DCIT 24(3), MUMBAI V. MAHUL BHASKARBHAI PATEL, MUMBAI

ITA 3910/MUM/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9904 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-07-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 29-06-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 29-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN KUMAR
• Assessee Lawyers: REEPAL G TRALSHAWALA
• Keywords: Sale consideration of property below Jantri Value; Salary income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH B, MUMBAI BEFORE D.T. GARASIA, JUDICIAL MEMBER AND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER ITA NO.3910/M/2014 ASSESSMENT YEAR: 2010-11 DCIT-24(3), R. NO.701, C-11, 7 TH FLOOR, B.K.C. BANDRA (E), MUMBAI - 51 VS. MR. MAHUL BHASKARBHAI PATEL, 2 ND FLOOR, PRABHU NIWAS, 99, JAWAHAR NAGAR, GOREGAON WEST, MUMBAI - 63 PAN: AAFPP9359N (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI REEPAL G. TRALSHAWALA, A.R. REVENUE BY : SHRI SUMAN KUMAR, D.R. DATE OF HEARING : 29.06.2017 DATE OF PRONOUNCEMENT : 14.07.2017 O R D E R PER D.T. GARASIA , JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE REVEN UE AGAINST THE ORDER DATED 25.03.2014 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT Y EAR 2010-11. 2. THE SHORT FACTS OF THE CASE ARE AS UNDER: THE ASSESSEE IS EMPLOYED WITH LAXMI INDUSTRIAL EST ATE WHICH IS ENGAGED IN CONSTRUCTION OF GALAS IN INDUSTRIAL ZONE AT ANDH ERI. THE ASSESSEE HAS PURCHASED 8 GALAS FROM LAXMI INDUSTRIAL ESTATE WHER EIN HE IS EMPLOYEE. THE MARKET VALUE OF THE SAID PROPERTY IS HIGHER THAN TH E SALE VALUE OF THE PROPERTY. THE DETAIL OF PURCHASED ALONG WITH MARKET VALUE OF THE PROPERTIES ARE AS UNDER: SR. NO. UNIT NO. AREA DATE OF AGREEMENT AMOUNT (RS. MARKET VALUE (RS.) 1 19 590 02.07.2009 2360000 4869200 2 349 500 09.10.2009 1000000 3300992 ITA NO.3910/M/2014 MR. MAHUL BHASKARBHAI PATEL 2 3 350 500 09.10.2009 1000000 3300992 4 448 500 04.11.2009 1000000 3300992 5 449 500 04.11.2009 1000000 3300992 6 501 500 23.12.2009 2000000 2888368 7 502 500 23.12.2009 2000000 2888368 8 503 500 02.02.2010 2000000 3640000 FROM THE ABOVE IT IS NOTICED THAT THE ASSESSEE HAS PURCHASED THE PROPERTIES FROM LAXMI INDUSTRIAL ESTATE AT LOWER PR ICE THAN MARKET VALUE OF THESE PROPERTIES. AS PER PROVISIONS OF SECTION 17( III) OF THE ACT, THE VALUE OF ANY BENEFIT GRANTED OR PROVIDED FREE OF COST OR CON CESSIONAL RATE IN ANY OF FOLLOWING CASES: (A) BY A COMPANY TO AN EMPLOYEE WHO IS A DIRECTOR THERE OF; (B) BY A COMPANY TO AN EMPLOYEE BEING A PERSON WHO HAS A SUBSTANTIAL INTEREST IN THE COMPANY; THE ASSESSEE IS AN EMPLOYEE OF LAXMI INDUSTRIAL EST ATE HAVING SALARY INCOME. THEREFORE, PROVISIONS OF SECTION 17(III) O F THE ACT ARE APPLICABLE TO THE FACTS OF THIS CASE. THEREFORE, AO HAS ADDED AN AMO UNT OF RS.1,51,29,904/- I.E. DIFFERENCE BETWEEN SALE VALUE AND MARKET VALUE WHIC H IS TREATED AS PERQUISITE IN LIEU OF SALARY AS PER PROVISIONS OF SECTION 17(I II) OF THE ACT. 3. MATTER CARRIED TO LD. CIT(A) AND THE LD. CIT(A) HAS ALLOWED THE CLAIM BY OBSERVING AS UNDER: 3) I HAVE CAREFULLY GONE THROUGH THE SUBMISSION OF THE APPELLANT ALONG WITH THE PAPER BOOKS, GROUNDS OF APPEAL AND S TATEMENT OF FACTS AND THE ASSESSMENT ORDER. DURING THE COURSE OF ASSE SSMENT PROCEEDINGS ITSELF THE APPELLANT HAD FILED LETTER DATED 04-01-2 013 STATING THAT THE AGREEMENT FOR THIS PROPERTIES HAVE MADE IN EARLIER YEARS. THE AUTHORIZED REPRESENTATIVE HAS SUBMITTED BEFORE ME THE DATE OF POSSESSION OF THE SAID PROPERTIES ALONG WITH THE DETAILS OF RENT RECE IVED FOR THE SAID PROPERTIES ALONG WITH SUPPORTING LEAVE & LICENSE AG REEMENT, AND MUNICIPAL TAXES & SOCIETY BILLS PAID BY THE APPELLA NT IN EARLIER YEARS. THE AUTHORIZED REPRESENTATIVE HAD ALSO SUBMITTED COPY O F COMPUTATION OF INCOME WHEREIN THE ABOVE RENTAL INCOME WAS DULY REF LECTED IN EARLIER YEARS. FURTHER, IT WAS ALSO POINTED OUT TO ME THAT , FOR THE PURPOSE OF INCOME TAX ACT SECTION 2(47) TRANSFER INCLUDES POSS ESSION OF IMMOVABLE PROPERTY GIVEN WITHOUT REGISTRATION OF CONVEYANCE D EED, AND ALSO TRANSACTIONS IN AGREEMENT TO BUY OR SALE ANY IMMOVA BLE PROPERTY OR ANY RIGHTS THEREON. CONSIDERING THE ABOVE FACTS IT IS C LEAR THAT THE ITA NO.3910/M/2014 MR. MAHUL BHASKARBHAI PATEL 3 APPELLANT HAS PURCHASED THE VARIOUS PROPERTIES DURI NG THE EARLIER YEARS AND NOT DURING THE CURRENT PERIOD RELEVANT TO AY 2010-11 AND ONLY REGISTRATION OF THE SAID PROPERTIES WAS DO NE DURING THE CURRENT YEAR, AND HENCE THE ADDITION OF RS.1,51,29,904/- MADE BY THE ASSESSING OFFICER IS NOT JUSTIFIED AND IS DI RECTED TO BE DELETED. 4. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES. IN THIS CASE, WE FIND THAT THE ASSESSEE BEFORE LD. CIT(A) HAS SUBMIT TED THE DETAILS OF VARIOUS GALAS PURCHASED FROM HIS EMPLOYER IN THE EARLIER YE AR WHICH WERE SUBMITTED IN A CHART WHEREIN THE DETAILS OF ORIGINAL DATE OF PUR CHASE AGREEMENT, PAYMENT MADE AGAINST THE SAID AGREEMENT, DATE OF REGISTERED AGREEMENT, MARKET VALUE OF THE REGISTERED AGREEMENT, DETAILS OF COMPARATIVE AG REEMENT ENTERED INTO DURING THE YEAR OF PURCHASE BY THE EMPLOYER AND STAMP DUTY VALUE THEREOF WERE MENTIONED. THE ASSESSEE HAS SUBMITTED THE COPY OF COMPUTATION OF INCOME, BALANCE SHEET, CAPITAL ACCOUNT, DETAILS OF RENT REC EIVED AND PROPERTY TAX PAID ON VARIOUS GALAS FOR A.Y. 2010-11. THE ASSESSEE HAS A LSO SUBMITTED THE DETAILS OF RENT RECEIVED AND PROPERTY TAX PAID FOR A.YS. 2009- 10, 2008-09 & 2007-08 ALONG WITH SAMPLE LEAVE & LICENSE AGREEMENT WHICH P ROVES THAT ASSESSEE WAS IN POSSESSION OF SAID GALAS FROM AUGUST, 2004 ONWAR DS. THE LD. CIT(A) HAS VERIFIED ALL THESE DOCUMENTARY EVIDENCES AND DELETE D THE ADDITION. THEREFORE, OUR INTERFERENCE IS NOT REQUIRED. 5. IN THE RESULT, DEPARTMENTAL APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 14.07.2017. SD/- SD/- (MANOJ KUMAR AGGARWAL) (D.T. GARASIA) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 14.07.2017. * KISHORE, SR. P.S. ITA NO.3910/M/2014 MR. MAHUL BHASKARBHAI PATEL 4 COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.