ITO 24(3)(4), MUMBAI V. RONAK MARBLE INDUSTRIES, MUMBAI

ITA 3318/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8148 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 01-03-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 02-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PURSHOTTAM KUMAR
• Assessee Lawyers: DR P DANIAL
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Question of law; Cost of acquisition; Competent authority
• Section: 50C; 147; 54

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL BENCH D MUMBAI BEFORE SHRI D.T.GARASIA , JM AND SHRI RAJESH KUMAR, AM I.T.A. NO. 3318 /MUM/20 1 5 ( / ASSESSMENT YEAR : 20 09 - 10 ) THE INCOME TAX OFFICER , 24 (3)( 4 ), ROOM NO. 517, PIRAMAL CHAMBERS, LALBAUG, PAREL, MUMBAI - 400012 / VS. M/S RONAK MARBLE INDUSTRIES C/O MR. ABDUL MOMIN GAZDHAR, ROOM NO.5 AND 6, BLDG NO.19, TEMKAR STREET, NAGPADA, MUMBAI - 400008 I.T.A. NO. 3045 /MUM/20 16 ( / ASS ESSMENT YEAR : 2009 - 10 ) M/S RONAK MARBLE INDUSTRIES C/O MR. ABDUL MOMIN GAZDHAR, ROOM NO.5 AND 6, BLDG NO.19, TEMKAR STREET, NAGPADA, MUMBAI - 400008 / VS. THE INCOME TAX OFFICER, 24(3)(4), (EARSTWHILE KNOWN AS WARD 20(2)(4), ROOM NO. 517, 5 TH FLOO R, PIRAMAL CHAMBERS, LALBAUG, PAREL, MUMBAI - 400012 ./ PAN : AAA FR2351R ( / APPELLANT) : ( / RESPONDENT ) / REVENUE BY : SHRI PURSHOTTAM KUMAR / ASSESSEE BY : DR.P.DANIAL / DATE OF HEARING : 1.3.2017 / DATE OF PRONOUNCEMENT : 14. 3. 201 7 / O R D E R PER RAJESH KUMAR, A. M: THESE ARE THE CROSS APPEALS FILED BY THE RESPECTIVE PARTIES AND DIRECTED AGAINST THE ORDER DATED 23.3.2015 PASSED BY THE LD.CIT(A) - 36, MUMBAI FOR THE 2 I.T.A. NO.3318/MUM/2015 I.T.A. NO.3045/MUM/20 16 ASSESSMENT YEAR 2009 - 10 . THESE APPEALS WERE CLUBBED TOGETHER, HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER, FOR THE SAKE OF CONVENIENCE. ITA NO.3045/MUM/2016 2. THE GROUNDS OF APPEAL TAKEN BY THE ASSESSE E ARE AS UNDER : UND R MENTIONED GROUNDS OF APPEAL ARE WITHOUT PREJUDICE TO ONE ANOTHER: 1. FIRST GROUND OF APPEAL: 1.1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 36 MUMBAI (CIT - APPEAL) HAS ERRED IN CONFIRMING THE ORDER OF ASSESSING OFFICER ( AO) BY ALLOWING PARTLY BY REDUCING THE ADDITION BY 35% ONLY WITHOUT ANY EXPRESS REASON AND CONCLUSIVE EVIDENCE. 1.2. THE LEARNED CIT (APPEALS) FAILED TO CONSIDER THAT THE ADDITIONS BY THE AO ARE ARBITRARY IN NATURE, BASED ON ASSUMPTION AND WITHOUT CONSID ERING FACTS OF THE AGREEMENT ON WHICH THE ADDITION IS BASED. 2. SECOND GROUND OF APPEAL: 2.1. THE LEARNED CIT (APPEALS) ERRED IN CONFIRMING THE ADDITION TO THE EXTENT OF 65% OF RS.5,00,38,800/ - I.E. RS.3,25,25,220/ - BY THE AO BASED ON MISINTERPRETATIO N OF THE TERMS AND THE FACTS OF THE AGREEMENT FOR DEVELOPMENT ENTERED BY THE APPELLANT FIRM. 2.2. THE LEARNED CIT (APPEALS), ERRED IN LAW AND ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE BY CONFIRMING THE ADDITION TO THE EXTENT OF 65% WITHOUT CONSIDERI NG THE FACT THAT THERE IS NO SALE OR TRANSFER OF ANY PROPERTY OR ANY RIGHT ON THE PROPERTY OWNED BY THE APPELLANT FIRM TO ANY PARTY IN ANY MANNER. THE APPELLANT FIRM MERELY ENTERED INTO AN AGREEMENT BY WHICH THE COST OF CONSTRUCTION INCLUDING INCIDENTAL EXPENSES TO BE BORNE BY THE OTHER PART IN LIEU OF 35% RIGHTS ON THE CONSTRUCTED 3 I.T.A. NO.3318/MUM/2015 I.T.A. NO.3045/MUM/20 16 BUILDING, WHEN COMPLETED, WITHOUT ANY RIGHT OF OWNERSHIP OR ON TITLE OF THE LAND WHICH IS OWNED BY THE APPELLANT FIRM. THUS, THE SHARE OF 35% GIVEN TO THE OTHER PART IS EQUIVAL ENT TO THE COST OF CONSTRUCTION IN THE HANDS OF THE APPELLANT FIRM. 2.3. THE LEARNED CIT (APPEALS), FAILED TO CONSIDER THE FACT THAT THE APPELLANT FIRM IS LIABLE TO PAY ANY TAX ONLY WHEN THEY SELL ANY PORTION OF PROPERTY OUT OF RETAINED 65% OF THE CONSTR UCTED BUILDING, WHEN COMPLETED. 2.4. THE LEARNED CIT (APPEALS), FAILED TO NOTE THAT THE AGREEMENT WAS REGISTERED ONLY FOR THE AUTHENTICITY OF THE CONTRACT AND THE STAMP DUTY PAID WAS JUST 1 % AND NOT AS APPLICABLE TO CONVEYANCE OR SALE OF THE PROPERTY WH ICH IS AS MUCH AS 6% 3. THE ADDITIONAL GROUNDS OF APPEAL TAKEN BY THE ASSESSEE ARE AS UNDER : 1. THE LEARNED CIT(A) ERRED IN CONFIRMING THAT THE ESTIMATED FULL VALUE OF CONSIDERATION FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAINS WHICH WAS IN THE WOM B OF THE FUTURE IGNORING THE POSITION OF LAW THAT FULL VALUE OF CONSIDERATION C A NNOT BE ESTIMATED UNDER SEC. 48 OF THE INCOME TAX ACT, 1961. 2. THE LEARNED CIT(A) ERRED IN CONFIRMING THAT THE TRANSACTION UNDER DEVELOPMENT AGREEMENT WITH MLS. NANAVATI CON ST RUCTIONS AS A TRANSFER U/S. 2(4 7)(V) AS ON THE D A TE OF ENTERING THE AGREEMENT. 3. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ESTIMATION OF FULL VALUE OF CONSIDERATION FOR THE PURPOSE OF THE COMPUTATION OF CAPITAL GAIN WHEN ASSESSEE CLAIMED THAT CAPITAL GAIN IS NOT COMPUTABLE AS THE CONSIDERATION HAS NEITHER BEEN RECEIVED OR ACCRUED DURING THE YEAR UNDER ASSESSMENT. 4. THE LEARNED A.O. & CIT(A) ERRED IN APPLYING THE VALUATION U/S. 50C OF THE INCOME TAX ACT, 1961 ON THE DEVELOPMENT AGREEMENT AND TAXING THE SAME AS CAPITAL GAIN. 5. THE LEARNED CIT(A) ERRED M TAXING THE CAPITAL GAIN AS THE 4 I.T.A. NO.3318/MUM/2015 I.T.A. NO.3045/MUM/20 16 CONSIDERATION IN THE FORM OF CONSTRUCTED AREA OF 65% IS CONCERNED, THE SAME WAS NEITHER RECEIVED NOR HAD ACCRUED AND HENCE NO OCCASION TO BRING IT TO TAX COULD ARISE . 4. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LD.AR ON THE ADMISSIONS OF ADDITIONAL GROUNDS AND ALSO LD DR AND RESPECTFULLY FOLLOWING THE DECISION N TPC LIMITED VS THE UNION OF INDIA ON 22 AUGUST, 2011 (SC), WE ADMIT THE ADDITIONAL GROUNDS TAKEN BY THE ASSESSEE FOR ADJUDICATION. 5. SINCE THE GROUNDS OF APPEAL TAKEN IN THE ORIGINAL APPEAL MEMO AND IN THE APPLICATION FOR ADDITIONAL GROUND AS STATED HEREINA BOVE ARE INTER CONNECTED AND ARE BEING DECID ED TOGETHER HEREINAFTER. 6. THE ONLY ISSUE RAIS ED BY THE ASSESSEE IS AGAINST THE CONFIRMATION OF ADDIT ION TO THE EXTENT OF RS. 3,25,25,220/ - ( BEING 65% OF RS.5,32,98,000/ - ) BY THE CIT(A) AS AGAINST RS. 5,32,98,000/ - MADE BY THE AO AND ALSO THAT THE AUTHORITIES BELOW HAVE ERRED IN ESTIMATING THE CONSID ERATION AND ALSO ERRED IN TREATING THE TRANSACTION OF ENTERING INTO DEVELOPMENT AGREEMENT AS TRANSFER WITHIN THE MEANING OF SECTION 2(47)(V) OF THE ACT . 7 . FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE OWN S A PIECE OF LAND 844.49 SQ. METERS WITH FAC TORY PREMISES THEREON . T HE ASSESSEE IN ORDER TO DEVELOP THE SAID PROPERTY ENTERED INTO AN AGREEMENT DATED 21.4.2008 WITH M/S NANAVATI CONSTRUCTION WHEREUNDER THE ASSESSEE WAS TO RETAIN 65% OF TOTAL 5 I.T.A. NO.3318/MUM/2015 I.T.A. NO.3045/MUM/20 16 CONSTRUCT ED AREA AND THE BALANCE OF 35% OF THE TOTAL CO NSTRUCTED AREA WOULD GO TO THE DEVELOPER. TH E CONSTRUCTED AREA WOULD PASS ON TO THE ASSESSEE AS WELL AS THE DEVELOPER UPON THE DEVELOPMENT OF THE PROPERTY. ACCORDINGLY THE CONSTRUCTION OF THE BUILDING WAS TAKEN UP AND COMMENCED BY THE DEVELOPER AFTER OBT AINING REQUISITE APPROVAL S /PERMISSION S FROM THE VARIOUS AUTHORITIES . T HE DEVELOPER M/S NANAVATI CONSTRUCTION WAS GIVEN ACCESS TO THE LAND ONLY FOR THE PURPOSES OF DEVELOPMENT OF THE PROPERTY. THE DEVELOPER WAS NOT AUTHORIZED TO EITHER SELL OR ENTERED INT O AN AGREEMENT FOR SALE ON BEHALF OF THE OF ASSESSEES SHARES OF CONSTRUCTED AREA. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO OBSERVED THAT THE ASSESSEE HAS NOT RETURNED CAPITAL GAINS UPON THE EXECUTION OF DEVELOPMENT AGREEMENT . THE AO ASCERTAINED THE MARKET VALUE OF THE SAID PIECE OF LAND AT RS.5,32,98,000/ - BEING MARKET VALUE AS PER THE STAMP DUTY VALUATION AUTHORITY. THE CAPITAL GAIN WAS CALCULATED AFTER ALLOWING THE DEDUCTION IN RESPECT OF COST OF ACQUISITION AND ASSESSED THE TOTAL INCOME AT RS.5,00,38,800 / - VIDE ORDER PASSED UNDER SECTION 143 READ WITH SECTION 147 OF THE INCOME TAX ACT, 1961. AGGRIEVED BY THE ORDER OF THE AO , THE ASSESSEE HAS PREFERRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY, WHO VIDE PARA 5.2. 7 TO 5.2.10 DISMISSED THE APPEAL OF THE ASSESSEE AS UNDER : 5.2.7 FROM THE SUBMISSIONS MADE IN APPEAL, IT IS GATHERED THAT THE CONSTRUCTION WORK WAS DELAYED AND A SUIT WAS FILED BEFORE THE HIGH COURT BY SOME OF THE PARTNERS OF THE APPELLANT FIRM. A PERUSAL OF THE CONTENTS OF THE SAID SUIT REVEAL THAT PURSUANT TO THE DEVELOPMENT AGREEMENT, THE DEVELOPER OBTAINED 10D/CC BEGAN THE CONSTRUCTION WORK. THE SUIT ALSO INDICATES THAT THE CONSTRUCTION WORK NOT HAVING BEEN COMPLETED IN THE 6 I.T.A. NO.3318/MUM/2015 I.T.A. NO.3045/MUM/20 16 STIPULATED PERIOD OF 24 MONTHS FROM GRANT OF I OD I.E. 24 MONTHS FROM 11/06/2009, THE APPLICANTS COMPUTED THAT THEY SUFFERED A LOSS OF RS.18,00,000/ - PER MONTH WHICH WAS SOUGHT FROM THE DEVELOPER THROUGH WRITTEN CORRESPONDENCE {REFER CLAUSES (V) TO (XII) ON PAGES 7 - 10} AND THAT ACCORDINGLY THEY SOUGHT ARBITRATION. IT IS FURTHER ELABORATED THAT THE ARBITRATION WAS NOT FOLLOWED THROUGH BY THE DEVELOPERS AND HENCE THE PRESENT SUIT WAS FILED BY THE APPLICANTS. FURTHER INFORMATION WAS CALLED FROM M/S NANAVATI CONSTRUCTIONS DURING THE COURSE OF APPELLATE PR OCEEDINGS AND VIDE LETTER DATED 04/03/2015, THE SAID PARTY CONFIRMED THAT THE PROJECT WAS 90% COMPLETE AND THAT THE OC WAS AWAITED. 5.2.8 THUS IN THE PRESENT CASE, IT IS CLEAR THAT THE CONDITIONS REQUIRED FOR THE TRANSFER EXIST AND IT IS ONLY SUBSEQUENT LY, THAT THE MATTER HAS BECOME DISPUTE D ON THE ISSUE OF COMPENSATION FOR DELAY IN THE PROJECT. DURING APPEAL HEARINGS TH E AR STATED THAT, AS ON DATE, THE CONSTRUCTION IS COMPLETED BUT POSSESSION HAS NOT BEEN TAKEN BY THE APPELLANT FIRM ON ACCOUNT OF THE SAID DISPUTE. 5.2.9 IN THE DECISION RENDERED IN THE CASE OF IN THE CASE OF KCP LTD. V CIT ITR 421 (SC)], THE HON'BLE SUPREME COURT HAD HELD THAT THE SUBSEQUENT EVENT WILL NOT BE TA E I 0 CONSIDERATION WHILE DETERMINING THE TAXABILITY OF AN INCOME. 5.2 .10`THE FACTS BROUGHT OUT IN THE PRECEDING PARAGRAPHS INDICATES VERY CLEARLY THAT IN THE INSTANT CASE, THE APPELLANT SIGNED DEVELOPMENT AGREEMENT DATED 21.4.2008 WITH M/S NANAVATI CONSTRUCTIONS THE POWER OF ATTORNEY WAS EXECUTED, THE AGREEMENT REGISTE RED AND THE POSSESSION OF THE SAID PLOT WAS DULY HANDED OVER TO THE DEVELOPER AND CONSTRUCTION COMMENCED SHORTLY THEREAFTER. THUS IN THE INSTANT CA S E THERE WAS TRANSFER OF A CAPITAL ASSERTS AND AS PER THE PROVISIONS OF THE ACT, THE CAPITAL GAINS ARISI NG FROM SUCH TRANSFER IS ASSESSABLE IN THE HANDS OF THE APPELLANT. THE GROUNDS RAISE BY THE APPELLANT ARE THEREFORE DISMISSED. 8 . THE LD.AR SUBMITTED THAT THE FAA HAS GROSSLY ERRED IN PARTLY UPHOLDING THE ORDER OF THE AO BY IGNORING THE FACTS THAT THE DEVELOPMENT AGREEMENT ENTERED INTO BY THE ASSESSEE WITH M/S NANAVATI CONSTRUCTION ON 21.4.2008 WAS NOTHING BUT UNDERSTANDING WITH THE DEVELOPER TO DEVELOP THE PROPERTY. THE LOWER AUTHORITIES HAVE MISCONCEIVED THE DATE OF AGREEMENT AS THE DATE OF SALE AND 7 I.T.A. NO.3318/MUM/2015 I.T.A. NO.3045/MUM/20 16 THEREBY MADE THE ADDITION ON ACCOUNT OF LONG TERM CAPITAL GAINS OF RS.500,38,800/ - , WHICH WAS REDUCED BY THE FAA TO RS.3,25,25,220 / - BEING 65% OF THE TOTAL LONG TERM CAPITAL OF RS.500,38,800/ - BY HOLDING THAT ONLY 65% OF THE SAID LTCG BELONG ED TO THE ASSESSEE AS AGAINST THE ENTIRE AMOUNT TAKEN BY THE AO . THE LD. AR FURTHER ARGUED THAT THE VARIOUS MODES OF TRANSFERS ARE ENVISAGED UNDER SECTION 2(47) OF THE INCOME TAX ACT, 1961 AND THE RELEVANT CLAUSE IS 2(47) ( V ) READS AS UNDER : SECTION 2(47) IN THE INCOME - TAX ACT, 1995 (47) TRANSFER', IN RELATION TO A CAPITAL ASSET, INCLUDES, - (I) .. (II) (III) . (IV) (V) ANY TRANSACTION INVOLVING THE ALLOWING OF THE POSSESSION OF ANY IMMOVABLE PROPERTY TO BE TAKEN OR RETAINED IN PART PERFORMANCE OF A CONTRACT OF THE NATURE REFERRED TO IN SECTION 53A OF THE TRANSFER OF PROPERTY ACT, 1882 1 (4 OF 1882 ); OR CLAUSE (V) OF THE SAID SECTION PROVIDES THAT TRANS FER WOULD INCLUDE ANY TRANS ACTION WHEREIN THE POSSESSION OF IMMOVABLE PROPER TY IS TAKEN OR RETAINED IN PART PERFORMANCE OF THE CONTRACT AS REFERRED IN THE TRANSFER OF PROPERTY ACT, 1882. THE LD. COUNSEL SUBMITTED THAT BY ENTERING INTO A DEVELOPMENT AGREEMENT THE ASSESSEE HAS NOT ALLOWED THE POSSESSION OF THE PROPERTY TO BE TAK EN BY T HE DEVELOPER M/S NANAVATI CONSTRUCTION AND THE POSSESSION WAS GIVEN ONLY FOR THE PURPOSES OF OBTAINING THE APPROVALS FROM THE CONCERNED AUTHORITIES AND DEVELOPMENT THEREOF. THE LD. AR FURTHER BROUGHT TO OUR NOTICE THE PROVISIONS OF SECTION 53A OF THE TRANSFER OF PROPERTY ACT, 1882 WHICH DEFINE D PART 8 I.T.A. NO.3318/MUM/2015 I.T.A. NO.3045/MUM/20 16 PERFORMANCE AND SUBMI TT ED THAT THE DEVELOPMENT AGREEMENT IN NO WAY CONSTITUTE D PART PERFORMANCE OF THE AGREEMENT IN TERMS OF SECTION 2(47) ( V) OF THE ACT READ WITH SECTION 53A OF THE TPA, 1882. THE L D. AR FURTHER SUBMITTED THAT THE TRANSFER COULD ONLY BE SAID TO HAVE TAKEN PLACE ONLY WHEN THE TRANSFEREE HAS PERFORMED ITS PART OF CONTRACT. IN THE PRESENT CASE, THE COMMENCEMENT CERTIFICATE WAS GIVEN IN THE SUBSEQUENT YEAR TO M/S NANAVATI CONSTRUCTION B Y THE MUNICIPAL CORPORATION AND THEREFORE THE CAPITAL GAIN COULD NOT BE SAID TO HAVE ARISEN OR ACCRUED DURING THE YEAR . IN SUPPORT OF HIS CONTENTIONS THE LD.AR RELIED ON THE FOLLOWING CASE LAWS: ( A ) N. KARUNA V. APPROPRIATE AUTHORITY [2001] 251 ITR 230 (AP); ( B ) THE FIBARS INFRATECH P. LTD V/S ITO (ITA NO.477/HYD/2013 DATED 3.1.2014; = 2014] 46 TAXMANN.COM 313 ( HYDERABAD TRIB) ( C ) CIT V/S M/S CHEMOSYN LTD IN ITA NO.361 OF 2013 DATED 11.2.2015 (BOM HC); ( D ) VOLTAS LTD V/ ( E ) S ITO IN ITA NO.5330 AND 533 1/MUM/2009 ORDER DATED 16.9.2016 ( F ) CIT V/S SMT NAJOO DARA BEBOO - 38 TAXMANN.COM 258 (ALL) ( G ) NATHULAL V/S PHOOLCHAND9CIVIL APPEAL NO.2345 OF 1966 (AIR 1970 SUPREME COURT 546 THE LD.AR SUBMITTED THAT SINCE 2008 NO POSSESSION OF 65 % OF THE CON STRUCTED AREA HAS BEEN GIVEN TO THE ASSESSEE. THE SECOND PLEA RAISED BY THE LD. COUNSEL WAS THAT THE PROVISIONS OF SECTION 50C OF THE INCOME TAX ACT SHOULD NOT BE APPLIED TO THE INSTANT CA S E A S IN TH IS CASE THE DEVELOPMENT AGREEMENT WAS ENTERED INTO BY THE ASSESSEE FOR THE DEVELOPMENT OF PROPERTY AND NOT FOR THE SALE OF PROPERTY AND THE ASSESSEE DID NOT PART WITH HIS INTEREST IN THE PROPERTY. 9 I.T.A. NO.3318/MUM/2015 I.T.A. NO.3045/MUM/20 16 I N DEFENCE OF HIS ARGUMENT HE RELIED ON THE DECISION IN THE CASE OF C.S. ATWAL V/S CIT(2015) 378 ITR 244 (P& H) . THE LD. AR WHILE TAKING US THROUGH THE CHRONOLOGY OF THE EVENTS SUCH AS DATE OF DEVELOPMENT DATED 21.4.2008 , I NTIMATION OF DISAPPROVAL DATED 11.6.2009, D ATE OF PLAN APPROVAL 11.6.2009, P ERMISSION FROM DISTRICT COLLECTOR ON 29.6.2009, D ATE OF COMMENC EMENT CERTIFICATE FROM BRIHAN MUMBAI MUNICIPAL CORPORATION 1.8.2009 , PRAYED BEFORE THE BENCH IN VIEW OF THE THESE FACTS OF THE CASE T HE FAA HAS GROSSLY ERRED IN UPHOLDING THE ORDER OF THE AO WHICH SHOULD BE REVERSED IN VIEW OF THE RATIO LAID DOWN IN THE ABOVE JUDICIAL PRONOUNCEMENTS. 9 . ON THE OTHER HAND, THE LD. DR RELIED HEAVILY ON THE ORDER OF FAA BY SUBMITTING THAT THE ASSESSEE HAS ACTUALLY TRANSFERRED THE RIGHT OF OWNERSHIP RIGHT S IN THE LAND WITH THE EXECUTION OF AGREEMENT WITH THE DEVELOPER AND THE REFORE THE SAME WAS COVERED WITHIN THE DEFINITI ON OF SECTION 2(47) OF THE INCOME TAX ACT, 1961 READ WITH SECTION 53A OF THE TPA, 1882 . ACCORDINGLY T HE AO HAS RIGHTLY BROUGHT TO TAX LTCG ARISING ON TRANSFER OF INTEREST IN THE LAND. THE LD. DR FURTHER DEFE NDED THE ORDER OF THE ADOPTION OF VALUE AS PER STAMP AUT H ORITIES FOR THE CALCULATION OF CAPITAL GAIN IN TERMS OF PROVISIONS OF SECTION 50C OF THE ACT AND REQUESTED THE BENCH THAT THE ORDER PASSED BY THE AO SHOULD BE UPHELD. 10. WE HAVE CAREFULLY CONS IDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL PLACED BEFORE US INCLUDING THE ORDERS OF AUTHORITIES BELOW AND CASE LAW 10 I.T.A. NO.3318/MUM/2015 I.T.A. NO.3045/MUM/20 16 RELIED UPON BY BOTH THE PARTIES. UNDISPUTED FACTS OF THE CASE ARE THAT THE ASSESSEE ENTERED INTO A DEVELOPMENT AGREEMENT ON 21.4. 2008 FOR DEVELOPMENT OF PIECE OF LAND ADMEASURING ABOUT 1010 SQ.YDS SITUATED AT C - 14, DALIA INDUSTRIAL ESTATE, VEERA DESAI ROAD, OFF ANDHERI VERSOVA (JP ROAD), ANDHERI (W), MUMBAI - 400058 WITH M/S NANAVATI CONSTRUCTION WHICH WAS REGISTERED WITH THE SUB - REGISTRAR ASSURANCE AT VALU ATION OF RS.5,32,98,000/ - . U NDER THE SAID DEVELOPMENT AGREEMENT THE ASSESSEE WAS TO RECEIVE 65% OF THE TOTAL CONSTRUCTED A R EA WHEREAS 35 % WAS TO BE GIVEN TO THE DEVELOPER IN LIEU OF DEVELOPMENT COST OF THE SAID PLOT . THE PLAN F OR DEVELOPMENT OF THE LAND WAS APPROVED BY THE LOCAL AUTHORITY ON 11.6.2009 AND THE COMMENCEMENT CERTIFICATE FROM BOMBAY MUNICIPAL CORPORATION WAS APPROVED VIDE LETTER DATED 1.8.2009 . IT IS, THEREFORE , CLEAR FROM THE FACTS BEFORE US THAT THE DEVELOPER M/S NANAVATI CONSTRUCTION HAS NOT CARRIED OUT ANY CONSTRUCTION DURING THE YEAR UNDER CONSIDERATION . NOW, THE ISSUE BEFORE US IS WHETHER THE TRANSFER OF INTEREST IN THE PLOT TOOK PLACE WITH SIGNING OF THE DEVELOPMENT AGREEMENT OR ON THE DATE WHEN THE ASSESSEE WAS GIVEN POSSESSION OF 65% OF THE CONSTRUCTED AREA. IN OUR CONSIDERED VIEW , THE CONCLUSION DRAWN BY THE FAA APPEARS TO BE NOT CORRECT AS THE ASSESSEE HAS NOT RECEIVED ANY CONSIDERATION IN THE FORM OF 65% OF THE TOTAL CONSTRUCT ED AREA. IT IS AN UNDISP UTED FACT THAT DURING THE YEAR UNDER CONSIDERATION THE 65% OF THE CONSTRUCTED AREA WAS NOT RECEIVED NOR HAD ACCRUED IN FAVOUR OF THE ASSESSEE AS PER T HE TRANSFER OF THE PROPERTY A S DEFINED 11 I.T.A. NO.3318/MUM/2015 I.T.A. NO.3045/MUM/20 16 UNDER SECTION 2(47) OF THE INCOME TAX ACT, 1961 . F OR THE SAKE OF READY REFERENCE AND CONVENIENCE, WE REPRODUCE SECTION 2(47) OF THE ACT AS UNDER : 2(47) TRANSFER , IN RELATION TO A CAPITAL ASSET, INCLUDES, ( VI ) THE SALE, EXCHANGE OR RELINQUISHMENT OF THE ASSET ; OR (II) THE EXTINGUISHMENT OF ANY RIGHTS THEREIN ; OR (I II) THE COMPULSORY ACQUISITION THEREOF UNDER ANY LAW ; OR (IV) IN A CASE WHERE THE ASSET IS CONVERTED BY THE OWNER THEREOF INTO, OR IS TREATED BY HIM AS, STOCK - IN - TRADE OF A BUSINESS CARRIED ON BY HIM, SUCH CONVERSION OR TREATMENT ; OR (IVA) THE MATURITY O R REDEMPTION OF A ZERO COUPON BOND; OR (V) ANY TRANSACTION INVOLVING THE ALLOWING OF THE POSSESSION OF ANY IMMOVABLE PROPERTY TO BE TAKEN OR RETAINED IN PART PERFORMANCE OF A CONTRACT OF THE NATURE REFERRED TO IN SECTION 53A OF THE TRANSFER OF PROPERTY ACT , 1882 (4 OF 1882) ; OR (VI) ANY TRANSACTION (WHETHER BY WAY OF BECOMING A MEMBER OF, OR ACQUIRING SHARES IN, A CO - OPERATIVE SOCIETY, COMPANY OR OTHER ASSOCIATION OF PERSONS OR BY WAY OF ANY AGREEMENT OR ANY ARRANGEMENT OR IN ANY OTHER MANNER WHATSOEVER) W HICH HAS THE EFFECT OF TRANSFERRING, OR ENABLING THE ENJOYMENT OF, ANY IMMOVABLE PROPERTY. EXPLANATION 1. FOR THE PURPOSES OF SUB - CLAUSES (V) AND (VI), IMMOVABLE PROPERTY SHALL HAVE THE SAME MEANING AS IN CLAUSE (D) OF SECTION 269UA . EXPLANATION 2. FOR THE REMOVAL OF DOUBTS, IT IS HEREBY CLARIFIED THAT TRANSFER INCLUDES AND SHALL BE DEEMED TO HAVE ALWAYS INCLUDED DISPOSING OF OR PARTING WITH AN ASSET OR ANY INTER EST THEREIN, OR CREATING ANY INTEREST IN ANY ASSET IN ANY MANNER WHATSOEVER, DIRECTLY OR INDIRECTLY, ABSOLUTELY OR CONDITIONALLY, VOLUNTARILY OR INVOLUNTARILY, BY WAY OF AN AGREEMENT (WHETHER ENTERED INTO IN INDIA OR OUTSIDE INDIA) OR OTHERWISE, NOTWITHSTA NDING THAT SUCH TRANSFER OF RIGHTS HAS BEEN CHARACTERISED AS BEING EFFECTED OR DEPENDENT UPON OR FLOWING FROM THE TRANSFER OF A SHARE OR SHARES OF A COMPANY REGISTERED OR INCORPORATED OUTSIDE INDIA; AFTER TAKING INTO CONSIDERATION THE FACTS OF THE CASE VIS A VIS THE PROVISIONS OF THE ACT W E FIND MERIT IN THE ARGUMENT OF THE LD.AR THAT NO SALE TRANSACTION HA S TAKEN PLACE WITH THE SIGNING OF THE DEVELOPMENT AGREEMENT AS THE SALE IS 12 I.T.A. NO.3318/MUM/2015 I.T.A. NO.3045/MUM/20 16 GOVERNED BY THE PROVISIONS OF SECTION 54 OF THE TRANSFER OF PROPERTY ACT, 1882 WHEREIN THE PRIME DETERMINING FACTOR IS RECEIPT OF MONITORY CONSIDERATION. THERE IS NO MONITORY CONSIDERATION WHATSOEVER IN THE DEVELOPMENT AGREEM ENT E NTERED IN TO BY THE ASSESSEE AND THEREFORE CANNOT BE CONSTRUED AS SALE. WE ALSO FIND MERIT IN TH E ARGUMENT OF THE LD. AR THAT ENTERING DEVELOPMENT AGREEMENT WITH THE DEVELOPER , THE ASSESSEE HAS NOT RELINQUISHED ANY INTEREST IN THE SAID PROPERTY AS THE RIGHT IN THE PROPERTY CONTINUE TO BELONG TO THE OWNER . SUBSECTION 3(V)OF SECTION 2(47) OF THE ACT IS NOT RELEVANT TO THE CASE UNDER CONSIDERATION AND THE DEVELOPMENT AGREEMENT NOWHERE FALL S UNDER AMBIT THE TRANSACTION OF ALLOWING POSSESSION OF IMMOVABLE PROPERTY TO BE TAKEN OR PART PERFORMANCE OF CONTRACT OF THE NATURE REFERRED TO IN SECTION 53A OF TH E TPA , 1882 BECAUSE THE DEVELOPMENT AGREEMENT IS NOT AN AGREEMENT FOR SALE BECAUSE THE ASSESSEE EXECUTED A CONTRACT WITH THE DEVELOPER AND NOT WITH THE INTENDED PURCHASER. THE DEVELOPMENT AGREEMENT IS SOME SORT OF BUSINESS AGREEMENT AND IT BASICALLY PO STULATES COMING TOGETHER OF TWO PART IES ONLY I.E. THE DEVELOPER AND THE OWNER OF THE LAND. THE DEVELOPER DOES NOT HAVE LAND TO DEVELOP THE LAND AND THE ASSESSEE DID NOT HAVE SUFFICIENT FINANCE TO DEVELOP THE LAND AND THEREFORE THEY C O ME TOGETHER I.E. LAND A ND FINANCE FOR THE DEVELOPMENT OF PROJECT IS NECESSARILY BUSINESS AGREEMENT WHEREBY THE OWNER OF LAND ALLOW S THE DEVELOPER TO ENTER AND EXPLOIT THE LAND FOR THE LIMITED PURPOSES OF DEVELOPING THE SAID LAND. LOOKING INTO THE PROVISIONS OF TPA,1882 WHICH CLE ARLY SHOWS THAT ALLOWING THE 13 I.T.A. NO.3318/MUM/2015 I.T.A. NO.3045/MUM/20 16 P OSSESSION TO BE TAKEN AND RETAIN ED IN PART PER FORMANCE OF THE CONTRACT COULD BE CONSIDERED AS TRANSFER AND NOT PERMISSIBLE POSSESSION OR ANY OTHER KIND OF POSSESSION . IN THE CASE OF N. KARUNA (SUPRA), THE HONBLE HIGH COUR T HELD THAT A PERUSAL OF THE ABOVE REFERRED PROVISION SHOWS THAT ALLOWING OF POSSESSION TO BE TAKEN OR RETAINING IN PART PERFORMANCE OF A CONTRACT OF THE NATURE REFERRED TO IN SECTION 53A, OF THE TPA, 1882 ALONE COULD BE CONSIDERED AS TRANSFER AND NOT A P ERMISSIVE POSSESSION OR ANY OTHER KIND OF POSSESSION DELIVERED BY THE SELLER TO THE PURCHASER. IN THE CASE OF SMT NAJOO DARA BEBOO, THE HONBLE ALLAHABAD HIGH COURT HELD THAT CAPITAL GAINS WOULD BE CHARGED ONLY ON RECEIPT OF SALE CONSIDERATION AND NOT OTHERWISE. HOW CAN A PERSON PAY THE CAPITAL GAIN IF HE HAS NOT RECEIVED ANY AMOUNT. IN THE INSTANT CASE, THE ASSESSEE HAS HONESTLY DISCLOSED THE CAPITAL GAIN FOR THE ASSESSMENT YEARS 1998 - 99 TO 2000 - 01, WHEN THE FLATS/AREAS WERE SOLD AND CONSIDERATION WA S RECEIVED. DURING THE YEAR UNDER CONSIDERATION, ONLY AN AGREEMENT WAS SIGNED. NO MONEY WAS RECEIVED. SO, THERE IS NO QUESTION TO PAY THE CAPITAL GAIN. WHEN IT IS SO, THEN WE FIND NO REASON TO INTERFERE WITH IMPUGNED ORDER PASSED BY THE TRIBUNAL. THE SAME ARE HEREBY SUSTAINED ALONG WITH REASONS MENTIONED THEREIN. 14 I.T.A. NO.3318/MUM/2015 I.T.A. NO.3045/MUM/20 16 WE ALSO FIND THAT THAT THE IDENTICAL ISSUE HAS BEEN DECIDED BY THE CO - ORDINATE BENCH OF HYDERABAD TRIBUNAL IN THE CASE OF T HE FIBARS INFRATECH P. LTD (SUPRA) AS UNDER : THE PRIMARY CONTENTION OF THE ASSESSEE IS THAT THE LAND GIVEN FOR DEVELOPMENT IS AN AGRICULTURAL LAND IN TERMS OF SECTION 2(14)(III) AS ON THE DATE OF DEVELOPMENT AGREEMENT AND THE LAND WAS CONVERTED ON 27 - 6 - 2006. BUT THE FACTS BROUGHT ON RECORD CLEARLY ESTABLISH THAT THE IMPUGN ED LAND WAS CONVERTED FROM AGRICULTURAL PURPOSES TO NON - AGRICULTURAL PURPOSES BY PERMISSION FROM COMPETENT AUTHORITY ON 27 - 12 - 2006 AND THE REGISTRATION OF SUPPLEMENTARY DEVELOPMENT AGREEMENT CUM GPA WAS EXECUTED ON 4 - 1 - 2007 THOUGH IT WAS PRESENTED FOR REGI STRATION ON 15 - 12 - 2006. IT WAS AN ADMITTED FACT THAT THE REGISTRATION WAS DELAYED AWAITING APPROVAL FROM RDO FOR LAND CONVERSION AND ONLY AFTER THE APPROVAL WAS RECEIVED ON 27.12.2006 THAT THE DOCUMENT WAS REGISTERED ON 4 - 1 - 2007 AND AT THE TIME OF REGISTRA TION OF DEVELOPMENT AGREEMENT, THE LAND NO MORE REMAINED AS AGRICULTURAL LAND AND IT WAS NON - AGRICULTURAL LAND BY VALID CONVERSION ON APPROVAL FROM THE COMPETENT AUTHORITY. BEING SO, THERE WAS NO MERIT IN THE ARGUMENT OF THE ASSESSEE THAT THE LAND IS AGRIC ULTURAL LAND. [PARA 44]; THE NEXT ARGUMENT OF THE ASSESSEE IS THAT THERE IS NO TRANSFER ON ACCOUNT OF DEVELOPMENT AGREEMENT CUM GPA IN TERMS OF SECTION 2(47)( V ) ON ENTERING INTO AGREEMENT WITH MAK AS THERE IS NO QUANTIFICATION OF CONSIDERATION TO BE RECEIV ED BY THE ASSESSEE FROM MAK. [PARA 45]; IT IS IMPORTANT TO BEAR IN MIND THAT SECTION 2(47)( V ) REFERS TO POSSESSION TO BE TAKEN OR RETAINED IN PART PERFORMANCE OF THE CONTRACT OF THE NATURE REFERRED TO IN SECTION 53A OF THE TRANSFER OF PROPERTY ACT. [PARA 5 1]; A PLAIN READING OF SECTION 53A OF THE TRANSFER OF PROPERTY ACT SHOWS THAT IN ORDER THAT A CONTRACT CAN BE TERMED TO BE OF THE NATURE REFERRED TO IN SECTION 53A OF THE TRANSFER OF PROPERTY ACT IT IS ONE OF THE NECESSARY PRECONDITIONS THAT TRANSFEREE S HOULD HAVE OR IS WILLING TO PERFORM HIS PART OF THE CONTRACT. [PARA 53]; IT IS THUS, CLEAR THAT WILLINGNESS TO PERFORM FOR THE PURPOSES OF SECTION 53A IS SOMETHING MORE THAN A STATEMENT OF INTENT; IT IS THE UNQUALIFIED AND UNCONDITIONAL WILLINGNESS ON TH E PART OF THE VENDEE TO PERFORM ITS OBLIGATIONS. UNLESS THE PARTY HAS PERFORMED OR IS WILLING TO PERFORM ITS OBLIGATIONS UNDER THE CONTRACT, AND IN THE SAME SEQUENCE IN WHICH THESE ARE TO BE PERFORMED, IT CANNOT BE SAID THAT THE PROVISIONS OF SECTION 53A O F THE TRANSFER OF PROPERTY ACT WILL COME INTO PLAY ON THE FACTS OF THAT CASE. IT 15 I.T.A. NO.3318/MUM/2015 I.T.A. NO.3045/MUM/20 16 IS ONLY ELEMENTARY THAT, UNLESS PROVISIONS OF SECTION 53A OF THE TRANSFER OF PROPERTY ACT ARE SATISFIED ON THE FACTS OF A CASE, THE TRANSACTION IN QUESTION CANNOT FALL WITHIN THE SCOPE OF DEEMED TRANSFER UNDER SECTION 2(47)( V ). [PARA 55]; COMING TO THE FACTS OF THE PRESENT CASE, THE ASSESSEE ENTERED INTO DEVELOPMENT AGREEMENT WITH MAK WITH REFERENCE TO A LAND. AT THE TIME OF ENTERING INTO DEVELOPMENT AGREEMENT ON 15 - 12 - 2006, TH E LAND WAS IN THE PROMOTER S NAME. THE ASSESSEE WAS UNDER INCORPORATION. THE SAME AGREEMENT WAS PRESENTED FOR REGISTRATION ON 29 - 12 - 2006. LATER THE ASSESSEE - COMPANY WAS INCORPORATED ON 4 - 1 - 2007. ON THE BASIS OF THIS AGREEMENT, THE ASSESSING OFFICER TAXED T HE CAPITAL GAIN ON THE TRANSACTION TREATING THAT THERE WAS A TRANSFER IN TERMS OF SECTION 2(47)( V ). THROUGH THIS IS A DEVELOPMENT AGREEMENT CUM GPA THE ASSESSEE HAS NOT RECEIVED ANY MONETARY BENEFIT. BEING SO, THERE IS NO RECEIPT OF ANY PART OF THE SALE CO NSIDERATION. FURTHER, IT CANNOT BE SAID THAT THERE IS ANY SALE IN TERMS OF SECTION 2(47)(I), (II) OR (III) SO AS TO SAY THAT THERE IS SALE, RELINQUISHMENT, EXTINGUISHMENT OR COMPULSORY ACQUISITION. [PARA 56]; TO SAY THAT THERE IS AN EXCHANGE UNDER SECTION 2(47)(I), BOTH THE PROPERTIES WHICH ARE SUBJECT MATTER OF THE EXCHANGE IN THE TRANSACTION ARE TO BE IN EXISTENCE AT THE TIME OF ENTERING INTO THE TRANSACTION. IT IS TO BE NOTED THAT AT THE TIME OF ENTERING INTO DEVELOPMENT AGREEMENT AS ON 15 - 12 - 2006, ONLY THE PROPERTY I.E., LAND PERTAINING TO THE ASSESSEE IS IN EXISTENCE. THERE IS NO QUANTIFICATION OF CONSIDERATION OR OTHER PROPERTY IN EXCHANGE OF WHICH THE ASSESSEE HAS TO GET FOR HANDING OVER THE ASSESSEE S PROPERTY FOR DEVELOPMENT. THE CONTENTION OF THE DEPARTMENT IS THAT THE CONSIDERATION ACCRUED TO THE ASSESSEE IN THE FORM OF 16 VILLAS COMPRISING OF DEVELOPED LAND OF 9602 SQ. Y ARDS AND BUILT UP AREA OF 58606 SFT WHICH THE ASSESSEE HAS TO GET ON COMPLETION OF THE PROJECT. THERE WAS NO PROGRESS IN THE DE VELOPMENT WORK IN THE ASSESSMENT YEAR UNDER CONSIDERATION AS THE PROJECT IS ONLY IN CONCEPTION STAGE AND IT IS NOT APPROPRIATE TO TAX THE ASSESSEE ON IMAGINARY REASONS. [PARA 57]; EVEN A CURSORY LOOK AT THE ADMITTED FACTS OF THE CASE WOULD SHOW THAT THE TR ANSFEREE HAD NEITHER PERFORMED NOR WAS IT WILLING TO PERFORM ITS OBLIGATION UNDER THE AGREEMENT IN THE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR UNDER CONSIDERATION. IT IS SUBMITTED THAT THE DIRECTOR OF TOWN AND COUNTRY PLANNING APPROVED THE PLAN SUBMITTED BY THE ASSESSEE COMPANY ONLY ON 6 - 3 - 2007. THE ASSESSEE SUBMITTED THAT THERE IS NO DEVELOPMENT ACTIVITY UNTIL THE END OF THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR 2007 - 08.COMMENCEMENT OF BUILDING CONSTRUCTION HAD NOT BEEN INITIATED AS THE BUILDING APPROVAL WAS GRANTED ONLY ON 6 - 3 - 2007. THEREFORE, NO INCOME COULD BE SAID TO HAVE ACCRUED, AS LAID DOWN IN 16 I.T.A. NO.3318/MUM/2015 I.T.A. NO.3045/MUM/20 16 SECTION 48, IN ASSESSMENT YEAR 2007 - 08. MORE SO, BUILDING/VILLAS HAS TO BE CONSTRUCTED AS PER THE APPROVED PLAN WITHIN 36 MONTHS FROM THE DATE OF AGR EEMENT. THE CONSTRUCTION HAD NOT TAKEN PLACE IN THE ASSESSMENT YEAR UNDER CONSIDERATION. THE SANCTION OF THE BUILDING PLAN IS UTMOST IMPORTANT FOR THE IMPLEMENTATION OF THE AGREEMENT ENTERED BETWEEN THE PARTIES WHICH WAS GRANTED ONLY IN THE LAST MONTH OF T HE YEAR I.E., ON 6 - 3 - 2007. WITHOUT SANCTION OF THE BUILDING PLAN, THE VERY GENESIS OF THE AGREEMENT FAILS. TO ENABLE THE EXECUTION OF THE AGREEMENT, FIRSTLY, PLAN IS TO BE APPROVED BY THE COMPETENT AUTHORITY. SINCE THERE WAS NO AMOUNT OF INVESTMENT BY THE DEVELOPER IN THE CONSTRUCTION ACTIVITY DURING RELEVANT YEAR IN THIS PROJECT, IT WOULD AMOUNT TO NON - INCURRING OF REQUIRED COST OF ACQUISITION BY THE DEVELOPER. HENCE, NO CONSIDERATION CAN BE ATTRIBUTED TO SAID YEAR.; NOTHING IS BROUGHT ON RECORD BY AUTHORI TIES TO SHOW THAT THERE WAS DEVELOPMENT ACTIVITY IN THE PROJECT DURING THE ASSESSMENT YEAR UNDER CONSIDERATION AND COST OF CONSTRUCTION WAS INCURRED BY THE BUILDER/DEVELOPER. HENCE, IT IS TO BE INFERRED THAT THERE WAS NO AMOUNT OF INVESTMENT BY THE DEVELOP ER IN THE CONSTRUCTION ACTIVITY DURING THE ASSESSMENT YEAR IN THIS PROJECT AND IT WOULD AMOUNT TO NON - INCURRING OF REQUIRED COST OF ACQUISITION BY THE DEVELOPER. IN THE ASSESSMENT YEAR UNDER CONSIDERATION, IT IS NOT POSSIBLE TO SAY WHETHER THE DEVELOPER PR EPARED TO CARRY OUT THOSE PARTS OF THE AGREEMENT TO THEIR LOGICAL END. THE DEVELOPER IN THIS ASSESSMENT YEAR HAD NOT SHOWN ITS READINESS OR HAVING MADE PREPARATION FOR THE COMPLIANCE OF THE AGREEMENT. THE DEVELOPER HAD NOT TAKEN STEPS TO MAKE IT ELIGIBLE T O UNDERTAKE THE PERFORMANCE OF THE AGREEMENT WHICH ARE THE PRIMARY INGREDIENTS THAT MAKE A PERSON ELIGIBLE AND ENTITLED TO MAKE THE CONSTRUCTION. THE ACT AND CONDUCT OF THE DEVELOPER IN THIS ASSESSMENT YEAR HAS TO BE SEEN TO DECIDE THE TAXABILITY ON TRANSF ER. BEING SO, IT WAS CLEAR THAT IN THE YEAR UNDER CONSIDERATION, THERE WAS NO TRANSFER OF NOT ONLY THE VILLAS AS SUPERSTRUCTURE BUT ALSO THE PROPORTIONATE LAND BY THE ASSESSEE UNDER THE JOINT DEVELOPMENT AGREEMENT. BUT THE FACT REMAINS THAT THE TRANSFEREE HAS NOT PERFORMED ITS OBLIGATIONS UNDER THE AGREEMENT, IN THE ASSESSMENT YEAR UNDER CONSIDERATION. EVEN OTHERWISE, THE ASSESSING AUTHORITY HAS NOT BROUGHT ON RECORD THE ACTUAL POSITION OF THE PROJECT EVEN AS ON THE DATE OF ASSESSMENT OR HE HAS NOT RECORDED THE FINDINGS WHETHER THE DEVELOPER STARTED THE CONSTRUCTION WORK AT ANY TIME DURING THE ASSESSMENT YEAR UNDER CONSIDERATION OR ANY DEVELOPMENT HAS TAKEN PLACE IN THE PROJECT IN THE RELEVANT PERIOD. HE WENT ON TO PROCEED ON THE SOLE ISSUE WITH REGARD TO HA NDING OVER THE POSSESSION OF THE PROPERTY TO THE DEVELOPER IN PART PERFORMANCE OF THE DEVELOPMENT AGREEMENT - CUM - GENERAL POWER OF 17 I.T.A. NO.3318/MUM/2015 I.T.A. NO.3045/MUM/20 16 ATTORNEY. THE HANDING OVER OF THE POSSESSION OF THE PROPERTY IS ONLY ONE OF THE CONDITIONS UNDER SECTION 53A OF THE TRANSFER OF PROPERTY ACT, BUT IT IS NOT THE SOLE AND ISOLATED CONDITION. IT IS NECESSARY TO GO INTO WHETHER OR NOT THE TRANSFEREE WAS WILLING TO PERFORM ITS OBLIGATION UNDER THESE CONSENT TERMS. WHEN TRANSFEREE, BY ITS CONDUCT AND BY ITS DEEDS, DEMONSTRATES THAT IT IS UNWILLING TO PERFORM ITS OBLIGATIONS UNDER THE AGREEMENT IN THIS ASSESSMENT YEAR, THE DATE OF AGREEMENT CEASES TO BE RELEVANT; IN SUCH A SITUATION, IT IS ONLY THE ACTUAL PERFORMANCE OF TRANSFEREE S OBLIGATIONS WHICH CAN GIVE RISE TO THE SITUATION ENVIS AGED IN SECTION 53A OF THE TRANSFER OF PROPERTY ACT. [PARA 57]; IN THE PRESENT CASE, THE SITUATION IS THAT THE ASSESSEE HAS NOT RECEIVED ANY CONSIDERATION, AND THERE IS NO EVIDENCE BROUGHT ON RECORD BY THE REVENUE AUTHORITIES TO SHOW THAT THERE WAS ACTUAL CONSTRUCTION TAKEN PLACE AT THE IMPUGNED PROPERTY IN THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION AND ALSO THERE IS NO EVIDENCE TO SHOW THAT THE RIGHT TO RECEIVE THE SALE CONSIDERATION HAD ACTUALLY ACCRUED TO THE ASSESSEE. WITHOUT ACCRUAL OF THE CONSIDERATION TO THE ASSESSEE, THE ASSESSEE IS NOT EXPECTED TO PAY CAPITAL GAINS ON THE ENTIRE AGREED SALES CONSIDERATION. WHEN TIME IS ESSENCE OF THE CONTRACT, AND THE TIME SCHEDULE IS 30 MONTHS TO COMPLETE CONSTRUCTION WITH ADDITIONAL GRAC E PERIOD OF 6 MONTHS, IT CANNOT BE SAID THAT SUCH A CONTRACT CONFERS ANY RIGHTS ON THE VENDOR/LANDLORD TO SEEK REDRESSAL UNDER SECTION 53A OF THE TRANSFER OF PROPERTY ACT. THIS AGREEMENT CANNOT, THEREFORE, BE SAID TO BE IN THE NATURE OF A CONTRACT REFERRED TO IN SECTION 53A OF THE TRANSFER OF PROPERTY ACT. IT CANNOT, THEREFORE, BE SAID THAT THE PROVISIONS OF SECTION 2(47)( V ) WILL APPLY IN THE SITUATION. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE AS DISCUSSED ABOVE, THE ASSESSEE DESERVES TO SUCCEED ON THE REASON THAT THE CAPITAL GAINS COULD NOT HAVE BEEN TAXED IN THIS ASSESSMENT YEAR. [PARA 59] IN THE CASE OF M/S CHEMOSYN LTD (SUPRA), THE HONBLE BOMBAY HIGH COURT HAS HELD AS UNDER: 4. SO FAR AS THE 1ST ISSUE IS CONCERNED, BRIEFLY THE FACT S ARE THAT THE RESPONDENT COMPANY OWNED TWO PLOTS OF LAND NAMELY PLOT NOS.256 AND 257. ON 16.6.2006 THE RESPONDENT-ASSESSEE ENTERED INTO A DEVELOPMENT AGREEMENT WITH ONE M/S DIPTI BUILDERS TO DEVELOP PLOT NO.257 FOR A CONSIDERATION OF RS.16.11 CRORES AND C ONSTRUCTION OF 18,000 SQ.FT OF BUILT UP AREA FREE OF COST ON PLOT NO.256. THEREAFTER ON 5.7.2007 A TRIPARTITE AGREEMENT WAS ENTERED INTO BETWEEN M/S DIPTI BUILDERS, A NEW BUYER AND 18 I.T.A. NO.3318/MUM/2015 I.T.A. NO.3045/MUM/20 16 RESPONDENTS UNDER WHICH BOTH THE PLOTS WERE TRANSFERRED TO THE NEW BUYER AT A TOTAL CONSIDERATION OF RS.29.11 CRORES. THUS, IN THE RETURN OF INCOME FILED ON 31.10.2006 FOR SUBJECT ASSESSMENT YEAR, THE PETITIONER OFFERED ONLY AN AMOUNT OF RS.16.11 CRORES FOR THE PURPOSE OF CAPITAL GAINS TAX. THIS WAS AS THE DEVELOPMENT AGREEMENT D ATED 16.6.2006 STAND RESCINDED/MODIFIED BY THE SALE AGREEMENT DATED 5.7.2007. 5 . FOR THE FOLLOWING ASSESSMENT YEAR VIZ.2008-09 THE R ESPONDENT-ASSESSEE DID OFFER AS CAPITAL GAINS AN AMOUNT OF RS.13 CRORES BEING THE DIFFERENCE BETWEEN RS 29.11 CRORES AND RS.1 6.11 CRORES RECEIVED EARLIER FROM M/S DIPTI BUILDERS AND DULY OFFERED IN THE A.Y.2007-08. THE RESPONDENT POINTED OUT THAT THE CONSIDERATION IN THE FORM OF CONSTRUCTED AREA OF 18000 SQ.FEET IS CONCERNED, THE SAME WAS NEITHER RECEIVED NOR HAD ACCRUED AND THE REFORE, NO OCCASION TO BRING IT TO TAX COULD ARISE. THE ASSESSING OFFICER DID NOT ACCEPT THE CONTENTION OF THE PETITIONER AND CONCLUDED THAT IN VIEW OF THE DECISION OF THIS COURT IN CHATRUBHUJ DWARKADAS KAPADIA VS COMMISSIONER OF INCOME TAX 260 ITR 260 491 CAPITAL GAINS TAX WOULD BE PAYABLE ON THE MARKET VALUE OF THE 18,000 SQ.FEET OF CONSTRUCTION TO BE CARRIED OUT BY M/S DIPTI BUILDERS. RESULTANTLY, AN ADDITION OF RS.9.51 CRORES WAS MADE ON THE BASIS OF READY REKONER RATES AS LONG TERM CAPITAL GAINS. THUS, DETERMINING THE RESPONDENT- ASSESSEE'S INCOME AT RS.19.94 CRORES FOR THE A.Y.2007-08 BY ORDER DATED 2 ND DECEMBER, 2009. 6. IN APPEAL, THE COMMISSIONER OF INCOME TAX (APPEALS) (CIT (A) DID NOT ACCEPT THE PETITIONER'S CONTENTION AND UPHELD THE ASSESSING OFF ICER'S ORDER BY RELYING UPON DECISION OF THIS COURT IN CHATRUBHUJ DWARKADAS KAPADIA'S CASE (SUPRA) . HOWEVER, THE CIT (A) HELD THE CONSIDERATION FOR THE 18000 SQ.FEET OF CONSTRUCTED AREA IS TO BE ARRIVED AT ON THE BASIS OF COST OF CONSTRUCTION AND NOT THE R EADY RECKONER RATES ADOPTED BY THE ASSESSING OFFICER. CONSEQUENTLY, THE CONSIDERATION TO BE BROUGHT TO TAX WAS AN AMOUNT RS.2.17 CRORES . ON FURTHER APPEAL, THE TRIBUNAL SET ASIDE THE ORDERS OF THE ASSESSING OFFICER AND THE CIT (A) BY HOLDING THAT THE DECIS ION OF CHATURBHUJ DWARKADAS KAPADIA (SUPRA) WOULD NOT APPLY IN THE FACTS OF THE PRESENT CASE AS IN THIS CASE THERE IS NO DISPUTE AS TO TRANSFER OF PROPERTY TAKING PLACE AS A RESULT OF THE DEVELOPMENT AGREEMENT. THE DISPUTE IS WITH REGARD TO QUANTUM OF SALE CONSIDERATION TO BE TAKEN FOR THE PURPOSE OF COMPUTING CAPITAL GAINS. MOREOVER, THE TRIBUNAL ALSO PLACED RELIANCE UPON DECISION OF KALPATARU CONSTRUCTION OVERSEAS P.LTD 13 SOT 194 WHEREIN ON SIMILAR FACTS THE TRIBUNAL HAD HELD THAT WHERE CONSIDERATION TO BE RECEIVED ORIGINALLY WAS RS.1.25 CRORES BUT, FINALLY SETTLED AT RS.1 CRORES THEN SUCH A SUBSEQUENT SETTLING OF THE CONSIDERATION OF AT RS.1 CRORES ALTHOUGH ARRIVED AT A SUBSEQUENT YEAR IT WOULD RELATE BACK TO AN EARLIER 19 I.T.A. NO.3318/MUM/2015 I.T.A. NO.3045/MUM/20 16 ASSESSMENT YEAR. FURTHER, THE TRIB UNAL ALSO PLACED RELIANCE UPON THE DECISION OF THIS COURT IN COMMISSIONER OF INCOME TAX VS SHIVSAGAR ESTATES 204 ITR 1 TO CONCLUDE THAT ON THE BASIS OF REAL INCOME THEORY IN THE FACTS OF THE PRESENT CASE NO INCOME ON ACCOUNT OF 18,000 SQ.FEET OF CONSTRUCTE D AREA HAS EITHER BEEN ACCRUED OR RECEIVED FOR IT TO BE BROUGHT TO TAX. 7 . GRIEVANCE OF THE REVENUE IS THAT THE DECISION OF THIS COURT IN CHATURBHUJ DWARKADAS KAPADIA (SUPRA) SHOULD APPLY TO THE PRESENT FACTS. AS POINTED OUT BY THE TRIBUNAL, THE ISSUE BEFOR E THE COURT IN THE ABOVE CASE WAS TO DETERMINE THE YEAR IN WHICH THE PROPERTY WAS TRANSFERRED FOR THE PURPOSE OF CAPITAL GAINS. IN THIS CASE THE ISSUE IS WHAT IS THE CONSIDERATION RECEIVED FOR THE TRANSFER OF AN ASSET. THUS, RELIANCE UPON CHATURBHUJ DWARKA DAS KAPADIA (SUPRA) DOES NOT ASSIST THE REVENUE. WE SPECIFICALLY ASKED THE REVENUE WHETHER THE DECISION OF THE TRIBUNAL IN KALPATARU CONSTRUCTION OVERSEAS (P) LTD HAS BEEN APPEALED TO THIS COURT AND TO WHICH THE ANSWER WAS WE DO NOT KNOW. 8. WE FIND TH AT ON FACTS THE IMPUGNED ORDER OF TRIBUNAL HAS HELD THAT NO INCOME HAS BEEN ACCRUED OR RECEIVED OF THE VALUE OF 18000 SQ.FEET OF CONSTRUCTED AREA UNDER THE DEVELOPMENT AGREEMENT DATED 16.6.2006. THIS ON ACCOUNT OF THE FACT THAT THE AGREEMENT DATED 16.6.200 6 WAS NOT ACTED UPON AS IT CAME TO BE SUPERSEDED/MODIFIED BY THE TRIPARTITE AGREEMENT DATED 6.7.2007. THIS WAS THE POSITION WHEN THE RETURN OF INCOME WAS FILED.THE INCOME ACCRUED AND EARNED UNDER THE SUBSEQUENT AGREEMENT DATED 6.7.2002 WAS OFFERED AS CAPIT AL GAINS IN THE SUBSEQUENT YEARS. THEREFORE, ON THE APPLICATION OF THE REAL INCOME THEORY, THE TRIBUNAL HELD THAT ON THESE FACTS THERE WOULD BE NEITHER ACCRUAL NOR RECEIPT OF INCOME TO WARRANT BRINGING TO TAX TO THE CONSTRUCTED AREA OF 18,000 SQ.FT WHICH H AS NOT BEEN RECEIVED BY THE RESPONDENT-ASSESSEE. AS OBSERVED BY THE APEX COURT IN CIT VS SHOORJI VALLABHDAS 46 ITR 144 : INCOMETAX IS A LEVY ON INCOME. NO DOUBT, THE INCOMETAX ACT TAKES INTO ACCOUNT TWO POINTS OF TIME AT WHICH THE LIABILITY TO TAX IS ATTRACTED VIZ., THE ACCRUAL OF THE INCOME OR ITS RECEIPT; BUT THE SUBSTANCE OF THE MATTER IS THE INCOME. IF INCOME DOES NOT RESULT AT ALL, THERE CANNOT BE A TAX, EVEN THOUGH IN BOOK KEEPING, AN ENTRY IS MADE ABOUT A 'HYPOTHETICAL INCOME' WHICH DOES NOT MA TERIALISE. WHERE INCOME TAX, HAS IN FACT, BEEN RECEIVED AND IS SUBSEQUENTLY GIVEN UP IN SUCH CIRCUMSTANCES THAT IT REMAINS THE INCOME OF THE 20 I.T.A. NO.3318/MUM/2015 I.T.A. NO.3045/MUM/20 16 RECIPIENT, EVEN THOUGH GIVEN UP, THE TAX MAY BE PAYABLE. WHERE, HOWEVER, THE INCOME CAN BE SAID NOT TO HAVE RESULTE D AT ALL, THERE IS OBVIOUSLY NEITHER ACCRUAL NOR RECEIPT OF INCOME, EVEN THOUGH AN ENTRY TO THAT EFFECT MIGHT, IN CERTAIN CIRCUMSTANCES, HAVE BEEN MADE IN THE BOOKS OF ACCOUNT. (EMPHASIS SUPPLIED) THUS NO INCOME HAS EITHER ACCRUED OR RECEIVED IN THE F ORM OF 18000 SQ.FEET OF CONSTRUCTED AREA. NO OCCASION TO TAX THE SAME CAN ARISE. THE TRIBUNAL ON CONSIDERATION OF FACTS HAS REACHED A FINDING OF FACT THAT NO INCOME IN - R ESPECT OF 18000 SQ.FT OF CONSTRUCTED AREA HAS BEEN ACCRUED OR RECEIVED. THIS FINDING CA NNOT BE SAID TO BE PERVERSE OR ARBITRARY. ACCORDING TO US NO SUBSTANTIAL QUESTION OF LAW ARISES TO WARRANT INTERFERENCE WITH THE ORDER OF THE TRIBUNAL. THUS, QUESTION NOS.1 AND 2 ARE DISMISSED . 11 . ON THE SECOND ARGUMENT OF THE LD.AR THAT THE PROVISI ONS OF SECTION 50C OF THE ACT ARE NOT APPLICABLE IN THE CASE OF DEVELOPMENT AGREEMENT. WE FIND THAT THE CO - ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF VOLTAS LTD (SUPRA) HAS HELD AS UNDER : 3.8. WE HAVE GONE THROUGH THE SUBMISSIONS OF THE ASSESSEE. WE SHALL FIRST DEAL WITH THE LAST ARGUMENT OF THE ASSESSEE WHICH IS DIRECTLY ON THE SCOPE OF SECTION 50C. THE PERUSAL OF SECTION 50C SHOWS THAT THE SECTION 50C SHALL BE APPLICABLE WHERE THE CONSIDERATION RECEIVED AS A RESULT OF TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET, BEING LAND OR BUILDING OR BOTH, IS LESS THAN THE VALUE ADOPTED OR ASSESSED OR ASSESSABLE BY ANY AUTHORITY OF STATE GOVERNMENT. THUS, IT IS NOTED THAT THE TERM CAPITAL ASSET MENTIONED IN THE SECTION SPECIFICALLY REFERS AND CONFINES ITS MEANING TO LAND OR BUILDING OR BOTH. THUS, SCOPE OF SECTION 50C IS RESTRICTED BY THE LEGISLATURE ITSELF TO THESE TWO TYPES OF CAPITAL ASSETS ONLY. 3.9. TURNING BACK TO THE FACTS OF THE CASE BEFORE US, THE CAPITAL ASSET TRANSFERRED BY THE ASSESSEE WAS DE VELOPMENT RIGHTS IN THE LAND AND NOT THE LAND ITSELF. IF WE GO THROUGH FEW OTHER SIMILAR PROVISIONS OF THE ACT, WE FIND THAT THE LEGISLATURE HAS USED THIS EXPRESSION CONSCIOUSLY AND CAREFULLY AND KEEPING IN VIEW ITS NEED AND OBJECTIVE OF LEGISLATING SEC TION 50C. FOR EXAMPLE, IN SECTION 269A, THE EXPRESSION IMMOVABLE PROPERTY HAS BEEN DEFINED AS UNDER: 21 I.T.A. NO.3318/MUM/2015 I.T.A. NO.3045/MUM/20 16 IMMOVABLE PROPERTY MEANS - (I) ANY LAND OR ANY BUILDING OR PART OF A BUILDING, AND INCLUDES, WHERE ANY LAND OR ANY BUILDING OR PART OF A BUILDING IS TRA NSFERRED TOGETHER WITH ANY MACHINERY, PLANT, FURNITURE, FITTINGS OR OTHER THING WHICH MACHINERY, PLANT FURNITURE, FITTINGS OR OTHER THINGS ALSO. EXPLANATION - FOR THE PURPOSES OF THIS [SUB - CLAUSE], LAND BUILDING PART OF A BUILDING, MACHINERY, PLANT, FURNITU RE, FITTINGS AND OTHER THINGS INCLUDE ANY RIGHTS THEREIN; (II) ANY RIGHTS OF THE NATURE REFERRED TO IN CLAUSE (B) OF SUBSECTION (1) OF SECTION 269AB.. 3.10. SIMILARLY, IN SECTION 269 UA ALSO IDENTICAL DEFINITION HAS BEEN GIVEN. IN THESE CASES, RIGHTS I N LAND & BUILDING HAVE BEEN SPECIFICALLY INCLUDED AS PER REQUIREMENT OF THESE SECTIONS. IN OTHER WORDS, TERM LAND & BUILDING AND RIGHTS THEREIN HAVE BEEN CLEARLY UNDERSTOOD AND TREATED AS INDEPENDENT FROM EACH OTHER. THUS, THE PERUSAL OF THE DEFINITI ONS GIVEN IN THESE SECTIONS WHEN COMPARED WITH SECTION 50C SHOWS THAT LEGISLATURE WAS CONSCIOUS ABOUT THE PROPER EXPRESSION TO BE USED AS PER ITS INTENTION, SCOPE, OBJECT AND PURPOSE OF THE SECTION 50C, WHEREIN IT HAS BEEN EXPRESSLY MENTIONED THAT CAPITAL ASSET SHOULD BE LAND OR BUILDING OR BOTH. IT HAS NOT BEEN MENTIONED THAT ANY TYPE OF RIGHTS SHALL ALSO BE INCLUDED IN THE DEFINITION OF CAPITAL ASSETS TO BE TRANSFERRED BY AN ASSESSEE. 3.11. THE PROVISIONS OF SECTION 50C ARE DEEMING PROVISIONS. IT IS S ETTLED LAW AND WELL ACCEPTED RULE OF INTERPRETATION THAT DEEMING PROVISIONS ARE TO BE CONSTRUED STRICTLY. THUS, WHILEINTERPRETING DEEMING PROVISIONS NEITHER ANY WORDS CAN BE ADDED NOR DELETED FROM LANGUAGE USED EXPRESSLY. WE SHOULD APPLY THE RULE OF STRIC T INTERPRETATION AS WELL AS RULE OF LITERAL CONSTRUCTION WHILE UNDERSTANDING THE MEANING AND SCOPE OF DEEMING PROVISIONS. IN OUR OPINION, UNDER THE GIVEN FACTS AND CIRCUMSTANCES, LD. COUNSEL HAS RIGHTLY CONTENDED THAT SINCE THE IMPUGNED CAPITAL ASSET TR ANSFERRED BY THE ASSESSEE UPON WHICH LONG TERM CAPITAL GAIN HAS BEEN COMPUTED BY THE AO IS ON ACCOUNT OF TRANSFER OF DEVELOPMENT RIGHTS IN THE LAND OF THE ASSESSEE. THE LAND ITSELF HAS NOT BEEN TRANSFERRED BY THE ASSESSEE. THUS, IN OUR OPINION PROVISIONS O F SECTION 50C HAVE BEEN WRONGLY APPLIED UPON THE IMPUGNED TRANSACTION. THUS, WE REVERSE THE ACTION OF LOWER AUTHORITIES IN APPLYING THE PROVISIONS OF SECTION 50C AND IN SUBSTITUTING ANY VALUE OTHER THAN THE AMOUNT OF ACTUAL SALES CONSIDERATION RECEIVED BY THE ASSESSEE. IT IS ALSO NOTED BY US THAT FOR THE ASSESSMENT YEAR UNDER CONSIDERATION THERE IS NO OTHER PROVISIONS ON THE STATUTE WHICH PERMIT THE AO TO SUBSTITUTE ANY OTHER VALUE WITH THE FULL AMOUNT OF CONSIDERATION ACTUALLY RECEIVED BY THE ASSESSEE, WHI LE COMPUTING INCOME UNDER THE HEAD OF CAPITAL 22 I.T.A. NO.3318/MUM/2015 I.T.A. NO.3045/MUM/20 16 GAINS. UNDER THESE CIRCUMSTANCES, GROUND NO.1.2 OF THE MAIN GROUNDS OF THE ASSESSEE IS ALLOWED. SINCE WE HAVE ALLOWED THE GROUNDS OF THE ASSESSEE ON THE PRELIMINARY OBJECTION ITSELF AND THEREFORE WE ARE NOT DEA LING WITH OTHER ARGUMENTS AT THIS STAGE AS THESE HAVE BEEN BECOME ACADEMIC IN NATURE. THUS, SUPPLEMENTARY GROUND NOS. 1.5 TO 1.10 AND ORIGINAL GROUND NOS.1.1 TO 1.4 ARE PARTLY ALLOWED WITH OUR DIRECTIONS AS GIVEN ABOVE. AFTER CONSIDERING THE FACTS OF THE CASE IN THE LIGHT OF THE RATIO LAID DOWN BY THE HONBLE JURISDICTIONAL HIGH COURT AND O THE RS INCLUDING THE DECISION S OF THE CO - ORDINATE BENCHES OF THE TRIBUNAL , WE ARE OF THE CONSIDERED VIEW THAT THE ORDER OF FAA UPHOLDING PARTLY THE ORDER OF AO LEVYING T AX ON THE LTCG ON THE BASIS OF DEVELOPMENT AGREEMENT WAS WRONG AND CANNOT BE SUSTAINED . ACCORDINGLY, WE SET ASIDE THE ORDER OF THE FAA AND DIRECT THE AO TO DELETE THE TOTAL ADDITION IN THE CURRENT YEAR. WE FURTHER H O LD THAT THE APPLICATION OF PROVISIONS OF SECTION 50C IS ALSO BAD IN THE PRESENT SCENARIO AS THERE WAS NO TRANSFER OF LAND OR BUILDING HAS TAKEN PLACE. ACCORDINGLY, THE APPEAL OF THE ASSESSEE IS ALLOWED. I.T.A. NO.3318/MUM/2015 12. WE HAVE ALREADY DECIDED THE ISSUE OF CHARGEABILITY OF LTCG IN FAVOUR OF THE ASSESSEE IN I.T.A . NO.3 045 /MUM/201 6 , THEREFORE, IN VIEW OF OUR FINDINGS THEREIN , WE DISMISS THE APPEAL OF THE REVENUE AS INFRUCT U OUS. 23 I.T.A. NO.3318/MUM/2015 I.T.A. NO.3045/MUM/20 16 13 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED AND THAT OF REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 14TH MARCH, 2017 . SD SD ( D.T.GARASIA ) ( RAJESH KUMA R) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 14. 3 .2017 SR.PS:SRL: / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A ) 4. / CIT CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F ILE / BY ORDER, TRUE COPY / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI