Income Tax Appellate Tribunal - Chennai
Acit Non Corporate Circle 3, Chennai vs Shafiq Mohamed Shah, Chennai on 31 May, 2019
आयकर अपील य अ धकरण, 'बी' यायपीठ, चे नई
IN THE INCOME TAX APPELLATE TRIBUNAL
'B' BENCH, CHENNAI
ी एन.आर.एस. गणेशन, या यक सद य एवं ी इंटूर रामा राव, लेखा सद य केसम&
BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND
SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER
आयकर अपील सं./ITA No.2621/Chny/2017
नधा)रण वष) /Assessment Year : 2014-15
The Assistant Commissioner of Shri Shafiq Mohamed Shah,
Income Tax, v. 33 (New No.60), Veerabadran Street,
Non-Corporate Circle - 3, Nungambakkam, Chennai - 600 034.
Chennai - 600 034.
PAN : AAJPS 3460 P
(अपीलाथ-/Appellant) (./यथ-/Respondent)
अपीलाथ- क0 ओर से/Appellant by : Shri B. Sagadevan, JCIT
./यथ- क0 ओर से/Respondent by : Shri D. Anand, Advocate
सन
ु वाई क0 तार ख/Date of Hearing : 09.05.2019
घोषणा क0 तार ख/Date of Pronouncement : 31.05.2019
आदे श /O R D E R
PER N.R.S. GANESAN, JUDICIAL MEMBER:
This appeal of the Revenue is directed against the order of the Commissioner of Income Tax (Appeals) -4, Chennai, dated 14.08.2017 and pertains to assessment year 2014-15.
2. Shri B. Sagadevan, the Ld. Departmental Representative, submitted that the only issue arises for consideration is computation of capital gain. According to the Ld. D.R., there was a survey under 2 I.T.A. No.2621/Chny/17 Section 133A of the Income-tax Act, 1961 (in short 'the Act') in the case of M/s Paramount Builders (Chennai) Limited on 05.03.2014. During the course of survey, it was found that the assessee along with 13 others had entered into a joint development agreement on 27.06.2006 with M/s P.S. Srijan Realty for development of property situated at No.137, Velachery Main Road, Velachery, Chennai-42. According to the Ld. D.R., the assessee along with 13 others handed over 50% share of total land area to the developer. In turn, the developer has to hand over 1,30,812 sq.ft. of constructed area to the assessee and the 13 persons. According to the Ld. D.R., the Assessing Officer computed the short term capital gain since the holding period of the property is less than 36 months.
3. The Ld. D.R. further submitted that on appeal by the assessee, the CIT(Appeals) by placing reliance on the order of this Tribunal in another co-owner's case, found that the transfer took place on the basis of the joint development agreement dated 27.06.2006 during the assessment year 2007-08 and not during the assessment year 2014-15. According to the Ld. D.R., during the assessment year 2007-08, there was no part performance of the contract. Hence, there was no transfer of property within the 3 I.T.A. No.2621/Chny/17 meaning of 2(47) of the Act. According to the Ld. D.R., the assessee along with 13 others entered into joint development agreement for the purpose of developing by way of construction on the land, therefore, there was no transfer of ownership took place in the assessment year 2007-08. Hence, according to the Ld. D.R., it has to be taxed during the year under consideration. When the attention of the Ld. D.R. was drawn to the order of this Tribunal in one of the owners in DCIT v. Shri Sathak Ahmed Shaw in I.T.A. No.401/Chny/2018 dated 05.10.2018 wherein it was found that the capital gain is taxable only in the assessment year 2007-08 and not in the assessment year 2014-15, the Ld. D.R. very fairly submitted that he leaves the matter to the discretion of the Tribunal. In fact, in the above case, this Tribunal placed its reliance on the order of another co-ordinate Bench of this Tribunal in the case of another co- owner Shri Shafiq Mohammed Shah in I.T.A. No.1331/Mds/2016 dated 11.05.2017.
4. We heard Shri D. Anand, the Ld.counsel for the assessee also. According to the Ld. counsel, the assessee owned the property along with 13 co-owners. In the case of one of the co- owners Shafiq Mohammed Shah (supra), this Tribunal had an 4 I.T.A. No.2621/Chny/17 occasion to consider the same joint development agreement dated 27.06.2006 and found that there was no transfer of property during the year under consideration and the transfer, in fact, took place in assessment year 2007-08. According to the Ld. counsel, this order of this Tribunal was followed in another co-owner's case in Shri Sathak Ahmed Shaw (supra). Therefore, according to the Ld. counsel, in respect of the very same joint development agreement another co-ordinate Bench of this Tribunal found that there was no transfer during the year under consideration and transfer in fact took place during the assessment year 2007-08. Therefore, capital gain, if any, has to be assessed only in the assessment year 2007-08. Hence, according to the Ld. counsel, the CIT(Appeals) has rightly deleted the addition made by the Assessing Officer.
5. Having heard the Ld. D.R. and the Ld.counsel for the assessee, we also perused the relevant material available on record. Admittedly, the assessee is one of the co-owners of the property. There are 13 other co-owners who owned the very same property. The joint development agreement entered into by the assessee and 13 other persons was the subject matter of discussion by this Tribunal in the case of one of the co-owners Shri 5 I.T.A. No.2621/Chny/17 Shafiq Mohammed Shah (supra). This Tribunal by an order dated 11.05.2017 in I.T.A. No. 1331/Mds/2016 found that the transfer of property took place in the assessment year 2007-08 and not in the assessment year 2014-15, therefore, there cannot be any assessment of capital gain during the year under consideration. This order of the Tribunal in Shafiq Mohammed Shah (supra) was subsequently followed by another co-ordinate Bench in another co- owner's case in Shri Sathak Ahmed Shaw (supra). Therefore, the two co-ordinate Benches of this Tribunal examined the very same joint development agreement in the case of the co-owners and found that there was no transfer during the year under consideration. In view of the decision of co-ordinate Benches of this Tribunal holding that the transfer in fact took place during the assessment year 2007-08 and not during the assessment year under consideration, this Tribunal is of the considered opinion that the CIT(Appeals) has rightly followed the order of this Tribunal. Hence, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed.
6. In the result, the appeal filed by the Revenue stands dismissed.
6 I.T.A. No.2621/Chny/17
Order pronounced in the court on 31st May, 2019 at Chennai.
sd/- sd/-
(इंटूर रामा राव) (एन.आर.एस. गणेशन)
(Inturi Rama Rao) (N.R.S. Ganesan)
लेखा सद य/Accountant Member या यक सद य/Judicial Member
चे नई/Chennai,
st
7दनांक/Dated, the 31 May, 2019.
Kri.
आदे श क0 . त8ल9प अ:े9षत/Copy to:
1. अपीलाथ-/Appellant 2. ./यथ-/Respondent
3. आयकर आय;
ु त (अपील)/CIT(A)-4, Chennai-34
4. Principal CIT- 5, Chennai 5. 9वभागीय . त न ध/DR 6. गाड) फाईल/GF.