S ANUSUIYA, MADURAI V. ITO NON CORPORATE WARD 1 (1), MADURAI

ITA 1698/CHNY/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 2720 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 18-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SALENDRA MAMIDI CIT D R
• Assessee Lawyers: G BASKAR
• Keywords: Capital asset; Gift; Cost of acquisition; Reasonable cause

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : CHENNAI , , BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER & SHRI S.JAYARAMAN, ACCOUNTANT MEMBER ./ I.T.A.NO.1698/CHNY/2018 AND ./ I.T.A.NO.1459/CHNY/2018 / ASSESSMENT YEAR : 2007-08 SMT S.ANUSUIYA , NO.3-D,BHARTH HEIGHTS, AVENUE ROAD, S.S.COLONY, MADURAI 625 016. VS. THE INCOME TAX OFFICER, NON-CORPORATE WARD 1(1), CR BUILDING, BIBIKULAM, MADURAI 625 002. [PAN ACLPA 0359 D] ( / APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR.G.BASKAR,ADVOCATE !' /RESPONDENT BY : MR.SALENDRA MAMIDI,CIT,D.R # $ %& / DATE OF HEARING : 24 - 1 0 - 201 8 '( %& / DATE OF PRONOUNCEMENT : 24 - 1 0 - 201 8 ! / O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER ITA NO.1459/CHNY/2018 IS THE APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-2(I/C), MADURAI IN ITA NO.115/2011-12 DATED 06.02.2016 FO R THE ASSESSMENT ITA NOS.1698 &1459/CHNY/18 :- 2 -: YEAR 2007-08, AND ITA NO.1698/CHNY/2018 IS THE APP EAL FILED BY THE ASSESSEE AGAINST THE ORDER OF REVISION OF THE COMMI SSIONER OF INCOME- TAX-II, MADURAI IN ITA NO.114//1/CIT-II/2010-11 DATED 17.02.2011 FOR THE ASSESSMENT YEAR 2007-08. 2. SHRI G.BHASKAR REPRESENTED ON BEHALF OF THE ASS ESSEE, AND SHRI SALENDRA MAMIDI REPRESENTED ON BEHALF THE OF THE REVENUE. 3. AS BOTH THE APPEALS FILED BY THE ASSESSEE INVOLVED IDENTICAL ISSUE, THE SAME IS DISPOSED OFF BY THIS COMMON ORDE R. 4. IT WAS SUBMITTED BY LD.A.R THAT THE APPEAL FILE D BY THE ASSESSEE IN ITA NO.1698/CHNY/2018 AGAINST THE ORDER PASSED U/S.263 OF THE ACT WAS TIME BARRED BY 2584 DAYS FOR WHICH THE ASSESSEE HAS FILED AN AFFIDAVIT SPECIFIED REASONS F OR CONDONATION OF DELAY. IT WAS A SUBMISSION THAT ASSESSEE IS AN INDI VIDUAL, PRESENTLY HOUSE WIFE OF SHRI S.SELVAPANDIAN. IT WAS A SUBMISS ION THAT THE ASSESSEE DID NOT KNOW THAT AN APPEAL HAD TO BE FILE D AGAINST THE ORDER PASSED U/S.263 OF THE ACT AND CONSEQUENTLY ON LY WHEN THE ASSESSMENT WAS COMPLETED ON THE BASIS OF THE ORDER PASSED U/S.263 OF THE ACT, THE ASSESSEE CAME TO KNOW THAT THE APPEAL WAS LIABLE TO BE FILED AGAINST THE ORDER PASSED U/S.263 OF THE ACT. THE AFFIDAVIT FILED BY THE ASSESSEE IS EXTRACTED HEREIN BELOW:- ITA NOS.1698 &1459/CHNY/18 :- 3 -: AFFIDAVIT OF S.ANUSUIYA I, S.ANUSUIYA,W/P MR.S.SELVAPANDIAN AGED 49 YEARS, RESIDING AT 71, NAVALAR NAGAR, 3 RD STREET, SS COLONY, MADURAI 625 016 DO HEREBY SOLEM NLY AFFIRM AND SINCERELY STATE AS FOLLOWS:- I AM THE APPELLANT IN THE APPEAL AND THE PETITION ER HEREIN AND AS SUCH I AM ACQUAINTED WITH THE FACTS OF THE CASE. FOR A.Y 2007-08 I FILED MY RETURN OF INCOME ON 26 .05.2008 ADMITTING A TOTAL INCOME OF RS. 1,51,650/-, WHICH WAS TAKEN UP FOR SCRUTINY. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT BY ORDER DATED 31.12.2009 ACCEPTING THE INCOME RETURNED. THEREAFTER THE LEARNED COMMISSIONER OF INCOME TAX, ISSUED A NOTICE U/S.263 DATED 13.09.2010 PROPOSING TO REVISE THE OR DER OF ASSESSMENT. MY REPRESENTATIVE MR. R. ALAGU AN INCOME TAX PRACTITIO NER APPEARED AND MADE HIS SUBMISSIONS, THE LEARNED COMMISSIONER OF INCOME TAX VIDE THE IMPUGNED ORDER DATED 07.02.2011, DIRECTED THE ASSES SING OFFICER TO BRING, TO TAX THE ENTIRE SHORT TERM CAPITAL GAINS ARISING ON SALE OF A PROPERTY. THE ORDER WAS SERVED ON 20.02.2011. AT THAT STAGE, MY REPRESENTATIVE INFORMED ME THAT THE ASSESSING OFFICER WILL GIVE EFFECT TO THIS ORDER AND IF AGGRIEVED, I CAN FILE AN APPEAL TO THE COMMISSIONER OF INCOME TAX (APPEALS). ACCORDINGLY, WHEN THE ASSESSING OFFICER PASSED THE ORDER DATED 04.05.2011. I PREFER RED AN APPEAL TO THE CORMMISSIONER OF INCOME TAX (APPEALS), MADURAI, ON 17TH JUNE 2011, WITHIN THE TIME PERMITTED UNDER THE IT ACT. THE COMMISSION ER OF INCOME TAX (APPEALS) VIDE HIS ORDER DATED 06.02.2018 DISMISSED THE APPEAL AND THIS WAS SERVED ON ME ON 02.03.2018. MY REPRESENTATIVE SHRI R. ALAGU PASSED AWAY ON 10.04.2018. THEREAFTER, I APPROACHED MR.PARANCHOTHI, CHARTERE D ACCOUNTANT, MADURAI, WHO ADVISED ME THAT I SHOULD FILE AN APPEAL IMMEDIA TELY. ACCORDINGLY, I FILED AN APPEAL BEFORE THIS HONBLE TRIBUNAL ON 01.05.201 8 (ITA NO.1459/2018). HE INFORMED ME THAT SINCE THE DUE DATE FOR FILING T HE IS GETTING OVER HE HAS FILED THE APPEAL FORTHWITH AND HE WOULD ENGAGE THE SERVICES OF MR.G.BASKAR, ADVOCATE, CHENNAI, FOR PURSUING THE APPEAL AND ACCO RDINGLY HE FORWARDED THE PAPERS TO HIM VIDE HIS LETTER DATED 07.05.2018. ON 8 TH MAY 2018 ITSELF MR.G.BASKAR REPLIED TO US AND APPRISED US THAT AN A PPEAL AGAINST THE ORDER U/S.263 WOULD BE THE PROPER REMEDY. AFTER DISCUSSIO NS WITH MY CA WE REQUESTED HIM TO PREPARE AN APPEAL AND THAT IS HOW THE PRESENT APPEAL IS BEING FILED, THERE IS A DELAY OF 2584 DAYS IN FILING THE APPEAL . I SUBMIT THAT FROM 2011 ONWARDS I AM SUFFERING FROM BREAST CANCER AND I UND ERWENT MASTECTOMY ON 22.10.2012 AT DR. MOHAN PRASATH, MEDICITY HOSPITAL, MADURAI AND EVEN TODAY I AM UNDER MEDICATION. IMMEDIATELY AFTER THE SURGER Y I WAS GIVEN RADIATION TREATMENT AND CHEMOTHERAPY TREATMENT. EVEN NOW I AM UNDERGOING CHEMOTHERAPY AND RADIATION THERAPY AS AND WHEN ADVI SED BY MY DOCTOR. ITA NOS.1698 &1459/CHNY/18 :- 4 -: I AM ONLY A HOUSEWIFE FIGHTING FOR MY LIFE. I WAS ACTING ONLY AT THE INSTRUCTIONS AND ADVICE OF SHRI R.ALAGU, ITP. THE F ACT THAT AN APPEAL HAS TO BE FILED DIRECTLY AGAINST THE ORDER U/S.263 WAS NOT KNOWN TO ME NOR MY ITP ADVISED ME TO DO SO. I DILIGENTLY PREFERRED AN APPE AL BEFORE THE LEARNED CIT (APPEALS) AS ADVISED BY MY ITP. ONLY WHEN WE APPROA CHED MR.G.BASKAR, ADVOCATE, WE WERE ADVISED OF THE PROPER REMEDY. IMM EDIATELY I TOOK STEPS TO PREFER THIS APPEAL. I SUBMIT THAT THE ONLY ISSUE IN APPEAL IS WHETHER THE ASSET TRANSFERRED BY ME IS A LONG-TERM, CAPITAL ASSET OR NOT. THE ASSET WAS ACQUIRED BY ME BY WAY OF A SETTLEMENT DEED DATED 09.06.2005 EXECUTED BY MY HUSBAND. MY HUSBAND GOT THIS PROPERTY ON 10.07.1974 VIDE A REGI STERED PARTITION DEED. THE LEARNED COMMISSIONER OF INCOME TAX IN THE IMPUG NED ORDER U/S.263 HAD TAKEN THE VIEW THAT ONLY THE PERIOD FOR WHICH I WAS HOLDING THE PROPERTY SHOULD BE TAKEN INTO ACCOUNT AND AS SUCH WHAT I TRA NSFERRED IS ONLY A SHORT TERM ASSET. IF THE PERIOD OF TAKEN INTO ACCOUNT, TH E ASSET TRANSFERRED BY ME IS A LONG TERM CAPITAL ASSET AS PER SEC.2(42A) OF T HE IT ACT. THUS, THE VIEW OF THE LEARNED COMMISSIONER IS NOT IN ACCORDANCE WITH THE PROVISIONS OF THE I.T ACT. THUS, I SUBMIT THAT I HAVE A PRIMA FADE CASE. I FURTHER SUBMIT THAT THE DELAY IN FILING THE APP EAL IS NEITHER WILLFUL NOR DELIBERATE BUT DUE TO ALL THE REASONS STATED ABOVE. I WOULD BE PUT TO IRREPARABLE LOSS AND HARDSHIP IF THE DELAY IS NOT C ONDONED. IN THESE CIRCUMSTANCES, I MOSTLY HUMBLY PRAY THAT THIS HONBLE TRIBUNAL BE GRACIOUSLY PLEASED TO; CONDONE THE DELAY OF 2584 DAYS IN FILING THE PRES ENT APPEAL; ADMIT, HEAR AND DISPOSE OF THE APPEAL IN ACCORDAN CE WITH LAW; PASS SUCH FURTHER OR OTHER ORDER OR ORDERS THAT T HIS HONBLE TRIBUNAL MAY DEEM FIT AND PROPER IN THE CIRCUMSTANCES OF THE CAS E AND THUS RENDER JUSTICE. IT WAS A SUBMISSION THAT THE ISSUE IN THE APPEAL WA S SQUARELY COVERED BY THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. MANJULA J.SHAH REPORTED IN [2013] 355 ITR 474(BOM). IT WAS A SUBMISSION THAT THE ASSESSEE HAD SOLD A HOUSE PROPE RTY ON 03.01.2007 FOR A CONSIDERATION OF ` 46,46,000/- AND HAD PURCHASED A HOUSE PROPERTY FOR ` 25,00,000/- ON 18.01.2007. IT WAS A SUBMISSION THAT THE ASSESSEE HAD RECEIVED 50% SHARE IN THE SAID PROPERT Y BY DHANA ITA NOS.1698 &1459/CHNY/18 :- 5 -: SETTLEMENT FROM HER HUSBAND VIDE DOCUMENT DATED 09 .06.2005. IT WAS A SUBMISSION THAT THE ASSESSEES HUSBAND RECEIV ED THIS PROPERTY FROM HIS MOTHER ON 10.07.1974 BY WAY OF A REGISTERE D PARTITION DEED. IT WAS A SUBMISSION THAT THE ASSESSEE HAD BROUGHT O UT ALL THE FACTS IN THE RETURN FILED BY THE ASSESSEE ON 26.05.2008 AND THE SAME HAD BEEN ACCEPTED BY THE LD. ASSESSING OFFICER. IT WAS A SUBMISSION THAT THE LD.CIT HAD HELD THAT DHANA SETTLEMENT DEED H AVING BEEN EXECUTED ON 09.06.2005 BY HER HUSBAND AND THE PROPE RTY HAVING BEEN SOLD ON 03.01.2007, THE PROPERTY WAS HELD BY THE AS SESSEE ONLY FOR 19 MONTHS AND CONSEQUENTLY, THE GAINS FROM THE SALE OF THE SAME WAS LIABLE TO BE TREATED AS GIVING RISE TO SHORT TERM C APITAL GAINS AND NOT LONG TERM CAPITAL GAINS. IT WAS A SUBMISSION THAT H ONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. MANJULA J.SHAH REFERRE D TO SUPRA HAS CATEGORICALLY HELD THAT WHILE COMPUTING CAPITAL GAI NS ARISING ON TRANSFER OF CAPITAL ASSET ACQUIRED BY AN ASSESSEE U NDER A GIFT OR WILL, THE INDEXED COST OF ACQUISITION HAS TO BE COMPUTED WITH REFERENCE TO YEAR IN WHICH THE PREVIOUS OWNER FIRST HELD ASSET AND NOT THE YEAR IN WHICH THE ASSESSEE BECAME OWNER OF ASSET. IT WAS A SUBMISSION THAT THUS, THE BASIS ON WHICH THE LD.CIT HAS PASSED THE ORDER U/S.263 OF THE ACT WAS ERRONEOUS AND THE ORDER PASSED U/S.263 OF THE ACT WAS LIABLE TO BE ANNULLED. ITA NOS.1698 &1459/CHNY/18 :- 6 -: 5. IN REPLY, LD.D.R VEHEMENTLY SUPPORTED THE ORDER OF LD.CIT PASSED U/S.263 OF THE ACT. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE HAVE GONE THROUGH THE REASONS ADVANCED BY THE ASSESSEE IN HER AFFIDAVIT. IN OUR OPINION, THERE EXISTS REASONABLE CAUSE FOR FILING T HE APPEAL BELATEDLY. ACCORDINGLY, WE CONDONE THE DELAY OF 2584 DAYS IN F ILING THIS APPEAL AND THE APPEAL IS DISPOSED OF ON MERIT. 6.1 A PERUSAL OF THE DECISION OF HONBLE BOMBAY HIG H COURT IN THE CASE OF CIT VS. MANJULA J.SHAH CLEARLY SHOWS TH AT WHEN THE ASSESSEE HAS RECEIVED A CAPITAL ASSET UNDER GIFT OR WILL, THE INDEXED COST OF ACQUISITION WILL BE COMPUTED WITH REFERENCE TO YEAR IN WHICH THE PREVIOUS OWNER FIRST HELD ASSET AND NOT THE YEAR I N WHICH THE ASSESSEE BECAME OWNER OF ASSET. THUS CLEARLY IN THE PRESENT CASE, THE ASSESSEE HEREIN HAVING RECEIVED THE GIFT BY DHANA SETTLEMEN T ON 09.06.2005, THE INDEXED COST OF ACQUISITION IS TO BE COMPUTED W ITH REFERENCE TO YEAR IN WHICH THE PREVIOUS OWNER FIRST HELD ASSET. THAT BEING SO, THE ASSESSEES HUSBAND TOOK POSSESSION OF THE PROPERTY IN 1974 THROUGH PARTITION DEED WITH HIS MOTHER, OBVIOUSLY, THE PROP ERTY WAS HELD BY THE ASSESSEE BY MORE THAN 36 MONTHS AND CONSEQUENTLY, O NLY LONG TERM CAPITAL GAINS IS LIABLE TO BE ASSESSED IN THE HANDS OF ASSESSEE. THIS BEING SO, THE ORDER PASSED U/S.263 OF THE ACT BY TH E LD.CIT IS FOUND TO BE ERRONEOUS AND THE SAME STANDS QUASHED. ITA NOS.1698 &1459/CHNY/18 :- 7 -: 7. THE APPEAL FILED BY THE ASSESSEE IN ITA NO.1459 /CHNY/2018 IS AGAINST THE ORDER PASSED BY THE LD.CIT(A), WHICH IS AGAINST THE ASSESSMENT ORDER GIVING EFFECT TO REVISIONAL ORDER PASSED U/S.263 OF THE ACT. AS WE HAVE ALREADY QUASHED THE ORDER PASS ED U/S.263 OF THE ACT, THE APPEAL FILED BY THE ASSESSEE IN ITA NO.145 9/CHNY/2018 HAS BECOME INFRUCTUOUS AND IS DISMISSED AS INFRUCTUOUS. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN ITA NO.1698/CHNY/2018 IS ALLOWED AND THE APPEAL FILED B Y THE ASSESSEE IN ITA NO.1459/CHNY/2018 IS DISMISSED AS INFRUCTUOUS. ORDER PRONOUNCED IN THE OPEN COURT AFTER CONCLUSION OF HEARING ON 24 TH OCTOBER, 2018, AT CHENNAI. SD/ - SD/ - ( ) (S. JAYARAMAN) ' # /ACCOUNTANT MEMBER ( ) (GEORGE MATHAN) $ # / JUDICIAL MEMBER ) $ / CHENNAI * / DATED: 24 TH OCTOBER, 2018. K S SUNDARAM + !%,- . -% / COPY TO: 1 . / APPELLANT 3. # /% () / CIT(A) 5. -23 !%4 / DR 2. !' / RESPONDENT 4. # /% / CIT 6. 35 6$ / GF