Mr. Prakash Shantilal Parekh, 902, 9th Floor, Kamleshwar-II, TPS-II, 40, Tagore Road, Santacruz (West), Mumbai-400054 Vs. ITO-(19)2(4), Mumbai
August, 05th 2014
IN THE INCOME TAX APPELLATE TRIBUNAL "C", BENCH MUMBAI
BEFORE SHRI H. L. KARWA, PRESIDENT
(Arising out of ITA No .4625/Mum/2014)
( Assessment Year :2005-2006)
Mr. Prakash Shantilal Parekh, Vs. ITO-(19)2(4), Mumbai
902, 9th Floor, Kamleshwar-II,
TPS-II, 40, Tagore Road,
Santacruz (West), Mumbai-400
PAN/GIR No. : AACPP 2967 P
( Appellant) .. ( Respondent)
/Assessee by : Shri Sanjiv M. Shah
/Revenue by : Smt. Parminder
Date of Hearing : 1st August, 2014
Date of Pronouncement : 1st August, 2014
PER R.C.SHARMA (A.M.) :
This Stay Application arose out of ITA No.4265/M/2014, filed by
assessee for A.Y.2005-06, in the matter of order passed by the AO
u/s.144 r.w.s.147 of the I.T. Act.
2. It was contended by the learned AR that assessee has sold
residential flat in the A.Y.2008-09, possession of which was also given
in April, 2007, falling in the Financial Year 2007-08 relevant to the
Assessment Year 2007-08 and the assessee has already offered
capital gains on the transfer of flats to the Income Tax Department.
However, on the basis of agreement for sale entered on 21-10-2004,
the AO has brought the transaction of sale as liable to capital gain in
the Assessment Year 2005-06. As per learned AR since the assessee
has neither received the payment nor given possession, there was no
transfer within the meaning of Section 2(47), therefore, the AO was not
justified in taxing the capital gain in the Assessment Year 2005-06. He
further submitted that out of total tax demand of Rs.32,32,606/-,
assessee has already paid an amount of Rs.10,59,132/-, therefore, the
stay should be granted for the balance amount of Rs.21,73,474/-.
3. On the other hand, learned DR objected the stay application and
contended that the First Appellate Authority after considering the
contention of the assessee had confirmed the additions made by the
AO, therefore, no stay should be granted.
4. We have considered the rival contentions, carefully gone through
the stay application as well as orders of the lower authorities and found
that assessee has entered into an agreement to sale on 21-10-2004,
according to which the assessee agreed to sale 50% of her share in
the flat, which was under consideration. As per this agreement,
possession was to be handed over to the buyer on completion of
construction. The payment of sale consideration was also to be
received in the subsequent three years. When the construction of flat
was completed, assessee had given possession of the flat in April,
2007. As per assessee, since the possession was given in April, 2007
falling in Financial Year 2007-08, the assessee has offered capital gain
on sale of flat in the Assessment Year 2008-09. However, on the plea
that agreement dated 21-10-2004 gives the purchaser right to take
conveyance of the property mentioned therein so it becomes an asset
under Section 2(14) of the Act, the CIT(A) upheld the action of the AO
holding that the transfer of the flat took place only on the execution of
agreement dated 21-10-2004 and assessee was liable to capital gain
tax in the AY 2005-06. However, without going much in the merits of
the addition and keeping in view the balance of convenience vis-à-vis
prima facie case of assessee and also keeping in view the fact that out
of total demand of tax and interest of Rs.32,32,606/-, the assessee has
already paid an amount of Rs.10,59,132/-, assessee deserves stay for
the balance of the amount payable.
5. Accordingly, we grant stay and appeal is fixed for hearing on
merits on 2nd September, 2014. Both the parties were informed in the
open court and no separate notice is required to be served. We direct
6. In the result, the stay application filed by the assessee is
allowed, in terms indicated hereinabove.
Order pronounced in the open court on this 1st August,2014.
( ) ( )
/ PRESIDENT / ACCOUNTANT MEMBER
Mumbai; Dated 01/08/2014
Copy of the Order forwarded to :
1. / The Appellant
2. / The Respondent.
3. / The CIT(A), Mumbai.
4. / CIT
5. / DR, ITAT, Mumbai
6. Guard file.
/ BY ORDER,
/ ITAT, Mumbai