ACIT CEN CIR-9, MUMBAI V. BHAGWANDAS J. PATEL, MUMBAI

ITA 4697/MUM/2009

• Counselvise Citation: [2010] 119 COUNSELVISE.COM (IT) 6359 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 26-10-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 11-08-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: REENA JHA TRIPATHI
• Assessee Lawyers: J D MISTRY
• Keywords: Capital asset; Business income; Search and seizure; Cost of acquisition; Capital receipt
• Section: 2(14); 153A; 56

Judgement Text

1 ITA 4697/M/09, SHRI BHAGWANDAS J. PATEL IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES H BEFORE SHRI P.M. JAGTAP, A.M. AND SMT. ASHA VIJAYAR AGHAVAN, JM ITA NO. 4697/MUM/09 ASSESSMENT YEAR 2006-07 A.C.I.T. CENT. CIR. 9, 8 TH FLOOR, OLD CGO BLDG., ANNEX., M.K. ROAD, MUMBAI 20. PAN AANPP7373C VS. SHRI BHAGWANDAS J. PATEL, 17, KAMER BUILDING, 38 CAWASJI PATEL STREET, FORT, MUMBAI. 23 APPELLANT RESPONDENT APPELLANT BY MS. REENA JHA TRIPA THI RESPONDENT BY SHRI J.D. MISTRY ORDER PER P.M. JAGTAP, A.M. THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST TH E ORDER OF LD. CIT(A) CENT. VII DATED 3.6.09 WHEREBY HE DELETED THE ADDITION OF ` 1.21CRORES MADE BY THE A.O. TO THE TOTAL INCOME OF THE ASSESSEE ON ACCOUNT OF COMPENSATION R ECEIVED FROM M/S WADILAL DAULATRAM & SONS (WD). 2. THE ASSESSEE IN THE PRESENT CASE IS AN INDIV IDUAL WHO BELONGS TO REHAB GROUP. A SEARCH AND SEIZURE ACTION U/S 132(1) WAS CONDUCTED ON 4.10.06 IN THE REHAB GROUP OF CASES INCLUDING THE CASE OF THE ASSESSEE. THEREAFT ER, NOTICES U/S 153A WERE ISSUED BY THE A.O. ON 26.3.07 IN RESPONSE TO WHICH ASSESSEE FILED HIS RETURNS OF INCOME FOR THE RELEVANT YEARS INCLUDING THE YEAR UNDER CONSIDERATION I.E. A .Y. 2006-07. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTICED BY THE A.O. THAT THE ASSESSEE HAS CREDITED A SUM OF ` 1.21 CRORES IN HIS CAPITAL ACCOUNT. THE ASSESSEE, THEREFORE, WAS REQUIRED BY THE A.O. 2 ITA 4697/M/09, SHRI BHAGWANDAS J. PATEL TO CLARIFY AND EXPLAIN THIS CREDIT WITH DOCUMENTARY EVIDENCE. IN REPLY, A LETTER DTD. 20.11.08 WAS FILED BY THE ASSESSEE OFFERING HIS EXP LANATION AS UNDER: THERE WERE NEGOTIATIONS, WHICH TOOK PLACE BETWEEN M YSELF AND WADILAL DAULATRAM & SONS (WD) FOR PURCHASE OF THEIR PROPERT Y AT ANDHERI FOR MY INVESTMENT. THE NEGOTIATION NEVER TOOK THE SHAPE OF AN AGREEME NT. DIFFERENCES AROSE WHEN THE AGREEMENT WAS STILL A DRAFT STAGE. IT WAS MY CLAIM THAT THE DRAFT REPRESENTED INDICATIVE APPROVAL OF WD THAT, WD WAS INTERESTED IN AVOIDING THE AGREEMENT ON MALAFIDE GROUNDS. WD HAD CONSISTENTLY DENIED VERSION OF MYSELF. ACC ORDING TO WD, NEGOTIATIONS WERE AT INITIAL STAGE; THAT, THERE WAS NEVER AN APPROVAL BY WD TO THE DRAFT AGREEMENT; THAT, THE DRAFT AGREEMENT WAS NOT PREPARED BY WD; THAT THERE NEVER WAS ANY FIRM COMMITMENT MADE BY WD TO MYSELF; THAT, NOT EVEN ON ORAL AGREEMENT WAS REACHED WITH MYSELF. SIGNIFICANT TERMS OF TRANSFER WERE NOT EVEN AGREED TO BE BETWEEN MYSELF AND WD. IN ANY CASE, EVEN WD NEVER CLAIMED THAT AN A GREEMENT WAS EVER SIGNED BETWEEN MYSELF AND WD. BY AND UNDER ORDER DATED 25.03.1983 OF HONBLE HIG H COURT OF BOMBAY, THE HONBLE COURT HELD THAT I DID NOT MAKE OUT ANY PRI MA FACIE CASE FOR ANY CONCLUDED CONTRACT AND THAT WD WERE ALLOWED TO DEVELOP THE SA ID PROPERTY. HOWEVER, WD, ON ITS OWN, UNDERTOOK NOT TO CREATE THIRD PARTY INTERE ST DURING PENDENCY OF LEGAL PROCEEDINGS. THE MATTER RESTED THERE AS SUBJUDICED . THIS UNDERTAKING WAS POSSIBLY AN IMPEDIMENT TO WD. IT IS IN THE ABOVE CIRCUMSTANCES THAT THE PARTIES CHOSE TO EFFECT AN OUT OF COURT SETTLEMENT UNDER WHICH I RECEIVED SUM OF ` . 1.21 CR. FROM WD. A COPY OF THE COURT ORDER DATED 10.02.2006 IS ALREADY SUBMITTED F OR YOUR REFERENCE AND RECORDS. UNDER INCOME TAX ACT, 1961, A CAPITAL RECEIPT IS C HARGEABLE TO TAX ONLY WHEN TWO CONDITIONS ARE SATISFIED. IT SHOULD BE A CAPITAL ASSET AS DEFINED U/S 2(14) OF INCOME TAX ACT, 1961 AND THERE SHOULD BE A TRANSFER OF THE SAID CAPITAL ASSET. UNLESS BOTH THE CONDITIONS ARE SATISFIED THE CAPITAL RECEI PT CANNOT BE CHARGEABLE TO TAX. SECTION 45 OF INCOME TAX ACT STIPULATES THAT CAPITA L GAINS IS CHARGEABLE TO TAX ONLY WHEN THERE IS TRANSFER OF A CAPITAL ASSET. IN THE PRESENT CASE THE ASSESSEE NEVER POSSESSED ANY RIGHT UNDER THE LAW AS WELL AS ANY AS SET UNDER THE LAW. THERE WAS NEVER AN ORAL OR A WRITTEN AGREEMENT BETWEEN THE PA RTIES. SINCE 1983 THERE WAS NO STAGE ON WD AS REGARDS DEALING WITH THE PROPERTY. THEY WERE FREE TO DEVELOP THE PROPERTY AS PER THEIR OWN CHOICE. THE ONLY CLAIM T HE ASSESSEE HAD WAS IN RESPECT OF THE DAMAGES IN THE PENDING LITIGATION. WE SUBMIT THAT RIGHT TO CLAIM DAMAGES CONSEQUENT A BREACH OF A CONTRACT IS NOT A CAPITAL ASSET AND THE AMOUNT RECEIVED ON SETT LEMENT CANNOT BE SUBJECTED TO CAPITAL GAINS. 3 ITA 4697/M/09, SHRI BHAGWANDAS J. PATEL SECTION 2(14) DEFINES A CAPITAL ASSET. A RIGHT TO CAPITAL ASSET MUST FALL WITHIN THE EXPRESSION PROPERTY OF ANY KIND AND MUST NOT AL L WITHIN THE EXCEPTIONS PROVIDED THEREIN. THE RIGHT TO SUE FOR THE DAMAGES IS NOT A N ACTIONABLE CLAIM. IT CANNOT BE ASSIGNED OR TRANSFERRED. WE SUBMIT THAT IT WILL NO T FALL WITHIN THE SCOPE OF SECTION 2(14) OF INCOME TAX ACT, 1961 AND HENCE THE AMOUNT RECEIVED BY THE ASSESSEE SHOULD BE TREATED AS CAPITAL RECEIPT NOT CHARGEABLE TO TAX. IN VIEW OF THE ABOVE AND JUDICIAL PRONOUNCEMENTS A S EARLIER SUBMITTED, THE SUM OF ` 1.21 CR. RECEIVED BY ME CONSTITUTES A NONTAXABLE CAPITAL RECEIPT. IN THIS CASE, I WAS NEVER POSSESSED OF ANY RIGHT KNOWN TO L AW OR AN ASSET KNOWN TO LAW. THERE NEVER EXISTED AN AGREEMENT IN WRITING. THERE NEVER EXISTED EVEN AN ORAL AGREEMENT CONCLUDED BY TWO PARTIES. I HAVE EVEN CLA IMED THAT, WD WAS ATTEMPTING TO BACK OUT AT ADVANCE STAGE OF NEGOTIATION. NOW, AS HELD IN THE SAID CASES, RIGHT TO CLAIM DAM AGES CONSEQUENT UPON BREACH OF CONTRACT IS NOT A CAPITAL ASSET AND AMOU NT RECEIVED ON SETTLEMENT IS NOT SUBJECT TO LEVY OF CAPITAL GAINS TAX. THEREFORE, T HE RECEIPT OF SAID SUM OF ` 1.21 CRORES CONSTITUTES NON-TAXABLE CAPITAL RECEIPT IN M Y HAND. 3. THE ASSESSEE THUS CONTENDED THAT THE AMOUNT OF ` 1.21 CRORES RECEIVED BY HIM FROM WD WAS A CAPITAL RECEIPT WHICH WAS NOT CHARGEABLE T O TAX IN HIS HANDS. THE A.O. DID NOT FIND MERIT IN THIS CONTENTION OF THE ASSESSEE AND P ROCEEDED TO ADD THE AMOUNT OF ` 1.21 CRORES TO THE TOTAL INCOME OF THE ASSESSEE FOR THE FOLLOWING REASONS GIVEN IN PARA NO. 3.2 OF THE ASSESSMENT ORDER: ON GOING THROUGH THE FACTS OF THE CASE, IT IS SEEN THAT THERE WAS NO AGREEMENT EITHER WRITTEN OR ORAL BETWEEN THE ASSESSEE AND M/S WADILA L DAULATRAM & SONS, THERE IS NO CONSIDERATION PAID BY THE ASSESSEE FOR THE PURCHASE OR ACQUISITION OF ANY RIGHTS FOR THE PROPERTY. THE HONBLE BOMBAY HIGH COURT HAS AL SO HOLD THAT THE ASSESSEE DID NOT MAKE OUT ANY PRIMA FACIE CASE FOR ANY CONCLUDED CONTRACT AND M/S WADILAL DAULATRAM & SONS WAS ALLOWED TO DEVELOP THE SAID PR OPERTY. THE MATTER WAS FINALIZED BY ORDER OF THE HONBLE HIGH COURT ON 10. 02.2006. DURING THE PENDENCY OF LITIGATION, M/S WADILAL DAULATRAM & SONS DID NOT CREATE ANY THIRD PARTY INTEREST IN THIS PROPERTY. IN ORDER TO CLEAR THE PROPERTY FROM THIS LITIGATION, M/S WADILAL DAULATRAM & SONS PAID A SUM OF ` 1.21 CRORES TO THE ASSESSEE. AS STATED BY THE ASSESSEE IN THE NOTE ATTACHED TO THE COMPUTATION OF INCOME, THE ASSESSEE WAS ENGAGED IN THE NEGOTIATIONS WITH M/S WADILAL DAULAT RAM & SONS FOR ACQUIRING THEIR PROPERTY AT ANDHERI FOR PERSONAL USE AND INVESTMENT . THESE NEGOTIATIONS STARTED IN THE YEAR 1979 AND THE MATTER WENT TO THE COURT IN 1 983. AFTER PROLONGED LITIGATION, M/S WADILAL DAULATRAM & SONS FINALLY PAID TO THE AS SESSEE A SUM OF ` 1.21 CRORES FOR WITHDRAWING THE LITIGATION. THUS THE AMOUNT RE CEIVED BY THE ASSESSEE TO WITHDRAW THE LITIGATION WITHOUT HOLDING ANY PROPERT Y IS REVENUE RECEIPT AND IT HAS TO BE TAXED ACCORDINGLY IN THE A.Y. 2006-07 AS REVENUE RECEIPT. THE ASSESSEE IN ITS SUBMISSION HAS CREATED A NEW TERMINOLOGY BY STATING THAT THE RECEIPT OF SUM OF ` 1.21 CRORES CONSTITUTES NON TAXABLE CAPITAL RECEIP TS. THERE IS NO SUCH TERM IN THE ENTIRE INCOME TAX ACT. THE SUBMISSION OF THE ASSES SEE TO THE EXTENT THAT THE RECEIPT 4 ITA 4697/M/09, SHRI BHAGWANDAS J. PATEL IS NOT COVERED WITHIN THE DEFINITION OF CAPITAL ASS ET U/S 2(14) OF THE I.T. ACT, 1961 IS CORRECT AND IN FACT IT IS NOT A CAPITAL RECEIPT. TH E NATURE OF RECEIPT IS A CLEAR CUT REVENUE RECEIPT. THE TERM INCOME HAS BEEN DEFINE D IN THE PROVISIONS OF SEC. 2(24) OF THE I.T. ACT, 1961. THE DEFINITION OF INCOME IS VERY WIDE AND IT INCLUDES ALL KINDS OF RECEIPTS, GAINS, ETC. AS ENUMERATED IN TH IS PROVISION. CHAPTER IV DEALS WITH VARIOUS HEADS OF INCOME. IF ANY PARTICULAR INCOME I S NOT FALLING UNDER ANY HEAD THEN IT IS TO BE TAXED AS INCOME FROM OTHER SOURCES U/S 56 OF THE I.T. ACT, 1961. THE PROVISIONS OF SEC. 56(1) READS AS UNDER:- INCOME OF EVERY KIND WHICH IS NOT TO BE EXCLUDED F ROM THE TOTAL INCOME UNDER THIS ACT SHALL BE CHARGEABLE TO INCOME TAX U NDER THE HEAD INCOME FROM OTHER SOURCES, IF IT IS NOT CHARGEABLE TO IN COME-TAX UNDER ANY OF THE HEADS SPECIFIED IN SECTION 14, ITEMS A TO E. THE LANGUAGE OF THIS SECTION CLEARLY STATES THAT T HE INCOME OF EVERY KIND WHICH IS NOT TO BE EXCLUDED FROM THE TOTAL INCOME U NDER THIS ACT, SHALL BE CHARGEABLE TO I.T. ACT UNDER THE HEAD INCOME FROM OTHER SOURC ES. THAT MEANS FOR CLAIMING ANY RECEIPT/ACCRUAL/INCOME AS NOT FORMING PART OF T OTAL INCOME, THERE HAS TO BE A SPECIFIC EXCLUSION OF THE SAME WITHIN THE I.T. ACT ITSELF. CHAPTER III OF THE I.T. ACT GIVES THE DETAILS OF INCOME WHICH DO NOT FORM PART OF TOTAL INCOME. THE NATURE OF RECEIPTS OF THE ASSESSEE IS NOT COVERED UNDER ANY O F THE PROVISIONS OF CHAPTER III OF THE I.T. ACT. THEREFORE, THE RECEIPT OF ` 1.21 CRORES IS REVENUE RECEIPT IN THE HANDS OF THE ASSESSEE AND ACCORDINGLY THE SAME IS ADDED TO T HE TOTAL INCOME FOR THE A.Y. 2006-07. 4. THE ADDITION OF ` 1.21 CRORES MADE BY THE A.O. WAS CHALLENGED BY THE ASSESSEE IN AN APPEAL FILED BEFORE THE LD. CIT(A) AND ELABORATE SU BMISSIONS WERE MADE ON BEHALF OF THE ASSESSEE BEFORE THE LD. CIT(A) IN SUPPORT OF HIS ST AND THAT THE AMOUNT OF ` 1.21 CRORES RECEIVED FROM WD AS COMPENSATION WAS CAPITAL RECEIP T WHICH WAS NOT CHARGEABLE TO TAX. THE LD. CIT(A) FOUND MERIT IN THE SAID SUBMISSIONS MADE ON BEHALF OF THE ASSESSEE AND DELETED THE ADDITION OF ` 1.21 CRORES MADE BY THE A.O. FOR THE FOLLOWING REA SONS GIVEN IN PARA NO. 6 TO 6.2 OF HIS IMPUGNED ORDER. I HAVE CAREFULLY CONSIDERED THE ABOVE FACTS AND FIN D SUFFICIENT MERIT IN THE CONTENTIONS OF THE APPELLANT. ON THE OTHER HAND, T HE CONCLUSION OF THE A.O. THAT ALL SUCH RECEIPTS ARE LIABLE TO BE TAXED UNDER SOME OR THE OTHER HEAD OF INCOME IS NOT TENABLE WITHOUT EXAMINING THE EXACT NATURE OF THE R ECEIPT, THE SURROUNDING CIRCUMSTANCES AND THE PROVISIONS OF THE ACT. MOREO VER, THE OBSERVATION THAT SUCH A SUM WAS REVENUE RECEIPT IS ALSO NOT WELL FOUNDED AS THE CONCLUSION IS NOT SUPPORTED BY ANY SUBSTANCE. THE APPELLANT IS NOT IN THE BUSI NESS OF PURCHASING AND SELLING IN REAL ESTATE. THIS ISOLATED INSTANCE COULD NOT BE T REATED AS BUSINESS RECEIPT FROM ANY STRETCH OF IMAGINATION. MOREOVER, IT IS A SETTLED LAW THAT EACH AND EVERY RECEIPT IS NOT CHARGEABLE TO INCOME TAX. UNDER THE ACT, INCOM E IS DEFINED U/S 2(24) WHICH IS AN INCLUSIVE DEFINITION. WHATEVER IS STIPULATED U/S 2(24)(I) TO (XIV) CAN ONLY BE 5 ITA 4697/M/09, SHRI BHAGWANDAS J. PATEL SUBJECTED TO TAX AS INCOME. EVERY RECEIPT HAS TO F ALL INTO ONE OF THE CLASSIFICATION OF SECTION 2(24). IF THE ASSESSING OFFICER WANTS TO T AX A PART OF THE RECEIPT AS CHARGEABLE INCOME, THEN THE BURDEN LIES ON HIM TO E STABLISH THAT THE RECEIPT HAS A CHARACTER OF INCOME. THE ONLY ALTERNATIVE TREATMENT OF THE SAID RECEIPT COULD BE OF CAPITAL RECEIPT LIABLE TO CAPITAL GAINS. HOWEVER, ON EXAMINATION O F THE FACTS OF THE CASE, EVEN THIS PROPOSITION IS NOT APPLICABLE TO THE FACTS OF THE C ASE. IN THE PRESENT CASE, THERE WAS NO FORMAL AGREEMENT OF THE APPELLANT WITH THE SAID SELLER AND THEREBY, HAD NO LEGALLY ENFORCEABLE RIGHT VESTED IN THE SAID PROPERTY. WHA T THE APPELLANT HAS RECEIVED IS MERELY DAMAGES OR COMPENSATION. A CAPITAL RECEIPT IS CHARGEABLE TO TAX ONLY WHEN IT S CAPITAL ASSET AS DEFINED U/S 2(14) AND SECTION 45 OF THE ACT STIPULATES THAT CAPITAL GAIN ARE CHARGEABLE TO TAX ONLY WHEN THERE IS TRANS FER OF A CAPITAL ASSET. IN THE PRESENT CASE, THE ASSESSEE NEVER POSSESSED ANY RIGH T UNDER LAW AS WELL AS ANY ASSET UNDER THE LAW. THERE WAS NEVER AN AGREEMENT BETWEE N THE PARTIES. IT MAY ALSO BE STATED HERE THAT SUCH A RECEIPT EVEN IF CONSIDERED TO BE A CAPITAL RECEIPT DOES NOT ATTRACT THE PROVISIONS OF SECTION 55(2) OF THE ACT WHICH PROVIDES FOR COST OF ACQUISITION OF NIL IN RESPECT OF CERTAIN SPECIFIED ASSETS ONLY. THE COMPENSATION RECEIVED BY THE APPELLANT IS NOT HIT BY THE SAID PR OVISIONS AS WELL. MOREOVER, IN THE PRESENT CASE THERE BEING NO COST OF ACQUISITION, TH E PROVISIONS OF CAPITAL GAINS ARE NOT ATTRACTED IN ANY CASE. THE RATIO IN THE CASE OF B. C. SHRINIVASA SHETTY (SUPRA) IS FULLY APPLICABLE. THE LAW IS TRITE THAT WHEN AN ASSET HA S NO COST OF ACQUISITION, THE GAINS ON SALE OF TRANSFER OF SAME CANNOT BE BROUGHT TO TA X. IN THE LIGHT OF ABOVE DISCUSSION AND ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE, IT IS HELD THAT THE IMPUGNED SUM IS NEITHER A REVENUE RECEIPT NOR TAXABLE AS CAPITAL GAINS. THE ADDITION MADE IS, THEREFORE, DE LETED. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE REVEN UE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 5. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDE S AND ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS OBSERVED THAT THE ASSESS EE UNDISPUTEDLY IS NOT IN THE BUSINESS OF REAL ESTATE AND THE PROPERTY AT ANDHERI WAS PROPOSE D TO BE PURCHASED BY HIM FROM WD AS AN INVESTMENT. ALTHOUGH THE SAID TRANSACTION WHICH WAS NEGOTIATED BY THE ASSESSEE WITH WD DID NOT MATERIALIZE AND NEGOTIATION NEVER TOOK T HE SHAPE OF AGREEMENT DUE TO SOME DISPUTE BETWEEN THE ASSESSEE AND WD, THE ASSESSEE C LAIMED A BREACH ON THE PART OF WD AND THE MATTER WAS SUBJUDICED SINCE 1983. THE HON BLE BOMBAY HIGH COURT, HOWEVER, HELD THAT THERE WAS NO PRIMA FACIE CASE WHICH THE A SSESSEE COULD MAKE OUT FOR ANY CONCLUDED CONTRACT AND ACCORDINGLY ALLOWED WD TO DE VELOP THE PROPERTY AT ANDHERI. IN TURN, THE WD UNDERTOOK NOT TO CREATE THIRD PARTY IN TEREST DURING PENDENCY OF LEGAL 6 ITA 4697/M/09, SHRI BHAGWANDAS J. PATEL PROCEEDINGS AND THE MATTER RESTED THERE AS SUBJUDIC ED. IN THE YEAR 2006, THE ASSESSEE AND WD CHOOSE TO EFFECT AN OUT OF COURT SETTLEMENT UNDE R WHICH A SUM OF ` 1.21 CRORES WAS PAID BY THE WD TO THE ASSESSEE. THIS SETTLEMENT WA S RECOGNIZED BY THE COURT ORDER DTD. 10.2.06. 1THE AMOUNT OF ` 1.21 CRORES RECEIVED BY THE ASSESSEE FROM WD ON SU CH SETTLEMENT THUS WAS A CAPITAL RECEIPT AND THE ONLY HEAD OF INCOME UNDER WHICH THE SAME COULD BE BROUGHT TO TAX IN THE HANDS OF THE ASSESSE E WAS CAPITAL GAIN. AS PER THE PROVISIONS OF SECTION 45 OF THE INCOME TAX ACT, 196 1, THE CAPITAL RECEIPTS, HOWEVER, IS CHARGEABLE TO TAX UNDER THE HEAD CAPITAL GAINS ONLY WHEN THERE IS A TRANSFER OF CAPITAL ASSET. IN THE PRESENT CASE, THERE WAS NEITHER ANY CAPITAL ASSET WITHIN THE MEANING OF SECTION 2(14) WHICH WAS POSSESSED BY THE ASSESSEE N OR THERE WAS ANY TRANSFER OF SUCH CAPITAL ASSET AS A RESULT OF WHICH THE AMOUNT OF ` 1.21 CRORES IN QUESTION WAS RECEIVED BY HIM. MOREOVER, EVEN IF IT IS ASSUMED FOR THE SAKE OF ARGUMENT THAT THERE WAS A TRANSFER OF CAPITAL ASSET BY THE ASSESSEE OR RIGHT THEREIN, THE RE BEING NO COST OF ACQUISITION, CAPITAL GAINS WAS NOT ATTRACTED AS RIGHTLY HELD BY THE LD. CIT(A) RELYING ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. H.C. S RINIVASA SETTY 128 ITR 294. AS FURTHER HELD BY THE LD. CIT(A), THE AMOUNT IN QUEST ION WAS NOT COVERED IN THE DEFINITION OF INCOME AS GIVEN IN SECTION 2(24) WHICH COULD BE SUBJECTED TO TAX IN THE INCOME TAX ACT 1961. AS SUCH CONSIDERING ALL THE FACTS OF THE CASE, WE FIND NO INFIRMITY IN THE IMPUGNED ORDER OF THE LD. CIT(A) IN HOLDING THAT TH E AMOUNT OF ` 1.21 CRORES RECEIVED BY THE ASSESSEE FROM WD WAS CAPITAL RECEIPT NOT CHARGE ABLE TO TAX. ACCORDINGLY, THE IMPUGNED ORDER OF THE LD. CIT(A) DELETING THE ADDIT ION OF ` 1.21 CRORES MADE BY THE A.O. TO THE TOTAL INCOME OF THE ASSESSEE IS UPHELD AND T HIS APPEAL OF THE REVENUE IS DISMISSED. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED ON 26 TH NOVEMBER, 2010. SD/- SD/- (ASHA VIJAYARAGHAVAN) ( P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED 26 TH NOVEMBER , 2010. 7 ITA 4697/M/09, SHRI BHAGWANDAS J. PATEL RK COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) CENTRAL VII - MUMBAI 4. THE CIT- CENTRAL 1 MUMBAI 5. THE DR BENCH, H 6. MASTER FILE // TUE COPY// BY ORDER DY/ASSTT. REGISTRAR ITAT, MUMBAI 8 ITA 4697/M/09, SHRI BHAGWANDAS J. PATEL DATE INITIALS 1. DRAFT DICTATED 26.10.10, 3.11.10 SR.P.S./P.S. 2. DRAFT PLACED BEFORE AUTHOR 2.11.10, 3.11.10 SR.P.S./P.S. 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER. - J.M./A.M. 4.DRAFT DISCUSSED/ APPROVED BY SECOND MEMBER. J.M./A.M. 5. APPROVED DRAFT COMES TO THE SR.P.S./P.S. SR.P.S./P.S. 6. KEPT FOR PRONOUNCEMENT ON SR.P.S./P.S. 7. FILE SENT TO THE BENCH CLERK SR.P.S./P.S. 8. DATE OF WHICH FILE GOES TO THE HEAD CLERK. 9. DATE OF DISPATCH OF ORDER.