P.Mary Albert, Coimbatore V. ITO, Coimbatore

ITA 538/CHNY/2014

• Counselvise Citation: 53821714 RSA 2014
• Duration Of Justice: 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-05-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 06-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T N BETGERI IRS
• Assessee Lawyers: J SREE VIDYA
• Section: 147; 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . . . , . . !' , # '$ % BEFORE DR. O.K.NARAYANAN, VICE-PRESIDENTAND SHRI S.S. GODARA, JUDICIAL MEMBER ./ ITA NO. 538/MDS/2014 # & '& / ASSESSMENT YEAR : 2009-10 SMT. P. MARY ALBERT, 331, 332, BHARATHIAR ROAD, SIDHAPUDUR, COIMBATORE - 641 044. PAN : AUPPM 0099 Q V. THE INCOME TAX OFFICER, WARD II(2), COIMBATORE 641 018. ()*/ APPELLANT) (,-)*/ RESPONDENT) )* . / APPELLANT BY : MS. J. SREE VIDYA, ADVOCATE ,-)* . / RESPONDENT BY : SHRI T.N. BETGERI, IRS, JCIT / . 01 / DATE OF HEARING : 8 TH MAY, 2014 2!' . 01 / DATE OF PRONOUNCEMENT : 8 TH MAY, 2014 / O R D E R PER DR.O.K.NARAYANAN, VICE-PRESIDENT THIS APPEAL FILED BY THE ASSESSEE RELATES TO THE ASSESSMENT YEAR 2009-10. THE APPEAL IS DIRECTED AG AINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-I AT - - I.T.A. NO. 538/MDS/14 2 COIMBATORE, PASSED ON 3.10.2013. THE APPEAL ARISES OUT OF THE ASSESSMENT COMPLETED UNDER SECTION 143(3) READ WITH SECTION 147 OF THE INCOME-TAX ACT, 1961. 2. THERE IS A DELAY OF 94 DAYS IN FILING THIS APPEA L BEFORE THE TRIBUNAL. ON GOING THROUGH THE FACTS AND CIRCUMSTA NCES EXPLAINED BY THE ASSESSEE IN THE AFFIDAVIT ACCOMPAN YING THE CONDONATION PETITION, WE FIND THAT THE DELAY WAS CA USED FOR EXCUSABLE CAUSES. ACCORDINGLY, THE DELAY IN FILING THIS APPEAL IS CONDONED AND THE APPEAL IS ADMITTED IN ROLLS OF THE TRIBUNAL. 3. LATE SHRI S.K. NALLAMUTHU WAS THE HUSBAND OF THE ASSESSEE. HE WAS AN EX-SERVICEMAN AND THEREAFTER H E WAS WORKING WITH COIMBATORE TRANSPORT CORPORATION. HE PURCHASED A PROPERTY IN THE NAME OF HIS WIFE SMT. P. MARY ALB ERT ON 8.6.1972. SHE WAS WORKING AS AN ELEMENTARY SCHOOL TEACHER. AFTER THE DEATH OF SHRI S.K. NALLAMUTHU, THE ASSESS EE ALONGWITH HER TWO SONS ENTERED INTO AN ORAL AGREEMENT TO SHAR E THE PROPERTY AMONG THEMSELVES IN EQUAL PROPORTIONS. TH E ASSESSEE, SMT. P. MARY ALBERT AND HER TWO SONS ARE THE LEGAL HEIRS OF LATE SHRI S.K. NALLAMUTHU. BASED ON THE ORAL AGREEMENT, ASSESSEES - - I.T.A. NO. 538/MDS/14 3 TWO SONS CONTRIBUTED TOWARDS CONSTRUCTION OF A PROP ERTY IN 1985 AND THEY WERE JOINTLY ENJOYING THE PROPERTY SINCE T HEN. 4. THEREAFTER, IN THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER APPEAL, THE SAID PROPERTY WAS SOLD AND ON THE BASIS OF THE ORAL AGREEMENT, ASSESSEE AND HE R TWO SONS DIVIDED THE CONSIDERATION AMONG THEMSELVES, EQUALLY AS CO- OWNERS OF THE PROPERTY. 5. IN THE FOLLOWING CAPITAL GAINS ASSESSMENT, THE A SSESSING OFFICER HELD THAT THE ASSESSEE WAS THE SOLE OWNER O F THE LAND AND HER SONS HELPED HER IN CONSTRUCTING THE BUILDIN G ALONE AND THE OWNERSHIP OF THE LAND WAS NEVER ASSIGNED TO HER SONS. ACCORDINGLY, THE ASSESSING OFFICER HELD THAT THE AS SESSEE IS THE SOLE OWNER OF THE LAND AND SHE ALONE IS RESPONSIBLE FOR THE CAPITAL GAINS ASSESSMENT ON LAND. HE ACCORDINGLY C OMPLETED THE ASSESSMENT TREATING THE ASSESSEE AS THE SOLE OWNER OF THE LAND. THIS ASSESSMENT WAS CONFIRMED IN THE FIRST APPEAL. THEREFORE, THE SECOND APPEAL BEFORE US. 6. THE SOLE GROUND RAISED BY THE ASSESSEE IS THAT S HE WAS NOT THE ONLY OWNER OF THE LANDED PROPERTY AND HER T WO SONS WERE - - I.T.A. NO. 538/MDS/14 4 ALSO HAVING EQUAL RIGHTS AND AS SUCH, SHE WAS IN FA CT ACCOUNTABLE ONLY TO 1/3 RD OF THE SALE CONSIDERATION OF THE LAND. 7. WE HEARD BOTH SIDES IN DETAIL. IN THE PRESENT C ASE, THERE IS NO DISPUTE REGARDING BASIC FACTS. THE ASSESSING OFFICER HIMSELF HAS ACCEPTED THE CONTENTION OF THE ASSESSEE THAT THE FUNDS NECESSARY FOR CONSTRUCTING THE BUILDING WERE PROVIDED BY THE ASSESSEES TWO SONS. THIS ITSELF SHOWS THAT TH E TWO SONS OF THE ASSESSEE HAD AN INTEREST IN THE LANDED PROPERTY . OTHERWISE, THERE IS NO REASON WHY THE TWO GROWN UP SONS OF THE ASSESSEE HAVE GIVEN FUNDS FOR THE CONSTRUCTION OF THE BUILDI NG. 8. APART FROM THE ABOVE PRIMA FACIE REASON, IT IS ALSO NECESSARY TO LOOK INTO THE FACTS OF THE CASE. THER E IS NO DOUBT THAT THE LAND WAS PURCHASED BY THE LATE HUSBAND OF THE ASSESSEE. EVEN THOUGH THE PROPERTY WAS PURCHASED I N THE NAME OF THE ASSESSEE, IT DID NOT MEAN THAT THE PROPERTY ENTIRELY BELONGED TO HER. IT IS VERY COMMON IN INDIAN FAMIL IES FOR THE HUSBAND TO PURCHASE PROPERTY IN THE NAME OF WIFE, P ARENTS PURCHASING PROPERTY IN THE NAME OF CHILDREN, ETC. THESE ARE MATTERS OF FAMILY ARRANGEMENT. THIS IS NOT A CASE OF BUSINESS - - I.T.A. NO. 538/MDS/14 5 TRANSACTION OR TRANSACTIONS FORMALLY ENTERED INTO O N THE BASIS OF ANY LAW. THIS IS MAINLY BASED ON PERSONAL LAW OF T HE PARTIES. IN THE PRESENT CASE, THERE IS NO DOUBT THAT THE FUNDS NECESSARY FOR PURCHASING THE LAND WERE PROVIDED BY LATE SHRI S.K. NALLAMUTHU. AS THE HEAD OF THE FAMILY, HE PURCHASED THE LAND IN THE NAME OF HIS WIFE, THE ASSESSEE. THAT MAY BE FOR HUSBANDS PRECAUTION THAT AFTER HIS TIME, HIS WIFE SHOULD BE SECURED IN LIFE SO THAT HE MIGHT HAVE THOUGHT THAT THE PROPERTY COULD BE PASSE D ON TO HIS CHILDREN ONLY AFTER THE DEATH OF THE ASSESSEE OR ON LY WITH HER CONSENT. THESE ARE ALL WIDELY ACCEPTED FAMILY ARRA NGEMENTS. THEREFORE, THERE IS NOTHING TO SUSPECT THE MOTIVES OF THE PARTIES OR THE STATEMENT OF THE PARTIES. 9. ONCE IT IS SEEN THAT THE PROPERTY DE FACTO BELONGED TO LATE SHRI S.K. NALLAMUTHU, IT GOES WITHOUT SAYING T HAT THE PRESENT ASSESSEE AS WELL AS HER TWO SONS HAVE EQUAL RIGHTS OVER THE SAID PROPERTY. WHEN THAT IS THE CASE, WHETHER THERE IS AN ORAL AGREEMENT OR NOT, IT IS INCUMBENT UPON EVERYON E TO SEE THAT EITHER THE PROPERTY IS DIVIDED INTO 1/3 RD EACH OR THE CONSIDERATION ON THE SALE OF THE PROPERTY BE APPORTIONED EQUALLY BETWEEN THE THREE CLAIMANTS. THAT ALONE HAS HAPPENED IN THE PR ESENT CASE. - - I.T.A. NO. 538/MDS/14 6 10. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, IT IS NOT POSSIBLE TO HOLD THAT THE ASSESSEE WAS THE ONLY OWN ER OF THE SAID LAND. THE ASSESSING OFFICER HAS BEEN CARRIED AWAY BY THE TECHNICALITIES THAT THE LAND WAS PURCHASED IN THE N AME OF THE ASSESSEE AND THE CONSIDERATION ON SALE OF THE PROPE RTY WAS PAID TO THE INDIVIDUAL NAME OF THE ASSESSEE. THESE ARE MATTERS OF CONVENIENCE FOR THE PURPOSE OF FACILITATING TRANSAC TIONS. IT IS NECESSARY TO LOOK INTO THE PITH AND SUBSTANCE OF TH E TRANSACTION RATHER THAN ITS TECHNICAL OUTER SHELL. 11. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ACCEPT THE CONTENTION OF THE ASSESSEE AND HOLD THAT THE ASSESS EE IS ENTITLED TO 1/3 RD OF THE CONSIDERATION ALONE. THE ASSESSING OFFICER IS ACCORDINGLY DIRECTED TO ASSESS THE CAPITAL GAINS IN THE HANDS OF THE ASSESSEE AT 1/3 RD OF THE CONSIDERATION ATTRIBUTABLE TO THE TRANSFER OF THE LAND. 12. IN RESULT, THIS APPEAL FILED BY THE ASSESSEE IS ALLOWED. - - I.T.A. NO. 538/MDS/14 7 ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON THURSDAY, THE 8 TH OF MAY, 2014 AT CHENNAI. SD/- SD/- (S.S. GODARA) (DR. O.K. NARAYANAN) ( . . !') ( . . . ) # '$ /JUDICIAL MEMBER /VICE-PRESIDENT /CHENNAI, 4' /DATED, THE 8 TH MAY, 2014. KRI. '5 . ,#067 87'0 /COPY TO: 1. )* /APPELLANT 2. ,-)* /RESPONDENT 3. / 90 () /CIT(A)-I, COIMBATORE 4. / 90 /CIT-I, COIMBATORE 5. 7: ,#0# /DR 6. & ; /GF.