ITO, Gurgaon V. Sh. Manu Kumar Lal, Gurgaon

ITA 4318/DEL/2012

• Counselvise Citation: 431820114 RSA 2012
• Duration Of Justice: 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-10-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2005-2006
• Appeal Filed On: 08-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Gift
• Section: 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: E NEW DELHI BEFORE SHRI J.SUDHAKAR REDDY, A.M. AND SHRI RAJPAL YADAV, JM ITA NO: 4318/DEL/2012 ASSESSMENT YEAR : - 2005-06 ITO, WARD 1(3), GURGAON VS. SH. MANU KUMA R LAL L/H OF LATE SMT.VIMLA LAL R/O 164, 1 ST FLOOR, NATIONAL MEDIA CENTRE,DLF CITY PHASE 3, NEAR SHANKAR CHOWK GURGAON. (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI AROOP KUMAR SINGH, SR.D.R. RESPONDENT: SHRI SP CHATURVEDI, FCA O R D E R PER J.SUDHAKAR REDDY, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE REVENUE DIRECTED AGA INST THE ORDER DT.30.5.2012 OF LD.CIT(A)-FARIDABAD, PERTAINING TO ASSESSMENT YEAR 2005-06. 2. THE FACTS IN BRIEF ARE GIVEN AT PARA 4 OF COMMIS SIONER OF INCOME TAX (APPEALS)S ORDER WHICH IS EXTRACTED FOR READY REFERENCE. THE BRIEF FACTS OF THE CASE ARE THAT THE RETURN OF INCOME DECLARING INCOME OF RS.68,174/- WAS FILED BY THE ASSESSEE. D URING THE COURSE OF ASSESSMENTS PROCEEDINGS IN THE CASE OF LA TE SHRI ARUN KUMAR LAL FOR ASSESSMENT YEAR 2005-06, THE ASSESSIN G OFFICER NOTICED THAT SMT.VIMLA LAL W/O SHRI MUTSADDI LAL WA S A CO-OWNER HOLDING 50% SHARE IN THE PROPERTY BEARING NO.30, ST REET NO.1, GOVERNMENT SERVICES CO-OPERATIVE SOCIETY, SHANTI NI KETAN, DELHI, WHICH WAS SOLD FOR RS. 3,15,00,000/- DURING THE FY 2004-05. HOWEVER, SMT.VIMLA LAL DID NOT FILE HER RETURN OF I NCOME DECLARING LONG TERM CAPITAL GAIN AMOUNTING TO RS.64,11,360/- WHICH HAD 2 ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 14 7 OF THE INCOME TAX ACT, 1961. CONSEQUENTLY, A NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT, 1961 WAS ISSUED AFTER RECORD ING THE REASONS ON 23.3.2010. THE ASSESSMENT PROCEEDINGS W ERE ATTENDED BY SHRI MANU KUMAR LAL, GRAND SON & L/H OF LATE SMT.VIMLA LAL. IT WAS SUBMITTED THAT LATE SMT.VIML A LAL HELD ONLY 50 SQUARE YARDS AND LATE SHRI ARUN KUMAR LAL HELD 1 000 SQUARE YARDS OF AREA IN THE AFORESAID PROPERTY. THE ASSES SEE RECEIVED ONLY RS.15,00,000/- TOWARDS HER SHARE OF 50 SQUARE YARDS IN THE SALE CONSIDERATION AND SHRI ARUN KUMAR LAL RECEIVED RS.3,00,00,000/- TOWARDS HIS SHARE OF 1000 SQUARE Y ARDS. SHRI MANU KUMAR LAL, GRAND SON OF LATE SMT.VIMLA LAL AND SON OF LATE SHRI ARUN KUMAR LAL INVESTED RS.32,00,00,000/- IN R URAL ELECTRIFICATION CORPORATION LIMITED NON CONVERTIBLE REDEEMABLE TAXABLE BONDS ON THEIR BEHALF TO AVAIL THE BENEFITS UNDER SECTION 54E OF THE INCOME TAX ACT, 1961 AGAINST THE CAPITAL GAINS ARISING FROM SALE OF THE SAID PROPERTY. IN THE LIGHT OF TH ESE SUBMISSIONS, IT WAS CONTENDED THAT THE ASSESSMENT OF CAPITAL GAINS IN THE HANDS OF LATE SMT.VIMLA LAL BY TAKING 50% SHARE IN THE PR OPERTY WAS INCORRECT AND NO TAX WAS REQUIRED TO BE PAID AS THE INVESTMENT WAS MADE IN THE TAX EXEMPTION BONDS. THE ASSESSING OFFICER HAS, HOWEVER, NOT ACCEPTED THE REPLY OF THE ASSESSE E THAT THE SHARE OF SMT.VIMLA LAL WAS ONLY 50 SQUARE YARDS BUT OF 1050 SQUARE YARDS, IN ABSENCE OF ANY CONCRETE EVIDENCE A ND ON THE GROUND THAT 950 SQUARE YARDS EARLIER GIFTED ON 12.8 .2003 TO SMT.MANJULA AGGARWAL AND SMT.ANURADHA SINGH, BOTH D AUGHTERS OF SMT.VIMLA LAL, OUT OF TOTAL AREA OF 2000 SQUARE YARDS WAS FROM THE COMMON OWNERSHIP OF BOTH SHRI ARUN KUMAR LAL AN D SMT.VIMLA LAL AS EVINCED BY REGISTERED GIFT DEEDS EXECUTED BY SHRI ARUN LAL AND SMT.VIMLA LAL JOINTLY. CONSIDERING THE FINDING S ARRIVED AT IN THE CASE OF ALTE SHRI ARUN KUMAR LAL, THE ASSESSING OFFICER HAS MADE ADDITION OF RS.24,62,429/- AS LONG TERM CAPITA L GAIN AFTER ALLOWING DEDUCTION OF RS.16,00,000/- UNDER SECTION 54EC OF THE ACT AGAINST THE HALF SHARE OF LONG TERM CAPITAL GAI N OF RS.40,62,429/-. AGGRIEVED WITH THE ORDER, APPELLAN T FILED THE PRESENT APPEAL. 3. ON APPEAL THE FIRST APPELLATE AUTHORITY UPHELD T HE CONTENTIONS OF THE ASSESSEE. 4. FURTHER AGGRIEVED, THE REVENUE IS IN APPEAL BEFO RE US. 3 5. WE HAVE HEARD MR.AROOP KUMAR SINGH, THE LD.SR.D. R. ON BEHALF OF THE REVENUE AND MR.SP CHATURVEDI, FCA THE LD.COUNSE L FOR THE ASSESSEE. 6. ON A CAREFUL CONSIDERATION OF THE FACTS AND CIRC UMSTANCES OF THE CASE, ON PERUSAL OF THE PAPERS ON RECORD AND THE ORDERS OF THE AUTHORITIES BELOW, AS WELL AS CASE LAWS CITED, WE H OLD AS FOLLOWS:- THE ISSUE IN DISPUTE IS WHETHER THE ASSESSEES SHARE WA S ONLY 50 SQUARE YARDS OUT OF 1050 SQUARE YARDS OF THE PROPERTY. TH E COMMISSIONER OF INCOME TAX (APPEALS) CONSIDERED THE FOLLOWING DOCUM ENTS:- * AGREEMENT OF PARTITION DT. 1.8.1981 BETWEEN LATE SHRI ARUN KUMAR LAL AND LATE SMT.VIMLA LAL THAT STATES THAT THE FRO NT PORTION COMPRISING OF 1000 SQUARE YARDS OF 1/30, SHANTI NIK ETAN, NEW DELHI WILL BELONG TO LATE SHRI ARUN KUMAR LAL AND THE REA R PORTION COMPRISING OF 1000 SQUARE YARDS WILL BELONG TO LATE SMT.VIMLA LAL. * FAMILY AGREEMENT DT. 1.1.1982: BETWEEN SHRI ARUN KUMAR LAL AND LATE SMT.VIMLA LAL AND HER TWO DAUGHTERS NAMELY SMT .MANJULA AGERWALA AND SMT.ANURADHA SINGH WHICH CLEARLY STAT ES THAT THE REAR PORTION WOULD BE GIVEN TO THE DAUGHTERS FOR CO NSTRUCTION OF HOUSES AND THEY WILL HAVE A RIGHT ON THE CONSTRUCTE D PART AND NOT ON THE LAND BENEATH. *COPY OF SUIT FILED IN HIGH COURT, NEW DELHI BY SMT .MANJULA AGERWALA AND SMT.ANURADHA SINGH IN 2002 AGAINST LAT E SHRI ARUN KUMAR LAL AND SMT.VIMLA LAL THAT CLEARLY STATES THE SHARE OF EACH PERSON IN THE PROPERTY WHICH HAS BEEN ADMITTED IN T HE COURT OF LAW AND BINDING ON THE APRTIES. POINT NO.3(I) IN THE E NCLOSED SUIT FILED IN THE HIGH COURT, NEW DELHI. * GIFT DEED DT. 12.8.2003 IN FAVOUR OF SMT.MANJULA AGERWALA WHICH CLEARLY STATES THAT LATE SHRI ARUN KUMAR LAL AND LA TE SMT.VIMLA LAL ARE GIFTING 26.6% OF 2000 SQUARE YARDS I.E. 532 SQU ARE YARDS FROM THE REAR PORTION OF THE PLOT WHICH BELONGS TO SMT.V IMLA LAL ACCORDING TO THE AGREEMENT OF PARTITION DT. 1.8.198 1. * GIFT DEED DT. 12.8.2003 IN FAVOUR OF SMT.ANURADHA SINGH WHICH CLEARLY STATES THAT LATE SHRI ARUN KUMAR LAL AND LA TE SMT.VIMLA LAL ARE GIFTING 20.8% OF 2000 SQUARE YARDS I.E. 418 SQ UARE YARDS FROM THE REAR PORTION OF THE PLOT WHICH BELONGS TO SMT.V IMLA LAL ACCORDING TO THE AGREEMENT OF PARTITION DT. 1.8.198 1. 4 * CONVERSION OF LEASE HOLD INTO FREEHOLD APPLICATIO N FILED ON 6.11.2003 IN DDA. PAYMENT OF RS.46,70,502/- MADE A S CONVERSION CHARGES FOR THE 2000 SQUARE YARDS. SUBSEQUENTLY TH E CONVERSION DID TAKE PLACE. * CONVEYANCE DEED DT. 10.2.2004 AND PARTITION DEED DT. 12.2.2004 IN FAVOUR OF SMT.MANJULA AGERWALA AND SMT.ANURADHA SINGH THAT CLEARLY STATES THAT THEY SHALL RETIAN THE REAR PORT ION OF 950 SQUARE YARDS IN 1/30 SHANTI NIKETAN, NEW DELHI I.E. 532 S QUARE YARDS AND 418 SQ.YARDS RESPECTIVELY AND LATE SHRI ARUN KUMAR LAL AND LATE SMT.VIMLA LAL WILL RETAIN THE REMAINING PORTION COM PRISING OF 1050 SQUARE YARDS. 7. THEREAFTER HE OBSERVED THAT THE ASSESSING OFFICE R HAS NOT BROUGHT ANY MATERIAL ON RECORD TO REBUT THE EVIDENCES FILED BY THE ASSESSEE. BASED ON THESE DOCUMENTARY EVIDENCES HE HELD THAT T HE ASSESSING OFFICER HAS ERRONEOUSLY DRAWN HIS CONCLUSIONS THAT THE ASSE SSEE WAS HAVING 50% SHARE IN THE SAID PROPERTY, INSTEAD OF THE FACT THAT THE ASSESSEE HAS ONLY 50 SQUARE YARDS. HE ALSO NOTED THAT THE LEGAL HEIRS OF LATE SHRI ARUN KUMAR LAL HAD SHOWN THE ENTIRE SALE CONSIDERATION I N ITS RETURN OF INCOME. ON THESE FACTS AND CIRCUMSTANCES WE HAVE T O NECESSARILY UPHOLD THE FINDING OF THE FIRST APPELLATE AUTHORITY AND DISMISS THIS GROUND OF REVENUE. 8. IN THE RESULT, THE APPEAL FIELD BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH OCTOBER,2012. SD/- SD/- (RAJPAL YADAV) (J. SUDHAKAR REDDY) JUDICIAL MEMBER ACCOUNTANT MEMBE R DATED: THE 19 TH OCTOBER, 2012 * MANGA 5 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT; 2.RESPONDENT; 3.CIT; 4.CIT (A); 5.DR; 6.GUARD FILE BY ORDER DY. REGISTRAR 1. DATE OF DICTATION: 12.10.2012 2. DRAFT PLACED BEFORE THE AUTHOR ON: 17.10.12 3. DRAFT PROPOSED AND PLACED BEFORE SECOND MEMBER ON: 4. DRAFT DISCUSSED/APPROVED BY THE SECOND MEMBER ON: 5. APPROVED DRAFT CAME TO SR.P.S. ON: 6. DATE OF PRONOUNCEMENT : 7. FILE SENT TO BENCH CLERK ON : 8. DATE ON WHICH FILE GIVEN TO HEAD CLERK ON: 9. DATE OF DISPATCHING THE ORDER ON :