KOTHARI SANJAY MANILAL, HUF,AHMEDABAD V. THE DCIT, CIRCLE-3(1)(1), AHMEDABAD

MA 16/AHD/2025

AI Insights

The case revolves around a dispute concerning the sale consideration received by the assessee, Kothari Sanjay Manilal, HUF, for relinquishing rights in land to two societies. The original ITA No. 698/Ahd/2024 decision dated 08.11.2024 determined the total consideration as Rs. 10,85,28,620/-, based on the societies' resolutions. The assessee filed a Miscellaneous Application (M.A No.16/Ahd/2025) claiming that the Tribunal overlooked a clause in the resolutions about adjusting outstanding loans against the sale consideration. However, the Tribunal found that the resolutions were duly considered and that the payments were explicitly stated to be made without any adjustments for outstanding loans.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 472686 (ITAT-AHMEDABAD)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 13-03-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2018-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KAVAN LIMBASIYA
• Assessee Lawyers: BANDISH SOPARKAR
• Keywords: Capital Gains

Judgement Text

" आयकर अपीलȣय अͬधकरण, अहमदाबाद Ûयायपीठ , अहमदाबाद । IN THE INCOME TAX APPELLATE TRIBUNAL “ A” BENCH, AHMEDABAD ] BEFORE SHRI TR SENTHIL KUMAR, JUDICIAL MEMBER And SHRI NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER M.A No.16/Ahd/2025 in आयकर अपील सं./ITA No. 698/AHD/2024 Ǔनधा[रण वष[/Asstt. Year: 2018-19 Kothari Sanjay Manilal, HUF Sushil-Suraj, Lane No.17, 385/A, Satyagrah Chhawani, B/h.Hotel Court Yard Marriot, Ramdev Nagar Cross Road, Satellite, Amedabad-380015. PAN: AAAHK7059K बनामVs . The D.C.I.T, Circle 3(1)(1), Ahmedabad. (अपीलाथȸ /Appellant ( Ĥ×यथȸ /Respondent) Assessee by : Shri Bandish Soparkar, with Shri Parin Shah, ARs Revenue by : Shri Kavan Limbasiya, Sr.DR सुनवाई कȧ तारȣख/Date of Hearing : 28/02/2025 घोषणा कȧ तारȣख /Date of Pronouncement: 13/03/2025 आदेश/O R D E R PER NARENDRA PRASAD SINHA, AM: This Miscellaneous Application is filed by the assessee with a request to modify the order of this Tribunal in ITA No.698/Ahd/2024 dated 08.11.2024 for A.Y 2018-19. 2. Shri Bandish Soparkar, the Ld.AR of the assessee explained that ground no.4, taken by the assessee regarding sale-consideration received on M.A No.16/Ahd/2025 ITA No.698/Ahd/2024 Asst. Year 2018-19 2 relinquishing of right in land in favour of the societies, was adjudicated in para nos.6 to 11 of the order dated 08.11.2024. The Ld.AR submitted that the observation of the Tribunal in para no.11 was as under: “…11. It is thus found that as per resolution passed by the two societies each member was to be paid the amount as mentioned in the resolution for relinquishing their individual and common rights upon the land of the propery of the society, in favour of the society. Accordingly, the assessee had received Rs. 5,94,29,861/- from New Chhatra Chhaya CHSL and Rs. 4,90,98,759/- from New Chhaya CHSL. Thus the total consideration receivable by the assessee from the two societies was Rs.10,85,28,620/-. There was no mention in the resolutions that the payments as agreed upon will be made after adjusting the outstanding loan advanced by the members to the society. In the absence of any stipulation in the resolutions that the outstanding loan of the members would be adjusted from the payments as agreed upon, the contention of the assessee that only the net amount (after adjusting the outstanding loan) should be considered as the sale consideration, can't be accepted. The resolutions made it explicitly clear that the total amount of Rs. 10,85,28,620/- was the consideration received by the assessee for relinquishment of its rights in the lands in favour of the societies. Accordingly, the AO is directed to take the amount of Rs.10,85,28,620/- as the sale consideration for computation of capital gains on the relinquishment of its right in lands, in favour of the societies. The ground taken by the assessee is partly allowed.” 3. The Ld. AR submitted that the Hon’ble Tribunal had observed in para no.11 that there was no such resolution that the loan repayments as agreed upon will be adjusted first and that this finding was factually incorrect. In this regard he submitted that assessee had placed resolution of society in the paper book at page 141 (Free English Translation at page 361) wherein there was clear mention regarding repayment of loans from members. The Ld. AR submitted that this document was not considered by the Tribunal through oversight and, therefore, the findings as recorded by the Tribunal in para 11 was requested to be modified. M.A No.16/Ahd/2025 ITA No.698/Ahd/2024 Asst. Year 2018-19 3 6. Per Contra, Shri Kavan Limbasiya, Sr.DR submitted that Tribunal had duly considered the resolution brought on record by the assessee in the paper book and that the relevant portion of the resolution was also reproduced in para no.9 and 10 of the order. The Ld. Sr. Dr submitted that the observation as recorded by the Tribunal in para no.11 was after duly considering the resolution and that there was no mistake in the order of the Tribunal. 7. We have carefully considered the rival submissions. The issue involved in ground no.4 raised by the assessee was about sale-consideration received by the assessee on relinquishing of rights in land in favour of two societies. The AO had considered the sale consideration at Rs.12,31,77,000/-. The contention of the assessee was that the consideration received by the assessee from the two societies was after adjustment of outstanding loans advanced by the assessee to the two societies and, therefore, only the net amount of consideration should be considered as the actual sale consideration. In this regard, the assessee had filed a ledger copy account of two societies wherein the outstanding loan advanced by the assessee to the societies was adjusted. However, no independent confirmation of the two societies regarding the actual amount of sale consideration paid for relinquishing of the rights and whether the consideration received was after adjustment of outstanding loan amounts, was filed. Therefore, in the order of the Tribunal dated 08.11.2024 the actual sale consideration was decided on merits on the basis of the resolution of the two societies. The assessee had filed a copy of resolutions which was in Gujarati language and subsequently an English translation of the resolutions was also filed by the assessee, which were duly considered in the order dated 08.11.2024. In fact, the relevant clauses of resolution of the two societies were duly reproduced in para no.9 and para no.10 of the order. M.A No.16/Ahd/2025 ITA No.698/Ahd/2024 Asst. Year 2018-19 4 And after considering the contents of the resolution, a categorical finding was given in para no.11 of the order dated 08.11.2024 that “there was no mention in the resolutions that the payments as agreed upon will be made after adjustment of outstanding loan advanced by the members to the society.” The assessee has been unable to point out any such clause in the resolution of the two societies which contradicts the above finding. The reliance on the ledger account of the societies, wherein such adjustment was made by the assessee, can’t be held as a conclusive evidence. The treatment given by the assessee in his own account does not change the nature or character of payment, until and unless it is supported by an independent third party evidence. 8. Under the circumstances, we do not find any mistake in the order. The contention of the assessee that the resolution of the society was not considered in the order dated 08.11.2024, is not found correct. The resolution of the two societies were not only duly considered but the relevant parts were also reproduced in para no.9 & 10 of the order. The miscellaneous application filed by the assessee is bereft of any merit and same is liable to be dismissed. 9. In the result, the Miscellaneous Application filed by the assessee is dismissed. Order pronounced in the Open Court on 13th March, 2025 at Ahmedabad. Sd/- Sd/- (TR SENTHIL KUMAR) JUDICIAL MEMBER (NARENDRA PRASAD SINHA) ACCOUNTANT MEMBER (True Copy)) अहमदाबाद/Ahmedabad, Ǒदनांक/Dated 13/03/2025 M.A No.16/Ahd/2025 ITA No.698/Ahd/2024 Asst. Year 2018-19 5 Manish, Sr. PS आदेश कȧ ĤǓतͧलͪप अĒेͪषत/Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant 2. Ĥ×यथȸ / The Respondent. 3. संबंͬधत आयकर आयुÈत / Concerned CIT 4. आयकर आयुÈत ) अपील ( / The CIT(A)-(NFAC) 5. ͪवभागीय ĤǓतǓनͬध , आयकर अपीलȣय अͬधकरण , राजोकट/DR,ITAT, Ahmedabad, 6. गाड[ फाईल / Guard file. आदेशानुसार/ BY ORDER, स×याͪपत ĤǓत //True Copy// सहायक पंजीकार (Asstt. Registrar) आयकर अपीलȣय अͬधकरण, ITAT, Ahmedabad "