I.T.O.3(3)-3, MUMBAI V. SKV INDUSTRIAL PLANT & WASTE TREATMENT PVT. LTD., MUMBAI

ITA 5993/MUM/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 8286 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-12-2014
• Appeal Filed By: Department
• Bench Allotted: E
• Next Hearing Date: 10-12-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 01-10-2012
• Court: TRIBUNAL
• Department Lawyers: S S PHADKAREAR
• Assessee Lawyers: NEIL PHILIPDR

Judgement Text

, , ,, , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E MUMBAI , .. , ! ' # BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI B.R.BASKARAN, ACCOUNTANT MEMBER . / ITA NO.5993/MUM/2012 $ $ $ $ / ASSESSMENT YEAR: 2009-10 INCOME TAX OFFICER WARD -3(3)(3), 6 TH FLOOR AAYAKAR BHAVAN, M.K. ROAD MUMBAI-400 020. VS. M/S. SKV INDUSTRIAL PLANT & WASTE TREATMENT PVT. LTD. SUIT NO.C-2, ENVIRO COMMERCE BLDG. 34 DEONAR ANCI;;ARY INDL. COMPLEX, GOVANDI (W) MUMBAI-400 003. ( %& / ASSESSEE) ( ' / REVENUE) P.A. NUMBER : AAICS 2199 F %& ( (( ( ) ) ) ) / ASSESSEE BY SHRI NEIL PHILIP-DR ' ( (( ( ) ) ) ) /REVENUE BY : SHRI S.S. PHADKARE-AR ( &*! / DATE OF HEARING : 10/12/2014 +,$ ( &*! / DATE OF PRONOUNCEMENT : 10/12/2014 ' - ' - ' - ' - / O R D E R PER JOGINDER SINGH (JM) : THE APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 07/11/2012 PASSED BY THE LD. CIT(A) FOR THE A SSESSMENT YEAR 2003-04, ON THE FOLLOWING GROUND. 2 M/S. SKV INDUSTRIAL PLANT & WASTE TREATMENT PVT. LTD. 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE ID. CIT (A) WAS JUSTIFIED IN DELETING THE ADDITION OF RS. 1,30,00,000/- REVEALED FROM THE AIR INFORMATION HOL DING THAT SHOP NO. 18 WHICH WAS THE SUBJECT MATTER OF TRANSFE R WAS ALLOCATED TO THE DEVELOPER M/S ATHENE CONSTRUCTION LTD. BY AGREEMENT DATED 24.05.2006 AND THE ASSESSEE DID NOT RECEIVED ANY MONEY OUT OF THE SAID SALE PROCEEDS OF RS. 1,30 ,00,000/- WITHOUT APPRECIATING THE FACT THAT THE SAID ADDITIO N HAS BEEN MADE BY THE AO IN THE HANDS OF THE ASSESSEE COMPANY ON P ROTECTIVE BASIS SINCE THERE WAS DISPUTE BETWEEN THE TWO PARTI ES AND ARBITRATION PETITION BEFORE THE HON'BLE BOMBAY HIGH COURT WAS FILED BY THE ASSESSEE. THE ASSESSEE HAD ALSO PLEADED IN T HE ARBITRATION PROCEEDINGS FOR RESTRAINT ON SALE OF PROPERTIES BY M/S ATHENE CONSTRUCTION PVT. LTD. TILL THE FINAL OUTCOME OF TH E ARBITRATION PETITION.' 2. 'THE APPELLANT PRAYS THAT THE ORDER OF CIT (A) ON T HE ABOVE GROUND BE SET ASIDE AND THAT OF THE ASSESSING OFFICE R BE RESTORED'. 2. AT THE TIME OF HEARING, WE HAVE HEARD SHRI NEIL PH ILIP, LD. DR, WHO DEFENDED THE CONCLUSION DRAWN IN THE ASSESS MENT ORDER WHEREAS THE LD. COUNSEL FOR THE ASSESSEE, SHR I S.S. PHADKARE, SUPPORTED THE CONCLUSION DRAWN IN THE IMP UGNED ORDER. IT WAS PLEADED THAT PROTECTIVE ADDITION WAS MADE IN THE HANDS OF THE ASSESSEE AND IN ARBITRATION PROCEEDING S, THE ISSUE HAS BEEN DECIDED. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIAL AVAILABLE ON RECORD. BEFORE COMING TO ANY CONCLUSION, 3 M/S. SKV INDUSTRIAL PLANT & WASTE TREATMENT PVT. LTD. WE ARE REPRODUCING HEREUNDER THE RELEVANT PORTION F ROM THE IMPUGNED ORDER FOR READY REFERENCE: 4.4. I HAVE CONSIDERED THE A.O.'S ORDER AS WELL AS APPELLANT AR'S SUBMISSIONS. HAVING CONSIDERED BOTH, I FIND THAT THE APPELLANT COMPANY HAS COME INTO AN AGREEME NT WITH M/S. ATHENE CONSTRUCTION PVT. LTD. FOR THE RE- DEVELOPMENT OF PROPERTY SITUATED AT PLOT NO. 63, SE CTOR-1 1, BELAPUR, NAVI MUMBAI IN THE NAME OF SKY LARK'. THE APPELLANT ENTERED INTO A DETAILED AGREEMENT FOR THE AFORESAID PROPERTY VIDE AGREEMENT DATED 24/05/2006 ENTERED BETWEEN THE APPELLANT AND MIS. ATHENE CONSTRUCTION PVT. LTD. AS PER CLAUSE-2 OF THE SAID AGREEMENT DT. 24/0512006, SPECIFIC AREA WAS ASSIGNED FOR THE DEVELOPER M/S. ATHENE CONSTRUCTION PVT. LTD. HOWEVE R, IN THE COURSE OF TIME, M/S. ATHENE CONSTRUCTION PVT. L TD. HAS EXCEEDED THE TERMS AND CONDITIONS LAID DOWN IN THE SAID AGREEMENT DATED 24/05/2006 AND CARRIED OUT THE CONSTRUCTION AS WELL AS VIOLATED THE SAID AGREEMENT DATED 24/05/2006. AGGRIEVED WITH THE SAME, THE APPELLA NT HAS FILED AN ARBITRATION SUITE BEFORE JUSTICE B.N. SREEKRISHNA WHICH IS STILL PENDING BEFORE HIM FOR THE ARBITRATION ORDER. FURTHER TO THAT, EVEN SHOP NO. 1 8 WHICH WAS THE SUBJECT MATTER OF TRANSFER WHICH RESULTED I N THE TAXABILITY IN THE HANDS OF THE APPELLANT ON PROTECTIVE BASIS WAS ALLOCATED TO THE DEVELOPER MIS . 4 M/S. SKV INDUSTRIAL PLANT & WASTE TREATMENT PVT. LTD. ATHENE CONSTRUCTION PVT. LTD. AS PER CLAUSE (D) OF THE SAID AGREEMENT. EVEN THE PERUSAL OF THE APPELLANT'S SUBMISSION CLEARLY SUGGEST THAT THE APPELLANT HAS N OT RECEIVED ANY PENNY OUT OF THE SALE PROCEEDS OF SALE OF SHOP NO.18 OF RS.1,19,95,600/- AND HENCE WITHOUT HAVING ANY SUCH INFORMATION OF RECEIPTS OF ANY SUCH INCOME IN THE APPELLANT'S HANDS, THERE IS NO QUESTION OF TAXABILITY IN THE HANDS OF THE APPELLAN T COMPANY OF THE AFORESAID SUM EVEN ON PROTECTIVE BAS IS. 4.5. ACCORDINGLY, TAKING NOTE OF THE APPELLANT'S SUBMISSION, I AM OF THE CONSIDERED VIEW THAT THE APPELLANT HAS NOT RECEIVED ANY SUM ON ACCOUNT OF SALE OF SHOP NO, 18 OF SKY LARK'. HENCE, TAXING THE SAID SUM IS NOT JUSTIFIED BY THE AO EVEN ON PROTECTIVE BASIS AND ACCORDINGLY THE ADDITION SO MADE IS DELETED. HENCE, APPELLANT'S THIS GROUND OF APPEAL IS ALLOWED. 2.2. BROADLY, WE ARE IN AGREEMENT WITH THE CONCLUSION DR AWN IN THE IMPUGNED ORDER TO THE EXTENT THAT PROTECTIVE AD DITION WILL NOT SURVIVE WHEN THE MATTER HAS BEEN SETTLED BETWEE N THE PARTIES, DURING ARBITRATION PROCEEDINGS. HOWEVER, THE OUTCOME OF SUCH PROCEEDINGS WAS NEITHER BEFORE THE ASSESSIN G OFFICER NOT BEFORE US, THEREFORE, WE SEND THIS FILE TO THE FILE OF THE ASSESSING OFFICER TO EXAMINE THE CLAIM OF THE ASSESSEE/OUTCOM E OF THE 5 M/S. SKV INDUSTRIAL PLANT & WASTE TREATMENT PVT. LTD. ARBITRATION PROCEEDINGS AND AGREEMENT ENTERED INTO BETWEEN THE PARTIES AND THEN DECIDE IN ACCORDANCE WITH LAW, THU S, THE APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PU RPOSES. FINALLY, THE APPEAL OF THE REVENUE IS ALLOWED FOR S TATISTICAL PURPOSES. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF HEARING ON 10/12/2014. SD/- SD/- ( B.R. BASKARAN) ( JOGINDE R SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 10/12/2014 JV, SR. PS B F{X~{T? P.S/. . . ' - ' - ' - ' - ( (( ( .&/ .&/ .&/ .&/ 0 /$& 0 /$& 0 /$& 0 /$& / COPY OF THE ORDER FORWARDED TO : 1. 12 / THE APPELLANT 2. .312 / THE RESPONDENT. 3. 4 ( ) / THE CIT(A)- 4. 4 / CIT 5. /5 .& , , / DR, ITAT, MUMBAI 6. 56 7 / GUARD FILE. ' - ' - ' - ' - / BY ORDER, 3/& .& //TRUE COPY// 8 88 8 / 9 9 9 9 ' ' ' ' (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI.