Prime Urban Development India Limited, Tiruppur V. ITO, Tiruppur

MA 108/CHNY/2013

• Counselvise Citation: [2014] 124 COUNSELVISE.COM (IT) 1813 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 27 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 07-04-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 21-03-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 10-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S DASGUPTA
• Assessee Lawyers: M V SWAROOP
• Keywords: Business income

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , B B ENCH, CHENNAI . . . , !' #$% , & $%' $( BEFORE DR. O.K. NARAYANAN, VICE-PRESIDENT AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER M.P .NO.108/MDS/2013 1795/MDS/2012) ( / ASSESSMENT YEAR : 2009-10) M/S. PRIME URBAN DEVELOPMENT INDIA LTD. 110, AVINASHI ROAD, GANDHI NAGAR POST, TIRUPUR-641 603. VS. THE INCOME TAX OFFICER, WARD-I(4), TIRUPUR. PAN: AABCP9571D (APPLICANT) ( /RESPONDENT) APPLICANT BY : MR. M.V.SWAROOP, ADVOCATE RESPONDENT BY : MR. S.DAS GUPTA, JCIT / DATE OF HEARING : 21 ST MARCH, 2014 ! /DATE OF PRONOUNCEMENT : 7 TH APRIL, 2014 %, / O R D E R PER CHALLA NAGENDRA PRASAD, JM: THE ASSESSEE FILED THIS MISCELLANEOUS PETITION STA TING THAT THIS TRIBUNAL WHILE DISPOSING OF THE APPEAL IN ITA NO.1795/MDS/2012 BY ORDER DATED 14.12.2012 HAS OMIT TED TO CONSIDER GROUND NO.3(I) AND (J) RELATING TO ADDITIO N OF SUM OF ` 18 CRORES. THEREFORE, ASSESSEE REQUESTS THE TRIBUNA L TO ITA NO.108/MDS/2013 2 ADJUDICATE THE SAID GROUNDS AND DISPOSE OF THE APPE AL AND FOR THIS LIMITED PURPOSE IMPUGNED ORDER BE RECALLED. 2. COUNSEL FOR THE ASSESSEE SUBMITS THAT THE TRIBUN AL IN ITS ORDER CONFIRMED THE ACTION OF THE COMMISSIONER OF I NCOME TAX (APPEALS) IN TREATING ` 30.50 CRORES BEING AMOUNT RECEIVED FOR SALE OF DEVELOPMENT AND FSI RIGHTS AG AINST PHASE-II LAND AS CAPITAL GAIN AS AGAINST THE CLAIM OF ASSESSEE AS BUSINESS INCOME. HOWEVER, GROUND NO.3(I) RAISED BY THE ASSESSEE THAT ` 18 CRORES WHICH WAS ADDED BY THE COMMISSIONER OF INCOME TAX (APPEALS) AS SALE OF FSI RIGHTS IS PART OF ` 30.50 CRORES OFFERED AS TAX AS BUSINESS INCOME BY THE ASSESSEE WAS NOT CONSIDERED FOR DISPOSAL BY THE TRIBUNAL. THEREFORE, COUNSEL FOR THE ASSESSEE SUBMITS THAT TH ERE IS A MISTAKE APPARENT FROM RECORD IN THE ORDER PASSED BY THE TRIBUNAL IN NOT DISPOSING OFF THE GROUNDS 3(I) AND (J) OF GROUNDS OF APPEAL. 3. DEPARTMENTAL REPRESENTATIVE SUBMITS THAT THE TRI BUNAL DECIDED THE ISSUE AS TO WHETHER THE AMOUNT RECEIVED BY THE ITA NO.108/MDS/2013 3 ASSESSEE I.E. ` 30.50 CRORES IS ASSESSABLE AS CAPITAL GAINS OR BUSINESS INCOME AND THE TRIBUNAL SUSTAINED THE ORD ER OF THE COMMISSIONER OF INCOME TAX (APPEALS). DEPARTMENTAL REPRESENTATIVE SUBMITS THAT ASSESSEE SHOULD HAVE FI LED A MISCELLANEOUS PETITION BEFORE THE COMMISSIONER OF I NCOME TAX (APPEALS) TO CLARIFY WHETHER THE AMOUNT OF ` 30.50 CRORES INCLUDES ` 18 CORES SUSTAINED BY THE COMMISSIONER OF INCOME TAX (APPEALS) AS SALE OF FSI RIGHTS OR NOT. 4. HEARD BOTH SIDES. PERUSED THE ORDER PASSED BY TH IS TRIBUNAL AND THE PETITION FILED BY THE ASSESSEE AND SUBMISSIONS THEREON. IN GROUND NO.3 OF GROUNDS OF A PPEAL FILED BY THE ASSESSEE BEFORE THE TRIBUNAL, ASSESSEE HAS RAISED SEVERAL GROUNDS NUMBERING 3(A) TO 3(K). OUT OF THESE GROUNDS, GROUND NO.3(I) & (J) RAISED BY THE ASSESS EE ARE AS UNDER:- I) TH E L EA RN E D COMMISSION E R OF IN C OM E T AX (APP EA L S ) H AS E RR E D IN A DDIN G RS. 1 8 CR O R ES AS SA L E OF FSI RI G HT S W H E N IN F AC T THI S INC O M E OF RS . 1 8 CRO R ES I S P A RT O F RS . 30.50 CR O R ES O FF E R E D TO T AX AS BUSIN ESS IN C OM E . F U R TH E R TH E L EA RN E D COMMI SS ION E R IT A DO ES N O T H AVE T H E P OWE R TO BRIN G IN A N EW S O URC E O F ITA NO.108/MDS/2013 4 IN C OM E IN TH E A PP E LL A T E PR OCEE DIN GS. J) TH E L EA RN E D COMMI S SION E R OF I NCO M E T AX (APP EA LS) H AS E RR E D IN TR EA TIN G RS .1 8 CRORES A S ADDITIONAL IN C OM E WITHOUT A PPR E CI A TIN G TH E F AC T TH A T TH E AG R EE M E NTS ENTER E D INTO BY TH E APP E LL A NT WE R E W ITH R ES P EC T TO THE S A M E PROP E RTY AND THE AG R E EM E NTS ENT E R E D INTO DURIN G TH E R E L E V A NT YEA R W AS T O F A CILIT A T E TH E R E L EASE OF TITL E D EE D S MORT GAGE D WI TH TH E B A NK S A ND TH E T O T A L CO N S I DE R A TION W ITH R E SP EC T TO PH ASE II L A ND WAS R S.3 7. 5 0 CRO R ES O NL Y ( RE DU CE D T O 29 C ROR E S AS P E R TH E M E M ORA N D UM O F AG R EEME NT D A T ED 23/ 0 3 / 2 011) A ND TH E R E WAS NO A DDIT IO N A L R EVE NU E ON T H E SAID P IECE OF L AND. 5. GROUND NO.3( J ) IS PART OF GROUND NO.3 (I) . ON A PERUSAL OF THE ORDER OF THE TRIBUNAL IN PARAS 15 TO 20 WE FIND THAT THE TRIBUNAL IN THOSE PARAS DECIDED THE ISSUE AS TO WHE THER CONSIDERATION OF ` 30.50 CRORES RECEIVED BY THE ASSESSEE FOR SALE OF DEVELOPMENT OF FSI RIGHTS AGAINST PHASE-II LAND IS ASSESSABLE UNDER THE HEAD CAPITAL GAINS OR BUSIN ESS INCOME. THE TRIBUNAL FINALLY AGREED WITH THE VIEW OF THE COMMISSIONER OF INCOME TAX (APPEALS) IN HOLDING THA T SUCH RECEIPT SHOULD BE ASSESSED AS CAPITAL GAINS. THE TR IBUNAL DID NOT GIVE ANY FINDING AS TO WHETHER AN AMOUNT OF ` 18 CRORES SUSTAINED BY THE COMMISSIONER OF INCOME TAX (APPEAL S) IS PART OF ` 30.50 CRORES OFFERED TO TAX AS BUSINESS INCOME BY ITA NO.108/MDS/2013 5 THE ASSESSEE. GROUND NO.3(I) RAISED BY THE ASSESSEE IS THAT COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN ADDIN G ` 18 CRORES AS SALE OF FSI RIGHTS WHEN IN FACT THIS INCO ME OF ` 18 CRORES IS PART OF ` 30.50 CRORES OFFERED TO TAX AS BUSINESS INCOME AND THIS GROUND IS NOT DISPOSED OFF BY THE T RIBUNAL WHILE DECIDING THE APPEAL BY ORDER DATED 14.12.2012 . 6. CONSIDERING THE SUBMISSIONS OF BOTH PARTIES AND ON PERUSAL OF THE ORDER OF THIS TRIBUNAL, WE NOTICE TH AT THERE IS AN APPARENT ERROR IN THE ORDER IN NOT DISPOSING OF GRO UND NO.3(I) OF THE GROUNDS OF APPEAL. THEREFORE, WE RECALL THE ORDER DATED 14.12.2012 IN ITA NO. 1795/MDS/2012 AND THE APPEA L IS RESTORED FOR THE LIMITED PURPOSE OF DISPOSING OF GR OUND NO. 3(I) WHICH WAS OMITTED TO CONSIDER WHILE DISPOSING OF TH E APPEAL BY THIS TRIBUNAL. 7. THE REGISTRY IS DIRECTED TO FIX THE APPEAL IN IT A NO.1795/MDS/2012 FOR HEARING IN DUE COURSE ONLY FO R THE LIMITED PURPOSE OF DISPOSING OF GROUND NO.3(I) OF T HE GROUNDS OF APPEAL. ITA NO.108/MDS/2013 6 8. IN THE RESULT, MISCELLANEOUS PETITION IS ALLOWED TO THE EXTENT INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON MONDAY, TH E 7 TH DAY OF APRIL, 2014 AT CHENNAI. SD/- SD/- ( DR. O.K. NARAYANAN ) ( CHALLA NAGE NDRA PRASAD ) ( '# . $ . . & ( '() *+, - ) . 01 /VICE-PRESIDENT + -2 / JUDICIAL MEMBER \ '+ /CHENNAI, 3- 4 /DATED, 7 TH APRIL, 2014. SOMU 5-67)89:8 /COPY TO: 1. APPLICANT 2. /RESPONDENT 3. 55 ;9<)& /CIT(A) 4. 55 ; /CIT 5. 8= *< > /DR 6. * '? ) /GF.