Income Tax Appellate Tribunal - Mumbai
Kamlini D Ashar, Mumbai vs Department Of Income Tax on 13 July, 2009
आयकर अपील य अ धकरण,
धकरण, मंुबई यायपीठ 'ए
ए' मंुबई
IN THE INCOME TAX APPELLATE TRIBUNAL
"A" BENCH, MUMBAI
ी पी.
पी.एम.
एम. जगताप,
जगताप, लेखा सद य,
य एवं ी अ मत शु ला, या यक सद य के सम
BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND
SHRI AMIT SHUKLA, JUDICIAL MEMBER
आयकर अपील सं. / ITA no. 5362/Mum./2009
( नधारण वष / Assessment Year : 2006-07)
आयकर अपील सं. / ITA no. 7066/Mum./2010
( नधारण वष / Assessment Year : 2002-03)
Asstt. Commissioner of Income Tax
Circle-19(3), Room no.305 ....................... अपीलाथ /
3rd Floor, Piramal Chambers, Parel
Appellant
Mumbai 400 012
बनाम v/s
Mrs. Kamlini D. Ashar
601, Parishram Apartment ................... यथ /
40, Pali Hill, Bandra (West)
Respondent
Mumbai 400 050
थायी लेखा सं./ Permanent Account Number - AADPA6661N
राज व क ओर से / Revenue by : Mr. C.J. Tejpal
नधा रती क ओर से / Assessee by : Mr. B.V. Jhaveri
सनवाई
ु क तार ख / आदे श घोषणा क तार ख /
Date of Hearing - 07.08.2012 Date of Order - 24.08.2012
आदे श / ORDER
अ मत शु ला, या यक सद य के ारा /
PER AMIT SHUKLA, J.M.
The present appeal preferred by the Revenue, is directed against the impugned order dated 13th July 2009, passed by the learned Commissioner Mrs. Kamlini D. Ashar 2 (Appeals)-XIX, Mumbai, for the quantum of assessment passed under section 143(3) r/w section 147, of the Income Tax Act, 1961 (for short "the Act") for assessment year 2006-07, on the following grounds of appeal:-
"(1) On the fact and in the circumstances of the case and in law the Learned failed to appreciate the fact that clause (b) of Section 2(42A) is only for determining the period held by the assessee for the purpose of treating the asset as a short term capital asset and long term capital asset and Explanation (iii) to Section 48 clearly states that the Cost Inflation Index shall be from the first year in which the asset was held by the assessee.
(2) On the fact and in the circumstances of the case and in law the Learned CIT(A) erred in holding that the conditions prescribed u/s 2(47)(v) have not been satisfied despite M/s Unique Enterprises obtaining the power of attorney and unhindered access to the property by virtue of Clauses 12(b) and 15(a) of the agreement dated 01.01.2002.
(3) On the fact and in the circumstances of the case and in law the Learned CIT(A) erred in holding the year of taxability of capital gain as A.Y. 2006-07 and therefore the assessee is entitled to deduction u/s 54F of the I.T.Act, 1961.
(4) On the fact and in the circumstances of the case and in law the Learned CIT(A) erred in ignoring the fact that the payment made to M/s Bhadani Associates is a capital expenditure incurred towards a distinctly different project based on an agreement with the assessee's Late husband Shri D.R. Ashar and M/s Bhadani associates and is not incurred for earning the business income of the assessee.
(5) On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in ignoring the fact that the assessee has failed to produce books of account, bill and vouchers to support her claim of expenditure of ` 1.25 crores. The learned CIT(A) in the interest of fairness and justice ought to have remanded the issue to Assessing Officer for examination of this claim afresh."
2. Facts in brief, relevant for ground no.1, are that the assessee, during the year, has declared long term capital gains arising out of sale of stock-in- trade, which was a capital asset prior to its conversion as per the provisions of section 45(2) of the Act. Such a capital asset was acquired by the assessee under a "Will" after demise of her husband, Mr. R.D. Ashar, on 17th February 1999. The said asset was owned and acquired by Late Mr. D.R. Ashar, in the year 1950, which was much prior to the year 1981. Accordingly, the assessee has claimed the indexation of the same asset Mrs. Kamlini D. Ashar 3 w.e.f. 1st April 1981, as per the provisions of section 48 r/w section 49(1)(ii) of the Act. The Assessing Officer held that though the capital asset was converted into stock-in-trade in the year 2001-02, but the stock of indexation would be taken from the year 1998-99 i.e., the year in which the asset was bequeathed to the assessee. The Commissioner (Appeals) allowed the assessee's contention that she is entitled to indexation from 1st April 1981, after following the decision of Kolkata Bench of the Tribunal in Mina Deogan, 19 SOT 183.
3. At the outset, it was admitted by both the parties that this issue stands covered in favour of the assessee by the decision of Mumbai Bench of the Tribunal in assessee's own case for assessment year 2007-08 in ITA no.5615/Mum./2010, vide order dated 21st October 2011, wherein the Tribunal has followed the decision of Mumbai Special Bench of the Tribunal in DCIT v/s Manjula J. Shah, 35 SOT 105 (Mum.) (SB).
4. After carefully considering the findings of the Commissioner (Appeals) and also the decisions of the Tribunal in assessee's own case for assessment year 2007-08 cited supra, we find that an identical issue has been decided by the Tribunal in favour of the assessee, wherein the Tribunal has held that the assessee has inherited the property which was acquired by her husband way back in the year 1950 and, therefore, she is entitled for benefit of indexation w.e.f. 1st April 1981. Consequently, ground no.1, raised by the Revenue is hereby dismissed.
5. In ground no.2, the Revenue has challenged the findings of the Commissioner (Appeals) that capital gain arose out of sale of capital asset in the assessment year 2006-07, instead of assessment year 2002-03, as held by the Assessing Officer.
6. Relevant facts for adjudication of this ground are that the assessee had entered into a development agreement in 1st January 2000, with M/s. Unique Enterprises to develop and sell the property. The assessee, in response to the explanation sought by the Assessing Officer as to why the capital gain arising out of such an agreement should not be taxed in the assessment year Mrs. Kamlini D. Ashar 4 2002-03 itself instead of assessment year 2006-07, submitted that the assessee has converted the capital asset, which was received by her after the death of her husband, into stock-in-trade in the year 2000. In pursuance to that, a development agreement was entered into with Unique Enterprises, on 1st January 2000. Such a conversion of capital asset into stock-in-trade in the year 2000 (i.e., on 15th February 2000) is treated as a transfer under section 2(47). However, by virtue of section 45(2), assessment of such a capital gain is postponed to the year in which stock-in-trade is actually sold or otherwise transferred by the assessee. It was further submitted that though the agreement was entered into with Unique Enterprises in the year 2001-02, neither possession was given to them nor the land was transferred in their names. She has applied for development of land to the Thane Municipal Corporation, vide application dated 16th February 2005, and the commencement of certificate was granted on 18th March 2005. It was only after the said permission, the construction activity was started in the year 2005-06, during which the agreement for sale of flats (i.e., stock-in-trade) was entered into with the buyers and amount was received against the same. Thus, the stock-in-trade was sold or otherwise transferred in the year 2005-06, therefore, the capital gain will be chargeable to tax in the assessment year 2006-07 only, and accordingly, the assessee has shown capital gains in the assessment year 2006-07 and also the business income from the sale of such flats.
7. The Assessing Officer rejected the said contentions of the assessee and held that in view of the provisions of section 53A of the Transfer of Property Act, there was a part performance and transfer as per the provisions of section 2(47)(v) of the Act, there was a transfer in the year in which agreement has taken place i.e., in the assessment year 2002-03. He though admitted that the property was received by the assessee after the death of her husband in the year 1999 and was converted into stock-in-trade in the year 2000 (precisely on 15th February 2000). However, he further stated that the assessee had entered into agreement with Unique Enterprises in January 2002, and as per the terms of agreement, Unique Enterprises got all the rights to develop the property and agreed to pay total consideration of ` Mrs. Kamlini D. Ashar 5 40,00,000, and 40% of the sale proceedings of each flat to the assessee out of which a sum of ` 1,00,000 was paid immediately and remaining was to be paid in the subsequent year as per the mutual agreement. The Assessing Officer referred to the various clauses of the agreement specifically clauses no.4, 9, 10, 12, 14 and 15, contents of which are reproduced at Pages-6, 7 and 8 of the assessment order. From such clauses, he inferred that all the essential conditions of section 53A of Transfer of Property Act gets fulfilled and, therefore, capital gain is taxable in the year 2002-03 and not in the assessment year 2006-07. In support of his contentions, he also relied on the judgment of Jurisdictional High Court in Chaturbhuj Dwarkadas Kapadia v/s CIT, [2003] 260 ITR 491 (Bom).
8. In the first appeal, detail submissions were made by the assessee which was mainly on the ground that once a capital asset has been converted into stock-in-trade, which has been admitted by the Assessing Officer on 15th February 2000, the chargeability of tax would be in the year in which such stock-in-trade is sold or otherwise transferred. It was further submitted that if the entire reading of agreement dated 1st January 2002, entered into with Unique Enterprises is considered in true spirit, then it would be amply clear that the assessee has not handed over any possession of the land and the agreement was only for the development of the property and it was a kind of license for the purpose of construction. This was corroborated by the facts that the certificate for the commencement of construction activity was received only in the year 2005 and there was no activity undertaken till that time. These submissions of the assessee have been incorporated in Paras-2.3 to 2.15, which are running from Pages-11 to 15 of the appellate order.
9. The Commissioner (Appeals) accepted the contentions of the assessee and gave elaborate findings from Pages-16 to 21, after considering the provisions of section 45(2), various clauses of the agreement and the judgment of Jurisdictional High Court in Zuari Estate Development and Investment Co. Pvt. Ltd. v/s DCIT, [2004] 271 ITR 269 (Bom.), wherein the judgment of Chaturbhuj Dwarkadas Kapadia (supra) has been considered.
Mrs. Kamlini D. Ashar 6 Considering all the facts and taking into consideration various other judicial pronouncements, he held that the capital gain should be taxed in the year 2006-07.
10. Before us, the learned Departmental Representative drew our attention to various clauses of the agreement and specifically with regard to Clauses- 12 and 15 of the agreement dated 1st January 2002, and submitted that the assessee has not only given the possession of the property but also substantial rights for carrying out the execution of the developed work on the construction. There was also a part performance which is evident from the fact that the assessee ha received a sum of ` 1,00,000, towards consideration and even if such an amount is meager, it will not obliterate the factum of part performance which has been done in the assessment year 2002-03. He pointed out that the conditions provided in section 2(47)(v) of the Act, stands fully discharged and the Commissioner (Appeals) has not given any findings as to how these conditions are not fulfilled. He submitted that most of the observations of the Commissioner (Appeals) are inconclusive and even the judgment relied upon by him are not relevant for the issue involved. He drew our attention to various findings of the Commissioner (Appeals) vis-à-vis the conclusion drawn by the Assessing Officer and submitted that not only the transfer has taken place in the year 2002-03, but also the same should be taxed as long term capital gains in the same assessment year.
11. On the other hand, learned Counsel submitted that once it is admitted fact that the capital asset as converted into stock-in-trade in the year 2000, the chargeability of capital gains on account of sale of such capital asset can only be considered in terms of section 45(2). He further submitted that there is no dispute regarding the fact that sale of flats constructed in the said property was sold from the assessment year 2006-07 onwards and the assessee have shown capital gains on the receipt of such sale of flats and also the business income which has been accepted by the Assessing Officer. Therefore, the findings given by the Assessing Officer cannot be sustained.
Mrs. Kamlini D. Ashar 7
12. We have carefully considered the rival contentions, the findings given by the Commissioner (Appeals) as well as by the Assessing Officer and have also perused the material available on record. In the present case, the undisputed facts are that, the assessee has inherited the property by way of will after the death of her husband in the year 1999, which was converted into stock-in-trade in the year 2000 i.e., precisely on 15th February 2000. Such a conversion of land into stock-in-trade has been disclosed in the balance sheet filed along with the return of income, since assessment year 2000-01 and onwards. The assessee has entered into the development agreement with Unique Enterprises on 1st January 2002, i.e., after conversion of capital asset into stock-in-trade. By virtue of the agreement, the assessee was to receive a sum of ` 40,00,000, plus 40% of the entire sale of flats in the constructed property. Such a conversion of capital asset into stock-in-trade is treated as transfer within the meaning of section 2(47)(vi). However, as per the provisions of section 45, which deals with the charging of capital gains carves out an exception in sub-section (2), the profit and gains arising from transfer by way of conversion of a capital asset into stock-in-trade and provides that the same shall be charged to income tax in the previous year in which such stock-in-trade is sold or otherwise transferred for the purpose of section 48 of the Act. The relevant provisions of section 45(2), for the sake of ready reference, are reproduced below:-
"[(2) Notwithstanding anything contained in sub-section (1), the profits or gains arising from the transfer by way of conversion by the owner of a capital asset into, or its treatment by him as, stock-in-trade of a business carried on by him shall be chargeable to income-tax as his income of the previous year in which such stock-in-trade is sold or otherwise transferred by him and, for the purposes of section 48, the fair market value of the asset on the date of such conversion or treatment shall be deemed to be the full value of the consideration received or accruing as a result of the transfer of the capital asset."
13. On perusal of the above, it is clear that in case of a conversion of capital asset into stock-in-trade, the capital gain would be charged in the year in which such stock-in-trade is sold. In the instant case, once it is not disputed by the Assessing Officer that capital asset acquired by the assessee has been converted into stock-in-trade, then the capital gains would be Mrs. Kamlini D. Ashar 8 charged only in the year in which sale of stock takes place. In the year of sale, the assessee not only has to pay capital gains but also has to pay tax on business income from the sale of such stock-in-trade. Without going into the other reasoning given by the Commissioner (Appeals) as well as the Assessing Officer, we hold that capital gains would be taxed in the year 2006-07, the year in which the assessee has sold the flats which was constructed in the said property. Accordingly, the findings of the Commissioner (Appeals) to the extent that the capital gain is taxable in the year 2006-07, are, therefore, upheld. Thus, the ground no.2, raised by the Revenue stands dismissed.
14. In ground no.3, the Revenue has challenged the deduction under section 54F of the Act, out of the proceeds from the capital gains in the assessment year 2006-07.
15. The Assessing Officer disallowed deduction under section 54F, mainly on the ground that the assessee has purchased flat on 13th July 2004, and the capital gain has arose in January 2002 i.e., time of limit of two years has expired in January 2004. Before the Assessing Officer, the assessee relied upon the decision of CBDT circular no.791, dated 2nd June 2000, wherein the Board has clarified that for making of investment for the purpose of sections 54F, 54EB and 54EC, in the case of conversion into stock-in-trade, the benefit would be given in the year of realization of sale.
16. The Commissioner (Appeals) allowed assessee's claim on the ground that the capital arose in the F.Y. 2005-06 and the flats were sold before 13th July 2005, therefore, for the purpose of exemption under section 54F, the time limit of one year before gets fulfilled. Accordingly, he held that the assessee is entitled for exemption under section 54F.
17. Before us, the learned Departmental Representative relied on the findings of the Assessing Officer and his arguments given with regard to ground no.2.
Mrs. Kamlini D. Ashar 9
18. Learned Counsel for the assessee, on the other hand, relied on the findings of the learned Commissioner (Appeals).
19. We have carefully considered the rival contentions of both the parties and the findings given by the learned Commissioner (Appeals) as well as by the Assessing Officer. Once we have held that long term capital gain has arisen in the financial year 2005-06 and it is also undisputed fact that all the flats have been sold prior to 13th July 2005, the investment made by the assessee in purchase of flat on 13th July 2004, falls within the time limit of one year before, as provided in section 54F of the Act and, therefore, the conclusion drawn by the learned Commissioner (Appeals) are factually and legally correct. Consequently, we uphold the order passed by the learned Commissioner (Appeals) and dismiss the ground raised by the Revenue.
20. In ground no.4, the Revenue has challenged the findings of the learned Commissioner (Appeals) that the payment made to Bhadani Associates is revenue expenditure instead of capital expenditure, as done by the Assessing Officer.
21. The relevant facts, as are incorporated in the order of the learned Commissioner (Appeals) in Para-4.2, are reproduced below:-
"4.2 large land on certain terms, wherein he (i.e. DR. Ashar) was supposed to obtain or clear followings:-
to obtain or clear followings
- Municipal Reservation
- Clearance from ULC
- Converting land from lndustrial Zone to residential Zone.
- Sanction from Thane Municipality for whole layout (i.e. for large land).
(ii) D.R. Asbar could not comply with many of the above things inspit.e of lot of efforts and also due to difference / dispute with cousin brother, till he expired on 1 7.2. 1999, but he continued to accept / maintain that agreement with Bhadani is valid and subsisting.
(iii) On 10.5.2001 MOU was entered by Kamlini Ashar with Bhadani.
(iv) Since lot of time has expired and since land appreciated several times in this time gap, several differences / disputes arose between Mrs. Kamlini D. Ashar 10 Ashar & Bhadani. Bhadani did nothing to develop even after entering MOU on 10.5.2001.
(v) Meanwhile "arrangement" in form of agreement dated I . 1 .2002 was made with M/S Unique Enterprise, whereby Unique Enterprise was to put construction, invest construction cost till realization and get 60% of sale proceeds out of flats and shops to be sold to 3rd parties..
(vi) Approval from Thane Municipality was received on 29.6.2001 for conversion from Industrial Zone to Residential Zone.
(vii) Certain portion of large layout (identified as building C 1, CII & C Ill) was intended to be constructed by M/S Unique Enterprise, 'ubject to few compliances by Kamlini Ashar which was in nature of joint development).
A. Due to "arrangement" with M/S Unique Enterprise, assessee could earn substantial Capital Gain as well as Business Income. If assessee would have allowed Bhadani to develop said land (because agreement with Bhadani was said to be valid & subsisting as observed by Arbitrators who all are retired judges), then assessee would not have earned Business Income. Also there would have been substantial capital loss (instead of substantial Capital Gain), because assessee would have received only Rs.25 Lakhs from Bhadani. Rate fixed with Bhadani was Rs.115/- per sq.feet, whereas rate finally offered for capital gain tax is Rs.550/- per sq.feet i.e. 4.08 crs / 73000 sq.feets."
B) There were broadly two options open to assessee. Either allow Bhadani to develop, based on valid & subsisting agreements dt. 8.4.1988, and get only Rs.115/- per sq.fcet. or Rs.25 Lakhs. OR Let assessee herself with help and joint efforts of some one like Unique Enterprise, get rid of person like Bhadani and possibly earn sizeable income (capital gain as well as Business Income) and also get rid of burden of taking arc of such sizeable open vast land.
C) Since Bhadani did not cooperate even after MOU dt. 10.5.2001, finally assessee had no choice but to put an end with him. Therefore, assessee herself acted as developer with help of Unique Enterprise. In the whole scene, there was no loss of revenue. Arbitration Award have granted damages in favour of Bhadani for loss of profit. The appellant's appeal against it has been rejected while Bhadani has appealed further for enhancement of the Award, The assessee had thereafter claimed 1.15 crs. either U/S 37(1) or Section 28.
22. The Assessing Officer disallowed the payment of ` 1,15,96,489, paid to Bhadani Associates on the ground that it was not a business expenditure / loss but was for title of land / current project, therefore, it is a capital expenditure.
Mrs. Kamlini D. Ashar 11
23. The learned Commissioner (Appeals) held that such a payment was on account of arbitration award which has been crystallized and determined in this year, therefore, the same was to be allowed as business expenditure in this year. Further, these payments are directly connected with the purpose of assessee's business which is evident from the fact that it relates to the same land on which current project has been executed and the expenditure incurred are for protection and preservation of business asset. He relied on the judgment of Hon'ble Supreme Court in Dalmia Jain and Co. Ltd. v/s CIT [1971] 081 ITR 754 (SC).
24. Before us, both the parties have relied upon respective orders of the authorities below.
25. After carefully considering the rival contentions and on going through the facts and the findings of the authorities below, we find that the reasoning given by the learned Commissioner (Appeals) is not only factually correct but also legally tenable as such expenditure has been incurred for the preservation of business assets. Once it is an admitted fact that land in question is a stock-in-trade and the assessee has done business from such a property by developing the same and is deriving business income from it, such an expenditure relating to business asset amounts to expenditure relating to business only. Therefore, we do not find any infirmity in the findings of the learned Commissioner (Appeals) and it is, accordingly, affirmed. Thus, ground no.4, is hereby dismissed.
26. Ground no.5, relates to the finding of the learned Commissioner (Appeals) with regard to allowance of claim of expenditure of ` 1.25 crores.
27. The Assessing Officer has made disallowance of ` 1.25 crores incurred on the infrastructure development on the ground that the same has been claimed through one bill raised by Unique Enterprises
28. Before the learned Commissioner (Appeals), it was contended that the assessee has not only produced the summarised bill but also detailed bill Mrs. Kamlini D. Ashar 12 with measurement of work done, as has been raised by Unique Enterprises, along with copy of ledger account in the books of Unique Enterprises.
29. The learned Commissioner (Appeals), after considering the said evidence, came to the conclusion that the assessee has incurred expenditure as well as has made constructive payment to Unique Enterprises which the assessee was obliged to do so in view of the agreement that the assessee, which has to receive 40% of the entire sale price of flats, is also liable for bearing the expenditure. The learned Commissioner (Appeals) has deleted the addition after giving a detailed findings from Paras-7.2 to 7.6, which is for the sake of ready reference, is reproduced below:-
"7.2 1 have perused the assessment order and the written submissions. The only objection of the AO is that the expenditure on infrastructure expenses has been shown in one bill, hence not allowable. He has not questioned the entries in the bill or found anything adverse. It is also relevant that he has partially allowed this infrastructure. Expenses in the nature of lift expenses of Rs. 11,58,000/-.
7.3 From the facts on record, it is obvious that the appellant had entered into agreement with M / s. Unique Enterprises on 01.01.2002 whereby she had undertaken to bear the cost of this infrastructure. Thus, it is not an informal arrangement worked out later as per mutual concurrence. The specific infrastructure work, which was in be carried out as per preamble of it dated 01.0 1.2002 were also developed. They were --
(i) Water bound Mucaden & Asphalted RCA
(ii) Storage water drains
(iii) Sewerage
(iv) Water mains
(v) Electricity
(vi) Sub-stations
(vii) lay-out garden
(viii) 40% cost of lift and marketing expenses 7.4 The AO, as stated earlier, allowed the portion related to lift expenses, which was part of the agreement but did not allow the balance of Rs.1.15 crores. It is also a fact that a big 'nullah' passed through the property and the expenses on it came to Rs.49,95,450/-
constituting the lion share of infrastructure expenses.
7.5 The appellant was lie receive 40% of the receipts from development of this property from M/s.Unique Enterprises. Since this Developer was to develop this property hence, jt undertook the infrastructure Mrs. Kamlini D. Ashar 13 work and billed the appellant. The said amount was adjusted against 40% payment to be made to the appellant. The liability to carry out this expenditure being on the appellant, it has rightfully claimed the expenditure. It has forgone the receipts out of 40% share to the extent of this amount. A two way transfer of first receiving the receipts and then paying the same to M/s.Unique Enterprises Rs.1.15 crores was a meaningless, empty formality and hence unnecessary.
7.6 The AO, if he had doubts, could have investigated the details of this expenditure by directing the appellant or M/s.Uniquc Enterprises to provide all the necessary vouchers / documents. He has simply rejected the same without bringing on record any incriminating material or evidence such summary disallowance cannot he sustained. There has to be something more than mere suspicion to deny the claim.
7.7 Taking all the above facts and circumstances and considered view of the matter, I deleted the addition of Rs. 1.15 crores.
30. After carefully considering the rival contentions and the findings of the learned Commissioner (Appeals) as well as of the Assessing Officer, we find no infirmity in the aforesaid findings of the learned Commissioner (Appeals) for the simple reason that the assessee has produced all the necessary details of the expenditure incurred in the development of infrastructure and also it is a fact that it was liability of the assessee to incur these expenditure as the assessee was to receive 40% of the receipts from the development of property from Unique Enterprises. Such an expenditure on infrastructure is definitely allowable. Consequently, this ground raised by the Revenue is dismissed.
31. प रणामतः राज व क नधारण वष 2006-07 क अपील खा रज क जाती है ।
31. In the result, Revenue's appeal for assessment year 2006-07 is dismissed.
We now take up Revenue's appeal in ITA no.7066/Mum./2010, for assessment year 2002-03. Following grounds have been raised by the Revenue:-
(1) On the fact and in the circumstance of the case and in law the Ld. CIT(A) failed to appreciate the fact that clause (b) of section 2(42A) is only for determining the period held by the assessee for the purpose of treating the asset as a long term capital asset and Mrs. Kamlini D. Ashar 14 explanation (iii) to section 48 clearly states that the Cost Inflation Index shall be from the first year in which the asset was held by the assessee.
(2) On the fact and in the circumstance of the case and in law the Ld. CIT(A) erred in holding that the conditions prescribed u/s 2(47)(v) have not been satisfied despite M/s Unique Enterprises obtaining the power of attorney and unhindered access to the property by virtue of clauses 12(b) and 15(a) of the agreement dated 01 .01 .2002.
(3) On the fact and in the circumstance of the case and in law the Ld. CIT(A) failed to appreciate the fact that the conditions prescribed u/s 2(47)(v) rws 53A of Transfer of Property Act the assessee has rendered effective transfer of the property during Assessment Year 2002-03 and hence should be brought to tax in that year in view of the Honble High Court's decision in Chaturbhuj D Kapadia vs CIT.
(4) The decision of the Special Bench of the ITAT in the case of Munjula J Shah ITA No.7315/Mum/2007 dated 16/06/2009 has not been accepted by the Department."
32. In view of our findings given in the aforesaid appeal in ITA no. 5362/Mum./2009, for assessment year 2006-07, wherein we have held that capital gain is chargeable to tax in the assessment year 2006-07, the aforesaid grounds of appeal raised by the Department are rendered infructuous and, therefore, the same are dismissed as such.
33. प रणामतः राज व क नधारण वष 2002-03 क अपील खा रज क जाती है ।
33. In the result, Revenue's appeal for assessment year 2002-03 is dismissed.
आदे श क धोषणा खले
ु यायालय म दनांकः 24th August 2012 को क गई ।
th
Order pronounced in the open Court on 24 August 2012
Sd/- Sd/-
पी.
पी.एम.
एम. जगताप अ मत शु ला
लेखा सद य या यक सद य
P.M. JAGTAP AMIT SHUKLA
ACCOUNTANT MEMBER JUDICIAL MEMBER
मंुबई MUMBAI, दनांक DATED: 24th August 2012
Mrs. Kamlini D. Ashar
15
आदे श क त ल प अ े षत / Copy of the order forwarded to:
(1) नधा रती / The Assessee;
(2) राज व / The Revenue;
(3) आयकर आयु (अपील) / The CIT(A);
(4) आयकर आयु / The CIT, Mumbai City concerned;
(5) वभागीय त न ध, आयकर अपील य अ धकरण, मंुबई / The DR, ITAT, Mumbai;
(6) गाड फाईल / Guard file.
पत त / True Copy
आदे शानसार
ु / By Order
द प जे. चौधर / Pradeep J. Chowdhury
वर नजी स चव / Sr. Private Secretary
उप / सहायक पंजीकार / (Dy./Asstt. Registrar)
आयकर अपील य अ धकरण, मंुबई / ITAT, Mumbai