M/S.jayant Tipnis Consultants Pvt. Ltd v. The Income Tax Officer 6(1)Mumbai

(-1-) IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL LODGING NO.3810 OF 2008 M/s.Jayant Tipnis Consultants Pvt. Ltd...Appellant Vs. The Income Tax Officer 6(1)Mumbai & Ors. ....Respondent Mr.A.M.Sathe, Senior Counsel with Mr. Kranti Sathe and Amruta Sathe, Suvarna Shendkar and Phadkar, for the Appellant. Mr. Jasbir S. Saluja, for the Respondents. CORAM:F.I.REBELLO & R.S.MOHITE,JJ.DATED: 22nd January, 2009 CORAM: DATED: 22nd January, 2009 P.C.: P.C.: . It is the contention on behalf of the appellant herein that considering Section 22 of the Income Tax Act the premises in dispute ought not to have been assessed in their hands as the possession is with three concerns of Saamna Group. In response to the query made by the A.O. this is the statement so recorded:- "The above fact clearly suggests that those 3 parties had virtually taken over the assets at a cost of Rs.8,00,000/-". The fact remains that till date if the appellant had to receive further consideration they have neither filed a suit for recovery or for specific performance of the contract nor is there any (-2-) agreement to show the nature of consideration for what purpose it was received. All that it is described in the statement is that a deposit was received. Whether it was license fees, rent or as part consideration for the sale has also not been spelt out. Reliance is placed for their submission that it ought not to be assessed in their hands in C.I.T. vs. Poddar Cement Pvt. Ltd. &Ors., 226 ITR 625 (S.C.). The Supreme Court in that the case of C.I.T. vs. Poddar Cement Pvt. Ltd. & Ors., 226 ITR 625 case was considering the meaning of "owner" in the context of Section 22 of the I..T. Act. In that case the builder/developer had parted with possession in favour of the prospective buyer, who had paid the entire consideration and was put in possession pursuant to a written agreement. Clause 4 of the Agreement which was reproduced in the judgment clearly shows that the vendor had no right in the property and that the entire right was in favour of the purchaser/vendor. The finding recorded also is that the so-called vendor is not permitted in law to dispossess or question the title of the assessee (so-called vendee). It is in that context that the learned Supreme Court was considering the language of Section 22 of the I.T.Act and more specifically the expression "owner". On those facts the Supreme Court held that after the entire consideration had been paid and the property was transferred in favour of the vendee, who had all rights in the property and the vendor (-3-) having absolutely no right, the expression "owner" must also include such person. . On the facts of our case, there is no agreement in writing. The assessee, the appellant herein, has also not disclosed what was the consideration. The only statement made is that they have received deposit of Rs.8.00 lakhs. Whether the deposit is towards license fees, whether the deposit was towards rent or part consideration is not spelt out. Further statement is that because Rs.8.00 lakhs has been paid that should presume that the Vendee is the owner of the property. It is also pointed out that the vendee is paying the municipal taxes. In our opinion the extended definition of "owner" as in the case of Poddar Cement Pvt. Ltd.cannot be applied to the facts of the present case. The two cases are factually distinguishable. 3. Considering the above, in our opinion, considering the language of Section 22 of the Income Tax Act there is no infirmity in the order of the I.T.A.T. and consequently though we have condoned the delay, since we have discussed the issue on deposit is towards license fees, whether the deposit was towards rent or part consideration is not spelt out. Further statement is that because Rs.8.00 lakhs has been paid that should presume that the Vendee is the owner of the property. It is also pointed out that the vendee is paying the municipal taxes. In our opinion the extended definition of "owner" as in the case of Poddar Cement Pvt. Ltd.cannot be applied to the facts of the present case. The two cases are factually distinguishable. 3. Considering the above, in our opinion, considering the language of Section 22 of the Income Tax Act there is no infirmity in the order of the I.T.A.T. and consequently though we have condoned the delay, since we have discussed the issue on merits, the question of law as framed would not arise and consequently appeal dismissed. (R.S.MOHITE, J.) (F.I.REBELLO,J.) (R.S.MOHITE, J.) (F.I.REBELLO,J.)