Mrs. Nelly Crasto., Mapusa V. Income Tax Officer Ward-2 (1), Panaji

ITA 56/PAN/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93493 (ITAT-PANAJI)
• Duration Of Justice: 2 year(s) 2 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 08-06-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 18-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BANGARI LD
• Assessee Lawyers: CHINMAY S KAMAT; SHAM J KAMAT
• Keywords: Business income; Revision of order; Difference of opinion; Change of opinion
• Section: 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI GEORGE MATHAN , HONBLE JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, HON'BLE ACCOUNTANT MEMBER ITA N O . 55 /PNJ/20 13 : (A.Y 2008 - 09 ) MR. FRANCIS CRASTO, HN 63, GAONSA WADDO, MAPUSA, GOA. PAN : AEZPC6375F ( APPELLANT) VS. CIT, PANAJI (RESPONDENT) ITA N O . 56 /PNJ/20 13 : (A.Y 2008 - 09 ) MS. NELLY CRASTO, HN 63, GAONSA WADDO, MAPUSA, GOA. PAN : AEOPC6041B ( APPELLANT) VS. CIT, PANAJI (RESPONDENT) ASSESSEES BY : SHAM J. KAMAT, CA & CHINMAY S. KAMAT, CA REVENUE BY : M.R. BANGARI, LD. DR DATE OF HEARING : 08 / 06 /201 5 DATE OF PRONOUNCEMENT : 08 / 06 /201 5 O R D E R PER GEORGE MATHAN : 1. ITA NO. 55/PNJ/2013 IS AN APPEAL FILED BY THE ASSESSEE, MR. FRANCIS CRASTO AGAINST THE ORDER OF LD. CIT PASSED U/S 263 OF THE ACT IN F.NO. 37/AEZPC6375F/263/CIT - PNJ/2012 - 13 DT. 14.2.2013 AND ITA NO. 56/PNJ/2013 IS AN APPEAL FILED BY THE ASSESSEE, MS. NELLY CRASTO AGAINST THE 2 ITA NOS. 55 & 56/PNJ/2013 (A.Y : 2008 - 09) ORDER OF LD. CIT PASSED U/S 263 IN F.NO. 37/AEZPC6375F /263/CIT - PNJ/2012 - 13 DT. 14.2.2013 FOR THE A.Y 2008 - 09. AS BOTH THE APPEALS ARE INTER - CONNECTED AND IDENTICAL IN FACTS, BOTH THE APPEALS ARE DISPOSED OFF BY THIS COMMON ORDER. SHRI SHAM J. KAMAT, CA AND SHRI CHINMAY S. KAMAT, CA REPRESENTED ON BEHALF OF THE ASSES AND SHRI M.R. BANGARI, LD. DR REPRESENTED ON BEHALF OF THE REVENUE. 2. IT WAS SUBMITTED BY THE LD. AR THAT THE ASSESSEES, HUSBAND AND WIFE, HAD PURCHASED AN IMMOVEABLE PROPERTY FROM MR. ALIRIO DSOUZA BEING THE ASSESSEES UNCLE. THE IMMOVEABLE PROPERTY CONSISTED OF LAND MEASURING 2875 SQ. MTRS. , A LONGWITH AN OLD RESIDENTIAL HOUSE AT VILLAGE PILERNE. THE PURCHASE WAS DONE VIDE AN AGREEMENT DT. 19.11.2004 FOR A CONSIDERATION OF RS. 36 LACS. IT WAS THE SUBMISSION THAT CONSEQUENT TO THE AGREEMENT, THE ASSESSEES ALSO TOOK POSSESSION OF THE PROPERTY. SUBSEQUENTLY, THE SAID PROPERTY WAS SOLD ON 27.2.2008 TO M/S. FLAVOURS HOSPITALITY AND MANAGEMENT PVT. LTD. FOR A TOTAL CONSIDERATION OF RS. 75 LACS. THE ASSESSEES HAD OFFERED CAPITAL GAINS FOR THE S AME. THE ASSESSMENTS HAD ORIGINALLY BEEN COMPLETED U/S 143(3) ON 9.12.2010 WHEREIN PART OF THE EXPENDITURE INCURRED HAD BEEN DISALLOWED IN CONNECTION WITH THE IMPROVEMENT OF THE PROPERTY. SUBSEQUENTLY, THE LD. CIT HAD INVOKED HIS POWERS U/S 263 TO HOLD T HAT THE TRANSACTION FOR THE SALE OF THE SAID LAND WAS LIABLE TO BE ASSESSED AS BUSINESS INCOME IN THE HANDS OF THE ASSESSEES AND NOT UNDER THE HEAD CAPITAL GAINS. IT WAS THE SUBMISSION THAT THE FACT THAT TWO VIEWS ARE POSSIBLE ITSELF SHOWS THAT NO REVISIO N U/S 263 IS PERMISSIBLE. IT WAS THE SUBMISSION THAT THIS IS BECAUSE THE ASSESSEES HAD OFFERED THE GAINS TO TAX UNDER THE HEAD CAPITAL GAINS AND THE SAME WAS ALSO ACCEPTED BY THE AO AND ON THE SAME FACTS, THE LD. CIT HAS OPINED THAT THE GAINS WAS LIABLE T O BE TREATED AS BUSINESS INCOME. IT WAS FURTHER SUBMISSION THAT THE AGREEMENT AND ALL THE ISSUES IN RESPECT OF TAXABILITY OF THE GAINS AS CAPITAL GAINS HAD ALSO BEEN 3 ITA NOS. 55 & 56/PNJ/2013 (A.Y : 2008 - 09) EXAMINED BY THE AO AND IT WAS NOT POSSIBLE FOR THE LD. CIT TO INVOKE HIS POWERS U/S 263 O N A MERE CHANGE OF OPINION. IT WAS THE SUBMISSION THAT THE ORDER OF LD. CIT U/S 263 WAS LIABLE TO BE QUASHED. 3. IN REPLY, THE LD. DR VEHEMENTLY SUPPORTED THE ORDER OF THE LD. CIT PASSED U/S 263 OF THE ACT. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PERUSAL OF THE ASSESSMENT ORDER PASSED U/S 143(3) DT. 9.12.2010 CLEARLY SHOWS THAT THE AO HAS GONE INTO THE VARIOUS ASPECTS OF THE TRANSACTION AND HAS ALSO EXAMINED THE ISSUE OF THE EXPENDITURE INCURRED BY THE A SSESSEE AND HIS WIFE IN RESPECT OF THE IMPROVEMENT OF THE PROPERTY. A PERUSAL OF THE ORDER OF THE LD. CIT SHOWS THAT THE SAME EVIDENCES HAVE BEEN EXAMINED BY THE LD. CIT AND HE HAS TAKEN A VIEW THAT THE TRANSACTION ON THE SALE OF THE PROPERTY WAS IN THE N ATURE OF ADVENTURE IN THE NATURE OF TRADE AND WAS LIABLE TO BE ASSESSED UNDER THE HEAD BUSINESS INCOME. IN FACT, THE ASSESSEES HEREIN ARE NOT IN THE BUSINESS OF REAL ESTATE. THEY ARE RUNNING BUSINESS OF RESTAURANT. THE PROPERTY PURCHASED BY THE ASSESSEE S WAS USED AS THEIR RESIDENCE AND CERTAIN RESTORATION WORK HAD ALSO BEEN DONE BY THE ASSESSEES AND IT WAS ONLY ON ACCOUNT OF THE FACT THAT THE ASSESSEES WERE UNABLE TO PAY THE SELLER BEING THE ASSESSEES UNCLE WITHIN THE SPECIFIED TIME THAT THE ASSESSEES H AD TO BE THE CONSENTING PARTIES FOR THE SALE OF THE PROPERTY TO M/S. FLAVOURS HOSPITALITY AND MANAGEMENT PVT. LTD. THUS CLEARLY THE REVISION BY THE LD. CIT BY INVOKING HIS POWERS U/S 263 IS ONLY A CHANGE OF OPINION ON THE SAME FACTS WHICH HAVE BEEN EXAMIN ED AND CONSIDERED BY THE AO WHEN PASSING THE ORIGINAL ASSESSMENT ORDER. ADMITTEDLY, THIS IS NOT PERMISSIBLE U/S 263. IN THESE CIRCUMSTANCES, THE ORDER PASSED BY THE LD. CIT U/S 263 IMPUGNED IN BOTH THE APPEALS STAND QUASHED. 4 ITA NOS. 55 & 56/PNJ/2013 (A.Y : 2008 - 09) 5. IN THE RESULT, BOTH THE A PPEALS STAND ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 08/06/2015. S D / - (N.K. BILLAIYA) ACCOUNTANT MEMBER S D / - ( GEORGE MATHAN ) JUDICIAL MEMBER PLACE : PANAJI / GOA DATED : 0 9 /06/ 201 5 *SSL* COPY TO : (1) APPELLANT S (I) MR. FRANCIS CRASTO & (II) MS. NELLY CRASTO (2) RESPONDENT (3) CIT(A) CONCERNED (4) CIT CONCERNED (5) D.R (6) GUARD FILE TRUE COPY, BY ORDER , 5 ITA NOS. 55 & 56/PNJ/2013 (A.Y : 2008 - 09) DATE INITIAL ORIGINAL DICTATION PAD & DRAFT ORDER ARE ENCLOSED IN THE FILE 1. DRAFT DICTATED ON 08/06/2015 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 09/06/2015 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER /06/2015 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER /06/2015 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 0 9 /06/2015 SR.PS 6. DATE OF PRONOUNCEMENT 08/06/2015 SR.PS 7. FILE SENT TO THE BENCH CLERK 0 9 /06/2015 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER