Archana Mohan, Trivandrum V. ACIT, Trivandrum

ITA 309/COCH/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2606 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 11 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-04-2013
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 19-02-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 06-05-2011
• Court: TRIBUNAL
• Department Lawyers: SUSAN GEORGE VARGHESE
• Assessee Lawyers: K THOMAS JACOB
• Keywords: Capital asset; Gift
• Section: 54B; 54F; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND B.R.BASKAR AN, AM I.T.A. NO. 309/COCH/2011 ASSESSMENT YEAR : 2006-07 MS. ARCHANA MOHAN, TC-29/1736, PADMA VILLA, PERUNTHANI, AIRPORT ROAD, TRIVANDRUM-695 008. [PAN:ANTPM 9382P] VS. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-2, TRIVANDRUM. (ASSESSEE-APPELLANT) (REVENUE-RES PONDENT) ASSESSEE BY SHRI K. THOMAS JACOB, FCA REVENUE BY SMT. SUSAN GEORGE VARGHESE, SR. DR DATE OF HEARING 19/02/2012 DATE OF PRONOUNCEMENT 12/04/2013 O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE ASSESSEE CHALLENGI NG THE ORDER DATED 29-09-2010 PASSED BY LD CIT(A)-III, KOCHI FOR THE ASSESSMENT Y EAR 2006-07. THE ASSESSEE IS AGGRIEVED ON THE FOLLOWING ISSUES:- (A) REJECTION OF CLAIM OF EXEMPTION U/S 54B OF TH E ACT. (B) THE AMOUNT INVESTED IN CAPITAL GAINS ACCOUNT SCHEME WAS TAKEN BY THE ASSESSING OFFICER AT RS.47 LAKHS INSTEAD OF ACT UAL INVESTMENT OF RS.55 LAKHS. 2. THE FACTS RELATING TO THE ISSUES ARE STATED IN BRIEF. A PERSON NAMED SHRI P.K. PARAMESWARAN NAIR ACQUIRED AN AGRICULTURAL LAN D ADMEASURING 112.418 CENTS IN ANCHAMADA VILLAGE, KOWDIAR, TRIVANDRUM. H E TRANSFERRED THE SAID PROPERTY IN THE YEAR 1980 IN FAVOUR OF HIS TWO CHIL DREN BY WAY OF A SETTLEMENT DEED VIZ., HIS SON NAMED SHRI SURESH BABU WAS GIVEN AN EXTENT OF 57 CENTS AND 47 SQUARE LINKS AND HIS DAUGHTER NAMED SMT. SHYAMAL A KUMARI WAS GIVEN AN EXTENT OF 55 CENTS AND 371 SQUARE LINKS. SMT. SHYA MALA KUMARI IS MARRIED TO I.T.A. NO.309/COCH/2011 2 SHRI V.K.MOHAN. THE ASSESSEE HEREIN AND HER ELDER SISTER MS. ANJANA MOHAN ARE THE CHILDREN OF THE SMT. SHYAMALA KUMARI AND SHRI V .K.MOHAN. 3. ON 09.07.1984, SHRI SURESH BABU GIFTED THE PROPERTY ACQUIRED BY HIM BY WAY OF GIFT FROM HIS FATHER, VIZ., 57 CENTS AND 47 AQUARE LINKS, IN FAVOUR OF HIS NIECES VIZ., MS. ARCHANA MOHAN, THE ASSESSEE HEREIN AND MS. ANJANA MOHAN. SINCE THEY WERE MINORS AT THAT POINT OF TIME, SHRI SURESH BABU EXECUTED A TRUST DEED AND APPOINTED THEIR PARENTS VIZ., SHRI V.K.MOH AN AND SMT. SHYAMALA KUMARI AS TRUSTEES WITH THE CONDITION THAT THE TRUS TEES SHALL HOLD THE PROPERTY IN TRUST AND FOR THE BENEFIT OF THE BENEFICIARIES VIZ. , MS. ANJANA MOHAN AND MS. ARCHANA MOHAN. FURTHER THEY SHOULD TRANSFER THE TR UST PROPERTY IN EQUAL SHARES IN FAVOUR OF THE BENEFICIARIES UPON THEIR ATTAINING MAJORITY. THUS, THE ASSESSEE HEREIN AND HER SISTER GOT RIGHTS OVER 28.5235 CENTS EACH OVER THE PROPERTY GIFTED BY THEIR MATERNAL UNCLE SHRI SURESH BABU AFTER THEY BECAME MAJORS. 4. SUBSEQUENTLY, THE ASSESSEE HEREIN EXECUTED AN IRREVOCABLE POWER OF ATTORNEY ON 13-07-2005 IN FAVOUR OF HER FATHER SHRI V.K.MOHA N TO MANAGE AND DEAL WITH HER PROPERTY, CITED ABOVE VIZ., 28.5235 CENTS OF LA ND. ON THE VERY SAME DAY, MS. ANJANA MOHAN, THE SISTER OF THE ASSESSEE HEREIN ALS O EXECUTED A POWER OF ATTORNEY IN FAVOUR OF SHRI V.K.MOHAN IN RESPECT OF HER SHARE IN THE ABOVE SAID PROPERTY VIZ., 28.5235 CENTS. MS. ANJANA MOHAN BE CAME THE OWNER OF THE PROPERTY INHERITED BY HER MOTHER 55 CENTS AND 371 S QUARE LINKS, REFERRED ABOVE AND SHE EXECUTED A POWER OF ATTORNEY IN FAVOUR OF H ER FATHER SHRI V.K.MOHAN IN RESPECT OF THAT PROPERTY ALSO. THUS, SHRI V.K.MOH AN BECAME POWER OF ATTORNEY HOLDER OF ENTIRE EXTENT OF 112.418 CENTS. 5. THE ENTIRE EXTENT OF 112.418 CENTS WAS LATER SOLD A CONSTRUCTION COMPANY NAMED M/S NIKUNJAM CONSTRUCTION (P) LTD BY WAY OF A SALE DEED DATED 28.05.2005. THOUGH THE SALE DEED WAS DATED 28.05.2 005, THE ACTUAL REGISTRATION TOOK PLACE ON 17.08.2005. IT IS PERTINENT TO MENTI ON ABOUT CERTAIN INFIRMITIES IN I.T.A. NO.309/COCH/2011 3 THE SAID SALE DEED. AS STATED EARLIER, THE SALE DE ED IS DATED 28.05.2005. THE POWER OF ATTORNEY IN FAVOUR OF SHRI V.K.MOHAN WAS E XECUTED BOTH BY THE ASSESSEE HEREIN AND HER SISTER MS. ARCHANA MOHAN ON 13-07-2005, I.E., SUBSEQUENT TO 28.05.2005. HOWEVER, IN PAGE NO.2 OF THE SALE DEED DATED 28.05.2005, THE PARTIES HAVE REFERRED TO THE POWER OF ATTORNEY EXECUTED ON 13.07.2005. SIMILARLY, REFERENCE TO THE SETTLEMENT DEED EXECUTED BY SHRI V.K.MOHAN ON 08.06.2005 (SUBSEQUENT TO 28.05.2005) IN FAVOUR OF THE ASSESSEE HEREIN, ALSO FINDS PLACE IN PAGE 3 OF THE SALE DEED . ALL THESE FACTS SHOW THAT THE DATE OF EXECUTION OF SALE DEED CANNOT BE 28.05.2005 , AS MENTIONED IN THE CONVEYANCE DEED. UNDER THESE SET OF FACTS, THE DAT E OF EXECUTION OF SALE DEED COULD BE SOME TIME BETWEEN 13.07.2005 (DATE OF EXEC UTION OF POWER OF ATTORNEY) AND 17.8.2005 (THE DATE OF REGISTRATION). 6. THE ASSESSEE HEREIN DECLARED LONG TERM CAPIT AL GAINS ON SALE OF 28.5235 CENTS OF LAND AFTER CLAIMING EXEMPTION IN RESPECT O F DEPOSIT MADE IN THE CAPITAL GAIN ACCOUNT SCHEME. IT IS PERTINENT TO NOTE HERE THAT THE INVESTMENTS PRESCRIBED IN SEC. 54 AND OTHER APPLICABLE SECTIONS ARE NOT MADE WITHIN THE DUE DATE FOR FILING RETURN OF INCOME, THE ASSESSEE IS R EQUIRED TO DEPOSIT THE CONSIDERATION IN CAPITAL GAIN ACCOUNT SCHEME, WHICH SHALL BE UTILIZED FOR MAKING INVESTMENTS AS PRESCRIBED IN SECTION 54 AND OTHER A PPLICABLE SECTIONS. PENDING INVESTMENT IN NEW ASSET, THE AMOUNT DEPOSITED IN TH E CAPITAL GAIN ACCOUNT SCHEME IS DEEMED TO BE THE COST OF NEW ASSET FOR TH E PURPOSE OF COMPUTING EXEMPTION UNDER SEC. 54 AND OTHER APPLICABLE SECTIO NS. 7. THE ASSESSING OFFICER SOUGHT FOR DETAILS OF SECTIONS UNDER WHICH EXEMPTION IS SOUGHT BY THE ASSESSEE. THE ASSESSEE EXPLAINED THAT HE HAS SUBSEQUENTLY PURCHASED AN AGRICULTURAL LAND IN MUDAVANMUGAL ON W HICH EXEMPTION U/S 54B WAS CLAIMED BY HIM. FURTHER THE ASSESSEE ALSO CLAI MED EXEMPTION U/S 54F IN RESPECT OF HOUSE PROPERTY PURCHASED IN THIRUMALA. I.T.A. NO.309/COCH/2011 4 8. THE ASSESSING OFFICER HELD THAT THE ASSESSEE IS NOT ELIGIBLE FOR EXEMPTION U/S 54B OF THE ACT AS THE LAND SOLD WAS NOT AN AGRI CULTURAL LAND. HOWEVER, HE ACCEPTED THE CLAIM OF EXEMPTION U/S 54F AND ACCORDI NGLY COMPUTED THE CAPITAL GAIN BY GIVING APPLICABLE DEDUCTION RELATABLE TO TH E DEPOSIT OF RS.47.00 LAKHS MADE IN THE CAPITAL GAIN ACCOUNT SCHEME. AFTERWAR DS, THE ASSESSING OFFICER RECOMPUTED THE LONG TERM CAPITAL GAINS BY MAKING VA RIOUS ADJUSTMENTS. 9. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFI CER, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE LD CIT(A). THE LD CIT(A) P ARTLY ALLOWED THE APPEAL BY DECIDING CERTAIN ISSUES IN FAVOUR OF THE ASSESSEE. BEFORE US, THE ASSESSEE HAS MAINLY CHALLENGED THE ISSUE RELATING TO REJECTION O F EXEMPTION U/S 54B OF THE ACT. ACCORDING TO THE ASSESSEE, THE IMPUGNED LAND HAVING AN EXTENT OF 28.5235 CENTS OF LAND WAS A COCONUT GARDEN AND HENCE IT WAS AN AG RICULTURAL LAND. ACCORDINGLY, IT WAS CONTENDED THAT THE ASSESSEE IS ENTITLED TO E XEMPTION U/S 54B OF THE ACT IN RESPECT OF THE INVESTMENT MADE IN PURCHASE OF ANOTH ER AGRICULTURAL LAND. 10. IT IS PERTINENT TO NOTE THAT THE ASSESSEE HE REIN HELD THE IMPUGNED LAND JOINTLY ALONG WITH HER ELDER SISTER, MS. ANJANA MOH AN. IT IS ALSO PERTINENT TO NOTE THAT MS. ANJANA MOHAN DID NOT CLAIM THE IMPUGNED LA ND AS AN AGRICULTURAL LAND. UNDER THESE CIRCUMSTANCES, WE ARE UNABLE TO UNDERST AND AS TO HOW THE ASSESSEE HEREIN ALONE CAN CLAIM THE SAME AS AN AGRICULTURAL LAND. SIMILARLY, THE ADJOINING LAND WAS ALSO HELD BY MS.ANJANA MOHAN AND THE ENTIR E LAND HAVING AN EXTENT OF ABOUT 112 CENTS WERE TRANSFERRED TOGETHER. MS. ANJ ANA MOHAN/SHRI V.K.MOHAN DID NOT CLAIM THE ADJOINING LAND, WHICH WAS A PART OF THE SAME BIT, AS AGRICULTURAL LAND. 11. FURTHER THE PROVISIONS OF SUB. SEC. 1 OF SE C. 54B READS AS UNDER:- 54B(1) SUBJECT TO THE PROVISIONS OF SUB-SECTION ( 2), WHERE THE CAPITAL GAIN ARISES FROM THE TRANSFER OF A CAPITAL ASSET BE ING LAND WHICH, IN THE TWO YEARS IMMEDIATELY PRECEDING THE DATE ON WHICH T HE TRANSFER TOOK I.T.A. NO.309/COCH/2011 5 PLACE, WAS BEING USED BY THE ASSESSEE OR A PARENT O F HIS FOR AGRICULTURAL PURPOSES A PLAIN READING OF THE ABOVE SAID PROVISIONS WOULD SHOW THAT THE LAND SHOULD HAVE BEEN USED FOR AGRICULTURAL PURPOSES IN THE TWO YEARS IMMEDIATELY PRECEDING THE DATE OF TRANSFER. WE NOTICE THAT THE ASSESSEE DID NOT BRING ANY MATERIAL ON RECORD TO SHOW THAT THE IMPUGNED LAND WAS USED FOR AGRICULTURAL PURPOSES IN THE IMMEDIATELY PRECEDING TWO YEARS. WE NOTICE THAT TH E ASSESSEE IS CLAIMING THE LAND TO BE AN AGRICULTURAL LAND WITHOUT BRINGING AN Y SUPPORTING MATERIAL ON RECORD. 12. UNDER THESE CIRCUMSTANCES, WE ARE OF THE VI EW THAT THE ASSESSEE HAS FAILED TO SUBSTANTIATE HER CLAIM WITH REGARD TO THE NATURE OF LAND AND ITS USER IN THE IMMEDIATELY PRECEDING TWO YEARS. ACCORDINGLY, IN OUR VIEW, THE ASSESSING OFFICER WAS JUSTIFIED IN REJECTING THE CLAIM OF EXE MPTION U/S 54B OF THE ACT. 13. THE ASSESSEE CLAIMS THAT HE HAS INVESTED A SUM OF RS.55 LAKHS IN THE CAPITAL GAIN ACCOUNT SCHEME IN TWO INSTALMENTS VIZ. , RS.47.00 LAKHS AND RS.8.00 LAKHS. IT APPEARS THAT THE DEPOSIT OF RS.47 LAKHS WAS MADE IN CONNECTION WITH THE CLAIM MADE U/S 54F OF THE ACT AND THE DEPOSIT O F RS.8.00 LAKHS WAS MADE IN CONNECTION WITH THE CLAIM MADE U/S 54B OF THE ACT. UNDER THESE CIRCUMSTANCES, THE ASSESSING OFFICER WAS JUSTIFIED IN COMPUTING T HE DEDUCTION U/S 54F OF THE ACT IN RESPECT OF RS.47.00 LAKHS ONLY. 14. IN THE RESULT, THE APPEAL FILED BY THE ASSE SSEE IS DISMISSED. PRONOUNCED ACCORDINGLY ON 12-04- 2013. SD/- SD/- (N.R.S.GANESAN) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 12TH APRIL, 2013 I.T.A. NO.309/COCH/2011 6 GJ COPY TO: 1. MS. ARCHANA MOHAN, T-29/1736, PADMA VILLA, AIRPO RT ROAD, PERUNTHANI, TRIVANDRUM-695008. 2.THE ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE- 2,THIRUVANANTHAPURAM. 3. THE COMMISSIONER OF INCOME-TAX(APPEALS)-III, KOC HI. 4.THE COMMISSIONER OF INCOME-TAX, TRIVANDRUM. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR ) I.T.A.T, COCHIN