AMOL DAYARAM THAKER, MUMBAI V. I.T.O. WD. 18(1)(3), MUMBAI

ITA 8371/MUM/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83621 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 8 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-08-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 06-08-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 09-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PITAMBAR DAS
• Assessee Lawyers: VIMAL PUNMIYA
• Keywords: Sale consideration of property below Jantri Value; Capital asset
• Section: 50C

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE S/SHRI B.R.BASKARAN (AM) AND VIVEK VARMA, (JM) .. , , ./I.T.A. NO.8371/MUM/2011 ( / ASSESSMENT YEAR : 2008-09) AMOL DAYARAM THAKER, ST-1, GROUND FLOOR, ADHYARU IND. ESTATE, S J MARG, LOWER PAREL, MUMBAI-400013 / VS. INCOME TAX OFFICER, WARD 18(1)(3), PIRAMAL CHAMBER, MUMBAI-400013 ( ! / APPELLANT) .. ( '# ! / RESPONDENT) ./ $% ./PAN/GIR NO. :AAAPT3914E ! & / APPELLANT BY : SHRI VIMAL PUNMIYA '# ! ' & /RESPONDENT BY : SHRI PITAMBAR DAS ( ) ' *+ / DATE OF HEARING : 11.8.2014 ,- ' *+ /DATE OF PRONOUNCEMENT : 27.8.2014 / O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 12-09-2011 PASSED BY LD CIT(A)-29, MUMBAI AND IT RELATES TO TH E ASSESSMENT YEAR 2008-09. 2. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LD CIT(A) IN CONFIRMING THE ASSESSMENT OF CAPITAL GAIN BY TAKING CONSIDERATION AS RS.78,98,000/- U/S 50C OF THE ACT, WHEN THE ASSESSEE HAD NOT TRANSFERRED THE PROPERTY AS BENEFICIAL OWNER. 3. THE FACTS RELATING TO THE ISSUE ARE STATED IN BR IEF. THE ASSESSEE HAD PURCHASED A LAND SITUATED AT TAKAI VILLAGE, KHALAPU R TALUKA, DIST. RAIGAD ON 22.09.1999. SUBSEQUENTLY, ON 06.10.2005, THE ASSES SEE ENTERED INTO A I.T.A. NO.2784/MUM/2011 2 DEVELOPMENT AGREEMENT WITH A DEVELOPER NAMED M/S MA NNAT PROPERTIES PVT LTD (HEREINAFTER MPPL). THE DEVELOPMENT AGREEMENT WA S REGISTERED WITH THE SUB- REGISTRAR ON 19.03.2006. AS PER THE AGREEMENT, THE ASSESSEE WAS TO RECEIVE RS.10.00 LAKHS FROM M/S MPPL. ACCORDING TO THE ASSESSEE, HE RECEI VED THE CONSIDERATION CITED ABOVE IN TWO INSTALLMENTS VIZ., RS.3.00 LAKHS ON 06.10.2005 AND RS.7.00 LAKHS ON 25.10.2005. 4. SUBSEQUENTLY, ON 28.12.2007, THE ASSESSEE EXEC UTED A SALE DEED IN FAVOUR OF SHRI DILIP KUMAR MEHTA AT THE INSTANCE OF M/S MP PL FOR A SALE CONSIDERATION OF RS.25.00 LAKHS. IN THE ABOVE SAID REGISTERED SALE DEED M/S MPPL WAS SHOWN AS CONFIRMING PARTY. THOUGH THE SALE CONSIDERATION WAS RS.25.00 LAKHS, THE STAMP DUTY WAS PAID ON A VALUE OF RS.78,98,000/-. IN THE RETURN OF INCOME, THE ASSESSEE DISCLOSED A CAPITAL GAIN OF RS.2,33,455/- BY TAKING THE SALE CONSIDERATION AT RS.10.00 LAKHS. HENCE, BY INVOKI NG THE PROVISIONS OF SEC. 50C, THE AO ADOPTED THE SALE CONSIDERATION AT THE STAMP DUTY VALUE OF RS.78,98,000/- AND ACCORDINGLY COMPUTED LONG TERM CAPITAL GAIN AT RS.71,30,055/-. EVEN THOUGH THE ASSESSEE SUBMITTED THAT THE PROPERTY WAS TRANSFERRED BY THE ASSESSEE IN FY 2005-06 RELEVANT TO THE ASSESSMENT Y EAR 2006-07 AND HENCE THE CAPITAL GAINS HAS TO BE ASSESSED IN THAT YEAR ONLY, YET THE AO REJECTED THE SAID CLAIM BY HOLDING THE SAME AS AN AFTER THOUGHT. SIM ILARLY THE CONTENTION OF THE ASSESSEE THAT THE SALE DEED WAS EXECUTED BY THE ASS ESSEE IN FAVOUR OF SHRI DILIP KUMAR MEHTA AT THE INSTANCE OF M/S MRPL AND HENCE T HE CAPITAL AGAIN IS REQUIRED TO BE ASSESSED IN THE NAME OF THE ABOVE CO MPANY WAS ALSO REJECTED BY THE ASSESSING OFFICER. I.T.A. NO.2784/MUM/2011 3 5. BEFORE THE LD CIT(A) ALSO, THE ASSESSEE MADE I DENTICAL SUBMISSIONS, BUT THE SAME DID NOT FIND FAVOUR WITH THE FIRST APPELL ATE AUTHORITY. THE LD CIT(A) HELD THAT THE ASSESSEE ONLY SOLD THE PROPERTY AND M /S MRPL WAS ONLY A CONFIRMING PARTY. ACCORDINGLY, THE LD CIT(A) CONFI RMED THE ASSESSMENT ORDER. AGGRIEVED, THE ASSESSEE HAS FILED THIS APPEAL BEFOR E US. 6. THE LD A.R SUBMITTED THAT THE ASSESSEE HAD TR ANSFERRED THE PROPERTY, BY VIRTUE OF DEVELOPMENT AGREEMENT TO M/S MRPL DURING THE FINANCIAL YEAR 2005-06 RELEVANT TO THE ASSESSMENT YEAR 2006-07 FOR A CONSI DERATION OF RS.10.00 LAKHS. HE FURTHER SUBMITTED THAT THE ASSESSEE HAD RECEIVED THE ABOVE SAID SALE CONSIDERATION ALSO IN THAT YEAR. HOWEVER, SUBSEQUE NTLY M/S MRPL HAS TRANSFERRED ITS RIGHT TO M/S DILIP KUMAR MEHTA AND SINCE THE PROPERTY WAS STILL STANDING IN THE NAME OF THE ASSESSEE, THE SALE DEED WAS EXECUTED BY THE ASSESSEE AT THE INSTANCE OF M/S MRPL AND THE SALE C ONSIDERATION OF RS.25.00 LAKHS MENTIONED IN THE SALE DEED WAS RECEIVED BY M/ S MRPL ONLY. HE FURTHER SUBMITTED THAT THE DEVELOPMENT AGREEMENT AS WELL AS THE SALE DEED CLEARLY STATE THAT THE POSSESSION OF THE PROPERTY WAS HANDED OVER TO M/S MRPL IN FY 2005-06 ITSELF. ACCORDINGLY, HE SUBMITTED THAT THE ASSESSE E HAD EXECUTED THE SALE DEED DURING THE YEAR AS A NAME-HOLDER AND HENCE THE ASSE SSEE IS NOT LIABLE TO CAPITAL GAIN TAX DURING THE YEAR UNDER CONSIDERATION. ON T HE CONTRARY, THE LD D.R STRONGLY PLACED RELIANCE ON THE ORDERS PASSED BY T HE TAX AUTHORITIES. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE RECORD. THE UNDISPUTED FACT REMAINS THAT THE ASSESSEE HAD ENTER ED INTO A DEVELOPMENT AGREEMENT WITH M/S MRPL AND THE SAME WAS REGISTERED IN FY 2005-06 ONLY. THE SUBMISSION OF THE ASSESSEE THAT THE POSSESSION WAS HANDED OVER TO M/S MRPL AT I.T.A. NO.2784/MUM/2011 4 THAT POINT OF TIME IS EVIDENT FROM THE RECITALS MAD E IN THE SALE AGREEMENT DATED 28-12-2007. 8. IN THIS REGARD, THE PROVISIONS OF SEC. 2(47) W ITH DEFINES THE WORD TRANSFER ARE RELEVANT HERE. FOR THE SAKE OF CONVENIENCE, WE EXTRACT BELOW THE PROVISIONS OF CLAUSE (V) AND (VI) OF SEC. 2(47) OF THE ACT:- 2(47) TRANSFER, IN RELATION TO A CAPITAL ASSET, INCLUDES, ...... (V) ANY TRANSACTION INVOLVING THE ALLOWING OF THE POSSESSION OF ANY IMMOVABLE PROPERTY TO BE TAKEN OR RETAINED IN PART PERFORMANCE OF A CONTRACT OF THE NATURE REFERRED TO IN SEC. 53A OF T HE TRANSFER OF PROPERTY ACT, 1882 (4 OF 1882); OR (VI) ANY TRANSACTION (WHETHER BY WAY OF BECOMING A MEMBER OF, OR ACQUIRING SHARES IN A CO-OPERATIVE SOCIETY, COMPANY OR OTHER ASSOCIATION OF PERSONS OR BY WAY OF AGREEMENT OR ANY ARRANGEMEN T OR IN ANY OTHER MANNER WHATSOEVER) WHICH HAS THE EFFECT OF TRANSFER RING, OR ENABLING THE ENJOYMENT OF, ANY IMMOVABLE PROPERTY. IN THE INSTANT CASE, BY VIRTUE OF DEVELOPMENT AGRE EMENT, THE ASSESSEE HAS HANDED OVER THE POSSESSION OF THE IMPUGNED LAND DUR ING THE FY 2005-06. HENCE, IN TERMS OF SEC.2(47)(V) AND 2(47)(VI) OF TH E ACT, THE TAXABILITY OF CAPITAL GAIN HAS TO BE CONSIDERED IN AY 2006-07. OUR VIEW GETS SUPPORT FROM THE DECISION RENDERED BY HONBLE BOMBAY HIGH COURT IN T HE CASE OF CHATURBHU DWARKADAS KAPADIA VS. CIT ( 260 ITR 491). 9. ACCORDINGLY, WE SET ASIDE THE ORDER PASSED BY LD CIT(A) AND DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION MADE DURIN G THE YEAR UNDER CONSIDERATION. I.T.A. NO.2784/MUM/2011 5 10. IN THE RESULT, THE APPEAL FILED BY THE ASSE SSEE IS ALLOWED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 27TH AUG , 2014. ,- ( . / 0 27TH AUG, 2014 - ' 1) 2 SD SD ( / VIVEK VARMA) ( . . / B.R. BASKARAN ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER ( ) MUMBAI: 27TH AUG,2014. . . ./ SRL , SR. PS !'#$% &%'# / COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT 2. '# ! / THE RESPONDENT. 3. ( 4* ( ) / THE CIT(A)- CONCERNED 4. ( 4* / CIT CONCERNED 5. 51 '* 6 , + 6 , ( ) / DR, ITAT, MUMBAI CONCERNED 6. 17 8) / GUARD FILE. 9 ( / BY ORDER, TRUE COPY : $ (ASSTT. REGISTRAR) + 6 , ( ) /ITAT, MUMBAI