GEETA LALIT SUNEJA, MUMBAI V. ITO 20(1)(2), MUMBAI

ITA 2759/MUM/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4213 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 11-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V S JADHAVDR
• Assessee Lawyers: D H AKALI
• Keywords: Rectification of order; Principle of natural justice; Cost of acquisition
• Section: 154

Judgement Text

, - , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC, MUMBAI , ! ' , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, ITA NO.2759/MUM/2015 ASSESSMENT YEAR: 2009-10 MRS. GEETA LALIT SUNEJA, 502, HARSHA-II, RAHEJA COMPLEX, SEVEN BUNGLOW, ANDHERI (W), MUMBAI-400061 / VS. INCOME TAX OFFICER-20(1)(2) MUMBAI / ASSESSEE / REVENUE P.A. NO. AEOPS1522B $ % & / ASSESSEE BY SHRI D.H. AKALI $ % & / REVENUE BY SHRI V.S. JADHAV-DR / DATE OF HEARING 21/01/2016 & / DATE OF ORDER: 01/02/2016 & / O R D E R THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DATED 26/02/2015 OF THE LD. FIRST APPELLATE AUTHORI TY, MUMBAI. THE ONLY GROUND RAISED/AGITATED IN THIS APP EAL PERTAINS TO NON-CONSIDERATION OF SUBMISSIONS OF THE ITA NO.2759/MUM/2015 GEETA LALIT SUNEJA 2 ASSESSEE AND ALSO THE APPLICATION FILED U/S 154 OF THE ACT WITH RESPECT TO CAPITAL GAIN ON SALE OF TDR AS EXEM PT, BASED UPON DECISION OF THE TRIBUNAL IN THE CASE OF ITO VS SHRI HEMANTDAS J. PARIYANI (ITA NO.2508/MUM/2010) AND CBDT CIRCULAR NO.68 DATED 17/11/1971. 2. DURING HEARING OF THIS APPEAL, THE LD. COUNSEL FOR THE ASSESSEE, SHRI D.H. AKALI, ADVANCED ARGUMEN TS WHICH ARE IDENTICAL TO THE GROUND RAISED BY INVITIN G MY ATTENTION TO PAGES 35 TO 42 OF THE PAPER BOOK ALONG WITH THE SUBMISSIONS MADE BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS). ON THE OTHER HAND, SHRI V.S. JADHAV, DEFENDED THE CONCLUSION ARRIVED AT IN THE IMPUGNED ORDER. 2.1. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS , IN BRIEF, ARE THAT THE ASSESSEE, AN INDIVIDUAL, DURING THE RELEVANT PERIOD, WAS HAVING INCOME FROM HOUSE PROPE RTY, OTHER SOURCES, TUITION FEES AND CAPITAL GAINS, ETC, DECLARED INCOME OF RS.8,49,998/- IN HER RETURN FILED ON 20/07/2009, WHICH WAS PROCESSED U/S 143(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT). DURING THE RELEVANT PERIOD, THE ASSESSEE RECEIVED SHARE OF COMPENSATION FROM THE DEVELOPER ON SURRENDER OF EXC ESS FSI IN WHICH THE ASSESSEE WAS HITHERTO RESIDING. AS PER THE ASSESSEE, SHE WAS LEGAL OWNER OF FLAT NO. A/64, HAVING AREA OF 450 SQ. FT, ACQUIRED VIDE AGREEMENT DATED ITA NO.2759/MUM/2015 GEETA LALIT SUNEJA 3 01/08/1993 FOR RS.5 LAKH IN SUNIL NIWAS CHS LTD. AN D HAVING FIVE SHARE IN THE SOCIETY. THE SAID SOCIETY UNDER THE PREVAILING DEVELOPMENT CONTROL RULES OF FOR GREATER MUMBAI-1991 TOOK THE ENTIRE SOCIETY BUILDING FOR REDEVELOPMENT, BEING VERY OLD AND UNSAFE TO CONTINU E TO RESIDE AND THUS ENTERED INTO AGREEMENT WITH THE REDEVELOPER. AS PER THE ASSESSEE THE DEVELOPMENT CO NTROL RULES PROVIDE FOR NORMAL FSI OF 1:1 FOR DEVELOPMEN T OF RESIDENTIAL FLATS, WHEN OLD RESIDENTIAL/SLUMS ARE T AKEN FOR REDEVELOPMENT, TO COMPENSATE THE REDEVELOPER TO PRO VIDE NEW FLATS TO THE EXISTING OCCUPANTS, AN HIGHER FSI OF TO 2.00 AND ABOVE IS PROVIDED UNDER THE RULES. THE ASS ESSEE CLAIMED CAPITAL GAIN OF RS.7,06,400/-, ON ACCOUNT O F COMPENSATION RECEIVED FROM REDEVELOPER ON THE OCCAS ION OF REDEVELOPMENT FOR THE TRANSFER OF FSI INCREASED RIG HTS. THE ASSESSEE PAID ADVANCE TAX OF RS.1,38,020/- ON THE S AME. THE CLAIM OF THE ASSESSEE IS THAT, WHILE FILING THE RETURN IN JULY 2009, THERE WAS NO CLARITY ON THE TAXABILITY O F THE COMPENSATION RECEIVED ON THE SURRENDER OF THE FSI, GRANTED UNDER THE DEVELOPMENT CONTROL REGULATIONS F OR GREATER MUMBAI-1991, HENCE, THE ASSESSEE DECLARED T HIS COMPENSATION AS INCOME FROM CAPITAL GAINS ON SURREN DER OF EXCESS FSI, BY WAY OF ABUNDANT CAUTION AND PAID THE ADVANCE TAX. THEREAFTER, THE TRIBUNAL VIDE ORDER D ATED 29/04/2011, IN THE CASE OF ITO VS SHRI HEMANTDAS J. PARIYANI (ITA NO.2508/MUM/2010) HOLDING THAT THE COMPENSATION RECEIVED ON SURRENDER OF FSI, UNDER TH E ITA NO.2759/MUM/2015 GEETA LALIT SUNEJA 4 DEVELOPMENT CONTROL REGULATION FOR GREATER MUMBAI-1 991, IS NOT TAXABLE AS CAPITAL GAIN AS IT HAS NO COST OF ACQUISITION. IT WAS ASSERTED BY THE LD. COUNSEL T HAT NO FURTHER APPEAL WAS FILED AGAINST THIS AFORESAID DEC ISION. FURTHER, AS PER ASSESSEE AND CBDT CIRCULAR NO.68 DATED 17/11/1971, IT WAS CLARIFIED THAT A MISTAKE A RISING AS A RESULT OF SUBSEQUENT INTERPRETATION OF LAW BY THE SUPREME COURT WOULD CONSTITUTE A MISTAKE APPARENT F ROM RECORD AND RECTIFICATION ORDER U/S 154 OF THE ACT W OULD BE AN ORDER. IT WAS CLAIMED THAT THIS CIRCULAR IS APPL ICABLE TO THE CASE OF THE ASSESSEE AS THE FUNDAMENTAL PURPOSE OF THE CIRCULAR IS TO COVER THE TERM A MISTAKE APPARE NT FROM RECORD AND THE LD. ASSESSING OFFICER DID NOT CONSI DER THE APPLICATION OF THE ASSESSEE FILED U/S 154 OF THE AC T ON 01/05/2012, WHICH WAS REJECTED BY HIM. RELIANCE WA S PLACED UPON THE DECISION IN THE CASE OF ASIAN TECHS LTD. 243 ITR 262 (KERALA) AND LASKHMI PRASAD LAKHAR 74 TAXMAN 112 (GUWAHATI). IN VIEW OF THE SUBMISSIONS OF THE ASSESSEE AND THE FOREGOING DISCUSSION AND ALSO THE MANDATE OF ARTICL E 265 OF THE CONSTITUTION OF INDIA, I AM OF THE VIEW THAT ONLY DUE TAXES HAS TO BE LEVIED/COLLECTED, THEREFORE, CONSID ERING THE PRINCIPLE OF NATURAL JUSTICE, THAT NO PERSON SHOULD BE CONDEMNED UNHEARD, THIS APPEAL IS SENT TO THE FILE OF THE LD. ASSESSING OFFICER TO CONSIDER THE CBDT CIRCULAR NO.68 AND THE AFORESAID DECISION OF THE TRIBUNAL ALONG WI TH THE ITA NO.2759/MUM/2015 GEETA LALIT SUNEJA 5 AGREEMENT AND AFTER PROVIDING DUE OPPORTUNITY OF BE ING HEARD TO THE ASSESSEE, DECIDE IN ACCORDANCE WITH LA W. THE ASSESSEE IS AT LIBERTY TO FURNISH EVIDENCE/MATERIAL , IF ANY, IN SUPPORT OF HER CLAIM, THUS, THE APPEAL OF THE AS SESSEE IS ALLOWED FOR STATISTICAL PURPOSES ONLY. IT IS WORTH MENTIONING HERE THAT RECONSIDERATION AT THE LEVEL O F THE LD. ASSESSING OFFICER WAS EVEN NOT OBJECTED BY THE LD. DR. FINALLY, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES ONLY. THIS ORDER WAS PRONOUNCED IN THE OPEN IN THE PRESENCE OF LD. REPRESENTATIVE FROM BOTH SIDES AT T HE CONCLUSION OF THE HEARING ON 21/01/2016. SD/- (JOGINDER SINGH) ! ' / JUDICIAL MEMBER MUMBAI; DATED : 01/02/2016 F{X~{T? P.S / ! & $ )!*+ ,&+-* / COPY OF THE ORDER FORWARDED TO : 1. '#$%& / THE APPELLANT 2. '(%& / THE RESPONDENT. 3. ) ) * ( '#$ ) / THE CIT, MUMBAI. 4. ) ) * / CIT(A)- , MUMBAI 5. -./ ' , ) '#$ ' 1 , / DR, ITAT, MUMBAI 6. /2 3$ / GUARD FILE. & / BY ORDER, (-# ' //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI