R.S.Jeevarathinam, CHENNAI V. ACIT, CHENNAI

ITA 541/CHNY/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 8817 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 17-06-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 08-03-2016
• Court: TRIBUNAL
• Department Lawyers: SUPRIYO PAL
• Assessee Lawyers: T VASUDEVAN
• Keywords: Gift

Judgement Text

, - , IN THE INCOME TAX APPELLATE TRIBUNAL SMC-B BENCH : CHENNAI . . . , [ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER ] ./ I.T.A.NO.541/MDS/2016 / ASSESSMENT YEAR : 2005-06 SHRI R.S.JEEVARATHINAM NO.919, 13 TH MAIN ROAD ANNA NAGAR CHENNAI 600 040 VS. THE ASSTT. COMMISSIONER OF INCOME-TAX NON-CORPORATE CIRCLE 7 CHENNAI [PAN AAIPJ 0975 D] ( !' / APPELLANT) ( #$!' /RESPONDENT) / APPELLANT BY : SHRI T. VASUDEVAN, ADVOCATE /RESPONDENT BY : SHRI SUPRIYO PAL, JCIT / DATE OF HEARING : 17 - 0 6 - 2016 / DATE OF PRONOUNCEMENT : 15 - 0 7 - 2016 / O R D E R THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-7, CHENNA I, DATED 13.1.2010 AND PERTAINS TO ASSESSMENT YEAR 2005-06. 2. SHRI T. VASUDEVAN, LD. COUNSEL FOR THE ASSESSEE SUB MITTED THAT THE ASSESSING OFFICER ASSESSED A SUM OF ` 49,45,600/- WHICH REPRESENT THE SALE CONSIDERATION OF AN IMMOVABLE PR OPERTY OWNED BY A THIRD PARTY. ACCORDING TO THE LD. COUNSEL, THE AS SESSEE IS NOT THE OWNER OF THE LAND. THE ASSESSEE IS ONLY A POWER O F ATTORNEY AGENT. ITA NO.541/16 :- 2 -: MERELY BECAUSE THE ASSESSEE HAS RECEIVED THE MONEY ON BEHALF OF THE LAND OWNER IN HIS CAPACITY AS POWER OF ATTORNEY, AC CORDING TO THE LD. COUNSEL, THE SAME CANNOT BE ASSESSED IN THE HANDS O F THE ASSESSEE. THEREFORE, THE CIT(A) IS NOT JUSTIFIED IN CONFIRMIN G THE ORDER OF THE ASSESSING OFFICER. 3. ON THE CONTRARY, SHRI SUPRIOYO PAL, LD. DEPARTMENT AL REPRESENTATIVE SUBMITTED THAT THE ASSESSEE EXECUTE D A SALE DEED AND RECEIVED A SUM OF ` 49,45,600/-. REFERRING TO THE ORDER OF THE CIT(A) , THE LD. DR POINTED OUT THAT THE ASSESSEE EXECUTED THE SALE DEED ON 30.3.2005 TRANSFERRING THE PROPERTY TO ONE SHRI Y. BALAKRISHNA REDDY. THE ASSESSEE HAS RECEIVED THE SALE CONSIDERATION T HROUGH CHEQUES DRAWN IN HIS NAME. THE ASSESSEE CLAIMS THAT THOUG H THE CHEQUES WERE DRAWN IN HIS NAME, THE PAYMENTS WERE MADE TO T HE LEGAL HEIRS OF THE LAND OWNER. NO MATERIAL IS AVAILABLE ON RECORD TO SUGGEST THAT THE PAYMENTS WERE MADE TO THE LEGAL HEIRS OF THE LAND O WNER. ACCORDING TO THE LD. DR, WHEN THE ASSESSEE HAS RECEIVED THE MONEY AND EXECUTED THE SALE DEED EITHER AS OWNER OR A POWER O F ATTORNEY AGENT, HE IS LIABLE TO PAY INCOME TAX ON THE CAPITAL GAIN ARISING OUT OF THE SALE OF LAND. 4. I HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER S IDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. ADM ITTEDLY, THE ITA NO.541/16 :- 3 -: ASSESSEE IS A POWER OF ATTORNEY AGENT OF LEGAL HEIR S OF SHRI S. ANBURAJ. SHRI S. ANBURAJ WAS ALLOTTED A PLOT AT ANNA NAGAR W EST EXTENSION BY THE TAMILNADU HOUSING BOARD AND AFTER HIS DEATH, TH E ALLOTMENT WAS TRANSFERRED TO HIS LEGAL HEIRS VIZ. SHRI S.ANBURAJ S WIFE, SMT SHANTHI AND HIS SON SHRI A. SIDDHARTHAN. THE LEGAL HEIRS O F LATE SHRI S.ANBURAJ IN WHOSE FAVOUR THE SALE DEED WAS EXECUTED BY TAMIL NADU HOUSING BOARD DECIDED TO SELL THE PROPERTY TO ONE SHRI Y. B ALAKRISHNA REDDY FOR A TOTAL CONSIDERATION OF ` 49,45,600/-. SINCE THEY ARE RESIDING AT MADURAI, THEY APPOINTED THE ASSESSEE BEFORE THIS T RIBUNAL AS POWER OF ATTORNEY AGENT TO SELL THE ABOVE MENTIONED PROPERTY . ACCORDINGLY, IT APPEARS THAT THE ASSESSEE IN HIS CAPACITY AS POWER OF ATTORNEY AGENT EXECUTED THE SALE DEED IN FAVOUR OF SHRI Y. BALAKRI SHNA REDDY. THESE ADMITTED FACTS CLEARLY SHOW THAT THE ASSESSEE IF A T ALL RECEIVED THE MONEY, IT IS IN HIS CAPACITY AS POWER OF ATTORNEY A GENT ON BEHALF OF THE LEGAL HEIRS OF LATE SHRI S. ANBURAJ. THEREFORE, T HE ASSESSEE HAS NO RIGHT TO WITHHOLD THE MONEY RECEIVED FROM SHRI Y. B ALAKRISHNA REDDY FOR EXECUTING THE SALE DEED ON BEHALF OF LEGAL HEIR S OF LATE SHRI S. ANBURAJ. THIS TRIBUNAL IS OF THE CONSIDERED OPINI ON THAT RECEIPT OF THE MONEY CANNOT BE CONSTRUED AS INCOME IN THE HANDS OF THE ASSESSEE. UNLESS THE ASSESSEE HAS RIGHT TO RETAIN THE MONEY, THE RECEIPT CANNOT BE TREATED AS INCOME IN THE HANDS OF THE ASSESSEE. IN THE CASE BEFORE US EVEN THOUGH THE ASSESSEE RECEIVED THE MONEY, HE HAS NO RIGHT TO ITA NO.541/16 :- 4 -: RETAIN THE SAME. THE MONEY WAS RECEIVED ON BEHALF OF THE LEGAL HEIRS OF LATE SHRI S. ANBURAJ AND THE SAME HAS TO BE PAID TO THE LEGAL HEIRS. IT IS NOBODYS CASE THAT THE LEGAL HEIRS OF LATE SH RI S. ANBURAJ GIFTED THE MONEY TO THE PRESENT ASSESSEE. IN THE ABSENCE OF ANY MATERIAL TO INDICATE THAT THE LEGAL HEIRS OF LATE SHRI S. ANBUR AJ HAVE WAIVED THEIR RIGHT TO RECEIVE THE MONEY FROM THE SALE CONSIDERAT ION RECEIVED BY THE ASSESSEE TO THE EXTENT OF ` 49,45,600/-, IT CANNOT BE TREATED AS INCOME OF THE ASSESSEE. THEREFORE, THE ORDERS OF THE LOW ER AUTHORITIES ARE SET ASIDE AND THE ASSESSING OFFICER IS DIRECTED TO DELE TE THE ADDITION OF ` 49,45,600/-. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH JULY, 2016, AT CHENNAI. SD/- ( . . . ! ) (N.R.S. GANESAN) / JUDICIAL MEMBER '# / CHENNAI $% / DATED: 15 TH JULY, 2016 RD %&'' ()'*) / COPY TO: ' 1 . / APPELLANT 4. ' + / CIT 2. / RESPONDENT 5. ),-' . / DR 3. ' +'/! / CIT(A) 6. -0'1 / GF