCH SOCIETIES. AS SUCH THE MANAGING COMMITTEE /MEMBERS OF THE SOCIETIES CONTIN UED TO BE THE SAME FROM THE DATE OF THE AGREEMENT I.E. 2007 TO MA RCH 2010. THEREAFTER THERE WAS THE CHANGE IN THE MANAGING COMMITTEE/MEMBERS OF THE SOCIETY WHEN THE TERMINATI ON AGREEMENT WAS SIGNED IN THE YEAR MARCH 2011 AND THE SALE DEED WAS EXECUTED. C. FURTHER THE MAJOR AMOUNT OF THE SALE CONSIDERATION RECEIVED BY THE SOCIETIES WAS GIVEN BY IT (SOCIETIES) AS COMPENSATI ON TO THE ASSESSEE WHICH IS CONSTITUTING ON AN AVERAGE 85% OF THE GROSS SALES CONSIDERATION. THE DETAILS OF THE BUYERS OF THE LAN D WITH THE ITA NO.2703/AHD/2017 POPULAR ESTATE MANAGEMENT LTD. VS. DCIT ASST .YEAR - 2012-13 - 11 - RELATIONSHIP OF THE ASSESSEE AND THE AMOUNT OF COMP ENSATION AGAINST THE GROSS SALES CONSIDERATION IS CONTAINED IN TABULAR FORM ON PAGES 67 TO 70 IN THE ORDER OF THE LEARNED CIT-A . D. THE AMOUNT OF COMPENSATION RECEIVED BY THE ASSESSEE FROM THE SOCIETIES WAS IMMEDIATELY TRANSFERRED TO THE PARTIE S DIRECTLY CONNECTED/RELATED WITH THE ASSESSEE WITHIN A DAY OR TWO. THUS, AT THE END OF THE DAY IT WAS THE POPULAR GROUP WHO WAS BENEFITED OUT OF THE LAND TRANSACTION DEAL AFTER INVOLVING THE SO CIETIES AND OTHER ASSOCIATES IN ORDER TO AVOID THE PAYMENT OF TAXES. E. THE DEVELOPMENT AGREEMENT REVEALS THAT THE ASSESSEE HAS ACQUIRED THE RIGHT FROM THE SOCIETIES FOR DEVELOPMENT OF THE LAND OWNED BY THEM. FURTHER, IN THE EVENT OF BREACH OF THE AGREEM ENT BY SOCIETY ON ACCOUNT OF ANY DISPUTE, THE ASSESSEE WAS TO BE C OMPENSATED BY IT (THE SOCIETIES). EVENTUALLY THE ASSESSEE WAS COM PENSATED AS THE SOCIETY BREACHED THE DEVELOPMENT AGREEMENT AS PER T HE TERMINATION AGREEMENT. HOWEVER, ON PERUSAL OF THE SALE DEED BY THE SOCIETY TO THE FINAL BUYERS, IT WAS EMERGED OUT THAT THE SOCIE TIES SOLD THE LAND BECAUSE THERE WAS THE CONSTRUCTION GOING ON IN THE NEARBY AREA. AS SUCH THERE WAS NO REFERENCE OF ANY KIND OF DISPUTE BETWEEN THE ASSESSEE AND THE SOCIETIES WHICH ENTAILED THE PAYME NT OF THE COMPENSATION BY THE SOCIETY TO THE ASSESSEE. THUS T HE PAYMENT OF THE COMPENSATION IS NOTHING BUT A CONCOCTED STORY W HICH FAR FROM THE TRUTH. 4.10. IN VIEW OF THE ABOVE, THE LEARNED CIT (A) CONCLUDED THAT THE AMOUNT OF COMPENSATION RECEIVED BY THE ASSESSEE DOE S NOT REPRESENT AS A RESULT OF BREACH OF CONTRACT. AS SUCH THE ASSESSEE BY USING DUBIOUS METHOD TRIED TO AVOID THE PAYMENT OF TAX. ACCORDING LY, THE LEARNED CIT(A) REJECTED THE CONTENTION OF THE ASSESSEE AND CONFIRMED THE ORDER OF THE AO BY OBSERVING AS UNDER: ITA NO.2703/AHD/2017 POPULAR ESTATE MANAGEMENT LTD. VS. DCIT ASST .YEAR - 2012-13 - 12 - 12. THUS, I AM OF THE CONSIDERED VIEW THAT AS RIGHTLY POINTED OUT BY THE A.O IN HIS REMAND REPORT, THERE SEEMS TO BE A DISTINCT MODUS O PERANDI EMERGING OUT OF THESE ARRANGEMENTS. THE APPELLANT ITSELF HAD GIVEN FUNDS TO THE SOCIETIES TO BUY THE LAND. ITS OWN SHARE HOLDERS, RELATED PARTIES ARE THE MEMBERS OF THE MANAGING COMMITTEE OR THE SOCIETY. THIS FACT WAS NEVER DISCLOSED EITHER D URING THE ASSESSMENT OR REMAND OR APPELLATE PROCEEDINGS. THEN THE APPELLANT ENTERED I NTO DEVELOPMENT AGREEMENT WITH EIGHT SOCIETIES OR PERSONS AND RECEIVED LARGE SUMS IN LIEU OF RIGHT TO SUE AFTER THE DEVELOPMENT AGREEMENTS ARE TERMINATED BY THE SOCIET IES AND LAND IS SOLD TO THE THIRD PARTY. THE YEAR IN WHICH THE TERMINATION AGREEMENT TOOK PLACE, THE SHARE HOLDERS OR THE RELATED PARTIES WERE NO MORE THE MEMBER OF THE SOCIETY OR THE MANAGING COMMITTEE. THE FINAL BUYERS OR THE THIRD PARTIES AR E NONE OTHER THAN THE CMD, DIRECTOR, SHAREHOLDERS OR THE RELATED PARTIES OF TH E APPELLANT COMPANY. AN ARTIFICIAL SCENARIO OF 'DISPUTE' IS CREATED RESULTING INTO TER MINATION AGREEMENT AND PAYMENT OF COMPENSATION. THE GLARING CONTRADICTIONS IN THE FIN AL SALE DOCUMENT AND THE DEVELOPMENT/TERMINATION AGREEMENTS CANNOT BE IGNORE D. ON THE CONTRARY, THE REAL GRIEVANCE LIES WITH THE SOCIETIES/VENDORS FOR NON P ERFORMANCE OR BREACH OF THE CONTRACT BY THE APPELLANT. THEY HAVE THE RIGHT TO S UE THE APPELLANT. HOWEVER, THE FACADE CREATED BY THE APPELLANT HAS RESULTED INTO A LARGE CHUNK OF FUND REMAINING WITHIN THE 'POPULAR GROUP' AS MENTIONED EARLIER AND THE APPELLANT TAKING THE SHIELD OF CAPITAL RECEIPT ARGUMENT TO AVOID PAYMENT OF TAX ES. ONE HAS TO LOOK BEYOND WHAT IS NOT APPARENT. THIS HAS HAPPENED NOT ONLY IN THIS YEAR BUT AS MENTIONED, IN EARLIER YEARS AS WELL THE APPELLANT HAS ENTERED INTO SIMILA R SET OF AGREEMENTS TO CLAIM CAPITAL RECEIPTS AND AVOID PAYMENT OF TAXES. IN THREE YEARS I.E. AY 2009-10, AY 2012-13 & AY 2015-16 THE APPELLANT HAS CLAIMED CAPITAL RECEIP T OF APPROX. RS. 41 CRORES AS NON TAXABLE. HON'BLE ITAT HAS GIVEN THE RELIEF TO THE A PPELLANT FOR AY 2009-10 AS DISCUSSED EARLIER. THE HON'BLE ITAT FOR AY 2009-10, AND THE AO HAS RIGHTLY POINTED OUT THAT THE MAIN OBJECT OF THE APPELLANT IS TO DEV ELOP PROPERTY AND TRANSACT INTO REAL ESTATE. IT HAS BEEN PROVED AGAIN AND AGAIN BY THE A PPELLANT BY ITS CONDUCT OF BUSINESS THAT REPEATEDLY THE APPELLANT HAS UNDERTAKEN THE TR ANSACTIONS OF LAND DEALS RIGHT FROM A.Y.2007-08 ONWARDS. AS SUCH TRANSACTIONS ARE PART AND PARCEL OF THE BUSINESS AND PROFESSION OF THE APPELLANT, THE INCOME ARISING FROM THE CONDUCT OF SUCH BUSINESS AND PROFESSION WILL HAVE TO BE TAXED UNDER THE HEAD INCOME FROM BUSINESS AND PROFESSION. THEREFORE, I AGREE WITH THE A.O THAT TH E RECEIPT OF RS.18,02,53,000/- SHALL BE TAXED UNDER THE HEAD INCOME FROM BUSINESS AND PR OFESSION. ACCORDINGLY, THE ADDITION MADE BY THE A.O AMOUNTING TO RS. 18,02,53, 000/- UNDER THE HEAD INCOME FROM BUSINESS AND PROFESSION IS HEREBY CONFIRMED. T HE GROUND OF APPEAL IS HEREBY DISMISSED. BEING AGGRIEVED BY THE ORDER OF THE LEARNED CIT (A) , THE ASSESSEE IS IN APPEAL BEFORE US. ITA NO.2703/AHD/2017 POPULAR ESTATE MANAGEMENT LTD. VS. DCIT ASST .YEAR - 2012-13 - 13 - 5. THE LEARNED AR BEFORE US FILED A PAPER BOOK RU NNING FROM PAGES 1 TO 1081 AND SUBMITTED THAT THIS TRIBUNAL IN THE OWN CA SE OF THE ASSESSEE IN THE EARLIER ASSESSMENT YEAR 2009-10 INVOLVING IDENT ICAL FACTS AND CIRCUMSTANCES HAS DELETED THE ADDITION. 6. ON THE OTHER HAND, THE LEARNED DR VEHEMENTL Y SUPPORTED THE ORDER OF THE AUTHORITIES BELOW. 7. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IN THE PRESENT C ASE THE ASSESSEE HAS RECEIVED THE COMPENSATION FOR RELINQUISHMENT OF RIG HT TO SUE FROM CERTAIN SOCIETIES AS THERE WAS THE BREACH OF CONTRACT BY TH E SOCIETIES. AS SUCH THE ASSESSEE HAS ENTERED INTO THE DEVELOPMENT AGREEMENT ALONG WITH PREEMPTIVE PURCHASE RIGHT WITH THE SOCIETIES FOR TH E LANDS OWNED BY THEM. BUT, SUBSEQUENTLY THE SOCIETIES TERMINATED TH E AGREEMENT WITH THE ASSESSEE AFTER MAKING THE PAYMENT OF THE COMPENSATI ON. THE AMOUNT OF COMPENSATION RECEIVED BY THE ASSESSEE WAS RECORDED AS CAPITAL RECEIPT NOT CHARGEABLE TO TAX U/S 2(45) R.W.S 45 OF THE, AC T. HOWEVER, THE LEARNED AO HELD THAT THE ENTIRE TRANSACTION/ACTIVITIES FOR THE DEVELOPMENT OF THE LAND, TERMINATION OF THE DEVELOPMENT AGREEMENT AND THE SUBSEQUENT SALE OF THE LANDS TO THE PARTIES AND THE AMOUNT OF THE C OMPENSATION RECEIVED BY THE ASSESSEE IS NOTHING BUT A DEVICE USED TO ESC APE FROM THE TAX LIABILITY. ACCORDINGLY THE AMOUNT OF COMPENSATION R ECEIVED BY THE ASSESSEE WAS TREATED AS BUSINESS INCOME OF THE ASSE SSEE. THE LD. CIT-A SUBSEQUENTLY CONFIRMED THE ORDER OF THE AO. ITA NO.2703/AHD/2017 POPULAR ESTATE MANAGEMENT LTD. VS. DCIT ASST .YEAR - 2012-13 - 14 - 8. NOW FROM THE PRECEDING DISCUSSION, THE FOLLOW ING ISSUES EMERGE FOR OUR CONSIDERATION. I. WHETHER THE CASE OF THE ASSESSEE IS COVERED BY THE ORDER OF THIS TRIBUNAL IN ITS OWN CASE FOR THE ASSESSMENT YEAR 20 09-10 AS DISCUSSED ABOVE. II. WHETHER THE AMOUNT OF COMPENSATION RECEIVED BY THE ASSESSEE REPRESENTS THE INCOME OF IT (THE ASSESSEE). 9. REGARDING THE ABOVE QUESTIONS, WE NOTE THAT T HE LEARNED CIT (A) HAS DISTINGUISHED THE FACTS OF THE PRESENT CASE WITH TH E CASE OF THE ASSESSEE FOR THE EARLIER ASSESSMENT YEAR 2009-10 ON ACCOUNT OF MAINLY FOUR REASONS WHICH HAVE BEEN DULY ELABORATED SOMEWHERE I N THE PRECEDING PARAGRAPH. NOW, WE PROCEED TO ANALYZE THE REASONS A S OBSERVED BY THE LEARNED CIT (A) IN THE FOLLOWING PARAGRAPHS. I. IN THE ASSESSMENT YEAR 2009-10 ALL THE ACTIVITIES I .E. THE DEVELOPMENT, TERMINATION AGREEMENT AND THE SALE OF THE PROPERTY WERE HAPPENED WITHIN THE SAME FINANCIAL YE AR I.E. 2008-09 WHEREAS IT WAS NOT SO FOR THE YEAR UNDER CONSIDERATION. 9.1. ON PERUSAL OF THE ABOVE REASON, WE FIND TH AT THE CHARACTER OF THE TRANSACTION FOR RECEIVING THE COMPENSATION WILL NOT CHANGE MERELY ON THE GROUND THAT THE DEVELOPMENT AGREEMENT, TERMINATION OF AGREEMENT AND THE SALE OF THE PROPERTY HAPPEN IN DIFFERENT FINANC IAL YEARS. IT IS BECAUSE ITA NO.2703/AHD/2017 POPULAR ESTATE MANAGEMENT LTD. VS. DCIT ASST .YEAR - 2012-13 - 15 - THERE ARE DIFFERENT PARTIES INVOLVED IN THE TRANSAC TIONS AND THE ASSESSEE HAS NO CONTROL OF WHATSOEVER ON THESE PARTIES. AS S UCH, WHEN THE SOCIETIES TERMINATED THE AGREEMENT WITH THE ASSESSE E, IT ACQUIRED THE RIGHT TO SUE AND FOR RELINQUISHMENT OF SUCH RIGHT IT RECE IVED THE COMPENSATION. THEREFORE, IN THESE FACTS AND CIRCUMSTANCES WE ARE OF THE VIEW THAT THE FACTS OF THE PRESENT CASE FOR THE YEAR UNDER CONSID ERATION CANNOT BE DISTINGUISHED WITH THE FACTS OF THE EARLIER ASSESSM ENT YEAR 2009-10 AS OBSERVED BY THE LEARNED CITA. II. DURING THE ASSESSMENT YEAR 2009-10, THERE WAS NO PA YMENT MADE BY ASSESSEE TO THE SOCIETIES WHEREAS FOR THE Y EAR UNDER CONSIDERATION THE ASSESSEE HAS MADE THE PAYMENT TO THE SOCIETIES. 9.2. ON PERUSAL OF THE ITAT ORDER FOR THE ASSESSM ENT YEAR 2009-10, WE FIND THAT THE ASSESSEE RECEIVED THE COMPENSATION FR OM THE 3 PARTIES. AND THE ASSESSEE AT THE TIME OF ENTERING INTO AGREEMENT WITH THESE PARTIES PAID OR AGREED TO PAY CERTAIN AMOUNT AS PER THE UNDERSTA NDING. THEREFORE IT IS CLEAR THAT THE ASSESSEE HAS MADE OR AGREED TO MAKE THE PAYMENT OF CERTAIN AMOUNT TO THESE PARTIES FROM WHOM IT HAS RECEIVED T HE COMPENSATION IN THE ASSESSMENT YEAR 2009-10. SIMILARLY, THE ASSESSE E FOR THE YEAR UNDER CONSIDERATION HAS ALSO MADE OR AGREED TO MAKE THE P AYMENT OF CERTAIN AMOUNT TO THE SOCIETIES WHICH HAS BEEN DETAILED SOM EWHERE IN THE PRECEDING PARAGRAPH. THEREFORE, WE ARE OF THE VIEW THAT THE FINDING OF THE LEARNED CIT (A) THAT THERE WAS NO PAYMENT MADE TO T HE PARTIES BY THE ASSESSEE IN THE ASSESSMENT YEAR 2009-10 IS FACTUALL Y INCORRECT. TO SUPPORT OUR VIEW, WE REPRODUCE THE RELEVANT PORTION OF THE ITAT ORDER IN ITA NO. 212/AHD/2014 IN THE FOLLOWING PARAGRAPH: ITA NO.2703/AHD/2017 POPULAR ESTATE MANAGEMENT LTD. VS. DCIT ASST .YEAR - 2012-13 - 16 - 2. WE COME TO RELEVANT FACTS. THIS ASSESSEE IS C OMPANY ENGAGED IN REAL ESTATE DEVELOPMENT BUSINESS. IT HAD EXECUTED INTO A DEVELO PMENT AGREEMENT DATED 31.03.2007 WITH SHRI HASMUKH BHAVSINH VAGHELA QUA T HE LAND MEASURING 49068 SQ.MTRS. IN R. S. NO. 231 IN VILLAGE & TALUK SANAND , DIST. AHMEDABAD FOR RS.81 LACS TO BE PAID ON AS AND WHEN REQUIRED BASIS. THE ASSES SEE ENTERED INTO SIMILAR AGREEMENT ON THE VERY DAY IN IDENTICAL TERMS WITH S HREE SOMESHWARA DARSHAN SAMUDIKE KHETI SAHKARI MANDLI LTD., PART-1 (REGISTE RED BODY) PERTAINING TO ITS LAND MEASURING 1012 SQ.MTRS. COMPRISED IN R.S. 305, REVE NUE ESTATE OF VILLAGE THALTEJ, DASKROI TALUKA, DIST. AHMEDABAD FOR RS.251ACS. IT I SSUED A CHEQUE OF RS.L4.541ACS IN FAVOUR OF THE SAID BODY. IT FURTHER AGREED TO PR OVIDE REMAINING SUM OF RS.L0.461ACS ON AS AND WHEN REQUIRED BASIS IN THE N ATURE OF INTEREST FREE SECURITY DEPOSIT. THE ASSESSEE'S THIRD DEVELOPMENT AGREEMENT CAME TO BE EXECUTED ON 18.03.2008 WITH S/SHRI RAGHUVIR SINH AMAR SINH VAGH ELA AND HIS SON BALBHADRASINH VAGHELA REGARDING THEIR LAND ADMEASURING ABOUT 57,4 66 SQ.MTRS. IN R.S. 232, VILLAGE & TALUKA SANAND, DISTRICT AHMEDABAD. THERE IS NO DI SPUTE THAT CLAUSE NO.24 IN THIS THIRD AGREEMENT STIPULATED THE ASSESSEE TO PAY SUM OF RS.95 LACS ON AS AND WHEN REQUIRED BASIS HEREIN AS WELL. 9.3. THUS, IN THESE FACTS OF CIRCUMSTANCES WE AR E OF THE VIEW THAT THE FACTS OF THE PRESENT CASE FOR THE YEAR UNDER CONSID ERATION CANNOT BE DISTINGUISHED WITH THE FACTS OF THE EARLIER ASSESSM ENT YEAR 2009-10 AS OBSERVED BY THE LEARNED CIT-A. III. THE DIRECTORS/SHAREHOLDERS OF THE ASSESSEE COMPANY AND THE MEMBERS OF THE SOCIETIES VIZ A VIZ THE BUYERS OF TH E LANDS FROM THE SOCIETIES WERE EITHER CLOSELY CONNECTED OR RELATED TO EACH OTHER. BUT THE ITAT IN ITS ORDER FOR THE ASSES SMENT YEAR 2009-10 HAS NOT CONSIDERED THIS ASPECT WHICH I S QUITE VITAL FOR DECIDING THE ISSUE ON HAND. 9.4. IN THIS CONNECTION, WE NOTE THAT THERE IS N O PROVISION UNDER THE STATUTE PROHIBITING ANY PERSON TO ENTER INTO A TRAN SACTION WITH THE RELATED/CONNECTED PARTIES. THE PROVISIONS OF SECTIO N 40A(2)(B) OF THE ACT ITA NO.2703/AHD/2017 POPULAR ESTATE MANAGEMENT LTD. VS. DCIT ASST .YEAR - 2012-13 - 17 - ONLY MANDATES TO HAVE THE TRANSACTIONS WITH THE REL ATED PARTIES AT THE FAIR MARKET VALUE AND THERE IS NO ALLEGATION BY THE AUTH ORITIES BELOW THAT THE IMPUGNED TRANSACTION WAS NOT CARRIED OUT AT THE FAI R MARKET VALUE. MOREOVER, WE ALSO NOTE THAT THERE WAS NO DISCUSSION IN THE ORDER OF THE ITAT FOR THE ASSESSMENT YEAR 2009-10 WHETHER THE TR ANSACTIONS WERE AMONG THE RELATED PARTIES. THUS IN THE ABSENCE OF A NY SPECIFIC INFORMATION THERE CAN BE TWO SITUATIONS, FIRSTLY TH ERE MAY BE TRANSACTIONS WITH THE RELATED PARTIES OR SECONDLY THERE MAY NOT BE THE TRANSACTIONS WITH THE RELATED PARTIES. HENCE, IT CANNOT BE CONCLUDED THAT THERE WAS NO TRANSACTION WITH THE RELATED PARTIES IN THE ASSESSM ENT YEAR 2009-10 IN THE ABSENCE OF ANY SPECIFIC INFORMATION. MOREOVER, THE LD. CIT-A HAS NOT BROUGHT ANYTHING ON RECORD SUGGESTING THAT THE TRAN SACTION IN THE AY 2009-10 WAS NOT WITH THE RELATED PARTIES. 9.5 AS SUCH WE NOTE THAT THE PRINCIPLES WERE LAID D OWN BY THE TRIBUNAL AFTER RELYING THE JUDGMENT OF THE HONBLE GUJARAT H IGH COURT AS DISCUSSED ABOVE FOR THE ASSESSMENT YEAR 2009-10 CAN NOT BE ALTERED MERELY ON THE GROUND THAT THE TRANSACTION WAS ENTER ED WITH THE RELATED PARTIES. ACCORDINGLY WE ARE NOT IMPRESSED WITH THE FINDING OF THE LEARNED CIT (A). 9.6. WITHOUT PREJUDICE TO THE ABOVE, WE ARE ALSO INCLINED TO REFER THE RELEVANT FINDING OF THE LEARNED CIT (A) ON PAGE 66, 70, 71, 83 AND 90 OF THE ORDER AS REPRODUCED/EXTRACTED BELOW: ITA NO.2703/AHD/2017 POPULAR ESTATE MANAGEMENT LTD. VS. DCIT ASST .YEAR - 2012-13 - 18 - FOURTHLY, THE FINAL BUYERS OF THE LAND FROM THE SO CIETIES WERE ALSO THE DIRECTOR, SHARE HOLDERS OR THE RELATED PARTIES OF THE APPELLA NT (TABULATED IN THE TABLE BELOW). FINALLY, NEITHER DURING THE ASSESSMENT PROCEEDINGS OR REMAND PROCEEDINGS OR APPELLATE PROCEEDINGS THESE FACTS WERE DISCLOSED. T HE APPELLANT IS/WAS VERY MUCH AWARE OF THESE FACTS FOR THE REASON THAT APPELLANT ITSELF HAD GIVEN FUNDS TO THE SOCIETY, ITS OWN SHAREHOLDERS/DIRECTORS/RELATED PARTIES WERE MEMBERS OF THE SOCIETY AS WELL AS MANAGING COMMITTEE, AND HAD WITHDRAWN FROM THE MEMB ERSHIP AT THE TIME OF TERMINATION AGREEMENT OR SIGNING OF FINAL SALE DEED . XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXX 7.14 IT CAN BE SEEN FROM THE TABULATION GIVEN ABOVE THAT THE FINAL BUYERS WHO PAID CONSIDERATION TO VARIOUS SOCIETIES WERE ALSO THE CM D, DIRECTOR, SHAREHOLDERS OR THE RELATED PARTY OF THE APPELLANT COMPANY. XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXX THE APPELLANT HAD ALSO SUBMITTED THE BANK STATEMENT S REFLECTING THE RECEIPT OF FUNDS FROM THE SOCIETIES. IT WAS OBSERVED FROM THESE BANK STATEMENTS THAT AS AND WHEN THE FUNDS HAVE BEEN RECEIVED FROM SOCIETIES WITHIN A DA Y OR TWO THE FUNDS HAVE BEEN TRANSFERRED OR GIVEN FURTHER TO RELATED ENTITIES BY THE APPELLANT. XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXX 7.15 THUS, RIGHT FROM THE SOCIETIES TILL THE F INAL RECIPIENT OF FUNDS FROM THE SOCIETIES TO THE APPELLANT, IT IS ONLY THE POPULAR GROUP AND ITS CONCERNS INCLUDING RELATED PARTIES OR SHAREHOLDERS THAT HAVE REMAINED THE RECIPIENT AND THE REAL BENEFICIARIES OF THESE LAND TRANSACTIONS. THUS, THE DEVELOPMENT AGREEMENT AND TERMINATION AGREEMENT APPEAR TO BE A FAADE TO AVOI D PAYMENT OF TAXES. THIS WEB OF AGREEMENTS WAS MERELY A FAADE CREATED TO SHOW TO T HE REVENUE AUTHORITIES THAT THE FUNDS RECEIVED ARE IN THE FORM OF CAPITAL RECEIPTS AND AVOID PAYMENT OF TAXES. XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXX 10.4 COUPLED WITH THE FACT AND AS DISCUSSED EA RLIER, MANY OF THE PERSONS IN THE SOCIETIES, THE APPELLANT AND ITS DIRECTORS AND SHAR EHOLDERS AND FINALLY THE FINAL BUYERS BEING ALL BELONGED TO THE SAME POPULAR GROUP. TH EREFORE THESE ARE NOT REAL TRANSACTIONS. I AM CONVINCED THAT THE APPELLANT HAS CREATED FAADE OF DEVELOPMENT AND TERMINATION AGREEMENTS WHEREBY PRE-EMPTIVE PURC HASE RIGHTS WERE GIVEN AND SURRENDERED. XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXX THE FINAL BUYERS OR THE THIRD PARTIES ARE NONE OTHE R THAN THE CMD, DIRECTOR, SHAREHOLDERS OR THE RELATED PARTIES OF THE APPELLAN T COMPANY. AN ARTIFICIAL SCENARIO OF 'DISPUTE' IS CREATED RESULTING INTO TERMINATION AGREEMENT AND PAYMENT OF COMPENSATION. ITA NO.2703/AHD/2017 POPULAR ESTATE MANAGEMENT LTD. VS. DCIT ASST .YEAR - 2012-13 - 19 - 9.7. THE ALLEGATION OF THE LEARNED CIT (A) IS THA T THE ENTIRE FLOW OF TRANSACTION WAS WITHIN THE POPULAR GROUP. AS PER TH E LEARNED CIT (A) THE FLOW OF TRANSACTION CAN BE REPRESENTED IN THE FOLLO WING MANNER: 1. ASSESSEE MADE PAYMENT TO THE SOCIETIES IN A.Y 2004- 05, 2. ENTERED INTO DEVELOPMENT AGREEMENT WITH SOCIETIES A ND ACQUIRED PRE-EMPTIVE PURCHASE RIGHT IN MARCH 2007 3. SOCIETIES TERMINATED THE AGREEMENT AND DECIDED TO S ALE THE LAND TO THIRD PARTY AND AGREED TO PAY COMPENSATION TO ASSES SEE IN MARCH 2011 4. THE SOCIETIES FINALLY SOLD THE LAND TO RELATED PERS ON OF ASSESSEE. 5. THE SOCIETIES PAID COMPENSATION ALMOST 85% OF SALES CONSIDERATION TO ASSESSEE. 6. ASSESSEE AFTER THE RECEIPT OF COMPENSATION TRANSFER RED THE AMOUNT TO RELATED PARTY. 9.8. AS PER THE FINDING OF THE LEARNED CIT (A), THE ENTIRE FLOW OF TRANSACTION WAS MADE AS REPRESENTED ABOVE TO ESCAPE FROM THE TAX LIABILITY. AS SUCH THE LEARNED CIT (A) WAS OF THE V IEW THAT ALL THE PARTIES WERE PART OF THE POPULAR GROUP. IN OUR CONSIDERED V IEW, IF THIS FINDING OF THE LEARNED CIT (A) IS TAKEN AS THE GOSPEL TRUTH, T HEN THE AFORESAID TRANSACTIONS ARE NOTHING BUT THE CIRCULAR TRANSACTI ON AMONG THE PARTIES FORMING PART OF THE GROUP. NOW THE QUESTION ARISES WHETHER SUCH CIRCULAR ITA NO.2703/AHD/2017 POPULAR ESTATE MANAGEMENT LTD. VS. DCIT ASST .YEAR - 2012-13 - 20 - TRANSACTION AMONG THE GROUP CAN RESULT INCOME IN TH E HANDS OF THE ASSESSEE. TO OUR MIND, THE ANSWER IS IN NEGATIVE. I T IS BECAUSE, FIRST OF ALL, THE SOURCE OF PAYMENT MADE BY THE BUYER OF THE LAND HAS NOT BEEN DOUBTED. IT MEANS THE BUYER MADE THE PAYMENT TO THE SOCIETY WHICH IN TURN MADE PAYMENT TO THE COMPANY AND COMPANY IN TUR N MADE THE PAYMENT TO THE PARTIES CONNECTED WITH IT. THUS THE ENTIRE CIRCULAR OF TRANSACTION DOES NOT GIVE RISE TO ANY INCOME IN THE HANDS OF THE ASSESSEE IF THE THEORY OF THE LEARNED CIT (A) IS ACCEPTED. A S SUCH, THERE WAS NO REAL INCOME IN THE HANDS OF THE ASSESSEE WHICH IS C HARGEABLE TO TAX. IV. SIMILARLY, THE TERMINATION AGREEMENTS BETWEEN THE A SSESSEE AND THE SOCIETIES VIZ A VIZ THE SALE AGREEMENTS BET WEEN THE SOCIETIES AND THE BUYERS OF THE LANDS WERE NOT CONS IDERED BY THE ITAT IN ITS ORDER WHICH IS QUITE VITAL FOR DECI DING THE ISSUE ON HAND. 9.9. DETAILS GIVEN BY THE SOCIETIES IN THE SALE D EED FOR TRANSFERRING THE LAND TO THE BUYERS AS DISCUSSED ABOVE, REPRESENTS T HE TRANSACTIONS BETWEEN THE 3 RD PARTIES. AS SUCH THE ASSESSEE PLAYS NO ROLE AND TH EREFORE NO INFERENCE CAN BE DRAWN AGAINST THE ASSESSEE BASE D ON THE TRANSACTIONS OF THE PROPERTIES I.E. SALE OF THE LAND TO THIRD PA RTIES. ACCORDINGLY, CONSIDERATION OF THE ISSUE IN HAND IN THE LIGHT OF THE TRANSACTION BETWEEN THE SOCIETY AND THE BUYER CANNOT BE A GROUND TO DRA W ANY ADVERSE INFERENCE AGAINST THE ASSESSEE. ITA NO.2703/AHD/2017 POPULAR ESTATE MANAGEMENT LTD. VS. DCIT ASST .YEAR - 2012-13 - 21 - 9.10. WITHOUT PREJUDICE TO THE ABOVE, WE ALSO NOT E THAT THE CIT (A) HAS GIVEN ITS FINDING THAT THERE WAS CHANGE OF MANAGING COMMITTEE/ MEMBERS IN THE SOCIETY WHEN THE DEVELOPMENT AGREEMENT WAS M ADE VIZ A VIZ WHEN THE TERMINATION AGREEMENT WAS MADE AS WELL AS WHEN THE COMPENSATION WAS PAID BY THE SOCIETIES TO THE ASSESSEE. THE RELE VANT FINDING OF THE LEARNED CIT (A) STANDS AS UNDER: 7.12.4 . THE DIRECTOR, SHAREHOLDERS OR THE REL ATED PARTIES WERE THE PART OF THE MANAGING COMMITTEE OF THE SOCIETIES OR MEMBER OF TH E SOCIETIES WHEN THE DEVELOPMENT AGREEMENT WAS SIGNED IN MARCH 2007 OR E VEN TILL MARCH 2010. THESE SAME PERSON WERE NO MORE IN THE MANAGING COMMITTEE OR WERE THE MEMBERS OF THE SOCIETY IN MARCH 2011 I.E. WHEN THE TERMINATION AGR EEMENT AND THE SALE DEED TOOK PLACE. 9.11. THE FINDING OF THE LEARNED CIT-A AS DISCUS SED ABOVE SUGGEST THAT THE TRANSACTION BETWEEN THE ASSESSEE AND THE SOCIET Y WAS NOT REPRESENTING THE RELATED PARTY TRANSACTION AS ALLEGED BY THE LEA RNED CIT (A). AS SUCH WE NOTE THAT THE LEARNED CIT (A) HAS GIVEN CONTRARY FINDINGS ABOUT THE FACT WHETHER THE ASSESSEE AND THE SOCIETIES WERE RE LATED TO EACH OTHER EITHER DIRECTLY OR INDIRECTLY. 9.12. IN VIEW OF THE ABOVE AND AFTER CONSIDERING THE FACTS IN TOTALITY, WE ARE OF THE VIEW THAT THE ISSUE IN THE PRESENT CASE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF THIS TRIBUNAL IN ITS O WN CASE FOR THE ASSESSMENT YEAR 2009-10 AS DISCUSSED ABOVE. 9.13. THE RELEVANT FINDING OF THE ITAT ORDER FOR THE ASSESSMENT 2009-10 IS EXTRACTED AS UNDER: ITA NO.2703/AHD/2017 POPULAR ESTATE MANAGEMENT LTD. VS. DCIT ASST .YEAR - 2012-13 - 22 - 16. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO RIVAL SUBMISSIONS. WE HAVE ALSO PERUSED THE RELEVANT CASE RECORD WITH ABLE TO ASSIS TANCE OF BOTH THE LEARNED COUNSEL. THE DISPUTE BETWEEN THE PARTIES IS QUA TREATMENT OF COM PENSATION RECEIPT IN QUESTION AMOUNTING TO RS.3.87CRORES. THE ASSESSEE'S CASE IS THAT IT IS A CAPITAL RECEIPT NOT TAXABLE AS BUSINESS INCOME OR CAPITAL GAINS. THE REVENUE ON THE OTHER HAND DRAWS SUPPORT FROM BOTH THE LOWER AUTHORITIES' ACTION ASSESSING THE SAME AS BUSINESS INCOME. THE ASSESSEE ADMITTEDLY IS IN REAL - ESTATE DEVELOPMENT BUSINESS. IT ENTERED INTO THE A BOVE IDENTICAL VERDICT THREE DEVELOPMENT AGREEMENTS WITH AS MANY VENDOR PARTIES FOLLOWED BY THE LATTER PAYING IT VARIABLE AMOUNTS IN QUESTION TOTALING TO RS.3.87 CRORES IN LIEU OF GETT ING FORMER'S RIGHT TO PREEMPTIVE PURCHASE OR RIGHT TO USE FOR SPECIFIC PERFORMANCE SURRENDERED I N THEIR FAVOUR. THERE IS NO EVIDENCE IN THE CASE FILE INDICATING THE ASSESSEE TO HAVE UNDERTAKE N EVEN A SINGLE ACTIVITY OF DEVELOPMENT IS ALL THREE PARCELS OF LAND. WE NOTICE IN THIS FACTUA L BACKDROP THAT HON'BLE JURISDICTIONAL HIGH COURT'S DECISION IN BARODA CEMENT AND CHEMICAL CASE (SUPRA) HOLDS THAT THE AMOUNT RECEIVED IN LIEU OF SUCH A RIGHT TO SUE AVAILABLE AFTER A VE NDOR BREACHING THE RELEVANT AGREEMENT IS NOT AN ACTIONABLE CLAIM SO AS TO BE TRANSFERRED U/S.6(E ) OF THE TRANSFER AND PROPERTY ACT GIVING RISE TO ASSESSABLE CAPITAL GAINS. THEIR LORDSHIP S OF CALCUTTA HIGH COURT (SUPRA) FURTHER REITERATE THE SAME VIEW MR. MADHU SUDAN'S CASE IS THAT THE AMOUNT IN QUESTION HAS BEEN RIGHTLY ASSESSED AS ASSESSEE'S BUSINESS IN COME. WE FIND NO MERIT IN THE INSTANT PLEA AS THE ASSESSEE HAS NEITHER PAID ANY CONSIDERATION MONEY NOR CARRIED OUT ANY DEVELOPMENT ACTIVITY. IT HAD MERELY OBTAINED A LICENSEE RIGHT TO ENTER INTO POSSESSION INTO THREE PARCELS OF LAND NOT CREATING ANY EASEMENT OR INTEREST THEREIN AS PER SECTION 52 OF THE EASEMENT LAW. WE FURTHER OBSERVE THAT THE ASSESSEE DEVELOPER COULD N OT HAVE ENTERED INTO FULL FLEDGED POSSESSION IN PERFORMANCE OF THE AGREEMENT IN VIEW OF STATUTORY BAR U/S. 63 OF THE BOMBAY TENANCY AND AGRICULTURAL LAND ACT, 1948 (APPLICABLE IN GUJARAT STATE). THERE IS NO MATERIAL INDICATING THE ABOVE LANDS BEING CONVERTED TO NON A GRICULTURAL. THE SAME SUFFICIENTLY INDICATES THAT ASSESSEE'S LICENSE RIGHT EXISTED ON PAPER ONLY. HON'BLE BOMBAY HIGH COURT'S DECISION IN MANOJ B. JOSHI'S CASE (SUPRA) HOLDS THA T SUCH AN AMOUNT IS NOT TO BE TAXED AS INCOME U/S.2(24) OF THE ACT. THIS TRIBUNAL'S CO-ORD INATE BENCH DECISION IN GOVINDBHAI C. PATEL'S CASE (SUPRA) ALSO IS OF THE VIEW THAT AN ID ENTICAL COMPENSATION SUM AS IN FACTS OF THE INSTANT CASE IS NOT A BUSINESS INCOME AS WELL SINCE NOT COVERED UNDER SPECIFIC INSTANCES U/S.28(VA) OF THE ACT. THE REVENUE'S STANDS THEREFO RE HOLDING BOTH DEVELOPMENT AND CANCELLATION AGREEMENTS IN ALL CASES IS NOT SUSTAIN ABLE IN VIEW OF THE SAME UNREGISTERED DOCUMENTS DOES NOT CARRY ANY MERIT AS SECTION 17 OF THE REGISTRATION LAW COULD NOT HAVE BEEN APPLIED IN VIEW OF BAR ON TRANSFER OF THE LAND S IN QUESTION. WE THUS OBSERVE THAT ASSESSEE'S ABOVE DEVELOPMENT LICENSE ACQUIRED IN IT S ALL THREE AGREEMENTS DOES NOT AMOUNT TO PART PERFORMANCE REQUIRING COMPULSORY REGISTRATION U/S. 17 OF THE REGISTRATION ACT. WE THEREFORE CONCLUDE IN THIS VIEW OF 'ALL THIS EVIDEN CE AS WELL AS LEGAL POSITION THAT THE IMPUGNED COMPENSATION AMOUNT IS NOT LIABLE TO BE TR EATED AS INCOME U/S.2(24) OF THE ACT NOR THE SAME IS TAXABLE AS CAPITAL GAIN FOR BUSINESS IN COME BEING IN THE NATURE OF A CAPITAL RECEIPT. 17. WE NOW ADVERT TO REVENUE'S STRONG EFFORT THAT T HE ASSESSEE'S MODUS OPERANDI IS THAT OF ENTERING INTO SUCH DEVELOPMENT AGREEMENTS IN ORDER TO EVADE PAYMENT OF TAXES (SUPRA). WE FIND INSTANT PLEA AS WELL TO BE DEVOID OF MERIT SIN CE THE DEPARTMENT HAS ITSELF ACCEPTED VENDORS' SO CALLED PALTRY CAPITAL GAINS IN THEIR AS SESSMENTS WHEREIN THEY HAVE CLAIMED THE ITA NO.2703/AHD/2017 POPULAR ESTATE MANAGEMENT LTD. VS. DCIT ASST .YEAR - 2012-13 - 23 - IMPUGNED PAYMENTS MADE TO THE ASSESSEE AS EXPENSES IN COMPUTATION OF THEIR RESPECTIVE INCOME WITHOUT QUESTIONING ANY GENUINENESS ELEMENT THEREIN. SO IS THE OUTCOME OF REVENUE'S NEXT PLEA THAT THE ASSESSEE HAD SURRENDERED ITS RIG HT TO SUE WITHOUT TAKING ANY LEGAL RECOURSE. WE OBSERVE IN THIS CONTEXT WITH THE ASSESSEE COULD VERY WELL BE TREATED AS AN AGGRIEVED PARTY AGAINST ITS VENDORS' ACTION EXECUTING SALE DEED IN FAVOUR OF THIRD PARTY VENDEES. THE REVENUE'S ARGUMENT THAT THE CANCELLATION DOCUMENT H AD BEEN PURCHASED WELL IN ADVANCE IS ALSO NOT RELEVANT SINCE IT IS NOT MANDATORY THAT TH E SAME OUGHT TO HAVE BEEN PURCHASED ON THE DATE OF CANCELLATION ONLY. WHAT IS MATERIAL IN THES E FACTS IS THAT THERE SHOULD BE A VALID DOCUMENT. THERE IS NO BAR IN STAMP LAW THAT ANY PAR TY CANNOT PURCHASE SUCH DOCUMENTS IN ADVANCE. THE REVENUE FAILS TO QUOTE ANY SUCH RULE W HICH COULD BE HELD AS TO HAVE BEEN VIOLATED IN SUCH AN ADVANCE PURCHASE OF STAMP PAPER S. WE FIND THAT REVENUE'S FURTHER ARGUMENT THAT NO PRUDENT ASSESSEE WOULD ENTER INTO SUCH A TRANSACTION ALSO DOES NOT DESERVE ACCEPTANCE SINCE THE ASSESSEE IN FACT HAS ACTED AS A PRUDENT ENTITY WHEREIN IT SUCCEEDED IN EXCESSIVE COMPENSATION AMOUNT NOT OTHERWISE TAXABLE BEING IN THE NATURE OF CAPITAL RECEIPT. WE FURTHER REJECT REVENUE'S NEXT ARGUMENT THAT THE ASSESSEE ITSELF HAD SHOWN THE IMPUGNED SUM AS ITS INCOME IN ITS BOOKS OF ACCOUNT IN VIEW O F HON'BLE APEX COURT'S DECISION IN TUTICORIN ALKALI CHEMICALS AND FERTILIZERS LTD. VS. CIT (1997 ) 6 SCC 117 (SC) TO CONCLUDE THAT AN ACCOUNTING TREATMENT IS NOT A DETERMINATIVE FACTOR IN DECIDING TAXABILITY OF RECEIPT. 18. THE REVENUE'S NEXT ARGUMENT IS BASED ON THE HON 'BLE APEX COURT'S LANDMARK DECISION IN ME DOWELL & CO. LTD., SUMATI DAYAL AND DURGA PRASAD MORE CASES (SUPRA) IN SEEKING TO TREAT ASSESSEE'S ABOVE DEVELOPMENT AND CANCELLATION AGREEMENT TO BE A METHOD EMPLOYED TO EVADE PAYMENT OF TAX AS BY ADOPTING COLORABLE DEVIC E. WE HAVE ALREADY CONCLUDED IN PRECEDING PARAGRAPHS THAT ASSESSEE'S ABOVE TRANSACT IONS ARE WELL WITHIN THE FOUR CORNERS OF LAW I.E. TRANSFER OF PROPERTY ACT, INDIAN REGISTRAT ION ACT AS WELL AS BOMBAY TENANCY & AGRICULTURAL LANDS ACT (SUPRA). THERE IS NO LAW VI OLATED IN THE SAME. ITS INSTANT CASE IS THEREFORE SQUARELY COVERED BY THE ABOVE JUDICIAL PR ECEDENT(S) HOLDING THE AMOUNT RECEIVED OF RS.3.87 CRORES AS A CAPITAL RECEIPT NO ASSESSABLE E ITHER AS CAPITAL GAINS OR BUSINESS INCOME. WE TAKE INTO ACCOUNT THE SAME TO CONCLUDE THAT THE ABOVE CASE LAW QUOTED AT REVENUES BEHEST IN SEEKING TO PIERCE CORPORATE VEIL IS WITHO UT ANY MERIT AS THE ASSESSEES ABOVE TRANSACTIONS ARE GENUINE ONES IN VIEW OF OUR FORGOI NG DISCUSSION. WE THEREFORE DELETE THE IMPUGNED ADDITION OF RS.3,87,27,804/-. 9.14. THUS, THE ISSUE WHICH HAS BEEN DECIDED BY T HIS TRIBUNAL IS BINDING ON US. AS THE FACTS IN THE CASE ON HAND ARE IDENTIC AL TO THE FACTS OF THE CASE AS DISCUSSED ABOVE, THEREFORE WE ARE BOUND TO FOLLOW THE SAME. WE CANNOT CHANGE THE STAND TAKEN BY THE ITAT IN THE OW N CASE OF THE ASSESSEE. REGARDING THIS WE FIND SUPPORT & GUIDANC E FROM THE JUDGMENT OF HONBLE GUJARAT HIGH COURT IN CASE OF AFFECTION INVESTMENTS LIMITED VS. ACIT [2010] 326 ITR 255 WHERE IT WAS HELD AS UN DER: ITA NO.2703/AHD/2017 POPULAR ESTATE MANAGEMENT LTD. VS. DCIT ASST .YEAR - 2012-13 - 24 - 6. THE LAW IS WELL SETTLED ON THIS SUBJECT. AS LAID D OWN BY THIS COURT IN CASE OF SAYAJI IRON & ENGG. CO. V. CIT [2002] 172 CTR (G UJ.) 339 : [2002] 253 ITR 749 (GUJ.),ONCE THE TRIBUNAL HAD COME TO THE CO NCLUSION THAT THE FACT SITUATION WAS IDENTICAL, TO THE ONE OBTAINING IN A DECIDED MA TTER, NO CO-ORDINATE BENCH OF THE TRIBUNAL HAS ANY RIGHT OR JURISDICTION TO RECORD A CONTRARY DECISION, ENTIRELY CONTRARY TO THE ONE REACHED BY ANOTHER CO ORDINATE BENCH OF THE SAME TRIBUNAL ON SAME SET OF FACTS AND CIRCUMSTANCES. MERE DIFFERENCE IN THE MEM BERS MANNING THE TRIBUNAL DOES NOT VEST THE SUBSEQUENT BENCH WITH SUCH POWER. THE PRINCIPLE IS BASED ON JUDICIAL PROPRIETY AND THE CONFIDENCE WHICH THE LITIGATING P UBLIC HAS IN JUDICIAL HIERARCHY AND THE INSTITUTION. THE ONLY COURSE, THAT IS OPEN TO T HE SUBSEQUENT CO-ORDINATE BENCH, WOULD BE TO MAKE A REFERENCE TO THE PRESIDENT OF TH E TRIBUNAL AS PROVIDED IN SECTION 255 (3) OF THE IT ACT, 1961 ('THE ACT') TO CONSTITU TE A SPECIAL BENCH TO RESOLVE THE CONTROVERSY. 9.15. WE ALSO FIND SUPPORT AND GUIDANCE FROM THE JUDGMENT OF HONBLE MADRAS HIGH COURT IN THE CASE OF CIT V. L.G. RAMAMU RTHI 1977 CTR (MAD.) 416 : [1977] 110 ITR 453 (MAD.) WHEREIN IT W AS HELD AS UNDER: 'NO TRIBUNAL OF FACT HAS ANY RIGHT OR JURISDICTION TO COME TO A CONCLUSION ENTIRELY CONTRARY TO THE ONE REACHED BY ANOTHER BENCH OF THE SAME TRIBUNAL ON THE SAME FACTS. IT MAY BE THAT THE MEMBERS WHO CONSTITUTED T HE TRIBUNAL AND DECIDED ON THE EARLIER OCCASION WERE DIFFERENT FROM THE MEMBERS WH O DECIDED THE CASE ON THE PRESENT OCCASION. BUT WHAT IS RELEVANT IS NOT THE P ERSONALITY OF THE OFFICERS PRESIDING OVER THE TRIBUNAL OR PARTICIPATING IN THE HEARING B UT THE TRIBUNAL AS AN INSTITUTION. IF IT IS TO BE CONCEDED THAT SIMPLY BECAUSE OF THE CHA NGE IN THE PERSONNEL OF THE OFFICERS WHO MANNED THE TRIBUNAL, IT IS OPEN TO THE NEW OFFI CERS TO COME TO A CONCLUSION TOTALLY CONTRADICTORY TO THE CONCLUSION WHICH HAD B EEN REACHED BY THE EARLIER OFFICERS MANNING THE SAME TRIBUNAL ON THE SAME SET OF FACTS, IT WILL NOT ONLY SHAKE THE CONFIDENCE OF THE PUBLIC IN JUDICIAL PROCEDURE AS S UCH, BUT IT WILL ALSO TOTALLY DESTROY SUCH CONFIDENCE. THE RESULT OF THIS WILL BE CONCLUS IONS BASED ON ARBITRARINESS AND WHIMS AND FANCIES OF THE INDIVIDUALS PRESIDING OVER THE COURTS OR THE TRIBUNALS AND NOT REACHED OBJECTIVELY ON THE BASIS OF THE FACTS P LACED BEFORE THE AUTHORITIES. IF A BENCH OF A TRIBUNAL ON THE IDENTICAL FACTS IS ALLOWED TO COME TO A CONCLUSION DIRECTLY OPPOSED TO THE CONCLUSION REACHED BY ANOTH ER BENCH OF THE TRIBUNAL ON AN EARLIER OCCASION, THAT WILL BE DESTRUCTIVE OF THE I NSTITUTIONAL INTEGRITY ITSELF. THAT IS THE REASON WHY IN A HIGH COURT, IF A SINGLE JUDGE TAKES A VIEW DIFFERENT FROM THE ONE TAKEN BY ANOTHER JUDGE ON A QUESTION OF LAW, HE DOE S NOT FINALLY PRONOUNCE HIS VIEW AND THE MATTER IS REFERRED TO A DIVISION BENCH. SIM ILARLY IF A DIVISION BENCH DIFFERS FROM THE VIEW TAKEN BY ANOTHER DIVISION BENCH IT DO ES NOT EXPRESS DISAGREEMENT AND PRONOUNCE ITS DIFFERENT VIEWS, BUT HAS THE MATTER P OSTED BEFORE A FULLER BENCH FOR CONSIDERING THE QUESTION. IF THAT IS THE POSITION E VEN WITH REGARD TO A QUESTION OF LAW, THE POSITION WILL BE A FORTIORI WITH REGARD TO A QU ESTION OF FACT. IF THE TRIBUNAL WANTS TO TAKE AN OPINION DIFFERENT FROM THE ONE TAKEN BY AN EARLIER BENCH, IT SHOULD PLACE ITA NO.2703/AHD/2017 POPULAR ESTATE MANAGEMENT LTD. VS. DCIT ASST .YEAR - 2012-13 - 25 - THE MATTER BEFORE THE PRESIDENT OF THE TRIBUNAL, SO THAT HE COULD HAVE THE CASE REFERRED TO A FULL BENCH OF THE TRIBUNAL CONSISTING OF THREE OR MORE MEMBERS FOR WHICH THERE IS PROVISION IN THE IT ACT ITSELF.' 9.16. WE ALSO FIND THAT THE HONBLE SUPREME COURT IN CASE OF AMBIKA PARSAD MISHRA VS. STATE OF U.P. AND OTHERS VIDE WRI T PETITION NO 1543 OF 1977 VIDE ORDER DATED 09-05-1980 HAS TAKEN THE SIMI LAR VIEW AS TAKEN BY THE HONBLE HIGH COURT (SUPRA) AS UNDER: THUS WE GET THE STATUTORY PERSPECTIVE OF AGRARIAN REFORM AND SO, THE CONSTITUTIONALITY OF THE ACT HAS TO BE TESTED ON TH E TOUCHSTONE OF ART 31A WHICH IS THE RELEVANT PROTECTIVE ARMOUR FOR LAND REFORM LAWS. EV EN HERE, WE MUST STATE THAT WHILE WE DO REFER TO THE RANGE OF CONSTITUTIONAL IMMUNITY ART. 31ACONFERS ON AGRARIAN REFORM MEASURES WE DO NOT REST OUR DECISION ON THAT PROVISION. INDEPENDENTLY OF ART. 31A, THE IMPUGNED LEGISLATION CAN WITHSTAND CONSTIT UTIONAL INVASION AND SO THE FURTHER CHALLENGE TO ART. 31A ITSELF IS OF NO CONSE QUENCE. THE COMPREHENSIVE VOCABULARY OF THAT PURPOSEFUL PROVISION OBVIOUSLY C ATCHES WITHIN ITS PROTECTIVE NET THE PRESENT ACT AND, BROADLY SPEAKING, THE ANTISEPT IC EFFECT OF THAT ARTICLE IS SUFFICIENT TO IMMUNISE THE ACT AGAINST INVALIDATION TO THE EXT ENT STATED THEREIN. THE EXTREME ARGUMENT THAT ART. 31A ITSELF IS VOID AS VIOLATIVE OF THE BASIC STRUCTURE OF THE CONSTITUTION HAS BEEN NEGATIVED BY MY LEARNED BROTH ER, BHAGWATI, J. IN A KINDRED GROUP OF CASES OF ANDHRA PRADESH. THE AMULET OF ART . 31A IS, THEREFORE, POTENT, SO FAR AS IT GOES, BUT BEYOND ITS AMBIT IT IS STILL POSSIB LE, AS COUNSEL HAVE ENDEAVOURED, TO SPIN OUT SOME SOUND ARGUMENT TO NULLIFY ONE SECT ION OR THE OTHER. SURELY, THE LEGISLATURE CANNOT RUN AMOK IN THE BLIND BELIEF THA T ART. 31A IS OMNIPOTENT. WE WILL EXAMINE THE ALLEGED INFIRMITIES IN DUE COURSE. IT I S SIGNIFICANT THAT EVEN APART FROM THE MANY DECISIONS UPHOLDING ART. 31A, GOLAK NATH'S CASE DECIDED BY A BENCH OF 11 JUDGES, WHILE HOLDING THAT THE CONSTITUTION (FIRST AMENDMENT) ACT EXCEEDED THE CONSTITUENT POWER STILL CATEGORICALLY DECLARED THAT THE SAID AMENDMENT AND A FEW OTHER LIKE AMENDMENTS WOULD BE HELD GOOD BASED ON T HE DOCTRINE OF PROSPECTIVE OVER- RULING. THE RESULT, FOR OUR PURPOSE, IS THAT EVEN G OLAK NATH'S CASE HAS HELD ART. 31A VALID. THE NOTE STRUCK BY LATER CASES REVERSING GOL AKNATH DOES NOT MILITATE AGAINST THE VIRES OF ART. 31A. SUFFICE IT TO SAY THAT IN TH E KESAVANANDA BHARATI'S CASE. ARTICLE 31A WAS CHALLENGED AS BEYOND THE AMENDATORY POWER O F PARLIAMENT AND, THEREFORE, INVALID. BUT, AFTER LISTENING TO THE MARATHON ERUDI TION FROM EMINENT COUNSEL, A 13 JUDGES BENCH OF THIS COURT UPHELD THE VIRES OF ARTI CLE 31A IN UNEQUIVOCAL TERMS. THAT DECISION BINDS, ON THE SIMPLE SCORE OF STARE DECISI S AND THE CONSTITUTIONAL GROUND OF ART. 141. EVERY NOW DISCOVERY OR ARGUMENTATIVE N OVELTY CANNOT UNDO OR COMPEL RECONSIDERATION OF A BINDING PRECEDENT. IN THIS VIE W, OTHER SUBMISSIONS SPARKLING WITH CREATIVE INGENUITY AND PRESENTED WITH HIGH-PRE SSURE ADVOCACY, CANNOT PERSUADE US TO RE-OPEN, WHAT WAS LAID DOWN FOR THE GUIDANCE OF THE NATION AS A SOLEMN PRE- POSION BY THE EPIC FUNDAMENTAL RIGHTS CASE. FROM KA MESHWAR SINGH AND GOLAK NATH (SUPRA) THROUGH KESAVANANDA (SUPRA) AND KANAN DEVAN TO GWALIOR RAYONS ITA NO.2703/AHD/2017 POPULAR ESTATE MANAGEMENT LTD. VS. DCIT ASST .YEAR - 2012-13 - 26 - AND AFTER ART. 31A HAS STOOD JUDICIAL SCRUTINY ALTH OUGH, AS STATED EARLIER, WE DO NOT BASE THE CONCLUSION ON ART. 31A. EVEN SO, IT IS FUN DAMENTAL THAT THE NATION'S CONSTITUTION IS NOT KEPT IN CONSTANT UNCERTAINTY BY JUDICIAL REVIEW EVERY SEASON BECAUSE IT PARALYSES, BY PERENNIAL SUSPENSE, ALL LE GISLATIVE AND ADMINISTRATIVE ACTION ON VITAL ISSUES DETERRED BY THE BROODING THREAT OF FORENSIC BLOWUP. THIS, IF PERMITTED, MAY WELL BE A KIND OF JUDICIAL DESTABILISATION OF S TATE ACTION TOO DANGEROUS TO BE INDULGED IN SAVE WHERE NATIONAL. CRISIS OF GREAT MO MENT TO THE LIFE, LIBERTY AND SAFETY OF THIS COUNTRY AND ITS MILLIONS ARE AT STAKE, OR T HE BASIC DIRECTION OF THE NATION ITSELF IS IN PERIL OF A SHAKEUP. IT IS SURELY WRONG TO PRO VE JUSTICE ROBERTS OF THE UNITED STATES SUPREME COURT RIGHT WHEN HE SAID. 10. IN VIEW OF THE IDENTICAL ISSUE RAISED BEFOR E US IN THE GROUND OF APPEAL WHICH HAS ALREADY BEEN CONSIDERED BY THE ITA T AS DISCUSSED ABOVE, WE ARE TAKING THE SAME VIEW FOR THE YEAR UND ER CONSIDERATION. 11. IT IS ALSO PERTINENT TO NOTE THAT THE PARTIES I NVOLVED IN THE ENTIRE FLOW OF TRANSACTIONS NAMELY, THE ASSESSEE, SOCIETIE S AND THE BUYERS OF THE LAND WHO ARE SEPARATE TAXABLE AND INDEPENDENT PERSO NS/ ENTITIES VIZ A VIZ COMPLYING THE PROVISIONS OF THE ACT. THUS THE AMOUN T OF THE COMPENSATION RECEIVED BY THE ASSESSEE FOR RELINQUIS HMENT OF ITS RIGHT TO SUE FROM SOCIETIES TO AVOID THE LITIGATION CANNOT B E TREATED AS A COLORABLE DEVICE. HENCE, THE AMOUNT RECEIVED AS COMPENSATION IN VIEW OF SAID RIGHT IS NOT CHARGEABLE TO TAX. IN THIS REGARD WE FIND SU PPORT AND GUIDANCE FROM THE ORDER OF THIS TRIBUNAL IN THE CASE OF BHOJISON INFRASTRUCTURE PVT. LTD. VS. ITO REPORTED IN 99 TAXMANN.COM 26 WHEREIN IT WA S HELD AS UNDER: 10.1 THE ESSENCE OF LONG LIST OF JUDICIAL PRONOUNCEMENT S CITED ON BEHALF OF ASSESSEE IS THAT SECTION 6 OF THE TRANSFER OF PROPERTY ACT WHIC H USES THE SAME EXPRESSION 'PROPERTY OF ANY KIND' IN THE CONTEXT OF TRANSFERAB ILITY MAKES AN EXCEPTION IN THE CASE OF A MERE RIGHT TO SUE. THE DECISIONS THEREUNDER MA KE IT ABUNDANTLY CLEAR THAT THE 'RIGHT TO SUE' FOR DAMAGES IS NOT AN ACTIONABLE CLA IM. IT CANNOT BE ASSIGNED. TRANSFER OF SUCH A RIGHT IS OPPOSED TO PUBLIC POLICY AS IT T ANTAMOUNTS TO GAMBLING IN LITIGATION. ITA NO.2703/AHD/2017 POPULAR ESTATE MANAGEMENT LTD. VS. DCIT ASST .YEAR - 2012-13 - 27 - HENCE, SUCH A 'RIGHT TO SUE' DOES NOT CONSTITUTE A 'CAPITAL ASSET' WHICH IN TURN HAS TO BE 'AN INTEREST IN PROPERTY OF ANY KIND'. DESPITE T HE DEFINITION OF EXPRESSION 'CAPITAL ASSET' IN THE WIDEST POSSIBLE TERMS IN SECTION 2(14 ) OF THE ACT, A RIGHT TO A CAPITAL ASSET MUST FALL WITH THE EXPRESSION 'PROPERTY OF AN Y KIND' SUBJECT TO CERTAIN EXCLUSIONS. NOTWITHSTANDING WIDEST IMPORT ASSIGNED TO THE TERM 'PROPERTY' WHICH SIGNIFIES EVERY POSSIBLE INTEREST WHICH A PERSON CA N HOLD AND ENJOY, THE 'RIGHT TO SUE' IS A RIGHT IN PERSONAM AND SUCH RIGHT CANNOT CERTAI NLY BE TRANSFERRED. IN ORDER TO ATTRACT THE CHARGE OF TAX ON CAPITAL GAINS, THE SIN E QUA NON IS THAT THE RECEIPT MUST HAVE ORIGINATED IN A 'TRANSFER' WITHIN THE MEANING OF SECTION 45 R.W.S. 2(47) OF THE ACT. IN THE ABSENCE OF ITS TRANSFERABILITY, THE COM PENSATION/DAMAGES RECEIVED BY ASSESSEE IS NOT ASSESSABLE AS CAPITAL GAINS. 10.2 THE CO-ORDINATE BENCH OF ITAT, AHMEDABAD IN THE CA SE OF SHEKHAR G. PATEL DATED 19.03.2014 RELIED UPON ON BEHALF OF THE ASSESSEE HAS MADE REFERENCE TO HOST OF JUDICIAL PRONOUNCEMENTS INCLUDING THE DECIS ION OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF BARODA CEMENT AND CHEMICALS LT D. (SUPRA) AND CONCLUDED THE ISSUE IN FAVOUR OF ASSESSEE. THE CO-ORDINATE BENCH HIGHLIGHTED THE RELEVANT PART OF THE DECISION OF THE HON'BLE GUJARAT HIGH COURT WHIC H IS REPRODUCED HEREUNDER: '18. THE ASSESSEE HAD UNDOUBTEDLY A RIGHT TO SUE M/ S K.C.P. LTD. FOR DAMAGES FOR BREACH OF CONTRACT. INSTEAD OF LITIGATING IN A COURT OF LAW, THE PARTIES ARRIVED AT A SETTLEMENT WHEREUNDER COMPENSATION IN THE SUM OF RS.1,40,000 CAME TO BE PAID IN FULL AND FINAL SATISFACTION TO THE ASSESSEE . COUNSEL FOR THE REVENUE CONTENDS THAT THE COMPROMISE/ARRANGEMENT RESULTED I N EXTINGUISHMENT OF THE ASSESSEE'S RIGHT TO SUE FOR DAMAGES WITHIN THE MEAN ING OF S. 2(47) OF THE ACT. WHILE ACCEPTING THIS CONTENTION THE TRIBUNAL HAS PL ACED RELIANCE ON THE DECISION OF THIS COURT IN CIT V. R.M. AMIN (1971) 82 ITR 194 (GUJ) . IN THAT CASE THIS COURT OBSERVED THAT THE USE OF THE WORD 'INCLUDE' I N THE DEFINITION OF THE WORD 'TRANSFER' IN S. 2(47) WAS INTENDED TO ENLARGE THE MEANING OF 'TRANSFER' BEYOND ITS NATURAL IMPORT SO AS TO INCLUDE EXTINGUISHMENT/RELI NQUISHMENT OF RIGHTS IN THE CAPITAL ASSET FOR THE PURPOSE OF S. 45 OF THE ACT. SINCE THE TRANSFER CONTEMPLATED BY S. 45 IS ONE AS A RESULT WHEREOF CONSIDERATION H AS PASSED TO THE ASSESSEE OR HAS ACCRUED TO HIM, EXTINGUISHMENT OF THE RIGHT MUS T RELATE TO THAT 'CAPITAL ASSET', CORPOREAL OR INCORPOREAL. IT IS, THEREFORE OBVIOUS THAT A TRANSFER OF A CAPITAL ASSET IN ORDER TO ATTRACT LIABILITY TO TAX UNDER THE HEAD 'CAPITAL GAINS' MUST BE A 'TRANSFER' AS A RESULT WHEREOF SOME CONSI DERATION IS RECEIVED BY OR ACCRUES TO THE ASSESSEE. IF THE TRANSFER DOES NOT Y IELD ANY CONSIDERATION, THE COMPUTATION OF PROFITS OR GAINS AS PROVIDED BY S. 4 8 OF THE ACT WOULD NOT BE POSSIBLE. IF THE TRANSFER TAKES EFFECT ON EXTINGUIS HMENT OF A RIGHT IN THE CAPITAL ASSET, THERE MUST BE RECEIPT OF CONSIDERATION FOR S UCH EXTINGUISHMENT TO ATTRACT LIABILITY TO TAX. NOW, IN LEGAL PARLANCE, THE TERMS 'CONSIDERATION' AND 'COMPENSATION' OR 'DAMAGES' HAVE DISTINCT CONNOTATI ONS. THE FORMER IN THE CONTEXT OF SS. 45 AND 48 WOULD CONNOTE PAYMENT OF A SUM OF MONEY TO SECURE TRANSFER OF A CAPITAL ASSET; THE LATTER WOULD SUGGE ST PAYMENT TO MAKE AMENDS FOR LOSS OR INJURY OCCASIONED ON THE BREACH OF CONTRACT OR TORT. BOTH SS. 45 AND 48 POSTULATE THE EXISTENCE OF A CAPITAL ASSET AND THE CONSIDERATION RECEIVED ON ITA NO.2703/AHD/2017 POPULAR ESTATE MANAGEMENT LTD. VS. DCIT ASST .YEAR - 2012-13 - 28 - TRANSFER THEREOF. BUT, AS DISCUSSED EARLIER, ONCE T HERE IS A BREACH OF CONTRACT BY ONE PARTY AND THE OTHER PARTY DOES NOT KEEP IT ALIV E BUT ACQUIESCES IN THE BREACH AND DECIDES TO RECEIVE COMPENSATION THEREFOR, THE I NJURED PARTY CANNOT HAVE ANY RIGHT IN THE CAPITAL ASSET WHICH COULD BE TRANSFERR ED BY EXTINGUISHMENT TO THE DEFAULTER FOR VALUABLE CONSIDERATION. THAT IS BECAU SE A RIGHT TO SUE FOR DAMAGES NOT BEING AN ACTIONABLE CLAIM, A CAPITAL ASSET, THE RE COULD BE NO QUESTION OF TRANSFER BY EXTINGUISHMENT OF THE ASSESSEE'S RIGHTS THEREIN SINCE SUCH A TRANSFER WOULD BE HIT BY S. 6(E) OF THE TRANSFER OF PROPERTY ACT. IN ANY VIEW OF THE MATTER, IT IS DIFFICULT TO HOLD THAT THE SUM OF RS.1,40,000 RECEIVED BY WAY OF COMPENSATION BY THE ASSESSEE WAS CONSIDERATION FOR THE TRANSFER OF A CAPITAL ASSET.' 10.3 THE HON'BLE GUJARAT HIGH COURT IN BARODA CEMENT (S UPRA), IN TURN, REFERRED TO THE CONCEPT OF BREACH OF CONTRACT AS DISCUSSED BY T HE HON'BLE BOMBAY HIGH COURT IN THE CASE OF IRON AND HARDWARE (INDIA) CO. V. SHAMLA L & BROS. AIR 1954 BOM 423 AS UNDER (P. 645 OF 158 ITR): '10. CHAGLA, C.J., HAD AN OCCASION TO CONSIDER THIS ASPECT OF THE LAW IN IRON AND HARDWARE (INDIA) CO. V. SHAMLAL & BROS. AIR 1954 BO M 423. THE LEARNED CHIEF JUSTICE OBSERVED AS UNDER (P. 425) : 'IT IS WELL SETTLED THAT WHEN THERE IS A BREACH OF CONTRACT, THE ONLY RIGHT THAT ACCRUES TO THE PERSON WHO COMPLAINS OF THE BREACH I S THE RIGHT TO FILE A SUIT FOR RECOVERING DAMAGES. THE BREACH OF CONTRACT DOES NOT GIVE RISE TO ANY DEBT AND, THEREFORE, IT HAS BEEN HELD THAT A RIGHT TO RECOVER ASSIGNABLE BECAUSE IT IS NOT A CHOSE-IN-ACTION. AN ACTIONABLE CLAIM CAN BE ASSIGNE D, BUT IN ORDER THAT THERE SHOULD BE AN ACTIONABLE CLAIM THERE MUST BE A DEBT IN THE SENSE OF AN EXISTING OBLIGATION. BUT INASMUCH AS A BREACH OF CONTRACT DO ES NOT RESULT IN ANY EXISTING OBLIGATION ON THE PART OF THE PERSON WHO COMMITS TH E BREACH, THE RIGHT TO RECOVER DAMAGES IS NOT AN ACTIONABLE CLAIM AND CANN OT BE ASSIGNED.' PROCEEDING FURTHER, THE LEARNED CHIEF JUSTICE STATE D (P. 425) : 'IN MY OPINION, IT WOULD NOT BE TRUE TO SAY THAT A PERSON WHO COMMITS A BREACH OF THE CONTRACT INCURS ANY PECUNIARY LIABILITY, NOR WOULD IT BE TRUE TO SAY THAT THE OTHER PARTY TO THE CONTRACT WHO COMPLAINS OF THE BR EACH HAS ANY AMOUNT DUE TO HIM FROM THE OTHER PARTY. AS ALREADY STATED, THE ONLY RIGHT WHICH HE HAS THE RIGHT TO GO TO A COURT OF LAW AND RECOVER DAMAGES. NOW, DAMAGES ARE THE COMPENSAT ION WHICH A COURT OF LAW GIVES TO A PARTY FOR THE INJURY WHICH HE HAS SU STAINED. BUT, AND THIS IS MOST IMPORTANT TO NOTE, HE DOES NOT GET DAMAGES OR COMPE NSATION BY REASON OF ANY EXISTING OBLIGATION ON THE PART OF THE PERSON WHO H AS COMMITTED THE BREACH. HE GETS COMPENSATION AS A RESULT OF THE FIAT OF THE CO URT, THEREFORE, NO PECUNIARY LIABILITY ARISES TILL THE COURT HAS DETERMINED THAT THE PARTY COMPLAINING OF THE BREACH IS ENTITLED TO DAMAGES. THEREFORE, WHEN DAMA GES ARE ASSESSED, IT WOULD ITA NO.2703/AHD/2017 POPULAR ESTATE MANAGEMENT LTD. VS. DCIT ASST .YEAR - 2012-13 - 29 - NOT BE TRUE TO SAY THAT WHAT THE COURT IS DOING IS ASCERTAINING A PECUNIARY LIABILITY WHICH ALREADY EXISTS. THE COURT IN THE FI RST PLACE MUST DECIDE THAT THE DEFENDANT IS LIABLE IS LIABLE AND THEN IT PROCEEDS TO ASSESS WHAT THAT LIABILITY IS. BUT TILL THAT DETERMINATION THERE IS NO LIABILITY A T ALL UPON THE DEFENDANT.' IT WOULD APPEAR FROM THE ABOVE OBSERVATIONS THAT ON BREACH OF CONTRACT THE DEFAULTER DOES NOT INCUR ANY PECUNIARY LIABILITY NO R DOES THE INJURED PARTY BECOMES ENTITLED TO ANY SPECIFIC AMOUNT, BUT HE ONL Y HAS A RIGHT TO SUE AND CLAIM DAMAGES WHICH MAY OR MAY NOT BE DECREED IN HI S FAVOUR. HE WILL HAVE TO PROVE (I) THAT THE OPPOSITE PARTY HAD COMMITTED BRE ACH OF CONTRACT AND (II) THAT HE HAD SUFFERED PECUNIARY LOSS ON ACCOUNT THEREOF. 11. THE ABOVE OBSERVATIONS OF CHAGLA, CJ., WERE QUO TED WITH APPROVAL BY THE SUPREME COURT IN UNION OF INDIA V. RAMAN IRON FOUND RY AIR 1974 SC 1265. IN PARA 9 OF THE JUDGMENT, THE SUPREME COURT CONSIDERE D THE CLAIM FOR LIQUIDATED DAMAGES FOR BREACH OF CONTRACT BETWEEN THE PARTIES. POINTING OUT THAT SO FAR AS THE LAW IN INDIA IS CONCERNED, THERE IS NO QUALITAT IVE DIFFERENCE IN THE NATURE OF THE CLAIM, WHETHER IT BE FOR LIQUIDATED DAMAGES OR UNLIQUIDATED DAMAGES, THE SUPREME COURT PROCEEDED TO STATE THE LAW AS UNDER ( P. 1273): ''WHEN THERE IS A BREACH OF CONTRACT, THE PARTY WHO COMMITS THE BREACH DOES NOT EO INSTANTI INCUR ANY PECUNIARY OBLIGATION, NOR DOE S THE PARTY COMPLAINING OF THE BREACH BECOMES ENTITLED TO A DEBT DUE FROM THE OTHER PARTY. THE ONLY RIGHT WHICH THE PARTY AGGRIEVED BY THE BREACH OF THE CONT RACT HAS IS THE RIGHT TO SUE FOR DAMAGES. THAT IS NOT AN ACTIONABLE CLAIM AND TH IS POSITION IS MADE AMPLY CLEAR BY THE AMENDMENT IN S. 6(E) OF THE TRANSFER O F PROPERTY ACT, WHICH PROVIDES THAT A MERE RIGHT TO SUE FOR DAMAGES CANNO T BE TRANSFERRED.' QUOTING THE STATEMENT OF LAW ENUNCIATED BY CHAGLA C .J., WHICH IS EXTRACTED EARLIER, THE SUPREME COURT STATED (P. 1273) : 'THIS STATEMENT IN OUR VIEW REPRESENTS THE CORRECT LEGAL POSITION AND HAS OUR F ULL CONCURRENCE'. 12. IT WOULD SEEM WELL-SETTLED FROM THE ABOVE DISCU SSION THAT AFTER THERE IS A BREACH OF CONTRACT FOR SALE OF GOODS, NOTHING IS LE FT IN THE INJURED PARTY SAVE THE RIGHT TO SUE FOR DAMAGES OR SPECIFIC PERFORMANCE WH ICH CANNOT BE TRANSFERRED UNDER S. 6(E) OF THE TRANSFER OF PROPERTY ACT SINCE IT IS A MERE RIGHT TO SUE AND NOT AN ACTIONABLE CLAIM.' 10.4 IN VIEW OF THE ABOVE FACTS AND IN THE LIGHT OF PLE THORA OF CASE LAWS RELIED UPON, WE ARE DISPOSED TO HOLD THAT THE RECEIPT TOWARDS CO MPENSATION IN LIEU OF 'RIGHT TO SUE' IS OF CAPITAL NATURE WHICH IS NOT CHARGEABLE TO TAX UNDER S.45 OF THE ACT. IN VIEW OF THE ABOVE AND AFTER CONSIDERING THE FACT S IN TOTALITY AS DISCUSSED ABOVE, WE SET ASIDE THE ORDER OF THE LEAR NED CIT-A AND DIRECT ITA NO.2703/AHD/2017 POPULAR ESTATE MANAGEMENT LTD. VS. DCIT ASST .YEAR - 2012-13 - 30 - THE AO TO DELETE THE ADDITION MADE BY HIM. HENCE TH E GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 08/01/2020 SD/- SD/- ( RAJPAL YADAV ) ( WASEEM AHMED ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 08/01/2020 &.., .(.. / T.C. NAIR, SR. PS !'#' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. )*+ , / CONCERNED CIT 4. , ( ) / THE CIT(A)-9, AHMEDABAD 5. /01 ((*+ , *+# , ) / DR, ITAT, AHMEDABAD 6. 145 6 / GUARD FILE. / BY ORDER, / ( //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION 23.12.2019 ( WORD PROCESSED BY HONBLE AM IN HIS COMPUTER BY DRA GON ) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 24.12.2019/8.1.2020 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.8.1.2020 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 8.1.2020 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER