KAILASH JYOTI PREMISES NO. 1 CO. OP. HSG SOCIETY LTD, MUMBAI V. ITO 22(1)(3), NAVI MUMBAI

ITA 2918/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 48886 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-05-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 13-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJEEV AGARWAL
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A, MUMBAI BEFORE SHRI R.S.SYAL, AM AND SHRI VIJAY PAL RAO, JM ITA NOS. 4490 & 2918/MUM/2010 : AS ST.YEARS 2004-2005 & 2005-2006 M/S.KAILASH JYOTI PREMISES NO.1 CO- OPERATIVE HOUSING SOCIETY LIMITED DERASAR LANE, GHATKOPAR (EAST) MUMBAI 400 077. PAN : AAAAK4636P. VS. THE INCOME TAX OFFICER WARD 22(1)(3) MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI TARUN GHIA RESPONDENT BY : SHRI RAJEEV AGARWAL O R D E R PER R.S.SYAL, AM : THESE TWO APPEALS BY THE ASSESSEE ARISE OUT OF THE ORDERS PASSED BY THE CIT(A) ON 23.03.2010 AND 08.02.2010 IN RELATION TO ASSESSM ENT YEARS 2004-2005 AND 2005-2006. SINCE BOTH THE APPEAL S ARE BASED ON SIMILAR FACTS AND CIRCUMSTANCES, WE ARE, THEREFORE, DISPOSI NG THEM OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. THE GROUND CHALLENGING INITIATION OF RE ASSESSMENT PROCEEDINGS IN BOTH THE YEARS HAS NOT BEEN PR ESSED BY THE LEARNED A.R. THE SAM E IS, THEREFORE, DISMISSED. 3. ON MERITS, THE FACTS OF THE CASE ARE THAT THE ASSES SMENT FOR ASSESSMENT YEAR 2005-2006 WAS FINALIZED ON 18.12.2008 U/S. 143(3) R.W.S. 147 DETERMINING TOTAL INCOME AT RS.2,42,90,317 ON PROTECTIVE BASIS. IN THAT ASSESSMENT, LONG TERM CAPITAL GAIN ON THE TRANSFER OF DEVELOPMENT RIGHT S WAS DETERMINED AT RS.2,42,56,000. THE ASSESSEES CLAIM OF EXEMPTION OF SUCH CA PITAL GAIN WAS REJECTED. THE A.O. NOTED THAT THE AGREEMENT FOR TRANSFER OF DEVE LOPMENT RIGHT WAS ENTERED INTO BETWEEN M/S.MOHATA CAPITAL SERVICES PRIVATE LIM ITED AND THE ASSESSEE SOCIETY DATED ITA NOS. 4490 & 2918/MUM/2010 M/S.KAILASH JYOTI PREMISES NO.1 CHS LIMITED. 2 12.08.2003 AND THE CONSIDERATION WAS RECEIVE D IN THE YEAR ENDING 31.03.2005 ON THE TRANSFER OF SUCH DEVELOPMENT RIGH T DURING THE ASSESSMENT YEAR 2004-2005. HE, THEREFORE, MADE TH E ASSESSMENT IN ASSESSMENT YEAR 2005-2006 ON PROTECTIVE BASIS, AND THE SUBSTANTIVE A SSESSMENT WAS MADE IN ASSESSMENT YEAR 2004-2005. IN COMING TO THE CONCLUSION THAT THE C ONSIDERATION RECEIVED IN LIEU OF TRANSFER OF DEVELOPMENT RIGHTS WAS TAXABLE, THE ASSESSING OFFICE R RELIED ON ORDER PASSED BY THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF MA HESWAR PRAKASH-2 CO-OP. HOUSING SOCIETY LTD. VS. ITO [(2008) 24 SOT 366 (MUM.)]. NO RELIEF WAS ALLOWED IN THE FIRST APPEAL. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RE LEVANT MATERIAL ON RECORD. FROM THE COPY OF AGREEMENT OF TH E ASSESSEE WITH THE DEVELOPER, AVAILABLE AT PAGE 103 ONWARDS OF THE PAPER BOOK, IT IS SEEN THAT THE ASSESSEE TRANSFERRED ADDITIONAL FSI. IT WAS THE OBL IGATION OF THE BUILDER TO PROCURE TDRS. THE MUMBAI BENCH OF THE TRIBUNAL IN JETHALAL D.MEHTA VS. DCIT [(2005) 2 SOT 366 (MUM)] HAS HELD NO LIABILITY UNDER THE HEAD CAPITAL GA IN ARISES WHEN THE ASSESSEE TRANSFERS TDRS FOR EQUIVALENT FSI. TH E SAME VIEW HAS BEEN TAKE N BY THE MUMBAI BENCH OF THE TRIBUNAL IN M/S.NEW SHAILAJA CHS LI MITED VS. ITO IN ITA NO.512/MUM/2007 VIDE ITS ORDER DATED 02.12.2008, COPY OF WHICH IS AVAILABLE ON RECORD. EVEN THE ORDER RELIED UPON BY THE AUTHORITIES BELOW FOR REJECTING THE ASSESSEES CLAIM IN MAHESWAR PRAKASH-2 CO-OP. HOUSING SOCI ETY LTD. HAS ALSO RENDERED THE ULTIMATE DECISION IN FAVOUR OF THAT ASSESSEE BY RELYING ON THE ORDE R OF THE CO-ORDINATE BENCH IN JETHALAL D.MEHTA (SUPRA). IN THESE CASES IT HA S ALSO BEEN HELD THAT THE PROVISIONS OF SECTION 55(2)(A) ARE NOT APPLICABLE IN SU CH A SITUATION. UNDER THESE CIRCUMSTANCES WE ARE OF THE CONSIDERED OPINION THAT THE AS SESSEE WAS RIGHTLY NOT CHARGEABLE TO TAX IN RESPECT OF THE TRANSFER OF FSI EITHER IN ASSESSMENT YEAR 2004-2005 OR IN 2005- 2006. WE, THEREFORE, OVERTURN TH E IMPUGNED ORDERS ON THIS ISSUE. ITA NOS. 4490 & 2918/MUM/2010 M/S.KAILASH JYOTI PREMISES NO.1 CHS LIMITED. 3 5. IN THE RESULT, BOTH THE APPEALS ARE ALLOWED. ORDER PRONOUNCED ON THIS 18 TH DAY OF MAY, 2011 . SD/- SD/- (VIJAY PAL RAO) (R.S.SYAL) JUDICIAL MEMBER A CCOUNTANT MEMBER MUMBAI : 18 TH MAY, 2011. DEVDAS* COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT CONCERNED 4. THE CIT(A) - XXXIII. 5. THE DR/ITAT, MUMBAI. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR, ITAT, MUMBAI.