SAVITRI ASHOK HEMDEV, MUMBAI V. ITO 19(3)(4), MUMBAI

ITA 3978/MUM/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3378 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 14-03-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 25-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K SRIVASTAVA
• Assessee Lawyers: A K LAL
• Keywords: Share purchase agreement; Wrong claim
• Section: 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D, MUMBAI BEFORE SHRI D.KARUNAKARA RAO (AM) AND SHRI RAM LAL NEGI (JM) ITA NO 3978/MUM/2015 ASSESSMENT YEAR: 2011-12 SMT. SAVITRI ASHOK HEMDEV. A-10B, JAY VILLA, C.M.SOCIETY, OPP. BENZER WOMEN (OPP. YES BANK), LINKING ROAD, SANTACRUZ (WEST), MUMBAI- 400 054. PAN:- AAXPM7130M VS. THE ITO 23(3)(2), MATRU MANDIR, MUMBAI- 400 007. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI. A.K.LAL RESPONDENT BY : SHRI. A.K.SRIVASTAVA DATE OF HEARING: 14/03/2016 DATE OF PRONOUNCEMENT: 31/03/2016 O R D E R PER RAM LAL NEGI, JM THE PRESENT APPEAL FILED BY THE ASSESSEE IS DI RECTED AGAINST THE ORDER OF CIT(APPEALS)-30, MUMBAI DATED 01/04/2015 PERTAINING TO THE ASSESSMENT YEAR 2011-12. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE F ILED HER RETURN OF INCOME FOR THE ASSESSMENT YEAR 2011-12, DECLARING THE TOTAL INCOME OF RS. 1,86,195/-. THE RETURN WAS PROCESSED U/S 143(1) OF THE INCOME TAX A CT, 1961 (IN SHORT THE ACT). THE RETURN WAS SELECTED FOR SCRUTINY AND NOT ICES U/S 143(2) AND142 (1) WERE SERVED UPON THE ASSESSEE. SINCE, IT WAS NOTICE D THAT THE ASSESSEE HAD SOLD IMMOVABLE PROPERTY DURING THE RELEVANT FINANCIAL YE AR, THE ASSESSEE WAS ASKED TO FURNISH FULL DETAILS REGARDING THE SALE TRANSACT ION. IN RESPONSE THEREOF, THE 2 ITA NO 3978/MUM/2015 ASSESSMENT YEAR: 2011-12 ASSESSEE INFORMED THAT SHRI. ASHOK T. HEMDEV, HER H USBAND BEING OWNER OF A FLAT NO. A/503, MANJU MAHAL, CHETAK CO-OPERATIVE HO USING SOCIETY, MADE HER AN ASSOCIATE MEMBER OF THE SOCIETY ON 7.12.2003. TH E SAID FLAT WAS SOLD ON 27.6.2010 TO MR. & MRS. MELWANI FOR A TOTAL CONSIDE RATION OF RS. 1.20 CRORES. THE ASSESSEE, IN HER COMPUTATION OF INCOME MENTIONE D THE INCOME OF RS.9,50,000/- AS LONG TERM CAPITAL AND CLAIMED DEDU CTION OF RS.1,00,000/- U/S 54 OF THE ACT. 4. DURING THE ASSESSMENT PROCEEDINGS THE ASSESSEE C LAIMED THAT SHE BEING ASSOCIATE MEMBER OF THE SOCIETY WAS HOLDING SHARE I N THE SAID FLAT WITH HER HUSBAND. THE A.O AFTER VERIFYING THE FACTS AND DETA ILS FILED BY THE ASSESSEE MADE AN ADDITION OF RS. 9,50,000/- TO THE INCOME OF THE ASSESSEE UNDER THE HEAD INCOME FROM OTHER SOURCES. THE ASSESSMENT OR DER WAS CHALLENGED BEFORE THE LD. CIT(A) BY THE ASSESSEE. SINCE THE LD. CIT( A) CONFIRMED THE ADDITION MADE BY THE A.O, THE ASSESSEE IS IN APPEAL BEFORE T HIS TRIBUNAL AGAINST THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) ON THE FOLL OWING EFFECTIVE GROUNDS:- (I) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS. 9,50 ,000/- AS INCOME FROM OTHER SOURCES MADE BY THE ASSESSING OFFICER AN D DISMISSING THE APPEAL OF THE APPELLANT. (II) THE LEARNED CIT(A) FURTHER ERRED IN COMPLETELY IGNORING THE AMENDED STATEMENT OF FACTS AND AMENDED GROUND OF AP PEAL FILED BY THE APPELLANT AS PER HER LETTER DATED. 03/03/2015 W HICH HE HAS REPRODUCED ON PAGE 3, PARA 3 OF HIS ORDER BUT HAS N OWHERE DISCUSSED THE SAME. (III) THE APPELLANT WAS MERELY AN ASSOCIATE MEMBER OF THE SOCIETY AND COULD NOT HAVE ANY PROPRIETARY INTEREST IN THE FLAT SOLD BY HER HUSBAND. THE ENTIRE CONSIDERATION OF RS. 1,20,00,00 0/- WAS 3 ITA NO 3978/MUM/2015 ASSESSMENT YEAR: 2011-12 RECEIVED BY HER HUSBAND IN HIS NAME AND DEPOSITED I N JOINT ACCOUNTS OF HIMSELF AND THE APPELLANT BEING HIS WIF E. (IV) THE AMOUNT OF RS. 9,50,000/- HAS NO CHARACTER STICK OF INCOME AND NOT RECEIVED BY APPELLANT, CANNOT BE CONSIDERED AS APPELLANTS INCOME AND MAY THEREAFTER DIRECTED TO BE DELETED. 5. BEFORE US THE LD. AR SUBMITTED THAT THE ASSESSE ES NAME WAS INCLUDED IN SHARE CERTIFICATE AS AN ASSOCIATE MEMBER OF THE SOC IETY. THE FLAT IN QUESTION WAS SOLD IN JUNE 2010 FOR RS. 1,20,00,000/-. THE ENTIRE SALE CONSIDERATION WAS RECEIVED THROUGH CHEQUES IN THE NAME OF HER HUSBAND MR. ASHOK T. HEMDEV AND THE PROCEEDS OF THE SAID CHEQUES WERE DEPOSITED IN HIS BANK ACCOUNT EXCEPT AN AMOUNT OF RS. 5,00,000/- WHICH WAS DEPOSI TED IN THE JOINT ACCOUNT OF MR. ASHOK T. HEMDEV AND THE ASSESSEE. THE ASSESS EE DUE TO MISCONCEPTION AND MISUNDERSTANDING CLAIMED THAT BEING ASSOCIATE M EMBERS SHE RECEIVED RS. 9,50,000/- AS HER SHARE IN THE FLAT SOLD AND ALSO C LAIMED DEDUCTION U/S 54 OF THE ACT. IN THE LIGHT OF THE SAID FACTS THE LD. CIT (A) HAS WRONGLY UPHELD THE FINDING OF THE A.O. THEREFORE, THE ORDER IS LIABLE TO BE SET ASIDE. ON THE OTHER HAND THE LD. DR SUBMITTED THAT THE ASSESSEES CLAIM WAS FOUND FALSE AS SHE HAS FAILED TO PROVE THAT SHE WAS THE CO-OWNER OF TH E FLAT WITH HER HUSBAND, THEREFORE, THE ASSESSEE WAS NOT ENTITLED TO CLAIM A NY SHARE OUT OF THE SALE CONSIDERATION. HENCE, THE AUTHORITIES BELOW HAVE RI GHTLY ADDED THE AMOUNT IN QUESTION TO THE INCOME OF THE ASSESSEE UNDER THE HE AD INCOME FROM OTHER SOURCES. 6. WE HAVE HEARD THE RIVAL CONTENTION AND ALSO PERU SED THE MATERIAL PLACED BEFORE US. FACTS EMANATING FROM THE RECORD AND CONT ENTIONS OF THE PARTIES REVEAL THAT MR. ASHOK T. HEMDEV HUSBAND OF THE ASSE SSEE WAS THE OWNER OF THE FLAT IN QUESTION AND SUBSEQUENTLY ASSESSEE WAS MADE AN ASSOCIATE MEMBER OF THE SOCIETY. THE FLAT WAS SOLD FOR RS. 1,20,00,000/ - AND THE ENTIRE SALE CONSIDERATION WAS PAID BY THE PURCHASERS THROUGH BA NKERS CHEQUES IN THE 4 ITA NO 3978/MUM/2015 ASSESSMENT YEAR: 2011-12 NAME OF MR. ASHOK T. HEMDEV HUSBAND OF THE ASSESSEE . CHEQUES AMOUNTING TO RS. 1,15,00,000/- WERE DEPOSITED IN THE ACCOUNT OF MR. ASHOK T. HEMDEV AND ONE CHEQUE FOR REMAINING AMOUNT I.E., RS. 5,00,000/ -, IN FAVOUR OF MR. ASHOK T. HEMDEV WAS DEPOSITED IN THE JOINT ACCOUNT OF THE ASSESSEE AND HER HUSBAND MR. ASHOK HEMDEV. HENCE, THERE IS NO DISPUTE REGARD ING THE OWNERSHIP OF THE FLAT AND SALE THEREOF FOR RS. 1,20,00,000/- 7. SINCE, MR. ASHOK HEMDEV HUSBAND OF THE ASSESSEE BEING THE OWNER OF THE FLAT IN QUESTION HAS RECEIVED THE ENTIRE SALE CONSI DERATION, HE WAS ENTITLED TO CLAIM DEDUCTION UNDER SECTION 54 OF THE ACT AGAINST THE ENTIRE AMOUNT OF LONG TERM CAPITAL GAIN, ON INVESTMENT THEREOF IN PURCHAS E OF ANOTHER FLAT. SO, BEFORE ADJUDICATING THE SOLE GRIEVANCE OF THE APPELLANT, I T IS NECESSARY TO ASCERTAIN WHETHER MR. ASHOK HEMDEV HUSBAND OF THE ASSESSEE HA S CLAIMED THE ENTIRE AMOUNT OF SALE CONSIDERATION AS HIS LONG TERM CAPIT AL GAIN IN HIS RETURN OF INCOME AND HAS AVAILED DEDUCTION U/S 54 OF THE ACT OR HE HAS CLAIMED CAPITAL GAIN OF RS.1,10,50,000/-I.E., (RS.1,20,00,000- 9,50 ,000=1,10,50,000). IF HE HAS CLAIMED THE CAPITAL GAIN OF RS. 1,10,50,000/- INSTE AD OF RS. 1,20,00,000/-, ONLY THEN THE QUESTION OF MAKING ADDITION OF REMAINING A MOUNT OF RS. 9,50,000/- TO THE INCOME OF THE ASSESSEE UNDER THE HEAD INCOME F ROM OTHER SOURCES OR LONG TERM CAPITAL GAIN AS THE CASE MAY BE, DOES ARISE. BUT IF MR. ASHOK HEMDEV HAS ALREADY CLAIMED THE ENTIRE AMOUNT OF RS.1,20,00,000 /- AS HIS LONG TERM CAPITAL THEN THE AMOUNT IN QUESTION CANNOT BE ADDED TO THE INCOME OF THE ASSESSEE MERELY FOR THE REASON THAT THE ASSESSEE HAS MADE A WRONG CLAIM. 8. WE DO NOT FIND ANY EVIDENCE OF RECEIPT OF RS. 9, 50,000/-BY THE ASSESSEE OUT OF THE TOTAL SALE CONSIDERATION AFORESAID. AS PER T HE STATEMENT OF BANK ACCOUNT ONLY ONE CHEQUE FOR RS 5.00.000/- HAS BEEN DEPOSITE D IN HER ACCOUNT MAINTAINED JOINTLY WITH HER HUSBAND. THEREFORE, WE ARE, OF THE CONSIDERED VIEW THAT BEFORE MAKING ADDITION OF RS. 9,50,000/- TO TH E INCOME OF THE ASSESSEE, 5 ITA NO 3978/MUM/2015 ASSESSMENT YEAR: 2011-12 THE MATTER IS REQUIRED TO BE EXAMINED BY THE AO IN THE LIGHT OF THE OBSERVATIONS MADE IN THE FOREGOING PARA, IN ORDER TO ASCERTAIN A S TO WHETHER THE ADDITION OF RS. 9,50,000/- IS TO BE MADE TO THE INCOME OF THE A SSESSEE UNDER THE HEAD INCOME FROM OTHER SOURCES OR TO THE INCOME OF MR ASHOK T. HEMDEV, HUSBAND OF THE ASSESSEE AS LONG TERM CAPITAL GAIN. WE, TH EREFORE, SET ASIDE THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) AND RESTORE THE FILE TO THE AO WITH THE DIRECTION TO EXAMINE THE MATTER AFTER GIVING OPPORT UNITY OF BEING HEARD TO THE ASSESSEE AND TO PASS ASSESSMENT ORDER AFRESH. 9. IN THE RESULT, APPEAL OF THE ASSESSEE FOR A.Y. 2 011-12 IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST MARCH, 2016 SD/- SD/- ( D.KARUNAKARA RAO ) ( RAM LAL NEGI ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED:31/03/2016 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A)- 4. / CIT 5. !' , $ !'% , / DR, ITAT, MUMBAI 6. &' ( / GUARD FILE. / BY ORDER, ) //TRUE COPY// / (DY./ASSTT. REGISTRAR) PRAMILA , / ITAT, MUMBAI