Smt. Munilakshmi, Bangalore V. Income Tax Officer, Ward- 3(2)(3), Bangalore

ITA 2065/BANG/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 5311 (ITAT-BANGALORE)
• Duration Of Justice: 11 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-09-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 03-09-2020
• Assessment Year: 2015-2016
• Appeal Filed On: 25-09-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RAVI KIRAN M
• Keywords: TDS; Capital Gains; FORM 26AS
• Section: 54; 54F

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI A.K GARODIA, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER ITA NO.2064 & 2065/BANG/2019 ASSESSMENT YEAR : 2015-16 1)SMT. MUNILAKSHMI,(2064) 2)SMT. LAKSHMI DEVI (2065) NO.17, NEAR KARAGADAMMA TEMPLE, KOTE KENGERI, BENGALURU-560 060. 1)PAN CLAPM 6313 H 2)PAN AGBPD 9317 L VS. THE INCOME-TAX OFFICER, WARD-3(2)(3), BENGALURU. APPELLANT RESPONDENT APPELLANT BY : SHRI RAVI KIRAN M, C.A RESPONDNET BY : SHRI S SUNDAR RAJAN, ADDL. CIT (DR) DATE OF HEARING : 03-09-2020 DATE OF PRONOUNCEMENT : 21-09-2020 ORDER PER BEENA PILLAI, JUDICIAL MEMBER PRESENT APPEALS HAVE BEEN FILED BY ASSESSEE IS AGAI NST SEPARATE ORDERS DATED 31/07/2019 PASSED BY LD. CIT (A)-3, BANGALORE, FOR ASSESSMENT YEAR 2015-16 ON FOLLOWIN G GROUNDS OF APPEAL: PAGE 2 OF 9 ITA NO.2064 & 2065/BANG/2019 ITA NO.2064/BANG/2019 THE IMPUGNED APPELLATE ORDER DATED: 3 1-07-2019 PASSED THE LD. CIT(A), BANGALORE-3 IS OPPOSED TO LA W, FACTS CIRCUMSTANCES OF THE CASE. 2 THE ID. CIT(A) HAS ERRED IN HOLDING THAT A SUM OF RS.1,37,00,000/- BEING A PART OF THE SALE CONSIDERATION IS AGREEABLE TO TAX IN THE HANDS OF T HE APPELLANT WITHOUT APPRECIATING THE FACT THAT THE APPELLANT WAS ENTITLED TO 1/6TH SHARE OF THE SALE PROCEEDS OF RS.66,66,666/- ATTRIBUTABLE TO HER CO- PARCENERY SHARE OUT OF THE TOTAL SALE CONSIDERATION OF RS.4,00,00,000/-. RS 38,70,26O/ 3 THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE APPE LLANT WAS NOT ENTITLED FOR DEDUCTION ADMISSIBLE U/S. 54F( 1 )(A) OF THE ACT WITHOUT APPRECIATING THE FACT THAT THE PROVISION OF SECTION 4F(1)(B) NEEDS TO BE READ TOGE THER AND NOT IN ISOLATION. SAME AS ABOVE 4 THE LD. CIT(A) HAS ERRED IN DIRECTING THE AO TO G ROSS UP THE CONSIDERATION AT RS. 1,39,00,000/- BY INCLUDING TDS OF RS.2,00,000/- AS AGAINST RS.1,37,00,000/- BEING A PART OF THE CONSIDERATION AS SPECIFIED IN THE SALE DEED. SAME AS ABOVE 5 THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE COND ITIONS FOR AVAILING THE DEDUCTION U/S. 54 AND 54F ARE DIFFERENT AND THE DECISION RENDERED U/S. 54 CANNOT BE MADE APPLICABLE TO CLAIM IE DEDUCTION U/S. 54F. SAME AS ABOVE 6 THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND A ND DELETE AN OF THE GROUNDS AT THE TIME OF HEARING. 38,70,260/- ITA NO.2065/BANG/2019 1 THE IMPUGNED APPELLATE ORDER DATED: 3 1-07-2019 PASSED THE LD. CIT(A), BANGALORE-3 IS OPPOSED TO LA W, FACTS CIRCUMSTANCES OF THE CASE. 2 THE ID. CIT(A) HAS ERRED IN HOLDING THAT A SUM OF RS.1,37,00,000/- BEING A PART OF THE SALE CONSIDERATION IS AGREEABLE TO TAX IN THE HANDS OF T HE APPELLANT WITHOUT APPRECIATING THE FACT THAT THE APPELLANT WAS ENTITLED TO 1/6TH SHARE OF THE SALE PROCEEDS OF RS.66,66,666/- ATTRIBUTABLE TO HER CO- PARCENERY SHARE OUT OF THE TOTAL SALE CONSIDERATION OF RS.4,00,00,000/-. RS 45,93,16O/- 3 THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE APPE LLANT WAS NOT ENTITLED FOR DEDUCTION ADMISSIBLE U/S. 54F( 1 )(A) OF THE ACT WITHOUT APPRECIATING THE FACT THAT THE PROVISION OF SECTION 4F(1)(B) NEEDS TO BE READ TOGE THER AND NOT IN ISOLATION. SAME AS ABOVE 4 THE LD. CIT(A) HAS ERRED IN DIRECTING THE AO TO G ROSS UP THE CONSIDERATION AT RS. 1,39,00,000/- BY INCLUDING TDS OF RS.2,00,000/- AS AGAINST RS.1,37,00,000/- BEING A PART OF THE CONSIDERATION AS SPECIFIED IN THE SALE DEED. SAME AS ABOVE 5 THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE COND ITIONS FOR AVAILING THE DEDUCTION U/S. 54 AND 54F ARE SAME AS ABOVE PAGE 3 OF 9 ITA NO.2064 & 2065/BANG/2019 DIFFERENT AND THE DECISION RENDERED U/S. 54 CANNOT BE MADE APPLICABLE TO CLAIM IE DEDUCTION U/S. 54F. 6 THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND A ND DELETE AN OF THE GROUNDS AT THE TIME OF HEARING. 45,93,160/- BRIEF FACTS OF CASE ARE AS UNDER: 2. ON PERUSAL OF RECORDS, WE NOTE THAT, ISSUE ALLEG ED BY ASSESSEE IS IN BOTH APPEALS RELATE TO SHARE IN SALE CONSIDERATION AT ATTRIBUTABLE TO THE RESPECTIVE ASS ESSEES IN PROPERTY SOLD SITUATED AT SURVEY NO. 81/2 MEASURING CHECK. L ACRE 20.04 GUNTAS IN KENGERI VILLAGE, KENGERI HOBL EY, BANGALORE SOUTH TALUK. IN SUBMISSIONS BEFORE AUTHOR ITIES BELOW, BOTH ASSESSEES CLAIMED THAT, THEY ARE ENTIT LED TO 1/6 TH SHARE, IN THE TOTAL PROPERTY UNDER HINDU SUCCESS ION ACT AND THAT, THEY HAVE SOLD THE JOINT PROPERTY ALO NG WITH THEIR MOTHER, 1 SISTER AND SONS OF THEIR BROTHERS F OR TOTAL CONSIDERATION OF RS. 4 CRORE UNDER REGISTERED SALE DEED DATED 27/07/2014 IN FAVOUR OF M/S.VASTHU PROPERTIES. 3. ASSESSEES ALSO CLAIMED DEDUCTION UNDER SECTION 54F TOWARDS INVESTMENT IN NEW RESIDENTIAL PROPERTY. 4. LD.AO VERIFICATION OF DOCUMENTS FILED BY ASSESSE E OBSERVED THAT, ASSESSEE WAS ENTITLED TO 1/4 TH SHARE AS AGAINST 1/6 SHARE CLAIMED TO HAVE BEEN RECEIVED. 5. INSOFAR AS CLAIM UNDER SECTION 54F WAS CONCERNED , LD.AO OBSERVED THAT, ASSESSEE INVESTED IN CONSTRUCT ION OF RESIDENTIAL PROPERTY AMOUNTING TO RS.16,44,772/- IN THE NAME OF HER SON, AND PURCHASED AGRICULTURAL LAND JO INTLY WITH HER SISTER SMT.MUNIAMMA (ASSESSEE BEFORE US) AMOUNTING TO RS.1,03,78,070/-. PAGE 4 OF 9 ITA NO.2064 & 2065/BANG/2019 6. LD.AO, ACCORDINGLY, REJECTED CLAIM UNDER SECTION 54F AND CONSIDERED SALE CONSIDERATION IN THE HANDS OF A SSESSEES BEING 1/4 TH SHARE OF TOTAL SALE CONSIDERATION. 7. AGGRIEVED BY ADDITIONS MADE BY LD.AO, ASSESSEE PREFERRED APPEAL BEFORE LD.CIT(A). 8. LD.CIT(A) PROCEEDED ON THE FOOTING THAT, SON OF OWNERS WERE NEVER HELD IT TO BE PART OF THE PROPERTY, AND THAT THE OWNERSHIP OF THE LAND SOLD WAS HELD BY ASSESSEE, HE R MOTHER AND 2 SISTERS. LD.CIT(A) THUS HELD THAT, ASSESSEE W AS ENTITLED TO 1/4 TH SHARE BEING RS.1,37,00,000/- OF TOTAL SALE CONSIDERATION AS AGAINST RS.66,66,666/- DECLARED BY ASSESSEE. 9. LD.CIT(A) HELD AS UNDER: 4.2 DURING APPELLATE PROCEEDINGS THE APPELLANT HA S MADE DETAILED SUBMISSIONS. THE APPELLANT HAS ARGUED THAT ONE OF T HE APPELLANT'S SISTERS WAS HAVING TWO SONS AND THEY TOO HAD EQUAL RIGHT OVER THE LAND SOLD AND AS SUCH THERE WERE 6 CO-OWNERS OF THE PROPERTY. HOWEVER A PERUSAL OF THE JUDGMENT AND DECREE DT 29. 05.2003 IN CIVIL SUIT O.S. NO 369/2001, AND THE SALE DEED DATE D 22.07.2014 SHOWS THAT THE GRANDSONS WERE NEVER HELD TO BE OWNE RS OF ANY PART OF' THIS PROPERTY. THE OWNERSHIP WAS OF' FOUR PERSO NS ONLY BEING THE APPELLANT, HER MOTHER AND TWO SISTERS. IN FACT, THE TWO GRAND CHILDREN, BEING TWO CHILDREN OF SMT. LAKSHMI DEVI, SIGNED THE SALE DEED AS CONSENTING WITNESS AND AS PET- CLAUSE 12 OF THE SALE DEED, THEY AGREED THAT THE FOUR VENDORS (APPELLANT, HER MOTHER AND TWO SISTERS) WERE THE ABSOLUTE OWNERS OF THE PROPERTY. FURTHER THE APPELLANT RECEIVED AMOUNT OF RS 1,37,00,000/- AS HE R SHARE IN THE PROPERTY AS PER THE INSTRUCTIONS OF ALL THE CO-OWNE RS. THIS IS CLEARLY INDICATED IN CLAUSE 3 OF THE SALE DEED. AS REGARDS TDS, THE APPELLANT AND ONE OF HER SISTERS, WHO WERE HAVING PAN WERE GI VEN CREDIT OF KS 2,00000/- EACH AND AS SUCH THEIR FORM 26AS SHOWED T HE RECEIPT OF KS 2,00,00,000/- AND TDS OF RS 2,00,000/- EACH. CON SIDERING ABOVE THE ACTION OF THE AO IN TREATING THE SALE CON SIDERATION AT RS 1,37,00,000/- IS UPHELD AND THE GROUNDS OF APPEAL 2 AND 3 OF THE APPELLANT ARE DISMISSED. 10. IN RESPECT OF CLAIM UNDER SECTION 54F, LD.CIT(A ) WAS OF THE OPINION THAT, EXEMPTION CANNOT BE GRANTED TO AS SESSEE PAGE 5 OF 9 ITA NO.2064 & 2065/BANG/2019 AS THE PROPERTY PURCHASED WAS IN THE NAME OF HER SO N AND INVESTMENT WAS MADE IN AGRICULTURAL LAND. 11. AGGRIEVED BY ADDITIONS CONFIRMED BY LD.CIT(A), ASSESSEE IS IN APPEAL BEFORE US NOW. 12. AT THE OUTSET LD.AR SUBMITTED THAT, SUIT FOR P ARTITION IN OS NO. 369 OF 2001 WAS FILED IN THE COURT OF ADD ITIONAL CITY CIVIL JUDGE BANGALORE, BY SMT. BHAGYA, DAUGHTE R-IN-LAW OF LATE NARASIMHA ALIAS K.MUNIYAPPA. IT HAS BEEN SU BMITTED THAT, JUDGMENT AND DECREE WAS PASSED BY HONBLE CIT Y CIVIL COURT DATED 29/05/2003, ACCORDING TO WHICH, ALL LEG AL HAIRS OF LATE NARASIMHA ALIAS K.MUNIYAPPA WAS ENTITLED TO 1/6 TH SHARE OF LAND, ADMEASURING 1 ACRE 20.04 GUNTAS. HE SUBMITTED THAT, ACCORDING TO THE ORDER BY HONBLE C ITY CIVIL COURT, SALE CONSIDERATION HAS TO BE DIVIDED AMONGST , ASSESSEE HER MOTHER 2 SISTERS AND WIFE OF DECEASED BROTHER BEING SMT. BHAGYA. 13. LD. A.R. SUBMITTED THAT, THIS ASPECT HAS NOT BE EN CONSIDERED BY AUTHORITIES BELOW, BECAUSE OF WHICH, ADDITION HAS BEEN MADE IN THE HANDS OF ASSESSEE BY CONSIDERI NG 1/4 TH SHARE OF SALE CONSIDERATION. HE PLACED RELIANCE ON ORDERS PASSED BY THE HONBLE CITY CIVIL COURT PLACE D AT PAGE 37-59 OF PAPER BOOK. 14. LD.SR.DR PLACED RELIANCE ON OBSERVATIONS BY LD. CIT(A) IN PARA 4.2 OF IMPUGNED ORDER. 15. WE HAVE PERUSED SUBMISSIONS ADVANCED BY BOTH SI DES IN LIGHT OF RECORDS PLACED BEFORE US. 16. ON PERUSAL OF SALE DEED PLACED AT PAGE 16-36, W E NOTE THAT, ORIGINAL VENDORS TO THE AGREEMENT, WERE ASSES SEE ALONG PAGE 6 OF 9 ITA NO.2064 & 2065/BANG/2019 WITH HER MOTHER AND 2 SISTERS. IT IS ALSO RECORDED IN SALE DEED THAT, BY VIRTUE OF JUDGMENT AND DECREE DATED 29/05/2003, WIDOW OF LATE M.MURTHY AND HER SON PRAK ASH WERE ALSO CONSIDERED TO BE HOLDING SHARE IN THE SAI D PROPERTY SOLD BY ASSESSEE, HER MOTHER AND 2 SISTERS. MERELY BECAUSE SALE CONSIDERATION WAS DISTRIBUTED AMONGST ASSESSEE HER MOTHER AND 2 SISTERS, WILL NOT DISSOLVE THE RIGHT O F WIDOW OF LATE M.MURTHY AND HER SON PRAKASH. HOWEVER AMOUNT DISBURSED TO THESE LEGAL HAIRS IS NOT CLEAR FROM TH E SALE AGREEMENT FILED IN THE PAPER BOOK. UNDER SUCH CIRCUMSTANCES WE FIND IT NECESSARY TO SEND BACK THI S ISSUE TO LD. AO FOR VERIFICATION IN RESPECT OF SHARE RECE IVED BY WIDOW OF LATE M.MURTHY AND HER SON PRAKASH FROM SAL E PRICE OF LAND AT MEASURING 1 ACRE 20.04 GUNTA, BEARING SU RVEY NO. 81/2. 17. WE DIRECT LD. AO TO CALL FOR THESE PEOPLE TO EN QUIRE UPON AMOUNT DISBURSED TO THEM AND ACCORDINGLY COMPU TE SHARE RECEIVED BY ASSESSEES BEFORE US FOR PURPOSES OF CAPITAL GAINS. ACCORDINGLY THIS ISSUE RAISED BY ASSESSEE STANDS AL LOWED FOR STATISTICAL PURPOSES. 18. IN RESPECT OF CLAIM UNDER SECTION 54F TOWARDS INVESTMENT IN PROPERTY IN THE NAME OF A SON, WE ARE OF THE OPINION THAT, STRICT INTERPRETATION CANNOT BE GIVEN TO EXEMPTION PROVISIONS. AS WE HAVE ALREADY REMITTED T HE ISSUE IN RESPECT OF SALE CONSIDERATION TO BE COMPUTED IN THE HANDS OF ASSESSEE TO LD.AO, THIS ISSUE ALSO IS REMANDED T O LD.AO TO PAGE 7 OF 9 ITA NO.2064 & 2065/BANG/2019 DETERMINED CLAIM UNDER SECTION 54F IN ACCORDANCE WI TH SHARE COMPUTED IN THE HANDS OF ASSESSEE. 19. WE ALSO MAKE IT CLEAR THAT, INVESTMENT MADE BY ASSESSEE JOINTLY WITH HER SISTER AND AGRICULTURAL L AND CANNOT BE CONSIDERED FOR EXEMPTION UNDER SECTION 54F AND ACCORDINGLY REJECTED. LD. AO MAY CONSIDER INVESTMEN T BY ASSESSEES IN RESPECT OF RESIDENTIAL PROPERTY TO TH E EXTENT OF SHARE COMPUTED IN THEIR HANDS OF ASSESSEE. ASSESSE ES ARE DIRECTED TO FURNISH ALL RELEVANT DETAILS/EVIDENCE I N SUPPORT OF THEIR CLAIM TO SUBSTANTIATE INVESTMENT IN RESIDENTI AL PROPERTY. ACCORDINGLY THIS GROUND RAISED BY ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. 20. FACTS AND ISSUES RAISED BY ASSESSEE IN ITA NO. 2065/B/2019 ARE SIMILAR AND IDENTICAL. APPLYING ARE OBSERVATION MUTATIS MUTANDIS , WE REMAND ISSUES RAISED LD.AO TO CONSIDER THE CLAIM IN ACCORDANCE WITH DIRE CTIONS HEREINABOVE. IN THE RESULT APPEAL IS FILED BY ASSESSEE IS BEFORE US STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST SEPT, 2020. SD/- SD/- (A.K GARODIA) (BEENA PILLAI) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE, DATED, THE 21 ST SEPT., 2020. /VMS/ PAGE 8 OF 9 ITA NO.2064 & 2065/BANG/2019 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL. BANGALORE. PAGE 9 OF 9 ITA NO.2064 & 2065/BANG/2019 DATE INITIAL 1. DRAFT DICTATED ON ON DRAGON SR.PS 2. DRAFT PLACED BEFORE AUTHOR -09-2020 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER -09-2020 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. -09-2020 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS -09-2020 SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON -09-2020 SR.PS 7. DATE OF UPLOADING THE ORDER ON WEBSITE -09-2020 SR.PS 8. IF NOT UPLOADED, FURNISH THE REASON -- SR.PS 9. FILE SENT TO THE BENCH CLERK -09-2020 SR.PS 10. DATE ON WHICH FILE GOES TO THE AR 11. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 12. DATE OF DISPATCH OF ORDER. 13. DRAFT DICTATION SHEETS ARE ATTACHED NO SR.PS