SMT. A. TAMIL PONNI, TRICHY V. ITO, WARD - IV(3), TRICHY

ITA 3112/CHNY/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4717 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 11-11-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VIJAYA PRABHAJCITD R
• Assessee Lawyers: R S BALAJI; T M SUBRAMANIANFCA
• Keywords: Capital asset; Capital Gains
• Section: 54F

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : CHENNAI , ! ' # $% BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT & SHRI M. BALAGANESH, ACCOUNTANT MEMBER ./ I.T.A.NO.3112/CHNY/2019 / ASSESSMENT YEAR : 2008-09 SMT.A.TAMIL PONNI , NO.5,THIRUVADI STREET, SRIRANGAM,TRICHY 620 006. VS. THE INCOME TAX OFFICER, WARD IV(3), TRICHY. [PAN ACVPT 0449 B ] ( &' / APPELLANT) ( ()&' /RESPONDENT) / APPELLANT BY : MR.R.S.BALAJI, ADVOCATE & MR.T.M.SUBRAMANIAN,FCA, /RESPONDENT BY : M/S.VIJAYAPRABHA,JCIT,D.R / DATE OF HEARING : 24 .02.2020 ! / DATE OF PRONOUNCEMENT : 25 .02.2020 $' / O R D E R PER M. BALAGANESH, ACCOUNTANT MEMBER: THE ASSESSEE FILED THIS APPEAL AGAINST THE ORDER O F THE COMMISSIONER OF INCOME TAX (APPEALS)-1, TRICHY IN I TA NO.332/2011-12/C.I.T(A)-1/TRY, DATED 21.08.2019 FOR THE ASSESSMENT YEAR 2008-09. ITA NO.3112/CHNY/2019 :- 2 -: 2. THOUGH THE ASSESSEE HAS RAISED SEVERAL GROUNDS BEFORE US, THE EFFECTIVE ISSUES THAT ARE TO BE DECIDED BY THIS TRIBUNAL ARE AS UNDER:- A) WHETHER THE SALE CONSIDERATION OF .37,92,600/- ON SALE OF LAND SHOULD BE CONSIDERED AS AGAINST THE ACTUAL SALE CON SIDERATION RECEIVED IN THE SALE OF .19,85,000/- FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAINS IN THE FACTS AND CIRCU MSTANCES OF THE CASE. B) WHETHER THE ASSESSEE IS ENTITLED FOR CLAIMING CO ST OF DEVELOPMENT OF .5 LAKHS WHILE COMPUTING THE CAPITAL GAINS IN THE F ACTS AND CIRCUMSTANCES OF THE CASE. C) WHETHER THE ASSESSEE IS ENTITLED FOR CLAIM OF E XEMPTION UNDER SECTION.54F OF THE ACT IN THE FACTS AND CIRCUMSTANC ES OF THE CASE. 3. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT THE ASSESSEE HAD SOLD 76 CENTS OF LAND AT THARANALLUR VILLAGE, TRICHY ON 25.02.2008. PRIOR TO THAT DATE, THE ASSESSEE HAD ENTERED INTO AN AGREEMENT FOR SALE WHE REIN THE CONSIDERATION AMOUNT WAS AGREED AT .37,92,600/- WHEREAS THE CONSIDERATION AS PER THE REGISTERED SALE DEED WAS .19,85,000/-. THE ITA NO.3112/CHNY/2019 :- 3 -: ASSESSEE DISCLOSED THE CAPITAL GAINS BY ADOPTING TH E SALE CONSIDERATION AT .19,85,000/-. THIS SALE CONSIDERATION FIGURE WAS SO UGHT TO BE SUBSTITUTED BY THE LD. A.O WITH .37,92,600/- BEING THE CONSIDERATION FIGURE MENTIONED IN THE AGREEMENT FOR SALE. THE LD. A.O ALSO RECORDED A STATEMENT FROM THE PURCHASER OF THE LAND SMT.R.PU SHPAVALLI ON 23.11.2011 WHEREIN ON OATH, SHE HAD CATEGORICALLY C ONFIRMED THAT SHE HAD PAID ACTUAL CONSIDERATION OF .37,92,600/- TO THE ASSESSEE IN CASH IN THREE INSTALLMENTS. THIS FACT WHEN CONFRONTED W ITH THE ASSESSEE, THE ASSESSEE WAS NOT ABLE TO COUNTER THE SAME. ACC ORDINGLY, THE LD. A.O. ADOPTED THE SALE CONSIDERATION FIGURE OF .37,92,600/- AS FULL VALUE OF CONSIDERATION WHILE COMPUTING THE CAPITAL GAINS ON TRANSFER OF LAND. THIS ACTION WAS UPHELD BY THE LEARNED CIT(A). WE DO NOT FIND ANY INFIRMITY IN THE SAID ACTION OF LEARNED CIT(A) UPHOLDING THE LD. A.OS ORDER WITH REGARD TO ADOPTION OF SALE CONSIDE RATION. 3.1 WE FIND THAT THE ASSESSEE HAD MADE A CLAIM OF .5 LAKHS TOWARDS COST OF IMPROVEMENT ON THE PRETEXT THAT THE SAID SUM WAS INCURRED BY HER TOWARDS COST OF DEVELOPMENT AND ASS ESSEE HAD INCURRED THIS EXPENDITURE THROUGH A MASON SHRI C.VA SUDEVAN. THE ASSESSEE HAD MERELY PRODUCED THE RECEIPT FOR PAYMEN T OF .5 AKHS FROM SHRI C.VASUDEVAN TO SUBSTANTIATE HER CLAIM. T HE LD. A.O DISBELIEVED THE SAME AND FURTHER OBSERVED THAT THE PAN AND ADDRESS OF SHRI C.VASUDEVAN WAS NOT PRODUCED BEFORE HIM TO CHECK THE ITA NO.3112/CHNY/2019 :- 4 -: CORRECTNESS OF CLAIM MADE BY THE ASSESSEE. ACCORDIN GLY, THE ASSESSING OFFICER DENIED THE BENEFIT OF GRANT OF DEDUCTION OF COST OF IMPROVEMENT AT .5 LAKHS WHILE COMPUTING THE CAPITAL GAINS. THIS AC TION WAS UPHELD BY THE LEARNED CIT(A). 4. BEFORE US, THE LD. A.R. ARGUED THAT WITHOUT INC URRING OF DEVELOPMENT COST ON THE SAID LAND, THE SALE OF LAND COULD NOT HAVE HAPPENED. HENCE, LD. A.R. VEHEMENTLY PLEADED THAT ASSESSEE BE GIVEN A DEDUCTION TOWARDS COST OF IMPROVEMENT OF .5 LAKHS WHILE COMPUTING THE CAPITAL GAINS, BUT WE FIND THAT EXCEP T MERELY MAKING A BALD STATEMENT, THE LD. A.R. WAS NOT ABLE TO FURNIS H ANY OTHER EVIDENCE BEFORE US TO SUBSTANTIATE THE CLAIM. HOWE VER, AS THE LAST OPPORTUNITY IN THE PROCESS OF IDENTIFYING TRUTH B EHIND THE TRANSFER OF LAND BY THE ASSESSEE, WE DEEM IT FIT AND APPROPRIAT E, IN THE INTEREST OF JUSTICE AND FAIR PLAY, TO REMIT THIS ASPECT OF THE ISSUE TO THE FILE OF ASSESSING OFFICER FOR DENOVO ADJUDICATION I.E ONLY WITH RESPECT TO AMOUNT OF DEDUCTION TOWARDS COST OF IMPROVEMENT O F .5 LAKHS WHILE COMPUTING THE CAPITAL GAINS. WE HOLD THAT THE ASSE SSEE SHOULD FURNISH ALL NECESSARY EVIDENCES IN SUPPORT OF HER CLAIM BEF ORE THE ASSESSING OFFICER AND THE ASSESSING OFFICER SHOULD ALSO MAKE CROSS VERIFICATION WITH SHRI C.VASUDEVAN OR ANY OTHER PERSON THROUGH W HOM THE DEVELOPMENT WORK HAS BEEN CARRIED OUT TO IDENTIFY T HE TRUTH INVOLVED ITA NO.3112/CHNY/2019 :- 5 -: THEREON. HENCE THIS ASPECT OF THE ISSUE IS REMITTED BACK TO THE FILE OF A.O. FOR AFRESH ADJUDICATION. 5. WITH REGARD TO CLAIM OF EXEMPTION UNDER SECTION 54F OF THE ACT, WE FIND THAT THE ASSESSEE IN INSTANT CASE HAD REINV ESTED IN THE NEW PROPERTY IN THE NAME OF HER HUSBAND. WE FIND THAT T HERE IS NO DISPUTE WITH REGARD TO THE FACT OF MAKING REINVESTMENT IN N EW PROPERTY. THE ONLY DISPUTE IS THAT REINVESTMENT IN NEW PROPERTY H AS BEEN MADE BY THE ASSESSEE IN THE NAME OF HER HUSBAND INSTEAD OF IN HER NAME. THIS IS A SOLE REASON FOR DENIAL OF EXEMPTION UNDER SECT ION.54F OF THE ACT. WE FIND THAT THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF C.I.T VS. V.NATARAJAN REPORTED IN 287 ITR 271 (MAD.), WHI CH HAS BEEN HEAVILY RELIED UPON BY LD. A.R. BEFORE US, HAD HELD AS UNDER:- N THE INSTANT CASE, THE ASSESSEE PURCHASED A HOUS E PROPERTY AT ANNA NAGAR IN THE NAME OF HIS WIFE SMT.MEERA AFT ER SELLING A PROPERTY AT BANGALORE, BUT THE SAME WAS ASSESSED IN THE HANDS OF THE ASSESSEE. HENCE, AS CORRECTLY HELD BY THE L EARNED CIT(A) AS WELL AS BY THE TRIBUNAL, THE ASSESSEE IS ENTITLE D FOR EXEMPTION UNDER SECTION.54F OF THE ACT. RESPECTFULLY FOLLOWING THE AFORE SAID DECISION, WE HOLD THAT EVEN THOUGH THE NEW PROPERTY HAS BEEN INVESTED IN THE NA ME OF ASSESSEES HUSBAND, EXEMPTION UNDER SECTION.54F CANNOT BE DENI ED TO THE ITA NO.3112/CHNY/2019 :- 6 -: ASSESSEE. WE DIRECT THE A.O. ACCORDINGLY. THE GROUN DS RAISED BY THE ASSESSEE ARE DISPOSED OFF IN THE AFORESAID MANNER. 6. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH FEBRUARY, 2020, AT CHENNAI. SD/- SD/- ( ) (MAHAVIR SINGH) '#$ /VICE PRESIDENT %& '()* ) (M. BALAGANESH) # $% / ACCOUNTANT MEMBER +, / CHENNAI -. / DATED: 25 TH FEBRUARY,2020. K S SUNDARAM .*(( /0(10 / COPY TO: ( 1 . / APPELLANT 4. ( 2 / CIT 2. / RESPONDENT 5. 03)( 4 / DR 3. ( 2(56 / CIT(A) 6. )7(8 / GF