9911796707
TMI Blog2023 (12) TMI 223X X X X Extracts X X X X X X X X Extracts X X X X ..... re from the start to the end? (b) Whether in the facts and circumstances of the case and in law, the learned ITAT has erred inholding that the income earned by the sale of the property, Vision Hour is taxable under the head of Capital Gain and not under the head of income from Business or Profession without appreciating the fact that the entire chain of events shows that there was no intention of holding the property as investment from the very beginning but it was an adventure in nature and in the form of business activity? (c) Whether in the facts and circumstances of the case and in law, the learned ITAT has erred inholding that the income earned by the sale of the property, Vision House, is taxable in A.Y. 2008-09 and not in A.Y. 2007-08 without appreciating the fact that the agreement to sale of the said property was made on 10th January, 2007 and part payment/consideration was also received in F. Y.2006-07, relevant to A. Y. 2007-08?" 2. The brief facts of the case are that the respondent-assessee who is an Association of Persons (AOP) was registered under the provisions of the Bombay Non-Trading Corporation Act (for short "NTC"). The respondent-assessee purchased the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Rs.3,39,60,960/- in the hands of the respondent AOP. 2.5. Being aggrieved, the respondent-AOP preferred appeal before the CIT (Appeals) who allowed the appeal by observing as under: "With regard to the question of taxability in the hands of NTC or the members of the NTC, the AO is of the opinion that as the entire transaction is done by the NTC, the real owner of the property is NTC only. On the other hand the case of the appellant is that all the funds for the purchase of land and construction of building are given by the members and the NTC has issued shares as well allotment certificate to the members, therefore the members are the real owner of the property. The appellant NTC was fully funded by the members of the NTC and the NTC has allowed the rights in the land and issued an allotment certificate on 27" October, 1999. By this allotment certificate the members of the NTC got rights in the land to the extent of their share in the funds. On 10/1/2007 the allotee members entered into the sale agreement with the proposed purchaser to sale the land and building apparent thereto and the appellant NTC was confirming party to it because the appellant NTC had already allotted the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... building are given by the members and the assessee AOP has accordingly issued shares to the members, in proportion to their contribution. The assessee AOP was fully funded by its members and the assessee allowed the right in the land and issued allotment certificate on 27th October, 1999 in favour of its members. By this allotment certificate, the members of the assessee AOP got rights in the land to the extent of their share in the funds contributed by them. It was further observed that on 10-01-2007, the respective allottee members entered into sale agreement with the proposed purchaser to sell the land and building appurtenant thereto, as owners of the said property. It is further observed that in the development permission issued by AMC, the respective members of assessee have been shown as "owners" of the property. It is also observed that the BU (building use) permission is also issued in the name members of the assessee AOP. It was further observed that members of the assessee shown as "owners" of the property by the Registrar of Stamps Gujarat. In the case of Monarch Citadel (P.) Ltd.[2014] 45 taxamann.com(Karnataka), the Karnataka High Court held that where assessee-com ow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... P were the real owners of the property in question and therefore, the income was liable to be taxed in the hands of the respective members in proportion of their holdings which was already offered by them for the Assessment Year 2008-09. The Tribunal also held in favour of the assessee holding that as the possession of the property was taken in the year 1994 and was sold in the year 2007-08, the entire transaction was not for any trading purpose and accordingly, the CIT (Appeal) has rightly held the same to be liable for capital gains as offered by the members of the AOP for the Assessment Year 2008-09. Even with regard to the transaction in question with regard to the year in taxability though the same was not required to be decided by the Tribunal or the CIT (Appeal) when it was held sofaras the respondent-assessee AOP was concerned that the transaction was rightly taxed in the hands of the members of the AOP as capital gains, both the authorities below have after considering the facts of the case come to the conclusion that as the conveyance deed was executed on 22.05.2007 and the possession of the property in question was handed over to the buyer on the same day, the transactio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regard to the sale of property in question in the year 2007 relevant to the assessment year 2008-09 as capital gains is concerned, the facts are clear in as much as though it is true that the respondent-AOP purchased the property in auction from the Income Tax Department in the year 1994 and the conveyance deed was executed in the year 2005 but in the meanwhile the respondent-assessee allotted the share in the property in question to its members for the contribution made by it in the year 1999. This fact is not disputed by the appellant-Revenue and accordingly, the members of the AOP became the owner of the property in question qua their respective shares in which the allotment was done by the AOP. Therefore it cannot be said that the AOP continued to be the owner of the property as Association of Person is formed by the members for their joint interest in the property and accordingly, once the share of the respective member is allotted by the AOP then the AOP cease to be the owner of the property in question from the year 1999 with respect to the shares which were allotted by issuing the allotment letter. 4. In view of the concurrent findings of fact arrived at by both the author ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
