SHRI. MAHENDRAKUMAR N PUROHIT, MUMBAI V. ASST.C.I.T, CENTRAL CIRCLE-9, MUMBAI

ITA 6538/MUM/2008

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 55093 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 9 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 18-08-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 11-11-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PRADEEP SHARMA
• Assessee Lawyers: LATA PARULEKAR
• Section: 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI BEFORE SHRI. J.SUDHAKAR REDDY (A.M.) AND SHRI. VIJA Y PAL RAO (J.M) ITA NO.6537/MUM/2008 ASSESSMENT YEAR : 2002-2003 ITA NO.6538/MUM/2008 ASSESSMENT YEAR : 2003-2004 MAHENDRA KUMAR N. PUROHIT FLAT NO.1, 43 RD FLR., SHREEPATI ARCADE, AUGUST KRANTI MARG, NANA CHOWK, MUMBAI 400036. PAN : AAXPP3867L VS. A.C.I.T. CENTRAL CIRCLE - 9 OLD C.G.O., MUMBAI 400 020. (APPELLANT) (RESPONDENT) APPELLANT BY : MS. LATA PARULEKAR RESPONDENT BY : SHRI PRADEEP SHARMA O R D E R PER VIJAY PAL RAO, J.M. THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST TWO SEPARATE ORDERS OF THE LD CIT(A) BOTH DATED 25.09.2008 FOR T HE ASSESSMENT YEAR 2002- 2003 AND 2003-2004 RESPECTIVELY. 2. THE ASSESSEE HAS RAISED COMMON GROUND IN THESE A PPEALS FOR THE SAKE OF CONVENIENCE. WE REPRODUCED GROUND RAISED FOR T HE ASSESSMENT YEAR 2002-03 AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, LEARNED CIT(A) ERRED IN CONFIRMING HE AOS ACTION HOLDING THAT THE PURCHASE PRICE OF FLAT ADMEASURING 2,133.20 SQ.FT. SHOULD BE SUBSTITUTED @ ` 6316 PER SQ.FT. INSTEAD OF PURCHASE PRICE PAID AT ` 3,500/- PER SQ.FT. THE APPELLANT SUBMITS THAT THE PURCHASE PRICE ADOPTED BY THE AO A T ` 6,316 PER SQ.FT. IS ARBITRARY AND PRAYS THAT THE PURCHASE PRICE PAID AT ` 3,500/- PER SQ.FT. MAY PLEASE BE ACCEPTED. THE AD DITION OF ` 60,07,091/- BY INVOKING THE PROVISIONS OF SECTION 2 8(IV) MAY PLEASE BE DELETED. ITA NO.6537 & 6538/MUM/2008 A.Y. : 2002-03 & 2003-04 2 3. WE HAVE HEARD THE LEARNED AR AS WELL AS THE LD DR AND CONSIDERED THE RELEVANT RECORD. THE ASSESSEE BELONGS TO SHREEPAT I GROUP, WHERE SEARCH AND SEIZER ACTION U/S.132 OF THE I.T. ACT, WAS CARR IED OUT AND SUBSEQUENTLY THE ASSESSMENT WAS FRAMED U/S.143(3) R.W.S. 153A. THE LEARNED AR OF THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE IS A MEMBE R OF THE A.O.P. M/S. R.R. CHATURVEDI & OTHERS, AN IDENTICAL ADDITION WAS MADE IN THE CASE OF ANOTHER GROUP MEMBER OF R.R. CHATURVEDI FOR THE ASS ESSMENT YEAR 2003-04 AND THIS TRIBUNAL VIDE ORDER DATED 15.06.2009 HAS D ECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. HE HAS FILED A COPY OF THE ORDER DATED 15.06.2009 IN ITA NO.6437/MUM/08. ON THE OTHER HAND LEARNED DR H AS RELIED UPON THE ORDER OF THE LOWER AUTHORITIES. 4. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SED THE MATERIAL ON RECORD. AT THE OUT SET, WE NOTE THAT THE IDENTICA L ISSUE CAME BEFORE THE TRIBUNAL IN THE CASE OF SHRI. R.R.CHATURVEDI AND OT HERS. THIS TRIBUNAL HAS CONSIDERED AND ADJUDICATE THE ISSUE IN PARA 8 AND 9 AS UNDER: ITA NO.6537 & 6538/MUM/2008 A.Y. : 2002-03 & 2003-04 3 ITA NO.6537 & 6538/MUM/2008 A.Y. : 2002-03 & 2003-04 4 BROUGHT TO TAX U/S.28(IV). THE SECTIONS COVERS FR INGE BENEFIT THAT ARE AVAILED IN ADDITION TO CONSIDERATION EARNED IN CARRYING OUT A PROFESSION OR WHILE DOING BUSINESS. A BENEFIT I.E. PASSED ON BY ONE PARTY TO ANOTHER, IN ADDITION TO COST OR SALE PRICE, IS COVERED IN PROVISO. THIS IS CLEAR FROM THE EXAMPLE QUOTED. IN OUR HUMBLE OPINION, THIS SECTION CANNOT BE INVOKED UNDER THE P RESENT FACTS AND CIRCUMSTANCES. 8.4 BE IT AS IT MAY THE CO-ORDINATE BENCH OF THE T RIBUNAL (F-BENCH, MUMBAI) IN THE CASE OF HELIOS FOOD IMPROVERS (P) LE ARNED. (SUPRA) HELD THAT S.28 IS A CHARGING SECTION AND TAKES INTO ACCOUNT THE RECEIPT S OF SPECIFIED CATEGORIES OF ALL INCOMES AS WELL AS THE RECEIPTS WHICH COULD BE GENE RALLY CONSTRUED AS INCOME IN THE ORDINARY SENSE BUT THE FACT REMAINS THAT ALL THE R ECEIPTS MENTIONED IN S.28 ARE INHERENTLY OF INCOME NATURE EXCEPT IN CASE OF RECEI PT UNDER A GIVEN AMOUNT OF INSURANCE POLICY. IT ALSO STATES THAT S.28(IV) R EFERS TO ANY BENEFIT OR PERQUISITE AND THIS MEANS THAT SUCH BENEFIT OR PERQUISITE SHOULD B E IN THE NATURE OF INCOME FROM THE VERY BEGINNING OR IT MUST HAVE CHARACTERISTICS OF I NCOME BEFORE IT BECOMES CHARGEABLE AT A LATER STAGE IF THE ORIGINAL TRANSAC TION IS COMPLETED AS DESIGNED. THE BENCH FURTHER OBSERVED THAT THE WORDS BENEFIT OR PERQUISITE HAVE BEEN USED IN THE SAID SECTION AND HAVE TO BE READ TOGETHER AND WOULD DRAW COLOUR FROM EACH OTHER. NORMALLY THE TERM PERQUISITES DENOTES MEETING OUT OF AN OBLIGATION OF ONE PERSON BY ANOTHER PERSON EITHER DIRECTLY OR INDIRECTLY OR PRO VISION OF SOME FACILITY OR AMENITY BY ONE PERSON TO ANOTHER PERSON OR FROM THE VERY BEGIN NING THE PERSON PROVIDING SUCH FACILITY OR AMENITY BY ONE CONCESSION KNOWS THAT WH ATEVER IS BEING DONE IS IRRETRIEVABLE TO HIM, AS IT HAS BEEN GRANTED TO A P ERSON AS A PRIVILEGE OR RIGHT OF THAT PERSON. THUS, IT WAS CONCLUDED THAT THE WORD BEN EFIT HAS TO BE INTERPRETED IN THE SAME MANNER, THAT IS, AT THE TIME OF EXECUTION OF T HE BUSINESS TRANSACTION ONE PARTY SHOULD GIVE TO THE OTHER PARTY AN IRRETRIEVABLE BEN EFIT OR ADVANTAGE, AS AN OBLIGATION OR FACILITY OR A CONCESSION. IN OUR OPINION, ONLY IF THE SELLER HAD INCURRED AN EXPENSE OR A LIABILITY OR AD PROVIDED A FACILITY TO THE PURCHASE R, THEN THE VALUE IN CASH OF SUCH EXPENSES OR BENEFIT OR PERQUISITE SHALL BE TREATED AS INCOME. IN THIS CASE, THE SELLER HAS NOT INCURRED ANY EXPENSES OR LIABILITY OR HAS P ROVIDED A FACILITY. IT SOLD IT SHARES AT A REDUCED PRICE . ITA NO.6537 & 6538/MUM/2008 A.Y. : 2002-03 & 2003-04 5 ITA NO.6537 & 6538/MUM/2008 A.Y. : 2002-03 & 2003-04 6 REASONING OF THE TRIBUNAL IN THE CASE OF RUPEE FIN ANCE AND MANAGEMENT (P) LTD. WHICH ARE ON THE ABOVE LINES. THE GROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY ALLOWED. 5. SINCE THE FACTS OF THE CASE IN HAND AS WELL AS I N THE CASE OF SHRI. R.R. CHATURVEDI ARE PARAMOTERIA AND THE ASSESSMENT IN BO TH THE CASE IS ARISING OUT OF SAME SEARCH AND SEIZER ACTION THEREFORE, FOL LOWING ORDER OF THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE SUPRA, WE DECIDE THIS ISSUE IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. ORDER PRONOUNCED ON THIS 30 TH DAY OF AUGUST, 2011. SD/- (J.SUDHAKAR REDDY) (ACCOUNTANT MEMBER) SD/- (VIJAY PAL RAO) (JUDICIAL MEMBER) MUMBAI, DATED 30.08.2011 JANHAVI COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS)- , MUM BAI 4. COMMISSIONER OF INCOME TAX, CITY- , MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH , MUM BAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI