Triad Resorts & Hotels P.Ltd vs. WTO (ITAT Bangalore)

The assessee filed a Miscellaneous Application u/s 254(2) of the Act claiming that the Tribunal had omitted to adjudicate an additional ground on the question whether land which stood transferred to the developer as per a Joint Development agreement u/s 2(47)(v) of the Income-tax Act, 1961 can be said to “urban land” for purposes of levy of wealth-tax. It was also claimed that the decision of the jurisdictional High Court in CIT vs. Dr. T.K. Dayalu (202 Taxman 531), though quoted during the course of arguments and relied upon by the counsel for the assessee, had not been referred to and this constitutes a mistake apparent from the record. HELD by the Tribunal dismissing the Miscellaneous Application:

(i) It is very clear from perusal of the impugned order that this Tribunal has dealt with the additional ground raised by the petitioner. The Tribunal after referring to the judgment of the Hon’ble Supreme Court in the case of Suraj Lamp & Industries Pvt. Ltd. vs. State of Haryana (340 ITR 1) and also the Hon’ble jurisdictional High Court in the case of Wipro Ltd. vs. DCIT (282 CTR 346), rendered a categorical finding that by virtue of entering into development agreement, the ownership of the property had not been transferred to the builder. Then, the Tribunal proceeded to interpret the term ‘belonging to’ which expression is used in sec.4 of the WT Act. In that context, the Tribunal, after referring to the decisions of the Hon’ble Supreme Court in the case of Bishwanath Chatterjee (1976)(103 ITR 536) and (Late) Naivab Sir Mir Osman Ali Khan (1986)(162 ITR 888) and the decision of the Hon’ble jurisdictional High Court in the case of Vysya Bank Ltd. vs. DCWT (299 ITR 335) held that an asset, which was not registered and title of the property had not been passed on to the developer liable to be included in the taxable wealth of the assessee. The Tribunal finally held that since in the present case, by virtue of Joint Development Agreement, no title has been passed on to the developer, the assessee-company continued to be the owner of the land and was held to be liable to wealth-tax. The decision had been rendered by the Tribunal after considering the judgments of the Hon’ble Apex Court cited supra as well as the judgment of the Hon’ble jurisdictional High Court cited supra.

(ii) During the course of hearing of these Miscellaneous Petitions, learned counsel for the petitioner in a very deceitful manner, though referred only to para.7.1 of the order wherein the additional ground had been discussed, chose not to refer to para.9 of the order where the Tribunal had adjudicated this additional ground raised and rendered a finding. This conduct of the counsel is highly deplorable. On this ground alone Miscellaneous Petitions are liable to be dismissed.

(iii) Learned counsel for the petitioner could not file any evidence in support of his argument that the decision of Hon’ble jurisdictional High Court in the case of Dr. T.K. Dayalu (supra) was quoted before this Tribunal during the course of argument. It is only during the course of hearing of the present Miscellaneous Petitions, the learned counsel for the petitioner had chosen to file a copy of the decision in the case of Dr. T.K. Dayalu (supra). In the case of CIT vs. Earnest Exports Ltd (323 ITR 577), the Hon’ble Bombay High Court had clearly held that application under the provisions of sec.254(2) is maintainable only in cases where it was established that specific attention of the bench was drawn to a particular decision and the decision was specifically relied upon but not considered by the Tribunal. Therefore, the argument of the learned counsel for the petitioner that the decision of the Hon’ble jurisdictional High Court in the case of Dr.T.K.Dayalu (supra) was not applied to the facts of the case, cannot be accepted.

(iv) Even assuming that Dr.T.K.Dayalu (supra) case was cited and if considered also, the said decision has no bearing on the issue in the appeals. The decision was rendered in the context of the definition of the term ‘transfer’ and under the provisions of sec.2(47) of the Income-tax Act,1961, whereas in the present appeal, we are concerned with interpretation of the term ‘belonging to’ as employed by the provisions of sec.4 of the Wealth-tax Act, 1957. In any event, the decision in the case of Dr. T.K. Dayalu (supra) was not held to be good law by the subsequent decision by the very Hon’ble jurisdictional High Court in the case of CIT vs. N. Vemanna Reddy in ITA No.591/2008 dated 18/8/2014. Thus, decision in the case of Dr.T.K.Dayalu (supra) lost its precedential value, if any. Therefore, it goes without saying that the decision in Dr. T.K. Dayalu (supra) case had no relevance and bearing on the issue in appeal.

(v) The attempt by the petitioners to re-agitate the same issues which were considered by this Tribunal and were rejected expressly in the impugned order is a clear instance of an abuse of process of this Court apart from the fact that such issues are barred by principles of Res Judicata or Constructive Res Judicata and principles analogous thereto.

(vi) We must place on record that the petitioner had not approached this Tribunal in the Miscellaneous Petitions with clean hand, as stated supra. A litigant who approaches the court of law with unclean hands does not deserve any relief. Even on this score, these Miscellaneous Petitions are liable to be dismissed.

(vii) We highly deplore the attempts of the petitioner to knock the doors of the Tribunal again in the guise of seeking rectification of order alleging that additional ground of appeal was not decided. As mentioned supra, the additional grounds have been specifically adjudicated and a specific finding had been rendered vide para.9 of the impugned order. Attempts made by the petitioners is nothing but clear case of abuse of process of court and in breach of principles of Res Judicata. We condemn this conduct of petitioner in no uncertain terms as it resulted in colossal waste of valuable time of this Tribunal.