ITO, CHENNAI V. Shri V.Jayaraman, CHENNAI

ITA 1895/CHNY/2012

• Counselvise Citation: 189521714 RSA 2012
• Duration Of Justice: 1 year(s) 6 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 28-04-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 25-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T N BETGIR I IRS
• Assessee Lawyers: S SRIDHAR
• Keywords: Sale consideration of property below Jantri Value; Gift
• Section: 143(3); 50C

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . . . , !' , # $! % BEFORE DR. O.K.NARAYANAN, VICE-PRESIDENTAND SHRI VIKAS AWASTHY, JUDICIAL MEMBER ./ ITA NO. 1895/MDS/2012 # & '& / ASSESSMENT YEAR : 2009-10 THE INCOME TAX OFFICER, WARD I(2), CHENNAI - 600 034. V. SHRI V. JAYARAMAN, 131, CHAMIERS ROAD, RAJA ANNAMALAIPURAM, CHENNAI - 600 028. PAN : AADPJ 4597 Q (')/ APPELLANT) (+,')/ RESPONDENT) ') - / APPELLANT BY : SHRI T.N. BETGIRI, IRS, JCIT +,') - / RESPONDENT BY : SHRI S. SRIDHAR, ADVOCATE . - /0 / DATE OF HEARING : 28 TH APRIL, 2014 12' - /0 / DATE OF PRONOUNCEMENT : 29 TH APRIL, 2014 / O R D E R PER DR.O.K.NARAYANAN, VICE-PRESIDENT THIS APPEAL FILED BY THE REVENUE RELATES TO ASSE SSMENT YEAR 2009-10. THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-VI AT CHENNAI, PASSED ON 30.7.2012 AND ARISES OUT OF THE ASSESSMENT COMPLETE D UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961. 2 I.T.A. NO. 1895/MDS/13 2. THE RESPONDENT-ASSESSEE IN THE PRESENT CASE, DUR ING THE PREVIOUS YEAR, TRANSFERRED AN IMMOVABLE PROPERTY TO SRINGERI JAGADGURU SANATANA DHARMA VIDYA SAMITHI. THE PROPE RTY WAS TRANSFERRED THROUGH A DEED OF SALE CUM GIFT. THE P ROPERTY WAS TRANSFERRED BY THE ASSESSEE ALONG WITH HIS BROTHER. 3. THE PROPERTY WAS VALUED BY THE REGISTRATION DEPA RTMENT OF THE STATE GOVERNMENT FOR STAMP DUTY PURPOSES AT ` 1,20,00,000/-. AS PER THE DEED OF SALE CUM GIFT, THE ASSESSEE HAS SOLD THE PROPERTY TO THE SAMITHI FOR A CONSIDERATION OF ` 1 CRORE AND GIFTING AWAY THE BALANCE OF ` 20 LAKHS. SO, ACCORDING TO THE ASSESSEE, THE TRAN SFER BY WAY OF SALE WAS TAKEN PLACE AGAINST A CONSIDERAT ION OF ` 1 CRORE AND THE EXCESS AMOUNT COMPUTABLE IN THE LIGHT OF TH E GUIDELINE VALUE AT ` 20 LAKHS WAS GIFT GIVEN TO THE SAMITHI. HE FURTHE R CONTENDED THAT THE GIFT OF ` 20 LAKHS MADE BY THE ASSESSEE CANNOT BE TREATED AS TRANSFER UNDER SECTION 47 OF THE INCO ME-TAX ACT, 1961 AND THEREFORE, CAPITAL GAINS IN THE PRESENT CASE SH OULD BE COMPUTED WITH REFERENCE TO THE SALE CONSIDERATION OF ` 1 CRORE ALONE. 4. ASSESSING OFFICER, ON THE OTHER HAND, HELD THAT SECTION 50C APPLIES IN THE PRESENT CASE; THE GUIDELINE VALUE IS ` 1,20,00,000/- AND THEREFORE, THE SALE CONSIDERATION FOR THE PURPO SE OF COMPUTING CAPITAL GAINS MUST BE ADOPTED AT ` 1,20,00,000/-. 3 I.T.A. NO. 1895/MDS/13 5. IN FIRST APPEAL, THE COMMISSIONER OF INCOME TAX (APPEALS) HELD THAT AS FAR AS THE SALE OF THE PROPERTY WAS CO NCERNED, THE CONSIDERATION WAS ONLY ` 1 CRORE AND THEREFORE, THAT AMOUNT ALONE IS THE BASIS OF COMPUTING THE CAPITAL GAINS. HE HE LD THAT THE PART OF THE GIFT MADE BY THE ASSESSEE ALONG WITH THE SALE C ANNOT BE TREATED AS TRANSFER UNDER SECTION 47 AND AS SUCH, THE SUM O F ` 20 LAKHS CANNOT BE INCLUDED IN THE COMPUTATION OF THE LONG T ERM CAPITAL GAINS. 6. THE REVENUE IS AGGRIEVED AND THEREFORE, THE SECO ND APPEAL BEFORE US. 7. WE HEARD BOTH SIDES IN DETAIL. 8. AS PER THE REGISTERED DOCUMENT EXECUTED BY THE A SSESSEE AND HIS BROTHER WITH THE SAMITHI, IT IS CLEARLY DEC LARED THAT THE PROPERTY WAS TRANSFERRED TO THE SAMITHI ON THE BASI S OF SALE AS WELL AS GIFT. PART OF THE VALUE OF THE PROPERTY WAS REC EIVED BY THE ASSESSEE, WHEREAS, ONE PART OF THE VALUE OF THE PRO PERTY IS GIFTED TO THE SAMITHI. THAT PART OF THE PROPERTY SOLD BY THE ASSESSEE WAS FOR A CONSIDERATION OF ` 1 CRORE. THAT PART OF THE SALE TRANSACTION IS EXIGIBLE TO CAPITAL GAINS TAXATION. BUT, THE AMOUN T IN EXCESS OF THE VALUE OF THE PROPERTY ` 1 CRORE HAS ALREADY BEEN GIFTED AWAY BY THE ASSESSEE TO THE SAMITHI, THROUGH THE DEED OF SALE A ND GIFT. THEREFORE, THAT PART OF THE VALUE OF THE PROPERTY G IFTED AWAY BY THE ASSESSEE TO THE SAMITHI CANNOT BE TREATED AS A TRAN SFER BY VIRTUE OF 4 I.T.A. NO. 1895/MDS/13 SECTION 47. THEREFORE, THE VALUE OF THE GIFT ELEME NT CANNOT BE CONSIDERED FOR THE PURPOSE OF COMPUTING CAPITAL GAI NS IN THE PRESENT CASE. 9. THIS IS A CASE OF COMPOSITE TRANSACTION CONSISTI NG OF SALE AS WELL AS GIFT. NATURALLY, GIFT IS NOT CONSIDERED AS TRANSFER FOR THE PURPOSE OF CAPITAL GAINS AS PROVIDED IN SECTION 47 OF THE INCOME-TAX ACT, 1961. THEREFORE, WHAT IS TO BE LOOKED INTO IS THAT PORTION OF SALE PROPER. IN THE PRESENT CASE, THE SALE HAS B EEN MADE FOR A CONSIDERATION OF ` 1 CRORE. THEREFORE, THE COMMISSIONER OF INCOME TAX (APPEALS) IS JUSTIFIED IN HOLDING THAT THE ASSE SSEE IS ENTITLED TO COMPUTE HIS CAPITAL GAINS ON THE BASIS OF THE SALE CONSIDERATION OF ` 1 CRORE. 10. IN RESULT, THIS APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON TUESDAY, THE 29 TH OF APRIL, 2014 AT CHENNAI. SD/- SD/- (VIKAS AWASTHY) (DR. O.K. NARAYANAN) ( !' ) ( ... ) # $! /JUDICIAL MEMBER /VICE-PRESIDENT /CHENNAI, 5$ /DATED, THE 29 TH APRIL, 2014. KRI. 5 I.T.A. NO. 1895/MDS/13 $6 - +#/7 8 '/ /COPY TO: 1. ') /APPELLANT 2. +,') /RESPONDENT 3. . 9/ () /CIT(A)-VI, CHENNAI 4. . 9/ /CIT-IV, CHENNAI 5. :; +#/# /DR 6. ;& < /GF.