Income Tax Appellate Tribunal - Mumbai
Amarlal Thakur, Mumbai vs Acit 22(2), Navi Mumbai on 11 December, 2018
आयकर अपीलीय अधिकरण "A " न्यायपीठ मब
ुं ई में ।
IN THE INCOME TAX APPELLATE TRIBUNAL " A" BENCH, MUMBAI
श्री महावीर स हिं , न्याययक दस्य एविं श्री राजेश कुमार लेखा दस्य के मक्ष ।
BEFORE SRI MAHAVIR SINGH, JM AND SRI RAJESH KUMAR, AM
Aayakr ApIla saM . / ITA No. 3409/Mum/2014
(inaQa- a rNa baYa- / Assessment Year 2009-10)
The Asst. Commissioner of Shri Amarlal P Thakur,
Income Tax, Circle 22(2), 4 t h 5-A, Deamland Society, Dr
Floor, Tower No. 6, Vashi Vs. A Soares Society Chembur
Railway, Station Complex, Mumbai-71,
Vashi, Navi Mumbai
(ApIlaaqaI- / Appellant) .. (p`%yaqaaI- / Respondent)
स्थायी ले खा िं . / PAN No. AACPT0094P
प्रत्याक्षे प स M . / CO No. 02/Mum/2017
(Arising in ITA No. 3409/Mum/2014 for AY 2009-10)
Shri Amarlal P Thakur, The Asst. Commissioner of
5-A, Deamland Society, Dr A Income Tax, Cir cle 22(2),
Soares Society Chembur 4 t h Floor, Tower No. 6,
Vs.
Mumbai-71, Vashi Railway, Station
Complex, Vashi, Navi
Mumbai
(ApIlaaqaI- / Appellant) .. (p`%yaqaaI- / Respondent)
अपीलाथी की ओर े / Appellant by : Shri Satish Chandra Rajore, DR
प्रत्यथी की ओर े / Respondent by : Shri Jayant R. Bhatt, AR
ुनवाई की तारीख / Date of hearing: 06.12.2018
घोषणा की तारीख / Date of pronouncement : 11.12.2018
2
ITA no .3 4 09 / Mum / 20 1 4 &
CO No. 02 / Mum /2 0 17
AadoSa / O R D E R
महावीर स हिं , न्याययक दस्य/
PER MAHAVIR SINGH, JM:
These cross appeal are arising out of the order of Commissioner of Income Tax (Appeals)-33, Mumbai [in short CIT(A)], in appeal No. CIT(A)- 33/IT/243/12-13 vide dated 07.02.2014. The Assessment was framed by the Dy. Commissioner of Income Tax, Central Circle 22(2), Mumbai (in short 'DCIT/ AO') for the A.Y. 2009-10 vide dated 21.01.2013 under section 143(3) read with section 264 of the Income Tax Act, 1961 (hereinafter 'the Act').
2. The only issue in this appeal of Revenue is against the order of CIT(A) deleting the addition made by AO of capital gains. For this Revenue has raised the following two grounds: -
"1. On the facts and in the circumstances of the case and in law, the Id. CIT (A) erred in holding that execution of the conveyance of the land is not a transfer within the meaning of section 50C, wherein, all rights title & interest including any future rights arising out of the said land stood transferred.
2. On the facts and in the circumstances of the case and in law, the Ld. CIT (A) erred in directing to compute the capital gain with regard to the amount received by the assessee i.e a sum at Rs 1,11,00,000 as against Rs 3 ITA no .3 4 09 / Mum / 20 1 4 & CO No. 02 / Mum /2 0 17 2,60,68,400 adopted by the assessing officer on the basis of DVO 's Report."
3. Briefly stated facts are that the AO during the course of original proceedings framed under section 143(3) of the Act dated 14.11.201 made addition of Rs. 11,55,15,100/- under the head capital gains on account of long term capital gain on sale of land bearing CTS No. 256 admeasuring 1768.89 sq. mts on city survey no. 256A, survey no 26, Hissa no. 82 at Govandi, Mumbai as per market value bearing in the deed of conveyance dated 17.07.2009. The assessee moved a revision petition under section 264 of the Act before PCIT and PCIT vide order under section 264 of the Act dated 30.03.2012 set aside the assessment order passed by AO under section 143(3) of the Act on the issue of calculation of capital gains. He directed the AO to refer the issue of valuation of property to the Valuation Officer (VO) to determine the fair market value on the date of sale and accordingly, recalculate the capital gains. Accordingly, the matter was referred to the DVO by the AO and DVO determine the fair market value of the property at Rs.2,60,68,400/-. Accordingly, the AO computed the capital gain after allowing deduction on account of index cost of acquisition at Rs. 2,57,05,500/- by observing in Para 6 to 6.2 as under: -
"6. In response to the above notice u/s.142(1) of the Act and its annexure, the assessee, Shri Amarlal P. Thakur attended on 17.01.2013. During the course of hearing, vide order sheet noting dated 07.01.2013, he stated that the LTCQ have to be computed on the basis of the Valuation Report received from the Valuation Office. He further stated that he has received the 4 ITA no .3 4 09 / Mum / 20 1 4 & CO No. 02 / Mum /2 0 17 Valuation Report and that he has no objection to the adoption of the Valuation Report for the purposes of Calculation of LTCG.
6.1. Accordingly, after duly considering the above referred Valuation Report and after according the assessee due and adequate opportunity to represent his case and make further submission, if any, the Long Term Capital Gains on the sale of above plot of land are computed as under: -
Sale consideration of plot of land bearing CTS No.256 2,60,68,400/- admeasuring 1768.89 sq.mt. on City Survey No.256A, Survey No.26, Hissa No.2 at Govandi, Mumbai as per the above referred Valuation Report dt.10.10.2012 (determining the market value as on the elate of transfer i.e. 27.07.2008) Less Indexed cost of acquisition as per computation 3,62,900/-
Long term capital gains on sale of land 2,57,05,500/-
6.2. The above amount of Rs.2,57,05,500/- is accordingly taken as Long Term Capital Gains on sale of the above plot of land and added to the total income of the assessee. Penalty proceedings u/s.271(1)(c) of the Act are separately initiated for concealment and furnishing inaccurate particulars in respect of income chargeable to tax."
Aggrieved, assessee preferred the appeal before CIT(A).
4. The CIT(A) after considering the submissions of the assessee noted that this property has been transferred in view of agreement entered dated 11.10.1986 and further duly registered with sub-registrar, Mumbai vide 5 ITA no .3 4 09 / Mum / 20 1 4 & CO No. 02 / Mum /2 0 17 registration No. BOM/M Ward/GEN/895 of 86-87 dt.26.03.1987 and accordingly, held that the transfer of land was effected in the year 1987, therefore, the provisions of section 50C of the Act will not apply. For this the CIT(A) has observed in Para 3.11 to 3.15 as under: -
"3.11 I have gone through the assessment order, submissions made by the appellant and have also perused various documents and details produced before me. In the instant case the appellant had purchased right title and interest in the aforesaid land by entering into an agreement dated 301h day of March 1981 where the assessee had interalia purchased right title and interest in the aforesaid land. The assessee had constructed 12 galas on the aforesaid land and during 1986-1987 he had sold those galas to various parties as per various agreements entered into by him. I have perused the COPY of the sale agreement and find that as per the terms of the agreement for the sake of brevity considered from the agreement entered dt.1 1.10.1986 between the assessee and one Mrs. Neela Prabhakar Pusalkar clause 17 of the same reads as under.
-The vendor desires that if any additional FSI is allowed by BMC on the said land and CTS No 255 and 256 part A, the same can be utilized by purchasers of the all the 6 ITA no .3 4 09 / Mum / 20 1 4 & CO No. 02 / Mum /2 0 17
12 galas proportionately without any compensation to the vendor?
3.12 Also Clause 19 of the said agreement clearly depicts that:
The deposits above, shall on the execution of the conveyance of the said land and of the said building, be paid over by the vendor to the said society, after deducting there from the amount accordance with the provisions of this agreement'.
3.13 Similarly, clause 25 also indicate that:
"Advocate of the vendor shall prepare and /or approve as the case may be the conveyance and all other documents to be executed in pursuance of this agreement as also the by law or the memorandum and articles of associations in connection with the formation, registration and / or incorporation of the co-operative society of the limited company as the case may be?
3.14 It is thus clear that by the aforesaid agreements the appellant had already sold right title and interest in the land along with the galas to the purchasers and he had also agreed to convey the plot in favour of the society on its formation. It is also not in dispute that in consonance with the said understanding the 7 ITA no .3 4 09 / Mum / 20 1 4 & CO No. 02 / Mum /2 0 17 purchasers of the galas have already formed the society which was registered having registration No. BOM/M Ward/GEN/895 of 86-87 dt.26.03. 1987. Further, the bylaws of the said society as its object clearly indicate that:
'The purpose of this society is primarily to constitute an organization of persons who have taken units in the blocks or buildings of flats known as Amar Commercial Complex Go-operative Society limited constructed on land bearing Plot/s. No. CTS No. 255 & 256 (Part) A admeasuring 4565.8 Sq. yards/ meters, located at Babu Sethwadi Deonar, Govandi. Bombay- 400 088 (referred to in the application for registration) as required by Sec. 10 of the Maharashtra Ownership Flats Act, 1963 (regulation of the promotion of construction, sale, management and transfer) and in pursuance of which its object shall be:
(a) to obtain an assignment of title in the land and building referred to above from its promoter Shri Amarlal Passumnal Thakur and to receive all documents of title relating to the property which may be in his possession or power as required by Sec.8
ITA no .3 4 09 / Mum / 20 1 4 & CO No. 02 / Mum /2 0 17 11 of the MO F Act, 1963 (regulation of the promotion of construction etc..).
3.15 Further even as per the provisions of Sec. 10 & Sec. 11 of The Maharashtra Ownership of Flats Act 1963 the assessee was required to convey property in favour of the society which has already been reproduced in the arguments raised by the appellant and hence not repeated.
However, it is clear from these facts that the appellant by virtue of the agreements as well as in law was duty bound to convey the land in favour of the society. It is also not in dispute that on formation of the society all the outgoing pertaining to the land were met by the society from the collection it had made from its members and that the possession of the said land in its own right was always available with the members and the society and, therefore, as per the provisions of See 53A of the Transfer of Property Act the transfer of the aforesaid land had already taken place when the assessee had parted with the possession in receipt of money from the members of the society as per the sale agreement. It is also not a case that the agreement with the 12 gala owners was 9 ITA no .3 4 09 / Mum / 20 1 4 & CO No. 02 / Mum /2 0 17 cancelled to whom along with the galas, all rights, title and interest in the said land including any future rights arising out of the said land had stood transferred. Therefore, even at the time of agreement with developer, the right, title and interest stood vested with the gala owners. Hence, when the assessee had already transferred the said land as per the law, there cannot be further transfer by him of the same land in favour of the developer. In the event, the appellant cannot be subjected to capital gains twice on the same land and that the additional amount received during the year can at best be called additional amount received on the same land. Nevertheless, it cannot be construed to be fresh agreement and, therefore, I am in agreement with the assessee that this amount is received as facilitation of the transfer of land in favour of the developer and not the transfer by him as envisaged and, therefore, under the circumstances the assessee is liable to pay tax on the amount received as additional fund on account of its earlier transfer and eligible to tax only for an amount actually received. It would also be apt to state that since the principal transfer of land was already 10 ITA no .3 4 09 / Mum / 20 1 4 & CO No. 02 / Mum /2 0 17 effected in the year 1987 the application of provisions of Sec SOC which was not then in statute cannot be brought in action in respect of the current agreement and, therefore, AO is directed to compute the capital gains with regard to the amount received by the assessee i.e. sum of Rs.
1,11,00,000/- as against Rs. 2,60,68,400/- adopted by the AO."
Aggrieved, now Revenue is in second appeal before Tribunal.
5. Before us, the learned Sr. DR filed order sheet entry dated 07.01.2013 and stated that the assessee himself has agreed for the addition and the relevant entry is reproduced in Para 6 of AO's order, which is again reproduced in Para 3 of this order. The learned Sr. DR also relied on the decision of Hon'ble Uttarakhand High court in the case of Deep Kukreti vs. CIT (2015) 53 taxmann.com 161 (Uttarakhand). Apart from this he has conceded the factual position that the property was transferred in 26.03.1987. On the other hand, the learned Counsel for the assessee supported the order of the CIT(A).
6. We have heard the rival contentions and gone through the facts and circumstances of the case. We find that the above property has been purchased by the purchasers vide agreement dated 11.10.1986 and the same was registered with Sub-Registrar, Mumbai vide registration No BOM/M Ward/GEN/895 of 86-87 dt.26.03.1987. The relevant clause of the registration clearly states about the deposits made by assessee with the society and registration of conveyance deed. Once the property is principally transferred in 1987, we find that the CIT(A) has rightly held the 11 ITA no .3 4 09 / Mum / 20 1 4 & CO No. 02 / Mum /2 0 17 provisions of section 50C of the Act will not applied. We confirm the order of CIT(A) and this issue of Revenue's appeal is dismissed.
7. At the outset, it is noticed that the CO of the assessee is time barred by 430 days and the learned Counsel for the assessee could not substantiate the delay or any reasonable cause. As the assessee fails to prove any reasonable case, the CO is dismissed as unadmitted.
8. In the result, the appeal of Revenue as well as CO of the assessee, both are dismissed.
Order pronounced in the open court on 11-12-2018.
Sd/- Sd/-
(राजेश कुमार / RAJESH KUMAR) (महावीर स ह
िं /MAHAVIR SINGH)
(लेखा दस्य / ACCOUNTANT MEMBER) (न्याययक दस्य/ JUDICIAL MEMBER)
मुिंबई, ददनािंक/ Mumbai, Dated: 11-12-2018 सदीप सरकार, व.निजी सधिव / Sudip Sarkar, Sr.PS आदे श की प्रनिललपप अग्रेपिि/Copy of the Order forwarded to :
1. अपीलाथी / The Appellant
2. प्रत्यथी / The Respondent.
3. आयकर आयुक्त(अपील) / The CIT(A)
4. आयकर आयुक्त / CIT
5. ववभागीय प्रयतयनधि, आयकर अपीलीय अधिकरण, मुिंबई / DR, ITAT, Mumbai
6. गार्ड फाईल / Guard file.
आदे शािसार/ BY ORDER, त्यावपत प्रयत //True Copy// उप/सहायक पुंजीकार (Asstt. Registrar) आयकर अपीलीय अधिकरण, मुिंबई / ITAT, Mumbai