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Income Tax Appellate Tribunal - Mumbai

Sunder Katwaru Rajbhar, Mumbai vs Income Tax Officer Ward 3(4), Kalyan on 26 February, 2019

आयकर अपील य अ धकरण, मंब ु ई यायपीठ, 'आई',मंब ु ई।

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES "I", MUMBAI Before Shri MAHAVIR SINGH, Judicial Member, and Shri G. MANJUNATHA, Accountant Member M.A. No.174/Mum/2018 (Arising out of ITA NO.2557/Mum/2015) Assessment Year: 2010-11 Shri Sunder Katwaru ITO, Rajbhar, Ward-3(4), बनाम/ Kalyan C/o- Suresh N Otwani, 305, 3rd Floor, Adamji Bldg. Vs. 413, Katha Bazar, Mumbai-9 ( नधा रती /Assessee) (राज व /Revenue) P.A. No.ABFPR8942L नधा रती क ओर से / Assessee by Shri Suresh Otwani राज व क ओर से / Revenue by Ms. Kusum Bansal-DR ु वाई क तार ख / Date of Hearing :

    सन                                                  22/02/2019
                                                        26/02/2019
    आदे श   क  तार ख /Date of Order:

                     आदे श / O R D E R
Per G. Manjunatha (Accountant Member)

The assessee has filed this Miscellaneous Application u/s 254(2) of the Income Tax Act, 1961 to recall order passed by the ITAT, Mumbai "I" Bench in ITA No.2557/Mum/2014 dated 29/11/2017 for AY 2010-11,.

2. The assessee has narrated facts and mistakes stated to be apparent from the order of the ITAT, Mumbai, dated 29/11/2017 in ITA No.2557/Mum/2015.

The relevant contents of the miscellaneous application filed by the assessee are reproduced hereunder:-

"The Tribunal by its Order dated 2911, November, 2017 has allowed, for statistical purpose, the Appellant's Appeal for A.Y :

2010-11 in allowing the Appellant's Appeal and directing the A.O to compute the Capital Gain and allow certain deductions as described in Para 9 and Para 10 in the hands of Power of Attorney Holder i.e, Appellant for whole portion of the Property and in the light of observation of the Honorable Members in Pant 8, 011 line 11 Therefore, if at all capital gain needs to be computed, then only to the extent of his share in the property shall be added in his hands."

And 110 line The Assessee also agreed before the AO that his mother, brother and sisters have not declared any capital gain in pursuance to development agreement. Therefore, we are of the view that the AO was right in computing capital gain in pursuance to development agreement in the hands of Assessee, has got valid power of attorney in his favor from his mother, brother and sisters and total cash consideration of Rs 65 lakhs has been credited in his bank account.

The Tribunal has proceeded on factually incorrect basis. Hence, the certain errors are kept in Tribunal conclusion in the Order dated 29.11.2017 which error requires rectification.

The errors are :-

The Capital Gain is by virtue of nomenclature is a tax on transfer of Capital Asset by owner and to the extent of ownership, which Honorable members have agreed during the course of Argument and hearing in Original petition that the charge of Capital Gain on the Applicant is to be to the extent of Appellant share is correct proposition and the same cannot be equated with the collection of Capital Gain Tax from Appellant on behalf of other co-owners of the property which was made clear and noted by writer of the judgement in Log book that the recovery of tax dues of co-members can definitely be carried on by the A.O from Power of Attorney Holder, since he has received money on their behalf in his Account. This proposition was argued, accepted by the members in the open court and Decision quoted and copy of judgement / handed over by the L.R of Honorable Madras High Court in the case of CIT Vs Sukumaran in I.T Appeal No 840/2014, submitted that the Capital Gain cannot be taxed in the hands of Power of Attorney holder, 3 MA No.174/Mum/2018 Appellant on identical facts, neither A.R nor members have distinguished.

The Para 8 itself beginning with "We have heard both the parties, persued the material available on record and gone through the orders of authorities below. The fact with regard to the development agreement and transfer of land in pursuance to development agreement is not disputed by the Assessee. The Assessee's contention is that capital gain cannot be computed in his hands as the land is belonging to his mother. He is only a confirming party to the transaction. Therefore, if at all capital gain needs to be computed, then only to the extent of his share in the property shall be added in his hands. The Assessee has never disputed the fact that there is a transfer within the meaning of section 2(47) which is evident from the fact that he has agreed before the AO to compute capital gain in pursuance to development agreement. The Assessee also agreed before the AO that his mother, brother and sisters have not declared any capital gain in pursuance to development agreement. Therefore, we are of the view that the AO was right in computing capital gain in pursuance to development agreement in the hands of Assessee, has got valid power of attorney in his favor from his mother, brother and sisters and total cash consideration of Rs 65 lakhs has been credited in his bank account. "This gives contradictory impressions which are erroneous and need corrections such as that A.O need compute the Capital Gain in pursuance of Development Agreement in the hands of 'A' to the extent of Appellant's share as per valid Power of Attorney and should also collect the tax payable by other co- members/ co- owners of the property from Appellant, who has voluntarily agreed before AO, before CIT(A) and before Honorable members through AR to discharge their co-owner's tax liability and also legally bound to do so in view of holding Power of Attorney, but tax needs to be computed in the hands of all co-owners of property. It was understood in open court that the Capital Gain is tax on the owners of the property with respect to their share in property. Power of Attorney holder is only a vehicle through whom documentation and procedure is to be followed."

3. We have heard both of parties and perused the miscellaneous application filed by the assessee along with order of the Tribunal in ITA No. 2557/Mum/2015, dated 29/11/2017. We find that the Tribunal has recorded finding in respect of capital gain derived from transfer of property in the hands of the assessee 4 MA No.174/Mum/2018 in respect of shares of other co-members being mother, brother and sister of the assessee in light of power attorney executed by other co-owners in favour of the assessee and also admission of assessee before AO during assessment proceedings. The Tribunal while recording its finding held that transfer of property is assessable in the hands of the assessee, however, for the purpose of computation, in light of other plea, made by the assessee regarding cost of acquisition and expense of transfer, the issue has been restored to the file of the Ld AO to consider the case of the assessee in the light of observations made in paragraph 9 and 10 of the order dated 29/11/2017. We further note that during the assessment proceeding, the assessee has filed a letter and admitted capital gain in its hands in respect of transfer of property and also filed revised statement of total income. The AO, after considering these facts and also taken into account, the fact that entire consideration has been received by the assessee from transfer of property held that capital gain is taxable in the hands of the assessee. Taking note of this fact, the Tribunal has given its finding that there is no error in the findings recorded by the AO while taxing capital gain in the hands of the assessee. Further, when we compare contents of the miscellaneous application filed by the assessee to the findings recorded by ITAT in its order dated 29/11/2017, we find that the assessee has failed to make out a case of mistakes apparent on record which requires rectification u/s 254(2) of the Act, but seeks to review decision of ITAT in the guise of rectification which is not permissible. Hence miscellaneous application filed by the assessee is dismissed.

5. Finally, the miscellaneous application filed by the assessee is dismissed.

Order pronounced in the open Court on 26/02/2019.

               Sd/-                                           Sd/-


       (Mahavir Singh)                               (G. Manjunatha)
 या!यक सद"य /JUDICIAL MEMBER                लेखा सद"य / ACCOUNTANT MEMBER
मब
 ुं ई Mumbai;  दनांक Dated : 26/02/2019
f{x~{tÜ? P.S //.!न.स.

आदे श क %!त'ल(प अ)े(षत/Copy of the Order forwarded to :

1. अपीलाथ! / The Appellant (Respective assessee)

2. "#यथ! / The Respondent.

3. आयकर आय% ु त(अपील) / The CIT, Mumbai.

4. आयकर आय% ु त / CIT(A)- , Mumbai,

5. 'वभागीय " त न*ध, आयकर अपील य अ*धकरण, मब ुं ई / DR, ITAT, Mumbai

6. गाड फाईल / Guard file.

आदे शानस ु ार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपील य अ धकरण, मब ुं ई / ITAT, Mumbai