S.Kumari, CHENNAI V. ITO Non Corporate Ward 15(20, CHENNAI

ITA 2419/CHNY/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 0209 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 23-08-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: G CHANDRABABU
• Assessee Lawyers: S SRIDHAR
• Keywords: Capital asset; Capital Gains

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: CHENNAI . . , . , BEFORE SHRI DUVVURU R.L. REDDY, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ ITA NOS.2419 & 2420/CHNY/2018 /ASSESSMENT YEARS: 2011-12 & 2012-13 SMT. S.KUMARI, PLOT NO.4, 75H, SWAMINATHAN NAGAR, 6 TH MAIN ROAD, KOTTIVAKKAM, THIRUVANMIYUR, CHENNAI-600 041. V. THE INCOME TAX OFFICER, NON-CORPORATE WARD-15(2), CHENNAI. [PAN: CKBPK 5836 M] ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR.S.SRIDHAR, ADV. /RESPONDENT BY : MR.G. CHANDRABABU, SR.DR /DATE OF HEARING : 07.12.2020 /DT. OF PRONOUNCEMENT : 11.12.2020 / O R D E R PER SHRI S. JAYARAMAN, ACCOUNTANT MEMBER: THE ASSESSEE FILED THESE APPEALS AGAINST THE ORDER S OF THE COMMISSIONER OF INCOME TAX (APPEALS)-15, CHENNAI, I N ITA NO.132 & 133/2015-16/CIT(A)-15 DATED 31.05.2018 FOR THE AYS 2011-12 & 2012-13. 2. THE ASSESSING OFFICER (IN SHORT AO') ON RECEIPT OF INFORMATION THAT MRS.S.KUMARI, THE ASSESSEE, RECEIVED RS.10 LAKHS DU RING THE FINANCIAL YEAR 2010-11 & RS.1.20 CRS. DURING THE FINANCIAL YEAR 20 11-12 BUT DID NOT FILE RETURNS OF INCOME FOR THE RELEVANT ASSESSMENT YEARS AND HENCE, ISSUED NOTICES U/S.148 OF THE ACT FOR THE RESPECTIVE ASSES SMENT YEARS. ITA NOS.2419 & 2420/CHNY/2018 :- 2 -: SMT.S.KUMARI FILED HER RETURNS, INTER ALIA, CLAIMIN G THAT THE AMOUNT RECEIVED WAS THE FAMILY COMPENSATION FOR RELINQUISHMENT OF H ER FAMILY TENANCY RIGHTS AND FOR VACATING HER FAMILY FROM THE SAID PREMISE W HERE SHE AND HER FAMILY RESIDED ABOUT 50 YEARS AND THEREFORE, THE AMOUNT RE CEIVED WAS TOWARDS MEMBERS EXTINGUISHMENT OF TENANCY RIGHTS OF THE PRO PERTY, IN WHICH, HER SHARE WAS 1/4 TH AND ACCORDINGLY ARRIVED THE LONG TERM CAPITAL GAIN S. SINCE SHE HAS INVESTED IN A RESIDENTIAL PROPERTY, SHE CLA IMED EXEMPTION U/S.54F. WITH REGARD TO 3/4 TH SHARE OF INCOME OF OTHER FAMILY MEMBERS, DURING TH E ASSESSMENT PROCEEDINGS OF ASSESSMENT YEARS 2010-11 & 2011-12, THE ASSESSEE FURNISHED A COPY OF RETURN OF MR.C.SUNDAR KUMAR, WHEREIN, HE HAS ADMITTED LONG TERM CAPITAL GAINS OF HIS SHARE AND A LSO THE PAN PARTICULARS OF MS.K.NISHA & MR.SELVAKUMAR. THE AO FROM THE SAL E DEED AND FROM THE INFORMATION OBTAINED U/S.133(6) FOUND THAT M/S.PEE & DEE LAND HOLDINGS PVT. LTD., ON BEHALF OF THE SELLERS, MR.M.K. DURAIR AJ NAICKER AND 63 OTHERS (THE LEGAL HEIRS OF DR.M.T.KUPPUSAMY NAICKER) OF TH E IMPUGNED PROPERTY, PAID RS.1.30 CRS. ON VARIOUS DATES DURING THESE ASS ESSMENT YEARS AND M/S.PEE & DEE LAND HOLDINGS PVT. LTD., CONFIRMED TH AT NATURE OF AMOUNT PAID TO SMT.S.KUMARI WAS TOWARDS RELINQUISHMENT OF TENANCY RIGHTS. THE AO HELD THAT SINCE THE SALE DEED MENTIONS THAT THE BUYER OF THE PROPERTY PAID RS.1.30 CRS. TO SMT.S.KUMARI ONLY TOWARDS SETT LEMENT ON BEHALF OF THE VENDORS TO SECURE THE POSSESSION OF THE IMPUGNED PR OPERTY AND NOTHING IS STATED ABOUT THE COMPENSATION TO THE ENTIRE FAMILY OF SMT.S.KASTURI, SHE NEITHER OWNED THE PROPERTY SOLD NOR PLACED ANY EVID ENCE TOWARDS FIVE DECADE TENANCY AND HENCE ASSESSED THE ENTIRE RECEIP T AS ASSESSEES INCOME ITA NOS.2419 & 2420/CHNY/2018 :- 3 -: UNDER THE OTHER SOURCES AND TAXED IN THE RESPECTI VE ASSESSMENT YEARS. AGGRIEVED, THE ASSESSEE FILED APPEALS BEFORE THE CO MMISSIONER OF INCOME TAX(A) AND THE LD.CIT(A) DISMISSED THEM. AGGRIEVED AGAINST THOSE ORDERS, THE ASSESSEE FILED THESE APPEALS WITH THIS TRIBUNAL . 3. THESE CASES WERE HEARD THROUGH VIDEOCONFERENCING . THE LD.AR SUBMITTED THAT THE AO HAS EXAMINED THE SALE DEED AN D FOUND THAT THE SELLERS ARE MR.M.K. DURAIRAJ NAICKER AND 63 OTHERS (THE LEGAL HEIRS OF DR.M.T.KUPPUSAMY NAICKER) AND THE PURCHASER IS M/S. PEE & DEE LAND HOLDINGS PVT. LTD. THEY HAVE MENTIONED IN THE SALE DEED THAT MRS.S.KUMARI WAS PAID A COMPENSATION OF RS.1.30 CRS. THE PURCHA SER, M/S.PEE & DEE LAND HOLDINGS PVT. LTD., HAS CERTIFIED THAT THE NAT URE OF AMOUNT TO THE TUNE OF RS.1.3 CRS. WAS PAID TO MRS.S.KUMARI TOWARDS REL INQUISHMENT OF HER FAMILY TENANCY RIGHTS AND ALSO VACATING HER FAMILY FROM THE SAID PREMISES. SMT.S.KUMARIS FATHER LIVED IN THE PREMISES FOR MOR E THAN 40 YEARS. AFTER HIS DEATH, SMT.S.KUMARI, HER HUSBAND AND HER CHILDR EN LIVED THEREIN, APART FROM EARNING CERTAIN PARKING FEE. THUS, IT IS CLEA R THAT MRS.S.KUMARI AND HER FAMILY MEMBERS HAD CERTAIN RIGHTS IN THE IMPUGN ED PROPERTY AND IN ORDER TO ENSURE THAT THE BUYER HAS AN ABSOLUTE ENJO YMENT OF THE PROPERTY RELINQUISHMENT OF THE ASSESSEE AND HER FAMILY MEMBE RS RIGHTS ARE ABSOLUTELY REQUIRED AND HENCE ON BEHALF OF THE SELL ERS, THE PURCHASER PAID THE MONEY, WHICH IS NOT IN DISPUTE. THEREFORE, THE ASSESSEE AND HER FAMILY MEMBERS RIGHTS IN THE PROPERTY CERTAINLY FALLING U NDER THE DEFINITION OF CAPITAL ASSET WITHIN THE SCOPE OF SEC.2(14) R.W.S.2 (47). THE LD.AR INVITED ITA NOS.2419 & 2420/CHNY/2018 :- 4 -: OUR ATTENTION TO THE PAPER BOOK, WHEREIN, THE DETAI LS OF ADMISSION OF INCOME UNDER THE HEAD CAPITAL GAINS IN THE NAME OF ASSES SEES FAMILY MEMBERS VIZ., MR.C. SUNDAR KUMAR, MR.SELVAKUMAR AND MS.K.NI SHA, ETC., WERE PLACED AND SUBMITTED THAT THE ASSESSEES FAMILY MEMBERS HA VE ADMITTED THE GAINS ARISING OUT OF CAPITAL GAINS IN THEIR RESPECTIVE RE TURNS. IN THE CASE OF MS.K.NISHA, THE AO EXAMINED THE TRANSACTION U/S.143 (3) R.W.S.147 DATED 27.12.2016 AND ACCEPTED HER LTCG AND ALLOWED THE CO RRESPONDING DEDUCTION U/S.54F ALSO. THEREFORE, THE LD.AR SUBMI TTED THAT THE AO AS WELL AS THE APPELLATE AUTHORITY ERRED IN DECIDING THE AS SESSEES CASES AND HENCE PLEADED TO ALLOW THE ASSESSEES APPEAL. PER CONTRA , THE LD.DR SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. 4. WE HEARD THE RIVAL SUBMISSIONS AND GONE THROUGH THE RELEVANT MATERIALS. MRS.S.KUMARI, THE ASSESSEE, STATES THAT SHE RECEIVED THE IMPUGNED AMOUNT TOWARDS HER FAMILY COMPENSATION FOR EXTINGUISHMENT OF TENANCY RIGHTS AND VACATING THE FAMILY FROM THE SAI D PREMISES, WHEREIN, HER FAMILY RESIDED FOR ABOUT 50 YEARS. THEREFORE, SUCH IMPUGNED AMOUNT WAS DISTRIBUTED AMONG THE FAMILY MEMBERS ACCORDING TO T HEIR SHARE. SHE CLAIMED EXEMPTION U/S.54F ON GAINS ARISING FROM HER SHARE OF SALE CONSIDERATION. SIMILARLY, THE OTHER FAMILY MEMBERS HAVE ALSO ADMITTED THE LONG TERM CAPITAL GAINS AND CLAIMED APPROPRIATE REL IEF IN THE IRRESPECTIVE RETURNS FILED BEFORE THE INCOME TAX DEPARTMENT. I N THE CASE OF MS.K.NISHA, THIS TRANSACTION WAS EXAMINED BY THE REVENUE U/S.14 3(3) OF THE IT ACT AND WAS ACCEPTED, SUPRA. IT IS CLEAR FROM THE SALE DEE D THAT THE SELLERS AS WELL ITA NOS.2419 & 2420/CHNY/2018 :- 5 -: AS THE PURCHASER HAVE MENTIONED THAT THEY HAVE PAID AN AMOUNT OF RS.1.30 CRS. THUS, BOTH THE SELLERS AND THE PURCHASER HAS R ECOGNIZED THE RIGHTS OF THE ASSESSEE AND PAID DUE CONSIDERATION FOR AN ABSO LUTE ENJOYMENT OF THAT PROPERTY. FURTHER, THE PURCHASER HAS ALSO CERTIFIE D BEFORE THE AO THAT THE AMOUNT PAID TO MRS.S.KUMARI TOWARDS EXTINGUISHMENT OF TENANCY RIGHTS. THUS, THE ASSESSEE HAS ESTABLISHED THAT SHE AND HER FAMILY MEMBERS HAD CERTAIN RIGHTS IN THE PROPERTY. THE REVENUE HAS AL SO EXAMINED THIS ISSUE, SUBSEQUENTLY, IN THE CASE OF MS.K.NISHA, ONE OF THE FAMILY MEMBERS AND ACCEPTED HER CLAIM, SUPRA. THEREFORE, IT IS CLEAR T HAT SUCH RIGHTS ARE FALLING U/S.2(14) R.W.S.2(47) OF THE ACT AND HENCE THE IMPU GNED INCOME IS TO BE ASSESSED UNDER THE HEAD CAPITAL GAINS ONLY TO THE EXTENT OF EACH OF THE FAMILY MEMBERS SHARE OF GAINS ALONE. SINCE, THE AO HAS ASSESSED THE ENTIRE INCOME UNDER THE HEAD OTHER SOURCES ALONE IN THE ASSESSEES HAND AND HAS NOT EXAMINED THE RELIEF ALLOWABLE U/S.54F, WE DIREC T THE AO TO ASSESS 1/4 TH OF THE SHARE OF LTCG IN THE ASSESSEES HAND, AS ADM ITTED BY THE ASSESSEE. HE SHALL EXAMINE THE ASSESSEES CLAIM U/S.54F IN AC CORDANCE WITH LAW AND ALLOW THE APPROPRIATE RELIEF U/S.54F. SINCE, THE L D.AR HAS NOT PRESSED OTHER GROUNDS OF APPEALS, THEY ARE TREATED AS DISMISSED. 5. IN THE RESULT, THE APPEALS FILED BY THE ASSESSE E FOR THE AYS 2011-12 & 2012-13 ARE PARTLY ALLOWED. ORDER PRONOUNCED ON THE 11 TH DAY OF DECEMBER, 2020, IN CHENNAI. SD/- SD/- ( . . ) (DUVVURU R.L. REDDY) /JUDICIAL MEMBER ( . ) (S. JAYARAMAN) /ACCOUNTANT MEMBER ITA NOS.2419 & 2420/CHNY/2018 :- 6 -: /CHENNAI, /DATED: 11 TH DECEMBER, 2020. TLN /COPY TO: 1. /APPELLANT 4. ' /CIT 2. /RESPONDENT 5. /DR 3. ' ( ) /CIT(A) 6. /GF