BHAVANA SHASHIKANT GHONE,PUNE vs. INCOME-TAX OFFICER, WARD - 12(2), PUNE

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ITA 839/PUN/2018Status: DisposedITAT Pune20 June 2022AY 2014-154 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that leasehold rights are not covered under the statutory definition of 'immovable property' as defined in Section 56(2)(vii)(b) of the Act. Therefore, the addition made by the lower authorities was incorrect.

What were the facts?

The assessee acquired leasehold rights in an industrial plot from a vendor who had originally acquired these rights through lease deeds. The lower authorities invoked Section 56(2)(vii)(b) to add the value of this acquisition to the assessee's income.

What were the issues?

Whether leasehold rights in an industrial plot fall within the definition of 'immovable property' for the purpose of Section 56(2)(vii)(b) of the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 56(2)(vii)(b),Section 50C(1)

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, “A” BENCH, PUNE

Before: SHRI S.S.GODARA, JM & SHRI DR. DIPAK P. RIPOTE, AM

For Appellant: Shri M.K. Kulkarni
For Respondent: Shri S. P. Walimbe
Hearing: 07.06.2022Pronounced: 20.06.2022

आदेश / ORDER PER S. S. GODARA, JM :

1.

This assessee’s appeal for A.Y. 2014-15 is directed against the CIT(A) - 8, Pune’s order dated 03/01/2018 passed in case No. PN/CIT(A) -8/ ITO, Wd. 12(2)/253/2017-18/596 involving proceeding u/s. 143(3) of the Income Tax Act, 1961 ; in short “the Act”. Heard both the parties. Case file perused.

Mrs. Bhavana Shashikant Ghone,

2.

It emerges at the outset that the assessee’s sole substantive ground challenging section 56(2)(vii)(b) addition of Rs.67,61,000/- pertaining to the alleged purchase/acquisition of the asset i.e. plot no. J326 in MIDC industrial area, hardly requires us to delve deeper in the relevant factual matrix for the reasons hereunder.

3.

We note with the able assistance both the parties as well as from a perusal of assessee’s paper book running into 126 pages that her vendor namely M/s. General Pharmaceuticals Pvt. Ltd. had acquired leasehold rights in the foregoing industrial plot/ factory vide its agreement dated 09.08.1984 and 16.10.1986; as the case may be. It thereafter executed a similar lease deed in assessee’s favour on 04.08.2014 which has made learned lower authorities to invoke the impugned addition in the latter’s stands forming subject matter of adjudication before us.

4.

The first and foremost issue that arises for our apt adjudication in this backdrop herein is as whether such leasehold rights are covered under the statutory definition of “any immovable property” u/s.56 (2)(vii)(b) as defined in Explanation (d)(i) as “being land or building or both.” We note that the legislature has used an identical expression in section 50C(1) of the Act wherein various judicial precedents (2017) 77 taxmann.com 308 (Bom.) CIT Vs. Greenfield Hotels and Estates Pvt. Ltd., (2015) 55 taxmann.com 171 (Pune) KancastPvt. Ltd. Vs. ITO, (2011) 4SCC 36 (SC) GVK industries Ltd. V/s. ITO and 2020 – TIOL-307-ITAT-Kolkata hold that such a leasehold right

Mrs. Bhavana Shashikant Ghone, does not come under either of the twin specified categories of “land or building or both” ; as the case may be. We adopt the very reasoning herein as well to conclude that the learned lower authorities have erred in law and on facts in invoking section 56(2)(vii)(b) addition qua assessee’s acquisition of leasehold rights in issue. The impugned addition stands deleted in above terms. Ordered accordingly.

5.

This assessee’s appeal is allowed in above terms. Order pronounced in the Open Court on this 20th day of June, 2022.

Sd/- Sd/- (DR.DIPAK P.RIPOTE) (S.S. GODARA) लेखध सदस्य/ ACCOUNTANT MEMBER न्यधनयक सदस्य/JUDICIAL MEMBER पपणे / Pune; ददनधांक / Dated : 20th June, 2022. Ashwini आदेश की प्रनतनलनप अग्रेनषत / Copy of the Order forwarded to : अपऩलधथी / The Appellant. 1. प्रत्यथी / The Respondent. 2.

3. The CIT(A)-8, Pune.

4. The Pr.CIT-4,Pune. 5. नवभधगऩय प्रनतनननध, आयकर अपऩलऩय अनधकरण, “ए” बेंच, पपणे / DR, ITAT, “A” Bench, Pune. गधर्ा फ़धइल / Guard File. आदेशधनपसधर / BY ORDER, 6. // True Copy // Senior Private Secretary आयकर अपऩलऩय अनधकरण, पपणे / ITAT, Pune.

Mrs. Bhavana Shashikant Ghone,

S.No. Details Date Initials 1 Draft dictated on 07.06.2022 2 Draft placed before author 20.06.2022 Draft proposed & placed before the Second 3 Member 4 Draft discussed/approved by Second Member 5 Approved Draft comes to the Sr. PS/PS 6 Kept for pronouncement on 7 Date of uploading of Order 8 File sent to Bench Clerk 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R. 11 Date of Dispatch of order

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