TXA Nos.11 & 12/2013

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IN THE HIGH COURT OF BOMBAY AT GOA

TAX APPEALS NO.11 & 12 OF 2013

TAX APPEAL NO.11 OF 2013

The Commissioner of Income Tax,

Karnataka (Central), Bangalore.

….. Appellant

V/s

Shri Sadia Shaikh

Near Goa International Don Bosco

Odxel, Dona Paula, Panaji Goa.

PAN No.AKQPS9076A.

…. Respondent

AND

TAX APPEAL NO.12 OF 2013

The Commissioner of Income Tax,

Karnataka (Central), Bangalore.

….. Appellant

V/s

Shri Sadiq Shaikh

Near Goa International Don Bosco

Odxel, Dona Paula, Panaji Goa.

PAN No.AMFPS2073J.

…. Respondent

Mrs. A. Dessai, Advocate for the Appellant.

Shri A.N.S. Nadkarni, Senior Advocate with Shri D. Lawande, Advocate

for the Respondents.

CORAM : B.R. GAVAI &

F.M. REIS, JJ.

DATE : 2^nd DECEMBER, 2013

ORAL ORDER: (Per B.R. GAVAI, J.)

The appeal challenges the order passed by the learned Income tax

Appellate Tribunal, Panaji dated 16^th January, 2013, thereby disposing the

appeals filed by the appellant/Revenue challenging the order passed by

the Commissioner of Income Tax (Appeals) dated 30^th July, 2012 for the

assessment year 2003-04.

TXA Nos.11 & 12/2013

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2.

Heard Mrs. A. Dessai, the learned Counsel for the appellant and

Shri A.N.S. Nadkarni, learned Senior Counsel appearing for the

respondents.

3.

Mrs. A. Dessai, the learned Standing Counsel submits that the

following substantial question of law arises for consideration in the

present appeals:

In the facts and circumstances of the case,

whether the Hon'ble ITAT was justified in Law in

upholding the Order of the Commissioner of Income

Tax (Appeals) in which the CIT (A) held that the

provisions of Section 2(47)(v) are not applicable for the

assessment year and thereby deleted the addition of

Rs.1,52,60,908/- made under the head, 'short term

capital gain'.

4.

It is the contention of the appellant/Revenue that a development

agreement was entered into by the Assessee on 5^th October, 2002 with

M/s. Landscape Developers for development of residential project

namely Castle Rock and Cabo. It is further the case of the appellant that

a similar development agreement was made with said M/s. Landscape

Developers for sale and development of land admeasuring 16,140 sq.

metres at Panaji.

TXA Nos.11 & 12/2013

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5.

Mrs. A. Dessai, the learned Standing Counsel submits that since the

possession was handed over by the assessee to the said M/s. Landscape

Developers during the said assessment year, it was a transfer within the

meaning of sub-section 24 clause 5 of Section 2 of the Income Tax Act

read with Section 53A of the Transfer of Property Act. As such, the

Assessing Officer has rightly found that the assessee was liable to pay

income by way of short term capital by the said amount.

6.

The Commissioner of Income Tax (Appeals) so also the learned

Tribunal upon perusal of the agreement in question found that the

possession as contemplated in Section 53A of the Transfer of Property

Act was in fact not handed over by the assessee to the developer. It has

further been found that the agreement only permitted the development to

be carried out by the said developer. It has been found that the entire

control over the property was in fact with the assesee inasmuch as the

licence to construct the property was also in the name of the assessee and

the occupancy certificate was also given to the assessee. It was therefore

found that the execution of the agreement could not amount to transfer as

contemplated under Section 53A of the Transfer of Property Act. It was

further found that the agreement dated 5^th October, 2002 was specifically

TXA Nos.11 & 12/2013

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modified by sub-clause 2 of the agreement dated 19^th July, 2004 and 5^th

March, 2008. It was further found that the assessee was liable to pay the

capital gain as per the last agreement i.e. for assessment year 2008-09.

7.

It can thus be seen that Commissioner of Income Tax (Appeals) as

well as the learned