TaxTMI 
TaxTMI 
2020 (12) TMI 660
X X X X Extracts X X X X
X X X X Extracts X X X X
....ax (Appeals)-33, Mumbai in appeal No.CIT(A)-33/Rg.21/247/2015-16 dated 12/04/2017 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3) of the Income Tax Act, 1961 (hereinafter referred to as Act) by the ld. Income Tax Officer 21(1)(2), Mumbai (hereinafter referred to as ld. AO). ITA No.7324/Mum/2018 (A.Y.2012-13) This appeal in ITA No.7324/Mum/2018 for A.Y.2012-13 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-48, Mumbai in appeal No.CIT(A)-48/IT-306/AC-21(3)/2018-19 dated 26.10.2018 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3) of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 26/03/2015 by the ld. Asst. Commissioner of Income Tax - 21(3), Mumbai (hereinafter referred to as ld. AO). Facts of appeal in the case of Mrs. Asha Arun Gawli in ITA No.4220/Mum/2017 and the proceedings before the ld. AO and ld . CITA 2. The only effective issue to be decided in this appeal is as to whether the sum of Rs. 1,20,00,000/- received by the assessee from the sale of plot of land could be treated as long term capital gains or income from other sources. The interconnected issue involved therein to be decided ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ty as natural guardian of the minor children. The ld. AO has noted that the relevant Purchase Agreement dated 25.06.1992 showed the said four minor children viz.(i) Miss. Geeta Gawli- 9 yrs. (ii) Miss Yogita Gawli, 7 yrs. (iii) Master Mahesh Gawli-4 yrs. and (iv) Master Yogesh Gawli - 3 yrs. as purchasers and being minors, the assessee executed the deed of purchase on their behalf. Thus according to the ld. AO, the assessee was not the owner of the said immovable property. 3.2. The ld. AO has observed that as per the Agreement for Sale of the said immovable property dated 31.10.2011, the owners/vendors were the four children of the assessee viz. (i) Miss. Geeta Gawli - 28 yrs. (ii) Miss Yogita Gawli, 24 yrs. (iii) Mahesh Gawli - 23 yrs. and (iv) Yogesh Gawli - 21 yrs and the assessee was the consenting party. The ld. AO has noted that out of the safe consideration of Rs. 6 crores, an amount of Rs. 1.20 crores was received by the assessee as if she was one amongst the joint owners entitled to 20% of the sale consideration, but as per the sale agreement, she was only the consenting party. According to the ld. AO, it is apparent from all the three documents mentioned above that the a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....orted by VDIS certificate or by way of deemed gift by the co-owners. It cannot be disputed that the property which was sold for Rs. 6,00,00,000/- was not a capital asset and therefore any sum received in lieu of its transfer would be chargeable only as capital gains whether in the hands of the assessee or any other persons as the case may be. The nature of receipt will not alter even if the assessee is not having an absolute title. In the case of M/s TATA Services Limited 122 ITR 594 (BOM) it has been held that the words and phrases " Property under section 2(14) includes any rights which can be called property. Similarly in the case of M/s Sterling Investment Corporation 123 ITR 441 (BOM) a contractual right obtained under the contract of sale will be considered as capital Asset under section 2 (14). In the case of M/s PNB Finance Limited 252 ITR 491 (DELHI) it has been held that the 'property' is of widest import and it signifies every possible interest which a person can acquire, hold or enjoy. Does the right of the assessee in the above property is a capital asset itself and sale of her share, right title , claim and interest in the said property, would amount t....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the course of first appellate proceedings, the assessee argued that it is the assessee who has purchased the property at Pisoli Village, Pune in the name of her four minor children and accordingly, had taken the role of natural guardian of the children for total consideration of Rs. 2,15,183/- and moreover in the year 1997, the assessee on behalf of four children had declared the investment made in land at Pisoli Village, Pune of Rs. 2,15,183/- under VDIS scheme 1997 and paid the full tax thereon and had obtained certificate from the ld. Administrative Commissioner for the same. It was vehemently argued that the agreement should be read as per the understanding of the parties to the agreement i.e. assessee, assessee's children and the purchaser and the department cannot hold that the agreement is not valid or the department cannot re-write the said agreement. It was pleaded that right in the agreement is a capital asset and hence, the income arose from the sale of such capital asset would result only as capital gain and not income from other sources. It is a fact that the purchaser had paid 20% of the total consideration of Rs. 6 Crores to each of the five parties comprising of as....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ale consideration at Rs. 1,50,00,000/- on sale of land as against Rs. 1,20,00,000/- reported by the assessee in the facts and circumstances of the instant case. 5.1. Facts are that assessee and his three siblings namely i)Miss Yogita Gawli ii) Mr Yogesh Gawli iii) Miss Geeta Gawli sold a property at the Pisoli, Pune, for Rs. 6 crores. As per assessee, the sale proceeds of this property were divided equally in 5 parts of Rs. 1,20,00,000/- each and same was shown as sales consideration in the hands of assessee, his 3 siblings and his mother (total 5 parts). Therefore, as per assessee, the total sale consideration of Rs. 1.20 crore each was shown in the hands of 5 individuals. For computing the cost of acquisition of the property, assessee has again divided the cost into 5 parts equally. 5.2. The ld . AO on the other hand held that assessee's mother had no ownership of the property and therefore, the sales consideration of Rs. 6 crores was to be divided into 4 parts and assessed as sales consideration of Rs. 1.50 Crore each for the capital gain purpose in the hands of assessee and his three siblings. The ld. AO completed the assessment by dividing the total sale consideration of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....was handed over to the assessee's mother either by co-owners directly or by the purchaser at the behest of the co-owners, when the mother was not owner of the property as per the sale document itself, the said receipt will not give raise to capital gains in the hands of the mother. The ld. CIT(A) however, rectified the mistake committed by the ld. AO with regard to giving deduction for 1/5th share of cost of acquisition in the hands of the assessee, to 1/4th share as there were only four co-owners including the assessee in the property. The ld. CIT(A) directed the ld. AO to recompute the capital gains accordingly. Facts of appeal in the case of Ms. Yogita Arun Gawli in ITA No.7324/Mum/2018 and the proceedings before the ld. AO and ld . CITA 6. The facts narrated hereinabove in the case of Mahesh Arun Gawli and the treatment given by the ld. AO as well as by the ld. CIT(A) would hold good for this assessee i.e. Yogita Arun Gawli also as being one of the co-owners in the subject mentioned property. 7. All the aforesaid three appeals are taken up together and disposed off by this common order for the sake of convenience as the facts and the issue involved are identical. From the af....
X X X X Extracts X X X X
X X X X Extracts X X X X
....al owner of the land situated at Pisoli Village, Pune. 8. In view of the aforesaid observations, we hold that total sale consideration of Rs. 6 Crores should be divided equally only among the four children at Rs. 1,50,00,000/- each of the assessee i.e. Mrs. Asha Arun Gawli. Correspondingly, the cost of acquisition benefit together with indexation thereon, should also be given only for 1/4th share to each of the co-owner (i.e 4 children) excluding the assessee. 8.1. With regard to the decision relied upon by the ld. AR on the Hon'ble Jurisdictional High Court in the case of Amol C Shah (HUF) vs. ITO in Income Tax Appeal No.1219/2017 dated 27/01/2020, we find that the assessee in that case was holding tenancy right and was paid compensation. The holding of such tenancy right was a capital asset and accordingly, the compensation received by assessee was held by the Hon'ble Jurisdictional High Court to be assessable only under the head 'income from capital gains' and not 'income from other sources'. This decision is factually distinguishable with that of the assessee i.e Mrs Asha Arun Gawli as in the instant case before us as stated supra, the assessee i.e Mrs Asha Arun Gawli does no....
X X X X Extracts X X X X
X X X X Extracts X X X X
....00,000/- is neither sale consideration on sale of property nor it could be taxed as income from other sources in her hands and it is only a gift received from 4 children which is exempt u/s.56(2) of the Act, the same would ultimately result in a situation where the assessed income becomes lower than the returned income. We are conscious of this fact but at the same time, the revenue could not be unjustly enriched with unjust tax and the department shall be entitled to collect just and right tax in accordance with law from the right person. It is trite law that there is no estoppel against the statute. For the aspect that assessed income going below the returned income is concerned, we find that the Hon'ble Gujarat High Court in the case of Gujarat Gas Company Ltd., vs. JCIT reported in 245 ITR 84 and also yet another decision of Hon'ble Gujarat High Court in the case of Milton Laminates Ltd., vs. CIT reported in 37 Taxmann.com 249 had categorically held that assessed income could go below the returned income if there was obvious mistakes committed by either of the parties i.e., assessee or by the revenue. The underlying principle of these two judgments are that no tax could be col....