ITO 34(1)(4), MUMBAI V. HOMAI HOMI SHROFF, MUMBAI

ITA 7387/MUM/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7244 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-04-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Assessment Year: 2012-2013
• Appeal Filed On: 15-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M C OMI NINGSHEN
• Assessee Lawyers: FALE E H BILIMORIA; FARUKH IRANI
• Section: 54F

Judgement Text

IN THE INC OME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI BEFORE SHRI R. C. SHARMA , AM & SH. SANDEEP GOSAIN, JM ./ I.T.A. NO 7387 /MUM/2016 ( / ASSESSMENT YEAR: 201 2 - 13 ) ITO 34 (1)(4 ) , R. NO. 106,1 ST FLOOR, PRATYAKSHAKAR BHAVAN, BKC BANDRA(EAST) , MUMBAI - 4000 51 / VS. MS. HOMAI HOMI SHROFF ADERBAD FLAT NO. 23, 24, HUGHES RD, MUMBAI - 400007 . ./ ./ PAN NO. AA FPS4218R ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI M. C. OMI NINGSHEN, DR / RESPONDENT BY : SHRI FARUKH IRANI AND SHRI FALEE H. BILIMORIA , AR / DATE OF HEARING : 17 .04 .1 8 / DATE OF PRONOUNCEMENT : 26 .04.18 / O R D E R PER SANDEEP GOSAIN, J UDICIAL MEMBER : THE P RESENT APPE AL FILED BY THE REVENUE IS AGAINST THE ORDER OF LD. CIT (APPEAL) 46, MUMBAI DATED 14 .09.16 F OR AY 20 1 2 - 13 ON THE GROUNDS MENTIONED HEREIN BELOW: - 2 I.T.A. NO. 7387 /MUM/201 6 MS. HOMAI HOMI SHROFF (I ) 'ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW LEARNED CIT(A) IGNORED THEFACT THAT, TO PROVE THE TRANSFER, THE ASSESSEE WAS FAILED TO PRODUCE ANY SALE AGREEMENT. THE ASSESSEE WAS NOT EXECUTED ANY SALE AGREEMENT FOR RELINQUISHMENT OF THE TENANCY RIGHTS WHICH IS MANDATORY FOR TRANSFER OF IMMOVA BLE PROPERTY. FURTHER, AN IRRECOVERABLE GENERA L POWER OF ATTORNEY' WAS FURNISHED BY THE ASSESSEE, WHICH WAS NEITHER NOTARIZED NOR REGISTERED. THE POWER OF ATTORNEY WAS SIGNED BY THE ASSESSEE AND JOINTLY FAMILY MEMBERS AND NOT EVEN SIGNED BY THE APPOINTEES I.E. PURCHASERS'. (II) ' ON THE FACTS AND CIRC UMSTANCES OF THE CASE AND IN LAW LEARNED CIT(A) ERRED IN ALLOWING THE BENEFIT TO THE ASSESSEE U/S. 54F OF I.T. ACT, 1961 WITHOUT APPRECIATING THE FACTS THAT, THE ASSESSEE FAILED TO PRODUCE ANY DOCUMENTARY EVIDENCE IN SUPPORT OF THE PROOF OF PURCHASE OF IMM OVABLE PROPERTY AND ANY NEXUS BETWEEN THE RECEIPT AMOUNT AND INVESTMENT AMOUNT'. (III) 'THE LD.CIT(A) HAS ALSO FAILED TO APPRECIATE THE FACT, THAT THE ASSESSEE HAS MA DE THE PAYMENT OF RS. 17,25,000/ - TO THE OTHER CO - TENANTS ON SELF MADE RECEIPTS WHICH IS N OT CONSIDERED AS GENUINE AS THE 3 I.T.A. NO. 7387 /MUM/201 6 MS. HOMAI HOMI SHROFF SAME WAS NOT REFLECTED IN THEIR RETURN OF INCOME WHICH ARE PLACED ON RECORDS.' (IV) 'THE APPELLANT PRAYS THAT THE ORDER OF THE LD CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE AO BE RESTORED' (V) 'THE APPELLANT CR AVES LEAVE TO AMEND OR ALTER ANY GROUND OR ADD A NEW GROUND' 2. THE B RIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND FILED ITS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION ON 26.07.12 DECLARING TOTAL INCOME AT RS. 3,45,921. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY AND AFTER SERVING STATUTORY NOTICES AND SEEKING REPLY OF THE ASSESSEE, ORDER OF ASSESSMENT U/S 143(3)WAS PASSED BY AO THEREBY DETER MINING TOTAL INCOME AT RS. 65,66,933/ - BY DISALLOWING THE CLAIM OF DEDUCTIO N U/S 54 OF RS. 64,80,000/ - AGGRIEVED BY THE ORDER OF AO , THE ASSESSEE PREFERRED THE APPEAL BEFORE LD. CIT AND THE LD. CIT (A) AFTER CONSIDERING THE CASE OF BOTH THE PARTIES PARTLY ALLOWED THE APPEAL FILED BY THE ASSESSEE. 4 I.T.A. NO. 7387 /MUM/201 6 MS. HOMAI HOMI SHROFF AGGRIEVED BY THE ORDER OF LD. CIT (A), THE REVENUE HAS FILED THE PRESENT APPEAL BEFORE US ON THE GROUNDS MENTIONED HEREINABOVE. GROUND NO. (I) TO (III) . 3. SINCE A LL THE GROUNDS RAISED BY THE REVENUE ARE INTER - RELATED AND INTER - CONNECTED AND RELATES TO CHALLENGING THE ORDER OF LD. CIT(A) IN IGNORING THE FACT THAT ASSESSEE WAS NOT EXECUTED ANY SALE AGREEMENT FOR RELINQUISHMENT OF THE TENANCY RIGHTS WHICH IS MANDATORY FOR TRANSFER OF IMMOVA BLE PROPERTY AND ASSESSEE FAILED TO PRODUCE ANY DOCUMENTARY EVIDENCE IN SUPPORT OF THE PROOF OF PURCHASE OF IMMOVABLE PROPERTY, T HEREFORE , WE THOUGHT IT FIT TO DECIDE ALL THE ABOVE GROUNDS OF THE PRESENT CONSOLIDATED ORDER. 4. WE HAVE HEARD THE COUNSEL FOR BOTH THE PARTIES AND WE HAVE ALSO PERUSED THE MATERIAL PLACED ON RECORD , JUDGMENT CITED BY BOTH THE PAR TIES AS WELL AS ORDERS PASSED BY THE REVENUE AUTHORITIES. W E FIND T HAT LD. CIT(A) PASSED A N ELABORATE ORDER THEREBY TAKING INTO CONSIDERATION THE DETAILS AND DOCUMENTS FILED BY THE ASSESSEE AND RIGHTLY COME TO THE CONCLUSION THAT ASSESSEE HAD RECEIVED CONSIDERATION FOR RELINQUISHING THE RIGHT SHE HAD ON 5 I.T.A. NO. 7387 /MUM/201 6 MS. HOMAI HOMI SHROFF THE PROPERTY I.E. FLAT NO. 7. T HIS RIGHT OVER THE PROPERTY WAS IN THE NATURE OF HER SHARE AS A TENANT ONLY. LD. CIT(A) HAS ALSO CONSIDERED VARIOUS DOCUMENTS INCLUDING COPY OF BANK ACCOUNT , ETC. IN ORDER TO CONCLUDE THAT THE ASSESSEE WAS RESIDENT OF THE ABOVE PROPERTY . EVEN THE P ROVISIONS OF SECTION 45 READ WITH SECTION 2 (4 7 ) OF THE I.T. ACT REQUIRES THAT CONSIDERATION RECEIVED FOR EXTINGUISHING ANY RIGHT U/S 2 ( 47 )(II) IS CAPITAL GAIN . AFTER CONSIDERING THE FACTS OF THE PRESENT CASE , WE FIND THAT THE CLAIM OF THE ASSESSEE WAS DISALLOWED ONLY ON THE GROUND THAT THE DOCUMENTS ON WHICH THE ASSESSEE WAS RELYING, WAS NOT REGISTERED. THE FACT THAT THE DOCUMENTS WAS NOT REGISTERED, CANNOT BE A GROUND TO DISALLOW, THE VERY RIGHT OF THE ASSESSEE. IN THIS RESPECT, LD. CIT(A) HAD RELIED UPON THE JUDGMENTS CONTAINED IN ITS ORDERS AND MORE PARTICULARLY THE JUDGMENT OF CHATURBHUJ DWARKADAS KAPADIA VRS. CIT (260 ITR 491) WHEREIN SUCH TRANSFER OF RIGHT IN THE PROPERTY WAS RECOGNIZED BY HONBLE JURISDICTIONAL HIGH COURT. LD. CIT(A) AFTER CONSIDERING THE ENTIRE FACTS HAD RIGHTLY CONCLUDED THAT ASSESSEE HAD ENJOYED A RIGHT OF POSSESSION 6 I.T.A. NO. 7387 /MUM/201 6 MS. HOMAI HOMI SHROFF WHICH WAS BY WAY OF TENANCY AND THE CONSIDERATION RECEIVED OF TRANSFER WAS RIGHTLY TAXED AS CAPITAL GAIN. OUR ATTENTION WAS ALSO DRAWN TOWARDS PAGE NO. 12 OF THE PAPER BOOK, WHICH IS A RECEIPT, REFLECTING THAT THE ASSESSEE HAD RECEIVED A SUM OF RS. 47,55,000/ - FOR THE TRANSFER OF TENANCY RIGHT IN RESPECT OF FLAT NO. 7. APART FROM ABOVE , OUR ATTENTION WAS ALSO DRAWN TOWARDS PAGE NO. 20 OF THE PAPER BOOK WHICH IS A SALE DEED OF FLAT NO. 13, EXECUTED IN FAVOUR OF THE ASSESSEE IN THE MONTH OF DECEMBE R 2011. THIS DOCUMENT GOES TO SHOW THAT THE ASSE SSEE HAD ALREADY INVESTED SUM OF R S. 48 LACS TOWARDS PURCHASE OF NEW PROPERTY WITHIN THE STIPULATED TIME AS ALLOWED UNDER THE ACT. T HEREFORE ASSESSEE WAS CORRECTLY FOUND ENTIT LED TO THE BENEFIT S OF SECTION 5 4F OF THE I.T. ACT . MOREOVER, N O NEW FACTS OR CONTRARY JUDGMENTS HAVE BEEN BROUGHT ON RECORD BEFORE US I N ORDER TO CONTROVERT OR REBUT THE FINDINGS SO RECORDED BY LD CIT (A) . THEREFORE, THERE ARE NO REASON S FOR US TO INTERFERE INTO OR DEVIATE FROM THE FINDINGS RECORDED BY THE LD. CIT (A). HENCE , WE ARE OF THE CONSIDERED 7 I.T.A. NO. 7387 /MUM/201 6 MS. HOMAI HOMI SHROFF VIEW THAT THE FIN DINGS SO RECORDED BY THE LD. CIT (A) ARE JUDICIOUS AND ARE WE LL REASONED. RESULTANTLY, THESE GROUND S RAISED BY THE REVENUE STANDS DISMISSED . GROUND NO. (IV) & (IV) 5. THESE GROUNDS RAISED BY THE REVENUE ARE GENERAL IN NATURE, THUS REQUIRES NO SPECIFIC ADJUDICATION. 6 . IN THE NET RESULT, THE APPEAL FILED BY THE REVENUE STANDS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH APRIL , 2018 SD/ - SD/ - ( R . C. SHARMA ) (SANDEEP GOSAIN) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; DATED : 26 . 04 .201 8 SR.PS . DHANANJAY 8 I.T.A. NO. 7387 /MUM/201 6 MS. HOMAI HOMI SHROFF / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F I LE / BY ORDER, . / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI