DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE - 7, PUNE vs. SUBHASH S. GOEL, PUNE

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ITA 1532/PUN/2017Status: DisposedITAT Pune23 March 2022AY 2009-106 pages

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

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal noted that the issue pertains to the Assessment Year 2013-14, but the sale deed and the capital gain taxation were for Assessment Year 2009-10. The Revenue's appeal was therefore misplaced.

What were the facts?

The Revenue appealed against the CIT(A)'s deletion of Long Term Capital Gain addition of Rs. 12,15,54,375/- related to the transfer of land. The assessee's share of consideration for the sale of 70 acres of land was Rs. 24,31,08,750/-.

What were the issues?

Whether the addition of Long Term Capital Gain was justified, and whether the capital gain was correctly taxed in the relevant assessment year.

Which sections of the Income-tax Act were involved?

Section 143(1),Section 148,Section 2(47),Section 53A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’ BENCH, PUNE

For Appellant: Shri Krishna V. Gujarathi
For Respondent: Ms. Divya Bajpai
4.

Before the ld. CIT(A), it was submitted by the assessee that on similar facts and issue in the case of Mr. Rajendra Sitaram Goel who is a co-owner of the land in question, the Pune Tribunal in had upheld the stand of the assessee. Even the ld. .D.R fairly conceded that this issue is covered by the decision of the Tribunal in the co-owner‟s case as has been submitted before the ld. CIT(A). The ld. A.R brought to our notice relevant para 4.8 of the CIT(A)‟s order wherein the Tribunal‟s order in the case of co-owner Mr. Rajendra Sitaram Goel in ITA No. 1310/PUN/2013 dated 9-1-2017 was referred to and following that judgment, the ld. CIT(A) had allowed the appeal of the assessee. We find, Pune Tribunal in ITA No. 1310/PUN/2013 (supra) had observed and held as follows:

“47. In the instant case admittedly the assessee along with other co-owners was having land admeasuring 70 acres situated at Wagholi and was not having 108 acres of contiguous land that had been agreed upon to be 37 1485,748, 749 & 933 /PUN/2013 sold at the relevant time. Further the sale deed contained certain obligations on the part of the assessee and the co-owners to be fulfilled and the assessee has received only 50% of the consideration during the impugned assessment year. We find from the letter addressed by Mr. Atul Chordia, Director of Wagholi Properties Pvt. Ltd., copy of which is placed at pages 41 to 44 of paper book No.III, that in response to notice u/s.226(3) for recovery of dues in case of the assessee, he has categorically stated that the balance amount of Rs.17.01 crores is payable only after fulfillment of certain conditions mentioned in the agreement. In our opinion, the contents of the agreement has to be read as a whole and the revenue cannot re-write the agreement. The various decisions relied on by CIT(A) in our opinion are distinguishable and not applicable to the facts of the present case. In all those cases, the right to receive the consideration has been postponed. However, in the instant case the right to receive the consideration is on fulfillment of certain obligations. Further, the assessee has offered the balance amount to tax in A.Y. 2014-15 as business income. In view of the above discussion and respectfully following the decisions cited above, we are of the considered opinion that assessee is liable to capital gain tax only on 50% of the consideration that has been received during the year. We, therefore, set aside the order of the CIT(A) and allow the grounds raised by the assessee. The most important observation of the Tribunal was that the Judicial 5. pronouncements which were relied on by the ld. CIT(A) were held to be distinguishable and not applicable to the case of the assessee therein. In all those cases right to receive consideration has been postponed. However, in the instant case, right to receive consideration is on fulfilment of certain obligations. Respectfully following the aforesaid decision of the Tribunal on the same facts and circumstances and on the same parity of reasoning, we do not find any reason to interfere with the findings of the ld. CIT(A) and the relief provided to the assessee is sustained.

6.

In the result, the appeal of the Revenue is dismissed.

Order pronounced in the open Court on this 23rd day of March 2022

Sd/- sd/- (DR. DIPAK P. RIPOTE) (PARTHA SARATHI CHAUDHURY) ACCOUNTANT MEMBER JUDICIAL MEMBER Pune; Dated, the 23rd March 2022 Ankam Copy of the Order forwarded to : 1. The Appellant. 2. The Respondent. 3. The Pr. CIT- 4, Pune 4. The CIT(A)- 5, Pune. 5. D.R. ITAT „A‟ Bench 5. Guard File BY ORDER,

Sr. Private Secretary ITAT, Pune.

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