ITO 12(3)(4), MUMBAI V. NAHAR SETH JOGANI & ASSOCIATES, MUMBAI

ITA 3645/MUM/2008

• Counselvise Citation: [2010] 119 COUNSELVISE.COM (IT) 6258 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-11-2010
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 18-11-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 23-05-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P N DEVADASANI
• Assessee Lawyers: SAMEER G DALAL; VIPUL B JOSHI
• Keywords: Capital asset

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI B BENCH BEFORE SHRI T.R.SOOD, ACCOUNTANT MEMBER & SHRI VIJAY PAL RAO, JUDICIAL MEMBER I.T.A.NO.3645/MUM/2008 - A.Y 2005-06 INCOME TAX OFFICER 12(3)(4), MUMBAI VS. M/S NAHAR SETH JOGANI & ASSOCIATES, 201, COMMERCE HOUSE, N.M.ROAD, FORT, MUMBAI 400 023 PAN: AACFM 5285 A (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI P.N.DEVADASANI. RESPONDENT BY : S/SHRI VIPUL B JOSHI & SAMEER G. DALAL. O R D E R PER T.R.SOOD, AM: IN THIS APPEAL, THE REVENUE HAS RAISED THE FOLLOWI NG GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT[A] HAS ERRED IN DELETING THE ADDITION OF ` `` ` .1,82,17,270/- MADE UNDER THE HEAD LONG TERM CAPITAL GAINS ON TRANSFER OF LAND, WITH OUT APPRECIATING THE FACT THAT THE DEVELOPMENT RIGHTS FOR CONSTRUCTI ON AND MAINTENANCE OF CLUB HOUSE, IN LAND ADMEASURING 1142.7 SQ.MT. WA S TRANSFERRED BY THE ASSESSEE TO SHRI SUKHRAJ BABULAL NAHAR, HUF, WI THOUT ANY CONSIDERATION. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT[A] ERRED IN ACCEPTING FRESH EVIDENCE IN CONTRAVENTION OF RULE 46A OF I.T.RULES, 1962 IN THE FORM OF LETTER DATED 30-10-2 004 FROM THE ASSISTANT ENGINEER, MUNICIPAL CORPORATION OF GREATE R MUMBAI AND ALSO LETTER FROM M/S MANOJ PARESH CONSULTANTS, LICE NCED SURVEYORS, AS PER WHICH THE LAND IN QUESTION FALLS WITHIN COAS TAL REGULATION ZONE AS PER THE NOTIFICATION DATED 19-2-1991 AND TR ANSFER OF DEVELOPMENT RIGHT WAS NOT PERMISSIBLE, WITHOUT APPR ECIATING THE FACT THAT THE ASSESSEE HAD ALREADY CONSTRUCTED A BUILDIN G KNOWN AS EVEREST APARTMENT NEAR THE LAND. THE LEARNED CIT[A] ALSO FA ILED TO APPRECIATE THAT THESE DOCUMENTS WERE NEVER FURNISHE D BY THE ASSESSEE BEFORE THE ASSESSING OFFICER , IN SPITE OF OPPORTUN ITY ALLOWED TO THE ASSESSEE. 2. AFTER HEARING BOTH THE PARTIES, WE FIND THAT THE AO HAD MADE AN ADDITION ON ACCOUNT OF LONG TERM CAPITAL GAINS ON T RANSFER OF LAND. THE 2 SAID LAND WAS SITUATED IN THE PREMISES OF EVEREST C O-OPERATIVE SOCIETY WHICH HAD BEEN COMPLETED LONG BACK AND FLATS HAVE B EEN HANDED OVER TO THE MEMBERS. SOME VACANT LAND THROUGH AN AGREEME NT WAS ASSIGNED TO ONE OF THE PARTNERS ON WHICH PERHAPS SO ME CLUB-HOUSE WAS TO BE CONSTRUCTED. HOWEVER, SINCE NO FSI WAS AV AILABLE BECAUSE SOME LAND HAD BEEN USED FOR CONSTRUCTION OF FLATS, IT WAS CONTENDED THAT THE TRANSFER OF THE LAND TO ONE OF THE PARTNER S, WOULD NOT AMOUNT TO TRANSFER OF CAPITAL ASSET RATHER IT WAS A CASE W HERE THE RESPONSIBILITY HAS BEEN HANDED OVER TO ONE OF ITS PARTNERS. THE AO DID NOT ACCEPT THIS CONTENTION AND SUBJECTED THE TRANSFER TO LONG TERM CAPITAL GAINS. 3. ON APPEAL BEFORE THE LD. CIT[A] SOME DOCUMENTS, WHICH WERE NOT PRODUCED BEFORE THE AO, WERE ALSO SUBMITTED. 4. THE LD. DR POINTED OUT THAT A COPY OF LETTER DAT ED 30/10/2004 FROM ASSISTANT ENGINEER, MUNICIPAL CORPORATION, WAS FILED FOR THE FIRS TIME BEFORE THE CIT[A]. SIMILARLY, CERTIFICATE FROM M/S. MANOJ PARESH, CONSULTANTS, DATED 30/10/2004 WAS ALSO FILED FOR TH E FIRS TIME. THESE DOCUMENTS WERE NOT PRODUCED BEFORE THE AO. THEREFOR E, AO HAD NO OPPORTUNITY TO GO THROUGH THESE DOCUMENTS AND THE M ATTER MAY BE SET ASIDE. 5. ON THE OTHER HAND, LD. COUNSEL OF THE ASSESSEE S UBMITTED THAT THE AO HAS HIMSELF NOTED THAT NO FSI WAS AVAILABLE. HOWEVER, HE HAS NO OBJECTION IF THE MATTER IS RESTORED TO HIS FILE FOR VERIFICATION OF THE TWO DOCUMENTS PRODUCED BEFORE THE CIT[A]. 3 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFUL LY AND FIND THAT EVEN FROM THE PAPER BOOK IT BECOMES CLEAR THAT CERT IFICATE OF M/S. MANOJ PARESH, CONSULTANTS, WAS NEVER FILED BEFORE T HE AO. THEREFORE, IN THE INTERESTS OF JUSTICE WE SET ASIDE THE ORDER OF THE LD. CIT[A] AND REMIT THE MATTER BACK TO THE FILE OF THE AO WITH A DIRECTION TO RE- EXAMINE THE ISSUE AFTER VERIFYING THE DOCUMENTS, WH ICH WERE PRODUCED FOR THE FIRST TIME BEFORE THE CIT[A] AND AFTER PROV IDING AN ADEQUATE OPPORTUNITY TO THE ASSESSEE. 7. IN THE RESULT, REVENUES APPEAL IS ALLOWED FOR S TATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 24 TH DAY OF NOVEMBER, 2010. SD/- SD/- (VIJAY PAL RAO) (T.R.SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI:24 TH NOVEMBER, 2010. P/-*