HAJRA I MENON, V. ITO 16(1)(4),

MA 281/MUM/2012

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 9506 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 30 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 09-11-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: H
• Assessment Year: 2007-2008
• Appeal Filed On: 10-05-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: G S PIKALE

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH H, MUMBAI BEFORE AND SHRI P.M.JAGTAP, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA , JUDICIAL MEMBER. M.A. NO. 281/MUM/2011. (IN ITA NO .3848/MUM/2009) ASSESSM ENT YEAR : 2007-08. MRS. HAJRA MEMON, THE INCOME-TAX OFFICER, 427, ARUN CHAMBERS, VS. 16(1)(4), TARDEO ROAD, MUMBAI. MUMBAI 400 034. PAN ALWPM 6969M APPLICANT. RESPONDENT. APPLICANT BY : SHRI G.S. PIKALE. RESPONDENT BY : SHRI OM PRAKASH. DATE OF HEA RING : 12-10-2012. DATE OF PRONOUNCEM ENT : 09-11-2012. O R D E R PER P.M. JAGTAP, A.M. : BY THIS MISCELLANEOUS APPLICATION, THE ASSESSEE IS SEEKING RECTIFICATION OF THE MISTAKE ALLEGED TO HAVE CREPT IN THE ORDER OF T HE TRIBUNAL DATED 18 TH JANUARY, 2012 PASSED IN ITA NO. 3848/MUM/2010. 2. THE LEARNED COUNSEL FOR THE ASSESSEE WHILE SUPPO RTING THIS MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE SUBMITTED THAT TH E ISSUE RAISED IN GROUND NO. 1 AND 2 OF THE REVENUES APPEAL HAS BEEN DECIDED BY THE T RIBUNAL HOLDING THAT THE TRANSFER TOOK PLACE ON 04-11-2012 AND NOT ON 28-05- 1999 AS HELD BY THE LEARNED CIT(APPEALS) BY ACCEPTING THE STAND OF THE ASSESSEE OR ON 22-02-2007 AS HELD BY 2 M.A.NO. 281/MUM/2012 THE AO. HE CONTENDED THAT WHILE ARRIVING AT THE SAI D CONCLUSION, THE TRIBUNAL HAS OVERLOOKED/IGNORED THE FOLLOWING FACTS OF THE CASE : I) THERE IS NO MENTION IN ASSESSMENT ORDER OR IN TH E CIT(A)S ORDER THAT THE TRANSFER TOOK PLACE ON 4.11.2004. ALSO IN THE G ROUNDS TAKEN BY THE REVENUE, THERE IS NO MENTION DATED 4.11.2004. II) LD CIT(A) HAS GIVEN FINDING THAT THE TENANCY RI GHT GOT CONVERTED INTO OWNERSHIP RIGHT ON 28.5.1999 AND NOT IN 2007-08. III) HONBLE TRIBUNAL HAS NOT TAKEN INTO CONSIDERAT ION THE PARA 3 OF CONSENT TERMS, WHICH CLARIFIES THAT THE TENANCY RIG HT WOULD BE CREATED FORTHWITH (EMPHASIS SUPPLIED) AS PER HONBLE HIGH COURT IN I TS ORDER IN SUIT NO. 1593 OF 1999 DATED 28 TH MAY, 1999. HENCE, IT IS CLEAR THAT THE ASSESSEE BECAME THE OWNER OF THE PROPERTY FROM THE DATE OF ORDER OF HONBLE HIGH COURT. IV) THE DECISION OF HONBLE HIGH COURT IN ASSESSEE S CASE IS BINDING ON ALL THE LOWER AUTHORITIES. HENCE, HONBLE TRIBUNAL CANNOT GO BEYOND THE DECISION OF HONBLE HIGH COURT. V) AT THE TIME OF HEARING, THE QUESTION THAT TRANSF ER TOOK PLACE ON 4.11.2004 WAS NOT PUT TO THE ASSESSEE TO CONTROVERT THE SAME. VI) SIMILARLY, IT IS NOT OPEN TO THE TRIBUNAL TO MA KE OUT A NEW CASE WHICH WAS NOT A CASE OF EITHER THE ASSESSEE OR THE REVENU E. VII) THE TRIBUNAL CANNOT COME TO THE CONCLUSION TO AN ISSUE WHICH WAS NOT TAKEN IN THE MEMORANDUM OF APPEAL. VII) THE DEED OF CONFIRMATION WAS MADE ONLY TO REGI STER THE DOCUMENT AS THE DECREE PASSED BY THE HONBLE COURT ITSELF OPERA TES AS THE TRANSFER, WHICH SHOULD HAVE BEEN REGISTERED AT THAT TIME. FOR COMPLYING WITH THE PROVISIONS OF REGISTRATION ACT, THE DEED OF CON FIRMATION WAS PREPARED. NO FRESH RIGHTS ARE CREATED BY DEED OF CO NFIRMATION AS CAN BE SEEN FROM THE DOCUMENTS. THE RIGHT ARISING OUT O F THE DECREE OF HONBLE HIGH COURT BECAME FINAL IN 1999 AND WAS REC ORDED IN THE DEED OF CONFIRMATION. IN FACT, THE STAMP OFFICE HAS NOW ISSUED A CIRCULAR MENTIONING THAT THE DOCUMENT HAS TO BE REG ISTERED WITHIN FOUR MONTHS FROM THE DATE OF ITS EXECUTION, COPY OF WHIC H IS ENCLOSED FOR KIND REFERENCE. 3 M.A.NO. 281/MUM/2012 IX) THEREFORE, IT IS CLEAR THAT PURSUANT TO HONBLE HIGH COURTS ORDER DATED 28.5.1999, AGREEMENT DATED 11.4.2004 AND 22.2 .2007 WERE EXECUTED TO FACILITATE/EFFECT TO THE TRANSACTION. THUS, THE AGREEMENT MADE ON 11.4.2004 IN COMPLIANCE TO HIGH COURTS DEC ISION, CANNOT BE THE BASIS THAT THE TRANSFER TOOK PLACE ON THAT DATE . THE LEARNED COUNSEL FOR THE ASSESSEE CONTENDED THAT THE TRIBUNAL THUS HAS DECIDED THE DATE OF TRANSFER AS 04-11-2004 WHICH WAS NEITHE R THE CASE OF THE ASSESSEE NOR THE CASE OF THE REVENUE AND THE DECISION SO RENDERE D WAS BEYOND THE SCOPE OF CONTROVERSY RAISED IN THE APPEAL FILED BY THE REVEN UE AS TO WHETHER THE TRANSFER TOOK PLACE ON 28-05-1999 OR ON 22-02-2007. HE ALSO CONTENDED THAT THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT HAS NOT BEEN C ONSIDERED BY THE TRIBUNAL WHICH HAS GIVEN RISE TO A MISTAKE APPARENT FROM REC ORD AS HELD BY HONBLE GUJARAT HIGH COURT IN THE CASE OF ACIT VS. SAURASHTRA KUTCH STOCK EXCHANGE LTD. 262 ITR 146 AFFIRMED BY HONBLE SUPREME COURT IN 305 IT R 227. THE LEARNED DR, ON THE OTHER HAND, SUBMITTED THAT A SPECIFIC VIEW HAS BEEN TAKEN BY THE TRIBUNAL WHILE HOLDING THAT THE TRANSFER TOOK PLACE ON 04-11-2004 AND IT IS NOT PERMISSIBLE TO REVIEW THE SAME IN THE GUISE OF RECTIFICATION U/S 2 54(2). 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND ALS O PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS OBSERVED THAT THE DISPUTE RELATING TO THE EXACT DATE OF TRANSFER IN THE CONTEXT OF THE YEAR OF TAXABILITY O F LONG TERM CAPITAL GAIN WAS RAISED IN GROUND NO. 1 AND 2 OF THE REVENUES APPEAL WHICH READ AS UNDER : 1. THE LD. CIT(A) ERRED IN DIRECTING THE ADDITION OF RS.68,45,651/- AS LONG TERM CAPITAL GAIN, AND ACCEPTING THE TENANCY R IGHT GOT CONVERTED INTO OWNERSHIP RIGHT AS PER CONSENT DECRE E DATED 28.05.1999 AND NOT IN A.Y. 2007-08 WHEN THE AGREEMENT FOR GIVI NG OWNERSHIP RIGHT WAS REGISTERED THROUGH A TRANSFER DEED. 2. THE LD. CIT(A) ERRED IN NOT ACCEPTING THE FACT THAT THE ASSESSEE TENANT SURRENDERED / EXCHANGED / TRANSFERRED THE TENANCY R IGHT ACQUIRED FOR 4 M.A.NO. 281/MUM/2012 RS.9 LAKHS WITH OWNERSHIP RIGHT WORTH RS.1,13,49,00 0/- ON 22.02.2007 AND NOT ON 28.05.1999 WHEN THE CONSENT DECREE WAS P ASSED. 4. AFTER CONSIDERING THE SUBMISSIONS MADE BY BOTH T HE SIDES AND PERUSING THE RELEVANT MATERIAL ON RECORD, THE ISSUE RAISED IN GR OUND NO. 1 AND 2 OF THE REVENUES APPEAL WAS DECIDED BY THE TRIBUNAL VIDE P ARAGRAPH NO. 7 TO 9 OF ITS ORDER DATED 18 TH JANUARY, 2012 (SUPRA) WHICH ARE REPRODUCED BELOW : 7. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PART IES AND PERUSED THE RECORDS. THE FACTS PERTAINING TO THE CONTROVERSY AR E ALREADY NARRATED IN DETAIL IN UPPER PART OF THIS ORDER. ONE MR. M.K. MOHAMMED WAS IN ADVERSE POSSESSION OF THE LAND SITUATED AT GURUKRIPA DR. ANNIE B. ROAD, WORLI, MUMBAI. THE SAID SHRI MOHAMMED WAS RUNNING THE REST AURANT THERE AS HE HAS CONSTRUCTED THE STRUCTURE ON THE SAID PROPERTY. IT APPEARS THAT THERE WAS A LITIGATION BETWEEN CO-OWNERS IN THE HONBLE HIGH CO URT. THE HONBLE HIGH COURT HAS APPOINTED ONE COURT RECEIVER NAMELY MR. D .B. KHADE. AS PER FACTS ON RECORD SHRI M.K. MOHAMMED AND OTHER OCCUPA NTS /TENANTS WERE IN THE SAID PROPERTY. THE COURT RECEIVER FILED THE SUI T AGAINST SHRI M.K. MOHAMMED IN THE HONBLE HIGH COURT OF BOMBAY SEEKIN G THE RELIEF BY WAY OF DIRECTIONS TO GET THE VACANT POSSESSION OF THE S AID PROPERTY FROM SHRI M.K. MOHAMMED. THERE WAS COMPROMISE OR SETTLEMENT B ETWEEN SHRI M.K. MOHAMMED AND COURT RECEIVER AND IN PURSUANCE OF THE CONSENT TERMS FILED IN THE HONBLE HIGH COURT IN THE SUIT FILED BY THE COURT RECEIVER, THE HONBLE HIGH COURT PASSED A CONSENT DECREE. MEANTIM E, THE ASSESSEE ENTERED INTO AN AGREEMENT WITH SHRI M.K. MOHAMMED F OR ACQUIRING THE RIGHTS IN THE PROPERTY WHICH WAS IN HIS POSSESSION FOR THE CONSIDERATION OF RS.9,00,000/- AND THE SAID AGREEMENT WAS EXECUTED I N 06.08.1986. IT APPEARS THAT THE ASSESSEE TOOK OVER THE POSSESSION OF THE D ISPUTED PROPERTY FROM SHRI M.K. MOHAMMED AND HENCE, THE CO-OWNERS OF THE SAID PROPERTY CHALLENGED THE CONSENT DECREE OF THE COURT PASSED IN 1988 AND ALSO MADE THE ASSESSEE AS A PARTY TO THE SUIT PROCEEDINGS. AGAIN THERE WAS SETTLEMENT BETWEEN THE CO-OWNERS AND THE ASSESSEE AND IT WAS AGREED THAT T HE ASSESSEE WOULD REMOVE HER FROM THE PROPERTY WHICH WAS SUBJECT MATT ER OF THE COURT LITIGATION AND ALSO SHE WOULD REMOVE ALL THE FURNIT URE, FIXTURE AND OTHER BELONGINGS AND GIVE THE VACANT POSSESSION TO THE CO -OWNERS AND THE CO- OWNERS AGREED TO GIVE ALTERNATE PREMISES IN THE FOR M OF 14000 SQ.FT. CARPET 5 M.A.NO. 281/MUM/2012 AREA ON THE THIRD AND FOURTH FLOORS OF SHRINIKETAN BUILDING TOGETHER WITH SIX COVERED CAR PARKING SPACES AND ONE OPEN CAR PARKING SPACE. AS PER THE CONSENT TERMS, IT WAS ALSO AGREED THAT WHEN THE CO- OPERATIVE SOCIETY WOULD BE FORMED THE ASSESSEE WOULD BE GIVEN THE FULL OWNE RSHIP RIGHTS OF THE SAID PREMISES AND TILL THAT TIME THE ASSESSEE WOULD BE T REATED AS THE TENANT ON THE MONTHLY RENT OF RS.10,000/-. THE HONBLE HIGH COURT PASSED THE CONSENT DECREE AS PER THE CONSENT TERMS FILED BY THE COOWNE RS AND THE ASSESSEE 29.05.1999. IN PURSUANCE OF THE CONSENT DECREE THE ASSESSEE VACATED THE PROPERTY WHICH WAS SUBJECT MATTER OF THE LITIGATION AND TOOK THE POSSESSION OF THE ALTERNATE PREMISES IN SHRINIKETAN BUILDING. THERE WAS AN AGREEMENT ON 4.11.2004 TO THAT EFFECT. WHEN THE ASSESSEE MADE TH E COMPLIANCE OF THE CONSENT DECREE AND AGREEMENT WAS EXECUTED ON 04.11. 2004, IN OUR OPINION, AT THE MOST, THE TRANSFER CAN BE TREATED ON THAT DA Y WHEN THE EFFECTIVE AGREEMENT WAS EXECUTED IN PURSUANCE OF THE CONSENT DECREE EVEN IF SAID AGREEMENT WAS NOT REGISTERED BUT SUBSEQUENTLY REGIS TERED ON 22.02.2007 BY WAY OF CONFIRMATION DEED. SO FAR AS PLEA OF THE ASS ESSEE THAT THERE WAS NO TRANSFER AT ALL IS WITHOUT ANY BASE. THE ASSESSEE W AS ACCEPTED AS A TENANT BY THE CO-OWNERS AND AS PER THE SETTLED LAW ON THIS I SSUE THE TENANCY CANNOT BE EQUATED WITH THE OWNERSHIP. THE OWNERSHIP IS THE BU NDLE OF RIGHTS BUT RIGHTS OF THE TENANTS ARE LIMITED. ADMITTEDLY, THE ASSESSE ES TENANCY WAS CONVERTED OWNERSHIP AND THAT CAN BE THE SUBJECT MATTER OF TH E CAPITAL GAIN AS IT IS A TRANSFER WITHIN THE MEANING OF SECTION 2(47) R.W.S. 45 OF THE I.T. ACT. 8. CORE QUESTION OF CONTROVERSY TO BE DECIDED IS WH ETHER THE SAID TRANSFER WAS IN THE A.Y. 2007-08. ADMITTEDLY, THE ASSESSEE M ADE THE COMPLIANCE ON 4.11.2004 AND IN OUR OPINION THIS ISSUE HAS TO GO I N FAVOUR OF THE ASSESSEE AS THE TRANSFER TOOK PLACE ON THE DATE I.E. 4.11.2004 WHEN THE AGREEMENT IN COMPLIANCE WITH THE CONSENT DECREE WAS EXECUTED AND THE ASSESSEE VACATED THE PROPERTY, WHICH WAS SUBJECT MATTER OF THE LITIG ATION BETWEEN HER AND THE CO-OWNERS. 9. WE ARE UNABLE TO ACCEPT THE PLEA OF THE LD. COUN SEL THAT AT THE , THE TRANSFER COULD BE IN THE YEAR 1999 WHEN THE CONSENT DECREE WAS PASSED FOR THE REASON THAT THOUGH THE CONSENT DECREE WAS PASSE D IT WAS SUBJECT TO CERTAIN CONDITIONS AND ON COMPLIANCE OF THE CONCESS IONS ONLY THE ASSESSEE WAS TO BE CONFERRED WITH THE OWNERSHIP OF THE ALTER NATE PREMISES AGREED TO BE GIVEN IN THE SHRINIKETAN BUILDING BY CO-OWNERS/L ANDLORDS OF THE PROPERTY. WE, THEREFORE, HOLD THE TRANSFER TOOK PLACE ON 04. 11.2004 AND NOT ON 22.02.2007 IF THE DEED OF CONFIRMATION WAS REGISTE RED ON THAT DATE. WE, 6 M.A.NO. 281/MUM/2012 ACCORDINGLY CONFIRM THE ORDER OF THE LD. CIT (A) O N ABOVE REASONS THAT CAPITAL GAIN CANNOT BE BROUGHT TO TAX IN THIS YEAR AND ACCORDINGLY WE DECIDE QUESTION NOS.1 & 2 AGAINST THE REVENUE. 5. AS IS CLEARLY EVIDENT, THE DECISION OF THE HONB LE BOMBAY HIGH COURT PASSING THE CONSENT DECREE IN THE CASE OF THE ASSE SSEE WAS DULY TAKEN INTO CONSIDERATION BY THE TRIBUNAL ALONG WITH OTHER RELE VANT FACTS OF THE CASE AND OTHER DOCUMENTARY EVIDENCE TO COME TO THE CONCLUSION THAT THE TRANSFER TOOK PLACE ON 04- 11-2004. IN OUR OPINION, IT, THEREFORE, CANNOT BE S AID THAT THE DECISION WAS RENDERED BY THE TRIBUNAL WITHOUT CONSIDERING THE ORDER OF TH E HONBLE BOMBAY HIGH COURT OR ANY OTHER RELEVANT ASPECTS OF THE CASE AS ALLEGE D BY THE ASSESSEE IN THE PRESENT MISCELLANEOUS APPLICATION. AS REGARDS THE DATE OF T RANSFER, THE TRIBUNAL NO DOUBT HAS TAKEN THE DATE OF TRANSFER AS 04-11-2004 AS AGA INST 28-05-1999 AS CLAIMED BY THE ASSESSEE WHICH WAS ACCEPTED BY THE LEARNED CIT( APPEALS) AND 22-02-2007 AS TAKEN BY THE AO. THE QUESTION, HOWEVER, IS WHETHER THE SAME CONSTITUTES A MISTAKE APPARENT FROM RECORD WHICH CAN BE RECTIFIED U/S 254 (2). AS RIGHTLY CONTENDED BY THE LEARNED DR IN THIS REGARD, THE DATE OF TRANSFER HAS BEEN HELD TO BE 04-11-2004 BY THE TRIBUNAL BY TAKING A SPECIFIC VIEW AND IT I S NOT PERMISSIBLE TO REVIEW THE DECISION OF THE TRIBUNAL IN THE GUISE OF RECTIFICAT ION U/S 254(2). THE LEARNED COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ENT IRE ORDER OF THE TRIBUNAL DATED 18 TH JANUARY, 2012 CAN BE RECALLED AND THE APPEAL OF TH E REVENUE CAN BE HEARD IN ORDER TO DECIDE AFRESH THE ISSUE RELATING TO THE EX ACT DATE OF TRANSFER WHETHER 28- 05-1999 OR 22-02-2007. IN OUR OPINION, EVEN THIS RE COURSE WILL LEAD TO THE REVIEW OF THE DECISION OF THE TRIBUNAL ON THE ISSUE OF DAT E OF TRANSFER INDIRECTLY WHICH IS BEYOND THE SCOPE OF SECTION 254(2) BECAUSE WHAT IS NOT PERMISSIBLE DIRECTLY CANNOT BE DONE EVEN INDIRECTLY. WE ARE, THEREFORE, OF THE VIEW THAT THERE IS NO MISTAKE APPARENT FROM RECORD IN THE ORDER OF THE TRIBUNAL D ATED 18 TH JANUARY, 2012 (SUPRA) 7 M.A.NO. 281/MUM/2012 WHICH CAN BE RECTIFIED U/S 254(2). ACCORDINGLY, WE DISMISS THIS MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE BEING DEVOID OF A NY MERIT. 6. IN THE RESULT, THE MISCELLANEOUS APPLICATION OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED COURT ON THIS 9 TH DAY OF NOV., 2012. SD/- SD/- (AMIT SHUKLA) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED : 9 TH NOV., 2012. WAKODE COPY TO : 1. APPLICANT. 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. D.R., H-BENCH. (TRUE COPY) BY ORDER ASSISTANT REGISTRAR, ITAT, MUMBAI. 8 M.A.NO. 281/MUM/2012 DATE INITIALS DRAFT DICTATED ON 07- 11-12 SR. P.S. DRAFT PLACED BEFORE THE AUTHOR 08-11-12 SR. P.S. DRAFT PROPOSED AND PLACED BEFORE THE SECOND MEMBER AM/JM DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/JM APPROVED DRAFT COMES TO THE SR. PS SR. P.S. KEPT FOR PRONOUNCEMENT ON SR. P.S. FILE SENT TO THE BENCH CLERK SR. P.S. DATE ON WHICH FILE GOES TO THE HEAD CLERK DATE OF DISPATCH