Sri E.G. Amal Kumar, Bangalore V. ACIT, Bangalore

ITA 6/BANG/2010

• Counselvise Citation: 621114 RSA 2010
• Duration Of Justice: 1 year(s) 9 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 11-10-2011
• Assessment Year: 2001-2002
• Appeal Filed On: 04-01-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KUMAR AJEET
• Assessee Lawyers: S VENKATESAN
• Keywords: Rectification of order
• Section: 234B

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL BANGALORE BENCH B, BANGALORE BEFORE SHRI N.K.SAINI, ACCOUNTANT MEMBER AND SMT. P MADHAVI DEVI, JUDICIAL MEMBER I.T.A. NO.6(BANG.)/2010 (ASSESSMENT YEAR : 2001-02) SRI E.G AMAL KUMAR, M/S EGK & SONS, MG ROAD, CHURCH STREET, BANGALORE-560 001. PAN NO.AAAHA5522M APPELLANT VS THE ASST. COMMISSIONER OF INCOME-TAX, CIRCLE-1(1), BANGALORE RESPONDENT ASSESSEE BY : SHRI S.VENKATESAN, CA REVENUE BY : SHRI KUMAR AJEET, JCIT DATE OF HEARING : 11-10-2011 DATE OF PRONOUNCEMENT : 14-10-2011 O R D E R PER SMT P. MADHAVI DEVI, JM ; THIS APPEAL BY THE ASSESSEE RELATES TO ASSESSMENT Y EAR 2001-02. THIS APPEAL WAS INITIALLY HEARD AND DISPO SED OF BY THE A BENCH OF THIS TRIBUNAL VIDE ORDER DATED 17-09-2 010. HOWEVER, THE ASSESSEE HAS FILED AN M.P NO.28(B)/201 1, BRINGING TO THE NOTICE OF THE BENCH THAT GROUND NOS.6,7 & 8 HAVE NOT BEEN DISPOSED OF BY THIS TRIBUNAL. IN THE M.P., T HE ASSESSEE ITA.NO.6(B)/10 2 HAD ALSO SOUGHT RECTIFICATION OF THE MISTAKES APPAR ENT FROM THE RECORD, IN TERMS OF SEC.254(2) OF THE IT ACT. THIS TRIBUNAL VIDE ORDER DATED 04-08-2011 HAS REJECTED THE ASSESSEES GROUNDS RELATING TO RECTIFICATION OF MISTAKES ALLEGEDLY APP ARENT FROM THE ORDER, WHILE RECALLING THE ORDER OF THE TRIBUNAL AS REGARDS GROUND NOS.6,7 & 8 ARE CONCERNED, HENCE THIS APPEAL IS AGAIN BEFORE US, FOR HEARING ON THESE GROUNDS. 2. THE GROUNDS 6,7 & 8 RAISED BY THE ASSESSEE ARE A S UNDER; 6. THE LD. CIT(A) IS NOT JUSTIFIED IN ENHANCING THE CONSIDERATION FOR TRANSFER BY A SUM OF RS.25.00 LAKHS AS SUGGESTED BY THE AO UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANT S CASE ESPECIALLY WHEN THERE IS NO LIABILITY TO CAPITAL GAINS ON THE JOINT DEVELOPMENT AND FURTHER EVEN IF JOINT DEVELOPMENT WERE TO BE CONSTRUED AS TRANSFER GIVING RAISE TO CAPITAL GAINS, SUCH EVENT ATTRACTING THE PROVISIONS OF SEC.2(47)(V) DID NOT TAKE PLACE DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER APPEAL. 7. WITHOUT PREJUDICE TO THE ABOVE, THE AUTHORITIES BELOW OUGHT TO HAVE ALLOWED THE CLAIM OF BUSINESS LOSS UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANTS CASE. ITA.NO.6(B)/10 3 8. WITHOUT PREJUDICE TO THE RIGHT TO SEEK WAIVER WITH THE HONBLE CCIT/DG, THE APPELLANT DENIES HIMSELF LIABLE TO BE CHARGED TO INTEREST U/S 234B AND 234D OF THE IT ACT, WHICH UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANTS CASE AND THE LEVY DESERVES TO BE CANCELLED. 3. AT THE TIME OF HEARING, LEARNED COUNSEL FOR TH E ASSESSEE HAS SUBMITTED THAT THE ASSESSEE DOES NOT WISH TO PR ESS GROUND NO.7 AND THEREFORE, IT IS REJECTED AS NOT PRESSED. 3.1 AS REGARDS GROUND NO.8 LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE INTEREST HAS BEEN LEVIE D U/S 234D OF THE ACT, WHICH HAS COME INTO FORCE W.E.F.01-06-2003 . HE SUBMITTED THAT THE RELEVANT ASSESSMENT YEAR IS 2001 -02, FOR WHICH THE SAID SECTION IS NOT APPLICABLE. 4. THE LEARNED DR HAS ALSO FAIRLY ADMITTED THAT TH IS PROVISION OF LAW WAS NOT IN FORCE DURING THE RELEVA NT PERIOD OF TIME. WE ALSO FIND THAT THIS ISSUE IS COVERED BY T HE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL AT DELHI IN THE C ASE OF EKTA PROMOTERS REPORTED IN (2008) 113 ITD 719. IN VIEW O F THE SAME, WE DIRECT THE AO TO DELETE THE INTEREST CHARGED U/S 234D OF THE IT ACT. ITA.NO.6(B)/10 4 4.1 AS REGARDS LEVY OF INTEREST U/S 234B IS CONCER NED, WE HOLD THAT IT IS CONSEQUENTIAL IN NATURE AND THEREFO RE, THE ORDER OF THE CIT(A) NEEDS NO INTERFERENCE, ACCORDINGLY, GROU ND NO.8 IS PARTLY ALLOWED. 5. AS REGARDS GROUND NO.6, LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE AND TWO OTHERS HAD ENTE RED INTO A JOINT DEVELOPMENT AGREEMENT FOR THE DEVELOPMENT OF THE PROPERTY AND AS PER THE CLAUSES OF THE AGREEMENT, THE ASSESS EE AND THE OTHERS WERE TO BE GIVEN ALTERNATIVE ACCOMMODATION W ITHOUT ANY PAYMENT OF RENT FOR THE PERIOD OF CONSTRUCTION. HE SUBMITTED THAT THE POSSESSION OF THE PROPERTY WAS GIVEN IN TH E YEAR 1996 TO THE DEVELOPER AND THEREFORE, THE CAPITAL GAIN HAS A RISEN IN THAT ASSESSMENT YEAR I.E 1997-98. HE SUBMITTED THAT EV EN IF THE RENT FREE ACCOMMODATION HAS TO BE CONSIDERED FOR COMPUTI NG THE CAPITAL GAINS, IT HAS TO BE CONSIDERED IN THE YEAR IN WHICH THE ASSESSEE AVAILED THE RENT FREE ACCOMMODATION AND NO T DURING THE RELEVANT ASSESSMENT YEAR. HE ALSO SUBMITTED THAT TH ERE WERE CO- PARCENERS ALONG WITH THE ASSESSEE IN WHOSE HANDS AL SO THE ENHANCED CAPITAL GAINS HAS TO BE APPORTIONED. 6. THE LEARNED DR ON THE OTHER HAND SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE ASS ESSEE HIMSELF HAS OFFERED THE CAPITAL GAINS IN THE YEAR 2001-02 A ND THEREFORE, ITA.NO.6(B)/10 5 THIS YEAR WHEN THE RENT FREE ACCOMMODATION WAS GIVE N TO THE ASSESSEE HAS TO BE VALUED AND TAKE INTO CONSIDERATI ON FOR THE PURPOSE OF ARRIVING AT THE SALE CONSIDERATION RECEI VED BY THE ASSESSEE. THEREFORE, ACCORDING TO HIM, THE ENTIRE AMOUNT OF RS.25.00 LAKHS PAID BY THE DEVELOPER FOR GIVING REN T FREE ACCOMMODATION TO THE ASSESSEE IS TO BE CONSIDERED A S THE VALUE OF SALE CONSIDERATION, IN ADDITION TO THE CONSIDERA TION PAID BY THE DEVELOPER AND THE CIT(A) HAS RIGHTLY UPHELD THE ADD ITION MADE BY THE AO. 7. HAVING HEARD BOTH THE PARTIES AND HAVING CONSID ERED THE RIVAL CONTENTIONS, WE FIND THAT THE ASSESSEE AND TW O OTHERS I.E. HIS FATHER AND BROTHER HAVE ENTERED INTO THE DEVELO PMENT AGREEMENT WITH THE DEVELOPER. IT IS ALSO NOT IN D ISPUTE THAT THE ASSESSEE AND OTHERS WERE GIVEN RENT FREE ACCOMMODAT ION DURING THE PERIOD OF CONSTRUCTION FOR WHICH THE DEVELOPER HAS ADMITTEDLY PAID THE RENT OF RS.25.00 LAKHS. FURTHER, THIS TRIB UNAL VIDE ORDER DATED 17-09-2010, HAS ALREADY HELD THAT THE CAPITAL GAINS IS TAXABLE DURING THE RELEVANT ASSESSMENT YEAR I.E 200 1-02. HAVING HELD SO, IT CANNOT BE NOW TAKEN INTO CONSIDERATION, AS TO WHETHER THE CAPITAL GAINS HAS TO BE TAXED IN ASSESSMENT YEA RS 1997-98 OR 2001-02. THEREFORE, THE CAPITAL GAINS IS EXIGIBLE T O TAX DURING THE ASSESSMENT YEAR 2001-02, AND IT IS IN THIS YEAR THA T THE ITA.NO.6(B)/10 6 ASSESSING AUTHORITY HAS TO TAKE INTO CONSIDERATION THE CONSIDERATION BOTH THE CASH AND THE KIND RECEIVED B Y THE ASSESSEE. THE CONTENTION OF THE ASSESSEE IS THAT T HE ENHANCED GAIN IS TO BE CONSIDERED IN THE HANDS OF THE CO-PAR CENERS IS NOT CONSIDERED BY THE AO. THIS CONTENTION NEEDS VERIFIC ATION OF FACTS. IN VIEW OF THE SAME, WE DEEM IT FIT AND PROPER TO R EMIT THE ISSUE TO THE FILE OF THE ASSESSING AUTHORITY WITH A DIREC TION TO CONSIDER WHETHER THE ENTIRE OF AMOUNT OF RS.25.00 LAKHS IS T O BE TAXED IN THE HANDS OF THE ASSESSEE OR HAS TO BE APPORTIONED AMONGST THE CO-PARCENERS OF THE PROPERTY. THIS GROUND OF THE A PPEAL IS ACCORDINGLY, ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 14-10-20 11. SD/- SD/- ( N.K.SAINI) (SMT . P. MADHAVI DEVI) ACCOUNTANT MEMBER JUDIC IAL MEMBER PLACE: BANGALORE DATED: 14-10-2011 AM* COPY TO : 1. THE ASSESSEE 2. THE REVENUE 3. CIT(A) 4. CIT 5. DR 6. GF(BLORE) BY ORDER AR, ITAT, BANGALORE