AMOL C SHAH (HUF), MUMBAI V. ITO 21(1)(1), MUMBAI

ITA 4511/MUM/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3229 (ITAT-MUMBAI)
• Duration Of Justice: 1 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 30-06-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: RA JEEV WAGLAY
• Keywords: Unexplained cash credit; Capital asset; Additional evidence; Surrender of tenancy right
• Section: 143(3); 68; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH A, MUMBAI BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO.4511/M/2016 ASSESSMENT YEAR: 2009-10 AMOL C. SHAH (HUF), 167, READYMONEY TERRACE, WORLI NAKA, MUMBAI 400 018 PAN: AAAHA0841F VS. ITO, 21(1)(1), PIRAMAL CHAMBERS, 1 ST FLOOR, MUMBAI - 12 (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI RAJEEV WAGLAY, A.R. REVENUE BY : SHRI V.K. BORA, D.R. DATE OF HEARING : 17.08.2016 DATE OF PRONOUNCEMENT : 24.08.2016 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSES SEE AGAINST THE ORDER DATED 06.05.2016 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT Y EAR 2009-10. 2. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL: ON THE FACTS & THE CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) - 33 ERRED IN : - 1. CONFIRMING AN ADDITION OF RS. 50 LACS UNDER THE HEAD 'INCOME FROM OTHER SOURCES' AS AGAINST UNDER THE HEAD 'INCOME FR OM LONG TERM CAPITAL GAINS' AS OFFERED BY THE APPELLANT. 2 CONFIRMING THE ABOVE ADDITION OF RS. 50 LACS UNDE R THE HEAD 'INCOME FROM OTHER SOURCES' WITHOUT IDENTIFYING THE SOURCE THERE OF. 3. NOT ACCEPTING THE FACT THAT THE ABOVE AMOUNT OF RS. 50 LACS WAS RECEIVED BY THE APPELLANT ON SURRENDER OF ITS RIGHT S IN PROPERTY AT APTI. 4. OBSERVING THAT EVENTHOUGH THE HON'BLE TRIBUNAL I N THE CASE OF CARLTON COATS PVT. LTD. (ITA NO. 5432/MUM/2015 DATED 18.3.2 016 'C' BENCH) HAD ITA NO.4511/M/2016 SHRI AMOL C. SHAH (HUF) 2 OBSERVED THAT THE APTI PROPERTY WAS UNDER OCCUPATIO N OF THE APPELLANT, NOWHERE THE HON'BLE TRIBUNAL HAD GIVEN ANY FINDING THAT ANY RIGHT/TITLE WAS VESTED WITH THE APPELLANT WITH RESPECT TO THE PROPE RTY, THE SALE OF WHICH HAD GIVEN RISE TO LONG TERM CAPITAL GAINS IN THE HANDS OF THE APPELLANT. YOUR APPELLANT CRAVES LEAVE TO ADD, ALTER, MODIFY O R DELETE ALL OR ANY OF THE GROUNDS OF APPEAL. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY THE ASSESSEE ON 28 .07.2009 DECLARING TOTAL INCOME OF RS.42,000/-. THE ASSESSMENT WAS COMPLETE D UNDER SECTION 143(3) ON 23.12.2011 MAKING AN ADDITION OF RS.50,00,000/- ON ACCOUNT OF INCOME FROM OTHER SOURCES. ACCORDING TO THE ASSESSEE, THE AMOUNT REPRESENTED COMPENSATION FOR VACATING TENANCY RIGHTS ON THE PRO PERTY AT APTI KHALAPUR FROM M/S. CARLTON COATS PVT. LTD. THE ENTIRE AMOUNT WAS INVESTED IN CAPITAL GAIN BONDS AND DEDUCTION U/S.54EC WAS CLAIMED OUT O F CAPITAL GAINS. THE ASSESSING OFFICER (HEREINAFTER REFERRED TO AS THE A O) TREATED THE AMOUNT RECEIVED ON SURRENDER OF TENANCY RIGHT AS INCOME FR OM UNDISCLOSED SOURCES AND DEDUCTION U/S.54EC WAS NOT ALLOWED. THE ASSESSEE FI LED APPEAL BEFORE THE LD. CIT(A) WHO ALSO CONFIRMED THE ORDER OF THE AO STATI NG THAT IN THE ABSENCE OF ANY LEGAL AGREEMENT CONFIRMING ANY RIGHT OR INTERES T OF THE ASSESSEE IN THE PROPERTY, IT CANNOT BE ACCEPTED THAT ASSESSEE HAS R ECEIVED RS.50 LAKHS FROM M/S. CARLTON COATS PVT. LTD. ON ACCOUNT OF SALE OF ANY CAPITAL ASSET AND REJECTED THE CLAIM OF EXEMPTION U/S.54EC OF THE ACT AS THERE WAS NO INCOME EARNED AS CAPITAL GAIN. THE ASSESSEE FILED APPEAL BEFORE THE ITAT AND THE ITAT, CONSIDERING THAT IT HAS ALREADY REMITTED THE MATTER BACK TO THE AO IN THE CASE OF THE PAYER-COMPANY M/S. CARLTON COATS PVT. LTD., WHE RE THE AMOUNT OF RS.50 LAKHS PAID TO THE ASSESSEE WAS DISALLOWED, RESTORED THIS APPEAL BACK TO THE FILE OF THE AO BY OBSERVING THAT:- 'IN VIEW OF THIS SUBSEQUENT DEVELOPMENT, WE ONLY CO NSIDER IT FIT AND PROPER TO, AS WAS ALSO THE COMMON CONTENTION OF THE PARTIES BEFOR E US, WITH THIS ISSUE, I.E. NATURE OF PAYMENT OF RS 50 LAKHS RECEIVED FROM THE SAID PAYER- COMPANY IN ITS' (ASSESSEE'S) HANDS, BEING THE SOLE MATTER ARISING I N THIS APPEAL, RESTORE THE SAME BACK TO THE FILE OF THE ASSESSING OFFICER, WHO HAD IN FACT ASSESSED THIS SUM AS UNEXPLAINED CREDIT U/S. 68 FOR A DE NOVO CONSIDERAT ION, TO BE DECIDED, KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES OF T HE CASE, INCLUDING THE ITA NO.4511/M/2016 SHRI AMOL C. SHAH (HUF) 3 FINDINGS IN THE CASE OF THE SAID COMPANY (WHICH, IT WAS BROUGHT TO THE NOTICE IS ASSESSED UNDER A DIFFERENT WORD), IN ACCORDANCE WIT H THE LAW, PER A SPEAKING ORDER AND AFTER AFFORDING DUE OPPORTUNITY OF HEARING TO T HE ASSESSEE, EVEN AS PRONOUNCED ON THE CONCLUSION OF THE HEARING. WE ARE CONSCIOUS, WE MAY CLARIFY, THAT THE TWO ASSESSING AUTHORITIES I.E. HAVING JURISDICTION OVER THE PAYEE ASSESSEE AND THE PAYER COMPANY, ARE INDEPENDENT OF EACH OTHER, SO THAT ONE CANNOT POSSIBLE BIND THE OTHER. AT THE SAME TIME, THE NEED FOR CONSISTENCY I N, APART FROM THAT OF PROPER CONSIDERATION OF, THE MATTER CANNOT BE OVEREMPHASIZ ED. IN FACT, THE REVENUE IN BEING NOT CONSISTENT WOULD ONLY BE ACTING TO ITS OW N DETRIMENT. AGAIN, NEEDLESS TO ADD, THAT WE HAVE NOT EXAMINED THE ISSUE AT ALL, AN D MAY NOT BE CONSTRUED AS HAVING EXPRESSED ANY OPINION ON MERITS, EVEN PRIMA FACIE, IN THE MATTER. ON THE CONTRARY, OUR PASSING ANY ORDER ON MERITS WOULD AMO UNT TO SETTING AT NAUGHT THE ORDER BY THE TRIBUNAL IN THE CASE OF THE PAYER-COMP ANY, SO THAT OUR ORDER IS CONSISTENT THEREWITH. WE DECIDE ACCORDINGLY. 4. IN THE SET ASIDE PROCEEDINGS, THE AO AGAIN OBSER VED THAT THERE WAS NO TENANCY RIGHTS BY THE ASSESSEE HUF AND HENCE THE NA TURE OF RECEIPTS WAS NOT CAPITAL GAINS BUT WAS THE INCOME FROM OTHER SOURCES . HE, THEREFORE, HELD THAT WHEN THERE WAS NO CAPITAL GAINS, THERE WAS NO JUSTI FICATION IN ALLOWING EXEMPTION UNDER SECTION 54EC OF THE ACT. HE FURTHE R OBSERVED THAT THE AMOUNT RECEIVED BY THE ASSESSEE HUF WAS WITHOUT ANY CONSIDERATION. HE ALSO OBSERVED THAT THERE WAS NO DOUBLE TAXATION AS THE A MOUNT RECEIVED IN THE HANDS OF THE COMPANY M/S. CARLTON COATS PVT. LTD. WAS TAX ED IN THE HANDS OF THE COMPANY AND THE AMOUNT OF RS.50 LAKHS RECEIVED BY T HE ASSESSEE WAS JUST AN INCOME RECEIVED WITHOUT ANY CONSIDERATION AND HAS T O BE CONSIDERED AS INCOME FROM OTHER SOURCES. HE THEREFORE TREATED THE NATUR E OF RECEIPTS OF THE ASSESSEE AS INCOME FROM OTHER SOURCES AND DENIED THE CLAIM O F DEDUCTION UNDER SECTION 54EC OF THE ACT TO THE ASSESSEE. BEING AGGRIEVED B Y THE ABOVE ORDER OF THE AO, THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. CI T(A). 5. THE LD. CIT(A), HOWEVER, CONFIRMED THE FINDINGS OF THE AO AND DISMISSED THE APPEAL OF THE ASSESSEE OBSERVING THAT THE ASSESSEE HAD NO CAPITAL RIGHTS IN THE PROPERTY IN QUESTION AND THAT THE REC EIPTS IN THE HANDS OF THE ASSESSEE WAS JUST AN INCOME FROM OTHER SOURCES. TH E LD. CIT(A) ALSO CONSIDERED THE DECISION OF THE TRIBUNAL DATED 18.03 .16 IN ITA ITA NO.4511/M/2016 SHRI AMOL C. SHAH (HUF) 4 NO.5432/M/2015 IN THE CASE OF THE PAYER M/S. CARLTO N COATS PVT. LTD. THE RELEVANT PART OF THE FINDINGS OF THE LD. CIT(A) ARE REPRODUCED AS UNDER: 9. 1 HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE APPELLANT, OBSERVATIONS OF THE HON'BLE ITAT IN ITS ORDER DATED 10.06.2013, FINDINGS OF THE AO IN THE IMPUGNED ASSESSMENT ORDER, CONCLUS ION ARRIVED AT BY THE LD. CIT(A) IN THE ORDER DATED 11.02.2013 AND FACTS ON RECORD. MY OBSERVATIONS ARE AS UNDER: 10. THE ISSUE TO BE DECIDED HAS BEEN SUMMARIZED BY THE HONBLE TRIBUNAL IN PARA 2 OF THE ORDER DATED 10-06-2013, W HICH IS ASSESSABILITY TO TAX OF THE SUM OF RS. 50 LAOS RECEIVED BY THE ASSES SEE. IN PARA 3 OF THE SAID ORDER, HON'BLE TRIBUNAL HAS MADE AN IMPORTANT OBSERVATION TO THE EFFECT THAT WHEN THE HON'BLE BENCH ENQUIRED AS TO W HETHER THE ASSESSEE HAD ANY EVIDENCE TO ESTABLISH OCCUPANCY AND/ OR OCCUPAN CY RIGHTS IN THE PROPERTY, RENT RECEIPTS, ETC. VIS--VIS THE IMPUGNE D SUM RECEIVED, THE AR OF THE APPELLANT ADMITTED BEFORE THE HON'BLE TRIBUN AL THAT NO SUCH MATERIAL (PROOF) WAS ADDUCED BY THE APPELLANT, ALTH OUGH THE MOU BEARS THE REFERENCE TO SUCH RIGHTS. 11. DURING THE CURRENT APPELLATE PROCEEDINGS BEFORE THE UNDERSIGNED, THE APPELLANT HAS CONSISTENTLY TAKEN THE PLEA THAT DURING THE SET A-SIDE ASSESSMENT PROCEEDINGS BEFORE THE AO, IT HAS PRODUC ED ADDITIONAL EVIDENCES IN THE FORM OF RETURNS OF INCOME OF EARLI ER YEARS OF THE HUF, WHERE INCOME FROM ACTIVITIES CARRIED OUT FROM THE P ROPERTY SOLD, WAS REFLECTED. BUT THE AO HAS NOT CONSIDERED THESE ADDI TIONAL EVIDENCES WHILE CONCLUDING THE ASSESSMENT & TREATING THE RECE IPT OF RS. 50 LAC FROM INVESTMENT FROM OTHER SOURCES'. HOWEVER, I FIN D THIS PLEA OF THE APPELLANT WITHOUT ANY BASIS. THE RETURNS OF INCOME OF THE HUF OF PRIOR PERIOD CANNOT BE CONSIDERED AS ADDITIONAL EVIDENCES BEFORE THE AO DURING SET ASIDE ASSESSMENT, AS DURING THE ORIGINAL ASSESSMENT PROCEEDINGS ITSELF THE COPIES OF RETURNS OF INCOME OF THE HUF WAS SUBMITTED AND THE AO TOOK COGNIZANCE OF THE SAME IN THE FOLLOWING WORDS- 'A PERUSAL OF I.T. RETURNS OF THE ASSESSEE-HUF FOR ASSESSMENT YEARS 2008-09, 2007-08 AND 2006-07 ALSO SHOWS THAT THE ASSESSEE HUF HAS NOT ANY BUSINESS FR OM THE PREMISES OWNED BY THE SAID COMPANY WHERE SHRI A MOL C SHAH IS DIRECTOR AND OTHER DIRECTORS ARE HIS FAMI LY MEMBERS. IN THE RETURNS, THE ASSESSEE HUF HAS MEREL Y DISCLOSED INCOME FROM 'OTHER SOURCES'. IN RESPONSE TO NOTICE U/S 142(1), DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAS STATED THAT THE INCOM E SHOWN UNDER THE HEAD 'INCOME FROM OTHER SOURCES' IS THE INCOME THE ASSESSEE HAS EARNED FROM STAKING AND STOCKING OF PAPER ROLLS AND PAPER PACKING LABOUR WO RK FROM THE INDUSTRIAL UNITS WITHIN THE NEARBY LOCATIO NS OF KHALAPUR.' ITA NO.4511/M/2016 SHRI AMOL C. SHAH (HUF) 5 IN THE LIGHT OF THE ABOVE, THE AO CAME TO THE CONCL USION THAT THE APPELLANT WAS NOT ABLE TO PROVE WITH ANY DOCUMENTS THAT IT HELD OWNERSHIP/RIGHT/TITLE IN THE PROPERTY SOLD. EVEN DU RING THE SET ASIDE ASSESSMENT PROCEEDINGS, THE AO HAS TAKEN NOTE OF TH E ABOVE FINDINGS OF THE AO MADE IN THE ORIGINAL ASSESSMENT ORDER. IT I S PERTINENT TO NOTE HERE THAT THE ABOVE FINDINGS OF THE AO WAS ALREADY BEFORE THE HON'BLE TRIBUNAL. HOWEVER, THE AR OF THE APPELLANT ADMITTED BEFORE THE HON'BLE BENCH THAT NO PROOF WAS ADDUCED BY THE APPELLANT BE FORE THE AO TO ESTABLISH OCCUPANCY AND/ OR OCCUPANCY RIGHTS IN THE PROPERTY, RENT RECEIPTS, ETC. IMPLYING THAT SUCH PAST PERIOD RETUR NS OF INCOME AND INCOME SHOWN THEREIN CANNOT BE TREATED AS DOCUMENTA RY EVIDENCES. THEREFORE, I FIND NO MERIT IN THE ARGUMENT OF THE A PPELLANT THAT THE AO DID NOT TAKE INTO ACCOUNT THE ADDITIONAL EVIDENCES IN THE FORM OF PRIOR PERIOD RETURNS OF INCOME OF THE HUF. APART FROM THA T THERE IS NOTHING NEW IN THE ARGUMENT OF THE APPELLANT BEFORE THE UND ERSIGNED VIS--VIS THAT MADE DURING THE FIRST ROUND OF APPELLATE PROCE EDINGS BEFORE THE LD. CIT(A). 12. IT IS FURTHER OBSERVED THAT THE LD. CIT(A) IN H ER ORDER DATED 11.02.2013, AFTER ANALYZING THE FACTUAL MATRIX OF C ASE, MADE THE FOLLOWING OBSERVATIONS BEFORE COMING TO THE CONCLUS ION THAT THE RECEIPT OF RS.50 LAC WILL BE 'INCOME FROM OTHER SOURCES'. (I) THE RELEVANT PROPERTY WAS PURCHASED BY M/S. CA RLTON COATS PVT. LTD. ON 1.7.2002 FROM MAHARASHTRA STATE FINANCIAL C ORPORATION MUMBAI. IN THIS PURCHASE AGREEMENT THERE IS NO MENT ION OF THE APPELLANT HUF AS A EO-BUYER. EVEN THERE IS NO REFER ENCE OF APPELLANT HAVING ANY RIGHT, INTEREST OR TITLE IN TH IS PROPERTY. IF APPELLANT HAD ANY LEGAL RIGHT IN THAT PROPERTY, THE SAME SHOULD HAVE BEEN MENTIONED IN THE LEGAL AGREEMENT. (II) IN THE SALE AGREEMENT DATED 18.7.2008 ENTERED BETWEEN M/S. CARLTON COATS PVT. LTD. AND M/S VALISON & COMPANY A LSO THERE IS NO MENTION OF THE CLAIM OF THE APPELLANT HAVING ANY RI GHT OR INTEREST IN THE PROPERTY. EVEN IF FOR THE SAKE OF ARGUMENT, IT IS ACCEPTED THAT AFTER THE PURCHASE OF THE PROPERTY APPELLANT HAS AC QUIRED SOME RIGHTS AND INTEREST IN THE PROPERTY IN THAT CASE AN Y PAYMENT WHICH IN MADE IN LIEU OF SURRENDERING RIGHTS AND INTEREST IN THE PROPERTY WOULD DEFINITELY HAD REFLECTED IN THE REGISTERED SA LE AGREEMENT. IT IS NOT A SMALL AMOUNT AND APPELLANT HAS RECEIVED RS .50,00,000/- FROM THE M/S.CARLTON COATS PVT. LTD. ON THE PRETEXT OF SURRENDERING ITS RIGHTS IN THIS PROPERTY. IN SUCH A CASE, SHOULD THERE HAVE BEEN A MENTION IN THE SALE AGREEMENT ABOUT THIS FACT THAT IN LIEU OF SURRENDERING ITS RIGHTS AND INTEREST IN THE PROPERT Y, APPELLANT HUF WAS TO BE PAID RS.50,00,000- BY M/S. CARLTON COATS PVT. LTD. (III) THE ONLY DOCUMENT ON WHICH APPELLANT IS RELYING IS THE MEMORANDUM OF UNDERSTANDING ENTERED BETWEEN APPELLA NT AND M/S. CARLTON COATS PVT. LTD. ON 2.72007. IT IS IMPORTANT TO NOTE THAT KARTA OF ITA NO.4511/M/2016 SHRI AMOL C. SHAH (HUF) 6 HUF IS ALSO DIRECTOR IN THE M/S.CARLTON COATS PVT. LTD. THEREFORE, THIS MOU IS ENTERED BETWEEN GROUP CONCERN ONLY AND IT HAS TO BE CATEGORIZED AS A SELF-SERVING DOCUMENT. (IV) THERE IS NO DETAILS WHEN AND HOW APPELLANT ACQ UIRED THE RIGHTS IN THE PROPERTY. THERE IS NOT A SINGLE LEGAL AGREEMENT WHICH CAN PROVE THAT AT ONE STAGE OF TIME APPELLANT HAD A CQUIRED ANY LEGAL RIGHT IN THE PROPERTY. ONCE APPELLANT HAS NOT ACQUIRED ANY LEGAL RIGHT IN THE PROPERTY HOW IT CAN SELL OR SURR ENDER THIS NON- EXISTENT RIGHT TO ANY PERSON. THE TWO DOCUMENTS ON WHICH APPELLANT HAS RELIED ARE NOTICE ISSUED BY CHIEF JUD ICIAL MAGISTRATE ALIBAUGH, RAIGHAD AND SUMMONS ISSUED BY ALIBAUG COU RT. AS STATED IN THE ASSESSMENT ORDER, THESE NOTICES AND SUMMONS HAVE BEEN ISSUED TO SHRI AMOL C. SHAH IN HIS INDIVIDUAL CAPAC ITY AND NOT IN HUF CAPACITY. SHRI AMOL C SHAH IS A DIRECTOR IN THE COMPANY NAMED M/S. CARLTON COATS PVT. LTD AND THE NOTICES WERE AC TUALLY ADDRESSED TO HIM IN HIS CAPACITY AS A DIRECTOR OF THE COMPANY WHICH IS APART FROM THE FACT THAT THEY WERE DRESSED TO SHRI AMOI C . SHAH, OCCUPIER OF M/S CANTON COATS PVT. LTD. THESE NOTICES AND SUM MONS WERE RELATED TO A FATAL ACCIDENT WHICH OCCURRED IN FACTO RY PREMISES OF M/S CARLTON COATS PVT. LTD. AND IN WHICH ONE WORKER DIED IN ADDITION TO SHRI AMOL C. SHAH THESE NOTICES/SUMMONS WERE ALSO ADDRESSED TO SHRI RPA NOUDIYAL, WHO WAS THE MANAGER OF M/S. CARLTON COATS PVT. LTD. ALL THESE FACTS ONLY PROVE THE EXISTENCE OF FACTORY PREMISES OF M/S. CARLTON COATS PVT. LTD. ON THIS PROPERTY. FROM NO ANGLE THESE EVIDENCES CAN BE USED TO PROVE THAT THE APPELLANT HUF WAS HAVING THE POSSESSION OF ANY PART OF RELEVANT PROPERTY. (VI) DURING APPELLATE PROCEEDINGS, APPELLANT HAS AG AIN RELIED ON FEW JUDGMENTS. ONGOING THROUGH THESE JUDGMENTS IT IS SE EN THAT IN THESE CASES THE ISSUE WAS WHETHER SURRENDER OF TENA NCY RIGHTS IS LIABLE TO CAPITAL GAINS TAX, IN THE CASE OF THE APP ELLANT, APPELLANT HAS NOT ACQUIRED ANY TENANCY RIGHTS OVER THE PROPER TY. IN THE CASES CITED BY APPELLANT THERE HAVE BEEN LEGAL AGREEMENTS LIKE LEAVE AND LICENCE AGREEMENT GIVING TENANCY RIGHTS TO THE ASSE SSEE. THEREFORE, THE CASE OF THE APPELLANT CANNOT BE SAID TO BE COVE RED BY THESE CASES. IN THE CASE OF THE APPELLANT THERE IS NO LEG AL AGREEMENT, WHICH CAN PROVE THAT APPELLANT HAS, AT ANY POINT OF TIME ACQUIRED ANY RIGHTS IN THIS PROPERTY. NEITHER DURING THE COU RSE OF ASSESSMENT PROCEEDINGS NOR APPELLATE PROCEEDINGS APPELLANT HAS BEEN ABLE TO TELL THE DATE SINCE WHEN APPELLANT HAD ANY RIGHT OV ER THIS PROPERTY. IN THE ABSENCE OF ANY LEGAL AGREEMENT CONFIRMING AN Y RIGHT OR INTEREST OF THE APPELLANT IN THE PROPERTY, IT IS CL EAR THAT APPELLANT HAS NOT RECEIVED RS.50,00,000/-FROM M/S CARLTON COA TS PVT. LTD. ON ACCOUNT OF SALE OF ANY CAPITAL ASSET. (VII) APPELLANT'S OBJECT THAT ASSESSING OFFICER FIR ST ISSUED SHOW CAUSE PROPOSING ADDITION ULS.68 AND LATER ON ADDED INCOME AS ITA NO.4511/M/2016 SHRI AMOL C. SHAH (HUF) 7 INVESTMENT FROM UNEXPLAINED SOURCES IS NOT RELEVANT . THOUGH THE ADDITION CANNOT BE MADE AS INVESTMENT OUT OF UNEXPL AINED SOURCES BUT THE FACT REMAINS THAT APPELLANT HAS RECEIVED RS . 50,00,000/-/- FROM M/SCARLTON COATS PVTLTD WHICH WERE NOT RELATED TO ANY TRANSFER OF CAPITAL ASSET BY THE APPELLANT. ACCORDI NGLY, AS PER THE PROVISIONS OF SECTION 54EC OF THE L.T.ACT APPELLANT CANNOT CLAIM ANY EXEMPTION U/S 54 AS THERE IS NO INCOME, WHICH HAS B EEN EARNED AS CAPITAL GAIN. THEREFORE, ASSESSING OFFICER WAS JUST IFIED IN NOT ALLOWING DEDUCTION U/S 54EC OF THE IT. ACT.' 13. I FIND NO CHANGE IN THE FACTS OF THE CASE IN THE PR ESENT APPELLATE PROCEEDINGS VIS-A-VIS THAT BEFORE MY PRED ECESSOR LD.CIT(A) NOTWITHSTANDING AN OPPORTUNITY GIVEN BY T HE HON'BLE TRIBUNAL TO THE APPELLATE TO SUBMIT BEFORE THE AG-A NY PROOF OR EVIDENCE IN SUPPORT OF ITS CLAIM OF OCCUPANCY AND/ OR OCCUPANCY RIGHTS IN THE PROPERTY, RENT RECEIPTS, ETC. VIS--V IS THE IMPUGNED SUM RECEIVED. IT IS CLEAR THAT SINCE THE APPELLATE DID NOT HAVE ANY EVIDENCE TO SUPPORT ITS CLAIM, IT HAS GIVEN THE SHA PE OF ALREADY SUBMITTED EVIDENCES IN THE FIRST ROUND OF ASSESSMEN T AS ADDITIONAL EVIDENCES DURING THE CURRENT ROUND OF ASSESSMENT PR OCEEDINGS. IN FACT DURING THE PRESENT APPELLATE PROCEEDINGS, THE AR OF THE APPELLANT HAS ADMITTED BEFORE THE UNDERSIGNED THAT HE DOES NOT HAVE ANY FURTHER EVIDENCE TO SUPPORT HIS CLAIM. 14. LOOKING TO THE OVERALL FACTS AND CIRCUMSTANCES, IN MY CONSIDERED OPINION, THE OBSERVATIONS OF THE LD. CIT (A) IN PARA NO. 12 (I)-(VII) STILL HOLDS TRUE. THEREFORE, TAKING A CONSISTENT STAND IT IS HELD THAT RS. 50,00,000/- IS DEFINITELY A RECEIPT F ROM M/S CARLTON COATS PVT. LTD. IN THE HANDS OF THE APPELLANT. HOWE VER, THE APPELLANT HAS FAILED MISERABLY TO ESTABLISH THAT TH IS IS A RECEIPT RELATED TO SALE OF CAPITAL ASSETS WHETHER IN THE FO RM OF ANY RIGHTS OR INTEREST IN THE SAID PROPERTY OWNED & SOLD BY M/S C ARLTON COATS PVT. LTD. IT IS FURTHER OBSERVED THAT HON'BLE ITAT, 'C' BENCH, MUMBAI IN THE CASE OF CANTON COATS PVT. LTD VS. ITO (ITA NO.5432/MUM/2015 DATED 18/03/2016) HAS ALLOWED THE APPEAL OF THE COMPANY BY OBSERVING IN PARA 11 THAT SINCE THE IMPUGNED AMOUNT HAS ALREADY BEEN ASSESSED IN THE HANDS OF AM OL C. SHAH (HUF) VIDE ASSESSMENT ORDER DATED 03/03/2015 RS 50 IAKHS WILL BE DEDUCTABLE U/S 48(I) OF THE ACT IN THE CASE OF CARL TON COATS PVT. LTD. THE HON'BLE ITAT IN PARA 10 OF THE SAID ORDER HAS A LSO OBSERVED THAT THIS PROPERTY WAS UNDER OCCUPATION OF AMOL C S HAH(HUF). HOWEVER, NO WHERE HON'BLE TRIBUNAL HAS GIVEN ANY FI NDING THAT ANY RIGHT/TITLE WAS VESTED WITH THE ASSESSEE HUF WITH R ESPECT TO THE PROPERTY, THE SALE OF WHICH HAS GIVEN RISE TO LTCG IN HANDS OF THE APPELLANT. THEREFORE, THE RECEIPT OF RS. 50,00,000/ - CAN ONLY BE TREATED AS 'INCOME FROM OTHER SOURCES' & WILL BE TA XED ACCORDINGLY IN THE HANDS OF THE APPELLANT. FURTHER, THE APPELLA NT WILL BE ELIGIBLE FOR DEDUCTION U/S 54 EC OF THE IT. ACT. THUS ALL TH E GROUNDS OF APPEAL APPENDED IN THE APPEAL MEMO ARE DISMISSED . ITA NO.4511/M/2016 SHRI AMOL C. SHAH (HUF) 8 15. IN RESULT, APPEAL OF THE APPELLANT IS DISMISSED . 6. BEING AGGRIEVED BY THE ABOVE ORDER OF THE LD. CI T(A), THE ASSESSEE HAS COME IN APPEAL BEFORE US. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE ALS O GONE THROUGH THE RECORDS AND ALSO THE ORDER OF THE TRIBUNAL DATED 18 .03.2016 (SUPRA). THE ASSESSEE HUF HAS CLAIMED THAT IT HAS GOT CAPITAL RI GHTS IN THE SHAPE OF TENANCY RIGHTS IN THE PREMISES IN QUESTION AND THAT IT HAS GOT THE CONSIDERATION OF RS.50 LAKHS FOR SURRENDER OF THOSE TENANCY RIGHTS AND HEN CE THE INCOME IN THE HANDS OF THE ASSESSEE WAS IN THE NATURE OF CAPITAL GAINS. 8. WE HAVE PUT A SPECIFIC QUERY TO THE LD. A.R. WHE THER THERE WAS ANY EVIDENCE TO SHOW THAT THE ASSESSEE WAS INDUCTED AS A TENANT IN THE PREMISES BUT THE LD. A.R. COULD NOT SHOW US ANY SUCH EVIDENCES. FURTHER, A QUERY WAS RAISED WHETHER THE ASSESSEE HAD EVER PAID ANY RENT TO M/S. CARLTON COATS PVT. LTD. BUT THE LD. A.R. HAS BEEN FAIR ENOUGH TO ADMIT THAT THERE WAS NO EVIDENCE OF ANY PAYMENT OF RENT BY THE ASSESSEE TO M/S. CARL TON COATS PVT. LTD. THE LD. A.R. HAS ALSO FAILED TO EXPLAIN AS TO WHAT WAS THE NATURE OF THE RIGHTS OF THE ASSESSEE IN THE PROPERTY IN QUESTION. HE SIMPLY HA S STATED THAT THE SAME WAS OCCUPANCY RIGHTS. HOWEVER, THERE IS NO EVIDENCE ON THE FILE AS TO UNDER WHAT CIRCUMSTANCES AND UNDER WHAT RIGHT OR CONTRACT THE ASSESSEE HAS COME INTO POSSESSION OF THE PROPERTY IN QUESTION. IT IS PERT INENT TO NOTE HERE THAT THE KARTA OF THE ASSESSEE HUF NAMELY MR. AMOL C. SHAH IS ALSO THE DIRECTOR OF THE PAYER COMPANY M/S. CARLTON COATS PVT. LTD. ALONG WITH ANO THER DIRECTOR MR. MILIND C. SHAH. THE ENTIRE STRESS OF THE ASSESSEE HAS BEE N ON THE COPY OF MEMORANDUM OF UNDERSTANDING VIDE WHICH THE COMPANY HAS AGREED TO PAY RS.50 LAKHS TO MR. AMOL C. SHAH (HUF) WHEREIN IT HA S BEEN MENTIONED THAT THE SAID MR. AMOL C. SHAH (HUF) CLAIMS SHARE RIGHT TITLE AND INTEREST ON CERTAIN PORTIONS OF THE SAID PROPERTY. IT HAS ALSO BEEN MENTIONED THAT THE ASSESSEE HUF IS IN THE POSSESSION OF THE PROPERTY I N QUESTION SINCE THE ORIGINAL ITA NO.4511/M/2016 SHRI AMOL C. SHAH (HUF) 9 PURCHASE OF THE PROPERTY BY M/S. CARLTON COATS PVT. LTD. HOWEVER, THERE IS NOTHING MENTIONED IN THE COPY OF THE AGREEMENT THAT WHAT WAS THE NATURE OF POSSESSION IN THE PROPERTY IN QUESTION OF THE ASSES SEE HUF AND HOW OR UNDER WHAT RIGHTS THE ASSESSEE HUF COME INTO THE POSSESSI ON OF THE PROPERTY. THE OTHER EVIDENCE RELIED UPON BY THE ASSESSEE IS REGAR DING THE INCOME TAX RETURN WHEREIN IT HAS BEEN CLAIMED THAT THE ADDRESS OF THE ASSESSEE HUF MENTIONED IN THE INCOME TAX RETURNS IS THAT OF THE PREMISES IN Q UESTION. WE HAVE PERUSED THE COPIES OF THE INCOME TAX RETURNS AND HAVE FOUND THA T THE ASSESSEE HAD SHOWN CERTAIN INCOME FROM THE ACTIVITY OF STACKING/CUTTIN G/CLONING OF PAPERS AT APTI KHALAPUR. HOWEVER, IT IS NOT SUFFICIENT TO PROVE T HAT THE SAID ADDRESS IS OF THE PROPERTY IN QUESTION AT APTI KHALAPUR. THERE MAY B E ANY OTHER PROPERTY BEING USED BY THE ASSESSEE HUF AT APTI KHALAPUR. MOREOVE R, EVEN OTHERWISE, IF WE ASSUME THAT M/S. CARLTON COATS PVT. LTD. HAD ALLOWE D THE ASSESSEE TO OPERATE FROM ITS PREMISES THAT ITSELF IS NOT SUFFICIENT TO HOLD THAT THE ASSESSEE HAD GAINED ANY CAPITAL RIGHTS IN THE SAID PROPERTY. IN THE ABSENCE OF ANY EVIDENCE TO SHOW THAT THE ASSESSEE HAD EVER BEEN A TENANT IN THE SAID PROPERTY OR THE NATURE OF RIGHTS AND POSSESSION IN THE PROPERTY IN QUESTION; THE ASSESSEE AT THE MOST CAN BE SAID TO BE THE LICENSEE IN THE SAID PRO PERTY WHO HAS TO VACATE THE PREMISES AT THE WILL OF THE LICENSOR. NO CAPITAL R IGHTS UNDER SUCH CIRCUMSTANCES CAN BE HELD TO BE OWNED BY THE ASSESSEE IN THIS RES PECT. EVEN OTHERWISE AS OBSERVED ABOVE, THE KARTA OF THE ASSESSEE HUF IS TH E DIRECTOR OF THE PAYER COMPANY AND UNDER SUCH CIRCUMSTANCES THE HEAVY BURD EN IS CAST UPON THE ASSESSEE TO PROVE THAT THE ABOVE TRANSACTION IS NOT A SHAM TRANSACTION. THE ASSESSEE HAS MISERABLY FAILED TO PROVE THAT IT WAS OWNING ANY CAPITAL RIGHTS IN THE PROPERTY IN QUESTION WHICH WAS PURCHASED BY THE COMPANY. UNDER SUCH CIRCUMSTANCES, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) IN UPHOLDING THE ADDITIONS MADE BY THE AO. 9. SO FAR AS THE RELIANCE OF THE ASSESSEE ON THE OR DER OF THE CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF THE COMPANY M/ S. CARLTON COATS PVT. LTD. ITA NO.4511/M/2016 SHRI AMOL C. SHAH (HUF) 10 IS CONCERNED, WE FIND THAT THE TRIBUNAL HAS ALLOWED THE CLAIM OF DEDUCTION OF EXPENDITURE IN THE CASE OF M/S. CARLTON COATS PVT. LTD. OBSERVING THAT THE SAID AMOUNT OF RS.50 LAKHS HAS ALREADY BEEN TAXED IN THE CASE OF THE ASSESSEE HUF AND FURTHER THAT IT WAS PROVED THAT SUCH A PAYMENT WAS MADE BY THE M/S. CARLTON COATS PVT. LTD. TO THE ASSESSEE HUF. HOWEV ER, WE FIND THAT WHAT WILL BE THE NATURE OF INCOME ON ACCOUNT OF RECEIPT OF TH E SAID AMOUNT IN THE HANDS OF THE ASSESSEE HUF IS TO BE EXAMINED INDEPENDENTLY . IN OUR VIEW, THE AMOUNT RECEIVED BY THE ASSESSEE HUF IS NOT IN LIEU OF SURR ENDER OF ANY CAPITAL RIGHTS BUT ITS INCOME FROM OTHER SOURCES. 10. IN VIEW OF OUR OBSERVATIONS MADE ABOVE, WE DO N OT FIND ANY MERIT IN THE APPEAL OF THE ASSESSEE AND THE SAME IS ACCORDINGLY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 24.08.2016. SD/- SD/- (B.R. BASKARAN) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 24.08.2016. * KISHORE, SR. P.S. 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.