Smt. Durgalakshmi Krishnan, CHENNAI V. ITO, CHENNAI

ITA 2483/CHNY/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8197 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-01-2017
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 26-08-2016
• Court: TRIBUNAL
• Department Lawyers: SHIVA SRINIVASJCIT
• Assessee Lawyers: S DWARAKESH
• Keywords: Cost of acquisition
• Section: 234B

Judgement Text

, A/ SMC , IN THE INCOME TAX APPELLATE TRIBUNAL A/SMC BENCH, CHENNAI . , BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER ./ I.T.A.NO.2483 /MDS./2016 ( / ASSESSMENT YEAR :2011-12) SMT. DURGALAKSHMI KRISHNAN , PLOT NO.20-B,KRISHNA NAGAR, FIFTH STREET, VIRUGAMBAKKAM, CHENNAI 600 092. VS. THE ITO, INTERNATIONAL TAXATION-1(2), CHENNAI-34. PAN BWQPK 5873 C ( / APPELLANT ) ( / RESPONDENT ) ! ' # / APPELLANT BY : MR.S.DWARAKESH C.A $% ! ' # / RESPONDENT BY : MR.SHIVA SRINIVAS,JCIT, D.R & ' ' ( ) / DATE OF HEARING : 30.11.2016 *+ ' ( ) /DATE OF PRONOUNCEMENT : 09.01.2017 / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE ASSESSEE, AGGRIEVED B Y THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(A)-16, CHENN AI DATED 17.05.2016 PERTAINING TO ASSESSMENT YEAR 2011-12. ITA NO.2483 /MDS/2016 2 2. THE MAIN GRIEVANCE OF THE ASSESSEE IN THIS APPE AL IS WITH REGARD TO BRINGING AN AMOUNT OF ` 3,74,866/- AS PART OF SALE CONSIDERATION, THOUGH THE ASSESSEE HAS NOT RECEIVED THE SAME. 3. THE FACTS OF THE ISSUE ARE THAT DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE SOLD A PROPERTY AT BANGA LORE FOR AN AMOUNT OF ` 40.66 LAKHS AND HAD SHOWN SHORT TERM CAPITAL GAINS AT ` 3,80,372/-. ON PERUSAL OF THE DETAILS SUBMITTED BY THE ASSESSEE, THE AO OBSERVED THAT THE ASSESSEE CLAIMED THE COST OF CONSTRUCTION AT ` 35,95,832/-. THE AO ISUSED A SHOW CAUSE NOTICE ST ATING WHOLLY AND EXCLUSIVELY THE CAPITAL GAINS CANNOT BE COMPUTED AT ` 6,19,478/-. HOWEVER, THE ASSESSEE CONTESTED THE ABOVE SHOW-CAUS E NOTICE ISSUED BY THE AO STATED THAT THE TOTAL SALE CONSIDE RATION WAS RAISED AT ` 40.66 LAKHS, NET SALE CONSIDERATION WAS AT ` 34,58,379/- AND CAPITAL GAINS IS ONLY AT ` 19,263/- AS AGAINST THE OFFERED IN RETURN OF INCOME AT ` 38,472/-. THE AO NOT AGREEING WITH THE ABOVE CONT ENTION OF THE ASSESSEE COMPUTED THE CAPITAL GAINS OF THE A S FOLLOWS:- ` ` SALE CONSIDERATION RECEIVED 40,66,000 LESS : EXPENDITURE ON TRANSFER 89,696 TRANSFER FEE PAID TO THE BUILDER 1,43,059 2,32,755 NET SALE CONSIDERATION 38,33,245 LESS : COST OF ACQUISITION ITA NO.2483 /MDS/2016 3 UDS OF LAND 3,39,814 COST OF CONSTRUCTION 19,87,551 ASSIGNMENT CHARGES 5,05,830 28,33,295 SHORT TERM CAPITAL GAINS 9,99,950 LESS : AS ADMITTED IN THE RETURN 3,80,472 BALANCE SHORT TERM CAPITAL GAINS ADDED BACK TO IN COME 6,19,478 AGAINST THIS, THE ASSESSEE CARRIED THE APPEAL BEFOR E THE LD.CIT(A). 3.1. DURING THE APPELLATE PROCEEDINGS, THE LD.A.R SUBMITTED BEFORE LD.CIT(A) THAT AN AMOUNT OF ` 3,74,866/-, WHICH WAS DUE TO THE BUILDER, WAS PAID BY THE PURCHASER OF THE PROPERTY AND THE ASSESSEE IS NOT AT ALL RECEIVED THAT AMOUNT. IT WAS PAID BY THE PURCHASER TOWARDS INSTALLMENT DUE TO THE BUILDER. THE LD.CIT (A) NOT AGREEING WITH THE CONTENTION OF THE LD.A.R, DISMISSED THE AP PEAL OF ASSESSEE. AGAINST THIS, THE ASSESSEE IS IN APPEAL BEFORE US. 4. THE LD.A.R SUBMITTED THAT AN AMOUNT OF ` 3,74,866/-, WHICH WAS PAID BY THE PURCHASER TO THE BUILDER CANNOT BE FORM ED PART OF SALE CONSIDERATION. ON THE OTHER HAND, IF IT IS TO BE C ONSIDERED AS PART OF THE SALE CONSIDERATION, IT IS TO BE INCLUDED IN THE COST OF ACQUISITION SO AS TO COMPUTE THE CORRECT CAPITAL GAINS. 5. LD.D.R SUBMITTED THAT THERE IS NO EVIDENCE PLAC ED BY THE ASSESSEE TO SHOW THAT IT WAS PAID BY PURCHASER OF T HE PARTY TO THE ITA NO.2483 /MDS/2016 4 BUILDER TOWARDS INSTALLMENT DUE TO THE SUPPLIER. I N THE ABSENCE OF EVIDENCE, IT CANNOT BE CONSIDERED AS PART OF COST O F ACQUISITION. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. IT IS AN ADMITTED FACT THAT AN AMOUNT OF ` 3,74,866/- WAS PAID BY PURCHASER OF THE PARTY TO THE BUILDER AS IT WAS PAID BY CHEQUE. NOW, THE CONTENTION OF THE LD.A.R IS THAT IT CANNOT BE CONSIDERED AS A PART OF THE SALE CONSIDERATION RECEIVED BY THE ASSE SSEE TOWARDS SALE OF PROPERTY AS IT WAS DIRECTLY PAID TO THE BUILDER OF THE PROPERTY. WE AGREE WITH THIS PROPOSITION OF THE LD.A.R AS IT IS PAID TOWARDS THE PURCHASE OF PROPERTY BY THE PURCHASER AND IT MAY BE A PART OF THE SALE CONSIDERATION. ON THE OTHER HAND, IF IT IS PA ID DIRECTLY TO THE BUILDER BY THE PURCHASER OF THE PROPERTY, THEN IT I S ALSO TO BE CONSIDERED AS PART OF THE COST OF ACQUISITION OF PR OPERTY. THE BURDEN IS ON ASSESSEE TO SHOW THAT IT IS PAID TOWARDS THE COST OF THE PURCHASER OF THE PROPERTY ON BEHALF OF THE PRESENT ASSESSEE. HENCE, IN THE INTEREST OF JUSTICE, WE REMIT THE ISSUE TO T HE FILE OF AO WITH A DIRECTION TO THE ASSESSEE TO PLACE NECESSARY EVIDEN CE TO SHOW THAT IT IS PAID BY THE PURCHASER TO THE BUILDER ON BEHALF O F THE ASSESSEE TOWARDS THE COST OF THE PROPERTY. WITH THIS OBSERV ATION, WE REMIT THE ITA NO.2483 /MDS/2016 5 ISSUE TO THE FILE OF AO FOR FRESH CONSIDERATION AFT ER GIVING OPPORTUNITY OF HEARING TO THE ASSESSEE BY THE AO. 7. THE OTHER ISSUE IS RELATED TO CHARGING OF INTER EST UNDER SECTION 234B AND SECTION 234C OF THE ACT. AS REGARDS GROUND NO.5, LEVY OF INTEREST U/S. 234B, 234C & 234D IS CONSEQUENTIAL AN D MANDATORY IN NATURE AND TO BE CHARGED ACCORDINGLY 8. IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 09 TH JANUARY, 2017 AT CHENNAI. SD/- ( ) ( CHANDRA POOJARI ) /ACCOUN TANT MEMBER CHENNAI, DATED THE 09 TH JANUARY, 2017 . K S SUNDARAM. , ' $(-. /.( / COPY TO: 1 . ! / APPELLANT 3. & 0( () / CIT(A) 5. .3 4 $(5 / DR 2. $% ! / RESPONDENT 4. & 0( / CIT 6. 4 6 7 ' / GF