Karan Chaudhary, Kolkata V. ITO, Ward-30(2), Kolkata

ITA 532/KOL/2020

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 4377 (ITAT-KOLKATA)
• Duration Of Justice: 3 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-02-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 08-02-2021
• Assessment Year: 2016-2017
• Appeal Filed On: 14-10-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset; Capital Gains

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH SMC KOLKATA BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER . / ITA NO.532/KOL/2020 ASSESSMENT YEAR:2016-17 KARAN CHAUDHARY P/593, PURNADAS ROAD, KOLKATA-700 029 [ PAN NO.AHNPC 5835 D ] / V/S . INCOME TAX OFFICER, WARD-30(2), AAYAKAR BHAWAN, (DAKSHIN), 2,GARIAHAT ROAD, K KOLKATA-700 031 /APPELLANT .. /RESPONDENT HEARING THROUGH VIDEO CONFERENCING /BY APPELLANT SHRI MIRAJ D SHAH, ADVOCATE /BY RESPONDENT SHRI JAYANTA KHANRA, JCIT-SR-DR /DATE OF HEARING 08-02-2021 /DATE OF PRONOUNCEMENT 08-02-2021 /O R D E R THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSES SEE AGAINST THE ORDER DATED 27.02.2020 OF THE COMMISSIONER OF INCOME-TAX (APPEA LS)-8, KOLKATA [HEREINAFTER REFERRED TO AS CIT(A)]. 2. THE ONLY ISSUE RAISED BY THE ASSESSEE IN THIS AP PEAL IS AS TO WHETHER THE INCOME EARNED FROM THE SALE OF RIGHT IN THE PROPERTY / FLA T WHICH WAS ACQUIRED BY THE ASSESSEE BY WAY OF ALLOTMENT LETTER FROM THE BUILDER IN THE YEAR 2010 WOULD QUALIFY AS LONG TERM CAPITAL GAINS OR UNDER THE HEAD INCOME FROM O THER SOURCES. ITA NO.532/KOL/2020 A.Y.2016-17 KARAN CHAUDHARY VS. ITO, WD-30(2), KOL. PAGE 2 3. THE ASSESSEE APPLIED FOR THE FLAT AND THE ALLOT MENT LETTER WAS ISSUED BY THE BUILDER IN 2010. HOWEVER, BEFORE TAKING THE ACTUAL POSSESSION OF THE FLAT, THE ASSESSEE TRANSFERRED HIS RIGHTS IN THE SAID FLAT TO SOME OTH ER PERSON EARNING A PROFIT OF 21,27,200/-. AS PER THE INCOME TAX AUTHORITIES, THE ASSESSEE HAD NOT GOT THE POSSESSION OF THE IMMOVABLE PROPERTY AND THAT WHAT WAS TRANSFERRED ONLY WAS THE RIGHTS IN THE PROPERTY. THE ASSESSING OFFICER, THER EFORE, HELD THAT SINCE THE RIGHTS IN THE PROPERTY DID NOT CONSTITUTE CAPITAL ASSET , THEREFORE, THE INCOME FROM THE SALE OF RIGHTS IN THE SAID FLAT WAS LIABLE TO BE ASSESSED A S INCOME FROM OTHER SOURCES. 4. BEING AGGRIEVED BY THE SAID ORDER OF THE ASSESSI NG OFFICER THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A), HOWEVER, CO ULD NOT SUCCEED. 5. BEFORE THIS TRIBUNAL, THE LD. COUNSEL FOR THE AS SESSEE HAS REITERATED HIS SUBMISSIONS AND HAS FURTHER SUBMITTED THAT ASSESSEE HAD GOT TRANSFERABLE RIGHTS IN THE IMMOVABLE PROPERTY / FLAT. THAT THE SAID RIGHTS IN THE FLAT WERE SOLD AFTER A PERIOD OF FIVE YEARS. THAT ASSESSEE HAS NOT BEEN INVOLVED IN THE REGULAR SALE AND PURCHASE OF RIGHTS IN THE IMMOVABLE PROPERTY. THAT THE INVESTME NT WAS MADE BY THE ASSESSEE IN THE SAID IMMOVABLE ASSET / FLAT AND THE ASSESSEE AFTER GETTING THE ALLOTMENT LETTER HAD GOT RIGHT TO ACQUIRE THE SAID PROPERTY, WHICH WAS TRANS FERRED TO SOME OTHER PERSON AFTER GAP OF FIVE YEARS. THE LD. COUNSEL IN THIS RESPECT HAS RELIED UPON THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF INCOME TAX OFFICER WARD-31(1) KOLKATA VS. MAHESH KUMAR SINGHANIA (HUF) IN ITA NO.1387/KOL/2017 VIDE ORDER DATED 25.10.2017 WHEREIN, IN THE IDENTICAL FACTS AN D CIRCUMSTANCES, THE CO-ORDINATE BENCH OF THE TRIBUNAL WHILE RELYING UPON ANOTHER DE CISION OF HON'BLE MADRAS HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. SRI S.R. JEYASHANKAR 373 ITR 120 (MAD), HAS HELD THAT AFTER THE ISSUANCE OF THE ALLOTMENT LETTER IN THE FLAT, THE ASSESSEES RIGHT IN THE SAID ASSET IS TO BE TREATED AS CAPITAL ASSET AND THE PROFITS EARNED FROM THE SALE OF THE SAID ASSET ARE LIABLE TO BE AS SESSED AS LONG TERM CAPITAL GAINS. LD. DR COULD NOT REBUT THE ABOVE CASE LAW EITHER ON FAC TS OR ON LEGAL POSITION. THEREFORE, ITA NO.532/KOL/2020 A.Y.2016-17 KARAN CHAUDHARY VS. ITO, WD-30(2), KOL. PAGE 3 RESPECTFULLY FOLLOWING THE DECISION OF THE CO-ORDIN ATE BENCH OF THE TRIBUNAL, IT IS HELD THAT THE PROFIT EARNED BY THE ASSESSEE IN SALE OF R IGHTS IN THE SAID FLAT ARE TO BE TREATED AS CAPITAL GAINS AND NOT INCOME FROM OTHER SOURCES . THE ASSESSING OFFICER IS DIRECTED TO RE-COMPUTE THE LTCG IN RESPECT OF THE A BOVE PROFIT EARNED BY THE ASSESSEE AFTER GIVING DUE BENEFIT OF INDEXATION ETC., THE APPEAL OF THE ASSESSEE IS, HEREBY, ALLOWED . ORDER DICTATED AND PRONOUNCED IN OPEN COURT IMMEDIA TELY ON COMPLETION OF HEARING ON MONDAY, 8 TH FEBRUARY, 2021 SD/- (SANJAY GARG) JUDICIAL MEMBE R KOLKATA, *DKP/SR.PS ' - 08/02/2021 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-KARAN CHAUDHARY, P/593, PURNADAS ROAD, K OLKATA-29 2. /RESPONDENT-ITO WD-30(2), AAYAKAR BHAWAN,(DAKSHIN) 2, GARIAHAT ROAD KOLKATA-31 3. % ' / CONCERNED CIT 4. ' - / CIT (A) 5. ( ++% , % / DR, ITAT, KOLKATA 6. - / GUARD FILE. BY ORDER/ , /TRUE COPY/ %,