VEENA MILAN DALAL, MUMBAI V. DCIT (OSD-II) CR 7, MUMBAI

ITA 97/MUM/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3427 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2007-2008
• Appeal Filed On: 07-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M V RAJGURU
• Keywords: Tax effect
• Section: 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH F, MUMBAI BEFORE SHRI JASON P. BOAZ ACCOUNTANT MEMBER AND SHRI SANDEEP GOSAIN, JUDICIAL MEMBER ITA NO. 97/MUM/2015 (ASSESSMENT YEAR : 2007-08) VEENA MILAN DALAL, BHUPEN CHAMBERS, GROUND FLR., DALAL STREET, MUMBAI 400 023 PAN: AABPD 4089R ... APPELLANT VS. THE DCIT (OSD-II),CR-7, AAYKAR BHAVAN,M.K.ROAD, MUMBAI 400 020 ..... RESPONDENT ITA NO. 671/MUM/2015 (ASSESSMENT YEAR : 2007-08) THE DCIT , C.C. 4(4), AAYKAR BHAVAN,M.K.ROAD, MUMBAI 400 020 ... APPELLANT VS. VEENA MILAN DALAL, BHUPEN CHAMBERS, GROUND FLR., DALAL STREET, MUMBAI 400 023 PAN: AABPD 4089R .... RESPONDENT ASSESSEE BY : SHRI VIPUL JOSHI REVENUE BY : SHRI M.V.RAJGURU DATE OF HEARING : 17/08/2016 DATE OF PRONOUNCEMENT : 26/08/ 2016 2 ITA NO. 97& 671/MUM/2015 (ASSESSMENT YEAR : 2007-08) ORDER PER JASON P. BOAZ, A.M: THESE ARE CROSS APPEALS, BY REVENUE AND THE ASSES SEE DIRECTED AGAINST THE ORDER OF THE CIT(APPEALS)-40, MUMBAI DA TED 7/11/2014 FOR ASSESSMENT YEAR 2007-08, IN RESPECT OF THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT FOR ASSESSMENT YEAR 2007-08. ITA NO.671/MUM/2015 REVENUES APPEAL FOR A.Y. 2007 -08:- 2.1 THE GROUNDS OF APPEAL RAISED BY THE REVENUE ARE AS UNDER:- 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE LD. CIT(A) FAILED IN APPRECIATING THE FACT THAT THE ASSESSEE HAD CONCEALED THE INCOME FROM LONG TERM CAPITAL GAIN BY FURNISHING IN ACCURATE PARTICULARS BY WRONGLY CLAIMING EXEMPTION UNDER SECTION.54. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) FAILED TO APPRECIATE THE FACT THAT THE SAME LONG TERM CAPITAL GAIN WAS ALSO NOT OFFERED FOR TAXATION FOR A.Y.2009-10. 2.2 AT THE OUTSET THE LD. DEPARTMENTAL REPRESENTATI VE BROUGHT TO THE NOTICE OF THE BENCH THAT THE DISPUTED ISSUE WAS THE LEVY OF PENALTY IN RESPECT OF CAPITAL GAINS OF RS.43.50 LAKHS TAX FOR WHICH WAS BELOW THE MONETARY LIMIT OF RS.10.00 LAKHS. AS PER THE LATES T CBDT, CIRCULAR NO.21 OF 2015 DATED 10/12/2015, NEW GUIDANCE OF MONETARY LIMITS FOR FILING APPEALS BY THE DEPARTMENT HAVE BEEN ISSUED, WHEREBY THE TAX EFFECT FOR FILING OF APPEALS BEFORE THE ITAT HAS BEEN PRES CRIBED AT RS.10 LAKHS. IN THE AFORESAID CBDT CIRCULAR(SUPRA), IT HAS BEEN SPECIFICALLY CLARIFIED THAT THE SAID INSTRUCTIONS WOULD APPLY RETROSPECTIV ELY TO ALL PENDING APPEALS. 3 ITA NO. 97& 671/MUM/2015 (ASSESSMENT YEAR : 2007-08) 3. ACCORDINGLY, THE INSTANT APPEAL FILED BY THE REV ENUE IS NOT MAINTAINABLE AND IS DISMISSED IN-LIMINE. ASSESEES APPEAL FOR A.Y. 2007-08 IN ITA NO.87/MUM/2 015: 4.1 THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN THIS APPEAL READ AS UNDER:- 1.A. THE LEARNED COMMISSIONER OF INCOME TAX(APPEAL S)-40 MUMBAI [CIT(A)] ERRED IN CONFIRMING THE PENALTY LEVIED UNDER SECTIO N 271(1)(C) OF THE INCOME TAX ACT, 1961 (THE ACT) BY THE ASSESSING OFFICER IN RESPECT OF SALE OF GOA PROPERTY. 1.B. WHILE DOING SO, THE CIT (A) ERRED IN NOT CONSI DERING THE DETAILED WRITTEN SUBMISSION MADE BEFORE HIM. 1.C. IT IS SUBMITTED THAT IN THE FACTS AND IN LAW T HE CIT (A) FAILED TO APPRECIATE THAT THERE WAS NEITHER CONCEALMENT OF INCOME FOR TH E YEAR THEREBY ERRED IN CONFIRMING PENALTY LEVIED UNDER SECTION 271(1)(C) O F THE ACT BY THE ASSESSING OFFICER. 2. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, DELET E OR MODIFY ALL OR ANY OF THE ABOVE GROUNDS OF APPEAL. 4.2 THE LD. REPRESENTATIVE FOR THE ASSESSEE WAS HE ARD IN SUPPORT OF THE GROUNDS RAISED. THE LD. REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASESSEES APPEAL WAS IN RESPECT OF THE CON FIRMATION OF PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT IN RESPEC T OF ADDITION OF RS.21,31,720/- IN CONNECTION WITH THE CAPITAL GAINS ARISING ON ACCOUNT OF TRANSFER OF PROPERTY IN GOA IN THE YEAR UNDER CONSI DERATION AT PARAS 10 TO 14 OF THE IMPUGNED ORDER. IT IS SUBMITTED THAT THIS PENALTY WOULD NOT NOW SURVIVE FOR CONSIDERATION IN VIEW OF THE DECISI ON OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE ASSESSEES OWN CASE F OR THE ASSESSMENT YEAR 2007-08 IN ITA NO.7785/MUM/2012 DATED 13/1/200 6 WHEREIN ON 4 ITA NO. 97& 671/MUM/2015 (ASSESSMENT YEAR : 2007-08) APPEAL ON QUANTUM ADDITIONS, THE CO-ORDINATE BENCH CONSIDERED AND DECIDED THIS ISSUE OF CAPITAL GAINS ON TRANSFER OF PROPERTY IN GOA IN FAVOUR OF THE ASSESSEE AT PARAS 6 TO 12 THEREOF. IT IS PRAYED THAT IN VIEW OF THE ABOVE, THE PENALTY LEVIED IN RESPECT OF ADDI TION OF RS.21,31,720/- ON ACCOUNT OF CAPITAL GAINS ARISING ON TRANSFER OF GOA PROPERTY BE DELETED. THE LD. DEPARTMENTAL REPRESENTATIVE WAS ALSO HEARD. 4.3.1 WE HAVE HEARD BOTH THE LD. REPRESENTATIVE FOR THE ASSESSEE AND LD. DEPARTMENTAL REPRESENTATIVE IN THE MATTER AND P ERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD; INCLUD ING THE JUDICIAL PRONOUNCEMENTS CITED. WE FIND THAT, AS CONTENDED B Y THE LD. REPRESENTATIVE FOR THE ASSESSEE, THE CO-ORDINATE BE NCH OF THIS TRIBUNAL IN ITS ORDER IN ITA NO.7785/MUM/2015 DATED 13/01/20 16 IN THE ASSESSEES OWN APPEAL ON QUANTUM ADDITIONS FOR ASSE SSMENT YEAR 2007- 08 HAS DELETED THE ADDITION MADE IN RESPECT OF INCO ME FROM CAPITAL GAINS ON TRANSFER OF PROPERTY AT GOA; HOLDING AS UN DER AT PARAS 6 TO 13 OF THAT ORDER:- 6. GROUND NO.3, IS IN RESPECT OF TAXING CAPITAL GAI N IN RESPECT OF GOA PROPERTY. THE AO WHILE MAKING THE ASSESSMENT HAS OBSERVED THA T ASSESSEE RECEIVED RS. 30 LAKHS IN CONNECTION WITH THE TRANSFER OF PROPERT Y IN GOA AND AMOUNT WAS NOT OFFERED FOR TAX, THE ASSESSEE REPLIED THAT ONLY ADVANCE OF RS. 30 LAKHS WAS RECEIVED BY THE ASSESSEE IN THE ACCOUNTING YEAR ENDED ON 31.03.2007 AND NO FORMAL AGREEMENT WAS ENTERED FOR SALE AND CO NVEYANCE DEED WAS EXECUTED IN MARCH 2009, WHEN THE BALANCE AMOUNT OF RS. 1 LAKHS WAS RECEIVED AND THUS NO INCOME HAD ARISEN DURING THE Y EAR ENDED ON MARCH 2007, HOWEVER, THE AO OBSERVED THAT THE ASSESSEE HA S NOT DECLARED THE CAPITAL GAIN IN HER RETURN FOR AY-2009-10 IN SPITE OF THE FACT THAT TRANSACTION IS STATED TO HAVE BEEN COMPLETED IN FY-2008-09 ONLY AND COMPUTED IT TO BE TAXABLE IN AY-2007-08. 7. THE CIT(A) IN ITS ORDER WHILE DEALING THIS GROU ND HAS HELD THAT THE SALE- DEED HAS BEEN PREPARED ON A SUBSEQUENT DATE TO THE DATE OF SEARCH AND HENCE NOT RELIABLE AND THAT IN THE MEMO OF UNDERSTA NDING/ AGREEMENT, THE POSSESSION TO THE PURCHASER WAS ALREADY GRANTED ON RECEIPT OF ADVANCE OF RS. 5 ITA NO. 97& 671/MUM/2015 (ASSESSMENT YEAR : 2007-08) 30 LAKH. THE LD. CIT (A) FURTHER CONCLUDED THAT THE PROVISION OF SECTION 53A OF THE TRANSFER OF PROPERTY ACT THE POSSESSION WAS HAN DED OVER IN PART PERFORMANCE. 8. THE LD AR OF THE ASSESSEE WHILE ARGUING HAS DRA WN OUR ATTENTION IN RESPECT OF THE AGREEMENT, COPY OF WHICH PLACED ON R ECORD ON PAGE NO. 9 TO 23 OF PAPER BOOK. WE HAVE PERUSED THE AGREEMENT/MOU WHICH CONTAINED THE SIGNATURE OF ASSESSEE ONLY IN EACH AND EVERY PA GE AND THERE IS NO SIGNATURE OF PURCHASER, THIS AGREEMENT BEARS THE DA TE OF 31.03.2007, AND WAS ALLEGEDLY SIGNED THROUGH ATTORNEY/HUSBAND OF AS SESSEE SHRI MILAL B. DALAL IN FAVOUR OF SHRI JAGDIP SHARMA S/O RAJENDRA PAL SHARMA OF NAGPUR BUT, INTERESTINGLY THE AGREEMENT IS NOT SIGNED BY T HE PURCHASER, THOUGH IT WAS TYPED / WRITTEN ON A NON-JUDICIAL STAMP PAPER O F RS. 62,000/-. THE NON- JUDICIAL STAMP PAPER WERE PURCHASED IN THE NAME OF RAHUL SHARMA/RAJENDRA PAL SHARMA OF NAGPUR, ON CAREFUL SCRUTINY OF THE DO CUMENT, WE FOUND THAT THE MOU/AGREEMENT TO SALE IS NOT A CONCLUDED CONTRA CT BETWEEN THE ASSESSEE AND THE PURCHASER. THOUGH, THE ASSESSEE HA S ADMITTED TO HAVE RECEIVED A SUM OF RS. 30 LAKH ON 31.03.2007. 9. THE AO CONCLUDED THAT ASSESSEE ALLOWED THE POSS ESSION OF PROPERTY IN GOA TO THE PURCHASER, INFACT THERE IS NO EVIDENCE T O ESTABLISH THAT POSSESSION OF THE PROPERTY WAS TRANSFERRED TO THE SO-CALLED PU RCHASER. 10. INFACT, THE SALE-DEED WAS EXECUTED ON 25.03.2 009, AND AS PER SECTION 54 OF TRANSFER OF PROPERTY ACT, THE TITLE OF PROPERTIE S CONSIDERED TO BE TRANSFERRED ONLY ON THE EXECUTION OF REGISTERED SAL E-DEED. AND AS PER THE CONTENTS OF THE SALE-DEED, THE POSSESSION WAS HANDE D OVER TO THE PURCHASER ONLY ON 25.03.2009. THE CIT(A) WRONGLY CONCLUDED, T HAT THE SALE DEED HAS BEEN PREPARED ON A SUBSEQUENT DATE OF SEARCH AND NO T RELIABLE. 11.THE CIT(A) HAS NOT CONSIDERED THE CONTENTS OF TH E REGISTERED DOCUMENT RATHER GAVE MORE RELIANCE TO THE MEMORANDUM OF UNDE RSTANDING WHICH WAS INFACT NOT A CONCLUDED CONTRACT AND CANNOT BE CONSI DERED AS PROPERLY EXECUTED DOCUMENT AS PER THE PROVISIONS OF TRANSFER OF PROPERTY ACT, FURTHER, THE FINDING OF AO AS WELL AS CIT(A) THAT AS PER SEC TION 53A OF TRANSFER OF PROPERTY ACT, THIS WAS AMOUNTS TO TRANSFER ARE WRON G. 12. SECTION 53A OF TRANSFER OF PROPERTY ACT DEALS W ITH THE PRINCIPAL OF PART PERFORMANCE IN RESPECT OF TRANSFER OF PROPERTY, WHI CH A PLEA OF DEFENCE BY A PURCHASER IN THE EVENT THE PURCHASER IS BEING DISPO SSESSED BY THE SELLER AND THUS THE PRINCIPLE ENVISAGED U/S 53A IS NOT APPLICA BLE AGAINST THE ASSESSEE, HENCE THIS GROUNDS OF APPEAL IS ACCEPTED AND THE FI NDING OF AO AND CIT(A) ARE SET-ASIDE. 13. SINCE THE TRANSFER OF PROPERTY IN GOA TOOK PLAC E ON 25.03.2009 AND THE REVENUE MAY TAKE APPROPRIATE LEGAL STEP TO INCLUDE THE TRANSACTION IN THE RELEVANT ASSESSMENT YEAR BY CONSIDERING THE TRANSFE R OF PROPERTY IN ACCORDANCE WITH THE PROVISIONS OF I.T. ACT. 6 ITA NO. 97& 671/MUM/2015 (ASSESSMENT YEAR : 2007-08) 4.3.2. IN VIEW OF THE DECISION OF THE CO-ORDINATE B ENCH IN THE ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2007-08, DELETING THE QUANTUM ADDITION IN RESPECT OF INCOME FROM CAPITAL GAINS ON TRANSFER OF PROPERTY IN GOA, THE PENALTY LEVIED UNDER SECTION. 271(1)(C) OF THE ACT IN THIS REGARD AT PARA-14 OF THE IMPUGNED ORDER WOULD NOT NOW SURVIVE FOR CONSIDERATION AND WE, THEREFORE, DELETE THE SAID PENALTY LEVIED U NDER SECTION. 271(1)(C) OF THE ACT. 5. IN THE RESULT, THE ASSESSEES APPEAL FOR ASSESSM ENT YEAR 2007-08 IS ALLOWED. 6. TO SUM UP, REVENUES APPEAL FOR ASSESSMENT YEAR 2007-08 IS DISMISSED AND THE ASSESSEES CROSS APPEAL IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 26 /08/2016 SD/- SD/- (SANDEEP GOSAIN) (JASON P. BOAZ) JUDICIAL MEMBER ACCOUNTANT ME MBER MUMBAI, DATED 26/08/2016 VM , SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT , 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI