Smt. Kalyani Dixit, Agra V. DCIT-CC, Agra

ITA 155/AGR/2012

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 0465 (ITAT-AGRA)
• Duration Of Justice: 7 year(s) 28 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 16-05-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 19-06-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 18-04-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KK MISHRA
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Gift; Corroborative evidences
• Section: 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO.155/AGRA/2012 ASSESSMENT YEAR: 2007-08 SMT. KALYANI DIXIT, VS. DY. COMMISSIONER OF INC OME TAX, 406, BIBHAB EXOTICA, CENTRAL CIRCLE, AGRA. SURYA NAGAR, AGRA. (PAN : ACUPC 6044 Q). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI DEEPENDRA MOHAN, C.A. RESPONDENT BY : SHRI K.K. MISHRA, JR. D.R. DATE OF HEARING : 19.06.2013 DATE OF PRONOUNCEMENT : 28.06.2013 ORDER PER A.L. GEHLOT, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 28.09.2011 PASSED BY THE CIT(A)-I, AGRA FOR THE A.Y. 2007-08. 2. THE ASSESSEE HAS RAISED THE FOLLOWING EFFECTIVE GROUNDSOF APPEAL :- 1. BECAUSE THE LD. ASSESSING ORIFICE HAS ERRED IN LAW AND ON FACTS IN NOT CONSIDERING AN AMOUNT OF RS.16,00,000/- AS C OST OF ACQUISITION, THE SAME BEING AMOUNT INVESTED IN PROPERTY NO.14/19 4-A, MANDI SAYEED KHAN, AGRA BY THE ASSESSEES FATHER IN THE Y EAR 1991-92, WHILE 2 ITA NO.155/AGRA/2012 A.Y. 2007-08 MAKING COMPUTATION OF LONG TERM CAPITAL GAINS IN RE SPECT OF THE PROPERTY SOLD BY HER. 2. BECAUSE THE LD. CIT(A) HAS ERRED IN LAW AND ON F ACTS IN HOLDING THAT THE COST OF IMPROVEMENT SHOULD BE BORNE BY THE ASSESSEE HIMSELF AND NOT BY ANY OTHER PERSON AS PER THE DEFINITION O F THIS TERM PROVIDED IN SECTION 55(B)(2) OF THE INCOME TAX ACT, 1961. H E HAS COMPLETELY IGNORED THE FACT THAT THE COST OF IMPROVEMENT WAS I NCURRED BY NONE OTHER THAN THE ASSESSEES FATHER WHO HAD CONSTRUCTE D THE PROPERTY FOR HER AND THE ASSESSEE ENJOYED FULL BENEFICIAL RIGHTS OVER THE CONSTRUCTED PROPERTY. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAS SOLD HOUSE PROPERTY NO. 14/194-A, MANDI SAYEED KHAN, HARI PARWAT WARD, AGRA ON 10.05.2006 FOR A CONSIDERATION RS.3,00,000/-. THE PROPERTY WAS JOIN TLY OWED WITH HER SISTER SMT. SHIVANI CHATURVEDI, EACH HAVING 50% SHARE. THE DET AILS OF WORKING CAPITAL FILED BY THE ASSESSEE BEFORE THE A.O. IS REPRODUCED AS UN DER :- SALE CONSIDERATION (AS PER 50C) 50% SHARE RS.22 ,38,000 LESS: INDEXED COST OF LAND (70,000-27.09.90)-50% S HARE RS. 99,808 LESS: INDEXED COST OF IMPROVEMENT (16,00,000-1991- 92) 50% SHARE RS.20,86,432 LONG TERM CAPITAL GAIN RS. 51,760 INVESTED U/S 54 RS.11,00,000 TAXABLE LONG TEM CAPITAL GAIN NIL 4. IT WAS SUBMITTED BY THE ASSESSEE BEFORE THE A.O. THAT THE ASSESSEES FATHER HAS PURCHASED THE TERRACE RIGHT OF THE PROPERTY NO. 14/194-A IN THE YEAR 1991 IN THE NAME OF BOTH DAUGHTERS SMT. SHIVANI CHATURVEDI AND SMT. KALYANI CHATURVEDI. 3 ITA NO.155/AGRA/2012 A.Y. 2007-08 THE ASSESSEES FATHER LATE DR. B.M. CHATURVEDI WHO WAS A PROFESSOR IN DELHI UNIVERSITY HAD IN 1991-92 CONSTRUCTED TWO FLOORS OV ER THE SAID PROPERTY AND HAS SPENT ROUGHLY RS.16,00,000/- ON THE SAME. THE TOTA L CONSTRUCTED AREA WAS 665 SQ. MTR. WHICH WAS SOLD BY THE ASSESSEE IN A.Y. 2006-07 . THE ASSESSEE CLAIMED 50% SHARE OF RS.16,00,000/- ON ACCOUNT OF INDEXED COST OF IMPROVEMENT WHICH CAME TO RS.20,86,432/-. THE A.O. REJECTED THIS CLAIM OBSER VING THAT IN THE SALE DEED ITSELF IT WAS MENTIONED THAT PROPERTY WAS PURCHASED BY THE ASSESSEE AND HER SISTER OUT OF THEIR STRIDHAN, AND PART OF PROPERTY WAS SOLD IN EARLIER YEARS WHERE AS IN REPLY SHE IS CLAIMING THAT INVESTMENT WAS MADE BY HER FAT HER. THE A.O. FURTHER NOTED THAT IN A.Y. 1990-91RS.16,00,000/- WAS A SUBSTANTIA L AMOUNT AND LOOKING TO THE EXTENT OF INVESTMENT IN THE PROPERTY, IT DOES NOT S EEM TO BE CORRECT PARTICULARLY IN ABSENCE OF SUPPORTING EVIDENCE AND MORE IMPORTANTLY THAT GROUND FLOOR OF PROPERTY HAS ALREADY BEEN SOLD. THE A.O. FURTHER NOTICED TH AT IN A.Y. 1991-92 THE ASSESSEE AND HER SISTER WERE NOT HAVING ANY SOURCE OF INCOME , SO POSSIBILITY OF MAKING INVESTMENT TO THAT EXTENT IS ALSO NOT THERE. 5. THE CIT(A) CONFIRMED THE ORDER OF A.O. AS UNDER :- (PAGE NOS.13 & 14, PARAGRAPH NO.7.8) 4 ITA NO.155/AGRA/2012 A.Y. 2007-08 7.8 CONSIDERING THE ABOVE DENTITION OF THE COST OF IMPROVEMENT, I FIND THAT SUCH EXPENDITURE MEANS ALL EXPENDITURE OF A CAPITAL NATURE INCURRED IN MAKING ANY ADDITION OR ALTERATIONS TO T HE CAPITAL ASSET BY THE ASSESSEE AFTER IT BECAME HIS PROPERTY. AS IT I S CLEAR FROM THE FACT OF THE CASE THAT THE PROPERTY UNDER CONSIDERATION W AS PURCHASED BY THE APPELLANT ALONG WITH HER SISTER AND IT WAS ALSO REGISTERED IN JOINT NAME OF HERSELF AND HER SISTER. AFTER PURCHASE OF THIS PROPERTY, SOME HOUSE CONSTRUCTION WAS MADE ON THIS PROPERTY BUT TH IS HOUSE CONSTRUCTION WAS NOT MADE BY THE APPELLANT HERSELF BUT BY HER FATHER AND IT IS CLEARLY WRITTEN IN THE DEFINITION OF COST OF IMPROVEMENT THAT ONLY THAT AMOUNT OF IMPROVEMENT WOULD BE TAKEN TOWA RDS THE PROPERTY BELONGING TO AN ASSESSEE WHICH HAVE BEEN INCURRED B Y THE ASSESSEE HIMSELF NOT BY ANY OTHER PERSON. AS PER SECTION 48 OF THE INCOME TAX ACT, 1961, FOR COMPUTATION OF CAPITAL GAIN, ONLY CO ST OF IMPROVEMENT IS PROVIDED AS DEDUCTION OUT OF THE SALE CONSIDERAT ION BUT SUCH COST OF IMPROVEMENT SHOULD BE BORN BY THE ASSESSEE HIMSELF AND NOT BY ANY OTHER PERSON AS PER THE DEFINITION OF THIS TERM PRO VIDED IN SECTION 55(B)(2). THEREFORE, AS PER HER OWN ADMISSION OF T HE APPELLANT THAT THE EXPENDITURE ON COST OF IMPROVEMENT WAS BORNE BY HER FATHER AND NOT BY HER AND THEREFORE, FOLLOWING THE DEFINITION OF THE COST OF IMPROVEMENT AS PROVIDED IN SECTION 55(B)(2), IN MY CONSIDERED OPINION, NO DEDUCTION FOR SUCH COST OF IMPROVEMENT WOULD BE PROVIDED TO THE APPELLANT WHILE COMPUTING THE CAPIT AL GAIN ON SALE OF THIS PROPERTY BECAUSE THE EXPENDITURE ON COST OF IM PROVEMENT WAS NOT BORNE BY HER AND SUCH PROPERTY WAS NOT ACQUIRED BY HER BY WAY OF ANY WILL OR GIFT BECAUSE NO SUCH SUPPORTING EVIDENC E WAS PRODUCED BEFORE ME OR ANY SUCH CLAIM WAS MADE. THE PLAIN F ACT OF THIS CASE IS THAT THE APPELLANT PURCHASED A LAND IN JOINT NAME O F HERSELF AND HER SISTER AND THEREAFTER, A HOUSE PROPERTY WAS CONSTRU CTED ON THAT LAND IN WHICH NO AMOUNT WAS INCURRED BY HER BUT BY HER FATH ER, WHICH WAS CLAIMED BY HER AS DEDUCTION AS COST OF IMPROVEMENT OF SUCH PROPERTY WHILE COMPUTING CAPITAL GAIN ON SALE OF THIS PROPE RTY BUT DEDUCTION FOR SUCH COST OF IMPROVEMENT CANNOT BE PROVIDED TO HER FOLLOWING THE DEFINITION OF COST OF IMPROVEMENT AS GIVEN IN SECTI ON 55(B)(2). THEREFORE, I FIND THAT DECISION OF AO FOR NOT PROVI DING DEDUCTION FOR SUCH COST OF IMPROVEMENT AS DISCUSSED ABOVE, WHILE COMPUTING THE CAPITAL GAIN ON SALE OF THE DISPUTED PROPERTY IS CO RRECT. THEREFORE, I CONFIRM THE ADDITION OF RS.10,38,192/- MADE BY THE AO ON ACCOUNT OF 5 ITA NO.155/AGRA/2012 A.Y. 2007-08 LTCG COMPUTED ON SALE OF THIS PROPERTY. ACCORDINGL Y, GROUND NO.4 IS DISMISSED. 6. THE LD. AUTHORISED REPRESENTATIVE REITERATED THE SUBMISSIONS WHICH WERE MADE BEFORE THE REVENUE AUTHORITIES AND SUBMITTED T HAT THE ASSESSEE IS ENTITLED FOR BENEFIT OF COST IMPROVEMENT IN ACCORDANCE WITH SECT ION 55(2)(B)(III) OF THE ACT. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT RS .16,00,000/- WAS INVESTED BY THE ASSESSEES FATHER. THE PROPERTY WAS JOINTLY IN THE NAME OF THE ASSESSEE AND HER SISTER, THEREFORE, 50% COST OF IMPROVEMENT I.E. RS. 16,00,000/- IS ELIGIBLE IN ACCORDANCE WITH SECTION 49(1)(III)(A) WHICH PROVIDE S THAT WHERE CAPITAL ASSET BECAME THE PROPERTY OF THE ASSESSEE BY SUCCESSION, INHERITANCE OR DEVOLUTION. THE LD. AUTHORISED REPRESENTATIVE FURTHER SUBMITTED THA T THE ASSESSEE IS ENTITLED TO BENEFIT OF INDEXATION OF COST OF IMPROVEMENT IN ACC ORDANCE WITH SECTION 55(2)(B)(III) OF THE ACT. 7. THE LD. DEPARTMENTAL REPREHENSIVE, ON THE OTHER HAND, RELIED UPON THE ORDER OF CIT(A). 8. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PAR TIES AND RECORDS PERUSED. THE ADMITTED FACTS OF THE ISSUE ARE THAT RS.16,00,0 00/- WAS NOT INVESTED BY THE ASSESSEE, BUT IT WAS INVESTED BY THE ASSESSEES FAT HER. THE CIT(A) AFTER EXAMINING 6 ITA NO.155/AGRA/2012 A.Y. 2007-08 THE SALE DEED NOTICED THAT THE SOME CONSTRUCTION WA S MADE AFTER PURCHASE BUT IT WAS NOT STATED THAT HOW MUCH AMOUNT WAS SPENT IN CONSTR UCTION AND WHO MADE SUCH INVESTMENT BECAUSE NO SUPPORTING DOCUMENTARY EVIDEN CES WERE AVAILABLE TO FIND OUT THE AMOUNT OF INVESTMENT MADE IN CONSTRUCTION O F THE HOUSE AND AS PER THE FINDING OF THE A.O. IN THE YEAR 1991 THE ASSESSEE W AS MINOR AND DID NOT HAVE ANY SOURCE OF INCOME TO MAKE SUCH INVESTMENT. THE A.O. NOTED THAT AS PER SALE DEED THE PROPERTY WAS PURCHASED OUT OF THEIR STRIDHAN AN D NOT BY FATHER. AS FAR AS WHO HAS MADE INVESTMENT IN CONSTRUCTION OF HOUSE IS CON CERNED, THE CIT(A) NOTED THAT THE ASSESSEE HERSELF STATED THAT SHE DID NOT MAKE A NY INVESTMENT IN CONSTRUCTION OF THE HOUSE AFTER THE HOUSE PROPERTY WAS PURCHASED BY HER ALONG WITH HER SISTER BUT THE INVESTMENT IN CONSTRUCTION OF HOUSE PROPERTY WA S MADE BY HER FATHER BY INVESTING RS.16,00,000/- FOR FIRST AND SECOND FLOOR WHICH WERE SOLD DURING THE YEAR UNDER CONSIDERATION. THE CIT(A) HAS ALSO EXAMINED THE ASPECT BY CALLING REPORT FROM D.V.O. AND REMAND REPORT OF THE A.O. THE A.O. ALSO ATTENDED HEARING BEFORE THE CIT(A) AND SUBMITTED THAT THE ASSESSEE AND HER SISTER DID NOT HAVE ANY SOURCE OF INCOME IN THE YEAR 1991-92 AND 1993-94 WH EN THE CONSTRUCTION OF THE HOUSE WAS CLAIMED TO HAVE BEEN SHOWN , HENCE IT WAS NOT POSSIBLE FOR THEM TO MAKE ANY INVESTMENT. THE CIT(A) EXAMINED THE DEFIN ITION OF COST OF IMPROVEMENT AND NOTICED THAT THE COST OF IMPROVEMENT BENEFIT IS ONLY AVAILABLE IF ANY ADDITION OR ALTERATIONS TO THE CAPITAL ASSET BY THE ASSESSEE. SECTION 55(2)(B)(III) CLEARLY 7 ITA NO.155/AGRA/2012 A.Y. 2007-08 PROVIDES THAT THE EXPENDITURE OF A CAPITAL NATURED IN MAKING ANY ADDITION OR ALTERNATIONS TO THE CAPITAL ASSET BY THE ASSESSEE A FTER IT BECAME HIS PROPERTY. IN THE CASE UNDER CONSIDERATION, IT IS ADMITTED FACT THAT THE COST OF IMPROVEMENT AS CLAIMED BY THE ASSESSEE WAS INCURRED BY THE ASSESSE ES FATHER AND NOT BY THE ASSESSEE. THEREFORE, THE ASSESSEE IS NOT ELIGIBLE FOR THIS BENEFIT. THE CONTENTION OF THE LD. AUTHORISED REPRESENTATIVE IS ALSO NOT ACCEP TABLE AS THE PROPERTY WAS DIRECTLY PURCHASED BY THE ASSESSEE AND HER SISTER. IT WAS NEITHER ACQUIRED BY SUCCESSION, INHERITANCE OR BY DEVOLUTION. IN THE L IGHT OF THE FACT, WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE IS NOT ELIGIBLE F OR BENEFIT OF COST OF IMPROVEMENT AS PROVIDED UNDER SECTION 55(2)(B)(III) OF THE ACT. IN THE LIGHT OF THE FACT, ORDER OF THE CIT(A) IS CONFIRMED ON THE ISSUE. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED. (ORDER PRONOUNCED IN THE OPEN COURT) SD/- SD/- (BHAVNESH SAINI) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTANT MEMBER PBN/* COPY OF THE ORDER FORWARDED TO: APPELLANT/RESPONDENT/CIT (APPEALS) CONCERNED/CIT CO NCERNED D.R., ITAT, AGRA BENCH, AGRA/GUARD FILE. BY ORDER SR. PRIVATE SECRETARY INCOME-TAX APPELLATE TRIBUNAL, AGRA TRUE COPY