DCIT, New Delhi V. Sh S.B. Verma, New Delhi

ITA 435/DEL/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3782 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 15-06-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 01-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KISHORE B
• Assessee Lawyers: R K MEHRA
• Keywords: Capital asset; Tax effect
• Section: 2(14)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G : NEW DELHI DELHI BENCH G : NEW DELHI DELHI BENCH G : NEW DELHI DELHI BENCH G : NEW DELHI BEFORE SHRI R.P.TOLANI, JM AND SHRI K.D.RANJAN, AM BEFORE SHRI R.P.TOLANI, JM AND SHRI K.D.RANJAN, AM BEFORE SHRI R.P.TOLANI, JM AND SHRI K.D.RANJAN, AM BEFORE SHRI R.P.TOLANI, JM AND SHRI K.D.RANJAN, AM ITA NO.435/DEL/2010 ITA NO.435/DEL/2010 ITA NO.435/DEL/2010 ITA NO.435/DEL/2010 ASSESSMENT YEAR : 2005 ASSESSMENT YEAR : 2005 ASSESSMENT YEAR : 2005 ASSESSMENT YEAR : 2005- -- -06 0606 06 DY.COMMISSIONER OF DY.COMMISSIONER OF DY.COMMISSIONER OF DY.COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -41(1), 41(1), 41(1), 41(1), NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. VS. VS. VS. VS. SHRI S.B.VERMA, SHRI S.B.VERMA, SHRI S.B.VERMA, SHRI S.B.VERMA, S SS S- -- -178, GRE 178, GRE 178, GRE 178, GREATER KAILASH ATER KAILASH ATER KAILASH ATER KAILASH- -- -I, I,I, I, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. PAN NO.AACPV1206H. PAN NO.AACPV1206H. PAN NO.AACPV1206H. PAN NO.AACPV1206H. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI KISHORE B., DR. RESPONDENT BY : SHRI R.K.MEHRA, CA. ORDER ORDER ORDER ORDER PER R.P.TOLANI, JM : PER R.P.TOLANI, JM : PER R.P.TOLANI, JM : PER R.P.TOLANI, JM : THIS IS REVENUES APPEAL. FOLLOWING GROUNDS ARE RA ISED:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.21,29,059/- RIGHTLY MADE BY THE AO ON ACCOUNT OF SHORT TERM CAPITAL GAIN, BY :- 1. RELYING ON THE JUDGEMENT OF HONBLE ITAT DELHI BENCH IN THE CASE OF JITENDRA MOHAN VS. ITO (2007) 11 SOT 594 (DELHI), WITHOUT APPRECIATING THE FACT THAT HON BLE DELHI HIGH COURT IN THE CASE OF CIT VS. JITENDRA MO HAN (2007) 165 TAXMANN 524 (DELHI) HAS HELD THAT THE DE CISION OF ITAT IN THE CASE OF JITENDRA MOHAN VS. ITO WILL PERTAIN ONLY TO A SINGLE ASSESSEE AND NOT CONSTITUTE A GENE RAL PRECEDENT. 2. NOT APPRECIATING THE FACT THAT THE APPEAL IN TH E CASE OF CIT VS. JITENDRA MOHAN BEFORE HONBLE DELHI HIGH COURT WENT IN FAVOUR OF THE ASSESSEE ONLY BECAUSE T HE TAX EFFECT WAS BELOW THE MONETARY LIMITS FIXED BY CBDT. 2. IN THIS CASE, THE ASSESSEE WAS ALLOTTED A PLOT B Y HUDA AT GURGAON ON 19.7.1995 FOR WHICH THE ASSESSEE ACCEPTE D INSTALLMENT PLAN FOR THE PAYMENT TOWARDS THE COST OF THE PLOT. THE CONVEYANCE ITA NO.435/DEL/2010 2 DEED WAS EXECUTED ON 12.8.2004. ASSESSEE THEREAFTE R SOLD THE PLOT ON 2.9.2004 AND OFFERED THE SALE PROCEEDS ON THE BASIS OF LONG TERM CAPITAL GAINS ADOPTING THE YEAR OF ACQUISITION FY 1 995-96 I.E. THE YEAR OF ALLOTMENT. AO, HOWEVER, WAS OF THE VIEW THAT TH E DATE OF CONVEYANCE BY HUDA IN FAVOUR OF THE ASSESSEE I.E. 1 2.8.2004 WAS THE DATE OF PURCHASE AND SINCE SALE WAS MADE ON 2.9.200 4, THE SAME WAS LIABLE FOR SHORT TERM CAPITAL GAIN. 3. AGGRIEVED, ASSESSEE PREFERRED FIRST APPEAL CHALL ENGING THE TREATMENT GIVEN AS SHORT TERM CAPITAL GAIN. LEARNE D CIT(A) HELD THAT THE ASSESSEE INSTEAD OF PAYING FULL AMOUNT CHOSE TH E INSTALLMENT PAYMENTS AND ONLY ON CONDITION OF PLAN OF PAYMENT, THE PLOT WAS TO BE IN THE NAME OF THE ASSESSEE. THE ISSUE WAS COVERED BY THE ITAT DELHI BENCH IN THE CASE OF JITENDRA MOHAN VS. ITO 11 SO T 594 (DELHI), THE LEARNED CIT(A) HELD AS UNDER:- THE WORDS CAPITAL ASSET DEFINED IN SECTION 2(14) OF THE ACT AND THE WORD PROPERTY USED IN THIS SECTION IS OF THE WIDEST AMPLITUDE. WHICH MEANS THAT ANY RIGHT WHICH A PERSON CAN BE CALLED TO HOLD IN A CAPITAL ASSET WOU LD BE INCLUDED IN THE WORD PROPERTY USED AND INCLUDED I N THE DEFINITION OF CAPITAL ASSET IN SECTION 2(14) OF T HE ACT. AGAIN REVERTING TO THE FACTS OF THE INSTANT CASE WH EREIN BY A DRAW OF LOTS THE ASSESSEE WAS DECLARED SUCCESSFUL FOR THE ALLOTMENT OF A SHED, SUBJECT TO PAYMENT OF ALL OUTS TANDING DUES AND INTERESTS AND IN LIEU THERE OF THE ASSESSE E PAID AN INSTALLMENT OF RS.1,25,255 ON 28-12-1994 AND THEREA FTER CONTINUED PAYING THE REMAINING INSTALLMENTS TO DSID C, ON ACCOUNT OF WHICH A PARTICULAR SHED NO.D-13 WAS ALL OTTED TO THE ASSESSEE AND ULTIMATELY THE POSSESSION OF THE S AME WAS HANDED OVER TO THE ASSESSEE ON 28-5-1998 AND THEREAFTER THE ASSESSEE SOLD THE SAME ON 15-12-2000 . IT MEANS THAT WHEN IN A DRAW OF LOTS, AN ALLOTMENT OF A SHED WAS MADE TO THE ASSESSEE ON INSTALLMENT BASIS AFTER A PAYMENT OF INSTALLMENT OF RS.1,25,255 ON 28-12-1994 AS PER THE WIDER MEANING OF THE WORD PROPERTY USED I N THE DEFINITION OF CAPITAL ASSET IN SECTION 2(14) OF T HE ACT THE PROPERTY SHED WAS HELD BY THE ASSESSEE FOR BRINGING THE SHED WITHIN THE MEANING OF DEFINITION OF THE WORDS CAPITAL ASSETS ON 28-12-1994 ON PAYMENT OF INSTALLMENT OF ITA NO.435/DEL/2010 3 RS.1,25,255, HENCE, THE SALE OF THE SHED BY THE ASS ESSEE ON 15-12-2000, AFTER HOLDING THE SAME FOR A PERIOD OF MORE THAN 36 MONTHS IS TO BE TREATED AS LONG-TERM CAPITA L ASSET AND THE SALE OF THE SAME RESULTING INTO LOSS GAIN A LSO AMOUNTED TO LONG-TERM CAPITAL LOSS/GAIN. 4. LEARNED DR CONTENDS THAT THE CASE OF JITENDRA MO HAN (SUPRA) SPECIFICALLY SAYS THAT IT CANNOT BE RELIED AS GENER AL PROPOSITION. THEREFORE, THE ASSESSEE CANNOT BE ALLOWED RELIEF ON THIS BASIS ALONE. THE ORDER OF THE AO WAS RELIED UPON. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE PER USED THE RELEVANT MATERIAL ON RECORD. WE SEE NO INFIRMITY I N THE ORDER OF LEARNED CIT(A) INASMUCH AS IT IS UNDISPUTED THAT TH E ASSESSEE WAS ALLOTTED THE PLOT WAY BACK IN 1995. THERE WERE TWO PAYMENT PLANS I.E. OUTRIGHT AND INSTALLMENT BASIS. AS PER THE ALLOTME NT LETTER, THE ASSESSEE HAD A CHOICE TO AVAIL THE ALLOTMENT IN ANY OF THESE TWO PLANS. MERELY DIFFERING OF CONVEYANCE SUBJECT TO FULFILLME NT OF INSTALLMENT CANNOT LEAD TO A CONCLUSION THAT THE ASSESSEE BECAM E THE OWNER ONLY ON CONVEYANCE. HIS RIGHTS WERE IN TACT AND THE ISS UE HAS BEEN RIGHTLY ADDRESSED BY THE ITAT IN THE CASE OF JITENDRA MOHAN (SUPRA). LOOKING FROM THE CASE LAW POINT OF VIEW OF CAPITAL ASSET AS DEFINED IN SECTION 2(14), THE LEARNED CIT(A)S ORDER CONFORMS TO THESE PARAMETERS. IN VIEW THEREOF, WE UPHOLD THE ORDER OF LEARNED CIT(A) AND DISMISS THE APPEAL OF THE REVENUE. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 17 TH JUNE, 2011. SD/- SD/- (K.D.RANJAN) (K.D.RANJAN) (K.D.RANJAN) (K.D.RANJAN) (R.P.TOLANI) (R.P.TOLANI) (R.P.TOLANI) (R.P.TOLANI) ACCOUNTAN ACCOUNTAN ACCOUNTAN ACCOUNTANT MEMBER T MEMBER T MEMBER T MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER DATED : 17.06.2011. VK. ITA NO.435/DEL/2010 4 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR