Kamal Babbar, CHENNAI V. ACIT, CHENNAI

ITA 1203/CHNY/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8238 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 18-05-2016
• Court: TRIBUNAL
• Assessee Lawyers: D ANAND
• Keywords: Capital asset; Cost of acquisition

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI , . !' BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G.PAVAN KUMAR, JUDICIAL MEMBER ./ I.T.A.NO.1203/MDS./2016 / ASSESSMENT YEAR : 2012-13 SHRI KAMAL BABBAR, OLD NO.166,NEW NO.336, 3 RD FLOOR, THAMBU CHETTY STREET,PARRYS,CHENNAI 600 001. VS. ASSISTANT COMMISSIONER OF INCOME TAX, NON-CORP0ORATE CIRCLE 11, CHENNAI-6. [PAN AAFPB 3980 P] ( #$ / APPELLANT) ( %&#$ /RESPONDENT) / APPELLANT BY : MR.D.ANAND,ADVOCATE /RESPONDENT BY : MR.CLEMENT RAMESH KUMAR, ADDITIONAL CIT D.R / DATE OF HEARING : 19 - 10 - 201 6 !' / DATE OF PRONOUNCEMENT : 26 - 10 - 2016 ' / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-13,CHENNA I DATED 12.04.2016 PERTAINING TO ASSESSMENT YEAR 2012-13. ITA NO. 1203/MDS./2016 :- 2 -: 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS. 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME (APPEALS)-13, CHENNAI IS WRONG, ILLEGAL AND IS OPPOSED TO LAW AND FACTS O F THE CASE. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) -13 ERRED IN ADOPTING THE COST OF ACQUISITION OF PROPERTY AT AN ARBITRARY FIGURE OF RS.2,11,00,000/- AS AGAINST THE ACTUAL COST OF ACQU ISITION. 3. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-13 IN ADOPTING THE COST OF ACQUISITION OF PROPERTY AT RS. 2,11,00,000/- AS AGAINST THE VALUE DECLARED BY THE APPELLANT IS ON TOTAL MIS -APPRECIATION OF FACTS AND MISINTERPRETATION OF MEMORANDUM OF AGREEMENT DA TED 4.11.1995 AND THE ORDER OF THE HONBLE HIGH COURT. 4. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 13 ERRED IN LAW IN NOT CONSIDERING THE COMPENSATION PAID BY THE APPELLANT TO SATNAM SINGH WHILE COMPUTING THE CAPITAL GAINS. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE AO DIS ALLOWED EXPENSES CLAIMED FROM THE SALE CONSIDERATION AND AL SO DISALLOWED AMOUNT OF ` 1.5 CRORES FROM THE COST OF ASSET STATING THAT IT H AS ALREADY BEEN INCLUDED IN THE ORIGINAL COST OF ASSET AND THE REAFTER COMPUTED LTCG AT ` 94,13,443/- AND THE DIFFERENCE IN TOTAL CAPITAL GAI N AS PER RETURN WORKS OUT TO ` 1,97,19,209/- AND ASSESSED THE INCOME AT ` 2,13,40,409/-. THE ASSESSEE HAS FILED W.P.NO.6251 O F 2016 AND WMP NO.5584 AND 5585 OF 2016 IN THE CASE OF KAMAL BABBA R AGAINST THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2012-13 WITH H IGH COURT MADRAS ON 22.02.2016. THE HONBLE HIGH COURT AFTER HEARING BOTH THE PARTIES CAME TO A CONCLUSION THAT NOT TO ENTERTAIN PRESENT W.P AND DISMISSED THE W.P AND DIRECTED THE 3 RD RESPONDENT, BEING CIT TO ITA NO. 1203/MDS./2016 :- 3 -: DISPOSE OF APPEAL WITHIN 8 WEEKS FROM THE RECEIPT O F THIS ORDER. ACCORDING TO THE DIRECTION OF JURISDICTIONAL HIGH C OURT, THE LD.CIT(A) FIXED THE CASE ON PRIORITY HEARING AND THE APPEAL I S ADJUDICATED ON TWO ISSUES RELATING TO COST OF ASSET WHICH THE AO HAS T AKEN AT ` 4 CRORES AS AGAINST ASSESSEES CLAIM OF ` 7.2 CRORES AND OTHER ISSUE RELATING TO CLAIM OF ASSESSEE FROM THE SALE CONSIDERATION COMP ENSATION PAID TO MR.SATNAM SINGH FOR ` 56,41,661/-. THE LD.CIT(A) CONFIRMED THE ORDER OF LD. ASSESSING OFFICER. AGAINST THIS, THE ASSESSE E IS IN APPEAL BEFORE US. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. WE HAVE CAREFULLY GONE THROUGH THE COPY OF PURCHASE DEED OF THE PROPERTY SPECIFICALLY AT PAGE NO.49,50,51 DATE D 07.11.1997. AS PER THIS, THE VALUE OF A SCHEDULED PROPERTY WAS AT ` 5.50 CRORES AND IT HAS BEEN PAID AS FOLLOWS:- ` (A) 3,92,66,000 (B) 82,34,000 (C) 25,00,000 (D) 2,00,00,000 7,00,00,000 OUT OF ` 7 CRORES, ` 1.5 CRORES WAS TOWARDS MOVABLE PROPERTY (REFER PAGE 52 OF PURCHASE DEED COPY). SO VALUE OF THE IMM OVABLE PROPERTY WAS ` 5.5 CRORES AND IT CANNOT BE CONSIDERED AS ` 4 CRORES. ACCORDINGLY, ITA NO. 1203/MDS./2016 :- 4 -: WE DIRECT THE AO TO CONSIDER THE ASSESSEES SHARE O F COST OF ACQUISITION I.E. ` 2.75 CRORES + ASSESSEES SHARE OF PROPORTIONATE STA MP DUTY CHARGES. THIS GROUND IS REMITTED TO THE FILE OF AO FOR RE-COMPUTATION OF CAPITAL GAINS. 5. THE NEXT GROUND IS WITH REGARD TO NON CONSIDERA TION OF COMPENSATION PAID TO MR.SATNAM SINGH WHILE COMPUTIN G CAPITAL GAINS. THE FACTS OF THE ISSUE ARE THAT ASSESSEE STATED THA T ASSESSEE HAS PAID AN AMOUNT OF ` 50 LAKHS AS PER HIGH COURT ORDER DATED 23.02.2011 A ND AN AMOUNT OF ` 5,72,441/- DUE TO HIM AND ` 69,220/- IS AN EXCESS SETTLED TO HIS BROTHER MR.SATHIBOX SINGH TOTALLY AN AMOUNT OF ` 56,41,661/- WAS CLAIMED FROM THE TOTAL CONSIDERATIO N OF THE CAPITAL ASSETS WHILE COMPUTING CAPITAL GAINS. THIS WAS NOT CONSIDERED BY THE LOWER AUTHORITIES. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. IN OUR OPINION, IT CANNOT BE CONSIDERED AS A PART OF THE COST OF ACQUISITION WHILE COMPUTING CAPITAL GAINS. IT IS ON LY APPORTION OF SALE CONSIDERATION. ACCORDINGLY WE ARE OF THE OPINION TH AT LOWER AUTHORITIES ARE JUSTIFIED IN DISALLOWING THE SAME. ITA NO. 1203/MDS./2016 :- 5 -: 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS P ARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 26 TH OCTOBER , 2016, AT CHENNAI. SD/ - SD/ - ( . ) ( G.PAVAN KUMAR ) / JUDICIAL MEMBER ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER #$ / CHENNAI %& / DATED: 26 TH OCTOBER , 2016 K S SUNDARAM &'(()*( +* / COPY TO: ( 1 . / APPELLANT 3. ( ,(- . / CIT(A) 5. */0 (1 / DR 2. / RESPONDENT 4. ( , / CIT 6. 02(3 / GF