The Commissioner Of Income Tax-21 v. The Juhu Vile Parle Development

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO. 1276 OF 2011 The Commissioner of Income Tax-21..Appellantversus The Juhu Vile Parle Development Co. Op. Housing Associated Ltd...Respondent -------- Mr. Suresh Kumar for the Appellant.Ms. Aarti Sathe with Mr. Kalpesh Turalkar for the Respondent. ............. CORAM : J.P. DEVADHAR & M.S.SANKLECHA, JJ. DATE : 24[th] January, 2013 P.C. : In this appeal by the revenue, the following question of law has been proposed for our consideration: “Whether on the facts and in the circumstance of the case and in law, the ITAT is right in deleting the additions of Rs.74,17,895/- on protective basis under the head 'capital gain'?” 2The respondent-assessee is Co-operative Society managing the common affairs of 14 different co-operative societies in Juhu Vile Parle Development Scheme. All 14 co-operative societies were independently registered as co-operative housing societies. 3The Assessing Officer while completing the assessment under Section 143(3) of the Income Tax Act, 1961 (the Act) noticed that during the previous year relevant to the assessment year, a plot was transferred to Vasundhara Co-operative Housing Society Ltd. This plot of land belongs to 14 co-operative housing society jointly in term of conveyance executed in April,1999. However, the entire consideration of Rs.74.17 lacs received from transfer of the aforesaid plot was brought to tax under the head 'capital gains' in the hands of the respondent-assessee. 4On first appeal, the Commissioner of Income Tax (Appeals)(the CIT(A)) by an order dated 03.03.2009, allowed the respondent-assessee's appeal holding that on facts there would be no capital gains but there would be a net loss of SNC Rs.57.65 lacs on account of Indexation available in respect of the property. Therefore, the CIT(A) deleted the additions. 5The revenue carried the matter in appeal to the Tribunal. The Tribunal by an order dated 04.11.2010 dismissed the revenue's appeal by arriving at a finding of fact that the plot of land sold to Vasundhara Co-operative Housing Society Ltd belongs to 14 Co-operative Housing Societies collectively as is evident from the conveyance jointly executed in 1999. Therefore, the Tribunal held that the respondent-assessee is not a owner of the plot sold, but was merely holding possession thereof on behalf of the 14 Co-operative Housing Societies. The transfer of the plot of land was also executed by the 14 societies on 14.05.2003 in favour of Vasundhara Co-operative Housing Society Ltd. Further, the accounting entries also show that the respective shares of the 14 Co-operative Housing Societies in the sale consideration has been credited to their accounts and shown as deposits from them in the respondent-assessee's balance sheet. Thus, the Tribunal held as a finding of fact that the respondent-assessee is not a owner of the plot sold and consequently, not liable to any capital gains tax thereon. 6Since the Tribunal based its decision on a finding of fact, no question of law arises for being entertained. Further, the revenue has not been able to point out that the finding of fact arrived at by the Tribunal is perverse. In the circumstances, no occasion to entertain the proposed question of law arises. 7 Accordingly, the appeal is dismissed with no order as to costs. (M.S. SANKLECHA, J.) (J.P.DEVADHAR, J.)