VINAY TOSHNIWAL HUF, MUMBAI V. DCIT, CIRCLE- 1(3)(2), MUMBAI

ITA 5885/MUM/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 3181 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2016-2017
• Appeal Filed On: 13-09-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Capital asset; Cost of acquisition; Onus to prove; Capital Gains
• Section: 68; 54; 54F; 142(1); 133(6); 13; 22; 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH F, MUMBAI BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER & SHRI S.R. RAHMAN, ACCOUNTANT MEMBER ITA NO. 5885/MUM/2019(AY: 2016-17) M/S VINAY TOSHNIWAL HUF 6 TH FLOOR, LALIT KUNJ, 70, POCHKHANAWALA ROAD, WORLI MUMBAI PAN : AABHV9019B VS DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-1(3)(2), MUMBAI APPELLANT RESPONDEDNT APPELLANT BY SHRI VIJAY MEHTA FCA/AR RESPONDENT BY SHRI SUSHILKUMAR PODDAR CIT-DR DATE OF HEARING 10-01-2020 DATE OF PRONOUNCEMENT 26-02-2020 O R D E R PER PAWAN SINGH, JM : 1. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF LEARNED CIT(A)-3, MUMBAI DATED 09-08-2019 FOR THE ASSESSMEN T YEAR 2016- 17. THE ASSESSEE HAS RAISED THE FOLLOWING MODIFIED GROUNDS OF APPEAL:- GROUND NO. 1: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, HONBLE CIT(A) GROSSLY ERRED IN TAXING A SUM OF RS.22,50,00,000 B EING PROCEEDS ON SALE OF TENANCY RIGHTS, U/S 68 OF THE INCOME TAX ACT, 1961 ('THE ACT') AS CASH CREDIT. THE APPELLANT PRAYS THAT THE SAID ACTION OF THE HON'BLE CIT(A) MAY KINDLY BE DELETED. GROUND IMO.2: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE HON'BLE CIT(A) GROSSLY ERRED IN CONFIRMING THE ACTION OF A.O. OF N OT ALLOWING EXEMPTION U/S 54F OF THE ACT. THE APPELLANT PRAYS THAT THE SA ID ACTION OF THE HON'BLE CIT(A) MAY KINDLY BE DELETED. 2 ITA 5885/MUM/2019 VINAY TOSHNIWAL HUF 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A HINDU UNDIVIDED FAMILY(HUF), FILED ITS RETURN OF INCOME ON 29-07-20 16 DECLARING TOTAL INCOME AT RS.14,43,020/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR LIMITED SCRUTINY UNDER COMPUTER AIDED SCRUTINY SELE CTION (CASS) FOR EXAMINING THE ISSUES, (I) WHETHER INVESTMENT AND IN COME IN RELATION TO PROPERTIES ARE DULY DISCLOSED; AND (II) WHETHER DED UCTION FROM CAPITAL GAINS HAS BEEN CLAIMED CORRECTLY. DURING THE ASSES SMENT THE ASSESSEE WAS SERVED VARIOUS NOTICES THROUGH ITBA-PORTAL. THE ASSESSEE FILED RESPONSE TO THE SAID NOTICES BY FILING REPLY ON THE PORTAL AND UPLOADED THE REQUIRED DOCUMENTS IN SUPPORT OF ITS CLAIM. IN THE COMPUTATION OF INCOME THE ASSESSEE CLAIMED LONG TERM CAPITAL GAIN (LTCG) OF RS. 22.50 CRORE ON TRANSFER OF TENANCY RIGHTS IN A RIGH T IN A FLAT ON SECOND FLOOR CHAMPAGENE HOUSE, WORLI SEA FACE MUMBAI. THE ASSESSEE ALSO CLAIMED DEDUCTION OF LTCG UNDER SECTION 54 AS CAPIT AL GAIN WAS INVESTED IN PURCHASE OF NEW RESIDENTIAL HOUSE. THE ASSESSING OFFICER VIDE SHOW-CAUSE NOTICE DATED 16.10.2018 ASKED THE A SSESSEE TO FURNISH THE DETAILS OF CAPITAL ASSET WITH THE DOCUMENTARY E VIDENCES. THE ASSESSEE FILED ITS REPLY AND FURNISHED THE COPY OF AGREEMENT DATED 29.05.2015 WITH REGARD TO TRANSFER OF TENANCY RIGHT IN A FLAT ON SECOND FLOOR CHAMPAGENE HOUSE, WORLI SEA FACE MUMBAI, TO M /S PINE TREE 3 ITA 5885/MUM/2019 VINAY TOSHNIWAL HUF ESTATE PVT LTD. THE ASSESSING OFFICER AGAIN VIDE NO TICE DATED 24.11.2018 UNDER SECTION 142(1) ASKED THE ASSESSEE TO FURNISH THE EVIDENCE OF ACQUISITION OF TENANCY RIGHT IN THE SAI D FLAT. THE ASSESSING OFFICER RECORDED THAT THE ASSESSEE FILED REPLY DATE D 01.12.2018, BUT NO DOCUMENTARY EVIDENCE RELATED TO THE ACQUISITION OF THE SAID FLAT WAS FURNISHED BY THE ASSESSEE. 3. THE ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 1 33(6) DATED 07.12.2016 TO THE SECRETARY OF CHAMPAGENE HOUSE, WO RLI SEA FACE MUMBAI, TO FURNISH THE DETAILS OF OWNERSHIP OF THE PROPERTY, OCCUPANTS OF THE PROPERTY IN LAST TEN YEARS, IF THE SAID FLAT WAS OCCUPIED BY THE OWNER OR THIRD PARTY OR WAS GIVEN ON LEASE OR RENT AND TO FURNISH THE COPY OF THE LEASE/ TENANCY. THE ASSESSING OFFICER R ECORDED THAT THE SECRETARY OF CHAMPAGENE HOUSE, WORLI SEA FACE MUMBA I, WITH HIS REPLY DATED 26.12.2016 FURNISHED THE COPY OF AGREEM ENT TO SALE DATED 29.05.2015 AND THAT NO EVIDENCE OF ACQUISITION OF T ENANCY (ASSET) WAS FURNISHED BY HIM. 4. THE ASSESSING OFFICER ALSO ISSUED NOTICE UNDER SEC TION 133(6) DATED 07.12.2016 TO THE M/S PINE TREE ESTATE PVT LTD REQU IRING THEM TO FURNISH THE DETAILS AND NATURE OF TRANSACTION IN AY 2016-17, COPY OF INCOME TAX RETURN OF AY 2010-11 TO 2016-17, BANK ST ATEMENT FROM 4 ITA 5885/MUM/2019 VINAY TOSHNIWAL HUF 01.04.2009 TO 31.03.2016 AND SOURCE OF INVESTMENT F OR PURCHASE OF TENANCY RIGHT FROM M/S VINAY TOSHNIWAL (HUF). THE A SSESSING OFFICER RECORDED THAT M/S PINE TREE ESTATE PVT LTD VIDE IT S REPLY DATED 17.12.2106 FURNISHED ONLY ITS RETURN OF INCOME FOR AY 2016-17, WHEREIN THEY HAVE OFFERED NIL INCOME. THE ASSESSIN G OFFICER FURTHER ISSUED NOTICE TO THE ASSESSEE AS TO WHY THE CLAIM U NDER SECTION 54 SHOULD NOT BE DISALLOWED. THE ASSESSING OFFICER NOT ED THAT THE ASSESSEE AGAIN NOT FURNISHED ANY DOCUMENTARY EVIDENCES ABOUT THE ACQUISITION OF TENANCY RIGHT IN THE PROPERTY. 5. THE ASSESSING OFFICER ON HIS AFORESAID OBSERVATION CONCLUDED THAT THE ASSESSEE FAILED TO PROVE THE GENUINENESS OF SALE OF TENANCY RIGHT OF RS. 22.50 CRORE, HENCE, THE TRANSACTION REMAINED UNEXPL AINED, THUS, THE SAID RECEIPT OF RS. 22.50 CRORE WAS TREATED AS UNEX PLAINED CASH CREDIT UNDER SECTION 68. RESULTANTLY, THE EXEMPTION UNDER SECTION 54 WAS ALSO DENIED. 6. ON APPEAL BEFORE LD. CIT(A), THE ASSESSEE URGED THA T IN REPLY TO THE NOTICES ISSUED BY THE ASSESSING OFFICER ALL DOCUMEN TARY EVIDENCES WITH REGARD TO ACQUISITION OF TENANCY WERE FILED ELECTRO NICALLY (UPLOADED ON PORTAL). THE ASSESSEE ALSO HANDED OVER ALL THE DOCU MENTS PHYSICALLY TO THE ASSESSING OFFICER. THE NAME OF ASSESSEE IS MENT ION ON RENT RECEIPT 5 ITA 5885/MUM/2019 VINAY TOSHNIWAL HUF OR LAST 15 YEARS. THERE WAS NO DOUBT CAST OVER THE TENANCY RIGHTS. THE SALE WAS CONFIRMED BY THE BUYER IN RESPONSE TO THE NOTICE UNDER SECTION 133(6). THE IDENTITY AND GENUINENESS OF BUYER, WHO PAID THE MONEY IS NOT DOUBTED. THE CREDIT IN THE BOOKS OF THE ASSESSE E IS FULLY EXPLAINED AND THE ADDITION UNDER SECTION 68 IS BAD IN LAW. TH E LACK OF INCOME OF THE PURCHASER CANNOT BE GROUND TO PROVE HIS CREDITW ORTHY. THE LD CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASS ESSEE PASSED THE FOLLOWING ORDER; DURING THE COURSE OF APPELLATE PROCEEDINGS ALSO, T HE APPELLANT COULD NOT SUBSTANTIATE AND FURNISHED ANY NEW DOCUMENTARY EVID ENCE RELATED TO ACQUISITION OF HIS TENANCY RIGHTS. THE AO HAS CATEG ORICALLY MENTIONED IN PARA 4.1.2 OF THE ASSESSMENT ORDER THAT APPELLANT H AS PROVIDED MULTIPLE OPPORTUNITY AND STATED THAT BURDEN OF PROOF IS ON THE ASSESSEE TO EXPLAIN SATISFACTORILY WITH REGARD TO THE TRANSACTION SHOWN IN THE RETURN OF INCOME ALONG WITH DOCUMENTARY EVIDENCES DESPITE PROVIDING SUFFICIENT OPPORTUNITY TO PROVE THE GENUINENESS OF TRANSACTION , APPELLANT FAILED. IN VIEW OF THE ABOVE OBSERVATION, I FIND NO REASON TO INTERFERE IN THE ORDER OF AO. ACCORDINGLY, THE ADDITION OF RS. 22,50,00,000/- AS UNEXPLAINED CASH CREDIT MADE UNDER SECTION 68 BY THE AO IS UPHELD. G ROUND NO. 1 IS DISMISSED . 7. FURTHER, AGGRIEVED BY THE ORDER OF LD.CIT (A), THE ASSESSEE HAS FILED THE PRESENT APPEAL. 8. WE HAVE HEARD THE SUBMISSIONS OF LEARNED AUTHORISED REPRESENTATIVE (LD. AR) OF THE ASSESSEE AND THE LEARNED DEPARTMENT AL REPRESENTATIVE 6 ITA 5885/MUM/2019 VINAY TOSHNIWAL HUF (LD. DR) FOR THE REVENUE AND PERUSED THE MATERIAL A VAILABLE ON RECORD. GROUND NO.1 RELATES TO TAXING THE SALE CONSIDERATIO N OF TENANCY RIGHT AS UNEXPLAINED CASH CREDIT. THE LEARNED AR OF THE ASSE SSEE SUBMITS THAT ASSESSEE ENTERED INTO AGREEMENT DATED 29 TH MAY 2015 FOR SALE OF TENANCY RIGHT OF A FLAT SITUATED ON THE 2 ND FLOOR OF CHAMPAGNE HOUSE, EARLIER KNOWN AS SHAKUNTALA BUILDING, 69 WORLI, MUM BAI. THE TENANCY RIGHTS WERE SOLD TO PINE TREE ESTATE PRIVATE LIMITE D FOR A CONSIDERATION OF 22.50 CRORE. THE ASSESSEE OFFERED CAPITAL GAIN IN ITS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION. THE CAPITA L GAIN WAS CALCULATED WITHOUT CLAIMING ANY COST OF ACQUISITION AS COST OF ACQUISITION OF TENANCY RIGHT WAS NIL. THE ASSESSEE CLAIMED DEDUCTION UNDER SECTION 54F IN RESPECT OF COST OF PROPERTY PU RCHASED SUBSEQUENTLY. DURING THE ASSESSMENT THE ASSESSEE WA S SERVED NOTICES THROUGH ITBA-PORTAL. IN RESPONSE TO THE STATUTORY N OTICES, THE ASSESSEE FURNISHED ITS REPLY FROM TIME TO TIME AND UPLOADED THE REQUIRED DOCUMENTS ON THE PORTAL OF THE DEPARTMENT. ENTIRE P ROCEEDINGS WERE CONDUCTED ELECTRONICALLY. DURING THE COURSE OF ASSE SSMENT AND NOTICE UNDER SECTION 142(1) DATED 16 TH OCTOBER 2018 WAS ISSUED TO THE ASSESSEE REQUIRING HIM TO FURNISH DOCUMENTARY EVIDE NCE IN RELATION TO THE ACQUISITION OF CAPITAL ASSET AND SOLD DURING TH E YEAR. IN RESPONSE TO 7 ITA 5885/MUM/2019 VINAY TOSHNIWAL HUF THE NOTICE, THE ASSESSEE FURNISHED ALL REQUIRED DET AILS RELATING TO TRANSFER OF CAPITAL ASSET ALONG WITH THE DOCUMENTARY EVIDENC ES INCLUDING DEED OF TRANSFER OF TENANCY TO THE ASSESSING OFFICER. TH E ASSESSING OFFICER AGAIN VIDE NOTICE DATED 24 TH NOVEMBER 2018 REQUIRED THE ASSESSEE TO FURNISH DOCUMENTARY EVIDENCES WITH RESPECT TO ACQUI SITION OF TENANCY RIGHTS. THE ASSESSEE FURNISHED THE MEMORANDUM OF PA RTITION DATED 31.03.1984 ALONG WITH THE OTHER DOCUMENTS EVIDENCIN G THE ACQUISITION OF TENANCY RIGHT. HOWEVER, THE ASSESSING OFFICER IN HIS ORDER RECORDED THAT THE ASSESSEE HAS FAILED TO FURNISH ANY DOCUMEN TARY EVIDENCE WITH RESPECT TO ACQUISITION OF TENANCY RIGHT IN THE PROP ERTY. SECONDLY, ASSESSING OFFICER HAS OBSERVED THAT A NOTICE UNDER SECTION 133(6) DATED 07.12.2016 WAS SERVED ON THE SECRETARY OF THE BUILD ING, AND IN RESPONSE TO WHICH ONLY AN AGREEMENT TO SALE OF TENA NCY WAS FURNISHED AND NOT THE TENANCY AGREEMENT. SIMILARLY, NOTICE UN DER SECTION 133(6) DATED 07.12.2016 WAS ALSO SERVED UPON THE BUYER NAM ELY PINE TREE ESTATE PRIVATE LTD, REQUIRING THEM TO SUBMIT THE D ETAIL OF TRANSACTION AS WELL AS INCOME TAX RETURN AND THE BANK STATEMENT . IN RESPONSE TO THE SAME, THE BUYER SUBMITTED COPY OF THEIR RETURN OF I NCOME. ACCORDING TO THE ASSESSING OFFICER, THE INCOME SHOWN BY SAID PAR TY IS NIL FOR ASSESSMENT YEAR 2016-17 AND, THE CREDITWORTHINESS O F THE BUYER OF THE 8 ITA 5885/MUM/2019 VINAY TOSHNIWAL HUF CAPITAL ASSET IS NOT PROVED. THE LD AR FOR THE ASSE SSEE FURTHER SUBMITS THAT THE ASSESSING OFFICER WRONGLY CONCLUDED THAT S OURCE OF SALE OF CONSIDERATION IS NOT ESTABLISHED AND TREATED THE EN TIRE SALE CONSIDERATION AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 OF THE ACT. NO FURTHER INVESTIGATION WAS CONDUCTED BY ASSESSING OFFICER AG AINST THE PURCHASER FOR DOUBTING HIS CREDIBILITY. 9. BEFORE THE LEARNED CIT(A) THE ASSESSEE AGAIN FURNIS HED COMPLETE DOCUMENTARY EVIDENCES WHICH WERE FURNISHED BEFORE T HE ASSESSING OFFICER. THE ASSESSEE SPECIFICALLY CONTENDED THAT A SSESSING OFFICER HAS WRONGLY RECORDED THAT THE DOCUMENTS ESTABLISHING TH E ACQUISITION OF PROPERTY HAS NOT BEEN FURNISHED. THE LEARNED CIT(A) HOWEVER, DISMISSED THE APPEAL OF ASSESSEE BY MERELY REITERAT ING THE SAME CONTENTS AS MADE BY THE ASSESSING OFFICER. THE LEAR NED CIT(A) CONFIRMING THE ACTION OF ASSESSING OFFICER RECORDED THAT NO DOCUMENTARY EVIDENCE WAS FURNISHED BY THE ASSESSEE. THE LEARNED CIT(A) HAS NOT GIVEN ANY FINDING ON THE DOCUMENTS F URNISHED BEFORE HIM, WHICH HAS BEEN DULY RECORDED IN PARA 4 OF THE IMPUGNED ORDER. THE ASSESSEE DURING THE ASSESSMENT AS WELL AS DURIN G FIRST APPELLATE STAGE FURNISHED COMPLETE DETAILS WITH REGARD TO ACQ UISITION OF TENANCY, PARTITION OF TENANCY RIGHT AS A RESULT OF PARTITION OF BD TOSHNIWAL HUF 9 ITA 5885/MUM/2019 VINAY TOSHNIWAL HUF ON 31 ST MARCH 1984. THE LEARNED AR OF THE ASSESSEE ALSO IN VITED OUR ATTENTION ON SCHEDULE-G OF MEMORANDUM OF PARTITION DATED 1ST APRIL 1984. THE COPY OF SAID PARTITION DEED IS ALSO PLACE D ON RECORD. 10. IT WAS EXPLAINED BY LEARNED AR OF THE ASSESSEE THAT MRS RADHIBAI MUNSUKHANI AND MAHON L MUNSUKHANI WERE ORIGINAL OWN ER OF BUILDING. A FLAT ON 2 ND FLOOR OF BUILDING WAS TAKEN ON RENT BY BD TOSHNIWAL HUF SOMEWHERE IN 1970. AS A RESULT OF COM PLETE PARTITION OF BD TOSHNIWAL HUF ON 31 ST MARCH 1984, THE TENANCY RIGHT IN THE ABOVE FLAT ON SECOND FLOOR ALONG WITH ONE GARAGE ON GROUND FLOOR WAS GIVEN TO THE ASSESSEE AS A COPARCENER FOR HIMSELF A ND HIS FAMILY. MRS RADHIBAI MANSUKHANI AND MR MOHAN L. MANSUKHANI EXEC UTED A IRREVOCABLE POWER OF ATTORNEY IN FAVOUR OF VAMAN B SARDESAI AND GANPAT V CHOUGULE ON 15 TH AUGUST 1984 FOR ASSIGNING AND TRANSFERRING THE SHAKUNTALA PROPERTY TO VIKRANT SHAM CHOUGULE PRIVATE TRUST THROUGH ITS TRUSTEE VAMAN B SARDESAI. CONSENT TERM WAS ACCEPTED BY BOMBAY HIGH COURT AND THE DECREE WAS PASSED ON 23 RD DECEMBER 1984. 11. THE LEARNED AR FOR ASSESSEE FURTHER EXPLAINED THAT APART FROM THE DOCUMENTARY EVIDENCES FURNISHED BEFORE THE LOWER AU THORITIES THE ASSESSEE DEMONSTRATED THAT HOLDING PERIOD OF TENANC Y RIGHT BY ASSESSEE 10 ITA 5885/MUM/2019 VINAY TOSHNIWAL HUF WERE SUBMITTED BEFORE THE ASSESSING OFFICER AS WELL AS LD CIT(A). IT WAS EXPLAINED DEED OF TRANSFER OF TENANCY RIGHT DAT ED 29 TH MAY 2015 EVIDENCING RIGHT FROM ASSESSEE TO THE BUYER. THE LE TTER WRITTEN BY BD TOSHNIWAL HUF & VINAY TOSHNIWAL HUF INTIMATING CHAN GE OF OWNERSHIP OF TENANCY TO THE LANDLORD OF THE PROPERT Y. THE ASSESSEE ALSO FURNISHED THE COPY OF LETTER WRITTEN BY LANDLORD TO ALL TENANTS INCLUDING A CHANGE IN THE OWNERSHIP OF PROPERTY FROM RADHBAI & MOHAN MANSUKHLAL, THE COPY OF THOSE LETTERS ARE PLACED ON RECORD. THE LD AR ALSO INVITED OUR ATTENTION ON THE RENT RECEIPTS PLA CED ON RECORD FROM OCTOBER 2001 TO MAY 2015 DURING THE TENANCY PERIOD FOR THE RENT PAID TO THE LANDLORD. 12. THE LEARNED AR OF THE ASSESSEE FURTHER SUBMITS THAT FROM THE CHAIN OF DOCUMENT FURNISHED BY ASSESSEE IT WAS PROVED BEYOND DOUBT THAT THE TENANCY RIGHT WAS ACQUIRED BY BD TOSHNIWAL HUF IN T HE YEAR 1970 AND CONTINUE TO BE IN POSSESSION TILL 1984. THE TEN ANCY RIGHT WERE TRANSFERRED TO THE ASSESSEE ON PARTITION OF BD TOSH NIWAL HUF IN 1984. KARTA OF THE ASSESSEE WAS RESIDING IN THE TENANTED PROPERTY ALONG WITH FAMILY. THE TENANCY IN THE PROPERTY WAS SOLD TO BUY ER ON 29 TH MAY 2015. 11 ITA 5885/MUM/2019 VINAY TOSHNIWAL HUF 13. ON THE OBJECTION OF ASSESSING OFFICER THAT BUYER HA S NO CREDITWORTHINESS TO ENTER INTO THE SAID TRANSACTION. THE LEARNED AR FOR THE ASSESSEE SUBMITS THAT IN THE DEED OF TRANSFER OF TENANCY RIG HT, ALL DETAILS OF BUYER ALONG WITH ADDRESS AND PERMANENT ACCOUNT NUMBER (PA N) ARE MENTIONED. THE ASSESSING OFFICER ONLY DOUBTED THE C APACITY OF THE BUYER BUT HAS NOT PROVED ANYTHING WITH REGARD TO TH E SAME EXCEPT OBSERVING THAT ON PERUSAL OF RETURN OF INCOME OR PINE TREE ESTATE PRIVATE LIMITED, IT IS SEEN THAT COMPANY HAS OFFERE D NIL INCOME FOR AY 2016-17 . THE LD. AR SUBMITTED THAT BUYER IS NOT A RELATE D PARTY. 14. ON THE OBSERVATION OF ASSESSING OFFICER THAT SECRET ARY OF THE SOCIETY TO FURNISH THE PARTITION DEED CANNOT LEAD TO A CONCLUS ION THAT ASSESSEE HAS NOT ACQUIRED SUCH RIGHT. IN THE NOTICE UNDER SECTIO N 133(6), THE ASSESSING OFFICER MERELY ASK THE SECRETARY OF THE A SSESSEE TO FURNISH, LEASE DOCUMENTS, TENANCY DOCUMENT OF THE PROPERTY I N THE LAST 10 YEARS. NO ENQUIRY WITH REGARD TO THE AGREEMENT/PARTITION T OOK PLACE IN 1984 WAS ASKED. THE LEARNED AR OF THE ASSESSEE FINALLY S UBMITTED THAT DURING THE ASSESSMENT AS WELL AS BEFORE FIRST APPEL LATE AUTHORITY THE ASSESSEE FURNISHED ALL THE NECESSARY DOCUMENTARY EV IDENCES ABOUT ACQUISITION OF TENANCY RIGHT, THE LOWER AUTHORITIES HAS NOT COMMENTED ON A OVERWHELMING DOCUMENT FURNISHED BY ASSESSEE. 12 ITA 5885/MUM/2019 VINAY TOSHNIWAL HUF 15. IN SUPPORT OF HIS CONTENTION THE LD.AR OF THE ASS ESSEE ALSO FURNISHED THE FOLLOWING DOCUMENTS:- SCREEN SHOT OF THE E-FILING PORTAL SHOWING SUBMISSI ON OF DOCUMENTS ONLINE ON 29-11-2018, E-FILING ACKNOWLEDGEMENT FOR SUBMISSIONS MADE BEFOR E THE ASSESSING OFFICER ALONG WITH COVERING LETTER, NOTICE U/S 142(1) OF THE ACT, SCREEN SHOT OF THE E-FILING PORTAL SHOWING SUBMISSI ON OF DOCUMENTS ONLINE ON 01-12-2018, 10-12-2018 AND 11-1 2-2018, E-FILING ACKNOWLEDGEMENTS FOR SUBMISSIONS MADE BEFO RE THE ASSESSING OFFICER, MEMORANDUM OF PARTITION DATED 31.03.1984, DEED FOR TRANSFER OF TENANCY, DATED 29.05.2015, WORKING OF CAPITAL GAIN ON TRANSFER OF TENANCY AND WRITTEN SUBMISSIONS FILE BEFORE CIT(A) 16. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE SUPPO RTED THE ORDERS OF LOWER AUTHORITIES. THE LD. DR FURTHER SUBMITS THAT THE LOWER AUTHORITIES HAS GIVEN CATEGORICAL FINDING THAT THE ASSESSEE HAS NOT SUBSTANTIATED ITS CLAIM AND HAS NOT FURNISHED ANY DOCUMENTARY EVIDENC E ABOUT THE ACQUISITION OF ASSET. THEREFORE, THE MATTER MAY BE RESTORED TO THE FILE OF THE AO FOR ADJUDICATION OF GROUNDS OF APPEAL AFR ESH. 17. IN THE REJOINDER SUBMISSION, THE LD.AR OF THE ASSES SEE SUBMITS THAT ALL NECESSARY EVIDENCES WERE FURNISHED IN ACCORDANCE WI TH THE DIRECTION OF AO. THE RELEVANT DOCUMENTS AND EVIDENCES WERE UPLOA DED ON THE PORTAL OF AO. DESPITE INFORMING HIM THAT ALL NECES SARY EVIDENCES HAVE BEEN FURNISHED, THE AO HAS NOT TAKEN COGNIZANCE OF THE FACTS AND THE 13 ITA 5885/MUM/2019 VINAY TOSHNIWAL HUF DOCUMENTARY EVIDENCES. ALL DOCUMENTARY EVIDENCES A GAIN FURNISHED TO THE LD. CIT(A). THE LD. CIT(A) ALSO HAS NOT TAKEN ANY COGNIZANCE OF THE SAME; RATHER, CONCURRED WITH THE FINDING OF AO AND THE LD AR FOR THE ASSESSEE WOULD SUBMIT THAT THE ASSESSEE HAS PRO VED HIS CASE BEYOND DOUBT AND RESTORATION OF CASE TO THE FILE OF ASSESS ING OFFICER OR LD CIT(A), NO PURPOSE WOULD SERVE EXCEPT HARASSMENT OF THE ASSESSEE. 18. IN FURTHER COUNTER SUBMISSIONS THE LD. DR OF THE R EVENUE STRONGLY OBJECTED AND WOULD SUBMIT THAT HE MAY BE GIVEN OPPO RTUNITY TO CALL FOR THE RECORD OF AO AND OF LD.CIT(A) TO VERIFY THE FAC T WITH THE EVIDENCE WHICH IS CLAIMED BY THE ASSESSEE WERE ACTUALLY PLAC ED BEFORE THE LOWER AUTHORITIES OR NOT. 19. CONSIDERING THE SUBMISSIONS OF BOTH THE PARTIES, ON 02-01-2020, WE TREATED THE MATTER AS PART-HEARD AND HEARING OF THE APPEAL WAS FIXED FOR 10-01-2020 AND WE DIRECTED LD. CIT-DR TO CALL THE R ECORD OF ASSESSMENT AND FIRST APPELLATE AUTHORITY. ON 10-01- 2010, THE ASSESSING OFFICER BROUGHT THE RECORD OF ASSESSMENT AS WELL AS OF THE FIRST APPELLATE AUTHORITY ATTENDED THE HEARING WITH LD. CIT-DR. 20. WE HAVE PERUSED THE RECORD OF FIRST APPELLATE AUTHO RITY AND FIND THAT THE ASSESSEE HAD FURNISHED THE FOLLOWING DOCUMENTS, WHI CH ARE STILL AVAILABLE ON RECORD:- 14 ITA 5885/MUM/2019 VINAY TOSHNIWAL HUF SCREEN SHOT OF THE E-FILING PORTAL SHOWING SUBMISSI ON OF DOCUMENTS ONLINE ON 01-12-2018, 10-12-2018 AND 11-1 2-2018, E-FILING ACKNOWLEDGEMENTS FOR SUBMISSIONS MADE BEFO RE THE ASSESSING OFFICER, MEMORANDUM OF PARTITION DATE 31.03.1984, DEED FOR TRANSFER OF TENANCY DATED 29.05.2015, WORKING OF CAPITAL GAIN ON TRANSFER OF TENANCY AND COPY OF WRITTEN SUBMISSIONS FILE BEFORE CIT(A) 21. WE RAISED OUR SPECIFIC QUARRY TO THE ASSESSING OFFI CER, IF THE DOCUMENTARY EVIDENCES UPLOADED BY THE ASSESSEE WERE EXAMINED/ PERUSED BY HIM OR NOT. THE ASSESSING OFFICER SUBMIT TED THAT HE MAY BE ALLOWED OPPORTUNITY TO EXAMINE ALL THE EVIDENCES AF RESH. HOWEVER, THE ASSESSING OFFICER NOT DISPUTED THE CONTENTION OF TH E ASSESSEE ABOUT UPLOADING OF VARIOUS INFORMATION AND DOCUMENTARY EV IDENCES ON THE WEB-PORTAL. THE LD. AR FOR THE ASSESSEE ALONG WITH INSTRUCTING CHARTERED ACCOUNTANT (CA) TEAM HAS BROUGHT THEIR CO MPUTER SYSTEM, AND EXPLAINED BEFORE US THAT THE WEB-PORTAL SHOWS T HE DATE OF UPLOADING THE REPLY AND THE VARIOUS DOCUMENTS, SIZE OF DOCUMENTS AND VALUE OF ATTACHMENT (DESCRIPTION OF DOCUMENTS) AND TIME OF SESSION. IT WAS EXPLAINED THAT ON OPENING THE SYSTEM AND BY LOG IN, WE CAN ASCERTAIN AS TO WHEN THE PORTAL WAS USED BY THE ASS ESSEE (OR HIS AGENT) AND THE DETAILS OF LOGIN AND UPLOADING OF REPLY CAN NOT BE MANIPULATED BY THE ASSESSEE. ALL THESE FACTS WERE NOT DISPUTE D EITHER BY AO OR BY LD CIT-DR. 15 ITA 5885/MUM/2019 VINAY TOSHNIWAL HUF 22. IN VIEW OF THE AFORESAID OBSERVATION, WE AGAIN DIRE CTED BOTH THE LEARNED REPRESENTATIVE OF THE PARTIES TO RE-CAPITUL ATE THEIR SUBMISSIONS AGAIN, ON THE ISSUES RAISED IN THE PRESENT APPEAL. THE LD.AR OF THE ASSESSEE RE-AFFIRMED THE SUBMISSIONS MADE EARLIER. THE LD.AR FURTHER SUBMITS THAT THE LOWER AUTHORITIES, DESPITE FURNISH ING ALL THE EVIDENCES HAVE TAKEN A VIEW THAT NO DOCUMENTARY EVIDENCE TO S UBSTANTIATE THE CLAIM WAS FURNISHED BEFORE THEM. THE AO HAS NOT MA DE ANY INVESTIGATION FROM THE CREDITOR / BUILDER, WHO HAVE PAID A SUM OF RS.22.50 CRORES WHICH WAS CLAIMED BY ASSESSEE AS A CAPITAL GAIN. THE ADDITION MADE BY AO AND CONFIRMED BY LD. CIT(A) HAS NO LEG TO STAND. THE LD CIT(A) HAS CO-TERMINUS POWER TO EXAMI NE THE ISSUE/CLAIMS. THE LD CIT(A) AFFIRMED THE ACTION OF ASSESSING OFFICER, DESPITE THE FACT THAT ALL EVIDENCES WITH REGARDS TO ACQUISITION OF TENANCY ITS HOLDING PERIOD AND TRANSFER WAS AVAILABLE BEFOR E HIM. THE LD.AR FOR ASSESSEE, THUS, STRONGLY OPPOSED FOR THE RESTOR ATION OF MATTER TO THE AO FOR CONSIDERING IT AFRESH. THE LD.AR WOULD SUBM IT THAT THERE WAS NO FAULT ON THE PART OF THE ASSESSEE, AND THEN THE ASSESSEE SHOULD NOT SUFFER UNNECESSARILY AND PRAYED THAT THE BENCH MAY DECIDE THE APPEAL ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. THE A SSESSEE HAS NOT FILED ANY NEW DOCUMENT BEFORE TRIBUNAL, WHICH MAY REQUIRE TO THE 16 ITA 5885/MUM/2019 VINAY TOSHNIWAL HUF CONSIDERED BY AO. IT WAS EXPLAINED THE SHORT QUESTI ON FOR CONSIDERATION BEFORE THE TRIBUNAL IS IF THE ASSESSE E HELD THE ASSET FOR MORE THAN THREE YEARS PRIOR ITS TRANSFER OR NOT. TH E ASSESSEE HAS UNEQUALLY PROVED THE HOLDING PERIOD OF ASSET FOR MO RE THAN COUPLE OF DECADES. 23. ON THE OTHER HAND, THE LD. DR AGAIN REITERATED HIS SUBMISSION MADE ON 05-12-2019 AND SUBMITTED THAT ONCE THERE IS A FINDI NG OF LOWER AUTHORITIES THAT NO EVIDENCE WAS FURNISHED BY ASSES SEE AND THAT THE AO HAS NOT EXAMINED THE EVIDENCE, THE MATTER REQUIRES FRESH CONSIDERATION BY AO. 24. WE HAVE CONSIDERED RIVAL SUBMISSIONS OF BOTH THE PA RTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THE COMPUTATI ON OF INCOME THE ASSESSEE CLAIMED LTCG ON SALE OF TENANCY RIGHT IN A FLAT. THE ASSESSEE ALSO CLAIMED DEDUCTION OF ENTIRE GAIN AS IT WAS INV ESTED IN PURCHASE OF NEW RESIDENTIAL HOUSE. THE CASE OF THE ASSESSEE WAS SELECTED FOR LIMITED SCRUTINY ON TWO ISSUES I.E. (I) WHETHER INVESTMENT AND INCOME RELATION TO PROPERTIES ARE DULY DISCLOSED AND (II) WHETHER D EDUCTION FROM CAPITAL GAIN HAS BEEN CLAIMED CORRECTLY. ON PERUSAL OF WOR KING OF LTCG THE AO NOTED THAT THE ASSESSEE CLAIMED CAPITAL GAIN OF RS. 22.50 CRORE IN THE PREVIOUS YEAR ON TRANSFER OF TENANCY RIGHT IN A FLAT IN WORLI, 17 ITA 5885/MUM/2019 VINAY TOSHNIWAL HUF MUMBAI. THE AO ISSUED SHOW CAUSE NOTICE TO THE ASSE SSEE TO FURNISH THE DETAILS OF CAPITAL ASSET SOLD WITH DOCUMENTARY EVIDENCE. IN RESPONSE TO THE SHOW CAUSE NOTICE THE ASSESSEE FURNISHED ITS REPLY DATED 10.09.2018. THE AO NOTED THAT THE ASSESSEE FURNISHE D COPY OF AGREEMENT DATED 29.05.2015 ABOUT TRANSFER OF TENANC Y SOLD TO PINE TREE ESTATE PVT LTD. THE AO VIDE NOTICE DATED 24.11.2018 AND 01.12.2018, AGAIN ASKED THE ASSESSEE TO FURNISH THE DOCUMENTARY EVIDENCES ABOUT THE ACQUISITION OF THE ASSET. THE AO IN PARA 4.5 & 4.7 OF THE ASSESSMENT ORDER RECORDED THAT ASSESSEE NOT FURNISHED ANY DOCU MENTARY EVIDENCES ABOUT THE ACQUISITION OF THE ASSET/ FLAT. THE AO IS SUED NOTICE UNDER SECTION 133(6) ON THE SECRETARY OF CHAMPAGENE HOUSE (SECRETARY OF RESIDENT SOCIETY) WORLI SEA FACE, MUMBAI AND TO REQ UIRE DETAIL OF OWNERSHIP OF PROPERTY, OCCUPANTS, IF THE FLATS WERE OCCUPIED BY OWNER OR BY THIRD PARTY AND DETAILS OF FLAT GIVEN ON LEAS E AND LEASE/TENANCY DOCUMENT FOR LAST 10 YEARS. THE AO RECORDED THAT IN RESPONSE TO NOTICE, THE SECRETARY OF CHAMPAGENE HOUSE FURNISHED ITS REP LY AND FILED THE COPY OF AGREEMENT DATED 29.05.2015. NO DOCUMENT OF TENANCY RIGHT IN FAVOUR OF ASSESSEE WAS FURNISHED. THE AO ISSUED NOT ICE UNDER SECTION 133(6) TO BUILDER/PINE TREE ESTATE PVT. LTD. TO FUR NISH COPY OF ITR FROM AY 2010-11 TO 2016-17, DETAILS OF TRANSACTION IN AY 2016-17, 18 ITA 5885/MUM/2019 VINAY TOSHNIWAL HUF BANK STATEMENT FROM THE PERIOD FROM 01.04.2009 TO 3 1.03.2016 AND SOURCE OF INVESTMENT IN PURCHASE OF TENANCY RIGHT. THE AO RECORDED THAT BUILDER/PINE TREE ESTATE PVT. LTD. FURNISHED C OPY OF RETURN OF INCOME FOR AY 2016-17 ONLY. AND THAT THE AO NOTED T HAT FOR AY 2016-17, THE BUILDER/PINE TREE ESTATE PVT. LTD. OFF ERED NIL INCOME. ON THE BASIS OF THE AFORESAID OBSERVATION, THE AO HELD THAT CREDITWORTHINESS OF BUYER WHO PURCHASED CAPITAL ASS ET I.E. TENANCY RIGHT FROM ASSESSEE IS NOT PROVED. THE AO FURTHER NOTED THAT DESPITE GIVING OPPORTUNITY THE ASSESSEE NOT FURNISHED DOCUM ENTARY EVIDENCE FOR ACQUISITION OF TENANCY RIGHT IN A FLAT SOLD TO M/S. PINE TREE ESTATE PVT. LTD. IN A.Y. 2016-17. THE AO HELD THAT ASSESSE E FAILED TO PROVE GENUINENESS OF SALE OF TENANCY RIGHT AND THAT TRANS ACTION REMAINED UNEXPLAINED AND AMOUNT OF RS. 22.50 CRORE WAS TREAT ED AS UNEXPLAINED CASH CREDIT. THE LD. CIT(A) AFFIRMED THE ACTION OF AO BY HOLDING THAT DURING THE APPELLATE STAGE, THE ASSESSEE COULD NOT SUBSTANTIATE AND FURNISH NEW DOCUMENTARY EVIDENCE RELATED TO ACQUISI TION OF TENANCY RIGHT. 25. THERE IS NO DISPUTE THAT TENANCY RIGHT IS A CAPITAL ASSET. THE LOWER AUTHORITY HAS NOT DISPUTED THAT NATURE OF CAPITAL A SSET. THE LOWER AUTHORITY DISPUTED ABOUT THE ACQUISITION OF THE TEN ANCY RIGHT BY TAKING 19 ITA 5885/MUM/2019 VINAY TOSHNIWAL HUF VIEW THAT ASSESSEE FAILED TO PROVE BY DOCUMENTARY E VIDENCE THAT ASSESSEE HAS GENUINE TRANSACTION. WE HAVE NOTED THA T BEFORE US THE ASSESSEE HAS FURNISHED COPY OF SCREENSHOT OF PORTAL OF DEPARTMENT (WEB-PORTAL) SHOWING THAT ASSESSEE UPLOADED DOCUMEN T ON 29.11.2018, 11.12.2018, 10.12.2018 & 01.12.2018. FURTHER, THE A SSESSEE HAS PLACED ON RECORD, THE SUBMISSION OF DOCUMENT IN RESPONSE T O NOTICE DATED 01.08.2018 ON 05.12.2018, WHEREIN THE ASSESSEE FURN ISHED THE COPY OF PARTITION DEED OF B.D. TOSHNIWAL (HUF) DATED 31.03. 1984 BY VIRTUE OF WHICH THE TENANCY WAS TRANSFER TO VINAY TOSHNIWAL ( HUF). THE COPY OF ACKNOWLEDGEMENT ABOUT FURNISHING THE AFORESAID D OCUMENTS IS FILED ON RECORD AS PER PAGE NO.9 OF PB. 26. DURING THE HEARING ON 10.01.2012, THIS FACT WAS CON FRONTED WITH THE AO. THE LD. AR OF THE ASSESSEE VEHEMENTLY SUBMITTED THAT ALL THE DOCUMENTS UPLOADED ON THE PORTAL OF REVENUE, SCREEN SHOT OF WHICH IS PLACED ON RECORD, CAN STILL BE OPENED TO ASCERTAIN THE CONTENTION OF ASSESSEE ABOUT THE SUBMISSION OF DOCUMENT ELECTRONI CALLY, AS THE ASSESSMENT PROCEEDING WERE UNDERTAKEN ELECTRONICALL Y. THIS FACT WAS NOT DISPUTED BY AO NOR BY LD. CIT-DR FOR THE REVENU E. COPY OF MEMORANDUM OF PARTITION DATED 01.04.1984 IS PLACED ON RECORD BEFORE US. PERUSAL OF SCHEDULE G OF THIS MEMORANDUM OF PAR TITION CLEARLY 20 ITA 5885/MUM/2019 VINAY TOSHNIWAL HUF DESCRIBE THAT TENANCY RIGHT AT SHAKUNTALA 69, WORLI SEA FACE, BOMBAY WAS ALLOTTED TO SHRI VINAY TOSHNIWAL. FURTHER SH. B.D. TOSHNIWAL, KARTA OF B.D. TOSHNIWAL (HUF) WRITTEN A LETTER DATE D 23.08.1984 TO OWNER OF THE BUILDING SHAKUNTALA INFORMING THEM T HAT ON DESOLATION OF THEIR HUF, THE TENANCY RIGHT IN FLAT AND GARAGE HAVE BEEN ALLOTTED TO HIS SON VINAY TOSHNIWAL BEING COPARCENER HAVING RIG HT TO GET THESE RIGHTS (TENANCY RIGHT) IN THE CAPACITY OF HIS HUF I NCLUDING HIS WIFE AND CHILDREN. FURTHER, ON THE SAME DAY ASSESSEE HAS ALS O WRITTEN SIMILAR LETTER TO THE OWNER OF BUILDING SHAKUNTALA THAT O N PARTITION OF B.D. TOSHNIWAL (HUF) IS ALLOTTED TENANCY RIGHT IN FAVOUR OF ASSESSEE. FURTHER, OWNER OF BUILDING SHAKUNTALA ALSO WRITTE N A LETTER DATED 15.08.1984 (LETTER OF ATONEMENT) TO TENANTS/OCCUPAN TS OF BUILDING SHAKUNTALA CONFIRMING ABOUT THE TRANSFER OF TENA NCY RIGHT IN FAVOUR OF ASSESSEE. THE COPY OF ALL THE DOCUMENTS IS ON RE CORD AT PAGE NO. 20 TO 22 OF PB. THE AFORESAID DOCUMENTARY EVIDENCES CL EARLY ESTABLISH THAT THE ASSESSEE HELD ASSET (TENANCY RIGHT) FROM 1 984 IN ITS INDIVIDUAL CAPACITY. 27. FURTHER, THE ASSESSEE VIDE TRIPARTITE REGISTERED AG REEMENT DATED 29.05.2015 TRANSFERRED THE SAID TENANCY RIGHT TO M/ S PINE TREE ESTATE PVT. LTD. ON A CONSIDERATION OF RS. 22.50 CRORE. PE RUSAL OF REGISTERED 21 ITA 5885/MUM/2019 VINAY TOSHNIWAL HUF DEED FOR TRANSFER OF TENANCY AGREEMENT CLEARLY SHOW S THAT THE LANDLORD/OWNER OF CHAMPAGNE HOUSE (EARLIER KNOWN AS SHAKUNTALA) ALSO RECEIVED A CONSIDERATION OF RS. 45,00,000/- VI DE DEMAND DRAFT DATED 407315 & 407316 DATED 28.05.2015 OF RS. 22.50 LAKHS EACH, DRAWN ON HDFC BANK BEING CONFIRMING PARTY. AND IT I S CLEARLY EVIDENT FROM PERUSAL OF REGISTERED DEED FOR TRANSFER OF TEN ANCY AGREEMENT THAT B.D. TOSHNIWAL (HUF) WAS THE TENANT IN THE SAID PRE MISES. AFTER THE DEATH OF B.D. TOSHNIWAL, HIS SON VINAY TOSHNIWAL WA S OCCUPYING THE SAID PREMISES ALONG WITH HIS FAMILY. IT IS FURTHER MENTIONED THAT VINAY TOSHNIWAL EXPIRED IN AUGUST 2004. AFTER THE DEATH O F VINAY TOSHNIWAL, THE TENANTED PREMISE WAS UNDER THE POSSE SSION OF HIS FAMILY MEMBER IN THE NAME OF VINAY TOSHNIWAL (HUF). THE ASSESSEE HAS ALSO PLACED ON RECORD THE RENT RECEIPT FOR PAYM ENT OF RENT FROM APRIL 2015 TO MAY 2015 @ RS. 4000/- PAID TO V.S. CH OUGULE & R.S. CHOUGULE PVT. TRUST. WE HAVE FURTHER NOTED THAT AL L THESE DOCUMENTS WERE FILED BEFORE AO AS WELL AS THE LD. CIT(A). THI S FACT WAS VERIFIED BY US FROM THE RECORD OF LD. CIT(A) WHILE HEARING T HE APPEAL. THE LOWER AUTHORITY HAS NOT GIVEN ANY FINDING ON THE DO CUMENTARY EVIDENCE FURNISHED BY ASSESSEE TO SUBSTANTIATE THAT THE ASSE T IN THE FORM OF TENANCY RIGHT WAS IN EXISTENCE SINCE 1970. 22 ITA 5885/MUM/2019 VINAY TOSHNIWAL HUF 28. FROM THE DOCUMENTARY EVIDENCE, WE FIND THAT INITIAL LY THE TENANCY WAS CREATED IN THE NAME OF B.D. TOSHNIWAL (HUF), WHICH WAS TRANSFERRED TO VINAY TOSHNIWAL (HUF) AFTER ITS PARTITION IN 198 4. THE OWNER OF THE BUILDING/PROPERTY WHILE TRANSFERRING THE TENANCY RI GHT ACKNOWLEDGED THE TENANCY RIGHT IN FAVOUR OF ASSESSEE BEING ONE O F THE CONFIRMING PARTY IN THE TRANSFER DEED DATED 29.05.2015 AND REC EIVED CONSIDERATION OF RS. 45,00,000/-. THE ASSESSEE HAS ALSO PLACED ON RECORD OTHER CORROBORATIVE EVIDENCE BEING RENT RECEIPT OF TENANT ED PREMISES. 29. WE HAVE FURTHER NOTED THAT DURING THE ASSESSMENT, T HE AO MADE INVESTIGATION FROM THE BUYER OF THE PROPERTY I.E. P INE TREE ESTATE PVT. LTD. THE AO RECORDED THAT ONLY INCOME TAX RETURN FO R A.Y. 2016-17 WAS FILED BY THE BUYER IN RESPONSE TO NOTICE UNDER SECTION 133(6). NO FURTHER ACTION OR INVESTIGATION ABOUT THE CREDITWOR THY OF BUYER WAS CONDUCTED BY AO. THE INCOME TAX RETURN ALWAYS CONTA INED THE PAN OF THE ASSESSEE, WHICH IS SUFFICIENT TO CARRY OUT FURT HER ENQUIRY AGAINST THE SAID BUYER. NO SUCH SHOW-CAUSE NOTICE TO PROVE THE CREDITWORTHY OF PINE TREE ESTATE PVT. LTD. WAS ISSUED BY THE AO. FU RTHER, THE REGISTERED TRANSFER DEED OF TENANCY CLEARLY SHOWS THAT THE PAY MENT OF CONSIDERATION FOR TRANSFER OF ASSET/TENANCY RIGHT W AS PAID TO ASSESSEE THROUGH DEMAND DRAFT NO. 407314 DATED 28.05.2015 DR AWN ON HDFC 23 ITA 5885/MUM/2019 VINAY TOSHNIWAL HUF BANK. THUS, IN THE AFORESAID TRANSACTION, NO ADDITI ON UNDER SECTION 68 CAN BE MADE AGAINST THE ASSESSEE. THE ASSESSEE RIGH T FROM THE BEGINNING HAS CATEGORICALLY STATED THAT CONSIDERATI ON OF RS. 22.50 CRORE WAS RECEIVED AGAINST THE TRANSFER OF TENANCY RIGHT. AS WE HAVE NOTED EARLIER THAT IT IS SETTLED POSITION UNDER THE LAW, THAT TENANCY RIGHT IS A TRANSFERABLE ASSET. THE ASSESSEE RECEIVED CONSIDERA TION ON TRANSFER OF SAID RIGHT. FURTHER, THE ASSESSEE HAS UNAMBIGUOUSLY PROVED THAT ASSET WAS IN THE POSSESSION OF ASSESSEE FOR MORE THAN THR EE YEAR, THUS, ON THE SALE OF TENANCY RIGHT THE ASSESSEE IS ENTITLED FOR LTCG. THEREFORE, THE ADDITION UNDER SECTION 68 AGAINST THE PROCEEDS OF S ALE CONSIDERATION IS NOT UNJUSTIFIED. IN THE RESULT, GROUND NO.1 OF THE APPEAL IS ALLOWED. 30. GROUND NO.2 RELATES TO DEDUCTION UNDER SECTION 54. WE HAVE NOTED IN THE COMPUTATION OF INCOME AND WORKING OF CAPITAL GA IN THE ASSESSEE HAS CLAIMED EXEMPTION ON THE GROUND THAT ASSESSEE H AS INVESTED THE SALE PROCEEDS FOR ACQUISITION OF RESIDENTIAL PROPER TY/ FLAT NO. 39 IN RAHEJA TOWERS, RAJABHAU DESAI MARG, PRABHADEVI, MUM BAI. AS THE AO TREATED THE SALE PROCEEDS OF TENANCY RIGHT AS UN EXPLAINED CASH CREDIT AND RESULTANTLY NOT ALLOWED THE DEDUCTION/EX EMPTION UNDER SECTION 54F. CONSIDERING THE FACT THAT WE HAVE ALLO WED LTCG BY ALLOWING GROUND NO.1 IN FAVOUR OF ASSESSEE. THUS, W E DIRECT THE AO TO 24 ITA 5885/MUM/2019 VINAY TOSHNIWAL HUF VERIFY THE FACT ABOUT THE INVESTMENT OF SALE CONSID ERATION / GAIN IN PURCHASE OF NEW RESIDENTIAL HOUSE AND ALLOW EXEMPTI ON/DEDUCTION UNDER SECTION 54/54F IN ACCORDANCE WITH LAW. IN THE RESULT, THIS GROUND OF APPEAL IS ALLOWED FOR STATISTICAL PURPOSE. 31. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 26-02-2020. SD/- SD/- (S. RIFAUR RAHMAN) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIALMEMBER MUMBAI, DT : 26 TH FEBRUARY, 2020 PK/- COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR /TRUE COPY / BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI