P MURUGESAN, KARUR V. ITO, WARD-1, KARUR

ITA 3466/CHNY/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 3828 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-02-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 20-12-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: J PAVITRAN KUMAR
• Assessee Lawyers: G VARDINI KARTHIK
• Keywords: Capital Gains
• Section: 201; 15

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , C B ENCH, CHENNAI, CAMP AT COIMBATORE .. . , !', # '$ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ I.T.A.NO.3466/CHNY/2018 ( / ASSESSMENT YEAR: 2013-2014) SHRI. P. MURUGESAN, NO.36, THALAVAPALAYAM, KARUR 639 113. VS THE INCOME TAX OFFICER, WARD-1 AND ADMN, KARUR 639 001. (PAN: AKFPM 3847G) ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : SMT G. VARDINI KARTHIK, ADV /RESPONDENT BY : SHRI J. PAVITRAN KUMAR, JCIT. /DATE OF HEARING : 07.02.2020 ! /DATE OF PRONOUNCEMENT : 07.02.2020 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE COMMISSIONER OF INCOME TAX-1 (IN SHORT THE CIT) TRICHY, DATED 05.10.2018 AND PERTAINS TO THE ASSESSMENT YEAR 201 3-2014. 2. SMT G. VARDINI KARTHIK, THE LD. COUNSEL FOR T HE ASSESSEE SUBMITTED THAT THE ASSESSEE INHERITED THE PROPERTY ON THE DEATH OF HIS WIFE 2 I.T.A. NO.3466/18 ALONGWITH TWO OF HIS CHILDREN. REFERRING TO SECTIO N 15 OF HINDU SUCCESSION ACT, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT A SSESSEE IS ENTITLED ONLY FOR 1/3 RD RIGHT OF THE PROPERTY. THEREFORE, HE IS LIABLE T O PAY ONLY 1/3 RD OF THE TAX DEMAND. HOWEVER, THE ENTIRE CAPITAL GAINS WAS ASSESSED IN ASSESSEES HAND AND THEREFORE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT IT MAY BE RESTRICTED TO 1/3 RD OF THE CAPITAL GAINS. REFERRING TO THE IMPROVEMENT MADE IN THE PROPERTY, THE LD. COUNSEL SUBMITTED THAT THERE IS NO MATERIAL PROOF TO SUGGEST THAT ANY IMPROVEMENT W AS MADE. HOWEVER, IN FACT THE ASSESSEE INCURRED EXPENDITURE FOR IMPROVIN G THE PROPERTY. THEREFORE, THE COST OF IMPROVEMENT BE ALLOWED FOR COMPUTING THE CAPITAL GAINS. 3. ON THE CONTRARY, SHRI PAVITRAN KUMAR, THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASSESSEE OFFERED THE ENTIRE CAPITAL GAINS FOR TAXATION. HOWEVER IN THE ASSESSMENT PROCEEDING S, THE ASSESSEE CLAIMED THAT HE IS LIABLE ONLY FOR 1/3 RD OF THE CAPITAL GAINS. THEREFORE, THE ASSESSING OFFICER REJECTED THE CLAIM OF THE ASSESSE E AND ASSESSED THE ENTIRE CAPITAL GAINS ON HIS HANDS. AS FAR AS THE IMPROVEM ENT IS CONCERNED, THERE IS NO MATERIAL FILED BY THE ASSESSEE, HENCE THE ASS ESSING OFFICER AS WELL AS THE CIT(A) REJECTED THE CLAIM OF THE ASSESSEE. 4. HAVING HEARD THE LD. COUNSEL FOR THE ASSESSEE AND THE LD. DR, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT UND ER THE HINDU SUCCESSION 3 I.T.A. NO.3466/18 ACT, THE ASSESSEE INHERITED PROPERTY ALONG WITH HI S TWO CHILDREN. THEREFORE, THE RIGHT OF THE ASSESSEE OVER THE PROPE RTY IS 1/3 RD . HENCE, THE ASSESSEE IS LIABLE TO PAY CAPITAL GAIN ONLY TO THE EXTENT OF HIS RIGHT IN THE PROPERTY. IN VIEW OF THE ABOVE LEGAL POSITION, TH IS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ASSESSMENT HAS TO BE RE STRICTED ONLY TO THE EXTENT OF 1/3RD OF THE CAPITAL GAIN ARISES OUT OF THE SALE OF THE PROPERTY. AS FAR AS IMPROVEMENT IS CONCERNED, ADMITTEDLY THERE I S NO MATERIAL FILED EITHER BEFORE THE ASSESSING OFFICER OR BEFORE THE C IT(A) AND NO MATERIAL IS ALSO FILED BEFORE THIS TRIBUNAL. THEREFORE, THIS TR IBUNAL IS UNABLE TO UPHOLD THE CLAIM OF THE ASSESSEE. ACCORDINGLY, THE ORDER O F THE ASSESSING OFFICER AS CONFIRMED BY CIT(A) IS MODIFIED AND THE ASSESSING O FFICER IS DIRECTED TO ASSESS ONLY 1/3RD OF THE CAPITAL GAIN IN THE HANDS OF THE ASSESSEE. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IN ITA NO.3466/CHNY/2018 FOR ASSESSMENT YEAR 2013-2014 IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE COURT ON 7 TH FEBRUARY, 2020 AT CAMP AT COIMBATORE. SD/- SD/- ( ) (S. JAYARAMAN) /ACCOUNTANT MEMBER (... ) (N.R.S. GANESAN) / JUDICIAL MEMBER COIMBATORE /DATED, THE 7 TH FEBRUARY, 2020. KV #$ %&'& /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. * ( )/CIT(A) 4. * /CIT 5. &+, - /DR 6. ,./ /GF