SMT. SULEENA N. SHINDE, MUMBAI V. THE ITO WD 15(1)(3), MUMBAI

ITA 6888/MUM/2007

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3865 (ITAT-MUMBAI)
• Duration Of Justice: 8 year(s) 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-04-2016
• Appeal Filed By: Assessee
• Bench Allotted: J
• Next Hearing Date: 10-12-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 16-11-2007
• Court: TRIBUNAL
• Department Lawyers: ADAGIRI
• Assessee Lawyers: G P MEHTA
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL J , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI AMARJIT SINGH , JM ./ ITA NO. 6888 / MUM/20 07 ( / ASSESSMENT YEAR : 200 4 - 0 5 ) SMT. SULEE NA N. SHINDE, C/O G.P.MEHTA & CO., CAS, 807, TULSIANI CHAMBERS , 212, NARIMAN POINT, MUMBAI - 400021 VS. ITO, WARD - 15(1)(3), MUMBAI ./ ./ PAN/GIR NO. : A W A PS 9774 M ( / APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : MR. G.P.MEHTA /REVENUE BY : SHRI B.YADAGIRI / DATE OF HEARING : 04 / 02 /201 6 / DATE OF PRONOUNCEMENT 27/04 /2016 / O R D E R PER R.C.SHARMA (A.M) : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - MUMBAI, DATED 12 - 9 - 2007, FOR THE ASSESSMENT YEAR 200 4 - 0 5 , IN THE MATTER OF ORDER PASSED U/S. 143(3) OF THE I.T.ACT. 2. IN THIS APPEAL, THE ASSESSEE IS AGGRIEVED FOR COMPUTING LONG TERM CAPITAL GAIN AT RS. 32, 33,374/ - AS AGAINST CAPITAL GAIN OF RS. 3,17,329/ - . 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. FACTS IN BRIEF ARE THAT A PARTNERSHIP WAS FORMED BETWEEN THE ASSESSEE , HER FATHER, D.G. AMBEDKAR & HER BROTHER, AJIT AMBEDKAR IN THE NAME & STYLE OF M/S. AMBEDKAR & AMBEDKAR ON 30.06.1983. THE ASSESSEE 'S SHARE WAS 15%. THE SAID PARTNERSHIP FIRM WAS ENGAGED IN THE BUSINESS OF REAL ESTATE AND ITA NO. 6888 / 07 2 DEVELOPMENT OF PROPERTY. A N AGREEMENT OF DEVELOPMENT WAS MADE ON 04.10.1984 BETWEEN VENDOR AND M/S. AMBEDKAR & AMBEDKAR FOR THE PLOT OF LAND BEARING FINAL PLOT NO.901 OF TOWN PLANNING SCHEME, BOMBAY CITY - IVB (MAHIM AREA), TOGETHER WITH A STRUCTURE STANDING THEREON AND VENDOR AGREED TO EXECUTE CONVEYANCE OF LAND IN FAVOUR OF PURCHASER, M/S. AMBEDKAR & AMBEDKAR FOR TOTAL CONSIDERATION OF RS.10 LAKHS. M/S. AMBEDKAR & AMBEDKAR WAS DISSOLVED W.E.F. 30.06.1988 AND PRIOR TO THE DISSOLUTION HAS REQUESTED THE VENDOR TO EXECUTE THE CONVEYANCE IN THE NAME OF CONFIRMING PARTIES AND AS PER TERMS OF DISSOLUTION OF FIRM. AS A RES ULT, THE EX - PARTNER HAVE BEEN ENTITLED TO THE CONVEYANCE OF THE SAID LAND AS TENANT IN COMMON WHEREIN THE ASSESSEE HAS 28% SHARE. THE CONVEYANCE OF THE PROPERTY HAS BEEN EXECUTED FOR TOTAL CONSIDERATION OF R S .10 LAKH ON 14.02.1989. FROM THE ORDER OF ACQUIS ITION NO. LAR/1/2002 DATED 17.2.2005 BY SPECIAL LAND ACQUISITION OFFICER, M HADA, THE TOTAL CONSIDERATION RECEIVED BY THE C O - OWNER IS R S .1,38,07,302/ - . ON THE BASIS OF INDENTURE COPY, THE ASSESSEE ENTITLED TO GET 28% OF TOTAL SALE PROCEEDS WHICH WAS WORKED OUT AT RS.38,66,044/ - WHEREAS THE ASSESSEE HAS SHOWN THE TOTAL SALE PRICE ONLY AT RS.10 LAKHS. ON A SPECIFIC QUERY RAISED ON THIS POINT, THE ASSESSEE REPLIED THAT AS A RESULT OF FAMILY SETTLEMENT FOR DISTRIBUTION OF ASSET, THE ASSESSEE GOT ONLY 10 LAKHS ON WHICH THEY OFFERED CAPITAL GAIN. THE AO WAS NOT IMPRESSED WITH THE ARGUMENT GIVEN BY THE ASSESSEE . THE AO HELD THAT IT WAS NOT FAMILY PROPERTY RECEIVED BY ASSESSEE AS A RESULT OF FAMILY SETTLEMENT. IN VIEW OF THE AO, THE ASSESSEE WAS HOLDING HER SHARE @ 2 8% IN THE CONVEYANCE DEED AS TENANT IN ITA NO. 6888 / 07 3 COMMON BY VIRTUE OF BEING PARTNER IN M/S. AMBEDKAR & AMBEDKAR. IT WAS FURTHER HELD BY THE AO THAT THE IMPUGNED PROPERTY CANNOT BE CONSIDERED AS A FAMILY ASSET OWNED BY DECEASED PARENTS BUT AN ASSET OF A FIRM. THE AO W AS OF THE OPINION THAT THE COMPENSATION RECEIVED OF RS.1,38,07,302/ - FROM MHADA AFTER COMPULSORY ACQUISITION HAS TO BE TREATED AS A C APITAL GAIN IN THE HAND OF THE C O - OWNER IN SHARE RATIO GIVEN IN THE CONVEYANCE DEED DATED 14 - 2 - 1989. ACCORDINGLY, THE AO TR EATED CAPITAL GAINS AT RS.38,66,044/ - AND NOT THE ACTUAL RECEIPT AT RS.10 LAKH AS DECLARED BY THE ASSESSEE. 4. BY THE IMPUGNED ORDER, THE CIT(A) CONFIRMED THE ADDITION BY OBSERVING THAT AS A RESULT OF SETTLEMENT AMONG THE FAMILY MEMBER, THE APPELLANT CHOSE TO RECEIVE ONLY AT RS.10 LAKH AS AGAINST THE ACTUAL SHARE TO BE WORKED AT RS.38,66,044/ - . NOW, THE QUESTION ARISES ON THE POINT OF TAXABILITY OF CAPITAL GAIN AS TO WHETHER IT SHOULD BE COMPUTED ON THE ACTUAL RECEIPT OR ON THE AMOUNT LEGALLY ACCRUED IN HER HAND. AS PER ASSESSEE IT IS A N ACTUAL CONSIDERATION WHICH IS TO BE TAKEN INTO ACCOUNT FOR COMPUTATION OF CAPITAL GAIN WHEREAS THE AO HELD THAT THE AMOUNT LEGALLY APPROVED IS TO BE TAKEN FOR THE COMPUTATION OF CAPITAL GAIN. 5. WE HAVE CONSIDERED RIVAL CONT ENTIONS AND CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND FROM THE RECORD THAT DURING THE YEAR ASSESSEE WAS IN RECEIPT OF PART OF THE LONG TERM CAPITAL GAIN AROSE OUT OF TRANSFER OF PROPERTY. AS THE PROPERTY WAS JOINTLY OWNED BY THE VARIOUS FAMILY MEMBERS, THE ASSESSEE HAS OFFERED RS.10 LAKHS AS AGAINST ACTUAL SHARE AS WORKED OUT AT RS.38.66 LAKHS ON THE BASIS OF ASSESSEES ITA NO. 6888 / 07 4 ENTITLEMENT OF 28% OF THE SALE PROCEEDS. WE FOUND THAT SALE PROCEEDS WAS RECEIVED ON TRANSFER OF LONG TERM CAPIT AL GAINS BY ONE OF THE MEMBER OF THE FAMILY. SINCE ASSESSEE WAS IN RECEIPT OF RS.10 LAKHS, THEREFORE, SHE HAS OFFERED RS.10 LAKHS FOR CAPITAL GAIN. HOWEVER, IT IS NOT CLEAR FROM THE RECORD AS TO WHETHER THE BALANCE OF CAPITAL GAIN HAS BEEN OFFERED BY OTHER FAMILY MEMBERS IN THEIR HAND. IT IS ALSO NOT CLEAR AS TO WHICH MEMBER OF THE FAMILY HAVE GOT HIGHER SHARE IN CAPITAL GAINS AS A RESULT OF SHARE OF CAPITAL GAIN S BY THE AMOUNT AS SACRIFICED BY THE ASSESSEE IN HER SHARE. THE TOTAL AMOUNT OF CAPITAL GAIN IS NOT IN DISPUTE. THE DISPUTE PERTAINS TO THE SHARE RECEIVED BY THE ASSESSEE. ACCORDINGLY, WE RESTORE THE MATTER BACK TO THE FILE OF AO TO FIND OUT IF THE BALANCE OF SHARE OF THE CAPITAL GAIN WHICH WAS NOT TAKEN BY THE ASSESSEE AND TRANSFERRED IN FAVOUR OF T HE OTHER FAMILY MEMBERS, HAS BEEN CORRECTLY OFFERED BY THAT FAMILY MEMBERS IN HIS HANDS, THEN THE ASSESSEE CAN BE MADE LIABLE FOR CAPITAL GAIN IN RESPECT OF RS.10 LAKHS ACTUALLY RECEIVED BY HIS/HER. IF OTHER FAMILY MEMBERS WHO ARE IN RECEIPT OF SHARES IN C APITAL GAIN AS SACRIFICED BY THE ASSESSEE HAD NOT OFFERED IN HIS SHARES ALONG WITH SACRIFICED PORTION OF ASSESSEE , THE SAME CAN BE BROUGHT TO TAX IN THE HANDS OF THE ASSESSEE. WE DIRECT ACCORDINGLY. 6 . IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED FOR STA TISTICAL PURPOSES. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 27/04 / 201 6 . SD/ - ( AMARJIT SINGH ) SD/ - ( R.C.SHARMA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED 27/04 /201 6 . . /PKM , . / PS ITA NO. 6888 / 07 5 / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. //TRUE COPY//