D.S CORPORATION, MUMBAI V. ITO 21(1)(4), MUMBAI

ITA 3526/MUM/2012

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 8431 (ITAT-MUMBAI)
• Duration Of Justice: 6 year(s) 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-04-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2006-2007
• Appeal Filed On: 18-05-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: CHAUDHARY ARUN KUMAR SINGH
• Assessee Lawyers: DR K SHIVARAM
• Keywords: Capital asset; Difference of opinion
• Section: 2(14); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH D , MUMBAI BEFORE SHRI C.N. PRASAD, HON'BLE JUDICIAL MEMBER AND SHRI RAMIT KOCHAR , HON'BLE ACCOUNTANT MEMBER ITA.NO. 3526 & 3527/MUM/2012 (A.Y S . 2006 - 07 & 2007 - 08) M/S. D.S. CORPORATION M/S. THAR & CO., CHARTERED ACCOUNTANTS, 203, CAPRI, OPP. HDIL TOWER ANANT KANEKAR MARG, BANDRA (E), MUMBAI 400 05 1 PAN NO : AAFFD 2266 C V . I.T.O, WARD 21(1)(4) C - 11, PRATYAKSHAKAR BHAVAN, BKC, BANDRA (E) , MUMBAI 400 051 (APPELLANT) (RESPONDENT) ITA.NO.3882 & 3883/MUM/2012 (A.Y S . 2007 - 08 & 2006 - 07 ) I.T.O, WARD 21(1)(4) ROOM NO. 606, 6 TH FLOOR, C - 10, PRATYAKSHAKAR BHAVAN, BKC, BANDRA (E), MUMBAI 400 051 V. M/S. D.S. CORPORATION M/S. THAR & CO., CHARTERED ACCOUNTANTS, 203, CAPRI, OPP. HDIL TOWER ANANT KANEKAR MARG, BANDRA (E), MUMBAI 400 051 PAN NO: AAFFD 2266 C (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI DR. K. SHIVARAM REVENUE BY : SHRI CHAUDHARY ARUN KUMAR SINGH DATE OF HEARING : 29.03.2019 DATE OF PRONOUNCEMENT : 03 .04.2019 2 ITA.NO.3526 & 3527/MUM/2012 ITA.NO.3882 & 3883/MUM/2012 (A.YS. 2006 - 07 & 2007 - 08) M/S. D.S. CORPORATION O R D E R PER C. N. PRASAD (JM) 1. THIS ORDER IS PASSED IN CONFIRMITY WITH THE VIEW OF THE HON'BLE VICE PRESIDENT, THE THIRD MEMBER. MY LD. BROTHER WAS OF THE VIEW THAT THE MONEY EQUIVALENT TO ENHANCED PORTION OF THE ASSET REVALUED CONSTITUTES CAPITAL ASSET FOR THE PURPOSE OF SECTION 45(4) R.W.S. 2(14) OF THE I.T. ACT AND THEREFORE THERE IS TRANSFER OF CAPITAL ASSET ON DISSOLUTION OF FI RM OR OTHERWISE WITHIN THE MEANING OF SECTION 45(4) R.W.S. 2(14) WHEN THE MONEY EQUIVALENT IS PAID BY THE PARTNERSHIP FIRM TO THE RETIRING PARTNER . THUS, THE VIEW POINT OF THE LD. ASSESSING OFFICER HAS BEEN ACCEPTED . HOWEVER, SINCE I AM IN AGREEMENT WI TH THE VIEW OF THE LD.CIT(A) THAT MONEY EQUIVALENT TO ENHANCED PORTION OF THE ASSET REVALUED AND CREDITED IN CAPITAL ACCOUNT OF THE PARTNER IS NOT A CAPITAL A SSET AND DISTRIBUTION OF SUCH M ONEY EQUIVALENT TO THE PARTNER S ON RETIREMENT DID NOT CONSTITUTE TR ANSFER OF CAPITAL ASSET ON DISSOLUTION OF THE FIRM OR OTHERWISE WITHIN THE MEANING OF SECTION 45(4) R.W.S. 2(14) OF THE ACT, T HERE WAS DIFFERENCE OF OPINION BETWEEN MY LEARNED BROTHER AND MYSELF AND THE POINT OF DIFFERENCE WAS REFERRED TO THIRD MEMBER BY THE HON'BLE PRESIDENT U/S.255(4) OF THE ACT. PURSUANT TO THE REFERENCE MADE BY THE HON'BLE PRESIDENT, THE HON'BLE VICE PRESIDENT AS THIRD MEMBER FRAMED THE FOLLOWING QUESTIONS ON THE POINT OF DISPUTE: - 3 ITA.NO.3526 & 3527/MUM/2012 ITA.NO.3882 & 3883/MUM/2012 (A.YS. 2006 - 07 & 2007 - 08) M/S. D.S. CORPORATION (1) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF CASE, WHERE ON REVALUATION OF ASSET BEING LAND HELD BY THE PARTNERSHIP FIRM WHICH RESULTED INTO ENHANCEMENT OF VALUE OF ASSET AND THIS ENHANCED AMOUNT CREDITED IN CAPITAL ACCOUNT OF PARTNERS AND WHEN A RETIRING PARTNER TAKES AMOUNT IN HIS CAPITAL ACCOU NT INCLUDING ENHANCED VALUE OF ASSET, IT GIVES RISE TO CAPITAL GAIN UNDER SECTION 45(4) R.W. SECTION 2(14) OF THE INCOME TAX ACT. (2) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, IS THERE ANY TRANSFER OF CAPITAL ASSET ON DISSOLUTION OF FIRM OR O THERWISE WITHIN THE MEANING OF SECTION 45(4) R.W. SECTION 2(14), IN CASE THE MONEY EQUIVALENT IS PAID BY PARTNERSHIP FIRM TO THE RETIRING PARTNER AND WHETHER THIS MONEY EQUIVALENT TO ENHANCED PORTION OF THE ASSET REVALUED CONSTITUTES CAPITAL ASSET FOR THE PURPOSE OF SECTION 45(4) R.W. SECTION 2(14) OF THE INCOME TAX ACT. 2. BY A DETAILED ORDER DATED 10.01.2019 THE HON'BLE THIRD MEMBER ANSWERED BOTH THE QUESTIONS IN THE NEGATIVE AND IN FAVOUR OF THE ASSESSEE AGREEING WITH THE VIEW OF THE JUDICIAL MEMBER. SINCE THE MAJORITY VIEW OF THE MEMBERS IS AGAINST THE REVENUE , THE GROUNDS RAISED BY THE REVENUE IN BOTH THE APPEALS ARE DECIDE D AGAINST THE REVENUE IN CONFIRMITY WITH THE ORDER PASSED BY THE THIRD MEMBER . 3. AS FAR AS THE ASSESSEE APPEALS ARE CONCERNED , THE GROUND RAISED CHALLENGING THE JURISDICTION OF ASSESSING OFFICER IN PASSING THE ASSESSMENT ORDER SINCE WITHDRAWN BY ASSESSEE THE SAME IS DISMISSED AS WITHDRAWN . THE OTHER GROUND RAISED ON THE REOPENING OF THE ASSESSMENT PROCEEDINGS U/S. 147 OF THE ACT IS CONCERNED THE SAME HAS BEEN REJECTED BY OUR CONCURRENT ORDERS FOR THE REASONS EXPLAINED THEREIN . THEREFORE, THE GROUNDS RAISED BY THE ASSESSEE IN ITS APPEALS STOOD REJECTED. 4 ITA.NO.3526 & 3527/MUM/2012 ITA.NO.3882 & 3883/MUM/2012 (A.YS. 2006 - 07 & 2007 - 08) M/S. D.S. CORPORATION 4. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE AS WELL AS THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 03 RD APRIL , 2019 SD/ - SD/ - (RAMIT KOCHAR) (C.N. PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI / DATED 03/ 04 / 2019 GIRIDHAR, SR.PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// BY ORDER (ASSTT. REGISTRAR) ITAT, MUM 5 ITA.NO.3526 & 3527/MUM/2012 ITA.NO.3882 & 3883/MUM/2012 (A.YS. 2006 - 07 & 2007 - 08) M/S. D.S. CORPORATION