Pramod Arjun Thakur, Raigad V. Income-tax Officer, Ward - 2, Panvel

MA 31/PUN/2023

AI Insights

The case involves Shri Pramod A. Thakur, who filed a miscellaneous application seeking to recall or rectify the Tribunal's earlier order that allowed the Revenue's appeal regarding an addition under section 56(2)(vii)(b) of the Income Tax Act. The Tribunal had previously ruled that the assessee's receipt of 13 flats from M/s. Metro Builders (Reality) constituted a taxable event as the flats were received without any consideration, and the assessee failed to prove that they were received from a specified category of relatives. The assessee argued that the Tribunal had proceeded on a wrong assumption and that the Tribunal had failed to consider the purpose of the arrangement. However, the Tribunal dismissed these arguments, citing that the detailed discussion had addressed the issue on merits and that the purpose of the arrangement was irrelevant to the decision under section 56(2)(vii)(b).

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 137422 (ITAT-PUNE)
• Duration Of Justice: 3 month(s) 10 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 01-06-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 01-06-2023
• Assessment Year: 2015-2016
• Appeal Filed On: 22-02-2023
• Other Referred Cases: Seth Madan Lal Modi vs. CIT [2003] 261 ITR 49 (Del.), CIT vs. Ramesh Electric & Trading Co. [1993] 203 ITR 497 (Bom.)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: SUBODH RATNAPARKHI
• Keywords: Gift
• Section: 56; 56(2)(vii)(b); 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “B” : PUNE BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER M.A.No.31/PUN./2023 Arising out of I.T.A.No.860/PUN./2019 - Assessment Year 2015-2016 Shri Pramod A. Thakur, 501/502, Tulsi Kamal, F-Plot No.233, Sector-10, Khargar, Dist. Raigad. PIN – 410 210 PAN ADJPT0995R vs. The Income Tax Officer, Ward – 2, Panvel. (Applicant) (Respondent) For Assessee : Shri Subodh Ratnaparkhi For Revenue : Shri Ramnath P Murkunde Date of Hearing : 02.06.2023 Date of Pronouncement : 02.06.2023 ORDER PER SATBEER SINGH GODARA, J.M. : This assessee’s miscellaneous application M.A.No.31/PUN./2023 filed u/s.254(2) of the Income Tax Act, 1961 (in short "the Act") seeks to recall/rectify the tribunal’s order dated 30.08.2022 allowing Revenue’s corresponding appeal ITA.No.860/PUN./2019 raising the sole issue of sec.56(2)(vii)(b) addition of Rs.6,54,61,100/- reading as under: “4. We have given our thoughtful consideration to the foregoing rival submissions and find merit in Revenue’s stand. We make it clear first of all that the section 56(2)(vii)(b) comes into play in case an individual receives any immovable property for a consideration 2 M.A.No.31/PUN./2023 which is having difference more than Rs.50,000/- as compared to the stamp price thereof. There is no issue between the parties that the impugned statutory provisions does not apply in case the assessee concerned receives the corresponding immovable property from the specified category(ies) of relatives under sub-clause(es) to Explanation thereof. The assessee has made a very strong endeavor to bring his case under foregoing specified exempt category that these impugned 13 flats received from M/s. Metro Builders (Reality) infact represented his father Shri Arjun G. Thakur’s share in lieu of having given development rights on plot no.233, sector 10, Kharghar, Navi Mumbai in favour of the developer. 5. All these assessee’s submissions hardly evoke our concurrence. We first of all notice from the assessee’s father’s so called development agreement dated 08.08.2008 (pages 59 to 79) that none of the parties had signed on all the pages thereof which could indicate that they would undertake any liability arising out from the same. This followed the corresponding registered agreement 17.04.2009 (after 08.08.2008) amongst CIDCO Ltd.(first party), assessee’s family (second party) and M/s. Metro Reality etc. (licensees) wherein there is no indication about any other earlier arrangement including the one dated 08.08.2008 . Learned counsel could not pin-point even a single stipulation in this clinching agreement that the developer had agreed to share its developed area; which in turn, had come to the assessee from his father by way of by way of nomination. Learned counsel vehemently relied on the assessee’s family settlement memorandum dated 30.09.2012 wherein the developer is not a party. He next invited our attention to page 129 containing the builder’s confirmation in support of the 3 M.A.No.31/PUN./2023 assessee’s pleadings. We are of the opinion all these self serving oral assertions hardly support the assessee’s case as he has failed to lead us to the clinching material inter alia indicating any arrangement between his father and developer wherein the former had parted with the land for getting developed area in lieu of consideration; which in turn, has been passed on to him as a gift from the father and covered under forgoing exemption clause.(supra). We thus conclude that the Assessing Officer had rightly made the impugned addition u/s. 56 (2)(vii)(b) of the act and therefore, the CIT(A) has erred in law and on facts in deleting the same. The Revenue succeeds in its sole substantive grievance. Ordered accordingly.” 2. Learned Authorised Representative has raised two submissions before us. His first argument is that we had proceeded on a wrong assumption that it was a case involving the receipt of immovable property having difference of stamp duty exceeding Rs.50,000/- whereas the taxpayer therein had in fact received flats from builder without any consideration. Learned counsel has quoted Seth Madan Lal Modi vs. CIT [2003] 261 ITR 49 (Del.) that our order proceeding on such a wrong assumption indeed suffers from an apparent mistake and therefore, deserve to be recalled. 3. We find no merit in the assessee’s instant first and foremost argument. This is for the precise reason that even if we admit our mistake that we had invoked a wrong provision, the facts remain our detailed discussion has indeed discussed 4 M.A.No.31/PUN./2023 the entire issue on merits at length whilst accepting Revenue’s arguments. We thus quote hon’ble jurisdictional high court’s decision CIT vs. Ramesh Electric & Trading Co. [1993] 203 ITR 497 (Bom.) that merely because a particular observation, or a finding has been improperly or not at all considered would not vitiate our entire findings. The assessee fails in his first and foremost argument in very terms. 4. Next comes the assessee’s second vehement contention that once we had rejected the entire arrangement amongst the assessee, developer and his father, we ought to have examined the purpose thereof and our failure in issue to this extent also amounts to non-adjudication of the taxpayer’s alternative argument in his written submissions rendering our order suffering from an apparent mistake on record. 5. We find no merit in the assessee’s instant latter arguments as well as once we have upheld the impugned addition in principle. It is nowhere incumbent for us to look into the purpose of the arrangement between all these parties for the purpose of deciding sec.56(2)(vii)(b) addition. The fact remains that the assessee had failed to discharge his onus of proving the impugned development agreement giving him the residential units from the builder, as per his father’s alleged directions. We have rightly confirmed the impugned addition therefore. Rejected accordingly. 5 M.A.No.31/PUN./2023 6. This assessee’s miscellaneous application is dismissed in above terms. Order pronounced in the open Court on 02.06.2023. Sd/- Sd/- [DR. DIPAK P. RIPOTE] [SATBEER SINGH GODARA] ACCOUNTANT MEMBER JUDICIAL MEMBER Pune, Dated 02 nd June, 2023 VBP/- Copy to 1. The applicant 2. The respondent 3. The CIT(A)-2, Thane. 4. The Pr. CIT-2, Thane 5. D.R. ITAT, Pune “B” Bench, Pune 6. Guard File. //By Order// Assistant Registrar, ITAT, Pune Benches, Pune.