ITO, Ward - 40(1), Kolkata V. Shri Kamal Kumar Ghosh (Deceased), represented by L/H Sri Amal Kr. Ghosh , Kolkata

MA 225/KOL/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 9309 (ITAT-KOLKATA)
• Duration Of Justice: 9 month(s) 23 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 04-10-2019
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 11-12-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RANU BISWAS SHRI MIHIR
• Keywords: Capital receipt
• Section: 205; 254(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C, BENCH KOLKATA BEFORE SHRI J. SUDHAKAR REDDY, AM & S. S. GODARA, JM M.A NO.225/KOL/2018 & ITA NO.254/KOL/2017 ( [ [ / ASSESSMENT YEAR: 2011-12) ITO, WARD-40(1), KOLKATA VS. SHRI KAMAL KUMAR GHOSH (DECEASED), REPRESENTED BY L/H SRI AMAL KR. GHOSH 20, HINDUSTAN PARK, 208, RASH BIHARI AVENUE, KOL-09. ./ ./PAN/GIR NO.: AECPG2896J (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI RANU BISWAS, ADDL. CIT(DR) RESPONDENT BY : SHRI MIHIR BANDYOPADHYAY, AR / DATE OF HEARING : 09/08/2019 /DATE OF PRONOUNCEMENT : 04/10/2019 / O R D E R PER SHRI S. S. GODARA: THIS REVENUES MISCELLANEOUS APPLICATION FILED U/S 254(2) OF THE ACT SEEKS TO RECALL/RECTIFY OUR ORDER DATED 20.06.2018 UPHOLDING THE CIT(A)S FINDINGS TREATING THE UNDISCLOSED INCOME ADDITION OF RS.90,00,000/- AS MESNE PROFITS AND A CAPITAL RECEIPT NOT CHARGEABLE TO TAX. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. WE NOW ADVERT TO THE REVENUES SOLE GRIEVANCE RAISED IN THE INSTANT MISCELLANEOUS APPLICATION. IT TRANSPIRES DURING THE COURSE OF HEARING THAT THE ASSESSEE AND HIS BROTHER HAD RECEIVED AN AMOUNT OF RS.1,80,00000/- TO THE EXTENT HALF SHARE EACH COMING TO RS.90,0000/-. HE CLAIMED THE SAME AS MESNE PROFIT IN THE NATURE OF A CAPITAL RECEIPT NOT LIABLE TO BE TAXED. THE ASSESSING OFFICER DECLINED ITS EXPLANATION TO ADD THE SAID SUM OF RS.90,00,000/- AS UNDISCLOSED RECEIPTS. THE CIT(A) REVERSED THE ASSESSING OFFICERS ACTION AND TREATED THE SAID AMOUNT AS MESNE PROFITS NOT ASSESSABLE TO TAX. IN THIS BACKDROP THE REVENUE FILED ITS INSTANT MISCELLANEOUS APPLICATION. M.A NO.225/KOL/2018 SHRI KAMAL KUMAR GHOSH (DECEASED), REPRESENTED BY L/H SRI AMAL KR. GHOSH PAGE | 2 3. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO RIVAL CONTENTIONS. CASE FILE SUGGESTS THAT THE ASSESSEE AND HIS BROTHER HAD ENJOYED LEASE RIGHTS ON THE TWO PROPERTIES I.E. 36B, GARCHA 1 ST LANE AND 44/11, GARCHA ROAD, KOLKATA AND 36B, GARCHA 1 ST LANE, GARCHA ROAD, KOLKATA. THE LEASE PERIOD HAD ADMITTEDLY EXPIRED ON 24.08.1986 AND 25.08.2006; RESPECTIVELY. THESE TWO BROTHERS CONTINUED IN POSSESSION OF THE PROPERTY UPTO THE YEAR 2010. THE PAYER CONCERNED SHRI ANUP JASH MADE THE IMPUGNED TOTAL PAYMENT OF RS.1,80,00,000/- TO BOTH OF THEM IN EQUAL SHARES IN F.Y 2010-11. WE FIND IN THIS BACKDROP OF FACTS THAT THE ASSESSEE HAD NOT ENJOYED ANY RIGHT OR TITLE ON EITHER OF THE TWO PROPERTIES UPTO THE RELEVANT PREVIOUS YEAR SINCE THE LEASE PERIOD HAD EXPIRED WAY BACK IN THE YEAR 1986 AND 2006; RESPECTIVELY. THE ASSESSEES CASE IS THAT THE IMPUGNED SUM IS LIABLE TO BE TREATED AS MESNE PROFIT GOES CONTRARY TO THE RELEVANT DEFINITION CLAUSE TO THIS EFFECT U/S 2(12) OF THE CODE OF CIVIL PROCEDURE THAT MESNE PROFITS OF PROPERTY MEANS THOSE PROFITS WHICH THE PERSON IN WRONGFUL POSSESSION OF SUCH PROPERTY ACTUALLY RECEIVED OR MIGHT WITH ORDINARY DILIGENCE HAVE RECEIVED. THE SAME SUFFICIENTLY INDICATES THAT THE PERSON IS WRONGFUL PERSON HAS TO PAY AND NOT RECEIVE THE MESNE PROFITS. OUR ORDER IN QUESTION APPEARS TO HAVE FOLLOWED THIS TRIBUNALS COORDINATE BENCH DECISION IN NARANG OVERSEAS PVT. LTD. VS. ACIT 111 ITD 1 (MUM ITAT) (SB) THAT MESNE PROFITS CONSTITUTE A CAPITAL RECEIPT NOT CHARGEABLE TO TAX AND ALSO HONBLE JURISDICTIONAL HIGH COURTS DECISION IN CIT VS. SMT. LILA GHOSH 205 ITR 9 (CAL) AS RELIED UPON BY THE CIT(A). LD. AUTHORIZED REPRESENTATIVE FAILS TO DISPUTE THAT NONE OF THE SAID TWO ASSESSEES HAD CONTINUED IN POSSESSION OF THE RESPECTIVE PROPERTIES BEYOND THE SPECIFIED TENURE OF THEIR RESPECTIVE RIGHTS OR POSSESSION OR TENANCY; AS THE CASE MAY BE. CONTRARY TO THIS, WE REITERATE THAT THE INSTANT ASSESSEES STATUS ON THE TWO PROPERTIES IS THAT OF AN ILLEGAL OCCUPANT ONLY AFTER EXPIRY OF THE LEASE PERIOD (SUPRA). WE OBSERVE IN THIS BACKDROP OF FACT THAT OUR FINDINGS AFFIRMING THE CIT(A)S ACTION DELETING THE IMPUGNED ADDITION OF RS.90,00,000/- TO THIS EFFECT IS INSTANCE OF APPARENT ERROR ON THE FACE OF RECORD SINCE A PERSON HAVING CONTINUED IN WRONGFUL POSSESSION OF A PROPERTY IS SUPPOSED TO PAY MESNE PROFITS THAN TO RECEIVE THE SAME FROM THE TITLE HOLDER OF THE PROPERTY(IES). WE ACCORDINGLY RECALL OUR ORDER TO THIS LIMITED EXTENT AND ACCEPT THE REVENUES GRIEVANCE RAISED IN THE INSTANT MISCELLANEOUS APPLICATION M.A NO.225/KOL/2018 AS WELL AS IN THE FORMER M.A NO.225/KOL/2018 SHRI KAMAL KUMAR GHOSH (DECEASED), REPRESENTED BY L/H SRI AMAL KR. GHOSH PAGE | 3 SUBSTANTIVE GROUND PLEADED IN THE MAIN CASE. WE THEREFORE ORDER THAT THE REVENUES FORMER SUBSTANTIVE GRIEVANCE IN THE MAIN APPEAL SEEKING TO REVIVE THE IMPUGNED ADDITION OF RS.90,00,000/- WOULD STAND ACCEPTED HENCEFORTH AS AN NECESSARY COROLLARY. ORDERED ACCORDINGLY. 4. THIS REVENUES MISCELLANEOUS APPLICATION IN M.A NO.225/KOL/2018 IS ALLOWED AND ITS MAIN APPEAL ITA NO.254/KOL/2017 IS PARTLY ALLOWED IN FOREGOING TERMS. ORDER IS PRONOUNCED IN THE OPEN COURT ON 04.10.2019. SD/- ( J. SUDHAKAR REDDY ) SD/- (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER /KOLKATA; / DATE:04/10/2019 (RS, SR.PS) / COPY OF THE ORDER FORWARDED TO : TRUE COPY BY ORDER ASSISTANT REGISTRAR, I.T.A.T, KOLKATA BENCHES, KOLKATA . 1. THE APPELLANT - ITO, WARD-40(1), KOLKATA 2. THE RESPONDENT- SHRI KAMAL KUMAR GHOSH (DECEASED), REPRESENTED BY L/H SRI AMAL KR. GHOSH 3. ( ) / THE CIT(A) [SENT THROUGH EMAIL] 4. / CIT 5. , , / DR, ITAT, KOLKATA [SENT THROUGH EMAIL] 6. [ / GUARD FILE.