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Income Tax Appellate Tribunal, MUMBAI BENCHES “SMC”, MUMBAI
Before: Shri Joginder Singh,
आदेश / O R D E R
The assessee is aggrieved by the impugned order dated 26/02/2015 of the Ld. First Appellate Authority, Mumbai. The only ground raised/agitated in this appeal pertains to non-consideration of submissions of the assessee and also the application filed u/s 154 of the Act with respect to capital gain on sale of TDR as exempt, based upon decision of the Tribunal in the case of ITO vs Shri Hemantdas J. Pariyani (ITA No.2508/Mum/2010) and CBDT Circular No.68 dated 17/11/1971.
During hearing of this appeal, the ld. counsel for the assessee, Shri D.H. Akali, advanced arguments which are identical to the ground raised by inviting my attention to pages 35 to 42 of the paper book along with the submissions made before the ld. Commissioner of Income Tax (Appeals). On the other hand, Shri V.S. Jadhav, defended the conclusion arrived at in the impugned order.
2.1. I have considered the rival submissions and perused the material available on record. The facts, in brief, are that the assessee, an individual, during the relevant period, was having income from house property, other sources, tuition fees and capital gains, etc, declared income of Rs.8,49,998/- in her return filed on 20/07/2009, which was processed u/s 143(1) of the Income Tax Act, 1961 (hereinafter the Act). During the relevant period, the assessee received share of compensation from the developer on surrender of excess FSI in which the assessee was hitherto residing. As per the assessee, she was legal owner of flat no. A/64, having area of 450 sq. ft, acquired vide agreement dated 01/08/1993 for Rs.5 lakh in Sunil Niwas CHS Ltd. and having five share in the society. The said society under the prevailing development control rules of for Greater Mumbai-1991 took the entire society building for redevelopment, being very old and unsafe to continue to reside and thus entered into agreement with the redeveloper. As per the assessee the development control rules provide for normal FSI of 1:1 for development of residential flats, when old residential/slums are taken for redevelopment, to compensate the redeveloper to provide new flats to the existing occupants, an higher FSI of to 2.00 and above is provided under the Rules. The assessee claimed capital gain of Rs.7,06,400/-, on account of compensation received from redeveloper on the occasion of redevelopment for the transfer of FSI increased rights. The assessee paid advance tax of Rs.1,38,020/- on the same. The claim of the assessee is that, while filing the return in July 2009, there was no clarity on the taxability of the compensation received on the surrender of the FSI, granted under the development control regulations for Greater Mumbai-1991, hence, the assessee declared this compensation as income from capital gains on surrender of excess FSI, by way of abundant caution and paid the advance tax. Thereafter, the Tribunal vide order dated 29/04/2011, in the case of ITO vs Shri Hemantdas J. Pariyani (ITA No.2508/Mum/2010) holding that the compensation received on surrender of FSI, under the development control regulation for Greater Mumbai-1991, is not taxable as capital gain as it has no cost of acquisition. It was asserted by the ld. counsel that no further appeal was filed against this aforesaid decision.
Further, as per assessee and CBDT Circular No.68 dated 17/11/1971, it was clarified that a mistake arising as a result of subsequent interpretation of law by the Supreme Court would constitute a mistake apparent from record and rectification order u/s 154 of the Act would be an order. It was claimed that this circular is applicable to the case of the assessee as the fundamental purpose of the Circular is to cover the term “a mistake apparent from record” and the ld. Assessing Officer did not consider the application of the assessee filed u/s 154 of the Act on 01/05/2012, which was rejected by him. Reliance was placed upon the decision in the case of Asian Techs Ltd. 243 ITR 262 (Kerala) and Laskhmi Prasad Lakhar 74 taxman 112 (Guwahati).
In view of the submissions of the assessee and the foregoing discussion and also the mandate of Article 265 of the Constitution of India, I am of the view that only due taxes has to be levied/collected, therefore, considering the principle of natural justice, that no person should be condemned unheard, this appeal is sent to the file of the ld. Assessing Officer to consider the CBDT Circular No.68 and the aforesaid decision of the Tribunal along with the agreement and after providing due opportunity of being heard to the assessee, decide in accordance with law. The assessee is at liberty to furnish evidence/material, if any, in support of her claim, thus, the appeal of the assessee is allowed for statistical purposes only. It is worth mentioning here that reconsideration at the level of the ld. Assessing Officer was even not objected by the ld. DR.
Finally, the appeal of the assessee is allowed for statistical purposes only.
This order was pronounced in the open in the presence of ld. representative from both sides at the conclusion of the hearing on 21/01/2016.