J. OM PRAKASH, MUMBAI V. I.T.O. WARD 11(1)(2), MUMBAI

ITA 7237/MUM/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9050 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-12-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: J
• Next Hearing Date: 05-12-2012
• Assessment Year: 2002-2003
• Appeal Filed On: 25-10-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Gift; Reassessment proceedings

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH J BENCH BEFORE SHRI B.R.MITTAL(JUDICIAL MEMBER) AND SHRI RAJENDRA (ACCOUNTANT MEMBER) ITA NO.7237 & 7241/MUM/2011 ASSESSMENT YEARS: 2002-03 & 2006-07 J OM PRAKASH, SHIV PRATIMA, 12 TH N.S.ROAD, JVPD SCHEME, JUHU, MUMBAI-49 PA NO.AAHPM 0354 L ITO, WARD 11(1)(2), AAYAKAR BHAVAN, M.K. ROAD, MUMBAI (APPELLANT) VS. (RESPONDENT) APPELLANT BY : SHRI K.GOPAL RESPONDENT BY: SHRI RAKESH RANJAN DATE OF HEARING: 5 .12.2012 DATE OF PRONOUNCEMENT: 28 .12.2012 ORDER PER B.R.MITTAL, JM: THE ASSESSEE HAS FILED THESE TWO APPEALS FOR ASSES SMENT YEARS 2002-03 AND 2006-07 AGAINST SEPARATE ORDERS BOTH DATED 2.9.2011 OF LD CIT(A) -3, MUMBAI. 2. BOTH THE APPEALS ARE TIME BARRED BY 2 DAYS, BUT ASSESSEE HAS MOVED PETITIONS BOTH DATED 21.8.2012, DULY ACCOMPANIED BY AFFIDAVITS BY THE ASSESSEE, INTER ALIA, STATING THAT THE APPEALS FILED ARE WITHIN THE LIMI TATION PERIOD OF 60 DAYS AS PROVIDED IN THE INCOME TAX ACT . HENCE, THERE IS NO DELAY. LD AR ALSO REITERATED ABOVE FACTS AT THE TIME OF HE ARING. 3. HAVING CONSIDERED THE SUBMISSIONS OF LD REPRESEN TATIVES OF PARTIES, WE ARE OF THE CONSIDERED VIEW THAT THE DELAY IS ONLY T WO DAYS AND IN VIEW OF DECISION OF HONBLE ALLAHABAD HIGH COURT IN THE CA SE OF GANGA SAHAI RAM SWARUP AND ANOTHER VS. ITAT, 271 ITR 512 (ALL), WE CONDONE THE DELAY OF TWO DAYS AND PROCEED TO DECIDE THE APPEALS ON MERITS. 2 4. IN GROUND NO.1 OF BOTH THE APPEALS, ASSESSEE HAS DISPUTED THE ACTION OF LD CIT(A) IN UPHOLDING THE LEGAL VALIDITY OF THE PROCE EDINGS INITIATED U/S.148 OF THE ACT. 5. AT THE TIME OF HEARING, LD A.R. DID NOT PRESS FO R THIS GROUND. HENCE, GROUND NO.1 OF BOTH THE APPEALS IS DISMISSED AS NOT PRESSE D. 6. IN GROUND NO.2 OF BOTH THE APPEALS, ASSESSE HAS DISPUTED THE ACTION OF LD CIT(A) IN CONFIRMING THE ADDITION OF RS.2 LAKHS FOR ASSESS MENT YEAR 2002-03 AND RS.15 LAKHS FOR ASSESSMENT YEAR 2006-07 BEING COMPENSATION RECEIVED FROM THE SOCIETY FOR DAMAGES CAUSED BY HEAVY RAINS AND FLOODS AND ALSO RS.53,100 /- BEING VALUE OF GOLD COINS RECEIVED AS GIFTS FOR ASSESSMENT YEAR 2002-03. 7. BRIEFLY STATED THE RELEVANT FACTS ARE THAT THE A SSESSEE IS A MEMBER OF THE NEW INDIA COOPERATIVE HOUSING SOCIETY LTD.,(HEREINAFTER REFERRED THE SOCIETY) THE ASSESSEE RECEIVED RS.2,00,000 ON 20.9.2011 FROM THE SOCIETY TOWARDS FOR ASSESSMENT YEAR 2002-03 ON ACCOUNT OF COMPENSATION TOWARDS SUF FERING OF DAMAGES COST BY HEAVY RAINS AND FLOODS AS ALSO TOWARDS RENOVATION, REPAIR S AND BEAUTIFICATION OF THE BUILDING, TERMITE TREATMENT AND A GOLD COIN OF 10 TOLAS AMOUN TING TO RS.53,100/- ON 14.11.2001. FOR THE ASSESSMENT YEAR 2006-07 ALSO, ASSESSEE RECE IVED RS.15 LAKHS TOWARDS COMPENSATION ON ACCOUNT OF DAMAGES BY HEAVY RAINS A ND FLOOD. THE AO NOTICED THAT ABOVE RECEIPTS WERE NOT DISCLOSED BY THE ASSESSEE I N HIS RETURN OF INCOME FOR BOTH THE ASSESSMENT YEARS UNDER CONSIDERATION. THE AO WAS O F THE VIEW THAT THE INCOME HAS ESCAPED ASSESSMENT EXCEEDED RS.1,00,000 AND INITIAT ED REASSESSMENT PROCEEDINGS. IT WAS IN THIS BACKDROP THAT THE AO BROUGHT TO TAX THE AMOUNT OF COMPENSATION RECEIVED FROM THE SOCIETY IN BOTH THE ASSESSMENT YEARS UNDER CONSIDERATION AND ALSO BROUGHT TO TAX AS WELL THE VALUE OF GOLD COIN OF RS.53,100 FO R ASSESSMENT YEAR 2002-03. BEING AGGRIEVED, ASSESSEE FILED APPEALS BEFORE LD CIT(A) BUT WITHOUT ANY SUCCESS. HENCE, ASSESSEE IS IN FURTHER APPEALS BEFORE THE TRIBUNAL. 3 8. AT THE TIME OF HEARING, LD A.R. PRODUCED A COPY OF ORDER DATED 25.4.2012 OF THE TRIBUNAL IN THE CASE OF ASSESSEE IN I.T.A. NOS.7239 & 7240/M/2011 FOR ASSESSMENT YEARS 2004-05 AND 2005-06 AND SUBMITTED THAT THE TRIBUNA L BY FOLLOWING THE DECISION DATED 27.2.23012 IN THE CASE OF DCITVS. SHRI KARTIK M PAT EL IN I.T.A. NO.3911/M/2010, WHO IS ALSO THE MEMBER OF THE SAID SOCIETY I.E. NEW INDIA COOPERATIVE HOUSING SOCIETY LTD., HELD THAT THE AMOUNT OF COMPENSATION RECEIVED FROM THE SOCIETY BY THE MEMBERS TO COMPENSATE THE LOSS INCURRED DUE TO DEVASTATED RAIN OCCURRED CANNOT BE TREATED AS A BENEFIT IN THE NATURE OF PROFIT OR INCOME OF THE AS SESSEE AND, ACCORDINGLY, DECIDED THE ISSUE IN FAVOUR OF ASSESSEE. HOWEVER, IN RESPECT O F GOLD COIN OF 10 TOLAS AMOUNTING TO RS.53,100/- FOR ASSESSMENT YEAR 2002-03, LD A.R. SU BMITTED THAT SAME ISSUE IS NOT PRESSED FOR. HOWEVER, LD D.R. RELIED ON ORDERS OF AUTHORITIES BELOW. 9. WE HAVE CONSIDERED THE SUBMISSIONS OF LD REPRESE NTATIVES OF PARTIES AND ALSO PERUSED THE ORDERS OF AUTHORITIES BELOW. WE HAVE A LSO GONE THROUGH THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR S 2004-05 AND 2005-06(SUPRA). WE OBSERVE THAT THE ISSUE RELATING TO RECEIPT OF COMPE NSATION AMOUNT IS SQUARELY COVERED IN FAVOUR OF ASSESSEE, WHEREIN, ON SIMILAR FACTS, THE TRIBUNAL, INTER ALIA, HELD THAT AMOUNT DISTRIBUTED B Y THE SOCIETY TO THE MEMBERS TO COMPE NSATE THE LOSS INCURRED DUE TO DEVASTATING RAIN OCCURRED ON 26.6.2005, CANNOT TREA TED AS INCOME. RESPECTFULLY FOLLOWING THE SAID DECISION OF THE COORDINATE BENC H ON ABOVE ISSUE (SUPRA), WE ALLOW GROUND NO.2 OF APPEAL TAKEN BY ASSESSEE FOR THE A SSESSMENT YEARS 2002-03 IN PART AND ALLOW GROUND NO.2 OF APPEAL FOR ASSESSMENT YEAR 2006-07. 10. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON 28 TH DECEMBER, 2012 SD/- (RAJENDRA) ACCOUNTANT MEMBER SD/- (B.R. MITTAL) JUDICIAL MEMBER MUMBAI, DATED 28 TH DECEMBER, 2012 PARIDA 4 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS),3, MUMBAI 4. COMMISSIONER OF INCOME TAX, 11 , MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH J MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI