ACIT, Trichy V. A.Kokila, Trichy

ITA 133/CHNY/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 7850 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 1 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-03-2016
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 07-01-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 16-01-2015
• Court: TRIBUNAL
• Department Lawyers: B LAKSHMINARAYANAN
• Assessee Lawyers: N DEVANATHAN; A S SRIRAMAN ADVOCATRES
• Keywords: Corroborative evidences

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI . . . , . ! , ' # $ [ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ] ./ I.T.A.NO.133/MDS/2015 / ASSESSMENT YEAR : 2009-10 THE ASSTT. COMMISSIONER OF INCOME-TAX CIRCLE 3(1) TRICHY VS. SMT. A. KOKILA 48, SRI SARVA SAKTHI MARIAMMAN KOVIL STREET SOUTH DHARANALLUR TRICHY 620 008 [PAN AJXPK 6979 L] ( %& / APPELLANT) ( '(%& /RESPONDENT) / APPELLANT BY : SHRI B. LAKSHMINARAYANAN, JCIT /RESPONDENT BY : SHRI N. DEVANATHAN AND SHRI A.S. SRIRAMAN, ADVOCATRES / DATE OF HEARING : 07 - 01 - 2016 ! / DATE OF PRONOUNCEMENT : 04 - 0 3 - 2016 / O R D E R PER N.R.S.GANESAN, JUDICIAL MEMBER THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS), TIRUCHIR APALLI, DATED 31.10.2014 AND PERTAINS TO ASSESSMENT YEAR 2009-10. 2. THE FIRST ISSUE ARISES FOR CONSIDERATION OF ADDITIO N OF ` 11,40,000/- BEING THE BROKERAGE PAID TO SHRI A. GOP ALAKRISHNAN. ITA NO. 133/15 :- 2 -: 3. SHRI B. LAKSHMINARAYANAN, LD. DEPARTMENTAL REPRESEN TATIVE, SUBMITTED THAT THE ASSESSEE CLAIMS THAT A SUM OF ` 11,40,000/- BEING 3% OF THE SALE CONSIDERATION WAS PAID TO HER BROTHE R SHRI A. GOPALAKRISHNAN AS COMMISSION. HOWEVER, THE SAID S HRI A. GOPALAKRISHNAN DENIED THE RECEIPT OF BROKERAGE. RE FERRING TO THE ASSESSMENT ORDER, THE LD. DR POINTED OUT THAT SHRI A. GOPALAKRISHNAN CLAIMED THAT A SUM OF ` 15 LAKHS WAS RECEIVED FROM ONE SHRI P. MUTHIAH, WHO PURCHASED THE LAND FROM THE ASSESSEE. AFTER RECEIVING ` 15 LAKHS, SHRI A. GOPALAKRISHNAN RETURNED THE SAME TO THE ASSESSEE. THEREFORE, THE CLAIM OF ` 11,40,000/- TOWARDS BROKERAGE WAS DISALLOWED BY THE ASSESSING OFFICER. HOWEVER, THE CIT(A) FOUND THAT THE ASSESSING OFFICER HAS NOT BROUGHT ON RECORD ANY SUPPORTING EVIDENCE FOR DISALLOWING THE CLAIM OF THE ASSESSEE . ACCORDING TO THE LD. DR, IN THE ABSENCE OF ANY MATERIAL TO EVIDENCE THE PAYMENT OF ` 11,40,000/- BEING THE COMMISSION PAID TO SHRI A. GO PALAKRISHNAN, THE CIT(A) OUGHT NOT TO HAVE ALLOWED THE CLAIM OF THE ASSESSEE. 4. ON THE CONTRARY, SHRI N. DEVANATHAN, LD. COUNSEL FO R THE ASSESSEE SUBMITTED THAT THE ASSESSEE PAID ` 11,40,000/- BY WAY OF CHEQUE. IN FACT, THE CHEQUE WAS PAID BY SHRI P. MU THIAH BY DEBITING THE ACCOUNT OF THE ASSESSEE. ACCORDING TO THE LD. COUNSEL, THE SAID SHRI A. GOPALAKRISHNAN RECEIVED ` 15 LAKHS FROM SHRI P. MUTHIAH, THE PURCHASER OF THE LAND. ACCORDING TO THE LD. COUNSE L, SHRI A. ITA NO. 133/15 :- 3 -: GOPALAKRISHNAN ADMITTED THAT HE RECEIVED ` 15 LAKHS ON SALE OF THE LAND ON BEHALF OF HIS SISTER, SMT. A KOKILA. HE CL AIMS THAT A SUM OF ` 15 LAKHS WAS WITHDRAWN ON 12.1.2008 FROM HIS ACCOUN T MAINTAINED WITH STATE BANK OF INDIA AND THE SAME WAS PAID TO THE ASSESSEE. WHAT WAS EVIDENCED IS WITHDRAWAL OF THE MONEY AND T HE PAYMENT OF MONEY IS NOT EVIDENCED. SHRI A. GOPALAKRISHNAN ADM ITS THAT HE RECEIVED MONEY ON BEHALF OF THE ASSESSEE. IN THE ABSENCE OF ANY EVIDENCE FOR REPAYMENT, ACCORDING TO THE LD. COUNSE L, THE CIT(A) HAS RIGHTLY FOUND THAT THERE WAS NO EVIDENCE TO SHOW TH AT SHRI A. GOPALAKRISHNAN RETURNED THE MONEY TO THE ASSESSEE. THEREFORE, IT IS NOT A CASE OF SUBSTANTIATING THE PAYMENT OF COMMISS ION, BUT IT IS A CASE OF ABSENCE OF EVIDENCE TO SUBSTANTIATE THE REP AYMENT SAID TO BE MADE BY SHRI A. GOPALAKRISHNAN TO THE ASSESSEE. T HEREFORE, ACCORDING TO THE LD. COUNSEL, ` 11,40,000/- HAS TO BE ALLOWED AS COMMISSION PAID TO SHRI A. GOPALAKRISHNAN ON SALE O F THE LAND TO SHRI P. MUTHIAH. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. AD MITTEDLY, THE ASSESSEE SOLD A PIECE OF LAND TO SHRI P. MUTHIAH. THE ASSESSEES BROTHER, SHRI A. GOPALAKRISHNAN RECEIVED PART OF SA LE CONSIDERATION FROM SHRI P. MUTHIAH. IN FACT, SHRI A. GOPALAKRISH NAN ADMITS THAT HE RECEIVED ` 15 LAKHS ON BEHALF OF HIS SISTER SMT. A.KOKILA, TH E PRESENT ITA NO. 133/15 :- 4 -: ASSESSEE. SHRI A. GOPALAKRISHNAN FURTHER CLAIMS B EFORE THE ASSESSING OFFICER BY A LETTER DATED 28.11.2011 THAT HE WITHDR AWN THE MONEY FROM STATE BANK OF INDIA AND RETURNED TO HIS SISTER SMT. A.KOKILA. IT IS NOT KNOWN WHY THE MONEY WAS WITHDRAWN FROM THE BANK FOR PAYING TO THE ASSESSEE. WHY THE MONEY WAS PAID IN CASH. IT CREATES A DOUBT. IN OTHER WORDS, WHETHER THE MONEY WAS ACTUALLY RETU RNED TO THE ASSESSEE OR NOT. THE ASSESSING OFFICER REFERRING T O AN AGREEMENT DATED 22.2.2008 SAYS THAT THE ASSESSEE HAS RECEIVE D THE ABOVE SAID AMOUNT OF ` 15 LAKHS. THE FACT REMAINS THAT THE TOTAL SALE CONSIDERATION OF THE PROPERTY WAS ` 3.80 CRORES AND THE MONEY WAS PAID BY SHRI P. MUTHIAH TO THE ASSESSEE THROUGH S HRI A. GOPALAKRISHNAN. IN THOSE CIRCUMSTANCES, IT CANNOT BE SAID THAT THE MONEY SAID TO BE RETURNED BY SHRI A. GOPALAKRISHNAN WAS THE VERY SAME AMOUNT OF ` 15 LAKHS SAID TO BE RECEIVED ON 12.1.2008. MOREOVER, THE MONEY WAS WITHDRAWN FROM THE BANK ON 12.1.2008. THE AGREEMENT WAS DATED 22.2.2008. IF THE MONEY WA S ACTUALLY RETURNED ON 12.1.2008, SHRI A. GOPALAKRISHNAN MIGHT HAVE OBTAINED THE ACKNOWLEDGEMENT ON 12.1.2008 ITSELF. THE FACT THAT THE AGREEMENT WAS EXECUTED ON 22.2.2008 SHOWS THAT THE MONEY RETURNED ON 22.8.2008 MAY NOT BE THAT AMOUNT WHICH WAS WITHD RAWN BY SHRI A. GOPALAKRISHNAN ON 12.1.2008. THEREFORE, THIS TRIB UNAL IS OF THE CONSIDERED OPINION THAT THERE IS NO MATERIAL ON REC ORD TO SUGGEST THAT ITA NO. 133/15 :- 5 -: SHRI A. GOPALAKRISHNAN RETURNED TO THE ASSESSEE TH E MONEY WHICH WAS SAID TO BE WITHDRAWN ON 12.1.2008. IN THE ABSENCE OF ANY EVIDENCE FOR RETURNING THE MONEY, THIS TRIBUNAL IS OF THE C ONSIDERED OPINION THAT THE CIT(A) HAS RIGHTLY FOUND THAT THE ASSESSE E HAS PAID ` 11,40,000/- AS BROKERAGE FOR SALE OF THE LAND. IT I S CUSTOMARY IN THIS PART OF THE COUNTRY TO PAY 2 TO 3% OF THE SALE CONS IDERATION AS COMMISSION FOR SALE OF THE LAND. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE CIT(A) HAS RIGHTLY ALLO WED THE CLAIM OF THE ASSESSEE. THIS TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE CIT(A). ACCORDINGLY, THE SAME IS CONF IRMED. 6. THE NEXT GROUND IS WITH REGARD TO ADDITION OF ` 34,32,692/- BEING THE AMOUNT PAID TO CONCUBINE AND LEGAL HEIRS OF THE CONCUBINE. 7. SHRI B. LAKSHMINARAYANAN, LD. DR SUBMITTED THAT THE ASSESSEE CLAIMED BEFORE THE ASSESSING OFFICER THAT SHE PAID A SUM OF ` 34,32,692/- FROM AND OUT OF THE SALE CONSIDERATION OF THE LAND TO CONCUBINE OF THE ASSESSEES HUSBAND. THE ASSESSE E CLAIMS THAT THERE WAS AN ORDER OF THE DISTRICT COURT, TRICHY, IN O.S. NO.133 OF 2007 DATED 15.5.2008 AND A COMPROMISE WAS ENTERED INTO ON THE SUIT FILED BY SMT. SAGAYAM. ACCORDING TO THE LD. DR, THE ASSESSEE FU RTHER CLAIMS THAT IN FURTHERANCE TO THE COMPROMISE, A COMPROMISE DECREE WAS ALSO PASSED BY THE DISTRICT COURT AND THE ASSESSEE WAS DIRECTE D TO PAY ` 35 LAKHS ITA NO. 133/15 :- 6 -: FOR RELEASING THEIR RIGHT OVER THE PROPERTY SOLD BY THE ASSESSEE. PURSUANT TO THE ORDER OF THE COURT, THE ASSESSEE H AS PAID A SUM OF ` 35 LAKHS. THE ASSESSEE CLAIMS THE SAME WAS PAID B Y OVERRIDING TITLE. ACCORDING TO THE LD. DR, CONCUBINE HAS NO RIGHT OVE R THE PROPERTY, THEREFORE, ANY AMOUNT PAID CANNOT BE ALLOWED AS DED UCTION WHILE COMPUTING THE CAPITAL GAIN ON SALE OF THE PROPERTY. THE ASSESSING OFFICER FURTHER FOUND THAT IN RESPECT OF ITEM NO.1 OF THE PROPERTY, PROPORTIONATE AMOUNT OF ` 67,308/- WAS PAID WHICH WAS RIGHTLY ALLOWED BY THE ASSESSING OFFICER. THEREFORE, THE C IT(A) IS NOT JUSTIFIED IN ALLOWING THE CLAIM OF THE ASSESSEE. 8. ON THE CONTRARY, SHRI N. DEVANATHAN, LD. COUNSEL FO R THE ASSESSEE SUBMITTED THAT THERE WAS A DISPUTE OVER TH E PROPERTY AND THE CONCUBINE OF ASSESSEES HUSBAND SMT. SAGAYAM F ILED A SUIT BEFORE THE DISTRICT COURT, TRICHY, CLAIMING HER RIGHT OVER THE PROPERTY. IN ORDER TO HAVE PEACE AND SETTLE THE MATTER AMICABLY, THE ASSESSEE ENTERED INTO A COMPROMISE WITH SMT. SAGAYAM AND AGR EED TO PAY A SUM OF ` 35 LAKHS. THE DISTRICT COURT VALUED THE PROPERTY AT ` 78 LAKHS. AS PER THE COMPROMISE ENTERED INTO, THE AS SESSEE HAS TO PAY ` 35 LAKHS TO SMT.SAGAYAM AND HER CHILDREN. THE COMP ROMISE ENTERED INTO BETWEEN THE ASSESSEE AND SMT. SAGAYAM WAS ACC EPTED BY THE DISTRICT COURT AND A COMPROMISE DECREE WAS ALSO PAS SED. THEREFORE, IN VIEW OF THE COMPROMISE DECREE PASSED BY THE DIST RICT COURT, TRICHY, ITA NO. 133/15 :- 7 -: THE ASSESSEE HAS TO PAY A SUM OF ` 35 LAKHS TO SMT. SAGAYAM AND HER CHILDREN. SINCE THERE WAS AN ORDER OF THE COMPETEN T CIVIL COURT, ACCORDING TO THE LD. COUNSEL, THE PAYMENT OF ` 35 LAKHS IS BY OVERRIDING TITLE. THEREFORE, THE OBSERVATION OF TH E ASSESSING OFFICER THAT THE DECREE IS ONLY IN RESPECT OF ITEM NO.1 OF THE PROPERTY MENTIONED IN THE SUIT IS NOT CORRECT. THE ASSESSIN G OFFICER HAS CONVENIENTLY OMITTED TO REFER TO THE QUANTUM OF THE AMOUNT MENTIONED IN THE COMPROMISE DECREE. WHILE VALUING THE ENTIRE PROPERTY AT ` 78 LAKHS, THE DISTRICT COURT ACCEPTED THE PAYMENT OF ` 35 LAKHS TO SMT. SAGAYAM AND HER CHILDREN. SINCE THE ASSESSING OFFI CER ACCEPTED THE AMOUNT OF ` 67,308/-, THE CIT(A) ALLOWED THE BALANCE AMOUNT OF ` 34,32,692/-. THEREFORE, THE CIT(A) HAS RIGHTLY ALL OWED THE CLAIM OF THE ASSESSEE. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. AD MITTEDLY, THE ASSESSEE SOLD A PIECE OF IMMOVABLE PROPERTY FOR A S UM OF ` 3.80 CORES. ONE SMT. SAGAYAM, CLAIMING HERSELF TO BE CONCUBINE OF ASSESSEES HUSBAND, FILED A CIVIL SUIT BEFORE THE DISTRICT COU RT IN O.S.NO.133 OF 2007. THE ASSESSEE HAS FILED THE COPY OF THE COMP ROMISE ENTERED INTO BETWEEN THE PARTIES. AS PER THE TERMS, THE A SSESSEE HAS TO PAY A SUM OF ` 35 LAKHS TO SMT. SAGAYAM AND HER CHILDREN. THE DI STRICT COURT ACCEPTED THE TERMS ENTERED INTO BETWEEN THE P ARTIES AND A ITA NO. 133/15 :- 8 -: COMPROMISE DECREE WAS ALSO PASSED. THEREFORE, THE COMPROMISE DECREE PASSED BY THE COURT IS BINDING ON THE PARTIE S. WHILE DISPOSING OFF THE PROPERTY, THE ASSESSEE HAS TO NECESSARILY IMPLEMENT THE ORDER OF THE DISTRICT COURT. UNDER THE HINDU SUCCESSION A CT, A CONCUBINE MAY NOT HAVE RIGHT OVER THE HUSBANDS PROPERTY. HOWEVE R, IN THE CASE BEFORE US, THERE IS AN ORDER OF THE COMPETENT CIVIL COURT WHERE THE DECREE WAS PASSED. THEREFORE, THE ASSESSEE IS EX PECTED TO COMPLY WITH THE ORDER OF THE CIVIL COURT. THEREFORE, THI S TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE PAYMENT MADE TO SMT. SA GAYAM AND HER CHILDREN IS BY OVERRIDING TITLE ON THE PROPERTY. T HE PAYMENT WAS IN FACT MADE FOR RELEASING THEIR RIGHT OVER THE PROPERTY SO LD BY THE ASSESSEE. THE ASSESSING OFFICER HAS ACCEPTED THE PAYMENT OF ` 67,308/-. THE ASSESSING OFFICER FOUND THAT THE DECREE REFERS ONLY ITEM NO.1 OF THE PROPERTY. AS RIGHTLY SUBMITTED BY THE LD. COUNSEL, THE TOTAL AMOUNT TO BE PAID BY THE ASSESSEE IS ` 35 LAKHS. THE DISTRICT COURT VALUED THE PROPERTY AT ` 78 LAKHS. THEREFORE, THIS TRIBUNAL IS OF THE CON SIDERED OPINION THAT THE AMOUNT OF ` 35 LAKHS PAID BY THE ASSESSEE IS BY OVERRIDING TITLE, THEREFORE, THE CIT(A) HAS RIGHTLY FOUND THAT THE ENTIRE SUM OF ` 35 LAKHS HAS TO BE ALLOWED. SINCE THE ASSESSING O FFICER HAS ALLOWED ` 67,308/-, THE CIT(A) DIRECTED THE ASSESSING OFFICE R TO ALLOW ` 34,43,692/- WHILE COMPUTING THE CAPITAL GAIN. IN VIEW OF THE ABOVE, ITA NO. 133/15 :- 9 -: WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORD ER OF THE CIT(A). ACCORDINGLY, THE SAME IS CONFIRMED. 10. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS D ISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 4 TH MARCH, 2016, AT CHENNAI. SD/- SD/- ( . ! ) (A. MOHAN ALANKAMONY) ' / ACCOUNTANT MEMBER ( . . . ' ) (N.R.S. GANESAN) / JUDICIAL MEMBER #$ / CHENNAI %& / DATED: 4 TH MARCH, 2016 RD &' ()*) / COPY TO: 1 . / APPELLANT 4. + / CIT 2. / RESPONDENT 5. ),- . / DR 3. +/' / CIT(A) 6. -01 / GF