Shri T. Ramesh, CHENNAI V. ITO, CHENNAI

ITA 2268/CHNY/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7347 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-03-2017
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 06-03-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 01-08-2016
• Court: TRIBUNAL
• Department Lawyers: M MURUGABOOPATHY
• Assessee Lawyers: M ABHISHEK
• Keywords: Onus to prove
• Section: 143(3); 54F

Judgement Text

, / , IN THE INCOME TAX APPELLATE TRIBUNAL BENCH B/SMC, CHENNAI , ! ' BEFORE SHRI SANJAY ARORA, ACCOUNTANT MEMBER ./ITA NO.2268/MDS/2016 # $ %&$ / ASSESSMENT YEAR : 2012-13 T. RAMESH, J 61/6, VARASIDHI APARTMENTS, 2 ND MAIN ROAD, ANNA NAGAR, CHENNAI 600 102. [PAN: AADPR 1610E] ( '( /APPELLANT) VS. INCOME TAX OFFICER, NON CORPORATE WARD-17(1) CHENNAI 600 034. ( )*'( /RESPONDENT) '( + , /APPELLANT BY : SHRI M.ABHISHEK, ADVOCATE )*'( + , /RESPONDENT BY : SHRI M.MURUGA BOOPATHY, ADDL . CIT - % + . /DATE OF HEARING : 06.03.2017 /& + . /DATE OF PRONOUNCEMENT : 30.03.2017 /O R D E R PER SANJAY ARORA, AM : THIS IS AN APPEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS)-5, CHENNAI (C IT(A) FOR SHORT) DATED 11.04.2016, DISMISSING THE ASSESSEES APPEAL CONTES TING ITS ASSESSMENT U/S. 143(3) OF THE INCOME TAX ACT, 1961 (THE ACT HEREI NAFTER) DATED 30.12.2014 FOR ASSESSMENT YEAR (AY) 2012-13. 2 ITA NO.2268 /MDS/2016 (AY 2012-13) T.RAMESH V. ITO 2. THE BRIEF, UNDISPUTED FACTS OF THE CASE ARE THA T THE ASSESSEE, HAVING 1/6 TH SHARE IN A PROPERTY LOCATED AT KILPAUK WATER WORKS COLONY, CHENNAI, ENTERED INTO A SALE AGREEMENT ON 06.04.2011 (COPY ON RECORD ) FOR SALE OF THE SAID PROPERTY (ORIGINAL ASSET), ALONG WITH SEVEN OTHER C O-OWNERS, FOR A TOTAL CONSIDERATION OF . 318 LACS, WHICH WAS PAID SEPARATELY TO EACH CO-OW NER; THE ASSESSEE RECEIVING HIS SHARE (OF .53 LACS) VIDE PAY ORDER DATED 05.04.2011. A POWER OF ATTORNEY WAS ALSO EXECUTED BY THE VENDORS IN FAVOUR OF THE PURCHASER, I.E., PAXAL TRADING COMPANY, A PROPRIETARY CONCERN OF ONE, MR. DINKAR S/O SRI PELKAR. THE ENTIRE SALE CONSIDERATION WAS INVESTED IN THE PURCHASE OF A RESIDENTIAL FLAT AT ANNA NAGAR, EAST CHENNAI (HEREI NAFTER THE NEW ASSET) VIDE SALE DEED DATED 26.09.2011, COSTING OF . 68 LACS, I.E., BESIDES INCURRING OTHER EXPENDITURE, STATED TO BE AT . 7.68 LACS, THEREON. THE ADDITIONAL AMOUNT, I.E., OVER AND ABOVE THE SALE CONSIDERATION OF . 53 LACS, I.E., . 22.68 LACS, WAS STATED AS FINANCED BY BORROWINGS AS WELL AS SAVINGS OF . 2.68 LACS. THE EXEMPTION U/S. 54F, I.E., IN COMPUTING LONG-TERM CA PITAL GAIN (LTCG) CHARGEABLE U/S. 45, THUS, EXTENDED TO THE ENTIRE NE T CONSIDERATION, RESULTING IN THE ASSESSEE RETURNING CAPITAL GAINS AT NIL. THE SALE D EED IN RESPECT OF THE ORIGINAL ASSET WAS SUBSEQUENTLY FOUND BY THE REVENUE AS REGI STERED (WITH THE OFFICE OF THE SUB REGISTRAR) ON 06.05.2011 AT . 82.62 LACS, WITH THE ASSESSEE RECEIVING HIS SHARE OF . 13.77 LACS. THE ASSESSEE, THUS, RECEIVING ANOTHER SUM OF . 13.77 LACS, HAD UNDERSTATED THE CAPITAL GAIN TO THAT EXTE NT. IT IS THE ELIGIBILITY OR OTHERWISE IN LAW (AND IN THE FACTS AND CIRCUMSTANCE S OF THE CASE) OF EXEMPTION U/S. 54F QUA THE ADDITIONAL LTCG OF . 13.77 LACS THAT IS THE SUBJECT MATTER OF DISPUTE BETWEEN THE ASSESSEE AND THE REVENUE. THE A SSESSEES CASE IS THAT IT HAVING INVESTED . 75.68 LACS IN THE NEW ASSET, THE SAME WOULD COVER THE ADDITIONAL AMOUNT OF . 13.77 LACS, AND WHICH WOULD BE SO EVEN IF THE COS T OF THE NEW ASSET IS TAKEN AT . 68 LACS ONLY IN-AS-MUCH AS THE ASSESSEE COULD NOT ADMITTEDLY PROVE EXPENDITURE OVER AND ABOVE THE SAI D SUM. THIS IS AS EVEN 3 ITA NO.2268 /MDS/2016 (AY 2012-13) T.RAMESH V. ITO CONSIDERING . 13.77 LACS AS PART OF THE SALE CONSIDERATION, THE SAME WORKS TO . 66.77 LACS (I.E., . 53 LACS + . 13.77 LACS) ONLY. THE REVENUE, ON THE OTHER HAND, IS OF THE VIEW THAT THE ASSESSEE HAS UNDERSTA TED THE SALE CONSIDERATION AND, THUS, THE CAPITAL GAINS, BY THE IMPUGNED SUM, SO TH AT THERE NO QUESTION OF HIS CLAIMING EXEMPTION S. 54F WITH REFERENCE THERETO. THE ASSESSEE BEING UNSUCCESSFUL IN FIRST APPEAL, IS IN SECOND APPEAL. 3. I HAVE HEARD THE PARTIES, AND PERUSED THE MATERI AL ON RECORD. THE FIRST QUESTION THAT ARISES IS WHETHER THE SUM OF . 13.77 LACS IS, AS CONTENDED BY THE ASSESSEE, INCLUDED IN THE DISCLOSE D CONSIDERATION OF . 53 LACS. NO MATERIAL HAS BEEN LED TOWARD THIS AT ANY STAGE. IN FACT, THE LD. AUTHORIZED REPRESENTATIVE (AR) WOULD DURING HEARING INITIALLY DISPUTE THE ADDITIONAL SALE CONSIDERATION OF . 13.77 LACS, STATING THAT THE SALE DEED HAD NOT BE EN CONFRONTED TO THE ASSESSEE. ON THE BENCH STATING TH AT THE SALE DEED, BEING A REGISTERED DOCUMENT, OSTENSIBLY EXECUTED BY THE ASS ESSEE, SO THAT IT CANNOT BE LIGHTLY DISPUTED, AND WOULD REQUIRE BEING VERIFIED, HE CONCEDED, CONFINING HIS CASE TO ADDITIONAL SUM ( . 13.77 LACS) BEING COVERED BY THE TOTAL INVESTMENT , EVEN IF RECKONED AT . 68 LACS, I.E., THE PURCHASE CONSIDERATION OF THE NEW ASSET. IT NEEDS TO BE STATED THAT, CLEARLY, THE SALE DEED IS EXECUTED WITHOUT REFERENCE TO THE SALE AGREEMENT. THIS IS AS THE VERY MENTION OR REFERENCE TO THE SALE AGREEMENT IN THE SALE DEED WOULD IMPLY THAT THE SAL E CONSIDERATION IS STATED AT A MINIMUM OF . 318 LACS. WHAT THEREFORE IS REQUIRED TO BE EXAMINED IS THE R EINVESTMENT OF THE REVISED SALE CONSIDERATION OF . 66.77 LACS, WHICH THE ASSESSEE CLAIMS TO BE COVERED BY THE COST OF THE NEW ASSET, EVEN IF LIMIT ED TO . 68 LACS. THE SAID COST HAS BEEN, AS PER THE ADMITTED POSITION, FINANCED BY THE BORROWINGS IN THE MAIN, AND WHICH COULD EVEN OTHERWISE EASILY BE DETERMINED FOLLOWING THE MONEY TRAIL TO THE SELLER, ONE, MR. EGP HARAN. ONCE THE NEW ASS ET STANDS PURCHASED ON 26.09.2011 FOR . 68 LACS, ITS COST AS WELL AS MEANS OF FINANCING STAND 4 ITA NO.2268 /MDS/2016 (AY 2012-13) T.RAMESH V. ITO CRYSTALLIZED. THE SAME, AS PER ADMITTED POSITION, C OMPRISES . 53 LACS BY WAY OF SALE PROCEEDS (OF THE ORIGINAL ASSET) AND . 15 LACS BY WAY OF BORROWINGS, MADE AT A TOTAL OF . 20 LACS. THE ADDITIONAL CONSIDERATION OF . 13.77 LACS, AVAILABLE TO THE ASSESSEE AS FAR BACK AS ON 06.05.2011, HAS N OT BEEN CHOSEN BY HIM TO BE UTILIZED FOR THE PURCHASE OF THE NEW ASSET. THIS IS PRESUMABLY FOR THE REASON THAT THE SAME WAS NOT INTENDED TO BE DISCLOSED TO THE RE VENUE, SO THAT WHAT COULD BE INVESTED WAS ONLY THE DISCLOSED CONSIDERATION OF . 53 LACS, AND WHICH HAD BEEN. THERE IS ALSO NO QUESTION OF DEPOSIT OF THIS ADDITIONAL SUM ( . 13.77 LACS) IN THE CAPITAL GAINS ACCOUNT SCHEME AS THE PURCHASE OF NEW ASSET STANDS CONCLUDED MUCH PRIOR TO THE DATE OF FILING THE RETU RN ON 31.08.2012. THE ONLY MANNER THEREFORE BY WHICH THE ASSESSEE CAN CLAIM EX EMPTION U/S. 54F WITH REFERENCE TO THE ADDITIONAL CONSIDERATION OF . 13.77 LACS IS BY EXHIBITING ITS UTILIZATION BY REPAYING THE BORROWINGS BY THE DATE OF FILING HIS RETURN U/S. 139, I.E., 31.08.2012. REFERENCE IN THIS CONTEXT MAY BE MADE TO THE DECISION IN HUMAYUN SULEMAN MERCHANT V. CCIT [2016] 73 TAXMANN.COM (2) (BOM). NEEDLESS TO ADD, THE BURDEN TO PROVE THE SAME WOULD BE THE ASSESSEE. 4. THE MATTER, ACCORDINGLY, IS RESTORED TO THE FILE OF THE ASSESSING OFFICER (AO) TO ALLOW THE ASSESSEE AN OPPORTUNITY TO EXHIBI T THE SAME. THE AO SHALL DECIDE ON MERITS, IN TERMS OF THE DIRECTIONS AFORES AID, ISSUING DEFINITE FINDINGS OF FACT, AND AFTER ALLOWING THE ASSESSEE AN OPPORTUNIT Y TO PRESENT HIS CASE BEFORE HIM. IT MAY BE CLARIFIED THAT THIS IS BEING DONE I N THE INTEREST OF JUSTICE AND IN THE EVENT OF THE ASSESSEE NOT EXTENDING CO-OPERATIO N, THE AO SHALL PROCEED TO DECIDE ON THE BASIS OF THE MATERIAL ON RECORD. AT T HE SAME TIME, IT MAY BE ADDED THAT THE REVENUE IS WRONG IN BRINGING THE ENTIRE SU M OF . 13.77 LACS TO TAX. EVEN ASSUMING ITS NON-INVESTMENT, THE ASSESSEE HAS INVESTED . 53 LACS OUT OF THE TOTAL NET CONSIDERATION, I.E., RECKONED INCLUDI NG THE ADDITIONAL SUM OF . 13.77 LACS, AND ACCORDINGLY WOULD BE ENTITLED TO EX EMPTION U/S. 54F ON A PRO RATA BASIS. I DECIDE ACCORDINGLY. 5 ITA NO.2268 /MDS/2016 (AY 2012-13) T.RAMESH V. ITO 5. IN THE RESULT, THE ASSESSEES APPEAL IS DISPOSED OF ON THE AFORESAID TERMS. ORDER PRONOUNCED ON MARCH 30, 2017 AT CHENNAI . SD/- ( ) (SANJAY ARORA) ! /ACCOUNTANT MEMBER /CHENNAI, 0 /DATED, MARCH 30, 2017. EDN 1 + )#.23 43&. /COPY TO: 1. '( /APPELLANT 2. )*'( /RESPONDENT 3. - 5. ( )/CIT(A) 4. - 5. /CIT 5. 3%67 )#.# /DR 6. 78$ 9 /GF