9911796707
TMI Blog2024 (11) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... ns which are made by the Tribunal that the Tribunal did not adjudicate on those specific grounds, which were raised, however, it delved to adjudicate on an issue which was not raised by the Revenue namely that necessarily the transfer ought to be recognized to have taken place on 04 November 2004 when tripartite agreement was entered between the parties. Keeping aside the core issue as raised in ground 1 as raised by the Revenue, which was either the rights having crystallized as per the consent terms dated 28 May 1999 or on 22 February 2007, when the Deed of Confirmation was registered and relevant to the A.Y. 2007-08 the Tribunal decided to adjudicate on an issue which was not specially put to the parties. It is thus the case that the Tribunal decided to keep aside the specific ground as raised by the Revenue and without adjudicating on such ground, has proceeded to decide an issue which in fact had not fell for consideration and/or not raised by the Revenue specifically. Thus there was an apparent error of law in the approach of the Tribunal in deviating itself from the course of adjudication of the appeal when the specific grounds which were raised by the Revenue were not adjud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ights as 04.11.2004 without giving opportunity to the Appellant to give her say on the said issue of date ? 2. At the outset learned counsel for the appellant/assessee (for short, the assessee ) fairly states that considering the purport of question (b) although the assessee had raised question (a), this question would not arise for consideration, as the controversy, which was considered by the Tribunal and which in the peculiar facts and circumstances of the case has not been considered, is subject matter of question (b). It is, therefore, his contention that the assessee would press only question (b). 3. We have accordingly heard learned counsel for the parties on question (b). Briefly the facts are:- There was a suit filed before this Court by one Lalben M. Patel against the assessee and others being Civil Suit No. 1593 of 1999. The dispute in the suit was in regard to the subject premises of which the assessee claimed to be a tenant. A Consent Decree dated 28 May 1999 came to be passed in such civil suit wherein the plaintiff-Lalben recognized the right of the assessee in respect of the premises inter alia to convert tenancy of the assessee of area admeasuring 14000 sq. ft. car ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er undertake to this Hon ble Court that they shall apply to this Hon ble Court for necessary orders by consent of the Parties in Suit No 120 of 1978 (Usha Harshadkumar Dalal Versus Lilaben Manibhai Patel Ors.) to create tenancy rights in respect of 14000 sq. ft. carpet area on the 3rd and 4th floor of the said building Shreeniketan situate at Annie Besant Road, Worli, Mumbai 400 018 and six covered parking space and one open car parking space in the compound of the said building and the order directing the Court Receiver to accept rent from the said Hajra Iqbal Memon, the 1st Defendant herein as tenant in respect of the said premises and to issue regular rent receipts to her for the monthly rent of Rs. 10,000/- and further undertake to this Hon ble Court to give an undertaking in Suit No. 120 of 1998 to convert tenancy of the Defendant No. 1 to the said premises into ownership consequent upon a Co-operative Society or a condominium being formed on the same terms and conditions as applicable in case of other existing tenants of Shreeniketan building, subject however to sanction by this Hon ble Court. 5. The Plaintiff and Defendant No.2 to 17 do hereby undertake to this Hon ble Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spaces and one open car parking space delineated on the plan annexed to the said agreement, on ownership basis in lieu of the assessee/tenants vacating the said tenanted premises as held by them as tenants of the co-owners and the owners shall place the tenants in vacant possession of the said alternate premises, as owners thereof on the execution of the said agreement. We need not delve on the other contents of the said agreement suffice it to observe that the assessee has not disputed the existence of such agreement and the rights under such agreement were created in favour of the assessee. 5. On 22 February 2007, a Deed of Confirmation under which the rights of the parties which stood crystallized and recognized under the agreement dated 04 November 2004 came to be executed and registered. Such document came to be executed between the parties for the reason that agreement dated 04 November 2004 although was executed between the parties, the same was not registered. Thus, by virtue of the registration of the Deed of Confirmation, the transaction between the parties by which the ownership rights qua the premises value as notified by the State Government under the ready reckoner ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment year 2007-8. 9. The CIT (A) passed an order dated 18 February 2010 whereby the assessee s appeal was allowed. In the said order, the CIT (A) held that no transfer has taken place in the Assessment Year 2007-08 as the assessee had acquired ownership rights in A.Y. 2000-01. Hence the order passed by the AO making addition qua capital gains for the A.Y. 2007-08 was held to be not a correct approach on the part of the A.O. The CIT (A) accordingly, deleted the additions as made by the AO. 10. The Revenue being aggrieved by the order passed by the CIT (A), filed an appeal before the Tribunal, Mumbai. The primary grounds as raised by the Revenue in the memo of the appeal are to the following effect:- 1. The Ld. CIT (A) erred in deleting the addition of Rs. 68,45,651/- as Long Term Capital Gain, and accepting the Tenancy Right got converted into ownership right as per consent decree dated 28.05.1999 and not in A. Y. 2007-08 when the agreement for giving ownership right was registered through a transfer deed. 2. The Ld. CIT(A) erred in not accepting the fact that the assessee tenant surrendered / exchanged / transferred the Tenancy Right acquired for Rs. 9 Lakhs with ownershi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mr. D.B. Khade. As per facts on record Shri M.K. Mohammed and other occupants / tenants were in the said property. The Court Receiver filed the Suit against Shri M.K. Mohammed in the Hon'ble High Court of Bombay seeking the relief by way of directions to get the vacant possession of the said property from Shri M.K. Mohammed. There was compromise or settlement between Shri M.K. Mohammed and Court Receiver and in pursuance of the Consent Terms filed in the Hon'ble High Court in the Suit filed by the Court Receiver, the Hon'ble High Court passed a Consent Decree. Meantime, the assessee entered into an agreement with Shri M.K. Mohammed for acquiring the rights in the property which was in his possession for the consideration of Rs. 9,00,000/- and the said agreement was executed in 06.08.1986. It appears that the assessee took over the possession of the disputed property from Shri M.K. Mohammed and hence, the co-owners of the said property challenged the Consent Decree of the Court passed in 1988 and also made the assessee as a party to the Suit Proceedings. Again there was settlement between the co-owners and the assessee and it was agreed that the assessee would remove he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ners. 9. We are unable to accept the plea of the Ld. Counsel that at the most, the transfer could be in the year 1999 when the Consent Decree was passed for the reason that though the Consent Decree was passed it was subject to certain conditions and on compliance of the concessions only the assessee was to be conferred with the ownership of the alternate premises agreed to be given in the Shriniketan building by co-owners/landlords of the property. We, therefore, hold that the transfer took place on 04.11.2004 and not on 22.02.2007 even if the Deed of confirmation was registered on that date. We, accordingly, confirm the order of the Ld. CIT (A) on above reasons that capital gain cannot be brought to tax in this year and accordingly we decide question nos.1 2 against the revenue. 10. So far as ground no. 3 is concerned, it is on the applicability of section 50C of the Act. As we have held that there is no transfer in the assessment year 2007-08 as per our detailed reasoning, ground no. 3 becomes infructuous. We accordingly dismiss the same. 12. Thus, assessee being aggrieved by the observations, which are highlighted in paragraphs 2, 7, 8 and 9 (supra) by which the Tribunal has he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reinabove that such issue was not raised by the Revenue before the Tribunal. Mr. Subir Kumar submits that the scope of the appeal also needs to include what has held for adjudication before the CIT (Appeals). He has accordingly prayed for dismissal of the appeal. 16. Having heard learned counsel for the parties and having perused the record and the impugned order, we find substance in the contention as urged on behalf of the assessee. It is clear from the appeal memo as filed by the assessee before the Tribunal that the ground, which was inter alia raised before the Tribunal, was whether the tenancy rights were converted into ownership rights, as per the consent decree dated 28 May 1999 and not in A.Y. 2007-08 when the agreement giving ownership right was registered through a transfer deed, which was in fact registered on 22 February 2007. It clearly appears from the observations which are made by the Tribunal that the Tribunal did not adjudicate on those specific grounds, which were raised, however, it delved to adjudicate on an issue which was not raised by the Revenue namely that necessarily the transfer ought to be recognized to have taken place on 04 November 2004 when tripart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on in suo motu going into the question and varying the finding of the Appellate Assistant Commissioner on that issue. In our opinion this contention is well founded. As already stated, when the Tribunal desired to deal with the question of factum of payment of Rs. 3 lakhs, an objection was raised by Mr. Palkhivala, who had appeared before the Tribunal on behalf of the assessee, that the Tribunal had no jurisdiction to examine and determine the question of factum of payment inasmuch as that factum of payment was not disputed by the Income Tax authorities. Now, the statement of the case states that an objection was so raised by Mr. Palkhivala. It however does not say that the Income Tax Officer had raised the question before it challenging the finding of fact arrived at by the Appellate Assistant Commissioner, safely be assumed that the said objection was not raised by the Income Tax Officer. Now, if that be the true position that the finding of the Appellate Assistant Commissioner on this issue was not challenged before the Tribunal, then, in our view, the Tribunal had no jurisdiction to suo motu go into the question. 18. In Marubeni India P. Ltd. (supra) Delhi High Court was confro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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