SHEELA DANIEL, MUMBAI V. ITO 21(2)(4), MUMBAI

ITA 2811/MUM/2015

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 5631 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 19-10-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 12-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Gift; Borrowed satisfaction; Set aside
• Section: 271(1)(c); 143(3); 56(2); 143(1); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI RAJESH KUMAR , AM AND SHRI AMARJIT SINGH, JM / I .T.A. NO. 2811 / MUM/ 201 5 ( / ASSESSMENT YEAR: 20 06 - 07 ) MS. SHEELA DANIEL 21, NUPUR, NEAR JEWEL NURSIN G HOME, GULMOHAR CROSS ROAD NO - 5, JVPD SCHEME, MUMBAI - 400049 . / VS. ITO 21(2)(4) BANDRA (E), MUMBAI - 51. ./ ./ PAN/GIR NO. : AEFPD 6933 C ( / APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING : 18 / 0 7 / 201 9 / DATE OF PRONOUNCEMENT : 19 / 07 / 201 9 / O R D E R PER AMARJI T SINGH, J M: THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER DATED 09 . 03 .201 5 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 38 , MUMBAI [HEREINAFTE R REFERRED TO AS THE CIT(A)] RELEVANT TO THE A.Y. 20 06 - 07 . 2 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: - 1. IN THE FACTS AND THE CIRCUMSTANCES OF THE EASE ARID IN LA', THE LEARNED A.O. ERRED IN PASSING THE ORDER U/S 143(3) R.W.S 147 ONLY ON THE BASIS OF INFORMATION RECEIVED FROM DDIT (INV) UNIT - 9(3), THEREFORE RENDERING THE WHOLE ASSESSM ENT BAD IN LAW WHICH IS BASED ON BORROWED SATISFACTION. ASSESSEE BY : SHR I BHUPENDRA SHAH REVENUE BY: SHRI CHAUDHARY ARUN KUMAR SINGH (SR. AR) ITA NO. 2811 / M/201 5 A.Y.20 06 - 07 2 2. THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED A.O. ERRED IN DISREGARDING THE FACT THAT THE SOCIETY WAS THE OWNER OF THE FLAT AS ON 31/03/2006 AND NOT THE APPELLANT AND THEREFO RE NO ADDITION COULD BE MADE IN THE A.Y. 2006 - 07. 3. IN THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW. THE LEARNED A.O. ERRED IN ADOPTING THE DATE OF THE SALE AGREEMENT EXECUTED ON 23/08/2005 BETWEEN THE SOCIETY AND THE DEVELOPER AS THE DATE OF TR ANSFER OF FLAT TO THE APPELLANT BY DISREGARDING CIRCULAR DATED 12/06/2006 ISSUED BY THE SOCIETY. 4. IN THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED A.O. ERRED IN ASSESSING INCOME FROM OTHER SOURCES AMOUNTING TO RS.19,18,875/ - AS AGAI NST A SUM OF ALLEGED CONCEALMENT MENTIONED IN THE REASONS RECORDED AMOUNTING TO RS.24,07,400/, 5. IN THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED AA). ERRED IN ADDING A SUM OF RS. 19,18,875/ - U/S 56(2)(V) ONLY ON THE BASIS OF PRESUMP TION AND SURMISES. 6. THE ASSESSING OFFICER WRONGLY CHARGED INTEREST U/S 234 AND INITIATED PENALTY U/S 271(1)(C). 7. IN THE FACTS AND THE CIRCUMSTANCES OF LAW, THE LD COMMISSIONER OF INCOME TAX(A) ERRED IN CONFIRMING ALL THE MENTIONED GROUNDS. THE APPELLAN T THEREFORE PRAYS AS FOLLOWS. I. TO QUASH THE REOPENING MADE ON THE BASIS OF REASONS RECORDED FROM BORROWED SATISFACTION. 2. TO DELETE THE ADDITION WRONGLY MADE IN THE HANDS OF THE APPELLANT IN A.Y. 2006 - 07 EVEN THOUGH SHE WAS NOT THE OWNER OF THE SAID FLA T. 3. TO DELETE THE ADDITION MADE BY DISREGARDING ALLOTMENT LETTER DATED 12/0612006 AND WRONGLY RELYING UPON AGREEMENT DATED 23/08/2005. 4. TO DELETE THE ADDITION MADE AMOUNTING TO RS.19,18,875/ - EVEN THOUGH THE REASONS RECORDED MENTIONED THE CONCEALMENT O F RS.24,07.400/, 5. TO DELETE THE ADDITION WRONGLY MADE U/S 56(2)(V) EVEN THOUGH THE SAME DOES NOT APPLY TO ALLEGED GIFT IN KIND IN A.Y. 2006 - 07. 6. TO DELETE THE INTEREST CHARGED U/S 234 AND INITIATION OF PENALTY U/S 271(1)(C) . ITA NO. 2811 / M/201 5 A.Y.20 06 - 07 3 THE APPELLANT RESERVE RI GHTS TO ADD ALTER OR DELETE ANY PORTION OF THIS APPEAL BEFORE ITS CONCLUSION. THIS APPEAL IS FILED IN TIME AND MAY PLEASE BE ALLOWED IN FULL. A DETAILED PAPER BOOK ALONG WITH CASE LAWS WILL BE SUBMITTED AT THE TIME OF HEARING. 3 . THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED HER RETU RN OF IN COME ON 21 . 0 6 .20 0 6 DECLARING TAXABLE INCOME TO THE TUNE OF RS.1,09,712 / - FOR THE A.Y.2006 - 07 . THE RETURN WAS PROCESSED U/S 143(1) OF THE I.T. ACT, 1961 . THE CASE OF THE ASSESSEE WAS REOPENED BY WAY OF I SSUANCE OF NOTICE U/S 148 DATED 03.03.2014 AFTER RECORDING THE REASONS MENTIONED BELOW: - 'IN THIS CASE, AN INFORMATION WAS RECEIVED FROM INVESTIGATION WING THAT THE ASSESSEE HAD BEEN ALLOTTED A FLAT FREE OF COST BY THE SOCIETY (M/S. GREATER BOMBAY CO - OPE RATIVE HOUSING SOCIETY) AND THE REGISTERED AGREEMENT WAS EXECUTED ON 2310812005. IT WAS FURTHER STATED THAT AS THE AGREEMENT WAS REGISTERED ON 23.08.2005. THE FLAT COST SHOULD BE TAXED IN THE HANDS OF THE FLAT HOLDER IN F. Y. 2005 - 06 RELEVANT TO A. Y. 2006 - 07. BASED ON THE ABOVE INFORMATION, THE CASE WAS RE - OPENED FOR A. Y. 2006 - 07 DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR A. Y 2006 - 07, THE ASSESSEE VIDE LETTER DATED 11.02.2014 HAS STATED THAT THOUGH THE REGISTERED AGREEMENT WAS DATED 2310812005, THE FLAT WAS PURCHASED BY THE SACIETY (M/S. GREATER BOMBAY CO - OPERATIVE HOUSING SOCIETY) AND HANDED OVER TO HER ON 12.6.2006. THUS THE ASSESSEE HAS TAKEN A STAND THAT THE INCOME, IF ANY, ON THE VALUE OF FLAT RECEIVED BY HER SHOULD BE TAXED IN A. Y. 2007 - 08 AS THE TITLE AND POSSESSION OF THE FLAT WAS RECEIVED BY HER ONLY IN THE F. Y. 2006 - 07 RELEVANT TO A. Y 2007 - 08. SINCE THE ASSESSEE HERSELF HAS AGREED THAT SHE HAS TAKEN THE POSSESSION OF FLAT ON 12/06/2006 AND HAS TAKEN THE PLEA THAT THE INCOME ON ACCOUNT OF THE RECEIPT OF THE FLAT FREE OF COST WILL FALL IN A.Y.2007 - 08 RELEVANT TO THE F. Y,2006 - 07, IT IS CLEAR THAT THERE IS ESCAPEMENT OF INCOME TO THE EXTENT OF RS. 19,18,875/ - WITHIN THE MEANING OF THE PROVISIONS OF SECTION 147 OF THE I. T. ACT, 1961. HENCE, I HAVE REASONS TO BELIEVE THAT THE INCOME OF THE ASSESSEE HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF THE PROVISIONS OF SECTION 147 OF THE I T. ACT, 1961. ITA NO. 2811 / M/201 5 A.Y.20 06 - 07 4 THE CASE IS BEING REOPENED BY WAY OF ISSUE OF NOTICE U/S 148 OF THE IT ACT.' 4. IN REPLY TO THE NOTIC E , THE ASSESSEE FILED THE REPLY AND AFTER CONSIDERING THE REPLY OF THE ASSESSEE, THE AMOUNT IN SUM OF RS.19,18,875/ - WAS ADDED TO THE INCOME OF THE ASSESSEE WHICH WAS CONSIDERED AS VALUE OF FLATS IN VIEW OF THE PROVISIONS U/S 56(2)(V) OF THE ACT. FEELING A GGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) WHO CONFIRMED THE ADDITION OF THE AO , THEREFORE, THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE US. 5 . HOWEVER, THE ASSESSEE HAS TAKEN THE MULTIPLE GROUNDS BUT THE MAIN GROUND IS IN CONNECTION WITH THE ADDITION OF RS. 19,18,875/ - BY AO BY THE INVOKING THE PROVISIONS U/S 56(2)(V) OF THE ACT. AT THE VERY OUTSET, THE LD. REPRESENTATIVE OF THE ASSESSEE HAS ARGUED THAT THE SIMILAR ISSUE IN CONNECTION WITH THE SAME SOCIETY IN WHICH THE ASSESSEE GOT THE FLA T HAS BEEN DECIDED BY HONBLE ITAT IN ITA. NO.4175/M/2016 DATED 06.01.2017 FOR THE A.Y. 2006 - 07 , THEREFORE, IN THE SAID CIRCUMSTANCES, THE CLAIM OF THE ASSESSEE IS LIABLE TO BE ALLOWED IN THE INTEREST OF JUSTICE. HOWEVER, ON THE OTHER HAND, THE LD. REPRESE NTATIVE OF THE DEPARTMENT HAS REFUTED THE SAID CONTENTION . COPY OF ORDER DATED 06.01.2017 IS ON THE FILE IN WHICH THE RELEVANT FINDING HAS BEEN GIVEN IN PARA NO.6 WHICH IS HEREBY REPRODUCED AS UNDER: - 6. I HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS. THE FACTS IN THE PRESENT CASE LIE IN A NARROW COMPASS, AS NOTED IN THE EARLIER PARAGRAPHS. IT IS ALSO EMERGING FROM THE ORDERS OF THE AUTHORITIES BELOW THAT THE POSSESSION OF SAID FLAT WAS GIVEN TO THE ASSESSEE ON 19.6.2006. IN THE INSTANT ASSESSMENT YEAR, CORRESPONDING TO THE PREVIOUS YEAR 1.4.2005 TO 31.3.2006, THE ASSESSING OFFICER HAS MADE OUT A CASE THAT ASSESSEE OBTAINED A RIGHT TO GET A FLAT FREE OF COST IN VIEW OF THE MEMORANDUM OF UNDERSTANDING SIGNED BETWEEN THE SOCIETY AND M/S. EMERALD REALTORS P VT. LTD. ON 17.8.2005. NO DOUBT, IN TERMS OF SEC. 56(2)(V) OF THE ACT, AS ITA NO. 2811 / M/201 5 A.Y.20 06 - 07 5 IT STOOD FOR ASSESSMENT YEAR 2006 - 07, ANY SUM OF MONEY EXCEEDING A SPECIFIED AMOUNT RECEIVED WITHOUT CONSIDERATION WAS LIABLE TO BE ASSESSED. SO HOWEVER, IT IS NOT THE CASE OF ASSE SSING OFFICER THAT ASSESSEE HAS RECEIVED THE AMOUNT OF RS.18,61,648/ - IN THE SHAPE OF MONEY. THE CASE MADE OUT IS THAT ASSESSEE HAS OBTAINED A RIGHT TO GET A PROPERTY FREE OF COST. QUITE CLEARLY, THE SAME IS NOT A SUM OF MONEY WHICH IS LIABLE TO BE INCLU DED IN SEC. 56(2)(V) OF THE ACT AS IT STOOD FOR ASSESSMENT YEAR 2006 - 07. NOTABLY, FINANCE (NO. 2) ACT, 2009 AMENDED SEC. 56(2) OF THE ACT BY INSERTING A NEW CLAUSE (VII) TO PROVIDE THAT THE VALUE OF ANY PROPERTY RECEIVED WITHOUT CONSIDERATION OR FOR AN INA DEQUATE CONSIDERATION WILL ALSO BE TAXED AS INCOME FROM OTHER SOURCES. THE SAID AMENDMENT IS EFFECTIVE FROM 1.10.2009. IN ANY CASE, IT IS NOT A CASE OF ASSESSING OFFICER THAT ASSESSEE HAS RECEIVED ANY IMMOVEABLE PROPERTY AND, THEREFORE, QUA THE INSTANT A SSESSMENT YEAR THE ACTION OF ASSESSING OFFICER IS BEYOND JURISDICTION. FURTHERMORE, EVEN IF ONE IS TO CONSIDER THAT WHAT IS TAXED BY ASSESSING OFFICER IS A RIGHT TO GET PROPERTY, WHICH IS A MOVEABLE PROPERTY, YET IT IS NOT EQUIVALENT TO ANY SUM OF MONEY WHICH ALONE CAN BE TAXED U/S 56(2)(V) OF THE ACT IN THE INSTANT ASSESSMENT YEAR. THEREFORE, IN THIS VIEW OF THE MATTER, IT HAS TO BE HELD THAT THE STAND OF ASSESSING OFFICER IS WITHOUT JURISDICTION AND IS HEREBY SET ASIDE. 6 . IN THE INSTANT CASE ALSO THE ASSESSEE GOT THE POSSESSION ON DATED 12.06.2006. IN THE INSTANT ASSESSMENT YEAR, CORRESPONDING TO THE PREVIOUS YEAR ON W.E.F. 01.04.2005 & 31.03.2006, THE AO HAS MADE OUT A CASE THAT ASSESSEE OBTAINED A RIGHT TO GET A FLAT FREE OF COST IN VIEW OF THE MEMOR ANDUM OF UNDERSTANDING SIGNED BETWEEN THE SOCIETY AND M/S. EMERALD REALTORS PVT. LTD. ON 17.08.2005. AS PER SECTION 56(2)(V) OF THE ACT ANY SUM OF MONEY EXCEEDING A SPECIFIED AMOUNT RECEIVED WITHOUT CONSIDERATION WILL BE TAXED AS INCOME FROM OTHER SOURCES. THE AMENDMENT WAS EFFECTED W.E.F 01.10.2009. IT IS NOT A CASE OF THE ASSESSEE THAT HE HAS RECEIVED ANY IMMOVABLE PROPERTY. MOREOVER, EVEN IF ONE IS TO CONSIDER THAT WHAT IS TAXED BY AO IS A RIGHT TO GET PROPERTY, WHICH IS A MOVABLE PROPERTY YET IT IS NOT EQUIVALENT TO ANY SUM OF MONEY WHICH ALONE CAN BE TAXED U/S 56(2)(V) OF THE ACT IN THE INSTANT ASSESSMENT YEAR. ACCORDINGLY, THE FINDING ITA NO. 2811 / M/201 5 A.Y.20 06 - 07 6 OF THE CIT(A) IS NOT JUSTIFIABLE . BY HONORING THE DECISION OF THE HONBLE ITAT DATED 06.01.2017 (SUPRA), WE SET ASIDE T HE FINDING OF THE CIT(A) ON THIS ISSUE AND DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE. 7 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS HEREBY ORDERED TO BE ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 19 /07 /2019 . SD/ - SD/ - ( RAJESH KUMAR ) (AMARJIT SINGH) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; DATED : 19 / 07 / 2019 V IJAY /SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. / BY ORDER, //TRUE COPY// / / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI