Income Tax Appellate Tribunal - Mumbai
Hemant R Tandel, Mumbai vs Assessee on 22 April, 2015
ु ई यायपीठ बी मंब आयकर अपील य अ धकरण, मंब ु ई।
IN THE INCOME TAX APPELLATE TRIBUNAL "'B" BENCH, MUMBAI सव ी जोगीं संह, या यक सद य एवं नरे कुमार ब लै या, लेखा सद य के सम BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER आयकर अपील सं/ I.T.A. No. 1934/Mum/2012 ( नधारण वष / Assessment Year : 2008-09 The ITO-22(3)(1), बनाम/ Shri Hemant R. Tandel, Navi Mumbai C/o K.K. Dand & Co., Vs. 411, Centre Square, S.V. Road, Andheri (W), Mumbai-400 058 आयकर अपील सं/ I.T.A. No. 1835/Mum/2012 ( नधारण वष / Assessment Year : 2008-09 Shri Hemant R. Tandel, बनाम/ The ITO-22(3)(1), C/o K.K. Dand & Co., Navi Mumbai Vs. 411, Centre Square, S.V. Road, Andheri (W), Mumbai-400 058 थायी ले खा सं . /जीआइआर सं . /PAN/GIR No. :AEBPT 0013P आयकर अपील सं/ I.T.A. No. 1935/Mum/2012 ( नधारण वष / Assessment Year : 2008-09 The ITO-22(3)(1), बनाम/ Shri Ganesh R. Tandel, Navi Mumbai 49, Karave Dharave, Vs. Nerul (W), Navi Mumbai-400 076 आयकर अपील सं/ I.T.A. No. 1836/Mum/2012 ( नधारण वष / Assessment Year : 2008-09 Shri Ganesh R. Tandel, बनाम/ The ITO-22(3)(1), 49, Karave Dharave, Navi Mumbai Vs. Nerul (W), Navi Mumbai-400 076 2 Hemant , Nitin & Ganesh R. Tandel थायी ले खा सं . /जीआइआर सं . /PAN/GIR No. : AEBPT 0012N आयकर अपील सं/ I.T.A. No. 1941/Mum/2012 ( नधारण वष / Assessment Year : 2008-09 The ITO-22(3)(3)), बनाम/ Shri Nitin R. Tandel, Navi Mumbai 49, Karave Dharave, Vs. Nerul (W), Navi Mumbai-400 706 आयकर अपील सं/ I.T.A. No. 1837/Mum/2012 ( नधारण वष / Assessment Year : 2008-09 Shri Nitin R. Tandel, बनाम/ The ITO-22(3)(1), 49, Karave Dharave, Navi Mumbai Vs. Nerul (W), Navi Mumbai-400 706 थायी ले खा सं . /जीआइआर सं . /PAN/GIR No. : AEBPT 0014L (अपीलाथ /Appellant) .. ( यथ / Respondent) अपीलाथ ओर से/ Assessee by: Shri K. Gopal Shri Neha Paranjpe यथ क ओर से/Revenue by: Shri Pavan Kumar Beerla सन ु वाई क तार ख / Date of Hearing :16.04.2015 घोषणा क तार ख /Date of Pronouncement :22.04.2015 आदे श / O R D E R PER BENCH:
ITA Nos. 1934 & 1835/Mum/12, ITA Nos. 1935 & 1836/M/12 & ITA Nos. 1941 & 1837/M/12 are cross appeals by the Revenue and the assessee against the very same order of the Ld. CIT(A) dt. 25.1.2012 pertaining to assessment year 2008-09. These three appeals and cross appeals are in respect of three different assesses.
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2. At the very outset, both parties agreed that facts of all the three assesses are identical, on such agreement, we proceeded by taking up the facts in the case of Shri Hemant R. Tandel. On a clear understanding that the facts of remaining two assesses are identical to the facts of Shri Hemant R. Tandel.
3. The contentious issue in these appeals can be summarized in the following manner.
i) What is the date of acquisition of the impugned property?
ii) What is the cost of acquisition of the impugned property?
iii) What is the sale consideration?
iv) How many co-owners are there for the impugned property?
4. Briefly stated the facts of the case are that one Shri Ramchandra Mahadu Tandel who was the head of Tandel family had right on landed property at village Nerul prior to 1972. By Notification No. LAW/C/3369 dt. 3.12.1970 under section 4 of the L.A. Act 1894 and Notification No. LAQ/C/9404 dt. 3.5.1972 under section 6 of the L.A. Act, the Government of Maharashtra had decided to acquire the Gaothan land at Navi Mumbai area for the development of the Township by CIDCO Ltd. By virtue of the aforestated notification, the following land owned by Shri Ramchandra Mahadu Tandel were acquired by CIDCO.
Survey Area in Award No. Location Case Date of No. Sq. Mtr. Acquisition No. 75/3 126 452 Nerul Village 212 29.8.1986 58/1 784 291 Nerul Village 212/72 28.12.1982 4 Hemant , Nitin & Ganesh R. Tandel 58/3 1214 291 Nerul Village 212/72 28.12.1982 58/12 202 291 Nerul Village 212/72 28.12.1982 58/16 3364 291 Nerul Village 212/72 28.12.1982 58/18 809 291 Nerul Village 212/72 28.12.1982 143/A3 20007 42 Nerul Village 195 5.8.1982 138A/4 18008 42 Nerul Village 195 14.12.1981 Total 44514 Area
5. In pursuance to such land acquisition, the State Government by its Resolution No. LQN/1985/1710/CR/217/85/Navi-10 dt. 6.3.1990 and subsequent resolution No. CID/1094/2094/287/Navi-10 dt. 28.10.1994 ordered to grant land @ 12% of the land acquired. Thus the right of Shri Ramchandra Mahadu Tandel in his ancestral property was acquired by the Government vide notification on 3.5.1972. However, the resolution passed by the Government is dt. 28.10.1994 therefore, it cannot be said that the Tandel family was aware whether they will get a compensation for the acquired land or not. Therefore, it can be safely concluded that after the notification dt. 28.10.1994, Tandel family knew that they will be compensated by the land under 12.5% Gaothan Expansion Scheme.
5.1. Shri Ramchandra Mahadu Tandel expired on 22.11.1997 and the impugned property was inherited by his legal heirs. In pursuance to the scheme launched by CIDCO Ltd., application for allotment of land from all the co-owners whose lands were acquired by the Government were invited. Accordingly, the assessee and his family members made an application for allotment of land under the scheme on 12.10.1998 by paying a sum of Rs. 1,72,568/- to CIDCO Ltd. In response to the application made by the assessee and the family members dt. 12.10.1998, 5 Hemant , Nitin & Ganesh R. Tandel CIDCO Ltd. issued letter of indent for allotment of plot under the scheme vide letter dt. 22.7.2003 and the intention for allotment of Plot No. 23B and 23C was communicated to the assessee and the family members vide two lease agreements dt. 3.11.2007 which was executed between CIDCO Ltd. and four family members of the Tandel family.
5.2. According to the AO, the date of allotment of the impugned plot has to be taken as 3.5.2007 which is the date of possession receipt issued by the CIDCO and as the assessee has transferred the rights by tripartite agreement with CIDCO Ltd and M/s. Sea Queen Developers dt. 19.7.2007 therefore the capital gains arising out of such transaction is Short Term Capital Gain. The AO further adopted the cost of acquisition as the cost on 3.5.2007 when the family members took the possession of the impugned properties and the sale consideration has been taken as the stamp duty value rate and the capital gains have been computed by invoking Sec. 50C of the Act.
5.3. The claim of the assessee is that the right to the property in question was vested with the assessee on 29.8.2003 and 8.9.2003. On 19.7.2007, the assessee has transferred its right therefore the said transaction has resulted into long term capital gains. Further, the assessee's claim is that the impugned property was allotted in pursuance to the property acquired by the Govern ment and the property so acquired was the property of the Tandel family prior to 1972 therefore, cost as on 1.4.1981 as per the provisions of the law should be taken as cost of acquisition. Further, the assessee claimed that Stamp Duty value adopted by the AO is not correct as provisions of Sec. 50C are not applicable in respect of the impugned transaction.
6 Hemant , Nitin & Ganesh R. Tandel 5.4. All the submissions/claims made by the assessee were rejected by the AO.
6. The matter was carried before the Ld. CIT(A). After examining the facts and the submissions made by the assessee, the Ld. CIT(A) heavily relied upon the decision of the Tribunal in the case of Suresh Vasudeo Gore in ITA No. 1197/M/09 and Shri Atul G. Puranik in ITA No. 3051/M/10. In so far as the year of acquisition is concerned, the Ld. CIT(A) at page-16 para-vi fully drawing support from the decision in the case of Atul G. Puranik (supra) categorically held that the assessee became one of the co-owner on the date of allotment which is August and September, 2003 for the impugned two plots. The holding period being more than three years, the Ld. CIT(A) held that the capital gains have to be taxed as Long Term Capital Gains.
6.1. In so far as the cost of acquisition is concerned, again drawing support from the decision given in the case of Atul G. Puranik (supra), the Ld. CIT(A) observed that since the assessee has paid Rs. 1,63,212/- which includes total lease rent of Rs. 120/- being @ Rs. 1/- per year for each plot for 60 years. The Ld. CIT(A) held that this amount has to be taken as cost of acquisition for these two plots.
6.2. In so far as the applicability of Sec. 50C is concerned, the Ld. CIT(A) held that since the assessee has transferred lease hold right which is not akin to immoveable property therefore Sec. 50C cannot be applied. However, at the same time, the Ld. CIT(A) held that the sale consideration as per agreement entered into 1999 cannot be accepted, at the same time marked value also cannot be applied therefore the value adopted by the assessee's valuor has to be accepted. The Ld. CIT(A) 7 Hemant , Nitin & Ganesh R. Tandel observed that the assessee has given the value at Rs. 5,72,94,000/- and therefore the same has to be accepted as the value of sale consideration.
6.3. In so far as the number of co-owners is concerned, the Ld. CIT(A) observed that only 4 persons have signed the deal which means that the other members have been ousted altogether. The capital gain has arisen in the hands of only four co-owners, assessee's share being 25% has to be taxed accordingly.
7. Aggrieved by these findings of the Ld. CIT(A) both Revenue and assessee are in appeal.
8. Having heard the rival submissions, we have carefully perused the orders of the authorities below and the decisions relied upon by both parties.
i) Date of acquisition- It is an undisputed fact that the Maharashtra Government acquired the land belonging to the father of the assessee which was acquired by him prior to 1972.
It is also an undisputed fact that subsequent to the notification issued by the Ld. CIT(A), land was allotted to the assessee and the family members as compensation in lieu of the land acquired. The letter of allotment is issued by CIDCO Ltd. Dated 29.8.2003 and 8.9.2003. With this letter of allotment the assessee acquired a right to receive the land which was subsequently transferred on 19.7.2007 by way of tripartite agreement with CIDCO Ltd. And M/s. Sea Queen Developments. Reliance on the decision of Shri Atul G. Puranik (supra) is well founded. The date of allotment of leasehold land is rightly taken by the Ld. CIT(A) as the date of acquisition resulting into long term capital gains as the transfer 8 Hemant , Nitin & Ganesh R. Tandel took place on 19.7.2007 i.e. after more than 36 months from the date of acquisition.
The Ld. Departmental Representative relied upon the decision of the Hon'ble High Court of Gujarat in the case of CIT Vs Nirmal Textiles 224 ITR 378, High Court of Patna in the case of Smt. Raj Rani Devi Ramna Vs CIT 201 ITR 1032. Both these decisions are misplaced as in both these decisions, the issue related to the date of transfer whereas the issue before us relates to the date of acquisition. We, therefore, do not find any infirmity in this finding of the Ld. CIT(A) and is accordingly confirmed. Ground No. 1 & ground No. 2 of Revenue's appeal are accordingly dismissed.
ii) Cost of acquisition- In the case of Shri Atul G. Puranik (supra), the Tribunal has held that the actual cost or alternatively the market value of the leasehold right should be taken as cost of acquisition. In the present case, we find that the assessee has paid cost towards these impugned 2 plots at Rs. 1,63,212/- which has also been ascertained by the authorities and confirmed by them. As actual amount paid by the assessee for getting the leasehold right in these plots is available on record, we do not find it necessary for adopting market value of the same. As mentioned above, this view is also supported by the decision in the case of Shri Atul G. Puranik (supra). Accordingly, Rs. 1,63,212/- is the cost of acquisition of the two plots rightly taken by the Ld. CIT(A) and therefore we do not find any error or infirmity in this finding of the Ld. CIT(A). Ground No. 1 (a) of assessee's appeal is accordingly dismissed.
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iii) Sale consideration - The assessee's claim of taking the consideration as per agreement entered in 1999 does not hold any water as we have held that the leasehold right has come into existence only in the year 2003. We find that the assessee himself has furnished valuor's report which states the sale consideration at Rs. 5,72,94,000/-. We find that the Ld. CIT(A) has accepted assessee's valuor's report on this issue. We, therefore do not find any reason to interfere with the findings of the Ld. CIT(A). Ground No. 1(b) of assessee's appeal is dismissed.
iv) Co-owners for the impugned property - The assessee claimed that there were 9 legal heirs of Shri Ramchandra Mahadu Tandel, therefore, the impugned capital gains has arisen in 9 hands and the assessee's share in the said capital gain should be taken only 1/9th . The Ld. CIT(A) has dismissed this claim of the assessee holding that only four members have signed the deal therefore assessee's share comes to 25%.
Before us, the Ld. Counsel for the assessee stated that an affidavit from the sisters of the assessee have been filed before the Ld. CIT(A) and in the affidavit it has been specifically mentioned that the sisters have also received consideration from the sale of leasehold right. We find that there is no mention of the affidavit in the findings of the Ld. CIT(A). We, therefore, restore this issue to the file of the AO. The AO is directed to verify the contents of the affidavit and decide the issue afresh as per provisions of the law after giving reasonable opportunity of being heard to the assessee.
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v) Applicability of Sec. 50C of the Act- It is an undisputed fact that the assessee has transferred leasehold rights in the two plots. This issue was also considered by the Tribunal in the case of Shri Atul G. Puranik (supra) wherein the Tribunal has held that Sec. 50C applies only to a capital asset being land or building or both, it cannot be made applicable to lease rights in a land. As the Ld. CIT(A) has followed this decision of the Tribunal and no contrary decision has been brought on record before us by the Ld. DR, we do not find any reason to interfere with the findings of the Ld. CIT(A). Ground No. 3 of Revenue's appeal is accordingly dismissed.
9. In the result, the appeal filed by the Revenue is dismissed and that of the assessee is partly allowed.
10. As mentioned elsewhere, the fact of other assesses in appeal before us are identical, therefore, for the reasons given hereinabove these appeals are also disposed of in line with our decision in the case of Shri Hemant R. Tandel.
Order pronounced in the open court on 22nd April, 2015 Sd/- Sd/-
(JOGINDER SINGH ) (N.K. BILLAIYA)
या यक सद य/JUDICIAL MEMBER लेखा सद य / ACCOUNTANT MEMBER
मंब
ु ई Mumbai; दनांक Dated :22 April, 2015
nd
व. न.स./ RJ , Sr. PS
11 Hemant , Nitin & Ganesh R. Tandel
आदे श क त ल प अ े षत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent.
3. आयकर आयु त(अपील) / The CIT(A)-
4. आयकर आयु त / CIT
5. वभागीय त न ध, आयकर अपील य अ धकरण, मंब ु ई / DR, ITAT, Mumbai
6. गाड फाईल / Guard file.
आदे शानस ु ार/ BY ORDER, स या पत त //True Copy// उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपील य अ धकरण, मंब ु ई / ITAT, Mumbai