SURENDRA D. SHAH, MUMBAI V. ACIT - 32(3), MUMBAI

MA 319/MUM/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 9106 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 25 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 07-01-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 13-05-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SAMATHA MUL LAMURI
• Keywords: Gift; Rectification of order; Set aside
• Section: 56(2)(vii)(b); 201; 56; 2

Judgement Text

T HE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA ( A M) & SHRI PAWAN SINGH (JM) M.A. 319/MUM/2019 ARISING OUT OF I.T.A. NO. 5374 /MUM/ 201 6 (ASSESSMENT YEAR 20 12 - 1 3 ) MR. SURENDRA D. SHAH 1 ST FLOOR DEEPAVALI BUNGLOW CARTER RO AD NO. 5 BORIVALI WEST MUMBAI. PAN : AAAJPS0365B V S . ACIT - 32(3) ROOM NO. 108 1 ST FLOOR C - 11, PRATAYAKSHKAR BHAVAN BNDRA KURLA COMPLEX BANDRA - E MUMBAI - 400 051. ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY SHRI AJAY SINGH DEPARTMENT BY SHRI SAMATHA MUL LAMURI DATE OF HEARING 08 . 11 . 201 9 DATE OF PRONOUNCEMENT 07 . 0 1 . 20 20 O R D E R PER SHAMIM YAHYA (AM) : - BY W AY OF THIS MISCELLANEOUS APPLICATION THE ASSESSEE SEEKS RECTIFICATION OF MISTAKE APPARENT FROM RECORD UNDER SECTION 254 ( 2 ) OF THE IT A CT, IN THE ORDER OF THIS T RIBUNAL IN ITA NO. 5374/MUM/2016 VIDE ORDER DATED 19.11.2019. 2. W E HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. THE SUBMISSION OF THE COUNSEL OF THE ASSESSEE POINTING OUT MISTAKES APPARENT FROM RECORD IN THE ORDER OF THE TRIBUN AL NEEDING RECTIFICATION OF MISTAKE ARE SUMMARI Z ED AS UNDER : - 1. ASSESSING OFFICER MADE ADDITION U/S 56(2)(VII)(A) OF THE ACT. HOWEVER THE GROUNDS OF APPEAL TAKEN UP BEFORE THE TRIBUNAL BY THE DEPARTMENT ARE NOT FOR SECTION 56(2XVII)(A) OF THE ACT BUT AR E ON SECTION 56(2)(VII)(B) OR (C). HENCE THE ENTIRE APPROACH AND THE GROUND ITSELF IS WRONG, MISLEADING AND CONTRARY. HON. TRIBUNAL ITSELF MISDIRECTED ON THIS ISSUE FOR NOT APPLYING THE CORRECT PROVISION OF LAW NAMELY SECTION 56(2)(VII)(A) OF THE ACT. MR. SURENDRA D. SHAH 2 2. VIEWED FROM ANY ANGLE AS APPELLANT HAS NOT RECEIVED ANY MONEY OR PROPERTY, THE PROVISION OF SECTION 56(2)(VII) ARE NOT APPLICABLE AT ALL. 3. WHAT WAS THE ESSENCE WAS FSI RIGHTS WHICH IS NOT COVERED BY THE TERM PROPERTY HAS GIVEN THE DEFINITION OF PROPERTY AS DEFINED IN CLAUSE (D) OF THE EXPLANATION TO SECTION 56(2)(VII) OF THE ACT. 4. THE TRIBUNAL USES THE TERM FLAT AT PARA 6, HOWEVER THERE IS NO FLAT AT ALL INVOLVED BUT FSI RIGHTS . 5. TRIBUNAL IN PARA 6 HAS TRAVELLED BEYOND THE SCOPE OF THE APPEAL BY S TATING BENAMI TRANSACTION, WHEN SUCH A REFERENCE WAS NEITHER AT THE STAGE OF A.O OR CIT(A) OR EVEN IN THE GROUNDS OF APPEAL BEFORE I TAT NOR SUCH ARGUMENT WERE ALSO NOT ADVANCE BEFORE AT THE TIME OF HEARING. 3. I N THIS REGARD WE MAY GAIN FULLY REFERRED TO THE RELEVANT PORTION OF THE ITAT WHICH READS AS UNDER : - 3. BRIEF FACTS OF THE CASE ARE THAT THE RETURN OF INCOME WAS FILED ON 31.10.2013 DECLARING TOTAL INCOME OF RS.50,43,424/ - . THE ASSESSEE IS AN INDIVIDUAL RUNNING HIS PROPRIETARY BUSINESS IN THE NAME AND STYLE OF M/S SHRI SAI SHRADDHA ASSOCIATES. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTED BY THE AO THAT THERE IS AN AIR INFORMATION ACCORDING TO WHICH PROPERTY HAS BEEN PURCHASED BY THE ASSESSEE ALONGWITH KUNDANMAL K JAIN FOR WHICH SHRI JAI N HAS MADE PAYMENT OF RS.38,34,200/ - . IT IS THE CONTENTION OF THE AO THAT SHRI KUNDANMAL JAIN HAS MADE PAYMENT ON BEHALF OF THE ASSESSEE WITHOUT ANY CONSIDERATION AND THEREFORE THE ASSESSEE IS DEEMED TO HAVE RECEIVED GIFT FROM AN UNRELATED PERSON WITHOUT A NY CONSIDERATION. THE ASSESSEE SUBMITTED LETTERS FROM SHRI KUNDANMAL JAIN WHEREIN IT WAS STATED THAT HE HAS MADE PAYMENT OF RS 38,34,200/ - BUT 50% OF THE COST OF THE PROPERTY IS RECOVERABLE FROM THE ASSESSEE. THE AO HOWEVER, DID NOT ACCEPT THE CONTENTION O F THE ASSESSEE. THE AO ALSO STATED THAT THE ASSESSEE HAD NOT SHOWN ANY LIABILITY IN HIS RETURN OF INCOME. THE AO THEREFORE ADDED RS 38,34,200/ - AS INCOME UNDER THE PROVISION/OF SEC. 56 (2)(VII)(A) TO THE TOTAL INCOME OF THE ASSESSEE. 4. UPON THE ASSESSEE S APPEAL, THE LD. CIT(A) DELETED THE ADDITION BY HOLDING AS UNDER: IT IS AN UNDISPUTED FACT THAT THE PROPERTY IN QUESTION HAS REGISTERED JOINTLY IN THE NAMES OF SURENDRA D SHAH I.E. APPELLANT AND SHRI KUNDANMAL N JAIN. THE PAYMENT AT THE TIME OF THE REGIS TRATION OF THE PROPERTY HAS HOWEVER BEEN MADE BY KUNDANMAL JAIN ALONE. SHRI JAIN HAS SUBMITTED IN WRITING THAT 50% OF ALL PAYMENTS MADE BY HIM TOWARDS PURCHASE OF THIS PROPERTY IS TO BE BORNE BY THE APPELLANT AND THE SAME AMOUNT IS TO BE RECOVERED BY SHRI JAIN FROM THE APPELLANT. FROM THE FACTS OF THE CASE IT DOES NOT SEEM THAT THE APPELLANT HAS RECEIVED ANY MONEY OR PROPERTY FROM SHRI JAIN WITHOUT ANY CONSIDERATION. FURTHER THE REGISTRATION OF PROPERTY ALSO CONTAINS THE NAME OF SHRI JAIN. THUS IT IS NOT TH E CASE THAT SHRI JAIN HAS PURCHASED PROPERTY IN THE NAME OF THE APPELLANT. ON THE OTHER HAND' SIMPLY SEEMS TO BE A CASE WHERE PROPERTY MR. SURENDRA D. SHAH 3 IS JOINTLY PURCHASED BY TWO PERSONS, ONE OF WHOM MAKES THE INITIAL PAYMENT AND RECOVERS THE SAME FROM OTHER PARTY SUBSEQU ENTLY. IN THIS SITUATION, THERE WILL BE NO APPLICATION OF SEC. 56(2)(VII)(A). THE GROUNDS OF APPEAL NO. 2 IS THEREFORE ALLOWED AND AN ADDITION OF RS 38,34,200/ - IS DELETED. 5. AGAINST THE ABOVE ORDER, THE REVENUE IS IN APPEAL BEFORE US. 6. UPON HEARING BO TH THE COUNSEL AND PERUSING THE RECORDS, WE FIND THAT SHRI KUNDANMAL JAIN HAD PAID A SUM OF RS.38,34,200/ - FOR THE REGISTRATION OF A FLAT IN THE NAME OF SHRI KUNDANMAL JAIN AND THE ASSESSEE. THE ASSESSEE IN THIS REGARD HAS SUBMITTED LETTERS FROM SHRI KUNDA NMAL JAIN THAT HE HAD MADE A PAYMENT OF RS.38,34,200/ - , I.E., 50% OF THE COST OF THE PROPERTY AS RECOVERABLE FROM THE ASSESSEE. IN THIS REGARD, IT IS NOTED THAT NEITHER THERE IS ANY AGREEMENT ON RECORD NOR THERE IS ANY INFORMATION THAT THE AFORESAID SUM HA S BEEN PAID BY THE ASSESSEE. THE A.O. HAS ALSO NOTED THAT THE ASSESSEE HAS NOT SHOWN THE AMOUNT AS HIS LIABILITY. IN THESE CIRCUMSTANCES, THE CLAIM OF THE ASSESSEE AND THE SAID LETTERS ARE TOTALLY SELF SERVING STATEMENTS DEVOID OF ANY COGENCY. THE LD. CIT( A) HAS WITHOUT ANY APPLICATION OF MIND HELD THAT SECTION 56(2)(VII)(A) IS NOT APPLICABLE ON THE FACTS OF THE CASE. WHEN THE PAYMENT IS MADE BY ANOTHER PERSON, THERE IS NO REASON WHY THE PROPERTY IN QUESTION WILL BE REGISTERED IN THE JOINT NAME OF THE ASSES SEE. AS A MATTER OF FACT, THE ABOVE TRANSACTION IS SQUARELY HIT BY THE PROHIBITION OF BENAMI PROPERTY TRANSACTION ACT. HENCE, WE SET ASIDE THE ORDERS OF THE LD. CIT(A) AND RESTORE THAT OF THE A.O. 4. U PON CAREFUL CONSIDERATION WE FIND THAT ISSUE OF APPARE NT MISTAKE RAISED WITH REFERENCE TO THE ERROR IN SPECI FYI NG SECTION IN THE GROUNDS OF APPEAL BY REVENUE IS TOTALLY IRRELEVANT AS THE ITAT HAS REVERSED THE ORDER OF CIT (A) AND RESTORED THE ORDER OF ASSESSING OFFICER. THE REVENUE WAS AGGRIEVED BY THE ORDER OF LEARNED CIT(A) WHICH HAS BEEN DEALT WITH BY THE ITAT. THE ASSESSEE IN THE GARB OF A REFERENCE TO SECTION IS SEEKING A REVIEW OF THE ORDER WHICH IS NOT PERMISSIBLE UNDER SECTION 25 4( 2) O F THE IT A CT . THE REFERENCE TO WORD FLAT IN THE ABOVE SUBMISSION IDENTIFYING A MISTAKE APPARENT F ROM RECORD IS RELEVANT ONLY TO THE EXTENT THAT WORD FLAT HAS BEEN U SED IN THE P ARAGRAPH 5 LINE 3 AS AGAINST THE WORD PROPERTY USED THROUGHOUT THE ORDER. ACCORDINGLY , W E RECTIFY THE AFORESAID ORDER TO THE EXTENT THAT THE WORD FLAT IN PARAGRAPH 5 LINE 3 SHOULD BE READ AS PROPERTY . THIS BY NO STRETCH OF IMAGINATION RENDERS ANY MISTAKE APPARENT FROM RECORD CALLING FOR A REVIEW OF THE ORDER. 5. AS REGARDS THE ASSESSEE'S OBJECTIONS REGARDING OBSERVATIONS OF THE ITAT, I N OUR CONSIDERED OPINION THE SAME ALSO COMES UNDER THE REALM OF REVIEW OF THE ORDER. IT IS SETTLED LAW THAT REVIEW OF THE ORDER IS NOT PERMISSIBLE UNDER MR. SURENDRA D. SHAH 4 SECTION 254 (2) OF THE IT A CT. ACCORDINGLY THIS MISCELLA N E OUS A PPLICATION BY THE ASSESSEE STANDS DISMISS ED . ORDER HAS BE EN PRONOUNCED IN THE COURT ON 7 . 1 . 20 20 . SD/ - SD/ - ( PAWAN SINGH ) (SH A MIM YAHYA ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 07 / 0 1 / 20 20 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( ASSISTANT REGISTRAR ) PS ITAT, MUMBAI