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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
                                                        ,,    ,

          BEFORE               SHRI H. L. KARWA, PRESIDENT
                                SHRI R.C.SHARMA,AM

                                    SA No.205/Mum/2014
                 (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


        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,
                                                           SA No.205/2014

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
                                                                    SA No.205/2014

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.
                                                        1st August,2014

                     Sd/-                                        Sd/-
         (         )                                          (       )
         (H.L.KARWA)                                        (R.C.SHARMA)
               / PRESIDENT                                 / ACCOUNTANT MEMBER

     Mumbai;            Dated        01/08/2014
      /pkm,     PS
                     Copy of the Order forwarded to :
                                                          SA No.205/2014

1.    / The Appellant
2.   / The Respondent.
3.                 / The CIT(A), Mumbai.
4.         / CIT
5.                                 / DR, ITAT, Mumbai

6.       Guard file.

                             //True Copy//
                                                                  / BY ORDER,

                                                        (Asstt.   Registrar)
                                                              / ITAT, Mumbai
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