CHANDRAKANT M ZAVERI, MUMBAI V. ITO (IT) 2(1), MUMBAI

ITA 7686/MUM/2011

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 71633 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 31-10-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 14-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MAYUR SHAH
• Keywords: Capital asset; Opportunity of being heard; Cost of acquisition; Corroborative evidences

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C , BENCH, MUMBAI , BEFORE SHRI H.L.KARWA , PRESIDENT & SHRI N.K.BILLAIYA , AM ITA N O. 7686 / MUM/ 20 1 1 ( ASSESSMENT YEAR : 20 0 7 - 0 8 ) MR. CHANDRAKANT M. ZAVERI, 16/17, LAKHANI TOWERS, 1 ST BABULNATH CROSS LANE, CHOWPATTY, MUMBAI - 07 VS. ITO (IT) 2(1), MUMBAI - 38 PAN/GIR NO. : A A CPZ 8852 D ( APPELLANT ) .. ( RESPONDENT ) /ASSESSEE BY : SHRI MAYUR SHAH /REVENUE BY : SHRI SANJEEV JAIN DATE OF HEARING : 31 ST DATE OF PRONOUNCEMEN T : 31 ST OCTOBER, 2013 O R D E R PER N.K.BILLAIYA , A.M : THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST THE ORDER OF CIT (A) - 11 , MUMBAI, DATED 13 - 9 - 2011 PERTAINING TO A.Y.2007 - 08 . 2 . THE SOLE GRIEVANCE OF THE ASSESSEE IS THAT THE CIT(A) ERRED IN HOLDING THAT THE AO WAS JUSTIFIED IN CONSIDERING THE SURPLUS ON CANCELLATION OF FLAT BOOKING AS INCOME FROM OTHER SOURCES AT RS. 1,57,000/ - AS AGAINST INCOME FROM CAPITAL GAINS. 3 . DURING THE COURSE OF THE SCRUTINY ASSESSMENT PROCEEDINGS, THE AO NOTICED THAT THE ASSESSEE HAS MADE A SELF DECLARATION WHEREIN IT IS STATED THAT HE HAS PURCHASED A FLAT FOR RS. 4,31,750/ - AS PER THE ITA NO. 7686 /1 1 2 ALLOTMENT LETTER GIVEN BY THE BUILDER. THE AO FURTHER NOTICED THAT THE ASSESSEE HAS CANCELLED THE SAID ALLOTMENT AND REQUES TED THE DEVELOPERS TO REFUND THE AMOUNT PAID AGAINST THE SAID FLAT. IT WAS FURTHER OBSERVED THAT THE ASSESSEE HAS RECEIVED THE AMOUNT ALONG WITH THE COMPENSATION OF RS. 1,57,000/ - . THE ENTIRE TRANSACTION HAS BEEN SHOWN AS RESULTING INTO A LONG TERM CAPITAL GAINS OF RS. 49,650/ - AFTER TAKING INDEXED COST OF ACQUISITION. THE AO DID NOT ACCEPT THIS SELF DECLARATION OF THE ASSESSEE ON THE GROUND THAT THERE IS NO DEED OF TRANSFER AGREEMENT FOR TRANSFERRING THE RIGHT IN CAPITAL ASSET. THE AO WAS OF THE FIRM BELIEF THAT THE ASSESSEE HAS RECEIVED 1,57,000/ - OVER AND ABOVE THE BOOKING AMOUNT OF RS. 4,31,750/ - . THEREFORE, THE ADDITIONAL AMOUNT RECEIVED BY THE ASSESSEE CANNOT BE TREATED AS CAPITAL GAIN. THE AO WENT ON TO TREAT THIS AMOUNT AS INCOME UNDER THE HEAD INCOME F ROM OTHER SOURCES. 4 . THE ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A), BUT WITHOUT ANY SUCCESS. THE CIT(A) OBSERVED THAT THE ASSESSEE HAS NEITHER FILED ANY COPY OF ALLOTMENT LETTER NOR ANY AGREEMENT FOR BOOKING OF FLAT. THE CIT(A) FURTHER OBSERVED THA T THE ASSESSEE HAS ALSO NOT FILED ANY EVIDENCE IN RELATION TO THE SURRENDER OF THE FLAT. THE ASSESSEE HAS ALSO NOT FILED ANY DETAIL IN RESPECT OF THE PAYMENT OF BOOKING AMOUNT AND THE RECEIPT OF THE CANCELLATION OF BOOKING. AGGRIEVED BY THIS, THE ASSESSEE IS BEFORE US. ITA NO. 7686 /1 1 3 5 . LEARNED COUNSEL FOR THE ASSESSEE REITERATED WHAT HAS BEEN SUBMITTED BEFORE THE LOWER AUTHORITIES. IT IS THE SAY OF THE COUNSEL THAT THE ASSESSEE HAS BEEN SHOWING THE FLAT BOOKED IN ITS BALANCE SHEET YEAR AFTER YEAR. IT IS THE SAY OF THE COUNSEL THAT THE ASSESSEE HAS BOOKED 15 FLATS AND THE LONG TERM CAPITAL LOSS SHOWN DURING THE YEAR UNDER CONSIDERATION IS A RESULT OF THE SURRENDER OF ONE OF THESE FLATS. THEREFORE, THE ASSESSEE HAS VERY RIGHTLY COMPUTED THE SURPLUS RECEIVED ON CANCELLATIO N OF THE BOOKING UNDER THE HEAD CAPITAL GAINS. 6. PER CONTRA , LEARNED DR STRONGLY SUPPORTED THE FINDINGS OF THE LOWER AUTHORITIES. 7 . WE HAVE CAREFULLY PERUSED THE ORDER S OF THE LOWER AUTHORITIES AND THE MATERIAL EVIDENCES BROUGHT ON RECORD IN THE FORM OF A PAPER BOOK. A PERUSAL OF THE BALANCE - SHEETS FILED BY THE ASSESSEE FOR THE YEAR ENDING MARCH, 2000, 2001, 2002 & 2003 SHOW THAT THE ASSESSEE HAS SHOWN THE AMOUNT PAID TO MANI DEVELOPERS UNDER THE HEAD LOANS/DEPOSITS. THE SAME IS THE POSITION FOR THE YEAR ENDING MARCH, 2004. ONLY IN THE BALANCE - SHEET OF 2005 & 2006, THE ASSESSEE HAS SHOWN THE AMOUNT UNDER THE HEAD LO AN /DEPOSITS AS FLAT BOOKING DEPOSITS. THEREFORE, FROM THE BALANCE SHEET, IT IS NOT COMING OUT AS TO WHETHER THE ASSESSEE HAS GIVEN LOAN/DE POSITS OR FLAT BOOKING AMOUNT, THOUGH ONUS IS UPON THE ASSESSEE TO BRING COGENT MATERIAL EVIDENCE ON RECORD TO PROVE THAT THE AMOUNT HAS BEEN GIVEN FOR THE BOOKING OF FLATS. IT IS ALSO A FACT THAT THE ASSESSEE HAS NOT FILED ANY DETAIL IN RESPECT OF ITA NO. 7686 /1 1 4 THE PAY MENT FOR BOOKING FLATS NOR ANY PURCHASE AGREEMENT HA S BEEN FILED. THE ASSESSEE HAS ALSO NOT FILED ANY DETAIL IN RESPECT OF THE CANCELLATION OF THE FLAT BOOKING. CONSIDERING ALL THESE FACTS, WHICH NEED TO BE VERIFIED BY THE AO, WE RESTORE THIS ISSUE BACK TO THE FILES OF THE AO FOR DE NOVO ASSESSMENT. THE ASSESSEE IS DIRECTED TO FILE ALL THE DETAILS RELATING TO BOOKING OF FLAT WITH SUPPORTING EVIDENCES, THE ASSESSEE IS ALSO DIRECTED TO FILE ALL THE DETAILS RELATING TO THE CANCELLATION OF BOOKING ALONG WITH SU PPORTING EVIDENCES. THE ASSESSEE IS ALSO TO JUSTIFY THE AMOUNT SHOWN IN THE BALANCE SHEET AS TO WHETHER IT IS LOAN, ADVANCE OR DEPOSIT?. THE AO IS DIRECTED TO VERIFY ALL THESE DETAILS AFTER GIVING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 8 . RESULTANT LY , APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 31/10/ 2013 . SD/ - ( ) ( H.L.KARWA ) SD/ - ( ) ( N.K.BILLAIYA ) / PRESIDENT / ACCOUNTANT MEMBER MUMBAI ; DATED : 31/10 / 2013 /PKM , PS COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT ITA NO. 7686 /1 1 5 2. / THE RESPONDENT. 3. / THE CIT(A) , MUMBAI. 4. / CIT 5. / DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// / BY ORDER, ( ASSTT. REGISTRAR) / ITAT, MUMBAI