Veeramangal Prashanth Priya, CHENNAI V. DCIT Non Corporate Circle 10(1), CHENNAI

ITA 1283/CHNY/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 2186 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 7 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-12-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 17-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: D ANAND
• Keywords: Diversion of income; Cost of acquisition; Fair market value; Capital Gains

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , A BENCH, CHENNAI [ , , BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ I.T.A.NO.1283/CHNY/2018 ( [ [ / ASSESSMENT YEAR: 2012-13) / APPELLANT BY : SHRI D. ANAND, ADVOCATE / RESPONDENT BY : SHRI SURESH PERIASAMY, JCIT /DATE OF HEARING : 17.11.2020 /DATE OF PRONOUNCEMENT : 01.12.2020 / O R D E R PER S. JAYARAMAN, ACCOUNTANT MEMBER: THE ASSESSEE FILED THIS APPEAL AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-12, CHENNAI IN ITA NO.79/CIT(A)-12/2015-16 DATED 20.02.2018 FOR THE ASSESSMENT YEAR 2012-13. SMT. VEERAMANGAL PRASHANTH PRIYA, NEW NO.222, OLD NO.867, FLAT NO.2A, K.G.S. VRUDHI, POONAMALLEE HIGH ROAD, KILPAUK, CHENNAI 600 010. VS THE DCIT, NON-CORPORATE CIRCLE 10(1), CHENNAI 34. PAN: BCWPP3003M ( /APPELLANT) ( /RESPONDENT) 2 ITA NO.1283/CHNY/2018 2. SMT. VEERAMANGAL PRASANTH PRIYA, THE ASSESSEE ALONG WITH 14 OTHER CO-OWNERS HAD SOLD THE PROPERTY,POPULARLY KNOWN AS HOTEL DASAPRAKASH LOCATED AT POONAMALLEE HIGH ROAD, FOR A TOTAL CONSIDERATION OF RS.165 CRORES. TOWARDS HER PROPORTIONATE SHARE IN THE SALE CONSIDERATION AT 4.14%, SHE HAS COMPUTED THE LONG TERM CAPITAL GAINS, CLAIMED , INTER ALIA, THE EXPENSES ADJUSTED BY THE COURT APPOINTED RECEIVER AGAINST THE SALE PROCEEDS AS DIVERSION OF INCOME BY OVERRIDING TITLE OR IN THE ALTERNATIVE EXPENSES INCURRED IN RELATION TO THE SALE.THE ASSESSING OFFICER HAD DISALLOWED THE CLAIM. FURTHER, THE ASSESSING OFFICER WHILE COMPUTING THE LONG TERM CAPITAL GAINS HAD TAKEN THE GUIDELINE VALUE OF THE LAND AS ON 1.4.1981 TO BE THE FAIR MARKET VALUE AS ON THAT DATE AND CONSEQUENTLY COMPUTED/RESTRICTED THE INDEXED COST/COST OF ACQUISITION. AGAINST SUCH ACTION, THE ASSESSEE FILED AN APPEAL AND THE LD CIT(A) DISMISSED IT. AGGRIEVED AGAINST THE ORDER OF THE LD.CIT(A), THE ASSESSEE FILED THIS APPEAL. 3. THE CASE WAS HEARD THROUGH VIDEO CONFERENCING. THE LD.AR SUBMITTED THE ISSUES ON WHICH THE ASSESSEE IS ON APPEAL, HAS BEEN REMITTED BACK TO THE AO BY THIS TRIBUNAL IN THE CO-OWNERS CASES IN ITA NOS.1282 & 1284/CHNY/2018 DATED 29.11.2018 AND HENCE INVITING OUR ATTENTION TO RELEVANT PORTIONS OF THAT ORDER PLEADED THAT ON SIMILAR 3 ITA NO.1283/CHNY/2018 DIRECTION, THE ISSUES IN THE ASSESSEES CASE MAY ALSO BE REMITTED BACK TO THE AO. THE LD.DR HAS NOT OBJECTED TO SUCH PLEA. 4. WE HEARD THE RIVAL SUBMISSIONS. IN THE CO-OWNERS CASES, THIS TRIBUNAL HAS HELD AS UNDER:- 4. WE HEARD THE RIVAL SUBMISSIONS. IT IS CLEAR FROM THE ORDERS OF THE LOWER AUTHORITIES THAT THEY HAVE NOT EXAMINED AS TO WHETHER THE IMPUGNED EXPENDITURE CLAIMED BY THE ASSESSEES, AROSE OUT OF A OVER- RIDING TITLE THERE UNDER. IF THE ASSESSEES FULL OWNERSHIP OF A UNQUALIFIED RIGHT TO ENJOY THE PROPERTY GETS RESTRICTED IN THE PARENTAL DEED, THEN IT WOULD CREATE A OVER-RIDING TITLE ON THE BENEFICIARIES. THESE ASPECTS REQUIRE DETAILED EXAMINATION AND HENCE WE DEEM IT FIT TO REMIT THIS ISSUE BACK TO THE AO FOR A FRESH EXAMINATION. THE ASSESSEE SHALL LAY RELEVANT MATERIALS IN SUPPORT OF ITS CONTENTION BEFORE THE AO AND COMPLY WITH THE REQUIREMENTS OF THE AO IN ACCORDANCE WITH LAW. THE AO SHALL FURNISH ADEQUATE OPPORTUNITY TO THE ASSESSSEE AND DECIDE THE MATTER IN ACCORDANCE WITH LAW. 5. WITH REGARD TO THE COST OF ACQUISITION AS ON 01.04.1981, VARIOUS FACTORS HAVE TO BE EVALUATED FOR DETERMINING THE FAIR MARKET VALUE AS ON A PARTICULAR DATE VIZ., LOCATION OF LAND, ITS POTENTIALITY, SURROUNDINGS, RATE OF THE ADJACENT LAND DETERMINED BY THE COURTS, IF ANY, THE CONDITION OF THE LANDS, THE EXPENDITURE REQUIRED TO DEVELOP THE LAND, THE LIMITATIONS, IF ANY VIZ., LEGAL DISPUTES AS HAS HAPPENED IN THIS CASE, EVICTION OF UNAUTHORIZED PERSONS ETC. IN THE VERY NATURE OF THINGS, THE PRICES ARE BOUND TO VARY ACCORDING TO THE CONTEMPORANEOUS ECONOMIC ENVIRONMENT, FROM LAND TO LAND, DEPENDS UPON BUYER TO BUYER AND SELLER TO SELLER WHICH INCLUDES EVEN THE REASONS FOR WHICH THE SELLERS ARE SELLING THE LANDS, THE GUIDELINE VALUE ETC. THUS, THE AO CANNOT DETERMINE THE FAIR MARKET VALUE AS ON 01.04.1981 SOLELY BASED ON THE GUIDELINE VALUE. IN THE FACTS AND CIRCUMSTANCES, WE DEEM IT FIT TO REMIT THIS ISSUE BACK TO THE AO FOR A FRESH EXAMINATION. THE ASSESSEE SHALL LAY RELEVANT MATERIALS IN SUPPORT OF ITS CONTENTION BEFORE THE AO AND COMPLY WITH THE REQUIREMENTS OF THE AO IN ACCORDANCE WITH LAW. THE 4 ITA NO.1283/CHNY/2018 AO IS FREE TO CONDUCT APPROPRIATE ENQUIRY AS DEEMED FIT, BUT HE SHALL FURNISH ADEQUATE OPPORTUNITY TO THE ASSESSSEE ON THE MATERIAL ETC TO BE USED AGAINST IT AND DECIDE THE MATTER IN ACCORDANCE WITH LAW. SINCE THE PROPERTY AND THE ISSUES ARE COMMON, FOLLOWING THE ABOVE ORDERS, WE REMIT THESE ISSUES BACK TO THE AO WITH SIMILAR DIRECTIONS TO THE ASSESSEE AS WELL AS THE AO ON THE RESPECTIVE ISSUES. 5. IN THE RESULT, THE ASSESSEES APPEAL IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 1 ST DECEMBER, 2020 AT CHENNAI. SD/- SD/- /CHENNAI, /DATED 1 ST DECEMBER, 2020 RSR /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. ( ) /CIT(A) 4. /CIT 5. /DR 6. [ /GF ( ) (V. DURGA RAO) /JUDICIAL MEMBER ( ) (S. JAYARAMAN) /ACCOUNTANT MEMBER