ITO, CHENNAI V. Shri S.K.Thanikachalam, CHENNAI

ITA 1069/CHNY/2009

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9212 (ITAT-CHENNAI)
• Duration Of Justice: 6 year(s) 11 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 18-04-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 02-07-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTHJCIT
• Assessee Lawyers: S SRIDHAR
• Keywords: Cost of acquisition
• Section: 143(3); 147

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , C B ENCH, CHENNAI . , . , # $ BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI G.PAVAN KUMAR, JUDICIAL MEMBER ./ I.T.A.NO.1069/MDS/2009 ( / ASSESSMENT YEAR: 2006-07) THE INCOME TAX OFFICER, SALARY WARD-II(4) CHENNAI-34. VS MR. S.K.THANIKACHALAM, 22/16, SAKTHI NAGAR, 5 TH STREE, SAI GANESH APTS, CHOOLAIMEDU, CHENNAI-600 094. PAN:AEBPT0733J ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. A.V.SREEKANTH,JCIT /RESPONDENT BY : MR. S.SRIDHAR, ADVOCATE /DATE OF HEARING : 18 TH APRIL, 2016 /DATE OF PRONOUNCEMENT : 15 TH JUNE, 2016 / O R D E R PER A. MOHAN ALANKAMONY, AM:- THIS APPEAL IS FILED BY THE REVENUE AGGRIEVED BY TH E ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS)- IV, CHENNAI IN ITA NO. CIT(A)-IV/CHE/227/08-09 DATE D 21.04.2009 PASSED UNDER SECTION 143(3) R.W.S. 250(6 ) OF THE ACT. 2. THE REVENUE IN ITS APPEAL HAS RAISED SEVERAL GR OUNDS, HOWEVER, THE CRUX OF THE ISSUE IS THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN D ELETING THE ADDITION OF `50,54,318/- MADE BY THE LEARNED AS SESSING OFFICER ON ACCOUNT OF LONG TERM CAPITAL GAIN. 2 ITA NO.1069/MDS/2009 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL EARNING SALARY FILED HIS RETURN OF INCOM E ON 27.07.2006 DECLARING `96,190/- AS HIS INCOME. SUBSE QUENTLY, THE CASE WAS TAKEN UP FOR SCRUTINY THROUGH CASS SIN CE THE ASSESSEE HAD SOLD IMMOVABLE PROPERTY ON 5.5.2005 FO R SALE CONSIDERATION OF `53,00,000/-. THEREAFTER THE ASSES SMENT WAS COMPLETED UNDER SECTION 147 R.W.S. 143(3) OF THE AC T ON 31.12.2008, WHEREIN THE LEARNED ASSESSING OFFICER M ADE ADDITION OF `50,54,318/- TOWARDS LONG TERM CAPITAL GAIN. THE FINDING OF THE LEARNED ASSESSING OFFICER WAS THAT T HE ASSESSEE WAS ENTITLED IN 3/4 TH SHARE IN ANCESTRAL PROPERTY THROUGH SETTLEMENT DEED AND WILL IN ADDITION TO 1/4 TH SHARE IN THE SAID PROPERTY ON THE DEATH OF HIS FATHER LAT E S.V.KRISHNASWAMY CHETTY. THEREAFTER THE ASSESSEE HA D SOLD THE IMMOVABLE PROPERTY FOR RS.53.00 LAKHS WHEREIN T HE STAMP VALUATION AUTHORITY HAD ADOPTED THE VALUE OF THE PR OPERTY AS `1,47,64,598/-. FOR THE PURPOSE OF COMPUTING LONG T ERM CAPITAL GAIN, THE ASSESSEE HAD SUBMITTED BEFORE THE LEARNED ASSESSING OFFICER THAT THE VALUE OF THE IMMOVABLE P ROPERTY AS ON 1.4.1981MAY BE ADOPTED AS `21,29,700/- AND ACCOR DINGLY INDEXED COST OF ACQUISITION WAS WORKED OUT AT ` 97, 10,650/-. 3 ITA NO.1069/MDS/2009 BASED ON THE SUBMISSION OF THE ASSESSEE THE LEARNED ASSESSING OFFICER WORKED OUT THE CAPITAL GAIN IN TH E HANDS OF THE ASSESSEE AT `50,54,318/-. 4. ON APPEAL, THE LEARNED COMMISSIONER OF INCOME T AX (APPEALS) DELETED THE ADDITION MADE BY THE LEARNED ASSESSING OFFICER IN HANDS OF THE ASSESSEE BY HOLDI NG THAT THE ASSET SOLD BELONGED TO THE ASSESSEES HUF AND THERE FORE DIRECTED HIM TO CONSIDER THE LONG TERM CAPITAL GAI NS IN THE HANDS OF THE ASSESSEES HUF. 5. BEFORE US, THE LEARNED AUTHORIZED REPRESENTATIVE SUBMITTED THAT THE IMMOVABLE PROPERTY WAS OWNED BY THE ASSESSEES HUF AND HENCE IT HAS TO BE ASSESSED ONLY IN THE HANDS OF THE ASSESSEES HUF AND NOT IN THE HANDS OF THE ASSESSEE. 6. THE LEARNED DEPARTMENTAL REPRESENTATIVE ARGUED I N SUPPORT OF THE ORDER OF THE LEARNED ASSESSING OFFIC ER. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y PERUSED THE MATERIALS AVAILABLE ON RECORD. FROM TH E SALE DEED DATED 5.5.2005 AT PAGE NO.10 IT IS EVIDENT THA T THE 4 ITA NO.1069/MDS/2009 ASSESSEE HAS INHERITED THE PROPERTY. THE RELEVANT PARA IS EXTRACTED HEREIN BELOW:- WHEREAS MR. S.K.THANICKACHALAM THE 1 ST VENDOR HEREIN IS ENTITLED TO 3/4 TH SHARE IN THE SAID PROPERTY (HE HAVING GOT ONE HALF SHARE IN THE SAID PROPERTY AS AFORESAID UN DER SETTLEMENT, DEED, AND UNDER THE WILL + ONE FOURTH S HARE IN THE SAID PROPERTY ON THE DEATH OF HIS FATHER S.V.KRISHNASWAMY CHETTY) AND MRS. P.MEENATCHI, THE 6 TH VENDOR HEREIN IS ENTITLED TO ONE FOURTH SHARE IN TH E SAID PROPERTY, SHE HAVING GOT THE SAME AFTER THE DEATH O F HER FATHER S.V.KRISHNASWAMY CHETTY. FURTHER, THE LEARNED AUTHORIZED REPRESENTATIVE HAS SUBMITTED THAT DETAILS OF THE INHERITANCE OF THE IM MOVABLE PROPERTY BY THE ASSESSEE WHICH IS EXTRACTED HEREIN BELOW AND NOT DISPUTED:- S.K.VENKATACHALAM S/O. SATHIVEDU KANDASAMY CHETTIAR + WIFE BOTH DIED INTESTATE 1 ST SON 2 ND SON 3 RD SON 4 TH SON S.KUMARASAMY CHETTY S.V.SUBBU CHETTY S.V.KRISHNASAMY CHETTY S.V.THIAGARAJA CHETTY 1/4 TH SHARE 1/4 TH SHARE 1/4 TH SHARE 1/4 TH SHARE DIED INTESTATE & ISSUE-LES ON 16.9.76 EXECUTED REGISTERED SETTLEMENT DEED IN FAVOUR OF KRISHNASAMY CHETTYS SON S.K.THANIKACHALAM (ASSESSEE) BEGETS 1/4 TH SHARE OF KUMARASAMY CHETTY SO TOTAL SHARE DIES ISSUE LESS IN 1920 HIS 1/4 TH SHARE DEVOLVED ON HIS WIFE NACHUARAMMAL SUBBUCHETTY DIED ISSUELESS ON 11.01.71 DIED ON 13.10.1982 NACHUARAMMAL DIED ON 19.12.1979 SUBBUYCHETTYS WIFE LATCHUMAMMAL DIED ON 14.11.72 HIS WIFE SARASWATHIAMMAL DIED ON 19.11.96 HAD ONE SON S.K.THANIKACHALAM (ASSESSEE) AND ONE DAUGHTER MEENAATHCHI) THIAGARAJAS WIFE RUKMANIAMMAL BY WILL DT.14.2.57 BEQUEATHED HER SHARE IN FAVOUR OF S.K.THANIKACHALAM (ASSESSEE) 5 ITA NO.1069/MDS/2009 NACHUARAMMALS 1/4 TH SHARE DEVOLVED ON HER HUSBANDS ONLY SURVIVING BROTHER S.V.KRISHNASAMY CHETTY RUKMANIAMMAL DIED ON 19.02.1983. S.K.THANIKACHALAM (ASSESSEE) HAD 1/4 TH SHARE (SON OF S.V.KRISHNASAMY CHETTY S.K.THANIKACHALAM (ASSESSEE) HAD SHARE IN PROPERTY I.E. HE RECEIVED 1/4 TH SHARE AND HIS SISTER MEENATHCHI RECEIVED 1/4 TH SHARE. S.K.THANIKACHALAM (ASSESSEE) HAD 1/4 TH SHARE S.K.THANIKACHALAM (ASSESSEE)S SHARE - 3/4TH 8. SINCE THE ASSESSEE BEING A HINDU BY RELIGION, INHERITS THE IMMOVABLE PROPERTY FROM HIS ANCESTORS, THE SAME WILL DEVOLVE AROUND HIS HUF. THEREFORE, AS HELD BY THE L EARNED COMMISSIONER OF INCOME TAX (APPEALS) AND POINTED OU T BY THE LEARNED AUTHORIZED REPRESENTATIVE, THE ASSESSME NT HAS TO BE NECESSARILY MADE IN THE HANDS OF THE ASSESSEE S HUF WITH RESPECT TO THE SALE OF THE AFORE STATED IMMOVA BLE PROPERTY. FURTHER THE FINDINGS OF THE LEARNED CIT(A ) AND THE CASE LAWS RELIED BY HIM COULD NOT BE SUCCESSFULLY CONTROVERTED BY THE LEARNED D.R. THEREFORE, WE DO N OT FIND IT NECESSARY TO INTERFERE WITH HIS ORDER. ACCORDINGLY WE HEREBY CONFIRM THE ORDER OF THE LEARNED CIT(A). 6 ITA NO.1069/MDS/2009 9. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 15 TH JUNE, 2016 SD/- SD/- ( . ) ( . ) (G.PAVAN KUMAR) ( A.MOHAN ALANKAM ONY ) # % / JUDICIAL MEMBER % / ACCOUNTANT MEMBER # /CHENNAI, ( /DATED 15 TH JUNE, 2016 SOMU *+ ,+ /COPY TO: 1. APPELLANT 2. RESPONDENT 3. - () /CIT(A) 4. - /CIT 5. + 1 /DR 6. /GF