AKBARALI A. PROBUNDERWALLA, MUMBAI V. ITO, WD. 1(1)(1), MUMBAI

ITA 5721/MUM/2010

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3552 (ITAT-MUMBAI)
• Duration Of Justice: 6 year(s) 1 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 14-10-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 14-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: DR K SHIVARAM; SHEETAL JADHAV SH
• Keywords: Sale consideration of property below Jantri Value; Salary income
• Section: 50C

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUM BAI . . , , !' #$, % , & BEFORE SHRI R.C.SHARMA, AM AND SHRI AMARJIT SINGH, JM / I.T.A. NO.5721/MUM/2010 ( %' ( / ASSESSMENT YEAR: 2006-07) AKBARALI A. PROBUNDERWALLA 203, MARINE CHAMBERS, NEW MARINE LINES, MUMBAI - 400020 ' / VS. INCOME TAX OFFICER 1(1)(1 ) 5 TH FLOOR, AAYKAR BHAVAN, M. K .ROAD, CHURCHGATE, MUMBAI - 400020 ./ ./ PAN/GIR NO. : AFUPP4745G ( / APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING: 12.05.2016 !' /DATE OF PRONOUNCEMENT: 25.08.2016 #$ / O R D E R PER AMARJIT SINGH, JM: THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST T HE ORDER DATED 12.03.2010 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) 1, MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] R ELEVANT TO THE A.Y.2006-07. ASSESSEE BY: DR. K. SHIVARAM AND MS. SHEETAL JADHAV DEPARTMENT BY: SHRI R. P. RASTOGI ITA NO.5721/M/2010 A.Y. 2006-07 2 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- 1.A. THE LEARNED CIT(A) ERRED ON FACTS AND IN LAW IN CONFIRMING THE TAXING OF THE APPELLANT ON THE SALE OF DEVELOPM ENT RIGHTS TO M/S.LANDLINE BUILDERS BY M/S. SHARP CONSTRUCTION CO. WHICH AMOUNTS TO DOUBLE TAXATION. B. THE LEARNED CIT(A) ERRED ON FACTS AND IN LAW IN CONFIRMING THE APPLICATION OF SECTION 50C OF THE INCOME TAX AC T, WHEN THE APPELLANT HAD NOT RECEIVED ANY CONSIDERATION NO R WERE THE DEVELOPMENT RIGHTS SOLD BY HIM. C. THE LEARNED CIT(A) ERRED ON FACTS AND IN LAW IN STATING THAT THE DEVELOPMENT RIGHTS OF THE LAND IN QUESTION WERE TRANSFERRED BY THE APPELLANT. D. THE LEARNED CIT(A) ERRED ON FACTS AND IN LAW IN NOT ACCEPTING THE FACT THAT M/S. SHARP CONSTRUCTION CO. HAS PAID TAX ON THE SALE OF DEVELOPMENT RIGHTS OF THE SAME P LOT IN QUESTION. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E FILED HIS RETURN OF INCOME ON 23.03.2007 DECLARING TOTAL INCOME TO T HE TUNE OF RS.84,090/- THE RETURN WAS PROCESSED U/S.143(1) OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT) ON 22.08.2007. SUB SEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE U/S.143(2) DAT ED 29.10.2007 WAS ISSUED AND SERVED UPON THE ASSESSEE. NOTICE U/S. 1 42(1) OF THE ACT WAS ALSO ISSUED ON 23.06.2008 AND SERVED UPON THE A SSESSEE ON 24.06.2008. THE ASSESSEE WAS AN INDIVIDUAL HAVING SALARY INCOME, INCOME FROM HOUSE PROPERTY AND CAPITAL GAIN AND PAR TNER IN THE M/S. SHARP CONSTRUCTION CO. THE ASSESSEE WAS ALSO A DIR ECTOR WITH M/S. A.K.PORBUNDERWALA BUILDERS PVT. LTD. DURING THE PR EVIOUS YEAR ITA NO.5721/M/2010 A.Y. 2006-07 3 RELEVANT TO THE A.Y.2006-07, DEVELOPMENT DEED WAS R EGISTERED WITH M/S.LANDLINE DEVELOPERS ON 23 RD DAY OF AUGUST, 2005 FOR A CONSIDERATION OF RS.15,00,000/-, IN WHICH THE ASSES SEE WAS STATED TO BE THE OWNER. ON SEEING THE RETURN OF INCOME OF THE A SSESSEE, IT WAS OBSERVED THAT THERE WAS NO INCOME AND GAIN ON THIS TRANSACTIONS. THEREFORE THE NOTICE WAS ISSUED AND AFTER RECEIPT O F THE REPLY VALUE OF THE SALE OF LAND TO THE TUNE OF RS.54,37,010/- WAS ADDED TO THE INCOME OF THE ASSESSEE AS CAPITAL GAIN U/S.45 R.W.S 50C OF THE ACT. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE ASSESSEE INTRODUCED THE LAND IN THE NAME OF M/S.SHARP CONSTRUCTIONS CO. IN 1986-87 OR 1994-95 FOR ONLY RS.73,800/- JUST TO EVADE THE TAX. THE SAID LAND WAS NOT REFLECTED IN THE CLOSING STOCK. THE PROFIT WAS NOT OFFERED TO TAX OF RS.15,00,000/-. THE LAND WAS WITH THE NAME OF SHRI AKBARALI A. PORBANDWALA. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE INTENTION OF THE ASSESSEE WAS TO EVADE THE TAX BY T RANSFERRING THE LAND TO PARTNERSHIP FIRM, THEREFORE THE ASSESSING OFFICE R INVOKED THE PROVISION U/S.50C OF THE ACT AND ACCORDINGLY ASSESS ED THE INCOME OF THE ASSESSEE AND TAXED. THE CIT(A) WAS ALSO OF THE SAME VIEW. 4. WE HAVE HEARD THE ARGUMENT ADVANCED BY THE LEARN ED REPRESENTATIVE OF THE PARTIES AND PERUSED THE RECOR D. THE BONE CONTENTION OF THE ASSESSEE IS THAT THE INCOME FROM THE LAND IS NOT LIABLE TO BE TAXED TWICE. THE ASSESSEE HAS SHOWN THE LAND WITH M/S.SHARP CONSTRUCTIONS CO. WHEREIN THE INCOME FROM THE LAND WAS ASSESSED BY ITA NO.5721/M/2010 A.Y. 2006-07 4 THE ASSESSING OFFICER BY VIRTUE OF ORDER DATED 26.1 2.2008 FOR THE A.Y.2006-07. THE SAID ORDER WAS ALSO CHALLENGED BE FORE THE CIT(A) WHO CONFIRMED THE ORDER OF ASSESSING OFFICER BY VIR TUE OF ORDER DATED 05.01.2010. SUBSEQUENTLY, THE MATTER WENT UP BEFOR E THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI WHO ALSO DECIDED THE CAS E IN ITA NO.2663/MUM/2010 FOR A.Y.2006-07. THE SAID ORDER P ERUSED WHICH CLEARLY SPEAKS ABOUT THE ASSESSMENT OF THE INCOME W ITH REGARD TO THE LAND BELONGING TO THE M/S. SHARP CONSTRUCTIONS CO. IN QUESTION. THE ASSESSING OFFICER HAS ALSO ASSESSED THE INCOME UPON THE SAID LAND ON ACCOUNT OF ALIENATION BY THE AKBARALI A. PROBUNDERW ALLA TO M/S. LANDLINE BUILDERS PVT. LTD. BY VIRTUE OF DEVELOPME NT DEED REGISTERED ON 23.08.2005 FOR A CONSIDERATION OF RS.15,00,000/- AGAIN BY TREATING THE LAND BELONGING TO AKBARALI A. PROBUNDERWALLA IN DIVIDUALLY. NOW IT IS NOT IN DISPUTE THAT THE LAND HAS BEEN ASSESSE D TWICE ONE ON THE PART OF M/S. SHARP CONSTRUCTION CO. WHICH IS THE PA RTNERSHIP FIRM AND THE OTHER ON BEHALF OF THE INDIVIDUAL AKBARALI A. P ROBUNDERWALLA. THE LAND WAS USED FOR THE PURPOSE OF THE FIRM. THE SAI D CONSIDERATION TO THE TUNE OF RS.15,00,000/- WAS ASSESSED TWICE ONE O N THE PART OF THE M/S. SHARP CONSTRUCTION CO. AND AKBARALI A. PROBUND ERWALLA INDIVIDUALLY. IT IS THE CASE OF DOUBLE TAXATION B ECAUSE THE ALIENATION OF THE LAND HAS BEEN ASSESSED TWO TIMES WHICH DOES NOT SEEM JUSTIFIABLE. ACCORDINGLY, THESE ISSUES ARE DECIDED IN FAVOUR OF THE ASSESSEE AGAINST THE REVENUE AND SET ASIDE THE FIND ING OF THE CIT(A) ON THE ABOVE SAID ISSUES. ITA NO.5721/M/2010 A.Y. 2006-07 5 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS HEREBY ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH AUGUST , 2016. SD/- (R.C.SHARMA) (AMARJIT SINGH) # / ACCOUNTANT MEMBER %& # /JUDICIAL MEMBER ' ( MUMBAI; )# DATED : 25 TH AUGUST, 2016 MP MP MP MP * +%'#, -,(' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. * ( ) / THE CIT(A)- 4. * / CIT 5. -./ &&01 , 01' , ' ( / DR, ITAT, MUMBAI 6. /34 5 / GUARD FILE. ' / BY ORDER, - & //TRUE COPY// ./$ ! /(DY./ASSTT. REGISTRAR) , ' ( / ITAT, MUMBAI