The ITO, Ward-11(3),, Ahmedabad v. Shri Bhupendra Gopaldas Shah, Ahmedabad

ITA 1842/AHD/2009 | 2005-2006
Pronouncement Date: 23-09-2011 | Result: Dismissed

Appeal Details

RSA Number 184220514 RSA 2009
Assessee PAN EMBER2003T
Bench Ahmedabad
Appeal Number ITA 1842/AHD/2009
Duration Of Justice 2 year(s) 3 month(s) 20 day(s)
Appellant The ITO, Ward-11(3),, Ahmedabad
Respondent Shri Bhupendra Gopaldas Shah, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 23-09-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 23-09-2011
Date Of Final Hearing 15-09-2011
Next Hearing Date 15-09-2011
Assessment Year 2005-2006
Appeal Filed On 02-06-2009
Judgment Text
- 1 - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH CAHMEDABAD BEFORE S/SHRI D. K. TYAGI J.M. AND A. K. GARODIA A.M. ITA NO. ASST. YEAR 1842/AHD/2009 2005-06 INCOME-TAX OFFICER WARD 11(3) AHMEDABAD. V/S . SHRI BHUPENDRA GOPALDAS SHAH B/H ALOK CHEMICALS PIPE FACTORY C/O B.N. & CO. SUKHRAMNAGAR GOMTIPUR AHMEDABAD. (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI VINOD TANWANI SR.DR RESPONDENT BY:- SHRI S. N. SOPARKAR SR.ADVOCATE WITH SHRI TUSHAR VASA DATE OF HEARING :15/9/2001. DATE OF PRONOUNCEMENT : 23/9/2011 O R D E R PER D. K. TYAGI JUDICIAL MEMBER. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A) DATED 26.3.2009 RAISING FOLLOWING GROUNDS:- (1) THE LD. CIT(A) HAS ERRED IN LAW AND FACTS DELETING THE ADDITION OF RS.19 50 000/- MADE ON ACCOUNT OF LONG TERM CAPI TAL GAIN AS PER THE SPECIFIC PROVISIONS OF SECTION 45 OF THE AC T R.W.S. 2(47) ON THE ACT AND SECTION 53A OF THE TRANSFER OF PROPE RTY ACT 1882. ITA NO.1842/AHD/2009 ASST. YEAR 2005-06 2 (2) THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT CONSIDERING THE RELEVANT FINDINGS OF THE AO DISCUSSED AT PARAGR APH 2.5 OF THE ASSESSMENT ORDER. (3) THE LD. CIT(A) HAS ERRED IN LAW AND FACTS IN DIRECT ING TO THE AO TO TAX THE INCOME ON ACCOUNT OF CAPITAL GAIN IN ASS T. YEAR 2006- 07 AND NOT IN ASST. YEAR 2005-06. 2. THE ONLY ISSUE INVOLVED IN THIS APPEAL IS WHETHE R THE CAPITAL GAINS ARISING OUT OF SALE OF PROPERTY SITUATED AT BORIVAL I(WEST) MUMBAI IS TAXABLE IN ASST. YEAR 2005-06 OR IN ASST. YEAR 2006 -07. THE AO AFTER BRINGING ALL THE FACTS RELEVANT TO THE ISSUE ON REC ORD HAS TAXED THIS CAPITAL GAINS OF RS.19 50 000/- DURING THE YEAR UNDER APPEA L BY OBSERVING AS UNDER :- 2.5 ON THE BASIS OF THE ABOVE FACTS IT EMERGES TH AT THE RELINQUISHMENT HAS BEEN MADE AND THE DEED EXECUTED BY THE ASSESSEE ON 12.08.2004 WHICH IS RELEVANT TO ASST. YEAR 2005-06. THOUGH THE ASSESSEE HAS NOT PRODUCED THIS DEED DATED 12.08.2004 DURING THE ASSE SSMENT PROCEEDINGS. HOWEVER THE ASSESSEE HAS EXECUTED THE DEED OF SURR ENDER ON 28.6.2005 TO BRING ON RECORD THE DATE OF TRANSACTIONS RELEVAN T TO ASST. YEAR 2006-07 TO POSTPONE THE PAYMENT OF TAX AND SET OFF CAPITAL GAIN LOSS ON OTHER TRANSFERS. IN FACT ON PERUSAL OF THE RETURN OF INCO ME FOR ASST. YEAR 2006- 07 IT IS SEEN THAT THE MOTIVE OF THE ASSESSEE TO P OSTPONE THE PAYMENT OF CAPITAL GAIN TAX ON THIS TRANSACTION TO ASST. YEAR 2006-07 IS TO NULLIFY THE CAPITAL GAIN TAX BY SETTING OFF THE CAPITAL LOSS OF RS.21 86 755/- INCURRED DURING THE ASST. YEAR 2006-07. THE ISSUE IS NOT WHE THER THE SAME IS ALLOWABLE OR NOT. THE ISSUE IS THAT CAPITAL GAIN IS TO BE TAXED STRICTLY IN THE ASSESSMENT YEAR TO WHICH IT PERTAINS. IF THE CO NTENTION OF THE ASSESSEE IS ACCEPTED IT COULD LEAD TO A SITUATION WHERE THE ASSESSEE WOULD RELINQUISH RIGHTS/POSSESSION OF THE PROPERTY AND PO STPONE THE PAYMENT OF CAPITAL GAIN TAX BY EXECUTING THE DEED OF TRANSFER/ SURRENDER AT ITS OWN CONVENIENCE. THIS IS DEFINITELY NOT THE INTENTION O F THE LEGISLATURE WHILE FRAMING THE PROVISIONS OF SECTION 45 R.W.S. 53A OF PROPERTY TAX ACT 1882. 2.6 APART FROM THE FACTS MENTIONED ABOUT THE SALE D EED EXECUTED ON 12.08.2004 IT IS ALSO EVIDENT AND ACKNOWLEDGED BY THE ASSESSEE THAT THE ASSESSEE HAS ALREADY RECEIVED RS.8 00 000/- (50% SH ARE) DURING THE RELEVANT F.Y. I.E. ASST. YEAR 2005-06. THUS THE ENT IRE CAPITAL GAIN ITA NO.1842/AHD/2009 ASST. YEAR 2005-06 3 BECOMES LIABLE FOR TAXATION IN F.Y.2004-05 RELEVANT TO ASST. YEAR 2005- 06. AGGRIEVED BY THIS ORDER OF AO THE ASSESSEE WENT IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 3. BEFORE THE FIRST APPELLATE AUTHORITY ASSESSEES SUBMISSIONS WERE AS UNDER :- THE RETURN OF INCOME WAS FILED ON 29.10.2005 DECLA RING TOTAL INCOME AT RS.89 387/-. THE SAME WAS PROCESSED ON 22 .5.2006 U/S 143(1) OF THE ACT. THE ASSESSEE IS HAVING INCOME FROM RENT SHORT TERM AND LONG TERM CAPITAL GAINS AND INCOME FROM DIVIDEND AND INTEREST . THE ASSESSEE HAS FILED RETURN OF INCOME SHOWING RENTAL INCOME FR OM THE PROPERTY SITUATED AT GOMTIPUR AHMEDABAD AND PROPERTY SITUAT ED AT BORIVALI (WEST) MUMBAI HAVING HALF SHARE IN BOTH THE PROPER TIES. THE ASSESSEE AND HIS FATHER WERE PARTNERS IN THE FI RM OF M/S NEW NATIONAL CHEMICAL INDUSTRIES ALONG WITH OTHER OUTS IDE PARTNERS. THE SAID FIRM HAD LEASE HOLD RIGHTS OF THE PREMISES SITUATED AT MU. NO.4336/1 AND 4333/3 OF SIMPOLY ROAD OFF GHODBUNDE R ROAD (NOW KNOWN AS SWAMI VIVEKANAND ROAD) BORIWALI (WEST ) MUMBAI. THE PREMISES WAS OWNED BY M/S JAM HOSIARY (P) LTD. THE PREMISES WAS CONSTRUCTED FOR COMMERCIAL USE. DIFFER ENCES AND DISPUTES LEAD TO DIVISION AND PARTITION OF PROPERTY AMONG THE PARTNERS OF THE SAID FIRM. THE PHYSICAL DIVISION OF THE PROPERTY WAS UNDERSTOOD AT THE TIME OF SEPARATION OF PARTNERSHIP . BY AN AGREEMENT DT.27.10.1980 BETWEEN THE ASSIGNORS SHRI GOPALDAS PREMCHAND SHAH AND BHUPENDRA GOPALDAS SHAH AND ASSIGNEE M/S DESAI BUILDERS THE PROPERTY WAS AGREED TO BE ASSIGNED TO THE DEVELOPERS M/S DESAI BUILDERS. SHRI GOPALDAS PREMCHAND SHAH EXPIRED ON 20.8.1983 A T AHMEDABAD. SHRI GOPALDAS PREMCHAND HAD MADE A WILL DT.20.11.1982 BY WHICH HE BEQUEATHED HIS 50% SHARE RIGHT TITLE AND INTEREST IN THE PROFITS AND ASSET OF THE SAID P ARTNERSHIP FIRM TO JAYESH NAVNITLAL HUF ANANG NAVNITLAL HUF AND KALPE SH ITA NO.1842/AHD/2009 ASST. YEAR 2005-06 4 NAVNITLAL HUF TO BE SHARES EQUALLY BETWEEN THEM I.E . 1/3 RD OF 50% OF THE LEASE HOLD RIGHTS AND OF THE FIRM. DISPUTES AROSE BETWEEN THE ASSIGNORS AND M/S DESAI BUILDERS. IN NOVEMBER 2003 THE AGREEMENT OF ASSIGNMENT MADE ON 2 7.10.1980 WAS CANCELLED. IT WAS WITH THE OLD BUILDERS. THIS W AS IN ASST. YEAR 2004-05. THUS THE PROPERTY ONCE AGAIN WAS UNDER THE LEASE HO LD RIGHTS JAYESH NAVNITLAL HUF ANANG NAVNITLAL HUF AND KALPE SH NAVNITLAL HUF AND SHRI BHUPENDRA GOPALDAS. DEV PUJA BUILDERS (P) LTD. HAD GIVEN RS.8 LACS BY C HEQUE ON DATED 8.8.2004 TO NEW NATIONAL CHEMICAL INDUSTRIES LOAN. THIS AMOUNT WAS DEPOSITED IN THE BANK ACCOUNT OF NEW NATIONAL C HEMICAL INDUSTRIES ON 10.8.2004. ASSESSEE HAD TAKEN RS.2.5 LACS ON 24.2.2005 AND RS.1.5 LACS ON 12.3.2005 WHICH WAS CR EDITED IN THE BANK ACCOUNT OF THE APPELLANT. THE OWNER M/S JAM HOSIERY (P) LTD. BY AN AGREEMENT FOR SALE DT.12.8.2004 AGREED TO SELL THE PREMISES SUBJECT TO LEASE GRANED IN FAVOUR OF NEW NATIONAL CHEMICAL INDUSTRY. THE OWNER S AGREED TO SELL THE PREMISES TO DEV PUJA BUILDERS (P) LTD. THE APPELLANT AND LEGAL HEIRS OF LATE SHRI GOPALDAS PREMCHAND WERE NO T AWARE OF SUCH AGREEMENT BETWEEN THE PARTIES AND THEY WERE AL SO NOT PARTY TO THE AGREEMENT DT.12.8.2004. THUS DEV PUJA BUILDERS (P) LTD. BECAME OWNERS OF THE PROPERTY AND ASSESSEE AND OTHE R LEGAL OWNERS BECAME LESSEE OF THE OWNERS DEV PUJA BUILDER S (P) LTD. THIS WAS IN ASST. YEAR 2005-06. ASSESSEE ALONG WITH OTHER CO-LESSEE OF THE PREMISE S NEGOTIATED FOR TRANSFER/SURRENDER OF LEASE RIGHTS WITH THE NEW OWN ERS OF THE SAID PREMISES AND FINALIZED THE AMOUNT AT RS.42 LACS. IN WORKING OUT THE MODE OF PAYMENT RS.8 LACS WHICH WAS RECEIVED FROM T HE SAID DEV PUJA BUILDERS (P) LTD. WAS INCLUDED INSTEAD OF RETU RNING THE FUNDS TO THEM. THE PAYMENT RECEIVED FROM THEM IS AS PER D ETAILS GIVEN AT PAGE 49 OF THE PAPER BOOK. (AS PER THIS PAGE THE AP PELLANT RECEIVED RS.34 LACS ON 22.6.2005). THE LD. A.O. HAS CONSTRUED THAT THE APPELLANT HAD G IVEN POSSESSION OF THE PREMISES AS PART OF SURRENDER AGREEMENT IN A UGUST 2004 WHICH IS INCORRECT ON THE FACT OF THE RECORD AND TH E AGREEMENT FILED BY THE APPELLANT. THE LD. AO HAS MISUNDERSTOOD THE LANGUAGE OF THE ITA NO.1842/AHD/2009 ASST. YEAR 2005-06 5 AGREEMENT TO CONSTRUE THAT THE APPELLANT GAVE POSSE SSION OF THE PREMISES TO THE SAID DEV PUJA BUILDERS (P) LTD. IN FACT THE DOCUMENT REFERRED THAT THE OLD OWNERS JAM HOSIERY ( P) LTD. GAVE POSSESSION TO THE NEW OWNERS WHO PURCHASED THE PROP ERTY FROM DEV PUJA BUILDERS (P) LTD. IF ONE READS THE CLAUSES 2 8 & 13 OF THE RELEASE D EED IT IS AMPLY CLEAR THAT THE APPELLANT AND OTHER LESSEES GAVE POS SESSION OF THE PREMISES TO THE OWNERS ONLY AFTER EXECUTION OF THE RELEASE DEED AND RECEIVING THE PAYMENT. THEY HAVE ALSO HANDED OVER A LL THE ORIGINAL DOCUMENTS AND PAPERS TO THE OWNERS DEV PUJA BUILDER S (P) LTD. AN EXECUTION OF THE RELEASE DEED AND THERE IS NO INDIC ATION IN THE DOCUMENT THAT THE APPELLANT HAD GIVEN POSSESSION OF THE PREMISES PRIOR TO 22 ND JUNE 2005. THEREFORE THERE IS NO QUESTION OF APPLICABILITY OF THE PROVISIONS OF SECTION 53A OF THE ACT AND THE JUDICIAL DECISION RE FERRED TO BY THE LD. AO. (1) THE AGREEMENT OF TRANSFER OF LAND IS EXECUTED B ETWEEN JAM HOSIERY (P) LTD. BY WHICH ON 12.8.2004 DEV POOJA BU ILDERS (P) LTD. BECAME OWNERS OF THE LAND WHICH WAS LEASED TO ASSESSEE WHO WAS ONE OF THE PARTNERS OF M/S NEW NATIONAL CHEMICA LS INDUSTRIES AND WAS CONTINUED TO BE IN LEASE WITH THE ASSESSEE AS PER CLAUSE K AT PAGE 9 OF PAPER BOOK. (2) THE TRANSFER AND SALE OF LAND BETWEEN THEM WAS SUBJECT TO CONTINUATION OF LEASE OF M/S NEW NATIONAL CHEMICAL INDUSTRIES. THEREFORE ASSESSEE CONTINUED AS LESSEE BUT OF NEW LESSOR DEV PUJA BUILDERS (P) LTD. (3) THE ASSESSEE SURRENDERED THE LEASE TO NEW OWNER S DEV POOJA BUILDERS (P) LTD. BY EXECUTING THE DEED OF SU RRENDER OF LEASE ON DATE 22 ND JUNE 2005. THESE FACTS ARE VERY CLEAR IN THE CLAUSE K AT PAGE 6 OF THE AGREEMENT SURRENDER OF LEASE DATED 22 ND JUNE 2005 WHICH IS REPRODUCED AS UNDER : K BY AGREEMENT FOR SALE DATED 12.08.2004 EXECUTED BY AND BETWEEN JAM HOSIETY PRIVATE LTD. (THEREIN REFERRED TO AS THE SAID OWNERS) AND THE OWNERS HEREIN (THEREIN REFERRED TO AS PURCHASERS) THE OWNERS HEREIN AGREED TO PURCHASE THE SAID ITA NO.1842/AHD/2009 ASST. YEAR 2005-06 6 PROPERTY SUBJECT TO LEASE GRANTED IN FAVOUR OF NEW NATIONAL CHEMICAL INDUSTRY. THE SAID AGREEMENT IS DULY REGIS TERED WITH THE OFFICE OF SUB-REGISTRAR AT BANDRA UNDER SERIAL NO.B DR 7935 OF 2004. THE SAID JAM HOSIERY HAS AUTHORIZED THE OWNER S TO NEGOTIATE WITH THE LESSEES. THE SAID JAM HOSIERY HAS EXECUTED AN IRREVOCABLE POWER OF ATTORNEY IN FAVOUR OF OWNERS HEREIN GRANTI NG VARIOUS POWERS INCLUDING POWER TO EXECUTE THE CONVEYANCE IN RESPECT OF THE SAID PROPERTY ON THEIR BEHALF. THE SAID JAM HOS IERY HAS HANDED OVER LEGAL POSSESSION OF THE SAID PROPERTY TO THE O WNERS HEREIN SUBJECT TO THE RIGHT OF THE LESSEE HEREIN WITH AN E XCLUSIVE RIGHT TO TAKE THE SURRENDER OF THE SAID PROPERTY IN THEIR FA VOUR. IN THE SAID AGREEMENT THE SAID OWNERS HAVE CONFIRMED THAT THEY HAVE RECEIVED ENTIRE CONSIDERATION AND OWNERS HEREIN ARE ENTITLED TO DEAL WITH THE LESSEES/TENANTS ON THE SAID PROPERTY AND GET THE LE ASES/TENANTS SURRENDERED IN FAVOUR OF THE OWNERS HEREIN. THERE IS NOTHING IN THE CLAUSE WHICH SUGGESTS THAT ON 12.8.2004 THE SURRENDER OF LEASE OF THE PREMISES WAS MADE BY ASSE SSEE. THEREFORE IT IS MISTAKEN ON PART OF THE AO TO OBSE RVE THAT ASSESSEE HAD AGREED ON 12.8.2004 TO SURRENDER THE LEASE OF T HE PREMISES. THE ASSESSEE AS A CO-OWNERS EXECUTED THE REGISTERED DEED TO SURRENDER THE LEASE HOLD RIGHTS TO IMMOVABLE PROPER TY ON 22.6.2005 WHICH IS IN ASST. YEAR 2006-07 AND UPON G IVING POSSESSION OF THE PROPERTY RECEIVED RS.21 00 000/- AS HIS SHARE ON TRANSFER OF IMMOVABLE PROPERTY. ACCORDINGLY AND IN VIEW OF DECISION OF HONBLE GUJ ARAT HIGH COURT REPORTED AT 205 ITR 542 IN THE CASE OF CIT VS . MARMASJI MMCHARJI VAID THE CAPITAL GAIN ARISES IN CASE OF A REGISTERED DOCUMENT ON THE DATE OF EXECUTION OF DOCUMENT. THE ASSESSEE HAS NOT RELINQUISHED ANY RIGHTS ON 12. 8.2004 AND HENCE NO CAPITAL GAIN ARISES IN ASST. YEAR 2005-06. THERE WAS NO TRANSFER EFFECTED IN THE ACCOUNTING YEAR 2005-06 AS THERE WAS NO DOCUMENT EXECUTED BY THE ASSESSEE FOR SURRENDER OF LEASE RIGHTS IN ASST. YEAR 2005-06 AND HENCE THE PROVISIONS OF S ECTION 45 OF THE ACT NOT ATTRACTED IN ASST. YEAR 2005-06. ITA NO.1842/AHD/2009 ASST. YEAR 2005-06 7 4. AFTER CONSIDERING THE OBSERVATIONS OF AO AND THE SUBMISSIONS OF THE ASSESSEE THE LD. CIT(A) DELETED THE IMPUGNED A DDITION WITH THE FOLLOWING OBSERVATIONS :- 4. IN SHORT ON 12.8.2004 THE OWNERSHIP OF THE PROP ERTY WAS AGREED TO BE TRANSFERRED FROM JAM HOSIERY (P) LTD. TO DEVPUJA BUILDERS (P) LTD. SUBJECT TO LEASE GRANTED IN FAVOUF OF M/S NEW NATIO NAL CHEMICALS INDUSTRIES A FIRM IN WHICH THE APPELLANT HAD 50% P ARTNER. M/S NEW NATIONAL CHEMICAL INDS. HAS FURTHER SUB-LET THE PRE MISES TO TWO PARTIES NAMELY BARIWALI RUBBER WORKS AT MONTHLY RENT OF RS. 200/- AND M/S ALL INDIA MEDICAL CORPN. AT MONTHLY RENT OF RS.1551/-. THE APPELLANT SUBMITTED PROOF THAT EVEN AFTER 12.8.2004 THE APPEL LANT WAS IN THE POSSESSION OF THE PREMISES WHICH IS EVIDENT FROM TH E FACT THAT THE MUNICIPAL TAXES WERE PAID AFTER 12.8.2004 AND THE F IRM M/S NEW NATIONAL CHEMICAL INDS. CONTINUED RECEIVING RENTAL INCOME FR OM ITS SUB-TENANTS EVEN AFTER 12.8.2004 TILL MAY 2005. IN OTHER WORDS ACCORDING TO THE ASSESSING OFFICER THE RIGHTS IN THE BORIWALI PROPER TY MUMBAI WERE RELINQUISHED BY THE APPELLANT ON 12.8.2004 ITSELF W HICH FALLS IN ASST. YEAR 2005-06 WHEN THE APPELLANT GOT THE SHARE OF RS.4 LA C FOR VACATING THE PROPERTY IN QUESTION. ON THE OTHER HAND THE APPELLA NTS CASE IS THAT THOUGH THE DEED OF SALE WAS DATED 12.8.2004 AND IN PURSUANCE OF THAT THE APPELLANT WAS PAID RS.4 LAC (BEING 50% SHARE OF RS. 8 LAC IN PARTNERSHIP FIRM M/S NEW NATIONAL CHEMICAL INDUSTRIES) THE CAP ITAL GAIN IS TAXABLE IN THE ASST. YEAR 2006-07 WHEN THE DEED OF SURRENDE R DATED 22.6.2005 WAS EXECUTED WITH DEVPUJA BUILDERS (P) LTD. TO WHOM THE ORIGINAL OWNERS JAM HOSIERY WORKS (P) LTD. HAD SOLD THE PREMISES BY THE DEED OF SALE DATED 12.8.2004. ACCORDING TO THE APPELLANT THE BAL ANCE CONSIDERATION OF RS.34 LAC WAS RECEIVED BY THE FIRM (IN WHICH THE AP PELLANT IS HAVING 50% SHARE) ON 22.6.2005. IN SUPPORT OF ITS CLAIM THAT T HE PREMISES WERE SURRENDERED BY THE APPELLANT ONLY AFTER MARCH 2005 THE APPELLANT SUBMITTED PARTICULARS OF PAYMENT OF MUNICIPAL TAX O F RS.16 522/- EACH ON 1.5.2004 & 24.11.2004 RESPECTIVELY BY DEBITING THE A/C NO.1638 WITH CENTRAL BANK OF INDIA VASNA BRANCH AHMEDABAD. FUR THER APPELLANT PRODUCED THE COPY OF BANK STATEMENT SHOWING THAT TH E CHEQUE OF RENT FROM THE SUB-LESSEE OF RS.1551/- WAS CREDITED IN THE BAN K ACCOUNT OF THE FIRM NEW NATIONAL CHEMICAL INDUSTRIES ON 15.12.2004 9.1 1.2004 ETC. FURTHER THE APPELLANT HAS RECEIVED CHEQUE NO.575286 OF RS.1 551/- ON 13.4.2005 AND CHEQUE NO.101703 FOR RS.1551 ON 11.5.2003 FROM ALL INDIA MEDICAL CORPORATION TOWARDS RENT FOR THE PERIOD APRIL 2005 AND MAY 2005. SIMILARLY RECEIPT OF RENT FROM ANOTHER SUB-TENANT B ORIWALI RUBBER WORKS @ RS.200/- P.M. IS SHOWN BY CHEQUE EVEN AFTER 31.3. 2005. IN MY OPINION MERELY BECAUSE OF A SALE DEED 12.8.2004 WAS SIGNED DOES NOT NECESSARILY ITA NO.1842/AHD/2009 ASST. YEAR 2005-06 8 MEAN THAT THE PROPERTY WAS ALSO HANDED OVER AND TRA NSFERRED ON 12.8.2004 ITSELF. THE FACT THAT FIRM RECEIVED FURTH ER CONSIDERATION OF RS.34 LAC ON 22.6.2005 THE MUNICIPAL TAX ARE PAID AFTER T HE DATE OF DEED OF SALE ON 12.8.2004 THE RENTAL INCOME FROM THE SUB TENANT IS ACCOUNTED FOR BY THE APPELLANT TILL MAY 2005 GOES TO SHOW THAT THE APPELLANT HAS NOT SURRENDERED THE PREMISES TO THE NEW BUYER. THEREFOR E THE PROVISIONS OF SEC.53A OF TRANSFER OF PROPERTY ACT WOULD NOT BE AP PLICABLE IN THIS CASE. I THEREFORE HELD THAT THE PROPERTY IN QUESTION IS NOT TRANSFERRED DURING ASST. YEAR 2005-06 BUT IN ASST. YEAR 2006-07. THE A O IS THEREFORE DIRECTED TO TAX THE INCOME ON ACCOUNT OF CAPITAL GA IN IN ASST. YEAR 2006- 07 AND NOT IN ASST. YEAR 2005-06. AGAINST THIS ORDER OF THE LD. CIT(A) THE REVENUE I S IN APPEAL BEFORE THE TRIBUNAL. 5. BEFORE US THE LD. DR SUPPORTED THE ORDER OF AO AND SUBMITTED THAT THE LD. CIT(A) IS NOT JUSTIFIED IN DELETING THE ADD ITION OF RS.19 50 000/- MADE ON ACCOUNT OF LONG TERM CAPITAL GAIN AS PER TH E SPECIFIC PROVISIONS OF SECTION 45 R.W.S. 2(47) OF THE ACT AND SECTION 53A OF THE TRANSFER OF PROPERTY ACT 1882. THE LD. CIT(A) HAS NOT PROPERLY CONSIDERED THE RELEVANT FINDINGS OF THE AO DISCUSSED AT PARAGRAPH 2.5 OF THE ASSESSMENT ORDER AND HENCE THE ORDER OF LD. CIT(A) BE SET ASID E AND THAT OF THE AO BE RESTORED. 6. ON THE OTHER HAND THE LD. COUNSEL OF THE ASSESS EE RELYING ON THE ORDER OF LD. CIT(A) SUBMITTED THAT THERE IS NO MIST AKE IN THE ORDER OF LD. CIT(A) WHO HAS HELD THAT THE FIRM RECEIVED CONSIDER ATION OF RS.34 LAC ON 22.6.2005 THE MUNICIPAL TAXES ARE PAID AFTER THE D ATE OF DEED OF SALE ON 12.4.2008 THE RENTAL INCOME FROM THE SUB-TENANT IS ACCOUNTED FOR BY THE ASSESSEE TILL MAY 2005 GOES TO SHOW THAT THE ASSES SEE HAD NOT SURRENDERED THE PREMISES TO THE NEW BUYER. THE PROV ISIONS OF SEC.53A OF TRANSFER OF PROPERTY ACT WOULD NOT BE APPLICABLE IN THIS CASE. THE ITA NO.1842/AHD/2009 ASST. YEAR 2005-06 9 PROPERTY WAS NOT TRANSFERRED IN ASST. YEAR 2005-06 BUT IN ASST. YEAR 2006-07. ACCORDINGLY THE LD. CIT(A) WAS JUSTIFIED IN DIRECTING THE AO TO TAX THE INCOME ON ACCOUNT OF CAPITAL GAIN IN ASST. YEAR 2006-07 AND NOT IN ASST. YEAR 2005-06. HIS ORDER MAY KINDLY BE UPHE LD. 7. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE MATERIAL ON RECORD WE ARE OF THE CONSIDERED VIEW THAT THE L D. CIT(A) WAS JUSTIFIED IN GIVING DIRECTION TO TAX THE CAPITAL GAIN IN ASST . YEAR 2006-07. THERE IS NO DISPUTE ABOUT THE TAXING OF THE CAPITAL GAIN. BU T THE DISPUTE IS ONLY RELATING TO THE YEAR OF TAXING THE CAPITAL GAIN. TH E FACTS OF THE CASE ARE THAT THOUGH THE DEED OF SALE WAS DATED 12.8.2004 AND IN PURSUANCE OF THAT THE ASSESSEE WAS PAID RS.4 LAC (BEING 50% SHARE OF RS.8 LAC IN PARTNERSHIP FIRM M/S NEW NATIONAL CHEMICAL INDUSTRIES) THE CAP ITAL GAIN IS TAXABLE IN ASST. YEAR 2006-07 WHEN THE DEED OF SURRENDER DATED 22.6.2005 WAS EXECUTED WITH DEVPUJA BUILDERS (P) LTD. TO WHOM THE ORIGINAL OWNERS JAM HOSIERY WORKS (P) LTD. HAD SOLD THE PREMISES BY THE DEED OF SALE DATED 12.8.2004. THE BALANCE OF CONSIDERATION OF RS .34 LAC WAS RECEIVED BY THE FIRM (IN WHICH THE ASSESSEE IS HAVING 50% SH ARE) ON 22.6.2005. IN SUPPORT OF ITS CLAIM THAT THE PREMISES WERE SURREND ERED BY THE ASSESSEE ONLY AFTER MARCH 2005 THE ASSESSEE SUBMITTED PART ICULARS OF PAYMENT OF MUNICIPAL TAX OF RS.16 522/- EACH ON 1.5.2004 & 24. 11.2004 RESPECTIVELY BY DEBITING THE A/C NO.1638 WITH CENTR AL BANK OF INDIA VASNA BRANCH AHMEDABAD. FURTHER ASSESSEE PRODUCED THE COPY OF BANK STATEMENT SHOWING THAT THE CHEQUE OF RENT FROM THE SUB-LESSEE OF RS.1551/- WAS CREDITED IN THE BANK ACCOUNT OF THE F IRM NEW NATIONAL CHEMICAL INDUSTRIES ON 15.12.2004 9.11.2004 ETC. F URTHER THE ASSESSEE HAS RECEIVED CHEQUE NO.575286 OF RS.1551/- ON 13.4. 2005 AND CHEQUE NO.101703 FOR RS.1551 ON 11.5.2003 FROM ALL INDIA M EDICAL CORPORATION TOWARDS RENT FOR THE PERIOD APRIL 2005 AND MAY 20 05. SIMILARLY RECEIPT ITA NO.1842/AHD/2009 ASST. YEAR 2005-06 10 OF RENT FROM ANOTHER SUB-TENANT BORIWALI RUBBER WOR KS @ RS.200/- P.M. IS SHOWN BY CHEQUE EVEN AFTER 31.3.2005. WE ARE OF THE CONSIDERED VIEW THAT LD. CIT(A) HAS RIGHTLY HELD THE CAPITAL GAIN I S TAXABLE IN ASST. YEAR 2006-07 SINCE THE DEED OF SURRENDER WAS EXECUTED ON 22.6.2005. THERE IS NO INFIRMITY IN THE ORDER OF LD. CIT(A) WE UPHOLD THE SAME AND DISMISS THE GROUNDS RAISED BY THE REVENUE. 8. IN THE RESULT THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 23/09/2011 SD/- SD/- (A. K. GARODIA) (D. K. TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD DATED : 23/9/2011 MAHATA/- COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNS. 5. THE DR ITAT AHMEDABAD 6. GUARD FILE. BY ORDER DEPUTY / ASSTT.REGISTRAR ITAT AHMEDABAD ITA NO.1842/AHD/2009 ASST. YEAR 2005-06 11 1.DATE OF DICTATION 20/9/11. 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING MEMBER 21/9/11. /OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT.. 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..