ACIT, CHENNAI V. Smt. A.S.Kamakshi, CHENNAI

ITA 1906/CHNY/2010

• Counselvise Citation: 190621714 RSA 2010
• Duration Of Justice: 1 year(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 17-11-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 11-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR I VIJAYAKUMARC I T
• Assessee Lawyers: R VIJAYARAGHAVAN
• Keywords: Gift; Cost of acquisition

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH C CHENN AI BEFORE DR.O.K.NARAYANAN, VICE PRESIDENT AND SHRI HARI OM MARATHA, JUDICIAL MEMBER .. ITA NO.1906/MDS./2010 ASSESSMENT YEAR:2006-07 ASST. COMMISSIONER OF INCOME TAX, CIRCLE XV, CHENNAI 600 034. VS. SMT.A.S.KAMAKSHI, NO.14,OLD NO.24,LADY MADHAVA ROAD, MAHALINGAPURAM, CHENNAI-34. PAN AAXPK 4620 K (APPELLANT) (RESPONDENT) DEPARTMENT BY : DR.I.VIJAYAKUMAR,C.I.T. ,DR ASSESSEE BY : SHRI R.VIJAYARAGHAVAN,ADVOCATE DATE OF HEARING : 17.11.11 DATE OF PRONOUNCEMENT : 23.11. 11 O R D E R PER HARI OM MARATHA, JUDICIAL MEMBER : THIS APPEAL OF THE REVENUE FOR ASSESSMENT YEAR 2 006- 07 IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX(A) DT.30.08.10. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE SMT.A.S.KAMAKSHI FILED HER RETURN OF INCOME FOR ASS ESSMENT YEAR 2006-07 DECLARING TAXABLE TOTAL INCOME OF RS.1 ,96,180/-. THE ASSESSMENT WAS MADE U/S.143(3) AT A TOTAL INCOM E OF RS.1,80,09,040/-, WHICH INCLUDES CAPITAL GAIN OF RS .88,12,862/- PAGE OF 6 ITA.1906 /MDS/10 2 . A GIFT OF RS.2.64 CRORES WAS RECEIVED BY THE ASS ESSEE FROM HER BROTHER SHRI A.S.ANANTHARAMAN. SHE HAD DECLARE D LONG TERM CAPITAL GAINS AS UNDER:- RS. SALE CONSIDERATION 84,00,000 LESS: INDEXED COST OF ACQUISITION 36,35,587 CAPITAL GAIN LONG TERM 47,61,413 ASSESSEES SHARE OF CAPITAL GAIN (1/3 RD SHARE) IN THE PROPERTY 15,87,138 LESS: I/S.54EC INVESTMENT IN NABARD BONDS 16,00,000 IN EFFECT, THE ASSESSEE DISCLOSED NIL INCOME FROM LONG TERM CAPITAL GAIN. SHE HAD INCOME FROM HOUSE PROPERTY O F RS.99,665/- AND INCOME FROM OTHER SOURCES OF RS.1,6 6,511/-. THUS, TOTAL GROSS INCOME WAS SHOWN AT RS.2,66,176/- AS AGAINST WHICH THE ASSESSING OFFICER (ASST. COMMISSI ONER OF INCOME TAX ) MADE THE FOLLOWING ADDITION UNDER THE HEAD LONG TERM CAPITAL GAIN:- RS. SALE CONSIDERATION 84,00,000 ADD: AMOUNT OF GIFT RECEIVED FROM BROTHER, CONSIDERED AS CONSIDERATION FOR THE PROPERTY 2,64,00,000 TOTAL SALE CONSIDERATION 3,48,00,000 LESS: INDEXED COST OF ACQUISITION 36,38,587 TOTAL CAPITAL GAIN ON SALE OF PROPERTY 3,12 ,38,587 (HOWEVER, THE FIGURE SHOULD BE RS.3,11,61,413) ASSESSEES 1/3 RD SHARE IN CAPITAL GAIN 1,04,12,862 LESS: BENEFIT U/S.54EC,INVESTMENT IN NABARD BONDS 16,00,000 TAXABLE LONG TERM CAPITAL GAIN 88,12,862 THE SECOND ADDITION HAS BEEN MADE ON ACCOUNT OF GIFT RECEIVED FROM ASSESSEES BROTH ERS WIFE NAMELY K.K.KANAKAM BEING TREATED AS OTHER THAN RELATIVES AS PER SECTION 56(2)(V). 90,00,000 GROSS TOTAL INCOME 1,78,12,862 PAGE OF 6 ITA.1906 /MDS/10 3 3. IN FACT, THE ASSESSEE WAS THE CO-OWNER OF A RE SIDENTIAL HOUSE PROPERTY WITH HER 1/3 RD SHARE, MEASURING ABOUT TWO GROUNDS WITH 3000 SQ.FT. BUILT-UP AREA SITUATED AT KAMDAR NAGAR, CHENNAI 600 034. ALL THE CO-OWNERS INCLUDIN G K.P.PREMA AND K.P.LAKSHMI DEVI HAD SOLD THE PROPERT Y TO ASSESSEES BROTHER NAMELY SHRI A.S.ANANTHARAMAN, FO R A CONSIDERATION OF RS.84 LAKHS AS PER THE SALE DEED D ATED 14.02.2006. THE COST OF STAMP PAPER AND REGISTRATI ON AT THE RATE OF 9%, ON THE SALE CONSIDERATION COMES TO RS. 7.56 LAKHS, WHICH WAS PAID BY THE PURCHASER SHRI A.S.ANANTHARAM AN. SHRI A.S.ANANTHARAMAN, BROTHER OF THE ASSESSEE ALLEGEDLY GAVE A GIFT OF RS.2.64 CRORES TO HER OUT OF NATURAL LOVE A ND AFFECTION WHICH FACT HAS BEEN CONFIRMED BY THE DONOR. THE GI FT IS SUPPORTED BY A DECLARATION OF GIFT ALSO. THE ASSES SING OFFICER HAS CONSIDERED THE EVENT OF GIFT AND EVENT OF SALE OF THE PROPERTY TOGETHER AND HAS CONSTRUED THAT THE AMOUNT OF GIFT HAS BEEN ACTUALLY GIVEN AS CONSIDERATION FOR THE PU RCHASE OF THE PROPERTY. BUT THIS FACT HAS BEEN TOTALLY DENIE D BY THE ASSESSEE. ACCORDING TO THE ASSESSEE , THERE IS NO PROOF/MATERIAL ON RECORD TO CONSIDER THE GIFT AS S ALE CONSIDERATION FOR THE PROPERTY AS AGAINST WHICH THE SALE CONSIDERATION HAS BEEN ACCEPTED BY THE REGISTRAR AT THE TIME OF REGISTERING THE SALE DEED. THE GIFT HAS BEEN S TATED TO BE BONA FIDE AND HONEST AND HAVING BEEN MADE THROUGH C HEQUES. BOTH THE DONOR AND DONEE HAVE CONFIRMED THE PAYMENT AND RECEIPT THEREOF RESPECTIVELY. AFTER CONSIDERING TH E RIVAL SUBMISSIONS ON THIS ISSUE, WE FIND THAT EXCEPT FOR PRESUMPTION AND CONJECTURE, THERE IS NO EVIDENCE ON RECORD TO S UGGEST THAT PAGE OF 6 ITA.1906 /MDS/10 4 THE GIFT IS NOTHING, BUT THE ADDITIONAL SALE CONSID ERATION OF THIS PROPERTY. THE ASSESSING OFFICER HAS NOT TREATED TH E GIFT AS BOGUS OR IN-GENUINE, BUT HE HAS SIMPLY BY ACCEPTING THIS AMOUNT HAS TREATED THE SAME AS ADDITIONAL CONSIDERA TION TOWARDS HER SHARE IN THE SALE CONSIDERATION. IN OU R CONSIDERED OPINION, THE ACTION OF ASSESSING OFFICER IS NOT COR RECT. HE HAS CO-RELATED THE TRANSACTION OF SALE AND EVENT OF GIF T WITHOUT THERE BEING ANY CONNECTING EVIDENCE. THE ACTION OF THE ASSESSING OFFICER IN DOING SO IS UTTERLY UNFOUNDED AND DESERV ES TO BE REJECTED. ACCORDINGLY, WE CONFIRM THE FINDING OF L D. COMMISSIONER OF INCOME TAX(A) IN THIS REGARD AND DI SMISS THE GROUND NO.1. 4. THE GROUND NO.2 OF THE REVENUES APPEAL IS WITH REGARD TO DELETION OF ADDITION OF RS.90 LAKHS, MADE ON ACC OUNT OF ALLEGED GIFT RECEIVED BY THE ASSESSEE FROM HER BROT HERS WIFE. THE GROUND RAISED BY THE DEPARTMENT IS THAT IT DOES NOT WITHIN THE PURVIEW OF SEC.56(2)(V) OF THE ACT SO FAR A REL ATION OF DONOR AND DONEE ARE CONCERNED. BUT THIS IS NOT A CORRECT SUBMISSION AS THE EXPLANATION APPENDED TO THE SECTION PRESCRIB ES THE MEANING OF THE WORD RELATIVE TO INCLUDE SPOUSES O F THE PERSONS NAMELY BROTHER OR SISTER OR ANY LINEAL ASC ENDANT OR DESCENDANT OF THE SPOUSE OF THE INDIVIDUAL. THERE FORE, IN THIS PAGE OF 6 ITA.1906 /MDS/10 5 REGARD ALSO THE ORDER OF LD.CIT(A) IS CORRECT. ACC ORDINGLY, WE CANNOT ALLOW THIS APPEAL OF THE REVENUE. 5. IN RESULT, THE APPEAL OF REVENUE STANDS DISMISS ED. ORDER PRONOUNCED ON 23 RD NOVEMBER, 2011. SD/- SD/- (DR.O.K.NARAYANAN ) ( HARI OM MARATHA ) VICE PRESIDENT JUDICIAL MEMBER CHENNAI, DATED THE 23 RD NOVEMBER, 2011. K S SUNDARAM COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE PAGE OF 6 ITA.1906 /MDS/10 6 DATE INITIALS 1. DRAFT DICTATED ON 2. DRAFT PLACED BEFORE AUTHORITY 3. DRAFT PLACED BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 5. APPROVED DRAFT COMES TO P.S. 6. KEEP FOR PRONOUNCEMENT ON 7. FILE SENT TO THE BENCH CLERK 8. DATE ON WHICH FILE GOES TO THE 9. DATE OF DISPATCH OF ORDER