Sonali Kilaje 19-ITXA-1219-17.doc IN HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO. 1219 OF 2017 Amol C. Shah (HUF) Appellant v/s. Income Tax Ofcec Respondent Mc. Rajeev Waglay i/b. DSR Legal foc Appellant. Mc. Sham Walve a/w. Mc. Pcitesh Chattecjee foc Respondent. CORAM: UJJAL BHUYAN, & MILIND N. JADHAV, JJ. DATE : JANUARY 27, 2020. P. C.:- Having cegacd to issue involved in pcesent appeal we ace of view that appeal can be disposed of at admission stage itself. Thecefoce, as agceed to by leacned counsel foc pacties, notice is made cetucnable focthwith and mattec is taken up foc fnal disposal. 2. Heacd Mc.Rajeev Waglay, leacned counsel foc appellant- assessee and Mc.Sham Walve, leacned standing counsel, cevenue foc cespondent. 1 of 8 Uploaded on - 03/02/2020 Downloaded on - 04/02/2020 10:06:11 Sonali Kilaje 19-ITXA-1219-17.doc 3. This appeal undec Section 260A of Income Tax Act, 1961 ( Act foc shoct) has been pcefecced by assessee against ocdec dated 24.08.2016 passed by Income Tax Appellate Tcibunal, Mumbai Bench , Mumbai ( Tribunal foc shoct) in ITA No. 4511/Mum/2016 foc Assessment Yeac 2009- 10. 4. Though appellant has pcoposed as many as fve questions, aftec heacing leacned counsel foc pacties and aftec going thcough matecials on cecocd, we feel that following substantial question of law covecs contcovecsy in question : Whethec on facts and in ciccumstances of case and in law, Tcibunal was justifed in confcming addition of Rs.50 lakhs to taxable income of assessee undec head Income fcom othec soucces foc Assessment Yeac undec considecation? 5. Appellant-assessee is Hindu Undivided Family (HUF) of which Shci Amol C. Shah is Kacta. Retucn of income foc assessment yeac 2009-10 was fled on 28.07.2009 in which 2 of 8 Uploaded on - 03/02/2020 Downloaded on - 04/02/2020 10:06:11 Sonali Kilaje 19-ITXA-1219-17.doc amount of Rs.50 lakhs was disclosed as amount ceceived fcom M/s. Caclton Coats Pvt. Ltd. on succendec of cights of assessee to pcopecty in question, situated at Apti. Howevec, assessee claimed deduction of afocesaid amount undec Section 54EC of Act as said amount was invested in capital bonds. Thecefoce, income fcom long tecm capital gains was disclosed as nil. 6. Assessing Ofcec did not accept said claim of assessee. By assessment ocdec dated 03.03.2015 passed undec Section 143(3) cead with Section 254 of Act said amount was added back to income of assessee as income fcom othec soucces . 7. Assessee pcefecced appeal befoce Commissionec of Income Tax (Appeals)- 33, Mumbai. By appellate ocdec dated 06.05.2016 fcst appellate authocity confcmed fnding of Assessing Ofcec and dismissed appeal of assessee. 3 of 8 Uploaded on - 03/02/2020 Downloaded on - 04/02/2020 10:06:11 Sonali Kilaje 19-ITXA-1219-17.doc 8. Assessee caccied mattec to Tcibunal by pcefeccing fucthec appeal. Tcibunal by ocdec dated 24.08.2016 did not fnd any mecit in appeal of assessee and dismissed same. 9. Hence appeal befoce us. 10. Leacned counsel foc assessee submits that assessee was tenant of pcopecty in question. Memocandum of Undecstanding (MOU) was enteced into between assessee and M/s. Caclton Coats Pvt. Ltd., ownec of pcopecty, on 02.07.2007. Theceaftec, pcopecty was sold on 18.07.2008 to M/s. Valison & Co.. To settle claims of assessee, amount of Rs.50 lakhs was paid by M/s. Caclton Coats Pvt. Ltd. to assessee. Though said amount was disallowed by Assessing Ofcec in case of M/s. Caclton Coats Pvt. Ltd., Tcibunal vide appellate ocdec dated 18.03.2016 set aside ocdec of Assessing Ofcec and dicected that amount of Rs.50 lakhs paid by M/s.Caclton Coats Pvt. Ltd. to assessee be allowed as deduction undec Section 48(i) of Act. In 4 of 8 Uploaded on - 03/02/2020 Downloaded on - 04/02/2020 10:06:11 Sonali Kilaje 19-ITXA-1219-17.doc said ocdec Tcibunal held that pcopecty in question which was sold was undec occupation of tenant i.e. assessee. Thecefoce, in case of assessee Tcibunal could not have taken contcacy view that assessee was not tenant of pcopecty. 11. On othec hand, Mc. Walve, leacned standing counsel has cefecced to impugned ocdec of Tcibunal and submits that assessee failed to pcove its tenancy ovec pcopecty in question. No document was pcoduced by assessee befoce Tcibunal to show that he was tenant undec M/s. Caclton Coats Pvt. Ltd. in cespect of pcopecty in question. Thecefoce, thece is no eccoc oc infcmity in view taken by Tcibunal that since assessee had failed to pcove its tenancy undec M/s. Caclton Coats Pvt. Ltd., amount disclosed by assessee was added as income fcom othec soucces . 12. Submissions made by leacned counsel foc pacties have been consideced. We have also pecused matecials on cecocd. 5 of 8 Uploaded on - 03/02/2020 Downloaded on - 04/02/2020 10:06:11 Sonali Kilaje 19-ITXA-1219-17.doc 13. On quecy by Couct, Mc. Walve, leacned counsel submits that in case of M/s.Caclton Coats Pvt. Ltd., cevenue did not pcefec any appeal because tax efect was below pcesccibed limit. 14. In appeal of M/s. Caclton Coats Pvt. Ltd. befoce Tcibunal being Income Tax Appeal No. 5431/Mum/2015 foc same assessment yeac Tcibunal noted fcom matecials on cecocd that M/s. Caclton Coats Pvt. Ltd. had enteced into MOU with its ecstwhile tenant viz. Shci Amol C. Shah (HUF) on 02.07.2007. stamp papec on which MOU was wcitten was issued on 21.06.2007. Thece was nothing to show that MOU was fabcicated oc ante-dated. pcopecty in question was disclosed in all cetucns of income by M/s. Caclton Coats Pvt. Ltd. stacting fcom assessment yeac 1993-94 to assessment yeac 2009-10. This pcopecty was also cefected in income tax cetucns of tenant i.e. pcesent assessee in all assessment yeacs covecing said peciod. On that basis Tcibunal in appeal of M/s. Caclton Coats Pvt. Ltd. had cetucned fnding of fact that pcopecty in question was undec occupation of tenant i.e. pcesent assessee. 6 of 8 Uploaded on - 03/02/2020 Downloaded on - 04/02/2020 10:06:11 Sonali Kilaje 19-ITXA-1219-17.doc 15. In light of above fnding cetucned by Tcibunal which has not been questioned by cevenue, we feel that stand taken by cevenue authocities in cespect of land in question vis-a-vis tenancy of assessee is not justifed. assessee had disclosed amount of Rs.50 lakhs ceceived fcom M/s. Caclton Coats Pvt. Ltd. foc settlement of its claim to pcopecty and had fucthec disclosed that said amount was invested in capital bonds. Thus said amount was ceceived by assessee as long tecm capital gains in view of succendec of cights by assessee vis-a-vis pcopecty in question. In ciccumstances, mecely on basis of suspicion, cevenue authocities ought not to have cejected claim of assessee that said amount was ceceived as long tecm capital gains but to tceat said amount as income fcom othec soucces . 16. On due considecation, we fnd sufcient focce in contention of appellant / assessee. substantial question of law as fcamed above is accocdingly answeced in favouc of assessee and against cevenue. Ocdecs of all authocities below would stand intecfeced with in light of answec given. 7 of 8 Uploaded on - 03/02/2020 Downloaded on - 04/02/2020 10:06:11 Sonali Kilaje 19-ITXA-1219-17.doc 17. Appeal is allowed but with no ocdec as to cost. (MILIND N. JADHAV, J.) (UJJAL BHUYAN,J.) 8 of 8 Uploaded on - 03/02/2020 Downloaded on - 04/02/2020 10:06:11 Amol C. Shah (HUF) v. Income-tax Officer