DIPTI N. KHEMANI, MUMBAI V. I.T.O. 25(3)(2), MUMBAI

ITA 5120/MUM/2012

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8046 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-03-2017
• Appeal Filed By: Assessee
• Bench Allotted: D
• Next Hearing Date: 29-12-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 10-08-2012
• Court: TRIBUNAL
• Department Lawyers: SHRIKANT NAMDEO
• Keywords: Opportunity of being heard
• Section: 143(3); 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH D , MUMBAI BEFORE SHRI C . N . PRASAD , JUDICIAL MEMBER AND SHRI RA JESH KUMAR , ACCOUNTANT MEMBER ITA NO. 5 12 0 /MUM/201 2 : (A.Y : 20 0 9 - 10 ) DIPTI N KHEMANI B - 708, BHOOMI VALLEY THAKUR VILLAGE KANDIVALI (E) PAN : A ZRPK5957C ( / APPELLANT) VS. ITO 25(3)(2) C - 11, 1 ST FLOOR, PRATYAKSHAKAR BHAWAN B.K.C. BANDRA (E) MUMBAI 400 051 ( / RESPONDENT) / A PPELLANT BY : NONE / RE SPONDENT BY : SHRI SHRIKANT NAMDEO / DATE OF HEARING : 29 / 12 /201 6 DATE OF PRONOUNCEMENT : 10/ 03 / 2017 / O R D E R PER C.N.PRASAD (J.M.) : THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT (APPEALS) - 35 , MUMBAI DATED 24 . 0 5 .201 2 FOR THE ASSESSMENT YEAR 20 0 9 - 1 0 . 2. THE ONLY ISSUE IN THE APPEAL OF THE ASSESSEE IS THAT THE LD. CIT (APPEALS) ERRED IN LAW IN UPHOLDING THE ASSESSMENT OF CAPITAL GAINS AS INCOME FROM OTHER SOURCES. FROM THE ORDER SHEET WE FIND THAT SEVERAL 2 DIPTI N KHEMANI ITA NO. 5 12 0 /MUM/201 2 , A.Y.200 9 - 10 NOTICES WERE ISSUED FROM 26.02.2015 TILL 29.02.201 6, THERE WAS NO REPRESENTATION BY THE ASSESSEE WHEN THE MATTER POSTED ON SEVERAL DAYS EXCEPT ON 16.09.2015 WHERE THE MATTER COULD NOT BE HEARD FOR WANT OF TIME AND ON 21.07.2016 WHERE THE BEN CH DID NOT FUNCTION ON THAT DAY. INSPITE OF ISSUE OF NOTICES BY REGISTERED POST ACKNOWLEDGEMENT DUE FIXING THE DATE OF HEARING ON 28.03.2016, THE NOTICES RETURNED UNSERVED WITH AN ENDORSEMENT THAT THE NOTICE WAS UNCLAIMED. SIMILARLY THE NOTICE ISSUED FIXING THE DATE OF HEARING ON 29.12.2016 WAS RETURNED UNSERVED WITH A N ENDORSEMENT THAT THE ASSESSEE IS LEFT. THEREFORE, SINCE THE ASSESSEE IS NOT APPEARING, WE HEAR D THE LD. DR AND DISPOSE OF THIS APPEAL ON MERITS. 3. THE LD. DR SUBMITS THAT THE ASSESSING OFFICER WHILE COMPLETING THE ASSESSMENT ON 06.12.2011 U/S 143(3) OF THE ACT NOTICED THAT AS PER THE AIR INFORMATION ASSESSEE HAS PURCHASED IMMOVABLE PROPERTY FOR RS.36,51,000/ - . THE ASSESSEE WAS REQUIRED TO SUBMIT THE DETAILS ALONG WITH SOURCE OF INVESTMENT. THE ASSESSEE THROUGH AUTHORIZED REPRESENTATIVE BY LETTER DATED 03.10.2011 SUBMITTED CERTAIN DETAILS BUT TO THE QUERY OF PURCHASE OF PROPERTY THE ASSESSEE DENIED TO HAVE PURCHASED THE SAID PROPERTY. THE ASSESSING OFFICER ISSUED NOTICES U/S 133(6) TO THE JOINT SUB REGISTRAR, BORIWALI (WEST), MUMBAI AND IN REPLY TO THE SAID NOTICE, THE REGISTRAR S OFFICE HAS ENCLOSED A COPY OF INDEX NO.II, SHOWING THAT THE PROPERTY WAS SOLD BY THE ASSESSEE FOR RS.36,51,000/ - . BASED ON THIS INFORMATION THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO SUBMIT THE PURCHASE AND SALE AGREEMENT OF PROPERTY SOLD BY HER AND WORKING OF CAPITAL GAIN THEREOF. HOWEVER, ASSESSEE CHOSE NOT TO FILE ANY 3 DIPTI N KHEMANI ITA NO. 5 12 0 /MUM/201 2 , A.Y.200 9 - 10 DETAILS IN RESPECT OF THE PROPERTY SOLD BY HER OR CAPITAL GAINS WORKING BEFORE THE ASSESSING OFFICER INSPITE OF THE SEVERAL REQUESTS BY THE ASSESSING OFFI CER. THE LD. DR SUBMITS THAT LEFT WITH NO ALTERNATE AND SINCE ASSESSMENT WAS TIME BARR ING , THE ASSESSING OFFICER COMPLETED THE ASSESSMENT TREATING THE SALE CONSIDERATION OF RS.36,51,000/ - AS INCOME OF THE ASSESSEE UNDER THE HEAD INCOME FROM OTHER SOURCES AND BROUGHT TO TAX ACCORDINGLY. THE LD. DR SUBMITS THAT BEFORE THE LD. CIT (APPEALS) ASSESSEE CONTENDED THAT THE SHE IS NOT THE OWNER OF THE PROPERTY BUT HER HUSBAND IS THE OWNER OF THE PROPERTY AND SHE HAS MERELY SIGNED THE DOCUMENT AS A CO - OWNER FOR THE NAME SAKE. THEREFORE, THE ASSESSEE PLEADED BEFORE THE LD. CIT (APPEALS) THE ADDITION MADE IN THE HANDS OF THE ASSESSEE SHOULD BE DELETED. THE LD. DR SUBMITS THAT THE LD. CIT (APPEALS) CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE EVIDENCES ON RECOR D CONFIRMED THE ASSESSMENT FOR THE REASON THAT THE ASSESSEE COULD NOT PROVE THAT THE PROPERTY DID NOT BELONG TO HER BUT BELONGED TO HER HUSBAND. LD. DR FURTHER SUBMITS THAT THE HUSBAND OF THE ASSESSEE ALSO DID NOT DECLARE THE CAPITAL GAIN IN HIS RETURN OF INCOME. THEREFORE, THE LD. DR VEHEMENTLY PLACING RELIANCE ON THE ORDERS OF THE LD.CIT (APPEALS) SUBMITS THAT THE ACTION OF THE LD. CIT (APPEALS) IN CONFIRMING THE ADDITION IS JUSTIFIED AND THE ASSESSEES APPEAL IS LIABLE TO BE DISMISSED. 4. WE HAVE HEARD THE LD. DR, PERUSED THE ORDERS OF THE AUTHORITIES BELOW. THE ASSESSEE DERIVING INCOME FROM BUSINESS AND OTHER SOURCES FILED HER RETURN OF INCOME ON 09.03.2010 DECLARING INCOME OF RS.1,16,640/ - . ASSESSMENT WAS COMPLETED BY THE ASSESSING OFFICER ON 4 DIPTI N KHEMANI ITA NO. 5 12 0 /MUM/201 2 , A.Y.200 9 - 10 06.12.2011 U/S 143(3) OF THE ACT DETERMINING THE INCOME OF THE ASSESSEE AT RS.37,67,640/ - . IN THE COURSE OF ASSESSMENT PROCEEDINGS, IT CAME TO LIGHT THAT THE ASSESSEE HAS SOLD PROPERTY FOR RS.36,51,000/ - AS PER THE INFORMATION FURNISHED BY THE REGISTRAR S OFFICE, BORIWALI (WEST), MUMBAI. BASED ON THIS INFORMATION, THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO SUBMIT THE DOCUMENTS LIKE PURCHASE AND SALE AGREEMENT OF THE PROPERTY SOLD BY HER ALONG WITH WORKING OF CAPITAL GAIN THEREOF. HOWEVER, THE ASSESSEE DID NOT FILE THE REQUIRED DOCUMENT S. SHE DID NOT FILE THE CAPITAL GAIN COMPUTATION BEFORE THE ASSESSING OFFICER INSPITE OF SEVERAL NOTICES ISSUED BY THE ASSESSING OFFICER. THEREFORE, THE ASSESSING OFFICER, TREATED THE ENTIRE SALE CONSIDERATION RECEIVED B Y THE ASSESSEE AS INCOME OF THE ASSESSEE UNDER THE HEAD INCOME FROM OTHER SOURCES AND BROUGHT TO TAX. THE LD. CIT (APPEALS) SUSTAINED THE ORDER OF THE ASSESSING OFFICER IN ASSESSING THE SALE CONSIDERATION UNDER THE HEAD INCOME FROM OTHER SOURCES OBSERVING AS UNDER : 5. AS AGAINST THE ABOVE, THE APPELLANT HAS CONTENDED THAT THE SAID PROPERTY BELONG TO THE HUSBAND OF THE APPELLANT AND THE APPELLANT WAS MERELY A JO INT /CO - OWNER FOR THE NAME SAKE ONLY . I HAVE CONSIDERED THIS CONTENTION OF THE APPELLANT. IT MA Y BE SEEN T HAT THE HUSBAND OF THE APPELLANT SHRI NARESH KHEMAN I HAS ALSO SUBMITTED A LETTER THROUGH A.R.. HE HAS BASICALLY CONTENDED THAT THE ADDITION IN THE HAND OF WIFE SHOULD B E DELETED . HOWEVER, THE APPELLANT HAS NOT BEEN ABLE TO PROVE THAT SHE IS NOT THE SUBSTANTIAL OWNER OF THE PROPERTY. WHEN A PROPERTY IS OWNED, IT DEFINITELY ATTRACTS CAPITAL GAIN WHICH HAS TO BE BORNE BY THE OWNER OR CO - OWNER IN PROPORTION TO THEIR RESPECTIVE SHARES, BUT SUCH CLAIM CAN ONLY BE ENTERTAINED I F THE APPELLANT DISCHARGES ITS ONUS THAT THE PROPERTY IN QUESTION BELONGS TO SOMEONE ELSE BY GIVING HIS/HER INCOME TAX RETURN DETAILS, PAN NO. , BANK A/C. NO . AND OTHER DETAILS. SHRI NARESH KHE MANI, HUSBAND OF THE APPELLANT I S NOT A 5 DIPTI N KHEMANI ITA NO. 5 12 0 /MUM/201 2 , A.Y.200 9 - 10 REG U LAR INCOME TAX FI L ER AND IF THE CONTENTION O F THE APPELLANT IS ACCEPTED AT THIS STAGE, THE TAXABLE AMOUNT, WHICH THE A.O. HAD MADE OUT, WILL GO UNTAXED WHICH WILL DEFEAT THE VERY PURPOSE OF TAXATION PROVISION. UNDER THE CIRCUMSTANCES, APPELLANT'S APPEAL IS DISMISSED. 5. AS COULD BE SEEN FROM THE ABOVE, LD. CIT (APPEALS) DISMISSED THE APPEAL OF THE ASSESSEE FOR THE REASON THAT THE ASSESSEE COULD NOT PROVE THAT THE PROPERTY BELONGS TO HER HUSBAND AND SHE IS A MERE SIGNATORY TO THE DOCUMENT. THE FACTS BORNE OUT FROM THE REC ORD BEFORE US SHOWS THAT THE ASSESSEE ALONG WITH HER HUSBAND PURCHASED THE SAID PROPERTY IN QUESTION AND SOLD THE SAME. THEREFORE THE JOINT OWNERSHIP OF THE PROPERTY CANNOT BE DENIED. TO THIS EXTENT WE AGREE WITH THE LD. CIT (APPEALS). HOWEVER, THE LD. CIT (APPEALS) HAVING OBSERVED THAT WHEN A PROPERTY IS OWNED IT DEFINITELY ATTRACTS CAPITAL GAINS AND HAS TO BE BORNE BY THE OWNER OR CO - OWNER IN PROPORTION TO THEIR RESPECTIVE SHARES , T HE DECISION TO AFFIRM THE ORDER OF THE ASSESSING OFFICER IN ASSESSING THE ENTIRE SALE CONSIDERATION UNDER THE HEAD INCOME FROM OTHER SOURCES IS NOT CORRECT . THEREFORE, WE HOLD THAT THE SALE CONSIDERATION RECEIVED BY THE ASSESSEE FROM THE SALE OF THE PROPERTY SHOULD BE ASSESSED UNDER THE HEAD INCOME FROM CAPITAL GAINS ONLY. FROM THE RECORD PLACED BEFORE US, WE FIND THAT THE SUBJECT PROPERTY WAS PURCHASED BY THE ASSESSEE IN THE JOINT NAMES OF THE ASSESSEE AS WELL AS HER HUSBAND VIDE AGREEMENT DATED 15.05.2001 FROM SHETH DEVELOPERS LTD. FOR A SALE CONSIDERATION OF RS.9,05,625/ - AND THE SAID FLAT WAS SOLD BY THE ASSESSEE VIDE AGREEMENT FOR SALE DATED 23.10.2008 TO MR RAJU SONI & MRS SHOBHANA B SONI FOR CONSIDERATION OF RS.36,51,000/ - . IN THE CIRCUMSTANCES, WE ARE OF THE VIEW 6 DIPTI N KHEMANI ITA NO. 5 12 0 /MUM/201 2 , A.Y.200 9 - 10 THAT THE ASSESSING OFFICER SHOULD COMPUTE THE LONG TER M CAPITAL GAINS INSTEAD OF ASSESSING THE ENTIRE SALE CONSIDERATION AS INCOME FROM OTHER SOURCES. THUS, WE RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER TO COMPUTE THE CAPITAL GAINS IN THE HAND OF THE ASSESSEE AS WELL AS IN THE HANDS OF THE CO - OW NER OF THE PROPERTY I.E. THE ASSESSEES HUSBAND IN THE LIGHT OF OUR OBSERVATIONS AND AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THE 10 TH DAY OF MARCH 2017 . SD/ - SD/ - RA JESH KUMAR C.N.PRASAD / / ACCOUNTANT MEMBER JUDICIAL MEMBER / MUMBAI; / DATED 10 / 0 3 / 2017 LR, SPS 7 DIPTI N KHEMANI ITA NO. 5 12 0 /MUM/201 2 , A.Y.200 9 - 10 / COPY OF THE ORDER FORWARDED TO : / BY ORDER , ( ASSTT. REGISTRAR) , / ITAT, MUM 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. // TRUE COPY / /