ITO, CHENNAI V. T.Vedagiriswara Rao, CHENNAI

ITA 1431/CHNY/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8257 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-01-2016
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 09-12-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 12-06-2015
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN
• Assessee Lawyers: D ANAND

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.1431/MDS/2015 / ASSESSMENT YEAR : 2007-08 THE INCOME TAX OFFICER NON-CORPORATE WARD 6(4) CHENNAI VS. SHRI T VEDAGIRISWARA RAO NO.19, CHINNATHAMBI MUDALI STREET CHENNAI 600 079 [PAN AABPR 7055 F ] ( %& / APPELLANT) ( '(%& /RESPONDENT) / APPELLANT BY : SHRI P RADHAKRISHNAN, JCIT /RESPONDENT BY : SHRI D ANAND, ADVOCATE / DATE OF HEARING : 09 - 12 - 2015 ! / DATE OF PRONOUNCEMENT : 07 - 01 - 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)-5, CHENNA I, DATED 16.3.2015 AND PERTAINS TO ASSESSMENT YEAR 2007-08. 2. SHRI P RADHAKRISHNAN, LD. DEPARTMENTAL REPRESENTATI VE SUBMITTED THAT THE ASSESSEE BORROWED LOAN OF ` 21,29,935/- FROM HIS MOTHER SMT SEETHARAMMAMA AND HIS FATHER SHRI T VENK ATESWARALU. ITA NO.1431/15 :- 2 -: THE ASSESSEES MOTHER EXPIRED ON 6.10.2004 AND HI S FATHER EXPIRED BEFORE THAT. AFTER THE DEATH OF PARENTS OF THE AS SESSEE, THE ASSESSING OFFICER TREATED THE OUTSTANDING LOAN AS INCOME U/S 41(1) OF THE ACT. ACCORDING TO THE LD. DR, AFTER THE DEMISE OF THE PA RENTS OF THE ASSESSEE, THE LIABILITY TO REPAY THE LOAN CEASED TO EXIST, THEREFORE, THE ASSESSING OFFICER HAS RIGHTLY ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE U/S 41(1) OF THE ACT. 3. ON THE CONTRARY, SHRI D. ANAND, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ADMITTEDLY, THE ASSESSEE BORROWED M ONEY FROM HIS MOTHER AND FATHER. IN FACT, THE ASSESSEES MOTHER EXPIRED ON 6.10.2004 AND HIS FATHER EXPIRED BEFORE THAT. THE ASSESSEE IS THE ONLY LEGAL HEIR OF HIS PARENTS. AFTER THE DEATH OF THE MOTHER AND FATHER, HE SUCCEEDED THE ESTATE OF HIS MOTHER AND F ATHER. THEREFORE, THE ASSESSEE BECOMES OWNER OF THE OUTSTANDING AMOU NT HENCE, IT IS NOT AN INCOME U/S 41(1) OF THE ACT. THE CIT(A), A FTER CONSIDERING THE SUCCESSION OF THE ASSESSEE TO THE ESTATE OF HIS P ARENTS, FOUND THAT SEC. 41 HAS NO APPLICATION IN THIS CASE AND ACCORDI NGLY, DELETED THE ADDITION OF ` 21,29,935/-. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEE IS THE ONLY LEGAL HEIR OF HIS PARENTS . THE ASSESSEE ITA NO.1431/15 :- 3 -: ADMITTEDLY, BORROWED MONEY FROM HIS PARENTS. ON DE ATH OF THE PARENTS OF THE ASSESSEE, THE ASSESSEE WILL NATURA LLY SUCCEED TO THE ESTATE OF HIS PARENTS. THEREFORE, THE OUTSTANDING DEBT WAS SUCCEEDED BY THE ASSESSEE UNDER THE HINDU SUCCESSION ACT, HE NCE, IT IS NOT A REMISSION OF LIABILITY AS CLAIMED BY THE ASSESSING OFFICER. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT ONC E THE ASSESSEE SUCCEEDED TO THE ESTATE OF HIS PARENTS, THERE CANNO T BE ANY ADDITION U/S 41(1)OF THE ACT. ACCORDINGLY, THE ORDER OF THE CIT(A) IS CONFIRMED. 5. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH JANUARY, 2016, AT CHENNAI. SD/- SD/- ( . ! ) (A. MOHAN ALANKAMONY) ' / ACCOUNTANT MEMBER ( . . . ' ) (N.R.S. GANESAN) / JUDICIAL MEMBER #$ / CHENNAI %& / DATED: 07 TH JANUARY, 2016 RD &' ()*) / COPY TO: 1 . / APPELLANT 4. + / CIT 2. / RESPONDENT 5. ),- . / DR 3. +/' / CIT(A) 6. -01 / GF