SHILPA HEMANT PRADHAN, THANE V. ITO WD 3(3), THANE

ITA 562/MUM/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 2567 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2011-2012
• Appeal Filed On: 27-01-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Capital receipt
• Section: 142(1)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUM BAI . . , , !' , # , $ BEFORE SHRI R.C.SHARMA, AM AND SHRI AMARJIT SINGH, JM / I.T.A. NO.562/MUM/2015 ( #% & / ASSESSMENT YEAR: 2011-12) SHILPA HEMANT PRADHAN C-1101, SUNGLOW, SHREEJI VILLE COMPLEX, ALMEIDA ROAD,PANCHPAKHADI, THANE (W),MUMBAI 400 601. % / VS. THE INCOME TAX OFFICER, WARD- 3(3), ROOM NO.8, B WING, 6 TH FLOOR, ASHAR I.T. PARK, ROAD NO.16-Z, WAGLE INDL. ESTATE, THANE-400 604. ./ ./PAN/GIR NO. : AEYPP 2433 A ( /APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING: 07.09.2016 /DATE OF PRONOUNCEMENT: 28.09.2016 !' / O R D E R PER AMARJIT SINGH, JM: THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST T HE ORDER DATED 06.01.2015 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) 2, MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] R ELEVANT TO THE A.Y.2011-12. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- ASSESSEE BY: SHRI M.C. NANIWADEKAR DEPARTMENT BY: SHRI VIKRAM BATRA ITA NO.562/M/2015 A.Y. 2011-12 2 1. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ACTIO N OF THE AO IN BRINGING TO TAX THE AMOUNT OF RS. 1 CRORE RECEIVED BY THE ASSESSEE FROM M/S. COLORCON ASIA PVT. LTD. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN HOLDING THAT THE SAID AMOU NTS CONSTITUTED A REVENUE RECEIPT IN THE HANDS OF THE ASSESSEE U/S.28( VA) . HE FAILED TO APPRECIATE THAT WHEN THE ASSESSEE WAS NOT CARRYING ON ANY BUSINESS AT ALL IN THE RELEVANT PREVIOUS YEAR, THERE COULD BE N O QUESTION OF CHARGEABILITY UNDER THE HEAD 'PROFITS AND GAINS OF BUSINESS OR PROFESSION', AND S. 28(VA) COULD HAVE NO APPLICATION WHATSOEVER. 3. THE LEARNED CIT(A) ERRED IN FAILING TO APPRECIAT E THAT THE SAID RECEIPT WAS A PURE CAPITAL RECEIPT AND WAS NOT A RE VENUE RECEIPT AND WAS NOT CHARGEABLE TO TAX. THE ORDERS OF THE LEARNED CIT(A) AND THE LEARNED AO ARE ERRONEOUS AND CONTRARY TO THE LEGAL POSITION. 4. THE LEARNED CIT(A) ERRED IN RELYING UPON THE DEC ISION OF GUFFIC CHEM PVT. LTD. DESPITE THE SAME BEING DISTINGUISHA BLE. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME ON 30.07.2011 DECLARING TOTAL INCOME TO THE TUNE OF RS.10,98,927/- FOR A.Y.2011-12. THE RETURN OF INCOM E WAS PROCESSED U/S.143(1) OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT) ON 18.03.2014. THE RETURN WAS SELECTED FOR SCRUTINY UN DER CASS AND ACCORDINGLY NOTICE U/S.143(2) OF THE ACT WAS ISSUED BY THE ACIT, CIRCLE, THANE ON 13.09.2012 WHICH WAS SERVED UPON T HE ASSESSEE ON 20.01.2012. THEREAFTER THE CASE WAS RECEIVED BY THE PRESENT ASSESSING OFFICER BY WAY OF TRANSFER. SUBSEQUENTLY NOTICE U/S . 143(2) AND 142(1) OF THE ACT WERE ISSUED AND SERVED UPON THE ASSESSEE . THE ASSESSEE WAS A DIRECTOR IN M/S. PHARMACEUTICAL COATINGS PVT. LTD. (PCPL) AND ITA NO.562/M/2015 A.Y. 2011-12 3 RECEIVED THE SALARY FROM THE COMPANY. SHE WAS ALSO GETTING PENSION FROM THE NEW INDIA ASSURANCE CO. THE ASSESSEE WAS A LSO DERIVING RENTAL INCOME AS WELL AS INTEREST INCOME FROM BANKS , POST OFFICE AND SHARES. DURING THE COURSE OF SCRUTINY, IT WAS FOUND THAT THE ASSESSEE HAD RECEIVED AN AMOUNT OF RS.1.00 CRORES FROM M/S. COLORCON ASIA PVT. LTD. AS NON- COMPETE FEE DURING THE F.Y.2010-1 1. THE ASSESSEE DID NOT OFFER THE SAID AMOUNT FOR TAXATION. THEREFO RE AFTER THE ISSUANCE OF NOTICE, THE AO BROUGHT THE SAID AMOUNT TO TAX. FEELING AGGRIEVED THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) WHO DISMISSED THE APPEAL. THEREFORE, THE ASSESSEE HAS FILED THE PRESE NT APPEAL BEFORE US. ISSUE NO.1 TO 4:- 4. THESE ISSUES ARE INTER-CONNECTED THEREFORE ARE BEI NG TAKEN TOGETHER FOR ADJUDICATION. HOWEVER THE ABOVE SAID FOUR ISSUES WHICH HAVE BEEN RAISED BEFORE US, ARE IN CONNECTION WITH UPHOLDING THE ORDER OF THE AO BY THE CIT(A) VIDE WHICH THE AO TAX ED THE NON- COMPETE FEE TO THE TUNE OF RS.1.00 CRORES. THE LD. REPRESENTATIVE OF THE ASSESSEE WAS FAIR ENOUGH TO ADMIT THE FACT THAT THIS ISSUE HAS BEEN DECIDED AGAINST THE ASSESSEE IN ASSESSEES HUSBANDS CASE (HEMANT PRABHAKAR PRADHAN) (IN ITA NO. 6794/MUM/2014, DT.13 .07.2016 FOR AY 2011-12) HAVING SIMILAR FACTS AND CIRCUMSTANCES. THE LD. DEPARTMENTAL REPRESENTATIVE HAS STRONGLY PLACED REL IANCE ON THE ORDER PASSED BY THE CIT(A).MOREOVER ON PERUSAL OF THE ORD ER PASSED BY CIT(A)-2 IN QUESTION, WE NOTICE THAT THE CIT(A) HAS PLACED RELIANCE ITA NO.562/M/2015 A.Y. 2011-12 4 UPON THE DECISION OF ITAT MUMBAI BENCH IN THE CAS E OF AUNRAG TOSHNIWAL VS. DCIT IN (ITA NO.7032 & 7034 (MUM) OF 2012 , A.Y. 2010-11 DATED 16.01.2013 WHEREIN IT WAS SPECIFICALL Y HELD THAT NON- COMPETE FEE IS LIABLE TO BE TAXED UNDER BUSINESS IN COME U/S. 28(VA). CIT(A) HAS ALSO PLACED RELIANCE ON THE LAW SETTLED IN THE CASE OF GIFFIC CHEM PVT. LTD. VS. CIT (332 ITR 602)(2011). NO DIST INGUISHABLE MATERIAL HAS BEEN PLACED ON RECORD TO DEVIATE THE F INDING OF THE CIT(A) IN QUESTION. MOREOVER, THE CASE OF THE ASSES SEE HAS BEEN FULLY COVERED BY THE CASE OF HER HUSBAND (HEMANT PRABHAKA R PRADHAN) (IN ITA NO. 6794/MUM/2014, DT.13.07.2016 FOR AY 2011-12 ) (SUPRA). THEREFORE, IN VIEW OF THE ABOVE CIRCUMSTANCES, WE A RE OF THE VIEW THAT CIT(A) HAS DECIDED THE MATTER OF CONTROVERSY JUDIC IOUSLY AND CORRECTLY WHICH DOES NOT REQUIRE TO BE INTERFERED W ITH AT THIS APPELLATE STAGE. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS HEREBY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH SEPTEMBER,2016. 28 , 2016 SD/- SD/- (R.C.SHARMA) (AMARJIT SINGH) ! / ACCOUNTANT MEMBER # /JUDICIAL MEMBER $ % MUMBAI; &! DATED : 28 TH SEPTEMBER, 2016 JV, SR. PS ITA NO.562/M/2015 A.Y. 2011-12 5 ( )# !* +*& / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ' ( ) / THE CIT(A)- 4. ' / CIT 5. ()* ++,- , ,- , $ % / DR, ITAT, MUMBAI 6. *./ 0 / GUARD FILE. % / BY ORDER, ( + //TRUE COPY// , / ' /(DY./ASSTT. REGISTRAR) , $ % / ITAT, MUMBAI