ASHUTOSH V. JHAVERI, MUMBAI V. ITO - 17(1)(2), MUMBAI

MA 631/MUM/2019

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 3923 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 22 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 14-06-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 23-12-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Capital asset
• Section: 54; 260A; 254(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “A”, MUMBAI BEFORE SHRI S. RIFAUR RAHMAN, HON'BLE ACCOUNTANT MEMBER AND SHRI RAHUL CHAUDHARY, HON'BLE JUDICIAL MEMBER MA.No. 631/MUM/2019 [ARISING OUT OF ITA No. 5122/MUM/2016 (A.Y: 2007-08)] Ashutosh V. Jhaveri 259, 2 nd Floor Shroff Chambers Bazargate Street, Fort Mumbai -400001 PAN: ABAPJ2406L v. Income Tax Officer – 17(1)(2) Kautilya Bhavan, C-41 to C-43 G-Block, Bandra Kurla Complex Bandra(E), Mumbai - 400051 (Appellant) (Respondent) Assessee by : Shri Tanmay Phadke Department by : Shri Mehul Jain Date of Hearing : 13.05.2022 Date of Pronouncement : 15.06.2022 O R D E R PER S. RIFAUR RAHMAN (AM) 1. Through this Miscellaneous Application assessee is seeking for recall of the order passed by the Tribunal in ITA.No. 5122/Mum/2016 dated 24.06.2019. 2. At the time of hearing, Ld. AR submitted as under: - 2 MA.No. 631/MUM/2019 Ashutosh V. Jhaveri “While adjudicating the Grounds of Appeal, the Hon'ble Tribunal has observed and held in para 13.1 (pages 13-14) of the order - "It is settled law that immovable property is conveyed by a duly registered deed. Further, it is the date of execution of registered document, not the date of delivery of possession or the date of registration of document which is relevant. Once the executed documents are registered, the transfer will take place on the date of execution of documents and not on the date of registration of documents as held by the Hon'ble Supreme Court in Alapati Vekataramiah v. CIT (1965) 57 ITR 185 (SC) and CIT v. Podar Cements Pvt. Ltd. (1997) 226 ITR 625 (SC). In the instant case the purchase agreement being executed on 24.02.2011, that would be the date for reckoning the period of holding. Consequently, respectfully following the ratio laid down in the above decisions by the Hon'ble Supreme Court, we uphold the order of the Ld. CIT(A) and dismiss the 1st ground of appeal." The facts relating to the same are enumerated again as under — The Applicant sold property being residential flat under construction booked jointly in the names of the Applicant, his father, Mr Vrajlal U Jhaveri and his brother, Mr Sanjay Jhaveri (each having 1/3 share) as explained in detailed in the Table below - Sr No Date Events 1 05-10-06 Property being residential flat under construction booked jointly in the names of Ashutosh Jhaveri, Vrajlal Jhaveri and Sanjay Jhaveri (each having 1/3 share) for Rs 87,76,500/- from Builder, Ekta Supreme Housing. 2 23-02-11 Stamp duty of Rs 5,97,875/- paid on purchase agreement for flat under construction allotted in October 2006. Bank statement highlighting payment of stamp duty paid is submitted along with letter no VJC-HO/176/01/2014 dated January 27, 2014 3 24-02-11 Purchase Agreement executed for flat under construction for consideration of Rs 87, 76,500/- as set- allotment in 2006. 4 11-03-11 The rights in residential flat under construction (not residential flat) sold for Rs 1,25,00,000 3 MA.No. 631/MUM/2019 Ashutosh V. Jhaveri Accordingly, long term capital loss was computed and declared as under - Particulars Ashutosh Jhaveri Vrajlal Jhaveri Sanjay Jhaveri Total Sales Consideration (a) Rs 41,67,000/- Rs 41,66,500/- Rs 41,66,500/- Rs 1,25,00,000/- Stamp Duty(b) ₹ 2,09,707/- Rs2,09,707/- Rs2,09,707/- Rs6,29,121/- Purchase Cost( c) Rs 29,17,586/- Rs 29,17,586/- Rs 29,17,586/- Rs87,52,7581 The Applicant along with his father and brother jointly booked flat under construction and the subject of transfer giving rise to capital gains is allotment of flat under construction with the date of acquisition of the capital asset to be reckoned from the date of booking that is 5-10-2006. The Applicant submits that the rights in the said flat that were duly transferred to third party in the year under consideration were duly held by the Applicant from 05-10- 2006 till the date of the transfer to the third party vide agreement dated 11.03.2011. The Applicant respectfully submits that during the course of the arguments before the Hon'ble Tribunal the aforesaid decisions of Apex Court were neither cited nor referred to the Applicant nor the Department. The aforesaid decisions are distinguishable on facts and not applicable to the facts of the Applicant's case as explained herein below — a) in the instant case, the issue to be considered was that the asset transferred was a 'long term capital asset' and not 'short term capital asset' as per section 2(42A) of the Act; Both the judgments of the Apex Court in Alapati Venkataramiah's case and Podar Cements' case consider "transfer" in case of immovable property and not the provisions of s 2(42A) and s 2(29A) of the Act regarding holding period of asset. b) The Hon'ble ITAT in Anita Kanjani's case (ITA No. 2291/Mum/2015 dated 13/02/2017 — Exhibit 2) has considered and analysed s 2(42A) of the Act in the context of an asset as under - "Section 2(42A) in the Income- Tax Act, 1961 (42A) "short- term capital asset" means a Capital asset held by an assessee for not more than thirty- six months immediately preceding the date of its transfer": Perusal of aforesaid definition shows that the legislature has used the expression 'held'. It is further noted by us that in various other allied or similar sections, the legislature has preferred to use the expression 'acquired' or 'purchased' e.g. in section 54 / 54F. Thus, it shows that the legislature was conscious while making use of this 4 MA.No. 631/MUM/2019 Ashutosh V. Jhaveri expression. The expressions like 'owned' has not been used for the purpose of determining the nature of asset as short term capital asset or long term capital asset. Thus, the intention of the legislature is clear that for the purpose of determining the nature of capital gain, the legislature was concerned with the period during which the asset was held by the "assessee for all practical purposes on de facto basis. The legislature was apparently not concerned with absolute legal ownership of the asset for determining the holding period. Thus, we have to ascertain the point of time from which it can be said that assessee started holding the asset on de facto basis," From the above analyses in Anita D Kaniani's case, it means that the commencement of a period of holding is not dependent upon or restricted/ qualified by any other events such as the date of an agreement, its registration or physical possession of a capital asset. The Applicant respectfully submits that in the instant case the period for which the asset was held in respect of flat allotted under construction is to be considered and the same is explained and directly covered in the Applicant's favour by Hon'ble ITAT's order in Anita D Kanjani's case and followed in Sanjaykumar F Jain v ITO ITA No.4853/Mum12016 dated 14-08-2018 and ACIT v Kiran G Gadhia ITA No 4021/Mum/2015 dated 22-03- 2017 and due to this prejudice has been caused to me as I have not been granted an opportunity to deal with the distinguishing features in the cases of Alapati Venkataramiah and Podar Cements relied upon by the Hon'ble Tribunal. It is humbly submitted that the abovementioned holding period commencing from 05-10- 2006 and ending on 11-03-2011 exceeds a period of 36 months as mentioned in Section 2(42A) of the Act and thereby classifies the capital asset under consideration as a long term capital asset as duly claimed by the Applicant. The Applicant prays that the distinguishing features pointed out go to the root of the matter for consideration and in the interest of fairness and justice, grant an opportunity to the Applicant to place the case on the applicability or otherwise of the decisions relied upon. The Applicant humbly submits that this constitutes a mistake apparent from record for amendment or rectification. Another inadvertent mistake apparent from the record is that issue regarding one-third apportionment in the hands of the Applicant raised in Ground of Appeal no 1.03 has not been adjudicated upon. On the facts and in the circumstances of the case and in law, the Applicant humbly prays that the mistake(s) apparent from the record in the order dated June 24,2019 may be amended or rectified for a fresh decision on ground of appeal no 1 raised by me. 5 MA.No. 631/MUM/2019 Ashutosh V. Jhaveri The Applicant relies on the decision of jurisdictional Bombay High Court in lnventure Growth and Securities Ltd v Income-Tax Appellate Tribunal & Others 324 hR 319 (Born) and Naresh K. Pahuja v. Income-Tax Appellate Tribunal & Others 375 ITR 526 (Born). The order of the Hon'ble Tribunal in the Applicant's case was passed on June 24,2019 and received by the Applicant on July 27,20 19. In Peterplast Synthetics P. Ltd. v. ACIT [2014] 364 ITR 16, it has been held that starting point for limitation is from the actual date of receipt of order of the Tribunal. In view of this, the application u/s 254(2) of the Act is within time. The Applicant also submits that an appeal under section 260A of the Act has also been preferred by the Applicant before the Hon'ble Bombay High Court vide appeal no ITXAI 3215/2019 (Exhibit 3) which is pending admission, not barred by the principle of finality or doctrine of merger, and hence the Hon'ble Tribunal may consider this application. The Applicant craves leave to rely on R. W. Promotions P. Ltd v Income-Tax Appellate Tribunal & Others [2015] 376 ITR 126 (Born). The Applicant humbly prays and requests your honour to consider the above favourably for which the Applicant shall be grateful.” 3. Further, Ld. AR submitted that assessee has relied on certain decisions which was not considered by the ITAT before deciding the issue. 4. On the other hand, Ld.DR objected to the submissions made by the Ld. AR and submitted that opportunity not given to the assessee on the reportable judgment adopted by the ITAT is binding on the assessee. Therefore, this is not a mistake apparent on record. Further, he brought to our notice Page No. 57 of the Paper Book filed by the assessee, with regard to the cases not followed by the ITAT, he brought to our notice Page No.15 of the Tribunal order to submit that the bench has clearly 6 MA.No. 631/MUM/2019 Ashutosh V. Jhaveri observed that all the cases relied on by both the sides have been duly taken into consideration while deciding the matter. The omission of reference to some of such cases in the order is either due to their irrelevance or to ease the order from the burden to the repetitive ratio decidendi laid down in such decisions. 5. On merits of the case, Ld.DR brought to our notice Page No. 8 of the Tribunal order and submitted that there was no allotment letter also in the present case hence it clearly indicates that the issue involved is distinguishable. Therefore, he relied on Sujanddin Kasimsab Sayyed v. ITO [114 taxman.com 168 (Mumbai Tribunal)]. With regard to percentage of holding claimed by the assessee he submitted that there was no specific ground raised by the assessee. Therefore, this issue should not be entertained. 6. Considered the rival submissions and material placed on record, we observe from the Miscellaneous Application filed by the assessee that the bench has considered certain decisions of the Hon'ble Apex Court and decided the issue on hand. The grievance of the assessee that these decisions were not put before them, before the issue was decided by the bench. In that regard the assessee has relied on certain case laws in 7 MA.No. 631/MUM/2019 Ashutosh V. Jhaveri which the bench has not considered the decision of the another Tribunal. since the decision of the another Tribunal was adopted by the bench without giving a proper opportunity to the assessee were considered as mistake apparent on record, accordingly the order was recalled. However, in the present case we observe that the decision adopted by the bench are reported decisions that too all are Hon'ble Apex Court Orders. Therefore, these decisions even though not quoted before the assessee are equally binding on the assessee. Therefore, in our considered view there is no mistake apparent on record. 7. Coming to the issue of decisions not considered by the bench which was relied by the assessee at the time of hearing, we observe that at Page No. 15 of the Tribunal order the bench has clearly indicated that it has considered all the decisions and those were not included in the order due to the fact that these were irrelevant or to ease the order from the burden to the repetitive ratio decidendi laid down in such decisions. It clearly indicates that the cases relied by the assessee are already considered by the bench and it is only not reproduced in the body of the order. Therefore, it does not make the order appeared to be mistake apparent on record. Therefore in our considered view the order can be rectified u/s.254(2) of the Act only when the mistake is apparent on record and 8 MA.No. 631/MUM/2019 Ashutosh V. Jhaveri any other mistake which leads to detail submissions and explanations required to rectify the mistake will only leads to review of the order which cannot be rectified u/s. 254(2)of the Act. Therefore, we are inclined to dismiss the Miscellaneous Application filed by the assessee. 8. In the result, Miscellaneous Application filed by the assessee is dismissed. Order pronounced in the open court on 15 th June, 2022. Sd/- Sd/- (RAHUL CHAUDHARY) (S. RIFAUR RAHMAN) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai / Dated 15/06/2022 Giridhar, Sr.PS Copy of the Order forwarded to: 1. The Appellant 2. The Respondent. 3. The CIT(A), Mumbai. 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. //True Copy// BY ORDER (Asstt. Registrar) ITAT, Mum