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TMI Blog2020 (5) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... t the said action of the Hon'ble CIT(A) may kindly be deleted." 2. Brief facts of the case are that the assessee is a Hindu Undivided Family(HUF), filed its return of income on 29-07-2016 declaring total income at Rs. 14,43,020/-. The case of the assessee was selected for limited scrutiny under computer aided scrutiny selection (CASS) for examining the issues, (i) whether investment and income in relation to properties are duly disclosed; and (ii) whether deduction from capital gains has been claimed correctly. During the assessment the assessee was served various notices through ITBA-Portal. The assessee filed response to the said notices by filing reply on the portal and uploaded the required documents in support of its claim. In the computation of income the assessee claimed long term capital gain (LTCG) of Rs. 22.50 Crore on transfer of tenancy rights in a right in a Flat on second floor Champagene House, Worli Sea Face Mumbai. The assessee also claimed deduction of LTCG under section 54 as capital gain was invested in purchase of new residential house. The assessing officer vide show-cause notice dated 16.10.2018 asked the assessee to furnish the details of capital asset ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exemption under section 54 was also denied. 6. On appeal before ld. CIT(A), the assessee urged that in reply to the notices issued by the assessing officer all documentary evidences with regard to acquisition of tenancy were filed electronically (uploaded on portal). The assessee also handed over all the documents physically to the assessing officer. The name of assessee is mention on rent receipt or last 15 years. There was no doubt cast over the tenancy rights. The sale was confirmed by the buyer in response to the notice under section 133(6). The identity and genuineness of buyer, who paid the money is not doubted. The credit in the books of the assessee is fully explained and the addition under section 68 is bad in law. The lack of income of the purchaser cannot be ground to prove his creditworthy. The ld CIT(A) after considering the submissions of the assessee passed the following order; "During the course of appellate proceedings also, the appellant could not substantiate and furnished any new documentary evidence related to acquisition of his tenancy rights. The AO has categorically mentioned in para 4.1.2 of the assessment order that appellant has provided multiple oppo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umentary evidences with respect to acquisition of tenancy rights. The assessee furnished the memorandum of partition dated 31.03.1984 along with the other documents evidencing the acquisition of tenancy right. However, the assessing officer in his order recorded that the assessee has failed to furnish any documentary evidence with respect to acquisition of tenancy right in the property. Secondly, assessing officer has observed that a notice under section 133(6) dated 07.12.2016 was served on the Secretary of the building, and in response to which only an agreement to sale of tenancy was furnished and not the tenancy agreement. Similarly, notice under section 133(6) dated 07.12.2016 was also served upon the buyer namely Pine Tree Estate Private Ltd, requiring them to submit the detail of transaction as well as Income tax return and the Bank statement. In response to the same, the buyer submitted copy of their return of income. According to the assessing officer, the income shown by said party is nil for assessment year 2016-17 and, the creditworthiness of the buyer of the capital asset is not proved. The ld AR for the assessee further submits that the assessing officer wrongly concl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... demonstrated that holding period of tenancy right by assessee were submitted before the assessing officer as well as ld CIT(A). It was explained deed of transfer of tenancy right dated 29th May 2015 evidencing right from assessee to the buyer. The letter written by BD Toshniwal HUF & Vinay Toshniwal HUF intimating change of ownership of tenancy to the landlord of the property. The assessee also furnished the copy of letter written by landlord to all tenants including a change in the ownership of property from Radhbai & Mohan Mansukhlal, the copy of those letters are placed on record. The ld AR also invited our attention on the rent receipts placed on record from October 2001 to May 2015 during the tenancy period for the rent paid to the landlord. 12. The learned AR of the assessee further submits that from the chain of document furnished by assessee it was proved beyond doubt that the tenancy right was acquired by BD Toshniwal HUF in the year 1970 and continue to be in possession till 1984. The tenancy right were transferred to the assessee on partition of BD Toshniwal HUF in 1984. Karta of the assessee was residing in the tenanted property along with family. The tenancy in the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntary evidence about the acquisition of asset. Therefore, the matter may be restored to the file of the AO for adjudication of grounds of appeal afresh. 17. In the rejoinder submission, the Ld.AR of the assessee submits that all necessary evidences were furnished in accordance with the direction of AO. The relevant documents and evidences were uploaded on the portal of AO. Despite informing him that all necessary evidences have been furnished, the AO has not taken cognizance of the facts and the documentary evidences. All documentary evidences again furnished to the Ld. CIT(A). The Ld. CIT(A) also has not taken any cognizance of the same; rather, concurred with the finding of AO and the ld AR for the assessee would submit that the assessee has proved his case beyond doubt and restoration of case to the file of assessing officer or ld CIT(A), no purpose would serve except harassment of the assessee. 18. In further counter submissions the Ld. DR of the revenue strongly objected and would submit that he may be given opportunity to call for the record of AO and of Ld.CIT(A) to verify the fact with the evidence which is claimed by the assessee were actually placed before the lower aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce to substantiate the claim was furnished before them. The AO has not made any investigation from the creditor / builder, who have paid a sum of Rs. 22.50 crores which was claimed by assessee as a capital gain. The addition made by AO and confirmed by Ld. CIT(A) has no leg to stand. The ld CIT(A) has co-terminus power to examine the issue/claims. The ld CIT(A) affirmed the action of assessing officer, despite the fact that all evidences with regards to acquisition of tenancy its holding period and transfer was available before him. The Ld.AR for assessee, thus, strongly opposed for the restoration of matter to the AO for considering it afresh. The Ld.AR would submit that there was no fault on the part of the assessee, and then the assessee should not suffer unnecessarily and prayed that the bench may decide the appeal on the basis of material available on record. The assessee has not filed any new document before Tribunal, which may require to the considered by AO. It was explained the short question for consideration before the Tribunal is if the assessee held the asset for more than three years prior its transfer or not. The assessee has unequally proved the holding period of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k statement from the period from 01.04.2009 to 31.03.2016 and source of investment in purchase of tenancy right. The AO recorded that Builder/Pine Tree Estate Pvt. Ltd. furnished copy of return of income for AY 2016-17 only. And that the AO noted that for AY 2016-17, the Builder/Pine Tree Estate Pvt. Ltd. offered Nil income. On the basis of the aforesaid observation, the AO held that creditworthiness of buyer who purchased capital asset i.e. 'tenancy right' from assessee is not proved. The AO further noted that despite giving opportunity the assessee not furnished documentary evidence for acquisition of tenancy right in a flat sold to M/s. Pine Tree Estate Pvt. Ltd. in A.Y. 2016-17. The AO held that assessee failed to prove genuineness of sale of tenancy right and that transaction remained unexplained and amount of Rs. 22.50 crore was treated as unexplained cash credit. The ld. CIT(A) affirmed the action of AO by holding that during the appellate stage, the assessee could not substantiate and furnish new documentary evidence related to acquisition of tenancy right. 25. There is no dispute that tenancy right is a capital asset. The lower authority has not disputed that nature of ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocumentary evidences clearly establish that the assessee held asset (tenancy right) from 1984 in its individual capacity. 27. Further, the assessee vide tripartite registered agreement dated 29.05.2015 transferred the said tenancy right to M/s Pine Tree Estate Pvt. Ltd. on a consideration of Rs. 22.50 crore. Perusal of registered deed for transfer of tenancy agreement clearly shows that the landlord/owner of Champagne House (earlier known as Shakuntala) also received a consideration of Rs. 45,00,000/- vide Demand Draft dated 407315 & 407316 dated 28.05.2015 of Rs. 22.50 lakhs each, drawn on HDFC Bank being confirming party. And it is clearly evident from perusal of registered deed for transfer of tenancy agreement that B.D. Toshniwal (HUF) was the tenant in the said premises. After the death of B.D. Toshniwal, his son Vinay Toshniwal was occupying the said premises along with his family. It is further mentioned that Vinay Toshniwal expired in August 2004. After the death of Vinay Toshniwal, the tenanted premise was under the possession of his family member in the name of Vinay Toshniwal (HUF). The assessee has also placed on record the rent receipt for payment of rent from April 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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