SHALINI SEEKOND, MUMBAI V. ITO 3(3)(2), MUMBAI

MA 275/MUM/2016

• Counselvise Citation: [2017] 124 COUNSELVISE.COM (IT) 5464 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 5 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 15-03-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: L
• Assessment Year: 2007-2008
• Appeal Filed On: 09-08-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ASHOK DESH
• Keywords: Double taxation relief; Principle of natural justice

Judgement Text

L IN THE INCOME TAX APPELLATE TRIBUNAL L BENCH, MUMBAI BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER MA NO. 275/MUM/2016 ARISING OUT OF ITA NO. 3877/MUM/2012 ( / ASSESSMENT YEAR : 2007-08) MRS. SHALINI SEEKOND 6/15, SHYAM NIWAS BHULABHAI DESAI ROAD MUMBAI-400026 / V. THE INCOME TAX OFFICER 3(3)(2) AAYAKAR BHAVAN, M.K. ROAD, MUMBAI 400 020. ./ PAN : AHNPS1305D ( / APPLICANT ) .. ( / RESPONDENT ) APPLICANT BY : SHRI ASHOK RAO RESPONDENT BY: SH. ASHOK DESHPANDE / DATE OF HEARING : 03-03-2017 / DATE OF PRONOUNCEMENT : 15-03-2017 / O R D E R PER RAMIT KOCHAR, ACCOUNTANT MEMBER THIS MISCELLANEOUS APPLICATIONS, FILED BY THE ASSE SSEE, BEING MA NO. 275/MUM/2016 ARISING OUT OF APPEAL BEARING ITA NO.3 877/MUM/2012 FOR ASSESSMENT YEAR 2007-08 , WHEREIN THE ASSESSEE HAS SOUGHT CLARIFICATION IN THE APPELLATE ORDER DATED 07-07-2016 PASSED BY INCO ME-TAX APPELLATE TRIBUNAL , L-BENCH MUMBAI , (HEREINAFTER CALLED TH E TRIBUNAL ) FOR THE ASSESSMENT YEAR 2007-08. 2. DURING THE COURSE OF HEARING, LIMITED ISSUE WAS RAISED BY THE LEARNED COUNSEL FOR THE ASSESSEE BY CONTENDING THAT THE TRI BUNAL AFTER CONSIDERING THE FACTUAL MATRIX OF THE CASE IN APPEAL IN ITA NO. 3 877/MUM/2012 FOR MA NO. 275/MUM/2016 2 ASSESSMENT YEAR 2007-08 HAS COME TO CONCLUSION IN I TS ORDER DATED 07-07- 2016 , THAT CAPITAL GAINS DERIVED BY ASSESSEE ON SA LE OF IMMOVABLE PROPERTY SITUATED IN SRI LANKA SHALL BE CHARGED TO TAX ONLY IN SOURCE COUNTRY I.E. SRI LANKA BY GOVERNMENT OF DEMOCRATIC SOCIALIST REPUBLI C OF SRI LANKA . IT IS SUBMITTED THAT SITUATION HAS ARISEN WHEREIN THE CAP ITAL GAINS SO ARISEN TO THE ASSESSEE FROM SALE OF IMMOVABLE PROPERTY SITUATED I N SRI LANKA ARE EXEMPT FROM TAX AS PER TAX LAWS OF SRI LANKA ,WHEREIN TH E ASSESSING OFFICER IN INDIA WHILE IMPLEMENTING THE AFORE-STATED TRIBUNAL ORDER IS INCLUDING THE CAPITAL GAINS SO EARNED BY THE ASSESSEE FROM SALE OF IMMOVA BLE PROPERTY IN SRI LANKA IN THE TAXABLE INCOME OF THE ASSESSEE IN INDIA WHER EIN APPLICABLE RATES AS PREVALENT IN INDIA ON CAPITAL GAINS ARISING FROM S ALE OF IMMOVABLE PROPERTIES ARE APPLIED BY REVENUE AND SINCE TAX PAID IN SRI LA NKA IS NIL DUE TO THE TAX- LAWS OF SRI LANKA , ARE CONTEMPLATING INCLUDING GIV ING RELIEF OF NIL AND CONSEQUENTLY CAPITAL GAINS ARE BROUGHT TO TAX AS PE R APPLICABLE RATES IN INDIA , WHICH HAS LED TO AN ANAMOLOUS SITUATION. HE BROUGHT TO OUR NOTICE RELEVANT EXTRACT OF OPERATING PORTION OF TRIBUNALS CONCLUSI ON AT PAGE 25 OF TRIBUNAL ORDER DATED 07-07-2016 IN ITA NO.3877/MUM/2012, WHI CH READS AS UNDER : THUS, BASED ON OUR ABOVE DISCUSSIONS AND SUBJECT T O OUR ABOVE DIRECTIONS, WE HOLD THAT THE INCOME OF THE ASSESSEE EARNED ON CAPITAL GAINS ON SALE OF IMMOVABLE PROPERTY SITUATED IN SRI LANKA DURING RELEVANT PREVIOUS YEAR SHALL BE CHARGEABLE TO TAX ONLY IN SR I LANKA BY GOVERNMENT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA, WHILE THE SAME INCOME SHALL BE INCLUDED IN THE INCOME OF THE ASSESSEE CHA RGEABLE TO TAX IN INDIA UNDER THE PROVISIONS OF THE ACT AND THE RELIEF SHAL L BE GRANTED IN THE MANNER LAID DOWN IN THE NOTIFICATION NO. 91 OF 2008, DATED 28-8- 2008 ISSUED BY THE CENTRAL GOVERNMENT READ WITH DTAA EN TERED INTO BY INDIA AND SRI LANKA AND PROVISIONS OF THE ACT TO AV OID DOUBLE TAXATION AND PREVENTION OF FISCAL EVASION OF THE TAXES. WE O RDER ACCORDINGLY WE DONOT FIND ANY INCONSISTENCY IN OUR ABOVE FINDIN G IF THE SAME IS READ IN CONJUNCTION WITH OPERATING PART OF OUR CONCLUSIONS AT PAGE 22 OF TRIBUNAL ORDER DATED 07-07-2016, WHICH READS AS UNDER; MA NO. 275/MUM/2016 3 WE FURTHER HOLD THAT IF THE INCOME ARISING FROM CA PITAL GAINS ON SALE OF IMMOVABLE PROPERTY SITUATED IN SRI LANKA IS NOT SUB JECTED TO TAX AS PER PROVISIONS OF THE RELEVANT SRI LANKA INLAND REVENUE ACT, NO. 28 OF 1979 (OR THE APPLICABLE RELEVANT INCOME-TAX STATUTE OF S RI LANKA BRINGING TO INCOME-TAX CAPITAL GAINS ARISING ON SALE OF IMMOVAB LE PROPERTY SITUATED IN SRI LANKA) AS APPLICABLE IN SRI LANKA AS BEING S UBJECTED TO 'ZERO' OR 'NIL' RATE OF TAXATION IN SRI LANKA AS PER PREVAILING RAT ES OF INCOME-TAX AS APPLICABLE IN SRI LANKA TO THE RELEVANT YEAR AS IS CONTENDED BY THE ASSESSEE, THEN THE SAME CANNOT BE BROUGHT TO TAX IN INDIA UNDER THE PROVISIONS OF THE ACT MERELY ON THE GROUNDS THAT TH E SAID INCOME IS SUBJECTED TO 'NIL' OR 'ZERO' RATE OF INCOME-TAX IN SRI LANKA AS PER APPLICABLE STATUTE. THIS DIRECTION OF OUR'S IS SUBJECT TO VERI FICATION BY THE LEARNED AO FOR WHICH NECESSARY MATERIAL AND EVIDENCES IN SUPPO RT OF HER CONTENTIONS SHALL BE BROUGHT ON RECORD BY THE ASSESSEE BEFORE T HE AO AS NO SUCH MATERIAL IS PLACED BEFORE THE TRIBUNAL TO SUPPORT C ONTENTIONS BY THE LEARNED COUNSEL FOR THE ASSESSEE, BEFORE ANY RELIEF CAN BE GRANTED TO THE ASSESSEE. NEEDLESS TO SAY PROPER AND ADEQUATE OPPOR TUNITY OF BEING HEARD SHALL BE GRANTED BY THE AO TO THE ASSESSEE IN ACCORDANCE WITH THE PRINCIPLES OF NATURAL JUSTICE AND IN ACCORDANCE WIT H LAW. THUS, WE DONOT FIND ANY INCONSISTENCY IN OUR ABOVE MENTIONED ORDER IN ITA NO. 3877/MUM/2012 DATED 07-07-2016, HOWEVER IN ORDE R TO ALLAY FEARS OF THE ASSESSEE WE CLARIFY THAT IN SUCH FACT SITUATIONS W HEREAS IF CAPITAL GAINS ARISING FROM SALE OF IMMOVABLE PROPERTY SITUATED IN SRI LANKA IS LIABLE TO TAX IN SRI LANKA AS PER RELEVANT TAX-LAWS BUT IS SUBJEC TED TO ZERO OR NIL RATE OF TAXATION IN SRI LANKA, THEN CAPITAL GAINS ARISING FROM SALE OF IMMOVABLE PROPERTY SITUATED IN SRI LANKA CANNOT BE CHARGED TO TAX IN INDIA BUT IN SUCH FACT SITUATION THE ONUS SHALL BE ENTIRELY ON THE AS SESSEE TO PROVE THE AFORESAID CONTENTIONS ON MERIT BEFORE THE ASSESSING AUTHORITI ES IN INDIA . THUS, WE DISPOSE OF THE ABOVE MISCELLANEOUS APPLICATION WITH AFORE-SAID OBSERVATIONS. WE ORDER ACCORDINGLY 3. IN THE RESULT, THE MISCELLANEOUS APPLICATION BEI NG MA NO. 275/MUM/2016 ARISING OUT OF APPEAL NO ITA NO. 3877/ MUM/2012 FOR THE MA NO. 275/MUM/2016 4 ASSESSMENT YEAR 2007-08 FILED BY THE ASSESSEE IS DI SPOSED AS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH MARCH, 2017. # $% & ' 15-03-2017 ( ) SD/- SD/- ( MAHAVIR SINGH ) (RAMIT KOCHAR) JUDICIAL MEMBER ACCOUNTANT MEMBER $ MUMBAI ; & DATED 15-03-2017 [ !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. 9 ( ) / THE CIT(A)- CONCERNED, MUMBAI 4. 9 / CIT- CONCERNED, MUMBAI 5. <=( >>?@ , ?@ , $ / DR, ITAT, MUMBAI L BENCH 6. (BC D / GUARD FILE. / BY ORDER, < > //TRUE COPY// / ( DY./ASSTT. REGISTRAR) , $ / ITAT, MUMBAI