IN INCOME TAX APPELLATE TRIBUNAL : B BENCH : AHMEDABA D (Before Hon'ble Shri G.D. Agrawal, V.P.(AZ) & Hon ble Shri T.K. Sharma, J.M. ) I.T.A. No. 383/AHD./2002 Assessment Year : 1995-1996 Income Tax Officer, Ward-5(2), Baroda -vs.- Rajeshbhai N. Patel (HUF), Baroda (Appellant) (Respondent) & I.T.A. No. 2757/AHD/2002 Assessment Year : 1995-1996 Assistant Commissioner of Income Tax, -vs.- Shri Rajesh Natubhai Patel, Baroda Circle-5, Baroda (PAN : ADAPP 0657 P) (Appellant) (Respondent) & I.T.A. No. 792/AHD./2002 Assessment Year : 1995-1996 Income Tax Officer, Ward-5(2), Baroda -vs.- Arvind P. Amin (HUF), Baroda (PAN : AABHA 3558 A) (Appellant) (Respondent) & I.T.A. No. 793/AHD./2002 Assessment Year : 1995-1996 Income Tax Officer, Ward-5(2), Baroda -vs.- Shri Natubhai S. Patel, Baroda (Appellant) (Respondent) & I.T.A. No. 2754/AHD/2002 Assessment Year : 1995-1996 Income Tax Officer, Ward-5(2), Baroda vs.- Shri Natubhai S. Patel (HUF), Baroda (PAN : AADHP 3484 J) (Appellant) (Respondent) & I.T.A. No. 794/AHD./2002 Assessment Year : 1995-1996 Income Tax Officer, Ward-5(2), Baroda -vs.- Mukundbhai M. Patel (HUF), Baroda (PAN : AABHP 5361 C) (Appellant) (Respondent) & 2 ITA Nos. 383, 2757,792,793, 2754, 794, 2752-2753, 2755-2756, 2758-2759/AHD/2002 I.T.A. Nos. 2752/AHD./2002 Assessment Year : 1995-1996 Income Tax Officer, Ward-5(2), Baroda -vs.- Smt. Savitaben M. Patel (deceased), Baroda (through L/H & LR Mukundbhai M. Patel) (Appellant) (Respondent) & I.T.A. No. 2753/AHD/2002 Assessment Year : 1995-1995 Income Tax Officer, Ward-5(2), Baroda -vs.- Smt. Savitaben M. Patel, Baroda (PAN : ABLPP 8890 K) (Appellant) (Respondent) & I.T.A. No. 2755/AHD./2002 Assessment Year : 1995-1996 Income Tax Officer, Ward-5(2), Baroda -vs.- Shri Manubhai M. Patel (HUF), Baroda (PAN : AADHP 3485 K) (Appellant) (Respondent) & I.T.A. No. 2756/AHD./2002 Assessment Year : 1995-1996 Income Tax Officer, Ward-5(2), Baroda -vs.- Smt. Chanchalben S. Patel, Baroda (PAN : ABLPP 8890 K) (Appellant) (Respondent) & I.T.A. No. 2758/AHD./2002 Assessment Year : 1995-1996 Assistant Commissioner of Income Tax, -vs.- Smt. Neetaben M. Patel, Baroda Circle-5, Baroda (PAN : ACXPP 5254 E) (Appellant) (Respondent) & I.T.A. No. 2759/AHD./2002 Assessment Year : 1995-1996 Assistant Commissioner of Income Tax, -vs.- Shri Babubhai S. Patel, Baroda Circle-5, Baroda (PAN : ACZPP 3942 P) (Appellant) (Respondent) 3 ITA Nos. 383, 2757,792,793, 2754, 794, 2752-2753, 2755-2756, 2758-2759/AHD/2002 Appellant by : Shri K. Madhusudan, Sr. D.R. Respondent by : Shri S.N. Soparkar ORDER Per Bench : These appeals filed by revenue are against twelve different orders of Learned Commissioner of Income Tax (Appeals)-V, Baroda for all assessment years 1995-96 in respect of following assessees :- Name of assessee Date of order of CIT(A.) Rajeshbhai N. Patel (HUF), Baroda 18.12.2001 Shri Rajesh Natubhai Patel, Baroda 11.06.2002 Arvind P. Amin (HUF), Baroda 29.01.2002 Shri Natubhai S. Patel, Baroda 07.01.2002 Shri Natubhai S. Patel (HUF), Baroda 11.06.2002 Mukundbhai M. Patel (HUF), Baroda 07.01.2002 Smt. Savitaben M. Patel, Baroda (through L/H & 11.06.2002 LR Mukundbhai M. Patel) Smt. Savitaben M. Patel 11.06.2002 Shri Manubhai M. Patel (HUF), Baroda 11.06.2002 Smt. Chanchalben S. Patel, Baroda 11.06.2002 Smt. Neetaben M. Patel, Baroda 11.06.2002 Shri Babubhai S. Patel, Baroda 11.06.2002 2. only ground raised by Revenue in its appeal in case of Mukundbhai M. Patel (HUF) is as under :- On facts and circumstances of case and in law, ld. CIT(A.) erred in deleting addition of Rs.30,90,719/- on protective basis made on account of short-term capital gains in respect of land given on lease to ICICI by assessee and 11 other persons. When lease deed, deposit agreement and power of attorney are analyzed harmoniously it is evident that assessee has transferred various rights to lease to empow3reing them to do anything whatsoever for development and construction on premises as lessor4s could do themselves. above rights transferred by assessee directly flaw from ownership of land and hence 4 ITA Nos. 383, 2757,792,793, 2754, 794, 2752-2753, 2755-2756, 2758-2759/AHD/2002 transaction under consideration is transfer of capital asset, thus chargeable to capital gain:. 2.1. ground of appeal in respect of other assessees is identical with that in case of Mukundbhai M. Patel (HUF) except difference in figures. 3. Brief facts relating to controversy involved in these 12 appeals are that search operation under section 132 was carried out in case of Mukundbhai M. Patel Group on 29.11.1994. Certain transactions were noticed relating to Gopalbhai Property admeasuring 12000 sq.mtrs. pertaining to 16 persons including Shri Mukundbhai M. Patel (HUF). All other 15 persons were close relatives of Shri Mukundbhai M. Patel, or were HUFs of their relatives. Out of these persons, 12 persons had given property on lease to ICICI during assessment year 1995- 96. details of consideration are as under :- Sl. No. Plot No. Name of Plot area Interest- Lease rent Lease deed holder (in sq.mt.) free deposit p.m. dated 1. 1B Mukund M. 750 40 lacs 3700 21.04.1994 Patel HUF 2. 2A Savitaben N. 750 40 lacs 3700 21.04.1994 Patel 3. 2B Neetaben M. 750 40 lacs 3700 21.04.1994 Patel 4. 3B Natubhai S. 750 40 lacs 3700 21.04.1994 Patel HUF 5. 5A Rajesh N. 750 40 lacs 3700 17.10.1994 Patel HUF 6. 5B Rajesh N. 750 40 lacs 3700 17.10.1994 Patel 7. 6A Arvind P. 750 40 lacs 3700 17.10.1994 Amin HUF 8. 6B Babubhai S. 750 40 lacs 3700 17.10.1994 Patel 9. 7A Natubhai S. 750 40 lacs 3700 21.04.1994 Patel 10. 7B Chanchalben 750 40 lacs 3700 21.04.1994 S. Patel 11. 8A Savitaben 750 40 lacs 3700 21.04.1994 M. Patel 12. 8B Manubhai 691 37 lacs 3500 21.04.1994 N. Patel HUF 5 ITA Nos. 383, 2757,792,793, 2754, 794, 2752-2753, 2755-2756, 2758-2759/AHD/2002 On basis of findings as mentioned in assessment order in case of Mukundbhai M. Patel and further following decision of Hon'ble Supreme Court in case of A.R. Krishnamurthy vs.- CIT 176 ITR 417 (SC), Assessing Officer held that 12 plots given on lease to ICICI amounts to transfer and attracts short-term capital gain. In case of Shri Mukundbhai M. Patel (individual), capital gain was brought to tax treating him as owner of all above plots. In appeal, it was held by Learned Commissioner of Income Tax(Appeals) vide order in Appeal No. CAB/III-145/1998-99 dated 30.03.1999 that plot holders were not benamidar of Shri Mukundbhai M. Patel and capital gain taxed in hands of Shri Mukundbhai M. Patel (individual) was directed to be deleted. Against this order of Learned Commissioner of Income Tax(Appeals), Department filed appeal. However, based on Learned Commissioner of Income Tax(Appeals) s order, in order to protect interest of revenue, question of taxability of lease transaction was considered by Assessing Officer in hands of 12 leaseholders, on protective basis. Assessing Officer issued notice under section 148 to all twelve assessees and finalized assessment under section 147 of Act and computed capital gain as under :- Name of assessee Computation of capital gain Rajeshbhai N. Patel (HUF), Baroda Rs.31,21,835/- Shri Rajesh Natubhai Patel, Baroda Rs.31,24,345/- Arvind P. Amin (HUF), Baroda Rs.31,24,345/- Shri Natubhai S. Patel, Baroda Rs.31,21,239/- Shri Natubhai S. Patel (HUF), Baroda Rs.31,24,345/- Mukundbhai M. Patel (HUF), Baroda Rs.30,90,719/- Smt. Savitaben M. Patel, Baroda (through L/H & Rs.31,24,345/- LR Mukundbhai M. Patel) Smt. Savitaben M. Patel Rs.31,24,345/- Shri Manubhai M. Patel (HUF), Baroda Rs.28,14,345/- Smt. Chanchalben S. Patel, Baroda Rs.31,24,345/- Smt. Neetaben M. Patel, Baroda Rs.31,24,345/- Shri Babubhai S. Patel, Baroda Rs.31,24,345/- Against aforesaid order, assessee preferred appeal. Learned Commissioner of Income Tax(Appeals) in case of Mukundbhai M. Patel vide order dated 07.01.2002 discussed 6 ITA Nos. 383, 2757,792,793, 2754, 794, 2752-2753, 2755-2756, 2758-2759/AHD/2002 issue involved at length and held that Assessing Officer is not justified in holding that transaction entered between assessee and ICICI is transaction attracting capital gain tax. He accordingly directed Assessing Officer to delete addition made of Rs.31,24,345/- to income in case of Mukundbhai M. Patel. In all other eleven cases, Learned Commissioner of Income Tax(Appeals) following decision dated 07.01.2002 of Mukundbhai M. Patel HUF directed Assessing Officer to delete addition made by Assessing Officer on account of capital gain. Aggrieved with order of Learned Commissioner of Income Tax(Appeals) in respect of all 12 assessees, Revenue is in appeals before Tribunal. 4. At time of hearing before us, on behalf of Revenue Shri K. Madhusudan, ld. Sr. D.R. appeared and took us through reasoning given by Assessing Officer in case of Mukundbhai M. Patel (HUF) and contended that in this case, Assessing Officer has examined lease deed dated 21.04.1994 for 8 plots and lease deed dated 17.11.1994 for 4 plots as well as deposit agreements and Power of Attorney,. statement of Shri R. Venkatraghavan, Deputy Manager, ICICI Ltd. dated 18.01.1995, took view that all 12 assessees have transferred plots to ICICI Ltd. and therefore, liable for capital gain. ld. D.R. further pointed out that there is no dispute with regard to fact that there was deal that assessee and others will sell land in question to ICICI for particular consideration. Later for whatever reasons, deal was converted into lease transaction. He pointed out that there was not much time gap between said sale offer and lease deals. lease deal was for same consideration as agreed for in sale offer except that 90% was payable on day of lease and balance as alleged rent. He further drew our attention to relevant terms of lease deed extracted by Assessing Officer on page nos. 4, 7, 8 and conclusions drawn by Assessing Officer on apges 9, 10 and 11 of assessment order. It was also pointed out that it is worth mentioning that as per terms of lease deed and alleged deposit agreement ICICI was absolute owner of structure and cancel/ lease/ sub-let same without limit on period. lessee (ICICI) has absolute option to renew lease at same terms and conditions and lessors shall grant renewal. ld. D.R. contended that in other words lessor (assessee) has no option. It was further submitted that such renewal shall contain covenant for further renewal. POA given by assessee to ICICI has clause that ICICI can appoint irrevocable Power of Attorney. He pointed out that assessees have given possession of lands and also deposited 7 ITA Nos. 383, 2757,792,793, 2754, 794, 2752-2753, 2755-2756, 2758-2759/AHD/2002 title documents to ICICI. Therefore, order of Learned Commissioner of Income Tax(Appeals) be reversed and that of Assessing Officer levying short-term capital gain be restored. 5. Shri S.N. Soparkar, ld. counsel appearing on behalf of assessee at outset pointed out that assessee in case of Mukundbhai M. Patel (HUF) has filed application for admission of additional evidence. said application reads as under :- Appellant craves leave to place following additional evidence on record of this Hon'ble Tribunal. 1. Surrender Deed of plot of land by ICICI Ltd. 2. Index certifying registration of Surrender Deed. appellant respectfully submits that at time of assessment proceedings, abovementioned documents were not available for production. additional evidences are hereby placed on record of this Hon'ble Tribunal in order to help it appreciate controversy in better and proper manner and further evidences proposed to be placed before this Hon'ble ITAT are important and decisive evidences in determining controversy in just and equitable manner. appellant, therefore, prays to this Hon'ble ITAT to allow it to place these evidences on its record and prays Hon'ble ITAT to consider this evidence while deciding appeal . 5.1. ld. counsel of assessee submitted that both aforesaid documents were not available when Learned Commissioner of Income Tax(Appeals) passed impugned order, therefore, both these documents be admitted. ld. counsel of assessee also produced decision dated 31.10.2005 of ITAT, C Bench in ITA No. 3489/AHD/1997 for assessment year 1994-95 in case of Shri Mukundbhai M. Patel, wherein Tribunal has upheld order of Learned Commissioner of Income Tax(Appeals), wherein he held that Shri Mukundbhai M. Patel is not benamidar of other assessees. 5.2. ld. counsel of assessee also submitted that there is no transfer, much less transfer for consideration therefore, there can be no capital gain. In support of this, reliance is placed on judgment of Hon'ble Rajasthan High Court reported in 321 ITR 165 (Raj.), Addl. CIT 8 ITA Nos. 383, 2757,792,793, 2754, 794, 2752-2753, 2755-2756, 2758-2759/AHD/2002 vs.- Lake Palace Hotels & Motels Ltd., which confirmed 83 TTJ 1031 (Jodh.), where even in relation to lease for 72 years it was found that in absence of any premium, no capital gain tax would be payable. 5.3. ld. counsel of assessee further submitted that Learned Commissioner of Income Tax (Appeals) is legally and factually correct in deleting capital gain tax levied by Assessing Officer because for levy of capital gains tax, it is necessary that there is consideration . In support of this, reliance is placed on following decisions :- (i) CIT, Bangalore vs.- B.C. Srinivasa Setty reported in 128 ITR 294 (SC); (ii)Sunil Siddharthbhai vs.- CIT, Ahmedabad reported in 156 ITR 509 (SC). It was also submitted that refundable security deposit is not consideration as held by Hon'ble Supreme Court in case of Siddheshwar Sahakari Sakhar Karkhana Ltd. vs.- CIT & Others reported in 270 ITR 1 (SC) and by Hon'ble Madras High Court in case of CIT vs.- Madurai Soft Drinks Pvt. Ltd. reported in 276 ITR 607 (Mad.). It was also submitted that Hon'ble Kerala High Court in case of CIT vs.- Travancore Rubber & Tea Co. Ltd. reported in 190 ITR 508 (Ker.) held that earnest money deposit is not to be treated as advance. 5.4. With regard to tax planning theory of department, ld. counsel of assessee pointed out that it is factually incorrect, but even if it is presumed that it were true, that by itself, will not make transaction taxable. In support of this, reliance was placed on judgment of Hon'ble Gujarat High Court in case of Banyan and Berry vs.- CIT reported in 222 ITR 831 (Guj.), which is confirmed by Hon'ble Supreme Court in case of Union of India & Another vs.- Azadi Bachao Andolan & Another reported in 263 ITR 706 (SC). ld. counsel of assessee submitted that Learned Commissioner of Income Tax (Appeals) in case of Mukundbhai M. Patel (HUF) has given detailed reasoning, which has been followed in other relevant cases, therefore, view taken by Learned Commissioner of Income Tax(Appeals) deleting short-term capital gain levied by Assessing Officer be upheld. 6. After hearing both sides, we have carefully gone through orders of authorities below. In case of Mukundbhai M. Patel (HUF), Learned Commissioner of Income Tax(Appeals) in para 4.18 on page 9 in his order, after considering amended definition of 9 ITA Nos. 383, 2757,792,793, 2754, 794, 2752-2753, 2755-2756, 2758-2759/AHD/2002 transfer and considering provisions of section 2(47) of Income Tax Act, 1961, took view that lease deed in respect of all cases is for period of 9 years only. Power of Attorney did not authorize ICICI, most important power, right to sell plot or deal with land as owner. Learned Commissioner of Income Tax (Appeals) also observed that Assessing Officer has taxed rental income of Rs.40,700/- in hands of assessee. Therefore, on one hand, Assessing Officer is taxing income treating assessee as owner and on other hand, he is treating deposit as having been received in lieu of sale consideration more particularly when same was only 90% of market value. He also recorded deposit as refundable and not in form of premium. lease was for period of 9 years which cannot be said to be longer period lease. On this basis, he deleted addition made of Rs.30,90,719/- on account of short-term capital gain. relevant observations of Learned Commissioner of Income Tax (Appeals) are contained in para 4.17 to 4.19 on pages 16 to 21 of impugned order in case of Mukundbhai M. Patel (HUF), which are as under :- 4.17. I have considered submission made by learned counsel as well as arguments advanced by him. assessment is based on interpretation of word transfer' in I.T. Act, 1961, Under I.T. Act, there are three different provisions, namely sections 2(14), 2(47) and 269UA which affect "transfer of capital asset" and make transfer' such that capital gains may be levied if there is profit arising upon transfer. Section 2(14) defines "Capital Asset" to be "Property of any kind held by assessee, whether or not connected with his business or profession". Section 2(47) defines "Transfer" in relation to capital assets and states that "Transfer in relation to capital asset includes - (i) sale, exchange or relinquishment of asset, or (ii) extinguishment of any rights therein, or (iii) compulsory acquisition there of under any law, or (iv) In case where asset is converted by owner thereof into or treated by him as stock-in-trade of business carried on by nun, such conversion or treatment, (v) Any transaction involving allowing of possession of any immovable property to be taken or retained in part performance of contract of nature referred to in section 53A of Transfer of Property Act, 1882 (4 of 1882); or (vi) Any transaction (whether by way of becoming member of, or acquiring shares in, co-operative society, company or other association of persons or by way of any agreement or any arrangement or in any other 10 ITA Nos. 383, 2757,792,793, 2754, 794, 2752-2753, 2755-2756, 2758-2759/AHD/2002 manner whatsoever) which has effect of transferring, or enabling enjoyment of, any immovable property: Considering various devices which tax evaders are applying, Legislature amended definition of transfer by inserting clauses (v) and (vi) to clause (47) of section 2. (with effect from 1-4-1988). In Memorandum Explaining Provisions in Finance Bill 1987, clause 27 reads as follows: "SIMPLIFICATION AND RATIONALISATION OF PROVISIONS Enlarging meaning of 'owner of house property: - Under existing provisions of section 22 of Income-tax Act, any income from house property is chargeable to tax only in hands of legal owner. As per section 27 of Income Tax Act, certain persons who are not otherwise legal owners are deemed to be owners for purpose of these provisions. Under Transfer of Property Act, transfer of ownership can be effected only by means of registered instrument. However, in recent times various other devises are sought to he employed for transferring one's ownership in property. As result, there are situations in which actual owner, say, of apartment in muli-storeyed building, or holder of power of attorney is not legal owner of property. In some cases, pending resolution of disputes, legal as well as beneficial owner are assessed to tax in respect of same income. As measure of rationalisation, Bill seeks to enlarge further meaning of expression 'owner of house property given in clause (iii) of section 27 by providing that person who comes to have control over property by virtue of such transactions as arc referred to in clause (f) of section 269UA will also he deemed to be owner of property. amendment also seeks to enlarge applicability of this clause to member of company or other association of persons. Corresponding amendments have also been proposed in regard to definition of 'transfer' in section 2(47) of Income Tax Act, section 2(m) of Wealth -tax Act defining 'net wealth' and section 2(xii) of Gift-tax Act defining 'gift . "These amendments will take effect from April 1, 1988, and accordingly, apply in relation to assessment year 1988-89 and subsequent years." relevant clauses referred to in Memorandum Explaining Finance Bill read as under : Clause 3(g) reads as under : "....Sub clause (g) of this clause seeks to insert two new sub-clauses in clause (47) of this section which deals with definition of expression "transfer". Sub-clause (v) refers to any transaction involving allowing of possession of any immovable properly to be taken or retained in part performance of contract of nature referred to in section 53A of Transfer of Property Act, 1882, to be transfer, while sub-clause (vi) includes any transaction which hat effect of transferring or enabling enjoyment of any immovable property also as transfer. 11 ITA Nos. 383, 2757,792,793, 2754, 794, 2752-2753, 2755-2756, 2758-2759/AHD/2002 expression "immovable property", occurring in these two new sub-clauses, will have same meaning as in clause (d) of section 269UA of Act. These amendments [other than amendment by sub-clause (d)] take effect from 1st April, 1988, and will, accordingly, apply in relation to assessment year 1988-89 and subsequent years....... " Clause (6) reads as under : "...........Clause 6 seeks to amend section 27 of Income-tax Act which defines "owner of house property ". amendment seeks to enlarge meaning of "owner of building" given in clause (iii) by providing that person who comes to have control over property by virtue of transactions as are referred to in clause (f) of sub-section (2) of section 269UA, mil also be deemed to be owner of property. amendment also seeks to enlarge applicability of this clause to company or other association of persons. This amendment will take effect from 1st April, 1988, and will accordingly, apply in relation to assessment year 1988-89 and subsequent years....." After above amendment, observations of Supreme Court in CIT v. Podar Cement Pvt Ltd.[ 226 ITR 625 at page 653] are relevant: "..,... From Memorandum explaining Finance Bill, 1987 [1987] 165 ITR (St.) 161, it is crystal clear that amendment was intended to supply obvious omission or to clear up doubts as to meaning of word "owner" in section 22 of me Act. ..........the settled position that under common law, "owner" means person who has got valid title legally conveyed to him after complying with requirements of law such as 'Transfer of Property Act, Registration Act, etc. But, m context of section 22 of income-fax Act, having regard to ground realities and further having regard to object of Income-tax Act, namely, "to tax income ", we are of view, "owner" is person who is entitled to receive income from property m his own right....." 4.18 After considering amended definition of transfer it is now necessary to consider provisions of section 45 of Act. Section 45 provides that any profit or gain arising from transfer of capital asset effected in previous year shall be chargeable to tax under head Capital Gain . Therefore, in relation to every transaction of transfer of capital asset , question will have to be decided as to in which previous year transaction was effected. In other words, expression effected in context in which it is used would mean previous year in which transfer of asset became complete or operative in sense of title of transferor being extinguished and title of transferee being created . 12 ITA Nos. 383, 2757,792,793, 2754, 794, 2752-2753, 2755-2756, 2758-2759/AHD/2002 Considering above, I am of opinion that lease deed in case of appellant is for period of 9 years only. Power of Attorney did not authorize ICICI, most important power, right to sell plot or deal with land as owner. In deposit agreement as alternative to recourse to penal interest and legal proceedings for recovery of security deposit, agreement provided as under :- lessee may exercise option to have said lease renewed for further period of 90 years, subject, however, to said security deposit being continued to be so deposited free of interest with lessors as stipulated herein provided that pending execution of said renewed lease, lessors shall allow lessee to continue to hold demised premises at same rent and on terms and conditions contained in said lease and that lessors hereby agree and undertake and covenant with lessee that lessors shall not exercise their power to reenter demised premises as provided under clause 4 of said lease, but allow lessee to continue to hold demised premises at rent and on terms and conditions contained in said lease until aid renewed lease is executed . From above clause to deposit agreement it cannot be concluded that appellant had exercise its option or had intention to give property under consideration on lease for period of 90 years or for longer period. renewal clause was only for safety of deposit as alternative. Considering same, I am of view that on expiry of 9 years, if alternative option would have been exercised by appellant, (i.e. property would have been given on lease of 90 years), A.O. could have been taxed same. In present case, there was only alternate option which was never exercised or deemed to have been exercised. lease agreement was also decided to be cancelled by ICICI as per letter dated 1.3.2001 and out of 12 parties who were parties for said lease, ICICI has surrendered plots to 8 parties by separate deed of surrender executed on 3.3.2001 and they had sold plots to another party- Inox Leisure Ltd. on 27.7.2001 after obtaining certificate u/s. 269UL(3) from Hon'ble Appropriate Authority, Ahmedabad dated 18.5.2001. Thus, in my view, A.O. erred in holding that transaction entered between appellant and ICICI was transaction attracting capital gain tax. 4.19. It is also observed that A.O. had taxed rent income of Rs.40,700/- in hands of appellant. If appellant is said to have transferred property A.O. would not have taxed same as rental income. On one hand, A.O. is taxing income treating appellant as owner, it would be improper to tax, on other hand deposit as having been received in lieu of sale consideration more 13 ITA Nos. 383, 2757,792,793, 2754, 794, 2752-2753, 2755-2756, 2758-2759/AHD/2002 particularly when same was only 90% of market value. deposit was refundable and not in form of premium. lease was for period of 9 years which cannot be said to be longer period lease. power of attorney given was only to do general act and not authorize ICICI, right to sell or deal with property. In view of above, A.O. was not justified in making addition treating lease as transfer. addition made of Rs.30,90,719/- is therefore deleted . 7. In remaining 11 cases, Learned Commissioner of Income Tax(Appeals) has merely followed his order in case of Mukundbhai M. Patel (HUF). It is pertinent to note that after termination of lease in case of eight persons (out of 12 persons who were parties for lease deed), demised land was sold to another party, for which said parties had obtained necessary permissions and approvals from Income Tax Department, and provided them to Assessing Officer during assessment proceedings. certificate under section 269UL(3) was also obtained from appropriate authority, Ahmedabad dated 18.05.2001. On this basis, before Learned Commissioner of Income Tax (Appeals) it was argued that Assessing Officer was incorrect in mentioning that :- Thus security deposit was consideration for transfer of capital asset. Now that security deposit has been refunded on happening of certain unforeseen circumstances, has no bearing on taxability in hands of assessee for A.Y. 1995-96, as has been brought out in para 6.1 above . 8. After considering each and every contention of Assessing Officer, in impugned order Learned Commissioner of Income Tax(Appeals) took view that there is no transfer within meaning of section 2(47) of Income Tax Act, 1961. In our opinion, Learned Commissioner of Income Tax(Appeals) has given cogent reason for deleting addition made by Assessing Officer on account of short-term capital gain. We, therefore, incline to uphold order of Learned Commissioner of Income Tax (Appeals) in respect of all assessees. 9. In result, all appeals filed by Revenue are dismissed Order was pronounced in Court on 28.12.2010 Sd/- Sd/- (G.D. Agrawal) (T.K. Sharma) Vice-President (AZ) Judicial Member DATED : 28/ 12/ 2010 14 ITA Nos. 383, 2757,792,793, 2754, 794, 2752-2753, 2755-2756, 2758-2759/AHD/2002 Copy of order is forwarded to : 1) Assessee (2) Department. 3) CIT(A.) concerned (4) CIT concerned, (5) D.R., ITAT, Ahmedabad. True Copy By Order Deputy Registrar, ITAT, Ahmedabad Laha/Sr.P.S. Ito Wd-5(2) v. Shri Natubhai S Patel