Deputy Commissioner of Income tax, Pune V. M/s. Sanand Properties Private Limited, Pune

ITA 340/PUN/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 7907 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 6 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 03-07-2019
• Assessment Year: 2013-2014
• Appeal Filed On: 09-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Question of law

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUNE . , , BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.340/PUN/2017 / ASSESSMENT YEAR : 2013-14 DCIT, CIRCLE-6, PUNE. ....... / APPELLANT / V/S. M/S. SANAND PROPERTIES PVT. LTD., 177/2, DESAI HOUSE, DHOLE PATIL ROAD, PUNE-411001. PAN : AAHCS3227K / RESPONDENT REVENUE BY : SHRI RAJESH GAWALI ASSESSEE BY : SHRI NEELESH KHANDELWAL / DATE OF HEARING : 03.07.2019 / DATE OF PRONOUNCEMENT : 14.08.2019 / ORDER PER D. KARUNAKARA RAO, AM: THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A)-8, PUNE DATED 31.10.2016 FOR THE ASSESSMENT YEAR 2013-14. 2. THE SOLITARY ISSUE RAISED IN THE GROUNDS OF THE REVENUE RELATES TO THE TREATMENT TO BE GIVEN TO THE TAXATION OF THE SHARE INCOME OF THE ASSESSEE, WHO IS MEMBER OF AOP. 3. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE INFORMED THAT THE SIMILAR ISSUE WAS THE SUBJECT-MATTER OF ADJUDICATION BY THE TRIBUNAL IN THE PAST IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEARS 2008-09, 2009-10, 2011-12 & 2012-13 VIDE ITA NOS.2446/PN/2012 & 2 ITA NO.340/PUN/2017 1860/PN/2012 ORDER DATED 21.03.2014 AND ITA NOS.53 & 54/PN/2016 ORDER DATED 31.10.2017 RESPECTIVELY. AFTER ELABORATE DISCUSSION ON THIS ISSUE, THE TRIBUNAL ALLOWED THE APPEAL OF THE ASSESSEE AS PER DISCUSSION GIVEN IN PARA 7, 7.1 & 7.2 OF THE ORDER OF THE TRIBUNAL IN ITA NO.1860/PN/2012 (SUPRA). 4. FURTHER, LD. COUNSEL FOR THE ASSESSEE FILED A COPY OF THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN ASSESSEES OWN CASE IN INCOME TAX APPEAL NO.1837 OF 2014 WITH 1865 OF 2014 DATED 24.03.2017; WHERE THE ORDER OF THE TRIBUNAL (SUPRA) FOR SUBJECT-MATTER OF LIMITATION BY THE REVENUE AND THE HONBLE BOMBAY HIGH COURT UPHELD THE ORDER OF THE TRIBUNAL (SUPRA) BY OBSERVING AS UNDER :- 8. BEING AGGRIEVED, THE RESPONDENT ASSESSEE CARRIED THE ISSUE IN SECOND APPEAL TO THE TRIBUNAL. BY THE IMPUGNED ORDER, THE TRIBUNAL ALLOWED THE RESPONDENT ASSESSEE'S APPEAL INTER ALIA PLACING RELIANCE UPON ITS ORDER DATED 13TH SEPTEMBER, 2013 PASSED IN RESPECT OF THE SUBJECT ASSESSMENT YEARS IN THE CASE OF M/S. FORTALEZA DEVELOPERS (AOP). IN THE ABOVE CASE, THIS VERY ISSUE VIZ THE NATURE / CHARACTER OF 35% SHARE OF GROSS SALE PROCEEDS RECEIVED BY THE RESPONDENT ASSESSEE WAS HELD TO BE ON ACCOUNT OF PROFITS MADE BY M/S. FORTALEZA DEVELOPERS (AOP). AS POINTED OUT ABOVE, THE TRIBUNAL IN THE ABOVE ORDER DATED 13TH SEPTEMBER, 2013 IN M/S. FORTALEZA DEVELOPERS (AOP) CONCLUDED THAT THE APPROPRIATE INTERPRETATION OF CLAUSE 7 OF THE AGREEMENT DATED 29TH APRIL, 2003 WOULD BE THAT THE RESPONDENT ASSESSEE RECEIVED 35% OF THE PROFIT MADE BY M/S. FORTALEZA DEVELOPERS (AOP). THE REVENUE'S APPEALS FROM THE ABOVE ORDER OF THE TRIBUNAL DATED 13TH SEPTEMBER, 2013 IN THE CASE OF M/S. FORTALEZA DEVELOPERS (AOP) FOR THE SUBJECT ASSESSMENT YEARS BEING INCOME TAX APPEAL NOS.635 OF 2014 AND 641 OF 2014 WERE DISMISSED BY THIS COURT ON 3 RD OCTOBER, 2016. FOLLOWING THE FINDING OF FACT ARRIVED AT BY THE TRIBUNAL IN THE CASE OF M/S. FORTALEZA DEVELOPERS (AOP) FOR THE SUBJECT ASSESSMENT YEARS THAT THERE WAS NO SURRENDER OF DEVELOPMENT RIGHTS BY THE RESPONDENT ASSESSEE TO IT AND THAT RESPONDENT ASSESSEE HEREIN RECEIVED ONLY ITS SHARE OF PROFITS WOULD HOLD GOOD EVEN IN THE PRESENT APPEAL. THIS IS SO AS THE FINDING OF FACT AND THE INTERPRETATION OF CLAUSE 7 OF THE AGREEMENT DATED 29 TH APRIL, 2003 WILL NOT CHANGE DEPENDING UPON THE ASSESSEE CONCERNED. IN FACT, THE HIGH COURT IN ITS ORDER DATED 3RD OCTOBER, 2016 PLACED RELIANCE UPON ITS EARLIER ORDER DATED 9TH APRIL, 2015 IN APPEAL FILED BY THE REVENUE FROM THE ORDER OF THE TRIBUNAL FOR ASSESSMENT YEAR 2007- 08 IN RESPECT OF M/S. FORTALEZA DEVELOPERS (AOP), WHICH WAS DISMISSED BY THIS COURT ON 9TH APRIL, 2015. 9. THUS, IN THE ABOVE FACTS, THE QUESTION AS PROPOSED BEING ALREADY DECIDED IN CASE OF M/S. FORTALEZA DEVELOPERS (AOP) BY THIS COURT, DOES NOT GIVE RISE TO ANY SUBSTANTIAL QUESTION OF LAW. THUS, NOT ENTERTAINED. 3 ITA NO.340/PUN/2017 5. FROM THE ABOVE, IT IS EVIDENT THAT IT IS SETTLED LEGAL NATURE OF ISSUE IN FAVOUR OF THE ASSESSEE. THE SHARE INCOME, SINCE TAXED IN THE HANDS OF THE AOP, THE SAME IS NOT TAXABLE IN THE ASSESSEES HANDS AGAIN. THEREFORE, WE FIND THE ORDER OF THE CIT(A) IS FAIR AND REASONABLE ON THIS ISSUE AND IT DOES NOT CALL FOR ANY INTERFERENCE. 6. WE FURTHER PERUSED THE CONTENTS OF PARA 8 ONWARDS OF THE ORDER OF THE CIT(A) AND FIND THAT THE CIT(A) WHILE GIVING RELIEF TO THE ASSESSEE RELIED ON THE ORDER OF THE TRIBUNAL IN THE CASE OF M/S. FORTALEZA DEVELOPERS VS. ITO VIDE ITA NO.3686/MUM/2012 DATED 13.09.2013. THE CONTENTS OF PARA 9 OF THE ORDER OF THE CIT(A) ARE RELEVANT AND THE SAME ARE EXTRACTED HEREUNDER :- 9. RESPECTFULLY FOLLOWING THE ABOVE DECISION OF HONBLE ITAT PUNE IN APPELLANTS OWN CASE FOR A.Y. 2008-09 AND 2009-10, ON THE IDENTICAL ISSUE, AND THE ORDER OF HONBLE HIGH COURT, MUMBAI IN THE CASE OF AOP M/S FORTALEZA DEVELOPERS, THE GROUNDS OF APPEAL RAISED BY THE APPELLANT STAND ADJUDICATED IN FAVOUR OF THE APPELLANT. 7. FURTHER, IN THE CASE OF THE ASSESSEE, VIDE PARA 7.2, THE TRIBUNAL HELD THAT THE SHARE INCOME IS NOT TAXABLE IN THE CASE OF THE ASSESSEE FOR THE ASSESSMENT YEARS 2008-09 & 2009-10 VIDE ITA NOS.1860 & 2446/PUN/2012 DATED 21.03.2014. FOR THE SAKE OF COMPLETENESS, RELEVANT PARA 7.2 OF THE ORDER OF THE TRIBUNAL (SUPRA) IS EXTRACTED HEREUNDER :- 7.2 SINCE THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF THE AOP HAS CATEGORICALLY HELD THAT 35% SHARE RECEIVED BY SPPL WAS NOT IN THE NATURE OF OVERRIDING TITLE TO THE REVENUE BUT IS ONLY SHARE OF PROFIT OF SPPL, THEREFORE, RESPECTFULLY FOLLOWING THE ABOVE AND IN ABSENCE OF ANY CONTRARY MATERIAL BROUGHT TO NOTICE AGAINST THE ORDER OF THE TRIBUNAL THE GROUNDS RAISED BY THE ASSESSEE HAVE TO BE ALLOWED. WE ACCORDINGLY SET-ASIDE THE ORDER OF THE CIT(A) AND ALLOW THE GROUNDS RAISED BY THE ASSESSEE. 4 ITA NO.340/PUN/2017 8. CONSIDERING THE ABOVE SETTLED LEGAL POSITION ON THIS ISSUE AND THE RATIO LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN ASSESSEES OWN CASE (SUPRA), WE ARE OF THE OPINION, THE ORDER OF THE CIT(A) IS FAIR AND REASONABLE ON THIS ISSUE AND IT DOES NOT CALL FOR ANY INTERFERENCE. THE SHARE INCOME, WHICH IS SUBJECT MATTER OF DISPUTE, IS ALREADY SUFFERED TAX IN THE HANDS OF THE AOP. THUS, THE RELEVANT GROUND RAISED BY THE REVENUE IS DISMISSED AS COVERED ISSUE. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON 14 TH DAY OF AUGUST, 2019. SD/- SD/- ( /VIKAS AWASTHY) ( . /D. KARUNAKARA RAO) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / PUNE; / DATED : 14 TH AUGUST, 2019. SUJEET / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(A)-8, PUNE. 4. THE PR. CCIT, PUNE. 5. , , , / DR, ITAT, A BENCH, PUNE. 6. / GUARD FILE. / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE.