Income-tax Officer, V. Shri Amit Murlidhar Kamthe, Pune

ITA 699/PUN/2016

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 5508 (ITAT-PUNE)
• Duration Of Justice: 5 year(s) 1 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 12-05-2021
• Assessment Year: 2008-2009
• Appeal Filed On: 13-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset; Competent authority; Capital Gains; CHAPTER IV
• Section: 201; 48; 13; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH, A PUNE VIRTUAL COURT BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER . / ITA NO.699/PUN/2016 / ASSESSMENT YEAR : 2008-09 ITO, WARD 3(3), PUNE VS. SHRI AMIT MURLIDHAR KAMTHE L/H OF SHRI MURLIDHAR KAMTHE PLOT NO.17/11, SAVITRI BUNGLOW, MADHU SANCHAY SOCIETY, KARVE NAGAR, PUNE 411052 PAN: APXPK0778D APPELLANT RESPONDENT / ORDER THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER D ATED 29-01-2016 PASSED BY THE CIT(A), PUNE-10, PUNE IN RELATIO N TO THE ASSESSMENT YEAR 2008-09. 2. THE ONLY ISSUE RAISED IN THIS APPEAL IS AGAINST THE DELETION OF ADDITION OF RS.3,12,53,920 MADE BY THE ASSESSING OFFICER (AO) AS SHORT TERM CAPITAL GAIN AND RS.2,63,95,026 AS LONG TERM CAPITAL GAIN. 3. SUCCINCTLY, THE FACTUAL SCENARIO OF THE CASE IS THAT THE ASSE SSEE FILED HIS RETURN DECLARING TOTAL INCOME OF RS.2,94,330/-. THE AO NOTED THAT THE ASSESSEE ENTERED INTO TWO DEVELOPMENT AGREEME NTS ASSESSEE BY SHRI KISHOR PHADKE REVENUE BY SHRI S.P. WALIMBE DATE OF HEARING 12-05-2021 DATE OF PRONOUNCEMENT 17-05-2021 ITA NO.699/PUN/2016 AMIT MURLIDHAR KAMTHE 2 FOR CERTAIN LAND AT SR.NO.7/1/2/1/1 AT VARALE, TAL. MULSHI, DIS TRICT PUNE WITH M/S. SAMRAT BUILDERS AND DEVELOPERS ON 25.01.200 8 & 29.02.2008 FOR A CONSIDERATION OF RS.2.80 CRORE AND RS .4.20 CRORE RESPECTIVELY. NO CAPITAL GAIN ARISING FROM SUCH TRANSFER OF LANDS WAS DECLARED BY THE ASSESSEE. ON BEING CALLED UPON TO E XPLAIN THE POSITION, THE ASSESSEE SUBMITTED THAT THE LAND IN QUESTION WAS SUBJECT TO URBAN LAND (CEILING & REGULATION) ACT, 1976 (HEREINAFTER CALLED THE ULC ACT), AND AN AREA OF 22596.80 SQ.MTRS. WAS DECLARED AS SURPLUS LAND OUT OF THE TOTAL LAND AS PER THE ABOVE TWO AGREEMENTS. PURSUANT TO SUCH ORDER UNDER THE ULC ACT , THE LAND WAS TRANSFERRED IN THE NAME OF GOVERNMENT OF MAHARA SHTRA. THEREAFTER, THE ASSESSEE APPROACHED THE HONBLE BOMBAY HIGH COURT FOR DELETION OF THE GOVERNMENTS NAME FROM 7/12 EXTR ACT. THAT IS HOW, THE ASSESSEE SUBMITTED THAT NEITHER THE LAND IN QU ESTION WAS TRANSFERRED TO M/S. SAMRAT BUILDERS AND DEVELOPERS PURS UANT TO THE AGREEMENTS NOR ANY POSSESSION OF SUCH LAND WAS GIVEN . THE AO REJECTED THE ASSESSEES CLAIM BY OBSERVING THAT THE DEVELOPM ENT AGREEMENTS MADE BY THE ASSESSEE WERE DULY REGISTERED WITH THE ADDL. REGISTRAR, MABL, WHICH INDICATED THAT THE ASSESSEE HAD TRANSFERRED THE RIGHTS IN THE LAND TO M/S. SAMRAT BUILDERS AND DEVELOPERS WITHIN THE MEANING OF SECTION 2(47)(V) OF THE INC OME- ITA NO.699/PUN/2016 AMIT MURLIDHAR KAMTHE 3 TAX ACT, 1961 (HEREINAFTER ALSO CALLED THE ACT). TAKING THE COGNIZANCE OF THE PROVISIONS OF SECTION 53A OF THE TRANSF ER OF PROPERTY ACT READ WITH SECTION 2(47)(V) OF THE ACT, THE A O HELD THAT PARTING WITH THE POSSESSION OF THE LAND IN FAVOUR OF M/S. SA MRAT BUILDERS AND DEVELOPERS AND ALSO RECEIVING A PART OF THE AG REED CONSIDERATION, AMOUNTED TO `TRANSFER UNDER THE ACT. THER EAFTER, HE COMPUTED SHORT TERM CAPITAL GAIN AND LONG TERM CAPITAL GAIN ACCORDINGLY AND INCLUDED THE SAME IN THE TOTAL INCOME OF THE ASSESSEE. DURING THE COURSE OF THE FIRST APPELLATE PROCEE DINGS, THE ASSESSEE, INTER ALIA, SUBMITTED COPIES OF CANCELLATION AGREEMENTS DATED 20.04.2013 OF THE EARLIER TWO AGREEMENTS DATED 25.01 .2008 AND 29.02.2008 MADE WITH M/S. SAMRAT BUILDERS AND DEVELOPER S. SINCE THIS EVIDENCE CAME INTO EXISTENCE AFTER THE PASSING OF TH E ASSESSMENT ORDER, THE LD. CIT(A) SENT THE SAME TO AO AND INVITED HIS COMMENTS. IN THE REMAND REPORT DATED 31.12.2014, T HE AO CAME TO HOLD THAT SUBSEQUENT CANCELLATION DEEDS WERE NOT DECISIVE QUA THE INCOME-TAX PROCEEDINGS FOR THE YEAR UNDER CONSIDERATION AS THE `TRANSFER TOOK PLACE DURING THE YEAR UNDER CONSIDERATION U /S 2(47)(V) OF THE ACT, THEREBY REQUIRING THE INCLUSION OF CAP ITAL GAIN IN THE TOTAL INCOME. THE LD. CIT(A) GOT CONVINCED WITH THE ASSESS EES ITA NO.699/PUN/2016 AMIT MURLIDHAR KAMTHE 4 SUBMISSIONS AND ORDERED TO DELETE THE ADDITIONS, AGAINST WHICH, THE REVENUE HAS COME UP IN APPEAL BEFORE THE TRIBUNAL. 4. WE HAVE HEARD BOTH THE SIDES THROUGH VIRTUAL COURT AND G ONE THROUGH THE RELEVANT MATERIAL ON RECORD. IN ORDER TO DECIDE THE ISSUE IN APPEAL, IT WOULD BE APT TO HAVE A GLANCE AT THE FACTUAL PA NORAMA OF THE CASE IN A LITTLE MORE ELABORATE MANNER. THE ASSESS EE ENTERED INTO THE FIRST AGREEMENT WITH M/S. SAMRAT BUILDERS AND DEVELOPERS ON 25.01.2008 FOR DEVELOPMENT OF 1H 60R LAND. THE LAND , SUBJECT MATTER OF THE AGREEMENT, WAS SOURCED BY THE ASSESSEE IN TH REE LOTS, NAMELY, THE FIRST 80R LAND ON 22.07.1992, NEXT 40R ON 10. 12.1994 AND LAST 40R ON 24.04.1998 FROM DABHADE FAMILY BY REGIS TERED SALE DEEDS. A COPY OF THE AGREEMENT IN VERNACULAR LANGUAGE A LONG WITH ITS ENGLISH TRANSLATION HAS BEEN PLACED ON RECORD. CLAUSE 2 OF THE AGREEMENT STATES THAT THE VENDOR (I.E. THE ASSESSEE) HAS ASSIGNED THE RIGHTS OF DEVELOPMENT TO THE DEVELOPER. CLAUSE 4 OF TH E AGREEMENT STATES THAT: AS A PART OF THIS DEVELOPMENT AGREEM ENT, VENDOR HAS GIVEN RIGHT AND LICENSE TO THE DEVELOPER TO ENTER INTO THE SAID PROPERTY AS A LICENSEE. PARA 3 OF THE PREAMBLE OF THE AGREEMENT CLEARLY STATES THAT THE VENDOR AND THE CO-OWNER DHABHADE FAMILIES HAD FILED RETURNS U/S 6(1) OF ULC ACT AND VIDE AN ORDER PASSED BY THE COMPETENT AUTHORITY, THE VENDOR AND CO- ITA NO.699/PUN/2016 AMIT MURLIDHAR KAMTHE 5 OWNER HAVE BEEN DECLARED AS HOLDERS OF EXCESS LAND 22 596.80 SQ.MTRS. IT HAS ALSO BEEN MENTIONED THAT AN APPEAL HAS BEEN FILED AGAINST SUCH ORDER, WHICH IS PENDING ADJUDICATION. AS PER TH IS AGREEMENT, TOTAL CONSIDERATION UNDER CLAUSE 3 HAS BEEN STATE D TO BE RS.2.80 CRORE. IT IS FURTHER MENTIONED THAT A SUM OF RS.1 1 LAKHS, RS.20 LAKHS AND RS.1 CRORE WAS PAID TO THE ASSESSEE VID E CHEQUES DATED 13.12.2007, 14.01.2008 AND 25.01.2008 RESPECTIVE LY. THE BALANCE AMOUNT WAS AGREED TO BE PAID WITHIN STIPULATED PERIOD. THUS, IT IS CLEAR FROM THE AGREEMENT THAT THE DEVELOPER WAS ALLOWED TO ENTER INTO THE PROPERTY AS A LICENSEE AND NOT AS AN OWNER AND FURTHER A PART OF SUCH PIECE OF LAND STOOD DECLARED AS EX CESS LAND UNDER THE ULC ACT AT THE MATERIAL TIME. 5. THE SECOND AGREEMENT DATED 29.02.2008 WAS ENTER ED INTO BETWEEN M/S. SAMRAT BUILDERS AND DEVELOPERS ON ONE HAND AN D THE MEMBERS OF DABHADE FAMILY ON THE OTHER WITH THE ASSESSEE AS A CONSENTING PARTY FOR DEVELOPMENT OF 2H 41R LAND FOR A TOTA L CONSIDERATION OF RS.4.08 CRORE. THE SOURCE OF 2H 41R L AND CONSISTED OF 40R LAND ACQUIRED BY THE ASSESSEE FROM DABHADE FAMIL Y MEMBERS BY MEANS OF A SEPARATE DEVELOPMENT AGREEMENT DA TED 16.03.2007 AND REMAINING 2H 1R LAND ACQUIRED BY THE ASSE SSEE FROM DABHADE FAMILY UNDER A REGISTERED DEVELOPMENT AGREEM ENT ON ITA NO.699/PUN/2016 AMIT MURLIDHAR KAMTHE 6 18.02.2008. THUS, TOTAL AREA OF TWO PARCELS OF PLOTS COME S TO 2H 41R WHICH THE ASSESSEE GAVE FOR DEVELOPMENT. AS THE PR OPERTY WAS, IN FACT, NOT EARLIER TRANSFERRED IN THE NAME OF ASSESSEE, TH E SECOND AGREEMENT WITH M/S. SAMRAT BUILDERS AND DEVELOPERS WAS ENTE RED WITH DABHADE FAMILY MEMBERS AND THE ASSESSEE AS A `CONS ENTING PARTY. A COPY OF THE AGREEMENT IN VERNACULAR LANGUAGE A LONG WITH ITS ENGLISH TRANSLATION HAS BEEN PLACED ON RECORD. CLAUSE 2 OF THE AGREEMENT STATES THAT THE VENDOR HAS: ASSIGNED THE RIGHTS O F DEVELOPMENT TO THE DEVELOPER. CLAUSE 4 OF THE AGREEMENT S TATES THAT: AS A PART OF THIS DEVELOPMENT AGREEMENT, THE VENDOR HA S GIVEN A RIGHT AND LICENSE TO THE DEVELOPER TO ENTER INTO THE SA ID PROPERTY AS A LICENSEE. PARA 7 OF THE PREAMBLE PART OF THE AGREEMENT CLEARLY STATES THAT THE VENDOR, PURCHASER AND THE CO- OWNER KAMATHE HAD FILED RETURNS U/S 6(1) OF ULC ACT AND V IDE AN ORDER PASSED BY THE COMPETENT AUTHORITY THE VENDOR AND CO -OWNER HAVE BEEN DECLARED AS HOLDERS OF EXCESS LAND 22596.80 SQ.MTRS. IT HAS ALSO BEEN MENTIONED THAT AN APPEAL HAS BEEN FILED AGAINS T SUCH ORDER, WHICH IS PENDING ADJUDICATION. AS PER THIS AGREEMENT, TOTAL CONSIDERATION UNDER CLAUSE 3 HAS BEEN STATED AS RS.4.08 C RORE. IT IS FURTHER MENTIONED THAT A SUM OF RS.7 LAKHS WAS PAID TO THE A SSESSEE VIDE CHEQUE DATED 03.03.2008. THE BALANCE AMOUNT WAS A GREED TO ITA NO.699/PUN/2016 AMIT MURLIDHAR KAMTHE 7 BE PAID WITHIN STIPULATED PERIOD. THUS, IT IS CLEAR FROM THIS AGREEMENT ALSO THAT THE DEVELOPER WAS ALLOWED TO ENTER INTO THE PROPERTY AS A LICENSEE AND NOT AS AN OWNER AND FURTHER A PART OF SUCH PIECE OF LAND STOOD DECLARED AS EXCESS LAND UNDER THE ULC ACT AT THE MATERIAL TIME. 6. GOING FURTHER, THE WRIT PETITION FILED BY THE ASSESSEE AG AINST THE ORDER UNDER THE ULC ACT WAS DISMISSED BY THE HONBLE BOMB AY HIGH COURT AFTER THE REPEAL OF ULC ACT. THE EARLIER DECLARE D EXCESS LAND OF 22596.80 SQ.MTRS., WHICH STOOD TRANSFERRED IN THE NAME OF GOVT. OF MAHARASHTRA INTO 7/12 EXTRACT ON 09.08.2007, GOT R EVERTED SOMEWHERE IN 2009-10 AND THE NAME OF THE GOVERNMENT OF MAHARASHTRA WAS REMOVED. 7. IN THE MEANTIME, CERTAIN DIFFERENCES CROPPED UP BE TWEEN M/S. SAMRAT BUILDERS AND DEVELOPERS ON ONE HAND AND THE ASSES SEE AND DABHADE FAMILY ON THE OTHER. WHEN THE DISPUTE WAS GOING ON BETWEEN THE ASSESSEE AND M/S. SAMRAT BUILDERS AND DEVELOPER S, THE ASSESSEE TRANSFERRED 80R LAND, OUT OF THE LAND WHICH WAS SUBJECT MATTER OF THE EARLIER AGREEMENT WITH M/S SAMRAT BUILDERS, TO AKASH ERECTORS PVT. LTD., IN JUNE, 2010 FOR RS.1.00 CRO RE BY MEANS OF A REGISTERED SALE DEED. A SUM OF RS.40.50 LAKHS WAS PAID TO THE ASSESSEE THROUGH TWO CHEQUES AND THE REMAINING AMOUNT WA S AGREED ITA NO.699/PUN/2016 AMIT MURLIDHAR KAMTHE 8 TO BE PAID IN DUE COURSE. EVENTUALLY ON 20.04.2013, BOTH TH E AGREEMENTS DATED 25.01.2008 AND 29.02.2008 WERE CANCE LLED AND TWO SEPARATE REGISTERED CANCELLATION DEEDS WERE EXECUTED. SIMULTANEOUS WITH THE CANCELLATION DEEDS, A NEW REGISTERED SALE DEED WAS ALSO EXECUTED TRANSFERRING TOTAL AREA OF 4H 1R LA ND COLLECTIVELY BY THE ASSESSEE, DABHADE FAMILY MEMBERS AND M /S AKASH ERECTORS PVT. LTD. TO THE `EVENTUAL BUYERS: SH. RAJEND RA BHOSALE AND SH. VIKAS SHINDE FOR A TOTAL CONSIDERATION OF RS. 4.15 CRORE WITH REGISTRATION ENTRY 1985/2013. THROUGH A PURCHAS E DEED DATED 20.04.2013, PRECEDING THE REGISTERED SALE DEED OF TH E SAME DATE, THE EVENTUAL BUYERS - RAJENDRA BHOSALE AND VIKAS SH INDE - PAID SUM OF RS.1.50 CRORE TO DABHADE FAMILY, RS.50 LAKH S TO AKASH ERECTORS PVT. LTD. AND RS.2.15 CRORE TO KAMTHE FAMILY IN LIE U OF THE TOTAL TRANSFER OF 4H 1R LAND TO THEM. 8. THE ABOVE NARRATION OF FACTS CLEARLY DISCERNS THA T THE ASSESSEE ENTERED INTO TWO AGREEMENTS WITH M/S. SAMRAT BUILDERS AND DEVELOPERS FOR DEVELOPMENT OF 4H 1R LAND IN 2008. THE DE VELOPER WAS ALLOWED TO ENTER THE PROPERTY MERE AS A LICENSEE AN D NOT AS AN OWNER. THE LAND WAS SUBJECT OF LITIGATION UNDER THE ULC ACT A T THAT POINT OF TIME INASMUCH AS A PART OF THE TOTAL LAND WAS EARLIER HELD BY THE COMPETENT AUTHORITY TO BE EXCESS LAND AND AS SUCH, THE SAME ITA NO.699/PUN/2016 AMIT MURLIDHAR KAMTHE 9 WAS RECORDED IN THE NAME OF GOVERNMENT OF MAHARASHTRA, WHICH COULD NOT HAVE BEEN VALIDLY TRANSFERRED TO SAMRAT BUILDERS. THE ASSESSEE TRANSFERRED A PIECE OF SUCH LAND IN THE YEAR 20 10, AFTER GETTING CLEARANCE OF THE TITLE, TO M/S AKASH ERECTORS PVT. LTD. T HE DEVELOPMENT AGREEMENTS OF THE YEAR 2008 WERE CANCELLED IN THE YEAR 2013, WHEN A FINAL REGISTERED SALE DEED WAS EXECUTED TRANSFERRING TOTAL OF 4H 1R LAND JOINTLY BY THE THREE PARTIES TO RAJENDRA BHOSALE AND VIKAS SHINDE ON 20.04.2013. 9. THE AO HAS TAKEN COGNIZANCE OF THE DEFINITION OF TRANSFER U/S 2(47)(V) OF THE ACT READ WITH SECTION U/S 53A OF TRANSFER OF PROPERTY ACT TO HOLD THAT `TRANSFER TOOK PLACE IN THE YEAR 20 08 ITSELF. THIS SECTION PROVIDES THAT 'TRANSFER' IN RELATION TO A CA PITAL ASSET, INCLUDES `(V) ANY TRANSACTION INVOLVING THE ALLOWING OF THE POSSESSION OF ANY IMMOVABLE PROPERTY TO BE TAKEN OR RETAIN ED IN PART PERFORMANCE OF A CONTRACT OF THE NATURE REFERRED TO IN SECTION 53A OF THE TRANSFER OF PROPERTY ACT, 1882 (4 OF 1882). WE HAVE NOTED ABOVE THAT THE DEVELOPER WAS ALLOWED TO ENTER THE PROPE RTY ONLY AS LICENSEE. WHEN TITLE TO A PART OF SUCH PROPERTY ITSELF WAS DISPUTED AND IT VESTED WITH GOVERNMENT OF MAHARASHTRA AT THE TIME OF THE AGREEMENTS IN 2008 BECAUSE OF THE ORDER OF THE C OMPETENT AUTHORITY UNDER THE ULC ACT, THERE COULD HAVE BEEN NO QUES TION OF ITA NO.699/PUN/2016 AMIT MURLIDHAR KAMTHE 10 ALLOWING THE DEVELOPER ANY POSSESSION FOR THE ENJOYMENT OF PROPERTY AS ITS OWNER. IF THERE WAS NO TRANSFER OF POSSE SSION AT THE MATERIAL TIME, THE CASE OF THE AO INVOKING SECTION 53A OF THE TPA TO BRAND THE TRANSACTION AS A `TRANSFER U/S 2(47)(V), AU TOMATICALLY FAILS. 10. THE HONBLE APEX COURT IN CIT VS. BALBIR SINGH MAINI (2017) 398 ITR 531 (SC) CONSIDERED A CASE IN WHICH THE ASSESSEES WERE MEMBERS OF PUNJABI COOPERATIVE HOUSING BUILDING SOCIETY LTD. A JOINT DEVELOPMENT AGREEMENT WAS ENTERED INTO BETWEEN OWNER, UNDER WHICH, IT WAS AGREED THAT THE DEVELOPERS WOULD UNDERTAKE TO DEVELOP LAND OWNED AND REGISTERED IN NA ME OF SOCIETY. THE AO HELD THAT SINCE PHYSICAL AND VACANT POSSESSIO N HAD BEEN HANDED OVER UNDER THE JDA AND HENCE IT AMOUNTED TRANSFER WITHIN MEANING OF SECTIONS 2(47)(II), (V) AND (VI) OF THE AC T. THE TRIBUNAL UPHELD ORDER OF THE AO AND THE HONBLE HIGH COURT HELD THAT TRANSACTIONS ENVISAGED AS TRANSFER EXIGIBLE TO TAX BY RE FERENCE TO SECTION 2(47)(V) OF THE ACT READ WITH SECTION 53-A OF THE TRANSFER OF PROPERTY ACT. WHEN THE MATTER CAME UP BEFOR E THE HONBLE APEX COURT, IT, INTER ALIA, HELD THAT READING OF JDA WOULD SHOW THAT OWNER CONTINUED TO BE THE OWNER THROUGHOUT AGRE EMENT, AND HAD AT NO STAGE PURPORTED TO TRANSFER RIGHTS AKIN TO OWN ERSHIP TO ITA NO.699/PUN/2016 AMIT MURLIDHAR KAMTHE 11 DEVELOPER. IT FURTHER WENT ON TO HOLD THAT INCOME FROM CAPITAL GAIN ON A TRANSACTION WHICH NEVER MATERIALIZED WAS, AT BEST, HYPO THETICAL INCOME. AS THE ENTIRE TRANSACTION OF DEVELOPMENT ENVISAGED IN THE JDA FELL THROUGH FOR WANT OF PERMISSIONS, IT WAS HELD THAT NO PROFITS OR GAINS AROSE FROM TRANSFER OF A CAPITAL ASSET SO AS TO ATTRACT SECTIONS 45 AND 48 OF THE INCOME TAX ACT. 11. THE FACTUAL PANORAMA OF THE EXTANT CASE UNDER CO NSIDERATION IS ALMOST SIMILAR. FIRSTLY, NO POSSESSION WAS GIVEN TO THE DEVE LOPER UNDER THE JDA AS AN OWNER. SECONDLY, A PART OF THE LAND AT THE MATERIAL TIME IN 2008 VESTED IN THE GOVERNMENT OF MAHARASHTRA . THIRDLY, THE TRANSACTION ADMITTEDLY FELL THROUGH AND A PART OF THE LAND WAS EVENTUALLY SOLD TO M/S AKASH ERECTORS PVT. LTD. IN 201 0 AND THE REMAINING PART TO THE `FINAL BUYERS IN THE YEAR 2013, ALL THE PARTIES BEING AT ARMS LENGTH. IF THE TRANSFER DID NOT TAKE P LACE IN THE ASSESSMENT YEAR 2008-09 UNDER CONSIDERATION, THERE WAS N O QUESTION OF ANY CAPITAL GAIN ARISING THERE FROM IN SUCH YEAR. WE, THE REFORE, APPROVE THE VIEW POINT OF THE LD. CIT(A) BY HOLDING THAT NO TR ANSFER TOOK PLACE IN THE YEAR AND HENCE NO CAPITAL GAIN WAS CHARGE ABLE TO TAX. 12. THE LD. AR SUBMITTED THAT THE ASSESSEE OFFERED CAPITA L GAIN IN ITS RETURN OF INCOME FOR THE A.Y. 2014-15 WHEN 4H 1R LAND WAS ITA NO.699/PUN/2016 AMIT MURLIDHAR KAMTHE 12 TRANSFERRED ON 20.04.2013 TO RAJENDRA BHOSALE AND VIKAS SHINDE VIDE REGISTERED SALE DEED. HE STATED THAT THE AO HAS MADE PR OTECTIVE ADDITION IN THAT ASSESSMENT AND THE ASSESSEE HAS NOT DENIED TH E TAXABILITY ON SUBSTANTIVE BASIS IN SUCH LATER YEAR, I.E. 2014-15 . OUR ATTENTION WAS ALSO DRAWN TOWARDS ASSESSMENT ORDER PASSED F OR THE A.Y. 2014-15, A COPY OF WHICH HAS BEEN PLACED ON PAGE 260 ONWARDS OF PAPER BOOK. THIS ASSESSMENT ORDER DATED 20 .12.2016 CLEARLY RECORDS THAT ADDITIONS OF LONG TERM AND SHORT TERM CA PITAL GAINS WERE MADE IN THE ASSESSMENT FOR THE A.Y. 2008-09; TH E CIT(A) DELETED THE ADDITION AND; THE APPEAL AGAINST WHICH FILED BEFORE THE TRIBUNAL IS PENDING. THEREAFTER, IT HAS BEEN R ECORDED THAT HOWEVER, TO KEEP THE ISSUE ALIVE AS PER PARA 5 DISCUSSED ABOVE, ASSESSMENT ORDER PASSED ON THE PROTECTIVE BASIS ON THIS ISSU E. 13. HAVING HELD THAT NO `TRANSFER TOOK PLACE IN THE YEA R UNDER CONSIDERATION AND HENCE NO CAPITAL GAIN AROSE, THE NATURAL COROLLARY IS THAT THE `TRANSFER TOOK PLACE IN SOME OTHER YEAR(S) AND THE RESULTANT CAPITAL GAINS SHOULD BE CHARGED TO TAX IN SUCH OTHER YEARS. THE CASE OF THE ASSESSEE IS THAT THE `TRANSFER TOOK PLACE IN THE YEAR 2013, WHEN IT TRANSFERRED THE ENTIRE LAND TO THE EVENTUAL BUY ERS AND WAS RIGHTLY OFFERED FOR TAXATION IN SUCH LATER YEAR, FOR WH ICH PROTECTIVE ASSESSMENT HAS ALSO BEEN MADE BY THE AO. HOWEV ER, WE ITA NO.699/PUN/2016 AMIT MURLIDHAR KAMTHE 13 FIND THAT 80R LAND WAS TRANSFERRED BY THE ASSESSEE TO AKAS H ERECTORS PVT. LTD. IN THE MONTH OF JUNE, 2010, WHEN ULC ACT WAS R EPEALED AND THE NAME OF THE GOVERNMENT OF MAHARASHTRA WAS REMOV ED FROM 7/12 EXTRACT BETWEEN 2009 AND 2010. WHEN THE ASSESSEE TR ANSFERRED 80R LAND TO AKASH ERECTORS PVT. LTD., BY MEANS OF A REGISTE RED SALE DEED, IT BECAME CHARGEABLE TO TAX PRO TANTO IN THE PREVIOUS YEAR RELEVANT TO THE A.Y. 2011-12 AS IT FELL WITHIN THE DEFINITION OF TH E TERM `TRANSFER. THE LD. AR CANDIDLY ACCEPTED THAT NO CAPITA L GAIN WAS OFFERED FOR SUCH ASSESSMENT YEAR. IN VIEW OF THE ` TRANSFER TAKING PLACE IN SUCH YEAR TO THAT EXTENT, IT IS HELD THAT THE RE SULTANT CAPITAL GAIN ARISING ON THE TRANSFER OF 80R LAND TO AKASH ER ECTORS PVT. LTD. IN THE YEAR 2010 SHOULD BE CHARGED TO TAX ON SU BSTANTIVE BASIS IN THE ASSESSMENT FOR THE A.Y. 2011-12 SUBJECT TO THE PROVISIONS OF CHAPTER IV-E. 14. AS REGARDS THE BALANCE TRANSFER TAKING PLACE IN TH E A.Y. 2014- 15 AS PER THE ASSESSEES OWN VERSION, WHEN HE TRANSFER RED THE REMAINING PROPERTY (AFTER EXCLUDING 80R LAND TRANSFERRED TO AKASH ERECTORS PVT. LTD.) TO THE EVENTUAL BUYERS, NAMELY, SH. RA JENDRA BHOSALE AND SH. VIKAS SHINDE PURSUANT TO TRANSFER OF LAND IN THE YEAR 2013 ALONG WITH DABHADE FAMILY AND AKASH ERECTORS PVT. LTD., THE CAPITAL GAIN SHOULD BE CHARGED TO TAX ON SUBSTANTIVE BASIS IN THE ITA NO.699/PUN/2016 AMIT MURLIDHAR KAMTHE 14 A.Y. 2014-15. IN DOING SO, THE AO WILL TAKE INTO CONSIDERATION ALL THE AMOUNTS RECEIVED EARLIER FROM SAMRAT BUILDERS AND DEVE LOPERS AND THEN FROM SH. RAJENDRA BHOSALE AND SH. VIKAS SHINDE. NEEDLESS TO SAY, THE AO WILL PROVIDE ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE IN DETERMINING THE CORRECT AMOUNT OF CAPITAL GAINS FOR THE A.YS. 2011-12 AND 2014-15. 15. BEFORE PARTING, WE WANT TO CLARIFY THAT THE ISSUE UN DER CONSIDERATION IS THE TAXABILITY OR OTHERWISE OF THE CAPITAL GAIN IN TH E YEAR UNDER CONSIDERATION. ORDINARILY, THE MATTER SHOULD HAV E RESTED WITH OUR ANSWER IN FAVOUR OF THE ASSESSEE FOR THE YEAR U NDER CONSIDERATION. SINCE BOTH THE PARTIES HAVE EXTENSIVELY ARGUED TH E ISSUE OF TAXABILITY IN THE LATER YEAR ON PROTECTIVE BASIS AND S UCH A DISCUSSION IS, IN FACT, A CONTINUATION OF THE IMPUGNED TRANSA CTION FROM THE A.Y. 2008-09 CULMINATING IN SUCH LATER YEAR(S), W E HAVE DEALT WITH IT IN A LIMITED WAY. 16. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH MAY, 2021. SD/- SD/- (PARTHA SARATHI CHAUDHURY) (R.S.SYAL) JUDICIAL MEMBER VI CE PRESIDENT PUNE; DATED : 17 TH MAY, 2021 GCVSR ITA NO.699/PUN/2016 AMIT MURLIDHAR KAMTHE 15 / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. THE CIT(A), PUNE-10, PUNE 4. 5. 6. THE PCIT-2, PUNE DR, ITAT, A BENCH, PUNE / GUARD FILE. / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECR ETARY , / ITAT, PUNE DATE 1. DRAFT DICTATED ON 12-05-2021 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 13-05-2021 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. DATE OF UPLOADING ORDER SR.PS 8. FILE SENT TO THE BENCH CLERK SR.PS 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK 10. DATE ON WHICH FILE GOES TO THE A.R. 11. DATE OF DISPATCH OF ORDER. *