Waheeda Asif Abbas, CHENNAI V. ITO, CHENNAI

ITA 3354/CHNY/2016

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9719 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 11 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 15-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V NANDA KUMAR
• Assessee Lawyers: S SRIDHAR
• Section: 54F; 54

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , . !'# ! , % !& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.3354/CHNY/2016 ( )( / ASSESSMENT YEAR : 2012-13 SMT. WAHEEDA ASIF ABBAS, NEW NO.19, 6 TH STREET, GOPALAPURAM, CHENNAI - 600 086. PAN : AAQPW 4303 C V. THE INCOME TAX OFFICER, NON CORPORATE WARD 3(5), CHENNAI. (+,/ APPELLANT) (-.+,/ RESPONDENT) +, / 0 / APPELLANT BY : SHRI S. SRIDHAR, ADVOCATE -.+, / 0 / RESPONDENT BY : SHRI V. NANDAKUMAR, JCIT 1 / 2% / DATE OF HEARING : 29.11.2018 3') / 2% / DATE OF PRONOUNCEMENT : 03.12.2018 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-4, CHENNAI, DA TED 20.10.2016 AND PERTAINS TO ASSESSMENT YEAR 2012-13. 2. THE FIRST ISSUE ARISES FOR CONSIDERATION IS WITH REGARD TO ASSESSMENT OF CAPITAL GAIN OF THE MINORS IN THE HAN DS OF THE ASSESSEE. 2 I.T.A. NO.3354/CHNY/16 3. SHRI S. SRIDHAR, THE LD.COUNSEL FOR THE ASSESSEE , SUBMITTED THAT THE MINOR DAUGHTERS GOT THE PROPERTY BY WAY OF SETT LEMENT DEED FROM THEIR GRANDMOTHER, THEREFORE, IT IS THEIR PROPERTY. AFTER OBTAINING PERMISSION OF THE HIGH COURT UNDER GUARDIANS AND WA RDS ACT, ACCORDING TO THE LD. COUNSEL, THE PROPERTY WAS SOLD. WHILE G ETTING PERMISSION, THE HIGH COURT IMPOSED A CONDITION THAT SALE PROCEEDS S HALL BE DEPOSITED IN THE BANK ACCOUNT. ACCORDINGLY, IT WAS DEPOSITED IN THE BANK ACCOUNT. SINCE THE PROPERTY WAS OF THE MINORS, ACCORDING TO THE LD. COUNSEL, IT CANNOT BE ASSESSED IN THE HANDS OF THE ASSESSEE. O N A QUERY FROM THE BENCH WHETHER THE DEPOSIT IN THE BANK ACCOUNT WAS M ADE IN THE CAPITAL GAINS ACCOUNT AS SPECIFIED IN THE INCOME-TAX ACT OR MERE FIXED DEPOSIT? THE LD.COUNSEL COULD NOT CLARIFY THE NATURE OF DEPO SIT, THEREFORE, HE SUBMITTED THAT THE MATTER MAY BE REMITTED BACK TO T HE FILE OF THE ASSESSING OFFICER TO VERIFY THE NATURE OF DEPOSIT A ND THEREAFTER DECIDE THE ISSUE. 4. REFERRING TO THE PROVISIONS OF SECTION 64(1A) OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'), THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE WORD ANY SUCH INCOME AS APPEARING IN SEC TION 64(1A) OF THE ACT MAY NOT INCLUDE THE CAPITAL GAIN ARISING OUT OF TRANSFER OF PROPERTY WHICH WAS OBTAINED BY THE MINORS FROM THEIR GRANDPA RENTS. 3 I.T.A. NO.3354/CHNY/16 5. WE HEARD SHRI V. NANDAKUMAR, THE LD. DEPARTMENTA L REPRESENTATIVE ALSO. IT IS NOT IN DISPUTE THAT THE PROPERTY AT THE TIME OF TRANSFER BELONGED TO THE MINORS AND AFTER OBTAINING PERMISSION FROM COMPETENT COURT OF LAW UNDER GUARDIANS AND WARDS AC T, THE SAME WAS SOLD AND THE SALE PROCEEDS WERE SAID TO BE DEPOSITE D IN FIXED DEPOSIT. IT IS NOT KNOWN WHETHER SUCH DEPOSITS WERE MADE IN THE CAPITAL GAINS ACCOUNT AS SPECIFIED UNDER SECTION 54F OF THE ACT. THE CONDITION IMPOSED BY THE COURT IS FOR THE PURPOSE OF GUARDIAN S AND WARDS ACT TO SAFEGUARD THE INTEREST OF MINORS DURING THEIR MINOR ITY. INCOME-TAX ACT, BEING A SPECIAL ENACTMENT FOR THE PURPOSE OF CLAIMI NG EXEMPTION UNDER SECTION 54F, THE ASSESSEE IS EXPECTED TO DEPOSIT TH E SALE PROCEEDS IN THE SPECIFIED ACCOUNT AS REQUIRED UNDER SECTION 54F OF THE ACT. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINI ON THAT IT NEEDS TO BE VERIFIED WHETHER THE ASSESSEE HAS DEPOSITED IN THE CAPITAL GAINS ACCOUNT OR NOT. 6. WE HAVE CAREFULLY GONE THROUGH THE PROVISIONS OF SECTION 64 OF THE ACT. THE WORD ANY SUCH INCOME AS APPEARS IN SECTION 64(1A) OF THE ACT INCLUDES CAPITAL GAIN ARISING OUT OF THE SALE O F THE PROPERTY OBTAINED BY THE MINORS FROM THEIR GRANDPARENTS BY WAY OF SET TLEMENT. THEREFORE, THE ASSESSING OFFICER HAS RIGHTLY CLUBBED THE MINOR S INCOME IN THE HANDS OF THE ASSESSEE. SINCE THE NATURE OF BANK DEPOSIT IS NOT READILY AVAILABLE FOR VERIFICATION, THIS TRIBUNAL IS OF THE CONSIDERE D OPINION THAT THE MATTER 4 I.T.A. NO.3354/CHNY/16 NEEDS TO BE VERIFIED BY THE ASSESSING OFFICER. ACC ORDINGLY, ORDERS OF BOTH THE AUTHORITIES BELOW ARE SET ASIDE AND THE MATTER IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER ONLY FOR A LIMITED PU RPOSE OF VERIFYING WHETHER THE CAPITAL GAIN WAS DEPOSITED IN THE SPECIFIED CAP ITAL GAINS ACCOUNT AS REQUIRED UNDER SECTION 54F OF THE ACT. THE ASSESSI NG OFFICER SHALL VERIFY THE NATURE OF DEPOSIT AND THEREAFTER DECIDE THE ISS UE WHETHER THE ASSESSEE IS ELIGIBLE FOR EXEMPTION UNDER SECTION 54 F OF THE ACT OR NOT. 7. THE NEXT ISSUE ARISES FOR CONSIDERATION IS INVES TMENT OF SALE PROCEEDS IN THE NAME OF THE ASSESSEE AND HER HUSBAN D. 8. THE ASSESSING OFFICER DISALLOWED THE CLAIM OF TH E ASSESSEE UNDER SECTION 54F OF THE ACT ON THE GROUND THAT THE ASSES SEES HUSBAND WAS NOT HAVING ANY SHARE IN THE PROPERTY SOLD BY THE AS SESSEE. SINCE THE INVESTMENT WAS MADE IN THE NAME OF THE ASSESSEE AND HER HUSBAND, THE ASSESSING OFFICER RESTRICTED THE INVESTMENT TO THE EXTENT 50%. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT UNDER TH E COMMON LAW, ASSESSEE AND HER HUSBAND ARE ONE AND SAME. THEREFO RE, WHEN THE INVESTMENT WAS MADE IN THE NAME OF THE ASSESSEE AND HER HUSBAND, IT HAS TO BE CONSIDERED THAT INVESTMENT WAS MADE BY TH E ASSESSEE. IN A MALE DOMINATING SOCIETY, INVESTMENT MADE IN THE NAM E OF THE HUSBAND IS ALSO TO BE CONSIDERED AS INVESTMENT. WHILE ADJUDIC ATING THE ISSUE ARISES FOR CONSIDERATION, THE PREVAILING CUSTOMARY PRACTIC E IN THE SOCIETY CANNOT 5 I.T.A. NO.3354/CHNY/16 BE IGNORED BY THE JUDICIAL AUTHORITIES. THEREFORE, EVEN THOUGH THE PROPERTY SOLD STANDS IN THE NAME OF ASSESSEE ALONE AND THE INVESTMENT WAS ADMITTEDLY MADE IN THE NAME OF ASSESSEE AND HER HUSBAND, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE OBJE CT OF ENACTMENT TO PROMOTE HOUSING FACILITY IN THE COUNTRY IS ACHIEVED AND THE ASSESSEES HUSBAND CANNOT BE CONSIDERED AS A THIRD PARTY AS FA R AS THE ASSESSEES INVESTMENT IS CONCERNED. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ASSESSEE IS ELIGIBLE FOR EXEMPTION UNDER SECTION 54F OF THE ACT EVEN THOUGH THE INVESTMENT WAS SAID TO BE M ADE IN THE JOINT NAME OF ASSESSEE AND HER HUSBAND. THEREFORE, WE A RE UNABLE TO UPHOLD THE ORDERS OF THE AUTHORITIES BELOW. ACCORD INGLY, THE ORDERS OF BOTH THE AUTHORITIES BELOW ARE SET ASIDE AND THE AS SESSING OFFICER IS DIRECTED TO GRANT EXEMPTION UNDER SECTION 54F OF TH E ACT. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 3 RD DECEMBER, 2018 AT CHENNAI. SD/- SD/- (. !'# ! ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 5 /DATED, THE 3 RD DECEMBER, 2018. 6 I.T.A. NO.3354/CHNY/16 KRI. / -267 87)2 /COPY TO: 1. +, /APPELLANT 2. -.+, /RESPONDENT 3. 1 92 () /CIT(A)-4, CHENNAI-34 4. PRINCIPAL CIT-5, CHENNAI 5. 7: -2 /DR 6. ;( < /GF.