SHOBHA RAMACHANDRAN, CHENNAI V. ITO, NCW-2(4), CHENNAI

CO 4/CHNY/2019

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 8244 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 2 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 09-04-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Appeal Filed On: 06-02-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: C. RAMACHANDRAN
• Assessee Lawyers: B. SAGADEVAN
• Keywords: Cost of acquisition; Fair market value
• Section: 54F

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , . !'# ! , % !& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.3374/CHNY/2018 & C.O. NO.4/CHNY/2019 (IN I.T.A. NO.3374/CHNY/2018) ( )( / ASSESSMENT YEAR : 2015-16 THE INCOME TAX OFFICER, NON CORPORATE WARD - 2(4), CHENNAI - 600 034. V. SMT. SHOBHA RAMACHANDRAN, 8 TH FLOOR, KRIPA, DOOR NO.76/31, 2 ND MAIN ROAD, R.A. PURAM, CHENNAI - 600 028. PAN : AACPR 8204 K (+,/ APPELLANT) ( RESPONDENT & CROSS-OBJECTOR) +, - . / APPELLANT BY : SHRI B. SAGADEVAN, JCIT /0+, - . / RESPONDENT BY : SHRI C. RAMACHANDRAN, HUSBAND OF THE ASSESSEE 1 - 2% / DATE OF HEARING : 02.04.2019 3') - 2% / DATE OF PRONOUNCEMENT : 09.04.2019 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : THE REVENUE HAS FILED THE APPEAL AGAINST THE ORDE R PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) -2, CHE NNAI-34, DATED 28.09.2018 PERTAINING TO ASSESSMENT YEAR 2015 -16. THE 2 I.T.A. NO.3374/CHNY/18 C.O. NO.4/CHNY/19 ASSESSEE HAS ALSO FILED CROSS-OBJECTION AGAINST THE VERY SAME ORDER OF THE CIT(APPEALS). THEREFORE, WE HEARD BOTH THE APPEAL AND THE CROSS-OBJECTION TOGETHER AND DISPOSING THE SAME BY THIS COMMON ORDER. 2. SHRI B. SAGADEVAN, THE LD. DEPARTMENTAL REPRESEN TATIVE, SUBMITTED THAT THE ONLY ISSUE ARISES FOR CONSIDERAT ION IS DETERMINATION OF FAIR MARKET VALUE AS ON 01.04.1981 FOR COMPUTING CAPITAL GAIN. ACCORDING TO THE LD. D.R., THE ASSES SEE INHERITED PROPERTY FROM HER HUSBAND VIDE SETTLEMENT DEED DATE D 25 TH SEPTEMBER, 2013. ACCORDING TO THE LD. D.R., ONLY 8 0% OF THE PROPERTY WAS SETTLED IN FAVOUR OF THE ASSESSEE AND HER TWO CHILDREN. THE BALANCE 20% WAS RETAINED BY THE ASSESSEES HUSB AND. ACCORDING TO THE LD. D.R., THE ASSESSEE AND OTHER S HAREHOLDERS SOLD THE PROPERTY ON 30.03.2015 TO ONE SHRI P. RANJ IT. WHILE COMPUTING THE CAPITAL GAIN, THE ASSESSING OFFICER T OOK THE VALUE OF THE PROPERTY AS ON 25 TH SEPTEMBER, 2013 BEING THE DATE ON WHICH THE ASSESSEE INHERITED THE PROPERTY. THEREFORE, AC CORDING TO THE LD. D.R., THE CIT(APPEALS) IS NOT JUSTIFIED IN ALLOWING THE CLAIM OF THE ASSESSEE BY PLACING RELIANCE ON THE JUDGMENT OF BOM BAY HIGH COURT IN CIT V. MANJULA J. SHAH (2013) 355 ITR 474. 3 I.T.A. NO.3374/CHNY/18 C.O. NO.4/CHNY/19 3. WE HEARD SHRI C. RAMACHANDRAN, THE HUSBAND OF TH E ASSESSEE ALSO. ADMITTEDLY, THE PROPERTY WAS PURCHA SED BY THE ASSESSEES HUSBAND IN THE YEAR 1979. IN THE YEAR 2 013, BY MEANS OF SETTLEMENT DEED DATED 25 TH SEPTEMBER, 2013, 80% OF THE PROPERTY WAS SETTLED IN FAVOUR OF THE ASSESSEE AND HER TWO C HILDREN. THE ASSESSEES HUSBAND RETAINED 20% OF THE PROPERTY. I T IS ALSO NOT IN DISPUTE THAT THE PROPERTY ITSELF WAS SOLD TO ONE SH RI P. RANJIT ON 30.03.2015. THE QUESTION ARISES FOR CONSIDERATION IS WHETHER THE COST OF THE PROPERTY TO THE ORIGINAL OWNER, NAMELY, THE ASSESSEES HUSBAND SHRI C. RAMACHANDRAN IS TO BE TAKEN OR IT H AS TO BE ESTIMATED AS ON 01.04.1981? THE BOMBAY HIGH COURT IN THE CASE OF MANJULA J. SHAH (SUPRA) EXAMINED THIS ISSUE AND FOUND THAT WHEN THE PROPERTY WAS INHERITED, THE COST OF THE PROPERT Y ACQUIRED BY THE ORIGINAL OWNER HAS TO BE TAKEN INTO CONSIDERATION. IN THIS CASE, ADMITTEDLY, THE ASSESSEE RECEIVED THE PROPERTY BY M EANS OF SETTLEMENT DEED, THEREFORE, THE COST OF ACQUISITION OF THE ORIGINAL OWNER, NAMELY, SHRI C. RAMACHANDRAN, THE ASSESSEES HUSBAND, HAS TO BE TAKEN INTO CONSIDERATION. THEREFORE, THI S TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUTHORITY AND ACCORDINGLY THE SAME IS CONFIRMED. 4 I.T.A. NO.3374/CHNY/18 C.O. NO.4/CHNY/19 4. THE REVENUE HAS RAISED ONE MORE GROUND WITH REGA RD TO PERCENTAGE OF VALUE OF INVESTMENT IN THE NEW ASSET FOR THE PURPOSE OF CLAIMING DEDUCTION UNDER SECTION 54F OF THE ACT. 5. WE HEARD THE RIVAL CONTENTIONS AND PERUSED THE R ELEVANT MATERIAL AVAILABLE ON RECORD. THE CIT(APPEALS) FOU ND THAT THE ASSESSEE AND HER HUSBAND INVESTED IN THE NEW PROPER TY IN THE RATIO OF 5/7 AND 2/7 RESPECTIVELY WHICH IS 71.43% AND 28. 57% OF THE TOTAL INVESTMENT OF 11.4 CRORES. THE ASSESSING OFFICER APPEARS TO HAVE FOUND THAT IN THE ABSENCE OF ANY REFERENCE ABOUT TH E SHARE OF THE PURCHASER IN THE SALE DEED, IT HAS TO BE TAKEN IN E QUAL SHARES. THE CIT(APPEALS) BY TAKING INTO CONSIDERATION THE RATIO OF INVESTMENT, FOUND THAT THE ASSESSEE IS ELIGIBLE FOR RELIEF TO T HE EXTENT OF 71.43% OF THE VALUE OF INVESTMENT IN THE NEW ASSET FOR THE PURPOSE OF CLAIMING DEDUCTION UNDER SECTION 54F OF THE ACT. T HIS TRIBUNAL FINDS THAT WHEN THE ASSESSEE INVESTED 71.43% IN THE NEW PROPERTY, THE CIT(APPEALS) HAS RIGHTLY ALLOWED THE CLAIM OF D EDUCTION UNDER SECTION 54F OF THE ACT. THIS TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUTHORITY AND ACCORDINGLY THE SAME IS CONFIRMED. 5 I.T.A. NO.3374/CHNY/18 C.O. NO.4/CHNY/19 6. THE CROSS-OBJECTION FILED BY THE ASSESSEE IS ONL Y TO SUPPORT THE ORDER OF THE CIT(APPEALS). IN VIEW OF THE DECI SION OF THIS TRIBUNAL IN THE REVENUES APPEAL, THE CROSS-OBJECTI ON BECOMES INFRUCTUOUS. ACCORDINGLY, THE SAME IS DISMISSED. 7. IN THE RESULT, BOTH THE APPEAL OF THE REVENUE AS WELL AS THE CROSS-OBJECTION OF THE ASSESSEE STAND DISMISSED. ORDER PRONOUNCED IN THE COURT ON 9 TH APRIL, 2019 AT CHENNAI. SD/- SD/- (. !'# ! ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESA N) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 5 /DATED, THE 9 TH APRIL, 2019. KRI. - /267 87)2 /COPY TO: 1. +, /APPELLANT 2. /0+, /RESPONDENT 3. 1 92 () /CIT(A)-2, CHENNAI-34 4. PRINCIPAL CIT, CHENNAI-1, CHENNAI 5. 7: /2 /DR 6. ;( < /GF.