Bombay High Court
Ma N Oj B. J O S H I vs . on 29 July, 2008
Bench: Bilal Nazki, A.A. Kumbhakoni
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IN THE HIGH COURT OF J U DI CATUR E AT BOMBAY
ORDINARY ORIGINAL CIVIL J U RI S DI CTION
INCOM E TAX APPEAL No. 50 3 OF 20 0 6
Ma n oj B. J o s h i , )
Ashi r w a d , Ra m b a u g La n e No. 4, )
Kalya n - 42 1 30 1 . ) Appell a n t
Vs.
1. The 8 t h Inc o m e Tax Officer , )
War d No.1, Kalya n )
2. Co m m i s s i o n e r of Inco m e Tax )
'Var d h a n' 8 t h Floor , Wagle )
Ind u s t r i a l Es t a t e , Th a n e . )
3. Unio n of Indi a , )
Law Mini s t r y , Aaya k a r B h av a n )
2 n d floor , M.K. Marg, ]
Mu m b a i - 40 0 02 0 . ] Res p o n d e n t s
Mr. Ar u n Sa t h e wit h Ma n d a r Vaidy a & Pa n j a b r a o Naik, for t h e Appell a n t .
Mr. Vim al G u p t a , for t h e re s p o n d e n t s .
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CORAM : BILAL NAZKI, &
A. A. KUMBHKONI, J J .
DATE : J ULY 29, 20 0 8 .
ORAL J U D G M E NT ( PER : A. A. KUMBHKONI, J .)
1. Thi s t a x a p p e a l is filed by a n a s s e s s e ag ai n s t t h e a s s e s s m e n t or d e r pe r t a i n i n g to t h e a s s e s s m e n t yea r 19 9 8 - 99 . The a p p e ll a n t is aggrieve d by t h e rejec ti o n of hi s co n t e n t i o n (whic h is se t o u t he r e u n d e r ) by all t h e lower a u t h o r i t i e s , incl u d i n g t h e Inco m e Tax Appell a t e Trib u n a l .
Admit t e d l y the a p p e ll a n t has receive d an a d d i tio n a l a m o u n t of Rs. 2 9 , 1 1 , 0 0 0 / - (Rs. Twe n t y ni n e la k h s , eleve n t h o u s a n d only) ( he r ei n a f t e r refer r e d t o a s 'the a m o u n t in is s u e' for b r evity).
Accor di n g to t h e a p p e ll a n t fir s tly rec ei p t of t h e a m o u n t in is s u e by hi m is no t a n inco m e s u b j e c t to p ay m e n t of inco m e - t a x wit h i n t h e defi ni tio n of sec t i o n 2(24) of t h e Inco m e Tax Act (her ei n a f t e r refer r e d to a s 't h e Act', for t h e s a k e of br evity) a n d se c o n d l y (ra t h e r alt e r n a t i v e ly) t h a t t h e s a m e is 'inc o m e fro m long ter m ca p i t a l gai n ' and no t 'inco m e fro m ot h e r so u r c e s ' a s hel d by all t h e lowe r authorities.
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2. In view of t h e co n c u r r e n t findi n g s reco r d e d by all t h e lower a u t h o r i t i e s ag ai n s t t h e a p p e ll a n t and in a b s e n c e of a n q u e s t i o n of law r ai s e d by t h e a p p e ll a n t , we a r e u n a b l e to a d m i t t hi s appeal. Nor m a l ly, we wo ul d h av e dis m i s s e d this appeal sum m a rily wit h o u t giving ela b o r a t e re a s o n s . Howeve r , we ar e ve n t u r i n g to give de t a il e d re a s o n s so a s to m a k e t hi s or d e r a s p e a k i n g or d e r (not bec a u s e a ny legal is s u e a s s u c h is r ai s e d by t hi s a p p e a l) .
3. Few fact s at t h e t h r e s h o l d for be t t e r u n d e r s t a n d i n g of t hi s or de r m a y be ne c e s s a r y a n d we ar e se t ti n g ou t th e s a m e he r e u n d e r -
The a p p e ll a n t clai m s to be a b uil d e r . The a p p ell a n t filed inco m e t ax re t u r n s on 13 t h Nove m b e r , 19 9 8 in reg a r d to t h e a s s e s s m e n t yea r in iss u e i.e. 19 9 8 - 99 , decl a r i n g tot a l in co m e of Rs. 2 5 , 4 8 , 0 0 0 / - . Along wit h t h e re t u r n s , t h e a p p e ll a n t s u b m i t t e d two agr e e m e n t s , te r m e d a s Me m o r a n d u m of Un d e r s t a n d i n g s d a t e d 10 t h April 19 9 5 and 1 st Dece m b e r 19 8 9 . The ap p e ll a n t al s o s u b m i t t e d copy of a Rele a s e - dee d d a t e d 11 t h J u n e , 19 9 7 . All t h e s e t h r e e doc u m e n t s pe r t a i n to a p a r t i c u l a r tr a n s a c t i o n wit h w hic h we will de al at so m e le ng t h he r e u n d e r .
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. The a p p e ll a n t clai m e d that the amou n t in iss u e of Rs. 2 9 , 1 1 , 0 0 0 / - wa s an amou n t receive d by the a p p e ll a n t as co m p e n s a t i o n on ac co u n t of t h e tr a n s a c t i o n s reflec t e d by t h e afor e s a i d three doc u m e n t s and that it wa s a 'ca pi t a l gai n ' .
Howeve r , all t h e lowe r a u t h o r i t i e s h a v e tr e a t e d t h e a m o u n t in is s u e a s inco m e ea r n e d by t h e a p p e ll a n t a s a n d by way of 'inco m e fro m ot h e r so u r c e s ' , by rejec ti n g t h e clai m of t h e a p p e ll a n t . He n c e , t h i s ap p e a l .
5. The nature of tr a n s a c t i o n whic h re s u l t e d in to the ap p e ll a n t receivi n g t h e a m o u n t in is s u e ne e d s to be s et o u t wit few pa r t i c u l a r s a n d we do t h e s a m e he r e u n d e r -
. On 10 t h April 19 8 5 the a p p e ll a n t entered in t o an agr e e m e n t ter m e d a s 'Me m o r a n d u m of U n d e r s t a n d i n g ' wit h o n e Mr. Dalvi, who wa s to acq u i r e cer t a i n pie ce of la n d be a r i n g S u r v e y No. 6 of village Ba r a v e , tal u k a Kalya n , for t h e p u r p o s e of co n s t r u c t i o n of b uil di n g s , to be u s e d m ai n l y for t h e re s i d e n t i a l p u r p o s e . Mr. Dalvi wa n t e d to sell t h e flat s , whic h he pr o p o s e d to co n s t r u c t , to t hi r d p a r t i e s on ow n e r s h i p b a s i s .
. S ai d Mr. D alvi, t h e develo p e r , wa s s h o r t of fu n d s to ::: Downloaded on - 09/06/2013 13:38:17 :::
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u n d e r t a k e t hi s pr oje c t . The a p p e ll a n t t h e r e fo r e , offer e d to p r o m o t e a Coope r a t i v e Ho u s i n g Socie ty a n d t h e r e b y collec t fu n d s fro m t h e pr o p o s e d membe r s of t h e Socie ty . Co n s e q u e n t l y , the afo r e s a i d MOU d a t e d 10 t h April 19 8 5 wa s e n t e r e d int o by a n d be t w e e n t h e ap p e ll a n t Mr. Dalvi w he r e b y it wa s agr e e d that Mr. Dalvi will co n s t r u c t t h e flat s wit h t h e hel p of mo n i e s t h a t t h e a p p e ll a n t will han dover to Mr. Dalvi afte r collec ti n g the same fro m the pr o s p e c t iv e b u y e r s t h e r e of , t h e me m b e r s of t h e pr o p o s e d so cie t y .
Mr. Dalvi will give t h e s e flat s to t h e a p p e ll a n t , who in t u r n will allot t h e flat s to vario u s m e m b e r s of t h e pr o p o s e d Societ y , w hic wa s to be n a m e d a s Kr u s h n a Ho u s i n g Socie ty .
It is t h e ca s e of t h e a p p e ll a n t t h a t in hi s ca p a c i t y a s pr o m o t e r , t h e a p p e ll a n t collec t e d fu n d s of Rs. 2 9 , 1 1 , 0 0 0 / - fro m pr o s p e c t iv e m e m b e r s of t h e pr o p o s e d Societ y. The a p p e ll a n t s a y s that he added an amou n t of Rs. 2, 0 0 , 0 0 0 / - as hi s ow n co n t r i b u t i o n a s a m e m b e r of t h e pr o p o s e d Socie t y tow a r d s o n e flat and paid tot a l Rs. 3 1 , 1 1 , 0 0 0 / - to Mr. Dalvi on va rio u s dates be t w e e n 3 r d April, 19 8 5 to 31 s t Mar c h , 19 8 9 .
. It is al s o agr e e d a s pe r t h e cla u s e s of t h e MOU d a t e d 10 t h April, 19 8 5 t h a t if Mr. Dalvi fails to co m p l e t e t h e develo p m e n t a n d ca r r y ou t co n s t r u c t i o n a s agr e e d , t h e pr o m o t e r s or t h e Socie t ::: Downloaded on - 09/06/2013 13:38:17 :::
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will be en t i tl e d to clai m ref u n d of t h e boo ki n g a m o u n t alo n g wit int e r e s t .
It is fur t h e r ca s e of t h e a p p e ll a n t t h a t on acc o u n t of cer t a i n legal pr o bl e m s , Mr. Dalvi co ul d no t ho n o u r hi s co m m i t m e n t s of develo p m e n t and co n s t r u c t i o n . The r efo r e , the parties entered int o anoth er agr e e m e n t , al s o ter m e d as Mem o r a n d u m of Un d e r s t a n d i n g d a t e d 1 s t Dece m b e r , 19 8 9 w h e r e b Mr. Dalvi agr e e d to ref u n d t h e en ti r e a m o u n t p ai d by a p p e ll a n t of Rs. 31 , 1 1 , 0 0 0 / - . In a d di t i o n to ref u n d of t h e s ai d a m o u n t wit int e r e s t by t h e s ai d MOU d a t e d 1 s t Dece m b e r , 19 8 9 Mr. Dalvi al s o agr e e d to p ay a n a d d i ti o n a l a m o u n t of Rs. 2 9 , 1 1 , 0 0 0 / - i.e. t h e a m o u n t in is s u e , to t h e a p p ell a n t inter- alia a s a co m p e n s a t i o n for ca n c e ll a t i o n of a r r a n g e m e n t a n d so calle d u n d e r s t a n d i n g e n t e r e d int o be tw e e n t h e ap p e ll a n t a n d Mr. D alvi, in te r m s of MOU d a t e d 10 t h April, 19 8 5 . Accor di n gly, t h e a m o u n t in is s u e wa s p ai d by Mr. Dalvi to th e ap p e ll a n t , in t h e fin a n c i a l ye a r s 19 9 6 - 97 a n d 1 9 9 7 - 9 8 .
It is fur t h e r t h e ca s e of t h e ap p e ll a n t t h a t in t h e me a n ti m e t h e a p p e ll a n t a n d Mr. Dalvi e n t e r e d into a t hi r d ag r e e m e n t , calle d 'Rele a s e Dee d' , d a t e d 19 t h J u n e , 19 9 7 , de cl a r i n g t h a t Mr. Dalvi is rele a s e d a b s o l u t e l y foreve r a n d fro m all obliga ti o n s , ari si n g ::: Downloaded on - 09/06/2013 13:38:17 :::
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u n d e r MOU d a t e d 10 t h April, 19 8 5 .
6. As se t ou t a t t h e t h r e s h o l d of t hi s or d e r in t h e re t u r n s filed by t h e a p p e ll a n t , a p p e ll a n t clai m e d t h a t t h e a m o u n t in iss u e of Rs. 2 9 , 1 1 , 0 0 0 / - to be t h e a m o u n t receive d by t h e a p p e ll a n t a s 'inco m e fro m long te r m ca pi t a l gai n ' . Whe r e a s , t h e de p a r t m e n t h a s tr e a t e d t hi s a m o u n t , rec eive d by t h e a p p e ll a n t , a s a n "inco m e fro m ot h e r so u r c e s " .
7. It is t h e fir s t co n t e n t i o n of t h e a p p e ll a n t that the a m o u n t in iss u e is no t a n inco m e wit hi n t h e defi ni tio n of t h e te r m 'inco m e ' se t ou t in sec t io n 2(2 4) of t h e s ai d Act. We ar e u n a b l e to ac c e p t t hi s co n t e n t i o n of t h e ap p e ll a n t and we agr e e wit h t h e fin di n g s re n d e r e d in t hi s reg a r d by all t h e lower authorities, incl u d i n g t h e Inco m e Tax Appell a t e Trib u n a l by its im p u g n e d or d e r d a t e d 26 t h J u l y , 2 0 0 6 , for t h e re a s o n s s e t ou t he r e u n d e r .
. Sec tio n 2(2 4) defi n e s t h e te r m 'inco m e ' a s a n d by way of a n incl u s iv e a n d no t ex h a u s t i v e defi ni tio n . Sec tio n 14 of t h e s ai d Act lay s dow n t h e ca t e g o r i e s in whic h inco m e ca n be cla s s ifie d for th e p u r p o s e of c h a r g i n g t h e inco m e ta x . The s a m e re a d s t h u s -
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''14. S a ve a s other w i s e provi d e d b y thi s Act, all incom e s h all, for the pur po s e s of charg e of inco m e- tax an d com p u t a t io n of total inco m e , be cla s s i fie d un d e r the follo wi n g he a d s of inco m e :-
A. - S a l a r i e s .
B.- [ ] C. - Inc o m e fr o m h o u s e p r o p e r t y , D. - Prof i t s a n d g a i n s of bu s i n e s s or p r o f e s s i o n .
E. - Ca p i t a l g a i n s .
F. - Inc o m e fr o m o t h e r s o u r c e s .
Th u s , t h e inco m e re ceive d by a n a s s e s s is cla s s ifie d u n d e r t h e he a d s (A) to (F), exce p t (B) (the s a m e h a vi n g bee n omi t t e d by t h e Fi n a n c e Act 19 8 8 , w.e.f. 1 s t April, 19 8 9) . If t h e inco m e ca n n o t be cla s s ifie d u n d e r he a d s (A) to (E) t h e s a m e falls u n d e r h e a d (F), bei ng 'inc o m e fro m ot h e r so u r c e s ' .
Se c tio n 56 of t h e s ai d Act is relev a n t in t hi s reg a r d , whic h de a l s wit h 'inc o m e fro m ot h e r so u r c e s ' . The relev a n t po r ti o n of sec t io n 56 re a d s t h u s -
''S . 5 6 . (1) Income of every kind which is not to be excluded from the total income under this Act shall be chargeable to income- tax under the head ''Income from other sources'', if it is not chargeable to income- tax under any of the head s specified ::: Downloaded on - 09/06/2013 13:38:17 :::
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in section 14, items A to E. (2) In partic ul ar, an d wit h o u t preju dice to the ge n er a lit of the provi sio n s of s u b- s ection (1), the follo wi n g inco m e s , s h all be char g e a b l e to inco m e- tax un d e r the he a d ''Inco m e from other so urc e s '', na m e l y ...................................... ... ... .
.................................................................................. ... ... .
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The a p p e ll a n t h a s a d m i t t e d l y receive d t h e a m o u n t in iss u e from Mr. Dalvi, in acc o r d a n c e wit h t h e MOU a n d / o r t h e Rele a s e -
dee d en t e r e d into by a n d be tw e e n t h e a p p e ll a n t a n d Mr. Dalvi. In view of t h e s e admitted fact s a n d circ u m s t a n c e s of t h i s ca s e it ca n n o t be said that th e amou n t in is s u e so receive d by t h e a p p e ll a n t is no t a n inc o m e a t all in te r m s of sec t io n 2(2 4) r / w Sec tio n 14 a n d Sec tio n 56 of t h e s ai d Act. We th e r ef o r e , h e r e b rejec t t h e s a i d co n t e n t i o n of t h e a p p ell a n t a n d confi r m t h e fin d i n g s of all t h e lowe r a u t h o r i t i e s , hol di n g that the amo u n t in is s u e rec eive d by t h e a p p e ll a n t is a inco m e ta x a b l e u n d e r t h e s ai d Act.
10 . Thi s ta k e s u s to t h e cla s s ific a t i o n or ca t e go r iz a t i o n of t h e inco m e so rec eive d by t h e a p p e ll a n t viz. whe t h e r t h e s a m e is to be tr e a t e d a s ''inc o m e fro m long ter m ca pi t a l gai n'' or a s ''in c o m e fro m ot h e r so u r c e s ' ' .
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The fact u a l n a r r a t i o n of t h e tr a n s a c t i o n s , whic h t h e ap p e ll a n t h a d wit h Mr. Dalvi de m o n s t r a t e s th a t t h e a p p e ll a n t did p ay to Mr. D alvi, tot a l a m o u n t of Rs. 3 1 , 1 1 , 0 0 0 / - in ter m s of t h e MOU d a t e d 10 t h April, 19 8 5 . Howeve r , a s Mr. Dalvi wa s u n a b l e to ca r r y ou t t h e develo p m e n t a n d co n s t r u c t i o n , a s agr e e d by t h e MOU d a t e d 10 t h April, 19 8 5 , t h e p a r t i e s e n t e r e d int o a n o t h e r MOU d a t e d 1 s t Dece m b e r , 19 8 9 . In a d d i t io n t h e r e t o , t h e a p p e ll a n t al s o e n t e r e d int o a n agr e e m e n t title d a s ''Rele a s e Dee d'' wit h Mr. Dalvi d a t e d 11 t h J u n e , 19 9 5 . Admi t t e d l y , t h e a p p e ll a n t h a s rec eive d ref u n d of t h e en t i r e mo n e y pai d by t h e a p p e ll a n t to Mr. Dalvi, alo n g wit int e r e s t tow a r d s the ca n c e ll a t i o n of t h e tr a n s a c t i o n that the ap p e ll a n t h a d wit h Mr. Dalvi in re s p e c t of p u r c h a s e of flat s whic wer e to be co n s t r u c t e d by Mr. Dalvi. In a d d i ti o n th e r e t o Mr. Dalvi h a s p ai d to t h e a p p e ll a n t se p a r a t e l y t h e a m o u n t in is s u e . Thi s a m o u n t in is s u e h a s bee n p ai d to t h e a p p e ll a n t by Mr. D alvi, inter-
alia in p u r s u a n c e of Cla u s e no. (5) of t h e MOU d a t e d 1 s t Dece m b e r , 19 8 9 , t h e relev a n t por ti o n of whic h h a s bee n re p r o d u c e d by t h e Co m m i s s i o n e r in its a p p e ll a t e or d e r dt. 8 t h Octo b e r 20 0 2 a n d re a d s thu s-
''The a m o u n t a s agre e d to be pai d a s com p e n s a t i o n her ei n a b o v e s h a ll be du e on ex ec u tio n of thi s Me m or a n d u m ::: Downloaded on - 09/06/2013 13:38:17 :::
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but s h all be pai d onl y w h e n the prom ot er obt ai n s proof of ref u n d of flat boo ki n g from per s o n s a s liste d in An n e x u r e A an d als o th e no claim certificat e from the m agai n s t th e Dev elop e r.'' 11 . It is t h u s , clea r t h a t t h e a p p e ll a n t h a s no t re ceive d t h e amou n t in is s u e from Mr. Dalvi tow a r d s eit h e r ac q u i r i n g or rele a s i n g or reli n q u i s h i n g a n y rig h t or title or int e r e s t w h a t s o e v e r , in t h e im m ov a b l e pr o p e r t y . The a p p e ll a n t wa s p ai d se p a r a t e l y for reli n q u i s h i n g hi s int e r e s t in t h e im m ov a b l e pr o p e r t y , a p p r o p r i a t e amou n t alo n g wit h int e r e s t . Obvio u s l y t h e r ef o r e , t h e a m o u n t in is s u e ca n n o t be s a i d to be a n a m o u n t receive d by t h e a p p e ll a n t a s a co m p e n s a t i o n for reli n q u i s h i n g hi s inte r e s t in t h e im m o v a b l e pr o p e r t y and t h e r ef o r e ca n n o t be co n s i d e r e d under the hea d ''ca p i t a l gai n ' '.
12 . The lea r n e d co u n s e l a p p e a r i n g on be h a lf of t h e ap p e ll a n t co n t e n d e d t h a t eve n a rig h t to obt a i n co nvey a n c e s of im m ov a b l e pro p e r t y al s o falls wit hi n t h e wor d ''pr o p e r t y ' ' a s u s e d in sec ti o n 2(1 4) of t h e s ai d Act a n d t h a t t h e ter m ''pr o p e r t y ' ' so co n t a i n e d is of wide a m p l i t u d e , on ac c o u n t of t h e wor d s ''o n a n ac co u n t ' ' u s e d in t h e s ai d pr ovi sio n . The lea r n e d co u n s e l al so fur t h e r co n t e n d e d that the ''pr o p e r t y ' ' doe s no t mea n me r e ly ::: Downloaded on - 09/06/2013 13:38:17 :::
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p h y s i c a l pr o p e r t y b u t al s o incl u d e s t h e r e i n all t h e rig h t , title or int e r e s t in s u c h ''pr o p e r t y ' ' . He al s o co n t e n d e d t h a t t h e r ef o r e eve n rig h t to obt a i n co nvey a n c e s of a n y pr o p e r t y of a n y ki n d is ''a ca pi t a l asset''. The lea r n e d co u n s e l relie d on the followi n g ju dg m e n t s in s u p p o r t of hi s co n t e n t i o n s .
i The Co m m i s s i o n e r of Inco m e Tax, Bo m b a y City- I Vs. Tat a Se rvic e s Ltd. [19 8 0 Inco m e Tax Repo r t s , Vol. 12 2 , 6 9 4];
i Co m m i s s i o n e r of Inco m e Tax Vs. D a k s h a Ra m a n l a l [ 1 9 9 2 Inco m e Tax Repo r t s , 12 3 ];
i Ah m e d G.H. Ariff & Or s . Vs. Co m m i s s i o n e r of Weal t h Tax , Calc u t t a [ 19 7 0 Inco m e Tax Repo r t s 47 1];
i Walc h a n d n a g a r Ind u s t r i e s Ltd. Vs. Co m m i s s i o n e r of Inco m e Tax, Bo m b a y City- I [19 7 0 Inco m e Tax Repo r t s , Vol.
76 , 47 6];
i Co m m i s s i o n e r of Inco m e Tax Vs. Vijay Flexi ble Co n t a i n e r s [198 0 Inco m e Tax Re po r t s 69 3] .
13 . It is tr u e t h a t t h e te r m 'pr o p e r t y ' u s e d in sec t i o n 2(1 4) of t h e s a i d Act is to be int e r p r e t e d widely a n d t h a t it will incl u d e a n y rig h t , title or int e r e s t in t h e im m ov a b l e pr o p e r t y , a s al s o rig h t to obt a i n co nvey a n c e ( s) of im m ov a b l e pr o p e r t y . Howeve r , in t h e ::: Downloaded on - 09/06/2013 13:38:17 :::
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fac t s and circ u m s t a n c e s of the pr e s e n t ca s e , as di s c u s s e d he r ei n a b o v e , t h e ap p e ll a n t h a s faile d to cor r el a t e t h e p a y m e n t of a m o u n t in is s u e of Rs. 2 9 , 1 1 , 0 0 0 / - m a d e to t h e a p p e ll a n t by Mr. Dalvi, tow a r d s a n y s u c h rig h t co n t e m p l a t e d / c o n s i d e r e d by a n y of t h e afor e s a i d re p o r t e d ju dg m e n t s . As t h e a p p e ll a n t , in view of t h e fac t s of t hi s ca s e , h a s faile d to s h o w t h a t t h e a m o u n t in is s u e wa s p ai d to the a p p e ll a n t tow a r d s reli n q u i s h m e n t of any such rig h t / t i t l e / i n t e r e s t in re s p e c t of a n y im m ov a b l e pr o p e r t y or for t h a t matter a n y ''pr o p e r t y of a ny ki n d ' ' it ca n n o t be s ai d t h a t the a m o u n t in iss u e h a d bee n receive d by t h e a p p e ll a n t a s ''in co m e fro m long te r m ca pi t a l gai n ' ' .
14 . The fac t s of t hi s ca s e cle a r ly de m o n s t r a t e that th e ap p e ll a n t wa s p ai d t h e a m o u n t in is s u e so t h a t no ac tio n in fu t u r e is initi a t e d ag ai n s t t h e Develo p e r , Mr. Dalvi, by t h e m e m b e r s of t h e pr o p o s e d ho u s i n g socie ty for h a vi n g faile d to co n s t r u c t flat s for the m a s wa s initi a lly agr e e d by Mr. Dalvi. In ot h e r wor d s t h e ap p e ll a n t h a s rec eive d t hi s a m o u n t in is s u e to in d e m n i f y Mr. Dalvi ag a i n s t a n y ac tio n (th a t too if a n y) t h a t m a y be t a k e n ag ai n s t Mr. Dalvi in fut u r e . Thi s a m o u n t in is s u e wa s no t p ai d to t h e a p p e ll a n t tow a r d s a ny rig h t / t i t l e / i n t e r e s t t h a t t h e a p p e ll a n t h a d in pra e s e n t i ::: Downloaded on - 09/06/2013 13:38:17 :::
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in a n y im m ov a b l e pr o p e r t y .
We a r e t h e r ef o r e , of t h e view th a t these ju d g m e n t s relie d on be h a lf of t h e a p p ell a n t ca n n o t fur t h e r t h e ca s e of t h e ap p e ll a n t and are of no assist a n c e to the lea r n e d co u n s e l ap p e a r i n g on be h a lf of t h e a p p e ll a n t in a dv a n c i n g hi s poi n t s .
15 . We agr e e wit h the ob s e r v a t i o n of t h e Inco m e Tax Appell a t e Trib u n a l that the amou n t in iss u e wa s p ai d to t h e ap p e ll a n t only to s af eg u a r d Mr. Dalvi fro m a n y clai m( s) likely to be m a d e ag ai n s t hi m by t h e pe r s o n who h a d boo k e d t h e fla t s t h r o u g t h e a p p e ll a n t , si n c e Mr. Dalvi did no t co n s t r u c t t h e flat s a s ag r e e d by hi m ea rlie r .
16 . Th u s , co n s i d e r i n g over all fac t s a n d cir c u m s t a n c e s of t h e ca s e a n d t h e fac t u a l fin di n g s reco r d e d by all t h e t h r e e lowe r authorities, we are unable to ac c e p t the con t e n t i o n s of t h e ap p e ll a n t , fir s tly that the amou n t in is s u e of Rs. 2 9 , 1 1 , 0 0 0 / -
rec eive d by t h e a p p e ll a n t is no t a n inco m e a t all, a s defi n e d u n d e r sec t io n 2(2 4) of t h e s ai d Act a n d t h a t alte r n a t i v ely t hi s in co m e of t h e a p p e ll a n t is req u i r e d to be tr e a t e d a s ''inco m e fro m lo n g ter m ca pi t a l gai n'' and no t as ''inc o m e from ot h e r so u r c e s ' ' as ::: Downloaded on - 09/06/2013 13:38:17 :::
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co n t e m p l a t e d by Sec tio n 14 r / w Sec tio n 56 of t h e s ai d Act. We hol d t h a t all t h e t h r e e lowe r a u t h o r i t i e s wer e fully ju s t ifie d in tr e a t i n g t h e rec ei p t of a m o u n t in is s u e of Rs. 2 9 , 1 1 , 0 0 0 / - by t h e ap p e ll a n t , no t only a s a n inco m e b u t al s o a s inco m e receive d by t h e a p p e ll a n t fro m ot h e r so u r c e a s co n t e m p l a t e d by Se c tio n s 1 4 r/w 56 of the s ai d Act and subject the same to ta x a t i o n ac co r d i n g l y .
17 .
The a p p e ll a n t h a s t h u s , failed to r ai s e a n y q u e s t i o n of law by t h e pr e s e n t appe al. The a p p e a l is t h e r ef o r e dis m i s s e d , ac co r d i n g l y .
[ BILAL NAZKI, J . ] [ A. A. KUMBHKONI, J .] ::: Downloaded on - 09/06/2013 13:38:17 :::