Krishna Das, Kolkata V. ITO, Ward-52(2), Kolkata, Kolkata

ITA 2285/KOL/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 87652 (ITAT-KOLKATA)
• Duration Of Justice: 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-01-2015
• Appeal Filed By: Assessee
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 31-12-2014
• Court: TRIBUNAL
• Department Lawyers: AMITABH CHAU DHURY
• Assessee Lawyers: K M ROY
• Keywords: Opportunity of being heard; Cost of acquisition

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOLKATA [BEFORE SHRI MAHAVIR SINGH, JM & SHRI SHAMIM YAHYA AM ] I.T.A NO.2285/KOL/2014 ASSESSMENT YEAR: 2007 - 08 KRISHNA DAS VS. I.T.O., WARD - 52(2), KOLKATA KOLKATA (APPELLANT) ( RESPONDENT) (PAN: AGQPD 1361 D) S.P.NO.03/KOL/2015 (A/O I.T.A NO.2285/KOL/2015 ASSESSMENT YEAR: 2007 - 08 KRISHNA DAS I.T.O., WARD - 52(2) KOLKATA KOLKATA ( APPELLANT ) ( RESPONDENT) (PAN: AGQPD 1361 D) FOR THE APPELLANT : K.M.ROY, FCA FOR THE RESPONDENT : AMITABH CHAUDHURY, JCIT, SR. DR DATE OF HEARING : 27.01.2015. DATE OF PRONOUNCEMENT: 27.01.2015. ORDER PER SHRI SHAMIM YAHYA, AM : ITA NO.2285/KOL/2014 : THIS APPEAL BY THE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A) - XXXII I, KOLKATA DATED 10.09.2014 AND PERTAIN S TO ASSESSMENT YEAR 2007 - 08. 2. GROUNDS OF APPEAL READ AS UNDER : - 1. THAT THE LOWER AUTHORITIES HAVE ERRED IN COMPUTING LONG TERM CAPITAL GAIN BY NOT CONSIDERING PROPORTIONATE COST OF ACQUISITION VIS - - VIS SHARE OF CONSIDERATION. 2. THAT THE LOWER AUTHORITIES HAVE FAILED TO APPRECIATE THAT WHEN CONSIDERATION HAS OCCURRED EQUALLY TO ASSESSEE, COST NEEDS TO BE SIMILARLY APPORTIONED TO MEET THE LOGICAL END. 3. THAT APPELLANT RESERVES RIGHT TO RAISE ADDITIONAL GROUNDS D URING TIME OF HEARING. 3 . IN THIS CASE THE AO COMPUTED LONG TERM CAPITAL GAIN OF RS.695758/ - IN RESPECT OF TRANSFER OF A FLAT CO - OWNED BY THE ASSESSEE WITH HER HUSBAND. THE ASSESSING OFFICER ITA NO. 2285/K/2014 & S.P.NO.03 / KOL/2015 KRISHNA DAS A.YR. 2007 - 08 2 FOUND THAT THE ASSESSEE HAD SOLD A FLAT OWNED BY HER AND HER H USBAND DURING THE FINANCIAL YEAR FOR TOTAL CONSIDERATION OF RS.2528000/ - . THE ASSESSEE WAS ENTITLED TO HALF OF THE SALE PROCEEDS I.E. RS.1264000/ - . THE ASSESSEE SUBMITTED IN A LETTER DATED 18.12.2009 THAT THE VALUE OF HER SHARE IN THE FLAT WAS SHOWN IN THE BALANCE SHEET FOR THE FINANCIAL YEAR ENDING ON 31.03.2006 AS RS.506929/ - . THE ASSESSING OFFICER COMPUTED THE LONG TERM CAPITAL GAIN BY REDUCING THE INDEXED COST OF ACQUISITION OF RS.568242/ - COMPUTED ON THE BASIS OF THE COST SHOWN IN THE BALANCE SHEET AS AFORESAID FROM THE SHARE OF SALE PROCEEDS OF RS.1264000/ - . ACCORDINGLY, LONG TERM CAPITAL GAIN OF RS.695758/ - WAS BROUGHT TO TAX BY THE ASSESSING OFFICER. 3.1. BEFORE THE LD.CIT(A) ASSESSEE SUBMITTED THAT DURING THE APPELLATE PROCEEDINGS, THE COST OF ACQU ISITION CONSIDERED BY THE ASSESSING OFFICER WAS NOT CORRECT AND THE ACTUAL TOTAL COST OF THE FLAT WAS OF RS.2034400/ - AND THE ASSESSEE S HALF SHARE IN THE SAME WORKED OUT TO RS.1017200/ - . HENCE, THE INDEXED COST OF ACQUISITION SHOULD HAVE BEEN COMPUTED AS RS.1140230/ - AND AN AMOUNT OF RS.246800/ - SHOULD HAVE BEEN ASSESSED AS THE LONG TERM CAPITAL GAIN. 3.2. IN THIS REGARD THE ASSESSEE ALSO SUBMITTED ALLOTMENT LETTER DATED 02.01.2004 ISSUED BY CALCUTTA METROPOLITAN GROUP (THE SELLER OF THE APARTMENT) SHOWIN G TOTAL COST OF RS.2034400/ - . A COPY OF A TRI PARTITE AGREEMENT BETWEEN THE ASSESSEE AND HER HUSBAND ON ONE SIDE AND CALCUTTA METROPOLITAN GROUP AND ALLAHABAD BANK ON THE OTHER WAS ALSO FURNISHED TO SHOW THAT A LOAN OF RS.10 LACS WAS SANCTIONED BY THE BAN K AGAINST THE COST OF THE FLAT WHICH WAS MENTIONED AS RS.2034405/ - IN THE AGREEMENT. IT WAS ALSO CONTENDED THAT ADDITIONAL EXPENDITURE OF RS.1,40,000/ - WAS INCURRED ON ACCOUNT OF REGISTRATION FEES AND OTHER INCIDENTAL EXPENSES LIKE LEGAL EXPENSES, HALF OF WHICH WAS ALSO ADMISSIBLE AS COST OF ACQUISITION IN THE ASSESSEE S HANDS. THE ASSESSEE ALSO EXPLAINED IN HER WRITTEN SUBMISSION THAT ALTHOUGH BOTH THE CO - OWNERS HAD TAKEN LOAN FROM ALLAHABAD BANK, THE LOAN WAS REFLECTED IN THE FIRST OWNER S ACCOUNT, HER HU SBAND BEING THE FIRST OWNER, BECAUSE OF WHICH THE COST OF PROPERTY AS SHOWN IN THE ASSESSEE S ACCOUNTS WAS NOT HALF OF THE TOTAL COST ACTUALLY INCURRED IN PURCHASE OF THE FLAT. ITA NO. 2285/K/2014 & S.P.NO.03 / KOL/2015 KRISHNA DAS A.YR. 2007 - 08 3 3.3. THE LD. CIT(A) HAD SENT THE AFORESAID SUBMISSIONS OF THE ASSESSEE BEFORE T HE AO FOR HIS COMMENTS IN TERMS OF RULE 46A(3) OF THE ACT. AO HAD CONS IDERED THE FRESH EVIDENCES AS AN AFTERTHOUGHT. THE LD. CIT( A) ALSO DID NOT FIND ASSESSEE S SUBMISSIONS COGENT . THE LD. CIT(A) OBSERVED THA T THE ASSESSEE HAS NOT GIVEN SUFFICIENT DETAIL S TO SHOW THAT THE COST IN THE BALANCE SHEET IS NOT CORRECT. HE FURTHER NOTED THAT NO DETAILS OF COST AND SALE PROCEEDS AND THE RESULTANT LONG TERM CAPITAL GAIN SHOWN IN THE FINANCIAL STATEMENTS OR INCOME TAX RETURN IN RESPECT OF HER HUSBAND HAVE BEEN SUBM ITTED TO CORROBORATE THE CLAIM MADE BY THE ASSESSEE THAT THE LOAN WAS SHOWN IN HER HUSBAND S ACCOUNTS IMPLYING DECLARATION OF HIGHER SHARE OF THE LOWER COST IN THE HANDS OF HER HUSBAND. THE LD. CIT(A) PROCEEDED TO REJ ECT THE CLAIM OF THE ASSESSEE AND CONFI RMED THE AO S ORDER. AGAINST THE ABOVE ORDER THE ASSESSEE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD BOTH THE COUNSEL AND CAREFULLY PERUSED THE RECORDS. THE LD. COUNSEL OF THE ASSESSEE SU BMITTED THAT THE COST OF THE LAND IN THE HANDS OF THE ASSESSEE HAS BE EN WRONGLY COMPUTED. HE SUBMITTED THAT THE TOTAL COST OF THE FLAT WAS RS.20,34,400/ - AND HALF OF THAT COST PERTAIN S TO THE ASSESSEE. HE SUBMITTED THAT THE ASSESSEE SHOULD BE GIV EN AN OPPORTUNITY TO CANVASS THE CASE PROPERLY BEFORE THE AO. HE SUBMITTED THAT HE SHALL BE SUBMITTING BEFORE THE AO THE COMPUTATION AND RETURNS SUBMITTED IN THE CASE OF HER HUSBAND TO CORROBORATE HER CASE. THE LD. DR, ON THE OTHER HAND, RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 4.1. WE HAVE CAREFULLY CONSIDERED THE SUBMISS IONS. WE FIND THAT ASSESSEE S CLAIM THAT THE ACTUAL COST OF THE FLAT WAS MUCH MORE THAN WRONGLY REFLECTED IN HER BALANCE SHEET SHOULD BE CONSIDERED BY THE AUTHORITIES BELOW. THE ASSESSEE SHOULD SUPPORT HER CLAIM WITH THE COMPUTATION SUBMITTED IN THE CASE OF HER HUSBAND. FURTHERMORE THE ADDITIONAL DOCUMENTS SUBMITTED BY THE ASSESSEE ALSO NEED TO BE CONSIDERED. ACCORDINGLY WE REMIT THE ISSUE TO THE FILE OF AO. AO SHALL CONSIDER THE ISSUE AFRESH IN TERMS OF OUR OBSERVATIONS AS ABOVE. NEEDLESS TO ADD THE ASSES SEE SHOULD BE GRANTED ADEQUATE OPPORTUNITY OF BEING HEARD. ITA NO. 2285/K/2014 & S.P.NO.03 / KOL/2015 KRISHNA DAS A.YR. 2007 - 08 4 5. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. S.P.NO.03/KOL/2015 (A/O ITA NO.2285/KOL.2014) : 6. BY WAY OF THIS STAY PETITION THE ASSESSEE SEEKS A ST AY OF DEMAND ARISING OUT OF THE LD.CIT(A) S ORDER FOR A.YR.2007 - 08 IN ITA NO.2285/KOL/2014 AS ABOVE. SINCE WE HAVE ALREADY ADJUDICATED THE ABOVE MENTIONED APPEAL OF THE ASSESSEE THIS STAY PETITION BECOMES INFRUCTUOUS. HENCE THE STAY PETITION IS DISMISSED A S INFRUCTUOUS. 7 . IN THE RESULT THE APPEAL FILED BY THE ASSESSEE STAND S ALLOWED FOR STATISTICAL PURPOSES AND THE STAY PETITION FILED BY THE ASSESSEE STAND S DISMISSED AS INFRUCTUOUS. ORDE R PRONOUNCED IN THE OPEN COURT ON 27 /01/2015. SD/ - SD/ - [ MAHAVIR SINGH ] [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 27 /01/2015. R.G.(.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . KRISHNA DAS, 58, SREE RAMPUR EAST, KOLKATA - 700084. 2 I.T.O., WARD - 52 (2), KOLKATA. 3 . CIT(A) - XXXII I, KOLKATA 4. CIT - KOLKATA. 5. CIT - DR, KOLKATA BENCHES, KOLKATA TRUE COPY, BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES