DCIT, CHENNAI V. Sri. Lalithkumar Tulsiyan, CHENNAI

ITA 1395/CHNY/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64313 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-09-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 13-09-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 22-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K E B RENGARAJAN JUNIOR
• Assessee Lawyers: B RAMAKRISHNAN
• Keywords: Gift

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI BEFORE DR. O.K. NARAYANAN, VICE-PRESIDENT AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER I.T.A.NO. 1395/MDS/2012 ASSESSMENT YEAR : 2006-07 THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-IV(3), CHENNAI-34. VS. SRI LALITHKUMAR TULSIYAN, NO.3, APEX PLAZA, 1 ST FLOOR, NUNGAMBAKKAM HIGH ROAD, CHENNAI 34. PAN ABRPT3382L (APPELLANT) (RESPONDENT) I.T.A.NO. 1396/MDS/2012 ASSESSMENT YEAR : 2006-07 THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-IV(3), CHENNAI-34. VS. SRI SANJAY TULSIYAN, NO.602-A, KESAVA DUGAR NO.1, EAST AVENUE, KESAVA PERUMALPURAM, CHENNAI 28. PAN ABTPT8316J (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K.E.B. RENGARAJAN, JUNIOR STANDING COUNSEL RESPONDENT BY : SHRI B. RAMAKRISHNAN DATE OF HEARING : 13 TH SEPTEMBER, 2012 DATE OF PRONOUNCEMENT : 20 TH SEPTEMBER, 2012 ITA 1395 & 1396/12 :- 2 -: O R D E R PER DR. O.K. NARAYANAN, VICE-PRESIDENT THESE TWO APPEALS ARE FILED BY THE REVENUE. THE RE LEVANT ASSESSMENT YEAR IS 2006-07. THE APPEALS ARE DIRECT ED AGAINST THE ORDERS OF THE COMMISSIONER OF INCOME-TAX(APPEAL S)-I AT CHENNAI, BOTH DATED 24.4.2012. THE APPEALS ARISE O UT OF THE ASSESSMENTS COMPLETED UNDER SEC.143(3), READ WITH S EC.153A OF THE INCOME-TAX ACT, 1961. 2. THE ASSESSEES ARE BROTHERS. THESE TWO BROTHERS ALONG WITH OTHER BROTHER HAD EXCHANGED CERTAIN ASSETS IN THE F ORM OF SHARES ON THE BASIS OF MUTUAL AGREEMENT. THE ASSESSING OF FICER TREATED THIS EXCHANGING OF ASSETS IN THE FORM OF SHARES AS INDEPENDENT TRANSACTION BETWEEN THE BROTHERS RELATING TO SALE O F SHARES. ON THAT GROUND, THE ASSESSING OFFICER COMPUTED THE CAP ITAL GAINS AND LEVIED TAX ON THAT. WHEN THESE MATTERS WERE TAKEN BEFORE THE COMMISSIONER OF INCOME-TAX(APPEALS), HE FOUND THAT THE TRANSACTIONS WERE MADE BETWEEN THE BROTHERS OF THE SAME FAMILY SO AS TO SETTLE THE INTERESTS OF THE BUSINESS AMONG THEMSELVES. HE HELD THAT THERE IS NO NEED FOR DOCUMENTARY EVIDE NCE IN RESPECT ITA 1395 & 1396/12 :- 3 -: OF SUCH TRANSACTIONS AND THERE IS NO GROUND TO SUSP ECT THE BONA FIDES OF THE TRANSFERS. ACCORDINGLY, HE HELD THAT THERE IS NO TRANSFER IN THESE CASES AS ENVISAGED UNDER SEC.2(47 ) AND HE DELETED THE CAPITAL GAINS TAXATION. 3. THE REVENUE IS AGGRIEVED AND THEREFORE, THESE AP PEALS BEFORE US. THE MAIN ARGUMENT OF THE REVENUE IS THA T THERE ARE NO EVIDENCES WHATSOEVER TO SUPPORT THAT THE TRANSFE RS OF SHARES BY THE ASSESSEES WERE MADE AS A RESULT OF FAMILY SE TTLEMENT OF THEIR BUSINESS INTERESTS. 4. WE HEARD BOTH SIDES IN DETAIL. IT IS TO BE SEEN THAT THE SHARES ACTUALLY BELONG TO THE FAMILY BUSINESS OF TH E ASSESSEE- BROTHERS. IT IS TO BE FURTHER SEEN THAT THE WORTH OF SHARES TRANSFERRED BY THE ASSESSEES ARE NOT IN EQUAL TERMS . THAT ITSELF SHOWS THAT THE TRANSACTIONS WERE NOT IN THE NATURE OF SALE OF SHARES TO OTHERS. IT IS ONLY A FAMILY SETTLEMENT. AS THE TRANSFERS WERE NOT MADE FOR ANY EXPLICIT CONSIDERATION, IT CA NNOT BE TREATED AS A TRANSFER. THIS IS BECAUSE, THE TRANSACTIONS W ERE MADE AS A RESULT OF BUSINESS ARRANGEMENT. IF AT ALL ANY EXCE SS IS THERE, THE SAME IS NOT TAXABLE, AS GIFTS MADE BETWEEN THE FAMI LY MEMBERS PRESCRIBED IN THE ACT ARE NOT LIABLE FOR TAXATION. ITA 1395 & 1396/12 :- 4 -: 5. IN THE FACTS AND CIRCUMSTANCES OF THESE CASES, W E FIND THAT THE COMMISSIONER OF INCOME-TAX(APPEALS) HAS CORRECT LY APPRECIATED THE FACTS OF THE CASES AND DECIDED THE MATTER IN ACCORDANCE WITH LAW. 6. IN RESULT, THESE TWO APPEALS FILED BY THE REVENU E ARE DISMISSED. ORDER PRONOUNCED ON THURSDAY, THE 20 TH OF SEPTEMBER, 2012 AT CHENNAI. SD/- SD/- (CHALA NAGENDRA PRASAD) (DR.O.K.NARAY ANAN) JUDICIAL MEMBER VICE-PRESIDENT CHENNAI, DATED THE 20 TH SEPTEMBER, 2012 MPO* COPY TO: 1. ASSESSEE 2. DEPARTMENT 3. CIT 4. CIT(A) 5. DR 6. GF.