Jyothilakshmi Narayanamoorthy, CHENNAI V. ITO, CHENNAI

ITA 3074/CHNY/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4124 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-07-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 05-07-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 02-11-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MRS R RAJESWARI
• Assessee Lawyers: T BANUSEKAR
• Keywords: Gift; Cost of acquisition

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: CHENNAI , . , ! BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER , AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.3074/MDS/2016 /ASSESSMENT YEAR: 2012-13 SMT. JYOTHILAKSHMI NARAYANAMOORTHY, NO.21, OLD NO.101, 3 RD STREET, WALLACE GARDEN, CHENNAI-600 006. VS. THE INCOME TAX OFFICER, INTERNATIONAL TAXATION-1(2), CHENNAI-600 034. [PAN: AADPJ 4527 C ] ( & /APPELLANT) ( '(& /RESPONDENT) & ) / APPELLANT BY : MR.T.BANUSEKAR, CA '(& ) /RESPONDENT BY : MRS.R.RAJESWARI, JCIT ) /DATE OF HEARING : 11.07.2017 ) /DATE OF PRONOUNCEMENT : 11.07.2017 / O R D E R PER GEORGE MATHAN , JUDICIAL MEMBER : ITA NO.3074/MDS/2016 IS AN APPEAL FILED BY THE ASS ESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-1 6, CHENNAI, IN ITA NO.11/CIT(A)-16/2012-13 DATED 23.08.2016 FOR THE AY 2012-13. ITA NO.3074/MDS/2016 :- 2 -: 2. MRS.R.RAJESWARI, JCIT, REPRESENTED ON BEHALF OF THE REVENUE AND MR.T.BANUSEKHAR, CA, REPRESENTED ON BEHALF OF THE A SSESSEE. 3. THE APPEAL FILED BY THE ASSESSEE IS DELAYED BY T WO DAYS FOR WHICH NECESSARY AFFIDAVIT HAS BEEN FILED BY EXPLAINING TH E REASONS FOR TWO DAYS DELAY. AS IT IS NOTICED THAT THE DELAY IS ON ACCOU NT OF THE ILL-HEALTH OF THE ASSESSEES FATHER WHO WAS LOOKING AFTER THE TAX MAT TERS OF THE ASSESSEE AND WAS ALSO POWER OF ATTORNEY HOLDER OF THE ASSESS EE, THE DELAY IN FILING OF THE APPEAL STANDS CONDONED AND APPEAL DISPOSED O FF ON MERITS. 4. IT WAS SUBMITTED BY THE LD.AR THAT GROUND NOS.1 & 2 OF THE ASSESSEE ARE GENERAL IN NATURE. IN RESPECT OF GROU ND NOS.3 TO 5, IT WAS A SUBMISSION THAT THE ASSESSEES MOTHER HAD PURCHASED A PROPERTY IN KANCHEEPURAM DISTRICT DURING THE AY 2004-05. THE S AME WAS RECEIVED BY THE ASSESSEE ALONG WITH HER THREE SISTERS THROUGH A SETTLEMENT DEED DATED 24.12.2007. THE SAID PROPERTY WAS SOLD BY THE ASSE SSEE ALONG WITH HER SISTERS ON 19.03.2012 AND THE ASSESSEE HAD OFFERED CAPITAL GAINS IN RESPECT OF HER SHARE. IT WAS A SUBMISSION THAT WHE N COMPUTING THE LONG TERM CAPITAL GAINS, THE AO HAD ADOPTED THE COST OF THE IMMOVABLE PROPERTY AS ON THE DATE OF PURCHASE BY THE ASSESSEE S MOTHER WHICH HAD BEEN RECEIVED BY THE ASSESSEE ON SETTLEMENT DEED BU T HAD APPLIED THE COST INFLATION INDEX IN RESPECT OF FY 2007-08, BEIN G THE YEAR IN WHICH THE ASSESSEE HAD RECEIVED THE PROPERTY THROUGH SETTLEME NT DEED. IT WAS A SUBMISSION THAT THE INDEX THAT WAS LIABLE TO BE CON SIDERED WAS OF THE FY ITA NO.3074/MDS/2016 :- 3 -: 2004-05 AS THE ASSESSEES MOTHER HAD ORIGINALLY PUR CHASED THE PROPERTY DURING THE FY 2004-05. HE PLACED RELIANCE UPON THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF MANJULA J SHAH REPORTED IN 355 ITR 474 (BOM) TO SUPPORT HIS CONTENTION. IN RESPEC T OF GROUND NOS.6 & 7, IT WAS A SUBMISSION THAT THE SAME RELATED TO THE DI SALLOWANCE OF THE COST OF THE COMPOUND WALL AMOUNTING TO RS.3,74,000/- AND RS.21,500/- PAID TO M/S.PR FOUNDATIONS. IT WAS A SUBMISSION THAT THE A O HAD DISALLOWED THE SAME ON THE GROUND THAT THE SAID EXPENDITURE WAS PA ID BY THE ASSESSEE AFTER THE DUE DATE OF THE FILING OF THE RETURN U/S. 139(4). IT WAS A SUBMISSION THAT THE EXPENDITURE HAVING BEEN INCURRE D, THE SAME WAS LIABLE TO BE INCLUDED IN RESPECT OF COST OF THE NEW PROPERTY PURCHASED. IT WAS A SUBMISSION THAT GROUND NOS.8 & 9 ARE RELATED TO THE GROUND NOS.6 & 7. GROUND NO.10 WAS AGAINST LEVY OF INTEREST U/S .234B. IT WAS A SUBMISSION THAT THE ORDER OF LD.CIT(A) MAY BE REVER SED AND THE AO MAY BE DIRECTED TO ALLOW THE CLAIM OF THE ASSESSEE. 5. IN REPLY, THE LD.DR VEHEMENTLY SUPPORTED THE ORD ERS OF AO & LD.CIT(A). 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. GROUN D NOS.1 & 2 OF THE ASSESSEE ARE GENERAL IN NATURE, WHICH DO NOT NEED A NY ADJUDICATION. IN RESPECT OF GROUND NOS.3 TO 5, A PERUSAL OF THE ASSE SSMENT ORDER SHOWS THAT THE AO HAS TAKEN THE STAND THAT THE HOUSE PROP ERTY WHICH WAS SOLD, WAS FIRST HELD BY THE ASSESSEE ON 24.12.2007, WHEN SHE RECEIVED SAME ITA NO.3074/MDS/2016 :- 4 -: THROUGH THE SETTLEMENT DEED AND CONSEQUENTLY FELL W ITHIN THE FY 2007-08. HOWEVER, ADMITTEDLY, THE PROPERTY WAS PURCHASED BY THE ASSESSEES MOTHER DURING THE FY 2004-05. THE SAID PROPERTY HA S COME INTO THE HANDS OF THE ASSESSEE THROUGH A SETTLEMENT DEED. A PERUSAL OF THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CA SE OF MANJULA J SHAH REFERRED TO SUPRA SHOWS, IT HAS BEEN HELD THAT WHEN DETERMINING THE INDEXED COST OF ACQUISITION U/S.48, IN CONSTRUING T HE WORDS ASSET WAS HELD BY THE ASSESSEE ONE HAS TO SEE THE OBJECT WITH WHI CH THE SAID WORDS ARE USED IN THE STATUTE AND CONSEQUENTLY THE PERIOD FOR WHICH THE ASSET WAS HELD BY THE PREVIOUS OWNER IS TO BE INCLUDED IN DET ERMINING PERIOD FOR WHICH ASSET WAS HELD BY THE ASSESSEE IN VIEW OF THE PROVISIO OF SECTION 49(1) WHEN THE SAME WAS RECEIVED AS A GIFT. CONSEQ UENTLY, INDEXATION WOULD HAVE TO BE GRANTED TO THE ASSESSEE FROM THE F Y 2004-05 BEING THE YEAR IN WHICH THE ASSESSEES MOTHER HAD PURCHASED T HE SAID PROPERTY WHICH WAS RECEIVED BY THE ASSESSEE THROUGH SETTLEME NT DEED DATED 24.12.2007. IN THESE CIRCUMSTANCES, THE AO HAS DIR ECTED TO APPLY INDEX IN RESPECT OF THE COST OF ACQUISITION AS OF FY 2004 -05 AS AGAINST 2007-08 AS ADOPTED BY THE AO. IN THESE CIRCUMSTANCES, GROU ND NOS.3 TO 5 OF THE ASSESSEES APPEAL STANDS ALLOWED. 7. IN RESPECT OF GROUND NOS.6 TO 9, ON PERUSAL OF T HE ASSESSMENT ORDER CLEARLY SHOWS THAT THE EXPENDITURE HAS BEEN PAID BY THE ASSESSEE AFTER THE DUE DATE OF FILING OF THE RETURN U/S.139(4) AS HAS BEEN BROUGHT OUT BY THE AO IN PARA NO.3.2(D) AT PAGE NO.11 OF THE ASSES SMENT ORDER. THIS ITA NO.3074/MDS/2016 :- 5 -: FINDING OF THE FACT AS RECORDED BY THE AO HAS NOT B EEN DISLODGED BY THE ASSESSEE. THIS BEING SO, THE FINDINGS OF THE AO AN D THAT OF THE LD.CIT(A) ON THIS ISSUE STANDS CONFIRMED. IN THE RESULT, GROU ND NOS.6 TO 9 ARE STANDS DISMISSED. 8. GROUND NO.10 IS LEVY OF INTEREST U/S.234B, WHICH IS CONSEQUENTIAL IN NATURE. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON JULY 11, 201 7, AT CHENNAI. SD/- SD/- ( . ) ( A. MOHAN ALANKAMONY ) /ACCOUNTANT MEMBER ( ) (GEORGE MATHAN) /JUDICIAL MEMBER /CHENNAI, 1 /DATED: JULY 11, 2017. TLN ) '23 43 /COPY TO: 1. & /APPELLANT 4. 5 /CIT 2. '(& /RESPONDENT 5. 3 ' /DR 3. 5 ( ) /CIT(A) 6. /GF