SHRI PANKAJ KATARIA, Ratlam V. THE DY. COMMISSIONER OF INCOME TAX Central Circle, Indore

ITSSA 8/IND/2016

• Counselvise Citation: [2016] 122 COUNSELVISE.COM (IT) 2220 (ITAT-INDORE)
• Duration Of Justice: 5 month(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 15-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 12-07-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 15-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJEEV VARSHNEY
• Assessee Lawyers: P D NAGAR
• Keywords: Unexplained cash credit

Judgement Text

IT(SS)A NO. 8/IND/2016 SHRI PANKAJ KATARIA 1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, JM & SHRI N.S. SAINI, AM IT(SS)A NO. 8/IND/2016 A.Y.2009-10 SHRI PANKAJ KATARIA RATLAM PAN ACFPK 5781K ::: APPELLANT VS DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE INDORE ::: RESPONDENT APPELLANT BY SHRI ANIL SATHE & SHRI P.D. NAGAR RESPONDENT BY SHRI RAJEEV VARSHNEY DATE OF HEARING 12.7.2016 DATE OF PRONOUNCEMENT 15.7.2016 O R D E R THIS IS AN APPEAL PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED CIT(A)-II, INDORE, DATED 23.12. 2015. 2. IN THIS APPEAL THE ONLY GRIEVANCE IS THAT THE LEARNE D CIT(A) ERRED IN CONCLUDING THAT THE TRANSACTION OF IT(SS)A NO. 8/IND/2016 SHRI PANKAJ KATARIA 2 ACQUISITION AS WELL AS RELINQUISHMENT OF RIGHT WAS NON E ST AND TREATING THE AMOUNT RECEIVED AGAINST RELINQUISHMENT O F TENANCY RIGHT OF RS. 37.50 LACS AS UNEXPLAINED CREDIT . 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABL E ON RECORD. WE FIND THAT THE LEARNED CIT(A) HAS HELD THAT AS BECAUSE IN THE MOU DATED 21.6.2002 IT WAS MENTIONED THAT THE AMOUNT OF RS. 2 LACS PAID BY THE ASSESSEE TO TH E ORIGINAL TENANT WAS IN RESPECT OF COST OF FURNITURE, F IXTURES AND GOOD-WILL, IT CANNOT BE HELD THAT THE ASSESSEE HAS ACQUIRED ANY TENANCY RIGHT. 4. WE FIND THAT THE RELEVANT PORTION OF THE MOU READS AS UNDER :- PARTY OF THE SECOND PART IS/ARE NOW WILLINGLY TO VACATE THE SAID ROOM DUE TO HIS/HER/THEIR OWN PROBLEMS/OTHER REASONS IS GIVING VACANT POSSESSION OF THE SAID ROOM TO SHRI/SMT. PANKAJ MADANLALJI FOR A SUM OF RS.200000/- (RUPEES TWO LACS ONLY) ONLY) BEING A IT(SS)A NO. 8/IND/2016 SHRI PANKAJ KATARIA 3 COST FOR FURNITURE, FIXTURES & GOODWILL OF THE SAID PREMISES. IN OUR CONSIDERED VIEW IT IS NOT DESIRABLE TO PICK A FEW WORDS FROM A SENTENCE AND TO INTERPRETE THE SAME TO ASCERTAIN THE MEANING OF THE COMPLETE AGREEMENT. A PERUSAL OF THE ABOVE-QUOTED CONTENTS SHOWS THAT THE VAC ANT POSSESSION OF THE PROPERTY, IN QUESTION, WAS GIVEN BY THE ORIGINAL TENANT TO THE ASSESSEE. THUS, IT CANNOT BE DIS PUTED THAT ON RECEIPT OF VACANT POSSESSION OF THE PROPERTY, IN QUESTION, THE ASSESSEE RECEIVED THE TENANCY RIGHT OF T HE PROPERTY. 5. THOUGH IT ALSO SHOWS THAT THE ENTIRE CONSIDERATION OF RS. 2 LACS WAS NOT ONLY FOR ACQUIRING TENANCY RIGHT. IT IS OBSERVED THAT CONSIDERATION OF RS.2 LACS WAS PAID FOR ACQUISITION OF TWO PROPERTIES, VIZ. FURNITURE AND FIX TURES AND GOODWILL I.E. TENANCY RIGHT. NOW SIMPLY BECAUSE SEPARATE CONSIDERATION FOR THE TWO PROPERTIES HAS NOT B EEN IT(SS)A NO. 8/IND/2016 SHRI PANKAJ KATARIA 4 SPECIFIED, IT CANNOT BE HELD THAT EITHER OF THE TWO P ROPERTIES WERE NOT ACQUIRED BY THE ASSESSEE. 6. IN THE ABSENCE OF SEPARATE CONSIDERATION BEING MENTIONED IN THE MOU, THE ASSESSING OFFICER IS REQUI RED TO APPROPRIATE THE TOTAL CONSIDERATION PAID TOWARDS BOTH THE PROPERTIES ON SOME REASONABLE BASIS. THEREFORE, WE SET ASIDE THE ORDERS OF THE LOWER AUTHORITIES AND DIRECT THE ASSESSING OFFICER TO RECOMPUTE THE LONG TERM CAPITAL GAINS DERIVED ON TRANSFER OF TENANCY RIGHT BY THE ASSESSEE I N THE LIGHT OF THE DISCUSSIONS MADE ABOVE AFTER ALLOWING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. THU S, THE APPEAL OF THE ASSESSEE IS ALLOWED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED . PRONOUNCED IN OPEN COURT ON 15 TH JULY, 2016 SD/- SD/- (D.T. GARASIA) (N.S. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER 15 TH JULY, 2016 IT(SS)A NO. 8/IND/2016 SHRI PANKAJ KATARIA 5 DN/- IT(SS)A NO. 8/IND/2016 SHRI PANKAJ KATARIA 6